<PAGE>
- --------------------------------------------------------------------------------
June 30, 1996
Dear Shareholder,
We are pleased to present you with the Annual Report for PaineWebber RMA
California Municipal Money Fund, PaineWebber RMA New York Municipal Money Fund,
PaineWebber RMA Connecticut Municipal Money Fund and PaineWebber RMA New Jersey
Municipal Money Fund for the period ended June 30, 1996. The Board of Trustees
for PaineWebber RMA Connecticut Municipal Money Fund and PaineWebber RMA New
Jersey Municipal Money Fund voted to change the Funds' fiscal year-ends to June
30; previously, the fiscal year-end was October 31.
By the end of 1995, most investors were convinced that the Federal Reserve Board
had achieved a 'soft landing' for the economy, which led to a general consensus
that the Fed would act again to cut short-term interest rates. Sentiment changed
in early March, however, in response to government reports showing
higher-than-expected economic growth; there was a sharp drop in bond prices
which caused volatility in the stock market. Despite this volatility, the stock
market, as measured by the Standard & Poor's 500 Index, advanced 10.09% through
June 30, 1996. Several factors helped move stocks higher, including an overall
positive environment for corporate earnings and profit growth as well as strong
cash flows into equity mutual funds.
After exceptional performance during most of 1995, the first half of the year
was difficult for fixed income investors. Accelerating economic growth,
reflected in strong employment, retail sales and investment spending numbers, as
well as a surprisingly robust housing sector, combined to change market
expectations from the Fed easing to the Fed tightening. The 30-year U.S.
Treasury bond, a benchmark of bond market performance, was yielding 5.95% on
December 29, 1995 and 6.87% on June 28, 1996. When bond yields increase, bond
prices decrease. Meanwhile, the Federal Reserve's Open Market Committee decided
to keep monetary policy unchanged at the March, May and July 1996 meetings. The
Fed's decision to hold rates steady suggested that officials did not foresee a
recession or accelerating inflation.
PORTFOLIO REVIEW
During the first half of 1996, short-term interest rates began to decrease in
the six-month to one-year sector, steepening the short end of the yield curve.
It now appears that the Federal Reserve Board will leave rates unchanged until
after the 1996 presidential election. In anticipation of a possible rising
interest rate environment, the Funds' weighted average maturities were decreased
during the second half of 1995. However, during the first half of 1996 the
Funds' weighted average maturities were increased slightly to accommodate a
stable to lower interest rate environment.
<PAGE>
- --------------------------------------------------------------------------------
Going forward, we expect to maintain the current maturities until further
economic data is released. At this writing, second quarter economic data was not
as strong as analysts expected, leading to a general consensus that the Fed will
not raise short-term rates in the near future. Investment decisions in the Funds
will continue to be dominated by credit quality and liquidity. Although we are
interested in maintaining higher yields, we will not do so by sacrificing the
Funds' emphasis on security, quality and liquidity.
PAINEWEBBER RMA CALIFORNIA MUNICIPAL MONEY FUND
PaineWebber RMA California Municipal Money Fund's net assets totalled $473.7
million as of June 30, 1996. The Fund's current yield for the seven-day period
ended June 30, 1996, was 2.75%. The Fund maintained a weighted average maturity
of 54 days as of June 30, 1996. In addition, the Fund did not invest in any
securities subject to the federal alternative minimum tax for individual
taxpayers.
PAINEWEBBER RMA NEW YORK MUNICIPAL MONEY FUND
PaineWebber RMA New York Municipal Money Fund's net assets totalled $255.2
million as of June 30, 1996. The Fund's current yield for the seven-day period
ended June 30, 1996, was 2.68%. The Fund maintained a weighted average maturity
of 56 days as of June 30, 1996. In addition, the Fund did not invest in any
security subject to the federal alternative minimum tax for individual
taxpayers.
PAINEWEBBER RMA CONNECTICUT MUNICIPAL MONEY FUND
PaineWebber RMA Connecticut Municipal Money Fund's net assets totalled $19.0
million as of June 30, 1996. The Fund's current yield for the seven-day period
ended June 30, 1996, was 2.29%. The Fund maintained a weighted average maturity
of 40 days as of June 30, 1996.
PAINEWEBBER RMA NEW JERSEY MUNICIPAL MONEY FUND
PaineWebber RMA New Jersey Municipal Money Fund's net assets totalled $42.2
million as of June 30, 1996. The Fund's current yield for the seven-day period
ended June 30, 1996, was 2.55%. The Fund maintained a weighted average maturity
of 56 days as of June 30, 1996.
2
<PAGE>
- --------------------------------------------------------------------------------
Our ultimate objective in managing your investments is to help you successfully
meet your financial goals. We thank you for your continued support, and welcome
any comments or questions you may have.
Sincerely,
/s/ Margo Alexander /s/ Cynthia N. Bow
MARGO ALEXANDER CYNTHIA N. BOW
President, Portfolio Manager,
Mitchell Hutchins Asset Management Inc. PaineWebber RMA California Municipal
Money Fund
/s/ Debbie Vermann /s/ Kevin P. McIntyre
DEBBIE VERMANN KEVIN P. McINTYRE
Portfolio Manager, Portfolio Manager,
PaineWebber RMA New York Municipal PaineWebber RMA New Jersey Municipal
Money Fund Money Fund
PaineWebber RMA Connecticut Municipal
Money Fund
3
<PAGE>
PAINEWEBBER RMA CALIFORNIA MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
Statement of Net Assets
June 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- ------------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--57.06%
$ 6,000 California Community College Financing
Tax and Revenue Anticipation Bonds........................ 07/02/97 4.750% $ 6,051,840
4,000 California Educational Facilities Authority
(Occidental College Project)
Adjustable Rate Bonds..................................... 12/01/96 3.650 4,000,000
3,000 California Educational Facilities Authority
(Stanford University Series).............................. A 2.900 3,000,000
4,500 California Health Facilities Financing Authority............ A 2.800 4,500,000
6,700 California Health Facilities Financing Authority
(Kaiser Permanente)....................................... A 3.000 6,700,000
8,100 California Health Facilities Financing Authority
(Long Beach Memorial)..................................... A 3.000 8,100,000
7,060 California Health Facilities Financing Authority
(Memorial Health Services)................................ A 3.000 7,060,000
6,300 California Health Facilities Financing Authority
(N. T. Enloe Memorial Hospital)........................... A 3.150 6,300,000
5,000 California Health Facilities Financing Authority
(Scripps Memorial Hospital)............................... A 3.050 5,000,000
6,000 California Health Facilities Financing Authority
(West Sutter Adventist Health)............................ A 3.100 6,000,000
1,100 California Pollution Control Financing Authority
(Minnesota Mining & Manufacturing)........................ A 3.150 1,100,000
8,000 California Statewide Communities Development Authority...... A 3.150 8,000,000
5,000 California Statewide Communities Development Authority
(Northern California Retired Community)................... A 3.400 5,000,000
6,500 California Statewide Communities Development Authority
Tax and Revenue Anticipation Notes........................ 06/30/97 4.750 6,546,735
4,900 Anaheim Certificates of Participation....................... A 3.100 4,900,000
3,000 Contra Costa County
Certificates of Participation
(Pre-refunded with U.S. Government Securities
to 07/01/96 @ 102)........................................ 07/01/96 8.200 3,060,000
9,000 Contra Costa County
Tax and Revenue Anticipation Notes........................ 07/03/97 4.500 9,058,050
1,000 Foothill/Eastern Transportation Corridor Agency............. A 3.100 1,000,000
2,545 Grand Terrace Community Redevelopment Authority
(Multi-Family Housing).................................... A 3.400 2,545,000
</TABLE>
4
<PAGE>
PAINEWEBBER RMA CALIFORNIA MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- ------------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$2,400 Indio California Multi-Family Housing Authority
(Smoketree Apartments).................................... A 3.250% $2,400,000
400 Irvine Ranch California Water District
(Series A Improvement District 282)....................... A 3.450 400,000
5,100 Lancaster California Multi-Family Housing Authority
(Woodcreek Garden Apartments)............................. A 3.200 5,100,000
12,500 Los Angeles County
Tax and Revenue Anticipation Notes........................ 07/01/96 to 06/30/97 4.500 12,555,380
2,000 Los Angeles County Housing Authority
(Malibu Meadows Project).................................. A 3.200 2,000,000
5,000 Los Angeles County Pension Obligation....................... A 3.150 5,000,000
3,000 Los Angeles County Transportation Authority Notes........... 02/27/97 4.000 3,004,320
2,000 Los Angeles Department of Airports
(Pre-refunded with U.S. Government Securities
to 05/01/97 @ 102)........................................ 05/01/97 7.400 2,098,141
4,200 Los Angeles Unified School District
Revenue Anticipation Notes................................ 07/03/96 to 06/30/97 4.500 4,221,546
40,450 Newport Beach Health Facilities
(Hoag Memorial Hospital).................................. A 3.550 40,450,000
4,000 Northern California Power Agency
(Geothermal Project Number 3A)............................ A 3.150 4,000,000
3,245 Sacramento County California
Tax and Revenue Anticipation Notes........................ 10/04/96 4.750 3,254,792
8,000 San Bernardino County
Tax and Revenue Anticipation Notes........................ 07/05/96 4.500 8,000,463
3,275 San Diego County
