STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
Year Ended December 31,
|
|
|
2012
|
a
|
2011
|
|
Operations ($):
|
|
|
|
|
Investment income—net
|
79,572,107
|
|
78,174,534
|
|
Net realized gain (loss) on investments
|
(3,050,539
|
)
|
7,818,566
|
|
Net unrealized appreciation
|
|
|
|
|
(depreciation) on investments
|
90,822,488
|
|
(68,339,253
|
)
|
Net Increase (Decrease) in Net Assets
|
|
|
|
|
Resulting from Operations
|
167,344,056
|
|
17,653,847
|
|
Dividends to Shareholders from ($):
|
|
|
|
|
Investment income—net:
|
|
|
|
|
Class A Shares
|
(23,836,494
|
)
|
(27,635,290
|
)
|
Class B Shares
|
(29,726
|
)
|
(409,291
|
)
|
Class C Shares
|
(7,267,383
|
)
|
(8,787,269
|
)
|
Class I Shares
|
(51,923,666
|
)
|
(43,654,301
|
)
|
Total Dividends
|
(83,057,269
|
)
|
(80,486,151
|
)
|
Beneficial Interest Transactions ($):
|
|
|
|
|
Net proceeds from shares sold:
|
|
|
|
|
Class A Shares
|
153,542,445
|
|
136,806,926
|
|
Class B Shares
|
652
|
|
135,638
|
|
Class C Shares
|
14,868,027
|
|
19,892,056
|
|
Class I Shares
|
463,622,267
|
|
303,522,777
|
|
Dividends reinvested:
|
|
|
|
|
Class A Shares
|
19,235,313
|
|
22,549,790
|
|
Class B Shares
|
19,736
|
|
307,000
|
|
Class C Shares
|
4,359,511
|
|
5,112,982
|
|
Class I Shares
|
18,949,417
|
|
17,568,875
|
|
Cost of shares redeemed:
|
|
|
|
|
Class A Shares
|
(176,535,171
|
)
|
(145,107,966
|
)
|
Class B Shares
|
(2,713,460
|
)
|
(7,643,267
|
)
|
Class C Shares
|
(22,916,809
|
)
|
(26,533,193
|
)
|
Class I Shares
|
(202,560,483
|
)
|
(255,548,488
|
)
|
Increase (Decrease) in Net Assets from
|
|
|
|
|
Beneficial Interest Transactions
|
269,871,445
|
|
71,063,130
|
|
Total Increase (Decrease) in Net Assets
|
354,158,232
|
|
8,230,826
|
|
Net Assets ($):
|
|
|
|
|
Beginning of Period
|
1,036,898,988
|
|
1,028,668,162
|
|
End of Period
|
1,391,057,220
|
|
1,036,898,988
|
|
Undistributed investment income—net
|
838,286
|
|
493,825
|
|
STATEMENT OF CHANGES IN NET ASSETS
(continued)
|
|
|
|
|
|
Year Ended December 31,
|
|
|
2012
|
a
|
2011
|
|
Capital Share Transactions:
|
|
|
|
|
Class A
b
|
|
|
|
|
Shares sold
|
23,971,040
|
|
21,019,936
|
|
Shares issued for dividends reinvested
|
2,969,777
|
|
3,465,683
|
|
Shares redeemed
|
(27,476,194
|
)
|
(22,322,755
|
)
|
Net Increase (Decrease) in Shares Outstanding
|
(535,377
|
)
|
2,162,864
|
|
Class B
b
|
|
|
|
|
Shares sold
|
102
|
|
20,551
|
|
Shares issued for dividends reinvested
|
3,078
|
|
46,596
|
|
Shares redeemed
|
(422,169
|
)
|
(1,159,478
|
)
|
Net Increase (Decrease) in Shares Outstanding
|
(418,989
|
)
|
(1,092,331
|
)
|
Class C
|
|
|
|
|
Shares sold
|
2,306,667
|
|
3,065,892
|
|
Shares issued for dividends reinvested
|
672,978
|
|
786,919
|
|
Shares redeemed
|
(3,538,459
|
)
|
(4,113,629
|
)
|
Net Increase (Decrease) in Shares Outstanding
|
(558,814
|
)
|
(260,818
|
)
|
Class I
|
|
|
|
|
Shares sold
|
71,783,224
|
|
47,556,680
|
|
Shares issued for dividends reinvested
|
2,919,459
|
|
2,691,602
|
|
Shares redeemed
|
(31,519,231
|
)
|
(39,608,483
|
)
|
Net Increase (Decrease) in Shares Outstanding
|
43,183,452
|
|
10,639,799
|
|
|
a Effective as of the close of business on March 13, 2012, the fund no longer offers Class B shares.
