CMA NORTH CAROLINA
MUNICIPAL MONEY FUND
Annual Report
March 31, 1998
MERRILL LYNCH BULL LOGO
Officers and Trustees
Arthur Zeikel--President and Trustee
Ronald W. Forbes--Trustee
Cynthia A. Montgomery--Trustee
Charles C. Reilly--Trustee
Kevin A. Ryan--Trustee
Richard R. West--Trustee
Terry K. Glenn--Executive Vice President
Vincent R. Giordano--Senior Vice President
Edward J. Andrews--Vice President
Donald C. Burke--Vice President
Peter J. Hayes--Vice President
Kenneth A. Jacob--Vice President
Steven T. Lewis--Vice President
Darrin J. SanFillippo--Vice President
Kevin A. Schiatta--Vice President
Helen Marie Sheehan--Vice President
Gerald M. Richard--Treasurer
Robert Harris--Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210*
[FN]
*For inquiries regarding your CMA account,
call (800) CMA-INFO [(800) 262-4636].
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance, which will fluctuate. The Fund
seeks to maintain a consistent $1.00 net asset value per share,
although this cannot be assured. An investment in the Fund is
neither insured nor guaranteed by the US Government. Statements and
other information herein are as dated and are subject to change.
CMA North Carolina
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011
Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the year ended March 31, 1998, CMA North Carolina Municipal
Money Fund paid shareholders a net annualized yield of 3.02%.* As of
March 31, 1998, the Fund's 7-day yield was 2.88%.
Economic Environment and
Investment Strategy
During November, the state of North Carolina issued $250 million in
general obligation highway bonds rated AAA by Fitch Investment
Services. The offering was the first installment of the $950 million
approved by voters last December. The minor debt burden, as well as
excellent debt structure, are major factors in the strong standing
of North Carolina's general obligation debt. The state's financial
operations are conservative, and its economy continues to expand and
diversify. At the end of the state's fiscal year 1997, the general
fund had a balance of $1.3 billion, including $318 million
unreserved and $500 million in the budget stabilization fund. The
state's $24 billion 1997--1999 biannual budget was passed nearly two
months late as considerable time was spent debating new program
initiatives and the use of surplus revenues generated during fiscal
1997. However, fiscal 1998 revenues are running ahead of estimates.
With continued moderate growth, state officials expect an unreserved
balance of $326 million by June 30, 1999, in addition to $522
million in reserve funds. With respect to employment, sectors such
as finance, insurance and real estate continue to expand, while
manufacturing has been showing declines since 1996. For example, the
state's residential building permits, which reflect future
construction activity, totaled 7,197 in October, an increase of 27%
from a year ago. Personal income also continues to show good growth,
and on a per capita basis, the state figure is now equal to 91% of
the national figure and slightly ahead of that of the Southeast
region. Moreover, although North Carolina has a large export sector,
the state does not have a large exposure in relation to the economic
problems in Asian markets. In fact, only 7.5% of North Carolina's
exports go to Pacific Rim countries compared to 15% of all US
exports. Finally, the state's unemployment rate of 4.0% was once
again below that of the 4.6% national average for the month of
February.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
During the fiscal year ended March 31, 1998, we maintained a
relatively neutral average portfolio maturity. We significantly
extended the Fund's average maturity only when the short-term tax-
exempt yield curve steepened. This steepening occurred at tax time
in April 1997 when cash outflows drove up yields on short-term tax
exempt securities and, more prominently, in late summer 1997 when
states issued their annual cash flow notes. However, for most of the
fiscal year, a decrease in total fixed-rate issuance resulting from
healthy state economies and continued cash inflows kept the short-
term tax-exempt yield curve relatively flat. For example, yields on
90-day tax-exempt commercial paper performed on average with those
on short-term tax-exempt notes maturing in six months--one year for
most of the period. Thus, for a majority of that time, we used tax-
exempt commercial paper when we wanted to pursue a more aggressive
strategy. Furthermore, during the year ended March 31, 1998, assets
of tax-exempt money market funds rose by $25.6 billion, an increase
of over 17%.
The Fund, which began the year in the 40-day range, concluded the
period in the 30-day range. Our strategy allowed the Fund to perform
on average relative to similar North Carolina tax-exempt money
market funds for the year ended March 31, 1998. Finally, we continue
to focus on diversification and credit quality when choosing Fund
investments, and we constantly monitor the ever-changing marketplace
and adapt our investment strategy when necessary.
