CMA
CMA Pennsylvania
Municipal Money Fund
Semi-Annual Report
September 30, 1994
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.
CMA Pennsylvania
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011
<PAGE>
TO OUR SHAREHOLDERS:
For the six-month period ended September 30, 1994, CMA Pennsylvania
Municipal Money Fund paid shareholders a net annualized yield of
2.23%*. As of September 30, 1994, the Fund's 7-day yield was 2.79%.
The Environment
Concerns of increasing inflationary pressures continued to prompt
volatility in the US stock and bond markets during the July--
September period. In addition, the weakness of the US dollar in
foreign exchange markets caused intermittent stock and bond market
declines during the period. While the immediate concerns regarding
the US dollar had diminished by late July, the possibility of
continued tightening by the Federal Reserve Board persisted for most
of the period. However, a lower-than-expected rate of growth
reported for the US economy during the second calendar quarter
allayed inflationary concerns to some degree, despite the fifth
increase this year in short-term interest rates made by the central
bank in mid-August. Inflationary expectations surfaced again with
the announcement of significant upward revision in industrial
production and capacity utilization for the May--July period. When
the central bank did not raise short-term interest rates at the late
September Federal Open Market Committee meeting, financial markets
rallied on the expectation that the US economy was not overheating
and therefore significant further monetary policy tightening would
not be necessary.
Despite the stronger-than-expected industrial production results,
other economic data suggest that while the economic recovery is
continuing, it is losing some momentum. Consumer spending is
increasing, but at a relatively slow pace, and existing home sales
may have peaked. Inflation remains subdued at the retail level. In
the industrial sector, the sharp increase in manufacturing
production in August was largely the result of a strong increase in
motor vehicle assemblies, which may level off in the weeks ahead. On
balance, it appears that the growth in US industry is progressing at
a steady, modest rate.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
Despite evidence of a moderating trend in the US economy, Chairman
Greenspan indicated in his July Humphrey-Hawkins testimony that the
central bank would prefer to err on the side of too much monetary
tightening rather than too little. In the weeks ahead, investors
will continue to assess economic data and inflationary trends in
order to gauge whether further increases in short-term interest
rates are imminent. Continued indications of moderate and
sustainable levels of economic growth would be positive for the US
capital markets.
<PAGE>
Investment Outlook and Strategy
During the six-month period ended September 30, 1994, the US economy
continued to surprise investors with its resiliency. Manufacturing
provided a strong catalyst for growth, and continued strength in
housing and automobile sales also provided the impetus for the
Federal Reserve Board to continue the restrictive monetary policy
initiated in February. This was accomplished by raising the Federal
Funds rate by 25 basis points (0.25%) to 3.75% in April, with more
aggressive 50 basis point increases in May and August to its current
rate of 4.75%. In addition, the Federal Reserve Board raised the
discount rate by 50 basis points in both May and August.
Additionally, during the period the yield on the one-year US
Treasury bill rose approximately 155 points to 5.95% by September
30, 1994.
The Commonwealth of Pennsylvania continued to benefit from the
current economic expansion during the six-month period ended
September 30, 1994. Manufacturing, led by automobile production,
enabled the Commonwealth to prosper indirectly through related
industries, such as steel production. In addition, growth in trade-
related, as well as medical and healthcare services, helped the
Commonwealth diversify its economy away from its traditional heavy
industrial base. Finally, the long-standing agricultural base
continued to be a contributor to the Commonwealth's stability, since
Pennsylvania ranks in the top ten states in production of various
agricultural products. However, future growth remains a question as
the Federal Reserve Board continued to tighten monetary policy to
curb economic growth and ease inflationary pressures.
Positive economic growth combined with prudent fiscal management
enabled the Commonwealth to end its fiscal year 1994 on target with
original revenue and spending estimates while recording a $302
million surplus. This surplus will be used in the fiscal 1995 budget
to assist low-income working families and businesses, and to meet in-
creased spending needs. The enacted fiscal 1995 budget calls for an
increase of approximately 4% over fiscal year 1994 to $15.7 billion.
