PAINEWEBBER
RMA Money Fund, Inc.
RMA Tax-Free Fund, Inc.
No load money market funds
offering a total of three
investment portfolios, each
seeking to maximize current income
consistent with liquidity and
conservation of capital.
Annual Report
June 30, 1995
PAINEWEBBER
<PAGE>
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August 15, 1995
Dear Shareholder,
During the year ended June 30, 1995, the pace of U.S. economic growth was
perceived to have slowed in response to the Federal Reserve Board's repeated
increases in the benchmark Federal Funds rate, the rate banks charge each other
for overnight borrowing. The Federal Reserve Board raised the Federal Funds rate
to 6.0% after seven short-term interest rate hikes between February 1994 and
February 1995. On July 6, 1995, the Federal Reserve cut the benchmark Federal
Funds rate by 0.25% to 5.75%. This decrease, the first in nearly three years,
signals that the Federal Reserve Board believes that inflationary pressures have
eased enough to accommodate an adjustment in monetary conditions.
ECONOMIC OVERVIEW
News concerning the economy during the year ended June 30, 1995, was dominated
by debate over whether inflation continued to threaten the economy, discussions
about the dismal performance of the dollar and details of efforts in Washington
to implement a plan to balance the budget. The U.S. bond and stock markets
rallied in the first half of 1995. Interest rates trended downward, as the
perception that the Federal Reserve had won its battle with inflation and that
the next policy action would be to lower short-term interest rates became
widespread. Strength in corporate earnings pushed stock prices higher.
Employment reports indicated a slowing economy, with consumer spending declining
significantly from 1994 and consumer credit reports showing high ratios of
installment debt to disposable income. Side effects of higher interest rates
lingered, however. Markets for new and existing homes were sluggish until the
close of the twelve-month period, despite historically attractive mortgage
rates. Although the U.S. economy appears to have been flat in the second
quarter, the second half of 1995 should show signs of further, albeit slower,
growth.
PORTFOLIO REVIEW
PAINEWEBBER RMA MONEY MARKET PORTFOLIO
PaineWebber RMA Money Market Portfolio's net assets totalled $5.4 billion as of
June 30, 1995. The Portfolio's current yield for the seven-day period ended June
30, 1995 was 5.51%. The Portfolio's weighted average maturity was 52 days as of
June 30, 1995. In anticipation of a possible Federal Reserve Board action, the
Fund maintained a slightly higher weighted average maturity during the year
ended June 30, 1995. Going forward, the Portfolio will maintain a neutral
weighted average maturity as short-term rates find stability. Security, credit
quality and liquidity remain our primary concerns.
PAINEWEBBER RMA U.S. GOVERNMENT PORTFOLIO
PaineWebber RMA U.S. Government Portfolio's net assets totalled $815.8 million
as of June 30, 1995. The Portfolio's current yield for the seven-day period
ended June 30, 1995 was 5.32%. As of June 30, 1995, the Portfolio's weighted
average maturity was 54 days.
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1
<PAGE>
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PAINEWEBBER RMA TAX-FREE FUND, INC.
PaineWebber RMA Tax-Free Fund's net assets totalled $1.6 billion as of June 30,
1995. The Fund's current yield for the seven-day period ended June 30, 1995 was
3.25%. The Fund maintained a weighted average maturity of 52 days as of June 30,
1995. In addition, the Fund does not invest in any securities subject to the
federal alternative minimum tax for individual taxpayers.
We value you as a shareholder and as a client, and thank you for your continued
support. We welcome any comments or questions you may have.
Sincerely,
<TABLE><CAPTION>
<S> <C>
/s/ Frank P.L. Minard /s/ Dennis L. McCauley
FRANK P.L. MINARD DENNIS L. MCCAULEY
Chairman, Managing Director and Chief
Mitchell Hutchins Asset Management Inc. Investment Officer--Fixed Income,
Mitchell Hutchins Asset Management Inc.
/s/ Susan P. Messina /s/ Gregory W. Serbe
SUSAN P. MESSINA GREGORY W. SERBE
Senior Vice President, Managing Director,
Mitchell Hutchins Asset Management Inc. Mitchell Hutchins Asset Management Inc.
Portfolio Manager,
PaineWebber RMA Money Fund, Inc.
/s/ Peter Yuen /s/ Debbie Vermann
PETER YUEN DEBBIE VERMANN
Portfolio Manager, Portfolio Manager,
PaineWebber RMA U.S. Government Fund, Inc. PaineWebber RMA Tax-Free Fund, Inc.
</TABLE>
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2
<PAGE>
PaineWebber RMA Money Market Portfolio
--------------------------------------------------------------------------------
Statement of Net Assets
June 30, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- ---------------- -------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--3.51%
$ 50,000 U.S. Treasury Bills.................... 08/24/95 to 11/30/95 5.310 to 5.330%@ $ 49,239,625
20,000 Federal Farm Credit Bank............... 09/01/95 5.980 20,000,000
30,000 Federal Home Loan Mortgage Corp........ 05/13/96 6.210 29,998,527
55,500 Federal National Mortgage
Association............................ 08/14/95 to 06/12/96 5.500 to 6.210 55,305,171
35,000 Student Loan Marketing Association..... 07/01/96 to 10/14/97 5.680 to 6.080* 34,990,363
-------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(cost--$189,533,686)............................... 189,533,686
-------------
BANK NOTES--7.21%
Domestic--6.75%
25,000 Bank of America........................ 09/25/95 5.890 24,999,943
23,000 Bank One Milwaukee N.A................. 03/07/96 6.820 23,073,766
35,000 Comerica Bank--Detroit................. 05/28/96 6.180 35,056,979
25,000 Comerica Bank--Detroit................. 11/22/95 5.620* 24,988,147
70,000 Greenwood Trust Co. ................... 07/19/95 to 07/28/95 5.980 to 6.000 69,999,990
30,000 Huntington National Bank............... 03/07/9 5.900 29,999,816
25,000 NationsBank of Texas................... 11/27/95 6.000 25,000,000
25,000 NBD Bank N.A........................... 06/06/96 5.850 25,060,560
27,000 Old Kent Bank & Trust Co. ............. 08/04/95 to 06/05/96 5.550 to 5.650 26,971,057
79,000 PNC Bank, N.A. ........................ 11/13/95 to 05/24/96 6.040 to 6.625 79,141,633
-------------
364,291,891
-------------
Yankee--0.46%
25,000 Westdeutsche Landesbank Girozentrale... 03/01/96 6.625 24,980,058
-------------
TOTAL BANK NOTES (cost--$389,271,949).............. 389,271,949
-------------
BANKERS ACCEPTANCES--0.46%
Yankee--0.46%
25,000 Dai-Ichi Kangyo Bank Limited
(cost--$24,975,104).................. 07/07/95 5.975 24,975,104
-------------
CERTIFICATES OF DEPOSIT--8.10%
Domestic--0.24%
3,000 Old Kent Bank & Trust Co. ............. 06/17/96 6.050 3,002,333
10,000 Republic National Bank of New York..... 02/12/96 6.540 9,992,836
-------------
12,995,169
-------------
Yankee--7.86%
10,000 Dai-Ichi Kangyo Bank Limited .......... 07/31/95 6.170 10,000,766
54,000 Dresdner Bank.......................... 01/08/96 to 03/15/96 6.650 to 7.400 54,094,171
65,000 Fuji Bank Limited ..................... 07/05/95 to 07/31/95 6.020 to 6.140 65,001,225
25,000 Mitsubishi Bank........................ 07/12/95 6.030 25,000,152
24,000 Royal Bank of Canada................... 12/08/95 7.300 24,000,993
</TABLE>
3
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PaineWebber RMA Money Market Portfolio
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--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- ---------------- -------------
<C> <S> <C> <C> <C>
CERTIFICATES OF DEPOSIT--(concluded)
Yankee--(concluded)
$ 96,000 Sanwa Bank Limited .................... 07/17/95 to 07/26/95 6.030 to 6.060% $ 96,000,374
65,000 Societe Generale....................... 07/25/95 to 02/02/96 6.000 to 7.250 65,000,000
60,000 Sumitomo Bank Limited ................. 07/13/95 to 08/21/95 6.050 60,000,740
25,000 Union Bank of Switzerland.............. 12/28/95 5.770 25,002,318
-------------
424,100,739
-------------
TOTAL CERTIFICATES OF DEPOSIT (cost--$437,095,908). 437,095,908
-------------
COMMERCIAL [email protected]%
Aerospace--3.53%
95,000 Raytheon Co. .......................... 07/10/95 to 07/17/95 5.940 to 5.950 94,808,371
96,000 Rockwell International Corp. .......... 07/18/95 to 07/20/95 5.870 to 5.940 95,708,623
-------------
190,516,994
-------------
Asset-Backed--6.74%
15,000 Asset Securitization Cooperative
Corp. ................................. 08/11/95 6.030 14,896,988
21,737 Delaware Funding Corp. ................ 07/05/95 6.030 21,722,436
114,014 Eiger Capital Corp. ................... 07/05/95 to 08/03/95 5.880 to 5.970 113,674,075
15,075 Falcon Asset Securitization Corp. ..... 08/01/95 5.950 14,997,761
164,000 New Center Asset Trust................. 07/03/95 to 07/24/95 5.960 to 6.300 163,696,836
35,000 Preferred Receivables Funding Corp. ... 07/07/95 to 08/17/95 5.950 to 5.960 34,897,486
-------------
363,885,582
-------------
Auto/Truck--3.98%
10,000 Daimler-Benz North America Corp. ...... 08/11/95 5.900 9,932,806
45,000 Ford Motor Credit Co. ................. 08/01/95 to 09/22/95 5.810 to 6.000 44,520,642
116,000 Hertz Corp. ........................... 07/11/95 to 08/04/95 5.960 to 5.980 115,625,615
10,000 PACCAR Financial Corp. ................ 07/17/95 5.940 9,973,600
35,000 Toyota Motor Credit Corp. ............. 07/12/95 5.950 34,936,368
-------------
