LETTER TO SHAREHOLDERS
Dear Shareholder:
For the six months ended June 30, 1994, the annualized yield of Dreyfus
Liquid Assets reached 2.92% which is the equivalent of an annualized
effective yield of 2.96% after taking into account the effect of
compounding.*
The yield reflects the rise in interest rates that began last February
when the Federal Reserve Board took the first of a series of steps to
forestall a return of inflation by increasing the cost of borrowed money.
The Fed was prompted to act by the strength that has been exhibited by
the U.S. economy. Among the signs of this strength have been strong
employment figures, increased production and improved corporate profits.
Lately, another element has been added to the factors that argue for higher
interest rates _ the weakness of the U.S. dollar versus the German mark and
particularly the Japanese yen.
Historically, the Federal Reserve has not used interest rates to boost
the value of the dollar on foreign markets. However, the slippage in the
dollar's price in the foreign exchange markets, combined with the evident
strength of the domestic U.S. economy, could well prompt the central bank
authorities to take further preemptive steps to cool off the demand side of
the economy.
Against this background of rising money rates, we have been cutting back
the average maturity of the issues in your Fund's portfolio. We believe this
should place the Fund in a better position to take advantage of market
opportunities.
We continue to keep a very close watch on these economic and market
developments. Our objective, as always, is to obtain rewarding yields on your
cash assets without incurring unnecessary market risk.
We thank you for your investment in this Fund and would like to assure
you of our constant attention to your Fund's investment goals.
Sincerely,
(Joseph S. DiMartino Signature Logo)
Joseph S. DiMartino
President
July 12, 1994
New York, N.Y.
* Annualized effective yield is based upon dividends declared daily and
reinvested daily.
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<CAPTION>
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS JUNE 30, 1994 (UNAUDITED)
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT_5.0% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
First National Bank of Chicago (London)
4.21%, 9/30/94 ......................................................... $ 40,000,000 $ 40,003,622
Harris Trust & Savings Bank (London)
4.36%-4.47%, 7/20/94-8/18/94............................................ 75,000,000 75,000,335
NationsBank of North Carolina N.A. (London)
5.13%, 3/17/95-3/20/95.................................................. 130,000,000 130,000,000
--------------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $245,003,957)..................................................... $ 245,003,957
==============
COMMERCIAL PAPER_53.7%
Abbey National North America
4.14%, 7/27/94.......................................................... $ 40,000,000 $ 39,881,556
B.B.V. Finance (Delaware) Inc.
4.31%, 7/1/94........................................................... 25,000,000 25,000,000
Bankers Trust New York Corp.
3.50%-4.14%, 8/12/94-9/16/94............................................ 130,000,000 129,269,386
Bear Stearns Companies Inc.
4.52%-4.57%, 8/16/94-9/13/94............................................ 65,000,000 64,488,078
Budget Funding Corp.
4.50%, 8/19/94.......................................................... 25,000,000 24,848,576
CS First Boston Group Inc.
4.14%-4.66%, 7/29/94-10/19/94........................................... 65,000,000 64,360,500
Central Hispano North American Capital Corp.
3.58%-4.78%, 8/3/94-12/13/94............................................ 185,000,000 182,610,214
Credito Italiano (Delaware) Inc.
3.63%, 7/13/94.......................................................... 23,000,000 22,972,630
Den Danske Corp. Inc.
3.46%, 10/21/94......................................................... 25,000,000 24,737,889
Ford Motor Credit Co.
4.49%-4.53%, 8/1/94-8/23/94............................................. 100,000,000 99,478,625
General Electric Capital Corp.
3.90%-5.11%, 7/25/94-3/14/95............................................ 166,000,000 162,910,688
General Electric Capital Services Inc.
4.03%-4.71%, 8/4/94-11/14/94............................................ 190,000,000 188,686,737
General Motors Acceptance Corp.
4.11%-4.94%, 8/5/94-12/20/94............................................ 210,000,000 207,006,619
Generale Bank Inc.
5.15%, 3/17/95.......................................................... 20,000,000 19,286,311
Goldman Sachs Group L.P.
