CMA
CMA TAX-EXEMPT FUND
Annual Report
March 31, 1995
MERRILL LYNCH BULL LOGO
Officers and Trustees
Arthur Zeikel--President and Trustee
Ronald W. Forbes--Trustee
Cynthia A. Montgomery--Trustee
Charles C. Reilly--Trustee
Kevin A. Ryan--Trustee
Richard R. West--Trustee
Terry K. Glenn--Executive Vice President
Vincent R. Giordano--Senior Vice President
Donald C. Burke--Vice President
Peter J. Hayes--Vice President
Kenneth A. Jacob--Vice President
Helen Marie Sheehan--Vice President
Gerald M. Richard--Treasurer
Robert Harris--Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 1713
Boston, MA 02101
<PAGE>
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210*
[FN]
*For inquiries regarding your CMA account,
call (800) CMA-INFO [(800) 262-4636].
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance, which will fluctuate. The Fund
seeks to maintain a consistent $1.00 net asset value per share,
although this cannot be assured. An investment in the Fund is
neither insured nor guaranteed by the US Government.
CMA Tax-Exempt Fund
Box 9011
Princeton, NJ 08543-9011
TO OUR SHAREHOLDERS:
For the year ended March 31, 1995, CMA Tax-Exempt Fund paid
shareholders a net annualized yield of 2.76%*. As of March 31, 1995,
the Fund's 7-day yield was 3.51%.
The Environment
During the six months ended March 31, 1995, the perception that the
US economy was overheating and inflationary pressures were
increasing gave way to a more benign economic outlook. With more
signs of slowing growth, investors now appear to be forecasting a
"soft landing" for the US economy. Although gross domestic product
(GDP) was reported to have increased at a revised 5.1% rate during
the final quarter of 1994, declines in other indicators such as new
home sales and durable goods orders registered thus far in 1995 have
led investors to anticipate that the economy is losing enough
momentum to keep inflation under control and preclude further
significant monetary policy tightening by the Federal Reserve Board.
<PAGE>
However, as US stock and bond markets have risen on more positive
economic news, the value of the US dollar reached new lows relative
to the yen and the Deutschemark. Persistent trade deficits and
exports of capital from the United States have kept the US currency
in a decade-long decline relative to the Japanese and German
currencies. Over the longer term, since the United States has the
highest productivity among industrialized nations and among the
lowest labor costs, demand for US dollar-denominated assets may
improve. However, a reduction of the still-widening US trade deficit
may be necessary before the US dollar appreciates substantially
relative to the yen and the Deutschemark.
The first months of 1995 have been very positive for the stock and
bond markets. Continued signs of a moderating expansion and well-
contained inflationary pressures would provide further assurance
that the peak in interest rates is behind us. On the other hand,
indications of reaccelerating growth and further significant
monetary policy tightening by the Federal Reserve Board would be a
decided negative for the US financial markets.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
Investment Outlook & Strategy
Interest rates on short-term securities finished the six-month
period ended March 31, 1995 higher than they were at the outset of
the period, although they experienced a good deal of volatility
during that time. The restrictive monetary policy that the Federal
Reserve Board initiated in February 1994 was maintained in the six-
month period ended March 31, 1995. On November 15, 1994, the Federal
Reserve Board made its most aggressive move of the cycle by hiking
both the Federal Funds rate and the discount rate 75 basis points
(0.75%) to 5.50% and 4.75%, respectively.
The Federal Reserve Board followed this move with a 50 basis point
hike on February 1, 1995, making it the seventh move of the cycle
and doubling the Federal Funds rate to its current level of 6.00%.
The first half of the March period was characterized by rising short-
term interest rates as investors drove rates up in anticipation of
additional Federal Reserve Board actions. However, the larger-than-
expected increase in the Federal Funds rate in November 1994 caused
investors to believe that the Federal Reserve Board would achieve
the elusive soft landing of the US economy, thus setting the stage
for a rally in US financial markets which drove interest rates
sharply lower. For instance, interest rates on six-month US Treasury
bills rose nearly 110 basis points by the beginning of December 1994
from their October 1, 1994 levels only to fall approximately 50
basis points by March 31, 1995 for a net increase of approximately
60 basis points.
<PAGE>
During the six-month period ended March 31, 1995, interest rates on
short-term municipal securities were as volatile as their taxable
counterparts. Interest rates began the period by falling somewhat as
investors began to focus on the lack of issuance in the market while
demand was expected to increase in January 1995 from dividend
reinvestment, bond calls and maturities. New-issue volume in the
short-term municipal market was 16% lower in 1994 than in 1993,
falling to $42.9 billion from $51.2 in 1993. Also, for the March
period, new-issue volume was $2.2 billion lower than the $16.3
billion brought to market in the comparable six-month period last
year. Additionally, assets of the tax-exempt money fund industry,
which is the driving force in the short-term municipal market,
reached their highest level ever at $119 billion by mid-January.
However, this supply and demand imbalance which generally occurs
each January and generally drives interest rates substantially lower
did not take place this year as a result of the substantial
volatility in the US Treasury market. Although yields on short-term
municipal notes rose by 80 basis points--100 basis points by the end
of January, they subsequently began to fall back to levels
consistent with normal market conditions. The net effect for the
period was an increase of only 20 basis points--30 basis points.
During the March period, we maintained the average portfolio
maturity in the 30-day--40-day range as a defensive measure against
further Federal Reserve Board interest rate hikes. A modest increase
in average portfolio maturity is possible if new-issue supply is
limited, as expected. We continue to look for signs that the economy
is slowing and whether a further increase in the average portfolio
maturity may be warranted. As always, credit quality and
diversification remain paramount in importance to the Fund as we
monitor the everchanging marketplace.
We thank you for your continued interest in CMA Tax-Exempt Fund, and
we look forward to serving your investment needs in the months and
years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President and Portfolio Manager
April 28, 1995
<PAGE>
IMPORTANT TAX INFORMATION (UNAUDITED)
All of the net investment income distributions paid daily by CMA Tax-
Exempt Fund during its taxable year ended March 31, 1995 qualify as
tax-exempt interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributed during the
Fund's taxable year ended March 31, 1995.
Please retain this information for your records.
Portfolio Abbreviations for CMA Tax-Exempt Fund
ACES SM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
CP Commercial Paper
DATES Daily Adjustable Tax-Exempt Securities
EDA Economic Development Authority
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
LIBOR London Interbank Offered Rate
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
S/F Single-Family
TAN Tax Anticipation Notes
TRAN Tax Revenue Anticipation Notes
UPDATES Unit Priced Adjustable Tax-Exempt Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Alabama-- $ 25,000 Birmingham, Alabama, Medical Clinic Board Revenue Bonds, VRDN,
0.9% 4.30% due 12/01/2026 (a) $ 25,000
37,900 McIntosh, Alabama, IDB (Ciba-Geigy Corporation Project), VRDN,
4.25% due 7/01/2004 (a) 37,900