214,989,031
-------------
Banking--8.97%
109,000 BEX America Finance Inc. .............. 07/11/95 to 08/03/95 5.940 to 6.050 108,625,694
55,000 Cariplo Finance Inc. .................. 07/10/95 to 07/21/95 5.960 54,881,628
97,482 Credito Italiano (Delaware) Inc. ...... 07/05/95 to 08/24/95 5.930 to 5.970 97,121,737
45,000 CREGEM North America Inc. ............. 09/08/95 to 09/12/95 5.880 to 5.900 44,478,825
85,000 Indosuez North America Inc. ........... 07/05/95 to 07/14/95 5.920 to 6.080 84,928,664
94,500 MPS U.S. Commercial Paper Corp. ....... 07/06/95 to 09/06/95 5.920 to 6.030 93,932,662
-------------
483,969,210
-------------
</TABLE>
4
<PAGE>
PaineWebber RMA Money Market Portfolio
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<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- ---------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER@--(continued)
Broker/Dealer--7.42%
$ 20,000 Bear, Stearns & Co. Inc. .............. 08/02/95 6.030% $ 19,892,800
24,800 CS First Boston, Inc. ................. 07/17/95 5.900 24,734,969
25,000 Goldman Sachs Group LP................. 09/14/95 5.850 24,695,313
102,800 Merrill Lynch & Co., Inc. ............. 07/07/95 to 10/17/95 5.900 to 6.080 102,058,870
110,000 Morgan Stanley Group Inc. ............. 07/25/95 to 10/02/95 5.820 to 6.010 108,967,928
120,500 Nomura Holding America Inc. ........... 07/03/95 to 08/11/95 5.970 to 6.250 120,178,335
-------------
400,528,215
-------------
Business Services--2.77%
150,000 PHH Corp. ............................. 07/12/95 to 07/28/95 5.870 to 5.960 149,566,265
-------------
Chemical--1.49%
82,000 DuPont (E.I.) deNemours & Co. ......... 08/04/95 to 12/21/95 5.660 to 6.040 80,632,240
-------------
Computer--0.92%
25,000 IBM Corp. ............................. 08/04/95 5.970 24,859,042
25,000 IBM Credit Corp. ...................... 08/18/95 5.940 24,802,000
-------------
49,661,042
-------------
Conglomerate--0.95%
52,049 BTR Dunlop Finance Inc. ............... 08/21/95 to 12/19/95 5.700 to 6.160 51,253,531
-------------
Drugs & Healthcare--3.14%
22,000 Abbott Laboratories.................... 07/13/95 5.930 21,956,513
21,000 Bayer Corp. ........................... 07/20/95 5.950 20,934,054
20,000 Eli Lilly & Co. ....................... 07/26/95 5.940 19,917,500
107,000 Pfizer Inc. ........................... 07/10/95 to 07/17/95 5.850 to 5.940 106,776,321
-------------
169,584,388
-------------
Electronics--3.03%
30,800 Emerson Electric Co. .................. 07/18/95 5.930 30,713,751
23,200 Motorola Credit Corp. ................. 07/18/95 5.930 23,135,034
60,000 Siemens Corp. ......................... 07/11/95 to 07/14/95 5.850 to 5.920 59,891,972
50,000 Vermont American Corp. ................ 07/19/95 5.920 49,852,000
-------------
163,592,757
-------------
Energy--4.03%
120,000 Chevron Oil Finance Co. ............... 07/13/95 to 08/09/95 5.920 to 5.950 119,541,168
39,000 Exxon Asset Management Co. ............ 07/14/95 5.850 38,917,613
45,000 Exxon Imperial U.S. Inc. .............. 07/07/95 to 07/28/95 5.920 to 5.940 44,886,233
14,200 Shell Oil ............................. 09/15/95 5.840 14,024,930
-------------
217,369,944
-------------
</TABLE>
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PaineWebber RMA Money Market Portfolio
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<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- ---------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER@--(continued)
Finance-Conduit--3.97%
$ 15,000 Commerzbank U.S. Finance Inc. ......... 09/29/95 6.150% $ 14,769,375
43,000 MetLife Funding Inc. .................. 07/06/95 to 07/20/95 5.850 to 5.920 42,923,869
22,100 SBNSW (Delaware) Inc. ................. 07/06/95 to 07/13/95 5.940 to 5.970 22,067,788
65,000 Svenska Handelsbanken Inc. ............ 07/07/95 to 07/31/95 5.960 to 6.040 64,834,433
20,000 Toronto-Dominion Holdings Inc. ........ 09/18/95 6.130 19,730,961
50,000 UBS Finance (Delaware) Inc. ........... 07/03/95 6.250 49,982,639
-------------
214,309,065
-------------
Finance-Consumer--0.92%
50,000 Household Finance Corp. ............... 08/10/95 5.950 49,669,444
-------------
Finance-Credit Union--0.72%
39,000 U.S. Central Credit Union.............. 07/06/95 5.950 38,967,771
-------------
Finance-Diversified--2.25%
30,000 Associates Corp. of North America...... 07/27/95 5.960 29,870,867
50,000 Barclays U.S. Funding Corp. ........... 07/11/95 5.900 49,918,056
42,000 Sanwa Business Credit Corp. ........... 07/24/95 to 08/04/95 5.960 to 6.020 41,781,301
-------------
121,570,224
-------------
Finance-Retail--0.83%
45,000 American Express Credit Corp. ......... 07/12/95 5.930 44,918,463
-------------
Finance-Subsidiary--1.30%
50,000 Deutsche Bank Financial Inc. .......... 07/06/95 5.850 49,959,375
20,000 MCA Funding Corp. ..................... 07/06/95 6.500 19,981,945
-------------
69,941,320
-------------
Food, Beverage & Tobacco--5.15%
29,000 Allied Domecq North America Corp. ..... 07/27/95 5.980 28,874,752
21,200 Anheuser-Busch Companies Inc. ......... 07/13/95 5.900 21,158,307
68,600 B.A.T. Capital Corp. .................. 07/06/95 to 07/24/95 5.950 to 5.960 68,443,951
40,000 Campbell Soup Co. ..................... 07/06/95 to 01/12/96 5.930 to 6.090 39,610,804
25,000 Heinz (H.J.) Co. ...................... 07/21/95 5.850 24,918,750
75,000 Nestle Capital Corp. .................. 07/06/95 to 07/12/95 5.850 to 5.950 74,918,951
20,000 Philip Morris Companies, Inc. ......... 08/11/95 5.920 19,865,156
-------------
277,790,671
-------------
General Trade--2.66%
143,630 Mitsubishi International Corp. ........ 07/05/95 to 07/26/95 5.900 to 5.970 143,310,496
-------------
Insurance--0.92%
50,000 American General Corp. ................ 07/21/95 to 08/03/95 5.920 to 5.970 49,789,254
-------------
</TABLE>
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PaineWebber RMA Money Market Portfolio
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<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- ---------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER--(concluded)
Insurance/Property & Casualty--1.30%
$ 20,000 AI Credit Corp. ....................... 07/13/95 5.940% $ 19,960,400
50,000 AIG Funding Inc. ...................... 07/10/95 5.925 49,925,938
-------------
69,886,338
-------------
Miscellaneous--0.23%
12,500 Beta Finance Inc. ..................... 07/31/95 5.980 12,437,708
-------------
Oil Equipment & Services--0.18%
10,000 Colonial Pipeline Co. ................. 07/26/95 5.930 9,958,819
-------------
Paper & Forest Products--0.55%
30,000 Weyerhaeuser Co. ...................... 07/27/95 5.950 29,871,083
-------------
Pollution Control--0.44%
24,000 WMX Technologies Inc. ................. 07/25/95 5.950 23,904,800
-------------
Printing & Publishing--2.06%
10,000 Knight-Ridder Inc. .................... 07/28/95 5.950 9,955,375
12,000 McGraw-Hill Companies Inc. ............ 12/19/95 5.870 11,665,410
90,000 Reed Elsevier USA Inc. ................ 07/05/95 to 07/27/95 5.850 to 6.080 89,798,589
-------------
111,419,374
-------------
Retail-Merchandise--1.88%
86,500 Penny (J.C.) Funding Corp. ............ 07/13/95 to 07/27/95 5.850 to 5.950 86,219,033
15,000 Toys 'R' Us Inc. ...................... 07/07/95 5.920 14,985,200
-------------
101,204,233
-------------
Utilities-Electric--0.92%
9,700 Central & South West Corp. ............ 07/24/95 5.920 9,663,312
40,000 Duke Power Co. ........................ 07/12/95 5.950 39,927,278
-------------
49,590,590
-------------
Utilities-Telephone--0.35%
19,000 Southwestern Bell Capital Corp. ....... 07/27/95 5.950 18,918,353
-------------
TOTAL COMMERCIAL PAPER (cost--$3,973,007,205)...... 3,973,007,205
-------------
SHORT-TERM CORPORATE OBLIGATIONS--5.26%
Auto/Truck--0.44%
5,000 PACCAR Financial Corp.................. 12/15/95 4.220* 4,948,562
19,000 Toyota Motor Credit Corp. ............. 11/15/95 5.350 18,888,929
-------------
23,837,491
-------------
Banking--0.46%
25,000 Morgan (J.P.) & Co., Inc. ............. 05/13/96 6.200 24,998,920
-------------
</TABLE>
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PaineWebber RMA Money Market Portfolio
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--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- ---------------- -------------
<C> <S> <C> <C> <C>
SHORT-TERM CORPORATE OBLIGATIONS--(CONCLUDED)
Broker/Dealer--2.78%
$ 25,000 Bear, Stearns & Co. Inc. .............. 09/22/95 5.930% $ 25,000,000
25,000 Goldman Sachs Group LP................. 10/25/95 6.450* 25,000,000
100,000 Merrill Lynch & Co., Inc............... 08/30/95 to 06/10/96 5.610 to 6.491 99,995,542
-------------
149,995,542
-------------
Miscellaneous--1.30%
70,000 Beta Finance Inc. ..................... 10/20/95 to 01/16/96 6.000 to 7.560 69,998,490
-------------
Yankee--0.28%
15,000 Westdeusche Landesbank Girozentrale.... 03/01/96 6.625 14,981,907
-------------
TOTAL SHORT-TERM CORPORATE OBLIGATIONS (cost--$283,812,350) 283,812,350
-------------
FLOATING RATE NOTES*--1.20%
Finance-Diversified--0.46%
25,000 CIT Group Holdings Inc................. 12/07/95 6.350 24,983,593
-------------
Miscellaneous--0.74%
40,000 Beta Finance Inc. ..................... 11/07/95 to 04/09/96 5.530 to 5.570 40,000,000
-------------
TOTAL FLOATING RATE NOTES (cost--$64,983,593)...... 64,983,593
-------------
REPURCHASE AGREEMENT--0.58%
31,127 Repurchase Agreement dated 06/30/95,
with Citicorp Securities, Inc.,
collateralized by $30,030,000 U.S.
