Dreyfus
California Municipal Income, 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
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
19 Report of Independent Auditors
20 Dividend Reinvestment Plan
22 Important Tax Information
23 Proxy Results
25 Officers and Directors
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus California
Municipal Income, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus California Municipal
Income, 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 California Municipal Income, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
October 16, 2000
DISCUSSION OF FUND PERFORMANCE
Paul Disdier, Portfolio Manager
How did Dreyfus California Municipal Income, Inc. perform during the period?
The fund produced a 5.33% total return over the 12-month reporting period ended
September 30, 2000.(1) In addition, the fund provided income dividends of
$0.5160 per share, which is equal to an annualized distribution rate of 6.25%
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 partially 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 income exempt from federal and California state
income taxes by investing primarily in long-term California municipal bonds.
In doing so, we have constructed a portfolio by looking for income opportunities
through analysis of each bond's structure, including paying close attention to a
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. When
we believe that an opportunity presents itself, we 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. This
strategy is intended to 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. As the market
rallied, we took advantage of differences among bonds from various market
sectors. For example, we reduced our exposure to the health care industry, which
is currently under pressure from regulatory reform, and replaced some securities
with income-oriented bonds from other types of issuers. We also sold part of a
particularly large holding for diversification purposes, which is part of our
risk management strategy.
In addition, the fund' s performance was partly the result of the ongoing
strength of the California economy, which helped keep municipal bond yields
relatively low, and prices high, compared to bonds from other states. California
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 remarkably strong from California residents seeking
to protect their newly created wealth.
What is the fund's current strategy?
While we have been pleased with the municipal bond market's strong performance
so far in 2000, we are currently growing more cautious. Modest price declines in
September may suggest that municipal bonds have been fairly to highly valued,
and a slightly more defensive posture may now be appropriate. Accordingly, we
have allowed the fund's average effective duration -- a measure of sensitivity
to changing interest rates -- to decline naturally as holdings approach their
redemption dates.
In addition, we have continued to search the marketplace for competitive yields
as the fund's holdings have matured or been called by their issuers. In fact, we
expect some of our long-standing holdings to be called in October 2000. However,
we have generally not been able to replace maturing and called bonds with new
securities at the same yields. That's primarily because prevailing interest
rates are lower now than when the fund began operations.
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 $ 8 1_4
Shares Outstanding September 30, 2000 4,572,972
American Stock Exchange Ticker Symbol DCM
MARKET PRICE (AMERICAN STOCK EXCHANGE)
<TABLE>
<CAPTION>
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 $91_2 $85_16 $81_8 $811_16
Low 75_8 75_16 77_16 81_16
Close 81_16 79_16 81_8 81_4
PERCENTAGE GAIN (LOSS) based on change in Market Price*
October 21, 1988 (commencement of operations) through September 30,
2000 74.31%
October 1, 1990 through September 30, 2000 64.93
October 1, 1995 through September 30, 2000 36.13
October 1, 1999 through September 30, 2000 (8.70)
January 1, 2000 through September 30, 2000 7.19
April 1, 2000 through September 30, 2000 12.42
July 1, 2000 through September 30, 2000 3.02
NET ASSET VALUE PER SHARE
October 21, 1988 (commencement of operations) $ 9.22
September 30, 1999 8.98
December 31, 1999 8.59
March 31, 2000 8.67
June 30, 2000 8.65
September 30, 2000 8.88
PERCENTAGE GAIN based on change in Net Asset Value*
October 21, 1988 (commencement of operations) through September 30,
2000 103.50%
October 1, 1990 through September 30, 2000 78.95
October 1, 1995 through September 30, 2000 30.26
October 1, 1999 through September 30, 2000 5.33
January 1, 2000 through September 30, 2000 8.29
April 1, 2000 through September 30, 2000 5.54
July 1, 2000 through September 30, 2000 4.15
*WITH DIVIDENDS REINVESTED.
