General
California Municipal
Bond Fund, Inc.
ANNUAL REPORT September 30, 1999
(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
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
16 Financial Highlights
17 Notes to Financial Statements
21 Report of Independent Auditors
22 Important Tax Information
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
General California
Municipal Bond Fund, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for General California Municipal
Bond Fund, Inc. covering the 12-month period from October 1, 1998 through
September 30, 1999. 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.
The past year has been mixed for municipal bond investors. Lower short-term
interest rates adopted by the Federal Reserve Board in the fall of 1998 helped
the U.S. economy withstand the effects of economic weakness in Japan, Asia and
Latin America. As interest rates declined, the prices of many municipal bonds
appreciated.
Soon after 1999 began, however, evidence emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999. Higher interest rates led to erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past year, and we look forward to your
continued participation in General California Municipal Bond Fund, Inc.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
October 15, 1999
DISCUSSION OF FUND PERFORMANCE
Paul Disdier, Portfolio Manager
How did General California Municipal Bond Fund, Inc. perform during the period?
The fund produced a -3.62% total return over the 12-month period ended September
30, 1999,(1) compared to a -3.12% total return for the average fund in the
Lipper California Municipal Debt Funds category.(2) We attribute this
performance to our security selection strategy, which emphasizes high-yielding
securities for income.
What is the fund's investment approach?
Our goal is to seek a high level of federal and California tax-exempt income
from a diversified portfolio of long-term municipal bonds from California
issuers.
To achieve this objective, we have constructed a portfolio designed to provide
consistently high-income streams. We find such income opportunities through
rigorous analysis of each bond's structure, paying particularly close attention
to each bond's yield, maturity and early redemption features. As a result, the
portfolio is composed primarily of higher yielding revenue bonds backed by the
income generated from housing projects, toll roads, transportation facilities,
hospitals, special taxes and other sources throughout California.
Over time, higher yielding bonds within the portfolio have matured or been
redeemed by their issuers. We have generally attempted to replace these bonds
with new securities that offer higher-than-average income payments. This
strategy is designed to help maximize income. We also look to upgrade the
portfolio with newly issued bonds that, in our opinion, have better structural
or income characteristics than existing holdings. When such opportunities arise,
we will usually sell bonds that are approaching their redemption or maturity
dates, a strategy intended to protect the fund's net asset value. In addition,
we conduct extensive credit analysis of our holdings in an attempt to avoid
owning securities which might undergo potential defaults on interest and
principal payments.
The Fund 3
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was affected by changing interest rates over the past year. When the
reporting period began on October 1, 1998, investors were concerned about the
potentially adverse economic effects of the global currency and credit crisis,
which had spread from Asia to Russia and was threatening Latin America. In
response, the Federal Reserve Board reduced short-term interest rates last fall
in an attempt to stimulate global economic growth.
The Fed's strategy apparently was effective. Economies in Japan and Southeast
Asia appear to have halted their deterioration early in 1999, and the growth of
the U.S. economy was stronger than most analysts expected. Municipal bond yields
and prices stabilized in this environment. In the second and third quarters,
however, strong economic growth raised concerns among fixed-income investors
that inflationary pressures might re-emerge. The Fed increased short-term
interest rates twice during the summer of 1999 in an attempt to forestall
inflationary pressures. This change in monetary policy caused municipal bond
prices to fall.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of U.S. Government taxable bond yields relative to
tax-exempt bonds. As a result, municipal bonds -- including those from
California issuers -- are currently offering tax-exempt yields that compare very
favorably with taxable yields after adjusting for taxes.
What is the fund's current strategy?
We have recently attempted to position the fund for opportunities to upgrade its
holdings and maintain or enhance its income distributions. More specifically, we
have raised cash in anticipation of potentially higher interest rates by selling
pre-refunded bonds as well as bonds in
4
the 10- to 15-year maturity range. These sales contributed to the fund's 4% cash
position as of September 30. We may redeploy these liquid assets in the weeks
ahead, when an expected spate of new bond issuance drives yields higher. In our
view, toward the end of the year, issuers are likely to move to the sidelines
and wait until after January 1, 2000 to raise capital in the municipal debt
markets in order to avoid potential Y2K-related market disruptions. Yet demand
for municipal bonds from California investors should remain high from
individuals seeking to minimize their income tax liabilities.
