DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus California
Intermediate Municipal Bond Fund for the six-month period ended September 30,
1997. Your Fund produced a total return including share price changes and
dividend income generated, of 5.55%,* and an annualized tax-free distribution
rate per share of 4.36%.**
THE ECONOMY
Virtually ideal economic conditions prevailed over the reporting period.
Robust growth in the first half of 1997, the lowest unemployment rate since
the early 1970s and measures of inflation at 30-year lows combined to spur
consumer confidence to record high ground. Businesses were similarly
optimistic: government reports showed that business investment in new
equipment during the reporting period was at its fastest pace in 14 years.
The question is, how long can this favorable economic scenario continue
before inflation rekindles or, more to the point, before the Federal Reserve
Board (the "Fed") embarks on a policy of monetary restraint to dampen
possible future inflationary excess? Traditionally, the Fed has acted to
contain inflation long before it could spread throughout the economy, and Fed
Chairman Alan Greenspan is a staunch inflation-fighter. Yet there are few
traditional signs of potential inflationary excess to battle against. The
upward creep of factory operating rates in response to surging industrial
production is one, the tight labor market another. With the unemployment rate
so low, there is concern that employers will eventually raise wages to
attract workers, resulting in higher prices as increased labor costs are
passed along to consumers. So far, there has been a remarkable absence of
wage and price pressures.
There are few signs that broader measures of inflation are accelerating.
The economy grew at a 4.1% rate over the first six months of this year, a
pace that in other times would have resulted in rumblings of inflationary
pressures. Until its modest rise in September, the Producer Price Index had
an unprecedented series of seven straight monthly declines. The Consumer
Price Index rose at a 1.6% annual rate for the first eight months of the
year, a rate less than half the 3.3% rise for the comparable period in 1996.
Because of the lack of inflation, the Fed has been willing to tolerate
strong economic growth without tightening monetary policy. The Federal Open
Market Committee (FOMC), the policy-making arm of the Fed, has raised
interest rates just once in more than two years, a period roughly coinciding
with the surge of growth in the economy. The last increase in short-term
interest rates came on March 25, 1997 when the FOMC increased the Federal
Funds target rate by a modest one quarter of a percentage point to 5.50%.
(The Federal Funds rate is the rate of interest that banks charge one another
for overnight loans.)
In addition, the Fed has expected some slowdown throughout the 18-month
economic resurgence, yet demand has remained strong throughout. However, the
latest revision of the second-quarter economic growth rate showed a
considerable buildup in business inventories. A rise in inventories could
trigger a subsequent slowdown in the economy if companies cut production in
order to work off unsold backlogs. Nevertheless, it is possible that the
inherent momentum in the economy combined with more vigorous consumer
spending in the third quarter (retail sales showed renewed strength over the
summer) could absorb these inventories without a reduction in output. We
remain alert for future changes of monetary policy by the Fed, particularly
the possibility of a tightening if economic growth continues strong
throughout the rest of this year.
MARKET ENVIRONMENT
The municipal market has benefited from the same improving trends as the
broader fixed income markets. Rather than subduing the markets, the 25
basis-point interest rate hike that occurred in March acted as a stabilizer,
providing the markets with a firm floor from which bond prices continued to
rise and rates fall. During the summer the bond market
moved into trading ranges, experiencing volatility within those ranges, but
continuing to move to lower levels. During this time period the municipal
market has been very attractive compared to its taxable counterparts. For
example, on September 30, the generic ten-year municipal bond rated AAA was
yielding 4.59%, which equates to a tax-equivalent yield of 6.65% (assuming a
31% Federal tax rate). Comparable term U.S. Treasuries were yielding 6.10%.
Ample supply in the municipal market has been one factor in keeping levels
attractive.
