<PAGE>
SEMIANNUAL REPORT JUNE 30, 2000
Prudential
Tax-Free Money Fund, Inc.
Fund Type Money market
Objective The highest level of current income that is exempt from federal
income taxes, consistent with liquidity and the preservation of capital
(GRAPHIC)
This report is not authorized for distribution to
prospective investors unless preceded or accompanied by a
current prospectus.
The views expressed in this report and information about
the Fund's portfolio holdings are for the period covered
by this report and are subject to change thereafter.
(LOGO)
<PAGE>
Build on the Rock
Investment Goals and Style
The Prudential Tax-Free Money Fund, Inc. seeks the
highest level of current income that is exempt from
federal income taxes, consistent with liquidity and the
preservation of capital. The Fund invests in a
diversified portfolio of high-quality, short-term
municipal bonds issued by state and local governments,
territories and possessions of the United States, and by
the District of Columbia. Maturities can range from one
day to a maximum of 13 months. We purchase only
securities rated in one of the two highest rating
categories by at least two nationally recognized
statistical rating organizations or, if not rated, deemed
to be of equivalent quality by our credit research staff.
There can be no assurance that the Fund will achieve its
investment objective.
Tax-Free Money Fund Yield Comparison
(GRAPH)
<PAGE>
Performance at a Glance
Fund Facts As of 6/30/00
<TABLE>
<CAPTION>
7-Day Net Asset Weighted Avg. Net Assets
Current Yld. Value (NAV) Mat. (WAM) (Millions)
<S> <C> <C> <C> <C>
Prudential Tax-Free Money Fund, Inc. 3.79% $1.00 41 Days $172
iMoneyNet, Inc.
Money Fund (SB & GP) Avg.** 3.95% $1.00 36 Days N/A
</TABLE>
Taxable Equivalent Yield* As of 6/30/00
<TABLE>
<CAPTION>
@31% @36% @39.6%
<S> <C> <C> <C>
Prudential Tax-Free Money Fund, Inc. 5.16% 5.56% 5.89%
iMoneyNet, Inc.
Money Fund (SB & GP) Avg.** 5.72% 6.17% 6.54%
</TABLE>
Note: Yields will fluctuate from time to time, and past
performance is not indicative of future results. An
investment in the Fund is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other
government agency. Although the Fund seeks to preserve
the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Fund.
*Some investors may be subject to the federal alternative
minimum tax (AMT).
**iMoneyNet, Inc. reports a seven-day current yield, NAV,
and WAM on Mondays. This is the data of all funds in the
iMoneyNet, Inc. Stock Broker & General Purpose (SB & GP)
Average category as of June 26, 2000, the closest date to
the end of our reporting period.
Weighted Average Maturity Compared to the Tax-Free Money Fund Average
(GRAPH)
1
<PAGE>
(LOGO) August 14, 2000
Dear Shareholder,
Our six-month review period that began January 1, 2000,
was a decidedly positive time for investors in the
municipal money markets. Good investment opportunities
arose as tax-exempt money market yields generally moved
higher, despite brief periods when yields fell as demand
for the securities exceeded the supply.
Increases in short-term interest rates by the Federal
Reserve (the Fed) in February, March, and May were the
driving forces behind the rise in municipal money market
yields. The Fed repeatedly hiked rates in an effort to
rein in U.S. economic growth and quell mounting
inflationary pressures before they became rooted in the
economy.
Amid this trend toward higher rates, the Prudential Tax-
Free Money Fund's seven-day current yield on June 30,
2000, was 3.79%, the equivalent of a 5.89% taxable yield
for investors in the top 39.6% tax bracket. The Fund
maintained a $1 net asset value per share.
The following report takes a closer look at developments
in the municipal money market during our fiscal half-
year, and explains how the Fund was positioned.
Thank you for your continued confidence in Prudential
mutual funds.
Sincerely,
John R. Strangfeld, President
Prudential Tax-Free Money Fund, Inc.