3.40%-4.74%, 7/5/94-11/9/94............................................. 240,000,000 238,365,808
ITT Financial Corp.
3.96%-4.19%, 7/12/94-7/25/94............................................ 235,000,000 234,454,917
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1994 (UNAUDITED)
PRINCIPAL
COMMERCIAL PAPER (CONTINUED) AMOUNT VALUE
-------------- --------------
Indosuez N.A. Inc.
4.61%, 9/23/94.......................................................... $ 50,000,000 $ 49,470,333
Lehman Brothers Holdings Inc.
4.11%-4.56%, 7/1/94-9/15/94............................................. 240,000,000 239,090,625
Merrill Lynch & Co. Inc.
4.37%-4.54%, 7/1/94-7/19/94............................................. 40,000,000 39,943,750
Morgan Stanley Group Inc.
4.30%, 8/1/94........................................................... 50,000,000 49,817,014
Nordbanken N.A. Inc.
4.02%-4.07%, 7/5/94-8/4/94.............................................. 105,000,000 104,920,022
PaineWebber Group Inc.
4.16%, 8/4/94........................................................... 25,000,000 24,903,194
Prudential Home Mortgage Company
4.07%-4.28%, 8/4/94-8/26/94............................................. 100,000,000 99,547,875
SwedBank Inc.
3.59%-4.05%, 8/30/94-11/1/94............................................ 185,000,000 183,515,783
UBS Finance (Delaware) Inc.
4.35%, 7/1/94........................................................... 100,000,000 100,000,000
--------------
TOTAL COMMERCIAL PAPER (cost $2,619,567,130)................................ $2,619,567,130
==============
CORPORATE NOTES_7.5%
Bear Stearns Companies Inc.
4.46%, 9/13/94-9/20/94 (a).............................................. $ 125,000,000 $ 125,000,000
Ford Motor Credit Co.
4.95%, 1/17/95.......................................................... 19,000,000 19,038,905
General Electric Capital Corp.
3.60%, 1/19/95.......................................................... 25,000,000 24,990,786
Merrill Lynch & Co. Inc.
4.33%-4.35%, 9/30/94-3/17/95 (a)........................................ 161,000,000 161,000,000
Morgan Stanley Group Inc.
3.49%, 9/29/94.......................................................... 35,000,000 34,998,921
--------------
TOTAL CORPORATE NOTES (cost $365,028,612) .................................. $ 365,028,612
==============
SHORT-TERM BANK NOTES_16.1%
Comerica Bank
3.44%-4.48%, 9/14/94-9/30/94 (a)........................................ $ 98,000,000 $ 97,978,656
FCC National Bank Delaware
3.62%-3.70%, 1/19/95-2/3/95............................................. 150,000,000 149,984,064
First National Bank of Chicago
3.62%-4.61%, 7/28/94-10/26/94 (a)....................................... 75,000,000 75,000,000
Huntington National Bank
3.66%, 1/10/95.......................................................... 59,000,000 59,012,298
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1994 (UNAUDITED)
PRINCIPAL
SHORT-TERM BANK NOTES (CONTINUED) AMOUNT VALUE
-------------- --------------
NationsBank of North Carolina N.A.
3.41%-3.66%, 8/2/94-8/18/94............................................. $ 98,000,000 $ 98,006,531
Northern Trust Co.
3.74%, 12/30/94......................................................... 40,000,000 39,972,141
Old Kent Bank & Trust
3.49%, 9/9/94........................................................... 25,000,000 24,995,584
PNC Bank N.A.
