-----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, KKIoyMv1ZZyHjSl1N3WSqcL7S7cO+xyI0b1jgbpEvwZgrbSWVgkAfQQcE7hysvo4 C8G6wP6s/opeTSv1Dcr6+g== 0000030167-99-000003.txt : 19990205 0000030167-99-000003.hdr.sgml : 19990205 ACCESSION NUMBER: 0000030167-99-000003 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981130 FILED AS OF DATE: 19990204 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: SEC FILE NUMBER: 811-02192 FILM NUMBER: 99520890 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 SEMI-ANNUAL REPORT YEAR 2000 ISSUES (UNAUDITED) The fund could be adversely affected if the computer systems used by The Dreyfus Corporation and the fund' s other service providers do not properly process and calculate date-related information from and after January 1, 2000. The Dreyfus Corporation is working to avoid Year 2000-related problems in its systems and to obtain assurances from other service providers that they are taking similar steps. In addition, issuers of securities in which the fund invests may be adversely affected by Year 2000-related problems. This could have an impact on the value of the fund's investments and its share price. THE DREYFUS THIRD CENTURY FUND, INC. - ----------------------------------------------------------------------------- LETTER TO SHAREHOLDERS Dear Investor: It is my pleasure to introduce Paul A. Hilton, who recently became co-manager of The Dreyfus Third Century Fund, Inc., sharing management duties with Maceo K. Sloan of NCM Capital Management Group, Inc., who selects securities for the Fund. Paul supervises the areas of social and environmental concern for the portfolio. Prior to joining Dreyfus, Paul Hilton was a research analyst in the Social Awareness Investment program at Smith Barney Asset Management, a division of Travelers Group. He also had similar responsibilities at the Council for Economic Priorities, a not-for-profit organization that is based in New York and is best known for its consumer guide, "Shopping for a Better World." Paul holds a BA in public affairs from Syracuse University and an MA in cultural anthropology from New York University. We believe that Paul is eminently qualified to help The Dreyfus Third Century Fund, Inc. live up to its charter in the areas of social and environmental responsibility. Sincerely, [Stephen E. Canter signature] Stephen E. Canter Chief Investment Officer The Dreyfus Corporation December 18, 1998 New York, N.Y. THE DREYFUS THIRD CENTURY FUND, INC. - ----------------------------------------------------------------------------- LETTER TO SHAREHOLDERS Dear Shareholder: We are pleased to provide you with this semi-annual report for The Dreyfus Third Century Fund, Inc. for the six-month period ended November 30, 1998. Over this period, your Fund produced a total return of 7.22%,* which compares with a total return of 7.48% for the Standard & Poor's 500 Composite Stock Price Index (the "S& P 500 Index" ) and 3.37% for the Dow Jones Industrial Average.** The six-month period was indeed an unsettling one for investors as market sentiment gyrated wildly from extreme bullishness to extreme bearishness. The panic in the stock market in August was widespread and no sector escaped unscathed. Small capitalization stocks, however, declined the most. Although the Fund' s performance also suffered in August, our strategy of investing in reasonably priced, large and liquid growth stocks with consistent earnings helped to protect the Fund from a more severe decline during the month. By the end of November, the Fund' s year-to-date performance was back into positive territory following an impressive recovery in the stock market in October and November after the Federal Reserve Board (Fed) cut interest rates. Economic Review During 1998, the main regions of the world had very different economic fundamentals. The U.S. began the period with a strong economy near full employment, with unemployment only slightly above 4%. The tight labor market led the Federal Reserve to contemplate a rise in interest rates early in the year. The U.S. economy cooled enough over the months that the Fed decided to stand pat. Evidence of economic cooling continued to accumulate and worries about the world economy intensified. Financial stresses pushed the Fed to ease beginning in September. After many years of subpar economic growth, continental Europe moved into a sustained economic expansion. The overall European economy benefited as interest rates in peripheral countries such as Spain and Italy fell, approaching the lower levels established by Germany, on the eve of currency unification. Unlike the U.S., Europe has substantial excess capacity of productive plants and labor. In Asia, weak economies were pervasive as a result of the Asian financial crisis. The Latin American economies weakened as the financial stresses spread throughout that region. A main influence on the U.S. economy this year was the foreign financial crisis and cooling of the world economy. The positive effects hit first. Actual inflation and expected inflation dropped, causing a decline in long-term Treasury bond yields and mortgage rates. This caused a boom in housing. The drop in inflation helped the consumer sector as more of the growth in consumer income was left over after inflation to buy goods and