Dreyfus Premier
California Municipal
Bond Fund
ANNUAL REPORT January 31, 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
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. In addition, issuers of securities in
which the fund invests may be adversely affected by year 2000-related problems.
This could have an impact on the value of the fund's investments and its share
price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
16 Financial Highlights
19 Notes to Financial Statements
24 Report of Independent Auditors
25 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Premier California Municipal Bond Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier California
Municipal Bond Fund, covering the 12-month period from February 1, 1999 through
January 31, 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 three times during the summer and fall of 1999. Higher interest rates led
to some erosion of municipal bond prices, especially toward the end of 1999.
Municipal bonds were also adversely affected by supply-and-demand
considerations. These technical influences have recently caused the yields of
tax-exempt bonds to rise to very attractive levels compared to the after-tax
yields of taxable bonds of comparable maturity and credit quality. This is
especially true for investors in the higher federal and state income tax
brackets.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier California Municipal Bond Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
February 15, 2000
DISCUSSION OF FUND PERFORMANCE
Joseph Darcy, Portfolio Manager
How did Dreyfus Premier California Municipal Bond Fund perform during the
period?
For the 12-month period ended January 31, 2000, the fund produced a total return
of -8.42% for its Class A shares, -8.89% for its Class B shares and -9.07% for
its Class C shares.(1) In comparison, the Lipper California Municipal Debt Funds
category average achieved a -6.91% total return for the same period.(2)
We attribute the fund's negative returns to a declining municipal bond market
and a rising interest-rate environment. The fund's relative underperformance was
primarily the result of the fund' s duration management strategy, which was
longer than the Lipper average's duration (duration is a measure of sensitivity
to changing interest rates) . The fund was also adversely affected by its
holdings of relatively high yielding bonds, whose prices were highly volatile
during the reporting period.
What is the fund's investment approach?
Our goal is to seek a high level of federal and California state tax-exempt
income from a diversified portfolio of municipal bonds. To achieve this
objective, we employ two primary strategies. First, we attempt to add value by
evaluating interest-rate trends and supply-and-demand factors. Based on that
assessment, we select the individual tax-exempt bonds that we believe are most
likely to provide the highest returns with the least risk. We look at such
criteria as the bond's yield, price, age, the creditworthiness of its issuer,
and any provisions for early redemption.
Second, we actively manage the fund' s average duration in anticipation of
temporary supply-and-demand changes. If we expect the supply of newly issued
bonds to increase temporarily, we may reduce the fund's average duration to make
cash available for the purchase of higher The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
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
average duration to maintain current yields for as long as practical. At other
times, we try to maintain a "neutral" average duration of about seven years.
What other factors influenced the fund's performance?
The fund's performance was hurt by a difficult investment environment during the
reporting period, which included rising interest rates and a fall-off in demand
from institutional investors.
When the reporting period began, investors had become concerned that strong
economic growth might rekindle long-dormant inflationary pressures. In fact, in
an attempt to forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates three times during the summer and fall of 1999,
causing most bond prices to fall. An additional interest rate hike was
implemented by the Federal Reserve Board just a few days after the reporting
period ended, for a total increase of 100 basis points from February 1, 1999,
the start of the reporting period, through February 15, 2000, the date of this
report.
Municipal bond prices also fell because of adverse supply-and-demand influences.
For a variety of reasons, institutional investors participated less in the
tax-exempt market over the past year, which reduced overall demand and drove
municipal bond prices down significantly. As a result, municipal bonds --
including those from California issuers -- are currently offering tax-exempt
yields that compare very favorably with the taxable yields on U.S. Treasury
securities, after adjusting for taxes.
What is the fund's current strategy?
Our strategy has been to reduce the volatility of the fund's share price and
enhance its income stream in order to improve overall performance. Accordingly,
we have gradually shortened the fund's average duration in an attempt to reduce
the eroding effects of higher interest rates. A shorter average duration also
put the fund in a better position to capture higher yields as they became
available.
To achieve a shorter duration, we sold some of our longer maturity bonds that
were priced at a discount to face value. Many of these discount bonds were
particularly hard-hit in the difficult investment environment of the past year.
We reinvested the proceeds of those sales primarily in high quality tax-exempt
bonds that were priced at or slightly above face value. These new purchases also
generally included protection from the possibility that they may be redeemed --
or "called" -- by their issuers during the next several years.
