PAINEWEBBER/
KIDDER, PEABODY
MUNICIPAL MONEY
MARKET SERIES--
NEW YORK SERIES
ANNUAL REPORT
OCTOBER 31, 1995
<PAGE>
<TABLE><CAPTION>
PaineWebber/Kidder Peabody Municipal Money Market Series - New York Series
- ------------------------------------------------------------------------------------------------------------------------
Statement of Net Assets
October 31, 1995
- ------------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ------------- -------------- ------------- -----------
<S> <C> <C> <C>
Municipal Bonds & Notes - 85.64%
$ 500 New York State Dormitory Authority
(Masonic Hall Asylum)................................. A 3.650% $ 500,000
1,300 New York State Dormitory Authority
(Metropolitan Museum of Art)........ A 3.600 1,300,000
1,000 New York State Energy Research & Development Authority
(Central Hudson Gas & Electric)....................... A 3.800 1,000,000
3,500 New York State Energy Research & Development Authority
(LILCO Project) Adjustable Rate Bond.................. 03/01/96 4.700 3,500,000
1,800 New York State Local Government Assistance Corp. ......... A 3.800 1,800,000
1,000 New York State Power Revenue Bonds
Adjustable Rate Bonds................................. 03/01/96 3.850 1,000,000
300 Bedford Central School District Tax Anticipation Notes.... 11/16/95 3.750 300,030
500 BOCES of Nassau County Revenue Anticipation Notes......... 06/27/96 4.250 501,352
400 Half Hollows Central School District
Tax Anticipation Notes................................ 06/28/96 4.500 401,895
1,800 Metropolitan Transportation Authority Commuter Facility... A 3.850 1,800,000
1,500 Monroe County Bond Anticipation Notes..................... 06/07/96 4.500 1,505,171
300 Monroe County Industrial Development Authority............
(Rochester Heating Cooperative)....................... A 4.000 300,000
1,000 Nassau County Bond Anticipation Notes..................... 03/15/96 to 08/15/96 4.250 to 4.375 1,003,074
500 Nassau County Tax Anticipation Notes...................... 04/15/96 4.500 501,331
600 New York City............................................. A 4.000 600,000
2,100 New York City Housing Development Corp.
(Columbia Gardens Project)............................ A 3.800 2,100,000
1,000 New York City Housing Development Corp.
(JFK Field House Associates Project).................. A 3.800 1,000,000
1,700 New York City Housing Development Corp.
(Related East 96th Street Project).................... A 3.600 1,700,000
600 New York City Housing Development Corp.
(Residential Revenue Bonds)........................... A 3.900 600,000
1,500 New York City Industrial Development Agency
(LaGuardia Associates Project)........................ A 3.800 1,500,000
1,500 New York City Industrial Development Agency
(Stroheim & Romann Inc. Project)...................... A 3.750 1,500,000
500 New York City Tax Anticipation Notes...................... 02/15/96 4.500 501,200
1,500 New York City Trust for Cultural Resources
(Carnegie Hall)....................................... A 3.700 1,500,000
1,900 North Hempstead Solid Waste............................... A 3.700 1,900,000
700 Patchogue - Medford Tax Anticipation Notes................ 06/27/96 4.500 702,196
300 Pelham Union Free School District Revenue Anticipation
Notes................................................... 11/06/95 4.000 300,020
500 Schenectady Bond Anticipation Notes....................... 06/27/96 4.250 501,562
300 Smithtown Central School District
Tax Anticipation Notes................................ 06/27/96 4.250 301,038
</TABLE>
1
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<TABLE><CAPTION>
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PaineWebber/Kidder Peabody Municipal Money Market Series - New York Series
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ------------- -------------- ------------ --------------
<S> <C> <C> <C>
Municipal Bonds & Notes - (concluded)
$ 1,200 St. Lawrence County Industrial Developmement Agency
(Reynolds Metal).......................................... A 4.000% $1,200,000
1,000 Syracuse Industrial Development Authority..................... A 3.900 1,000,000
500 Triborough Bridge & Tunnel Authority.*........................ 01/01/96 8.375 513,639
1,000 Westchester County Tax Anticipation Notes..................... 12/14/95 5.000 1,000,570
1,000 Yonkers Industrial Development Agency
Civic Facility Revenue.................................... A 3.700 1,000,000
Total Municipal Bonds & Notes (cost-$34,833,078)...................... 34,833,078
--------------
Tax-Exempt Commercial Paper - 13.59%
727 New York State Dormitory Authority
(Pooled Loan Program)..................................... 11/10/95 3.750 727,000
800 New York State Dormitory Authority
(Sloan Kettering Memorial)................................ 11/28/95 3.650 800,000
2,000 New York State................................................ 11/07/95 to 11/09/95 3.450 to 3.625 2,000,000
