CMA CALIFORNIA
MUNICIPAL MONEY FUND
Semi-Annual Report
September 30, 1997
[FUND LOGO]
[MERRILL LYNCH BULL LOGO]
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless accompanied
or preceded by the Fund's current prospectus. Past performance results
shown in this report should not be considered a representation of
future performance, which will fluctuate. The Fund seeks to maintain
a consistent $1.00 net asset value per share, although this cannot be
assured. An investment in the Fund is neither insured nor guaranteed
by the US Government. Statements and other information herein are as
dated and are subject to change.
CMA California
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011 #11211 -- 9/97
[FUND LOGO]
Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the six-month period ended September 30, 1997, CMA California
Municipal Money Fund paid shareholders a net annualized yield of
3.06%*. As of September 30, 1997, the Fund's 7-day yield was 3.27%.
Economic Environment and Investment Strategy
During the six-month period ended September 30, 1997, we maintained a
conservative average portfolio maturity for several reasons. Our
primary consideration was the future direction of short-term interest
rates. The Federal Reserve Board's (FRB) decision to raise the Federal
Funds rate by 25 basis points (0.25%) at the end of March was the
first step toward containing inflation and restraining economic
growth. Economic news at the onset of the period seemed to indicate
continued strength in the economy, and it appeared as if the FRB would
have to continue the tightening of monetary policy it had initiated in
March. In addition, in mid-April and early May tax-exempt funds
traditionally lose assets associated with the payment of taxes. This
year was no exception, and the pressure on variable rate demand notes
was so great that the short-term yield curve actually inverted so much
that yields on such instruments were higher than yields on securities
with longer maturities. A portfolio with a short average maturity
derives the most benefits from this interest rate scenario. In
addition, there was a great deal of issuance in the short-term tax-
exempt market at this time, putting even more yield pressure on
variable rate demand notes. As we entered early summer, a period when
the state and its municipalities traditionally enter the market to
fund their budget financing needs, we continued to maintain a short
average portfolio maturity as economic news continued to add a level
of uncertainty about the potential of additional tightening of short-
term interest rates by the FRB. Finally, the state of California
budget impasse meant that the summer's largest financing would be
delayed indefinitely.
In September, after a delay in passage of the state budget until well
after the July 1, 1997 start of the new fiscal year, the state entered
the market with a sale of $3.0 billion in revenue anticipation notes
(RANs). These notes received the two highest short-term ratings by
Moody's Investors Service, Inc. (Moody's) and Standard & Poor's Corp.
(S&P). The notes have a maturity of June 30, 1998 and were
re-offered at a yield of 3.84%, one of the most attractive yields on
California notes this year. The introduction of these notes together
with the sale of $3.0 billion state of Texas Tax RANs put temporary
pressure on the short-term tax-exempt market, artificially inflating
levels of variable rate demand notes and tax-exempt commercial paper.
We took advantage of this opportunity and began to lock in yield,
extending our average portfolio maturity with the purchase of both
State of California RANs and tax-exempt commercial paper.
Additionally, we purchased issues of various counties as they became
available. California tax-exempt issuance for the year-to-date totaled
$12.4 billion, which is virtually identical to issuance during the
same period last year. However, assets of the California tax-exempt
money funds increased by 20% to $22.0 billion in the last year. In the
last six months, assets increased by more than $1.0 billion. Assets of
CMA California Municipal Money Fund increased from $1.4 billion to
$1.7 over the last 12 months, an increase of 24%. The State of
California note issue represented the final issuance of the note
season. Historically, issuance in the final months of the year is very
slim.
At the close of the six-month period ended September 30, 1997, S&P and
Moody's reaffirmed their outstanding rating on the state's general
obligation debt at A1 and A+, respectively. Fitch Investors Service
raised the state's rating to AA-, citing the state's economic recovery
as a strong contributing factor to its decision. The State of
California had hoped to receive an upgrade from each of the ratings
agencies since a better rating translates into lower borrowing costs.
In maintaining the state's rating as opposed to granting an upgrade,
S&P cited concerns about the state's ability to respond to any future
economic downturn, specifically citing the lack of both a sizable
rainy day fund and a failsafe mechanism if mid-year revenue
projections failed to meet expectations. Also, at the end of the six-
month period, the state announced the first portion of an expected
$2.0 billion in sales of general obligation debt with the sale of $1.0
billion bonds in October.
