UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-4764
Dreyfus Premier Municipal Bond Fund
(Exact name of Registrant as specified in charter)
c/o The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
(Address of principal executive offices) (Zip code)
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 922-6000
Date of fiscal year end: 4/30
Date of reporting period: 4/30/03
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
Dreyfus Premier
Municipal Bond Fund
ANNUAL REPORT April 30, 2003
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 Fund Performance
8 Statement of Investments
15 Statement of Assets and Liabilities
16 Statement of Operations
17 Statement of Changes in Net Assets
19 Financial Highlights
22 Notes to Financial Statements
27 Report of Independent Auditors
28 Important Tax Information
29 Proxy Results
30 Board Members Information
32 Officers of the Fund
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Premier
Municipal Bond Fund
LETTER FROM THE CHAIRMAN
Dear Shareholder:
This annual report for Dreyfus Premier Municipal Bond Fund covers the 12-month
period from May 1, 2002, through April 30, 2003. Inside, you'll find valuable
information about how the fund was managed during the reporting period,
including a discussion with the fund's portfolio manager, James Welch.
We have recently seen what we believe are encouraging signs of stability in the
U.S. financial markets. Perhaps most important, the war in Iraq ended quickly,
without disruptions in oil supplies or major incidents of terrorism. Many major
stock market indices have posted modest gains since the start of 2003,
suggesting greater investor optimism. At the same time, yield differences
between U.S. Treasury securities and corporate bonds have moved closer to
historical norms as many companies have strengthened their balance sheets.
Of course, problems and concerns remain. In the U.S. economy, unemployment has
risen to multiyear highs and corporations remain reluctant to spend. Positive
factors appear to outweigh negative ones, however, and we believe that the U.S.
economy is on the path to recovery.
What are the implications for your investments? We are generally optimistic
about the stock market, although security selection should remain a key factor.
We continue to favor areas of the bond market that are more credit-sensitive and
believe municipal bonds may benefit if state and local tax rates rise. Your
financial advisor can help you to ensure that your portfolio reflects your
investment needs, long-term goals and attitudes toward risk.
Thank you for your continued confidence and support.
Sincerely,
Stephen E. Canter
Chairman and Chief Executive Officer
The Dreyfus Corporation
May 15, 2003
DISCUSSION OF FUND PERFORMANCE
James Welch, Portfolio Manager
How did Dreyfus Premier Municipal Bond Fund perform relative to its benchmark?
For the 12-month period ended April 30, 2003, the fund achieved a total return
of 5.45% for Class A shares, 5.00% for Class B shares and 4.67% for Class C
shares.(1) The Lehman Brothers Municipal Bond Index, the fund's benchmark,
achieved a total return of 8.49% for the same period.(2) In addition, the fund
is reported in the Lipper General Municipal Debt Funds category. Over the
reporting period, the average total return for all funds reported in this
category was 7.25% .(3)
The fund' s performance during the reporting period was positively influenced
primarily by declining interest rates and heightened investor demand for many
municipal bonds. However, the fund produced lower returns than its benchmark and
Lipper category, which we attribute mainly to weakness among the fund's holdings
of bonds backed by corporations, including airline and tobacco companies, which
were hurt by persistent economic weakness and litigation-related concerns,
respectively.
What is the fund's investment approach?
The fund seeks to maximize current income exempt from federal income tax to the
extent consistent with the preservation of capital. To pursue its goal, the fund
normally invests substantially all of its assets in municipal bonds that provide
income exempt from federal income tax. The fund invests at least 70% of its
assets in investment grade municipal bonds or the unrated equivalent as
determined by Dreyfus.
The portfolio manager may buy and sell bonds based on credit quality, market
outlook and yield potential. In selecting municipal bonds for investment, the
portfolio manager may assess the current interest rate environment and a
municipal bond' s potential volatility in different rate environments. The
portfolio manager focuses on bonds with The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
the potential to offer attractive current income, typically looking for bonds
that can provide consistently attractive current yields or that are trading at
competitive market prices. A portion of the fund's assets may be allocated to
" discount" bonds, which are bonds that sell at a price below their face value,
or to "premium" bonds, which are bonds that sell at a price above their face
value. The fund's allocation either to discount bonds or to premium bonds will
change along with the portfolio manager's changing views of the current interest
rate and market environments. The portfolio manager may also look to select
bonds that are most likely to obtain attractive prices when sold.
What other factors influenced the fund's performance?
The reporting period was characterized by ongoing economic weakness, which was
aggravated by numerous high-profile corporate scandals, declining consumer
confidence and heightened international tensions culminating in the war in Iraq.
To stimulate renewed growth, the Federal Reserve Board reduced key short-term
interest rates by 50 basis points in November 2002. Most municipal bond yields
declined along with interest rates, producing price appreciation that
contributed positively to the fund' s total return. Lower yields also were
supported by persistently high levels of investor demand.
In the weak economy, revenues from personal income taxes, capital gains taxes
and sales taxes fell short of many states' and municipalities' projections,
creating budget deficits. In our view, fiscal pressures in some states are now
more severe than at any time since World War II. Various states have attempted
to bridge their budget gaps by reducing spending, raising taxes and tapping
rainy day funds. Nonetheless, fiscal pressures caused the major rating agencies
to downgrade the credit rating of several states during the reporting period.
In this challenging fiscal environment, we have attempted to adopt a more
conservative investment posture by looking to upgrade the fund's overall credit
quality. However, because of illiquidity among bonds of troubled issuers,
progress toward that objective has been slower than we would have liked.
Although we reduced the fund's exposure to airline-
related bonds by approximately 50% during the reporting period, we believe that
it makes little sense to sell the remaining airline bonds at prices we regard as
unreasonably low, and we intend to be patient in waiting for better
opportunities. Otherwise, we generally have avoided general obligation bonds
issued by state governments in favor of securities issued by localities that we
consider more fiscally sound. We have also favored bonds backed by revenues from
essential-services facilities, including water and sewer plants, and insured
bonds.(4)
What is the fund's current strategy?
We continue to maintain what we consider to be a relatively defensive posture
with regard to credit quality, including a focus on income-oriented bonds that
we believe have the potential to maintain more of their value than other types
of bonds under weak market conditions. We have also become more defensive in our
duration management strategy, reducing the fund's average duration by the end of
the reporting period to 6.902 years. While this position remains long relative
to the fund' s benchmark, as we believe is appropriate in a generally weak
economy, it is less aggressive than it had been for much of the reporting
period. In our view, these are prudent strategies in today's uncertain economic
environment.
