[dreyfus lion "d" logo] (reg.tm)
[dreyfus logo] (reg.tm)
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. 105SA985
Pennsylvania
Intermediate
Municipal Bond Fund
Semi-Annual
Report
May 31, 1998
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
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LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance of Dreyfus Pennsylvania Intermediate
Municipal Bond Fund for the six-month reporting period ended May 31, 1998. Your
Fund produced a total return, including share price changes and dividend income
generated, of 3.16%* and an annualized tax-free distribution rate per share of
4.38%.**
Economic Review
In recent months, economic developments overseas began to assert a more
vigorous influence on the U.S. economy. The first quarter of the 1998 calendar
year saw the U.S. trade deficit rising to a new high. Exports contracted due to
reduced foreign demand for U.S. products, which resulted in a marked rise in
business inventories; that could create a drag on future production as
stockpiles are depleted. At the same time, imports surged. Spurred by a strong
U.S. dollar and robust consumer spending, the increase in cheaper imports helped
dampen domestic inflation since American producers had to restrain their prices
in order to remain competitive. The suppressive effect of the trade deficit on
both domestic production and prices has been fortuitously in concert with the
direction of Federal Reserve Board (the Fed) monetary policy.
The financial difficulties that began in Asia last year have now spread to
Latin America and beyond. That tenuous situation and the continued economic
instability in Russia have contributed to the Fed' s status quo policy in
monetary matters since the Fed is concerned that any increase in short-term
interest rates would further unsettle world markets. The last increase in
short-term rates came in March 1997 when the Federal Open Market Committee (the
policy-making arm of the Fed) raised the target rate for Federal Funds by one
quarter of a percent to 5.5%. (The Federal Funds rate is the rate of interest
that banks charge each other for the use of Federal Funds.)
Consumers, spurred by real wage gains and a healthy job market, continued to
spend freely in the retail sector, giving retailers some of their best months in
a decade. In the early years of the current eight-year economic expansion, the
retail portion of our economy at times had lagged since consumers feared job
insecurity and a resurgence of inflation. The buoyant stock market, low
unemployment rate and absence of inflation, however, encouraged consumers to
spend. The market for so-called "big ticket" items has been strong: the housing
market was solid throughout the reporting period and continues to be, while car
and truck sales are at ten-year highs.
Unemployment (4.3% at the end of the reporting period) is at a 28-year low.
Inflation, at both consumer and producer levels, has been dormant. Workers are
benefiting from having their wages rise faster than inflation. The most recently
reported statistics on hourly wages (through April) revealed that over the
previous 12 months, wages rose 4.4% while the Consumer Price Index increased but
1.4% . The tight labor market and upward pressure on wages, because of their
potential for rekindling inflation, have been major concerns of the Federal
Reserve. The wage rate increase of 4.4% (above), compared to 3.7% and 3.1% in
the two previous years, illustrates the upward creep of wages.
Over the past few years, gains in worker productivity (output per hour of
work) have offset any incipient price pressures from rising wages. Enhanced by
the widespread use of technology, productivity rose 1.7% last year and 1.9% in
1996, compared to an average increase of only 1% for the period 1974-1995. These
gains are a key factor in the continuation of our high-growth, low-inflation
economy. However, productivity gains slowed to 1.1% during the first quarter,
the slowest pace in over a year. So far, our economy has been in a charmed
circle where even international financial crises have proven supportive of our
economic policies. As always, we remain alert for warning signs that the
delicate balance that now prevails in our economy might be disturbed.
Market Environment
The supply of new issues in Pennsylvania has been rather strong over the last
six months. The Fund has been able to purchase some new-issue debt at attractive
levels because of this heavy supply. The Fund has also been able to occasionally
purchase secondary issues at attractive discounts when the municipal bond market
became weak.
Municipals have gone from being fairly valued when compared to U.S. Treasury
securities to being considered very good values in March and April of 1998, when
interest rates rose and municipal supply increased. By the end of May 1998,
municipal supply and rates had declined and municipals were once again fairly
valued when compared to U. S. Treasury securities. New-issue supply normally
declines as we approach summer, while demand should increase because of
reinvestment resulting from heavy interest payments and bond maturities on July
1, 1998. If this scenario recurs, it bodes well for the potential performance of
the municipal market generally.