We anticipate that our current average portfolio maturity, which is in
the 60-day range, will serve us well in the months ahead. Our tax-
exempt commercial paper holdings continue to allow the Fund to remain
diversified, and our note position has allowed us to diversify and
lock in attractive yields.
In Conclusion
We appreciate your continued interest in CMA California Municipal
Money Fund, and we look forward to continuing to serve your investment
needs in the future.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/VINCENT R. GIORDANO
Vincent R. Giordano
Senior Vice President
/S/HELEN M. SHEEHAN
Helen M. Sheehan
Vice President and Portfolio Manager
October 30, 1997
* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after
all expenses.
<TABLE>
<CAPTION>
CMA California Municipal Money Fund
Schedule of Investments as of September 30, 1997 (in Thousands)
Face Value
State Amount Issue (Note 1a)
<S> <C> <C> <C>
California -- $13,000 Abag Finance Authority for Nonprofit Corporations, California
95.9% (University of California Project), VRDN, 4% due 12/01/2001 (a) $13,000
10,435 California HFA, M/F Housing Revenue Bonds, VRDN, AMT, Series C, 4.10%
due 8/01/2039 (a) 10,435
2,000 California HFA, Multi-Unit Rental Housing Revenue Bonds (Medical Options
Period), Series A-241, 3.65% due 11/01/1997 2,000
4,740 California HFA, Revenue Bonds, COP, VRDN, UT, Series STP-249, 3.85% due
8/01/2028 (a) 4,740
California Health Facilities Financing Authority Revenue Bonds, VRDN (a):
25,335 (Pooled Loan Program), Series 85-B, 3.95% due 10/01/2010 (c) 25,335
2,400 (Pooled Loan Program), Series A, 3.95% due 6/01/2007 2,400
7,100 (Scripps Memorial Hospital), Series A, 3.95% due 12/01/2005 (b) 7,100
8,530 (Scripps Memorial Hospital), Series B, 3.95% due 12/01/2015 (b) 8,530
California Health Facilities Financing Authority, Revenue Refunding Bonds
(Sutter Health Financial), VRDN (a):
4,900 Series B, 3.90% due 7/01/2012 (d) 4,900
6,850 Series C, 3.90% due 7/01/2022 (e) 6,850
California Pollution Control Financing Authority, PCR, Refunding
(Pacific Gas and Electric):
17,500 CP, Series E, 3.85% due 10/01/1997 17,500
2,500 VRDN, AMT, Series B, 4.10% due 12/01/2016 (a) 2,500
35,000 VRDN, AMT, Series B, 4% due 11/01/2026 (a) 35,000
10,000 VRDN, AMT, Series C, 4.10% due 11/01/2026 (a) 10,000
4,000 VRDN, AMT, Series D, 4.20% due 1/01/2010 (a) 4,000
5,900 VRDN, Series A, 3.95% due 12/01/2018 (a) 5,900
7,500 VRDN, Series C, 3.95% due 11/01/2026 (a) 7,500
California Pollution Control Financing Authority, PCR (Southern
California Edison), CP:
15,700 Series C, 3.80% due 11/20/1997 15,700
1,500 Series C, 3.75% due 12/17/1997 1,500
25,800 VRDN, Series A, 3.85% due 2/28/2008 (a) 25,800
California Pollution Control Financing Authority, Resource Recovery
Revenue Bonds, VRDN, AMT (a):
21,700 (Delano Project), 4% due 8/01/2019 21,700
20,000 (Delano Project), Series 1991, 4% due 8/01/2019 20,000
3,800 (Honey Lake Power Project), 4% due 9/01/2018 3,800
15,400 Refunding (Ultra Power Malaga Project), Series A, 4% due 4/01/2017 15,400
4,300 Refunding (Ultra Power Malaga Project), Series B, 4% due 4/01/2017 4,300
14,800 Refunding (Ultra Power Rocklin Project), Series A, 4% due 6/01/2017 14,800
7,000 Refunding (Ultra Power Rocklin Project), Series B, 4% due 6/01/2017 7,000
California Pollution Control Financing Authority, Solid Waste Disposal
