- --------------------------------------------------------------------------------
MONEY
- --------------------------------------------------------------------------------
MARKET
- --------------------------------------------------------------------------------
MANAGEMENT, INC.
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JUNE 30, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
609346200
8080103 (8/94)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Money Market
Management, Inc. (the "Fund"), which covers the six-month period ended June 30,
1994. This report begins with an interview with the Fund's portfolio manager and
follows with the Portfolio of Investments and Financial Statements.
During the reporting period, the Fund continued to pursue current income while
bringing you the additional advantages of daily liquidity and stability of
principal*--all through a portfolio of high-quality money market securities.
As of June 30, 1994, slightly less than half of the Fund's portfolio was
invested in high-quality commercial paper (37.3%), with the remainder invested
in variable notes (28.9%), repurchase agreements (23.8%), and short-term notes
(9.2%). On June 30, 1994, net assets stood at $127.1 million. Dividends paid to
shareholders during the period totaled $1.5 million, or $0.01 per share.
As a Money Market Management, Inc. shareholder, you have convenient access to
the entire Fortress Investment Program, and can move all or part of your assets
in the Fund to other funds including those in the Fortress Investment Program.**
We will continue to keep you up to date on your investment, and welcome your
comments and suggestions.
Sincerely,
/s/ J. Christopher Donahue
J. Christopher Donahue
President
August 15, 1994
* While no money market mutual fund can guarantee that a stable net asset value
will be maintained, Money Market Management, Inc. has done so since its
inception in October, 1973.
** These privileges may be modified or discontinued at any time. Exchanges may
be subject to a sales load and possibly a contingent deferred sales charge
with respect to the fund from which the exchange is being made.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
An Interview with Debbie Cunningham
Q
Interest rates have taken a notable upswing. Can you comment on the series
of interest rate increases that took place early in 1994?
A
The Federal Reserve Board ("FRB") moved from its neutral stance of 1993 to
that of a restrictive monetary policy so far in 1994. By raising the
Federal Funds Rate ("Fed Funds") target successively by 25 basis points in
February, March and April, 1994, the FRB indicated that strength in the economy
was becoming inflationary. The FRB capped off this upward rate movement in May,
1994 by raising both the Fed Funds target as well as the discount rate by 50
basis points. Currently, the Fed Funds target stands at 4.25%, up from a low of
3%, while the discount rate is currently at 3.5%, also up from a low of 3%.
Q
In the last semi-annual report, you mentioned that the Fund's portfolio was
structured to benefit from a rising rate environment. How has the Fund's
yield responded to rising rates?
A
The Fund is presently structured with approximately 29% of its portfolio in
floating rate securities. This defensive position has been beneficial.
During the six month period ended June 30, 1994, the Fund's 7-day net yield
increased from 2.25% to 3.15%*, effectively responding in part because of the
variable rate securities, to the upward movement in rates.
Q
Can you comment on the high level of quality you maintain among the Fund's
securities?
A
The Fund invests exclusively in money market instruments maturing in
thirteen months or less. The average maturity of these securities, computed
on a dollar weighted basis, is restricted to 90 days or less. Portfolio
securities must be rated in one of the two highest short-term rating categories
by one or more of the nationally recognized statistical rating organizations or
be of comparable quality to securities having such ratings. Typical security
types include, but are not limited to: commercial paper, certificates of
deposit, time deposits, eurodollar certificates of deposit, variable rate
instruments and repurchase agreements. The Fund is very conservative with regard
to both credit diligence as well as structural diligence. This has been proven
by the Fund's clean track record during a time when the money market industry
experienced problems resulting from the inappropriate use of derivative
securities such as inverse floating rate notes, range floaters, dual indexed
floaters and cost of funds index floaters.
Q
What is your outlook for further rate increases, and how have you
structured the portfolio to respond?