2
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Semiannual Report June 30, 2000
Investment Adviser's Report
The beginning of the calendar year usually proves to be a
challenging time in the municipal money market.
Investors, anxious to reinvest cash received from coupon
payments and maturing bonds, pour money into the market,
driving prices of tax-exempt money market securities
higher (and their yields lower). This seasonal decline in
yields is aptly named the "January effect."
As our six-month review period began in 2000, we were
able to weather the "January effect" because we had
positioned the Fund advantageously in December 1999 by
buying prerefunded bonds maturing in one year. These
purchases kept the Fund's weighted average maturity (WAM)
longer than that of its competitive average. (WAM is a
measurement tool that determines a portfolio's
sensitivity to changes in the level of interest rates. It
takes into account the maturity level of each security
held by a portfolio.) Having a longer WAM meant we did
not have to invest in longer-term securities when yields
sank to unattractive levels in January.
Preparing for income tax season
As January progressed, we allowed the Fund's WAM to
shorten by investing primarily in securities whose coupon
rates reset either every day or every seven days. This
strategy enabled the Fund to have sufficient liquidity to
buy any higher-yielding securities that might be
available after the Federal Reserve hiked short-term
rates at its next meeting in February 2000.
The Fed had already tightened monetary policy three times
the previous year to slow U.S. economic growth to a more
sustainable pace. However, it was expected to raise
short-term rates again because the economy continued to
expand rapidly in early 2000.
Sure enough, February brought another rate hike that
pushed municipal money market yields higher. We took
advantage of this rise in yields by purchasing
two- and three-month tax-exempt commercial paper, as well
as securities that could be sold back to the issuer at their
face value on a quarterly basis.
3
<PAGE>
We chose securities that would mature in late April and
early May because they would provide liquidity to satisfy
redemptions that occur as shareholders withdraw money
from the Fund to pay their income taxes.
Fed's bold inflation-fighting tactics
The Fed's next move came in late March. Soon after,
municipal money market yields climbed sharply as it
became clear the central bank would raise short-term
rates by half of a percentage point-its largest increase
in more than five years-at its mid-May meeting. During
that time, we purchased securities that could be sold
back to the issuer at their face value on a semiannual
basis.
In a rising-interest-rate environment, municipal money
market yields tend to lag the rise in taxable money
market yields. Therefore under normal
circumstances, we still would have been able to buy
higher-yielding money market securities to extend the
Fund's WAM, especially after the Fed aggressively raised
rates in mid-May. But the market behaved in an unusual
fashion as tax-exempt money market yields declined
sharply in late May and June. In hindsight, we should
have purchased more one-year securities in mid-May, as
money market yields seem to have peaked at that time.
Looking Ahead
From June 1999 through May 2000, the Fed raised short-
term rates six times-the first five were quarter-point
rate hikes and the sixth was half of a percentage point.
We believe the Fed's unusually large half-point rate hike
in mid-May could be a signal that it has nearly completed
its current round of tightening. In fact, the federal
funds futures market, where investors hedge against
changes in the overnight bank lending rate, indicates
that many believe the likelihood of further rate
increases this year has diminished. We expect U.S.
economic activity to continue to moderate in coming
months, decreasing the amount of additional Fed rate
hikes, if any, that might be necessary.
Prudential Tax-Free Money Fund Management Team
4
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Semiannual Report June 30, 2000
Financial
Statements
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
Arkansas 2.3%
Arkansas Hosp. Equip. Fin. Auth.,
AHA Pooled Fin. Prog., F.R.W.D.
Ser. 98A A1+* 4.85% 7/05/00 $ 3,900 $ 3,900,000
----------------------------------------------------------------------------------------
Colorado 0.7%
Denver Company City County Single
Family Home Metro Mayors Caucus
Ser. C SP1+* 4.45 5/15/01 1,265 1,265,000
----------------------------------------------------------------------------------------
District of Columbia 0.1%
Dist. of Columbia, G.O. Var.
