[LOGO] CMA(R)
CMA CALIFORNIA
MUNICIPAL MONEY FUND
Semi-Annual Report
September 30, 1998
[LOGO] Merrill Lynch
<PAGE>
TO OUR SHAREHOLDERS:
For the six-month period ended September 30, 1998, CMA California Municipal
Money Fund paid shareholders a net annualized yield of 2.87%.* As of September
30, 1998, the Fund's 7-day yield was 2.94%.
Economic Environment and Investment Strategy
During the month of August 1998, after a delay of more than six weeks, the
Governor and legislature of the state of California finally passed a budget for
fiscal year 1999. The state has not had a timely budget since 1993. Unlike past
budget debates, which focused on the need to reduce spending and cut programs,
this year's delay was the result of a dispute on how to spend the state's $4.4
billion budget surplus. The budget was delayed because Governor Wilson pressed
for a reduction in motor vehicle license fees. Democratic legislators, on the
other hand, advocated an increase in public school spending and increases in
various social programs. Ultimately, Governor Wilson prevailed and implemented a
reduction in motor vehicle fees and also increased funding to public education.
The lack of a formal budget agreement, in tandem with other technical factors,
made investing for the Fund very difficult in the months of June and July.
Traditionally, the state of California and its municipalities enter the market
at this time to finance their budgetary needs for the year. SEC Rule 2a-7
diversification guidelines took effect on July 1, 1998, and the ensuing scramble
for diversification of assets forced California securities to command high
premiums, while yield spreads between the general market and California paper
widened dramatically to as much as 100 basis points (1.00%). Compounding the
problem was a "flight to quality," the result of investors seeking the safety of
US Government securities, which caused all money fund assets to swell even more
dramatically. Total assets in the tax-exempt money fund industry increased by
$26.4 billion to $178 billion in the past year, while assets in the California
tax-exempt money fund industry increased by more than $4.0 billion during the
same period. Total assets of CMA California Municipal Money Fund increased by
$250.0 million in the past 12 months.
Unfortunately, issuance of California municipal securities during the six-month
period ended September 30, 1998 did not keep up with demand in the marketplace.
The restructuring of many note issues sold in June and July to variable rate
products further changed the dynamics of the marketplace and, consequently,
provided us with very limited opportunities to extend our average portfolio
maturity and further diversify the Fund. Our June purchase of $100 million of
$850 million in Los Angeles County tax revenue anticipation notes allowed us to
temporarily extend our average portfolio maturity, but with large cash inflows,
this was quickly negated and
* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after all
expenses.
1
<PAGE>
our average portfolio maturity fell to the mid 30-day range. However, in
September, our inflows stabilized, and we were able to extend the average
portfolio maturity to the mid 60-day range with the purchase of state of
California revenue anticipation notes.
Unlike most of the year, when the yield curve provided little incentive to
extend, we felt that market conditions necessitated an easing of short-term
interest rates and that these purchases provided us with the opportunity to lock
in yields while maintaining liquidity in the Fund. In addition, the introduction
of supply into the market reduced the market premium for California securities
and contributed to a restoration of more traditional yield spreads relative to
other short-term tax-exempt securities. As in previous years, the introduction
of supply into the market also forced yields on other instruments to rise,
enabling us to further capitalize on this temporary event and further extend our
portfolio maturity with our commercial paper holdings. These purchases proved to
be fortuitous, since the Federal Reserve Board subsequently lowered the Federal
Funds rate by 25 basis points in late September, and then reduced interest rates
again in October by another 25 basis points. Consequently, our portfolio
strategy in the past six months contributed to the Fund's strong performance
relative to similar California tax-exempt funds, according to IBC's Money Fund
Report.
