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 811-6644
DREYFUS MASSACHUSETTS INTERMEDIATE 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 (212) 922-6000
area code:
Date of fiscal year end: 03/31
Date of reporting period: 9/30/03
FORM N-CSR
Item 1. Reports to Stockholders.
Dreyfus Massachusetts
Intermediate Municipal
Bond Fund
SEMIANNUAL REPORT September 30, 2003
YOU, YOUR ADVISOR AND
DREYFUS
A MELLON FINANCIAL COMPANY(TM)
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
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Massachusetts
Intermediate Municipal Bond Fund
LETTER FROM THE CHAIRMAN
Dear Shareholder:
This semiannual report for Dreyfus Massachusetts Intermediate Municipal Bond
Fund covers the six-month period from April 1, 2003, through September 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,
Monica Wieboldt.
After a prolonged period of sluggish growth, the U.S. economy has shown signs of
sustainable improvement. However, investor uncertainty regarding the strength of
the recovery has produced heightened volatility in the tax-exempt fixed-income
market. After most areas of the municipal bond market experienced sharp declines
during the summer, prices generally bounced back in September.
Despite recent reductions in federal tax rates, we believe that municipal bonds
may become more attractive to certain investors if states and municipalities
continue to raise taxes to balance their budgets. As always, we encourage you to
talk with your financial advisor about ways to enjoy the benefits of tax-exempt
municipal bonds as market conditions evolve.
Thank you for your continued confidence and support.
Sincerely,
/S/STEPHEN E. CANTER
Stephen E. Canter
Chairman and Chief Executive Officer
The Dreyfus Corporation
October 15, 2003
DISCUSSION OF FUND PERFORMANCE
Monica Wieboldt, Portfolio Manager
HOW DID DREYFUS MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND PERFORM RELATIVE
TO ITS BENCHMARK?
For the six-month period ended September 30, 2003, the fund achieved a total
return of 2.12% .(1) In comparison, the Lehman Brothers 7-Year Municipal Bond
Index (the "Index" ), the fund' s benchmark index, achieved a total return of
3.21% for the same period.(2) In addition, the average total return for all
funds reported in the Lipper Massachusetts Intermediate Municipal Debt Funds
category was 2.10%.(3)
The fund's performance was primarily the result of an unusually volatile
investment environment, in which intermediate-term municipal bonds gained value
during the first three months of the reporting period, lost value during a sharp
market decline in July and early August, and recovered in late August and
September. The fund's return was in line with the Lipper category but lower than
that of the Index, which contains securities from many states, not just
Massachusetts, and does not reflect fees and expenses.
What is the fund's investment approach?
The fund's objective is to seek as high a level of income exempt from federal
and Commonwealth of Massachusetts income taxes as is 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 and Massachusetts state
personal income taxes. The dollar-weighted average maturity of the fund's
portfolio ranges between three and ten years. Although the fund currently
intends to invest only in investment-grade municipal bonds, or the unrated
equivalent as determined by Dreyfus, it has the ability to invest up to 20% of
its assets in municipal bonds of below investment-grade credit quality
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
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 the
municipal bond's potential volatility in different rate environments.
The portfolio manager focuses on bonds with 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 to
either discount bonds or to premium bonds will change along with the portfolio
manager's changing views of the current interest-rate and market environment.
The portfolio manager also may look to select bonds that are most likely to
obtain attractive prices when sold.
WHAT OTHER FACTORS INFLUENCED THE FUND'S PERFORMANCE?
The fund performed well during the first half of the reporting period as the
tax-exempt bond market continued to benefit from expectations of lower interest
rates. Those expectations were fulfilled in late June, when the Federal Reserve
Board reduced short-term interest rates to just 1%, their lowest level in 45
years. Because bond prices and yields move in opposite directions, the fund
benefited as interest rates trended lower.
However, the market gave back all of the reporting period's previous gains in
July, when evidence of stronger economic growth caused investors to worry that
the most recent interest-rate reduction may have been the last of the current
cycle. Indeed, July represented one of the sharpest one-month declines in the
history of the municipal bond market. Fortunately, the market bounced back
during late August and September, erasing most of its losses when it became
clearer that the economy's recovery has so far been a relatively jobless one.
