| | |
| | UNITED STATES | |
| SECURITIES AND EXCHANGE COMMISSION |
| | Washington, D.C. 20549 | |
| |
| |
| | FORM N-CSR | |
| |
| 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: | 5/31/10 | |
FORM N-CSR
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 |
| 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 |
| 17 | Statement of Assets and Liabilities |
| 18 | Statement of Operations |
| 19 | Statement of Changes in Net Assets |
| 20 | Financial Highlights |
| 21 | Notes to Financial Statements |
| 28 | Report of Independent Registered Public Accounting Firm |
| 29 | Important Tax Information |
| 30 | Board Members Information |
| 33 | Officers of the Fund |
| | 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 annual report for Dreyfus Municipal Money Market Fund, Inc., covering the 12-month period from June 1, 2009, through May 31, 2010.
Psychology historically has played an important role in how investors—especially individual investors—perceive the financial markets and make asset allocation decisions. Unlike the purely rational investor who, in an ideal world, would seek investments that potentially can deliver the best risk/return characteristics, the everyday investor typically has been influenced by emotions. Currently, investors’ emotions appear to be deeply divided, with a large number still seeking low risk investments (such as cash instruments), and others favoring higher risk investments (such as smaller-cap and emerging market stocks). Meanwhile, investment classes in the middle of the risk spectrum seemingly have been largely avoided.
It is important to note that investor sentiment often lags the economic cycle.That’s why we continue to stress the importance of a long-term, well balanced asset allocation strategy that can help cushion the volatility produced by the emotional swings of the financial markets. If you have not revisited your investment portfolio recently, we urge you to speak with your financial advisor about taking advantage of long-term market fundamentals rather than remaining susceptible to the effects of emotional reactions to short-term developments.
For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
Thank you for your continued confidence and support.
Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
June 15, 2010
2
DISCUSSION OF FUND PERFORMANCE
For the period of June 1, 2009, through May 31, 2010, as provided by Colleen Meehan, Senior Portfolio Manager
Fund and Market Performance Overview
For the 12-month period ended May 31, 2010, Dreyfus Municipal Money Market Fund produced a yield of 0.075%. Taking into account the effects of compounding, the fund produced an effective yield of 0.075%.1
With the overnight federal funds rate remaining unchanged in a range between 0.00% and 0.25% throughout the reporting period, yields of tax-exempt money market instruments stayed at historically low levels. Supply-and-demand factors also contributed to low yields.
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.
Money Market Yields Hovered Near Historical Lows
The reporting period began near the start of an economic recovery: after four consecutive quarters of contraction, U.S. GDP returned to growth during the third quarter of 2009.Although unemployment has remained high, manufacturing activity has rebounded, helping to bolster confidence among consumers, businesses and investors. In addition, credit markets thawed in response to massive government intervention, including several programs that ended during the reporting period.
Still, the economic rebound so far has been milder than most previous recoveries, and inflationary pressures have been negligible. Indeed, new developments later in the reporting period, including turmoil in European debt markets, added to ongoing economic concerns. In light of these challenges,the Federal Reserve Board (the“Fed”) left short-term interest rates unchanged.
In the municipal securities market, tighter lending restrictions and credit-rating downgrades contributed to a decrease in the supply of variable-rate demand notes and tender option bonds. Instead, many issuers turned to longer-term bonds, including taxable securities through the federally subsidized Build America Bonds program.These factors effectively limited the available supply of municipal money market instruments. Meanwhile, demand for tax-exempt money market instruments remained robust, putting additional downward pressure on already low tax-exempt money market yields.
Finally, most states and municipalities have continued to face fiscal challenges stemming from lower-than-projected tax receipts and greater demand for services.The resulting credit deterioration has further limited the supply of instruments meeting our investment criteria.
In-House Research Supported Credit Quality
We have proceeded cautiously in this challenging environment. The in-depth, independent research conducted by our credit analysts into the fiscal health of the issuers we consider led us to focus on direct, high-quality municipal obligations during the reporting period. We
4
favored instruments 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.
With interest rates near historical lows, municipal money market funds generally have maintained short weighted average maturities compared to historical norms.The fund was no exception, as we set its weighted average maturity in a range that was roughly in line with industry averages. In addition, we prepared the fund for new government regulations that took effect during the reporting period, including a reduction in the fund’s maximum allowable weighted average maturity from 90 days to 60 days.
Safety and Liquidity Remain Paramount
The Fed has repeatedly indicated that it is likely to keep short-term interest rates near historical lows for an extended period.Therefore, we believe the prudent course continues to be a conservative credit selection strategy with an emphasis on preservation of capital and liquidity.
However, we expect the supply of newly issued tax-exempt money market instruments to trend higher in the months ahead, which could support higher yields.We also are mindful that, when the Fed eventually begins to raise the federal funds rate, a relatively defensive maturity-management strategy may enable the fund to capture higher yields more quickly as they become available.
