CMA
CMA California
Municipal Money Fund
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Annual Report
March 31, 1998
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[LOGO] Merrill Lynch
[GRAPHIC OMITTED]
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To Our Shareholders:
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For the year ended March 31, 1998, CMA California Municipal Money Fund paid
shareholders a net annualized yield of 3.06%.* As of March 31, 1998, the Fund's
7-day yield was 2.91%.
Economic Environment and Investment Strategy
Over the six-month period ended March 31, 1998, assets of CMA California
Municipal Money Fund increased by more than $250 million. The Fund ended its
fiscal year with assets at an all-time high of $2.0 billion. This represents an
increase of over 22% compared to assets at March 31, 1997. Overall, in the past
year, assets of California tax-exempt money funds increased dramatically as
well, rising by almost $4.5 billion, a record high. By March 31, 1998, assets of
the funds totaled $25.5 billion and represented approximately 15% of the total
tax-exempt money fund industry assets. Unfortunately, new issuance has not kept
pace with the increase in demand, and yield spreads between California
state-specific issues and general market issues have increased, reflecting this
sustained demand. As we discussed in our September 30, 1997 letter to
shareholders, issuance in the latter part of the calendar year is traditionally
very light. Our purchases of state of California revenue anticipation notes and
other fixed-rate notes in September provided a solid block of core investments
for the Fund, in addition to supplying both attractive yields and
diversification. For most of the Fund's fiscal year, we extended the average
portfolio maturity during these periods of supply as the market struggled
initially to absorb new issuance. For much of the remainder of the fiscal year,
however, a flat yield curve provided little incentive to extend the average
portfolio maturity. Our core position of fixed-rate notes contributed to the
Fund's strong performance for the year ended March 31, 1998. Diversification of
the portfolio will take on added significance as the Securities and Exchange
Commission has issued technical amendments to Rule 2a-7, which are guidelines
governing money market funds. The new guidelines take effect on July 1, 1998 and
will impose new diversification requirements relating to state-specific money
funds.
During his State of the State address in January, Governor Pete Wilson proposed
that voters approve the sale of bonds totaling $16.0 billion, largely for
educational purposes. Additional bond proposals included the sale of $1.4
billion for the construction of jails, $1.3 billion for flood control and water
conservation and $800 million for parks and coastline preservation. The fiscal
year 1999 executive budget, which will be deliberated by both Houses of the
legislature, proposes an overall spending increase of 5.6% and is predicated on
the assumption that job growth and overall economic strength will continue in
the state. Despite continued growth in employment and an improved housing market
in the state of California, tax collections through the first five months of
fiscal year 1998 were 1.4% below projections because, in part, of seasonal
factors. However, revenue collections are projected to exceed budget
expectations by approximately $500 million or about 1% by the end of the state's
fiscal year in June. The state has recovered all the jobs lost during the
* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after all
expenses.
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recession, and in 1997 alone created about 400,000 jobs. In January, the state
also announced its intention to sell $1.0 billion of general obligation bonds,
the second leg of its debt financing that was initiated last October.
The greatest threat to sustained growth in California is the Asian economic
crisis. Commodity exports to Southeast Asia, Hong Kong and South Korea account
for 3.5% of California's gross domestic product, with only the state of
Washington experiencing a greater exposure to the Pacific Rim. Two-thirds of
California's exports consist of computers, semiconductors, other electronic
equipment and industrial instruments that have been large contributors to the
state's economic expansion. Typically, these goods are not end products, but
rather intermediate goods which are components of products assembled in Asia and
shipped elsewhere. Ultimately, California companies may benefit when the Asian
turmoil is resolved and the demand for high tech goods resumes. Another
potential effect of the Asian crisis may be felt through lessened Asian capital
investment within the state, as money is repatriated.
The improved finances of California and its municipalities may result in reduced
issuance this year. During April, as we traditionally see redemptions associated
with the payment of taxes, we are prepared to sell fixed-rate notes which mature
in the next 90 days to meet redemptions, instead of liquidating the Fund's
positions in variable rate demand notes. During tax season, yields on variable
rate demand notes usually rise as dealers try to discourage selling by making
the yields as attractive as possible. We expect to maintain a short average
portfolio maturity to capitalize on this temporary event, unless technical
weakness provides us with an opportunity to further extend maturity with either
our commercial paper holdings or to purchase fixed-rate notes with a longer
maturity.