7,600 McIntosh, Alabama, IDB, PCR (Ciba-Geigy Corporation Project), VRDN,
Series A, 4.10% due 12/01/2003 (a) 7,600
2,200 Mobile, Alabama, IDB, Solid Waste Disposal Revenue Bonds (Scott
Paper Company), VRDN, Series E, 4.15% due 12/01/2019 (a) 2,200
Alaska-- Alaska Housing Finance Corporation Revenue Bonds, VRDN (a):
3.3% 80,000 Series A, 4.25% due 12/01/2024 80,000
35,000 Series C, 4.15% due 6/01/2026 35,000
10,650 Alaska Industrial Development and Export Authority Revenue Bonds
(Pacific Corp. Project), VRDN, 4.25% due 12/01/1995 (a) 10,650
Valdez, Alaska, Marine Terminal Revenue Refunding Bonds (Exxon
Pipeline Co. Project):
60,000 CP, Series B, 4.50% due 5/15/1995 60,028
8,275 Series C, 4.15% due 4/06/1995 8,275
19,000 VRDN, Series A, 3.90% due 5/15/1995 (a) 19,000
30,000 VRDN, Series A, 4.10% due 5/15/1995 (a) 30,000
Arizona-- 26,300 Apache County, Arizona, IDA (Tucson Electric Power Co.), VRDN,
2.8% Series B, 4.25% due 12/15/2018 (a) 26,300
10,200 Arizona Educational Loan Marketing Revenue Bonds, VRDN, AMT,
Series A, 4.15% due 3/01/2015 (a) 10,200
8,000 Coconino County, Arizona, Revenue Bonds (Arizona Public Service
Co.--Navajo Project), VRDN, Series A, 4.55% due 10/01/2029 (a) 8,000
5,300 Maricopa County, Arizona, IDA, Hospital Facilities Revenue Bonds
(Samaritan Health Service Hospital), VRDN, Series B2, 4.20%
due 12/01/2008 (a) 5,300
1,100 Maricopa County, Arizona, IDA, PCR (Motorola Inc. Project), VRDN,
4.15% due 10/01/1995 (a) 1,100
Maricopa County, Arizona, PCR, Refunding (Arizona Public
Service Co.), VRDN (a):
35,600 Series A, 4.25% due 5/01/2029 35,600
18,000 Series C, 4.25% due 5/01/2029 18,000
13,200 Series F, 4.25% due 5/01/2029 13,200
54,950 Maricopa County, Arizona, TAN, GO, 5% due 7/28/1995 55,070
Phoenix, Arizona, GO, VRDN (a):
6,700 Series 1, 4.25% due 6/01/2018 6,700
7,800 Series 2, 4.25% due 6/01/2018 7,800
20,750 Salt River Project, Arizona, Agricultural Improvement and Power
District, CP, 3.85% due 5/11/1995 20,750
Arkansas-- 3,800 Arkansas State Student Loan Authority Revenue Bonds, VRDN, AMT,
0.4% Series B-4, 4.05% due 6/01/2013 (a) 3,800
19,000 Little River County, Arkansas, Solid Waste Disposal Revenue Bonds
(Nekoosa Paper Project), VRDN, AMT, 4.275% due 2/01/2025 (a) 19,000
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
California-- $ 3,620 California HFA, Home Mortgage Revenue Bonds, AMT, Series II,
10.2% 4.30% due 5/01/1995 $ 3,620
California Higher Education Loan Authority, Inc., Student Loan
Revenue Bonds, AMT, Series C:
65,375 3.85% due 6/01/1995 65,375
21,000 4% due 7/01/1995 21,000
California Higher Education Loan Authority, Inc., Student Loan
Revenue Refunding Bonds:
25,000 Senior Lien, Series A-1, 3.90% due 7/01/1995 25,000
5,000 Senior Lien, Series A-2, 3.60% due 5/01/1995 5,000
33,650 Series A, 3.60% due 5/01/1995 33,650
33,000 VRDN, AMT, Series E-1, 4.20% due 12/01/2022 (a) 33,000
California Pollution Control Financing Authority, PCR, Refunding
(Pacific Gas & Electric Co.), AMT:
21,800 Series A, 4.15% due 4/07/1995 21,800
23,100 Series B, 3.75% due 4/04/1995 23,100
4,600 California Pollution Control Financing Authority, Solid Waste
Disposal Revenue Bonds (Shell Oil Co. Project), VRDN, AMT, Series A,
4.45% due 10/01/2024 (a) 4,600
50,000 California Public Capital Improvements Financing Authority Revenue
Bonds, Series D, 4.30% due 6/15/1995 50,000
California State RAN:
70,000 Series A, 5% due 6/28/1995 70,134
120,000 Series C, 5.75% due 4/25/1996 121,035
10,000 Chula Vista, California, IDR (San Diego Gas & Electric Co.), CP, AMT,
Series D, 3.95% due 5/08/1995 10,000
17,800 Eastern Municipal Water District, California, Water and Sewer Revenue
Refunding Bonds, VRDN, COP, Series B, 4% due 7/01/2020 (a) 17,800
114,714 FB California Floating Rate Trust Certificates, VRDN, Series 9,
4.35% due 4/25/1996 (a) 114,714
23,000 Kern County, California, TRAN, 4.25% due 7/14/1995 (c) 23,033
30,975 Los Angeles County, California, TRAN, 4.50% due 6/30/1995 30,994
12,600 Riverside County, California, TRAN, 4.25% due 6/30/1995 (c) 12,620
54,750 San Diego County, California, TAN, Series A, 4.25% due 6/30/1995 (c) 54,833
10,000 Santa Clara County, California, TRAN, 4.25% due 7/07/1995 (c) 10,012
<PAGE>
Colorado-- Arapahoe County, Colorado, Capital Improvement Trust Fund, Highway
4.1% Revenue Bonds (E-470 Project):
62,155 Series H, 4.45% due 8/31/1995 62,155
60,645 Series I, 4.45% due 8/31/1995 60,645
27,340 Series J, 4.45% due 8/31/1995 27,340
56,700 Series K, 4.45% due 8/31/1995 56,700
6,660 Series L, 4.45% due 8/31/1995 6,660
9,345 Series M, 4.45% due 8/31/1995 9,345
6,900 Colorado Health Facilities Authority Revenue Bonds (North Colorado
Medical Center), 4% due 5/15/2020 6,900
Denver, Colorado, City and County Airport Revenue Bonds, AMT:
7,520 CP, Sub-Series B, 4.45% due 4/05/1995 7,520
11,000 CP, Sub-Series C, 4.45% due 4/05/1995 11,000
15,000 CP, Sub-Series C, 4.45% due 4/07/1995 15,000
10,500 VRDN, Series F, 4.45% due 11/15/2025 (a) 10,500
11,500 VRDN, Series G, 4.45% due 11/15/2025 (a) 11,500
4,755 Moffat County, Colorado, PCR, Refunding (Pacific Corporation
Project), VRDN, 4.20% due 5/01/2013 (a) 4,755
3,800 Pitkin County, Colorado, IDR, Refunding (Aspen Skiing Co. Project),
VRDN, Series A, 4.35% due 4/01/2016 (a) 3,800
8,000 Westminster, Colorado, IDR, Refunding (Ball Corp. Project), VRDN,
4.15% due 6/01/2005 (a) 8,000
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Connecticut-- $ 15,000 Connecticut State Economic Recovery Notes, Series A,
2.3% 5.40% due 12/15/1995 $ 15,087
Connecticut State HFA (Mortgage Finance Project):
35,155 Series D, Sub-Series D-1, 3.55% due 5/15/1995 35,155
1,365 Series G, Sub-Series G-1, 3.55% due 5/15/1995 1,365
104,000 Connecticut State Special Assessment Unemployment Compensation,
Advanced Fund Revenue Bonds, Series C, 3.85% due 7/01/1995 104,000
1,800 Connecticut State Special Tax Obligation Revenue Bonds (Transportation
Infrastructure), Second Lien, VRDN, Series 1, 4.35% due 12/01/2010 (a) 1,800
16,200 Eagle Tax Exempt Trust, Connecticut, VRDN, 4.35% due 8/15/2012 (a) 16,200
Delaware-- Delaware State, EDA, Revenue Bonds (Delmarva Power & Light Co.
0.1% Project), VRDN, AMT (a):
4,400 4.50% due 10/01/2017 4,400
2,100 Series A, 4.50% due 10/01/2017 2,100
<PAGE>
District of District of Columbia, General Fund Recovery Bonds, VRDN (a):
Columbia-- 7,000 Series B-2, 4.80% due 6/01/2003 7,000
1.0% 2,300 Series B-3, 4.80% due 6/01/2003 2,300
17,800 District of Columbia, Hospital Revenue Bonds (Providence Hospital--
Daughters of Charity), VRDN, Series 89A, 4.25% due 12/01/2019 (a) 17,800
2,900 District of Columbia, Refunding Bonds, VRDN, Series A-2,
4.55% due 10/01/2007 (a) 2,900
District of Columbia, Revenue Bonds:
12,500 (George Washington University), VRDN, Series A, 4.20%
due 3/01/2006 (a) 12,500
6,500 (Student Loan), 4.05% due 7/01/1995 6,500
26,700 Eagle Tax Exempt Trust, District of Columbia, VRDN, Series 1994-A,
4.35% due 6/01/2005 (a) 26,700
Florida-- 3,400 Broward County, Florida, HFA, M/F Housing Revenue Bonds (Margate
2.5% Investments Projects), VRDN, 4% due 11/01/2005 (a) 3,400
37,425 Dade County, Florida, Aviation Revenue Refunding Bonds, VRDN,
Series V, 4.25% due 10/01/2007 (a) 37,425
11,700 Dade County, Florida, IDA, Exempt Facilities Revenue Refunding Bonds
(Florida Power & Lighting Co.), VRDN, 4.40% due 6/01/2021 (a) 11,700
Dade County, Florida, Solid Waste Authority, IDR (Montenay-Dade
Limited Project), VRDN (a):
15,590 AMT, 4.40% due 12/01/2010 15,590
900 Series A, 4.40% due 12/01/2013 900
8,500 Dade County, Florida, Special Obligation Capital Asset Acquisition
Revenue Bonds, 4.30% due 10/01/2010 8,500
First Municipal Loan Council, Florida, Revenue Bonds (Florida League--
Project 2), ACES, CP:
9,000 3.85% due 5/11/1995 9,000
10,000 3.85% due 5/12/1995 10,000
8,000 Floating Rate Trust Certificate, Florida, VRDN, Series
1992-D, 4.35% due 7/01/1995 (a) 8,000
Hillsborough County, Florida, IDA, PCR, Refunding (Tampa Electric
Company Project), VRDN (a):
5,000 4.25% due 5/15/2018 5,000
400 4.20% due 9/01/2025 400
3,100 Manatee County, Florida, PCR, Refunding (Florida Power & Lighting Co.