June 15, 2010
| |
| | 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. |
| | Short-term corporate municipal securities holdings, while rated in the highest rating category |
| | by one or more NRSRO (or unrated, if deemed of comparable quality by Dreyfus), involve |
| | credit and liquidity risks and risk of principal loss. |
| 1 | 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 Dreyfus Corporation has undertaken to limit fund expenses to maintain the minimum yield |
| | floor limit: 0.05 of 1%. Such expense limitations may fluctuate daily, and are voluntary and |
| | temporary, not contractual, and may be terminated by Dreyfus at any time without notice. Had |
| | these expenses not been absorbed, fund yields would have been lower. |
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 December 1, 2009 to May 31, 2010. 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 May 31, 2010 |
| |
| Expenses paid per $1,000† | $1.50 |
| Ending value (after expenses) | $1,000.30 |
|
| 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 May 31, 2010 |
| |
| Expenses paid per $1,000† | $1.51 |
| Ending value (after expenses) | $1,023.44 |
† Expenses are equal to the fund’s annualized expense ratio of .30%, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
6
|
| STATEMENT OF INVESTMENTS |
| May 31, 2010 |
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments—100.8% | Rate (%) | Date | Amount ($) | | Value ($) |
| California—1.9% | | | | | |
| Wells Fargo Stage Trust | | | | | |
| (City and County of San | | | | | |
| Francisco, COP (Multiple | | | | | |
| Capital Improvement Projects)) | | | | | |
| (Liquidity Facility; Wells | | | | | |
| Fargo Bank and LOC; Wells | | | | | |
| Fargo Bank) | 0.27 | 6/7/10 | 9,780,000 | a,b,c | 9,780,000 |
| Colorado—6.1% | | | | | |
| Colorado, | | | | | |
| Revenue, TRAN (Education | | | | | |
| Loan Program) | 1.50 | 8/12/10 | 5,000,000 | | 5,011,854 |
| Colorado Educational and Cultural | | | | | |
| Facilities Authority, Student | | | | | |
| Housing Revenue (Fuller | | | | | |
| Theological Seminary Project) | | | | | |
| (LOC; Key Bank) | 0.48 | 6/7/10 | 9,600,000 | a | 9,600,000 |
| Denver City and County, | | | | | |
| Airport System Revenue (LOC; | | | | | |
| Landesbank Baden-Wurttemberg) | 0.33 | 6/7/10 | 16,500,000 | a | 16,500,000 |
| Connecticut—1.0% | | | | | |
| Bridgeport, | | | | | |
| GO Notes, TAN | 1.50 | 8/12/10 | 5,000,000 | | 5,009,350 |
| Delaware—3.5% | | | | | |
| Delaware Economic Development | | | | | |
| Authority, MFHR (School House | | | | | |
| Project) (LOC; HSBC Bank USA) | 0.50 | 6/7/10 | 6,500,000 | a | 6,500,000 |
| Delaware Economic Development | | | | | |
| Authority, Revenue (Connections | | | | | |
| Community Support Programs, Inc. | | | | | |
| Project) (LOC; PNC Bank NA) | 0.28 | 6/7/10 | 3,700,000 | a | 3,700,000 |
| Delaware Health Facilities | | | | | |
| Authority, Revenue (Christiana | | | | | |
| Care Health Services) | 0.28 | 6/1/10 | 7,400,000 | a,b | 7,400,000 |
| District of Columbia—4.8% | | | | | |
| District of Columbia, | | | | | |
| Enterprise Zone Revenue | | | | | |
| (Trigen-Pepco Energy Services, | | | | | |
| LLC Issue) (LOC; M&T Bank) | 0.39 | 6/7/10 | 8,470,000 | a | 8,470,000 |
| District of Columbia, | | | | | |
| Revenue, CP (National | | | | | |
| Academy of Science) | 0.38 | 7/9/10 | 10,000,000 | | 10,000,000 |
The Fund 7
STATEMENT OF INVESTMENTS (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| District of Columbia (continued) | | | | | |
| Metropolitan Washington Airports | | | | | |
| Authority, Airport System | | | | | |
| Revenue (Liquidity Facility; | | | | | |
| Landesbank Baden-Wurttemberg) | 0.55 | 6/7/10 | 6,000,000 | a | 6,000,000 |
| Florida—17.9% | | | | | |
| Alachua Housing Finance Authority, | | | | | |
| MFHR (Edenwood Park Project) | | | | | |
| (Liquidity Facility; FHLMC and | | | | | |
| LOC; FHLMC) | 0.46 | 6/7/10 | 3,205,000 | a,c | 3,205,000 |
| Broward County Housing Finance | | | | | |
| Authority, MFHR (Cypress Grove | | | | | |
| Apartments Project) (LOC; FNMA) | 0.34 | 6/7/10 | 20,000,000 | a | 20,000,000 |
| Capital Trust Agency, | | | | | |
| MFHR (Brittany Bay Apartments | | | | | |
| —Waterman's Crossing) (Liquidity | | | | | |
| Facility; FHLMC and LOC; FHLMC) | 0.34 | 6/7/10 | 25,840,000 | a,c | 25,840,000 |
| Citizens Property Insurance | | | | | |
| Corporation, High-Risk Account | | | | | |
| Senior Secured Revenue | 4.50 | 6/1/10 | 7,000,000 | | 7,000,000 |
| Citizens Property Insurance | | | | | |
| Corporation, High-Risk Account | | | | | |
| Senior Secured Revenue | 2.00 | 4/21/11 | 7,000,000 | | 7,044,166 |
| Florida Finance Housing | | | | | |
| Corporation, MFHR (Falls of | | | | | |
| Venice Project) (Liquidity | | | | | |
