Dreyfus Premier
State Municipal
Bond Fund,
Connecticut Series
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
8 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund, Connecticut Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Connecticut Series, 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, Samuel Weinstock.
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 Premier State Municipal Bond Fund,
Connecticut Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Samuel Weinstock, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Connecticut Series, perform
during the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -3.06% total return, its Class B shares provided a -3.66% total return and its
Class C shares provided a -3.89% total return.(1) In comparison, the Lipper
Connecticut Municipal Debt Funds category average provided a -2.61% total return
for the same period.(2)
In a rising interest-rate environment, which caused most municipal bond prices
to decline during the reporting period, the fund's relative performance lagged
that of its category average. We attribute our underperformance to the fund's
focus on income. Because of this focus, the fund's total return tends to
outperform the averages during declining markets, but may lag during rallies
such as the one that prevailed during the first quarter of 2000.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Connecticut tax-exempt income
as is practical without undue risk from a diversified portfolio of municipal
bonds. To achieve this objective, we employ four primary strategies. First, we
strive to identify the maturity range that we believe will provide the most
favorable returns over the next two years. Second, we evaluate issuers' credit
quality to find bonds that we believe provide high yields at attractive prices.
Third, we look for bonds with attractive high interest payments, even if they
sell at a premium to face value. Fourth, we assess individual bonds' early
redemption features, focusing on those that cannot be redeemed soon by their
issuers. Typically, the bonds we select for the portfolio will have several of
these qualities.
We also use computer models to evaluate the likely performance of bonds under
various market scenarios, including a .25% rise in interest rates and a .50%
decline. When we find securities that we believe
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
will provide participation when the market rises and some protection against
declines, we tend to hold them for the long term.
What other factors influenced the fund's performance?
Although the fund's performance was hurt by a difficult investment environment
during the final two months of 1999, the first four months of 2000 generally
provided better market conditions and a market rally. While the fund's
performance lagged that of its peer group, 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,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, causing
most bond prices to fall, for a total increase of 1.25 percentage points.
Municipal bond prices also fell during November and December, 1999, because of
adverse supply-and-demand influences. For a variety of reasons, institutional
investors such as insurance companies and mutual funds 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 in
1999. This supply reduction, combined with robust demand from individual
investors, helped support a rebound of municipal bond prices.
What is the fund's current strategy?
We have changed the balance of assets in the fund from approximately 85%
income-oriented bonds and about 15% total return-oriented bonds to a target of
75% and 25% , respectively. This shift is part of our continuing effort to
upgrade the fund's liquidity profile by gradually moving away from the types of
bonds that may have underperformed the market over the past six months.
Accordingly, we have sold some of our longer term, lower rated holdings,
including bonds issued by industrial development regions (IDRs) and health care
facilities. We have attempted to invest the proceeds of these sales in shorter
term bonds with greater protection from early redemptions. We have found such
opportunities primarily among insured bonds that we believe will appeal to
retail investors if and when the time comes to sell them. We have also found
attractive opportunities among non-callable Puerto Rico bonds, which are
tax-exempt for Connecticut residents.
These changes in the fund's asset mix have modestly affected our duration
management strategy. At about 8.35 years as of April 30, the fund's average
duration -- a measure of sensitivity to changing interest rates -- is slightly
longer than it was when the reporting period began.
May 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-CONNECTICUT 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 State
Municipal Bond Fund, Connecticut Series 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 STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES (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. 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 CONNECTICUT 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 INDEX
IS NOT LIMITED TO INVESTMENTS PRINCIPALLY IN CONNECTICUT MUNICIPAL OBLIGATIONS
AND DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years 10 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 5/28/87 (7.44)% 4.30% 6.12% --
WITHOUT SALES CHARGE 5/28/87 (3.06)% 5.26% 6.61% --
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (7.31)% 4.37% -- 4.81%
WITHOUT REDEMPTION 1/15/93 (3.66)% 4.69% -- 4.81%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (4.80)% -- -- 4.24%
WITHOUT REDEMPTION 8/15/95 (3.89)% -- -- 4.24%
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
April 30, 2000
STATEMENT OF INVESTMENTS
<TABLE>
STATEMENT OF INVESTMENTS
Principal
LONG-TERM MUNICIPAL INVESTMENTS--99.0% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONNECTICUT--72.5%
Connecticut:
4.954%, 3/15/2012 5,000,000 (a,b) 4,715,950
5%, 3/15/2012 70,000 68,012
5.25%, 3/1/2012 3,000,000 2,985,420
5.125%, 3/15/2013 4,450,000 4,343,645
5.50%, 5/15/2014 1,900,000 1,912,825
5.25%, 3/1/2016 2,700,000 2,600,019
(Clean Water Fund) Revenue:
5.25%, 7/15/2012 15,000 14,846
5.454%, 7/15/2012 4,850,000 (a) 4,750,187
Special Tax Obligation Revenue
(Transportation Infrastructure):
5.50%, Series A, 11/1/2007 (Insured; FSA) 4,580,000 4,694,500
5.50%, Series B, 11/1/2007 (Insured; FSA) 5,000,000 5,125,000
7.125%, 6/1/2010 3,400,000 3,869,404
6.75%, 6/1/2011 (Prerefunded 6/1/2003) 8,500,000 (c) 8,944,295
Connecticut Development Authority, Revenue:
First Mortgage Gross:
(Health Care Project, Church Homes Inc.):
5.70%, 4/1/2012 1,240,000 1,102,273
5.80%, 4/1/2021 3,000,000 2,505,450
(Health Care Project, Elim Park Baptist Home)
5.375%, 12/1/2018 2,300,000 1,870,314
Life Care Facilities (Seabury Project)
8.75%, 9/1/2006 1,625,000 1,742,163
Pollution Control (Light and Power) 5.85%, 9/1/2028 10,150,000 9,166,668
Water Facilities (Bridgeport Hydraulic) 6.15%,
4/1/2035 (Insured; AMBAC) 2,750,000 2,754,813
Connecticut Health and Educational Facilities
Authority, Revenue:
(Danbury Hospital) 5.75%, 7/1/2029 (Insured; AMBAC) 3,000,000 2,939,460
(Greenwich Academy) 5.75%, 3/1/2026 (Insured; FSA) 3,130,000 3,078,042
(Greenwich Hospital) 5.80%, 7/1/2026 (Insured; MBIA) 665,000 653,083
(Hartford University):
6.75%, 7/1/2012 3,500,000 3,568,180
6.80%, 7/1/2022 8,500,000 8,551,765
(Hospital for Special Care) 5.375%, 7/1/2017 4,430,000 3,676,058
(Johnson Evergreen Corp.) 8.50%, 7/1/2022 4,500,000 4,688,280
(Loomis Chaffee School Project)
6%, 7/1/2025 (Insured; MBIA) 1,000,000 1,007,720
(Middlesex Hospital)
6.25%, 7/1/2022 (Insured; MBIA) (Prerefunded
7/1/2002) 3,500,000 (c) 3,662,400
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT (CONTINUED)
Connecticut Health and Educational Facilities
Authority, Revenue (continued):
(New Britian General Hospital) 6.125%, 7/1/2014
(Insured; AMBAC) 1,000,000 1,034,110
(New Britain Memorial Hospital) 7.75%, 7/1/2022
(Prerefunded 7/1/2002) 11,000,000 (c) 11,851,620
(Norwalk Hospital) 6.25%, 7/1/2022 (Insured; MBIA)
(Prerefunded 7/1/2002) 3,860,000 (c) 4,039,104
(Nursing Home Program - 3030 Park Fairfield Health
Center Project)
6.25%, 11/1/2021 2,500,000 2,481,000
(Quinnipiac College):
6%, 7/1/2013 (Prerefunded 7/1/2003) 4,100,000 (c) 4,285,689
6%, 7/1/2013 2,445,000 2,410,868
(Sacred Heart University):
6.50%, 7/1/2016 (Prerefunded 7/1/2006) 1,465,000 (c) 1,588,529
6.125%, 7/1/2017 (Prerefunded 7/1/2007) 1,000,000 (c) 1,068,250
6.625%, 7/1/2026 (Prerefunded 7/1/2006) 2,720,000 (c) 2,967,139
(Trinity College) 5.875%, 7/1/2026 (Insured; MBIA) 2,500,000 2,489,825
(University of New Haven):
6.625%, 7/1/2016 4,050,000 4,083,777
6.70%, 7/1/2026 8,605,000 8,610,851
(William W. Backus Hospital) 5.75%, 7/1/2027
(Insured; AMBAC) 2,500,000 2,437,075
(Windham Community Memorial Hospital)
6%, 7/1/2020 1,000,000 844,700
(Yale, New Haven Hospital) 5.70%, 7/1/2025
(Insured; MBIA) 7,970,000 7,732,095
Connecticut Housing Finance Authority
(Housing Mortgage Finance Program):
6.125%, 5/15/2018 (Insured; MBIA) 1,655,000 1,680,917
6.45%, 5/15/2022 4,535,000 4,580,758
6.70%, 11/15/2022 6,030,000 6,193,172
6.75%, 11/15/2023 5,010,000 5,242,815
5.45%, 11/15/2029 5,805,000 5,254,396
6%, Subseries F-2, 11/15/2027 4,645,000 4,583,221
6%, Series G, 11/15/2027 4,000,000 3,946,800
5.85%, Subseries B-2, 11/15/2028 9,875,000 9,529,770
5.85%, Subseries C-2, 11/15/2028 6,360,000 6,063,560
5.50%, 11/15/2035 325,000 290,361
Connecticut Resource Recovery Authority, RRR
5.90%, 11/15/2000 6,750,000 6,766,740
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT (CONTINUED)
Eastern Connecticut Resource Recovery Authority:
Solid Waste Revenue:
5.66%, 1/1/2014 5,000,000 (a) 3,465,850
(Wheelabrator Lisbon Project):
5.50%, 1/1/2014 50,000 42,329
5.50%, 1/1/2020 9,380,000 7,596,862
Greenwich Housing Authority, MFHR (Greenwich Close)
6.25%, 9/1/2017 4,840,000 4,528,740
Sprague, Environmental Improvement Revenue
(International Paper Company Project) 5.70%, 10/1/2021 1,350,000 1,223,087
Stamford 6.60%, 1/15/2010 2,750,000 3,086,160
University of Connecticut:
5.75%, 3/1/2013 (Insured; FGIC) 1,850,000 1,920,152
5.75%, 3/1/2015 (Insured; FGIC) 1,770,000 1,815,082
5.75%, 3/1/2016 (Insured; FGIC) 2,500,000 2,553,400
U. S. RELATED--26.5%
Commonwealth of Puerto Rico:
5.65%, 7/1/2015 (Insured; MBIA) 6,690,000 6,889,897
(Public Improvement):
5.50%, 7/1/2013 (Insured; MBIA) 8,000,000 8,176,400
5.25%, 7/1/2014 (Insured; MBIA) 3,925,000 3,891,794
5.25%, 7/1/2015 (Insured; MBIA) 1,000,000 985,030
6%, 7/1/2015 (Insured; MBIA) 2,000,000 2,134,840
Zero Coupon, 7/1/2017 (Insured; MBIA) 3,800,000 1,452,170
6.80%, 7/1/2021 (Prerefunded 7/1/2002) 6,000,000 (c) 6,358,320
Puerto Rico Aqueduct and Sewer Authority, Revenue
6.25%, 7/1/2013 (Insured; MBIA) 9,000,000 9,860,850
Puerto Rico Electric Power Authority, Power Revenue:
5%, 7/1/2012 (Insured; MBIA) 50,000 48,773
5.003%, 7/1/2012 2,000,000 (a,b) 1,901,820
Puerto Rico Highway and Transportation Authority,
Highway Revenue:
6.254%, 7/1/2010 3,200,000 (a) 3,224,000
5.50%, 7/1/2013 (Insured; MBIA) 10,000 10,220
6.003%, 7/1/2013 2,290,000 (a) 2,390,989
6.625%, 7/1/2018 (Prerefunded 7/1/2002) 5,000,000 (c) 5,280,700
5.50%, 7/1/2026 (Insured; FSA) 2,375,000 2,274,823
5%, 7/1/2036 2,500,000 2,105,950
5.50%, 7/1/2036 5,000,000 4,672,350
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U. S. RELATED (CONTINUED)
Puerto Rico Industrial Tourist, Educational, Medical and
Environmental Control Facilities
Financing Authority, Revenue:
(Ana G. Mendez University System Project)
5.375%, 2/1/2029 2,250,000 1,936,485
(Teachers Retirement System):
5.50%, 7/1/2016 1,150,000 1,148,068
5.50%, 7/1/2021 800,000 770,408
Puerto Rico Ports Authority, Special Facilities Revenue
(American Airlines):
6.30%, 6/1/2023 2,000,000 1,978,280
6.25%, 6/1/2026 6,155,000 6,053,504
University of Puerto Rico, University Revenue
5.50%, 6/1/2015 (Insured; MBIA) 5,000,000 5,009,900
Virgin Islands Public Finance Authority, Revenue,
Gross Receipts Taxes Loan Note 6.375%, 10/1/2019 5,000,000 5,011,750
Virgin Islands Water and Power Authority, Refunding
(Electric Systems)
5.30%, 7/1/2021 2,000,000 1,724,840
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $321,985,164) 99.0% 318,571,737
CASH AND RECEIVABLES (NET) 1.0% 3,073,247
NET ASSETS 100.0% 321,644,984
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
FGIC Financial Guaranty Insurance
Company
FSA Financial Security Assurance
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
MFHR Multi-Family Housing Revenue
RRR Resources Recovery Revenue
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 42.6
AA Aa AA 20.4
A A A 2.5
BBB Baa BBB 23.4
BB Ba BB 2.9
F1 MIG1/P1 SP1/A1 2.1
Not Rated(d) Not Rated(d) Not Rated(d) 6.1
100.0
(A) INVERSE FLOATER SECURITY-THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(B) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT
OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT APRIL 30,
2000, THESE SECURITIES AMOUNTED TO $6,617,770 OR 2.1% OF NET ASSETS.
(C) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 321,985,164 318,571,737
Interest receivable 6,624,689
Receivable for shares of Beneficial Interest subscribed 67,506
Prepaid expenses 7,844
325,271,776
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 233,185
Cash overdraft due to Custodian 3,033,509
Payable for shares of Beneficial Interest redeemed 288,015
Accrued expenses 72,083
3,626,792
--------------------------------------------------------------------------------
NET ASSETS ($) 321,644,984
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 328,286,859
Accumulated net realized gain (loss) on investments (3,228,448)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (3,413,427)
--------------------------------------------------------------------------------
NET ASSETS ($) 321,644,984
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 274,962,106 42,282,650 4,400,228
Shares Outstanding 24,532,895 3,775,921 393,310
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.21 11.20 11.19
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 20,861,106
EXPENSES:
Management fee--Note 3(a) 1,918,534
Shareholder servicing costs--Note 3(c) 1,089,343
Distribution fees--Note 3(b) 278,348
Custodian fees 37,229
Professional fees 31,907
Prospectus and shareholders' reports 27,383
Registration fees 24,919
Trustees' fees and expenses--Note 3(d) 4,853
Loan commitment fees--Note 2 3,575
Interest expense--Note 2 132
Miscellaneous 23,416
TOTAL EXPENSES 3,439,639
INVESTMENT INCOME--NET 17,421,467
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (1,719,512)
Net unrealized appreciation (depreciation) on investments (28,371,812)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (30,091,324)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (12,669,857)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
-------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 17,421,467 18,451,596
Net realized gain (loss) on investments (1,719,512) 4,383,270
Net unrealized appreciation (depreciation)
on investments (28,371,812) 1,477,323
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (12,669,857) 24,312,189
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (15,000,075) (15,578,898)
Class B shares (2,233,944) (2,715,809)
Class C shares (187,448) (156,889)
Net realized gain on investments:
Class A shares (2,204,487) (4,072,493)
Class B shares (348,427) (834,380)
Class C shares (32,235) (50,867)
TOTAL DIVIDENDS (20,006,616) (23,409,336)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 39,436,556 43,274,085
Class B shares 8,125,689 11,921,647
Class C shares 1,173,941 2,477,619
Dividends reinvested:
Class A shares 9,873,750 11,453,214
Class B shares 1,622,454 2,410,797
Class C shares 121,987 118,461
Cost of shares redeemed:
Class A shares (64,785,036) (47,956,181)
Class B shares (21,106,153) (15,340,812)
Class C shares (1,450,758) (194,500)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (26,987,570) 8,164,330
TOTAL INCREASE (DECREASE) IN NET ASSETS (59,664,043) 9,067,183
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 381,309,027 372,241,844
END OF PERIOD 321,644,984 381,309,027
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended April 30,
-------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 3,412,262 3,505,138
Shares issued for dividends reinvested 862,286 925,802
Shares redeemed (5,663,577) (3,878,849)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,389,029) 552,091
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 697,009 963,796
Shares issued for dividends reinvested 141,580 194,981
Shares redeemed (1,828,104) (1,244,687)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (989,515) (85,910)
--------------------------------------------------------------------------------
CLASS C
Shares sold 102,199 200,538
Shares issued for dividends reinvested 10,718 9,591
Shares redeemed (125,428) (15,793)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (12,511) 194,336
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 972, 594 CLASS B SHARES
REPRESENTING $11,219,924 WERE AUTOMATICALLY CONVERTED TO 972,092 CLASS A SHARES
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
-------------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 12.26 12.23 11.81 11.90 11.76
Investment Operations:
Investment income--net .58 .61 .62 .64 .66
Net realized and unrealized
gain (loss) on investments (.96) .19 .47 .16 .14
Total from Investment Operations (.38) .80 1.09 .80 .80
Distributions:
Dividends from investment income--net (.58) (.61) (.62) (.64) (.66)
Dividends from net realized gain
on investments (.09) (.16) (.05) (.25) -
Total Distributions (.67) (.77) (.67) (.89) (.66)
Net asset value, end of period 11.21 12.26 12.23 11.81 11.90
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.06) 6.70 9.44 6.84 6.85
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .90 .89 .90 .93 .92
Ratio of net investment income
to average net assets 5.08 4.94 5.12 5.32 5.45
Portfolio Turnover Rate 35.12 21.95 33.31 30.66 28.83
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 274,962 317,923 310,343 313,881 321,559
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
-------------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.26 12.23 11.80 11.89 11.76
Investment Operations:
Investment income--net .52 .55 .56 .57 .60
Net realized and unrealized
gain (loss) on investments (.97) .19 .48 .16 .13
Total from Investment Operations (.45) .74 1.04 .73 .73
Distributions:
Dividends from investment income--net (.52) (.55) (.56) (.57) (.60)
Dividends from net realized gain
on investments (.09) (.16) (.05) (.25) -
Total Distributions (.61) (.71) (.61) (.82) (.60)
Net asset value, end of period 11.20 12.26 12.23 11.80 11.89
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.66) 6.15 8.97 6.28 6.20
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.42 1.40 1.42 1.45 1.44
Ratio of net investment income
to average net assets 4.55 4.42 4.59 4.79 4.92
Portfolio Turnover Rate 35.12 21.95 33.31 30.66 28.83
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 42,283 58,416 59,315 54,661 38,838
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
-------------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.25 12.22 11.79 11.89 11.84
Investment Operations:
Investment income--net .50 .52 .53 .54 .40
Net realized and unrealized
gain (loss) on investments (.97) .19 .48 .15 .05
Total from Investment Operations (.47) .71 1.01 .69 .45
Distributions:
Dividends from investment income--net (.50) (.52) (.53) (.54) (.40)
Dividends from net realized gain
on investments (.09) (.16) (.05) (.25) -
Total Distributions (.59) (.68) (.58) (.79) (.40)
Net asset value, end of period 11.19 12.25 12.22 11.79 11.89
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (3.89) 5.88 8.68 5.93 5.31(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.66 1.65 1.68 1.70 1.64(c)
Ratio of net investment income
to average net assets 4.31 4.15 4.29 4.56 4.31(c)
Portfolio Turnover Rate 35.12 21.95 33.31 30.66 28.83
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 4,400 4,970 2,583 1,290 1,007
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act") as a non-diversified,
open-end management investment company, and operates as a series company
currently offering thirteen series including the Connecticut Series (the
"fund"). The fund's investment objective is to maximize current income exempt
from Federal and, where applicable, from State income taxes, without undue risk.
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. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
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 ("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 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
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
delayed-delivery basis may be settled a month or more after the trade date.
Under the terms of the custody agreement, the fund receives net earnings credits
based on available cash balances left on deposit.
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, 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.
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 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.
DSC retained $2,300 during the period ended April 30, 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 April 30, 2000, Class B and
Class C shares were charged $245,714 and $32,634, respectively, pursuant to the
Plan, of which $23,310 and $3,488 for Class B and Class C shares, respectively,
were paid to DSC.
(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 April 30, 2000, Class A, Class B and Class C
shares were charged $738,326, $122,857 and $10,878, respectively, pursuant to
the Shareholder Services Plan, of which $75,994, $11,655 and $1,163 for Class A,
Class B and Class C shares, respectively, were paid to DSC.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, 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 $134,347 pursuant to the transfer
agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 13, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
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
$119,953,930 and $160,709,100, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$3,413,427, consisting $6,880,309 gross unrealized appreciation and $10,293,736
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 Trustees Dreyfus Premier State Municipal Bond Fund,
Connecticut Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Connecticut Series (one of the funds constituting the Dreyfus Premier State
Municipal Bond Fund) 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 Premier State Municipal Bond Fund, Connecticut Series at April 30, 2000,
the results of its perations 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 9, 2000
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
-- all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are
Connecticut residents, Connecticut personal income taxes), and
-- the fund hereby designates $.0854 per share as a long-term capital gain
distribution paid on December 8, 1999.
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
gains 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 Premier State Municipal Bond Fund, Connecticut
Series
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 064AR004
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Florida Series
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
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
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Florida Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Florida Series, 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, Douglas Gaylor.
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 Premier State Municipal Bond Fund, Florida
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Florida Series, perform
during the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -3.19% total return, its Class B shares provided a -3.68% total return and its
Class C shares provided a -3.97% total return.(1) In comparison, the Lipper
Florida Municipal Debt Funds category average provided a -3.18% total return for
the same period.(2) We attribute the fund's negative absolute returns during the
reporting period to a rising interest-rate environment, which caused most
municipal bond prices to decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federally tax-exempt income as is
practical without undue risk from a diversified portfolio of municipal bonds. To
achieve this objective, we employ two primary strategies. First, for between
one-half and three-quarters of the total fund, we look for bonds that can
potentially offer attractive current income. We typically look for bonds that
can provide consistently high current yields. We also try to ensure that we
select bonds that are most likely to obtain attractive prices if and when we
decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to offer attractive total returns. We typically look for
bonds that are selling at a discount to face value because they may be
temporarily out of favor among investors. Our belief is that these bonds' prices
will rise as they return to favor over time.
What other factors influenced the fund's performance?
Although the fund's performance was hurt by a difficult investment environment
from the beginning of the reporting period throughout 1999, the first four
months of 2000 generally provided better market
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
conditions and a market rally. This rally helped offset most -- but not all --
of the decline in the last eight months of 1999.
When the reporting period began on May 1, 1999, investors had become concerned
that strong economic growth might rekindle long-dormant inflationary pressures,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, for a
total increase of 1.25 percentage points. This caused most bond prices to fall.
During 1999 municipal bond prices also fell because of adverse supply-and-demand
influences. For a variety of reasons, institutional investors such as insurance
companies and mutual funds 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% compared to the same period in 1999. This supply reduction,
combined with robust demand from individual investors, helped support a rebound
of municipal bond prices.
What is the fund's current strategy?
Our current strategy has been to maintain as high a level of income as practical
while reducing volatility and protecting assets in a rising interest-rate
environment. Accordingly, we have slowly and modestly begun to reduce the
portfolio' s average duration -- a measure of sensitivity to changing interest
rates -- in an attempt to protect our holdings from the brunt of potential price
depreciation and capture higher yields as they may become available. In doing
so, we have shifted assets from municipal bonds with maturities of 20 to 30
years into bonds with maturities in the 10- to 20-year range. In addition to
helping us reduce the fund' s sensitivity to rising interest rates, these
intermediate-term holdings are also more likely to attract the interest of
individual investors when the time comes to sell.
From a security selection perspective, we have focused primarily on tax-exempt
bonds that have recently been out of favor among investors, including bonds
selling at deep discounts and modest premiums to their face values. Because they
are currently unpopular, these types of bonds are available with attractive
yields, in our view, compared to other types of bonds that investors currently
favor. We believe that these holdings have the potential to boost the fund's
performance when deep-discount and modest-premium bonds return to favor among
investors.
May 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. 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 AGREEMENT IN EFFECT THROUGH APRIL 30, 2001, AT WHICH
TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT BEEN
ABSORBED, THE FUND'S RETURN WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Premier State
Municipal Bond Fund, Florida Series 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 STATE MUNICIPAL BOND FUND, FLORIDA SERIES (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. 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 FLORIDA 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 INDEX IS NOT
LIMITED TO INVESTMENTS PRINCIPALLY IN FLORIDA MUNICIPAL OBLIGATIONS AND DOES NOT
TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years 10 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 5/28/87 (7.54)% 2.96% 5.82% --
WITHOUT SALES CHARGE 5/28/87 (3.19)% 3.91% 6.31% --
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (7.36)% 3.06% -- 4.08%
WITHOUT REDEMPTION 1/15/93 (3.68)% 3.37% -- 4.08%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (4.89)% -- -- 2.78%
WITHOUT REDEMPTION 8/15/95 (3.97)% -- -- 2.78%
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
April 30, 2000
<TABLE>
STATEMENT OF INVESTMENTS
Principal
LONG-TERM MUNICIPAL INVESTMENTS--95.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FLORIDA--88.7%
Bay County, Sales Tax Revenue
4.75%, 9/1/2023 (Insured; FSA) 3,160,000 2,664,259
Brevard County, IDR (Nui Corp. Project)
6.40%, 10/1/2024 (Insured; AMBAC) 1,000,000 1,030,940
Broward County Health Facilities Authority, Revenue
(Broward County Nursing Home)
7.50%, 8/15/2020 (LOC; Allied Irish Bank) 1,000,000 1,039,060
Broward County Housing Finance Authority, MFHR
(Bridgewater Place Apartments) 5.40%, 10/1/2029 2,000,000 1,750,620
Charlotte County:
Healthcare Facilities Revenue (Charlotte Community
Health Project) 9.25%, 7/1/2020 1,550,000 1,585,774
Utility Revenue 5%, 10/1/2023 (Insured; FGIC) 2,500,000 2,197,500
Dade County, Aviation Revenue
6.60%, 10/1/2022 (Insured; MBIA) 1,000,000 1,039,970
Dade County Housing Finance Authority, SFMR
6.70%, 4/1/2028 (Collateralized: FNMA, GNMA) 4,500,000 4,663,215
Duval County Housing Finance Authority, SFMR:
7.85%, 12/1/2022 (Collateralized; GNMA) 1,625,000 1,658,719
7.70%, 9/1/2024
(Collateralized; GNMA, Insured; FGIC) 710,000 730,867
Florida Board of Education:
Capital Outlay (Public Education):
4.50%, 6/1/2019 (Insured; FSA) 7,000,000 5,819,240
4.50%, 6/1/2022 (Insured; FSA) 3,700,000 3,000,145
4.75%, 6/1/2023 (Insured; MBIA) 3,000,000 2,527,500
Lottery Revenue 4.50%, 7/1/2017 (Insured; FGIC) 2,110,000 1,782,486
Florida Department of Juvenile Justice (Juvenile
Residential) 5.20%, 6/15/2019 (Insured; MBIA) 5,984,000 5,686,535
Florida, Housing Finance Agency:
(Brittany Rosemont Apartments)
7%, 2/1/2035 (Insured; AMBAC) 6,000,000 6,355,500
Single Family Mortgage:
6.65%, 1/1/2024 (Collateralized: FNMA, GNMA) 2,325,000 2,409,444
6.65%, 7/1/2026 (Insured; MBIA) 1,345,000 1,390,811
Hillsborough County, Utility Revenue
6.625%, 8/1/2011 4,000,000 4,104,000
Hillsborough County Aviation Authority, Revenue
(Delta Airlines) 6.80%, 1/1/2024 2,500,000 2,510,475
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
Lee County Housing Finance Authority SFMR:
6.30%, 3/1/2029 (Collateralized: FNMA, GNMA) 970,000 992,213
(Multi-County Program)
7.45%, 9/1/2027 (Collateralized: FNMA, GNMA) 970,000 1,075,507
Marion County, Hospital District Revenue, Improvement
(Munroe Regional Hospital) 5.625%, 10/1/2024 2,500,000 2,240,875
Miami-Dade County Housing Finance Authority,
MFMR (Villa Esperanza Apartments Project)
5.35%, 10/1/2028 1,000,000 866,760
Orange County, Tourist Development Tax Revenue
4.75%, 10/1/2024 (Insured; AMBAC) 9,160,000 7,686,156
Orange County Housing Finance Authority, MFHR
(Seminole Pointe Project) 5.75%, 12/1/2023 2,840,000 2,616,634
Osceola County Industrial Development Authority,
Revenue (Community Provider
Pooled Loan Program) 7.75%, 7/1/2017 5,235,000 5,344,359
Palm Beach County, Solid Waste Industrial Development
Revenue:
(Okeelanta Power LP Project) 6.85%, 2/15/2021 7,500,000 (b) 4,059,375
(Osceola Power LP) 6.85%, 1/1/2014 5,800,000 (b) 3,074,000
Palm Beach County Housing Finance Authority
Single Family Mortgage Purchase Revenue
6.55%, 4/1/2027 (Collateralized: FNMA, GNMA) 1,900,000 1,958,330
Pinellas County Housing Finance Authority, SFMR:
7.70%, 8/1/2022 (Collateralized; GNMA) 1,505,000 1,546,403
(Multi-County Program)
6.70%, 2/1/2028 (Collateralized: FNMA, GNMA) 4,040,000 4,187,945
Polk County Industrial Development Authority, IDR
(IMC Fertilizer) 7.525%, 1/1/2015 5,000,000 5,131,400
Seminole, Water Control District 6.75%, 8/1/2022 2,000,000 1,916,600
Seminole County, Sales Tax Revenue
4.625%, 10/1/2022 (Insured; MBIA) 2,015,000 1,668,239
Tampa:
Alleghany Health System Revenue (St. Joseph)
6.50%, 12/1/2023
(Insured; MBIA, Prerefunded 12/1/2004) 1,000,000 (a) 1,074,400
Utility Tax
Zero Coupon, 4/1/2017 (Insured; AMBAC) 2,110,000 786,692
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
Tampa Bay Water, Utility System Revenue:
4.75%, Series A, 10/1/2027 (Insured; FGIC) 5,875,000 4,886,531
4.75%, Series B, 10/1/2027 (Insured; FGIC) 3,500,000 2,911,125
Tarpon Springs Health Facilities Authority, Hospital
Revenue (Helen Ellis Memorial Hospital Project)
7.625%, 5/1/2021 3,990,000 3,950,858
Village Center Community Development District,
Recreational Revenue:
5%, 11/1/2021 (Insured; MBIA) 5,000,000 4,397,550
5%, 11/1/2023 (Insured; MBIA) 2,000,000 1,741,760
U.S. RELATED--6.4%
Guam Power Authority, Revenue
5%, 10/1/2024 (Insured; AMBAC) 1,000,000 876,670
Commonwealth of Puerto Rico, Public Improvement
4.50%, 7/1/2023 (Insured; FSA) 2,920,000 2,367,448
Puerto Rico Electric Power Authority, Power Revenue
5%, 7/1/2028 (Insured; FSA) 6,000,000 5,265,840
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $136,269,200) 126,570,730
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--3.6%
------------------------------------------------------------------------------------------------------------------------------------
Hillsborough County Industrial Development Authority,
PCR, VRDN (Tampa Electric Co. Gannon) 6.05% 2,300,000 (c) 2,300,000
Jacksonville Electric Authority, Electric System Revenue,
VRDN 5.80% (SBPA; Landesbank Hessen Thurgen) 1,500,000 (c) 1,500,000
Saint Lucie County, PCR, VRDN (Florida Power and
Light Co.) 5.80% 1,000,000 (c) 1,000,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $4,800,000) 4,800,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $141,069,200) 98.7% 131,370,730
CASH AND RECEIVABLES (NET) 1.3% 1,790,471
NET ASSETS 100.0% 133,161,201
The Fund
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
FGIC Financial Guaranty
Insurance Company
FNMA Federal National
Mortgage Association
FSA Financial Security Assurance
GNMA Government National
Mortgage Association
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond
Investors Assurance
Insurance Corporation
MFHR Multi-Family Housing Revenue
MFMR Multi-Family Mortgage Revenue
PCR Pollution Control Revenue
SBPA Standby Bond
Purchase Agreement
SFMR Single Family Mortgage Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 65.8
A A A 9.6
BBB Baa BBB 5.8
BB Ba BB 3.0
F1 Mig1 SP1 3.7
Not Rated(d) Not Rated(d) Not Rated(d) 12.1
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) NON-INCOME PRODUCING SECURITY; INTEREST PAYMENT IN DEFAULT.