Revenue Bonds (Shell Oil Co. -- Martinez Project), VRDN, AMT, Series A (a):
16,100 Series 1994-A, 3.95% due 10/01/2024 16,100
9,500 Series 1996-A, 3.90% due 10/01/2031 9,500
25,000 California Public Capital Improvements Financing Authority Revenue Bonds
(Pooled Loan Project), Series D, 3.80% due 12/15/1997 25,000
5,000 California State Economic Development Financing Authority, IDR (Kuhnash
Properties/Arkay Project), VRDN, AMT, 4.15% due 4/01/2017 (a) 5,000
California State, GO:
18,700 CP, 3.80% due 10/22/1997 18,700
8,400 CP, 3.65% due 11/10/1997 8,400
82,800 RAN, 4.50% due 6/30/1998 83,198
6,235 California State, VRDN, UT, Series 1996 SG-84, 4.20% due 3/01/2020 (a)(e) 6,235
California Statewide Community Development Authority, M/F Revenue Bonds,
VRDN, AMT (a)(f):
10,000 (Canyon Creeks Apartments), Series C, 4.05% due 6/15/2025 10,000
4,200 (Kimberly Woods), Series B, 4.05% due 6/15/2025 4,200
19,600 Chula Vista, California, IDR, Refunding (San Diego Gas and Electric
Co.), VRDN, AMT, Series B, 4.15% due 12/01/2021 (a) 19,600
Chula Vista, California, IDR (San Diego Gas & Electric Co.), CP, AMT, Series D:
20,000 3.85% due 10/01/1997 20,000
10,000 3.85% due 10/10/1997 10,000
20,000 3.85% due 12/08/1997 20,000
10,000 3.75% due 12/19/1997 10,000
11,000 City of Los Angeles, California, GO, 4.50% due 6/30/1998 11,049
27,280 City of San Diego, California, TAN, Series A, 4.50% due 9/30/1998 27,448
Eagle Tax-Exempt Trust, VRDN (a):
14,800 California HFA, M/F, Series 1994 C-7, 4.13% due 8/01/2023 (b) 14,800
15,900 California S/F Housing Revenue Bonds, Series 1994 C-6, 4.13%
due 8/01/2017 (e) 15,900
9,300 California State, 4.13% due 11/01/2020 9,300
9,500 California State, Series 95, Class 0501, 4.13% due 2/01/2006 9,500
East Bay, California, Municipal Utility District Wastewater Treatment
System Revenue Bonds, CP:
4,800 3.70% due 12/08/1997 4,800
18,600 3.85% due 12/11/1997 18,600
13,800 3.80% due 12/12/1997 13,800
20,000 Floating Rate Trust Certificates, VRDN, Series 1992 H, 4.10% due
10/02/1998 (a)(d) 20,000
7,050 Fontana, California, M/F Housing Revenue Bonds (Springtime Apartments
Project), VRDN, Series A, 4% due 12/01/2016 (a) 7,050
12,150 Fremont, California, Unified School District (Alameda County), VRDN, UT,
Series SGA-37, 4.05% due 8/01/2020 (a)(b) 12,150
Golden Empire Schools Financing Authority, California, Revenue Refunding
Bonds, VRDN (a):
8,900 (Golden Empire Project), Series B, 4% due 12/01/2024 8,900
11,300 (Kern High School District), Series A, 4% due 12/01/2024 11,300
20,000 Kern County, California, Superintendent of Schools, COP, VRDN, Series A,
4.05% due 12/01/2021 (a) 20,000
18,985 Loma Linda, California, M/F Housing Revenue Bonds (Loma Linda Springs
Apartments), VRDN, 3.70% due 7/01/2019 (a) 18,985
Long Beach, California, Habor Revenue Bonds, CP, AMT, Series A:
16,500 3.85% due 10/01/1997 16,500
17,000 3.85% due 12/08/1997 17,000
3,000 Los Angeles, California, Department of Airports, Airport Revenue
Municipal Trust Bonds, VRDN, AMT, Series SG-61, 4.15%
due 5/15/2020 (a)(c) 3,000
Los Angeles, California, Department of Water and Power Revenue Bonds, CP:
20,000 3.80% due 11/20/1997 20,000
24,700 3.80% due 12/11/1997 24,700
5,000 Los Angeles, California, Harbor Department Revenue Bonds, VRDN, AMT,
Series SG-59, 4.15% due 8/01/2026 (a)(b) 5,000
