Dreyfus
Growth and Income
Fund, Inc.
SEMIANNUAL REPORT April 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 Statement of Investments
11 Statement of Financial Futures
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
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 semiannual report for Dreyfus Growth and Income
Fund, Inc., covering the six-month period from November 1, 1999 through April
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, Douglas D. Ramos, CFA.
The past six months have been highly volatile -- but generally rewarding -- for
investors in large-cap U.S. stocks. While the market's advance during the last
two months of 1999 was led primarily by technology stocks and large-cap growth
stocks in a fast-growing economy, the large-cap sector of the stock market
corrected substantially during the first quarter of 2000, causing large-cap
stocks to generally underperform small- and mid-cap stocks during those three
months.
In mid-March, investor sentiment appeared to shift once more. Faced with
evidence that inflationary pressures were building, a major measure of
technology stock performance, the Nasdaq Composite Index, fell substantially
between mid-March and the end of April, including a considerably large
single-day drop on April 14. Many "old economy" stocks declined less severely,
and some value-oriented stocks gained ground amid renewed investor interest.
While it is too soon to determine whether this broadening of the market is
likely to persist, we believe that it may be a positive sign for the stock
market overall.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Growth and Income Fund, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Douglas D. Ramos, CFA, Portfolio Manager
How did Dreyfus Growth and Income Fund, Inc., perform relative to its benchmark
For the six-month period ended April 30, 2000, the fund's total return was
10.30% .(1) For the same period, the total return of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index"), the fund's benchmark, was 7.18%
.(2)
We attribute the fund' s strong performance, as compared to that of its
benchmark, largely to our technology holdings. Much of the market's overall
advance during the period was driven by gains in technology-related stocks.
Although the fund held fewer technology stocks on average than the S&P 500
Index, the fund's technology holdings outperformed those of the Index, producing
greater returns.
What is the fund's investment approach?
The fund focuses primarily on low- and moderately priced stocks with market
capitalizations of $1 billion or more at the time of purchase. The fund uses
fundamental analysis to create a broadly diversified, value-tilted portfolio
typically with a weighted average price-to-earnings ratio less than that of the
S&P 500 Index and a long-term projected earnings growth greater than that of 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 six-month period was a portfolio containing stocks from a
variety of different market sectors and industries.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The volatile technology sector was the primary force behind the U.S. stock
market' s performance -- and the fund's performance -- during the reporting
period. Although many technology stocks failed to meet our investment criteria
for growth at a reasonable price, we identified and invested in several
technology companies that did meet our standards, making technology our largest
single sector of investment. We allocated an average of approximately 36% of the
fund' s assets to technology stocks, compared with approximately 30% for the S&P
500 Index. Our holdings included semiconductor chip and equipment makers, such
as LSI Logic and Applied Materials; diversified telecommunications companies,
such as Ericsson (LM) Telephone and Nortel Networks; and business and Internet
software developers, such as Oracle. Our selections strongly outperformed the
technology component of the S&P 500 Index, and were responsible for virtually
all of the fund's gains.
Most other sectors remained generally flat or suffered declines during the
period, largely due to the Federal Reserve Board's (the "Fed") interest-rate
activity. Although actual rates of inflation remained low, high levels of
consumer spending and rapid growth of the economy raised concerns about the
potential for future inflation. In particular, wages showed signs of upward
pressure. In an effort to slow the economy and head off inflation, the Fed
raised interest rates during the period, and indicated that future rate hikes
were likely.
The Fed' s moves particularly hurt interest-rate-sensitive sectors such as
financial services, the fund' s second largest area of investment. Prices of
financial stocks generally fell throughout most of the period. The financial
services sector rebounded in March and April 2000 as expectations rose that
interest rates might be nearing their peak. Strong demand for technology-related
initial public offerings and high volumes of brokerage activity also benefited
some of the financial underwriters and brokerage firms in which the fund
invested. Nevertheless, the financial services sector produced a 0.81% loss for
the fund for the period as a whole. On a positive note, despite the slight loss,
the fund' s financial holdings outperformed the financial component of the S&P
500 Index.
Concerns regarding interest rates and slowing revenue growth also hurt the
fund' s investments in consumer cyclicals and communications services companies.
Communications services holdings, such as Sprint and MCI WorldCom, faced the
additional burden of rising competition in the long-distance market.
What is the fund's current strategy?
Although technology-oriented stocks accounted for virtually all of the fund's
gains during the reporting period, we continue to believe that a diversified
portfolio of reasonably priced stocks can offer investors what we believe are
superior opportunities for risk-adjusted returns over time. Accordingly, as of
April 30, 2000, the fund remained invested in a wide range of market sectors in
addition to technology, such as financial services and consumer-related
companies. We also continue to adhere to our disciplined investment approach of
seeking securities that we believe are attractively valued relative to the S&P
500 Index, while offering above-average potential for growth.
May 15, 2000
(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.
