Dreyfus Municipal Money Market Fund, Inc.
ANNUAL REPORT
May 31, 1999
<PAGE>
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 The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. 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.
<PAGE>
Contents
THE FUND
- -------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
14 Statement of Assets and Liabilities
15 Statement of Operations
16 Statement of Changes in Net Assets
17 Financial Highlights
18 Notes to Financial Statements
21 Report of Independent Auditors
22 Important Tax Information
FOR MORE INFORMATION
- --------------------------------------------------------
Back Cover
<PAGE>
Dreyfus Municipal
Money Market Fund, Inc. The Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Municipal Money Market
Fund, Inc., covering the 12-month period from June 1, 1998 through May 31, 1999.
Inside, you'll find valuable information about how the fund was managed during
the reporting period, including a discussion with the fund's portfolio manager,
Karen Hand.
Yields on both taxable and tax-exempt money market securities remained
relatively stable during much of the spring and summer of 1998. In the fall of
1998, however, money market yields declined significantly in the wake of the
Federal Reserve Board's decision to ease monetary policy. At the time, the
Federal Reserve was concerned about persistent economic weakness abroad. Their
adoption of lower short-term interest rates was intended to stimulate not just
domestic economic growth, but the economies of other nations as well. In light
of stronger-than-expected global economic growth during the first five months of
1999, the Fed's strategy appears to have been effective.
Despite lower nominal interest rates for tax-exempt money market instruments,
very low inflation has continued to support attractive real returns, which are
nominal yields less the rate of inflation.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Municipal Money Market Fund, Inc.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
June 14, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
Karen Hand, Portfolio Manager
How did Dreyfus Municipal Money Market Fund, Inc.
perform over the reporting period?
For the one-year period ended May 31, 1999, Dreyfus Municipal Money Market
Fund, Inc. produced a tax-exempt yield of 2.74%. After taking into account the
effect of compounding, the fund provided an effective yield of 2.78%.1
The fund produced a total return of 2.78%,2 compared to the Lipper Tax-Exempt
Money Market Funds category average total return of 2.72% for the same time
period.3
What is the fund's investment approach?
Our goal is to seek a high level of federally tax-exempt income while
maintaining a stable $1.00 share price. We also are especially vigilant in our
efforts to preserve capital.
In pursuit of these objectives, we employ two primary strategies. First, we
attempt to add value by constructing a diverse portfolio of high-quality,
tax-exempt money market instruments that we believe are likely to provide highly
competitive yields with relatively little risk. Second, we actively manage the
portfolio's average maturity in anticipation of interest rate trends and
supply-and-demand changes in the short-term municipal marketplace.
For example, if we expect supply to increase temporarily when many
municipalities issue short-term debt at once -- as they tend to do in July, for
example -- we may reduce the portfolio's average maturity to make cash available
for the purchase of higher-yielding securities. That's because yields tend to
rise if many issuers are competing for investor interest. If we expect demand
to surge at a time when we anticipate little issuance and, therefore, lower
yields -- as often hap-
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
pens in January -- we may increase the portfolio's average maturity to
maintain current yields for as long as practical. At other times, we try to
maintain an average maturity that reflects our view of short-term interest rate
trends.
What other factors influenced the fund's performance?
Although the fund contains only securities from U.S. issuers, the entire
domestic fixed-income marketplace was influenced during the reporting period by
economic events overseas. When the Asian currency and credit crisis threatened
Latin America last summer and fall, the Federal Reserve Board and other central
banks reduced key short-term interest rates. This move was intended to help
boost economic activity by making borrowing less expensive for corporations. An
additional consequence was lower yields on money market securities.
Despite economic weakness in some overseas markets, the U.S. economy remained
strong. Because municipalities have enjoyed higher tax revenues during this
period of economic prosperity, many have had less need to borrow. As a result,
fewer tax-exempt money market securities were issued than in the same 12-month
period one year ago. Yet, demand from investors seeking to minimize their income
tax liabilities remained high. This imbalance between supply and demand helped
push short-term tax-exempt yields down further during the second half of 1998.
