Dreyfus
Pennsylvania
Intermediate
Municipal Bond Fund
SEMIANNUAL REPORT May 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Pennsylvania
Intermediate Municipal Bond Fund, covering the six-month period from December 1,
1999 through May 31, 2000. Inside you'll find valuable information about how the
fund was managed during the reporting period, including a discussion with the
fund's portfolio manager, Douglas Gaylor.
The U.S. economy grew strongly over the past six months in an environment
characterized by high levels of consumer spending and low levels of
unemployment. Concerns that inflationary pressures might reemerge caused the
Federal Reserve Board to raise short-term interest rates three times during the
reporting period. These rate hikes contributed to a total interest-rate increase
of 1.75 percentage points since June 1999. Despite an encouraging rally during
the first quarter of 2000, higher interest rates generally led to an erosion of
municipal bond prices during the reporting period.
We appreciate your confidence over the past six months and we look forward to
your continued participation in Dreyfus Pennsylvania Intermediate Municipal Bond
Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
June 15, 2000
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Pennsylvania Intermediate Municipal Bond Fund perform during the
period?
For the six-month reporting period ended May 31, 2000, Dreyfus Pennsylvania
Intermediate Municipal Bond Fund achieved a 0.47% total return.(1) In
comparison, the fund' s peer group, as measured by the Lipper Pennsylvania
Intermediate Municipal Debt Funds category average, achieved a 0.18% total
return for the same period.(2)
We attribute the fund' s performance to its security selection strategy in a
difficult investment environment. While the fund was negatively affected by
higher interest rates when the Federal Reserve Board (the "Fed") tightened
monetary policy three times during the reporting period in an attempt to relieve
inflationary pressures, the fund' s holdings outperformed the general market,
helping it achieve a modestly positive total return.
What is the fund's investment approach?
The fund' s objective is to seek as high a level of federal and Pennsylvania
state tax-exempt income as is practical from a diversified portfolio of
municipal bonds keeping an average maturity of three to 10 years. We also seek a
competitive total return, which includes both income and changes in share price
To achieve these objectives, we conduct rigorous analysis of each individual
bond' s structure. Within the context of our bond structure analyses, we strive
to maximize both income and total return, to the extent consistent with maximum
income.
First, we try to allocate between one-quarter and one-half of the total
portfolio to bonds that we believe have the potential to offer attractive total
returns. We typically look for bonds that are selling at a discount to face
value because they may be temporarily out of favor among The Fun
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
investors. Our belief is that these bonds' prices will rise as they return to
favor over time.
Second, for the remainder of the portfolio, we look for bonds that can
potentially provide consistently high current yields. We also try to ensure that
we select bonds that are most likely to obtain attractive prices if and when we
decide to sell them in the secondary market.
What other factors influenced the fund's performance?
The fund was influenced by the changing market conditions over the past six
months. Although the first quarter of 2000 experienced an encouraging municipal
bond market rally, the months immediately preceding and following the first
quarter saw more difficult investment environments. As a result, the fund's
total return performance was only modestly positive over the full six-month
reporting period.
When the reporting period began on December 1, 1999, investors had become
concerned that strong economic growth in the U.S. and worldwide economies might
rekindle long-dormant inflationary pressures, especially rising wages in a tight
job market. In an attempt to ease these pressures and forestall a reacceleration
of inflation, the Fed raised short-term interest rates three times during the
reporting period, causing most bond prices, including the fund's holdings, to
fall. These interest-rate hikes followed three previous increases implemented
before the current reporting period began, for a total increase of 1.75
percentage points since mid-1999.
In addition, the fund' s performance was affected by supply-and-demand
influences. For a variety of reasons, institutional investors such as insurance
companies and mutual funds have recently participated less in the tax-exempt
bond market. Despite strong demand from individual investors, the absence of
institutional buyers helped reduce overall demand and as a result, drove
municipal bond prices down. During the first few months of 2000, however,
issuance of municipal bonds nationally declined sharply compared to the same
period one
year ago. This supply reduction, combined with continued robust demand from
individual investors, helped support a brief rebound of municipal bond prices,
from which the fund's holdings benefited.
