Dreyfus Massachusetts Intermediate Municipal Bond Fund
SEMIANNUAL REPORT September 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
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 semiannual report for Dreyfus Massachusetts
Intermediate Municipal Bond Fund, covering the six-month period from April 1,
2000 through September 30, 2000. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Monica Wieboldt.
Despite some modest fluctuations because of changing economic conditions,
municipal bond prices rose modestly over the past six months with a rally in the
municipal bond market. Most sectors of the municipal bond market have also
benefited from slowing economic growth as well. Additionally, the moderating
effects of the Federal Reserve Board's (the "Fed") interest-rate hikes during
the first half of 2000, helped the Fed to achieve its goal of slowing the U.S.
economy. Other factors such as higher energy prices and a weak euro also served
to slow economic growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent, the relative stability and
income potential of municipal bonds can make them an attractive investment as
part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620
Thank you for investing in Dreyfus Massachusetts Intermediate Municipal Bond
Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
October 16, 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 3.46% total return over the six-month period ended
September 30, 2000.(1) This compares with a total return of 3.31% for the Lipper
Massachusetts Intermediate Municipal Debt Funds category average over the same
period.(2)
We attribute our performance to a relatively strong investment environment for
municipal bonds nationally. The market rally was driven primarily by signs of an
economic slowdown throughout the U.S., as well as positive supply-and-demand
factors affecting municipal bonds from Massachusetts and other states.
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 managing the fund, we employ two primary strategies. First, we tactically
manage the portfolio's average effective 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 new 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 effective duration to maintain current yields for as long as practical.
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 include both
tax-exempt income and price changes over time.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was positively influenced over the past six months by favorable
economic and market conditions. When the reporting period began on April 1,
2000, the U.S. economy continued to grow strongly, raising concerns that
long-dormant inflationary pressures might reemerge. In response, the Federal
Reserve Board (the "Fed" ) raised short-term interest rates once during the
reporting period. However, signs soon emerged that the Fed's previous rate hikes
were having the desired effect of slowing the economy. Fewer housing starts,
moderating growth and little change in the core inflation rate may suggest that
the Fed's restrictive monetary policies could be near an end.
In addition, the continuing strength of the U.S. economy helped keep municipal
bond yields relatively low compared to taxable bonds. Massachusetts enjoyed
higher tax revenues, which curtailed the state's need to borrow and resulted in
a reduced supply of securities compared to the same period in 1999. At the same
time, demand for municipal bonds has been strong from Massachusetts residents
seeking to protect wealth, especially in the state's high tech community. When
demand rises and supply falls, prices of existing bonds tend to move higher
In this environment, we sold some of our holdings with a shorter term to
maturity. We redeployed the proceeds of those sales primarily into longer term
insured bonds that typically appeal to individual investors. These changes
enabled us to extend the fund's average duration and consolidate our holdings
within the 10- to 15-year maturity range, which in turn allowed the fund to
benefit from positive conditions created by strong demand within the
intermediate maturity range of Massachusetts' municipal bond market.
What is the fund's current strategy?
In our view, while slower economic growth and fewer inflation concerns should
benefit the municipal bond market over the long term, the market may experience
some weakness over the near term as it digests its recent gains and prepares for
concerns that typically affect municipal bonds at year-end. Accordingly, we have
recently increased our cash position in anticipation of better values and
greater investment opportunities ahead.
As of September 30, the fund's average duration was what we consider to be in a
neutral range. This position is designed to lock in prevailing yields for a
reasonable period while giving us the flexibility we need to access higher
yielding opportunities as they become available.
October 16, 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 INC.