services. Consumers benefited from a combination of good growth in real income, a strong labor market and past increases in the prices of assets they owned. The negative effect of Asian weakness was felt in the industrial sector more than the consumer sector. Corporate profits weakened, especially in sectors affected by the Asian crisis such as world-traded commodities (oil, metals and paper) and exports. One result of the industrial weakness was to cool off a U.S. economy that had been growing rapidly. The major change in the economic outlook over recent months has been a downward shift in expectations for world economic growth. A credit crunch developed in emerging countries and former communist countries, sharply reducing the economic outlook for Asia and Latin America as well as for commodity exporting countries throughout the world. The effect on Europe and the U.S. has been to lower expectations of profit growth and drive down bond yields. Monetary policy has begun to ease in both the U.S. and Europe. Evidence of a weaker world economy accumulated as the financial stresses continued. A worsened financial crisis occurred between the Russian default in mid-August and the fallout from the Long-Term Capital Management hedge fund crisis through early October. However, proactive steps were taken to stabilize the Japanese banks, design a support package for Brazil and ease monetary policy. There appears to be a shift in the priorities of key policymakers from fighting potential inflation to restimulating future world economic growth. Market Overview The six months ended November 30, 1998 encompassed some very different market phases. There was stock market strength during the early part of the period. Small-cap indices had already started to erode and were joined by large-cap indices by midsummer. A sharp decline until the end of August was followed by a rebound and then a renewed decline amid financial fears until early October. In the last two months there was a strong rally in response to the easing of monetary policy. Returns on mid-cap and small-cap stock indices tended to be weaker than for large caps, with a negative total return on small-cap indices. Three key trends influenced stock market behavior during the fiscal period. First, the Federal Reserve continued to keep the Federal Funds rate flat at 5.5% until late September, but then began a succession of easing moves. Second, weakness in emerging country economies contributed to declining commodity prices and a drop in long-term Treasury bond yields to multidecade lows. Third, expectations for corporate profits dropped, first in the sectors sensitive to Asian developments and then for a broader list of stocks. The trigger for the sharp decline in stocks in August appeared to be the Russian default in the summer of 1998. This resulted in deepening concerns about weaker economic growth and corporate profits. There was also a global margin call on risky assets held by hedge funds and financial institutions. This raised the cost of debt financing for many corporations and many emerging countries. Expectations for economic activity in emerging countries in Asia and Latin America shifted down sharply while expectations for U.S. corporate profits weakened somewhat. Despite the fall in Treasury bond yields, financial stocks led the summer selloff due to concerns about financial contagion among emerging countries and potential loan losses by financial institutions. However, in the last two months of the fiscal period, these fears began to ebb in response to Federal Reserve easing moves. The erosion of expectations about corporate profit growth over the last year contributed to an outperformance by a small group of super-cap growth stocks for much of the fiscal year. Investors had more confidence in the prospect for strong persistent earnings growth for this small group of stocks than for the broad market. Value stocks, which often have greater cyclical sensitivity to earnings fluctuations, lagged behind these super-growth stocks. In addition, many of the financial stocks that fall into the value category dropped sharply following the Russian default and global margin call concerns, before rebounding after the Fed acted. Portfolio Focus Our sector allocation during the volatile six-month reporting period was an important strategy for the Fund. As a result of the global economic problems, we initiated defensive strategies in the third quarter to protect the portfolio. The most important strategy was reducing our exposure in sectors that we believed exhibited the highest sensitivity to a slowing world economy. Accordingly, the Energy sector allocation was reduced because of weak oil prices due to excess supply and OPEC's inability to enforce production quotas on its members. The Capital Goods sector was underweighted because of our expectation that capital expenditure for industrial goods would slow. A number of the Fund's holdings including Honeywell, EVI Weatherford, Fort James and Schlumberger were either reduced or eliminated from the portfolio to accomplish our goal of reducing exposure to economic and commodity sensitive sectors. The sectors that were the biggest contributors to the portfolio's positive performance were Communication Services, Consumer Staples and Health