Strategic
Municipals, Inc.
Semi-Annual
Report
March 31, 1995
LETTER TO SHAREHOLDERS
Dear Shareholder:
The Fund's net asset value per share and its market value per share have
improved since our last letter was written in October of 1994. At the close
of the semi-annual period on March 31, 1995, they were $9.86 and $10 1/8,
respectively. Income dividends of $.366 per share were paid during the
six-month period. This equates to a 7.23% annualized distribution rate, based
on the closing New York Stock Exchange price of $10 1/8. We are pleased to
report that all income dividends paid during the period were exempt from
Federal income tax.*
After hitting a low point for the year in the last quarter of 1994, the
fixed income markets recovered in the first quarter of 1995. The price
improvement centered around what was seen as a slowing economy, which
lessened the need for further interest rate increases by the Federal Reserve
Board. The municipal bond market continues to see current price levels
sustained by economic data that suggest the economy is slowing even further.
Also helping to support prices is the lack of new issuance. In the first
three months of 1995, only 54% as much new money was raised as in 1994's
first quarter. While supply has diminished, demand has remained fairly
constant.
We expect that long-term interest rates will remain within a narrow band
for the next few months. From a global perspective, economies outside the
U.S. also need funds to fuel their own expansions. As in the U.S., various
foreign governments are continually borrowing money by issuing bonds and,
generally, this can prop rates up. On the other hand, inflation in this
country appears to be under control, and it is difficult now to see what
would force rates to move substantially higher in the near term.
Dreyfus Strategic Municipals' portfolio consists of many relatively
high-coupon bonds and we expect that the issuers of those obligations are
anxious to retire them as soon as financially feasible. By means of a
sinking-fund or other redemption provisions contained in the bonds'
indentures, some of the portfolio's holdings have been taken, and probably
others will be in the future. In addition, the portfolio contains bonds which
we list as nonincome-producing securities in the Statement of Investments
contained later in this report.
We think that 1995 could be a good year for the municipal market, based
on the aforementioned lack of supply and the absence of strong inflationary
pressures. We greatly appreciate your investment in the Fund and look forward
to serving your investment needs in the future.
Very truly yours,
(Richard J. Moynihan Signature Logo)
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
April 13, 1995
New York, N.Y.
*Income may be subject to state and local taxes. Some income may be
subject to the Federal Alternative Minimum Tax (AMT) for certain
shareholders.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPALS, INC.
STATEMENT OF INVESTMENTS MARCH 31, 1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-99.9% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
ARIZONA-3.4%
Phoenix Industrial Development Authority, Revenue (Christian Care Retirement
Apartments)
10.25%, 1/1/2018........................................................ $ 9,650,000 $ 9,872,722
Tempe Industrial Development Authority, IDR (California Micro Devices Corp.
Project)
10.50%, 3/1/2018........................................................ 7,630,000 8,436,872
ARKANSAS-1.8%
Fayetteville Public Facilities Board, Revenue, Refunding (Butterfield Trail
Village Project):
8.25%, 9/1/2000......................................................... 1,475,000 1,478,525
9.50%, 9/1/2014......................................................... 7,785,000 8,420,957
COLORADO-7.3%
Bent County, COP (Medium Security Correctional Facility Project) 9.50%, 7/15/2013 14,330,000 14,910,222
Colorado Post-Secondary Educational Facilities Authority, Revenue
(University of Denver Project) 9%, 12/1/2007 (Prerefunded 12/1/1997) (a) 6,100,000 6,858,962
City and County of Denver, Airport Revenue:
8.50%, 11/15/2023....................................................... 11,500,000 12,384,005
8%, 11/15/2025.......................................................... 5,000,000 5,231,150