Tax and Revenue Anticipation Notes........................ 09/30/96 4.500 3,282,562
2,125 San Francisco Multi-Family Housing Authority
(Rincon Center)........................................... A 3.000 2,125,000
2,200 San Francisco Multi-Family Housing Authority
(South Beach Harbor Project).............................. A 3.175 2,200,000
17,600 San Francisco Redevelopment Agency Multi-Family
(Bayside Village)......................................... A 3.400 17,600,000
2,000 San Mateo County
Tax and Revenue Anticipation Notes........................ 07/01/96 4.500 2,000,000
2,000 Santa Barbara County
Tax and Revenue Anticipation Notes........................ 07/05/96 4.500 2,000,143
</TABLE>
5
<PAGE>
PAINEWEBBER RMA CALIFORNIA MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- ------------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
$ 6,000 Santa Clara Apartment Development Revenue
(Lincoln Pajaro 85-A)..................................... A 3.400% $ 6,000,000
3,200 Santa Clara County El Camino Hospital District
(Aces Lease Valley Medical Center Project)................ A 3.100 3,200,000
8,300 Santa Clara County Transit District......................... A 3.600 8,300,000
1,700 Santa Clara Electric........................................ A 3.200 1,700,000
5,800 Santa Clara Financing Authority
(VMC Facility Replacement Project B)...................... A 3.000 5,800,000
16,620 Simi Valley Public Financing Authority...................... A 3.100 16,620,000
2,520 Southern California Metropolitan Water District............. 07/01/96 7.500 2,520,000
1,500 Southern California Rapid Transit District
Certificates of Participation............................. 07/01/96 5.400 1,500,000
2,000 University of California (Housing Systems Group A)
(Pre-refunded with U.S. Government Securities
to 11/01/96 @ 102)........................................ 11/01/96 7.800 to 7.875 2,068,232
2,975 Upland Community Redevelopment Housing Agency
(Northwoods Series A)..................................... A 3.800 2,975,000
------------
Total Municipal Bonds and Notes (cost--$270,297,204)................... 270,297,204
------------
TAX EXEMPT COMMERCIAL PAPER--49.59%
13,900 California State............................................ 08/12/96 to 09/13/96 3.350 to 3.550 13,900,000
11,500 California Educational Facilities Authority
(Carnegie Institute of Washington)........................ 08/13/96 to 09/11/96 3.450 to 3.600 11,500,000
2,000 California Pollution Control Financing Authority
(Dow Chemical Company Project)............................ 08/19/96 3.250 2,000,000
22,300 California Pollution Control Financing Authority
(Pacific Gas & Electric Company).......................... 08/08/96 to 08/15/96 3.250 to 3.600 22,300,000
13,200 Anaheim Electric Authority.................................. 08/12/96 to 08/29/96 3.550 to 3.650 13,200,000
10,925 Del Mar Race Track Authority................................ 08/07/96 to 08/14/96 3.350 to 3.500 10,925,000
11,500 East Bay Municipal Utility District......................... 08/14/96 to 09/13/96 3.400 to 3.500 11,500,000
27,846 Los Angeles County Transportation Commission................ 07/23/96 to 09/10/96 3.200 to 3.650 27,846,000
12,200 Los Angeles Department of Water & Power..................... 07/24/96 to 08/28/96 3.350 to 3.500 12,200,000
7,000 Los Angeles Wastewater System............................... 07/26/96 to 07/29/96 3.350 to 3.400 7,000,000
27,250 Puerto Rico Development Bank................................ 07/12/96 to 09/20/96 3.300 to 3.600 27,250,000
20,500 Riverside County Transportation............................. 07/01/96 to 07/15/96 3.300 to 3.650 20,500,000
13,600 Sacramento Municipal Utility District....................... 07/22/96 to 08/27/96 3.250 to 3.600 13,600,000
3,300 San Diego County............................................ 07/01/96 3,650 3,300,000
10,000 San Diego Gas & Electric.................................... 08/09/96 to 09/12/96 3.400 to 3.550 10,000,000
</TABLE>
6
<PAGE>
PAINEWEBBER RMA CALIFORNIA MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- ------------
<S> <C> <C> <C>
TAX EXEMPT COMMERCIAL PAPER--(CONCLUDED)
$ 2,900 San Diego Water Authority................................... 08/19/96 3.600% $ 2,900,000
19,600 Southern California Metropolitan Water District............. 07/23/96 to 09/16/96 3.350 to 3.600 19,600,000
4,400 State of California Department of Water Resources........... 09/12/96 3.350 4,400,000
1,000 West Basin Municipal Water District......................... 08/21/96 3.550 1,000,000
------------
Total Tax Exempt Commercial Paper (cost--$234,921,000)................. 234,921,000
------------
Total Investments (cost--$505,218,204 which approximates
cost for federal income tax purposes)--106.65%....................... 505,218,204
Liabilities in excess of other assets--(6.65)%......................... (31,492,672)
------------
NET ASSETS (applicable to 474,261,681 shares of beneficial interest
at $1.00 per share)--100.00%......................................... $473,725,532
------------
------------
</TABLE>
- ------------------
A -- Variable Rate Demand Notes are payable on demand. The interest rates shown
are the current rates as of June 30, 1996.
Weighted Average Maturity--54 days
See accompanying notes to financial statements.
7
<PAGE>
PAINEWEBBER RMA NEW YORK MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
Statement of Net Assets
June 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- ------------
<S> <C> <C> <C>
MUNICIPAL BONDS & NOTES--83.93%
$2,000 New York State General Obligation Bonds..................... 07/23/96 3.400% $2,000,000
1,150 New York State Bridge Authority............................. 01/01/97 6.750 1,169,482
3,500 New York State Dormitory Authority
(Cornell University)...................................... A 3.450 3,500,000
2,700 New York State Dormitory Authority
(Masonic Hall Asylum)..................................... A 3.100 2,700,000
7,600 New York State Dormitory Authority
(Metropolitan Museum of Art).............................. A 3.000 7,600,000
3,900 New York State Dormitory Authority
(Miriam Osborn Memorial Home)............................. A 3.500 3,900,000
5,700 New York State Dormitory Authority
(New York Public Library)................................. A 3.000 5,700,000
3,300 New York State Dormitory Authority
(Oxford University Press)................................. A 3.650 3,300,000
700 New York State Dormitory Authority
(St. Francis Center at The Knolls)........................ A 3.800 700,000
8,500 New York State Energy Research & Development Authority
(Central Hudson Gas & Electric)........................... A 3.050 to 3.100 8,500,000
2,000 New York State Energy Research & Development Authority
(LILCO)
Adjustable Rate Bonds..................................... 03/01/97 3.250 2,000,000
1,000 New York State Energy Research & Development Authority (New
York State Electric & Gas Corporation) Adjustable Rate
Bonds..................................................... 03/15/97 3.300 1,000,000
3,000 New York State Energy Research & Development Authority
(Rochester Gas & Electric Corporation) Adjustable Rate
Bonds..................................................... 11/15/96 3.750 3,000,000
5,200 New York State Housing Finance Agency
(Mount Sinai Medical Center Project)...................... A 3.000 5,200,000
9,100 New York State Local Government Assistance Corporation...... A 3.100 9,100,000
1,500 New York State Local Government Assistance Corporation...... 04/01/97 5.500 1,518,364
2,500 New York State Medical Facilities Financing Agency
(Pooled Equipment Loan Program)........................... A 3.200 2,500,000
5,000 New York State Power Adjustable Rate Bonds.................. 09/01/96 3.250 5,000,000
</TABLE>
8
<PAGE>
PAINEWEBBER RMA NEW YORK MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- ------------
<S> <C> <C> <C>
MUNICIPAL BONDS & NOTES--(CONTINUED)
$2,735 Albany County School District
Tax Anticipation Notes.................................... 10/16/96 4.000% $2,738,748
3,000 Albany County Bond Anticipation Notes....................... 02/19/97 3.500 3,006,472
1,500 Babylon Union Free School District
Tax Anticipation Notes.................................... 04/18/97 4.000 1,502,301
1,250 Buffalo Revenue Anticipation Notes.......................... 07/16/96 4.200 1,250,402
1,000 Dutchess County Bond Anticipation Notes..................... 08/02/96 4.250 1,000,727
1,100 Erie County Revenue Anticipation Notes...................... 09/20/96 4.500 1,101,523
3,200 Erie County Water Authority................................. A 3.100 3,200,000
1,250 Harpursville Central School District
General Obligation Bonds.................................. 06/15/97 5.000 1,262,754
1,000 Hempstead Union Free School District
Revenue Anticipation Notes................................ 09/26/96 4.250 1,001,163
2,000 Ithica Bond Anticipation Notes.............................. 01/24/97 3.750 2,004,481
2,000 Levittown Union Free School District
Tax Anticipation Notes.................................... 06/25/97 4.250 2,003,778
2,000 Lindenhurst Union Free School District
Tax Anticipation Notes.................................... 06/25/97 4.750 2,012,263
7,100 Metropolitan Transportation Authority
(Commuter Facilities)..................................... A 3.150 7,100,000
2,400 Metropolitan Transportation Authority
Revenue Anticipation Notes................................ 12/12/96 4.250 2,407,377
1,500 Middletown Tax Anticipation Notes........................... 02/28/97 3.750 1,504,314
3,000 Monroe County Bond Anticipation Notes....................... 06/06/97 4.500 3,022,894
900 Monroe County Industrial Development Agency
(Electronic Navigation/Emerson Electric)
Adjustable Rate Bonds..................................... 07/01/96 3.800 900,000
8,740 Nassau County Bond Anticipation Notes....................... 08/15/96 to 03/14/97 4.000 to 4.375 8,755,336
13,070 New York City............................................... A 3.200 to 3.850 13,070,000
3,800 New York City Housing Development Corp.
