-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OOE0+cZgNtV9I6Xbrwt3aYJ9xX84m3Gfu2sRLkTKmuJQJj8s1q+J5c0k7Rw7cGij Z/mORC6um2pcm3/cgzqdIQ== 0000897469-03-000002.txt : 20030131 0000897469-03-000002.hdr.sgml : 20030131 20030131095028 ACCESSION NUMBER: 0000897469-03-000002 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021130 FILED AS OF DATE: 20030131 EFFECTIVENESS DATE: 20030131 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DREYFUS INTERNATIONAL FUNDS INC CENTRAL INDEX KEY: 0000897469 IRS NUMBER: 133718039 STATE OF INCORPORATION: MD FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07502 FILM NUMBER: 03533307 BUSINESS ADDRESS: STREET 1: 200 PARK AVENUE STREET 2: C/O DREYFUS CORPORATION CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2129226838 MAIL ADDRESS: STREET 1: DREYFUS CORP STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS INTERNATIONAL EQUITY FUND INC DATE OF NAME CHANGE: 19930212 N-30D 1 pn30d327.txt SEMI-ANNUAL REPORT Dreyfus Premier Emerging Markets Fund SEMIANNUAL REPORT November 30, 2002 The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value Contents THE FUND - -------------------------------------------------- 2 Letter from the Chairman 3 Discussion of Fund Performance 6 Statement of Investments 12 Statement of Assets and Liabilities 13 Statement of Operations 14 Statement of Changes in Net Assets 16 Financial Highlights 18 Notes to Financial Statements FOR MORE INFORMATION - --------------------------------------------------------------------------- Back Cover The Fund Dreyfus Premier Emerging Markets Fund LETTER FROM THE CHAIRMAN Dear Shareholder: We present this semiannual report for Dreyfus Premier Emerging Markets Fund, covering the six-month period from June 1, 2002 through November 30, 2002. Inside, you' ll find valuable information about how the fund was managed during the reporting period, including a discussion with the fund's portfolio manager, D. Kirk Henry. As we approach year-end, it appears likely that 2002 will be the third consecutive year of negative returns for many overseas stock markets. Investor confidence has been shaken, and understandably so, in the aftermath of the speculative bubble of the late 90s and the 2001 recession. However, we believe the current market environment may provide opportunities to invest when prices are low and stocks are, in effect, "on sale." According to our economists and stock analysts, the global economy appears to be gathering momentum. The deleveraging of corporate debt, which occurred throughout 2002 as companies adjusted accounting procedures and lenders tightened credit policies, seems to be proceeding in an orderly fashion. And stocks, which had declined sharply in the second and third quarters, have generally rallied so far in the fourth quarter. In our view, these signs point to a likely rebound for equities in 2003. Of course, risks remain, including those presented by terrorism and heightened tensions in the Middle East. Managing the effects of such risks is an important reason for staying in close touch with your financial advisor, to ensure that your portfolio reflects your investment needs, long-term goals and attitudes toward risk. Thank you for your continued confidence and support. Sincerely, Stephen E. Canter Chairman and Chief Executive Officer The Dreyfus Corporation December 16, 2002 DISCUSSION OF FUND PERFORMANCE D. Kirk Henry, Portfolio Manager How did Dreyfus Premier Emerging Markets Fund perform relative to its benchmark For the six-month period ended November 30, 2002, the fund's Class A shares produced a -12.85% total return.(1) In comparison, the fund's benchmark, the Morgan Stanley Capital International Emerging Markets Free Index ("MSCI EMF Index"), produced a total return of -11.89% for the same period.(2) Between their inception on November 15, 2002 and the end of the fund's reporting period on November 30, 2002, the fund's Class B, Class C, Class R and Class T shares achieved total returns of 5.17% , 5.07% , 5.17% , and 5.07% , respectively.(1) Since the fund's benchmark is calculated on a month-end basis, the MSCI EMF Index achieved a total return of 6.88% from the period of November 1, 2002 through November 30, 2002.