Treasury Notes, 7.250% due 02/15/98
proceeds: $31,142,888 (cost--
$31,127,000)........................... 07/03/95 6.125 31,127,000
-------------
TOTAL INVESTMENTS (cost--$5,393,806,795 which approximates cost for
federal income tax purposes)--99.92%.................................... 5,393,806,795
Other assets in excess of liabilities--0.08%............................. 4,338,976
-------------
NET ASSETS (applicable to 5,401,688,839 Series A Common Stock outstanding
at $1.00 per share)--100.00%............................................ $5,398,145,771
-------------
-------------
</TABLE>
* Variable rate securities--maturity date reflects earlier of reset date or
maturity date. The interest rates are the current rates as of June 30, 1995
and reset periodically.
@ Yield to maturity for discounted securities.
Weighted average maturity--52 days
See accompanying notes to financial statements
8
<PAGE>
PaineWebber RMA U.S. Government Portfolio
--------------------------------------------------------------------------------
Statement of Net Assets
June 30, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- ---------------- ------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--53.81%
$ 380,000 U.S. Treasury Bills.................. 07/13/95 to 05/02/96 5.385 to 6.620%@ $374,353,313
65,000 U.S. Treasury Notes.................. 07/31/95 to 05/15/96 3.875 to 4.250 64,636,271
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(cost--$438,989,584)........................... 438,989,584
------------
REPURCHASE AGREEMENTS--46.29%
30,000 Repurchase Agreement dated 06/30/95,
with Citicorp Securities, Inc.,
collateralized by $29,640,000 U.S.
Treasury Notes, 7.750% due 03/31/96;
proceeds: $30,015,313................ 07/03/95 6.125 30,000,000
38,000 Repurchase Agreement dated 06/30/95,
with Daiwa Securities America, Inc.,
collateralized by $39,795,000 U.S.
Treasury Bills, due 12/14/95;
proceeds: $38,019,396................ 07/03/95 6.125 38,000,000
38,000 Repurchase Agreement dated 06/30/95,
with First Chicago Capital Markets,
Inc., collateralized by $39,780,000
U.S. Treasury Bills, due 12/14/95;
proceeds: $38,019,396................ 07/03/95 6.125 38,000,000
38,000 Repurchase Agreement dated 06/30/95,
with Fuji Securities Inc.
collateralized by $38,760,000 U.S.
Treasury Notes, 4.750% due 02/15/97;
proceeds: $38,019,317................ 07/03/95 6.100 38,000,000
13,638 Repurchase Agreement dated 06/30/95,
with Goldman, Sachs & Co.,
collateralized by $9,500,000 U.S.
Treasury Bonds, 10.625% due
08/15/15; proceeds: $13,644,819...... 07/03/95 6.000 13,638,000
38,000 Repurchase Agreement dated 06/30/95,
with Lehman Government Securities
Inc., collateralized by $36,235,000
U.S. Treasury Bonds, 7.250% due
05/15/16; proceeds: $38,019,317...... 07/03/95 6.100 38,000,000
30,000 Repurchase Agreement dated 06/30/95,
with Morgan Stanley Group, Inc.,
collateralized by $20,185,000 U.S.
Treasury Bonds, 12.000% due
08/15/13; proceeds: $30,015,125...... 07/03/95 6.050 30,000,000
38,000 Repurchase Agreement dated 06/30/95,
with NationsBank collateralized by
$38,400,000 U.S. Treasury Notes,
6.125% due 05/15/98; proceeds:
$38,019,792.......................... 07/03/95 6.250 38,000,000
38,000 Repurchase Agreement dated 06/30/95,
with Nomura Securities
International, Inc., collateralized
by $37,230,000 U.S. Treasury Notes,
6.375% due 01/15/00; proceeds:
$38,019,317.......................... 07/03/95 6.100 38,000,000
</TABLE>
9
<PAGE>
PaineWebber RMA U.S. Government Portfolio
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<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- ---------------- ------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENTS--(concluded)
$38,000 Repurchase Agreement dated 06/30/95,
with Salomon Brothers, Inc.,
collateralized by $38,188,000 U.S.
Treasury Notes, 5.500% due 07/31/97;
proceeds: $38,019,475................ 07/03/95 6.150% $38,000,000
38,000 Repurchase Agreement dated 06/30/95,
with Smith Barney Inc.,
collateralized by $41,085,000 U.S.
Treasury Bills, due 06/27/96;
proceeds: $38,019,158............... 07/03/95 6.050 38,000,000
------------
TOTAL REPURCHASE AGREEMENTS(cost--$377,638,000).. 377,638,000
------------
TOTAL INVESTMENTS (cost--$816,627,584 which
approximates cost for federal income tax
purposes)--100.10%.............................. 816,627,584
Liabilities in excess of other assets--(0.10)%... (846,723)
------------
NET ASSETS (applicable to 815,864,869 Series B
Common Stock outstanding at $1.00 per
share)--100.00%................................. $815,780,861
------------
------------
</TABLE>
------------
@ Yield to maturity for discounted securities.
Weighted average maturity--54 days
See accompanying notes to financial statements
10
<PAGE>
PaineWebber RMA Money Fund, Inc.
--------------------------------------------------------------------------------
Statement of Operations
For the Year Ended June 30, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET U.S. GOVERNMENT
PORTFOLIO PORTFOLIO
------------ ---------------
<S> <C> <C>
INVESTMENT INCOME:
Interest..................................................... $258,389,323 $ 42,668,517
------------ ---------------
EXPENSES:
Investment advisory and administration....................... 23,493,781 3,746,439
Transfer agency and service fees............................. 2,936,496 308,178
Federal and state registration............................... 396,802 96,967
Custody and accounting....................................... 257,586 154,055
Reports and notices to shareholders.......................... 173,267 36,309
Insurance.................................................... 172,888 37,699
Legal and audit.............................................. 107,214 59,023
Directors' fees.............................................. 8,750 8,750
Distribution fees............................................ -- 659,208
Other expenses............................................... 14,105 51,472
------------ ---------------
27,560,889 5,158,100
------------ ---------------
NET INVESTMENT INCOME......................................... 230,828,434 37,510,417
NET REALIZED GAINS (LOSSES) FROM INVESTMENT TRANSACTIONS...... (1,080,732) 79,003
------------ ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......... $229,747,702 $ 37,589,420
------------ ---------------
------------ ---------------
</TABLE>
--------------------------------------------------------------------------------
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
JUNE 30, 1995 JUNE 30, 1994
--------------------------------- ---------------------------------
MONEY MARKET U.S. GOVERNMENT MONEY MARKET U.S. GOVERNMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income......... $ 230,828,434 $ 37,510,417 $ 128,962,920 $ 24,805,278
Net realized gains (losses)
from investment
transactions................ (1,080,732) 79,003 (1,849,414) (80,999)
-------------- --------------- -------------- ---------------
Net increase in net assets
resulting from operations... 229,747,702 37,589,420 127,113,506 24,724,279
-------------- --------------- -------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income......... (230,828,434) (37,510,417) (128,962,920) (24,805,278)
-------------- --------------- -------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
TRANSACTIONS................... 1,062,217,441 (39,225,757) 307,460,924 (25,825,182)
-------------- --------------- -------------- ---------------
Net increase (decrease) in net
assets...................... 1,061,136,709 (39,146,754) 305,611,510 (25,906,181)
NET ASSETS:
Beginning of year............. 4,337,009,062 854,927,615 4,031,397,552 880,833,796
-------------- --------------- -------------- ---------------
End of year................... $5,398,145,771 $ 815,780,861 $4,337,009,062 $ 854,927,615
-------------- --------------- -------------- ---------------
-------------- --------------- -------------- ---------------
</TABLE>
See accompanying notes to financial statements
11
<PAGE>
PaineWebber RMA Money Fund, Inc.
--------------------------------------------------------------------------------
Notes to Financial Statements
--------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber RMA Money Fund, Inc. ("Corporation") was organized under the
laws of Maryland on July 2, 1982 and is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended, as an
open-end diversified management investment company. The Corporation is a series
mutual fund with three portfolios: PaineWebber RMA Money Market Portfolio
("Money Market Portfolio"), PaineWebber RMA U.S. Government Portfolio ("U.S.
Government Portfolio") (collectively the "Funds") and PaineWebber Retirement
Money Fund. The financial statements of PaineWebber Retirement Money Fund are
not included herein.
Valuation and Accounting for Investments--Investments are valued at
amortized cost which approximates market value. Investment transactions are
accounted for on trade date. Realized gains and losses from investment
transactions are calculated using the identified cost method. Interest income is
recorded on an accrual basis. Premiums are amortized and discounts are accreted
as adjustments to interest income and the identified cost of securities.
The ability of the issuers of the debt securities held by the Funds to meet
their obligations may be affected by economic developments, including those
particular to a specific industry or region.
Repurchase Agreements--The Funds' custodian takes possession of the
collateral pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark-to-market basis to ensure that the value,
including accrued interest, is at least equal to the repurchase price. In the
event of default of the obligation to repurchase, each Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings.