(Columbus Series A)....................................... A 3.100 3,800,000
9,400 New York City Housing Development Corp.
(East 96th Street Project)................................ A 3.300 9,400,000
1,300 New York City Housing Development Corp.
(East 17th Street Project)................................ A 3.550 1,300,000
1,500 New York City Housing Development Corp.
(James Tower Project)..................................... A 3.200 1,500,000
</TABLE>
9
<PAGE>
PAINEWEBBER RMA NEW YORK MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- ------------
<S> <C> <C> <C>
MUNICIPAL BONDS & NOTES--(CONTINUED)
$900 New York City Housing Development Corp.
Multifamily Housing Revenue (Series A).................... 11/01/96 3.900% $900,000
2,760 New York City Housing Development Corp.
(Parkgate Tower Project).................................. A 3.150 2,760,000
2,550 New York City Housing Development Corp.
(Upper Fifth Avenue Project).............................. A 3.300 2,550,000
3,000 New York City Industrial Development Agency
(Calhoun School).......................................... A 3.150 3,000,000
7,000 New York City Industrial Development Agency
(JFK Field Hotel)......................................... A 3.500 7,000,000
6,400 New York City Industrial Development Agency
(LaGuardia Associates).................................... A 3.500 6,400,000
1,500 New York City Industrial Development Agency
(Stroheim & Romann)....................................... A 3.500 1,500,000
1,700 New York City Trust for Cultural Resources
(American Museum of Natural History)...................... A 3.100 1,700,000
4,800 New York City Trust for Cultural Resources
(Carnegie Hall)........................................... A 3.450 4,800,000
2,500 New York City Trust for Cultural Resources
(Soloman R. Guggenheim Museum)............................ A 3.450 2,500,000
4,100 Niagara Falls Toll Bridge Commission........................ A 3.100 4,100,000
3,100 Onondaga County Industrial Development Authority
(Edgecomb Metals)......................................... A 3.500 3,100,000
1,140 Onondaga County Industrial Development Authority
(McLane Co. Project)...................................... A 3.800 1,140,000
1,430 Orangetown Bond Anticipation Notes.......................... 02/27/97 4.125 1,432,945
2,000 Oswego Central School District
Tax Anticipation Notes.................................... 12/27/96 4.000 2,003,345
6,200 Rochester County Bond Anticipation Notes.................... 10/31/96 4.500 6,219,074
6,000 Rotterdam Industrial Development Agency..................... A 3.250 6,000,000
1,200 Saint Lawrence County Industrial Development Agency
(Reynolds Metals)......................................... A 3.600 1,200,000
1,000 Seneca County Industrial Development Agency
(N.Y. Chiropractic College)............................... A 3.150 1,000,000
2,000 Suffolk County
(Southwest Sewer Refunding District)...................... 02/01/97 4.000 2,005,334
2,000 Suffolk County Tax Anticipation Notes....................... 08/15/96 4.000 2,001,860
2,900 Suffolk County Water Authority.............................. A 3.250 2,900,000
</TABLE>
10
<PAGE>
PAINEWEBBER RMA NEW YORK MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- ------------
<S> <C> <C> <C>
MUNICIPAL BONDS & NOTES--(CONCLUDED)
$2,000 Syracuse Industrial Development Authority
(Syracuse University)..................................... A 3.450% $2,000,000
700 Triborough Bridge and Tunnel Authority
(Pre-refunded with U.S. Government Securities to 01/01/97
@ 102).................................................... 01/01/97 8.250 724,233
2,000 Yonkers Industrial Development Agency Civic Facility
Revenue Bonds (Consumers Union Facility).................. A 3.200 2,000,000
------------
Total Municipal Bonds & Notes (cost--$214,169,170)..................... 214,169,170
------------
TAX EXEMPT COMMERCIAL PAPER--16.70%
8,100 New York State.............................................. 07/22/96 to 09/17/96 3.300 to 6.625 8,104,974
8,000 New York State Dormitory Authority
(Sloan Kettering Memorial)................................ 07/22/96 to 09/10/96 3.500 to 3.650 8,000,000
2,500 New York State Power Authority.............................. 08/13/96 3.600 2,500,000
1,700 Municipal Assistance Company for New York (Series F)........ 07/29/96 3.700 1,700,000
1,300 New York City............................................... 09/23/96 3.700 1,300,000
16,800 New York City Municipal Finance Authority
(Water and Sewer System).................................. 07/29/96 to 09/19/96 3.100 to 3.700 16,800,000
4,200 Puerto Rico Commonwealth Government
Development Bank.......................................... 07/05/96 to 09/18/96 3.500 4,200,000
------------
Total Tax Exempt Commercial Paper (cost--$42,604,974).................. 42,604,974
------------
Total Investments (cost--$256,774,144, which approximates cost
for federal income tax purposes)--100.63%............................ 256,774,144
Liabilities in excess of other assets--(0.63)%......................... (1,597,388)
------------
NET ASSETS (applicable to 255,415,393 shares of beneficial interest
at $1.00 per share)--100.00%......................................... $255,176,756
------------
------------
</TABLE>
- ------------------
A--Variable Rate Demand Notes are payable on demand. The interest rates shown
are the current rates as of June 30, 1996 and reset periodically.
Weighted average maturity--56 days
See accompanying notes to financial statements.
11
<PAGE>
PAINEWEBBER MANAGED MUNICIPAL TRUST
- --------------------------------------------------------------------------------
Statement of Operations
For the Year Ended June 30, 1996
- --------------------------------------------------------------------------------
RMA RMA
California New York
----------- ----------
INVESTMENT INCOME:
Interest....................................... $14,920,447 $8,926,736
----------- ----------
EXPENSES:
Investment advisory and administration......... 2,050,593 1,263,305
Distribution fees.............................. 339,545 202,130
Transfer agency and service fees............... 133,717 91,654
Custody and accounting......................... 116,162 74,746
Fund acquisition expense....................... 114,000 105,325
Legal and audit................................ 82,649 68,363
Federal and state registration fees............ 63,967 21,546
Reports and notices to shareholders............ 40,013 27,869
Trustees' fees................................. 10,625 10,625
Other expenses................................. 9,590 3,250
----------- ----------
2,960,861 1,868,813
LESS:
Fee waivers from adviser....................... -- (46,118)
----------- ----------
Net expenses................................... 2,960,861 1,822,695
----------- ----------
NET INVESTMENT INCOME............................. 11,959,586 7,104,041
NET REALIZED GAINS (LOSSES) FROM INVESTMENT
TRANSACTIONS.................................... (17,667) 25,432
----------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS...................................... $11,941,919 $7,129,473
----------- ----------
----------- ----------
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended For the Year Ended
June 30, 1996 June 30, 1995
---------------------------- ----------------------------
RMA RMA RMA RMA
California New York California New York
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment
income.............. $ 11,959,586 $ 7,104,041 $ 9,192,474 $ 5,195,008
Net realized gains
(losses) from
investment
transactions........ (17,667) 25,432 (32,808) (4,018)
------------ ------------ ------------ ------------
Net increase in net
assets resulting
from operations..... 11,941,919 7,129,473 9,159,666 5,190,990
------------ ------------ ------------ ------------
DIVIDENDS TO
SHAREHOLDERS FROM:
Net investment
income.............. (12,073,586) (7,209,366) (9,192,474) (5,195,008)
------------ ------------ ------------ ------------
NET INCREASE FROM
TRANSACTIONS IN SHARES
OF BENEFICIAL
INTEREST............... 142,920,650 62,457,879 35,786,197 27,691,651
------------ ------------ ------------ ------------
Net increase in net
assets.............. 142,788,983 62,377,986 35,753,389 27,687,633
NET ASSETS:
Beginning of year..... 330,936,549 192,798,770 295,183,160 165,111,137
------------ ------------ ------------ ------------
End of year........... $473,725,532 $255,176,756 $330,936,549 $192,798,770
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
PAINEWEBBER MANAGED MUNICIPAL TRUST
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber Managed Municipal Trust ('Trust') was organized under Massachusetts
law by a Declaration of Trust dated November 21, 1986 and is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, as an open-end management investment company. The Trust currently
offers two no-load, non-diversified series of shares: PaineWebber RMA California
Municipal Money Fund ('RMA California') and PaineWebber RMA New York Municipal
Money Fund ('RMA New York') (collectively the 'Funds').
The preparation of financial statements in accordance with generally accepted
accounting principles requires Fund management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates. Following is a summary of
significant accounting policies:
Valuation and Accounting for Investments--Investments are valued at amortized
cost which approximates market value. Investment transactions are recorded on
the trade date. Realized gains and losses from investment transactions are
calculated using the identified cost method. Interest income is recorded on an
accrual basis. Premiums are amortized and discounts are accreted as adjustments
to interest income and the identified cost of investments.
Dividends and distributions--Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions are
determined in accordance with federal income tax regulations, which may differ
from generally accepted accounting principles. These 'book/tax' differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification.
CONCENTRATION OF RISK
Each Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by each Fund.