Portfolio Overview
From late 1997 through early 1998, the Fund maintained a defensive investment
posture and purchased modest premium bonds, which performed well as the market
declined in the spring of 1998. As interest rates rose, the Fund reversed that
strategy and purchased deep discount securities with higher current yields.
These bonds represented excellent value because they were out of favor with many
institutional fund managers, and were purchased at a substantial discount when
compared to the rest of the municipal market. This strategy remains in place,
but would likely be reversed if interest rates were to fall much more and deep
discounts could no longer be purchased at attractive yields.
The Fund is constantly selling bonds priced at modest discounts which have
achieved our price objective and are generating a low return. Certain types of
investors tend to favor this type of bond, so the Fund can frequently take
advantage of this situation. Since the Fund's current strategy is to either buy
deep discounts or premiums at attractive yields, it can afford to sell these
deep discounts when they increase in value because they would have achieved
desired performance goals. Of course, there is no guarantee of how the portfolio
will perform at any time.
Lower-rated issues remain very expensive when compared to higher-rated
securities. The Fund continues to take advantage of this tight 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.
The Fund's six-month total return on May 31, 1998, of 3.16% compares favorably
to the Lipper Pennsylvania Intermediate Municipal Debt Funds Category Average of
3.07% .*** Because the Fund positioned itself defensively in late 1997 and early
1998 when interest rates were low, it was able to take advantage of the
declining market that occurred from March through April of 1998. By selling
premiums and purchasing deep discounts at this time, the Fund is well positioned
if the market continues to improve, as it has in May of 1998.
Included in this report is a series of detailed statements about your Fund's
holdings and financial condition. We hope you find them informative. Please know
that we greatly appreciate 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 18, 1998
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid.
Income may be subject to state and local income taxes for non-Pennsylvania
residents.
**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, adjusted for capital gain distributions.
Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
*** SOURCE: Lipper Analytical Services, Inc.
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DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
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STATEMENT OF INVESTMENTS MAY 31, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments--100.0% Amount Value
- -------------------------------------------------------
____________ ___________
<S> <C> <C>
Pennsylvania--90.0%
Allegheny County Hospital Development Authority, Revenue, Refunding
(Magee Womens Hospital):
5.875%, 10/1/2002 (Insured; FGIC) $ 500,000 $ 532,870
6%, 10/1/2005 (Insured; FGIC) 1,525,000 1,643,050
Berks County, Refunding 5.60%, 11/15/2007 (Insured; FGIC) 545,000 569,421
Butler Area Sewer Authority, Sewer Revenue, Refunding:
Zero Coupon, 1/1/2010 (Insured; FGIC) 600,000 345,492
Zero Coupon, 7/1/2010 (Insured; FGIC) 600,000 337,362
Cambria County, Refunding 5.875%, 8/15/2008 (Insured; FGIC) 850,000 930,155
Cambria Township Water Authority, Industrial User Revenue
6%, 12/1/2002 (LOC; Banque Paribas) (a) 1,250,000 1,291,638
Clinton County Industrial Development Authority, PCR, Refunding
(International Paper Co. Project) 5.375%, 5/1/2004 500,000 524,755
Dauphin County General Authority, Revenue:
6.25%, 6/1/2001 650,000 682,390
4.45%, 9/1/2001 (Insured; AMBAC) 3,000,000 3,020,640
6%, 12/1/2006 (LOC; The Sakura Bank Ltd.) (a) 785,000 835,499
Delaware County Industrial Development Authority, Revenue, Refunding
(Martins Run Project) 5.60%, 12/15/2002 750,000 763,485
Erie School District, Refunding
Zero Coupon, 9/1/2009 (Insured; FSA) 1,110,000 656,565
Franklin County Industrial Development Authority, HR, Refunding
(The Chambersburg Hospital) 5.25%, 7/1/2014 (Insured; AMBAC) 1,075,000 1,085,427
Harrisburgh Authority, Office and Parking Revenue
5.75%, 5/1/2008 (b) 1,200,000 1,202,184