Federal Tax Status--Each Fund intends to distribute all of its taxable
income and to comply with the other requirements of the Internal Revenue Code
applicable to regulated investment companies. Accordingly, no provision for
federal income taxes is required. In addition, by distributing during each
calendar year substantially all of its net investment income, capital gains and
certain other amounts, if any, each Fund intends not to be subject to a federal
excise tax. At June 30, 1995, RMA Money Market Portfolio and RMA U.S. Government
Portfolio had net capital loss carryforwards of $3,564,961, and $84,004,
respectively. These loss carryforwards are available as reductions, to the
extent provided in the regulations, of future net realized capital gains, and
will expire between June 30, 1997 and June 30, 2003 for both Funds. To the
extent that these losses are used to offset future capital gains, it is probable
that the gains so offset will not be distributed.
Dividends and Distributions--Each Fund declares dividends on a daily basis
from net investment income. Dividends from net investment income and
distributions from realized gains from investment transactions have been
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are either
considered temporary or permanent in nature. To the extent these differences are
permanent in nature, such amounts are reclassified
12
<PAGE>
PaineWebber RMA Money Fund, Inc.
--------------------------------------------------------------------------------
Notes to Financial Statements--(continued)
--------------------------------------------------------------------------------
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Net capital gains, if
any, will be distributed annually, but each Fund may make more frequent
distributions of such gains, if necessary, to maintain its net asset value per
share at $1.00 or to avoid income or excise taxes.
INVESTMENT ADVISER AND ADMINISTRATOR
The Corporation's Board of Directors has approved an Investment Advisory and
Administration Contract ("Advisory Contract") with PaineWebber Incorporated
("PaineWebber"), under which PaineWebber serves as investment adviser and
administrator of the Corporation and each of its series. In accordance with the
Advisory Contract, each Fund pays PaineWebber an investment advisory and
administration fee, which is accrued daily and paid monthly, in accordance with
the following schedule:
ANNUAL
AVERAGE DAILY NET ASSETS RATE
------------------------------------------------------------------- ------
MONEY MARKET PORTFOLIO:
All.............................................................. 0.50%
U.S. GOVERNMENT PORTFOLIO:
Up to $300 million............................................... 0.50
In excess of $300 million up to $750 million..................... 0.44
Over $750 million................................................ 0.36
At June 30, 1995, the Money Market Portfolio and the U.S. Government
Portfolio owed PaineWebber $2,175,127 and $305,172, respectively, for investment
advisory and administration fees.
In compliance with applicable state securities laws, PaineWebber will
reimburse each Fund if and to the extent that the aggregate operating expenses
in any fiscal year, exclusive of taxes, distribution fees, interest, brokerage
fees and extraordinary expenses, exceed limitations imposed by various state
regulations. Currently, the most restrictive limitation applicable to each Fund
is 2.5% of the first $30 million of average daily net assets, 2.0% of the next
$70 million and $1.5% of any excess over $100 million. For the year ended June
30, 1995, no reimbursements were required pursuant to the above limitation.
Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins"), a
wholly-owned subsidiary of PaineWebber, serves as sub-adviser and
sub-administrator of the Fund pursuant to a Sub-Advisory and Sub-Administration
Contract between PaineWebber and Mitchell Hutchins. In accordance with that
contract, PaineWebber (not the Fund) pays Mitchell Hutchins a fee, computed
daily and paid monthly, at an annual rate of 20% of the fee paid by the Fund to
PaineWebber under the Advisory Contract.
13
<PAGE>
PaineWebber RMA Money Fund, Inc.
--------------------------------------------------------------------------------
Notes to Financial Statements--(concluded)
--------------------------------------------------------------------------------
DISTRIBUTION PLAN
PaineWebber is the distributor of the shares of both the U.S. Government
Portfolio and Money Market Portfolio. Under the plan of distribution, the U.S.
Government Portfolio is authorized to pay PaineWebber a monthly service fee at
the annual rate of up to 0.15% of its average daily net assets for providing
shareholder services and maintaining shareholder accounts. Currently,
PaineWebber is compensated for providing such services at the annual rate of
0.08% of the U.S. Government Portfolio's average daily net assets. No such fees
are charged by PaineWebber for the similar services it provides for the Money
Market Portfolio. At June 30, 1995, the U.S. Government Portfolio owed
PaineWebber $53,569 for such service fees.
TRANSFER AGENCY SERVICE FEES
Each Fund pays PaineWebber an annual fee of $4.00 per active PaineWebber
shareholder account, plus certain out-of-pocket expenses, for services not
provided by the Funds' transfer agent. For these services for the year ended
June 30, 1995, PaineWebber earned $1,168,942 and $121,625 from the Money Market
Portfolio and the U.S. Government Portfolio, respectively. At June 30, 1995, the
Money Market Portfolio and the U.S. Government Portfolio owed PaineWebber
$101,915 and $19,600, respectively, for such shareholder service fees and
reimbursement of out-of-pocket expenses.
OTHER LIABILITIES
At June 30, 1995, the Money Market Portfolio and the U.S. Government
Portfolio, had dividends payable aggregating $7,263,133 and $1,074,031,
respectively.
CAPITAL SHARE TRANSACTIONS
There are 20 billion $0.001 par value authorized shares of Series A Common
Stock relating to the Money Market Portfolio and Series B Common Stock relating
to the U.S. Government Portfolio. Transactions in capital shares, at $1.00 per
share were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
JUNE 30, 1995 JUNE 30, 1994
---------------------------------- ----------------------------------
MONEY MARKET U.S. GOVERNMENT MONEY MARKET U.S. GOVERNMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Shares sold............... 27,630,575,450 4,573,104,400 25,961,886,271 4,018,685,566
Shares repurchased........ (26,793,531,223) (4,649,073,447) (25,778,223,181) (4,068,590,875)
Dividends reinvested in
additional Fund shares.. 225,173,214 36,743,290 123,797,834 24,080,127
--------------- --------------- --------------- ---------------
Net increase (decrease) in
shares outstanding...... 1,062,217,441 (39,225,757) 307,460,924 (25,825,182)
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
14
<PAGE>
PaineWebber RMA Money Market Portfolio
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
Selected data for a share of Series A Common Stock outstanding throughout
each year is presented below:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JUNE 30,
--------------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Net investment income....................... 0.049 0.030 0.029 0.046 0.069
Dividends from net investment income........ (0.049) (0.030) (0.029) (0.046) (0.069)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return(1).................. 5.00% 2.95% 2.98% 4.56% 6.88%
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)........... $5,398,146 $4,337,009 $4,031,398 $4,054,344 $4,208,467
Ratio of expenses to average net assets..... 0.59% 0.59% 0.59% 0.59% 0.61%
Ratio of net investment income to average
net assets................................ 4.91% 2.98% 2.95% 4.57% 6.89%
</TABLE>
---------
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and capital
gain distributions at net asset value on the payable dates, and a sale at
net asset value on the last day of each period reported.
15
<PAGE>
PaineWebber RMA U.S. Government Portfolio
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
Selected data for a share of Series B Common Stock outstanding throughout
each year is presented below:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JUNE 30,
--------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Net investment income........................ 0.046 0.027 0.028 0.044 0.066
Dividends from net investment income......... (0.046) (0.027) (0.028) (0.044) (0.066)
-------- -------- -------- -------- --------
Net asset value, end of year................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total investment return(1)................... 4.67% 2.74% 2.83% 4.36% 6.59%
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
RATIOS/SUPPLEMENT DATA:
Net assets, end of period (000's)............ $815,781 $854,928 $880,834 $838,023 $937,943
Ratios of expenses to average net assets..... 0.63% 0.62% 0.61% 0.62% 0.64%
Ratio of net investment income to average net
assets..................................... 4.55% 2.75% 2.80% 4.37% 6.46%
</TABLE>
---------
(1) Total investment return is calculated assuming $1,000 investment on the
first day of each period reported, reinvestment of all dividends and capital
gain distributions at net asset value on the payable dates, and a sale at
net asset value on the last day of each period reported.
16
<PAGE>
PaineWebber RMA Money Fund, Inc.
--------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
--------------------------------------------------------------------------------
Board of Directors and Shareholders
PaineWebber RMA Money Fund, Inc.
We have audited the accompanying statements of net assets of the Money Market
Portfolio and the U.S. Government Portfolio (two of the portfolios comprising
the PaineWebber RMA Money Fund, Inc.) as of June 30, 1995, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and the financial
highlights for each of the periods indicated therein. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned at June
30, 1995 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 the
Money Market Portfolio and the U.S. Government Portfolio at June 30, 1995, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated periods therein, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
August 17, 1995
17
<PAGE>
PaineWebber RMA Money Fund, Inc.
--------------------------------------------------------------------------------
Tax Information
--------------------------------------------------------------------------------
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of the Fund's fiscal year end (June 30,
1995) as to the federal tax status of distributions received by shareholders
during such fiscal year from each portfolio. Accordingly, we are advising you
that all of the distributions paid during the fiscal year were derived from net
investment income of the Money Market Portfolio and the U.S. Government
Portfolio. These amounts are taxable as ordinary income, none of which qualifies
for the dividend received deduction available to corporate shareholders.
Dividends received by tax-exempt recipients (e.g., IRAs and Keoghs) need not
be reported as taxable income. Some retirement trusts (e.g., corporate, Keogh
and 403(b)(7) plans) may need this information for their annual information
reporting.
Because the Funds' fiscal year is not the calendar year, another
notification will be sent in respect of calendar 1995. The second notification,
which will reflect the amount used by calendar year taxpayers on their federal
income tax returns, will be made in conjunction with Form 1099 DIV and will be
mailed in January 1996. Shareholders are advised to consult their own tax
advisers with respect to the tax consequences of their investment in the Fund.
