Report to Fellow Shareholders:
Nicholas Money Market Fund's (the "Fund") yields declined in the first
five months of 1999 following the trend of short-term interest rates. The
seven-day current and effective yields fell from 4.92% and 5.04% at
December 31, 1998 to 4.50% and 4.60%, respectfully at May 31, 1999.
Beginning in June 1999 the seven-day current and effective yield began to
increase as the environment for short-term rates turned around and began
rising. By the end of 1999 the Fund's seven-day current and effective yields
had risen to 5.62% and 5.78%, respectively. Selected yields for Nicholas
Money Market are provided in the chart below for the periods ended
December 31, 1999 and 1998.
Yield As Of Yield As Of
12/31/1999 12/31/1998
---------- -----------
Current 7-day* ......................................5.62% 4.92%
Effective 7-day* ....................................5.78% 5.04%
Current 12-month* ...................................4.80% 4.92%
Effective 12-month* .................................4.91% 5.03%
The Fund had nearly eighty-nine percent of its assets invested in corporate
commercial paper with the remainder in corporate variable rate securities
at December 31, 1999. The weighted average days-to-maturity was 37 days.
The Fund, once again, ranked above average in terms of effective 12-month
yield for the year ended December 31, 1999 in the Taxable First Tier Money
Fund group as reported by IBC's Money Market Insight, a service of IBC
Financial Data, Inc. The average for the group of 306 funds was 4.65%.
Only forty-three funds in the above mentioned category had a 12-month
effective yield equal to or higher than the Fund, which places it in the
top 15% of the group.
At February 18, 2000 the Funds seven-day current and effective yields were
5.49% and 5.65%, respectively. Weighted average days-to-maturity stood at
40 days.
Currently the Federal Reserve Board ("the Fed") is leaning toward raising
rates to keep inflation in check. If the Fed raises rates, as it did in
early February 2000, look for short-term rates to also rise.
Thank you for your continued support.
Sincerely,
/s/ Albert O. Nicholas
Albert O. Nicholas
President
*The current yield represents the annualized net investment income per share
for the stated time periods. The effective yield assumes compounding. All
performance and ranking data is historical and does not represent future
results. An investment in the Fund is neither insured nor guaranteed by
the United States Government and there can be no assurance that the Fund
will be able to maintain a stable net asset value of $1.00 per share.
<PAGE>
Statement of Net Assets
December 31, 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Yield to Amortized
Principal Maturity Maturity Cost
Amount Date (Note 1(b)) (Note 1(a))
- ------------- ------------ ----------- -------------
<C> <C> <C> <C>
COMMERCIAL PAPER - 88.75%
$ 500,000 Ford Motor Credit Co. ..................... 01/04/2000 5.88% $ 499,918
3,025,000 Fiserv, Inc. .............................. 01/05/2000 6.19% 3,023,996
1,250,000 Coca-Cola Enterprises, Inc. ............... 01/06/2000 6.51% 1,249,333
900,000 John Deere Capital Corp. .................. 01/06/2000 5.88% 899,569
1,000,000 Wausau-Mosinee Paper Corporation .......... 01/06/2000 6.51% 999,467
2,000,000 Marshall & Ilsley Corp. ................... 01/07/2000 6.03% 1,998,683
1,303,000 American Honda Finance Corporation ........ 01/10/2000 6.17% 1,301,483
3,800,000 Ford Motor Credit Co. ..................... 01/10/2000 5.89% 3,795,779
2,960,000 Torchmark Corp. ........................... 01/10/2000 6.24% 2,956,479
5,475,000 American Honda Finance Corporation ........ 01/11/2000 6.07% 5,467,811
2,000,000 Associates First Capital Corp. ............ 01/12/2000 6.19% 1,996,995
1,225,000 Associates First Capital Corp. ............ 01/13/2000 6.19% 1,222,948
1,309,000 LOCAP, Inc. ............................... 01/14/2000 6.43% 1,306,480
1,275,000 Morgan Stanley Dean Witter & Co. .......... 01/14/2000 6.24% 1,272,628
3,975,000 Bear Stearns Companies, Inc. (The) ........ 01/18/2000 6.04% 3,965,344
2,200,000 DaimlerChrysler N.A. Holding Corp. ........ 01/19/2000 5.94% 2,194,378
