Dreyfus
Growth and Income
Fund, Inc.
ANNUAL REPORT October 31, 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
12 Statement of Financial Futures
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
22 Report of Independent Auditors
23 Important Tax Information
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
Growth and Income Fund, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Growth and Income Fund,
covering the 12-month period from November 1, 1998 through October 31, 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,CFA.
Despite a relatively weak third quarter of 1999 for the U.S. stock market, the
past year has been rewarding for most equity investors overall. When the
reporting period began, most sectors of the U.S. stock market had completed a
sharp correction caused primarily by concerns regarding the spread of the global
financial crisis in overseas markets. Soon after the start of 1999, however,
those fears abated. In fact, the U.S. economy remained strong, characterized by
low inflation and high levels of consumer spending. These conditions supported
continued strength in the stock market through the spring.
In the summer of 1999, however, the Federal Reserve Board raised short-term
interest rates twice in an effort to forestall inflationary pressures in a
fast-growing economy. Because higher interest rates tend to increase the cost of
capital and make fixed-income securities more competitive relative to equities,
most sectors of the stock market declined. By the end of the 12-month reporting
period, major stock indices had fallen from the record highs reached during the
summer, although stock prices generally were still higher than they were one
year earlier.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Growth and Income Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
Douglas D. Ramos, CFA, Portfolio Manager
How did Dreyfus Growth and Income Fund perform relative to its benchmark?
The fund produced a total return of 19.79% during the 12-month period that ended
October 31, 1999. This compares to a 25.66% total return for the fund's
benchmark, the Standard & Poor' s 500 Composite Stock Price Index ("S&P 500
Index" ).
We attribute the fund' s good absolute performance to the surprisingly rapid
recovery of global capital markets that occurred in late 1998 and continued
through the fund' s first and second quarters. During those two quarters, the
fund reported its strongest gains. However, the recovery was especially strong
among a narrow group of very large growth stocks, of which the S&P 500 Index was
more heavily weighted than the fund. As a result, the Index rose more rapidly
than the fund did.
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 Index. We generally look to avoid
the risks associated with market timing.
We typically measure 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 12-month period was a portfolio containing stocks from a
number of different market sectors and industries.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
As we mentioned earlier, the strong rise of the benchmark was driven by the
performance of a narrow group of companies, most of which were in the technology
sector. While the fund benefited from owning significant positions in some of
these stocks -- such as semiconductor equipment maker Applied Materials,
computer server maker Sun Microsystems and business software developer Oracle --
others failed to meet our investment criteria. Our performance relative to our
benchmark suffered because we did not own these other stocks.
Nevertheless, the fund' s technology holdings generally performed strongly
throughout the period. In addition to the computer-related technologies
mentioned above, the communications technology sector also showed strong growth,
driven by rapidly increasing demand for cellular services as well as line-based
analog and digital communications. The fund benefited from investments in key
communications equipment and services companies, such as Nortel Networks and
Ericsson (LM) Telephone. The technology sector has been among the most volatile
sectors in the stock market. Of course, not all of the fund's technology-related
holdings performed well. Some, such as Compaq Computer, disappointed in the face
of strong competitive pressures.
Most other sectors remained generally flat or suffered declines during the
period. The most significant declines occurred in the consumer staples sector,
where concerns about the impact of Internet-based shopping on the food retailing
industry hurt stock prices. The fund's holdings in companies such as Albertson's
and Safeway declined as a result. The interest-rate-sensitive consumer cyclical
sector was also hard hit by rising interest rates, hurting the fund's holdings
in such companies as Ford Motor and Black & Decker.
The financial industry, which represented the fund's single largest group of
holdings, was particularly volatile. During the first few months of the period,
financial stocks reacted well to the continued strength of the U.S. economy and
the apparent stabilization of many global economies. After showing sharp gains,
however, many banking and insurance
stocks declined in response to rising interest rates. We viewed these declines
as buying opportunities, increasing some of our positions in the sector. As the
period drew to a close, financial stocks once again rallied as evidence mounted
that inflation remained in check.
What is the fund's current strategy?
We adjusted our strategy during the reporting period in an effort to give the
fund added flexibility to hold stocks that we believe are moderately valued
relative to the benchmark, as well as those that we believe 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.