Hempfield School District, Refunding 5.30%, 10/15/2014 (Insured; FGIC) 1,000,000 1,017,350
Jefferson County Hospital Authority, HR, Refunding (Brookville Hospital)
7%, 8/1/2002 (Insured; FHA) 905,000 935,725
Lebanon County Good Samaritan Hospital Authority, Revenue, Refunding
(Good Samaritan Hospital Project):
5.85%, 11/15/2007 845,000 901,387
6%, 11/15/2009 1,500,000 1,604,430
McKeesport Area School District, Refunding
Zero Coupon, 10/1/2009 (Insured; FGIC) 1,070,000 630,455
Montgomery County Higher Education and Health Authority, HR
(Montgomery Hospital Medical Center) 6.60%, 7/1/2010 1,000,000 1,079,820
Pennsylvania, COP, Refunding 5.40%, 7/1/2008 (Insured; AMBAC) 1,000,000 1,040,220
Pennsylvania Convention Center Authority, Revenue, Refunding 6.25%, 9/1/2004 750,000 803,333
Pennsylvania Economic Development Financing Authority, RRR
(Northampton Generating Project) 6.40%, 1/1/2009 500,000 530,125
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
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STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
- -------------------------------------------------------
____________ ____________
Pennsylvania (continued)
Pennsylvania Finance Authority, Revenue, Refunding
(Municipal Capital Improvements Program) 6.60%, 11/1/2009 $ 4,190,000 $ 4,659,825
Pennsylvania Higher Educational Facilities Authority:
College and University Revenue (Delaware Valley College of Science and
Agriculture)
6.50%, 4/1/2008 790,000 853,200
Health Services Revenue, Refunding (Allegheny Delaware Valley)
5.60%, 11/15/2010 (Insured; MBIA) 1,250,000 1,369,400
Pennsylvania Housing Finance Agency, Single Family Mortgage:
5.95%, 10/1/2003 365,000 381,549
6.20%, 4/1/2005 410,000 427,347
6.20%, 10/1/2005 420,000 438,833
5.75%, 4/1/2006 400,000 419,096
6.10%, 4/1/2006 455,000 474,656
5.75%, 10/1/2006 415,000 435,837
6.10%, 10/1/2006 465,000 486,106
Pennsylvania Industrial Development Authority, EDR
7%, 1/1/2006 (Insured; AMBAC) 1,795,000 2,075,702
Pennsylvania Infrastructure Investment Authority, Revenue
(Pennvest Loan Pool Program) 6%, 9/1/2005 (Insured; MBIA) 2,155,000 2,375,456
Pennsylvania Turnpike Commission, Oil Franchise Tax Revenue
5.50%, 12/1/2012 (Insured; AMBAC) 3,000,000 3,143,100
Philadelphia:
5.70%, 11/15/2006 (Insured; FGIC) 1,000,000 1,081,620
Airport Revenue (Philadelphia Airport System) 5.75%, 6/15/2008 (Insured; AMBAC) 1,000,000 1,074,710
Water and Wastewater Revenue, Refunding:
5.50%, 6/15/2003 (Insured; FGIC) 1,000,000 1,056,200
5.75%, 6/15/2013 (Insured; MBIA) 1,500,000 1,602,795
Philadelphia Hospitals and Higher Education Facilities Authority, Revenue:
(Childrens Seashore House) 7%, 8/15/2003 650,000 713,869
(Community College) 5.90%, 5/1/2007 (Insured; MBIA) 445,000 482,682
(Northwestern Corp.) 7%, 6/1/2012 1,530,000 1,662,896
Refunding (Temple University Hospital) 6.50%, 11/15/2008 1,000,000 1,123,620
Philadelphia Municipal Authority, LR, Refunding:
6%, 7/15/2003 500,000 519,245
5.40%, 11/15/2006 (Insured; FGIC) 500,000 528,245
Philadelphia School District:
5.35%, 7/1/2003 (Insured; MBIA) 1,350,000 1,417,257
5.75%, 7/1/2007 (Insured; MBIA) 600,000 641,310
Scranton-Lackawanna Health and Welfare Authority, Revenue, Refunding
(University of Scranton Project) 5.80%, 3/1/2000 500,000 513,665
Southeastern Transportation Authority, Special Revenue:
6.50%, 3/1/2004 (Insured; FGIC) 1,500,000 1,669,785
5.875%, 3/1/2009 (Insured; FGIC) 750,000 812,258
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
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STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
- -------------------------------------------------------
____________ ___________
Pennsylvania (continued)
Upper Allegheny Joint Sanitary Authority, Sewer Revenue
5.70%, 9/1/2005 (Insured; FGIC, Prerefunded 9/1/2002) (c) $ 1,095,000 $ 1,163,361
Westmoreland County, Refunding:
Zero Coupon, 12/1/2006 (Insured; FGIC) 2,000,000 1,366,360
Zero Coupon, 12/1/2008 (Insured; FGIC) 1,790,000 1,110,086
Wilkinsburg Joint Water Authority, Water Revenue
6.15%, 8/15/2006 (Insured; AMBAC, Prerefunded 8/15/2002) (c) 600,000 647,448
York County Hospital Authority, Revenue, Refunding
(Lutheran Social Services Health Center) 6.25%, 4/1/2011 1,000,000 1,076,810
Yough School District, Refunding
Zero Coupon, 10/1/2007 (Insured; FGIC) 1,000,000 652,160
