- --------------------------------------------------------------------------------
PaineWebber
RMA Money Fund, Inc.
RMA Tax-Free Fund, Inc.
No load money market funds offering
a total of there investment
portfolios, each seeking to maximize
current income consistent with
liquidity and conversation of capital.
[DESIGN LOGO]
Semi-Annual Report
December 31, 1995
PaineWebber
<PAGE>
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February 15, 1996
Dear Shareholder,
It is widely recognized that the Federal Reserve Board achieved its goal of a
"soft landing" for the economy in 1995. In an effort to slow the pace of
economic growth, the Federal Reserve Board raised short-term interest rates
seven times between February 1994 and February 1995. However, on July 6, 1995,
the Federal Reserve Board cut the benchmark Federal Funds rate by 0.25%. This
decrease, the first in nearly three years, signaled that the Federal Reserve
Board believed that inflationary pressures had eased enough to accommodate an
adjustment in monetary policy. Citing low inflation, the Federal Reserve Board
trimmed short-term interest rates by another 0.25% on December 19, 1995 and
January 31, 1996, bringing the Federal Funds rate down to 5.25%.
Although the pace of economic growth was lackluster during the six months ended
December 31, 1995, the economic climate was favorable for investing. Stocks
achieved record-breaking highs and bonds far outperformed their historical
averages. The stock market, as measured by the Standard & Poor's 500 Index,
advanced 37.5% in 1995. The Dow Jones Industrial Average topped the 4,000 point
level in March and the 5,000 point level in November and posted its fourth best
advance since World War II. The bond market also rallied strongly during 1995,
as a declining interest rate environment prevailed for most of the year. Soaring
bond prices gave fixed income investors their third best year since the 1920s
and caused intermediate- and long-term interest rates to fall to their lowest
levels in two years. Rates on long-term U.S. Treasury bonds, for example,
declined nearly two full percentage points. Generally, as yields move lower,
bond prices increase. Coming after 1994, when the bond market had one of its
worst years on record and the Standard & Poor's 500 Index gained just 1.3%, 1995
was a strongly positive investment environment for most domestic investors.
PORTFOLIO REVIEW
PAINEWEBBER RMA MONEY MARKET PORTFOLIO
PaineWebber RMA Money Market Portfolio's net assets totalled $5.9 billion as of
December 31, 1995. The Portfolio's current yield for the seven-day period ended
December 31, 1995 was 5.21%. The Portfolio's weighted average maturity was 71
days as of December 31, 1995. In anticipation of possible interest rate cuts,
the Fund maintained a slightly longer weighted average maturity during the six
months ended December 31, 1995. Going forward, the Portfolio expects to
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 $1.1 billion as
of December 31, 1995. The Portfolio's current yield for the seven-day period
ended December 31, 1995 was 4.99%. As of December 31, 1995, the Portfolio's
weighted average maturity was 75 days.
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1
<PAGE>
<TABLE>
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<S>
PAINEWEBBER RMA TAX-FREE FUND, INC.
PaineWebber RMA Tax-Free Fund's net assets totalled $1.9 billion as of December
31, 1995. The Fund's current yield for the seven-day period ended December 31,
1995 was 3.63%. The Fund maintained a weighted average maturity of 53 days as of
December 31, 1995. In addition, the Fund did 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,
<S> <C>
/s/________________________________ /s/________________________________
DENNIS L. MCCAULEY SUSAN P. MESSINA
Managing Director and Chief Senior Vice President,
Investment Officer--Fixed Income, Mitchell Hutchins Asset Management Inc.
Mitchell Hutchins Asset Management Inc. Portfolio Manager,
PaineWebber RMA Money Fund, Inc.
DEBBIE VERMANN PETER YUEN
Portfolio Manager, Portfolio Manager,
PaineWebber RMA Tax-Free Fund, Inc. PaineWebber RMA U.S. Government Portfolio
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</TABLE>
2
<PAGE>
PaineWebber RMA Money Market Portfolio
- --------------------------------------------------------------------------------
Statement of Net Assets
December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- -------------------- ---------------- --------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--4.12%
$ 40,000 U.S. Treasury Bills................... 04/25/96 to 06/13/96 5.130 to 5.310@% $ 39,161,313
26,000 Federal Farm Credit Bank.............. 09/03/96 5.875 25,982,242
50,000 Federal Home Loan Mortgage
Corporation........................... 05/13/96 to 08/15/96 5.645 to 6.210 49,958,680
92,580 Federal National Mortgage
Association........................... 02/08/96 to 10/07/96 5.475 to 5.680 92,411,098
35,000 Student Loan Marketing Association.... 01/03/96 to 07/01/96 5.220 to 6.080 34,992,484
--------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
242,505,817
(cost--$242,505,817)..............................
--------------
BANK NOTES--11.71%
Domestic--11.03%
53,950 Bank of America Illinois.............. 01/12/96 to 03/14/96 5.700 to 5.800 53,950,000
27,000 Bank of Hawaii........................ 01/03/97 5.500 27,000,000
25,000 Bank of New York...................... 05/28/96 5.600 25,000,000
23,000 Bank One, Milwaukee N.A............... 03/07/96 6.820 23,019,474
35,000 Comerica Bank Detroit................. 05/28/96 6.180 35,025,400
67,800 FCC National Bank..................... 06/05/96 to 11/01/96 5.500 to 5.650 67,783,390
40,000 Greenwood Trust Co. .................. 01/30/96 to 02/16/96 5.780 to 5.800 40,000,000
24,850 Huntington National Bank.............. 01/02/96 5.870* 24,847,836
15,000 LaSalle National Bank................. 01/18/96 5.700 15,000,000
35,000 NationsBank of GA, N.A. .............. 06/05/96 5.650 35,000,000
90,000 NationsBank of TX, N.A. .............. 05/21/96 to 11/08/96 5.550 to 5.610 89,970,035
25,000 NBD Bank N.A. ........................ 06/06/96 5.850 25,027,883
29,900 Old Kent Bank & Trust Co. ............ 06/05/96 to 12/04/96 5.530 to 5.550 29,882,214
65,000 PNC Bank, N.A. ....................... 02/26/96 to 05/24/96 5.930 to 6.625 65,067,741
35,000 PNC Bank, N.A. ....................... 01/02/96 5.580* 34,972,997
38,000 Seattle-First National Bank........... 10/24/96 5.730 37,979,277
19,250 Wachovia Bank & Trust Co. ............ 01/24/96 5.750 19,249,944
--------------
648,776,191
--------------
Yankee--0.68%
40,000 Westdeutsche Landesbank
Girozentrale.......................... 03/01/96 6.625 39,990,647
--------------
688,766,838
TOTAL BANK NOTES (cost--$688,766,838)............. --------------
CERTIFICATES OF DEPOSIT--4.34%
Domestic--0.36%
11,300 Old Kent Bank & Trust Co. ............ 06/13/96 to 06/17/96 6.050 to 6.150 11,308,996
10,000 Republic National Bank of New York.... 02/12/96 6.540 9,998,669
--------------
21,307,665
--------------
</TABLE>
3
<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>
CERTIFICATES OF DEPOSIT--(CONCLUDED)
Yankee--3.98%
$ 54,000 Dresdner Bank AG...................... 01/08/96 to 03/15/96 6.650 to 7.400% $ 54,026,565
20,000 Industrial Bank of Japan Ltd. ........ 01/17/96 5.820 19,999,162
30,000 National Westminster Bank PLC......... 01/16/96 5.780 29,999,977
130,000 Societe Generale...................... 01/03/96 to 02/09/96 5.740 to 7.250 130,000,000
--------------
234,025,704
--------------
255,333,369
TOTAL CERTIFICATES OF DEPOSIT
(cost--$255,333,369)..............................