| Facility; FNMA and LOC; FNMA) | 0.36 | 6/7/10 | 3,925,000 | a | 3,925,000 |
| Hillsborough County Industrial | | | | | |
| Development Authority, IDR | | | | | |
| (Seaboard Tampa Terminals | | | | | |
| Venture Project) (LOC; | | | | | |
| Wachovia Bank) | 0.60 | 6/7/10 | 4,000,000 | a | 4,000,000 |
| Orange County Health Facilities | | | | | |
| Authority, HR (Orlando | | | | | |
| Regional Healthcare System) | | | | | |
| (Insured; Assured Guaranty | | | | | |
| Municipal Corp. and Liquidity | | | | | |
| Facility; Dexia Credit Locale) | 0.38 | 6/1/10 | 15,850,000 | a,b | 15,850,000 |
| Orange County Housing Finance | | | | | |
| Authority, MFHR (Windsor Pines | | | | | |
| Project) (LOC; Bank of America) | 0.37 | 6/7/10 | 1,300,000 | a | 1,300,000 |
8
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Florida (continued) | | | | | |
| Polk County Industrial Development | | | | | |
| Authority, IDR (Florida Treatt, Inc. | | | | | |
| Project) (LOC; Bank of America) | 0.42 | 6/7/10 | 3,090,000 | a | 3,090,000 |
| Illinois—7.9% | | | | | |
| Illinois Finance Authority, | | | | | |
| Revenue, Refunding (Fairview | | | | | |
| Obligated Group) (LOC; | | | | | |
| ABN-AMRO) | 0.27 | 6/7/10 | 21,795,000 | a | 21,795,000 |
| Illinois Health Facilities | | | | | |
| Authority, Revenue (OSF | | | | | |
| Healthcare System) (LOC; | | | | | |
| JPMorgan Chase Bank) | 0.28 | 6/1/10 | 11,000,000 | a,b | 11,000,000 |
| Southwestern Illinois Development | | | | | |
| Authority, Solid Waste | | | | | |
| Disposal Facilities | | | | | |
| Revenue (Center Ethanol | | | | | |
| Company, LLC Project) | | | | | |
| (LOC; Wells Fargo Bank) | 0.45 | 6/7/10 | 7,370,000 | a | 7,370,000 |
| Indiana—3.1% | | | | | |
| Indiana Health and Educational | | | | | |
| Facility Financing Authority, | | | | | |
| Revenue (Ascension Health | | | | | |
| Senior Credit Group) (Liquidity | | | | | |
| Facility; Citibank NA) | 0.30 | 6/7/10 | 15,955,000 | a,b,c | 15,955,000 |
| Iowa—1.2% | | | | | |
| Iowa Finance Authority, | | | | | |
| SWDR (MidAmerican | | | | | |
| Energy Project) | 0.50 | 6/7/10 | 6,000,000 | a | 6,000,000 |
| Louisiana—1.0% | | | | | |
| Ascension Parish, | | | | | |
| Revenue, CP (BASF AG) | 0.45 | 6/17/10 | 5,000,000 | | 5,000,000 |
| Maryland—1.2% | | | | | |
| Baltimore County, | | | | | |
| Revenue, Refunding (Shade Tree | | | | | |
| Trace Apartments Facility) | | | | | |
| (LOC; M&T Bank) | 0.36 | 6/7/10 | 1,100,000 | a | 1,100,000 |
| Montgomery County, | | | | | |
| EDR (Riderwood Village, Inc. | | | | | |
| Project) (LOC; M&T Bank) | 0.27 | 6/7/10 | 5,000,000 | a | 5,000,000 |
The Fund 9
STATEMENT OF INVESTMENTS (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Massachusetts—4.6% | | | | | |
| Massachusetts Development Finance | | | | | |
| Agency, Revenue (Boston | | | | | |
| University Issue) (LOC; Allied | | | | | |
| Irish Banks) | 1.15 | 6/1/10 | 4,000,000 | a | 4,000,000 |
| Massachusetts Development Finance | | | | | |
| Agency, Revenue, Refunding | | | | | |
| (Wentworth Institute of | | | | | |
| Technology Issue) (LOC; | | | | | |
| JPMorgan Chase Bank) | 0.28 | 6/7/10 | 19,200,000 | a | 19,200,000 |
| Minnesota—1.3% | | | | | |
| Minnesota Agricultural and | | | | | |
| Economic Development Board, | | | | | |
| Health Care Facilities Revenue | | | | | |
| (Essentia Health Obligated | | | | | |
| Group) (Insured; Assured | | | | | |
| Guaranty Municipal Corp. and | | | | | |
| Liquidity Facility; Wells | | | | | |
| Fargo Bank) | 0.31 | 6/1/10 | 6,400,000 | a,b | 6,400,000 |
| Missouri—1.8% | | | | | |
| Missouri Health and Educational | | | | | |
| Facilities Authority, Health | | | | | |
| Facilities Revenue (Lutheran | | | | | |
| Senior Services) (LOC; | | | | | |
| U.S. Bank NA) | 0.26 | 6/7/10 | 9,000,000 | a,b | 9,000,000 |
| New Jersey—.7% | | | | | |
| New Jersey Economic | | | | | |
| Development Authority, | | | | | |
| School Facilities Construction | | | | | |
| Revenue, Refunding | | | | | |
| (LOC; Dexia Credit Locale) | 0.30 | 6/7/10 | 3,800,000 | a | 3,800,000 |
| New York—6.9% | | | | | |
| New York City, | | | | | |
| GO Notes (Liquidity Facility; | | | | | |
| Allied Irish Banks) | 1.15 | 6/1/10 | 4,700,000 | a | 4,700,000 |
| New York Local Government | | | | | |
| Assistance Corporation, | | | | | |
| Subordinate Lien Revenue, | | | | | |
| Refunding (Insured; Assured | | | | | |
| Guaranty Municipal Corp. | | | | | |
| and Liquidity Facility; | | | | | |
| Westdeutsche Landesbank) | 0.33 | 6/7/10 | 8,300,000 | a | 8,300,000 |
10
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| New York (continued) | | | | | |
| Port Authority of New York and | | | | | |
| New Jersey, CP (Liquidity | | | | | |
| Facility; Landesbank | | | | | |
