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: | 11/30/09 |
| |
| Item 1. | Reports to Stockholders. |
|
| Dreyfus |
| Municipal Money |
| Market Fund, Inc. |
SEMIANNUAL REPORT November 30, 2009
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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.
| | Contents |
| | THE FUND |
| 2 | A Letter from the Chairman and CEO |
| 3 | Discussion of Fund Performance |
| 6 | Understanding Your Fund’s Expenses |
| 6 | Comparing Your Fund’s Expenses With Those of Other Funds |
| 7 | Statement of Investments |
| 16 | Statement of Assets and Liabilities |
| 17 | Statement of Operations |
| 18 | Statement of Changes in Net Assets |
| 19 | Financial Highlights |
| 20 | Notes to Financial Statements |
| 27 | Information About the Review and Approval of the Fund’s Management Agreement |
| | FOR MORE INFORMATION |
| | Back Cover |
Dreyfus Municipal
Money Market Fund, Inc.
The Fund
A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Municipal Money Market Fund, Inc., covering the six-month period from June 1, 2009, through November 30, 2009.
Evidence has continued to accumulate that the U.S. recession is over and sustained economic recoveries have begun worldwide. U.S. government liquidity-support and stimulus programs, along with an aggressively accommodative monetary policy have so far succeeded in calming the financial crisis, ending the recession and sparking the beginning of a global expansion. As 2009 draws to a close, we expect a continuation of the current sustained rallies among fixed-income and equity asset classes, along with low yields and outflows of money fund assets into these other asset classes.
While money market yields are unlikely to improve anytime soon, we continue to stress the importance of both municipal and taxable money market mutual funds as a haven of price stability and liquidity for risk-averse investors. Is your cash allocation properly positioned for the next phase of this economic cycle? Talk to your financial advisor, who can help you make that determination and prepare for the challenges and opportunities that lie ahead.
For information about how the fund performed during the reporting period, as well as market perspectives, we have provided a Discussion of Fund Performance.
Thank you for your continued confidence and support.
Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
December 15, 2009
2
DISCUSSION OF FUND PERFORMANCE
For the period of June 1, 2008, through November 30, 2009, as provided by Colleen Meehan, Senior Portfolio Manager
Fund and Market Performance Overview
For the six-month period ended November 30, 2009, Dreyfus Municipal Money Market Fund produced an annualized yield of 0.08%. Taking into account the effects of compounding, the fund produced an annualized effective yield of 0.08%.1
Yields of tax-exempt money market instruments remained near historically low levels during the reporting period as the Federal Reserve Board (the “Fed”) maintained an aggressively accommodative monetary policy to combat a recession and 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 limited 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
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued)
try to maintain an average maturity that reflects our view of short-term interest-rate trends and future supply-and-demand considerations.
Recession, Supply-and-Demand Dynamics Kept Yields Low
Economic conditions had deteriorated sharply in the months prior to the start of the reporting period due to weakness in housing markets, rising unemployment and declining consumer confidence. In addition, the failures of major financial institutions sparked a global financial crisis that punished dealers and insurers of municipal securities.These developments caused dislocations among a wide variety of financial assets, including some money market instruments.
In response, the Fed had reduced the overnight federal funds rate in December 2008 to an unprecedented low range of 0% to 0.25%.The U.S. Department of the Treasury also had initiated several remedial measures, including the Temporary Guarantee Program for Money Market Funds, which remained in effect through September 18, 2009.
Although the financial crisis and recession showed signs of easing when the reporting period began, tighter lending restrictions and financial industry consolidation continued to limit the available supply of variable-rate demand notes and tender option bonds, effectively increasing funding costs for municipalities in the short-term market. Consequently, more issuers instead have issued longer-term bonds, including taxable securities through the government-supported Build America Bonds program. Meanwhile, demand for tax-exempt money market securities has remained robust from individuals concerned about tax increases. Due to competitive yields compared with taxable money market instruments, the tax-exempt money markets also have seen rising participation among institutional investors. The combination of limited supply and robust demand put additional downward pressure on already low tax-exempt money market yields.
Finally, many states and municipalities have continued to face weak housing markets, rising unemployment, reduced tax collections and intensifying demands on social services programs.The resulting credit deterioration has further limited the supply of instruments meeting our investment criteria.