This budget reduces personal income taxes for low-income working
families by increasing their exemptions. It also reduces small
business taxes and increases spending for education, jobs and human
services.
Although the Commonwealth's tax revenue collections met original
budget estimates, the Commonwealth is still expected to issue its
annual Tax Anticipation Notes (TANs) in the amount of $600 million
in late October to address short-term financing needs. These TANs
will mature June 30, 1995, and represent an increase of 50% over
last year's total issuance. The various Pennsylvania school
districts issued their annual Tax and Revenue Anticipation Notes
(TRANs) during the Fund's reporting period. The total issuance of
these Pennsylvania school district TRANs declined approximately 22%
to $508 million from the comparable period last year.
<PAGE>
CMA Pennsylvania Municipal Money Fund maintained a somewhat
defensive strategy during the six-month period ended September 30,
1994. The average portfolio maturity was maintained in the 50-day
range for the majority of the six-month period ended September 30,
1994. Unlike previous years, we did not purchase any local school
district TRANs. Instead, after the Federal Reserve Board raised
interest rates, we purchased higher-yielding securities bought by
the various regional banks for diversification purposes. We continue
to closely monitor credit quality while seeking to offer
shareholders an attractive tax-exempt yield.
In Conclusion
We thank you for your support of CMA Pennsylvania Municipal Money
Fund, and we look forward to serving your investment needs in the
future.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President and Portfolio Manager
October 21, 1994
Portfolio Abbreviations for CMA Pennsylvania Municipal Money Fund
ACES SM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
CP Commercial Paper
GO General Obligation Bonds
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
S/F Single-Family
TRAN Tax Revenue Anticipation Notes
UPDATES Unit Price Daily Adjustable Tax-Exempt Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Pennsylvania-- Allegheny County, Pennsylvania, Allegheny Hospital Development Authority
99.3% Revenue Bonds, VRDN (a):
$ 1,800 (Children's Hospital), Series B, 3.55% due 1/01/2021 $ 1,800
300 (Presbyterian University Health System), Series A, 3.50% due 3/01/2020 300
1,800 Refunding (Harmarville Rehabilitation Center Project), 3.50% due 7/01/2007 1,800
Allegheny County, Pennsylvania, IDA, PCR (Duquesne Light Project), CP, Series A:
6,500 2.80% due 10/20/1994 6,500
2,000 Refunding, 3.45% due 1/18/1995 2,000
7,000 Allegheny County, Pennsylvania, Port Authority Grant Anticipation Notes,
4.10% due 7/03/1995 7,000
Beaver County, Pennsylvania, IDA, PCR (Duquesne Light Project):
2,100 AMT, CP, Series A, 3.40% due 11/17/1994 2,100
900 Refunding (Beaver Valley), VRDN, Series A, 3.80% due 8/01/2020 (a) 900
1,300 Refunding (Mansfield), VRDN, Series B, 3.80% due 8/01/2009 (a) 1,300
2,000 Beaver County, Pennsylvania, IDA, PCR, Refunding (Toledo Edison Project), CP,
Series E, 3.20% due 11/09/1994 2,000
2,765 Berks County, Pennsylvania, IDA, IDR (Valley Forge Company, Inc. Project),
VRDN, AMT, Series A, 4.20% due 9/01/2006 (a) 2,765
1,250 Berks County, Pennsylvania, IDA, Revenue Bonds (Manufacturing Facilities--
Bachman Company Project), VRDN, AMT, 4.20% due 12/01/2014 (a) 1,250
2,900 Berks County, Pennsylvania, TRAN, 2.70% due 12/30/1994 2,900