Los Angeles, California, M/F Housing Revenue Refunding Bonds, VRDN (a):
12,660 (Canyon Creek Project), Series C, 4% due 12/01/2010 12,660
8,340 (Mountainback Apartment Project), Series B, 4% due 12/01/2010 8,340
6,500 Los Angeles, California, Rapid Transportation District, CP, 3.70%
due 11/19/1997 6,500
Los Angeles, California, Unified School District, TRAN:
8,400 Series A, 4.50% due 7/01/1998 8,442
8,445 Series B, 4.50% due 10/01/1998 8,500
Los Angeles, California, Wastewater System Revenue Bonds, CP:
14,300 3.80% due 12/08/1997 14,300
10,000 3.95% due 12/22/1997 10,000
28,000 Los Angeles County, California, Capital Asset Leasing Corporation,
Leasehold Revenue Bonds, CP, 3.85% due 10/01/1997 28,000
22,900 Los Angeles County, California, Local Education Agency, COP, TRAN, Series A,
4.50% due 6/30/1998 (e) 23,015
26,700 Los Angeles County, California, Metropolitan Transportation Authority
Revenue Bonds, VRDN, Series SGB-1, 4.15% due 7/01/2025 (a)(e) 26,700
Los Angeles County, California, Metropolitan Transportation Authority,
Sales Tax Revenue Bonds, VRDN (a):
12,530 Series SG-46, 4.10% due 7/01/2017 (d) 12,530
23,820 Series SG-55, 4.10% due 7/01/2018 (b) 23,820
M-S-R Public Power Agency, California, Revenue Refunding Bonds (San Juan
Project), VRDN, Sub-Lien (a)(b):
4,000 Series D, 4% due 7/01/2018 4,000
9,200 Series E, 3.90% due 7/01/2022 9,200
Metropolitain Water District (Southern California), Series B, CP:
21,800 3.80% due 12/08/1997 21,800
7,400 3.70% due 12/09/1997 7,400
4,200 3.70% due 12/10/1997 4,200
7,200 3.80% due 12/11/1997 7,200
5,000 Metropolitan Water District (Southern California), Waterworks Revenue
Refunding Bonds, VRDN, Series A, 3.85% due 6/01/2023 (a)(d) 5,000
7,435 Monrovia, California, Unified School District, VRDN, Series 1997
SGA-70, 4.05% due 8/01/2022 (a)(b) 7,435
13,570 Port Oakland, California, Revenue Bonds, VRDN, AMT, Series 1997
SG-112, 4.15% due 11/01/2025 (a)(b) 13,570
7,570 Redlands, California, COP, Refunding (Sewer Facilites Project), VRDN,
4% due 9/01/2017 (a)(c) 7,570
Redlands, California, M/F Housing Revenue Bonds, VRDN, Series A (a):
3,300 (Orange Village Apartments Project), AMT, 4% due 8/01/2018 3,300
12,500 (Parkview Terrace Project), 3.90% due 2/01/2016 12,500
Regents of the University of California, CP:
10,000 3.75% due 12/01/1997 10,000
5,000 3.70% due 12/10/1997 5,000
5,000 Series B, 3.80% due 10/01/1997 5,000
14,000 Series B, 3.65% due 10/30/1997 14,000
7,000 Series B, 3.70% due 11/25/1997 7,000
20,000 Series B, 3.70% due 12/09/1997 20,000
15,521 Series B, 3.80% due 12/11/1997 15,521
8,000 Series B, 3.85% due 12/11/1997 8,000
26,500 Series B, 3.80% due 12/12/1997 26,500
Riverside County, California, COP (Riverside County Public Facilities),
ACES (a):
27,901 Series A, 3.95% due 12/01/2015 27,901
2,580 Series D, 3.95% due 12/01/2015 2,580
13,800 Roseville, California, Finance Authority, Hospital Lease Revenue Bonds
(Roseville Hospital), VRDN, Series A, 3.95% due 10/01/2014 (a) 13,800
5,760 Sacramento, California, Municipal Utility District, Electric Revenue Bonds,
VRDN, Series SGB-4, 4.15% due 8/15/2021 (a)(d) 5,760
7,000 Sacramento County, California TRAN, 4.50% due 9/30/1998 7,043
3,700 San Bernardino, California, M/F Housing Revenue Refunding Bonds (Village
Crossing), VRDN, Series A, 4% due 2/01/2027 (a) 3,700
