Dreyfus Strategic Municipals, Inc.
ANNUAL REPORT
September 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 Selected Information
7 Statement of Investments
16 Statement of Assets and Liabilities
17 Statement of Operations
18 Statement of Changes in Net Assets
19 Financial Highlights
20 Notes to Financial Statements
24 Report of Independent Auditors
25 Dividend Reinvestment and Cash Purchase Plan
27 Important Tax Information
28 Proxy Results
33 Officers & Directors
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Strategic Municipals, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Strategic Municipals,
Inc., covering the 12-month period from October 1, 1999 through September 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.
Despite some fluctuations due to changing economic conditions, municipal bond
prices rose modestly over the past 12 months. Most of those gains were achieved
after January 2000, with a rally in the municipal bond market. More recently,
most sectors of the municipal bond market also benefited from slowing economic
growth. Additionally, the moderating effects of the Federal Reserve Board's (the
" Fed" ) interest-rate hikes during the first half of 2000 helped the Fed to
achieve its goal of slowing the U.S. economy. Other factors such as higher
energy prices and a weak euro also served to slow economic growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent, the relative stability and
income potential of municipal bonds can make them an attractive investment as
part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com
Thank you for investing in Dreyfus Strategic Municipals, Inc.
Sincerely,
Stephen E. Canter
resident and Chief Investment Officer
The Dreyfus Corporation
October 16, 2000
DISCUSSION OF FUND PERFORMANCE
Paul Disdier, Portfolio Manager
How did Dreyfus Strategic Municipals, Inc. perform during the period?
The fund produced a 6.76% total return over the 12-month reporting period ended
September 30, 2000.(1) In addition, the fund provided income dividends of
$0.5520 per share, which is equal to a distribution rate of 6.44% over the same
period.(2)
We believe that the fund's yield performance provided a competitive level of
current income. We have also generally been pleased with the fund's ability to
take advantage of municipal bond market rallies during the second half of the
reporting period. Our second-half performance more than offset the fund's
lackluster total returns during the first half of the reporting period, when the
municipal bond market generally declined.
What is the fund's investment approach?
The fund seeks high current federally tax-exempt income from a diversified
portfolio of long-term municipal bonds.
To this end, we currently have constructed a portfolio by seeking income
opportunities through analysis of each bond's structure, including paying close
attention to each bond's yield, maturity and early redemption features.
Over time, many of the fund's relatively higher yielding bonds mature or are
redeemed by their issuers and we generally attempt to replace those bonds with
comparable securities. When we believe an opportunity exists, we also seek to
upgrade the fund with newly issued bonds that, in our opinion, have better
structural or income characteristics than existing holdings. When such
opportunities arise, we usually will look to sell bonds that are close to
redemption or maturity, a strategy designed to help protect the fund's income
stream.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
When the reporting period began on October 1, 1999, the U.S. economy was growing
strongly, raising concerns that long-dormant inflationary pressures might
reemerge. In response, the Federal Reserve Board (the "Fed") raised short-term
interest rates once in late 1999 and three times during the first half of 2000
for a total increase of 1.25 percentage points during the reporting period.
Higher interest rates and inflation fears eroded the prices of some municipal
bonds, especially deep discount bonds.
However, the market and the fund recovered strongly during the second half of
the reporting period when signs of an economic slowdown emerged, suggesting that
the Fed' s restrictive monetary policies could be near an end. In addition, the
fund' s performance was partly driven by the ongoing strength of the U.S.
economy, which helped keep municipal bond yields relatively low, and prices
high, compared to taxable bonds. Many states and municipalities enjoyed healthy
tax revenues and budget surpluses, which curtailed their need to borrow and
resulted in a reduced supply of securities. At the same time, demand for
municipal bonds has been strong from individuals seeking to protect their newly
created wealth.
As the market rally began, we put to work the proceeds of our January 2000
issuance of auction preferred shares. Along with the proceeds from sales of some
of our lower yielding holdings, we primarily invested this new money in
income-oriented bonds from the industrial development, housing and pollution
control sectors. We generally avoided bonds from the health care industry, which
is currently under pressure from regulatory reform. We have also attempted to
increase the fund' s level of diversification, which is part of our risk
management strategy.
What is the fund's current strategy?
With the leveraging of the portfolio through the issuance of auction preferred
shares behind us, we currently are contemplating few near-term changes to the
portfolio. Leveraging the portfolio enabled the fund to purchase additional
securities that we believe could help support the fund's income stream. In
addition, we expect our newer purchases to help us more effectively manage the
portfolio's credit quality, as well as the risk that some of our higher yielding
bonds may be redeemed early by their issuers.
Accordingly, we have generally maintained our average effective duration -- a
measure of sensitivity to changing interest rates -- in the neutral range. In
addition, we have continued to search the marketplace for bonds to replace bonds
that may soon mature or be called by their issuers.
October 16, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
BASED UPON NET ASSET VALUE PER SHARE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE
RESULTS. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-CALIFORNIA
RESIDENTS, AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) DISTRIBUTION RATE PER SHARE IS BASED UPON DIVIDENDS PER SHARE PAID FROM NET
INVESTMENT INCOME DURING THE PERIOD, DIVIDED BY THE MARKET PRICE PER SHARE AT
THE END OF THE PERIOD.