18
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
Statement of Net Assets
June 30, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
ALABAMA--2.90%
$14,900 Chatom Industrial Development Board
(Alabama Electric)
Tax-Exempt Commerical Paper............... 07/20/95 to 09/12/95 3.750 to 4.200 % $14,900,000
13,600 Macintosh Industial Development Board
(Ciba Geigy)
Pollution Control Revenue Bonds........... A 4.200 13,600,000
16,800 Port City Medical Clinic Board
(Mobile Infirmary Association)
Tax-Exempt Commercial Paper............... 08/29/95 to 09/19/95 3.700 to 4.250 16,800,000
--------------
45,300,000
--------------
ALASKA--0.28%
4,400 Alaska Industrial Development &
Export Authority
(Sheldon College)......................... A 4.300 4,400,000
--------------
ARIZONA--0.68%
3,500 Maricopa County Industrial Development
Authority (Motorola)...................... 10/01/95 4.250 3,500,000
7,100 Maricopa County Pollution Control
(Southern California Edison)
Tax-Exempt Commercial Paper............... 09/20/95 to 10/20/95 3.600 to 3.700 7,100,000
--------------
10,600,000
--------------
CALIFORNIA--8.27%
3,000 California Health Facilities Financing
(Kaiser Permanente)........................ A 3.900 3,000,000
9,100 California Higher Education Loan Authority
(Student Loan)
Variable Rate Demand Bonds................ A 4.100 9,100,000
13,400 California Pollution Control Revenue Bonds
(Pacific Gas & Electric)
Tax-Exempt Commercial Paper............... 08/28/95 4.150 13,400,000
3,750 California School Cash Reserve Program..... 07/05/95 4.500 3,750,297
5,000 California State Wide Community
Development Authority
Tax and Revenue Anticipation Notes........ 07/17/95 4.500 5,001,477
22,700 California Student Loan Revenue
Adjustable Rate Bonds..................... 07/01/95 to 07/01/96 3.900 to 4.350 22,700,000
3,000 City of San Diego Industrial Development
Revenue Bonds--Series A
(San Diego Electric & Gas)
Tax-Exempt Commercial Paper............... 09/01/95 3.050 3,000,000
2,325 Contra Costa County
Tax & Revenue Anticipation Notes.......... 07/03/96 4.500 2,343,949
4,225 Grand Terrace Community Redevelopment
Authority (Multi-Family Housing).......... A 3.850 4,225,000
</TABLE>
19
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
CALIFORNIA--(CONCLUDED)
$ 9,415 Loma Linda Hospital Revenue Bonds
(Loma Linda Medical Center)............... A 4.000 % $9,415,000
3,000 Los Angeles County
Tax and Revenue Anticipation Notes........ 07/01/96 4.500 3,020,100
9,158 Los Angeles Multi-Family Housing
(Studio Colony)........................... A 3.800 9,158,000
3,500 Los Angeles Transportation Commission...... A 3.950 3,500,000
10,575 Los Angeles Unified School District
Tax and Revenue Anticipation Notes........ 07/10/95 to 07/03/96 4.500 10,636,911
7,100 San Bernardino County
Tax and Revenue Anticipation Notes........ 07/05/96 4.500 7,137,346
9,200 San Francisco Redevelopment Agency
Multi-Family (Bayside Village)............ A 4.150 9,200,000
4,500 Santa Barbara County
Tax and Revenue Anticipation Notes........ 07/05/96 4.500 4,530,690
6,000 Stockton Unified School District
Tax and Revenue Anticipation Notes........ 12/08/95 5.250 6,013,808
--------------
129,132,578
--------------
COLORADO--1.13%
10,000 Colorado Housing Finance Authority--
Multi-Family Housing Revenue Bonds
(Grant Plaza Project)..................... A 4.125 10,000,000
4,650 Colorado Housing Finance Authority--
Multi-Family Housing Revenue Bonds
(Hamden & Estes).......................... A 4.000 4,650,000
3,000 Arapahoe County Capital Improvement
Highway Trust Fund (E470 Project)
Adjustable Rate Bonds..................... 08/30/95 4.450 3,000,000
--------------
17,650,000
--------------
CONNECTICUT--0.25%
3,800 Connecticut Economic Recovery Notes........ A 3.950 3,800,000
100 Connecticut Health and Educational
Facilities (Kent School)................. A 3.800 100,000
--------------
3,900,000
--------------
DELAWARE--0.81%
12,600 Delaware Economic Development Authority
(Hospital Billing & Collection Service,
Ltd.)................................... A 4.250 12,600,000
--------------
FLORIDA--9.23%
6,000 Florida Housing Finance Agency
(Cyprus Project).......................... A 4.000 6,000,000
37,865 Florida Local Government Finance Commission
Tax-Exempt Commercial Paper............... 08/08/95 to 09/12/95 3.600 to 4.250 37,865,000
</TABLE>
20
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
FLORIDA--(CONCLUDED)
$32,700 Florida Municipal Loan Council
Tax-Exempt Commercial Paper............... 08/07/95 to 09/22/95 3.600 to 4.300 % $32,700,000
14,065 City of Orlando Waste Water System Revenue
Bonds Tax-Exempt Commercial Paper......... 08/04/95 to 09/20/95 3.60 to 4.150 14,065,000
19,300 Orange County Health Facilities Authority
(Pooled Hospital)
Tax-Exempt Commercial Paper............... 07/19/95 to 07/29/95 4.200 19,300,000
4,200 Orange County Health Facilities Authority
(Mayflower Retirement Community).......... A 4.100 4,200,000
1,100 Palm Beach County Water & Sewer............ A 4.200 1,100,000
1,700 Pinellas County Health Facilities Authority
(Pooled Hospital Project)................. A 4.200 1,700,000
8,000 Pinellas County Health Facilities Authority
Tax-Exempt Commercial Paper............... 08/09/95 4.200 8,000,000
8,900 Sarasota County Public Hospital District
Tax-Exempt Commercial Paper............... 07/28/95 to 08/23/95 4.100 to 4.150 8,900,000
10,400 Sunshine State Government Finance
Commission Tax-Exempt Commercial Paper.... 07/21/95 to 09/11/95 3.300 to 4.100 10,400,000
--------------
144,230,000
--------------
GEORGIA--2.36%
4,194 Georgia Municipal Association
Pooled Revenue Bonds...................... A 4.250 4,194,402
18,000 Georgia Municipal Gas Authority
Tax-Exempt Commercial Paper............... 08/17/95 to 09/12/95 3.300 to 3.950 18,000,000
6,000 Burke County Development Authority
Pollution Control
(Oglethorpe Power Corp.).................. A 4.200 6,000,000
2,795 Clayton County Rivers Edge Development..... A 4.100 2,795,000
5,800 De Kalb County Multi-Family Housing
(Wood Broch).............................. A 4.000 5,800,000
--------------
36,789,402
--------------
IDAHO--0.16%
2,500 Idaho Health and Education Facilities
Authority Revenue
(St. Lukes)............................... A 4.300 2,500,000
--------------
ILLINOIS--10.49%
4,900 Illinois Development Finance Authority
Industrial Revenue (Bridgestone/Firestone) A 4.250 4,900,000
10,500 Illinois Development Finance Authority
Pollution Control Revenue
(Illinois Power)
Tax-Exempt Commercial Paper............... 08/08/95 to 09/01/95 3.900 to 4.150 10,500,000
</TABLE>
21
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
ILLINOIS--(CONCLUDED)
$ 5,000 Illinois Educational Facilities Authority
Revenue (Field Museum of National History)
Adjustable Rate Bonds..................... 09/07/95 4.250 % $5,000,000
12,995 Illinois Educational Facilities Authority
Revenue (Northwestern University)......... A 4.050 to 4.150 12,995,000
20,600 Illinois Health Facilities Authority
Revenue (Central Dupage Hospital)......... A 4.350 20,600,000
20,460 Illinois Health Facilities Authority
Revenue (Elmhurst Hospital)............... A 4.350 20,460,000
4,200 Illinois Health Facilities Authority
Revenue (Evangelical Hospital)............ A 4.300 4,200,000
11,000 Illinois Health Facilities Authority
Revenue (Evanston Hospital)
Adjustable Rate Bonds..................... 01/31/96 to 05/31/96 3.650 to 4.000 11,000,000
5,000 Illinois Health Facilities Authority
Revenue (Evanston Hospital)
Tax-Exempt Commercial Paper............... 08/15/95 4.200 5,000,000
3,900 Illinois Health Facilities Authority
Revenue (Franciscan Sisters).............. A 4.350 3,900,000
2,300 Illinois Health Facilities Authority
Revenue (Health Corp.).................... A 4.500 2,300,000
4,180 Illinois Health Facilities Authority
Revenue (Ingalls Hospital)................ A 4.500 4,180,000
5,700 Illinois Health Facilities Authority
Revenue (Methodist Medical Center)........ A 4.250 5,700,000
4,000 Illinois State............................. 08/01/95 4.400 4,003,189
16,000 Chicago O'Hare International Airport
Revenue Bonds............................. A 4.000 to 4.500 16,000,000
9,000 City of Chicago
Equipment Tender Notes.................... 09/21/95 to 11/27/95 3.900 to 4.300 9,000,000
5,000 Cook County Community College District..... 12/01/95 6.900 5,054,607
6,100 Decatur Water Revenue Bonds
Tax-Exempt Commercial Paper............... 07/31/95 4.150 6,100,000
4,000 Joliet Pollution Control Supply Revenue
(Peoples Gas, Lite & Coke)
Adjustable Rate Bonds..................... 10/01/95 4.200 4,000,000
9,000 Lisle Multi-Family Housing Revenue Bonds... A 4.000 9,000,000
--------------
163,892,796
--------------
INDIANA--4.50%
1,600 Indiana Health Facility Finance Authority
(Capital Access).......................... A 4.500 1,600,000
4,000 Indiana Health Facility Hospital Revenue
(Rehabilitation Hospital of Indiana)...... A 3.850 4,000,000
1,600 Indiana Hospital Equipment Facility Finance
Authority................................. A 4.500 1,600,000
</TABLE>
22
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
INDIANA--(CONCLUDED)
$ 2,500 Hammond Pollution Control
(Amoco)................................... A 4.200 % $2,500,000
15,590 Hoosier City of Sullivan National Rural
Utilities Co-op Finance
(Hoosier Energy)
Tax-Exempt Commercial Paper............... 09/19/95 to 10/20/95 3.300 to 3.700 15,590,000
16,000 Jasper County Pollution Control Revenue
(Northern Indiana Public Service)
Tax-Exempt Commercial Paper............... 09/18/95 to 10/13/95 3.600 16,000,000
500 Jasper County Pollution Control Revenue
(Northern Indiana Public Service)......... A 4.200 500,000
8,000 Mt. Vernon Pollution Control Revenue
(Southern Indiana Gas Co.)
