N-30D 1 pn30d-763.txt SEMI-ANNUAL REPORT Dreyfus Stock Index Fund SEMIANNUAL REPORT June 30, 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 21 Statement of Financial Futures 22 Statement of Assets and Liabilities 23 Statement of Operations 24 Statement of Changes in Net Assets 26 Financial Highlights 28 Notes to Financial Statements FOR MORE INFORMATION --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Stock Index Fund LETTER FROM THE CHAIRMAN Dear Shareholder: We present this semiannual report for Dreyfus Stock Index Fund, covering the six-month period from January 1, 2002 through June 30, 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 managers, Steven Falci and Thomas Durante. The U.S. stock market confronted a number of formidable challenges during the first half of 2002. In addition to lackluster corporate earnings and the ongoing war on terrorism, investors have recently contended with questions regarding the accuracy of certain companies' financial statements. These and other influences drove the Standard & Poor's 500 Composite Stock Price Index, a widely accepted benchmark of domestic large-cap stock performance, down during the first six months of the year. Nonetheless, we are generally optimistic about the future. The economy has begun to recover, showing signs of sustained growth that should have a positive effect on corporate earnings. Recent market declines may have created attractive values in some stocks. At the same time, we believe that today's accounting scandals will likely lead to higher standards and stronger oversight of corporate behavior, which should give investors greater confidence in the future. During turbulent times like these it is important to have an investment horizon that is measured in years, not weeks or months. Remember that over the long term, stocks have historically produced higher returns than other types of investments. For investors with a long-term perspective, stocks should continue to provide considerable potential for growth. As always, we urge you to talk with your financial advisor if you have questions or concerns about the markets or your investment portfolio. For our part, we at The Dreyfus Corporation are ready to serve you with a full range of investment alternatives and experienced teams of portfolio managers. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation July 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 six-month period ended June 30, 2002, Dreyfus Stock Index Fund produced total returns of -13.32% for its Initial shares and -13.42% 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 -13.16% 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 proportion to their weightings in the S& P 500 Index. Often considered a barometer for the 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 the 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 influencing the fund's performance was the deterioration of investor sentiment caused by anemic corporate earnings, a sharp decline in technology stocks and ongoing accounting concerns that have plagued many large-cap companies. When the reporting period began, most market analysts optimistically expected corporate earnings to improve, primarily because the economy had bounced back so quickly from the recession of late 2001. In fact, many analysts were predicting a full-blown recovery by mid-year 2002. A strong recovery never materialized, corporate sales growth had yet to improve and that generally resulted in flat corporate earnings. Perhaps most significant, many large companies have curtailed or postponed capital spending, especially on technology products. Instead, companies are trying to find new ways to achieve greater productivity from their existing computer equipment and software products. Another factor contributing to the stock market's woes was the highly publicized accounting scandals that began with the collapse of Enron Corp. During the reporting period, several of the S&P 500 Index and fund's holdings have come under intensified accounting scrutiny, and several have had to restate their earnings, resulting in sharp stock-price declines. On a related note, many large pharmaceutical companies also suffered steep stock-price declines during the reporting period. As corporations looked to offset lower earnings by cutting costs across the board, they have put tremendous pressure on drug companies to lower their prices or face