Whenever possible, we have also been replacing some of the fund's smaller, less
liquid holdings with larger issues of current-coupon bonds, for which investor
demand and market liquidity tend to be greater. Finally, we have continued to
carefully improve the fund's credit quality: as of January 31, about 47% of the
fund' s holdings were rated triple-A and 71% were rated single-A or better.
February 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS
PAID, AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES
CHARGE IN THE CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT
DEFERRED SALES CHARGE IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B
AND CLASS C SHARES. HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD
HAVE BEEN LOWER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE SUCH THAT UPON
REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR
NON-CALIFORNIA RESIDENTS, AND SOME INCOME MAY BE SUBJECT TO THE
FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL
GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Premier
California Municipal Bond Fund Class A shares and the Lehman Brothers Municipal
Bond Index
((+)) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN CLASS A SHARES OF DREYFUS
PREMIER CALIFORNIA MUNICIPAL BOND FUND ON 1/31/90 TO A $10,000 INVESTMENT MADE
IN THE LEHMAN BROTHERS MUNICIPAL BOND INDEX ON THAT DATE. ALL DIVIDENDS AND
CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. PERFORMANCE FOR CLASS B AND CLASS C
SHARES WILL VARY FROM THE PERFORMANCE OF CLASS A SHARES SHOWN ABOVE DUE TO
DIFFERENCES IN CHARGES AND EXPENSES.
THE FUND INVESTS PRIMARILY IN CALIFORNIA MUNICIPAL SECURITIES AND ITS
PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT THE MAXIMUM INITIAL SALES
CHARGE ON CLASS A SHARES AND ALL OTHER APPLICABLE FEES AND EXPENSES. THE LEHMAN
BROTHERS MUNICIPAL BOND INDEX IS NOT LIMITED TO INVESTMENTS PRINCIPALLY IN
CALIFORNIA MUNICIPAL OBLIGATIONS AND DOES NOT TAKE INTO ACCOUNT CHARGES, FEES
AND OTHER EXPENSES. THE LEHMAN BROTHERS MUNICIPAL BOND INDEX, UNLIKE THE FUND,
IS AN UNMANAGED TOTAL RETURN PERFORMANCE BENCHMARK FOR THE LONG-TERM,
INVESTMENT-GRADE, GEOGRAPHICALLY UNRESTRICTED TAX-EXEMPT BOND MARKET, CALCULATED
BY USING MUNICIPAL BONDS SELECTED TO BE REPRESENTATIVE OF THE MUNICIPAL MARKET
OVERALL. 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.
<TABLE>
<CAPTION>
Average Annual Total Returns AS OF 1/31/00
Inception From
Date 1 Year 5 Years 10 Years Inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 11/10/86 (12.53)% 3.49% 5.49% --
WITHOUT SALES CHARGE 11/10/86 (8.42)% 4.46% 5.98% --
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (12.37)% 3.61% -- 4.08%
WITHOUT REDEMPTION 1/15/93 (8.89)% 3.92% -- 4.08%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 6/2/95 (9.94)% -- -- 2.36%
WITHOUT REDEMPTION 6/2/95 (9.07)% -- -- 2.36%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
((+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS B SHARES IS 4% AND
IS REDUCED TO 0% AFTER SIX YEARS, AT WHICH TIME CLASS B SHARES CONVERT TO CLASS
A SHARES.
((+)(+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS C SHARES IS 1%
FOR SHARES REDEEMED WITHIN ONE YEAR OF THE DATE OF PURCHASE.
