PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Money
Market Management, Inc., which covers the six-month period from January 1,
1996 through June 30, 1996. The report begins with commentary by the fund's
portfolio manager and follows with a complete list of the fund's holdings
and its financial statements.
This high-quality money market fund gives you a way to help keep your cash
working every day while keeping your principal stable.* And, you have
convenient, daily access to your money.
During the six-month period, the fund paid shareholders a total of $2.4
million, or $0.02 per share in dividends. On June 30, 1996, net assets which
totaled $97.5 million were invested in a portfolio of high-
quality money market securities that included commercial paper (24.4%),
variable notes (30.8%), and repurchase agreements (29.3%).
Thank you for choosing this money market fund as a convenient, liquid way to
put your cash to work on a daily basis. We will continue to keep you
up-to-date on your investment, and welcome your comments and suggestions.
Sincerely,
[Graphic]
J. Christopher Donahue
President
August 15, 1996
* Although money market funds seek to maintain a share value of $1.00, there
is no guarantee that they will do so. An investment in the fund is neither
insured nor guaranteed by the U.S. government.
INVESTMENT REVIEW
Money Market Management, Inc. (the "Fund") invests 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, variable rate
instruments and repurchase agreements.
Since the beginning of 1996, the pace of the economic expansion seems to
have quickened. Gross Domestic Product ("GDP") growth for the first quarter
of 1996 rebounded to 2.0%, with growth in overall employment leading the
expansion. This faster growth was achieved despite several dampening factors
including severe winter weather during much of January, a United Auto
Workers' strike at General Motors that shut down the automotive giant's
operations for 2-1U2 weeks, and a federal government closure for a week
related to budget negotiations. The second quarter pace accelerated with GDP
expanding at a 4.2% rate. Throughout the time period, inflation held steady.
Overall wage gains remain moderate, and material costs are subdued.
Budget negotiations also played a role in the market during the time period.
As negotiations failed and temporary "fixes" were devised for meeting the
Treasury's scheduled debt obligations, fixed income investors became nervous
and yields began to rise.
Thirty-day commercial paper started the period at 5.53% on January 1, 1996,
reflecting a 5.50% federal funds target established by the Federal Reserve
Board (the "Fed") on December 19, 1995. Rates fell throughout the month of
January until the Fed acted again on January 31, 1996, lowering the federal
funds target to 5.25%. Commercial paper rates have been hovering in the
5.25% area since that time.
The money market yield curve steepened dramatically throughout the time
period. One month commercial paper rates declined 14 basis points, while
6-month rates rose by 24 basis points, reflecting the concern in the market
about the more rapid economic growth.
The target average maturity range for Money Market Management, Inc. began
the period at 40-50 days, was subsequently lengthened to a 45-55 day range
in February and then shortened back to the 40-50 day range in May,
reflecting the changing economic and monetary sentiment. In structuring the
Fund, there is continued emphasis placed on positioning 30-35% of the Fund's
core assets in variable rate demand notes and accomplishing a modest barbell
structure.
During the six months ended June 30, 1996, the net assets of Money Market
Management, Inc. decreased from $101.4 to $97.5 million while the 7-day net
yield decreased from 4.79% to 4.40%.* The effective average maturity of the
Fund on June 30, 1996, was 44 days.
* Performance quoted represents past performance and is not indicative of
future results. Yield will vary.
MONEY MARKET MANAGEMENT, INC.