May 15, 2003
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGES
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES, AND SOME INCOME
MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN
INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
IS A WIDELY ACCEPTED, UNMANAGED TOTAL RETURN PERFORMANCE BENCHMARK FOR THE
LONG-TERM, INVESTMENT-GRADE, TAX-EXEMPT BOND MARKET. INDEX RETURNS DO NOT
REFLECT FEES AND EXPENSES ASSOCIATED WITH OPERATING A MUTUAL FUND.
(3) SOURCE: LIPPER INC. -- CATEGORY AVERAGE RETURNS REFLECT THE FEES AND
EXPENSES OF THE FUNDS COMPRISING THE AVERAGE.
(4) INSURANCE ON INDIVIDUAL BONDS EXTENDS TO THE REPAYMENT OF PRINCIPAL AND THE
PAYMENT OF INTEREST IN THE EVENT OF DEFAULT. IT DOES NOT EXTEND TO THE MARKET
VALUE OF THE PORTFOLIO SECURITIES OR THE VALUE OF THE FUND'S SHARES.
The Fund
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Premier Municipal
Bond Fund Class A shares and Class B shares and the Lehman Brothers Municipal
Bond Index
((+)) SOURCE: LIPPER INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN CLASS A SHARES AND CLASS B
SHARES OF DREYFUS PREMIER MUNICIPAL BOND FUND ON 4/30/93 TO A $10,000 INVESTMENT
MADE IN THE LEHMAN BROTHERS MUNICIPAL BOND INDEX (THE "INDEX") ON THAT DATE. ALL
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED. PERFORMANCE FOR CLASS C
SHARES WILL VARY FROM THE PERFORMANCE OF BOTH CLASS A AND CLASS B SHARES SHOWN
ABOVE DUE TO DIFFERENCES IN CHARGES AND EXPENSES.
THE FUND INVESTS PRIMARILY IN MUNICIPAL SECURITIES AND ITS PERFORMANCE SHOWN IN
THE LINE GRAPH TAKES INTO ACCOUNT THE MAXIMUM INITIAL SALES CHARGE ON CLASS A
SHARES AND ALL OTHER APPLICABLE FEES AND EXPENSES. THE INDEX, UNLIKE THE FUND,
IS AN UNMANAGED TOTAL RETURN PERFORMANCE BENCHMARK FOR THE LONG-TERM,
INVESTMENT-GRADE, TAX-EXEMPT BOND MARKET, CALCULATED BY USING MUNICIPAL BONDS
SELECTED TO BE REPRESENTATIVE OF THE MUNICIPAL MARKET OVERALL. THE INDEX DOES
NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES WHICH CAN CONTRIBUTE TO
THE INDEX POTENTIALLY OUTPERFORMING OR UNDERPERFORMING THE FUND. 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.
Average Annual Total Returns AS OF 4/30/03
Inception From
Date 1 Year 5 Years 10 Years Inception
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
WITH MAXIMUM SALES CHARGE (4.5%) 0.72% 2.35% 4.45%
WITHOUT SALES CHARGE 5.45% 3.29% 4.93%
CLASS B SHARES
WITH APPLICABLE REDEMPTION CHARGE ((+)) 1.00% 2.47% 4.60%
WITHOUT REDEMPTION 5.00% 2.79% 4.60%
CLASS C SHARES
WITH APPLICABLE REDEMPTION CHARGE ((+)(+)) 7/13/95 3.67% 2.52% -- 3.90%
WITHOUT REDEMPTION 7/13/95 4.67% 2.52% -- 3.90%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. THE FUND'S PERFORMANCE
SHOWN IN THE GRAPH AND TABLE DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
PERFORMANCE FOR CLASS B SHARES ASSUMES THE CONVERSION OF CLASS B SHARES TO CLASS
A SHARES AT THE END OF THE SIXTH YEAR FOLLOWING THE DATE OF PURCHASE.
((+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS B SHARES IS 4%.
AFTER SIX YEARS CLASS B SHARES CONVERT TO CLASS A SHARES.
((+)(+)) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS C SHARES IS 1%
FOR SHARES REDEEMED WITHIN ONE YEAR OF THE DATE OF PURCHASE.
The Fund
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
April 30, 2003
Principal
LONG-TERM MUNICIPAL INVESTMENTS--98.3% Amount ($) Value ($)
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ALABAMA--2.2%
Jefferson County, Sewer Revenue
(Capital Improvement)
5.125%, 2/1/2029 (Insured; FGIC) 5,000,000 5,145,200
University of Alabama, HR
5.75%, 9/1/2020 (Insured; MBIA) 3,000,000 3,270,240
CALIFORNIA--11.2%
California:
5.625%, 5/1/2018 5,550,000 5,998,606
5%, 2/1/2026 10,000,000 9,952,100
California Department Water Resources,
Power Supply Revenue
6%, 5/1/2015 7,500,000 8,655,675
California Pollution Control Financing Authority, PCR
(Southern California Edison Company)
7%, 3/1/2005 2,500,000 2,543,075
California Public Works Board, LR
(Dept. of Corrections Corcoran)
5.50%, 1/1/2017 (Insured; AMBAC) 5,000,000 5,510,000
Foothill/Eastern Transportation Corridor Agency,
Toll Road Revenue
6%, 1/1/2034 (Prerefunded 1/1/2007) 5,000,000 (a) 5,729,850
Port Oakland, Revenue
5.50%, 11/1/2020 (Insured; FGIC) 3,800,000 4,104,912
COLORADO--10.9%
Arapahoe County Capital Improvement Trust Fund,
Highway Revenue (E-470 Project):
Zero Coupon, 8/31/2005 2,530,000 2,442,007
Zero Coupon, 8/31/2007 (Prerefunded 8/31/2005) 4,000,000 (a) 3,445,440
7%, 8/31/2026 (Prerefunded 8/31/2005) 11,000,000 (a) 12,723,370
Denver City and County, Airport Revenue:
6%, 11/15/2017 (Insured; AMBAC) 5,000,000 5,571,400
7.50%, 11/15/2023 (Prerefunded 11/15/2004) 2,060,000 (a) 2,289,093
7.50%, 11/15/2023 (Insured; MBIA) 9,715,000 10,664,836
Northwest Parkway Public Highway Authority, Revenue:
Zero Coupon, 6/15/2027 (Insured; AMBAC) 6,125,000 1,498,236