| Hessen-Thuringen Girozentrale) | 0.39 | 6/15/10 | 12,000,000 | | 12,000,000 |
| Port Authority of New York and New | | | | | |
| Jersey, Special Obligation Revenue | | | | | |
| (Versatile Structure Obligations) | | | | | |
| (LOC; Bayerische Landesbank) | 0.33 | 6/1/10 | 9,900,000 | a | 9,900,000 |
| Ohio—2.9% | | | | | |
| Akron, | | | | | |
| Street Improvement Special | | | | | |
| Assessment Notes | 3.50 | 10/1/10 | 1,100,000 | | 1,102,684 |
| Columbus, | | | | | |
| Sewerage System Revenue | | | | | |
| (Putters Program) (Liquidity | | | | | |
| Facility; JPMorgan Chase Bank) | 0.29 | 6/7/10 | 1,400,000 | a,c | 1,400,000 |
| Cuyahoga County, | | | | | |
| IDR (King Nut Project) (LOC; | | | | | |
| National City Bank) | 0.38 | 6/7/10 | 2,515,000 | a | 2,515,000 |
| Cuyahoga County, | | | | | |
| IDR (King Nut Project) (LOC; | | | | | |
| National City Bank) | 0.38 | 6/7/10 | 2,490,000 | a | 2,490,000 |
| Montgomery County, | | | | | |
| Revenue, CP (Miami | | | | | |
| Valley Hospital) | 0.50 | 7/14/10 | 7,000,000 | b | 7,000,000 |
| Pennsylvania—14.8% | | | | | |
| Berks County Municipal Authority, | | | | | |
| Revenue (The Reading Hospital | | | | | |
| and Medical Center Project) | 0.53 | 7/15/10 | 4,800,000 | b | 4,800,000 |
| Emmaus General Authority, | | | | | |
| Local Government Revenue (Bond | | | | | |
| Pool Program) (LOC; U.S. Bank NA) | 0.31 | 6/7/10 | 13,700,000 | a | 13,700,000 |
| Franklin County Industrial | | | | | |
| Development Authority, Revenue | | | | | |
| (James and Donna Martin | | | | | |
| Project) (LOC; Wachovia Bank) | 0.49 | 6/7/10 | 1,000,000 | a | 1,000,000 |
| Horizon Hospital System Authority, | | | | | |
| Senior Health and Housing | | | | | |
| Facilities Revenue (Saint Paul | | | | | |
| Homes Project) (LOC; M&T Bank) | 0.34 | 6/7/10 | 1,600,000 | a,b | 1,600,000 |
The Fund 11
STATEMENT OF INVESTMENTS (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Pennsylvania (continued) | | | | | |
| Lancaster County Hospital | | | | | |
| Authority, Health System | | | | | |
| Revenue (The Lancaster General | | | | | |
| Hospital Refunding Project) | | | | | |
| (LOC; Bank of America) | 0.32 | 6/1/10 | 2,200,000 | a,b | 2,200,000 |
| Montgomery County Higher Education | | | | | |
| and Health Authority, Revenue | | | | | |
| (Pennsylvania Higher Education | | | | | |
| and Health Loan Program) | | | | | |
| (LOC; M&T Bank) | 0.34 | 6/7/10 | 5,405,000 | a,b | 5,405,000 |
| Montgomery County Industrial | | | | | |
| Development Authority, Revenue | | | | | |
| (Abington Friends School | | | | | |
| Project) (LOC; Wachovia Bank) | 0.27 | 6/7/10 | 8,710,000 | a | 8,710,000 |
| Pennsylvania Economic Development | | | | | |
| Financing Authority, Revenue | | | | | |
| (Evergreen Community Power | | | | | |
| Facility) (LOC; M&T Bank) | 0.44 | 6/7/10 | 15,000,000 | a | 15,000,000 |
| Pennsylvania Economic Development | | | | | |
| Financing Authority, Revenue | | | | | |
| (Northwestern Human Services— | | | | | |
| Allegheny Valley School, LLC | | | | | |
| Issue) (LOC; TD Bank) | 0.30 | 6/1/10 | 11,500,000 | a | 11,500,000 |
| Philadelphia Hospitals and Higher | | | | | |
| Education Facilities Authority, HR | | | | | |
| (The Children's Hospital of | | | | | |
| Philadelphia Project) (Liquidity | | | | | |
| Facility; JPMorgan Chase Bank) | 0.28 | 6/1/10 | 9,000,000 | a,b | 9,000,000 |
| RBC Municipal Products Inc. Trust | | | | | |
| (Allegheny County Hospital | | | | | |
| Development Authority, Revenue | | | | | |
| (University of Pittsburgh | | | | | |
| Medical Center)) (Liquidity | | | | | |
| Facility; Royal Bank of Canada | | | | | |
| and LOC; Royal Bank of Canada) | 0.29 | 6/7/10 | 2,500,000 | a,b,c | 2,500,000 |
| Tennessee—6.6% | | | | | |
| Knox County Health, Educational | | | | | |
| and Housing Facility Board, Hospital | | | | | |
| Facilities Revenue (Catholic | | | | | |
| Healthcare Partners) (LOC; | | | | | |
| Landesbank Baden-Wurttemberg) | 0.33 | 6/7/10 | 8,000,000 | a,b | 8,000,000 |
12
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Tennessee (continued) | | | | | |
| Metropolitan Government of | | | | | |
| Nashville and Davidson County | | | | | |
| Health and Educational | | | | | |
| Facilities Board, Revenue, | | | | | |
| Refunding (Belmont University | | | | | |
| Project) (LOC; FHLB) | 0.26 | 6/7/10 | 7,000,000 | a | 7,000,000 |
| Montgomery County Public | | | | | |
| Building Authority, Pooled | | | | | |
| Financing Revenue (Tennessee | | | | | |
| County Loan Pool) (LOC; | | | | | |
| Bank of America) | 0.28 | 6/1/10 | 6,760,000 | a | 6,760,000 |
| Tennergy Corporation, | | | | | |
| Gas Revenue (Putters Program) | | | | | |
| (Liquidity Facility; JPMorgan | | | | | |
| Chase Bank) | 0.31 | 6/7/10 | 5,800,000 | a,c | 5,800,000 |
