| UNITED STATES |
| SECURITIES AND EXCHANGE COMMISSION |
| Washington, D.C. 20549 |
| CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT |
| INVESTMENT COMPANIES |
| Investment Company Act file number | | 811-2946 |
| Dreyfus Municipal Money Market Fund, Inc. |
| (Exact name of Registrant as specified in charter) |
| c/o The Dreyfus Corporation |
| 200 Park Avenue |
| New York, New York 10166 |
| (Address of principal executive offices) | | (Zip code) |
| Michael A. Rosenberg, Esq. |
| 200 Park Avenue |
| New York, New York 10166 |
| (Name and address of agent for service) |
| Registrant's telephone number, including area code: | | (212) 922-6000 |
| Date of fiscal year end: | | 5/31 | | |
| Date of reporting period: | | 11/30/08 | | |
| Item 1. | | Reports to Stockholders. |
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The views expressed in this report reflect those of the portfolio manager only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views.These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund.
Not FDIC-Insured Not Bank-Guaranteed May Lose Value
| | Contents |
| |
| | THE FUND |
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| 2 | A Letter from the CEO |
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| 3 | Discussion of Fund Performance |
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| 6 | Understanding Your Fund’s Expenses |
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| 6 | Comparing Your Fund’s Expenses With Those of Other Funds |
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| 7 | Statement of Investments |
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| 21 | Statement of Assets and Liabilities |
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| 22 | Statement of Operations |
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| 23 | Statement of Changes in Net Assets |
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| 24 | Financial Highlights |
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| 25 | Notes to Financial Statements |
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| 32 | Information About the Review and Approval of the Fund’s Management Agreement |
| |
| | FOR MORE INFORMATION |
| |
| | Back Cover |
| |
The Fund
| Dreyfus Municipal |
| Money Market Fund, Inc. |
A LETTER FROM THE CEO
Dear Shareholder: |
We present to you this semiannual report for Dreyfus Municipal Money Market Fund, Inc., covering the six-month period from June 1, 2008, through November 30, 2008.
The U.S. and global economies suffered during the reporting period amid a financial crisis that sparked declines in virtually all areas of the financial markets. According to our Chief Economist, four key elements fueled the crisis: a sharp decline in home prices; high leverage and an ambiguous private/public status at mortgage agencies Fannie Mae and Freddie Mac; high leverage among financial institutions, especially investment banks; and regulatory policies and behaviors that exacerbated financial stresses.
The federal government subsequently stepped in with a number of measures, including aTemporary Guarantee Program for Money Market Funds and a $700 billion rescue package intended to promote greater liquidity in the financial markets. However, the U.S. and global financial systems remain fragile, and economic weakness is likely to persist.
In our view, today’s investment environment is rife with near-term challenges and long-term opportunities. Now more than ever, it is important to ensure that your investments are aligned with your current needs, future goals and attitudes toward risk.We urge you to speak regularly with your financial advisor, who can recommend the course of action that is right for you.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance given by the fund’s Portfolio Manager.
Thank you for your continued confidence and support.
| | Jonathan R. Baum
Chief Executive Officer
The Dreyfus Corporation |
DISCUSSION OF FUND PERFORMANCE
For the period of June 1, 2008, through November 30, 2008, as provided by Colleen Meehan, Senior Portfolio Manager
Fund and Market Performance Overview
For the six-month period ended November 30, 2008, Dreyfus Municipal Money Market Fund produced an annualized yield of 1.95% .Taking into account the effects of compounding, the fund also produced an annualized effective yield of 1.96% .1
Yields of tax-exempt money market instruments declined during the reporting period as the Federal Reserve Board (the “Fed”) reduced short-term interest rates as part of its aggressive attempts to address a severe economic slowdown and global financial crisis.
The Fund’s Investment Approach
The fund seeks as high a level of current income exempt from federal income tax as is consistent with the preservation of capital and the maintenance of liquidity.
In pursuing this objective, we employ two primary strategies. First, we normally attempt to add value by investing substantially all of the fund’s net assets in high-quality short-term municipal obligations throughout the United States and its territories that provide income exempt from federal personal income tax. Second, we actively manage the fund’s average maturity based on our anticipation of supply-and-demand changes in the short-term municipal marketplace and interest-rate cycles while anticipating liquidity needs.
For example, if we expect an increase in short-term supply, we may decrease the average maturity of the fund, which could enable us to take advantage of opportunities when short-term supply increases. Generally, yields tend to rise when there is an increase in new-issue supply competing for investor interest. New securities are generally issued with maturities in the one-year range, which in turn may lengthen the fund’s average maturity if purchased. If we anticipate lim-
The Fund 3
| DISCUSSION OF FUND PERFORMANCE (continued) |
ited new-issue supply, we may then look to extend the fund’s average maturity to maintain then-current yields for as long as we believe practical. At other times, we try to maintain an average maturity that reflects our view of short-term interest-rate trends and future supply-and-demand considerations.
Interest Rates Fell Due to Credit and Economic Woes
Economic conditions already had deteriorated by the start of the reporting period as a result of weakness in housing markets and declining consumer confidence. In response, the Fed had reduced the overnight federal funds rate from 2% to 1% in two moves during the reporting period.
Meanwhile, a credit crisis that originated in 2007 in the U.S. sub-prime mortgage market intensified as foreclosure rates surged and institutional investors de-levered their portfolios, selling their more liquid and creditworthy holdings to meet margin calls resulting from steep losses in mortgage- and asset-backed securities. Despite efforts by regulators to contain the credit crunch, it mushroomed into a global financial crisis over the summer of 2008, leading to the failures and government bailouts of several major financial institutions.
The money markets were not immune to the financial crisis, as credit concerns caused dislocations among short-term money market instruments and a surge in redemptions in September and October. In an effort to shore up investor confidence and help restore stability to the financial system, the U.S. Department of the Treasury initiated several remedial measures, including the Temporary Guarantee Program specifically for money market funds.
With the Fed and U.S. Treasury supporting banks and short-term lending, the stress in the system appeared to have been mitigated by the reporting period’s end. Although yields of variable rate demand notes (“VRDNs”) spiked in September, the VRDN market subsequently stabilized, with liquidity and yields returning to normalized levels and tax-exempt money market funds seeing positive cash flows.
In this environment, the fiscal conditions of states and municipalities were undermined by reduced tax revenues, elevated financing costs
4
and reduced access to credit. As of the reporting period’s end, many states were searching for ways to bridge projected revenue shortfalls.
Independent Research Helped Avoid Credit Problems
As always, we have invested exclusively in tax-exempt money market instruments that have been independently approved by our credit analysts. In light of the issues confronting the market, we have worked diligently to increase credit surveillance of the fund’s holdings.We generally have avoided instruments that may be affected by concerns surrounding certain insurers, banks and broker-dealers. Instead, we have focused on direct, high-quality municipal obligations. We also have attempted to diversify the fund as broadly as we deem practical.
Early in the reporting period, we maintained a relatively long weighted average maturity in an attempt to capture higher yields while interest rates fell. However, we later reduced the fund’s weighted average maturity to weather the dislocations caused by the financial crisis. This enabled us to take greater advantage of the outsized yields offered by VRDNs at the time while increasing liquidity in the portfolio.
Maintaining a Conservative Investment Posture
As the financial crisis persisted,the Fed reduced the federal funds rate further in December to a range of 0% – 0.25% in its latest effort to support the credit markets and economic activity. We intend to maintain the fund’s conservative credit selection strategy and weighted average maturity until we are confident that the crisis and volatility that typically affects the tax-exempt money markets at year-end have passed.
December 16, 2008
An investment in the fund is not insured or guaranteed by the FDIC 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.
| 1 | Annualized effective yield is based upon dividends declared daily and reinvested monthly. Past performance is no guarantee of future results.Yields fluctuate. Income may be subject to state and local taxes, and some income may be subject to the federal alternative minimum tax (AMT) for certain investors. |
| |
The Fund 5
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds.You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Municipal Money Market Fund, Inc. from June 1, 2008 to November 30, 2008. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment assuming actual returns for the six months ended November 30, 2008
| Expenses paid per $1,000† | | $ 2.92 |
| Ending value (after expenses) | | $1,009.70 |
COMPARING YOUR FUND’S EXPENSES WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds.All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment assuming a hypothetical 5% annualized return for the six months ended November 30, 2008
| Expenses paid per $1,000† | | $ 2.94 |
| Ending value (after expenses) | | $1,022.16 |
- Expenses are equal to the fund’s annualized expense ratio of .58%, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).