7.125%, 6/15/2041 (Insured; AMBAC) 2,500,000 2,619,050
CONNECTICUT--6.9%
Connecticut:
9.961%, 6/15/2011 4,000,000 (b,c) 5,167,320
9.461%, 12/15/2015 3,700,000 (b,c) 4,988,525
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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CONNECTICUT (CONTINUED)
Connecticut Development Authority, PCR
(Connecticut Light & Power)
5.85%, 9/1/2028 5,150,000 5,416,564
Connecticut Housing Finance Authority
5.85%, 5/15/2031 2,205,000 2,325,525
Mashantucket Western Pequot Tribe, Special Revenue
5.75%, 9/1/2027 8,000,000 (c) 8,173,680
DELAWARE--2.4%
Delaware Housing Authority, MFMR 7%, 5/1/2025 3,725,000 3,661,489
Delaware Transportation Authority,
Transportation System Revenue
5%, 7/1/2019 (Insured; AMBAC) 5,000,000 5,342,750
FLORIDA--.7%
Highlands County Health Facilities Authority, Revenue
(Adventist/Sunbelt) 6%, 11/15/2031 2,500,000 2,660,600
GEORGIA--1.5%
Georgia 5.25%, 7/1/2017 5,000,000 5,512,000
ILLINOIS--2.4%
Carol Stream, First Mortgage Revenue
(Windsor Park Manor Project) 6.50%, 12/1/2007 1,730,000 1,802,158
Chicago O'Hare International Airport,
Special Facility Revenue (United Airlines Project)
6.30%, 5/1/2016 2,450,000 (d) 286,650
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers Facility):
8.75%, 3/1/2010 112,000 112,834
8.25%, 8/1/2012 1,470,000 1,471,602
Metropolitan Pier and Exposition Authority,
Dedicated State Tax Revenue
(McCormick Place Expansion)
5.50%, 6/15/2023 (Insured; MBIA) 5,000,000 5,464,750
INDIANA--.5%
Indiana Development Finance Authority
Exempt Facilities Revenue (Inland Steel)
5.75%, 10/1/2011 5,000,000 2,054,850
KANSAS--1.5%
Wichita, HR (Christi Health System, Inc.):
6.25%, 11/15/2019 2,000,000 2,227,200
6.25%, 11/15/2020 3,000,000 3,325,170
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
MARYLAND--.6%
Maryland Energy Financing Administration, SWDR
(Wheelabrator Water Projects) 6.45%, 12/1/2016 2,100,000 2,252,901
MASSACHUSETTS--3.6%
Massachusetts Industrial Finance Agency:
Health Care Facility Revenue (Metro Health
Foundation, Inc. Project) 6.75%, 12/1/2027 8,000,000 7,482,720
Water Treatment Revenue (American Hingham)
6.95%, 12/1/2035 2,640,000 2,720,969
Route 3 North Transportation Improvement Association, LR
5.75%, 6/15/2017 (Insured; MBIA) 3,000,000 3,440,190
MICHIGAN--1.0%
Michigan Hospital Finance Authority, Revenue
9.132%, 11/15/2007 3,225,000 (b,c) 3,942,305
MISSISSIPPI--.8%
Mississippi Business Finance Corporation, PCR
(System Energy Resources, Inc.) 5.90%, 5/1/2022 3,000,000 2,971,290
MISSOURI--.7%
Saint Louis Industrial Development Authority
(Saint Louis Convention) 7.25%, 12/15/2035 2,500,000 2,530,050
NEW JERSEY--7.0%
New Jersey Economic Development Authority, Revenue:
8.299%, Series A, 6/15/2016 2,495,000 (b,c) 3,005,677
8.299%, Series B, 6/15/2016 2,495,000 (b,c) 2,976,410
(School Facilities--Construction 2001):
5.25%, 6/15/2015 (Insured; AMBAC) 10,000 11,023
5.25%, 6/15/2016 (Insured; AMBAC) 10,000 10,965
New Jersey Turnpike Authority, Turnpike Revenue:
10.412%, 1/1/2011 6,350,000 (b,c) 8,576,120
5.625%, 1/1/2015 (Insured; MBIA) 4,700,000 5,351,279
5.50%, 1/1/2030 (Insured; MBIA) 6,000,000 6,529,980
NEW MEXICO--.5%
Farmington, PCR
(Public Service Co.--San Juan Project)
6.375%, 4/1/2022 1,700,000 1,742,313
NEW YORK--9.6%
New York City Industrial Development Agency
IDR (Laguardia Associates LP Project)
5.80%, 11/1/2013 4,535,000 3,249,645
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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NEW YORK (CONTINUED)
New York City Municipal Water Finance Authority
Water & Sewer Systems Revenue:
6%, 6/15/2033 (Prerefunded 6/15/2010) 3,085,000 (a) 3,703,543
6%, 6/15/2033 1,915,000 2,239,765
New York City Transitional Finance Authority, Revenue
(Future Tax Secured) 5.375%, 11/15/2021 5,000,000 5,406,800
New York State Dormitory Authority, Revenues,
(New York University):
6%, 7/1/2017 (Insured; MBIA) 3,500,000 4,287,640
5.75%, 7/01/2027 (Insured; MBIA) 6,000,000 7,117,560
(City University Systems) 5.50%, 7/1/2018 5,175,000 5,671,438
New York State Urban Development Corporation
Personal Income Tax Revenue
5.50%, 3/15/2021 (Insured; FGIC) 2,000,000 2,210,860
Scotia Housing Authority, Housing Revenue
(Coburg Village, Inc. Project) 6.10%, 7/1/2018 4,000,000 (d) 2,593,600
NORTH CAROLINA--1.1%
North Carolina Eastern Municipal Power Agency,
Power System Revenue 7%, 1/1/2013 3,500,000 4,190,900
OHIO--2.3%
Cuyahoga County, Revenue
(Cleveland Clinic Health Systems) 6%, 1/1/2032 4,000,000 4,254,800
Ohio Water Development Authority,
Pollution Control Facilites Revenue
(Cleveland Electric) 6.10%, 8/1/2020 4,300,000 4,542,176
OKLAHOMA--3.0%
Holdenville Industrial Authority,
Correctional Facility Revenue:
6.60%, 7/1/2010 (Prerefunded 7/1/2006) 2,045,000 (a) 2,392,670