The Fund
SELECTED INFORMATION
September 30, 2000 (Unaudited)
Market Price per share September 30, 2000 $ 89_16
Shares Outstanding September 30, 2000 58,549,216
New York Stock Exchange Ticker Symbol LEO
<TABLE>
MARKET PRICE (NEW YORK STOCK EXCHANGE)
Fiscal Year Ended September 30, 2000
---------------------------------------------------------------------------------------------------------------
QUARTER QUARTER QUARTER QUARTER
ENDED ENDED ENDED ENDED
DECEMBER 31, 1999 MARCH 31, 2000 JUNE 30, 2000 SEPTEMBER 30, 2000
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
High $ 89_16 $ 83_16 $ 81_4 $ 83_4
Low 73_8 67_16 79_16 77_8
Close 71_2 8 8 89_16
</TABLE>
PERCENTAGE GAIN (LOSS) based on change in Market Price*
September 23, 1987 (commencement of operations)
through September 30, 2000 122.80%
October 1, 1990 through September 30, 2000 74.32
October 1, 1995 through September 30, 2000 23.73
October 1, 1999 through September 30, 2000 14.76
January 1, 2000 through September 30, 2000 20.04
April 1, 2000 through September 30, 2000 10.63
July 1, 2000 through September 30, 2000 8.76
NET ASSET VALUE PER SHARE
September 23, 1987(commencement of operations) $ 9.32
September 30, 1999 9.41
December 31, 1999 8.99
March 31, 2000 9.21
June 30, 2000 9.11
September 30, 2000 9.37
PERCENTAGE GAIN (LOSS) based on change in Net Asset Value*
September 23, 1987(commencement of operations)
through September 30, 2000 161.59%
October 1, 1990 through September 30, 2000 94.85
October 1, 1995 through September 30, 2000 30.85
October 1, 1999 through September 30, 2000 6.76
January 1, 2000 through September 30, 2000 9.59
April 1, 2000 through September 30, 2000 5.16
July 1, 2000 through September 30, 2000 4.51
* WITH DIVIDENDS REINVESTED.
<TABLE>
STATEMENT OF INVESTMENTS
September 30, 2000
Principal
LONG-TERM MUNICIPAL INVESTMENTS--98.7% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALABAMA--1.6%
Alabama Industrial Development Authority,
SWDR (Pine City Fiber Co.)
6.45%, 12/1/2023 (Guaranteed; Boise Cascade Corp.) 5,000,000 4,870,550
Houston County Health Care Authority
6.25%, 10/1/2030 (Insured; AMBAC) 8,000,000 8,291,840
ALASKA--.9%
Alaska Housing Finance Corp.
6%, 6/1/2049 (Insured; MBIA) 7,250,000 7,263,485
ARIZONA--4.0%
Apache County Industrial Development Authority, PCR
(Tucson Electric Power Co. Project):
5.85%, 3/1/2028 5,000,000 4,407,200
5.875%, 3/1/2033 2,500,000 2,231,350
Maricopa Pollution Control Corp., PCR
(Public Service Co.) 5.75%, 11/1/2022 6,000,000 5,535,120
Pima County Industrial Development Authority,
Industrial Revenue
(Tucson Electric Power Co. Project)
6%, 9/1/2029 15,500,000 14,175,525
Tempe Industrial Development Authority, IDR
(California Micro Devices Corp. Project)
10.50%, 3/1/2018 7,045,000 7,136,726
ARKANSAS--2.2%
Arkansas Development Finance Authority, SFMR
(Mortgage Backed Securities Program):
6.45%, 7/1/2031 (Guaranteed; GNMA, FNMA) 10,000,000 10,398,400
6.25%, 1/1/2032 (Guaranteed; GNMA) 5,000,000 5,126,000
Little River County, Revenue
(Pacific Corp. Project) 5.60%, 10/1/2026 3,100,000 2,842,638
CALIFORNIA--2.5%
State of California 6.18%, 12/1/2018 (Insured; FSA) 10,000,000 (a,b) 10,020,600
Foothill/Eastern Corridor Agency, Toll Road Revenue
5.75%, 1/15/2040 6,000,000 5,866,860
Los Angeles Regional Airports Improvement Corp., LR
(Los Angeles International Airport)
6.35%, 11/1/2025 4,930,000 4,905,153
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
COLORADO--2.1%
Bent County, COP
(Medium Security Correctional Facility Project)
9.50%, 7/15/2013 12,070,000 12,463,482
Denver City and County, Airport Revenue:
8%, 11/15/2025 3,670,000 3,778,008
8%, 11/15/2025 (Prerefunded 11/15/2001) 1,330,000 (c) 1,382,083
FLORIDA--7.0%
Escambia County, PCR
(Champion International Corp. Project)
6.90%, 8/1/2022 7,000,000 7,243,110
Florida Board of Education, Capital Outlay
7.91%, 6/1/2019 20,000,000 (a,b) 21,418,600
Florida Housing Finance Corp., Housing Revenue
(Nelson Park Apartments)
6.40%, 3/1/2040 (Insured; FSA) 12,380,000 12,848,212
Highlands County Health Facilities Authority, HR
(Adventist Health Systems) 5.25%, 11/15/2028 8,000,000 6,337,120
Orange County Health Facilities Authority, HR
(Regional Healthcare Systems) 6%, 10/1/2026 2,000,000 1,977,940
Palm Beach County, Solid Waste IDR:
(Okeelanta Power Limited Partnership Project)
6.70%, 2/15/2015 3,000,000 (d) 1,713,000
(Osceola Power Limited Partnership Project)
6.95%, 1/1/2022 9,150,000 (d) 5,224,650
South Lake County Hospital District, Health,
Hospital and Nursing Home Revenue
(South Lake Hospital Inc.)