In Conclusion
We thank you for your support of CMA California Municipal Money Fund, and we
look forward to serving 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
May 7, 1998
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CMA California Municipal Money Fund
Officers and Trustees
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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*
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Important Tax Information
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All of the net investment income distributions paid daily by CMA California
Municipal Money Fund of CMA Multi-State Municipal Series Trust during its
taxable year ended March 31, 1998 qualify as tax-exempt interest dividends for
Federal income tax purposes.
Additionally, there were no capital gains distributed by the Fund during the
year.
Please retain this information for your records.
* For inquiries regarding your CMA account, call (800) CMA-INFO [(800)
262-4636].
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CMA California Municipal Money Fund
Schedule of Investments as of March 31, 1998 (in Thousands)
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<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
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<S> <C> <C> <C>
California-- $ 13,000 Abag Finance Authority for Nonprofit Corporations, California
93.0% (University of California Project), VRDN, 3.60% due 12/01/2001 (a) ........ $ 13,000
10,435 California HFA, M/F Housing Revenue Bonds, VRDN, AMT, Series III-C,
3.55% due 8/01/2039 (a) ................................................... 10,435
4,740 California HFA, Revenue Bonds, COP, VRDN, UT, Series STP-249,
3.70% due 8/01/2028 (a) ................................................... 4,740
California Health Facilities Financing Authority Revenue Bonds, VRDN (a):
2,100 (Adventist Hospital), Series B, 3.35% due 9/01/2028 (b) ............. 2,100
13,840 (Pooled Loan Program), Series 85-B, 3.40% due 10/01/2010 (c) ........ 13,840
2,300 (Pooled Loan Program), Series A, 3.40% due 6/01/2007 ................ 2,300
3,600 Refunding (Sutter Health Hospital), Series B, 3.60%
due 7/01/2012 (d) ................................................... 3,600
14,850 Refunding (Sutter Health Hospital), Series C, 3.60%
due 7/01/2022 (e) ................................................... 14,850
6,600 (Scripps Memorial Hospital), Series A, 3.40% due 12/01/2005 (b) ..... 6,600
8,530 (Scripps Memorial Hospital), Series B, 3.40% due 12/01/2015 (b) ..... 8,530
5,600 California Pollution Control Financing Authority, Environmental
Improvement Revenue Bonds (Atlantic), VRDN, 3.65% due 12/01/2032 (a) ...... 5,600
California Pollution Control Financing Authority, PCR, Refunding
(Pacific Gas and Electric):
5,200 CP, Series D, 3.45% due 5/08/1998 ................................... 5,200
8,100 CP, Series E, 3.35% due 5/01/1998 ................................... 8,100
23,000 CP, Series E, 3.25% due 5/12/1998 ................................... 23,000
5,900 CP, Series E, 3.40% due 7/14/1998 ................................... 5,900
11,400 VRDN, AMT, Series D, 3.60% due 1/01/2010 (a) ........................ 11,400
5,000 VRDN, Series F, 3.60% due 11/01/2026 (a) ............................ 5,000
California Pollution Control Financing Authority, PCR (Southern
California Edison Co.), CP:
8,000 Series A, 3.65% due 2/28/2008 ....................................... 8,000
13,000 Series B, 3.65% due 2/28/2008 ....................................... 13,000
8,700 Series C, 3.65% due 2/28/2008 ....................................... 8,700
15,700 Series D, 3.40% due 6/15/1998 ....................................... 15,700
California Pollution Control Financing Authority, Resource
Recovery Revenue Bonds, VRDN, AMT (a):
3,300 (Atlantic Richfield Company Project), Series A, 3.70%
due 12/01/2024 ...................................................... 3,300
9,900 (Delano Project), 3.70% due 8/01/2019 ............................... 9,900
11,900 (Delano Project), 3.70% due 8/01/2019 ............................... 11,900
22,200 (Delano Project), Series 1991, 3.70% due 8/01/2019 .................. 22,200
