General
California Municipal
Bond Fund, 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 Fund Performance
7 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
15 Financial Highlights
16 Notes to Financial Statements
20 Report of Independent Auditors
21 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, 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. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620.
Thank you for investing in General California Municipal Bond Fund, Inc.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
October 16, 2000
2
DISCUSSION OF FUND PERFORMANCE
Paul Disdier, Portfolio Manager
How did General California Municipal Bond Fund, Inc. perform during the period?
The fund produced a 6.83% total return over the 12-month reporting period ended
September 30, 2000.(1) This compares to a 5.99% total return for the Lipper
California Municipal Debt Funds category average for the same period.(2)
We attribute our good relative performance to our duration management and
security selection strategies, which enabled the fund to take advantage of
municipal bond market rallies during the second half of the reporting period. We
are particularly pleased that our second-half gains more than offset the fund's
lackluster performance during the first half of the reporting period, when the
municipal bond market generally declined.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and California tax-exempt income
as is practical from a diversified portfolio of long-term municipal bonds from
California and other issuers.
To achieve this objective, we have constructed a portfolio designed to provide a
consistently high income stream. We find such income opportunities through
rigorous analyses of individual bond structures, paying particularly close
attention to each bond's yield, maturity and early redemption features. As a
result, the fund is composed primarily of revenue bonds backed by the income
generated from projects such as toll roads, transportation facilities, housing
projects, hospitals, special taxes and other sources throughout California.
Over time, some high-yielding bonds within the portfolio have matured or been
redeemed by their issuers. We have generally attempted to replace these bonds
with 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
The Fund 3
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
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 close to redemption or maturity, 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 potential credit-rating downgrades.
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 moves toward higher interest rates could be near an end. We maintained
an average effective duration -- a measure of sensitivity to changing interest
rates -- throughout the 12-month reporting period that was slightly longer than
other California tax-exempt municipal bonds. We were in a good position to
participate in the market rally when it began and, as bond prices improved, we
took profits in some of the deep discount bonds that had constrained performance
earlier. We also sold some of our pre-refunded bonds as they approached their
redemption dates.
In addition, our good relative 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 municipal bonds from other states.
California enjoyed healthy tax revenues and budget surpluses, which have
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.
4
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 more slightly defensive posture may now be appropriate. Accordingly, we
have recently emphasized bonds with competitive yields from well known issuers.
In our view, these bonds are likely to feature greater liquidity, making them
easier to sell in a downturn than bonds from less recognizable issuers.
In addition, although we have not yet begun to reduce the fund's average
effective duration, we are prepared to do so if interest rates appear ready to
rise. While our relatively long average effective duration enabled us to
maintain a competitive income stream during the reporting period, it may lead to
heightened price volatility over the near term if the economy heats up
unexpectedly.
October 16, 2000
(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 INC.
The Fund 5
<TABLE>
<CAPTION>
FUND PERFORMANCE
Exhibit A
--------------------------------------------------------------------------------
Average Annual Total Returns AS OF 9/30/00
1 Year 5 Years 10 Years
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FUND 6.83% 5.37% 6.78%
</TABLE>
((+)) SOURCE: LIPPER INC.
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 9/30/90 TO A $10,000 INVESTMENT MADE IN THE LEHMAN
BROTHERS MUNICIPAL BOND INDEX ON THAT DATE. ALL DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS ARE REINVESTED.
THE FUND INVESTS PRIMARILY IN CALIFORNIA MUNICIPAL SECURITIES AND ITS
PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT FEES AND EXPENSES. UNLIKE
THE FUND, THE LEHMAN BROTHERS MUNICIPAL BOND INDEX IS AN UNMANAGED TOTAL RETURN
PERFORMANCE BENCHMARK FOR THE LONG-TERM, INVESTMENT-GRADE, GEOGRAPHICALLY
UNRESTRICTED TAX-EXEMPT BOND MARKET, CALCULATED BY USING MUNICIPAL BONDS
SELECTED TO BE REPRESENTATIVE OF THE MUNICIPAL MARKET OVERALL. THE INDEX DOES
NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES AND IS NOT LIMITED TO
INVESTMENTS PRINCIPALLY IN CALIFORNIA MUNICIPAL OBLIGATIONS. THESE FACTORS CAN
CONTRIBUTE TO THE INDEX POTENTIALLY OUTPERFORMING OR UNDERPERFORMING THE FUND.
FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE
REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION
OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT.
6
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
September 30, 2000
Principal
LONG-TERM MUNICIPAL INVESTMENTS--98.6% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA--94.9%
ABAG Finance Authority, Nonprofit Corporations
<S> <C> <C>
MFHR (Central Park Apartments) 5.60%, 7/1/2038 5,000,000 4,889,700
Alameda County, COP (Various Financing Projects)
6%, 9/1/2021 (Insured; MBIA, LOC; The Fuji Bank) 2,945,000 3,110,951
Allan Hancock Joint Community College District, COP
7.625%, 10/1/2005 1,055,000 1,104,564
Anaheim Public Financing Authority:
LR (Public Improvements Project)
Zero Coupon, 9/1/2019 (Insured; FSA) 6,310,000 2,192,599
Tax Allocation Revenue
6.45%, 12/28/2018 (Insured; MBIA) 6,000,000 6,519,180
California:
4.50%, 10/1/2019 6,700,000 5,898,144
5.25%, 6/1/2021 (Insured; AMBAC) 3,000,000 2,956,980
5.25%, 9/1/2028 (Insured; FGIC) 5,000,000 4,839,750
California Educational Facilities Authority, Revenue
(College & University Projects) 5.625%, 7/1/2023 1,275,000 1,190,493
California Health Facilities Financing Authority, Revenue:
(Cedars-Sinai):
6.125%, 12/1/2030 2,000,000 2,020,900
6.25%, 12/1/2034 4,250,000 4,340,950
(HELP Group)
7%, 8/1/2021 (Insured; California Health Facilities
Construction Loan Program) 1,800,000 1,881,234
(Sutter Health) 6.25%, 8/15/2035 2,250,000 2,311,470
(Walden House) 6.85%, 3/1/2022 3,225,000 3,368,384
California Housing Finance Agency:
MFHR
6.15%, 8/1/2022 (Insured; AMBAC) 2,000,000 2,022,080
SFMR:
6%, 8/1/2016 (Insured; MBIA) 2,000,000 2,080,900
6.375%, 8/1/2027 2,250,000 2,343,285
California Pollution Control Financing Authority, PCR
7.108%, 6/1/2014 4,500,000 (a,b) 5,346,090
California Statewide Communities Development Authority,
COP:
(Catholic Healthcare West)
6.50%, 7/1/2020 3,500,000 3,529,190
Health Facilities Revenue (Barton Memorial Hospital)
6.50%, 12/1/2009
LOC; Banque Nationale De Paris) 1,600,000 1,669,168
(The Internext Group) 5.375%, 4/1/2030 5,000,000 4,365,600
The Fund 7
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
California Statewide Communities Development Authority (continued):
Special Facilities LR (United Airlines, Inc.):
5.675%, 10/1/2033 4,285,000 (a,b) 3,585,302
5.625%, 10/1/2034 3,200,000 2,902,848
5.526%, 10/1/2034 1,445,000 (a,b) 1,176,678
Capistrano Unified School District (Ladera)
5.75%, 9/1/2029 4,000,000 3,766,760
Castaic Lake Water Agency, COP, Revenue
(Water System Improvement Project)
Zero Coupon, 8/1/2027 10,000,000 2,110,600
Central Joint Powers Health Financing Authority, COP
(Community Hospitals of Central California) 6%, 2/1/2030 2,000,000 1,976,680
Commerce Joint Powers Financing Authority, Revenue
8%, 3/1/2022 (Prerefunded 3/1/2001) 2,325,000 (c) 2,411,165
Contra Costa County, Mortgage Revenue (Cedar Pointe)
6.15%, 9/1/2025 (Insured; FHA) 2,955,000 2,970,809
Contra Costa County Public Finance Authority, Tax
Allocation Revenue (Pleasant Hill ) 5.45%, 8/1/2028 3,000,000 2,839,350
Del Mar Race Track Authority, Revenue 6.20%, 8/15/2011 2,000,000 2,056,600
Fontana Public Financing Authority,
Tax Allocation Revenue
(North Fontana Redevelopment Project) 7.25%, 9/1/2020 2,000,000 2,041,720
Fontana Redevelopment Agency, Tax Allocation
(Jurupa Hills Redevelopment Project):
5.50%, 10/1/2019 3,500,000 3,331,685
5.50%, 10/1/2027 4,000,000 3,716,560
Foothill/Eastern Transportation Corridor Agency,
Toll Road Revenue:
Zero Coupon, 1/1/2015 8,800,000 4,142,952
5%, 1/15/2016 (Insured; MBIA) 3,000,000 2,963,460
Zero Coupon, 1/1/2028 24,000,000 4,900,080
Inglewood, HR (Daniel Freeman Hospital)
6.75%, 5/1/2013 (Prerefunded 5/1/2001) 2,000,000 (c) 2,072,060
Loma Linda, HR (Loma Linda University Medical
Center Project) 6%, 12/1/2023 2,900,000 2,394,791
Los Angeles County Unified School District
5%, 7/1/2017 (Insured; FGIC) 2,565,000 2,512,084