</TABLE>
STATEMENT OF INVESTMENTS
September 30, 2000
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--100.6% Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CALIFORNIA--88.8%
Abag Financial Authority For Nonprofit Corps, MFHR
(Central Park Apartments) 5.60%, 7/1/2038 815,000 797,021
Bakersfield Central District Development Agency,
Tax Allocation Revenue
(Downtown Bakersfield Redevelopment)
6.625%, 4/1/2015 (Prerefunded 4/1/2003) 1,000,000 (a) 1,076,490
California 6.180%, 12/1/2018 375,000 (b,c) 375,773
California Department of Water Resources, Revenue
(Central Valley Project) 7.809%, 12/1/2026
(Prerefunded 6/1/2002) 900,000 (a,b,c) 992,394
California Health Facilities Financing Authority, Revenue:
Health Facilities Financing (Cedars-Sinai Medical Center)
6.125%, 12/1/2030 1,000,000 1,010,450
(Sutter Health) 6.25%, 8/15/2035 750,000 770,490
California Pollution Control Finance Authority:
PCR 7.108%, 6/1/2014 1,000,000 (b) 1,188,020
SWDR:
(Browning Ferris Industries):
5.80%, 12/1/2016 2,000,000 1,774,920
6.75%, 9/1/2019 600,000 587,430
(Keller Canyon Landfill Co. Project) 6.875%, 11/1/2027 1,000,000 990,820
California Public Works Board, LR
(Various University of California Projects)
6.60%, 12/1/2022 (Prerefunded 12/1/2002) 800,000 (a) 856,536
California Statewide Community Development Authority, LR
5.675%, 10/1/2033 1,000,000 (b) 836,710
California Statewide Community Development Authority, COP:
(Catholic Healthcare West) 6.50%, 7/1/2020 500,000 504,170
(The Internext Group) 5.375%, 4/1/2030 1,300,000 1,135,056
Capistrano Unified School District, Special Tax:
(Community Facilities District Number 87-1-Aliso Vieio)
8.375%, 10/1/2020 (Prerefunded 10/1/2000) 2,000,000 (a) 2,040,480
(Community Facilities District Number 98-2-Ladera)
5.75%, 9/1/2029 1,000,000 941,690
Central California Joint Powers Health Financing Authority, COP
(Community Hospitals of Central California) 6%, 2/1/2030 1,000,000 988,340
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
Emeryville Public Financing Authority, Revenue
(Shellmound Park Redevelopment Project)
6.80%, 5/1/2014 (Prerefunded 5/1/2004) 500,000 (a) 551,890
Escondido Improvement Bond, Act of 1915
(Reassessment District Number 98) 5.70%, 9/2/2026 450,000 427,972
Foothill/Eastern Transportation Corridor Agency,
Toll Road Revenue
5.75%, 1/15/2040 870,000 850,695
Long Beach Special Tax Community Facilities District No. 5
(Towne Center) 6.875%, 10/1/2025 500,000 515,640
Palmdale Civic Authority, Revenue
(Merged Redevelopment Project Areas):
6.60%, 9/1/2034 (Prerefunded 9/1/2004) 590,000 (a) 651,283
6.60%, 9/1/2034 410,000 431,996
Redwood Empire Financing Authority, COP 6.40%, 12/1/2023 2,750,000 2,828,705
Sacramento County, Community Facilities District Number 1,
Special Tax
5.70%, 12/1/2020 750,000 714,968
Sacramento County Housing Authority, MFHR
(Cottage Estate Apartments) 6%, 2/1/2033 1,000,000 1,010,890
San Diego County, COP:
5.70%, 2/1/2028 1,000,000 951,220
(Burnham Institute) 6.25%, 9/1/2029 1,000,000 1,020,970
San Joaquin Hills Transportation Corridor Agency,
Toll Road Revenue
6.75%, 1/1/2032 (Prerefunded 1/1/2003) 1,000,000 (a) 1,074,140
San Jose, MFHR
8.487%, 4/1/2012 2,857,500 (b,c) 2,986,973
Santa Cruz County Public Financing Authority,
Tax Allocation Revenue
6.20%, 9/1/2023 2,000,000 2,072,840
Torrance Redevelopment Agency, Tax Allocation Revenue
5.625%, 9/1/2028 500,000 467,995
Turlock Health Facility, COP (Emanuel Medical Center)
5.75%, 10/15/2023 2,500,000 2,199,175
Valley Health System, HR, (Improvement Project)
6.50%, 5/15/2025 500,000 463,090
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. RELATED--11.8%
Commonwealth of Puerto Rico Highway and Transportation
Authority, Transportation Revenue, 5.06%, 7/1/2038 1,000,000 (b,c) 799,250
Commonwealth of Puerto Rico
Infrastructure Financing Authority,
Special Tax Revenue, 4.875%, 7/1/2015 1,000,000 (b,c) 974,180
Guam Power Authority, Revenue 6.75%, 10/1/2024