7,800 (Honey Lake Power Project), 3.70% due 9/01/2018 ..................... 7,800
15,400 Refunding (Ultra Power Malaga Project), Series A, 3.70%
due 4/01/2017 ....................................................... 15,400
4,300 Refunding (Ultra Power Malaga Project), Series B, 3.70%
due 4/01/2017 ....................................................... 4,300
15,200 Refunding (Ultra Power Rocklin Project), Series A, 3.70%
due 6/01/2017 ....................................................... 15,200
8,600 Refunding (Ultra Power Rocklin Project), Series B, 3.70%
due 6/01/2017 ....................................................... 8,600
6,700 California Pollution Control Financing Authority, Solid Waste Disposal
Revenue Bonds (Shell Martinez Refining), VRDN, AMT, Series A,
3.60% due 10/01/2031 (a) .................................................. 6,700
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</TABLE>
Portfolio Abbreviations for CMA California Municipal Money Fund
ACES(SM) Adjustable Convertible Extended 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
MSTR Municipal Securities Trust Receipts
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
TAN Tax Anticipation Notes
TRAN Tax Revenue Anticipation Notes
UT Unlimited Tax
VRDN Variable Rate Demand Notes
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CMA California Municipal Money Fund
Schedule of Investments as of March 31, 1998 (Continued) (in Thousands)
================================================================================
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
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<S> <C> <C> <C>
California $ 25,000 California Public Capital Improvements Financing Authority Revenue Bonds
(continued) (Pooled Loan Project), Series D, 3.60% due 6/15/1998 ...................... $ 25,000
California State Economic Development Financing Authority, IDR, VRDN (a):
4,000 (Harvel Plastics Inc. Project), 3.90% due 3/01/2010 ................. 4,000
5,000 (Kuhnash Properties/Arkay Project), AMT, 3.65% due 4/01/2017 ........ 5,000
94,675 California State, GO, CP, 4.50% due 6/30/1998 94,852
California State, MSTR, VRDN (a):
8,700 Series SGA 58, 3.70% due 6/01/2026 (c) .............................. 8,700
4,470 Series SGA 72, 3.70% due 6/01/2017 (c) .............................. 4,470
1,000 Series SGB 15, 3.70% due 8/01/2019 .................................. 1,000
6,235 California State, VRDN, UT, Series 1996 SG-84, 3.70% due 3/01/2020 (a)(e) . 6,235
California Statewide Community Development Authority, M/F Revenue Bonds,
VRDN, AMT (a):
10,000 (Canyon Creeks Apartments), Series C, 3.50% due 8/15/2025 (f) ....... 10,000
3,660 (Greenback Manor Apartments), Series A, 3.70% due 2/01/2028 ......... 3,660
4,200 (Kimberly Woods), Series B, 3.50% due 6/15/2025 (f) ................. 4,200
1,900 California Statewide Community Development Authority Revenue Bonds,
COP (Saint Joseph's Health Systems Group), VRDN, 3.60% due 7/01/2024 (a) .. 1,900
10,300 California Statewide Community Development Authority Solid Waste
Facilities Revenue Bonds (Chevron U.S.A. Inc. Project), VRDN, AMT,
3.70% due 12/15/2024 (a) .................................................. 10,300
116,000 California Transportation Finance Authority, VRDN, 3.60%
due 10/01/2027 (a)(e) ..................................................... 116,000
Chula Vista, California, IDR, Refunding (San Diego Gas and Electric Co.),
VRDN, AMT (a):
13,500 Series A, 3.70% due 3/01/2023 ....................................... 13,500
17,200 Series B, 3.70% due 12/01/2021 ...................................... 17,200
Chula Vista, California, IDR (San Diego Gas & Electric Co.), CP, AMT,
Series D:
10,000 3.25% due 4/01/1998 ................................................. 10,000
20,000 3.55% due 6/10/1998 ................................................. 20,000
20,000 3.35% due 6/12/1998 ................................................. 20,000
10,000 3.50% due 7/14/1998 ................................................. 10,000
10,000 Contra Costa County, California, CP, 3.15% due 4/01/1998 .................. 10,000
Eagle Tax-Exempt Trust, VRDN (a):