October 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL
TAXES FOR NON-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) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund 5
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in General California
Municipal Bond Fund, Inc. and the Lehman Brothers Municipal Bond Index
- --------------------------------------------------------------------------------
Average Annual Total Returns AS OF 9/30/99
<TABLE>
Inception From
Date 1 Year 5 Years Inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FUND 10/10/89 (3.62%) 5.96% 6.79%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN GENERAL CALIFORNIA
MUNICIPAL BOND FUND, INC. ON 10/10/89 (INCEPTION DATE) TO A $10,000 INVESTMENT
MADE IN THE LEHMAN BROTHERS MUNICIPAL BOND INDEX ON THAT DATE. FOR COMPARATIVE
PURPOSES, THE VALUE OF THE INDEX ON 9/30/89 IS USED AS THE BEGINNING VALUE ON
10/10/89. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THE FUND INVESTS PRIMARILY IN CALIFORNIA MUNICIPAL SECURITIES AND ITS
PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT FEES AND EXPENSES. UNLIKE
THE FUND, THE LEHMAN BROTHERS MUNICIPAL BOND INDEX IS AN UNMANAGED TOTAL RETURN
PERFORMANCE BENCHMARK FOR THE LONG-TERM, INVESTMENT-GRADE, GEOGRAPHICALLY
UNRESTRICTED TAX EXEMPT BOND MARKET, CALCULATED BY USING MUNICIPAL BONDS
SELECTED TO BE REPRESENTATIVE OF THE MUNICIPAL MARKET OVERALL. THE INDEX DOES
NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES AND IS NOT LIMITED TO
INVESTMENTS PRINCIPALLY IN CALIFORNIA MUNICIPAL OBLIGATIONS. THESE FACTORS CAN
CONTRIBUTE TO THE INDEX POTENTIALLY OUTPERFORMING THE FUND. FURTHER INFORMATION
RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE,
IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE
IN THIS REPORT.
6
STATEMENT OF INVESTMENTS
September 30, 1999
<TABLE>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--95.0% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CALIFORNIA--92.6%
ABAG Finance Authority, Nonprofit Corporations:
COP, Revenue (Channing House) 5.50%, 2/15/2029 4,100,000 3,734,321
MFHR (Central Park Apartments) 5.60%, 7/1/2038 5,000,000 4,699,850
MFHR (Civic Center Drive Apartments)
5.875%, 9/1/2032 (Insured; FSA) 3,785,000 3,784,773
Alameda County, COP (Various Financing Projects)
6%, 9/1/2021 (Insured; MBIA, LOC; The Fuji Bank) 4,750,000 4,874,118
Allan Hancock Joint Community College District, COP
7.625%, 10/1/2005 1,055,000 1,133,081
Anaheim Public Financing Authority,
Tax Allocation Revenue
6.45%, 12/28/2018 (Insured; MBIA) 6,000,000 6,451,200
Beaumont Unified School District, COP
(Capital Improvement Project)
7.70%, 1/1/2021 (Prerefunded 1/1/2001) 1,100,000 (a) 1,171,412
California:
4.50%, 4/1/2013 (Insured; MBIA) 3,600,000 3,293,820
4.50%, 10/1/2019 8,500,000 7,153,005
California Educational Facilities Authority, Revenue:
(Chapman College)
7.50%, 1/1/2018 (Prerefunded 1/1/2001) 1,760,000 (a) 1,871,584
(College & University Projects) 5.625%, 7/1/2023 1,275,000 1,212,423
California Health Facilities Financing Authority
Revenue:
(HELP Group)
7%, 8/1/2021 (Insured; California Health Facilities
Construction Loan Program) 1,800,000 1,899,882
(Walden House) 6.85%, 3/1/2022 3,225,000 3,394,151
California Housing Finance Agency:
MFHR:
6.15%, 8/1/2022 (Insured; AMBAC) 3,850,000 3,928,425
6.05%, 8/1/2038 (Insured; MBIA) 2,500,000 2,526,375
SFMR:
6%, 8/1/2016 (Insured; MBIA) 2,000,000 2,038,440
6.375%, 8/1/2027 2,250,000 2,305,440
7.60%, 8/1/2030 870,000 883,537