|
b During the period ended December 31, 2012, 159,411 Class B shares representing $1,025,594 were automatically
|
converted to 159,411 Class A shares and during the period ended December 31, 2011, 367,643 Class B shares
|
representing $2,440,186 were automatically converted to 361,726 Class A shares.
|
See notes to financial statements.
32
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated.All information (except portfolio turnover rate) reflects financial results for a single fund share.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
Class A Shares
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
Per Share Data ($):
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
6.21
|
|
6.62
|
|
6.48
|
|
5.06
|
|
6.92
|
|
Investment Operations:
|
|
|
|
|
|
|
|
|
|
|
Investment income—net
a
|
.41
|
|
.49
|
|
.59
|
|
.54
|
|
.50
|
|
Net realized and unrealized
|
|
|
|
|
|
|
|
|
|
|
gain (loss) on investments
|
.48
|
|
(.40
|
)
|
.17
|
|
1.43
|
|
(1.82
|
)
|
Total from Investment Operations
|
.89
|
|
.09
|
|
.76
|
|
1.97
|
|
(1.32
|
)
|
Distributions:
|
|
|
|
|
|
|
|
|
|
|
Dividends from investment income—net
|
(.43
|
)
|
(.50
|
)
|
(.62
|
)
|
(.55
|
)
|
(.54
|
)
|
Net asset value, end of period
|
6.67
|
|
6.21
|
|
6.62
|
|
6.48
|
|
5.06
|
|
Total Return (%)
b
|
14.74
|
|
1.33
|
|
12.50
|
|
40.43
|
|
(20.17
|
)
|
Ratios/Supplemental Data (%):
|
|
|
|
|
|
|
|
|
|
|
Ratio of total expenses
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
.96
|
|
.96
|
|
.96
|
|
.96
|
|
.96
|
|
Ratio of net expenses
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
.95
|
|
.95
|
|
.95
|
|
.95
|
|
.95
|
|
Ratio of net investment income
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
6.35
|
|
7.50
|
|
9.05
|
|
8.86
|
|
7.89
|
|
Portfolio Turnover Rate
|
51.72
|
|
75.87
|
|
70.07
|
|
77.94
|
|
48.85
|
|
Net Assets, end of period ($ x 1,000)
|
360,128
|
|
338,800
|
|
346,594
|
|
360,921
|
|
119,560
|
|
|
|
a
|
Based on average shares outstanding at each month end.
|
b
|
Exclusive of sales charge.
|
See notes to financial statements.