Tax-exempt yields have remained relatively stable so far in 1999.
What is the fund's current strategy?
We have continued to focus on high-quality money market instruments from a
wide array of tax-exempt issuers. Some of the most frequently used instruments
include Variable Rate Demand Notes (VRDNs), which are issued by investment
banks through the securitization of longer-term municipal bonds. With a put
feature of either
4
<PAGE>
one or seven days attached to each VRDN, we believe that VRDNs afford a high
degree of liquidity as well as high quality to the portfolio. Accordingly, as
of May 31, 1999, approximately 60% of the portfolio was composed of VRDNs. The
remaining 40% was comprised of municipal notes and tax-exempt commercial paper.
June 14, 1999
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 $1.00 per share, it is possible to lose money by investing in
the fund.
2 Total return includes reinvestment of dividends. Income may be subject to
state and local taxes, and some income may be subject to the Federal
Alternative Minimum Tax (AMT) for certain shareholders.
3 Lipper Analytical Services, Inc.
The Fund 5
<PAGE>
STATEMENT OF INVESTMENTS
May 31, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Principal
Tax Exempt Investments-100.6% Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Alabama--1.8%
McIntosh, IDB, EIR, Refunding, VRDN (CIBA Specialty)
3.40%, Series E (LOC; CIBA Specialty Chemicals)a 6,500,000 6,500,000
Stevenson, IDB, EIR, Refunding, VRDN (Mead Corp. Project)
3.45% (LOC; Bank of Austria)a 10,000,000 10,000,000
California--5.2%
California Higher Education Loan Authority,
Student Loan Revenue, Refunding:
3.60%, Series A-1, 7/1/1999 (LOC; Student Loan
Marketing Association) 11,850,000 11,850,000
3.20%, Series E-5, 6/1/2000 (LOC; Student Loan
Marketing Association) 14,000,000 14,000,000
State of California, RAN 4%, 6/30/1999 11,000,000 11,007,248
Student Education Loan Marketing Corporation, Student Loan
Revenue, Refunding
3%, Series A, 11/1/1999 (LOC; Dresdner Bank) 10,000,000 10,000,000
Delaware--8.7%
Delaware Economic Development Authority, Revenue, VRDN
(Hospital Billing Collection):
3.25%, Series A (Insured; MBIA and Liquidity
Facility; Morgan Stanley)a 21,325,000 21,325,000
3.25%, Series B (Insured; MBIA and Liquidity
Facility; Morgan Stanley)a 19,000,000 19,000,000
3.25%, Series C (Insured; MBIA and Liquidity
Facility; Morgan Stanley)a 34,400,000 34,400,000
3.45%, Series A (Insured; MBIA and Liquidity
Facility; Morgan Stanley)a 3,675,000 3,675,000
District of Columbia--1.1%
District of Columbia, TRAN 3.75%, Series B, 9/30/1999
(LOC: Canadian Imperial Bank of Commerce and Morgan
Guaranty Trust Co.) 10,000,000 10,020,973
Florida--3.8%
Dade County, Water and Sewer Systems Revenue, VRDN
3.15% (Insured; FGIC and Liquidity Facility; Commerzbank)a 7,600,000 7,600,000
Sarasota County Public Hospital District, HR, CP
(Sarasota Memorial Hospital Project)
3.10%, 7/21/1999 (LOC; Suntrust Bank) 9,000,000 9,000,000
Sunshine State Governmental Financing Commission,
Revenue, CP
3.15%, 7/16/1999 (Liquidity Facility;
Bank of Nova Scotia) 17,362,000 17,362,000
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Principal
Tax Exempt Investments (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Georgia--6%
Burke County Development Authority, PCR, CP
(Oglethorpe Power Corp.)