PORTFOLIO OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
BANK NOTES -- 4.1%
BANKING -- 4.1%
$ 1,000,000 Harris Trust & Savings Bank, Chicago, 5.500%, 3/26/1997 $ 999,577
3,000,000 Mellon Bank NA, Pittsburgh, 5.780%, 9/26/1996 2,999,601
TOTAL BANK NOTES 3,999,178
CERTIFICATES OF DEPOSIT -- 3.1%
BANKING -- 3.1%
2,000,000 Dresdner Bank Ag, Frankfurt, 5.026%, 2/26/1997 1,999,484
1,000,000 Westpac Banking, Corp., Sydney, 5.750%, 10/23/1996 1,000,000
TOTAL CERTIFICATES OF DEPOSIT 2,999,484
(A)COMMERCIAL PAPER -- 24.4%
BANKING -- 6.1%
1,000,000 Canadian Imperial Holdings, Inc., (Guaranteed by Canadian Imperial
Bank of Commerce, Toronto), 5.373%, 8/30/1996 991,167
1,000,000 Royal Bank of Canada, Montreal, 5.259%, 7/8/1996 999,002
4,000,000 SALTS II Cayman Islands Corp., (Bankers Trust International, PLC),
5.763%, 9/20/1996 4,000,000
Total 5,990,169
ENTERTAINMENT -- 1.0%
1,000,000 Disney (Walt) Holding Co., 5.336%, 9/6/1996 990,322
FINANCE - COMMERCIAL -- 6.1%
1,000,000 Beta Finance, Inc., 5.465%, 11/25/1996 978,277
1,000,000 CIESCO, Inc., 4.992%, 8/7/1996 994,995
4,000,000 General Electric Capital Corp., 5.128% - 5.475%,
7/29/1996 - 11/25/1996 3,949,316
Total 5,922,588
</TABLE>
MONEY MARKET MANAGEMENT, INC.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER -- CONTINUED
FINANCE - RETAIL -- 11.2%
$ 5,000,000 American Express Credit Corp., 5.022% - 5.280%,
7/22/1996 - 10/11/1996 $ 4,970,946
1,500,000 Associates Corp. of North America, 5.377%, 8/19/1996 1,489,179
3,000,000 McKenna Triangle National Corp., 5.365% - 5.374%,
7/19/1996 - 7/22/1996 2,991,396
1,500,000 New Center Asset Trust, A1+/P1 Series, 5.351% - 5.422%,
7/22/1996 - 10/18/1996 1,482,473
Total 10,933,994
TOTAL COMMERCIAL PAPER 23,837,073
SHORT-TERM NOTES -- 3.9%
FINANCE - AUTOMOTIVE -- 1.0%
1,000,000 Ford Motor Credit Corp., 8.000%, 10/1/1996 1,005,287
FINANCE - EQUIPMENT -- 0.3%
304,178 Navistar Financial 1995-A Owner Trust, 5.750%, 11/15/1996 304,176
FOOD & BEVERAGE -- 2.1%
2,000,000 PepsiCo, Inc., 5.830%, 8/27/1996 2,000,112
INSURANCE -- 0.5%
513,175 Olympic Automobile Receivables Trust 1996-A, (Guaranteed by
Financial Security Assurance, Inc.), 5.250%, 3/15/1997 513,175
TOTAL CORPORATE NOTES 3,822,750
(B)NOTES - VARIABLE -- 30.8%
AUTOMOBILE -- 1.0%
1,000,000 Alabama State IDA, (GMC Projects), Tax Revenue Bonds (Series 1994),
(General Motors Corp. LOC), 5.830%, 7/4/1996 1,000,000
BANKING -- 17.0%
1,815,000 Canton Township Equity Partners L.P., (Huntington National Bank,
Columbus, OH LOC), 5.580%, 7/4/1996 1,815,000
4,458,000 Congregate Care Corp., (Union Bank of California LOC), 5.738%,
7/3/1996 4,458,000
</TABLE>
MONEY MARKET MANAGEMENT, INC.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(B)NOTES - VARIABLE -- CONTINUED
BANKING -- CONTINUED
$ 5,000,000 Mercy Health Systems, (Morgan Guaranty Trust Co., New York LOC),
5.577%, 7/3/1996 $ 5,000,000
1,245,000 North Center Properties, (Huntington National Bank, Columbus,
OH LOC), 5.580%, 7/4/1996 1,245,000
4,000,000 Poly Foam Intl, Inc., (National City Bank, Cleveland, OH LOC),
5.600%, 7/4/1996 4,000,000
Total 16,518,000
FINANCE - RETAIL -- 8.2%
5,000,000 (c)AFS Insurance Premium Receivables Trust, (Series 1994-A), 6.052%,
7/15/1996 5,000,000
3,000,000 Carco Auto Loan Master Trust 1993-2, (Series 1993-2 Class A1),
5.525%, 7/15/1996 3,000,000
Total 8,000,000
INSURANCE -- 4.6%
4,500,000 General American Life Insurance Co., 5.638%, 7/23/1996 4,500,000
TOTAL NOTES - VARIABLE 30,018,000
SHORT-TERM MUNICIPAL -- 1.0%
MUNICIPAL -- 1.0%
1,000,000 New York City, NY, GO Bonds, Fiscal 1996 (Series A-2 Taxable),
(Societe Generale, New York LOC), 5.550%, 9/6/1996 1,000,000
U.S. TREASURY -- 3.1%
TREASURY SECURITIES -- 3.1%
1,000,000 United States Treasury Notes, 6.875%, 3/31/1997 1,010,050
2,000,000 United States Treasury Notes, 7.500%, 1/31/1997 2,026,633
TOTAL U.S. TREASURY 3,036,683
</TABLE>
MONEY MARKET MANAGEMENT, INC.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(D)REPURCHASE AGREEMENTS -- 29.3%
