-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VysIenmdzf/srIunk6RZLIeq/ToAl6Y78dv7y9NEQcWoZ76kv502h/vT9L+/GSsD Uy7k8H/fy1n2HVbNk1shxg== 0000797923-02-000009.txt : 20021226 0000797923-02-000009.hdr.sgml : 20021225 20021226131254 ACCESSION NUMBER: 0000797923-02-000009 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021031 FILED AS OF DATE: 20021226 EFFECTIVENESS DATE: 20021226 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DREYFUS PREMIER MUNICIPAL BOND FUND CENTRAL INDEX KEY: 0000797923 STATE OF INCORPORATION: NY FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04764 FILM NUMBER: 02868887 BUSINESS ADDRESS: STREET 1: 200 PARK AVENUE STREET 2: THE DREYFUS CORPORATION CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2129226840 MAIL ADDRESS: STREET 1: C/O DREYFUS CORP STREET 2: 200 PARK AVENUE, 8TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: PREMIER TAX EXEMPT BOND FUND DATE OF NAME CHANGE: 19900916 FORMER COMPANY: FORMER CONFORMED NAME: GARDEN CITY TAX EXEMPT BOND FUND DATE OF NAME CHANGE: 19860910 FORMER COMPANY: FORMER CONFORMED NAME: PREMIER MUNICIPAL BOND FUND DATE OF NAME CHANGE: 19920703 N-30D 1 semiannual022.txt SEMI-ANNUAL REPORT Dreyfus Premier Municipal Bond Fund SEMIANNUAL REPORT October 31, 2002 The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value Contents THE FUND - -------------------------------------------------- 2 Letter from the Chairman 3 Discussion of Fund Performance 6 Statement of Investments 13 Statement of Assets and Liabilities 14 Statement of Operations 15 Statement of Changes in Net Assets 17 Financial Highlights 20 Notes to Financial Statements FOR MORE INFORMATION - --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Premier Municipal Bond Fund LETTER FROM THE CHAIRMAN Dear Shareholder: We present this semiannual report for Dreyfus Premier Municipal Bond Fund, covering the six-month period from May 1, 2002 through October 31, 2002. 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, James Welch. As a falling stock market dominated the financial headlines during the reporting period, municipal bonds generally produced relatively attractive returns. Prices of high-quality, tax-exempt bonds rallied as investors revised their expectations of the direction and timing of future interest-rate changes. On the other hand, economic uncertainty, instability in the Middle East and new disclosures of corporate scandals generally hurt lower-rated securities. Will municipal bonds continue to provide higher returns than stocks? While no one can know for sure, history suggests that investing only in fixed-income securities probably won' t provide the long-term returns most investors need. Instead, we believe that holding the right mix of carefully selected stocks and bonds is an important consideration for investors. We suggest you talk regularly with your financial advisor to ensure that your portfolio reflects your investment needs, long-term goals and attitudes toward risk. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation November 15, 2002 DISCUSSION OF FUND PERFORMANCE James Welch, Portfolio Manager How did Dreyfus Premier Municipal Bond Fund perform relative to its benchmark? For the six-month period ended October 31, 2002, the fund achieved a total return of 1.74% for Class A shares, 1.56% for Class B shares and 1.36% for Class C shares.(1) In comparison, the Lehman Brothers Municipal Bond Index, the fund's benchmark, achieved a total return of 4.73% for the same period.(2) Additionally, the fund is reported in the Lipper General Municipal Debt Funds category. Over the reporting period, the average total return for all funds reported in the category was 3.82%.(3) We attribute the fund's positive overall performance to low interest rates and surging demand for municipal bonds. However, the fund produced lower returns than its benchmark and Lipper category average, primarily because of price weakness among its holdings of lower-rated bonds, which continued to suffer in the uncertain economic environment. What is the fund's investment approach? The fund seeks to maximize current income exempt from federal income tax to the extent consistent with the preservation of capital. To achieve this goal, we employ two primary strategies. First, we evaluate interest-rate trends and supply-and-demand factors in the bond market. Based on that assessment, we select the individual tax-exempt bonds that we believe are most likely to provide the highest returns with the least risk. We look at such criteria as the bond's yield, price, age, the creditworthiness of its issuer and any provisions for early redemption. Second, we actively manage the fund' s average duration in anticipation of temporary