3.05%, Series B, 7/28/1999 (Insured; AMBAC and Liquidity
Facility; Rabobank Nederland) 10,000,000 10,000,000
Cobb County, School District Notes
3.50%, 12/31/1999 11,500,000 11,535,085
Fulton County School District, Construction Sales Tax, TAN
3.25%, 12/31/1999 15,000,000 15,018,647
Savannah Economic Development Authority, Revenue
Exempt Facilities, VRDN
(Home Depot Project) 3.35%, Series A (Corp. Guaranty;
Home Depot)a 17,000,000 17,000,000
Idaho--1.1%
Idaho State, TAN 4.50%, 6/30/1999 10,000,000 10,006,899
Illinois--3%
Illinois Development Finance Authority, PCR,
VRDN (Illinois Power Co.)
3.40%, Series C (LOC; Morgan Guaranty Trust Co.)a 10,400,000 10,400,000
Illinois Health Facilities Authority, Revenue,
VRDN (Revolving Fund Pooled)
3.25%, Series C (LOC; First National Bank of Chicago)a 16,250,000 16,250,000
Iowa--.1%
Iowa Finance Authority, SWDR, VRDN (Cedar River Paper Co.)
3.40%, Series A (LOC; Union Bank of Switzerland)a 1,000,000 1,000,000
Kansas--.6%
Wichita, PCR, Refunding, VRDN (CIC Industries Inc. Project)
3.725% (LOC; The Bank of New York)a 5,000,000 5,000,000
Louisiana--.8%
New Orleans Aviation Board, Revenue, VRDN
(Passenger Facility Charge Project)
3.55% (LOC: Banque Paribas and Canadian
Imperial Bank of Commerce)a 7,400,000 7,400,000
Maryland--4.4%
Anne Arundel County, CP
3.40%, Series B, 7/8/1999 (Liquidity Facility;
Westdeutsche Landesbank) 15,000,000 15,000,000
Maryland Community Development Administration Department,
Housing and Community Development, Residential
3.15%, 1/14/2000 25,000,000 25,000,000
</TABLE>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Principal
Tax Exempt Investments (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Massachussetts--3.9%
Commonwealth of Massachussetts, Refunding, VRDN
3%, Series B (LOC; Toronto-Dominion Bank)a 35,000,000 35,000,000
Michigan--2.8%
Birmingham, EDR, VRDN (Brown Association Project)
3.725% (LOC; Bankers Trust Co.)a 1,915,000 1,915,000
Michigan Housing Development Authority, LOR, Refunding, VRDN
(Harbortown Limited Divide) 3.475%, (LOC;
Bankers Trust Co.)a 1,000,000 1,000,000
Michigan Strategic Fund, SWDR, VRDN
(Grayling Generating Project) 3.35% (LOC; Barclays Bank)a 8,000,000 8,000,000
Midland County Economic Development Corporation,
Economic Development, LOR, VRDN
(Dow Chemical Co. Project)
3.40%, Series A (LOC; Dow Chemical Co.)a 14,000,000 14,000,000
Minnesota--1.2%
Cloquet, Industrial Facilities Revenue, VRDN
(Potlatch Corp. Project)
3.50%, Series C (LOC; Credit Suisse)a 2,300,000 2,300,000
Minneapolis and St. Paul Housing and Redevelopment
Authority, Health Care System Revenue, Refunding
VRDN (Childrens Health Care)
3.35%, Series B (Insured; FSA and Liquidity
Facility; Norwest Bank)a 8,455,000 8,455,000
Missouri--.9%
Missouri Health and Educational Facilities Authority,
Health Facilities Revenue
VRDN (St. Francis Medical Center)
3.30%, Series A (LOC; Credit Local De France)a 8,200,000 8,200,000
Nebraska--1.4%
Nebhelp Incorporated, Revenue, Mutiple Mode
Student Loan, VRDN
3.25%, Series A (Insured; MBIA and LOC; Student Loan
Marketing Association)a 12,995,000 12,995,000
Nevada--1.7%
Washoe County, Water Facility Revenue, VRDN
(Sierra Pacific Power Co. Project)
3.50%, (LOC; Union Bank of Switzerland)a 15,000,000 15,000,000