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
November 5, 1998
2
<PAGE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1998 (IN THOUSANDS)
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California-- $ 200 California Health Facilities Financing Authority Revenue Bonds, VRDN
98.5% (Pooled Loan Program), Series A, 3.60% due 6/01/2007 (a) ............................ $ 200
5,600 California Pollution Control Financing Authority, Environmental Improvement
Revenue Bonds (Atlantic Richfield Company Project), VRDN,
3.25% due 12/01/2032 (a) ............................................................ 5,600
California Pollution Control Financing Authority, PCR, Refunding
(Pacific Gas and Electric):
31,100 CP, Series E, 2.95% due 10/02/1998 ........................................... 31,100
5,900 CP, Series E, 3.20% due 1/22/1999 ............................................ 5,900
30,000 VRDN, AMT, Series B, 4.10% due 11/01/2026 (a) ................................ 30,000
29,600 VRDN, AMT, Series C, 4.15% due 11/01/2026 (a) ................................ 29,600
California Pollution Control Financing Authority, PCR (Southern
California Edison Co.):
2,100 TECP, Series B, 3% due 10/01/1998 ............................................ 2,100
15,700 TECP, Series D, 2.70% due 10/02/1998 ......................................... 15,700
3,000 VRDN, Series A, 4.15% due 2/28/2008 (a) ...................................... 3,000
19,100 VRDN, Series D, 4.15% due 2/28/2008 (a) ...................................... 19,100
California Pollution Control Financing Authority,
Resource Recovery Revenue Bonds, VRDN, AMT (a):
4,000 (Atlantic Richfield Company Project), Series A, 4.20% due 12/01/2024 ......... 4,000
21,800 (Delano Project), 4.20% due 8/01/2019 ........................................ 21,800
15,100 (Delano Project), Series 1991, 4.20% due 8/01/2019 ........................... 15,100
5,600 (Honey Lake Power Project), 4.20% due 9/01/2018 .............................. 5,600
24,900 Refunding (Ultra Power Malaga Project), Series A, 4.20% due 4/01/2017 ........ 24,900
3,100 Refunding (Ultra Power Malaga Project), Series B, 4.20% due 4/01/2017 ........ 3,100
15,200 Refunding (Ultra Power Rocklin Project), Series A, 4.20% due 6/01/2017 ....... 15,200
5,100 Refunding (Ultra Power Rocklin Project), Series B, 4.20% due 6/01/2017 ....... 5,100
3,385 California Pollution Control Financing Authority, Solid Waste Disposal
Revenue Bonds (Edco Disposal Corporation Project), VRDN, AMT, Series A,
3.50% due 10/01/2016 (a) ............................................................ 3,385
4,400 California Pollution Control Financing Authority, Solid Waste Disposal
Revenue Bonds (Shell Martinez Refining), VRDN, AMT, 4.10%
due 10/01/2031 (a) .................................................................. 4,400
1,000 California Pollution Control Financing Authority, Solid Waste Disposal
Revenue Bonds (Shell Oil Co. Martinez Project), VRDN, AMT, Series B,
4.10% due 12/01/2024 (a) ............................................................ 1,000
25,000 California Public Capital Improvements Financing
Authority Revenue Bonds (Pooled Loan Project), Series D,
3.45% due 12/15/1998 ................................................................ 25,000
California State Economic Development Financing Authority, IDR, VRDN (a):
4,000 (Harvel Plastics Inc. Project), 4.15% due 3/01/2010 .......................... 4,000
5,000 (Kuhnash Properties/Arkay Project), AMT, 3.80% due 4/01/2017 ................. 5,000
</TABLE>
Portfolio Abbreviations for CMA California Municipal Money Fund
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
CP Commercial Paper
HFA Housing Finance Agency
IDR Industrial Development Revenue Bonds
M/F Multi-Family
MSTR Municipal Securities Trust Receipts
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
TECP Tax-Exempt Commercial Paper
TRAN Tax Revenue Anticipation Notes
UT Unlimited Tax
VRDN Variable Rate Demand Notes
3
<PAGE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1998 (CONTINUED) (IN THOUSANDS)
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California California State Economic Development Financing Authority Revenue Bonds
(continued) (Independent Systems Project), VRDN (a):
$ 4,000 Series A, 4% due 4/01/2008 ................................................... $ 4,000
6,700 Series B, 4% due 4/01/2008 ................................................... 6,700