Rate, F.R.D.D., Ser. 92A-2 VMIG1 4.65 7/03/00 100 100,000
----------------------------------------------------------------------------------------
Florida 10.3%
Orange County Florida Hlth.
Facil. Auth. Florida Hosp. Assn.
Hlth. Ser. A NR 5.10 7/06/00 5,000 5,000,000
Orange County Florida Hlth. Fac.
Auth. Rev. Certificates Ser. 171 A1+* 4.99 7/06/00 8,625 8,625,000
Sunshine State Governmental
Financing, T.E.C.P., NR 4.55 7/21/00 4,000 4,000,000
--------------
17,625,000
----------------------------------------------------------------------------------------
Georgia 2.0%
Cobb Cnty. Indl. Dev. Auth.,
Institute of Nuclear Pwr.,
F.R.W.D., Ser. 98 P1 4.80 7/05/00 2,500 2,500,000
Stephens County Georgia Dev.
Auth. Ind. Dev. Rev. Caterpillar
Inc. Proj. NR 5.07 7/06/00 1,000 1,000,000
--------------
3,500,000
----------------------------------------------------------------------------------------
Hawaii 1.2%
Honolulu City & Cnty., G.O., Ser.
1990-D NR 6.90 12/01/00 2,000 2,044,022
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Illinois 12.1%
Chicago Illinois Rev. Adjusted
Homestart Program
Series A VMIG1 4.85% 7/05/00 $ 5,000 $ 5,000,000
Illinois Hlth. Fac. Auth.,
Memorial Med Ctr. Ser. 1989 Aaa 6.50 10/01/00 4,740 4,859,747
Illinois Hlth. Fac. Auth.,
Evanston Hosp. Corp. Prog.,
A.N.N.M.T., Ser. 95 VMIG1 4.25 01/31/01 5,000 5,000,000
Evanston Hosp. Corp. Proj.,
A.N.N.M.T., Ser. 92 VMIG1 3.90 10/31/00 3,000 3,000,000
Illinois Housing Dev. Auth. Rev.
Merlots Ser. V VMIG1 4.94 7/05/00 1,990 1,990,000
Rock Island County Illinois
Metropolitan Airport Ser. C VMIG1 4.85 7/05/00 1,000 1,000,000
--------------
20,849,747
----------------------------------------------------------------------------------------
Indiana 6.3%
Indiana Ed. Fac. Auth., Wesleyan
Univ., F.R.W.D., Ser. 93 NR 4.85 7/06/00 4,700 4,700,000
Indiana St. Dev. Fin. Auth. Rev.,
Edl. Facs., Covenant High Sch.,
F.R.W.D., Ser. 96 NR 4.70 7/06/00 4,900 4,900,000
South Bend Indiana Econ. Dev.,
Rev. Adjusted Dynamic R.E.H.C.
Inc., F.R.W.D., A.M.T., Ser. 99 NR 4.95 7/05/00 1,195 1,195,000
--------------
10,795,000
----------------------------------------------------------------------------------------
Kentucky 3.6%
Carroll County, Solid Wste. Disp.
Facs. Rev., Ser. 94A, F.R.D.D.,
A.M.T. VMIG1 4.85 7/03/00 400 400,000
Kentucky Housing Corp., Senior D,
A.M.T., MIG1 4.40 12/01/00 1,000 1,000,000
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Leitchfield Kentucky Ind.
Building Rev. Styline Inds. Inc.
Project, F.R.D.D., A.M.T., Ser.
