Dreyfus
Growth and Income
Fund
SEMIANNUAL REPORT
April 30, 1999
<PAGE>
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.
<PAGE>
Contents
THE FUND
2 Letter from the President
3 Discussion of Fund Performance
6 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
FOR MORE INFORMATION
- ----------------------
Back Cover
<PAGE>
Dreyfus Growth and
Income Fund
The Fund
LETTER FROM THE PRESIDENT
- -------------------------
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Growth and
Income Fund, covering the six-month period from November 1, 1998 through
April 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, Douglas D. Ramos.
The past six months have been rewarding for many equity investors. Strong
economic growth, low inflation and high levels of consumer spending supported
continued strength in the stocks of many large companies. The Federal Reserve
Board's lowering of short-term interest rates in the fall of 1998 appears to
have helped U.S. businesses withstand the effects of economic weakness in
Japan, Asia and Latin America. As a result, several major market indices set
new records, including the Dow Jones Industrial Average's first-
ever close above the 10,000 level. The broader S&P 500 Index and the
technology-laden NASDAQ Index also recorded new highs.
Yet, until near the end of the six-month period, the stock market's advance
remained relatively narrow, confined to a handful of highly valued growth and
technology stocks. In April, however, some previously out-of-favor market
sectors rallied strongly, including large-cap cyclical companies as well as
some small- and midcap stocks.
We appreciate your confidence over the past six months, and we look forward
to your continued participation in Dreyfus Growth and Income Fund.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
- ------------------------------
Douglas D. Ramos, Portfolio Manager
How did Dreyfus Growth and Income Fund perform relative to its benchmark?
The Fund produced a strongly positive total return of 17.02% during the six-
month period that ended April 30, 1999.1 However, performance fell short of
the Standard & Poor's 500 Composite Stock Price Index's (S&P 500) 22.31%
total return for the same period.2
We attribute this performance to the rapid recovery of global capital markets
in the wake of last summer's decline, a recovery that was especially strong
among a narrow group of very large growth stocks. Since the S&P 500 is
heavily weighted toward such companies, the Index rose more rapidly than the
Fund's portfolio.
What is the Fund's investment approach?
Dreyfus Growth and Income Fund invests primarily in mid-sized and large
companies that we believe have above-average growth potential and are
attractively valued relative to the S&P 500. We generally avoid the risks
associated with market timing by remaining fully invested.
We generally gauge a stock's relative value by looking at its price in relation
to the company's business prospects and intrinsic worth, as measured by a wide
range of financial and business data. By examining each company's fundamentals,
together with economic and industry trends, we typically look for factors that
could trigger a rise in the stock's price, such as new competitive opportunities
or internal operational improvements.
The result of our approach during the recent six-month period was a portfolio
of approximately 75 selected stocks in a variety of industries, some of which
showed notable strength throughout the period. The financial industry, which
represented the Fund's single largest group of holdings, responded well to
the evident health of the U.S. economy and the apparent stabilization of many
global economies. The Fund shared in those gains through investments in more
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
than a dozen banking, investment and insurance institutions, including such
strong performers as American International Group, Citigroup and Chase
Manhattan.
The Fund also invested more heavily than the benchmark in consumer-based
industries. Strong consumer demand boosted our holdings in automobile
companies, such as General Motors; cruise lines, such as Carnival; and
retailers, such as Dayton-Hudson. In the energy industry, companies such as
Mobil and BP Amoco A.D.S. climbed in response to industry mergers, production
limits instituted by the Organization of Petroleum Exporting Countries
(OPEC), and growing global demand. Several of our technology holdings also
rose sharply, including Sun Microsystems. On the other hand, some technology
holdings, such as Compaq, performed disappointingly in the face of strong
competitive pressures.
What other factors influenced the Fund's performance?