PORTFOLIO OVERVIEW
The intermediate sector of the curve has continued to provide, on a
relative value basis, a very attractive return. Currently, investors are
receiving in the 15-year bonds approximately 96% of the yield of 30-year
bonds without being exposed to the added volatility. The California market
has been a very strong performer during this time period. Issues, especially
in the intermediate sector, have been in constant demand. A combination of a
strong local economy and dearth of supply earlier in the year have been the
contributing factors. The Fund had taken a more defensive posture during the
early part of the year. As the inflation outlook improved we moved more of
the portfolio into a structure that could take advantage of an improving
market such as discount coupons and zeros. During the third quarter, supply
picked up significantly and provided an opportunity to enhance the portfolio
with specialty state paper purchased at very attractive levels.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal
Portfolio Management
The Dreyfus Corporation
October 20, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
Income is subject to state and local taxes for non-California residents.
** Distribution rate per share is based upon dividends per share paid from
net investment income during the period (annualized), divided by the net
asset value per share at the end of the period, adjusted for any capital gain
distributions. Some income may be subject to the Federal Alternative Minimum
Tax for certain shareholders. Yields fluctuate and there can be no guarantee
that any particular tax-exempt yield can be achieved.
<TABLE>
DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments-100.0% Amount Value
------- -------
California-96.1%
California Department of Water Resources, Water Systems Revenue (Central
Valley Project):
<S> <C> <C>
5.90%, 12/1/2005.......................................................... $ 1,175,000 $ 1,300,725
Refunding 4.625%, 12/1/2009............................................... 1,820,000 1,794,902
Refunding 4.80%, 12/1/2011................................................ 2,180,000 2,138,144
California Educational Facilities Authority, Revenue (Pooled College and
University Project)
5.375%, 4/1/2013 (Insured; MBIA).......................................... 1,000,000 1,019,350
California Health Facilities Financing Authority, Revenue:
(Downey Community Hospital) 5.625%, 5/15/2008............................. 6,000,000 6,187,020
(Marin General Hospital) 5.70%, 8/1/2003 (Insured; FSA)................... 1,760,000 1,898,107
Refunding (Pomona Valley Hospital) 5.375%, 7/1/2009 (Insured; MBIA)....... 3,240,000 3,351,100
Refunding (Saint Francis Memorial Hospital) 5.75%, 11/1/2003.............. 1,130,000 1,217,191
California Housing Finance Agency, Revenue (Home Mortgage) 5.80%, 8/1/2003.. 1,100,000 1,141,558
California Public Works Board, LR:
(Department of Corrections-Calipatria) 6.10%, 9/1/2003 (Insured; MBIA).... 1,000,000 1,085,340
Refunding (Department of Corrections-Imperial County) 5.125%, 9/1/2009.... 4,000,000 4,129,920
(Secretary of State) 6.10%, 12/1/2004 (Insured; AMBAC).................... 6,100,000 6,778,808
(Various Community College Projects ) 6%, 12/1/2008 (Insured; AMBAC) (a).. 3,975,000 4,294,829
(Various University of California Projects ) 5.90%, 12/1/2003 (Insured; AMBAC).... 1,000,000 1,092,050
California Statewide Community Development Authority:
COP, Revenue:
(Hollywood Presbyterian Medical Center) 5%, 1/1/2001.................... 1,500,000 1,511,760
Refunding (Huntington Memorial Hospital) 5.50%, 7/1/2010................ 4,000,000 4,129,160
LR, Refunding (Oakland Convention Centers Project) 6%, 10/1/2004 (Insured; AMBAC).... 2,700,000 2,946,996
Central Coast Water Authority, Revenue (State Water Project, Regional
Facilities):
6.15%, 10/1/2005 (Insured; AMBAC) (Prerefunded 10/1/2002) (b)............. 1,500,000 1,664,820
5.15%, 10/1/2009 (Insured; AMBAC)......................................... 6,300,000 6,503,112
Central Valley Financing Authority, Cogeneration Project Revenue
(Carson Ice General Project) 5.70%, 7/1/2003.............................. 2,000,000 2,109,940
Contra Costa County, COP (Merrithew Memorial Hospital Replacement)
6.20%, 11/1/2001.......................................................... 1,145,000 1,238,821
