N-30D 1 pn30d-763.txt ANNUAL REPORT Dreyfus Stock Index Fund ANNUAL REPORT December 31, 2001 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 Chairman 3 Discussion of Fund Performance 6 Fund Performance 8 Statement of Investments 23 Statement of Financial Futures 24 Statement of Assets and Liabilities 25 Statement of Operations 26 Statement of Changes in Net Assets 28 Financial Highlights 30 Notes to Financial Statements 36 Report of Independent Accountants 37 Important Tax Information 38 Board Members Information 39 Officers of the Fund FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Stock Index Fund LETTER FROM THE CHAIRMAN Dear Shareholder: We present this annual report for Dreyfus Stock Index Fund, covering the 12-month period from January 1, 2001 through December 31, 2001. Inside, you'll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio managers, Steven Falci and Thomas Durante. 2001 was a difficult year for the U.S. and global economies. It was a year in which one of America' s longest periods of economic expansion came to an end, derailed by widespread credit concerns, dramatically lower levels of corporate spending and the September 11 terrorist attacks. It was also a year in which the large-cap sector of the U.S. stock market posted its second consecutive year of negative returns, led lower by persistent declines among technology and telecommunications stocks. The past year also reminded investors of the importance of some fundamental principles of investing. The merit of a long-term perspective was validated when stocks rallied in the fourth quarter, rewarding those investors who held onto companies with sound business fundamentals and bright prospects. The importance of diversification was underscored by the bond market's strong returns, which helped cushion the equity market's decline for investors who allocated their investments among different asset classes. Perhaps most significant, 2001 affirmed the value of objective advice from an experienced financial advisor who understands your current needs, long-term goals and attitude toward risk. As challenging as 2001 was, we believe better times are ahead in 2002. Signs of economic recovery have emerged, and the equity markets have recently rallied in response to renewed investor optimism. While we can't guarantee that these encouraging trends will continue, we do believe that the straightest path to financial security in any market environment is one that includes a long-term perspective, broad diversification and professional advice from a trusted advisor. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation January 15, 2002 DISCUSSION OF FUND PERFORMANCE Steven Falci and Thomas Durante, Portfolio Managers How did Dreyfus Stock Index Fund perform relative to its benchmark? For the 12-month period ended December 31, 2001, Dreyfus Stock Index Fund produced total returns of -12.18% for its Initial shares and -12.46% for its Service shares.(1) In contrast, the fund's benchmark, the Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index"), produced a total return of -11.87% for the same period.(2) The difference in returns is primarily due to transaction costs and other fund operating expenses. What is the fund's investment approach? The fund seeks to match the total return of the S&P 500 Index. To pursue this goal, the fund generally invests in all 500 stocks in the S&P 500 Index in proportion to their weightings in the Index. Often considered a barometer for the domestic stock market in general, the S&P 500 Index is made up of 500 widely held common stocks and is dominated by large-cap, blue chip stocks which, when combined, cover nearly 75% of total U.S. market capitalization. However, it is important to note that the S&P 500 Index is not composed of the 500 largest companies; rather, it is designed to capture the returns of many different sectors of the U.S. economy. Accordingly, it is composed of approximately 375 industrial, 40 utility, 75 financial and 10 transportation stocks. Each stock is weighted by its market capitalization. Overall, larger companies have greater representation in the S&P 500 Index than smaller ones. The fund may also use stock index futures as a substitute for the sale or purchase of stocks. Dreyfus Stock Index Fund uses a passive management approach -- all investment decisions are made based on the fund's objective, which is to seek to match the performance of the S& P 500 Index. The fund does not attempt to manage market volatility. The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) What other factors influenced the fund's performance? The most significant factor contributing to the fund and market's negative returns was the U.S. economic slowdown, which resulted in steep declines for almost all industry groups within the S&P 500 Index. Technology stocks, which comprise approximately 19% of the S& P 500 Index and the fund, were hit particularly hard, especially during the first half of 2001. The combination of dramatically reduced demand for their products and services, inflated inventory levels and high debt levels caused earnings to fall dramatically. While some technology stocks recovered strongly in the fourth calendar quarter, it was not enough to offset earlier losses. Energy stocks were among the most volatile of 2001. High energy prices caused many energy-related stocks to soar early in the year. Later in the year, however, reduced demand for energy in a weakening economy caused oil and gas prices -- and many energy-related stocks -- to fall sharply, more than offsetting previous gains. Existing economic weakness was intensified on September 11, when the terrorist attacks effectively pushed the U.S. economy into recession and caused the suspension of stock market trading for several days. When the markets reopened, stocks fell sharply to their lowest levels of the year. However, the attacks' adverse effects were short-lived and, within weeks, the stock market regained all of the value lost immediately after the attacks. Some groups, including defense- and security-related stocks, responded particularly positively to the post-attack environment. However, other market areas, most notably airlines, continued to suffer. In the fourth quarter of 2001, the S&P 500 Index rallied strongly. Early signs of potential economic recovery caused investor sentiment to improve, the rate of job losses began to taper off and manufacturing activity began to increase. What's