2,875,000 American Express Credit Corporation ....... 01/20/2000 5.92% 2,867,223
1,100,000 DaimlerChrysler N.A. Holding Corp. ........ 01/21/2000 5.91% 1,096,856
2,275,000 General Motors Acceptance Corporation ..... 01/21/2000 6.17% 2,268,187
4,000,000 Weyerhaeuser Real Estate Company .......... 01/21/2000 6.03% 3,988,262
2,450,000 General Motors Acceptance Corporation ..... 01/24/2000 6.01% 2,441,682
1,180,000 Banta Corporation ......................... 01/25/2000 6.15% 1,175,711
1,550,000 CIT Group, Inc. (The) ..................... 01/25/2000 6.13% 1,544,319
950,000 John Deere Capital Corp. .................. 01/25/2000 5.90% 946,663
5,300,000 American General Finance Corporation ...... 01/26/2000 6.15% 5,279,847
1,450,000 Banta Corporation ......................... 01/27/2000 6.59% 1,443,765
3,250,000 Fiserv, Inc. .............................. 01/27/2000 6.69% 3,235,808
2,300,000 Wausau-Mosinee Paper Corporation .......... 01/27/2000 6.16% 2,290,800
2,500,000 American Express Credit Corporation ....... 01/28/2000 5.60% 2,490,451
1,000,000 Associates First Capital Corp. ............ 01/28/2000 5.94% 995,972
500,000 Associates First Capital Corp. ............ 01/28/2000 5.97% 497,976
3,500,000 Newell Co. ................................ 01/28/2000 6.04% 3,485,661
6,500,000 Dover Corp. ............................... 01/31/2000 6.38% 6,468,403
3,325,000 General Electric Capital Corporation ...... 01/31/2000 6.13% 3,309,662
200,000 Banta Corporation ......................... 02/01/2000 6.21% 199,025
2,000,000 Wausau-Mosinee Paper Corporation .......... 02/01/2000 6.49% 1,989,769
1,700,000 American General Finance Corporation ...... 02/02/2000 6.05% 1,691,670
2,000,000 General Motors Acceptance Corporation ..... 02/02/2000 6.12% 1,990,032
4,650,000 Bank of America Corp. ..................... 02/03/2000 5.99% 4,626,624
2,600,000 Banta Corporation ......................... 02/04/2000 6.75% 2,584,747
1,500,000 General Electric Capital Corporation ...... 02/04/2000 5.99% 1,492,215
1,500,000 Banta Corporation ......................... 02/07/2000 6.70% 1,490,448
1,725,000 CIT Group, Inc. (The) ..................... 02/07/2000 6.03% 1,715,141
3,500,000 LOCAP, Inc. ............................... 02/07/2000 6.25% 3,479,245
2,250,000 John Deere Capital Corp. .................. 02/08/2000 6.06% 2,236,705
1,500,000 DaimlerChrysler N.A. Holding Corp. ........ 02/09/2000 6.12% 1,490,797
1,000,000 Wausau-Mosinee Paper Corporation .......... 02/09/2000 6.55% 993,422
2,325,000 General Electric Capital Corporation ...... 02/10/2000 6.15% 2,310,397
3,750,000 Marshall & Ilsley Corp. ................... 02/11/2000 6.13% 3,725,711
2,300,000 DaimlerChrysler N.A. Holding Corp. ........ 02/14/2000 6.14% 2,283,927
1,225,000 Marshall & Ilsley Corp. ................... 02/15/2000 6.14% 1,216,235
1,250,000 CIT Group, Inc. (The) ..................... 02/16/2000 6.08% 1,240,910
1,675,000 American Express Credit Corporation ....... 02/17/2000 5.62% 1,663,484
2,000,000 LOCAP, Inc. ............................... 02/18/2000 6.60% 1,983,517
3,000,000 Weyerhaeuser Real Estate Company .......... 02/18/2000 6.25% 2,976,617
1,400,000 Vulcan Materials Co. ...................... 02/29/2000 6.02% 1,387,031
350,000 Vulcan Materials Co. ...................... 02/29/2000 6.41% 346,536
------------
TOTAL COMMERCIAL PAPER ............... 125,092,744
------------
VARIABLE RATE SECURITIES - 11.75%
5,000,000 Anchor National Life
Funding Agreement (1) (2) ................ 01/03/2000 6.75% 5,000,000
6,566,701 Firstar Bank U.S.A., N.A. (1) ............. 01/03/2000 6.34% 6,566,701
5,000,000 Morgan Stanley Group, Inc. (1) ............ 01/15/2001 6.37% 5,000,000
------------
TOTAL VARIABLE RATE SECURITIES ....... 16,566,701
------------
------------
TOTAL INVESTMENTS .................... 141,659,445
------------
LIABILITIES, NET OF CASH
AND RECEIVABLES (0.50%) ............. (710,027)
------------
TOTAL NET ASSETS (Basis of
percentages disclosed above) ........ $140,949,418
------------
------------
NET ASSET VALUE PER SHARE ($.0001 par value, 3,000,000,000
shares authorized), offering price and redemption price
($140,949,418 /140,949,418 shares outstanding) ................. $1.00