14,800 California HFA, M/F, Series 1994 C-7, 3.62% due 8/01/2023 ........... 14,800
9,300 California State, Series 95, Class 0151, 3.62% due 11/01/2020 ....... 9,300
9,500 California State, Series 95, Class 0501, 3.43% due 2/01/2006 ........ 9,500
15,300 Series 1994 C-6, 3.62% due 8/01/2017 ................................ 15,300
East Bay, California, Municipal Utility District, Wastewater Treatment
System Revenue Bonds, CP:
13,800 3.35% due 6/10/1998 ................................................. 13,800
7,550 3.45% due 6/11/1998 ................................................. 7,550
18,600 3.40% due 7/14/1998 ................................................. 18,600
7,050 Fontana, California, M/F Housing Revenue Bonds (Springtime Apartments
Project), VRDN, Series A, 3.70% due 12/01/2016 (a) ........................ 7,050
12,150 Fremont, California, Unified School District (Alameda County), MSTR, VRDN,
UT, Series SGA-37, 3.65% due 8/01/2020 (a)(b) ............................. 12,150
Golden Empire Schools Financing Authority, California, Revenue Refunding
Bonds, VRDN (a):
8,800 (Golden Empire Project), Series B, 3.45% due 12/01/2024 ............. 8,800
11,100 (Kern High School District), Series A, 3.45% due 12/01/2024 ......... 11,100
6,620 Highland, California, Redevelopment Agency, M/F Housing Revenue Bonds
(Jeffery Court Senior Apartments), VRDN, 3.65% due 3/01/2028 (a) .......... 6,620
</TABLE>
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CMA California Municipal Money Fund
Schedule of Investments as of March 31, 1998 (Continued) (in Thousands)
================================================================================
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
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<S> <C> <C> <C>
California $ 20,000 Kern County, California, Superintendent of Schools, COP, VRDN, Series A,
(continued) 3.65% due 12/01/2021 (a) .................................................. $ 20,000
18,985 Loma Linda, California, M/F Housing Revenue Bonds (Loma Linda Springs
Apartments), VRDN, 3.40% due 7/01/2019 (a) ................................ 18,985
Long Beach, California, Harbor Revenue Bonds, CP, AMT, Series A:
17,000 3.55% due 6/10/1998 ................................................. 17,000
16,500 3.60% due 6/19/1998 ................................................. 16,500
25,000 Long Beach, California, TRAN, 4.50% due 10/08/1998 ........................ 25,086
3,000 Los Angeles, California, Department of Airports, Airport Revenue
Municipal Trust Bonds, VRDN, AMT, Series SG-61, 3.67%
due 5/15/2020 (a)(c) ...................................................... 3,000
Los Angeles, California, Department of Water and Power Revenue Bonds, CP:
24,700 3.20% due 4/01/1998 ................................................. 24,700
10,000 3.20% due 5/01/1998 ................................................. 10,000
7,200 3.30% due 5/14/1998 ................................................. 7,200
4,900 3.30% due 6/12/1998 ................................................. 4,900
20,000 3.40% due 6/15/1998 ................................................. 20,000
11,000 3.50% due 7/14/1998 ................................................. 11,000
4,300 3.55% due 7/14/1998 ................................................. 4,300
4,005 Los Angeles, California, Department of Water and Power, Revenue Bonds
(Electric Plant), MSTR, VRDN, Series SGA-6, 3.65% due 11/15/2019 (a) ...... 4,005
5,000 Los Angeles, California, Harbor Department Revenue Bonds, VRDN, AMT,
Series SG-59, 3.67% due 8/01/2026 (a)(b) .................................. 5,000
5,200 Los Angeles, California, M/F Housing Revenue Bonds (Casden Project),
VRDN, Series K, 3.55% due 7/01/2010 (a) 5,200 Los Angeles,
California, M/F Housing Revenue Refunding Bonds, VRDN (a):
12,660 (Canyon Creek Project), Series C, 3.45% due 12/01/2010 .............. 12,660
8,340 (Mountainback Apartment Project), Series B, 3.45% due 12/01/2010 .... 8,340
Los Angeles, California, Unified School District, TRAN:
8,400 Series A, 4.50% due 7/01/1998 ....................................... 8,414
12,445 Series B, 4.50% due 10/01/1998 ...................................... 12,485