5.80%, 10/1/2034 2,000,000 1,870,300
GEORGIA--2.2%
Georgia Housing Finance Authority, SFMR
6.45%, 12/1/2030 7,500,000 7,781,850
Private Colleges and Universities Facilities
Authority, Revenue
(Clark Atlanta University Project)
8.25%, 1/1/2015 (Prerefunded 1/1/2003) 9,630,000 (c) 10,802,838
HAWAII--1.2%
Hawaii Department of Transportation,
Special Facility Revenue:
(Caterair International Corp. Project)
10.125%, 12/1/2010 4,100,000 4,155,596
(Continental Airlines, Inc.) 5.625%, 11/15/2027 6,820,000 5,623,022
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS--5.9%
Chicago:
6.125%, 1/1/2028 (Insured; FGIC) 15,815,000 16,477,490
(Wastewater Transmission Revenue)
6%, 1/1/2030 (Insured; MBIA) 3,000,000 3,088,830
Chicago-O'Hare International Airport,
Special Facility Revenue:
(Delta Airlines Project) 6.45%, 5/1/2018 3,855,000 3,822,734
(United Airlines, Inc. Project) 8.95%, 5/1/2018 8,675,000 8,952,947
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers
Facilities Acquisition Program)
6%, 7/1/2015 3,500,000 3,229,065
Illinois Health Facilities Authority, Revenue:
(OSF Healthcare System) 6.25%, 11/15/2029 8,730,000 8,462,076
(Swedish American Hospital) 6.875%, 11/15/2030 5,000,000 5,070,900
INDIANA--3.3%
Franklin Township Independent School Building Corp.,
First Mortgage 6.125%, 1/15/2022 6,500,000 6,828,315
Indiana Housing Finance Authority, SFMR 5.95%, 1/1/2029 3,885,000 3,868,761
Indianapolis Airport Authority:
(United Airlines Project) 6.50%, 11/15/2031 5,625,000 5,414,231
6.72%, 11/15/2031 12,000,000 (a,b) 11,100,720
KANSAS--1.2%
Witchita, HR (Christian Health System Inc.)
6.25%, 11/15/2024 10,000,000 10,098,900
KENTUCKY--2.7%
Kenton County Airport Board, Airport Revenue
(Special Facilities-Delta Airlines Project):
7.50%, 2/1/2020 10,000,000 10,360,700
6.125%, 2/1/2022 13,000,000 12,498,070
LOUISIANA--1.2%
Parish of Saint James, SWDR
(Freeport-McMoRan Partnership Project)
7.70%, 10/1/2022 10,000,000 10,370,600
MARYLAND--.3%
Baltimore County, PCR
(Bethlehem Steel Corp. Project) 7.50%, 6/1/2015 2,500,000 2,532,325
MASSACHUSETTS--1.0%
Massachusetts Industrial Finance Agency, Revenue
(Ogden Haverhill Project) 5.60%, 12/1/2019 6,000,000 5,292,720
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
Massachusetts Health and Educational Facilities Authority,
Revenue (Beth Israel Hospital Issue)
7.457%, 7/1/2025 (Insured; AMBAC) 3,000,000 (a) 3,015,000
MICHIGAN--2.9%
Michigan Hospital Finance Authority, HR
(Ascension Health Credit) 6.125%, 11/15/2026 5,000,000 5,029,550
(Genesys Health System Obligated Group)
8.125%, 10/1/2021 (Prerefunded 10/1/2005) 5,000,000 (c) 5,856,000
Michigan Strategic Fund, SWDR
(Genesee Power Station Project) 7.50%, 1/1/2021 7,000,000 7,213,640
Wayne Charter County, Special Airport Facilities Revenue
(Northwest Airlines, Inc.) 6.75%, 12/1/2015 5,670,000 5,655,995
MISSISSIPPI--3.2%
Claiborne County, PCR (Middle South Energy, Inc.)
