(ICON)
Prudential
Tax-Free
Money
Fund, Inc.
SEMI
ANNUAL
REPORT
June 30, 1995
Prudential Mutual Funds
Building Your Future
On Our StrengthSM (LOGO)
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Performance At A Glance.
Tax-free money market investors have seen higher yields over the past 18
months. But nothing lasts forever. On July 6, the Federal Reserve cut taxable
short-term interest rates. That means that yields on short-term municipal
securities may soon trend lower. The Prudential Tax-Free Money Market Fund
produced competitive yields over the past six months. As of June 30, 1995, the
Fund's 7-day current yield had risen to 3.5% from 2.3% last December.
Shareholders in the 39.6% tax bracket would have to have earned 5.8% from a
taxable investment to match this return.
<TABLE>
<CAPTION>
Fund Facts
As of 6/30/95
7-Day Net Asset Taxable Equivalent Yield*
Weighted Total
Current Yld. Value @31% @36% @39.6% Avg.
Mat. Assets (mil.)
<S> <C> <C> <C> <C>
<C>
Tax-Free
Money Fund 3.5% $1.00 .1% 5.5% 5.8% 54
Days $445
IBC/Donoghue
Tax-Free Avg.** 3.5 1.00 5.1 5.5 5.8 46
Days N/A
</TABLE>
Note: Yields will fluctuate from time to time and past performance is no
guarantee of future results.An investment in the Fund is neither insured nor
guaranteed by the U.S. government and there can be no assurance that the Fund
will be able to maintain a stable net asset value.
*Some investors may be subject to the federal alternative minimum tax.
**This is the average 7-day current yield, NAV and WAM of 139 funds in
International Business Communications/Donoghue's tax-free money market fund
category as of June 27, 1995.
GRAPH
Source: Lipper Analytical Services, Inc. Financial markets change, so a mutual
fund's past performance should never be used to predict future results. The
risks to each of the investments listed above are different -- we provide 12-
month total returns for several Lipper mutual fund categories to show you that
reaching for higher yields means tolerating more risk. The greater the risk,
the larger the potential reward or loss. In addition, we've added historical
20-year average annual returns to show that 1995's returns (so far) are higher
than normal. These returns assume the reinvestment of dividends.
Stock funds will fluctuate a great deal. Smaller capitalization stocks offer
greater potential for long term growth but may be more volatile than larger
capitalization stocks. Investors receive higher historical total returns from
stocks than from most other investments.
Bond funds provide more income than stock funds, which can help smooth out
their total returns year by year. But their prices still fluctuate (sometimes
a good deal) and their returns are historically lower than those of stock funds.
Sector or specialty stock funds usually entail the greatest risks because they
are not widely diversified. They are designed for sophisticated investors who
can tolerate additional risk in exchange for higher potential rewards or losses.
Money market funds attempt to preserve a constant share value; they don't
fluctuate much in price but their returns are generally among the lowest of the
major investment categories.
<PAGE>
Rick Lynes, Fund Manager
Portfolio
Manager's Report
The Prudential Tax-Free Money Fund seeks high current income that is exempt
from federal income taxes, consistent with liquidity and the stability of
capital. The Fund invests in a diversified portfolio of short-term municipal
securities of state and local governments. There is no assurance that the
Fund's investment objective will be achieved.
PICTURE
A Word About QualityWe typically will purchase securities with maturities of
one year or less that are rated in one of the two highest categories (Bonds:
Aaa, Aa; Notes: MIG-1, MIG-2, P-1 or P-2) by Moody's Investors Services, Inc.
or (Bonds: AAA, AA; Notes: SP-1, SP-1+, A1 or A-2) by Standard & Poor's Rating
Group or, if not rated, deemed to be of comparable quality by the Fund's
investment adviser. Although there is never a guarantee that the share price
of the Prudential Tax-Free Money Market Fund will stay at $1, we at Prudential
emphasize a conservative, quality-oriented investment approach.
1. Strategy Session.
In order to foster sustainable, non-inflationary economic growth, the Federal
Reserve indirectly controls short-term interest rates by adjusting the targeted
federal funds rate, the rate banks charge each other for overnight lending.