New Jersey--6.5%
New Jersey Economic Development Authority, EDR
(Newark Recycling)
3%, 6/15/1999 (LOC; Societe Generale) 10,000,000 10,000,000
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Principal
Tax Exempt Investments (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
New Jersey (continued)
New Jersey Sports and Exposition Authority,
State Contract, VRDN
3%, Series C (Insured; MBIA and Liquidity
Facility; Credit Suisse)a 9,000,000 9,000,000
New Jersey Turnpike Authority, Turnpike Revenue,
Refunding, VRDN
3.05%, Series D (Insured; FGIC and Liquidity
Facility; Societe Generale)a 30,000,000 30,000,000
South Jersey Transportation Authority,
BAN 2.95%, 11/3/1999
(LOC; First Union National Bank of North Carolina) 10,000,000 10,000,000
New Mexico--1.4%
New Mexico State, TRAN 4.25%, 6/30/1999 13,000,000 13,006,481
New York--5.5%
Metropolitan Transportation Authority,
Transit Facilities Revenue, CP
3%, Series 1, SubSeries B, 7/9/1999 (LOC; ABN-Amro Bank) 20,000,000 20,000,000
New York City Transitional Finance Authority,
Revenue, Future Tax Secured, VRDN
3.05%, Series A-2 (Liquidity Facility;
Credit Local De France)a 20,000,000 20,000,000
Rochester, BAN, 3.10%, Series II, 10/28/1999 10,000,000 10,001,023
North Carolina--.9%
Craven County Industrial Facilities and Pollution Control
Financing Authority, VRDN
(Craven Wood Energy) 3.50%, Series C
(LOC; ABN-Amro Bank)a 8,000,000 8,000,000
North Dakota--1.1%
North Dakota Housing Finance Agency, Revenue,
Housing Finance Program
(Home Mortgage) 3.20%, Series C, 4/1/2000 10,000,000 10,000,000
Ohio--4.9%
Cincinnati City School District, BAN 4%, 9/16/1999 10,000,000 10,014,139
Columbus, Electric System Revenue, VRDN 3.65%
(LOC; Union Bank of Switzerland)a 1,300,000 1,300,000
Cuyahoga County, HR, VRDN (Cleveland Clinic Foundation)
3.25%, Series A (LOC; Morgan Guaranty Trust Co.)a 3,200,000 3,200,000
Hamilton County, Hospital Facilities Revenue, VRDN
(Bethesda Hospital Inc.)
3.20% (LOC; Rabobank Nederland)a 2,000,000 2,000,000
</TABLE>
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Principal
Tax Exempt Investments (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Ohio (continued)
Ohio Air Quality Development Authority, Revenue, CP
3.15%, 7/16/1999 (Insured; FGIC and Liquidity Facility) 6,370,000 6,370,000
Ohio Housing Finance Agency, Mortgage Revenue
3.05%, Series A-2, 3/1/2000 20,000,000 20,000,000
Sharonville, IDR, VRDN (Edgecomb Metals Co. Project)
3.25% (LOC; Banque Nationale DeParis)a 1,150,000 1,150,000
Oklahoma--.5%
Oklahoma Housing Finance Agency, SFMR (Homeownership Loan)
3.55%, 9/1/1999 (Insured; FGIC) 4,240,000 4,240,000
Pennsylvania--5.8%
Allegheny County Industrial Development Authority,
Revenue, VRDN
3.30%, Series C (LOC; Dresdner Bank)a 4,400,000 4,400,000
Allegheny County Port Authority, GAN 4.25%, 6/30/1999
(LOC; PNC Bank) 11,000,000 11,005,477
Pennsylvania Higher Education Assistance Agency,
Student Loan Revenue, VRDN:
3.35%, Series A (LOC; Student Loan
Marketing Association)a 12,100,000 12,100,000
3.35%, Series C (LOC; Student Loan
Marketing Association)a 8,900,000 8,900,000
Philadelphia, TRAN 4.25%, Series A, 6/30/1999 10,000,000 10,004,709
Schuylkill County Industrial Development Authority,
RRR, Refunding, VRDN
(Northeastern Power Co.)