more, by the end of the reporting period many homeowners had refinanced their mortgages at lower rates, freeing up cash for other purposes. Many spent some of that extra money on home improvement projects, resulting in enhanced returns for consumer stocks, particularly homebuilding companies and discount retailers. What is the fund's current strategy? Because the fund is an index fund, it seeks to provide broadly diversified exposure to the large capitalization U.S. equity market by attempting to replicate the returns of the S&P 500 Index. Accordingly, we intend to maintain our strategy of investing in all 500 stocks in the S&P 500 Index in proportion to their weighting in the Index. We believe that a diverse portfolio of stocks across a broad range of industry groups has proven to be one of the most reliable ways for investors to build wealth, especially for those individuals who can focus on a long-term investment horizon. January 15, 2002 (1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. (2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS DAILY AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE. The Fund FUND PERFORMANCE Comparison of change in value of $10,000 investment in Dreyfus Stock Index Fund Initial shares and Service shares and the Standard & Poor's 500 Composite Stock Price Index -------------------------------------------------------------------------------- Average Annual Total Returns AS OF 12/31/01 1 Year 5 Years 10 Years ------------------------------------------------------------------------------------------------------------------------------------ INITIAL SHARES (12.18)% 10.37% 12.49% SERVICE SHARES (12.46)% 10.30% 12.45% THE DATA FOR SERVICE SHARES PRIMARILY REPRESENTS THE RESULTS OF INITIAL SHARES. ACTUAL SERVICE SHARES' AVERAGE ANNUAL TOTAL RETURN AND HYPOTHETICAL GROWTH RESULTS WOULD HAVE BEEN LOWER. SEE NOTES BELOW. ((+)) SOURCE: LIPPER INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH INVESTING IN VARIABLE INSURANCE CONTRACTS WHICH WILL REDUCE RETURNS. THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN INITIAL AND SERVICE SHARES OF DREYFUS STOCK INDEX FUND ON 12/31/91 TO A $10,000 INVESTMENT MADE IN THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX (THE "INDEX") ON THAT DATE. THE PORTFOLIO'S INITIAL SHARES ARE NOT SUBJECT TO A RULE 12B-1 FEE. THE PORTFOLIO'S SERVICE SHARES ARE SUBJECT TO A 0.25% ANNUAL RULE 12B-1 FEE. THE PERFORMANCE FIGURES FOR SERVICE SHARES REFLECT THE PERFORMANCE OF THE PORTFOLIO'S INITIAL SHARES FROM THEIR INCEPTION DATE THROUGH DECEMBER 30, 2000, AND THE PERFORMANCE OF THE PORTFOLIO'S SERVICE SHARES FROM DECEMBER 31, 2000 (INCEPTION DATE OF SERVICE SHARES) TO DECEMBER 31, 2001 (BLENDED PERFORMANCE FIGURES). THE PERFORMANCE FIGURES FOR EACH SHARE CLASS REFLECT CERTAIN EXPENSE REIMBURSEMENTS, WITHOUT WHICH, THE PERFORMANCE OF EACH SHARE CLASS WOULD HAVE BEEN LOWER. IN ADDITION, THE BLENDED PERFORMANCE FIGURES HAVE NOT BEEN ADJUSTED TO REFLECT THE HIGHER OPERATING EXPENSES OF THE SERVICE SHARES. IF THESE EXPENSES HAD BEEN REFLECTED, THE BLENDED PERFORMANCE FIGURES WOULD HAVE BEEN LOWER. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. THE PORTFOLIO'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE PORTFOLIO FEES AND EXPENSES (AFTER ANY EXPENSE REIMBURSEMENTS). THE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE THAT INCLUDES THE REINVESTMENT OF DIVIDENDS DAILY. THE INDEX DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT The Fund STATEMENT OF INVESTMENTS December 31, 2001 COMMON STOCKS--98.0% Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------------- ALCOHOL & TOBACCO--1.4% Adolph Coors, Cl. B 14,900 795,660 Anheuser-Busch Cos. 365,600 16,528,776 Brown-Forman, Cl. B 28,200 1,765,320 Philip Morris Cos. 895,900 41,077,015 UST 68,400 2,394,000 62,560,771 CONSUMER CYCLICAL--9.5% AMR 63,900 (a) 1,416,663 Albertson's 167,877 5,286,447 AutoZone 44,600 (a) 3,202,280 Bed Bath & Beyond 119,900 (a) 4,064,610 Best Buy 87,200 (a) 6,494,656 Big Lots 47,100 489,840 Black & Decker 33,000 1,245,090 Brunswick 36,200 787,712 CVS 161,600 4,783,360 Circuit City Stores-Circuit City Group 86,100 2,234,295 Cooper Tire & Rubber 29,900 477,204 Costco Wholesale 187,000 (a) 8,299,060 Dana 61,206 849,539 Darden Restaurants 48,200 1,706,280 Delphi Automotive Systems 231,703 3,165,063 Delta Air Lines 51,000 1,492,260 Dillard's, Cl. A 34,600 553,600 Dollar General 136,737 2,037,381 Eastman Kodak 120,300 3,540,429 Family Dollar Stores 71,300 2,137,574 Federated Department Stores 79,700 (a) 3,259,730 Ford Motor 748,830 11,771,608 Gap 356,600 4,971,004 General Motors 229,700 11,163,420 Harley-Davidson 125,200 6,799,612 Harrah's Entertainment 46,400 (a) 1,717,264 Hasbro 71,475 1,160,039 Hilton Hotels 152,700 1,667,484 Home Depot 969,000 49,428,690 International Game Technology 36,700 (a) 2,506,610 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------ CONSUMER CYCLICAL (CONTINUED) J.C. Penney 109,100 2,934,790 Johnson Controls 36,100 2,915,075 Jones Apparel Group 51,900 (a) 1,721,523 Kmart 206,100 (a) 1,125,306 Kohl's 138,500 (a) 9,755,940 Kroger 332,200 (a) 6,933,014 Limited 177,200 2,608,384 Liz Claiborne 21,800 1,084,550 Lowe's Cos. 320,200 14,860,482 Marriott International, Cl. A 99,600 4,048,740 Mattel 178,500 3,070,200 May Department Stores 123,750 4,576,275 Maytag 31,700 983,651 McDonald's 531,500 14,068,805 NIKE, Cl. B 111,100 6,248,264 Navistar International 24,600 971,700 Nordstrom 55,600 1,124,788 Office Depot 126,900 (a) 2,352,726 PACCAR 31,700 2,080,154 RadioShack 74,100 2,230,410 Reebok International 24,400 (a) 646,600 Safeway 207,500 (a) 8,663,125 Sears, Roebuck & Co. 133,400 6,355,176 Southwest Airlines 316,425 5,847,534 Staples 190,850 (a) 3,568,895 Starbucks 157,700 (a) 3,004,185 Starwood Hotels & Resorts Worldwide 81,800 2,441,730 TJX Cos. 112,800 4,496,208 Target 373,300 15,323,965 Tiffany & Co. 60,400 1,900,788 Toys R Us 82,100 (a) 1,702,754 Tricon Global Restaurants 60,260 (a) 2,964,792 US Airways Group 27,800 (a) 176,252 V.F. 45,900 1,790,559 Visteon 53,925 811,032 Wal-Mart Stores 1,843,000 106,064,650 Walgreen 421,800 14,197,788 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICAL (CONTINUED) Wendy's International 43,200 1,260,144 Whirlpool 27,700 2,031,241 Winn-Dixie Stores 58,100 827,925 418,478,924 CONSUMER STAPLES--5.9% Alberto-Culver, Cl. B 23,500 1,051,390 Archer-Daniels-Midland 273,437 3,923,821 Avon Products 97,700 4,543,050 Campbell Soup 169,400 5,059,978 