being excluded by the companies' medical benefits packages. While most industry groups reported negative returns during the reporting period, a few areas posted positive returns. For instance, defense stocks performed relatively well, as did several large integrated oil companies. Consumer staples stocks, such as food and beverage companies and selected restaurants, also reported modest gains for the reporting period. What is the fund's current strategy? As always, the fund's strategy as a passive investment is to replicate the returns of the S& P 500 Index. With that said, the stock market has continued to weather the storm of accounting irregularities and allegations of corporate fraud. These difficulties, however, generally have masked several positive influences that could have the potential to drive the market higher. For example, both inflation and interest rates have remained low, which has continued to benefit consumers. And while it's impossible to know exactly when the Federal Reserve Board will raise interest rates, today's low borrowing costs have enabled consumers to purchase homes and buy products to furnish those homes, which has helped fuel the economic recovery. Toward the end of the reporting period, the U.S. dollar began to weaken significantly relative to other major currencies, such as the yen and euro. Because U.S. goods and services become less expensive in local currency terms for foreign buyers, a weaker dollar could help improve sales and earnings for many of the companies in the S&P 500 Index that earn a significant portion of their revenues from exports to overseas markets. July 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. PERFORMANCE FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS CORPORATION PURSUANT TO AN AGREEMENT IN WHICH SHAREHOLDERS ARE GIVEN AT LEAST 180 DAYS' NOTICE, AT WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT BEEN ABSORBED, THE FUND'S RETURNS WOULD HAVE BEEN LOWER. (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 STATEMENT OF INVESTMENTS June 30, 2002 (Unaudited) COMMON STOCKS--99.3% Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ ALCOHOL & TOBACCO--1.6% Adolph Coors, Cl. B 14,700 915,810 Anheuser-Busch Cos. 357,200 17,860,000 Brown-Forman, Cl. B 27,800 1,918,200 Philip Morris Cos. 871,900 38,084,592 UST 68,800 2,339,200 61,117,802 CONSUMER CYCLICAL--10.8% AMR 63,300 (a) 1,067,238 Albertson's 165,677 5,046,521 AutoZone 43,000 (a) 3,323,900 Bed Bath & Beyond 119,000 (a) 4,491,060 Best Buy 130,600 (a) 4,740,780 Big Lots 47,300 930,864 Brunswick 36,800 1,030,400 CVS 159,700 4,886,820 Cendant 425,048 (a) 6,749,762 Circuit City Stores- Circuit City Group 85,700 1,606,875 Cooper Tire & Rubber 29,900 614,445 Costco Wholesale 185,000 (a) 7,144,700 Dana 60,706 1,124,882 Darden Restaurants 70,700 1,746,290 Delphi Automotive Systems 229,003 3,022,840 Delta Air Lines 50,300 1,006,000 Dillard's, Cl. A 34,400 904,376 Dollar General 135,937 2,586,881 Eastman Kodak 119,000 3,471,230 Eaton 28,600 2,080,650 Family Dollar Stores 70,500 2,485,125 Federated Department Stores 82,100 (a) 3,259,370 Ford Motor 738,730 11,819,680 Gap 353,200 5,015,440 General Motors 228,600 12,218,670 Harley-Davidson 123,300 6,321,591 Harrah's Entertainment 46,800 (a) 2,075,580 Hasbro 70,675 958,353 Hilton Hotels 151,300 2,103,070 Home Depot 959,600 35,246,108 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER CYCLICAL (CONTINUED) International Game Technology 36,800 (a) 2,086,560 J. C. Penney 108,900 2,397,978 Johnson Controls 36,100 2,946,121 Jones Apparel Group 52,600 (a) 1,972,500 Kohl's 137,000 (a) 9,600,960 Kroger 323,600 (a) 6,439,640 Limited 211,400 4,502,820 Liz Claiborne 43,600 1,386,480 Lowe's Cos. 316,500 14,369,100 Marriott International, Cl. A 99,000 3,766,950 Mattel 177,800 3,748,024 May Department Stores 116,650 3,841,285 Maytag 31,700 1,352,005 McDonald's 518,300 14,745,635 NIKE, Cl. B 109,400 5,869,310 Navistar International 24,700 790,400 Nordstrom 55,000 1,245,750 Office Depot 125,900 (a) 2,115,120 PACCAR 47,300 2,099,647 RadioShack 71,000 2,134,260 Reebok International 24,300 (a) 716,850 Safeway 196,900 (a) 5,747,511 Sears, Roebuck & Co. 128,500 6,977,550 Southwest Airlines 314,425 5,081,108 Staples 190,550 (a) 3,753,835 Starbucks 157,300 (a) 3,908,905 Starwood Hotels & Resorts Worldwide 81,200 2,670,668 TJX Cos. 220,000 4,314,200 Target 369,500 14,077,950 Tiffany & Co. 59,500 2,094,400 Toys R Us 85,900 (a) 