FINANCIAL HIGHLIGHTS
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
Class C Shares
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
Per Share Data ($):
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
6.21
|
|
6.62
|
|
6.48
|
|
5.06
|
|
6.93
|
|
Investment Operations:
|
|
|
|
|
|
|
|
|
|
|
Investment income—net
a
|
.36
|
|
.44
|
|
.54
|
|
.50
|
|
.45
|
|
Net realized and unrealized
|
|
|
|
|
|
|
|
|
|
|
gain (loss) on investments
|
.48
|
|
(.40
|
)
|
.18
|
|
1.42
|
|
(1.83
|
)
|
Total from Investment Operations
|
.84
|
|
.04
|
|
.72
|
|
1.92
|
|
(1.38
|
)
|
Distributions:
|
|
|
|
|
|
|
|
|
|
|
Dividends from investment income—net
|
(.38
|
)
|
(.45
|
)
|
(.58
|
)
|
(.50
|
)
|
(.49
|
)
|
Net asset value, end of period
|
6.67
|
|
6.21
|
|
6.62
|
|
6.48
|
|
5.06
|
|
Total Return (%)
b
|
13.89
|
|
.58
|
|
11.66
|
|
39.41
|
|
(20.89
|
)
|
Ratios/Supplemental Data (%):
|
|
|
|
|
|
|
|
|
|
|
Ratio of total expenses
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
1.71
|
|
1.71
|
|
1.71
|
|
1.71
|
|
1.71
|
|
Ratio of net expenses
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
1.70
|
|
1.70
|
|
1.70
|
|
1.70
|
|
1.70
|
|
Ratio of net investment income
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
5.60
|
|
6.76
|
|
8.31
|
|
8.15
|
|
7.12
|
|
Portfolio Turnover Rate
|
51.72
|
|
75.87
|
|
70.07
|
|
77.94
|
|
48.85
|
|
Net Assets, end of period ($ x 1,000)
|
123,693
|
|
118,706
|
|
128,173
|
|
125,724
|
|
34,374
|
|
|
|
a
|
Based on average shares outstanding at each month end.
|
b
|
Exclusive of sales charge.
|
See notes to financial statements.
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
Class I Shares
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
Per Share Data ($):
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
6.22
|
|
6.62
|
|
6.49
|
|
5.06
|
|
6.92
|
|
Investment Operations:
|
|
|
|
|
|
|
|
|
|
|
Investment income—net
a
|
.43
|
|
.50
|
|
.60
|
|
.54
|
|
.51
|
|
Net realized and unrealized
|
|
|
|
|
|
|
|
|
|
|
gain (loss) on investments
|
.47
|
|
(.38
|
)
|
.17
|
|
1.45
|
|
(1.82
|
)
|
Total from Investment Operations
|
.90
|
|
.12
|
|
.17
|
|
1.99
|
|
(1.31
|
)
|
Distributions:
|
|
|
|
|
|
|
|
|
|
|
Dividends from investment income—net
|
(.45
|
)
|
(.52
|
)
|
(.64
|
)
|
(.56
|
)
|
(.55
|
)
|
Net asset value, end of period
|
6.67
|
|
6.22
|
|
6.62
|
|
6.49
|
|
5.06
|
|
Total Return (%)
|
14.84
|
|
1.74
|
|
12.59
|
|
40.99
|
|
(20.06
|
)
|
Ratios/Supplemental Data (%):
|
|
|
|
|
|
|
|
|
|
|
Ratio of total expenses
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
.71
|
|
.71
|
|
.71
|
|
.71
|
|
.72
|
|
Ratio of net expenses
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
.70
|
|
.70
|
|
.70
|
|
.70
|
|
.69
|
|
Ratio of net investment income
|
|
|
|
|
|
|
|
|
|
|
to average net assets
|
6.57
|
|
7.73
|
|
9.26
|
|
9.20
|
|
9.43
|
|
Portfolio Turnover Rate
|
51.72
|
|
75.87
|
|
70.07
|
|
77.94
|
|
48.85
|
|
Net Assets, end of period ($ x 1,000)
|
907,236
|
|
576,790
|
|
543,899
|
|
400,170
|
|
183,546
|
|
|
a Based on average shares outstanding at each month end.
|
See notes to financial statements.