U.S. Related--10.0%
Puerto Rico Commonwealth Highway and Transportation Authority, Highway Revenue:
5.40%, 7/1/2006 2,000,000 2,104,760
5.40%, 7/1/2006 (Insured; FSA) 4,000,000 4,243,240
Puerto Rico Electric Power Authority, Power Revenue:
5.90%, 7/1/2002 250,000 265,660
6%, 7/1/2006 225,000 246,411
____________
TOTAL INVESTMENTS (cost $65,111,604) $68,280,338
=============
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DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
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Summary of Abbreviations
- -----------------------------------------------------------------------------
<S> <C> <S> <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>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
_______ ________ _________________ ___________________
AAA Aaa AAA 60.4%
AA Aa AA 11.3
A A A 9.5
BBB Baa BBB 13.2
F1+ & F1 MIG1, VMIG1 & P1 SP1 & A1 1.9
Not Rated (e) Not Rated (e) Not Rated (e) 3.7
_______
100.0%
=======
</TABLE>
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Secured by letters of credit.
(b) Purchased on a delayed-delivery basis.
(c)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.
(d)Fitch currently provides creditworthiness information for a limited number
of investments.
(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.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
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STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1998 (UNAUDITED)
Cost Value
____________ ___________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $65,111,604 $68,280,338
Cash 307,494
Interest receivable 992,842
Receivable for shares of Beneficial Interest subscribed 45,950
Prepaid expenses 19,964
____________
69,646,588
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 31,496
Payable for investment securities purchased 1,207,667
Accrued expenses 21,246
____________
1,260,409
____________
NET ASSETS $68,386,179
============
REPRESENTED BY: Paid-in capital $65,115,527
Accumulated undistributed investment income--net 16,338
Accumulated net realized gain (loss) on investments 85,580
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 3,168,734
____________
NET ASSETS $68,386,179
============
SHARES OUTSTANDING
(UNLIMITED NUMBER OF $.001 PAR VALUE SHARES OF BENEFICIAL INTEREST AUTHORIZED) 5,040,960
NET ASSET VALUE, offering and redemption price per share--Note 3(d) $13.57
========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
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STATEMENT OF OPERATIONS SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income $1,734,439
EXPENSES: Management fee--Note 3(a) $ 200,561
Shareholder servicing costs--Note 3(b) 56,110
Professional fees 17,510
Trustees' fees and expenses--Note 3(c) 8,621
Registration fees 7,943
Prospectus and shareholders' reports 6,941
Custodian fees 3,546
Loan commitment fees--Note 2 243
Miscellaneous 8,680
___________
Total Expenses 310,155
Less--reduction in management fee due to
undertaking--Note 3(a) (42,497)
___________
Net Expenses 267,658
___________
INVESTMENT INCOME--NET 1,466,781
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments $ 84,297
Net unrealized appreciation (depreciation) on investments 548,818
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 633,115
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,099,896
===========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
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STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
May 31, 1998 Year Ended
(Unaudited) November 30, 1997
________________ ________________
<S> <C> <C>
OPERATIONS:
Investment income--net $ 1,466,781 $ 2,558,684
Net realized gain (loss) on investments 84,297 172,702
Net unrealized appreciation (depreciation) on investments 548,818 999,341
____________ ____________
Net Increase (Decrease) in Net Assets Resulting from Operations 2,099,896 3,730,727
____________ ____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net (1,466,121) (2,549,186)
Net realized gain on investments (25,601) --
____________ ____________
Total Dividends (1,491,722) (2,549,186)
____________ ____________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold 7,175,088 20,595,386
Dividends reinvested 1,128,712 1,900,542
Cost of shares redeemed (5,453,540) (9,121,812)