6.70%, 7/1/2015 (Prerefunded 7/1/2006) 4,625,000 (a) 5,425,495
Tulsa Municipal Airport Trust Revenue
(American Airlines) 5.65%, 12/1/2035 6,100,000 3,448,147
PENNSYLVANIA--1.4%
Montgomery County Higher Education and Health
Authority First Mortgage Revenue
(AHF/Montgomery, Inc. Project)
10.50%, 9/1/2020 3,255,000 3,279,250
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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PENNSYLVANIA (CONTINUED)
Sayre Health Care Facilities Authority, Revenue
(Guthrie Health) 6.25%, 12/1/2015 1,750,000 1,953,595
RHODE ISLAND--.8%
Providence, Special Tax Increment Obligation
6.65%, 6/1/2016 3,000,000 3,124,380
TENNESSEE--4.8%
Knox County Health Educational and Housing Facilities
Board Hospital Facilities Revenue
(East Tennessee Baptist Health Systems)
6.375%, 4/15/2022 6,950,000 7,240,857
Memphis Center Revenue Finance Corporation,
Sports Facility Revenue
(Memphis Redbirds) 6.50%, 9/1/2028 8,000,000 8,050,640
Shelby County Health Educational and Housing Facilities,
Multi-Family Housing Board Revenue (Cameron Kirby)
7.25%, 7/1/2023 2,890,000 2,803,387
TEXAS--5.0%
Alliance Airport Authority, Special Facilities Revenue
(Federal Express Corp. Project) 6.375%, 4/1/2021 5,040,000 5,271,739
Gulf Coast Waste Disposal Authority, Revenue
(Waste Disposal--Valero Energy Corp.)
5.60%, 4/1/2032 6,000,000 5,396,280
Texas Turnpike Authority,
Central Texas Turnpike System Revenue
5.50%, 8/15/2039 (Insured; AMBAC) 5,000,000 5,336,400
Tomball Hospital Authority, Revenue
(Tomball Regional Hospital) 6%, 7/1/2025 250,000 255,723
Tyler Health Facilities Development Corporation, HR
(Mother Frances Hospital) 5.625%, 7/1/2013 2,680,000 2,681,581
UTAH--1.7%
Carbon County, SWDR
(Sunnyside Cogeneration--A) 7.10%, 8/15/2023 6,475,000 6,264,303
VIRGINIA--2.1%
Virginia Housing Development Authority,
Commonwealth Mortgage
5.80%, 1/1/2018 (Prerefunded 6/1/2003) 6,180,000 (a) 6,202,124
West Point Industrial Development Authority, SWDR
(Chesapeake Corp.)
6.375%, 3/1/2019 2,000,000 1,670,740
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA--1.7%
Upshur County, SWDR (TJ International Project)
7%, 7/15/2025 3,500,000 3,675,840
West Virginia Hospital Finance Authority, HR
(Charleston Area Medical Center)
6%, 9/1/2012 (Prerefunded 9/1/2010) 2,440,000 (a) 2,887,838
WISCONSIN--2.4%
Badger Tobacco Asset Securitization Corporation
Tobacco Settlement Revenue
7%, 6/1/2028 10,000,000 9,190,400
U.S. RELATED--8.0%
Commonwealth of Puerto Rico:
6.25%, 7/1/2013 (Insured; MBIA) 3,000,000 3,670,380
5.65%, 7/1/2015 (Insured; MBIA) 4,000,000 4,730,480
Public Improvement
5.25%, 7/1/2013 (Insured; MBIA) 6,000,000 6,839,280
Puerto Rico Highway and Transportation Authority,
Revenue 5%, 7/1/2042 3,140,000 3,105,177
Puerto Rico Public Finance Corporation 6%, 8/1/2026 10,000,000 11,692,700
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $357,804,803) 371,759,082
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SHORT-TERM MUNICIPAL INVESTMENTS--2.7%
- -----------------------------------------------------------------------------------------------------------------------------------
WISCONSIN--2.7%
Wisconsin Health and Educational Facilities Authority,
Revenue (Gundersen Lutheran) VRDN
(Insured FSA) 1.40%
(cost $10,500,000) 10,500,000 (e) 10,500,000
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TOTAL INVESTMENTS (cost $368,304,803) 101.0% 382,259,082
LIABILITIES, LESS CASH AND RECEIVABLES (1.0%) (3,971,590)
NET ASSETS 100.0% 378,287,492
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond Assurance
Corporation
FGIC Financial Guaranty Insurance
Company
FSA Financial Security Assurance
HR Hospital Revenue
IDR Industrial Development Revenue
LR Lease Revenue
MBIA Municipal Bond Investors Assurance
Insurance Corporation
MFMR Multi-Family Mortgage Revenue
PCR Pollution Control Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 40.0
AA Aa AA 11.3
A A A 15.8
BBB Baa BBB 16.1
BB Ba BB 2.8
CCC Caa CCC 1.4
CC Ca CC .1
F-1, F-1+ VMIG1, MIG1, P1 SP1, A1 2.8
Not Rated( f) Not Rated( f) Not Rated( f) 9.7
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND INTEREST
ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE EARLIEST REFUNDING
DATE.
(B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT
OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT APRIL 30, 2003,
THESE SECURITIES AMOUNTED TO $36,830,036 OR 9.7% OF NET ASSETS.
(D) NON-INCOME PRODUCING SECURITY; INTEREST PAYMENTS IN DEFAULT.
(E) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(F) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S,
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE FUND MAY INVEST.
(G) AT APRIL 30, 2003, THE FUND HAD $97,776,625 (25.8% OF NET ASSETS) INVESTED
IN SECURITIES WHOSE PAYMENT OF PRINCIPAL AND INTEREST IS DEPENDENT UPON REVENUES
GENERATED FROM TRANSPORTATION PROJECTS.