|
NOTES TO FINANCIAL STATEMENTS
NOTE 1-Significant Accounting Policies:
Dreyfus HighYield Fund (the “fund”) is a separate diversified series of The Dreyfus/Laurel Funds Trust (the “Trust”), 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 currently offering five series, including the fund.The fund’s investment objective seeks to maximize total return, consisting of capital appreciation and current income.The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
MBSC Securities 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 of Beneficial Interest in each of the following classes of shares: Class A, Class C and Class I. Class A and Class C shares are sold primarily to retail investors through financial intermediaries and bear a distribution fee and/or shareholder services fee. Class A shares are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase. Class I shares are sold primarily to bank trust departments and other financial service providers (including The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, and its affiliates), acting on behalf of customers having a qualified trust or investment account or relationship at such institution, and bear no Distribution Plans or Service Plan fees. Class I shares are offered without a front-end sales charge or CDSC. Class B shares were subject to a CDSC imposed on Class B share redemptions made within six years of purchase and automatically converted to Class A shares after six years. The fund no longer offers Class B shares. Effective March 13, 2012, all outstanding Class B shares were automatically converted to Class A shares. Other differences between the classes include the services offered to and the expenses borne by each class, the
36
allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Trust 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.
(a) Portfolio valuation:
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
NOTES TO FINANCIAL STATEMENTS
(continued)
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:
Level 1
—unadjusted quoted prices in active markets for identical investments.
Level 2
—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3
—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Registered investment companies that are not traded on an exchange are valued at their net asset value and are categorized within Level 1 of the fair value hierarchy.
Investments in securities, excluding short-term investments (other than U.S. Treasury Bills) and forward foreign currency exchange contracts (“forward contracts”) are valued each business day by an independent pricing service (the “Service”) approved by the Trust’s Board of Trustees (the “Board”). 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 valued as determined by the Service, based on methods which include consideration of the following: yields or prices of securities of comparable quality, coupon,
38
maturity and type; indications as to values from dealers; and general market conditions. These securities are generally categorized within Level 2 of the fair value hierarchy.
U.S. Treasury Bills are valued at the mean price between quoted bid prices and asked prices by the Service. These securities are generally categorized within Level 2 of the fair value hierarchy.
The Service’s procedures are reviewed by Dreyfus under the general supervision of the Board.
When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 depending on the relevant inputs used.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized within Level 3 of the fair value hierarchy.
Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward contracts are valued at the forward rate. These securities are generally categorized within Level 2 of the fair value hierarchy.
NOTES TO FINANCIAL STATEMENTS
(continued)
The following is a summary of the inputs used as of December 31, 2012 in valuing the fund’s investments:
|
|
|
|
|
|
|
|
|
Level 2—Other
|
|
Level 3—
|
|
|
|
Level 1—
|
Significant
|
|
Significant
|
|
|
|
Unadjusted
|
Observable
|
|
Unobservable
|
|
|
|
Quoted Prices
|
Inputs
|
|
Inputs
|
Total
|
|
Assets ($)
|
|
|
|
|
|
|
Investments in Securities:
|
|
|
|
|
|
Corporate Bonds
†
|
—
|
1,332,202,121
|
|
—
|
1,332,202,121
|
|
Mutual Funds
|
128,522,578
|
—
|
|
—
|
128,522,578
|
|
Preferred Stocks
†
|
—
|
4,598,511
|
|
—
|
4,598,511
|
|
U.S. Treasury
|
—
|
59,998
|
|
—
|
59,998
|
|
Forward Foreign
|
|
|
|
|
|
|
Currency Exchange
|
|
|
|
|
|
Contracts
††
|
—
|
66,067
|
|
—
|
66,067
|
|
Liabilities ($)
|
|
|
|
|
|
|
Other Financial
|
|
|
|
|
|
|
Instruments:
|
|
|
|
|
|
|
Forward Foreign
|
|
|
|
|
|
|
Currency Exchange
|
|
|
|
|
|
Contracts
††
|
—
|
(275,505
|
)
|
—
|
(275,505
|
)
|
|
|
†
|
See Statement of Investments for additional detailed categorizations.
|
††
|
Amount shown represents unrealized appreciation (depreciation) at period end.
|
At December 31, 2012, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.
(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 on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded
40
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 resulting from changes in exchange rates. Foreign currency gains and losses on investments are also included with net realized and unrealized gain or loss on investments.
(c) Securities transactions and investment income:
Securities transactions are recorded on a trade date basis. Realized gains and losses 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, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with The Bank of New York Mellon, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Manager, U.S. Government and Agency securities or letters of credit. The fund is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner. During the period ended December 31, 2012, The Bank of New York Mellon earned $315,037 from lending portfolio securities, pursuant to the securities lending agreement.