1,500,673 V. F. 45,000 1,764,450 Visteon 53,425 758,635 Wal-Mart Stores 1,812,600 99,711,126 Walgreen 417,000 16,108,710 Wendy's International 46,800 1,864,044 Whirlpool 27,700 1,810,472 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER CYCLICAL (CONTINUED) Winn-Dixie Stores 57,400 894,866 Yum! Brands 120,820 (a) 3,533,985 403,779,984 CONSUMER STAPLES--7.4% Alberto-Culver, Cl. B 23,600 1,128,080 Archer-Daniels-Midland 265,537 3,396,219 Avon Products 96,400 5,035,936 Campbell Soup 167,200 4,624,752 Clorox 93,900 3,882,765 Coca-Cola 1,012,100 56,677,600 Coca-Cola Enterprises 182,000 4,018,560 Colgate-Palmolive 223,000 11,161,150 ConAgra Foods 218,900 6,052,585 Fortune Brands 61,300 3,432,800 General Mills 149,300 6,581,144 Gillette 430,700 14,587,809 H. J. Heinz 142,800 5,869,080 Hershey Foods 55,600 3,475,000 International Flavors & Fragrances 38,500 1,250,865 Kellogg 166,700 5,977,862 Kimberly-Clark 211,400 13,106,800 Newell Rubbermaid 108,771 3,813,511 Pepsi Bottling Group 115,200 3,548,160 PepsiCo 720,520 34,729,064 Procter & Gamble 529,600 47,293,280 SUPERVALU 54,400 1,334,432 Sara Lee 319,700 6,598,608 Sysco 270,300 7,357,566 Tupperware 23,700 492,723 Unilever, N.V. (New York Shares) 232,889 15,091,207 Wm. Wrigley, Jr. 91,800 5,081,130 275,598,688 ENERGY--8.1% Amerada Hess 36,300 2,994,750 Anadarko Petroleum 101,151 4,986,744 Apache 58,650 3,371,202 BJ Services 63,800 (a) 2,161,544 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ ENERGY (CONTINUED) Baker Hughes 137,420 4,574,712 Burlington Resources 81,990 3,115,620 CMS Energy 55,000 603,900 ChevronTexaco 434,969 38,494,756 Conoco 255,335 7,098,313 Devon Energy 63,800 3,144,064 Dominion Resources 112,693 7,460,276 EOG Resources 47,400 1,881,780 El Paso 235,406 4,851,718 Exxon Mobil 2,763,738 113,092,159 Halliburton 177,500 2,829,350 Kerr-McGee 40,958 2,193,301 KeySpan 57,300 2,157,345 Kinder Morgan 49,900 1,897,198 Marathon Oil 126,200 3,422,544 McDermott International 25,700 (a) 208,170 Nabors Industries 58,700 (a) 2,063,305 Nicor 18,100 828,075 NiSource 84,700 1,849,001 Noble 54,900 (a) 2,119,140 Occidental Petroleum 152,800 4,582,472 Peoples Energy 14,500 528,670 Phillips Petroleum 155,960 9,182,925 Rowan Cos. 38,300 821,535 Royal Dutch Petroleum (New York Shares) 865,500 47,836,185 Schlumberger 235,200 10,936,800 Sempra Energy 83,891 1,856,508 Sunoco 31,100 1,108,093 Transocean Sedco Forex 130,100 4,052,615 Unocal 99,700 3,682,918 Williams Cos. 210,800 1,262,692 303,250,380 HEALTH CARE--13.4% Abbott Laboratories 636,000 23,945,400 Allergan 52,800 3,524,400 AmerisourceBergen 42,700 3,245,200 Amgen 423,400 (a) 17,731,992 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (CONTINUED) Applera--Applied Biosystems Group 86,700 1,689,783 Bausch & Lomb 22,000 744,700 Baxter International 244,900 10,885,805 Becton, Dickinson & Co. 105,300 3,627,585 Biogen 60,600 (a) 2,510,658 Biomet 109,400 2,966,928 Boston Scientific 165,400 (a) 4,849,528 Bristol-Myers Squibb 789,900 20,300,430 C.R. Bard 21,500 1,216,470 Cardinal Health 184,025 11,300,975 Chiron 77,400 (a) 2,732,220 Eli Lilly & Co. 458,100 25,836,840 Forest Laboratories 72,800 (a) 5,154,240 Genzyme 87,300 (a) 1,679,652 Guidant 124,700 (a) 3,769,681 HCA 209,450 9,948,875 HEALTHSOUTH 160,700 (a) 2,055,353 Health Management Associates, Cl. A 98,500 (a) 1,984,775 Humana 69,100 (a) 1,080,033 Immunex 225,000 (a) 5,026,500 Johnson & Johnson 1,227,060 64,126,156 King Pharmaceuticals 101,300 (a) 2,253,925 Manor Care 41,000 (a) 943,000 McKesson 117,146 3,830,674 MedImmune 102,100 (a) 2,695,440 Medtronic 494,700 21,197,895 Merck & Co. 923,100 46,745,784 Millipore 19,700 630,006 Pfizer 2,544,775 89,067,125 Pharmacia 526,957 19,734,540 Schering-Plough 597,500 14,698,500 St. Jude Medical 35,900 (a) 2,651,215 Stryker 80,400 4,302,204 Tenet Healthcare 132,800 (a) 9,501,840 Thermo Electron 70,400 (a) 1,161,600 UnitedHealth Group 125,500 11,489,525 Waters 53,600 (a) 1,431,120 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (CONTINUED) Watson Pharmaceuticals 43,500 (a) 1,099,245 WellPoint Health Networks 59,100 (a) 4,598,571 Wyeth 540,500 27,673,600 Zimmer Holdings 79,270 (a) 2,826,768 500,466,756 INTEREST SENSITIVE--23.2% ACE 107,100 3,384,360 AFLAC 211,100 6,755,200 Aetna 59,599 2,858,964 Allstate 289,100 10,690,918 Ambac Financial Group 43,200 2,903,040 American Express 542,000 19,685,440 American International Group 1,064,789 72,650,553 AmSouth Bancorporation 147,350 3,297,693 