--------------
COMMERCIAL [email protected]%
Aerospace-Defense--1.70%
50,000 Raytheon Co. ......................... 01/04/96 5.930 49,975,291
50,000 Rockwell International Corp. ......... 02/08/96 5.660 49,701,278
--------------
99,676,569
--------------
Agriculture--0.87%
20,000 Cargill Financial Services Corp. ..... 01/26/96 5.700 19,920,834
31,000 Cargill Inc. ......................... 01/05/96 to 02/02/96 5.650 to 5.730 30,932,022
--------------
50,852,856
--------------
Asset-Backed--10.84%
162,615 Asset Securitization Cooperative
Corp. ................................ 01/09/96 to 02/23/96 5.670 to 5.770 162,086,108
141,160 Delaware Funding Corp. ............... 01/05/96 to 03/19/96 5.500 to 5.984 140,076,950
90,899 Eiger Capital Corp. .................. 01/22/96 to 01/24/96 5.750 to 5.770 90,579,224
93,500 Falcon Asset Securitization Corp. .... 01/16/96 to 01/26/96 5.670 to 5.850 93,180,173
50,000 New Center Asset Trust................ 01/19/96 5.750 49,856,250
102,135 Preferred Receivables Funding
Corp. ................................ 01/10/96 to 02/26/96 5.600 to 5.750 101,564,137
--------------
637,342,842
--------------
Auto-Truck--3.10%
48,000 Daimler-Benz North America Corp. ..... 01/10/96 to 01/12/96 5.720 to 5.770 47,925,265
100,000 General Motors Acceptance Corp. ...... 01/02/96 6.125 99,982,986
34,300 PACCAR Financial Corp. ............... 01/17/96 5.650 34,213,869
--------------
182,122,120
--------------
</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)
Banking--8.59%
$ 43,835 Abbey National North America.......... 01/08/96 to 02/01/96 5.600 to 5.680% $ 43,715,654
40,000 Bankers Trust NY Corp. ............... 01/02/96 to 02/29/96 5.660 to 5.690 39,626,989
45,000 Bankers Trust NY Corp. ............... 01/02/96 5.660* 45,000,000
43,000 BCI Funding Corp. .................... 02/09/96 to 02/27/96 5.680 42,678,607
109,000 BEX America Finance Inc. ............. 01/12/96 to 02/14/96 5.660 to 5.730 108,502,487
44,850 Cregem North America Inc. ............ 01/22/96 to 01/26/96 5.700 44,691,374
62,000 Indosuez N.A. Inc. ................... 01/03/96 to 01/10/96 5.620 to 5.800 61,947,575
109,875 MPS U.S. Commercial Paper Corp. ...... 01/16/96 to 03/13/96 5.620 to 5.740 108,987,884
10,000 Societe Generale N.A. Inc. ........... 02/20/96 5.640 9,921,667
--------------
505,072,237
--------------
Broker-Dealer--8.59%
50,000 Bear Stearns Companies, Inc. ......... 05/10/96 to 05/20/96 5.450 to 5.520 48,971,806
35,000 BT Securities Corp. .................. 01/10/96 to 03/05/96 5.530 to 5.670 34,908,319
24,800 Dean Witter, Discover & Company....... 02/12/96 5.700 24,635,080
45,000 Goldman Sachs Group LP................ 04/09/96 to 05/07/96 5.500 to 5.600 44,206,931
25,000 Lehman Brothers Holdings Inc. ........ 01/02/96 6.100 24,995,764
100,000 Merrill Lynch & Co. Inc. ............. 01/30/96 to 01/31/96 5.650 to 5.760 99,527,097
228,950 Morgan Stanley Group Inc. ............ 01/12/96 to 01/29/96 5.650 to 5.750 228,185,862
--------------
505,430,859
--------------
Business Services--1.51%
89,128 PHH Corp. ............................ 01/11/96 to 02/01/96 5.650 to 5.800 88,831,618
--------------
Chemicals--1.77%
105,715 Du Pont (E.I.) deNemours & Co. ....... 01/04/96 to 08/06/96 5.500 to 5.710 104,203,359
--------------
Computers--0.71%
17,000 Hewlett-Packard Company............... 02/08/96 5.670 16,898,255
25,000 IBM Credit Corp. ..................... 01/24/96 5.750 24,908,160
--------------
41,806,415
--------------
Conglomerate--2.19%
130,000 BTR Dunlop Finance Inc. .............. 02/06/96 to 05/15/96 5.490 to 5.670 128,856,697
--------------
Drugs & Health Care--3.07%
9,200 Bayer Corp. .......................... 01/03/96 5.720 9,197,076
64,800 Lilly (Eli) & Company................. 02/26/96 to 06/27/96 5.240 to 5.680 63,573,977
48,310 Pfizer Inc. .......................... 01/12/96 to 01/19/96 5.720 48,202,086
31,600 Warner-Lambert Co. ................... 06/25/96 to 07/24/96 5.280 to 5.300 30,698,098
29,200 Zeneca Wilmington Inc. ............... 01/16/96 5.730 29,130,285
--------------
180,801,522
--------------
</TABLE>
5
<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)
Energy--4.12%
$ 105,000 Chevron Oil Finance Co. .............. 01/10/96 to 02/05/96 5.630 to 5.750% $ 104,686,618
35,000 Exxon Asset Management Co. ........... 01/16/96 5.690 34,917,021
102,843 Exxon Imperial U.S. Inc. ............. 01/04/96 to 01/17/96 5.700 to 5.740 102,735,089
--------------
242,338,728
--------------
Finance-Conduit--7.16%
25,000 Commerzbank U.S. Finance Inc. ........ 02/21/96 5.650 24,799,896
93,079 MetLife Funding Inc. ................. 02/02/96 to 02/28/96 5.630 to 5.660 92,452,518
19,900 SBNSW (DE) Inc. ...................... 06/10/96 5.350 19,423,865
267,994 Svenska Handelsbanken Inc. ........... 01/05/96 to 04/30/96 5.400 to 5.730 265,667,487
18,955 Toronto-Dominion Holdings USA Inc. ... 01/23/96 5.705 18,888,915
--------------
421,232,681
--------------
Finance-Consumer--0.86%
50,595 Transamerica Finance Corp. ........... 02/01/96 to 02/16/96 5.650 to 5.730 50,302,385
--------------
Finance-Diversified--0.26%
15,000 Associates Corp. of North America..... 01/09/96 5.720 14,980,933
--------------
Finance-Equipment--0.76%
45,000 AT&T Capital Corp. ................... 01/11/96 to 01/26/96 5.720 44,880,833
--------------
Finance-Independent--0.54%
32,120 National Rural Utilities Cooperative
Finance Corp. ........................ 01/12/96 to 02/16/96 5.650 to 5.720 32,024,903
--------------
Finance-Subsidiary--1.11%
66,150 National Australia Funding (DE)
Inc. ................................. 01/12/96 to 05/28/96 5.410 to 5.730 65,196,851
--------------
Food & Beverage--2.19%
20,000 Allied Domecq North America Corp. .... 01/11/96 5.770 19,967,944
60,000 Campbell Soup Co. .................... 01/12/96 to 10/04/96 5.420 to 6.090 57,891,388
25,000 Coca-Cola Enterprises Inc. ........... 02/12/96 5.700 24,833,750
26,200 CPC International Inc. ............... 03/25/96 to 03/29/96 5.580 to 5.590 25,852,179
--------------
128,545,261
--------------
General Trade--0.59%
35,000 Mitsubishi International Corp. ....... 01/10/96 to 01/30/96 5.760 34,901,600
--------------
Insurance--0.76%
45,000 Prudential Funding Corp. ............. 01/08/96 to 01/09/96 5.630 to 5.780 44,946,881
--------------
Insurance-Property/Casualty--0.51%
30,000 A.I. Credit Corp. .................... 01/05/96 to 01/16/96 5.700 to 5.720 29,946,144
--------------
Metals & Mining--0.17%
10,000 U.S. Borax Inc. ...................... 02/07/96 5.670 9,941,725
--------------
Miscellaneous--1.65%
97,460 Beta Finance Inc. .................... 01/09/96 to 03/18/96 5.510 to 5.670 96,750,145
--------------
</TABLE>
6
<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)
Pollution Control--3.40%
$ 205,750 WMX Technologies Inc. ................ 03/26/96 to 09/13/96 5.170 to 5.570% $ 200,131,278
--------------
Printing & Publishing--1.36%
30,000 Gannett Co. .......................... 01/11/96 5.800 29,951,667
50,000 Reed Elsevier Inc. ................... 01/02/96 5.730 49,992,041
--------------
79,943,708
--------------
Retail--0.56%
33,200 Penney (J.C.) Funding Corp. .......... 01/30/96 to 02/22/96 5.650 to 5.690 33,000,601
--------------
Telecommunications--0.66%
39,000 BellSouth Telecommunications Inc. .... 01/09/96 to 01/10/96 5.700 38,947,592
--------------
Utility-Electric--2.20%
130,000 Southern Co. ......................... 01/18/96 to 02/22/96 5.670 to 5.720 129,206,890
--------------
Utility-Telephone--3.44%
153,000 AT&T Corp. ........................... 02/23/96 to 05/10/96 5.470 to 5.570 150,525,708
20,000 Southern New England
Telecommunications Corp. ............. 01/25/96 5.720 19,923,733
32,285 Southwestern Bell Capital Corp. ...... 02/12/96 to 03/22/96 5.500 to 5.600 32,031,515
--------------
202,480,956
--------------
4,424,697,189
TOTAL COMMERCIAL PAPER (cost--$4,424,697,189).....
