<PAGE>
New Jersey
Municipal
Bond Fund, Inc.
Annual Report
December 31, 1997
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus New Jersey
Municipal Bond Fund, Inc. for its 12-month reporting period ended December 31,
1997. Your Fund produced a total return, including share price changes and
dividend income generated, of 8.84%.* The Fund's tax-free distribution rate per
share was 5.09%.**
ECONOMIC REVIEW
Inflation seems to have lost its terrors. Not since the oil price collapse in
1986 has it been so restrained. As the economy approached the end of its seventh
uninterrupted year of expansion, inflation seemed to become even more subdued.
During the last quarter of 1997, the 12-month pace of consumer price increases
fell below the 2% level. Producer prices actually fell at an annual rate of 1.2%
over the first 11 months of the year.
An ongoing fear in financial markets has been that the Federal Reserve
Board's (the "Fed") unremitting fight against inflation could lead to further
increases in interest rates. Yet the Federal Open Market Committee (FOMC), the
policy-making arm of the Fed, has raised interest rates just once in over two
years, a period roughly coinciding with the latest surge of economic growth. The
last increase occurred on March 25, 1997 when the FOMC increased the Federal
Funds rate by a modest one quarter of a percentage point to 5.50%. (The Federal
Funds rate is the rate of interest that banks charge one another for overnight
loans.) Investor concern about additional monetary restraint has centered on the
low unemployment rate of just 4.6%, a 24-year low. In particular, there have
been fears that wages would rise at a rate that could rekindle inflation.
Not surprisingly, an almost ideal economic climate -- plentiful jobs, low
interest rates and dwindling inflation -- put consumers in an optimistic mood.
Though holiday retail sales were below expectations, spending in the third
quarter grew at the strongest pace in five years. Since consumer spending
accounts for two thirds of all economic activity, consumer attitudes are
generally considered important indicators of future economic conditions. The
Conference Board (a business-sponsored research group) reported in December that
its Index of Consumer Confidence rose to its highest level since 1969. So far,
the serious economic developments in Asia have not had an inhibiting effect on
consumer attitudes.
The Asian financial crisis, while bound to affect the import/export segment
of our economy, may also afford the Fed additional flexibility in implementing
monetary policy. While the Fed is concerned about the potential resurgence of
inflation, lower-priced Asian imports may counteract upward pressure on the rate
of U.S. inflation. Moreover, with our economic expansion mature by any
historical precedent (it's the second longest peacetime expansion in this
century), a slackening in overseas demand for U.S. products, combined with the
lower-priced imports, may help contain economic growth without additional
monetary tightening by the Fed. Regardless, it is unlikely that the Fed would
raise interest rates in the near term and further unsettle the international
financial markets while Asian countries struggle to stabilize their currencies
in relation to the U.S. dollar. Perhaps the biggest uncertainty ahead is the
extent to which the Asian turmoil will affect the U.S. economy. We are
particularly vigilant for developments abroad that might have either negative or
positive consequences for the portfolio. The trouble in Asia shows the close and
sensitive relationship between our economy and the economies around the globe.
MARKET ENVIRONMENT
Since our last communication to shareholders at the end of June, the climate
has been extremely favorable for long-term fixed income securities. The strong
economy, low inflation scenario that had gripped the market for much of 1997 was
pushed aside during the fourth quarter as the Asian financial crisis took center
stage. Although it is impossible to predict the magnitude of the impact that
this will have on U.S.economic activity, it is safe to assume that some downward
pressure on growth and prices will result. Already this bond-friendly logic has
resulted in long- term Treasury yields declining from 6.78% at the end of June
to 5.92% at year end.
<PAGE>
Municipal securities would benefit from a continued decline in rates, but
probably to a lesser degree than their taxable counterparts. This is due to the
risk that municipal supply will increase as yields decline owing to
municipalities refinancing their outstanding, higher yielding debt. As an
illustration of this, municipal yields declined roughly 40 basis points during
the June to December period while Treasury yields declined about 86 basis points
during the same period.