6
| STATEMENT OF INVESTMENTS | | | | | | | | |
| November 30, 2008 (Unaudited) | | | | | | | | | | |
| |
| |
| |
| |
| |
|
| |
| |
| |
| |
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments—98.8% | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| Alabama—.6% | | | | | | | | | | |
| Jefferson County, | | | | | | | | | | |
| Sewer Revenue Capital | | | | | | | | | | |
| Improvement Warrants | | 5.38 | | 2/1/09 | | 6,000,000 | | a | | 6,095,494 |
| Arkansas—.6% | | | | | | | | | | |
| Pulaski County Public Facilities | | | | | | | | | | |
| Board, MFHR (Chapelridge | | | | | | | | | | |
| Project) (LOC; Regions Bank) | | 1.63 | | 12/7/08 | | 5,650,000 | | b | | 5,650,000 |
| Colorado—7.5% | | | | | | | | | | |
| CollegeInvest, | | | | | | | | | | |
| Education Loan Revenue (LOC; | | | | | | | | | | |
| Lloyds TSB Bank PLC) | | 1.10 | | 12/7/08 | | 25,000,000 | | b | | 25,000,000 |
| Colorado Educational and Cultural | | | | | | | | | | |
| Facilities Authority, Revenue | | | | | | | | | | |
| (EOP Charlotte JW, LLC | | | | | | | | | | |
| Project) (LOC; KBC Bank) | | 1.10 | | 12/7/08 | | 10,000,000 | | b | | 10,000,000 |
| Colorado Educational and Cultural | | | | | | | | | | |
| Facilities Authority, Student | | | | | | | | | | |
| Housing Revenue (Fuller | | | | | | | | | | |
| Theological Seminary Project) | | | | | | | | | | |
| (LOC; Key Bank) | | 1.80 | | 12/7/08 | | 9,700,000 | | b | | 9,700,000 |
| Denver City and County, | | | | | | | | | | |
| Airport System Revenue (LOC; | | | | | | | | | | |
| Landesbank Baden-Wurttemberg) | | 1.05 | | 12/7/08 | | 16,500,000 | | b | | 16,500,000 |
| Mountain Village Housing | | | | | | | | | | |
| Authority, Housing Facilities | | | | | | | | | | |
| Revenue (Village Court | | | | | | | | | | |
| Apartments Project) (LOC; U.S. | | | | | | | | | | |
| Bank NA) | | 1.03 | | 12/7/08 | | 6,600,000 | | b | | 6,600,000 |
| Southern Ute Indian Tribe of the | | | | | | | | | | |
| Southern Ute Indian | | | | | | | | | | |
| Reservation, Revenue | | 0.90 | | 12/7/08 | | 5,000,000 | | b | | 5,000,000 |
| Delaware—.7% | | | | | | | | | | |
| Delaware Economic Development | | | | | | | | | | |
| Authority, MFHR (School House | | | | | | | | | | |
| Project) (LOC; HSBC Bank USA) | | 1.25 | | 12/7/08 | | 6,500,000 | | b | | 6,500,000 |
| District of Columbia—5.2% | | | | | | | | | | |
| Anacostia Waterfront Corporation, | | | | | | | | | | |
| PILOT Revenue (Merlots | | | | | | | | | | |
| Program) (Liquidity Facility; | | | | | | | | | | |
| Wachovia Bank and LOC; | | | | | | | | | | |
| Wachovia Bank) | | 1.35 | | 12/7/08 | | 14,655,000 | | b,c | | 14,655,000 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments (continued) | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| District of Columbia (continued) | | | | | | | | | | |
| District of Columbia, | | | | | | | | | | |
| Enterprise Zone Revenue | | | | | | | | | | |
| (Trigen-Pepco Energy Services, | | | | | | | | | | |
| LLC Issue) (LOC; M&T Bank) | | 1.13 | | 12/7/08 | | 9,780,000 | | b | | 9,780,000 |
| Metropolitan Washington Airports | | | | | | | | | | |
| Authority, CP (LOC; Bank of | | | | | | | | | | |
| America) | | 1.80 | | 12/9/08 | | 6,000,000 | | | | 6,000,000 |
| Washington DC Metropolitan Area | | | | | | | | | | |
| Transit Authority, CP (LOC; | | | | | | | | | | |
| Wachovia Bank) | | 3.50 | | 12/3/08 | | 20,000,000 | | | | 20,000,000 |
| Florida—20.7% | | | | | | | | | | |
| Alachua Housing Finance Authority, | | | | | | | | | | |
| MFHR (Edenwood Park Project) | | | | | | | | | | |
| (Liquidity Facility; FHLMC and | | | | | | | | | | |
| LOC; FHLMC) | | 1.25 | | 12/7/08 | | 3,285,000 | | b,c | | 3,285,000 |
| Broward County, | | | | | | | | | | |
| Sales Tax Revenue, CP | | | | | | | | | | |
| (Liquidity Facility; Dexia | | | | | | | | | | |
| Credit Locale) | | 3.50 | | 12/3/08 | | 10,000,000 | | | | 10,000,000 |
| Broward County, | | | | | | | | | | |
| Sales Tax Revenue, CP | | | | | | | | | | |
| (Liquidity Facility; Dexia | | | | | | | | | | |
| Credit Locale) | | 4.00 | | 12/3/08 | | 5,000,000 | | | | 5,000,000 |
| Broward County Housing Finance | | | | | | | | | | |
| Authority, MFHR (Cypress Grove | | | | | | | | | | |
| Apartments Project) (LOC; FNMA) | | 1.18 | | 12/7/08 | | 20,000,000 | | b | | 20,000,000 |
| Broward County Housing Finance | | | | | | | | | | |
| Authority, MFHR (Golf View | | | | | | | | | | |
| Gardens Apartments Project) | | | | | | | | | | |
| (LOC; Regions Bank) | | 1.39 | | 12/7/08 | | 8,500,000 | | b | | 8,500,000 |
| Broward County Housing Finance | | | | | | | | | | |
| Authority, SFMR (Merlots | | | | | | | | | | |
| Program) (Liquidity Facility; | | | | | | | | | | |
| Wachovia Bank and LOC: FNMA | | | | | | | | | | |
| and GNMA) | | 1.45 | | 12/7/08 | | 605,000 | | b,c | | 605,000 |
| Capital Trust Agency, | | | | | | | | | | |
| MFHR (Brittany Bay Apartments | | | | | | | | | | |
| —Waterman’s Crossing) | | | | | | | | | | |
| (Liquidity Facility; FHLMC and | | | | | | | | | | |
| LOC; FHLMC) | | 1.14 | | 12/7/08 | | 25,840,000 | | b,c | | 25,840,000 |
8
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments (continued) | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| Florida (continued) | | | | | | | | | | |
| Citizens Property Insurance | | | | | | | | | | |
| Corporation, High-Risk Account | | | | | | | | | | |
| Senior Secured Revenue | | 4.50 | | 6/1/09 | | 25,000,000 | | | | 25,120,521 |
| Dade County Industrial Development | | | | | | | | | | |
| Authority, IDR (U.S. Holdings | | | | | | | | | | |
| Inc. Project) (LOC; SunTrust Bank) | | 1.65 | | 12/7/08 | | 425,000 | | b | | 425,000 |
| Escambia County Housing Finance | | | | | | | | | | |
| Authority, SFMR (Merlots | | | | | | | | | | |
| Program) (Liquidity Facility; | | | | | | | | | | |
| Wachovia Bank and LOC: FNMA | | | | | | | | | | |
| and GNMA) | | 1.50 | | 12/7/08 | | 1,225,000 | | b,c | | 1,225,000 |
| Florida Development Finance | | | | | | | | | | |
| Corporation, IDR (R.L. Smith | | | | | | | | | | |
| Investments, LLC Project) | | | | | | | | | | |
| (LOC; SunTrust Bank) | | 1.49 | | 12/7/08 | | 790,000 | | b | | 790,000 |
| Florida Development Finance | | | | | | | | | | |
| Corporation, IDR (Suncoast | | | | | | | | | | |
| Bakeries, Inc. Project) (LOC; | | | | | | | | | | |
| SunTrust Bank) | | 1.30 | | 12/7/08 | | 600,000 | | b | | 600,000 |
| Florida Development Finance | | | | | | | | | | |
| Corporation, IDR (Twin Vee | | | | | | | | | | |
| PowerCats, Inc. Project) (LOC; | | | | | | | | | | |
| SunTrust Bank) | | 1.35 | | 12/7/08 | | 1,720,000 | | b | | 1,720,000 |
| Florida Finance Housing | | | | | | | | | | |
| Corporation, MFHR (Falls of | | | | | | | | | | |
| Venice Project) (Liquidity | | | | | | | | | | |
| Facility; FNMA and LOC; FNMA) | | 1.40 | | 12/7/08 | | 4,020,000 | | b | | 4,020,000 |
| Highlands County Health Facilities | | | | | | | | | | |
| Authority, HR (Adventist | | | | | | | | | | |
| Health System/Sunbelt | | | | | | | | | | |
| Obligated Group) | | 1.00 | | 12/7/08 | | 13,000,000 | | b | | 13,000,000 |