Care. The Technology group also performed well, particularly in the last two months of the reporting period. Some of the best performing stocks were Sun Microsystems up 85%, Cisco Systems up 49%, Eli Lilly & Co. up 47% and Safeway up 44%. Our biggest mistake during the six-month period was overweighting the financial sector and poor stock selection in the group. The hardest hit categories were the large money center banks, smaller regional banks and specialty finance companies. Citigroup declined 17% over the six months because of concerns about profits in its global business and uncertainty regarding the success of merging its Travelers and Citibank units into one seamless organization. Conseco, on the other hand, performed poorly because of fears that a flatter yield curve in the U.S. credit market would negatively affect the company's profitability. While the yield curve has steepened recently, the stock has not yet recovered fully from its depressed level. We remain positive on Conseco, for now, given the attractive relative valuation of the stock. In response to the poor performance of the financial stocks in the portfolio, we have added two high quality stocks, Marsh & McLennan and Franklin Resources, to the portfolio. We believe the long-term prospects for these two stocks are very good because of their exposure to the asset management business. Our Global Growth strategic theme, which emphasizes large multinational companies in the portfolio, has been a leading driver of good relative performance in the past. However, due to what we believe to be a temporary slowdown in global economies, we have de-emphasized this strategic theme. Many large multinational growth companies including Gillette, Disney and Coca-Cola warned Wall Street in the third quarter that they would not meet consensus estimates due to a deterioration in global demand for their products. While we believe these companies are attractively positioned to participate in the secular growth of worldwide economies, in the short term their profit margins will contract as consumption on a global basis slows. In place of the globally oriented companies we have emphasized domestically oriented companies in the portfolio. Some of our recent purchases include CVS and Costco Cos. This tactical move simply represents a weighting shift we believe better responds to current economic conditions. Our long-term strategy with regard to global companies is still in place and will be re-emphasized when the cyclical forces hampering the growth of the global companies in the current environment abate. Social Investment Review The Fund invests in companies that show evidence that they conduct their business in a manner that contributes to the enhancement of the quality of life in America. To assess whether a company contributes to the quality of life in America, we employ a rigorous research process to evaluate companies based on their records in the areas of environment, employee safety, product safety and equal employment opportunity. Our analysis includes information provided by the companies themselves, the media, and research from respected social investment research providers such as Kinder, Lydenberg and Domini, the Investor Responsibility Research Center, and Environmental Information Services. We are currently upgrading the environmental research we receive, with a special emphasis on intra-industry comparisons of corporate environmental performance. This research will allow us to identify "best in class" environmental records in a particular industry, rather than eliminate historically problematic sectors entirely from the Fund. We communicate with companies in our portfolio, and encourage them to focus on their performance in our areas of social concern. We recently participated in a dialogue training seminar with CERES, the Coalition for Environmentally Responsible Economies, a leading environmental organization that developed the CERES Principles (formerly the Valdez Principles) for companies. By endorsing the Principles, companies commit to an ongoing process of continuous environmental improvement, dialogue, and comprehensive public reporting. We intend to participate in the next few months as a member of a CERES dialogue team with one of the companies in the Fund' s portfolio. The Fund also intends to invest in a $100,000 federally insured community investment certificate of deposit through Self-Help, a credit union based in Durham, North Carolina. Through the backing of institutions like the Fund, Self-Help is able to provide small-business and home mortgage loans to North Carolinians who might not otherwise qualify for capital. Through this unique investment vehicle, we can secure a competitive rate of return, while helping the same community in which the Fund's sub-investment adviser, NCM Capital Management Group, Inc., is based. Sincerely, [Paul A. Hilton signature] [Maceo K. Sloan signature] Paul A. Hilton Maceo K. Sloan Co-Portfolio Manager Co-Portfolio Manager The Dreyfus Corporation NCM Capital Management Group, Inc. December 18, 1998 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. Both the Standard & Poor' s 500 Composite Stock Price Index and the Dow Jones Industrial Average are widely accepted unmanaged indices of U.S. stock market performance.
