-----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, EAoC/lm9HViBOnMm4xP8jqye/XtAsQAsxysrTRqB6pdYeVcWz1gFCDFxvCM+LlTU TAq2nX9W2TvOIZmwA5Kchw== 0000030167-96-000011.txt : 19960805 0000030167-96-000011.hdr.sgml : 19960805 ACCESSION NUMBER: 0000030167-96-000011 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960531 FILED AS OF DATE: 19960802 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DREYFUS THIRD CENTURY FUND INC CENTRAL INDEX KEY: 0000030167 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 132691318 STATE OF INCORPORATION: MD FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-02192 FILM NUMBER: 96602836 BUSINESS ADDRESS: STREET 1: 144 GLENN CURTISS BLVD CITY: UNIONDALE STATE: NY ZIP: 11556-0144 BUSINESS PHONE: 2129226792 MAIL ADDRESS: STREET 1: C/O DREYFUS CORP STREET 2: 200 PARK AVENUE, 8TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10166 N-30D 1 ANNUAL REPORT THE DREYFUS THIRD CENTURY FUND, INC. LETTER TO SHAREHOLDERS Dear Shareholder: You will be interested to know of a recent change in the portfolio management of The Dreyfus Third Century Fund, Inc. Eric Steedman, who has been a member of the Fund's staff since January, 1995, is now a portfolio manager of the Fund with respect to the Fund's areas of special concern. Mr. Steedman replaces Diane Coffey, who has left Dreyfus for another position. He shares the management duties with Maceo Sloan, Chairman and CEO of NCM Capital Management Group, Inc., sub-advisor to the Fund. Mr. Sloan remains primarily responsible for selection of the Fund's portfolio securities based on traditional financial concerns. Prior to joining the Dreyfus staff, Mr. Steedman was employed by the Council on Economic Priorities, a New York City-based nonprofit public interest research organization. A graduate of Carleton University, Ottawa, Canada, he received his Master of Philosophy degree from the University of Glasgow, Scotland. We have great confidence in the ability of Eric Steedman and Maceo Sloan to manage the Fund's portfolio in a rewarding fashion, while upholding the Fund's policy of selecting investments that contribute to the enhancement of the quality of life in America. Sincerely, [Stephen E. Canter signature logo] Stephen E. Canter Chief Investment Officer The Dreyfus Corporation THE DREYFUS THIRD CENTURY FUND, INC. LETTER TO SHAREHOLDERS Dear Shareholder: The Dreyfus Third Century Fund, Inc. performed well for the 12-month period ended May 31, 1996, providing a total return of 33.63%,* compared to 28.41% for the Standard & Poor's 500 Composite Stock Price Index.** The Fund's total return for the six-month period ended May 31, 1996 was 12.24%,*compared to 11.78% for the S&P 500.** THE ECONOMY As you are probably aware, last year's market was dominated by the actions of Alan Greenspan and the Federal Reserve Board. The Fed and its Open Market Committee authorized a series of cuts in interest rates from mid 1995 to early 1996, to support the apparently weakening economy. In recent months, however, both the Fed and the fixed-income markets became concerned that an accelerating economic growth rate was threatening to revive inflation. By May 31, the Fed had not yet tightened interest rates; however, the markets expected such a move. MARKET ENVIRONMENT Concerns about higher interest rates were dampened somewhat by sluggish consumer spending during January and February, along with the severe winter weather. These conflicting economic signals seemed to form the foundation for a great deal of the market volatility we have seen so far this year. As a result, the markets experienced a good deal of stock rotation, as investors scrambled to find value in an unpredictable market environment. Still, the S&P 500 rose 9.67% from the beginning of 1996 through May 31, confounding those skeptics who felt that the bull market had come to a close. PORTFOLIO FOCUS We have been pleased with the performance of several of the Fund's sectors. Strong returns from the Consumer Cyclicals, Technology and Financial Services sectors have been key drivers of the Fund's performance. Sears, Roebuck Co. and Consolidated Stores are two holdings in the Consumer Cyclicals sector that have performed well, driven by investor belief that consumer debt levels, although high, would not hamper spending. Other stocks in the sector with strong performance include Nike, an athletic shoe and apparel manufacturer, Jones Apparel Group, a women's apparel maker, and CUC International, a consumer buying group membership company. Continued strong demand for PCs, computer networking systems and software has helped the performance of the Fund's technology sector. Winners in this area include BMC Software, a maker of business software, Computer Associates International, in the network software business, Hewlett-Packard, a PC and peripherals manufacturer, and the software giant Microsoft. Financial Services stocks were also decent performers, supported by speculation that a