95,000 California State, RAN, 4% due 6/30/1999 ............................................. 95,587
California Statewide Community Development Authority,
M/F Revenue Bonds, VRDN, AMT (a):
10,000 (Canyon Creeks Apartments), Series C, 3.50% due 6/15/2025 (f) ................ 10,000
3,660 (Greenback Manor Apartments), Series A, 3.65% due 2/01/2028 .................. 3,660
4,200 (Kimberly Woods), Series B, 3.50% due 6/15/2025 (f) .......................... 4,200
10,300 California Statewide Community Development Authority Solid Waste
Facilities Revenue Bonds (Chevron U.S.A. Inc. Project), VRDN, AMT,
4.15% due 12/15/2024 (a) ............................................................ 10,300
100,000 California Transportation Finance Authority, VRDN, 3.65%
due 10/01/2027 (a)(e) ............................................................. 100,000
Chula Vista, California, IDR, Refunding (San Diego Gas & Electric Co.),
VRDN, AMT (a):
14,000 Series A, 4.10% due 3/01/2023 ................................................ 14,000
22,400 Series B, 4.20% due 12/01/2021 ............................................... 22,400
Chula Vista, California, IDR (San Diego Gas & Electric Co.), CP, AMT:
20,000 Series D, 3% due 10/02/1998 .................................................. 20,000
20,000 Series E, 3% due 10/02/1998 .................................................. 20,000
10,000 Series E, 3.60% due 10/13/1998 ............................................... 10,000
Contra Costa, California, Water District, CP, Series A:
10,000 2.95% due 10/01/1998 ......................................................... 10,000
7,000 3.40% due 10/16/1998 ......................................................... 7,000
15,525 Contra Costa, California, Water District Revenue Bonds, MSTR, VRDN,
Series SGA-24, 3.95% due 10/01/2019 (a)(b) .......................................... 15,525
25,000 Contra Costa County, California, TRAN, MSTR, Series 58, 3.57% due 10/05/1998 ........ 25,000
5,800 Dublin, California, M/F Housing Authority Revenue Bonds, VRDN, Series A,
AMT, 3.20% due 6/01/2028 (a) ........................................................ 5,800
Eagle Tax-Exempt Trust, VRDN(a):
14,220 California HFA Mortgage Revenue Bonds, Series 1994 C-6, 3.92%
due 8/01/2017 ................................................................ 14,220
16,355 California HFA Mortgage Revenue Bonds, Series 1994 C-7, 3.92%
due 8/01/2023 ................................................................ 16,355
9,300 California State, Series 97-C, 3.92% due 11/01/2020 .......................... 9,300
2,660 Series 94, 3.92% due 9/01/2003 ............................................... 2,660
10,390 Series S94-97, 3.92% due 2/01/2006 ........................................... 10,390
East Bay, California, Municipal Utility District, Wastewater Treatment
System Revenue Bonds, CP:
16,400 3.15% due 1/21/1999 .......................................................... 16,400
18,600 3.20% due 1/22/1999 .......................................................... 18,600
7,050 Fontana, California, M/F Housing Revenue Bonds (Springtime Apartments
Project), VRDN, Series A, 3.90% due 12/01/2016 (a) .................................. 7,050
12,150 Fremont, California, Unified School District (Alameda County), MSTR,
VRDN, UT, Series SGA-37, 3.95% due 8/01/2020 (a)(b) ................................. 12,150
9,000 Fremont, California, Unified School District (Alameda County), TRAN,
4% due 7/30/1999 .................................................................... 9,029
6,620 Highland, California, Redevelopment Agency, M/F Housing Revenue Bonds
(Jeffery Court Senior Apartments), VRDN, 3.75% due 3/01/2028 (a) .................... 6,620
20,000 Kern County, California, Superintendent of Schools, COP, VRDN, Series A,
3.85% due 12/01/2021 (a) ............................................................ 20,000
</TABLE>
4
<PAGE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1998 (CONTINUED) (IN THOUSANDS)
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California $ 18,730 Loma Linda, California, M/F Housing Revenue Bonds (Loma Linda Springs
(continued) Apartments), VRDN, 3.75% due 7/01/2019 (a) ................................... $ 18,730
Long Beach, California, Harbor Revenue Bonds, CP, AMT, Series A:
17,000 3% due 10/02/1998 ............................................................ 17,000