Clorox 96,200 3,804,710 Coca-Cola 1,028,300 48,484,345 Coca-Cola Enterprises 183,900 3,483,066 Colgate-Palmolive 228,100 13,172,775 ConAgra Foods 222,200 5,281,694 Fortune Brands 61,400 2,430,826 General Mills 150,600 7,832,706 Gillette 436,400 14,575,760 H.J. Heinz 144,800 5,954,176 Hershey Foods 56,100 3,797,970 International Flavors & Fragrances 39,200 1,164,632 Kellogg 168,100 5,059,810 Kimberly-Clark 217,200 12,988,560 Newell Rubbermaid 110,271 3,040,171 Pepsi Bottling Group 117,400 2,758,900 PepsiCo 723,420 35,223,320 Procter & Gamble 535,700 42,389,941 SUPERVALU 55,100 1,218,812 SYSCO 275,600 7,226,232 Sara Lee 323,900 7,200,297 Tupperware 24,000 462,000 Unilever, N.V. (New York Shares) 236,389 13,618,370 Wm. Wrigley Jr. 93,100 4,782,547 260,529,859 ENERGY--6.9% Amerada Hess 36,700 2,293,750 Anadarko Petroleum 102,851 5,847,079 Apache 56,650 2,825,702 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------ ENERGY (CONTINUED) Baker Hughes 138,920 5,066,412 Burlington Resources 82,990 3,115,445 CMS Energy 55,000 1,321,650 ChevronTexaco 441,069 39,524,193 Conoco 258,635 7,319,371 Devon Energy 52,100 2,013,665 EOG Resources 47,800 1,869,458 El Paso 211,006 9,412,978 Exxon Mobil 2,828,538 111,161,542 Halliburton 177,500 2,325,250 Kerr-McGee 41,458 2,271,898 KeySpan 57,500 1,992,375 Kinder Morgan 46,200 2,572,878 McDermott International 25,400 (a) 311,658 Nabors Industries 58,200 (a) 1,998,006 Nicor 18,500 770,340 NiSource 85,500 1,971,630 Noble Drilling 54,700 (a) 1,861,988 Occidental Petroleum 154,500 4,098,885 Peoples Energy 14,600 553,778 Phillips Petroleum 157,660 9,500,592 Public Service Enterprise Group 85,800 3,619,902 Rowan Cos. 38,800 (a) 751,556 Royal Dutch Petroleum (New York Shares) 878,300 43,054,266 Schlumberger 238,100 13,083,595 Sempra Energy 85,691 2,103,714 Sunoco 32,500 1,213,550 Transocean Sedco Forex 131,800 4,457,476 USX-Marathon Group 127,900 3,837,000 Unocal 100,900 3,639,463 Williams Cos. 213,100 5,438,312 303,199,357 HEALTH CARE--13.9% Abbott Laboratories 641,900 35,785,925 Allergan 54,200 4,067,710 American Home Products 545,500 33,471,880 AmerisourceBergen 42,500 2,700,875 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------- HEALTH CARE (CONTINUED) Amgen 432,300 (a) 24,399,012 Applera - Applied Biosystems Group 87,600 3,440,052 Bausch & Lomb 22,200 836,052 Baxter International 244,100 13,091,083 Becton, Dickinson & Co. 106,900 3,543,735 Biogen 61,200 (a) 3,509,820 Biomet 111,500 3,445,350 Boston Scientific 166,800 (a) 4,023,216 Bristol-Myers Squibb 800,100 40,805,100 C.R. Bard 21,100 1,360,950 Cardinal Health 186,425 12,054,241 Chiron 78,200 (a) 3,428,288 Eli Lilly & Co. 464,900 36,513,246 Forest Laboratories 73,600 (a) 6,031,520 Genzyme 87,700 (a) 5,249,722 Guidant 126,000 (a) 6,274,800 HCA-Healthcare 212,950 8,207,093 HEALTHSOUTH 162,200 (a) 2,403,804 Health Management Associates, Cl. A 101,400 (a) 1,865,760 Humana 69,800 (a) 822,942 Immunex 225,200 (a) 6,240,292 Johnson & Johnson 1,268,360 74,960,075 King Pharmaceuticals 101,600 (a) 4,280,408 Manor Care 42,300 (a) 1,002,933 Mckesson HBOC 118,246 4,422,400 MedImmune 88,500 (a) 4,101,975 Medtronic 500,600 25,635,726 Merck & Co. 940,600 55,307,280 Millipore 19,700 1,195,790 Pfizer 2,599,575 103,593,063 Pharmacia 533,157 22,739,146 Schering-Plough 605,400 21,679,374 St. Jude Medical 36,000 (a) 2,795,400 Stryker 81,300 4,745,481 Tenet Healthcare 134,600 (a) 7,903,712 Thermo Electron 73,500 (a) 1,753,710 UnitedHealth Group 128,900 9,122,253 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (CONTINUED) Watson Pharmaceuticals 44,000 (a) 1,381,160 Wellpoint Health Networks 26,400 (a) 3,084,840 Zimmer 80,170 (a) 2,448,392 615,725,586 INTEREST SENSITIVE--21.7% AFLAC 215,900 5,302,504 Aetna 59,299 1,956,274 Allstate 294,800 9,934,760 Ambac Financial Group 43,600 2,522,696 American Express 551,700 19,690,173 American International Group 1,080,289 85,774,946 AmSouth Bancorporation 150,650 2,847,285 Aon 111,325 3,954,264 BB&T 187,300 6,763,403 Bank of America 650,546 40,951,871 Bank of New York 304,500 12,423,600 Bank One 482,110 18,826,396 Bear Stearns Cos. 38,927 2,282,679 CIGNA 59,800 5,540,470 Capital One Financial 88,800 4,790,760 Cendant 405,848 (a) 7,958,679 Charles Schwab 565,075 8,741,710 Charter One Financial 92,900 2,522,235 Chubb 70,200 4,843,800 Cincinnati Financial 66,800 2,548,420 Citigroup 2,127,422 107,392,262 Comerica 73,600 4,217,280 Concord EFS 208,300 (a) 6,828,074 Conseco 142,501 (a) 635,554 Countrywide Credit Industries 50,500 2,068,985 Equity Office Properties Trust 171,300 5,152,704 Equity Residential Properties Trust 112,000 3,215,520 Fannie Mae 413,100 32,841,450 Fifth Third Bancorp 238,972 14,715,896 FleetBoston Financial 432,098 15,771,577 Franklin Resources 107,800 3,802,106 Freddie Mac 287,400 18,795,960 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------ INTEREST SENSITIVE (CONTINUED) General Electric 4,105,000 164,528,400 Golden West Financial 65,200 3,837,020 H & R Block 75,900 3,392,730 Hartford Financial Services Group 101,400 6,370,962 Household International 189,225 10,963,697 Huntington Bancshares 103,858 1,785,319 J.P. Morgan Chase & Co. 815,880 29,657,238 Jefferson-Pilot 62,225 2,879,151 John Hancock Financial Services 123,500 5,100,550 Keycorp 175,100 4,261,934 Lehman Brothers Holdings 98,500 6,579,800 Lincoln National 78,300 3,803,031 Loews 79,200 4,386,096 MBIA 61,350 3,290,201 MBNA 352,187 12,396,982 MGIC Investment 44,300 2,734,196 Marsh & McLennan Cos. 113,550 12,200,948 Mellon Financial 193,400 7,275,708 Merrill Lynch 350,000 18,242,000 MetLife 299,700 9,494,496 Morgan Stanley Dean Witter & Co. 453,534 25,370,692 National City 250,600 7,327,544 Northern Trust 91,800 5,528,196 PNC Financial Services Group 117,500 6,603,500 Progressive 30,300 4,523,790 Providian Financial 117,500 417,125 Regions Financial 93,900 2,820,756 Safeco 52,700 1,641,605 SouthTrust 141,700 3,495,739 St. Paul Cos. 85,790 3,772,186 State Street 134,500 7,027,625 Stilwell Financial 91,500 2,490,630 SunTrust Banks 119,400 7,486,380 Synovus Financial 120,500 3,018,525 T. Rowe Price Group 51,100 1,774,703 Temple-Inland 20,400 1,157,292 Torchmark 51,300 2,017,629 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------ INTEREST SENSITIVE (CONTINUED) U.S. Bancorp 806,679 16,883,791 USA Education 64,800 5,444,496 Union Planters 56,800 2,563,384 UnumProvident 100,044 2,652,166 Wachovia 562,690 17,645,958 Washington Mutual 362,063 11,839,460 Wells Fargo 701,000 30,458,450 XL Capital, Cl. A 54,900 5,015,664 Zions Bancorporation 37,900 1,992,782 959,764,820 INTERNET--.1% Yahoo! 