supply-and-demand changes. If we expect the supply of newly issued bonds to increase temporarily, we may reduce the fund's average duration to make cash available for the purchase of higher-yielding securities. Conversely, if we expect demand for municipal The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) bonds to surge at a time when we anticipate little issuance, we may increase the fund's average duration to maintain current yields for as long as practical. What other factors influenced the fund's performance? Despite the start of an economic recovery in early 2002, the reporting period was characterized by heightened economic uncertainty. Consumer spending remained strong, but corporate capital spending failed to rebound. Weak economic conditions were aggravated by other market forces, including a number of high-profile corporate scandals and heightened international tensions related to possible military action against Iraq. In this challenging environment, the Federal Reserve Board (the "Fed") maintained its accommodative monetary policy, seeking to stimulate renewed economic growth by keeping short-term interest rates at 40-year lows. However, the Fed's accommodative stance has so far failed to stimulate renewed capital spending, and corporate earnings have remained under pressure. As a result, risk-averse investors generally continued to favor relatively stable assets, such as municipal bonds. This surge in investor demand put additional downward pressure on yields. When bond yields fall, their prices rise, contributing positively to total returns. The weak economy caused most states to collect less income, sales and capital gains taxes than they originally anticipated. To help bridge their budget gaps, many municipalities issued more bonds during the reporting period than they did during the same period one year earlier. Although greater issuance tends to cause bond yields to rise, robust investor demand absorbed the increased supply, and bond yields remained low. The effects of economic weakness were particularly severe for tax-exempt bonds issued on behalf of corporations. The fund's holdings of airline and airport bonds were particularly hard-hit during the reporting period by the continuing impact of the September 11 terrorist attacks and several corporate bankruptcy filings in 2002. In this challenging market climate, we attempted to reduce the fund's corporate bond holdings. However, a persistent lack of liquidity for lower-rated bonds prevented us from reducing these positions as much or as quickly as we would have liked. We generally redeployed proceeds from the sale of corporate bonds to highly rated municipal securities with maturities in the 20-year range. Among the remaining corporate-backed municipal bonds that the fund held, we focused on bonds secured by valuable, tangible assets and on issuers that we believe will have no trouble meeting their debt obligations. What is the fund's current strategy? We have persisted in our attempts to rebalance the fund by reducing its holdings of lower-rated bonds and upgrading overall credit quality. Accordingly, we recently de-emphasized unsecured bonds from troubled regional economies, including New York and California. Whenever possible, we have focused on securities from revenue-producing issuers. In addition, we have diversified the fund' s holdings more broadly in order to reduce the risk that unexpected problems with any individual issuer or geographic region will have a disproportionate effect on the overall portfolio. In our view, these strategies represent a prudent course in a challenging investment climate. November 15, 2002 (1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID, AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. 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, AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE. (2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE LEHMAN BROTHERS MUNICIPAL BOND INDEX IS A WIDELY ACCEPTED, UNMANAGED TOTAL RETURN PERFORMANCE BENCHMARK FOR THE LONG-TERM, INVESTMENT-GRADE, TAX-EXEMPT BOND MARKET. INDEX RETURNS DO NOT REFLECT FEES AND EXPENSES ASSOCIATED WITH OPERATING A MUTUAL FUND. (3) SOURCE: LIPPER INC. -- CATEGORY AVERAGE RETURNS REFLECT THE FEES AND EXPENSES OF THE FUNDS COMPRISING THE AVERAGE. The Fund STATEMENT OF INVESTMENTS October 31, 2002 (Unaudited)