East Bay Municipal Utility District, Water Systems Revenue, Refunding:
6%, 6/1/2004.............................................................. 1,365,000 1,485,120
6.10%, 6/1/2006........................................................... 2,000,000 2,171,940
Escondido Joint Powers Financing Authority, LR:
(Escondido Civic Center Project) 6%, 9/1/2005 (Insured; AMBAC)............ 1,400,000 1,558,760
Refunding (California Center for the Arts) 5.90%, 9/1/2010 (Insured; AMBAC) 3,440,000 3,745,885
Foothill, Eastern Transportation Corridor Agency, California Toll Road
Revenue
Zero Coupon, 1/1/2007..................................................... 2,000,000 1,423,720
Garden Grove Agency, Community Development, Tax Allocation, Refunding
(Garden Grove Community Project):
5.20%, 10/1/2001........................................................ 1,225,000 1,264,923
5.30%, 10/1/2002........................................................ 1,285,000 1,337,300
Long Beach, COP (Fleet Services Project) 6.10%, 5/1/2001.................... 500,000 533,360
</TABLE>
<TABLE>
DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
------- -------
California (continued)
City of Los Angeles, Revenue:
Harbor Department:
<S> <C> <C>
5%, 8/1/2002............................................................ $ 3,690,000 $ 3,797,416
5%, 8/1/2003............................................................ 5,085,000 5,244,211
6%, 8/1/2006............................................................ 1,320,000 1,415,937
6%, 8/1/2014............................................................ 6,500,000 6,884,085
Judgement Obligation 5%, 8/1/2002......................................... 3,000,000 3,091,560
Mortgage, Refunding 5.75%, 7/1/2002 (Insured; MBIA)....................... 660,000 681,780
Multi-Family (Earthquake Rehabilitation Projects) 5.65%, 12/1/2025 (Insured; FNMA)..... 10,000,000 10,411,300
Wastewater System:
5.90%, 6/1/2003 (Insured; AMBAC)........................................ 1,000,000 1,086,480
6%, 6/1/2004 (Insured; AMBAC)........................................... 1,000,000 1,089,330
Los Angeles County Capital Asset Leasing Corporation, Leasehold Revenue,
Refunding
5.75%, 12/1/2004 (Insured; AMBAC)......................................... 2,600,000 2,821,962
Los Angeles County Metropolitan Transportation Commission, Sales Tax Revenue,
Refunding
5.50%, 7/1/2007........................................................... 3,350,000 3,557,968
Los Angeles County Sanitation Districts Financing Authority, Revenue (Capital
Project)
5.375%, 10/1/2013 (Insured; MBIA)......................................... 2,625,000 2,656,474
Los Angeles County Transportation Commission, Sales Tax Revenue, Refunding:
5.75%, 7/1/2001 (Insured; FGIC)........................................... 1,250,000 1,324,550
6%, 7/1/2004 (Insured; FGIC).............................................. 2,000,000 2,202,200
Los Angeles, Department Water & Power, Electric Plant Revenue, Crossover
Refunding
5.70%, 9/1/2011 (Insured; FGIC)........................................... 3,500,000 3,677,135
Los Angeles, Municipal Improvement Corp., Sanitation Equipment Charge Revenue
5.50%, 2/1/2003 (Insured; FSA)............................................ 5,000,000 5,314,900
Metropolitan Water District of Southern California, Waterworks Revenue 5.125%, 7/1/2011..... 4,000,000 4,049,200
Northern California Power Agency, Public Power Revenue, Refunding
(Hydroelectric Power Project) 5.75%, 7/1/2001 (Insured; MBIA)............. 1,210,000 1,282,164
Oakland, COP, Refunding (Oakland Museum) 6%, 4/1/2012 (Insured; AMBAC)...... 2,500,000 2,623,825
Oakland Redevelopment Agency, Refunding
(Central District Redevelopment-Senior Tax Allocation):
5.65%, 2/1/2003 (Insured; AMBAC)........................................ 1,500,000 1,605,135
5.75%, 2/1/2004 (Insured; AMBAC)........................................ 1,500,000 1,622,880
Orange County, COP:
Municipal Water District, Water Facilities Corp., Refunding
(Allen-McColloch Pipeline) 5%, 7/1/2006 (Insured; MBIA)................. 5,380,000 5,612,039
Refunding 5.70%, 7/1/2010 (Insured; MBIA)................................. 6,445,000 6,902,659
Port Oakland, Revenue:
Port 6.10%, 11/1/2003 (Insured; MBIA)..................................... 1,245,000 1,363,487
Special Facilities (Mitsui O.S.K. Lines Ltd.)