14,300 Los Angeles, California, Wastewater System Revenue Bonds, CP, 3.45%
due 6/10/1998 ............................................................. 14,300
15,000 Los Angeles County, California, CP, 2.90% due 4/01/1998 ................... 15,000
Los Angeles County, California, Capital Asset Leasing Corporation,
Leasehold Revenue Bonds, CP:
5,000 3.40% due 4/14/1998 ................................................. 5,000
14,250 3.30% due 5/01/1998 ................................................. 14,250
8,200 3.35% due 5/01/1998 ................................................. 8,200
6,500 3.70% due 6/10/1998 ................................................. 6,500
3,000 Los Angeles County, California, Local Education Agency, COP, TRAN,
Series B, 4.50% due 9/30/1998 (e) ......................................... 3,008
Los Angeles County, California, Metropolitan Transportation Authority,
Revenue Bonds, VRDN (a)(e):
33,675 Series SGB-1, 3.70% due 7/01/2025 ................................... 33,675
13,000 Series SGB-2, 3.70% due 7/01/2021 ................................... 13,000
5,400 Series SGB-3, 3.70% due 7/01/2016 ................................... 5,400
Los Angeles County, California, Metropolitan Transportation Authority,
Sales Tax Revenue Bonds, VRDN (a):
12,530 Series SG-46, 3.70% due 7/01/2017 (d) ............................... 12,530
43,000 Series SG-55, 3.70% due 7/01/2018 (b) ............................... 43,000
1,000 Los Angeles County, California, Public Works Financing Authority,
Lease Revenue Refunding Bonds (Master Refunding Project), Series A,
4% due 3/01/1999 (e) ...................................................... 1,004
</TABLE>
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CMA California Municipal Money Fund
Schedule of Investments as of March 31, 1998 (Continued) (in Thousands)
================================================================================
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
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<S> <C> <C> <C>
California Metropolitan Water District (Southern California), CP, Series B:
(continued) $ 7,400 3.15% due 4/01/1998 ................................................. $ 7,400
21,800 3.45% due 6/10/1998 ................................................. 21,800
1,600 3.40% due 7/14/1998 ................................................. 1,600
10,000 Metropolitan Water District (Southern California), Waterworks Revenue
Bonds, VRDN, Series C, 3.05% due 7/01/2028 (a) ............................ 10,000
7,435 Monrovia, California, Unified School District, MSTR, VRDN, Series 1997
SGA-70, 3.65% due 8/01/2022 (a)(b) ........................................ 7,435
13,570 Port Oakland, California, Revenue Bonds, MSTR, VRDN, AMT, Series 1997
SG-112, 3.67% due 11/01/2025 (a)(b) ....................................... 13,570
7,570 Redlands, California, COP, Refunding (Sewer Facilities Project), VRDN,
3.30% 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, 3.70% due 8/01/2018 ....... 3,300
12,500 Refunding (Parkview Terrace Project), 3.35% due 2/01/2016 ........... 12,500
Regents of the University of California, CP:
25,000 3.15% due 4/06/1998 ................................................. 25,000
15,521 Series B, 3.20% due 4/01/1998 ....................................... 15,521
8,000 Series B, 3.20% due 5/01/1998 ....................................... 8,000
26,500 Series B, 3.40% due 5/01/1998 ....................................... 26,500
20,000 Series B, 3.55% due 7/14/1998 ....................................... 20,000
Riverside County, California, COP (Riverside County Public
Facilities), ACES (a):
5,353 Series A, 3.45% due 12/01/2015 ...................................... 5,353
2,475 Series D, 3.45% due 12/01/2015 ...................................... 2,475
9,970 Riverside County, California, School Financing Authority, RAN, 4.50%
due 10/01/1998 ............................................................ 10,000
4,300 Roseville, California, Finance Authority, Hospital Lease Revenue Bonds
(Roseville Hospital), VRDN, Series A, 3.35% due 10/01/2014 (a) ............ 4,300