In Conclusion
We thank you for your support of CMA North Carolina Municipal Money
Fund, and we look forward to serving your investment needs in the
future.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Darrin J. SanFillippo)
Darrin J. SanFillippo
Vice President and Portfolio Manager
May 4, 1998
IMPORTANT TAX INFORMATION (UNAUDITED)
All of the net investment income distributions paid daily by CMA
North Carolina Municipal Money Fund of CMA Multi-State Municipal
Series Trust during its taxable year ended March 31, 1998 qualify as
tax-exempt interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributed by the Fund
during its taxable year ended March 31, 1998.
Please retain this information for your records.
Portfolio Abbreviations for CMA North Carolina Municipal Money Fund
ACES SM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
COP Certificates of Participation
CP Commercial Paper
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
MSTR Municipal Securities Trust Receipts
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1998 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
North Carolina-- $ 1,000 Beaufort County, North Carolina, Industrial Facilities and Pollution Control
87.4% Financing Authority Revenue Bonds (Texasgulf, Inc. Project), VRDN, 3.75%
due 12/01/2000 (a) $ 1,000
5,400 Beaufort County, North Carolina, Water District IV, BAN, 3.795% due 8/26/1998 5,400
2,600 Brunswick County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Woods Industries Inc. Project), VRDN,
AMT, 3.90% due 7/01/2017 (a) 2,600
Buncombe County, North Carolina, VRDN (a):
410 3.65% due 6/01/2000 410
455 3.65% due 6/01/2002 455
500 3.65% due 6/01/2004 500
525 3.65% due 6/01/2005 525
580 3.65% due 6/01/2007 580
435 3.65% due 6/01/2008 435
640 3.65% due 6/01/2009 640
740 3.65% due 6/01/2012 740
815 3.65% due 6/01/2014 815
900 3.65% due 6/01/2016 900
6,600 Cabarrus County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (S&D Coffee Inc. Project),
VRDN, AMT, 3.70% due 9/01/2011 (a) 6,600
3,000 Carteret County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, PCR (Texasgulf, Inc. Project), VRDN, 3.775% due
10/01/2005 (a) 3,000
800 Catawba County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Lukens Steel Co. Project), VRDN, AMT,
3.85% due 12/01/2009 (a) 800
5,000 Charlotte-Mecklenberg Hospital Authority, North Carolina, Health Care System
Revenue Bonds, VRDN, Series D, 3.65% due 1/15/2026 (a) 5,000
18,895 Charlotte, North Carolina, Airport Revenue Refunding Bonds, VRDN, Series A,
AMT, 3.75% due 7/01/2017 (a)(b) 18,895
2,180 Craven County, North Carolina, BAN, UT, 3.85% due 5/20/1998 2,180
Craven County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Resource Bonds (Cravenwood Energy Project), VRDN,
AMT (a):
6,250 Series B, 3.75% due 5/01/2011 6,250
3,600 Series C, 3.75% due 5/01/2011 3,600
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1998 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
North Carolina Cumberland County, North Carolina, Industrial Facilities and Pollution
(continued) Control Financing Authority, Revenue Refunding Bonds (Monsanto Co.