THE DREYFUS THIRD CENTURY FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF INVESTMENTS NOVEMBER 30, 1998 (UNAUDITED) Common Stocks--98.7% Shares Value - ------------------------------------------------------- _____________ _____________ Consumer Durables--.8% Newell . . . . . . . . . . . . . . . . . . . . . . 170,200 $ 7,531,350 _____________ Consumer Non-Durables--9.6% Clorox . . . . . . . . . . . . . . . . . . . . . . 216,100 24,000,600 Coca-Cola . . . . . . . . . . . . . . . . . . . . . . 163,900 11,483,244 Hershey Foods . . . . . . . . . . . . . . . . . . . . 295,600 19,879,100 Jones Apparel Group . . . . . . . . . . . . . . . (a) 400,000 9,275,000 PepsiCo . . . . . . . . . . . . . . . . . . . . . . . 265,800 10,283,138 Procter & Gamble . . . . . . . . . . . . . . . . . . . 207,900 18,217,238 _____________ 93,138,320 _____________ Consumer Services--2.0% Fox Entertainment Group, Cl. A . . . . . . . . . . . . 65,400 1,545,075 Service Corp. International . . . . . . . . . . . . . 276,000 10,315,500 Tele-Communications,Cl. A, Liberty Media . . . . . (a) 195,000 7,860,938 _____________ 19,721,513 _____________ Electronic Technology--15.0% Cisco Systems . . . . . . . . . . . . . . . . . . (a) 308,550 23,256,956 Compaq Computer . . . . . . . . . . . . . . . . . . . 637,900 20,731,750 Intel . . . . . . . . . . . . . . . . . . . . . . . . 143,500 15,444,188 Linear Technology . . . . . . . . . . . . . . . . . . 208,900 14,636,056 Lucent Technologies . . . . . . . . . . . . . . . . . 213,000 18,331,313 Sun Microsystems . . . . . . . . . . . . . . . . . (a) 386,800 28,647,375 Tellabs . . . . . . . . . . . . . . . . . . . . (a) 435,900 23,565,844 _____________ 144,613,482 _____________ Energy--1.0% British Petroleum, A.D.S. . . . . . . . . . . . . . . 101,600 9,359,900 _____________ Finance--14.9% Allstate . . . . . . . . . . . . . . . . . . . . . . . 523,400 21,328,550 American International Group . . . . . . . . . . . . . 306,450 28,806,300 BankAmerica . . . . . . . . . . . . . . . . . . . . . 253,817 16,545,696 Citigroup . . . . . . . . . . . . . . . . . . . . . . 246,300 12,361,181 Conseco . . . . . . . . . . . . . . . . . . . . . . . 200,000 6,625,000 Federal National Mortgage Association . . . . . . . . 360,800 26,248,200 Franklin Resources . . . . . . . . . . . . . . . . . . 205,200 8,772,300 Marsh & McLennan . . . . . . . . . . . . . . . . . . . 136,600 7,948,413 Nationwide Financial Services, Cl. A . . . . . . . . . 150,900 7,262,063 Summit Bancorp . . . . . . . . . . . . . . . . . . . . 190,000 7,944,375 _____________ 143,842,078 _____________ Health Services--2.9% Cardinal Health . . . . . . . . . . . . . . . . . . . 258,450 17,736,131 HBO & Co. . . . . . . . . . . . . . . . . . . . . . . 419,400 10,458,788 _____________ 28,194,919 _____________ Health Technology--15.5% Amgen . . . . . . . . . . . . . . . . . . . . . . . . 103,600 7,795,900 Bristol-Myers Squibb . . . . . . . . . . . . . . . . . 254,400 31,179,900 Guidant . . . . . . . . . . . . . . . . . . . . . . . 132,800 11,395,900 Johnson & Johnson . . . . . . . . . . . . . . . . . . 192,000 15,600,000 Lilly (Eli) . . . . . . . . . . . . . . . . . . . . . 184,800 16,574,250 Medtronic . . . . . . . . . . . . . . . . . . . . . . 269,200 18,221,475 Merck & Co. . . . . . . . . . . . . . . . . . . . . . 227,000 35,156,625 THE DREYFUS THIRD CENTURY FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED) Common Stocks (continued) Shares Value - ------------------------------------------------------- _____________ _____________ Health Technology (continued) Schering-Plough . . . . . . . . . . . . . . . . . . . 