2,000 New York City Municipal Finance Authority..................... 11/01/95 to 01/23/96 3.700 to 3.750 2,000,000
--------------
Total Tax-Exempt Commercial Paper (cost-$5,527,000)................... 5,527,000
--------------
Total Investments (cost-$40,360,078, which approximates
cost for federal income tax purposes) - 99.23%................ 40,360,078
Other assets in excess of liabilities - 0.77%......................... 312,405
--------------
Net Assets (applicable to 40,677,624 shares of beneficial interest
at $1.00 per share) - 100.00%................................. $40,672,483
==============
________________________
A - Variable rate demand notes are payable on demand. The interest rates shown are the current rates as of
October 31, 1995.
* Pre-Refunded Bond
Weighted average maturity - 53 days
See accompanying notes to financial statements
</TABLE>
2
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PaineWebber/Kidder Peabody Municipal Money Market Series - New York Series
- -------------------------------------------------------------------------------
Statement of Operations
For the Year Ended October 31, 1995
Investment income:
Interest............................................ $1,935,628
------------
Expenses:
Investment advisory and administration.............. 264,448
Distribution fees................................... 63,467
Custody and accounting.............................. 27,816
Reports and notices to shareholders................. 21,630
Transfer agency fees............................... 20,296
State registration.................................. 7,541
Legal and audit..................................... 7,306
Trustees' fees...................................... 3,700
Amortization of organizational expenses............. 3,286
Other expenses...................................... 9,910
------------
429,400
------------
Net investment income......................................... 1,506,228
------------
Net realized and unrealized losses from investment
transactions:
Net realized losses from investment transactions.... (4,701)
Net change in unrealized appreciation/depreciation
of investments................................. (198)
------------
Net realized and unrealized losses from investment
transactions................................................ (4,899)
------------
Net increase in net assets resulting from operations.......... $1,501,329
============
See accompanying notes to financial statements
3
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<TABLE><CAPTION>
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PaineWebber/Kidder Peabody Municipal Money Market Series - New York Series
Statement of Changes in Net Assets
- ------------------------------------------------------------------------------------------------------------
For the For the
Year Ended Year Ended
October 31, 1995 October 31, 1994
---------------- -----------------
<S> <C> <C>
From operations:
Net investment income......................................... $1,506,228 $1,282,758
Net realized losses from investment transactions.............. (4,701) (20,824)
Net change in unrealized appreciation/depreciation
of investments............................................. (198) (67)
---------------- -----------------
Net increase in net assets resulting from operations.......... 1,501,329 1,261,867
---------------- -----------------
Dividends to shareholders from:
Net investment income......................................... (1,506,228) (1,282,758)
---------------- -----------------
Net increase (decrease) in net assets from
benefical interest transactions............................... (22,263,004) 10,730,298
---------------- -----------------
Contribution to capital from predecessor adviser................. 44,335 --
---------------- -----------------
Net increase (decrease) in net assets............................ (22,223,568) 10,709,407
Net Assets:
Beginning of year............................................. 62,896,051 52,186,644
---------------- -----------------
End of year................................................... $40,672,483 $62,896,051
================ =================
</TABLE>
See accompanying notes to financial statements
4
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PaineWebber/Kidder, Peabody Municipal Money Market Series-New York Series
Notes to Financial Statements
- --------------------------------------------------------------------------------
Organization and Significant Accounting Policies
PaineWebber/Kidder, Peabody Municipal Money Market Series (the "Trust") was
organized as 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 ("1940 Act"), as an open-end, non-
diversified management investment company. The Trust currently offers three
no-load series of shares: the Connecticut Series, the New Jersey Series,
and the New York Series (the "Fund"). The financial statements for the
Connecticut Series and the New Jersey Series are not included herein.
