<PAGE>
Dreyfus
Pennsylvania
Intermediate
Municipal
Bond Fund
Annual Report
November 30, 1996
<PAGE>
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
- --------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
For its annual reporting period ended November 30, 1996, the Dreyfus
Pennsylvania Intermediate Municipal Bond Fund produced a total return of 5.10%.*
Income dividends exempt from Federal and Commonwealth of Pennsylvania personal
income taxes of approximately $.588 per share** were paid, which is equivalent
to an annualized tax-free distribution rate per share of 4.46%.***
THE ECONOMY
For much of the year, investors were fearful that inflation would accelerate
should tightening labor markets lead to pressure to increase wages and,
ultimately, higher prices. This was of particular concern earlier in the year
because of the robust rate of new job growth at that time. More specifically, it
was expected that signs of any potential upsurge in inflation would cause the
Federal Reserve Board ("the Fed") to tighten monetary policy. However, during
the summer, the economy's growth rate slowed by more than half of its 4.7%
growth rate in the second quarter. The pace of job creation also slowed,
reducing the likelihood that the tightening employment market would lead to
inflation-inducing wage increases. About 150,000 jobs per month over the past
three months have been added to the employment rolls compared to an average rate
of over 250,000 during the spring and early summer months. The unemployment rate
has declined all year (the rate is now at 5.2%, near a seven-year low), yet wage
increases have remained under control. The Employment Cost Index, a broad
measure of wage and benefit growth, has risen a modest 2.8% over the past year,
about the same as the year before when the Index increased 2.7%. Inflation has
remained subdued throughout the reporting period. The Consumer Price Index
continues to show an inflation level at an annual rate of 3%, while the Producer
Price Index shows scant evidence of price pressures in the production pipeline.
The Fed has held short-term interest rates steady since January, when it reduced
its Federal Funds target rate to 5.25% from 5.5%. (The Federal Funds rate is the
rate that banks charge each other for overnight loans.)
With both low unemployment and low inflation, measures of consumer confidence
remain high. The Index of Leading Economic Indicators, an index compiled by the
Conference Board (a private economic research group) has reached record high
levels every month since June. Retail sales show signs of moderate expansion
after having slowed over the summer when consumers paid off more credit card
debt than they borrowed. On the production side of the economy, output from the
nation's factories has slowed somewhat from its pace earlier in the year. With a
capacity utilization rate of under 83%, there appears to be little indication of
any production bottlenecks that could lead to shortages and higher prices.
MARKET ENVIRONMENT
Over the last few months, the supply of new issue Pennsylvania paper has been
rather tight. This has created a lack of secondary supply from which the Fund
has traditionally purchased undervalued bonds. Even though the supply has been
tight, the Fund has still been able to buy some undervalued securities while
selling bonds which had achieved our price goals. The Pennsylvania supply will
probably not improve until early 1997, when we expect larger Pennsylvania issues
to be sold.
Municipals remain attractive when compared to the taxable fixed income
markets because supply has remained tight in the intermediate maturity range.
Even though the fixed income markets have had a modest decline in December,
municipals in the intermediate maturity range should continue to maintain their
value because demand has outstripped supply. Of course, as supply and demand
conditions change, so may the value of municipals.
<PAGE>
THE PORTFOLIO
Municipal interest rates peaked in June and by October rates had declined to
a point where the Fund reversed strategy and started to slowly sell slight
discounts with short calls and low yields, while purchasing modest premiums that
have higher yields, produce more income and are more defensive. In December,
interest rates moved higher and the Fund, now in a good position to capitalize
on a weak market, purchased bonds which were significantly undervalued.
As interest rates declined from June through November, lower rated issues
became very expensive and the risk versus reward relationship no longer favored
this type of security. The Fund reversed strategy and took advantage of this
market condition by selling low investment grade rated issues (BBB), which are
generally less liquid, and purchasing higher rated securities which are usually
more liquid. Since spreads traditionally widen when markets decline, this
strategy will give the Fund more flexibility to react to a declining market. The
Fund has not sacrificed income because it has purchased insured bonds at
equivalent yields. These credits usually require a lot of research and are
difficult to find, but they produce a very high level of income without the
credit risk which is usually associated with higher yielding bonds.