6,000 San Bernardino County, California, Residential Mortgage Revenue
Refunding Bonds (Ramona Garden), VRDN, Series A, 3.95% due
2/01/2017 (a) 6,000
4,050 San Diego, California, IDR, Refunding (San Diego Gas & Electric), CP,
Series A, 3.80% due 12/11/1997 4,050
San Diego, California, M/F Housing Authority Revenue Bonds, VRDN (a):
3,000 (Country Hills), Series A, 3.95% due 8/15/2013 3,000
7,540 (La Cima Apartments), Series K, 3.90% due 12/01/2008 7,540
17,050 (Nobel Court Apartments), 3.90% due 12/01/2008 17,050
4,000 San Diego, California, Sewer Revenue Bonds, VRDN, Series SG-14, 4.10%
due 5/15/2020 (a)(b) 4,000
4,000 San Diego, California, Unified School District, TRAN, 4.75% due
10/01/1997 4,000
27,560 San Diego County, California, TRAN, 4.50% due 9/30/1998 27,729
San Francisco, California, City and County Airports Commission (San
Francisco International Airport), VRDN (a):
16,555 AMT, Series SG-116, 4.15% due 5/01/2026 (b) 16,555
3,800 AMT, Series SGA-56, 4.10% due 5/01/2026 (b) 3,800
3,645 Series SG-88, 4.10% due 5/01/2021 (c) 3,645
18,590 Series SG-113, 4.10% due 5/01/2026 (c) 18,590
San Jose, California, M/F Housing Revenue Bonds, VRDN, Series A (a):
13,000 (Siena at Renaissance), AMT, 4.10% due 12/01/2029 13,000
6,360 (Timberwood), 4% due 2/01/2020 6,360
2,000 San Jose -- Santa Clara, California, Water Financing Authority, Sewer
Revenue Bonds, VRDN, Series SG-49, 4.10% due 11/15/2020 (a)(c) 2,000
3,000 Santa Barbara County, California, TRAN, Series A, 4.50% due 10/01/1998 3,016
9,400 Santa Clara County, California, M/F Housing Authority, Revenue Refunding
Bonds (Benton Park Central Apartments), VRDN, Series A, 3.95% due
12/15/2025 (a)(f) 9,400
2,790 Santa Clara County, California, TRAN, 4.75% due 10/01/1998 2,814
5,325 Santa Rosa, California, M/F Housing Revenue Bonds (Oak Creek Apartments
Project), VRDN, AMT, Series A, 4% due 6/01/2018 (a) 5,325
3,675 Simi Valley, California, Community Redevelopment Agency, M/F Housing
Revenue Bonds (Ashlee Manor Project), VRDN, AMT, Series A, 4% due
10/01/2017 (a) 3,675
Southern California Public Power Authority, Revenue Refunding Bonds,
Power Project (Palo Verde Project), VRDN (a)(d):
10,100 Series B, 3.95% due 7/01/2009 10,100
8,400 Series C, 3.95% due 7/01/2017 8,400
State of California, CP:
50,000 3.40% due 10/01/1997 50,000
20,700 3.70% due 10/14/1997 20,700
4,000 3.75% due 11/10/1997 4,000
12,300 3.80% due 12/11/1997 12,300
25,100 3.85% due 12/11/1997 25,100
27,600 Victor Valley, California, Community College District, COP (Capital
Improvemnet Financing Project), VRDN, 4.05% due 12/01/2024 (a) 27,600
1,000 West Basin, California, Municipal Water District Revenue Bonds, COP
(Phase II -- Recycled Water Project), VRDN, Series B, 3.85% due
8/01/2027 (a) 1,000
Puerto Rico -- Puerto Rico Commonwealth, Government Development Bank Revenue Bonds:
3.7% 14,640 3.70% due 11/25/1997 14,640
39,535 3.70% due 12/09/1997 39,535
10,000 Puerto Rico, Electric Power Authority, Power Revenue Bonds,
VRDN, Series SGA-43, 3.90% due 7/01/2022 (a)(b) 10,000
-----------
Total Investments (Cost -- $1,716,116*) -- 99.6% 1,716,116
Other Assets Less Liabilities -- 0.4% 6,894
-----------
Net Assets -- 100.0% $1,723,010
===========
(a) The interest rate is subject to change periodically based on certain indexes. The interest rate shown is the interest
rate in effect at September 30, 1997.