Project), VRDN, 4.25% due 9/01/2024 (a) 3,100
7,000 Martin County, Florida, PCR, Refunding (Florida Power & Lighting Co.
Project), VRDN, 4.25% due 9/01/2024 (a) 7,000
900 Pinellas County, Florida, Health Facilities Authority, Revenue Refunding
Bonds(Pooled Hospital Loan Program), DATES, 4.25% due 12/01/2015 (a) 900
Saint Lucie County, Florida, PCR, Refunding (Florida Power & Lighting Co.
Project):
10,000 CP, 4% due 4/26/1995 10,000
21,500 CP, Series A, 4.20% due 4/04/1995 21,500
31,000 VRDN, 4.25% due 1/01/2026 (a) 31,000
6,860 Volusia County, Florida, Health Facilities Authority Revenue Bonds
(Pooled Hospital Loan Program), VRDN, 4.25% due 11/01/2015 (a) 6,860
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Georgia-- Burke County, Georgia, Development Authority, PCR (Georgia Power
1.6% Company--Plant Vogtle Project), VRDN (a):
$ 4,300 3rd Series, 4.40% due 7/01/2024 $ 4,300
4,500 4th Series, 4.30% due 7/01/2024 4,500
9,648 Georgia Municipal Association, Pooled Bonds, COP, VRDN, 4.125%
due 12/15/2020 (a) 9,648
10,800 Georgia Municipal Gas Authority, Gas Revenue Bonds (Southern Portfolio
I Project), CP, Series D, 4.25% due 5/19/1995 10,800
12,505 Georgia State Residential Finance Authority, Home Ownership Mortgage
Revenue Bonds, Series A, 4.40% due 6/01/1995 12,505
5,855 Georgia State Residential Finance Authority, S/F Industrial Mortgage
Revenue Bonds, Series A, 4.40% due 6/01/1995 5,855
14,320 Municipal Electric Authority, Georgia, General Resolution Revenue Bonds,
Series B, 3.85% due 6/01/1995 14,320
4,000 Municipal Electric Authority, Georgia, Money Market Municipal Bonds
(Project 1), CP, Series B, 3.90% due 5/08/1995 4,000
Municipal Electric Authority, Georgia (Project One), CP:
10,700 Sub-Series D, 4.15% due 4/10/1995 10,700
7,800 Sub-Series D, 4.25% due 4/25/1995 7,800
25,000 Sub-Series E, 4.15% due 4/10/1995 25,000
Idaho--0.1% 7,500 Custer County, Idaho, PCR (Amoco Project), 4.20% due 10/01/1995 7,500
Illinois-- Chicago, Illinois, O'Hare International Airport Revenue Bonds (a):
9.6% 7,100 (American Airlines), DATES, Series C, 4.35% due 12/01/2017 7,100
5,700 (American Airlines), DATES, Series D, 4.35% due 12/01/2017 5,700
35,300 (General Airport Second Lien), VRDN, AMT, Series A,
4.35% due 1/01/2018 35,300
20,700 (General Airport Second Lien), VRDN, Series C, 4.10%
due 1/01/2018 20,700
14,800 Chicago, Illinois, O'Hare International Airport, Special Facilities
Revenue Bonds(Compagnie Nationale, Air France), VRDN, 4.40%
due 5/01/2018 (a) 14,800
5,720 Chicago, Illinois, School Financing Authority, Refunding
(School Assistance), 8.70% due 6/01/1995 (b) 5,878
Chicago, Illinois, Tender Notes:
21,250 Series A-2, 4.15% due 7/19/1995 21,250
28,000 Series C, 4.15% due 5/04/1995 28,000
35,000 Series C-1, 4.15% due 5/04/1995 35,000
15,640 VRDN, 4.10% due 1/01/2010 (a) 15,640
<PAGE> 63,400 VRDN, Series B, 4.05% due 10/31/1995 (a) 63,400
23,600 VRDN, Series B, 4.10% due 1/01/2012 (a) 23,600
Illinois Development Finance Authority, VRDN (a):
12,700 PCR (Diamond Star Motors Project), 4.30% due 12/01/2008 12,700
3,800 PCR (Illinois Power Co.), AMT, Series C, 4.25% due 3/01/2017 3,800
36,200 PCR, Refunding (Commonwealth Edison Company Project), Series B,
4.10% due 10/15/2014 36,200
22,100 Revenue Bonds (Lyric Opera Chicago Project), 4.15% due 12/01/2028 22,100
8,860 Revenue Bonds (Residential Rental-River Oaks Project), AMT,
4.30% due 12/15/2019 8,860
Illinois Educational Facilities Authority Revenue Bonds, VRDN (a):
16,300 (Art Institute of Chicago), 4.25% due 3/01/2027 16,300
5,200 (Chicago Historical Society), 4.15% due 12/01/2025 5,200
7,500 (Cultural Pooled Financing Program), 4.20% due 12/01/2025 7,500
15,200 (Illinois Institute of Technology), Series A, 4.15% due 9/01/2025 15,200
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Illinois Illinois Health Facilities Authority Revenue Bonds:
(concluded) $ 31,100 (Evangelical Hospital Corporation), VRDN, Series A, 4.05% due
1/01/2010 (a) $ 31,100
15,000 (Highland Park Hospital), VRDN, Series B, 3.75% due 6/01/1995 (a) 15,000
8,700 (Hospital Sisters Services, Inc.), UPDATES, Series E, 4% due
12/01/2014 (a) 8,700
20,000 (Lutheran Institute), VRDN, Series C, 3.85% due 4/01/2015 (a) 20,000
6,200 (Resurrection Health Care System), VRDN, 4.35% due 5/01/2011 (a) 6,200
7,000 (Revolving Fund, Pooled Financing Program), VRDN, Series F, 4.10%
due 8/01/2015 (a) 7,000
Illinois Health Facilities Authority Revenue Bonds (Evanston
Hospital Corporation Project):
35,000 CP, 4.10% due 4/27/1995 35,000
25,000 CP, 4.20% due 8/15/1995 25,000
30,000 Series A, 4.25% due 5/31/1995 30,000
10,000 Series A, 4.80% due 11/30/1995 10,000
10,000 Series B, 4.80% due 11/30/1995 10,000
10,000 Series C, 4.80% due 11/30/1995 10,000
10,000 Series D, 4.80% due 11/30/1995 10,000
2,600 Series E, 4.80% due 11/30/1995 2,600
33,000 UPDATES, Series B, 4.65% due 2/15/1996 (a) 33,000
Illinois State Toll Highway Authority Revenue Bonds (Toll
Highway Priority):
12,750 7.375% due 1/01/1996 (b) 13,265
<PAGE> 31,200 Refunding, VRDN, Series B, 4.25% due 1/01/2010 (a) 31,200
Indiana-- Fort Wayne, Indiana, Hospital Authority Revenue Bonds (Parkview
2.9% Memorial Hospital), VRDN (a):
1,645 Series B, 4.25% due 1/01/2016 1,645
2,700 Series B, 4.25% due 1/01/2020 2,700
3,505 Series C, 4.25% due 1/01/2016 3,505
5,670 Series D, 4.25% due 1/01/2016 5,670
30,000 Indiana Bond Bank, Floating Notes (Advance Funding Program),
Series A-3, 4.165% due 1/10/1996 30,000
Indiana Health Facilities Financing Authority, Hospital Revenue
Bonds, VRDN (a):
5,400 (Daughters of Charity National Health System), Series A, 4.25%
due 11/01/2022 5,400
1,700 (Daughters of Charity National Health System), Series B, 4.25%
due 11/01/2022 1,700
7,900 (Methodist Hospital of Indiana, Inc.), Series B, 4.25%
due 9/01/2022 7,900
34,200 (Methodist Hospital of Indiana, Inc.), Series C, 4.25%
due 9/01/2022 34,200
Indiana Secondary Market Educational Loans Incorporated, Student
Loan Revenue Bonds, VRDN, AMT, Series B (a):
26,900 4.20% due 12/01/2013 26,900
22,500 4.20% due 12/01/2014 22,500
14,900 Jasper County, Indiana, PCR, Refunding (Northern Indiana Public
Service Co.), VRDN, Series C, 4.20% due 4/01/2019 (a) 14,900
47,065 Marion County, Indiana, Hospital Authority, Hospital Facility Revenue
Bonds (Saint Vincent's Hospital and Healthcare Center--Daughters