As we mentioned earlier, the steep rise of the benchmark was driven by the
performance of an extremely narrow group of companies. During the first three
months of the reporting period, only eighteen stocks in the S&P 500 accounted
for all of that Index's return. While the Fund benefited from owning several
of these stocks, such as International Business Machines and MCI Worldcom,
others failed to meet our value-oriented investment criteria. Our performance
relative to our benchmark suffered because we did not own these stocks.
However, the last three weeks of the period saw a dramatic shift in investor
sentiment in favor of value-oriented stocks. The Fund clearly benefited from
this shift, particularly in the traditional value sectors of basic materials,
with companies such as Alcoa, and capital goods, with companies such as Tyco
International. We took further advantage of the changing investment
environment during the final weeks of the period with additional purchases of
stocks in these sectors, such as International Paper, Dow Chemical and Alcoa.
4
<PAGE>
Utility stocks did not benefit from this shift in investment sentiment as
much as most other traditional value sectors. Although the Fund realized
gains from investments in a few particularly strong performers, such as AT&T,
others, such as Duke Energy, lost ground during the period.
What is the Fund's current strategy?
By the end of the reporting period, we have adjusted our strategy in an
effort to give the Fund added flexibility to hold stocks that are moderately
valued relative to the benchmark, as well as those that are undervalued. In
the past, our investment discipline often led us to avoid moderately valued
stocks with excellent growth potential, or to sell a stock relatively early
in its growth cycle, causing the Fund to miss out on subsequent appreciation.
We believe this strategy will better position the Fund.
May 13, 1999
1 Total return includes reinvestment of dividends and any capital gains
paid.
2 SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
The Fund 5
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Common Stocks--100.4% Shares Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Basic Industries--1.2%
Dow Chemical 83,000 10,888,563
International Paper 161,000 8,583,312
19,471,875
Chemicals--.1%
Rohm & Haas 20,400 914,175
Commercial Services--.6%
Fortune Brands 41,500 1,639,250
McGraw-Hill Cos. 154,400 8,530,600
10,169,850
Consumer Durables--6.3%
Black & Decker 225,400 12,791,450
Ford Motor 560,900 35,862,544
General Motors 285,000 25,347,187
Leggett & Platt 586,500 13,526,156
Newell Rubbermaid 368,100 17,461,743
104,989,080
Consumer Non-Durables--3.3%
Anheuser-Busch Cos. 251,000 18,354,375
Kimberly-Clark 175,000 10,729,687
PepsiCo 466,000 17,212,875
Philip Morris Cos. 241,100 8,453,568
54,750,505
Consumer Services--5.5%
CBS 113,000 5,148,563
Carnival 662,300 27,319,875
Cendant 1,437,400 a 25,873,200
Gannett 182,800 12,944,525
McDonald's 220,000 9,322,500
Time Warner 168,200 11,774,000
92,382,663
Electronic Technology--12.2%
Applied Materials 142,000 a 7,614,750
Boeing 227,800 9,254,375
Compaq Computer 222,000 4,953,375
Ericsson (LM) Telephone, Cl. B, A.D.R. 129,000 3,483,000
Hewlett-Packard 244,600 19,292,825
Intel 584,000 35,733,500
International Business Machines 198,000 41,419,125
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Common Stocks (continued) Shares Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Electronic Technology (continued)
Lexmark International Group, Cl. A 174,600 a 21,563,100
Lockheed Martin 284,900 12,268,506
Motorola 147,000 11,778,375
Northern Telecom 124,000 8,455,250
Sun Microsystems 138,000 a 8,254,125
Texas Instruments 132,000 13,480,500
United Technologies 44,500 6,446,938
203,997,744
Energy--.2%
Burlington Resources 73,000 3,362,563
Energy Minerals--4.6%
Exxon 229,000 19,021,313
Lyondell Petrochemical 97,400 1,899,300
Mobil 112,000 11,732,000
Royal Dutch Petroleum, A.D.R 479,000 28,111,312
Texaco 143,500 9,004,625
USX-Marathon Group 242,000 7,562,500
77,331,050
