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) | |
| | |
| Janette E. Farragher, 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: | 5/31/12 | |
| | | | | | | |
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 |
| 19 | Statement of Assets and Liabilities |
| 20 | Statement of Operations |
| 21 | Statement of Changes in Net Assets |
| 22 | Financial Highlights |
| 23 | Notes to Financial Statements |
| 30 | Report of Independent Registered Public Accounting Firm |
| 31 | Important Tax Information |
| 32 | Board Members Information |
| 35 | 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 present to you this annual report for Dreyfus Municipal Money Market Fund, Inc., covering the 12-month period from June 1, 2011, through May 31, 2012. 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.
U.S. financial markets generally rebounded for most of the reporting period before weakening again in the spring of 2012 due to a resurgent sovereign debt crisis in Europe and disappointing economic data in the United States.These developments created a “risk-on/risk-off” investment climate in which market sentiment shifted rapidly between optimism and caution. In contrast, yields of money market instruments remained stable near historical lows, as an aggressively accommodative monetary policy from the Federal Reserve Board prevented yields from rising or falling appreciably in light of changing economic news.
Despite recently troubling headlines, we believe that U.S. economic trends remain favorable, as evidenced by signs of strength in some of the domestic economy’s more economically sensitive areas. On the other hand, net exports may prove to be a slight drag on domestic growth since the economy in the United States is stronger than in many of its trading partners. On the whole, we expect near-trend growth in the U.S. economy for the remainder of 2012.
As always, we encourage you to discuss our observations with your financial advisor.
Thank you for your continued confidence and support.
Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
June 15, 2012
2
DISCUSSION OF FUND PERFORMANCE
For the period of June 1, 2011, through May 31, 2012, as provided by Colleen Meehan, Senior Portfolio Manager
Fund and Market Performance Overview
For the 12-month period ended May 31, 2012, Dreyfus Municipal Money Market Fund produced a yield of 0.03%.Taking into account the effects of compounding, the fund produced an effective yield of 0.03%.1
The U.S. economic recovery proved erratic during the reporting period, but yields of tax-exempt money market instruments remained stable near zero percent as the Federal Reserve Board (the “Fed”) left short-term interest rates unchanged at historically low levels.
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
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.
Economic Sentiment Shifted, but Yields Remained Low
The reporting period began amid heightened volatility in most financial markets, as investors responded nervously to a sovereign debt crisis in Europe, disappointing U.S. economic data and a contentious political debate regarding government spending and borrowing that culminated in the unprecedented downgrade of long-term U.S. debt securities by a major bond rating agency.
The macroeconomic picture brightened in the fall when the European Union appeared to take credible steps to address the region’s problems and the U.S. unemployment rate dropped sharply. However, disappointing U.S. economic news and renewed concerns in Europe in the spring of 2012 reduced expectations for a more robust recovery. Despite these changes in the economic outlook, the Fed maintained the policy stance it first established in December 2008, leaving the overnight federal funds rate in a range between 0% and 0.25%, and municipal money market yields remained near zero percent throughout the reporting period.
Demand for municipal money market instruments proved robust during the reporting period. Narrow yield differences along the market’s maturity range and attractive after-tax yields compared to taxable money market instruments attracted individual investors as well as institutions that typically participate in taxable and longer-term bond markets. Consequently, yields of variable-rate demand notes (VRDNs) remained in a relatively narrow trading range. Meanwhile, the supply of newly issued tax-exempt money market instruments remained relatively steady as highly rated banks filled a gap left by struggling European financial institutions in issuing the letters of credit that typically backVRDNs.
Variable rate demand note issues previously backed by European bank letters of credit have been successfully remarketed with new letters of credit provided by tier one banks.The current low rate environment and flat yield curve has provided municipal issuers with the opportunity to fix out their debt, taking advantage of the decreased costs of funding.
4
From a credit-quality perspective, state general funds have achieved several consecutive quarters of growth in personal income tax and sales tax revenues, and many states and municipalities have reduced spending to balance their budgets.
A Credit-Conscious Investment Posture
We continued to maintain a careful and well-researched approach to credit selection.We emphasized state general obligation bonds; essential service revenue bonds issued by water, sewer and electric enterprises; and certain local credits from issuers with strong financial positions and stable tax bases.We generally continued to shy away from instruments issued by localities that depend heavily on state aid, and we maintained the fund’s weighted average maturity in a range that was roughly in line with industry averages.
Outlook Clouded by Economic Uncertainty
We are cautiously optimistic regarding the prospects for economic growth over the remainder of 2012. Strains in the global financial markets have continued to pose significant challenges, but the Fed expects a moderate pace of economic growth and a gradually declining unemployment rate. In addition, the Fed has signaled repeatedly that it is prepared to maintain short-term interest rates near current levels through late 2014. With money market yields likely to remain near historical lows for some time to come, we believe that the prudent course continues to be an emphasis on preservation of capital and liquidity.