16,500 3.05% due 10/02/1998 ......................................................... 16,500
Long Beach, California, TRAN:
25,000 4.50% due 10/08/1998 ......................................................... 25,004
8,500 4% due 10/05/1999 ............................................................ 8,569
3,000 Los Angeles, California, Department of Airports, Airport Revenue
Municipal Trust Bonds, VRDN, AMT, Series SG-61, 3.95%
due 5/15/2020 (a)(c) ................................................................ 3,000
Los Angeles, California, Department of Water and Power Revenue Bonds, CP:
27,700 2.75% due 10/01/1998 ......................................................... 27,700
30,300 2.95% due 10/01/1998 ......................................................... 30,300
20,000 2.70% due 10/02/1998 ......................................................... 20,000
Los Angeles, California, Department of Water and Power
Revenue Bonds (Electric Plant), MSTR, VRDN (a):
4,075 Series SGA-4, 3.95% due 11/15/2019 ........................................... 4,075
4,005 Series SGA-6, 3.95% due 11/15/2019 ........................................... 4,005
5,000 Los Angeles, California, Harbor Department Revenue Bonds, VRDN, AMT,
Series SG-59, 3.95% due 8/01/2026 (a)(b) ............................................ 5,000
7,200 Los Angeles, California, M/F Housing Revenue Bonds (Casden Project), VRDN,
Series K, 3.33% due 7/01/2010 (a) ................................................... 7,200
8,600 Los Angeles, California, Unified School District, UT, Series B, 4.25%
due 7/01/1999 (c) ................................................................... 8,650
12,445 Los Angeles, California, Unified School District, TRAN, Series B, 4.50%
due 10/01/1998 ...................................................................... 12,445
Los Angeles, California, Wastewater System Revenue Bonds, CP:
15,000 3.15% due 10/01/1998 ......................................................... 15,000
5,400 2.70% due 10/02/1998 ......................................................... 5,400
10,000 3.20% due 1/20/1999 .......................................................... 10,000
13,300 Los Angeles, California, Wastewater System Revenue Bonds, VRDN, Series A-67,
25% due 6/01/2028 (a) ............................................................... 13,300
Los Angeles County, California, Capital Asset Leasing Corporation,
Leasehold Revenue Bonds, CP:
6,500 2.75% due 10/01/1998 ......................................................... 6,500
7,000 2.90% due 10/02/1998 ......................................................... 7,000
21,330 2.95% due 10/02/1998 ......................................................... 21,330
38,475 Los Angeles County, California, Metropolitan Transportation Authority
Revenue Bonds, MSTR, VRDN, Series SGB-1, 3.97% due 7/01/2025 (a)(e) ................. 38,475
16,000 Los Angeles County, California, Metropolitan Transportation Authority
Revenue Bonds, VRDN, Series SGB-2, 3.97% due 7/01/2021 (a)(e) ....................... 16,000
Los Angeles County, California, Metropolitan Transportation Authority,
Sales Tax Revenue Bonds, VRDN (a):
6,000 Series SG-46, 3.93% due 7/01/2017 (d) ........................................ 6,000
50,820 Series SG-55, 3.93% due 7/01/2018 (b) ........................................ 50,820
5,700 Los Angeles County, California, M/F Housing Revenue Bonds (Park Sierra
Project), VRDN, AMT, 3.35% due 12/01/2008 (a) ....................................... 5,700
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) ................................................................... 1,002
109,000 Los Angeles County, California, TRAN, Series A, 4.50% due 6/30/1999 ................. 109,666
</TABLE>
5
<PAGE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1998 (CONTINUED) (IN THOUSANDS)
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California Metropolitan Water District (Southern California), CP, Series B:
(continued) $ 7,400 2.95% due 10/01/1998 ......................................................... $ 7,400
21,800 3.25% due 10/01/1998 ......................................................... 21,800
13,000 2.95% due 10/02/1998 ......................................................... 13,000
7,500 3.25% due 11/06/1998 ......................................................... 7,500