Project), VRDN (a):
$ 1,715 3.65% due 6/01/2012 $ 1,715
600 3.65% due 10/01/2014 600
2,650 Edgecombe Water and Sewer District No. 1, North Carolina, BAN, UT,
3.54% due 7/29/1998 2,650
Gaston County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, VRDN (a):
1,960 (Gold Medal Homes), 3.85% due 12/01/2009 1,960
2,200 (Mount Holly Enterprises/Queens G.P. Inc.), AMT, 3.80% due 5/01/2004 2,200
Granville County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, VRDN, AMT (a):
4,000 (Mayville Metal Production Project), 3.55% due 5/23/2020 4,000
1,525 (Tuscarora Plastics, Inc. Project), 3.80% due 12/01/2001 1,525
500 Greene County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDA, Revenue Bonds (Federal Paper Board Company,
Inc. Project), VRDN, AMT, 3.70% due 11/01/2009 (a) 500
Guilford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, VRDN, AMT (a):
900 (Pharmagraphics Inc. Project), 3.85% due 9/01/2010 900
7,500 (US Woven Label Project), 3.70% due 1/01/2013 7,500
21,215 Halifax County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Exempt Facilities-Westmoreland Project),
VRDN, AMT, 3.75% due 12/01/2019 (a) 21,215
3,417 Holly Springs, North Carolina, BAN, UT, 3.79% due 6/24/1998 3,417
1,380 Johnston County, North Carolina, COP (Judicial Annex and Healthcare Project),
4.15% due 9/01/1998 (b) 1,382
385 Johnston County, North Carolina, UT, Series 1996, 5% due 2/01/1999 (d) 389
3,700 Lenoir County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (West Co. Nebraska, Inc. Project), VRDN,
3.80% due 10/01/2005 (a) 3,700
8,200 Lincoln County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Hof Textiles Inc. Project), VRDN, AMT,
3.70% due 10/01/2011 (a) 8,200
8,500 Mecklenberg County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Rexroth Corporation Project), VRDN, AMT, 3.70%
due 9/01/2016 (a) 8,500
Mecklenberg County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, VRDN (a):
2,000 (Edgecomb Metals Company Project), 3.65% due 12/01/2009 2,000
900 (Flawa Corporation Project), AMT, 3.55% due 12/01/2008 900
1,500 (Griffith Micro Science Project), AMT, 3.75% due 11/01/2007 1,500
7,500 Mecklenburg County, North Carolina, VRDN, Series C, 3.65% due 2/01/2017 (a) 7,500
805 New Hanover County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Interroll Corp. Project), VRDN, 3.80%
due 11/01/2003 (a) 805
North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds:
4,900 CP, Series B, 3.45% due 5/20/1998 4,900
1,250 Refunding, Series A, 7.25% due 1/01/1999 (c) 1,307
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1998 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
North Carolina North Carolina Educational Facilities Finance Agency Revenue Bonds
(continued) (Duke University Project), VRDN (a):
$ 1,500 Series A, 3.60% due 6/01/2027 $ 1,500
5,000 Series B, 3.60% due 12/01/2021 5,000
2,000 North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds
(Cabarrus Memorial Hospital Project), VRDN, 3.60% due 3/01/2012 (a) 2,000
North Carolina Medical Care Commission, Hospital Revenue Bonds, VRDN (a):
3,300 (Duke University Hospital), Series B, 3.60% due 6/01/2015 3,300
3,500 (Duke University Hospital), Series C, 3.60% due 6/01/2015 3,500
2,130 (Duke University Hospital), Series D, 3.60% due 6/01/2015 2,130
3,500 (Pooled Financing Project), ACES, 3.70% due 4/01/2012 3,500
1,800 (Pooled Financing Project), ACES, Series A, 3.70% due 10/01/2020 1,800
200 Refunding (Moses H. Cone Memorial Hospital Project), 3.70% due
10/01/2023 200
North Carolina Municipal Power Agency, Electric Revenue Bonds (No. 1
Catawba):
25,000 CP, 3.65% due 5/15/1998 25,000
20,117 CP, 3.60% due 5/21/1998 20,117
14,500 CP, 3.40% due 7/17/1998 14,500
2,885 Refunding, 5.10% due 1/01/1999 (e) 2,917
1,800 North Carolina State Port Authority, Docks and Wharves Facility Revenue Bonds
(Morehead City Terminals), VRDN, AMT, 3.80% due 1/01/2016 (a) 1,800
1,305 Piedmont Triad Airport Authority, North Carolina, Special Facility Revenue
Bonds (Purpose-Cessna Aircraft Company Project), VRDN, AMT, 3.80% due
10/01/2012 (a) 1,305
Raleigh-Durham, North Carolina, Airport Authority, Special Facility Revenue
Refunding Bonds (American Airlines), VRDN (a):
2,300 Series A, 3.70% due 11/01/2005 2,300
300 Series A, 3.80% due 11/01/2015 300
4,000 Series B, 3.70% due 11/01/2015 4,000
400 Raleigh-Durham, North Carolina, Refunding, UT, 4.25% due 4/01/1998 400
6,000 Richland Township, North Carolina, Water and Sewer District, BAN, UT,
3.75% due 11/18/1998 6,006
700 Rowan County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Reynolds Metals Company Project),
3.75% due 6/01/1998 700
2,900 Rutherford County, North Carolina, Industrial Facilities and Pollution Control
Financial Authority Revenue Bonds (All American Homes of North Carolina
Inc.), VRDN, AMT, 3.85% due 11/01/2011 (a) 2,900
3,330 Sampson County, North Carolina, Water and Sewer District, BAN, UT,
3.545% due 9/09/1998 3,331
400 Union County, North Carolina, UT, Series B, 5.25% due 5/01/1998 (b) 401