PORTFOLIO OVERVIEW
The Fund chose to restructure a portion of the portfolio during the first
half of 1997 in order to increase the Fund's sensitivity to changes in interest
rates. This strategy played out nicely as long-term rates plunged dramatically
in the final quarter of the calendar year. Many of the trades that were executed
later in the year sought to capitalize on the extremely flat yield curve by
purchasing 15-20-year maturities and selling 30-year maturities. By purchasing
intermediate maturities the portfolio was able to reduce risk significantly
while capturing over 95% of the yield produced by bonds with much longer
maturities. Also, the long-term callable bonds that were sold had increased in
value during the bond market rally and had relatively little room for further
price appreciation.
Entering the new year, our posture has turned from positive to neutral on the
bond market as we feel a tremendous amount of good news is currently priced into
the market. Thus, we will look to maintain an attractive tax-exempt dividend and
protect the net asset value of the Fund during the coming year. On a
security-by-security basis, we intend to analyze the risk/reward profile of each
bond in the portfolio and then buy and sell in an effort to best position the
Fund. We continue to monitor the changing financial landscape and stand ready to
adjust our positions accordingly.
Sincerely,
/S/Richard J. Moynihan
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
January 20, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid. Income is subject to state and local taxes for non-New Jersey
residents.
** Distribution rate per share is based upon dividends per share paid
from net investment income during the period, divided by the net asset
value per share at the end of the period, adjusted for any capital gain
distributions. Some income may be subject to the Federal Alternative
Minimum Tax (AMT) for certain shareholders.
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc. December 31, 1997
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS NEW JERSEY
MUNICIPAL BOND FUND, INC. AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
Dollars
$22,787
Lehman Brothers
Municipal Bond Index*
$22,250
Dreyfus
New Jersey Municipal
Bond Fund
*Source: Lehman Brothers
Average Annual Total Returns
- -------------------------------------------------------------------------------
One Year Ended Five Years Ended Ten Years Ended
December 31, 1997 December 31, 1997 December 31, 1997
----------------- ----------------- -----------------
8.84% 6.62% 8.33%
- ----------
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus New Jersey
Municipal Bond Fund, Inc. on 12/31/87 to a $10,000 investment made in the Lehman
Brothers Municipal Bond Index on that date. All dividends and capital gain
distributions are reinvested.
The Fund invests primarily in New Jersey municipal securities and its
performance shown in the line graph takes into account fees and expenses.
Unlike the Fund, the Lehman Brothers Municipal Bond Index 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. The Index does not take into account charges, fees and other
expenses and is not limited to investments principally in New Jersey
municipal obligations. These factors can contribute to the Index potentially
outperforming the Fund. Further information relating to Fund performance,
including expense reimbursements, if applicable, is contained in the Financial
Highlights section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Investments December 31, 1997
Principal
Long-Term Municipal Investments--97.9% Amount Value
- ------------------------------------------------------------------------------- ------------ --------------
<S> <C> <C>
New Jersey--82.8%
Atlantic County Utilities Authority, Solid Waste System Revenue:
7%, 3/1/2008................................................................ $ 4,250,000 $ 4,296,155
7.125%, 3/1/2016............................................................ 6,650,000 6,738,511
Brick Township Municipal Utilities Authority, Water and Sewer Revenue, Refunding
5%, 12/1/2016 (Insured; FGIC)............................................... 5,450,000 5,424,712