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2003
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 368,304,803 382,259,082
Interest receivable 6,719,179
Receivable for investment securities sold 5,190,262
Receivable for shares of Beneficial Interest subscribed 57,282
Prepaid expenses 36,517
394,262,322
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 273,286
Cash overdraft due to Custodian 798,603
Payable for investment securities purchased 14,704,200
Payable for shares of Beneficial Interest redeemed 71,028
Accrued expenses 127,713
15,974,830
- --------------------------------------------------------------------------------
NET ASSETS ($) 378,287,492
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 400,628,122
Accumulated net realized gain (loss) on investments (36,294,909)
Accumulated net unrealized appreciation
(depreciation) on investments 13,954,279
- --------------------------------------------------------------------------------
NET ASSETS ($) 378,287,492
NET ASSET VALUE PER SHARE
Class A Class B Class C
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets ($) 321,935,815 43,021,962 13,329,715
Shares outstanding 24,679,657 3,297,158 1,020,294
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 13.04 13.05 13.06
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Year Ended April 30, 2003
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 23,549,985
EXPENSES:
Management fee--Note 3(a) 2,200,355
Shareholder servicing costs--Note 3(c) 1,272,249
Distribution fees--Note 3(b) 315,709
Prospectus and shareholders' reports 72,603
Professional fees 55,692
Registration fees 54,113
Custodian fees 48,577
Trustees' fees and expenses--Note 3(d) 12,469
Loan commitment fees--Note 2 5,669
Miscellaneous 22,742
TOTAL EXPENSES 4,060,178
INVESTMENT INCOME--NET 19,489,807
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (4,766,923)
Net unrealized appreciation (depreciation) on investments 7,223,540
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 2,456,617
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 21,946,424
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
-----------------------------------
2003 2002
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 19,489,807 21,178,845
Net realized gain (loss) on investments (4,766,923) (5,373,179)
Net unrealized appreciation (depreciation)
on investments 7,223,540 734,517
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 21,946,424 16,540,183
- -------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (16,961,279) (18,710,976)
Class B shares (1,917,537) (2,161,336)
Class C shares (551,014) (249,451)
TOTAL DIVIDENDS (19,429,830) (21,121,763)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 201,005,593 340,387,516
Class B shares 12,247,298 13,593,354
Class C shares 7,720,435 7,358,813
Dividends reinvested:
Class A shares 9,199,796 10,070,982
Class B shares 995,838 1,093,466
Class C shares 320,614 145,893
Cost of shares redeemed:
Class A shares (252,318,674) (334,112,802)
Class B shares (13,510,443) (18,088,421)
Class C shares (4,226,633) (1,935,376)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (38,566,176) 18,513,425
TOTAL INCREASE (DECREASE) IN NET ASSETS (36,049,582) 13,931,845
- -------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 414,337,074 400,405,229
END OF PERIOD 378,287,492 414,337,074
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended April 30,
----------------------------------
2003 2002
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 15,370,781 26,025,843
Shares issued for dividends reinvested 703,863 766,918
Shares redeemed (19,248,196) (25,526,222)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (3,173,552) 1,266,539
- --------------------------------------------------------------------------------
CLASS B(A)
Shares sold 937,925 1,030,757
Shares issued for dividends reinvested 76,169 83,220
Shares redeemed (1,034,265) (1,374,429)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (20,171) (260,452)
- --------------------------------------------------------------------------------
CLASS C
Shares sold 587,173 562,403
Shares issued for dividends reinvested 24,498 11,151
Shares redeemed (325,120) (146,370)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 286,551 427,184
(A) DURING THE PERIOD ENDED APRIL 30, 2003, 337,136 CLASS B SHARES REPRESENTING
$4,405,116 WERE AUTOMATICALLY CONVERTED TO 337,150 CLASS A SHARES AND DURING THE
PERIOD ENDED APRIL 30, 2002, 589,771 CLASS B SHARES REPRESENTING $7,810,947 WERE
AUTOMATICALLY CONVERTED TO 589,912 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
Year Ended April 30,
-------------------------------------------------------------------
CLASS A SHARES 2003 2002(a) 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.99 13.14 12.75 14.33 14.69
Investment Operations:
Investment income--net .65(b) .68(b) .66 .70 .72
Net realized and unrealized
gain (loss) on investments .04 (.15) .39 (1.42) (.15)
Total from Investment Operations .69 .53 1.05 (.72) .57
Distributions:
Dividends from investment income--net (.64) (.68) (.66) (.70) (.72)
Dividends from net realized
gain on investments -- -- -- (.16) (.21)
Total Distributions (.64) (.68) (.66) (.86) (.93)
Net asset value, end of period 13.04 12.99 13.14 12.75 14.33
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 5.45 4.13 8.42 (5.01) 3.96
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .94 .92 .98 .93 .91
Ratio of net investment income
to average net assets 4.95 5.20 5.09 5.28 4.96
Portfolio Turnover Rate 92.94 49.90 58.03 70.39 46.84
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 321,936 361,701 349,345 361,567 432,276
(A) AS REQUIRED, EFFECTIVE MAY 1, 2001, THE FUND HAS ADOPTED THE PROVISIONS OF
THE AICPA AUDIT AND ACCOUNTING GUIDE FOR INVESTMENT COMPANIES AND BEGAN
AMORTIZING DISCOUNT OR PREMIUM ON A SCIENTIFIC BASIS FOR DEBT SECURITIES ON A
DAILY BASIS. THE EFFECT OF THIS CHANGE FOR THE PERIOD ENDED APRIL 30, 2002 WAS
TO INCREASE NET INVESTMENT INCOME PER SHARE AND DECREASE NET REALIZED AND
UNREALIZED GAIN (LOSS) ON INVESTMENTS PER SHARE BY LESS THAN $.01 AND INCREASE
THE RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS FROM 5.19% TO 5.20%.