(2) We attribute the fund's absolute performance to a difficult global investment environment. However, the fund's slight underperformance of its benchmark was due to its underweighted position in certain technology stocks relative to the MSCI EMF Index. What is the fund's investment approach? The fund seeks long-term capital growth. To pursue this goal, the fund invests primarily in the stock of companies organized, or with a majority of assets or businesses, in emerging market countries. "Emerging market" countries consist of all countries represented in the MSCI EMF Index or any other country Dreyfus believes has an emerging economy or market. Normally, the fund will not invest more than 25% of its total assets in the securities of companies in any one emerging market country. We use a value-oriented and research-driven approach to security selection within each market, investing in companies located in emerging market countries as represented in our benchmark, the MSCI EMF Index, or in any other country that we believe has an emerging market or economy. The Fund DISCUSSION OF FUND PERFORMANCE (CONTINUED) When choosing stocks for the fund, we begin by conducting fundamental and quantitative research that focuses on individual companies rather than broad economic and industry trends. More specifically, we look for investment opportunities by focusing on three key factors: VALUE, or how a stock is valued relative to its intrinsic worth based on traditional measures; BUSINESS HEALTH, or a company's overall efficiency and profitability as measured by its return on assets and return on equity; and BUSINESS MOMENTUM, or the presence of a catalyst that will potentially trigger an increase in the stock's price in the near- or midterm. What other factors influenced the fund's performance? The reporting period was very difficult for global stocks. Prices declined sharply, because of uncertainty regarding a potential war in Iraq, lackluster corporate profits and a weak global economy. However, stocks in the emerging markets generally declined less than those in the developed markets. Many emerging market countries have been developing stronger domestic economies over the past several years, and as a result their economies have become less sensitive to the effects of global economic weakness on exporters. The fund' s absolute and relative declining stock prices in many markets hurt performance. In hindsight, limiting the fund's exposure to large South Korean electronics companies hindered the fund's relative performance. We believed that these stocks were highly valued relative to their earnings potential. However, after languishing for most of the reporting period, these stocks generally posted fairly strong returns in October and November, chiefly because investors returning to the stock market were looking for stocks that had been severely punished. While the fund was invested in these stocks, it had less exposure to them relative to its benchmark. In an otherwise gloomy environment, relatively bright spots around the world included Central and Eastern Europe. Before 10 more European countries were permitted to join the European Monetary Union, they were required to implement a number of political, financial and economic reforms, resulting in improving investor confidence in those markets. The fund's relative performance also benefited from investments in India, where consumer stocks posted relatively strong returns, including an auto and scooter manufacturer and a tobacco company. One of the fund's top-10 holdings, an oil and gas exploration company, performed well because of a significant discovery of gas off the coast of India. Finally, the fund' s basic materials stocks held up relatively well throughout the reporting period. For example, we scored successes with a major gold company in South Africa, a Taiwanese steel company, and a cement company in Turkey What is the fund's current strategy? We continue to look for stocks with what we believe are strong business fundamentals and attractive