99 A1+* 5.07% 7/07/00 $ 4,785 $ 4,785,000
--------------
6,185,000
----------------------------------------------------------------------------------------
Louisiana 0.8%
Calcasieu Parish Louisiana Public
Trust Notes Ser. A NR 4.50 12/01/00 570 570,000
W. Baton Rouge Parish Dist.
Pound3, Dow Chemical Co. Proj.,
Ser. 94A, F.R.D.D., A.M.T. P1 4.75 7/03/00 800 800,000
--------------
1,370,000
----------------------------------------------------------------------------------------
Maryland 1.3%
Anne Arundel County Baltimore Gas
& Electric, A.N.N.M.T., Ser. 84 VMIG1 4.50 7/01/00 2,210 2,210,000
----------------------------------------------------------------------------------------
Michigan 5.0%
Detroit Michigan Sewage Disposal
Rev. Merlots Ser. I VMIG1 4.89 7/05/00 5,000 5,000,000
Michigan Muni. Bond Auth. Rev.,
Notes, Ser. 99 B1 SP1+* 4.25 8/25/00 3,500 3,503,296
--------------
8,503,296
----------------------------------------------------------------------------------------
Minnesota 4.9%
Bloomington Comm. Dev. Rev., 94th
Str. Proj., F.R.W.D., Ser. 85
(e) A1+* 4.85 7/07/00 4,945 4,945,000
St Paul Hsg. & Redev. Auth.,
Heating Rev., F.R.W.D., Ser. 99D A1+* 4.85 7/07/00 3,500 3,500,000
--------------
8,445,000
----------------------------------------------------------------------------------------
Mississippi 2.7%
Mississippi Hsg. Fin. Corp. Sngl.
Fam. Mtg., F.R.W.D., Ser. 88 A1+* 4.85 7/06/00 4,625 4,625,000
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Missouri 0.6%
Branson, Tax Increment Street
Imprv. Ser. 96 NR 4.65% 12/01/00 $ 1,000 $ 1,002,638
----------------------------------------------------------------------------------------
Ohio 4.5%
East Lake Dev. Rev., Astro Model
Corp., F.R.W.D., Ser. 96 NR 4.95 7/06/00 2,800 2,800,000
Ohio Hsg. Fin. Agcy., Mtge. Rev.
Merlots Series Aa VMIG1 4.94 7/05/00 1,000 1,000,000
Ohio Hsg. Fin. Agcy. Rev.,
Residential Mtge., A.M.T., Ser.
117 A1+* 3.90 7/20/00 1,000 1,000,000
Multifamily Hsg. Ref., F.R.W.D.
Ser. B A1+* 4.85 7/07/00 3,000 3,000,000
--------------
7,800,000
----------------------------------------------------------------------------------------
Oklahoma 1.2%
Tulsa Pkg. Auth., Williams Ctr.
Proj., S.E.M.M.T., Ser. 87 A VMIG1 4.75 11/15/00 2,000 2,000,000
----------------------------------------------------------------------------------------
Oregon 0.6%
Oregon Veterans Welfare Ser. 79B MIG1 4.30 4/01/01 1,000 1,000,000
----------------------------------------------------------------------------------------
Pennsylvania 1.9%
Montgomery Cnty., Higher Ed. &
Hlth. Auth. Rev., F.R.W.D., Ser.
96A A-1* 4.85 7/05/00 3,340 3,340,000
----------------------------------------------------------------------------------------
South Carolina 6.8%
Beaufort County South Carolina
School Dist. Ser. B NR 6.50 3/01/01 1,050 1,064,874
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
South Carolina Jobs Eco. Dev.
Auth. Hlth. Fac. Rev. VMIG1 4.85% 7/05/00 $ 3,000 $ 3,000,000
South Carolina St Public Service
Auth. Rev. Merlots Ser. L VMIG1 4.89 7/05/00 5,090 5,090,000
Spartanburg County School MIG1 4.75 2/15/01 2,500 2,508,233
--------------
11,663,107
----------------------------------------------------------------------------------------
South Dakota 5.5%
Grant County South Dakota
Pollution Control Rev. Ref.
Otter Tail Power Company Proj. VMIG1 5.00 7/07/00 2,400 2,400,000
South Dakota Hsg. Dev. Auth. Home
Ownership Mrtg., Ser. J MIG1 3.75 9/28/00 2,025 2,025,000
South Dakota Str. Health Edl.