3.40%, Series B (LOC; Credit Local De France)a 6,100,000 6,100,000
Rhode Island--1.5%
Rhode Island Housing and Mortgage Finance Corporation
(Homeowner Opportunity) 3.15%, Series B, 12/15/1999
(LOC; Transamerica Life and Insurance) 13,815,000 13,815,000
South Carolina--3.1%
South Carolina Housing Finance and Development Authority,
Mortgage Revenue
3.70%, Series B, 7/1/1999 (Escrowed in; U.S. Treasury Bills) 10,000,000 10,000,000
South Carolina Jobs Economic Development Authority,
EDR, VRDN (Wellman Inc., Project) 3.50% (LOC; Wachovia
Bank and Trust Co.)a 10,010,000 10,010,000
York County, Industrial Revenue, VRDN (Textron Project)
5.322% (LOC; Bankers Trust Co.)a 7,500,000 7,500,000
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Principal
Tax Exempt Investments (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Tennessee--3.5%
Oak Ridge, IDB, Solid Waste Revenue VRDN (M4 Environmental)
3.35% (LOC; Sun Trust Bank)a 10,000,000 10,000,000
Sevier County Public Building Authority,
Local Government Public Improvement, VRDN:
3.25%, Series A-1 (Insured; AMBAC and SBPA;
Krediet Bank)a 6,760,000 6,760,000
3.25%, Series B-2 (Insured; AMBAC and SBPA;
Krediet Bank)a 3,745,000 3,745,000
3.25%, Series III-C-4 (Insured; AMBAC and Liquidity
Facility; Landesbank Hessen)a 10,000,000 10,000,000
3.65% Series A-1 (Insured; AMBAC and SBPA;
Krediet Bank)a 260,000 260,000
3.65%, Series B-2 (Insured; AMBAC and SBPA;
Krediet Bank)a 440,000 440,000
Texas--14%
Brazos River Harbor Naval District, VRDN:
Brazoria County Revenue Multi-Mode (BASF Corp.)
3.40% (LOC; BASF Corp.)a 6,000,000 6,000,000
(Dow Chemical Co. Project):
Brazoria County Revenue 3.50%
(LOC; Dow Chemical Co.)a 30,500,000 30,500,000
Harbor Revenue 3.50% (LOC; Dow Chemical Co.)a 10,000,000 10,000,000
Gulf Coast Industrial Development Authority,
Marine Term Revenue, VRDN
(Amoco Oil Co. Project)
3.45% (LOC; Amoco Credit Corp.)a 15,300,000 15,300,000
Gulf Coast Waste Disposal Authority, Environmental
Facilities Revenue, VRDN
(Bayer Corp. Project) 3.50% (LOC; Bayer Corp.)a 23,000,000 23,000,000
PanHandle-Plains Higher Education Authority Inc.,
Student Loan Revenue, VRDN
3.25%, Series A (LOC; Student Loan
Marketing Association)a 13,000,000 13,000,000
State of Texas, TRAN 4.50%, 8/31/1999 8,000,000 8,020,878
Texas Public Finance Authority, Revenue, G.O., CP:
2.70%, Series A, 7/22/1999 (Liquidity Facility:
Toronto-Dominion Bank and
Union Bank of Switzerland) 10,000,000 10,000,000
3.15%, Series A, 9/15/1999 (Liquidity Facility:
Toronto-Dominion Bank and
Union Bank of Switzerland) 10,300,000 10,300,000
</TABLE>
The Fund 11
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Principal
Tax Exempt Investments (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Utah--1%
Intermountain Power Agency, Power Supply Revenue, CP
2.70%, 7/16/1999 (Liquidity Facility: Bank of America
and Bank of Nova Scotia) 9,000,000 9,000,000
Virginia--1.1%
Richmond Industrial Development Authority, Revenue,
VRDN (Cogentrix of Richmond Project
3.75%, Series A (LOC; Banque Paribas)a 10,000,000 10,000,000
Wisconsin--1.3%
Wisconsin Health and Educational Facilities Authority,
Revenue, CP (SSM Health Care) 3.10%, Series B, 7/26/1999
(Insured; MBIA and Liquidity
Facility; First National Bank of Chicago) 11,440,000 11,440,000
- ---------------------------------------------------------------------------------------------
Total Investments (cost $906,098,559) 100.6% 906,098,559
Liabilities, Less Cash and Receivables (.6%) (4,970,861)
Net Assets 100.0% 901,127,698
</TABLE>
12
<PAGE>
- -------------------------------------------------------------------------------