FLORIDA-10.3%
Escambia County, PCR (Champion International Corp. Project)
6.90%, 8/1/2022......................................................... 7,000,000 7,159,250
Florida Board of Education, Capital Outlay 8.195%, 6/1/2019 (b,c)........... 20,000,000 21,275,000
Florida Housing Finance Agency, MFHR (Palm Aire) 10%, 1/1/2020 (d).......... 4,960,794 3,323,733
Indian Trace Community Development District (Basin 1 Water Management Special
Benefit):
9.25%, 5/1/2002 (Prerefunded 5/1/1997) (a).............................. 4,050,000 4,489,182
8.75%, 5/1/2007 (Prerefunded 5/1/1997) (a).............................. 6,000,000 6,591,720
Leon County Educational Facilities Authority, COP (Southgate Residence Hall
Project):
3.75%, 12/1/1995 (e).................................................... 247,560 49,512
9%, 9/1/2014 (d,e)...................................................... 5,000,000 1,000,000
Palm Beach County, Solid Waste IDR:
(Okeelanta Power Limited Partnership Project)
6.70%, 2/15/2015...................................................... 3,000,000 2,869,830
(Osceola Power Limited Partnership Project)
6.95%, 1/1/2022....................................................... 9,150,000 8,857,657
GEORGIA-4.2%
Atlanta Urban Residential Finance Authority, Residential Housing Revenue
(Carter Hall Project) 8.50%, 1/1/2018................................... 10,900,000 11,112,550
Private Colleges and Universities Facilities Authority, Revenue,
Refunding (Clark Atlanta University Project) 8.25%, 1/1/2015............ 11,000,000 11,937,530
HAWAII-1.1%
Hawaii Department of Transportation, Special Facility Revenue
(Caterair International Corp. Project) 10.125%, 12/1/2010............... 5,800,000 6,005,900
DREYFUS STRATEGIC MUNICIPALS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
IDAHO-.4%
Idaho Health Facilities Authority, Revenue (Bannock County Nursing Lease
Agreement)
9.23%, 4/1/2003 (Prerefunded 5/1/1995) (a)............................. $ 2,318,000 $ 2,327,250
ILLINOIS-8.5%
Chicago O'Hare International Airport, Special Facilities Revenue
(United Airlines Inc. Project) 8.95%, 5/1/2018.......................... 9,736,000 10,765,485
Illinois Health Facilities Authority, Revenue, Refunding
(Ravenswood Hospital Medical Center Project) 8.80%, 6/1/2006............ 8,000,000 8,671,840
Robbins, RRR (Robbins Resource Recovery Partners):
9.25%, 10/15/2014....................................................... 13,300,000 14,435,953
9.25%, 10/15/2016....................................................... 5,700,000 6,186,837
Saint Clair County, East Saint Louis School District No. 189 9%, 11/1/2006.. 5,500,000 6,078,160
INDIANA-.9%
Terre Haute, SWDR (International Minerals and Chemicals Corp.)
8.70%, 3/15/2003........................................................ 4,200,000 4,606,770
KENTUCKY-4.0%
Kenton County Airport Board,
(Special Facilities-Delta Airlines Project) 7.50%, 2/1/2020............. 10,000,000 10,270,900
Kentucky Development Finance Authority, Hospital Improvement Revenue,
Refunding
(Ashland Hospital-Kings Project):
9.75%, 8/1/2005....................................................... 5,000,000 5,648,250
9.75%, 8/1/2011....................................................... 3,000,000 3,431,640
9.875%, 2/1/2012 (Prerefunded 2/1/1998) (a)........................... 2,000,000 2,302,340
LOUISIANA-4.3%
East Baton Rouge Sewage Commission, Sewer Revenue
9.25%, 9/1/2012 (Prerefunded 9/1/1997) (a).............................. 11,425,000 12,907,851
Saint James Parish, SWDR (Freeport-McMoRan Partnership Project)
7.70%, 10/1/2022........................................................ 10,000,000 10,080,200
MAINE-.7%
Maine Health and Higher Educational Facilities Authority, Revenue
(Waterville Osteopathic Hospital Project)
9.875%, 7/1/2013 (Prerefunded 7/1/1997) (a)............................. 3,100,000 3,512,734
MARYLAND-.5%
Baltimore County, PCR,
Refunding (Bethlehem Steel Corp. Project) 7.50%, 6/1/2015............... 2,500,000 2,541,175
MASSACHUSETTS-.5%
Massachusetts Health and Educational Facilities Authority, Revenue,
Refunding (Beth Israel Hospital Issue) 7.965%, 7/1/2025 (Insured; AMBAC) (b) 3,000,000 2,850,000