Over the past 18 months the Federal Reserve increased this rate to 6% -- or
double what is was in February, 1994. Tax-free money market yields have tracked
between 2.7% and 4.0% during this time, finishing the reporting period at 3.5%,
according to IBC/Donoghue, (which is equivalent to a 5.8% taxable yield for
individuals in the highest tax bracket). As it turned out, February's move was
the seventh and final increase the Federal Reserve would make in its year-long
campaign to moderate growth and reduce inflation. On July 6, the central bank
cut taxable rates 25 basis points to 5.75%. The decrease was prompted by
concerns over a rapidly decelerating economy.
GRAPH
<PAGE>
2. A Different Market.
Seasonal Factors at Work.
In December and January the Prudential Tax-Free Money Fund held longer
maturities of 63 days and 58 days, respectively. We did so to maintain yield
during the traditional year-end rush by investors who withdraw cash for holiday
and tax purposes. This increases supply and drives down the price of bonds
while pushing up yields. For example, on Jan. 1, 1995, tax-free yields peaked
at 4%, according to IBC/Donoghue, as supply exceeded demand.
Conversely the reverse was true at month end when yields tumbled to 2.8% as
investor money poured back into the market, creating excess demand that drove
up bond prices while depressing yields.
In January, tax-free yields fell by 130 basis points (a basis point is 1/100
of a percentage point) to 2.7% from 4.0% in only 23 days. Yields fell 51 basis
points to 2.85% from 3.56% in another two-week period in early June.
Why such wide fluctuations? The answer is that short-term municipal securities
are not as immediately sensitive to the ongoing economic and interest rate
pressures as their taxable counterparts. This is a different market where
seasonal supply-and-demand factors are important.
3. What Went Well.
Taking Care of Business.
Uncertainty increased in the second quarter as speculation grew about the
Federal Reserve's next move and June approached -- a big month when many
municipal issues mature and/or are refinanced.
We were able to take advantage of attractive yields that were offered by some
state and local agency securities. We purchased school district bonds from
Neenah, WI, that were yielding 4.4% and mature in May, 1996. Comparable bonds
at the time were yielding 3.8% or 60 basis points (0.6%) less than this
holding. Illinois also offered opportunities where short-term municipal
securities were also priced attractively and sold in large blocks.
4. Looking Ahead.
Tax-free yields have peaked and are on their way down. The Federal Reserve has
already reduced short-term taxable rates once this year and further reductions
are possible. Short-term municipal markets will adjust to these lower rates
just as they did when rates were increasing. This may not be welcome news for
money market shareholders. Keep in mind why investors choose a tax-free money
market fund in the first place -- liquidity for day-to-day finances, investment
flexibility or for income tax purposes. Your Fund is a short-term investment.
There are many Prudential municipal mutual funds available that seek tax-
advantaged growth or income over the long term.
1
<PAGE>
President's Letter
July 31, 1995
Dear Shareholder:
You've probably noticed your shareholder report looks different this month.
We've designed it to provide clear, concise and forthright information about
your investment, its performance, risks and potential rewards. And, from time
to time, I'll share some thoughts with you about the industry, mutual fund
trends and how we're responding to them at Prudential Mutual Funds.
PICTURE
On The Hill
One recent trend we like is part of the "Contract with America." It's called
the American Dream Savings Account and it was approved by the House of
Representatives earlier in the year. The Senate has now taken up the proposal,
which would improve the traditional Individual Retirement Account program by
allowing higher non-working spouse contributions. The proposed law would also
allow tax-free and penalty-free withdrawals from the account before age 59 1/2,
for certain expenses. Prudential Mutual Funds supports the proposal and we urge
you to share your opinion about it with your Senator. You can reach your
Senator's office by calling 202-224-3121.
In Closing
One final note: if you're a Class B shareholder in other Prudential Mutual
Funds, you'll begin noticing a change on your statements once you've held your
shares for seven years. At that time they will automatically begin to convert
to Class A shares on a quarterly basis. Since Class A shares carry lower annual
distribution charges than Class B shares, your total returns will automatically
rise after the conversion. Conversions started earlier this year and will occur
each calendar quarter--beginning in December, 1995, they'll take place every
March, June, September and December.
I hope you'll find this information useful as you work with your financial
advisor or registered representative to develop your personal investment plan.
Thank you for choosing Prudential Mutual Funds for your mutual fund investment.