valuations. As of the end of the reporting period, we have found more opportunities in India and Mexico and fewer opportunities in South Korea and Taiwan. Consistent with our strategy, we continue to look for undiscovered value in every market. We also recently took profits in several technology stocks that rallied late in the reporting period and have redeployed some of those assets to other more attractively priced technology companies and opportunities in China. December 16, 2002 (1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGES IN THE CASE OF CLASS A AND CLASS T 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. Part of the fund's recent performance is attributable to positive returns from its initial public offering (IPO) investments. There can be no guarantee that IPOs will have or continue to have a positive effect on the fund's performance. (2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF GROSS DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS FREE (MSCI EMF) INDEX IS A MARKET CAPITALIZATION-WEIGHTED INDEX COMPOSED OF COMPANIES REPRESENTATIVE OF THE MARKET STRUCTURE OF 26 EMERGING MARKET COUNTRIES IN EUROPE, LATIN AMERICA AND THE PACIFIC BASIN. The Fund
November 30, 2002 (Unaudited) STATEMENT OF INVESTMENTS COMMON STOCKS--94.6% Shares Value ($) - -------------------------------------------------------------------------------- ARGENTINA--.3% Perez Companc, ADR 280,416 (a) 1,505,834 BRAZIL--6.6% Banco Itau, ADR 187,700 3,937,946 Companhia de Saneamento Basico do Estado de Sao Paulo 123,580 2,758,182 Empresa Brasileira de Aeronautica, ADR 164,500 2,404,990 Petroleo Brasileiro, ADR 668,319 8,754,979 Tele Celular Sul Participacoes, ADR 220,050 1,606,365 Tele Norte Leste Participacoes, ADR 462,539 3,399,662 Telecomunicacoes Brasileiras, ADR 248,220 4,443,138 Ultrapar Participacoes, ADR 264,200 1,820,338 Unibanco, GDR 269,100 2,351,934 31,477,534 CHILE--.4% Quinenco, ADR 447,200 1,931,904 CHINA--3.8% Aluminum Corporation of China 25,042,000 3,371,644 China Oilfield Services 940,000 222,989 PetroChina, Cl. H 23,892,000 4,564,804 Qingling Motors, Cl. H 20,097,000 2,319,301 Shandong International Power Development, Cl. H 13,774,000 3,037,889 Sinopec Shanghai Petrochemical 13,570,000 (a) 1,931,462 Sinopec Shanghai Petrochemical, ADR 3,300 (a) 45,342 Sinopec Yizheng Chemical Fibre, Cl. H 19,732,400 (a) 2,504,946 17,998,377 CROATIA--.9% Pliva d.d., GDR 304,800 (b) 4,456,176 CZECH REPUBLIC--.7% CEZ 1,144,000 3,376,578 Komercni Banka, GDR 2 (b) 46 3,376,624 EGYPT--1.6% Commercial International Bank, GDR 533,900 (b) 2,669,500 Misr International Bank, GDR 594,075 (b) 846,557 Orascom Construction Industries 320,241 1,700,578 Suez Cement, GDR 440,931 (b) 2,336,934 7,553,569 COMMON STOCKS (CONTINUED) Shares Value ($) - -------------------------------------------------------------------------------- HONG KONG--3.2% Brilliance China Automotive 11,280,500 1,865,956 China Mobile (Hong Kong) 3,179,500 (a) 8,419,033 China Mobile (Hong Kong), ADR 168,800 (a) 2,214,656 Shanghai Industrial 1,956,900 2,822,959 15,322,604 HUNGARY--2.5% EGIS 4,938 295,312 Gedeon Richter 81,534 4,479,235 MOL Magyar Olaj-es Gazipari 126,480 2,927,325 Magyar Tavkozlesi 1,177,673 4,359,110 12,060,982 INDIA--11.0% BSES 102,171 445,610 Bajaj Auto, GDR 241,900 (a,b) 2,358,525 Bharat Petroleum 592,050 2,330,901 Gas Authority of India, GDR 473,300 (b) 3,904,725 Grasim Industries 215,000 1,275,832 Grasim Industries, GDR 108,200 (b) 687,070 Gujarat Ambuja Cements 130,000 442,527 Hindalco Industries 114,556 1,281,197 Hindalco Industries, GDR 246,200 (b) 2,782,060 ICICI Bank, ADR 553,500 3,321,000 ITC 267,372 3,493,344 Indian Hotels 423,614 1,427,259 Indian Hotels, GDR 52,250 (b) 176,344 Mahanagar Telephone Nigam 1,249,550 2,671,880 Mahanagar Telephone Nigam, ADR 1,241,800 5,054,126 Mahindra & Mahindra 300,000 648,475 Mahindra & Mahindra, GDR 905,500 (b) 1,946,825 Reliance Industries 1,532,819 9,088,005 Satyam Computer Services 328,557 1,724,991 State Bank of India 248,500 1,322,107 State Bank of India, GDR 185,500 (b) 2,226,000 Tata Engineering & Locomotive, GDR 1,129,200 (a,b) 3,952,200 52,561,003 