City of Camden:
Zero Coupon, 2/15/2010 (Insured; FSA)....................................... 2,500,000 1,416,800
Zero Coupon, 2/15/2012 (Insured; FSA)....................................... 4,585,000 2,317,580
Camden County Pollution Control Financing Authority, Solid Waste Disposal and
Resource Recovery System Revenue 7.50%, 12/1/2010........................... 13,000,000 13,139,880
Clearview Regional High School District, Refunding
5.375%, 8/1/2015 (Insured; FGIC)............................................ 3,625,000 3,830,610
Delaware River and Bay Authority, Highway Toll Revenue
5.25%, 1/1/2026 (Insured; FGIC)............................................. 10,000,000 10,023,100
Delaware River Port Authority, Highway Toll Revenue 5.50%, 1/1/2026 (Insured; FGIC) 5,000,000 5,167,050
East Orange:
Zero Coupon, 8/1/2010 (Insured; FSA)........................................ 4,240,000 2,351,546
Zero Coupon, 8/1/2011 (Insured; FSA)........................................ 2,500,000 1,305,625
Essex County Improvement Authority, Revenue:
Lease:
7%, 12/1/2020 (Prerefunded 12/1/2000) (Insured; AMBAC) (a)............... 4,000,000 4,394,880
(County Correctional Facility Project) 5.70%, 1/1/2027 (Insured; FGIC)... 7,030,000 7,417,774
Water (Utility System - Orange Franchise) 5.75%, 7/1/2027 (Insured; MBIA)... 1,800,000 1,904,724
Evesham Township Board of Education, COP, Lease Purchase Agreement
6.875%, 9/1/2011 (Prerefunded 9/1/2001) (Insured; FGIC) (a)................. 3,050,000 3,389,435
Gloucester County Industrial Pollution Control Financing Authority,
Industrial Revenue, Refunding (Mobil Oil Refining Corp. Project)
5.625%, 12/1/2028 (Guaranteed; Mobil Oil Refining Corp.).................... 1,000,000 1,028,220
Gloucester County Utilities Authority, Sewer Revenue, Refunding
5.45%, 1/1/2024 (Insured; MBIA)............................................. 1,250,000 1,274,037
Gloucester Township Municipal Utilities Authority, Sewer Revenue, Refunding
5.65%, 3/1/2018 (Insured; AMBAC)............................................ 2,530,000 2,760,230
Hillsborough Township School District:
5.40%, 10/1/2020 (Insured; FSA)............................................. 1,720,000 1,755,174
5.40%, 10/1/2021 (Insured; FSA)............................................. 1,520,000 1,548,834
Howell Township, Refunding 6.80%, 1/1/2014 (Insured; FGIC)..................... 5,000,000 5,513,950
Hudson County Improvement Authority:
Facility Lease Revenue 7.539%, 12/1/2025 (Insured; FGIC) (b,c).............. 13,835,000 15,892,956
MFHR (Conduit Financing - Observer Park Project) 6.90%, 6/1/2022 (Insured; FNMA) 4,190,000 4,486,945
Jersey City:
Zero Coupon, 5/15/2010 (Insured; FSA)....................................... 4,745,000 2,657,769
5.375%, 10/1/2013........................................................... 1,000,000 1,037,720
Refunding:
6%, 10/1/2008 (Insured; AMBAC)........................................... 2,490,000 2,812,181
6%, 10/1/2009 (Insured; AMBAC)........................................... 1,890,000 2,134,377
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------ ------------- -------------
<S> <C> <C>
New Jersey (continued)
Keansburg Board of Education, COP 8%, 11/1/2014 (Prerefunded 11/1/1999) (a).... $ 5,000,000 $ 5,441,350
Manchester Township Board of Education, COP
7.20%, 12/15/2009 (Prerefunded 12/15/1998) (Insured; MBIA) (a).............. 4,175,000 4,392,350
Monmouth County Improvement Authority, Revenue (Asbury Park Project)
7.375%, 12/1/2009 (Prerefunded 12/1/1999) (a)............................... 3,000,000 3,239,040
New Brunswick Parking Authority, Revenue, Refunding
7.125%, 9/1/2015 (Prerefunded 9/1/1999) (Insured; FGIC) (a)................. 2,000,000 2,130,920
State of New Jersey, Refunding 6%, 7/15/2010................................... 7,400,000 8,397,594
New Jersey Economic Development Authority, Revenue:
(Clara Maas Health System Project) 5%, 7/1/2025 (Insured; FSA).............. 7,975,000 7,811,592
(Community Mental Health Loan Program) 8.50%, 7/1/2017...................... 7,230,000 8,063,113
District Heating and Cooling