better interest rate environment was approaching. Citicorp, BankAmerica and Green Tree Financial all performed well in this sector. We have also increased the Fund's exposure to small-capitalization stocks. While it is uncertain that small-cap stocks will continue to outperform the market as they have recently, we will continue to look for opportunities in this area, while maintaining a solid position in larger-capitalization companies, some of which are mentioned above. In terms of the Fund's social investment criteria, we believe that the present holdings meet the objectives of the Fund's special considerations. We were particularly pleased that two of the Fund's holdings, Hewlett-Packard and the Federal National Mortgage Association (Fannie Mae), America's largest mortgage guarantor, were among the recipients of the Council on Economic Priorities' prestigious America's Corporate Conscience Award for 1996. Hewlett-Packard received praise for its high degree of responsiveness to employees, while Fannie Mae was lauded for its accomplishments in the area of equal employment opportunity. The Fund is continually engaged in a process of identifying companies that not only meet traditional investment standards, but which also show evidence that they conduct their business in a manner that contributes to the enhancement of the quality of life in America. Recent acquisitions include Neopath, a medical technology company whose automated PAP-smear testing process helps to reduce the incidence of false negatives in cervical cancer tests, and Neurogen, a neuropharmaceutical company developing treatments for anxiety and schizophrenia that lack the negative side effects of traditional psychiatric and neurological disorder drugs. OUTLOOK We expect the market to undergo a 5%-10% correction from its current levels during 1996. At the same time, we see a continuation of modest economic growth during the medium term. Given these expectations, the Federal Reserve is likely, in our opinion, to keep interest rates at a level favorable to the markets. At some point over the coming 12 months, we do expect some economic weakness, leading to falling Fed rates and an increasingly positive market environment, though we will most likely see some bumps along the way as economic data and market sector corrections come along. At this point we do, however, express cautious optimism for the future, and we have positioned the Fund accordingly. Sincerely, [Maceo K. Sloan signature logo] Maceo K. Sloan Portfolio Manager NCM Capital Management Group, Inc. [Eric Steedman signature logo] Eric Steedman Portfolio Manager The Dreyfus Corporation June 21, 1996 New York, N.Y. * Total return includes reinvestment of dividends and any capital gains paid. **SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of income dividends and, where applicable, capital gain distributions. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index of U.S. stock market performance. THE DREYFUS THIRD CENTURY FUND, INC. MAY 31, 1996 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE DREYFUS THIRD CENTURY FUND, INC. AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX [Exhibit A: $163,843 The Dreyfus Third Century Fund Dollars $162,168 Standard & Poor's 500 Composite Stock Price Index* (Years shown above are as of May 31) *Source: Lipper Analytical Services, Inc.]
AVERAGE ANNUAL TOTAL RETURNS ONE YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED FROM INCEPTION (3/29/72) MAY 31, 1996 MAY 31, 1996 MAY 31, 1996 TO MAY 31, 1996 _________ _________ _________ ______________ 33.63% 11.16% 11.96% 12.26%
Past performance is not predictive of future performance. The above graph compares a $10,000 investment made in The Dreyfus Third Century Fund, Inc. on 3/29/72 (Inception Date) to a $10,000 investment made in the Standard & Poor's 500 Composite Stock Price Index on that date. For comparative purposes, the value of the Index on 3/31/72 is used as the beginning value on 3/29/72. All dividends and capital gain distributions are reinvested. The Dreyfus Third Century Fund primarily seeks capital growth through investment in common stocks of companies that, in the opinion of the Fund's management, not only meet traditional investment standards, but which also show evidence that they conduct their business in a manner that contributes to the enhancement of the quality of life in America. Current income is a secondary goal. The Fund's performance shown in the line graph takes into account all applicable fees and expenses. The Standard & Poor's 500 Composite Stock Price Index is a widely accepted, unmanaged index of overall stock market performance which does not take into account charges, fees and other expenses and is not subject to the same socially responsible investment criteria as The Dreyfus Third Century Fund. Further information relating to Fund performance is contained in the Financial Highlights section of the Prospectus and elsewhere in this report.