The economy's recent strength has not yet resulted in higher tax revenues for
most states. Massachusetts' s fiscal condition is less severe than
some other states, and it balanced its budget for the 2004 fiscal year through a
combination of spending cuts and fee increases. The state's fiscal condition led
us to reduce the fund' s exposure to the state-supported debt of local
municipalities with weaker underlying fundamentals, including a number of
smaller entities that are relatively dependent on state aid. However, during the
reporting period we saw a more stable trading environment for the state's
general obligation debt.
Our focus on bonds in the middle of the intermediate-term range enabled the fund
to benefit from the market's strength when prices were rising, but also exposed
the fund to heightened volatility in July.
What is the fund's current strategy?
Because of recent market volatility and the likelihood of continued uncertainty
as the U.S. economy recovers gradually, we have attempted to reduce the fund's
sensitivity to day-to-day market fluctuations. For example, we have diversified
a portion of the fund's holdings away from the middle of the intermediate-term
maturity range by increasing its holdings at the shorter- and longer-term (17
years) maturity range. In our view, continued careful security selection and
attention to credit quality are prudent strategies in today's Massachusetts bond
market.
October 15, 2003
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS
PAID. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE,
YIELD AND INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND
SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE
SUBJECT TO STATE AND LOCAL TAXES FOR NON-MASSACHUSETTS RESIDENTS, AND SOME
INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR
CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE. YIELD
PROVIDED REFLECTS THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN UNDERTAKING IN EFFECT THAT MAY BE EXTENDED,
TERMINATED OR MODIFIED AT ANY TIME. HAD THESE EXPENSES NOT BEEN ABSORBED,
THE FUND'S YIELD WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX IS AN UNMANAGED TOTAL RETURN PERFORMANCE BENCHMARK
FOR THE INVESTMENT-GRADE, GEOGRAPHICALLY UNRESTRICTED 7-YEAR TAX-EXEMPT
BOND MARKET, CONSISTING OF MUNICIPAL BONDS WITH MATURITIES OF 6-8 YEARS.
INDEX RETURNS DO NOT REFLECT THE FEES AND EXPENSES ASSOCIATED WITH
OPERATING A MUTUAL FUND.
(3) SOURCE: LIPPER INC. -- CATEGORY AVERAGE RETURNS REFLECT THE FEES AND
EXPENSES OF THE FUNDS COMPRISING THE AVERAGE.
The Fund
STATEMENT OF INVESTMENTS
September 30, 2003 (Unaudited)
Principal
LONG-TERM MUNICIPAL INVESTMENTS--98.8% Amount ($) Value ($)
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MASSACHUSETTS--75.5%
Boston
5.75%, 2/1/2013 (Prerefunded 2/1/2010) 1,000,000 (a) 1,167,110
Boston Convention Center Act 1997
5%, 5/1/2016 (Insured; AMBAC) 2,000,000 2,175,120
Boston Industrial Development
Financing Authority, Revenue
(Pilot Seafood Project) 5.875%, 4/1/2007 990,000 1,071,121
Fall River 5.25%, 6/1/2010 (Insured; MBIA) 1,000,000 1,127,310
Haverhill 5%, 8/15/2011 (Insured; FSA) 1,620,000 1,786,973
Hingham Municipal Purpose Loan
5.25%, 4/1/2013 2,125,000 2,407,306
Holyoke Gas & Electric Department, Revenue
5.375%, 12/1/2015 (Insured; MBIA) 1,245,000 1,403,264
Lawrence 5.50%, 2/1/2012 (Insured; AMBAC) 570,000 649,492
Lowell:
5.60%, 4/1/2005 (Insured; FSA) 1,000,000 1,066,370
5.30%, 12/15/2010 (Insured; AMBAC) 1,000,000 1,137,700
Massachusetts Bay Transportation Authority
(General Transportation System):
5.50%, 3/1/2012 (Insured; MBIA) 1,000,000 1,150,870
5.50%, 3/1/2012 2,000,000 2,296,380
Massachusetts, Revenue (College Building
Authority Project) 5.375%, 5/1/2017 1,000,000 1,134,570
Massachusetts Commonwealth:
6%, 8/1/2010 (Insured; AMBAC) 1,500,000 1,773,045
Consolidated Loan:
5.30%, 7/1/2006 (Prerefunded 7/1/2005) 1,750,000 (a) 1,894,550
5%, 12/1/2010 2,000,000 2,239,260
Federal Highway:
5.50%, 12/15/2009 1,000,000 1,161,000
5.25%, 12/15/2012 1,000,000 1,137,280
5.50%, 6/15/2014 1,000,000 1,158,440
Massachusetts Developmental Finance
Agency, RRR (Semass Systems ):
5.50%, 1/1/2011 (Insured; MBIA) 2,000,000 2,271,280
5.625%, 1/1/2014 (Insured; MBIA) 2,000,000 2,262,680
Massachusetts Educational Financing Authority,
Education Loan Revenue:
5.70%, 7/1/2011 (Insured; AMBAC) 1,235,000 1,376,309
5%, 1/1/2013 (Insured; AMBAC) 2,000,000 2,105,120
5.125%, 12/1/2014 (Insured; MBIA) 1,135,000 1,202,589
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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MASSACHUSETTS (CONTINUED)
Massachusetts Health and Educational
Facilities Authority, Revenue:
(Hallmark Health System)
5.25%, 7/1/2010 (Insured; FSA) 2,055,000 2,258,466
(Harvard Pilgrim Health)
5.25%, 7/1/2011 (Insured; FSA) 1,675,000 1,793,607
(Harvard University) 5.75%, 1/15/2012 1,595,000 1,871,685
(Healthcare System--Covenant Health)
6.50%, 7/1/2017 1,485,000 1,675,555
(New England Medical Center Hospitals)
4.90%, 7/1/2006 (Insured; MBIA) 1,365,000 1,425,142
(Partners Healthcare System):
5.125%, 7/1/2011 (Insured; MBIA) 1,000,000 1,088,250
5%, 7/1/2018 1,315,000 1,366,877
(Springfield College Radianassurance)
4%, 10/15/2006 1,180,000 1,256,098
(Tufts University) 5.50%, 8/15/2012 500,000 576,695
(University of Massachusetts--Worcester Campus)
5.25%, 10/1/2014 (Insured; FGIC) 1,000,000 1,109,440
(Wellesley College) 5%, 7/1/2018 1,880,000 2,028,106
Massachusetts Housing Finance Agency, Housing Revenue
3.05%, 6/1/2004 2,650,000 2,686,756
Massachusetts Municipal Wholesale Electric Co.,
Power Supply Systems Revenue:
(Nuclear Project No. 4)
5.25%, 7/1/2014 (Insured; MBIA) 2,000,000 2,217,580
(Project No. 6) 5.25%, 7/1/2012 (Insured; MBIA) 1,810,000 2,037,481
Massachusetts Port Authority, Revenue
(Delta Airlines, Inc. Project) 5.50%, 1/1/2017 2,000,000 2,137,160
Massachusetts Water Pollution Abatement Trust,
Water Pollution Abatement Revenue
(MWRA Program):
5.40%, 8/1/2011 2,425,000 2,803,518
6.00%, 8/1/2014 1,300,000 1,521,286
(Pool Loan Program)
5.70%, 2/1/2012 (Prerefunded 2/1/2005) 2,025,000 (a) 2,189,653
Massachusetts Water Resource Authority
5.50%, 8/1/2011 (Insured; MBIA) 2,000,000 2,307,060
Medford 5%, 3/15/2013 (Insured; AMBAC) 1,040,000 1,150,864
New England Education Loan Marketing Corp.,
Student Loan Revenue 6.90%, 11/1/2009 1,000,000 1,125,640
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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MASSACHUSETTS (CONTINUED)
Norwood:
5%, 1/15/2014 780,000 856,245
5%, 1/15/2015 780,000 853,616
Plymouth County, COP (Correctional Facility Project):
5.125%, 4/1/2013 (Insured; AMBAC) 2,000,000 2,193,060
5%, 4/1/2015 (Insured; AMBAC) 1,500,000 1,620,105
Route 3 North Transportation Improvement Association, LR
5.75%, 6/15/2015 (Insured; MBIA) 1,500,000 1,711,695
Springfield
(Municipal Purpose Loan)
5%, 8/1/2018 ( Insured; FGIC) 1,000,000 1,075,030
Sudbury 5%, 6/1/2015 1,165,000 1,267,543
Triton School District 5%, 4/1/2016 (Insured; FGIC) 1,420,000 1,544,435
Woods Hole Marthas Vineyard & Nantucket
4%, 3/1/2006 1,315,000 1,395,780
U. S. RELATED--23.3%
Childrens Trust Fund, Tobacco Settlement Revenue:
5.75%, 7/1/2013 (Prerefunded 7/1/2010) 2,000,000 (a) 2,361,980
5.75%, 7/1/2014 (Prerefunded 7/1/2010) 2,000,000 (a) 2,361,980
Guam Economic Development Authority,
Tobacco Settlement:
0/5%, 5/15/2009 860,000 (b) 686,753
0/5.40%, 5/15/2015 350,000 (b) 265,769
Guam Government, LOR, (Infrastructure Improvement)
5%, 11/1/2012 (Insured; AMBAC) 1,000,000 1,098,130
Puerto Rico Commonwealth:
5%, 7/1/2005 2,450,000 2,602,366
5.375%, 7/1/2005 80,000 85,912
5.375%, 7/1/2005 920,000 983,158
5%, 7/1/2021 (Insured;FSA) 2,000,000 2,236,000
(Public Improvement):
5.50%, 7/1/2011 1,000,000 1,130,370
5.50%, 7/1/2013 (Insued; FSA) 1,500,000 1,752,060
5.25%, 7/1/2014 (Insued; FSA) 1,000,000 1,150,320
Puerto Rico Commonwealth Highway and
Transportation Authority Transportation Revenue
5.50%, 7/1/2010 (Insured; AMBAC) 1,885,000 2,189,786
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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U. S. RELATED (CONTINUED)
Puerto Rico Electric Power Authority, Power Revenue
5.50%, 7/1/2008 1,000,000 1,119,110
Puerto Rico Housing Finance Authority,
Home Mortgage Revenue 4.375%, 12/1/2017 1,000,000 1,000,340
Puerto Rico Municipal Finance Agency
5%, 7/1/2009 (Insured; FSA) 1,725,000 1,934,432
Virgin Islands Public Finance Authority, Revenue:
6%, 10/1/2004 965,000 999,026
5.625%, 10/1/2010 1,000,000 1,093,800
5.875%, 10/1/2018 500,000 510,195
Virgin Islands Water and Power Authority,
Electric Systems 5.125%, 7/1/2011 1,000,000 1,069,930
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TOTAL INVESTMENTS (cost $106,025,457) 98.8% 112,930,984
CASH AND RECEIVABLES (NET) 1.2% 1,321,048
NET ASSETS 100.0% 114,252,032
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
FGIC Financial Guaranty Insurance
Company
FSA Financial Security Assurance
LOR Limited Obligation Revenue
LR Lease Revenue
MBIA Municipal Bond Investors
Assurance Insurance
Corporation
RRR Resource Recovery Revenue
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
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AAA Aaa AAA 67.7
AA Aa AA 19.1
A A A 7.7
BBB Baa BBB 1.8
F1 MIG1/P1 SP1/A1 2.4
Not Rated (c) Not Rated (c) Not Rated (c) 1.3
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) ZERO COUPON UNTIL A SPECIFIED DATE AT WHICH TIME THE STATED COUPON BECOMES
EFFECTIVE UNTIL MATURITY.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S,
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2003 (Unaudited)
Cost Value
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ASSETS ($):
Investments in securities--See Statement of
Investments 106,025,457 112,930,984
Interest receivable 1,492,182
Receivable for shares of Beneficial Interest subscribed 860
Prepaid expenses 9,187
114,433,213
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LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 63,806
Cash overdraft due to Custodian 6,334
Payable for shares of Beneficial Interest redeemed 83,766
Accrued expenses 27,275
181,181
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NET ASSETS ($) 114,252,032
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 109,742,434
Accumulated undistributed investment income--net 10,953
Accumulated net realized gain (loss) on investments (2,406,882)
Accumulated net unrealized appreciation
(depreciation) on investments 6,905,527
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NET ASSETS ($) 114,252,032
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
8,046,857
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 14.20
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended September 30, 2003 (Unaudited)
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INVESTMENT INCOME ($):
INTEREST INCOME 2,608,955
EXPENSES:
Management fee--Note 3(a) 365,614
Shareholder servicing costs--Note 3(b) 54,153
Professional fees 26,737
Custodian fees 9,801
Prospectus and shareholders' reports 8,171
Registration fees 7,502
Trustees' fees and expenses--Note 3(c) 7,308
Loan commitment fees--Note 2 577
Miscellaneous 9,390
TOTAL EXPENSES 489,253
Less--reduction in management fee due to
undertaking--Note 3(a) (12,033)
NET EXPENSES 477,220
INVESTMENT INCOME--NET 2,131,735