STATEMENT OF INVESTMENTS Principal LONG-TERM MUNICIPAL INVESTMENTS--97.7% Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA--2.1% Jefferson County, Sewer Revenue (Capital Improvement) 5.125%, 2/1/2029 (Insured; FGIC) 5,000,000 5,047,150 University of Alabama, HR 5.75%, 9/1/2020 (Insured; MBIA) 3,000,000 3,217,530 ARIZONA--.9% Tuscon Airport Authority, Inc., Revenue 5%, 6/1/2020 (Insured; AMBAC) 3,450,000 3,443,859 CALIFORNIA--7.4% California 5.625%, 5/1/2018 5,550,000 5,963,309 California Pollution Control Financing Authority, PCR (Southern California Edison Company) 7%, 3/1/2005 2,500,000 2,551,650 California Public Works Board, LR (Dept. of Corrections Corcoran) 5.50%, 1/1/2017 (Insured; AMBAC) 5,000,000 5,363,950 Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue 6%, 1/1/2034 (Prerefunded 1/1/2007) 5,000,000 (a) 5,708,400 Port Oakland, Revenue 5.50%, 11/1/2020 (Insured; FGIC) 3,800,000 3,995,434 Sacramento Municipal Utility District, Electric Revenue 5.25%, 7/1/2028 5,000,000 5,050,200 COLORADO--10.7% Arapahoe County Capital Improvement Trust Fund, Highway Revenue (E-470 Project): Zero Coupon, 8/31/2005 2,530,000 2,361,325 Zero Coupon, 8/31/2007 (Prerefunded 8/31/2005) 4,000,000 (a) 3,331,600 7%, 8/31/2026 (Prerefunded 8/31/2005) 11,000,000 (a) 12,817,530 Denver City and County, Airport Revenue: 6%, 11/15/2017 (Insured; AMBAC) 5,000,000 5,471,150 7.50%, 11/15/2023 (Prerefunded 11/15/2004) 2,060,000 (a) 2,325,019 7.50%, 11/15/2023 (Insured; MBIA) 9,715,000 10,801,526 Northwest Parkway Public Highway Authority, Revenue: Zero Coupon, 6/15/2027 (Insured; AMBAC) 6,125,000 1,422,899 7.125%, 6/15/2041 (Insured; AMBAC) 2,500,000 2,590,125 CONNECTICUT--6.8% Connecticut: 9.369%, 6/15/2011 4,000,000 (b,c) 5,163,120 8.969%, 12/15/2015 3,700,000 (b,c) 4,795,755 Principal LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT (CONTINUED) Connecticut Development Authority, PCR (Connecticut Light & Power) 5.85%, 9/1/2028 5,450,000 5,701,790 Connecticut Housing Finance Authority 5.85%, 5/15/2031 2,385,000 2,484,765 Mashantucket Western Pequot Tribe, Special Revenue 5.75%, 9/1/2027 8,000,000 (c) 8,032,000 DELAWARE--1.0% Delaware Housing Authority, MFMR 7%, 5/1/2025 3,725,000 3,861,112 FLORIDA--.7% Highlands County Health Facilities Authority, Revenue (Adventist/Sunbelt) 6%, 11/15/2031 2,500,000 2,605,500 GEORGIA--1.4% Georgia 5.25%, 7/1/2017 5,000,000 5,292,050 ILLINOIS--2.6% Carol Stream, First Mortgage Revenue (Windsor Park Manor Project) 6.50%, 12/1/2007 2,000,000 2,071,760 Chicago O'Hare International Airport, Special Facility Revenue (United Airlines Project): 5.20%, 4/1/2011 2,500,000 350,100 6.30%, 5/1/2016 3,950,000 592,658 Illinois Development Finance Authority, Revenue (Community Rehabilitation Providers Facility): 8.75%, 3/1/2010 122,000 122,893 8.25%, 8/1/2012 1,470,000 1,492,594 Metropolitan Pier and Exposition Authority, Dedicated State Tax Revenue (McCormick Place Expansion) 5.50%, 6/15/2023 (Insured; MBIA) 5,000,000 5,281,900 INDIANA--.4% Indiana Development Finance Authority Exempt Facilities Revenue (Inland Steel) 5.75%, 10/1/2011 5,000,000 1,733,150 KANSAS--1.4% Wichita, HR (Christi Health System, Inc.): 6.25%, 11/15/2019 2,000,000 2,182,860 6.25%, 11/15/2020 3,000,000 3,249,300 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) Principal LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND--.6% Maryland Energy Financing Administration, SWDR (Wheelabrator Water Projects) 6.45%, 12/1/2016 2,100,000 2,233,791 MASSACHUSETTS--6.7% Massachusetts Bay Transportation Authority (Sales Tax Revenue) 5%, 7/1/2027 (Insured; FGIC) 1,935,000 1,942,682 Massachusetts, Consolidated Loan 5.25%, 11/1/2030 10,000,000 10,262,200 Massachusetts Industrial Finance Agency: Health Care Facility Revenue (Metro Health Foundation, Inc. Project) 6.75%, 12/1/2027 8,000,000 7,453,040 Water Treatment Revenue (American Hingham) 6.95%, 12/1/2035 2,640,000 2,718,646 Route 3 North Transportation Improvement Asscociation, LR 5.75%, 6/15/2017 (Insured; MBIA) 3,000,000 3,297,390 MICHIGAN--1.0% Michigan Hospital Finance Authority, Revenue 8.659%, 11/15/2007 3,225,000 (b,c) 3,862,615 MISSISSIPPI--.7% Mississippi Business Finance Corporation, PCR (System Energy Resources, Inc.) 5.90%, 5/1/2022 3,000,000 2,787,000 MISSOURI--.6% Saint Louis Industrial Development Authority (Saint Louis Convention) 7.25%, 12/15/2035 2,500,000 2,486,025 NEW JERSEY--7.5% New Jersey Economic Development Authority, Revenue: 8.299%, Series A, 6/15/2016 2,495,000 (b,c) 2,928,806 8.299%, Series B, 6/15/2016 2,495,000 (b,c) 2,891,106 (School Facilities- Construction 2001): 5.25%, 6/15/2015 (Insured; AMBAC) 10,000 10,869 5.25%, 6/15/2016 (Insured; AMBAC) 10,000 10,794 Special Facilities (Continental Airlines, Inc. Project): 6.25%, 9/15/2019 5,750,000 3,202,003 New Jersey Turnpike Authority, Turnpike Revenue: 9.978%, 1/1/2011 6,350,000 (b,c) 8,504,111 5.625%, 1/1/2015 (Insured; MBIA) 4,700,000 5,206,707 5.50%, 1/1/2030 (Insured; MBIA) 6,000,000 6,286,920 Principal LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO--.5% Farmington, PCR (Public Service Co.