Aon 110,825 3,267,121 BB&T 195,300 7,538,580 Bank of America 627,246 44,133,028 Bank of New York 296,600 10,010,250 Bank One 478,310 18,405,369 Bear Stearns Cos. 40,627 2,486,372 CIGNA 57,400 5,591,908 Capital One Financial 89,600 5,470,080 Charles Schwab 558,775 6,258,280 Charter One Financial 91,600 3,149,208 Chubb 69,900 4,948,920 Cincinnati Financial 66,100 3,075,633 Citigroup 2,097,422 81,275,102 Comerica 71,800 4,408,520 Concord EFS 208,000 (a) 6,269,120 Conseco 140,601 (a) 281,202 Countrywide Credit Industries 50,500 2,436,625 Equity Office Properties Trust 169,900 5,113,990 Equity Residential Properties Trust 112,100 3,222,875 Fannie Mae 406,400 29,972,000 Fifth Third Bancorp 239,972 15,994,134 First Tennessee National 51,800 1,983,940 FleetBoston Financial 426,698 13,803,680 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ INTEREST SENSITIVE (CONTINUED) Franklin Resources 106,700 4,549,688 Freddie Mac 283,200 17,331,840 General Electric 4,049,700 117,643,785 Golden West Financial 63,100 4,340,018 H&R Block 74,900 3,456,635 Hartford Financial Services Group 100,800 5,994,576 Household International 186,025 9,245,443 Huntington Bancshares 100,958 1,960,604 J.P. Morgan Chase & Co. 811,380 27,522,010 Jefferson-Pilot 61,325 2,882,275 John Hancock Financial Services 120,000 4,224,000 Keycorp 173,600 4,739,280 Lehman Brothers Holdings 99,400 6,214,488 Lincoln National 76,200 3,200,400 Loews 77,000 4,134,900 MBIA 60,150 3,400,280 MBNA 347,087 11,478,167 MGIC Investment 43,100 2,922,180 Marsh & McLennan Cos. 111,550 10,775,730 Marshall & Ilsley 86,500 2,675,445 Mellon Financial 179,700 5,647,971 Merrill Lynch 351,500 14,235,750 MetLife 287,500 8,280,000 Morgan Stanley Dean Witter & Co. 448,934 19,340,077 National City 248,100 8,249,325 Northern Trust 90,300 3,978,618 PNC Financial Services Group 115,700 6,048,796 Progressive 89,600 5,183,360 Providian Financial 117,900 693,252 Regions Financial 93,500 3,286,525 SLM 63,300 6,133,770 Safeco 52,200 1,612,458 Simon Property Group 71,700 2,641,428 SouthTrust 141,300 3,690,756 St. Paul Cos. 84,890 3,303,919 State Street 132,500 5,922,750 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ INTEREST SENSITIVE (CONTINUED) Stilwell Financial 90,800 1,652,560 SunTrust Banks 116,600 7,896,152 Synovus Financial 120,300 3,310,656 T. Rowe Price Group 50,500 1,660,440 Torchmark 49,600 1,894,720 U.S. Bancorp 779,079 18,191,495 Union Planters 82,550 2,672,144 UnumProvident 98,944 2,518,125 Wachovia 557,690 21,292,604 Washington Mutual 397,063 14,735,008 Wells Fargo 697,100 34,896,826 XL Capital, Cl. A 55,200 4,675,440 Zions Bancorporation 37,500 1,953,750 865,612,524 INTERNET--.1% Yahoo! 243,600 (a) 3,595,536 PRODUCER GOODS & SERVICES--9.0% Air Products & Chemicals 92,600 4,673,522 Alcan 130,900 4,911,368 Alcoa 345,064 11,438,872 Allegheny Technologies 32,866 519,283 American Power Conversion 80,000 (a) 1,010,400 American Standard Companies 29,600 (a) 2,222,960 Ashland 28,300 1,146,150 Avery Dennison 44,800 2,811,200 Ball 23,200 962,336 Barrick Gold 220,458 4,186,497 Bemis 21,600 1,026,000 Black & Decker 32,800 1,580,960 Boeing 341,824 15,382,080 Boise Cascade 23,800 821,814 Burlington Northern Santa Fe 156,100 4,683,000 CSX 86,500 3,031,825 Caterpillar 140,100 6,857,895 Centex 25,000 1,444,750 Cooper Industries, Cl. A 38,000 1,493,400 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ PRODUCER GOODS & SERVICES (CONTINUED) Crane 24,375 618,638 Cummins Engine 16,900 559,390 Deere & Co. 96,900 4,641,510 Dow Chemical 369,876 12,716,337 E. I. du Pont de Nemours 404,732 17,970,101 Eastman Chemical 31,600 1,482,040 Ecolab 52,700 2,436,321 Emerson Electric 171,600 9,182,316 Engelhard 52,900 1,498,128 FedEx 121,640 6,495,576 Fluor 32,900 1,281,455 Freeport-McMoRan Copper, Cl. B 58,900 (a) 1,051,365 General Dynamics 82,200 8,741,970 Genuine Parts 71,150 2,481,000 Georgia-Pacific 94,072 2,312,290 Goodrich 41,600 1,136,512 Goodyear Tire & Rubber 66,700 1,247,957 Great Lakes Chemical 20,500 543,045 Hercules 44,500 (a) 516,200 Honeywell International 333,212 11,739,059 ITT Industries 37,000 2,612,200 Illinois Tool Works 124,800 8,523,840 Inco 74,400 (a) 1,684,416 Ingersoll-Rand, Cl. A 68,850 3,143,691 International Paper 196,783 8,575,803 KB HOME 21,000 1,081,710 Leggett & Platt 80,000 1,872,000 Lockheed Martin 183,700 12,767,150 Louisiana-Pacific 42,600 451,134 Masco 197,200 5,346,092 MeadWestvaco 81,431 2,732,824 Molex 78,875 2,644,679 Newmont