Summary of Abbreviations
<TABLE>
<S> <C> <C> <C>
AMBAC American Municipal Bond MBIA Municipal Bond Investors
Assurance Corporation Assurance Insurance
BAN Bond Anticipation Notes Corporation
CP Commercial Paper PCR Pollution Control Revenue
EDR Economic Development Revenue RAN Revenue Anticipation Notes
EIR Environment Improvement Revenue RRR Resources Recovery Revenue
FGIC Financial Guaranty Insurance Company SBPA Standby Bond Purchase
FSA Financial Security Assurance Agreement
GAN Grant Anticipation Notes SFMR Single Family Mortgage Revenue
GO General Obligation SWDR Solid Waste Disposal Revenue
HR Hospital Revenue TAN Tax Anticipation Notes
IDB Industrial Development Board TRAN Tax and Revenue Anticipation
IDR Industrial Development Revenue Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
LOR Limited Obligation Revenue
</TABLE>
- --------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- --------------------------------------------------------------------------------
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 94.3
AAA/AAb AAA/AAb AAA/AAb 1.2
Not Ratedc Not Ratedc Not Ratedc 4.5
100.0
a Securities payable on demand. Variable interest rate--subject to periodic
change.
b Notes which are not F, MIG or SP rated are represented by bond ratings of
the issuers.
c Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the fund may invest.
See notes to financial statements.
The Fund 13
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999
- --------------------------------------------------------------------------------
Cost Value
- --------------------------------------------------------------------------------
Assets ($):
Investments in securities-See Statement of
Investments 906,098,559 906,098,559
Cash 2,316,812
Interest receivable 7,225,935
Prepaid expenses and other assets 43,521
915,684,827
- --------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 348,828
Payable for investment securities purchased 14,000,000
Accrued expenses and other liabilities 208,301
14,557,129
- --------------------------------------------------------------------------------
Net Assets ($) 901,127,698
- --------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 901,401,973
Accumulated net realized gain (loss) on investments (274,275)
- --------------------------------------------------------------------------------
Net Assets ($) 901,127,698
- --------------------------------------------------------------------------------
Shares Outstanding
(5 billion shares of $.01 par value Common Stock authorized) 903,177,509
- --------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share ($) 1.00
See notes to financial statements.
14
<PAGE>
STATEMENT OF OPERATIONS
Year Ended May 31, 1999
- --------------------------------------------------------------------------------
Investment Income ($)
- --------------------------------------------------------------------------------
Interest Income 31,119,495
Expenses:
Management fee--Note 2(a) 4,630,493
Shareholder servicing costs--Note 2(b) 980,988
Custodian fees 72,323
Directors' fees and expenses--Note 2(c) 65,017
Registration fees 47,577
Professional fees 34,627
Prospectus and shareholders' reports 22,296
Miscellaneous 21,084
Total Expenses 5,874,405
Investment Income--Net 25,245,090
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 1(b)($):
Net realized gain (loss) on investments (117,565)
Net unrealized appreciation (depreciation) on investments 1,071
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments (116,494)
Net Increase in Net Assets Resulting from Operations 25,128,596
See notes to financial statements.