PER SHARE DATA AND RATIOS/SUPPLEMENTAL DATA FOR PERIODS PRIOR TO MAY 1, 2001
HAVE NOT BEEN RESTATED TO REFLECT THIS CHANGE IN PRESENTATION.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended April 30,
-------------------------------------------------------------------
CLASS B SHARES 2003 2002(a) 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.99 13.14 12.76 14.33 14.69
Investment Operations:
Investment income--net .58(b) .61(b) .60 .63 .65
Net realized and unrealized
gain (loss) on investments .06 (.15) .38 (1.41) (.15)
Total from Investment Operations .64 .46 .98 (.78) .50
Distributions:
Dividends from investment income--net (.58) (.61) (.60) (.63) (.65)
Dividends from net realized
gain on investments -- -- -- (.16) (.21)
Total Distributions (.58) (.61) (.60) (.79) (.86)
Net asset value, end of period 13.05 12.99 13.14 12.76 14.33
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 5.00 3.60 7.93 (5.51) 3.43
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.44 1.43 1.49 1.45 1.42
Ratio of net investment income
to average net assets 4.44 4.69 4.63 4.71 4.44
Portfolio Turnover Rate 92.94 49.90 58.03 70.39 46.84
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 43,022 43,092 47,026 52,979 112,583
(A) AS REQUIRED, EFFECTIVE MAY 1, 2001, THE FUND HAS ADOPTED THE PROVISIONS OF
THE AICPA AUDIT AND ACCOUNTING GUIDE FOR INVESTMENT COMPANIES AND BEGAN
AMORTIZING DISCOUNT OR PREMIUM ON A SCIENTIFIC BASIS FOR DEBT SECURITIES ON A
DAILY BASIS. THE EFFECT OF THIS CHANGE FOR THE PERIOD ENDED APRIL 30, 2002 WAS
TO INCREASE NET INVESTMENT INCOME PER SHARE AND DECREASE NET REALIZED AND
UNREALIZED GAIN (LOSS) ON INVESTMENTS PER SHARE BY LESS THAN $.01 AND INCREASE
THE RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS FROM 4.68% TO 4.69%.
PER SHARE DATA AND RATIOS/SUPPLEMENTAL DATA FOR PERIODS PRIOR TO MAY 1, 2001
HAVE NOT BEEN RESTATED TO REFLECT THIS CHANGE IN PRESENTATION.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended April 30,
------------------------------------------------------------------
CLASS C SHARES 2003 2002(a) 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 13.01 13.16 12.77 14.35 14.71
Investment Operations:
Investment income--net .55(b) .57(b) .57 .60 .61
Net realized and unrealized
gain (loss) on investments .05 (.14) .39 (1.42) (.15)
Total from Investment Operations .60 .43 .96 (.82) .46
Distributions:
Dividends from investment income--net (.55) (.58) (.57) (.60) (.61)
Dividends from net realized
gain on investments -- -- -- (.16) (.21)
Total Distributions (.55) (.58) (.57) (.76) (.82)
Net asset value, end of period 13.06 13.01 13.16 12.77 14.35
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 4.67 3.35 7.63 (5.71) 3.16
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.67 1.66 1.72 1.68 1.67
Ratio of net investment income
to average net assets 4.18 4.45 4.36 4.52 4.11
Portfolio Turnover Rate 92.94 49.90 58.03 70.39 46.84
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 13,330 9,544 4,035 4,424 8,095
(A) AS REQUIRED, EFFECTIVE MAY 1, 2001, THE FUND HAS ADOPTED THE PROVISIONS OF
THE AICPA AUDIT AND ACCOUNTING GUIDE FOR INVESTMENT COMPANIES AND BEGAN
AMORTIZING DISCOUNT OR PREMIUM ON A SCIENTIFIC BASIS FOR DEBT SECURITIES ON A
DAILY BASIS. THE EFFECT OF THIS CHANGE FOR THE PERIOD ENDED APRIL 30, 2002 WAS
TO INCREASE NET INVESTMENT INCOME PER SHARE AND DECREASE NET REALIZED AND
UNREALIZED GAIN (LOSS) ON INVESTMENTS PER SHARE BY LESS THAN $.01 AND INCREASE
THE RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS FROM 4.42% TO 4.45%.
PER SHARE DATA AND RATIOS/SUPPLEMENTAL DATA FOR PERIODS PRIOR TO MAY 1, 2001
HAVE NOT BEEN RESTATED TO REFLECT THIS CHANGE IN PRESENTATION.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Municipal Bond Fund (the "fund" ) is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified
open-end management investment company. The fund's investment objective is to
maximize current income exempt from federal income tax to the extent consistent
with the preservation of capital. The Dreyfus Corporation (the "Manager") serves
as the fund' s investment adviser. The Manager is a wholly-owned subsidiary of
Mellon Bank, N.A, which is a wholly-owned subsidiary of Mellon Financial
Corporation.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned subsidiary of
the Manager, is the distributor of the fund's shares. The fund is authorized to
issue an unlimited number of $.001 par value shares of Beneficial Interest in
each of the following classes of shares: Class A, Class B and Class C. Class A
shares are subject to a sales charge imposed at the time of purchase, Class B
shares are subject to a contingent deferred sales charge ("CDSC") imposed on
Class B share redemptions made within six years of purchase and Class C shares
are subject to a CDSC imposed on Class C shares redeemed within one year of
purchase. Class B shares automatically convert to Class A shares after six
years.Other differences between the classes include the services offered to and
the expenses borne by each class and certain voting rights.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. Treasury securities) are valued each
business day by an independent pricing service (the "Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily available
and are representative of the bid side of the market in the judgment of the
Service are valued at the mean between the quoted bid prices (as obtained by the
Service from
dealers in such securities) and asked prices (as calculated by the Service based
upon its evaluation of the market for such securities). Other investments (which
constitute a majority of the portfolio securities) are carried at fair value as
determined by the Service based on methods which include consideration of:
yields or prices of municipal securities of comparable quality, coupon, maturity
and type; indications as to values from dealers; and general market conditions.
Options and financial futures on municipal and U.S. Treasury securities are
valued at the last sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on the national
securities market on each business day.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premium and discount on investments, is earned from
settlement date and recognized on the accrual basis. Securities purchased or
sold on a when-issued or delayed-delivery basis may be settled a month or more
after the trade date. Under the terms of the custody agreement, the fund
received net earnings credits of $6,860 during the period ended April 30, 2003
based on available cash balances left on deposit. Income earned under this
arrangement is included in interest income.
(c) Dividends to shareholders: It is the policy of the fund to declare dividends
daily from investment income-net. Such dividends are paid monthly. Dividends
from net realized capital gain, if any, are normally declared and paid annually,
but the fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, it is the policy of the fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the The Fun
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Code, and to make distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income and excise taxes
At April 30, 2003, the components of accumulated earnings on a tax basis were as
follows: accumulated capital losses $31,281,853 and unrealized appreciation
$13,841,881. In addition, the fund had $4,898,456 of capital losses realized
after October 31, 2002, which were deferred for tax purposes to the first day of
the following fiscal year.
