<PAGE>
PaineWebber Retirement Money Fund
- --------------------------------------------------------------------------------
Statement of Net Assets
December 31, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- -------------- ------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--9.02%
$ 10,000 U.S. Treasury Bills..... 01/08/98 5.190%@ $ 9,475,233
10,000 U.S. Treasury Notes..... 02/28/97 6.875 10,027,847
15,000 Federal Farm Credit
Bank.................... 03/03/97 4.950 14,993,767
15,000 Federal Farm Credit
Bank.................... 01/02/97 5.355* 14,998,487
101,800 Federal Home Loan Bank.. 03/20/97 to 12/26/97 5.400 to 6.050 101,797,733
13,400 Federal Home Loan Bank.. 03/20/97 5.582* 13,400,000
20,000 Federal National
Mortgage Association.... 02/14/97 4.780 19,996,754
10,000 Federal National
Mortgage Association.... 01/07/97 5.420* 9,995,788
46,000 Student Loan Marketing
Association............. 07/03/97 to 01/08/98 5.750 to 6.070 46,000,000
102,500 Student Loan Marketing
Association............. 01/07/97 5.310 to 5.420* 102,488,776
------------
Total U.S. Government and Agency
Obligations
(cost--$343,174,385).............. 343,174,385
------------
BANK NOTES--7.65%
DOMESTIC-7.65%
43,000 Bank of America
Illinois................ 01/08/97 to 12/29/97 5.410 to 5.850 43,001,557
20,000 Bank of Hawaii.......... 01/03/97 5.500 20,000,147
45,000 Comerica Bank--Detroit . 07/11/97 to 08/13/97 5.770 to 6.150 45,004,448
25,000 FCC National Bank....... 05/12/97 to 07/18/97 5.500 to 6.000 25,000,385
18,000 FCC National Bank....... 01/02/97 5.360* 18,000,000
10,000 Huntington National
Bank.................... 12/11/97 5.500 9,984,785
17,300 Key Bank of New York.... 11/04/97 5.600 17,300,977
5,000 Morgan Guaranty Trust
Company................. 01/15/97 5.250 5,000,171
54,850 PNC Bank, N.A........... 01/02/97 to 01/07/97 5.245 to 5.503* 54,843,656
15,000 Society National Bank... 01/10/97 5.525* 14,998,748
23,000 Wachovia Bank of North
Carolina................ 01/07/97 to 04/14/97 5.360 to 6.050 23,011,610
15,000 Wachovia Bank of North
Carolina................ 01/03/97 5.438* 14,999,908
------------
Total Bank Notes (cost--
$291,146,392)..................... 291,146,392
------------
BANKERS ACCEPTANCES--0.66%
YANKEE-0.66%
25,150 Bank of Tokyo-Mitsubishi
Limited (cost--
$25,078,978)............ 01/03/97 to 01/31/97 5.360 to 5.440 25,078,978
------------
CERTIFICATES OF DEPOSIT--20.55%
DOMESTIC-1.11%
42,000 Bankers Trust New York
Corporation............. 01/07/97 5.470 to 5.520* 41,974,940
------------
EURODOLLAR-0.26%
10,000 Sanwa Bank Limited...... 01/27/97 5.520 10,000,071
------------
YANKEE-19.18%
81,000 ABN-AMRO Bank N.V....... 02/18/97 to 12/23/97 5.500 to 5.650 80,961,033
77,000 Bank of Tokyo-Mitsubishi
Limited................. 01/06/97 to 03/06/97 5.450 to 5.600 77,000,912
10,000 Bayerische Vereinsbank
AG...................... 12/04/97 5.500 9,986,562
10,000 Commerzbank AG.......... 01/21/97 5.520 10,000,104
</TABLE>
3
<PAGE>
PaineWebber Retirement Money Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- -------------- ------------
<C> <S> <C> <C> <C>
CERTIFICATES OF DEPOSIT--(concluded)
YANKEE-(CONCLUDED)
$ 10,000 Den Danske Bank A/S..... 02/03/97 5.400% $ 10,000,000
25,000 Deutsche Bank AG........ 10/24/97 to 11/17/97 5.780 to 5.830 25,000,000
87,000 Fuji Bank Limited....... 01/03/97 to 01/22/97 5.630 to 5.910 87,000,164
31,000 Industrial Bank of Japan
Limited................. 01/03/97 to 01/09/97 5.610 31,000,040
122,000 Sanwa Bank Limited...... 01/13/97 to 03/17/97 5.470 to 5.650 122,000,527
109,000 Societe Generale........ 04/01/97 to 11/12/97 5.600 to 6.090 109,008,331