Los Angeles Department of Water and Power,
Waterworks Revenue:
4.50%, 10/15/2024 5,000,000 4,251,650
4.25%, 10/15/2030 (Insured; FGIC) 10,000,000 7,968,300
8
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
Newhall Elementary and Castaic Union School Districts,
COP (School Improvement Project)
7.70%, 3/1/2011 (Prerefunded 3/1/2001) 2,695,000 (c) 2,738,012
Northern California Power Agency, Public Power Revenue
(Hydroelectric Project Number 1)
6.30%, 7/1/2018 (Insured; MBIA) 20,400,000 23,093,616
Pomona Redevelopment Agency, Tax Allocation
(West Holt Avenue) 5.50%, 5/1/2032 3,000,000 2,765,430
Port Oakland, Special Facilities Revenue
(Mitsui O.S.K. Lines Limited)
6.80%, 1/1/2019 (LOC; Industrial Bank of Japan) 3,000,000 3,031,140
Rocklin Unified School District
(Communities Facilities District)
5.25%, 9/1/2017 (Insured; AMBAC) 1,210,000 1,217,441
Sacramento City Financing Authority, LR
5%, 11/1/2014 4,170,000 4,184,470
Sacramento County (Community Facilities District No. 1)
5.70%, 12/1/2020 2,250,000 2,144,902
San Bernardino, Health Care Systems Revenue
(Sisters of Charity)
7%, 7/1/2021 (Prerefunded 7/1/2001) 2,000,000 (c) 2,086,020
San Francisco City and County Airports Commission,
International Airport Revenue
5.90%, 5/1/2026 9,385,000 9,543,513
San Joaquin Hills Transportation Corridor Agency,
Toll Road Revenue
Zero Coupon, 1/1/2010 5,000,000 3,213,150
San Marcos Public Facilities Authority, Revenue
(Public Improvement-Civic Center) 6.20%, 8/1/2022 3,000,000 3,013,350
Santa Ana Financing Authority, Revenue
(South Harbor Boulevard) 5%, 9/1/2019 2,330,000 2,245,677
Santa Clara Redevelopment Agency, Tax Allocation
(Bayshore North Project) 5.25%, 6/1/2018 3,365,000 3,368,836
Southern California Home Finance Authority, SFMR
6.90%, 10/1/2024 (Collateralized: FNMA and GNMA) 1,140,000 1,173,356
Stockton, Health Facilities Revenue
(Dameron Hospital Association) 5.70%, 12/1/2014 1,000,000 914,420
Tehachapi Unified School District, COP
(Tompkins Elementary School Project)
7.80%, 2/1/2021 (Prerefunded 2/1/2001) 960,000 (c) 987,245
The Fund 9
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
Turlock, COP, Health Facilities Revenue,
(Emanuel Medical Center, Inc.) 5.75%, 10/15/2023 6,000,000 5,278,020
West Covina Redevelopment Agency, Special Tax
(Community Facilities District--Fashion Plaza):
6%, 9/1/2017 6,000,000 6,419,940
6%, 9/1/2022 8,325,000 8,769,055
Yolo County Housing Authority, Mortgage Revenue
(Walnut Park Apartments)
7.20%, 8/1/2033 (Insured; FHA) 4,150,000 4,348,910
U. S. RELATED--3.7%
Puerto Rico Commonwealth, Public Improvement
5.25%, 7/1/2017 3,000,000 3,016,380
Puerto Rico Commonwealth Highway &
Transportation Authority, Transportation Revenue
6%, 7/1/2039 2,000,000 2,072,780
Puerto Rico Commonwealth Infrastructure
Financing Authority
5.375%, 10/1/2024 3,750,000 3,710,100
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $227,314,120) 233,409,509
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--.5%
------------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority,
Special Facilities Revenue, VRDN 3.25%
(cost $1,100,000) 1,100,000 (d) 1,100,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $228,414,120) 99.1% 234,509,509
CASH AND RECEIVABLES (NET) .9% 2,255,851
NET ASSETS 100.0% 236,765,360
10
</TABLE>
<TABLE>
<CAPTION>
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond HR Hospital Revenue
Assurance Corporation
COP Certificate of Participation LOC Letter of Credit
FGIC Financial Guaranty Insurance LR Lease Revenue
Company
FHA Federal Housing Administration MBIA Municipal Bond Investors
Assurance Insurance Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance MFHR Multi-Family Housing Revenue
GNMA Government National Mortgage PCR Pollution Control Revenue
Association
SFMR Single Family Mortgage Revenue
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 43.0
AA Aa AA 9.7
A A A 19.8
BBB Baa BBB 17.0
BB Ba BB 1.5
F-1+, F-1 MIG1, VMIG1, P1 SP1, A1 .5