4
In-House Research Supported Credit Quality
We focused throughout the reporting period on direct, high-quality municipal obligations. Our credit analysts conduct in-depth, independent research into the fiscal health of the issuers we consider, a process that helped the fund avoid some of the credit-related problems affecting some other money market funds during the downturn. We favored instruments—including commercial paper and municipal notes with maturities of six months or less—backed by pledged tax appropriations or revenues from facilities providing essential services.We generally shied away from instruments issued by entities that depend heavily on state aid.
Compared to historical standards, most money market funds maintained short weighted average maturities in the uncertain market environment, and the fund was no exception. Because yield differences have remained relatively narrow along the market’s maturity range, this conservative strategy did not adversly affect the fund’s performance.
Safety and Liquidity Are Paramount
Despite the apparent onset of an economic recovery, we believe the prudent course continues to be a conservative credit selection strategy with an emphasis on preservation of capital and liquidity.The Fed has repeatedly indicated that it is likely to keep short-term interest rates near historical lows for an extended period, suggesting that money market yields are unlikely to rise significantly any time soon.
December 15, 2009
| |
| | 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.Yields provided for the fund reflect the absorbtion of certain fund expenses by The |
| | Dreyfus Corporation pursuant to a voluntary undertaking that may be extended, terminated or |
| | modified at any time. Had these expenses not been absorbed, the fund would have produced a |
| | yield of 0.02% and an effective yield of 0.02%. |
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, 2009 to November 30, 2009. 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, 2009 |
| |
| Expenses paid per $1,000† | $2.76 |
| Ending value (after expenses) | $1,000.40 |
|
| 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, 2009 |
| |
| Expenses paid per $1,000† | $2.79 |
| Ending value (after expenses) | $1,022.31 |
|
| † Expenses are equal to the fund’s annualized expense ratio of .55%, multiplied by the average account value over the |
| period, multiplied by 183/365 (to reflect the one-half year period). |
6
|
| STATEMENT OF INVESTMENTS |
| November 30, 2009 (Unaudited) |
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments—99.9% | Rate (%) | Date | Amount ($) | | Value ($) |
| Arizona—2.9% | | | | | |
| Salt River Project Agricultural | | | | | |
| Improvement and Power | | | | | |
| District, CP (Salt River | | | | | |
| Project) (Liquidity Facility: | | | | | |
| Bank of America, Citibank NA, | | | | | |
| JPMorgan Chase Bank and Wells | | | | | |
| Fargo Bank) | 0.42 | 1/15/10 | 16,000,000 | | 16,000,000 |
| California—.9% | | | | | |
| California Statewide Communities | | | | | |
| Development Authority, | | | | | |
| Revenue, CP (Kaiser Permanente) | 0.37 | 12/10/09 | 5,000,000 | | 5,000,000 |
| Colorado—4.8% | | | | | |
| Colorado Educational and Cultural | | | | | |
| Facilities Authority, Student | | | | | |
| Housing Revenue (Fuller | | | | | |
| Theological Seminary Project) | | | | | |
| (LOC; Key Bank) | 0.60 | 12/7/09 | 9,600,000 | a | 9,600,000 |