This adjustment in our strategy benefited the fund over the past year by
allowing us to purchase shares of moderately priced technology stocks, such as
Electronic Data Systems, which later rose sharply. Our modified strategy also
allowed us to hold appreciating shares of companies, such as Lexmark and Intel,
which subsequently rose further in value.
We continue to adhere to our disciplined investment approach by seeking
attractively priced securities that we believe offer above-average growth
potential.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS
THAN THEIR ORIGINAL COST.
(1) 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
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Growth and Income
Fund, Inc. and the Standard & Poor's 500 Composite Stock Price Index
- --------------------------------------------------------------------------------
Average Annual Total Returns AS OF 10/31/99
<TABLE>
<CAPTION>
Inception From
Date 1 Year 5 Years Inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FUND 12/31/91 19.79% 14.42% 13.74%
</TABLE>
((+)) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS GROWTH AND INCOME
FUND, INC. ON 12/31/91 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX ON THAT DATE. ALL DIVIDENDS
AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE
FEES AND EXPENSES. UNLIKE THE FUND, WHICH CAN INVEST IN BOTH EQUITY AND DEBT
SECURITIES, THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX IS A WIDELY
ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE COMPRISED SOLELY OF
COMMON STOCKS. THE INDEX DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER
EXPENSES. FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE
REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION
OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT.
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
October 31, 1999
COMMON STOCKS--93.8% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
BASIC INDUSTRIES--1.5%
<S> <C> <C>
Dow Chemical 67,000 7,922,750
International Paper 161,000 8,472,625
Weyerhaeuser 123,100 7,347,531
23,742,906
CHEMICALS--.3%
duPont (E.I.) deNemours 80,000 5,155,000
COMMERCIAL SERVICES--1.0%
McGraw-Hill Cos. 188,400 11,233,350
Outdoor Systems 113,000 (a) 4,788,375
16,021,725
CONSUMER DURABLES--1.3%
Ford Motor 149,900 8,225,763
General Motors 47,000 3,301,750
Leggett & Platt 401,500 8,908,281
20,435,794
CONSUMER NON-DURABLES--3.1%
Anheuser-Busch Cos. 42,000 3,016,125
Heinz (H.J.) 148,000 7,067,000
Intimate Brands 77,000 3,157,000
Kimberly-Clark 175,000 11,046,875
PepsiCo 728,000 25,252,500
49,539,500
CONSUMER SERVICES--7.0%
Adelphia Communications, Cl.A 148,900 8,133,662
American Tower, Cl. A 384,100 7,321,906
CBS 228,000 (a) 11,129,250
Carnival 414,300 18,436,350
Cendant 1,429,400 23,585,100
Clear Channel Communications 58,000 4,661,750
Gannett 228,800 17,646,200
McDonald's 182,000 7,507,500
Time Warner 168,200 11,721,438
110,143,156
ELECTRONIC TECHNOLOGY--15.5%
Apple Computer 60,000 (a) 4,807,500
Applied Materials 140,000 (a) 12,573,750
Cabletron Systems 251,900 (a) 4,172,094
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY (CONTINUED)
Computer Sciences 247,600 (a) 17,007,025
Ericsson (LM) Telephone, Cl. B, A.D.R. 435,000 18,596,250
General Dynamics 169,000 9,368,937
Hewlett-Packard 84,600 6,265,687
Intel 470,100 36,403,369
International Business Machines 320,000 31,480,000
LSI Logic 331,000 (a) 17,605,062
Lexmark International Group, Cl. A 178,700 (a) 13,949,769
Motorola 145,000 14,128,438
National Semiconductor 288,000 8,622,000
Nortel Networks 248,000 15,360,500
Sun Microsystems 48,000 5,079,000
Teradyne 242,000 9,317,000
Texas Instruments 53,000 4,756,750
United Technologies 238,000 14,399,000
243,892,131
ENERGY MINERALS--5.4%
Burlington Resources 73,000 2,545,875
Conoco, Cl. A 320,000 8,780,000
