Dreyfus
Massachusetts
Intermediate
Municipal Bond
Fund
Annual Report
March 31, 1999
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other service providers that they are
taking similar steps. In addition, issuers of securities in which the fund
invests may be adversely affected by Year 2000-related problems. This could
have an impact on the value of the fund's investments and its share price.
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund
- ----------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on Dreyfus Massachusetts
Intermediate Municipal Bond Fund for the 12-month period ended March 31, 1999.
Your fund produced a total return, including share price changes and dividend
income generated, of 5.25%,* and a tax-free distribution rate per share of
4.25%.**
Economic Review
The economy in the period ended March 31, 1999 had several persistent
themes. These included weakness in the world economy, strength in the U.S.
economy, pervasive disinflation and multiple rounds of central bank easing,
which lowered interest rates in many parts of the world.
Weakness in the world economy started in Asia with economic and financial
stresses throughout most of the continent. While China was able to generate
economic expansion by government spending, economic declines occurred in most
of the rest of Asia. The most severe phase of these crises occurred when
Asian currencies dropped and short-term interest rates rose there as well.
Then Latin America began to weaken, particularly Brazil. Tentative signs of a
bottoming in Asia had emerged by the end of your fund's fiscal period;
however, Brazil had not yet turned the corner.
Europe was full of optimism about the benefits of currency unification into
the Euro as of year-end 1998. The reality was that economic growth in Europe
began the last year at a modest pace and showed signs of stagnation in early
1999. Even so, the new European central bank postponed the reduction in
interest rates at the beginning of 1999, probably because of a desire to build
anti-inflationary credibility. The bank finally eased in April of this year.
The U.S. economy proved to be a superperformer during the period, growing
at an above-trend rate despite the economic weakness overseas. A major reason
for this was that the negative effects of foreign economic weakness on the
traditional industrial sector were offset by positive effects elsewhere in the
economy. Low inflation and low interest rates stimulated the housing and
consumer sectors, while the technology sector continued to expand.
The Federal Reserve eased monetary policy three times beginning on
September 30, 1998, lowering the federal funds rate from 5.50% to 4.75%. This
was not because of any shortfall in U.S. economic growth. Rather, it was a
response to a financial crisis linked to the Russian default and the financial
problems of a major hedge fund. Despite widespread fears, the U.S. economy
never did slow. Long-term interest rates declined into early October, when
fears of financial crisis, deflation and possible economic recession were at
their greatest. However, those rates then drifted higher as the financial
stresses eased and the feared economic slowdown did not materialize.
Market Environment
Moderating economic growth in the U.S., a negligible rate of inflation, and
relatively low interest rates continue to foster a positive atmosphere for
municipal bonds. As measured by commonly accepted indexes, municipal bond
yields have moved very little over the last six-month period, compared to
yields of U.S. Treasury bonds. Treasuries, of course, were affected uniquely
because of the safe haven they provided during the economic and currency
collapses of several foreign countries; lately there has been some liquidation
of Treasuries as recovery in several foreign nations began, thus their price
movements have been more volatile.
Municipal yields continue to be historically generous vis--vis Treasury
bond yields, and that lends support to current price levels. Presently,
municipal bonds with maturities of 20 years and longer provide federally tax-
free yields that exceed 90% of the taxable yields provided by Treasury bonds
with comparable maturities. Also helping to firm up price levels of municipal
bonds is a shortage of supply in the new-issue market. So far in 1999, newly
marketed issues amount to just 77% of 1998's volume. Some reduction in 1999
is expected when compared to 1998, when a number of refundings helped to swell
that year's total issuance to $284 billion, but at this time new issues are
running somewhat behind expectations for 1999.
<PAGE>
Demand continues to be sparked by the after-tax benefits of municipal bond
ownership, recognized mainly by individuals and crossover buyers, the latter
being buyers who commonly operate in both taxable and tax-exempt markets,
depending on yield ratios and after-tax benefits. Institutional demand is not
especially strong right now, and that demand is very specific, centering on
coupon, maturity and several technical features. With supply and demand well
balanced, and no discernible indications of rising inflation and higher
interest rates, it appears that the municipal environment will continue to be
hospitable.