--------------
SHORT-TERM CORPORATE OBLIGATIONS--5.35%
Banking--0.43%
25,000 Morgan (J.P.) & Co. Inc. ............. 05/13/96 6.200 24,999,547
--------------
Broker-Dealer--3.11%
30,000 Bear Stearns Companies Inc. .......... 07/17/96 5.780 30,000,000
15,000 Dean Witter, Discover & Company....... 02/13/96 6.075* 15,025,374
15,000 Goldman Sachs Group LP................ 01/03/96 5.530* 14,996,407
80,000 Merrill Lynch & Co. Inc. ............. 04/29/96 to 09/03/96 5.610 to 6.491 79,998,684
30,960 Merrill Lynch & Co. Inc. ............. 01/02/96 5.680* 30,960,000
12,000 Morgan Stanley Group Inc. ............ 01/02/96 5.740* 12,007,577
--------------
182,988,042
--------------
Business Services--0.44%
26,000 PHH Corp. ............................ 01/03/96 5.480* 25,991,119
--------------
Drugs and Health Care--0.17%
10,000 Pfizer Inc. .......................... 10/01/96 7.125 10,101,916
--------------
Finance-Diversified--0.43%
10,000 Associates Corp. of North America..... 10/15/96 7.500 10,122,170
15,000 CIT Group Holdings Inc. .............. 11/15/96 7.125 15,199,603
--------------
25,321,773
--------------
Miscellaneous--0.77%
25,000 Beta Finance Inc. .................... 01/16/96 7.560 25,000,000
20,000 Beta Finance Inc. .................... 01/03/96 5.250* 20,000,000
--------------
45,000,000
--------------
TOTAL SHORT-TERM CORPORATE OBLIGATIONS
314,402,397
(cost--$314,402,397).............................. --------------
</TABLE>
7
<PAGE>
PaineWebber RMA Money Market Portfolio
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Date Rate Value
- --------- -------------------- ---------------- --------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--0.60%
$ 35,220 Repurchase agreement dated 12/29/95,
with Citicorp Securities, Inc.,
collaterized by $33,780,000 U.S.
Treasury Notes, 8.000% due 01/15/97;
proceeds: $35,242,697
(cost--$35,220,000).................. 01/02/96 5.800% $ 35,220,000
--------------
5,960,925,610
TOTAL INVESTMENTS (cost--$5,960,925,610 which approximates cost for (79,838,261)
federal income tax purposes)--101.36%.................................. --------------
Liabilities in excess of other assets--(1.36)%..........................
$5,881,087,349
NET ASSETS (applicable to 5,884,604,154 Series A Common Stock ==============
outstanding at $1.00 per share)--100.00%...............................
</TABLE>
- ------------
* Variable rate securities--maturity date reflects earlier of reset date or
maturity date. The interest rates shown are the current rates as of December
31, 1995 and reset periodically.
@ Interest rates shown are discount rates.
Weighted average maturity--71 days
See accompanying notes to financial statements
8
<PAGE>
PaineWebber RMA U.S. Government Portfolio
- --------------------------------------------------------------------------------
Statement of Net Assets
December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- -------------------- -------------- --------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--58.79%
$ 413,000 U.S. Treasury Bills................... 01/18/96 to 12/12/96 5.040 to 6.620@% $ 406,250,765
220,000 U.S. Treasury Notes................... 01/15/96 to 10/31/96 4.000 to 9.250 220,036,670
--------------
626,287,435
TOTAL U.S. GOVERNMENT OBLIGATIONS --------------
(cost--$626,287,435)..............................
REPURCHASE AGREEMENTS--40.98%
11,563 Repurchase Agreement dated 12/29/95,
with Citicorp Securities, Inc.,
collateralized by $11,090,000 U.S.
Treasury Notes, 8.000% due 01/15/97;
proceeds: $11,570,452................. 01/02/96 5.800 11,563,000
45,000 Repurchase Agreement dated 12/29/95,
with Daiwa Securities America, Inc.,
collateralized by $29,330,000 U.S.
Treasury Bonds, 10.625% due 08/15/15;
proceeds: $45,029,250................. 01/02/96 5.850 45,000,000
45,000 Repurchase Agreement dated 12/29/95,
with Dresdner Securities (USA), Inc.,
collateralized by $27,995,000 U.S.
Treasury Bonds, 11.250% due 02/15/15;
proceeds: $45,029,000................. 01/02/96 5.800 45,000,000
45,000 Repurchase Agreement dated 12/29/95,
with First Chicago Capital Markets,
Inc., collateralized by $47,275,000
U.S. Treasury Bills, due 07/25/96;
proceeds: $45,029,250................. 01/02/96 5.850 45,000,000
45,000 Repurchase Agreement dated 12/29/95,
with Fuji Securities, Inc.,
collateralized by $44,430,000 U.S.
Treasury Notes, 5.875% due 07/31/97;
proceeds: $45,029,500................. 01/02/96 5.900 45,000,000
20,000 Repurchase Agreement dated 12/28/95,
with J.P. Morgan Securities, Inc.,
collateralized by $15,382,000 U.S.
Treasury Bonds, 8.500% due 02/15/20;
proceeds: $20,016,111................. 01/02/96 5.800 20,000,000
45,000 Repurchase Agreement dated 12/29/95,
with Lehman Government Securities,
Inc., collateralized by $36,555,000
U.S. Treasury Bonds, 7.875% due
02/15/21; proceeds: $45,029,200...... 01/02/96 5.840 45,000,000
45,000 Repurchase Agreement dated 12/28/95,
with Morgan Stanley Group, Inc.,
collateralized by $39,140,000 U.S.
Treasury Bonds, 7.500% due 11/15/16;
proceeds: $45,036,750................. 01/02/96 5.880 45,000,000
45,000 Repurchase Agreement dated 12/29/95,
with NationsBank, N.A. collateralized
by $44,800,000 U.S. Treasury Notes,
6.125% due 05/15/98; proceeds:
$45,029,650........................... 01/02/96 5.930 45,000,000
45,000 Repurchase Agreement dated 12/29/95,
with Nomura Securities International,
Inc., collateralized by $43,875,000
U.S. Treasury Notes, 7.375% due
11/15/97; proceeds; $45,029,500....... 01/02/96 5.900 45,000,000
</TABLE>
9
<PAGE>
PaineWebber RMA U.S. Government Portfolio
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
Principal
Amount Maturity Interest
(000) Date Rate Value
- --------- -------------------- -------------- --------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENTS--(CONCLUDED)
$ 45,000 Repurchase Agreement dated 12/29/95,
with Salomon Brothers, Inc.,
collateralized by $41,441,000 U.S.
Treasury Notes, 8.250% due 07/15/98;
proceeds: $45,029,500................. 01/02/96 5.900% $ 45,000,000
--------------
436,563,000
TOTAL REPURCHASE AGREEMENTS --------------
(cost--$436,563,000).............................. 1,062,850,435
TOTAL INVESTMENTS (cost--$1,062,850,435 which --------------
approximates cost for federal income tax $1,065,258,253
purposes)--99.77%................................. ==============
Other assets in excess of liabilities--0.23%......
NET ASSETS (applicable to 1,065,652,602 Series B
Common Stock outstanding at $1.00 per share)--100.00%....
</TABLE>
- ------------
@ Interest rates shown are discount rates.