Sincerely,
Richard A. Redeker
President
2
<PAGE>
Portfolio of Investments as
of June 30, 1995 (Unaudited) PRUDENTIAL TAX-FREE MONEY FUND
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Moody's
Interest Maturity Par Market
Description Rating
Rate Date Value Value
<S> <C>
<C> <C> <C> <C>
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
SHORT-TERM INVESTMENTS--99.7%
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Alabama--2.1%
Chatom Ind. Dev. Auth., Nat'l. Rural CFC, T.E.C.P., Ser. 93T VMIG
3.60% 8/04/95 $ 9,500 $ 9,500,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Arizona--3.3%
Maricopa Cnty. Ind. Dev. Auth., Grand Canyon Univ., F.R.W.D., SP-1+*
4.20 7/06/95 14,700 14,700,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
California--2.2%
California Higher Ed. Ln. Auth. Inc., Student Ln. Rev.,
A.N.N.M.T.,
Ser. 87A A-1+*
3.90 7/01/96 9,800 9,800,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Colorado--5.9%
Arapahoe Cnty. Multifamily Rev., Var. Ref. Hsg. Stratford Sta.
Proj., F.R.D.D., Ser. 94 A-1*
4.50 7/03/95 6,055 6,055,000
Colorado Hlth. Facs. Auth. Rev. Frasier Meadows Manor, F.R.W.D.,
Ser. 94 NR
4.20 7/06/95 10,000 10,000,000
Colorado Hsg. Fin. Auth., Eagle Trust, F.R.W.D.S., Ser. 94C A-1*
4.25 7/06/95 10,000 10,000,000
- - ------------
26,055,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Connecticut--4.1%
Connecticut Spec. Tax Oblig., Trans. Infrastructure Rev.,
F.R.W.D., Ser. 90 I VMIG1
4.00 7/05/95 1,300 1,300,000
Connecticut St. Hsg. Fin. Auth., Prog., A.N.N.M.T.,
Hsg. Mtg. Fin. Auth., Ser.93E-1 VMIG1
4.40 11/15/95 7,100 7,098,667
Hsg. Mtg. Fin. Auth., Ser. 94E-1 VMIG1
4.40 11/15/95 10,000 10,000,000
- - ------------
18,398,667
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
District Of Columbia--7.6%
Dist. of Columbia Hsg. Fin. Agcy., Carmel Plaza, F.R.W.D., Ser.
91 VMIG1
4.15 7/06/95 8,830 8,830,000
Dist. of Columbia Rev., F.R.D.D.,
Amer. Assoc. for the Advancement of Science, Ser. 95 P-1
4.25 7/03/95 2,500 2,500,000
Gen. Oblig., Ser. 92A-2 VMIG1
4.40 7/03/95 700 700,000
Gen. Oblig., Ser. 92A-3 VMIG1
4.40 7/03/95 7,400 7,400,000
Gen. Oblig., Ser. 92A-4 VMIG1
4.40 7/03/95 7,200 7,200,000
Gen. Oblig., Ser. 92A-5 VMIG1
4.40 7/03/95 6,200 6,200,000
Gen. Oblig., Ser. 92A-6 VMIG1
4.40 7/03/95 1,000 1,000,000
- - ------------
33,830,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Florida--0.9%
Putnam Cnty. Dev. Auth., Seminole Elec. Proj., S.E.M.O.T., Ser.
84H-4 A-1+*
4.30 9/15/95 4,085 4,085,000
</TABLE>
- - --------------------------------------------------------------------------------
See Notes to Financial Statements. 3 -----
<PAGE>
Portfolio of Investments as
of June 30, 1995 (Unaudited) PRUDENTIAL TAX-FREE MONEY FUND
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Moody's
Interest Maturity Par Market
Description Rating
Rate Date Value Value
<S> <C>
<C> <C> <C> <C>
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Georgia--4.9%
Burke Cnty. Dev. Auth., Poll. Ctrl. Pwr. Plant Co., Vogtle
Proj., F.R.D.D.,
Ser. 94A VMIG1
4.35% 7/03/95 $ 5,000 $ 5,000,000
Ser. 94-8 VMIG1
4.35 7/03/95 1,800 1,800,000
Cobb Cnty. Dev. Auth. Rev., Inst. of Nuclear Pwr., F.R.W.D.,
Ser. 92 NR
4.25 7/05/95 7,255 7,255,000
Fulton Cnty. Dev. Auth. Ind. Rev., Siemen's Energy Inc.,
F.R.W.D., Ser. 94 VMIG1
4.20 7/06/95 7,750 7,750,000
- - ------------
21,805,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Illinois--14.6%
Chicago O'Hare Int'l. Arpt., Amer. Airlines Inc., F.R.D.D.,
Ser. 83A P1
4.50 7/03/95 1,400 1,400,000
Ser. 83D P1
4.60 7/03/95 1,700 1,700,000
Cook Cnty. Gen. Oblig., Cap. Equip.Proj., F.R.W.D., Ser. A VMIG1
4.20 7/05/95 6,500 6,500,000
Hazel Crest Vlg. Rev., Waterford Estates Proj., F.R.W.D., Ser.