(C) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABLITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 141,069,200 131,370,730
Cash 37,218
Interest receivable 2,020,223
Prepaid expenses 5,554
133,433,725
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 77,148
Payable for shares of Beneficial Interest redeemed 71,691
Accrued expenses 123,685
272,524
--------------------------------------------------------------------------------
NET ASSETS ($) 133,161,201
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 142,847,577
Accumulated net realized gain (loss) on investments 12,094
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (9,698,470)
--------------------------------------------------------------------------------
NET ASSETS ($) 133,161,201
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 118,352,152 14,352,716 456,333
Shares Outstanding 9,191,063 1,115,120 35,434
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 12.88 12.87 12.88
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Year ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 8,862,364
EXPENSES:
Management fee--Note 3(a) 834,475
Shareholder servicing costs--Note 3(c) 491,452
Distribution fees--Note 3(b) 99,779
Legal fees 78,198
Registration fees 28,254
Prospectus and shareholders' reports 25,063
Custodian fees 15,778
Auditing fees 3,405
Trustees' fees and expenses--Note 3(d) 2,015
Loan commitment fees--Note 2 1,361
Miscellaneous 4,586
TOTAL EXPENSES 1,584,366
Less--reduction in management fee due to
undertaking--Note 3(a) (85,069)
NET EXPENSES 1,499,297
INVESTMENT INCOME-NET 7,363,067
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 179,407
Net unrealized appreciation (depreciation) on investments (13,406,888)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (13,227,481)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (5,864,414)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 7,363,067 8,448,485
Net realized gain (loss) on investments 179,407 2,468,854
Net unrealized appreciation (depreciation)
on investments (13,406,888) (1,559,597)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (5,864,414) 9,357,742
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (6,493,321) (7,184,648)
Class B shares (853,129) (1,247,785)
Class C shares (16,617) (16,052)
Net realized gain on investments:
Class A shares (497,191) (2,111,066)
Class B shares (67,970) (426,489)
Class C shares (1,344) (6,465)
TOTAL DIVIDENDS (7,929,572) (10,992,505)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 10,538,667 6,795,289
Class B shares 2,058,808 1,932,433
Class C shares 255,886 289,864
Dividends reinvested:
Class A shares 2,582,873 3,582,522
Class B shares 252,506 564,491
Class C shares 5,682 6,371
Cost of shares redeemed:
Class A shares (32,055,233) (27,626,849)
Class B shares (12,789,483) (8,078,977)
Class C shares (167,078) (261,074)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (29,317,372) (22,795,930)
TOTAL INCREASE (DECREASE) IN NET ASSETS (43,111,358) (24,430,693)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 176,272,559 200,703,252
END OF PERIOD 133,161,201 176,272,559
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 787,995 477,800
Shares issued for dividends reinvested 196,289 250,751
Shares redeemed (2,426,603) (1,932,468)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,442,319) (1,203,917)
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 154,959 134,751
Shares issued for dividends reinvested 19,156 39,521
Shares redeemed (962,486) (567,781)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (788,371) (393,509)
--------------------------------------------------------------------------------
CLASS C
Shares sold 19,716 20,218
Shares issued for dividends reinvested 435 446
Shares redeemed (12,836) (18,353)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 7,315 2,311
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 451,916 CLASS B SHARES REPRESENTING
$6,002,921 WERE AUTOMATICALLY CONVERTED TO 451,819 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
--------------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 14.03 14.17 14.06 14.48 14.51
Investment Operations:
Investment income--net .65 .65 .66 .76 .79
Net realized and unrealized gain (loss)
on investments (1.10) .05 .26 (.08) .17
Total from Investment Operations (.45) .70 .92 .68 .96
Distributions:
Dividends from investment income--net (.65) (.65) (.66) (.76) (.79)
Dividends from net realized gain
on investments (.05) (.19) (.15) (.34) (.20)
Total Distributions (.70) (.84) (.81) (1.10) (.99)
Net asset value, end of period 12.88 14.03 14.17 14.06 14.48
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.19) 5.00 6.73 4.74 6.63
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .92 .92 .91 .92 .91
Ratio of net investment income
to average net assets 4.92 4.53 4.67 5.27 5.29
Decrease reflected in above expense ratios
due to undertaking by
The Dreyfus Corporation .06 -- -- -- --
Portfolio Turnover Rate 29.04 88.48 91.18 71.68 54.37
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 118,352 149,185 167,793 202,503 227,478
A EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
-------------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 14.02 14.17 14.05 14.47 14.51
Investment Operations:
Investment income--net .58 .57 .59 .69 .71
Net realized and unrealized gain (loss)
on investments (1.10) .04 .27 (.08) .16
Total from Investment Operations (.52) .61 .86 .61 .87
Distributions:
Dividends from investment income--net (.58) (.57) (.59) (.69) (.71)
Dividends from net realized gain
on investments (.05) (.19) (.15) (.34) (.20)
Total Distributions (.63) (.76) (.74) (1.03) (.91)
Net asset value, end of period 12.87 14.02 14.17 14.05 14.47
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.68) 4.40 6.26 4.21 6.01
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.43 1.42 1.41 1.42 1.41
Ratio of net investment income
to average net assets 4.41 4.02 4.16 4.76 4.77
Decrease reflected in above expense ratios
due to undertaking by
The Dreyfus Corporation .06 -- -- -- --
Portfolio Turnover Rate 29.04 88.48 91.18 71.68 54.37
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 14,353 26,693 32,545 35,802 27,023
A EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (continued)
Year Ended April 30,
-------------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 14.03 14.17 14.05 14.47 14.65
Investment Operations:
Investment income--net .54 .53 .55 .65 .48
Net realized and unrealized gain (loss)
on investments (1.10) .05 .27 (.08) .02
Total from Investment Operations (.56) .58 .82 .57 .50
Distributions:
Dividends from investment income--net (.54) (.53) (.55) (.65) (.48)
Dividends from net realized gain
on investments (.05) (.19) (.15) (.34) (.20)
Total Distributions (.59) (.72) (.70) (.99) (.68)
Net asset value, end of period 12.88 14.03 14.17 14.05 14.47
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (3.97) 4.13 5.94 3.95 4.69(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.73 1.75 1.71 1.97 1.99(c)
Ratio of net investment income
to average net assets 4.11 3.69 3.69 4.60 4.20(c)
Decrease reflected in above expense
ratios due to undertaking by
The Dreyfus Corporation .10 -- -- -- --
Portfolio Turnover Rate 29.04 88.48 91.18 71.68 54.37
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 456 394 366 58 35
A FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 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 State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series, including the Florida Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. 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. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
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.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 ("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 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 $9,082 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.
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.
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 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 April 30,
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 Distribution Plan
fees, taxes, brokerage fees, interest on borrowings and extraordinary expenses,
but including litigation expenses related to the Series' holdings of (a) Palm
Beach County, Florida Solid Waste Industrial Development Revenue Bonds
(Okeelanta Power Limited Partnership Project) Series 1993A; and (b) Palm Beach
County, Florida Solid Waste Industrial Development Revenue Bonds (Osceola Power
Limited Partnership Project) Series 1994A and 1994B, exceed an annual rate of
. 92 of 1% of the value of the fund's average daily net assets. The reduction in
management fee, pursuant to the undertaking, amounted to $85,069 during the
period ended April 30, 2000.
DSC retained $1,662 during the period ended April 30, 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 April 30, 2000, Class B and
Class C shares were charged $96,745 and $3,034, respectively, pursuant to the
Plan, of which $8,111 and $377 for Class B and Class C shares, respectively,
were paid to DSC.
(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 April 30, 2000, Class A, Class B and Class C
shares were charged $329,923, $48,373 and $1,011, respectively, pursuant to the
Shareholder Services Plan, of which $32,818, $4,055 and $126 for Class A, Class
B and Class C shares, respectively, were 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 $75,307 pursuant to the transfer
agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 13, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
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
$43,450,069 and $74,565,027, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$9,698,470, consisting of $2,164,001 gross unrealized appreciation and
$11,862,471 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).
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Florida Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Florida Series (one of the Funds constituting the Dreyfus Premier State
Municipal Bond Fund) 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 Premier State Municipal Bond Fund, Florida Series 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 9, 2000
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
--all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal income tax, and for individuals who
are Florida residents, not subject to taxation by Florida), and
--the fund hereby designates $.0501 per share as a long-term capital gain
distribution paid on December 8, 1999.
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
gains distributions (if any) 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 State Municipal Bond Fund,
Florida Series
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 051AR004
================================================================================
Dreyfus Premier State
Municipal Bond Fund,
Georgia Series
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
8 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
15 Financial Highlights
18 Notes to Financial Statements
24 Report of Independent Auditors
25 Important Tax Information
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Georgia Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Georgia Series, 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, Paul Disdier.
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 Premier State Municipal Bond Fund, Georgia
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Paul Disdier, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Georgia Series, perform
during the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -2.76% total return, its Class B shares provided a -3.31% total return and its
Class C shares provided a -3.51% total return.(1) In comparison, the Lipper
Georgia Municipal Debt Funds category average provided a -3.02% total return for
the same period.(2)
We attribute the fund' s absolute performance to a rising interest-rate
environment, which caused most municipal bond prices to decline during November
and December of 1999. These negative returns were not completely offset during
the market rally that began in the first quarter of 2000. The fund's relative
performance was primarily a result of its duration management strategy, which
included a longer AVERAGE DURATION -- a measure of the fund's sensitivity to
changes in interest rates -- than most of its peers. The fund's relatively long
average duration hurt performance during the final two months of 1999, but
generally helped performance during the first four months of 2000 as the market
rallied.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Georgia tax-exempt income as
is practical without undue risk from a diversified portfolio of municipal bonds.
To achieve this objective, we look for bonds that we expect to provide
consistently high income streams. We strive to find such opportunities through
rigorous analyses of individual bonds' structures. Within the context of our
bond structure analysis, we pay particularly close attention to each bond's
maturity and early redemption features. In addition, we conduct extensive credit
analyses of our holdings in an attempt to avoid potential defaults on interest
and principal payments.
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 the last two months of 1999, the first four months of 2000 provided
better market conditions and a market rally.
When the reporting period began on May 1, 1999, 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 five times during the reporting
period, causing most bond prices to fall, for a total increase of 1.25
percentage points since last summer.
Nationally, 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 in the national market and drove municipal bond prices down.
In addition, during the first quarter of 2000, issuance of municipal bonds
nationally declined approximately 20%, as compared to the same period in 1999.
This supply reduction, combined with robust demand from individual investors,
helped support a rebound of municipal bond prices, including bonds from Georgia
issuers, and especially among longer term bonds.
What is the fund's current strategy?
We have continued to follow our strategy of attempting to maximize the income
produced by a diversified portfolio of investment-grade municipal bonds from
Georgia issuers. To that end, we have gradually been reducing the fund's average
duration, primarily by selling some of our longer term holdings and raising cash
in a volatile market. As of April 30, 2000, cash and cash equivalents -- such as
tax-exempt money market securities -- comprised about 10% of the portfolio. We
may redeploy much of our cash reserve if it becomes clearer to us that market
volatility is subsiding.
In addition, we have been continually attempting to upgrade the portfolio
whenever opportunities to do so have arisen. We have focused primarily on high
quality securities that provide competitive yields and have some protection from
early redemption by their issuers, such as non-callable general obligation bonds
from the state of Georgia. On the other hand, we have avoided certain market
sectors that we believe may be subject to credit concerns, such as bonds issued
by some health care facilities. However, our ability to make these portfolio
adjustments as quickly as we might have liked has been constrained by the recent
scarcity of new municipal bond issuance in Georgia.
May 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-GEORGIA
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 State
Municipal Bond Fund, Georgia Series 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 STATE MUNICIPAL BOND FUND, GEORGIA SERIES (THE "FUND") ON 9/3/92
(INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE LEHMAN BROTHERS MUNICIPAL
BOND INDEX (THE "INDEX") ON THAT DATE. FOR COMPARATIVE PURPOSES, THE VALUE OF
THE INDEX ON 8/31/92 IS USED AS THE BEGINNING VALUE ON 9/3/92. 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 GEORGIA 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 INDEX IS NOT
LIMITED TO INVESTMENTS PRINCIPALLY IN GEORGIA MUNICIPAL OBLIGATIONS AND DOES NOT
TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 9/3/92 (7.12)% 3.78% 4.82%
WITHOUT SALES CHARGE 9/3/92 (2.76)% 4.74% 5.46%
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (7.02)% 3.88% 4.72%
WITHOUT REDEMPTION 1/15/93 (3.31)% 4.22% 4.72%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (4.44)% -- 3.64%
WITHOUT REDEMPTION 8/15/95 (3.51)% -- 3.64%
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
<TABLE>
STATEMENT OF INVESTMENTS
April 30, 2000
Principal
LONG-TERM MUNICIPAL INVESTMENTS--90.4% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Atlanta, Airport Revenue 5.50%, 1/1/2022 (Insured; FGIC) 750,000 719,250
Brunswick & Glynn County Development Authority, Revenue
(Pacific Corp. Project) 5.55%, 3/1/2026 1,000,000 848,730
Cherokee County, Water and Sewer Revenue,
4.75%, 8/1/2028 (Insured; FGIC) 1,000,000 825,960
Clayton County and Clayton County Water Authority,
Water and Sewer Revenue
5.10%, 5/1/2016 500,000 476,080
Columbia County, Water and Sewer Revenue
5.40%, 6/1/2011 (Insured; AMBAC) 750,000 755,587
Fayette County School District 6.125%, 3/1/2015 500,000 527,220
Fulton County, Water and Sewer Revenue
6.375%, 1/1/2014 (Insured; FGIC, Escrowed to Maturity) 260,000 284,398
Fulton County Development Authority, Special Facility Revenue
(Delta Airlines, Inc. Project) 5.45%, 5/1/2023 1,000,000 850,240
Fulton County Facilities Corporation, COP
(Fulton County Public Purpose Project)
5.50%, 11/1/2018 (Insured; AMBAC) 750,000 728,393
Gainesville, Water and Sewer Revenue
6%, 11/15/2012 (Insured; FGIC) 300,000 318,918
Georgia:
5.65%, 3/1/2012 1,000,000 1,035,490
5.80%, 11/1/2015 710,000 734,957
5.75%, 8/1/2016 500,000 517,360
Georgia Housing and Finance Authority, SFMR
6.50%, 12/1/2017 (Insured; FHA) 1,000,000 1,017,490
Georgia Municipal Gas Authority, Gas Revenue
(Warner Robins Project)
5.80%, 1/1/2015 (Insured; MBIA) 1,000,000 1,013,180
Georgia Municipal Electric Authority, Power Revenue
5.50%, 1/1/2012 (Insured; AMBAC) 1,000,000 1,011,520
Marietta Development Authority, Revenue
(First Mortgage-Life College)
5.75%, 9/1/2014 (Insured; FSA) 850,000 861,339
Marietta School 4.50%, 2/1/2019 1,000,000 832,890
Meriwether County School District
5.50%, 2/1/2016 (Insured; FSA) 750,000 740,212
Metropolitan Atlanta Rapid Transportation Authority,
Sales Tax Revenue
6.25%, 7/1/2020 (Insured; AMBAC) 300,000 319,416
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Private Colleges and Universities Authority, Revenue
(Emory University Project) 5.50%, 11/1/2019 750,000 732,900
(Spellman College Project) 6.20%, 6/1/2014 (Insured; FGIC) 1,000,000 1,042,840
Royston Hospital Authority, HR
(Ty Cobb Healthcare System, Inc.) 6.50%, 7/1/2027 700,000 626,213
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $16,986,519) 16,820,583
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--8.1%
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA--2.7%
Hapeville Development Authority, VRDN
(Hapeville Hotel, Ltd.) 6.05% 500,000 (a) 500,000
U. S. RELATED--5.4%
Puerto Rico Commonwealth Highway and
Transportation Authority, VRDN 4.90% 1,000,000 (a) 1,000,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $1,500,000) 1,500,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $18,486,519) 98.5% 18,320,583
CASH AND RECEIVABLES (NET) 1.5% 286,963
NET ASSETS 100.0% 18,607,546
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
FGIC Financial Guaranty
Insurance Company
FHA Federal Housing Administration
FSA Financial Security Assurance
HR Hospital Revenue
MBIA Municipal Bond
Investors Assurance
Insurance Corporation
SFMR Single Family Mortgage Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 65.1
AA Aa AA 14.0
BBB Baa BBB 12.7
F1+, F-1 MIG1, VMIG1 & P1 SP1, A1 8.2
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 18,486,519 18,320,583
Cash 22,952
Interest receivable 327,602
Prepaid expenses 5,107
18,676,244
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 14,256
Payable for shares of Beneficial Interest redeemed 45,105
Accrued expenses 9,337
68,698
--------------------------------------------------------------------------------
NET ASSETS ($) 18,607,546
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 19,010,714
Accumulated net realized gain (loss) on investments (237,232)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (165,936)
--------------------------------------------------------------------------------
NET ASSETS ($) 18,607,546
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 11,838,500 6,680,860 88,186
Shares Outstanding 922,763 520,584 6,878
NET ASSET VALUE PER SHARE ($) 12.83 12.83 12.82
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 1,062,549
EXPENSES:
Management fee--Note 3(a) 106,141
Shareholder servicing costs--Note 3(c) 63,163
Distribution fees--Note 3(b) 43,258
Registration fees 30,077
Professional fees 18,138
Prospectus and shareholders' reports 13,326
Custodian fees 3,593
Trustees' fees and expenses--Note 3(d) 299
Loan commitment fees--Note 2 194
Miscellaneous 6,131
TOTAL EXPENSES 284,320
Less--reduction in management fee due to
undertaking--Note 3(a) (58,144)
NET EXPENSES 226,176
INVESTMENT INCOME--NET 836,373
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (169,957)
Net unrealized appreciation (depreciation) on investments (1,301,091)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (1,471,048)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (634,675)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
--------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 836,373 904,128
Net realized gain (loss) on investments (169,957) 544,900
Net unrealized appreciation (depreciation)
on investments (1,301,091) (214,880)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (634,675) 1,234,148
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (489,538) (290,432)
Class B shares (344,586) (612,746)
Class C shares (2,249) (950)
TOTAL DIVIDENDS (836,373) (904,128)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 5,413,341 3,073,890
Class B shares 2,217,910 630,199
Class C shares 109,675 35,401
Dividends reinvested:
Class A shares 299,966 186,394
Class B shares 199,528 298,894
Class C shares 639 409
Cost of shares redeemed:
Class A shares (1,924,109) (784,843)
Class B shares (7,580,619) (6,162,616)
Class C shares (65,267) (32,325)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (1,328,936) (2,754,597)
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,799,984) (2,424,577)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 21,407,530 23,832,107
END OF PERIOD 18,607,546 21,407,530
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended April 30,
--------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 408,892 220,547
Shares issued for dividends reinvested 23,161 13,383
Shares redeemed (144,231) (56,295)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 287,822 177,635
--------------------------------------------------------------------------------
CLASS B (A)
Shares sold 164,950 45,364
Shares issued for dividends reinvested 15,350 21,439
Shares redeemed (571,205) (443,237)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (390,905) (376,434)
--------------------------------------------------------------------------------
CLASS C
Shares sold 8,400 2,553
Shares issued for dividends reinvested 49 29
Shares redeemed (4,941) (2,305)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 3,508 277
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 271,943 CLASS B SHARES REPRESENTING
$3,559,075 WERE AUTOMATICALLY CONVERTED TO 272,136 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
-------------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 13.81 13.63 13.22 13.05 12.80
Investment Operations:
Investment income--net .59 .60 .61 .62 .66
Net realized and unrealized gain (loss)
on investments (.98) .18 .41 .17 .25
Total from Investment Operations (.39) .78 1.02 .79 .91
Distributions:
Dividends from investment income--net (.59) (.60) (.61) (.62) (.66)
Net asset value, end of period 12.83 13.81 13.63 13.22 13.05
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (2.76) 5.74 7.76 6.16 7.14
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .94 .99 .95 .98 .74
Ratio of net investment income
to average net assets 4.57 4.27 4.44 4.71 5.00
Decrease reflected in above expense ratios
due to undertakings by The
Dreyfus Corporation .32 -- -- -- .21
Portfolio Turnover Rate 54.72 69.13 36.64 50.96 33.09
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 11,839 8,769 6,232 6,598 8,346
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
-------------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 13.82 13.63 13.22 13.06 12.80
Investment Operations:
Investment income--net .53 .53 .54 .56 .59
Net realized and unrealized gain (loss)
on investments (.99) .19 .41 .16 .26
Total from Investment Operations (.46) .72 .95 .72 .85
Distributions:
Dividends from investment income--net (.53) (.53) (.54) (.56) (.59)
Net asset value, end of period 12.83 13.82 13.63 13.22 13.06
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.31) 5.29 7.24 5.55 6.69
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.45 1.49 1.44 1.47 1.24
Ratio of net investment income
to average net assets 4.02 3.79 3.94 4.20 4.46
Decrease reflected in above expense ratios
due to undertakings by
The Dreyfus Corporation .28 -- -- -- .20
Portfolio Turnover Rate 54.72 69.13 36.64 50.96 33.09
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 6,681 12,592 17,558 18,211 20,106
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
--------------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 13.80 13.62 13.22 13.05 12.85
Investment Operations:
Investment income--net .49 .44 .47 .51 .38
Net realized and unrealized gain (loss)
on investments (.98) .18 .40 .17 .20
Total from Investment Operations (.49) .62 .87 .68 .58
Distributions:
Dividends from investment income--net (.49) (.44) (.47) (.51) (.38)
Net asset value, end of period 12.82 13.80 13.62 13.22 13.05
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (3.51) 4.59 6.61 5.30 6.28(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.65 1.99 1.91 1.80 1.98(c)
Ratio of net investment income
to average net assets 3.82 3.28 3.48 3.87 3.73(c)
Decrease reflected in above expense ratios
due to undertakings by
The Dreyfus Corporation .30 -- -- -- --
Portfolio Turnover Rate 54.72 69.13 36.64 50.96 33.09
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 88 47 42 105 88
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified,
open-end management investment company, and operates as a series company
currently offering thirteen series including the Georgia Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. 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.
On April 12, 2000, the Board of Trustees approved, subject to approval by the
shareholders of the fund, an Agreement and Plan of Reorganization providing for
the transfer of all of the assets and liabilities of the fund in a tax free
exchange of shares of beneficial interest of the Dreyfus Premier Municipal Bond
Fund at net asset value and the assumption of stated liabilities.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to
that series' operations; expenses which are applicable to all series are
allocated among them on a pro rata basis.
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 ("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 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
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 $1,865 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.
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, 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 $42,000 available
for Federal income tax purposes to be applied against future net securities
profits, if any, realized subsequent to April 30, 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, $25,000 of the carryover expires in fiscal 2004 and $17,000
expires in fiscal 2005.
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 with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the funds' average
daily net assets and is payable monthly. The Manager had undertaken from July
29, 1999 through April 30, 2000, to reduce the management fee paid by the fund,
to the extent that the fund's aggregate expenses, excluding 12b-1 distribution
fees, taxes, brokerage fees, commitment fees, interest on borrowings and
extraordinary expenses, exceeded an annual rate of .89 of 1% of the value of the
fund' s average daily net assets. The reduction in management fee, pursuant to
the undertaking, amounted to $58,144 during the period ended April 30, 2000.
(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 April 30, 2000, Class B and
Class C shares were charged $42,818 and $440, respectively, pursuant to the Plan
of which $3,728 and $73 for Class B and Class C, respectively, were paid to DSC.
(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
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 April 30, 2000, Class A, Class B and
Class C shares were charged $26,690, $21,409 and $147, respectively, pursuant to
the Shareholder Services Plan of which $3,253, $1,864 and $24 for Class A, Class
B and Class C, respectively, were 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 $8,728 pursuant to the transfer
agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 13, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
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
$9,841,240 and $11,656,845, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$165,936, consisting of $312,640 gross unrealized appreciation and $478,576
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).
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Georgia Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Georgia Series (one of the Funds constituting the Dreyfus Premier State
Municipal Bond Fund) 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 Premier State Municipal Bond Fund, Georgia Series 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 9, 2000
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 subject to regular Federal and, for individuals
who are Georgia residents, Georgia personal income taxes).
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
gains distributions (if any) 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 State Municipal Bond Fund,
Georgia Series
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 068AR004
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Maryland Series
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
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
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Maryland Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Maryland Series, 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, Douglas Gaylor.
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 Premier State Municipal Bond Fund, Maryland
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Maryland Series, perform
during the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -3.61% total return, its Class B shares provided a -4.12% total return and its
Class C shares provided a -4.32% total return.(1) In comparison, the Lipper
Maryland Municipal Debt Funds category average provided a -2.46% total return
for the same period.(2) We attribute the fund's negative absolute returns during
the reporting period to a rising interest-rate environment, which caused most
municipal bond prices to decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Maryland tax-exempt income as
is practical without undue risk from a diversified portfolio of municipal bonds.
To achieve this objective, we employ two primary strategies. First, for between
one-half and three-quarters of the total fund, we look for bonds that can
potentially offer attractive current income. We typically look for bonds that
can provide consistently high current yields. We also try to ensure that we
select bonds that are most likely to obtain attractive prices if and when we
decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to offer attractive total returns. We typically look for
bonds that are selling at a discount to face value because they may be
temporarily out of favor among investors. Our belief is that these bonds' prices
will rise as they return to favor over time.
What other factors influenced the fund's performance?
Although the portfolio's performance was hurt by a difficult investment
environment from the beginning of the reporting period throughout 1999, the
first four months of 2000 generally provided
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
better market conditions and a market rally. This rally helped offset most --
but not all -- of the decline in the last eight months of 1999.
When the reporting period began on May 1, 1999, investors had become concerned
that strong economic growth might rekindle long-dormant inflationary pressures,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, for a
total increase of 1.25 percentage points. This caused most bond prices to fall.
During 1999 municipal bond prices also fell because of adverse supply-and-demand
influences. For a variety of reasons, institutional investors such as insurance
companies and mutual funds 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% compared to the same period in 1999.
This scarcity of supply was especially severe in Maryland, which is typically a
low-issuance state compared to other states. The lack of supply, combined with
strong demand from individual investors, helped to support the prices of
Maryland bonds during the recent market rally.
What is the fund's current strategy?
Our current strategy has been to maintain as high a level of income as practical
while reducing volatility and protecting assets in a rising interest-rate
environment. Accordingly, we have slowly and modestly begun to reduce the
portfolio' s average duration -- a measure of sensitivity to changing interest
rates -- in an attempt to protect our holdings from the brunt of potential price
depreciation and capture higher yields as they may become available.
Accordingly, we have shifted assets from municipal bonds with maturities of 20
to 30 years into bonds with maturities in the 10- to 20-year range. In addition
to helping us reduce the fund's sensitivity to rising interest rates, these
intermediate-term holdings are also more likely to attract the interest of
individual investors when the time comes to sell.
From a security selection perspective, we have focused primarily on tax-exempt
bonds that have recently been out of favor among investors, including bonds
selling at deep discounts and modest premiums to their face values. Because they
are currently unpopular, these types of bonds are available with attractive
yields, in our view, compared to other types of bonds that investors currently
favor. We believe that these holdings have the potential to boost the fund's
performance when deep-discount and modest-premium bonds return to favor among
investors.