Not Rated (e) Not Rated( e) Not Rated (e) 8.5
100.0
(A) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE PERIODICALLY.
(B) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT
OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT SEPTEMBER 30, 2000,
THESE SECURITIES AMOUNTED TO $10,108,070 OR 4.3% OF NET ASSETS.
(C) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND INTEREST
ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE EARLIEST REFUNDING
DATE.
(D) SECURITIES PAYABLE ON DEMAND. THE INTEREST RATE, WHICH IS SUBJECT TO
CHANGE, IS BASED UPON BANK PRIME RATES OR AN INDEX OF MARKET INTEREST RATES.
(E) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 11
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 228,414,120 234,509,509
Cash 541,953
Interest receivable 3,602,551
Receivable for investment securities sold 1,993,889
Prepaid expenses 3,475
240,651,377
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 128,787
Payable for investment securities purchased 3,687,900
Payable for shares of Common Stock redeemed 15,003
Accrued expenses 54,327
3,886,017
--------------------------------------------------------------------------------
NET ASSETS ($) 236,765,360
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 236,349,004
Accumulated undistributed investment income--net 32,633
Accumulated net realized gain (loss) on investments (5,711,666)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 6,095,389
--------------------------------------------------------------------------------
NET ASSETS ($) 236,765,360
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(500 million shares of $.001 par value Common Stock authorized) 18,594,878
NET ASSET VALUE, offering and redemption price per share-Note 3(d) ($) 12.73
SEE NOTES TO FINANCIAL STATEMENTS.
12
STATEMENT OF OPERATIONS
Year Ended September 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 14,357,492
EXPENSES:
Management fee--Note 3(a) 1,431,240
Shareholder servicing costs--Note 3(b) 271,154
Professional fees 43,081
Directors' fees and expenses--Note 3(c) 28,824
Custodian fees 25,973
Prospectus and shareholders' reports 11,563
Registration fees 10,653
Loan commitment fees--Note 2 2,420
Miscellaneous 16,583
TOTAL EXPENSES 1,841,491
INVESTMENT INCOME--NET 12,516,001
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (5,720,057)
Net unrealized appreciation (depreciation) on investments 8,530,646
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 2,810,589
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 15,326,590
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 13
STATEMENT OF CHANGES IN NET ASSETS
Year Ended September 30,
--------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 12,516,001 13,781,187
Net realized gain (loss) on investments (5,720,057) 1,692,790
Net unrealized appreciation (depreciation)
on investments 8,530,646 (25,647,206)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 15,326,590 (10,173,229)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (12,483,368) (13,781,187)
Net realized gain on investments (1,076,586) (3,728,567)
TOTAL DIVIDENDS (13,559,954) (17,509,754)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 30,430,619 28,900,088
Dividends reinvested 9,379,434 12,441,976
Cost of shares redeemed (63,397,504) (51,083,362)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS (23,587,451) (9,741,298)
TOTAL INCREASE (DECREASE) IN NET ASSETS (21,820,815) (37,424,281)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 258,586,175 296,010,456
END OF PERIOD 236,765,360 258,586,175
Undistributed investment income--net 32,633 --
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 2,477,659 2,150,109
Shares issued for dividends reinvested 760,931 929,452
Shares redeemed (5,149,965) (3,847,560)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,911,375) (767,999)
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
14
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.