June 15, 2012
| |
| | 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 | 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, the fund yields would have been lower. |
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, 2011 to May 31, 2012. 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, 2012 |
| |
| Expenses paid per $1,000† | $ | 1.00 |
| Ending value (after expenses) | $ | 1,000.10 |
|
| 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, 2012 |
| |
| Expenses paid per $1,000† | $ | 1.01 |
| Ending value (after expenses) | $ | 1,024.00 |
† Expenses are equal to the fund’s annualized expense ratio of .20%, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
6
|
| STATEMENT OF INVESTMENTS |
| May 31, 2012 |
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments—102.1% | Rate (%) | Date | Amount ($) | | Value ($) |
| Alabama—.7% | | | | | |
| Columbia Industrial Development | | | | | |
| Board, PCR, Refunding (Alabama | | | | | |
| Power Company Project) | 0.19 | 6/1/12 | 3,000,000 | a | 3,000,000 |
| California—6.0% | | | | | |
| Alameda County Industrial | | | | | |
| Development Authority, Revenue | | | | | |
| (Golden West Paper Converting | | | | | |
| Corporation Project) (LOC; | | | | | |
| Comerica Bank) | 0.27 | 6/7/12 | 3,315,000 | a | 3,315,000 |
| California Pollution Control | | | | | |
| Financing Authority, SWDR | | | | | |
| (GreenWaste Recovery, Inc. | | | | | |
| Project) (LOC; Comerica Bank) | 0.28 | 6/7/12 | 5,730,000 | a | 5,730,000 |
| California Pollution Control | | | | | |
| Financing Authority, SWDR | | | | | |
| (Sunset Waste Paper, Inc. | | | | | |
| Project) (LOC; Comerica Bank) | 0.28 | 6/7/12 | 2,600,000 | a | 2,600,000 |
| California Statewide Communities | | | | | |
| Development Authority, Revenue | | | | | |
| (Kaiser Permanente) | 0.17 | 6/7/12 | 5,000,000 | a | 5,000,000 |
| California Statewide Communities | | | | | |
| Development Authority, | | | | | |
| Revenue, CP (Kaiser Permanente) | 0.25 | 10/18/12 | 3,500,000 | | 3,500,000 |
| California Statewide Communities | | | | | |
| Development Authority, | | | | | |
| Revenue, CP (Kaiser Permanente) | 0.25 | 12/13/12 | 5,000,000 | | 5,000,000 |
| Colorado—5.1% | | | | | |
| Colorado, | | | | | |
| Education Loan Program | | | | | |
| Revenue, TRAN | 2.00 | 6/29/12 | 5,000,000 | | 5,007,142 |
| Colorado Housing and Finance | | | | | |
| Authority, SFMR (Liquidity | | | | | |
| Facility; Royal Bank of Canada) | 0.19 | 6/7/12 | 4,500,000 | a | 4,500,000 |
| Denver City and County, | | | | | |
| Airport Revenue, CP (Liquidity | | | | | |
| Facility; Barclays Bank PLC) | 0.21 | 8/9/12 | 7,000,000 | | 7,000,000 |
STATEMENT OF INVESTMENTS (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Colorado (continued) | | | | | |
| RBC Municipal Products Inc. Trust | | | | | |
| (Series E-25) (Denver City and | | | | | |
| County, Aviation Airport | | | | | |
| System Revenue) (Liquidity | | | | | |
| Facility; Royal Bank of Canada | | | | | |
| and LOC; Royal Bank of Canada) | 0.21 | 6/7/12 | 5,000,000 | a,b,c | 5,000,000 |
| Connecticut—.5% | | | | | |
| Beacon Falls, | | | | | |
| GO Notes, BAN | 1.50 | 7/19/12 | 1,454,000 | | 1,455,559 |
| Connecticut Development Authority, | | | | | |
| IDR (AcuCut, Inc. Project) | | | | | |
| (LOC; Wells Fargo Bank) | 0.35 | 6/7/12 | 740,000 | a | 740,000 |
| District of Columbia—1.7% | | | | | |
| District of Columbia, | | | | | |
| Enterprise Zone Revenue | | | | | |
| (Trigen-Pepco Energy Services, | | | | | |
| LLC Issue) (LOC; M&T Trust) | 0.30 | 6/7/12 | 7,160,000 | a | 7,160,000 |
| Florida—12.8% | | | | | |
| Alachua Housing Finance Authority, | | | | | |
| MFHR (Edenwood Park Project) | | | | | |
| (P-FLOATS Series PT-3319) | | | | | |
| (Liquidity Facility; FHLMC and | | | | | |
| LOC; FHLMC) | 0.42 | 6/7/12 | 3,105,000 | a,b,c | 3,105,000 |
| Broward County Housing | | | | | |
| Finance Authority, MFHR | | | | | |
| (Cypress Grove Apartments | | | | | |
| Project) (LOC; FNMA) | 0.23 | 6/7/12 | 20,000,000 | a | 20,000,000 |
| Collier County Health Facilities | | | | | |
| Authority, Revenue, CP | | | | | |
| (Cleveland Clinic Health System) | 0.18 | 8/2/12 | 10,000,000 | | 10,000,000 |