3.34%-3.60%, 7/8/94-9/12/94 (a)......................................... 243,100,000 243,187,705
--------------
TOTAL SHORT-TERM BANK NOTES (cost $788,136,979) ............................ $ 788,136,979
==============
U.S. GOVERNMENT AGENCIES-12.5%
Federal National Mortgage Association
Discount Notes
3.48%-3.54%, 9/19/94-10/20/94........................................... $ 312,000,000 $ 309,273,232
Federal National Mortgage Association
Floating Rate Notes
4.74%-4.84%, 2/14/97-2/18/97 (a)........................................ 300,000,000 300,000,000
--------------
TOTAL U.S. GOVERNMENT AGENCIES (cost $609,273,232).......................... $ 609,273,232
==============
U.S. TREASURY BILLS-.5%
3.69%, 2/9/95
(cost $24,448,694)...................................................... $ 25,000,000 $ 24,448,694
==============
TIME DEPOSITS-3.4%
Bankers Trust Co. (London)
5.00%, 7/1/94........................................................... $ 100,000,000 $ 100,000,000
Republic National Bank of New York (London)
4.63%, 7/1/94........................................................... 68,100,000 68,100,000
--------------
TOTAL TIME DEPOSITS (cost $168,100,000) .................................... $ 168,100,000
==============
TOTAL INVESTMENTS (cost $4,819,558,604)........................... 98.7% $4,819,558,604
====== ==============
CASH AND RECEIVABLES (NET)........................................ 1.3% $ 61,801,221
====== ==============
NET ASSETS ...................................................... 100.0% $4,881,359,825
====== ==============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Variable interest rate - subject to periodic change.
See independent accountants' review report and notes to financial statements.
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED)
ASSETS:
Investments in securities, at value-Note 1(a).......................... $4,819,558,604
Cash.................................................................... 54,004,975
Interest receivable..................................................... 20,107,979
Prepaid expenses........................................................ 2,459,267
--------------
4,896,130,825
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 1,907,371
Payable for Common Stock redeemed....................................... 10,911,089
Accrued expenses........................................................ 1,952,540 14,771,000
------------ --------------
NET ASSETS ................................................................ $4,881,359,825
==============
REPRESENTED BY:
Paid-in capital......................................................... $4,885,111,188
Accumulated net realized (loss) on investments.......................... (3,751,363)
--------------
NET ASSETS at value applicable to 4,885,986,826 outstanding shares of
Common Stock, equivalent to $1.00 per share
(25 billion shares of $.10 par value authorized)........................ $4,881,359,825
==============
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 88,600,602
EXPENSES:
Management fee-Note 2(a)............................................. $11,352,758
Shareholder servicing costs-Note 2(b)................................. 6,128,275
Custodian fees........................................................ 168,141
Prospectus and shareholders' reports.................................. 75,344
Professional fees..................................................... 43,814
Registration fees..................................................... 36,780
Directors' fees and expenses-Note 2(c)................................ 25,128
Miscellaneous......................................................... 139,994
-----------
TOTAL EXPENSES.................................................. 17,970,234
--------------
INVESTMENT INCOME-NET...................................................... 70,630,368
NET REALIZED GAIN ON INVESTMENTS-Note 1(b)................................. 130,651
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 70,761,019
==============
See independent accountants' review report and notes to financial statements.
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DREYFUS LIQUID ASSETS, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30, 1994
1993 (UNAUDITED)
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Investment income-net............................................... $ 135,373,883 $ 70,630,368
Net realized gain on investments..................................... 178,144 130,651
---------------- ----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... 135,552,027 70,761,019
---------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net............................................... (135,373,883) (70,630,368)
---------------- ----------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold........................................ 15,561,021,427 7,412,744,907
Dividends reinvested................................................. 134,811,058 70,368,248
Cost of shares redeemed.............................................. (16,369,977,245) (7,430,017,818)
---------------- ----------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS.. (674,144,760) 53,095,337
---------------- ----------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................ (673,966,616) 53,225,988
NET ASSETS:
Beginning of period.................................................. 5,502,100,453 4,828,133,837
---------------- ----------------
End of period........................................................ $ 4,828,133,837 $ 4,881,359,825
================ ================
See independent accountants' review report and notes to financial statements.
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<CAPTION>
DREYFUS LIQUID ASSETS, 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.
