CMA
CMA PENNSYLVANIA
MUNICIPAL MONEY FUND
Annual Report
March 31, 1994
Merrill Lynch BULL LOGO
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
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].
<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 can-
not 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
TO OUR SHAREHOLDERS:
For the year ended March 31, 1994, CMA Pennsylvania Municipal
Money Fund paid shareholders a net annualized yield of 1.87%*.
As of March 31, 1994, the Fund's 7-day yield was 1.67%.
The Environment
Inflationary expectations changed sharply during the March quar-
ter. Following better-than-expected economic results, Federal
Reserve Board Chairman Alan Greenspan indicated in Congressional
testimony in January that continued strong expansion of the eco-
nomy would lead the central bank to tighten monetary policy in
an effort to control inflation. On February 4, 1994, the central
bank broke with tradition and publicly announced a modest 25 bas-
is point (0.25%) increase in short-term interest rates. At the
March 22 meeting of the Federal Open Market Committee, the Fed-
eral Reserve Board again raised the Federal Funds rate by 25
basis points, and also announced the increase.
Rather than view the Federal Reserve Board's first tightening
move as a preemptive strike against inflation, fixed-income
investors focused on Chairman Greenspan's implicit promise of
further tightening should the rate of inflation accelerate, and
bond prices declined sharply. The setback in the bond market was
also reflected in greater stock market volatility. While the
second increase in the Federal Funds rate was less of a surprise,
investors remained concerned that interest rates would trend
upward sharply. As a result, stock and bond prices continued to
decline through the end of March. The volatility in the US
capital markets was mirrored in international markets. Political
and economic developments, along with concerns of heightened
global inflationary pressures, led to a sell-off in most capital
markets, especially the emerging markets that had appreciated
strongly in 1993.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
<PAGE>
In the weeks ahead, investors will continue to gauge the pace of
the economic expansion and watch for signs of an overheating
economy. At this time, there is little evidence that the rate of
inflation will increase rapidly. Therefore, although the secular
long-term trend toward lower interest rates may be over, it is
not yet certain whether the pace of economic activity will ac-
celerate to the point where significant Federal Reserve Board
tightening will be necessary to contain inflation.
Investment Outlook and Strategy
Economic conditions within the Commonwealth of Pennsylvania, like
the rest of the nation, improved during most of the six-month
period ended March 31, 1994. However, severe weather conditions
in the Commonwealth during January and February curtailed any
additional improvement. Although the unemployment rate had de-
clined, the Commonwealth's seasonally adjusted unemployment rate
increased to 6.8% in March, slightly higher than the national
average of 6.5%. In light of overall favorable economic con-
ditions, Governor Casey proposed a cut in the State's corporate
income tax rate from 12.25% to 9.9% over the next three years,
as well as an increase in tax exemptions for low-income fam-
ilies. As is the case in many other states, Governor Casey is
pursuing comprehensive healthcare, as well as welfare and crime
reforms which would affect spending in his 1995 fiscal budget
proposal.
Improved economic conditions have translated into tax revenue
collections remaining on target for 1994 fiscal year projections.
This positive cash flow has allowed the Commonwealth to reduce
its short-term financing needs by approximately 41% to $400
million in Tax Anticipation Notes (TANs) over the same period
last year. Various Pennsylvania cities and towns also benefited
from improved revenue streams with their annual issuance of Tax
and Revenue Anticipation Notes (TRANs) declining approximately
25% to $266 million from the comparable period last year. Yields
on Pennsylvania TANs which were issued at 2.65% declined to the
1.90% range in the beginning of January and ended the period in
the 2.75% range.
<PAGE>
CMA Pennsylvania Municipal Money Fund pursued an aggressive
strategy by extending its average portfolio maturity to the 80-
day range by the beginning of December. This was in anticipation
of receiving large seasonal tax-related inflows from Pennsylvania
residents during December. To accomplish this extension the Fund
purchased a combination of Pennsylvania TANs and commercial paper
while reducing holdings of lower-yielding variable rate demand
notes. Since then, a combination of tax-related outflows by
Pennsylvania residents in January and the Federal Reserve Board's
tightening action in February prompted the Fund to take a more
defensive approach by allowing notes to mature and increasing the
purchase of variable rate demand notes. This caused us to lower
the Fund's average portfolio maturity to the 40-day range in
anticipation of April's tax-related outflows. Lack of municipal
note issuance by the Pennsylvania municipalities will hinder the
Fund's ability to extend its average portfolio maturity until
June when the Pennsylvania school districts issue their annual
notes. We continue to closely monitor credit quality while
seeking to offer shareholders an attractive tax-exempt yield.