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) - -------------------------------------------------------------------------------- INDONESIA--2.2% PT Gudang Garam 2,559,000 2,180,601 PT Indofood Sukses Makmur 37,130,500 2,378,172 PT Indonesian Satellite 2,466,500 2,294,099 PT Telekomunikasi Indonesia 9,297,000 3,676,341 10,529,213 ISRAEL--2.4% AudioCodes 402,900 (a) 906,525 Bank Hapoalim 4,089,493 6,458,020 Check Point Software Technologies 168,200 (a) 2,867,810 ECI Telecom 500,100 (a) 1,250,250 Koor Industries 7,812 (a) 107,903 11,590,508 MALAYSIA--2.3% Genting 488,100 1,707,856 Malaysia International Shipping 2,387,400 4,208,145 Sime Darby 3,922,800 5,056,883 10,972,884 MEXICO--10.3% Apasco 505,700 2,904,661 Cemex 703,981 3,259,813 Coca-Cola Femsa, ADR 195,200 4,311,968 Consorcio ARA 1,670,200 (a) 2,636,119 Controladora Comercial Mexicana 6,261,200 3,516,142 Desc, Ser. B 7,490,000 2,951,724 Grupo Aeroportuario del Sureste, ADR 207,200 2,192,176 Grupo Continental 1,655,250 2,454,336 Grupo Financiero BBVA Bancomer 4,606,500 (a) 3,553,586 Kimberly-Clark de Mexico, Cl. A 3,886,600 9,324,011 Telefonos de Mexico, Ser L, ADR 374,470 12,072,913 49,177,449 PANAMA--.1% Banco Latinoamericano de Exportaciones, Cl. E 119,900 (a) 431,640 PHILIPPINES--1.5% ABS-CBN Broadcasting 3,943,600 (a) 1,142,005 Bank of the Philippine Islands 1,847,390 1,346,066 Manila Electric, Cl. B 7,754,764 (a) 1,485,032 Philippine Long Distance Telephone 219,870 (a) 1,191,262 COMMON STOCKS (CONTINUED) Shares Value ($) - -------------------------------------------------------------------------------- PHILIPPINES (CONTINUED) Philippine Long Distance Telephone, ADR 249,550 (a) 1,352,561 Universal Robina 7,937,160 459,695 6,976,621 POLAND--3.4% Bank Przemyslowo-Handlowy PBK 50,751 3,449,956 KGHM Polska Miedz 1,740,982 (a) 6,112,511 Polski Koncern Naftowy Orlen 773,043 3,599,578 Telekomunikacja Polska 819,288 (a) 2,856,084 16,018,129 RUSSIA--1.2% LUKOIL, ADR 84,300 5,632,294 SOUTH AFRICA--7.2% ABSA 1,180,705 4,580,321 Aveng 1,395,307 1,503,564 Bidvest 916,423 4,542,614 Metro Cash and Carry 8,164,335 (a) 2,199,444 Nampak 3,579,124 5,881,642 Nedcor 572,191 7,226,994 Sage 462,535 139,558 Shoprite 2,181,701 1,833,757 Steinhoff International 2,863,984 2,175,764 Tiger Brands 544,215 4,368,967 34,452,625 SOUTH KOREA--18.8% CJ 102,230 4,132,102 Cheil Communications 29,640 2,973,416 Hyundai Development 558,500 (a) 3,394,328 Hyundai Motor 179,670 5,272,042 KT, ADR 294,050 6,336,778 Kookmin Bank 132,900 5,105,129 Kookmin Bank, ADR 115,534 4,459,612 Korea Electric Power 851,930 13,959,060 Korea Exchange Bank Credit Services 343,700 3,864,542 Korea Fine Chemical 56,556 617,000 Korea Tobacco & Ginseng, GDR 617,200 (b) 4,733,924 POSCO 47,370 4,930,250 POSCO, ADR 95,990 2,479,422 The Fund STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED) COMMON STOCKS (CONTINUED) Shares Value ($) - -------------------------------------------------------------------------------- SOUTH KOREA (CONTINUED) SK 756,769 9,679,456 Samsung 760,340 (a) 4,957,910 Samsung Electronics 22,510 7,282,536 Samsung Electronics, GDR 3,500 (b) 562,625 Samsung SDI 68,660 5,022,363 89,762,495 TAIWAN--7.6% Advanced Semiconductor Engineering 5,212,100 (a) 3,438,695 Asustek Computer 2,929,000 5,991,328 Elan Microelectronics 2,567,653 1,908,541 Nan Ya Plastics 3,702,989 3,285,856 Powerchip Semiconductor, GDR 293,300 (a,b) 1,016,284 SinoPac 10,700,763 (a) 4,254,409 Standard Foods Taiwan 2,816,984 706,072 Standard Foods Taiwan, GDR 978 (b) 1,198 Taiwan Cellular 4,052,990 3,211,098 United Microelectronics 11,050,100 (a) 8,181,722 Yageo 13,968,200 (a) 4,305,956 36,301,159 THAILAND--3.0% Big C Supercenter 785,000 (a) 357,352 Hana Microelectronics 952,400 1,532,774 PTT Exploration and Production 1,185,000 3,541,786 Siam Commercial Bank 5,618,000 (a) 3,842,637 Siam Makro 455,000 373,980 Thai Farmers Bank 5,942,600 (a) 4,440,384 14,088,913 TURKEY--.8% Akcansa Cimento 80,897,900 892,197 Tupras-Turkiye Petrol Rafinerileri 357,438,000 2,439,453 Turk Ekonomi Bankasi, ADR 234,225 (a,b) 392,327 3,723,977 COMMON STOCKS (CONTINUED) Shares Value ($) - -------------------------------------------------------------------------------- UNITED KINGDOM--2.8% Anglo American 389,032 5,476,510 Dimension Data 4,001,028 (a) 1,587,018 Old Mutual 4,518,633 6,536,722 13,600,250 TOTAL COMMON STOCKS (cost $490,752,505) 451,502,764 - ------------------------------------------------------------------------------------------------------------------------------------ PREFERRED STOCKS--.7% - -------------------------------------------------------------------------------- BRAZIL; Companhia Energetica de Minas Gerais (cost $6,876,640) 524,217 3,374,456 - ------------------------------------------------------------------------------------------------------------------------------------ Principal SHORT-TERM INVESTMENTS--2.8% Amount ($) Value ($) - ------------------------------------------------------------------------------------------------------------------------------------ U.S. TREASURY BILLS: 1.18%, 2/6/2003 100,000 99,789 1.17%, 2/13/2003 200,000 199,532 1.19%, 2/20/2003 3,058,000 3,050,110 1.17%, 2/27/2003 10,179,000 10,149,888 TOTAL SHORT-TERM INVESTMENTS (cost $13,498,926) 13,499,319 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS (cost $511,128,071) 98.1% 468,376,539 CASH AND RECEIVABLES (NET) 1.9% 9,179,461 NET ASSETS 100.0% 477,556,000 (A) NON-INCOME PRODUCING. (B) 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 NOVEMBER 30, 2002, THESE SECURITES AMOUNTED TO $35,049,320 OR 7.3% OF NET ASSETS. SEE NOTES TO FINANCIAL STATEMENTS.
The Fund STATEMENT OF ASSETS AND LIABILITIES November 30, 2002 (Unaudited) Cost Value - -------------------------------------------------------------------------------- ASSETS ($): Investments in securities--See Statement of Investments 511,128,071 468,376,539 Cash 4,710,786 Cash denominated in foreign currencies 7,411,868 7,289,620 Receivable for investment securities sold 1,973,577 Dividends receivable 669,826 Receivable for shares of Common Stock subscribed 631,990 Prepaid expenses 113,188 483,765,526 - -------------------------------------------------------------------------------- LIABILITIES ($): Due to The Dreyfus Corporation and affiliates 579,884 Payable for investment securities purchased 3,274,186 Payable for shares of Common Stock redeemed 1,996,722 Accrued expenses 358,734 6,209,526 - -------------------------------------------------------------------------------- NET ASSETS ($) 477,556,000 - -------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS ($): Paid-in capital 551,583,506 Accumulated undistributed investment income--net 3,525,933 Accumulated net realized gain (loss) on investments and foreign currency transactions (34,615,447) Accumulated net unrealized appreciation (depreciation) on investments and foreign currency transactions (42,937,992) - -------------------------------------------------------------------------------- NET ASSETS ($) 477,556,000
NET ASSET VALUE PER SHARE Class A Class B Class C Class R Class T - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets ($) 477,504,787 8,332 29,975 11,855 1,051 Shares Outstanding 41,930,138 732 2,633 1,040 92.25 - ------------------------------------------------------------------------------------------------------------------------------------ NET ASSET VALUE PER SHARE ($) 11.39 11.39 11.39 11.40 11.39 SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS Six Months Ended November 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- INVESTMENT INCOME ($): INCOME: CASH DIVIDENDS (NET OF $589,162 FOREIGN TAXES WITHHELD AT SOURCE) 4,782,222 EXPENSES: Management fee--Note 3(a) 2,979,561 Shareholder servicing costs--Note 3(c) 1,006,853 Custodian fees 529,057 Professional fees 70,356 Registration fees 59,604 Directors' fees and expenses--Note 3(d) 19,381 Prospectus and shareholders' reports 15,673 Interest expense--Note 2 7,768 Loan commitment fees--Note 2 4,264 Distribution fees--Note 3(b) 7 Miscellaneous 7,010 TOTAL EXPENSES 4,699,534 INVESTMENT INCOME--NET 82,688 - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($): Net realized gain (loss) on investments and foreign currency transactions (8,906,271) Net realized gain (loss) on