Portfolio Focus
The Massachusetts market continues to reap the rewards of a healthy
economy. Over the past six months the municipal market has not seen the
volatility experienced by the taxable fixed income markets. One major change
that occurred in the municipal market was the shift in spread relationship to
Treasuries. In our last letter we noted that some higher-quality municipal
issues were yielding nearly 100% of Treasuries; since that time, the ratio
has returned to near-historical levels approximating 90%. The municipal
market has settled into a trading range, indicating that the market is not
overly concerned about inflation, but, conversely, there is no strong bias
about the direction of interest rates. Within this framework, we sought to
position paper across the yield curve. We added both discount bonds and some
higher-yielding issues.
Issues that were fully priced and commanded large premiums were sold to
realize the appreciation, and proceeds were reinvested in paper that would
more fully benefit from any upward momentum in the market. The fund
continues to hold a large position in income-producing paper, which we view as
a core position. As measured within our Lipper peer group, the fund achieved
a one-year total return of 5.25%, which compares favorably to the Lipper
category average one-year return of 4.71%. Our high coupon positions, coupled
with the timely selling of securities to lock in gains, were the main
contributors to the fund's above-average return over the period.
Included in this report is a series of detailed statements outlining the
fund's holdings and financial condition. We hope they are informative.
Very truly yours,
/s/Richard J. Moynihan
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
April 19, 1999
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid. Income may be subject to state and local income taxes for non-
Massachusetts residents.
** Distribution rate per share is based upon dividends per share paid from
net investment income during the period, divided by the net asset value per
share at the end of the period. Some income may be subject to the Federal
Alternative Minimum Tax (AMT) for certain shareholders
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund March 31, 1999
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS MASSACHUSETTS
INTERMEDIATE MUNICIPAL BOND FUND AND THE LEHMAN BROTHERS 10-YEAR MUNICIPAL
BOND INDEX
*Source: Lehman Brothers
Average Annual Total Returns
- -------------------------------------------------------------------------------
One Year Ended Five Years Ended From Inception (6/26/92)
March 31, 1999 March 31, 1999 to March 31, 1999
-------------- ---------------- ------------------------
5.25% 5.85% 6.10%
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Massachusetts
Intermediate Municipal Bond Fund on 6/26/92 (Inception Date) to a $10,000
investment made in the Lehman Brothers 10-Year Municipal Bond Index on that
date. For comparative purposes, the value of the Index on 6/30/92 is used as
the beginning value on 6/26/92. All dividends and capital gain distributions
are reinvested.
The Fund invests primarily in Massachusetts municipal securities and
maintains a portfolio with a weighted-average maturity ranging between 3 and
10 years. The Fund's performance shown in the line graph takes into account
fees and expenses. The Lehman Brothers 10-Year Municipal Bond Index is not
limited to investments principally in Massachusetts municipal obligations and
does not take into account charges, fees and other expenses. The Lehman
Brothers 10-Year Municipal Bond Index, unlike the Fund, is an unmanaged total
return performance benchmark for the investment-grade, geographically
unrestricted 10-year tax exempt bond market, consisting of municipal bonds
with maturities of 9-12 years. These factors, coupled with the potentially
longer maturity of the Index, can contribute to the Index potentially
outperforming or underperforming the Fund. Further information relating to
Fund performance, including expense reimbursements, if applicable, is
contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Investments March 31, 1999
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments--99.4% Amount Value
---------- ----------
<S> <C> <C>
Massachusetts--84.6%
Barnstable 4.50%, 3/15/2015.................................................... $ 1,500,000 $ 1,446,150
