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) | |
| | |
| John Pak, 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: | 11/30/14 | |
| | | | | | | |
FORM N-CSR
Item 1. Reports to Stockholders.
|
| Dreyfus |
| Municipal Money |
| Market Fund, Inc. |
SEMIANNUAL REPORT November 30, 2014
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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 President |
| 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 |
| 20 | Statement of Assets and Liabilities |
| 21 | Statement of Operations |
| 22 | Statement of Changes in Net Assets |
| 23 | Financial Highlights |
| 24 | Notes to Financial Statements |
| 30 | Information About the Renewal of the Fund’s Management Agreement |
| | FOR MORE INFORMATION |
| | Back Cover |
Dreyfus Municipal
Money Market Fund, Inc.
The Fund
A LETTER FROM THE PRESIDENT
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, 2014, through November 30, 2014. 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.
The U.S. economy generally gained ground over the reporting period in the wake of a weather-related economic soft patch during the first quarter of 2014. Stronger economic growth sparked bouts of volatility among longer term bonds, but short-term rates and yields of money market instruments remained steady, anchored near historical lows by an unchanged federal funds rate. In addition, a degree of uncertainty was removed from the money markets over the summer, when the Securities Exchange Commission issued new rules governing some funds, but the immediate impact on the market was muted when regulators delayed implementation for two years.
In our view, stronger labor markets, greater manufacturing activity, rebounding housing starts, and rising household wealth portend well for the U.S. economy. While some longer term financial assets are likely to benefit from a more robust recovery, the possibility of higher inflation and rising long-term interest rates suggests that selectivity could become a more important determinant of investment success. As always, we urge you to talk regularly with your financial advisor to assess the potential impact of these and other developments on your investments.
Thank you for your continued confidence and support.
J. Charles Cardona
President
The Dreyfus Corporation
December 15, 2014
2
DISCUSSION OF FUND PERFORMANCE
For the period of June 1, 2014, through November 30, 2014, as provided by Colleen Meehan, Senior Portfolio Manager
Fund and Market Performance Overview
For the six-month period ended November 30, 2014, Dreyfus Municipal Money Market Fund, Inc. produced an annualized yield of 0.00%.Taking into account the effects of compounding, the fund produced an annualized effective yield of 0.00%.1
The U.S. economic recovery accelerated and the Federal Reserve Board (the “Fed”) ended its quantitative easing program during the reporting period, but the overnight federal funds rate was left unchanged near historical lows. Consequently, tax-exempt money market yields also remained low throughout the reporting period.
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.
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 try to maintain an average maturity that reflects our view of short-term, interest-rate trends and future supply-and-demand considerations.
The Fund 3
DISCUSSION OF FUND PERFORMANCE (continued)
Yields Stayed Low despite Accelerating Economic Recovery
Long-term interest rates fell in the months prior to the reporting period amid concerns that economic weakness in international markets might derail the U.S. economic recovery. Long-term rates declined further when harsh winter weather contributed to an economic contraction during the first quarter of 2014.
The economic recovery got back on track by the start of the reporting period, as evidenced by a 4.6% annualized GDP growth rate for the second quarter and an estimated 3.9% annualized growth rate for the third quarter.The unemployment rate declined steadily, household wealth increased, and manufacturing activity intensified. While these factors typically would be expected to push longer term interest rates higher, inflation remained muted and supply-and-demand dynamics persisted in putting downward pressure on yields of tax-exempt money market securities. The tax-exempt note market continued to experience strong demand, while issuance continued to decline as issuers’ needs for short-term financing decreased in the recovering economy. Robust investor demand and a more limited supply of new instruments also kept yields on variable rate demand notes (“VRDNs”) near historical lows.
Municipal credit quality continued to improve during the reporting period as most states and many local governments recovered slowly from the recession. Most notably, state general funds have shown consecutive quarters of growth in personal income taxes and sales taxes, both important sources of revenue.
Credit Selection Remained Paramount
As they have for some time, most municipal money market funds during the reporting period continued to maintain short weighted average maturities compared to historical averages due to narrow yield differences along the market’s maturity range. The fund was no exception, as we continued to set its weighted average maturity in a position that was consistent with industry averages. Changes to the regulations governing some money market funds—which were announced in July but are not effective until 2016—also contributed to relatively cautious investment postures.
4
As always, well-researched credit selection remained paramount over the reporting period. We continued to favor state general obligation bonds; essential-service revenue bonds issued by water, sewer, and electric enterprises; certain local credits with strong financial positions and stable tax bases; and various healthcare and education issuers with stable credit characteristics.
Fed Remains Committed to Low Short-Term Rates
Although the U.S. economic recovery has gained momentum and the Fed’s quantitative easing program ended in the fall, monetary policymakers have made clear that short-term interest rates are likely to remain near current levels “for a considerable time.” The Fed reiterated that it will continue to monitor progress toward its objectives of full employment and a 2% inflation rate, and depending on prevailing economic conditions, it may keep rates low even after those targets are reached. Therefore, in our judgment, the prudent course continues to be an emphasis on preservation of capital and liquidity.
December 15, 2014
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 municipal securities holdings involve credit and liquidity risks and risk of principal loss.