DREYFUS STRATEGIC MUNICIPALS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
MICHIGAN-6.7%
Greater Detroit Resource Recovery Authority, Revenue:
9.25%, Series A, 12/13/2008............................................. $ 5,200,000 $ 5,463,692
9.25%, Series C, 12/13/2008............................................. 4,100,000 4,307,911
9.25%, Series G, 12/13/2008............................................. 9,585,000 10,071,055
9.25%, Series H, 12/13/2008............................................. 8,920,000 9,372,333
Michigan Hospital Finance Authority HR,
Refunding (Genesys Health System Obligated Group) 8.125%, 10/1/2021..... 5,000,000 5,205,300
Michigan Strategic Fund, SWDR, Refunding (Genesee Power Station Project)
7.50%, 1/1/2021......................................................... 2,000,000 1,971,620
MISSISSIPPI-2.6%
Claiborne County, PCR (Middle South Energy Inc.):
9.50%, 12/1/2013........................................................ 2,000,000 2,276,060
9.875%, 12/1/2014....................................................... 10,180,000 11,709,036
NEVADA-.8%
Clark County, IDR (Southwest Gas Corp.) 7.50%, 9/1/2032..................... 4,000,000 4,119,200
NEW HAMPSHIRE-1.0%
New Hampshire Industrial Development Authority, PCR (United Illumination Co.
Project)
9.375%, 7/1/2012........................................................ 4,950,000 5,471,383
NEW JERSEY-3.2%
New Jersey Health Care Facilities Financing Authority, Revenue
(Christian Health Care Center) 8.75%, 7/1/2018 (Insured; MBIA).......... 16,810,000 17,380,027
NEW YORK-4.6%
Housing Corp. of New York, Revenue 9%, 11/1/2017 (Prerefunded 11/1/1997) (a) 12,400,000 13,924,580
New York City Municipal Water Finance Authority, Water and Sewer System
Revenue
9%, 6/15/2017 (Prerefunded 6/15/1997) (a)............................... 10,000,000 11,092,500
OHIO-3.1%
Ohio Air Quality Development Authority, Revenue (Dayton Power and Light Co.
Project)
9.50%, 12/1/2015........................................................ 12,000,000 12,604,920
Springdale Hospital Facilities, First Mortgage Revenue
(Southwestern Ohio Seniors' Services, Inc.) 6%, 11/1/2023............... 5,000,000 4,281,950
OKLAHOMA-3.3%
Tulsa Municipal Airport Trust, Revenue (American Airlines) 9.50%, 6/1/2020.. 17,045,000 17,899,466
PENNSYLVANIA-9.6%
Beaver County Industrial Development Authority, PCR
(Cleveland Electric Illumination Co. Project)
11.125%, 11/15/2014..................................................... 7,400,000 7,660,184
Butler County Industrial Development Authority, First Mortgage Revenue
(Saint John Lutheran Care Center):
9.75%, Series A, 10/1/1998............................................ 600,000 658,788
Refunding, 10%, Series A1, 10/1/2017.................................. 8,450,000 9,259,341
Refunding, 10%, Series A2, 10/1/2017.................................. 940,000 1,030,033
Cambria County Hospital Development Authority, HR, Refunding
(Conemaugh Valley Memorial Hospital) 8.875%, 7/1/2018................... 7,000,000 7,650,720
DREYFUS STRATEGIC MUNICIPALS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
PENNSYLVANIA (CONTINUED)
Montgomery County Industrial Development Authority, First Mortgage Revenue
(Meadowood Corp. Project):
8.25%, 12/1/2018...................................................... $ 3,750,000 $ 3,741,563
Zero Coupon, 12/1/2020................................................ 225,187 18,375
10.25%, 12/1/2020..................................................... 5,000,000 5,419,000
Pennsylvania Housing Finance Agency, SFMR 8.059%, 4/1/2025 (b).............. 6,000,000 5,415,000
Philadelphia Hospitals and Higher Education Facilities Authority, Revenue
(Northwestern Corp.) 8.50%, 6/1/2016.................................... 5,200,000 5,526,300
Schuykill County Industrial Development Authority, RRR, Refunding
(Schuykill Energy Resources Inc.) 6.50%, 1/1/2010....................... 5,665,000 5,401,181
SOUTH CAROLINA-2.6%
South Carolina Housing Authority, Homeownership Mortgage Revenue 9%, 7/1/2018 5,555,000 5,952,405
Spartanburg County, Hospital Facilities Revenue (Spartanburg General Hospital
System)
8.401%, 4/13/2022 (b)................................................... 7,700,000 7,921,375
TENNESSEE-1.4%
Gatlinburg, COP (Gatlinburg Convention Center Inc.)