92A VMIG1
4.20 7/07/95 7,500 7,500,000
Illinois Dev. Fin. Auth. Rev., F.R.W.D.,
Orleans Multifamily Hsg., Ser. 92 A-1*
4.20 7/07/95 10,120 10,120,000
Palos Cmnty. Hosp. VMIG1
4.00 7/06/95 4,000 4,000,000
Illinois Hlth. Fac. Auth. Rev. Evanston Hsp. Corp. Proj.,
S.E.M.M.T., Ser. 92 VMIG1
4.30 2/29/96 7,000 7,000,000
Joliet Regl. Port Dist. Ind. Bldg. Dow Chemical Rev., F.R.D.D.,
Ser. 85 P-1
4.35 7/03/95 2,040 2,040,000
Vlg. of Schaumburg Multifamily Hsg. Rev., Windsong Apts. Proj.,
F.R.W.D., Ser. 95 A-1*
4.50 7/06/95 5,000 5,000,000
Wheeling Multifamily Hsg. Rev., Woodland Creek II, F.R.W.D.,
Ser. 90 SP-1+*
4.15 7/07/95 9,655 9,655,000
Woodridge Dupage Cntys., Multifamily Hsg. Rev. Rfdg., Hinsdale
Terr. Apts., F.R.W.D., Ser. 90 A-1+*
4.20 7/07/95 10,000 10,000,000
- - ------------
64,915,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Indiana--1.1%
Gary Environ. Impvt. Rev., U.S.Steel Corp., T.E.C.P., Ser. 86 VMIG2
4.15 7/20/95 4,800 4,800,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Kansas--1.0%
Kansas City Poll. Ctrl. Rev., Gen. Mtrs. Corp. Proj., F.R.W.D.,
Ser. 85 VMIG2
4.20 7/04/95 4,350 4,350,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Louisiana--0.5%
Louisiana Pub. Facs. Auth. Rev., Ind. Dev. Kenner Hotel Ltd.,
F.R.D.D.,
Ser. 85 P-1
4.35 7/03/95 2,200 2,200,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Maine--1.8%
Biddeford Res. Rec. Rev., Energy Recovery Co. Proj., F.R.M.D.,
Ser. 85 VMIG1
3.95 7/03/95 7,900 7,900,000
</TABLE>
- - --------------------------------------------------------------------------------
- - ----- 4 See Notes to Financial Statements.
<PAGE>
Portfolio of Investments as
of June 30, 1995 (Unaudited) PRUDENTIAL TAX-FREE MONEY FUND
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Moody's
Interest Maturity Par Market
Description Rating
Rate Date Value Value
<S> <C>
<C> <C> <C> <C>
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Maryland--4.4%
Baltimore Cnty. Poll. Ctrl. Rev., Baltimore Gas & Elec Co.,
T.E.C.P., Ser. 85 VMIG1
4.20% 8/01/95 $ 800 $ 800,000
Maryland St. Cmnty. Dev. Auth., Sngl. Fam. Mtg. Rev.,
S.E.M.O.T.,
Ser. 87-4 Aa
4.35 10/01/95 5,145 5,145,000
Ser. 87-6 Aa
4.35 10/01/95 6,070 6,070,000
Maryland St. Econ. Dev. Corp., F.R.W.D., Ser. 95 A-1*
4.20 7/06/95 7,500 7,500,000
- - ------------
19,515,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Michigan--6.3%
Grand Rapids Econ. Dev. Corp., Ind. Dev. Rev. Rfdg., F.R.W.D.,
Ser. 92 CPS1
4.15 7/06/95 7,500 7,500,000
Michigan Mun. Bond Auth. Rev., R.A.N., Ser. 94B SP-1+*
4.75 7/20/95 20,700 20,707,769