May 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-MARYLAND
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 State
Municipal Bond Fund, Maryland Series 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 STATE MUNICIPAL BOND FUND, MARYLAND SERIES (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. 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 MARYLAND 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 INDEX IS NOT
LIMITED TO INVESTMENTS PRINCIPALLY IN MARYLAND MUNICIPAL OBLIGATIONS AND DOES
NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years 10 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 5/28/87 (7.95)% 4.07% 6.15% --
WITHOUT SALES CHARGE 5/28/87 (3.61)% 5.04% 6.64% --
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (7.74)% 4.17% -- 4.70%
WITHOUT REDEMPTION 1/15/93 (4.12)% 4.48% -- 4.70%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (5.23)% -- -- 4.00%
WITHOUT REDEMPTION 8/15/95 (4.32)% -- -- 4.00%
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
<TABLE>
STATEMENT OF INVESTMENTS
April 30, 2000
Principal
LONG-TERM MUNICIPAL INVESTMENTS--97.6% Amount ($) Value ($)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MARYLAND--86.2%
Anne Arundel County:
General Improvement 4.50%, 8/1/2018 870,000 737,055
Water and Sewer:
4.50%, 8/1/2018 515,000 436,303
4.50%, 8/1/2019 1,495,000 1,255,142
4.50%, 8/1/2020 1,455,000 1,207,665
Baltimore:
(Tindeco Wharf Project)
6.60%, 12/20/2024 (Collateralized; GNMA) 4,250,000 4,361,987
Port Facilities Revenue (Consolidated Coal Sales)
6.50%, 12/1/2010 4,090,000 4,309,674
Baltimore City Housing Corp., MFHR
7.25%, 7/1/2023 (Collateralized; FNMA) 3,085,000 3,122,236
Baltimore County:
Mortgage Revenue, Zero Coupon, 9/1/2024 2,280,000 509,717
Nursing Facility Mortgage Revenue
(Eastpoint Rehabilitation & Nursing Centers):
6.75%, 4/1/2015 1,000,000 800,000
6.75%, 4/1/2028 1,500,000 1,200,000
PCR (Bethlehem Steel Corp. Project):
7.50%, 6/1/2015 5,785,000 5,873,048
7.55%, 6/1/2017 2,690,000 2,739,469
Carroll County, County Commissioners -
Consolidated Public Improvement
4.70%, 10/1/2016 1,000,000 886,880
Gaithersburg, Hospital Facilities Improvement Revenue
(Shady Grove)
6.50%, 9/1/2012 (Insured; FSA) 10,000,000 11,023,500
Howard County, COP 8.15%, 2/15/2020 605,000 775,404
Maryland, COP (Aviation Administration Facilities Project):
4.75%, 5/1/2015 565,000 501,144
4.75%, 5/1/2016 750,000 658,965
4.75%, 5/1/2017 1,650,000 1,437,579
4.75%, 5/1/2018 1,730,000 1,494,720
Maryland Community Development Administration,
Department of Housing and Community Development:
Housing Revenue 5.65%, 7/1/2039 3,800,000 3,431,970
Multi-Family Development (Auburn Manor Project)
5.30%, 10/1/2028 1,000,000 877,970
MFHR:
6.50%, 5/15/2013 3,000,000 3,098,580
6.85%, 5/15/2033 3,075,000 3,148,739
6.70%, 5/15/2036 (Insured; FHA) 7,710,000 7,940,375
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
----------------------------------------------------------------------------------------------------------------------------
Maryland Community Development Administration,
Department of Housing and
Community Development (continued):
Residential 5.25%, 9/1/2029 3,700,000 3,240,719
Single Family Program:
6.95%, 4/1/2011 3,785,000 3,871,752
4.75%, 4/1/2012 2,865,000 2,652,732
4.80%, 4/1/2013 1,700,000 1,558,985
5.15%, 4/1/2018 2,000,000 1,815,180
6.55%, 4/1/2026 7,170,000 7,301,068
6.75%, 4/1/2026 3,880,000 3,940,101
5.25%, 4/1/2029 8,330,000 7,301,661
7.45%, 4/1/2032 1,060,000 1,061,198
Maryland Economic Development Corp., Revenue (Health and
Mental Hygiene Providers Facilities Acquisition Program):
8.375%, 3/1/2013 3,900,000 4,051,749
8.75%, 3/1/2017 4,670,000 4,596,121
Maryland Health and Higher Educational Facilities
Authority, Revenue:
(Calvert Memorial Hospital) 5%, 7/1/2028 1,285,000 1,034,168
(Doctors Community Hospital) 5.50%, 7/1/2024 9,890,000 7,628,651
(Helix Health Issue) 5%, 7/1/2027 (Insured; AMBAC) 5,580,000 4,979,592
(Johns Hopkins Hospital):
4.75%, 5/15/2033 7,100,000 5,748,444
4.50%, 5/15/2035 2,395,000 1,832,319
(Loyola College) 5%, 10/1/2039 3,500,000 2,913,435
(Medlantic Helix Issue)
4.75%, 8/15/2028 (Insured; FSA) 32,385,000 26,595,210
(Upper Chesapeake Hospitals)
5.375%, 1/1/2028 (Insured; FSA) 1,000,000 929,370
(Union Hospital of Cecil County) :
6.70%, 7/1/2009 2,320,000 2,405,886
4.75%, 7/1/2013 1,840,000 1,536,878
5.10%, 7/1/2022 2,500,000 2,013,950
(University of Maryland Medical Systems)
7%, 7/1/2022 (Insured; FGIC) 4,500,000 5,153,130
Maryland Industrial Development Financing Authority, EDR
(Medical Waste Association) 8.75%, 11/15/2010 700,000 532,000
Maryland Local Government Insurance Trust, COP
7.125%, 8/1/2009 3,250,000 3,335,312
Montgomery County Housing Opportunities Commission,
Multi-Family Mortgage Revenue:
7.05%, 7/1/2032 2,485,000 2,551,275
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
----------------------------------------------------------------------------------------------------------------------------
Montgomery County Housing Opportunities Commission,
Multi-Family Mortgage Revenue (continued):
7.375%, 7/1/2032 1,805,000 1,825,757
Single Family Mortgage:
7.375%, 7/1/2017 880,000 894,054
6.625%, 7/1/2026 1,000,000 1,020,150
Zero Coupon, 7/1/2027 12,165,000 2,277,775
Zero Coupon, 7/1/2028 41,975,000 7,513,945
Northeast Waste Disposal Authority, RRR:
(Baltimore Resco Retrofit Project)
5%, 1/1/2012 4,235,000 3,480,874
Solid Waste Revenue
(Montgomery County Resource Recovery Project):
6%, 7/1/2008 2,690,000 2,745,414
6.20%, 7/1/2010 10,000,000 10,209,200
6.30%, 7/1/2016 14,205,000 14,415,234
Prince Georges County Housing Authority:
Mortgage Revenue:
(New Keystone Apartment Project)
6.80%, 7/1/2025 (Insured: FHA & MBIA) 4,300,000 4,420,013
(Riverview Terrace)
6.70%, 6/20/2020 (Collateralized; GNMA) 2,000,000 2,078,920
(Stevenson Apartments Project)
6.35%, 7/20/2020 (Collateralized; GNMA) 3,000,000 3,047,250
Revenue (Dimensions Health Corporation Project)
5.30%, 7/1/2024 8,810,000 6,377,118
SFMR
6.60%, 12/1/2025 (Collateralized: FNMA & GNMA) 3,700,000 3,770,115
U. S. RELATED--11.4%
Guam Airport Authority, Revenue 6.70%, 10/1/2023 10,000,000 10,124,500
Puerto Rico Commonwealth, Public Improvement:
4.50%, 7/1/2023 (Insured; AMBAC) 5,000,000 4,053,850
5%, 7/1/2026 (Insured; FSA) 1,795,000 1,581,898
Puerto Rico Electric Power Authority, Power Revenue:
4.50%, 7/1/2019 (Insured; FSA) 2,970,000 2,497,651
4.75%, 7/1/2024 1,245,000 1,052,548
5%, 7/1/2028 930,000 797,503
5%, 7/1/2028 8,885,000 7,797,831
Puerto Rico Public Buildings Authority, Revenue
5%, 7/1/2027 (Insured; AMBAC) 4,000,000 3,517,600
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $281,681,821) 267,908,208
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--.7% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth, VRDN
4.90% (cost $2,000,000) 2,000,000(a) 2,000,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $283,681,821) 98.3% 269,908,208
CASH AND RECEIVABLES (NET) 1.7% 4,543,545
NET ASSETS 100.0% 274,451,753
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
EDR Economic Development Revenue
FGIC Financial Guaranty
Insurance Company
FHA Federal Housing Administration
FNMA Federal National
Mortgage Association
FSA Financial Security Assurance
GNMA Government National
Mortgage Association
MBIA Municipal Bond
Investors Assurance
Insurance Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
RRR Resources Recovery Revenue
SFMR Single Family
Mortgage Revenue
VRDN Variable Rate
Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 33.0
AA Aa AA 34.1
A A A 16.7
BBB Baa BBB 9.1
Not Rated (b) Not Rated (b) Not Rated (b) 7.1
100.0
A SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
B SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POORS,
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
C AT APRIL 30, 2000, THE FUND HAD $87,906,086 (32.0% OF NET ASSETS) AND
$85,202,253 (31.0% OF NET ASSETS) INVESTED IN SECURITIES WHOSE PAYMENT OF
PRINCIPAL AND INTEREST IS DEPENDENT UPON REVENUES GENERATED FROM HEALTH
CARE AND HOUSING PROJECTS, RESPECTIVELY.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 283,681,821 269,908,208
Cash 333,233
Interest receivable 4,488,585
Receivable for investment securities sold 95,149
Receivable for shares of Benefical Interest subscribed 70,952
Prepaid expenses 6,127
274,902,254
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 201,258
Payable for shares of Benefical Interest redeemed 202,123
Accrued expenses 47,120
450,501
--------------------------------------------------------------------------------
NET ASSETS ($) 274,451,753
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 288,447,748
Accumulated net realized gain (loss) on investments (222,382)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (13,773,613)
--------------------------------------------------------------------------------
NET ASSETS ($) 274,451,753
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 229,183,973 43,044,435 2,223,345
Shares Outstanding 19,517,155 3,665,004 189,198
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.74 11.74 11.75
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 18,386,962
EXPENSES:
Management fee--Note 3(a) 1,661,534
Shareholder servicing costs--Note 3(c) 965,478
Distribution fees--Note 3(b) 275,279
Custodian fees 34,447
Registration fees 32,024
Prospectus and shareholders' reports 26,386
Professional fees 23,569
Trustees' fees and expenses--Note 3(d) 4,191
Loan commitment fees--Note 2 3,086
Miscellaneous 20,362
TOTAL EXPENSES 3,046,356
INVESTMENT INCOME--NET 15,340,606
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (227,377)
Net unrealized appreciation (depreciation) on investments (27,588,286)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (27,815,663)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (12,475,057)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 15,340,606 15,723,604
Net realized gain (loss) on investments (227,377) 4,875,643
Net unrealized appreciation (depreciation)
on investments (27,588,286) (2,906,514)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (12,475,057) 17,692,733
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (12,863,151) (13,142,319)
Class B shares (2,348,233) (2,475,248)
Class C shares (129,222) (106,037)
Net realized gain on investments:
Class A shares (2,150,363) (3,920,985)
Class B shares (412,360) (858,010)
Class C shares (26,427) (41,411)
TOTAL DIVIDENDS (17,929,756) (20,544,010)
--------------------------------------------------------------------------------
BENEFICAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 29,986,633 19,034,333
Class B shares 12,404,497 16,708,364
Class C shares 1,029,824 1,950,257
Dividends reinvested:
Class A shares 9,283,726 10,945,576
Class B shares 1,669,377 2,138,858
Class C shares 95,038 93,797
Cost of shares redeemed:
Class A shares (49,455,500) (26,068,594)
Class B shares (25,629,469) (8,588,073)
Class C shares (1,823,597) (385,542)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (22,439,471) 15,828,976
TOTAL INCREASE (DECREASE) IN NET ASSETS (52,844,284) 12,977,699
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 327,296,037 314,318,338
END OF PERIOD 274,451,753 327,296,037
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 2,445,834 1,451,972
Shares issued for dividends reinvested 770,041 834,341
Shares redeemed (4,117,990) (1,987,044)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (902,115) 299,269
--------------------------------------------------------------------------------
CLASS B (A)
Shares sold 1,004,505 1,273,167
Shares issued for dividends reinvested 138,189 163,084
Shares redeemed (2,098,431) (657,332)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (955,737) 778,919
--------------------------------------------------------------------------------
CLASS C
Shares sold 83,092 148,387
Shares issued for dividends reinvested 7,865 7,148
Shares redeemed (151,541) (29,616)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (60,584) 125,919
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 1,092,388 CLASS B SHARES
REPRESENTING $13,370,068 WERE AUTOMATICALLY CONVERTED TO 1,092,760 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
------------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 12.94 13.05 12.70 12.69 12.54
Investment Operations:
Investment income--net .63 .65 .67 .68 .67
Net realized and unrealized gain (loss)
on investments (1.10) .09 .50 .18 .23
Total from Investment Operations (.47) .74 1.17 .86 .90
Distributions:
Dividends from investment income--net (.63) (.65) (.67) (.68) (.67)
Dividends from net realized gain
on investments (.10) (.20) (.15) (.17) (.08)
Total Distributions (.73) (.85) (.82) (.85) (0.75)
Net asset value, end of period 11.74 12.94 13.05 12.70 12.69
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.61) 5.76 9.40 6.91 7.24
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .91 .90 .90 .90 .90
Ratio of net investment income
to average net assets 5.16 4.97 5.12 5.29 5.23
Portfolio Turnover Rate 28.37 29.30 18.12 43.63 41.65
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 229,184 264,255 262,560 266,658 283,878
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
-------------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.94 13.05 12.70 12.69 12.54
Investment Operations:
Investment income--net .56 .58 .60 .61 .61
Net realized and unrealized gain (loss)
on investments (1.10) .09 .50 .18 .23
Total from Investment Operations (.54) .67 1.10 .79 .84
Distributions:
Dividends from investment income--net (.56) (.58) (.60) (.61) (.61)
Dividends from net realized gain
on investments (.10) (.20) (.15) (.17) (.08)
Total Distributions (.66) (.78) (.75) (.78) (.69)
Net asset value, end of period 11.74 12.94 13.05 12.70 12.69
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (4.12) 5.20 8.83 6.34 6.66
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.43 1.42 1.42 1.43 1.43
Ratio of net investment income
to average net assets 4.62 4.44 4.59 4.75 4.68
Portfolio Turnover Rate 28.37 29.30 18.12 43.63 41.65
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 43,044 59,806 50,141 45,329 41,179
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
-------------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.95 13.06 12.71 12.69 12.67
Investment Operations:
Investment income--net .54 .55 .57 .58 .41
Net realized and unrealized gain (loss)
on investments (1.10) .09 .50 .19 .10
Total from Investment Operations (.56) .64 1.07 .77 .51
Distributions:
Dividends from investment income--net (.54) (.55) (.57) (.58) (.41)
Dividends from net realized gain
on investments (.10) (.20) (.15) (.17) (.08)
Total Distributions (.64) (.75) (.72) (.75) (.49)
Net asset value, end of period 11.75 12.95 13.06 12.71 12.69
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (4.32) 4.93 8.55 6.16 5.57(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.65 1.66 1.67 1.64 1.80(c)
Ratio of net investment income
to average net assets 4.41 4.15 4.29 4.47 4.59(c)
Portfolio Turnover Rate 28.37 29.30 18.12 43.63 41.65
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 2,223 3,235 1,618 202 27
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 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 State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company and operates as a series company
currently offering thirteen series including the Maryland Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. 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. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
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.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 ("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 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 $22,938 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.
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 $205,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 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
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the fund at rates based on prevailing market rates in effect at the time of the
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 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.
DSC retained $772 during the period ended April 30, 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 April 30, 2000, Class B and
Class C shares were charged $253,364 and $21,915, respectively, pursuant to the
Plan, of which $27,766 and $2,402 for Class B and Class C shares, respectively,
were paid to DSC.
(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 April 30, 2000, Class A, Class B and Class C
shares were charged $621,255, $126,682 and $7,305, respectively, pursuant to the
Shareholder Services Plan, of which $68,083, $13,883 and $801 for Class A, Class
B and Class C shares, respectively, were 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 $118,824 pursuant to the transfer
agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 13, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
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
$84,306,366 and $112,580,284, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$13,773,613, consisting of $3,451,229 gross unrealized appreciation and
$17,224,842 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).
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Premier State Municipal Bond Fund, Maryland Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Maryland Series (one of the Funds constituting the Dreyfus Premier State
Municipal Bond Fund) 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 Premier State Municipal Bond Fund, Maryland Series 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 9, 2000
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
--all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are Maryland
residents, Maryland personal income taxes), and
--the fund hereby designates $.0975 per share as a long-term capital gain
distribution of the $.1040 per share paid on December 8, 1999.
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.
The Fund
For More Information
Dreyfus Premier State Municipal Bond Fund,
Maryland Series
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 052AR004
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Massachusetts Series
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
8 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
15 Financial Highlights
18 Notes to Financial Statements
23 Report of Independent Auditors
24 Important Tax Information
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Massachusetts Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Massachusetts Series, 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, W. Michael Petty.
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 Premier State Municipal Bond Fund,
Massachusetts Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Massachusetts Series, perform
during the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -3.42% total return, its Class B shares provided a -3.93% total return and its
Class C shares provided a -4.16% total return.(1) In comparison, the Lipper
Massachusetts Municipal Debt Funds category average provided a -3.21% total
return for the same period.(2) We attribute the fund's negative absolute returns
to a rising interest-rate environment, which caused most municipal bond prices
to decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Massachusetts tax-exempt
income as is practical without undue risk from a diversified portfolio of longer
term municipal bonds. To achieve this objective, we employ two primary
strategies. First, we evaluate supply-and-demand factors in the bond market that
are affected by the relatively few municipal bonds issued by Massachusetts.
Based on that assessment, we select the individual Massachusetts 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,
creditworthiness of its issuer, insurance, and any provisions for early
redemption. Under most circumstances, we look for high yielding bonds that have
10-year call protection and that are selling at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund's average duration -- a measure of sensitivity to
changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued bonds to increase, we may
reduce the fund' s average duration to make cash available for the purchase of
higher yielding securities. Conversely, if we expect demand for municipal bonds
to surge at a time when we anticipate little issuance, we may increase the
fund's
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
average duration to maintain current yields for as long as practical. At other
times, we try to maintain a "neutral" average duration consistent with other
Massachusetts municipal bond funds.
What other factors influenced the fund's performance?
Although the fund's performance was hurt by a difficult investment environment
during the final two months of 1999, the first four months of 2000 generally
provided better market conditions and a market rally. This rally helped offset
most -- but not all -- of the decline in the first eight months of the reporting
period.
When the reporting period began on May 1, 1999, investors had become concerned
that strong economic growth might rekindle long-dormant inflationary pressures,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, causing
most bond prices to fall, for a total increase of 1.25 percentage points since
mid-1999.
Municipal bond prices also fell during November and December, because of adverse
supply-and-demand influences. For a variety of reasons, institutional investors
such as insurance companies and mutual funds 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% compared to the same period in 1999.
This supply reduction, combined with robust demand from individual investors,
helped support a rebound of municipal bond prices.
What is the fund's current strategy?
Our current strategy is to maintain as high a level of income as practical while
reducing volatility and protecting assets in a rising interest-rate environment.
Accordingly, we have modestly reduced the portfolio's average duration to the
neutral range in an attempt to protect our holdings from the brunt of potential
price depreciation and capture higher yields as they become available.
From a security selection perspective, we have focused primarily on insured
bonds with competitive yields. However, our ability to find such opportunities
has been constrained by the small size of the Massachusetts marketplace and the
reduced supply of newly issued bonds. Consequently, as of April 30, 2000, the
fund contained a higher level of cash -- primarily invested in tax-exempt money
market instruments -- than is usual. Cash and cash equivalents comprised about
13% of the portfolio, which have helped us reduce the fund's average duration.
We hope to put our cash reserves back to work in longer term bonds when we
believe that interest rates may have peaked and the Federal Reserve Board is
finished tightening monetary policy.
May 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-MASSACHUSETTS 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 State
Municipal Bond Fund, Massachusetts Series 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 STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES (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. 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 MASSACHUSETTS 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 INDEX
IS NOT LIMITED TO INVESTMENTS PRINCIPALLY IN MASSACHUSETTS MUNICIPAL OBLIGATIONS
AND DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years 10 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 5/28/87 (7.77)% 3.85% 6.11% --
WITHOUT SALES CHARGE 5/28/87 (3.42)% 4.80% 6.60% --
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (7.59)% 3.95% -- 4.55%
WITHOUT REDEMPTION 1/15/93 (3.93)% 4.27% -- 4.55%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (5.07)% -- -- 3.85%
WITHOUT REDEMPTION 8/15/95 (4.16)% -- -- 3.85%
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
<TABLE>
STATEMENT OF INVESTMENTS
April 30, 2000
Principal
LONG-TERM MUNICIPAL INVESTMENTS--87.0% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MASSACHUSETTS--68.3%
Boston Industrial Development Financing Authority,
Sewer Facility Revenue
(Harbor Electric Energy Co. Project) 7.375%, 5/15/2015 2,500,000 2,575,100
Lynn Water and Sewer Commission, General Revenue
7.25%, 12/1/2010 (Insured; MBIA, Prerefunded 12/1/2000) 1,000,000 (a) 1,036,230
Massachusetts Bay Transportation Authority,
General Transportation Systems 7%, 3/1/2021 1,000,000 1,146,460
Massachusetts Commonwealth
7%, 8/1/2012 (Prerefunded 8/1/2001) 1,850,000 (a) 1,940,965
Massachusetts Development Finance Agency, Revenue
(Assumption College) 6%, 3/1/2030 285,000 278,969
Massachusetts Education Loan Authority, Education Loan Revenue
7.75%, 1/1/2008 (Insured; MBIA) 785,000 803,220
Massachusetts Health and Educational Facilities Authority,
Revenue:
(Boston University) 6%, 5/15/2059 2,500,000 2,371,750
(Medical Center of Central Massachusetts) 7.10%, 7/1/2021 1,000,000 1,048,390
(Milton Hospital) 7%, 7/1/2016 (Insured; MBIA) 2,050,000 2,098,339
(Northeastern University) 5%, 10/1/2029 (Insured; MBIA) 2,500,000 2,142,625
(Stonehill College) 5.25%, 7/1/2028 (Insured; MBIA) 2,500,000 2,249,475
(University Hospital)
7.25%, 7/1/2019 (Insured; MBIA, Prerefunded 7/1/2000) 2,750,000 (a) 2,818,118
(Vinfen Corporation) 5.30%, 11/15/2028 2,670,000 2,218,102
Massachusetts Industrial Finance Agency, Revenue:
(College of the Holy Cross) 5%, 9/1/2023 (Insured; MBIA) 3,350,000 2,922,406
(Provider Lease Program) 8.75%, 7/15/2009 120,000 120,140
(Suffolk University) 5.25%, 7/1/2027 (Insured; AMBAC) 1,000,000 902,450
(Water Treatment-American Hingham) 6.95%, 12/1/2035 3,000,000 3,087,240
Health Care Facility (Health Foundation, Inc. Project)
6.75%, 12/1/2027 1,000,000 910,330
Resource Recovery (Ogden Haverhill Project)
5.60%, 12/1/2019 1,000,000 872,050
Massachusetts Port Authority, Revenue
Special Project (Harborside Hyatt) 10%, 3/1/2026 3,000,000 3,137,280
Massachusetts Water Pollution Abatement Trust,
Water Pollution Abatement Revenue
(New Bedford Program) 4.75%, 2/1/2026 (Insured; FGIC) 3,000,000 2,485,470
Massachusetts Water Resource Authority 4%, 12/1/2018 1,100,000 847,726
U.S. RELATED--18.7%
Guam Airport Authority, Revenue 6.70%, 10/1/2023 1,500,000 1,518,675
Puerto Rico Commonwealth 6%, 7/1/2014 1,000,000 1,018,150
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. RELATED (CONTINUED)
Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue:
6.154%, 7/1/2009 1,000,000 (b) 1,005,000
6.254%, 7/1/2010 1,000,000 (b) 1,007,500
5%, 7/1/2036 2,000,000 1,684,760
Puerto Rico Public Buildings Authority,
Guaranteed Government Facilities Revenue
6.25%, 7/1/2015 (Insured; AMBAC) 1,100,000 1,202,498
Virgin Islands Public Finance Authority, Revenue
7.25%, 10/1/2018 (Prerefunded 10/1/2002) 2,750,000 (a) 2,968,185
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $48,762,597) 48,417,603
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--10.7%
------------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health and Educational Facilities Authority,
Revenue, VRDN (Capital Assets Program):
6% 4,000,000 (c) 4,000,000
6.05% 2,000,000 (c) 2,000,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $6,000,000) 6,000,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $54,762,597) 97.7% 54,417,603
CASH AND RECEIVABLES (NET) 2.3% 1,255,880
NET ASSETS 100.0% 55,673,483
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
FSA Financial Security Assurance
FGIC Financial Guaranty Insurance
Company
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 43.2
AA Aa AA 6.2
A A A 13.4
BBB Baa BBB 18.5
F-1+, F-1 MIG1, VMIG1 & P1 SP1 & A1 11.0
Not Rated(d) Not Rated(d) Not Rated(d) 7.7
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
(E) AT APRIL 30, 2000, 26.8% OF THE FUND'S NET ASSETS ARE INSURED BY MBIA.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 54,762,597 54,417,603
Cash 377,923
Interest receivable 953,510
Receivable for investment securities sold 198,892
Receivable for shares of Beneficial Interest subscribed 1,263
Prepaid expenses 8,127
55,957,318
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 41,486
Payable for shares of Beneficial Interest redeemed 229,365
Accrued expenses 12,984
283,835
--------------------------------------------------------------------------------
NET ASSETS ($) 55,673,483
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 57,667,917
Accumulated net realized gain (loss) on investments (1,649,440)
Accumulated net unrealized appreciation (depreciation)--Note 4 (344,994)
--------------------------------------------------------------------------------
NET ASSETS ($) 55,673,483
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 50,884,971 4,647,659 140,853
Shares Outstanding 4,760,538 435,079 13,169
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 10.69 10.68 10.70
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 3,789,644
EXPENSES:
Management fee--Note 3(a) 335,169
Shareholder servicing costs--Note 3(c) 194,225
Distribution fees--Note 3(b) 29,064
Registration fees 24,265
Professional fees 17,803
Prospectus and shareholders' reports 10,213
Custodian fees 7,127
Trustees' fees and expenses--Note 3(d) 889
Loan commitment fees--Note 2 627
Miscellaneous 7,792
TOTAL EXPENSES 627,174
INVESTMENT INCOME--NET 3,162,470
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments and foreign currency
transactions (1,652,208)
Net unrealized appreciation (depreciation) on investments (3,970,259)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (5,622,467)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (2,459,997)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
-------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 3,162,470 3,402,500
Net realized gain (loss) on investments (1,652,208) 569,381
Net unrealized appreciation (depreciation)
on investments (3,970,259) (43,907)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (2,459,997) 3,927,974
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (2,893,777) (3,085,284)
Class B shares (259,468) (312,675)
Class C shares (9,225) (4,541)
Net realized gain on investments:
Class A shares (69,030) (981,213)
Class B shares (6,415) (112,114)
Class C shares (209) (3,099)
TOTAL DIVIDENDS (3,238,124) (4,498,926)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 3,182,470 7,581,389
Class B shares 939,541 1,829,019
Class C shares 86,863 341,132
Dividends reinvested:
Class A shares 1,761,629 2,550,054
Class B shares 168,615 263,046
Class C shares 5,188 7,326
Cost of shares redeemed:
Class A shares (11,874,551) (7,190,547)
Class B shares (2,659,322) (1,888,781)
Class C shares (274,987) --
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (8,664,554) 3,492,638
TOTAL INCREASE (DECREASE) IN NET ASSETS (14,362,675) 2,921,686
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 70,036,158 67,114,472
END OF PERIOD 55,673,483 70,036,158
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended April 30,
-------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 289,495 632,649
Shares issued for dividends reinvested 161,649 215,156
Shares redeemed (1,081,816) (607,023)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (630,672) 240,782
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 85,696 154,844
Shares issued for dividends reinvested 15,461 22,203
Shares redeemed (243,009) (160,697)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (141,852) 16,350
--------------------------------------------------------------------------------
CLASS C
Shares sold 7,999 28,770
Shares issued for dividends reinvested 469 621
Shares redeemed (24,788) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (16,320) 29,391
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 125,833 CLASS B SHARES REPRESENTING
$1,379,884 WERE AUTOMATICALLY CONVERTED TO 125,799 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
-------------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 11.68 11.75 11.40 11.50 11.53
Investment Operations:
Investment income--net .57 .59 .61 .63 .66
Net realized and unrealized
gain (loss) on investments (.98) .11 .40 .17 --
Total from Investment Operations (.41) .70 1.01 .80 .66
Distributions:
Dividends from investment income--net (.57) (.59) (.61) (.63) (.66)
Dividends from net realized gain
on investments (.01) (.18) (.05) (.27) (.03)
Total Distributions (.58) (.77) (.66) (.90) (.69)
Net asset value, end of period 10.69 11.68 11.75 11.40 11.50
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.42) 6.08 9.04 7.08 5.69
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .98 .93 .91 .92 .92
Ratio of net investment income
to average net assets 5.22 4.97 5.23 5.46 5.57
Portfolio Turnover Rate 57.94 47.11 48.69 24.45 34.86
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 50,885 62,958 60,529 65,809 68,812
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
-------------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.67 11.75 11.40 11.49 11.52
Investment Operations:
Investment income--net .52 .53 .55 .57 .60
Net realized and unrealized
gain (loss) on investments (.98) .10 .40 .18 --
Total from Investment Operations (.46) .63 .95 .75 .60
Distributions:
Dividends from investment income--net (.52) (.53) (.55) (.57) (.60)
Dividends from net realized gain
on investments (.01) (.18) (.05) (.27) (.03)
Total Distributions (.53) (.71) (.60) (.84) (.63)
Net asset value, end of period 10.68 11.67 11.75 11.40 11.49
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.93) 5.46 8.49 6.63 5.15
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.49 1.43 1.42 1.43 1.43
Ratio of net investment income
to average net assets 4.70 4.46 4.71 4.94 5.03
Portfolio Turnover Rate 57.94 47.11 48.69 24.45 34.86
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 4,648 6,733 6,584 6,064 5,255
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
-------------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.69 11.76 11.41 11.48 11.59
Investment Operations:
Investment income--net .49 .50 .52 .54 .40
Net realized and unrealized
gain (loss) on investments (.98) .11 .40 .20 (.08)
Total from Investment Operations (.49) .61 .92 .74 .32
Distributions:
Dividends from investment income--net (.49) (.50) (.52) (.54) (.40)
Dividends from net realized gain
on investments (.01) (.18) (.05) (.27) (.03)
Total Distributions (.50) (.68) (.57) (.81) (.43)
Net asset value, end of period 10.70 11.69 11.76 11.41 11.48
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (4.16) 5.28 8.22 6.55 3.76(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.68 1.70 1.64 1.65 1.69(c
Ratio of net investment income
to average net assets 4.51 4.06 4.51 4.64 4.72(c)
Portfolio Turnover Rate 57.94 47.11 48.69 24.45 34.86
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 141 345 1 1 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the Massachusetts Series (the
" fund" ). The fund's investment objective is to maximize current income exempt
from Federal and, where applicable, from State income taxes, without undue risk.
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 Corpotation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
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 ("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 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 $5,315 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.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 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 $282,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 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 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 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.
(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 April 30, 2000, Class B and
Class C shares were charged $27,533 and $1,531, respectively, pursuant to the
Plan, of which $2,650 and $119 for Class B and Class C shares, respectively,
were paid to DSC.
(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 April 30, 2000, Class A, Class B and Class C
shares were charged $138,072, $13,767 and $510, respectively, pursuant to the
Shareholder Services Plan, of which $13,999, $1,325 and $40 for Class A, Class B
and Class C shares respectively, were 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
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
fund. During the period ended April 30, 2000, the fund was charged $20,869
pursuant to the transfer agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 13, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
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
$33,394,776 and $49,603,164, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investment was
$344,994, consisting of $1,202,610 gross unrealized appreciation and $1,547,604
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 Trustees Dreyfus Premier State Municipal Bond Fund,
Massachusetts Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Massachusetts Series (one of the Funds constituting the Dreyfus Premier State
Municipal Bond Fund) 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 the 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 Premier State Municipal Bond Fund, Massachusetts Series 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 9, 2000
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
-- all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal income tax, and for individuals
who are Massachusetts residents, not subject to taxation by Massachusetts),
and
-- the fund hereby designates $.0040 per share as a long-term capital gain
distribution of the $.0138 per share paid on December 8, 1999. In addition,
54.03% of the long-term capital gain distribution is not subject to
Massachusetts personal income taxes.
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.
For More Information
Dreyfus Premier State Municipal Bond Fund, Massachusetts
Series
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 063AR004
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Michigan Series
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
8 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Michigan Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Michigan Series, 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, W. Michael Petty.
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 Premier State Municipal Bond Fund, Michigan
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Michigan Series, perform
during the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -2.56% total return, its Class B shares provided a -2.98% total return and its
Class C shares provided a -3.22% total return.(1) In comparison, the Lipper
Michigan Municipal Debt Funds category average provided a -2.96% total return
for the same period.(2) We attribute the fund's negative absolute returns to a
rising interest-rate environment during the period, which caused most municipal
bond prices to decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Michigan tax-exempt income as
is practical without undue risk from a diversified portfolio of longer term
municipal bonds. To achieve this objective, we employ two primary strategies.
First, we evaluate supply-and-demand factors in the bond market that are
affected by the relatively few municipal bonds issued by Michigan. Based on that
assessment, we select the individual Michigan 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, creditworthiness of its issuer,
insurance, and any provisions for early redemption. Under most circumstances, we
look for high yielding bonds that have 10-year call protection and that are
selling at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund's average duration -- a measure of sensitivity to
changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued bonds to increase, we may
reduce the fund' s average duration to make cash available for the purchase of
higher yielding securities. Conversely, if we expect demand for municipal bonds
to surge at a
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
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 consistent with other Michigan
municipal bond funds.
What other factors influenced the fund's performance?
Although the portfolio's performance was hurt by a difficult investment
environment during the final two months of 1999, the first four months of 2000
generally provided better market conditions and a market rally. This rally
helped offset most -- but not all -- of the decline in the first eight months of
the reporting period.
When the reporting period began on May 1, 1999, investors had become concerned
that strong economic growth might rekindle long-dormant inflationary pressures,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, causing
most bond prices to fall, for a total increase of 1.25 percentage points since
mid-1999.
Municipal bond prices also fell during November and December, because of adverse
supply-and-demand influences. For a variety of reasons, institutional investors
such as insurance companies and mutual funds 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% compared to the same period in 1999.
This supply reduction, combined with robust demand from individual investors,
helped support a rebound of municipal bond prices.
What is the fund's current strategy?
Our current strategy is to maintain as high a level of income as practical,
while reducing volatility and protecting assets in a rising interest-rate
environment. Accordingly, we have modestly reduced the portfolio's average
duration to the short end of the neutral range in an attempt to protect our
holdings from the brunt of potential price depreciation and capture higher
yields as they become available.
From a security selection perspective, we have focused primarily on insured
bonds with competitive yields. However, our ability to find such opportunities
has been constrained by the reduced supply of newly issued bonds in the Michigan
marketplace. Consequently, as of April 30, 2000, the fund contained a higher
level of cash -- primarily invested in tax-exempt money market instruments --
than is usual. Cash and cash equivalents comprised about 9% of the portfolio and
have helped us reduce the fund' s average duration. We hope to put our cash
reserves back to work in longer term bonds when we believe that interest rates
may have peaked and the Federal Reserve Board is finished tightening monetary
policy.