1,600 3.20% due 1/22/1999 .......................................................... 1,600
14,620 Metropolitan Water District (Southern California), Waterworks Revenue
Bonds, MSTR, VRDN, Series SGA-14, 3.95% due 7/01/2021 (a)(b) ........................ 14,620
7,435 Monrovia, California, Unified School District, MSTR, VRDN, Series 1997,
SGA-70, 3.95% due 8/01/2022 (a)(b) .................................................. 7,435
21,150 Northern California Power Agency, Public Revenue Bonds, Series A-42,
VRDN, 4.35% due 7/01/2032 (a) ....................................................... 21,150
41,000 Oakland, California, TRAN, 4.05% due 9/30/1999 ...................................... 41,000
5,000 Pittsburg, California, Mortgage Obligations, Refunding, VRDN, Series A,
3.90% due 12/30/2031 (a) ............................................................ 5,000
13,570 Port Oakland, California, Port Revenue Bonds, MSTR, VRDN, AMT,
Series SG-112, 3.35% due 11/01/2025 (a)(b) .......................................... 13,570
7,340 Redlands, California, COP, Refunding (Sewer Facilities Project), VRDN,
3.40% due 9/01/2017 (a)(c) .......................................................... 7,340
3,150 Redlands, California, M/F Housing Revenue Bonds (Orange
Village Apartments Project), VRDN, AMT, Series A, 3.50% due 8/01/2018 (a) ........... 3,150
Regents of the University of California, CP:
20,000 2.95% due 10/01/1998 ......................................................... 20,000
29,000 3% due 10/01/1998 ............................................................ 29,000
10,000 2.70% due 10/02/1998 ......................................................... 10,000
34,500 3.40% due 10/16/1998 ......................................................... 34,500
9,400 3.20% due 12/10/1998 ......................................................... 9,400
9,970 Riverside County, California, School Financing Authority, RAN, 4.50%
due 10/01/1998 ...................................................................... 9,970
8,500 Riverside County, California, TRAN, 4.50% due 9/30/1999 ............................. 8,589
20,000 Sacramento, California, City Unified School District, TRAN, 4.25%
due 12/01/1998 ...................................................................... 20,015
Sacramento, California, Municipal Utility District, Electrical Revenue
Bonds, VRDN (a):
9,400 MSTR, Series SGA-5, 3.95% due 11/15/2006 ..................................... 9,400
5,760 Series SGB-4, 3.97% due 8/15/2021 (d) ........................................ 5,760
25,000 Sacramento County, California, MSTR, Series 60, TRAN, 3.57% due 10/06/1998 .......... 25,000
5,900 San Bernardino County, California, Residential Mortgage Revenue Refunding
Bonds (Ramona Garden), VRDN, Series A, 3.70% due 2/01/2017 (a) ...................... 5,900
7,000 San Diego, California, Sewer Revenue Bonds, VRDN, Series SG-14, 3.90%
due 5/15/2020 (a)(b) ................................................................ 7,000
5,300 San Diego, California, TRAN, Series A, 4.50% due 9/30/1999 .......................... 5,356
San Diego, California, Unified School District, TRAN:
4,200 Series A, 4.50% due 10/01/1999 ............................................... 4,244
3,000 Series B, 4.75% due 1/29/1999 ................................................ 3,011
San Francisco, California, City and County Airports Commission
(San Francisco International Airport), VRDN (a):
3,800 MSTR, AMT, Series SGA-56, 4% due 5/01/2026 (b) ............................... 3,800
28,005 MSTR, AMT, Series SG-115, 3.35% due 5/01/2020 ................................ 28,005
16,555 MSTR, AMT, Series SG-116, 3.35% due 5/01/2026 ................................ 16,555
18,590 MSTR, Series SG-113, 3.30% due 5/01/2026 (c) ................................. 18,590
3,645 Series SG-88, 3.90% due 5/01/2021 (c) ........................................ 3,645
1,000 San Francisco, California, City and County Public Safety Improvement Projects,
UT, Series C, 8% due 6/15/1999 ...................................................... 1,031
</TABLE>
6
<PAGE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1998 (CONTINUED) (IN THOUSANDS)
<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California $ 13,000 San Jose, California, M/F Housing Revenue Bonds (Siena at Renaissance),
(concluded) VRDN, Series A, 3.55% due 12/01/2029 (a) ............................................ $ 13,000