$ 4,500,000 Chase Securities, Inc., 5.450%, dated 6/28/1996, due 7/1/1996 $ 4,500,000
4,500,000 PaineWebber Group, Inc., 5.500%, dated 6/28/1996, due 7/1/1996 4,500,000
10,000,000 Swiss Bank Capital Markets, 5.480%, dated 6/28/1996, due 7/1/1996 10,000,000
9,600,000 UBS Securities, Inc., 5.450%, dated 6/28/1996, due 7/1/1996 9,600,000
TOTAL REPURCHASE AGREEMENTS 28,600,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $ 97,313,168
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for
discount issues or the coupon for interest bearing issues.
(b) Current rate and next reset date shown.
(c) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At the end of the period these securities
amounted to $5,000,000 which represents 5.1% of net assets.
(d) 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.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($97,530,136) at June 30, 1996.
The following acronyms are used throughout this portfolio:
GO -- General Obligation
IDA -- Industrial Development Authority
LOC -- Letter of Credit
LP -- Limited Partnership
PLC -- Public Limited Company
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET MANAGEMENT, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 28,600,000
Investments in securities 68,713,168
Total investments in securities, at amortized cost and value $ 97,313,168
Cash 60,641
Income receivable 573,975
Total assets 97,947,784
LIABILITIES:
Income distribution payable 352,629
Accrued expenses 65,019
Total liabilities 417,648
Net Assets for 97,530,136 shares outstanding $ 97,530,136
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$97,530,136 O 97,530,136 shares 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, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 2,931,181
EXPENSES:
Investment advisory fee $ 265,506
Administrative personnel and services fee 62,158
Custodian fees 19,767
Transfer and dividend disbursing agent fees and expenses 72,577
Directors'/Trustees' fees 5,521
Auditing fees 7,097
Legal fees 5,335
Portfolio accounting fees 20,624
Shareholder services fee 132,753
Share registration costs 12,741
Printing and postage 3,764
Insurance premiums 2,427
Taxes 14,680
Miscellaneous 3,397
Total expenses 628,347
Waivers --
Waiver of shareholder services fee (69,032)
Total waivers (69,032)
Net expenses 559,315
Net investment income $ 2,371,866
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET MANAGEMENT, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
(UNAUDITED) DECEMBER 31,
JUNE 30, 1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 2,371,866 $ 5,190,615
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income (2,371,866) (5,190,615)
SHARE TRANSACTIONS --
Proceeds from sale of
shares 74,440,097 115,132,036
Net asset value of shares issued to shareholders in payment of
distributions declared 1,879,803 4,728,001
Cost of shares redeemed (80,179,719) (133,057,940)
Change in net assets resulting from share transactions (3,859,819) (13,197,903)
Change in net assets (3,859,819) (13,197,903)
NET ASSETS:
Beginning of period 101,389,955 114,587,858
End of period $ 97,530,136 $ 101,389,955
</TABLE>
(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>
SIX
MONTHS
ENDED
(UNAUDITED)
JUNE 30, YEAR ENDED DECEMBER 31,
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<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 0.02 0.05 0.03 0.02 0.03 0.05 0.07 0.08 0.07 0.06
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.05) (0.03) (0.02) (0.03) (0.05) (0.07) (0.08) (0.07) (0.06)
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(A) 2.24% 5.13% 3.31% 2.19% 2.86% 5.43% 7.65% 8.73% 7.03% 6.08%
RATIOS TO AVERAGE
NET ASSETS
Expenses 1.05%* 1.08% 1.14% 1.17% 1.11% 0.96% 0.89% 0.89% 0.91% 0.89%
Net investment income 4.47%* 4.99% 3.27% 2.15% 2.85% 5.32% 7.38% 8.39% 6.81% 5.88%
Expense waiver/
reimbursement(b) 0.13%* 0.15% 0.00% 0.07% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $97,530 $101,390 $114,588 $108,309 $127,711 $168,889 $194,836 $204,393 $188,239 178,813
