CMA
CMA NORTH CAROLINA
MUNICIPAL MONEY FUND
Semi-Annual Report
September 30, 1999
MERRILL LYNCH BULL LOGO
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance, which will fluctuate. An
investment in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other Government agency.
Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the
Fund. 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 six-month period ended September 30, 1999, CMA North
Carolina Municipal Money Fund paid shareholders a net annualized
yield of 2.55%.* As of September 30, 1999, the Fund's 7-day yield
was 2.97%.
Economic Environment
During the six-month period ended September 30, 1999, North
Carolina's economy continued to perform favorably as reflected by
the drop in the state's unemployment rate to 2.7% in June. This is
the lowest unemployment rate recorded in the 20 years that
comparable state data collection methods have been used. The most
notable employment gains occurred in the finance, insurance and
construction industries, which posted gains of almost 8%.
Moreover, in April 1999, Governor Jim Hunt announced that North
Carolina ranked fourth in the United States for new locations and
expansions by Site Selection magazine. North Carolina recorded 1,044
new facilities and expansions in 1998, up from 880 in 1997. Some of
the most notable expansions during the past year have companies such
as Fieldcrest Cannon, Bank of America and Glaxo Wellcome PLC. In
addition, North Carolina issued $476 million in general obligation
bonds in March. The borrowing designated $450 million for the
reconstruction and improvement of public school buildings and $26
million for improving the state's water quality.
On July 8, 1999 a trial court entered an order approving an
agreement for the settlement of the remaining claims in the
intangible tax class action litigation. Under the terms of the
settlement, North Carolina has agreed to pay a total of $440
million, $200 million of which is payable on October 1, 1999 and
$240 million due no later than July 10, 2000. The order provides
that the payment will finally extinguish all liability of the state
to all intangible taxpayers.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
The General Assembly has already approved legislation that
appropriates the initial $200 million on a timely basis from the
state's Budget Stabilization Reserve Account, which currently totals
$522 million. Furthermore, plans for financing the remainder of the
refund are still in the works as legislators wait for year-end
budget figures before weighing their options. According to North
Carolina's budget officer, the state will either use the rainy day
fund again or money left over from this year's expected budget
surplus.
Investment Strategy
During the six-month period ended September 30, 1999, the persistent
strength of the US economy continued to fuel an already volatile
interest rate environment. We began the period building on our
relatively bearish position by reinvesting the proceeds of maturing
tax-exempt commercial paper into variable rate products. We did this
in an effort to take advantage of the higher yields that were
expected in April and May as a result of cash outflows during tax
time. This strategy benefited the Fund as yields on one-year fixed
rate issues averaged 3.15% compared to yields on variable rate
products, which averaged 3.60%.
Moreover, during this time low inflation expectations and a lack of
fixed-rate supply made it unattractive to extend the portfolio's
average maturity significantly. As May ended, a string of economic
data pointing to the presence of inflationary pressures caused
concern of higher interest rates. These factors combined with
comments made by Federal Reserve Board Chairman Alan Greenspan
caused yields on US Treasury securities to rise significantly as
expectations of tighter monetary policy increased. For example, the
yield on the one-year Treasury note, which began the period at
4.70%, rose to 5.20% by late June, an increase of 50 basis points
(0.50%). On June 30, 1999, the Federal Reserve Board tightened
monetary policy by raising the Federal Funds rate from 4.75% to
5.00%. As a result, yields on one-year tax-exempt paper rose
approximately 25 basis points to 3.50%. Given our bearish position,
as well as a meager June inflation report and the need to replace
maturing notes, we purchased some one-year issues. The bulk of tax-
exempt fixed rate supply expected during late summer and ongoing
inflationary concerns expressed by the Federal Reserve Board
Chairman kept our strategy in place. For the six-month period ended
September 30, 1999, the state of North Carolina's issuance totaled
$126.6 million, an increase from the $111.8 million issued during
the previous six-month period.
As the period came to an end, the relentless strength of the
domestic economy heightened expectations of tighter monetary policy
even though inflation remained relatively benign. During this time,
we chose to adopt a somewhat bullish investment strategy.