</TABLE>
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
January 31, 2000
Principal
LONG-TERM MUNICIPAL INVESTMENTS--93.3% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CALIFORNIA--86.9%
Abag Finance Authority For Nonprofit Corporations
MFHR (Central Park Apartments) 5.50%, 7/1/2019 1,010,000 925,433
Alameda Corridor Transportation Authority, Transit Revenue
4.75%, 10/1/2025 (Insured; MBIA) 2,000,000 1,615,480
California:
6.125%, 10/1/2011 (Insured; FGIC) 2,875,000 3,101,262
4.75%, 2/1/2020 3,000,000 2,503,770
California Educational Facilities Authority, College and University
Revenue:
(Claremont University Center) 5.25%, 3/1/2018 3,070,000 2,800,454
(Stanford University) 5.125%, 1/1/2031 1,055,000 901,635
California Health Facilities Financing Authority, Revenue
(Cedars-Sinai Medical Center) 6.25%, 12/1/2034 5,210,000 4,930,796
California Housing Finance Agency, Home Mortgage Revenue:
6.15%, 8/1/2016 3,000,000 3,003,930
6.70%, 8/1/2025 1,445,000 1,465,909
7.60%, 8/1/2030 685,000 689,466
California Public Works Board, LR
(Secretary of State) 6.50%, 12/1/2008 (Insured; AMBAC) 1,400,000 1,545,726
California Statewide Communities Development Authority, LR
(United Airlines Inc.):
5.70%, 10/1/2033 (Guaranteed; United Airlines Inc.) 5,000,000 4,168,000
5.625%, 10/1/2034 (Guaranteed; United Airlines Inc.) 7,000,000 5,758,550
Contra Costa County Public Finance Authority, Tax Allocation
Revenue (Pleasant Hill BART, North Richmond, Bay Point,
Oakley and Rodeo Redevelopment Project Areas)
5.125%, 8/1/2019 1,750,000 1,443,330
Contra Costa County Water District, Water Revenue
6%, 10/1/2011 (Insured; MBIA) 1,475,000 1,542,334
Delano, COP ( Delano Regional Medical Center)
5.25%, 1/1/2018 3,500,000 2,756,565
East Bay Municipal Utility District, Water System Revenue
5.25%, 6/1/2017 1,260,000 1,164,668
Escondido Improvement Board 5.70%, 9/2/2026 1,000,000 845,610
Fontana, Special Tax (Senior Community Facilities District
Number 2) 5.25%, 9/1/2017 (Insured; MBIA) 4,410,000 4,064,697
Fontana Public Financing Authority, Tax Allocation Revenue
(North Fontana Redevelopment Project) 7.25%, 9/1/2020 4,250,000 4,300,277
High Desert Memorial Health Care District, Revenue
5.40%, 10/1/2011 2,500,000 2,187,100
Los Angeles Department of Water and Power, Waterworks
Revenue 5%, 10/15/2015 (Insured; MBIA) 1,245,000 1,141,329
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
Madera County, COP (Valley Children's Hospital):
6.50%, 3/15/2008 (Insured; MBIA) 3,165,000 3,459,725
6.50%, 3/15/2009 (Insured; MBIA) 3,370,000 3,688,633
Metropolitan Water District of Southern California, Waterworks
Revenue 4.75%, 7/1/2022 7,925,000 6,488,911
Morgan Hill Improvement Board 5.60%, 9/2/2018 2,000,000 1,673,160
Napa County Flood Protection and Watershed Improvement
Authority 5%, 6/15/2018 (Insured; FGIC) 7,745,000 6,822,571
Natamos Unified School District
5.95%, 9/1/2021 (Insured; MBIA) 2,500,000 2,521,400
Nevada County, COP (Western Nevada Co. Solid Waste-
McCourtney Road Landfill) 7.50%, 6/1/2021 2,200,000 2,199,208
Northern California Power Agency, Public Power Revenue
(Hydroelectric Project No. 1)
6.30%, 7/1/2018 (Insured; MBIA) 6,000,000 6,345,480
Pasadena Unified School District
5.125%, 7/1/2015 (Insured; FGIC) 1,500,000 1,401,285
Riverside County, SFMR 7.80%, 5/1/2021 1,250,000 1,500,175
San Diego County, COP (Burnham Institute)
6.25%, 9/1/2029 2,800,000 2,629,984
San Joaquin Hills Transportation Corridor Agency, Toll
Road Revenue 5.50%, 1/15/2028 6,600,000 5,823,378
San Marino Unified School District 5.25%, 7/1/2013 1,160,000 1,146,208
San Mateo County Transportation District,
Sales Tax Revenue
5%, 6/1/2019 (Insured; FSA) 5,555,000 4,840,683
Santa Monica-Malibu Unified School District
5.25%, 8/1/2018 4,325,000 4,004,128
Simi Valley, Single Family Residential Mortgage Revenue
7.625%, 8/1/2022 665,244 (a) 113,091
Vista, MFHR (Vista Hacienda Project) 6.95%, 4/1/2017 3,000,000 3,095,580
West Covina Redevelopment Agency, Community Facilities
District Special Tax 6%, 9/1/2022 3,000,000 2,957,880
U.S. RELATED--6.4%
Puerto Rico Commonwealth Highway and Transportation
Authority, Revenue 5.50%, 7/1/2013 (Insured; MBIA) 4,750,000 4,756,460
Virgin Islands Public Finance Authority, Revenue
7.30%, 10/1/2018 3,100,000 3,587,165
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $131,435,271) 121,911,426
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--1.2% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA--.4%
Newport Beach, Revenue, VRDN (Hoag Memorial
Hospital) 2.95% (SBPA; Bank of America) 500,000 (b) 500,000
U.S. RELATED--.8%