125,400 $ 13,339,425 _____________ 149,263,475 _____________ Process Industries--2.0% Avery Dennison . . . . . . . . . . . . . . . . . . . . 229,900 11,020,831 Bemis . . . . . . . . . . . . . . . . . . . . . . . . 229,700 8,685,531 _____________ 19,706,362 _____________ Producer Manufacturing--4.0% Illinois Tool Works . . . . . . . . . . . . . . . . . 278,100 17,676,731 Pitney Bowes . . . . . . . . . . . . . . . . . . . . . 207,400 11,614,400 Tyco International . . . . . . . . . . . . . . . . . . 139,000 9,147,938 _____________ 38,439,069 _____________ Retail Trade--10.8% Costco Cos. . . . . . . . . . . . . . . . . . . . (a) 125,000 7,843,750 CVS . . . . . . . . . . . . . . . . . . . . . . . . . 162,000 7,998,750 Home Depot . . . . . . . . . . . . . . . . . . . . . . 702,800 34,964,300 Safeway . . . . . . . . . . . . . . . . . . . . . (a) 510,600 26,966,063 Wal-Mart Stores . . . . . . . . . . . . . . . . . . . 351,800 26,494,938 _____________ 104,267,801 _____________ Technology Services--10.3% Automatic Data Processing . . . . . . . . . . . . . . 163,400 12,581,800 BMC Software . . . . . . . . . . . . . . . . . . . (a) 191,800 9,793,788 Computer Associates International . . . . . . . . . . 414,150 18,326,138 IMS Health . . . . . . . . . . . . . . . . . . . . . . 240,400 15,956,550 Microsoft . . . . . . . . . . . . . . . . . . . . (a) 160,300 19,556,600 Oracle . . . . . . . . . . . . . . . . . . . . (a) 674,400 23,098,200 _____________ 99,313,076 _____________ Transportation--1.3% Southwest Airlines . . . . . . . . . . . . . . . . . . 585,300 12,583,950 _____________ Utilities--8.6% AES . . . . . . . . . . . . . . . . . . . . . . . . . 420,100 19,219,575 Airtouch Communications . . . . . . . . . . . . . (a) 203,100 11,614,781 Ameritech . . . . . . . . . . . . . . . . . . . . . . 191,900 10,386,588 Bell Atlantic . . . . . . . . . . . . . . . . . . . . 296,600 16,498,375 Enron . . . . . . . . . . . . . . . . . . . . . . . . 165,800 8,714,863 MCI WorldCom . . . . . . . . . . . . . . . . . . . . . 275,897 16,277,923 _____________ 82,712,105 _____________ TOTAL COMMON STOCKS (cost $667,440,856) . . . . . . . . . . . . . . . $952,687,400 _____________ THE DREYFUS THIRD CENTURY FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED) Principal Short-Term Investments--2.1% Amount Value - ------------------------------------------------------- _____________ _____________ U.S. Treasury Bills: 4.30%, 12/24/1998 . . . . . . . . . . . . . . . . . . $ 313,000 $ 312,111 4.15%, 12/31/1998 . . . . . . . . . . . . . . . . . . 427,000 425,429 4.46%, 1/21/1999 . . . . . . . . . . . . . . . . . . . 8,690,000 8,635,427 4.17%, 1/28/1999 . . . . . . . . . . . . . . . . . . . 6,692,000 6,645,290 4.32%, 2/4/1999 . . . . . . . . . . . . . . . . . . . 4,306,000 4,271,767 _____________ TOTAL SHORT-TERM INVESTMENTS (cost $20,292,250) . . . . . . . . . . . . . . . . $ 20,290,024 _____________ TOTAL INVESTMENTS (cost $687,733,106). . . . . . . . . . . . . . . . . . . . . . . . . . . 100.8% $972,977,424 _______ _____________ LIABILITIES, LESS CASH AND RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . (.8%) $ (8,036,281) _______ _____________ NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $964,941,143 _______ _____________ Notes to Statement of Investments: - ----------------------------------------------------------------------------- (a) Non-income producing. SEE NOTES TO FINANCIAL STATEMENTS.