Boston 6.20%, 7/1/2002......................................................... 865,000 930,506
Fall River, Refunding 5.25%, 6/1/2010 (Insured; MBIA).......................... 1,000,000 1,050,320
Framingham 4.25%, 2/1/2015..................................................... 1,000,000 933,630
Haverhill, Refunding 5%, 8/15/2011 (Insured; FSA).............................. 1,620,000 1,657,438
Lawrence 5%, 9/15/2002......................................................... 1,030,000 1,066,781
Lowell:
5.60%, 4/1/2005 (Insured; FSA).............................................. 1,530,000 1,652,247
5.30%, 12/15/2010 (Insured; AMBAC).......................................... 1,000,000 1,054,550
Lynn, Refunding 5%, 1/15/2006.................................................. 1,185,000 1,243,634
Massachusetts Bay Transportation Authority, Refunding
(General Transportation System):
6%, 3/1/2005.............................................................. 970,000 1,056,737
6%, 3/1/2005 (Prerefunded 3/1/2003) (a)................................... 30,000 32,892
6%, 3/1/2006.............................................................. 1,230,000 1,339,987
6%, 3/1/2006 (Prerefunded 3/1/2003) (a)................................... 20,000 21,928
5.50%, 3/1/2012 (Insured; MBIA)........................................... 1,000,000 1,086,370
Massachusetts Commonwealth:
Consolidated Loan:
5.75%, 5/1/2003........................................................... 500,000 536,830
5.30%, 7/1/2006........................................................... 1,750,000 1,875,720
Refunding:
5.40%, 11/1/2006.......................................................... 2,000,000 2,164,540
6%, 8/1/2010 (Insured; AMBAC)............................................. 1,500,000 1,708,680
Massachusetts Educational Financing Authority, Education Loan Revenue:
5.10%, 12/1/2014 (Insured; MBIA)............................................ 1,000,000 978,300
Refunding 5.70%, 7/1/2011 (Insured; AMBAC).................................. 1,880,000 2,014,758
Massachusetts Health and Educational Facilities Authority, Revenue:
(Bentley College) 5.50%, 7/1/2003 (Insured; MBIA)........................... 500,000 532,535
(Brandeis University) 5.25%, 10/1/2013 (Insured; MBIA)...................... 1,000,000 1,044,360
(Cape Cod Health System)
5%, 11/15/2002 (Insured; College Construction Loan Insurance Association) 1,000,000 1,041,410
(Central New England Health System) 5.75%, 8/1/2003......................... 1,000,000 1,010,200
(Faulkner Hospital) 5.75%, 7/1/2003......................................... 1,850,000 1,952,305
(New England Medical Center Hospitals) 4.90%, 7/1/2006 (Insured; MBIA)...... 1,365,000 1,428,008
(Partners Healthcare System) 5.125%, 7/1/2011 (Insured; MBIA)............... 1,000,000 1,034,590
(Refunding--Baystate Medical Center) 4.90%, 7/1/2005 (Insured; FGIC)........ 1,000,000 1,045,620
(Refunding--Berklee College of Music) 4.75%, 10/1/2009 (Insured; MBIA)...... 1,000,000 1,033,860
(Refunding--Caritas Christi Obligation Group) 5.25%, 7/1/2005............... 1,000,000 1,025,490
(Refunding--Hallmark Health System) 5.25%, 7/1/2010 (Insured; FSA).......... 2,055,000 2,167,265
(Refunding--Massachusetts General Hospital):
4.85%, 7/1/2004 (Insured; AMBAC).......................................... 1,000,000 1,038,150
6%, 7/1/2004 (Insured; AMBAC)............................................. 1,875,000 2,052,263
</TABLE>
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) March 31, 1999
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- ----------
<S> <C> <C>
Massachusetts (continued)
Massachusetts Housing Finance Agency, Housing Projects, Refunding
6.30%, 10/1/2013............................................................ $ 2,000,000 $ 2,137,320
Massachusetts Industrial Finance Agency, Revenue:
(Refunding--Combined Jewish Philanthropies) 5.65%, 2/1/2003 (Insured;
AMBAC)..................................................................... 795,000 847,398
(Refunding--Ogden Haverhill Project) 5.45%, 12/1/2012....................... 1,000,000 1,018,520
(Refunding--Refusetech, Inc. Project) 6.15%, 7/1/2002....................... 1,800,000 1,892,394
Massachusetts Municipal Wholesale Electric Co., Power Supply Systems Revenue:
5.875%, 7/1/2003............................................................ 500,000 534,760