| Hillsborough County Industrial | | | | | | | | | | |
| Development Authority, IDR | | | | | | | | | | |
| (Seaboard Tampa Terminals | | | | | | | | | | |
| Venture Project) (LOC; | | | | | | | | | | |
| Wachovia Bank) | | 1.30 | | 12/7/08 | | 4,000,000 | | b | | 4,000,000 |
| Jacksonville Economic Development | | | | | | | | | | |
| Commission, IDR (Load King | | | | | | | | | | |
| Manufacturing Company Project) | | | | | | | | | | |
| (LOC; SouthTrust Bank) | | 1.35 | | 12/7/08 | | 1,140,000 | | b | | 1,140,000 |
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments (continued) | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| Florida (continued) | | | | | | | | | | |
| Jacksonville Port Authority, | | | | | | | | | | |
| CP (LOC; JPMorgan Chase Bank) | | 1.90 | | 12/11/08 | | 20,000,000 | | | | 20,000,000 |
| Lee County Housing Finance | | | | | | | | | | |
| Authority, MFHR (Heron Pond | | | | | | | | | | |
| Apartments) (LOC; Regions Bank) | | 1.39 | | 12/7/08 | | 5,770,000 | | b | | 5,770,000 |
| Manatee County, | | | | | | | | | | |
| IDR (Avon Cabinet Corporation | | | | | | | | | | |
| Project) (LOC; Bank of America) | | 1.25 | | 12/7/08 | | 1,800,000 | | b | | 1,800,000 |
| Miami-Dade County Health | | | | | | | | | | |
| Facilities Authority, HR | | | | | | | | | | |
| (Miami Children’s Hospital | | | | | | | | | | |
| Project) (LOC; Regions Bank) | | 1.43 | | 12/7/08 | | 15,000,000 | | b | | 15,000,000 |
| Miami-Dade County Industrial | | | | | | | | | | |
| Development Authority, IDR | | | | | | | | | | |
| (Futurama Project) (LOC; | | | | | | | | | | |
| SunTrust Bank) | | 1.63 | | 12/7/08 | | 1,750,000 | | b | | 1,750,000 |
| Miami-Dade County Industrial | | | | | | | | | | |
| Development Authority, IDR | | | | | | | | | | |
| (von Drehle Holdings, LLC | | | | | | | | | | |
| Project) (LOC; Branch Banking | | | | | | | | | | |
| and Trust Co.) | | 1.25 | | 12/7/08 | | 1,230,000 | | b | | 1,230,000 |
| Miami-Dade County Industrial | | | | | | | | | | |
| Development Authority, Revenue | | | | | | | | | | |
| (Altira, Inc. Project) (LOC; | | | | | | | | | | |
| SunTrust Bank) | | 1.30 | | 12/7/08 | | 1,650,000 | | b | | 1,650,000 |
| Orange County Housing Finance | | | | | | | | | | |
| Authority, MFHR (Windsor Pines | | | | | | | | | | |
| Project) (LOC; Bank of America) | | 1.25 | | 12/7/08 | | 1,300,000 | | b | | 1,300,000 |
| Pinellas County Industrial | | | | | | | | | | |
| Development Authority, IDR | | | | | | | | | | |
| (Falcon Enterprises, Inc. | | | | | | | | | | |
| Project) (LOC; SunTrust Bank) | | 1.35 | | 12/7/08 | | 1,740,000 | | b | | 1,740,000 |
| Pinellas County Industrial | | | | | | | | | | |
| Development Authority, IDR | | | | | | | | | | |
| (Restorative Care of America | | | | | | | | | | |
| Project) (LOC; SunTrust Bank) | | 1.35 | | 12/7/08 | | 1,430,000 | | b | | 1,430,000 |
| Polk County Industrial Development | | | | | | | | | | |
| Authority, IDR (Florida | | | | | | | | | | |
| Treatt, Inc. Project) (LOC; | | | | | | | | | | |
| Bank of America) | | 1.25 | | 12/7/08 | | 3,345,000 | | b | | 3,345,000 |
10
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments (continued) | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| Florida (continued) | | | | | | | | | | |
| Riveria Beach, | | | | | | | | | | |
| IDR (K. Rain Manufacturing | | | | | | | | | | |
| Project) (LOC; SunTrust Bank) | | 1.30 | | 12/7/08 | | 1,740,000 | | b | | 1,740,000 |
| Sarasota County Public Hospital | | | | | | | | | | |
| District, HR (Sarasota | | | | | | | | | | |
| Memorial Hospital Project) | | | | | | | | | | |
| (LOC; Fifth Third Bank) | | 1.03 | | 12/7/08 | | 20,000,000 | | b | | 20,000,000 |
| Georgia—3.0% | | | | | | | | | | |
| Conyers Housing Authority, | | | | | | | | | | |
| MFHR (Towne Pointe Apartments | | | | | | | | | | |
| Project) (LOC; Amsouth Bank) | | 3.25 | | 12/7/08 | | 4,000,000 | | b | | 4,000,000 |
| Georgia, | | | | | | | | | | |
| GO Notes (Liquidity Facility; | | | | | | | | | | |
| Dexia Credit Locale) | | 1.90 | | 12/7/08 | | 20,000,000 | | b | | 20,000,000 |
| RBC Municipal Products Inc. Trust | | | | | | | | | | |
| (Dekalb County Housing | | | | | | | | | | |
| Authority, MFHR (North Hills | | | | | | | | | | |
| Apartments Project)) | | | | | | | | | | |
| (Liquidity Facility; Royal | | | | | | | | | | |
| Bank of Canada and LOC; Royal | | | | | | | | | | |
| Bank of Canada) | | 1.20 | | 12/7/08 | | 5,700,000 | | b,c | | 5,700,000 |
| Hawaii—1.5% | | | | | | | | | | |
| Hawaii Housing Finance and | | | | | | | | | | |
| Development Corporation, MFHR | | | | | | | | | | |
| (Kukui Gardens) (Liquidity | | | | | | | | | | |
| Facility; Citigroup and LOC; | | | | | | | | | | |
| Citigroup) | | 1.14 | | 12/7/08 | | 15,000,000 | | b,c | | 15,000,000 |
| Illinois—1.3% | | | | | | | | | | |
| Illinois Housing Development | | | | | | | | | | |
| Authority, Homeowner Mortgage | | | | | | | | | | |
| Revenue | | 1.98 | | 8/1/09 | | 5,000,000 | | | | 5,000,000 |
| Southwestern Illinois Development | | | | | | | | | | |
| Authority, Solid Waste | | | | | | | | | | |
| Disposal Facilities Revenue | | | | | | | | | | |
| (Center Ethanol Company, LLC | | | | | | | | | | |
| Project) (LOC; Wells Fargo Bank) | | 1.35 | | 12/7/08 | | 7,370,000 | | b | | 7,370,000 |
| Indiana—.7% | | | | | | | | | | |
| Indianapolis Local Public | | | | | | | | | | |
| Improvement Bond Bank, Notes | | 2.95 | | 1/8/09 | | 7,000,000 | | | | 7,000,000 |
The Fund 11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments (continued) | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| Iowa—.6% | | | | | | | | | | |
| Iowa Finance Authority, | | | | | | | | | | |
| SWDR (MidAmerican Energy | | | | | | | | | | |
| Project) | | 1.40 | | 12/7/08 | | 6,000,000 | | b | | 6,000,000 |
| Kansas—1.3% | | | | | | | | | | |
| Junction City, | | | | | | | | | | |
| GO Temporary Notes | | 4.50 | | 6/1/09 | | 7,000,000 | | | | 7,025,377 |
| Kansas Development Finance | | | | | | | | | | |
| Authority, MFHR, Refunding | | | | | | | | | | |
| (Chesapeake Apartments | | | | | | | | | | |
| Project) (LOC; FHLB) | | 1.08 | | 12/7/08 | | 5,500,000 | | b | | 5,500,000 |
| Louisiana—.9% | | | | | | | | | | |
| Ascension Parish, | | | | | | | | | | |
| Revenue, CP (BASF AG) | | 1.78 | | 1/12/09 | | 5,000,000 | | | | 5,000,000 |
| Quachita Parish Industrial | | | | | | | | | | |
| Development Board, IDR | | | | | | | | | | |
| (Garrett Manufacturing, LLC | | | | | | | | | | |
| Project) (LOC; Regions Bank) | | 1.63 | | 12/7/08 | | 3,320,000 | | b | | 3,320,000 |
| Maryland—2.8% | | | | | | | | | | |
| Baltimore County, | | | | | | | | | | |
| Revenue, Refunding (Shade Tree | | | | | | | | | | |
| Trace Apartments Facility) | | | | | | | | | | |
| (LOC; M&T Bank) | | 1.17 | | 12/7/08 | | 5,305,000 | | b | | 5,305,000 |
| Maryland Economic Development | | | | | | | | | | |
| Corporation, Revenue | | | | | | | | | | |
| (Todd/Allan Printing Facility) | | | | | | | | | | |
| (LOC; M&T Bank) | | 1.28 | | 12/7/08 | | 330,000 | | b | | 330,000 |
| Montgomery County, | | | | | | | | | | |