ACQUISITIONS
Acquisition of PaineWebber/Kidder, Peabody California Tax-Exempt Money Fund
('PW/KP California Tax-Exempt Money Fund')--Effective December 11, 1995, RMA
California acquired all the net assets of PW/KP California Tax-Exempt Money Fund
pursuant to a plan of reorganization approved by PW/KP California Tax-Exempt
Money Fund shareholders on December 4, 1995. The acquisition was accomplished by
a tax-free exchange of 120,122,110 shares of RMA California for 120,122,110
shares of PW/KP California Tax-Exempt Money Fund outstanding on December 11,
1995. PW/KP California Tax-Exempt Money Fund's net assets at that date, valued
at $120,039,530,
13
<PAGE>
PAINEWEBBER MANAGED MUNICIPAL TRUST
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
including accumulated net realized losses of $26,217, were combined with those
of RMA California.
Acquisition of PaineWebber/Kidder, Peabody Municipal Money Market Series--New
York Series ('PW/KP Municipal Money Market Series--New York Series')--Effective
November 13, 1995, RMA New York acquired all the net assets of PW/KP Municipal
Money Market Series--New York Series pursuant to a plan of reorganization
approved by PW/KP Municipal Money Market Series--New York Series shareholders on
November 8, 1995. The acquisition was accomplished by a tax-free exchange of
38,947,877 shares of RMA New York for 38,947,877 shares of PW/KP Municipal Money
Market Series--New York Series outstanding on November 13, 1995. PW/KP Municipal
Money Market Series--New York Series' net assets at that date, valued at
$38,923,062, including accumulated net realized losses of $5,141, were combined
with those of RMA New York.
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust's board of trustees has approved an Investment Advisory and
Administration Contract ('Advisory Contract') with PaineWebber Incorporated
('PaineWebber'), under which PaineWebber serves as investment adviser and
administrator of the Trust and each of its Funds. In accordance with the
Advisory Contract, each Fund pays PaineWebber an investment advisory and
administration fee, which is accrued daily and paid monthly in accordance with
the following schedule:
Annual
Average Daily Net Assets Rate
- ------------------------------------------------------------ ------
Up to $300 million.......................................... 0.50%
In excess of $300 million up to $750 million................ 0.44
Over $750 million........................................... 0.36
At June 30, 1996, RMA California and RMA New York owed PaineWebber $191,351 and
$103,211, respectively, for investment advisory and administration fees.
Mitchell Hutchins Asset Management Inc. ('Mitchell Hutchins'), a wholly owned
subsidiary of PaineWebber, serves as sub-adviser and sub-administrator of the
Funds pursuant to a sub-advisory and sub-administration contract between
PaineWebber and Mitchell Hutchins. In accordance with that contract, PaineWebber
(not the Funds) pays Mitchell Hutchins a fee, accrued daily and paid monthly, at
an annual rate of 20% of the fee paid by the Funds to PaineWebber under the
Advisory Contract.
In compliance with applicable state securities laws, PaineWebber will reimburse
each Fund if and to the extent that the aggregate operating expenses in any
fiscal year, exclusive of taxes, interest, brokerage fees, distribution fees and
extraordinary expenses, exceed limitations imposed by various state regulations.
Currently, the most restrictive limitation applicable to each Fund is 2.5% of
the first $30 million of average daily net assets, 2.0% of the next $70 million
and 1.5% of any excess
14
<PAGE>
PAINEWEBBER MANAGED MUNICIPAL TRUST
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
over $100 million. For the year ended June 30, 1996, no reimbursements were
required pursuant to the above limitation, however, PaineWebber voluntarily
waived a portion of its investment advisory and administration fees for RMA New
York.
DISTRIBUTION PLAN
PaineWebber is the distributor of each Fund's shares. Under the plan of
distribution, each Fund is authorized to pay PaineWebber a monthly service fee
at the annual rate of up to 0.15% of each Fund's average daily net assets for
providing shareholder services and maintaining shareholder accounts. Currently,
PaineWebber is compensated for providing such services at the annual rate of
0.08% of each Fund's average daily net assets. At June 30, 1996, RMA California
and RMA New York owed PaineWebber $32,108 and $16,514, respectively, for such
service fees.
TRANSFER AGENCY SERVICE FEES
Each Fund pays PaineWebber an annual fee of $4.00 per active PaineWebber
shareholder account plus certain out-of-pocket expenses, for certain services
not provided by the Funds' transfer agent. For the year ended June 30, 1996,
PaineWebber earned $50,117 and $36,019 in transfer agency service fees from RMA
California and RMA New York, respectively. At June 30, 1996, RMA California and
RMA New York owed PaineWebber $4,539 and $3,150, respectively, for such transfer
agency service fees and reimbursement of out-of-pocket expenses.
OTHER LIABILITIES
At June 30, 1996, RMA California and RMA New York had dividends payable
aggregating $398,192 and $209,441, respectively, and payables for investments
purchased aggregating $33,934,634 and $3,010,230, respectively.
FEDERAL TAX STATUS
Each Fund intends to distribute all of its tax-exempt income and any taxable
income and to comply with the other requirements of the Internal Revenue Code
applicable to regulated investment companies. Accordingly, no provision for
federal income taxes is required. In addition, by distributing during each
calendar year substantially all of its net investment income, capital gains and
certain other amounts, if any, each Fund intends not to be subject to a federal
excise tax.
At June 30, 1996, RMA California had net capital loss carryforwards of $353,930
which includes capital losses acquired by the Fund pursuant to its
reorganization during the current fiscal year, with PW/KP California Tax Exempt
Money Fund in the amount of $26,217. RMA New York had net capital loss
carryforwards of $113,636 which includes losses acquired by the Fund pursuant to
its reorganization during the current fiscal year, with PW/KP Municipal Money
Market Series--New York Series in the amount of $5,141. These loss carryforwards
are available as reductions, to the extent provided in the regulations, of
future net realized capital gains, and will expire for RMA
15
<PAGE>
PAINEWEBBER MANAGED MUNICIPAL TRUST
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
California between June 30, 1997 and June 30, 2004, and for RMA New York between
June 30, 1997 and June 30, 2003. To the extent these losses are used to offset
future capital gains, it is probable that the gains so offset will not be
distributed.
BENEFICIAL INTEREST
There is an unlimited amount of $0.001 par value shares of beneficial interest
authorized for each Fund. Transactions in shares of beneficial interest, at
$1.00 per share, were as follows:
<TABLE>
<CAPTION>
For the Year Ended June 30, 1996 For the Year Ended June 30, 1995
---------------------------------- ----------------------------------
RMA California RMA New York RMA California RMA New York
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Shares sold.............. 2,242,802,568 1,461,429,170 1,651,147,178 1,109,690,314
Shares issued in
connection with the
acquisition of:
PW/KP California Tax
Exempt Money Fund...... 120,122,110 -- -- --
PW/KP Municipal Money
Market Series--New York
Series................. -- 38,947,877 -- --
Shares repurchased....... (2,231,700,082) (1,444,920,852) (1,624,312,810) (1,087,057,232)
Dividends reinvested..... 11,696,054 7,001,684 8,951,829 5,058,569
--------------- --------------- --------------- ---------------
Net increase............. 142,920,650 62,457,879 35,786,197 27,691,651
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
16
<PAGE>
PAINEWEBBER RMA CALIFORNIA MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
FOR THE
FOR THE YEARS ENDED SEVEN FOR THE
JUNE 30, MONTHS ENDED YEAR ENDED
--------------------------------------------- JUNE 30, NOVEMBER 30,
1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ------------ ------------
Net investment income.... 0.029 0.029 0.018 0.019 0.016 0.038
Dividends from net
investment income...... (0.029) (0.029) (0.018) (0.019) (0.016) (0.038)
-------- -------- -------- -------- ------------ ------------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ------------ ------------
-------- -------- -------- -------- ------------ ------------
Total investment return
(1).................... 2.89% 2.91% 1.78% 1.88% 1.61% 3.81%
-------- -------- -------- -------- ------------ ------------
-------- -------- -------- -------- ------------ ------------
Ratios/Supplemental Data:
Net assets, end of
period (000's)....... $473,726 $330,937 $295,183 $290,367 $259,183 $261,902
Expenses to average
net assets........... 0.70%(2) 0.69% 0.69% 0.72% 0.69%* 0.75%
Net investment income
to average
net assets........... 2.82%(2) 2.87% 1.79% 1.86% 2.75%* 3.83%
</TABLE>
- ---------------
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. Total investment
returns for periods of less than one year have not been annualized.
(2) These ratios include non-recurring acquisition expenses of 0.03%.
17
<PAGE>
PAINEWEBBER RMA NEW YORK MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
FOR THE FOR THE
FOR THE YEARS ENDED SEVEN YEAR ENDED
JUNE 30, MONTHS ENDED NOVEMBER 30,
-------------------------------------------- JUNE 30, ------------
1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ------------ ------------
Net investment income.... 0.029 0.028 0.017 0.018 0.016 0.037
Dividends from net
investment income...... (0.029) (0.028) (0.017) (0.018) (0.016) (0.037)
-------- -------- -------- -------- ------------ ------------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ------------ ------------
-------- -------- -------- -------- ------------ ------------
Total investment
return (1)............. 2.91% 2.81% 1.70% 1.82% 1.62% 3.74%
-------- -------- -------- -------- ------------ ------------
-------- -------- -------- -------- ------------ ------------
Ratios/Supplemental Data:
Net assets, end of
period (000's)....... $255,177 $192,799 $165,111 $116,604 $129,687 $121,347
Expenses to average net
assets:
Before waiver from
adviser............ 0.74%(2) 0.71% 0.75% 0.79% 0.73%* 0.89%
After waiver from
adviser............ 0.72%(2) 0.68% 0.68% 0.68% 0.68%* 0.68%
Net investment income
to average net
assets:
Before waiver from
adviser............ 2.80%(2) 2.78% 1.67% 1.70% 2.54%* 3.52%
After waiver from
adviser............ 2.82%(2) 2.81% 1.74% 1.81% 2.59%* 3.73%
</TABLE>
- ---------------
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates and a sale at net
asset value on the last day of each period reported. Total investment
returns for periods of less than one year have not been annualized.