| Tennergy Corporation, | | | | | |
| Gas Revenue (Putters Program) | | | | | |
| (LOC; BNP Paribas) | 0.31 | 6/7/10 | 5,825,000 | a,c | 5,825,000 |
| Texas—6.5% | | | | | |
| Dallas, | | | | | |
| CP (Liquidity Facility; | | | | | |
| Bank of America) | 0.35 | 7/14/10 | 4,684,000 | | 4,684,000 |
| Harris County Health Facilities | | | | | |
| Development Corporation, HR, | | | | | |
| Refunding (Texas Children's | | | | | |
| Hospital Project) (Liquidity | | | | | |
| Facility; Bank of America) | 0.28 | 6/1/10 | 6,500,000 | a,b | 6,500,000 |
| RBC Municipal Products, Inc. | | | | | |
| (Houston, Combined Utility | | | | | |
| System First Lien Revenue, | | | | | |
| Refunding) (Liquidity Facility; | | | | | |
| Royal Bank of Canada and | | | | | |
| LOC; Royal Bank of Canada) | 0.29 | 6/7/10 | 4,000,000 | a,c | 4,000,000 |
| Texas, | | | | | |
| GO Notes (Veterans' Housing | | | | | |
| Assistance Program) (Liquidity | | | | | |
| Facility; State Street Bank | | | | | |
| and Trust Co.) | 0.32 | 6/7/10 | 9,000,000 | a | 9,000,000 |
| Texas, | | | | | |
| TRAN | 2.50 | 8/31/10 | 9,000,000 | | 9,045,912 |
The Fund 13
STATEMENT OF INVESTMENTS (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Washington—.7% | | | | | |
| Pierce County Economic Development | | | | | |
| Corporation, Industrial | | | | | |
| Revenue (SeaTac Packaging | | | | | |
| Project) (LOC; HSBC Bank USA) | 0.42 | 6/7/10 | 3,730,000 | a | 3,730,000 |
| Wisconsin—.6% | | | | | |
| Wisconsin Rural Water Construction | | | | | |
| Loan Program Commission, | | | | | |
| Revenue, BAN | 1.50 | 11/15/10 | 3,000,000 | | 3,010,203 |
| Wyoming—3.8% | | | | | |
| Sweetwater County, | | | | | |
| HR (Memorial Hospital Project) | | | | | |
| (LOC; Key Bank) | 0.37 | 6/7/10 | 17,885,000 | a,b | 17,885,000 |
| Uinta County, | | | | | |
| PCR, Refunding (Amoco Project) | 0.25 | 6/1/10 | 1,600,000 | a | 1,600,000 |
| |
| Total Investments (cost $512,508,169) | | | 100.8% | | 512,508,169 |
| Liabilities, Less Cash and Receivables | | | (.8%) | | (4,106,292) |
| Net Assets | | | 100.0% | | 508,401,877 |
|
| a Variable rate demand note—rate shown is the interest rate in effect at May 31, 2010. Maturity date represents the |
| next demand date, or the ultimate maturity date if earlier. |
| b At May 31, 2010, the fund had $140,275,000 or 27.6% of net assets invested in securities whose payment of |
| principal and interest is dependent upon revenues generated from health care. |
| 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 May 31, 2010, these securities |
| amounted to $74,305,000 or 14.6% of net assets. |
14
| | | |
| 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 | ARRN | Adjustable Rate Receipt Notes |
| | Assurance Corporation | | |
| BAN | Bond Anticipation Notes | BPA | Bond Purchase Agreement |
| CIFG | CDC Ixis Financial Guaranty | 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 |
| GAN | Grant Anticipation Notes | GIC | Guaranteed Investment Contract |
| GNMA | Government National | GO | General Obligation |
| | Mortgage Association | | |
| 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 | PUTTERS Puttable Tax-Exempt Receipts |
| 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 15
STATEMENT OF INVESTMENTS (continued)
| | | | | |
| Summary of Combined Ratings (Unaudited) | |
| |
| Fitch | or | Moody’s | or | Standard & Poor’s | Value (%)† |
| F1+,F1 | | VMIG1,MIG1,P1 | | SP1+,SP1,A1+,A1 | 97.3 |
| AAA,AA,Ad | | Aaa,Aa,Ad | | AAA,AA,Ad | 1.3 |
| Not Ratede | | Not Ratede | | Not Ratede | 1.4 |
| | | | | | 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. |
16
|
| STATEMENT OF ASSETS AND LIABILITIES |
| May 31, 2010 |
| | |
| | Cost | Value |
| Assets ($): | | |
| Investments in securities—See Statement of Investments | 512,508,169 | 512,508,169 |
| Cash | | 924,310 |
| Interest receivable | | 422,159 |
| Prepaid expenses | | 36,698 |
| | | 513,891,336 |
| Liabilities ($): | | |
| Due to The Dreyfus Corporation and affiliates—Note 2(b) | | 145,011 |
| Payable for investment securities purchased | | 5,009,350 |
| Payable for shares of Common Stock redeemed | | 234,573 |
| Accrued expenses | | 100,525 |
| | | 5,489,459 |
| Net Assets ($) | | 508,401,877 |
| Composition of Net Assets ($): | | |
| Paid-in capital | | 508,420,992 |
| Accumulated net realized gain (loss) on investments | | (19,115) |
| Net Assets ($) | | 508,401,877 |
| Shares Outstanding | | |
| (5 billion shares of $.001 par value Common Stock authorized) | | 510,165,307 |
| Net Asset Value, offering and redemption price per share ($) | | 1.00 |
| |
| See notes to financial statements. | | |
The Fund 17
|
| STATEMENT OF OPERATIONS |
| Year Ended May 31, 2010 |
| |
| Investment Income ($): | |