| Denver City and County, | | | | | |
| Airport System Revenue (LOC; | | | | | |
| Landesbank Baden-Wurttemberg) | 0.32 | 12/7/09 | 16,500,000 | a | 16,500,000 |
| Connecticut—2.8% | | | | | |
| Connecticut, | | | | | |
| GO Notes, BAN | 2.00 | 4/28/10 | 10,000,000 | | 10,065,764 |
| New Haven, | | | | | |
| GO Notes, BAN | 1.25 | 2/15/10 | 5,000,000 | | 5,004,084 |
| Delaware—1.2% | | | | | |
| Delaware Economic Development | | | | | |
| Authority, MFHR (School House | | | | | |
| Project) (LOC; HSBC Bank USA) | 0.45 | 12/7/09 | 6,500,000 | a | 6,500,000 |
| District of Columbia—8.5% | | | | | |
| Anacostia Waterfront Corporation, | | | | | |
| PILOT Revenue (Merlots | | | | | |
| Program) (Liquidity Facility; | | | | | |
| Wachovia Bank and LOC; | | | | | |
| Wachovia Bank) | 0.23 | 12/7/09 | 13,890,000 | a,b | 13,890,000 |
| District of Columbia, | | | | | |
| Enterprise Zone Revenue | | | | | |
| (Trigen-Pepco Energy Services, | | | | | |
| LLC Issue) (LOC; M&T Bank) | 0.37 | 12/7/09 | 9,125,000 | a | 9,125,000 |
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, | | | | | |
| Revenue (American Society of | | | | | |
| Hematology Issue) (LOC; | | | | | |
| SunTrust Bank) | 0.40 | 12/7/09 | 6,600,000 | a | 6,600,000 |
| District of Columbia, | | | | | |
| Revenue, CP (National Academy | | | | | |
| of Sciences) (LOC; Bank of America) | 0.43 | 12/9/09 | 10,000,000 | | 10,000,000 |
| Metropolitan Washington Airports | | | | | |
| Authority, Airport System | | | | | |
| Revenue (Liquidity Facility; | | | | | |
| Landesbank Baden-Wurttemberg) | 0.45 | 12/7/09 | 6,000,000 | a | 6,000,000 |
| Florida—18.9% | | | | | |
| Alachua Housing Finance Authority, | | | | | |
| MFHR (Edenwood Park Project) | | | | | |
| (Liquidity Facility; FHLMC and | | | | | |
| LOC; FHLMC) | 0.55 | 12/7/09 | 3,245,000 | a,b | 3,245,000 |
| Broward County Housing Finance | | | | | |
| Authority, MFHR (Cypress Grove | | | | | |
| Apartments Project) (LOC; FNMA) | 0.34 | 12/7/09 | 20,000,000 | a | 20,000,000 |
| Capital Trust Agency, | | | | | |
| MFHR (Brittany Bay Apartments | | | | | |
| —Waterman’s Crossing) | | | | | |
| (Liquidity Facility; FHLMC and | | | | | |
| LOC; FHLMC) | 0.40 | 12/7/09 | 25,840,000 | a,b | 25,840,000 |
| Dade County Industrial Development | | | | | |
| Authority, Exempt Facilities Revenue, | | | | | |
| Refunding (Florida Power and | | | | | |
| Light Company Projects) | 0.22 | 12/1/09 | 6,200,000 | a | 6,200,000 |
| Florida Finance Housing | | | | | |
| Corporation, MFHR (Falls of | | | | | |
| Venice Project) (Liquidity | | | | | |
| Facility; FNMA and LOC; FNMA) | 0.37 | 12/7/09 | 3,955,000 | a | 3,955,000 |
| Greater Orlando Aviation | | | | | |
| Authority, Airport Facilities | | | | | |
| Revenue, CP (LOC: Bayerische | | | | | |
| Landsbank, State Street Bank | | | | | |
| and Trust Co. and Westdeutsche | | | | | |
| Landesbank) | 0.88 | 12/2/09 | 10,938,000 | | 10,938,000 |
| Hillsborough County Aviation | | | | | |
| Authority, Revenue, CP (LOC; | | | | | |
| Landesbank Baden-Wurttemberg) | 0.38 | 12/15/09 | 3,625,000 | | 3,625,000 |
8
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Florida (continued) | | | | | |
| Hillsborough County Industrial | | | | | |
| Development Authority, IDR | | | | | |
| (Seaboard Tampa Terminals | | | | | |
| Venture Project) (LOC; | | | | | |
| Wachovia Bank) | 0.60 | 12/7/09 | 4,000,000 | a | 4,000,000 |
| Jacksonville Economic Development | | | | | |
