Dreyfus
Money Market
Instruments, Inc.
ANNUAL REPORT December 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. In addition, issuers of securities in
which the fund invests may be adversely affected by year 2000-related problems.
This could have an impact on the value of the fund's investments and its share
price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statements of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
15 Notes to Financial Statements
19 Report of Independent Auditors
20 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Money Market
Instruments, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Money Market
Instruments, Inc., covering the 12-month period from January 1, 1999 through
December 31, 1999. Inside, you'll find valuable information about how the fund
was managed during the reporting period, including a discussion with portfolio
manager Thomas S. Riordan.
When the reporting period began, investors were concerned that global economic
weakness might cause a slowdown in the U.S. economy. As it turned out, these
fears were unfounded. In fact, it became apparent early in the year that
international and domestic economies were growing faster than analysts expected,
giving rise to concerns that long-dormant inflationary pressures might
re-emerge. Consumers continued to spend heavily, unemployment levels reached new
lows and the stock market continued to climb. Because unsustainable economic
growth may trigger unwanted inflationary pressures, the Federal Reserve Board
raised key short-term interest rates three times between June 30 and year-end in
an attempt to forestall an acceleration of inflation. In this environment,
yields on money market securities continued to rise.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Money Market Instruments, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
January 14, 2000
DISCUSSION OF FUND PERFORMANCE
Thomas S. Riordan, Portfolio Manager
How did Dreyfus Money Market Instruments, Inc. perform during the period?
For the 12-month period ended December 31, 1999, the fund produced a yield of
4.36% for its Money Market Series and 4.23% for its Government Securities
Series. Taking into account the effect of compounding, the effective yield was
4.45% for its Money Market Series and 4.31% for its Government Securities
Series.(1)
What factors influenced the fund's performance?
As 1999 began the United States economy was marked by fears of an economic
slowdown, largely as a result of the Asian financial crisis. The Federal Reserve
Board, in an attempt to cushion the economy from negative overseas events, had
sharply lowered short-term interest rates. Global markets remained unsettled as
1999 began, but the general atmosphere of crisis lifted. As fears waned, the
focus of monetary policymakers shifted back to the domestic economy, and as the
economy showed no signs of slowing, the Fed began to voice concern over
inflationary pressures.
The performance of the U.S. economy in the first quarter of 1999 was much
stronger than expected. But while the Gross Domestic Product (GDP) grew at a
rate of 4.3%, inflation remained benign. Despite a tight labor market, there was
no evidence of advancing wage pressure. Many economic analysts believed that
advances in technology might make it possible for the economy to grow faster
than previously thought possible without igniting inflation. Notwithstanding
fears that imbalances might eventually derail the nine-year expansion, the U.S.
economy continued to grow as the Fed held steady on rates through the first
quarter of the year.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
A surprisingly large jump in the Consumer Price Index in May pushed policymakers
closer to a rate hike. Although the Fed did not immediately raise interest
rates, it did announce a significant shift, adopting a "bias" towards tightening
- -- that is, raising short-term rates. With that shift in bias came a resulting
shift in market psychology, as participants began to anticipate higher rates
That highly anticipated move came in June, when at its Open Market Committee
meeting, the Fed raised short-term rates by 0.25 percentage points. At the same
time, however, it announced that it was shifting its bias back to neutral --
indicating no intention of an immediate further rate increase. The market hoped
that this pre-emptive strike to head off the threat of inflation would signal an
end to Fed tightening.
Such hopes would be short-lived as strong economic growth along with anxiety
over rising wages and benefits renewed inflationary concern. At its August Open
Market Committee meeting, the Fed raised short-term interest rates by an
additional 0.25 percentage points, signaling its added resolve by also raising
the discount rate.
The economy continued to give mixed signals to the money market throughout the
third quarter. GDP growth accelerated back to a rapid 4.8%, but key indicators
of employment costs, job creation and inflation were at lower levels than would
be expected, given such strong economic expansion. These mixed indications led
the Fed to hold off on further tightening until November, when continued fear of
inflationary pressures caused it to increase short-term interest rates by
another 0.25 percentage points.