(Prerefunded 10/1/2004) 1,000,000 (a) 1,103,210
Virgin Islands Public Finance Authority, Revenue,
Subordinated Lien-Fund Loan Notes 6%, 10/1/2022 2,000,000 1,907,380
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TOTAL INVESTMENTS (cost $40,745,647) 100.6% 40,871,252
LIABILITIES, LESS CASH AND RECEIVABLES (.6%) (254,627)
NET ASSETS 100.0% 40,616,625
The Fund
</TABLE>
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
COP Certificate of Participation
HR Hospital Revenue
LR Lease Revenue
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
SWDR Solid Waste Disposal Revenue
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa Aaa 29.5
AA Aa AA 2.4
A A A 16.5
BBB Baa BBB 28.3
BB Ba BB 8.2
Not Rated (d) Not Rated( d) Not Rated (d) 15.1
100.0
</TABLE>
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND INTEREST
ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE EARLIEST REFUNDING
DATE.
(B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES 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 $6,128,570, OR 15.1% OF NET ASSETS.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
Cost Value
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ASSETS ($):
Investments in securities--See Statement of Investments 40,745,647 40,871,252
Interest receivable 886,669
Prepaid expenses 3,545
41,761,466
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LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 27,861
Cash overdraft due to Custodian 1,065,634
Accrued expenses 51,346
1,144,841
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NET ASSETS ($) 40,616,625
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 42,301,357
Accumulated undistributed investment income--net 50,697
Accumulated net realized gain (loss) on investments (1,861,034)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 125,605
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NET ASSETS ($) 40,616,625
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SHARES OUTSTANDING
(110 million shares of $.001 par value Common Stock authorized) 4,572,972
NET ASSET VALUE PER SHARE ($) 8.88
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Year Ended September 30, 2000
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INVESTMENT INCOME ($):
INTEREST INCOME 2,619,361
EXPENSES:
Management fee--Note 3(a) 277,295
Directors' fees and expenses--Note 3(c) 35,513
Professional fees 32,667
Shareholders' reports 27,190
Shareholder servicing costs--Note 3(b) 25,561
Registration fees 11,333
Custodian fees--Note 3(b) 3,479
Miscellaneous 10,631
TOTAL EXPENSES 423,669
INVESTMENT INCOME--NET 2,195,692
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (216,011)
Net unrealized appreciation (depreciation) on investments (58,608)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (274,619)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,921,073
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended September 30,
-------------------------------
2000 1999
-------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 2,195,692 2,197,147
Net realized gain (loss) on investments (216,011) 212,824
Net unrealized appreciation (depreciation)
on investments (58,608) (3,469,414)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,921,073 (1,059,443)
-------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (2,359,525) (2,568,624)
-------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
DIVIDENDS REINVESTED--NOTE 1(C) 24,026 273,386
TOTAL INCREASE (DECREASE) IN NET ASSETS (414,426) (3,354,681)
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 41,031,051 44,385,732
END OF PERIOD 40,616,625 41,031,051
Undistributed investment income--net 50,697 214,530
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
INCREASE IN SHARES OUTSTANDING AS A
RESULT OF DIVIDENDS REINVESTED 2,724 28,556
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
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 shares.