|
| 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 absorption 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, 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 June 1, 2014 to November 30, 2014. 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, 2014
| | |
| Expenses paid per $1,000† | | $ .55 |
| Ending value (after expenses) | | $ 1,000.00 |
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, 2014
| | |
| Expenses paid per $1,000† | | $ .56 |
| Ending value (after expenses) | | $ 1,024.52 |
|
| † Expenses are equal to the fund’s annualized expense ratio of .11%, 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, 2014 (Unaudited) | | | | | |
| |
| |
| |
| |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments—99.5% | Rate (%) | Date | Amount ($) | | Value ($) |
| Alabama—1.9% | | | | | |
| Columbia Industrial Development | | | | | |
| Board, PCR, Refunding (Alabama | | | | | |
| Power Company Project) | 0.05 | 12/1/14 | 5,000,000 | a | 5,000,000 |
| Mobile County Industrial | | | | | |
| Development Authority, Gulf | | | | | |
| Opportunity Zone Revenue (SSAB | | | | | |
| Alabama Inc.) (LOC; Swedbank) | 0.08 | 12/7/14 | 4,000,000 | a | 4,000,000 |
| Arizona—1.1% | | | | | |
| Phoenix Civic Improvement | | | | | |
| Corporation, Water System | | | | | |
| Revenue, CP (LOC; Royal Bank | | | | | |
| of Canada) | 0.06 | 12/17/14 | 5,000,000 | | 5,000,000 |
| California—3.0% | | | | | |
| Alameda County Industrial | | | | | |
| Development Authority, Revenue | | | | | |
| (Golden West Paper Converting | | | | | |
| Corporation Project) (LOC; | | | | | |
| Bank of the West) | 0.09 | 12/7/14 | 3,315,000 | a | 3,315,000 |
| Alameda County Industrial | | | | | |
| Development Authority, Revenue | | | | | |
| (Unique Elevator Interiors, | | | | | |
| Inc. Project) (LOC; | | | | | |
| Comerica Bank) | 0.08 | 12/7/14 | 2,215,000 | a | 2,215,000 |
| California Pollution Control | | | | | |
| Financing Authority, SWDR | | | | | |
| (GreenWaste Recovery, Inc. | | | | | |
| Project) (LOC; Union Bank NA) | 0.08 | 12/7/14 | 5,730,000 | a | 5,730,000 |
| California Pollution Control | | | | | |
| Financing Authority, SWDR | | | | | |
| (Pena’s Disposal, Inc. | | | | | |
| Project) (LOC; Comerica Bank) | 0.09 | 12/7/14 | 2,695,000 | a | 2,695,000 |
| Colorado—1.6% | | | | | |
| Deutsche Bank Spears/Lifers Trust | | | | | |
| (Series DBE-1129 X) (City and | | | | | |
| County of Denver, Airport | | | | | |
| System Revenue) (Liquidity | | | | | |
| Facility; Deutsche Bank AG and | | | | | |
| LOC; Deutsche Bank AG) | 0.13 | 12/7/14 | 2,500,000 | a,b,c | 2,500,000 |
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Colorado (continued) | | | | | |
| RBC Municipal Products Inc. Trust | | | | | |
| (Series E-25) (City and County | | | | | |
| of Denver, Aviation Airport | | | | | |
| System Revenue) (Liquidity | | | | | |
| Facility; Royal Bank of Canada | | | | | |
| and LOC; Royal Bank of Canada) | 0.06 | 12/7/14 | 5,000,000 | a,b,c | 5,000,000 |
| Connecticut—.7% | | | | | |
| Bridgeport, | | | | | |
| GO Notes, TAN | 2.00 | 2/19/15 | 3,000,000 | | 3,012,387 |
| Connecticut Development Authority, | | | | | |
| IDR (AcuCut, Inc. Project) | | | | | |
| (LOC; TD Bank) | 0.21 | 12/7/14 | 440,000 | a | 440,000 |
| Florida—12.8% | | | | | |
| Branch Banking and Trust Co. | | | | | |
| Municipal Trust (Series 2042) | | | | | |
| (Collier County School Board, | | | | | |
| COP, Refunding (Master | | | | | |
| Lease-Purchase Agreement)) | | | | | |
| (Liquidity Facility; Branch | | | | | |
| Banking and Trust Co. and LOC; | | | | | |
| Branch Banking and Trust Co.) | 0.09 | 12/7/14 | 7,200,000 | a,b,c | 7,200,000 |
| Broward County Housing Finance | | | | | |
| Authority, MFHR (Cypress Grove | | | | | |
| Apartments Project) (LOC; FNMA) | 0.06 | 12/7/14 | 19,500,000 | a | 19,500,000 |
| Collier County Health Facilities | | | | | |
| Authority, Revenue, CP | | | | | |
| (Cleveland Clinic | | | | | |
| Health System) | 0.10 | 12/9/14 | 6,000,000 | | 6,000,000 |
| Hillsborough County Industrial | | | | | |
| Development Authority, IDR | | | | | |
| (Seaboard Tampa Terminals | | | | | |
| Venture Project) (LOC; | | | | | |
| Northern Trust Company) | 0.33 | 12/7/14 | 4,000,000 | a | 4,000,000 |
| Jacksonville Electric Authority, | | | | | |
| Electric System Revenue, CP | | | | | |
| (Liquidity Facility; U.S. Bank NA) | 0.08 | 12/11/14 | 4,800,000 | | 4,800,000 |
8
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Florida (continued) | | | | | |
| Palm Beach County, | | | | | |
| Public Improvement Revenue | | | | | |
| (Biomedical Research Park | | | | | |
| Project) (Deutsche Bank | | | | | |
| Spears/Lifers Trust (Series | | | | | |
| DB-184) (Liquidity Facility; | | | | | |
| Deutsche Bank AG and LOC; | | | | | |
| Deutsche Bank AG) | 0.18 | 12/7/14 | 3,915,000 | a,b,c | 3,915,000 |
| Palm Beach County School District, | | | | | |
| GO Notes, TAN | 1.25 | 1/30/15 | 10,000,000 | | 10,019,087 |
| Polk County Industrial Development | | | | | |
| Authority, IDR (Florida | | | | | |
| Treatt, Inc. Project) (LOC; | | | | | |
| Bank of America) | 0.20 | 12/7/14 | 1,815,000 | a | 1,815,000 |
| Sunshine State Governmental | | | | | |
| Financing Commission, Revenue, | | | | | |
| CP (Liquidity Facility; | | | | | |
| JPMorgan Chase Bank) | 0.12 | 1/7/15 | 3,000,000 | | 3,000,000 |
| Georgia—2.9% | | | | | |
| Bartow County Development | | | | | |
| Authority, Revenue (VMC | | | | | |
| Specialty Alloys LLC Project) | | | | | |
| (LOC; Comerica Bank) | 0.12 | 12/7/14 | 3,350,000 | a | 3,350,000 |
| Fulton County Development | | | | | |
| Authority, Revenue (King’s | | | | | |
| Ridge Christian School | | | | | |
| Project) (LOC; Branch Banking | | | | | |
| and Trust Co.) | 0.05 | 12/7/14 | 8,900,000 | a | 8,900,000 |
| Macon County Development | | | | | |
| Authority, IDR (Swartz Ag, LLC | | | | | |
| Project) (LOC; Branch Banking | | | | | |
| and Trust Co.) | 0.10 | 12/7/14 | 1,580,000 | a | 1,580,000 |
| Illinois—3.0% | | | | | |