Year Ended September 30,
-------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 12.61 13.91 13.51 13.35 13.30
Investment Operations:
Investment income--net .65 .65 .67 .69 .70
Net realized and unrealized
gain (loss) on investments .17 (1.13) .48 .41 .19
Total from Investment Operations .82 (.48) 1.15 1.10 .89
Distributions:
Dividends from investment income--net (.65) (.65) (.68) (.70) (.68)
Dividends from net realized
gain on investments (.05) (.17) (.07) (.24) (.16)
Total Distributions (.70) (.82) (.75) (.94) (.84)
Net asset value, end of period 12.73 12.61 13.91 13.51 13.35
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 6.83 (3.62) 8.76 8.56 6.85
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .77 .78 .77 .76 .76
Ratio of net investment income
to average net assets 5.25 4.85 4.91 5.15 5.25
Portfolio Turnover Rate 47.12 51.80 63.60 90.03 164.93
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 236,765 258,586 296,010 291,545 296,798
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 15
</TABLE>
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. Effective March 22, 2000,
Dreyfus Service Corporation ("DSC"), a wholly-owned subsidiary of the Manager,
became the distributor of the fund's shares which are sold to the public without
a sales charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was
the distributor.
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
16
each business day. 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. Under the terms of the custody
agreement, the fund received net earnings credits of $9,569 during the period
ended September 30, 2000, based on available cash balances left on deposit.
Income earned under this arrangement is included in interest income.
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, 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.
The Fund 17
The fund has an unused capital loss carryover of approximately $1,715,000
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, the carryover expires in fiscal 2008.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 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, 2000, 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 DSC 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, 2000, the fund was charged $159,000 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
18
fund. During the period ended September 30, 2000, the fund was charged $72,088
pursuant to the transfer agency agreement.
(c) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $50,000 and an attendance fee of $6,500 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 April 13, 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 $500 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.
(d) A .10% redemption fee is charged and retained by the fund on shares redeemed
within thirty days following the date of issuance, including on redemptions made
through the use of the fund's exchange privilege. Prior to June 1, 2000, this
fee was chargeable within fifteen days following the date of issuance of such
shares. During the period ended September 30, 2000, redemption fees retained by
the fund amounted to $47.
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
$109,542,919 and $125,500,813, respectively.
At September 30, 2000, accumulated net unrealized appreciation on investments
was $6,095,389, consisting of $10,469,073 gross unrealized appreciation and
$4,373,684 gross unrealized depreciation.
At September 30, 2000, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund 19
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, 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
confirmation of securities owned as of September 30, 2000 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, 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 3, 2000 [ERNST & YOUNG LLP SIGNATURE LOGO]
20
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended September 30, 2000:
-all the dividends paid from investment income-net are "exempt-interest
dividends" (not generally subject to regular Federal income tax and, for
individuals who are California residents, California personal income taxes),
and
-the fund hereby designates $.0537 per share as a long-term capital gain
distribution paid on December 9, 1999.
As required by Federal tax law rules, shareholders will receive notification of
their portion of the fund's taxable ordinary dividends (if any) and capital gain
distributions (if any) paid for the 2000 calendar year on Form 1099-DIV which
will be mailed by January 31, 2001.
The Fund 21
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
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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) 2000 Dreyfus Service Corporation 131AR009