9.25%, 12/1/2012 (Prerefunded 12/1/1997) (a)............................ 6,715,000 7,658,726
TEXAS-7.3%
Harris County Health Facilities Development Corp., HR (Hermann Trust)
9%, 10/1/2017 (Prerefunded 10/1/1997) (a)............................... 15,000,000 16,775,550
Port of Corpus Christi Industrial Development Corp., Revenue
(Valero Refinancing and Marketing Co.) 10.25%, 6/1/2017................. 6,450,000 7,227,483
Texas Department of Housing and Community Affairs, Home Mortgage Revenue,
Refunding:
6.90%, 7/2/2024 (b)................................................... 6,000,000 6,215,160
9.313%, 7/2/2024 (b).................................................. 2,500,000 2,678,125
Texas Housing Agency, SFMR 9.375%, 9/1/2016................................. 3,685,000 3,794,518
Tyler Health Facilities Development Corp., HR, Refunding (East Texas Medical
Center Regional Healthcare System Project) 6.75%, 11/1/2025.................... 3,000,000 2,798,940
UTAH-2.0%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration) 9.25%, 7/1/2018..... 10,000,000 10,812,700
VIRGINIA-.8%
Fairfax County Water Authority, Revenue 6.697%, 4/1/2029 (b,c).............. 5,000,000 4,443,750
WISCONSIN-1.8%
Wisconsin Housing and Economic Development Authority, Home Ownership Revenue
8.395%, 7/1/2025 (b,c).................................................. 10,000,000 9,600,000
WYOMING-.4%
Sweetwater County, SWDR (FMC Corp. Project)
7%, 6/1/2024............................................................ 2,200,000 2,225,168
DREYFUS STRATEGIC MUNICIPALS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
U.S. RELATED-.8%
Commonwealth of Puerto Rico Highway and Transportation Authority, Highway
Revenue
6.306%, 7/1/2008 (b).................................................... $ 4,700,000 $ 4,253,500
--------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $517,205,387)..................................................... $540,171,582
==============
SHORT-TERM MUNICIPAL INVESTMENT-.1%
WASHINGTON
Washington Public Power Supply Systems, Revenue
(Nuclear Project Number 2) 3.65% (b) (cost $200,000).................... $ 200,000 $ 200,000
==============
TOTAL INVESTMENTS-100.0%
(cost $517,405,387)..................................................... $540,371,582
==============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MFHR Multi-Family Housing Revenue
COP Certificate of Participation PCR Pollution Control Revenue
HR Hospital Revenue RRR Resource Recovery Revenue
IDR Industrial Development Revenue SFMR Single Family Mortgage Revenue
MBIA Municipal Bond Investors Assurance SWDR Solid Waste Disposal Revenue
Insurance Corporation
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS
FITCH (f) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- --------- -------------------- -----------------------
<S> <C> <C> <C>
AAA Aaa AAA 15.0%
AA Aa AA 11.7
A A A 4.3
BBB Baa BBB 27.2
BB Ba BB 3.3
Not Rated (g) Not Rated (g) Not Rated (g) 38.5
--------
100.0%
========
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(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) Residual interest security-the interest rate is subject to change
periodically.
(c) Security 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 March 31,
1995, these securities amounted to $35,318,750 or 6.4% of net assets.
(d) Non-income producing security; interest payment in default.
(e) The valuation of this security has been determined in good faith
under the direction of the Board of Directors.
(f) Fitch currently provides creditworthiness information for a limited
number of investments.
(g) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's, have been determined by the Fund's Board of Directors to be of
comparable quality to those rated securities in which the Fund may
invest.
(h) At March 31, 1995 the Fund had $136,183,520 (24.7% of net assets)
invested in securities whose payment of principal and interest is
dependent upon revenues generated from health care projects.