THE DREYFUS THIRD CENTURY FUND, INC. STATEMENT OF INVESTMENTS MAY 31, 1996 COMMON STOCKS-98.3% SHARES VALUE _______ _______ COMMERCIAL SERVICES-2.3%..... Grainger (W.W.) 55,700 $ 3,724,938 ...................................Sysco 212,000 7,234,500 _______ 10,959,438 _______ CONSUMER DURABLES-1.9%..... Briggs & Stratton 104,500 4,493,500 Oakwood Homes.......................... 95,000 4,607,500 _______ 9,101,000 _______ CONSUMER NON-DURABLES-14.1%......... CPC International 80,000 5,530,000 Campbell Soup.......................... 142,500 9,191,250 Coca-Cola.............................. 229,800 10,570,800 Gillette............................... 141,600 8,372,100 Jones Apparel Group.................. (a) 130,000 6,630,000 NIKE, Cl. B............................ 80,800 8,110,300 PepsiCo................................ 297,000 9,875,250 Tambrands.............................. 180,000 8,302,500 _______ 66,582,200 _______ CONSUMER SERVICES-6.3%... BET Holdings, Cl. A (a) 73,900 1,967,588 CUC International.................... (a) 225,700 8,350,900 Disney (Walt).......................... 133,600 8,116,200 Regal Cinemas........................ (a) 60,000 2,782,500 Service Corp. International............ 150,000 8,381,250 _______ 29,598,438 _______ ELECTRONIC TECHNOLOGY-13.0% Applied Materials (a) 207,000 7,710,750 Atmel............................ (a) 60,000 2,130,000 Coherent............................. (a) 58,400 2,854,300 ....EMC (a) 514,100 11,374,463 Hewlett-Packard........................ 95,200 10,162,600 Linear Technology...................... 194,400 6,706,800 Sun Microsystems..................... (a) 168,600 10,558,575 ....3COM (a) 206,300 10,160,275 _______ 61,657,763 _______ FINANCE-15.2%..................... AFLAC 171,150 5,155,894 Allstate............................... 163,070 6,889,707 American International Group........... 74,700 7,040,475 BankAmerica............................ 175,000 13,168,750 Citicorp............................... 99,200 8,332,800 Federal National Mortgage Association.. 310,600 9,589,775 Green Tree Financial................... 266,800 8,737,700 MGIC Investment........................ 75,000 4,406,250 SunAmerica............................. 150,000 8,400,000 _______ 71,721,351 _______ THE DREYFUS THIRD CENTURY FUND, INC. STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996 COMMON STOCKS (CONTINUED) SHARES VALUE _______ _______ HEALTH SERVICES-1.1%...... HealthCare COMPARE (a) 105,000 $ 5,079,375 _______ HEALTH TECHNOLOGY-14.3%............Amgen (a) 135,600 8,068,200 Becton, Dickinson & Co. ............... 85,400 7,259,000 Bristol-Myers Squibb................... 103,500 8,836,313 Chiron............................... (a) 50,000 5,250,000 Guidant................................ 100,000 5,800,000 Johnson & Johnson...................... 99,540 9,692,707 Medtronic.............................. 169,600 9,540,000 Merck & Co. ........................... 146,762 9,484,494 Neopath.............................. (a) 97,700 2,515,775 Neurogen............................. (a) 40,000 1,170,000 _______ 67,616,489 _______ INDUSTRIAL SERVICES-.7%......... Schlumberger 42,210 3,519,259 _______ PROCESS INDUSTRIES-5.3%....... Avery Dennison 100,000 5,700,000 ....Bemis 300,600 9,957,375 Sigma-Aldrich.......................... 170,900 9,570,400 _______ 25,227,775 _______ PRODUCER MANUFACTURING-3.6%...............Dover 125,800 5,975,500 Harnischfeger Industries............... 160,000 5,600,000 Philips Electronics, N.V. ............. 158,500 5,567,313 _______ 17,142,813 _______ RETAIL TRADE-2.6%........ Consolidated Stores (a) 113,000 4,279,875 Sears, Roebuck & Co. .................. 158,700 8,073,862 _______ 12,353,737 _______ TECHNOLOGY SERVICES-10.3%.. Arrow Electronics (a) 191,500 9,431,375 BMC Software......................... (a) 148,560 9,359,280 Computer Associates International.............. 128,950 9,381,113 Ericsson (LM) Telephone, Cl. B, A.D.R......... 195,000 4,497,187 Microsoft............................ (a) 48,000 5,700,000 ....Oracle (a) 310,500 10,285,312 _______ 48,654,267 _______ TRANSPORTATION-3.0%.......... Comair Holdings 127,500 3,346,875 Delta Air Lines........................ 56,000 4,641,000 Federal Express...................... (a) 82,820 6,346,082 _______ 14,333,957 _______ UTILITIES-4.6%.................... CMS Energy 75,000 2,156,250 Century Telephone Enterprises.................. 261,900 8,511,750 ....GTE 153,430 6,559,132 THE DREYFUS THIRD CENTURY FUND, INC. STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996 COMMON STOCKS (CONTINUED) SHARES VALUE _______ _______ UTILITIES (CONTINUED)..... 360 Communications 200,000 $ 4,625,000 _______ 21,852,132 _______ TOTAL COMMON STOCKS (cost $361,774,796).................. $465,399,994 ======= PRINCIPAL SHORT-TERM INVESTMENT-.1% AMOUNT _______ U.S. TREASURY BILL;.......... 4.98%, 8/8/1996 (cost $340,764)...................... $.......344,000 $ 340,743 ======= TOTAL INVESTMENTS (cost $362,115,560)....................................... 98.4% $465,740,737 ==== ======= CASH AND RECEIVABLES (NET).................................................. 1.6% $ 7,711,406 ==== ======= NET ASSETS.................................................................. 100.0% $473,452,143 ==== ======= NOTE TO STATEMENT OF INVESTMENTS; (a) Non-income producing. See notes to financial statements.
THE DREYFUS THIRD CENTURY FUND, INC. STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1996 ASSETS: Investments in securities, at value (cost $362,115,560)-see statement..................................... $465,740,737 Cash.................................................................... 903,182 Receivable for investment securities sold............................... 7,195,281 Dividends receivable.................................................... 489,962 Receivable for subscriptions to Common Stock............................ 62,778 Prepaid expenses........................................................ 62,720 _______ 474,454,660 LIABILITIES: Due to The Dreyfus Corporation and subsidiaries......................... $329,540 Payable for investment securities purchased............................. 324,482 Payable for Common Stock redeemed....................................... 32,718 Accrued expenses........................................................ 315,777 1,002,517 ____ _______ NET ASSETS.................................................................. $473,452,143 ======= REPRESENTED BY: Paid-in capital......................................................... $329,978,345 Accumulated undistributed investment income-net......................... 773,541 Accumulated undistributed net realized gain on investments.............. 39,075,080 Accumulated net unrealized appreciation on investments-Note 4........... 103,625,177 _______ NET ASSETS at value applicable to 51,201,638 shares outstanding (150 million shares of $.331/3 par value Common Stock authorized)....... $473,452,143 ======= NET ASSET VALUE, offering and redemption price per share ($473,452,143 / 51,201,638 shares)...................................... $9.25 ======= See notes to financial statements.