4,900 University of North Carolina, Chapel Hill School of Medicine and Ambulatory
Care, Clinic Revenue Bonds, VRDN, 3.75% due 7/01/2012 (a) 4,900
1,629 Warren County, North Carolina, Water and Sewer District, BAN, 3.785% due
5/06/1998 1,629
2,000 Wayne County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Revenue Refunding Bonds (General Signal), VRDN,
3.85% due 12/01/2000 (a) 2,000
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1998 (CONCLUDED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
North Carolina $ 400 Wilson County, North Carolina, Industrial Facilities and Pollution Control
(concluded) Financing Authority, IDR (North Carolina Chip Co. Project), VRDN, 3.80%
due 1/01/2000 (a) $ 400
Puerto Rico-- Puerto Rico Commonwealth, Government Development Bank:
12.2% 23,000 CP, 3.10% due 4/08/1998 23,000
500 Revenue Refunding Bonds, VRDN, 3.375% due 12/01/2015 (a)(b) 500
2,800 Puerto Rico Commonwealth, Highway and Transportation Authority, Highway
Revenue Bonds, VRDN, Series X, 3.375% due 7/01/1999 (a) 2,800
Puerto Rico Electric Power Authority Revenue Bonds:
6,000 MSTR, VRDN, Series SGA-43, 3.60% due 7/01/2022 (a)(b) 6,000
5,000 Series M, 6.90% due 7/01/1998 5,041
Total Investments (Cost--$305,767*)--99.6% 305,767
Other Assets Less Liabilities--0.4% 1,302
--------
Net Assets--100.0% $307,069
========
<FN>
(a)The interest rate is subject to change periodically based on
certain indexes. The interest rate shown is the rate in effect at
March 31, 1998.
(b)MBIA Insured.
(c)Prerefunded.
(d)AMBAC Insured.
(e)FGIC Insured.
*Cost for Federal income tax purposes.
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1998
<S> <C> <C>
Assets:
Investments, at value (identified cost--$305,766,586) (Note 1a) $ 305,766,586
Cash 66,196
Interest receivable 1,502,071
Prepaid registration fees and other assets (Note 1d) 14,802
--------------
Total assets 307,349,655
--------------
Liabilities:
Payables:
Investment adviser (Note 2) $ 132,622
Distributor (Note 2) 88,673 221,295
--------------
Accrued expenses and other liabilities 58,906
--------------
Total liabilities 280,201
--------------
Net Assets $ 307,069,454
==============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of shares
authorized $ 30,710,871
Paid-in capital in excess of par 276,397,838
Accumulated realized capital losses--net (Note 4) (39,255)
--------------
Net Assets--Equivalent to $1.00 per share based on 307,108,709 shares of
beneficial interest outstanding $ 307,069,454
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA North Carolina Municipal Money Fund
Statement of Operations for the Year Ended March 31, 1998
<CAPTION>
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 10,154,212
Expenses:
Investment advisory fees (Note 2) $ 1,381,698
Distribution fees (Note 2) 340,553
Professional fees 53,122
Accounting services (Note 2) 52,391
Transfer agent fees (Note 2) 50,229
Registration fees (Note 1d) 34,308
Custodian fees 24,644
Pricing fees 7,679
Trustees' fees and expenses 2,114
Printing and shareholder reports 638
Other 2,923
--------------
Total expenses 1,950,299
--------------
Investment income--net 8,203,913
Realized Gain on Investments--Net (Note 1c) 556
--------------
Net Increase in Net Assets Resulting from Operations $ 8,204,469
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended
March 31,
Increase (Decrease) in Net Assets: 1998 1997
<S> <C> <C>
Operations:
Investment income--net $ 8,203,913 $ 7,440,667
Realized gain (loss) on investments--net 556 (3,442)
-------------- --------------
Net increase in net assets resulting from operations 8,204,469 7,437,225
-------------- --------------
Dividends to Shareholders (Note 1e):
Investment income--net (8,203,913) (7,440,667)
-------------- --------------
Net decrease in net assets resulting from dividends to shareholders (8,203,913) (7,440,667)
-------------- --------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 908,145,767 757,440,492
Net asset value of shares issued to shareholders in reinvestment
of dividends (Note 1e) 8,204,020 7,440,785
-------------- --------------
916,349,787 764,881,277
Cost of shares redeemed (883,460,955) (764,608,188)
-------------- --------------
Net increase in net assets derived from beneficial interest transactions 32,888,832 273,089
-------------- --------------
Net Assets:
Total increase in net assets 32,889,388 269,647
Beginning of year 274,180,066 273,910,419
-------------- --------------
End of year $ 307,069,454 $ 274,180,066
============== ==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended March 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Investment income--net .03 .03 .03 .03 .02
-------- -------- -------- -------- --------
Total from investment operations .03 .03 .03 .03 .02
-------- -------- -------- -------- --------
Less dividends from investment income--net (.03) (.03) (.03) (.03) (.02)
-------- -------- -------- -------- --------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Investment Return 3.02% 2.84% 3.12% 2.61% 1.85%