The Fund
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
September 30, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
Principal
LONG-TERM MUNICIPAL INVESTMENTS--93.9% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS--76.8%
<S> <C> <C>
Boston 5.75%, 2/1/2013 1,000,000 1,045,850
Boston Industrial Development Financing Authority, Revenue
(Pilot Seafood Project) 5.875%, 4/1/2030 1,000,000 1,019,180
Fall River 5.25%, 6/1/2010 (Insured; MBIA) 1,000,000 1,021,930
Haverhill 5%, 8/15/2011 (Insured; FSA) 1,620,000 1,611,187
Lowell:
5.60%, 4/1/2005 (Insured; FSA) 1,530,000 1,589,410
5.30%, 12/15/2010 (Insured; AMBAC) 1,000,000 1,029,080
Massachusetts Bay Transportation Authority
(General Transportation System):
6%, 3/1/2005 970,000 1,016,075
6%, 3/1/2005 (Prerefunded 3/1/2003) 30,000 (a) 31,563
6%, 3/1/2006 1,230,000 1,288,425
6%, 3/1/2006 (Prerefunded 3/1/2003) 20,000 (a) 21,042
5.50%, 3/1/2012 (Insured; MBIA) 1,000,000 1,040,860
Massachusetts Commonwealth:
4.39%, 9/1/2005 1,000,000 (b,c) 1,038,780
6%, 8/1/2010 (Insured; AMBAC) 1,500,000 1,631,760
5%, 8/1/2017 1,000,000 937,650
Consolidated Loan:
5.75%, 5/1/2003 500,000 515,645
5.30%, 7/1/2006 1,750,000 1,811,652
Massachusetts Developmental Finance Agency, RRR
(Ogden Haverhill) 6.70%, 12/1/2014 825,000 840,551
Massachusetts Educational Financing Authority,
Education Loan Revenue
5.70%, 7/1/2011 (Insured; AMBAC) 1,745,000 1,797,141
Massachusetts Health and Educational
Facilities Authority, Revenue:
(Bentley College):
5.50%, 7/1/2003 (Insured; MBIA) 260,000 266,614
5.50%, 7/1/2003 (Prerefund 7/1/2002, Insured; MBIA) 240,000 (a) 248,738
(Cape Cod Health System)
5%, 11/15/2002 (Insured; College Construction
Loan Insurance Association) 1,000,000 1,009,280
(Caritas Christi Obligation Group) 5.25%, 7/1/2005 1,000,000 951,340
(Central New England Health Systems)
5.75%, 8/1/2003 555,000 535,769
(Faulkner Hospital) 5.75%, 7/1/2003 1,850,000 1,886,723
(Hallmark Health System) 5.25%, 7/1/2010 (Insured; FSA) 2,055,000 2,075,941
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
Massachusetts Health and
Educational Facilities Authority, Revenue (continued):
(Massachusetts General Hospital)
6%, 7/1/2004 (Insured; AMBAC) 1,875,000 1,961,475
(New England Medical Center Hospitals)
4.90%, 7/1/2006 (Insured; MBIA) 1,365,000 1,380,247
(Partners Healthcare System)
5.125%, 7/1/2011 (Insured; MBIA) 1,000,000 1,001,320
Massachusetts Housing Finance Agency, Housing Projects
6.30%, 10/1/2013 2,000,000 2,047,880
Massachusetts Industrial Finance Agency, Revenue:
(Combined Jewish Philanthropies)
5.65%, 2/1/2003 (Insured; AMBAC) 795,000 815,471
(Ogden Haverhill Project) 5.45%, 12/1/2012 1,000,000 940,130
(Refusetech, Inc. Project) 6.15%, 7/1/2002 1,800,000 1,831,032
Massachusetts Municipal Wholesale Electric Co.,
Power Supply Systems Revenue:
5.875%, 7/1/2003 500,000 513,870
6.75%, 7/1/2008 1,000,000 1,045,060
Massachusetts Port Authority, Revenue:
5.10%, 7/1/2010 1,175,000 1,190,228
(United Airlines, Inc. Project) 5.75%, 10/1/2029 1,000,000 994,310
Massachusetts Water Pollution Abatement Trust,