235,500 (a) 4,177,770 PRODUCER GOODS & SERVICES--7.8% Air Products & Chemicals 94,000 4,409,540 Alcan 132,700 4,767,911 Alcoa 351,164 12,483,880 Allegheny Technologies 33,066 553,856 American Power Conversion 80,900 (a) 1,169,814 Ashland 28,500 1,313,280 Avery Dennison 45,400 2,566,462 Ball 11,300 798,910 Barrick Gold 221,658 3,535,445 Bemis 21,800 1,072,124 Boeing 346,324 13,430,445 Boise Cascade 24,000 816,240 Burlington Northern Santa Fe 159,900 4,561,947 CSX 88,100 3,087,905 Caterpillar 141,900 7,414,275 Centex 25,100 1,432,959 Cooper Industries 38,700 1,351,404 Crane 24,675 632,667 Cummins 17,100 659,034 Deere & Co. 97,100 4,239,386 Dow Chemical 372,976 12,599,129 E.I. duPont deNemours & Co. 423,932 18,021,349 Eastman Chemical 31,900 1,244,738 Ecolab 52,900 2,129,225 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------- PRODUCER GOODS & SERVICES (CONTINUED) Emerson Electric 177,000 10,106,700 Engelhard 53,700 1,486,416 FedEx 123,240 (a) 6,393,691 Fluor 33,100 1,237,940 Freeport-McMoRan Copper, Cl. B 59,500 (a) 796,705 General Dynamics 83,400 6,641,976 Genuine Parts 71,650 2,629,555 Georgia-Pacific 94,972 2,622,177 Goodrich 42,200 1,123,364 Goodyear Tire & Rubber 67,500 1,607,175 Great Lakes Chemical 20,700 502,596 Hercules 44,800 (a) 448,000 Honeywell International 336,212 11,370,690 ITT Industries 36,600 1,848,300 Illinois Tool Works 126,000 8,532,720 Inco 75,200 (a) 1,273,888 Ingersoll-Rand 69,450 2,903,705 International Paper 199,283 8,041,069 KB HOME 20,800 834,080 Leggett & Platt 81,200 1,867,600 Lockheed Martin 182,200 8,503,274 Louisiana-Pacific 43,300 365,452 Masco 189,700 4,647,650 Mead 41,100 1,269,579 Minnesota Mining & Manufacturing 162,100 19,161,841 Newmont Mining 81,019 1,548,273 Norfolk Southern 159,400 2,921,802 Northrop Grumman 45,700 4,607,017 Nucor 32,200 1,705,312 PPG Industries 69,600 3,599,712 Pactiv 65,900 (a) 1,169,725 Pall 50,501 1,215,054 Parker-Hannifin 48,450 2,224,340 Phelps Dodge 32,433 1,050,829 Placer Dome 135,800 1,481,578 Praxair 66,500 3,674,125 Pulte Homes 24,400 1,089,948 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------ PRODUCER GOODS & SERVICES (CONTINUED) Raytheon 161,600 5,247,152 Rockwell Collins 75,900 1,480,050 Rockwell International 76,000 1,357,360 Rohm & Haas 91,106 3,155,001 Sealed Air 34,612 (a) 1,412,862 Sherwin-Williams 63,900 1,757,250 Sigma-Aldrich 30,300 1,194,123 Snap-On 23,950 806,157 Stanley Works 35,300 1,643,921 TRW 52,200 1,933,488 Textron 58,400 2,421,264 Thomas & Betts 24,000 507,600 Tyco International 825,023 48,593,855 USX-U.S. Steel Group 36,900 668,259 Union Pacific 102,700 5,853,900 United Technologies 193,700 12,518,831 Vulcan Materials 41,900 2,008,686 W.W. Grainger 38,700 1,857,600 Waters 53,200 (a) 2,061,500 Westvaco 42,300 1,203,435 Weyerhaeuser 89,400 4,834,752 Willamette Industries 45,400 2,366,248 Worthington Industries 35,200 499,840 342,178,917 SERVICES--6.8% ALLTEL 128,400 7,926,132 AOL Time Warner 1,830,400 (a) 58,755,840 AT&T Wireless Services 1,046,303 (a) 15,035,374 Allied Waste Industries 81,400 (a) 1,144,484 American Greetings, Cl. A 26,200 361,036 Automatic Data Processing 255,000 15,019,500 Carnival 242,400 6,806,592 Cintas 70,200 3,396,978 Clear Channel Communications 247,100 (a) 12,579,861 Comcast, Cl. A 390,700 (a) 14,065,200 Computer Sciences 70,400 (a) 3,448,192 Convergys 71,200 (a) 2,669,288 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ----------------------------------------------------------------------------------------------------------------------------- SERVICES (CONTINUED) Deluxe 27,400 1,139,292 Dow Jones & Co. 35,100 1,921,023 Electronic Data Systems 196,000 13,435,800 Equifax 59,900 1,446,585 First Data 157,800 12,379,410 Fiserv 77,350 (a) 3,273,452 Gannett 109,500 7,361,685 IMS Health 122,200 2,384,122 Interpublic Group Cos. 156,200 4,614,148 Knight-Ridder 34,800 2,259,564 McGraw-Hill Cos. 79,900 4,872,302 Meredith 20,400 727,260 Moody's 64,500 2,570,970 New York Times, Cl. A 62,700 2,711,775 Nextel Communications, Cl. A 330,100 (a) 3,617,896 Omnicom Group 76,800 6,862,080 Paychex 154,725 5,421,564 Quintiles Transnational 49,500 (a) 795,960 R.R. Donnelley & Sons 47,300 1,404,337 Robert Half International 72,400 (a) 1,933,080 Ryder System 25,000 553,750 Sprint (PCS Group) 407,600 (a) 9,949,516 TMP Worldwide 45,700 (a) 1,960,530 Tribune 123,200 4,611,376 Univision Communications, Cl. A 86,900 (a) 3,515,974 Viacom, Cl. B 733,308 (a) 32,375,548 Walt Disney 843,000 17,466,960 Waste Management 259,572 8,282,943 301,057,379 TECHNOLOGY--17.1% ADC Telecommunications 326,500 (a) 1,501,900 Adobe Systems 98,100 3,046,005 Advanced Micro Devices 140,500 (a) 2,228,330 Agilent Technologies 190,450 (a) 5,429,730 Altera 159,300 (a) 3,380,346 Analog Devices 149,600 (a) 6,640,744 Andrew 33,650 (a) 736,599 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------ TECHNOLOGY (CONTINUED) Apple Computer 145,100 (a) 3,177,690 Applied Materials 337,500 (a) 13,533,750 Applied Micro Circuits 123,400 (a) 1,396,888 Autodesk 22,700 846,029 Avaya 118,670 (a) 1,441,841 BMC Software 101,000 (a) 1,653,370 Broadcom, Cl. A 108,500 (a) 4,446,330 CIENA 135,300 (a) 1,936,143 Cisco Systems 3,033,000 (a) 54,927,630 Citrix Systems 77,600 (a) 1,758,416 Compaq Computer 700,472 6,836,607 Computer Associates International 238,125 8,212,931 Compuware 153,800 (a) 1,813,302 Comverse Technology 76,700 (a) 1,715,779 Conexant Systems 105,400 1,513,544 Corning 391,100 3,488,612 Danaher 59,100 3,564,321 Dell Computer 1,079,200 (a) 29,332,656 Dover 83,700 3,102,759 EMC 916,100 (a) 12,312,384 Eaton 28,700 2,135,567 Gateway 133,600 (a) 1,074,144 Hewlett-Packard 802,200 16,477,188 Intel 2,775,400 87,286,330 International Business Machines 712,300 86,159,808 Intuit 87,700 (a) 3,750,052 JDS Uniphase 549,000 (a) 4,792,770 Jabil Circuit 81,500 (a) 1,851,680 KLA-Tencor 76,600 (a) 3,796,296 LSI Logic 151,700 (a) 2,393,826 Lexmark International 53,800 (a) 3,174,200 Linear Technology 130,900 5,110,336 Lucent Technologies 1,411,747 8,879,889 Maxim Integrated Products 133,500 7,010,085 Mercury Interactive 34,200 (a) 1,162,116 Micron Technology 247,800 (a) 7,681,800 Microsoft 2,227,000 (a) 147,583,290 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------ TECHNOLOGY (CONTINUED) Molex 80,875 2,503,081 Motorola 920,306 13,822,996 NCR 40,200 (a) 1,481,772 NVIDIA 59,800 (a) 4,000,620 National Semiconductor 