--San Juan Project) 6.375%, 4/1/2022 1,800,000 1,839,708 NEW YORK--7.9% New York City Industrial Development Agency IDR (Laguardia Associates LP Project) 5.80%, 11/1/2013 4,710,000 3,930,966 New York City Municipal Water Finance Authority Water & Sewer Systems Revenue: 6%, 6/15/2033 (Prerefunded 6/15/2010) 3,085,000 (a) 3,642,182 6%, 6/15/2033 1,915,000 2,220,289 New York State Dormitory Authority, Revenues (New York University): 5.75%, 7/1/2016 (Insured; MBIA) 2,300,000 2,663,791 6%, 7/1/2017 (Insured; MBIA) 3,500,000 4,148,375 5.75%, 7/1/2027 (Insured; MBIA) 6,000,000 6,818,460 New York State Energy Research and Development Authority, Electric Facilities Revenue (Long Island Lighting Co.): 7.15%, 6/1/2020 2,980,000 3,052,086 7.15%, 12/1/2020 1,320,000 1,351,931 Scotia Housing Authority, Housing Revenue (Coburg Village, Inc. Project) 3.05%, 7/1/2018 4,000,000 2,720,000 NORTH CAROLINA--1.1% North Carolina Eastern Municipal Power Agency, Power System Revenue 7%, 1/1/2013 3,500,000 4,165,070 OHIO--1.2% Ohio Water Development Authority, Pollution Control Facilites Revenue (Cleveland Electric) 6.10%, 8/1/2020 4,300,000 4,455,918 OKLAHOMA--2.8% Holdenville Industrial Authority, Correctional Facility Revenue: 6.60%, 7/1/2010 (Prerefunded 7/1/2006) 2,045,000 (a) 2,387,272 6.70%, 7/1/2015 (Prerefunded 7/1/2006) 4,625,000 (a) 5,415,228 Tulsa Municipal Airport Trust Revenue (American Airlines) 5.65%, 12/1/2035 6,100,000 2,991,257 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) Principal LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA--1.4% Montgomery County Higher Education and Health Authority First Mortgage Revenue (AHF/Montgomery, Inc. Project) 10.50%, 9/1/2020 3,255,000 3,310,270 Sayre Health Care Facilities Authority, Revenue (Guthrie Health) 6.25%, 12/1/2015 2,000,000 2,206,500 RHODE ISLAND--.8% Providence, Special Tax Increment Obligation 6.65%, 6/1/2016 3,000,000 3,190,290 SOUTH CAROLINA--1.0% Tobacco Settlement Revenue Management Authority. Tobacco Settlement Revenue 6.375%, 5/15/2028 3,850,000 3,783,203 TENNESSEE--4.3% Knox County Health Educational and Housing Facilities Board. Hospital Facilities Revenue (East Tennessee Baptist Health Systems) 6.375%, 4/15/2022 5,500,000 5,621,825 Memphis Center Revenue Finance Corporation, Sports Facility Revenue (Memphis Redbirds) 6.50%, 9/1/2028 8,000,000 8,007,600 Shelby County Health Educational and Housing Facilities, Multi-Family Housing Board Revenue (Cameron Kirby) 7.25%, 7/1/2023 2,890,000 2,868,209 TEXAS--7.3% Alliance Airport Authority, Special Facilities Revenue (Federal Express Corp. Project) 6.375%, 4/1/2021 5,040,000 5,302,634 Dallas-Fort Worth International Airport Facility Improvement Corporation, Revenue (American Airlines, Inc.) 6.375%, 5/1/2035 2,400,000 648,000 Gulf Coast Waste Disposal Authority, Revenue (Waste Disposal--Valero Energy Corp.) 5.60%, 4/1/2032 6,000,000 5,331,120 Harris County Health Facilities Development Corporation, Revenue (St. Luke's Episcopal Hospital) 5.375%, 2/15/2026 2,000,000 1,994,560 Houston, Airport Systems Revenue: (Special Facilities--Continental Airline Improvement) 6.125%, 7/15/2027 1,000,000 501,290 (Special Facilities--Continental Airline Terminal) 6.75%, 7/1/2029 (Insured; MBIA) 4,000,000 2,155,240 Principal LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (CONTINUED) Texas Turnpike Authority, Central Texas Turnpike System Revenue 5.50%, 8/15/2039 (Insured; AMBAC) 9,000,000 9,428,760 Tyler Health Facilities Development Corporation, HR (Mother Frances Hospital) 5.625%, 7/1/2013 2,680,000 2,680,563 UTAH--1.7% Carbon County, SWDR: (Sunnyside Cogeneration--A) 7.10%, 8/15/2023 6,475,000 6,462,892 VIRGINIA--2.1% Virginia Housing Development Authority, Commonwealth Mortgage 5.80%, 1/1/2018 6,180,000 6,572,430 West Point Industrial Development Authority, SWDR (Chesapeake Corp.) 6.375%, 3/1/2019 2,000,000 1,661,860 WISCONSIN--2.7% Badger Tobacco Asset Securitization Corporation Tobacco Settlement Revenue 7%, 6/1/2028 10,000,000 10,333,700 WEST VIRGINIA--1.8% Upshur County, SWDR (TJ International Project) 7%, 7/15/2025 3,500,000 3,658,410 West Virginia Hospital Finance Authority, HR (Charleston Area Medical Center) 6%, 9/1/2012 3,030,000 3,350,120 U.S. RELATED--8.6% Commonwealth of Puerto Rico: 6.25%, 7/1/2013 (Insured; MBIA) 3,000,000 3,661,590 5.65%, 7/1/2015 (Insured; MBIA) 4,000,000 4,670,200 Public Improvement 5.25%, 7/1/2013 (Insured; MBIA) 6,000,000 6,804,720 Puerto Rico Public Finance Corporation 6%, 8/1/2026 12,000,000 13,848,840 Puerto Rico Telephone Authority, Revenue 8.796%, 1/25/2007 (Insured; MBIA, Prerefunded 1/1/2003) 3,950,000 (a,b) 4,114,749 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS (cost $372,058,747) 