CMA North Carolina
Municipal Money Fund
Annual Report
March 31, 2000
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. 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. Past performance results shown in this report should not be
considered a representation of future performance, which will
fluctuate. 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, 2000, CMA North Carolina Municipal
Money Fund paid shareholders a net annualized yield of 2.76%*. As of
March 31, 2000, the Fund's 7-day yield was 3.10%.
Economic Environment
During the year ended March 31, 2000, the state of North Carolina's
economy continued to perform soundly. Personal income grew at a
steady pace, healthy population growth continued to fuel the labor
force, and as of December the unemployment rate remained almost 1%
below the national average. However, according to November's Bureau
of Labor Statistics survey, employment growth did slow somewhat.
After growing at 3% for most of the year, state employment growth
currently stands at 1%. A combination of relatively low mortgage
rates and healthy economic conditions kept North Carolina's housing
market strong, as residential construction permits last year
eclipsed 80,000 units for the first time. Retail sales also remained
robust, grossing more than $8.9 billion for November 1999, a 5.1%
increase from the November 1998 level of $8.5 billion. The sole drag
on the state's otherwise strong economy came from the manufacturing
sector.
Going forward, the outlook for manufacturing in North Carolina is
promising as the state continues to diminish its reliance on non-
durable textiles and apparel manufacturing and increase its reliance
on the high-tech and auto industries. For example, only 5% of the
state's employment base is currently concentrated in textile
manufacturing, down from 10% just a decade ago. In addition, foreign
currencies are steadily rebounding, diminishing the cost
disadvantage of US producers. These factors, in combination with a
bright outlook for the automobile and high-tech industries, bode
well for the manufacturing industries' future prospects.
Consequently, aside from the loss of jobs in the apparel and textile
sectors, North Carolina's economy remains healthy. The state's
emergence as a center for high-tech employment will continue to
attract relocations and expansions to metropolitan areas such as
Raleigh and Charlotte.
In September 1999, the state of North Carolina issued $200 million
in general obligation public improvement bonds, which received a
rating of AAA from Moody's Investors Service, Inc. The bonds, which
were authorized in 1998, are designated for natural gas and clean
water purposes. In addition, officials are trying to reach an
agreement on another $3 billion authorization this year for the
state's higher education system. Presently, all of North Carolina's
debt is issued as general obligation, and debt levels remain low at
$365 per capita or 1.4% of personal income.
Investment Strategy
During the year ended March 31, 2000, 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 continuing to reinvest 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 we expected in
April and May of 1999 as a result of cash outflows during tax time.
As May 1999 ended, a string of economic data pointing to the
presence of inflationary pressures raised concerns about 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%. 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. However, with the bulk of tax-exempt fixed rate supply
expected during late summer and ongoing inflationary concerns
expressed by the Federal Reserve Board once again in July, we
maintained a bearish position for the Fund. On August 24, 1999, the
Federal Reserve Board tightened monetary policy again by increasing
the Federal Funds rate 25 basis points to 5.25%. At that time, we
chose to attain a slightly bullish strategy. The basis for this
strategy was twofold. First, comments made by the Federal Reserve
Board after the latest interest rate increase 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 issues to become more attractive, thus providing a
valuable opportunity to take a more aggressive stance.
The second half of the one-year period ended March 31, 2000 began
with economic data that continued to point to a US economy that was
overheating. Consequently, on November 16, 1999, the Federal Reserve
Board tightened monetary policy a third time, increasing the Federal
Funds rate to 5.50%. Although we expected the Federal Reserve Board
would keep monetary policy on hold through year-end because of Year
2000 concerns, we anticipated additional tightening of monetary
policy early in 2000. Thus, during this time we managed the Fund's
interest rate risk by purchasing fixed rate issues that matured
within 90 days--120 days in order to lock in higher yields than
were expected during January and February. As anticipated, the
Federal Reserve Board tightened monetary policy by increasing the
Federal Funds rate 25 basis points at both the February and March
Federal Open Market Committee meetings.
Looking ahead, we continue to believe that the Federal Reserve Board
may have to tighten monetary policy at least once more to slow the
domestic economy. In addition, variable rate products traditionally
outperform fixed rate products in April and May because of cash
outflows during tax time. Given these factors, we ended the period
with a slightly defensive position. This strategy allowed the Fund
to perform on average relative to its peer group for the year ended
March 31, 2000, as measured by the IBC Money Fund Report.
