<PAGE>
Hartford
Money Market Fund, Inc.
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Annual Report
December 31, 1996
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LETTER TO SHAREHOLDERS
Dear Shareholders,
Although 1996 began and ended with the same "slow growth/low inflation"
forecast, perceptions about the rate of economic growth and how it would
affect the direction of Federal Reserve policy shifted rapidly during the
year. Over the first six months of the year, bonds bore the brunt of shifting
expectations. Prices tumbled as economic growth accelerated and inflation
fears intensified. Stock investors, anticipating that a stronger economy could
lead to stronger earnings, disregarded rising interest rates and pushed the
major stock indexes to a series of new all-time highs. But even stocks proved
vulnerable in July, giving up the bulk of their first half gains as interest
rates moved above 7% and earnings forecasts were reduced. Then sharply slower
third quarter growth reversed the downward trend in bonds and rekindled the
rally in stocks. For the full year, stocks, as measured by the S&P 500,
returned just under 23% as cash flows into stock mutual funds shattered
previous records. Bonds, as measured by the Lehman Aggregate Bond Index, more
than made up for earlier losses, finishing the year with a positive return of
better than 3.5%. But progress was far from even among market sectors. In
general, high quality, large-cap stocks did the best. In the bond market,
mortgage-backed and asset-backed securities outperformed government and
corporate issues. In contrast to stocks, lower quality issues were the best
performers within the corporate bond sector.
Volatility was the order of the day in the credit markets as well. Although
rates on one-year Treasury Bills only increased 34 basis points from 5.14% to
5.48% between year-end 1995 and year-end 1996, they fluctuated considerably
over the course of the year. Right after the Federal Reserve relaxed interest
rates at the end of January 1996, the Treasury Bill rate dropped as low as
4.78% before peaking at 5.96% on July 8. The Federal Reserve continues to show
restraint, exhibiting a neutral policy stance. The markets, on the other hand,
look as if they will keep trading on the economic releases, often treating
each bit of monthly data as if it were the beginning of a trend. Accordingly,
we expect continued volatility in the credit markets as 1997 unfolds.
[LOGO] [LOGO]
Lowndes A. Smith Joseph H. Gareau
CHAIRMAN PRESIDENT
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HARTFORD MONEY MARKET FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
AMORTIZED AMORTIZED
PRINCIPAL COST AND PRINCIPAL COST AND
AMOUNT VALUE AMOUNT VALUE
- ---------- ------------ ---------- -----------
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER -- 82.2% CORPORATE NOTES -- 4.4%
</TABLE>
<TABLE>
<C> <S> <C>
$ 500,000 Abbey National North America
5.32% due 03/11/97.......... $ 494,902
500,000 American Home Products Corp.
5.33% due 01/24/97.......... 498,297
410,000 Aristar, Inc.
5.42% due 02/07/97.......... 407,716
500,000 Bankers Trust Corp.
5.29% due 05/30/97.......... 489,053
500,000 BFCE U.S. Finance Corp.
5.36% due 01/07/97.......... 499,553
500,000 Countrywide Home Loan
5.44% due 01/13/97.......... 499,093
500,000 General Signal Corp.
5.35% due 01/15/97.......... 498,960
500,000 Goldman Sachs Group L.P.
5.31% due 03/03/97.......... 495,501
500,000 Johnson Controls, Inc.
5.37% due 01/23/97.......... 498,359
500,000 MCI Communications Corp.
5.30% due 02/20/97.......... 496,319
500,000 Merrill Lynch & Co., Inc.
5.32% due 01/21/97.......... 498,522
500,000 National Fuel Gas
5.35% due 02/12/97.......... 496,879
500,000 Nordbanken North America
5.38% due 02/28/97.......... 495,666
500,000 NYNEX Corp.
5.43% due 03/18/97.......... 494,268
500,000 Pacific Dunlop Ltd.
5.54% due 01/08/97.......... 499,461
500,000 PHH Corp.
5.37% due 01/31/97.......... 497,763
500,000 Sanwa Business Credit
5.40% due 01/15/97.......... 498,950
500,000 Sears Roebuck Acceptance Corp.
5.32% due 03/19/97.......... 494,311
500,000 Westpac Capital Corp.
5.38% due 02/07/97.......... 497,235
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$9,350,808
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$ 500,000 General Motors Acceptance
Corp.