Weighted average maturity--75 days
See accompanying notes to financial statements
10
<PAGE>
PaineWebber RMA Money Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET U.S. GOVERNMENT
PORTFOLIO PORTFOLIO
------------ ---------------
<S> <C> <C>
INVESTMENT INCOME:
Interest..................................................... $174,366,258 $26,162,157
------------ ---------------
EXPENSES:
Investment advisory and administration....................... 14,755,347 2,042,747
Transfer agency and service fees............................. 1,529,562 142,399
Federal and state registration............................... 259,234 187,348
Custody and accounting....................................... 171,675 73,299
Reports and notices to shareholders.......................... 112,776 21,087
Insurance.................................................... 90,585 15,837
Legal and audit.............................................. 53,974 28,828
Directors' fees.............................................. 4,375 4,375
Distribution fees............................................ -- 366,565
Fund acquisition expense..................................... -- 175,950
Other expenses............................................... 156,341 21,924
------------ ---------------
17,133,869 3,080,359
------------ ---------------
NET INVESTMENT INCOME......................................... 157,232,389 23,081,798
NET REALIZED GAINS FROM INVESTMENT TRANSACTIONS............... 26,263 18,528
------------ ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......... $157,258,652 $23,100,326
------------ ---------------
------------ ---------------
</TABLE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
FOR THE SIX MONTHS ENDED
DECEMBER 31, 1995 FOR THE YEAR ENDED
(UNAUDITED) JUNE 30, 1995
--------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
MONEY MARKET U.S. GOVERNMENT MONEY MARKET U.S. GOVERNMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- --------------- -------------- ---------------
FROM OPERATIONS:
Net investment income......... $ 157,232,389 $ 23,081,798 $ 230,828,434 $ 37,510,417
Net realized gains (losses)
from investment
transactions................... 26,263 18,528 (1,080,732) 79,003
-------------- --------------- -------------- ---------------
Net increase in net assets
resulting from operations... 157,258,652 23,100,326 229,747,702 37,589,420
-------------- --------------- -------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income......... (157,232,389) (23,257,748 ) (230,828,434) (37,510,417)
-------------- --------------- -------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
TRANSACTIONS................... 482,915,315 249,634,814 1,062,217,441 (39,225,757)
-------------- --------------- -------------- ---------------
Net increase (decrease) in net
assets......................... 482,941,578 249,477,392 1,061,136,709 (39,146,754)
NET ASSETS:
Beginning of period........... 5,398,145,771 815,780,861 4,337,009,062 854,927,615
-------------- --------------- -------------- ---------------
End of period................. $5,881,087,349 $1,065,258,253 $5,398,145,771 $ 815,780,861
-------------- --------------- -------------- ---------------
-------------- --------------- -------------- ---------------
</TABLE>
See accompanying notes to financial statements
11
<PAGE>
PaineWebber RMA Money Fund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements--(unaudited)
- --------------------------------------------------------------------------------
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.
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 Taxes--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 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
12
<PAGE>
PaineWebber RMA Money Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
CONCENTRATION OF RISK
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.
ACQUISITION
Effective November 20, 1995, the U.S. Government Portfolio acquired all the
net assets of PaineWebber/Kidder, Peabody Government Money Fund, Inc. ("PW/KP
Government Money Fund") pursuant to a plan of reorganization approved by PW/KP
Government Money Fund shareholders on November 10, 1995. The acquisition was
accomplished by a tax-free exchange of 236,411,466 Class B shares of the U.S.
Government Portfolio for the 236,411,466 shares of PW/KP Government Money Fund
outstanding on November 20, 1995. PW/KP Government Money Fund's net assets at
that date, valued at $236,258,548, including accumulated net realized losses of
$952 were combined with those of the U.S. Government Portfolio.
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:
<TABLE>
<CAPTION>
ANNUAL
AVERAGE DAILY NET ASSETS RATE
------------------------ ------
<S> <C>
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
</TABLE>
At December 31, 1995, the Money Market Portfolio and the U.S. Government
Portfolio owed PaineWebber $2,586,035, and $395,784 respectively, for investment
advisory and administration fees.
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
13
<PAGE>
PaineWebber RMA Money Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
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 six months ended
December 31, 1995, no reimbursements were required pursuant to the above
limitation.
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 December 31, 1995, the U.S. Government Portfolio owed
PaineWebber $73,231 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 six months
ended December 31, 1995, PaineWebber earned $617,901 and $66,739 from the Money
Market Portfolio and the U.S. Government Portfolio, respectively. At December
31, 1995, the Money Market Portfolio and the U.S. Government Portfolio owed
PaineWebber $103,500 and $25,790, respectively, for such shareholder service
fees and reimbursement of out-of-pocket expenses.
OTHER LIABILITIES
At December 31, 1995, the Money Market Portfolio and the U.S. Government
Portfolio, had dividends payable aggregating $266,457 and $31,417, respectively
and payables for investments purchased aggregating $102,103,093 for the Money
Market Portfolio.
14
<PAGE>
PaineWebber RMA Money Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 SIX MONTHS ENDED FOR THE YEAR ENDED
DECEMBER 31, 1995 JUNE 30, 1995
---------------------------------- ----------------------------------
MONEY MARKET U.S. GOVERNMENT MONEY MARKET U.S. GOVERNMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Shares sold............... 16,024,012,562 2,516,317,789 27,630,575,450 4,573,104,400
Shares issued in
connection with the
acquisition of
PW/KP Government Money
Fund.................. -- 236,411,466 -- --
Shares repurchased........ (15,702,186,101) (2,526,921,443) (26,793,531,223) (4,649,073,447)
Dividends reinvested...... 161,088,854 23,827,002 225,173,214 36,743,290
--------------- --------------- --------------- ---------------
Net increase (decrease) in
shares outstanding........ 482,915,315 249,634,814 1,062,217,441 (39,225,757)
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
SUBSEQUENT EVENTS
Since the end of the six-month period ended December 31, 1995, the Money
Market Portfolio acquired all the net assets of PaineWebber/Kidder, Peabody Cash
Reserve Fund, Inc. ("PW/KP Cash Reserve Fund") and PaineWebber/Kidder, Peabody
Premium Account Fund ("PW/KP Premium Account Fund") pursuant to a plan of
reorganization approved by PW/KP Cash Reserve Fund and PW/KP Premium Account
Fund shareholders on February 13, 1996. The acquisition was accomplished by a
taxable exchange of 881,401,323 Class A shares of Money Market Portfolio for
881,401,323 shares of PW/KP Cash Reserve Fund and a tax-free exchange of
528,420,026 Class A shares of Money Market Portfolio for 528,420,026 shares of
PW/KP Premium Account Fund outstanding on February 20, 1996. PW/KP Cash
Reserve Fund's and PW/KP Premium Account Fund's net assets at that date,
valued at $881,308,148 and $528,254,921, respectively, were combined with those
of the Money Market Portfolio.
15
<PAGE>
PaineWebber RMA Money Market Portfolio
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of Series A Common Stock outstanding throughout
each period is presented below:
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED JUNE 30,
DECEMBER 31, 1995 --------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
----------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------- ---------- ---------- ---------- ---------- ----------
Net investment income....... 0.027 0.049 0.030 0.029 0.046 0.069
Dividends from net
investment income.......... (0.027) (0.049) (0.030) (0.029) (0.046) (0.069)
----------------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------- ---------- ---------- ---------- ---------- ----------
----------------- ---------- ---------- ---------- ---------- ----------
Total investment
return(1)................... 2.71% 5.00% 2.95% 2.98% 4.56% 6.88%
----------------- ---------- ---------- ---------- ---------- ----------
----------------- ---------- ---------- ---------- ---------- ----------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's)..................... $ 5,881,087 $5,398,146 $4,337,009 $4,031,398 $4,054,344 $4,208,467
Ratio of expenses to average
net assets................. 0.58%* 0.59% 0.59% 0.59% 0.59% 0.61%
Ratio of net investment
income to average net
assets...................... 5.33%* 4.91% 2.98% 2.95% 4.57% 6.89%
</TABLE>
- ---------
* Annualized
(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. Total investment
return for the period of less than one year has not been annualized.
16
<PAGE>
PaineWebber RMA U.S. Government Portfolio
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of Series B Common Stock outstanding throughout
each period is presented below:
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED JUNE 30,
DECEMBER 31, 1995 --------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
----------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of
period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------- -------- -------- -------- -------- --------
Net investment income....... 0.026 0.046 0.027 0.028 0.044 0.066
Dividends from net
investment
income..................... (0.026) (0.046) (0.027) (0.028) (0.044) (0.066)
----------------- -------- -------- -------- -------- --------
Net asset value, end of
period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------- -------- -------- -------- -------- --------
----------------- -------- -------- -------- -------- --------
Total investment
return(1)................... 2.58% 4.67% 2.74% 2.83% 4.36% 6.59%
----------------- -------- -------- -------- -------- --------
----------------- -------- -------- -------- -------- --------
RATIOS/SUPPLEMENT DATA:
Net assets, end of period
(000's)..................... $ 1,065,258 $815,781 $854,928 $880,834 $838,023 $937,943
Ratios of expenses to
average
net assets................. 0.67%*(2) 0.63% 0.62% 0.61% 0.62% 0.64%
Ratio of net investment
income to average net
assets...................... 5.05%*(2) 4.55% 2.75% 2.80% 4.37% 6.46%
</TABLE>
- ---------
* Annualized
(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. Total investment
return for the period of less than one year has not been annualized.
(2) These ratios include non-recurring acquisition expenses of 0.04%.