The basis for this strategy was twofold. First, comments made by the
Federal Reserve Board Chairman after the second interest rate hike
were not as negative as those made following the previous
tightening. Second, the expectation of tighter monetary policy,
combined with traditional issuance of cash flow notes in August and
September, caused yields on fixed rate paper to become more
attractive, thus providing a valuable opportunity to take a more
aggressive stance. As a result, our strategy allowed the Fund to
perform above average compared to its peer group during the period,
as measured by IBC Financial Data.
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,
(Terry K. Glenn)
Terry K. Glenn
President and Trustee
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Darrin J. SanFillippo)
Darrin J. SanFillippo
Vice President and Portfolio Manager
November 5, 1999
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1999 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
North Carolina-- $ 4,000 Ashe County, North Carolina, Industrial Facilities and Pollution Control
93.1% Financing Authority, Industrial Revenue Bonds (Oldham Saw Inc. Project),
VRDN, AMT, 3.95% due 5/01/2014 (a) $ 4,000
1,000 Beaufort County, North Carolina, Industrial Facilities and Pollution
Control Financing Authority Revenue Bonds (Texasgulf, Inc. Project),
VRDN, 3.85% due 12/01/2000 (a) 1,000
Buncombe County, North Carolina, GO, VRDN (a):
410 3.85% due 6/01/2000 410
455 3.85% due 6/01/2002 455
500 3.85% due 6/01/2004 500
525 3.85% due 6/01/2005 525
580 3.85% due 6/01/2007 580
435 3.85% due 6/01/2008 435
640 3.85% due 6/01/2009 640
740 3.85% due 6/01/2012 740
3,300 Buncombe County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Revenue Refunding Bonds (Industrial Development
Alliance), VRDN, AMT, 3.90% due 8/01/2009 (a) 3,300
6,600 Cabarrus County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (S&D Coffee Inc. Project), VRDN,
AMT, 3.90% 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, 3.875% due
10/01/2005 (a) 3,000
4,200 Cleveland County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (Curtiss-Wright Flight System),
VRDN, AMT, 3.95% due 11/01/2023 (a) 4,200
6,500 Davidson County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (Diebold Inc. Project), VRDN,
AMT, 3.85% due 6/01/2017 (a) 6,500
4,198 Duplin County, North Carolina, Water District, GO, BAN, Series E, 3.10% due
11/17/1999 4,199
Gaston County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR, VRDN (a):
1,705 (Gold Medal Homes), AMT, 3.85% due 12/01/2009 1,705
2,000 (Quality Metal Project), 3.90% due 3/01/2015 2,000
Granville County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds, VRDN (a):
4,000 (Mayville Metal Products Project), 3.65% due 5/23/2020 4,000
1,605 (Tuscarora Plastics, Inc. Project), AMT, 3.95% due 12/01/2001 1,605
500 Greene County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (Federal Paper Board Company,
Inc. Project), VRDN, 3.90% due 11/01/2009 (a) 500
2,315 Greensboro, North Carolina, GO, Public Improvement, 6.90% due 5/01/2000 (c) 2,407
</TABLE>
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
GO General Obligation Bonds
IDR Industrial Development Revenue Bonds
MSTR Municipal Securities Trust Receipts
PCR Pollution Control Revenue Bonds
VRDN Variable Rate Demand Notes
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1999 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
North Carolina Guilford County, North Carolina, Industrial Facilities and Pollution Control
(continued) Financing Authority, IDR, VRDN, AMT (a):
$ 2,000 (Neal Manufacturing), 3.90% due 11/01/2013 $ 2,000
5,000 (Ornamental Products), 3.95% due 12/01/2014 5,000
900 (Pharmagraphics Inc. Project), 3.90% due 9/01/2010 900
4,500 (US Woven Label Project), 3.90% due 1/01/2013 4,500
24,000 Halifax County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, Exempt Facilities (Westmoreland), VRDN,
AMT, 4.10% due 12/01/2019 (a) 24,000
Holly Springs, North Carolina, GO, BAN:
6,617 3.02% due 12/08/1999 6,617
2,000 Series A, 3.04% due 12/08/1999 2,000