2,000 Bucks County, Pennsylvania, IDA, Revenue Bonds (Edgecomb Metal Co.), VRDN,
3.675% due 10/01/2009 (a) 2,000
Bucks County, Pennsylvania, IDA, Revenue Bonds, VRDN, AMT (a):
2,445 (DBL H Plastic Project), 4.20% due 10/01/2008 2,445
1,710 (Pennsylvania Associates Project), 4.20% due 12/15/2003 1,711
Cambria County, Pennsylvania, IDA, Resource Recovery Revenue Bonds
(Cambria Cogen Project), VRDN, AMT (a):
2,400 Series V-1, 3.85% due 9/01/2019 2,400
1,000 Series V-2, 3.85% due 9/01/2019 1,000
Carbon County, Pennsylvania, IDA, Resource Recovery Revenue Bonds (Panther
Creek Partners), CP, AMT:
1,000 Series 91, 3.15% due 10/21/1994 1,000
1,000 Series A, 3.10% due 10/21/1994 1,000
2,600 Series A, 3.40% due 11/16/1994 2,600
2,550 Series B, 3.40% due 11/17/1994 2,550
1,600 Cumberland County, Pennsylvania, IDA, IDR (Lane Enterprises Project), VRDN,
AMT, 3.80% due 8/01/2004 (a) 1,600
3,235 Cumberland County, Pennsylvania, Municipal Authority, Revenue Refunding Bonds
(United Methodist Homes for the Aging), VRDN, 3.70% due 6/01/2019 (a) 3,235
5,400 Delaware County, Pennsylvania, Health Care Authority Revenue Bonds (Capital
Asset), VRDN, Series B, 3.85% due 7/01/2015 (a) 5,400
8,000 Delaware County, Pennsylvania, IDA, PCR (BP Oil Inc. Project), CP, UPDATES,
3.20% due 10/03/1994 (a) 8,000
</TABLE>
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Pennsylvania Delaware County, Pennsylvania, IDA, PCR, Refunding (Philadelphia Electric
(continued) Company), CP:
$ 4,000 Series A, 3.05% due 10/13/1994 $ 4,000
4,000 Series B, 3.30% due 11/17/1994 4,000
7,000 Series C, 3.10% due 10/13/1994 7,000
Eagle Tax Exempt Trust, Pennsylvania, VRDN (a):
4,300 Series 94-3803, 3.87% due 5/01/2008 4,300
6,100 Series A, 3.67% due 7/01/2025 6,100
4,000 Erie County, Pennsylvania, IDA, Revenue Bonds (McInnes Steel Co.), VRDN, AMT,
4% due 11/01/2001 (a) 4,000
7,000 Geisinger, Pennsylvania, Health Systems Authority Revenue Bonds, VRDN,
Series B, 3.80% due 7/01/2022 (a) 7,000
350 Lehigh County, Pennsylvania, Sewer Authority Revenue Bonds, VRDN, 1985
Series B, 3.55% due 3/15/2005 (a) 350
1,000 Montgomery County, Pennsylvania, GO, UT, 3.25% due 10/15/1994 1,000
3,195 Montgomery County, Pennsylvania, Higher Education and Health Authority
Revenue Bonds (Pottstown Healthcare Corporation), VRDN, 3.60% due
12/01/2002 (a) 3,195
1,700 Montgomery County, Pennsylvania, IDA, Revenue Bonds (Merck & Co. Project),
VRDN, Series A, 4.05% due 10/01/2017 1,700
3,850 Montour County, Pennsylvania, IDA, PCR (Merck & Co. Project), VRDN, Series A,
3.80% due 10/01/2003 (a) 3,850
3,200 Northampton County, Pennsylvania, IDA, Resource Recovery Revenue Bonds
(Glendon Energy Company Project), AMT, Series A, 3.75% due 10/01/1994 3,200
1,455 Northampton County, Pennsylvania, IDA, Revenue Refunding Bonds
(Manufacturing Facilities--Victoria Vogue Project), VRDN, AMT, 4.20% due
4/01/2005 (a) 1,455
Pennsylvania Economic Development Financing Authority, Economic Development
Revenue Bonds, VRDN (a):
3,200 AMT, Series B2, 3.85% due 12/01/2008 3,200
1,000 AMT, Series D4, 3.85% due 12/01/1997 1,000
900 AMT, Series D10, 3.85% due 7/01/2011 900
350 (Carson Industries Project), AMT, Series B2, 3.85% due 6/01/2000 350
1,400 (Kerner Co. Project), Series B4, 3.85% due 6/01/2007 1,400
2,100 (Kyowa America Project), AMT, Series B5, 3.85% due 6/01/2002 2,100
1,100 (Robert & Karen Wickerman Project), AMT, Series B7, 3.85% due 5/01/2005 1,100
1,000 Series A1, 3.85% due 8/01/2004 1,000
1,000 Series A4, 3.85% due 8/01/2001 1,000