17
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Net Assets
December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- ---------------- --------------
<C> <S> <C> <C> <C>
ALABAMA--2.90%
$ 2,900 Chatom Industrial Development Board 03/11/96 3.700% $ 2,900,000
Pollution Control Revenue Bonds
(National Rural Utility)
Tax-Exempt Commercial Paper..............
20,000 Macintosh Industial Development Board A 5.900 20,000,000
Pollution Control Revenue Bonds
(Ciba Geigy).............................
27,275 Port City Medical Clinic Board 02/01/96 to 05/13/96 3.650 to 3.950 27,275,000
(Mobile Infirmary Association)
Tax-Exempt Commercial Paper..............
6,000 St. Clair County Industrial Development A 5.300 6,000,000
Board --------------
(National Cement Company Inc. Project)... 56,175,000
--------------
ALASKA--0.66%
4,200 Alaska Industrial Development & Export A 5.200 4,200,000
Authority
(Alaska Hotel Property Inc.).............
4,200 Alaska Industrial Development & Export A 5.200 4,200,000
Authority
(Sheldon College)........................
4,300 Valdez Pollution Control Revenue A 5.900 4,300,000
(Exxon).................................. --------------
12,700,000
--------------
ARIZONA--0.66%
2,000 Maricopa County Industrial Development 07/31/96 4.500 2,011,598
Authority
Tax Anticipation Notes...................
10,700 Maricopa County Pollution Control 02/01/96 to 03/08/96 3.600 to 3.850 10,700,000
(Southern California Edison) --------------
Tax-Exempt Commercial Paper.............. 12,711,598
--------------
CALIFORNIA--5.42%
15,000 California Higher Education Loan Authority 05/01/96 to 07/01/96 3.900 to 4.350 15,000,000
(Student Loan)
Adjustable Rate Demand Bonds.............
3,125 Contra Costa County 07/03/96 4.500 3,137,874
Tax and Revenue Anticipation Notes.......
4,180 Grand Terrace Community Redevelopment A 3.750 4,180,000
Authority
(Multi-Family Housing)...................
9,300 Los Angeles County 07/01/96 4.500 9,332,328
Tax and Revenue Anticipation Notes.......
10,000 Los Angeles Metropolitan Transportation 04/25/96 5.000 10,043,764
Authority
Revenue Anticipation Notes...............
9,158 Los Angeles Multi-Family Housing (Studio A 5.100 9,158,000
Colony)...................................
11,000 Los Angeles Unified School District 07/03/96 4.500 11,042,649
Tax and Revenue Anticipation Notes.......
</TABLE>
18
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- ---------------- --------------
<C> <S> <C> <C> <C>
CALIFORNIA--(CONCLUDED)
$ 9,500 San Bernardino County 07/05/96 4.500% $ 9,525,534
Tax and Revenue Anticipation Notes.......
9,200 San Francisco Redevelopment Agency A 5.000 9,200,000
Multi-Family
(Bayside Village)........................
24,130 Santa Barbara County 07/05/96 4.500 24,211,182
Tax and Revenue Anticipation Notes....... --------------
104,831,331
--------------
COLORADO--2.32%
10,000 Colorado Housing Finance Authority A 5.125 10,000,000
Multi-Family Housing Revenue Bonds
(Grant Plaza Project)....................
4,550 Colorado Housing Finance Authority A 5.550 4,550,000
Multi-Family Housing Revenue Bonds
(Hamden & Estes).........................
23,000 State of Colorado 06/27/96 4.500 23,089,563
Tax and Revenue Anticipation Notes.......
7,200 Moffat County Pollution Control Revenue A 5.900 7,200,000
(Pacificorp)............................. --------------
44,839,563
--------------
CONNECTICUT--1.18%
21,600 Connecticut Industrial Development A 5.100 21,600,000
Authority
(Connecticut Light & Power)..............
1,300 Connecticut Industrial Development A 5.100 1,300,000
Authority --------------
(Independent Living)..................... 22,900,000
--------------
DELAWARE--0.65%
12,600 Delaware Economic Development Authority A 5.250 12,600,000
(Hospital Billing & Collection Service,
Ltd.).....................................
--------------
FLORIDA--7.47%
46,755 Florida Local Government Finance 02/15/96 to 04/08/96 3.500 to 3.800 46,754,800
Commission
Tax-Exempt Commercial Paper..............
29,500 City of Jacksonville Health Facilities A 5.200 29,500,000
Authority
(University Medical Center)..............
18,200 City of Orlando Waste Water System Revenue 02/06/96 to 03/11/96 3.550 to 3.900 18,200,000
Bonds
Tax-Exempt Commercial Paper..............
2,500 Jacksonville Electric Facilities Authority 03/22/96 3.650 2,500,000
Tax-Exempt Commercial Paper..............
6,200 Orange County Health Facilities Authority A 5.200 6,200,000
(Mayflower Retirement Center)............
8,000 Pinellas County Educational Facilities 03/11/96 3.450 8,000,000
Authority
Tax-Exempt Commercial Paper..............
14,900 Sarasota County Public Hospital District 02/06/96 to 05/14/96 3.700 to 3.950 14,900,000
Tax-Exempt Commercial Paper..............
</TABLE>
19
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- ---------------- --------------
<C> <S> <C> <C> <C>
FLORIDA--(CONCLUDED)
$15,565 Sunshine State Government Finance 02/07/96 to 02/23/96 3.750 to 3.800% $ 15,565,000
Commission
Tax-Exempt Commercial Paper..............
3,000 West Orange Health Facilities Authority 01/25/96 3.650 3,000,000
(Memorial Hospital) --------------
Tax-Exempt Commercial Paper.............. 144,619,800
--------------
GEORGIA--1.05%
4,194 Georgia Municipal Association A 4.950 4,194,402
Pooled Revenue Bonds.....................
6,595 Georgia Municipal Gas Authority 04/01/96 3.400 6,595,000
Tax-Exempt Commercial Paper..............
3,500 Brunswick & Glynn County Development A 5.250 3,500,000
Authority.................................
6,000 Burke County Development Authority A 4.200 6,000,000
Pollution Control --------------
(Oglethorpe Power Corp.)................. 20,289,402
--------------
IDAHO--0.36%
7,000 Custer County Pollution Control Revenue 04/01/96 3.800 7,000,000
(Amoco) --------------
Adjustable Rate Bonds....................
ILLINOIS--7.90%
4,900 Illinois Development Finance Authority A 5.700 4,900,000
Industrial Revenue
(Bridgestone/Firestone)..................
16,200 Illinois Development Finance Authority A 5.100 16,200,000
Pollution Control Revenue
(Commonwealth Edison)....................
7,000 Illinois Development Finance Authority 03/08/96 3.750 to 5.100 7,000,000
Pollution Control Revenue
(Illinois Power)
Tax-Exempt Commercial Paper..............
1,000 Illinois Educational Facilities Authority A 4.250 1,000,000
Revenue...................................
10,000 Illinois Educational Facilities Authority A 5.150 10,000,000
Revenue
(College of Optometry)...................
5,000 Illinois Educational Facilities Authority 03/07/96 4.000 5,000,000
Revenue
(Field Museum of National History)
Adjustable Rate Bonds....................
4,995 Illinois Educational Facilities Authority A 5.100 4,995,000
Revenue
(Northwestern University)................
400 Illinois Health Facilities Authority A 6.500 400,000
Revenue...................................
2,350 Illinois Health Facilities Authority 02/27/96 3.450 2,350,000
Revenue
(Alexian Brothers)
Tax-Exempt Commercial Paper..............
17,000 Illinois Health Facilities Authority 01/31/96 to 05/31/96 3.650 to 4.000 17,000,000
Revenue
(Evanston Hospital)
Adjustable Rate Bonds....................
</TABLE>
20
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- ---------------- --------------
<C> <S> <C> <C> <C>
ILLINOIS--(CONCLUDED)
$ 5,500 Illinois Health Facilities Authority A 5.700% $ 5,500,000
Revenue
(Methodist Medical Center)...............
6,900 Illinois Health Facilities Authority 02/08/96 3.800 6,900,000
Revenue
(Victory Hospital)
Adjustable Rate Bonds....................
23,040 Illinois Housing Finance Authority A 5.100 23,040,000
(Northwest Community Hospital)...........
7,000 Illinois Independent Higher Education..... A 4.250 7,000,000
7,000 Illinois State 04/12/96 4.500 7,014,251
Revenue Anticipation Notes...............
5,000 Illionois State Toll and Highway A 5.050 5,000,000
Authority.................................
10,000 Chicago O'Hare International Airport A 5.150 10,000,000
Revenue Bonds............................
5,000 City of Chicago 05/28/96 3.800 5,000,000
Equipment Tender Notes...................
