DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus
Pennsylvania Intermediate Municipal Bond Fund. For its six-month reporting
period ended May 31, 1997, your Fund produced a total return, including bond
price changes and interest income, of 2.00%.* The Fund's tax-free annualized
distribution rate per share for the reporting period was 4.57%.** (Some
income may be subject to the Federal Alternative Minimum Tax for certain
shareholders).
Economic Review
Plentiful jobs and low inflation spurred consumer confidence to its
highest level in 27 years by the end of the reporting period, May 31, 1997.
Economic growth surged 5.6% in the first quarter of this year, sharply higher
than the 3.8% rate in the last quarter of 1996. With unemployment at its
lowest level in 23 years, there was fear that without some preemptive
tightening in monetary policy, inflationary pressures would resume. As a
precaution, in March 1997, the Federal Open Market Committee, the policy-making
arm of the Federal Reserve Board (the "Fed"), raised the Federal Funds rate
one quarter of a percentage point to 5.50%. It was the first hike in
short-term rates in over two years. (The Federal Funds rate is the rate of
interest banks charge each other for overnight loans.) Fed Chairman Greenspan
likened the increase to "the small immediate discomfort of a vaccination
against the possibility of getting a serious disease." Subsequent to the
March rate increase, signs of inventory accumulation and some moderation in
retail sales may have helped stay the Fed from implementing additional
increases in short-term interest rates.
The great difference between the present economic recovery and previous
ones is the absence of inflation. The economy is now in its seventh year of
expansion, an expansion devoid of any appreciable resurgence in inflation.
The Producer Price Index, a measure of prices paid by manufacturers and an
indicator of so-called pipeline inflation, declined over the first four
months of this year and has risen less than 1% over the previous twelve
months. The rise in inflation on the consumer level has been similarly
subdued. The Consumer Price Index increased a modest 2.5% over the
twelve-month period ending in April.
On another front, the tight labor market has spawned fears that rising
wages would provide an inflationary stimulus to the economy. So far, this has
not occurred. The Employment Cost Index, a gauge of wage and benefit
increases, has remained below 3%. The bipartisan budget agreement recently
reached between the Clinton Administration and the Republican Congressional
leadership has also eased inflationary fears.
The economic confidence of consumers is readily understandable. The
exceptionally low unemployment rate has combined with a strong economy that
has expanded with unusual vigor. But, despite huge business investment in
technology to improve productivity, it would be folly to assume that the
economy's capacity for noninflationary growth is unlimited. Consumers
enjoying both job stability and rising personal incomes could increase their
spending to levels that would strain production and bring on inflation; or
the Fed could again tighten credit, perhaps in another precautionary move.
Market Environment
The issuance of Pennsylvania securities having intermediate maturities has
been relatively moderate for the last six months, and will most likely remain
so over the next few months. Demand, on the other hand, has been rather
strong. Hence, the Fund has been able to gradually sell overvalued bonds with
positive results. Even though new issue supply was fairly moderate, the Fund
has been able to purchase undervalued Pennsylvania issues in the secondary
market from national bond funds, which often have a tendency to sell state
specific paper such as Pennsylvania issues when they need to raise cash.
These types of opportunities usually occur when the market is fairly weak.
The Fund intends to continue to purchase both primary and secondary issues
that represent value when they become available.
Municipal prices have gone from being relatively inexpensive when compared
to U.S. Treasury bonds, to currently being fairly valued because demand for
them accelerated when the markets declined. This trend was especially true of
the intermediate maturities, where demand has been exceptionally strong.
During normal market conditions, as interest rates drop, municipal supply
will increase and demand subside, so municipals may again begin to lag the
Treasury market.
Portfolio Overview
As interest rates have increased, the Fund has been able to purchase bonds
selling below par, which have short calls but high yields. In the current
market environment, these types of issues represent excellent value because
they are out of favor with many institutional fund managers, and can be
purchased at a substantial discount when compared to the rest of the
municipal market. The Fund has been raising cash by selling slightly
discounted bonds to the retail market, which offers a high price for this
type of bond, and by offering bonds selling above par to other institutional
funds that currently favor this type of issue.