of Charity), 4.25% due 11/01/2013 47,065
5,000 Purdue University, Indiana, University Revenue Bonds, VRDN, Series K,
4.05% due 7/01/2020 (a) 5,000
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Iowa-- $ 5,000 Chillicothe, Iowa, PCR, Refunding (Iowa-Illinois Gas & Electric
0.7% Project), VRDN, 4.15% due 1/01/2023 (a) $ 5,000
Iowa Finance Authority, Solid Waste Disposal Revenue Bonds
(Cedar River Paper Company Project), VRDN, Series A (a):
11,600 4.50% due 7/01/2023 11,600
6,800 AMT, 4.50% due 6/01/2024 6,800
4,100 Iowa Higher Education Loan Authority Revenue Bonds (Private College
Facilities), VRDN, 4.30% due 12/01/2015 (a) 4,100
14,500 Iowa Student Loan Liquidity Corporation, Student Loan Revenue Bonds,
VRDN, AMT, Series B, 4.20% due 12/01/2013 (a) 14,500
<PAGE>
Kansas-- 3,000 Kansas State, Department of Transportation, Highway Revenue Bonds,
1.2% VRDN, Series B, 4.10% due 9/01/2014 (a) 3,000
Wichita, Kansas, Hospital Revenue Bonds (CSJ Health Systems), VRDN (a):
1,600 4.25% due l0/01/2002 1,600
15,300 4.25% due 10/01/2008 15,300
70,000 Wichita, Kansas, Temporary Notes (Renewal and Improvement Project),
GO, UT, Series 185, 5.25% due 8/31/1995 70,165
Kentucky-- 5,100 Ashland, Kentucky, PCR (Merck & Co./Calgon Carbon Project), VRDN,
0.6% 4.375% due 10/01/2006 (a) 5,100
8,000 Carroll County, Kentucky, Solid Waste Disposal Facilities Revenue Bonds
(Kentucky Utilities Co. Project), VRDN, AMT, Series A, 4.50%
due 11/01/2024 (a) 8,000
Davies County, Kentucky, Solid Waste Disposal Facilities Revenue
Bonds (Scott Paper Co. Project), VRDN, AMT (a):
7,200 Series A, 4.50% due 12/01/2023 7,200
14,500 Series B, 4.55% due 12/01/2023 14,500
4,500 Series B, 4.55% due 5/01/2024 4,500
Louisiana-- 8,800 Eagle Tax Exempt Trust, Louisiana, VRDN, Series 94, Class 3803, 4.35%
2.8% due 5/01/2008 (a) 8,800
5,200 Louisiana Public Facilities Authority, Hospital Revenue Bonds
(Hospital Equipment Financing and Refunding Program), VRDN, Series A,
4.45% due 12/01/2005 (a) 5,200
Louisiana State Offshore Terminal Authority, Deepwater Port Revenue
Refunding Bonds (Loop Inc.), VRDN (a):
6,500 4.30% due 9/01/2006 6,500
12,485 Series A, 4.20% due 9/01/2008 12,485
9,300 New Orleans, Louisiana, Exhibition Hall Authority Revenue Bonds
(Hotel Occupancy Tax), VRDN, Series B, 4.25% due 7/01/2018 (a) 9,300
4,320 New Orleans, Louisiana, Levee District, Levee Improvement Revenue
Bonds, VRDN, 4.20% due 11/01/2014 (a) 4,320
Saint Charles Parish, Louisiana, PCR, VRDN (a):
17,100 (Shell Oil Company--Norco Project), AMT, 4.50% due 11/01/2021 17,100
4,400 (Shell Oil Company Project), 3.85% due 6/01/2005 4,400
13,600 (Shell Oil Company Project), AMT, Series A, 4.50% due 10/01/2022 13,600
Saint James Parish, Louisiana, PCR, Refunding (Texaco Project), CP:
75,000 Series A, 3.80% due 5/09/1995 75,000
46,030 Series B, 3.80% due 5/09/1995 46,030
Maine-- 15,635 Jay, Maine, Solid Waste Disposal Revenue Bonds (International
0.4% Paper), AMT, Series A, 3.95% due 6/01/1995 15,635
Maine Health and Higher Educational Facilities Authority Revenue
Bonds (VHA New England Inc.), VRDN (a):
1,250 Series B, 4.10% due 12/01/2025 1,250
1,450 Series F, 4.10% due 12/01/2025 1,450
18,000 Maine State, TAN, 4.50% due 6/30/1995 18,035
Maryland-- Maryland State Health and Higher Educational Facilities Authority
0.5% Revenue Bonds, VRDN (a):
12,300 (Pooled Loan Program), Series A, 4.15% due 4/01/2035 12,300
25,000 (Saint Agnes Hospital--Daughters of Charity), 4.25% due 7/01/2013 25,000
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Massachusetts-- $ 32,131 Clipper Tax Exempt Trust, Massachusetts, VRDN, Class A,
2.6% 4.17% due 10/17/2002 (a) $ 32,131
Eagle Tax Exempt Trust, Massachusetts, VRDN (a):
25,000 4.35% due 10/01/2007 25,000
20,900 Series J, 4.35% due 8/01/2005 20,900
64,100 Massachusetts Bay Transportation Authority Notes, Series B,
5% due 9/08/1995 64,313
14,600 Massachusetts State, Health and Educational Facilities Authority
Revenue Bonds(Boston University), CP, Series H, Sub-Series 2,
3.90% due 4/07/1995 14,600
33,210 Massachusetts State HFA, S/F Housing, Convertible Option Revenue
Bonds, Series 35, 3.75% due 6/01/1995 33,210
2,000 Massachusetts State, Municipal Wholesale Electric Company, Power
Supply System Revenue Bonds, VRDN, Series C, 4% due 7/01/2019 (a) 2,000
1,400 Massachusetts State, UPDATES, Series E, 4.35% due 12/01/1997 (a) 1,400
Michigan-- 6,500 Delta County, Michigan, Economic Development Corporation, Environmental
1.8% Improvement Revenue Bonds (Mead Escambia Paper), VRDN, Series D, 4.30%
due 12/01/2023 (a) 6,500
17,700 Eagle Tax Exempt Trust, Michigan, VRDN, Series 1994, Class 2201, 4.15%
due 6/01/2021 (a) 17,700
1,000 Grand Rapids, Michigan, Water Supply System, Revenue Refunding Bonds,
VRDN, 4.30% due 1/01/2020 (a) 1,000
100 Kent Hospital Finance Authority, Michigan, Hospital Facilities
Revenue Bonds(Butterworth Hospital), VRDN, Series A, 4.25% due
1/15/2020 (a) 100
Michigan Municipal Bond Authority Revenue Notes:
21,000 Series A, 4.25% due 5/05/1995 21,015
24,250 Series B, 4.75% due 7/20/1995 24,303
30,000 Michigan State Building Authority Revenue Bonds, CP, Series 1,
4.10% due 4/27/1995 30,001
Michigan State Hospital Finance Authority Revenue Bonds, VRDN (a):
4,300 (Providence Hospital--Daughters of Charity Systems, Incorporated),
4.25% due 11/01/2014 4,300
14,000 (Saint Mary's Hospital--Daughters of Charity Systems, Incorporated),
4.25% due 11/01/2013 14,000
5,000 Michigan State Strategic Fund, Limited Obligation Revenue Refunding
Bonds(Consumers Power Company Project), VRDN, Series A, 4.25%
due 6/15/2010 (a) 5,000
1,000 Michigan State Strategic Fund, Solid Waste Disposal Revenue Bonds
(Grayling Generating Project), VRDN, AMT, 4.25% due 1/01/2014 (a) 1,000
9,800 University of Michigan, University Revenue Refunding Bonds, VRDN,
Series A, 4.20% due 12/01/2019 (a) 9,800
<PAGE>
Minnesota-- Eagle Tax Exempt Trust, Minnesota, VRDN (a):
1.0% 14,500 Series 1994-C-5, 4.35% due 2/01/2015 14,500
45,000 Series A, 4.35% due 8/01/2006 45,000
13,700 Minneapolis, Minnesota, Community Development Agency Revenue Bonds
(Riverplace Project--Pinnacle Apartments), VRDN, 4.25% due
2/01/2012 (a) 13,700
Mississippi-- 10,000 Harrison County, Mississippi, PCR, Refunding (E.I. du Pont de
0.6% Nemours & Co.), VRDN, 4.20% due 9/01/2010 (a) 10,000
12,100 Jackson County, Mississippi, PCR, Refunding (Chevron USA, Inc.