7.70%, 8/1/2030 675,000 690,950
California Pollution Control Financing Authority, PCR
8.536%, 6/1/2014 4,500,000 (b,c) 5,078,250
California Public Works Board, LR (Trustees California
State University) 5.25%, 10/1/2013 1,575,000 1,558,856
The Fund 7
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
California Statewide Communities Development Authority:
COP:
Health Facilities Revenue (Barton Memorial Hospital)
6.50%, 12/1/2009
(LOC; Banque Nationale De Paris) 1,600,000 1,687,536
(The Internext Group) 5.375%, 4/1/2030 5,000,000 4,394,850
Special Facilities LR (United Airlines, Inc.):
7.326%, 10/1/2033 4,285,000 (b,c) 3,697,784
7.177%, 10/1/2034 1,445,000 (b,c) 1,212,095
Capistrano Unified School District (Ladera)
5.75%, 9/1/2029 4,000,000 3,782,080
Commerce Joint Powers Financing Authority, Revenue
8%, 3/1/2022 (Prerefunded 3/1/2001) 2,365,000 (a) 2,543,155
Contra Costa County, Mortgage Revenue (Cedar Pointe)
6.15%, 9/1/2025 (Insured; FHA) 2,955,000 3,011,411
Contra Costa County Public Finance Authority, Tax
Allocation Revenue (Pleasant Hill) 5.45%, 8/1/2028 4,000,000 2,723,400
Del Mar Race Track Authority, Revenue 6.20%, 8/15/2011 2,000,000 2,087,840
Fontana Public Financing Authority,
Tax Allocation Revenue
(North Fontana Redevelopment Project) 7.25%, 9/1/2020 2,000,000 2,067,700
Fontana Redevelopment Agency, Tax Allocation Revenue
(Jurupa Hills Redevelopment Project):
5.50%, 10/1/2019 2,000,000 1,892,200
5.50%, 10/1/2027 5,000,000 4,672,500
Foothill/Eastern Transportation Corridor Agency,
Toll Road Revenue:
6%, 1/1/2034 (Prerefunded 1/1/2007) 5,000,000 (a) 5,438,400
5%, 1/1/2035 4,955,000 4,209,223
5.75%, 1/15/2040 5,000,000 4,763,200
Inglewood, HR (Daniel Freeman Hospital)
6.75%, 5/1/2013 (Prerefunded 5/1/2001) 2,000,000 (a) 2,123,260
Loma Linda, HR (Loma Linda University Medical
Center Project) 6%, 12/1/2023 2,900,000 2,740,993
Los Angeles County, COP, (Disney Parking Project)
Zero Coupon, 9/1/2019 (Insured; AMBAC) 7,990,000 2,526,198
Los Angeles County Metropolitan Transportation Authority,
Sales Tax Revenue:
6%, 7/1/2026 (Insured; MBIA, Prerefunded 7/1/2006) 5,000,000 (a) 5,489,100
5%, 7/1/2026 (Insured; AMBAC) 2,340,000 2,097,155
8
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
Los Angeles Department of Water and Power,
Waterworks Revenue:
4.50%, 10/15/2024 5,000,000 4,109,800
4.25%, 10/15/2030 (Insured; FGIC) 10,000,000 7,703,900
M-S-R Public Power Agency, Power Revenue
(San Juan Project) 5.90%, 7/1/2020 6,890,000 6,889,931
Newhall Elementary and Castaic Union School Districts,
COP (School Improvement Project)
7.70%, 3/1/2011 (Prerefunded 3/1/2001) 2,695,000 (a) 2,835,517
Northern California Power Agency, Public Power Revenue
(Hydroelectric Project Number 1)
6.30%, 7/1/2018 (Insured; MBIA) 20,400,000 22,254,768
Port Oakland, Special Facilities Revenue
(Mitsui O.S.K. Lines Limited)
6.80%, 1/1/2019 (LOC; Industrial Bank of Japan) 3,000,000 3,090,120
Sacramento County (Community Facilities District No. 1)
5.70%, 12/1/2020 1,250,000 1,187,900
San Bernardino, Health Care Systems Revenue
(Sisters of Charity)
7%, 7/1/2021 (Prerefunded 7/1/2001) 2,000,000 (a) 2,142,520
San Diego County, COP, (Downtown Courthouse)
4.50%, 5/1/2023 (Insured; AMBAC) 1,500,000 1,246,800
San Francisco City and County Airports Commission,
International Airport Revenue 5.90%, 5/1/2026 9,385,000 9,415,689
San Joaquin Hills Transportation Corridor Agency,
Toll Road Revenue:
Zero Coupon, 1/1/2010 5,000,000 2,965,650