97.7% 376,532,776 CASH AND RECEIVABLES (NET) 2.3% 8,695,985 NET ASSETS 100.0% 385,228,761 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) Summary of Abbreviations AMBAC American Municipal Bond Assurance Corporation FGIC Financial Guaranty Insurance Company HR Hospital Revenue IDR Industrial Development Revenue LR Lease Revenue MBIA Municipal Bond Investors Assurance Insurance Corporation MFMR Multi-Family Mortgage Revenue PCR Pollution Control Revenue SWDR Solid Waste Disposal Revenue Summary of Combined Ratings (Unaudited) Fitch or Moody's or Standard & Poor's Value (%) - ------------------------------------------------------------------------------------------------------------------------------------ AAA Aaa AAA 42.4 AA Aa AA 11.8 A A A 13.2 BBB Baa BBB 17.4 BB Ba BB 3.2 B B B 1.6 CCC Caa CCC .1 CC Ca CC .1 Not Rated(d) Not Rated(d) Not Rated(d) 10.2 100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE EARLIEST REFUNDING DATE. (B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE PERIODICALLY. (C) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT OCTOBER 31, 2002, THESE SECURITIES AMOUNTED TO $36,177,513 OR 9.4% OF NET ASSETS. (D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S, HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED SECURITIES IN WHICH THE FUND MAY INVEST. SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF ASSETS AND LIABILITIES October 31, 2002 (Unaudited) Cost Value - -------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 372,058,747 376,532,776 Cash 5,957,920 Interest receivable 7,278,103 Receivable for investment securities sold 5,051,947 Receivable for shares of Beneficial Interest subscribed 164,451 Prepaid expenses 31,053 395,016,250 - -------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 299,091 Payable for investment securities purchased 9,070,055 Payable for shares of Beneficial Interest redeemed 312,849 Accrued expenses 105,494 9,787,489 - -------------------------------------------------------------------------------- NET ASSETS ($) 385,228,761 - -------------------------------------------------------------------------------- COMPOSITION IF NET ASSETS ($): Paid-in capital 412,078,415 Accumulated undistributed investment income-net 114,967 Accumulated net realized gain (loss) on investments (31,438,650) Accumulated net unrealized appreciation (depreciation) on investments 4,474,029 - -------------------------------------------------------------------------------- NET ASSETS ($) 385,228,761
NET ASSET VALUE PER SHARE Class A Class B Class C - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets ($) 328,055,576 43,167,955 14,005,230 Shares Outstanding 25,446,529 3,347,564 1,084,675 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE PER SHARE ($) 12.89 12.90 12.91 SEE NOTES TO FINANCIAL STATEMENTS.
The Fund STATEMENT OF OPERATIONS Six Months Ended October 31, 2002 (Unaudited) - -------------------------------------------------------------------------------- INVESTMENT INCOME ($): INTEREST INCOME 12,417,949 EXPENSES: Management fee--Note 3(a) 1,158,727 Shareholder servicing costs--Note 3(c) 653,774 Distribution fees--Note 3(b) 157,402 Registration fees 28,089 Custodian fees 26,768 Professional fees 21,338 Prospectus and shareholders' reports 17,743 Trustees' fees and expenses--Note 3(d) 4,104 Loan commitment fees--Note 2 1,668 Miscellaneous 11,508 TOTAL EXPENSES 2,081,121 INVESTMENT INCOME-NET 10,336,828 - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments 210,898 Net unrealized appreciation (depreciation) on investments (2,256,710) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (2,045,812) NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 8,291,016 SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF CHANGES IN NET ASSETS Six Months Ended October 31, 2002 Year Ended (Unaudited) April 30, 2002 - -------------------------------------------------------------------------------- OPERATIONS ($): Investment income-net 10,336,828 21,178,845 Net realized gain (loss) on investments 210,898 (5,373,179) Net unrealized appreciation (depreciation) on investments (2,256,710) 734,517 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 8,291,016 16,540,183 - -------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): Investment income-net: Class A shares (9,056,664) (18,710,976) Class B shares (984,134) (2,161,336) Class C shares (260,920) (249,451) TOTAL DIVIDENDS (10,301,718) (21,121,763) - -------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS ($): Net proceeds from shares sold: Class A shares 148,783,147 340,387,516 Class B shares 5,319,107 13,593,354 Class C shares 5,973,005 7,358,813 Dividends reinvested: Class A shares 4,744,446 10,070,982 Class B shares 