6.40%, 1/1/2003 (LOC; Industrial Bank of Japan) (c)..................... 1,000,000 1,078,230
Riverside County, Asset Leasing Corp., Leasehold Revenue (Riverside County
Hospital Project)
5.90%, 6/1/2002........................................................... 3,000,000 3,124,260
</TABLE>
<TABLE>
DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
------- -------
California (continued)
San Bernardino County, COP (West Valley Detention Center)
<S> <C> <C>
5.90%, 11/1/2001 (Insured; MBIA).......................................... $ 1,000,000 $ 1,070,150
San Diego County Regional Transportation Commission, Sales Tax Revenue
5%, 4/1/2008 (Insured; AMBAC)............................................. 5,000,000 5,165,100
San Francisco City and County Airports Commission, International Airport
Revenue
6.20%, 5/1/2015........................................................... 1,325,000 1,403,705
San Francisco Unified School District, COP, Refunding 5.70%, 9/1/2003 (Insured; MBIA)...... 1,000,000 1,058,490
San Joaquin Hills, California Transportation Corridor Agency, Toll Road
Revenue, Refunding
Zero Coupon, 1/15/2006 (Insured; MBIA) (d)................................ 5,000,000 3,382,350
Santa Ana Housing Authority, MFMR (City Garden Apartments) 5.35%, 12/1/2021. 3,000,000 3,065,190
Southern California Public Power Authority, Refunding:
Power Project Revenue:
(Multiple Projects):
6.75%, 7/1/2012 (Insured; FSA)........................................ 2,000,000 2,391,060
6.75%, 7/1/2013 (Insured; FSA)........................................ 1,800,000 2,154,672
(Palo Alto) 6%, 7/1/2003 (Insured; AMBAC)............................... 2,500,000 2,731,675
Transmission Project Revenue (Southern Transmission Project) 5.625%, 7/1/2003 1,800,000 1,928,808
Southern California Rapid Transit District, Revenue
(Special Benefit Assessment District) 5.75%, 9/1/2005 (Insured; AMBAC).... 8,750,000 9,575,213
Stockton Health Facilities Authority, Revenue (Dameron Hospital):
5%, 12/1/2005............................................................. 1,240,000 1,246,522
5.10%, 12/1/2006.......................................................... 1,305,000 1,312,504
5.20%, 12/1/2007.......................................................... 1,300,000 1,307,449
Tri-City Hospital District, Revenue, Refunding 5.375%, 2/15/2007............ 3,615,000 3,840,359
U.S. Related-3.9%
Commonwealth of Puerto Rico, Improvement Revenue, Refunding:
5.10%, 7/1/2002........................................................... 2,000,000 2,060,620
5.375%, 7/1/2005.......................................................... 3,000,000 3,141,000
Puerto Rico Electric Power Authority, Power Revenue 5.50%, 7/1/2008......... 2,590,000 2,726,234
-------
TOTAL MUNICIPAL INVESTMENTS (cost $195,281,468)............................. $205,136,929
=======
</TABLE>
<TABLE>
DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
COP Certificate of Participation LR Lease Revenue
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FNMA Federal National Mortgage Association Insurance Corporation
FSA Financial Security Assurance MFMR Multi-Family Mortgage Revenue
Summary of Combined Ratings (Unaudited)
Fitch (e) or Moody's or Standard & Poor's Percentage of Value
- -------- -------- ----------------- ------------------
AAA Aaa AAA 64.5%
AA Aa AA 19.5
A A A 9.8
BBB Baa BBB 6.2
----
100.0%
====
Notes to Statement of Investments:
(a) Wholly held by the custodian in a segregated account as collateral
for delayed-delivery securities.
(b) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(c) Secured by letter of credit.