Entertainment--.2%
Promus Hotel 95,000 a 3,420,000
Finance--18.8%
American Express 51,000 6,665,062
American General 115,300 8,532,200
American International Group 177,617 20,858,896
Associates First Capital, Cl. A 258,000 11,432,625
Bank One 153,000 9,027,000
BankAmerica 442,400 31,852,800
BankBoston 190,000 9,310,000
CIGNA 273,700 23,863,219
Chase Manhattan 252,000 20,853,000
Citigroup 496,100 37,331,525
Federal Home Loan Mortgage 329,000 20,644,750
Federal National Mortgage Association 362,500 25,714,844
First Union 175,500 9,718,313
Fleet Financial Group 249,000 10,722,563
Household International 132,800 6,681,500
Morgan (J.P.) 68,000 9,163,000
Morgan Stanley Dean Witter 211,500 20,978,156
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited)(continued)
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Common Stocks (continued) Shares Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Finance (continued)
UnionBanCal 35,000 1,194,375
Wells Fargo 402,000 17,361,375
Xl Capital Limited, Cl. A 199,900 12,131,431
314,036,634
Health Care--1.3%
Astrazeneca 422,000 16,520,021
McKesson HBOC 125,000 4,375,000
20,895,021
Health Services--2.5%
Columbia/HCA Healthcare 989,700 24,433,219
Wellpoint Health Networks 234,700 16,487,675
40,920,894
Health Technology--6.1%
American Home Products 283,000 17,263,000
Becton, Dickinson 174,800 6,500,375
Bristol-Myers Squibb 298,000 18,941,625
Johnson & Johnson 191,000 18,622,500
Merck & Co. 228,000 16,017,000
Pharmacia & Upjohn 441,700 24,735,200
102,079,700
Industrial Services--.1.3%
Schlumberger 180,000 11,497,500
Waste Management 175,675 9,925,638
21,423,138
Interest Sensitive--.3%
Washington Mutual 119,000 4,893,875
Non-energy Minerals--.5%
Alcoa 123,000 7,656,750
Process Industries--1.2%
duPont (E.I.) deNemours & Co. 131,000 9,251,875
Mead 273,000 11,414,813
20,666,688
Producer Manufacturing--10.9%
AlliedSignal 444,000 26,085,000
Emerson Electric 139,000 8,965,500
General Electric 445,000 46,947,500
Honeywell 185,000 17,528,750
8
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Common Stocks (continued) Shares Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Producer Manufacturing (continued)
Industrial Flexible Material 725,000 a,c --
Ingersoll--Rand 98,000 6,780,375
Masco 909,600 26,719,500
Tyco International 387,000 31,443,750
Xerox 299,600 17,601,500
182,071,875
Railroads--.5%
Burlington Northern Santa Fe 245,000 8,973,125
Retail Trade--7.6%
American Stores 522,900 16,504,031
Dayton Hudson 500,000 33,656,250
Federated Department Stores 363,000 a 16,947,562
Kroger 227,500 a 12,356,094
May Department Stores 586,350 23,344,059
TJX Cos. 720,200 23,991,663
126,799,659
Technology--1.0%
Compuware 206,000 5,021,250
NCR 158,000 6,478,000
Silicon Graphics 334,500 4,264,875
15,764,125
Technology Services--.9%
Computer Associates International 215,000 9,177,812
Oracle 205,000 5,547,813
14,725,625
Transportation--.4%
AMR 101,000 7,051,063
Utilities--12.9%
AT&T 574,500 29,012,250
Bell Atlantic 346,000 19,938,250
Coastal 512,800 19,614,600
El Paso Energy 192,000 7,056,000
Enron 119,000 8,954,750
GTE 521,000 34,874,438
MCI WorldCom 380,700 a 31,288,781
Niagara Mohawk Power 181,000 2,420,875
SBC Communications 478,600 26,801,600
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited)(continued)
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Common Stocks (continued) Shares Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Utilities (continued)
Sprint 168,800 17,312,550
Texas Utilities 431,800 17,164,050
214,438,144
Total Common Stocks
($1,388,523,921) 1,673,185,821
- -------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Short-Term Investments--1.3% Amount ($) Value ($)
U.S. Treasury Bills:
4.22%, 6/10/1999 2,011,000 2,011,279
4.22%, 7/15/1999 4,731,000 4,688,658
4.25%, 7/22/1999 8,673,000 b 8,575,879
Total Short-Term Investments
(cost $15,280,113) 15,275,816
Total Investments (cost $1,403,804,034) 101.3% 1,688,461,637
Liabilities, Less Cash and Receivables (1.3%) (21,335,867)
Net Assets 100.0% 1,667,125,770
</TABLE>
[FN]
a Non-income producing.