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED
---------------------------------------------------------- JUNE 30, 1994
PER SHARE DATA: 1989 1990 1991 1992 1993 (UNAUDITED)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $.9997 $.9997 $.9992 $.9991 $.9991 $.9990
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net................. .0871 .0764 .0570 .0341 .0261 .0145
Net realized gain (loss) on investments (.0002) --- (.0001) --- (.0001) .0001
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS..... .0869 .0764 .0569 .0341 .0260 .0146
------ ------ ------ ------ ------ ------
DISTRIBUTIONS;
Dividends from investment income-net.. (.0869) (.0769) (.0570) (.0341) (.0261) (.0145)
------ ------ ------ ------ ------ ------
Net asset value, end of period......... $.9997 $.9992 $.9991 $.9991 $.9990 $.9991
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 9.07% 7.99% 5.87% 3.47% 2.64% 2.94%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .66% .65% .67% .72% .77% .74%*
Ratio of net investment income to average
net assets........................... 8.72% 7.66% 5.75% 3.43% 2.62% 2.93%*
Net Assets, end of period (000's Omitted) $7,835,754 $7,521,291 $6,200,255 $5,502,100 $4,828,134 $4,881,360
- ---------------
* Annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS LIQUID ASSETS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation ("Distributor") acts as the exclusive distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor
is a wholly-owned subsidiary of The Dreyfus Corporation ("Manager").
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the fair
value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income is recognized on the accrual basis. Cost of investments represents
amortized cost.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
and pay dividends from investment income-net on each business day. 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, 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 taxes.
The Fund has an unused capital loss carryover of approximately $3,882,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1993. If not
applied, $1,685,000 of the carryover expires in 1995, $2,126,000 expires in
1997 and $71,000 expires in 1998.
At June 30, 1994, 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).
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is based on the average daily value of the Fund's net
assets and is computed at the following annual rates: 1/2 of 1% of the first
$1.5 billion; 48/100ths of 1% of the next $500 million; 47/100ths of 1% of
the next $500 million; and 45/100ths of 1% over $2.5 billion. The fee is
payable monthly.
The Agreement provides for an expense reimbursement from the Manager
should the Fund's aggregate expenses, exclusive of taxes, interest on
borrowings, brokerage commissions and extraordinary expenses, exceed 1% of
the average value of the Fund's net assets for any full year. No expense
reimbursement was required pursuant to the Agreement for the six months ended
June 30, 1994.
DREYFUS LIQUID ASSETS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
the Distributor an amount not to exceed an annual rate of .25 of 1% of the
value of the Fund's average daily net assets for servicing 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 six months ended June 30,
1994, the Fund was charged an aggregate of $1,657,580 pursuant to the
Shareholder Services Plan.
(C) Certain officers and directors of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or the Distributor. Each director
who is not an "affiliated person" receives an annual fee of $6,500 and an
attendance fee of $500 per meeting.
(D) On December 5, 1993, the Manager entered into an Agreement and Plan
of Merger (the "Merger Agreement") providing for the merger of the Manager
with a subsidiary of Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a number
of contingencies, including receipt of certain regulatory approvals and
approvals of the stockholders of the Manager and of Mellon. The merger is
expected to occur in August 1994, but could occur later.
As a result of regulatory requirements and the terms of the Merger
Agreement, the Manager will seek various approvals from the Fund's
shareholders before completion of the merger. Proxy materials, approved by
the Fund's Board, recently have been mailed to Fund shareholders.
DREYFUS LIQUID ASSETS, INC.
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS LIQUID ASSETS, INC.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Liquid Assets, Inc., including the statement of investments, as of
June 30, 1994, and the related statements of operations and changes in net
assets and financial highlights for the six month period ended June 30, 1994.
These financial statements and financial highlights are the responsibility of
the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
December 31, 1993 and financial highlights for each of the five years in the
period ended December 31, 1993 and in our report dated January 31, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young LLP Signature Logo)
New York, New York
August 1, 1994
(Dreyfus Logo)
Liquid
Assets, Inc.
Semi-Annual
Report
June 30, 1994
(Dreyfus Lion Logo)
(Dreyfus `D' Logo)
DREYFUS LIQUID ASSETS, INC.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
110 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 039SA946
Registration Mark