Exxon 196,000 14,516,250
Mobil 76,000 7,334,000
Royal Dutch Petroleum, A.D.R. 479,000 28,710,062
Texaco 266,500 16,356,438
USX-Marathon Group 242,000 7,048,250
85,290,875
FINANCE--16.0%
American Express 62,000 9,548,000
American General 115,300 8,553,819
American International Group 220,771 22,725,615
Associates First Capital, Cl. A 258,000 9,417,000
Bank of America 368,400 23,715,750
Chase Manhattan 252,000 22,018,500
CIGNA 113,700 8,499,075
Citigroup 630,650 34,133,931
Federal Home Loan Mortgage 205,200 11,093,625
Federal National Mortgage Association 360,500 25,505,375
Fleet Boston 470,036 20,505,320
Household International 132,800 5,926,200
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCE (CONTINUED)
Morgan (J.P.) 67,000 8,768,625
Morgan Stanley, Dean Witter 163,500 18,036,094
Wells Fargo 398,000 19,054,250
XL Capital, Cl. A 100,000 5,368,750
252,869,929
HEALTH SERVICES--2.8%
Columbia/HCA Healthcare 1,032,200 24,901,825
Wellpoint Health Networks 335,400 (a) 19,453,200
44,355,025
HEALTH TECHNOLOGY--5.4%
Bristol-Myers Squibb 246,000 18,895,875
Johnson & Johnson 191,000 20,007,250
Lilly (Eli) 103,100 7,101,013
Merck & Co. 283,000 22,516,187
Pharmacia & Upjohn 213,700 11,526,444
Warner-Lambert 60,000 4,788,750
84,835,519
INDUSTRIAL SERVICES--2.1%
Baker Hughes. 454,800 12,705,975
Schlumberger 334,000 20,227,875
32,933,850
NON-ENERGY MINERALS--.3%
Alcoa 67,000 4,070,250
PROCESS INDUSTRIES-.8%
Champion International 81,000 4,682,813
Rohm & Haas 223,200 8,537,400
13,220,213
PRODUCER MANUFACTURING--9.0%
AlliedSignal 321,000 18,276,937
Emerson Electric 139,000 8,348,688
General Electric 479,000 64,934,438
Honeywell 149,000 15,710,187
Industrial Flexible Material 725,000 (a,c) --
Ingersoll-Rand 78,600 4,106,850
Masco 504,500 15,387,250
Tyco International 369,000 14,736,938
141,501,288
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
RETAIL TRADE--4.5%
Albertson's 185,277 6,727,871
Dayton Hudson 382,000 24,686,750
Federated Department Stores 160,600 (a) 6,855,612
Kroger 204,000 (a) 4,245,750
Lowes 221,600 12,188,000
May Department Stores 174,350 6,047,766
TJX Cos. 389,200 10,557,050
71,308,799
TECHNOLOGY SERVICES--5.6%
BMC Software 121,500 (a) 7,798,781
Computer Associates International 426,000 24,069,000
Compuware 237,200 (a) 6,597,125
Electronic Data Systems 329,000 19,246,500
Network Associates 281,000 (a) 5,145,812
Oracle 282,000 (a) 13,412,625
Synopsys 197,500 12,306,719
88,576,562
TRANSPORTATION--.4%
AMR 101,000 (a) 6,413,500
UTILITIES--11.8%
AT&T 442,500 20,686,875
Bell Atlantic 323,000 20,974,812
Coastal 483,100 20,350,588
El Paso Energy 92,000 3,772,000
Enron 189,000 7,548,187
GTE 390,000 29,250,000
MCI WorldCom 322,200 (a) 27,648,788
Niagara Mohawk Power 141,000 (a) 2,238,375
SBC Communications 478,600 24,378,687
Sprint 334,600 24,864,963
Texas Utilities 117,800 4,564,750
186,278,025
TOTAL COMMON STOCKS
(cost $1,192,615,540) 1,480,584,047
Principal
SHORT-TERM INVESTMENTS--4.9% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS:
4.50%, 11/4/1999 20,020,000 20,012,393
4.40%, 11/12/1999 13,824,000 13,805,338
4.48%, 12/2/1999 6,782,000 6,757,042
4.48%, 12/9/1999 16,577,000 16,499,585
4.54%, 12/23/1999 20,367,000 (b) 20,236,855
TOTAL SHORT-TERM INVESTMENTS
(cost $77,305,796) 77,311,213
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TOTAL INVESTMENTS (cost $1,269,921,336) 98.7% 1,557,895,260
CASH AND RECEIVABLES (NET) 1.3% 20,000,229
NET ASSETS 100.0% 1,577,895,489
(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:
</TABLE>
<TABLE>
<CAPTION>
Acquisition Purchase Percentage of
Issuer Date Price Net Assets Valuation*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Flexible Material 3/31/1993 $5.00 .00 Zero
* THE VALUATION OF THIS SECURITY HAS BEEN DETERMINED IN GOOD FAITH UNDER THE
DIRECTION OF THE BOARD OF DIRECTORS.