A
In our opinion, the outlook for the direction of money market rates remains
optimistic. Reflecting this outlook for modestly rising rates, the Fund is
currently targeting an average maturity of 30-40 days. Emphasis on a
barbelled portfolio utilizing floating rate securities continues.
* Past performance may not be indicative of future performance.
MONEY MARKET MANAGEMENT, INC.
PORTFOLIO OF INVESTMENTS
JUNE 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- ------------
<C> <S> <C>
*COMMERCIAL PAPER--37.3%
- -----------------------------------------------------------------------------------
AUTOMOTIVE--0.7%
-----------------------------------------------------------------
$ 1,000,000 Chrysler Financial Corp., 4.09%, 7/11/94 $ 998,875
----------------------------------------------------------------- ------------
BANKING--11.8%
-----------------------------------------------------------------
1,000,000 ABN AMRO Bank, NV, 4.55%, 9/21/94 989,750
-----------------------------------------------------------------
2,000,000 Bayerische Landesbank Girozentrale, 3.56%, 12/9/94 2,000,318
-----------------------------------------------------------------
3,000,000 Bayerische Vereinsbank AG, 3.25%, 7/18/94 2,995,395
-----------------------------------------------------------------
3,000,000 Canadian Imperial Holdings, Inc., 4.53%, 8/25/94 2,979,466
-----------------------------------------------------------------
3,000,000 Commerzbank U.S. Finance, Inc., 3.48%, 8/19/94 2,985,790
-----------------------------------------------------------------
2,000,000 Mission Funding (Barclays Bank PLC LOC), 3.93%, 7/14/94 1,997,183
-----------------------------------------------------------------
1,000,000 Queensland Alumina Ltd. (Credit Suisse LOC), 3.93%, 7/8/94 999,242
----------------------------------------------------------------- ------------
Total 14,947,144
----------------------------------------------------------------- ------------
FINANCE--AUTOMOTIVE--3.8%
-----------------------------------------------------------------
2,850,000 Ford Credit Receivables Funding, Inc., 4.46%, 9/8/94 2,825,856
-----------------------------------------------------------------
1,000,000 General Motors Acceptance Corp., 4.09%, 7/7/94 999,325
-----------------------------------------------------------------
1,000,000 New Center Asset Trust (Series A1+/P1), 4.73%, 8/15/94 994,150
----------------------------------------------------------------- ------------
Total 4,819,331
----------------------------------------------------------------- ------------
FINANCE--COMMERCIAL--8.2%
-----------------------------------------------------------------
6,000,000 CIT Group Holdings, Inc., 4.60-4.61%, 9/12/94-10/13/94 5,932,974
-----------------------------------------------------------------
4,500,000 General Electric Capital Corp., 4.02-5.33%, 8/2/94-1/12/95 4,451,219
----------------------------------------------------------------- ------------
Total 10,384,193
----------------------------------------------------------------- ------------
FUNDING CORPORATION--3.9%
-----------------------------------------------------------------
1,000,000 Beta Finance, Inc., 5.20%, 11/14/94 980,847
-----------------------------------------------------------------
4,000,000 CIESCO, LP, 3.98%, 9/20/94 3,964,180
----------------------------------------------------------------- ------------
Total 4,945,027
----------------------------------------------------------------- ------------
</TABLE>
MONEY MARKET MANAGEMENT, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- ------------
<C> <S> <C>
*COMMERCIAL PAPER--CONTINUED
- -----------------------------------------------------------------------------------
INSURANCE--5.8%
-----------------------------------------------------------------
$ 4,500,000 Prospect St. Sr. Loan Port. L.P. (Guaranteed by FSA),
4.57-4.97%, 8/1/94-11/28/94 $ 4,462,962
-----------------------------------------------------------------
3,000,000 Prudential Funding Corp., 4.34-5.01%, 10/11/94-1/20/95 2,939,564
----------------------------------------------------------------- ------------
Total 7,402,526
----------------------------------------------------------------- ------------
PHARMACEUTICALS AND HEALTHCARE--2.3%
-----------------------------------------------------------------
3,000,000 Schering Corp., 4.29%, 10/18/94 2,961,850
----------------------------------------------------------------- ------------
TELECOMMUNICATIONS--0.8%
-----------------------------------------------------------------
1,000,000 Ameritech Corp., 4.81%, 12/12/94 978,589
----------------------------------------------------------------- ------------
TOTAL COMMERCIAL PAPER 47,437,535
----------------------------------------------------------------- ------------
**VARIABLE NOTES--28.9%
- -----------------------------------------------------------------------------------
BANKING--22.0%
-----------------------------------------------------------------
5,000,000 American Express Centurion Bank, 4.25%, 7/27/94 5,000,000
-----------------------------------------------------------------
1,875,000 Canton Township Equity Partners L.P. (Huntington National Bank
LOC), 4.78%, 7/7/94 1,875,000
-----------------------------------------------------------------
5,000,000 Mercy Health Systems, Series 1990A (Morgan Guaranty Trust Co.