| Commission, IDR (Load King | | | | | |
| Manufacturing Company Project) | | | | | |
| (LOC; SouthTrust Bank) | 0.75 | 12/7/09 | 680,000 | a | 680,000 |
| Kissimmee Utility Authority, | | | | | |
| CP (Liquidity Facility; | | | | | |
| JPMorgan Chase Bank) | 0.37 | 4/8/10 | 13,200,000 | | 13,200,000 |
| Manatee County School District, | | | | | |
| GO Notes, TAN | 1.00 | 5/1/10 | 5,000,000 | | 5,012,406 |
| Orange County Housing Finance | | | | | |
| Authority, MFHR (Windsor Pines | | | | | |
| Project) (LOC; Bank of America) | 0.36 | 12/7/09 | 1,300,000 | a | 1,300,000 |
| Polk County Industrial Development | | | | | |
| Authority, IDR (Florida | | | | | |
| Treatt, Inc. Project) (LOC; | | | | | |
| Bank of America) | 0.50 | 12/7/09 | 3,090,000 | a | 3,090,000 |
| Riviera Beach, | | | | | |
| IDR (K. Rain Manufacturing | | | | | |
| Project) (LOC; SunTrust Bank) | 0.60 | 12/7/09 | 1,595,000 | a | 1,595,000 |
| Georgia—4.0% | | | | | |
| Atlanta, | | | | | |
| General Fund TAN | 1.75 | 12/31/09 | 10,000,000 | | 10,010,192 |
| Fulton County, | | | | | |
| General Fund TAN | 1.00 | 12/31/09 | 12,000,000 | | 12,006,724 |
| Illinois—3.2% | | | | | |
| Oak Forest, | | | | | |
| Revenue (Homewood Pool—South | | | | | |
| Suburban Mayors and Managers | | | | | |
| Association Program) (LOC; | | | | | |
| Fifth Third Bank) | 0.69 | 12/7/09 | 10,000,000 | a | 10,000,000 |
| Southwestern Illinois Development | | | | | |
| Authority, Solid Waste | | | | | |
| Disposal Facilities Revenue | | | | | |
| (Center Ethanol Company, LLC | | | | | |
| Project) (LOC; Wells Fargo Bank) | 0.50 | 12/7/09 | 7,370,000 | a | 7,370,000 |
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Indiana—5.7% | | | | | |
| Indiana Bond Bank, | | | | | |
| Advance Funding Program Notes | 2.00 | 1/5/10 | 4,000,000 | | 4,006,069 |
| Indiana Health and Educational | | | | | |
| Facility Financing Authority, | | | | | |
| Educational Facilities Revenue | | | | | |
| (University of Evansville | | | | | |
| Project) (LOC; Fifth Third Bank) | 0.69 | 12/7/09 | 17,000,000 | a | 17,000,000 |
| Indiana Health and Educational | | | | | |
| Facility Financing Authority, | | | | | |
| Revenue (Ascension Health | | | | | |
| Senior Credit Group) (Liquidity | | | | | |
| Facility; Citibank NA) | 0.25 | 12/7/09 | 10,120,000 | a,b | 10,120,000 |
| Iowa—1.1% | | | | | |
| Iowa Finance Authority, | | | | | |
| SWDR (MidAmerican | | | | | |
| Energy Project) | 0.50 | 12/7/09 | 6,000,000 | a | 6,000,000 |
| Louisiana—.9% | | | | | |
| Ascension Parish, | | | | | |
| Revenue, CP (BASF AG) | 0.65 | 2/16/10 | 5,000,000 | | 5,000,000 |
| Maryland—3.0% | | | | | |
| Baltimore County, | | | | | |
| Revenue, Refunding | | | | | |
| (Shade Tree Trace | | | | | |
| Apartments Facility) | | | | | |
| (LOC; M&T Bank) | 0.33 | 12/7/09 | 1,115,000 | a | 1,115,000 |
| Montgomery County, | | | | | |
| CP (Liquidity Facility; | | | | | |
| JPMorgan Chase Bank) | 0.40 | 1/11/10 | 10,000,000 | | 10,000,000 |
| Montgomery County, | | | | | |
| EDR (Riderwood Village, Inc. | | | | | |
| Project) (LOC; M&T Bank) | 0.36 | 12/7/09 | 5,000,000 | a | 5,000,000 |
| Massachusetts—1.8% | | | | | |
| Massachusetts, | | | | | |
| GO Notes, RAN | 2.50 | 4/29/10 | 10,000,000 | | 10,087,971 |
| Michigan—4.0% | | | | | |
| Michigan Hospital Finance | | | | | |
| Authority, Revenue, CP | | | | | |
| (Trinity Health System) | 0.40 | 12/2/09 | 14,000,000 | | 14,000,000 |