NOTES TO FINANCIAL STATEMENTS
(continued)
(d) Affiliated issuers:
Investments in other investment companies advised by Dreyfus are defined as “affiliated” in the Act. Investments in affiliated investment companies for the period ended December 31, 2012 were as follows:
|
|
|
|
|
|
Affiliated
|
|
|
|
|
|
Investment
|
Value
|
|
|
Value
|
Net
|
Company
|
12/31/2011
($)
|
Purchases ($)
|
Sales ($)
|
12/31/2012
($)
|
Assets (%)
|
Dreyfus
|
|
|
|
|
|
Institutional
|
|
|
|
|
Preferred
|
|
|
|
|
|
Plus Money
|
|
|
|
|
Market
|
|
|
|
|
|
Fund
|
42,531,755
|
529,046,109
|
539,860,865
|
31,716,999
|
2.3
|
Dreyfus
|
|
|
|
|
|
Institutional
|
|
|
|
|
Cash
|
|
|
|
|
|
Advantage
|
|
|
|
|
Fund
|
95,781,799
|
355,285,011
|
354,261,231
|
96,805,579
|
7.0
|
Total
|
138,313,554
|
884,331,120
|
894,122,096
|
128,522,578
|
9.3
|
(e) Risk:
The fund invests primarily in debt securities. Failure of an issuer of the debt securities to make timely interest or principal payments, or a decline or the perception of a decline in the credit quality of a debt security, can cause the debt security’s price to fall, potentially lowering the fund’s share price. High yield (junk) bonds involve greater credit risk, including the risk of default, than investment grade bonds, and are considered predominantly speculative with respect to the issuer’s continuing ability to make principal and interest payments. In addition, the value of debt securities may decline due to general market conditions that are not specifically related to a particular issuer, such as real or perceived adverse economic conditions, changes in outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment. They may also decline because of factors that affect a particular industry.
(f) 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 gains, if any, are normally declared and paid annually, but the fund may make distributions on a
42
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 gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(g) 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.
As of and during the period ended December 31, 2012, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the four-year period ended December 31, 2012 remains subject to examination by the Internal Revenue Service and state taxing authorities.
At December 31, 2012, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $838,286, accumulated capital losses $103,297,264 and unrealized appreciation $73,949,378.
Under the Regulated Investment Company Modernization Act of 2010 (the “2010 Act”), the fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) for an unlimited period. Furthermore, post-enactment capital loss carryovers retain their character as either short-term or long-term capital losses rather than short-term as they were under previous statute.The 2010 Act requires post-enactment losses to be utilized before the utilization of losses incurred in taxable years
NOTES TO FINANCIAL STATEMENTS
(continued)
prior to the effective date of the 2010 Act (“pre-enactment losses”).As a result of this ordering rule, pre-enactment losses may be more likely to expire unused.
The accumulated capital loss carryover is available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to December 31, 2012. If not applied, $11,766,163 of the carryover expires in fiscal year 2013, $2,406,483 expires in fiscal year 2014, $16,497,195 expires in fiscal year 2015, $42,229,566 expires in fiscal year 2016 and $23,792,999 expires in fiscal year 2017. Based on certain provisions in the Code, various limitations regarding the future utilization of these carry forwards, brought forward as a result of the fund’s merger with the following funds apply: BNY Hamilton High Yield Fund and Dreyfus High Income Fund. It is possible that the fund will not be able to utilize most of its capital loss carryover prior to its expiration date.The fund has $6,176,020 of post-enactment short-term capital losses and $428,838 of post-enactment long-term capital losses which can be carried forward for an unlimited period.
The tax character of distributions paid to shareholders during the fiscal periods ended December 31, 2012 and December 31, 2011 were as follows: ordinary income $83,057,269 and $80,486,151, respectively.