THE DREYFUS THIRD CENTURY FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1998 (UNAUDITED) Cost Value _____________ _____________ ASSETS: Investments in securities--See Statement of Investments . . $687,733,106 $972,977,424 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 59,294 Receivable for shares of Common Stock subscribed . . . . 819,132 Dividends receivable . . . . . . . . . . . . . . . . . . 561,581 Prepaid expenses . . . . . . . . . . . . . . . . . . . . 22,844 _____________ 974,440,275 _____________ LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 702,309 Payable for shares of Common Stock redeemed . . . . . . . 8,633,501 Accrued expenses . . . . . . . . . . . . . . . . . . . . 163,322 _____________ 9,499,132 _____________ NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $964,941,143 _____________ REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $576,149,836 Accumulated undistributed investment income--net . . . . 39,553 Accumulated net realized gain (loss) on investments . . . 103,507,436 Accumulated net unrealized appreciation (depreciation) on investments--Note 4 . . . . . . . . . . . . . . . . 285,244,318 _____________ NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $964,941,143 _____________ SHARES OUTSTANDING (150 MILLION SHARES OF $.331/3 PAR VALUE COMMON STOCK AUTHORIZED). . . . . . . . . . . . . 76,375,106 NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $12.63 _______ SEE NOTES TO FINANCIAL STATEMENTS.
THE DREYFUS THIRD CENTURY FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF OPERATIONS NOVEMBER 30, 1998 (UNAUDITED) INVESTMENT INCOME INCOME: Cash dividends (net of $11,445 foreign taxes withheld at source) . . . . . . . . . . . . . $ 3,575,103 Interest . . . . . . . . . . . . . . . . . . . . 817,861 ____________ Total Income . . . . . . . . . . . . . . . . . $ 4,392,964 EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . 3,402,579 Shareholder servicing costs--Note 3(b) . . . . . 877,519 Professional fees . . . . . . . . . . . . . . . . 54,438 Custodian fees--Note 3(b) . . . . . . . . . . . . 35,221 Registration fees . . . . . . . . . . . . . . . . 22,496 Directors' fees and expenses--Note 3(c) . . . . . 17,286 Prospectus and shareholders' reports . . . . . . 10,218 Loan commitments fees--Note 2 . . . . . . . . . . 2,136 Interest expense--Note 2 . . . . . . . . . . . . 969 Miscellaneous . . . . . . . . . . . . . . . . . . 15,555 ____________ Total Expenses . . . . . . . . . . . . . . . . 4,438,417 ____________ INVESTMENT (LOSS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (45,453) ____________ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4: Net realized gain (loss) on investments . . . . . $ 9,709,495 Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . . . . 53,774,801 ____________ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 63,484,296 ____________ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $63,438,843 ____________ SEE NOTES TO FINANCIAL STATEMENTS.
THE DREYFUS THIRD CENTURY FUND, INC. - ----------------------------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS Six Months Ended November 30, 1998 Year Ended (Unaudited) May 31, 1998 _________________ ______________ OPERATIONS: Investment income (loss)--net . . . . . . . . . . . . . . . . . . . . . . . . . . $ (45,453) $ 527,450 Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . 9,709,495 127,135,626 Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . 53,774,801 61,034,848 _____________ _______________ Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . 63,438,843 188,697,924 _____________ _______________ DIVIDENDS TO SHAREHOLDERS FROM: Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (1,359,845) Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . -- (61,193,006) _____________ _______________ Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (62,552,851) _____________ _______________ CAPITAL STOCK TRANSACTIONS: Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . 330,001,927 1,080,725,202 Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 60,535,061 Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (340,187,337) (1,032,801,808) _____________ _______________ Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . (10,185,410) 108,458,455 _____________ _______________ Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . 53,253,433 234,603,528 NET ASSETS: Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 911,687,710 677,084,182 _____________ _______________ End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $964,941,143 $ 911,687,710 _____________ _______________ UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . $ 39,553 $ 85,006 _____________ _______________ Shares Shares _____________ _______________ CAPITAL SHARE TRANSACTIONS: Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,881,756 97,261,223 Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . -- 5,636,412 Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,891,875) (93,123,816) _____________ _______________ Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . (1,010,119) 9,773,819 _____________ _______________ 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 period indicated. This information has been derived from the Fund's financial statements.