____________ ____________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 2,850,260 13,374,116
____________ ____________
Total Increase (Decrease) in Net Assets 3,458,434 14,555,657
NET ASSETS:
Beginning of Period 64,927,745 50,372,088
____________ ____________
End of Period $68,386,179 $64,927,745
=========== ============
UNDISTRIBUTED INVESTMENT INCOME--NET $ 16,338 $ 15,678
____________ ____________
CAPITAL SHARE TRANSACTIONS: Shares Shares
____________ ____________
Shares sold 529,350 1,559,872
Shares issued for dividends reinvested 83,306 143,586
Shares redeemed (403,056) (693,403)
____________ ____________
Net Increase (Decrease) in Shares Outstanding 209,600 1,010,055
=========== ============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
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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, 1998 Year Ended November 30,
________________________________________
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994(1)
__________ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.44 $13.18 $13.12 $11.84 $12.50
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net .30 .60 .59 .63 .61
Net realized and unrealized gain (loss)
on investments .14 .26 .06 1.28 (.66)
_______ _______ _______ _______ _______
Total from Investment Operations .44 .86 .65 1.91 (.05)
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net (.30) (.60) (.59) (.63) (.61)
Dividends from net realized gain on investments (.01) -- -- -- --
_______ _______ _______ _______ _______
Total Distributions (.31) (.60) (.59) (.63) (.61)
_______ _______ _______ _______ _______
Net asset value, end of period $13.57 $13.44 $13.18 $13.12 $11.84
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 6.34%(2) 6.67% 5.10% 16.47% (.60%)(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .80%(2) .80% .80% .48% --
Ratio of net investment income
to average net assets 4.39%(2) 4.52% 4.52% 4.93% 5.19%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager .13%(2) .13% .31% .62% 1.39%(2)
Portfolio Turnover Rate 2.70%(3) 23.94% 53.83% 5.07% 20.13%(3)
Net assets, end of period (000's Omitted) $68,386 $64,928 $50,372 $40,079 $22,599
- -----------------------------
(1) From December 16, 1993 (commencement of operations) to November 30,1994.
(2) Annualized.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
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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. Under the terms of the custodian
agreement, the Fund received net earnings credits of $1,009 during the period
ended May 31, 1998 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the
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DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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, if any, 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.
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (" Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended May
31, 1998, 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
December 1, 1997 through May 31, 1998 to reduce the management fee paid by the
Fund, to the extent that the Fund's aggregate annual expenses (exclusive of
taxes, brokerage, 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 $42,497 during the period ended May 31, 1998.
(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
shareholders 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 May
31, 1998, the Fund was charged $34,302 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 May 31, 1998, the Fund was charged $17,455 pursuant to the transfer agency
agreement.
(C) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $1,000 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
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DREYFUS PENNSYLVANIA INTERMEDIATE MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(D) A 1% redemption fee is charged and retained by the Fund 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, 1998 amounted
to $5,395,575 and $1,781,045, respectively.
At May 31, 1998, accumulated net unrealized appreciation on investments was
$3,168,734, consisting of $3,186,937 gross unrealized appreciation and $18,203
gross unrealized depreciation.
At May 31, 1998, 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).