505,406 1,093,466 Class C shares 152,706 145,893 Cost of shares redeemed: Class A shares (185,665,376) (334,112,802) Class B shares (5,433,252) (18,088,421) Class C shares (1,476,800) (1,935,376) INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS (27,097,611) 18,513,425 TOTAL INCREASE (DECREASE) IN NET ASSETS (29,108,313) 13,931,845 - -------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 414,337,074 400,405,229 END OF PERIOD 385,228,761 414,337,074 Undistributed investment income--net 114,967 -- SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS (CONTINUED) Six Months Ended October 31, 2002 Year Ended (Unaudited) April 30, 2002 - -------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS: CLASS A(A) Shares sold 11,345,705 26,025,843 Shares issued for dividends reinvested 361,539 766,918 Shares redeemed (14,113,924) (25,526,222) NET INCREASE (DECREASE) IN SHARES OUTSTANDING (2,406,680) 1,266,539 - -------------------------------------------------------------------------------- CLASS B(A) Shares sold 404,691 1,030,757 Shares issued for dividends reinvested 38,503 83,220 Shares redeemed (412,959) (1,374,429) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 30,235 (260,452) - -------------------------------------------------------------------------------- CLASS C Shares sold 453,055 562,403 Shares issued for dividends reinvested 11,618 11,151 Shares redeemed (113,741) (146,370) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 350,932 427,184 (A) DURING THE PERIOD ENDED OCTOBER 31, 2002, 127,899 CLASS B SHARES REPRESENTING $1,680,656 WERE AUTOMATICALLY CONVERTED TO 127,899 CLASS A SHARES AND DURING THE PERIOD ENDED APRIL 30, 2002, 589,771 CLASS B SHARES REPRESENTING $7,810,947 WERE AUTOMATICALLY CONVERTED TO 589,912 CLASS A SHARES. SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund's financial statements. Six Months Ended October 31, 2002 Year Ended April 30, ---------------------------------------------------------------------- CLASS A SHARES (Unaudited) 2002(a) 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE DATA ($): Net asset value, beginning of period 12.99 13.14 12.75 14.33 14.69 14.11 Investment Operations: Investment income-net .33(b) .68(b) .66 .70 .72 .79 Net realized and unrealized gain (loss) on investments (.10) (.15) .39 (1.42) (.15) .66 Total from Investment Operations .23 .53 1.05 (.72) .57 1.45 Distributions: Dividends from investment income--net (.33) (.68) (.66) (.70) (.72) (.79) Dividends from net realized gain on investments -- -- -- (.16) (.21) (.08) Total Distributions (.33) (.68) (.66) (.86) (.93) (.87) Net asset value, end of period 12.89 12.99 13.14 12.75 14.33 14.69 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN (%) (C) 1.74(d) 4.13 8.42 (5.01) 3.96 10.52 - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .91(e) .92 .98 .93 .91 .91 Ratio of net investment income to average net assets 4.98(e) 5.20 5.09 5.28 4.96 5.42 Portfolio Turnover Rate 54.30(d) 49.90 58.03 70.39 46.84 26.33 - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets, end of period ($ x 1,000) 328,056 361,701 349,345 361,567 432,276 447,869
(A) AS REQUIRED, EFFECTIVE MAY 1, 2001, THE FUND HAS ADOPTED THE PROVISIONS OF THE AICPA AUDIT AND ACCOUNTING GUIDE FOR INVESTMENT COMPANIES AND BEGAN AMORTIZING DISCOUNT OR PREMIUM ON A SCIENTIFIC BASIS FOR DEBT SECURITIES ON A DAILY BASIS. THE EFFECT OF THIS CHANGE FOR THE PERIOD ENDED APRIL 30, 2002 WAS TO INCREASE NET INVESTMENT INCOME PER SHARE AND DECREASE NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS PER SHARE BY LESS THAN $.01 AND INCREASE THE RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS FROM 5.19% TO 5.20%. PER SHARE DATA AND RATIOS/SUPPLEMENTAL DATA FOR PERIODS PRIOR TO MAY 1, 2001 HAVE NOT BEEN RESTATED TO REFLECT THIS CHANGE IN PRESENTATION. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED. (E) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS (CONTINUED) Six Months Ended October 31, 2002 Year Ended April 30, ---------------------------------------------------------------------- CLASS B SHARES (Unaudited) 2002(a) 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE DATA ($): Net asset value, beginning of period 12.99 13.14 12.76 14.33 14.69 14.11 Investment Operations: Investment income--net .30(b) .61(b) .60 .63 .65 .72 Net realized and unrealized gain (loss) on investments (.09) (.15) .38 (1.41) (.15) .66 Total from Investment Operations .21 .46 .98 (.78) .50 1.38 Distributions: Dividends from investment income--net (.30) (.61) (.60) (.63) (.65) (.72) Dividends from net realized gain on investments -- -- -- (.16) (.21) (.08) Total Distributions (.30) (.61) (.60) (.79) (.86) (.80) Net asset value, end of period 12.90 12.99 13.14 12.76 14.33 14.69 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN (%) (C) 1.56(d) 3.60 7.93 (5.51) 3.43 9.95 - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets 1.42(e) 1.43 1.49 1.45 1.42 1.42 Ratio of net investment income to average net assets 4.47(e) 4.69 4.63 4.71 4.44 4.89 Portfolio Turnover Rate 54.30(d) 49.90 58.03 70.39 46.84 26.33 - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets, end of period ($ x 1,000) 43,168 43,092 47,026 52,979 112,583 119,457