Mining 159,619 4,202,768 Norfolk Southern 158,100 3,696,378 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ PRODUCER GOODS & SERVICES (CONTINUED) Northrop Grumman 46,000 5,750,000 Nucor 31,800 2,068,272 PPG Industries 68,900 4,264,910 Pactiv 64,600 (a) 1,537,480 Pall 50,101 1,039,596 Parker-Hannifin 48,050 2,296,309 Phelps Dodge 36,233 1,492,800 Placer Dome 134,700 1,509,987 Plum Creek Timber 75,400 2,314,780 Praxair 66,700 3,799,899 Pulte Homes 24,900 1,431,252 Raytheon 162,300 6,613,725 Rockwell Collins 74,700 2,048,274 Rockwell International 75,700 1,512,486 Rohm & Haas 90,006 3,644,343 Sealed Air 34,312 (a) 1,381,744 Sherwin-Williams 62,300 1,864,639 Sigma-Aldrich 29,900 1,499,485 Snap-On 23,750 705,137 Stanley Works 34,800 1,427,148 3M 158,700 19,520,100 TRW 52,000 2,962,960 Temple-Inland 21,600 1,249,776 Textron 57,100 2,677,990 Thomas & Betts 23,800 442,680 Tyco International 813,723 10,993,398 Union Pacific 102,600 6,492,528 United States Steel 41,300 821,457 United Technologies 192,700 13,084,330 Vulcan Materials 41,400 1,813,320 W.W. Grainger 38,200 1,913,820 Weyerhaeuser 89,000 5,682,650 Worthington Industries 34,900 631,690 334,679,172 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ SERVICES--5.9% ALLTEL 126,700 5,954,900 AOL Time Warner 1,814,500 (a) 26,691,295 AT&T Wireless Services 1,102,803 (a) 6,451,397 Allied Waste Industries 80,500 (a) 772,800 American Greetings, Cl. A 26,600 443,156 Apollo Group, Cl. A 70,500 (a) 2,778,405 Automatic Data Processing 252,700 11,005,085 Carnival 239,000 6,617,910 Cintas 69,200 3,418,480 Clear Channel Communications 249,700 (a) 7,995,394 Comcast, Cl. A 385,400 (a) 9,029,922 Computer Sciences 69,600 (a) 3,326,880 Convergys 70,600 (a) 1,375,288 Deluxe 25,900 1,007,251 Dow Jones & Co. 34,400 1,666,680 Electronic Data Systems 195,200 7,251,680 Equifax 59,100 1,595,700 First Data 311,600 11,591,520 Fiserv 78,050 (a) 2,865,216 Gannett 108,600 8,242,740 IMS Health 117,900 2,116,305 Interpublic Group of Companies 155,700 3,855,132 Knight-Ridder 33,900 2,134,005 McGraw-Hill Cos. 79,100 4,722,270 Meredith 20,300 778,505 Moody's 63,000 3,134,250 NEXTEL Communications, Cl. A 332,800 (a) 1,068,288 New York Times, Cl. A 61,700 3,177,550 Omnicom Group 76,200 3,489,960 Paychex 152,825 4,781,894 Quintiles Transnational 48,500 (a) 605,765 R. R. Donnelley & Sons 46,300 1,275,565 Robert Half International 71,900 (a) 1,675,270 Ryder System 25,300 685,377 Sprint (PCS Group) 405,300 (a) 1,811,691 TMP Worldwide 45,500 (a) 978,250 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ SERVICES (CONTINUED) Tribune 122,700 5,337,450 Univision Communications, Cl. A 93,300 (a) 2,929,620 Viacom, Cl. B 720,308 (a) 31,960,066 Walt Disney 831,500 15,715,350 Waste Management 251,872 6,561,266 218,875,528 TECHNOLOGY--13.7% ADC Telecommunications 324,100 (a) 742,189 Adobe Systems 97,900 2,790,150 Advanced Micro Devices 139,400 (a) 1,354,968 Agilent Technologies 189,150 (a) 4,473,398 Altera 156,900 (a) 2,133,840 Analog Devices 148,700 (a) 4,416,390 Andrew 40,050 (a) 573,916 Apple Computer 145,300 (a) 2,574,716 Applied Materials 667,500 (a) 12,695,850 Applied Micro Circuits 122,200 (a) 578,006 Autodesk 46,800 620,100 Avaya 147,470 (a) 729,977 BMC Software 99,100 (a) 1,645,060 Broadcom, Cl. A 109,700 (a) 1,924,138 CIENA 175,900 (a) 737,021 Cisco Systems 2,983,600 (a) 41,621,220 Citrix Systems 74,300 (a) 448,772 Computer Associates International 235,725 3,745,670 Compuware 152,400 (a) 925,068 Comverse Technology 76,400 (a) 707,464 Corning 388,000 1,377,400 Danaher 61,500 4,080,525 Dell Computer 1,057,800 (a) 27,650,892 Dover 82,600 2,891,000 EMC 906,000 (a) 6,840,300 Gateway 132,300 (a) 587,412 Hewlett-Packard 1,230,312 18,799,167 Intel 2,724,600 49,778,442 International Business Machines 697,600 50,227,200 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ TECHNOLOGY (CONTINUED) Intuit 86,200 (a) 4,285,864 JDS Uniphase 556,000 (a) 1,495,640 Jabil Circuit 80,700 (a) 1,703,577 KLA-Tencor 77,200 (a) 3,396,028 LSI Logic 151,100 (a) 1,322,125 Lexmark International 53,000 (a) 2,883,200 Linear Technology 129,300 4,063,899 Lucent Technologies 1,399,247 2,322,750 Maxim Integrated Products 131,600 (a) 5,044,228 Mercury Interactive 34,200 (a) 785,232 Micron Technology 245,100 (a) 4,955,922 Microsoft 2,206,800 (a) 119,432,016 Motorola 925,406 13,344,355 NCR 40,200 (a) 1,390,920 NVIDIA 61,100 (a) 1,049,698 National Semiconductor 73,200 (a) 2,135,244 Network