THE DREYFUS THIRD CENTURY FUND, INC. STATEMENT OF OPERATIONS YEAR ENDED MAY 31, 1996 INVESTMENT INCOME: INCOME: Cash dividends (net of $78,787 foreign taxes withheld at source)...... $ 5,248,818 Interest.............................................................. 904,332 ______ TOTAL INCOME.................................................... $ 6,153,150 EXPENSES: Investment advisory fee-Note 3(a)..................................... 3,154,864 Shareholder servicing costs-Note 3(b)................................. 1,192,986 Professional fees..................................................... 89,450 Directors' fees and expenses-Note 3(c)................................ 54,327 Prospectus and shareholders' reports.................................. 51,648 Custodian fees-Note 3(b).............................................. 50,005 Registration fees..................................................... 31,646 Miscellaneous......................................................... 21,062 ______ TOTAL EXPENSES.................................................. 4,645,988 _______ INVESTMENT INCOME-NET........................................... 1,507,162 REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments-Note 4................................. $62,835,662 Net unrealized appreciation on investments.............................. 54,728,281 ______ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 117,563,943 _______ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $119,071,105 ======= See notes to financial statements.
THE DREYFUS THIRD CENTURY FUND, INC. STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED MAY 31, __________________________________ 1995 1996 _______ ______ OPERATIONS: Investment income-net................................................... $ 3,346,699 $ 1,507,162 Net realized gain on investments........................................ 12,839,259 62,835,662 Net unrealized appreciation on investments for the year................. 22,739,756 54,728,281 _______ ______ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 38,925,714 119,071,105 _______ ______ DIVIDENDS TO SHAREHOLDERS FROM: Investment income-net................................................... (2,986,999) (2,113,842) Net realized gain on investments........................................ (46,183,615) (27,118,179) _______ ______ TOTAL DIVIDENDS....................................................... (49,170,614) (29,232,021) _______ ______ CAPITAL STOCK TRANSACTIONS: Net proceeds from shares sold........................................... 68,296,100 347,500,025 Dividends reinvested.................................................... 47,326,617 27,798,267 Cost of shares redeemed................................................. (126,884,560) (360,518,670) _______ ______ INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS..... (11,261,843) 14,779,622 _______ ______ TOTAL INCREASE (DECREASE) IN NET ASSETS........................... (21,506,743) 104,618,706 NET ASSETS: Beginning of year....................................................... 390,340,180 368,833,437 _______ ______ End of year (including undistributed investment income-net: $1,380,221 in 1995 and $773,541 in 1996).............................. $ 368,833,437 $ 473,452,143 ======= ====== SHARES SHARES _______ ______ CAPITAL SHARE TRANSACTIONS: Shares sold............................................................. 9,474,361 40,415,926 Shares issued for dividends reinvested.................................. 7,548,119 3,419,227 Shares redeemed......................................................... (17,546,982) (42,120,754) _______ ______ NET INCREASE (DECREASE) IN SHARES OUTSTANDING......................... (524,502) 1,714,399 ======= ====== See notes to financial statements.
THE DREYFUS THIRD CENTURY FUND, INC. FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Common Stock outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Fund's financial statements. YEAR ENDED MAY 31, ____________________________________________________________ PER SHARE DATA: 1992 1993 1994 1995 1996 ____ ____ ____ ____ ____ Net asset value, beginning of year........... $ 7.79 $ 7.80 $ 8.48 $ 7.80 $ 7.45 ____ ____ ____ ____ ____ INVESTMENT OPERATIONS: Investment income-net........................ .05 .04 .05 .07 .03 Net realized and unrealized gain (loss) on investments............................. .26 .74 (.08) .65 2.39 ____ ____ ____ ____ ____ TOTAL FROM INVESTMENT OPERATIONS........... .31 .78 (.03) .72 2.42 ____ ____ ____ ____ ____ DISTRIBUTIONS: Dividends from investment income-net......... (.08) (.05) (.04) (.07) (.05) Dividends from net realized gain on investments (.22) (.05) (.61) (1.00) (.57) ____ ____ ____ ____ ____ TOTAL DISTRIBUTIONS........................ (.30) (.10) (.65) (1.07) (.62) ____ ____ ____ ____ ____ Net asset value, end of year................. $ 7.80 $ 8.48 $ 7.80 $ 7.45 $ 9.25 ==== ==== ==== ==== ==== TOTAL INVESTMENT RETURN.......................... 3.92% 10.02% (.63%) 11.81% 33.63% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets...... 1.08% 1.11% 1.17% 1.12% 1.11% Ratio of net investment income to average net assets .83% .48% .52% .93% .36% Portfolio Turnover Rate...................... 47.92% 67.30% 71.70% 133.54% 92.08% Net Assets, end of year (000's Omitted)...... $443,533 $526,335 $390,340 $368,833 $473,452 See notes to financial statements.