| EDR (Riderwood Village, Inc. | | | | | | | | | | |
| Project) (LOC; M&T Bank) | | 1.00 | | 12/7/08 | | 21,390,000 | | b | | 21,390,000 |
| Massachusetts—2.7% | | | | | | | | | | |
| Massachusetts Health and | | | | | | | | | | |
| Educational Facilities | | | | | | | | | | |
| Authority, Revenue (Cape Cod | | | | | | | | | | |
| Healthcare Obligated Group | | | | | | | | | | |
| Issue) (Insured; Assured | | | | | | | | | | |
| Guaranty and Liquidity | | | | | | | | | | |
| Facility; Bank of America) | | 1.15 | | 12/7/08 | | 14,700,000 | | b | | 14,700,000 |
| Massachusetts Health and | | | | | | | | | | |
| Educational Facilities | | | | | | | | | | |
| Authority, Revenue | | | | | | | | | | |
| (Northeastern University Issue) | | 2.25 | | 6/11/09 | | 12,000,000 | | | | 12,000,000 |
12
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments (continued) | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| Michigan—2.8% | | | | | | | | | | |
| Kalamazoo Hospital Finance | | | | | | | | | | |
| Authority, HR, Refunding | | | | | | | | | | |
| (Bronson Methodist Hospital) | | | | | | | | | | |
| (Insured; FSA) | | 2.65 | | 5/15/09 | | 1,850,000 | | | | 1,850,000 |
| Michigan Housing Development | | | | | | | | | | |
| Authority, Rental Housing | | | | | | | | | | |
| Revenue (Liquidity Facility; | | | | | | | | | | |
| Landesbank Hessen-Thuringen | | | | | | | | | | |
| Girozentrale) | | 1.10 | | 12/7/08 | | 25,000,000 | | b | | 25,000,000 |
| Missouri—.8% | | | | | | | | | | |
| Missouri Health and Educational | | | | | | | | | | |
| Facilities Authority, Health | | | | | | | | | | |
| Facilities Revenue, CP (Cox | | | | | | | | | | |
| Hospital) (LOC; Bank of Nova | | | | | | | | | | |
| Scotia) | | 3.25 | | 12/8/08 | | 8,000,000 | | | | 8,000,000 |
| Nebraska—2.1% | | | | | | | | | | |
| Public Power Generation Agency, | | | | | | | | | | |
| Revenue (Whelan Energy Center | | | | | | | | | | |
| Unit 2) (Insured; Berkshire | | | | | | | | | | |
| Hathaway Assurance Corporation | | | | | | | | | | |
| and Liquidity Facility; | | | | | | | | | | |
| Citibank NA) | | 1.16 | | 12/7/08 | | 20,085,000 | | b,c | | 20,085,000 |
| New Hampshire—1.2% | | | | | | | | | | |
| New Hampshire Health | | | | | | | | | | |
| and Education | | | | | | | | | | |
| Facilities Authority, Revenue | | | | | | | | | | |
| (Riverbend Issue) (LOC; TD | | | | | | | | | | |
| Banknorth, N.A.) | | 1.05 | | 12/7/08 | | 4,075,000 | | b | | 4,075,000 |
| Rockingham County, | | | | | | | | | | |
| GO Notes, TAN | | 2.50 | | 12/18/08 | | 7,845,000 | | | | 7,847,967 |
| New Jersey—3.7% | | | | | | | | | | |
| New Jersey Economic Development | | | | | | | | | | |
| Authority, School Facilities | | | | | | | | | | |
| Construction Revenue, | | | | | | | | | | |
| Refunding (LOC; Dexia Credit | | | | | | | | | | |
| Locale) | | 2.50 | | 12/7/08 | | 25,000,000 | | b | | 25,000,000 |
| New Jersey Housing and Mortgage | | | | | | | | | | |
| Finance Agency, Multi-Family | | | | | | | | | | |
| Revenue (Insured; FSA and | | | | | | | | | | |
| Liquidity Facility; Lloyds TBS | | | | | | | | | | |
| Bank PLC) | | 2.50 | | 12/7/08 | | 11,055,000 | | b | | 11,055,000 |
The Fund 13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments (continued) | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| North Carolina—1.0% | | | | | | | | | | |
| North Carolina Education | | | | | | | | | | |
| Assistance Authority, Student | | | | | | | | | | |
| Loan Revenue, Refunding (LOC; | | | | | | | | | | |
| Royal Bank of Canada) | | 1.10 | | 12/7/08 | | 10,000,000 | | b | | 10,000,000 |
| North Dakota—1.0% | | | | | | | | | | |
| North Dakota Housing Finance | | | | | | | | | | |
| Agency, Revenue (Housing | | | | | | | | | | |
| Finance Program—Home | | | | | | | | | | |
| Mortgage Finance Program) | | 3.00 | | 4/14/09 | | 9,750,000 | | | | 9,767,488 |
| Ohio—.7% | | | | | | | | | | |
| Akron, Bath and Copley Joint | | | | | | | | | | |
| Township Hospital District, | | | | | | | | | | |
| Health Care Facilities Revenue | | | | | | | | | | |
| (Sumner on Ridgewood Project) | | | | | | | | | | |
| (LOC; KBC Bank) | | 1.20 | | 12/7/08 | | 5,165,000 | | b | | 5,165,000 |
| Columbus, | | | | | | | | | | |
| Sewerage System Revenue | | | | | | | | | | |
| (Putters Program) (Liquidity | | | | | | | | | | |
| Facility; JPMorgan Chase Bank) | | 1.03 | | 12/7/08 | | 1,400,000 | | b,c | | 1,400,000 |
| Oklahoma—1.0% | | | | | | | | | | |
| Tulsa County Industrial Authority, | | | | | | | | | | |
| Capital Improvements Revenue | | | | | | | | | | |
| (Liquidity Facility; Bank of | | | | | | | | | | |
| America) | | 2.75 | | 2/17/09 | | 10,000,000 | | | | 10,000,000 |
| Pennsylvania—13.3% | | | | | | | | | | |
| Allentown Commercial and | | | | | | | | | | |
| Industrial Development | | | | | | | | | | |
| Authority, Revenue (Diocese of | | | | | | | | | | |
| Allentown) (LOC; Wachovia Bank) | | 1.75 | | 12/1/08 | | 14,050,000 | | b | | 14,050,000 |
| Delaware County Industrial | | | | | | | | | | |
| Development Authority, PCR, CP | | | | | | | | | | |
| (Exelon Project) (LOC; | | | | | | | | | | |
| Wachovia Bank) | | 3.50 | | 12/3/08 | | 5,700,000 | | | | 5,700,000 |
| Emmaus General Authority | | | | | | | | | | |
| (Pennsylvania Variable Rate | | | | | | | | | | |
| Loan Program) (Insured; FSA | | | | | | | | | | |
| and Liquidity Facility; | | | | | | | | | | |
| Wachovia Bank) | | 2.15 | | 12/7/08 | | 20,000,000 | | b | | 20,000,000 |
14
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments (continued) | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| Pennsylvania (continued) | | | | | | | | | | |
| Emmaus General Authority, | | | | | | | | | | |
| Local Government Revenue (Bond | | | | | | | | | | |
| Pool Program) (LOC; U.S. Bank NA) | | 0.90 | | 12/7/08 | | 10,000,000 | | b | | 10,000,000 |
| Horizon Hospital System Authority, | | | | | | | | | | |
| Senior Health and Housing | | | | | | | | | | |
| Facilities Revenue (Saint Paul | | | | | | | | | | |
| Homes Project) (LOC; M&T Bank) | | 1.08 | | 12/7/08 | | 1,800,000 | | b | | 1,800,000 |
| Montgomery County Higher Education | | | | | | | | | | |
| and Health Authority, Revenue | | | | | | | | | | |
| (Pennsylvania Higher Education | | | | | | | | | | |
| and Health Loan) (LOC; M&T | | | | | | | | | | |
| Bank) | | 1.08 | | 12/7/08 | | 6,675,000 | | b | | 6,675,000 |
| Montgomery County Higher Education | | | | | | | | | | |
| and Health Authority, Revenue | | | | | | | | | | |
| (Pennsylvania Higher Education | | | | | | | | | | |
| and Health Loan) (LOC; M&T | | | | | | | | | | |
| Bank) | | 1.08 | | 12/7/08 | | 5,330,000 | | b | | 5,330,000 |
| Montgomery County Industrial | | | | | | | | | | |
| Development Authority, PCR, CP | | | | | | | | | | |
| (Exelon Project) (LOC; | | | | | | | | | | |
| Wachovia Bank) | | 3.50 | | 12/3/08 | | 37,295,000 | | | | 37,295,000 |
| Pennsylvania Economic Development | | | | | | | | | | |
| Financing Authority, Exempt | | | | | | | | | | |
| Facility Revenue (PPL Energy | | | | | | | | | | |