(A) AS REQUIRED, EFFECTIVE MAY 1, 2001, THE FUND HAS ADOPTED THE PROVISIONS OF THE AICPA AUDIT AND ACCOUNTING GUIDE FOR INVESTMENT COMPANIES AND BEGAN AMORTIZING DISCOUNT OR PREMIUM ON A SCIENTIFIC BASIS FOR DEBT SECURITIES ON A DAILY BASIS. THE EFFECT OF THIS CHANGE FOR THE PERIOD ENDED APRIL 30, 2002 WAS TO INCREASE NET INVESTMENT INCOME PER SHARE AND DECREASE NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS PER SHARE BY LESS THAN $.01 AND INCREASE THE RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS FROM 4.68% TO 4.69%. PER SHARE DATA AND RATIOS/SUPPLEMENTAL DATA FOR PERIODS PRIOR TO MAY 1, 2001 HAVE NOT BEEN RESTATED TO REFLECT THIS CHANGE IN PRESENTATION. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED. (E) ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended October 31, 2002 Year Ended April 30, ------------------------------------------------------------------ CLASS C SHARES (Unaudited) 2002(a) 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE DATA ($): Net asset value, beginning of period 13.01 13.16 12.77 14.35 14.71 14.12 Investment Operations: Investment income--net .28(b) .57(b) .57 .60 .61 .68 Net realized and unrealized gain (loss) on investments (.10) (.14) .39 (1.42) (.15) .67 Total from Investment Operations .18 .43 .96 (.82) .46 1.35 Distributions: Dividends from investment income--net (.28) (.58) (.57) (.60) (.61) (.68) Dividends from net realized gain on investments -- -- -- (.16) (.21) (.08) Total Distributions (.28) (.58) (.57) (.76) (.82) (.76) Net asset value, end of period 12.91 13.01 13.16 12.77 14.35 14.71 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN (%) (C) 1.36(d) 3.35 7.63 (5.71) 3.16 9.73 - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets 1.64(e) 1.66 1.72 1.68 1.67 1.69 Ratio of net investment income to average net assets 4.18(e) 4.45 4.36 4.52 4.11 4.55 Portfolio Turnover Rate 54.30(d) 49.90 58.03 70.39 46.84 26.33 Net Assets, end of period ($ x 1,000) 14,005 9,544 4,035 4,424 8,095 3,019
(A) AS REQUIRED, EFFECTIVE MAY 1, 2001, THE FUND HAS ADOPTED THE PROVISIONS OF THE AICPA AUDIT AND ACCOUNTING GUIDE FOR INVESTMENT COMPANIES AND BEGAN AMORTIZING DISCOUNT OR PREMIUM ON A SCIENTIFIC BASIS FOR DEBT SECURITIES ON A DAILY BASIS. THE EFFECT OF THIS CHANGE FOR THE PERIOD ENDED APRIL 30, 2002 WAS TO INCREASE NET INVESTMENT INCOME PER SHARE AND DECREASE NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS PER SHARE BY LESS THAN $.01 AND INCREASE THE RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS FROM 4.42% TO 4.45%. PER SHARE DATA AND RATIOS/SUPPLEMENTAL DATA FOR PERIODS PRIOR TO MAY 1, 2001 HAVE NOT BEEN RESTATED TO REFLECT THIS CHANGE IN PRESENTATION. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) EXCLUSIVE OF SALES CHARGE. (D) NOT ANNUALIZED. (E) ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS. The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1--Significant Accounting Policies: Dreyfus Premier Municipal Bond Fund (the "fund" ) is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified open-end management investment company. The fund's investment objective is to maximize current income exempt from federal income tax to the extent consistent with the preservation of capital. The Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A, which is a wholly-owned subsidiary of Mellon Financial Corporation Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of the Manager, is the distributor of the fund's shares. The fund is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Class A, Class B and Class C. Class A shares are subject to a sales charge imposed at the time of purchase, Class B shares are subject to a contingent deferred sales charge ("CDSC") imposed on Class B share redemptions made within six years of purchase and Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase. Class B shares automatically convert to Class A shares after six years.Other differences between the classes include the services offered to and the expenses borne by each class and certain voting rights. The fund' s financial statements are prepared in accordance with accounting principles generally accepted in the United States, 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. (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 