When the Fed took no action at its December meeting, many analysts considered it
to be an attempt to quiet markets that were concerned about potential Y2K
disruption. The Fed also added significant reserves to the banking system over
year-end to quell liquidity concerns, leading to temporary irregularities and
wide fluctuations in short-term interest rates. Despite the temporary drop in
rates over year-end due
to the added reserves, many believe, now that Y2K issues have been successfully
navigated, that the issue of managing sustainable growth should take center
stage again.
What is the fund's current strategy?
In response to a market environment marked by rising interest rates, the fund
took on a somewhat defensive strategy. We took two steps to position the fund in
the current market: we shortened the fund' s average maturity and built a
liquidity cushion. Shorter maturities and a higher level of cash are designed to
enable the fund to take advantage of a possible further rise in interest rates.
January 14, 2000
(1) EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND REINVESTED
MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS FLUCTUATE.
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 $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE
FUND.
The Fund
STATEMENT OF INVESTMENTS
Money Market Series
December 31, 1999
Principal
<TABLE>
<CAPTION>
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--18.5% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Branch Bank & Trust Co.
<S> <C> <C>
5.04%, 1/10/2000 4,500,000 4,499,968
Deutsche Bank AG (Yankee)
5.70%, 4/10/2000 5,000,000 (a) 4,999,399
Societe Generale N.A. Inc. (Yankee)
5.70%, 4/20/2000 5,000,000 4,999,249
Union Bank of California
5.98%, 8/1/2000 4,000,000 4,000,000
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $18,498,616) 18,498,616
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COMMERCIAL PAPER--41.9%
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Atlantis One Funding Corp.
5.92%, 2/22/2000 4,500,000 4,462,625
BCI Funding Corp.
6.05%, 5/2/2000 4,000,000 3,920,429
Commonwealth Bank of Australia
6.00%, 4/6/2000 4,500,000 4,429,440
DaimlerChrysler North America Holding Corp.
6.10%, 2/29/2000 4,500,000 4,456,045
Donaldson, Lufkin & Jenrette Securities Corp.
6.22%, 3/3/2000 4,000,000 3,957,806
General Electric Capital Corp.
5.93% , 6/16/2000 4,000,000 3,893,677
Goldman Sachs Group Inc.
6.07%, 2/29/2000 4,500,000 4,456,266
Lehman Brothers Holdings Inc.
6.20%, 3/8/2000 4,500,000 4,449,665
Santander Finance (DE) Inc.
5.94%, 3/22/2000 4,000,000 3,947,575
UBS Finance (DE) Inc.
4.25%, 1/3/2000 4,000,000 3,999,056
TOTAL COMMERCIAL PAPER
(cost $41,972,584) 41,972,584
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CORPORATE NOTES--20.9%
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Bear, Stearns & Co. Inc.
6.52%, 2/22/2000 5,000,000 (a) 5,000,388
Finova Capital Corp.
6.09%, 8/15/2000 2,500,000 2,499,192
Principal
CORPORATE NOTES (CONTINUED) Amount ($) Value ($)
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GTE Corp.
6.22%, 6/12/2000 5,000,000 (a) 4,998,567
Heller Financial Inc.
5.90%, 8/7/2000 4,000,000 (a) 4,000,000
Paine Webber Group Inc.
6.66%, 9/15/2000 4,500,000 (a) 4,500,000
TOTAL CORPORATE NOTES
(cost $20,998,147) 20,998,147
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SHORT-TERM BANK NOTES--5.0%
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First Tennessee Bank
5.68%, 4/19/2000
(cost $4,999,415) 5,000,000 (a) 4,999,415
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TIME DEPOSITS--11.6%
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Bank One NA (Grand Cayman)
4.50%, 1/3/2000 4,000,000 4,000,000
Chase Manhattan Bank NA (London)
4.00%, 1/3/2000 4,000,000 4,000,000
Republic National Bank of New York (London)
4.50%, 1/3/2000 3,647,000 3,647,000
TOTAL TIME DEPOSITS
(cost $11,647,000) 11,647,000
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TOTAL INVESTMENTS
(cost $98,115,762) 97.9% 98,115,762
CASH AND RECEIVABLES (NET) 2.1% 2,090,207
NET ASSETS 100.0% 100,205,969
(A) VARIABLE INTEREST RATE--SUBJECT TO PERIODIC CHANGE.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF INVESTMENTS
Government Securities Series
December 31, 1999
<TABLE>
<CAPTION>
Annualized
Yield on
Date of Principal
U.S. TREASURY BILLS--31.6% Purchase (%) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
1/13/2000
<S> <C> <C> <C>
(cost $114,791,083) 5.47 115,000,000 114,791,083
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY NOTES--23.5%
- ------------------------------------------------------------------------------------------------------------------------------------
5.875%, 2/15/2000 4.69 28,000,000 28,035,240
5.50%, 3/31/2000 4.66 25,000,000 25,037,360
5.50%, 5/31/2000 4.88 25,000,000 25,040,463
5.875%, 6/30/2000 5.23 7,000,000 7,017,309
TOTAL U.S. TREASURY NOTES
(cost $85,130,372) 85,130,372
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REPURCHASE AGREEMENTS--44.6%
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Barclays Capital Inc.
