MERRILL LYNCH
MULTI-STATE
LIMITED MATURITY
MUNICIPAL
SERIES TRUST
FUND LOGO
Semi-Annual Report
January 31, 2000
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Trust unless
accompanied or preceded by the Trust's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject
to change.
Merrill Lynch Multi-State
Limited Maturity
Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MERRILL LYNCH MULTI-STATE LIMITED MATURITY MUNICIPAL SERIES TRUST
Officers and
Trustees
Terry K. Glenn, President and Trustee
James H. Bodurtha, Trustee
Herbert I. London, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Arthur Zeikel, Trustee
Vincent R. Giordano, Senior Vice President
Edward J. Andrews, Vice President
Donald C. Burke, Vice President and Treasurer
Alice A. Pellegrino, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10005
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Robert R. Martin, Trustee of Merrill Lynch Multi-State Limited
Maturity Municipal Series Trust has recently retired. The Fund's
Board of Trustees wishes Mr. Martin well in his retirement.
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 2000
TO OUR SHAREHOLDERS
The Municipal Market Environment
During the three months ended January 31, 2000, continued strong
domestic growth, gradual improvement in foreign economies and
investor concerns regarding future inflationary pressures pushed
long-term fixed-income bond yields higher. The Federal Reserve Board
continued to raise short-term interest rates in November 1999 as
well as just after the period's close, seeking to moderate US
economic growth and maintain the existing benign inflationary
environment. US economic growth, in part intensified by Year 2000
preparations, grew 5.8% during the last fiscal quarter of 1999 and
had an annual rate of 4.1% for 1999. A number of inflationary
indicators have also begun to signal some increase in price
pressures.
However, most investors believe that the Federal Reserve Board will
be extremely vigilant in preventing such pressures from any material
escalation. US Treasury bond yields responded by rising
approximately 60 basis points (0.60%) by mid-January 2000. A strong
rally, largely based upon an expected significant reduction in the
future supply of US Treasury 30-year maturity bonds, pushed yields
lower to 6.50% at January 31, 2000. Over the last three months,
yields on 30-year US Treasury bonds rose approximately 30 basis
points.
The tax-exempt bond market was also under pressure throughout the
entire period. Despite receiving more than $30 billion in coupon
payments, bond maturities and proceeds from early redemptions in
December and January, overall investor demand has diminished. It is
likely that the returns generated by the US equity market have
continued to attract investor attention and have left little demand
for competing investment alternatives. At January 31, 2000, long-
term tax-exempt revenue bond yields, as measured by the Bond Buyer
Revenue Index, were 6.34%, an increase of nearly 15 basis points
over the last three months.
Issuance by municipalities has significantly declined in recent
months. Over the last six months, less than $100 billion in long-
term tax-exempt bonds were issued, representing a decline of over
20% compared to the same period a year ago. During the last three
months, less than $45 billion in long-term bonds were issued by
various municipalities. This most recent quarterly issuance is 30%
below the level of the January 31, 1999 quarter. Additionally,
during January 2000, less than $8 billion in municipal debt was
underwritten, down more than 50% from January 1999 levels. This
represents the lowest monthly issuance in over five years. Toward
the end of 1999, consensus estimates for 2000 annual issuance were
in the $210 billion--$215 billion range. January's underwritings,
as well as those expected to be issued in the near future, have led
some analysts to revise their forecasts to the $190 billion range.
We believe an overall reduction in bond supply in the coming year
should help support the municipal bond market's overall technical
position. While tax-exempt bond yields, which are at their highest
level in over three years, have attracted significant retail
investor interest, institutional demand declined sharply. Long-term
municipal mutual funds have seen consistent outflows in recent
months as the yields of individual securities rose faster than those
of larger, more diverse mutual funds. During the six months ended
January 31, 2000, tax-exempt mutual funds have had net redemptions
of approximately $9 billion. Also, the demand from property and
casualty insurance companies has weakened as a result of the losses
and anticipated losses incurred from a series of damaging storms
across much of the eastern United States. Additionally, many
institutional investors who have in recent years been attracted to
the municipal bond market by historically attractive tax-exempt bond
yield ratios of over 90%, found other asset classes even more
attractive. Even with a reduced supply position, tax-exempt issuers
have been forced to repeatedly raise municipal bond yields in an
attempt to attract adequate demand. We believe a reduced bond supply
going forward is likely to promote a more closely balanced
supply/demand structure and foster a more stable tax-exempt interest
rate environment.
Looking ahead, it appears to us that long-term tax-exempt bond
yields will remain under pressure, trading in a broad range centered
around current levels. Investors are also likely to remain concerned
regarding future action by the Federal Reserve Board in early 2000.
Any improvement in bond prices may be contingent upon weakening in
both US employment growth and consumer spending. The 100 basis point
rise in US Treasury bond yields seen thus far could negatively
affect US economic growth. The US housing market is likely to be
among the first sectors to be affected, as some declines have
already been evidenced because of higher mortgage rates. We believe
it is also unrealistic to expect double-digit returns in US equity
markets to continue indefinitely. Much of the US consumer's wealth
is tied to recent stock market appreciation. Any slowing in these
incredible growth rates may reduce consumer spending. We believe
that these factors suggest that the worst of the recent increase in
bond yields has passed and stable, if not slightly improving, bond
prices may be expected.
Portfolio Strategy
Merrill Lynch California Limited
Maturity Municipal Bond Fund
During the quarter ended January 31, 2000, the state of California
continued to exhibit strong economic growth led by retail sales,
technology, entertainment and a booming construction sector.