6,100 Decatur Water Revenue Bonds 01/12/96 4.050 6,100,000
Tax-Exempt Commercial Paper..............
4,500 Lisle Multi-Family Housing Revenue Bonds A 5.050 4,500,000
(Ashley of Lisle Project)................
4,000 Tinley Park Multi-Family Housing Revenue A 4.000 4,000,000
Bonds --------------
(Edgewater Walk)......................... 152,899,251
--------------
INDIANA--4.95%
14,360 Hoosier City of Sullivan National Rural 01/31/96 to 03/26/96 3.400 to 3.850 14,360,000
Utilities Co-op Finance
Pollution Control Revenue Bonds
(Hoosier Energy)
Tax-Exempt Commercial Paper..............
5,000 Indianapolis Public Improvement Board..... 01/11/96 to 07/11/96 4.250 to 4.500 5,014,701
31,800 Jasper County Pollution Control Revenue 02/08/96 to 03/21/96 3.400 to 3.850 31,800,000
(Northern Indiana Public Service)
Tax-Exempt Commercial Paper..............
8,000 Mt. Vernon Pollution Control Revenue 05/01/96 4.600 8,000,000
(Southern Indiana Gas Co.)
Adjustable Rate Bonds....................
7,500 Petersburg Pollution Control Revenue 03/29/96 3.500 7,500,000
(Indianapolis Power & Light)
Tax-Exempt Commercial Paper..............
25,000 Rockport Pollution Control Revenue A 5.900 25,000,000
(AEP Generating Station).................
4,070 Wayne County Sewage 05/28/96 3.800 4,070,000
Tax-Exempt Commercial Paper.............. --------------
95,744,701
--------------
</TABLE>
21
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- ---------------- --------------
<C> <S> <C> <C> <C>
IOWA--0.76%
$14,800 Iowa Finance Authority A 5.000% $ 14,800,000
(Village Court Project).................. --------------
KANSAS--0.87%
16,900 Burlington Pollution Control Revenue 02/15/96 to 03/12/96 3.450 to 3.800 16,900,000
(Kansas Electric Power) --------------
Tax-Exempt Commercial Paper.............. 10,935,000
--------------
KENTUCKY--1.83%
10,935 Jefferson County Pollution Control Revenue 01/26/96 to 04/08/96 3.550 to 3.850
Bonds
(Louisville Gas & Electric)
Tax-Exempt Commercial Paper..............
15,100 Pendleton County 01/23/96 to 07/01/96 3.700 to 4.000 15,100,000
(Association of Multi-County Leasing
Program)
Tax-Exempt Commercial Paper..............
9,415 Trimble County Pollution Control 02/14/96 to 02/28/96 3.750 9,415,000
(Louisville Gas & Electric) --------------
Tax-Exempt Commercial Paper.............. 35,450,000
--------------
LOUISIANA--2.33%
15,865 Louisiana Offshore Terminal Port A 5.900 15,865,000
Authority.................................
12,000 Louisiana Public Facilities Authority A 5.100 12,000,000
Pollution Control Revenue
(Ciba Geigy).............................
4,100 State of Louisiana 02/23/96 3.750 4,100,000
Tax-Exempt Commercial Paper..............
4,700 New Orleans Exhibition Hall Hotel......... A 5.500 4,700,000
8,400 Parish of East Baton Rouge Pollution A 5.900 8,400,000
Control Revenue --------------
(Exxon Project).......................... 45,065,000
--------------
MARYLAND--4.57%
29,284 Maryland State Health and Higher Education 02/09/96 to 04/10/96 3.550 to 3.900 29,284,000
Facilities Revenue
(Johns Hopkins Hospital)
Tax-Exempt Commercial Paper..............
10,000 Maryland State Health and Higher Education A 4.950 10,000,000
Facilities Revenue
(Pooled Loan Program)....................
13,000 Baltimore County Consolidated Public 03/05/96 to 03/13/96 3.450 to 3.500 13,000,000
Improvement
Tax-Exempt Commercial Paper..............
26,950 Howard County Public Improvement 02/09/96 to 03/29/96 3.650 to 3.800 26,950,000
Tax-Exempt Commercial Paper..............
9,200 University of Maryland A 5.050 9,200,000
Equipment Tender Notes................... --------------
88,434,000
--------------
</TABLE>
22
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- ---------------- --------------
<C> <S> <C> <C> <C>
MASSACHUSETTS--5.39%
$13,000 Commonwealth of Massachusetts 01/01/96 3.750% $ 13,000,000
Tax-Exempt Commercial Paper..............
10,000 Massachusetts Bay Transit Authority 01/22/96 3.600 10,000,000
Tax-Exempt Commercial Paper..............
11,000 Massachusetts Health & Education 02/20/96 to 03/01/96 3.500 to 3.700 11,000,000
(Fallon Hospital)
Tax-Exempt Commercial Paper..............
20,185 Massachusetts Health & Education A 3.250 to 3.550 20,185,000
(Harvard University).....................
40,000 Massachusetts Water Resource Authority 02/13/96 to 02/26/96 3.350 to 3.750 40,000,000
Tax-Exempt Commercial Paper..............
10,000 State of Massachusetts Notes.............. 06/12/96 4.250 10,018,773
--------------
104,203,773
--------------
MICHIGAN--1.10%
7,200 Michigan Hospital Finance Authority A 5.000 7,200,000
(Chelsea Community Hospital)............. 6,020,331
6,000 Michigan Municipal Bond Authority Notes... 07/03/96 4.500 5,100,000
5,100 Delta County Economic Development A 5.900
Authority.................................
3,000 Northville Township Industrial Revenue A 5.200 3,000,000
Bond --------------
(Thrifty Northville)..................... 21,320,331
--------------
MINNESOTA--0.78%
15,125 University of Minnesota Board of Regents 01/24/96 to 02/13/96 3.800 to 3.850 15,125,000
Tax-Exempt Commercial Paper.............. --------------
MISSISSIPPI--1.14%
6,500 Perry County Pollution Control Revenue A 5.300 6,500,000
Tax-Exempt Commercial Paper..............
15,500 Harrison County Pollution Control A 5.900 15,500,000
(Dupont)................................. --------------
22,000,000
--------------
MISSOURI--2.10%
5,670 Missouri Environment Pollution Control
Revenue Bonds
(Union Electric)
Tax-Exempt Commercial Paper.............. 06/01/96 4.000 5,670,000
13,900 Missouri Health & Education Facilities A 5.000 to 6.000 13,900,000
Authority
(Washington University)..................
21,000 Missouri Health & Education Facilities 02/26/96 to 03/27/96 3.400 21,000,000
Authority --------------
(SSM Healthcare) 40,570,000
Tax-Exempt Commercial Paper.............. --------------
</TABLE>
23
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- ---------------- --------------
<C> <S> <C> <C> <C>
NEBRASKA--0.58%
$ 3,200 Omaha Public Power District Electric 03/26/96 3.400% $ 3,200,000
Tax-Exempt Commercial Paper..............
8,000 Platte River Power Authority 02/01/96 3.700 8,000,000
Tax-Exempt Commercial Paper.............. --------------
11,200,000
--------------
NEVADA--1.01%
19,600 Clark County Airport Improvement Revenue A 4.900 to 5.150 19,600,000
Bonds..................................... --------------
NEW HAMPSHIRE--0.24%
4,700 New Hampshire Higher Education Authority 06/01/96 4.100 4,700,000
(Dartmouth College) --------------
Adjustable Rate Bonds....................
NEW JERSEY--0.04%
700 New Jersey Economic Development Authority A 4.950 700,000
(Exxon).................................. --------------
NEW MEXICO--0.78%
5,000 Albuquerque Airport Revenue Bonds......... A 5.150 5,000,000
6,350 Albuquerque Gross Receipts A 3.700 6,350,000
Lodges Tax Revenues Series A.............
3,800 Dona Ana County Pollution Control Revenue A 5.100 3,800,000
Bonds..................................... --------------
15,150,000
--------------
NEW YORK--5.20%
9,000 New York State Dormitory Authority Revenue A 4.650 9,000,000
Bonds
(Metropolitan Museum of Art).............
11,750 New York State Dormitory Authority Revenue A 4.700 11,750,000
Bonds
(New York Public Library)................
8,900 New York State Dormitory Authority Revenue A 5.900 8,900,000
Bonds
(Oxford University Press)................
5,200 New York State Energy Research and A 5.300 5,200,000
Development Authority
Pollution Control Revenue Bonds
(New York State Electric and Gas)........
20,300 New York State Local Government Assistance A 4.850 20,300,000
Corp......................................