During the period ended December 31, 2012, as a result of permanent book to tax differences, primarily due to the tax treatment for consent fees, amortization of premiums, foreign currency transactions and capital loss carryover expiration, the fund increased accumulated undistributed investment income-net by $3,829,623, decreased accumulated net realized gain (loss) on investments by $1,912,000 and decreased paid-in capital by $1,917,623. Net assets and net asset value per share were not affected by this reclassification.
(h) New Accounting Pronouncement:
In December 2011, FASB issued Accounting Standards Update No. 2011-11 “Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). These disclosure requirements are intended to help investors and other financial statement users to better assess the effect or potential effect of offsetting arrange-
44
ments on a company’s financial position.They also improve transparency in the reporting of how companies mitigate credit risk, including disclosure of related collateral pledged or received. In addition,ASU 2011-11 facilitates comparison between those entities that prepare their financial statements on the basis of GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards (“IFRS”). ASU 2011-11 requires entities to: disclose both gross and net information about both instruments and transactions eligible for offset in the financial statements; and disclose instruments and transactions subject to an agreement similar to a master netting agreement. ASU 2011-11 is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods.At this time, management is evaluating the implications of ASU 2011-11 and its impact on the fund’s financial statement disclosures.
NOTE 2—Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $210 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon, (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. Prior to October 10, 2012, the unsecured credit facility with Citibank, N.A. was $225 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended December 31, 2012, the fund did not borrow under the Facilities.
NOTE 3—Investment Management Fee and Other Transactions With Affiliates:
(a)
Pursuant to management agreement with the Manager, the Manager provides or arranges for one or more third parties and/or affiliates to provide investment advisory, administrative, custody, fund accounting and transfer agency services to the fund.The Manager also directs the
NOTES TO FINANCIAL STATEMENTS
(continued)
investments of the fund in accordance with its investment objective, policies and limitations. For these services, the fund is contractually obligated to pay the Manager a fee, calculated daily and paid monthly, at the annual rate of .70% of the value of the fund’s average daily net assets. Out of its fee, the Manager pays all of the expenses of the fund except brokerage commissions, taxes, interest expense, commitment fees on borrowings, Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, fees and expenses of non-interested Trustees (including counsel fees) and extraordinary expenses. In addition, the Manager is required to reduce its fee in an amount equal to the fund’s allocable portion of fees and expenses of the non-interestedTrustees (including counsel fees). During the period ended December 31, 2012,Trustees’ fees reimbursed by the Manager amounted to $94,509.
During the period ended December 31, 2012, the Distributor retained $75,789 from commissions earned on sales of the fund’s Class A shares and $6,990 from CDSCs on redemptions of the fund’s Class C shares.
(b)
Under the Distribution Plans adopted pursuant to Rule 12b-1 (the “Distribution Plans”) under the Act, Class A shares pay annually up to .25% of the value of the average daily net assets to compensate the Distributor for shareholder servicing activities and expenses primarily intended to result in the sale of Class A shares. Class B shares paid and Class C shares pay the Distributor for distributing their shares at an aggregate annual rate of .50% and .75% of the value of the average daily net assets of Class B and Class C shares, respectively. Class B and Class C shares are also subject to a Service Plan adopted pursuant to Rule 12b-1, under which Class B shares paid and Class C shares pay the Distributor for providing certain services to the holders of their shares a fee at the annual rate of .25% of the value of the average daily net assets of Class B and Class C shares. During the period ended December 31, 2012, Class A, Class B and Class C shares were charged $898,157, $2,273 and $925,563, respectively, pursuant to their Distribution Plans. During the period ended December 31, 2012, Class B and Class C shares were charged $1,137 and $308,521, respectively, pursuant to the Service Plan.
46
Under its terms, the Distribution Plans and Service Plan shall remain in effect from year to year, provided such continuance is approved annually by a vote of a majority of those Trustees who are not “interested persons” of theTrust and who have no direct or indirect financial interest in the operation of or in any agreement related to the Plans or Service Plan.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $802,409, Distribution Plans fees $154,287 and Service Plan fees $26,312.