| Highlands County Health Facilities | | | | | |
| Authority, HR (Adventist | | | | | |
| Health System/Sunbelt | | | | | |
| Obligated Group) | 0.14 | 6/7/12 | 12,000,000 | a | 12,000,000 |
| Hillsborough County Industrial | | | | | |
| Development Authority, IDR | | | | | |
| (Seaboard Tampa Terminals | | | | | |
| Venture Project) (LOC; | | | | | |
| Northern Trust Company) | 0.51 | 6/7/12 | 4,000,000 | a | 4,000,000 |
8
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Florida (continued) | | | | | |
| Orange County Health Facilities | | | | | |
| Authority, HR (Orlando Regional | | | | | |
| Healthcare System) (LOC; Branch | | | | | |
| Banking and Trust Co.) | 0.18 | 6/7/12 | 2,500,000 | a | 2,500,000 |
| Polk County Industrial Development | | | | | |
| Authority, IDR (Florida | | | | | |
| Treatt, Inc. Project) (LOC; | | | | | |
| Bank of America) | 0.49 | 6/7/12 | 2,580,000 | a | 2,580,000 |
| Georgia—3.4% | | | | | |
| Carrollton Independent School | | | | | |
| System, GO Notes | 4.50 | 4/1/13 | 1,000,000 | | 1,033,987 |
| Floyd County Development | | | | | |
| Authority, Revenue (Berry | | | | | |
| College Project) (LOC; FHLB) | 0.21 | 6/7/12 | 6,000,000 | a | 6,000,000 |
| Georgia, | | | | | |
| GO Notes | 5.00 | 10/1/12 | 3,200,000 | | 3,251,289 |
| Georgia Municipal Gas Authority, | | | | | |
| Gas Revenue, Refunding (Gas | | | | | |
| Portfolio III Project) | 2.00 | 11/13/12 | 2,000,000 | | 2,014,185 |
| Macon County Development | | | | | |
| Authority, IDR (Swartz Ag, LLC | | | | | |
| Project) (LOC; Branch Banking | | | | | |
| and Trust Co.) | 0.26 | 6/7/12 | 1,840,000 | a | 1,840,000 |
| Hawaii—.5% | | | | | |
| Hawaii, | | | | | |
| GO Notes, Refunding | 5.00 | 7/1/12 | 2,000,000 | | 2,008,090 |
| Illinois—1.8% | | | | | |
| Southwestern Illinois Development | | | | | |
| Authority, Solid Waste | | | | | |
| Disposal Facilities Revenue | | | | | |
| (Center Ethanol Company, LLC | | | | | |
| Project) (LOC; FHLB) | 0.20 | 6/7/12 | 7,370,000 | a | 7,370,000 |
| Indiana—2.9% | | | | | |
| Indiana Bond Bank, | | | | | |
| Advance Funding Program Notes | 1.25 | 1/3/13 | 1,400,000 | | 1,407,397 |
| Noblesville, | | | | | |
| EDR (GreyStone Apartments | | | | | |
| Project) (LOC; Bank of America) | 0.35 | 6/7/12 | 10,845,000 | a | 10,845,000 |
STATEMENT OF INVESTMENTS (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Iowa—1.4% | | | | | |
| Iowa Finance Authority, | | | | | |
| SWDR (MidAmerican | | | | | |
| Energy Project) | 0.25 | 6/7/12 | 6,000,000 | a | 6,000,000 |
| Louisiana—5.6% | | | | | |
| Ascension Parish Industrial | | | | | |
| Development Board, Revenue | | | | | |
| (International Matex Tank | | | | | |
| Terminals—Geismar Project) | | | | | |
| (LOC; FHLB) | 0.21 | 6/7/12 | 9,000,000 | a | 9,000,000 |
| Louisiana Public Facilities | | | | | |
| Authority, Revenue (Air | | | | | |
| Products and Chemicals Project) | 0.20 | 6/1/12 | 4,000,000 | a | 4,000,000 |
| Louisiana Public Facilities | | | | | |
| Authority, Revenue (Air | | | | | |
| Products and Chemicals Project) | 0.17 | 6/7/12 | 6,000,000 | a | 6,000,000 |
| Louisiana Public Facilities | | | | | |
| Authority, Revenue (Tiger | | | | | |
| Athletic Foundation Project) | | | | | |
| (LOC; FHLB) | 0.18 | 6/7/12 | 4,600,000 | a | 4,600,000 |
| Maryland—.4% | | | | | |
| Baltimore County, | | | | | |
| Revenue, Refunding (Shade Tree | | | | | |
| Trace Apartments Facility) | | | | | |
| (LOC; M&T Trust) | 0.25 | 6/7/12 | 1,000,000 | a | 1,000,000 |
| Prince George’s County, | | | | | |
| Consolidated Public | | | | | |
| Improvement GO Notes | 5.00 | 7/15/12 | 650,000 | | 653,708 |
| Massachusetts—.5% | | | | | |
| Worcester, | | | | | |
| GO Notes, BAN | 1.00 | 11/8/12 | 2,000,000 | | 2,005,480 |
| Michigan—2.6% | | | | | |
| Michigan Finance Authority, | | | | | |
| Unemployment Obligation | | | | | |
| Assessment Revenue | | | | | |
| (LOC; Citibank NA) | 0.20 | 6/7/12 | 11,000,000 | a | 11,000,000 |
10
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Minnesota—1.2% | | | | | |
| Rochester, | | | | | |
| Health Care Facilities Revenue, CP | | | | | |