Employment has achieved annual gains since 1994 and exceeded that of
the nation since 1996. For November 1999, the state's seasonally
adjusted unemployment rate stood at 4.8%. California's revenue
estimates were revised down in 1998--1999 since a moderation in
economic activity was expected. However, continued personal income
growth, high consumer confidence levels and high employment levels
pushed economic activity and tax revenues well above original
estimates, helping the state's General Fund to close the year with a
$2.4 billion balance. The budget for 1999 - 2000 will use about $750
million of that balance. As a result, the General Fund is currently
projecting an end-of-year closing balance of approximately $1.7
billion, including $890 million in the reserve for economic
uncertainties. The first four months of the state's new fiscal year
have seen revenues well ahead of estimates with both personal income
and sales taxes performing very well. The stronger financial
position has enabled the state to reduce its operating borrowing to
$1 billion, down from $1.7 billion last year and $3 billion the two
preceding years. The state's debt position continues to be
favorable, with net tax supported debt of about $24.5 billion, or
$776 per capita and 2.7% of personal income.
At January 31, 2000, net assets of Merrill Lynch California Limited
Maturity Municipal Bond Fund stood at approximately $6.9 million, a
decrease of approximately 13% from October quarter-end. By October
31, 1999, we had decided to maintain a neutral investment strategy
until US economic growth moderated from the strong growth exhibited
in 1999. We kept a small cash position heading into 2000 with the
portfolio's duration neutral, at approximately 3 years. As of
January 31, 2000, approximately 80% of the Fund's net assets were
invested in securities rated AA or better by at least one of the
major rating agencies. Higher-rated issues tend to outperform lesser-
rated securities in a rising interest rate environment. This
strategy enhanced Fund performance as the Federal Reserve Board
again increased the Federal Funds rate 25 basis points in November.
Interest rates continued to rise in response to the view that the
Federal Reserve Board would pursue its efforts to moderate the
economy and keep inflationary fears subdued. We expect to continue
to maintain our neutral stance in the upcoming months or until US
economic growth moderates and the Federal Reserve Board is perceived
to be ahead of the inflation curve.
Merrill Lynch Florida Limited
Maturity Municipal Bond Fund
During the quarter ended January 31, 2000, the state of Florida
continued to exhibit strong economic growth. The state's economic
performance continues to be fueled by nationwide personal income
gains, low inflation and surging consumer confidence, which led the
state's surging tourism industry, revitalized housing gains and
bolstered the state's expanding services industry. The state's
December seasonally adjusted unemployment rate stood at 3.7%, below
the national average of 4.0%. Financial operations have continued
the better-than-expected trend of the past several years, with the
state's Budget Stabilization Fund at $787 million, or 4.4% of 1998--
1999 revenues. Additionally, 1998 - 1999 closed with $573.8 million
in combined general and working capital fund balances, which
provided 3.2% in increased revenues. While the balance is expected
to be reduced to $416 million by the end of this year, the Budget
Stabilization Fund is expected to increase to $847 million by fiscal
year-end as tax revenues continue to outperform estimates and
increase the state's rainy day cushion. State tax-supported debt has
remained moderate over a long period and at $12.5 billion is equal
to $888 per capita and 3.3% of personal income. The state has
initiated a debt affordability study to deal with its rapidly
growing educational system and the structure of debt issuance in the
years ahead.
At January 31, 2000, net assets of Merrill Lynch Florida Limited
Maturity Municipal Bond Fund stood at approximately $14.9 million,
an increase of approximately 11% from the October quarter-end. By
October 31, 1999, we had decided to maintain a neutral investment
strategy until US economic growth moderated from the strong growth
exhibited in 1999. We kept a low cash position heading into 2000
with the portfolio's duration below neutral, at 2.8 years. As of
January 31, 2000, approximately 85% of the Fund's net assets were
invested in securities rated AA or better. Higher-rated issues tend
to outperform lesser-rated securities in a rising interest rate
environment. This strategy enhanced Fund performance as the Federal
Reserve Board once again increased the Federal Funds rate 25 basis
points in November. Interest rates continued to rise in response to
the view that the Federal Reserve Board would pursue its efforts to
moderate the economy and keep inflationary fears subdued. We expect
to continue to maintain our neutral stance in the upcoming months or
until US economic growth moderates and the Federal Reserve Board is
perceived to be ahead of the inflation curve.
In Conclusion
We thank you for your support of Merrill Lynch Multi-State Limited
Maturity Municipal Series Trust, and we look forward to serving your
investment needs in the months and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Edward J. Andrews)
Edward J. Andrews
Vice President and Portfolio Manager
March 8, 2000
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 2000
PERFORMANCE DATA
About Fund
Performance
Investors are able to purchase shares of the Trust through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 1% and bear no ongoing distribution or account maintenance
fees. Class A Shares are available only to eligible investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 1% if redeemed during the first year, decreasing 1% the
next year to 0%. In addition, Class B Shares are subject to a
distribution fee of 0.20% and an account maintenance fee of 0.15%.
These shares automatically convert to Class D Shares after
approximately 10 years. (There is no initial sales charge for
automatic share conversions.)
* Class C Shares are subject to a distribution fee of 0.20% and an
account maintenance fee of 0.15%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase. Class C Shares are available only through the
exchange privilege.
* Class D Shares incur a maximum initial sales charge of 1% and an
account maintenance fee of 0.10% (but no distribution fee).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Recent Performance
Results" and "Average Annual Total Return" tables assume
reinvestment of all dividends and capital gains distributions at net
asset value on the payable date. Investment return and principal
value of shares will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost. Dividends paid to each
class of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders. The Fund's Investment Adviser voluntarily waived a
portion of its management fee. Without such waiver, the Fund's
performance would have been lower.