Refunding 6.75%, 7/1/2008................................................... 1,000,000 1,083,430
Massachusetts Port Authority, Revenue 5.10%, 7/1/2010.......................... 1,175,000 1,221,824
Massachusetts Water Pollution Abatement Trust, Water Pollution Abatement
Revenue
(Pool Loan Program):
5.25%, 2/1/2008........................................................... 1,000,000 1,070,290
5.70%, 2/1/2012........................................................... 2,260,000 2,428,506
Milford 5.10%, 12/15/2010...................................................... 1,300,000 1,353,963
New Bedford 5.60%, 3/1/2003.................................................... 600,000 630,468
New England Education Loan Marketing Corp., Student Loan Revenue:
6%, 3/1/2002................................................................ 500,000 523,185
6.90%, 11/1/2009........................................................... 1,000,000 1,139,600
North Andover 6.55%, 11/1/2005 (Prerefunded 11/1/2002) (a).................... 300,000 334,179
Pioneer Valley Transit Authority, COP 5.70%, 2/1/2003 (Insured; CGIC)......... 1,240,000 1,322,100
Plymouth County, COP (Correctional Facility Project)
Refunding 5%, 4/1/2015 (Insured; AMBAC).................................... 1,500,000 1,508,745
Swansea 6.60%, 1/15/2005 (Prerefunded 1/15/2002)(a)........................... 100,000 109,508
Worcester 6%, 8/1/2003........................................................ 545,000 585,358
U. S. Related--14.8%
Guam Airport Authority, Revenue 6%, 10/1/2000................................. 1,100,000 1,135,123
Guam Government, LOR, Refunding (Infrastructure Improvement)
5%, 11/1/2012 (Insured; AMBAC)............................................. 1,000,000 1,031,070
Puerto Rico Commonwealth:
5.25%, 7/1/2014............................................................ 1,000,000 1,048,740
Refunding:
5.375%, 7/1/2005......................................................... 1,000,000 1,071,600
5.50%, 7/1/2011.......................................................... 1,000,000 1,076,200
Puerto Rico Electric Power Authority, Power Revenue 5.50%, 7/1/2008........... 1,000,000 1,085,550
Puerto Rico Industrial Tourist Educational, Medical and Environmental Control
Facilities Financing Authority, Industrial Revenue (Guaynabo Warehouse)
4.35%, 7/1/2006............................................................ 1,000,000 984,070
Virgin Islands Public Finance Authority, Revenue, Refunding
6%, 10/1/2004.............................................................. 965,000 1,006,437
</TABLE>
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) March 31, 1999
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- ----------
<S> <C> <C>
U. S. Related (continued)
Virgin Islands Water and Power Authority, Electric Systems, Refunding:
5.125%, 7/1/2003............................................................ $ 1,000,000 $ 1,040,330
5.125%, 7/1/2011........................................................... 1,000,000 1,024,250
------------
TOTAL INVESTMENTS (cost $67,350,889).......................................... 99.4% $ 70,502,972
----- ------------
----- ------------
CASH AND RECEIVABLES (NET).................................................... 6% $ 454,126
----- ------------
----- ------------
NET ASSETS.................................................................... 100.0% $ 70,957,098
----- ------------
----- ------------
<CAPTION>
Summary of Abbreviations
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation FSA Financial Security Assurance
CGIC Capital Guaranty Insurance Company LOR Limited Obligation Revenue
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
</TABLE>
Summary of Combined Ratings (Unaudited)
- -------------------------------------------------------------------------------
Fitch or Moody's or Standard & Poor's Percentage of Value
- ----- ------- ----------------- -------------------
AAA Aaa AAA 48.8%
AA Aa AA 16.4
A A A 11.9
BBB Baa BBB 21.5
Not Rated (b) Not Rated (b) Not Rated (b) 1.4
------
100.0%
------
------
Notes to Statement of Investments:
- -------------------------------------------------------------------------------
(a) 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.
(b) Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the Fund may invest.
See notes to financial statements.