<TABLE>
<CAPTION>
Year Ended September 30,
-------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 8.98 9.77 9.71 9.52 9.21
Investment Operations:
Investment income--net .48 .48 .52 .53 .70
Net realized and unrealized
gain (loss) on investments (.06) (.71) .12 .23 .10
Total from Investment Operations .42 (.23) .64 .76 .80
Distributions:
Dividends from investment income--net (.52) (.56) (.58) (.57) (.49)
Net asset value, end of period 8.88 8.98 9.77 9.71 9.52
Market value, end of period 81_4 95_8 107_16 101_4 81_4
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) (8.70) (2.21) 7.98 32.14 6.86
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.07 1.02 1.00 .98 1.06
Ratio of net investment income
to average net assets 5.54 5.09 5.34 5.57 7.53
Portfolio Turnover Rate 20.44 25.65 19.28 26.38 3.30
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 40,617 41,031 44,386 43,838 42,847
(A) CALCULATED BASED ON MARKET VALUE.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus California Municipal Income, Inc. (the "fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
closed-end management investment company. The fund's investment objective is to
maximize current income exempt from Federal and California personal income taxes
to the extent consistent with the preservation of capital. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. ("Mellon"), which is a wholly-owned
subsidiary of Mellon Financial Corporation. The fund's shares trade on the
American Stock Exchange under the ticker symbol DCM.
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 The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
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: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net are declared and paid monthly. Dividends
from net realized capital gain if any are declared and paid at least annually.
To the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the fund not to distribute such gain.
For shareholders who elect to receive their distributions in additional shares
of the fund, in lieu of cash, such distributions will be reinvested at the lower
of the market price or net asset value per share (but not less than 95% of the
market price) as defined in the dividend reinvestment plan.
On September 29, 2000, the Board of Directors declared a cash dividend of $.041
per share from investment income-net, payable on October 27, 2000 to
shareholders of record as of the close of business on October 13, 2000.
(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 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
The fund has an unused capital loss carryover of approximately $1,508,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to September 30, 2000. This
amount is calculated based on federal income tax regulations which may differ
from financial reporting in accordance with generally accepted accounting
principles. If not applied, $286,000 of the carryover expires in fiscal 2004 and
$1,222,000 expires in fiscal 2005.
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 .70 of 1% of the value of the
fund' s average weekly net assets and is payable monthly. The Agreement provides
that if in any full year the aggregate expenses of the fund, exclusive of taxes,
interest on borrowings, brokerage fees and extraordinary expenses, exceed the
expense limitation of any state having jurisdiction over the fund, the fund may
deduct from payments to be made to the Manager, or the Manager will bear the
amount of such excess to the extent required by state law. There was no expense
reimbursement for the period ended September 30, 2000.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(b) The fund compensates Mellon under a transfer agency agreement for providing
personnel and facilities to perform transfer agency services for the fund.
During the period ended September 30, 2000, the fund was charged $25,561
pursuant to the transfer agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended September 30, 2000, the fund was
charged $3,479 pursuant to the custody agreement.
(c) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective August 3, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $45,000 and an attendance fee of $5,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to August 3, 2000, each Board member who was not an
" affiliated person" as defined in the Act received from the fund an annual fee
of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
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
$8,921,098 and $7,949,699, respectively.
At September 30, 2000, accumulated net unrealized appreciation on investments
was $125,605, consisting of $1,379,190 gross unrealized appreciation and
$1,253,585 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).
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus California Municipal Income, Inc.
We have audited the accompanying statement of assets and liabilities of Dreyfus
California Municipal Income, 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 California Municipal Income, 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
The Fund
DIVIDEND REINVESTMENT PLAN (Unaudited)
Under the fund's Dividend Reinvestment Plan (the "Plan"), a holder of the Common
Stock (" Common Shareholder" ) who has fund shares registered in his name will
have all dividends and distributions reinvested automatically by Mellon, 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 dividends and 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 or distribution.