(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 ("S&P 500 INDEX") IS A
WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE.
The Fund
STATEMENT OF INVESTMENTS
April 30, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
COMMON STOCKS--98.3% Shares Value ($)
--------------------------------------------------------------------------------
COMMERCIAL SERVICES--.6%
McGraw-Hill Cos. 188,400 9,891,000
CONSUMER DURABLES--1.1%
Ford Motor 149,900 8,197,656
General Motors 52,000 4,868,500
Leggett & Platt 221,500 4,734,562
17,800,718
CONSUMER NON-DURABLES--4.2%
Anheuser-Busch Cos. 96,000 6,774,000
Estee Lauder, Cl. A 83,700 3,693,262
Intimate Brands 138,000 5,313,000
Kimberly-Clark 175,000 10,160,937
Nabisco Holdings, Cl. A 250,000 9,390,625
PepsiCo 563,000 20,655,063
Procter & Gamble 158,500 9,450,563
65,437,450
CONSUMER SERVICES--5.0%
AMFM 107,000 (a) 7,102,125
Adelphia Communications, Cl. A 148,900 (a) 7,379,856
CBS 239,000 (a) 14,041,250
Carnival 30,000 746,250
Cendant 856,400 (a) 13,220,675
Clear Channel Communications 58,000 (a) 4,176,000
Gannett 112,800 7,205,100
Infinity Broadcasting, Cl. A 141,250 (a) 4,793,672
McDonald's 83,500 3,183,437
Time Warner 189,300 17,025,169
78,873,534
ELECTRONIC TECHNOLOGY--20.8%
American Tower, Cl. A 248,100 (a) 11,536,650
Apple Computer 60,000 (a) 7,443,750
Applied Materials 280,000 (a) 28,507,500
Boeing 212,000 8,413,750
Cabletron Systems 251,900 (a) 5,762,212
Compaq Computer 435,000 12,723,750
Edwards Lifesciences 17,200 (a) 258,000
Ericsson (LM) Telephone, Cl. B, ADR 98,000 8,666,875
General Dynamics 100,000 5,850,000
Hewlett-Packard 120,600 16,281,000
Intel 470,100 59,614,556
International Business Machines 238,000 26,566,750
Lexmark International Group, Cl. A 178,700 (a) 21,086,600
LSI Logic 199,000 (a) 12,437,500
Motorola 108,000 12,858,750
COMMON STOCKS (CONTINUED) Shares Value ($)
--------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY (CONTINUED)
National Semiconductor 236,400 (a) 14,361,300
Nortel Networks 152,000 17,214,000
Sun Microsystems 75,000 (a) 6,895,312
Teradyne 242,000 (a) 26,620,000
Texas Instruments 53,000 8,632,375
Unisys 299,000 (a) 6,933,062
United Technologies 122,000 7,586,875
326,250,567
ENERGY MINERALS--5.2%
Anadarko Petroleum 164,000 7,123,750
Burlington Resources 73,000 2,869,813
Conoco, Cl. A 320,000 7,620,000
Exxon Mobil 335,331 26,051,027
Royal Dutch Petroleum, ADR 479,000 27,482,625
Texaco 156,500 7,746,750
USX-Marathon Group 131,000 3,053,937
81,947,902
FINANCE--15.3%
American Express 62,000 9,303,875
American General 115,300 6,456,800
American International Group 220,771 24,215,819
Associates First Capital, Cl. A 339,000 7,521,563
Bank of America 288,400 14,131,600
Bank of New York 275,000 11,292,188
Chase Manhattan 252,000 18,159,750
Citigroup 630,650 37,484,259
Federal Home Loan Mortgage 343,200 15,765,750
Federal National Mortgage Association 360,500 21,742,656
Fleet Boston Financial 296,036 10,490,776
Household International 82,800 3,456,900
John Hancock Financial Services 274,100 (a) 5,002,325
Morgan (J.P.) 67,000 8,601,125
Morgan Stanley Dean Witter 262,000 20,108,500
UnionBanCal 188,600 5,221,862
Wells Fargo 398,000 16,342,875
XL Capital, Cl. A 100,000 4,762,500
240,061,123
HEALTH SERVICES--3.1%
Columbia/HCA Healthcare 1,032,200 29,353,188
Wellpoint Health Networks 252,400 (a) 18,614,500
47,967,688
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
--------------------------------------------------------------------------------
HEALTH TECHNOLOGY--7.3%
American Home Products 179,700 10,096,894
Baxter International 86,000 5,600,750
Bristol-Myers Squibb 298,000 15,626,375
Guidant 149,000 (a) 8,548,875
Johnson & Johnson 104,000 8,580,000
Lilly (Eli) 103,100 7,970,919
Merck & Co. 402,000 27,939,000
Pharmacia 153,303 7,655,569
Schering-Plough 273,000 11,005,312
Warner-Lambert 95,000 10,812,187
113,835,881
INDUSTRIAL SERVICES--1.5%
Schlumberger 312,000 23,887,500
NON-ENERGY MINERALS--.7%
Alcoa 67,000 4,346,625
Weyerhaeuser 123,100 6,578,156
10,924,781
PROCESS INDUSTRIES--1.9%
Dow Chemical 114,000 12,882,000
International Paper 186,000 6,835,500
PPG Industries 141,700 7,704,938
Rohm & Haas 87,000 3,099,375
30,521,813
PRODUCER MANUFACTURING--8.3%
Emerson Electric 82,000 4,499,750
General Electric 432,000 67,932,000
Honeywell International 519,375 29,085,000
Industrial Flexible Material 725,000 (a,c) --
Ingersoll-Rand 78,600 3,689,288
Masco 330,500 7,415,594
Tyco International 387,000 17,777,812
130,399,444
RETAIL TRADE--4.0%
Federated Department Stores 50,300 (a) 1,710,200
Gap 214,000 7,864,500
Lowes 310,600 15,374,700
May Department Stores 174,350 4,794,625
TJX Cos. 368,200 7,064,838
Target 382,000 25,426,875
62,235,738