The accumulated capital losses are available to be applied against future net
securities profits, if any, realized subsequent to April 30, 2003. If not
applied, $11,182,708 of the carryover expires in fiscal 2008, $9,553,959 expires
in fiscal 2009, $4,754,947 expires in fiscal 2010 and $5,790,239 expires in
fiscal 2011.
The tax character of distributions paid to shareholders during the fiscal
periods ended April 30, 2003 and April 30, 2002, respectively, were as follows:
tax exempt income $19,429,830 and $21,121,763.
During the period ended April 30, 2003, as a result of permanent book to tax
differences, the fund decreased accumulated undistributed investment income-net
by $59,977, increased accumulated net realized gain (loss) on investments by
$114,950 and decreased paid-in capital by $54,973. 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 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 April 30, 2003, the
fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly.
During the period ended April 30, 2003, the Distributor retained $27,308 from
commissions earned on sales of the fund's Class A shares, and $56,660 and $3,025
from contingent deferred sales charges on redemptions of the fund's Class B and
C shares, respectively.
(b) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended April 30, 2003, Class B and
Class C shares were charged $216,550 and $99,159, respectively, pursuant to the
Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of the average daily
net assets of their shares for the provision of certain services. The services
provided may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended April 30, 2003 Class A, Class B and Class C
shares were charged $858,833, $108,275 and $33,053, respectively, pursuant to
the Shareholder Services Plan.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended April 30, 2003, the fund was charged $177,058 pursuant to the transfer
agency agreement.
(d) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $50,000
and an attendance fee of $6,500 for each in-person meeting and $500 for
telephone meetings.These fees are allocated among the funds in the Fund Group in
proportion to each fund' s relative net assets. The Chairman of the Board
receives an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the annual
retainer fee and per meeting fee paid at the time the Board member achieves
emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 2003, amounted to
$364,263,881 and $396,202,565 respectively.
At April 30, 2003, the cost of investments for federal income tax purposes was
$368,417,201 accordingly, accumulated net unrealized appreciation on investments
was $13,841,881, consisting of $25,021,423 gross unrealized appreciation and
$11,179,542 gross unrealized depreciation.
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees Dreyfus Premier Municipal Bond Fund
We have audited the accompanying statement of assets and liabilities of Dreyfus
Premier Municipal Bond Fund, including the statement of investments, as of April
30, 2003 and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the years indicated therein. These
financial statements and financial highlights are the responsibility of the
fund' s management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of April 30, 2003 by correspondence with the custodian and others. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Premier Municipal Bond Fund at April 30, 2003, 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 indicated years, in conformity with accounting principles generally accepted
in the United States.
New York, New York
June 4, 2003
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with federal tax law, the fund hereby designates all the dividends
paid from investment income-net during its fiscal year ended April 30, 2003 as
" exempt-interest dividends" (not generally subject to regular federal income
tax).
As required by federal tax law rules, shareholders will receive notification of
their portion of the fund's taxable ordinary dividends (if any) and capital gain
distributions (if any) paid for the 2003 calendar year on Form 1099-DIV which
will be mailed by January 31, 2004.
PROXY RESULTS (Unaudited)
The fund held a special meeting of shareholders on December 18, 2002. The
proposal considered at the meeting, and the results, are as follows:
Shares
-----------------------------------------------------------------------
For Against Abstained
-----------------------------------------------------------------------
To approve changes to certain of the
fundamental policies and investment
restrictions to expand the ability to
invest in other investment companies 14,813,996 1,002,480 1,013,287
The Fund
BOARD MEMBERS INFORMATION (Unaudited)
JOSEPH S. DIMARTINO (59)
CHAIRMAN OF THE BOARD (1995)
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
* Corporate Director and Trustee
OTHER BOARD MEMBERSHIPS AND AFFILIATIONS:
* The Muscular Dystrophy Association, Director
* Levcor International, Inc., an apparel fabric processor, Director
* Century Business Services, Inc., a provider of outsourcing functions for small
and medium size companies, Director
* The Newark Group, a provider of a national market of paper recovery
facilities, paperboard mills and paperboard converting plants, Director
NO. OF PORTFOLIOS FOR WHICH BOARD MEMBER SERVES: 191
--------------
CLIFFORD L. ALEXANDER, JR. (69)
BOARD MEMBER (1988)
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
* President of Alexander & Associates, Inc., a management consulting firm
(January 1981-present)
* Chairman of the Board of Moody's Corporation (October 2000-present)
* Chairman of the Board and Chief Executive Officer of The Dun and Bradstreet
Corporation (October 1999-September 2000)
OTHER BOARD MEMBERSHIPS AND AFFILIATIONS:
* Wyeth (formerly, American Home Products Corporation), a global leader in
pharmaceuticals, consumer healthcare products and animal health products,
Director
* Mutual of America Life Insurance Company, Director
NO. OF PORTFOLIOS FOR WHICH BOARD MEMBER SERVES: 70
--------------
PEGGY C. DAVIS (60)
BOARD MEMBER (1990)
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
* Shad Professor of Law, New York University School of Law (1983-present)
* She writes and teaches in the fields of evidence, constitutional theory,
family law, social sciences and the law, legal process and professional
methodology and training
NO. OF PORTFOLIOS FOR WHICH BOARD MEMBER SERVES: 26
ERNEST KAFKA (70)
BOARD MEMBER (1988)
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
* Physician engaged in private practice specializing in the psychoanalysis of
adults and adolescents (1962-present)
* Instructor, The New York Psychoanalytic Institute (1981-present)
* Associate Clinical Professor of Psychiatry at Cornell Medical School
(1987-2002)
NO. OF PORTFOLIOS FOR WHICH BOARD MEMBER SERVES: 26
--------------
NATHAN LEVENTHAL (60)
BOARD MEMBER (1989)
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
* Chairman of the Avery-Fisher Artist Program (November 1997-present)
* President of Lincoln Center for the Performing Arts, Inc. (March 1984-December
2000)
NO. OF PORTFOLIOS FOR WHICH BOARD MEMBER SERVES: 26
--------------
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.
SAUL B. KLAMAN, EMERITUS BOARD MEMBER
The Fund
OFFICERS OF THE FUND (Unaudited)
STEPHEN E. CANTER, PRESIDENT SINCE MARCH 2000.