| Michigan Hospital Finance | | | | | |
| Authority, Revenue, CP | | | | | |
| (Trinity Health System) | 0.40 | 12/3/09 | 8,000,000 | | 8,000,000 |
10
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Nevada—2.7% | | | | | |
| Las Vegas Valley Water District, | | | | | |
| CP (Liquidity Facility; | | | | | |
| JPMorgan Chase Bank) | 0.40 | 12/10/09 | 15,000,000 | | 15,000,000 |
| New Jersey—.7% | | | | | |
| New Jersey Economic Development | | | | | |
| Authority, School Facilities | | | | | |
| Construction Revenue, Refunding | | | | | |
| (LOC; Dexia Credit Locale) | 0.29 | 12/7/09 | 3,800,000 | a | 3,800,000 |
| New York—7.0% | | | | | |
| Metropolitan Transportation | | | | | |
| Authority, RAN | 2.00 | 12/31/09 | 10,000,000 | | 10,013,155 |
| New York City Housing Development | | | | | |
| Corporation, MFMR (Beekman | | | | | |
| Tower Project) (LOC; RBS | | | | | |
| Citizens NA) | 0.40 | 12/7/09 | 10,000,000 | a | 10,000,000 |
| Port Authority of New York and New | | | | | |
| Jersey, CP (Liquidity | | | | | |
| Facility; Landesbank | | | | | |
| Hessen-Thuringen Girozentrale) | 0.42 | 12/7/09 | 18,260,000 | | 18,260,000 |
| Ohio—1.4% | | | | | |
| Akron, | | | | | |
| Street Improvement Special | | | | | |
| Assessment Notes | 3.50 | 10/1/10 | 1,100,000 | | 1,106,688 |
| Columbus, | | | | | |
| Sewerage System Revenue | | | | | |
| (Putters Program) (Liquidity | | | | | |
| Facility; JPMorgan Chase Bank) | 0.30 | 12/7/09 | 1,400,000 | a,b | 1,400,000 |
| Cuyahoga County, | | | | | |
| IDR (King Nut Project) (LOC; | | | | | |
| National City Bank) | 0.49 | 12/7/09 | 2,585,000 | a | 2,585,000 |
| Cuyahoga County, | | | | | |
| IDR (King Nut Project) (LOC; | | | | | |
| National City Bank) | 0.49 | 12/7/09 | 2,580,000 | a | 2,580,000 |
| Pennsylvania—7.1% | | | | | |
| Berks County Municipal Authority, | | | | | |
| Revenue (The Reading Hospital | | | | | |
| and Medical Center Project) | 0.54 | 1/14/10 | 5,000,000 | | 5,000,000 |
| Franklin County Industrial | | | | | |
| Development Authority, Revenue | | | | | |
| (James and Donna Martin | | | | | |
| Project) (LOC; Wachovia Bank) | 0.49 | 12/7/09 | 1,000,000 | a | 1,000,000 |
The Fund 11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Pennsylvania (continued) | | | | | |
| Horizon Hospital System Authority, | | | | | |
| Senior Health and Housing | | | | | |
| Facilities Revenue (Saint Paul | | | | | |
| Homes Project) (LOC; M&T Bank) | 0.32 | 12/7/09 | 1,700,000 | a | 1,700,000 |
| Montgomery County Higher Education | | | | | |
| and Health Authority, Revenue | | | | | |
| (Pennsylvania Higher Education | | | | | |
| and Health Loan Program) | | | | | |
| (LOC; M&T Bank) | 0.32 | 12/7/09 | 6,055,000 | a | 6,055,000 |
| Pennsylvania Economic Development | | | | | |
| Financing Authority, Revenue | | | | | |
| (Evergreen Community Power | | | | | |
| Facility) (LOC; M&T Bank) | 0.42 | 12/7/09 | 15,000,000 | a | 15,000,000 |
| University of Pittsburgh of the | | | | | |
| Commonwealth System of Higher | | | | | |
| Education, CP | 0.40 | 12/10/09 | 10,000,000 | | 10,000,000 |
| South Carolina—1.5% | | | | | |
| Charleston County School District, | | | | | |
| GO Notes, TAN | 2.00 | 4/1/10 | 8,000,000 | | 8,041,526 |
| Tennessee—6.7% | | | | | |
| Knox County Health, Educational | | | | | |
| and Housing Facility Board, | | | | | |
| Hospital Facilities Revenue | | | | | |
| (Catholic Healthcare Partners) | | | | | |
| (LOC; Landesbank | | | | | |