The Fund had a one-year average annual total return for the period ended
November 30, 1996 of 5.10%, which compares favorably to the Lipper Pennsylvania
Intermediate Municipal Bond Funds category average of 4.62% for the same period.
For the period from inception on December 16, 1993 through November 30, 1996,
the Fund's average annual total return was 6.86%. Because the Fund positioned
itself defensively in early 1996 when interest rates were low, it was able to
take advantage of the declining market that occurred from February through June
by purchasing issues which were undervalued and would significantly improve if
interest rates declined. As interest rates stabilized and then declined, the
Fund benefited from this strategy.
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 greatly appreciate your continued confidence in the Fund and in The
Dreyfus Corporation.
Very truly yours,
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
December 20, 1996
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid.
**Some income may be subject to state and local taxes for non-Pennsylvania
residents and, for some investors, to the Federal Alternative Minimum Tax
(AMT).
***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.
+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.
<PAGE>
Insert Graph
<PAGE>
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
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Statement of Investments November 30, 1996
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments--100.0% Amount Value
- ---------------------------------------------------------------------------- ------------ -----------
<S> <C> <C>
Pennsylvania--94.9%
Allegheny County Hospital Development Authority, Revenue, Refunding
(Magee Womens Hospital):
5.875%, 10/1/2002 (Insured; FGIC)....................................... $ 500,000 $ 535,505
6%, 10/1/2005 (Insured; FGIC)........................................... 1,525,000 1,645,094
Berks County, Refunding 5.60%, 11/15/2007 (Insured; FGIC).................... 545,000 565,214
Bucks County, 6.05%, 3/1/2002................................................ 500,000 539,485
Cambria County, Refunding 5.875%, 8/15/2008 (Insured; FGIC).................. 850,000 910,307
Cambria Township Water Authority, Industrial User Revenue
6%, 12/1/2002 (LOC; Banque Paribas) (a)................................... 1,250,000 1,294,413
Clinton County Industrial Development Authority, PCR, Refunding
(International Paper Co. Project) 5.375%, 5/1/2004........................ 500,000 518,700
Dauphin County General Authority, Revenue:
6.25%, 6/1/2001........................................................... 650,000 694,011
6%, 12/1/2006 (LOC; The Sakura Bank Ltd., Prerefunded 6/1/2001) (a,b)..... 785,000 830,240
5%, 6/1/2026 (Insured; AMBAC, Prerefunded 12/1/1998) (b).................. 500,000 509,350
Delaware County Industrial Development Authority, Revenue, Refunding
(Martins Run Project) 5.60%, 12/15/2002................................... 750,000 735,990
Geisinger Authority, Health System Revenue 5.375%, 7/1/2000.................. 850,000 874,641
Hampton Township School District 6.75%, 11/15/2021
(Insured; AMBAC, Prerefunded 11/15/2004) (b).............................. 1,000,000 1,141,590
Jefferson County Hospital Authority, HR, Refunding
(Brookville Hospital) 7%, 8/1/2002 (Insured; FHA)......................... 1,000,000 1,059,360
Lebanon County Good Samaritan Hospital Authority, Revenue, Refunding
(Good Samaritan Hospital Project):
5.85%, 11/15/2007....................................................... 845,000 850,222
6%, 11/15/2009.......................................................... 1,500,000 1,506,390
Montgomery County Higher Education and Health Authority, HR
(Montgomery Hospital Medical Center) 6.60%, 7/1/2010...................... 1,000,000 1,028,480
Northeastern Hospital and Education Authority, College Revenue
(Luzerne County Community College) 6.20%, 8/15/2005 (Insured; AMBAC)...... 500,000 551,890
Pennsylvania Convention Center Authority, Revenue, Refunding 6.25%, 9/1/2004. 750,000 794,265
Pennsylvania Economic Development Financing Authority, RRR
(Northampton Generating Project) 6.40%, 1/1/2009.......................... 500,000 498,840
Pennsylvania Finance Authority, Revenue, Refunding
(Municipal Capital Improvements Program) 6.60%, 11/1/2009................. 500,000 540,105
Pennsylvania Higher Education Assistance Agency, Student Loan Revenue, Refunding
6.80%, 12/1/2000 (Insured; FGIC).......................................... 5,775,000 6,231,860
Pennsylvania Higher Educational Facilities Authority:
College and University Revenue (Delaware Valley College of Science and Agriculture)
6.50%, 4/1/2008......................................................... 790,000 822,832