Puerto Rico Highway and Transportation Authority,
Transportation Revenue, VRDN
2.85% (Insured; AMBAC, SBPA; Bank of Nova Scotia) 1,000,000 (b) 1,000,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $1,500,000) 1,500,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $132,935,271) 94.5% 123,411,426
CASH AND RECEIVABLES (NET) 5.5% 7,201,812
NET ASSETS 100.0% 130,613,238
</TABLE>
<TABLE>
<CAPTION>
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance MBIA Municipal Bond Investors Assurance
Corporation Insurance Corporation
COP Certificate of Participation MFHR Multi-Family Housing Revenue
FGIC Financial Guaranty Insurance Company SBPA Standby Bond Purchase Agreement
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
LR Lease Revenue VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 47.4
AA Aa AA 16.8
A A A 7.1
BBB Baa BBB 21.8
BB Ba BB 1.8
D D .1
F1 Mig1 SP1 1.2
Not Rated c Not Rated c Not Rated c 3.8
100.0
A NON-INCOME PRODUCING SECURITY.
B SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE-SUBJECT TO PERIODIC
CHANGE.
C SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
January 31, 2000
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 132,935,271 123,411,426
Cash 1,641,244
Receivable for investment securities sold 8,591,432
Interest receivable 2,162,773
Receivable for shares of Beneficial Interest subscribed 73,995
Prepaid expenses 11,246
135,892,116
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 57,552
Due to Distributor 34,415
Payable for investment securities purchased 5,057,748
Payable for shares of Beneficial Interest redeemed 72,530
Accrued expenses and other liabilities 56,633
5,278,878
- --------------------------------------------------------------------------------
NET ASSETS ($) 130,613,238
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 142,029,568
Accumulated net realized gain (loss) on investments (1,892,485)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (9,523,845)
- --------------------------------------------------------------------------------
NET ASSETS ($) 130,613,238
NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 115,926,001 13,518,038 1,169,199
Shares Outstanding 10,415,928 1,213,973 104,663
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.13 11.14 11.17
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Year Ended January 31, 2000
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 8,195,985
EXPENSES:
Management fee--Note 3(a) 832,787
Shareholder servicing costs--Note 3(c) 470,991
Distribution fees--Note 3(b) 97,613
Professional fees 43,855
Trustees' fees and expenses--Note 3(d) 30,230
Registration fees 28,375
Custodian fees 18,023
Prospectus and shareholders' reports 12,686
Loan commitment fees--Note 2 1,363
Miscellaneous 4,440
TOTAL EXPENSES 1,540,363
Less--reduction in management fee due to
undertaking by The Dreyfus Corporation--Note 3(a) (754)
NET EXPENSES 1,539,609
INVESTMENT INCOME--NET 6,656,376
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (1,900,088)
Net unrealized appreciation (depreciation) on investments (18,015,099)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (19,915,187)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (13,258,811)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended January 31,
----------------------------
2000 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 6,656,376 7,367,225
Net realized gain (loss) on investments (1,900,088) 3,964,179
Net unrealized appreciation (depreciation)
on investments (18,015,099) (2,541,169)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (13,258,811) 8,790,235
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (5,916,290) (6,401,755)
Class B shares (695,413) (919,057)
Class C shares (44,673) (46,413)
Net realized gain on investments:
Class A shares (726,609) (3,783,280)
Class B shares (96,299) (613,407)
Class C shares (6,133) (43,683)
TOTAL DIVIDENDS (7,485,417) (11,807,595)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 20,863,512 9,325,763
Class B shares 3,409,370 3,485,317
Class C shares 261,094 1,575,307
Dividends reinvested:
Class A shares 3,309,614 5,256,848
Class B shares 479,682 1,020,773
Class C shares 24,267 41,255
Cost of shares redeemed:
Class A shares (34,935,821) (19,595,241)
Class B shares (11,767,653) (5,219,821)
Class C shares (187,714) (1,464,119)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (18,543,649) (5,573,918)
TOTAL INCREASE (DECREASE) IN NET ASSETS (39,287,877) (8,591,278)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 169,901,115 178,492,393
END OF PERIOD 130,613,238 169,901,115