(System Energy Resources, Inc.) 6.20%, 2/1/2026 5,545,000 5,339,059
Mississippi Business Finance Corp., PCR (System Energy
Resource Inc. Project) 5.875%, 4/1/2022 22,790,000 21,209,513
MONTANA--1.2%
Montana Board of Housing, Single Family Mortgage
6.45%, 6/1/2029 10,000,000 10,298,600
NEVADA--4.1%
Clark County, IDR:
(Southwest Gas Corp.) 7.50%, 9/1/2032 4,000,000 4,153,400
(Nevada Power Company Project):
5.50%, 10/1/2030 5,000,000 4,217,150
5.60%, 10/1/2030 8,550,000 7,292,038
5.90%, 10/1/2030 6,000,000 5,347,500
Washoe County (Reno-Sparks Convention Center)
6.40%, 7/1/2029 (Insured; FSA) 12,000,000 12,790,920
NEW HAMPSHIRE--3.1%
New Hampshire Industrial Development Authority, PCR
(Public Service Co. Project):
7.65%, Series A, 5/1/2021 15,645,000 16,012,501
7.65%, Series C, 5/1/2021 3,500,000 3,582,215
New Hampshire Business Finance Authority, PCR
(Public Service Co. Project) 6%, 5/1/2021 7,000,000 6,582,660
NEW JERSEY--3.0%
New Jersey Economic Development Authority, Special Facility
Revenue (Continental Airlines Inc. Project):
6.40%, 9/15/2023 3,000,000 2,848,110
6.25%, 9/15/2029 5,000,000 4,612,400
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY (CONTINUED)
New Jersey Health Facilities Financing Authority, Revenue
(Christian Health Care Center) 8.75%, 7/1/2018 14,955,000 17,699,841
NEW MEXICO--.5%
Farmington, PCR (Tucson Electric Power Co., San Juan)
6.95%, 10/1/2020 4,000,000 4,034,560
NEW YORK--5.2%
Long Island Power Authority, New York
Electric System Revenue
6.746%, 12/1/2016 10,000,000 (a,b) 9,316,100
New York City 5.50%, 11/15/2037 15,545,000 14,647,121
New York State Energy Research and Development Authority,
Electric Facilities Revenue (Long Island Lighting Co.):
7.15%, 2/1/2022 3,000,000 3,178,440
6.90%, 8/1/2022 3,275,000 3,485,058
TSASC, Inc., Tobacco Flexible Amortization Bonds:
6.25%, 7/15/2027 8,500,000 8,564,005
6.375%, 7/15/2039 4,500,000 4,528,755
NORTH CAROLINA--.5%
Charlotte, Special Facilities Revenue (Charlotte/Douglas
International Airport) 5.60%, 7/1/2027
(Guaranteed; U.S. Air) 6,000,000 4,456,320
NORTH DAKOTA--1.7%
North Dakota Housing Finance Agency,
Home Mortgage Revenue
(Housing Finance Program):
6.50%, 1/1/2031 10,000,000 10,346,900
6.15%, 7/1/2031 3,425,000 3,456,099
OHIO--2.1%
Ohio Air Quality Development Authority, PCR
6.10%, 8/1/2020 3,000,000 2,844,600
Ohio Housing Finance Agency,
Residential Mortgage Revenue:
6.25%, 9/1/2020 (Collateralized; GNMA) 5,000,000 5,161,750
6.35%, 9/1/2031 (Collateralized; GNMA) 5,000,000 5,159,300
Ohio Water Development Authority, Pollution Control
Facilities Revenue (Cleveland Electric Co.)
6.10%, 8/1/2020 4,350,000 4,115,448
OKLAHOMA--1.5%
Oklahoma Industries Authority
(Health System Obligated Group) 5.75%, 8/15/2029 12,230,000 12,101,585
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA--4.8%
Beaver County Industrial Development Authority, PCR
(Cleveland Electric Project) 7.625%, 5/1/2025 7,000,000 7,444,080
Butler County Industrial Development Authority, First Mortgage
Revenue (Saint John Lutheran Care Center):
10%, Series A1, 10/1/2017 8,265,000 9,091,087
10%, Series A2, 10/1/2017 940,000 1,041,370
Lehigh County General Purpose Authority, Revenue
(Wiley House) 9.50%, 11/1/2016
(Prerefunded 11/1/2001) 3,000,000 (c) 3,215,280
Montgomery County Industrial Development Authority,
First Mortgage Revenue (Meadowood Corp. Project):
8.25%, 12/1/2018 (Prerefunded 12/1/2000) 3,750,000 (c) 3,846,262
10.25%, 12/1/2020 (Prerefunded 12/1/2000) 5,000,000 (c) 5,144,900
Pennsylvania Housing Finance Agency, SFMR
7.614%, 4/1/2025 6,000,000 (a) 6,052,500
York County Hospital Authority, Revenue
(Health Center--Lutheran Social Services)
6.50%, 4/1/2022 4,250,000 3,922,707
SOUTH CAROLINA--1.2%
Piedmont Municipal Power Agency, Electric Revenue
6.55%, 1/1/2016 1,690,000 1,689,848
Spartanburg County, Hospital Facilities Revenue
(Spartanburg General Hospital System)
8.279%, 4/13/2022 (Prerefunded 4/15/2002) 7,700,000 (a,c) 8,364,125
TENNESSEE--2.9%
Memphis Center City Revenue Finance Corp.,
Tennessee Sports
Facility Revenue (Memphis Redbirds) 6.50%, 9/1/2028 10,000,000 8,975,200
Tennessee Housing Development Agency
(Homeownership Program) 6.40%, 7/1/2031 15,000,000 15,536,100
TEXAS--6.5%
Dallas-Fort Worth International Airport, Airport Facility
Improvement Corp. Revenue (American Airlines Inc.)