<TABLE>
Recent
Performance
Results*
<CAPTION>
Since
3 Month 12 Month Inception Standardized
As of January 31, 2000 Total Return Total Return Total Return 30-day Yield
<S> <C> <C> <C> <C>
California Limited Maturity Fund Class A Shares -0.09% -0.94% +24.13% 2.74%
California Limited Maturity Fund Class B Shares 0.00 -1.39 +21.32 2.41
California Limited Maturity Fund Class C Shares -0.05 -1.11 +21.65 2.60
California Limited Maturity Fund Class D Shares -0.07 -1.04 +22.37 2.64
Florida Limited Maturity Fund Class A Shares -0.07 -1.41 +22.66 3.22
Florida Limited Maturity Fund Class B Shares -0.15 -1.76 +20.00 2.90
Florida Limited Maturity Fund Class C Shares -0.02 -1.62 +18.28 3.10
Florida Limited Maturity Fund Class D Shares -0.09 -1.51 +20.77 3.12
<FN>
*Investment results shown do not reflect sales charges; results
would be lower if a sales charge was included. Total investment
returns are based on changes in net asset values for the periods
shown, and assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date. The since
inception periods for each of the Funds within Merrill Lynch Multi-
State Limited Maturity Municipal Series Trust are from 11/26/93 for
Class A & Class B Shares and from 10/21/94 for Class C & Class D
Shares.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 2000
PERFORMANCE DATA (concluded)
Average Annual Total Returns
California Limited Maturity Fund
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 12/31/99 -0.56% -1.56%
Five Years Ended 12/31/99 +4.26 +4.05
Inception (11/26/93) through 12/31/99 +3.53 +3.36
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
% Return % Return
Class C Shares* Without CDSC With CDSC**
Year Ended 12/31/99 -0.73% -1.70%
Five Years Ended 12/31/99 +4.05 +4.05
Inception (10/21/94) through 12/31/99 +3.76 +3.76
[FN]
*Maximum contingent deferred sales charge is 1% and reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 12/31/99 -0.91% -1.88%
Five Years Ended 12/31/99 +3.89 +3.89
Inception (11/26/93) through 12/31/99 +3.17 +3.17
[FN]
*Maximum contingent deferred sales charge is 1% and reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Year Ended 12/31/99 -0.56% -1.55%
Five Years Ended 12/31/99 +4.17 +3.96
Inception (10/21/94) through 12/31/99 +3.89 +3.69
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
Florida Limited Maturity Fund
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 12/31/99 -0.35% -1.35%
Five Years Ended 12/31/99 +4.08 +3.87
Inception (11/26/93) through 12/31/99 +3.43 +3.26
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 12/31/99 -0.70% -1.67%
Five Years Ended 12/31/99 +3.71 +3.71
Inception (11/26/93) through 12/31/99 +3.06 +3.06
[FN]
*Maximum contingent deferred sales charge is 1% and reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Class C Shares* Without CDSC With CDSC**
Year Ended 12/31/99 -0.55% -1.52%
Five Years Ended 12/31/99 +3.55 +3.55
Inception (10/21/94) through 12/31/99 +3.31 +3.31
[FN]
*Maximum contingent deferred sales charge is 1% and reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Year Ended 12/31/99 -0.55% -1.55%
Five Years Ended 12/31/99 +3.98 +3.77
Inception (10/21/94) through 12/31/99 +3.73 +3.53
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
California Limited Maturity Municipal Bond Fund
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
California NR* A2 $ 400 California Educational Facilities Authority, Revenue Refunding
- --98.5% Bonds (Loyola Marymount University), 5.70% due 10/01/2002 $ 413
AAA Aaa 500 California Health Facilities Finance Authority, Revenue Refunding
Bonds (De Las Companas), Series A, 5.30% due 7/01/2003 (a) 511
A1+ P1 100 California Pollution Control Financing Authority, PCR, Refunding
(Exxon Project), VRDN, 3% due 12/01/2012 (c) 100
California State, GO:
AA- Aa3 750 6.75% due 10/01/2003 805
AAA Aaa 750 6.35% due 11/01/2004 (b) 805
AAA Aaa 500 California Statewide Communities Development Authority, Lease
Revenue Refunding Bonds (Oakland Convention Center Projects),
5.70% due 10/01/2002 (a) 515
NR* A 400 Coachella Valley, California, Water Improvement District No. 71,
Storm Water District, COP (Flood Control Project), 6.60% due
10/01/2002 (d) 428
BBB- Aaa 350 Foothill/Eastern Corridor Agency, California, Toll Road Revenue
Refunding Bonds, Senior Lien, Series A, 6% due 1/01/2007 (d) 373
AAA Aaa 200 Los Angeles, California, Department of Airports, Airport Revenue
Refunding Bonds, Series A, 6% due 5/15/2005 (b) 212
A+ Aa3 650 Los Angeles, California, Department of Water and Power, Electric
Plant Revenue Bonds, 6% due 4/01/2002 670
AA- Aa1 1,000 Los Angeles County, California, Public Works Financing Authority,
Revenue Refunding Bonds (Capital Construction), 4.80% due
3/01/2004 1,006
AAA Aaa 400 Napa County, California, Flood Protection and Watershed
Improvement Authority Revenue Bonds, Series A, 4.60% due
6/15/2009 (b) 385
AAA Aaa 500 University of California, Revenue Refunding Bonds (Multi-
Purpose Projects), Series C, 10% due 9/01/2001 (a) 543
Total Investments (Cost--$6,523)--98.5% 6,766
Other Assets Less Liabilities--1.5% 100
-------
Net Assets--100.0% $ 6,866
=======
(a)AMBAC Insured.
(b)FGIC Insured.
(c)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at January 31, 2000.
(d)Prerefunded.