| Supply) (LOC; Wachovia Bank) | | 1.80 | | 4/9/09 | | 5,000,000 | | | | 5,000,000 |
| Pennsylvania Economic Development | | | | | | | | | | |
| Financing Authority, Revenue | | | | | | | | | | |
| (Evergreen Community Power | | | | | | | | | | |
| Facility) (LOC; M&T Bank) | | 1.18 | | 12/7/08 | | 15,000,000 | | b | | 15,000,000 |
| Puttable Floating Option Tax | | | | | | | | | | |
| Exempt Receipts (Allegheny | | | | | | | | | | |
| County Airport Authority, | | | | | | | | | | |
| Airport Revenue (Pittsburgh | | | | | | | | | | |
| International Airport)) | | | | | | | | | | |
| (Insured: Berkshire Hathaway | | | | | | | | | | |
| Assurance Corporation and | | | | | | | | | | |
| Merrill Lynch Capital Services) | | 1.54 | | 12/7/08 | | 5,000,000 | | b,c | | 5,000,000 |
The Fund 15
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments (continued) | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| Pennsylvania (continued) | | | | | | | | | | |
| Susquehanna County Industrial | | | | | | | | | | |
| Development Authority, Revenue | | | | | | | | | | |
| (Pennfield Corporation | | | | | | | | | | |
| Project) (LOC; Fulton Bank) | | 1.20 | | 12/7/08 | | 3,475,000 | | b | | 3,475,000 |
| Rhode Island—.9% | | | | | | | | | | |
| Rhode Island Housing and Mortgage | | | | | | | | | | |
| Finance Corporation, Housing | | | | | | | | | | |
| Revenue (Rental Housing | | | | | | | | | | |
| Program) (Insured; FSA and | | | | | | | | | | |
| Liquidity Facility; Dexia | | | | | | | | | | |
| Credit Locale) | | 4.00 | | 12/7/08 | | 9,270,000 | | b | | 9,270,000 |
| South Carolina—.1% | | | | | | | | | | |
| Richland County, | | | | | | | | | | |
| GO Notes | | 3.75 | | 3/1/09 | | 1,300,000 | | | | 1,306,012 |
| Tennessee—5.1% | | | | | | | | | | |
| Blount County Public Building | | | | | | | | | | |
| Authority, Local Government | | | | | | | | | | |
| Public Improvement Revenue | | | | | | | | | | |
| (LOC; Branch Banking and | | | | | | | | | | |
| Trust Co.) | | 0.95 | | 12/7/08 | | 10,000,000 | | b | | 10,000,000 |
| Municipal Energy Acquisition | | | | | | | | | | |
| Corporation, Gas Revenue | | | | | | | | | | |
| (Putters Program) (Liquidity | | | | | | | | | | |
| Facility; JPMorgan Chase Bank | | | | | | | | | | |
| and LOC; JPMorgan Chase Bank) | | 1.06 | | 12/7/08 | | 24,430,000 | | b,c | | 24,430,000 |
| Tennergy Corporation, | | | | | | | | | | |
| Gas Revenue (Putters Program) | | | | | | | | | | |
| (Liquidity Facility; JPMorgan | | | | | | | | | | |
| Chase Bank) | | 1.06 | | 12/7/08 | | 7,865,000 | | b,c | | 7,865,000 |
| Tennergy Corporation, | | | | | | | | | | |
| Gas Revenue (Putters Program) | | | | | | | | | | |
| (LOC; BNP Paribas) | | 1.06 | | 12/7/08 | | 7,950,000 | | b,c | | 7,950,000 |
| Texas—7.5% | | | | | | | | | | |
| Harris County Health Facilities | | | | | | | | | | |
| Development Corporation, HR, | | | | | | | | | | |
| Refunding (Texas Children’s | | | | | | | | | | |
| Hospital Project) (Liquidity | | | | | | | | | | |
| Facility: Bank of America and | | | | | | | | | | |
| JPMorgan Chase Bank) | | 2.10 | | 4/28/09 | | 9,925,000 | | | | 9,925,000 |
16
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments (continued) | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| Texas (continued) | | | | | | | | | | |
| Harris County Industrial | | | | | | | | | | |
| Development Corporation, SWDR | | | | | | | | | | |
| (Deer Park Refining Limited | | | | | | | | | | |
| Partnership Project) | | 1.30 | | 12/1/08 | | 30,000,000 | | b | | 30,000,000 |
| Port of Port Arthur Navigation | | | | | | | | | | |
| District of Jefferson County, | | | | | | | | | | |
| Environmental Facilities | | | | | | | | | | |
| Revenue, Refunding (Motiva | | | | | | | | | | |
| Enterprises LLC Project) | | 1.00 | | 12/1/08 | | 27,800,000 | | b | | 27,800,000 |
| Port of Port Arthur Navigation | | | | | | | | | | |
| District of Jefferson County, | | | | | | | | | | |
| Environmental Facilities | | | | | | | | | | |
| Revenue, Refunding (Motiva | | | | | | | | | | |
| Enterprises LLC Project) | | 1.50 | | 12/7/08 | | 5,000,000 | | b | | 5,000,000 |
| Vermont—1.5% | | | | | | | | | | |
| Vermont Economic Development | | | | | | | | | | |
| Authority, Revenue, CP | | | | | | | | | | |
| (Econimic Development Capital | | | | | | | | | | |
| Program) (LOC; Calyon) | | 1.80 | | 12/2/08 | | 5,000,000 | | | | 5,000,000 |
| Vermont Educational and Health | | | | | | | | | | |
| Buildings Financing Agency, HR | | | | | | | | | | |
| (Rutland Regional Medical | | | | | | | | | | |
| Center Project) (Liquidity | | | | | | | | | | |
| Facility; TD Banknorth, N.A.) | | 1.15 | | 12/1/08 | | 10,000,000 | | b | | 10,000,000 |
| Virginia—4.2% | | | | | | | | | | |
| Hanover County Economic | | | | | | | | | | |
| Development Authority, | | | | | | | | | | |
| Revenue, Refunding (Bon | | | | | | | | | | |
| Secours Health System, Inc.) | | | | | | | | | | |
| (LOC; U.S. Bank NA) | | 0.77 | | 12/7/08 | | 6,900,000 | | b | | 6,900,000 |
| Lynchburg Industrial Development | | | | | | | | | | |
| Authority, HR (Centra Health) | | | | | | | | | | |
| (LOC; Branch Banking and Trust Co.) | | 0.85 | | 12/7/08 | | 9,050,000 | | b | | 9,050,000 |
| Virginia Commonwealth University | | | | | | | | | | |
| Health System Authority, | | | | | | | | | | |
| General Revenue (Medical | | | | | | | | | | |
| College of Virginia Hospitals) | | | | | | | | | | |
| (Liquidity Facility; Wachovia | | | | | | | | | | |
| Bank) | | 1.40 | | 12/1/08 | | 19,210,000 | | b | | 19,210,000 |
The Fund 17
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Short-Term | | Coupon | | Maturity | | Principal | | | | |
| Investments (continued) | | Rate (%) | | Date | | Amount ($) | | | | Value ($) |
| |
| |
| |
| |
| |
|
| Virginia (continued) | | | | | | | | | | |
| Virginia Port Authority, | | | | | | | | | | |
| Subordinate Port Facilities | | | | | | | | | | |
| Revenue, BAN | | 3.00 | | 7/1/09 | | 6,000,000 | | | | 6,035,869 |
| Washington—.8% | | | | | | | | | | |
| Pierce County Economic Development | | | | | | | | | | |
| Corporation, Industrial | | | | | | | | | | |
| Revenue (SeaTac Packaging | | | | | | | | | | |
| Project) (LOC; HSBC Bank USA) | | 1.25 | | 12/7/08 | | 4,060,000 | | b | | 4,060,000 |
| Washington Housing Finance | | | | | | | | | | |
| Commission, Nonprofit Housing | | | | | | | | | | |
| Revenue (Mirabella Project) | | | | | | | | | | |
| (LOC; HSH Nordbank) | | 2.00 | | 12/1/08 | | 3,500,000 | | b | | 3,500,000 |
| Wisconsin—1.0% | | | | | | | | | | |
| Wisconsin School Districts, | | | | | | | | | | |
| COP, TRAN (Cash Flow | | | | | | | | | | |
| Management Program) (LOC; | | | | | | | | | | |
| U.S. Bank NA) | | 3.00 | | 9/17/09 | | 10,000,000 | | | | 10,093,643 |
| |
| |
| |
| |
| |
|
| |
| Total Investments (cost $964,112,371) | | | | | | 98.8% | | | | 964,112,371 |
| Cash and Receivables (Net) | | | | | | 1.2% | | | | 11,866,817 |
| Net Assets | | | | | | 100.0% | | | | 975,979,188 |