9,200 City of New York General DBL Sub Series H 02/27/96 to 04/25/96 3.350 to 3.800 9,200,000
Tax Exempt Commercial Paper..............
19,000 New York City............................. A 5.000 to 5.900 19,000,000
8,400 New York City Housing Development A 5.100 8,400,000
Authority
(East 90th Street Project)...............
8,900 Yonkers Industrial Development Authority A 3.800 8,900,000
(Consumers Union)........................ --------------
100,650,000
--------------
</TABLE>
24
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- ---------------- --------------
<C> <S> <C> <C> <C>
NORTH CAROLINA--1.51%
$ 5,600 North Carolina Education and Medicare A 4.950% $ 5,600,000
(Duke University)........................
6,000 North Carolina Educational Facility A 4.950 6,000,000
(Duke University)........................
4,600 North Carolina Educational Facility A 5.700 4,600,000
(Guilford College).......................
9,000 Charlotte Airport Revenue Bonds........... A 5.150 9,000,000
4,000 Wake County Pollution Control Revenue 02/08/96 3.800 4,000,000
(Carolina Power & Light) --------------
Tax-Exempt Commercial Paper.............. 29,200,000
--------------
OHIO--2.26%
12,500 Ohio State Air Quality Development A 5.500 12,500,000
Authority
Pollution Control Revenue................
4,000 Greater Cleveland 04/10/96 4.100 4,006,120
Bond Anticipation Notes..................
23,275 Montgomery County Hospital Revenue 01/29/96 to 04/04/96 3.550 to 3.950 23,275,000
(Miami Valley Hospital)
Tax-Exempt Commercial Paper..............
4,000 Upper Arlington Educational Facilities 04/11/96 4.200 4,005,988
Revenue --------------
Adjustable Rate Bonds.................... 43,787,108
--------------
OKLAHOMA--1.27%
6,000 Oklahoma County Industrial Authority 03/01/96 4.000 6,000,000
Revenue
(Baptist Hospital)
Adjustable Rate Bond.....................
4,715 Oklahoma Water Resource Board 03/01/96 3.950 4,715,000
Adjustable Rate Bond.....................
8,800 Tulsa Industrial Authority Hospital A 5.500 8,800,000
Revenue
(Hillcrest Hospital).....................
5,000 Tulsa Parking Authority Revenue 05/15/96 3.750 5,000,000
(Williams Center) --------------
Adjustable Rate Bond..................... 24,515,000
--------------
OREGON--1.30%
18,200 Oregon State General Obligation A 5.150 to 5.250 18,200,000
(Veterans Welfare).......................
7,000 Hillsboro Higher Education A 5.300 7,000,000
(Oregon Graduate Institute).............. --------------
25,200,000
--------------
PENNSYLVANIA--2.08%
11,830 Beaver County Pollution Control Revenue
(Duquesne Light)
Tax-Exempt Commercial Paper.............. 02/08/96 to 04/08/96 3.650 to 3.750 11,830,000
</TABLE>
25
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- ---------------- --------------
<C> <S> <C> <C> <C>
PENNSYLVANIA--(CONCLUDED)
$ 8,900 Delaware County Industrial Development A 5.000% $ 8,900,000
Authority
(Scott Paper)............................
4,000 Northeastern Pennsylvania Hospital 03/12/96 3.650 4,000,000
Authority Revenue
Tax-Exempt Commercial Paper..............
15,500 Northumberland County Industrial A 5.250 15,500,000
Development Authority --------------
(Merck & Company)........................ 40,230,000
--------------
SOUTH CAROLINA--0.32%
6,200 Greenville Industrial Development Board... A 5.000 6,200,000
--------------
TENNESSEE--3.16%
7,000 Tennessee Local Development Authority 05/31/96 4.750 7,023,579
Revenue Notes.............................
3,000 Chattanooga Hamilton County............... A 3.800 3,000,000
4,200 Memphis Shelby County Airport Authority... 02/29/96 3.850 4,200,000
4,000 Metropolitan Nashville Airport A 5.150 4,000,000
Authority.................................
17,000 Metropolitan Nashville & Davidson Health & 01/17/96 to 02/14/96 3.750 to 4.000 17,000,000
Education
(Baptist Hospital)
Tax-Exempt Commercial Paper..............
5,000 Metropolitan Nashville & Davidson Health & 01/15/96 5.100 5,000,000
Education
(Vanderbilt University)
Adjustable Rate Bond.....................
8,600 Metropolitan Nashville Industrial A 4.850 8,600,000
(Timberlake).............................
12,310 Shelby County Health & Education 08/01/96 3.900 12,310,000
Facilities Revenue --------------
(Methodist Health System) 61,133,579
Adjustable Rate Bonds.................... --------------
TEXAS--15.74%
5,000 Texas State Series 1995-B 08/20/96 3.650 5,000,000
Tax-Exempt Commercial Paper..............
20,780 State of Texas 08/30/96 4.750 20,888,105
Tax and Revenue Anticipation Notes.......
19,933 City of Austin Combined Utilities System 01/26/96 to 04/08/96 3.650 to 3.850 19,933,000
Tax-Exempt Commercial Paper..............
3,300 City of Houston 04/01/96 3.500 3,300,000
Adjustable Rate Bonds....................
21,000 City of Houston 01/25/96 to 03/07/96 3.400 to 3.750 21,000,000
Tax-Exempt Commercial Paper..............
7,910 Bexar County Health Facility Development A 5.000 7,910,000
(Army Retirement Foundation).............
3,500 Bowie County Industrial Development A 6.500 3,500,000
Corp......................................
5,500 Brownsville Utilities 01/30/96 to 03/29/96 3.700 to 3.850 5,500,000
Tax-Exempt Commercial Paper..............
9,900 Port of Corpus Christi Authority
(Koch Industries)
Tax-Exempt Commercial Paper.............. 01/12/96 to 03/25/96 3.650 to 3.750 9,900,000
</TABLE>
26
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- ---------------- --------------
<C> <S> <C> <C> <C>
TEXAS--(CONCLUDED)
$ 1,985 Dallas Fort Worth Refunding and 03/01/96 5.300% $ 1,990,680
Improvement...............................
19,000 Dallas Rapid Transportation Authority 02/08/96 to 03/08/96 3.500 to 3.750 19,000,000
Revenue
Tax-Exempt Commercial Paper..............
8,830 Dallas Waterworks & Sewer System 02/07/96 to 03/22/96 3.650 to 3.750 8,830,000
Tax-Exempt Commercial Paper..............
8,000 Guadaloupe Blanco River Authority......... A 3.600 8,000,000
12,700 Gulf Coast Pollution Control Revenue A 3.700 to 5.900 12,700,000
(Amoco)..................................
16,100 Gulf Coast Pollution Control Revenue 01/29/96 to 03/01/96 3.450 to 3.650 16,100,000
(Exxon)
Tax-Exempt Commercial Paper..............
18,000 Harris County Toll Roads.................. A 4.950 18,000,000
7,000 Harris County Health Facilities A 5.300 7,000,000
(Methodist Hospital).....................
8,900 Harris County Health Facilities 04/18/96 3.750 8,900,000
(YMCA)
Tax-Exempt Commercial Paper..............
41,100 Lower Colorado River Authority Series C 02/08/96 to 04/09/96 3.400 to 3.800 41,100,000
Tax-Exempt Commercial Paper..............
12,300 North Central Health Facilities 02/12/96 to 02/20/96 3.850 12,300,000
(Methodist Hospital)
Tax-Exempt Commercial Paper..............
14,300 Tyler Health Facility 01/29/96 to 04/12/96 3.600 to 3.900 14,300,000
(East Texas Medical Center)
Tax-Exempt Commercial Paper..............
39,447 University of Texas Board of Regents 02/13/96 to 05/10/96 3.500 to 3.800 39,447,000
Tax-Exempt Commercial Paper.............. --------------
304,598,785
--------------
UTAH--3.57%
9,300 Emery County Pollution Control Revenue 02/01/96 3.800 9,300,000
(Pacificorp)
Tax-Exempt Commercial Paper..............
13,000 Intermountain Power Agency 03/15/96 to 06/15/96 3.750 to 3.800 13,000,000
Adjustable Rate Bonds....................
11,475 Intermountain Power Agency 03/11/96 to 03/27/96 3.550 11,475,000
Tax-Exempt Commercial Paper..............
3,400 Provo City Housing Authority.............. A 5.400 3,400,000
21,840 Salt Lake City Pooled Hospital Revenue 01/30/96 3.750 21,840,000
Bonds
Tax-Exempt Commercial Paper..............