2,000 San Jose-Santa Clara, California, Water Financing Authority, Sewer Revenue
Bonds, VRDN, Series SG-49, 3.90% due 11/15/2020 (a)(c) .............................. 2,000
5,400 Santa Barbara County, California, TRAN, Series A, 4.50% due 10/01/1998 .............. 5,400
Santa Clara County, California, TRAN:
8,690 4.75% due 10/01/1998 ......................................................... 8,690
2,500 4.50% due 10/01/1999 ......................................................... 2,532
8,315 Santa Cruz County, California, Public Financing Authority, MSTR, VRDN,
Series SG-23, 3.93% due 9/01/2023 (a)(b) ............................................ 8,315
5,225 Santa Rosa, California, M/F Housing Revenue Bonds (Oak Creek Apartments
Project), VRDN, AMT, Series A, 3.35% due 6/01/2018 (a) .............................. 5,225
3,550 Simi Valley, California, Community Redevelopment Agency, M/F Housing
Revenue Bonds (Ashlee Manor Project), VRDN, AMT, Series A, 3.90%
due 10/01/2017 (a) .................................................................. 3,550
12,000 Simi Valley, California, M/F Housing Revenue Bonds (Shadowridge
Apartments), VRDN, 3.90% due 9/01/2019 (a) .......................................... 12,000
6,765 Southern California Public Power Authority, Power Project Revenue Bonds,
MSTR, VRDN, Series SG-35, 3.90% due 7/01/2012 (a)(d) ................................ 6,765
1,300 Southern California Public Power Authority, Power Project Revenue
Refunding Bonds (Sub-Palo Verde Project), VRDN, Series C, 3.30% due
07/01/2017 (a)(d) ................................................................... 1,300
5,000 Southern California Public Power Authority, Transmission Project Revenue
funding (Southern Transmission), VRDN, Series A, 4% due 7/01/1999 (a)(b) ............ 5,012
State of California, CP:
3,500 3.15% due 10/01/1998 ......................................................... 3,500
12,000 3.25% due 10/01/1998 ......................................................... 12,000
10,000 3.25% due 12/01/1998 ......................................................... 10,000
36,000 3.20% due 12/09/1998 ......................................................... 36,000
5,500 3.25% due 12/11/1998 ......................................................... 5,500
25,000 3.20% due 12/16/1998 ......................................................... 25,000
10,900 3.25% due 12/17/1998 ......................................................... 10,900
5,500 3.25% due 12/18/1998 ......................................................... 5,500
4,500 3.25% due 12/22/1998 ......................................................... 4,500
- -------------------------------------------------------------------------------------------------------------------------
Puerto Rico- Puerto Rico Commonwealth, Government Development Bank Revenue Bonds:
3.7% 17,200 3% due 10/01/1998 ............................................................ 17,200
2,926 3.15% due 10/01/1998 ......................................................... 2,926
12,758 3.20% due 10/15/1998 ......................................................... 12,758
3,000 3.50% due 10/19/1998 ......................................................... 3,000
7,500 3.25% due 12/07/1998 ......................................................... 7,500
8,143 3.15% due 12/10/1998 ......................................................... 8,143
8,664 3.20% due 12/10/1998 ......................................................... 8,664
11,800 Puerto Rico, Electric Power Authority, Power Revenue Bonds, MSTR, VRDN,
Series SGA-44, 3.87% due 7/01/2023 (a) .............................................. 11,800
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost--$2,023,218*)--102.2% ....................................... 2,023,218
Liabilities in Excess of Other Assets--(2.2%) ....................................... (42,872)
----------
Net Assets--100.0% .................................................................. $1,980,346
==========
=========================================================================================================================
</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
September 30, 1998.
(b) MBIA Insured.
(c) FGIC Insured.
(d) AMBAC Insured.
(e) FSA Insured.
(f) FNMA Collateralized.
* Cost for Federal income tax purposes.
See Notes to Financial Statements.