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 359,395
Net unrealized appreciation (depreciation) on investments (23,738)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 335,657
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,467,392
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
September 30, 2003 Year Ended
(Unaudited) March 31, 2003
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 2,131,735 4,626,540
Net realized gain (loss) on investments 359,395 226,346
Net unrealized appreciation (depreciation)
on investments (23,738) 5,850,985
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,467,392 10,703,871
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (2,127,824) (4,655,241)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 15,705,938 31,357,146
Dividends reinvested 1,740,270 3,801,274
Cost of shares redeemed (31,861,617) (31,535,327)
INCREASE (DECREASE) IN NET ASSETS
FROM BENEFICIAL INTEREST TRANSACTIONS (14,415,409) 3,623,093
TOTAL INCREASE (DECREASE) IN NET ASSETS (14,075,841) 9,671,723
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 128,327,873 118,656,150
END OF PERIOD 114,252,032 128,327,873
Undistributed investment income--net 10,953 --
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,108,522 2,244,305
Shares issued for dividends reinvested 123,079 271,932
Shares redeemed (2,256,851) (2,254,724)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,025,250) 261,513
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
Six Months Ended Year Ended March 31,
September 30, 2003 ----------------------------------------------------------------
(Unaudited) 2003 2002(a) 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 14.15 13.47 13.70 13.12 13.71 13.59
Investment Operations:
Investment income--net .25(b) .51(b) .54(b) .59 .59 .58
Net realized and unrealized
gain (loss) on investments .05 .69 (.23) .58 (.59) .12
Total from Investment Operations .30 1.20 .31 1.17 -- .70
Distributions:
Dividends from
investment income--net (.25) (.52) (.54) (.59) (.59) (.58)
Net asset value, end of period 14.20 14.15 13.47 13.70 13.12 13.71
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TOTAL RETURN (%) 2.12(c) 9.09 2.19 9.11 .03 5.25
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses
to average net assets .78(d) .76 .75 .80 .80 .80
Ratio of net investment income
to average net assets 3.49(d) 3.68 3.92 4.40 4.42 4.25
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation .02(d) -- -- .05 .11 .09
Portfolio Turnover Rate 10.36(c) 33.40 14.45 12.85 15.05 13.04
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Net Assets, end of period
($ x 1,000) 114,252 128,328 118,656 81,905 65,375 70,957
(A) AS REQUIRED, EFFECTIVE APRIL 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 MARCH 31,
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 INCREASED THE RATIO OF NET INVESTMENT INCOME TO AVERAGE NET
ASSETS BY LESS THAN .01%. PER SHARE DATA AND RATIOS/SUPPLEMENTAL DATA FOR
PERIODS PRIOR TO APRIL 1, 2001 HAVE NOT BEEN RESTATED TO REFLECT THIS
CHANGE IN PRESENTATION.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
(D) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Massachusetts Intermediate Municipal Bond Fund (the "fund") is
registered under the Investment Company Act of 1940, as amended (the "Act"), as
a non-diversified open-end management investment company. The fund's investment
objective is to provide investors with as high a level of current income exempt
from federal and Massachusetts state income taxes as is consistent with the
preservation of capital. The Dreyfus Corporation (the "Manager") serves as the
fund's investment adviser. The Manager is a 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, which are sold to the
public without a sales charge.