(2) These ratios include non-recurring acquisition expenses of 0.04%.
18
<PAGE>
PAINEWEBBER MANAGED MUNICIPAL TRUST
- --------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders
PaineWebber Managed Municipal Trust
We have audited the accompanying statement of net assets of PaineWebber Managed
Municipal Trust (comprising, respectively, the PaineWebber RMA California
Municipal Money Fund and PaineWebber RMA New York Municipal Money Fund (the
'Funds')) as of June 30, 1996, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
periods indicted therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and 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 investments owned at June
30, 1996 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 statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds constituting the PaineWebber Managed Municipal Trust at
June 30, 1996, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
August 12, 1996
19
<PAGE>
PAINEWEBBER MANAGED MUNICIPAL TRUST
- --------------------------------------------------------------------------------
Tax Information
- --------------------------------------------------------------------------------
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of each Fund's fiscal year end (June 30,
1996) as to the federal tax status of distributions received by shareholders
during such fiscal year. Accordingly, we are advising you that all dividends
paid during the fiscal year by RMA California and RMA New York were federally
exempt interest dividends. Since each respective Fund did not invest in any
security which paid interest subject to the federal alternative minimum tax for
individual taxpayers during its fiscal year, none of the dividends paid by each
Fund were subject to such tax. Also, all dividends paid by RMA California were
exempt from California personal income tax and all dividends paid by RMA New
York were exempt from New York State and New York City personal income tax.
Because each Fund's fiscal year is not the calendar year, another notification
will be sent in respect of calendar year 1996. The second notification, which
will reflect any amounts to be used by calendar year taxpayers on their federal
income tax returns, will be made in conjunction with Form 1099 DIV and will be
mailed in January 1997. Shareholders are advised to consult their own tax
advisers with respect to the tax consequences of their investment in each
respective Fund.
20
<PAGE>
PAINEWEBBER MANAGED MUNICIPAL TRUST
- --------------------------------------------------------------------------------
Shareholder Information
- --------------------------------------------------------------------------------
A Special Meeting of Shareholders was held on May 1, 1996, at which the
following proposals were approved for the Funds. Both funds of the Trust voted
separately on all matters being considered by the series, except for the
election of trustees, as to which the shares of both series of the Trust voted
together as a single class.
PROPOSAL 1
To elect ten members of its Board of Trustees:
Funds Voting Together
-------------------------------
Shares Voted Shares Withhold
For Authority
------------ ---------------
Margo N. Alexander............ 346,937,063 49,840,221
Richard Q. Armstrong.......... 346,939,038 49,838,246
E. Garrett Bewkes, Jr......... 346,734,852 50,042,432
Richard Burt.................. 346,939,038 49,838,246
Mary C. Farrell............... 346,937,063 49,840,221
Meyer Feldberg................ 346,940,773 49,836,511
George W. Gowen............... 346,939,038 49,838,246
Frederic V. Malek............. 346,932,040 49,845,244
Carl W. Schafer............... 346,939,038 49,838,246
John R. Torell, III........... 346,931,410 49,845,874
PROPOSAL 2
To vote for or against the ratification of the selection of Ernst & Young LLP as
the independent auditors for each Fund's fiscal year ended June 30, 1996:
Shares Voted Shares Voted Shares
For Against Abstain
------------ ------------ ----------
RMA California...... 219,963,725 1,492,435 23,983,873
RMA New York........ 126,825,157 774,735 23,737,359
PROPOSAL 3
To vote for or against the following changes to each Fund's fundamental
investment restrictions and policies:
Shares Voted Shares Voted Shares
For Against Abstain
------------ ------------ ----------
Modification of fundamental restriction on concentration:
RMA California...... 215,538,775 3,914,724 25,986,534
RMA New York........ 124,255,880 2,607,357 24,474,014
Modification of fundamental restriction on senior securities and borrowing:
RMA California...... 215,538,775 3,914,724 25,986,534
21
<PAGE>
PAINEWEBBER MANAGED MUNICIPAL TRUST
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Voted Shares Voted Shares
For Against Abstain
------------ ------------ ----------
RMA New York........ 124,255,880 2,607,357 24,474,014
Modification of fundamental restriction on making loans:
RMA California...... 215,538,775 3,914,724 25,986,534
RMA New York........ 124,255,880 2,607,357 24,474,014
Modification of fundamental restriction on underwriting securities:
RMA California...... 215,538,775 3,914,724 25,986,534
RMA New York........ 124,255,880 2,607,357 24,474,014
Modification of fundamental restriction on real estate investments:
RMA California...... 215,538,775 3,914,724 25,986,534
RMA New York........ 124,255,880 2,607,357 24,474,014
Modification of fundamental restriction on investing in commodities:
RMA California...... 215,538,775 3,914,724 25,986,534
RMA New York........ 124,255,880 2,607,357 24,474,014
Elimination of fundamental restriction on pledging portfolio securities:
RMA California...... 215,468,159 3,985,340 25,986,534
RMA New York........ 124,255,880 2,607,357 24,474,014
Elimination of fundamental restriction on margin transactions:
RMA California...... 215,538,775 3,914,724 25,986,534
RMA New York........ 124,255,880 2,607,357 24,474,014
Elimination of fundamental restriction on short sales:
RMA California...... 215,468,159 3,985,340 25,986,534
RMA New York........ 124,255,880 2,607,357 24,474,014
Elimination of fundamental restriction on investments in oil, gas and mineral
leases and programs:
RMA California...... 215,263,973 4,189,526 25,986,534
RMA New York........ 124,255,880 2,607,357 24,474,014
Elimination of fundamental restriction on investments in other investment
companies:
RMA California...... 215,538,775 3,914,724 25,986,534
RMA New York........ 124,255,880 2,607,357 24,474,014
- ------------------
(Broker non-votes and abstentions are included within the 'Shares Withhold
Authority' and 'Shares Abstain' totals.)
22
<PAGE>
PAINEWEBBER RMA CONNECTICUT MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
June 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- -----------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--79.99%
$1,500 Connecticut General Obligation Bonds........................ 08/15/96 5.250% $1,502,822
300 Connecticut Development Authority
(Exeter Project B)........................................ A 3.450 300,000
600 Connecticut Development Authority
(Shaw Incorporated)....................................... A 3.300 600,000
700 Connecticut Development Authority
(Shelton Inn Limited Partnership)......................... A 3.800 700,000
1,400 Connecticut Development Authority
Health Care Corporation
(Independent Living Project).............................. A 3.350 1,400,000
500 Connecticut Development Authority
Pollution Control Revenue
(United Illuminating)..................................... A 3.300 500,000
1,100 Connecticut Development Authority
Pollution Control Revenue
(Connecticut Light and Power Company Project A)........... A 3.350 1,100,000
800 Connecticut Development Authority
Pollution Control Revenue
(Western Massachusetts Electric Company).................. A 3.100 800,000
700 Connecticut Special Tax Obligation Revenue
(Second Lien Transportation).............................. A 3.200 700,000
200 Connecticut Special Tax Obligation Revenue
(Transportation Infrastructure)........................... 09/01/96 4.500 200,416
500 Darien Bond Anticipation Notes.............................. 08/14/96 4.000 500,202
515 Groton Bank Qualified Notes................................. 11/15/96 6.300 519,590
500 Groton Bond Anticipation Notes.............................. 07/10/97 4.000 502,115
300 Litchfield Bond Anticipation Notes.......................... 10/24/96 4.000 300,245
233 North Stonington Bond Anticipation Notes.................... 07/19/96 3.900 232,522
500 Prospect Bond Anticipation Notes............................ 07/26/96 3.900 500,049
1,000 South Central Connecticut Regional Water Authority
Water Systems Revenue Bonds
(Pre-refunded with U.S. Government securities to 08/01/96
@ 102).................................................... 08/01/96 7.125 1,022,717
900 Stamford Housing Authority Revenue
(Multi Modal Morgan Street Project)....................... A 3.350 900,000
300 Trumbull General Obligation Bonds........................... 05/01/97 6.600 307,183
700 Westport Bond Anticipation Notes............................ 10/17/96 3.750 700,708
</TABLE>
23
<PAGE>
PAINEWEBBER RMA CONNECTICUT MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- -----------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
$1,100 Puerto Rico Commonwealth
(Government Development Bank)............................. A 3.000% $1,100,000
800 Puerto Rico Commonwealth
Highway And Transportation Authority Revenue.............. A 3.000 800,000
-----------
Total Municipal Bonds and Notes (cost--$15,188,569).................... 15,188,569
-----------
TAX EXEMPT COMMERCIAL PAPER--12.64%
500 Connecticut Health and Educational Facilities Authority
(Yale University)......................................... 07/12/96 to 07/29/96 3.300 500,000
500 Connecticut Housing Finance Authority
(Housing Mortgage Finance Program)........................ 07/30/96 3.450 500,000
400 Connecticut Municipal Electric Energy Cooperative........... 07/12/96 3.250 400,000
200 Puerto Rico Commonwealth
(Government Development Bank)............................. 07/19/96 3.450 200,000
800 Puerto Rico Industrial Medical and Environmental
Pollution Control Facilities Financing Authority Revenue
(Interamerican University)................................ 07/01/96 3.450 800,000
-----------
Total Tax Exempt Commercial Paper (cost--$2,400,000)................... 2,400,000
-----------
Total investments (cost--$17,588,569 which approximates
cost for federal income tax purposes)--92.63%........................ 17,588,569
Other assets in excess of liabilities--7.37%........................... 1,399,388
-----------
NET ASSETS --100.00%................................................... $18,987,957
-----------
-----------
</TABLE>
- ------------------
A--Variable Rate Demand Notes are payable on demand. The interest rates shown
are the current rates as of June 30, 1996.