*Not Rated.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 2000
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
Florida Limited Maturity Municipal Bond Fund
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
Florida--86.4% AAA Aaa $1,000 Dade County, Florida, GO, Series I, 6.90% due 7/01/2003 (a) $ 1,067
AAA Aaa 835 Dunedin, Florida, Hospital Revenue Bonds (Mease Health Care),
6.75% due 11/15/2001 (d)(e) 882
AA+ Aa2 1,000 Florida State Board of Education, Capital Outlay, GO (Public
Education), Series B, 5.625% due 6/01/2005 1,030
AAA Aaa 1,730 Florida State Bond Finance Division, Department of General
Services, Revenue Refunding Bonds (Save Our Coast--Department
of Natural Resources Preservation), 6.30% due 7/01/2001 (d)(e) 1,790
AAA Aaa 500 Florida State Turnpike Authority, Turnpike Revenue Refunding
Bonds (Department of Transportation), Series A, 5.50% due
7/01/2007 (b) 511
A A 100 Hillsborough County, Florida, Capital Improvement Revenue
Refunding Bonds (County Center Project), Second Series,
6.75% due 7/01/2002 (e) 106
AA Aa2 1,000 Jacksonville, Florida, Electric Authority, Revenue Refunding
Bonds (Saint John's River), Issue 2, Series 6-C, 6.50% due
10/01/2001 1,028
AA NR* 1,000 Jacksonville, Florida, Electric Authority, Special Obligation
Revenue Refunding Bonds (Saint John's River), Third Series,
6.65% due 10/01/2000 (e) 1,032
AA- A1 650 Lakeland, Florida, Electric and Water Revenue Refunding and
Improvement Bonds, Series B, 5.625% due 10/01/2006 (e) 673
AAA Aaa 250 Lee County, Florida, Water and Sewer Revenue Bonds, Series A,
4.10% due 10/01/2008 (a) 225
AAA Aaa 500 North Miami, Florida, Health Facilities Authority, Health
Facility Revenue Refunding Bonds (Bon Secours Health System
Project), 6% due 8/15/2002 (c)(e) 524
AA- Aaa 850 Orlando, Florida, Utilities Commission, Water and Electric
Revenue Bonds, Sub-Series A, 6.50% due 10/01/2001 (e) 893
AAA Aaa 1,000 Palm Bay, Florida, Utility Revenue Bonds (Palm Bay Utility
Corporation Project), Series B, 6.20% due 10/01/2002 (d)(e) 1,054
AAA Aaa 300 Port Orange, Florida, Water and Sewer Revenue Refunding Bonds,
5% due 10/01/2003 (a) 303
AAA Aaa 800 Sunrise, Florida, Utility System Revenue Bonds, Series A,
5.75% due 10/01/2006 (a)(e) 834
AAA Aaa 500 Tallahassee, Florida, Energy System Revenue Bonds, Series B,
4% due 10/01/2004 (c) 472
AAA Aaa 400 Tampa, Florida, Water and Sewer Revenue Refunding Bonds,
Series A, 6% due 10/01/2002 (b)(e) 416
Guam--4.3% AAA NR* 600 Guam Power Authority, Revenue Refunding Bonds, Series A,
6.375% due 10/01/2002 (e) 638
Puerto A Baa1 900 Puerto Rico Commonwealth, GO, Refunding, 5.30% due 7/01/2004 912
Rico--8.1% A- Baa1 275 Puerto Rico Municipal Finance Agency Revenue Bonds, Series A,
6.50% due 7/01/2004 (e) 296
Total Investments (Cost--$14,682)--98.8% 14,686
Other Assets Less Liabilities--1.2% 184
-------
Net Assets--100.0% $14,870
=======
(a)AMBAC Insured
(b)FGIC Insured.
(c)FSA Insured.
(d)MBIA Insured.
(e)Prerefunded.
*Not Rated.
See Notes to Financial Statements.
</TABLE>
Portfolio
Abbreviations
To simplify the listings of Merrill Lynch Multi-State Limited
Maturity Municipal Series Trust's portfolio holdings in the Schedule
of Investments, we have abbreviated the names of many of the
securities according to the list at right.
COP Certificates of Participation
GO General Obligation Bonds
PCR Pollution Control Revenue Bonds
VRDN Variable Rate Demand Notes
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 2000
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
<CAPTION>
California Florida
Limited Limited
Maturity Maturity
As of January 31, 2000 Fund Fund
<S> <S> <C> <C>
Assets: Investments, at value* $ 6,766,209 $14,686,298
Cash 45,282 27,404
Interest receivable 118,707 206,652
Prepaid registration fees and other assets 662 1,332
----------- -----------
Total assets 6,930,860 14,921,686
----------- -----------
Liabilities: Payables:
Beneficial interest redeemed 52,938 --
Dividends to shareholders 3,699 9,678
Investment adviser 832 4,279
Distributor 1,064 2,433
Accrued expenses and other liabilities 6,642 35,111
----------- -----------
Total liabilities 65,175 51,501
----------- -----------
Net Assets: Net assets $ 6,865,685 $14,870,185
=========== ===========
Net Assets Class A Shares of beneficial interest, $.10 par value,
Consist of: unlimited shares authorized $ 13,428 $ 39,061
Class B Shares of beneficial interest, $.10 par value,
unlimited shares authorized 30,780 75,756
Class C Shares of beneficial interest, $.10 par value,
unlimited shares authorized 291 4,793
Class D Shares of beneficial interest, $.10 par value,
unlimited shares authorized 25,080 33,881
Paid-in capital in excess of par 6,823,917 15,362,827
Accumulated realized capital losses on investments--net (271,197) (649,980)
Unrealized appreciation on investments--net 243,386 3,847
----------- -----------
Net assets $ 6,865,685 $14,870,185
=========== ===========
Net Asset Value: Class A: Net assets $ 1,325,108 $ 3,785,899
=========== ===========
Shares outstanding 134,275 390,613
=========== ===========
Net asset value $ 9.87 $ 9.69
=========== ===========
Class B: Net assets $ 3,036,058 $ 7,341,871
=========== ===========
Shares outstanding 307,796 757,556
=========== ===========
Net asset value $ 9.86 $ 9.69
=========== ===========
Class C: Net assets $ 28,746 $ 461,130
=========== ===========
Shares outstanding 2,913 47,925
=========== ===========
Net asset value $ 9.87 $ 9.62
=========== ===========
Class D: Net assets $ 2,475,773 $ 3,281,285
=========== ===========
Shares outstanding 250,800 338,813
=========== ===========
Net asset value $ 9.87 $ 9.68
=========== ===========
*Identified cost $ 6,522,823 $14,682,451
=========== ===========
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF OPERATIONS
<CAPTION>
California Florida
Limited Limited
Maturity Maturity
For the Six Months Ended January 31, 2000 Fund Fund
<S> <S> <C> <C>
Investment Income: Interest and amortization of premium and discount earned $ 190,505 $ 345,997
Expenses: Professional fees 24,699 26,095
Investment advisory fees 13,682 24,724
Printing and shareholder reports 13,142 10,562
Trustees' fees and expenses 8,369 14,347