</TABLE>
The Fund
STATEMENT OF FINANCIAL FUTURES
October 31, 1999
<TABLE>
<CAPTION>
Market Value Unrealized
Covered Appreciation
Financial Futures Long Contracts by Contracts ($) Expiration at 10/31/99 ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Standard & Poor's 500 274 94,269,700 December '99 3,879,202
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 1,269,921,336 1,557,895,260
Cash 5,148,214
Receivable for investment securities sold 27,474,049
Receivable for futures variation margin--Note 4(a) 1,634,837
Dividends receivable 983,460
Receivable for shares of Common Stock subscribed 2,537
Prepaid expenses 63,237
1,593,201,594
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 1,127,112
Due to Distributor 643,632
Payable for investment securities purchased 10,608,983
Payable for shares of Common Stock redeemed 2,659,849
Accrued expenses 266,529
15,306,105
- --------------------------------------------------------------------------------
NET ASSETS ($) 1,577,895,489
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 1,120,354,14
Accumulated undistributed investment income--net 413,582
Accumulated net realized gain (loss) on investments 165,274,633
Accumulated net unrealized appreciation (depreciation)
on investments (including $3,879,202 net unrealized
appreciation on financial futures)--Note 4(b) 291,853,126
- --------------------------------------------------------------------------------
NET ASSETS ($) 1,577,895,489
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(300 million shares of $.001 par value Common Stock authorized) 78,922,104
NET ASSET VALUE, offering and redemption price per share ($) 19.99
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Year Ended October 31, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $188,079 foreign taxes withheld at source) 22,513,199
Interest 3,831,504
TOTAL INCOME 26,344,703
EXPENSES:
Management fee--Note 3(a) 12,395,355
Shareholder servicing costs--Note 3(b) 4,239,182
Custodian fees--Note 3(b) 130,412
Prospectus and shareholders' reports 79,246
Directors' fees and expenses--Note 3(c) 76,303
Professional fees 75,713
Interest expense--Note 2 53,299
Registration fees 32,278
Miscellaneous 57,608
TOTAL EXPENSES 17,139,396
INVESTMENT INCOME--NET 9,205,307
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments:
Long transactions (including foreign currency transactions) 130,798,314
Short sale transactions (13,683)
Net realized gain (loss) on forward currency exchange contracts 435,321
Net realized gain (loss) on financial futures 43,652,668
NET REALIZED GAIN (LOSS) 174,872,620
Net unrealized appreciation (depreciation) on investments and
foreign currency transactions [including ($8,377,236)
net unrealized (depreciation) on financial futures] 122,580,859
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 297,453,479
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 306,658,786
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended October 31,
----------------------------
1999 1998
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 9,205,307 18,187,162
Net realized gain (loss) on investments 174,872,620 82,929,950
Net unrealized appreciation (depreciation)
on investments 122,580,859 44,244,823
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 306,658,786 145,361,935
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (10,712,803) (17,696,807)
Net realized gain on investments (102,070,849) (295,927,118)
TOTAL DIVIDENDS (112,783,652) (313,623,925)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 718,800,250 816,239,753
Dividends reinvested 107,345,114 298,840,613
Cost of shares redeemed (1,103,206,818) (1,198,145,049)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (277,061,454) (83,064,683)
TOTAL INCREASE (DECREASE) IN NET ASSETS (83,186,320) (251,326,673)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 1,661,081,809 1,912,408,482
END OF PERIOD 1,577,895,489 1,661,081,809
Undistributed investment income--net 413,582 1,921,078
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 37,570,438 44,083,320
Shares issued for dividends reinvested 6,074,347 17,179,545
Shares redeemed (57,679,437) (64,800,453)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (14,034,652) (3,537,588)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
<CAPTION>
Year Ended October 31,
-----------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 17.87 19.82 20.53 17.96 16.49
Investment Operations:
Investment income--net .11(a) .18 .34 .35 .44
Net realized and unrealized
gain (loss) on investments 3.26 1.14 1.97 3.05 1.67
Total from Investment Operations 3.37 1.32 2.31 3.40 2.11
Distributions:
Dividends from investment income--net (.12) (.18) (.37) (.32) (.47)
Dividends from net realized gain on
investments (1.13) (3.09) (2.65) (.51) (.17)