| Interest Income | 3,614,931 |
| Expenses: | |
| Management fee—Note 2(a) | 3,433,005 |
| Shareholder servicing costs—Note 2(b) | 376,652 |
| Treasury insurance expense—Note 1(e) | 125,212 |
| Professional fees | 76,259 |
| Custodian fees—Note 2(b) | 72,183 |
| Directors' fees and expenses—Note 2(c) | 54,912 |
| Registration fees | 45,872 |
| Prospectus and shareholders' reports | 24,217 |
| Miscellaneous | 37,314 |
| Total Expenses | 4,245,626 |
| Less—reduction in expenses due to undertaking—Note 2(a) | (1,123,927) |
| Less—reduction in fees due to earnings credits—Note 1(b) | (605) |
| Net Expenses | 3,121,094 |
| Investment Income—Net | 493,837 |
| Net Realized Gain (Loss) on Investments—Note 1(b) ($) | 322 |
| Net Increase in Net Assets Resulting from Operations | 494,159 |
| |
| See notes to financial statements. | |
18
STATEMENT OF CHANGES IN NET ASSETS
| | |
| | | Year Ended May 31, |
| | 2010 | 2009 |
| Operations ($): | | |
| Investment income—net | 493,837 | 12,739,273 |
| Net realized gain (loss) on investments | 322 | (14,398) |
| Net Increase (Decrease) in Net Assets | | |
| Resulting from Operations | 494,159 | 12,724,875 |
| Dividends to Shareholders from ($): | | |
| Investment income—net | (493,837) | (12,739,273) |
| Capital Stock Transactions ($1.00 per share): | | |
| Net proceeds from shares sold | 937,052,564 | 1,827,450,280 |
| Dividends reinvested | 272,139 | 6,186,128 |
| Cost of shares redeemed | (1,401,806,330) | (1,885,854,772) |
| Increase (Decrease) in Net Assets | | |
| from Capital Stock Transactions | (464,481,627) | (52,218,364) |
| Total Increase (Decrease) in Net Assets | (464,481,305) | (52,232,762) |
| Net Assets ($): | | |
| Beginning of Period | 972,883,182 | 1,025,115,944 |
| End of Period | 508,401,877 | 972,883,182 |
| |
| See notes to financial statements. | | |
The Fund 19
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.
| | | | | |
| | | Year Ended May 31, | |
| | 2010 | 2009 | 2008 | 2007 | 2006 |
| Per Share Data ($): | | | | | |
| Net asset value, beginning of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
| Investment Operations: | | | | | |
| Investment income—net | .001 | .012 | .028 | .031 | .023 |
| Distributions: | | | | | |
| Dividends from investment income—net | (.001) | (.012) | (.028) | (.031) | (.023) |
| Net asset value, end of period | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 |
| Total Return (%) | .07 | 1.23 | 2.84 | 3.14 | 2.37 |
| Ratios/Supplemental Data (%): | | | | | |
| Ratio of total expenses | | | | | |
| to average net assets | .62 | .61 | .59 | .59 | .59 |
| Ratio of net expenses | | | | | |
| to average net assets | .45 | .61a | .58 | .58 | .58 |
| Ratio of net investment income | | | | | |
| to average net assets | .07 | 1.24 | 2.74 | 3.10 | 2.34 |
| Net Assets, end of period ($ x 1,000) | 508,402 | 972,883 | 1,025,116 | 779,746 | 972,745 |
| |
| a Expense waivers and/or reimbursements amounted to less than .01%. | | | |
| See notes to financial statements. | | | | | |
20
NOTES TO FINANCIAL STATEMENTS
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.
The Fund 21
NOTES TO FINANCIAL STATEMENTS (continued)
(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 cost, in accordance with rules under the Act. Generally, amortized cost
22
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 May 31, 2010 in valuing the fund’s investments:
| |
| | Short-Term |
| Valuation Inputs | Investments ($)† |
| Level 1—Unadjusted Quoted Prices | — |
| Level 2—Other Significant Observable Inputs | 512,508,169 |
| Level 3—Significant Unobservable Inputs | — |
| Total | 512,508,169 |
| † See Statement of Investments for additional detailed categorizations. | |
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost 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. 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.
The Fund 23
NOTES TO FINANCIAL STATEMENTS (continued)
(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 May 31, 2010, 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 four-year period ended May 31, 2010 remains subject to examination by the Internal Revenue Service and state taxing authorities.
At May 31, 2010, the components of accumulated earnings on a tax basis were substantially the same as for financial reporting purposes.
The accumulated capital loss carryover of $19,115 is available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to May 31, 2010. If not applied, $4,717 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 periods ended May 31, 2010 and May 31, 2009, were all tax exempt income.
At May 31,2010,the cost of investments for federal income tax purposes was substantially the same as the cost 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”).