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
months and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Trustee
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Darrin J. SanFilllippo)
Darrin J. SanFilllippo
Vice President and Portfolio Manager
April 25, 2000
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
Portfolio Abbreviations for CMA North Carolina Municipal
Money Fund
ACES SM Adjustable Convertible Extendible Securities
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
CP Commercial Paper
DATES Daily Adjustable Tax-Exempt Securities
FLOATS Floating Rate Securities
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 March 31, 2000 (in Thousands)
<CAPTION>
Face
State Amount Issue Value
<S> <C> <S> <C>
North Carolina-- $ 4,000 Ashe County, North Carolina, Industrial Facilities and Pollution Control
90.1% Financing Authority, Industrial Revenue Bonds (Oldham Saw Inc. Project),
VRDN, AMT, 4.10% 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),
4% due 12/01/2000 1,000
410 Buncombe County, North Carolina, GO, 4.05% due 6/01/2000 410
Buncombe County, North Carolina, GO, VRDN (a):
455 4.05% due 6/01/2002 455
500 4.05% due 6/01/2004 500
525 4.05% due 6/01/2005 525
580 4.05% due 6/01/2007 580
435 4.05% due 6/01/2008 435
640 4.05% due 6/01/2009 640
740 4.05% 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, 4% 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, 4% 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, 4.025% due
10/01/2005 (a) 3,000
Chapel Hill, North Carolina, Parking Facility Revenue Refunding Bonds
(Rosemary Strong Project) (c):
2,310 8.125% due 12/01/2000 2,413
3,305 8.25% due 12/01/2000 3,456
3,000 Charlotte, North Carolina, GO, Refunding, 5% due 2/01/2001 3,022
4,200 Cleveland County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (Curtiss-Wright Flight System),
VRDN, AMT, 4.05% 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, 4% due 6/01/2017(a) 6,500
4,198 Duplin County, North Carolina, Water District, GO, BAN, Series E, 3.90% due
8/09/2000 4,200
10,000 Gaston County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR, Refunding (Duke Energy Corp.), VRDN, AMT, 3.25%
due 10/01/2012 (a) 10,000
Gaston County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR, VRDN (a):
1,635 (Gold Medal Homes), AMT, 3.95% due 12/01/2009 1,635
2,000 (Quality Metal Project), 4.10% due 3/01/2015 2,000
</TABLE>
<TABLE>
CMA North Carolina Municipal Money Fund
Schedule of Investments as of March 31, 2000 (continued) (in Thousands)
<CAPTION>
Face
State Amount Issue Value
<S> <C> <S> <C>
North Carolina Granville County, North Carolina, Industrial Facilities and Pollution
(continued) Control Financing Authority, Industrial Revenue Bonds, VRDN (a):
$ 4,000 (Mayville Metal Products Project), 4% due 5/23/2020 $ 4,000
1,280 (Tuscarora Plastics, Inc. Project), 4.10% due 12/01/2001 1,280
500 Greene County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Federal Paper Board Company, Inc. Project), VRDN,
AMT, 4% due 11/01/2009 (a) 500
2,315 Greensboro, North Carolina, GO, Public Improvement, 6.90% due 5/01/2000 (c) 2,368
Guilford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR, VRDN, AMT (a):
1,800 (Neal Manufacturing), 4.10% due 11/01/2013 1,800
2,500 (Ornamental Products), 4.10% due 12/01/2014 2,500
900 (Pharmagraphics Inc. Project), 4.10% due 9/01/2010 900
2,800 (Snider Tire Inc.), 4.05% due 10/01/2019 2,800
4,500 (US Woven Label Project), 4% 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% due 12/01/2019 (a) 24,000
2,800 Johnston County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Hamlin Sheet Metal Co. Inc.), VRDN, AMT,
4.10% due 11/01/2017 (a) 2,800
3,700 Lenoir County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (West Co. Nebraska, Inc. Project), VRDN, 3.95% due
10/01/2005 (a) 3,700
Lincoln County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR, VRDN (a):
6,600 (Hof Textiles Inc. Project), AMT, 3.90% due 10/01/2011 6,600
3,500 (Packaging NC Project), 4.10% due 10/01/2013 3,500
5,000 Mecklenburg County, North Carolina, GO (Public Improvement), VRDN, Series C,
3.10% due 2/01/2011 (a) 5,000
Mecklenburg County, North Carolina, Industrial Facilities and Pollution
Control Financing Authority, Industrial Revenue Bonds, VRDN (a):
2,000 (Edgcomb Metals Co. Project), 3.90% due 12/01/2009 2,000
1,500 (Griffith Micro Science Project), AMT, 3.95% due 11/01/2007 1,500