- - ------------
28,207,769
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Minnesota--3.2%
Minnesota St. Hsg. Fin. Agcy., Sngl. Fam. Mtg. Rev., A.N.N.M.T.,
Ser. 93F VMIG1
5.25 1/16/96 7,500 7,500,000
Minnetonka Multifamily Hsg. Rev., Cliffs Ridgedale Proj.,
F.R.W.D., Ser. 85A A-1*
4.15 7/07/95 6,900 6,900,000
- - ------------
14,400,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Nebraska--2.0%
Nebraska Invest. Fin. Auth., Briarhurst Candletree Proj.,
S.E.M.M.T., Ser. 85 A-1*
4.50 10/01/95 8,890 8,890,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
New Mexico--1.1%
Albuquerque Arpt. Rev., Adj. Ref. Sub. Lien, F.R.W.D., Ser. 95 VMIG1
4.15 7/05/95 5,000 5,000,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
New York--1.8%
New York City Gen. Oblig., F.R.W.D., Ser. 95F-3 VMIG1
4.25 7/05/95 3,400 3,400,000
New York City Unltd. Tax, JPM Putters, F.R.W.D.S., Ser. 33 VMIG1
4.40 7/06/95 4,500 4,500,000
- - ------------
7,900,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
North Carolina--1.6%
Rockingham Cnty. Ind. Facs., Poll. Ctrl. Rev., Phillip Morris
Proj., F.R.W.D., P-1
4.15 7/05/95 7,200 7,200,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Ohio--3.8%
Ohio St. Air Quality Dev. Auth., Cincinnati Elect. & Gas,
T.E.C.P., Ser. 85 P-1
3.85 8/04/95 4,200 4,200,000
Ohio St. Wtr. Dev. Auth. Rev., Gen. Motors Corp. Proj.,
F.R.W.D., Ser. 85 VMIG1
4.10 7/04/95 4,160 4,160,000
Toledo-Lucas Cnty., Convntn. & Visitors Bureau, M.T.H.O.T., Ser.
88 VMIG2
3.90 8/01/95 8,300 8,300,000
- - ------------
16,660,000
</TABLE>
- - --------------------------------------------------------------------------------
See Notes to Financial Statements. 5 -----
<PAGE>
Portfolio of Investments as
of June 30, 1995 (Unaudited) PRUDENTIAL TAX-FREE MONEY FUND
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Moody's
Interest Maturity Par Market
Description Rating
Rate Date Value Value
<S> <C>
<C> <C> <C> <C>
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Oklahoma--5.2%
Oklahoma Cnty. Ind. Auth. Rev., Baptist Gen. Conv., Q.T.R.M.T. VMIG1
4.15% 9/01/95 $13,940 $ 13,940,000
Tulsa Pkg. Auth. Rev., Williams Ctr. Proj., S.E.M.M.T., Ser. 87A VMIG1
4.30 11/15/95 9,000 9,000,000
- - ------------
22,940,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Oregon--2.3%
Klamath Falls Elec. Rev., Salt Caves Hydroelectric, A.N.N.M.T.,
Ser. 86D SP-1+*
4.40 5/02/96 10,000 10,000,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
South Carolina--1.1%
York Cnty. Poll. Ctrl. Rev., Duke Pwr. Co. Proj., T.E.C.P., Ser.