Adjustable Rate Bonds..................... 05/01/96 4.600 8,000,000
10,200 Northumberland County Industrial
Development................................ A 4.250 10,200,000
4,225 Petersburg Pollution Control Revenue
(Indianapolis Power & Light)
Tax-Exempt Commercial Paper............... 08/22/95 4.150 4,225,000
6,000 Rockport Pollution Control Revenue
(AEP Generating Station)
Adjustable Rate Bonds..................... 09/01/95 6.625 6,022,184
--------------
70,237,184
--------------
KANSAS--0.72%
11,300 Burlington Pollution Control Revenue
(Kansas Electric Power)
Tax-Exempt Commercial Paper............... 08/04/95 to 09/14/95 3.150 to 4.150 11,300,000
--------------
KENTUCKY--1.93%
3,000 Jefferson County Pollution Control Revenue
Bonds (Louisville Gas & Electric)
Tax-Exempt Commercial Paper............... 09/07/95 to 10/20/95 3.600 to 3.700 3,000,000
10,400 Pendleton County
(Association of Leasing Program)
Multi-County Tax-Exempt Commercial
Paper..................................... 07/25/95 to 08/08/95 4.000 to 4.250 10,400,000
16,815 Trimble County Pollution Control
(Louisville Gas & Electric)
Tax-Exempt Commercial Paper............... 07/28/95 to 08/25/95 4.100 to 4.150 16,815,000
--------------
30,215,000
--------------
LOUISIANA--2.85%
9,265 Louisiana Offshore Terminal Port
Authority.................................. A 4.200 9,265,000
12,000 Louisiana Public Facilities Authority
Pollution Control Revenue
(Ciba Geigy).............................. A 4.000 12,000,000
4,000 State of Louisiana
Tax-Exempt Commercial Paper............... 09/13/95 3.600 4,000,000
</TABLE>
23
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
LOUISIANA--(CONCLUDED)
$ 8,000 East Baton Rouge Pollution Control
(Exxon)................................... A 4.250 % $8,000,000
6,200 New Orleans Exhibition Hall Hotel.......... A 4.150 6,200,000
5,000 Plaquemines Port Harbor and Terminal
District (International Marine Terminal)
Adjustable Rate Bonds..................... 09/01/95 4.300 5,000,000
--------------
44,465,000
--------------
MARYLAND--2.36%
10,000 Maryland State Health and Higher Education
Facilities Revenue
(Johns Hopkins Hospital)
Tax-Exempt Commercial Paper............... 09/08/95 3.950 10,000,000
10,000 Maryland State Health and Higher Education
Facilities Revenue
(Pooled Loan Program)..................... A 4.300 10,000,000
3,000 Baltimore County Consolidated Public
Improvement
Tax-Exempt Commercial Paper............... 09/07/95 4.150 3,000,000
13,800 Howard County Public Improvement
Tax-Exempt Commercial Paper............... 07/31/95 to 08/21/95 3.950 to 4.100 13,800,000
--------------
36,800,000
--------------
MASSACHUSETTS--2.41%
2,000 Massachusetts Health & Education
(Fallon Hospital)
Tax-Exempt Commercial Paper............... 07/26/95 3.950 2,000,000
16,185 Massachusetts Health & Education
(Harvard University)...................... A 3.550 16,185,000
19,500 Massachusetts Water Resource Authority
Tax-Exempt Commercial Paper............... 07/31/95 to 09/21/95 3.550 to 3.650 19,500,000
--------------
37,685,000
--------------
MICHIGAN--2.20%
1,900 Michigan Higher Education Facilities
Authority (Pooled Hospital)............... A 4.050 1,900,000
4,900 Michigan Hospital Finance Authority
(Chelsea Community Hospital).............. A 3.900 4,900,000
4,500 Michigan Municipal Board Authority Notes... 07/03/96 4.500 4,530,330
6,000 Michigan State Building Authority
Tax-Exempt Commercial Paper............... 07/26/95 4.300 6,000,000
10,000 State of Michigan Notes.................... 09/29/95 5.000 10,021,563
3,000 Northville Township Industrial Revenue
Bonds (Thrifty Northville)................ A 4.200 3,000,000
4,070 Wayne County
(Down River Sewage)
Tax-Exempt Commercial Paper............... 08/21/95 4.250 4,070,000
--------------
34,421,893
--------------
</TABLE>
24
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
MINNESOTA--1.76%
$27,450 University of Minnesota Board of Regents
Tax-Exempt Commercial Paper............... 07/27/95 to 08/22/95 4.150 % $27,450,000
--------------
MISSISSIPPI--0.60%
3,775 Claiborne County Pollution Control Revenue
(South Mississippi Electric)
Tax-Exempt Commercial Paper............... 08/07/95 4.000 3,775,000
5,600 Harrison County Pollution Control
(Dupont).................................. A 4.200 5,600,000
--------------
9,375,000
--------------
MISSOURI--3.16%
3,500 Missouri Economic Development Export &
Infrastructural Board
(St. Louis County)
Adjustable Rate Notes..................... 08/01/95 3.950 3,500,000
13,105 Missouri Environment Pollution Control
Revenue Bonds
(Union Electric)
Tax-Exempt Commercial Paper............... 07/25/95 to 06/01/96 4.000 to 4.150 13,105,000
10,300 Missouri Health & Education Facilities
Authority
(SSM Healthcare)
Tax-Exempt Commercial Paper............... 08/25/95 to 09/25/95 3.900 10,300,000
3,100 Missouri Health & Education Facilities
Authority (St. Louis University).......... A 4.500 3,100,000
14,400 Missouri Health & Education Facilities
Authority (Washington University)......... A 4.000 to 4.600 14,400,000
3,000 Columbia Water & Electric Revenue Bonds.... A 4.250 3,000,000
2,000 Independence Water Utility Revenue Bonds
Tax-Exempt Commercial Paper............... 07/21/95 4.150 2,000,000
--------------
49,405,000
--------------
NEBRASKA--0.10%
1,610 Omaha Public Power District Electric
Tax-Exempt Commercial Paper............... 10/20/95 3.700 1,610,000
--------------
NEVADA--0.96%
15,000 Clark County Airport Improvement Revenue
Bonds...................................... A 4.200 15,000,000
--------------
NEW HAMPSHIRE--0.24%
3,700 New Hampshire Higher Education Authority
(Dartmouth College)
Adjustable Rate Bonds..................... 06/01/96 4.100 3,700,000
--------------
NEW JERSEY--0.08%
600 New Jersey Economic Development Authority
(Exxon)................................... A 4.050 600,000
700 Union County Industrial Pollution Control
(Exxon)................................... A 4.350 700,000
--------------
1,300,000
--------------
</TABLE>
25
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
NEW MEXICO--0.24%
$ 3,800 Dona Ana County Pollution Control Revenue
Bonds...................................... A 3.900 % $ 3,800,000
--------------
NEW YORK--3.56%
16,000 New York State Tax-Exempt Commercial
Paper...................................... 08/10/95 to 08/11/95 3.750 16,000,000
7,800 New York State Dormitory Authority Revenue
Bonds (Museum of Modern Art).............. A 3.900 7,800,000
700 New York State Dormitory Authority Revenue
Bonds (Oxford University Press)........... A 5.250 700,000
800 New York State Dormitory Authority Revenue
Bonds (St. Francis)....................... A 4.100 800,000
800 New York State Energy Research and
Development Authority Pollution Control
Revenue Bonds (Niagara Mohawk)............ A 4.200 800,000
10,700 City of New York General DBL Sub Series H
Tax-Exempt Commercial Paper............... 08/17/95 to 08/18/95 4.200 10,700,000
8,235 New York City.............................. A 4.000 8,235,000
10,600 New York City Water
Tax-Exempt Commercial Paper............... 07/27/95 to 08/25/95 4.150 10,600,000
--------------
55,635,000
--------------
NORTH CAROLINA--2.22%
8,900 North Carolina Education and Medicare
(Duke University)......................... A 3.950 8,900,000
4,000 North Carolina Educational Facility
(Duke University)......................... A 3.950 4,000,000
4,600 North Carolina Educational Facility
(Guilford College)........................ A 4.200 4,600,000
9,200 Charlotte Airport Revenue Bonds............ A 4.200 9,200,000
8,000 Wake County Pollution Control Revenue
(Carolina Power & Light)
Tax-Exempt Commercial Paper............... 09/08/95 4.200 8,000,000
--------------
34,700,000
--------------
NORTH DAKOTA--1.11%
17,300 Grand Forks Hospital Facilities Revenue
(United Hospital)......................... A 4.350 17,300,000
--------------
OHIO--0.26%
4,025 Montgomery County Hospital Revenue
(Miami Valley Hospital)
Tax-Exempt Commercial Paper............... 10/11/95 3.750 4,025,000
--------------
OKLAHOMA--1.49%
4,000 Oklahoma County Industrial Authority
Revenue
(Baptist Hospital)
Adjustable Rate Bonds..................... 09/01/95 4.150 4,000,000
</TABLE>
26
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
OKLAHOMA--(CONCLUDED)
$ 3,500 Oklahoma Water Resource Board
Adjustable Rate Bonds..................... 09/01/95 4.500 % $3,500,000
10,770 Tulsa Industrial Authority Hospital Revenue
(Hillcrest Hospital)...................... A 3.500 to 4.150 10,770,000
5,000 Tulsa Parking Authority Revenue
(Williams Center)
Adjustable Rate Bonds..................... 11/15/95 4.300 5,000,000
--------------
23,270,000
--------------
OREGON--1.34%
13,200 Oregon State General Obligation
(Veterans Welfare)........................ A 4.450 13,200,000
7,800 Hillsboro Higher Education
(Oregon Graduate Institute)............... A 4.200 7,800,000
--------------
21,000,000
--------------
PENNSYLVANIA--2.15%
3,500 Pennsylvania Hospital & Higher Education