450 (Winter Welding Project), AMT, Series B8, 3.85% due 6/01/2007 450
12,950 Pennsylvania Energy Development Authority, Energy Development Revenue
Bonds (B&W Ebensburg Project), VRDN, AMT, 3.70% due 12/01/2011 (a) 12,950
Pennsylvania Energy Development Authority, Energy Development Revenue
Bonds (Piney Creek Project), VRDN, AMT (a):
14,000 Series A, 3.85% due 12/01/2011 14,000
900 Series C, 3.85% due 12/01/2011 900
10,000 Pennsylvania State GO, Series 83-A, 3.30% due 11/17/1994 10,000
Pennsylvania State Higher Education Assistance Agency, Student Loan Revenue
Bonds, VRDN (a):
16,000 AMT, Series A, 3.95% due 1/01/2018 16,000
3,500 AMT, Series B, 3.75% due 7/01/2018 3,500
4,200 Series E, 3.75% due 7/01/2018 4,200
7,000 Pennsylvania State Higher Education, University Funding Obligations
(Temple University), 4.50% due 5/24/1995 7,030
</TABLE>
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1994 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Pennsylvania $ 8,400 Pennsylvania State Higher Educational Facilities Authority, College and
(concluded) University Revenue Bonds (Temple University), VRDN, 3.80% due 10/01/2009 (a) $ 8,400
1,500 Pennsylvania State Higher Educational Facilities Authority, Health Services
Revenue Bonds (University of Pennsylvania), ACES, VRDN, Series B, 3.70%
due 1/01/2024 (a) 1,500
13,000 Pennsylvania State Higher Educational Facilities Authority, Revenue Refunding
Bonds (Thomas Jefferson University), ACES, Series B, 3.70% due 6/01/1995 (a) 13,000
2,000 Pennsylvania State IDA, Economic Development Revenue Bonds, 4.50%
due 1/01/1995 2,007
4,000 Pennsylvania State University Revenue Bonds (University Project), Series B, UT,
3% due 12/05/1994 4,003
5,000 Philadelphia, Pennsylvania, Gas Works Revenue, CP, 2.80% due 10/21/1994 5,000
Philadelphia, Pennsylvania, Hospital and Higher Education Facilities Authority,
Hospital Revenue Bonds:
800 (Children's Hospital of Philadelphia Project), VRDN, 3.80% due 3/01/2027 (a) 800
2,400 (Friends Hospital), VRDN, Series A, 3.70% due 3/01/2006 (a) 2,400
4,900 Refunding (Pennsylvania Hospital), Series C, 3.75% due 7/01/1995 4,900
4,200 VRDN, Series MGT-41C, 3.75% due 2/15/2010 (a) 4,200
6,400 Philadelphia, Pennsylvania, IDA, M/F Revenue Refunding Bonds (Harbor View
Towers), VRDN, 3.70% due 11/01/2027 (a) 6,400
Philadelphia, Pennsylvania, IDA, Revenue Bonds, VRDN, AMT (a):
10,200 (30th Street Station Project), 3.15% due 1/01/2011 10,200
13,700 (Philadelphia Airport Hotel), UPDATES, 3.75% due 12/01/2017 13,700
8,000 Philadelphia, Pennsylvania, School District, TRAN, UT, 4.75% due 6/30/1995 8,031
15,500 Philadelphia, Pennsylvania, TRAN, Series A, 4.75% due 6/15/1995 15,590
4,240 Pittsburgh, Pennsylvania, Urban Redevelopment Authority, S/F Mortgage
Revenue Bonds, AMT, Series C, 3.50% due 12/01/1994 4,240
Venango, Pennsylvania, IDA, Resource Recovery Revenue Bonds (Scrubgrass
Project), CP, AMT:
1,300 Series 1993, 3.40% due 11/09/1994 1,300
1,615 Series 1993, 3.35% due 11/17/1994 1,614
2,550 Series A, 3.40% due 11/16/1994 2,550
1,500 Series A, 3.40% due 11/17/1994 1,500
2,000 Series A, 3.30% due 11/18/1994 2,000
1,000 York County, Pennsylvania, IDA, IDR (Edgecomb Metals Co. Project), VRDN,
3.65% due 7/01/2009 (a) 1,000
Puerto Rico--1,500 Puerto Rico Industrial, Medical and Environmental Pollution Control Facility
0.5% Revenue Bonds (Key Pharmaceuticals), Series A, 2.80% due 12/01/1994 1,500
Total Investments (Cost--$315,621*)--99.8% 315,621
Other Assets Less Liabilities--0.2% 479