-----
-----
</TABLE>
(1) These securities are subject to a demand feature as defined by the
Securities and Exchange Commission.
(2) Not readily marketable for a 90 day period.
The accompanying notes to financial statements
are an integral part of this statement.
Statement of Operations
For the year ended December 31, 1999
- -------------------------------------------------------------------------------
<TABLE> <C>
<C>
INCOME:
Interest .......................................... $7,903,574
EXPENSES:
Management fee (Note 2) ........................... 450,181
Transfer agent fees ............................... 111,657
Legal fees ........................................ 61,173
Registration fees ................................. 45,994
Postage and mailing ............................... 18,394
Audit and tax consulting fees ..................... 15,000
Printing .......................................... 12,504
Directors' fees ................................... 12,000
Custodian fees .................................... 6,883
Insurance ......................................... 2,169
Telephone ......................................... 1,696
Other operating expenses .......................... 4,566
----------
742,217
----------
Net investment income ......................... $7,161,357
----------
----------
</TABLE>
The accompanying notes to financial statements are
an integral part of this statement.
Statements of Changes in Net Assets
For the years ended December 31, 1999 and 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<C> <C> <C>
OPERATIONS:
Net investment income ..................................... $ 7,161,357 $ 7,494,990
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income
($0.048 and $0.052 per share, respectively) ............. (7,161,357) (7,494,990)
------------- -------------
Increase in net assets
from investment activities ....................... -- --
------------- ------------
CAPITAL SHARE TRANSACTIONS (all at $1.00 per share):
Proceeds from shares issued ............................... 156,003,266 178,021,968
Net asset value of shares issued in distributions to
shareholders............................................. 7,009,099 7,046,022
Cost of shares redeemed ................................... (182,250,244) (142,679,502)
------------- -------------
Increase (decrease) in net assets derived from
capital share transactions ..................... (19,237,879) 42,388,488
------------- -------------
Total increase (decrease) in net assets .......... (19,237,879) 42,388,488
------------- -------------
NET ASSETS, at the beginning of the period .................... 160,187,297 117,798,809
------------- -------------
NET ASSETS, at the end of the period ......................... $ 140,949,418 $ 160,187,297
------------- -------------
------------- -------------
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
Financial Highlights
(For a share outstanding throughout each year)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------------------------
<C> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................... .048 .052 .052 .050 .055
----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
From net investment income ............... (.048) (.052) (.052) (.050) (.055)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ............. $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
----- ----- ----- ----- -----
TOTAL RETURN ............................... 4.91% 5.26% 5.26% 5.14% 5.64%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions) ....... $140.9 $160.2 $117.8 $119.1 $111.8
Ratio of expenses to average net assets .... .49% .48% .51% .52% .51%
Ratio of net investment income
to average net assets ................. 4.76% 5.18% 5.15% 5.02% 5.50%
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
The Nicholas Money Market Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as an open-end diversified
investment company. The primary objective of the Fund is to achieve as high a
level of current income as is consistent with preserving capital and providing
liquidity. The following is a summary of significant accounting policies
followed by the Fund.