Since interest rates rose through late April, the Fund has become more
aggressive and is slowly increasing its maturity and duration. Since the Fund
was positioned defensively going into a rising interest rate environment, it
took advantage of current market conditions while reducing the risk that is
associated with longer maturing bonds. This risk was reduced because the Fund
was selling moderate discounts and longer maturities when interest rates were
substantially lower. By purchasing discounts, the Fund was well positioned to
capitalize on an improving market that occurred in late April and continued
through May. If the market continues to improve, the Fund would consider
becoming more defensive by slowly decreasing its exposure to longer maturing
bonds.
Lower rated issues remain very expensive when compared to higher rated
securities. The Fund continues to take advantage of this spread relationship
by favoring higher rated securities which are traditionally more liquid. This
strategy will give the Fund more flexibility to react to a weak market which
can experience liquidity constraints.
As mentioned, the Fund had a six-month total return on May 31, 1997 of
2.00%, which compares favorably to the Lipper Pennsylvania Intermediate
Municipal Bond Funds category average of 1.39%.*** Because the Fund
positioned itself defensively in late 1996 when interest rates were low, it
was able to take advantage of the declining market that occurred in 1997 by
purchasing issues which were undervalued.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
June 17, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** Distribution rate per share is based upon dividends per share paid
from net investment income during the period (annualized), divided by the net
asset value per share at the end of the period.
*** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Yield, share price and
investment return fluctuate, and an investor may receive more or less than
original cost upon redemption. Past performance is no guarantee of future
results.
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
MAY 31, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments-100.0%
Amount Value
------- -------
Pennsylvania-89.6%
Allegheny County Hospital Development Authority, Revenue, Refunding
(Magee Womens Hospital):
<S> <C> <C>
5.875%, 10/1/2002 (Insured; FGIC)....................................... $ 500,000 $ 526,445
6%, 10/1/2005 (Insured; FGIC)........................................... 1,525,000 1,621,426
Berks County, Refunding 5.60%, 11/15/2007 (Insured; FGIC)................... 545,000 559,786
Cambria County, Refunding 5.875%, 8/15/2008 (Insured; FGIC)................. 850,000 899,453
Cambria Township Water Authority, Industrial User Revenue
6%, 12/1/2002 (LOC; Banque Paribas) (a)................................... 1,250,000 1,295,187
Clinton County Industrial Development Authority, PCR, Refunding
(International Paper Co. Project) 5.375%, 5/1/2004........................ 500,000 518,675
Dauphin County General Authority, Revenue:
6.25%, 6/1/2001........................................................... 650,000 682,025
6%, 12/1/2006 (LOC; The Sakura Bank Ltd., Prerefunded 6/1/2001) (a,b)..... 785,000 828,599
5%, 6/1/2026 (Insured; AMBAC, Prerefunded 12/1/1998) (b).................. 500,000 507,950
Delaware County Industrial Development Authority, Revenue, Refunding
(Martins Run Project) 5.60%, 12/15/2002................................... 750,000 750,660
Hampton Township School District
6.75%, 11/15/2021 (Insured; AMBAC, Prerefunded 11/15/2004) (b)............ 1,000,000 1,122,680
Jefferson County Hospital Authority, HR, Refunding
(Brookville Hospital) 7%, 8/1/2002 (Insured; FHA)......................... 1,000,000 1,055,490
Lebanon County Good Samaritan Hospital Authority, Revenue, Refunding
(Good Samaritan Hospital Project):
5.85%, 11/15/2007....................................................... 845,000 850,822
6%, 11/15/2009.......................................................... 1,500,000 1,509,240
McKeesport Area School District
Zero Coupon, 10/1/2009 (Insured; FGIC).................................... 1,070,000 553,853
Montgomery County Higher Education and Health Authority, HR
(Montgomery Hospital Medical Center) 6.60%, 7/1/2010...................... 1,000,000 1,033,930
Northeastern Hospital and Education Authority, College Revenue
(Luzerne County Community College) 6.20%, 8/15/2005 (Insured; AMBAC)...... 500,000 542,105
Pennsylvania, COP, Refunding 5.40%, 7/1/2008 (Insured; AMBAC)............... 1,000,000 1,017,310
Pennsylvania Convention Center Authority, Revenue, Refunding 6.25%, 9/1/2004 750,000 782,737
Pennsylvania Economic Development Financing Authority, RRR
(Northampton Generating Project) 6.40%, 1/1/2009.......................... 500,000 499,355
Pennsylvania Finance Authority, Revenue, Refunding
(Municipal Capital Improvements Program) 6.60%, 11/1/2009................. 2,500,000 2,691,350
Pennsylvania Higher Educational Facilities Authority:
College and University Revenue (Delaware Valley College of Science and
Agriculture)