Water Pollution Abatement Revenue
(Pool Loan Program):
5.25%, 2/1/2008 1,000,000 1,037,200
5.70%, 2/1/2012 2,260,000 2,340,773
New Bedford 5.60%, 3/1/2003 600,000 610,482
New England Education Loan Marketing Corp.,
Student Loan Revenue:
6%, 3/1/2002 500,000 507,820
6.90%, 11/1/2009 1,000,000 1,103,460
Pioneer Valley Transit Authority, COP
5.70%, 2/1/2003 (Insured; CGIC) 1,240,000 1,272,463
Plymouth County, COP (Correctional Facility Project)
5%, 4/1/2015 (Insured; AMBAC) 1,500,000 1,436,550
Route 3 North Transportation Improvement Association, LR
5.75%, 6/1/2015 (Insured; MBIA) 1,500,000 1,552,320
Worcester 6%, 8/1/2003 545,000 563,072
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U. S. RELATED--17.1%
Guam Airport Authority, Revenue 6%, 10/1/2000 1,100,000 1,100,088
Guam Government, LOR (Infrastructure Improvement)
5%, 11/1/2012 (Insured; AMBAC) 1,000,000 1,008,320
Puerto Rico Commonwealth:
5.375%, 7/1/2005 1,000,000 1,036,800
(Public Improvement):
5.50%, 7/1/2011 1,000,000 1,051,750
5.25%, 7/1/2014 (Insued; FSA) 1,000,000 1,025,070
Puerto Rico Electric Power Authority, Power Revenue
5.50%, 7/1/2008 1,000,000 1,053,070
Puerto Rico Industrial Tourist Educational,
Medical and Environmental Control Facilities
Financing Authority, Industrial Revenue
(Guaynabo Warehouse) 4.35%, 7/1/2006 1,000,000 936,800
Virgin Islands Public Finance Authority, Revenue:
6%, 10/1/2004 965,000 979,195
5.625%, 10/1/2010 1,000,000 1,018,370
Virgin Islands Water and Power Authority, Electric Systems:
5.125%, 7/1/2003 1,000,000 1,013,240
5.125%, 7/1/2011 1,000,000 995,020
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $60,654,843) 61,625,072
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--1.5%
------------------------------------------------------------------------------------------------------------------------------------
Massachusetts Health and Educational Facilities Authority,
VRDN, Revenue:
4.20% (Insured; MBIA) 600,000 (d) 600,000
5.55% (Insured; MBIA) 400,000 (d) 400,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $1,000,000) 1,000,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $61,654,843) 95.4% 62,625,072
CASH AND RECEIVABLES (NET) 4.6% 2,999,239
NET ASSETS 100.0% 65,624,311
</TABLE>
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
LR Lease Revenue
MBIA Municipal Bond
Investors Assurance
Insurance Corporation
RRR Resources Recovery Revenue
VRDN Variable Rate Demand Notes
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 45.0
AA Aa AA 21.6
A A A 9.2
BBB Baa BBB 21.1
F1+,F-1 MIG1, VMG1 & P1 SP1, A1 1.5
Not Rated (e) Not Rated (e) Not Rated (e) 1.6
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) INVERSE FLOATER SECURITY- THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES 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 SEPTEMBER 30, 2000, THIS SECURITY
AMOUNTED TO $1,038,780 OR 1.6% OF NET ASSETS.
(D) SECURITIES PAYABLE ON DEMAND. THE INTEREST RATE, WHICH IS SUBJECT TO
CHANGE, IS BASED UPON BANK PRIME RATES OR AN INDEX OF MARKET INTEREST RATES.