| a | This security is prerefunded; the date shown represents the prerefunded date. Bonds which are prerefunded are collateralized by U.S. Government securities which are held in escrow and are used to pay principal and interest on the municipal issue and to retire the bonds in full at the earliest refunding date. |
| |
| b | Variable rate demand note—rate shown is the interest rate in effect at November 30, 2008. Maturity date represents the next demand date, or the ultimate maturity date if earlier. |
| |
| c | Securities exempt from registration under Rule 144A of the Securities Act of 1933.These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At November 30, 2008, these securities amounted to $133,040,000 or 13.6% of net assets. |
| |
18
| Summary of Abbreviations | | | | |
| |
| ABAG | | Association of Bay Area Governments | | ACA | | American Capital Access |
| AGC | | ACE Guaranty Corporation | | AGIC | | Asset Guaranty Insurance Company |
| AMBAC | | American Municipal Bond | | | | |
| | | Assurance Corporation | | ARRN | | Adjustable Rate Receipt Notes |
| BAN | | Bond Anticipation Notes | | BIGI | | Bond Investors Guaranty Insurance |
| BPA | | Bond Purchase Agreement | | CGIC | | Capital Guaranty Insurance Company |
| CIC | | Continental Insurance Company | | CIFG | | CDC Ixis Financial Guaranty |
| CMAC | | Capital Market Assurance Corporation | | COP | | Certificate of Participation |
| CP | | Commercial Paper | | EDR | | Economic Development Revenue |
| EIR | | Environmental Improvement Revenue | | FGIC | | Financial Guaranty Insurance |
| | | | | | | Company |
| FHA | | Federal Housing Administration | | FHLB | | Federal Home Loan Bank |
| FHLMC | | Federal Home Loan Mortgage | | FNMA | | Federal National |
| | | Corporation | | | | Mortgage Association |
| FSA | | Financial Security Assurance | | GAN | | Grant Anticipation Notes |
| GIC | | Guaranteed Investment Contract | | GNMA | | Government National |
| | | | | | | Mortgage Association |
| GO | | General Obligation | | HR | | Hospital Revenue |
| IDB | | Industrial Development Board | | IDC | | Industrial Development Corporation |
| IDR | | Industrial Development Revenue | | LOC | | Letter of Credit |
| LOR | | Limited Obligation Revenue | | LR | | Lease Revenue |
| MFHR | | Multi-Family Housing Revenue | | MFMR | | Multi-Family Mortgage Revenue |
| PCR | | Pollution Control Revenue | | PILOT | | Payment in Lieu of Taxes |
| RAC | | Revenue Anticipation Certificates | | RAN | | Revenue Anticipation Notes |
| RAW | | Revenue Anticipation Warrants | | RRR | | Resources Recovery Revenue |
| SAAN | | State Aid Anticipation Notes | | SBPA | | Standby Bond Purchase Agreement |
| SFHR | | Single Family Housing Revenue | | SFMR | | Single Family Mortgage Revenue |
| SONYMA | | State of New York Mortgage Agency | | SWDR | | Solid Waste Disposal Revenue |
| TAN | | Tax Anticipation Notes | | TAW | | Tax Anticipation Warrants |
| TRAN | | Tax and Revenue Anticipation Notes | | XLCA | | XL Capital Assurance |
The Fund 19
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Summary of Combined Ratings (Unaudited) | | |
| |
| Fitch | | or | | Moody’s | | or | | Standard & Poor’s | | Value (%)† |
| |
| |
| |
| |
| |
|
| F1+,F1 | | | | VMIG1,MIG1,P1 | | SP1+,SP1,A1+,A1 | | 91.3 |
| AAA,AA,A d | | | | Aaa,Aa,A d | | | | AAA,AA,A d | | 6.0 |
| Not Rated e | | | | Not Rated e | | | | Not Rated e | | 2.7 |
| | | | | | | | | | | 100.0 |
| † Based on total investments. | | | | | | |
| d | Notes which are not F, MIG and SP rated are represented by bond ratings of the issuers. |
| |
| e | Securities which, while not rated by Fitch, Moody’s and Standard & Poor’s, have been determined by the Manager to be of comparable quality to those rated securities in which the fund may invest. |
| |
| See notes to financial statements. |
20
STATEMENT OF ASSETS AND LIABILITIES
November 30, 2008 (Unaudited)
| | | Cost | | Value |
| |
| |
|
| Assets ($): | | | | |
| Investments in securities—See Statement of Investments | | 964,112,371 | | 964,112,371 |
| Cash | | | | 10,333,383 |
| Interest receivable | | | | 3,484,093 |
| Prepaid expenses | | | | 55,626 |
| | | | | 977,985,473 |
| |
| |
|
| Liabilities ($): | | | | |
| Due to The Dreyfus Corporation and affiliates—Note 2(b) | | | | 344,632 |
| Payable for shares of Common Stock redeemed | | | | 1,597,090 |
| Accrued expenses | | | | 64,563 |
| | | | | 2,006,285 |
| |
| |
|
| Net Assets ($) | | | | 975,979,188 |
| |
| |
|
| Composition of Net Assets ($): | | | | |
| Paid-in capital | | | | 975,999,875 |
| Accumulated net realized gain (loss) on investments | | | | (20,687) |
| |
| |
|
| Net Assets ($) | | | | 975,979,188 |
| |
| |
|
| Shares Outstanding | | | | |
| (5 billion shares of $.001 par value Common Stock authorized) | | | | 977,744,190 |
| Net Asset Value, offering and redemption price per share ($) | | | | 1.00 |
| |
| See notes to financial statements. | | | | |
The Fund 21
STATEMENT OF OPERATIONS
Six Months Ended November 30, 2008 (Unaudited) |
| Investment Income ($): | | |
| Interest Income | | 13,141,144 |
| Expenses: | | |
| Management fee—Note 2(a) | | 2,608,190 |
| Shareholder servicing costs—Note 2(b) | | 217,563 |
| Treasury insurance expense—Note 1(e) | | 80,249 |
| Custodian fees—Note 2(b) | | 49,239 |
| Professional fees | | 43,371 |
| Prospectus and shareholders’ reports | | 39,194 |
| Directors’ fees and expenses—Note 2(c) | | 39,052 |
| Registration fees | | 21,931 |
| Miscellaneous | | 21,988 |
| Total Expenses | | 3,120,777 |
| Less—reduction in fees due to earnings credits—Note 1(b) | | (117,698) |
| Net Expenses | | 3,003,079 |
| Investment Income—Net | | 10,138,065 |
| |
|
| Net Realized Gain (Loss) on Investments—Note 1(b) ($) | | (15,648) |
| Net Increase in Net Assets Resulting from Operations | | 10,122,417 |
| See notes to financial statements. | | |
22
STATEMENT OF CHANGES IN NET ASSETS
| | | Six Months Ended | | |
| | | November 30, 2008 | | Year Ended |
| | | (Unaudited) | | May 31, 2008 |
| |
| |
|
| Operations ($): | | | | |
| Investment income—net | | 10,138,065 | | 24,086,694 |
| Net realized gain (loss) on investments | | (15,648) | | (5,039) |
| Net Increase (Decrease) in Net Assets | | | | |
| Resulting from Operations | | 10,122,417 | | 24,081,655 |
| |
| |
|
| Dividends to Shareholders from ($): | | | | |
| Investment income—net | | (10,138,065) | | (24,126,582) |
| |
| |
|
| Capital Stock Transactions ($1.00 per share): | | | | |
| Net proceeds from shares sold | | 1,063,261,278 | | 1,997,488,998 |
| Net assets received in connection | | | | |
| with reorganization—Note 1 | | — | | 217,615,702 |
| Dividends reinvested | | 4,976,011 | | 10,951,024 |
| Cost of shares redeemed | | (1,117,358,397) | | (1,980,640,704) |
| Increase (Decrease) in Net Assets | | | | |
| from Capital Stock Transactions | | (49,121,108) | | 245,415,020 |
| Total Increase (Decrease) in Net Assets | | (49,136,756) | | 245,370,093 |
| |
| |
|
| Net Assets ($): | | | | |
| Beginning of Period | | 1,025,115,944 | | 779,745,851 |
| End of Period | | 975,979,188 | | 1,025,115,944 |
| |
| See notes to financial statements. | | | | |
The Fund 23
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.