forward currency exchange contracts (315,900) NET REALIZED GAIN (LOSS) (9,222,171) Net unrealized appreciation (depreciation) on investments and foreign currency transactions (61,107,772) NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (70,329,943) NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (70,247,255) SEE NOTES TO FINANCIAL STATEMENTS. The Fund STATEMENT OF CHANGES IN NET ASSETS Six Months Ended November 30, 2002(a) Year Ended (Unaudited) May 31, 2002 - -------------------------------------------------------------------------------- OPERATIONS ($): Investment income--net 82,688 6,853,401 Net realized gain (loss) on investments (9,222,171) (7,402,740) Net unrealized appreciation (depreciation) on investments (61,107,772) 50,455,232 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (70,247,255) 49,905,893 - -------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM ($): INVESTMENT INCOME--NET: CLASS A SHARES -- (3,999,902) - -------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS ($): Net proceeds from shares sold: Class A shares 372,867,714 380,384,003 Class B shares 8,000 -- Class C shares 29,000 -- Class R shares 11,401 -- Class T shares 1,000 -- Dividends reinvested: Class A shares -- 2,821,678 Cost of shares redeemed: Class A shares (354,790,605) (156,929,595) Redemption fee 222,234 89,862 INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 18,348,744 226,365,948 TOTAL INCREASE (DECREASE) IN NET ASSETS (51,898,511) 272,271,939 - -------------------------------------------------------------------------------- NET ASSETS ($): Beginning of Period 529,454,511 257,182,572 END OF PERIOD 477,556,000 529,454,511 Undistributed investment income--net 3,525,933 3,443,245 Six Months Ended November 30, 2002(a) Year Ended (Unaudited) May 31, 2002 - -------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS: CLASS A Shares sold 32,966,728 31,456,643 Shares issued for dividends reinvested -- 253,281 Shares redeemed (31,541,262) (13,279,259) NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,425,466 18,430,665 - -------------------------------------------------------------------------------- CLASS B SHARES SOLD 732 -- - -------------------------------------------------------------------------------- CLASS C SHARES SOLD 2,633 -- - -------------------------------------------------------------------------------- CLASS R SHARES SOLD 1,040 -- - -------------------------------------------------------------------------------- CLASS T SHARES SOLD 92 -- (A) THE FUND CHANGED TO A FIVE CLASS FUND ON NOVEMBER 15, 2002. THE EXISTING SHARES WERE REDESIGNATED CLASS A SHARES AND THE FUND ADDED CLASS B, CLASS C, CLASS R AND CLASS T SHARES. SEE NOTES TO FINANCIAL STATEMENTS. The Fund FINANCIAL HIGHLIGHTS The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund's financial statements.
Six Months Ended November 30, 2002(a) Year Ended May 31, --------------------------------------------------------------- CLASS A SHARES (Unaudited) 2002 2001 2000 1999 1998 - ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA ($): Net asset value, beginning of period 13.07 11.65 13.61 12.55 11.18 14.21 Investment Operations: Investment income--net .00(b,c) .25(b) .13(b) .22(b) .14 .04 Net realized and unrealized gain (loss) on investments (1.69) 1.33 (.37) 1.95 1.33 (2.62) Total from Investment Operations (1.69) 1.58 (.24) 2.17 1.47 (2.58) Distributions: Dividends from investment income--net -- (.16) (.13) (.11) (.09) (.02) Dividends from net realized gain on investments -- -- (1.59) (1.01) (.02) (.24) Dividends in excess of net realized gain on investments -- -- -- -- -- (.20) Total Distributions -- (.16) (1.72) (1.12) (.11) (.46) Redemption fee reimbursement .01 .00(c .00(c) .01 .01 .01 Net asset value, end of period 11.39 13.07 11.65 13.61 12.55 11.18 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN (%) (12.85)(d, 13.80 (.99) 16.54 13.56 (18.11) - ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets .99(e) 1.82 1.79 1.85 1.88 1.94 Ratio of net investment income to average net assets .02(e) 2.18 1.02 1.48 1.42 .54 Decrease reflected in above expense ratios due to undertakings by The Dreyfus Corporation -- -- -- -- -- .00(f) Portfolio Turnover Rate 27.48(e) 62.10 78.00 105.84 87.81 87.46 - ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period ($ x 1,000) 477,505 529,455 257,183 226,031 94,354 74,828 (A) THE FUND CHANGED TO A FIVE CLASS FUND ON NOVEMBER 15, 2002. THE EXISTING SHARES WERE REDESIGNATED CLASS A SHARES.