Project), VRDN, 4.10% due 12/01/2016 (a) 12,100
600 Jackson County, Mississippi, Port Facility Revenue Refunding Bonds
(Chevron USA, Inc. Project), VRDN, 4.35% due 6/01/2023 (a) 600
3,000 Mississippi Hospital Equipment and Facilities Authority Revenue Bonds
(Mississippi Baptist Medical Center), VRDN, Series B, 4.10% due
7/01/2012 (a) 3,000
19,800 Perry County, Mississippi, PCR, Refunding (Leaf River Forest
Project), VRDN, 4.15% due 3/01/2002 (a) 19,800
Missouri-- 30,000 Eagle Tax Exempt Trust, Missouri, VRDN, Series 1993-E,
2.0% 4.35% due 8/01/2006 (a) 30,000
Missouri Higher Education Loan Authority, Student Loan Revenue
Bonds, VRDN, AMT (a):
7,800 Series A, 4.15% due 6/01/2017 7,800
11,700 Series B, 4.15% due 6/01/2020 11,700
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Missouri Missouri State Health and Educational Facilities Authority, Health
(concluded) Facilities Revenue Bonds (Sisters of Mercy Health System), VRDN (a):
$ 5,000 Series A, 4% due 6/01/2019 $ 5,000
15,500 Series C, 4% due 6/01/2019 15,500
6,200 Series D, 4% due 6/01/2019 6,200
Missouri State Health and Educational Facilities Authority Revenue
Bonds (Washington University Project), VRDN (a):
1,300 Series A, 4.15% due 9/01/2010 1,300
16,830 Series A, 4.30% due 3/01/2017 16,830
19,200 Series B, 4.30% due 3/01/2017 19,200
28,700 Saint Louis County, Missouri, IDA, Hospital Revenue Bonds (DePaul
Hospital--Daughters of Charity), VRDN, 4.25% due 11/01/2014 (a) 28,700
<PAGE>
Nebraska-- Nebraska Higher Education Loan Program, Multiple Mode Student Loan
1.5% Revenue Bonds, VRDN (a):
12,800 Series A, 4.10% due 12/01/2015 12,800
13,600 Series B, 4.10% due 12/01/2015 13,600
3,100 Series C, 4.10% due 12/01/2015 3,100
17,600 Series D, 4.10% due 12/01/2015 17,600
27,800 Series N, 4.10% due 12/01/2015 27,800
Nebraska Higher Education Loan Program, Student Loan Revenue Bonds,
VRDN, AMT (a):
3,550 Series A, 4.20% due 12/01/2016 3,550
30,150 Series C, 4.20% due 8/01/2018 30,150
New Hampshire-- 1,400 New Hampshire Higher Educational and Health Facilities Authority Revenue
0.8% Bonds (VHA New England Inc.), VRDN, Series D, 4.10% due 12/01/2025 (a) 1,400
New Hampshire State, Business Finance Authority, PCR:
20,750 (New England Power Co. Project), CP, Series B, 4.15% due 4/20/1995 20,750
38,400 Refunding (Public Service Co.), VRDN, Series E, 4.20%
due 5/01/2021 (a) 38,400
New Jersey-- 9,400 New Jersey Sports and Exposition Authority, State Contract Revenue
1.1% Bonds, VRDN, Series C, 4% due 9/01/2024 (a) 9,400
New Jersey State, CP:
21,300 3.75% due 5/09/1995 21,300
24,500 Series 94, 3.70% due 5/04/1995 24,500
10,600 Series D, 3.80% due 5/12/1995 10,600
23,000 New Jersey State, Transportation Trust Fund Authority, CP, 3.75%
due 5/05/1995 23,000
1,200 Port Authority of New York and New Jersey, Special Obligation Revenue
Bonds(Versatile Structure Obligation), VRDN, Series 1, 4.40% due
8/01/2028 (a) 1,200
New Mexico-- Farmington, New Mexico, PCR (Arizona Public Service Co.), VRDN (a):
1.3% 5,800 AMT, Series C, 4.50% due 9/01/2024 5,800
44,900 Refunding, Series A, 4.20% due 5/01/2024 44,900
18,750 Refunding, Series B, 4.30% due 9/01/2024 18,750
16,000 Hurley, New Mexico, PCR (Kennecott Santa Fe), VRDN, 4.35% due
12/01/2015 (a) 16,000
4,900 New Mexico Educational Assistance Foundation, Student Loan Revenue
Bonds, VRDN, AMT, Series B, 4.30% due 4/01/2005 (a) 4,900
2,480 New Mexico State Hospital Equipment Loan Council, Hospital Equipment
and Improvement Revenue Bonds (Health Facilities), VRDN, 4.25%
due 5/01/2009 (a) 2,480
New York-- 15,000 Nassau County, New York, RAN, 4% due 4/14/1995 15,002
3.7% New York City, New York, CP:
34,100 4.15% due 5/08/1995 34,100
25,000 4.15% due 5/09/1995 25,000
19,300 4.15% due 5/10/1995 19,300
62,000 New York City, New York, Floating Rate LIBOR Notes, VRDN,
4.063% due 6/30/1995 (a) 62,000
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
New York New York City, New York, GO, VRDN (a):
(concluded) $ 7,400 Refunding, Series D, 4.35% due 8/01/1995 $ 7,400
20,000 Series B, Sub-Series B-7, 4.25% due 8/15/2018 20,000
8,400 Series D, 4.30% due 2/01/2021 8,400
1,300 Sub-Series A-5, 4.35% due 8/01/2016 1,300
3,000 Sub-Series A-7, 4.30% due 8/01/2019 3,000
10,300 Sub-Series A-10, 4.35% due 8/01/2016 10,300
200 New York City, New York, IDA, IDR (Japan Airlines Company Ltd.
Project), VRDN, AMT, 4.20% due 11/01/2015 (a) 200
10,000 New York City, New York, Municipal Water Finance Authority, Water
and Sewer System Revenue Bonds, CP, 4% due 5/17/1995 10,000
14,525 New York City, New York, RAN, Series B, 4.75% due 6/30/1995 14,534
5,900 New York State Dormitory Authority Revenue Bonds (Cornell
University), VRDN, Series B, 4.20% due 7/01/2025 (a) 5,900
New York State Energy Research and Development Authority, PCR, VRDN (a):
160 (Niagara Mohawk Corporation Project), Series A, 4.25% due 3/01/2027 160
22,500 (Niagara Power Corporation Project), AMT, Series B, 4.40% due 7/01/2027 22,500
9,300 New York State Local Government Assistance Corporation Revenue Bonds,
VRDN, Series B, 3.85% due 4/01/2023 (a) 9,300
15,800 Triborough Bridge and Tunnel Authority, New York, Special Obligation
Revenue Bonds, VRDN, 3.80% due 1/01/2024 (a) 15,800
North Carolina-- Craven County, North Carolina, Industrial Facilities and Pollution
2.4% Control Financing Authority Revenue Bonds (Cravenwood Energy
Project), VRDN, AMT (a):
6,300 Series B, 4.30% due 5/01/2011 6,300
16,000 Series C, 4.30% due 5/01/2011 16,000
2,600 Halifax County, North Carolina, Industrial Facilities and Pollution
Control Financing Authority Revenue Bonds (Westmoreland Project),
VRDN, 4.35% due 12/01/2019 (a) 2,600
9,995 North Carolina Eastern Municipal Power Agency, Power System Revenue
Bonds (Putters), VRDN, Series 5, 4.50% due 1/01/2018 (a) 9,995
North Carolina Educational Facilities Finance Agency Revenue
Bonds, VRDN (a):
23,950 (Bowman Grey School of Medicine Project), 4.10% due 9/01/2020 23,950
20,240 (Duke University Project), Series A, 4.075% due 6/01/2027 20,240
15,000 (Duke University Project), Series B, 4.075% due 12/01/2021 15,000
North Carolina Medical Care Commission, Hospital Revenue
Bonds, VRDN (a):
5,700 (Carol Woods Project), 4.30% due 4/01/2021 5,700
<PAGE> 1,700 (Duke University Hospital), Series B, 4.075% due 6/01/2015 1,700
2,000 (Duke University Hospital Project), Series C, 4.075%
due 6/01/2015 2,000
18,500 (North Carolina Baptist Hospital Project), Series B,
4.10% due 6/01/2022 18,500
17,600 (Pooled Equipment Financing Project), 4.20% due 12/01/2025 17,600
9,000 (Pooled Financing Project), 4.20% due 4/01/2012 9,000
5,500 (Pooled Financing Project), Series B, 4.30% due 10/01/2013 5,500
9,000 Refunding (Moses H. Cone Memorial Hospital Project),
4.10% due 10/01/2023 9,000
9,300 Person County, North Carolina, Industrial Facilities and Pollution
Control Financing Authority, Solid Waste Disposal Revenue Bonds
(Carolina Power and Light Company), DATES, 4.40% due 11/01/2016 (a) 9,300
17,000 Wake County, North Carolina, Industrial Facilities and Pollution
Control Financing Authority Revenue Bonds (Carolina Power and Light
Company Project), DATES, 4.45% due 3/01/2017 (a) 17,000
Ohio-- 2,200 Cuyahoga County, Ohio, Hospital Revenue Improvement Bonds (Cleveland
0.1% University Hospital), VRDN, 4.25% due 1/01/2016 (a) 2,200
1,100 Franklin County, Ohio, Health System Revenue Bonds (Franciscan Sister--
Saint Anthony Medical Center), VRDN, Series B, 4.25% due 7/01/2015 (a) 1,100
1,865 Ohio HFA, M/F Housing Revenue Bonds (Kenwood Congregate Retirement
Program), VRDN, 4% due 12/01/2015 (a) 1,865
3,000 Scioto County, Ohio, Hospital Facilities Revenue Bonds (VHA Central Inc.