--------
Net Assets--100.0% $316,100
========
<FN>
(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, 1994.
*Cost for Federal income tax purposes.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF SEPTEMBER 30, 1994
<S> <C> <C>
Assets:
Investments, at value (identified cost--$315,620,600) (Note 1a) $315,620,600
Cash 155,956
Receivables:
Interest $ 1,687,087
Securities sold 87,933 1,775,020
------------
Deferred organization expenses (Note 1d) 13,782
Prepaid registration fees and other assets (Note 1d) 13,185
------------
Total assets 317,578,543
------------
Liabilities:
Payables:
Securities purchased 1,200,000
Investment adviser (Note 2) 133,703
Distributor (Note 2) 80,974 1,414,677
------------
Accrued expenses and other liabilities 63,437
------------
Total liabilities 1,478,114
------------
Net Assets $316,100,429
============
Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares authorized $ 31,612,678
Paid-in capital in excess of par 284,514,097
Undistributed investment income--net 1,176
Accumulated realized capital losses--net (Note 4) (27,522)
------------
Net Assets--Equivalent to $1.00 per share based on 316,126,775 shares of beneficial
interest outstanding $316,100,429
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTMEBER 30, 1994
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 4,790,707
Expenses:
Investment advisory fees (Note 2) $ 812,152
Distribution fees (Note 2) 201,439
Transfer agent fees (Note 2) 42,409
Accounting services (Note 2) 27,108
Professional fees 23,243
Printing and shareholder reports 14,690
Custodian fees 14,499
Registration fees (Note 1d) 14,496
Pricing fees 4,685
Amortization of organization expenses (Note 1d) 4,617
Trustees' fees and expenses 2,131
Other 3,083
------------
Total expenses 1,164,552
------------
Investment income--net 3,626,155
Realized Loss on Investments--Net (Note 1c) (12,218)
------------
Net Increase in Net Assets Resulting from Operations $ 3,613,937
============
</TABLE>
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the Year
Months Ended Ended
Increase (Decrease) in Net Assets: Sept. 30, 1994 March 31, 1994
<S> <C> <C>
Operations:
Investment income--net $ 3,626,155 $ 5,863,031
Realized loss on investments--net (12,218) (3,224)
------------- -------------
Net increase in net assets resulting from operations 3,613,937 5,859,807
------------- -------------
Dividends to Shareholders (Note 1e):
Investment income--net (3,624,979) (5,863,031)
------------- -------------
Net decrease in net assets resulting from dividends to shareholders (3,624,979) (5,863,031)
------------- -------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 532,851,290 1,153,799,544
Net asset value of shares issued to shareholders in reinvestment of
dividends (Note 1e) 3,625,115 5,863,001
------------- -------------
536,476,405 1,159,662,545
Cost of shares redeemed (557,217,576) (1,141,760,453)
------------- -------------
Net increase (decrease) in net assets derived from beneficial interest transactions (20,741,171) 17,902,092
------------- -------------
Net Assets:
Total increase (decrease) in net assets (20,752,213) 17,898,868
Beginning of period 336,852,642 318,953,774
------------- -------------
End of period* $ 316,100,429 $ 336,852,642
============= =============
<FN>
*Undistributed investment income--net $ 1,176 $ 0
============= =============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
<CAPTION>
For the For the
Six Period