May 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-MICHIGAN
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 State
Municipal Bond Fund, Michigan Series 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 STATE MUNICIPAL BOND FUND, MICHIGAN SERIES (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. 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 MICHIGAN 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 INDEX IS NOT
LIMITED TO INVESTMENTS PRINCIPALLY IN MICHIGAN MUNICIPAL OBLIGATIONS AND DOES
NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years 10 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 5/28/87 (6.92)% 4.08% 6.51% --
WITHOUT SALES CHARGE 5/28/87 (2.56)% 5.04% 7.00% --
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (6.66)% 4.20% -- 5.06%
WITHOUT REDEMPTION 1/15/93 (2.98)% 4.52% -- 5.06%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (4.14)% -- -- 4.15%
WITHOUT REDEMPTION 8/15/95 (3.22)% -- -- 4.15%
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
<TABLE>
STATEMENT OF INVESTMENTS
April 30, 2000
Principal
LONG-TERM MUNICIPAL INVESTMENTS--91.4% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Allegan Hospital Finance Authority, HR (Allegan General
Hospital):
6.875%, 11/15/2017 4,460,000 4,200,517
7%, 11/15/2021 800,000 756,720
Big Rapids Public School District
4.75%, 5/1/2025 (Insured; FSA) 1,500,000 1,242,735
Brighton Area School District:
Zero Coupon, 5/1/2014 (Insured: AMBAC) 8,000,000 3,606,000
Zero Coupon, 5/1/2020 (Insured: AMBAC) 5,000,000 1,514,300
Caledonia Community Schools
4.75%, 5/1/2022 (Insured; FGIC) 2,000,000 1,678,500
Capital Region Airport Authority, Airport Revenue
6.70%, 7/1/2021 (Insured; MBIA) 2,500,000 2,617,225
Chippewa County Hospital Finance Authority, Revenue
5.625%, 11/1/2014 1,625,000 1,410,744
Chippewa Valley Schools:
7%, 5/1/2010 (Prerefunded 5/1/2001) 1,275,000 (a) 1,331,253
5%, 5/1/2027 (Insured; AMBAC) 2,675,000 2,310,531
Clarkston Community School
5.75%, 5/1/2016 (Insured; FGIC) (Prerefunded 5/1/2005) 1,340,000 (a) 1,393,600
Detroit:
(Unlimited Tax) 6.35%, 4/1/2014 2,870,000 2,960,749
Water Supply Systems Revenue
8.207%, 7/1/2022 (Insured; FGIC) 1,500,000 (b) 1,554,375
Detroit City School District, School Building and Site
Improvement 4.75%, 5/1/2028 (Insured; FGIC) 10,950,000 9,004,732
Dickinson County Healthcare Systems, HR
5.70%, 11/1/2018 3,000,000 2,462,970
Ferris State University of Michigan
5%, 10/1/2028 (Insured; AMBAC) 3,700,000 3,183,702
Fowlerville Community Schools School District
5.60%, 5/1/2016 (Insured; MBIA) 2,995,000 3,083,203
Grand Rapids Charter Township, Revenue (Porter Hills
Obligation Group) 5.45%, 7/1/2029 500,000 416,380
Grand Rapids Housing Finance Authority, Multi-Family Revenue
7.625%, 9/1/2023 (Collateralized; FNMA) 1,000,000 1,078,580
Huron Valley School District
Zero Coupon, 5/1/2018 (Insured; FGIC) 6,370,000 2,196,758
Kalamazoo Hospital Finance Authority,
Hospital Facilities Revenue (Borgess Medical Center)
6.25%, 6/1/2014 (Insured; FGIC) 2,000,000 2,146,660
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Kent County, Airport Facilities Revenue
(Kent County International Airport):
5.90%, 1/1/2012 1,145,000 1,202,387
5.90%, 1/1/2013 1,095,000 1,149,881
6.10%, 1/1/2025 3,000,000 3,175,050
Lake Orion Community School District
5.80%, 5/1/2015 (Insured; AMBAC) 2,085,000 2,105,496
Leslie Public School (Ingham and Jackson Counties
School Building and Site) 6%, 5/1/2015
(Insured; AMBAC) (Prerefunded 5/1/2005) 1,000,000 (a) 1,050,950
Lincoln Consolidated School District
5%, 5/1/2028 (Insured; FSA) 1,000,000 860,570
Michigan Building Authority, Lease Revenue
6.75%, 10/1/2007 (Insured; AMBAC) 1,600,000 1,677,184
Michigan Higher Education Student Loan Authority,
Student Loan Revenue:
6.875%, 10/1/2007 (Insured; AMBAC) 2,250,000 2,305,687
7.55%, 10/1/2008 (Insured; MBIA) 500,000 513,610
6.125%, 9/1/2010 1,520,000 1,541,782
Michigan Hospital Finance Authority, HR:
(Crittenton Hospital) 6.70%, 3/1/2007 2,250,000 2,334,893
(Daughters of Charity National Health Systems--Providence
Hospital) 7%, 11/1/2021 (Prerefunded 11/1/2001) 2,700,000 (a) 2,840,184
(Detroit Medical Center) 8.125%, 8/15/2012 75,000 75,093
(Genesys Health Systems)
8.125%, 10/1/2021 (Prerefunded 10/1/2005) 5,000,000 (a) 5,790,200
(Sisters of Mercy Health Corp.)
6.25%, 2/15/2009 (Insured; FSA) 1,065,000 1,099,282
Michigan Housing Development Authority:
6.75%, 12/1/2014 1,625,000 1,673,653
Rental Housing Revenue:
6.50%, 4/1/2006 2,000,000 2,089,080
7.70%, 4/1/2023 (Insured; FSA) 4,185,000 4,335,869
Michigan Housing Representatives, COP:
Zero Coupon, 8/15/2022 (Insured; AMBAC) 7,325,000 1,865,238
Zero Coupon, 8/15/2023 (Insured; AMBAC) 2,615,000 624,828
Michigan Municipal Bond Authority, Revenue
(State Revolving Fund):
6.50%, 10/1/2014 (Prerefunded 10/1/2004) 2,500,000 (a) 2,683,675
6.50%, 10/1/2017 (Prerefunded 10/1/2004) 3,500,000 (a) 3,757,145
Michigan Strategic Fund, Limited Obligation Revenue:
(Northeastern Community Mental Health Foundation)
8.25%, 1/1/2009 1,185,000 1,209,470
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Michigan Strategic Fund, Limited Obligation Revenue (continued):
(Ledyard Association Ltd. Partnership Project)
6.25%, 10/1/2011
(Insured; ITT Lyndon Property Insurance Co.) 3,075,000 3,098,524
SWDR (Genesee Power Station Project) 7.50%, 1/1/2021 3,000,000 3,079,260
Monroe County, PCR (Detroit Edison Project)
6.55%, 6/1/2024 (Insured; MBIA) 1,700,000 1,763,359
Monroe County Economic Development Corp., Ltd. Obligation
Revenue (Detroit Edison Co. Project)
6.95%, 9/1/2022 (Insured; FGIC) 2,000,000 2,282,240
Northville, Special Assessment (Wayne County)
7.875%, 1/1/2006 1,685,000 1,706,113
Northwestern Michigan College,
Community College Improvement
Revenue 7%, 7/1/2011 1,800,000 1,884,636
Plymouth-Canton Community School District
4.75%, 5/1/2023 (Insured; FSA) 1,000,000 833,680
Redford Unified School District
5.50%, 5/1/2015 (Insured; AMBAC) 1,260,000 1,263,188
Romulus Community Schools
Zero Coupon 5/1/2020 (Insured; FGIC) 1,385,000 419,461
Romulus Economic Development Corp., Ltd. Obligation EDR
(Romulus Hir Ltd. Partnership Project) 7%, 11/1/2015
(Insured; ITT Lyndon Property Insurance Co.) 3,700,000 4,103,818
South Lyon Community Schools
(School Building) 6.375%, 5/1/2018
(Prerefunded 5/1/2002) 1,500,000 (a) 1,571,490
Saint John's Public Schools 5%, 5/1/2021 (Insured; FGIC) 1,000,000 890,760
Wayne Charter County, Airport Revenue:
(Detroit Metropolitan Wayne County Airport)
5%, 12/1/2022 1,485,000 1,273,863
Special Facilities (Northwest Airlines Inc.)
6.75%, 12/1/2015 5,720,000 5,684,136
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $124,593,073) 125,965,969
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--7.0% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Michigan Strategic Fund, PCR, VRDN
(Consumers Power Project)
6.05% (Insured; AMBAC) 1,700,000 (c) 1,700,000
Midland County Economic Development Corp., Economic
Development Limited Obligation Revenue, VRDN
(Dow Chemical Co. Project) 6.15% 4,500,000 (c) 4,500,000
Royal Oak Hospital Finance Authority, HR, VRDN
(William Beaumont Hospital)
5.80% (SBPA; Bank of America) 2,000,000 (c) 2,000,000
University of Michigan, HR, VRDN 5.85% 1,500,000 (c) 1,500,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $9,700,000) 9,700,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $134,293,073) 98.4% 135,665,969
CASH AND RECEIVABLES (NET) 1.6% 2,174,109
NET ASSETS 100.0% 137,840,078
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
EDR Economic Development Revenue
FGIC Financial Guaranty
Insurance Company
FNMA Federal National
Mortgage Association
FSA Financial Security Assurance
HR Hospital Revenue
MBIA Municipal Bond
Investors Assurance
Insurance Corporation
PCR Pollution Control Revenue
SBPA Standby Bond
Purchase Agreement
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 50.7
AA Aa AA 15.0
A A A 6.6
BBB Baa BBB 4.3
F1 Mig1 SP1 7.1
Not Rated(d) Not Rated(d) Not Rated(d) 16.3
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST--SUBJECT TO PERIODIC
CHANGE.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 134,293,073 135,665,969
Interest receivable 2,387,986
Receivable for Beneficial Interest subscribed 65
Prepaid expenses 7,379
138,061,399
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 100,342
Cash overdraft due to Custodian 75,354
Payable for shares of Beneficial Interest redeemed 19,633
Accrued expenses 25,992
221,321
--------------------------------------------------------------------------------
NET ASSETS ($) 137,840,078
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 138,716,157
Accumulated net realized gain (loss) on investments (2,248,975)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 1,372,896
-------------------------------------------------------------------------------
NET ASSETS ($) 137,840,078
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 123,634,748 13,101,262 1,104,068
Shares Outstanding 8,631,190 914,777 77,057
NET ASSET VALUE PER SHARE ($) 14.32 14.32 14.33
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 9,241,821
EXPENSES:
Management fee--Note 3(a) 831,121
Shareholder servicing costs--Note 3(c) 494,747
Distribution fees--Note 3(b) 96,921
Registration fees 30,131
Professional fees 23,934
Custodian fees 16,925
Prospectus and shareholders' reports 12,963
Trustees' fees and expenses--Note 3(d) 2,360
Loan commitment fees--Note 2 1,350
Miscellaneous 8,027
TOTAL EXPENSES 1,518,479
INVESTMENT INCOME (NET) 7,723,342
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4:
Net realized gain (loss) on investments (2,252,887)
Net unrealized appreciation (depreciation) on investments (10,055,414)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (12,308,301)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (4,584,959)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 7,723,342 8,377,835
Net realized gain (loss) on investments (2,252,887) 1,678,968
Net unrealized appreciation (depreciation)
on investments (10,055,414) (357,792)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (4,584,959) 9,699,011
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (6,855,425) (7,320,520)
Class B shares (805,529) (996,364)
Class C shares (62,388) (60,951)
Net realized gain on investments:
Class A shares (779,580) (1,532,800)
Class B shares (96,924) (242,336)
Class C shares (7,763) (19,667)
TOTAL DIVIDENDS (8,607,609) (10,172,638)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 12,607,868 10,496,366
Class B shares 1,932,898 6,039,658
Class C shares 172,133 1,596,045
Dividends reinvested:
Class A shares 4,300,261 5,128,473
Class B shares 502,087 750,794
Class C shares 25,391 33,463
Cost of shares redeemed:
Class A shares (27,570,960) (18,726,345)
Class B shares (10,081,039) (5,296,289)
Class C shares (835,085) (368,225)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (18,946,446) (346,060)
TOTAL INCREASE (DECREASE) IN NET ASSETS (32,139,014) (819,687)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 169,979,092 170,798,779
END OF PERIOD 137,840,078 169,979,092
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended April 30,
----------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 861,443 668,141
Shares issued for dividends reinvested 294,083 324,921
Shares redeemed (1,888,153) (1,188,891)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (732,627) (195,829)
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 129,135 382,748
Shares issued for dividends reinvested 34,258 47,574
Shares redeemed (683,893) (336,686)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (520,500) 93,636
--------------------------------------------------------------------------------
CLASS C
Shares sold 11,839 100,814
Shares issued for dividends reinvested 1,732 2,120
Shares redeemed (57,083) (23,362)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (43,512) 79,572
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 311,268 CLASS B SHARES REPRESENTING
$4,587,179 WERE AUTOMATICALLY CONVERTED TO 311,312 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
-------------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 15.57 15.61 15.14 15.15 15.14
Investment Operations:
Investment income--net .76 .78 .80 .81 .83
Net realized and unrealized gain (loss)
on investments (1.16) .12 .48 .21 .20
Total from Investment Operations (.40) .90 1.28 1.02 1.03
Distributions:
Dividends from investment income--net (.76) (.78) (.80) (.81) (.83)
Dividends from net realized gain
on investments (.09) (.16) (.01) (.22) (.19)
Total Distributions (.85) (.94) (.81) (1.03) (1.02)
Net asset value, end of period 14.32 15.57 15.61 15.14 15.15
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (2.56) 5.89 8.55 6.89 6.81
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .94 .92 .92 .91 .93
Ratio of net investment income
to average net assets 5.18 4.96 5.12 5.34 5.35
Portfolio Turnover Rate 29.55 36.17 41.46 22.32 56.88
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 123,635 145,764 149,221 155,568 166,538
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
-------------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 15.56 15.61 15.13 15.15 15.13
Investment Operations:
Investment income--net .69 .70 .72 .74 .75
Net realized and unrealized gain (loss)
on investments (1.15) .11 .49 .20 .21
Total from Investment Operations (.46) .81 1.21 .94 .96
Distributions:
Dividends from investment income--net (.69) (.70) (.72) (.74) (.75)
Dividends from net realized gain
on investments (.09) (.16) (.01) (.22) (.19)
Total Distributions (.78) (.86) (.73) (.96) (.94)
Net asset value, end of period 14.32 15.56 15.61 15.13 15.15
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (2.98) 5.29 8.08 6.27 6.33
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.44 1.42 1.42 1.42 1.44
Ratio of net investment income
to average net assets 4.66 4.44 4.61 4.82 4.82
Portfolio Turnover Rate 29.55 36.17 41.46 22.32 56.88
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 13,101 22,338 20,938 19,338 19,031
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
-------------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 15.57 15.61 15.14 15.16 15.18
Investment Operations:
Investment income--net .65 .66 .67 .69 .50
Net realized and unrealized gain (loss)
on investments (1.15) .12 .48 .20 .17
Total from Investment Operations (.50) .78 1.15 .89 .67
Distributions:
Dividends from investment income--net (.65) (.66) (.67) (.69) (.50)
Dividends from net realized gain
on investments (.09) (.16) (.01) (.22) (.19)
Total Distributions (.74) (.82) (.68) (.91) (.69)
Net asset value, end of period 14.33 15.57 15.61 15.14 15.16
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (3.22) 5.08 7.70 5.94 6.12(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.69 1.67 1.69 1.72 1.70(c)
Ratio of net investment income
to average net assets 4.43 4.16 4.26 4.47 4.47(c)
Portfolio Turnover Rate 29.55 36.17 41.46 22.32 56.88
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,104 1,877 640 241 133
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the Michigan Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. 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. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
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 ("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 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 receives net earnings credits based on available cash
balances left on deposit.
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
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 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 $1,231,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 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 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 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.
DSC retained $9,142 during the period ended April 30, 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 April 30, 2000, Class B and
Class C shares were charged $86,348 and $10,573, respectively, pursuant to the
Plan, of which $7,430 and $908 for Class B and Class C shares, respectively,
were paid to DSC.
(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 April 30, 2000, Class A, Class B and Class C
shares were charged $331,084, $43,174 and $3,524, respectively, pursuant to the
Shareholder Services Plan, of which $34,035, $3,715 and $303 for Class A, Class
B and Class C shares, respectively, were 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
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
fund. During the period ended April 30, 2000, the fund was charged $81,779
pursuant to the transfer agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 13, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
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
$43,317,395 and $69,249,749, respectively.
At April 30, 2000, accumulated net unrealized appreciation on investments was
$1,372,896, consisting of $4,721,441 gross unrealized appreciation and
$3,348,545 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 Trustees
Dreyfus Premier State Municipal Bond Fund, Michigan Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Michigan Series (the "Fund") (one of the funds constituting the Dreyfus Premier
State Municipal Bond Fund) 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 Premier State Municipal Bond Fund, Michigan Series 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 9, 2000
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
-- all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are Michigan
residents, Michigan personal income taxes) , and
-- the fund hereby designates $.0736 per share as a long-term capital gain
distribution of the $.0867 per share paid on December 8, 1999.
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 Premier State Municipal Bond Fund,
Michigan Series
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 053AR004
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Minnesota Series
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
8 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
Dreyfus Premier
State Municipal Bond Fund,
Minnesota Series
The Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Minnesota Series, 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, W. Michael Petty.
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 Premier State Municipal Bond Fund, Minnesota
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Minnesota Series, perform
during the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -2.48% total return, its Class B shares provided a -2.97% total return and its
Class C shares provided a -3.30% total return.(1) In comparison, the Lipper
Minnesota Municipal Debt Funds category average provided a -3.11% total return
for the same period.(2 )We attribute the fund's negative absolute returns to a
rising interest-rate environment during the period, which caused most municipal
bond prices to decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Minnesota tax-exempt income
as is practical without undue risk from a diversified portfolio of longer term
municipal bonds. To achieve this objective, we employ two primary strategies.
First, we evaluate supply-and-demand factors in the bond market that are
affected by the relatively few municipal bonds issued by Minnesota. Based on
that assessment, we select the individual Minnesota 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, creditworthiness of its
issuer, insurance, and any provisions for early redemption. Under most
circumstances, we look for high yielding bonds that have 10-year call protection
and that are selling at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' s average duration -- a measure of sensitivity to
changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued bonds to increase, we may
reduce the fund' s average duration to make cash available for the purchase of
higher yielding securities. Conversely, if we expect demand for municipal bonds
to surge at a
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
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 consistent with other Minnesota
municipal bond funds.
What other factors influenced the fund's performance?
Although the portfolio's performance was hurt by a difficult investment
environment during the final two months of 1999, the first four months of 2000
generally provided better market conditions and a market rally. This rally
helped offset most -- but not all -- of the decline in the first eight months of
the reporting period.
When the reporting period began on May 1, 1999, investors had become concerned
that strong economic growth might rekindle long-dormant inflationary pressures,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, causing
most bond prices to fall, for a total increase of 1.25 percentage points since
mid-1999.
Municipal bond prices also fell during November and December, because of adverse
supply-and-demand influences. For a variety of reasons, institutional investors
such as insurance companies and mutual funds 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% compared to the same period in 1999.
This supply reduction, combined with robust demand from individual investors,
helped support a rebound of municipal bond prices.
What is the fund's current strategy?
Our current strategy is to maintain as high a level of income as practical,
while reducing volatility and protecting assets in a rising interest-rate
environment. Accordingly, we have modestly reduced the portfolio's average
duration to the neutral range in an attempt to protect our holdings from the
brunt of potential price depreciation and capture higher yields as they become
available.
From a security selection perspective, we have focused primarily on insured
bonds with competitive yields. However, our ability to find such opportunities
has been constrained by the small size of the Minnesota marketplace and the
reduced supply of newly issued bonds. Consequently, as of April 30, 2000, the
fund contained a higher level of cash -- primarily invested in tax-exempt money
market instruments -- than is usual. Cash and cash equivalents comprised about
6% of the portfolio and have helped us reduce the fund's average duration. We
hope to put our cash reserves back to work in longer term bonds when we believe
that interest rates may have peaked and the Federal Reserve Board is finished
tightening monetary policy.
May 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-MINNESOTA
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 State
Municipal Bond Fund, Minnesota Series 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 STATE MUNICIPAL BOND FUND, MINNESOTA SERIES (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. 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 MINNESOTA 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 INDEX IS NOT
LIMITED TO INVESTMENTS PRINCIPALLY IN MINNESOTA MUNICIPAL OBLIGATIONS AND DOES
NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years 10 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 5/28/87 (6.86)% 3.50% 5.94% --
WITHOUT SALES CHARGE 5/28/87 (2.48)% 4.45% 6.43% --
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (6.66)% 3.59% -- 4.53%
WITHOUT REDEMPTION 1/15/93 (2.97)% 3.92% -- 4.53%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (4.22)% -- -- 3.48%
WITHOUT REDEMPTION 8/15/95 (3.30)% -- -- 3.48%
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
April 30, 2000
<TABLE>
STATEMENT OF INVESTMENTS
Principal
LONG-TERM MUNICIPAL INVESTMENTS--94.3% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Anoka County:
RRR (Northern States Power Co.)
4.50%, 12/1/2007 (Insured; MBIA) 1,000,000 939,460
SWDR (United Power Association Project)
6.95%, 12/1/2008 (Guaranteed; National Rural
Utilities Cooperative Finance Corp.) 3,825,000 3,908,347
Brooklyn Park 5.85%, 2/1/2016 (Insured; FSA) 1,425,000 1,444,351
Dakota County Housing and Redevelopment Authority, South
Saint Paul Revenue (Single Family-GNMA Program)
8.10%, 9/1/2012 65,000 66,332
Eden Prairie, MFHR:
(Eden Investments Project)
7.40%, 8/1/2025 (Insured; FHA) 500,000 511,335
(Welsh Parkway Apartments) 8%, 7/1/2026 (Insured; FHA) 2,735,000 2,820,633
Golden Valley, Revenue (Covenant Retirement Communities)
5.50%, 12/1/2029 2,000,000 1,691,480
Grand Rapids Housing and Redevelopment Authority, Revenue
(Governmental Housing-Lakeshore Project)
5.30%, 10/1/2000 1,000,000 877,650
Harmony, MFHR (Zedakah Foundation Project)
5.95 %, 9/1/2020 1,235,000 1,182,969
Hastings, Health Care Facility Revenue (Regina Medical
Center) 5.30%, 9/15/2028 (Insured; ACA) 2,000,000 1,688,900
Hibbing Economic Development Authority,
Housing Development Revenue
4.70%, 10/1/2028 (Insured; MBIA) 715,000 579,136
Hubbard County, SWDR (Potlatch Corp. Project)
7.375%, 8/1/2013 1,000,000 1,013,120
Inver Grove Heights Independent School District Number 199
5.75%, 2/1/2017 2,225,000 2,237,215
Mahtomedi Independent School District Number 832
Zero Coupon, 2/1/2017 (Insured; MBIA) 1,275,000 483,544
Minneapolis:
Zero Coupon, 12/1/2014 1,825,000 808,293
Health Care Facilities Revenue (Shelter Care Foundation):
6%, 4/1/2010 920,000 843,208
6.50%, 4/1/2029 1,000,000 866,730
Home Ownership Program 7.10%, 6/1/2021 375,000 385,391
HR (Lifespan Inc.-Minneapolis Children's Medical
Project) 7%, 12/1/2020 (Prerefunded 6/1/2001) 5,650,000 (a) 5,906,058
MFHR (Churchill Apartments Project)
7.05%, 10/1/2022 (Insured; FSA) 4,000,000 4,159,240
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Minneapolis (continued)
MFMR (Seward Towers Project)
7.375%, 12/20/2030 (Collateralized; GNMA) 2,350,000 2,408,656
Minneapolis and Saint Paul Metropolitan Airports Commission,
Airport Revenue:
5%, 1/1/2030 (Insured; AMBAC) 1,915,000 1,652,071
5.125%, 1/1/2031 (Insured; FGIC) 2,150,000 1,894,494
Minneapolis Community Development Agency, Ltd. Tax
Support Development Revenue:
8%, 12/1/2009 300,000 306,399
7.75%, 12/1/2019 2,650,000 2,734,164
7.40%, 12/1/2021 2,000,000 2,106,480
Minneapolis-Saint Paul Housing and Redevelopment Authority,
Health Care Systems Revenue
(Group Health Plan Inc., Project) 6.75%, 12/1/2013 2,750,000 2,729,512
Minneapolis-Saint Paul Housing Finance Board, SFMR:
8.875%, 11/1/2018 (Collateralized; GNMA) 30,000 30,352
8.30%, 8/1/2021 (Collateralized; GNMA) 155,000 155,835
7.30%, 8/1/2031 (Collateralized; GNMA) 4,075,000 4,166,361
State of Minnesota (Duluth Airport) 6.25%, 8/1/2014 2,500,000 2,582,625
Minnesota Agricultural and Economic Development Board
Revenue:
Fairview Health Care Systems 6.375%, 11/15/2029 2,500,000 2,405,225
Minnesota Small Business Development Loan
8.125%, 8/1/2009 500,000 501,765
Minnesota Higher Education Facilities Authority:
Adjustable Demand Revenue (Bethel College and Seminary)
5.10%, 4/1/2019 (LOC; Allied Irish Bank PLC) 4,100,000 3,686,556
College and University Revenue:
(College at Saint Benedict) 5.35%, 3/1/2020 1,000,000 902,050
(University of Saint Thomas):
5.35%, 4/1/2017 1,000,000 939,640
5.40%, 4/1/2022 2,200,000 2,031,766
Mortgage Revenue (Augsburg College) 5.30%, 10/1/2027 2,395,000 2,050,072
Minnesota Housing Finance Agency, Revenue:
Rental Housing 6.10%, 8/1/2009 1,975,000 1,977,726
Single Family Mortgage:
7.45%, 7/1/2022 (Insured; FHA) 910,000 929,702
6.95%, 7/1/2026 2,140,000 2,195,019
Minnesota Public Facilities Authority, Water Pollution Control
Revenue 6.50%, 3/1/2014 (Prerefunded 3/1/2001) 4,200,000 (a) 4,402,944
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
New Hope, Housing and Health Care Facilities Revenue
(Masonic Home - North Ridge):
5.90, 3/1/2019 1,000,000 841,160
5.875%, 3/1/2029 3,000,000 2,422,950
Northern Municipal Power Agency, Electric System Revenue
5.365%, 1/1/2016 (Insured; FSA ) 5,000,000 (b,c) 4,770,900
City of Red Wing, Health Care Facilities Revenue
(River Region Obligation Group) 6.50%, 9/1/2022 3,445,000 3,231,134
Rosemount Independent School District Number 196
Zero Coupon, 4/1/2014 (Insured; MBIA) 3,000,000 1,377,210
Saint Cloud, Hospital Facilities Revenue
(The Saint Cloud Hospital)
7%, 7/1/2020 (Insured; AMBAC) (Prerefunded 7/1/2001) 1,000,000 (a) 1,046,430
Saint Paul Housing and Redevelopment Authority, Revenue:
Hospital (HealthEast Project):
5.70%, 11/1/2015 (Insured; ACA) 2,000,000 1,901,080
5.85%, 11/1/2017 (Insured; ACA) 1,000,000 952,780
Single Family Mortgage
6.90%, 12/1/2021 (Insured; FNMA) 1,955,000 1,999,574
Sartell, PCR (Champion International Corp. Project)
6.95%, 10/1/2012 5,000,000 5,164,300
Seaway Port Authority of Duluth, Industrial Development Dock
and Wharf Revenues(Cargill Inc. Project) 6.80%, 5/1/2012 3,000,000 3,127,860
Southern Municipal Power Agency,
Power Supply System Revenue:
Zero Coupon, 1/1/2016 (Insured; MBIA) 1,270,000 1,172,985
Zero Coupon, 1/1/2021 (Insured; MBIA) 8,000,000 2,342,400
Zero Coupon, 1/1/2025 (Insured; MBIA) 5,255,000 1,195,880
Zero Coupon, 1/1/2026 (Insured; MBIA) 15,530,000 3,328,390
Zero Coupon, 1/1/2027 (Insured; MBIA) 4,800,000 968,832
University of Minnesota, College and University Revenue
5.50%, 7/1/2021 5,925,000 5,776,283
Washington County Housing and Redevelopment Authority,
Hospital Facility Revenue (Healtheast Project):
5.375%, 11/15/2018 (Insured; ACA) 5,000,000 4,480,450
5.50%, 11/15/2027 (Insured; ACA) 2,455,000 2,148,002
Western Minnesota Municipal Power Agency, Electric
and Light Revenue 5.50%, 1/1/2012 (Insured; AMBAC) 1,000,000 1,007,690
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $128,069,759) 124,459,096
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--6.0% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Beltrami County, Environmental Control Revenue,
VRDN (Northwood Panelboard Co. Project)
6.10% (LOC; Union Bank of Switzerland) 1,900,000 (d) 1,900,000
Cohasset, Revenue, VRDN
(Minnesota Power and Light Co. Project)
6% (LOC; ABN Amro Bank N.V.) 4,000,000 (d) 4,000,000
Minneapolis-Saint Paul Housing and Redevelopment Authority,
Health Care Systems Revenue, VRDN
(Children's Health Care) 6.05% (Insured; FSA) 2,000,000 (d) 2,000,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $7,900,000) 7,900,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $135,969,759) 100.3% 132,359,096
LIABILITIES, LESS CASH AND RECEIVABLES (.3%) (354,335)
NET ASSETS 100.0% 132,004,761
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
ACA American Capital Access
AMBAC American Municipal Bond
Assurance Corporation
FGIC Financial Guaranty Insurance
Company
FHA Federal Housing Administration
FNMA Federal National Mortgage
Association
FSA Financial Security Assurance
GNMA Government National Mortgage
Association
HR Hospital Revenue
LOC Letter of Credit
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
MFHR Multi-Family Housing Revenue
MFMR Multi-Family Mortgage Revenue
PCR Pollution Control Revenue
RRR Resources Recovery Revenue
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 37.3
AA Aa AA 13.2
A A A 21.6
BBB Baa BBB 11.4
F1 MIG1 SP1 8.8
Not Rated(e) Not Rated(e) Not Rated(e) 7.7
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) INVERSE FLOATER SECURITY-THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT APRIL 30, 2000, THIS
SECURITY AMOUNTED TO $4,770,900 OR 3.6% OF NET ASSETS.
(D) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST-SUBJECT TO PERIODIC
CHANGE.