Weighted average maturity--40 days
See accompanying notes to financial statements.
24
<PAGE>
PAINEWEBBER RMA NEW JERSEY MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
Statement of Net Assets
June 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- -----------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--86.85%
$400 New Jersey General Obligation Bonds......................... 09/15/96 6.250% $402,141
1,700 New Jersey Economic Development Authority................... A 3.450 1,700,000
400 New Jersey Economic Development Authority
(400 International Drive Partners)........................ A 2.900 400,000
1,475 New Jersey Economic Development Authority
(Brach/Jersey Avenue Project)............................. A 3.050 1,475,000
300 New Jersey Economic Development Authority
(Church and Dwight Company Project)....................... A 2.800 300,000
1,447 New Jersey Economic Development Authority
(Curtiss Wright Flight)................................... A 3.150 1,447,000
2,500 New Jersey Economic Development Authority
(Dow Chemical)............................................ A 3.500 2,500,000
500 New Jersey Economic Development Authority
(Epitaxx Incorporated).................................... A 3.550 500,000
1,500 New Jersey Economic Development Autnority
(Franciscan Oaks Project)................................. A 3.200 1,500,000
1,300 New Jersey Economic Development Authority
(Hillcrest Health Service Systems Project)................ A 3.150 1,300,000
1,300 New Jersey Economic Development Authority
(New Jersey Natural Gas).................................. A 3.500 1,300,000
500 New Jersey Economic Development Authority
(Thermal Energy Limited Partnership)...................... 08/22/96 3.600 500,000
500 New Jersey Economic Development Authority
(W.Y. Plastic Products Corporation Project)............... A 3.200 500,000
1,700 New Jersey Economic and Industrial Development Authority
(Burmah Castrol Incorporated)............................. A 3.050 1,700,000
2,000 New Jersey Economic and Industrial Development Authority
(Fujinon Incorporated Project)............................ A 3.050 2,000,000
1,500 New Jersey State Transportation
Trust Fund Authority Bonds................................ 12/15/96 5.500 1,514,236
175 Atlantic County
County Community College.................................. 08/15/96 7.000 175,714
571 Bridgewater Township General Improvement Notes.............. 11/01/96 4.625 572,629
</TABLE>
25
<PAGE>
PAINEWEBBER RMA NEW JERSEY MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- -----------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
$500 Burlington County Bond Anticipation Notes................... 06/13/97 4.250% $502,612
1,000 Burlington County General Obligation Bonds
(Pre-refunded with U.S. Government securities
to 03/15/97 @ 102)........................................ 03/15/97 6.300 1,038,005
250 Dunellen Board of Education................................. 08/01/96 5.625 250,485
285 Essex County
County Community College.................................. 11/15/96 5.100 286,259
500 Essex County Improvement Authority Project Revenue
(County Asset Sale)....................................... A 3.200 500,000
400 Franklin Township General Obligation Bonds.................. 07/15/96 7.000 400,525
550 Mercer County Unlimited Tax General Obligation Bonds........ 07/01/96 5.500 550,000
500 Middlesex County General Obligation Bonds................... 07/15/97 3.900 500,489
290 Millville Board of Education
(New Jersey School Bond Reserve Act)...................... 08/01/96 5.200 290,333
1,000 Monmouth County Bond Anticipation Notes..................... 08/29/96 4.375 1,000,658
545 Morris Township Bond Anticipation Notes..................... 05/16/97 4.125 546,308
690 Newark Healthcare Facility Revenue
(New Community Facility).................................. A 3.650 690,000
700 Parsippany Township Bond Anticipation Notes................. 11/01/96 4.250 701,336
500 Piscataway Township Bond Anticipation Notes................. 04/25/97 4.250 502,558
3,400 Port Authority of New York and New Jersey................... A 3.500 to 3.700 3,400,000
1,350 Princeton Township Bond Anticipation Notes.................. 08/29/96 4.125 1,350,617
1,500 Roselle Park Bond Anticipation Notes........................ 09/06/96 3.750 1,500,672
200 Scotch Plains Township Bond Anticipation Notes.............. 04/01/97 5.050 202,192
500 Seaside Heights Bond Anticipation Notes..................... 02/21/97 3.625 501,148
340 Union County General Obligation Bonds....................... 06/01/97 4.550 342,726
100 Warren Township General Obligation Bonds.................... 07/01/96 6.200 100,000
235 West Windsor Township General Improvement Bonds............. 01/15/97 4.550 235,989
1,500 Puerto Rico Commonwealth
(Government Development Bank)............................. A 3.000 1,500,000
-----------
Total Municipal Bonds and Notes (cost--$36,679,632).................... 36,679,632
-----------
</TABLE>
26
<PAGE>
PAINEWEBBER RMA NEW JERSEY MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- -----------
<S> <C> <C> <C>
TAX EXEMPT COMMERCIAL PAPER--12.36%
$1,000 New Jersey Economic Development Authority 3.250 to
(Chambers Cogeneration Project)........................... 08/07/96 to 08/12/96 3.350% $1,000,000
700 New Jersey Economic Development Authority
(Keystone Project)........................................ 08/12/96 3.250 700,000
1,020 Port Authority of New York and New Jersey................... 07/23/96 3.100 1,020,000
2,500 Puerto Rico Commonwealth
(Government Development Bank)............................. 07/22/96 to 08/09/96 3.250 to 3.300 2,500,000
-----------
Total Tax Exempt Commercial Paper (cost--$5,220,000)................... 5,220,000
-----------
Total Investments (cost--$41,899,632 which approximates
cost for federal income tax purposes)--99.21%........................ 41,899,632
Other assets in excess of liabilities--0.79%........................... 333,183
-----------
NET ASSETS (applicable to 42,237,322 shares of beneficial
interest at $1.00 per share)--100.00%................................ $42,232,815
-----------
-----------
</TABLE>
- ------------------
A--Variable Rate Demand Notes are payable on demand. The interest rates shown
are the current rates as of June 30, 1996.
Weighted average maturity--56 days
See accompanying notes to financial statements.
27
<PAGE>
PAINEWEBBER RMA CONNECTICUT MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
June 30, 1996
- --------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost--$17,588,569)...... $17,588,569
Cash......................................................... 1,814,000
Interest receivable.......................................... 148,283
Other assets................................................. 8,317
-----------
Total assets................................................. 19,559,169
-----------
LIABILITIES:
Payable for investments purchased............................ 502,115
Dividends payable............................................ 13,649
Payable to affiliates........................................ 9,937
Accrued expenses and other liabilities....................... 45,511
-----------
Total liabilities............................................ 571,212
-----------
NET ASSETS:
Beneficial interest--$0.001 par value (unlimited amount
authorized); 18,985,779 shares issued and outstanding...... 18,986,582
Undistributed net investment income.......................... 1,375
-----------
Net assets................................................... $18,987,957
-----------
-----------
Net asset value, offering price and redemption value per
share...................................................... $1.00
-----------
-----------
A Statement of Assets and Liabilities is presented for RMA Connecticut Municipal
Money Fund due to a regulatory requirement of the Securities and Exchange
Commission, which states that a Statement of Net Assets can only be used in lieu
of a Statement of Assets and Liabilities if at least 95% of a fund's total
assets are represented by investments in securities. At June 30, 1996, RMA
Connecticut Municipal Money Fund had 90% of total assets in investments in
securities.
See accompanying notes to financial statements.
28
<PAGE>
PAINEWEBBER MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
Statement of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Eight Months
Ended For the Year Ended
June 30, 1996 October 31, 1995
------------------------- -------------------------
RMA RMA RMA RMA
Connecticut New Jersey Connecticut New Jersey
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest................... $ 545,472 $969,200 $ 877,777 $1,229,243
----------- ---------- ----------- ----------
EXPENSES:
Investment advisory and
administration........... 76,173 138,224 120,651 167,865
Custody and accounting..... 18,683 22,998 29,550 31,313
Reports and notices to
shareholders............. 18,649 22,157 13,500 17,720
Distribution fees.......... 18,280 33,172 28,957 40,287
Legal and audit............ 13,519 13,056 12,500 14,296
Transfer agency fees....... 12,961 16,104 16,450 19,300
Federal and state
registration fees........ 3,105 5,016 5,000 5,500
Trustee's fees............. 2,467 2,467 3,700 3,700
Amortization of
organizational
expenses................. -- -- 6,672 6,658
Other expenses............. 5,728 8,294 5,889 6,095
----------- ---------- ----------- ----------
169,565 261,488 242,869 312,734
----------- ---------- ----------- ----------
NET INVESTMENT INCOME......... 375,907 707,712 634,908 916,509
NET REALIZED GAINS (LOSSES)
FROM INVESTMENT
TRANSACTIONS................ -- (2,729) 924 (1,778 )
----------- ---------- ----------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS... $ 375,907 $704,983 $ 635,832 $ 914,731
----------- ---------- ----------- ----------
----------- ---------- ----------- ----------
</TABLE>
See accompanying notes to financial statements
29
<PAGE>
PAINEWEBBER RMA CONNECTICUT MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended
For the Eight October 31,
Months Ended --------------------------
June 30, 1996 1995 1994
------------- ----------- -----------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income............ $ 375,907 $ 634,908 $ 519,464
Net realized gains (losses) from
investment transactions........ -- 924 (3,284)
------------- ----------- -----------
Net increase in net assets
resulting from operations...... 375,907 635,832 516,180
------------- ----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income............ (375,907) (634,908) (519,464)
------------- ----------- -----------
NET DECREASE IN NET ASSETS FROM
BENEFICIAL INTEREST
TRANSACTIONS..................... (3,221,256) (3,563,889) (2,170,701)
------------- ----------- -----------
Contribution to capital from
predecessor adviser.............. -- 8,906 --
------------- ----------- -----------
Net decrease in net assets....... (3,221,256) (3,554,059) (2,173,985)
NET ASSETS:
Beginning of period.............. 22,209,213 25,763,272 27,937,257
------------- ----------- -----------
End of period.................... $18,987,957 $22,209,213 $25,763,272
------------- ----------- -----------
------------- ----------- -----------
</TABLE>
See accompanying notes to financial statements.