LOC), 4.71%, 7/6/94 5,000,000
-----------------------------------------------------------------
1,420,000 North Center Properties (Huntington National Bank LOC), 4.78%,
7/7/94 1,420,000
-----------------------------------------------------------------
5,000,000 PHH/CFC Leasing (Societe Generale LOC), 4.68%, 7/6/94 5,000,000
-----------------------------------------------------------------
5,100,000 Poly Foam International Inc. (National City Bank LOC),
4.55%, 7/7/94 5,100,000
-----------------------------------------------------------------
4,550,000 Ramsey Real Estate Enterprises Ltd. (National City Bank, Kentucky
LOC), 4.55%, 7/7/94 4,550,000
----------------------------------------------------------------- ------------
Total 27,945,000
----------------------------------------------------------------- ------------
ELECTRICAL EQUIPMENT--0.6%
-----------------------------------------------------------------
811,075 GS Funding Corp. (Guaranteed by General Electric Co.),
4.59%, 7/5/94 811,075
----------------------------------------------------------------- ------------
</TABLE>
MONEY MARKET MANAGEMENT, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- ------------
<C> <S> <C>
**VARIABLE NOTES--CONTINUED
- -----------------------------------------------------------------------------------
FINANCE--AUTOMOTIVE--2.4%
-----------------------------------------------------------------
$ 3,000,000 Carco Auto Loan Master Trust Certificates, Series 1993-2,
Class A-1, 4.41%, 7/15/94 $ 3,000,000
----------------------------------------------------------------- ------------
INSURANCE--3.9%
-----------------------------------------------------------------
5,000,000 Travelers Corp., 4.55%, 7/28/94 5,000,000
----------------------------------------------------------------- ------------
TOTAL VARIABLE NOTES 36,756,075
----------------------------------------------------------------- ------------
SHORT-TERM NOTES--9.2%
- -----------------------------------------------------------------------------------
BANKING--3.5%
-----------------------------------------------------------------
2,500,000 ABC II (Bankers Trust Co. Put), 4.34%, 8/8/94 (a) 2,500,000
-----------------------------------------------------------------
2,000,000 AP Investment Co. (Bankers Trust Co. Put), 3.85%, 9/7/94 (a) 2,000,000
----------------------------------------------------------------- ------------
Total 4,500,000
----------------------------------------------------------------- ------------
FINANCE-AUTOMOTIVE--3.1%
-----------------------------------------------------------------
4,000,000 GMAC Mortgage Corp. of PA (Guaranteed by GMAC),
4.62%, 7/1/94 4,000,000
----------------------------------------------------------------- ------------
FINANCE-RETAIL--1.8%
-----------------------------------------------------------------
2,130,000 Household Finance Corp., 3.50-4.32%, 8/1/94-8/3/94 2,137,573
----------------------------------------------------------------- ------------
GOVERNMENT AGENCIES--0.8%
-----------------------------------------------------------------
1,000,000 Tennessee Valley Authority Series E, 3.82%, 10/1/94 1,056,164
----------------------------------------------------------------- ------------
TOTAL SHORT-TERM NOTES 11,693,737
----------------------------------------------------------------- ------------
</TABLE>
MONEY MARKET MANAGEMENT, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- ------------
<C> <S> <C>
***REPURCHASE AGREEMENTS--23.8%
- -----------------------------------------------------------------------------------
$12,000,000 Chase Manhattan Bank, N.A., 4.20%, dated 6/30/94, due 7/1/94 $ 12,000,000
-----------------------------------------------------------------
4,000,000 PaineWebber, Inc., 4.30%, dated 6/30/94, due 7/1/94 4,000,000
-----------------------------------------------------------------
2,250,000 Prudential-Bache Securities, Inc., 4.25%, dated 6/30/94, due
7/1/94 2,250,000
-----------------------------------------------------------------
12,000,000 S.G. Warburg & Co., Inc., 4.25%, dated 6/30/94, due 7/1/94 12,000,000
----------------------------------------------------------------- ------------
TOTAL REPURCHASE AGREEMENTS (NOTE 2B) 30,250,000
----------------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST $126,137,347+
----------------------------------------------------------------- ------------
</TABLE>
+ Also represents cost for federal tax purposes.