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
May 3, 1994
<PAGE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
<TABLE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1994 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Pennsylvania-- Allegheny County, Pennsylvania, Allegheny Hospital Development Authority
98.0% Revenue Bonds, VRDN (a)(b):
$1,800 (Children's Hospital), Series B, 2.20% due 1/01/2021 $ 1,800
4,800 (Presbyterian University Health System), Series A, 2.25% due 3/01/2020 4,800
1,200 (Presbyterian University Health System), Series B, 2.25% due 3/01/2020 1,200
4,400 (Presbyterian University Health System), Series C, 2.25% due 3/01/2020 4,400
2,400 (Presbyterian University Health System), Series D, 2.25% due 3/01/2020 2,400
Allegheny County, Pennsylvania, IDA, PCR, Refunding (Duquesne Light
Project), CP, Series A:
2,000 2.70% due 7/12/1994 2,000
5,000 2.75% due 10/20/1994 5,000
1,500 2.80% due 10/20/1994 1,500
4,400 Allegheny County, Pennsylvania, Institution District, TRAN, Series B,
2.75% due 7/21/1994 4,407
2,500 Allegheny County, Pennsylvania, Port Authority Revenue Bonds, Series A,
2.90% due 8/01/1994 2,500
Beaver County, Pennsylvania, IDA, PCR (Duquesne Light Project):
2,700 (Beaver Valley), VRDN, Series A, 2.50% due 8/01/2020 (a) 2,700
2,100 CP, AMT, Series A, 2.60% due 5/06/1994 2,100
1,300 (Mansfield), VRDN, Series B, 2.50% due 8/01/2009 (a) 1,300
4,000 Bensalem Township, Pennsylvania, School District, TRAN, 2.74% due 6/30/1994 4,000
2,925 Berks County, Pennsylvania, IDA, IDR (Valley Forge Company, Inc., Project),
VRDN, AMT, Series A, 2.90% due 9/01/2006 (a) 2,925
2,900 Berks County, Pennsylvania, TRAN, 2.70% due 12/30/1994 2,900
5,000 Boyertown, Pennsylvania, Area School District, TRAN, 2.78% due 6/30/1994 5,001
2,000 Bucks County, Pennsylvania, IDA, Revenue Bonds (Edgecomb Metal Company),
VRDN, 2.325% due 10/01/2009 (a) 2,000
Bucks County, Pennsylvania, Revenue Bonds, VRDN, AMT (a):
2,445 IDA (DBL H Plastic Project), 2.90% due 10/01/2008 2,445
1,710 (Pennsylvania Associates Project), 2.90% due 12/15/2003 1,710
Cambria County, Pennsylvania, IDA, Resource Recovery Revenue Bonds
(Cambria Cogen Project), VRDN, AMT (a):
2,400 Series V-1, 2.35% due 9/01/2019 2,400
1,000 Series V-2, 2.35% due 9/01/2019 1,000
Carbon County, Pennsylvania, Resource Recovery Revenue Bonds, IDA
(Panther Creek Partners), CP, AMT:
2,600 Series A, 2.45% due 4/22/1994 2,600
2,550 Series B, 2.65% due 5/06/1994 2,550
3,200 Chichester School District, Pennsylvania, TRAN, 2.70% due 6/30/1994 3,200
5,400 Delaware County, Pennsylvania, Health Care Authority Revenue Bonds
(Capital Asset), VRDN, Series B, 2.50% due 7/01/2015 (a) 5,400
7,000 Delaware County, Pennsylvania, IDA, PCR, Refunding (Philadelphia Electric
Company Project), CP, 2.30% due 5/16/1994 7,003
</TABLE>
<PAGE>
Portfolio Abbreviations for CMA Pennsylvania Municipal Money Fund
AMT Alternative Minimum Tax (subject to)
CP Commercial Paper
DDN Daily Demand Notes
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
S/F Single-Family
TAN Tax Anticipation Notes
TRAN Tax Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
<TABLE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1994 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Pennsylvania $ 6,100 Eagle Tax Exempt Trust, Pennsylvania, VRDN, Series A, 2.49% due 7/01/2025 (a) $ 6,100
(continued) Emmaus, Pennsylvania, General Authority Revenue Bonds, VRDN (a):
2,000 2.60% due 3/01/2024 2,000
2,500 Series G, 2.50% due 3/01/2024 2,500
4,000 Erie County, Pennsylvania, IDA, Revenue Bonds (McInnes Steel Co.), DDN,
AMT, 2.75% due 11/01/2001 (a) 4,000
11,000 Floating Rate Trust Certificates, Pennsylvania, Series H, VRDN, 2.70%
due 4/04/1994 (a) 11,000
350 Lehigh County, Pennsylvania, Sewer Authority Revenue Bonds, 1985 Series B,
VRDN, 2.25% due 3/15/2005 (a) 350
380 Lehigh County, Pennsylvania, Water Authority Revenue Bonds, VRDN, 2.25%
due 11/01/2004 (a) 380
3,195 Montgomery County, Pennsylvania, Higher Education and Health Authority
Revenue Bonds (Pottstown Healthcare Corporation), VRDN, 2.75% due