10,000 Salt Lake City Transportation Authority 06/28/96 4.250 10,025,800
Tax-Exempt Commercial Paper.............. --------------
69,040,800
--------------
VERMONT--0.74%
14,300 State of Vermont 03/21/96 to 04/30/96 3.550 14,300,000
Tax-Exempt Commercial Paper.............. --------------
</TABLE>
27
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- ---------------- --------------
<C> <S> <C> <C> <C>
VIRGINIA--0.37%
$ 2,170 Virginia State Housing Development 08/01/96 5.625% $ 2,197,445
Authority (Series D)
Adjustable Rate Bonds....................
5,000 Norfolk Industrial Development Authority 03/26/96 3.550 5,000,000
(Norfolk Hospital Sentera) --------------
Tax-Exempt Commercial Paper.............. 7,197,445
--------------
WASHINGTON--1.66%
10,200 Washington Health Care Facilities A 6.000 10,200,000
(Fred Hutchinson)........................
7,100 Port of Vancouver Refunding Revenue Bonds A 5.350 7,100,000
(United Grain Corporation of Oregon).....
14,800 Snohomish Public Utility District......... A 5.150 14,800,000
--------------
32,100,000
--------------
WEST VIRGINIA--0.12%
2,300 West Virginia Hospital Finance A 5.000 2,300,000
Authority................................. --------------
WISCONSIN--1.15%
15,000 State of Wisconsin Operating Notes........ 06/17/96 4.500 15,051,126
6,100 City of Oak Creek Pollution Control A 5.000 6,100,000
Revenue
(Wisconsin Electric Power Company).......
1,000 Milwaukee Revenue Anticipation Notes 09/01/96 5.400 1,012,317
(Metropolitan Sewer)..................... --------------
22,163,443
--------------
WYOMING--1.04%
7,360 Lincoln County Pollution Control A 6.100 7,360,000
(Pacificorp).............................
8,700 Platte County Pollution Control Revenue... A 6.000 8,700,000
4,000 Unita County Pollution Control Revenue 12/01/96 3.980 4,007,725
(Amoco) --------------
Adjustable Rate Bonds.................... 20,067,725
--------------
TOTAL INVESTMENTS--(cost--$1,945,212,635 which
approximates cost for federal income tax
purposes)--100.53%.................................... 1,945,212,635
]Liabilities in excess of other assets--(0.53)%....... (10,235,248)
--------------
NET ASSETS--(applicable to 1,936,308,544 shares
outstanding at $1.00 per share)--100.00%............. $1,934,977,387
--------------
--------------
</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
December 31, 1995 and reset periodically.
Weighted average maturity--53 days
See accompanying notes to financial statements
28
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest..................................................................... $34,202,315
-----------
EXPENSES:
Investment advisory and administration....................................... 4,134,373
Distribution fees............................................................ 720,161
Transfer agency and service fees............................................. 249,023
Fund acquisition expense..................................................... 222,750
Custody and accounting....................................................... 101,788
Federal and state registration............................................... 94,909
Legal and audit.............................................................. 72,757
Reports and notices to shareholders.......................................... 57,144
Directors' fees.............................................................. 10,625
Other expenses............................................................... 55,305
-----------
5,718,835
-----------
NET INVESTMENT INCOME........................................................... 28,483,480
NET REALIZED GAINS FROM INVESTMENT TRANSACTIONS................................. 6,290
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $28,489,770
-----------
-----------
</TABLE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
DECEMBER 31, 1995 ENDED
(UNAUDITED) JUNE 30, 1995
----------------- --------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income..................................... $ 28,483,480 $ 46,120,956
Net realized gains from investment transactions........... 6,290 26,835
----------------- --------------
Net increase in net assets resulting from operations...... 28,489,770 46,147,791
----------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income..................................... (28,706,230) (46,120,956 )
----------------- --------------
NET INCREASE IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS............................................... 373,153,529 134,289,509
----------------- --------------
Net increase in net assets................................. 372,937,069 134,316,344
----------------- --------------
NET ASSETS:
Beginning of period....................................... 1,562,040,318 1,427,723,974
----------------- --------------
End of period............................................. $ 1,934,977,387 $1,562,040,318
----------------- --------------
----------------- --------------
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements--(unaudited)
- --------------------------------------------------------------------------------
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.
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.
CONCENTRATION OF RISK
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.
ACQUISITION
Effective November 20, 1995, the Fund acquired all the net assets of
PaineWebber/Kidder, Peabody Tax-Exempt Money Fund, Inc. ("PW/KP Tax-Exempt Money
Fund") pursuant to a plan of reorganization approved by PW/KP Tax-Exempt Money
Fund shareholders on November 10, 1995.
30
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The acquisition was accomplished by a tax-free exchange of 395,167,695 shares of
the Fund for 395,167,695 shares of PW/KP Tax-Exempt Money Fund outstanding on
November 20, 1995. PW/KP Tax-Exempt Money Fund's net assets at that date, valued
at $395,038,835, including accumulated net realized losses of $2,134, were
combined with those of the Fund.
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, the Fund
pays PaineWebber an investment advisory and administration fee, which is accrued
daily and paid monthly, in accordance with the following schedule:
<TABLE>
<CAPTION>
ANNUAL
AVERAGE DAILY NET ASSETS RATE
- ------------------------------------------------------------------- ------
<S> <C>
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
</TABLE>
At December 31, 1995, the Fund owed PaineWebber $800,374 for investment
advisory and administration fees.
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.
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 six months ended
December 31, 1995, no reimbursements were required pursuant to the above
limitation.
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
31
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
average daily net assets. At December 31, 1995, the Fund owed PaineWebber
$143,981 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 six months
ended December 31, 1995, PaineWebber earned $108,804. At December 31, 1995, the
Fund owed PaineWebber $17,753 for such shareholder service fees and
reimbursement of out-of-pocket expenses.
OTHER LIABILITIES
At December 31, 1995, the amounts payable for investments purchased and
dividends payable aggregated $18,795,878 and $73,984, 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 SIX MONTHS ENDED FOR THE YEAR ENDED
DECEMBER 31, 1995 JUNE 30, 1995
------------------------ ------------------
<S> <C> <C>
Shares sold.......................................... 4,551,644,293 8,451,980,282
Shares issued in connection with the acquisition of
PW/KP Tax Exempt Money Fund.......................... 395,167,695 --
Shares repurchased................................... (4,603,116,161) (8,362,807,186)
Dividends reinvested................................. 29,457,702 45,116,413
------------------------ ------------------
Net increase in shares outstanding................... 373,153,529 134,289,509
------------------------ ------------------
------------------------ ------------------
</TABLE>
32
<PAGE>
PaineWebber RMA Tax-Free Fund, Inc.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED JUNE 30,
DECEMBER 31, 1995 ------------------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
----------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------- ---------- ---------- ---------- ---------- ----------
Net investment
income............... 0.016 0.030 0.019 0.021 0.033 0.047
Dividends from net
investment income.... (0.016) (0.030) (0.019) (0.021) (0.033) (0.047)
----------------- ---------- ---------- ---------- ---------- ----------
Net asset value, end
of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------- ---------- ---------- ---------- ---------- ----------
----------------- ---------- ---------- ---------- ---------- ----------
Total investment
return(1)............ 1.63% 3.03% 1.88% 2.07% 3.30% 4.74%
----------------- ---------- ---------- ---------- ---------- ----------
----------------- ---------- ---------- ---------- ---------- ----------
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (000's)..... 1,$934,977 $1,562,040 $1,427,724 $1,248,702 $1,183,719 $1,190,073
Ratio of expenses to
average net assets... 0.64%*(2) 0.63% 0.64% 0.65% 0.62% 0.67%
Ratio of net
investment income
to average net
assets............... 3.17%*(2) 3.00% 1.90% 2.06% 3.30% 4.66%
</TABLE>
- ---------
* Annualized
(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. Total investment
return for periods of less than one year have not been annualized.
(2) These ratios include non-recurring acquisition expenses of 0.02%.
33
<PAGE>
------------------------------
DIRECTORS
E. Garrett Bewkes, Jr.,
Chairman
Meyer Feldberg
George W. Gowen
Frederic V. Malek
Judith Davidson Moyers
------------------------------
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
------------------------------
INVESTMENT ADVISER,
ADMINISTRATOR AND
DISTRIBUTOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
------------------------------
SUB-ADVISER AND
SUB-ADMINISTRATOR
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.
The financial information
included herein is taken from
the records of the Funds
without examination by
independent accountants who do
not express an opinion
thereon.
(C) 1996 PaineWebber
Incorporated
Recycled Paper