Health Services Revenue (University of Pennsylvania) 5.75%, 1/1/2006...... 500,000 530,095
Pennsylvania Housing Finance Agency, Single Family Mortgage:
5.95%, 10/1/2003.......................................................... 365,000 379,366
<PAGE>
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
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Statement of Investments (continued) November 30, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
- ---------------------------------------------------------------------------- ------------ -----------
Pennsylvania (continued)
Pennsylvania Housing Finance Agency, Single Family Mortgage (continued):
6.20%, 4/1/2005........................................................... $ 410,000 $ 422,813
6.20%, 10/1/2005.......................................................... 420,000 433,738
5.75%, 4/1/2006........................................................... 400,000 408,072
6.10%, 4/1/2006........................................................... 455,000 467,863
5.75%, 10/1/2006.......................................................... 415,000 423,715
6.10%, 10/1/2006.......................................................... 465,000 478,676
Pennsylvania Industrial Development Authority, EDR
7%, 1/1/2006 (Insured; AMBAC)............................................. 1,795,000 2,078,000
Pennsylvania Infrastructure Investment Authority, Revenue
(Pennvest Loan Pool Program) 6%, 9/1/2005 (Insured; MBIA)................. 2,155,000 2,361,298
Pennsylvania Turnpike Commission, Turnpike Revenue, Refunding 5.45%, 12/1/2002 500,000 525,315
Philadelphia:
5.70%, 11/15/2006 (Insured; FGIC)......................................... 1,000,000 1,074,270
Airport Revenue (Philadelphia Airport System) 5.75%, 6/15/2008 (Insured; AMBAC) 1,000,000 1,050,810
Water and Wastewater Revenue, Refunding 5.50%, 6/15/2003 (Insured; FGIC).. 1,000,000 1,057,570
Philadelphia Hospital and Higher Education Facilities Authority, Revenue:
(Community College) 5.90%, 5/1/2007 (Insured; MBIA)....................... 445,000 480,159
Refunding (Temple University Hospital) 6.50%, 11/15/2008.................. 1,000,000 1,067,320
Philadelphia Municipal Authority, LR, Refunding:
6%, 7/15/2003............................................................. 500,000 514,810
5.40%, 11/15/2006 (Insured; FGIC)......................................... 500,000 523,300
Philadelphia School District:
5.35%, 7/1/2003 (Insured; MBIA)........................................... 1,350,000 1,412,789
5.75%, 7/1/2007 (Insured; MBIA)........................................... 600,000 634,110
Scranton-Lackawanna Health and Welfare Authority, Revenue, Refunding
(University of Scranton Project) 5.80%, 3/1/2000.......................... 500,000 516,690
Southeastern Transportation Authority, Special Revenue:
6.50%, 3/1/2004 (Insured; FGIC)........................................... 1,500,000 1,675,470
5.875%, 3/1/2009 (Insured; FGIC).......................................... 750,000 795,518
Upper Allegheny Joint Sanitary Authority, Sewer Revenue
5.70%, 9/1/2005 (Insured; FGIC)........................................... 1,095,000 1,156,627
Wilkinsburg Joint Water Authority, Water Revenue
6.15%, 8/15/2006 (Insured; AMBAC, Prerefunded 8/15/2002) (b).............. 600,000 652,500
York County Hospital Authority, Revenue, Refunding
(Lutheran Social Services Health Center) 6.25%, 4/1/2011.................. 1,000,000 1,016,860
U.S. Related--5.1%
Guam Government 5.625%, 9/1/2002............................................. 1,295,000 1,309,828
Puerto Rico Electric Power Authority, Power Revenue:
5.90%, 7/1/2002........................................................... 250,000 265,655
6%, 7/1/2006.............................................................. 225,000 242,318
Refunding 5.25%, 7/1/2007................................................. 700,000 707,903
------------
TOTAL INVESTMENTS (cost $47,721,667)......................................... $49,342,242
============
</TABLE>
<PAGE>
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
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Summary of Abbreviations
- --------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation 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
HR Hospital Revenue RRR Resources Recovery Revenue
LOC Letter of Credit
</TABLE>
Summary of Combined Ratings (Unaudited)
- ------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- ------ -------- ---------------- ------------------
AAA Aaa AAA 57.0%
AA Aa AA 10.0
A A A 9.5
BBB Baa BBB 18.4
F1+ & F1 MIG1, VMIG1 & P1 SP1 & A1 2.6
Not Rated (d) Not Rated (d) Not Rated (d) 2.5
-------
100.0%
=======
<FN>
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
refunding date.