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPALS, INC.
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $517,405,387)-see statement..................................... $540,371,582
Interest receivable..................................................... 13,126,899
--------------
553,498,481
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 348,443
Due to Custodian........................................................ 2,235,978
Accrued expenses........................................................ 301,300 2,885,721
------------- --------------
NET ASSETS ................................................................ $550,612,760
==============
REPRESENTED BY:
Paid-in capital......................................................... $528,594,764
Accumulated undistributed investment income-net......................... 2,653,683
Accumulated net realized (loss) on investments.......................... (3,601,882)
Accumulated net unrealized appreciation on investments-Note 3........... 22,966,195
--------------
NET ASSETS at value applicable to 55,860,558 outstanding shares of
Common Stock, equivalent to $9.86 per share (500 million shares of
$.001 par value authorized)............................................. $550,612,760
==============
STATEMENT OF OPERATIONS SIX MONTHS ENDED MARCH 31, 1995 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME......................................................... $22,097,477
EXPENSES:
Management fee-Note 2(a).............................................. $ 1,993,225
Shareholder servicing costs........................................... 139,798
Shareholders' reports................................................. 94,616
Professional fees..................................................... 47,257
Custodian fees........................................................ 36,918
Directors' fees and expenses-Note 2(b)................................ 28,421
Registration fees..................................................... 13,364
Miscellaneous......................................................... 17,625
-------------
TOTAL EXPENSES.................................................... 2,371,224
------------
INVESTMENT INCOME-NET............................................. 19,726,253
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $ (3,530,830)
Net unrealized appreciation on investments.............................. 11,408,169
-------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 7,877,339
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $27,603,592
============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPALS, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
SEPTEMBER 30, MARCH 31, 1995
1994 (UNAUDITED)
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................ $ 40,062,843 $ 19,726,253
Net realized (loss) on investments................................... (71,003) (3,530,830)
Net unrealized appreciation (depreciation) on investments for the period (38,368,269) 11,408,169
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... 1,623,571 27,603,592
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net................................................ (39,310,582) (20,367,463)
Net realized gain on investments..................................... (853,824) --
-------------- --------------
TOTAL DIVIDENDS.................................................... (40,164,406) (20,367,463)
-------------- --------------
CAPITAL STOCK TRANSACTIONS;
Dividends reinvested-Note 1(c)....................................... 14,075,111 2,252,977
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................ (24,465,724) 9,489,106
NET ASSETS:
Beginning of period.................................................. 565,589,378 541,123,654
-------------- --------------
End of period (including undistributed investment income-net:
$3,294,893 in 1994 and $2,653,683 in 1995)......................... $541,123,654 $550,612,760
============== ==============
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS;
INCREASE IN SHARES OUTSTANDING AS A RESULT OF DIVIDENDS REINVESTED... 1,384,461 231,202
============== ==============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPALS, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the financial statements and market price
data for the Fund's shares.
YEAR ENDED SEPTEMBER 30, SIX MONTHS ENDED
------------------------------------------ MARCH 31, 1995
PER SHARE DATA: 1990 1991 1992 1993 1994 (UNAUDITED)
------ ------ ------ ------ ------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 9.97 $ 9.79 $ 9.96 $10.10 $10.43 $ 9.73
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income--net.................. .78 .78 .75 .75 .73 .35
Net realized and unrealized gain (loss)
on investments........................ (.15) .27 .17 .31 (.69) .15
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS...... .63 1.05 .92 1.06 .04 .50
------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income--net... (.76) (.76) (.75) (.73) (.72) (.37)
Dividends from net realized gain
on investments...................... (.05) (.12) (.03) -- (.02) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................... (.81) (.88) (.78) (.73) (.74) (.37)
------ ------ ------ ------ ------ ------
Net asset value, end of period.......... $ 9.79 $ 9.96 $10.10 $10.43 $ 9.73 $ 9.86
====== ====== ====== ====== ====== ======
Market Value, end of period............. $10 $10 1/2 $10 5/8 $11 1/8 $ 9 7/8 $10 1/8
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(1).................. 1.98% 14.80% 9.14% 12.40% (4.63%) 13.08%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets. .89% .88% .88% .87% .86% .89%(2)
Ratio of net investment income to
average net assets.................... 7.94% 7.99% 7.56% 7.40% 7.24% 7.42%(2)
Portfolio Turnover Rate................. 10.51% 6.43% 21.80% 11.59% 4.85% 7.78%(3)
Net Assets, end of year (000's Omitted). $482,515 $510,120 $533,151 $565,589 $541,124 $550,613
- --------------
(1) Calculated based on market value.