dated 12/31/1999, due 1/3/2000 in the amount of
$4,921,615 (fully collateralized by $4,975,000
U.S. Treasury Notes, 5.75%, due 11/15/2000,
value $4,999,293) 1.50 4,921,000 4,921,000
Bear, Stearns & Co. Inc.
dated 12/31/1999, due 1/3/2000 in the amount of
$31,006,458 (fully collateralized by $31,580,000
U.S. Treasury Strips, due 2/15/2000,
value $31,377,888) 2.50 31,000,000 31,000,000
Donaldson, Lufkin & Jenrette Securities Corp. Inc.
dated 12/31/1999, due 1/3/2000, in the amount of
$33,005,500 (fully collateralized by $33,373,000
U.S. Treasury Notes 5.625%, due 11/30/2000,
value $33,412,714) 2.00 33,000,000 33,000,000
Morgan (J.P.) & Co. Inc.
dated 12/31/1999, due 1/3/2000 in the amount of
$27,005,938 (fully collateralized by $27,066,000
U.S. Treasury Notes, 5.50%, due 2/29/2000,
value $27,539,505) 2.64 27,000,000 27,000,000
Morgan Stanley Dean Witter & Co.
dated 12/31/1999, due 1/3/2000 in the amount
of $33,006,793 (fully collateralized by $33,455,000
U.S. Treasury Notes, 5.625%, due 11/30/2000,
value $33,478,419) 2.47 33,000,000 33,000,000
Annualized
Yield on
Date of Principal
REPURCHASE AGREEMENTS (CONTINUED) Purchase (%) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Warburg Dillion Read, Inc.
dated 12/31/1999, due 1/3/2000, in the amount of
$33,006,875 (fully collateralized by $35,395,000
U.S. Treasury Bills, due 11/9/2000,
value $33,660,645) 2.50 33,000,000 33,000,000
TOTAL REPURCHASE AGREEMENTS
(cost $161,921,000) 161,921,000
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TOTAL INVESTMENTS
(cost $361,842,455) 99.7% 361,842,455
CASH AND RECEIVABLES (NET) .3% 1,106,172
NET ASSETS 100.0% 362,948,627
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
Money Government
Market Securities
Series Series
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities, See Statement of Investments
(including repurchase agreements of $161,921,000 for
the Government Securities Series)--Note 2(b) 98,115,762 361,842,455
Cash 1,555,690 272,622
Interest receivable 667,647 1,102,793
Prepaid expenses 6,047 13,791
100,345,146 363,231,661
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 87,697 196,921
Accrued expenses and other liabilities 51,480 86,113
139,177 283,034
- --------------------------------------------------------------------------------
NET ASSETS ($) 100,205,969 362,948,627
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 100,236,117 363,036,071
Accumulated net realized gain (loss) on investments (30,148) (87,444)
- --------------------------------------------------------------------------------
NET ASSETS ($) 100,205,969 362,948,627
NET ASSET VALUE PER SHARE
Money Government
Market Securities
Series Series
- --------------------------------------------------------------------------------
Net Assets ($) 100,205,969 362,948,627
Shares Outstanding 100,219,617 363,036,071
NET ASSET VALUE PER SHARE ($) 1.00 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended December 31, 1999
Money Government
Market Securities
Series Series
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 5,433,942 20,813,488
EXPENSES--NOTE 2:
Management fee--Note 3(a) 512,901 2,083,776
Shareholder servicing costs--Note 3(b) 328,510 842,132
Registration fees 43,440 30,007
Professional fees 32,821 14,551
Custodian fees 26,559 78,645
Directors' fees and expenses--Note 3(c) 11,522 57,693
Prospectus and shareholders' reports 11,183 22,836
Miscellaneous -- 1,868
TOTAL EXPENSES 966,936 3,131,508
INVESTMENT INCOME--NET 4,467,006 17,681,980
- --------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 2(B) ($) (1,333) (87,197)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 4,465,673 17,594,783
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Money Market Series Government Securites Series
-------------------------------------- ---------------------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS ($):
<S> <C> <C> <C> <C>
Investment income--net 4,467,006 5,316,204 17,681,980 20,107,437
Net realized gain (loss)
on investments (1,333) (6,557) (87,197) 36,250
NET INCREASE (DECREASE)
