Dreyfus Massachusetts Intermediate Municipal Bond Fund
ANNUAL REPORT March 31, 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 Fund Performance
7 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
19 Report of Independent Auditors
20 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Massachusetts
Intermediate Municipal Bond Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Massachusetts
Intermediate Municipal Bond Fund, covering the 12-month period from April 1,
1999 through March 31, 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, Monica Wieboldt.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates five times during the reporting period, for a total increase of 125 basis
points. While higher interest rates led to an erosion of municipal bond prices
during the first half of the reporting period, the overall market showed renewed
signs of strength during the first quarter of 2000.
Municipal bonds were also influenced by supply-and-demand considerations. These
technical influences have caused the yields of tax-exempt bonds to rise to very
attractive levels compared to the after-tax yields of taxable bonds of
comparable maturity and credit quality. This is especially true for investors in
the higher federal and state income tax brackets.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Massachusetts Intermediate Municipal Bond
Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
April 12, 2000
DISCUSSION OF FUND PERFORMANCE
Monica Wieboldt, Portfolio Manager
How did Dreyfus Massachusetts Intermediate Municipal Bond Fund perform during
the period?
The portfolio produced a 0.03% total return(1) over the 12-month period ended
March 31, 2000. This compares with a total return of -0.93% for the Lipper
Massachusetts Intermediate Municipal Debt Funds category average over the same
period.(2)
We attribute the fund' s absolute performance to a rising interest-rate
environment, which caused most municipal bond prices to decline. However, the
fund' s favorable relative performance compared to that of its category average
was attributable to the fund's security selection strategy, which was designed
to take advantage of potentially attractive values created during the municipal
market' s decline. As a result, negative returns produced during the fourth
quarter of 1999 were offset during the market rally that ensued during the first
quarter of 2000.
What is the fund's investment approach?
The fund' s objective is to seek as high a level of income exempt from federal
and Massachusetts state income taxes as is consistent with the preservation of
capital. We also seek to provide a competitive total return consistent with
this income objective.
In pursuing these objectives, we employ two primary strategies. First, we
tactically manage the portfolio's average duration -- a measure of sensitivity
to changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued bonds to increase, we may
reduce the portfolio's average duration to make cash available for the purchase
of higher yielding securities. Conversely, if we expect demand for municipal
bonds to surge at a time when we anticipate little issuance, we may increase the
portfolio' s average duration to maintain current yields for as long as
practical.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
Second, we attempt to add value by selecting the tax-exempt bonds that we
believe are most likely to provide the highest total returns -- which includes
both tax-exempt income and price changes over time -- with the least risk.
What other factors influenced the fund's performance?
Although the fund's performance was hurt by a difficult investment environment
during most of 1999, the first quarter of 2000 provided better market conditions
and a market rally.
When the reporting period began on April 1, 1999, investors had become concerned
that strong economic growth might rekindle long-dormant inflationary pressures.
In an attempt to forestall a reacceleration of inflation, the Federal Reserve
Board raised short-term interest rates five times, for a total increase of 125
basis points since last summer, causing most bond prices to fall.
Municipal bond prices also fell during the second half of 1999 because of
adverse supply-and-demand influences. For a variety of reasons, institutional
investors participated less in the tax-exempt market. Despite strong demand from
individual investors, the absence of institutional buyers helped reduce overall
demand and drove municipal bond prices down.
During the first quarter of 2000, however, issuance of municipal bonds
nationally declined approximately 40% compared to the same period one year ago.
This supply reduction, combined with robust demand from individual investors,
helped support a rebound of municipal bond prices, including bonds from
Massachusetts issuers, and especially among longer term bonds. The fund
benefited from this environment.
What is the fund's current strategy?
In an environment characterized by a relative scarcity of tax-exempt bonds from
Massachusetts issuers, we began to modestly extend the portfolio's average
duration. Earlier this year, as rates began to peak, we took a more constructive
view of the market and found values further out on the yield curve, at 10-15
years, where we were able to lock in
paper at attractive yields. This is in contrast to our strategy during much of
1999, when we focused on shorter term securities in order to mitigate the
adverse consequences of price erosion that typically accompany rising interest
rates. The current consensus leads us to believe that most of the Federal
Reserve Board' s rate hikes are in place. However, we do expect that further
tightenings will occur. Nevertheless, at current levels the municipal market
remains attractive. In fact, because of unusual supply-and-demand factors in
the U.S. Treasury securities market, some 30-year municipal bonds at times
provided higher yields than 30-year U.S. Treasury bonds.
Our security selection strategy has continued to focus on high quality bonds
from well-known issuers because these securities tend to enjoy the greatest
level of liquidity and credit quality. We have also recently begun to reduce our
exposure to discount bonds -- those selling at less than par value -- by taking
profits in securities that have performed well during the first quarter of 2000.