A Common Shareholder who has fund shares registered in his name may elect to
withdraw from the Plan at any time for a $5.00 fee and thereby elect to receive
cash in lieu of shares of the fund. Changes in elections must be in writing,
sent to Mellon Bank, c/o ChaseMellon Shareholder Services, Shareholder
Investment Plan, P.O. Box 3338, South Hackensack, New Jersey 07606, 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 ten business days prior to the
record date for any distribution.
DIVIDEND REINVESTMENT PLAN (Unaudited) (CONTINUED)
The Agent maintains all 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 in connection with the reinvestment
of dividends or distributions.
The fund reserves the right to amend or terminate the Plan as applied to 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.
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby designates all the dividends
paid from investment income-net during the fiscal year ended September 30, 2000
as "exempt-interest dividends" (not generally subject to regular Federal income
tax and, for individuals who are California residents, California personal
income taxes).
As required by Federal tax law rules, shareholders will receive notification of
their portion of the fund's taxable ordinary dividends (if any) and capital gain
distributions (if any) paid for the 2000 calendar year on Form 1099-DIV which
will be mailed by January 31, 2001.
PROXY RESULTS (Unaudited)
During the fiscal year ended September 30, 2000, shareholders voted on the
following proposals presented at the annual shareholders' meeting held on May
19, 2000. The description of each proposal and the number of shares voted are as
follows:
<TABLE>
<CAPTION>
Shares
----------------------------------------------
For Authority Withheld
----------------------------------------------
To elect three Class I Directors:*
<S> <C> <C>
Lucy Wilson Benson 3,763,758 89,745
David W. Burke 3,765,695 87,808
Martin D. Fife 3,762,158 91,345
Shares
------------------------------------------------------------------------------
For Against Abstained
------------------------------------------------------------------------------
To ratify the selection of
Ernst & Young LLP as
independent auditors for
the fund 3,766,603 15,220 61,680
* THE TERMS OF THESE CLASS I DIRECTORS EXPIRE IN 2003.
The Fund
</TABLE>
OFFICERS AND DIRECTORS
Dreyfus California Municipal Income, Inc.
200 Park Avenue
New York, NY 10166
DIRECTORS
Joseph S. DiMartino, Chairman
Lucy Wilson Benson
David W. Burke
Martin D. Fife
Whitney I. Gerard
Robert R. Glauber
Arthur A. Hartman
George L. Perry
Paul Wolfowitz
OFFICERS
President
Stephen E. Canter
Vice President
Mark N. Jacobs
Vice President and Treasurer
Joseph Connolly
Executive Vice President
Paul Disdier
Secretary
Michael A. Rosenberg
Assistant Secretary
Steven F. Newman
Assistant Secretary
Robert R. Mullery
Assistant Treasurer
Gregory S. Gruber
PORTFOLIO MANAGERS
Joseph P. Darcy
A. Paul Disdier
PORTFOLIO MANAGERS (CONTINUED)
Douglas J. Gaylor
Joseph A. Irace
Colleen A. Meehan
Richard J. Moynihan
W. Michael Petty
Scott Sprauer
Samuel J. Weinstock
Monica S. Wieboldt
INVESTMENT ADVISER
The Dreyfus Corporation
CUSTODIAN
Mellon Bank, N.A.
COUNSEL
Stroock & Stroock & Lavan LLP
TRANSFER AGENT, DIVIDEND DISTRIBUTION AGENT AND REGISTRAR
Mellon Bank, N.A.
STOCK EXCHANGE LISTING
AMEX Symbol: DCM
INITIAL SEC EFFECTIVE DATE
10/21/88
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 California Municipal Income, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Distribution Agent and Registrar
Mellon Bank, N.A.
85 Challenger Road
Ridgefield Park, NJ 07660
(c) 2000 Dreyfus Service Corporation 426AR009