(E) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
( )SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 135,969,759 132,359,096
Cash 53,830
Interest receivable 2,111,193
Receivable for shares of Beneficial Interest subscribed 30,000
Prepaid expenses 7,695
134,561,814
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 96,739
Payable for investment securities purchased 2,386,775
Payable for shares of Beneficial Interest redeemed 48,368
Accrued expenses 25,171
2,557,053
--------------------------------------------------------------------------------
NET ASSETS ($) 132,004,761
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 136,053,950
Accumulated net realized gain (loss) on investments (438,526)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (3,610,663)
--------------------------------------------------------------------------------
NET ASSETS ($) 132,004,761
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 116,260,723 14,670,540 1,073,498
Shares Outstanding 8,237,961 1,037,792 75,955
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 14.11 14.14 14.13
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 9,066,461
EXPENSES:
Management fee--Note 3(a) 814,463
Shareholder servicing costs--Note 3(c) 466,310
Distribution fees--Note 3(b) 112,538
Registration fees 29,765
Professional fees 20,244
Prospectus and shareholders' reports 18,547
Custodian fees 16,807
Loan commitment fees--Note 2 1,284
Trustees' fees and expenses--Note 3(d) 442
Miscellaneous 16,954
TOTAL EXPENSES 1,497,354
INVESTMENT INCOME--NET 7,569,107
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (447,921)
Net unrealized appreciation (depreciation) on investments (11,735,245)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (12,183,166)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (4,614,059)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
----------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 7,569,107 8,002,206
Net realized gain (loss) on investments (447,921) 1,265,513
Net unrealized appreciation (depreciation)
on investments (11,735,245) (1,000,899)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (4,614,059) 8,266,820
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (6,551,289) (6,587,991)
Class B shares (971,307) (1,370,327)
Class C shares (46,511) (43,888)
Net realized gain on investments:
Class A shares (504,105) (303,409)
Class B shares (72,260) (72,456)
Class C shares (2,995) (2,946)
TOTAL DIVIDENDS (8,148,467) (8,381,017)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 16,089,847 15,840,640
Class B shares 1,911,126 6,424,682
Class C shares 486,001 759,136
Dividends reinvested:
Class A shares 4,327,654 4,269,607
Class B shares 649,087 925,393
Class C shares 31,502 38,489
Cost of shares redeemed:
Class A shares (27,782,707) (11,847,645)
Class B shares (15,466,061) (6,315,442)
Class C shares (777,728) (31,617)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (20,531,279) 10,063,243
TOTAL INCREASE (DECREASE) IN NET ASSETS (33,293,805) 9,949,046
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 165,298,566 155,349,520
END OF PERIOD 132,004,761 165,298,566
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended April 30,
----------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 1,102,831 1,027,749
Shares issued for dividends reinvested 301,122 276,384
Shares redeemed (1,942,658) (767,790)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (538,705) 536,343
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 129,739 414,987
Shares issued for dividends reinvested 44,882 59,803
Shares redeemed (1,065,330) (409,838)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (890,709) 64,952
--------------------------------------------------------------------------------
CLASS C
Shares sold 34,530 48,848
Shares issued for dividends reinvested 2,176 2,489
Shares redeemed (53,552) (2,051)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (16,846) 49,286
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 656,217 CLASS B SHARES REPRESENTING
$9,496,629 WERE AUTOMATICALLY CONVERTED TO 657,231 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 15.30 15.30 15.03 14.98 14.90
Investment Operations:
Investment income--net .75 .78 .82 .82 .82
Net realized and unrealized
gain (loss) on investments (1.13) .04 .27 .09 .08
Total from Investment Operations (.38) .82 1.09 .91 .90
Distributions:
Dividends from investment income--net (.75) (.78) (.82) (.82) (.82)
Dividends from net realized gain
on investments (.06) (.04) -- (.04) --
Total Distributions (.81) (.82) (.82) (.86) (.82)
Net asset value, end of period 14.11 15.30 15.30 15.03 14.98
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (2.48) 5.41 7.36 6.16 6.11
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .93 .91 .90 .91 .90
Ratio of net investment income
to average net assets 5.20 5.05 5.32 5.42 5.41
Portfolio Turnover Rate 13.45 41.27 13.37 25.82 35.47
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 116,261 134,314 126,115 129,031 138,058
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
----------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 15.33 15.33 15.06 15.01 14.92
Investment Operations:
Investment income--net .67 .70 .74 .74 .74
Net realized and unrealized
gain (loss) on investments (1.13) .04 .27 .09 .09
Total from Investment Operations (.46) .74 1.01 .83 .83
Distributions:
Dividends from investment income--net (.67) (.70) (.74) (.74) (.74)
Dividends from net realized gain
on investments (.06) (.04) -- (.04) --
Total Distributions (.73) (.74) (.74) (.78) (.74)
Net asset value, end of period 14.14 15.33 15.33 15.06 15.01
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (2.97) 4.86 6.79 5.60 5.62
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.46 1.43 1.42 1.44 1.43
Ratio of net investment income
to average net assets 4.64 4.52 4.79 4.90 4.87
Portfolio Turnover Rate 13.45 41.27 13.37 25.82 35.47
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 14,671 29,562 28,568 26,004 25,617
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
----------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 15.33 15.33 15.06 15.01 14.96
Investment Operations:
Investment income--net .63 .65 .69 .70 .50
Net realized and unrealized
gain (loss) on investments (1.14) .04 .27 .09 .05
Total from Investment Operations (.51) .69 .96 .79 .55
Distributions:
Dividends from investment income--net (.63) (.65) (.69) (.70) (.50)
Dividends from net realized gain
on investments (.06) (.04) -- (.04) --
Total Distributions (.69) (.69) (.69) (.74) (.50)
Net asset value, end of period 14.13 15.33 15.33 15.06 15.01
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (3.30) 4.53 6.46 5.34 5.15(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.73 1.74 1.73 1.67 1.42(c)
Ratio of net investment income
to average net assets 4.38 4.16 4.40 4.62 4.00(c)
Portfolio Turnover Rate 13.45 41.27 13.37 25.82 35.47
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,073 1,422 667 307 373
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company and operates as a series company
currently offering thirteen series, including the Minnesota Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. 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. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
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 ("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 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 $7,195 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.
The fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 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 $158,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 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 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 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.
DSC retained $308 during the period ended April 30, 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 April 30, 2000, Class B and
Class C shares were charged $104,577 and $7,961, respectively, pursuant to the
Plan, of which $8,172 and $888 for Class B and Class C shares, respectively,
were paid to DSC.
(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 the average daily
net assets for the provision of certain services. The services provided may
include personal services relating to shareholder accounts, such 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 April 30, 2000, Class A, Class B and Class C shares were
charged $315,268, $52,289 and $2,654, respectively, pursuant to the Shareholder
Services Plan, of which $32,068, $4,086 and $296, respectively, were paid to
DSC.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 $67,882 pursuant to the transfer
agency agreement.
(D) 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 receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period April 30, 2000, amounted to $19,351,656
and $50,942,592, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$3,610,663, consisting of $2,086,606 gross unrealized appreciation and
$5,697,269 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 Trustees Dreyfus Premier State Municipal Bond Fund,
Minnesota Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Minnesota Series (one of the Funds constituting the Dreyfus Premier State
Municipal Bond Fund) 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 periods 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 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 State Municipal Bond Fund, Minnesota Series 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 periods, in conformity with accounting
principles generally accepted in the United States.
New York, New York
June 9, 2000
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
--all the dividends paid from investment income--net are "exempt -interest
dividends" (not subject to regular Federal and, for individuals who are
Minnesota residents, Minnesota personal income taxes), and
--the fund hereby designates $.0370 per share as a long-term capital gain
distribution of the $.0560 per share paid on December 8, 1999.
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 Premier State Municipal Bond Fund, Minnesota
Series
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 055AR004
================================================================================
Dreyfus Premier State
Municipal Bond Fund,
New Jersey Series
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
8 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
15 Financial Highlights
18 Notes to Financial Statements
23 Report of Independent Auditors
24 Important Tax Information
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
New Jersey Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, New Jersey Series, 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, W. Michael Petty.
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 Premier State Municipal Bond Fund, New Jersey
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, New Jersey Series, perform
during the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -4.96% total return, its Class B shares provided a -5.45% total return and its
Class C shares provided a -5.66% total return.(1) In comparison, the Lipper New
Jersey Municipal Debt Funds category average provided a -3.54% total return for
the same period.(2) We attribute the fund's negative absolute returns to a
rising interest-rate environment during the period, which caused most municipal
bond prices to decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and New Jersey tax-exempt income
as is practical without undue risk from a diversified portfolio of longer term
municipal bonds. To achieve this objective, we employ two primary strategies.
First, we evaluate supply-and-demand factors in the bond market that are
affected by the relatively few municipal bonds issued by New Jersey. Based on
that assessment, we select the individual New Jersey 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, creditworthiness of its
issuer, insurance, and any provisions for early redemption. Under most
circumstances, we look for high yielding bonds that have 10-year call protection
and that are selling at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund's average duration -- a measure of sensitivity to
changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued bonds to increase, we may
reduce the fund's average duration to make cash available for the purchase of
higher yielding securities.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
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 consistent with other New Jersey municipal
bond funds.
What other factors influenced the fund's performance?
Although the fund's performance was hurt by a difficult investment environment
during the final two months of 1999, the first four months of 2000 generally
provided better market conditions and a market rally. This rally helped offset
most -- but not all -- of the decline in the first eight months of the reporting
period.
When the reporting period began on May 1, 1999, investors had become concerned
that strong economic growth might rekindle long-dormant inflationary pressures,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, causing
most bond prices to fall, for a total increase of 1.25 percentage points since
mid-1999.
Municipal bond prices also fell during November and December, because of adverse
supply-and-demand influences. For a variety of reasons, institutional investors
such as insurance companies and mutual funds 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% compared to the same period in 1999.
This supply reduction, combined with robust demand from individual investors,
helped support a rebound of municipal bond prices.
What is the fund's current strategy?
Our current strategy is to maintain as high a level of income as practical while
reducing volatility and protecting assets in a rising interest-rate environment.
Accordingly, we have modestly reduced the portfolio's average duration in an
attempt to protect our holdings from the brunt of potential price depreciation
and capture higher yields as they become available
From a security selection perspective, we have reduced our holdings of discount
bonds and we have enlarged our holdings of insured bonds with competitive
yields. While our ability to find such opportunities has been constrained by the
small size of the New Jersey municipal marketplace and by the reduced supply of
newly issued bonds, our move to higher yielding securities has helped offset
some of the price decline caused by rising interest rates.
May 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-NEW JERSEY
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 State
Municipal Bond Fund, New Jersey Series Class A shares and Class B shares and the
Lehman Brothers Municipal Bond Index
((+)) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
ON MARCH 31, 1997, THE NEW JERSEY SERIES COMMENCED OPERATIONS THROUGH A TRANSFER
OF ASSETS FROM THE NEW JERSEY SERIES OF PREMIER INSURED MUNICIPAL BOND FUND. THE
FINANCIAL DATA PROVIDED ABOVE PRIOR TO SUCH DATE IS FOR THE NEW JERSEY SERIES OF
PREMIER INSURED MUNICIPAL BOND FUND.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN EACH OF THE CLASS A SHARES
AND CLASS B SHARES OF DREYFUS PREMIER STATE MUNICIPAL BOND FUND, NEW JERSEY
SERIES (THE "FUND") ON 5/4/94 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX (THE "INDEX") ON THAT DATE. FOR
COMPARATIVE PURPOSES, THE VALUE OF THE INDEX ON 4/30/94 IS USED AS THE BEGINNING
VALUE ON 5/4/94. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
PERFORMANCE FOR CLASS C SHARES WILL VARY FROM THE PERFORMANCE OF BOTH CLASS A
AND CLASS B SHARES SHOWN ABOVE DUE TO DIFFERENCES IN CHARGES AND EXPENSES.
THE FUND INVESTS PRIMARILY IN NEW JERSEY MUNICIPAL SECURITIES AND ITS
PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT THE MAXIMUM INITIAL SALES
CHARGE ON CLASS A SHARES AND THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE ON
CLASS B SHARES AND ALL OTHER APPLICABLE FEES AND EXPENSES. THE INDEX IS NOT
LIMITED TO INVESTMENTS PRINCIPALLY IN NEW JERSEY MUNICIPAL OBLIGATIONS AND DOES
NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date((+)) 1 Year 5 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 5/4/94 (9.24)% 3.22% 3.72%
WITHOUT SALES CHARGE 5/4/94 (4.96)% 4.17% 4.52%
CLASS B SHARES
WITH REDEMPTION((+)(+)) 5/4/94 (9.03)% 3.33% 3.87%
WITHOUT REDEMPTION 5/4/94 (5.45)% 3.65% 4.00%
CLASS C SHARES
WITH REDEMPTION((+)(+)(+)) 12/4/95 (6.55)% -- 2.04%
WITHOUT REDEMPTION 12/4/95 (5.66)% -- 2.04%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
((+)) ON MARCH 31, 1997, THE NEW JERSEY SERIES COMMENCED OPERATIONS THROUGH A
TRANSFER OF ASSETS FROM THE NEW JERSEY SERIES OF PREMIER INSURED MUNICIPAL BOND
FUND. THE FINANCIAL DATA PROVIDED ABOVE PRIOR TO SUCH DATE IS FOR THE NEW JERSEY
SERIES OF PREMIER INSURED MUNICIPAL BOND FUND.
((+)(+)) 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
April 30, 2000
<TABLE>
STATEMENT OF INVESTMENTS
Principal
LONG-TERM MUNICIPAL INVESTMENTS--85.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NEW JERSEY--75.8%
Camden County Improvement Authority, Revenue (Health
Care Redevelopment Project--Cooper Health System
(Obligation Group)
5.875%, 2/15/2015 100,000 74,042
Carteret Board of Education, COP
6%, 1/15/2024 (Insured; MBIA) 440,000 451,317
Mercer County Improvement Authority, Revenue
(County Courthouse Project) 5.75%, 11/1/2017 500,000 504,920
New Jersey Economic Development Authority, Revenue
(Educational Testing Service) 4.75%, 5/15/2025
(Insured; MBIA) 900,000 756,657
First Mortgage:
(The Evergreens):
6%, 10/1/2017 650,000 559,663
6%, 10/1/2022 700,000 584,500
(Fellowship Village) 5.50%, 1/1/2018 450,000 364,874
Special Facility (Continental Airlines Inc. Project)
6.25%, 9/15/2019 1,320,000 1,228,920
State Lease (State Office Buildings Projects):
6.125%, 6/15/2018 (Insured; AMBAC) 1,000,000 1,037,510
(Department of Human Services) 6.25%, 7/1/2024 1,000,000 1,006,250
Water Facilities:
(New Jersey American Water Co. Inc. Project)
6.50%, 4/1/2022 (Insured; FGIC) 500,000 510,785
New Jersey Health Care Facilities Financing Authority, Revenue:
(Burdette Tomlin Memorial Hospital) 5.50%, 7/1/2019 500,000 450,905
(General Hospital Center at Passaic) 6.75%, 7/1/2019
(Insured; FSA) 550,000 613,954
(Saint Barnabas) Zero Coupon, 7/1/2023 (Insured; MBIA) 1,000,000 241,560
(Saint Elizabeth Hospital Obligation Group) 6%, 7/1/2020 75,000 61,674
(Virtua Health Issue) 4.50%, 7/1/2028 (Insured; FSA) 250,000 194,527
New Jersey Highway Authority, Garden State Parkway
General Revenue
6%, 1/1/2019 640,000 669,126
New Jersey Turnpike Authority, Turnpike Revenue
6.50%, 1/1/2016 220,000 240,000
South Jersey Transportation Authority, LR
(Raytheon Aircraft Service Inc. Project) 6.15%, 1/1/2022 500,000 456,255
West Orange Board of Education, COP
6%, 10/1/2024 (Insured; MBIA) 500,000 509,705
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. RELATED--9.3%
Puerto Rico Housing Bank and Finance Agency, SFMR
6.25%, 4/1/2029 (Insured; GNMA) 285,000 285,442
Virgin Islands Public Finance Authority, Gross Receipts
Taxes Lien Note
Gross Receipts Taxes Lien Note 6.50%, 10/1/2024 1,000,000 1,007,550
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $12,439,652) 11,810,136
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--13.0%
------------------------------------------------------------------------------------------------------------------------------------
New Jersey Economic Development Authority, VRDN:
EDR (El Dorado Terminal) 6% 400,000 (a) 400,000
Natural Gas Facilities Revenue (NUI Corp. Project)
(Insured; AMBAC) 5.75% 400,000 (a) 400,000
Water Facilities Revenue (United Water New Jersey Inc. Project)
(Insured; AMBAC) 5.95% 400,000 (a) 400,000
Port Authority of New York and New Jersey,
Special Obligation Revenue, VRDN
(Versatile Structure Obligation):
6.10% 500,000 (a) 500,000
6% 100,000 (a) 100,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $1,800,000) 1,800,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $14,239,652) 98.1% 13,610,136
CASH AND RECEIVABLES (NET) 1.9% 261,706
NET ASSETS 100.0% 13,871,842
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
EDR Economic Development
Revenue
FGIC Financial Guaranty Insurance
Company
FSA Financial Security Assurance
GNMA Government National Mortgage
Association
LR Lease Revenue
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
SFMR Single Family Mortgage Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 38.8
AA Aa AA 3.7
A A A 12.5
BBB Baa BBB 13.9
BB Ba BB 9.0
B B B .5
F1 MIG1/P1 SP1/A1 13.2
Not Rated(b) Not Rated(b) Not Rated(b) 8.4
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(B) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 14,239,652 13,610,136
Cash 88,121
Interest receivable 179,762
Prepaid expenses 7,046
13,885,065
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 7,856
Accrued expenses 5,367
13,223
--------------------------------------------------------------------------------
NET ASSETS ($) 13,871,842
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 14,992,972
Accumulated net realized gain (loss) on investments (491,614)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (629,516)
--------------------------------------------------------------------------------
NET ASSETS ($) 13,871,842
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 4,945,887 8,488,204 437,751
Shares Outstanding 421,328 723,308 37,249
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.74 11.74 11.75
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 890,000
EXPENSES:
Management fee--Note 3(a) 85,582
Shareholder servicing costs--Note 3(c) 55,079
Distribution fees--Note 3(b) 53,568
Registration fees 18,813
Prospectus and shareholders' reports 14,958
Auditing fees 14,017
Custodian fees 3,165
Legal fees 485
Trustees' fees and expenses--Note 3(d) 285
Loan commitment fees--Note 2 156
Miscellaneous 12,433
TOTAL EXPENSES 258,541
Less--reduction in management fee due to
undertaking--Note 3(a) (65,782)
NET EXPENSES 192,759
INVESTMENT INCOME--NET 697,241
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (491,965)
Net unrealized appreciation (depreciation) on investments (1,130,979)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (1,622,944)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (925,703)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 697,241 642,885
Net realized gain (loss) on investments (491,965) 231,591
Net unrealized appreciation (depreciation)
on investments (1,130,979) (73,816)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (925,703) 800,660
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (242,137) (212,301)
Class B shares (443,125) (424,424)
Class C shares (11,979) (6,160)
Net realized gain on investments:
Class A shares (64,561) (32,649)
Class B shares (135,112) (72,679)
Class C shares (2,550) (1,052)
TOTAL DIVIDENDS (899,464) (749,265)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 1,037,158 1,206,947
Class B shares 975,090 2,694,789
Class C shares 422,771 254,987
Dividends reinvested:
Class A shares 191,033 155,326
Class B shares 369,450 318,957
Class C shares 8,141 5,677
Cost of shares redeemed:
Class A shares (893,433) (648,145)
Class B shares (3,261,000) (1,962,099)
Class C shares (307,408) (28,097)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (1,458,198) 1,998,342
TOTAL INCREASE (DECREASE) IN NET ASSETS (3,283,365) 2,049,737
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 17,155,207 15,105,470
END OF PERIOD 13,871,842 17,155,207
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended April 30,
-------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 85,133 90,729
Shares issued for dividends reinvested 15,905 11,685
Shares redeemed (73,722) (49,056)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 27,316 53,358
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 80,244 203,083
Shares issued for dividends reinvested 30,723 24,002
Shares redeemed (272,697) (147,804)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (161,730) 79,281
--------------------------------------------------------------------------------
CLASS C
Shares sold 36,111 19,197
Shares issued for dividends reinvested 663 428
Shares redeemed (26,027) (2,111)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 10,747 17,514
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 11,326 CLASS B SHARES REPRESENTING
$134,440 WERE AUTOMATICALLY CONVERTED TO 11,330 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Nine
Months
Ended
Year Ended April 30, April 30, Year Ended July 31,
___________________________ _________________
CLASS A SHARES 2000 1999 1998 1997(a) 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 13.14 13.08 12.63 12.79 12.71 12.58
Investment Operations:
Investment income-net .59 .57 .61 .42 .59 .71
Net realized and unrealized gain (loss)
on investments (1.24) .15 .56 (.02) .08 .13
Total from Investment Operations (.65) .72 1.17 .40 .67 .84
Distributions:
Dividends from investment income-net (.59) (.57) (.61) (.42) (.59) (.71)
Dividends from net realized gain
on investments (.16) (.09) (.11) (.14) -- --
Total Distributions (.75) (.66) (.72) (.56) (.59) (.71)
Net asset value, end of period 11.74 13.14 13.08 12.63 12.79 12.71
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (4.96) 5.52 9.48 4.25(c) 5.31 7.01
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .88 1.08 1.02 1.20(c) 1.14 .10
Ratio of net investment income
to average net assets 4.84 4.28 4.73 4.39(c) 4.55 5.60
Decrease reflected in above expense
ratios due to undertakings by The
Dreyfus Corporation .44 -- .03 .10(c) .08 1.35
Portfolio Turnover Rate 120.61 64.40 50.78 110.12(d) 28.14 43.48
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 4,946 5,179 4,454 4,837 5,212 4,981
(A) THE FUND CHANGED ITS FISCAL YEAR END FROM JULY 31 TO APRIL 30.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Nine
Months
Ended
Year Ended April 30, April 30, Year Ended July 31,
___________________________ _________________
CLASS B SHARES 2000 1999 1998 1997(a) 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 13.14 13.07 12.63 12.79 12.71 12.58
Investment Operations:
Investment income-net .53 .50 .55 .37 .52 .65
Net realized and unrealized gain (loss)
on investments (1.24) .16 .55 (.02) .08 .13
Total from Investment Operations (.71) .66 1.10 .35 .60 .78
Distributions:
Dividends from investment income-net (.53) (.50) (.55) (.37) (.52) (.65)
Dividends from net realized gain
on investments (.16) (.09) (.11) (.14) -- --
Total Distributions (.69) (.59) (.66) (.51) (.52) (.65)
Net asset value, end of period 11.74 13.14 13.07 12.63 12.79 12.71
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (5.45) 5.08 8.85 3.74(c) 4.79 6.48
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.40 1.58 1.53 1.69(c) 1.63 .61
Ratio of net investment income
to average net assets 4.32 3.78 4.20 3.88(c) 4.04 5.00
Decrease reflected in above expense
ratios due to undertakings by The
Dreyfus Corporation .42 -- .03 .09(c) .08 1.29
Portfolio Turnover Rate 120.61 64.40 50.78 110.12(d) 28.14 43.48
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 8,488 11,628 10,533 8,680 8,910 6,852
(A) THE FUND CHANGED ITS FISCAL YEAR END FROM JULY 31 TO APRIL 30.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Nine Months Year
Ended Ended
Year Ended April 30, April 30, July 31,
---------------------------------------
CLASS C SHARES 2000 1999 1998 1997(a) 1996(b)
-----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 13.15 13.09 12.64 12.78 13.21
Investment Operations:
Investment income--net .50 .46 .50 .35 .32
Net realized and unrealized gain (loss)
on investments (1.24) .15 .56 -- (.43)
Total from Investment Operations (.74) .61 1.06 .35 (.11)
Distributions:
Dividends from investment income--net (.50) (.46) (.50) (.35) (.32)
Dividends from net realized gain
on investments (.16) (.09) (.11) (.14) --
Total Distributions (.66) (.55) (.61) (.49) (.32)
Net asset value, end of period 11.75 13.15 13.09 12.64 12.78
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) (5.66) 4.67 8.55 3.72(d) (1.21)(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA ($):
Ratio of expenses to average net assets 1.63 1.88 1.91 1.97(d) 1.95(d)
Ratio of net investment income
to average net assets 4.05 3.42 3.65 3.62(d) 3.68(d)
Decrease reflected in above expense
ratios due to undertakings by The
Dreyfus Corporation .41 -- .06 .76(d) .02(d)
Portfolio Turnover Rate 120.61 64.40 50.78 110.12(e) 28.14
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 438 349 118 1 6
(A) THE FUND CHANGED ITS FISCAL YEAR END FROM JULY 31 TO APRIL 30.
(B) FROM DECEMBER 4, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO JULY 31, 1996.
(C) EXCLUSIVE OF SALES CHARGE.
(D) ANNUALIZED.
(E) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified,
open-end management investment company, and operates as a series company
currently offering thirteen series, including the New Jersey Series (the "fund")
. The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. 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. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
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 ("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 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 $654 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.
The fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 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 $367,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 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 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 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 had undertaken from July
29, 1999 to April 30, 2000, to reduce the management fee paid by the fund, to
the extent that the fund' s aggregate expenses, excluding 12b-1 distribution
fees, taxes, brokerage fees, commitment fees, interest on borrowings and
extraordinary expenses, exceeded an annual rate of .77 of 1% of the value of the
fund' s average daily net assets. The reduction in management fee, pursuant to
the undertaking, amounted to $65,782 during the period ended April 30, 2000.
(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 April 30, 2000, Class B and
Class C shares were charged $51,350 and $2,218, respectively, pursuant to the
Plan, of which $4,781 and $258 for Class B and Class C shares, respectively,
were paid to DSC.
(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 April 30, 2000, Class A, Class B and Class C
shares were charged $12,487, $25,675 and $739, respectively, pursuant to the
Shareholder
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Services Plan, of which $1,351, $2,391 and $86 for Class A, Class B and Class C
shares, respectively, were 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 $7,336 pursuant to the transfer
agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 13, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
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
$17,840,324 and $21,139,986, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$629,516, consisting of $95,462 gross unrealized appreciation and $724,978 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 Trustees Dreyfus Premier State Municipal Bond Fund,
New Jersey Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund, New
Jersey Series (one of the Funds constituting the Dreyfus Premier State Municipal
Bond Fund) 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 periods
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 Premier State Municipal Bond Fund, New Jersey Series 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 periods, in conformity with accounting
principles generally accepted in the United States.
New York, New York
June 9, 2000
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
--all the dividends paid from investment income--net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are New
Jersey residents, New Jersey personal income taxes), and
--the fund hereby designates $.1329 per share as a long-term capital gain
distribution of the $.1568 per share paid on December 8, 1999.
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.
For More Information
Dreyfus Premier State Municipal Bond Fund, New Jersey
Series
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 380AR004
================================================================================
Dreyfus Premier State
Municipal Bond Fund,
North Carolina Series
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
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
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
North Carolina Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, North Carolina Series, 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, W. Michael Petty.
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 Premier State Municipal Bond Fund, North
Carolina Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, North Carolina Series,
perform during the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -3.38% total return, its Class B shares provided a -3.88% total return and its
Class C shares provided a -4.10% total return.(1) In comparison, the Lipper
North Carolina Municipal Debt Funds category average provided a -3.05% total
return for the same period.(2) We attribute the fund's negative absolute returns
to a rising interest-rate environment during the period, which caused most
municipal bond prices to decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and North Carolina tax-exempt
income as is practical without undue risk from a diversified portfolio of longer
term municipal bonds. To achieve this objective, we employ two primary
strategies. First, we evaluate supply-and-demand factors in the bond market that
are affected by the relatively few municipal bonds issued by North Carolina.
Based on that assessment, we select the individual North Carolina 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,
creditworthiness of its issuer, insurance, and any provisions for early
redemption. Under most circumstances, we look for high yielding bonds that have
10-year call protection and that are selling at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' s average duration -- a measure of sensitivity to
changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued bonds to increase, we may
reduce the fund' s average duration to make cash available for the purchase of
higher yielding securities. Conversely, if we expect demand for municipal bonds
to surge at a
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
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 consistent with other North
Carolina municipal bond funds.
What other factors influenced the fund's performance?
Although the fund's performance was hurt by a difficult investment environment
during the final two months of 1999, the first four months of 2000 generally
provided better market conditions and a market rally. This rally helped offset
most -- but not all -- of the decline in the first eight months of the reporting
period.
When the reporting period began on May 1, 1999, investors had become concerned
that strong economic growth might rekindle long-dormant inflationary pressures,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, causing
most bond prices to fall, for a total increase of 1.25 percentage points since
mid-1999.
Municipal bond prices also fell during November and December, because of adverse
supply-and-demand influences. For a variety of reasons, institutional investors
such as insurance companies and mutual funds 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% compared to the same period in 1999.
This supply reduction, combined with robust demand from individual investors,
helped support a rebound of municipal bond prices.
What is the fund's current strategy?
Our current strategy is to maintain as high a level of income as practical,
while reducing volatility and protecting assets in a rising interest-rate
environment. Accordingly, we have modestly reduced the portfolio' s average
duration to the short end of the neutral range in an attempt to protect our
holdings from the brunt of potential price depreciation and capture higher
yields as they become available.
From a security selection perspective, we have focused primarily on insured
bonds with competitive yields. However, our ability to find such opportunities
has been constrained by the reduced supply of newly issued bonds in the North
Carolina marketplace. Consequently, as of April 30, 2000, the fund contained a
higher level of cash -- primarily invested in tax-exempt money market
instruments -- than is usual. Cash and cash equivalents comprised about 10% of
the portfolio and have helped us reduce the fund's average duration. We hope to
put our cash reserves back to work in longer term bonds when we believe that
interest rates may have peaked and the Federal Reserve Board is finished
tightening monetary policy.
May 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-NORTH
CAROLINA 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 State
Municipal Bond Fund, North Carolina Series 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 STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES (THE "FUND") ON 8/1/91
(INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE LEHMAN BROTHERS MUNICIPAL
BOND INDEX (THE "INDEX") ON THAT DATE. FOR COMPARATIVE PURPOSES, THE VALUE OF
THE INDEX ON 7/31/91 IS USED AS THE BEGINNING VALUE ON 8/1/91. 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 NORTH CAROLINA 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 INDEX
IS NOT LIMITED TO INVESTMENTS PRINCIPALLY IN NORTH CAROLINA MUNICIPAL
OBLIGATIONS AND DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE
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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 8/1/91 (7.74)% 4.37% 5.80%
WITHOUT SALES CHARGE 8/1/91 (3.38)% 5.34% 6.36%
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (7.55)% 4.48% 4.77%
WITHOUT REDEMPTION 1/15/93 (3.88)% 4.81% 4.77%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (5.01)% -- 4.51%
WITHOUT REDEMPTION 8/15/95 (4.10)% -- 4.51%
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
<TABLE>
STATEMENT OF INVESTMENTS
April 30, 2000
Principal
LONG-TERM MUNICIPAL INVESTMENTS--90.2% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NORTH CAROLINA--68.1%
Appalachian State University, Utility System Revenue
5%, 5/15/2024 (Insured; MBIA) 1,160,000 1,017,958
Buncombe County Metropolitan Sewage District,
Sewage System Revenue
6.75%, 7/1/2022 (Prerefunded 7/1/2002) 500,000 (a) 529,045
Charlotte, Special Facilities Revenue (Charlotte-Douglas
International Airport) 5.60%, 7/1/2027 3,450,000 2,753,859
Dare County, Utility System Revenue
4.75%, 6/1/2024 (Insured; MBIA) 750,000 628,387
Monroe, Combined Enterprise System Revenue
4.50%, 3/1/2023 2,630,000 2,099,713
New Hanover County Industrial Facilities and Pollution Control
Financing Authority (Occidental Petroleum)
6.50%, 8/1/2014 1,000,000 996,650
North Carolina Eastern Municipal Power Agency, Power
System Revenue:
6%, 1/1/2013 2,500,000 2,449,850
6%, 1/1/2022 1,000,000 931,230
6.75%, 1/1/2026 3,000,000 3,024,570
North Carolina Educational Assistance Authority, Guaranteed
Student Loan Revenue 6.35%, 7/1/2016 4,375,000 4,456,244
North Carolina Housing Finance Agency
Single Family Revenue 6.50%, 9/1/2026 4,125,000 4,183,534
North Carolina Medical Care Commission,
Health, Hospital and Nursing Home Revenue:
(Annie Penn Memorial Hospital Project)
7.50%, 8/15/2021 3,750,000 3,981,150
(Deerfield Episcopal Hospital):
6%, 11/1/2019 1,670,000 1,413,154
6%, 11/1/2027 500,000 412,445
(Depaul Community Facilities Project)
7.625%, 11/1/2029 2,115,000 2,029,998
(Firsthealth of the Carolinas) 4.75%, 10/1/2026 400,000 319,160
(Halifax Regional Medical Center) 5%, 8/15/2024 800,000 595,272
(North Carolina Housing Foundation Inc.)