( (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE. (D) EXCLUSIVE OF SALES CHARGE. (E) NOT ANNUALIZED. (F) AMOUNT REPRESENTS LESS THAN .01%. SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended November 30, 2002 (Unaudited)(a) -------------------------------------------- Class B Class C Class R Class T - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE DATA ($): Net asset value, beginning of period 10.84 10.84 10.84 10.84 Investment Operations: Investment (loss)--net(b) (.01) (.01) (.01) (.01) Net realized and unrealized gain (loss) on investments .56 .56 .57 .56 Total from Investment Operations .55 .55 .56 .55 Net asset value, end of period 11.39 11.39 11.40 11.39 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN (%) 5.17(c,d) 5.07(c,d) 5.17(c) 5.07(c,d) - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA (%): Ratio of expenses to average net assets(c) .13 .14 .10 .10 Ratio of net investment (loss) to average net assets(c) (.13) (.11) (.07) (.07) Portfolio Turnover Rate(c) 27.48 27.48 27.48 27.48 - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets, end of period ($ x 1,000) 8 30 12 1 (A) FROM NOVEMBER 15, 2002 (COMMENCEMENT OF INITIAL OFFERING) TO NOVEMBER 30, 2002. (B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (C) NOT ANNUALIZED. (D) EXCLUSIVE OF SALES CHARGE. SEE NOTES TO FINANCIAL STATEMENTS.
The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1--Significant Accounting Policies: Dreyfus Premier Emerging Markets Fund (the "fund") is a separate non-diversified series of Dreyfus International Funds, Inc. (the "Company"), which is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company and operates as a series company that offers one series, the fund. The fund's investment objective is long-term capital growth. The Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A, which is a wholly-owned subsidiary of Mellon Financial Corporation. On September 9, 2002, the Company' s Board of Directors approved, effective November 15, 2002, a change of the fund's name from "Dreyfus Emerging Markets Fund" to "Dreyfus Premier Emerging Markets Fund," coinciding with the fund implementing a multiple class structure. Shareholders, on November 15, 2002, were classified as Class A shareholders and the fund added Class B, Class C, Class R and Class T shares. 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 100 million shares of $.001 par value Common Stock in each of the following classes of shares: Class A, Class B, Class C, Class R and Class T. Class A and Class T 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 automatically convert to Class A shares after six years. Class C shares are subject to a CDSC on Class C shares redeemed within one year of purchase and Class R shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class and certain voting rights. The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. 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 (including options and financial futures) are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Directors. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate. (B) FOREIGN CURRENCY TRANSACTIONS: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions and the difference between the amount of dividends, interest and foreign withholding taxes recorded on the fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments. The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED) (C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount and premium on investments, is recognized on the accrual basis. Under the terms of the custody agreement, the fund receives net earnings credits based on available cash balances left on deposit. (D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and 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. (E) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes. The fund has an unused capital loss carryover of $14,764,482 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to May 31, 2002. If not applied the carryover expires in fiscal 2010. The tax character of distributions paid to shareholders during the fiscal year ended May 31, 2002, was as follows: ordinary income $3,999,902. The tax character of current year distributions, if any, 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 redemp tions. 