April 12, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL
TAXES FOR NON-MASSACHUSETTS RESIDENTS, AND SOME INCOME MAY BE SUBJECT TO THE
FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF
ANY, ARE FULLY TAXABLE. RETURN FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND
EXPENSES BY THE DREYFUS CORPORATION PURSUANT TO AN UNDERTAKING IN EFFECT THAT
MAY BE EXTENDED, TERMINATED OR MODIFIED AT ANY TIME. HAD THESE EXPENSES NOT BEEN
ABSORBED, THE FUND'S RETURN WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
<TABLE>
<CAPTION>
FUND PERFORMANCE
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
--------------------------------------------------------------------------------
Average Annual Total Returns AS OF 3/31/00
Inception From
Date 1 Year 5 Years Inception
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FUND 6/26/92 0.03% 4.98% 5.30%
((+)) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
</TABLE>
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 $10,000
INVESTMENT MADE IN THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX ON THAT
DATE. FOR COMPARATIVE PURPOSES, THE VALUE OF THE INDEX ON 6/30/92 IS USED AS THE
BEGINNING VALUE ON 6/26/92. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE
REINVESTED.
THE FUND INVESTS PRIMARILY IN MASSACHUSETTS MUNICIPAL SECURITIES AND MAINTAINS A
PORTFOLIO WITH A WEIGHTED-AVERAGE MATURITY RANGING BETWEEN 3 AND 10 YEARS. THE
FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT FEES AND EXPENSES.
THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX IS NOT LIMITED TO INVESTMENTS
PRINCIPALLY IN MASSACHUSETTS MUNICIPAL OBLIGATIONS AND DOES NOT TAKE INTO
ACCOUNT CHARGES, FEES AND OTHER EXPENSES. THE LEHMAN BROTHERS 10-YEAR MUNICIPAL
BOND INDEX, UNLIKE THE FUND, IS AN UNMANAGED TOTAL RETURN PERFORMANCE BENCHMARK
FOR THE INVESTMENT-GRADE, GEOGRAPHICALLY UNRESTRICTED 10-YEAR TAX-EXEMPT BOND
MARKET, CONSISTING OF MUNICIPAL BONDS WITH MATURITIES OF 9-12 YEARS. THESE
FACTORS, COUPLED WITH THE POTENTIALLY LONGER MATURITY OF THE INDEX, CAN
CONTRIBUTE TO THE INDEX POTENTIALLY OUTPERFORMING OR UNDERPERFORMING THE FUND.
FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE
REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION
OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT.
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
March 31, 2000
Principal
LONG-TERM MUNICIPAL INVESTMENTS--99.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS--82.2%
<S> <C> <C>
Barnstable 4.50%, 3/15/2015 1,000,000 885,360
Boston 5.75%, 2/1/2013 1,000,000 1,037,550
Boston Industrial Development Financing Authority, Revenue
(Pilot Seafood Project) 5.875%, 4/1/2030 1,000,000 1,009,990
Fall River 5.25%, 6/1/2010 (Insured; MBIA) 1,000,000 1,006,800
Haverhill 5%, 8/15/2011 (Insured; FSA) 1,620,000 1,583,518
Lawrence 5%, 9/15/2002 1,030,000 1,033,389
Lowell:
5.60%, 4/1/2005 (Insured; FSA) 1,530,000 1,575,288
5.30%, 12/15/2010 (Insured; AMBAC) 1,000,000 1,014,470
Lynn 5%, 1/15/2006 1,185,000 1,190,522
Massachusetts Bay Transportation Authority
(General Transportation System):
6%, 3/1/2005 970,000 1,009,207
6%, 3/1/2005 (Prerefunded 3/1/2003) 30,000 (a) 31,528
6%, 3/1/2006 1,230,000 1,278,622
6%, 3/1/2006 (Prerefunded 3/1/2003) 20,000 (a) 21,019
5.50%, 3/1/2012 (Insured; MBIA) 1,000,000 1,026,800
Massachusetts Commonwealth:
5.79%, 9/1/2005 1,000,000 (b) 1,013,580
5.40%, 11/1/2006 2,000,000 2,055,040
6%, 8/1/2010 (Insured; AMBAC) 1,500,000 1,610,385
5%, 8/1/2017 1,000,000 927,110
Consolidated Loan:
5.75%, 5/1/2003 500,000 514,955
5.30%, 7/1/2006 1,750,000 1,786,680
Massachusetts Developmental Finance Agency, RRR
(Ogden Haverhill) 6.70%, 12/1/2014 825,000 838,315
Massachusetts Educational Financing Authority,
Education Loan Revenue
5.70%, 7/1/2011 (Insured; AMBAC) 1,780,000 1,809,673
Massachusetts Health and
Educational Facilities Authority, Revenue:
(Bentley College):
5.50%, 7/1/2003 (Insured; MBIA) 260,000 265,749
5.50%, 7/1/2003 (Insured; MBIA, Prerefunded 7/1/2002) 240,000 (a) 248,438
(Cape Cod Health System)
5%, 11/15/2002
(Insured; College Construction Loan Insurance Association) 1,000,000 1,005,430
(Caritas Christi Obligation Group) 5.25%, 7/1/2005 1,000,000 953,060
(Central New England Health Systems)
5.75%, 8/1/2003 725,000 701,720
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
Massachusetts Health and
Educational Facilities Authority, Revenue (continued):
(Faulkner Hospital) 5.75%, 7/1/2003 1,850,000 1,882,708
(Hallmark Health System) 5.25%, 7/1/2010 (Insured; FSA) 2,055,000 2,045,978
(Massachusetts General Hospital)
6%, 7/1/2004 (Insured; AMBAC) 1,875,000 1,946,194
(New England Medical Center Hospitals)
4.90%, 7/1/2006 (Insured; MBIA) 1,365,000 1,359,895
(Partners Healthcare System)
5.125%, 7/1/2011 (Insured; MBIA) 1,000,000 973,260