Capital Asset), VRDN, Series C, 4% due 12/01/2025 (a) 3,000
6,100 Scioto County, Ohio, Marine Terminal Facility, Revenue Refunding Bonds
(Norfolk Southern Corporation Project), VRDN, 4.15% due 8/15/2013 (a) 6,100
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Oklahoma-- $ 12,400 Muskogee, Oklahoma, Industrial Trust, PCR, Refunding (Oklahoma Gas and
0.5% Electric Co.), VRDN, Series A, 4.20% due 1/01/2025 (a) $ 12,400
10,200 Oklahoma City, Oklahoma, Industrial and Cultural Facilities Revenue
Bonds, VRDN, Series A, 4.30% due 6/01/2006 (a) 10,200
16,875 Oklahoma State, Industrial Authority Revenue Bonds (Baptist Center
Health System), Series A, CP, 4.10% due 5/18/1995 16,875
Oregon-- 9,300 Medford, Oregon, Hospital Facilities Authority Revenue Bonds (Gross--
1.1% Rogue Valley Health Services), VRDN, 4.30% due 10/01/2016 (a) 9,300
Oregon State GO, Veterans' Welfare Bonds, VRDN (a):
53,000 Series 73-E, 4.15% due 12/01/2016 53,000
15,000 Series 73-G, 4.25% due 12/01/2018 15,000
7,300 Port of Portland, Oregon, Public Grain Elevator Revenue Bonds (Columbia
Grain Incorporated Project), VRDN, Series A, 4.375% due 12/01/2014 (a) 7,300
<PAGE>
Pennsylvania-- Allegheny County, Pennsylvania, Hospital Development Authority
8.2% Revenue Bonds(Presbyterian Health Center), VRDN (a):
8,000 Series A, 4.20% due 3/01/2020 8,000
1,400 Series C, 4.20% due 3/01/2020 1,400
Allegheny County, Pennsylvania, IDA, PCR (Duquesne Light Project),
CP, Series A:
15,000 4.40% due 12/07/1995 15,000
12,000 4.75% due 12/07/1995 12,000
800 Authority Improvement Municipalities of Allegheny County, Pennsylvania,
Hospital Revenue Bonds (Pooled Hospital Equipment Leasing), VRDN,
4.20% due 9/01/1995 (a) 800
2,500 Butler County, Pennsylvania, IDA, IDR, Refunding (Wetterau Finance Co.
Project), VRDN, 4.20% due 12/01/2014 (a) 2,500
3,000 Delaware County, Pennsylvania, IDA, Solid Waste Revenue Bonds (Scott
Paper Company), VRDN, Series B, 4.30% due 12/01/2018 (a) 3,000
17,000 Eagle Tax Exempt Trust, Pennsylvania, VRDN, Series 94, Class 3803,
4.35% due 5/01/2008 (a) 17,000
Emmaus, Pennsylvania, General Authority Revenue Bonds (Local
Government Pool), VRDN (a):
6,400 Series A, 4.25% due 3/01/2024 6,400
9,000 Series C, 4.25% due 3/01/2024 9,000
10,100 Series D, 4.25% due 3/01/2024 10,100
25,000 Series E, 4.25% due 3/01/2024 25,000
22,300 Geisinger Authority, Pennsylvania, Health Systems Revenue Bonds,
Series B, VRDN, 4.20% due 7/01/2022 (a) 22,300
5,700 Montgomery County, Pennsylvania, Higher Education and Health Authority,
Hospital Revenue Bonds (Holy Redeemer Hospital), VRDN, 4.10% due
9/01/2018 (a) 5,700
17,150 Pennsylvania Energy Development Authority Revenue Bonds (B&W
Edensburg Project), VRDN, AMT, 4.25% due 12/01/2011 (a) 17,150
77,520 Pennsylvania Floating Rate Trust Certificates, GO, VRDN, Series I,
4.35% due 10/02/1999 (a) 77,520
Pennsylvania State Higher Education Assistance Agency, Student
Loan Revenue Bonds, VRDN (a):
11,000 AMT, Series A, 4.20% due 1/01/2018 11,000
66,000 AMT, Series A, 4.20% due 12/01/2024 66,000
27,300 AMT, Series B, 4.20% due 7/01/2018 27,300
54,300 Series A, 3.85% due 12/01/2000 54,300
34,900 Series C, 4.20% due 7/01/2018 34,900
30,800 Series E, 4.20% due 7/01/2018 30,800
Pennsylvania State Higher Educational Facilities Authority,
College and University Revenue Bonds, VRDN (a):
8,000 (Carnegie-Mellon University), Series A, 4.10% due 11/01/2015 8,000
11,400 (Temple University), 4.20% due 10/01/2009 11,400
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Pennsylvania Pennsylvania State Higher Educational Facilities Authority,
(concluded) Health Services Revenue Bonds:
$ 5,225 (Putters), VRDN, Series 4B, 4.50% due 1/01/2009 (a) $ 5,225
15,000 (University of Pennsylvania), VRDN, Series B, 4.20% due
1/01/2024 (a) 15,000
Pennsylvania State Higher Educational Facilities Authority, Revenue
Refunding Bonds(Thomas Jefferson University), ACES:
7,650 Series B, 3.20% due 6/01/1995 7,650
34,500 Series C, 3.70% due 6/01/1995 34,500
15,000 Pennsylvania State, TAN, 4.75% due 6/30/1995 15,013
20,750 Philadelphia, Pennsylvania, Hospital and Higher Education Facilities
Authority, Hospital Revenue Bonds (Children's Hospital of Philadelphia
Project), VRDN, 4.20% due 3/01/2027 (a) 20,750
Philadelphia, Pennsylvania, IDA, Revenue Bonds:
10,200 (30th Street Station Project), VRDN, AMT, 3.50% due 1/01/2011 (a) 10,200
8,500 (Institute for Cancer Research Project), CP, Series A,
4.20% due 7/01/2013 8,500
9,000 (Philadelphia Airport Hotel), UPDATES, AMT, 4.15% due 12/01/2017 (a) 9,000
20,880 Sayre, Pennsylvania, Health Care Facilities Authority Revenue Bonds
(VHA of Pennsylvania, Inc., Capital Assets Financing Project),
VRDN, Series L, 4% due 12/01/2020 (a) 20,880
South Carolina-- 2,000 Berkeley County, South Carolina, PCR, Facilities Refunding Bonds
1.1% (Amoco Chemical Co. Project), VRDN, 4.35% due 7/01/2012 (a) 2,000
5,900 Charleston County, South Carolina, IDR, Refunding (Massey Coal
Terminal SC Corporation), VRDN, 4.30% due 1/01/2007 (a) 5,900
19,800 Charleston County, South Carolina, School District, TAN,
4.50% due 4/13/1995 19,806
12,100 Orangeburg County, South Carolina, Solid Waste Disposal Facilities
Revenue Bonds(South Carolina Electric & Gas), VRDN, AMT, 4.30%
due 11/01/2024 (a) 12,100
South Carolina Jobs EDA, Revenue Bonds, VRDN (a):
4,600 (Saint Francis Hospital Project), 4.25% due 7/01/2022 4,600
5,400 (Wellman, Inc. Project), 4.40% due 12/01/2010 5,400
14,100 (Wellman, Inc. Project), AMT, 4.40% due 12/01/2012 14,100
7,200 (WelIman, Inc Project), AMT, 4.25% due 3/01/2015 7,200
<PAGE>
Tennessee-- 9,400 Cleveland, Tennessee, IDB, Revenue Bonds (Newly Wed Foods
0.6% Incorporated Project), VRDN, AMT, 4.35% due 1/01/2012 (a) 9,400
8,100 Loudon, Tennessee, IDB, PCR, Refunding (A.E. Staley Manufacturing
Co. Project), VRDN, 4.25% due 9/01/2001 (a) 8,100
Memphis, Tennessee (Putters), VRDN (a):
6,695 Series 3A, 4.50% due 10/01/2013 6,695
3,680 Series 3B, 4.50% due 10/01/2014 3,680
14,955 Morristown, Tennessee, IDB, PCR, Refunding (Akzo Chemicals, Inc.
Project), VRDN, 4.25% due 8/01/2001 (a) 14,955
12,000 Volunteer State Student Funding Corporation, Tennessee, Student
Loan Revenue Bonds, VRDN, AMT, Series A-1, 4.25% due 12/01/2017 (a) 12,000
Texas-- 23,500 Brazos, Texas, Higher Education Authority Incorporated, Student
14.4% Loan Revenue Bonds, AMT, Series B-1, 3.80% due 6/01/1995 23,500
4,000 Corpus Christi, Texas, IDR (Dedietrich USA Incorporated Project),
VRDN, AMT, 4.20% due 11/01/2008 (a) 4,000
8,910 Galveston County, Texas, Health Facilities Development Corporation
Revenue Bonds (Devereux Foundation Project), VRDN, 4.25%
due 1/01/2016 (a) 8,910
13,800 Grapevine, Texas, IDR, Airport Revenue Refunding Bonds (Southern Air
Transportation Project), VRDN, 4.10% due 3/01/2010 (a) 13,800
Gulf Coast Waste Disposal Authority, Texas, PCR (Amoco Oil Co.