72,700 (a) 2,238,433 Network Appliance 136,900 (a) 2,994,003 Nortel Networks 1,323,480 9,926,100 Novell 149,800 (a) 687,582 Novellus Systems 59,300 (a) 2,339,385 Oracle 2,299,700 (a) 31,758,857 PMC-Sierra 68,300 (a) 1,452,058 Palm 234,019 (a) 907,994 Parametric Technology 108,600 (a) 848,166 PeopleSoft 125,200 (a) 5,033,040 PerkinElmer 50,900 1,782,518 Pitney Bowes 100,800 3,791,088 Power-One 32,700 (a) 340,407 QLogic 38,300 (a) 1,704,733 QUALCOMM 316,100 (a) 15,963,050 Sabre Holdings 55,199 (a) 2,337,678 Sanmina 215,400 (a) 4,286,460 Sapient 52,200 (a) 402,984 Scientific-Atlanta 64,600 1,546,524 Siebel Systems 191,200 (a) 5,349,776 Solectron 339,300 (a) 3,827,304 Sun Microsystems 1,340,400 (a) 16,540,536 Symbol Technologies 94,400 1,499,072 Tektronix 38,000 (a) 979,640 Tellabs 169,500 (a) 2,547,585 Teradyne 74,800 (a) 2,254,472 Texas Instruments 716,300 20,056,400 Unisys 131,900 (a) 1,654,026 VERITAS Software 165,783 (a) 7,430,394 Vitesse Semiconductor 78,800 (a) 981,848 Xerox 297,700 3,102,034 Xilinx 138,100 (a) 5,392,805 754,059,434 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------- UTILITIES--6.9% AES 220,400 (a) 3,603,540 AT&T 1,462,976 26,538,385 Allegheny Energy 51,700 1,872,574 Ameren 56,900 2,406,870 American Electric Power 133,260 5,800,808 BellSouth 776,100 29,608,215 CINergy 65,800 2,199,694 Calpine 126,200 (a) 2,118,898 CenturyTel 58,350 1,913,880 Citizens Communications 115,800 (a) 1,234,428 Consolidated Edison 87,800 3,543,608 Constellation Energy Group 67,600 1,794,780 DTE Energy 67,300 2,822,562 Dominion Resources 108,793 6,538,459 Duke Energy 320,918 12,599,241 Dynegy, Cl. A 145,100 3,700,050 Edison International 134,700 2,033,970 Entergy 91,400 3,574,654 Exelon 132,650 6,351,282 FPL Group 72,700 4,100,280 FirstEnergy 123,036 4,303,799 Mirant 165,632 (a) 2,653,425 Niagara Mohawk Power 66,300 (a) 1,175,499 PG&E 160,100 3,080,324 PPL 60,600 2,111,910 Pinnacle West Capital 35,000 1,464,750 Progress Energy 90,426 4,071,883 Qwest Communications International 688,437 9,727,615 Reliant Energy 123,239 3,268,298 SBC Communications 1,389,962 54,444,812 Southern 287,400 7,285,590 Sprint (FON Group) 366,800 7,365,344 TECO Energy 57,700 1,514,048 TXU 109,630 5,169,055 Verizon Communications 1,122,410 53,269,579 WorldCom Group 1,219,554 (a) 17,171,320 The Fund STATEMENT OF INVESTMENTS (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------- UTILITIES (CONTINUED) Xcel Energy 142,900 3,964,046 306,397,475 TOTAL COMMON STOCKS (cost $3,900,630,920) 4,328,130,292 ------------------------------------------------------------------------------------------------------------------------------------ Principal SHORT-TERM INVESTMENTS--2.2% Amount ($) Value ($) ------------------------------------------------------------------------------------------------------------------------------------ REPURCHASE AGREEMENT--2.1% Greenwich Capital Markets, Tri-Party Repurchase Agreement, 1.65%, dated 12/31/2001, due 1/2/2002 in the amount of $91,978,431 (fully collateralized by $89,322,000 of various U.S. Government Agency Obligations, value $93,811,127) 91,970,000 91,970,000 U.S. TREASURY BILLS--.1% 2.16%, 1/10/2002 500,000 (b) 499,820 2.21%, 1/17/2002 1,000,000 (b) 999,320 1.91%, 1/31/2002 4,000,000 (b) 3,994,840 1.63%, 2/7/2002 1,000,000 (b) 998,390 6,492,370 TOTAL SHORT-TERM INVESTMENTS (cost $98,460,715) 98,462,370 ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS (cost $3,999,091,635) 100.2% 4,426,592,662 LIABILITIES, LESS CASH AND RECEIVABLES (.2%) (7,954,139) NET ASSETS 100.0% 4,418,638,523 (A) NON-INCOME PRODUCING. (B) PARTIALLY HELD BY THE BROKER IN A SEGREGATED ACCOUNT AS COLLATERAL FOR OPEN FINANCIAL FUTURES POSITIONS. SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF FINANCIAL FUTURES December 31, 2001 Market Value Unrealized Covered by Appreciation Contracts Contracts ($) Expiration at 12/31/2001 ($) ------------------------------------------------------------------------------------------------------------------------------------ FINANCIAL FUTURES LONG Standard & Poor's 500 350 100,555,000 March 2002 1,198,713 SEE NOTES TO FINANCIAL STATEMENTS.
The Fund STATEMENT OF ASSETS AND LIABILITIES December 31, 2001 Cost Value -------------------------------------------------------------------------------- ASSETS ($): Investments in securities-- See Statement of Investments--Note 1(b) 3,999,091,635 4,426,592,662 Cash 1,987,003 Dividends and interest receivable 4,395,551 Receivable for investment securities sold 767,667 Receivable for shares of Common Stock subscribed 717,907 Prepaid expenses 55,918 4,434,516,708 -------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 925,906 Payable for shares of Common Stock redeemed 11,346,544 Payable for investment securities purchased 2,523,368 Payable for futures variation margin--Note 4 910,572 Accrued expenses 171,795 15,878,185 -------------------------------------------------------------------------------- NET ASSETS ($) 4,418,638,523 -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 4,025,739,199 Accumulated undistributed investment income--net 607,665 Accumulated net realized gain (loss) on investments and financial futures (36,408,081) Accumulated net unrealized appreciation (depreciation) on investments (including $1,198,713 net unrealized appreciation on financial futures) 428,699,740 -------------------------------------------------------------------------------- NET ASSETS ($) 4,418,638,523 NET ASSET VALUE PER SHARE Initial Shares Service Shares -------------------------------------------------------------------------------- Net Assets ($) 4,392,177,854 26,460,669 Shares Outstanding 149,585,194 902,192 -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE ($) 29.36 29.33 SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF OPERATIONS Year Ended December 31, 2001 -------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $278,352 foreign taxes withheld at source) 59,899,651 Interest 2,831,311 TOTAL INCOME 62,730,962 EXPENSES: Management fee--Note 3(a) 11,347,699 Prospectus and shareholders' reports 248,051 Directors' fees and expenses--Note 3(d) 116,288 Professional fees 84,093 Loan commitment fees--Note 2 71,089 Shareholder servicing costs (Initial Shares)--Note 3(c) 43,299 Distribution fees (Service Shares)--Note 3(b) 25,482 Registration fees 6,475 Miscellaneous 126,252 TOTAL EXPENSES 12,068,728 INVESTMENT INCOME--NET 50,662,234 -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments 13,159,660 