(a) Securities held by the Fund, which are purchased at a discount or premium,
are valued on the basis of amortized cost, done on a straight line method which
is not materially different than the level yield method. Amortized cost
approximates market value and does not take into account unrealized gains or
losses or the impact of fluctuating interest rates. Variable rate instruments
purchased at par are valued at cost which approximates market value.
Investment transactions are generally accounted for on the trade date.
(b) Yield to maturity is calculated at date of purchase for commercial paper.
For variable rate securities, the yield to maturity is calculated based on
current interest rate and payment frequency.
(c) The Fund maintains a dollar-weighted average portfolio maturity of 90 days
or less and purchases investments which have maturities of 397 days or less.
As of December 31, 1999, the Fund's dollar-weighted average portfolio maturity
was 37 days. Days to maturity on variable rate securities are based on the
number of days until the interest reset date or demand feature, whichever is
longer.
(d) It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies, and to distribute
all of its taxable income to its shareholders. Therefore, no federal income
tax or excise tax provision is required.
(e) 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 and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from estimates.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT -
The Fund has an agreement with Nicholas Company, Inc. (with whom certain
officers and directors of the Fund are affiliated) to serve as investment
adviser and manager. Under the terms of the agreement, a monthly fee is paid
to the investment adviser at an annual rate of .30 of 1% of the daily average
net asset value of the Fund. The adviser will reimburse the Fund if total
operating expenses (other than the management fee) incurred by the Fund exceed
.50 of 1% of the average net assets for the year. At December 31, 1999, the
Fund owed Nicholas Company, Inc. $38,574 for advisory services.
<PAGE>
Report of Independent Public Accountants
- -------------------------------------------------------------------------------
To the Shareholders and Board of Directors
of Nicholas Money Market Fund, Inc.:
We have audited the accompanying statement of net assets of NICHOLAS MONEY
MARKET FUND, INC. (a Maryland corporation), as of December 31, 1999, the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for the periods presented. 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 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
Nicholas Money Market Fund, Inc. as of December 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 the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin,
January 21, 2000.
OFFICERS AND DIRECTORS
ALBERT O. NICHOLAS, President and Director
FREDERICK F. HANSEN, Director
JAY H. ROBERTSON, Director
MELVIN L. SCHULTZ, Director
DAVID L. JOHNSON, Executive Vice President
THOMAS J. SAEGER, Executive Vice President and Secretary
JEFFREY T. MAY, Senior Vice President and Treasurer
DAVID O. NICHOLAS, Senior Vice President
LYNN S. NICHOLAS, Vice President
KATHLEEN A. EVANS, Vice President
CANDACE L. LESAK, Vice President
INVESTMENT ADVISER
NICHOLAS COMPANY, INC.
Milwaukee, Wisconsin
414-272-6133 or 800-227-5987
TRANSFER AGENT
FIRSTAR MUTUAL FUND SERVICES, LLC
Milwaukee, Wisconsin
414-276-0535 or 800-544-6547
CUSTODIAN
FIRSTAR INSTITUTIONAL CUSTODY SERVICES
Milwaukee, Wisconsin
AUDITORS
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
COUNSEL
MICHAEL, BEST & FRIEDRICH LLP
Milwaukee, Wisconsin
This report is submitted for the information of shareholders of
the Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
NICHOLAS MONEY MARKET FUND, INC.
700 North Water Street
Milwaukee, Wisconsin 53202
www.nicholasfunds.com
December 31, 1999
