DREYFUS LIQUID ASSETS, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
The past six months have seen a slow decline in the rate of economic
activity. This has been accompanied, inevitably, by declining interest rates.
In this environment, we are pleased that Dreyfus Liquid Assets, Inc. has
maintained a competitive yield. For the half-year ended June 30, 1995, the
annualized yield of Dreyfus Liquid Assets was 5.40%. The annualized effective
yield was 5.54% after taking into account the effect of compounding.*
We achieved this yield level by lengthening maturities gradually during
the six-month period. This was done in anticipation of lower interest rates,
which became more and more likely as the economy gave continued signs of
slowing down.
The Federal Reserve Board, which raised interest rates seven times during
1994 and early 1995 to head off inflation, became concerned that the drop in
economic performance might turn into an actual business recession.
Accordingly, in early July the Federal Reserve reversed course and made a
modest cut in the Federal Funds rate.
As this letter is written, the economy has distinctly cooled off from the
frothy activity that prevailed last year. Thus one could say that the Fed's
policies have been successful. Inflation has been held at bay and few
observers believe that the "soft landing" will turn into a full-blown
economic recession.
However, the Federal Reserve showed laudable caution in the July
reduction of short-term rates. If more of that medicine is needed, we feel
that the Fed will not hesitate to act accordingly. Nonetheless, the central
bank must be ever watchful lest rate-cutting bring on the recurrence of
inflation which the Fed has so strenuously sought to avoid.
In our opinion, the money market has already discounted the possibility
of further Fed moves to lower interest rates. To a certain extent, that is
already built into current market prices. Our strategy under these
circumstances is to remain in the long end of the market as long as
necessary, in an effort to maintain the best possible level of yields.
We appreciate the opportunity to put your cash to work in the money
market and will continue to exert our best efforts to obtain competitive
returns on your behalf.
Sincerely,
[Patricia A. Larkin signature logo]
Patricia A. Larkin
Portfolio Manager
July 12, 1995
New York, N.Y.
* Annualized effective yield is based upon dividends declared daily and
reinvested daily.
<TABLE>
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS JUNE 30, 1995 (UNAUDITED)
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT-9.0% AMOUNT VALUE
-------- --------
<S> <C> <C>
Bank of New York (Delaware)
6.32%, 6/3/96........................................................... $ 50,000,000 $ 50,000,000
Bank of New York (London)
5.81%, 9/6/95........................................................... 50,000,000 50,000,000
Chemical Bank (London)
6.42%, 5/7/96........................................................... 25,000,000 25,000,000
Harris Trust & Savings Bank (London)
5.92%-6.03%, 8/25/95-9/22/95............................................ 125,000,000 125,000,000
Morgan Guaranty Trust Co. (London)
6.33%, 7/31/95.......................................................... 15,000,000 15,003,080
National Westminster Bank (Delaware)
6.25%, 7/26/95.......................................................... 25,000,000 25,000,000
Old Kent Bank & Trust
6.26%-6.30%, 8/14/95-9/29/95............................................ 125,000,000 125,000,000
-----------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $415,003,080)..................................................... $ 415,003,080
===========
BANKERS ACCEPTANCE-.1%
Republic National Bank of New York
6.34%, 7/3/95
(cost $5,598,077)....................................................... $ 5,600,000 $ 5,598,077
============
COMMERCIAL PAPER-66.4%
Abbey National North America
5.91%-6.50%, 9/15/95-1/2/96............................................. $ 206,500,000 $ 202,370,971
ABN-AMRO North America Finance Inc.
6.27%, 8/10/95.......................................................... 25,000,000 24,830,278
AT&T Corp.
6.20%, 7/24/95.......................................................... 35,000,000 34,864,268
Bear Stearns Companies Inc.
6.13%-6.16%, 7/17/95-8/21/95............................................ 80,000,000 79,491,634
Budget Funding Corp.
5.90%-6.09%, 7/17/95-9/29/95............................................ 139,800,000 138,690,983
Chase Manhattan Corp.
6.14%-6.45%, 7/24/95-1/2/96............................................. 190,000,000 186,996,539
Chemical Banking Corp.
6%-6.23%, 7/26/95-9/7/95................................................ 190,000,000 188,744,097
Chrysler Financial Corp.
6.04%, 7/17/95.......................................................... 50,000,000 49,866,444
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1995 (UNAUDITED)
PRINCIPAL
COMMERCIAL PAPER (CONTINUED) AMOUNT VALUE
-------- --------
Ciesco L.P.
6.02%, 8/29/95.......................................................... $ 20,000,000 $ 19,805,955
Commerzbank U.S. Finance Inc.
6.03%, 8/8/95........................................................... 69,600,000 69,162,873
Corporate Asset Funding Co. Inc.
6.01%-6.52%, 8/24/95-12/27/95........................................... 96,000,000 94,577,129
Den Danske Corp. Inc.
5.91%-6.41%, 7/20/95-1/5/96............................................. 155,000,000 153,102,126
Ford Motor Credit Co.