(Trigen - Trenton District Energy Co. L.P. Project):
6.10%, 12/1/2004...................................................... 3,375,000 3,636,664
6.20%, 12/1/2007...................................................... 2,725,000 2,886,810
Economic Development:
(American Airlines Inc. Project) 7.10%, 11/1/2031........................ 2,855,000 3,145,097
Refunding:
(Stolt Terminals Inc. Project) 10.50%, 1/15/2018...................... 9,440,000 9,769,173
(Tevco Inc. Project) 8.125%, 10/1/2009 (LOC; Credit Lyonnais) (d)..... 2,500,000 2,672,800
First Mortgage (The Evergreens) 9.25%, 10/1/2022 (Prerefunded 10/1/2002) (a) 5,000,000 6,123,800
Health, Hospital and Nursing Home, Refunding (Hillcrest Health Service):
Zero Coupon, 1/1/2012 (Insured; AMBAC)................................... 1,000,000 508,460
Zero Coupon, 1/1/2013 (Insured; AMBAC)................................... 1,000,000 480,950
Zero Coupon, 1/1/2015 (Insured; AMBAC)................................... 3,250,000 1,394,413
Zero Coupon, 1/1/2017 (Insured; AMBAC)................................... 5,000,000 1,927,650
Zero Coupon, 1/1/2018 (Insured; AMBAC)................................... 2,500,000 911,300
Zero Coupon, 1/1/2020 (Insured; AMBAC)................................... 6,500,000 2,137,395
Zero Coupon, 1/1/2022 (Insured; AMBAC)................................... 6,000,000 1,770,780
Refunding:
Lease (New Jersey Performing Arts Center Project) 5%, 6/15/2015 (Insured; AMBAC) 3,000,000 3,005,970
(Morris Hall / Saint Lawrence Inc. Project):
5.50%, 4/1/2016 (LOC; Corestates Bank) (d)............................ 1,000,000 1,029,120
5.50%, 4/1/2027 (LOC; Corestates Bank) (d)............................ 3,500,000 3,573,920
Waste Paper Recycling (Marcal Paper Mills Inc. Project):
6.25%, 2/1/2009.......................................................... 6,605,000 7,087,099
8.50%, 2/1/2010.......................................................... 5,850,000 6,917,567
Water Facilities:
(American Water Co. Inc. Project) 6.50%, 4/1/2022 (Insured; FGIC)........ 11,500,000 12,537,300
(Elizabeth Water Co. Project) 6.70%, 8/1/2021............................ 3,965,000 4,259,322
New Jersey Educational Facilities Authority, Revenue, Refunding
(Seton Hall University Project):
6.85%, 7/1/2019 (Prerefunded 7/1/1999) (Insured; BIGI) (a)............... 5,280,000 5,605,670
6.85%, 7/1/2019 (Insured; BIGI).......................................... 3,770,000 3,991,412
7%, 7/1/2021............................................................. 3,500,000 3,769,395
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
- -------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
New Jersey (continued)
New Jersey Health Care Facilities Financing Authority, Health, Hospital and Nursing
Home Revenue:
(Kimball Medical Center) 8%, 7/1/2013.................................... $ 13,000,000 $ 13,982,930
(Palisades Medical Center):
7.50%, 7/1/2006....................................................... 2,000,000 2,151,540
7.60%, 7/1/2021....................................................... 2,350,000 2,527,590
(Raritan Bay Medical Center) 7.25%, 7/1/2014............................. 13,000,000 14,093,040
Refunding:
(Atlantic Health Systems Hospital Corp.) 5%, 7/1/2027 (Insured; AMBAC) 5,750,000 5,637,013
(Saint Elizabeth Hospital Obligation Group):
6%, 7/1/2014....................................................... 2,500,000 2,644,850
6%, 7/1/2020....................................................... 3,000,000 3,160,620
(Saint Joseph's Hospital and Medical Center)
5.75%, 7/1/2016 (Insured; Connie Lee).............................. 1,800,000 1,910,754
New Jersey Housing and Mortgage Finance Agency, Revenue:
Multi-Family Housing:
5.40%, 11/1/2017 (Insured; AMBAC)........................................ 2,000,000 2,017,260
5.65%, 5/1/2040 (Insured; AMBAC)......................................... 15,000,000 15,127,650
Refunding (Presidential Plaza at Newport Project) 7%, 5/1/2030 (Insured; FHA) 5,000,000 5,432,700
Rental Housing (Tiffany Manor) 6.75%, 11/1/2022............................. 9,310,000 9,971,196
New Jersey Transit Corp., Lease Purchase Agreement, COP (Raymond Plaza East Inc.)