Zero Coupon, 1/15/2034 (Insured; MBIA) 20,000,000 2,647,200
Zero Coupon, 1/15/2036 (Insured; MBIA) 18,000,000 2,102,580
San Marcos Public Facilities Authority, Revenue
(Public Improvement-Civic Center) 6.20%, 8/1/2022 3,000,000 3,021,720
San Marcos Unified School District
(School Facilities Improvement District Number 1)
5.80%, 11/1/2014 (Insured; AMBAC) 3,540,000 3,659,687
Santa Cruz County Redevelopment Agency, Tax Allocation
(Subordinated-Live Oak/Soquel Community Improvement)
5.625%, 9/1/2022 1,835,000 1,786,538
Simi Valley, Single Family Residential Mortgage Revenue
7.625%, 8/1/2022 997,866 (d) 169,637
The Fund 9
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
Southern California Home Finance Authority, SFMR
6.90%, 10/1/2024 (Collateralized: FNMA and GNMA) 1,455,000 1,497,864
Stockton, Health Facilities Revenue
(Dameron Hospital Association) 5.70%, 12/1/2014 1,000,000 959,730
Tehachapi Unified School District, COP
(Tompkins Elementary School Project)
7.80%, 2/1/2021 (Prerefunded 2/1/2001) 985,000 (a) 1,044,967
Tracy Area Public Facilities Financing Agency, Special Tax
(Community Facilities District No. 87-1)
5.875%, 10/1/2013 (Insured; MBIA) 7,000,000 7,262,360
Turlock, COP, Health Facilities Revenue
(Emanuel Medical Center, Inc.) 5.75%, 10/15/2023 6,000,000 5,657,520
West Covina Redevelopment Agency, Special Tax
(Community Facilities District--Fashion Plaza):
6%, 9/1/2017 6,000,000 6,202,140
6%, 9/1/2022 8,325,000 8,518,140
Yolo County Housing Authority, Mortgage Revenue
(Walnut Park Apartments)
7.20%, 8/1/2033 (Insured; FHA) 4,150,000 4,385,139
U.S. RELATED--2.4%
Guam Power Authority, Revenue 5.25%, 10/1/2034 2,000,000 1,767,060
Puerto Rico Commonwealth, Public Improvement
5.25%, 7/1/2017 3,000,000 2,874,420
Virgin Islands Public Finance Authority
6%, 10/1/2022 1,505,000 1,502,201
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $248,180,728) 245,745,471
10
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--3.8% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA--(CONTINUED)
California Pollution Control Financing Authority, SWDR,
VRDN (Shell Martinez Refining--A) 3.50% 2,200,000 (e) 2,200,000
California Pollution Control Financing Authority, SWDR,
VRDN (Shell Martinez Refining--B) 3.75% 2,000,000 (e) 2,000,000
California Economic Development Financing Authority,
Revenue, VRDN (Independent Systems Project) 3.50% 500,000 (e) 500,000
California Statewide Communities Development Authority,
VRDN (Retired Officers) 3.80% (LOC; Dresdner Bank) 4,000,000 (e) 4,000,000
Newport Beach, Revenue, VRDN
(Hoag Memorial Hospital) 3.85% 1,000,000 (e) 1,000,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $9,700,000) 9,700,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $257,880,728) 98.8% 255,445,471
CASH AND RECEIVABLES (NET) 1.2% 3,140,704
NET ASSETS 100.0% 258,586,175
The Fund 11
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
FGIC Financial Guaranty Insurance
Company
FHA Federal Housing Administration
FNMA Federal National Mortgage
Association
FSA Financial Security Assurance
GNMA Government National Mortgage
Association
HR Hospital Revenue
LOC Letter of Credit
LR Lease Revenue
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 39.5
AA Aa AA 8.7
A A A 18.0
BBB Baa BBB 21.4
BB Ba BB 1.1
D N/A D .1
F-1+ & F-1 MIG1, VMIG1 & P1 SP1 & A1 3.8
Not Rated (f) Not Rated (f) Not Rated (f) 7.4
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND INTEREST
ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE EARLIEST REFUNDING
DATE.