12/01/2002 (a) 3,195
1,700 Montgomery County, Pennsylvania, IDR (Merck & Company Project), VRDN,
Series A, 2.70% due 10/01/2017 (a) 1,700
3,850 Montour County, Pennsylvania, IDA, PCR (Merck & Co. Project), VRDN, Series A,
2.45% 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
1,000 Northeastern York County, Pennsylvania, School District, TRAN, 2.77%
due 6/30/1994 1,000
Pennsylvania Economic Development Financing Authority, Economic
Development Revenue Bonds, VRDN (a):
2,200 AMT, Series B2, 2.50% due 12/01/2008 2,200
900 AMT, Series D-10, 2.50% due 7/01/2011 900
425 (Carson Industries Project), AMT, Series B-2, 2.50% due 6/01/2000 425
<PAGE> 1,500 (Kerner Company Project), Series B4, 2.50% due 6/01/2007 1,500
2,300 (Kyowa American Project), AMT, Series B5, 2.50% due 6/01/2002 2,300
1,200 (Robert & Karen Wickerham Project), AMT, Series B-7, 2.50% due 5/01/2005 1,200
475 (Winter Welding Project), AMT, Series B-8, 2.50% due 6/01/2007 475
Pennsylvania Economic Development Financing Authority, Solid Waste
Disposal Revenue Bonds (Inter-Power/AHLCON Partners Project), 1992
Series A, CP, AMT:
6,800 2.55% due 4/21/1994 6,800
3,200 2.45% due 4/25/1994 3,200
5,000 2.70% due 5/25/1994 5,000
3,200 2.70% due 5/26/1994 3,200
13,150 Pennsylvania Energy Development Authority, Energy Development Revenue
Bonds (B&W Ebensburg Project), VRDN, AMT, 2.40% due 12/01/2011 (a) 13,150
Pennsylvania Energy Development Authority, Energy Development Revenue
Bonds (Piney Creek Project), VRDN, AMT (a):
14,000 Series A, 2.60% due 12/01/2011 14,000
900 Series C, 2.60% due 12/01/2011 900
Pennsylvania State Higher Education Assistance Agency, Student Loan
Revenue Bonds, VRDN, AMT (a)(b):
16,000 Series A, 2.45% due 1/01/2018 16,000
21,100 Series B, 2.25% due 7/01/2018 21,100
</TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
<TABLE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1994 (CONCLUDED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Pennsylvania Pennsylvania State Higher Education Facilities Authority, College and
(concluded) University Revenue Bonds:
$ 3,200 (Temple University), DDN, 3.25% due 10/01/2009 (a) $ 3,200
5,000 (Thomas Jefferson University), Series B, 2.70% due 6/01/1994 5,000
28,200 Pennsylvania State, TAN, First Series, 3.25% due 6/30/1994 28,240
4,000 Pennsylvania State University Revenue Bonds (University Project), Series B, 3%
due 12/05/1994 4,008
Philadelphia, Pennsylvania, Hospital and Higher Education Facilities Authority,
Hospital Revenue Bonds (a):
2,200 (Children's Hospital of Philadelphia Project), DDN, 3.25% due 3/01/2027 2,200
2,400 (Friends Hospital), VRDN, Series A, 2.35% due 3/01/2006 2,400
Philadelphia, Pennsylvania, IDA, Revenue Bonds, VRDN, AMT (a):
10,200 (30th Street Station Project), 2.35% due 1/01/2011 (b) 10,200
13,700 (Philadelphia Airport Hotel), 2.35% due 12/01/2017 13,700
6,400 Philadelphia, Pennsylvania, IDA, M/F Revenue Refunding Bonds (Harbor View
Towers), VRDN, 2.35% due 11/01/2027 (a) 6,400
2,000 Philadelphia, Pennsylvania, School District, Tender Option, VRDN, Series
MGT 26B, 2.40% due 7/01/2002 (a) 2,000
Philadelphia, Pennsylvania, TRAN:
8,500 Series A, 3.25% due 6/15/1994 8,507
<PAGE> 5,500 Series B, 3.25% due 6/15/1994 5,505
1,000 Series C, 3.25% due 6/15/1994 1,001
4,240 Pittsburgh, Pennsylvania, Urban Redevelopment Authority, S/F Mortgage
Revenue Bonds, AMT, Series C, 2.80% due 6/01/1994 4,240
1,400 Pottstown, Pennsylvania, School District, TRAN, 2.79% due 6/30/1994 1,400
2,500 Red Lion, Pennsylvania, Area School District, TRAN, 2.78% due 6/30/1994 2,501
Venango, Pennsylvania, IDA, Resource Recovery Revenue Bonds (Scrubgrass
Project), CP, AMT:
1,300 Series 1993, 2.65% due 5/09/1994 1,300
1,500 Series A, 2.65% due 5/06/1994 1,500
2,000 Series A, 2.65% due 5/10/1994 2,000
1,800 Washington County, Pennsylvania, Higher Education Authority Revenue Bonds
(Pooled Equipment Lease), VRDN, 1985 Series A, 2.25% due 11/01/2005 (a) 1,800
4,838 Woodland Hills, Pennsylvania, School District, TRAN, 2.76% due 6/30/1994 4,839