(c)
Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales (including paydowns) of investment securities, excluding short-term securities and forward contracts, during the period ended December 31, 2012, amounted to $873,934,846 and $599,789,068, respectively.
Derivatives:
A derivative is a financial instrument whose performance is derived from the performance of another asset. Each type of derivative instrument that was held by the fund during the period ended December 31, 2012 is discussed below.
Forward Foreign Currency Exchange Contracts:
The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy. When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract
NOTES TO FINANCIAL STATEMENTS
(continued)
is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract decreases between those dates.With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract increases between those dates. Any realized or unrealized gains or losses which occurred during the period are reflected in the Statement of Operations. The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments.The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is typically limited to the unrealized gain on each open contract.The following summarizes open forward contracts at December 31, 2012:
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
Unrealized
|
|
Forward Foreign Currency
|
|
Currency
|
|
|
Appreciation
|
|
Exchange Contracts
|
|
Amounts
|
Proceeds ($)
|
Value ($) (Depreciation) ($)
|
|
Sales:
|
|
|
|
|
|
|
British Pound,
|
|
|
|
|
|
|
Expiring
|
|
|
|
|
|
|
1/29/2013
a
|
2,870,000
|
4,639,010
|
4,661,756
|
(22,746
|
)
|
Canadian Dollar,
|
|
|
|
|
|
|
Expiring
|
|
|
|
|
|
|
1/29/2013
b
|
5,410,000
|
5,501,462
|
5,435,395
|
66,067
|
|
Euro,
|
|
|
|
|
|
|
Expiring:
|
|
|
|
|
|
|
1/29/2013
a
|
2,760,000
|
3,614,358
|
3,644,012
|
(29,654
|
)
|
1/29/2013
b
|
1,460,000
|
1,912,556
|
1,927,629
|
(15,073
|
)
|
1/29/2013
c
|
3,950,000
|
5,152,775
|
5,215,162
|
(62,387
|
)
|
1/29/2013
d
|
3,180,000
|
4,163,828
|
4,198,535
|
(34,707
|
)
|
1/29/2013
e
|
4,230,000
|
5,534,963
|
5,584,844
|
(49,881
|
)
|
1/29/2013
f
|
4,000,000
|
5,220,120
|
5,281,177
|
(61,057
|
)
|
Gross Unrealized
|
|
|
|
|
|
|
Appreciation
|
|
|
|
|
66,067
|
|
Gross Unrealized
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
(275,505
|
)
|
Counterparties:
|
|
a
|
Goldman Sachs
|
b
|
Credit Suisse First Boston
|
c
|
Commonwealth Bank of Australia
|
d
|
Deutsche Bank
|
e
|
Morgan Stanley
|
f
|
UBS
|
48
The following summarizes the average market value of derivatives outstanding during the period ended December 31, 2012:
|
|
|
Average Market Value ($)
|
Forward contracts
|
28,769,019
|
At December 31, 2012, the cost of investments for federal income tax purposes was $1,391,449,623; accordingly, accumulated net unrealized appreciation on investments was $73,933,585, consisting of $80,978,663 gross unrealized appreciation and $7,045,078 gross unrealized depreciation.
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Board of Trustees and Shareholders The Dreyfus/Laurel Funds Trust
We have audited the accompanying statement of assets and liabilities of Dreyfus HighYield Fund (the “Fund”), a series of The Dreyfus/Laurel Funds Trust, including the statement of investments as of December 31, 2012, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended.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 the standards of the Public Company Accounting Oversight Board (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 December 31, 2012, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received.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 High Yield Fund as of December 31, 2012, and the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
New York, New York
February 28, 2013
50
IMPORTANT TAX INFORMATION
(Unaudited)
For federal tax purposes, the fund designates the maximum amount allowable but not less than 79.41% as interest-related dividends in accordance with Sections 871(k)(1) and 881(e) of the Internal Revenue Code.
BOARD MEMBERS INFORMATION
(Unaudited)
52
OFFICERS OF THE FUND
(Unaudited)
BRADLEY J. SKAPYAK, President since January 2010.