Account maintenance and distribution fees--Class B 6,049 12,865
Accounting services 3,834 14,962
Registration fees 6,346 8,612
Pricing fees 1,465 1,557
Custodian fees 1,247 1,760
Account maintenance fees--Class D 1,463 1,388
Transfer agent fees--Class B 656 1,144
Transfer agent fees--Class D 435 340
Transfer agent fees--Class A 200 479
Account maintenance and distribution fees--Class C 72 90
Transfer agent fees--Class C 24 22
Other 940 1,228
----------- -----------
Total expenses before reimbursement 82,623 120,175
Reimbursement of expenses (7,818) --
----------- -----------
Total expenses after reimbursement 74,805 120,175
----------- -----------
Investment income--net 115,700 225,822
----------- -----------
Realized & Realized gain on investments--net 26,839 9,352
Unrealized Change in unrealized appreciation on investments--net (159,729) (261,643)
Gain (Loss) on ----------- -----------
Investments--Net: Net Decrease in Net Assets Resulting from Operations $ (17,190) $ (26,469)
=========== ===========
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 2000
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
California Limited Florida Limited
Maturity Fund Maturity Fund
For the Six For the For the Six For the
Months Ended Year Ended Months Ended Year Ended
January 31, July 31, January 31, July 31,
Increase (Decrease) in Net Assets: 2000 1999 2000 1999
<S> <S> <C> <C> <C> <C>
Operations: Investment income--net $ 115,700 $ 291,247 $ 225,822 $ 574,753
Realized gain on investments--net 26,839 38,866 9,352 49,224
Change in unrealized appreciation on
investments--net (159,729) (116,580) (261,643) (282,262)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations (17,190) 213,533 (26,469) 341,715
----------- ----------- ----------- -----------
Dividends to Investment income--net:
Shareholders: Class A (21,145) (46,359) (65,954) (156,605)
Class B (48,380) (125,870) (111,914) (247,981)
Class C (1,437) (3,446) (2,007) (1,739)
Class D (44,738) (115,572) (45,947) (168,428)
----------- ----------- ----------- -----------
Net decrease in net assets resulting from
dividends to shareholders (115,700) (291,247) (225,822) (574,753)
----------- ----------- ----------- -----------
Beneficial Net increase (decrease) in net assets
Interest derived from beneficial interest
Transactions: transactions (1,263,169) (741,002) 694,260 (4,046,299)
----------- ----------- ----------- -----------
Net Assets: Total increase (decrease) in net assets (1,396,059) (818,716) 441,969 (4,279,337)
Beginning of period 8,261,744 9,080,460 14,428,216 18,707,553
----------- ----------- ----------- -----------
End of period $ 6,865,685 $ 8,261,744 $14,870,185 $14,428,216
=========== =========== =========== ===========
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
California Limited Maturity Fund
Class A
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.03 $ 10.13 $ 10.22 $ 10.05 $ 9.99
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .16 .32 .39 .38 .39
Realized and unrealized gain (loss) on
investments--net (.16) (.10) (.09) .17 .06
--------- --------- --------- --------- ---------
Total from investment operations -- .22 .30 .55 .45
--------- --------- --------- --------- ---------
Less dividends from investment income--net (.16) (.32) (.39) (.38) (.39)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.87 $ 10.03 $ 10.13 $ 10.22 $ 10.05
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (.03%)++ 2.20% 2.96% 5.57% 4.56%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement 1.72%* 1.59% 1.12% 1.08% .94%
Net Assets: ========= ========= ========= ========= =========
Expenses 1.92%* 1.79% 1.32% 1.28% 1.30%
========= ========= ========= ========= =========
Investment income--net 3.15%* 3.18% 3.82% 3.75% 3.89%
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $ 1,325 $ 1,294 $ 1,460 $ 3,152 $ 3,162
Data: ========= ========= ========= ========= =========
Portfolio turnover 10.12% 44.37% 24.65% 26.86% 11.09%
========= ========= ========= ========= =========
<CAPTION>
California Limited Maturity Fund
Class B
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.03 $ 10.12 $ 10.21 $ 10.04 $ 9.99
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .14 .29 .35 .34 .36
Realized and unrealized gain (loss) on
investments--net (.17) (.09) (.09) .17 .05
--------- --------- --------- --------- ---------
Total from investment operations (.03) .20 .26 .51 .41
--------- --------- --------- --------- ---------
Less dividends from investment income--net (.14) (.29) (.35) (.34) (.36)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.86 10.03 $ 10.12 $ 10.21 $ 10.04
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (.31%)++ 1.93% 2.59% 5.20% 4.08%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement 2.07%* 1.94% 1.51% 1.44% 1.30%
Net Assets: ========= ========= ========= ========= =========
Expenses 2.27%* 2.14% 1.71% 1.64% 1.66%
========= ========= ========= ========= =========
Investment income--net 2.79%* 2.83% 3.45% 3.39% 3.53%
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $ 3,036 $ 3,718 $ 4,812 $ 6,879 $ 9,919
Data: ========= ========= ========= ========= =========
Portfolio turnover 10.12% 44.37% 24.65% 26.86% 11.09%
========= ========= ========= ========= =========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 2000
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
California Limited Maturity Fund
Class C
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.03 $ 10.12 $ 10.22 $ 10.05 $ 9.99
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .15 .31 .37 .36 .37
Realized and unrealized gain (loss) on
investments--net (.16) (.09) (.10) .17 .06
--------- --------- --------- --------- ---------
Total from investment operations (.01) .22 .27 .53 .43
--------- --------- --------- --------- ---------
Less dividends from investment income--net (.15) (.31) (.37) (.36) (.37)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.87 $ 10.03 $ 10.12 $ 10.22 $ 10.05
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (.11%)++ 2.12% 2.68% 5.39% 4.35%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement 1.88%* 1.76% 1.36% 1.25% 1.14%