(b) MBIA Insured.
(c) FGIC Insured.
(d) AMBAC Insured.
(e) FSA Insured.
(f) FNMA Collateralized.
* Cost for Federal income tax purposes.
Portfolio Abbreviations for CMA California Municipal Money Fund
ACESSM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
CP Commercial Paper
GO General Obligation Bonds
HFA Housing Financing Agency
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
S/F Single Family
TAN Tax Anticipation Notes
TRAN Tax Revenue Anticipation Notes
UT Unlimited Tax
VRDN Variable Rate Demand Notes
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA California Municipal Money Fund
Statement of Assets and Liabilities as of September 30, 1997
<S> <C> <C>
Assets:
Investments, at value (identified cost -- $1,716,116,446) (Note 1a) $1,716,116,446
Cash 41,795
Interest receivable 8,038,659
Prepaid registration fees and other assets (Note 1d) 43,615
---------------
Total assets 1,724,240,515
---------------
Liabilities:
Payables:
Investment adviser (Note 2) $647,741
Distributor (Note 2) 386,008
Beneficial interest redeemed 204 1,033,953
---------------
Accrued expenses and other liabilities 196,969
---------------
Total liabilities 1,230,922
---------------
Net Assets $1,723,009,593
===============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of shares
authorized $172,398,338
Paid-in capital in excess of par 1,551,583,384
Accumulated realized capital losses -- net (Note 4) (972,129)
---------------
Net Assets -- Equivalent to $1.00 per share based on 1,723,983,381 shares of
beneficial interest outstanding $1,723,009,593
===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA California Municipal Money Fund
Statement of Operations for the Six Months Ended September 30, 1997
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned. $29,687,283
Expenses:
Investment advisory fees (Note 2) $3,484,956
Distribution fees (Note 2) 986,045
Transfer agent fees (Note 2) 100,843
Accounting services (Note 2) 68,022
Professional fees 59,610
Custodian fees 38,363
Registration fees (Note 1d) 37,024
Printing and shareholder reports 23,590
Pricing fees 8,229
Trustees' fees and expenses 3,613
Other 5,334
---------------
Total expenses 4,815,629
---------------
Investment income -- net 24,871,654
Realized Loss on Investments -- Net (Note 1c) (56,975)
---------------
Net Increase in Net Assets Resulting from Operations $24,814,679
===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA California Municipal Money Fund
Statements of Changes in Net Assets
For the Six For the Year
Months Ended Ended
Increase (Decrease) in Net Assets: Sept. 30, 1997 March 31, 1997
<S> <C> <C>
Operations:
Investment income -- net $24,871,654 $42,120,588
Realized gain (loss) on investments -- net (56,975) 26,624
--------------- ---------------
Net increase in net assets resulting from operations 24,814,679 42,147,212
--------------- ---------------
Dividends to Shareholders (Note 1e):
Investment income -- net (24,871,654) (42,120,540)
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders (24,871,654) (42,120,540)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 4,112,569,162 6,159,698,384
Net asset value of shares issued to shareholders in reinvestment
of dividends (Note 1e) 24,872,410 42,121,016
--------------- ---------------
4,137,441,572 6,201,819,400
Cost of shares redeemed (3,980,177,273) (6,057,183,986)
--------------- ---------------
Net increase in net assets derived from beneficial
interest transactions 157,264,299 144,635,414
--------------- ---------------
Net Assets:
Total increase in net assets 157,207,324 144,662,086
Beginning of period 1,565,802,269 1,421,140,183
--------------- ---------------
End of period $1,723,009,593 $1,565,802,269
=============== ===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA California Municipal Money Fund
Financial Highlights
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended For the Year Ended March 31,
Sept. 30, 1997 1997 1996 1995 1994
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
Investment income -- net .02 .03 .03 .03 .02
---------- ---------- ---------- ---------- ----------
Total from investment operations .02 .03 .03 .03 .02
---------- ---------- ---------- ---------- ----------
Less dividends from investment income -- net (.02) (.03) (.03) (.03) (.02)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ==========
Total Investment Return 3.06%* 2.90% 3.15% 2.66% 1.93%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses .59%* .60% .64% .63% .62%
========== ========== ========== ========== ==========
Investment income -- net 3.06%* 2.85% 3.11% 2.62% 1.91%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of period (in thousands) $1,723,010 $1,565,802 $1,421,140 $1,168,234 $1,225,160
========== ========== ========== ========== ==========
* Annualized.