1,000 York County, Pennsylvania, IDA, IDR (Edgecomb Metals Company Project),
VRDN, 2.325% due 7/01/2009 (a) 1,000
4,000 York County, Pennsylvania, IDA, PCR (Philadelphia Electric Company), VRDN,
Series A, 2.15% due 8/01/2016 (a) 4,000
Puerto Rico-- 3,500 Commonwealth of Puerto Rico, TRAN, Series A, 3% due 7/29/1994 3,503
1.4% 1,500 Puerto Rico, Industrial, Medical and Environment Pollution Control Facility
Revenue Bonds (Key Pharmaceuticals), Series A, 2.80% due 12/01/1994 1,500
Total Investments (Cost--$334,810*)--99.4% 334,810
Other Assets Less Liabilities--0.6% 2,043
--------
Net Assets--100.0% $336,853
========
<FN>
(a)The interest rate is subject to change periodically based on
certain indexes. The interest rates shown are the rates in
effect at March 31, 1994.
(b)MBIA Insured.
* Cost for Federal income tax purposes.
See Notes to Financial Statements.
</TABLE>
<PAGE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1994
<S> <C> <C>
Assets:
Investments, at value (identified cost--$334,809,833) (Note 1a) $334,809,833
Cash 107,119
Receivables:
Securities sold $ 3,200,000
Interest 2,203,420 5,403,420
------------
Deferred organization expenses (Note 1d) 13,782
Prepaid registration fees and other assets (Note 1d) 13,107
------------
Total assets 340,347,261
------------
Liabilities:
Payables:
Securities purchased 3,201,000
Investment adviser (Note 2) 147,173
Distributor (Note 2) 60,485
Beneficial interest redeemed 153 3,408,811
------------
Accrued expenses and other liabilities 85,808
------------
Total liabilities 3,494,619
------------
Net Assets $336,852,642
============
Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares authorized $ 33,686,795
Paid-in capital in excess of par 303,181,152
Accumulated realized capital losses--net (Note 4) (15,305)
------------
Net Assets--Equivalent to $1.00 per share based on 336,867,946 shares of beneficial
interest outstanding $336,852,642
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1994
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 8,140,370
Expenses:
Investment advisory fees (Note 2) $ 1,587,756
Distribution fees (Note 2) 395,631
Accounting services (Note 2) 63,695
Transfer agent fees (Note 2) 57,670
Printing and shareholder reports 42,579
Professional fees 39,034
Custodian fees 34,120
Registration fees (Note 1d) 30,167
Pricing fees 10,420
Amortization of organization expenses (Note 1d) 9,806
Trustees' fees and expenses 3,675
Other 2,786
------------
Total expenses 2,277,339
------------
Investment income--net 5,863,031
Realized Loss on Investments--Net (Note 1c) (3,224)
------------
Net Increase in Net Assets Resulting from Operations $ 5,859,807
============
</TABLE>
<PAGE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended March 31,
1994 1993
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Investment income--net $ 5,863,031 $ 5,931,982
Realized loss on investments--net (3,224) (11,027)
--------------- ---------------
Net increase in net assets resulting from operations 5,859,807 5,920,955
--------------- ---------------
Dividends & Distributions to Shareholders (Note 1e):
Investment income--net (5,863,031) (5,931,982)
Realized gain on investments--net -- (30,536)
--------------- ---------------
Net decrease in net assets resulting from dividends and distributions to shareholders (5,863,031) (5,962,518)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 1,153,799,544 1,243,778,611
Net asset value of shares issued to shareholders in reinvestment of
dividends and distributions (Note 1e) 5,863,001 5,962,428
--------------- ---------------
1,159,662,545 1,249,741,039
Cost of shares redeemed (1,141,760,453) (1,173,970,762)
--------------- ---------------
Net decrease in net assets derived from beneficial interest transactions 17,902,092 75,770,277
--------------- ---------------
Net Assets:
Total increase in net assets 17,898,868 75,728,714
Beginning of year 318,953,774 243,225,060
--------------- ---------------
End of year $ 336,852,642 $ 318,953,774
=============== ===============
See Notes to Financial Statements.