8,500 (Rexroth Corp. Project), AMT, 4% due 9/01/2016 8,500
605 New Hanover County, North Carolina, Industrial Facilities Revenue Bonds
(Interroll Corp. Project), VRDN, 4.10% due 11/01/2003 (a) 605
1,000 North Carolina Agricultural Finance Authority, Agricultural Development
Revenue Bonds (Citterio USA Corp. Project), VRDN, AMT, 4.10% due 3/01/2013 (a) 1,000
North Carolina Educational Facilities Finance Agency Revenue Bonds, VRDN (a):
965 (Catawba College), 3.90% due 3/01/2019 965
5,000 (Duke University Project), Series A, 3.85% due 12/01/2017 5,000
14,200 (Methodist College), 3.75% due 3/01/2022 14,200
1,805 North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds
(Cabarrus Memorial Hospital Project), VRDN, 3.90% due 3/01/2012 (a) 1,805
North Carolina Medical Care Commission, Hospital Revenue Bonds (a):
3,500 (Duke University Hospital Project), VRDN, Series C, 3.85% due 6/01/2015 3,500
3,130 (Duke University Hospital Project), VRDN, Series D, 2.95% due 6/01/2015 3,130
200 (Moses H. Cone Memorial Hospital Project), VRDN, 3.95% due 10/01/2023 200
3,100 (Pooled Equipment Financing Project), ACES, 3.85% due 12/01/2025 (b) 3,100
North Carolina Medical Care Commission, Hospital Revenue Refunding Bonds:
1,000 (Presbyterian Hospital Project), VRDN, 7.30% due 10/01/2000 (a)(c) 1,037
3,850 (Presbyterian Hospital Project), VRDN, 7.375% due 10/01/2000 (a)(c) 3,995
1,500 (Rex Hospital Project), 5.10% due 6/01/2000 1,503
</TABLE>
<TABLE>
CMA North Carolina Municipal Money Fund
Schedule of Investments as of March 31, 2000 (continued) (in Thousands)
<CAPTION>
Face
State Amount Issue Value
<S> <C> <S> <C>
North Carolina $ 2,900 North Carolina Medical Care Commission Revenue Bonds (Lutheran Retirement
(concluded) Project), VRDN, 4% due 1/01/2019 (a) $ 2,900
1,600 North Carolina State Ports Authority, Docks and Wharves Facility Revenue
Bonds (Morehead City Terminals), VRDN, 4.10% due 1/01/2016 (a) 1,600
4,500 North Carolina State University--Raleigh, North Carolina, Revenue Bonds
(Centennial Campus), VRDN, Series A, 3% due 12/15/2019 (a)(e) 4,500
1,800 North Carolina State, GO, Capital Improvement, Series A, 4.70% due 2/01/2001 1,808
6,000 North Carolina State, GO, Public Improvement, Series A, 5% due 3/01/2001 6,046
2,000 North Carolina State, GO, Public School Building, 4.50% due 4/01/2000 2,000
2,000 North Carolina State, GO, Series A, 4.75% due 4/01/2000 2,000
21,300 Person County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Solid Waste Disposal, Carolina Power
and Light), VRDN, AMT, 3.95% due 11/01/2016 (a) 21,300
1,210 Piedmont Triad Airport Authority, North Carolina, Special Facility Revenue
Bonds (Cessna Aircraft Company Project), VRDN, 4.10% due 10/01/2012 (a) 1,210
2,300 Rowan County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, PCR, IDR (Hon Industries Project), VRDN, AMT, 4%
due 4/01/2018 (a) 2,300
2,600 Rutherford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (All American Homes of North Carolina), VRDN, AMT,
4.10% due 11/01/2011 (a) 2,600
4,600 Stanley County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Patrick Industries Project), VRDN, AMT, 4.10%
due 8/01/2010 (a) 4,600
2,920 Wake County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Accu-Fab Inc. Project), VRDN, AMT, 4.15% due
1/01/2019 (a) 2,920
Wake County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Carolina Power and Light Company
Project) (a):
9,470 DATES, AMT, 3.95% due 3/01/2017 9,470
6,100 VRDN, Series B, 3.85% due 9/01/2015 6,100
11,900 Wake County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Revenue Refunding Bonds, VRDN, Series B, 3.90% due
6/15/2014 (a) 11,900
1,455 Walnut Cove, North Carolina, GO, BAN, 3.67% due 6/14/2000 1,455
Puerto Rico-- 1,500 Puerto Rico Commonwealth, FLOATS, Series A-1, 3.25% due 7/30/2000 (a) 1,500
9.3% Puerto Rico Commonwealth, Government Development Bonds, CP:
2,000 3.50% due 4/05/2000 2,000
5,000 3.70% due 4/11/2000 5,000
7,720 3.75% due 4/12/2000 7,720
2,700 Puerto Rico Commonwealth, Highway and Transportation Authority,
Transportation Revenue Refunding Bonds, VRDN, Series A, 3.25% due
7/01/2028 (a)(d) 2,700
8,200 Puerto Rico Electric Power Authority, Power Revenue Bonds, GO, MSTR, VRDN,
Series SGA-43, 3.45% due 7/01/2022 (a) 8,200
Total Investments (Cost--$289,728*)--99.4% 289,728
Other Assets Less Liabilities--0.6% 1,808
----------
Net Assets--100.0% $ 291,536
==========
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at March 31, 2000.