6.50%, 4/1/2008......................................................... 790,000 820,265
Health Services Revenue, Refunding (Allegheny Delaware Valley)
5.60%, 11/15/2010 (Insured; MBIA)....................................... 1,250,000 1,285,113
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
------- -------
Pennsylvania (continued)
Pennsylvania Housing Finance Agency, Single Family Mortgage:
5.95%, 10/1/2003.......................................................... $ 365,000 $ 376,034
6.20%, 4/1/2005........................................................... 410,000 419,860
6.20%, 10/1/2005.......................................................... 420,000 430,605
5.75%, 4/1/2006........................................................... 400,000 405,356
6.10%, 4/1/2006........................................................... 455,000 465,110
5.75%, 10/1/2006.......................................................... 415,000 420,798
6.10%, 10/1/2006.......................................................... 465,000 475,779
Pennsylvania Industrial Development Authority, EDR
7%, 1/1/2006 (Insured; AMBAC)............................................. 1,795,000 2,051,775
Pennsylvania Infrastructure Investment Authority, Revenue
(Pennvest Loan Pool Program) 6%, 9/1/2005 (Insured; MBIA)................. 2,155,000 2,317,918
Philadelphia:
5.70%, 11/15/2006 (Insured; FGIC)......................................... 1,000,000 1,054,150
Airport Revenue (Philadelphia Airport System) 5.75%, 6/15/2008 (Insured; AMBAC) 1,000,000 1,042,570
Gas Works Revenue 4.875%, 8/1/2010 (Insured; AMBAC)....................... 1,325,000 1,259,346
Water and Wastewater Revenue, Refunding 5.50%, 6/15/2003 (Insured; FGIC).. 1,000,000 1,035,520
Philadelphia Hospitals and Higher Education Facilities Authority, Revenue:
(Community College) 5.90%, 5/1/2007 (Insured; MBIA)....................... 445,000 474,339
(Northwestern Corp.) 7%, 6/1/2012......................................... 1,530,000 1,598,330
Refunding (Temple University Hospital) 6.50%, 11/15/2008.................. 1,000,000 1,071,390
Philadelphia Municipal Authority, LR, Refunding:
6%, 7/15/2003............................................................. 500,000 508,655
5.40%, 11/15/2006 (Insured; FGIC)......................................... 500,000 514,515
Philadelphia School District:
5.35%, 7/1/2003 (Insured; MBIA)........................................... 1,350,000 1,385,141
5.75%, 7/1/2007 (Insured; MBIA)........................................... 600,000 627,522
Scranton-Lackawanna Health and Welfare Authority, Revenue, Refunding
(University of Scranton Project) 5.80%, 3/1/2000.......................... 500,000 511,285
Southeastern Transportation Authority, Special Revenue:
6.50%, 3/1/2004 (Insured; FGIC)........................................... 1,500,000 1,640,490
5.875%, 3/1/2009 (Insured; FGIC).......................................... 750,000 784,628
Upper Allegheny Joint Sanitary Authority, Sewer Revenue
5.70%, 9/1/2005 (Insured; FGIC)........................................... 1,095,000 1,139,413
Westmoreland County:
Zero Coupon, 12/1/2006 (Insured; FGIC).................................... 2,000,000 1,232,480
Zero Coupon, 12/1/2008 (Insured; FGIC).................................... 1,790,000 979,595
Wilkinsburg Joint Water Authority, Water Revenue
6.15%, 8/15/2006 (Insured; AMBAC, Prerefunded 8/15/2002) (b).............. 600,000 642,156
York County Hospital Authority, Revenue, Refunding
(Lutheran Social Services Health Center) 6.25%, 4/1/2011.................. 1,000,000 1,014,120
Yough School District, Refunding
Zero Coupon, 10/1/2007 (Insured; FGIC).................................... 1,000,000 587,650
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
------- -------
U.S. Related-10.4%
Puerto Rico Commonwealth Highway and Transportation Authority, Highway Revenue:
5.40%, 7/1/2006........................................................... $ 1,000,000 $ 998,540
5.40%, 7/1/2006 (Insured; FSA)............................................ 4,000,000 4,121,120
Puerto Rico Electric Power Authority, Power Revenue:
5.90%, 7/1/2002........................................................... 250,000 261,695
6%, 7/1/2006.............................................................. 225,000 238,561
-------
TOTAL INVESTMENTS (cost $52,658,973)........................................ $54,040,902
===========
</TABLE>
Summary of Abbreviations
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
COP Certificate of Participation LR Lease Revenue
EDR Economic Development Revenue MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FHA Federal Housing Administration PCR Pollution Control Revenue
FSA Financial Security Assurance RRR Resources Recovery Revenue
HR Hospital Revenue
</TABLE>
Summary of Combined Ratings
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- -------- -------- ------------------ -------------------
AAA Aaa AAA 60.3%
AA Aa AA 5.5
A A A 13.5
BBB Baa BBB 16.0
F1+ & F1 MIG1, VMIG1 & P1 SP1 & A1 2.4
Not Rated (d) Not Rated (d) Not Rated (d) 2.3
----
100.0%
Notes to Statement of Investments:
(a) Secured by letters of credit.