5.72% due 04/11/97.......... $ 500,278
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REPURCHASE AGREEMENT -- 11.4%
1,296,000 Interest in $108,163,000 joint
repurchase agreement dated
12/31/96 with State Street
Bank 6.70% due 01/02/97;
maturity amount $1,296,482;
(Collateralized by
$53,860,000 U.S. Treasury
note 7.5% due 02/15/05 and
$54,303,000 U.S. Treasury
Note 8.875% due 08/15/17)... 1,296,000
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Total short-term securities... $11,147,086
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-----------
</TABLE>
<TABLE>
<S> <C> <C>
DIVERSIFICATION OF ASSETS:
Total investment in securities
(identified cost $11,147,086)*............. 98.0% $11,147,086
Excess of cash and receivables over
liabilities................................ 2.0% 234,151
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Net assets applicable to $1.00 per share
based on 11,381,237 shares outstanding..... 100.0% $11,381,237
------ ------------
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SUMMARY OF SHAREHOLDERS' EQUITY:
Capital stock, par value $0.10 per share; authorized
500,000,000 shares; outstanding 11,381,237
shares............................................. $ 1,138,124
Capital surplus...................................... 10,243,113
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Net assets, applicable to shares outstanding......... $11,381,237
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</TABLE>
* Aggregate cost for Federal income tax purposes.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
1
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Hartford Money Market Fund, Inc.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................. $716,025
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EXPENSES:
Shareholder accounting services........................... 96,999
Investment advisory services.............................. 32,759
Registration fees......................................... 31,248
Administration fees....................................... 23,589
Custodian fees............................................ 17,570
Board of directors fees................................... 94
Other..................................................... 5,754
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Total expenses.......................................... 208,013
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Net investment income..................................... 508,012
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Net increase in net assets resulting from operations...... $508,012
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--------
</TABLE>
<TABLE>
<S> <C> <C>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
------------------- -------------------
<S> <C> <C>
OPERATIONS:
Net investment income..................................... $ 508,012 $ 567,107
------------------- -------------------
Net increase in net assets resulting from operations...... 508,012 567,107
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income..................................... (508,012) (567,107)
CAPITAL SHARE TRANSACTIONS (AT NET ASSET VALUE OF $1.00 PER
SHARE):
Proceeds from fund shares sold............................ 33,489,406 33,634,110
Net asset value of fund shares issued upon reinvestment of
dividends................................................ 505,156 564,345
Cost of fund shares redeemed.............................. (34,701,993) (33,793,519)
------------------- -------------------
Net (decrease) increase in net assets resulting from
capital share transactions............................... (707,431) 404,936
------------------- -------------------
Total (decrease) increase in net assets................... (707,431) 404,936
NET ASSETS:
Beginning of period....................................... 12,088,668 11,683,732
------------------- -------------------
End of period............................................. $ 11,381,237 $ 12,088,668
------------------- -------------------
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</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
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HARTFORD MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. ORGANIZATION:
Hartford Money Market Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund was organized under the laws of the
State of Maryland in February 1982, and commenced operations in June 1982.
The Fund seeks a high level of current income consistent with liquidity and
preservation of capital through investments in the obligations of the U.S.
Government and its agencies, money market instruments, corporate bonds,
notes and other debt instruments.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the Fund,
which are in accordance with generally accepted accounting principles in the
investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Security gains and
losses are determined on the basis of identified cost.
b) SECURITY VALUATION--Investments are valued at amortized cost, which
approximates fair market value. Under the amortized cost method of
valuation, an instrument is valued by reference to the Fund's
acquisition cost as adjusted for amortization of premium or accretion of
discount.
c) REPURCHASE TRANSACTIONS--A repurchase agreement is an agreement by which
the seller of a security agrees to repurchase the security sold at a
mutually agreed upon time and price.
At the time the Fund enters into a repurchase agreement, the value of the
underlying collateral security(ies), including accrued interest, will be
equal to or exceed the value of the repurchase agreement and, in the case
of repurchase agreements exceeding one day, the value of the underlying
security(ies), including accrued interest, is required during the term of
the agreement to be equal to or exceed the value of the repurchase
agreement. Security(ies) which serve to collateralize the repurchase
agreement are held by the Fund's custodian in book entry or physical form
in the custodial account of the Fund. Repurchase agreements are valued at
cost plus accrued interest which approximates fair market value.
In June 1996, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 125, ACCOUNTING
FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF
LIABILITIES. This Statement provides consistent standards for
distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings. Under the provisions of SFAS No.
125, transfers of certain financial assets, such as repurchase
agreements, are required to be accounted for as sales if control, as
defined, over those assets has been surrendered by the transferor. The
Statement also requires collateral under repurchase agreements and
securities lending transactions to be separately classified by the debtor
and recognized as an asset by the creditor in the respective financial
statements if certain conditions are met. SFAS No. 125 is effective for
transfers of financial assets occurring after December 31, 1996, except
for certain transfers for which the effective date has been delayed to
January 1, 1998 by SFAS No. 127, DEFERRAL OF THE EFFECTIVE DATE OF
CERTAIN PROVISIONS OF FASB STATEMENT NO. 125, issued by the FASB in
December 1996. Management does not believe the adoption of this new
accounting standard will have a material impact on the financial position
or future results of operations of the Fund.
d) JOINT TRADING ACCOUNT--Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, together with other
affiliated entities, may transfer uninvested cash balances into a joint
trading account managed by Hartford Investment Management Company
(HIMCO), an affiliate. These balances may be invested in one or more
repurchase agreements and/or short-term money market instruments.
e) FEDERAL INCOME TAXES--For Federal income tax purposes, the Fund intends
to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code by distributing substantially all of its taxable
income to its shareholders and otherwise complying with the requirements
for regulated investment companies. Accordingly, no provision for
Federal income taxes has been made.