90 VMIG1
4.20 8/17/95 5,000 5,000,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Tennessee--2.1%
Memphis Hlth. Edl. & Hsg. Fac. Brd., Rev., Wesley Hsg. Corp.,
F.R.W.D.,
Ser. 89 VMIG2
4.20 7/07/95 9,320 9,320,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Texas--7.0%
Austin Util. Sys. Rev., Mun. Trust Rcpts., F.R.W.D.S., Ser. SG30 A-1+*
4.35 7/06/95 10,400 10,400,000
Harris Cnty. Hlth. Fac. Dev. Corp., Methodist Hosp. Rev.,
F.R.D.D., Ser. 94 A-1+*
4.50 7/05/95 2,800 2,800,000
Houston Gen'l. Oblig., T.E.C.P., Ser. A P-1
3.80 8/16/95 2,400 2,400,000
Port Arthur Nav. Dist. Poll. Ctrl. Rev., Ref. Texaco Inc. Proj.,
F.R.D.D.,
Ser. 94 VMIG
4.25 7/03/95 3,800 3,800,000
San Antonio Elec. & Gas Rev., T.E.C.P., Ser. A P-1
4.125 7/25/95 5,100 5,100,000
Southeast Texas Hsg. Fin. Corp., Banc One, Tax Exempt Trust,
F.R.W.D., Ser. 91D Aaa
4.30 7/06/95 6,775 6,775,000
- - ------------
31,275,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Virginia--3.8%
Chesterfield Cnty. Ind. Dev. Auth.,
Philip Morris Proj., F.R.W.D., P-1
4.15 7/05/95 6,500 6,500,000
Virginia Elec. Pwr. Co. Proj., T.E.C.P., Ser. 87A VMIG1
4.00 8/03/95 4,650 4,650,000
Culpeper Ind. Dev. Auth., Residential Care Fac. Rev., F.R.W.D.,
Ser. 92 A-1*
4.20 7/06/95 5,800 5,800,000
- - ------------
16,950,000
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Wisconsin--4.0%
Neenah Jt. Sch. Dist., B.A.N. NR
4.40 5/01/96 10,000 10,000,000
Wisconsin Hsg. & Econ. Dev. Auth., Home Ownership Rev.,
Q.T.R.O.T., Ser. 87B Aaa
3.90 9/01/95 7,640 7,640,000
- - ------------
17,640,000
</TABLE>
- - --------------------------------------------------------------------------------
- - ----- 6 See Notes to Financial Statements.
<PAGE>
Portfolio of Investments as
of June 30, 1995 (Unaudited) PRUDENTIAL TAX-FREE MONEY FUND
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Description
Value
<S> <C>
<C> <C> <C> <C>
- - --------------------------------------------------------------------------------
- - ----------------------------------------------
Total Investments--99.7%
(amortized cost $443,236,436; Note 1)
$443,236,436
Other assets in excess of liabilities--0.3%
1,475,713
- - ------------
Net Assets--100%
$444,712,149
- - ------------
- - ------------
</TABLE>
- - ---------------
(a) The following abbreviations are used in portfolio descriptions:
A.N.N.M.T.--Annual Mandatory Tender
B.A.N.--Bond Anticipation Note
F.R.D.D.--Floating Rate (Daily) Demand Note**
F.R.M.D.--Floating Rate (Monthly) Demand Note**
F.R.W.D.--Floating Rate (Weekly) Demand Note**
F.R.W.D.S.--Floating Rate (Weekly) Demand Note Synthetic**
M.T.H.O.T.--Monthly Optional Tender
Q.T.R.M.T.--Quarterly Tax & Reserve Mandatory Tender
Q.T.R.O.T.--Quarterly Tax & Reserve Optional Tender
R.A.N.--Revenue Anticipation Note
S.E.M.M.T.--Semi-Annual Mandatory Tender
S.E.M.O.T.--Semi-Monthly Tender Offer
T.E.C.P.--Tax-Exempt Commercial Paper
* Standard & Poor's Rating.
** For purposes of amortized cost valuation, the maturity date of these
instruments is considered to be the later of the next date on which the
security can be redeemed at par, or the next date on which the rate of
interest is adjusted.
NR--Not Rated by Moody's or Standard & Poor's.
The Fund's current Statement of Additional Information contains a description of
Moody's and Standard and Poor's ratings.
- - --------------------------------------------------------------------------------
See Notes to Financial Statements. 7 -----
<PAGE>
Statement of Assets and Liabilities (Unaudited) PRUDENTIAL TAX-FREE MONEY FUND
- - --------------------------------------------------------------------------------
<TABLE>
<S>
<C>
ASSETS
June 30, 1995
Investments, at
value...........................................................................
............. $443,236,436
Cash............................................................................
............................. 110,747
Receivable for investments
sold............................................................................
.. 11,300,000
Receivable for Fund shares
sold............................................................................
.. 3,749,217
Interest
receivable......................................................................
.................... 3,702,206
Deferred
expenses........................................................................
.................... 19,649
- - ------------
Total
assets..........................................................................
.................... 462,118,255
- - ------------
Liabilities
Payable for investments
purchased.......................................................................
..... 9,802,123
Payable for Fund shares
reacquired......................................................................
..... 7,137,518
Dividends
payable.........................................................................
................... 213,208
Due to
Manager.........................................................................
...................... 181,452
Accrued expenses and other
liabilities.....................................................................
.. 55,253
Due to
Distributor.....................................................................
...................... 16,552
- - ------------
Total
liabilities.....................................................................
.................... 17,406,106
- - ------------
Net
Assets..........................................................................