(2) Annualized.
(3) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS STRATEGIC MUNICIPALS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified closed-end management investment company. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A.
(A) PORTFOLIO VALUATION: Investments in municipal debt securities
(excluding options and financial futures on municipal and U.S. treasury
securities) are valued on the last business day of each week and month by an
independent pricing service ("Service") approved by the Board of Directors.
Investments for which quoted bid prices are readily available and are
representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the
Service from dealers in such securities) and asked prices (as calculated by
the Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio securities)
are carried at fair value as determined by the Service, based on methods
which include consideration of: yields or prices of municipal securities of
comparable quality, coupon, maturity and type; indications as to values from
dealers; and general market conditions. 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 the last business
day of each week and month. 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.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid monthly.
Dividends from net realized capital gains, if any, are normally declared and
paid at least annually. 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.
For shareholders who elect to receive their distributions in additional
shares of the Fund, in lieu of cash, such distributions will be reinvested at
the lower of the market price or net asset value per share (but not less than
95% of the market price) based on the record date's respective prices. If the
net asset value per share on the record date is lower than the market price
per share, shares will be issued by the Fund at the record date's net asset
value on the payable date of the distribution. If the net asset value per
share is less than 95% of market value, shares will be issued by the Fund at
95% of market value. If the market price is lower than the net asset value
per share on the record date, The Bank of New York will purchase Fund shares
in the open market commencing on the payable date, and reinvest those shares
accordingly. As a result of purchasing Fund shares in the open market, Fund
shares outstanding will not be affected by this form of reinvestment.
On March 30, 1995, the Board of Directors declared a cash dividend of
$.061 per share from investment income-net, payable on April 28, 1995 to
shareholders of record as of the close of business on April 13, 1995.
DREYFUS STRATEGIC MUNICIPALS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
(D) QUARTERLY RESULTS OF OPERATIONS:
NET INCREASE
NET REALIZED & (DECREASE)
UNREALIZED IN NET ASSETS
TOTAL INVESTMENT NET INVESTMENT GAIN (LOSS) RESULTING FROM
INCOME INCOME ON INVESTMENTS OPERATIONS
---------------- ---------------- ---------------- ----------------
(000'S) PER (000'S) PER (000'S) PER (000'S) PER
QUARTER ENDED OMITTED SHARE OMITTED SHARE OMITTED SHARE OMITTED SHARE
- ------------- ------- ----- ------- ----- ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1993............. $11,425 $0.21 $10,188 $0.18 $(2,944) $(0.05) $ 7,244 $ 0.13
March 31, 1994................ 11,508 0.21 10,348 0.19 (26,084) (0.47) (15,736) (0.28)
June 30, 1994................. 10,871 0.20 9,691 0.18 (2,721) (0.05) 6,970 0.13
September 30, 1994............ 11,002 0.20 9,836 0.18 (6,690) (0.12) 3,146 0.06
------- ----- ------- ----- ------- ----- ------- -----
TOTAL................... $44,806 $0.82 $40,063 $0.73 $(38,439) $(0.69) $ 1,624 $ 0.04
======= ===== ======= ===== ======= ===== ======= =====
December 31, 1994............. $11,035 $0.20 $ 9,873 $0.18 $(13,953) $(0.25) $(4,080) $(0.07)
March 31, 1995................ 11,062 0.19 9,853 0.17 21,830 0.40 31,683 0.57
------- ----- ------- ----- ------- ----- ------- -----
TOTAL................... $22,097 $0.39 $19,726 $0.35 $ 7,877 $0.15 $27,603 $0.50
======= ===== ======= ===== ======= ===== ======= =====
</TABLE>
(E) 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 Internal
Revenue 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 $12,700
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to September 30, 1994. The
carryover does not include net realized securities losses from November 1,
1993 through September 30, 1994 which are treated, for Federal income tax
purposes, as arising in fiscal 1995. If not applied, the carryover expires in
fiscal 2002.