2,900 Johnston County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Hamlin Sheet Metal Co. Inc.), VRDN, AMT,
3.95% due 11/01/2017 (a) 2,900
3,700 Lenoir County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (West Co. Nebraska, Inc. Project), VRDN, 3.85% due
10/01/2005 (a) 3,700
Lincoln County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR, VRDN (a):
7,400 (Hof Textiles Inc. Project), AMT, 3.75% due 10/01/2011 7,400
3,500 (Packaging NC Project), 3.95% due 10/01/2013 3,500
2,125 Mecklenburg County, North Carolina, GO, Series B, 4.70% due 3/01/2000 2,140
Mecklenburg County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds, VRDN (a):
2,000 (Edgcomb Metals Co. Project), 3.85% due 12/01/2009 2,000
1,500 (Griffith Micro Science Project), AMT, 3.85% due 11/01/2007 1,500
8,500 (Rexroth Corp. Project), AMT, 3.90% due 9/01/2016 8,500
5,000 Mecklenburg County, North Carolina, Public Improvements, GO, Series B, 4.25%
due 2/01/2000 5,023
705 New Hanover County, North Carolina, Industrial Facilities Revenue Bonds
(Interroll Corp. Project), VRDN, 3.95% due 11/01/2003 (a) 705
1,100 North Carolina Agricultural Finance Authority, Agricultural Development Revenue
Bonds (Citterio USA Corp. Project), VRDN, AMT, 3.95% due 3/01/2013 (a) 1,100
11,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds,
CP, 3.30% due 10/07/1999 11,000
8,000 North Carolina Eastern Municipal Power Agency, Power System Revenue
Refunding Bonds, Series A, 4.25% due 1/01/2000 (d) 8,025
North Carolina Educational Facilities Finance Agency Revenue Bonds, VRDN (a):
1,000 (Catawba College), 3.75% due 3/01/2019 1,000
3,700 (Duke University Project), Series A, 3.65% due 12/01/2017 3,700
2,000 (Duke University Project), Series A, 3.65% due 6/01/2027 2,000
1,900 North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds
(Cabarrus Memorial Hospital Project), VRDN, 3.80% due 3/01/2012 (a) 1,900
North Carolina Medical Care Commission, Hospital Revenue Bonds (a):
3,500 (Duke University Hospital Project), VRDN, Series C, 3.65% due 6/01/2015 3,500
2,130 (Duke University Hospital Project), VRDN, Series D, 3.65% due 6/01/2015 2,130
200 (Moses H. Cone Memorial Hospital Project), VRDN, 3.90% due 10/01/2023 200
3,100 (Pooled Equipment Financing Project), ACES, 3.70% due 12/01/2025 (b) 3,100
3,100 (Pooled Financing Project), ACES, 3.75% due 4/01/2012 3,100
North Carolina Medical Care Commission, Hospital Revenue Refunding Bonds:
1,000 (Presbyterian Hospital Project), 7.30% due 10/01/2000 (c) 1,054
3,850 (Presbyterian Hospital Project), 7.375% due 10/01/2000 (c) 4,062
1,500 (Rex Hospital Project), 5.10% due 6/01/2000 1,512
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1999 (CONCLUDED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
North Carolina $ 3,000 North Carolina Medical Care Commission Revenue Bonds (Lutheran Retirement
(concluded) Project), VRDN, 3.85% due 1/01/2019 (a) $ 3,000
42,650 North Carolina Municipal Power Agency Number 1, Catawba Electric Revenue
Bonds, CP, 3.60% due 10/08/1999 42,650
1,000 North Carolina State, GO, Capital Improvement, Series A, 4.70% due 2/01/2000 1,004
2,000 North Carolina State, GO, Public School Building, 4.50% due 4/01/2000 2,010
1,700 North Carolina State Ports Authority, Docks and Wharves Facility Revenue
Bonds (Morehead City Terminals), VRDN, 3.95% due 1/01/2016 (a) 1,700
4,500 North Carolina State University, North Carolina, Raleigh Revenue Bonds
(Centennial Campus), VRDN, Series A, 3.70% due 12/15/2019 (a)(e) 4,500
1,800 Person County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Solid Waste Disposal, Carolina Power and
Light), VRDN, AMT, 4.05% due 11/01/2016 (a) 1,800
1,210 Piedmont Triad Airport Authority, North Carolina, Special Facility Revenue
Bonds (Cessna Aircraft Company Project), VRDN, 3.95% due 10/01/2012 (a) 1,210
200 Raleigh-Durham, North Carolina, Airport Authority, Special Facility Revenue
Refunding Bonds (American Airlines), VRDN, Series A, 3.90% due 11/01/2005 (a) 200
6,095 Raleigh, North Carolina, Parking Facility Lease, COP (RPDA Project), 6.75% due
1/01/2000 (c) 6,272