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. The average daily amount of borrowings outstanding under the Facility during the period ended November 30, 2002, was approximately $691,800, with a related weighted average annualized interest rate of 2.24%. 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 1.25% of the value of the fund's average daily net assets and is payable monthly. (B) Under a Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1 under the Act, Class B, Class C and Class T shares pay the Distributor for distributing their shares at the annual rates of .75 of 1% of the value of the average daily net assets of Class B and Class C shares and .25 of 1% of the value of the average daily net assets of Class T shares. During the period ended November 30, 2002, Class B, Class C and Class T shares were charged $2, $5 and $0 respectively, pursuant to the Plan. (C) Under the Shareholder Services Plan, Class A, Class B, Class C and Class T shares pay the Distributor at an annual rate of .25 of 1% of the value of their average daily net assets 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 November 30, 2002, Class A, Class B, Class C and Class T shares were charged $595,908, $1, $2 and $0, respectively, pursuant to the Shareholder Services Plan. The Fund NOTES TO FINANCIAL STATEMENTS (Unaudited) (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 November 30, 2002, the fund was charged $66,201 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 $40,000 and an attendance fee of $6,000 for each in person meeting and $500 for telephone meetings. These fees are allocated among the funds in the Fund Group. The Chairman of the Board receives an additional 25% of such compensation. Subject to the Company's Emeritus Program Guidelines, Emeritus Boards members, if any, receive 50% of the annual retainer fee and per meeting fee paid at the time the Board member achieves emeritus status. (E) A 1% redemption fee was 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 until November 15, 2002. NOTE 4--Securities Transactions: (A) The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward currency exchange contracts, during the period ended November 30, 2002, amounted to $149,529,237 and $125,982,125, respectively. The fund enters into forward currency exchange contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings and to settle foreign currency transactions. When executing forward currency exchange contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward currency exchange contracts, the fund would incur a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract decreases between those dates. With respect to purchases of forward currency exchange contracts, the fund would incur a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract increases between those dates. The fund is also exposed to credit risk associated with counterparty nonperformance on these forward currency exchange contracts which is typically limited to the unrealized gain on each open contract. There were no forward currency exchange contracts outstanding at November 30, 2002. At November 30, 2002, accumulated net unrealized depreciation on investments was $42,751,532, consisting of $41,760,961 gross unrealized appreciation and $84,512,493 gross unrealized depreciation. At November 30, 2002, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the statement of Investments). The Fund NOTES For More Information Dreyfus Premier Emerging Markets 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 327SA1102 -----END PRIVACY-ENHANCED MESSAGE-----