Massachusetts Housing Finance Agency, Housing Projects
6.30%, 10/1/2013 2,000,000 2,049,840
Massachusetts Industrial Finance Agency, Revenue:
(Combined Jewish Philanthropies)
5.65%, 2/1/2003 (Insured; AMBAC) 795,000 814,016
(Ogden Haverhill Project) 5.45%, 12/1/2012 1,000,000 917,410
(Refusetech, Inc. Project) 6.15%, 7/1/2002 1,800,000 1,828,260
Massachusetts Municipal Wholesale Electric Co.,
Power Supply Systems Revenue:
5.875%, 7/1/2003 500,000 512,100
6.75%, 7/1/2008 1,000,000 1,046,960
Massachusetts Port Authority, Revenue:
5.10%, 7/1/2010 1,175,000 1,159,878
(United Airlines, Inc. Project) 5.75%, 10/1/2029 1,000,000 999,160
Massachusetts Water Pollution Abatement Trust,
Water Pollution Abatement Revenue
(Pool Loan Program):
5.25%, 2/1/2008 1,000,000 1,019,540
5.70%, 2/1/2012 2,260,000 2,326,331
New Bedford 5.60%, 3/1/2003 600,000 608,250
New England Education Loan Marketing Corp.,
Student Loan Revenue:
6%, 3/1/2002 500,000 508,320
6.90%, 11/1/2009 1,000,000 1,080,470
Pioneer Valley Transit Authority, COP
5.70%, 2/1/2003 (Insured; CGIC) 1,240,000 1,270,628
Plymouth County, COP (Correctional Facility Project)
5%, 4/1/2015 (Insured; AMBAC) 1,500,000 1,417,470
Worcester 6%, 8/1/2003 545,000 560,238
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U. S. RELATED--16.9%
Guam Airport Authority, Revenue 6%, 10/1/2000 1,100,000 1,106,919
Guam Government, LOR (Infrastructure Improvement)
5%, 11/1/2012 (Insured; AMBAC) 1,000,000 975,790
Puerto Rico Commonwealth:
5.375%, 7/1/2005 1,000,000 1,020,980
(Public Improvement):
5.50%, 7/1/2011 1,000,000 1,032,540
5.25%, 7/1/2014 (Insured; FSA) 1,000,000 1,006,410
Puerto Rico Electric Power Authority, Power Revenue
5.50%, 7/1/2008 1,000,000 1,028,950
Puerto Rico Industrial Tourist, Educational,
Medical and Environmental Control Facilities
Financing Authority, Industrial Revenue
(Guaynabo Warehouse) 4.35%, 7/1/2006 1,000,000 919,090
Virgin Islands Public Finance Authority, Revenue:
6%, 10/1/2004 965,000 965,183
5.625%, 10/1/2010 1,000,000 992,580
Virgin Islands Water and Power Authority, Electric Systems:
5.125%, 7/1/2003 1,000,000 1,007,950
5.125%, 7/1/2011 1,000,000 981,490
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TOTAL INVESTMENTS (cost $64,533,300) 99.1% 64,798,986
CASH AND RECEIVABLES (NET) .9% 576,053
NET ASSETS 100.0% 65,375,039
The Fund
</TABLE>
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
CGIC Capital Guaranty
Insurance Company
COP Certificate of Participation
FSA Financial Security Assurance
LOR Limited Obligation Revenue
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
RRR Resources Recovery Revenue
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 42.4
AA Aa AA 26.8
A A A 6.3
BBB Baa BBB 23.0
Not Rated (c) Not Rated (c) Not Rated (c) 1.5
100.0
(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) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT MARCH 31, 2000 THIS SECURITY
AMOUNTED TO $1,013,580 OR 1.6% OF NET ASSETS.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 64,533,300 64,798,986
Interest receivable 928,021
Prepaid expenses 2,380
65,729,387
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 27,460
Cash overdraft due to Custodian 289,202
Accrued expenses 37,686
354,348
--------------------------------------------------------------------------------
NET ASSETS ($) 65,375,039
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 67,785,094
Accumulated net realized gain (loss) on investments (2,675,741)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 265,686
--------------------------------------------------------------------------------
NET ASSETS ($) 65,375,039
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
4,984,395
NET ASSET VALUE, offering and redemption price per share-Note 3(d) ($) 13.12
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Year Ended March 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 3,465,059
EXPENSES:
Management fee--Note 3(a) 398,003
Shareholder servicing costs--Note 3(b) 105,693
Professional fees 42,551
Trustees' fees and expenses--Note 3(c) 21,560
Prospectus and shareholders' reports 11,463
Custodian fees 6,805
Registration fees 6,679
Loan commitment fees--Note 2 753
Miscellaneous 11,525
TOTAL EXPENSES 605,032
Less--reduction in management fee due to
undertaking--Note 3(a) (73,608)
NET EXPENSES 531,424
INVESTMENT INCOME--NET 2,933,635
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (103,781)
Net unrealized appreciation (depreciation) on investments (2,886,397)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (2,990,178)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (56,543)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended March 31,
----------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 2,933,635 2,865,319
Net realized gain (loss) on investments (103,781) 258,705