======== ======== ======== ======== ========
Ratios to Average Net Assets:
Expenses, net of reimbursement .71% .72% .69% .62% .61%
======== ======== ======== ======== ========
Expenses .71% .72% .74% .72% .71%
======== ======== ======== ======== ========
Investment income--net 2.97% 2.79% 3.08% 2.58% 1.84%
======== ======== ======== ======== ========
Supplemental Data:
Net assets, end of year (in thousands) $307,069 $274,180 $273,910 $278,704 $293,452
======== ======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA North Carolina Municipal Money Fund (the "Fund") is part of CMA
Multi-State Municipal Series Trust (the "Trust"). The Fund is
registered under the Investment Company Act of 1940 as a non-
diversified, open-end management investment company. The following
is a summary of significant accounting policies followed by the
Fund.
(a) Valuation of investments--Investments are valued at amortized
cost, which approximates market value. For the purpose of valuation,
the maturity of a variable rate demand instrument is deemed to be
the next coupon date on which the interest rate is to be adjusted.
In the case of a floating rate instrument, the remaining maturity is
the demand notice payment period.
(b) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(c) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
premium and discount) is recognized on the accrual basis. Realized
gains and losses on security transactions are determined on the
identified cost basis.
(d) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(e) Dividends and distributions to shareholders--The Fund declares
dividends daily and reinvests daily such dividends (net of non-
resident alien tax and back-up withholding tax withheld) in
additional fund shares at net asset value. Dividends are declared
from the total of net investment income, excluding discounts earned
other than original issue discounts. Net realized capital gains, if
any, are normally distributed annually after deducting prior years'
loss carryforward. The Fund may distribute capital gains more
frequently than annually in order to maintain the Fund's net asset
value at $1.00 per share.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets, at the following annual rates: 0.50%
of the first $500 million of average daily net assets; 0.425% of
average daily net assets in excess of $500 million but not exceeding
$1 billion; and 0.375% of average daily net assets in excess of $1
billion.
Pursuant to the Distribution and Shareholder Servicing Plan in
compliance with Rule 12b-1 under the Investment Company Act of 1940,
Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S") receives a
distribution fee from the Fund at the end of each month at the
annual rate of 0.125% of average daily net assets of the Fund. The
distribution fee is to compensate MLPF&S financial consultants and
other directly involved branch office personnel for selling shares
of the Fund and for providing direct personal services to
shareholders. The distribution fee is not compensation for the
administrative and operational services rendered to the Fund by
MLPF&S in processing share orders and administering shareholder
accounts.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, MLFDS, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the period
corresponds to the amounts included in the Statements of Changes in
Net Assets for net proceeds from sale of shares and cost of shares
redeemed, respectively, since shares are recorded at $1.00 per
share.
4. Capital Loss Carryforward:
At March 31, 1998, the Fund had a net capital loss carryforward of
approximately $39,000, of which $5,000 expires in 2001, $10,000
expires in 2002, $13,000 expires in 2003 and $11,000 expires in
2005. This amount will be available to offset like amounts of any
future taxable gains.
<AUDIT-REPORT>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
CMA North Carolina Municipal Money Fund
of CMA Multi-State Municipal Series Trust:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of CMA North
Carolina Municipal Money Fund of CMA Multi-State Municipal Series
Trust as of March 31, 1998, the related statements of operations for
the year then ended and changes in net assets for each of the years
in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended. These
financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the financial
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 the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at March
31, 1998 by correspondence with the custodian. 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, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
CMA North Carolina Municipal Money Fund of CMA Multi-State Municipal
Series Trust as of March 31, 1998, the results of its operations,
the changes in its net assets, and the financial highlights for the
respective stated periods in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
May 5, 1998
<AUDIT-REPORT>