6.375%, 5/1/2035 (Guaranteed; American Airlines Inc.) 7,500,000 7,300,650
Harris County Health Facilities Development Corp., HR
(Memorial Hermann Hospital System Project)
5.25%, 6/1/2027 (Insured; FSA) 10,000,000 9,157,400
Houston Airport System, Special Facilities Revenue
Airport Improvement (Continental Airlines):
6.125%, 7/15/2027 8,100,000 7,166,961
5.70%, 7/15/2029 3,750,000 3,093,562
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
Port Corpus Christi Authority, Nueces County General
Revenue (Union Pacific Corp.) 5.65%, 12/1/2022 7,750,000 6,804,190
Sabine River Authority, PCR (TXU Electric Project)
6.45%, 6/1/2021 9,000,000 8,997,930
Texas Department of Housing and Community Affairs
Collateralized Home Mortgage Revenue
9.075%, 7/2/2024 5,500,000 (a) 6,118,750
Tomball Hospital Authority, Health, Hospital and
Nursing Home Revenue (Tomball Regional Hospital)
6%, 7/1/2025 3,500,000 3,042,760
Tyler Health Facilities Development Corp., HR
(East Texas Medical Center Regional Health Care
System Project) 6.75%, 11/1/2025 3,000,000 2,413,050
UTAH--.6%
Carbon County, SWDR (Sunnyside Cogeneration):
7.10%, 8/15/2023 4,980,000 4,742,255
Zero Coupon, 8/15/2024 1,545,000 252,020
VERMONT--.8%
Vermont Housing Finance Agency, Single Family Housing
6.40%, 11/1/2030 (Insured; FSA) 6,270,000 6,451,266
VIRGINIA--1.9%
Fairfax County Water Authority, Revenue
6.962%, 4/1/2029 5,000,000 (a,b) 5,081,750
Greater Richmond Convention Center Authority,
Hotel Tax Revenue
(Convention Center Expansion Project)
6.25%, 6/15/2032 10,500,000 10,985,835
WASHINGTON--1.7%
Public Utility District No. 1 of Pend Orielle County, Electric
Revenue 6.375%, 1/1/2015 3,755,000 3,886,575
Seattle, Water System Revenue
6%, 7/1/2029 (Insured; FGIC) 10,000,000 10,330,700
WEST VIRGINIA--4.1%
Braxton County, SWDR (Weyerhaeuser Co. Project) :
5.40%, 5/1/2025 12,800,000 11,425,536
6.125%, 4/1/2026 14,000,000 13,804,560
West Virginia Housing Development Fund, Housing Finance
6.50%, 5/1/2028 5,935,000 6,183,736
West Virginia Water Development Authority, Water
Development Revenue 6.375%, 7/1/2039 2,250,000 2,360,565
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN--3.7%
Wisconsin Health and Educational Facilities Authority, Health,
Hospital and Nursing Home Revenue
(Aurora Health Care Inc.) 5.60%, 2/15/2029 7,000,000 5,854,100
Wisconsin Housing and Economic Development Authority,
Homeownership Revenue:
8.038%, 7/1/2025 10,000,000 (a,b) 10,298,900
6.45%, 9/1/2030 14,100,000 14,548,662
WYOMING--.5%
Sweetwater County, SWDR (FMC Corp. Project):
7%, 6/1/2024 2,200,000 2,233,550
6.90%, 9/1/2024 2,000,000 2,022,060
U. S. RELATED--1.7%
Guam Housing Corp., SFMR
5.75%, 9/1/2031 (Collateralized; FHLMC) 8,225,000 8,254,199
Puerto Rico Highway and Transportation Authority,
Transportation Revenue 6%, 7/1/2039 6,000,000 6,218,340
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $816,295,157) 822,666,096
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--.0%
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN;
Michigan Strategic Fund, VRDN, PCR
(Consumers Power Project) 5.50% (Insured; AMBAC)
(cost $200,000) 200,000 (e) 200,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $816,495,157) 98.7% 822,866,096
CASH AND RECEIVABLES (NET) 1.3% 11,072,562
NET ASSETS 100.0% 833,938,658
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
FGIC Financial Guaranty Insurance Company
FHLMC Federal Home Loan Mortgage
Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National
Mortgage Association
HR Hospital Revenue
IDR Industrial Development Revenue
LR Lease Revenue
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 Note
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 23.1
AA Aa AA 14.8
A A A 12.4
BBB Baa BBB 25.6
BB Ba BB 7.6
B B B .3
Not Rated (f) Not Rated (f) Not Rated (f) 16.2
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 SEPTEMBER 30,
2000, THESE SECURITIES AMOUNTED TO $67,236,670 OR 8.1% OF NET ASSETS.