Total Distributions (1.25) (3.27) (3.02) (.83) (.64)
Net asset value, end of period 19.99 17.87 19.82 20.53 17.96
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 19.79 7.23 12.97 19.41 13.17
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets 1.03 1.10 1.01 1.02 1.05
Ratio of interest expenses and
dividends on securities sold short
to average net assets .00(b) -- .01 .01 .01
Ratio of net investment income
to average net assets .56 .97 1.67 1.78 2.55
Portfolio Turnover Rate 96.42 101.87 129.48 131.30 132.46
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 1,577,895 1,661,082 1,912,408 2,068,453 1,763,371
A BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
B AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
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"), which is a wholly-owned
subsidiary of Mellon Financial Corporation. 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
NOTES TO FINANCIAL STATEMENTS (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 receives net
earnings credits based on available cash balances left on deposit.
(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.
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 October 31, 1999, was approximately $1,014,800 with a
related weighted average annualized interest rate of 5.25%
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
October 31, 1999, the fund was charged $2,902,078 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 The Fun
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
fund. During the period ended October 31, 1999, the fund was charged $942,956
pursuant to the transfer agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended October 31, 1999, the fund was
charged $130,412 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 $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
(a) The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term
securities, financial futures and forward currency exchange contracts, during
the period ended October 31, 1999:
Purchases ($) Sales ($)
- --------------------------------------------------------------------------------
Long transactions 1,496,441,625 1,705,740,398
Short sale transactions 1,905,504 1,648,777
TOTAL 1,498,347,129 1,707,389,175
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 October 31, 1999,
there were no securities sold short outstanding.
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. At October 31, 1999, there were no forward currency
exchange contracts outstanding.
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
October 31, 1999 are set forth in the Statement of Financial Futures.
(b) At October 31, 1999, accumulated net unrealized appreciation on investments
and financial futures was $291,853,126, consisting of $311,901,124 gross
unrealized appreciation and $20,047,998 gross unrealized depreciation.
At October 31, 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) .
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors Dreyfus Growth and Income Fund, Inc.
We have audited the accompanying statement of assets and liabilities of Dreyfus
Growth and Income Fund, Inc., including the statements of investments and
financial futures as of October 31, 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 verification by
examination of securities held by the custodian as of October 31, 1999 and
confirmation of securities not held by the custodian by correspondence with
others. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Growth and Income Fund, Inc. at October 31, 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.
New York, New York December 1, 1999
IMPORTANT TAX INFORMATION (Unaudited)
For Federal tax purposes, the fund hereby designates $1.125 per share as a
long-term capital gain distribution of the $1.175 per share paid on December 11,
1998.
The fund also designates 43.90% of the ordinary dividends paid during the fiscal
year ended October 31, 1999 as qualifying for the corporate dividends received
deduction. Shareholders will receive notification in January 2000 of the
percentage applicable to the preparation of their 1999 income tax returns.
The Fund
NOTES
For More Information
Dreyfus Growth and Income Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend 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 010AR9910
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS GROWTH AND INCOME FUND, INC. AND THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
DREYFUS STANDARD
GROWTH AND & POOR'S 500
PERIOD INCOME COMPOSITE STOCK
FUND, INC. PRICE INDEX *
12/31/91 10,000 10,000
10/31/92 11,257 10,281
10/31/93 13,986 11,814
10/31/94 13,993 12,270
10/31/95 15,836 15,510
10/31/96 18,910 19,245
10/31/97 21,362 25,423
10/31/98 22,906 31,019
10/31/99 27,439 38,979
Source: Lipper Analytical Services, Inc.