What is the fund's current strategy?
With little new supply from Pennsylvania issuers in a rising interest-rate
environment, the fund's average duration -- a measure of sensitivity to changing
interest rates -- generally rose over the past six months. While this duration
expansion was not a strategic move per se, it enabled us to lock in prevailing
competitive yields for a longer period. It has also enabled us to participate
more in the intermediate sector of the municipal bond market which, because of
high levels of demand from individual investors, has ranked among the strongest
segments of the market.
From a security selection perspective, we have recently increased our holdings
of bonds issued by hospitals in the Philadelphia area. After being out of favor
among investors because of structural problems in the health care industry, we
have recently seen encouraging signs of consolidation and stabilization. As a
result, we took advantage of an opportunity to purchase hospital bonds at what
we consider to be very attractive prices.
June 15, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE
AND LOCAL TAXES FOR NON-PENNSYLVANIA RESIDENTS, AND SOME INCOME MAY BE
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS.
CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE. RETURN FIGURES PROVIDED REFLECT
THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS CORPORATION PURSUANT TO AN
UNDERTAKING IN EFFECT THAT MAY BE EXTENDED, TERMINATED OR MODIFIED AT ANY
TIME. HAD THESE EXPENSES NOT BEEN ABSORBED, THE FUND'S RETURN WOULD HAVE
BEEN LOWER.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
May 31, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--98.5% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PENNSYLVANIA--94.5%
Allegheny County Hospital Development Authority,
Revenue:
(Magee Women's Hospital)
5.875%, 10/1/2002 (Insured; FGIC) 500,000 508,440
(UPMC Health Systems)
4.625%, 12/15/2015 (Insured; AMBAC) 4,415,000 3,684,936
Bangor Area School District:
4.50%, 3/15/2015 (Insured; FSA) 1,400,000 1,180,648
4.50%, 3/15/2016 (Insured; FSA) 1,150,000 957,375
Berks County Municipal Authority, Health, Hospital and
Nursing Home Revenue (Phoebe-Devitt Homes
Project) 5.50%, 5/15/2011 965,000 843,883
Butler Area Sewer Authority, Sewer Revenue:
Zero Coupon, 1/1/2010 (Insured; FGIC) 600,000 347,700
Zero Coupon, 7/1/2010 (Insured; FGIC) 100,000 56,323
Cambria County 5.875%, 8/15/2008 (Insured; FGIC) 850,000 874,352
Cambria Township Water Authority, Industrial User
Revenue 6%, 12/1/2002 (LOC; Banque Paribas) 1,250,000 1,253,900
Central Dauphin School District
4.40%, 6/1/2007 (Insured; AMBAC) 720,000 667,102
Clinton County Industrial Development Authority, PCR
(International Paper Co. Project) 5.375%, 5/1/2004 500,000 497,680
Coatsville School District :
4.60%, 10/1/2012 (Insured; FSA) 2,000,000 1,766,740
4.70%, 10/1/2013 (Insured; FSA) 1,000,000 883,020
4.50%, 10/1/2016 (Insured; FSA) 1,000,000 827,320
Council Rock School District
4.70%, 11/15/2013 (Insured; FGIC) 2,000,000 1,768,120
Dauphin County General Authority, Revenue:
6.25%, 6/1/2001 650,000 654,433
6%, 12/1/2006 (LOC; The Sakura Bank Ltd.) 785,000 791,296
Delaware County Industrial Development Authority,
Revenue (Martins Run Project) 5.60%, 12/15/2002 750,000 735,450
Erie School District
Zero Coupon, 9/1/2009 (Insured; FSA) 1,110,000 657,042
Harrisburgh Authority, Office and Parking Revenue
5.75%, 5/1/2008 1,200,000 1,143,480
Harrisburg Redevelopment Authority
Zero Coupon, 11/1/2016 (Insured; FSA) 2,000,000 732,840
Jefferson County Hospital Authority, HR
(Brookville Hospital) 7%, 8/1/2002 (Insured; FHA) 415,000 423,615
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Lancaster County Hospital Authority, Revenue
(Lancaster General Hospital Project)
4.75%, 7/1/2011 (Insured; AMBAC) 2,000,000 1,797,380
Langhorne Manor Borough Higher Education and Health
Authority, Health Hospital and Nursing Home
Revenue (Woods Services Inc.)