| Channahon, | | | | | |
| Revenue (Morris Hospital) | | | | | |
| (LOC; U.S. Bank NA) | 0.04 | 12/7/14 | 6,655,000 | a | 6,655,000 |
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Illinois (continued) | | | | | |
| Southwestern Illinois Development | | | | | |
| Authority, Solid Waste | | | | | |
| Disposal Facilities Revenue | | | | | |
| (Center Ethanol Company, LLC | | | | | |
| Project) (LOC; FHLB) | 0.06 | 12/7/14 | 7,370,000 | a | 7,370,000 |
| Indiana—2.3% | | | | | |
| Noblesville, | | | | | |
| EDR (GreyStone Apartments | | | | | |
| Project) (LOC; Bank of America) | 0.15 | 12/7/14 | 10,640,000 | a | 10,640,000 |
| Iowa—2.3% | | | | | |
| Iowa Finance Authority, | | | | | |
| SWDR (MidAmerican | | | | | |
| Energy Project) | 0.09 | 12/7/14 | 11,000,000 | a | 11,000,000 |
| Kansas—1.3% | | | | | |
| Shawnee, | | | | | |
| GO Notes, Refunding (Internal | | | | | |
| Improvement) | 5.00 | 12/1/14 | 940,000 | | 940,000 |
| Wichita, | | | | | |
| GO Temporary Notes | 0.30 | 10/15/15 | 5,000,000 | | 5,001,045 |
| Kentucky—1.1% | | | | | |
| Carroll County, | | | | | |
| Environmental Facilities | | | | | |
| Revenue, Refunding (Kentucky | | | | | |
| Utilities Company Project) | | | | | |
| (LOC; Bank of Tokyo-Mitsubishi | | | | | |
| UFJ, Ltd.) | 0.05 | 12/7/14 | 5,000,000 | a | 5,000,000 |
| Louisiana—4.8% | | | | | |
| Ascension Parish, | | | | | |
| Revenue (BASF | | | | | |
| Corporation Project) | 0.14 | 12/7/14 | 1,500,000 | a | 1,500,000 |
| Ascension Parish Industrial | | | | | |
| Development Board, Revenue | | | | | |
| (International Matex Tank | | | | | |
| Terminals—Geismar Project) | | | | | |
| (LOC; FHLB) | 0.05 | 12/7/14 | 9,000,000 | a | 9,000,000 |
| Louisiana Public Facilities | | | | | |
| Authority, Revenue (Air | | | | | |
| Products and Chemicals Project) | 0.04 | 12/1/14 | 7,700,000 | a | 7,700,000 |
10
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Louisiana (continued) | | | | | |
| Louisiana Public Facilities | | | | | |
| Authority, Revenue (Tiger | | | | | |
| Athletic Foundation Project) | | | | | |
| (LOC; FHLB) | 0.04 | 12/7/14 | 4,500,000 | a | 4,500,000 |
| Maryland—.2% | | | | | |
| Baltimore County, | | | | | |
| Revenue, Refunding (Shade Tree | | | | | |
| Trace Apartments Facility) | | | | | |
| (LOC; M&T Trust) | 0.10 | 12/7/14 | 800,000 | a | 800,000 |
| Massachusetts—5.6% | | | | | |
| Massachusetts, | | | | | |
| Special Obligation Notes | | | | | |
| (Senior Federal Highway Grant | | | | | |
| Anticipation Note Program) | 4.00 | 12/15/14 | 250,000 | | 250,360 |
| Massachusetts Development Finance | | | | | |
| Agency, Revenue (New Bedford | | | | | |
| Waste Issue) (LOC; U.S. Bank NA) | 0.06 | 12/7/14 | 2,225,000 | a | 2,225,000 |
| Massachusetts Health and | | | | | |
| Educational Facilities | | | | | |
| Authority, Revenue (Baystate | | | | | |
| Medical Center Issue) (LOC; | | | | | |
| Wells Fargo Bank) | 0.04 | 12/1/14 | 15,650,000 | a | 15,650,000 |
| Massachusetts Health and | | | | | |
| Educational Facilities | | | | | |
| Authority, Revenue (Partners | | | | | |
| HealthCare System Issue) | 0.03 | 12/1/14 | 4,200,000 | a | 4,200,000 |
| Massachusetts School Building | | | | | |
| Authority, Subordinated | | | | | |
| Dedicated Sales Tax BAN | 5.00 | 7/16/15 | 4,000,000 | | 4,121,271 |
| Minnesota—1.0% | | | | | |
| Minneapolis-Saint Paul | | | | | |
| Metropolitan Airports | | | | | |
| Commission, Senior Airport | | | | | |
| Revenue, Refunding | 5.00 | 1/1/15 | 1,715,000 | | 1,722,141 |
| Southern Minnesota Municipal Power | | | | | |
| Agency, Power Supply System | | | | | |
| Revenue, CP (Liquidity | | | | | |
| Facility; U.S. Bank NA) | 0.08 | 12/16/14 | 3,000,000 | | 3,000,000 |
The Fund 11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Mississippi—2.0% | | | | | |
| Mississippi Business Finance | | | | | |
| Corporation, Gulf | | | | | |
| Opportunity Zone IDR | | | | | |
| (Chevron U.S.A. Inc. Project) | 0.04 | 12/1/14 | 9,605,000 | a | 9,605,000 |
| Missouri—1.0% | | | | | |
| Kansas City, | | | | | |
| Special Obligation Revenue, | | | | | |
| Refunding (Chouteau I-35 | | | | | |
| Project) (LOC; JPMorgan | | | | | |
| Chase Bank) | 0.07 | 12/7/14 | 4,650,000 | a | 4,650,000 |
| Nebraska—1.1% | | | | | |
| Lincoln, | | | | | |
| Electric System Revenue, CP | | | | | |
| (Liquidity Facility; Bank of | | | | | |
| Tokyo-Mitsubishi UFJ, Ltd.) | 0.07 | 12/9/14 | 5,000,000 | | 5,000,000 |
| New Hampshire—.6% | | | | | |
| Rockingham County, | | | | | |
| GO Notes, TAN | 0.50 | 12/19/14 | 3,000,000 | | 3,000,501 |
| New Jersey—1.4% | | | | | |
| Monroe Township, | | | | | |
| GO Notes, BAN | 1.00 | 2/6/15 | 4,000,000 | | 4,005,566 |
| Stafford Township, | | | | | |
| GO Notes, BAN (General | | | | | |
| Improvement and Water/ | | | | | |
| Sewer Utility) | 1.00 | 5/18/15 | 2,500,000 | | 2,507,558 |
| New York—4.1% | | | | | |
| Deutsche Bank Spears/Lifers Trust | | | | | |
| (Series DBE-1162) (Westchester | | | | | |
| County Industrial Development | | | | | |
| Agency, IDR (Ardsley Housing | | | | | |
| Associates, LLC Facility)) | | | | | |
| (Liquidity Facility; Deutsche | | | | | |
| Bank AG and LOC; Deutsche | | | | | |
| Bank AG) | 0.24 | 12/7/14 | 4,900,000 | a,b,c | 4,900,000 |
12
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| New York (continued) | | | | | |
| New York City Industrial | | | | | |
| Development Agency, Special | | | | | |
| Facility Revenue (Air Express | | | | | |
| International Corporation | | | | | |
| Project) (LOC; Citibank NA) | 0.04 | 12/7/14 | 6,000,000 | a | 6,000,000 |
| New York State Housing Finance | | | | | |
| Agency, Housing Revenue (505 | | | | | |
| West 37th Street) (LOC; | | | | | |
| Landesbank Hessen-Thuringen | | | | | |
| Girozentrale) | 0.05 | 12/1/14 | 8,700,000 | a | 8,700,000 |
| North Carolina—2.4% | | | | | |
| North Carolina, | | | | | |
| LOR, Refunding (Citigroup | | | | | |
| ROCS, Series RR II R-14089) | | | | | |
| (Liquidity Facility; Citibank NA) | 0.02 | 12/7/14 | 2,800,000 | a,b,c | 2,800,000 |