5.90%-6.33%, 8/24/95-1/9/96............................................. 135,000,000 132,688,048
General Electric Capital Corp.
6.03%-6.39%, 8/31/95-10/2/95............................................ 55,000,000 54,150,218
General Electric Capital Services Inc.
6.02%-6.26%, 8/30/95-1/29/96............................................ 135,000,000 132,968,347
General Motors Acceptance Corp.
5.90%-6.54%, 7/18/95-11/27/95........................................... 235,000,000 231,829,787
Generale Bank Inc.
6.19%-6.35%, 9/22/95-1/19/96............................................ 95,000,000 93,175,128
Goldman Sachs Group L.P.
5.91%-6.40%, 7/11/95-7/18/95............................................ 190,000,000 189,527,834
Internationale Nederlanden (U.S.) Funding Corp.
6.66%, 7/11/95-7/12/95.................................................. 65,000,000 64,880,855
Merrill Lynch & Co. Inc.
6.19%-6.28%, 7/11/95-2/2/96............................................. 99,000,000 97,985,583
Mitsubishi Motors Credit of America Inc.
5.97%-6.16%, 7/25/95-9/29/95 (a)........................................ 145,000,000 143,199,933
Monsanto Co.
6.23%, 7/11/95.......................................................... 15,000,000 14,974,583
Morgan Stanley Group Inc.
6%, 7/25/95............................................................. 50,000,000 49,802,000
NYNEX Corp.
6.12%-6.30%, 7/17/95-10/12/95........................................... 191,000,000 188,998,761
NationsBank Corp.
6.09%-6.22%, 10/23/95-11/06/95.......................................... 100,000,000 97,994,583
Preferred Receivables Funding Corp.
6.02%, 8/2/95........................................................... 15,000,000 14,920,400
Sears Roebuck Acceptance Corp.
6.24%-6.42%, 7/12/95-10/2/95............................................ 90,000,000 89,455,481
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1995 (UNAUDITED)
PRINCIPAL
COMMERCIAL PAPER (CONTINUED) AMOUNT VALUE
-------- --------
SwedBank Inc.
6%-6.21%, 7/17/95-9/25/95............................................... $ 175,000,000 $ 173,651,154
Toronto-Dominion Holdings U.S.A. Inc.
6.44%, 1/5/96........................................................... 50,000,000 48,396,778
----------
TOTAL COMMERCIAL PAPER (cost $3,061,102,770)................................ $3,061,102,770
=============
CORPORATE NOTES-8.5%
First National Bank of Boston
6.27%, 6/7/96 (b)....................................................... $ 70,000,000 $ 70,000,000
General Electric Capital Corp.
6.27%-6.35%, 2/9/96-4/5/96 (b).......................................... 149,500,000 149,489,072
Lehman Brothers Holdings Inc.
6.45%, 5/16/96 (b)...................................................... 48,000,000 48,000,000
Merrill Lynch & Co. Inc.
6.35%-6.40%, 3/13/96-4/22/96 (b)........................................ 125,000,000 124,969,078
-----------
TOTAL CORPORATE NOTES (cost $392,458,150)................................... $ 392,458,150
=============
SHORT-TERM BANK NOTES-11.3%
First National Bank of Boston
6.03%, 8/22/95.......................................................... $ 50,000,000 $ 50,000,000
First Union National Bank
6.12%, 7/31/95.......................................................... 100,000,000 100,000,000
NBD Bank
6.31%-6.50%, 9/15/95-1/29/96............................................ 225,000,000 224,997,615
NationsBank of North Carolina N.A.
6.33%, 9/19/95.......................................................... 30,000,000 30,000,000
PNC Bank N.A.
6.44%, 12/11/95......................................................... 75,000,000 75,012,638
Society National Bank
6.46%, 4/25/96.......................................................... 40,000,000 39,918,620
----------
TOTAL SHORT-TERM BANK NOTES (cost $519,928,873)............................. $ 519,928,873
============
U.S. GOVERNMENT AGENCIES-1.5%
Federal National Mortgage Association
Floating Rate Notes
6.18%, 1/13/97(b)
(cost $70,000,000)...................................................... $ 70,000,000 $ 70,000,000
============
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1995 (UNAUDITED)
PRINCIPAL
U.S. TREASURY BILLS-1.0% AMOUNT VALUE
-------- --------
5.58%, 6/27/96
(cost $47,345,333)...................................................... $ 50,000,000 $ 47,345,333
============
TIME DEPOSITS-3.9%
Republic National Bank of New York (London)
6.13%, 7/3/95
(cost $178,585,000)..................................................... $ 178,585,000 $ 178,585,000
============
TOTAL INVESTMENTS (cost $4,690,021,283)............................ 101.7% $4,690,021,283
====== =============
LIABILITIES, LESS CASH AND RECEIVABLES............................. (1.7%) $ (78,503,599)
====== =============
NET ASSETS ................................................... 100.0% $4,611,517,684
====== =============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Backed by an irrevocable letter of credit.