Net Assets: ========= ========= ========= ========= =========
Expenses 2.08%* 1.96% 1.56% 1.45% 1.50%
========= ========= ========= ========= =========
Investment income--net 2.97%* 3.00% 3.61% 3.58% 3.69%
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $ 29 $ 114 $ 95 $ 57 $ 55
Data: ========= ========= ========= ========= =========
Portfolio turnover 10.12% 44.37% 24.65% 26.86% 11.09%
========= ========= ========= ========= =========
<CAPTION>
California Limited Maturity Fund
Class D
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.04 $ 10.13 $ 10.22 $ 10.05 $ 9.99
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .15 .31 .38 .37 .38
Realized and unrealized gain (loss) on
investments--net (.17) (.09) (.09) .17 .06
--------- --------- --------- --------- ---------
Total from investment operations (.02) .22 .29 .54 .44
--------- --------- --------- --------- ---------
Less dividends from investment income--net (.15) (.31) (.38) (.37) (.38)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.87 $ 10.04 $ 10.13 $ 10.22 $ 10.05
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (.18%)++ 2.20% 2.86% 5.47% 4.46%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement 1.81%* 1.67% 1.25% 1.15% 1.06%
Net Assets: ========= ========= ========= ========= =========
Expenses 2.01%* 1.87% 1.45% 1.35% 1.40%
========= ========= ========= ========= =========
Investment income--net 3.05%* 3.09% 3.70% 3.69% 3.77%
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $ 2,476 $ 3,136 $ 2,713 $ 4,043 $ 2,185
Data: ========= ========= ========= ========= =========
Portfolio turnover 10.12% 44.37% 24.65% 26.86% 11.09%
========= ========= ========= ========= =========
<CAPTION>
Florida Limited Maturity Fund
Class A
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.87 $ 10.00 $ 10.07 $ 9.96 $ 10.02
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .17 .33 .38 .40 .40
Realized and unrealized gain (loss) on
investments--net (.18) (.13) (.07) .11 (.06)
--------- --------- --------- --------- ---------
Total from investment operations (.01) .20 .31 .51 .34
--------- --------- --------- --------- ---------
Less dividends from investment income--net (.17) (.33) (.38) (.40) (.40)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.69 $ 9.87 $ 10.00 $ 10.07 $ 9.96
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (.14%)++ 2.01% 3.17% 5.20% 3.45%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement 1.49%* 1.48% 1.19% 1.09% .89%
Net Assets: ========= ========= ========= ========= =========
Expenses 1.49%* 1.48% 1.19% 1.09% .97%
========= ========= ========= ========= =========
Investment income--net 3.39%* 3.31% 3.81% 3.98% 4.01%
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $ 3,786 $ 4,055 $ 5,331 $ 6,376 $ 7,874
Data: ========= ========= ========= ========= =========
Portfolio turnover 15.38% 18.60% 39.52% 35.67% 39.90%
========= ========= ========= ========= =========
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 2000
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Florida Limited Maturity Fund
Class B
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.86 $ 10.00 $ 10.07 $ 9.96 $ 10.02
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .15 .30 .35 .36 .37
Realized and unrealized gain (loss) on
investments--net (.17) (.14) (.07) .11 (.06)
--------- --------- --------- --------- ---------
Total from investment operations (.02) .16 .28 .47 .31
--------- --------- --------- --------- ---------
Less dividends from investment income--net (.15) (.30) (.35) (.36) (.37)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.69 $ 9.86 $ 10.00 $ 10.07 $ 9.96
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (.22%)++ 1.54% 2.80% 4.83% 3.08%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement 1.85%* 1.84% 1.54% 1.45% 1.24%
Net Assets: ========= ========= ========= ========= =========
Expenses 1.85%* 1.84% 1.54% 1.45% 1.32%
========= ========= ========= ========= =========
Investment income--net 3.04%* 2.95% 3.46% 3.63% 3.66%
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $ 7,342 $ 7,787 $ 8,014 $ 11,461 $ 13,690
Data: ========= ========= ========= ========= =========
Portfolio turnover 15.38% 18.60% 39.52% 35.67% 39.90%
========= ========= ========= ========= =========
<CAPTION>
Florida Limited Maturity Fund
Class C
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.80 $ 9.93 $ 10.00 $ 9.90 $ 10.01
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .16 .30 .33 .38 .36
Realized and unrealized gain (loss) on
investments--net (.18) (.13) (.07) .10 (.11)
--------- --------- --------- --------- ---------
Total from investment operations (.02) .17 .26 .48 .25
--------- --------- --------- --------- ---------
Less dividends from investment income--net (.16) (.30) (.33) (.38) (.36)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.62 $ 9.80 $ 9.93 $ 10.00 $ 9.90
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (.25%)++ 1.68% 2.65% 4.93% 2.48%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement 1.58%* 1.66% 1.29% 1.26% 1.21%
Net Assets: ========= ========= ========= ========= =========
Expenses 1.58%* 1.66% 1.29% 1.26% 1.23%
========= ========= ========= ========= =========
Investment income--net 3.33%* 3.06% 3.78% 3.83% 3.75%
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $ 461 $ 64 $ 1 $ 60 $ 52
Data: ========= ========= ========= ========= =========
Portfolio turnover 15.38% 18.60% 39.52% 35.67% 39.90%
========= ========= ========= ========= =========
<CAPTION>
Florida Limited Maturity Fund
Class D
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.86 $ 10.00 $ 10.06 $ 9.95 $ 10.01
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net .16 .32 .37 .39 .39
Realized and unrealized gain (loss) on
investments--net (.18) (.14) (.06) .11 (.06)
--------- --------- --------- --------- ---------
Total from investment operations (.02) .18 .31 .50 .33
--------- --------- --------- --------- ---------
Less dividends from investment income--net (.16) (.32) (.37) (.39) (.39)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.68 $ 9.86 $ 10.00 $ 10.06 $ 9.95
========= ========= ========= ========= =========