(Philadelphia Childrens Hospital)......... A 4.350 3,500,000
15,830 Beaver County Pollution Control Revenue
(Duquesne Light)
Tax-Exempt Commercial Paper............... 07/27/95 to 10/10/95 4.100 to 4.500 15,830,000
8,900 Delaware County Industrial Development
Authority (Scott Paper)................... A 4.150 8,900,000
5,300 Northumberland County Industrial
Development Authority (Merck & Company)... A 4.250 5,300,000
--------------
33,530,000
--------------
TENNESEE--3.65%
5,000 Tennessee Local Development Authority
Revenue Notes............................. 05/31/96 4.750 5,037,365
3,600 Chattanooga Hamilton County................ A 4.600 3,600,000
4,000 Metropolitan Nashville Airport Authority... A 3.950 4,000,000
5,000 Metropolitan Nashville & Davidson Health &
Education Facilities Board
(Vanderbilt University)
Adjustable Rate Bonds..................... 01/15/96 5.100 5,000,000
18,040 Metropolitan Nashville & Davidson Health &
Education Facilities Board
(Baptist Hospital)
Tax-Exempt Commercial Paper............... 08/14/95 to 10/20/95 3.600 to 4.150 18,040,000
6,260 Metropolitan Nashville & Davidson Health &
Education Facilities Board
(Vanderbilt University)
Tax-Exempt Commercial Paper............... 10/11/95 3.650 6,260,000
</TABLE>
27
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
TENNESEE--(CONCLUDED)
$ 8,600 Metropolitan Nashville Industrial
(Timberlake).............................. A 4.000 % $8,600,000
6,400 Shelby County Health & Education Facilities
Revenue (Methodist Health System)
Adjustable Rate Bonds..................... 08/01/95 4.200 6,400,000
--------------
56,937,365
--------------
TEXAS--14.67%
8,500 Texas State Tax and Revenue Anticipation
Notes...................................... 08/31/95 5.000 8,511,841
16,000 Texas State Public Finance Authority
Tax-Exempt Commercial Paper............... 07/26/95 to 08/03/95 4.150 to 4.250 16,000,000
22,300 City of Austin Combined Utilities System
Tax-Exempt Commercial Paper............... 09/14/95 to 10/05/95 3.650 to 4.200 22,300,000
3,300 City of Houston
Adjustable Rate Bonds..................... 10/01/95 4.350 3,300,000
1,900 City of Houston............................ A 4.000 1,900,000
17,000 City of Houston General Obligation
Tax-Exempt Commercial Paper............... 07/19/95 to 09/22/95 3.900 to 4.200 17,000,000
7,910 Bexar County Health Facility Development
(Army Retirement Foundation).............. A 4.000 7,910,000
3,500 Brownsville Utilities
Tax-Exempt Commercial Paper............... 09/21/95 3.100 3,500,000
6,700 Port of Corpus Christi Authority
(Koch Industries)
Tax-Exempt Commercial Paper............... 09/06/95 3.600 6,700,000
3,000 Dallas Fort Worth Regional Airport
Tax-Exempt Commercial Paper............... 09/08/95 3.375 3,000,000
10,500 Dallas Waterworks & Sewer System
Tax-Exempt Commercial Paper............... 08/17/95 to 08/18/95 4.150 10,500,000
12,800 Georgetown Higher Education Finance........ A 3.900 12,800,000
16,100 Gulf Coast Pollution Control Revenue
(Exxon)
Tax-Exempt Commercial Paper............... 08/18/95 to 08/28/95 3.500 to 3.650 16,100,000
15,000 Harris County Toll Roads................... A 3.750 15,000,000
5,000 Harris County SCH Health Care
(Sisters of Charity)
Tax-Exempt Commercial Paper............... 07/20/95 4.050 5,000,000
4,100 Harris County Health Facilities
(Methodist Hospital)...................... A 4.500 4,100,000
7,900 Harris County Health Facilities
(YMCA)
Tax-Exempt Commercial Paper............... 07/13/95 4.250 7,900,000
2,900 Harris County Industrial Development Corp.
(Exxon)................................... A 4.250 2,900,000
</TABLE>
28
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
TEXAS--(CONCLUDED)
$ 8,500 Klein Industrial School District
Tax & Revenue Anticipation Notes.......... 08/30/95 4.750 % $8,496,260
19,500 Lower Colorado River Authority Series C
Tax-Exempt Commercial Paper............... 08/29/95 to 09/28/95 3.150 to 3.950 19,500,000
7,900 North Century Health Facilities
(Methodist Hospital)
Tax-Exempt Commercial Paper............... 07/25/95 4.150 7,900,000
1,700 Southwest Higher Education Authority Inc.
(Southern Methodist University)........... A 4.200 1,700,000
11,900 Tyler Health Facility
(East Texas Medical Center)
Tax-Exempt Commercial Paper............... 08/09/95 to 08/10/95 4.300 to 4.350 11,900,000
7,500 University of Texas Board of Regents
Tax-Exempt Commercial Paper............... 08/21/95 4.150 7,500,000
7,700 West Side Calhoun County Development
(British Petroleum)........................ A 4.500 7,700,000
--------------
229,118,101
--------------
UTAH--3.37%
4,500 State of Utah.............................. 07/01/95 5.750 4,500,000
1,400 Carbon County Pollution Control Revenue
(Pacificorp).............................. A 4.200 1,400,000
2,435 Emery County Utah Pollution Control Revenue
(Pacificorp) Tax-Exempt Commercial Paper.. 09/18/95 3.600 2,435,000
22,850 Intermountain Power Agency
Tax-Exempt Commercial Paper............... 07/28/95 to 09/11/95 3.300 to 4.150 22,850,000
3,750 Intermountain Power Agency
Adjustable Rate Bonds..................... 06/15/96 3.800 3,750,000
13,035 Salt Lake City Pooled Hospital Revenue
Bonds Tax-Exempt Commercial Paper......... 08/01/95 to 09/12/95 3.800 to 4.150 13,035,000
4,700 Salt Lake County Pollution Control Revenue
(British Petroleum)....................... A 4.250 to 4.500 4,700,000
--------------
52,670,000
--------------
VIRGINIA--1.37%
5,000 Virginia State Housing Development
Authority (Series D)
Adjustable Rate Bonds..................... 07/12/95 4.250 5,000,000
3,800 Henrico County Industrial Development
Authority (Health Facility)............... A 4.400 3,800,000
8,500 Norfolk Industrial Development Authority
(Norfolk Hospital Sentera)
Tax-Exempt Commercial Paper............... 09/25/95 3.600 8,500,000
</TABLE>
29
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
VIRGINIA--(CONCLUDED)
$ 3,085 Peninsula Port Dominion Authority
(Terminal)................................ A 4.250 % $3,085,000
1,000 Roanoke Industrial Development Authority
(Carilion Hospital)....................... A 4.500 1,000,000
--------------
21,385,000
--------------
WASHINGTON--1.51%
8,240 Washington Health Care Facilities
(Fred Hutchinson)......................... A 2.000 to 4.350 8,240,000
5,055 Washington Nonprofit Housing Finance
Commission (Emerald Heights).............. A 4.200 5,055,000
7,100 Port of Vancouver Refunding Revenue Bonds
(United Grain Corporation of Oregon)...... A 4.350 7,100,000
3,250 Seattle Municipal Light and Power Revenue
Tax-Exempt Commercial Paper............... 09/11/95 3.250 3,250,000
--------------
23,645,000
--------------
WEST VIRGINIA--0.29%
4,600 Marshall County Pollution Control
(British Petroleum)....................... A 4.500 4,600,000
--------------
WISCONSIN--2.42%
10,000 State of Wisconsin Operating Notes......... 06/17/96 4.500 10,070,400
3,095 Wisconsin State Health Facilities Authority
(Franciscan Sisters)...................... A 4.400 3,095,000
6,100 City of Oak Creek Pollution Control Revenue
(Wisconsin Electric Power Company)........ A 4.100 6,100,000
4,000 Milwaukee Revenue Anticipation Notes....... 08/24/95 5.000 4,007,305
9,500 New Berlin School District
Tax & Revenue Anticipation Notes.......... 08/24/95 5.000 9,510,837
5,000 Racine Unified School District
Tax & Revenue Anticipation Notes.......... 08/23/95 5.000 4,997,450
--------------
37,780,992
--------------
WYOMING--2.34%
2,100 Converse County Pollution Control Revenue
(Pacificorp).............................. A 4.500 2,100,000
3,600 Lincoln County Pollution Control
(Amoco)................................... A 4.400 3,601,757
7,200 Lincoln County Pollution Control
(Exxon)................................... A 4.250 7,200,000
6,100 Lincoln County Pollution Control
(Pacificorp).............................. A 4.500 6,100,000
2,500 Platte County Pollution Control Revenue.... A 4.350 2,500,000
</TABLE>
30
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- --------------------- --------------- --------------
<C> <S> <C> <C> <C>
WYOMING--(CONCLUDED)
$ 8,000 Platte River Power Authority Co.
Tax-Exempt Commercial Paper............... 09/13/95 3.300 % $8,000,000
7,035 Sweetwater County Pollution Control
(Pacificorp)
Tax-Exempt Commercial Paper............... 07/20/95 to 08/14/95 4.150 7,035,000
--------------
36,536,757
--------------
TOTAL INVESTMENTS (cost--$1,599,892,068, which
approximates cost for federal income tax
purposes)--102.42%.................................... 1,599,892,068
Liabilities in excess of other assets--(2.42)%......... (37,851,750)
--------------
NET ASSETS--(applicable to 1,563,026,155 shares
outstanding at $1.00 per share)--100.00%.............. $1,562,040,318
--------------
--------------
</TABLE>
------------
A--Variable Rate Demand Notes and Variable Rate Certificates of Participation
are payable on demand. The interest rates shown are the current rates as of
June 30, 1995 and reset periodically.