......................... $444,712,149
- - ------------
Net assets were comprised of:
Common stock, $.01 par
value...........................................................................
... $ 4,448,064
Paid-in capital in excess of
par..........................................................................
440,264,085
- - ------------
Net assets, June 30,
1995............................................................................
..... $444,712,149
- - ------------
- - ------------
Net asset value, offering price and redemption price per share ($444,712,149 /
444,806,428 shares)........... $1.00
- - ------------
- - ------------
</TABLE>
- - --------------------------------------------------------------------------------
- - ----- 8 See Notes to Financial Statements.
<PAGE>
PRUDENTIAL TAX-FREE MONEY FUND
Statement of Operations (Unaudited)
- - ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income June 30, 1995
<S> <C>
Income
Interest..................................... $ 9,711,273
-------------
Expenses
Management fee............................... 1,200,783
Distribution fee............................. 300,196
Transfer agent's fees and expenses........... 183,800
Custodian's fees and expenses................ 74,400
Franchise taxes.............................. 39,400
Registration fees............................ 27,500
Audit fee.................................... 22,900
Reports to shareholders...................... 20,400
Directors' fees.............................. 15,000
Insurance.................................... 8,900
Legal fees................................... 8,300
Miscellaneous................................ 907
-------------
Total expenses............................ 1,902,486
-------------
Net investment income........................... 7,808,787
-------------
Net Increase in Net Assets...................... $ 7,808,787
-------------
-------------
</TABLE>
<TABLE>
PRUDENTIAL TAX-FREE MONEY FUND
Statement of Changes in Net Assets (Unaudited)
<CAPTION>
Six Months Year Ended
Increase (Decrease) Ended December 31,
in Net Assets June 30, 1995 1994
<S> <C> <C>
Operations
Net investment income....... $ 7,808,787 $ 14,565,371
-------------- --------------
Net increase in net assets
resulting from
operations............... 7,808,787 14,565,371
-------------- --------------
Dividends and distributions to
shareholders................ (7,808,787) (14,565,371)
-------------- --------------
Series share transactions
(at $1.00 per share)
Net proceeds from shares
subscribed............... 765,433,725 1,984,509,938
Net asset value of shares
issued to shareholders in
reinvestment of dividends
and distributions........ 7,404,340 13,746,715
Cost of shares reacquired... (815,416,366) (2,112,588,085)
-------------- --------------
Net decrease in net assets from
Series share transactions... (42,578,301) (114,331,432)
-------------- --------------
Total decrease................. (42,578,301) (114,331,432)
Net Assets
Beginning of period............ 487,290,450 601,621,882
-------------- --------------
End of period.................. $ 444,712,149 $ 487,290,450
-------------- --------------
-------------- --------------
</TABLE>
- - --------------------------------------------------------------------------------
See Notes to Financial Statements. 9 -----
<PAGE>
Notes to Financial Statements (Unaudited) PRUDENTIAL TAX-FREE MONEY FUND
- - --------------------------------------------------------------------------------
Prudential-Bache Tax-Free Money Fund, Inc., doing business as Prudential
Tax-Free Money Fund (the ``Fund''), is registered under the Investment Company
Act of 1940 as a diversified, open-end management investment company. The
investment objective of the Fund is to attain the highest level of current
income that is exempt from federal income taxes, consistent with liquidity and
preservation of capital. The Fund will invest in short-term tax-exempt debt
securities of state and local governments. The ability of the issuers of the
securities held by the Fund to meet their obligations may be affected by
economic or political developments in a specific state, industry or region.
- - ------------------------------------------------------------
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation: Portfolio securities are valued at amortized cost, which
approximates market value. The amortized cost method of valuation involves
valuing a security at its cost on the date of purchase and thereafter assuming a
constant amortization to maturity of any discount or premium.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on an identified cost basis. Interest income is recorded on an
accrual basis. The cost of portfolio securities for federal income tax purposes
is substantially the same as for financial reporting purposes.
Federal Income Taxes: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net income to its shareholders. For this
reason and because substantially all the Fund's gross income consists of
tax-exempt interest, no federal income tax provision is required.
Dividends: The Fund declares dividends daily from net investment income. Payment
of dividends is made monthly.
- - ------------------------------------------------------------
Note 2. Agreements
The Fund has a management agreement with Prudential Mutual Fund Management, Inc.