3
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HARTFORD MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996
f) FUND SHARE VALUATION AND DIVIDEND DISTRIBUTION TO SHAREHOLDERS--Fund
shares are sold and redeemed on a continuing basis at net asset value.
Interest income and expenses are accrued on a daily basis. The Fund's
net asset value per share is determined as of 4:00 p.m., Eastern
Standard Time, on days the New York Stock Exchange is open for trading.
The Fund seeks to maintain a stable net asset value per share of $1.00
by declaring a daily dividend from net investment income, including net
realized gains and losses, and by valuing its investments using the
amortized cost method. Dividends are distributed monthly.
g) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements and
the reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates and assumptions.
3. INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES AGREEMENTS:
a) INVESTMENT ADVISORY AGREEMENT-- HIMCO, a wholly-owned subsidiary of
Hartford Life Insurance Company (HL), serves as investment adviser to
the Fund pursuant to an agreement approved by the Board of Directors and
shareholders.
Under the terms of the agreement, HIMCO is compensated at a maximum
annual fee of .25% of the Fund's average daily net assets.
b) ADMINISTRATIVE SERVICES AGREEMENT--HL provides administrative services
to the Fund and receives an annual fee equal to .175% of the Fund's
average daily net assets.
The Fund assumes and pays certain other expenses, including, but not
limited to, shareholder accounting fees, registration and directors'
fees. These expenses are either directly attributable to the Fund or are
allocated based on the ratio of the net assets of the Fund to the
combined net assets of the thirteen Hartford Mutual Funds. Directors'
fees represent remuneration paid or accrued to directors not affiliated
with HL or any other related company.
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FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
<S> <C> <C> <C> <C> <C>
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................................... 0.04 0.04 0.03 0.02 0.02
-------- -------- -------- -------- --------
Total income from investment operations..................... 0.04 0.04 0.03 0.02 0.02
LESS DISTRIBUTIONS:
Dividends from net investment income...................... (0.04) (0.04) (0.03) (0.02) (0.02)
-------- -------- -------- -------- --------
Total distributions......................................... (0.04) (0.04) (0.03) (0.02) (0.02)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN................................................ 3.93 % 4.52 % 2.77 % 1.88 % 2.47 %
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Net assets, end of period................................... $11,381 $12,089 $11,684 $11,504 $13,483
Ratio of expenses to average net assets..................... 1.59 % 1.59 % 1.61 % 1.54 % 1.63 %
Ratio of net investment income to average net assets........ 3.88 % 4.43 % 2.72 % 1.82 % 2.44 %
</TABLE>
4
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
HARTFORD MONEY MARKET FUND, INC.:
We have audited the accompanying statement of net assets of Hartford Money
Market Fund, Inc. (a Maryland corporation) as of December 31, 1996, and the
related statement of operations for the year then ended, statements of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended. 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 are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1996,
by correspondence with the custodian. 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
Hartford Money Market Fund, Inc. as of December 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the five yeras in the period then ended in conformity with generally
accepted accounting principles.
Hartford, Connecticut
February 14, 1997 Arthur Andersen LLP
5
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HARTFORD MONEY MARKET FUND, INC.
BULK RATE
P.O. BOX 2999
U.S. POSTAGE
HARTFORD, CT 06104-2999
PAID
PERMIT NO. 1
HARTFORD, CT
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DIRECTORS OF THE FUNDS:
JOSEPH A. BIERNAT - Director
JOSEPH H. GAREAU - Director/President
GOVERNOR WILLIAM A. O'NEILL - Director
MILLARD H. PRYOR, JR. - Director
LOWNDES A. SMITH - Director/Chairman
JOHN K. SPRINGER - Director
WINIFRED E. COLEMAN - Director
CUSTODIAN:
State Street Bank and Trust Company
P.O. Box 1912
Boston, MA 02107
TRANSFER AGENT:
State Street Bank and Trust Company
P.O. Box 1912
Boston, MA 02107
INVESTMENT ADVISER:
The Hartford Investment Management Company (HIMCO)
Hartford Plaza
Hartford, CT 06115
PRINCIPAL UNDERWRITER:
Hartford Equity Sales Company, Inc. (HESCO)
Hartford Plaza
Hartford, CT 06115
Hartford Securities Distribution Company, Inc. (HSD)
Hartford Plaza
Hartford, CT 06115
INDEPENDENT PUBLIC ACCOUNTANTS:
Arthur Andersen LLP
One Financial Plaza
Hartford, CT 06103
HV-1766-25 Printed in U.S.A.