IN NET ASSETS
RESULTING FROM OPERATIONS 4,465,673 5,309,647 17,594,783 20,143,687
- ------------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS TO
SHAREHOLDERS FROM ($):
Investment income--net (4,467,006) (5,316,204) (17,681,980) (20,107,437)
Net realized gain
on investments -- -- -- (36,250)
TOTAL DIVIDENDS (4,467,006) (5,316,204) (17,681,980) (20,143,687)
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS
($1.00 per share):
Net proceeds from
shares sold 320,522,771 270,802,602 1,597,921,400 1,295,087,820
Dividends reinvested 2,829,101 3,521,681 10,137,442 11,359,817
Cost of shares redeemed (333,779,964) (282,449,373) (1,672,681,750) (1,259,780,722)
INCREASE (DECREASE) IN
NET ASSETS
FROM CAPITAL
STOCK TRANSACTIONS (10,428,092) (8,125,090) (64,622,908) 46,666,915
TOTAL INCREASE (DECREASE)
IN NET ASSETS (10,429,425) (8,131,647) (64,710,105) 46,666,915
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 110,635,394 118,767,041 427,658,732 380,991,817
END OF PERIOD 100,205,969 110,635,394 362,948,627 427,658,732
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
Money Market Series
The following tables describe 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.
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .044 .047 .047 .046 .053
Distributions:
Dividends from investment income--net (.044) (.047) (.047) (.046) (.053)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 4.45 4.76 4.76 4.73 5.46
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .94 .94 1.00 .93 .84
Ratio of net investment income
to average net assets 4.35 4.66 4.66 4.63 5.33
Decrease reflected in above expense ratios
due to undertakings by
The Dreyfus Corporation -- -- .01 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 100,206 110,635 118,767 129,344 144,172
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
FINANCIAL HIGHLIGHTS
Government Securities Series
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .042 .047 .046 .045 .051
Distributions:
Dividends from investment income--net (.042) (.047) (.046) (.045) (.051)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 4.31 4.83 4.72 4.60 5.18
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .75 .69 .87 .90 .83
Ratio of net investment income
to average net assets 4.24 4.71 4.62 4.50 5.07
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 362,949 427,659 380,992 441,769 431,444
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--General:
Dreyfus Money Market Instruments, Inc. (the "fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified
open-end management investment company and operates as a series company issuing
two classes of Common Stock: the Money Market Series and the Government
Securities Series. The fund accounts separately for the assets, liabilities and
operations of each series. The fund' s investment objective is to provide
investors with as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary
of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. is the distributor of the fund's shares,
which are sold to the public without a sales charge. The fund is authorized to
issue 5 billion shares of $.001 par value Common Stock for the Money Market
Series and 10 billion shares of $.001 par value Common Stock for the Government
Securities Series.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00 for each series; 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 for each series.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
NOTE 2--Significant Accounting Policies:
(A) PORTFOLIO VALUATION: Investments in securities are valued at amortized cost,
which has been determined by the fund's Board of Directors to represent the fair
value of the fund' s investments.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income is
recognized on the accrual basis. Cost of investments represents amortized cost.
Under the terms of the custody agreement, the Money Market Series and Government
Securities Series receives net earnings credits based on available cash balances
left on deposit.