| North Carolina Capital Facilities | | | | | |
| Finance Agency, Revenue | | | | | |
| (Montessori Children’s Center, | | | | | |
| Inc.) (LOC; Bank of America) | 0.07 | 12/7/14 | 1,650,000 | a | 1,650,000 |
| North Carolina Medical Care | | | | | |
| Commission, Health Care | | | | | |
| Facilities First Mortgage | | | | | |
| Revenue (Deerfield | | | | | |
| Episcopal Retirement | | | | | |
| Community) (LOC; | | | | | |
| Branch Banking and Trust Co.) | 0.04 | 12/7/14 | 5,035,000 | a | 5,035,000 |
| Raleigh, | | | | | |
| GO Notes (Public Improvement | | | | | |
| Bonds and Street | | | | | |
| Improvement Bonds) | 4.00 | 2/1/15 | 2,000,000 | | 2,013,223 |
| Ohio—2.2% | | | | | |
| Cuyahoga County, | | | | | |
| IDR (King Nut Project) (LOC; | | | | | |
| PNC Bank NA) | 0.13 | 12/7/14 | 1,740,000 | a | 1,740,000 |
The Fund 13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Ohio (continued) | | | | | |
| Cuyahoga County, | | | | | |
| IDR (King Nut Project) (LOC; | | | | | |
| PNC Bank NA) | 0.13 | 12/7/14 | 1,745,000 | a | 1,745,000 |
| Union Township, | | | | | |
| GO Notes, BAN (Various Purpose) | 1.00 | 9/9/15 | 7,000,000 | | 7,029,610 |
| Pennsylvania—9.6% | | | | | |
| Deutsche Bank Spears/Lifers Trust | | | | | |
| (Series DBE-1021) | | | | | |
| (Pennsylvania Higher Education | | | | | |
| Facilities Authority, Revenue | | | | | |
| (Student Association, Inc. | | | | | |
| Student Housing Project at | | | | | |
| California University of | | | | | |
| Pennsylvania)) (Liquidity | | | | | |
| Facility; Deutsche Bank AG and | | | | | |
| LOC; Deutsche Bank AG) | 0.14 | 12/7/14 | 9,755,000 | a,b,c | 9,755,000 |
| Franklin County Industrial | | | | | |
| Development Authority, | | | | | |
| Revenue (James and | | | | | |
| Donna Martin Project) (LOC; | | | | | |
| Wells Fargo Bank) | 0.24 | 12/7/14 | 1,000,000 | a | 1,000,000 |
| Horizon Hospital System Authority, | | | | | |
| Senior Health and Housing | | | | | |
| Facilities Revenue (Saint Paul | | | | | |
| Homes Project) (LOC; M&T Trust) | 0.09 | 12/7/14 | 1,200,000 | a | 1,200,000 |
| Lancaster Industrial Development | | | | | |
| Authority, Revenue (Henry | | | | | |
| Molded Products, Inc. Project) | | | | | |
| (LOC; M&T Trust) | 0.34 | 12/7/14 | 960,000 | a | 960,000 |
| Luzerne County Industrial | | | | | |
| Development Authority, Revenue | | | | | |
| (Cornell Iron Works Project) | | | | | |
| (LOC; Bank of America) | 0.24 | 12/7/14 | 1,000,000 | a | 1,000,000 |
| Montgomery County Higher Education | | | | | |
| and Health Authority, Revenue | | | | | |
| (Pennsylvania Higher Education | | | | | |
| and Health Loan Program) (LOC; | | | | | |
| M&T Trust) | 0.09 | 12/7/14 | 2,630,000 | a | 2,630,000 |
| Pennsylvania Economic Development | | | | | |
| Financing Authority, Revenue | | | | | |
| (Evergreen Community Power | | | | | |
| Facility) (LOC; M&T Trust) | 0.19 | 12/7/14 | 11,800,000 | a | 11,800,000 |
14
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Pennsylvania (continued) | | | | | |
| Philadelphia Authority for | | | | | |
| Industrial Development, | | | | | |
| Revenue (The Philadelphia | | | | | |
| Protestant Home Project) (LOC; | | | | | |
| Bank of America) | 0.13 | 12/7/14 | 4,300,000 | a | 4,300,000 |
| RBC Municipal Products Inc. Trust | | | | | |
| (Series E-29) (Allegheny County | | | | | |
| Hospital Development Authority, | | | | | |
| Revenue (University of Pittsburgh | | | | | |
| Medical Center)) (Liquidity Facility; | | | | | |
| Royal Bank of Canada and LOC; | | | | | |
| Royal Bank of Canada) | 0.04 | 12/7/14 | 7,000,000 | a,b,c | 7,000,000 |
| University of Pittsburgh of the | | | | | |
| Commonwealth System of Higher | | | | | |
| Education, CP | 0.08 | 2/17/15 | 3,650,000 | | 3,650,000 |
| York County Industrial Development | | | | | |
| Authority, Revenue (Riach | | | | | |
| Family Limited Partnership | | | | | |
| Project) (LOC; M&T Trust) | 0.29 | 12/7/14 | 1,055,000 | a | 1,055,000 |
| York County Industrial Development | | | | | |
| Authority, Revenue (York Sheet | | | | | |
| Metal, Inc. Project) (LOC; M&T Trust) | 0.30 | 12/7/14 | 920,000 | a | 920,000 |
| Rhode Island—.2% | | | | | |
| Rhode Island and Providence | | | | | |
| Plantations, GO Notes, | | | | | |
| Refunding (Consolidated | | | | | |
| Capital Development Loan) | 2.00 | 2/1/15 | 935,000 | | 937,939 |
| South Carolina—1.5% | | | | | |
| South Carolina Association of | | | | | |
| Governmental Organizations, | | | | | |
| COP (Evidencing Undivided | | | | | |
| Proportionate Interests in Tax | | | | | |
| Anticipation Notes (General | | | | | |
| Obligations) of Certain South | | | | | |
| Carolina School Districts) | 1.00 | 4/15/15 | 7,000,000 | | 7,022,833 |
| Tennessee—11.5% | | | | | |
| Blount County Public Building | | | | | |
| Authority, Local Government | | | | | |
| Public Improvement Revenue | | | | | |
| (Liquidity Facility; Branch | | | | | |
| Banking and Trust Co.) | 0.04 | 12/7/14 | 13,275,000 | a | 13,275,000 |
The Fund 15
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Tennessee (continued) | | | | | |
| Clarksville Public Building | | | | | |
| Authority, Pooled Financing | | | | | |
| Revenue (Tennessee Municipal | | | | | |
| Bond Fund) (LOC; Bank of | | | | | |
| America) | 0.08 | 12/7/14 | 6,640,000 | a | 6,640,000 |
| Memphis, | | | | | |
| CP (Liquidity Facility; Mizuho | | | | | |
| Bank, Ltd.) | 0.06 | 12/11/14 | 9,000,000 | | 9,000,000 |
| Metropolitan Government of | | | | | |
| Nashville and Davidson County, | | | | | |
| CP (Liquidity Facility; | | | | | |
| Sumitomo Mitsui Trust Bank, Ltd.) | 0.08 | 1/14/15 | 5,000,000 | | 5,000,000 |
| Montgomery County Public Building | | | | | |
| Authority, Pooled Financing | | | | | |
| Revenue (Tennessee County Loan | | | | | |
| Pool) (LOC; Bank of America) | 0.08 | 12/1/14 | 11,000,000 | a | 11,000,000 |
| Sevier County Public Building | | | | | |
| Authority, Local Government | | | | | |
| Public Improvement Revenue | | | | | |
| (LOC; Bank of America) | 0.04 | 12/7/14 | 9,600,000 | a | 9,600,000 |