Chairman of the Board, Chief Executive Officer and Chief Operating Officer
of the Manager, and an officer of 95 investment companies (comprised of 191
portfolios) managed by the Manager. Mr. Canter also is a Board member and, where
applicable, an Executive Committee Member of the other investment management
subsidiaries of Mellon Financial Corporation, each of which is an affiliate of
the Manager. He is 57 years old and has been an employee of the Manager since
May 1995.
STEPHEN R. BYERS, EXECUTIVE VICE PRESIDENT SINCE MARCH 2002.
Chief Investment Officer, Vice Chairman and a Director of Dreyfus, and an
officer of 95 investment companies (comprised of 191 portfolios) managed by the
Manager. Mr. Byers also is an Officer, Director or an Executive Committee Member
of certain other investment management subsidiaries of Mellon Financial
Corporation, each of which is an affiliate of the Manager. He is 49 years old
and has been an employee of the Manager since January 2000. Prior to joining the
Manager, he served as an Executive Vice President-Capital Markets, Chief
Financial Officer and Treasurer at Gruntal & Co., L.L.C.
MARK N. JACOBS, VICE PRESIDENT SINCE MARCH 2000.
Executive Vice President, Secretary and General Counsel of the Manager, and
an officer of 96 investment companies (comprised of 207 portfolios) managed by
the Manager. He is 57 years old and has been an employee of the Manager since
June 1977.
MICHAEL A. ROSENBERG, SECRETARY SINCE MARCH 2000.
Associate General Counsel of the Manager, and an officer of 93 investment
companies (comprised of 200 portfolios) managed by the Manager. He is 43 years
old and has been an employee of the Manager since October 1991.
JANETTE E. FARRAGHER, ASSISTANT SECRETARY SINCE MARCH 2000.
Associate General Counsel of the Manager, and an officer of 15 investment
companies (comprised of 26 portfolios) managed by the Manager. He is 40 years
old and has been an employee of the Manager since February 1984.
STEVEN F. NEWMAN, ASSISTANT SECRETARY SINCE MARCH 2000.
Associate General Counsel and Assistant Secretary of the Manager, and an
officer of 96 investment companies (comprised of 207 portfolios) managed by the
Manager. He is 53 years old and has been an employee of the Manager since July
1980.
JAMES WINDELS, TREASURER SINCE NOVEMBER 2001.
Director - Mutual Fund Accounting of the Manager, and an officer of 96
investment companies (comprised of 207 portfolios) managed by the Manager. He is
44 years old and has been an employee of the Manager since April 1985.
GREGORY S. GRUBER, ASSISTANT TREASURER SINCE MARCH 2000.
Senior Accounting Manager - Municipal Bond Funds of the Manager, and an
officer of 29 investment companies (comprised of 58 portfolios) managed by the
Manager. He is 44 years old and has been an employee of the Manager since August
1981.
KENNETH SANDGREN, ASSISTANT TREASURER SINCE NOVEMBER 2001.
Mutual Funds Tax Director of the Manager, and an officer of 96 investment
companies (comprised of 207 portfolios) managed by the Manager. He is 48 years
old and has been an employee of the Manager since June 1993.
WILLIAM GERMENIS, ANTI-MONEY LAUNDERING COMPLIANCE OFFICER SINCE OCTOBER 2002.
Vice President and Anti-Money Laundering Compliance Officer of the
Distributor, and the Anti-Money Laundering Compliance Officer of 91 investment
companies (comprised of 202 portfolios) managed by the Manager. He is 32 years
old and has been an employee of the Distributor since October 1998. Prior to
joining the Distributor, he was a Vice President of Compliance Data Center, Inc
The Fund
For More Information
Dreyfus Premier
Municipal Bond Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 2003 Dreyfus Service Corporation 022AR0403
Comparison of change in value of $10,000 investment in Dreyfus Premier Municipal
Bond Fund Class A shares and Class B shares and the Lehman Brothers Municipal
Bond Index
EXHIBIT A:
Dreyfus Dreyfus
Premier Premier Lehman
Municipal Municipal Brothers
PERIOD Bond Fund Bond Fund Municipal
(Class A (Class B Bond
shares) shares) Index *
4/30/93 9,551 10,000 10,000
4/30/94 9,727 10,126 10,216
4/30/95 10,380 10,749 10,895
4/30/96 11,012 11,343 11,762
4/30/97 11,896 12,193 12,541
4/30/98 13,147 13,405 13,708
4/30/99 13,668 13,864 14,660
4/30/00 12,983 13,169 14,525
4/30/01 14,076 14,278 16,032
4/30/02 14,657 14,868 17,154
4/30/03 15,456 15,678 18,611
* Source: Lipper Inc.
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. [RESERVED]
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the Disclosure Controls and Procedures (as
defined in Rule 30a-2(c) under the Investment Company Act of 1940, the
"Disclosure Controls") as of a date within 90 days prior to the filing date
(the "Filing Date") of this Form N-CSR (the "Report"), the Disclosure
Controls are effectively designed to ensure that information required to be
disclosed by the Registrant in the Report is recorded, processed, summarized
and reported by the Filing Date, including ensuring that information required
to be disclosed in the Report is accumulated and communicated to the
Registrant's management, including the Registrant's principal executive
officer and principal financial officer, as appropriate to allow timely
decisions regarding required disclosure.
(b) There were no significant changes in the Registrant's internal controls
or in other factors that could significantly affect these controls subsequent
to the date of their evaluation, and there were no corrective actions with
regard to significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
(a) Not applicable.
(b)(1) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2 under the Investment Company Act
of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Dreyfus Premier Municipal Bond Fund
By: /S/ STEPHEN E. CANTER
Stephen E. Canter
President
Date: June 26, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By: /S/ STEPHEN E. CANTER
Stephen E. Canter
Chief Executive Officer
Date: June 26, 2003
By: /S/ JAMES WINDELS
James Windels
Chief Financial Officer
Date: June 26, 2003
EXHIBIT INDEX
(b)(1) Certifications of principal executive officer and
principal financial officer as required by Rule 30a-2 under the
Investment Company Act of 1940.
(b)(2) Certification of principal executive officer and
principal financial officer as required by Section 906 of the
Sarbanes-Oxley Act of 2002.