Total Investment Based on net asset value per share (.19%)++ 1.80% 3.17% 5.10% 3.35%
Return:** ========= ========= ========= ========= =========
Ratios to Average Expenses, net of reimbursement 1.58%* 1.57% 1.29% 1.19% .99%
Net Assets: ========= ========= ========= ========= =========
Expenses 1.58%* 1.57% 1.29% 1.19% 1.07%
========= ========= ========= ========= =========
Investment income--net 3.30%* 3.21% 3.71% 3.88% 3.91%
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands) $ 3,281 $ 2,522 $ 5,362 $ 7,733 $ 6,406
Data: ========= ========= ========= ========= =========
Portfolio turnover 15.38% 18.60% 39.52% 35.67% 39.90%
========= ========= ========= ========= =========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 2000
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust
(the "Trust") is registered under the Investment Company Act of 1940
as a non-diversified, open-end management investment company
consisting of two separate series: Merrill Lynch California Limited
Maturity Municipal Bond Fund ("California Limited Maturity Fund")
and Merrill Lynch Florida Limited Maturity Municipal Bond Fund
("Florida Limited Maturity Fund"). Each series of the Trust is
referred to herein as a "Fund." Each 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 Trust offers
four classes of shares under the Merrill Lynch Select Pricing SM
System. Shares of Class A and Class D are sold with a front-end
sales charge. Shares of Class B and Class C may be subject to a
contingent deferred sales charge. All classes of shares have
identical voting, dividend, liquidation and other rights and the
same terms and conditions, except that Class B, Class C and Class D
Shares bear certain expenses related to the account maintenance of
such shares, and Class B and Class C Shares also bear certain
expenses related to the distribution of such shares. Each class has
exclusive voting rights with respect to matters relating to its
account maintenance and distribution expenditures. The following is
a summary of significant accounting policies followed by the Trust.
(a) Valuation of investments--Municipal bonds and other portfolio
securities in which the Funds invest are traded primarily in the
over-the-counter municipal bond and money markets and are valued at
the last available bid price in the over-the-counter market or on
the basis of yield equivalents as obtained from one or more dealers
that make markets in the securities. Financial futures contracts and
options thereon, which are traded on exchanges, are valued at their
settlement prices as of the close of such exchanges. Short-term
investments with remaining maturities of sixty days or less are
valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the Board of Trustees of the Trust, including
valuations furnished by a pricing service retained by the Trust,
which may utilize a matrix system for valuations. The procedures of
the pricing service and its valuations are reviewed by the officers
of the Trust under the general supervision of the Trustees.
(b) Derivative financial instruments--Each Fund may engage in
various portfolio strategies to seek to increase its return by
hedging its portfolio against adverse movements in the debt markets.
Losses may arise due to changes in the value of the contract or if
the counterparty does not perform under the contract.
* Financial futures contracts--The Funds may purchase or sell
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at
a specific price or yield. Upon entering into a contract, the Funds
deposit and maintain as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Funds agree to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Funds as unrealized gains or losses. When
the contract is closed, the Funds record a realized gain or loss
equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
(c) Income taxes--It is each 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.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(f) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Trust 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. The Trust has also entered into Distribution
Agreements and Distribution Plans with Merrill Lynch Funds
Distributor ("MLFD" or the "Distributor"), a division of Princeton
Funds Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary
of Merrill Lynch Group, Inc.
FAM is responsible for the management of each Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of each Fund. For such
services, each Fund pays a monthly fee at the annual rate of .35% of
that Fund's average daily net assets.
For the six months ended January 31, 2000, FAM earned fees of
$13,682 from California Limited Maturity Fund, of which $7,818 was
voluntarily waived.
Pursuant to the Distribution Plans adopted by the Trust in
accordance with Rule 12b-1 under the Investment Company Act of 1940,
the Funds pay the Distributor ongoing account maintenance and
distribution fees. The Distributor voluntarily did not collect any
Class C distribution fees for the six months ended January 31, 2000.
The fees are accrued daily and paid monthly at annual rates based
upon the average daily net assets of the shares as follows:
Account
Maintenance Distribution
Fee Fee
Class B .15% .20%
Class C .15% .20%
Class D .10% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPF&S"), a subsidiary of ML &
Co., also provides account maintenance and distribution services to
the Trust. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the six months ended January 31, 2000, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions of $2 and $24,
respectively, on sales of the Florida Limited Maturity Fund's Class
D Shares.
MLPF&S received contingent deferred sales charges relating to
transactions in Class B Shares as follows:
Class B
Shares
California Limited Maturity Fund $294
Florida Limited Maturity Fund $189
Furthermore, MLPF&S received contingent deferred sales charges of
$976 relating to transactions subject to front end sales charge
waivers in Class D Shares in California Limited Maturity Fund.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Trust's transfer agent.
Accounting services are provided to the Trust by FAM at cost.