| Texas—9.6% | | | | | |
| Dallas, | | | | | |
| CP (Liquidity Facility; Wells | | | | | |
| Fargo Bank) | 0.08 | 12/2/14 | 3,000,000 | | 3,000,000 |
| Dallas, | | | | | |
| GO Notes | 5.13 | 2/15/15 | 3,000,000 | | 3,031,128 |
| El Paso, | | | | | |
| Water and Sewer Revenue, CP | | | | | |
| (Liquidity Facility; JPMorgan | | | | | |
| Chase Bank) | 0.08 | 12/16/14 | 4,000,000 | | 4,000,000 |
| El Paso Independent School | | | | | |
| District, Unlimited Tax | | | | | |
| School Building Bonds | | | | | |
| (Liquidity Facility; JPMorgan | | | | | |
| Chase Bank and LOC; | | | | | |
| Permanent School Fund | | | | | |
| Guarantee Program) | 0.12 | 2/19/15 | 7,100,000 | | 7,100,000 |
| Gulf Coast Waste Disposal | | | | | |
| Authority, SWDR (Air | | | | | |
| Products Project) | 0.05 | 12/7/14 | 7,000,000 | a | 7,000,000 |
16
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Texas (continued) | | | | | |
| Gulf Coast Waste Disposal Authority, | | | | | |
| SWDR (Air Products Project) | 0.05 | 12/7/14 | 7,000,000 | a | 7,000,000 |
| Harris County Cultural Education | | | | | |
| Facilities Finance | | | | | |
| Corporation, Medical | | | | | |
| Facilities Mortgage Revenue, | | | | | |
| Refunding (Baylor College of | | | | | |
| Medicine) (LOC; Barclays Bank PLC) | 0.05 | 12/7/14 | 6,200,000 | a | 6,200,000 |
| Port of Port Arthur Navigation | | | | | |
| District, Revenue, CP (BASF SE) | 0.21 | 2/12/15 | 5,000,000 | | 5,000,000 |
| Richardson, | | | | | |
| Combination Tax and Revenue | | | | | |
| Certificates of Obligation | 0.75 | 2/15/15 | 2,435,000 | | 2,437,918 |
| Tarrant County Health Facilities | | | | | |
| Development Corporation, HR | | | | | |
| (Cook Children’s Medical | | | | | |
| Center Project) | 5.00 | 12/1/14 | 785,000 | | 785,000 |
| Utah—.8% | | | | | |
| Intermountain Power Agency, | | | | | |
| Power Supply Revenue, CP | | | | | |
| (Liquidity Facility; JPMorgan | | | | | |
| Chase Bank) | 0.10 | 2/10/15 | 4,000,000 | | 4,000,000 |
| Vermont—.7% | | | | | |
| Vermont Educational and Health | | | | | |
| Buildings Financing Agency, HR | | | | | |
| (Northeastern Vermont Regional | | | | | |
| Hospital Project) (LOC; TD Bank) | 0.05 | 12/1/14 | 3,500,000 | a | 3,500,000 |
| Virginia—1.3% | | | | | |
| Alexandria Industrial Development | | | | | |
| Authority, Headquarters | | | | | |
| Facilities Revenue (American | | | | | |
| Academy of Otolaryngology-Head | | | | | |
| and Neck Surgery Foundation, | | | | | |
| Inc.) (LOC; Bank of America) | 0.04 | 12/7/14 | 6,310,000 | a | 6,310,000 |
| Washington—.5% | | | | | |
| Pierce County Economic Development | | | | | |
| Corporation, Industrial | | | | | |
| Revenue (SeaTac Packaging | | | | | |
| Project) (LOC; HSBC Bank USA) | 0.11 | 12/7/14 | 2,510,000 | a | 2,510,000 |
The Fund 17
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Wisconsin—3.4% | | | | | |
| Middleton, | | | | | |
| Note Anticipation Notes | 1.50 | 12/15/15 | 2,500,000 | | 2,512,300 |
| Oak Creek, | | | | | |
| GO Promissory Notes | 2.00 | 4/1/15 | 2,550,000 | | 2,565,019 |
| PMA Levy and Aid Anticipation | | | | | |
| Notes Program, Note | | | | | |
| Participations | 1.00 | 7/23/15 | 3,000,000 | | 3,015,401 |
| PMA Levy and Aid Anticipation | | | | | |
| Notes Program, Note | | | | | |
| Participations | 1.00 | 10/23/15 | 3,000,000 | | 3,020,041 |
| Wisconsin Health and Educational | | | | | |
| Facilities Authority, Revenue, | | | | | |
| CP (Aurora Health Care) (LOC; | | | | | |
| JPMorgan Chase Bank) | 0.14 | 1/7/15 | 5,000,000 | | 5,000,000 |
| |
| Total Investments (cost $470,375,328) | | 99.5 | % | 470,375,328 |
| Cash and Receivables (Net) | | | .5 | % | 2,284,176 |
| Net Assets | | | 100.0 | % | 472,659,504 |
|
| a Variable rate demand note—rate shown is the interest rate in effect at November 30, 2014. Maturity date represents |
| the next demand date, or the ultimate maturity date if earlier. |
| b Securities exempt from registration pursuant to Rule 144A under the Securities Act of 1933.These securities may be |
| resold in transactions exempt from registration, normally to qualified institutional buyers.At November 30, 2014, |
| these securities amounted to $43,070,000 or 9.1% of net assets. |
| c The fund does not directly own the municipal security indicated; the fund owns an interest in a special purpose entity |
| that, in turn, owns the underlying municipal security.The special purpose entity permits the fund to own interests in |
| underlying assets, but in a manner structured to provide certain advantages not inherent in the underlying bonds (e.g., |
| enhanced liquidity, yields linked to short-term rates). |
| | | |
| Portfolio Summary (Unaudited)† | | |
| |
| | Value (%) | | Value (%) |
| Industrial | 16.1 | Special Tax | 4.5 |
| Education | 15.8 | Transportation Services | 3.3 |
| Health Care | 10.1 | Utility-Water and Sewer | 2.1 |
| Housing | 9.4 | Pollution Control | 1.6 |
| City | 8.8 | State/Territory | .8 |
| Utility-Electric | 8.0 | Other | 8.6 |
| County | 5.7 | | |
| Resource Recovery | 4.7 | | 99.5 |
18
| | | |
| Summary of Abbreviations | | |
| |
| ABAG | Association of Bay Area | ACA | American Capital Access |
| | Governments | | |
| AGC | ACE Guaranty Corporation | AGIC | Asset Guaranty Insurance Company |
| AMBAC | American Municipal Bond | ARRN | Adjustable Rate |
| | Assurance Corporation | | Receipt Notes |
| BAN | Bond Anticipation Notes | BPA | Bond Purchase Agreement |
| CIFG | CDC Ixis Financial Guaranty | COP | Certificate of Participation |
| CP | Commercial Paper | DRIVERS | Derivative Inverse |
| | | | Tax-Exempt Receipts |
| EDR | Economic Development | EIR | Environmental Improvement |
| | Revenue | | Revenue |
| FGIC | Financial Guaranty | FHA | Federal Housing |
| | Insurance Company | | Administration |
| FHLB | Federal Home | FHLMC | Federal Home Loan Mortgage |
| | Loan Bank | | Corporation |
| FNMA | Federal National | GAN | Grant Anticipation Notes |
| | Mortgage Association | | |
| GIC | Guaranteed Investment | GNMA | Government National Mortgage |