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended January 31,
-----------------------------
2000 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 1,742,064 726,279
Shares issued for dividends reinvested 277,244 409,278
Shares redeemed (2,936,467) (1,522,355)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (917,159) (386,798)
- --------------------------------------------------------------------------------
CLASS B(A)
Shares sold 286,524 270,452
Shares issued for dividends reinvested 39,981 79,423
Shares redeemed (974,196) (404,961)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (647,691) (55,086)
- --------------------------------------------------------------------------------
CLASS C
Shares sold 21,843 120,981
Shares issued for dividends reinvested 1,985 3,205
Shares redeemed (15,619) (114,721)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 8,209 9,465
A DURING THE PERIOD ENDED JANUARY 31, 2000, 682,104 CLASS B SHARES
REPRESENTING $8,281,050 WERE AUTOMATICALLY CONVERTED TO 682,636 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
Year Ended January 31,
------------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 12.78 13.00 12.58 12.97 12.24
Investment Operations:
Investment income--net .54 .56 .60 .65 .67
Net realized and unrealized gain (loss)
on investments (1.59) .12 .53 (.24) 1.02
Total from Investment Operations (1.05) .68 1.13 .41 1.69
Distributions:
Dividends from investment income--net (.54) (.56) (.61) (.64) (.67)
Dividends from net realized gain
on investments (.06) (.34) (.10) (.16) (.29)
Total Distributions (.60) (.90) (.71) (.80) (.96)
Net asset value, end of period 11.13 12.78 13.00 12.58 12.97
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) (8.42) 5.39 9.27 3.31 14.15
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .95 .94 .95 .92 .93
Ratio of net investment income
to average net assets 4.47 4.36 4.71 5.18 5.22
Portfolio Turnover Rate 54.74 101.36 103.75 39.76 92.42
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 115,926 144,855 152,416 163,030 185,187
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Year Ended January 31,
-------------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 12.79 13.01 12.59 12.98 12.25
Investment Operations:
Investment income--net .47 .50 .53 .59 .60
Net realized and unrealized gain (loss)
on investments (1.59) .12 .53 (.25) 1.02
Total from Investment Operations (1.12) .62 1.06 .34 1.62
Distributions:
Dividends from investment income--net (.47) (.50) (.54) (.57) (.60)
Dividends from net realized
gain on investments (.06) (.34) (.10) (.16) (.29)
Total Distributions (.53) (.84) (.64) (.73) (.89)
Net asset value, end of period 11.14 12.79 13.01 12.59 12.98
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) (8.89) 4.86 8.69 2.79 13.55
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.46 1.45 1.46 1.44 1.45
Ratio of net investment income
to average net assets 3.92 3.85 4.18 4.66 4.69
Portfolio Turnover Rate 54.74 101.36 103.75 39.76 92.42
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 13,518 23,810 24,942 20,341 21,530
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Year Ended January 31,
-------------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 12.82 13.04 12.61 12.98 12.98
Investment Operations:
Investment income--net .45 .47 .50 .54 .37
Net realized and unrealized gain (loss)
on investments (1.59) .12 .53 (.21) .29
Total from Investment Operations (1.14) .59 1.03 .33 .66
Distributions:
Dividends from investment income--net (.45) (.47) (.50) (.54) (.37)
Dividends from net realized gain
on investments (.06) (.34) (.10) (.16) (.29)
Total Distributions (.51) (.81) (.60) (.70) (.66)
Net asset value, end of period 11.17 12.82 13.04 12.61 12.98
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) (9.07) 4.63 8.42 2.67 7.90(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.70 1.67 1.68 1.77 4.42(c)
Ratio of net investment income
to average net assets 3.73 3.68 3.92 4.33 4.31(c)
Portfolio Turnover Rate 54.74 101.36 103.75 39.76 92.42
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 1,169 1,236 1,135 1,029 1
(A) FROM JUNE 2, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO JANUARY 31, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier California Municipal Bond 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 fund's investment objective is to
maximize current income exempt from Federal and State of California personal
income taxes to the extent consistent with the preservation of capital. The
Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: Class A, Class B and Class C.