4.875%, 11/15/2015 (Insured; AMBAC) 2,210,000 1,916,490
Lebanon County Good Samaritan Hospital Authority,
Revenue (Good Samaritan Hospital Project):
5.85%, 11/15/2007 845,000 815,036
6%, 11/15/2009 1,500,000 1,431,405
McKeesport Area School District
Zero Coupon, 10/1/2009 (Insured; FGIC) 1,070,000 630,091
Montgomery County Higher Education and Health
Authority, HR (Montgomery Hospital Medical
Center) 6.60%, 7/1/2010 1,000,000 975,910
Montgomery County Industrial Development Authority,
Revenue (Friends Central School Project)
4.75%, 3/1/2016 (Insured; AGIC) 960,000 787,181
Norristown:
Zero Coupon 12/15/2011 (Insured; AGIC) 1,465,000 735,635
Zero Coupon 12/15/2013 (Insured; AGIC) 735,000 322,415
State of Pennsylvania, COP
5%, 7/1/2015 (Insured; AMBAC) 2,500,000 2,255,175
Pennsylvania Convention Center Authority, Revenue
6.25%, 9/1/2004 750,000 761,227
Pennsylvania Economic Development Financing
Authority, RRR (Northampton Generating Project)
6.40%, 1/1/2009 2,000,000 1,935,880
Pennsylvania Higher Educational Facilities Authority,
Health Services Revenue (University of
Pennsylvania Health Services) 5.35%, 1/1/2008 3,995,000 3,683,710
Pennsylvania Housing Finance Agency,
Single Family Mortgage:
5.95%, 10/1/2003 365,000 368,825
6.20%, 4/1/2005 410,000 411,328
6.20%, 10/1/2005 420,000 421,487
5.75%, 4/1/2006 400,000 401,732
6.10%, 4/1/2006 455,000 455,728
5.75%, 10/1/2006 415,000 416,930
6.10%, 10/1/2006 465,000 465,800
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Pennsylvania Industrial Development Authority, EDR
7%, 1/1/2006 (Insured; AMBAC) 795,000 860,532
Pennsylvania Infrastructure Investment Authority,
Revenue (Pennvest Loan Pool Program)
6%, 9/1/2005 (Insured; MBIA) 155,000 160,943
Philadelphia:
5.70%, 11/15/2006 (Insured; FGIC) 370,000 379,720
4.75%, 5/15/2016 (Insured; FGIC) 750,000 647,970
Airport Revenue (Philadelphia Airport System)
5.75%, 6/15/2008 (Insured; AMBAC) 1,000,000 1,012,950
Water and Wastewater Revenue
5.50%, 6/15/2003 (Insured; FGIC) 1,000,000 1,011,240
Philadelphia Hospitals and Higher Education Facilities
Authority, Revenue:
(Children's Seashore House) 7%, 8/15/2003 650,000 668,525
(Community College) 5.90%, 5/1/2007
(Prerefunded 5/1/2004) (Insured; MBIA) 445,000 (a) 464,326
(Jefferson Health System):
4.30%, 5/15/2006 500,000 447,860
5%, 5/15/2011 1,500,000 1,331,490
(Temple University Hospital) 6.50%, 11/15/2008 3,075,000 2,968,513
Philadelphia Municipal Authority, LR:
6%, 7/15/2003 440,000 440,422
5.40%, 11/15/2006 (Insured; FGIC) 500,000 503,620
Pittsburgh 4.60%, 9/1/2012 (Insured; FGIC) 1,600,000 1,414,240
Southeast Pennsylvania Transportation Authority,
Special Revenue:
6.50%, 3/1/2004
(Insured; FGIC) (Escrowed to Maturity) 85,000 89,081
5.875%, 3/1/2009
(Insured; FGIC) (Prerefunded 3/1/2005) 750,000 (a) 46,776
Upper Dublin School
4.60%, 11/15/2009 (Insured; AMBAC) 1,000,000 918,560
Westmoreland County:
Zero Coupon, 12/1/2006 (Insured; FGIC) 1,500,000 1,051,545
Zero Coupon, 12/1/2008 (Insured; FGIC) 1,790,000 1,113,828
York County Hospital Authority, Revenue (Lutheran
Social Services Health Center) 6.25%, 4/1/2011 1,000,000 933,520
Yough School District
Zero Coupon, 10/1/2007 (Insured; FGIC) 1,000,000 668,870
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. RELATED--4.0%
Puerto Rico Commonwealth Highway and Transportation
Authority, Highway Revenue 5.40%, 7/1/2006 2,000,000 1,996,820
Puerto Rico Electric Power Authority, Power Revenue:
5.90%, 7/1/2002 250,000 254,490
6%, 7/1/2006 225,000 234,094
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TOTAL INVESTMENTS (cost $63,996,099) 98.5% 61,864,995
CASH AND RECEIVABLES (NET) 1.5% 937,979
NET ASSETS 100.0% 62,802,974
</TABLE>
Summary of Abbreviations
AGIC Asset Guaranty
Insurance Company
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
EDR Economic Development Revenue
FGIC Financial Guaranty
Insurance Company
FHA Federal Housing Administration
FSA Financial Security Assurance
HR Hospital Revenue
LOC Letter of Credit
LR Lease Revenue
MBIA Municipal Bond
Investors Assurance
Insurance Corporation
PCR Pollution Control Revenue
RRR Resources Recovery Revenue
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 52.2