| | Contract | | Association |
| GO | General Obligation | HR | Hospital Revenue |
| IDB | Industrial Development Board | IDC | Industrial Development Corporation |
| IDR | Industrial Development | LIFERS | Long Inverse Floating |
| | Revenue | | Exempt Receipts |
| LOC | Letter of Credit | LOR | Limited Obligation Revenue |
| LR | Lease Revenue | MERLOTS | Municipal Exempt Receipts |
| | | | Liquidity Option Tender |
| MFHR | Multi-Family Housing Revenue | MFMR | Multi-Family Mortgage Revenue |
| PCR | Pollution Control Revenue | PILOT | Payment in Lieu of Taxes |
| P-FLOATS | Puttable Floating Option | PUTTERS | Puttable Tax-Exempt Receipts |
| | Tax-Exempt Receipts | | |
| RAC | Revenue Anticipation Certificates | RAN | Revenue Anticipation Notes |
| RAW | Revenue Anticipation Warrants | RIB | Residual Interest Bonds |
| ROCS | Reset Options Certificates | 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 | SPEARS | Short Puttable Exempt |
| | Mortgage Agency | | Adjustable Receipts |
| SWDR | Solid Waste Disposal Revenue | TAN | Tax Anticipation Notes |
| TAW | Tax Anticipation Warrants | TRAN | Tax and Revenue Anticipation Notes |
| XLCA | XL Capital Assurance | | |
| |
| See notes to financial statements. | | |
The Fund 19
|
| STATEMENT OF ASSETS AND LIABILITIES |
| November 30, 2014 (Unaudited) |
| | |
| | Cost | Value |
| Assets ($): | | |
| Investments in securities—See Statement of Investments | 470,375,328 | 470,375,328 |
| Cash | | 4,467,433 |
| Interest receivable | | 420,752 |
| Prepaid expenses | | 27,269 |
| | | 475,290,782 |
| Liabilities ($): | | |
| Due to The Dreyfus Corporation and affiliates—Note 2(b) | | 45,397 |
| Payable for investment securities purchased | | 2,512,300 |
| Payable for shares of Common Stock redeemed | | 20,783 |
| Accrued expenses | | 52,798 |
| | | 2,631,278 |
| Net Assets ($) | | 472,659,504 |
| Composition of Net Assets ($): | | |
| Paid-in capital | | 472,659,504 |
| Net Assets ($) | | 472,659,504 |
| Shares Outstanding | | |
| (5 billion shares of $.001 par value Common Stock authorized) | | 472,694,970 |
| Net Asset Value, offering and redemption price per share ($) | | 1.00 |
| See notes to financial statements. | | |
20
| | |
| STATEMENT OF OPERATIONS | | |
| Six Months Ended November 30, 2014 (Unaudited) | | |
| |
| |
| |
| |
| Investment Income ($): | | |
| Interest Income | 257,619 | |
| Expenses: | | |
| Management fee—Note 2(a) | 1,131,820 | |
| Shareholder servicing costs—Note 2(b) | 129,665 | |
| Professional fees | 33,707 | |
| Registration fees | 21,722 | |
| Custodian fees—Note 2(b) | 19,879 | |
| Directors’ fees and expenses—Note 2(c) | 12,702 | |
| Prospectus and shareholders’ reports | 9,029 | |
| Miscellaneous | 15,337 | |
| Total Expenses | 1,373,861 | |
| Less—reduction in expenses due to undertaking—Note 2(a) | (1,116,242 | ) |
| Less—reduction in fees due to earnings credits—Note 2(b) | (55 | ) |
| Net Expenses | 257,564 | |
| Investment Income—Net, representing net increase | | |
| in net assets resulting from operations | 55 | |
| See notes to financial statements. | | |
The Fund 21
STATEMENT OF CHANGES IN NET ASSETS
| | | | |
| | Six Months Ended | | | |
| | November 30, 2014 | | Year Ended | |
| | (Unaudited) | | May 31, 2014 | |
| Operations ($): | | | | |
| Investment Income-Net, representing | | | | |
| net increase in net assets resulting | | | | |
| from operations | 55 | | 123 | |
| Dividends to Shareholders from ($): | | | | |
| Investment income—net | (55 | ) | (123 | ) |
| Capital Stock Transactions ($1.00 per share): | | | | |
| Net proceeds from shares sold | 387,670,659 | | 906,256,478 | |
| Dividends reinvested | 52 | | 113 | |
| Cost of shares redeemed | (368,917,824 | ) | (950,102,519 | ) |
| Increase (Decrease) in Net Assets | | | | |
| from Capital Stock Transactions | 18,752,887 | | (43,845,928 | ) |
| Total Increase (Decrease) in Net Assets | 18,752,887 | | (43,845,928 | ) |
| Net Assets ($): | | | | |
| Beginning of Period | 453,906,617 | | 497,752,545 | |
| End of Period | 472,659,504 | | 453,906,617 | |
| See notes to financial statements. | | | | |
22
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, 2014 | | | | Year Ended May 31, | | | |
| | (Unaudited) | | 2014 | | 2013 | | 2012 | | 2011 | | 2010 | |
| Per Share Data ($): | | | | | | | | | | | | |
| Net asset value, | | | | | | | | | | | | |
| beginning of period | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 | |
| Investment Operations: | | | | | | | | | | | | |
| Investment income—net | .000 | a | .000 | a | .000 | a | .000 | a | .001 | | .001 | |
| Distributions: | | | | | | | | | | | | |
| Dividends from | | | | | | | | | | | | |
| investment income—net | (.000 | )a | (.000 | )a | (.000 | )a | (.000 | )a | (.001 | ) | (.001 | ) |
| Net asset value, end of period | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 | |
| Total Return (%) | .00 | b,c | .00 | b | .00 | b | .03 | | .05 | | .07 | |
| Ratios/Supplemental Data (%): | | | | | | | | | | | | |
| Ratio of total expenses | | | | | | | | | | | | |
| to average net assets | .61 | c | .61 | | .62 | | .64 | | .65 | | .62 | |
| Ratio of net expenses | | | | | | | | | | | | |
| to average net assets | .11 | c | .14 | | .23 | | .18 | | .30 | | .45 | |
| Ratio of net investment income | | | | | | | | | | | | |
| to average net assets | .00 | b,c | .00 | b | .00 | b | .03 | | .05 | | .07 | |
| Net Assets, end of period | | | | | | | | | | | | |
| ($ x 1,000) | 472,660 | | 453,907 | | 497,753 | | 419,287 | | 476,210 | | 508,402 | |
| | | | | | | | | | |
| |
| a | Amount represents less than $.001 per share. |
| b | Amount represents less than .01%. |
| c | Annualized. |
See notes to financial statements.
The Fund 23
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 seek 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. 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”) is 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 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.