Project), VRDN, AMT (a):
22,500 4.50% due 5/01/2023 22,500
2,800 4.50% due 6/01/2024 2,800
Gulf Coast Waste Disposal Authority, Texas, Solid Waste Disposal
Revenue Bonds(Amoco Oil Co. Project), AMT:
2,100 4.30% due 10/01/1995 2,100
14,300 Refunding, VRDN, 4.50% due 8/01/2023 (a) 14,300
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Texas Harris County, Texas, Health Facilities Development Corporation,
(concluded) Hospital Revenue Bonds, VRDN (a):
$ 242,800 (Methodist Hospital), 4.25% due 12/01/2025 $ 242,800
18,300 (Saint Luke's Episcopal Hospital), Series B, 4.25% due 2/15/2016 18,300
23,800 (Saint Luke's Episcopal Hospital), Series C, 4.25% due 2/15/2016 23,800
3,800 (Saint Luke's Episcopal Hospital), Series D, 4.25% due 2/15/2016 3,800
6,900 Harris County, Texas, Health Facilities Development Corporation,
Special Facilities Revenue Bonds (Texas Medical Center Project),
VRDN, 4.25% due 2/15/2022 (a) 6,900
7,100 Harris County, Texas, Industrial Development Corporation, PCR
(Exxon Project), DATES, Series A, 4.25% due 3/01/2024 (a) 7,100
Harris County, Texas, Toll Road Revenue Bonds, VRDN (a):
15,000 Sublien D, 4.10% due 8/01/2015 15,000
25,000 Sublien H, 4.10% due 8/01/2020 25,000
11,440 Hockley County, Texas, Industrial Development Corporation, PCR (Amoco
Project), 3.90% due 5/01/1995 11,439
7,000 Houston, Texas, Public Improvement Bonds, VRDN, Series A,
4.15% due 4/01/2013 (a) 7,000
54,150 Houston, Texas, TRAN, 4.50% due 6/29/1995 54,266
22,800 Lubbock, Texas, Health Facilities Development Corporation Revenue
Bonds (Saint Joseph Health System), VRDN, Series A, 4.20%
due 7/01/2013 (a) 22,800
North Texas Higher Education Authority Incorporated, Student Loan
Revenue Bonds, VRDN (a):
5,000 AMT, 4.35% due 12/01/2005 5,000
13,700 AMT, Series F, 4.20% due 4/01/2020 13,700
3,000 Refunding, 4.20% due 3/01/1999 3,000
23,700 Refunding, 4.20% due 3/01/2005 23,700
29,000 Refunding, Series A, 4.20% due 4/01/2005 29,000
5,000 Refunding, Series A, 4.20% due 4/01/2020 5,000
18,500 Panhandle Plains, Texas, Higher Education Authority Incorporated,
Student Loan Revenue Bonds, AMT, Series A, 3.80% due 6/01/1995 18,500
18,700 San Antonio, Texas, Higher Education Authority Revenue Refunding
Bonds (Trinity University Project), VRDN, 4.20% due 4/01/2004 (a) 18,700
6,900 Southwest Texas, Higher Education Authority Incorporated, Revenue
Refunding Bonds (Southern Methodist University), VRDN,
4.35% due 7/01/2015 (a) 6,900
8,800 Texas A&M University, University System Revenue Bonds (Financing
System), CP, Series B, 3.90% due 5/16/1995 8,800
11,800 Texas State, Agricultural Financing Authority Revenue Bonds, CP,
<PAGE> Series A, 4.10% due 4/18/1995 11,800
28,400 Texas State, Multi-Modal Water Development Board, VRDN, Series A,
4.30% due 3/01/2015 (a) 28,400
261,700 Texas State, TRAN, UT, 5% due 8/31/1995 262,392
27,920 Travis County, Texas, Health Facility Development Corporation
Revenue Bonds(Daughters of Charity--Seton Medical Center), VRDN,
4.25% due 11/01/2013 (a) 27,920
Waco, Texas, Health Facilities Development Corporation, Health
Facilities Revenue Bonds (Daughters of Charity--Providence
Hospital), VRDN (a):
18,485 4.25% due 11/01/2013 18,485
12,300 Series 88A, 4.25% due 11/01/2018 12,300
5,000 West Side Calhoun County, Texas, Development Corporation, PCR
(Sohio Chemical Company Project), UPDATES, 4.25% due 12/01/2015 (a) 5,000
5,265 Yoakum County, Texas, Industrial Development Corporation, PCR
(Amoco Project), 3.90% due 5/01/1995 5,264
Utah-- 53,000 Emery County, Utah, PCR, Refunding (Pacific Corporation Projects),
1.2% VRDN, 4.40% due 11/01/2024 (a) 53,000
12,000 Intermountain Power Agency, Utah, Power Supply Revenue Bonds, CP,
Series F, 4.05% due 5/16/1995 12,000
15,100 Salt Lake County, Utah, PCR, Refunding (Service Station Holdings
Project), VRDN, Series B, 4.25% due 8/01/2007 (a) 15,100
6,000 Utah State Board of Regents, Student Loan Revenue Bonds, VRDN,
AMT, Series C, 4.20% due 11/01/2013 (a) 6,000
</TABLE>
<TABLE>
CMA TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1995 (CONCLUDED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Vermont-- $ 1,100 Vermont Higher Educational and Health Buildings, Financing Agency
0.0% Revenue Bonds(VHA-New England), VRDN, Series G, 4.10% due 12/01/2025 (a) $ 1,100
Virginia-- 5,700 Loudoun County, Virginia, IDA, Residential Care Facility Revenue Bonds
0.7% (Falcons Landing Project), VRDN, Series B, 4.30% due 11/01/2024 (a) 5,700
3,200 Peninsula Ports Authority, Virginia, Revenue Refunding Bonds
(Port Facility--Shell Oil Company Project), UPDATES, Series A,
4.15% due 12/01/2005 (a) 3,200
2,400 Roanoke, Virginia, IDA, Hospital Revenue Bonds (Roanoke Memorial
Hospital Project), VRDN, Series A, 4.25% due 7/01/2017 (a) 2,400
Rockingham County, Virginia, IDA, Revenue Bonds, VRDN (a):
1,000 4.625% due 10/01/2022 1,000
16,000 (Merck & Co. Project), Series A, 4.375% due 10/01/2020 16,000
27,300 Virginia State Housing Development Authority, Commonwealth Mortgage
Revenue Bonds, AMT, Series I, Sub-Series I, 4.20% due 5/11/1995 27,300
<PAGE>
Washington-- 9,200 Port Anacortes, Washington, Industrial Development Corporation
1.1% Revenue Bonds (Texaco Project), CP, 3.85% due 5/09/1995 9,200
Washington State Public Power Supply System, Revenue Refunding
Bonds (Nuclear Project No. 3), VRDN (a):
24,500 Series 3A-1, 4.20% due 7/01/2018 24,500
9,300 Series 3A-2, 4.25% due 7/01/2018 9,300
Washington Student Loan Finance Association Revenue Bonds (Guaranteed
Student Loan Program), VRDN (a):
11,400 AMT, Series A, 4.25% due 12/01/2002 11,400
6,000 AMT, Series B, 4.25% due 12/01/2002 6,000
10,680 AMT, Series B, 4.15% due 1/01/2004 10,680
10,400 Second Series, 4% due 1/01/2001 10,400
West Virginia-- 11,220 Hancock County, West Virginia, County Commission, IDR, Refunding
0.2% (The Boc Group Inc. Project), VRDN, 4.25% due 8/01/2005 (a) 11,220
Wisconsin-- Eagle Tax Exempt Trust, Wisconsin, VRDN (a):
1.3% 30,300 Series 1993-H, 4% due 11/01/2008 30,300
6,900 Series 94, Class 4901, 4.35% due 9/01/2015 6,900
24,300 Series 94, Class 4905, 4.35% due 10/01/2005 24,300
18,450 Milwaukee, Wisconsin, RAN, Series A, 5.50% due 2/22/1996 18,568
16,000 Sheboygan, Wisconsin, PCR, Refunding (Wisconsin Power and Light
Company Project), VRDN, Series A, 4.35% due 9/01/2015 (a) 16,000
2,250 Wisconsin State Health Facilities Authority Revenue Bonds (Saint
Mary's Hospital of Milwaukee--Daughters of Charity), VRDN,
4.25% due 11/06/2016 (a) 2,250
Wyoming-- 4,800 Carbon County, Wyoming, PCR (Amoco Project), 3.90% due 5/01/1995 4,799
1.2% 17,500 Sweetwater County, Wyoming, PCR, Refunding (Pacific Corporation
Project), VRDN, 4.25% due 7/01/2015 (a) 17,500
Uinta County, Wyoming, PCR:
41,855 (Amoco Oil Company Project), Series A, 4.27% due 12/01/1995 41,743
23,500 Refunding (Chevron USA Inc. Project), VRDN, 4.10% due 8/15/2020 (a) 23,500
1,500 Refunding (Chevron USA Inc. Project), VRDN, 4.10% due 12/01/2022 (a) 1,500
Puerto Rico-- 60,000 Puerto Rico Commonwealth, Government Development Bank Revenue
0.8% Bonds,CP, 3.75% due 5/10/1995 60,000
Total Investments (Cost--$7,340,935*)--99.3% 7,340,935
Other Assets Less Liabilities--0.7% 51,029
----------
Net Assets--100.0% $7,391,964
==========
<FN>
(a)The interest rate is subject to change periodically based on
certain indexes. The interest rate shown is the rate in effect at
March 31, 1995.