| (Mayo Clinic) (Liquidity Facility; | | | | | |
| Wells Fargo Bank) | 0.21 | 7/16/12 | 5,000,000 | | 5,000,000 |
| Nevada—2.6% | | | | | |
| Las Vegas Valley Water District, | | | | | |
| CP (Liquidity Facility; | | | | | |
| JPMorgan Chase Bank) | 0.17 | 7/19/12 | 5,890,000 | | 5,890,000 |
| Las Vegas Valley Water District, | | | | | |
| CP (LOC; Wells Fargo Bank) | 0.24 | 7/9/12 | 5,000,000 | | 5,000,000 |
| New Hampshire—2.2% | | | | | |
| New Hampshire, | | | | | |
| GO Notes, Refunding | 5.00 | 10/15/12 | 900,000 | | 915,874 |
| New Hampshire Health and | | | | | |
| Education Facilities Authority, | | | | | |
| HR (Catholic Medical Center | | | | | |
| Issue) (LOC; FHLB) | 0.19 | 6/7/12 | 8,235,000 | a | 8,235,000 |
| New Jersey—2.3% | | | | | |
| Paterson, | | | | | |
| GO Notes, BAN | 1.50 | 6/6/13 | 2,500,000 | | 2,506,150 |
| Tobacco Settlement Financing | | | | | |
| Corporation of New Jersey, | | | | | |
| Tobacco Settlement Asset-Backed | | | | | |
| Bonds (Prerefunded) | 6.00 | 6/1/12 | 3,725,000 | d | 3,725,000 |
| Woodbridge Township Board of | | | | | |
| Education, Temporary Notes | 1.00 | 2/6/13 | 3,400,000 | | 3,411,551 |
| New York—1.4% | | | | | |
| New York City Transitional Finance | | | | | |
| Authority, Future Tax Secured | | | | | |
| Revenue (Liquidity Facility; | | | | | |
| Bank of America) | 0.20 | 6/1/12 | 5,835,000 | a | 5,835,000 |
| North Carolina—1.6% | | | | | |
| North Carolina, | | | | | |
| GO Notes (Higher Education) | 5.00 | 6/1/12 | 1,000,000 | | 1,000,000 |
STATEMENT OF INVESTMENTS (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| North Carolina (continued) | | | | | |
| Wells Fargo Stage Trust (Series | | | | | |
| 136C) (North Carolina, Capital | | | | | |
| Improvement Limited Obligation | | | | | |
| Bonds) (Liquidity Facility; | | | | | |
| Wells Fargo Bank) | 0.20 | 6/7/12 | 5,515,000 | a,b,c | 5,515,000 |
| Ohio—5.4% | | | | | |
| Allen County, | | | | | |
| Hospital Facilities Revenue, | | | | | |
| (Catholic Health Partners) | 0.17 | 6/7/12 | 10,000,000 | a | 10,000,000 |
| Columbus, | | | | | |
| Sewerage System Revenue | | | | | |
| (JPMorgan Chase PUTTERS, | | | | | |
| Series 2456) (Liquidity | | | | | |
| Facility; JPMorgan Chase Bank) | 0.18 | 6/7/12 | 1,400,000 | a,b,c | 1,400,000 |
| Cuyahoga County, | | | | | |
| IDR (King Nut Project) (LOC; | | | | | |
| National City Bank) | 0.29 | 6/7/12 | 2,205,000 | a | 2,205,000 |
| Cuyahoga County, | | | | | |
| IDR (King Nut Project) (LOC; | | | | | |
| National City Bank) | 0.29 | 6/7/12 | 2,130,000 | a | 2,130,000 |
| Ohio Housing Finance Agency, | | | | | |
| Residential Mortgage Revenue | | | | | |
| (Mortgage-Backed Securities | | | | | |
| Program) (Liquidity Facility; | | | | | |
| Citibank NA and LOC; GNMA) | 0.27 | 6/7/12 | 5,000,000 | a | 5,000,000 |
| Union Township, | | | | | |
| GO Notes, BAN (Various Purpose) | 1.13 | 9/12/12 | 2,000,000 | | 2,002,653 |
| Oregon—1.2% | | | | | |
| Oregon, | | | | | |
| GO Notes (Veterans’ Welfare | | | | | |
| Bonds) (Liquidity Facility; | | | | | |
| Bank of Tokyo-Mitsubishi UFJ) | 0.18 | 6/7/12 | 5,000,000 | a | 5,000,000 |
| Pennsylvania—18.0% | | | | | |
| Allegheny County, | | | | | |
| GO Notes, TRAN | 2.00 | 7/16/12 | 5,500,000 | | 5,512,088 |
| Berks County Municipal Authority, | | | | | |
| Revenue (The Reading Hospital | | | | | |
| and Medical Center Project) | 0.34 | 8/2/12 | 4,500,000 | | 4,500,000 |
12
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Pennsylvania (continued) | | | | | |
| Emmaus General Authority, | | | | | |
| Local Government Revenue | | | | | |
| (Bond Pool Program) | | | | | |
| (LOC; U.S. Bank NA) | 0.19 | 6/7/12 | 10,500,000 | a | 10,500,000 |
| Emmaus General Authority, | | | | | |
| Local Government Revenue | | | | | |
| (Bond Pool Program) | | | | | |
| (LOC; U.S. Bank NA) | 0.19 | 6/7/12 | 13,500,000 | a | 13,500,000 |
| Franklin County Industrial | | | | | |
| Development Authority, Revenue | | | | | |
| (James and Donna Martin Project) | | | | | |
| (LOC; Wells Fargo Bank) | 0.38 | 6/7/12 | 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) | 0.23 | 6/7/12 | 1,400,000 | a | 1,400,000 |
| Montgomery County Higher Education | | | | | |