(a) Portfolio valuation: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 under the Act. If amortized
24
cost is determined not to approximate market value, the fair value of the portfolio securities will be determined by procedures established by and under the general supervision of the fund’s Board of Directors (the “Board”).
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
The Fund 25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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 within Level 2 of the fair value hierarchy.
The following is a summary of the inputs used as of November 30, 2014 in valuing the fund’s investments:
| |
| | Short-Term |
| Valuation Inputs | Investments ($)† |
| Level 1—Unadjusted Quoted Prices | — |
| Level 2—Other Significant Observable Inputs | 470,375,328 |
| Level 3—Significant Unobservable Inputs | — |
| Total | 470,375,328 |
| † See Statement of Investments for additional detailed categorizations. | |
At November 30, 2014, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.
(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 is 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.
(c) Dividends to shareholders: It is the policy of the fund to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, which can distribute tax-exempt dividends, by complying with the applicable provisions of the Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
26
As of and during the period ended November 30, 2014, 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 ended November 30, 2014, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended May 31, 2014 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended May 31, 2014 was 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, 2014, 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).
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 waive receipt of the management fee and/or reimburse operating expenses in order to facilitate a daily yield at or above a certain level which may change from time to time. This undertaking is voluntary and not contractual, and may be terminated at any time. The reduction in expenses, pursuant to the undertaking, amounted to $1,116,242 during the period ended November 30, 2014.
(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
The Fund 27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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, 2014, the fund was charged $93,733 pursuant to the Shareholder Services Plan.
The fund has arrangements with the transfer agent and the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency and custody fees. For financial reporting purposes, the fund includes net earnings credits as an expense offset in the Statement of Operations.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing transfer agency and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended November 30, 2014, the fund was charged $30,263 for transfer agency services and $1,450 for cash management services. These fees are included in Shareholder servicing costs in the Statement of Operations. Cash management fees were partially offset by earnings credits of $55.
The fund compensates The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a custody agreement for providing custodial services for the fund.These fees are determined based on net assets, geographic region and transaction activity. During the period ended November 30, 2014, the fund was charged $19,879 pursuant to the custody agreement.
The fund compensates The Bank of New York Mellon for performing certain cash management services related to fund subscriptions and redemptions, including shareholder redemption draft processing, under a cash management agreement. During the period ended November 30, 2014, the fund was charged $1,092 pursuant to the agreement, which is included in Shareholder servicing costs in the Statement of Operations.
During the period ended November 30, 2014, the fund was charged $3,616 for services performed by the Chief Compliance Officer and his staff.
28
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $187,736, Shareholder Services Plan fees $15,000, custodian fees $17,920, Chief Compliance Officer fees $1,234 and transfer agency fees $11,700, which are offset against an expense reimbursement currently in effect in the amount of $188,193.
(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 affiliated funds under specified conditions outlined in procedures adopted by the Board. 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 Directors and/or common officers, complies with Rule 17a-7 under the Act. During the period ended November 30, 2014, the fund engaged in purchases and sales of securities pursuant to Rule 17a-7 under the Act amounting to $265,985,000 and $127,100,000, respectively.
NOTE 4—Regulatory Developments:
On July 23, 2014, the SEC adopted amendments to the rules that govern money market mutual funds. In part, the amendments will require structural changes to most types of money market funds to one extent or another; however, the SEC provided for an extended two-year transition period to comply with such structural requirements. At this time, management is evaluating the reforms adopted and the manner for implementing these reforms over time and its impact on the financial statements.
The Fund 29
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| INFORMATION ABOUT THE RENEWAL OF THE |
| FUND’S MANAGEMENT AGREEMENT (Unaudited) |
At a meeting of the fund’s Board of Directors held on November 3-4, 2014, the Board considered the renewal of the fund’s Management Agreement pursuant to which Dreyfus provides the fund with investment advisory and administrative services (the “Agreement”).The Board members, a majority of whom are not “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 Dreyfus representatives. In considering the renewal of the Agreement, the Board considered all factors that it believed to be relevant, including those discussed below. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.