COMMON STOCKS (CONTINUED) Shares Value ($)
--------------------------------------------------------------------------------
TECHNOLOGY SERVICES--7.6%
BMC Software 121,500 (a) 5,687,719
Charter Communications, Cl. A 748,700 (a) 10,996,531
Computer Associates International 333,900 18,635,794
Computer Sciences 247,600 (a) 20,194,875
Electronic Data Systems 329,000 22,618,750
First Data 168,000 8,179,500
Network Associates 375,500 (a) 9,551,781
Oracle 293,000 (a) 23,421,688
119,286,638
UTILITIES--11.7%
ALLTEL 104,000 6,929,000
AT&T 559,500 26,121,656
Bell Atlantic 168,000 9,954,000
Coastal 433,100 21,736,206
Duke Energy 151,000 8,682,500
Dynegy, Cl. A 210,000 13,741,875
El Paso Energy 63,700 2,707,250
Enron 70,000 4,878,125
GTE 390,000 26,422,500
MCI WorldCom 483,300 (a) 21,959,944
Niagara Mohawk Power 141,000 (a) 1,956,375
SBC Communications 376,600 16,499,788
Sprint (FON Group) 334,600 20,577,900
Texas Utilities 52,800 1,778,700
183,945,819
TOTAL COMMON STOCKS
(cost $1,169,120,481) 1,543,267,596
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
SHORT-TERM INVESTMENTS--2.3% Amount ($) Value ($)
--------------------------------------------------------------------------------
U.S. TREASURY BILLS;
5.59%, 7/13/2000
(cost $36,198,586) 36,614,000 (b) 36,197,333
--------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $1,205,319,067) 100.6% 1,579,464,929
LIABILITIES, LESS CASH AND RECEIVABLES (.6%) (9,841,578)
NET ASSETS 100.0% 1,569,623,351
(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>
<CAPTION>
Acquisition Purchase Percentage of
Issuer Date Price Net Assets Valuation((+))
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Flexible Material 3/31/1993 $5.00 .00 Zero
((+))THE VALUATION OF THIS SECURITY HAS BEEN DETERMINED IN GOOD FAITH UNDER THE
DIRECTION OF THE BOARD OF DIRECTORS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF FINANCIAL FUTURES
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Market Value Unrealized
Covered Appreciation
Financial Futures Long Contracts by Contracts ($) Expiration at 4/30/2000 ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Standard & Poor's 500 16 5,840,000 June 2000 92,909
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 1,205,319,067 1,579,464,929
Cash 216,301
Receivable for investment securities sold 5,243,482
Dividends receivable 1,057,815
Receivable for shares of Common Stock subscribed 51,928
Prepaid expenses 62,016
1,586,096,471
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 1,110,169
Payable for investment securities purchased 12,003,915
Payable for shares of Common Stock redeemed 3,085,432
Payable for futures variation margin--Note 4(a) 29,200
Accrued expenses 244,404
16,473,120
--------------------------------------------------------------------------------
NET ASSETS ($) 1,569,623,351
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 1,129,274,582
Accumulated undistributed investment income--net 437,296
Accumulated net realized gain (loss) on investments 65,672,702
Accumulated net unrealized appreciation (depreciation)
on investments (including $92,909 net unrealized
appreciation on financial futures)--Note 4(b) 374,238,771
--------------------------------------------------------------------------------
NET ASSETS ($) 1,569,623,351
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(300 million shares of $.001 par value Common Stock authorized) 79,639,746
NET ASSET VALUE, offering and redemption price per share ($) 19.71
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $8,012 foreign taxes withheld at source) 7,813,978
Interest 1,441,433
TOTAL INCOME 9,255,411
EXPENSES:
Management fee--Note 3(a) 5,868,502
Shareholder servicing costs--Note 3(b) 1,267,882
Directors' fees and expenses--Note 3(c) 57,208
Custodian fees--Note 3(b) 52,957
Prospectus and shareholders' reports 41,717
Professional fees 34,084
Registration fees 12,316
Miscellaneous 17,281
TOTAL EXPENSES 7,351,947
INVESTMENT INCOME--NET 1,903,464
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 65,346,514
Net realized gain (loss) on financial futures 5,039,181
NET REALIZED GAIN (LOSS) 70,385,695
Net unrealized appreciation (depreciation) on investments
[including ($3,786,293) net unrealized (depreciation)
on financial futures] 82,385,645
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 152,771,340
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 154,674,804
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
---------------------------------------------------------------------------------------
<S> <C> > <C>
OPERATIONS ($):
Investment income--net 1,903,464 9,205,307
Net realized gain (loss) on investments 70,385,695 174,872,620
Net unrealized appreciation (depreciation)