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and
net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 (UNAUDITED)
1. ORGANIZATION
Money Market Management, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's objective is to obtain
current income consistent with stability of principal.
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.
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.
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 under repurchase agreement
transactions. Additionally, procedures have been established by the Fund to
monitor, on a daily basis, the market value of each repurchase agreement's
collateral to ensure that the value of collateral at least equals the
repurchase price to be paid under the repurchase agreement transaction.
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 the guidelines and/or
standards reviewed or established by the Board of Directors (the
"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.
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.
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 income. Accordingly, no
provisions for federal tax are necessary.
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 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.
MONEY MARKET MANAGEMENT, INC.
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 Board of 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, 1996 is
as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
AFS Insurance Premium Trust Series 1994-A 8/16/94 5,000,000
</TABLE>
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER -- Investment transactions are accounted for on the trade date.
3. CAPITAL STOCK
At June 30, 1996, there were 50,000,000,000 shares of $0.001 par value
capital stock authorized. At June 30, 1996, capital paid-in aggregated
97,530,136. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX YEAR
MONTH ENDED
ENDED DECEMBER 31,
JUNE 30, 1996 1995
<S> <C> <C>
Shares sold 74,440,097 115,132,035
Shares issued to shareholders in payment of distributions declared 1,879,803 4,728,002
Shares redeemed (80,179,719) (133,057,941)
Net change resulting from share transactions (3,859,819) (13,197,904)
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE -- Federated Advisors, 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 0.40%
thereafter.
MONEY MARKET MANAGEMENT, INC.
ADMINISTRATIVE FEE -- Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ 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 daily average net assets of the Fund shares for the period.
The fee paid to FSS is used to finance certain services for shareholders and
to maintain shareholder accounts. FSS may voluntarily choose to waive any
portion of its fee. FSS can modify or terminate this voluntary waiver at
any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC") serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC
is based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
GENERAL -- Certain of the Officers and Directors of the Fund are Officers
and Directors or Trustees of the above companies.
DIRECTORS
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
J. Christopher Donahue
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Secretary, and Treasurer
Richard B. Fisher
Vice President
S. Elliott Cohan
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other government agency.
Investment in mutual funds involves investment risk, including possible loss
of principal. Although money market funds seek to maintain a stable net
asset value of $1.00 per share, there is no assurance that they will be able
to do so.
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.
MONEY
MARKET
MANAGEMENT,
INC.
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JUNE 30, 1996
Federated Investors
[graphic]
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
[graphic]
Cusip 609346200
8080103 (8/96)