7
<PAGE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF SEPTEMBER 30, 1998
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (identified cost--$2,023,218,108) (Note 1a) .... $ 2,023,218,108
Cash ................................................................. 97,873
Receivables:
Securities sold .................................................... $ (50,841,643
Interest ........................................................... 11,230,708 62,072,351
---------------
Prepaid registration fees and other assets (Note 1d) ................. 501,767
---------------
Total assets ......................................................... 2,085,890,099
---------------
Liabilities:
Payables:
Securities purchased ............................................... 104,156,120
Investment adviser (Note 2) ........................................ 718,346
Distributor (Note 2) ............................................... 489,412
Beneficial interest redeemed ....................................... 2,319 105,366,197
---------------
Accrued expenses and other liabilities ............................... 178,375
---------------
Total liabilities .................................................... 105,544,572
---------------
Net Assets ........................................................... $ 1,980,345,527
===============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of
shares authorized .................................................... $2,198,131,973
Paid-in capital in excess of par ..................................... 1,783,186,098
Accumulated realized capital losses--net (Note 4) .................... (972,544)
---------------
Net Assets--Equivalent to $1.00 per share based on 1,981,319,729
shares of beneficial interest outstanding ............................ $1,980,345,527
===============
</TABLE>
See Notes to Financial Statements.
CMA CALIFORNIA MUNICIPAL MONEY FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned ... $ 34,824,605
Expenses:
Investment advisory fees (Note 2) .......................... $ 4,241,840
Distribution fees (Note 2) ................................. 1,260,467
Transfer agent fees (Note 2) ............................... 107,875
Accounting services (Note 2) ............................... 73,245
Registration fees (Note 1d) ................................ 72,917
Custodian fees ............................................. 47,091
Printing and shareholder reports ........................... 32,151
Professional fees .......................................... 30,706
Pricing fees ............................................... 8,385
Trustees' fees and expenses ................................ 6,282
Other ...................................................... 8,664
------------
Total expenses ............................................. 5,889,623
------------
Investment income--net ..................................... 28,934,982
Realized Loss on Investments--Net (Note 1c) ................ (14,396)
------------
Net Increase in Net Assets Resulting from Operations ....... $ 28,920,586
============
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the For the
Six Months Year
Ended Ended
September 30, March 31,
Increase (Decrease) in Net Assets: 1998 1998
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Investment income--net ............................................ $ 28,934,982 $ 52,482,352
Realized loss on investments--net ................................. (14,396) (44,912)
--------------- ---------------
Net increase in net assets resulting from operations .............. 28,920,586 52,437,440
--------------- ---------------
Dividends to Shareholders (Note 1e):
Investment income--net ............................................ (28,934,982) (52,480,433)
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders (28,934,982) (52,480,433)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares .................................. 4,279,579,312 7,751,865,673
Net asset value of shares issued to shareholders in reinvestment of
dividends (Note 1e) ............................................... 28,935,656 52,479,878
--------------- ---------------
4,308,514,968 7,804,345,551
Cost of shares redeemed ........................................... (4,333,817,877) (7,364,441,995)
--------------- ---------------
Net increase (decrease) in net assets derived from beneficial
interest transactions ............................................. (25,302,909) 439,903,556
--------------- ---------------
Net Assets:
Total increase (decrease) in net assets ........................... (25,317,305) 439,860,563
Beginning of period ............................................... 2,005,662,832 1,565,802,269
--------------- ---------------
End of period ..................................................... $ 1,980,345,527 $ 2,005,662,832
=============== ===============
</TABLE>
See Notes to Financial Statements.
CMA CALIFORNIA MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
The following per share data and ratios have For the
been derived from information provided in the Six Months
financial statements. Ended For the Year Ended March 31,
September 30, --------------------------------------------------------
Increase (Decrease) in Net Asset Value: 1998 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<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 ................... .01 .03 .03 .03 .03
---------- ---------- ---------- ---------- ----------
Total from investment operations ......... .01 .03 .03 .03 .03
---------- ---------- ---------- ---------- ----------
Less dividends from investment income--net (.01) (.03) (.03) (.03) (.03)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Investment Return .................. 2.87%* 3.06% 2.90% 3.15% 2.66%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses ................................. .58%* .59% .60% .64% .63%
========== ========== ========== ========== ==========
Investment income--net ................... 2.85%* 3.00% 2.85% 3.11% 2.62%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of period (in thousands) . $1,980,346 $2,005,663 $1,565,802 $1,421,140 $1,168,234
========== ========== ========== ========== ==========
</TABLE>
* Annualized.
See Notes to Financial Statements.
9
<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. 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 share- holders--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 carry forward. 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
10
<PAGE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
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.
Financial Data Services, Inc. ("FDS"), 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, FDS, 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.
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
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].
11
<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. An
investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other Government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund. 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--9/98
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