Sioux Vly. Hosps. Hlth. VMIG1 4.85 7/07/00 5,000 5,000,000
--------------
9,425,000
----------------------------------------------------------------------------------------
Tennessee 1.0%
Morgan Keegan Municipal Prods.
Inc. Trust Rcpts. Ser. D NR 5.07 7/06/00 1,720 1,720,000
----------------------------------------------------------------------------------------
Texas 12.8%
Austin Texas Airport Systems Rev.
Merlots Series J VMIG1 4.94 7/05/00 3,000 3,000,000
Brazos River Harbor Nav. Dist.,
Dow Chemical Co., Ser. 92A
F.R.D.D., A.M.T. P1 4.75 7/03/00 200 200,000
Brazos River Texas Harbor
Navigation Dist. Dow Chemicals
Co. Proj. A1+* 4.75 7/03/00 3,000 3,000,000
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description (a) Rating Rate Date (000) (Note 1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dallas Fort Worth Texas Regional
Airport Rev. Ref., NR 4.70% 11/01/00 $ 500 $ 500,557
North Central Texas Hlth. Fac.
Dev. VMIG1 4.70 8/11/00 5,000 5,000,000
Port Corpus Christi Ind. Dev.
Corp., Swg. & Solid Wste. Disp.
Rev. VMIG1 4.75 7/03/00 700 700,000
Texas Municipal Power Agency Rev. NR 5.50 9/01/00 1,000 1,001,134
Texas Street Ser. A MIG1 4.50 8/31/00 8,500 8,498,086
--------------
21,899,777
----------------------------------------------------------------------------------------
Wisconsin 9.9%
Franklin Public School Dis. NR 4.00 8/30/00 5,400 5,402,309
Wausau School Dist. Tax & Rev. NR 4.10 9/22/00 2,000 2,001,574
Whitewater Ind. Dev. Rev., Trek
Bicycle, F.R.W.D., A.M.T., Ser.
95 NR 4.85 7/06/00 3,625 3,625,000
Wisconsin Hsg. & Econ. Dev. Auth.
Ownership Rev., A.N.N.O.T., Ser.
122 VMIG1 3.90 10/05/00 1,275 1,275,000
Wisconsin State Transportation
Rev. P1 4.30 7/27/00 4,708 4,708,000
--------------
17,011,883
----------------------------------------------------------------------------------------
Wyoming 2.9%
Lincoln County Pollution Control
Flex Refunding Pacificorp Cnv. VMIG1 4.90 7/05/00 5,000 5,000,000
--------------
Total Investments 101.0%
(cost $173,279,470(c)) 173,279,470
--------------
Liabilities in excess of other
assets (1.0)% (1,769,414)
--------------
Net Assets 100% $ 171,510,056
--------------
--------------
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
(a) The following abbreviations are used in portfolio descriptions:
A.M.T.--Alternate Minimum Tax
A.N.N.M.T.--Annual Mandatory Tender(b)
A.N.N.O.T.--Annual Optional Tender(b)
F.R.D.D.--Floating Rate (Daily) Demand Note(b)
F.R.W.D.--Floating Rate (Weekly) Demand Note(b)
G.O.--General Obligation
S.E.M.M.T.--Semi-Annual Mandatory Tender(b)
T.E.C.P.--Tax-Exempt Commercial Paper(b)
(b) 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.
(c) The cost basis for federal income tax purposes is substantially the same as
that used for financial statement purposes.
(d) Indicates illiquid security restricted as to resale and does not have a
readily available market; the aggregate cost of such securities is
$5,975,000 which represents approximately 3.5% of net assets.
* Standard & Poor's Rating.
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.