30
<PAGE>
PAINEWEBBER RMA NEW JERSEY MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended
For the Eight October 31,
Months Ended --------------------------
June 30, 1996 1995 1994
------------- ----------- -----------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 707,712 $ 916,509 $ 718,975
Net realized losses from investment
transactions........................ (2,729) (1,778) (18,941)
------------- ----------- -----------
Net increase in net assets resulting
from operations..................... 704,983 914,731 700,034
------------- ----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income................. (707,712) (916,509) (718,975)
------------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM BENEFICIAL INTEREST
TRANSACTIONS.......................... 6,029,617 4,205,178 (4,473,284)
------------- ----------- -----------
Contribution to capital from predecessor
adviser............................... -- 21,521 --
------------- ----------- -----------
Net increase (decrease) in net
assets.............................. 6,026,888 4,224,921 (4,492,225)
NET ASSETS:
Beginning of period................... 36,205,927 31,981,006 36,473,231
------------- ----------- -----------
End of period......................... $42,232,815 $36,205,927 $31,981,006
------------- ----------- -----------
------------- ----------- -----------
</TABLE>
See accompanying notes to financial statements.
31
<PAGE>
PAINEWEBBER MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber Municipal Money Market Series (formerly PaineWebber/Kidder, Peabody
Municipal Money Market Series) (the 'Trust') was organized under a Massachusetts
business trust on September 14, 1990, and is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended, as an
open-end, non-diversified management investment company. The Trust currently
offers two no-load series of shares: PaineWebber RMA Connecticut Municipal Money
Fund ('RMA Connecticut') (formerly the Connecticut Series) and PaineWebber RMA
New Jersey Municipal Money Fund ('RMA New Jersey') (formerly the New Jersey
Series) (collectively the 'Funds'). The Board of Trustees has elected to change
the Funds' fiscal year ends from October 31 to June 30.
The preparation of financial statements in accordance with generally accepted
accounting principles requires Fund management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates. Following is a summary of
significant accounting policies:
Valuation and Accounting for Investments--Investments are valued at amortized
cost which approximates market value. Investment transactions are recorded on
the trade date. Realized gains and losses from investment transactions are
calculated using the identified cost method. Interest income is recorded on an
accrual basis. Premiums are amortized and discounts are accreted as adjustments
to interest income and the identified cost of investments.
Dividends and distributions--Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions are
determined in accordance with federal income tax regulations, which may differ
from generally accepted accounting principles. These 'book/tax' differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification.
CONCENTRATION OF RISK
The Funds follow an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of the issuers
within the state to pay interest on, or repay principal of, municipal
obligations held by the Funds.
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust's board of trustees has approved an Investment Advisory and
Administration Contract ('Advisory Contract') with PaineWebber Incorporated
('PaineWebber'), under which PaineWebber serves as investment adviser and
administrator of the Funds. In accordance with the Advisory Contract, the Funds
pay PaineWebber an investment advisory and administration fee,
32
<PAGE>
PAINEWEBBER MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
which is accrued daily and paid monthly, at an annual rate of 0.50% of the
Fund's average daily net assets. At June 30, 1996 the Funds owed PaineWebber
$8,014 and $17,287 in investment advisory and administration fees for RMA
Connecticut and RMA New Jersey, respectively.
Under a separate contract, PaineWebber (not the Funds) pays Mitchell Hutchins
Asset Management, Inc. a monthly fee for sub-advisory and sub-administrative
services in an amount equal to 20% of the fee paid to PaineWebber under the
Advisory Contract.
In compliance with applicable state securities laws, PaineWebber will reimburse
the Funds if and to the extent that the aggregate operating expenses in any
fiscal year exclusive of taxes, interest, brokerage fees, distribution fees and
extraordinary expenses, exceed limitations imposed by various state regulations.
Currently, the most restrictive limitation applicable to the Funds is 2.5% of
the first $30 million of average daily net assets, 2.0% of the next $70 million
and 1.5% of any excess over $100 million. For the eight months ended June 30,
1996 and for the year ended October 31, 1995, no reimbursements were required
pursuant to the above limitations.
DISTRIBUTION PLAN
PaineWebber is the distributor of the Funds' shares and the exclusive dealer for
the sale of those shares. For its services, the Funds pay PaineWebber a
distribution fee, which is accrued daily and paid monthly, at an annual rate of
0.12% of the Funds' average daily net assets. At June 30, 1996, the Funds owed
PaineWebber $1,923 and $4,149 in distribution fees for RMA Connecticut and RMA
New Jersey, respectively.
OTHER LIABILITIES
At June 30, 1996, dividends payable was $32,841 for RMA New Jersey.
FEDERAL TAX STATUS
The Funds intend to distribute substantially all of their tax-exempt income and
any taxable income and to comply with the other requirements of the Internal
Revenue Code applicable to regulated investment companies. Accordingly, no
provision for federal income tax is required. In addition, by distributing
during each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, the Funds intend not to be
subject to a federal excise tax.
At June 30, 1996, RMA New Jersey had a net capital loss carryforward of $1,779.
This loss carryforward is available as a reduction, to the extent provided in
the regulations, of future net realized capital gains, and will expire by June
30, 2002. To the extent that such losses are used to offset future capital gains
it is probable that the gains so offset will not be distributed.
To reflect reclassifications arising from permanent 'book/tax' differences for
the eight months ended June 30, 1996, RMA Connecticut's undistributed net
investment income was increased by
33
<PAGE>
PAINEWEBBER MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$1,375; accumulated net realized gain/loss was increased by $6,728; and
beneficial interest was decreased by $8,103.
BENEFICIAL INTEREST
There is an unlimited amount of $0.001 par value of beneficial interest
authorized. Transactions in shares of beneficial interest, at $1.00 per share,
were as follows:
For the Years Ended
For the Eight October 31,
Months Ended ----------------------------
RMA CONNECTICUT June 30, 1996 1995 1994
- ------------------------- ------------- ------------ ------------
Shares sold.............. 79,979,456 77,747,232 83,745,065
Shares repurchased....... (83,573,213) (81,908,171) (86,418,169)
Dividends reinvested..... 372,501 597,050 502,403
------------- ------------ ------------
Net decrease............. (3,221,256) (3,563,889) (2,170,701)
------------- ------------ ------------
------------- ------------ ------------
RMA NEW JERSEY
- -------------------------
Shares sold.............. 151,094,467 191,790,113 186,667,852
Shares repurchased....... (145,760,542) (188,445,267) (191,842,500)
Dividends reinvested..... 695,692 860,332 701,364
------------- ------------ ------------
Net increase (decrease).. 6,029,617 4,205,178 (4,473,284)
------------- ------------ ------------
------------- ------------ ------------
CAPITAL CONTRIBUTION
On January 27, 1995, the Funds recorded a capital contribution from Kidder
Peabody Asset Management, Inc., the Funds' predecessor investment adviser and
administrator, in the amount of $8,906 or $0.0004 per share and $21,521 or
$0.0006 per share for RMA Connecticut and RMA New Jersey, respectively, to
compensate the Funds for realized losses incurred on the sale of certain
securities to unrelated third parties.
34
<PAGE>
PAINEWEBBER RMA CONNECTICUT MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
FOR THE
EIGHT MONTHS FOR THE YEARS ENDED FOR THE PERIOD
ENDED OCTOBER 31, NOVEMBER 6, 1990+
JUNE 30, ---------------------------------------- TO
1996 1995(2) 1994 1993 1992 OCTOBER 31, 1991
------------ ------- ------- ------- ------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------- ------- ------- ------- ----------
Net investment income.... 0.016 0.026 0.017 0.015 0.022 0.040
Dividends from net
investment income...... (0.016) (0.026) (0.017) (0.015) (0.022) (0.040)
------------ ------- ------- ------- ------- ----------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------- ------- ------- ------- ----------
------------ ------- ------- ------- ------- ----------
Total investment return
(1).................... 1.64% 2.62% 1.74% 1.49% 2.25% 4.04%
------------ ------- ------- ------- ------- ----------
------------ ------- ------- ------- ------- ----------
Ratios and Supplemental
Data:
Net assets, end of
period (000's)....... $ 18,988 $22,209 $25,763 $27,937 $28,063 $ 40,078
Expenses to average net
assets**............. 1.11%* 1.01% 0.90% 0.97% 0.86% 0.36%*
Net investment income
to average net
assets**............. 2.47%* 2.63% 1.71% 1.47% 2.28% 3.96%*
</TABLE>
- ---------------
* Annualized
+ Commencement of operations
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends at net
asset value on the payable dates and a sale at net asset value on the last
day of each period reported. Total investment returns for periods of less
than one year have not been annualized.