</TABLE>
<PAGE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
For the
Period
The following per share data and ratios have been derived August 27,
from information provided in the financial statements. 1990++ to
For the Year Ended March 31, March 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------
Investment income--net .02 .02 .03 .03
-------- -------- -------- --------
Total from investment operations .02 .02 .03 .03
-------- -------- -------- --------
Less dividends:
Investment income--net (.02) (.02) (.03) (.03)
-------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total Investment Return 1.87% 2.29% 3.58% 4.95%*
======== ======== ======== ========
Ratios to Average Net Assets:
Expenses, net of reimbursement and excluding distribution fees .59% .60% .65% .63%*
======== ======== ======== ========
Expenses, net of reimbursement .72% .72% .77% .75%*
======== ======== ======== ========
Expenses .72% .72% .77% .80%*
======== ======== ======== ========
Investment income--net 1.85% 2.22% 3.47% 4.75%*
======== ======== ======== ========
Supplemental Data:
Net assets, end of period (in thousands) $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 reg-
istered under the Investment Company Act of 1940 as a non-divers-
ified, open-end investment management 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. 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 trans-
actions 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.
(f) Reclassifications--Undistributed investment income--net,
in the amount of $11,988, has been reclassified to accumulated
realized capital losses--net.
<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"). Effective January 1, 1994,
the investment advisory business of FAM was reorganized from a
corporation to a limited partnership. Both prior to and after the
reorganization, ultimate control of FAM was vested with Merrill
Lynch & Co., Inc. ("ML & Co."). The general partner of FAM is
Princeton Services, Inc., an indirect wholly-owned subsidiary of
ML & Co. The limited partners are ML & Co. and Merrill Lynch
Investment Management, Inc. ("MLIM"), 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 Fund's average daily net assets not
exceeding $500 million; 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 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 limit-
ation 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 the 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, 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. These
will be available to offset like amounts of any future taxable
gains.
<AUDIT-REPORT>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
CMA Pennsylvania Municipal Money Fund of
CMA Multi-State Municipal Series Trust:
We have audited the accompanying statement of assets and lia-
bilities, including the schedule of investments, of CMA Penn-
sylvania Municipal Money Fund of CMA Multi-State Municipal
Series Trust as of March 31, 1994, 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 three-
year period then ended and the period August 27, 1990 (commence-
ment of operations) to March 31, 1991. These financial state-
ments 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 high-
lights based on our audits.
<PAGE>
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, 1994 by correspondence with the
custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial state-
ment presentation. We believe that our audits provide a reason-
able basis for our opinion.
In our opinion, such financial statements and financial high-
lights present fairly, in all material respects, the financial
position of CMA Pennsylvania Municipal Money Fund of CMA Multi-
State Municipal Series Trust as of March 31, 1994, the results
of its operations, the changes in its net assets, and the fin-
ancial highlights for the respective stated periods in conform-
ity with generally accepted accounting principles.
Deloitte & Touche
Princeton, New Jersey
April 29, 1994
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (UNAUDITED)
All of the net investment income distributions paid daily by CMA
Pennsylvania Municipal Money Fund of CMA Multi-State Municipal
Series Trust during the taxable year ended March 31, 1994 qualify
as tax-exempt interest dividends for Federal income tax purposes.
Additionally, there were no long-term capital gains distributions
during the Fund's taxable year ended March 31, 1994.
Please retain this information for your records.