THE DREYFUS THIRD CENTURY FUND, INC. NOTES TO FINANCIAL STATEMENTS NOTE 1-SIGNIFICANT ACCOUNTING POLICIES: The Dreyfus Third Century Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940 ("Act") as a diversified open-end management investment company. The Fund's investment objective is to provide capital growth. The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. ("Mellon"). NCM Capital Management Group, Inc. ("NCM") serves as the Fund's sub-investment adviser. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's shares which are sold to the public without a sales charge. (A) PORTFOLIO VALUATION: Investments in 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. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. Securities for which there are no such valuations are valued at fair value as determined in good faith under the direction of the Board of Directors. (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, amortization of discount on investments, is recognized on the accrual basis. (C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gain 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. To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the Fund not to distribute such gain. (D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes. NOTE 2-BANK LINE OF CREDIT: The Fund participates in a $100 million unsecured line of credit provided by The Bank of New York, primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest is payable at the Federal Funds rate plus .50% on an annualized basis. During the year ended May 31, 1996, the amounts borrowed from this line of credit were immaterial. NOTE 3-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER TRANSACT IONS WITH AFFILIATES: (A) Pursuant to the management agreement ("Agreement") with Dreyfus, the management fee is computed at an annual rate of .75 of 1% of the value of the Fund's average daily net assets and is payable monthly. The agreement provides for an expense reimbursement from the Manager should the Fund's aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and extraordinary THE DREYFUS THIRD CENTURY FUND, INC. NOTES TO FINANCIAL STATEMENTS expenses, exceed 11\2% of the value of the Fund's average daily net assets for any full fiscal year. There was no expense reimbursement for the year ended May 31, 1996. Pursuant to a Sub-Investment Advisory Agreement with NCM, the sub-investment advisory fees are payable monthly by Dreyfus, and are based upon the value of the Fund's average daily net assets, computed at the following rates:
AVERAGE NET ASSETS ____________ 0 to $400 million..................................................................... .10 of 1% $400 to $500 million.................................................................. .15 of 1% $500 to $750 million.................................................................. .20 of 1% In excess of $750 million............................................................. .25 of 1%
Prior to April 18, 1996, the sub-investment advisory fee was computed at an annual rate of .10 of 1% on the first $500 million and .20 of 1% on the excess over $500 million of the value of the Fund's average daily net assets and was payable monthly by Dreyfus. (B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus, 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 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 year ended May 31, 1996, the Fund was charged an aggregate of $655,193 pursuant to the Shareholder Services Plan. Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the Fund. Such compensation amounted to $128,102 for the period from December 1, 1995 through May 31, 1996. Effective May 10, 1996, the Fund entered into a Custody Agreement with Mellon to provide custodial services for the Fund. For the period from May 10, 1996 through May 31, 1996, $4,606 was paid to Mellon pursuant to the Custody Agreement. (C) Each director who is not an "affiliated person" as defined in the Act receives from the Fund an annual fee of $10,000. The Chairman of the Board receives an additional 25% of such compensation. NOTE 4-SECURITIES TRANSACTIONS: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the year ended May 31, 1996 amounted to $378,938,523 and $369,914,313, respectively. At May 31, 1996, accumulated net unrealized appreciation on investments was $103,625,177, consisting of $107,429,785 gross unrealized appreciation and $3,804,608 gross unrealized depreciation. At May 31, 1996, 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 DREYFUS THIRD CENTURY FUND, INC. REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF DIRECTORS THE DREYFUS THIRD CENTURY FUND, INC. We have audited the accompanying statement of assets and liabilities of The Dreyfus Third Century Fund, Inc., including the statement of investments, as of May 31, 1996, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. 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 verification by examination of securities held by the custodian as of May 31, 1996 and confirm ation of securities not held by the custodian by correspondence with others. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Dreyfus Third Century Fund, Inc. at May 31, 1996, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. [Ernst and Young LLP signature logo] New York, New York July 9, 1996 THE DREYFUS THIRD CENTURY FUND, INC. IMPORTANT TAX INFORMATION (UNAUDITED) For Federal tax purposes the Fund hereby designates $.21 per share as a long-term capital gain distribution of the $.62 per share paid on December 15, 1995. PROXY RESULTS (UNAUDITED) A special meeting of stockholders of the Fund was held on April 18, 1996, at which stockholders approved an amended and restated sub-investment advisory agreement between The Dreyfus Corporation and NCM Capital Management Group, Inc., by a vote of 25,339,938 shares in favor of, and 1,532,568 shares against, approval of the agreement, with 2,511,106 shares abstaining. At the meeting, Fund stockholders also approved amending the Fund's fundamental investment policy and investment restriction with regard to socially responsible Special Considerations (as described in the Fund's current Prospectus) to provide that such socially responsible Special Considerations may be supplemented by action of the Fund's Board members without stockholder approval. Prior to the effectiveness of the amendment, stockholder approval was required to supplement or change the Fund's Special Considerations. Approval of the amendment was obtained by a vote of 20,691,567 shares in favor of, and 4,287,923 shares against, the amendment, with 2,385,810 shares abstaining. [Dreyfus lion "d" logo] THE DREYFUS THIRD CENTURY FUND, INC. 200 Park Avenue New York, NY 10166 INVESTMENT ADVISER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 SUB-INVESTMENT ADVISER NCM Capital Management Group, Inc. 103 West Main Street Durham, North Carolina 27705 CUSTODIAN Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, PA 15258 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 035AR965 [Dreyfus logo] Third Century Fund,Inc. Annual Report May 31, 1996 EX-99.A 2 GRAPH IN PRES LTR OF ANNUAL REPORT COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE DREYFUS THIRD CENTURY FUND, INC. AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX EXHIBIT A: ________________________________________________________ | | STANDARD | | | | & POOR'S 500 | THE DREYFUS | | PERIOD | COMPOSITE STOCK | THIRD CENTURY | | | PRICE INDEX * | FUND | |--------- | --------------- | ---------------| | 3/29/72 | 10,000 | 10,000 | | 5/31/72 | 10,266 | 10,061 | | 5/31/73 | 10,124 | 8,177 | | 5/31/74 | 8,721 | 7,551 | | 5/31/75 | 9,556 | 9,193 | | 5/31/76 | 10,928 | 10,781 | | 5/31/77 | 10,937 | 12,082 | | 5/31/78 | 11,656 | 14,870 | | 5/31/79 | 12,522 | 17,335 | | 5/31/80 | 14,858 | 24,830 | | 5/31/81 | 18,603 | 33,866 | | 5/31/82 | 16,607 | 26,088 | | 5/31/83 | 25,378 | 37,009 | | 5/31/84 | 24,604 | 33,576 | | 5/31/85 | 32,415 | 43,715 | | 5/31/86 | 43,971 | 52,949 | | 5/31/87 | 53,275 | 60,640 | | 5/31/88 | 49,807 | 58,265 | | 5/31/89 | 63,136 | 70,235 | | 5/31/90 | 73,604 | 82,355 | | 5/31/91 | 82,259 | 96,514 | | 5/31/92 | 90,345 | 100,299 | | 5/31/93 | 100,816 | 110,350 | | 5/31/94 | 105,101 | 109,657 | | 5/31/95 | 126,288 | 122,610 | | 5/31/96 | 162,168 | 163,843 | ------------------------------------------------------- * Source: Lipper Analytical Services, Inc. -----END PRIVACY-ENHANCED MESSAGE-----