| Baden-Wurttemberg) | 0.32 | 12/7/09 | 8,000,000 | a | 8,000,000 |
| Sevier County Public Building | | | | | |
| Authority, Local Government | | | | | |
| Public Improvement Revenue | | | | | |
| (LOC; Allied Irish Banks) | 0.36 | 12/7/09 | 5,100,000 | a | 5,100,000 |
| Shelby County Health, Educational | | | | | |
| and Housing Facility Board, | | | | | |
| Revenue (Methodist Le Bonheur | | | | | |
| Healthcare) (Insured; Assured | | | | | |
| Guaranty Municipal Corp. and | | | | | |
| Liquidity Facility; U.S. Bank NA) | 0.25 | 12/7/09 | 10,000,000 | a | 10,000,000 |
| Tennergy Corporation, | | | | | |
| Gas Revenue (Putters Program) | | | | | |
| (Liquidity Facility; JPMorgan | | | | | |
| Chase Bank) | 0.30 | 12/7/09 | 6,790,000 | a,b | 6,790,000 |
12
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Tennessee (continued) | | | | | |
| Tennergy Corporation, | | | | | |
| Gas Revenue (Putters Program) | | | | | |
| (LOC; BNP Paribas) | 0.30 | 12/7/09 | 6,810,000 | a,b | 6,810,000 |
| Texas—2.6% | | | | | |
| Brazos River Harbor Navigation | | | | | |
| District, Environmental | | | | | |
| Facilities Revenue (Merey | | | | | |
| Sweeny, L.P. Project) (LOC; | | | | | |
| JPMorgan Chase Bank) | 0.24 | 12/1/09 | 5,000,000 | a | 5,000,000 |
| Texas, | | | | | |
| TRAN | 2.50 | 8/31/10 | 9,000,000 | | 9,137,738 |
| Virginia—1.8% | | | | | |
| Virginia Commonwealth University | | | | | |
| Health System Authority, General | | | | | |
| Revenue (Medical College of | | | | | |
| Virginia Hospitals) (Liquidity | | | | | |
| Facility; Wachovia Bank) | 0.25 | 12/1/09 | 10,000,000 | a | 10,000,000 |
| Washington—.7% | | | | | |
| Pierce County Economic Development | | | | | |
| Corporation, Industrial | | | | | |
| Revenue (SeaTac Packaging | | | | | |
| Project) (LOC; HSBC Bank USA) | 0.42 | 12/7/09 | 4,060,000 | a | 4,060,000 |
| Wisconsin—.6% | | | | | |
| Wisconsin Rural Water Construction | | | | | |
| Loan Program Commmission, | | | | | |
| Revenue, BAN | 1.50 | 11/15/10 | 3,000,000 | | 3,021,322 |
| Wyoming—3.4% | | | | | |
| Sweetwater County, | | | | | |
| HR (Memorial Hospital Project) | | | | | |
| (LOC; Key Bank) | 0.35 | 12/7/09 | 18,800,000 | a | 18,800,000 |
| |
| Total Investments (cost $544,941,639) | | | 99.9% | | 544,941,639 |
| Cash and Receivables (Net) | | | .1% | | 808,447 |
| Net Assets | | | 100.0% | | 545,750,086 |
|
| a Variable rate demand note—rate shown is the interest rate in effect at November 30, 2009. Maturity date represents |
| the next demand date, or the ultimate maturity date if earlier. |
| b 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, 2009, these |
| securities amounted to $68,095,000 or 12.5% of net assets. |
The Fund 13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
14
| | | | | |
| Summary of Combined Ratings (Unaudited) | |
| |
| Fitch | or | Moody’s | or | Standard & Poor’s | Value (%)† |
| F1+,F1 | | VMIG1,MIG1,P1 | | SP1+,SP1,A1+,A1 | 96.7 |
| AAA,AA,Ac | | Aaa,Aa,Ac | | AAA,AA,Ac | 1.8 |
| Not Ratedd | | Not Ratedd | | Not Ratedd | 1.5 |
| | | | | | 100.0 |
|
| † Based on total investments. |
| c Notes which are not F, MIG and SP rated are represented by bond ratings of the issuers. |
| d Securities which, while not rated by Fitch, Moody’s and Standard & Poor’s, have been determined by the Manager to |
| be of comparable quality to those rated securities in which the fund may invest. |
See notes to financial statements.