Organizational costs have been deferred and are being amortized on the
straight-line method over a period not to exceed 60 months from the date
the Fund commenced operations.
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. Discounts are accreted and premiums
are amortized as adjustments to interest income and identified cost of
investments.
Federal Tax Status--The 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,
the Fund intends not to be subject to a federal excise tax.
At October 31, 1995, the Fund had a net capital loss carryforward of
$5,141. The loss carryfoward is available as a reduction, to the extent
provided in the regulations, of future net realized capital gains, and will
expire on October 31, 2002. To the extent such losses are used to offset
future capital gains, it its probable that the gains so offset will not be
distributed.
Dividends and Distributions to Shareholders--Dividends and distributions to
shareholders are recorded on the ex-dividend date. Dividends from net
investment income and distributions from net realized gains from investment
transactions 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. Net capital gains, if any, will be distributed at least
annually, but the Fund may make more frequent distributions of such gains,
if necessary, to maintain its net asset value per share at $1.00 or to
avoid income or excise taxes.
Concentration of Risk
The 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 the Fund.
5
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PaineWebber/Kidder, Peabody Municipal Money Market Series-New York Series
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- --------------------------------------------------------------------------------
Investment Adviser and Administrator
The Trust's investment adviser and administrator receives compensation from
the Fund for its services. Fees paid by the Fund for investment advisory
and administration services are accrued daily and paid monthly at the
annual rate of 0.50% of the Fund's average daily net assets.
At a special meeting of shareholders that took place on April 13, 1995,
shareholders approved the appointment of PaineWebber Incorporated
("PaineWebber") as investment adviser and administrator of the Fund and
Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins"), a wholly
owned subsidiary of PaineWebber, as the Fund's sub-adviser and sub-
administrator. The Fund pays the same fee for investment advisory and
administration services to PaineWebber as previously paid to Kidder Peabody
Asset Management, Inc. ("KPAM"), the Fund's predecessor adviser, as
described in the Fund's prospectus. PaineWebber (not the Fund) pays
Mitchell Hutchins a fee for sub-advisory and sub-administration services at
the annual rate of 20% of the fee received by PaineWebber from the Fund.
PaineWebber and Mitchell Hutchins continue to manage the Fund in accordance
with the Fund's investment objective, policies and restrictions as stated
in the prospectus. At October 31, 1995, the Fund owed PaineWebber $17,553
in investment advisory and administration fees.
Investment advisory functions for the Fund were previously transferred from
KPAM to Mitchell Hutchins on an interim basis as a result of an asset
purchase transaction by and among Kidder, Peabody Group Inc., its parent,
General Electric Company, and Paine Webber Group Inc. That period commenced
on January 30, 1995 and ended April 13, 1995.
In compliance with applicable state securities laws, PaineWebber, the
Fund's investment adviser, will reimburse the 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 is 2.5% on 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 year ended October 31, 1995, no
reimbursements were required pursuant to the above limitation.
Distribution Plan
Effective January 30, 1995, PaineWebber served as the exclusive distributor
of the Fund's shares. For its services, PaineWebber received from the Fund
a distribution fee accrued daily and paid monthly at the annual rate of
0.12% of the Fund's average daily net assets. At October 31, 1995, $4,213
was payable to PaineWebber for such services.
6
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PaineWebber/Kidder, Peabody Municipal Money Market Series-New York Series
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Other Liabilities
At October 31, 1995, the amount for dividends payable aggregated $43,045.