6.50%, 10/1/2016 (Insured; FSA)............................................. 3,945,000 4,459,980
New Jersey Transportation Trust Fund Authority, Refunding (Transportation System):
6.50%, 6/15/2011 (Insured; MBIA)............................................ 11,000,000 13,000,130
7%, 6/15/2012 (Insured; MBIA)............................................... 6,000,000 7,407,180
5%, 6/15/2015 (Insured; MBIA)............................................... 13,570,000 13,546,117
New Jersey Turnpike Authority, Turnpike Revenue, Refunding
6.50%, 1/1/2016 (Insured; MBIA)............................................. 14,665,000 17,440,351
North Hudson Sewer Authority, Sewer Revenue 5.125%, 8/1/2022 (Insured; FGIC)... 1,200,000 1,194,132
North Jersey District Water Supply Commission, Sewer Revenue (Wanaque South Project)
6%, 7/1/2019 (Insured; MBIA)................................................ 2,000,000 2,220,580
Ocean County Pollution Control Financing Authority, PCR, Refunding
(Ciba Geigy Corp. Project) 6%, 5/1/2020..................................... 11,700,000 12,446,928
Passaic County Utilities Authority, Solid Waste System Revenue 7%, 11/15/2007.. 1,500,000 1,516,980
Port Authority of New York and New Jersey:
(Delta Airlines Inc. Project) 6.95%, 6/1/2008............................... 7,200,000 7,924,392
Port, Airport, and Marina Improvements Revenue, Refunding 5.25%, 7/1/2014... 1,970,000 1,996,339
Special Obligation Revenue:
(U.S. Air LaGuardia Project) 9.125%, 12/1/2015........................... 6,500,000 7,365,020
(JFK International Air Terminal):
6.25%, 12/1/2015 (Insured; MBIA)...................................... 5,000,000 5,766,050
5.75%, 12/1/2022 (Insured; MBIA)...................................... 17,885,000 18,798,387
5.75%, 12/1/2025 (Insured; MBIA)...................................... 1,595,000 1,665,993
Rutgers University, College and University Revenue 5.20%, 5/1/2022............. 4,400,000 4,429,656
South Jersey Transportation Authority, Port, Airport and Marina Lease Revenue
(Raytheon Aircraft Service Inc. Project) 6.15%, 1/1/2022.................... 510,000 540,636
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------ ------------ ------------
<S> <C> <C>
New Jersey (continued)
Union City, Refunding 5.20%, 9/1/2012 (Insured; MBIA).......................... $ 8,000,000 $ 8,376,640
Union County Utilities Authority, Solid Waste Revenue:
7.15%, 6/15/2009............................................................ 2,750,000 2,774,695
7.20%, 6/15/2014............................................................ 10,000,000 10,089,600
University of Medicine and Dentistry 7.20%, 12/1/2019 (Prerefunded 12/1/1999) (a) 5,710,000 6,152,240
Western Monmouth Utilities Authority, Sewer Revenue, Refunding
5.60%, 2/1/2014 (Insured; AMBAC)............................................ 2,190,000 2,318,816
West New York Municipal Utilities Authority, Sewer Revenue, Refunding
7.30%, 12/15/2017 (Prerefunded 12/15/2000) (Insured; FGIC) (a).............. 6,250,000 6,924,688
U.S. Related --15.1%
Commonwealth of Puerto Rico:
5.40%, 7/1/2025............................................................. 6,300,000 6,395,886
Refunding:
6.50%, 7/1/2014 (Insured; MBIA).......................................... 7,260,000 8,637,295
5.65%, 7/1/2015 (Insured; MBIA).......................................... 2,000,000 2,184,800
Public Improvement 6.80%, 7/1/2021 (Prerefunded 7/1/2002) (a)............... 5,400,000 6,064,632
Puerto Rico Aqueduct and Sewer Authority, Revenue, Refunding
5%, 7/1/2019 (Insured; AMBAC)............................................... 10,325,000 10,164,653
Puerto Rico Electric Power Authority, Power Revenue 5.50%, 7/1/2025 (Insured; AMBAC) 5,000,000 5,123,350
Puerto Rico Highway and Transportation Authority, Highway Revenue:
6.437%, 7/1/2007 (b)........................................................ 11,100,000 12,140,625
6.435%, 7/1/2009 (b)........................................................ 2,950,000 3,197,063
7.75%, 7/1/2016 (Prerefunded 7/1/2000) (a).................................. 3,460,000 3,835,894
6.625%, Series S, 7/1/2018 (Prerefunded 7/1/2002) (a)....................... 13,000,000 14,507,350
6.625%, Series T, 7/1/2018 (Prerefunded 7/1/2002) (a)....................... 2,040,000 2,276,538
5%, 7/1/2036................................................................ 8,000,000 7,852,480
Puerto Rico Public Buildings Authority, Lease Revenue
5.25%, 7/1/2021 (Guaranteed; Commonwealth of Puerto Rico)................... 2,000,000 2,000,000
Puerto Rico Ports Authority, Special Facilities Revenue
(American Airlines Inc. Project) 6.25%, 6/1/2026 (Guaranteed; AMR Corp.).... 3,000,000 3,259,890
-------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $526,867,774)......................................................... $569,291,930
============
Short-Term Municipal Investments--2.1%
- -----------------------------------------------------------------------------
Port Authority of New York and New Jersey, Special Obligation Revenue,VRDN:
5% (SBPA; Morgan Guaranty Trust Co.) (e).................................... $ 2,200,000 $ 2,200,000
5.10% (SBPA; Landesbank Hessen - Thuringen) (e)............................. 10,000,000 10,000,000
------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $12,200,000).......................................................... $ 12,200,000