(``PMF''). Pursuant to this agreement PMF has responsibility for all investment
advisory services and supervises the subadviser's performance of such services.
PMF has entered into a subadvisory agreement with Prudential Investment
Corporation (``PIC''); PIC furnishes investment advisory services in connection
with the management of the Fund. PMF pays for the cost of the subadviser's
services, the compensation of officers of the Fund, occupancy and certain
clerical and bookkeeping costs of the Fund. The Fund bears all other costs and
expenses.
The management fee paid PMF is computed daily and payable monthly, at an annual
rate of .50 of 1% of the Fund's average daily net assets up to $750 million,
.425 of 1% of the next $750 million of average daily net assets and .375 of 1%
of average daily net assets in excess of $1.5 billion.
The Fund has a distribution agreement with Prudential Mutual Fund Distributors,
Inc. (``PMFD''). To reimburse PMFD for its expenses incurred pursuant to a plan
of distribution, the Fund pays PMFD a reimbursement, accrued daily and payable
monthly, at an annual rate of .125 of 1% of the Fund's average daily net assets.
PMFD pays various broker-dealers, including Prudential Securities Incorporated
(``PSI'') and Pruco Securities Corporation, affiliated broker-dealers, for
account servicing fees and other expenses incurred by such broker-dealers. PMFD
is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are (indirect)
wholly-owned subsidiaries of The Prudential Insurance Company of America.
- - ------------------------------------------------------------
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services, Inc. (``PMFS''), a wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and during the six months ended June
30, 1995, the Fund incurred fees of $177,400 for the services of PMFS. As of
June 30, 1995, approximately $29,300 of such fees were due to PMFS. Transfer
agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to non-affiliates.
- - --------------------------------------------------------------------------------
- - ----- 10
<PAGE>
Financial Highlights (Unaudited) PRUDENTIAL TAX-FREE MONEY FUND
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended December 31,
June 30, ---------------
- - ---------------------------------------------
1995 1994
1993 1992 1991 1990
<S> <C> <C>
<C> <C> <C> <C>
---------- -------- --
- - ------ -------- -------- --------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 1.00 $ 1.00 $
1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income and realized gains...... .016 .023
.018 .026 .041 .053
Dividends and distributions to shareholders... (.016) (.023)
(.018) (.026) (.041) (.053)
---------- -------- --
- - ------ -------- -------- --------
Net asset value, end of period................ $ 1.00 $ 1.00 $
1.00 $ 1.00 $ 1.00 $ 1.00
---------- -------- --
- - ------ -------- -------- --------
---------- -------- --
- - ------ -------- -------- --------
TOTAL RETURN(a):.............................. 1.62% 2.31%
1.86% 2.63% 4.22% 5.42%
Ratios/Supplemental Data:
Net assets, end of year (000)................. $444,712 $487,290
$601,622 $614,333 $616,867 $700,859
Average net assets (000)...................... $484,294 $644,481
$726,571 $669,588 $725,844 $701,869
Ratios to average net assets:
Expenses, including distribution fee....... .79%(b) .75%
.74% .74% .75% .74%
Expenses, excluding distribution fee....... .67%(b) .63%
.62% .62% .63% .61%
Net investment income...................... 3.25%(b) 2.26%
1.84% 2.60% 4.15% 5.30%
</TABLE>
- - ---------------
(a) Total return is calculated assuming a purchase of shares on the first
day and a sale on the last day of each period reported and includes
reinvestment of dividends and distributions. Total returns for periods
less than a full year are not annualized.
(b) Annualized.
- - --------------------------------------------------------------------------------
See Notes to Financial Statements. 11 -----
<PAGE>
This page intentionally left blank
<PAGE>
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll Free (800) 225-1852
Directors
Delayne Dedrick Gold
Arthur Hauspurg
Stephen P. Munn
Richard A. Redeker
Louis A. Weil III
Officers
Richard A. Redeker, President
David W. Drasnin, Vice President
Robert F. Gunia, Vice President
Grace Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Ronald Amblard, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributor
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
The accompanying financial statements as of June 30, 1995 were not audited and,
accordingly, no opinion is expressed on them.
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
<PAGE>
Prudential Mutual Funds
Building Your Future
On Our StrengthSM (LOGO)
BULK RATE
U.S. POSTAGE
PAID
Permit 6807
New York, NY
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll Free (800) 225-1852
MF103E2
74436P103 Cat. # 444004C