20,000 Sacramento, California, City Unified School District, TRAN, 4.25%
due 12/01/1998 ............................................................ 20,058
5,760 Sacramento, California, Municipal Utility District, Electric Revenue
Bonds, VRDN, Series SGB-4, 3.70% due 8/15/2021 (a)(d) ..................... 5,760
7,000 Sacramento County, California TRAN, 4.50% due 9/30/1998 ................... 7,022
7,444 Sacramento Municipal Utility District, California, CP, 3.50%
due 5/08/1998 ............................................................. 7,444
3,700 San Bernardino, California, M/F Housing Revenue Refunding Bonds
(Village Crossing), VRDN, Series A, 3.65% due 2/01/2027 (a) ............... 3,700
6,000 San Bernardino County, California, Residential Mortgage Revenue
Refunding Bonds (Ramona Garden), VRDN, Series A, 3.40% due 2/01/2017 (a) .. 6,000
2,000 San Diego, California, IDR, Refunding (San Diego Gas & Electric), CP,
Series A, 3.40% due 6/15/1998 ............................................. 2,000
San Diego, California, M/F Housing Authority Revenue Bonds, VRDN (a):
7,540 (La Cima Apartments), Series K, 3.35% due 12/01/2008 ................ 7,540
17,050 (Nobel Court Apartments), 3.35% due 12/01/2008 ...................... 17,050
4,000 San Diego, California, Sewer Revenue Bonds, VRDN, Series SG-14, 3.62%
due 5/15/2020 (a)(b) ...................................................... 4,000
27,280 San Diego, California, TAN, Series A, 4.50% due 9/30/1998 ................. 27,364
3,000 San Diego, California, Unified School District, TRAN, Series B,
4.75% due 1/29/1999 ....................................................... 3,029
29,960 San Diego County, California, TRAN, 4.50% due 9/30/1998 ................... 30,052
</TABLE>
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CMA California Municipal Money Fund
Schedule of Investments as of March 31, 1998 (Concluded) (in Thousands)
================================================================================
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California San Francisco, California, City and County Airports Commission
(concluded) (San Francisco International Airport), VRDN (a):
$ 16,555 MSTR, AMT, Series SG-116, 3.67% due 5/01/2026 ....................... $ 16,555
3,800 MSTR, AMT, Series SGA-56, 3.70% due 5/01/2026 (b) ................... 3,800
3,645 Series SG-88, MSTR, 3.62% due 5/01/2021 (c) ......................... 3,645
12,590 Series SG-113, 3.62% due 5/01/2026 (c) .............................. 12,590
San Joaquin County, California, Transportation Authority, Sales Tax
Revenue Bonds, CP:
10,000 3.15% due 5/01/1998 ................................................. 10,000
5,000 3.40% due 5/01/1998 ................................................. 5,000
San Jose, California, M/F Housing Revenue Bonds, VRDN, Series A (a):
13,000 (Siena at Renaissance), AMT, 3.60% due 12/01/2029 ................... 13,000
6,360 (Timberwood), 3.40% due 2/01/2020 ................................... 6,360
2,000 San Jose-Santa Clara, California, Water Financing Authority, Sewer
Revenue Bonds, VRDN, Series SG-49, 3.62% due 11/15/2020 (a)(c) ............ 2,000
5,400 Santa Barbara County, California, TRAN, Series A, 4.50% due 10/01/1998 .... 5,419
8,690 Santa Clara County, California, TRAN, 4.75% due 10/01/1998 ................ 8,728
5,325 Santa Rosa, California, M/F Housing Revenue Bonds (Oak Creek Apartments
Project), VRDN, AMT, Series A, 3.70% due 6/01/2018 (a) .................... 5,325
3,550 Simi Valley, California, Community Redevelopment Agency, M/F Housing
Revenue Bonds (Ashlee Manor Project), VRDN, AMT, Series A, 3.70% due
10/01/2017 (a) ............................................................ 3,550
12,000 Simi Valley, California, M/F Housing Revenue Bonds (Shadowridge
Apartments), VRDN, 3.70% due 9/01/2019 (a) ................................ 12,000
8,290 Southern California Public Power Authority, Power Project Revenue Bonds,
VRDN, Series 90-A, 3.70% due 1/01/2007 (a) ................................ 8,290
3,100 Southern California Public Power Authority, Transmission Project Revenue
Refunding (Southern Transmission), VRDN, 3.25% due 7/01/2019 (a) .......... 3,100