| and Health Authority, Revenue | | | | | |
| (Pennsylvania Higher Education | | | | | |
| and Health Loan Program) | | | | | |
| (LOC; M&T Trust) | 0.27 | 6/7/12 | 4,115,000 | a | 4,115,000 |
| Pennsylvania Economic Development | | | | | |
| Financing Authority, Revenue | | | | | |
| (Evergreen Community Power | | | | | |
| Facility) (LOC; M&T Trust) | 0.35 | 6/7/12 | 15,000,000 | a | 15,000,000 |
| Pittsburgh and Allegheny County | | | | | |
| Sports and Exhibition | | | | | |
| Authority, Commonwealth LR | | | | | |
| (Insured; Assured Guaranty | | | | | |
| Municipal Corp. and Liquidity | | | | | |
| Facility; PNC Bank NA) | 0.47 | 6/7/12 | 15,000,000 | a | 15,000,000 |
| RBC Municipal Products Inc. Trust | | | | | |
| (Series E-16) (Allegheny | | | | | |
| County Hospital Development | | | | | |
| Authority, Revenue (University | | | | | |
| of Pittsburgh Medical Center)) | | | | | |
| (Liquidity Facility; Royal | | | | | |
| Bank of Canada and LOC; | | | | | |
| Royal Bank of Canada) | 0.18 | 6/7/12 | 5,500,000 | a,b,c | 5,500,000 |
STATEMENT OF INVESTMENTS (continued)
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| South Carolina—.6% | | | | | |
| Charleston County School District, | | | | | |
| GO Notes, BAN | 2.00 | 11/6/12 | 2,330,000 | | 2,348,365 |
| Tennessee—4.9% | | | | | |
| Blount County Public Building | | | | | |
| Authority, Local Government | | | | | |
| Public Improvement Revenue | | | | | |
| (Liquidity Facility; Branch | | | | | |
| Banking and Trust Co.) | 0.19 | 6/7/12 | 15,000,000 | a | 15,000,000 |
| Metropolitan Government of | | | | | |
| Nashville and Davidson County | | | | | |
| Health and Educational | | | | | |
| Facilities Board, Revenue, | | | | | |
| Refunding (Belmont University | | | | | |
| Project) (LOC; FHLB) | 0.21 | 6/7/12 | 5,400,000 | a | 5,400,000 |
| Texas—10.0% | | | | | |
| Birdville Independent School | | | | | |
| District, Unlimited Tax School | | | | | |
| Building Bonds (P-FLOATS | | | | | |
| Series MT-720) (LOC; | | | | | |
| Permanent School Fund | | | | | |
| Guarantee Program) | 0.24 | 6/7/12 | 4,000,000 | a,b,c | 4,000,000 |
| Hunt Memorial Hospital District, | | | | | |
| Revenue (Insured; Assured | | | | | |
| Guaranty Municipal Corp. and | | | | | |
| Liquidity Facility; JPMorgan | | | | | |
| Chase Bank) | 0.49 | 6/7/12 | 4,375,000 | a | 4,375,000 |
| Jefferson County Industrial | | | | | |
| Development Corporation, | | | | | |
| Hurricane Ike Disaster Area | | | | | |
| Revenue (Jefferson Refinery, | | | | | |
| L.L.C. Project) (LOC; Branch | | | | | |
| Banking and Trust Co.) | 0.45 | 6/28/12 | 1,000,000 | | 1,000,000 |
| Jefferson County Industrial | | | | | |
| Development Corporation, | | | | | |
| Hurricane Ike Disaster Area | | | | | |
| Revenue (Jefferson Refinery, | | | | | |
| L.L.C. Project) (LOC; Branch | | | | | |
| Banking and Trust Co.) | 0.45 | 6/28/12 | 9,000,000 | | 9,000,000 |
| Port of Port Arthur Navigation | | | | | |
| District, Revenue, CP (BASF SE) | 0.39 | 8/17/12 | 5,000,000 | | 5,000,000 |
14
| | | | | |
| Short-Term | Coupon | Maturity | Principal | | |
| Investments (continued) | Rate (%) | Date | Amount ($) | | Value ($) |
| Texas (continued) | | | | | |
| RBC Municipal Products Inc. Trust | | | | | |
| (Series E-14) (Houston, | | | | | |
| Combined Utility System First | | | | | |
| Lien Revenue, Refunding) | | | | | |
| (Liquidity Facility; Royal | | | | | |
| Bank of Canada and LOC; Royal | | | | | |
| Bank of Canada) | 0.18 | 6/7/12 | 4,000,000 | a,b,c | 4,000,000 |
| Red River Education Finance | | | | | |
| Corporation, Higher Education | | | | | |
| Revenue (Texas Christian | | | | | |
| University Project) | 0.17 | 6/7/12 | 1,500,000 | a | 1,500,000 |
| Texas, | | | | | |
| GO Notes (Veterans’ Housing | | | | | |
| Assistance Program) (Liquidity | | | | | |
| Facility; State Street Bank | | | | | |
| and Trust Co.) | 0.20 | 6/7/12 | 9,000,000 | a | 9,000,000 |
| Texas Transportation Commission, | | | | | |
| State Highway Fund First Tier | | | | | |
| Revenue (P-FLOATS Series | | | | | |
| MT-715) (Liquidity Facility; | | | | | |
| Bank of America) | 0.24 | 6/7/12 | 4,000,000 | a,b,c | 4,000,000 |