(b)Prerefunded; to be called.
(c)MBIA Insured.
*Cost for Federal income tax purposes was $7,340,877 (in thousands).
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1995
<S> <C> <C>
Assets:
Investments, at value (identified cost--$7,340,935,254) (Note 1a) $ 7,340,935,254
Cash 124,472
Receivables:
Interest $ 64,146,460
Securities sold 10,987,795
Beneficial interest sold 3,975,650 79,109,905
---------------
Prepaid registration fees and other assets (Note 1d) 254,786
---------------
Total assets 7,420,424,417
---------------
Liabilities:
Payables:
Securities purchased 22,755,438
Investment adviser (Note 2) 2,456,160
Distributor (Note 2) 2,416,500 27,628,098
---------------
Accrued expenses and other liabilities 832,660
---------------
Total liabilities 28,460,758
---------------
Net Assets $ 7,391,963,659
---------------
Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number
of shares authorized $ 739,756,643
Paid-in capital in excess of par 6,657,809,787
Undistributed investment income--net 57,789
Accumulated realized capital losses--net (Note 4) (5,660,560)
---------------
Net Assets--Equivalent to $1.00 per share based on 7,397,566,430
shares of beneficial interest outstanding $ 7,391,963,659
===============
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1995
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 246,217,013
Expenses:
Investment advisory fees (Note 2) $ 29,119,924
Distribution fees (Note 2) 9,357,280
Transfer agent fees (Note 2) 1,623,665
Registration fees (Note 1d) 526,090
Accounting services (Note 2) 411,464
Custodian fees 189,859
Printing and shareholder reports 167,469
Professional fees 81,707
Trustees' fees and expenses 57,568
Pricing fees 49,670
Other 172,131
---------------
Total expenses 41,756,827
---------------
Investment income--net 204,460,186
Realized Loss on Investments--Net (Note 1c) (1,362,814)
---------------
Net Increase in Net Assets Resulting from Operations $ 203,097,372
===============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended March 31,
Increase (Decrease) in Net Assets: 1995 1994
<S> <C> <C>
Operations:
Investment income--net $ 204,460,186 $ 148,192,450
Realized gain (loss) on investments--net (1,362,814) 51,826
--------------- ---------------
Net increase in net assets resulting from operations 203,097,372 148,244,276
--------------- ---------------
Dividends to Shareholders (Note 1e):
Investment income--net (204,366,652) (147,847,067)
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders (204,366,652) (147,847,067)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 23,571,897,187 25,164,582,052
Net asset value of shares issued to shareholders in reinvestment of
dividends (Note 1e) 204,370,799 147,842,729
--------------- ---------------
23,776,267,986 25,312,424,781
Cost of shares redeemed (24,294,994,658) (24,927,916,358)
--------------- ---------------
Net increase (decrease) in net assets derived from beneficial interest
transactions (518,726,672) 384,508,423
--------------- ---------------
Net Assets:
Total increase (decrease) in net assets (519,995,952) 384,905,632
Beginning of year 7,911,959,611 7,527,053,979
--------------- ---------------
End of year* $ 7,391,963,659 $ 7,911,959,611
=============== ===============
<FN>
*Undistributed investment income-- net (Note 1f) $ 57,789 $ 239,945
=============== ===============
</TABLE>
<PAGE>
<TABLE>
CMA TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. For the Year Ended March 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Investment income--net .03 .02 .02 .04 .05
---------- ---------- ---------- ---------- ----------
Less dividends from investment income--net (.03) (.02) (.02) (.04) (.05)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Investment Return 2.76% 1.96% 2.36% 3.76% 5.39%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses, excluding distribution fees .43% .42% .42% .42% .41%
========== ========== ========== ========== ==========
Expenses .55% .55% .54% .54% .54%
========== ========== ========== ========== ==========
Investment income--net 2.70% 1.94% 2.33% 3.70% 5.24%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of year (in thousands) $7,391,964 $7,911,960 $7,527,054 $7,874,437 $8,695,795
========== ========== ========== ========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
CMA TAX-EXEMPT FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA Tax Exempt Fund (the "Fund") is registered under the Investment
Company Act of 1940 as a no-load, diversified, open-end management
investment company. The following is a summary of significant
accounting policies followed by the Fund.
(a) Valuation of investments--Investments are valued at amortized
cost, which approximates market value. For the purpose of valuation,
the maturity of the variable rate demand instrument is deemed to be
the next coupon date on which the interest rate is to be adjusted.
In the case of a floating rate instrument, the remaining maturity is
the demand notice payment period.
(b) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(c) Security transactions and investment
income--Security transactions are recorded on the dates the
transactions are entered into (the trade dates). Interest income
(including amortization of premium and discount) is recognized on
the accrual basis. Realized gains and losses on security
transactions are determined on the identified cost basis.
(d) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(e) Dividends to shareholders--The Fund declares dividends daily and
reinvests daily such dividends (net of non-resident alien tax
withheld) in additional fund shares at net asset value. Dividends
are declared from the total of net investment income, excluding
discounts earned other than original price discounts.Net realized
capital gains, if any, are normally distributed annually after
deducting prior years' loss carryforward. The Fund may distribute
capital gains more frequently than annually in order to maintain the
Fund's net asset value at $1.00 per share.
(f) Reclassification--Generally accepted accounting principles
require that certain differences between undistributed net
investment income for financial reporting and tax purposes, if
permanent, be reclassified to accumulated net realized capital
losses. Accordingly, current year's permanent book/tax differences
of $275,690 have been reclassified from undistributed net investment
income to accumulated net realized capital losses. These
reclassifications have no effect on net assets or net asset value
per share.
<PAGE>
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets, at the following annual rates: 0.50%
of the Fund's average daily net assets not exceeding $500 million;
0.425% of the average daily net assets in excess of $500 million but
not exceeding $1 billion; and 0.375% of the average daily net assets
in excess of $1 billion. The Investment Advisory Agreement obligates
FAM to reimburse the Fund to the extent the Fund's expenses
(excluding interest, taxes, distribution fees, brokerage fees and
commissions, and extraordinary items) exceed 2.5% of the Fund's
first $30 million of average daily net assets, 2.0% of the Fund's
next $70 million of average daily net assets, and 1.5% of the
average daily net assets in excess thereof. No fee payment will be
made to the Adviser during any year which will cause such expenses
to exceed the pro rata expense limitation at the time of such
payment.
Pursuant to the Distribution and Shareholder Servicing Plan in
compliance with Rule 12b-1 under the Investment Company Act of 1940,
Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S") receives a
distribution fee from the Fund at the end of each month at the
annual rate of 0.125% of average daily net assets of the Fund. The
distribution fee is to compensate MLPF&S financial consultants and
other directly involved branch office personnel for selling shares
of the Fund and for providing direct personal services to
shareholders. The distribution fee is not compensation for the
administrative and operational services rendered to the Fund by
MLPF&S in processing share orders and administering shareholder
accounts.
CMA TAX-EXEMPT FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, MLPF&S, FDS, and/or ML & Co.
<PAGE>
3. Transactions in Shares of
Beneficial Interest:
The number of shares purchased and redeemed during the periods
corresponds to the amounts included in the Statements of Changes in
Net Assets for net proceeds from sale of shares and cost of shares
redeemed, respectively, since shares are recorded at $1.00 per
share.
4. Capital Loss Carryforward:
At March 31, 1995, the Fund had a net capital loss carryforward of
approximately $5,227,000, of which $2,969,000 expires in 1997,
$1,358,000 expires in 1998, $210,000 expires in 1999, and $690,000
expires in 2003. These amounts will be available to offset like
amounts of any future taxable gains.
<AUDIT-REPORT>
CMA TAX-EXEMPT FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
CMA Tax-Exempt Fund:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of CMA Tax-
Exempt Fund as of March 31, 1995, the related statements of
operations for the year then ended and changes in net assets for
each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period
then ended. These financial statements and the financial highlights
are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and the
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 the 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.
Our procedures included confirmation of securities owned at March
31, 1995 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.
<PAGE>
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
CMA Tax-Exempt Fund as of March 31, 1995, the results of its
operations, the changes in its net assets, and the financial
highlights for the respective stated years in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
April 28, 1995
</AUDIT-REPORT>