State of California, CP:
15,000 3.10% due 4/13/1998 ................................................. 15,000
22,800 3.10% due 4/13/1998 ................................................. 22,800
35,800 3.45% due 4/16/1998 ................................................. 35,800
5,000 3.10% due 4/17/1998 ................................................. 5,000
12,000 3.40% due 4/20/1998 ................................................. 12,000
27,300 3.45% due 4/20/1998 ................................................. 27,300
17,500 3.65% due 5/01/1998 ................................................. 17,500
27,600 Victor Valley, California, Community College District, COP (Capital
Improvement Financing Project), VRDN, 3.65% due 12/01/2024 (a) ............ 27,600
- --------------------------------------------------------------------------------------------------------------------------
Puerto Rico-- Puerto Rico Commonwealth, Government Development Bank Revenue Bonds:
6.3% 14,160 3.25% due 4/09/1998 ................................................. 14,160
18,000 3.15% due 4/13/1998 ................................................. 18,000
10,000 3.25% due 4/15/1998 ................................................. 10,000
75,000 Puerto Rico Commonwealth, TRAN, Series A, 4.50% due 7/30/1998 ............. 75,204
8,760 Puerto Rico, Electric Power Authority, Power Revenue Bonds, MSTR, VRDN,
Series SGA-43, 3.60% due 7/01/2022 (a)(b) ................................. 8,760
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost--$1,990,953)--99.3% ............................... 1,990,953
Other Assets Less Liabilities--0.7% ....................................... 14,710
----------
Net Assets--100.0% ........................................................ $2,005,663
==========
==========================================================================================================================
</TABLE>
(a) The interest rate is subject to change periodically based on certain
indexes. The interest rate shown is the interest rate in effect at March 31,
1998.
(b) MBIA Insured.
(c) FGIC Insured.
(d) AMBAC Insured.
(e) FSA Insured.
(f) FNMA Collateralized.
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
CMA California Municipal Money Fund
Statement of Assets and Liabilities as of March 31, 1998
================================================================================
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (identified cost--$1,990,952,978*) (Note 1a) ... $ 1,990,952,978
Cash ................................................................. 31,500
Receivables:
Interest .......................................................... $ 14,415,331
Securities sold ................................................... 25,763 14,441,094
------------
Prepaid registration fees and other assets (Note 1d) ................. 1,798,072
---------------
Total assets ......................................................... 2,007,223,644
---------------
Liabilities:
Payables:
Investment adviser (Note 2) ....................................... 733,683
Distributor (Note 2) .............................................. 565,625 1,299,308
------------
Accrued expenses and other liabilities ............................... 261,504
---------------
Total liabilities .................................................... 1,560,812
---------------
Net Assets ........................................................... $ 2,005,662,832
===============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value,
unlimited number of shares authorized ................................ $ 200,662,264
Paid-in capital in excess of par ..................................... 1,805,958,716
Accumulated realized capital losses--net (Note 4) .................... (958,148)
---------------
Net Assets--Equivalent to $1.00 per share based on
2,006,622,639 shares of beneficial interest outstanding .............. $ 2,005,662,832
===============
</TABLE>
* Cost for Federal income tax purposes was $1,990,960,039. As of March 31,
1998, net unrealized depreciation for Federal income tax purposes amounted
to $7,061, all of which related to depreciated securities.