(d) Purchased on a delayed-delivery basis.
(e) Fitch currently provides creditworthiness information for a limited
number of investments.
(f) At September 30, 1997, 27.8% of the Fund's net assets are insured by
AMBAC.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1997 (UNAUDITED)
Cost Value
-------- --------
<S> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $195,281,468 $205,136,929
Cash....................................... 526,478
Interest receivable........................ 2,861,042
Prepaid expenses........................... 6,477
--------
208,530,926
--------
LIABILITIES: Due to The Dreyfus Corporation and affiliates 101,146
Payable for investment securities purchased 3,383,450
Accrued expenses and other liabilities..... 57,013
--------
3,541,609
--------
NET ASSETS.................................................................. $204,989,317
========
REPRESENTED BY: Paid-in capital............................ $201,870,908
Accumulated net realized gain (loss) on investments (6,737,052)
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4...................... 9,855,461
--------
NET ASSETS.................................................................. $204,989,317
========
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized) 14,967,943
NET ASSET VALUE, offering and redemption price per share-Note 3(d).......... $13.70
====
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income............................ $ 5,436,599
EXPENSES: Management fee-Note 3(a)................... $ 625,340
Shareholder servicing costs-Note 3(b)...... 123,935
Professional fees.......................... 19,290
Trustees' fees and expenses-Note 3(c)...... 15,178
Custodian fees............................. 10,584
Registration fees.......................... 9,080
Prospectus and shareholders' reports....... 6,242
Loan commitment fees-Note 2................ 2,138
Miscellaneous.............................. 10,072
-------
Total Expenses....................... 821,859
Less-reduction in management fee due to
undertaking-Note 3(a).................. (552)
-------
Net Expenses......................... 821,307
-------
INVESTMENT INCOME-NET....................................................... 4,615,292
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $ 1,167,191
Net unrealized appreciation (depreciation) on investments 5,394,953
-------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 6,562,144
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $11,177,436
=======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
September 30, 1997 Year Ended
(Unaudited) March 31, 1997
---------- ----------------
OPERATIONS:
<S> <C> <C>
Investment income-net.................................................... $ 4,615,292 $ 9,945,302
Net realized gain (loss) on investments.................................. 1,167,191 (500,431)
Net unrealized appreciation (depreciation) on investments................ 5,394,953 559,461
-------- --------
Net Increase (Decrease) in Net Assets Resulting from Operations........ 11,177,436 10,004,332
-------- --------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net.................................................... (4,615,292) (10,001,261)
-------- --------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold............................................ 14,695,344 34,554,439
Dividends reinvested..................................................... 3,319,245 7,213,329
Cost of shares redeemed.................................................. (30,377,256) (61,338,340)
-------- --------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (12,362,667) (19,570,572)
-------- --------
Total Increase (Decrease) in Net Assets.............................. (5,800,523) (19,567,501)
NET ASSETS:
Beginning of Period...................................................... 210,789,840 230,357,341
-------- --------
End of Period............................................................ $204,989,317 $210,789,840
======== ========
Shares Shares
-------- --------
CAPITAL SHARE TRANSACTIONS:
Shares sold.............................................................. 1,090,749 2,600,853
Shares issued for dividends reinvested................................... 245,332 541,459
Shares redeemed.......................................................... (2,252,896) (4,613,301)
-------- --------
Net Increase (Decrease) in Shares Outstanding.......................... (916,815) (1,470,989)
======== ========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Six Months Ended
September 30, 1997 Year Ended March 31,
----------------------------------------------------
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994 1993(1)
---------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $13.27 $13.27 $13.02 $13.08 $13.32 $12.50
---- ---- ---- ---- ---- ----
Investment Operations:
Investment income-net................. .30 .60 .62 .66 .72 .70
Net realized and unrealized gain (loss)
on investments...................... .43 - .25 (.06) (.24) .82
---- ---- ---- ---- ---- ----
Total from Investment Operations...... .73 .60 .87 .60 .48 1.52
---- ---- ---- ---- ---- ----
Distributions:
Dividends from investment income-net.. (.30) (.60) (.62) (.66) (.72) (.70)
---- ---- ---- ---- ---- ----
Net asset value, end of period........ $13.70 $13.27 $13.27 $13.02 $13.08 $13.32
==== ==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN................... 11.07%(2) 4.60% 6.75% 4.76% 3.52% 13.20%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .79%(2) .78% .65% .32% .04% -
Ratio of net investment income
to average net assets............... 4.43%(2) 4.48% 4.66% 5.13% 5.25% 5.61%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager.. - .04% .14% .47% .78% .99%(2)
Portfolio Turnover Rate............... 18.09%(3) 35.79% 41.42% 17.28% 6.32% 6.74%(3)
Net Assets, end of period (000's Omitted) $204,989 $210,790 $230,357 $239,948 $293,363 $160,716
(1) From April 20, 1992 (commencement of operations) to March 31, 1993.
