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.
<TABLE>
<CAPTION>
THE DREYFUS THIRD CENTURY FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS NOVEMBER 30, 1998 (UNAUDITED)
Common Stocks--98.7% Shares Value
- ------------------------------------------------------- _____________ _____________
<S> <C> <C>
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.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS THIRD CENTURY FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1998 (UNAUDITED)
Cost Value
_____________ _____________
<S> <C> <C>
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.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS THIRD CENTURY FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS NOVEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C>
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.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS THIRD CENTURY FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
November 30, 1998 Year Ended
(Unaudited) May 31, 1998
_________________ ______________
<S> <C> <C>
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.
</TABLE>
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.
<TABLE>
<CAPTION>
Six Months Ended
November 30, 1998 Year Ended November 30,
____________________________________________________
PER SHARE DATA: (Unaudited) 1998 1997 1996 1995 1994
____________________ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
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.