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .75 of 1% of the average
weekly value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings, brokerage and
extraordinary expenses, in any full fiscal year exceed the lesser of (1) the
expense limitation of any state having jurisdiction over the Fund or (2) 2%
of the first $10 million, 1 1/2% of the next $20 million and 1% of the excess
over $30 million of the average value of the Fund's net assets. There was no
expense reimbursement for the six months ended March 31, 1995.
(B) Prior to August 24, 1994, certain officers and directors, and prior
to February 1, 1995, certain officers, of the Fund were "affiliated persons,"
as defined in the Act, of the Manager and/or Dreyfus Service Corporation.
Each director who is not an "affiliated person" receives an annual fee of
$4,500 and an attendance fee of $500 per meeting. The Chairman of the Board
receives an additional 25% of such compensation and the Director Emeritus
receives 50% of such compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $89,346,410 and $85,247,732, respectively, for the six months
ended March 31, 1995, and consisted entirely of long-term and short-term
municipal investments.
At March 31, 1995, accumulated net unrealized appreciation on investments
was $22,966,195, consisting of $32,501,183 gross unrealized appreciation and
$9,534,988 gross unrealized depreciation.
At March 31, 1995 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).
DREYFUS STRATEGIC MUNICIPALS, INC.
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS STRATEGIC MUNICIPALS, INC.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Strategic Municipals, Inc., including the statement of investments,
as of March 31, 1995, and the related statements of operations and changes in
net assets and financial highlights for the six month period ended March 31,
1995. These financial statements and financial highlights are the
responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
September 30, 1994 and financial highlights for each of the five years in the
period ended September 30, 1994 and in our report dated November 9, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst and Young Signature)
New York, New York
May 8, 1995
OFFICERS AND DIRECTORS
DREYFUS STRATEGIC MUNICIPALS, INC.
200 Park Avenue
New York, NY 10166
DIRECTORS
David W. Burke
Hodding Carter, III
Joseph S. DiMartino
Ehud Houminer
Richard C. Leone
Hans C. Mautner
Robin A. Smith
John E. Zuccotti
OFFICERS
President and Treasurer
Marie E. Connolly
Vice President and Secretary
John E. Pelletier
Vice President and Assistant Treasurer
Frederick C. Dey
Vice President and Assistant Secretary
Eric B. Fischman
Assistant Treasurer
John J. Pyburn
Assistant Treasurer
Joseph F. Tower, III
Assistant Secretary
Paul D. Furcinito
Assistant Secretary
Ruth Leibert
PORTFOLIO MANAGERS
Joseph P. Darcy
A. Paul Disdier
Karen M. Hand
Stephen C. Kris
Richard J. Moynihan
Jill C. Shaffro
L. Lawrence Troutman
Samuel J. Weinstock
Monica S. Wieboldt
INVESTMENT ADVISER
The Dreyfus Corporation
CUSTODIAN
Boston Safe Deposit and Trust Company
COUNSEL
Stroock & Stroock & Lavan
TRANSFER AGENT,
DIVIDEND DISTRIBUTION AGENT
AND REGISTRAR
The Bank of New York
STOCK EXCHANGE LISTING
NYSE Symbol: LEO
INITIAL SEC EFFECTIVE DATE
9/23/87
The Net Asset Value appears in the
following publications: Barron's,
Closed-End Bond Funds section
under the heading "Municipal
Bond Funds" every Monday; Wall
Street Journal, Mutual Funds
section under the heading
"Closed-End Bond Funds" every
Monday; New York Times,
Business section under the
heading "Closed-End Bond Funds"
every Monday.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may purchase shares of its
common stock in the open market when it can do so at prices below the then
current net asset value per share.
(Dreyfus Lion "D" Logo)
DREYFUS STRATEGIC MUNICIPALS, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Boston Safe Deposit and
Trust Company
One Boston Place
Boston, MA 02108
TRANSFER AGENT,
DIVIDEND DISTRIBUTION AGENT &
REGISTRAR
The Bank of New York
101 Barclay Street
New York, NY 10286
Printed in U.S.A. 970SA953