The fund may enter into repurchase agreements with financial institutions,
deemed to be creditworthy by the fund' s Manager, subject to the seller's
agreement to repurchase and the fund's agreement to resell such securities at a
mutually agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the fund's custodian and, pursuant to the terms of
the repurchase agreement, must have an aggregate market value greater than or
equal to the repurchase price plus accrued interest at all times. If the value
of the underlying securities falls below the value of the repurchase price plus
accrued interest, the fund will require the seller to deposit additional
collateral by the next business day. If the request for additional collateral is
not met, or the seller defaults on its repurchase obligation, the fund maintains
the right to sell the underlying securities at market value and may claim any
resulting loss against the seller.
(C) EXPENSES: Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to both series are allocated
between them.
(D) DIVIDENDS TO SHAREHOLDERS: It is the policy of the fund, with respect to
both series, to declare dividends from investment income-net on each business
day; such dividends are paid monthly. Dividends from net realized capital gain,
with respect to both series, are normally declared and paid annually, but each
series 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" ). However, to the extent that a net realized capital gain of either
series can be reduced by a capital loss carryover of that series, such gain will
not be distributed.
(E) FEDERAL INCOME TAXES: It is the policy of each series to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
The Money Market Series has an unused capital loss carryover of approximately
$30,000 available for Federal income tax purposes to be applied against future
net securities profits, if any, realized subsequent to December 31, 1999. If not
applied, $18,000 of the carryover expires in fiscal 2004, $4,000 expires in
fiscal 2005, $7,000 expires in fiscal 2006 and $1,000 expires in fiscal 2007.
The Government Securities Series has an unused capital loss carryover of
approximately $87,000 available for federal income tax purposes to be applied
against future net securities profits, if any, realized subsequent to December
31, 1999. If not applied, the carryover expires in fiscal 2007.
At December 31, 1999, the cost of investments of each series for Federal income
tax purposes was substantially the same as the cost for financial reporting
purposes (see the Statements of Investments).
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee for each series is computed at the annual rate of .50 of 1% of
the value of the average daily net assets of each series and is payable monthly.
The Agreement provides that if in any full fiscal year the aggregate expenses of
either series, exclusive of taxes, brokerage commissions, interest on borrowings
and extraordinary expenses, exceed 1% of the value of such series' average daily
net assets, the fund may deduct from payments to be made to the Manager, or the
Manager will bear the amount of such excess. No expense reimbursement was
required for the period ended December 31, 1999 pursuant to the Agreement.
(B) Under the Shareholder Services Plan, each series reimburses Dreyfus Service
Corporation, a wholly-owned subsidiary of the The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Manager, an amount not to exceed an annual rate of .25 of 1% of the value of
each series' 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 December 31, 1999, the Money
Market Series and the Government Securities Series were charged $208,550 and
$513,607, respectively, pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended December 31, 1999, the Money Market Series and the Government Securities
Series, were charged $101,226 and $258,863, respectively, pursuant to the
transfer agency agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
received from the fund an annual fee of $4,500 and an attendance fee of $500 per
meeting. The Chairman of the Board received an additional 25% of such
compensation.
Each non-affiliated director is a Board member of one or more funds comprising a
certain group of funds (" Fund Group") within the Dreyfus complex. Effective
January 1, 2000, for their participation as a director in a Fund Group, the
directors receive an annual fee of $40,000 each, $6,000 for each meeting
attended in person and $500 for each telephonic meeting in which they
participate. These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation.
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus Money Market Instruments, Inc.
We have audited the accompanying statement of assets and liabilities, including
the statements of investments, of Dreyfus Money Market Instruments, Inc.
(comprising, respectively, the Money Market Series and the Government Securities
Series) , as of December 31, 1999, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund' s management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the 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. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of December 31, 1999 by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. 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 each
of the respective series constituting Dreyfus Money Market Instruments, Inc. at
December 31, 1999, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated years, in conformity with
accounting principles generally accepted in the United States.
Ernst & Young LLP
New York, New York
February 7, 2000
The Fund
Dreyfus Money Market Instruments, Inc.
Government Securities Series
IMPORTANT TAX INFORMATION (Unaudited)
For State individual income tax purposes, the Government Securities Series
hereby designates 34.69% of the ordinary income dividends paid during its fiscal
year ended December 31, 1999 as attributable to interest income from direct
obligations of the United States. Such dividends are currently exempt from
taxation for individual income tax purposes in most states, including New York,
California and the District of Columbia.
For More Information
Dreyfus
Money Market
Instruments, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 008-060AR9912