Appliance 136,300 (a) 1,691,483 Nortel Networks 1,566,980 (a) 2,272,121 Novell 147,800 (a) 474,438 Novellus Systems 59,300 (a) 2,016,200 Oracle 2,237,700 (a) 21,191,019 PMC-Sierra 67,900 (a) 629,433 Palm 235,819 (a) 415,041 Parametric Technology 106,500 (a) 381,163 PeopleSoft 126,800 (a) 1,886,784 PerkinElmer 51,300 566,865 Pitney Bowes 98,100 3,896,532 Power-One 32,100 (a) 199,662 QLogic 37,900 (a) 1,443,990 QUALCOMM 313,600 (a) 8,620,864 Rational Software 79,400 (a) 651,874 Sabre Holdings 58,999 (a) 2,112,164 Sanmina-SCI 214,000 (a) 1,350,340 Scientific-Atlanta 64,000 1,052,800 Siebel Systems 193,400 (a) 2,750,148 Solectron 336,000 (a) 2,066,400 COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ TECHNOLOGY (CONTINUED) Sun Microsystems 1,322,900 (a) 6,627,729 Symbol Technologies 93,600 795,600 Tektronix 37,300 (a) 697,883 Tellabs 167,800 (a) 1,060,496 Teradyne 74,700 (a) 1,755,450 Texas Instruments 706,800 16,751,160 Unisys 131,400 (a) 1,182,600 VERITAS Software 166,783 (a) 3,300,636 Vitesse Semiconductor 81,600 (a) 257,856 Xerox 294,000 2,049,180 Xilinx 136,700 (a) 3,066,181 510,495,041 UTILITIES--6.1% AES 218,200 (a) 1,182,644 AT&T 1,547,976 16,563,343 Allegheny Energy 51,200 1,318,400 Ameren 58,900 2,533,289 American Electric Power 138,060 5,525,161 BellSouth 763,900 24,062,850 Calpine 152,700 (a) 1,073,481 CenturyTel 57,750 1,703,625 Cinergy 68,200 2,454,518 Citizens Communications 115,100 (a) 962,236 Consolidated Edison 86,800 3,623,900 Constellation Energy Group 67,000 1,965,780 DTE Energy 67,900 3,031,056 Duke Energy 338,118 10,515,470 Dynegy, Cl. A 147,500 1,062,000 Edison International 133,000 (a) 2,261,000 Entergy 91,400 3,879,016 Exelon 131,250 6,864,375 FPL Group 71,700 4,301,283 FirstEnergy 121,336 4,050,196 Mirant 164,132 (a) 1,198,164 PG&E 159,000 (a) 2,844,510 PPL 60,100 1,988,108 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES (CONTINUED) Pinnacle West Capital 34,600 1,366,700 Progress Energy 90,126 4,687,453 Public Service Enterprise Group 84,000 3,637,200 Qwest Communications International 684,737 1,917,264 Reliant Energy 123,939 2,094,569 SBC Communications 1,361,162 41,515,441 Southern 287,100 7,866,540 Sprint (FON Group) 363,100 3,852,491 TECO Energy 62,900 1,556,775 TXU 108,530 5,594,721 Verizon Communications 1,109,610 44,550,841 Xcel Energy 160,600 2,693,262 226,297,662 TOTAL COMMON STOCKS (cost $3,768,683,899) 3,703,769,073 ------------------------------------------------------------------------------------------------------------------------------------ Principal SHORT-TERM INVESTMENTS--.1% Amount ($) Value ($) ------------------------------------------------------------------------------------------------------------------------------------ REPURCHASE AGREEMENT--.0% Greenwich Capital Markets, Tri-Party Repurchase Agreement, 1.93%, dated 6/28/2002, due 7/1/2002 in the amount of $440,070 (fully collateralized by $425,000 Tennessee Valley Authority Bonds, 6.75%, 11/1/2025, value $453,567) 440,000 440,000 U.S. TREASURY BILLS--.1% 1.67%, 8/1/2002 2,000,000 (b) 1,997,220 1.67%, 8/15/2002 3,000,000 (b) 2,993,940 4,991,160 TOTAL SHORT-TERM INVESTMENTS (cost $5,430,946) 5,431,160 ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS (cost $3,774,114,845) 99.4% 3,709,200,233 CASH AND RECEIVABLES (NET) .6% 23,768,483 NET ASSETS 100.0% 3,732,968,716 (A) NON-INCOME PRODUCING. (B) PARTIALLY HELD BY THE BROKER IN A SEGREGATED ACCOUNT AS COLLATERAL FOR OPEN FUTURES POSITIONS. SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF FINANCIAL FUTURES June 30, 2002 (Unaudited) Market Value Unrealized Covered by (Depreciation) Contracts Contracts ($) Expiration at 6/30/2002 ($) ------------------------------------------------------------------------------------------------------------------------------------ FINANCIAL FUTURES LONG Standard & Poor's 500 99 24,504,975 September 2002 (742,142) SEE NOTES TO FINANCIAL STATEMENTS.