============
TOTAL INVESTMENTS--100.0%
(cost $539,067,774)......................................................... $581,491,930
============
</TABLE>
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
<TABLE>
Summary of Abbreviations
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
BIGI Bond Investors Guaranty Insurance MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
FHA Federal Housing Administration PCR Pollution Control Revenue
FNMA Federal National Mortgage Association SBPA Standby Bond Purchase Agreement
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
</TABLE>
Summary of Combined Ratings (Unaudited)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fitch (f) or Moody's or Standard & Poor's Percentage of Value
- --------- ------- ----------------- -------------------
<S> <C> <C> <C>
AAA Aaa AAA 57.4%
AA Aa AA 4.8
A A A 15.8
BBB Baa BBB 10.0
BB Ba BB 1.1
B B B 1.3
Not Rated (g) Not Rated (g) Not Rated (g) 9.6
_______
100.0%
=======
Notes to Statement of Investments:
- ------------------------------------------------------------------------------
<FN>
(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 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 December 31, 1997, this
security amounted to $15,892,956 or 2.7% of net assets.
(d) Secured by letters of credit.
(e) Securities payable on demand. The interest rate, which is subject to change,
is based upon bank prime rates or an index of market interest rates.
(f) Fitch currently provides creditworthiness information for a limited number
of investments.
(g) 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.
(h) At December 31, 1997, the Fund had $157,710,584 (26.5% of net assets)
invested in securities whose payment of principal and interest is dependent
upon revenues generated from transportation projects.
</FN>
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1997
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $539,067,774 $581,491,930
Cash............................................. 472,914
Interest receivable.............................. 10,058,659
Receivable for investment securities sold........ 4,673,007
Receivable for shares of Common Stock subscribed. 245
Prepaid expenses................................. 4,988
-------------
596,701,743
-------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 349,110
Due to Distributor............................... 8,689
Accrued expenses................................. 125,673
-------------
483,472
-------------
NET ASSETS..................................................................... $596,218,271
=============
REPRESENTED BY: Paid-in capital.................................. $553,071,158
Accumulated net realized gain (loss) on investments 722,957
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4.......................... 42,424,156
-------------
NET ASSETS..................................................................... $596,218,271
=============
SHARES OUTSTANDING
(500 million shares of $.001 par value Common Stock authorized)................ 44,658,305
NET ASSET VALUE, offering and redemption price per share--Note 3(d)............. $13.35
======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Operations Year Ended December 31, 1997
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................ $35,320,242
EXPENSES: Management fee--Note 3(a)................... $ 3,513,183
Shareholder servicing costs--Note 3(b)...... 1,783,777
Professional fees.......................... 65,455
Custodian fees............................. 55,398
Directors' fees and expenses--Note 3(c)..... 38,455
Registration fees.......................... 22,566
Prospectus and shareholders' reports--Note 3(b) 19,360
Loan commitment fees--Note 2................ 5,973
Miscellaneous.............................. 29,985
------------
Total Expenses........................... 5,534,152
Less--reduction in management fee due to
undertaking--Note 3(a)...................... (843,934)
------------
Net Expenses............................. 4,690,218
------------
INVESTMENT INCOME--NET.................................................... 30,630,024
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments.... $ 3,536,391
Net unrealized appreciation (depreciation)
on investments.......................... 15,879,094
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................... 19,415,485
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $50,045,509
============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1997 December 31, 1996
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................. $ 30,630,024 $ 33,319,748
Net realized gain (loss) on investments............................... 3,536,391 9,376,479
Net unrealized appreciation (depreciation) on investments............. 15,879,094 (22,801,500)
------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations..... 50,045,509 19,894,727
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net................................................. (30,630,024) (33,505,718)
Net realized gain on investments...................................... (4,017,268) (10,462,166)
------------- -------------