6.625%, 8/15/2030 (Insured; ACA) 3,000,000 3,024,720
(Pitt County Memorial Hospital)
4.75%, 12/1/2028 (Insured; MBIA) 2,740,000 2,203,124
(Southeast Regional Medical Center)
6.25%, 6/1/2029 2,000,000 1,933,620
(Wilson Memorial Hospital Project)
Zero Coupon, 11/1/2016 (Insured; AMBAC) 3,055,000 1,173,609
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA (CONTINUED)
North Carolina Municipal Power Agency Number 1,
Catawba Electric Revenue
5.50%, 1/1/2015 (Insured; MBIA) 4,000,000 3,969,840
Sampson Area Development Corp., Installment Payment
Revenue 4.75%, 6/1/2024 (Insured; MBIA) 1,000,000 833,420
Shelby, Combined Enterprise System Revenue
5.625%, 5/1/2014 1,000,000 993,300
University of North Carolina, Multiple Utility Revenues:
Zero Coupon, 8/1/2018 2,500,000 863,175
4.50%, 10/1/2018 1,500,000 1,245,990
4.50%, 10/1/2023 1,580,000 1,257,775
University of North Carolina Hospitals at Chapel Hill, Revenue
5%, 2/15/2024 (Insured; AMBAC) 1,000,000 873,490
Winston-Salem, Water and Sewer System Revenue
5%, 6/1/2016 2,000,000 1,846,760
U.S. RELATED--22.1%
Guam Airport Authority, Airport and Marina Revenue
6.70%, 10/1/2023 2,000,000 2,024,900
Guam Power Authority, Electric Power and Light Revenues
6.30%, 10/1/2022 2,000,000 2,115,900
Commonwealth of Puerto Rico
6.80%, 7/1/2021 (Prerefunded 7/1/2002) 600,000 (a) 635,832
Commonwealth of Puerto Rico Infrastructure Financing
Authority 5%, 7/1/2015 (Insured; AMBAC) 3,880,000 3,668,424
Puerto Rico Ports Authority, Special Facilities Revenue
(American Airlines):
6.30%, 6/1/2023 (Guaranteed; AMR Corp.) 1,000,000 989,140
6.25%, 6/1/2026 (Guaranteed; AMR Corp.) 160,000 157,362
Virgin Islands Territory, Hugo Insurance Claims Fund Program
7.75%, 7/1/2011 1,160,000 1,211,318
Virgin Islands Public Finance Authority, Revenues,
Matching Fund Loan Notes 7.25%, 10/1/2018 4,000,000 4,317,360
Virgin Islands Water and Power Authority, Electric System
Revenue 7.40%, 7/1/2011 1,690,000 1,761,183
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $70,804,600) 68,922,461
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--7.3% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Person County Industrial Facilities and Pollution Control
Financing Authority, SWDR, VRDN
(Carolina Power and Light Co. Project)
6.15% (LOC; Suntrust Bank) 1,100,000 (b) 1,100,000
Wake County Industrial Facilities and Pollution Control
Financing Authority, Revenue, VRDN
(Carolina Power and Light Co. Project)
6.10% (LOC; Bank of New York) 4,500,000 (b) 4,500,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $5,600,000) 5,600,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $76,404,600) 97.5% 74,522,461
CASH AND RECEIVABLES (NET) 2.5% 1,886,504
NET ASSETS 100.0% 76,408,965
Summary of Abbreviations
ACA American Capital Access
AMBAC American Municipal Bond
Assurance Corporation
LOC Letter of Credit
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 35.7
AA Aa AA 9.7
A A A 14.8
BBB Baa BBB 21.9
F1 MIG1 SP1 6.0
F2 MIG2 SP2 1.4
Not Rated(c) Not Rated(c) Not Rated(c) 10.5
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST--SUBJECT TO PERIODIC
CHANGE.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 76,404,600 74,522,461
Cash 512,971
Interest receivable 1,241,859
Receivable for investment securities sold 223,533
Receivable for shares of Beneficial Interest subscribed 14,499
Prepaid expenses 7,961
76,523,284
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 59,043
Payable for shares of Beneficial Interest redeemed 40,836
Accrued expenses 14,440
114,319
--------------------------------------------------------------------------------
NET ASSETS ($) 76,408,965
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 79,284,752
Accumulated net realized gain (loss) on investments (993,648)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (1,882,139)
--------------------------------------------------------------------------------
NET ASSETS ($) 76,408,965
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 55,883,278 19,854,450 671,237
Shares Outstanding 4,367,993 1,553,150 52,444
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 12.79 12.78 12.80
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 4,822,272
EXPENSES:
Management fee--Note 3(a) 447,702
Shareholder servicing costs--Note 3(c) 265,320
Distribution fees--Note 3(b) 135,403
Registration fees 27,995
Professional fees 17,497
Prospectus and shareholders' reports 11,591
Custodian fees 8,539
Trustees' fees and expenses--Note 3(d) 1,187
Loan commitment fees--Note 2 720
Miscellaneous 8,909
TOTAL EXPENSES 924,863
INVESTMENT INCOME--NET 3,897,409
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (944,064)
Net unrealized appreciation (depreciation) on investments (6,184,731)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (7,128,795)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (3,231,386)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 3,897,409 3,869,834
Net realized gain (loss) on investments (944,064) 908,096
Net unrealized appreciation (depreciation)
on investments (6,184,731) (152,616)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (3,231,386) 4,625,314
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (2,714,734) (1,969,580)
Class B shares (1,159,710) (1,894,185)
Class C shares (22,965) (6,069)
Net realized gain on investments:
Class A shares (154,335) (212,660)
Class B shares (65,459) (248,449)
Class C shares (1,171) (540)
TOTAL DIVIDENDS (4,118,374) (4,331,483)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 19,895,728 9,826,910
Class B shares 3,458,755 6,026,320
Class C shares 536,777 415,737
Dividends reinvested:
Class A shares 1,521,432 1,147,257
Class B shares 727,452 1,337,827
Class C shares 7,805 2,035
Cost of shares redeemed:
Class A shares (8,658,982) (4,905,844)
Class B shares (21,222,657) (13,287,728)
Class C shares (270,201) (25,569)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (4,003,891) 536,945
TOTAL INCREASE (DECREASE) IN NET ASSETS (11,353,651) 830,776
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 87,762,616 86,931,840
END OF PERIOD 76,408,965 87,762,616
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 1,491,337 701,323
Shares issued for dividends reinvested 117,049 81,450
Shares redeemed (665,463) (348,339)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 942,923 434,434
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 258,146 428,998
Shares issued for dividends reinvested 55,751 95,019
Shares redeemed (1,596,342) (947,962)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,282,445) (423,945)
--------------------------------------------------------------------------------
CLASS C
Shares sold 41,378 29,569
Shares issued for dividends reinvested 599 145
Shares redeemed (20,613) (1,805)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 21,364 27,909
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 1,104,632 CLASS B SHARES
REPRESENTING $14,624,314 WERE AUTOMATICALLY CONVERTED TO 1,104,109 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
-------------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 13.95 13.91 13.23 12.91 12.72
Investment Operations:
Investment income--net .65 .66 .67 .67 .67
Net realized and unrealized
gain (loss) on investments (1.12) .11 .68 .32 .19
Total from Investment Operations (.47) .77 1.35 .99 .86
Distributions:
Dividends from investment income--net (.65) (.66) (.67) (.67) (.67)
Dividends from net realized gain
on investments (.04) (.07) -- -- --
Total Distributions (.69) (.73) (.67) (.67) (.67)
Net asset value, end of period 12.79 13.95 13.91 13.23 12.91
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.38) 5.63 10.39 7.81 6.79
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .97 .94 .87 1.04 .98
Ratio of net investment income
to average net assets 4.97 4.68 4.89 5.10 5.11
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus
Corporation -- -- -- -- .02
Portfolio Turnover Rate 39.92 41.15 32.28 44.91 47.15
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 55,883 47,794 41,592 42,130 47,042
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
-------------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 13.94 13.90 13.22 12.90 12.71
Investment Operations:
Investment income--net .58 .59 .60 .60 .60
Net realized and unrealized
gain (loss) on investments (1.12) .11 .68 .32 .19
Total from Investment Operations (.54) .70 1.28 .92 .79
Distributions:
Dividends from investment income--net (.58) (.59) (.60) (.60) (.60)
Dividends from net realized gain
on investments (.04) (.07) -- -- --
Total Distributions (.62) (.66) (.60) (.60) (.60)
Net asset value, end of period 12.78 13.94 13.90 13.22 12.90
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.88) 5.10 9.84 7.27 6.25
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.48 1.44 1.38 1.54 1.49
Ratio of net investment income
to average net assets 4.42 4.16 4.39 4.59 4.59
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus
Corporation -- -- -- -- .02
Portfolio Turnover Rate 39.92 41.15 32.28 44.91 47.15
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 19,854 39,535 45,296 43,979 42,668
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
-------------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 13.96 13.90 13.22 12.90 12.76
Investment Operations:
Investment income--net .55 .56 .57 .57 .40
Net realized and unrealized
gain (loss) on investments (1.12) .13 .68 .32 .14
Total from Investment Operations (.57) .69 1.25 .89 .54
Distributions:
Dividends from investment income--net (.55) (.56) (.57) (.57) (.40)
Dividends from net realized gain
on investments (.04) (.07) -- -- --
Total Distributions (.59) (.63) (.57) (.57) (.40)
Net asset value, end of period 12.80 13.96 13.90 13.22 12.90
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (4.10) 5.02 9.58 7.00 5.92(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.72 1.63 1.62 1.77 1.73(c)
Ratio of net investment income
to average net assets 4.22 3.83 4.08 4.31 4.31(c)
Portfolio Turnover Rate 39.92 41.15 32.28 44.91 47.15
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 671 434 44 11 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 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 State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the North Carolina Series (the
" fund" ). The fund's investment objective is to maximize current income exempt
from Federal and, where applicable, from State income taxes, without undue risk.
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. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 ("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 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 $7,321 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.
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 $306,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 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
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 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.
DSC retained $39 during the period ended April 30, 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
the fund's Class B and Class C 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
April 30, 2000, Class B and Class C shares were charged $131,323 and $4,080,
respectively, pursuant to the Plan, of which $11,102 and $582 for Class B and
Class C shares, respectively, were paid to DSC.
(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 April 30, 2000, Class A, Class B and Class C
shares were charged $136,480, $65,661 and $1,360 respectively, pursuant to the
Shareholder Services Plan, of which $15,314, $5,551 and $194 for Class A, Class
B and Class C shares, respectively, were 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 $42,952 pursuant to the transfer
agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 13, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
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
$30,630,505 and $40,504,280, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$1,882,139, consisting of $1,194,643 gross unrealized appreciation and
$3,076,782 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).
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees Dreyfus Premier State Municipal Bond Fund,
North Carolina Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
North Carolina Series (one of the Funds constituting the Dreyfus Premier State
Municipal Bond Fund) 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 Premier State Municipal Bond Fund, North Carolina Series 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 9, 2000
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
-- all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal income tax, and for individuals
who are North Carolina residents, not subject to taxation by North Carolina),
and
-- the fund hereby designates $.0282 per share as a long-term capital gain
distribution of the $.0354 per share paid on December 9, 1999.
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.
The Fund
For More Information
Dreyfus Premier State Municipal Bond Fund, North
Carolina Series
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 065AR004
================================================================================
Dreyfus Premier State
Municipal Bond Fund,
Ohio Series
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
8 Statement of Investments
14 Statement of Assets and Liabilities
15 Statement of Operations
16 Statement of Changes in Net Assets
18 Financial Highlights
21 Notes to Financial Statements
26 Report of Independent Auditors
27 Important Tax Information
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Ohio Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Ohio Series, 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, W. Michael Petty.
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 Premier State Municipal Bond Fund, Ohio
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Ohio Series, perform during
the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -2.08% total return, its Class B shares provided a -2.66% total return and its
Class C shares provided a -2.90% total return.(1) In comparison, the Lipper Ohio
Municipal Debt Funds category average provided a -2.84% total return for the
same period.(2) We attribute the fund's negative absolute returns to a rising
interest-rate environment during the period, which caused most municipal bond
prices to decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Ohio tax-exempt income as is
practical without undue risk from a diversified portfolio of longer term
municipal bonds. To achieve this objective, we employ two primary strategies.
First, we evaluate supply-and-demand factors in the bond market that are
affected by the relatively few municipal bonds issued by Ohio. Based on that
assessment, we select the individual Ohio 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, creditworthiness of its issuer,
insurance, and any provisions for early redemption. Under most circumstances, we
look for high yielding bonds that have 10-year call protection and that are
selling at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' s average duration -- a measure of sensitivity to
changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued bonds to increase, we may
reduce the fund' s average duration to make cash available for the purchase of
higher yielding securities. Conversely, if we expect demand for municipal bonds
to surge at a
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
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 consistent with other Ohio
municipal bond funds.
What other factors influenced the fund's performance?
Although the portfolio' s performance was hurt by a difficult investment
environment during the final two months of 1999, the first four months of 2000
generally provided better market conditions and a market rally. This rally
helped offset most -- but not all -- of the decline in the first eight months of
the reporting period.
When the reporting period began on May 1, 1999, investors had become concerned
that strong economic growth might rekindle long-dormant inflationary pressures,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, causing
most bond prices to fall, for a total increase of 1.25 percentage points since
mid-1999.
Municipal bond prices also fell during November and December, because of adverse
supply-and-demand influences. For a variety of reasons, institutional investors
such as insurance companies and mutual funds 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% compared to the same period in 1999.
This supply reduction, combined with robust demand from individual investors,
helped support a rebound of municipal bond prices.
What is the fund's current strategy?
Our current strategy is to maintain as high a level of income as practical,
while reducing volatility and protecting assets in a rising interest-rate
environment. Accordingly, we have modestly reduced the portfolio' s average
duration to the short end of the neutral range in an attempt to protect our
holdings from the brunt of potential price depreciation and capture higher
yields as they become available.
From a security selection perspective, we have focused primarily on insured
bonds with competitive yields. However, our ability to find such opportunities
has been constrained by the reduced supply of newly issued bonds in the Ohio
marketplace. Consequently, as of April 30, 2000, the fund contained a higher
level of cash -- primarily invested in tax-exempt money market instruments --
than is usual. Cash and cash equivalents comprised about 7% of the portfolio and
have helped us reduce the fund' s average duration. We hope to put our cash
reserves back to work in longer term bonds when we believe that interest rates
may have peaked and the Federal Reserve Board is finished tightening monetary
policy.
May 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-OHIO
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 State
Municipal Bond Fund, Ohio Series 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 STATE MUNICIPAL BOND FUND, OHIO SERIES (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. 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 OHIO 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 INDEX IS NOT
LIMITED TO INVESTMENTS PRINCIPALLY IN OHIO MUNICIPAL OBLIGATIONS AND DOES NOT
TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years 10 Years Inception
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 5/28/87 (6.46)% 4.06% 6.32% --
WITHOUT SALES CHARGE 5/28/87 (2.08)% 5.02% 6.80% --
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (6.37)% 4.14% -- 4.81%
WITHOUT REDEMPTION 1/15/93 (2.66)% 4.45% -- 4.81%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (3.83)% -- -- 4.07%
WITHOUT REDEMPTION 8/15/95 (2.90)% -- -- 4.07%
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
April 30, 2000
<TABLE>
STATEMENT OF INVESTMENTS
Principal
LONG-TERM MUNICIPAL INVESTMENTS--92.8% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OHIO--91.6%
Akron:
6%, 12/1/2012 1,380,000 1,467,202
Pension Revenue 4.75%, 12/1/2023 (Insured; AMBAC) 1,330,000 1,113,449
Sewer Systems Revenue
5.875%, 12/1/2016 (Insured; MBIA) 1,200,000 1,220,484
Akron-Wilbeth Housing Development Corp., First Mortgage
Revenue 7.90%, 8/1/2003 (Insured; FHA) 1,295,000 1,381,920
Allen County, Industrial First Mortgage Revenue
6.75%, 11/15/2008 (Guaranteed; K-Mart Corp.) 1,280,000 1,288,448
City of Barberton, Hospital Facilities Revenue
(The Barberton Citizens Hospital Co. Project)
7.25%, 1/1/2012 (Prerefunded 1/1/2002) 2,400,000 (a) 2,531,880
Board of Education of the Cleveland City School District
8%, 12/1/2001 750,000 775,927
Butler County, Hospital Facilities Improvement Revenue
(Fort Hamilton Hughes Group) 7.25%, 1/1/2001 910,000 909,791
City of Cambridge, HR (Guernsey Memorial Hospital Project)
8%, 12/1/2006 2,000,000 2,086,180
Clermont County, Hospital Facilities Revenue
(Mercy Health Systems):
5.625%, 9/1/2016 (Insured; AMBAC) 4,250,000 4,231,682
7.50%, 9/1/2019
(Prerefunded 9/1/2001) (Insured; AMBAC) 180,000 (a) 186,593
City of Cleveland:
Airport Special Revenue (Continental Airlines Inc. Project)
5.375%, 9/15/2027 5,000,000 3,939,650
COP:
(Motor Vehicle, Motorized and Communication
Equipment) 7.10%, 7/1/2002 890,000 901,276
(Stadium Project)
5.25%, 11/15/2022 (Insured; AMBAC) 5,000,000 4,600,400
Parking Facility Improvement Revenue
8%, 9/15/2012 (Prerefunded 9/15/2002) 5,000,000 (a) 5,430,050
Waterworks Revenue 5.50%, 1/1/2021 (Insured; MBIA) 8,000,000 7,801,680
Cleveland-Cuyahoga County Port Authority, Revenue:
(Capital Improvements Project) 5.375%, 5/15/2019 1,000,000 848,560
(Port of Cleveland) 5.375%, 5/15/2018 2,775,000 2,410,171
Cleveland Public Power System, Revenue 4.807%, 11/15/2018 5,000,000 (b,c) 4,225,100
Cuyahoga County:
HR:
Improvement:
(MetroHealth Systems Project) 6.125%, 2/15/2024 4,845,000 4,528,864
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
OHIO (CONTINUED)
Cuyahoga County (continued):
HR (continued):
Improvement (continued):
(University Hospitals Health)
5.625%, 1/15/2015 (Insured; MBIA) 1,505,000 1,492,975
(Meridia Health Systems)
7%, 8/15/2023 (Prerefunded 8/15/2001) 1,750,000 (a) 1,835,277
Jail Facilities 7%, 10/1/2013 (Prerefunded 10/1/2001) 6,125,000 (a) 6,435,231
Delaware County, Sewer Disposal Improvement
4.75%, 12/1/2024 (Insured; MBIA) 1,000,000 831,900
Eaton, IDR (Baxter International Inc. Project)
6.50%, 12/1/2012 1,500,000 1,569,720
Euclid City School District, Improvement
7.10%, 12/1/2011 (Prerefunded 12/1/2001) 1,000,000 (a) 1,054,990
Village of Evendale, IDR (Ashland Oil Inc. Project)
6.90%, 11/1/2010 2,000,000 2,051,500
Fairfield City School District,
School Improvement Unlimited Tax:
7.20%, 12/1/2011 (Insured; FGIC) 1,000,000 1,113,750
7.20%, 12/1/2012 (Insured; FGIC) 1,250,000 1,390,575
6.10%, 12/1/2015 (Insured; FGIC) 2,000,000 2,056,680
6%, 12/1/2020 (Insured; FGIC) 2,000,000 2,024,920
Findlay 5.875%, 7/1/2017 2,000,000 2,032,220
Franklin County:
Health Care Facilities Revenue, Improvement
(Friendship Village of Columbus)
5.375%, 8/15/2028 (Insured; ACA) 5,000,000 4,282,550
HR:
(Children's Hospital Project):
6.60%, 5/1/2013 4,000,000 4,204,760
5%, 5/1/2018 2,610,000 2,246,401
Holy Cross Health Systems Corp.:
Improvement 5.80%, 6/1/2016 2,000,000 2,005,640
(Mount Carmel Health) 6.75%, 6/1/2019
(Insured; MBIA) (Prerefunded 6/1/2002) 2,500,000 (a) 2,640,125
Improvement (Worthington Christian Village Congregate
Care Project):
10.25%, 8/1/2015 635,000 656,412
7.80%, 2/1/2017 (Insured; FHA) 5,690,000 5,852,165
Gahanna-Jefferson Public Schools 4.75%, 12/1/2021 1,325,000 1,120,950
Gallia County Local School District 7.375%, 12/1/2004 570,000 620,194
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
OHIO (CONTINUED)
Greater Cleveland Gateway Economic Development Corp.:
Senior Lien Excise Tax Revenue
6.875%, 9/1/2005 (Insured; FSA) 1,500,000 1,559,625
Stadium Revenue 7.50%, 9/1/2005 5,675,000 5,941,271
Greater Cleveland Regional Transit Authority
5.65%, 12/1/2016 (Insured; FGIC) 5,445,000 5,666,720
Hamilton County:
Hospital Facilities Improvement Revenue
(Deaconess Hospital) 7%, 1/1/2012 2,570,000 2,681,846
Mortgage Revenue (Judson Care Center) 7.80%, 8/1/2019
(Prerefunded 8/1/2000) (Insured; FHA, LOC; Citibank) 3,970,000 (a) 4,053,052
Hilliard School District, School Improvement:
Zero Coupon, 12/1/2013 (Insured; FGIC) 1,655,000 774,044
Zero Coupon, 12/1/2014 (Insured; FGIC) 1,655,000 726,777
Kirtland Local School District 7.50%, 12/1/2009 760,000 776,743
Knox County, IDR (Weyerhaeuser Co. Project) 9%, 10/1/2007 1,000,000 1,190,110
Lakota Local School District 6.125%, 12/1/2017
(Insured; AMBAC) (Prerefunded 12/1/2005) 1,075,000 (a) 1,133,566
Lorain County, HR (Catholic Healthcare Partners)
5.50%, 9/1/2027 (Insured; MBIA) 6,685,000 6,282,296
Lowellville, Sanitary Sewer Systems Revenue (Browning-Ferris
Industries Inc.) 7.25%, 6/1/2006 1,000,000 992,410
Lucas County, HR (Promedia Healthcare Obligation Group)
5.375%, 11/15/2023 (Insured; AMBAC) 630,000 581,786
Mahoning County, Health Care Facilities Revenue
(Youngstown Osteopathic Hospital Project)
7.60%, 8/1/2010 (LOC; Marine Midland Bank) 3,775,000 3,895,725
Marion County, Health Care Facilities Revenue, Improvement
(United Church Homes Inc.) 6.375%, 11/15/2010 2,825,000 2,665,614
Middleburg Heights 4.375%, 12/1/2018 5,725,000 4,704,748
Moraine, SWDR (General Motors Corp. Project):
6.75%, 7/1/2014 5,000,000 5,507,850
5.65%, 7/1/2024 3,800,000 3,620,374
North Royalton City School District
6.10%, 12/1/2019 (Insured; MBIA) 2,500,000 2,589,625
State of Ohio:
Economic Development Revenue:
Ohio Enterprise Bond Fund (VSM Corp. Project)
7.375%, 12/1/2011 885,000 919,320
(Sponge Inc. Project) 8.375%, 6/1/2014 1,465,000 1,497,787
Environmental Improvement Revenue
(USX Corp. Project) 5.625%, 5/1/2029 1,000,000 873,340
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
OHIO (CONTINUED)
State of Ohio (continued):
PCR (Standard Oil Co. Project) 6.75%, 12/1/2015
(Guaranteed; British Petroleum Co. p.l.c.) 2,700,000 3,030,426
Ohio Air Quality Development Authority, PCR
(Cleveland Electric Illuminating Co. Project)
6.85%, 7/1/2023 5,250,000 5,192,250
Ohio Building Authority, State Facilities (Juvenile Correctional
Projects) 6.60%, 10/1/2014 (Insured; AMBAC) 1,660,000 1,793,281
Ohio Housing Finance Agency:
Residential Mortgage Revenue:
6.35%, 9/1/2031 (Guaranteed; GNMA) 5,000,000 5,070,450
6.05%, 9/1/2017 (Guaranteed; GNMA) 2,955,000 2,958,901
SFMR (GNMA Mortgage Backed Securities Program)
Zero Coupon, 9/1/2021 7,130,000 1,356,197
Ohio Turnpike Commission, Turnpike Revenue,
Highway Improvements:
4.50%, 2/15/2024 (Insured; FGIC) 4,650,000 3,719,396
5.75%, 2/15/2024 (Prerefunded 2/15/2004) 6,100,000 (a) 6,366,814
4.75%, 2/15/2028 (Insured; FGIC) 2,600,000 2,145,858
Ohio Water Development Authority, Revenue
(Fresh Water) 5.90%, 12/1/2015 (Insured; AMBAC) 4,650,000 4,751,463
Ottawa County, Sanitary Sewer Systems Special Assessment
(Portage-Catawba Island Sewer Project)
7%, 9/1/2011 (Insured; AMBAC) (Prerefunded 9/1/2001) 1,000,000 (a) 1,050,430
Parma, Hospital Improvement Revenue (Parma Community
General Hospital Association) 5.375%, 11/1/2029 4,000,000 3,269,600
Shelby County, Hospital Facilities Revenue, Improvement
(The Shelby County Memorial Hospital Association)
7.70%, 9/1/2018 2,500,000 2,690,375
South Euclid, Recreation Facilities
7%, 12/1/2011 (Prerefunded 12/1/2001) 2,285,000 (a) 2,409,830
South-Western City School District (Franklin and
Pickway Counties) School Building Construction
4.75%, 12/1/2026 (Insured; AMBAC) 2,500,000 2,074,200
Southwest Regional Water District, Water Revenue:
6%, 12/1/2015 (Insured; MBIA) 1,600,000 1,639,648
6%, 12/1/2020 (Insured; MBIA) 1,250,000 1,265,163
Springboro, Water System Revenue
4.75%, 12/1/2023 (Insured; AMBAC) 2,600,000 2,170,974
Student Loan Funding Corp.,
Student Loan Revenue 7.20%, 8/1/2003 235,000 236,318
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
OHIO (CONTINUED)
Toledo 5.625%, 12/1/2011 (Insured; AMBAC) 1,000,000 1,024,570
University of Cincinnati, University and College Revenue, COP
6.75%, 12/1/2009 (Prerefunded 12/1/2001) (Insured; MBIA) 750,000 (a) 787,770
Warren:
7.75%, 11/1/2010 (Prerefunded 11/1/2000) 2,785,000 (a) 2,887,210
Waterworks Revenue 5.50%, 11/1/2015 (Insured; FGIC) 1,450,000 1,452,248
Wauseon Exempted Village School District, School Improvement
5.50%, 12/1/2022 (Insured; MBIA) 950,000 917,206
Westerville, Improvement 4.50%, 12/1/2018 4,650,000 3,909,116
West Holmes Local School District
5.375%, 12/1/2023 (Insured; MBIA) 1,860,000 1,748,753
U.S. RELATED--1.2%
Virgin Islands Public Finance Authority, Revenue
6.375%, 10/1/2019 3,000,000 3,007,050
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $229,485,488) 226,958,368
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--4.8%
------------------------------------------------------------------------------------------------------------------------------------
OHIO--3.5%
Cayuhoga County, HR, VRDN (University Hospital of Cleveland)
5.95% (LOC; Chase Manhattan Bank) 1,995,000 (d) 1,995,000
Ohio Air Quality Development Authority, Revenue, VRDN
(Cincinnati Gas and Electric):
5.85% 1,400,000 (d) 1,400,000
6.10% (LOC; Union Bank of Switzerland) 2,950,000 (d) 2,950,000
State of Ohio, Solid Waste Revenue, VRDN
(BP Exploration and Oil Project) 6.20% 2,300,000 (d) 2,300,000
U.S. RELATED--1.3%
Puerto Rico Highway and Transportation Authority,
Transportation Revenue, VRDN 4.90% 3,100,000 (d) 3,100,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $11,745,000) 11,745,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $241,230,488) 97.6% 238,703,368
CASH AND RECEIVABLES (NET) 2.4% 5,810,714
NET ASSETS 100.0% 244,514,082
Summary of Abbreviations
ACA American Capital Access
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
FGIC Financial Guaranty Insurance
Company
FHA Federal Housing Administration
FSA Financial Security Assurance
GNMA Government National Mortgage
Association
HR Hospital Revenue
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 44.0
AA Aa AA 13.1
A A A 17.8
BBB Baa BBB 9.9
BB Ba BB 4.8
F1 MIG1 SP1 4.9
Not Rated(e) Not Rated(e) Not Rated(e) 5.5
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) INVERSE FLOATER SECURITY-THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT APRIL 30, 2000, THIS
SECURITY AMOUNTED TO $4,225,100 OR 1.7% OF NET ASSETS.
(D) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST-SUBJECT TO PERIODIC
CHANGE.
(E) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 241,230,488 238,703,368
Cash 642,486
Interest receivable 4,551,272
Receivable for investment securities sold 933,955
Receivable for shares of Beneficial Interest subscribed 123,400
Prepaid expenses 6,176
244,960,657
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 179,195
Payable for shares of Beneficial Interest redeemed 217,391
Accrued expenses 49,989
446,575
--------------------------------------------------------------------------------
NET ASSETS ($) 244,514,082
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 249,627,596
Accumulated net realized gain (loss) on investments (2,586,394)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (2,527,120)
--------------------------------------------------------------------------------
NET ASSETS ($) 244,514,082
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> > <C>
Net Assets ($) 201,974,161 39,444,567 3,095,354
Shares Outstanding 17,002,459 3,319,596 260,252
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.88 11.88 11.89
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 16,459,968
EXPENSES:
Management fee--Note 3(a) 1,481,538
Shareholder servicing costs--Note 3(c) 846,752
Distribution fees--Note 3(b) 249,938
Professional fees 28,439
Custodian fees 27,663
Registration fees 26,395
Prospectus and shareholders' reports 21,775
Trustees' fees and expenses--Note 3(d) 3,616
Loan commitment fees--Note 2 2,431
Miscellaneous 15,546
TOTAL EXPENSES 2,704,093
INVESTMENT INCOME--NET 13,755,875
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (2,585,658)
Net unrealized appreciation (depreciation) on investments (18,256,668)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (20,842,326)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (7,086,451)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
-----------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 13,755,875 14,414,062
Net realized gain (loss) on investments (2,585,658) 2,281,303
Net unrealized appreciation (depreciation)
on investments (18,256,668) (767,158)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (7,086,451) 15,928,207
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (11,481,786) (11,917,210)
Class B shares (2,164,842) (2,449,931)
Class C shares (109,247) (46,921)
Net realized gain on investments:
Class A shares (331,315) (2,494,992)
Class B shares (66,227) (594,108)
Class C shares (3,915) (11,846)
TOTAL DIVIDENDS (14,157,332) (17,515,008)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 21,382,144 17,942,916
Class B shares 7,765,705 12,817,223
Class C shares 1,821,593 1,297,795
Dividends reinvested:
Class A shares 7,451,787 9,379,044
Class B shares 1,505,465 2,144,631
Class C shares 77,434 49,513
Cost of shares redeemed:
Class A shares (46,590,037) (26,701,239)
Class B shares (20,973,075) (10,126,784)
Class C shares (432,787) (115,318)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (27,991,771) 6,687,781
TOTAL INCREASE (DECREASE) IN NET ASSETS (49,235,554) 5,100,980
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 293,749,636 288,648,656
END OF PERIOD 244,514,082 293,749,636
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 1,746,590 1,387,167
Shares issued for dividends reinvested 617,430 723,830
Shares redeemed (3,878,095) (2,065,623)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,514,075) 45,374
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 634,572 988,648
Shares issued for dividends reinvested 124,511 165,437
Shares redeemed (1,728,996) (785,050)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (969,913) 369,035
--------------------------------------------------------------------------------
CLASS C
Shares sold 150,041 100,043
Shares issued for dividends reinvested 6,425 3,821
Shares redeemed (36,124) (8,879)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 120,342 94,985
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 906,408 CLASS B SHARES
REPRESENTING $11,001,478 WERE AUTOMATICALLY CONVERTED TO 907,005 CLASS A SHARES
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
-------------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 12.80 12.86 12.65 12.58 12.62
Investment Operations:
Investment income--net .63 .65 .67 .69 .71
Net realized and unrealized
gain (loss) on investments (.90) .08 .34 .17 .14
Total from Investment Operations (.27) .73 1.01 .86 .85
Distributions:
Dividends from investment income--net (.63) (.65) (.67) (.69) (.71)
Dividends from net realized gain
on investments (.02) (.14) (.13) (.10) (.18)
Total Distributions (.65) (.79) (.80) (.79) (.89)
Net asset value, end of period 11.88 12.80 12.86 12.65 12.58
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (2.08) 5.72 8.09 6.91 6.77
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .91 .91 .90 .91 .89
Ratio of net investment income
to average net assets 5.20 5.00 5.17 5.40 5.49
Portfolio Turnover Rate 26.70 40.36 24.73 29.65 43.90
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 201,974 237,027 237,618 242,572 257,639
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
-------------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.81 12.87 12.65 12.59 12.63
Investment Operations:
Investment income--net .57 .58 .60 .62 .64
Net realized and unrealized
gain (loss) on investments (.91) .08 .35 .16 .14
Total from Investment Operations (.34) .66 .95 .78 .78
Distributions:
Dividends from investment income--net (.57) (.58) (.60) (.62) (.64)
Dividends from net realized gain
on investments (.02) (.14) (.13) (.10) (.18)
Total Distributions (.59) (.72) (.73) (.72) (.82)
Net asset value, end of period 11.88 12.81 12.87 12.65 12.59
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (2.66) 5.17 7.62 6.27 6.19
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.42 1.42 1.41 1.42 1.42
Ratio of net investment income
to average net assets 4.68 4.47 4.65 4.87 4.94
Portfolio Turnover Rate 26.70 40.36 24.73 29.65 43.90
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 39,445 54,929 50,453 44,746 40,476
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
-------------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.82 12.88 12.66 12.59 12.68
Investment Operations:
Investment income--net .54 .55 .57 .59 .43
Net realized and unrealized
gain (loss) on investments (.91) .08 .35 .17 .09
Total from Investment Operations (.37) .63 .92 .76 .52
Distributions:
Dividends from investment income--net (.54) (.55) (.57) (.59) (.43)
Dividends from net realized gain
on investments (.02) (.14) (.13) (.10) (.18)
Total Distributions (.56) (.69) (.70) (.69) (.61)
Net asset value, end of period 11.89 12.82 12.88 12.66 12.59
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (2.90) 4.92 7.35 6.07 5.66(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.67 1.66 1.66 1.64 1.63(c)
Ratio of net investment income
to average net assets 4.41 4.20 4.38 4.44 4.66(c)
Portfolio Turnover Rate 26.70 40.36 24.73 29.65 43.90
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 3,095 1,793 579 694 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 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 State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the Ohio Series (the "fund"). The
fund' s investment objective is to maximize current income exempt from Federal
and, where applicable, from State income taxes, without undue risk. 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. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
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.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 ("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 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 $11,618 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.