Net unrealized appreciation (depreciation)
on investments (2,886,397) 308,345
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (56,543) 3,432,369
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (2,933,635) (2,865,319)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 17,678,602 14,119,601
Dividends reinvested 2,051,261 2,146,529
Cost of shares redeemed (22,321,744) (11,561,676)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (2,591,881) 4,704,454
TOTAL INCREASE (DECREASE) IN NET ASSETS (5,582,059) 5,271,504
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 70,957,098 65,685,594
END OF PERIOD 65,375,039 70,957,098
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,333,950 1,026,555
Shares issued for dividends reinvested 155,113 156,366
Shares redeemed (1,678,806) (842,796)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (189,743) 340,125
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
<TABLE>
<CAPTION>
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.
Year Ended March 31,
-------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 13.71 13.59 13.07 13.15 12.81
Investment Operations:
Investment income--net .59 .58 .59 .58 .59
Net realized and unrealized
gain (loss) on investments (.59) .12 .52 (.08) .34
Total from Investment Operations -- .70 1.11 .50 .93
Distributions:
Dividends from investment income--net (.59) (.58) (.59) (.58) (.59)
Net asset value, end of period 13.12 13.71 13.59 13.07 13.15
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) .03 5.25 8.63 3.98 7.22
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .80 .80 .80 .80 .75
Ratio of net investment income
to average net assets 4.42 4.25 4.39 4.42 4.45
Decrease reflected in above expense ratios
due to undertakings by
The Dreyfus Corporation .11 .09 .06 .10 .14
Portfolio Turnover Rate 15.05 13.04 29.22 23.45 31.81
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 65,375 70,957 65,686 61,931 68,129
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
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 state 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., 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 (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 The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 receives net earnings credits based on available cash
balances left on deposit.
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.
The fund has an unused capital loss carryover of approximately $2,534,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to March 31, 2000. This amount
is calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, $2,228,000 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 $500 million
redemption credit facility (the "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, 2000, 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, 1999 through March 31, 2000 to reduce the management fee paid by the fund, to
the extent that the fund' s aggregate annual expenses, exclusive of taxes,
brokerage fees, interest on borrowings, commitment fees and extraordinary
expenses, exceeded 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 $73,608 during the period ended March 31, 2000.
(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 The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 2000, the fund was
charged $63,154 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, 2000, the fund was charged $28,592 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's exchange privilege. During the period ended March
31, 2000, redemption fees retained by the fund amounted to $30.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended March 31, 2000, amounted to
$9,713,630 and $12,374,452, respectively.
At March 31, 2000, accumulated net unrealized appreciation on investments was
$265,686, consisting of $949,058 gross unrealized appreciation and $683,372
gross unrealized depreciation.
At March 31, 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).
REPORT OF 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, 2000, 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 auditing standards generally accepted
in the United States. 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, 2000 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, 2000, 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 accounting principles
generally accepted in the United States.
New York, New York
May 1, 2000
The 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, 2000 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 2000 calendar year on Form 1099-DIV which
will be mailed by January 31, 2001.
For More Information
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
100 Church Street
New York, NY 10286
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 268AR003