Total Dividends..................................................... (34,647,292) (43,967,884)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold......................................... 137,672,657 602,957,562
Dividends reinvested.................................................. 25,649,350 33,582,759
Cost of shares redeemed............................................... (176,451,075) (672,354,345)
------------- -------------
Increase (Decrease) in Net Assets from Capital Stock Transactions... (13,129,068) (35,814,024)
------------- -------------
Total Increase (Decrease) in Net Assets........................... 2,269,149 (59,887,181)
NET ASSETS:
Beginning of Period................................................... 593,949,122 653,836,303
------------- -------------
End of Period......................................................... $ 596,218,271 $ 593,949,122
============= =============
Shares Shares
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold .......................................................... 10,576,756 46,189,858
Shares issued for dividends reinvested................................ 1,956,865 2,568,077
Shares redeemed....................................................... (13,551,273) (51,413,282)
------------- -------------
Net Increase (Decrease) in Shares Outstanding....................... (1,017,652) (2,655,347)
============= =============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, 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 Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------
PER SHARE DATA: 1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .... $13.00 $13.53 $12.41 $14.03 $13.17
------ ------ ------ ------ ------
Investment Operations:
Investment income--net.................... .68 .72 .74 .78 .79
Net realized and unrealized gain (loss)
on investments......................... .44 (.30) 1.12 (1.61) .88
------ ------ ------ ------ ------
Total from Investment Operations......... 1.12 .42 1.86 (.83) 1.67
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net..... (.68) (.72) (.74) (.77) (.79)
Dividends from net realized gain on investments (.09) (.23) (.00)* -- (.02)
Dividends in excess of net realized gain
on investments......................... -- -- -- (.02) --
------ ------ ------ ------ ------
Total Distributions...................... (.77) (.95) (.74) (.79) (.81)
------ ------ ------ ------ ------
Net asset value, end of period .......... $13.35 $13.00 $13.53 $12.41 $14.03
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN..................... 8.84% 3.43% 15.29% (6.02%) 12.97%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets... .80% .80% .80% .77% .72%
Ratio of net investment income
to average net assets.................. 5.23% 5.46% 5.67% 5.94% 5.74%
Decrease reflected in above expense ratios
due to undertakings by the Manager..... .14% .14% .15% .20% .25%
Portfolio Turnover Rate ................. 28.01% 31.30% 24.37% 10.02% 6.05%
Net Assets, end of period (000's Omitted) $596,218 $593,949 $653,836 $577,525 $725,815
- ---------
<FN>
*Amount represents less than $.01 per share.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus New Jersey Municipal Bond Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company. The Fund's investment objective is to provide
investors with as high a level of current income exempt from Federal and New
Jersey income taxes as is consistent with the preservation of capital. The
Dreyfus Corporation ("Manager") serves as the Fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund
Services, Inc. (the "Distributor") is the distributor of the Fund's shares,
which are sold to the public without a sales load.
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 are valued each business
day by an independent pricing service ("Service") approved by the Fund's 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.
(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.
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 from investment income-net on each business day. 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. 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 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.
NOTE 2--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("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
December 31, 1997, the Fund did not borrow under the Facility.
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
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 .60 of 1% of the value of the
Fund's average daily net assets and is payable monthly. The Agreement provides
that if in any full fiscal year the aggregate expenses, exclusive of taxes,
brokerage, interest on borrowings, commitment fees and extraordinary expenses,
exceed 1 1/2 % of the value of the Fund's average daily net assets for any full
fiscal year, the Fund may deduct from payments to be made to the Manager, or the
Manager will bear such excess expense. The Manager had undertaken from January
1, 1997 through December 31, 1997 to reduce the management fee paid by the Fund,
to the extent that the Fund's aggregate annual expenses (exclusive of certain
expenses as described above) exceeded an annual rate of .80 of 1% of the value
of the Fund's average daily net assets. The reduction in management fee,
pursuant to the undertaking, amounted to $843,934 during the period ended
December 31, 1997.
