Dreyfus
Institutional
Money Market Fund
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
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2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
16 Notes to Financial Statements
20 Report of Independent Auditors
21 Important Tax Information
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Institutional
Money Market Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Institutional Money
Market Fund, 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 Institutional Money Market Fund.
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 Institutional Money Market Fund perform during the period?
For the 12-month period ended December 31, 1999, the fund produced a yield of
4.67% for its Money Market Series and 4.26% for its Government Securities
Series. Taking into account the effect of compounding, the effective yield was
4.77% for its Money Market Series and 4.34% 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.
A surprisingly large jump in the Consumer Price Index in May pushed policymakers
closer to a rate hike. Although the Fed did not
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
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 $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE
FUND.
The Fund
STATEMENT OF INVESTMENTS
MONEY MARKET SERIES
December 31, 1999
<TABLE>
<CAPTION>
Principal
NEGOTIABLE BANK CERTIFICATES OF DEPOSITS--11.0% Amount ($) Value ($)
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Branch Bank & Trust Co.
<S> <C> <C>
5.04%, 1/10/2000 18,000,000 17,999,872
First National Bank of Maryland
5.14%, 2/23/2000 26,000,000 25,998,727
Union Bank of California, N.A.
5.98%, 8/1/2000 21,000,000 21,000,000
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $64,998,599) 64,998,599
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COMMERCIAL PAPER--45.4%
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Associates Corp. of North America
4.00%, 1/3/2000 25,000,000 24,994,444
Associates First Capital Corp.
4.00%, 1/3/2000 25,000,000 24,994,444
Atlantis One Funding Corp.
5.92%-5.96%, 2/22/2000-3/24/2000 25,000,000 24,766,567
BCI Funding Corp.
6.05%, 5/2/2000 21,000,000 20,582,252
Commonwealth Bank of Australia
6.00%, 4/6/2000 25,000,000 24,608,000
DaimlerChrysler North America Holding Corp.
6.10%, 2/29/2000 25,000,000 24,755,806
Donaldson, Lufkin & Jenrette Securities Corp.
6.22%, 3/3/2000 15,000,000 14,841,771
General Electric Capital Corp.
5.93%, 6/16/2000 20,000,000 19,468,383
General Electric Capital Services Inc.
5.93%, 3/21/2000 10,000,000 9,870,889
Goldman Sachs Group Inc.
6.07%, 2/29/2000 20,500,000 20,300,768
Heller Financial Inc.
6.01%, 2/25/2000 15,000,000 14,864,333
Lehman Brothers Holdings Inc.
6.20%, 3/8/2000 20,500,000 20,270,702
UBS Finance (DE) Inc.
4.25%, 1/3/2000 25,000,000 24,994,097
TOTAL COMMERCIAL PAPER
(cost $269,312,456) 269,312,456
Principal
CORPORATE NOTES--19.9% Amount ($) Value ($)
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Bear, Stearns & Co. Inc.
6.52%, 2/22/2000 20,000,000 (a) 20,001,551
Donaldson, Lufkin & Jenrette Securities Corp.
5.96%, 5/26/2000 3,045,000 3,048,141
Ford Motor Credit Corp.
5.70%, 5/5/2000 20,000,000 (a) 20,000,000
GTE Corp.
6.22%, 6/12/2000 25,000,000 (a) 24,992,833
General Motors Acceptance Corp.
5.96%-6.28%, 2/22/2000-8/7/2000 19,800,000 19,824,368
Heller Financial Inc.
6.17%, 4/13/2000 10,000,000 (a) 10,006,716
Paine Webber Group Inc.
6.66%, 4/20/2000-9/15/2000 20,000,000 (a) 20,000,000
TOTAL CORPORATE NOTES
(cost $117,873,609) 117,873,609
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SHORT-TERM BANK NOTES--6.7%
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First Tennessee Bank
5.68%, 4/19/2000 20,000,000 (a) 19,997,665
Old Kent Bank & Trust Co.
5.71%, 6/2/2000 20,000,000 (a) 19,995,163
TOTAL SHORT-TERM BANK NOTES
(cost $39,992,828) 39,992,828
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U.S. GOVERNMENT AGENCIES--3.3%
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Federal Home Loan Banks
5.82%, 5/5/2000-5/11/2000
(cost $19,339,812) 19,740,000 (a) 19,339,812
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REPURCHASE AGREEMENTS--3.4%
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Barclays Capital Inc.