Net realized gain (loss) on financial futures (19,010,453) NET REALIZED GAIN (LOSS) (5,850,793) Net unrealized appreciation (depreciation) on investments (including $3,956,443 net unrealized appreciation on financial futures) (684,896,895) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (690,747,688) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (640,085,454) SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS Year Ended December 31, ------------------------------------- 2001 2000(a) -------------------------------------------------------------------------------- OPERATIONS ($): Investment income--net 50,662,234 50,558,831 Net realized gain (loss) on investments (5,850,793) 80,354,312 Net unrealized appreciation (depreciation) on investments (684,896,895) (649,453,754) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (640,085,454) (518,540,611) -------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): Investment income--net: Initial shares (50,538,356) (50,548,602) Service shares (123,696) -- Net realized gain on investments: Initial shares (23,226,545) (83,423,621) Service shares (135,166) -- TOTAL DIVIDENDS (74,023,763) (133,972,223) -------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold: Initial shares 975,956,345 1,497,873,041 Service shares 28,389,753 500 Dividends reinvested: Initial shares 73,764,901 133,972,223 Service shares 258,862 -- Cost of shares redeemed: Initial shares (1,078,261,283) (1,074,843,967) Service shares (1,556,104) -- INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS (1,447,526) 557,001,797 TOTAL INCREASE (DECREASE) IN NET ASSETS (715,556,743) (95,511,037) -------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 5,134,195,266 5,229,706,303 END OF PERIOD 4,418,638,523 5,134,195,266 Undistributed investment income--net 607,665 656,576 Year Ended December 31, ------------------------------------ 2001 2000(a) -------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS: INITIAL SHARES Shares sold 31,813,295 39,948,205 Shares issued for dividends reinvested 2,520,503 3,774,732 Shares redeemed (35,768,506) (28,714,921) NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,434,708) 15,008,016 -------------------------------------------------------------------------------- SERVICE SHARES Shares sold 944,339 15 Shares issued for dividends reinvested 8,900 -- Shares redeemed (51,061) -- NET INCREASE (DECREASE) IN SHARES OUTSTANDING 902,178 15 (A) EFFECTIVE DECEMBER 31, 2000, SHARES OF THE FUND WERE REDESIGNATED AS INITIAL SHARES AND THE FUND COMMENCED SELLING SERVICE SHARES. SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund's financial statements. Year Ended December 31, -------------------------------------------------------------------------- INITIAL SHARES 2001 2000 1999 1998 1997 ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE DATA ($): Net asset value, beginning of period 34.00 38.45 32.52 25.75 20.28 Investment Operations: Investment income--net .34(a) .35(a) .40(a) .37 .37 Net realized and unrealized gain (loss) on investments (4.48) (3.88) 6.24 6.85 6.26 Total from Investment Operations (4.14) (3.53) 6.64 7.22 6.63 Distributions: Dividends from investment income--net (.34) (.35) (.38) (.38) (.37) Dividends from net realized gain on investments (.16) (.57) (.33) (.07) (.79) Total Distributions (.50) (.92) (.71) (.45) (1.16) Net asset value, end of period 29.36 34.00 38.45 32.52 25.75 ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN (%) (12.18) (9.28) 20.60 28.21 32.96 ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .26 .26 .26 .26 .28 Ratio of net investment income to average net assets 1.09 .95 1.13 1.35 1.66 Portfolio Turnover Rate 4.03 4.97 2.64 2.40 3.53 ------------------------------------------------------------------------------------------------------------------------------------ Net Assets, end of period ($ x 1,000) 4,392,178 5,134,195 5,229,706 3,440,542 1,868,672 (A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended December 31, --------------------------- SERVICE SHARES 2001 2000(a) -------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 34.00 34.00 Investment Operations: Investment income--net .24(b) -- Net realized and unrealized gain (loss) on investments (4.48) -- Total from Investment Operations (4.24) -- Distributions: Dividends from investment income--net (.27) -- Dividends from net realized gain on investments (.16) -- Total Distributions (.43) -- Net asset value, end of period 29.33 34.00 -------------------------------------------------------------------------------- TOTAL RETURN (%) (12.46) -- -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .57 -- Ratio of net investment income to average net assets .83 -- Portfolio Turnover Rate 4.03 4.97 -------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 26,461 1 (A) THE FUND COMMENCED OFFERING SERVICE SHARES ON DECEMBER 31, 2000. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. SEE NOTES TO FINANCIAL STATEMENTS. The Fund NOTES TO FINANCIAL STATEMENTS NOTE 1--Significant Accounting Policies: Dreyfus Stock Index 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, that is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies to be offered by the separate accounts of life insurance companies. The fund's investment objective is to provide investment results that correspond to the price and yield performance of publicly traded common stocks as represented by the Standard and Poor's 500 Composite Stock Price Index. The Dreyfus Corporation ("Dreyfus") serves as the fund's manager and Mellon Equity Associates ("Mellon Equity"), an affiliate of Dreyfus, serves as the fund's index manager. Dreyfus 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 Dreyfus, is the distributor of the fund's shares, which are sold without a sales charge. The fund is authorized to issue 400 million shares of $.001 par value Common Stock in each of the following classes of shares: Initial shares (250 million shares authorized) and Service shares (150 million shares authorized). Initial shares are subject to a shareholder services fee and Service shares are subject to a distribution fee. Each class of shares has identical rights and privileges, except with respect to the distribution plan and shareholder services plan 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 of America, which may require the use of management estimates and assumptions. Actual results could differ from those estimates. (A) PORTFOLIO VALUATION: Investments in securities (including financial futures) 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. Securities 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. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Directors. (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. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount and premium on investments, is recognized on the accrual basis. The fund may enter into repurchase agreements with financial institutions, deemed to be creditworthy by Dreyfus, subject to the seller's agreement to repurchase and the fund' s agreement to resell such securities at a mutually agreed upon price. Securities purchased subject to repurchase agreements are deposited with the fund's custodian and, pursuant to the terms of the repurchase agreement, must have an aggregate market value greater than or equal to the repurchase price plus accrued interest at all times. If the value of the underlying securities falls below the value of the repurchase price plus accrued interest, the fund will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults on its repurchase obligation, the fund maintains the right to sell the underlying securities at market value and may claim any resulting loss against the seller. (C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net are declared and paid on a quarterly basis. 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, it is the policy of the fund not to distribute such gain. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) (D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. At December 31, 2001, the cost of investments for Federal income tax purposes was $4,010,259,180; accordingly, accumulated net unrealized appreciation on investments was $416,333,482, consisting of $1,003,066,557 gross unrealized appreciation and $586,733,075 gross unrealized depreciation. The difference between book basis and tax basis unrealized appreciation is attributed primarily to the deferral of losses on wash sales and the realization for tax purposes of unrealized gains on futures contracts. At December 31, 2001 the components of accumulated earnings on a tax basis were as follows, undistributed ordinary income $607,665 and unrealized appreciation of $416,333,482. In addition, the fund had $24,041,823 of capital losses realized after October 31, 2001 which were deferred for tax purposes to the first day of the following fiscal year. The tax character of distributions paid to shareholders during the fiscal periods ended December 31, 2001 and December 31, 2000, respectively, were as follows: ordinary income $50,662,052 and $53,634,434 and long-term capital gains $23,361,711 and $80,337,789. During the period ended December 31, 2001, as a result of permanent book to tax differences, the fund decreased accumulated undistributed investment income-net by $49,093, increased accumulated net realized gain (loss) on investments by $45,782 and increased paid-in capital by $3,311. Net assets were not affected by this reclassification. 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 commit ment 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 December 31, 2001, the fund did not borrow under the Facility. NOTE 3--Management Fee, Index Management Fee and Other Transactions With Affiliates: (A) Pursuant to a Management Agreement with Dreyfus, the management fee is computed at the annual rate of .245 of 1% of the value of the fund's average daily net assets, and is payable monthly. Dreyfus has agreed to pay Mellon Equity, a monthly index-management fee at the annual rate of .095 of 1% of the value of the fund' s average daily net assets. Dreyfus has undertaken from January 1, 2001 until such time as they give shareholders at least 180 days notice to the contrary that if any full fiscal year the fund's aggregate expenses exclusive of brokerage commissions, Rule 12b-1 fees, transaction fees and extraordinary expenses, exceed an annual rate of .40 of 1% of the fund's average daily net assets, the fund may deduct from the payments to be made to Dreyfus, or Dreyfus will bear, such excess expense. During the period ended December 31, 2001, there was no expense reimbursement pursuant to the undertaking. (B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing their shares, for servicing and/or maintaining Service shares shareholder accounts and for advertising and marketing for Service shares. The Plan provides payments to be made at an annual rate of .25 of 1% of the value of the Service shares average daily net assets. The Distributor may make payments to Participating Insurance Companies and brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Plan are payable without regard to actual expenses incurred. During the period ended December 31, 2001, Service shares were charged $25,482 pursuant to the Plan. The Fund NOTES TO FINANCIAL STATEMENTS (CONTINUED) (C) Under the Shareholder Services Plan, Initial shares reimburses the Distributor an amount not to exceed an annual rate of .25 of 1% of the value of the Initial shares' average daily net assets for certain allocated expenses with respect to servicing and/or maintaining Initial shares shareholder accounts. During the period ended December 31, 2001, Initial shares were charged $32,434 pursuant to the Shareholder Services Plan. The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended December 31, 2001, the fund was charged $1,737 pursuant to the transfer agency agreement. (D) Each Board member also serves 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 $25,000 and an attendance fee of $4,000 for each in person meeting and $500 for telephone meetings. These fees 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 and financial futures, during the period ended December 31, 2001, amounted to $184,189,362 and $221,378,044, respectively. The fund may invest in financial futures contracts in order to gain exposure to or protect against changes in the market. The fund is exposed to market risk as a result of changes in the value of the underlying financial instruments. Investments in financial futures require the fund to "mark to market" on a daily basis, which reflects the change in the market value of the contract at the close of each day's trading. Typically, variation margin payments are received or made to reflect daily unrealized gains or losses. When the contracts are closed, the fund recognizes a realized gain or loss. These investments