The Fund STATEMENT OF ASSETS AND LIABILITIES June 30, 2002 (Unaudited) Cost Value -------------------------------------------------------------------------------- ASSETS ($): Investments in securities-- See Statement of Investments--Note 1(b) 3,774,114,845 3,709,200,233 Cash 8,544,076 Receivable for investment securities sold 14,491,546 Dividends and interest receivable 4,405,321 Receivable for shares of Common Stock subscribed 8,640 Prepaid expenses 140,571 3,736,790,387 ------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 787,704 Payable for shares of Common Stock redeemed 2,799,205 Payable for investment securities purchased 95,205 Payable for futures variation margin--Note 4 36,089 Accrued expenses 103,468 3,821,671 ------------------------------------------------------------------------------- NET ASSETS ($) 3,732,968,716 ------------------------------------------------------------------------------- COMPOSITION NET ASSETS ($): Paid-in capital 3,913,116,556 Accumulated undistributed investment income--net 107,084 Accumulated net realized gain (loss) on investments and financial futures (114,598,170) Accumulated net unrealized appreciation (depreciation) on investments [including ($742,142) net unrealized (depreciation) on financial futures] (65,656,754) -------------------------------------------------------------------------------- NET ASSETS ($) 3,732,968,716 NET ASSET VALUE PER SHARE Initial Shares Service Shares -------------------------------------------------------------------------------- Net Assets ($) 3,688,525,050 44,443,666 Shares Outstanding 145,839,006 1,759,468 -------------------------------------------------------------------------------- NET ASSETS VALUE PER SHARE ($) 25.29 25.26 SEE NOTES TO FINANCIAL STATEMENTS. STATEMENT OF OPERATIONS Six Months Ended June 30, 2002 (Unaudited) -------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: Cash dividends (net of $225,602 foreign taxes witheld at source) 29,484,467 Interest 735,515 TOTAL INCOME 30,219,982 EXPENSES: Management fee--Note 3(a) 5,124,799 Prospectus and shareholders' reports 196,136 Directors' fees and expenses--Note 3(d) 56,140 Professional fees 46,040 Distribution fees (Service Shares)--Note 3(b) 43,805 Shareholder servicing costs (Initial Shares)--Note 3(c) 37,572 Loan commitment fees--Note 2 19,946 Miscellaneous 37,456 TOTAL EXPENSES 5,561,894 INVESTMENT INCOME--NET 24,658,088 -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments (66,620,559) Net realized gain (loss) on financial futures (11,569,530) NET REALIZED GAIN (LOSS) (78,190,089) Net unrealized appreciation (depreciation) on investments [including ($1,940,855) net unrealized (depreciation) on financial futures] (494,356,494) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (572,546,583) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (547,888,495) SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS Six Months Ended June 30, 2002 Year Ended (Unaudited) December 31, 2001 -------------------------------------------------------------------------------- OPERATIONS ($): Investment income--net 24,658,088 50,662,234 Net realized gain (loss) on investments (78,190,089) (5,850,793) Net unrealized appreciation (depreciation) on investments (494,356,494) (684,896,895) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (547,888,495) (640,085,454) -------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): Investment income--net: Initial shares (24,944,840) (50,538,356) Service shares (213,829) (123,696) Net realized gain on investments: Initial shares -- (23,226,545) Service shares -- (135,166) TOTAL DIVIDENDS (25,158,669) (74,023,763) -------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold: Initial shares 399,742,068 975,956,345 Service shares 24,399,459 28,389,753 Dividends reinvested: Initial shares 24,944,840 73,764,901 Service shares 213,829 258,862 Cost of shares redeemed: Initial shares (561,250,869) (1,078,261,283) Service shares (671,970) (1,556,104) INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS (112,622,643) (1,447,526) TOTAL INCREASE (DECREASE) IN NET ASSETS (685,669,807) (715,556,743) -------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 4,418,638,523 5,134,195,266 END OF PERIOD 3,732,968,716 4,418,638,523 Undistributed investment income--net 107,084 607,665 Six Months Ended June 30, 2002 Year Ended (Unaudited) December 31, 2001 -------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS: INITIAL SHARES Shares sold 14,069,565 31,813,295 Shares issued for dividends reinvested 919,908 2,520,503 Shares redeemed (18,735,661) (35,768,506) NET INCREASE (DECREASE) IN SHARES OUTSTANDING (3,746,188) (1,434,708) -------------------------------------------------------------------------------- SERVICE SHARES Shares sold 874,507 944,339 Shares issued for dividends reinvested 8,021 8,900 Shares redeemed (25,252) (51,061) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 857,276 902,178 SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund's financial statements. Six Months Ended June 30, 2002 Year Ended December 31, --------------------------------------------------------------------- INITIAL SHARES (Unaudited) 2001 2000 1999 1998 1997 ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE DATA ($): Net asset value, beginning of period 29.36 34.00 38.45 32.52 25.75 20.28 Investment Operations: Investment income--net .16(a) .34(a) .35(a) .40(a) .37 .37 Net realized and unrealized gain (loss) on investments (4.06) (4.48) (3.88) 6.24 6.85 6.26 Total from Investment Operations (3.90) (4.14) (3.53) 6.64 7.22 6.63 Distributions: Dividends from investment income--net (.17) (.34) (.35) (.38) (.38) (.37) Dividends from net realized gain on investments -- (.16) (.57) (.33) (.07) (.79) Total Distributions (.17) (.50) (.92) (.71) (.45) (1.16) Net asset value, end of period 25.29 29.36 34.00 38.45 32.52 25.75 ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (13.32)(b) (12.18) (9.28) 20.60 28.21 32.96 ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/ SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .13(b) .26 .26 .26 .26 .28 Ratio of net investment income to average net assets .59(b) 1.09 .95 1.13 1.35 1.66 Portfolio Turnover Rate 1.90(b) 4.03 4.97 2.64 2.40 3.53 ---------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 3,688,525 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. (B) NOT ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS. Six Months Ended June 30, 2002 Year Ended December 31 ------------------------------ SERVICE SHARES (Unaudited) 2001 2000(a) ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE DATA ($): Net asset value, beginning of period 29.33 34.00 34.00 Investment Operations: Investment income--net .13(b) .24(b) -- Net realized and unrealized gain (loss) on investments (4.06) (4.48) -- Total from Investment Operations (3.93) (4.24) -- Distributions: Dividends from investment income--net (.14) (.27) -- Dividends from net realized gain on investments -- (.16) -- Total Distributions (.14) (.43) -- Net asset value, end of period 25.26 29.33 34.00 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (13.42)(c) (12.46) -- ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .25(c) .57 -- Ratio of net investment income to average net assets .48(c) .83 -- Portfolio Turnover Rate 1.90(c) 4.03 4.97 ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 44,444 26,461 1 (A) THE FUND COMMENCED OFFERING SERVICE SHARES ON DECEMBER 31, 2000. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) NOT ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS.
The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) 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 match the total return of 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, 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, if any, it is the policy of the fund not to distribute such gain. (d) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable pro The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) visions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes. The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2001 was as follows: ordinary income $50,662,052 and long-term capital gain $23,361,711. 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 June 30, 2002, 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, 2002 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 June 30, 2002, 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 June 30, 2002, Service shares were charged $43,805 pursuant to the Plan. (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 June 30, 2002, Initial shares were charged $39,000 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 June 30, 2002, the fund was charged $506 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. The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) 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 June 30, 2002, amounted to $78,349,604 and $106,541,606, 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 June 30, 2002 are set forth in the Statement of Financial Futures. At June 30, 2002, accumulated net unrealized depreciation on investments was $64,914,612, consisting of $705,348,531 gross unrealized appreciation and $770,263,143 gross unrealized depreciation. At June 30, 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 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 763SA0602