b Partially held by the custodian in a segregated account as collateral for
open financial futures positions.
c Security restricted to public resale:
</FN>
<TABLE>
<CAPTION>
Acquisition Purchase Percentage of
Issuer Date Price Net Assets Valuation*
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Flexible Material 3/31/93 $5.00 0.00% Zero
<FN>
* The valuation of this security has been determined in good faith under the
direction of the Board of Directors.
</FN>
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Statement of Financial Futures
April 30, 1999 (Unaudited)
Market Value Unrealized
Covered (Depreciation)
Financial Futures Contracts by Contracts ($) Expiration at 4/30/99 ($)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Standard & Poor's 500 31 $10,357,875 June'99 (242,610)
</TABLE>
See notes to financial statements.
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Cost Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of Investments 1,403,804,034 1,688,461,637
Cash 4,587,296
Receivable for investment securities sold 50,065,921
Dividends receivable 1,744,297
Net unrealized appreciation on
forward currency exchange contracts--Note 4 (a) 208,099
Receivable for shares of Common Stock subscribed 113,126
Prepaid expenses 126,044
1,745,306,420
- --------------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 1,711,045
Payable for investment securities purchased 59,954,698
Payable for shares of Common Stock redeemed 16,055,551
Payable for future variation margin--Note 4 (a) 85,250
Accrued expenses 374,106
78,180,650
- --------------------------------------------------------------------------------------
Net Assets ($) 1,667,125,770
- --------------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 1,246,466,723
Accumulated undistributed investment income--net 707,932
Accumulated net realized gain (loss) on investments 135,330,023
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions [including
($242,610) net unrealized (depreciation) on financial futures] 284,621,092
- --------------------------------------------------------------------------------------
Net Assets 1,667,125,770
- --------------------------------------------------------------------------------------
Shares Outstanding
(300 million shares of $.001 par value Common Stock authorized) 85,227,126
- --------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share ($) 19.56
</TABLE>
See notes to financial statements.
The Fund 11
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Investment Income ($)
- -------------------------------------------------------------------------------
<S> <C>
Income:
Cash dividends (net of $85,346 foreign taxes withheld at source) 12,121,747
Interest 3,593,086
Total Income 15,714,833
Expenses:
Management fee--Note 3(a) 6,354,049
Shareholder servicing costs--Note 3(b) 2,170,317
Prospectus and shareholders' reports 74,108
Custodian fees--Note 3(b) 65,101
Professional fees 42,070
Directors' fees and expenses--Note 3(c) 41,072
Registration fees 20,327
Interest expense--Note 2 4,276
Miscellaneous 10,039
Total Expenses 8,781,359
Investment Income--Net 6,933,474
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments:
Long transactions (including foreign currency transactions) 99,910,679
Short sale transactions (257)
Net realized gain (loss) on forward currency exchange contracts 423,105
Net realized gain (loss) on financial futures 44,594,483
Net Realized Gain (Loss) 144,928,010
Net unrealized appreciation (depreciation) on investments and
foreign currency transactions [including ($12,499,048)
net unrealized (depreciation) on financial futures] 115,348,825
Net Realized and Unrealized Gain (Loss) on Investments 260,276,835
Net Increase in Net Assets Resulting From Operations 267,210,309
</TABLE>
See notes to financial statements.