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, 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 $1,283,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 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 April
30, 2000, the fund did not borrow under the Facility.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
DSC retained $2,768 during the period ended April 30, 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 April 30, 2000, Class B and
Class C shares were charged $231,357 and $18,581, respectively, pursuant to the
Plan, of which $21,801 and $2,487 for Class B and Class C shares, respectively,
were paid to DSC.
(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 April 30, 2000, Class A, Class B and Class C
shares were charged $551,554, $115,679 and $6,193, respectively, pursuant to the
Shareholder Services Plan, of which $55,750, $10,901 and $829 for Class A, Class
B and Class C shares, respectively, were paid to DSC.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for provid
ing personnel and facilities to perform transfer agency services for the fund.
During the period ended April 30, 2000, the fund was charged $123,938 pursuant
to the transfer agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 13, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
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
$69,818,397 and $115,550,504, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$2,527,120, consisting of $5,189,513 gross unrealized appreciation and
$7,716,633 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).
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees Dreyfus Premier State Municipal Bond Fund,
Ohio Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund, Ohio
Series (one of the Funds constituting the Dreyfus Premier State Municipal Bond
Fund) 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 Premier State Municipal Bond Fund, Ohio Series 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 9, 2000
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
--all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are Ohio
residents, Ohio personal income taxes), and
--the fund hereby designates $.0062 per share as a long-term capital gain
distribution of the $.0179 per share paid on December 8, 1999.
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.
The Fund
NOTES
For More Information
Dreyfus Premier State Municipal Bond Fund, Ohio Series
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 057AR004
================================================================================
Dreyfus Premier State
Municipal Bond Fund,
Pennsylvania Series
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
8 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Pennsylvania Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Pennsylvania Series, 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, Douglas Gaylor.
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 Premier State Municipal Bond Fund,
Pennsylvania Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Pennsylvania Series, perform
during the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -3.24% total return, its Class B shares provided a -3.75% total return and its
Class C shares provided a -3.98% total return.(1) In comparison, the Lipper
Pennsylvania Municipal Debt Funds category average provided a -3.65% total
return for the same period.(2) We attribute the fund's negative absolute returns
during the reporting period to a rising interest-rate environment, which caused
most municipal bond prices to decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Pennsylvania state tax-exempt
income as is practical without undue risk from a diversified portfolio of
municipal bonds. To achieve this objective, we employ two primary strategies.
First, for between one-half and three-quarters of the total fund, we look for
bonds that can potentially offer attractive current income. We typically look
for bonds that can provide consistently high current yields. We also try to
ensure that we select bonds that are most likely to obtain attractive prices if
and when we decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to offer attractive total returns. We typically look for
bonds that are selling at a discount to face value because they may be
temporarily out of favor among investors. Our belief is that these bonds' prices
will rise as they return to favor over time.
What other factors influenced the fund's performance?
Although the portfolio' s performance was hurt by a difficult investment
environment from the beginning of the reporting period throughout 1999, the
first four months of 2000 generally provided
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
better market conditions and a market rally. This rally helped offset most --
but not all -- of the decline in the last eight months of 1999.
When the reporting period began on May 1, 1999, investors had become concerned
that strong economic growth might rekindle long-dormant inflationary pressures,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, for a
total increase of 1.25 percentage points. This caused most bond prices to fall.
During 1999 municipal bond prices also fell because of adverse supply-and-demand
influences. For a variety of reasons, institutional investors such as insurance
companies and mutual funds 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% compared to the same period in 1999. This scarcity of supply
was especially severe in Pennsylvania, which is typically a high-issuance state
compared to other states. The lack of supply, combined with strong demand from
individual investors, helped to support the prices of Pennsylvania bonds during
the recent market rally.
What is the fund's current strategy?
Our current strategy has been to maintain as high a level of income as practical
while reducing volatility and protecting assets in a rising interest-rate
environment. Accordingly, we have slowly and modestly begun to reduce the
portfolio' s average duration -- a measure of sensitivity to changing interest
rates -- in an attempt to protect our holdings from the brunt of potential price
depreciation and capture higher yields as they may become available. In doing
so, we have shifted assets from municipal bonds with maturities of 20 to 30
years into bonds with maturities in the 10- to 20-year range. In addition to
helping us reduce the fund's sensitivity to rising interest rates, these
intermediate-term holdings are also more likely to attract the interest of
individual investors when the time comes to sell.
From a security selection perspective, we have focused primarily on tax-exempt
bonds that have recently been out of favor among investors, including bonds
selling at deep discounts and modest premiums to their face values. Because they
are currently unpopular, these types of bonds are available with attractive
yields, in our view, compared to other types of bonds that investors currently
favor. We believe that these holdings have the potential to boost the fund's
performance when deep-discount and modest-premium bonds return to favor among
investors.
May 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-PENNSYLVANIA 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 State
Municipal Bond Fund, Pennsylvania Series 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 STATE MUNICIPAL BOND FUND, PENNSYLVANIA SERIES (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. 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 PENNSYLVANIA 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 INDEX
IS NOT LIMITED TO INVESTMENTS PRINCIPALLY IN PENNSYLVANIA MUNICIPAL OBLIGATIONS
AND DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years 10 Years Inception
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 7/30/87 (7.59)% 4.32% 6.57% --
WITHOUT SALES CHARGE 7/30/87 (3.24)% 5.28% 7.06% --
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (7.36)% 4.43% -- 5.06%
WITHOUT REDEMPTION 1/15/93 (3.75)% 4.74% -- 5.06%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (4.88)% -- -- 4.32%
WITHOUT REDEMPTION 8/15/95 (3.98)% -- -- 4.32%
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
<TABLE>
STATEMENT OF INVESTMENTS
April 30, 2000
Principal
LONG-TERM MUNICIPAL INVESTMENTS--97.6% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PENNSYLVANIA--93.6%
Allegheny County Hospital Development Authority, Revenue
(Health Center - UPMC Health System):
4.50%, 8/1/2015 (Insured; MBIA) 2,000,000 1,666,580
4.75%, 12/15/2016 (Insured; AMBAC) 2,245,000 1,911,034
5%, 11/1/2018 1,000,000 878,460
(Hospital - South Hills Health) 5.125%, 5/1/2029 3,000,000 2,353,140
Allegheny County Industrial Development Authority,
Medical Center Revenue (Presbyterian Medical Center of
Oakmont Pennsylvania, Inc.)
6.75%, 2/1/2026 (Insured; FHA) 1,760,000 1,837,915
Allegheny County Residential Finance Authority, SFMR:
7.40%, 12/1/2022 1,290,000 1,323,024
7.95%, 6/1/2023 740,000 755,629
Bangor Area School District:
4.50%, 3/15/2016 (Insured; FSA) 2,040,000 1,726,554
4.50%, Series A, 3/15/2017 (Insured; FSA) 1,205,000 1,010,778
4.50%, Series B, 3/15/2017 (Insured; FSA) 2,130,000 1,786,687
Beaver County Industrial Development Authority, PCR
(Pennsylvania Power Company Mansfield Project)
7.15%, 9/1/2021 3,000,000 3,088,530
Berks County Municipal Authority, Revenue
(Phoebe - Devitt Homes Project):
5.50%, 5/15/2015 780,000 639,132
5.75%, 5/15/2022 1,500,000 1,224,495
Bradford County Industrial Development Authority, SWDR
(International Paper Company Projects) 6.60%, 3/1/2019 4,250,000 4,240,437
Butler Area School District, 4.75%, 10/1/2022 (Insured; FGIC) 2,190,000 1,832,373
Charleroi Area School Authority, School Revenue
Zero Coupon, 10/1/2020 (Insured; FGIC) 2,000,000 587,320
Chester County Health and Education Facilities Authority,
Health System Revenue
(Jefferson Health System) 5.375%, 5/15/2027 2,000,000 1,679,200
Coatesville Area School District 4.50%, 10/1/2016
(Insured; FSA) 6,855,000 5,767,728
Dauphin County General Authority, Revenue
(Office and Parking, Riverfront Office) 6%, 1/1/2025 3,000,000 2,709,540
East Whiteland Township 5%, 9/1/2019 (Insured; FSA) 2,820,000 2,512,902
Erie:
Zero Coupon, 11/15/2019 (Insured; FSA) 1,685,000 520,598
Zero Coupon, 11/15/2020 (Insured; FSA) 2,110,000 610,212
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Erie County Higher Education Building Authority,
College Revenue (Mercyhurst College Project)
5.75%, 3/15/2020 2,000,000 1,818,220
Erie School District Zero Coupon, 9/1/2015 (Insured; FSA) 1,135,000 464,442
Franklin County Industrial Development Authority, HR
(The Chambersburg Hospital) 5%, 07/01/2018
(Insured; AMBAC) 1,200,000 1,055,508
Gettysburg Municipal Authority, College Revenue
(Gettysburg College) 4.75%, 8/15/2023 (Insured; AMBAC) 2,000,000 1,667,460
Girtys Run Joint Sewer Authority, Sewer Revenue
4.50%, 11/1/2020 (Insured; FSA) 4,580,000 3,735,906
Harrisburg Authority, Office and Parking Revenue
6%, 5/1/2019 2,000,000 1,824,740
Harrisburg Redevelopment Authority, Revenue:
Zero Coupon, 5/1/2018 (Insured; FSA) 2,750,000 923,835
Zero Coupon, 11/1/2018 (Insured; FSA) 2,750,000 896,280
Zero Coupon, 11/1/2019 (Insured; FSA) 2,750,000 838,805
Zero Coupon, 5/1/2020 (Insured; FSA) 2,750,000 808,940
Zero Coupon, 11/1/2020 (Insured; FSA) 2,750,000 784,602
Lancaster Area Sewer Authority, Revenue
4.50%, 4/1/2018 (Insured; MBIA) 5,730,000 4,757,848
Luzerne County Industrial Development Authority,
Exempt Facilities Revenue, (Pennsylvania Gas and
Water Company Project) 7.125%, 12/1/2022 4,000,000 4,220,760
McKeesport Area School District, GO
Zero Coupon, 10/1/2021 (Insured; AMBAC) 3,455,000 949,572
Montgomery County Higher Educational and Health Authority,
Revenue First Mortgage (Montgomery Income Project)
10.50%, 9/1/2020 2,875,000 2,977,954
Montgomery County Industrial Development Authority, RRR
7.50%, 1/1/2012 (LOC; Banque Paribas) 14,715,000 15,103,476
Montour School District, Notes:
Zero Coupon, 1/1/2024 (Insured; FGIC) 1,155,000 266,574
Zero Coupon, 1/1/2025 (Insured; FGIC) 2,015,000 436,086
Norristown (Asset Guarantee) Zero Coupon, 12/15/2014 1,465,000 612,516
Northampton County Industrial Development Authority, PCR
(Bethlehem Steel) 7.55%, 6/1/2017 5,700,000 5,765,151
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Pennsylvania Economic Development Financing Authority:
RRR (Northampton Generating Project) 6.50%, 1/1/2013 6,500,000 6,340,685
Wastewater Treatment Revenue
(Sun Co. Inc. - R and M Project) 7.60%, 12/1/2024 4,240,000 4,492,365
Pennsylvania Housing Finance Agency:
6.50%, 7/1/2023 2,750,000 2,773,595
Single Family Mortgage:
6.75%, 4/1/2016 3,000,000 3,040,590
6.85%, 4/1/2016 (Insured; FHA) 3,700,000 3,747,804
6.90%, 4/1/2025 6,250,000 6,448,188
Pennsylvania Higher Education Assistance Agency,
Student Loan Revenue
7.05%, 10/1/2016 (Insured; AMBAC) 2,500,000 2,660,825
Pennsylvania State Higher Educational Facilities Authority, Revenue:
(State System Higher Education):
5%, 6/15/2019 (Insured; AMBAC) 2,000,000 1,787,700
5%, 6/15/2024 (Insured; FSA) 1,770,000 1,540,643
(UPMC Health System) 4.875%, 8/1/2019 (Insured; FSA) 1,250,000 1,052,150
Pennsylvania State University
5%, 8/15/2017 500,000 454,355
Pennsylvania Turnpike Commission, Oil Franchise Tax Revenue
5%, 12/01/2023 (Insured AMBAC) 2,000,000 1,743,500
Philadelphia:
4.75%, 5/15/2020 (Insured; FGIC) 8,900,000 7,525,128
Gas Works Revenue:
5%, 7/1/2017 (Insured; FSA) 2,500,000 2,272,750
5%, 7/1/2018 (Insured; FSA) 3,500,000 3,149,580
5%, 7/1/2023 (Insured; FSA) 6,000,000 5,209,740
6.375%, 7/1/2026 (Insured; CMAC) 1,000,000 1,023,270
Philadelphia Hospitals and Higher Education Facilities Authority:
Revenue(Jefferson Health System) 5%, 5/15/2011 2,000,000 1,803,340
HR(Temple University Hospital) 6.625%, 11/15/2023 14,490,000 13,156,485
Philadelphia School District 4.50%, 4/1/2023 (Insured; MBIA) 16,625,000 13,354,696
Pittsburgh and Allegheny County Public Auditorium Authority,
Excise Tax Revenue
(Hotel Room) 5%, 2/1/2024 (Insured, AMBAC) 2,250,000 1,955,340
Pittsburgh Urban Redevelopment Authority Mortgage Revenue:
7.05%, 4/1/2023 1,785,000 1,816,220
(Sidney Square Project) 6.65%, 9/1/2028 3,350,000 3,377,303
Pittsburgh Water and Sewer Authority, Water and
Sewer Systems Revenue 5%, 9/1/2017 1,400,000 1,272,026
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Pottstown School District 4.75%, 6/1/2022 (Insured; MBIA) 3,760,000 3,150,316
Schuylkill County Industrial Development Authority
First Mortgage Revenue (Valley Health Concerns)
8.75%, 3/1/2012 2,500,000 2,502,925
Southeast Delco School District:
Zero Coupon, 2/1/2020 (Insured; MBIA) 2,055,000 623,302
Zero Coupon, 2/1/2023 (Insured; MBIA) 2,055,000 512,065
Southeastern Transportation Authority, Special Revenue
4.75%, 3/1/2024 (Insured; FGIC) 2,775,000 2,308,745
Spring-Ford Area School District 4.75%, 3/1/2022
(Insured; FGIC) 8,935,000 7,493,874
State Public School Building Authority, School Revenue
(School District of York Project) 4.75%, 2/15/2014
(Insured; FGIC) 1,655,000 1,480,497
Washington County Industrial Development Authority:
PCR (West Pennsylvania Power Company Mitchell)
6.05%, 4/1/2014 (Insured; AMBAC) 3,000,000 3,091,200
Revenue (Presbyterian Medical Center)
6.75%, 1/15/2023 (Insured; FHA) 3,000,000 3,141,900
U.S. RELATED--4.0%
Commonwealth of Puerto Rico (Public Improvement)
4.50%, 7/1/2023 5,000,000 4,053,850
Puerto Rico Electric Power Authority, Power Revenue
5%, 7/1/2023 5,500,000 4,827,020
TOTAL LONG-TERM INVESTMENTS (cost $227,277,749) 215,754,915
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--.5%
------------------------------------------------------------------------------------------------------------------------------------
Delaware County Industrial Development Authority, PCR, VRDN
(British Petroleum Oil Inc. Project) 5.80% (cost $1,000,000) 1,000,000 (a) 1,000,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $228,277,749) 98.1% 216,754,915
CASH AND RECEIVABLES (NET) 1.9% 4,247,492
NET ASSETS 100.0% 221,002,407
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
CMAC Capital Market Assurance
Corporation
FGIC Financial Guaranty Insurance
Company
FHA Federal Housing Administration
FSA Financial Security Assurance
GO General Obligation
HR Hospital Revenue
LOC Letter of Credit
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
PCR Pollution Control Revenue
RRR Resources Recovery Revenue
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 57.9
AA Aa AA 8.2
A A A 12.0
BBB Baa BBB 13.3
F1 MIG1/P1 SP1/A1 .5
Not Rated(b) Not Rated(b) Not Rated(b) 8.1
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST-SUBJECT TO PERIODIC
CHANGE.
(B) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 228,277,749 216,754,915
Cash 291,037
Interest receivable 3,618,963
Receivable for investment securities sold 529,353
Receivable for shares of Beneficial Interest subscribed 146,612
Prepaid expenses 7,816
221,348,696
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 164,129
Payable for shares of Beneficial Interest redeemed 136,552
Accrued expenses 45,608
346,289
--------------------------------------------------------------------------------
NET ASSETS ($) 221,002,407
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 233,058,657
Accumulated net realized gain (loss) on investments (533,416)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (11,522,834)
--------------------------------------------------------------------------------
NET ASSETS ($) 221,002,407
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets 180,760,304 38,968,005 1,274,098
Shares Outstanding 12,099,489 2,610,794 85,247
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 14.94 14.93 14.95
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 14,593,847
EXPENSES:
Management fee--Note 3(a) 1,326,793
Shareholder servicing costs--Note 3(c) 817,985
Distribution fees--Note 3(b) 263,746
Custodian fees 27,528
Professional fees 27,221
Registration fees 23,217
Prospectus and shareholders' reports 23,127
Trustees' fees and expenses--Note 3(d) 3,244
Loan commitment fees--Note 2 2,482
Miscellaneous 17,187
TOTAL EXPENSES 2,532,530
INVESTMENT INCOME--NET 12,061,317
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 452,220
Net unrealized appreciation (depreciation) on investments (21,787,858)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (21,335,638)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (9,274,321)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
----------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 12,061,317 12,843,754
Net realized gain (loss) on investments 452,220 5,906,216
Net unrealized appreciation (depreciation)
on investments (21,787,858) (3,365,196)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (9,274,321) 15,384,774
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (9,678,252) (9,548,326)
Class B shares (2,339,115) (3,269,922)
Class C shares (43,950) (25,507)
Net realized gain on investments:
Class A shares (3,547,348) (3,137,642)
Class B shares (861,532) (1,225,935)
Class C shares (19,855) (9,155)
TOTAL DIVIDENDS (16,490,052) (17,216,487)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 31,806,266 15,324,595
Class B shares 9,233,839 9,317,671
Class C shares 809,497 888,826
Dividends reinvested:
Class A shares 7,038,799 6,692,004
Class B shares 2,185,100 2,958,657
Class C shares 44,344 12,609
Cost of shares redeemed:
Class A shares (33,930,306) (21,037,691)
Class B shares (35,538,987) (17,742,150)
Class C shares (376,973) (460,642)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (18,728,421) (4,046,121)
TOTAL INCREASE (DECREASE) IN NET ASSETS (44,492,794) (5,877,834)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 265,495,201 271,373,035
END OF PERIOD 221,002,407 265,495,201
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended April 30,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 2,029,925 918,902
Shares issued for dividends reinvested 460,266 398,920
Shares redeemed (2,211,504) (1,253,979)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 278,687 63,843
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 590,695 556,572
Shares issued for dividends reinvested 142,505 176,403
Shares redeemed (2,283,203) (1,062,694)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,550,003) (329,719)
--------------------------------------------------------------------------------
CLASS C
Shares sold 52,892 53,260
Shares issued for dividends reinvested 2,914 752
Shares redeemed (24,746) (27,571)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 31,060 26,441
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 1,477,344 CLASS B SHARES
REPRESENTING $22,894,751 WERE AUTOMATICALLY CONVERTED TO 1,476,804 CLASS A
SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
--------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 16.56 16.68 16.23 16.17 16.12
Investment Operations:
Investment income--net .79 .82 .85 .85 .87
Net realized and unrealized
gain (loss) on investments (1.33) .16 .71 .24 .32
Total from Investment Operations (.54) .98 1.56 1.09 1.19
Distributions:
Dividends from investment income--net (.79) (.82) (.85) (.85) (.87)
Dividends from net realized gain
on investments (.29) (.28) (.26) (.18) (.27)
Total Distributions (1.08) (1.10) (1.11) (1.03) (1.14)
Net asset value, end of period 14.94 16.56 16.68 16.23 16.17
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.24) 5.97 9.83 6.89 7.46
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .94 .92 .92 .92 .92
Ratio of net investment income
to average net assets 5.12 4.90 5.09 5.22 5.28
Portfolio Turnover Rate 34.29 48.14 34.82 60.57 52.69
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 180,760 195,728 196,055 201,229 216,802
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
--------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
----------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 16.55 16.67 16.23 16.16 16.11
Investment Operations:
Investment income--net .71 .74 .77 .77 .79
Net realized and unrealized
gain (loss) on investments (1.33) .16 .70 .25 .32
Total from Investment Operations (.62) .90 1.47 1.02 1.11
Distributions:
Dividends from investment income--net (.71) (.74) (.77) (.77) (.79)
Dividends from net realized gain
on investments (.29) (.28) (.26) (.18) (.27)
Total Distributions (1.00) (1.02) (1.03) (.95) (1.06)
Net asset value, end of period 14.93 16.55 16.67 16.23 16.16
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.75) 5.43 9.20 6.41 6.92
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.46 1.43 1.43 1.43 1.43
Ratio of net investment income
to average net assets 4.57 4.39 4.57 4.71 4.76
Portfolio Turnover Rate 34.29 48.14 34.82 60.57 52.69
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 38,968 68,869 74,855 71,671 72,610
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
-------------------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 16.57 16.69 16.23 16.16 16.18
Investment Operations:
Investment income--net .67 .69 .70 .69 .53
Net realized and unrealized
gain (loss) on investments (1.33) .16 .72 .25 .25
Total from Investment Operations (.66) .85 1.42 .94 .78
Distributions:
Dividends from investment income--net (.67) (.69) (.70) (.69) (.53)
Dividends from net realized gain
on investments (.29) (.28) (.26) (.18) (.27)
Total Distributions (.96) (.97) (.96) (.87) (.80)
Net asset value, end of period 14.95 16.57 16.69 16.23 16.16
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (3.98) 5.16 8.91 5.92 6.71(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.70 1.69 1.69 1.83 1.70(c)
Ratio of net investment income
to average net assets 4.35 4.07 3.98 4.28 4.46(c)
Portfolio Turnover Rate 34.29 48.14 34.82 60.57 52.69
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,274 898 463 32 21
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company and operates as a series company
currently offering thirteen series including the Pennsylvania Series (the
" fund" ). The fund's investment objective is to maximize current income exempt
from Federal and, where applicable, from State income taxes, without undue risk.
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. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
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 ("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 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 $12,500 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.
The fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
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 and
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 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.
DSC retained $4,017 during the period ended April 30, 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 April 30, 2000, Class B and
Class C shares were charged $256,167 and $7,579, respectively, pursuant to the
Plan, of which $21,873 and $1,031 for Class B and Class C shares, respectively,
were paid to DSC.
(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 April 30, 2000 Class A, Class B and Class C
shares were charged $472,478, $128,084, and $2,526, respectively, pursuant to
the Shareholder Services Plan, of which $49,985, $10,937 and $344 for Class A,
Class B and Class C shares, respectively, were 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 $136,293 pursuant to the transfer
agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group" ).
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Effective April 13, 2000, each Board member receives an annual fee of $50,000
and a fee of $6,500 for each meeting held in person 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 13, 2000, each Board member who was not an "affiliated person" as defined
in the Act received from the Trust 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 Director Emeritus Program Guidelines,
Emeritus Board members, if any, receive 50% of the Trust's annual retainer fee
and per meeting fee paid at the time the Board member achieved emeritus status.
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
$81,579,527 and $106,477,905 respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$11,522,834, consisting of $1,875,931 gross unrealized appreciation and
$13,398,765 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 Trustees Dreyfus Premier State Municipal Bond Fund,
Pennsylvania Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Pennsylvania Series (one of the funds constituting the Dreyfus Premier State
Municipal Bond Fund) 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 Premier State Municipal Bond Fund, Pennsylvania Series 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 9, 2000
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
--all the dividends paid from investment income-net are
"exempt-interest dividends" (not subject to regular Federal and, for individuals
who are Pennsylvania residents, Pennsylvania personal income taxes), and
--the fund hereby designates $.2724 per share as a long-term capital
gain distribution of the $.2853 per share paid on December 8, 1999.
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 Premier State Municipal Bond Fund, Pennsylvania
Series
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 058AR004
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Texas Series
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
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
---------------------------------------------------------------------------
Back Cover
Dreyfus Premier
State Municipal Bond Fund,
Texas Series
The Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Texas Series, 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, Douglas Gaylor.
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 Premier State Municipal Bond Fund, Texas
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Texas Series, perform during
the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -3.62% total return, its Class B shares provided a -4.14% total return and its
Class C shares provided a -4.33% total return.(1) In comparison, the Lipper
Texas Municipal Debt Funds category average provided a -3.99% total return for
the same period.(2) We attribute the fund's negative absolute returns during the
reporting period to a rising interest-rate environment, which caused most
municipal bond prices to decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Texas tax-exempt income as is
practical without undue risk from a diversified portfolio of municipal bonds. To
achieve this objective, we employ two primary strategies. First, for between
one-half and three-quarters of the total fund, we look for bonds that can
potentially offer attractive current income. We typically look for bonds that
can provide consistently high current yields. We also try to ensure that we
select bonds that are most likely to obtain attractive prices if and when we
decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to offer attractive total returns. We typically look for
bonds that are selling at a discount to face value because they may be
temporarily out of favor among investors. Our belief is that these bonds' prices
will rise as they return to favor over time.
What other factors influenced the fund's performance?
Although the fund's performance was hurt by a difficult investment environment
from the beginning of the reporting period throughout 1999, the first four
months of 2000 generally provided better market
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
conditions and a market rally. This rally helped offset most -- but not all --
of the decline in the last eight months of 1999.
When the reporting period began on May 1, 1999, investors had become concerned
that strong economic growth might rekindle long-dormant inflationary pressures,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, for a
total increase of 1.25 percentage points. This caused most bond prices to fall.
During 1999 municipal bond prices also fell because of adverse supply-and-demand
influences. For a variety of reasons, institutional investors such as insurance
companies and mutual funds 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% compared to the same period in 1999.
In addition, the fund and the Texas marketplace were adversely affected by a
change in the state laws governing insurance companies. These companies are no
longer required to hold Texas municipal bonds in their portfolios as a
prerequisite to doing business in the state. As a result, demand from
institutional investors in Texas has fallen, constraining the rise of the
state's bond prices during the recent market rally.
What is the fund's current strategy?
Our current strategy has been to maintain as high a level of income as practical
while reducing volatility and protecting assets in a rising interest-rate
environment. Accordingly, we have slowly and modestly begun to reduce the
portfolio' s average duration -- a measure of sensitivity to changing interest
rates -- in an attempt to protect our holdings from the brunt of potential price
depreciation and capture higher yields as they may become available. In doing
so, we have shifted assets from municipal bonds with maturities of 20 to 30
years into bonds with maturities in the 10- to 20-year range. In addition to
helping us reduce the fund' s sensitivity to rising interest rates, these
intermediate-term holdings are also more likely to attract the interest of
individual investors when the time comes to sell.
From a security selection perspective, we have focused primarily on tax-exempt
bonds that have recently been out of favor among investors, including bonds
selling at deep discounts and modest premiums to their face values. Because they
are currently unpopular, these types of bonds are available with attractive
yields, in our view, compared to other types of bonds that investors currently
favor. We believe that these holdings have the potential to boost the fund's
performance when deep-discount and modest-premium bonds return to favor among
investors.
May 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-TEXAS
RESIDENTS 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 RETURN WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Premier State
Municipal Bond Fund, Texas Series 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 STATE MUNICIPAL BOND FUND, TEXAS SERIES (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. 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 TEXAS 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 INDEX IS NOT
LIMITED TO INVESTMENTS PRINCIPALLY IN TEXAS MUNICIPAL OBLIGATIONS AND DOES NOT
TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years 10 Years Inception
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 5/28/87 (7.96)% 4.50% 6.84% --
WITHOUT SALES CHARGE 5/28/87 (3.62)% 5.46% 7.34% --
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (7.75)% 4.61% -- 5.42%
WITHOUT REDEMPTION 1/15/93 (4.14)% 4.92% -- 5.42%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (5.24)% -- -- 4.51%
WITHOUT REDEMPTION 8/15/95 (4.33)% -- -- 4.51%
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
April 30, 2000
<TABLE>
STATEMENT OF INVESTMENTS
Principal
LONG-TERM MUNICIPAL INVESTMENTS--96.5% Amount ($) Value ($)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TEXAS--95.2%
Aledo Independent School District, Unlimited Tax School Building
(Permanent School Fund Guaranteed)
Zero Coupon, 2/15/2014 1,225,000 553,614
Brazos Higher Education Authority Inc., Student Loan Revenue
6.80%, 12/1/2004 700,000 733,523
Clear Creek Independent School District
(Permanent School Fund Guaranteed)
4.25%, 2/1/2013 1,475,000 1,270,167
Coastal Water Authority, Water Conveyance System
6.25%, 12/15/2017 (Insured; AMBAC) 5,885,000 5,945,615
Dallas-Fort Worth Regional Airport, Joint Revenue
6.625%, 11/1/2021 (Insured; FGIC) 1,250,000 1,285,025
Denison Hospital Authority, HR
(Texoma Medical Center Project) 6.125%, 8/15/2017 750,000 640,875
Eanes Independent School District
(Permanent School Fund Guaranteed)
4.50%, 8/1/2017 1,400,000 1,163,498
El Paso Housing Authority, Multi-Family Revenue
(Section 8 Projects) 6.25%, 12/1/2009 2,510,000 2,543,584
Grape Creek-Pulliam Independent School District
Public Facility Corp., School Facility LR
7.25%, 5/15/2021 2,200,000 2,300,342
Grapevine-Colleyville Independent School District, Unlimited
Tax School Building (Permanent School Fund Guaranteed):
Zero Coupon, 8/15/2017 2,590,000 928,411
Zero Coupon, 8/15/2018 2,390,000 800,244
Gulf Coast Waste Disposal Authority, SWDR
(Champion International Corp. Project) 7.25%, 4/1/2017 560,000 579,303
Houston, Public Improvement 4.75%, 3/1/2016 1,160,000 1,011,358
Houston Independent School District
(Permanent School Fund Guaranteed):
Zero Coupon, 8/15/2015 3,000,000 1,230,780
4.75%, 2/15/2022 2,500,000 2,094,500
Irving Independent School District
(Permanent School Fund Guaranteed):
Zero Coupon, 2/15/2010 1,985,000 1,154,377
Zero Coupon, 2/15/2016 1,000,000 394,830
Katy Independent School District, Limited Tax Refunding
and School Building (Permanent School Fund Guaranteed)
4.75%, 2/15/2021 1,295,000 1,092,449
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
---------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
La Porte Independent School District
(Permanent School Fund Guaranteed)
4.50%, 2/15/2017 1,000,000 835,540
Lakeway Municipal Utility District
Zero Coupon, 9/1/2013 (Insured; FGIC) 1,850,000 863,876
Leon County, PCR (Nucor Corp. Project) 7.375%, 8/1/2009 750,000 784,020
Lower Colorado River Authority, Revenue, Junior Lein
4.50%, 1/1/2017 (Insured; FSA) 1,410,000 1,232,791
North Texas Higher Education Authority, Inc.,
Student Loan Revenue 7.25%, 4/1/2003
(Insured; AMBAC) (Prerefunded 6/1/2000) 1,000,000 (a) 1,022,460
Round Rock Independent School District
(Permanent School Fund Guaranteed)
4.50%, 8/1/2016 1,950,000 1,658,728
Texas:
(Veterans Housing Assistance) 6.80%, 12/1/2023 2,145,000 2,214,048
(Water Development) 5%, 8/1/2020 750,000 666,293
Texas Department Housing and Community Affairs, MFHR
(Harbors and Plumtree) 6.35%, 7/1/2016 1,300,000 1,308,905
Texas Higher Education Coordinating Board,
College Student Loan Revenue
7.30%, 10/1/2003 315,000 328,255
Texas National Research Laboratory Commission Financing Corp.,
LR (Superconducting Super Collider) 6.95%, 12/1/2012 700,000 791,644
Texas Public Finance Authority, Building Revenue
(State Preservation Board Project):
4.50%, 2/1/2018 (Insured; AMBAC) 2,805,000 2,328,795
4.50%, 2/1/2019 (Insured; AMBAC) 2,165,000 1,784,068
Texas Public Property Finance Corp., Revenue
(Mental Health and Retardation)
8.875%, 9/1/2011 (Prerefunded 9/1/2001) 455,000 (a) 487,018
Texas Water Development Board, Revenue, State Revolving Fund
4.75%, 7/15/2020 1,695,000 1,444,208
Tomball Hospital Authority, Revenue 6%, 7/1/2013 5,000,000 4,545,650
Tomball Independent School District
(Permanent School Fund Guaranteed) 4.75%, 2/15/2020 2,515,000 2,134,003
Tyler Health Facility Development Corp., HR
(East Texas Medical Center Regional Health)
6.625%, 11/1/2011 1,525,000 1,362,832
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
---------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
University of Texas (Financing System) University Revenues
3.75%, 8/15/2018 5,000,000 3,703,750
Victoria, Utility System Revenue 4.75%, 12/1/2022
(Insured; MBIA) 1,105,000 921,537
Waxahachie Community Development Corp., Sales Tax Revenue:
Zero Coupon, 8/1/2020 (Insured; MBIA) 1,430,000 408,608
Zero Coupon, 8/1/2023 (Insured; MBIA) 1,000,000 233,650
West Side Calhoun County Navigation District, SWDR
(Union Carbide Chemical and Plastics) 8.20%, 3/15/2021 500,000 518,890
U.S. RELATED--1.3%
Puerto Rico (Public Improvement)
4.50%, 7/1/2023 (Insured; FSA) 1,000,000 810,770
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $61,259,366) 58,112,834
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENT--1.7%
------------------------------------------------------------------------------------------------------------------------------------
Brazos River Authority, PCR, VRDN (Utility Electric Co.)