(b) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest date.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) 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.
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1997 (UNUADITED)
Cost Value
------- ------
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $52,658,973 $54,040,902
Cash....................................... 712,432
Interest receivable........................ 808,802
Receivable for shares of Beneficial Interest subscribed 93,450
Prepaid expenses........................... 15,416
-------
55,671,002
LIABILITIES: Due to The Dreyfus Corporation and affiliates 20,925
Payable for shares of Beneficial Interest redeemed 132,445
Accrued expenses........................... 32,575
-------
185,945
-------
NET ASSETS.................................................................. $55,485,057
===========
REPRESENTED BY: Paid-in capital............................ $54,153,275
Accumulated undistributed investment income-net 7,001
Accumulated net realized gain (loss) on investments (57,148)
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4....................... 1,381,929
-------
NET ASSETS.................................................................. $55,485,057
========
SHARES OUTSTANDING
(UNLIMITED NUMBER OF $.001 PAR VALUE SHARES OF BENEFICIAL INTEREST
AUTHORIZED) ........................................... 4,223,393
NET ASSET VALUE, offering and redemption price per share-Note 3(d).......... $13.14
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED) INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................ $1,417,816
EXPENSES: Management fee-Note 3(a)................... $ 157,808
Shareholder servicing costs-Note 3(b)...... 40,302
Registration fees.......................... 12,643
Auditing fees.............................. 10,993
Trustees' fees and expenses-Note 3(c)...... 10,613
Legal fees................................. 7,395
Custodian fees............................. 2,930
Prospectus and shareholders' reports....... 2,903
Loan commitment fees-Note 2................ 294
Miscellaneous.............................. 8,676
-----
Total Expenses....................... 254,557
Less-reduction in management fee due to
undertaking-Note 3(a).................. (43,852)
-----
Net Expenses......................... 210,705
-------
INVESTMENT INCOME-NET....................................................... 1,207,111
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $ 88,670
Net unrealized appreciation (depreciation) on investments (238,646)
-----
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (149,976)
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,057,135
======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
May 31, 1997 Year Ended
(Unaudited) November 30, 1996
--------- ----------
OPERATIONS:
<S> <C> <C>
Investment income-net............................................ $ 1,207,111 $ 2,013,427
Net realized gain (loss) on investments.......................... 88,670 (7,047)
Net unrealized appreciation (depreciation) on investments........ (238,646) 279,415
------- -------
Net Increase (Decrease) in Net Assets Resulting from Operations 1,057,135 2,285,795
------- -------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net............................................ (1,206,290) (2,007,247)
------- -------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold.................................... 10,395,491 20,981,606
Dividends reinvested............................................. 888,838 1,444,865
Cost of shares redeemed.......................................... (6,022,205) (12,412,336)
------- -------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 5,262,124 10,014,135
------- -------
Total Increase (Decrease) in Net Assets.................... 5,112,969 10,292,683
NET ASSETS:
Beginning of Period.............................................. 50,372,088 40,079,405
------- -------
End of Period.................................................... $ 55,485,057 $ 50,372,088
======= =======
UNDISTRIBUTED INVESTMENT INCOME-NET.................................. $ 7,001 $ 6,180
------- -------
Shares Shares
------- -------
CAPITAL SHARE TRANSACTIONS:
Shares sold...................................................... 795,145 1,611,905
Shares issued for dividends reinvested........................... 68,001 111,215
Shares redeemed.................................................. (461,058) (955,587)
------- -------
Net Increase (Decrease) in Shares Outstanding.................. 402,088 767,533
======= =======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Six Months Ended
May 31, 1997
Year Ended November 30,
------------------------------