133,000 Sumitomo Bank Limited... 01/02/97 to 01/27/97 5.580 to 5.920 133,003,195
35,000 Westpac Banking
Corporation............. 02/26/97 to 03/19/97 5.080 to 5.610 34,998,631
------------
729,959,499
------------
Total Certificates of Deposit (cost
-- $781,934,510).................. 781,934,510
------------
COMMERCIAL [email protected]%
AEROSPACE/DEFENSE-0.82%
31,259 Raytheon Company........ 01/13/97 to 01/16/97 5.380 to 5.400 31,193,809
------------
ASSET-BACKED-7.10%
35,000 Asset Securitization
Cooperative Corporation. 01/15/97 to 03/19/97 5.310 to 5.340 34,816,367
20,000 Eiger Capital
Corporation............. 01/10/97 5.340 19,973,300
18,475 Falcon Asset
Securitization
Corporation............. 01/02/97 5.430 18,472,213
20,000 New Center Asset Trust.. 01/29/97 to 02/27/97 5.300 to 5.420 19,873,928
44,725 Preferred Receivables
Funding Corporation..... 01/07/97 to 02/20/97 5.330 to 5.450 44,585,358
132,830 Triple-A One Funding
Corporation............. 01/10/97 to 01/28/97 5.400 to 5.720 132,459,989
------------
270,181,155
------------
AUTO & TRUCK-3.41%
30,000 Daimler-Benz North
America Corporation..... 02/12/97 to 03/26/97 5.320 to 5.370 29,718,950
100,000 General Motors
Acceptance Corporation.. 01/02/97 7.350 99,979,583
------------
129,698,533
------------
BANKING-8.48%
10,000 Abbey National North
America................. 03/03/97 5.300 9,910,194
36,600 B.B.V. Finance (DE)
Incorporated............ 01/14/97 to 01/22/97 5.310 to 5.420 36,500,315
30,000 BCI Funding Corporation. 01/07/97 to 02/12/97 5.320 to 5.350 29,893,525
25,000 BEX America Finance
Incorporated............ 01/16/97 to 01/22/97 5.310 to 5.330 24,935,713
10,000 BHF Finance (DE)
Incorporated............ 02/18/97 5.300 9,929,333
15,000 Canadian Imperial
Holdings Incorporated... 01/10/97 5.330 14,980,013
30,000 Den Danske Incorporated. 01/09/97 to 02/20/97 5.380 to 5.420 29,869,850
62,000 San Paolo U.S. Financial
Company................. 01/08/97 to 03/06/97 5.330 to 5.400 61,726,196
13,000 Suntrust Banks
Incorporated............ 01/15/97 5.400 12,972,700
92,260 Unifunding Incorporated. 01/06/97 to 04/21/97 5.330 to 6.400 91,930,398
------------
322,648,237
------------
BROKER/DEALER-7.32%
24,900 BT Securities
Corporation............. 01/14/97 to 01/22/97 5.360 to 5.420 24,833,536
100,000 Lehman Brothers Holdings
Incorporated............ 01/02/97 to 05/14/97 5.360 to 7.200 99,421,422
</TABLE>
4
<PAGE>
PaineWebber Retirement Money Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- -------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER@--(continued)
BROKER/DEALER-(CONCLUDED)
$ 50,000 Merrill Lynch & Company
Incorporated............ 01/16/97 to 01/24/97 5.330 to 5.380% $ 49,842,853
105,000 Morgan Stanley Group
Incorporated............ 01/15/97 to 05/02/97 5.320 to 5.600 104,381,422
-------------
278,479,233
-------------
CONGLOMERATE-1.64%
50,000 BTR Dunlop Finance
Incorporated............ 01/02/97 7.050 49,990,208
12,391 Minnesota Mining &
Manufacturing Company... 01/28/97 5.300 12,341,746
-------------
62,331,954
-------------
CONSUMER PRODUCTS-0.75%
28,500 Rubbermaid Incorporated. 01/09/97 to 01/21/97 5.330 to 5.420 28,433,175
-------------
DRUGS, HEALTHCARE-0.78%
5,000 Bayer Corporation....... 02/13/97 5.320 4,968,228
10,000 Lilly (Eli) & Company... 02/13/97 5.300 9,936,694
15,000 Pfizer Incorporated..... 03/05/97 5.300 14,860,875
-------------
29,765,797
-------------
ELECTRONICS-1.98%
50,000 Motorola Credit
Corporation............. 01/02/97 6.750 49,990,625
15,400 Sony Capital
Corporation............. 01/02/97 5.440 15,397,673
10,000 Toshiba America
Incorporated............ 02/11/97 5.340 9,939,183
-------------
75,327,481
-------------
ENERGY-1.00%
17,113 Exxon Imperial U.S.