AA Aa AA 10.6
A A A 14.6
BBB Baa BBB 18.2
Not Rated (b) Not Rated (b) Not Rated (b) 4.4
100.0
</TABLE>
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 63,996,099 61,864,995
Cash 134,387
Interest receivable 851,392
Receivable for shares of Beneficial Interest subscribed 250
Prepaid expenses 5,479
62,856,503
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 28,925
Payable for shares of Beneficial Interest redeemed 1,255
Accrued expenses 23,349
53,529
--------------------------------------------------------------------------------
NET ASSETS ($) 62,802,974
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 65,080,468
Accumulated net realized gain (loss) on investments (146,390)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (2,131,104)
--------------------------------------------------------------------------------
NET ASSETS ($) 62,802,974
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
4,995,819
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 12.57
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2000 (Unaudited)
-------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 1,862,522
EXPENSES:
Management fee--Note 3(a) 200,649
Shareholder servicing costs--Note 3(b) 48,895
Professional fees 17,824
Trustee's fees and expenses--Note 3(c) 9,877
Prospectus and shareholders' reports 6,654
Registration fees 5,579
Custodian fees 3,726
Loan commitment fees--Note 2 602
Miscellaneous 8,860
TOTAL EXPENSES 302,666
Less--reduction in management fee
due to undertaking--Note 3(a) (34,532)
NET EXPENSES 268,134
INVESTMENT INCOME--NET 1,594,388
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (177,269)
Net unrealized appreciation (depreciation) on investments (1,162,249)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (1,339,518)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 254,870
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
May 31, 2000 Year Ended
(Unaudited) November 30, 1999
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OPERATIONS ($):
Investment income--net 1,594,388 3,258,205
Net realized gain (loss) on investments (177,269) 341,668
Net unrealized appreciation (depreciation)
on investments (1,162,249) (4,541,257)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 254,870 (941,384)
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DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (1,594,388) (3,258,205)
Net realized gain on investments (317,263) (549,983)
TOTAL DIVIDENDS (1,911,651) (3,808,188)
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BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 4,553,775 14,084,828
Dividends reinvested 1,418,682 2,861,905
Cost of shares redeemed (13,189,240) (14,483,277)
INCREASE (DECREASE) IN NET ASSETS
FROM BENEFICIAL INTEREST TRANSACTIONS (7,216,783) 2,463,456
TOTAL INCREASE (DECREASE) IN NET ASSETS (8,873,564) (2,286,116)
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 71,676,538 73,962,654
END OF PERIOD 62,802,974 71,676,538
-------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 359,774 1,054,909
Shares issued for dividends reinvested 111,880 214,970
Shares redeemed (1,043,153) (1,089,522)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (571,499) 180,357
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
<CAPTION>
Six Months Ended
May 31, 2000 Year Ended November 30,
----------------------------------------------------------------
(Unadited) 1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.87 13.73 13.44 13.18 13.12 11.84
Investment Operations:
Investment income--net .30 .59 .60 .60 .59 .63
Net realized and unrealized
gain (loss) on investments (.24) (.76) .30 .26 .06 1.28
Total from
Investment Operations .06 (.17) .90 .86 .65 1.91
Distributions:
Dividends from
investment income--net (.30) (.59) (.60) (.60) (.59) (.63)
Dividends from net realized
gain on investments (.06) (.10) (.01) -- -- --
Total Distributions (.36) (.69) (.61) (.60) (.59) (.63)
Net asset value, end of period 12.57 12.87 13.73 13.44 13.18 13.12
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) .94(a) (1.30) 6.76 6.67 5.10 16.47
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .80(a) .80 .80 .80 .80 .48