Class A shares are subject to a sales charge imposed at the time of purchase,
Class B shares are subject to a contingent deferred sales charge ("CDSC")
imposed on Class B redemptions made within six years of purchase (five years for
shareholders beneficially owning Class B shares on November 30, 1996) and Class
C shares are subject to a CDSC imposed on Class C shares redeemed within one
year of purchase. Other differences between the classes include the services
offered to and the expenses borne by each class and certain voting rights.
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 options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service (the "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 The
Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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. Options and financial futures on municipal and U.S.
treasury securities are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market on each business day. Investments not
listed on an exchange or the national securities market, or securities for which
there were no transactions, are valued at the average of the most recent bid and
asked prices. Bid price is used when no asked price is available.
(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 $9,464 during the period
ended January 31, 2000, based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
The fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the fund to declare dividends
daily from investment income-net. Such dividends are paid monthly. Dividends
from net realized capital gain are normally declared and paid annually, but the
fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
" Code" ). To the
extent that net realized capital gain can be offset by capital loss carryovers,
if any, 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 $885,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to January 31, 2000. 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, the carryover expires in fiscal 2008.
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
January 31, 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 .55 of 1% of the value of the fund's average
daily net assets and is payable monthly. The Manager has undertaken from January
26, 2000 through January 31, 2001, to reduce the management fee paid by the fund
to the extent that the fund's aggregate annual expenses, exclusive of Rule 12b-1
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Distribution Plan fees, taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed an annual rate of .97 of 1% of the value of the
fund' s average daily net assets. The reduction in management fee, pursuant to
the undertaking, amounted to $754 during the period ended January 31, 2000.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$2,133 during the period ended January 31, 2000, from commissions earned on
sales of the fund's shares.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended January 31, 2000, Class B and
Class C shares were charged $88,629 and $8,984, respectively, pursuant to the
Plan.
(C) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets for the provision of certain services. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended January 31, 2000, Class A, Class B and Class C
shares were charged $331,231, $44,314 and $2,995, respectively, 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 January 31, 2000, the fund was charged $61,793 pursuant to the transfer
agency agreement.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $2,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended January 31, 2000, amounted to
$78,164,512 and $96,844,104, respectively.
At January 31, 2000, accumulated net unrealized depreciation on investments was
$9,523,845, consisting of $1,318,521 gross unrealized appreciation and
$10,842,366 gross unrealized depreciation.
At January 31, 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).
NOTE 5--Subsequent Event:
At a meeting of the fund's Board of Trustees held on Jaunary 26, 2000, the Board
approved the termination of the fund' s Distribution Agreement with Premier
Mutual Fund Services, Inc., and approved a new Distribution Agreement with
Dreyfus Service Corporation. The new Distribution Agreement with Dreyfus Service
Corporation is slated for effectiveness on March 16, 2000.
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees Dreyfus Premier California Municipal Bond
Fund
We have audited the accompanying statement of assets and liabilities of Dreyfus
Premier California Municipal Bond Fund, including the statement of investments,
as of January 31, 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 the financial highlights. Our procedures included
confirmation of securities owned as of January 31, 2000 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 Premier California Municipal Bond Fund at January 31, 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
March 3, 2000
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended January 31, 2000:
-- all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are
California residents, California personal income taxes), and
-- The fund hereby designates $.0645 per share as a long-term capital gain
distribution paid on July 15, 1999.
As required by Federal tax law rules, shareholders will receive notification of
their portion of the fund' s taxable ordinary dividends and capital gains
distributions paid for the 2000 calendar year on Form 1099-DIV which will be
mailed by January 31, 2001.
The Fund
For More Information
Dreyfus Premier California Municipal Bond Fund
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 your financial representative or 1-800-554-4611
BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss
Boulevard Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation PCCAR001
\
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS PREMIER CALIFORNIA MUNICIPAL BOND FUND CLASS
A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
DREYFUS
PERIOD LEHMAN BROTHERS PREMIER CALIFORNIA
MUNICIPAL MUNICIPAL BOND FUND
BOND INDEX * (CLASS A SHARES)
1/31/90 10,000 9,547
1/31/91 10,924 10,450
1/31/92 12,116 11,496
1/31/93 13,307 12,620
1/31/94 14,938 14,339
1/31/95 14,406 13,717
1/31/96 16,575 15,657
1/31/97 17,211 16,176
1/31/98 18,951 17,675
1/31/99 20,211 18,628
1/31/00 19,479 17,059
* Source: Lipper Analytical Services, Inc.