(2) Annualized.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus California Intermediate Municipal Bond Fund (the "Fund") is
registered under the Investment Company Act of 1940 ("Act") as a
non-diversified open-end management investment company. The Fund's investment
objective is to provide investors with as high a level of current income
exempt from Federal and State of California personal income taxes as is
consistent with the preservation of capital. The Dreyfus Corporation
("Manager") serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. is the
distributor of the Fund's shares, which are sold to the public without a
sales charge.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the national securities market on each business day.
Investments not listed on an exchange or the national securities market, or
securities for which there were no transactions, are valued at the average of
the most recent bid and asked prices. Bid price is used when no asked price
is available.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
(c) Dividends to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The Fund has an unused capital loss carryover of approximately $7,908,000
available for Federal income tax purposes to be
applied against future net securities profits, if any, realized subsequent to
March 31, 1997. If not applied, $2,551,000 of the carryover expires in fiscal
2003, $4,636,000 expires in fiscal 2004 and $721,000 expires in fiscal 2005.
NOTE 2-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on their pro rata
portion of the Facility. Interest is charged to the Fund at rates based on
prevailing market rates in effect at the time of borrowings. For the period
ended September 30, 1997, the Fund did not borrow under the Facility.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) Pursuant to a management agreement with the Manager, the management
fee is computed at the annual rate of .60 of 1% of the value of the Fund's
average daily net assets and is payable monthly. The Manager has undertaken
from April 1, 1997 through March 31, 1998, to reduce the management fee paid
by the Fund, to the extent that the Fund's aggregate annual expenses,
exclusive of taxes, brokerage, interest on borrowings, commitment fees and
extraordinary expenses exceed an annual rate of .80 of 1% of the value of the
Fund's average daily net assets. The reduction in management fee, pursuant to
the undertakings, amounted to $552 during the period ended September 30,
1997.
(b) Under the Shareholder Services Plan, the Fund reimburses Dreyfus
Service Corporation, a wholly-owned subsidiary of the Manager, an amount not
to exceed an annual rate of .25 of 1% of the value of the Fund's average
daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the period ended September 30, 1997, the Fund was charged $58,000
pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the
period ended September 30, 1997, the Fund was charged $44,394 pursuant to the
transfer agency agreement.
(c) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $1,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A 1% redemption fee is charged on certain redemptions of Fund shares
(including redemptions through the use of the Fund Exchanges service) where
the shares being redeemed were issued subsequent to a specific effective date
and the redemption or exchange occurs less than fifteen days following the
date of issuance. During the period ended September 30, 1997, redemption fees
amounted to $146.
DREYFUS CALIFORNIA INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended September 30, 1997
amounted to $36,748,012 and $44,336,915, respectively.
At September 30, 1997, accumulated net unrealized appreciation on
investments was $9,855,461, consisting of $9,869,460 gross unrealized
appreciation and $13,999 gross unrealized depreciation.
At September 30, 1997, 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).
Registration Mark
[Dreyfus lion "d" logo]
DREYFUS CALIFORNIA INTERMEDIATE
MUNICIPAL BOND FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 902SA979
Registration Mark
[Dreyfus logo]
California
Intermediate
Municipal
Bond Fund
Semi-Annual
Report
September 30, 1997