| Utah—.8% | | | | | |
| Salt Lake City, | | | | | |
| GO Notes, TRAN | 2.50 | 6/29/12 | 3,250,000 | | 3,255,739 |
| Virginia—.4% | | | | | |
| Virginia College Building | | | | | |
| Authority, Educational Facilities | | | | | |
| Revenue (Public Higher Education | | | | | |
| Financing Program) | 5.00 | 9/1/12 | 1,505,000 | | 1,522,872 |
| Washington—2.2% | | | | | |
| Pierce County Economic Development | | | | | |
| Corporation, Industrial | | | | | |
| Revenue (SeaTac Packaging | | | | | |
| Project) (LOC; HSBC Bank USA) | 0.24 | 6/7/12 | 3,040,000 | a | 3,040,000 |
| Port of Tacoma, | | | | | |
| Revenue, CP (Liquidity | | | | | |
| Facility; Bank of America) | 0.40 | 6/6/12 | 5,000,000 | | 5,000,000 |
| Washington, | | | | | |
| GO Notes (Motor Vehicle Fuel Tax) | 5.00 | 7/1/12 | 1,000,000 | | 1,003,997 |
STATEMENT OF INVESTMENTS (continued)
| | | | | | |
| Short-Term | Coupon | Maturity | Principal | |
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) |
| Wisconsin—1.4% | | | | |
| Madison, | | | | |
| GO Promissory Notes | 3.50 | 10/1/12 | 2,000,000 | 2,021,834 |
| Milwaukee, | | | | |
| GO Cash Flow Promissory Notes | 1.25 | 12/4/12 | 2,000,000 | 2,010,929 |
| Wisconsin Health and Educational | | | | |
| Facilities Authority, Revenue | | | | |
| (Bay Area Medical Center, | | | | |
| Inc.) (LOC; BMO Harris Bank NA) | 0.23 | 6/1/12 | 1,700,000a | 1,700,000 |
| |
| Total Investments (cost $428,198,889) | | | 102.1% | 428,198,889 |
| Liabilities, Less Cash and Receivables | | | (2.1%) | (8,911,408) |
| Net Assets | | | 100.0% | 419,287,481 |
|
| a Variable rate demand note—rate shown is the interest rate in effect at May 31, 2012. Maturity date represents the |
| next demand date, or the ultimate maturity date if earlier. |
| b Securities exempt from registration pursuant to 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, 2012, these |
| securities amounted to $32,520,000 or 7.8% 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). |
| d This security is prerefunded; the date shown represents the prerefunded date. Bonds which are prerefunded are |
| collateralized by U.S. Government securities which are held in escrow and are used to pay principal and interest on |
| the municipal issue and to retire the bonds in full at the earliest refunding date. |
16
| | | |
| 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 Receipt |
| | | | 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 | 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 Mortgage Agency |
| SPEARS | Short Puttable Exempt | SWDR | Solid Waste Disposal Revenue |
| | Adjustable Receipts | | |
| TAN | Tax Anticipation Notes | TAW | Tax Anticipation Warrants |
| TRAN | Tax and Revenue Anticipation Notes | XLCA | XL Capital Assurance |
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 | 88.0 |
| AAA,AA,Ae | | | Aaa,Aa,Ae | | AAA,AA,Ae | 9.8 |
| Not Ratedf | | | Not Ratedf | | Not Ratedf | 2.2 |
| | | | | | | 100.0 |
| |
| † | Based on total investments. |
| e | Notes which are not F, MIG and SP rated are represented by bond ratings of the issuers. |
| f | 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. |
18
|
| STATEMENT OF ASSETS AND LIABILITIES |
| May 31, 2012 |
| | |
| | Cost | Value |
| Assets ($): | | |
| Investments in securities—See Statement of Investments | 428,198,889 | 428,198,889 |
| Cash | | 117,936 |
| Interest receivable | | 624,009 |
| Prepaid expenses | | 18,723 |
| | | 428,959,557 |
| Liabilities ($): | | |
| Due to The Dreyfus Corporation and affiliates—Note 2(b) | | 82,916 |
| Payable for investment securities purchased | | 9,511,630 |
| Payable for shares of Common Stock redeemed | | 520 |
| Accrued expenses | | 77,010 |
| | | 9,672,076 |
| Net Assets ($) | | 419,287,481 |
| Composition of Net Assets ($): | | |
| Paid-in capital | | 419,287,398 |
| Accumulated net realized gain (loss) on investments | | 83 |
| Net Assets ($) | | 419,287,481 |
| Shares Outstanding | | |
| (5 billion shares of $.001 par value Common Stock authorized) | | 419,322,864 |
| Net Asset Value, offering and redemption price per share ($) | | 1.00 |
| |
| See notes to financial statements. | | |