(C) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(D) NON-INCOME PRODUCING SECURITY; INTEREST PAYMENT IN DEFAULT.
(E) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST--SUBJECT TO PERIODIC
CHANGE.
(F) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 816,495,157 822,866,096
Cash 37,212
Interest receivable 16,980,173
Prepaid expenses 25,130
839,908,611
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 550,578
Payable for investment securities purchased 5,006,396
Dividends payable to preferred shareholders 227,222
Commissions payable 34,093
Accrued expenses and other liabilities 151,664
5,969,953
--------------------------------------------------------------------------------
NET ASSETS ($) 833,938,658
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Auction Preferred Stock, Series M, T, W, TH and F par value
$.001 per share (11,400 shares issued and outstanding at
$25,000 per share liquidation preference)--Note 1 285,000,000
Common Stock par value, $.001 per share
(58,549,216 shares issued and outstanding) 58,549
Paid-in capital 551,890,239
Accumulated undistributed investment income--net 799,617
Accumulated net realized gain (loss) on investments (10,180,686)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 6,370,939
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 548,938,658
--------------------------------------------------------------------------------
NET ASSETS ($) 833,938,658
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(500 million shares of $.001 par value Capital Stock authorized) 58,549,216
NET ASSET VALUE PER SHARE OF COMMON STOCK ($) 9.38
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 48,579,694
EXPENSES:
Management fee--Note 3(a) 5,430,187
Commission fees--Note 1 534,069
Professional fees 199,219
Shareholder servicing costs 185,343
Custodian fees--Note 3(b) 118,073
Directors' fees and expenses--Note 3(c) 61,617
Shareholders' reports 51,457
Registration fees 47,100
Miscellaneous 24,191
TOTAL EXPENSES 6,651,256
INVESTMENT INCOME--NET 41,928,438
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (10,047,493)
Net unrealized appreciation (depreciation) on investments 10,713,730
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 666,237
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 42,594,675
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended September 30,
-----------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 41,928,438 32,698,526
Net realized gain (loss) on investments (10,047,493) 4,578,741
Net unrealized appreciation (depreciation)
on investments 10,713,730 (51,129,931)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 42,594,675 (13,852,664)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Common Stock (32,319,176) (33,466,174)
Preferred Stock (7,790,712) --
Net realized gain on investments:
Common Stock (895,803) --
TOTAL DIVIDENDS (41,005,691) (33,466,174)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Proceeds from issuance of Preferred Stock 285,000,000 --
Dividends reinvested--Note 1 (c) -- 2,380,500
Offering costs charged to paid-in capital resulting
from issuance of Preferred Stock (3,405,309) --
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 281,594,691 2,380,500
TOTAL INCREASE (DECREASE) IN NET ASSETS 283,183,675 (44,938,338)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 550,754,983 595,693,321
END OF PERIOD 833,938,658 550,754,983
Accumulated undistributed (distributions in excess of)
investment income--net 799,617 (1,018,933)
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (COMMON SHARES):
INCREASE IN SHARES OUTSTANDING AS
A RESULT OF DIVIDENDS REINVESTED -- 235,695
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements and market price data for the fund's common shares.
<TABLE>
Year Ended September 30,
---------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 9.41 10.22 10.02 9.88 9.96
Investment Operations:
Investment income--net .71 .56 .59 .66 .68
Net realized and unrealized
gain (loss) on investments .02 (.80) .25 .16 (.09)
Total from Investment Operations .73 (.24) .84 .82 .59
Distributions:
Dividends from investment income--net:
Common Stock (.55) (.57) (.64) (.68) (.67)
Preferred Stock (.13) -- -- -- --
Dividends from net realized gain
on investments (.02) -- -- -- --
Total Distributions (.70) (.57) (.64) (.68) (.67)
Capital Stock transactions, net effect
of Preferred Stock offerings (.06) -- -- -- --
Net asset value, end of period 9.38 9.41 10.22 10.02 9.88
Market value, end of period 89_16 8 105_16 105_8 10
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)( A) 14.76 (17.55) 3.35 13.77 11.23
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets
applicable to Common Stock 1.25(b,c) .84 .85 .85 .86
Ratio of net investment income
to average net assets applicable
to Common Stock 7.91(b,c) 5.63 5.78 6.64 6.92
Portfolio Turnover Rate 19.03 27.05 20.95 16.66 19.27
Asset Coverage of Preferred Stock,
end of period 295 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, net of Preferred Stock,
end of period ($ x 1,000) 548,939 550,755 595,693 577,209 560,072
Preferred Stock outstanding,
end of period ($ x 1,000) 285,000 -- -- -- --
(A) CALCULATED BASED ON MARKET VALUE.
(B) DOES NOT REFLECT THE EFFECT OF DIVIDENDS TO PREFERRED STOCK SHAREHOLDERS.