(b) Under the Service Plan (the "Plan") adopted pursuant to Rule 12b-1 under
the Act, the Fund (a) reimburses the Distributor for payments to certain Service
Agents (a securities dealer, financial institution or other industry
professional) for distributing the Fund's shares and servicing shareholder
accounts ("Servicing") and (b) pays the Manager, Dreyfus Service Corporation, a
wholly-owned subsidiary of the Manager, and any affiliate of either of them
(collectively, "Dreyfus") for advertising and marketing relating to the Fund and
for Servicing, at an aggregate annual rate of .25 of 1% of the value of the
Fund's average daily net assets. Both the Distributor and Dreyfus may pay
Service Agents a fee in respect of the Fund's shares owned by shareholders with
whom the Service Agent has a Servicing relationship or for whom the Service
Agent is the dealer or holder of record. Both the Distributor and Dreyfus
determine the amount, if any, to be paid to Service Agents and the basis on
which such payments are made. The Plan also separately provides for the Fund to
bear the costs of preparing, printing and distributing certain of the Fund's
prospectuses and statements of additional information and costs associated with
implementing and operating the Plan, not to exceed the greater of $100,000 or
.005 of 1% of the value of the Fund's average daily net assets for any full
year. During the period ended December 31, 1997, the Fund was charged $1,472,855
pursuant to the Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended December 31, 1997, the Fund was charged $215,242 pursuant to the transfer
agency agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Director Emeritus receives 50% of such compensation.
(d) A 1% redemption fee is charged and retained by the Fund on certain
redemptions of Fund shares (including redemptions through use of the Fund
Exchanges service) where the shares being redeemed were issued subsequent to a
specified effective date and the redemption or exchange occurs less than fifteen
days following the date of issuance. During the period ended December 31, 1997,
redemption fees amounted to $801.
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended December 31, 1997,
amounted to $159,650,323 and $203,728,173, respectively.
At December 31, 1997, accumulated net unrealized appreciation on investments
was $42,424,156, consisting of $43,120,151 gross unrealized appreciation and
$695,995 gross unrealized depreciation.
At December 31, 1997, 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).
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus New Jersey Municipal Bond Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Dreyfus New Jersey Municipal Bond Fund, Inc., including the statement of
investments, as of December 31, 1997, 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 generally accepted auditing
standards. 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 December 31, 1997 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 New Jersey Municipal Bond Fund, Inc. at December 31, 1997, 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 generally accepted accounting
principles.
/s/Ernst & Young LLP
New York, New York
January 27, 1998
<PAGE>
Dreyfus New Jersey Municipal Bond Fund, Inc.
- -------------------------------------------------------------------------------
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended December 31, 1997:
--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 $.0357 per share as a long-term capital gain
distribution (of which 36.14% is subject to the 20% maximum Federal tax
rate) of the $.0613 per share paid on December 4, 1997. The Fund also
designates $.0288 per share as a long-term capital gain distribution paid
on August 6, 1997.
As required by Federal tax law rules, shareholders will receive notification
of their portion of the Fund's taxable ordinary dividends and capital gains
distributions paid for the 1997 calendar year on Form 1099-DIV which will be
mailed by January 31, 1998.
<PAGE>
Dreyfus New Jersey Municipal
Bond Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 WashingtonStreet
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 750AR9712
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
PERIOD LEHMAN BROTHERS DREYFUS NEW JERSEY
MUNICIPAL MUNICIPAL BOND
BOND INDEX * FUND
12/31/87 10,000 10,000
12/31/88 11,016 11,259
12/31/89 12,205 12,285
12/31/90 13,094 13,261
12/31/91 14,684 14,846
12/31/92 15,979 16,148
12/31/93 17,942 18,242
12/31/94 17,014 17,144
12/31/95 19,984 19,766
12/31/96 20,869 20,443
12/31/97 22,787 22,250
*Source: Lehman Brothers