(B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES 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, 1999,
THESE SECURITIES AMOUNTED TO $9,988,129 OR 3.9% OF NET ASSETS.
(D) NON-INCOME PRODUCING SECURITY; INTEREST PAYMENTS IN DEFAULT.
(E) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE SUBJECT TO PERIODIC
CHANGE.
(F) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
12
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 257,880,728 255,445,471
Cash 214,594
Receivable for investment securities sold 97,750
Interest receivable 3,964,750
Prepaid expenses 6,584
259,729,149
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 134,828
Payable for investment securities purchased 950,951
Accrued expenses 57,195
1,142,974
- --------------------------------------------------------------------------------
NET ASSETS ($) 258,586,175
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 259,936,455
Accumulated net realized gain (loss) on investments 1,084,977
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (2,435,257)
- --------------------------------------------------------------------------------
NET ASSETS ($) 258,586,175
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(500 million shares of $.001 par value Common Stock authorized) 20,506,253
NET ASSET VALUE, offering and redemption price per share- Note 3(d) ($) 12.61
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 13
STATEMENT OF OPERATIONS
Year Ended September 30, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 15,990,686
EXPENSES:
Management fee--Note 3(a) 1,706,478
Shareholder servicing costs--Note 3(b) 336,108
Professional fees 51,884
Directors' fees and expenses--Note 3(c) 32,081
Custodian fees 28,316
Prospectus and shareholders' reports 21,615
Registration fees 14,847
Loan commitment fees--Note 2 1,270
Miscellaneous 16,900
TOTAL EXPENSES 2,209,499
INVESTMENT INCOME--NET 13,781,187
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 1,692,790
Net unrealized appreciation (depreciation) on investments (25,647,206)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (23,954,416)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (10,173,229)
SEE NOTES TO FINANCIAL STATEMENTS.
14
STATEMENT OF CHANGES IN NET ASSETS
Year Ended September 30,
-----------------------------------
1999 1998
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 13,781,187 14,308,634
Net realized gain (loss) on investments 1,692,790 3,116,198
Net unrealized appreciation (depreciation)
on investments (25,647,206) 7,160,883
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (10,173,229) 24,585,715
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (13,781,187) (14,504,662)
Net realized gain on investments (3,728,567) (1,543,915)
TOTAL DIVIDENDS (17,509,754) (16,048,577)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 28,900,088 43,599,346
Dividends reinvested 12,441,976 11,154,889
Cost of shares redeemed (51,083,362) (58,825,931)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS (9,741,298) (4,071,696)
TOTAL INCREASE (DECREASE) IN NET ASSETS (37,424,281) 4,465,442
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 296,010,456 291,545,014
END OF PERIOD 258,586,175 296,010,456
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 2,150,109 3,196,561
Shares issued for dividends reinvested 929,452 817,966
Shares redeemed (3,847,560) (4,319,009)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (767,999) (304,482)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 15
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.