8,500 Rockingham County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR, New Generation, VRDN, 3.90% due 10/01/2014 (a) 8,500
2,300 Rowan County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, PCR, IDR (Hon Industries Project), VRDN, AMT, 3.90% due
4/01/2018 (a) 2,300
2,800 Rutherford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (All American Homes of North Carolina), VRDN, AMT,
4% due 11/01/2011 (a) 2,800
2,073 Sampson County, North Carolina, Water and Sewer District II, GO, BAN, 3.53%
due 3/01/2000 2,073
4,600 Stanley County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Patrick Industries Project), VRDN, AMT, 4% due
8/01/2010 (a) 4,600
2,960 Wake County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Accu-Fab Inc. Project), VRDN, AMT, 3.95% due
1/01/2019 (a) 2,960
1,455 Walnut Cove, North Carolina, GO, BAN, 3.67% due 6/14/2000 1,455
300 Wilson County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (North Carolina Chip Company Project), VRDN,
3.95% due 1/01/2000 (a) 300
1,113 Winterville, North Carolina, GO, BAN, 3.23% due 3/01/2000 1,113
Puerto Rico--6.2% Puerto Rico Commonwealth, Government Development Bank, CP:
5,400 3.15% due 11/15/1999 5,400
7,458 3.40% due 2/11/2000 7,458
5,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, GO, MSTR, VRDN,
Series SGA-43, 3.45% due 7/01/2022 (a) 5,000
Total Investments (Cost--$287,374*)--99.3% 287,374
Other Assets Less Liabilities--0.7% 1,914
----------
Net Assets--100.0% $ 289,288
==========
<FN>
(a)The interest rate is subject to change periodically based
upon prevailing market rates. The interest rate shown is
the rate in effect at September 30, 1999.
(b)MBIA Insured.
(c)Prerefunded.
(d)AMBAC Insured.
(e)FSA 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 SEPTEMBER 30, 1999
<S> <C> <C>
Assets:
Investments, at value (identified cost--$287,374,005) (Note 1a) $ 287,374,005
Cash 100,937
Interest receivable 1,562,186
Prepaid registration fees and other assets (Note 1d) 408,421
---------------
Total assets 289,445,549
---------------
Liabilities:
Payables:
Distributor (Note 2) $ 71,874
Investment adviser (Note 2) 24,323 96,197
---------------
Accrued expenses and other liabilities 60,961
---------------
Total liabilities 157,158
---------------
Net Assets $ 289,288,391
===============
Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares
authorized $ 28,935,484
Paid-in capital in excess of par 260,419,360
Accumulated realized capital losses--net (Note 4) (66,453)
---------------
Net Assets--Equivalent to $1.00 per share based on 289,354,844 shares of
beneficial interest outstanding $ 289,288,391
===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium earned $ 4,827,446
Expenses:
Investment advisory fees (Note 2) $ 742,310
Distribution fees (Note 2) 183,619
Professional fees 26,220
Accounting services (Note 2) 26,179
Transfer agent fees (Note 2) 25,635
Custodian fees 14,262
Registration fees (Note 1d) 13,155
Printing and shareholder reports 9,266
Pricing fees 3,640
Trustees' fees and expenses 920
Other 1,664
---------------
Total expenses 1,046,870
---------------
Investment income--net 3,780,576
Realized Loss on Investments--Net (Note 1c) (547)
---------------
Net Increase in Net Assets Resulting from Operations $ 3,780,029
===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
September 30, March 31,
1999 1999
Increase (Decrease) in Net Assets:
<S> <C> <C>
Operations:
Investment income--net $ 3,780,576 $ 7,678,942
Realized loss on investments--net (547) (26,651)
--------------- ---------------
Net increase in net assets resulting from operations 3,780,029 7,652,291
--------------- ---------------
Dividends to Shareholders (Note 1e):
Investment income--net (3,780,576) (7,678,942)
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders (3,780,576) (7,678,942)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 406,841,739 779,318,396
Net asset value of shares issued to shareholders in reinvestment of
dividends (Note 1e) 3,780,503 7,678,935
--------------- ---------------
410,622,242 786,997,331