(E) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 61,654,843 62,625,072
Receivable for investment securities sold 2,124,400
Interest receivable 931,167
Prepaid expenses 3,456
65,684,095
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 32,322
Cash overdraft due to Custodian 4,272
Payable for shares of Beneficial Interest redeemed 289
Accrued expenses 22,901
59,784
--------------------------------------------------------------------------------
NET ASSETS ($) 65,624,311
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 67,338,197
Accumulated undistributed investment income--net 8,088
Accumulated net realized gain (loss) on investments (2,692,203)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 970,229
--------------------------------------------------------------------------------
NET ASSETS ($) 65,624,311
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
4,945,281
NET ASSET VALUE, offering and redemption price per share ($)--Note 3(d) 13.27
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended September 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 1,732,873
EXPENSES:
Management fee--Note 3(a) 194,584
Shareholder servicing costs--Note 3(b) 52,498
Professional fees 16,026
Trustees' fees and expenses--Note 3(c) 8,386
Prospectus and shareholders' reports 5,005
Registration fees 3,775
Custodian fees 3,378
Loan commitment fees--Note 2 109
Miscellaneous 5,730
TOTAL EXPENSES 289,491
Less--reduction in management fee due to
undertaking--Note 3(a) (29,937)
NET EXPENSES 259,554
INVESTMENT INCOME--NET 1,473,319
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (16,462)
Net unrealized appreciation (depreciation) on investments 704,543
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 688,081
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,161,400
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
September 30, 2000 Year Ended
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,473,319 2,933,635
Net realized gain (loss) on investments (16,462) (103,781)
Net unrealized appreciation (depreciation)
on investments 704,543 (2,886,397)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,161,400 (56,543)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (1,465,231) (2,933,635)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 6,095,286 17,678,602
Dividends reinvested 962,321 2,051,261
Cost of shares redeemed (7,504,504) (22,321,744)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (446,897) (2,591,881)
TOTAL INCREASE (DECREASE) IN NET ASSETS 249,272 (5,582,059)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 65,375,039 70,957,098
END OF PERIOD 65,624,311 65,375,039
Undistributed investment income--net 8,088 --
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 462,000 1,333,950
Shares issued for dividends reinvested 73,205 155,113
Shares redeemed (574,319) (1,678,806)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (39,114) (189,743)
SEE NOTES TO FINANCIAL STATEMENTS.
<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.
Six Months Ended
September 30, 2000 Year Ended March 31,
-----------------------------------------------------------------
(Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
<S> <C> <C> <C> <C> <C> <C>
beginning of period 13.12 13.71 13.59 13.07 13.15 12.81
Investment Operations:
Investment income--net .30 .59 .58 .59 .58 .59
Net realized and unrealized
gain (loss) on investments .15 (.59) .12 .52 (.08) .34
Total from Investment Operations .45 -- .70 1.11 .50 .93
Distributions:
Dividends from
investment income--net (.30) (.59) (.58) (.59) (.58) (.59)
Net asset value, end of period 13.27 13.12 13.71 13.59 13.07 13.15
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 6.90(a) .03 5.25 8.63 3.98 7.22
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .80(a) .80 .80 .80 .80 .75
Ratio of net investment income
to average net assets 4.54(a) 4.42 4.25 4.39 4.42 4.45
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation .09(a) .11 .09 .06 .10 .14
Portfolio Turnover Rate 2.46(b) 15.05 13.04 29.22 23.45 31.81
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 65,624 65,375 70,957 65,686 61,931 68,129
(A) ANNUALIZED.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENT (Unaudited)
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.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, 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 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, if any, 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
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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
September 30, 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, 2000 through September 30, 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 $29,937 during the period ended September 30, 2000.
(b) Under the Shareholder Services Plan, the fund reimburses the Distributor 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, 2000, the fund was charged $33,001
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, 2000, the fund was charged $11,210 pursuant to the transfer
agency agreement.
(c) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective August 2, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The chairman of the Board receives an additional 25% of such
compensation. Prior to August 2, 2000, each Board member who was not an
" affiliated person" as defined in the Act received from the fund an annual fee
of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board Members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
(d) A 1% redemption fee is charged and retained by the fund on shares redeemed
within thirty days following the date of issuance, including redemptions made
through the use of the fund's exchange privilege. Prior to June 1, 2000, this
fee was chargeable within fifteen days following the date of issuance. During
the period ended September 30, 2000, redemption fees retained by the fund
amounted to $467.
The 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, 2000, amounted to
$1,558,050 and $5,394,810, respectively.
At September 30, 2000, accumulated net unrealized appreciation on investments
was $970,229, consisting of $1,342,745 gross unrealized appreciation and
$372,516 gross unrealized depreciation.
At September 30, 2000, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTES
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 268SA009