Incorporated............ 01/08/97 5.370 17,095,131
21,000 Koch Industries
Incorporated............ 01/02/97 7.000 20,995,917
-------------
38,091,048
-------------
ENTERTAINMENT-0.39%
15,000 Walt Disney Company..... 03/14/97 5.230 14,843,100
-------------
FINANCE-CONDUIT-3.92%
50,000 Commerzbank U.S. Finance
Incorporated............ 01/31/97 5.550 49,768,750
4,500 Compagnie Bancaire...... 01/15/97 5.350 4,490,638
17,225 Metlife Funding
Incorporated............ 02/13/97 5.330 17,115,339
15,000 SBNSW (DE) Incorporated. 01/02/97 5.400 14,997,750
31,000 Svenska Handelsbanken
Incorporated............ 01/13/97 to 03/27/97 5.360 to 5.490 30,798,769
31,905 UBS Finance (DE)
Incorporated............ 01/09/97 to 01/10/97 5.400 to 5.420 31,864,869
-------------
149,036,115
-------------
FINANCE-DIVERSIFIED-0.65%
25,000 Associates Corporation
of North America........ 01/16/97 5.380 24,943,958
-------------
FINANCE-SUBSIDIARY-2.06%
20,000 Creditanstalt Finance
Incorporated............ 01/08/97 5.420 19,978,922
20,000 Dresdner U.S. Finance
Incorporated............ 01/16/97 5.430 19,954,750
</TABLE>
5
<PAGE>
PaineWebber Retirement Money Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- --------------- --------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER@--(concluded)
FINANCE-SUBSIDIARY-(CONCLUDED)
$ 19,700 National Australia
Funding (DE)
Incorporated............ 01/03/97 to 01/06/97 5.420 to 5.450% $ 19,689,647
19,000 Pitney Bowes Credit
Corporation............. 03/06/97 5.600 18,810,844
--------------
78,434,163
--------------
FOOD, BEVERAGE & TOBACCO-2.37%
65,800 American Brands
Incorporated............ 01/07/97 to 04/14/97 5.290 to 5.420 65,285,368
20,000 B.A.T. Capital
Corporation............. 01/16/97 5.420 19,954,833
5,000 Coca-Cola Company....... 01/13/97 5.370 4,991,050
--------------
90,231,251
--------------
GENERAL TRADE-2.74%
104,845 Mitsubishi International
Corporation............. 01/07/97 to 03/03/97 5.320 to 6.250 104,460,047
--------------
INSURANCE-0.42%
15,894 ITT Hartford Group
Incorporated............ 01/23/97 5.440 15,841,161
--------------
MACHINE & MACHINE TOOLS-0.31%
12,000 Caterpillar Financial
Services Corporation.... 01/03/97 5.320 11,996,453
--------------
MISCELLANEOUS-1.90%
72,500 Beta Finance
Incorporated............ 01/06/97 to 04/03/97 5.300 to 5.500 72,149,739
--------------
OIL EQUIPMENT & SERVICES-0.42%
16,100 Colonial Pipeline
Company................. 02/04/97 to 02/18/97 5.300 to 5.350 15,996,498
--------------
PRINTING, PUBLISHING-1.19%
20,000 Gannett Company......... 01/14/97 5.380 19,961,144
10,400 McGraw-Hill Companies
Incorporated (The)...... 01/30/97 5.410 10,354,676
15,000 Reed Elsevier
Incorporated............ 02/07/97 5.300 14,918,292
--------------
45,234,112
--------------
Total Commercial Paper (cost --
$1,889,317,019)................... 1,889,317,019
--------------
CORPORATE OBLIGATIONS--11.99%
BANKING-1.58%
40,000 Bankers Trust New York
Corporation............. 01/02/97 5.690 to 5.740* 40,000,000
20,000 NationsBank Corporation. 02/15/97 7.500 20,053,953
--------------
60,053,953
--------------
BROKER-DEALER-6.46%
140,900 Bear Stearns Companies
Incorporated............ 01/09/97 to 08/12/97 5.160 to 6.050 140,902,258
25,000 Bear Stearns Companies
Incorporated............ 01/02/97 5.613* 25,000,000
20,000 Merrill Lynch & Company
Incorporated............ 03/17/97 to 05/12/97 5.560 to 5.900 20,000,000
50,000 Merrill Lynch & Company
Incorporated............ 01/02/97 to 01/07/97 5.430 to 5.520* 49,997,556
10,000 Morgan Stanley Group
Incorporated............ 02/03/97 7.790 10,024,026
--------------
245,923,840
--------------
</TABLE>
6
<PAGE>
PaineWebber Retirement Money Fund
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- -------------- --------------
<C> <S> <C> <C> <C>
CORPORATE OBLIGATIONS--(concluded)
BUSINESS SERVICES-0.66%
$ 25,000 PHH Corporation......... 01/02/97 5.330*% $ 24,999,713
--------------
COMPUTER-0.26%
10,000 IBM Credit Corporation.. 10/07/97 5.800 9,999,769
--------------
FINANCE-CONSUMER-0.11%
4,100 Household Finance
Corporation............. 01/07/97 5.520* 4,099,441
--------------
FINANCE-DIVERSIFIED-0.83%
6,750 Associates Corporation
of North America........ 08/11/97 6.710 6,796,911
25,000 CIT Group Holdings
Incorporated............ 01/02/97 5.330 to 5.350* 24,988,386
--------------
31,785,297
--------------
FOOD, BEVERAGE & TOBACCO-0.39%
14,400 Philip Morris Companies
Incorporated............ 05/01/97 to 12/01/97 9.250 to 9.750 14,763,155