Weighted average maturity--52 days
See accompanying notes to financial statements
31
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
Statement of Operations
For the Year Ended June 30, 1995
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest................................................................... $ 55,770,282
--------------
EXPENSES:
Investment advisory and administration..................................... 7,340,127
Distribution fees.......................................................... 1,231,236
Transfer agency and service fees........................................... 534,227
Custody and accounting..................................................... 193,150
Federal and state registration............................................. 166,083
Legal and audit............................................................ 89,290
Reports and notices to shareholders........................................ 40,090
Directors' fees............................................................ 21,250
Other expenses............................................................. 33,873
--------------
9,649,326
--------------
NET INVESTMENT INCOME......................................................... 46,120,956
NET REALIZED GAINS FROM INVESTMENT TRANSACTIONS............................... 26,835
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $ 46,147,791
--------------
--------------
</TABLE>
--------------------------------------------------------------------------------
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JUNE 30, 1995 JUNE 30, 1994
-------------- --------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income......................................... $ 46,120,956 $ 26,838,462
Net realized gains (losses) from investment transactions...... 26,835 (142,504 )
-------------- --------------
Net increase in net assets resulting from operations.......... 46,147,791 26,695,958
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income......................................... (46,120,956 ) (26,838,462 )
-------------- --------------
NET INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS..... 134,289,509 179,164,424
-------------- --------------
Net increase in net assets..................................... 134,316,344 179,021,920
-------------- --------------
NET ASSETS:
Beginning of year............................................. 1,427,723,974 1,248,702,054
-------------- --------------
End of year................................................... $1,562,040,318 $1,427,723,974
-------------- --------------
-------------- --------------
</TABLE>
See accompanying notes to financial statements.
32
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
Notes to Financial Statements
--------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber RMA Tax-Free Fund, Inc. (the "Fund") was organized under the
laws of Maryland on July 2, 1982 and is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended, as an
open-end diversified management investment company.
Valuation and Accounting for Investments--Investments are valued at
amortized cost which approximates market value. Investment transactions are
accounted for on trade date. Realized gains and losses from investment
transactions are calculated using the identified cost method. Interest income is
recorded on an accrual basis. Premiums are amortized and discounts are accreted
as adjustments to interest income and the identified cost of securities.
The ability of the issuers of the debt securities held by the Fund to meet
their obligations may be affected by economic developments, including those
particular to a specific industry or region.
Federal Tax Status--The Fund intends to distribute all of its tax-exempt
income and any taxable income and to comply with the other requirements of the
Internal Revenue Code applicable to regulated investment companies. Accordingly,
no provision for federal income taxes is required. In addition, by distributing
during each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, the Fund intends not to be
subject to a federal excise tax. At June 30, 1995, the Fund had net capital loss
carryforwards of $857,369. These loss carryforwards are available as reductions,
to the extent provided in the regulations, of future net realized capital gains,
and will expire between June 30, 1996 and June 30, 2002. To the extent that
these losses are used to offset future capital gains, it is probable that the
gains so offset will not be distributed.
Dividends and Distributions--The Fund declares dividends on a daily basis
from net investment income. Dividends from net investment income and
distributions from realized gains from investment transactions have been
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are either
considered temporary or permanent in nature. To the extent these differences are
permanent in nature, such amounts are reclassified within the capital accounts
based on their federal tax-basis treatment; temporary differences do not require
reclassification. Net capital gains, if any, will be distributed annually, but
the Fund may make more frequent distributions of such gains, if necessary, to
maintain its net asset value per share at $1.00 or to avoid income or excise
taxes.
INVESTMENT ADVISER AND ADMINISTRATOR
The Fund's Board of Directors has approved an Investment Advisory and
Administration Contract ("Advisory Contract") with PaineWebber Incorporated
("PaineWebber"), under which PaineWebber serves as investment adviser and
administrator of the Fund. In accordance with the Advisory Contract,
33
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
Notes to Financial Statements--(continued)
--------------------------------------------------------------------------------
the Fund pays PaineWebber an investment advisory and administration fee, which
is accrued daily and paid monthly, in accordance with the following schedule:
ANNUAL
AVERAGE DAILY NET ASSETS RATE
------------------------------------------------------------------- ------
Up to $1.0 billion................................................. 0.50%
In excess of $1.0 billion up to $1.5 billion....................... 0.44
Over $1.5 billion.................................................. 0.36
At June 30, 1995, the Fund owed PaineWebber $619,427 for investment advisory
and administration fees.
In compliance with applicable state securities laws, PaineWebber will
reimburse the Fund if and to the extent that the aggregate operating expenses in
any fiscal year, exclusive of taxes, interest, brokerage fees, distribution fees
and extraordinary expenses, exceed limitations imposed by various state
regulations. Currently, the most restrictive limitation applicable to the Fund
is 2.5% of the first $30 million of average daily net assets, 2.0% of the next
$70 million and 1.5% of any excess over $100 million. For the year ended June
30, 1995, no reimbursements were required pursuant to the above limitation.
Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins"), a
wholly-owned subsidiary of PaineWebber, serves as sub-adviser and
sub-administrator of the Fund pursuant to a Sub-Advisory and Sub-Administration
Contract between PaineWebber and Mitchell Hutchins. In accordance with that
contract, PaineWebber (not the Fund) pays Mitchell Hutchins a fee, computed
daily and paid monthly, at an annual rate of 20% of the fee paid by the Fund to
PaineWebber under the Advisory Contract.
DISTRIBUTION PLAN
PaineWebber is the distributor of the Fund's shares. Under the plan of
distribution, the Fund is authorized to pay PaineWebber a monthly service fee at
the annual rate of up to 0.15% of its average daily net assets for providing
shareholder services and maintaining shareholder accounts. Currently,
PaineWebber is compensated for providing such services at the annual rate of
0.08% of the Fund's average daily net assets. At June 30, 1995, the Fund owed
PaineWebber $104,774 for such service fees.
TRANSFER AGENCY SERVICE FEES
The Fund pays PaineWebber an annual fee of $4.00 per active PaineWebber
shareholder account, plus certain out-of-pocket expenses, for services not
provided by the Fund's transfer agent. For these services for the year ended
June 30, 1995, PaineWebber earned $217,437. At June 30, 1995, the Fund owed
PaineWebber $17,820 for such shareholder service fees and reimbursement of
out-of-pocket expenses.
34
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
Notes to Financial Statements--(concluded)
--------------------------------------------------------------------------------
OTHER LIABILITIES
At June 30, 1995, the amounts payable for investments purchased and
dividends payable aggregated $47,195,800 and $1,343,418, respectively.
CAPITAL SHARE TRANSACTIONS
There are 20 billion $0.001 par value authorized shares of common stock.
Transactions in capital shares, at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
JUNE 30, 1995 JUNE 30, 1994
------------------ ------------------
<S> <C> <C>
Shares sold............................................... 8,451,980,282 7,738,451,635
Shares repurchased........................................ (8,362,807,186) (7,585,024,798)
Dividends reinvested in additional Fund shares............ 45,116,413 25,737,587
------------------ ------------------
Net increase in shares outstanding........................ 134,289,509 179,164,424
------------------ ------------------
------------------ ------------------
</TABLE>
35
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
year is presented below:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JUNE 30,
------------------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Net investment income................. 0.030 0.019 0.021 0.033 0.047
Dividends from net investment
income.............................. (0.030) (0.019) (0.021) (0.033) (0.047)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total Investment Return(1)............ 3.03% 1.88% 2.07% 3.30% 4.74%
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)..... $1,562,040 $1,427,724 $1,248,702 $1,183,719 $1,190,073
Ratio of expenses to average net
assets.............................. 0.63% 0.64% 0.65% 0.62% 0.67%
Ratio of net investment income to
average net assets.................. 3.00% 1.90% 2.06% 3.30% 4.66%
</TABLE>
---------
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and capital
gain distributions at net asset value on the payable dates, and a sale at
net asset value on the last day of each period reported.
36
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
--------------------------------------------------------------------------------
Board of Directors and Shareholders
PaineWebber RMA Tax-Free Fund, Inc.
We have audited the accompanying statements of net assets of PaineWebber RMA
Tax-Free Fund, Inc. as of June 30, 1995, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned at June
30, 1995 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
PaineWebber RMA Tax-Free Fund, Inc. at June 30, 1995, the results of their
operations for the year then ended, the changes in their net assets for each of
the two years in the period then ended, and the financial highlights for each of
the indicated periods therein, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
New York, New York
August 17, 1995
37
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
--------------------------------------------------------------------------------
Tax Information
--------------------------------------------------------------------------------
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of the Fund's fiscal year end (June 30,
1995) as to the federal tax status of distributions received by shareholders
during such fiscal year. Accordingly, we are advising you that all of the
distributions paid during the fiscal year were federally-exempt interest
dividends, none of which qualifies for the dividend received deduction available
to corporate shareholders. Since the Fund did not invest in any security which
paid interest subject to the federal alternative minimum tax for individual
taxpayers during its fiscal year, none of the dividends paid by the Fund were
subject to such tax.
Because the Fund's fiscal year is not the calendar year, another
notification will be sent in respect of calendar 1995. The second notification,
which reflects any amounts to be used by calendar year taxpayers on their
federal income tax returns, will be made in conjunction with Form 1099 DIV and
will be mailed in January 1996. Shareholders are advised to consult their own
tax advisers with respect to the tax consequences of their investment in the
Fund.
38
<PAGE>
------------------------------
DIRECTORS
E. Garrett Bewkes, Jr.,
Chairman
Meyer Feldberg
George W. Gowen
Frederic V. Malek
Frank P.L. Minard
Judith Davidson Moyers
Thomas F. Murray
------------------------------
PRINCIPAL OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Julian F. Sluyters
Vice President and Treasurer
------------------------------
ADMINISTRATOR AND
DISTRIBUTOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
------------------------------
INVESTMENT ADVISERS
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Mitchell Hutchins Asset
Management Inc.
1285 Avenue of the Americas
New York, New York 10019
------------------------------
This report is not to be used
in connection with the
offering of shares of the
Funds unless accompanied or
preceded by an effective
prospectus.
(C) 1995 PaineWebber
Incorporated