See Notes to Financial Statements.
</TABLE>
CMA California Municipal Money Fund
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA California Municipal Money Fund (the "Fund") is part of CMA Multi-
State Municipal Series Trust (the "Trust"). The Fund is registered
under the Investment Company Act of 1940 as a non-diversified, open-
end management investment company. These unaudited financial
statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for the
interim period presented. All such adjustments are of a normal
recurring nature. The following is a summary of significant accounting
policies followed by the Fund.
(a) Valuation of investments -- Investments are valued at amortized
cost, which approximates market value. For the purpose of valuation,
the maturity of a variable rate demand instrument is deemed to be the
next coupon date on which the interest rate is to be adjusted. In the
case of a floating rate instrument, the remaining maturity is the
demand notice payment period.
(b) Income taxes -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(c) Security transactions and investment income -- Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
premium and discount) is recognized on the accrual basis. Realized
gains and losses on security transactions are determined on the
identified cost basis.
(d) Prepaid registration fees -- Prepaid registration fees are charged
to expense as the related shares are issued.
(e) Dividends and distributions to shareholders -- The Fund declares
dividends daily and reinvests daily such dividends (net of non-
resident alien tax withheld) in additional fund shares at net asset
value. Dividends are declared from the total of net investment income,
excluding discounts earned other than original issue discounts. Net
realized capital gains, if any, are normally distributed annually
after deducting prior years' loss carryforward. The Fund may
distribute capital gains more frequently than annually in order to
maintain the Fund's net asset value at $1.00 per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary
of Merrill Lynch & Co., Inc. ("ML & Co."), which is the limited
partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets, at the following annual rates: 0.50%
of the first $500 million of average daily net assets; 0.425% of
average daily net assets in excess of $500 million but not exceeding
$1 billion, and 0.375% of average daily net assets in excess of $1
billion.
Pursuant to the Distribution and Shareholder Servicing Plan in
compliance with Rule 12b-1 under the Investment Company Act of 1940,
Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S") receives a
distribution fee from the Fund at the end of each month at the annual
rate of 0.125% of average daily net assets of the Fund. The
distribution fee is to compensate MLPF&S financial consultants and
other directly involved branch office personnel for selling shares of
the Fund and for providing direct personal services to shareholders.
The distribution fee is not compensation for the administrative and
operational services rendered to the Fund by MLPF&S in processing
share orders and administering shareholder accounts.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-owned
subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, MLFDS, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the period
corresponds to the amounts included in the Statements of Changes in
Net Assets for net proceeds from sale of shares and cost of shares
redeemed, respectively, since shares are recorded at $1.00 per share.
4. Capital Loss Carryforward:
At March 31, 1997, the Fund had a net capital loss carryforward of
approximately $909,000, of which $433,000 expires in 2002 and $476,000
expires in 2003. This amount will be available to offset a like amount
of any future taxable gains.
CMA CALIFORNIA MUNICIPAL MONEY FUND
Officers and Trustees
Arthur Zeikel -- President and Trustee
Ronald W. Forbes -- Trustee
Cynthia A. Montgomery -- Trustee
Charles C. Reilly -- Trustee
Kevin A. Ryan -- Trustee
Richard R. West -- Trustee
Terry K. Glenn -- Executive Vice President
Vincent R. Giordano -- Senior Vice President
Edward J. Andrews -- Vice President
Donald C. Burke -- Vice President
Peter J. Hayes -- Vice President
Kenneth A. Jacob -- Vice President
Steven T. Lewis -- Vice President
Darrin J. SanFillippo -- Vice President
Kevin A. Schiatta -- Vice President
Helen Marie Sheehan -- Vice President
Gerald M. Richard -- Treasurer
Robert Harris -- Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 1713
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210*
* For inquiries regarding your CMA account, call (800) CMA-INFO [(800)
262-4636].