| Six Months Ended | | | | | | | | | | |
| November 30, 2008 | | | | Year Ended May 31, | | |
| | |
| |
| |
|
| | | (Unaudited) | | 2008 | | 2007 | | 2006 | | 2005 | | 2004 |
| |
| |
| |
| |
| |
| |
|
| Per Share Data ($): | | | | | | | | | | | | |
| Net asset value, | | | | | | | | | | | | |
| beginning of period | | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 |
| Investment Operations: | | | | | | | | | | | | |
| Investment income—net | | .010 | | .028 | | .031 | | .023 | | .012 | | .005 |
| Distributions: | | | | | | | | | | | | |
| Dividends from investment | | | | | | | | | | | | |
| income—net | | (.010) | | (.028) | | (.031) | | (.023) | | (.012) | | (.005) |
| Dividends from net realized | | | | | | | | | | | | |
| gain on investments | | — | | — | | — | | — | | — | | (.000)a |
| Total Distributions | | (.010) | | (.028) | | (.031) | | (.023) | | (.012) | | (.005) |
| Net asset value, end of period | | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 |
| |
| |
| |
| |
| |
| |
|
| Total Return (%) | | 1.93b | | 2.84 | | 3.14 | | 2.37 | | 1.17 | | .49 |
| |
| |
| |
| |
| |
| |
|
| Ratios/Supplemental Data (%): | | | | | | | | | | |
| Ratio of total expenses | | | | | | | | | | | | |
| to average net assets | | .60b | | .59 | | .59 | | .59 | | .58 | | .59 |
| Ratio of net expenses | | | | | | | | | | | | |
| to average net assets | | .58b | | .58 | | .58 | | .58 | | .58c | | .59 |
| Ratio of net investment income | | | | | | | | | | | | |
| to average net assets | | 1.94b | | 2.74 | | 3.10 | | 2.34 | | 1.16 | | .49 |
| |
| |
| |
| |
| |
| |
|
| Net Assets, end of period | | | | | | | | | | | | |
| ($ x 1,000) | | 975,979 | | 1,025,116 | | 779,746 | | 972,745 | | 848,534 | | 981,962 |
| a | Amount represents less than $.001 per share. |
| |
| b | Annualized. |
| |
| c | Expense waivers and/or reimbursements amounted to less than .01%. |
| |
| See notes to financial statements. |
24
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Municipal Money Market Fund, Inc. (the “fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified open-end management investment company.The fund’s investment objective is to maximize current income exempt from federal income tax to the extent consistent with the preservation of capital and the maintenance of liquidity. The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund’s shares, which are sold without a sales charge.
Effective July 1, 2008, BNY Mellon has reorganized and consolidated a number of its banking and trust company subsidiaries. As a result of the reorganization, any services previously provided to the fund by Mellon Bank, N.A. or Mellon Trust of New England, N.A. are now provided by The Bank of New York, which has changed its name to The Bank of New York Mellon.
As of the close of business on December 20, 2007, pursuant to an Agreement and Plan of Reorganization previously approved by the fund’s Board of Directors, all of the assets, subject to the liabilities, of Dreyfus Florida Municipal Money Market Fund (the “Acquired Fund”) were transferred to the fund in exchange for shares of Common Stock of the fund of equal value. Shareholders of the Acquired Fund received shares of the fund, in each case in an equal amount to the aggregate net asset value of their investment in the Acquired Fund at the time of the exchange.The net asset value of the fund’s shares on the close of business December 20, 2007, after the reorganization was $1.00, and a total of 217,615,702 representing shares and net assets were issued to the Acquired Fund’s shareholders in the exchange.The exchange was a tax-free event to the Acquired Fund shareholders.
It is the fund’s policy to maintain a continuous net asset value per share of $1.00; the fund has adopted certain investment, portfolio valuation
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
and dividend and distribution policies to enable it to do so.There is no assurance, however, that the fund will be able to maintain a stable net asset value per share of $1.00.
The fund’s financial statements are prepared in accordance with U.S. generally accepted accounting principles, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 of the Act, which has been determined by the Board of Directors to represent the fair value of the fund’s investments.
The fund adopted Statement of Financial Accounting Standards No. 157 “FairValue Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements.
Various inputs are used in determining the value of the fund's investments relating to FAS 157.These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices in active markets for identical securities. Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, money market securities are valued using amortized cost, in accordance with rules under the Act. Generally, amortized cost
26
approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.
The following is a summary of the inputs used as of November 30, 2008 in valuing the fund’s investments carried at fair value:
| | | Investments in |
| Valuation Inputs | | Securities ($) |
| |
|
| Level 1—Quoted Prices | | 0 |
| Level 2—Other Significant Observable Inputs | | 964,112,371 |
| Level 3—Significant Unobservable Inputs | | 0 |
| Total | | 964,112,371 |
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and recognized on the accrual basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Cost of investments represents amortized cost.
In March 2008, the Financial Accounting Standards Board (“FASB”) released Statement of Financial Accounting Standards No. 161 “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agree-ments.The application of FAS 161 is required for fiscal years and interim periods beginning after November 15, 2008. At this time, management is evaluating the implications of FAS 161 and its impact on the financial statements and the accompanying notes has not yet been determined.
The fund has arrangements with the custodian and cash management banks whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody and cash management fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
The Fund 27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(c) Dividends to shareholders: It is the policy of the fund to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, which can distribute tax exempt dividends, by complying with the applicable provisions of the Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
The fund adopted FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Liability for tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year.The adoption of FIN 48 had no impact on the operations of the fund for the period ended November 30, 2008.
As of and during the period ended November 30, 2008, the fund did not have any liabilities for any unrecognized tax positions. The fund recognizes interest and penalties, if any, related to unrecognized tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended May 31, 2008 remains subject to examination by the Internal Revenue Service and state taxing authorities.
28
The fund has an unused capital loss carryover of $5,039 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to May 31, 2008. If not applied, the carryover expires in fiscal 2016.
The tax character of distributions paid to shareholders during the fiscal year ended May 31, 2008 were all tax exempt income. The tax character of current year distributions will be determined at the end of the current fiscal year.
At November 30, 2008, the cost of investments for federal income tax purposes was substantially the same as for financial reporting purposes (see the Statement of Investments).
(e) Treasury’s Temporary Guarantee Program: The fund has entered into a Guarantee Agreement with the United States Department of the Treasury (the “Treasury”) to participate in the Treasury’s Temporary Guarantee Program for Money Market Funds (the “Program”).
Under the Program, the Treasury guarantees the share price of shares of the fund held by shareholders as of September 19, 2008 at $1.00 per share if the fund’s net asset value per share falls below $0.995 (a “Guarantee Event”) and the fund liquidates. Recovery under the Program is subject to certain conditions and limitations.
Fund shares acquired by investors after September 19, 2008 that increase the number of fund shares the investor held at the close of business on September 19, 2008 are not eligible for protection under the Program. In addition, fund shares acquired by investors who did not hold fund shares at the close of business on September 19, 2008 are not eligible for protection under the Program.
The Program, which was originally set to expire on December 18, 2008, has been extended by the Treasury until April 30, 2009, after which the Secretary of theTreasury will review the need for, and terms of, the Program. Participation in the initial term and the extended period of the Program required a payment to the Treasury in the amount of .01% and .015%, respectively, of the fund’s shares outstand-
The Fund 29
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
ing as of September 19, 2008 (valued at $1.00 per share).This expense is being borne by the fund without regard to any expense limitation currently in effect.
NOTE 2—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is computed at the annual rate of .50% of the value of the fund’s average daily net assets and is payable monthly.
The Manager has undertaken to reimburse expenses in the event that current yields drop below a certain level.This undertaking is voluntary and not contractual and may be terminated at any time. During the period ended November 30, 2008, there was no expense reimbursement pursuant to the undertaking.
(b) Under the Shareholder Services Plan, the fund reimburses the Distributor an amount not to exceed an annual rate of ..25% of the value of the fund’s average daily net assets for certain allocated expenses of providing personal services and/or maintaining shareholder accounts.The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. During the period ended November 30, 2008, the fund was charged $120,588 pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended November 30, 2008, the fund was charged $57,413 pursuant to the transfer agency agreement.
30
The fund compensates The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended November 30, 2008, the fund was charged $4,749 pursuant to the cash management agreement.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended November 30, 2008, the fund was charged $49,239 pursuant to the custody agreement.