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities March 31, 1999
<TABLE>
<CAPTION>
Cost Value
------------ -------------
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments..... $67,350,889 $70,502,972
Interest receivable......................................... 964,105
Receivable for shares of Beneficial Interest subscribed..... 12,500
Prepaid expenses............................................ 13,893
-----------
71,493,470
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates............... 36,194
Cash overdraft due to Custodian............................. 457,120
Payable for shares of Beneficial Interest redeemed.......... 19,954
Accrued expenses............................................ 23,104
-----------
536,372
-----------
NET ASSETS..................................................................... $70,957,098
-----------
-----------
REPRESENTED BY: Paid-in capital.............................................. $70,376,975
Accumulated net realized gain (loss) on investments.......... (2,571,960)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4..................................... 3,152,083
-----------
NET ASSETS..................................................................... $70,957,098
-----------
-----------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized).. 5,174,138
NET ASSET VALUE, offering and redemption price per share--Note 3(d)............. $13.71
------
------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Operations Year Ended March 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................................. $3,405,306
EXPENSES: Management fee--Note 3(a)................................... $ 404,723
Shareholder servicing costs--Note 3(b)...................... 114,528
Professional fees........................................... 29,933
Trustees' fees and expenses--Note 3(c)...................... 18,779
Custodian fees.............................................. 7,199
Prospectus and shareholders' reports........................ 6,681
Registration fees........................................... 6,610
Loan commitment fees--Note 2................................ 357
Miscellaneous............................................... 9,677
------------
Total Expenses............................................ 598,487
Less--reduction in management fee due to
undertaking--Note 3(a).................................... (58,500)
------------
Net Expenses.............................................. 539,987
-----------
INVESTMENT INCOME--NET......................................................... 2,865,319
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments..................... $ 258,705
Net unrealized appreciation (depreciation) on investments... 308,345
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 567,050
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $3,432,369
-----------
-----------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 1999 March 31, 1998
-------------- ---------------
<S> <C> <C>
OPERATIONS:
Investment income--net...................................................... $ 2,865,319 $ 2,818,405
Net realized gain (loss) on investments..................................... 258,705 363,394
Net unrealized appreciation (depreciation) on investments................... 308,345 2,113,696
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations........... 3,432,369 5,295,495
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net...................................................... (2,865,319) (2,818,405)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold............................................... 14,119,601 12,493,557
Dividends reinvested........................................................ 2,146,529 2,079,034
Cost of shares redeemed..................................................... (11,561,676) (13,294,850)
------------ ------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions... 4,704,454 1,277,741
------------ ------------
Total Increase (Decrease) in Net Assets................................. 5,271,504 3,754,831
NET ASSETS:
Beginning of Period......................................................... 65,685,594 61,930,763
------------ ------------
End of Period............................................................... $ 70,957,098 $ 65,685,594
------------ ------------
------------ ------------
Shares Shares
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................................................. 1,026,555 931,247
Shares issued for dividends reinvested...................................... 156,366 154,589
Shares redeemed............................................................. (842,796) (990,796)
------------ ------------
Net Increase (Decrease) in Shares Outstanding............................. 340,125 95,040
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Massachusetts 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.