Shares of Beneficial Interest
There is an unlimited number of $0.001 par value shares of beneficial
interest authorized. Transactions in shares of beneficial interest, at
$1.00 per share, were as follows:
For the Years Ended
October 31,
-------------------------------
1995 1994
------------- -------------
Shares sold............................... 200,791,629 300,275,419
Shares repurchased........................ (224,476,859) (290,793,335)
Dividends reinvested...................... 1,422,226 1,248,214
------------- -------------
Net increase (decrease) in shares
outstanding............................. (22,263,004) 10,730,298
============= =============
Capital Contribution
On January 27, 1995, the Fund recorded a capital contribution from KPAM in
the amount of $44,335 or $0.0008 per share to compensate the Fund for
realized losses incurred on the sale of certain securities to unrelated
third parties.
Reorganization
The Board of Trustees of the Trust has approved a Plan of Reorganization
and Termination ("Reorganization") which was submitted to and approved by
the Fund's shareholders, at a special meeting held on November 8, 1995.
The Reorganization occurred on November 13, 1995, when all the Fund's
assets were acquired and its liabilities assumed by PaineWebber RMA New
York Municipal Money Fund ("RMA New York") in a tax-free reorganization. As
a result of the Reorganization, the two funds' assets were combined and
each Fund shareholder received shares of RMA New York having an aggregate
value equal to the value of the shareholder's holdings in the Fund.
7
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PaineWebber/Kidder Peabody Municipal Money Market Series - New York Series
- -----------------------------------------------------------------------------------------------------------------------------
Financial Highlights
- -----------------------------------------------------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each period is presented below:
For the Period
For the Years Ended October 31, February 1, 1991+
------------------------------- to
1995 1994 1993 1992 October 31, 1991
------------------------------------------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period...................... $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income..................................... 0.028 0.018 0.015 0.023 0.030
Net realized losses from investment
transactions............................................ (0.001) - - - -
------- ------- ------- ------- -------
Net increase in net asset value from
operations.............................................. 0.027 0.018 0.015 0.023 0.030
------ ----- ----- ----- -----
Dividends from net investment income...................... (0.028) (0.018) (0.015) (0.023) (0.030)
----- ----- ----- ----- -----
Contribution to capital from
predecessor adviser..................................... 0.001 - - - -
------- ------ ------ ------ ------
Net asset value, end of period............................ $1.00 $1.00 $1.00 $1.00 $1.00
======= ====== ====== ====== ======
Total investment return (1)............................... 2.86% 1.81% 1.52% 2.28% 3.06%
======= ====== ====== ====== ======
Ratios/Supplemental data:
Net assets, end of period (000's)....................... $40,672 $62,896 $52,187 $39,277 $38,725
Ratio of expenses to average net assets**............... 0.81% 0.78% 0.88% 0.84% 0.26%*
Ratio of net investment income to
average net assets **............................... 2.85% 1.79% 1.50% 2.24% 4.00%*
</TABLE>
________________
* Annualized
+ Commencement of operations
** 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 3.43%, respectively.
(1) Total return is calculated assuming a $1,000 investment in Fund shares
on the first day of each 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 return information for periods of less than one year have not been
annualized.
8
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PaineWebber/Kidder, Peabody Municipal Money Market Series-New York Series
- --------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders
PaineWebber/Kidder Peabody Municipal Money Market Series-New York Series
We have audited the accompanying statement of net assets of the
PaineWebber/Kidder, Peabody Municipal Money Market Series-New York Series
as of October 31, 1995, and the related statement of operations, statement
of changes in net assets, and financial highlights for the year then ended.
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 audit. The
statement of changes in net assets for the year ended October 31, 1994 and
the financial highlights for each of the periods in the period then ended
were audited by other auditors whose report dated November 30, 1994,
expressed an unqualified opinion on that statement and financial
highlights.
We have conducted our audit 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
securities owned at October 31, 1995, 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 audit
provides a reasonable basis for our opinion.
In our opinion, the 1995 financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of PaineWebber/Kidder, Peabody Municipal Money Market Fund Series-
New York Series at October 31, 1995, the results of its operations, the
changes in its net assets, and the financial highlights for the year then
ended in conformity with generally accepted accounting principles.