During the period ended November 30, 2008, the fund was charged $2,959 for services performed by the Chief Compliance Officer.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $323,166, chief compliance officer fees $2,466 and transfer agency per account fees $19,000.
(c) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
The Fund 31
INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited)
At a Meeting of the fund’s Board of Directors held on November 10-11, 2008, the Board considered the re-approval for an annual period of the fund’s Management Agreement,pursuant to which the Manager provides the fund with investment advisory and administrative services.The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of the Manager.
Analysis of Nature, Extent, and Quality of Services Provided to the Fund. The Board members considered information previously provided to them in a presentation from representatives of the Manager regarding services provided to the fund and other funds in the Dreyfus complex, and representatives of the Manager confirmed that there had been no material changes in the information. The Board also discussed the nature, extent, and quality of the services provided to the fund pursuant to the fund’s Management Agreement. The Manager’s representatives reviewed the fund’s distribution of accounts and the relationships the Manager has with various intermediaries and the different needs of each.The Manager’s representatives noted the diversity of distribution of the fund as well as among the funds in the Dreyfus fund complex, and the Manager’s corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each of the fund’s distribution channels. The Board also reviewed the number of shareholder accounts in the fund, as well as the fund’s asset size.
The Board members also considered the Manager’s research and portfolio management capabilities and that the Manager also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board members also considered the Manager’s extensive administrative, accounting, and compliance infrastructure.
Comparative Analysis of the Fund’s Management Fee and Expense Ratio and Performance. The Board members reviewed reports prepared by Lipper, Inc., an independent provider of investment company
32
data, which included information comparing the fund’s management fee and expense ratio with a group of comparable funds (the “Expense Group”) and with a broader group of funds (the “Expense Universe”) that were selected by Lipper. Included in the fund’s reports were comparisons of contractual and actual management fee rates and total operating expenses.
The Board members also reviewed the reports prepared by Lipper that presented the fund’s performance as well as comparisons of total return performance for the fund to the same group of funds as the Expense Group (the “Performance Group”) and to a group of funds that was broader than the Expense Universe (the “Performance Universe”) that also were selected by Lipper, all for various periods ended August 31, 2008. The Manager previously had furnished the Board with a description of the methodology Lipper used to select the fund’s Expense Group and Expense Universe, and Performance Group and Performance Universe.
The Board reviewed the results of the Expense Group and Expense Universe comparisons that were prepared based on financial statements currently available to Lipper as of August 31, 2008.The Board reviewed the range of management fees and expense ratios of the funds in the Expense Group and Expense Universe, and noted that the fund’s contractual management fee was higher than the Expense Group median and that the fund’s actual management fee was higher than the Expense Group and Expense Universe medians. The Board also noted that the fund’s total expense ratio was lower than the Expense Group and Expense Universe medians.
With respect to the fund’s performance, the Board noted that the fund achieved first or second quartile (the first quartile being the highest performance ranking group) total return rankings in the Performance Group and Performance Universe for each reported time periods up to 10 years.
The Fund 33
INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued)
Representatives of the Manager reviewed with the Board members the fees paid to the Manager or its affiliates by mutual funds managed by the Manager or its affiliates that were reported in the same Lipper category as the fund (the “Similar Funds”), and explained the nature of the Similar Funds and any differences, from the Manager’s perspective, in providing services to the Similar Funds as compared to the fund.The Manager’s representatives also reviewed the costs associated with distribution through intermediaries. The Board analyzed differences in fees paid to the Manager and discussed the relationship of the management fees paid in light of the services provided. The Board members considered the relevance of the fee information provided for the Similar Funds to evaluate the appropriateness and reasonableness of the fund’s management fee. The Manager’s representatives noted that there were no similarly managed institutional separate accounts or wrap fee accounts managed by the Manager or its affiliates with similar investment objectives, policies, and strategies as the fund.
Analysis of Profitability and Economies of Scale. The Manager’s representatives reviewed the dollar amount of expenses allocated and profit received by the Manager for the fund and the method used to determine such expenses and profit. The Board considered information, previously provided and discussed, prepared by an independent consulting firm regarding the Manager’s approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus mutual fund complex. The Board also considered that the methodology also had been reviewed by an independent registered public accounting firm which, like the consultant, found the methodology to be reasonable. The consulting firm also analyzed where any economies of scale might emerge in connection with the management of the fund.The Board members evaluated the profitability analysis in light of the relevant circumstances for the fund, including the change in the fund’s asset size from the prior year, and the extent to which economies of scale would be realized if the fund grows and whether
34
fee levels reflect these economies of scale for the benefit of fund share-holders.The Board members also considered potential benefits to the Manager from acting as investment adviser to the fund and noted that there were no soft dollar arrangements in effect with respect to trading the fund’s portfolio.
It was noted that the Board members should consider the Manager’s profitability with respect to the fund as part of their evaluation of whether the fees under the Management Agreement bear a reasonable relationship to the mix of services provided by the Manager, including the nature, extent, and quality of such services and that a discussion of economies of scale is predicated on increasing assets and that, if a fund’s assets had been decreasing, the possibility that the Manager may have realized any economies of scale would be less. It was noted that the profitability percentage for managing the fund was within the range determined by appropriate court cases to be reasonable given the services rendered and that the profitability percentage for managing the fund was reasonable given the generally superior service levels provided.
At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to continuation of the fund’s Management Agreement. Based on the discussions and considerations as described above, the Board reached the following conclusions and determinations.
- The Board concluded that the nature, extent, and quality of the ser- vices provided by the Manager are adequate and appropriate.
- The Board was satisfied with the fund’s performance.
- The Board concluded that the fee paid to the Manager by the fund was reasonable in light of the services provided, comparative perfor- mance and expense and management fee information, costs of the services provided and profits to be realized and benefits derived or to be derived by the Manager from its relationship with the fund.
The Fund 35
INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE
FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued) |
- The Board determined that the economies of scale which may accrue to the Manager and its affiliates in connection with the management of the fund had been adequately considered by the Manager in con- nection with the management fee rate charged to the fund, and that, to the extent in the future it were to be determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.
The Board members considered these conclusions and determinations, along with the information received on a routine and regular basis throughout the year, and, without any one factor being dispositive, the Board determined that re-approval of the fund’s Management Agreement was in the best interests of the fund and its shareholders.
36
| Item 2. | | Code of Ethics. |
| | | Not applicable. |
| Item 3. | | Audit Committee Financial Expert. |
| | | Not applicable. |
| Item 4. | | Principal Accountant Fees and Services. |
| | | Not applicable. |
| Item 5. | | Audit Committee of Listed Registrants. |
| | | Not applicable. |
| Item 6. | | Schedule of Investments. |
| (a) | | Not applicable. |
| Item 7. | | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management |
| | | Investment Companies. |
| | | Not applicable. |
| Item 8. | | Portfolio Managers of Closed-End Management Investment Companies. |
| | | Not applicable. |
| Item 9. | | Purchases of Equity Securities by Closed-End Management Investment Companies and |
| | | Affiliated Purchasers. |
| | | Not applicable. |
| Item 10. | | Submission of Matters to a Vote of Security Holders. |
The Registrant has a Nominating Committee (the "Committee"), which is responsible for selecting and nominating persons for election or appointment by the Registrant's Board as Board members. The Committee has adopted a Nominating Committee Charter (the "Charter"). Pursuant to the Charter, the Committee will consider recommendations for nominees from shareholders submitted to the Secretary of the Registrant, c/o The Dreyfus Corporation Legal Department, 200 Park Avenue, 8th Floor East, New York, New York 10166. A nomination submission must include information regarding the recommended nominee as specified in the Charter. This information includes all information relating to a recommended nominee that is required to be disclosed in solicitations or proxy statements for the election of Board members, as well as information sufficient to evaluate the factors to be considered by the Committee, including character and integrity, business and professional experience, and whether the person has the ability to apply sound and independent business judgment and would act in the interests of the Registrant and its shareholders. Nomination submissions are required to be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected by the shareholders, and such additional information must be provided regarding the recommended nominee as reasonably requested by the Committee.
| Item 11. | | Controls and Procedures. |
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
(a)(1) Not applicable.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dreyfus Municipal Money Market Fund, Inc.
| By: | | /s/ J. David Officer |
| | | |
| | | J. David Officer |
| | President |
| |
| Date: | | January 26, 2009 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By: | | /s/ J. David Officer |
| | | |
| | | J. David Officer |
| | President |
| | |
| Date: | | January 26, 2009 |
|
| |
| By: | | /s/ James Windels |
| | |
|
| | | James Windels |
| | Treasurer |
| |
| Date: | | January 26, 2009 |
EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)