PER SHARE DATA: (Unaudited) 1996 1995 1994(1)
--------- ---- ---- ----
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $13.18 $13.12 $11.84 $12.50
---- ---- ---- ----
Investment Operations:
Investment income-net............................. .30 .59 .63 .61
Net realized and unrealized gain (loss)
on investments.................................. (.04) .06 1.28 (.66)
---- ---- ---- ----
Total from Investment Operations.................. .26 .65 1.91 (.05)
---- ---- ---- ----
Distributions:
Dividends from investment income-net.............. (.30) (.59) (.63) (.61)
---- ---- ---- ----
Net asset value, end of period.................... $13.14 $13.18 $13.12 $11.84
==== ==== ==== ====
TOTAL INVESTMENT RETURN............................... 4.01%(2) 5.10% 16.47% (.60%)(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........... .80%(2) .80% .48% -
Ratio of net investment income
to average net assets........................... 4.59%(2) 4.52% 4.93% 5.19%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager.............. .17%(2) .31% .62% 1.39%(2)
Portfolio Turnover Rate........................... 22.34%(3) 53.83% 5.07% 20.13%(3)
Net Assets, end of period (000's Omitted)......... $55,485 $50,372 $40,079 $22,599
(1) From December 16, 1993 (commencement of operations) to November 30, 1994.
(2) Annualized.
(3) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Pennsylvania Intermediate Municipal Bond Fund (the "Fund") is
registered under the Investment Company Act of 1940 ("Act") as a
non-diversified open-end management investment company. The Fund's investment
objective is to provide investors with as high a level of current income
exempt from Federal and Pennsylvania income taxes as is consistent with the
preservation of capital. The Dreyfus Corporation ("Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. Premier Mutual Fund Services, Inc. is the distributor of the Fund's
shares, which are sold to the public without a sales charge.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the 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.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $152,500
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to November 30, 1996. If not
applied, $1,400 of the carryover expires in fiscal 2002, $137,400 expires in
fiscal 2003 and $13,700 expires in fiscal 2004.
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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. For the period ended May
31, 1997, the Fund did not borrow under the Facility.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("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 Agreement
provides that if in any full fiscal year the aggregate expenses of the Fund,
exclusive of taxes, brokerage, interest on borrowings, commitment fees and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from payments to be made to
the Manager, or the Manager will bear the amounts of such excess to the
extent required by state law. The Manager has undertaken from December 1,
1996 through November 30, 1997 to reduce the management fee paid by the Fund,
to the extent that the Fund's aggregate annual expenses (exclusive of certain
expenses as described above) 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 $43,852 during the period ended May
31, 1997.
The undertaking may be extended, modified or terminated by the Manager,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
(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 inquires regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the period ended May 31, 1997, $18,774 was charged to the Fund
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. Such
compensation amounted to $16,328 during the period ended May 31, 1997.
(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 on certain redemptions of Fund shares
(including redemptions through use of the Fund Exchanges service) where the
shares being redeemed were issued subsequent to a specified effective date
and the redemption or exchange occurs less than fifteen days following the
date of issuance.
NOTE 4--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended May 31, 1997
amounted to $16,356,908 and $11,430,172, respectively.
At May 31, 1997, accumulated net unrealized appreciation on investments
was $1,381,929, consisting of $1,397,748 gross unrealized appreciation and
$15,819 gross unrealized depreciation.
At May 31, 1997, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
Registration Mark
[Dreyfus lion "d" logo]
DREYFUS PENNSYLVANIA 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. 105SA975
Registration Mark
[Dreyfus logo]
Pennsylvania
Intermediate
Municipal
Bond Fund
Semi-Annual Report
May 31, 1997