|
| STATEMENT OF OPERATIONS |
| Year Ended May 31, 2012 |
| | |
| Investment Income ($): | |
| Interest Income | 954,998 |
| Expenses: | |
| Management fee—Note 2(a) | 2,236,772 |
| Shareholder servicing costs—Note 2(b) | 355,825 |
| Professional fees | 79,670 |
| Registration fees | 52,222 |
| Directors’ fees and expenses—Note 2(c) | 51,087 |
| Custodian fees—Note 2(b) | 41,266 |
| Prospectus and shareholders’ reports | 31,625 |
| Miscellaneous | 31,729 |
| Total Expenses | 2,880,196 |
| Less—reduction in expenses due to undertaking—Note 2(a) | (2,062,115) |
| Less—reduction in fees due to earnings credits—Note 2(b) | (222) |
| Net Expenses | 817,859 |
| Investment Income—Net | 137,139 |
| Net Realized Gain (Loss) on Investments—Note 1(b) ($) | 83 |
| Net Increase in Net Assets Resulting from Operations | 137,222 |
| |
| See notes to financial statements. | |
20
STATEMENT OF CHANGES IN NET ASSETS
| | | | |
| | | Year Ended May 31, |
| | 2012 | 2011 |
| Operations ($): | | |
| Investment income—net | 137,139 | 246,733 |
| Net realized gain (loss) on investments | 83 | — |
| Net Increase (Decrease) in Net Assets | | |
| Resulting from Operations | 137,222 | 246,733 |
| Dividends to Shareholders from ($): | | |
| Investment income—net | (137,139) | (246,733) |
| Capital Stock Transactions ($1.00 per share): | | |
| Net proceeds from shares sold | 675,495,661 | 807,809,576 |
| Net assets received in connection with | | |
| capital contribution from affiliate† | — | 1,727,964 |
| Dividends reinvested | 119,249 | 201,761 |
| Cost of shares redeemed | (732,537,593) | (841,931,097) |
| Increase (Decrease) in Net Assets | | |
| from Capital Stock Transactions | (56,922,683) | (32,191,796) |
| Total Increase (Decrease) in Net Assets | (56,922,600) | (32,191,796) |
| Net Assets ($): | | |
| Beginning of Period | 476,210,081 | 508,401,877 |
| End of Period | 419,287,481 | 476,210,081 |
| |
| See notes to financial statements. | | |
| † See Note 2(d). | | |
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, | | |
| | 2012 | 2011 | 2010 | 2009 | | 2008 |
| Per Share Data ($): | | | | | | |
| Net asset value, beginning of period | 1.00 | 1.00 | 1.00 | 1.00 | | 1.00 |
| Investment Operations: | | | | | | |
| Investment income—net | .000a | .001 | .001 | .012 | | .028 |
| Distributions: | | | | | | |
| Dividends from investment income—net | (.000)a | (.001) | (.001) | (.012 | ) | (.028) |
| Net asset value, end of period | 1.00 | 1.00 | 1.00 | 1.00 | | 1.00 |
| Total Return (%) | .03 | .05 | .07 | 1.23 | | 2.84 |
| Ratios/Supplemental Data (%): | | | | | | |
| Ratio of total expenses | | | | | | |
| to average net assets | .64 | .65 | .62 | .61 | | .59 |
| Ratio of net expenses | | | | | | |
| to average net assets | .18 | .30 | .45 | .61 | | .58 |
| Ratio of net investment income | | | | | | |
| to average net assets | .03 | .05 | .07 | 1.24 | | 2.74 |
| Net Assets, end of period ($ x 1,000) | 419,287 | 476,210 | 508,402 | 972,8831,025,116 |
| |
| a Amount represents less than $.001 per share. | | | | | | |
| See notes to financial statements. | | | | | | |
22
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 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 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.
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
24
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 May 31, 2012 in valuing the fund’s investments:
| |
| | Short-Term |
| Valuation Inputs | Investments ($)† |
| Level 1—Unadjusted Quoted Prices | — |
| Level 2—Other Significant Observable Inputs | 428,198,889 |
| Level 3—Significant Unobservable Inputs | — |
| Total | 428,198,889 |
| † See Statement of Investments for additional detailed categorizations. | |
In May 2011, FASB issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common FairValue Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards (“IFRS”)” (“ASU 2011-04”). ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between GAAP and IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements.The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU 2011-04 and its impact on the financial statements.