12 See Notes to Financial Statements
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Statement of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
June 30, 2000
---------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at amortized cost which approximates market value $ 173,279,470
Receivable for investments sold 2,210,000
Receivable for Fund shares sold 4,041,856
Interest receivable 1,778,815
Prepaid expenses 5,586
-------------
Total assets 181,315,727
-------------
LIABILITIES
Payable for Investments purchased 7,212,787
Payable for Fund shares reacquired 2,180,975
Accrued expenses 127,836
Bank overdraft 112,297
Dividends payable 90,862
Management fee payable 71,394
Distribution fee payable 9,520
-------------
Total liabilities 9,805,671
-------------
NET ASSETS $ 171,510,056
-------------
-------------
Net assets were comprised of:
Common Stock, $.01 par value $ 1,715,913
Paid-in capital in excess of par 169,794,143
-------------
Net assets, June 30, 2000 $ 171,510,056
-------------
-------------
Net asset value, offering price and redemption price
per share ($171,510,056 / 171,604,335 shares) $1.00
-------------
-------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
June 30, 2000
----------------------------------------------------------------------------------------
<S> <C>
NET INVESTMENT INCOME
Income
Interest $ 3,566,166
-------------
Expenses
Management fee 441,165
Distribution fee 110,291
Transfer agent's fees and expenses 65,000
Custodian's fees and expenses 30,000
Registration fees 17,000
Reports to shareholders 18,000
Audit fee and expenses 13,000
Legal fees and expenses 6,000
Directors' fees and expenses 5,000
Miscellaneous 1,084
-------------
Total expenses 706,540
-------------
Net investment income 2,859,626
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,859,626
-------------
-------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
June 30, 2000 December 31, 1999
----------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 2,859,626 $ 5,097,107
Net realized gain on investment
transactions -- 3
------------- -----------------
Net increase in net assets resulting from
operations 2,859,626 5,097,110
------------- -----------------
Dividends and distributions to shareholders (2,859,626) (5,097,110)
------------- -----------------
Fund share transactions (at $1 per share)
Proceeds from shares sold 276,468,208 604,058,962
Net asset value of shares issued to
shareholders in reinvestment of
dividends and distributions 2,719,495 4,896,169
Cost of shares reacquired (287,564,604) (628,233,381)
------------- -----------------
Net decrease in net assets from Fund share
transactions (8,376,901) (19,278,250)
------------- -----------------
Total decrease (8,376,901) (19,278,250)
NET ASSETS
Beginning of period 179,886,957 199,165,207
------------- -----------------
End of period $ 171,510,056 $ 179,886,957
------------- -----------------
------------- -----------------
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Notes to Financial Statements (Unaudited)
Prudential Tax-Free Money Fund, Inc. (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 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 Net 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. Expenses are recorded on the accrual basis which may require the use
of certain estimates by management.
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 investment income to its
shareholders. For this reason, no federal income tax provision is required.
Dividends: The Fund declares dividends daily from net investment income
and net realized gains, if any. Payment of dividends is made monthly.
Custody Fee Credits: The Fund has an arrangement with its custodian
bank, whereby uninvested monies earn credits which reduce the fees charged by
the custodian.
Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PIFM has entered into a Subadvisory Agreement with The Prudential
Investment
16
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
Corporation ('PIC'), a wholly owned subsidiary of Prudential. The Subadvisory
Agreement provides that the subadviser will furnish investment advisory services
in connection with the management of the Fund. In connection therewith, the
Subadviser is obligated to keep certain books and records of the Fund. PIFM
continues to have responsibility for all investment advisory services pursuant
to the Management Agreement and supervises the Subadviser's performance of such
services. The Subadviser is reimbursed by PIFM for the reasonable costs and
expenses incurred by the Subadviser in furnishing those services. Effective
January 1, 2000, PIC is paid by PIFM at an annual rate of .250 of 1% of the
Fund's average daily net assets up to and including $750 million, .191% of 1% of
the next $750 million and .150% of 1% over $1.5 billion of the Fund's average
daily net assets. The fee is computed daily and payable monthly. PIFM pays for
the services of PIC, the cost of 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 PIFM 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 Investment
Management Services LLC ('PIMS'). The Fund compensated PIMS for distributing and
servicing the Fund's shares pursuant to the plan of distribution at an annual
rate of .125 of 1% of the Fund's average daily net assets. The distribution fee
is accrued daily and payable monthly.