24
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. Such limitation may fluctuate daily, is voluntary and not contractual and may be terminated at
The Fund 25
NOTES TO FINANCIAL STATEMENTS (continued)
any time. The reduction in expenses, pursuant to the undertaking, amounted to $1,123,927 during the period ended May 31, 2010.
(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 May 31, 2010, the fund was charged $222,758 pursuant to the Shareholder Services Plan.
The fund compensates DreyfusTransfer, 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 May 31, 2010, the fund was charged $99,504 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.
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 May 31, 2010, the fund was charged $11,106 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations.These fees were partially offset by earnings credits of $605.
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 May 31, 2010, the fund was charged $72,183 pursuant to the custody agreement.
26
During the period ended May 31, 2010, the fund was charged $5,436 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 $219,302, custodian fees $20,623, chief compliance officer fees $3,656 and transfer agency per account fees $24,900, which are offset against an expense reimbursement currently in effect in the amount of $123,470.
(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—Securities Transactions:
The fund is permitted to purchase or sell securities from or to certain related affiliated funds under specified conditions outlined in procedures adopted by the Board of Directors. The procedures have been designed to ensure that any purchase or sale of securities by the fund from or to another fund or portfolio that are, or could be, considered an affiliate by virtue of having a common investment adviser (or affiliated investment adviser), common Director and/or common officers, complies with Rule 17a-7 of the Act. During the period ended May 31, 2010, the fund engaged in purchases and sales of securities pursuant to Rule 17a-7 of the Act amounting to $541,390,000 and $489,955,000, respectively.
The Fund 27
|
| REPORT OF INDEPENDENT REGISTERED |
| PUBLIC ACCOUNTING FIRM |
Shareholders and Board of Directors Dreyfus Municipal Money Market Fund, Inc.
We have audited the accompanying statement of assets and liabilities of Dreyfus Municipal Money Market Fund, Inc., including the statement of investments, as of May 31, 2010, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles use d and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of May 31, 2010 by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Municipal Money Market Fund, Inc. at May 31, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with U.S. generally accepted accounting principles.
New York, New York
July 23, 2010
28
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with federal tax law, the fund hereby designates all the dividends paid from investment income-net during the fiscal year ended May 31, 2010 as “exempt-interest dividends” (not generally subject to regular federal income tax). Where required by federal tax law rules, shareholders will receive notification of their portion of the fund’s exempt-interest dividends paid for the 2010 calendar year on Form 1099-INT, which will be mailed by early 2011.
The Fund 29
OFFICERS OF THE FUND (Unaudited)
BRADLEY J. SKAPYAK, President since January 2010.
Chief Operating Officer and a director of the Manager since June 2009. From April 2003 to June 2009, Mr. Skapyak was the head of the Investment Accounting and Support Department of the Manager. He is an officer of 76 investment companies (comprised of 167 portfolios) managed by the Manager. He is 51 years old and has been an employee of the Manager since February 1988.
PHILLIP N. MAISANO, Executive Vice President since July 2007.
Chief Investment Officer,Vice Chair and a director of the Manager, and an officer of 76 investment companies (comprised of 167 portfolios) managed by the Manager. Mr. Maisano also is an officer and/or Board member of certain other investment management subsidiaries of The Bank of New York Mellon Corporation, each of which is an affiliate of the Manager. He is 63 years old and has been an employee of the Manager since November 2006. Prior to joining the Manager, Mr. Maisano served as Chairman and Chief Executive Officer of EACM Advisors, an affiliate of the Manager, since August 2004.
MICHAEL A. ROSENBERG, Vice President and Secretary since August 2005.
Assistant General Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 50 years old and has been an employee of the Manager since October 1991.
KIESHA ASTWOOD, Vice President and Assistant Secretary since January 2010.
Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. She is 37 years old and has been an employee of the Manager since July 1995.
JAMES BITETTO, Vice President and Assistant Secretary since August 2005.
Senior Counsel of BNY Mellon and Secretary of the Manager, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since December 1996.
JONI LACKS CHARATAN, Vice President and Assistant Secretary since August 2005.
Senior Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. She is 54 years old and has been an employee of the Manager since October 1988.
JOSEPH M. CHIOFFI, Vice President and Assistant Secretary since August 2005.
Senior Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 48 years old and has been an employee of the Manager since June 2000.
KATHLEEN DENICHOLAS, Vice President and Assistant Secretary since January 2010.
Senior Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. She is 35 years old and has been an employee of the Manager since February 2001.
JANETTE E. FARRAGHER, Vice President and Assistant Secretary since August 2005.
Assistant General Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. She is 47 years old and has been an employee of the Manager since February 1984.
The Fund 33
OFFICERS OF THE FUND (Unaudited) (continued)
JOHN B. HAMMALIAN, Vice President and Assistant Secretary since August 2005.
Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since February 1991.
M. CRISTINA MEISER, Vice President and Assistant Secretary since January 2010.
Senior Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. She is 40 years old and has been an employee of the Manager since August 2001.
ROBERT R. MULLERY, Vice President and Assistant Secretary since August 2005.
Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 58 years old and has been an employee of the Manager since May 1986.
JEFF PRUSNOFSKY, Vice President and Assistant Secretary since August 2005.
Managing Counsel of BNY Mellon, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since October 1990.
JAMES WINDELS, Treasurer since November 2001.
Director – Mutual Fund Accounting of the Manager, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 51 years old and has been an employee of the Manager since April 1985.
RICHARD CASSARO, Assistant Treasurer since January 2008.
Senior Accounting Manager – Money Market and Municipal Bond Funds of the Manager, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 51 years old and has been an employee of the Manager since September 1982.
GAVIN C. REILLY, Assistant Treasurer since December 2005.