<TABLE>
Year Ended September 30,
----------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 13.91 13.51 13.35 13.30 12.90
Investment Operations:
Investment income--net .65 .67 .69 .70 .73
Net realized and unrealized
gain (loss) on investments (1.13) .48 .41 .19 .48
Total from Investment Operations (.48) 1.15 1.10 .89 1.21
Distributions:
Dividends from investment income--net (.65) (.68) (.70) (.68) (.73)
Dividends from net realized gain
on investments (.17) (.07) (.24) (.16) (.08)
Total Distributions (.82) (.75) (.94) (.84) (.81)
Net asset value, end of period 12.61 13.91 13.51 13.35 13.30
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (3.62) 8.76 8.56 6.85 9.82
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .78 .77 .76 .76 .76
Ratio of net investment income
to average net assets 4.85 4.91 5.15 5.25 5.66
Portfolio Turnover Rate 51.80 63.60 90.03 164.93 83.31
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 258,586 296,010 291,545 296,798 317,835
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
16
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
General California Municipal Bond Fund, Inc. (the "fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company. The fund's investment objective is to
maximize current income exempt from Federal and State of 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. Premier Mutual Fund
Services, Inc. is the distributor of the fund's shares, which are sold to the
public without a sales charge.
The fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of 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 fund securities) are carried at fair value
as determined by the Service, based on methods which include consideration of:
yields or prices of municipal securities of comparable quality, coupon, maturity
and type; indications as to values from dealers; and general market conditions.
Options and financial futures on municipal and U.S. treasury securities are
valued at the last sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on the national
securities market on each business day. Investments not listed on an exchange or
the
The Fund 17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
national securities market, or securities for which there were no transactions,
are valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund receives net earnings credits based on available cash
balances left on deposit.
The fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the fund.
(c) Dividends to shareholders: It is the policy of the fund to declare dividends
daily from investment income-net. Such dividends are paid monthly. Dividends
from net realized capital gain are normally declared and paid annually, but the
fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
" Code"). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
18
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
September 30, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .60 of 1% of the value of the fund's average
daily net assets and is payable monthly.
(b) Under the Shareholder Services Plan, the fund reimburses Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, an amount not to exceed
an annual rate of .25 of 1% of the value of the fund's average daily net assets
for certain allocated expenses of providing personal services and/or maintaining
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the period ended
September 30, 1999, the fund was charged $206,611 pursuant to the Shareholder
Services 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 September 30, 1999, the fund was charged $88,523 pursuant to the transfer
agency agreement.
The Fund 19
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A .10% redemption fee is charged and retained by the fund on shares redeemed
within fifteen days following the date of issuance, including on redemptions
made through the use of the fund's Exchange privilege. During the period ended
September 30, 1999, redemption fees retained by the fund amounted to $36.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended September 30, 1999, amounted to
$145,401,721 and $170,987,149, respectively.
At September 30, 1999, accumulated net unrealized depreciation on investments
was $2,435,257, consisting of $7,351,800 gross unrealized appreciation and
$9,787,057 gross unrealized depreciation.
At September 30, 1999, 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).
20
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
General California Municipal Bond Fund, Inc.
We have audited the accompanying statement of assets and liabilities of General
California Municipal Bond Fund, Inc., including the statement of investments, as
of September 30, 1999, 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 September 30, 1999 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
General California Municipal Bond Fund, Inc. at September 30, 1999, 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.
[ERNST & YOUNG LLP Signature logo]
New York, New York
November 03, 1999
The Fund 21
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended September 30, 1999:
- --all the dividends paid from investment income-net are "exempt-interest
dividends" (not generally subject to regular Federal income tax and, for
individuals who are California residents, California personal income taxes), an
- --the fund hereby designates $.0806 per share as a long-term capital gain
distribution of the $.1749 per share paid on December 9, 1998.
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 1999 calendar year on Form 1099-DIV which
will be mailed by January 31, 2000
22
NOTES
For More Information
General California 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
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to
[email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 1999 Dreyfus Service Corporation 131AR999
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN GENERAL CALIFORNIA MUNICIPAL BOND FUND, INC.
AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
LEHMAN GENERAL
BROTHERS CALIFORNIA
PERIOD MUNICIPAL MUNICIPAL
BOND INDEX * BOND FUND, INC.
10/10/89 10,000 10,000
9/30/90 10,680 10,676
9/30/91 12,088 11,888
9/30/92 13,351 13,114
9/30/93 15,053 15,086
9/30/94 14,685 14,418
9/30/95 16,328 15,834
9/30/96 17,314 16,919
9/30/97 18,875 18,367
9/30/98 20,520 19,977
9/30/99 20,377 19,254
*Source: Lehman Brothers