New York, New York
December 11, 1995
9
<PAGE>
PaineWebber/Kidder, Peabody Municipal Money Market Series-New York Series
- --------------------------------------------------------------------------------
Tax Information
- --------------------------------------------------------------------------------
We are required by Subchapter M of the Internal Revenue Code of 1986 to
advise you within 60 days of the Fund's fiscal year end (October 31, 1995)
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 the New York Series were federally
exempt interest dividends. The Fund had 2% of their dividends subject to
the federal alternative minimum tax for individual taxpayers during its
fiscal year. Also, all dividends paid by the New York Series were exempt
from New York State and New York City personal income tax.
Because the Fund's fiscal year end is not the calendar year, another
notification will be sent in respect of calendar year 1995. 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 1996. Shareholders are
advised to consult their own tax advisers with respect to the tax
consequences of their investment in the Fund.
10
<PAGE>
PaineWebber/Kidder, Peabody Municipal Money Market Series-New York Series
- --------------------------------------------------------------------------------
Shareholder Information
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A special meeting shareholders of PaineWebber/Kidder, Peabody Municipal Money
Market Series ("Fund") was held on April 13, 1995. At the meeting David J.
Beaubien, William W. Hewitt, Jr., Thomas R. Jordan, Frank P.L. Minard and
Carl W. Schafer were elected as directors to serve without limit in time,
subject to resignation, retirement or removal. The selection of Deloitte
& Touche LLP as the Fund's independent accountants was ratified.
The votes were as follows:
All Series Voting as a Single Series
-------------------------------------------------
Shares Voted For Shares Withhold Authority
---------------- -------------------------
David J. Beaubien 65,392,812 4,541,460
William W. Hewitt, Jr. 65,392,812 4,541,460
Thomas R. Jordan 65,392,812 4,541,460
Frank P.L. Minard 65,392,812 4,541,460
Carl W. Schafer 65,392,812 4,541,460
All Series Voting as a Single Series
---------------------------------------------
Shares Shares Shares
Voted For Voted Against Withold Authority
---------- ------------- -----------------
Ratification of the selection
of Deloitte & Touche LLP 64,348,845 3,459,852 2,125,575
In addition the following agreements were approved for the New York Series:
1) An interim investment advisory agreement between the Series and Mitchell
Hutchins Asset Management Inc. ("Mitchell Hutchins") containing substantially
the same terms, conditions and fees as the previous investment advisory
agreement with Kidder Peabody Asset Management, Inc. ("KPAM")
Shares Shares Shares
Voted For Voted Against Withhold Authority
--------- ------------- ------------------
New York Series 33,977,145 96,317 296,782
<PAGE>
PaineWebber/Kidder, Peabody Municipal Money Market Series-New York Series
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- --------------------------------------------------------------------------------
2) A new investment advisory and administration agreement between the Fund
and PaineWebber Incorporated ("PaineWebber") containing the same fees and
substantively similar material terms and conditions as the previous investment
advisory agreement with KPAM to commence on the termination of the interim
agreement; and
Shares Shares Shares
Voted For Voted Against Withhold Authority
--------- ------------- ------------------
New York Series 33,054,060 102,698 1,213,486
3) A new sub-advisory and sub-administration agreement between PaineWebber
and Mitchell Hutchins to commence on the termination of the interim agreement.
Shares Shares Shares
Voted For Voted Against Withhold Authority
--------- ------------- ------------------
New York Series 33,967,342 102,698 300,203
Broker non-votes and abstentions are included within the "Shares Withhold
Authority" totals.
<PAGE>
-------------------------------------
TRUSTEES
Margo N. Alexander
David J. Beaubicn
William W. Hewitt, Jr.
Thomas R. Jordan
Carl W. Schafer
-------------------------------------
OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Julian F. Sluyrers
Vice President and Treasurer
Gregory W. Serbe
Vice President
-------------------------------------
INVESTMENT ADVISER,
ADMINISTRATOR AND
DISTRIBUTOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
-------------------------------------
SUB-ADVISER AND
SUB-ADMINISTRATOR
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.
copyright 1995 PaineWebber Incorporated
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