--------------
MISCELLANEOUS-1.70%
49,000 Beta Finance
Incorporated............ 03/18/97 to 12/10/97 5.550 to 6.080 48,999,470
15,550 Beta Finance
Incorporated............ 01/07/97 5.500* 15,550,000
--------------
64,549,470
--------------
Total Corporate Obligations (cost--
$456,174,638)..................... 456,174,638
--------------
REPURCHASE AGREEMENTS--0.84%
12,120 Repurchase agreement
dated 12/31/96 with
Citicorp Securities,
Inc., collateralized by
$12,335,000 U.S.
Treasury Bonds, 6.500%
due 11/15/26; proceeds:
$12,124,040............ 01/02/97 6.000 12,120,000
20,000 Repurchase agreement
dated 12/31/96 with
Daiwa Securities
America, Inc.,
collateralized by
$19,383,000 U.S.
Treasury Notes, 7.125%
due 02/29/00; proceeds:
$20,007,500............ 01/02/97 6.750 20,000,000
--------------
Total Repurchase Agreements (cost--
$32,120,000)...................... 32,120,000
--------------
Total Investments (cost--
$3,818,945,922 which approximates
cost for federal income tax
purposes)--100.36%................ 3,818,945,922
Liabilities in excess of other
assets--(0.36)%................... (13,606,257)
--------------
Net Assets (applicable to
3,807,148,961 shares of Common
Stock outstanding at $1.00 per
share)--100.00%................... $3,805,339,665
==============
</TABLE>
- --------
* Variable rate securities--maturity dates reflect earlier of reset dates or
maturity dates. The interest rates shown are the current rates as of
December 31, 1996.
@ Interest rates shown are discount rates at date of purchase.
Weighted Average Maturity--61 days
See accompanying notes to financial statements
7
<PAGE>
PaineWebber Retirement Money Fund
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended December 31, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest........................................................ $100,236,890
------------
EXPENSES:
Investment advisory and administration.......................... 7,460,178
Transfer agency and service fees................................ 3,543,001
Distribution fees............................................... 1,456,723
Reports and notices to shareholders............................. 437,636
Federal and state registration.................................. 335,026
Custody and accounting.......................................... 182,451
Legal and audit................................................. 130,763
Insurance expense............................................... 80,014
Directors' fees................................................. 6,175
Other expenses.................................................. 203,306
------------
13,835,273
------------
NET INVESTMENT INCOME............................................. 86,401,617
NET REALIZED GAINS FROM INVESTMENT TRANSACTIONS................... 31,588
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $ 86,433,205
============
</TABLE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE
DECEMBER 31, 1996 YEAR ENDED
(UNAUDITED) JUNE 30, 1996
----------------- --------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income...................... $ 86,401,617 $ 170,039,499
Net realized gains from investment
transactions.............................. 31,588 289,649
-------------- --------------
Net increase in net assets resulting from
operations................................ 86,433,205 170,329,148
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income...................... (86,401,617) (170,039,499)
-------------- --------------
NET INCREASE IN NET ASSETS FROM CAPITAL STOCK
TRANSACTIONS................................ 304,799,671 534,019,660
-------------- --------------
Net increase in net assets................. 304,831,259 534,309,309
NET ASSETS:
Beginning of period........................ 3,500,508,406 2,966,199,097
-------------- --------------
End of period.............................. $3,805,339,665 $3,500,508,406
============== ==============
</TABLE>
See accompanying notes to financial statements
8
<PAGE>
PaineWebber Retirement Money Fund
- -------------------------------------------------------------------------------
Notes to Financial Statements--(unaudited)
- -------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber RMA Money Fund, Inc. (the "Corporation") was incorporated in the
state 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 funds: PaineWebber Retirement Money Fund (the
"Fund"), PaineWebber RMA Money Market Portfolio and PaineWebber RMA U.S.