NOTES TO FINANCIAL STATEMENTS (continued)
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and recognized on the accrual basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Cost of investments represents amortized cost.
(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.
As of and during the period ended May 31, 2012, 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, 2012 remains subject to examination by the Internal Revenue Service and state taxing authorities.
At May 31, 2012, the components of accumulated earnings on a tax basis were substantially the same as for financial reporting purposes.
26
The tax character of distributions paid to shareholders during the fiscal periods ended May 31, 2012 and May 31, 2011 were all tax exempt income.
At May 31, 2012, 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 $2,062,115 during the period ended May 31, 2012.
(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, 2012, the fund was charged $222,884 pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing person-
NOTES TO FINANCIAL STATEMENTS (continued)
nel and facilities to perform transfer agency and cash management services for the fund. During the period ended May 31, 2012, the fund was charged $86,015 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 custody agreement for providing custodial services for the fund. During the period ended May 31, 2012, the fund was charged $41,266 pursuant to the custody agreement.
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.
Prior to May 29, 2012, the fund compensated The Bank of NewYork Mellon under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended May 31, 2012, the fund was charged $8,261 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 $222.
During the period ended May 31, 2012, the fund was charged $6,565 for services performed by the Chief Compliance Officer and his staff.
The components of “Due toThe Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $178,419, custodian fees $10,671, chief compliance officer fees $2,652 and transfer agency per account fees $21,300, which are offset against an expense reimbursement currently in effect in the amount of $130,126.
(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.
28
(d) During the period ended May 31, 2011, BNY Mellon made voluntary capital contributions of $1,727,964 to the fund.These contributions were made to reimburse the fund for previous realized losses experienced by the fund.
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 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 Directors and/or common officers, complies with Rule 17a-7 of the Act. During the period ended May 31, 2012, the fund engaged in purchases and sales of securities pursuant to Rule 17a-7 of the Act amounting to $164,974,000 and $107,985,000, respectively.
|
| 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, 2012, 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 five years in the period then ended. 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 used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of May 31, 2012 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, 2012, 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 five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
New York, New York
July 27, 2012
30
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with federal tax law, the fund hereby reports all the dividends paid from investment income-net during the fiscal year ended May 31, 2012 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 2012 calendar year on Form 1099-DIV, which will be mailed in early 2013.
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 72 investment companies (comprised of 156 portfolios) managed by the Manager. He is 53 years old and has been an employee of the Manager since February 1988.
JANETTE E. FARRAGHER, Vice President and Secretary since December 2011.
Assistant General Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 49 years old and has been an employee of the Manager since February 1984.
KIESHA ASTWOOD, Vice President and Assistant Secretary since January 2010.
Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 39 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 45 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 56 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 50 years old and has been an employee of the Manager since June 2000.
KATHLEEN DENICHOLAS, Vice President and Assistant Secretary since January 2010.
Managing Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 37 years old and has been an employee of the Manager since February 2001.
JOHN B. HAMMALIAN, Vice President and Assistant Secretary since August 2005.
Senior Managing Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 48 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. She is 42 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 60 years old and has been an employee of the Manager since May 1986.
OFFICERS OF THE FUND (Unaudited) (continued)
JEFF PRUSNOFSKY, Vice President and Assistant Secretary since August 2005.
Senior Managing Counsel of BNY Mellon, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 47 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 53 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 53 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since April 1991.
ROBERT S. ROBOL, Assistant Treasurer since December 2002.
Senior Accounting Manager – Fixed Income Funds of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 48 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 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since June 1989.
ROBERT SVAGNA, Assistant Treasurer since August 2005.
Senior Accounting Manager – Equity Funds of the Manager, and an officer of 73 investment companies (comprised of 183 portfolios) managed by the Manager. He is 45 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 (73 investment companies, comprised of 183 portfolios).
He is 55 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.
MATTHEW D. CONNOLLY, Anti-Money Laundering Compliance Officer since April 2012.
Anti-Money Laundering Compliance Officer of the Distributor since October 2011; from March 2010 to September 2011, Global Head, KYC Reviews and Director, UBS Investment Bank; until March 2010,AML Compliance Officer and Senior Vice President, Citi Global Wealth Management. He is an officer of 69 investment companies (comprised of 179 portfolios) managed by the Manager. He is 40 years old and has been an employee of the Distributor since October 2011.
36
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 $30,312 in 2011 and $30,857 in 2012.
(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 $6,000 in 2011 and $12,000 in 2012. 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 impact 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 2011 and $0 in 2012.
(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 $3,897 in 2011 and $3,421 in 2012. 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 2011 and $0 in 2012.
(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 $329 in 2011 and $390 in 2012. [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 2011 and $0 in 2012.
(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 $19,526,919 in 2011 and $34,285,599 in 2012.
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 24, 2012 |
|
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. |
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By: /s/ Bradley J. Skapyak |
Bradley J. Skapyak, President |
Date: | July 24, 2012 |
|
By: /s/ James Windels |
James Windels, Treasurer |
Date: | July 24, 2012 |
|
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)