(a) Restricted securities--Investment in securities not registered under the
Securities Act of 1933. At the end of the period, the value of these
securities amounted to $4,500,000 or 3.5% of net assets (Note 2F).
* Each issue shows rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
** Current rate and next demand date shown.
*** The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
FSA -- Financial Security Assurance
GMAC -- General Motors Acceptance Corp.
LOC -- Letter of Credit
</TABLE>
Note: The categories of investments are shown as a percentage of net assets
($127,147,322) at
June 30, 1994.
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET MANAGEMENT, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------
Investments in repurchase agreements (Note 2B) $30,250,000
- ------------------------------------------------------------------
Investments in other securities (Note 2A) 95,887,347
- ------------------------------------------------------------------ -----------
Total Investments, at amortized cost and value $126,137,347
- --------------------------------------------------------------------------------
Cash 88,459
- --------------------------------------------------------------------------------
Receivable for capital stock sold 1,273,160
- --------------------------------------------------------------------------------
Interest receivable 350,338
- -------------------------------------------------------------------------------- ------------
Total assets 127,849,304
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for capital stock redeemed 548,492
- --------------------------------------------------------------------------------
Dividends payable 27,794
- --------------------------------------------------------------------------------
Accrued expenses 125,696
- -------------------------------------------------------------------------------- ------------
Total liabilities 701,982
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 127,147,322 shares of capital stock outstanding $127,147,322
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share
($127,147,322 / 127,147,322 shares of capital stock outstanding) $1.00
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET MANAGEMENT, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------
Interest income (Note 2C) $2,238,602
- ---------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------
Investment advisory fee* $294,311
- ----------------------------------------------------------------------
Directors' fees 2,728
- ----------------------------------------------------------------------
Administrative personnel and services* 93,073
- ----------------------------------------------------------------------
Custodian and portfolio accounting fees and expenses 41,123
- ----------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses* 132,901
- ----------------------------------------------------------------------
Capital stock registration costs 33,996
- ----------------------------------------------------------------------
Auditing fees 15,574
- ----------------------------------------------------------------------
Legal fees 6,403
- ----------------------------------------------------------------------
Printing and postage 10,286
- ----------------------------------------------------------------------
Taxes 18,935
- ----------------------------------------------------------------------
Insurance premiums 3,525
- ----------------------------------------------------------------------
Shareholder Services Fee* 37,400
- ----------------------------------------------------------------------
Miscellaneous 4,319
- ---------------------------------------------------------------------- --------
Total expenses 694,574
- --------------------------------------------------------------------------------- ----------
Net investment income 1,544,028
- --------------------------------------------------------------------------------- ----------
</TABLE>
*See Note 4
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET MANAGEMENT, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1994* 1993
------------ -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------------
Net investment income $ 1,544,028 $ 2,438,206
- -------------------------------------------------------------- ------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- --------------------------------------------------------------