dated 12/31/1999, 2.00% due 1/3/2000
in the amount of $20,003,333
(fully collateralized by U.S. Treasury Bills,
due 7/31/2000, value $20,301,240)
(cost $20,000,000) 20,000,000 20,000,000
The Fund
STATEMENT OF INVESTMENTS
MONEY MARKET SERIES (CONTINUED)
Principal
TIME DEPOSITS--9.7% Amount ($) Value ($)
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Banc One N.A. (Grand Cayman)
4.42%, 1/3/2000 25,000,000 25,000,000
Chase Manhattan Bank NA (London)
4.00%, 1/3/2000 25,000,000 25,000,000
Republic National Bank of New York (London)
4.50%, 1/3/2000 7,563,000 7,563,000
TOTAL TIME DEPOSITS
(cost $57,563,000) 57,563,000
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TOTAL INVESTMENT
(cost $589,080,304) 99.4% 589,080,304
CASH AND RECEIVABLES (NET) .6% 3,365,359
NET ASSETS 100.0% 592,445,663
(A) VARIABLE INTEREST RATE-SUBJECT TO PERIODIC CHANGE.
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF INVESTMENTS
GOVERNMENT SECURITIES SERIES
December 31, 1999
Annualized
Yield on
Date of Principal
U.S. TREASURY BILLS--42.1% Purchase (%) Amount ($) Value ($)
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1/13/2000
(cost $34,939,442) 5.21 35,000,000 34,939,442
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U.S. TREASURY NOTES--24.2%
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5.875%, 2/15/2000 4.69 8,000,000 8,010,066
5.50%, 3/31/2000 4.66 5,000,000 5,007,472
5.50%, 5/31/2000 4.88 4,000,000 4,006,474
5.875%, 6/30/2000 5.23 3,000,000 3,007,418
TOTAL U.S. TREASURY NOTES
(cost $20,031,430) 20,031,430
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REPURCHASE AGREEMENTS--33.3%
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Barclays Capital, Inc.
dated 12/31/1999, due 1/3/2000
in the amount of $3,567,446
(fully collateralized by $3,605,000
U.S. Treasury Notes 5.75%, due
11/15/2000, value $3,622,603) 1.50 3,567,000 3,567,000
Bear, Stearns & Co. Inc.
dated 12/31/1999, due 1/3/2000
in the amount of $6,001,250
(fully collateralized by $6,205,000
U.S. Treasury Strips, due
5/15/2000, value $6,076,557) 2.50 6,000,000 6,000,000
Donaldson, Lufkin & Jenrette Securities Corp.
dated 12/31/1999, due 1/3/2000
in the amount of $6,001,000
(fully collateralized by $5,957,000
U.S. Treasury Notes 5.375%, due
7/31/2000, value $6,075,812) 2.00 6,000,000 6,000,000
Morgan Stanley Dean Witter & Co.
dated 12/31/1999, due 1/3/2000
in the amount of $6,001,235
(fully collateralized by $6,145,000
U.S. Treasury Notes 4.625%, due
11/30/2000, value $6,090,310) 2.47 6,000,000 6,000,000
The Fund
STATEMENT OF INVESTMENTS
GOVERNMENT SECURITIES SERIES (CONTINUED)
Annualized
Yield on
Date of Principal
REPURCHASE AGREEMENTS (CONTINUED) Purchase (%) Amount ($) Value ($)
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Warburg Dillon Read, Inc.
dated 12/31/1999, due 1/3/2000
in the amount of $6,001,250
(fully collateralized by $6,436,000
U.S.Treasury Bills, due
11/9/2000, value $6,120,636) 2.50 6,000,000 6,000,000
TOTAL REPURCHASE AGREEMENTS
(cost $27,567,000) 27,567,000
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TOTAL INVESTMENTS
(cost $82,537,872) 99.6% 82,537,872
CASH AND RECEIVABLES (NET) .4% 356,554
NET ASSETS 100.0% 82,894,426
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
Money Government
Market Securities
Series Series
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ASSETS ($):
<S> <C> <C>
Investments in securities, at value (including repurchase
agreements of $20,000,000 and $27,567,000
for the Money Market Series and the Government
Securities Series, respectively)--Note 2(b) 589,080,304 82,537,872
Cash 69,795 131,583
Interest Receivable 3,603,554 268,845
Prepaid expenses 7,843 6,244
592,761,496 82,944,544
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LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 247,710 14,187
Accrued expenses 68,123 35,931
315,833 50,118
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NET ASSETS ($) 592,445,663 82,894,426
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 592,483,199 82,912,170
Accumulated net realized gain (loss) on investments (37,536) (17,744)
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NET ASSETS ($) 592,445,663 82,894,426
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SHARES OUTSTANDING
(unlimited number of $.001 par value shares of
Beneficial Interest authorized) 592,483,199 82,912,170
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NET ASSET VALUE, offering and redemption price per share ($) 1.00 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Year Ended December 31, 1999
Money Government
Market Securities
Series Series
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INVESTMENT INCOME ($):
INTEREST INCOME 29,482,363 3,919,354
EXPENSES--NOTE 2(C):
Management fee--Note 3(a) 2,817,113 396,676
Shareholder servicing costs--Note 3(b) 153,110 45,619
Custodian fees 70,439 33,865
Trustees' fees and expenses--Note 3(c) 60,196 9,539
Registration fees 29,630 19,859
Professional fees 24,346 33,555
Prospectus and shareholders' reports 6,942 786
Miscellaneous 3,150 528
TOTAL EXPENSES 3,164,926 540,427
INVESTMENT INCOME--NET 26,317,437 3,378,927
NET REALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 2(B) ($): (3,181) (17,744)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 26,314,256 3,361,183
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Money Market Series Government Securities Series
----------------------------------------------------------------------------------
Year Ended December 31, Year Ended December 31,
----------------------------------------------------------------------------------
1999 1998 1999 1998
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OPERATIONS ($):