Government Portfolio. The financial statements of PaineWebber RMA Money Market
Portfolio and PaineWebber RMA U.S. Government Portfolio are not included
herein.
The preparation of financial statements in accordance with generally accepted
accounting principles requires Fund management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates. The following is
a summary of significant accounting policies:
Valuation and Accounting for Investments and Investment Income--Investments
are valued at amortized cost which approximates market value. Investment
transactions are recorded on the 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 investments.
Repurchase Agreements--The Fund's 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, the 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.
Dividends and Distributions--Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions
are determined in accordance with federal income tax regulations, which may
differ from generally accepted accounting principles. These "book/tax"
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.
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.
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
9
<PAGE>
PaineWebber Retirement Money Fund
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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 billion.................................................. 0.50%
In excess of $1 billion up to $1.5 billion........................ 0.44%
Over $1.5 billion................................................. 0.36%
</TABLE>
At December 31, 1996, the Fund owed PaineWebber $1,310,683 in 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 to PaineWebber under
the Advisory Contract.
DISTRIBUTION PLAN
PaineWebber is the distributor of the Fund's shares and the exclusive dealer
for the sale of those shares. Under the plan of distribution, the Fund is
authorized to pay PaineWebber a distribution fee, which is accrued daily and
paid monthly, at an annual rate of up to 0.15% of the Fund's average daily net
assets. Currently, PaineWebber is compensated for its services as distributor
at an annual rate of 0.08% of the Fund's average daily net assets. At December
31, 1996, the Fund owed PaineWebber $257,383 in distribution 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 certain services
not provided by the Fund's transfer agent. For the six months ended December
31, 1996, PaineWebber earned $1,335,912 in shareholder service fees. At
December 31, 1996, the Fund owed PaineWebber $208,898 for such transfer agency
service fees and reimbursement of out-of-pocket expenses.
OTHER LIABILITIES
At December 31, 1996, the amounts payable for investments purchased and
dividends payable were $30,475,233 and $6,465,332, respectively.
FEDERAL TAX STATUS
The Fund intends to distribute substantially 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
10
<PAGE>
PaineWebber Retirement Money Fund
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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, 1996, the Fund had a net capital loss carryforward of $1,840,884
which is available as a reduction, to the extent provided in the regulations,
of any future net capital gains realized before the end of fiscal year 2003.
To the extent that the losses are used to offset future capital gains, it is
probable that the gains so offset will not be distributed.
CAPITAL STOCK
There are 10 billion shares of $0.001 par value common stock authorized.
Transactions in common stock, at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1996 JUNE 30, 1996
----------------- ---------------
<S> <C> <C>
Shares sold.................................. 6,294,188,740 12,749,231,635
Shares repurchased........................... (6,072,981,589) (12,381,362,764)
Dividends reinvested......................... 83,592,520 166,150,789
-------------- ---------------
Net increase................................. 304,799,671 534,019,660
============== ===============
</TABLE>
11
<PAGE>
PaineWebber Retirement Money Fund
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
IS PRESENTED BELOW:
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED FOR THE YEARS ENDED JUNE 30,
DECEMBER 31, 1996 --------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
----------------- ---------- ---------- ---------- ---------- ----------
<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.. 0.024 0.050 0.047 0.028 0.027 0.044
Dividends from net
investment income..... (0.024) (0.050) (0.047) (0.028) (0.027) (0.044)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ==========
Total investment
return(1)............. 2.41 % 5.13 % 4.83 % 2.75 % 2.78 % 4.40 %
========== ========== ========== ========== ========== ==========
Ratios and Supplemental
Data:
Net assets, end of
period (000's)........ $3,805,340 $3,500,508 $2,966,199 $2,450,235 $2,280,840 $2,163,935
Expenses to average net
assets................ 0.76 %* 0.70 % 0.78 % 0.77 % 0.79 % 0.79 %
Net investment income
to average net assets. 4.73 %* 5.01 % 4.75 % 2.77 % 2.76 % 4.39 %
</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
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 a period of less than one year has not been annualized.
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