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
April 30, 1999 Year Ended
(Unaudited) October 31, 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
Operations ($):
Investment income--net 6,933,474 18,187,162
Net realized gain (loss) on investments 144,928,010 82,929,950
Net unrealized appreciation (depreciation)
on investments 115,348,825 44,244,823
Net Increase (Decrease) in Net Assets
Resulting from Operatons 267,210,309 145,361,935
- --------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net (8,146,620) (17,696,807)
Net realized gain on investments (102,070,849) (295,927,118)
Total Dividends (110,217,469) (313,623,925)
- --------------------------------------------------------------------------------
Capital Stock Transactions ($):
Net proceeds from shares sold 374,470,345 816,239,753
Dividends reinvested 104,923,911 298,840,613
Cost of shares redeemed (630,343,135) (1,198,145,049)
Increase (Decrease) in Net Assets from
Capital Stock Transactions (150,948,879) (83,064,683)
Total Increase (Decrease) in Net Assets 6,043,961 (251,326,673)
- --------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 1,661,081,809 1,912,408,482
End of Period 1,667,125,770 1,661,081,809
Undistributed investment income--net 707,932 1,921,078
- --------------------------------------------------------------------------------
Capital Share Transactions (Shares):
Shares sold 20,094,561 44,083,320
Shares issued for dividends reinvested 5,951,148 17,179,545
Shares redeemed (33,775,339) (64,800,453)
Net Increase (Decrease) in Shares Outstanding (7,729,630) (3,537,588)
</TABLE>
See notes to financial statements.
The Fund 13
<PAGE>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Certain information reflects financial results for a single Fund share. Total
return shows how much your investment in the Fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Six Months Ended
April 30, 1999 Year Ended October 31,
(Unaudited) 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning
of period ($) 17.87 19.82 20.53 17.96 16.49 16.86
Investment Operations:
Investment income--net .08 .18 .34 .35 .44 .34
Net realized and unrealized
gain (loss) on investments 2.83 1.14 1.97 3.05 1.67 (.34)
Total from Investment Operations 2.91 1.32 2.31 3.40 2.11 --
Distributions:
Dividends from investment
income--net (.09) (.18) (.37) (.32) (.47) (.33)
Dividends from net realized gain
on investments (1.13) (3.09) (2.65) (.51) (.17) (.04)
Total Distributions (1.22) (3.27) (3.02) (.83) (.64) (.37)
Net asset value, end of period 19.56 17.87 19.82 20.53 17.96 16.49
- -----------------------------------------------------------------------------------------------
Total Return (%) 17.02a 7.23 12.97 19.41 13.17 .05
- -----------------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of operating expenses to
average net assets .51a 1.10 1.01 1.02 1.05 1.14
Ratio of interest, expenses and
dividends on securities sold short
to average net assets .00b -- .01 .01 .01 --
Ratio of net investment income
to average net assets .41a .97 1.67 1.78 2.55 2.18
Portfolio Turnover Rate 65.94a 101.87 129.48 131.30 132.46 97.47
- -----------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 1,667,126 1,661,082 1,912,408 2,068,453 1,763,371 1,717,733
<FN>
a Not annualized.
b Amount represents less than .01%.
</FN>
</TABLE>
See notes to financial statements.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Growth and Income 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
provide investors with long-term capital growth, current income and growth of
income, consistent with reasonable investment risk. The Dreyfus Corporation (the
Manager) serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. (Mellon). 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 (including options and
financial futures) 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. Securities 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, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Directors. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(b) Foreign currency transactions: The Fund does not isolate that portion of the
results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
The Fund 15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) 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. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the Fund received net
earnings credits of $732 during the period ended April 30, 1999 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net are declared and paid on a quarterly basis.
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.