premium and discount 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 $5,719 during the period ended October 31, 2002 based on available cash balances left on deposit. Income earned under this arrangement is included in interest income. (C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the fund to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gain, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the " Code" ). To the extent that net realized capital gain can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gain. The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) (D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as a regulated investment company, which can distribute tax exempt dividends, by complying with the applicable provisions of the Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes. The fund has an unused capital loss carryover of $25,491,614 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to April 30, 2002. If not applied, $11,182,708 of the carryover expires in fiscal 2008, $9,553,959 expires in fiscal 2009 and $4,754,947 expires in fiscal 2010. The tax character of distributions paid to shareholders during the fiscal year ended April 30, 2002 was as follows: tax exempt income $21,121,763. The tax character of current year distributions will be determined at the end of the current fiscal year. 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 based on prevailing market rates in effect at the time of borrowings. During the period ended October 31, 2002, 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 .55 of 1% of the value of the fund's average daily net assets and is payable monthly. During the period ended October 31, 2002, the Distributor retained $18,130 from commissions earned on sales of the fund' s Class A shares, and $45,040 and $3,862 from contingent deferred sales charges on redemptions of the fund's Class B and C shares, respectively. (B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1 under the Act, Class B and Class C shares pay the Distributor for distributing their shares at an annual rate of .50 of 1% of the value of the average daily net assets of Class B shares and .75 of 1% of the value of the average daily net assets of Class C shares. During the period ended October 31, 2002, Class B and Class C shares were charged $110,382 and $47,020, respectively, pursuant to the Plan. (C) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay the Distributor at an annual rate of .25 of 1% of the value of the average daily net assets of their shares for the provision of certain services. 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. The Distributor may make payments to Service Agents (a securities dealer, financial institution or other industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended October 31, 2002 Class A, Class B and Class C shares were charged $455,830, $55,191 and $15,673, respectively, 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 October 31, 2002, the fund was charged $92,689 pursuant to the transfer agency agreement. (D) Each Board member also serves as a Board member of other funds within the Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not an "affiliated person" as defined in the Act receives an annual fee of $50,000 and an attendance fee of $6,500 for each in person meeting and $500 for telephone meetings.These fees The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) are allocated among the funds in the Fund Group. The Chairman of the Board receives an additional 25% of such compensation. Subject to the fund's Emeritus Program Guidelines, Emeritus Board members, if any, receive 50% of the annual retainer fee and per meeting fee paid at the time the Board member achieves emeritus status. NOTE 4--Securities Transactions: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended October 31, 2002, amounted to $220,756,360 and $243,408,378, respectively. At October 31, 2002, accumulated net unrealized appreciation on investments was $4,474,029, consisting of $22,113,819 gross unrealized appreciation and $17,639,790 gross unrealized depreciation. At October 31, 2002, 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). For More Information Dreyfus Premier 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. 200 Park Avenue New York, NY 10166 Distributor Dreyfus Service Corporation 200 Park Avenue New York, NY 10166 To obtain information: BY TELEPHONE Call your financial representative or 1-800-554-4611 BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss Boulevard Uniondale, NY 11556-0144 (c) 2002 Dreyfus Service Corporation 022SA1002 -----END PRIVACY-ENHANCED MESSAGE-----