(c) Fitch currently provides creditworthiness information for a limited number
of investments.
(d) Securities which, while not rated by Fitch, Moody's or Standard & Poor's,
have been determined by the Manager to be of comparable
quality to those rated securities in which the Fund may invest.
(e) At November 30, 1996, 32.1% of the Fund's net assets are insured by FGIC.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
- ------------------------------------------------------------------------
Statement of Assets and Liabilities November 30, 1996
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $47,721,667 $49,342,242
Cash............................................. 274,865
Interest receivable.............................. 865,973
Receivable for shares of Beneficial Interest subscribed 33,760
Prepaid expenses................................. 23,222
-----------
50,540,062
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 17,543
Payable for shares of Beneficial Interest redeemed 100,723
Accrued expenses................................. 49,708
-----------
167,974
-----------
NET ASSETS..................................................................... $50,372,088
-----------
-----------
REPRESENTED BY: Paid-in capital.................................. $48,891,151
Accumulated undistributed investment income--net.. 6,180
Accumulated net realized gain (loss) on investments (145,818)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3.......................... 1,620,575
-----------
NET ASSETS..................................................................... $50,372,088
-----------
-----------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized). 3,821,305
NET ASSET VALUE, offering and redemption price per share--Note 2(d)............. $13.18
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
- -----------------------------------------------------------------------------
Statement of Operations Year Ended November 30, 1996
<TABLE>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income................................. $2,368,588
EXPENSES: Management fee--Note 2(a)........................ $266,371
Shareholder servicing costs--Note 2(b)........... 106,307
Audit fees....................................... 36,062
Trustees' fees and expenses--Note 2(c)........... 23,281
Legal fees....................................... 17,448
Registration fees................................ 9,075
Prospectus and shareholders' reports............. 8,357
Custodian fees................................... 5,527
Miscellaneous.................................... 22,452
--------
Total Expenses.............................. 494,880
Less--reduction in management fee due to
undertaking--Note 2(a)......................... (139,719)
--------
Net Expenses................................ 355,161
----------
INVESTMENT INCOME--NET.......................................................... 2,013,427
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments.......... $ (7,047)
Net unrealized appreciation (depreciation) on investments 279,415
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ 272,368
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $2,285,795
==========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, 1996 November 30, 1995
-------------------- ------------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................... $ 2,013,427 $ 1,517,768
Net realized gain (loss) on investments.............................. (7,047) (31,441)
Net unrealized appreciation (depreciation) on investments............ 279,415 2,912,463
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 2,285,795 4,398,790
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net............................................... (2,007,247) (1,517,768)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold........................................ 20,981,606 29,535,143
Dividends reinvested................................................. 1,444,865 1,114,040
Cost of shares redeemed.............................................. (12,412,336) (16,049,793)
------------ ------------
Increase (Decrease) in Net Assets from Beneficial Interest
Transactions 10,014,135 14,599,390
------------ ------------
Total Increase (Decrease) in Net Assets........................ 10,292,683 17,480,412
NET ASSETS:
Beginning of Period.................................................. 40,079,405 22,598,993
------------ ------------
End of Period........................................................ $50,372,088 $40,079,405
------------ ------------
------------ ------------
Undistributed investment income--net................................... $ 6,180 --
------------ ------------
CAPITAL SHARE TRANSACTIONS: Shares Shares
------------ ------------
Shares sold.......................................................... 1,611,905 2,327,964
Shares issued for dividends reinvested............................... 111,215 87,444
Shares redeemed...................................................... (955,587) (1,271,087)
------------ ------------
Net Increase (Decrease) in Shares Outstanding.................... 767,533 1,144,321