(b) Variable interest rate-subject to periodic change.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value-Note 1(a)........................... $4,690,021,283
Cash.................................................................... 40,959,752
Receivable for investments securities sold.............................. 124,769,535
Interest Receivable..................................................... 14,499,420
Prepaid expenses and other assets....................................... 1,396,994
-------------
4,871,646,984
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 2,748,124
Payable for investments securities purchased............................ 193,111,139
Payable for Common Stock redeemed....................................... 62,485,907
Accrued expenses........................................................ 1,784,130 260,129,300
----------- --------------
NET ASSETS ................................................................ $4,611,517,684
=============
REPRESENTED BY:
Paid-in capital......................................................... $4,613,653,114
Accumulated net realized (loss) on investments.......................... (2,135,430)
-------------
NET ASSETS at value applicable to 4,614,528,752 outstanding shares of
Common Stock, equivalent to $1.00 per share
(25 billion shares of $.10 par value authorized)........................ $4,611,517,684
==============
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 145,648,341
EXPENSES:
Management fee-Note 2(a).............................................. $ 11,017,188
Shareholder servicing costs-Note 2(b)................................. 7,889,462
Custodian fees........................................................ 137,979
Prospectus and shareholders' reports.................................. 132,790
Professional fees..................................................... 66,359
Registration fees..................................................... 53,998
Directors' fees and expenses-Note 2(c)................................ 43,606
Miscellaneous......................................................... 163,437
-------
TOTAL EXPENSES.................................................. 19,504,819
----------
INVESTMENT INCOME-NET....................................................... 126,143,522
NET REALIZED GAIN ON INVESTMENTS-Note 1(b).................................. 1,417,415
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 127,560,937
===========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30, 1995
1994 (UNAUDITED)
---------- ----------
<S> <C> <C>
OPERATIONS:
Investment income-net............................................. $ 169,276,064 $ 126,143,522
Net realized gain on investments.................................. 329,169 1,417,415
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ 169,605,233 127,560,937
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net............................................. (168,623,162) (126,796,424)
----------- -----------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold..................................... 14,805,667,408 8,116,660,579
Dividends reinvested.............................................. 167,952,577 126,192,313
Cost of shares redeemed........................................... (14,939,362,012) (8,495,473,602)
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS 34,257,973 (252,620,710)
-------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... 35,240,044 (251,856,197)
NET ASSETS:
Beginning of period............................................... 4,828,133,837 4,863,373,881
------------- -------------
End of period (including undistributed investment
income-net; $652,902 in 1994)................................... $ 4,863,373,881 $ 4,611,517,684
============= =============
See independent accountants' review report and notes to financial statements.
</TABLE>
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.
<TABLE>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30, 1995
___________________________________________________
PER SHARE DATA: 1990 1991 1992 1993 1994 (UNAUDITED)
____ ____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $.9997 $.9992 $.9991 $.9991 $.9990 $.9992
____ ____ ____ ____ ____ ____
INVESTMENT OPERATIONS:
Investment income-net............... .0764 .0570 .0341 .0261 .0348 .0267
Net realized gain (loss) on investments - (.0001) - (.0001) .0001 .0003
____ ____ ____ ____ ____ ____
TOTAL FROM INVESTMENT OPERATIONS.. .0764 .0569 .0341 .0260 .0349 .0270
____ ____ ____ ____ ____ ____
DISTRIBUTIONS;
Dividends from investment income-net (.0769) (.0570) (.0341) (.0261) (.0347) (.0269)
____ ____ ____ ____ ____ ____
Net asset value, end of period...... $.9992 $.9991 $.9991 $.9990 $.9992 $.9993
==== ==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN................. 7.99% 5.87% 3.47% 2.64% 3.53% 5.49%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .65% .67% .72% .77% .76% .83%*
Ratio of net investment income to
average net assets................ 7.66% 5.75% 3.43% 2.62% 3.49% 5.40%*
Net Assets, end of period (000's Omitted) $7,521,291 $6,200,255 $5,502,100 $4,828,134 $4,863,374 $4,611,518
* 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. 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. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group,
Inc. The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
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. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
(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 and
excise taxes.
The Fund has an unused capital loss carryover of approximately $3,553,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1994. If not
applied, $1,356,000 of the carryover expires in 1995, $2,126,000 expires in
1997 and $71,000 expires in 1998.
At June 30, 1995, 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.
DREYFUS LIQUID ASSETS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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, 1995.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, 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, 1995, the Fund was charged an
aggregate of $3,502,321 pursuant to the Shareholder Services Plan.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $6,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
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, 1995, and the related statements of operations and changes in net
assets and financial highlights for the six month period ended June 30, 1995.
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, 1994 and financial highlights for each of the five years in the
period ended December 31, 1994 and in our report dated January 27, 1995, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
[Ernst and Young LLP signature logo]
Ernst and Young LLP
New York, New York
August 2, 1994
[Dreyfus lion "d" logo]
Liquid
Assets, Inc.
Semi-Annual
Report
June 30, 1995
DREYFUS LIQUID ASSETS, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 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. 039SA956
[Dreyfus logo]