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.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(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 discount and premium 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
receives net earnings credits based on available cash balances left on deposit
The fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the fund to declare dividends
daily from investment income-net. Such dividends are paid monthly. Dividends
from net realized capital gain, 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.
Income and capital gain distributions are determined in accordance with income
tax regulations, which may differ from accounting principles generally accepted
in the United States.
(D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all federal income and excise taxes.
The fund has an unused capital loss carryover of $2,762,325 available for
federal income tax purposes to be applied against future net securities profits,
if any, realized subsequent to March 31, 2003. If no
applied, $2,106,696 of the carryover expires in fiscal 2004, $306,043 expires in
fiscal 2005, $111,775 expires in fiscal 2009 and $237,811 expires in fiscal
2011.
The tax character of distributions paid to shareholder during the fiscal year
ended September 30, 2003, was as follows: tax exempt income $4,655,241. 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 at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
September 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 .60 of 1% of the value of the fund's average
daily net assets and is payable monthly. The manager had undertaken from April
1, 2003 through October 31, 2003, to reduce the management fee paid by the fund,
to the extent that, if the fund's aggregate annual expenses, exclusive of taxes,
brokerage fees, interest on borrowings, commitment fees and extraordinary
expenses, exceed an annual rate of .80 of 1% of the value of the fund's average
daily net assets. The reduction in management fee, pursuant to the undertaking,
amounted to $12,033 during the period ended September 30, 2003.
(B) Under the Shareholder Services Plan, the fund reimburses the Distributor an
amount not to exceed an annual rate of .25 of 1% of the value of the fund's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
accounts. 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. During the period September 30, 2003, the
fund was charged $24,940 pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended September 30, 2003, the fund was charged $14,497 pursuant to the transfer
agency agreement.
(C) 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 $25,000,
an attendance fee of $4,000 for each in-person meeting and $500 for telephone
meetings. 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. These fees are allocated
among the funds in the Fund Group in proportion to each fund's relative net
assets.
(D) A 1% redemption fee is charged and retained by the fund on shares redeemed
within thirty days following the date of issuance, including redemptions made
through the use of the fund' s exchange privilege. During the period ended
September 30, 2003, redemption fees charged and retained by the fund amounted to
$6,462.
NOTE 4--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended September 30, 2003, amounted to
$12,427,267 and $29,010,809, respectively.
At September 30, 2003, accumulated net unrealized appreciation on investments
was $6,905,527, consisting of $6,975,280 gross unrealized appreciation and
$69,753 gross unrealized depreciation.
At September 30, 2003, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
NOTES
For More Information
Dreyfus
Massachusetts Intermediate
Municipal Bond Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to info@dreyfus.com
ON THE INTERNET Information
can be viewed online or
downloaded from:
http://www.dreyfus.com
(c) 2003 Dreyfus Service Corporation 268SA0903
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. Audit Committee of Listed Registrants.
Not applicable.
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) The Registrant's principal executive and principal financial officers
have concluded, based on their evaluation of the Registrant's disclosure
controls and procedures as of a date within 90 days of the filing date of this
report, that the Registrant's disclosure controls and procedures are reasonably
designed to ensure that information required to be disclosed by the Registrant
on Form N-CSR is recorded, processed, summarized and reported within the
required time periods and that information required to be disclosed by the
Registrant in the reports that it files or submits on Form N-CSR is accumulated
and communicated to the Registrant's management, including its principal
executive and principal financial officers, as appropriate to allow timely
decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over
financial reporting that occurred during the Registrant's most recently ended
fiscal half-year that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial reporting.
Item 10. Exhibits.
(a)(1) Not applicable.
(a)(2) Certifications of principal executive and principal financial officers
as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(b) Certification of principal executive and principal financial officers as
required by Rule 30a-2(b) 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 MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND
By: /S/STEPHEN E. CANTER
Stephen E. Canter
President
Date: November 21, 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: November 21, 2003
By: /S/JAMES WINDELS
James Windels
Chief Financial Officer
Date: November 21, 2003
EXHIBIT INDEX
(a)(2)Certifications of principal executive and principal
financial officers as required by Rule 30a-2(a) under the Investment
Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal
financial officers as required by Rule 30a-2(b) under the Investment
Company Act of 1940. (EX-99.906CERT)