Six Months Ended November 30, 1998 Year Ended November 30, ____________________________________________________ PER SHARE DATA: (Unaudited) 1998 1997 1996 1995 1994 ____________________ _______ _______ _______ _______ _______ Net asset value, beginning of period . . . $11.78 $10.01 $ 9.25 $ 7.45 $ 7.80 $ 8.48 _______ _______ _______ _______ _______ _______ Investment Operations: Investment income--net . . . . . . . . . . .00(1) .01 .02 .03 .07 .05 Net realized and unrealized gain (loss) on investments . . . . . . . . . . . . .85 2.68 2.16 2.39 .65 (.08) _______ _______ _______ _______ _______ _______ Total from Investment Operations . . . . . .85 2.69 2.18 2.42 .72 (.03) _______ _______ _______ _______ _______ _______ Distributions: Dividends from investment income--net . . . -- (.02) (.02) (.05) (.07) (.04) Dividends from net realized gain on investments . . . . . . . . . . . . . . -- (.90) (1.40) (.57) (1.00) (.61) _______ _______ _______ _______ _______ _______ Total Distributions . . . . . . . . . . . . -- (.92) (1.42) (.62) (1.07) (.65) _______ _______ _______ _______ _______ _______ Net asset value, end of period . . . . . . $12.63 $11.78 $10.01 $ 9.25 $ 7.45 $ 7.80 _______ _______ _______ _______ _______ _______ TOTAL INVESTMENT RETURN. . . . . . . . . . . . 7.22%(2) 27.76% 25.70% 33.63% 11.81% (.63%) RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets . . .49%(2) .97% 1.03% 1.11% 1.12% 1.17% Ratio of net investment income (loss) to average net assets . . . . . . . . . (.01%)(2) .07% .22% .36% .93% .52% Portfolio Turnover Rate . . . . . . . . . . 28.67%(2) 70.41% 66.52% 92.08% 133.54% 71.70% Net Assets, end of period (000's Omitted) . . $964,941 $911,688 $677,084 $473,452 $368,833 $390,340 - ----------------------------- (1) Amount represents less than $.01 per share. (2) Not annualized. SEE NOTES TO FINANCIAL STATEMENTS.
THE DREYFUS THIRD CENTURY FUND, INC. - ----------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NOTE 1--SIGNIFICANT ACCOUNTING POLICIES: The Dreyfus Third Century Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act") as a diversified open-end management investment company. The Fund's investment objective is to 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. is the distributor of the Fund's shares which are sold to the public without a sales charge. The Fund' s financial statements are prepared in accordance with generally accepted accounting principles which may require the use of management estimates and assumptions. Actual results could differ from those estimates. (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. Under the terms of the custody agreement, the Fund receives net earnings credits based on available cash balances left on deposit. (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 of 1986, as amended (the "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 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 with other Dreyfus-managed funds in a $600 million redemption credit facility (the "Facility" ) primarily to be utilized for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the Fund has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the Fund at rates based on prevailing market rate in effect at the time of borrowings. The average daily amount of borrowings outstanding during the period ended November 30, 1998, was approximately $15,800, with a related weighted average annualized interest rate of 6.15%. THE DREYFUS THIRD CENTURY FUND, INC. - ----------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 3--INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS 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 that if in any full fiscal year the aggregate expenses of the Fund, exclusive of taxes, brokerage, interest on borrowings, commitment fees and extraordinary expenses, exceed 11_2% of the value of the Fund's average net assets, the Fund may deduct from the fees paid to Dreyfus, or Dreyfus will bear such excess expense. During the period ended November 30, 1998 there was no expense reimbursement pursuant to the Agreement. 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 million to $500 million . . . . . . . . . . . . . . . . . .15 of 1% $500 million to $750 million . . . . . . . . . . . . . . . . . .20 of 1% In excess of $750 million. . . . . . . . . . . . . . . . . . . .25 of 1% (b) Under the 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 period ended November 30, 1998, the Fund was charged $574,748 pursuant to the Shareholder Services Plan. 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. During the period ended November 30, 1998, the Fund was charged $147,082 pursuant to the transfer agency agreement. The Fund compensates Mellon under a custody agreement for providing custodial services for the Fund. During the period ended November 30, 1998, the Fund was charged $35,221 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 period ended November 30, 1998 amounted to $250,978,531 and $251,822,060, respectively. At November 30, 1998, accumulated net unrealized appreciation on investments was $285,244,318, consisting of $289,789,891 gross unrealized appreciation and $4,545,573 gross unrealized depreciation. At November 30, 1998, 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). [reg.tm logo] (reg.tm) 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 Captial 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. P.O. Box 9671 Providence, RI 02940 Printed in U.S.A. 035SA9811 Third Century Fund, Inc. Semi-Annual Report November 30, 1998 Printed on recycled paper. 50% post-consumer. Process chlorine free. Vegetable-based ink. -----END PRIVACY-ENHANCED MESSAGE-----