Chief Operating Officer and a director of the Manager since June 2009; from April 2003 to June 2009, Mr. Skapyak was the head of the Investment Accounting and Support Department of the Manager. He is an officer of 69 investment companies (comprised of 150 portfolios) managed by the Manager. He is 54 years old and has been an employee of the Manager since February 1988.
JANETTE E. FARRAGHER, Vice President and Secretary since December 2011.
Assistant General Counsel of BNY Mellon, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. She is 50 years old and has been an employee of the Manager since February 1984.
KIESHA ASTWOOD, Vice President and Assistant Secretary since January 2010.
Counsel of BNY Mellon, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. She is 39 years old and has been an employee of the Manager since July 1995.
JAMES BITETTO, Vice President and Assistant Secretary since August 2005.
Senior Counsel of BNY Mellon and Secretary of the Manager, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since December 1996.
JONI LACKS CHARATAN, Vice President and Assistant Secretary since August 2005.
Senior Counsel of BNY Mellon, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. She is 57 years old and has been an employee of the Manager since October 1988.
JOSEPH M. CHIOFFI, Vice President and Assistant Secretary since August 2005.
Senior Counsel of BNY Mellon, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. He is 51 years old and has been an employee of the Manager since June 2000.
JOHN B. HAMMALIAN, Vice President and Assistant Secretary since August 2005.
Senior Managing Counsel of BNY Mellon, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. He is 49 years old and has been an employee of the Manager since February 1991.
ROBERT R. MULLERY, Vice President and Assistant Secretary since August 2005.
Managing Counsel of BNY Mellon, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. He is 60 years old and has been an employee of the Manager since May 1986.
JEFF PRUSNOFSKY, Vice President and Assistant Secretary since August 2005.
Senior Managing Counsel of BNY Mellon, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. He is 47 years old and has been an employee of the Manager since October 1990.
JAMES WINDELS, Treasurer since November 2001.
Director – Mutual Fund Accounting of the Manager, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. He is 54 years old and has been an employee of the Manager since April 1985.
54
RICHARD CASSARO, Assistant Treasurer since January 2008.
Senior Accounting Manager – Money Market and Municipal Bond Funds of the Manager, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. He is 53 years old and has been an employee of the Manager since September 1982.
GAVIN C. REILLY, Assistant Treasurer since December 2005.
Tax Manager of the Investment Accounting and Support Department of the Manager, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. He is 44 years old and has been an employee of the Manager since April 1991.
ROBERT S. ROBOL, Assistant Treasurer since December 2002.
Senior Accounting Manager – Fixed Income Funds of the Manager, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. He is 48 years old and has been an employee of the Manager since October 1988.
ROBERT SALVIOLO, Assistant Treasurer since July 2007.
Senior Accounting Manager – Equity Funds of the Manager, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since June 1989.
ROBERT SVAGNA, Assistant Treasurer since December 2002.
Senior Accounting Manager – Equity Funds of the Manager, and an officer of 70 investment companies (comprised of 177 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since November 1990.
JOSEPH W. CONNOLLY, Chief Compliance Officer since October 2004.
Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (70 investment companies, comprised of 177 portfolios). He is 55 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.
MATTHEW D. CONNOLLY, Anti-Money Laundering Compliance Officer since April 2012.
Anti-Money Laundering Compliance Officer of the Distributor since October 2011; from March 2010 to September 2011, Global Head, KYC Reviews and Director, UBS Investment Bank; until March 2010,AML Compliance Officer and Senior Vice President, Citi Global Wealth Management. He is an officer of 66 investment companies (comprised of 173 portfolios) managed by the Manager. He is 40 years old and has been an employee of the Distributor since October 2011.
For More Information
Telephone
Call your financial representative or 1-800-DREYFUS
Mail
The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at http://www.dreyfus.com and on the SEC’s website at http://www.sec.gov. The description of the policies and procedures is also available without charge, upon request, by calling 1-800-DREYFUS.