PIFM, PIC and PIMS are indirect, wholly owned subsidiaries of The
Prudential Insurance Company of America.
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent and during the year ended June 30, 2000, the
Fund incurred fees of approximately $64,000 for the services of PMFS. As of June
30, 1999, approximately $11,000 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 nonaffiliates.
17
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
June 30, 2000
<S> <C>
---------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 1.00
Net investment income and realized gains .016
Dividends and distributions to shareholders (.016)
-------------
Net asset value, end of period $ 1.00
-------------
-------------
TOTAL RETURN(a): 1.63%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 171,510
Average net assets (000) $ 177,436
Ratios to average net assets:
Expenses, including distribution fee .80%(b)
Expenses, excluding distribution fee .68%(b)
Net investment income 3.24%(b)
</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.
(b) Annualized.
18 See Notes to Financial Statements
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
<CAPTION>
1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
.025 .028 .030 .028 .031
(.025) (.028) (.030) (.028) (.031)
---------------- ---------------- ---------------- ---------------- ----------------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
2.56% 2.83% 3.00% 2.84% 3.15%
$179,887 $199,165 $329,812 $333,808 $387,651
$202,718 $277,839 $339,825 $403,230 $470,370
.81% .80% .78% .80% .80%
.69% .68% .66% .67% .63%
2.51% 2.80% 2.97% 2.83% 3.14%
</TABLE>
See Notes to Financial Statements 19
<PAGE>
Prudential Tax-Free Money Fund, Inc.
Getting the Most from Your Prudential Mutual Fund
When you invest through Prudential Mutual Funds, you
receive financial advice from a Prudential Securities
Financial Advisor or Pruco Securities registered
representative. Your advisor or representative can
provide you with the following services:
There's No Reward Without Risk; but Is This Risk Worth It?
Your financial advisor or registered representative can
help you match the reward you seek with the risk you can
tolerate. Risk can be difficult to gauge-sometimes even
the simplest investments bear surprising risks. The
educated investor knows that markets seldom move in just
one direction. There are times when a market sector or
asset class will lose value or provide little in the way
of total return. Managing your own expectations is easier
with help from someone who understands the markets and
who knows you!
Keeping Up With the Joneses
A financial advisor or registered representative can help
you wade through the numerous available mutual funds to
find the ones that fit your individual investment profile
and risk tolerance. While the newspapers and popular
magazines are full of advice about investing, they are
aimed at generic groups of people or representative
individuals-not at you personally. Your financial advisor
or registered representative will review your investment
objectives with you. This means you can make financial
decisions based on the assets and liabilities in your
current portfolio and your risk tolerance-not just based
on the current investment fad.
Buy Low, Sell High
Buying at the top of a market cycle and selling at the
bottom are among the most common investor mistakes. But
sometimes it's difficult to hold on to an investment when
it's losing value every month. Your financial advisor or
registered representative can answer questions when
you're confused or worried about your investment, and
should remind you that you're investing for the long
haul.
<PAGE>
www.prudential.com (800) 225-1852
For More Information
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Directors
Delayne Dedrick Gold
Robert F. Gunia
Robert E. LaBlanc
David R. Odenath, Jr.
Robin B. Smith
Stephen Stoneburn
John R. Strangfeld
Nancy H. Teeters
Clay T. Whitehead
Officers
John R. Strangfeld, President
Robert F. Gunia, Vice President
David R. Odenath, Jr., Vice President
Grace C. Torres, Treasurer
Robert C. Rosselot, Secretary
William V. Healey, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777
Distributor
Prudential Investment Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
194 Wood Avenue South
Iselin, NJ 08830
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Cusip Number 74436P103
The views expressed in this report and information about
the Fund's portfolio holdings are for the period covered
by this report and are subject to change thereafter.
The accompanying financial statements as of June 30, 2000, were
not audited and, accordingly, no opinion is expressed on them.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
MF103E2 74436P103
(LOGO) Printed on Recycled Paper