The Fund 15
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended May 31,
---------------------------------
1999 1998
- --------------------------------------------------------------------------------
Operations ($):
Investment income--net 25,245,090 30,785,273
Net realized gain (loss) on investments (117,565) (34,746)
Net unrealized appreciation (depreciation)
on investments 1,071 -
Net Increase (Decrease) in Net Assets
Resulting from Operations 25,128,596 30,750,527
Dividends to Shareholders From ($):
Investment income--net (25,379,021) (30,785,273)
Capital Stock Transactions ($):
Net proceeds from shares sold 3,315,094,165 2,925,580,744
Dividends reinvested 14,582,815 17,843,487
Cost of shares redeemed (3,332,016,091) (3,064,320,922)
Increase (Decrease) in Net Assets from
Capital Stock Transactions (2,339,111) (120,896,691)
Total Increase (Decrease) in Net Assets (2,589,536) (120,931,437)
- --------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 903,717,234 1,024,648,671
End of Period 901,127,698 903,717,234
Undistributed Investment Income-Net - 133,918
See notes to financial statements.
16
<PAGE>
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,
--------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------
Per Share Data ($):
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .027 .031 .029 .031 .029
Distributions:
Dividends from investment income--
net (.027) (.031) (.029) (.031) (.029)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------
Total Return (%) 2.78 3.13 2.98 3.16 2.98
- --------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net
assets .63 .66 .65 .64 .62
Ratio of net investment income
to average net assets 2.73 3.08 2.94 3.11 2.91
- --------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 901,128 903,717 1,024,649 950,598 933,311
See notes to financial statements.
The Fund 17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Municipal Money Market Fund, Inc. (the "fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified
open-end management investment company. The fund's investment objective is to
maximize current income exempt from Federal income tax to the extent consistent
with the preservation of capital and the maintenance of liquidity. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc.
is the distributor of the fund's shares, which are sold to the public 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 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 differfrom those estimates.
(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.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Interest income, adjusted for amortization of
premiums and original issue discounts on investments, is earned from settlement
date and recognized on the accrual basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Cost of investments
represent amortized cost. Under the terms of the custody agreement, the fund
received net earnings credits of $57,811 during the period ended
18
<PAGE>
May 31, 1999 based on available cash balances left on deposit. Income earned
under this arrangement is included in interest income.
(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 gain, 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 gain can be offset by capital
loss carryovers, it is the policy of the fund not to distribute such gain.
(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.
The fund has an unused capital loss carryover of approximately $250,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to May 31, 1999. The carryover
does not include net realized securities losses from November 1, 1998 through
May 31, 1999 which are treated, for Federal income tax purposes, as arising in
fiscal 2000. If not applied, $1,000 of the carryover expires in fiscal 2000,
$4,000 expires in fiscal 2001, $49,000 expires in fiscal 2002, $36,000 expires
in fiscal 2003, $7,000 expires in fiscal 2004, $2,000 expires in fiscal 2005,
$21,000 expires in fiscal 2006 and $130,000 expires in fiscal 2007.
At May 31, 1999, 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).
The Fund 19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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 1% of the value of the fund's average
daily net assets and is payable monthly.
(b) Under the Shareholder Services Plan, the fund reimburses Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, an amount not to exceed
an annual rate of .25 of 1% 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, 1999, the fund was charged $600,984 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 May 31, 1999, the fund was charged $277,855 pursuant to the transfer
agency agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $4,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
20
<PAGE>
REPORT OF INDEPENDENT AUDITORS
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, 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 generally accepted auditing
standards. 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 May 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
Dreyfus Municipal Money Market Fund, Inc. at May 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the indicated years, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
New York, New York
July 6, 1999
The Fund 21
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby designates all the dividends
paid from investment income-net during the fiscal year ended May 31, 1999 as
"exempt-interest dividends" (not generally subject to regular Federal income
tax).
22
<PAGE>
For More Information
Dreyfus
Municipal Money Market Fund, 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
90 Washington 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) 1999, Dreyfus Service Corporation 910AR995