The following per share data and ratios have been derived Months August 27,
from information provided in the financial statements. Ended 1990++ to
Sept. 30, For the Year Ended March 31, March 31,
Increase (Decrease) in Net Asset Value: 1994 1994 1993 1992 1991
<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 .02 .02 .03 .03
-------- -------- -------- -------- --------
Total from investment operations .01 .02 .02 .03 .03
-------- -------- -------- -------- --------
Less dividends:
Investment income--net (.01) (.02) (.02) (.03) (.03)
-------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Investment Return 2.23%* 1.87% 2.29% 3.58% 4.95%*
======== ======== ======== ======== ========
Ratios to Average Net Assets:
Expenses, net of reimbursement and excluding distribution
fees .59%* .59% .60% .65% .63%*
======== ======== ======== ======== ========
Expenses, net of reimbursement .72%* .72% .72% .77% .75%*
======== ======== ======== ======== ========
Expenses .72%* .72% .72% .77% .80%*
======== ======== ======== ======== ========
Investment income--net 2.23%* 1.85% 2.29% 3.47% 4.75%*
======== ======== ======== ======== ========
Supplemental Data:
Net assets, end of period (in thousands) $316,100 $336,853 $318,954 $243,225 $225,622
======== ======== ======== ======== ========
<FN>
*Annualized.
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<PAGE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA Pennsylvania 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) Deferred organization expenses and prepaid registration fees--
Deferred organization expenses are charged to expense on a straight-
line basis over a five-year period. Prepaid registration fees are
charged to expense as the related shares are issued.
(e) Dividends 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.
<PAGE>
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. ("ML & Co"). The limited partners
are ML & Co. and Fund Asset Management, Inc. ("FAMI"), which is also
an indirect wholly-owned subsidiary of ML & Co.
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.
The most restrictive annual expense limitation requires that the
adviser reimburse the Fund to the extent the Fund's expenses
(excluding interest, taxes, distribution fees, brokerage fees and
commissions, and extraordinary items) exceed in any fiscal year 2.5%
of the Fund's first $30 million of average daily net assets, 2.0% of
the Fund's next $70 million of average daily net assets, and 1.5% of
the average daily net assets in excess thereof. No fee payment will
be made to the Investment Adviser during any year which will cause
such expenses to exceed the pro rata expense limitation at the time
of such payment.
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
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.
<PAGE>
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, FAMI, PSI, MLIM, MLPF&S, 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, 1994, the Fund had a net capital loss carryforward of
approximately $15,000, all of which expires in 2002. This amount
will be available to offset like amounts of any future taxable
gains.
CMA PENNSYLVANIA
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
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, Massachusetts 02101
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Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 221-7210*
[FN]
*For inquiries regarding your CMA account,
call (800) CMA-INFO [(800) 262-4636].