(C) THE RATIO OF EXPENSES TO TOTAL AVERAGE NET ASSETS AND THE RATIO OF NET
INVESTMENT INCOME TO TOTAL AVERAGE NET ASSETS WERE .92% AND 5.79%,
RESPECTIVELY, FOR THE YEAR ENDED SEPTEMBER 30, 2000.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Strategic Municipals, Inc. (the "fund") is registered under the
Investment Company Act of 1940 as amended (the "Act"), as a diversified
closed-end management investment company. The fund's investment objective is to
maximize current income exempt from Federal income tax to the extent consistent
with the preservation of capital. The Dreyfus Corporation (the "Manager") serves
as the fund's investment adviser. The Manager is a direct subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation.
The fund's Common Stock trades on the New York Stock Exchange under the ticker
symbol LEO.
On January 27, 2000, the fund issued 2,280 shares each of Series M, Series T,
Series W, Series TH and Series F Auction Preferred Stock ("APS"), each with a
liquidation preference of $25,000 per share (plus an amount equal to accumulated
but unpaid dividends upon liquidation) . APS dividend rates are determined
pursuant to periodic auctions. Bankers Trust Company, as Auction Agent, receives
a fee from the fund for its services in connection with such auctions. The fund
also compensates broker-dealers generally at an annual rate of .25% of the
purchase price of the shares of APS placed by the broker-dealer in an auction.
The fund is subject to certain restrictions relating to the APS. Failure to
comply with these restrictions could preclude the fund from declaring any
distributions to common shareholders or repurchasing common shares and/or could
trigger the mandatory redemption of APS at liquidation value.
The holders of the APS, voting as a separate class, have the right to elect at
least two directors. The holders of the APS will vote as a separate class on
certain other matters, as required by law. The fund has designated Robin R.
Pringle and John E. Zuccotti to represent holders of APS on the fund's Board of
Directors.
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 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 of Common Stock ("Common Shareholder(s)"):
Dividends are recorded on the ex-dividend date. Dividends from investment
income-net are declared and paid monthly. Dividends from net realized capital
gain are normally declared and paid at least annually. To the extent that net
realized cap
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ital gain can be offset by capital loss carryovers, if any, it is the policy of
the fund not to distribute such gain.
For Common 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) as defined in the dividend reinvestment and cash
purchase plan.
On September 29, 2000, the Board of Directors declared a cash dividend of $.046
per share from investment income-net, payable on October 27, 2000 to Common
Shareholders of record as of the close of business on October 13, 2000.
(d) Dividends to shareholders of APS: For APS, dividends are currently reset
every 7 days. The dividend rate in effect at September 30, 2000 were as follows:
Series M - 4.20% , Series T - 4.30%, Series W - 4.30%, Series TH - 4.25% and
Series F - 4.15%.
(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 of 1986,
as amended 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 $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes. Interest is charged to the fund at rates which are related to the
Federal Funds rate in effect at the time of borrowings. During the period ended
September 30, 2000, the fund did not borrow under the line of credit.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .75
of 1% of the value of the fund's average weekly 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, 11_2% of the next $20 million and
1% of the excess over $30 million of the average value of the fund's net assets.
During the period ended September 30, 2000, there was no expense reimbursement
pursuant to the agreement.
(b) The fund compensates Boston Safe Deposit and Trust Company, an affiliate of
the Manager, under a custody agreement for providing custodial services to the
fund. During the period ended September 30, 2000, $118,073 was charged by Boston
Safe Deposit and Trust Company pursuant to the custody agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the fund 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 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended September 30, 2000, amounted to
$416,225,251 and $133,957,416, respectively.
At September 30, 2000, accumulated net unrealized appreciation on investments
was $6,370,939, consisting of $27,831,037 gross unrealized appreciation and
$21,460,098 gross unrealized depreciation.
At September 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 Directors Dreyfus Strategic Municipals, Inc.
We have audited the accompanying statement of assets and liabilities of Dreyfus
Strategic Municipals, Inc., including the statement of investments, as of
September 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
verification by examination of securities held by the custodian as of September
30, 2000 and confirmation of securities not held by the custodian by
correspondence with others. 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 Strategic Municipals, Inc. at September 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
November 6, 2000
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (Unaudited)
Under the fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan"), a
holder of Common Stock who has fund shares registered in his name will have all
distributions reinvested automatically by The Bank of New York, as Plan agent
(the "Agent"), in additional shares of the fund at the lower of prevailing
market price or net asset value (but not less than 95% of market value at the
time of valuation) unless such shareholder elects to receive cash as provided
below. If market price is equal to or exceeds net asset value, shares will be
issued at net asset value. If net asset value exceeds market price or if a cash
dividend only is declared, the Agent, as agent for the Plan participants, will
buy fund shares in the open market. A Plan participant is not relieved of any
income tax that may be payable on such dividends or distributions.
A Common Shareholder who owns fund shares registered in nominee name through his
broker/dealer (i.e., in "street name") may not participate in the Plan, but may
elect to have cash dividend distributions reinvested by his broker/dealer in
additional shares of the fund if such service is provided by the broker/dealer;
otherwise such dividends and distributions will be treated like any other cash
dividend.