The Fund 15
|
| STATEMENT OF ASSETS AND LIABILITIES |
| November 30, 2009 (Unaudited) |
| | |
| | Cost | Value |
| Assets ($): | | |
| Investments in securities—See Statement of Investments | 544,941,639 | 544,941,639 |
| Cash | | 187,080 |
| Interest receivable | | 834,869 |
| Prepaid expenses | | 21,150 |
| | | 545,984,738 |
| Liabilities ($): | | |
| Due to The Dreyfus Corporation and affiliates—Note 2(b) | | 165,105 |
| Accrued expenses | | 69,547 |
| | | 234,652 |
| Net Assets ($) | | 545,750,086 |
| Composition of Net Assets ($): | | |
| Paid-in capital | | 545,769,201 |
| Accumulated net realized gain (loss) on investments | | (19,115) |
| Net Assets ($) | | 545,750,086 |
| Shares Outstanding | | |
| (5 billion shares of $.001 par value Common Stock authorized) | | 547,513,516 |
| Net Asset Value, offering and redemption price per share ($) | | 1.00 |
| |
| See notes to financial statements. | | |
16
|
| STATEMENT OF OPERATIONS |
| Six Months Ended November 30, 2009 (Unaudited) |
| |
| Investment Income ($): | |
| Interest Income | 2,708,713 |
| Expenses: | |
| Management fee—Note 2(a) | 2,134,130 |
| Shareholder servicing costs—Note 2(b) | 186,331 |
| Treasury insurance expense—Note 1(e) | 125,212 |
| Custodian fees—Note 2(b) | 41,546 |
| Directors’ fees and expenses—Note 2(c) | 35,496 |
| Professional fees | 34,855 |
| Registration fees | 25,818 |
| Prospectus and shareholders’ reports | 12,609 |
| Miscellaneous | 18,424 |
| Total Expenses | 2,614,421 |
| Less—reduction in expenses due to undertaking—Note 2(a) | (263,446) |
| Less—reduction in fees due to earnings credits—Note 1(b) | (5,925) |
| Net Expenses | 2,345,050 |
| Investment Income—Net | 363,663 |
| Net Realized Gain (Loss) on Investments—Note 1(b) ($) | 322 |
| Net Increase in Net Assets Resulting from Operations | 363,985 |
| |
| See notes to financial statements. | |
The Fund 17
STATEMENT OF CHANGES IN NET ASSETS
| | |
| | Six Months Ended | |
| | November 30, 2009 | Year Ended |
| | (Unaudited) | May 31, 2009 |
| Operations ($): | | |
| Investment income—net | 363,663 | 12,739,273 |
| Net realized gain (loss) on investments | 322 | (14,398) |
| Net Increase (Decrease) in Net Assets | | |
| Resulting from Operations | 363,985 | 12,724,875 |
| Dividends to Shareholders from ($): | | |
| Investment income—net | (363,663) | (12,739,273) |
| Capital Stock Transactions ($1.00 per share): | | |
| Net proceeds from shares sold | 534,580,600 | 1,827,450,280 |
| Dividends reinvested | 172,848 | 6,186,128 |
| Cost of shares redeemed | (961,886,866) | (1,885,854,772) |
| Increase (Decrease) in Net Assets | | |
| from Capital Stock Transactions | (427,133,418) | (52,218,364) |
| Total Increase (Decrease) in Net Assets | (427,133,096) | (52,232,762) |
| Net Assets ($): | | |
| Beginning of Period | 972,883,182 | 1,025,115,944 |
| End of Period | 545,750,086 | 972,883,182 |
| |
| See notes to financial statements. | | |
18
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, 2009 | | Year Ended May 31, | |
| | (Unaudited) | 2009 | 2008 | 2007 | 2006 | 2005 |
| Per Share Data ($): | | | | | | |
| Net asset value, | | | | | | |
| beginning of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
| Investment Operations: | | | | | | |
| Investment income—net | .000a | .012 | .028 | .031 | .023 | .012 |
| Distributions: | | | | | | |
| Dividends from | | | | | | |
| investment income—net | (.000)a | (.012) | (.028) | (.031) | (.023) | (.012) |
| Net asset value, end of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
| Total Return (%) | .08b | 1.23 | 2.84 | 3.14 | 2.37 | 1.17 |
| Ratios/Supplemental Data (%): | | | | | |
| Ratio of total expenses | | | | | | |
| to average net assets | .61b | .61 | .59 | .59 | .59 | .58 |
| Ratio of net expenses | | | | | | |
| to average net assets | .55b | .61c | .58 | .58 | .58 | .58c |
| Ratio of net investment income | | | | | |
| to average net assets | .09b | 1.24 | 2.74 | 3.10 | 2.34 | 1.16 |
| Net Assets, end of period | | | | | | |
| ($ x 1,000) | 545,750 | 972,883 | 1,025,116 | 779,746 | 972,745 | 848,534 |
| |
| 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.
The Fund 19
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.
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 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) has become the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The ASC has superseded all existing non-SEC accounting and reporting standards. The fund’s financial statements are prepared in accordance with GAAP, 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.
20
(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 fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for
identical investments.
Level 2—other significant observable inputs (including quoted
prices for similar investments, 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
The Fund 21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
cost, in accordance with rules under the Act. Generally, amortized cost 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, 2009 in valuing the fund’s investments:
| |
| | Short-Term |
| Valuation Inputs | Investments ($)† |
| Level 1—Unadjusted Quoted Prices | — |
| Level 2—Other Significant Observable Inputs | 544,941,639 |
| Level 3—Significant Unobservable Inputs | — |
| Total | 544,941,639 |
| |
| † | See Statement of Investments for additional detailed categorizations. |
(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.