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
CMA California Municipal Money Fund
Statement of Operations for the Year Ended March 31, 1998
================================================================================
Investment Income (Note 1c):
Interest and amortization of premium earned ........... $62,786,633
Expenses:
Investment advisory fees (Note 2) ..................... $7,429,249
Distribution fees (Note 2) ............................ 2,160,142
Transfer agent fees (Note 2) .......................... 216,686
Registration fees (Note 1d) ........................... 168,311
Accounting services (Note 2) .......................... 134,365
Custodian fees ........................................ 98,656
Professional fees ..................................... 70,267
Trustees' fees and expenses ........................... 12,389
Pricing fees .......................................... 550
Other ................................................. 13,666
----------
Total expenses ........................................ 10,304,281
-----------
Investment income--net ................................ 52,482,352
Realized Loss on Investments--Net (Note 1c) ........... (44,912)
-----------
Net Increase in Net Assets Resulting from Operations .. $52,437,440
===========
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
CMA California Municipal Money Fund
Statements of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
For the Year Ended March 31,
----------------------------------
Increase (Decrease) in Net Assets: 1998 1997
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Investment income--net ............................................ $ 52,482,352 $ 42,120,588
Realized gain (loss) on investments--net .......................... (44,912) 26,624
--------------- ---------------
Net increase in net assets resulting from operations .............. 52,437,440 42,147,212
--------------- ---------------
Dividends to Shareholders (Note 1e):
Investment income--net ............................................ (52,480,433) (42,120,540)
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders (52,480,433) (42,120,540)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares .................................. 7,751,865,673 6,159,698,384
Net asset value of shares issued to shareholders in reinvestment of
dividends (Note 1e) ............................................... 52,479,878 42,121,016
--------------- ---------------
7,804,345,551 6,201,819,400
Cost of shares redeemed ........................................... (7,364,441,995) (6,057,183,986)
--------------- ---------------
Net increase in net assets derived from beneficial
interest transactions ............................................. 439,903,556 144,635,414
--------------- ---------------
Net Assets:
Total increase in net assets ...................................... 439,860,563 144,662,086
Beginning of year ................................................. 1,565,802,269 1,421,140,183
--------------- ---------------
End of year ....................................................... $ 2,005,662,832 $ 1,565,802,269
=============== ===============
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
- --------------------------------------------------------------------------------
CMA California Municipal Money Fund
Financial Highlights
================================================================================
<TABLE>
<CAPTION>
The following per share data and ratios
have been derived from information provided
in the financial statements. For the Year Ended March 31,
------------------------------------------------------------------
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Investment income--net ................... .03 .03 .03 .03 .02
---------- ---------- ---------- ---------- ----------
Total from investment operations ......... .03 .03 .03 .03 .02
---------- ---------- ---------- ---------- ----------
Less dividends from investment income--net (.03) (.03) (.03) (.03) (.02)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ............. $ 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 ................... 3.00% 2.85% 3.11% 2.62% 1.91%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of year (in thousands) ... $2,005,663 $1,565,802 $1,421,140 $1,168,234 $1,225,160
========== ========== ========== ========== ==========
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
- --------------------------------------------------------------------------------
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. 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.
(f) Reclassification--Generally accepted accounting principles require that
certain components of net assets be adjusted to reflect permanent differences
between financial and tax reporting. Accordingly, current year's permanent
book/tax differences of $1,919 have been reclassified between accumulated net
realized capital losses and undistributed net investment income. These
reclassifications have no effect on net assets or net asset value 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
13
<PAGE>
- --------------------------------------------------------------------------------
CMA California Municipal Money Fund
Notes to Financial Statements (Concluded)
================================================================================
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, 1998, the Fund had a net capital loss carryforward of approximately
$951,000, of which $433,000 expires in 2002, $476,000 expires in 2003 and
$42,000 expires in 2006. This amount will be available to offset a like amount
of any future taxable gains.
14
<PAGE>
- --------------------------------------------------------------------------------
CMA California Municipal Money Fund
Independent Auditors' Report
================================================================================
The Board of Trustees and Shareholders,
CMA California Municipal Money Fund of
CMA Multi-State Municipal Series Trust:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of CMA California Municipal Money Fund of CMA
Multi-State Municipal Series Trust as of March 31, 1998, the related statements
of operations for the year then ended and changes in net assets for each of the
years in the two-year period then ended, and the financial highlights for each
of the years in the five-year period then ended. These financial statements and
the financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at March
31, 1998 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of CMA California
Municipal Money Fund of CMA Multi-State Municipal Series Trust as of March 31,
1998, the results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
May 8, 1998
15
<PAGE>
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--3/98
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