A Common Shareholder who has fund shares registered in his name may elect to
withdraw from the Plan at any time for a $2.50 fee and thereby elect to receive
cash in lieu of shares of the fund. Changes in elections must be in writing,
sent to The Bank of New York, Dividend Reinvestment Department, P.O. Box 1958,
Newark, New Jersey 07101-9774, should include the shareholder's name and address
as they appear on the Agent's records and will be effective only if received
more than fifteen days prior to the record date for any distribution.
A Plan participant who has fund shares in his name has the option of making
additional cash payments to the Agent, semi-annually, in any amount from $1,000
to $10,000, for investment in the fund's shares in the open market on or about
January 15 and July 15. Any voluntary cash payments received more than 30 days
prior to these dates will be returned by the Agent, and interest will not be
paid on any uninvested cash payments. A participant may withdraw a voluntary
cash payment
The Fund
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (Unaudited) (CONTINUED)
by written notice, if the notice is received by the Agent not less than 48 hours
before the payment is to be invested. A Common Shareholder who owns fund shares
registered in street name should consult his broker/dealer to determine whether
an additional cash purchase option is available through his broker/dealer.
The Agent maintains all Common Shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the account. Shares in the account
of each Plan participant will be held by the Agent in non-certificated form in
the name of the participant, and each such participant's proxy will include
those shares purchased pursuant to the Plan.
The fund pays the Agent's fee for reinvestment of dividends and distributions.
Plan participants pay a pro rata share of brokerage commissions incurred with
respect to the Agent's open market purchases and purchases from voluntary cash
payments, and a $1.25 fee for each purchase made from a voluntary cash payment.
The fund reserves the right to amend or terminate the Plan as applied to any
voluntary cash payments made and any dividend or distribution paid subsequent to
notice of the change sent to Plan participants at least 90 days before the
record date for such dividend or distribution. The Plan also may be amended or
terminated by the Agent on at least 90 days' written notice to Plan
participants.
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended September 30, 2000:
-- all the dividends paid from investment income-net are "exempt-interest
dividends" (not generally subject to regular Federal income tax), and
-- the fund hereby designates $.0153 per share as a long-term capital gain
distribution of the $.0613 per share paid on December 28, 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
PROXY RESULTS (Unaudited)
During the fiscal year ended September 30, 2000, holders of common stock and
holders of Auction Preferred Stock ("APS") voted together as a single class
(except as noted below) on the following proposals presented at the annual
shareholders' meeting held on May 12, 2000. The description of each proposal and
the number of shares voted are as follows:
<TABLE>
Shares
------------------------------------------------
For Authority Withheld
------------------------------------------------
<S> <C> <C>
To elect three Class III Directors:*
David W. Burke 48,654,695 1,128,120
Hans C. Mautner 48,446,423 1,316,392
John E. Zuccotti ** 11,209 0
Shares
---------------------------------------------------------------------------------
For Against Abstained
---------------------------------------------------------------------------------
To ratify the selection of
Ernst & Young LLP as
independent auditors for
the fund 48,647,470 280,126 853,101
* THE TERMS OF THESE CLASS I DIRECTORS EXPIRE IN 2003.
** ELECTED SOLELY BY APS HOLDERS. COMMON STOCKHOLDERS WERE NOT ENTITLED TO
VOTE.
</TABLE>
NOTES
OFFICERS AND DIRECTORS
Dreyfus Strategic Municipals, Inc.
200 Park Avenue
New York, NY 10166
DIRECTORS
Joseph S. DiMartino
David W. Burke
Hodding Carter, III
Ehud Houminer
Richard C. Leone
Hans C. Mautner
Robin R. Pringle(*)
John E. Zuccotti(*)
* AUCTION PREFERRED STOCK DIRECTORS
OFFICERS
President
Stephen E. Canter
Vice President
Mark N. Jacobs
Douglas C. Conroy
Vice President and Treasurer
Joseph Connolly
Executive Vice President
Paul Disdier
Secretary
John B. Hammalian
Assistant Secretary
Steven F. Newman
Assistant Treasurer
Gregory S. Gruber
PORTFOLIO MANAGERS:
Joseph P. Darcy
A. Paul Disdier
Douglas J. Gaylor
Joseph A. Irace
Richard J. Moynihan
PORTFOLIO MANAGERS (CONTINUED)
Colleen A. Meehan
W. Michael Petty
Scott Sprayer
Samuel J. Weinstock
Monica S. Wieboldt
INVESTMENT ADVISER
The Dreyfus Corporation
CUSTODIAN
Boston Safe Deposit
and Trust Company
COUNSEL
Stroock & Stroock & Lavan LLP
TRANSFER AGENT, DIVIDEND DISTRIBUTION AGENT AND REGISTRAR
The Bank of New York (Common Stock)
Bankers Trust (Auction Preferred Stock)
AUCTION AGENT
Bankers Trust (Auction Preferred Stock)
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--SINGLE STATE MUNICIPAL BOND FUNDS" EVERY SUNDAY.
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.
The Fund
For More Information
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 Disbursing Agent and Registrar
(Common Stock)
The Bank of New York
101 Barclay Street
New York, NY 10286
(c) 2000 Dreyfus Service Corporation 853AR009