** For the period November 6, 1990 to October 31, 1991, the predecessor adviser
waived and/or reimbursed the Fund for a portion of its operating expenses.
If such fee waivers and/or expense reimbursements had not been made, the
annualized ratio of expenses to average net assets and the annualized ratio
of net investment income to average net assets would have been 0.82% and
3.50%, respectively.
(2) Investment advisory functions for the Fund were transferred from Kidder,
Peabody Asset Management, Inc. to PaineWebber on January 30, 1995.
35
<PAGE>
PAINEWEBBER RMA NEW JERSEY MUNICIPAL MONEY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
FOR THE
EIGHT MONTHS FOR THE YEARS ENDED FOR THE PERIOD
ENDED OCTOBER 31, FEBRUARY 1, 1991+
JUNE 30, ---------------------------------------- TO
1996 1995(2) 1994 1993 1992 OCTOBER 31, 1991
------------ ------- ------- ------- ------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------- ------- ------- ------- ----------
Net investment income.... 0.017 0.027 0.018 0.016 0.025 0.032
Dividends from net
investment income...... (0.017) (0.027) (0.018) (0.016) (0.025) (0.032)
------------ ------- ------- ------- ------- ----------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------- ------- ------- ------- ----------
------------ ------- ------- ------- ------- ----------
Total investment
return (1)............. 1.71% 2.75% 1.76% 1.65% 2.49% 3.19%
------------ ------- ------- ------- ------- ----------
------------ ------- ------- ------- ------- ----------
Ratios and Supplemental
Data:
Net assets, end of
period (000's)....... $ 42,233 $36,206 $31,981 $36,473 $27,625 $ 41,504
Expenses to average net
assets**............. 0.95%* 0.93% 0.85% 0.93% 0.86% 0.27%*
Net investment income
to average net
assets**............. 2.56%* 2.73% 1.74% 1.63% 2.51% 4.20%*
</TABLE>
- ---------------
* Annualized
+ Commencement of operations
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends at net
asset value on the payable dates and a sale at net asset value on the last
day of each period reported. Total investment returns for periods of less
than one year have not been annualized.
** For the period February 1, 1991 to October 31, 1991, the predecessor adviser
waived and/or reimbursed the Fund for a portion of its operating expenses.
If such fee waivers and/or expense reimbursements had not been made, the
annualized ratio of expenses to average net assets and the annualized ratio
of net investment income to average net assets would have been 0.83% and
3.64%, respectively.
(2) Investment advisory functions for the Fund were transferred from Kidder,
Peabody Asset Management, Inc. to PaineWebber on January 30, 1995.
36
<PAGE>
PAINEWEBBER MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders
PaineWebber Municipal Money Market Series
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of PaineWebber RMA Connecticut Municipal Money
Fund and the statement of net assets of PaineWebber RMA New Jersey Municipal
Money Fund (collectively, the PaineWebber Municipal Money Market Series) (the
'Funds') as of June 30, 1996, and the related statements of operations, the
statements of changes in net assets and the financial highlights for the eight
months ended June 30, 1996 and for the year ended October 31, 1995. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The statement
of changes in net assets for the year ended October 31, 1994 and the financial
highlights for each of the four years in the period ended October 31, 1994 were
audited by other auditors whose report dated December 11, 1995, expressed an
unqualified opinion on such statement and financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and 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 investments owned at June
30, 1996 by correspondence with the custodian and a broker. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above and audited by us present fairly, in all material respects, the financial
position of each of the respective Funds constituting the PaineWebber Municipal
Money Market Series at June 30, 1996, the results of their operations, the
changes in their net assets and the financial highlights for the eight months
ended June 30, 1996 and for the year ended October 31, 1995, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
August 12, 1996
37
<PAGE>
PAINEWEBBER MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
Tax Information
- --------------------------------------------------------------------------------
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of each Fund's fiscal year end (June 30,
1996) as to the federal tax status of distributions received by shareholders
during such fiscal period. Accordingly, we are advising you that all dividends
paid during the period by RMA Connecticut and RMA New Jersey were federally
exempt interest dividends. RMA Connecticut and RMA New Jersey had 6% and 14%,
respectively, of their dividends subject to the federal alternative minimum tax
for individual taxpayers during the period. Also, all dividends paid by RMA
Connecticut were exempt from Connecticut personal income tax and all dividends
paid by RMA New Jersey were exempt from New Jersey personal income tax.
Because each Fund's fiscal year is not the calendar year, another notification
will be sent in respect of calendar year 1996. The second notification, which
will reflect any amounts to be used by calendar year taxpayers on their federal
income tax returns, will be made in conjunction with Form 1099 DIV and will be
mailed in January 1997. Shareholders are advised to consult their own tax
advisers with respect to the tax consequences of their investment in each
respective Fund.
38
<PAGE>
PAINEWEBBER MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
Shareholder Information
- --------------------------------------------------------------------------------
A Special Meeting of Shareholders was held on April 15, 1996, at which the
following proposals were approved for the Funds. Both funds of the Trust voted
separately on all matters being considered by the series, except for the
election of trustees, as to which the shares of both series of the Trust voted
together as a single class.
PROPOSAL 1
To elect ten members of its Board of Trustees:
Funds Voting Together
---------------------------------------------
Shares Voted For Shares Withhold Authority
---------------- -------------------------
Margo N. Alexander............ 33,968,626 3,548,606
Richard Q. Armstrong.......... 33,968,626 3,548,606
E. Garrett Bewkes, Jr......... 33,968,626 3,548,606
Richard Burt.................. 33,968,626 3,548,606
Mary C. Farrell............... 33,968,626 3,548,606
Meyer Feldberg................ 33,968,626 3,548,606
George W. Gowen............... 33,968,626 3,548,606
Frederic V. Malek............. 33,968,626 3,548,606
Carl W. Schafer............... 33,968,626 3,548,606
John R. Torell, III........... 33,968,626 3,548,606
PROPOSAL 2
To vote for or against the ratification of the selection of Ernst & Young LLP as
the independent auditors for the Fund's fiscal year ended June 30, 1996:
Shares Voted Shares Voted Shares
For Against Abstain
------------ ------------ ---------
RMA Connecticut..... 9,658,082 145,671 2,784,076
RMA New Jersey...... 24,175,177 0 754,226
39
<PAGE>
PAINEWEBBER MUNICIPAL MONEY MARKET SERIES
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- --------------------------------------------------------------------------------
PROPOSAL 3
To vote for or against the following changes to each Fund's fundamental
investment restrictions and policies:
Shares Voted Shares Voted Shares
For Against Abstain
------------ ------------ ---------
Modification of fundamental restriction on concentration:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
Modification of fundamental restriction on senior securities and borrowing:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
Modification of fundamental restriction on making loans:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
Modification of fundamental restriction on underwriting securities:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
Modification of fundamental restriction on real estate investments:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
Modification of fundamental restriction on investing in commodities:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
40
<PAGE>
PAINEWEBBER MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Voted Shares Voted Shares
For Against Abstain
------------ ------------ ---------
Elimination of fundamental restriction on pledging portfolio securities:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
Elimination of fundamental restriction on margin transactions:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
Elimination of fundamental restriction on short sales:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
Elimination of fundamental restriction on investments in oil, gas and mineral
leases and programs:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
Elimination of fundamental restriction on investments in other investment
companies:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
Elimination of fundamental restriction on investing for the purpose of control:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
Elimination of fundamental restriction on investments in illiquid securities:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
41
<PAGE>
PAINEWEBBER MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares Voted Shares Voted Shares
For Against Abstain
------------ ------------ ---------
Elimination of fundamental restriction relating to purchases of certain types of
securities:
RMA Connecticut... 9,394,572 185,943 3,007,314
RMA New Jersey.... 23,924,076 185,484 819,843
PROPOSAL 4
To vote for or against the approval of Certain Amendments to, and a Restatement
of, its Declaration of Trust:
33,331,371 369,008 3,816,853
(Broker non-votes and abstentions are included within the 'Shares Withhold
Authority' and 'Shares Abstain' totals.)
42
<PAGE>
TRUSTEES
E. Garrett Bewkes, Jr. Chairman
Margo N. Alexander
Richard Q. Armstrong
Richard Burt
Mary C. Farrell
Meyer Feldberg
George W. Gowen
Frederic V. Malek
Carl W. Schafer
John R. Torell, III
PRINCIPAL OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Julian F. Sluyters
Vice President and Treasurer
ADMINISTRATOR AND DISTRIBUTOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
INVESTMENT ADVISERS
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
This report is not to be used in connection with the offering of shares of the
Funds unless accompanied or preceded by an effective prospectus.
PaineWebber
(C) PaineWebber Incorporated
Member SIPC
- --------------------------------------------------------------------------------
PaineWebber
RMA MUNICIPAL MONEY FUNDS
RMA CALIFORNIA MUNICIPAL MONEY FUND
RMA NEW YORK MUNICIPAL MONEY FUND
RMA CONNECTICUT MUNICIPAL MONEY FUND
RMA NEW JERSEY MUNICIPAL MONEY FUND
JUNE 30, 1996
ANNUAL REPORT