(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 March 31, 2000
<S> <C> <C>
Assets:
Investments, at value (identified cost--$289,728,322) $ 289,728,322
Cash 233,328
Interest receivable 1,835,450
Prepaid registration fees and other assets 25,112
--------------
Total assets 291,822,212
--------------
Liabilities:
Payables:
Investment adviser $ 111,196
Distributor 95,838 207,034
--------------
Accrued expenses and other liabilities 79,486
--------------
Total liabilities 286,520
--------------
Net Assets $ 291,535,692
==============
Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares
authorized $ 29,160,215
Paid-in capital in excess of par 262,441,930
Accumulated realized capital losses--net (66,453)
--------------
Net Assets--Equivalent to $1.00 per share based on 291,602,145 shares of
beneficial interest outstanding $ 291,535,692
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA North Carolina Municipal Money Fund
Statement of Operations for the Year Ended March 31, 2000
<S> <C> <C>
Investment Income:
Interest and amortization of premium earned $ 10,080,298
Expenses:
Investment advisory fees $ 1,471,749
Distribution fees 365,734
Accounting services 56,798
Professional fees 54,262
Transfer agent fees 48,735
Custodian fees 26,527
Registration fees 22,382
Printing and shareholder reports 18,628
Pricing fees 7,137
Trustees' fees and expenses 1,826
Other 7,991
--------------
Total expenses 2,081,769
--------------
Investment income--net 7,998,529
Realized Loss on Investments--Net (547)
--------------
Net Increase in Net Assets Resulting from Operations $ 7,997,982
==============
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,
2000 1999
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Investment income--net $ 7,998,529 $ 7,678,942
Realized loss on investments--net (547) (26,651)
-------------- --------------
Net increase in net assets resulting from operations 7,997,982 7,652,291
-------------- --------------
Dividends to Shareholders:
Dividends to shareholders from investment income--net (7,998,529) (7,678,942)
-------------- --------------
Beneficial Interest Transactions:
Net proceeds from sale of shares 836,020,671 779,318,396
Net asset value of shares issued to shareholders in reinvestment of
dividends 7,998,408 7,678,935
-------------- --------------
844,019,079 786,997,331
Cost of shares redeemed (856,549,097) (789,973,877)
-------------- --------------
Net decrease in net assets derived from beneficial interest transactions (12,530,018) (2,976,546)
-------------- --------------
Net Assets:
Total decrease in net assets (12,530,565) (3,003,197)
Beginning of year 304,066,257 307,069,454
-------------- --------------
End of year $ 291,535,692 $ 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
from information provided in the financial statements.
For the Year Ended March 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<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 .03
Realized gain (loss) on investments--net --++ --++ --++ --++ --++
--------- --------- --------- --------- ---------
Total from investment operations .03 .03 .03 .03 .03
--------- --------- --------- --------- ---------
Less dividends from investment income--net (.03) (.03) (.03) (.03) (.03)
--------- --------- --------- --------- ---------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
Total Investment Return 2.76% 2.73% 3.02% 2.84% 3.12%
========= ========= ========= ========= =========
Ratios to Average Net Assets:
Expenses, net of reimbursement .71% .71% .71% .72% .69%
========= ========= ========= ========= =========
Expenses .71% .71% .71% .72% .74%
========= ========= ========= ========= =========
Investment income--net 2.72% 2.69% 2.97% 2.79% 3.08%
========= ========= ========= ========= =========
Supplemental Data:
Net assets, end of year (in thousands) $ 291,536 $ 304,066 $ 307,069 $ 274,180 $ 273,910
========= ========= ========= ========= =========
++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 accounting
principles generally accepted in the United States of America, which
may require the use of management accruals and estimates. 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.
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.
CMA North Carolina Municipal Money Fund
Notes to Financial Statements (concluded)
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 years
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, 2000, 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.
<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, 2000, 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 auditing standards
generally accepted in the United States of America. 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, 2000 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, 2000, the results of its operations,
the changes in its net assets, and the financial highlights for the
respective stated periods in accordance with accounting principles
generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
May 1, 2000
</AUDIT-REPORT>
CMA North Carolina Municipal Money Fund
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, 2000 qualify as
tax-exempt interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributed by the Fund
during the taxable year ended March 31, 2000.
Please retain this information for your records.
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
William 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*
*For inquiries regarding your CMA account,
call (800) CMA-INFO [(800) 262-4636].