Dividends to shareholders from net investment income (1,544,028) (2,438,206)
- -------------------------------------------------------------- ------------ -------------
CAPITAL STOCK TRANSACTIONS (NOTE 3)--
- --------------------------------------------------------------
Proceeds from sale of shares 108,485,051 175,602,925
- --------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 1,392,577 2,287,236
- --------------------------------------------------------------
Cost of shares redeemed (91,039,706) (197,291,489)
- -------------------------------------------------------------- ------------ -------------
Change in net assets from capital stock transactions 18,837,922 (19,401,328)
- -------------------------------------------------------------- ------------ -------------
Change in net assets 18,837,922 (19,401,328)
- --------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------
Beginning of period 108,309,400 127,710,728
- -------------------------------------------------------------- ------------ -------------
End of period $127,147,322 $ 108,309,400
- -------------------------------------------------------------- ------------ -------------
</TABLE>
* Six months ended June 30, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET MANAGEMENT, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------
1994* 1993 1992 1991 1990 1989 1988 1987 1986 1985
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------
INCOME FROM INVESTMENT
OPERATIONS
- ---------------------------
Net investment income 0.01 0.02 0.03 0.05 0.07 0.08 0.07 0.06 0.06 0.07
- --------------------------- ----- ---- ---- ---- ---- ---- ---- ---- ---- ----
LESS DISTRIBUTIONS
- ---------------------------
Dividends to shareholders
from net investment income (0.01) (0.02) (0.03) (0.05) (0.07) (0.08) (0.07) (0.06) (0.06) (0.07)
- --------------------------- ----- ---- ---- ---- ---- ---- ---- ---- ---- ----
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------- ----- ---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL RETURN** 1.29 % 2.19% 2.86% 5.43% 7.65% 8.73% 7.03% 6.08% 6.28% 7.68%
- ---------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------
Expenses 1.18 %(b) 1.17% 1.11% 0.96% 0.89% 0.89% 0.91% 0.89% 0.84% 0.89%
- ---------------------------
Net investment income 2.62 %(b) 2.15% 2.85% 5.32% 7.38% 8.39% 6.81% 5.88% 6.12% 7.41%
- ---------------------------
Expense waiver/
reimbursement (a) 0.00 %(b) 0.07% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
- ---------------------------
SUPPLEMENTAL DATA
- ---------------------------
Net assets, end of period
(000 omitted) $127,147 $108,309 $127,711 $168,889 $194,836 $204,393 $188,239 $178,813 $205,723 $238,454
- ---------------------------
</TABLE>
* Six months ended June 30, 1994 (unaudited).
** Based on net asset value, which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios, shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
The Fund is registered under the Investment Company Act of 1940, as amended (the
"Act"), as a diversified, open-end, no load, management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value its portfolio
securities is in accordance with Rule 2a-7 under the Act.
B. REPURCHASE AGREEMENTS--It is the policy of the Fund to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book Entry System or to
have segregated within the custodian bank's vault, all securities held as collateral in
support of repurchase agreement investments. Additionally, procedures have been
established by the Fund to monitor on a daily basis, the market value of each repurchase
agreement's underlying collateral to ensure the value at least equals the principal
amount of the repurchase agreement, including accrued interest.
The Fund will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to
be creditworthy pursuant to guidelines established by the Board of Directors
("Directors"). Risks may arise from the potential inability of counterparties to honor
the terms of the repurchase agreement. Accordingly, the Fund could receive less than the
repurchase price on the sale of collateral securities.
C. INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS--Interest income and expenses are accrued
daily. Bond premium and discount, if applicable, are amortized as required by the
Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are
recorded on the ex-dividend date.
D. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the Code
applicable to regulated investment companies and to distribute to shareholders each year
substantially all of its taxable income. Accordingly, no provisions for federal tax are
necessary.
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in when-issued or
delayed delivery transactions. The Fund records when-issued securities on the trade date
and maintains security positions such that sufficient liquid assets will be available to
make payment for
</TABLE>
MONEY MARKET MANAGEMENT, INC.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
the securities purchased. Securities purchased on a when-issued or delayed delivery basis
are marked to market daily and begin earning interest on the settlement date.
F. RESTRICTED SECURITIES--Restricted securities are securities that may only be resold upon
registration under Federal securities laws or in transactions exempt from such
registration. Many restricted securities may be resold in the secondary market in
transactions exempt from registration. In some cases, the restricted securities may be
resold without registration upon exercise of a demand feature. Such restricted securities
may be determined to be liquid under criteria established by the Directors. The Fund will
not incur any registration costs upon such resales. Restricted securities are valued at
amortized cost in accordance with Rule 2a-7 under the Investment Company Act of 1940.
Additional information on each restricted security held at June 30, 1994 is as follows:
</TABLE>
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
----------------------------------------------- ----------- -----------
<S> <C> <C>
ABC II (Bankers Trust Co. Put) 8/10/93 2,500,000
AP Investment Co. (Bankers Trust Co. Put) 9/14/93 2,000,000
G. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
(3) CAPITAL STOCK
At June 30, 1994, there were 50,000,000,000 shares of $0.001 par value capital
stock authorized. Capital paid in aggregated $127,147,322. Transactions in
capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1994* 1993
- --------------------------------------------------------------- ----------- ------------
<S> <C> <C>
Shares sold 108,485,051 175,602,925
- ---------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 1,392,577 2,287,236
- ---------------------------------------------------------------
Shares redeemed (91,039,706) (197,291,489)
- --------------------------------------------------------------- ----------- ------------
Net change resulting from capital stock transactions 18,837,922 (19,401,328)
- --------------------------------------------------------------- ----------- ------------
</TABLE>
* Six months ended June 30, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee based on
the average daily net assets of the Fund as follows: 0.50% on the first $500
million, 0.475% on the next $500 million, 0.45% on the next $500 million, 0.425%
on the next $500 million, and 0.4% thereafter. The Adviser may voluntarily
choose to waive a portion of its fee and reimburse certain operating expenses of
the Fund. The Adviser can modify or terminate this voluntary waiver and
reimbursement at any time at its sole discretion.
MONEY MARKET MANAGEMENT, INC.
- --------------------------------------------------------------------------------
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with administrative personnel and services. Prior to March 1, 1994, these
services were provided at approximate cost. Effective March 1, 1994, the FAS fee
is based on the level of average aggregate daily net assets of all funds advised
by subsidiaries of Federated Investors for the period. The administrative fee
received during the period of the Administrative Services Agreement shall be at
least $125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a shareholder services agreement
with Federated Shareholder Services ("FSS") the Fund will pay FSS up to 0.25 of
1% of average net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and the maintenance of shareholder
accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. The
FServ fee is based on the size, type and number of accounts and transactions
made by shareholders.
Certain of the Officers and Directors of the Fund are Officers and Directors or
Trustees of the above companies.
<TABLE>
<S> <C>
DIRECTORS OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland J. Christopher Donahue
J. Christopher Donahue President
James E. Dowd Richard B. Fisher
Lawrence D. Ellis, M.D. Vice President
Edward L. Flaherty, Jr. Edward C. Gonzales
Peter E. Madden Vice President and Treasurer
Gregor F. Meyer John W. McGonigle
Wesley W. Posvar Vice President and Secretary
Marjorie P. Smuts David M. Taylor
Assistant Treasurer
Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not obligations of or insured by any bank nor are they insured
by the federal government or any of its agencies.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus, which contains facts concerning its
objective and policies, management fees, expenses and other information.