require initial margin deposits with a broker, which consist of cash or cash equivalents, up to approximately 10% of the contract amount. The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change. Contracts open at December 31, 2001 are set forth in the Statement of Financial Futures. The Fund REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Dreyfus Stock Index Fund In our opinion, the accompanying statement of assets and liabilities, including the statements of investments and financial futures, and the related statements of operations and of changes in net assets and financial highlights present fairly, in all material respects the financial position of Dreyfus Stock Index Fund (the "Fund" ) at December 31, 2001, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements" ) are the responsibility of the Fund' s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities owned at December 31, 2001 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP New York, New York January 25, 2002 IMPORTANT TAX INFORMATION (Unaudited) For Federal Tax purposes, the fund hereby designates $.1502 per share as a long-term capital gain distribution paid on December 31, 2001 and also designates $.0060 per share as a long-term capital gain distribution paid on March 30, 2001. The fund also designates 100% of the ordinary dividends paid during the fiscal year ended December 31, 2001 as qualifying for the corporate dividends received deduction. The Fund BOARD MEMBERS INFORMATION (Unaudited) No. of Portfolios Name (age) Principal Occupation Other Directorships for which Board Position, (held since) During Past 5 Years And Affiliations Member Serves ----------------------------------------------------------------------------------------------------------------------------------- Joseph S. DiMartino (58) Chairman of the Board o The Muscular Dystrophy Association 190 Chairman of the of various Funds in The o Plan Vista Corporation (formerly Board (1995) Dreyfus Family of Funds HealthPlan Services Corporation), a provider of marketing, administrative and risk management services to health and other benefit programs o Carlyle Industries, Inc., button packager and distributor o Century Business Services, Inc., a provider of various outsourcing functions for small and medium size companies o The Newark Group, a privately held company providing a national network of paper recovery facilities, paperboard mills and paperboard converting plants o QuikCAT.com, Inc., a private company engaged in the development of high speed movement, routing, storage and encryption of data David P. Feldman (62) o AT&T Investment o 59 Wall Street Mutual 54 Board Member (1989) Management Corporation, Funds Group, (11 Funds) Chairman and Chief o The Jeffrey Company, a private investment company Executive Officer (Retired May 1997). Ehud Houminer (61) o Professor and o Avnet Inc., an electronics distributor 21 Board Member (1996) Executive-in-Residence o Super Sol Limited, an Israeli supermarket chain at the Columbia Business School, Columbia University. o Principal of Lear, Yavitz and Associates, a management consulting firm Gloria Messinger (72) o Corporate Director and o Member of the Board of Directors of the Yale Law 14 Board Member (1996) Trustee. School Fund and Theater for a New Audience, Inc. John Szarkowski (76) o Consultant in Photography o Director Emeritus of Photography at The Museum 14 Board Member (1991) of Modern Art Anne Wexler (71) o Chairman of the Wexler o Wilshire Mutual Funds (5 Funds) 28 Board Member (1991) Group, consultants specializing in government o Comcast Corporation, a relations and public telecommunications company affairs o The New England Electric System o Member of the Council of Foreign Relations and National Park Foundation
ONCE ELECTED ALL BOARD MEMBERS SERVE FOR AN INDEFINITE TERM. ADDITIONAL INFORMATION ABOUT THE BOARD MEMBERS, INCLUDING THEIR ADDRESS IS AVAILABLE IN THE FUND'S STATEMENT OF ADDITIONAL INFORMATION WHICH CAN BE OBTAINED FROM DREYFUS FREE OF CHARGE BY CALLING THIS TOLL FREE NUMBER: 1-800-554-4611 JOHN M. FRASER, JR., EMERITUS BOARD MEMBER OFFICERS OF THE FUND (Unaudited) STEPHEN E. CANTER, PRESIDENT SINCE MARCH 2000. Chairman of the Board, Chief Executive Officer and Chief Operating Officer of Dreyfus, and an officer of 92 investment companies (comprised of 183 portfolios) managed by Dreyfus. Mr. Canter also is a Director and Executive Committee Member of the other investment management subsidiaries of Mellon Financial Corporation, each of which is an affiliate of Dreyfus. He is 56 years old , and has been an employee of Dreyfus since May 1995. MARK N. JACOBS, EXECUTIVE VICE PRESIDENT SINCE MARCH 2000. Executive Vice President, Secretary and General Counsel of Dreyfus, and an officer of 93 investment companies (comprised of 196 portfolios) managed by Dreyfus. He is 55 years old, and has been an employee of Dreyfus since June 1977. MICHAEL A. ROSENBERG, SECRETARY SINCE MARCH 2000. Associate General Counsel of Dreyfus, and an officer of 93 investment companies (comprised of 196 portfolios) managed by Dreyfus. He is 42 years old, and has been an employee of Dreyfus since October 1991. STEVEN F. NEWMAN, ASSISTANT SECRETARY SINCE MARCH 2000. Associate General Counsel and Assistant Secretary of Dreyfus, and an officer of 93 investment companies (comprised of 196 portfolios) managed by Dreyfus. He is 52 years old, and has been an employee of Dreyfus since July 1980. JAMES WINDELS, TREASURER SINCE NOVEMBER 2001. Director of Mutual Fund Treasury Accounting of Dreyfus, and an officer of 93 investment companies (comprised of 196 portfolios) managed by Dreyfus. He is 43 years old, and has been an employee of Dreyfus since April 1985. KENNETH J. SANDGREN, ASSISTANT TREASURER SINCE NOVEMBER 2001. Mutual Funds Tax Director of Dreyfus, and an officer of 93 investment companies (comprised of 196 portfolios) managed by Dreyfus. He is 47 years old, and has been an employee of Dreyfus since June 1993. The Fund NOTES For More Information Dreyfus Stock Index Fund 200 Park Avenue New York, NY 10166 Manager The Dreyfus Corporation 200 Park Avenue New York, NY 10166 Index Fund Manager Mellon Equity Associates 500 Grant Street Pittsburgh, PA 15258 Custodian Boston Safe Deposit and Trust Company One Boston Place Boston, MA 02109 Transfer Agent & Dividend Disbursing Agent Dreyfus Transfer, Inc. P.O. Box 9263 Boston, MA 02205-8501 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 763AR1201