Cost of shares redeemed (425,399,561) (789,973,877)
--------------- ---------------
Net decrease in net assets derived from beneficial interest
transactions (14,777,319) (2,976,546)
--------------- ---------------
Net Assets:
Total decrease in net assets (14,777,866) (3,003,197)
Beginning of period 304,066,257 307,069,454
--------------- ---------------
End of period $ 289,288,391 $ 304,066,257
=============== ===============
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 For the Six
from information provided in the financial statements. Months Ended
September 30, For the Year Ended March 31,
Increase (Decrease) in Net Asset Value: 1999 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Investment income--net .01 .03 .03 .03 .03
Realized gain (loss) on investments--net --++ --++ --++ --++ --++
---------- ---------- ---------- ---------- ----------
Total from investment operations .01 .03 .03 .03 .03
---------- ---------- ---------- ---------- ----------
Less dividends from investment income--net (.01) (.03) (.03) (.03) (.03)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Investment Return 2.55%* 2.73% 3.02% 2.84% 3.12%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses, net of reimbursement .70%* .71% .71% .72% .69%
========== ========== ========== ========== ==========
Expenses .70%* .71% .71% .72% .74%
========== ========== ========== ========== ==========
Investment income--net 2.54%* 2.69% 2.97% 2.79% 3.08%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of period (in thousands) $ 289,288 $ 304,066 $ 307,069 $ 274,180 $ 273,910
========== ========== ========== ========== ==========
<FN>
*Annualized.
++Amount is less than $.01 per share.
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 Fund's
financial statements are prepared in accordance with generally
accepted accounting principles, which may require the use of
management accruals and estimates. These unaudited financial
statements reflect all adjustments, which are, in the opinion of
management, necessary to a fair statement of the results for the
interim period presented. All such adjustments are of a normal
recurring nature. 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: .50%
of the first $500 million of average daily net assets; .425% of
average daily net assets in excess of $500 million but not exceeding
$1 billion; and .375% of average daily net assets in excess of $1
billion.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
Pursuant to the Distribution and Shareholder Servicing Plan in
compliance with Rule 12b-1 under the Investment Company Act of 1940,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S")
receives a distribution fee from the Fund at the end of each month
at the annual rate of .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.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, FDS, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares sold, reinvested and redeemed during the
periods corresponds to the amounts included in the Statements of
Changes in Net Assets for net proceeds from sale of shares, value of
shares reinvested and cost of shares redeemed, respectively, since
shares are recorded at $1.00 per share.
4. Capital Loss Carryforward:
At March 31, 1999, the Fund had a net capital loss carryforward of
approximately $66,000, of which $5,000 expires in 2001, $10,000
expires in 2002, $13,000 expires in 2003, $11,000 expires in 2005
and $27,000 expires in 2007. This amount will be available to offset
like amounts of any future taxable gains.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND
OFFICERS AND TRUSTEES
Terry K. Glenn--President and Trustee
Ronald W. Forbes--Trustee
Cynthia A. Montgomery--Trustee
Charles C. Reilly--Trustee
Kevin A. Ryan--Trustee
Richard R. West--Trustee
Arthur Zeikel--Trustee
Vincent R. Giordano--Senior Vice President
Edward J. Andrews--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
Donald C. Burke--Vice President and Treasurer
Willian E. Zitelli--Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
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].