<S> <C> <C> <C> <C>
Investment income--net 26,317,437 27,102,277 3,378,927 3,992,120
Net realized gain (loss)
on investments (3,181) (27,774) (17,744) 10,367
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS 26,314,256 27,074,503 3,361,183 4,002,487
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DIVIDENDS TO SHAREHOLDERS
FROM ($):
Investment income--net (26,317,437) (27,102,277) (3,378,927) (3,992,120)
Net realized gain on
investments -- -- -- (10,396)
TOTAL DIVIDENDS (26,317,437) (27,102,277) (3,378,927) (4,002,516)
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BENEFICIAL INTEREST
TRANSACTIONS
($1.00 PER SHARE):
Net proceeds from
shares sold 3,273,829,754 3,374,356,270 733,136,152 579,548,799
Dividends reinvested 3,084,320 2,871,717 1,327,202 1,501,989
Cost of shares redeemed (3,224,747,435) (3,368,354,264) (720,166,100) (620,130,251)
INCREASE (DECREASE) IN
NET ASSETS FROM
BENEFICIAL INTEREST
TRANSACTIONS 52,166,639 8,873,723 14,297,254 (39,079,463)
TOTAL INCREASE (DECREASE)
IN NET ASSETS 52,163,458 8,845,949 14,279,510 (39,079,492)
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NET ASSETS ($):
Beginning of Period 540,282,205 531,436,256 68,614,916 107,694,408
END OF PERIOD 592,445,663 540,282,205 82,894,426 68,614,916
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
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
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PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .047 .050 .051 .049 .054
Distributions:
Dividends from investment income--net (.047) (.050) (.051) (.049) (.054)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
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TOTAL RETURN (%) 4.78 5.14 5.17 5.03 5.57
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .56 .57 .57 .58 .62
Ratio of net investment income
to average net assets 4.67 5.02 5.06 4.91 5.43
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Net Assets, end of period ($ x 1,000) 592,446 540,282 531,436 483,156 401,032
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS Government Securities Series
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------
1999 1998 1997 1996 1995
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PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .043 .048 .048 .047 .052
Distributions:
Dividends from investment income--net (.043) (.048) (.048) (.047) (.052)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00
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TOTAL RETURN (%) 4.34 4.87 4.95 4.84 5.36
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .68 .68 .61 .63 .65
Ratio of net investment income
to average net assets 4.26 4.76 4.84 4.74 5.23
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Net Assets, end of period ($ x 1,000) 82,894 68,615 107,694 102,726 123,171
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--General:
Dreyfus Institutional Money Market Fund (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 Beneficial Interest: 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.
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 funds' 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 Trustees 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. 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 receives net earnings credits based on available cash balances
left on deposit. Under the terms of the custody agreement, the Government
Securities Series received net earnings credits of $288 during the period ended
December 31, 1999 based on available cash balances on deposit. Income earned
under this arrangement is included in interest.
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
among them on a pro rata basis.
(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.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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
$37,500 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, $6,500 of the carryover expires in fiscal 2002, $28,000 expires in
fiscal 2006 and $3,000 expires in fiscal 2007.
The Government Securities Series has an unused capital loss carryover of
approximately $18,000 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 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.
(b) Under the Shareholder Services Plan, each series 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 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 mainte
nance of shareholder accounts. During the period ended December 31, 1999, the
Money Market Series and the Government Securities Series were charged $52,801
and $37,040, 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 $92,446 and $3,363, respectively, pursuant to the transfer
agency agreement.
(c) Each trustee 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 trustee 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 trustee in a Fund Group, the
trustees 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.
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Institutional Money Market Fund, Inc.
We have audited the accompanying statement of assets and liabilities, including
the statements of investments, of Dreyfus Institutional Money Market, 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 Institutional Money Market, 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
IMPORTANT TAX INFORMATION (Unaudited)
For State individual income tax purposes, the Government Securities Series
hereby designates 32.62% 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.
The Fund
For More Information
Dreyfus Institutional Money Market Fund
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 179-195AR9912