The fund has arrangements with the custodian and cash management bank 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.
(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.
22
(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.
As of and during the period ended November 30, 2009, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain 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, 2009 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The fund has an unused capital loss carryover of $19,437 available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to May 31, 2009. If not applied, $5,039 of the carryover expires in fiscal 2016 and $14,398 expires in fiscal 2017.
The tax character of distributions paid to shareholders during the fiscal year ended May 31, 2009 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, 2009, 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 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”).
The Fund 23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Under the Program, the Treasury guaranteed 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 fell below $0.995 (a “Guarantee Event”) and the fund liquidated. Recovery under the Program was subject to certain conditions and limitations.
Fund shares acquired by investors after September 19, 2008 that increased the number of fund shares the investor held at the close of business on September 19, 2008 were 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 were not eligible for protection under the Program.
The Program, which was originally set to expire on December 18, 2008, was initially extended by the Treasury until April 30, 2009 and had been further extended by the Treasury until September 18, 2009, at which time the Secretary of the Treasury terminated the Program.As such, the fund is no longer eligible for protection under the Program. Participation in the initial term and the two extended periods of the Program required payments to the Treasury in the amounts of .01%, .015% and .015%, respectively, of the fund’s shares outstanding as of September 19, 2008 (valued at $1.00 per share).This expense was borne by the fund without regard to any expense limitation 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.The reduction in expenses, pursuant to the undertaking, amounted to $263,446 during the period ended November 30, 2009.
24
(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, 2009, the fund was charged $105,349 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, 2009, the fund was charged $49,946 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.
The fund compensates The Bank of NewYork 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, 2009, the fund was charged $5,925 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations.These fees were offset by earnings credits pursuant to the cash management agreement.
The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended November 30, 2009, the fund was charged $41,546 pursuant to the custody agreement.
During the period ended November 30, 2009, the fund was charged $3,341 for services performed by the Chief Compliance Officer.
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $230,408, custodian fees $21,553, chief compliance officer fees $4,454 and transfer agency per account fees $17,000, which are offset against an expense reimbursement currently in effect in the amount of $108,310.
(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.
NOTE 3—Subsequent Events Evaluation:
Dreyfus has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.
26
|
| 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 9-10, 2009, 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 co rresponding 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.
The Fund 27
|
| INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE |
| FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued) |
Comparative Analysis of the Fund’s Management Fee and Expense Ratio and Performance. The Board members reviewed reports prepared by Lipper, Inc. (“Lipper”), an independent provider of investment company 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 September 30, 2009. 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 September 30, 2009. 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 at the Expense Group median and higher than the Expense Universe median.
With respect to the fund’s performance, the Board noted that the fund achieved first or second quartile (the first quartile being the highest
28
performance ranking group) total return rankings in the Performance Group and Performance Universe for each reported time periods up to 10 years.
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 sim ilarly 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
The Fund 29
|
| INFORMATION ABOUT THE REVIEW AND APPROVAL OF THE |
| FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued) |
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 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.
30
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 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.
The Fund 31
For More Information
Ticker Symbol: DTEXX
Telephone 1-800-645-6561
Mail The Dreyfus Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 E-mail Send your request to info@dreyfus.com Internet Information can be viewed online or downloaded at: http://www.dreyfus.com
The fund will disclose daily, on www.dreyfus.com, the fund’s complete schedule of holdings as of the end of the previous business day. The schedule of holdings will remain on the website until the fund files its Form N-Q or Form N-CSR for the period that includes the date of the posted holdings.
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund's Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Information regarding how the fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 is available on the SEC’s website at http://www.sec.gov and without charge, upon request, by calling 1-800-645-6561.
| |
| 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. | 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. [CLOSED END FUNDS ONLY] |
| Item 10. | Submission of Matters to a Vote of Security Holders. |
| | There have been no material changes to the procedures applicable to Item 10. |
| 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.
Item 12. Exhibits.
(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.
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/ Bradley J. Skapyak |
| | Bradley J. Skapyak, |
| | President |
| |
| Date: | January 19, 2010 |
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/ Bradley J. Skapyak |
| | Bradley J. Skapyak, |
| | President |
| |
| Date: | January 19, 2010 |
| |
| By: | /s/ James Windels |
| James Windels, |
| | Treasurer |
| |
| Date: | January 19, 2010 |
(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)