<TABLE>
<CAPTION>
Year Ended March 31,
--------------------------------------------------------------
PER SHARE DATA: 1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............... $13.59 $13.07 $13.15 $12.81 $12.91
------ ------ ------ ------ ------
Investment Operations:
Investment income--net............................. .58 .59 .58 .59 .61
Net realized and unrealized gain (loss)
on investments................................... .12 .52 (.08) .34 (.08)
------ ------ ------ ------ ------
Total from Investment Operations................... .70 1.11 .50 .93 .53
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net.............. (.58) (.59) (.58) (.59) (.61)
Dividends from net realized gain on investments.... -- -- -- -- (.02)
------ ------ ------ ------ ------
Total Distributions................................ (.58) (.59) (.58) (.59) (.63)
------ ------ ------ ------ ------
Net asset value, end of period..................... $13.71 $13.59 $13.07 $13.15 $12.81
------ ------ ------ ------ ------
------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN............................... 5.25% 8.63% 3.98% 7.22% 4.23%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............ .80% .80% .80% .75% .49%
Ratio of net investment income
to average net assets............................ 4.25% 4.39% 4.42% 4.45% 4.82%
Decrease reflected in above expense ratios
due to undertakings by the Manager............... .09% .06% .10% .14% .42%
Portfolio Turnover Rate............................ 13.04% 29.22% 23.45% 31.81% 9.41%
Net Assets, end of period (000's Omitted).......... $70,957 $65,686 $61,931 $68,129 $68,503
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund
- -------------------------------------------------------------------------------
NOTES TO STATEMENT OF INVESTMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Massachusetts Intermediate Municipal Bond Fund (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 as high a level of current
income exempt from Federal and Massachusetts income taxes as is consistent
with the preservation of capital. The Dreyfus Corporation (the "Manager")
serves as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A. 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 securities exchange on which such securities are primarily traded
or 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. Under the terms of the
custody agreement, the Fund received net earnings credits of $2,656 during the
period ended March 31, 1999 based on available cash balances left on deposit.
Income earned under this arrangement is included in interest income.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
(c) Dividends to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code of
1986, as amended (the "Code"). To the extent that net realized capital gain
can be offset by capital loss carryovers, it is the policy of the Fund not to
distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Code, and to
make distributions of income and net realized capital gain sufficient to
relieve it from substantially all Federal income and excise taxes.
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
The Fund has an unused capital loss carryover of approximately $2,571,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to March 31, 1999. If not
applied, $2,265,000 of the carryover expires in fiscal 2004 and $306,000
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 its pro rata portion
of the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
March 31, 1999, 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 had undertaken from
April 1, 1998 through March 31, 1999 to reduce the management fee paid by the
Fund, to the extent that the Fund's aggregate annual expenses, exclusive of
axes, 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
undertaking, amounted to $58,500 during the period ended March 31, 1999.
(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 March 31, 1999, the Fund was charged $68,585 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 March 31, 1999, the Fund was charged $31,006 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 $1,000 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A 1% redemption fee is charged and retained by the Fund on shares
redeemed within fifteen days following the date of issuance, including
redemptions made through the use of the Fund Exchange Privilege.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended March 31, 1999
amounted to $14,773,261 and $8,611,073, respectively.
At March 31, 1999, accumulated net unrealized appreciation on investments
was $3,152,083, consisting of $3,215,216 gross unrealized appreciation and
$63,133 gross unrealized depreciation.
At March 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).
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund
- -------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Trustees
Dreyfus Massachusetts Intermediate Municipal Bond Fund
We have audited the accompanying statement of assets and liabilities of
Dreyfus Massachusetts Intermediate Municipal Bond Fund, including the
statement of investments, as of March 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
confirmation of securities owned as of
March 31, 1999 by correspondence with the custodian. 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 Massachusetts Intermediate Municipal Bond Fund at March 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.
/s/Ernst & Young LLP
New York, New York
April 26, 1999
<PAGE>
Dreyfus Massachusetts Intermediate Municipal Bond Fund
- -------------------------------------------------------------------------------
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during its fiscal year ended March
31, 1999 as "exempt-interest dividends" (not generally subject to regular
Federal and, for individuals who are Massachusetts residents, Massachusetts
personal income taxes).
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1999 calendar year
on Form 1099-DIV which will be mailed by January 31, 2000.
<PAGE>
Dreyfus Massachusetts 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. 268AR993
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
AND THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
LEHMAN BROTHERS
10-YEAR DREYFUS MASSACHUSETTS
PERIOD MUNICIPAL INTERMEDIATE
BOND INDEX * MUNICIPAL BOND FUND
6/26/92 10,000 10,000
3/31/93 10,898 10,885
3/31/94 11,205 11,231
3/31/95 12,048 11,706
3/31/96 13,116 12,551
3/31/97 13,800 13,051
3/31/98 15,233 14,177
3/31/99 16,188 14,922
* Source: Lehman Brothers