Ratio of net investment income
to average net assets 4.75(a) 4.41 4.35 4.52 4.52 4.93
Decrease reflected in above
expense ratios due to
undertaking by
The Dreyfus Corporation .10(a) .12 .13 .13 .31 .62
Portfolio Turnover Rate 24.05(b) 45.37 26.03 23.94 53.83 5.07
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets,
end of period ($ x 1,000) 62,803 71,677 73,963 64,928 50,372 40,079
(A) ANNUALIZED.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The 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, as amended (the "Act"), as a
non-diversified open-end management investment company. The fund's investment
objective is to provide investors with as high a level of current income exempt
from Federal and Pennsylvania income taxes as is consistent with the
preservation of capital. The Dreyfus Corporation (the "Manager") serves as the
fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares which are
sold to the public without a sales charge. Prior to March 22, 2000, Premier
Mutual Fund Services, Inc. was the distributor.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market on each
business day. Investments not listed on an exchange or the national securities
market, or securities for which there were no transactions, are valued at the
average of the most recent bid and asked prices. Bid price is used when no asked
price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $3,480 during the period
ended May 31, 2000 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
fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, 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 The Fun
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
exempt dividends, by complying with the applicable provisions of the Code, and
to make distributions of income and net realized capital gain sufficient to
relieve it from substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended May
31, 2000, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .60 of 1% of the value of the fund's average
daily net assets and is payable monthly. The Manager had undertaken from
December 1, 1999 through May 31, 2000 to reduce the management fee paid by the
fund, to the extent that the fund's aggregate annual expenses, exclusive of
taxes, brokerage fees, interest on borrowings, commitment fees and extraordinary
expenses, exceeded an annual rate of .80 of 1% of the value of the fund's
average daily net assets. The reduction in management fee, pursuant to the
undertaking, amounted to $34,532 during the period ended May 31, 2000.
(b) Under the Shareholder Services Plan, the fund reimburses DSC an amount not
to exceed an annual rate of .25 of 1% of the value of the fund's average daily
net assets for certain allocated expenses of providing personal services and/or
maintaining shareholders accounts. The services provided may include personal
services relat
ing 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, 2000,
the fund was charged $24,019 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, 2000, the fund was charged $15,907 pursuant to the transfer agency
agreement.
(c) Each trustee who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $1,000 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A 1% redemption fee is charged and retained by the fund on shares redeemed
within fifteen days of their issuance, including on redemptions through the use
of the fund' s exchange privilege. During the period ended May 31, 2000,
redemption fees charged and retained by the fund amounted to $8. Effective June
1, 2000, this fee will be chargeable within thirty days following the date of
issuance of such shares.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended May 31, 2000, amounted to
$15,422,470 and $23,000,141, respectively.
At May 31, 2000, accumulated net unrealized depreciation on investments was
$2,131,104, consisting of $220,339 gross unrealized appreciation and $2,351,443
gross unrealized depreciation.
At May 31, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
For More Information
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
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 105SA005