Analysis of Nature, Extent, and Quality of Services Provided to the Fund. The Board considered information provided to them at the meeting and in previous presentations from Dreyfus representatives regarding the nature, extent, and quality of the services provided to funds in the Dreyfus fund complex. Dreyfus provided the number of open accounts in the fund, the fund’s asset size and the allocation of fund assets among distribution channels. Dreyfus also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the Dreyfus fund complex (such as retail direct or intermediary, in which intermediaries typically are paid by the fund and/or Dreyfus) and Dreyfus’ corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each intermediary or distribution channel, as applicable to the fund.
The Board also considered research support available to, and portfolio management capabilities of, the fund’s portfolio management personnel and that Dreyfus also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board also considered Dreyfus’ extensive administrative, accounting, and compliance infrastructures.
30
Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board reviewed reports prepared by Lipper, Inc. (“Lipper”), an independent provider of investment company data, which included information comparing (1) the fund’s performance with the performance of a group of comparable funds (the “Performance Group”) and with a broader group of funds (the “Performance Universe”), all for various periods ended September 30, 2014, and (2) the fund’s actual and contractual management fees and total expenses with those of a group of comparable funds (the “Expense Group”) and with a broader group of funds (the “Expense Universe”), the information for which was derived in part from fund financial statements available to Lipper as of the date of its analysis. Dreyfus previously had furnished the Board with a description of the methodology Lipper used to select the Performance Group and Performance Universe and the Expense Group and Expense Universe.
Dreyfus representatives stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations that may be applicable to the fund and comparison funds. The Board discussed the results of the comparisons and noted that the fund’s total return performance was at or two basis points below the Performance Group median for the various periods and above or one basis point below the Performance Universe median for the various periods.
The Board also reviewed the range of actual and contractual management fees and total expenses of the Expense Group and Expense Universe funds and discussed the results of the comparisons. The Board noted that the fund’s contractual management fee was above the Expense Group median, the fund’s actual management fee was below the Expense Group median and above the Expense Universe median and the fund’s total expenses were below the Expense Group and Expense Universe medians.
The Fund 31
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| INFORMATION ABOUT THE RENEWAL OF THE FUND’S |
| MANAGEMENT AGREEMENT (Unaudited) (continued) |
Dreyfus representatives noted that Dreyfus has currently undertaken to limit fund expenses to maintain a minimum yield of .00 of 1%. Dreyfus representatives further noted that such expense limitations may fluctuate daily, are temporary and not contractual, and may be terminated by Dreyfus at any time without notice.The Board considered the duration and extent of the fee waiver/expense reimbursement undertaking by Dreyfus to support a minimum zero or positive daily yield, as applicable from time to time, in the ongoing, historically low interest rate environment, and the Board noted the extent to which comparisons to the Performance Group and Performance Universe funds might be affected by similar undertakings.
Dreyfus representatives reviewed with the Board the management or investment advisory fees paid by funds advised or administered by Dreyfus that are in the same Lipper category as the fund (the “Similar Funds”), and explained the nature of the Similar Funds.They discussed differences in fees paid and the relationship of the fees paid in light of any differences in the services provided and other relevant factors.The Board considered the relevance of the fee information provided for the Similar Funds to evaluate the appropriateness and reasonableness of the fund’s management fee.
Analysis of Profitability and Economies of Scale. Dreyfus representatives reviewed the expenses allocated and profit received by Dreyfus and its affiliates and the resulting profitability percentage for managing the fund and the aggregate profitability percentage to Dreyfus and its affiliates for managing the funds in the Dreyfus fund complex, and the method used to determine the expenses and profit. The Board concluded that the profitability results were not unreasonable, given the services rendered and service levels provided by Dreyfus. The Board also noted the fee waiver and expense reimbursement arrangement and its effect on the profitability of Dreyfus and its affiliates. The Board also had been provided with information prepared by an independent consulting firm regarding Dreyfus’ approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus fund complex. The consulting firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.
32
The Board considered on the advice of its counsel the profitability analysis (1) as part of its evaluation of whether the fees under the Agreement bear a reasonable relationship to the mix of services provided by Dreyfus, including the nature, extent and quality of such services, and (2) in light of the relevant circumstances for the fund 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 shareholders. Dreyfus representatives noted that a discussion of economies of scale is predicated on a fund having achieved a substantial size with increasing assets and that, if a fund’s assets had been stable or decreasing, the possibility that Dreyfus may have realized any economies of scale would be less. Dreyfus representatives also noted that, as a result of shared and allocated costs among funds in the Dreyfus fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in the fund’s asset level. The Board also considered potential benefits to Dreyfus from acting as investment adviser and noted that there were no soft dollar arrangements in effect for trading the fund’s investments.
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 the renewal of the Agreement. Based on the discussions and considerations as described above, the Board concluded and determined as follows.
The Board concluded that the nature, extent and quality of the services provided by Dreyfus are adequate and appropriate.
The Board generally was satisfied with the fund’s relative performance, in light of the considerations described above.
The Board concluded that the fee paid to Dreyfus was reasonable in light of the considerations described above.
The Fund 33
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| INFORMATION ABOUT THE RENEWAL OF THE FUND’S |
| MANAGEMENT AGREEMENT (Unaudited) (continued) |
The Board determined that the economies of scale which may accrue to Dreyfus and its affiliates in connection with the management of the fund had been adequately considered by Dreyfus in connection with the fee rate charged to the fund pursuant to the Agreement and that, to the extent in the future it were 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.
In evaluating the Agreement, the Board considered these conclusions and determinations and also relied on its previous knowledge, gained through meetings and other interactions with Dreyfus and its affiliates, of the fund and the services provided to the fund by Dreyfus. The Board also relied on information received on a routine and regular basis throughout the year relating to the operations of the fund and the investment management and other services provided under the Agreement, including information on the investment performance of the fund in comparison to similar mutual funds and benchmark performance measures; general market outlook as applicable to the fund; and compliance reports. In addition, the Board’s consideration of the contractual fee arrangements for this fund had the benefit of a number of years of reviews of prior or similar agreements during which lengthy discussions took place between the Board and Dreyfus representatives. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on their consideration of the same or similar arrangements in prior years.The Board determined to renew the Agreement.
34
For More Information
Ticker Symbol: DTEXX
Telephone 1-800-DREYFUS
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-DREYFUS.
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.
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: January 22, 2015
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 22, 2015
By: /s/ James Windels
James Windels,
Treasurer
Date: January 22, 2015
EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)