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Year Ended November 30,
---------------------------------------
PER SHARE DATA: 1996 1995 1994(1)
------ ------ ------
<S> <C> <C> <C>
Net asset value, beginning of period................................... $13.12 $11.84 $12.50
------ ------ ------
Investment Operations:
Investment income--net................................................. .59 .63 .61
Net realized and unrealized gain (loss) on investments................. .06 1.28 (.66)
------ ------ ------
Total from Investment Operations:...................................... .65 1.91 (.05)
------ ------ ------
Distributions:
Dividends from investment income--net................................... (.59) (.63) (.61)
------ ------ ------
Net asset value, end of period......................................... $13.18 $13.12 $11.84
====== ====== ======
TOTAL INVESTMENT RETURN................................................... 5.10% 16.47% (.60%)(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................................ .80% .48% --
Ratio of net investment income
to average net assets............................................... 4.52% 4.93% 5.19%(2)
Decrease reflected in above expense ratios due to
undertakings by the Manager......................................... .31% .62% 1.39%(2)
Portfolio Turnover Rate................................................ 53.83% 5.07% 20.13%(3)
Net Assets, end of period (000's Omitted).............................. $50,372 $40,079 $22,599
<FN>
- ---------------------
(1) From December 16, 1993 (commencement of operations) to November 30, 1994.
(2) Annualized.
(3) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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. acts as 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: The Fund's investments (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, 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. 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.
<PAGE>
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
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.
NOTE 2--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 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, 1995 through November 30, 1997 to reduce the
management fee paid by or reimburse such excess expenses of 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 $139,719 for the period ended November 30, 1996.
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) Pursuant to the Fund's 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 November 30, 1996, $58,978 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 $30,178 during the period ended November 30, 1996.
(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 Exchange Privilege) where the shares
being redeemed were issued subsequent to a specified effective date and the
redemption or exchange occurs within a fifteen day period following the date of
issuance.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended November 30, 1996
amounted to $32,491,316 and $22,605,397, respectively.
At November 30, 1996, accumulated net unrealized appreciation on
investments was $1,620,575, consisting of $1,650,528 gross
unrealized appreciation and $29,953 gross unrealized depreciation.
At November 30, 1996, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
<PAGE>
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
- -------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Trustees
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
We have audited the accompanying statement of assets and liabilities of
Dreyfus Pennsylvania Intermediate Municipal Bond Fund, including the statement
of investments, as of November 30, 1996, and the related statements of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended and financial highlights for each
of the years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1996 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 Pennsylvania Intermediate Municipal Bond Fund at November 30, 1996, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial highlights
for each of the indicated years, in conformity with generally accepted
accounting principles.
Ernst & Young LLP
New York, New York
January 2, 1997
<PAGE>
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
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Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended
November 30, 1996 as "exempt-interest dividends" (not subject to regular
Federal and, for individuals who are Pennsylvania residents, Pennsylvania
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 1996 calendar
year on Form 1099-DIV which will be mailed by January 31, 1997.
<PAGE>
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. 105AR9611
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
AND THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
LEHMAN
BROTHERS
PERIOD 10-YEAR DREYFUS PENNSYLVANIA
MUNICIPAL INTERMEDIATE
BOND INDEX * MUNICIPAL BOND FUND
12/16/93 10,000 10,000
11/30/94 9,354 9,942
11/30/95 11,090 11,580
11/30/96 11,717 12,170
*Source: Lehman Brothers