Tax Manager of the Investment Accounting and Support Department of the Manager, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 41 years old and has been an employee of the Manager since April 1991.
ROBERT ROBOL, Assistant Treasurer since December 2002.
Senior Accounting Manager – Fixed Income Funds of the Manager, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since October 1988.
ROBERT SALVIOLO, Assistant Treasurer since July 2007.
Senior Accounting Manager – Equity Funds of the Manager, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since June 1989.
34
ROBERT SVAGNA, Assistant Treasurer since August 2005.
Senior Accounting Manager – Equity Funds of the Manager, and an officer of 77 investment companies (comprised of 190 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since November 1990.
JOSEPH W. CONNOLLY, Chief Compliance Officer since October 2004.
Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (77 investment companies, comprised of 190 portfolios). From November 2001 through March 2004, Mr. Connolly was first Vice-President, Mutual Fund Servicing for Mellon Global Securities Services. In that capacity, Mr. Connolly was responsible for managing Mellon’s Custody, Fund Accounting and Fund Administration services to third-party mutual fund clients. He is 53 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.
WILLIAM GERMENIS, Anti-Money Laundering Compliance Officer since September 2002.
Vice President and Anti-Money Laundering Compliance Officer of the Distributor, and the Anti-Money Laundering Compliance Officer of 73 investment companies (comprised of 186 portfolios) managed by the Manager. He is 39 years old and has been an employee of the Distributor since October 1998.
The Fund 35
Item 2. Code of Ethics.
The Registrant has adopted a code of ethics that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There have been no amendments to, or waivers in connection with, the Code of Ethics during the period covered by this Report.
Item 3. Audit Committee Financial Expert.
The Registrant's Board has determined that Ehud Houminer, a member of the Audit Committee of the Board, is an audit committee financial expert as defined by the Securities and Exchange Commission (the "SEC"). Ehud Houminer is "independent" as defined by the SEC for purposes of audit committee financial expert determinations.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years (the "Reporting Periods") for professional services rendered by the Registrant's principal accountant (the "Auditor") for the audit of the Registrant's annual financial statements or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $41,463 in 2009 and $41,463 in 2010.
(b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the audit of the Registrant's financial statements and are not reported under paragraph (a) of this Item 4 were $10,552 in 2009 and $5,382 in 2010. These services consisted of one or more of the following: (i) agreed upon procedures related to compliance with Internal Revenue Code section 817(h), (ii) security counts required by Rule 17f-2 under the Investment Company Act of 1940, as amended, (iii) advisory services as to the accounting or disclosure treatment of Registrant transactions or events and (iv) advisory services to the accounting or disclosure treatment of the actual or potential imp act to the Registrant of final or proposed rules, standards or interpretations by the Securities and Exchange Commission, the Financial Accounting Standards Boards or other regulatory or standard-setting bodies.
The aggregate fees billed in the Reporting Periods for non-audit assurance and related services by the Auditor to the Registrant's investment adviser (not including any sub-investment adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant ("Service Affiliates"), that were reasonably related to the performance of the annual audit of the Service Affiliate, which required pre-approval by the Audit Committee were $0 in 2009 and $0 in 2010.
(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice, and tax planning ("Tax Services") were $3,234 in 2009 and $3,559 in 2010. These services consisted of: (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments; (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held. The aggregate fees billed in the Reporting Periods for Tax Services by the Auditor to Service Affiliates, which required pre-approval by the Audit Committee were $0 in 2009 and $0 in 2010.
(d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item, were $298 in 2009 and $0 in 2010. [These services consisted of a review of the Registrant's anti-money laundering program].
The aggregate fees billed in the Reporting Periods for Non-Audit Services by the Auditor to Service Affiliates, other than the services reported in paragraphs (b) through (c) of this Item, which required pre-approval by the Audit Committee, were $0 in 2009 and $0 in 2010.
(e)(1) Audit Committee Pre-Approval Policies and Procedures. The Registrant's Audit Committee has established policies and procedures (the "Policy") for pre-approval (within specified fee limits) of the Auditor's engagements for non-audit services to the Registrant and Service Affiliates without specific case-by-case consideration. The pre-approved services in the Policy can include pre-approved audit services, pre-approved audit-related services, pre-approved tax services and pre-approved all other services. Pre-approval considerations include whether the proposed services are compatible with maintaining the Auditor's independence. Pre-approvals pursuant to the Policy are considered annually.
(e)(2) Note: None of the services described in paragraphs (b) through (d) of this Item 4 were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) None of the hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal account's full-time, permanent employees.
Non-Audit Fees. The aggregate non-audit fees billed by the Auditor for services rendered to the Registrant, and rendered to Service Affiliates, for the Reporting Periods were $20,898,574 in 2009 and $28,017,293 in 2010.
Auditor Independence. The Registrant's Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Auditor's independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable. [CLOSED-END FUNDS ONLY]
Item 6. Investments.
(a) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management
Investment Companies.
Not applicable. [CLOSED-END FUNDS ONLY]
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable. [CLOSED-END FUNDS ONLY, beginning with reports for periods ended
on and after December 31, 2005]
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) | Code of ethics referred to in Item 2. |
| (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/ Bradley J. Skapyak |
| | Bradley J. Skapyak, |
| | President |
| |
| Date: | July 23, 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: | July 23, 2010 |
| |
| By: | /s/ James Windels |
| James Windels, |
| | Treasurer |
| |
| Date: | July 23, 2010 |
| |
| | EXHIBIT INDEX |
| (a)(1) | Code of ethics referred to in Item 2. |
| (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) |
Exhibit (a)(1)
[INSERT CODE OF ETHICS]