6.25% (LOC; Morgan Guaranty Trust Co. of New York)
(cost $1,000,000) 1,000,000 (b) 1,000,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $62,259,366) 98.2% 59,112,834
CASH AND RECEIVABLES (NET) 1.8% 1,098,119
NET ASSETS 100.0% 60,210,953
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
FGIC Financial Guaranty Insurance
Company
FSA Financial Security Assurance
HR Hospital Revenue
LOC Letter of Credit
LR Lease Revenue
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 64.5
AA Aa AA 7.9
A A A 8.3
BBB Baa BBB 14.5
BBB B B 2.3
F1 MIG1/P1 SP1/A1 1.7
Not Rated(c) Not Rated(c) Not Rated(c) .8
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
(D) AT APRIL 30, 2000, 25.4% OF THE FUND'S NET ASSETS ARE GUARANTEED BY
PERMANENT SCHOOL FUND.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 62,259,366 59,112,834
Cash 559,405
Interest receivable 965,642
Receivable for shares of Beneficial Interest subscribed 11,843
Prepaid expenses 8,022
60,657,746
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 35,956
Payable for shares of Beneficial Interest redeemed 393,842
Accrued expenses 16,995
446,793
--------------------------------------------------------------------------------
NET ASSETS ($) 60,210,953
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 63,468,849
Accumulated net realized gain (loss) on investments (111,364)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (3,146,532)
--------------------------------------------------------------------------------
NET ASSETS ($) 60,210,953
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 52,463,659 7,482,772 264,522
Shares Outstanding 2,714,675 387,282 13,695
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 19.33 19.32 19.31
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 3,930,364
EXPENSES:
Management fee--Note 3(a) 373,352
Shareholder servicing costs--Note 3(c) 206,299
Distribution fees--Note 3(b) 61,118
Registration fees 37,631
Professional fees 23,758
Prospectus and shareholders' reports 15,250
Custodian fees 7,647
Trustees' fees and expenses--Note 3(d) 969
Loan commitment fees--Note 2 612
Miscellaneous 10,209
TOTAL EXPENSES 736,845
Less--reduction in management fee due to undertaking--Note 3(a) (98,727)
NET EXPENSES 638,118
INVESTMENT INCOME--NET 3,292,246
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4:
Net realized gain (loss) on investments 211,363
Net unrealized appreciation (depreciation) on investments (6,522,846)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (6,311,483)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (3,019,237)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
----------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 3,292,246 3,580,223
Net realized gain (loss) on investments 211,363 1,655,520
Net unrealized appreciation (depreciation)
on investments (6,522,846) (902,285)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (3,019,237) 4,333,458
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (2,765,973) (2,750,126)
Class B shares (504,058) (815,258)
Class C shares (22,215) (14,839)
Net realized gain on investments:
Class A shares (774,143) (1,392,005)
Class B shares (135,906) (491,551)
Class C shares (8,474) (9,650)
TOTAL DIVIDENDS (4,210,769) (5,473,429)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 7,421,968 6,902,174
Class B shares 924,779 3,131,814
Class C shares 248,924 472,618
Dividends reinvested:
Class A shares 1,661,140 2,017,842
Class B shares 401,134 874,269
Class C shares 20,594 10,434
Cost of shares redeemed:
Class A shares (11,288,329) (7,312,717)
Class B shares (9,561,557) (7,146,330)
Class C shares (555,206) (115,404)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (10,726,553) (1,165,300)
TOTAL INCREASE (DECREASE) IN NET ASSETS (17,956,559) (2,305,271)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 78,167,512 80,472,783
END OF PERIOD 60,210,953 78,167,512
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
-------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 368,896 318,580
Shares issued for dividends reinvested 84,082 92,816
Shares redeemed (569,598) (335,978)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (116,620) 75,418
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 44,887 143,855
Shares issued for dividends reinvested 20,194 40,204
Shares redeemed (474,815) (330,498)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (409,734) (146,439)
--------------------------------------------------------------------------------
CLASS C
Shares sold 12,088 21,872
Shares issued for dividends reinvested 1,034 482
Shares redeemed (28,464) (5,370)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (15,342) 16,984
(A) DURING THE PERIOD ENDED APRIL 30, 2000, 279,353 CLASS B SHARES REPRESENTING
$5,593,499 WERE AUTOMATICALLY CONVERTED TO 279,364 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
--------------------------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 21.37 21.68 20.99 20.84 20.69
Investment Operations:
Investment income--net .98 1.00 1.08 1.17 1.20
Net realized and unrealized
gain (loss) on investments (1.77) .21 .99 .41 .45
Total from Investment Operations (.79) 1.21 2.07 1.58 1.65
Distributions:
Dividends from investment income--net (.98) (1.00) (1.08) (1.17) (1.20)
Dividends from net realized gain
on investments (.27) (.52) (.30) (.26) (.30)
Total Distributions (1.25) (1.52) (1.38) (1.43) (1.50)
Net asset value, end of period 19.33 21.37 21.68 20.99 20.84
---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (3.62) 5.66 10.03 7.74 8.06
---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .85 .85 .72 .37 .37
Ratio of net investment income
to average net assets 4.95 4.59 4.96 5.54 5.64
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus
Corporation .14 .07 .18 .55 .55
Portfolio Turnover Rate 22.70 49.67 27.18 61.22 49.24
---------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 52,464 60,516 59,758 60,849 62,864
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
--------------------------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 21.37 21.68 20.98 20.84 20.69
Investment Operations:
Investment income--net .88 .89 .97 1.06 1.09
Net realized and unrealized
gain (loss) on investments (1.78) .21 1.00 .40 .45
Total from Investment Operations (.90) 1.10 1.97 1.46 1.54
Distributions:
Dividends from investment income--net (.88) (.89) (.97) (1.06) (1.09)
Dividends from net realized gain
on investments (.27) (.52) (.30) (.26) (.30)
Total Distributions (1.15) (1.41) (1.27) (1.32) (1.39)
Net asset value, end of period 19.32 21.37 21.68 20.98 20.84
---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (4.14) 5.13 9.53 7.15 7.51
---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.35 1.35 1.23 .88 .88
Ratio of net investment income
to average net assets 4.41 4.09 4.44 5.03 5.13
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus
Corporation .16 .08 .18 .55 .55
Portfolio Turnover Rate 22.70 49.67 27.18 61.22 49.24
---------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 7,483 17,031 20,454 17,396 17,461
(A) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
--------------------------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 21.36 21.67 20.97 20.83 20.78
Investment Operations:
Investment income--net .84 .83 .91 .99 .73
Net realized and unrealized
gain (loss) on investments (1.78) .21 1.00 .40 .35
Total from Investment Operations (.94) 1.04 1.91 1.39 1.08
Distributions:
Dividends from investment income--net (.84) (.83) (.91) (.99) (.73)
Dividends from net realized gain
on investments (.27) (.52) (.30) (.26) (.30)
Total Distributions (1.11) (1.35) (1.21) (1.25) (1.03)
Net asset value, end of period 19.31 21.36 21.67 20.97 20.83
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (4.33) 4.86 9.24 6.79 7.29(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.60 1.60 1.52 1.19 1.18(c)
Ratio of net investment income
to average net assets 4.15 3.79 4.10 4.57 4.77(c)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus
Corporation .15 .11 .15 .54 .58(c)
Portfolio Turnover Rate 22.70 49.67 27.18 61.22 49.24
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 265 620 261 129 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 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 State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the Texas Series (the "fund"). The
fund' s investment objective is to maximize current income exempt from Federal
and, where applicable, from State income taxes, without undue risk. 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. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 ("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 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 $3,832 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.
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.
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.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 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 expenses, excluding 12b-1 distribution
fees, taxes, brokerage fees, commitment fees, interest on borrowings and
extraordinary expenses, 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 $98,727 during the period ended April 30, 2000.
(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 April 30, 2000, Class B and
Class C shares were charged $57,107 and $4,011, respectively, pursuant to the
Plan, of which $4,319 and $203 for Class B and Class C shares, respectively,
were paid to DSC.
(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 the 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 April 30, 2000, Class A, Class B and Class C shares were
charged $139,815, $28,554 and $1,337, respectively, pursuant to the
Shareholder Services Plan, of which $14,525, $2,160 and $68 for Class A, Class B
and Class C shares, respectively, were 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 $24,541 pursuant to the transfer
agency agreement.
(D) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 13, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
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
$14,978,580 and $26,683,259, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$3,146,532, consisting of $574,784 gross unrealized appreciation and $3,721,316
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).
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees Dreyfus Premier State Municipal Bond Fund,
Texas Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Texas Series (one of the funds constituting the Dreyfus Premier State Municipal
Bond Fund) 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 the 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 Premier State Municipal Bond Fund, Texas Series 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 9, 2000
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
-- all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal income tax, and for individuals
who are Texas residents, not subject to taxation by Texas), and
-- the fund hereby designates $.2135 per share as a long-term capital gain
distribution of the $.2747 per share paid on December 8, 1999.
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.
The Fund
For More Information
Dreyfus Premier State Municipal Bond Fund,
Texas Series
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 061AR004
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Virginia Series
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
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
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Virginia Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier State Municipal
Bond Fund, Virginia Series, 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, Samuel Weinstock.
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 Premier State Municipal Bond Fund, Virginia
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Samuel Weinstock, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Virginia Series, perform
during the period?
For the 12-month period ended April 30, 2000, the fund's Class A shares provided
a -3.65% total return, its Class B shares provided a -4.21% total return and its
Class C shares provided a -4.37% total return.(1) In comparison, the Lipper
Virginia Municipal Debt Funds category average provided a -2.49% total return
for the same period.(2
In a rising interest-rate environment, which caused most municipal bond prices
to decline over the past year, the fund's relative performance lagged compared
to that of its category average. We attribute our underperformance to the fund's
focus on income. Because of this focus, the fund's total return tends to
outperform the averages during declining markets, but may lag during rallies
such as the one that prevailed during the first quarter of 2000.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Virginia tax-exempt income as
is practical without undue risk from a diversified portfolio of municipal bonds.
To achieve this objective, we employ four primary strategies. First, we strive
to identify the maturity range that we believe will provide the most favorable
returns over the next two years. Second, we evaluate issuers' credit quality to
find bonds that we believe provide high yields at attractive prices. Third, we
look for bonds with attractive high interest payments, even if they sell at a
premium to face value. Fourth, we assess individual bonds' early redemption
features, focusing on those that cannot be redeemed soon by their issuers.
Typically, the bonds we select for the portfolio will have several of these
qualities.
We also use computer models to evaluate the likely performance of bonds under
various market scenarios, including a 0.25 percentage-
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
point rise in interest rates and a 0.50 percentage-point decline. When we find
securities that we believe will provide participation when the market rises and
some protection against declines, we tend to hold them for the long term.
What other factors influenced the fund's performance?
Although the fund's performance was hurt by a difficult investment environment
during the final two months of 1999, the first four months of 2000 generally
provided better market conditions and a market rally. While the fund's
performance lagged that of its peer group, 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,
especially from rising wages in a tight job market. In an attempt to ease these
pressures and forestall a reacceleration of inflation, the Federal Reserve Board
raised short-term interest rates five times during the reporting period, causing
most bond prices to fall, for a total increase of 1.25 percentage points.
Municipal bond prices also fell during November and December, 1999, because of
adverse supply-and-demand influences. For a variety of reasons, institutional
investors such as insurance companies and mutual funds 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 in
1999. This supply reduction, combined with robust demand from individual
investors, helped support a rebound of municipal bond prices.
What is the fund's current strategy?
We have changed the balance of assets in the fund from approximately 85%
income-oriented bonds and about 15% total return-oriented bonds to a target of
75% and 25% , respectively. This shift is part of our continuing effort to
upgrade the fund's liquidity profile by gradually moving away from the types of
bonds that may have underperformed the market over the past six months.
Accordingly, we have sold some of our longer term, lower rated holdings,
including bonds issued by industrial development regions (IDRs) and health care
facilities. We have attempted to invest the proceeds of these sales in shorter
term bonds with greater protection from early redemptions. We have found such
opportunities primarily among insured bonds that we believe will appeal to
retail investors if and when the time comes to sell them.
These changes in the fund's asset mix have modestly affected our duration
management strategy. At about eight years as of April 30, the fund's average
duration -- a measure of sensitivity to changing interest rates -- is slightly
longer than it was when the reporting period began.
May 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-VIRGINIA
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 State
Municipal Bond Fund, Virginia Series 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 STATE MUNICIPAL BOND FUND, VIRGINIA SERIES (THE "FUND") ON 8/1/91
(INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE LEHMAN BROTHERS MUNICIPAL
BOND INDEX (THE "INDEX") ON THAT DATE. FOR COMPARATIVE PURPOSES, THE VALUE OF
THE INDEX ON 7/31/91 IS USED AS THE BEGINNING VALUE ON 8/1/91. 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 VIRGINIA 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 INDEX IS NOT
LIMITED TO INVESTMENTS PRINCIPALLY IN VIRGINIA MUNICIPAL OBLIGATIONS AND DOES
NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE 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>
Average Annual Total Returns AS OF 4/30/00
Inception From
Date 1 Year 5 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (4.5%) 8/1/91 (8.01)% 4.46% 6.08%
WITHOUT SALES CHARGE 8/1/91 (3.65)% 5.43% 6.64%
CLASS B SHARES
WITH REDEMPTION((+)) 1/15/93 (7.86)% 4.55% 5.00%
WITHOUT REDEMPTION 1/15/93 (4.21)% 4.88% 5.00%
CLASS C SHARES
WITH REDEMPTION((+)(+)) 8/15/95 (5.28)% -- 4.40%
WITHOUT REDEMPTION 8/15/95 (4.37)% -- 4.40%
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
<TABLE>
STATEMENT OF INVESTMENTS
April 30, 2000
Principal
LONG-TERM MUNICIPAL INVESTMENTS--92.4% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VIRGINIA--59.2%
Alexandria Redevelopment and Housing Authority,
Multi-Family Housing Mortgage Revenue
(Buckingham Village Apartments) 6.125%, 7/1/2021 3,000,000 3,011,520
Beford County Industrial Development Authority,
IDR (Nekossa Packaging Corp. Project)
5.60%, 12/1/2025 3,500,000 3,020,080
Chesapeake Bay Bridge and Tunnel Commission District, Revenue,
General Resolution 5.50%, 7/1/2025 (Insured; MBIA) 2,500,000 2,415,550
Chesapeake Toll Road, Expressway Revenue 5.625%, 7/15/2019 1,250,000 1,179,837
Dinwiddie County Industrial Development Authority, LR
(Dinwiddie County School Facilities Project) 6%, 2/1/2018 500,000 481,205
Dulles Town Center Community Development Authority,
Special Assessment Tax (Dulles Town Center Project)
6.25%, 3/1/2026 3,000,000 2,793,240
Fairfax County Park Authority, Park Facilities Revenue
6.625%, 7/15/2020 2,665,000 2,710,332
Fairfax County Redevelopment and Housing Authority, MFHR
(Paul Spring Retirement Center):
5.90%, 6/15/2017 (Insured; FHA) 200,000 196,810
6%, 12/15/2028 (Insured; FHA) 600,000 587,898
Fairfax County Water Authority, Water Revenue:
5.75%, 4/1/2029 (Prerefunded 4/1/2002) 1,525,000 (a) 1,552,541
5.75%, 4/1/2029 1,000,000 986,760
Hampton Redevelopment and Housing Authority,
First Mortgage Revenue
(Olde Hampton Hotel Associates Project) 6.50%, 7/1/2016 2,640,000 2,436,113
Industrial Development Authority of the City of Hopewell,
Health Care Facility Revenue:
(Colonial Heights Convalescent Center Project)
5.60%, 10/1/2003 205,000 201,505
(Forest Hill Convalescent Center Project):
6%, 10/1/2006 (Prerefunded 10/1/2002) 260,000 (a) 275,051
6.15%, 10/1/2007 (Prerefunded 10/1/2002) 280,000 (a) 297,158
6.25%, 10/1/2008 (Prerefunded 10/1/2002) 115,000 (a) 122,306
(Westport Convalescent Center Project):
5.90%, 10/1/2005 315,000 308,042
6.15%, 10/1/2007 175,000 170,765
6.25%, 10/1/2008 410,000 399,857
Industrial Development Authority of the County of Henrico, SWDR
(Browning-Ferris Industries of South Atlantic, Inc. Project)
5.45%, 1/1/2014 3,500,000 2,897,685
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA (CONTINUED)
Industrial Development Authority of the County of
Prince William, Revenue:
Hospital Facility (Potomac Hospital Corp. of Prince William)
6.85%, 10/1/2025 (Prerefunded 10/1/2005) 1,000,000 (a) 1,102,960
(Potomac Place) 6.25%, 12/20/2027 700,000 718,438
Residential Care Facility (First Mortgage-Westminster
Lake Ridge) 6.625%, 1/1/2026 1,500,000 1,429,755
Industrial Development Authority of the Town of West Point,
SWDR (Chesapeake Corp. Project) 6.375%, 3/1/2019 2,500,000 2,349,975
Isle Wight County Industrial Development Authority,
Solid Waste Disposal Facilities Revenue
(Union Camp Corp. Project) 6.10%, 5/1/2027 3,500,000 3,327,135
Prince William County Park Authority, Revenue
6.875%, 10/15/2016 (Prerefunded 10/15/2004) 3,000,000 (a) 3,258,660
Richmond Metropolitan Authority, Expressway Revenue
5.25%, 7/15/2017 (Insured; FGIC) 3,100,000 2,959,446
Staunton Industrial Development Authority,
Educational Facilities Revenue (Mary Baldwin College)
6.75%, 11/1/2021 3,145,000 3,170,223
University of Virginia, University Revenue 5.75%, 5/1/2021 1,325,000 1,309,868
Upper Occoquan Sewer Authority, Regional Sewer Revenue
5.15%, 7/1/2020 (Insured; MBIA) 2,000,000 1,853,820
Virginia Beach Development Authority, Revenue:
Industrial Development Mortgage (Ramada Oceanside Resort)
8%, 8/1/2010 310,000 321,706
Nursing Home (Sentara Life Care Corp.) 7.75%, 11/1/2021 1,000,000 1,055,710
Virginia Housing Development Authority,
Commonwealth Mortgage:
6.60%, 7/1/2020 1,075,000 1,086,191
5.50%, 1/1/2022 4,245,000 3,945,388
U. S. RELATED--33.2%
Commonwealth of Puerto Rico (Public Improvement):
5.25%, 7/1/2015 (Insured; MBIA) 3,000,000 2,955,090
6.80%, 7/1/2021 (Prerefunded 7/1/2002) 1,000,000 (a) 1,059,720
6%, 7/1/2026 (Prerefunded 7/1/2007) 1,500,000 (a) 1,613,160
Guam Airport Authority, Revenue 6.70%, 10/1/2023 2,000,000 2,024,900
Puerto Rico Electric Power Authority, Power Revenue:
5%, 7/1/2012 (Insured; MBIA) 50,000 48,772
5.003%, 7/1/2012 3,000,000 (b,c) 2,852,730
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U. S. RELATED (CONTINUED)
Puerto Rico Highway and Transportation Authority,
Highway Revenue:
5.50%, 7/1/2015 (Insured; MBIA) 20,000 20,276
6.003%, 7/1/2015 3,990,000 (b) 4,100,244
6.625%, 7/1/2018 (Prerefunded 7/1/2002) 2,000,000 (a) 2,112,280
Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority,
Higher Education Revenue (Ana G. Mendez University
System Project) 5.375%, 2/1/2019 1,500,000 1,344,600
Puerto Rico Ports Authority, Special Facilities Revenue
(American Airlines) 6.25%, 6/1/2026 3,000,000 2,950,530
Virgin Islands Public Finance Authority, Revenue:
Gross Receipts Taxes Loan Note 6.50%, 10/1/2024 3,000,000 3,022,650
Matching Fund Loan Notes 7.25%, 10/1/2018
(Prerefunded 10/1/2002) 4,000,000 (a) 4,317,360
Virgin Islands Water and Power Authority, Electric System
7.40%, 7/1/2011 (Prerefunded 7/1/2001) 1,780,000 (a) 1,854,974
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $85,888,369) 84,210,816
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENT--7.3%
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA:
Dinwidde County Industrial Development Authority,
Exempt Facility Revenue (Chaparral East Project)
VRDN 6.25% (LOC; Bank of America, NA) 1,400,000 (d) 1,400,000
King George Industrial Development Authority,
Exempt Facility Revenue (Birchwood Power Partners
Project) VRDN 6.20% (LOC; Credit Suisse) 3,300,000 (d) 3,300,000
Roanoke Industrial Development Authority, HR
(Carilion Health System) VRDN 5.80% 2,000,000 (d) 2,000,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $6,700,000) 6,700,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $92,588,369) 99.7% 90,910,816
CASH AND RECEIVABLES (NET) .3% 260,505
NET ASSETS 100.0% 91,171,321
Summary of Abbreviations
FGIC Financial Guaranty Insurance
Company
FHA Federal Housing Administration
HR Hospital Revenue
IDR Industrial Development Revenue
LOC Letter of Credit
LR Lease Revenue
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
MFHR Multi-Family Housing Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 30.4
AA Aa AA 9.2
A A A 3.3
BBB Baa BBB 29.7
BB B BB 3.2
F1 MIG1/P1 SP1/A1 7.4
Not Rated(e) Not Rated(e) Not Rated(e) 16.8
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) INVERSE FLOATER SECURITY -- THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT APRIL 30, 2000, THIS
SECURITY AMOUNTED TO $2,852,730 OR 3.1% OF NET ASSETS.
(D) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE -- SUBJECT TO PERIODIC
CHANGE.
(E) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 92,588,369 90,910,816
Interest receivable 1,551,037
Receivable for shares of Beneficial Interest subscribed 22,094
Prepaid expenses 7,502
92,491,449
-------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 70,833
Cash overdraft due to Custodian 1,154,682
Payable for shares of Beneficial Interest redeemed 65,720
Accrued expenses 28,893
1,320,128
--------------------------------------------------------------------------------
NET ASSETS ($) 91,171,321
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 94,900,998
Accumulated net realized gain (loss) on investments (2,052,124)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (1,677,553)
--------------------------------------------------------------------------------
NET ASSETS ($) 91,171,321
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 67,042,720 21,080,930 3,047,671
Shares Outstanding 4,233,148 1,331,354 192,545
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 15.84 15.83 15.83
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 5,976,871
EXPENSES:
Management fee--Note 3(a) 540,481
Shareholder servicing costs--Note 3(c) 314,140
Distribution fees--Note 3(b) 151,739
Registration fees 30,648
Prospectus and shareholders' reports 23,443
Professional fees 20,302
Custodian fees 10,462
Trustees' fees and expenses--Note 3(d) 1,384
Loan commitment fees--Note 2 875
Miscellaneous 11,976
TOTAL EXPENSES 1,105,450
INVESTMENT INCOME--NET 4,871,421
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4($):
Net realized gain (loss) on investments (2,049,473)
Net unrealized appreciation (depreciation) on investments (7,002,802)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (9,052,275)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (4,180,854)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
-------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 4,871,421 5,023,622
Net realized gain (loss) on investments (2,049,473) 1,384,592
Net unrealized appreciation (depreciation)
on investments (7,002,802) (350,457)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (4,180,854) 6,057,757
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (3,555,627) (3,225,635)
Class B shares (1,183,931) (1,688,611)
Class C shares (131,863) (109,376)
Net realized gain on investments:
Class A shares (14,353) (884,913)
Class B shares (4,898) (533,711)
Class C shares (521) (37,805)
TOTAL DIVIDENDS (4,891,193) (6,480,051)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 13,520,146 12,134,539
Class B shares 2,450,891 4,716,025
Class C shares 1,029,974 1,520,409
Dividends reinvested:
Class A shares 1,781,475 2,193,747
Class B shares 610,636 1,198,045
Class C shares 33,411 21,422
Cost of shares redeemed:
Class A shares (13,581,470) (7,521,104)
Class B shares (14,374,110) (10,983,245)
Class C shares (939,870) (326,419)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (9,468,917) 2,953,419
TOTAL INCREASE (DECREASE) IN NET ASSETS (18,540,964) 2,531,125
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 109,712,285 107,181,160
END OF PERIOD 91,171,321 109,712,285
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
--------------------------------
2000 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 819,840 694,996
Shares issued for dividends reinvested 110,040 125,125
Shares redeemed (834,478) (429,470)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 95,402 390,651
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 149,838 269,387
Shares issued for dividends reinvested 37,644 68,334
Shares redeemed (873,486) (629,062)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (686,004) (291,341)
--------------------------------------------------------------------------------
CLASS C
Shares sold 64,286 86,730
Shares issued for dividends reinvested 2,071 1,224
Shares redeemed (58,119) (18,602)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 8,238 69,352
A DURING THE PERIOD ENDED APRIL 30, 2000, 471,244 CLASS B SHARES REPRESENTING
$7,723,625 WERE AUTOMATICALLY CONVERTED TO 471,274 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended April 30,
-----------------------------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 17.31 17.37 16.61 16.27 16.03
Investment Operations:
Investment income--net .83 .85 .88 .94 .93
Net realized and unrealized
gain (loss) on investments (1.47) .17 .76 .34 .24
Total from Investment Operations (.64) 1.02 1.64 1.28 1.17
Distributions:
Dividends from investment income--net (.83) (.85) (.88) (.94) (.93)
Dividends from net realized gain
on investments (.00)(a) (.23) (.00)(a) -- --
Total Distributions (.83) (1.08) (.88) (.94) (.93)
Net asset value, end of period 15.84 17.31 17.37 16.61 16.27
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (3.65) 5.98 10.05 8.02 7.32
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .97 .92 .75 .39 .50
Ratio of net investment income
to average net assets 5.12 4.83 5.10 5.67 5.58
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation -- -- .14 .55 .55
Portfolio Turnover Rate 31.63 30.19 21.25 45.29 50.06
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 67,043 71,612 65,086 61,099 61,149
(A) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(B) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
-----------------------------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 17.31 17.37 16.60 16.27 16.03
Investment Operations:
Investment income--net .75 .76 .79 .86 .84
Net realized and unrealized
gain (loss) on investments (1.48) .17 .77 .33 .24
Total from Investment Operations (.73) .93 1.56 1.19 1.08
Distributions:
Dividends from investment income--net (.75) (.76) (.79) (.86) (.84)
Dividends from net realized gain
on investments (.00)(a) (.23) (.00)(a) -- --
Total Distributions (.75) (.99) (.79) (.86) (.84)
Net asset value, end of period 15.83 17.31 17.37 16.60 16.27
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (4.21) 5.44 9.56 7.41 6.77
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.48 1.43 1.26 .90 1.01
Ratio of net investment income
to average net assets 4.59 4.32 4.58 5.15 5.06
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation -- -- .14 .55 .55
Portfolio Turnover Rate 31.63 30.19 21.25 45.29 50.06
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 21,081 34,912 40,100 35,787 33,120
(A) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(B) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS (CONTINUED)
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
-----------------------------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 17.30 17.36 16.60 16.26 16.17
Investment Operations:
Investment income--net .71 .72 .75 .81 .57
Net realized and unrealized
gain (loss) on investments (1.47) .17 .76 .34 .09
Total from Investment Operations (.76) .89 1.51 1.15 .66
Distributions:
Dividends from investment income--net (.71) (.72) (.75) (.81) (.57)
Dividends from net realized gain
on investments (.00)(b) (.23) (.00)(b) -- --
Total Distributions (.71) (.95) (.75) (.81) (.57)
Net asset value, end of period 15.83 17.30 17.36 16.60 16.26
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) (4.37) 5.19 9.22 7.18 5.64(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.70 1.66 1.54 1.17 1.21(d)
Ratio of net investment income
to average net assets 4.37 4.06 4.24 4.83 4.55(d)
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation -- -- .11 .54 .52(d)
Portfolio Turnover Rate 31.63 30.19 21.25 45.29 50.06
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 3,048 3,188 1,996 674 166
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(C) EXCLUSIVE OF SALES CHARGE.
(D) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the Virginia Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. 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. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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 shares. 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
share 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. Class B shares automatically convert to Class A shares after six
years. Other differences between the classes include the services offered to
and the expenses borne by each Class and certain voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each fund are charged to that series'
operations; expenses which are applicable to all series are allocated among them
on a pro rata basis.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumption. Actual results could differ from those estimates.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 ("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 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 receives net earnings credits based on available cash
balances left on deposit.
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 $423,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 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 period ended April 30,
2000, the fund did not borrow under the Facility.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 had undertaken from May 1,
1999 to April 30, 2000 to reduce the management fee paid by the fund, to the
extent that the fund' s aggregate expenses, exclusive of taxes, brokerage
commission, interest on borrowings, Distribution Plan fees, commitment fees and
extraordinary expenses, exceed an annual rate of 1% of the value of the fund's
average daily net assets.
DSC retained $3,983 during the period ended April 30, 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 April 30, 2000, Class B and
Class C shares were charged $129,096 and $22,643, respectively, pursuant to the
Plan, of which $11,684 and $2,501, for Class B and Class C shares, respectively,
were paid to DSC.
(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 April 30, 2000, Class A, Class B and Class C
shares were charged $173,577, $64,548 and $7,548, respectively, pursuant to the
Shareholder Services Plan, of which $18,411, $5,842 and $834, for Class A, Class
B and Class C shares, respectively, were 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 $47,416 pursuant to the transfer
agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member receives an annual fee of $50,000 and a fee of $6,500 for each
meeting held in person 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 13, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the Trust
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 Director Emeritus Program Guidelines, Emeritus Board members, if any,
receive 50% of the Trust's annual retainer fee and per meeting fee paid at the
time the Board member achieved emeritus status.
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
$30,163,494 and $45,944,296, respectively.
At April 30, 2000, accumulated net unrealized depreciation on investments was
$1,677,553, consisting of $1,601,749 gross unrealized appreciation and
$3,279,302 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).
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees Dreyfus Premier State Municipal Bond Fund,
Virginia Series
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier State Municipal Bond Fund,
Virginia Series (one of the Funds constituting the Dreyfus Premier State
Municipal Bond Fund) 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 the 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 Premier State Municipal Bond Fund, Virginia Series 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 9, 2000
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended April 30, 2000:
-- all the dividends paid from investment income-net are "exempt
-interest dividends" (not subject to regular Federal and, for individuals
who are Virginia residents, Virginia personal income taxes), and
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.
The Fund
For More Information
Dreyfus Premier State Municipal Bond Fund, Virginia
Series
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 066AR004
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