on investments 82,385,645 122,580,859
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 154,674,804 306,658,786
---------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (1,879,750) (10,712,803)
Net realized gain on investments (169,987,626) (102,070,849)
TOTAL DIVIDENDS (171,867,376) (112,783,652)
-----------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 368,741,965 718,800,250
Dividends reinvested 164,319,435 107,345,114
Cost of shares redeemed (524,140,966) (1,103,206,818)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 8,920,434 (277,061,454)
TOTAL INCREASE (DECREASE) IN NET ASSETS (8,272,138) (83,186,320)
----------------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 1,577,895,489 1,661,081,809
END OF PERIOD 1,569,623,351 1,577,895,489
Undistributed investment income--net 437,296 413,582
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 19,380,125 37,570,438
Shares issued for dividends reinvested 8,738,437 6,074,347
Shares redeemed (27,400,920) (57,679,437)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 717,642 (14,034,652)
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
<CAPTION>
Six Months Ended
April 30, 2000 Year Ended October 31,
----------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 19.99 17.87 19.82 20.53 17.96 16.49
Investment Operations:
Investment income--net .02(a) .11(a) .18 .34 .35 .44
Net realized and unrealized
gain (loss) on investments 1.93 3.26 1.14 1.97 3.05 1.67
Total from
Investment Operations 1.95 3.37 1.32 2.31 3.40 2.11
Distributions:
Dividends from investment
income--net (.02) (.12) (.18) (.37) (.32) (.47)
Dividends from net realized
gain on investments (2.21) (1.13) (3.09) (2.65) (.51) (.17)
Total Distributions (2.23) (1.25) (3.27) (3.02) (.83) (.64)
Net asset value, end of period 19.71 19.99 17.87 19.82 20.53 17.96
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 10.30(b) 19.79 7.23 12.97 19.41 13.17
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets .47(b) 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(c) -- .01 .01 .01
Ratio of net investment income
to average net assets .12(b) .56 .97 1.67 1.78 2.55
Portfolio Turnover Rate 22.12(b) 96.42 101.87 129.48 131.30 132.46
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 1,569,623 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) NOT ANNUALIZED.
(C) AMOUNT REPRESENTS LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
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"), which is a wholly-owned subsidiary
of Mellon Financial Corporation. 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 (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.
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 $11,088 during the April 30, 2000 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.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(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. During the period ended April 30, 2000, the fund did not
borrow under either line of credit.
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 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 April 30, 2000, the fund was charged $636,368 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, 2000, the fund was charged $423,121
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 April 30, 2000, the fund was
charged $52,957 pursuant to the custody agreement.
(c) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective January 1, 2000,
each Board member receives an annual fee of $40,000 and a fee of $6,000 for each
meeting held in person 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 January 1, 2000, each Board member
who was not an "affiliated person" as defined in the Act received from the fund
an annual fee of $4,500 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 Director 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 achieved emeritus status.
NOTE 4--Securities Transactions:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and financial futures, during the period ended
April 30, 2000, amounted to $335,893,076 and $424,632,415, respectively.
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 The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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, 2000 are set forth in the
Statement of Financial Futures.
(b) At April 30, 2000, accumulated net unrealized appreciation on investments
and financial futures was $374,238,771, consisting of $424,942,540 gross
unrealized appreciation and $50,703,769 gross unrealized depreciation.
At April 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).
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
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 010SA004