(e) Federal income taxes: It is the policy of the Fund to continue to qualify as
a regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
16
<PAGE>
NOTE 2--Bank Lines of Credit:
The Fund may borrow up to $10 million for leveraging purposes under a short-term
unsecured line of credit and participates with other Dreyfus-managed funds in a
$100 million unsecured line of credit primarily to be utilized for temporary or
emergency purposes, including the financing of redemptions. Interest is charged
to the Fund at rates which are related to the Federal Funds rate in effect at
the time of borrowings.
The average daily amount of borrowings outstanding under both arrangements
during the period ended April 30, 1999 was approximately $171,000, with a
related weighted average annualized interest rate of 4.98%.
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 .75 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
April 30, 1999, the Fund was charged $1,426,071 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 April 30, 1999, the Fund was charged $485,469 pursuant to the transfer
agency agreement.
The Fund 17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
The Fund compensates Mellon under a custody agreement for providing custodial
services for the Fund. During the period ended April 30, 1999, the Fund was
charged $65,101 pursuant to the custody agreement.
(c) Each Director who is not an affiliated person as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
(a) The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term
securities, financial futures and forward currency exchange contracts during the
period ended April 30, 1999:
<TABLE>
<CAPTION>
Purchases Sales
- -------------------------------------------------------------------------------
<S> <C> <C>
Long transactions 1,032,960,236 1,015,461,880
Short sale transactions 243,301 --
Total 1,033,203,537 1,015,461,880
</TABLE>
The Fund is engaged in short-selling which obligates the Fund to replace the
security borrowed by purchasing the security at current market value. The Fund
would incur a loss if the price of the security increases between the date of
the short sale and the date on which the Fund replaces the borrowed security.
The Fund would realize a gain if the price of the security declines between
those dates. Until the Fund replaces the borrowed security, the Fund will
maintain daily, a segregated account with a broker and custodian, of permissible
liquid assets sufficient to cover its short position. At April 30, 1999, there
were no securities sold short outstanding.
The following summarizes open forward currency exchange contracts at April 30,
1999:
<TABLE>
<CAPTION>
Foreign
Currency Unrealized
Forward Currency Exchange Contracts Amounts Proceeds ($) Value ($) Appreciation ($)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales:
British Pounds, Expiring 6/25/99 5,371,852 8,793,721 8,639,462 154,259
British Pounds, Expiring 7/15/99 9,521,194 15,364,350 15,310,510 53,840
Total 208,099
</TABLE>
18
<PAGE>
The Fund enters into forward currency exchange contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings. When executing forward currency exchange contracts, the Fund is
obligated to buy or sell a foreign currency at a specified rate on a certain
date in the future. With respect to sales of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract increases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
decreases between those dates. With respect to purchases of forward currency
exchange contracts, the Fund would incur a loss if the value of the contract
decreases between the date the forward contract is opened and the date the
forward contract is closed. The Fund realizes a gain if the value of the
contract increases between those dates. The Fund is also exposed to credit risk
associated with counter party nonperformance on these forward currency exchange
contracts which is typically limited to the unrealized gain on each open
contract.
The Fund may invest in financial futures contracts in order to gain exposure to
or protect against changes in the market. The Fund is exposed to market risk as
a result of changes in the value of the underlying financial instruments.
Investments in financial futures require the Fund to mark to market on a daily
basis, which reflects the change in the market value of the contract at the
close of each day's trading. Accordingly, variation margin payments are received
or made to reflect daily unrealized gains or losses. When the contracts are
closed, the Fund recognizes a realized gain or loss. These investments require
initial margin deposits with a custodian, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of these
deposits is determined by the exchange or Board of Trade on which the contract
is traded and is subject to change. Contracts open at April 30, 1999 are set
forth in the Statement of Financial Futures.
The Fund 19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
(b) At April 30, 1999, accumulated
net unrealized appreciation on investments, forward currency exchange contracts
and financial futures was $284,623,092, consisting of $307,157,629 gross
unrealized appreciation and $22,534,537 gross unrealized depreciation.
At April 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
<PAGE>
For More Information
Dreyfus Growth and Income Fund
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 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
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(C) 1999 Dreyfus Service Corporation 010SA994