Certain officers and/or trustees of the Trust are officers and/or
directors of FAM, PSI, PFD, FDS, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended January 31, 2000 were as follows:
Purchases Sales
California Limited Maturity Fund $ 748,325 $1,799,034
Florida Limited Maturity Fund $2,846,630 $2,105,490
Net realized gains (losses) for the six months ended January 31,
2000 and net unrealized gains as of January 31, 2000 were as
follows:
Realized Unrealized
California Limited Maturity Fund Gains Gains
Long-term investments $ 26,839 $ 243,386
--------- ---------
Total $ 26,839 $ 243,386
========= =========
Realized Unrealized
Florida Limited Maturity Fund Gains (Losses) Gains
Long-term investments $ 10,933 $ 3,847
Short-term investments (1,581) --
--------- ---------
Total $ 9,352 $ 3,847
========= =========
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 2000
NOTES TO FINANCIAL STATEMENTS (continued)
As of January 31, 2000, net unrealized appreciation and the
aggregate cost of investments for Federal income tax purposes were
as follows:
Limited Gross Gross Net Aggregate
Maturity Unrealized Unrealized Unrealized Cost of
Fund Appreciation Depreciation Appreciation Investments
California $270,256 $ (26,870) $243,386 $ 6,522,823
Florida 134,197 (130,350) 3,847 14,682,451
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial
interest transactions were as follows:
For the Six For the
Months Ended Year Ended
January 31, 2000 July 31, 1999
California Limited Maturity Fund $(1,263,169) $ (741,002)
Florida Limited Maturity Fund 694,260 (4,046,299)
Transactions in shares of beneficial interest for each class were as
follows:
California Limited Maturity Fund
Class A Shares for the Six Months Dollar
Ended January 31, 2000 Shares Amount
Shares sold 12,258 $ 121,978
Shares issued to shareholders in
reinvestment of dividends 1,103 10,950
---------- -----------
Total issued 13,361 132,928
Shares redeemed (7,990) (78,778)
---------- -----------
Net increase 5,371 $ 54,150
========== ===========
California Limited Maturity Fund
Class A Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 7,460 $ 76,225
Shares issued to shareholders in
reinvestment of dividends 2,442 24,887
---------- -----------
Total issued 9,902 101,112
Shares redeemed (25,118) (253,933)
---------- -----------
Net decrease (15,216) $ (152,821)
========== ===========
California Limited Maturity Fund
Class B Shares for the Six Months Dollar
Ended January 31, 2000 Shares Amount
Shares sold 7,148 $ 70,766
Shares issued to shareholders in
reinvestment of dividends 3,253 32,275
---------- -----------
Total issued 10,401 103,041
Automatic conversion of shares (1,250) (12,427)
Shares redeemed (72,109) (714,530)
---------- -----------
Net decrease (62,958) $ (623,916)
========== ===========
California Limited Maturity Fund
Class B Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 101,369 $ 1,035,278
Shares issued to shareholders in
reinvestment of dividends 8,529 86,934
---------- -----------
Total issued 109,898 1,122,212
Shares redeemed (214,493) (2,187,382)
---------- -----------
Net decrease (104,595) $(1,065,170)
========== ===========
California Limited Maturity Fund
Class C Shares for the Six Months Dollar
Ended January 31, 2000 Shares Amount
Shares issued to shareholders in
reinvestment of dividends 56 $ 550
Shares redeemed (8,509) (84,238)
---------- -----------
Net decrease (8,453) $ (83,688)
========== ===========
California Limited Maturity Fund
Class C Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 3,433 $ 35,335
Shares issued to shareholders in
reinvestment of dividends 136 1,384
---------- -----------
Total issued 3,569 36,719
Shares redeemed (1,643) (16,810)
---------- -----------
Net increase 1,926 $ 19,909
========== ===========
California Limited Maturity Fund
Class D Shares for the Six Months Dollar
Ended January 31, 2000 Shares Amount
Shares sold 1 $ 15
Automatic conversion of shares 1,249 12,427
Shares issued to shareholders in
reinvestment of dividends 4,154 41,264
---------- -----------
Total issued 5,404 53,706
Shares redeemed (66,993) (663,421)
---------- -----------
Net decrease (61,589) $ (609,715)
========== ===========
California Limited Maturity Fund
Class D Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 417,306 $ 4,272,631
Shares issued to shareholders in
reinvestment of dividends 10,109 103,130
---------- -----------
Total issued 427,415 4,375,761
Shares redeemed (382,844) (3,918,681)
---------- -----------
Net increase 44,571 $ 457,080
========== ===========
Florida Limited Maturity Fund
Class A Shares for the Six Months Dollar
Ended January 31, 2000 Shares Amount
Shares sold 22,107 $ 216,101
Shares issued to shareholders in
reinvestment of dividends 1,118 10,913
---------- -----------
Total issued 23,225 227,014
Shares redeemed (43,683) (427,150)
---------- -----------
Net decrease (20,458) $ (200,136)
========== ===========
Florida Limited Maturity Fund
Class A Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 28,676 $ 289,114
Shares issued to shareholders in
reinvestment of dividends 3,544 35,627
---------- -----------
Total issued 32,220 324,741
Shares redeemed (153,998) (1,547,761)
---------- -----------
Net decrease (121,778) $(1,223,020)
========== ===========
Florida Limited Maturity Fund
Class B Shares for the Six Months Dollar
Ended January 31, 2000 Shares Amount
Shares sold 97,027 $ 945,380
Shares issued to shareholders in
reinvestment of dividends 5,394 52,689
---------- -----------
Total issued 102,421 998,069
Shares redeemed (134,193) (1,312,102)
---------- -----------
Net decrease (31,772) $ (314,033)
========== ===========
Florida Limited Maturity Fund
Class B Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 359,650 $ 3,629,639
Shares issued to shareholders in
reinvestment of dividends 11,689 117,363
---------- -----------
Total issued 371,339 3,747,002
Shares redeemed (383,122) (3,862,896)
---------- -----------
Net decrease (11,783) $ (115,894)
========== ===========
Florida Limited Maturity Fund
Class C Shares for the Six Months Dollar
Ended January 31, 2000 Shares Amount
Shares sold 46,402 $ 447,792
Shares issued to shareholders in
reinvestment of dividends 110 1,072
---------- -----------
Total issued 46,512 448,864
Shares redeemed (5,093) (49,400)
---------- -----------
Net increase 41,419 $ 399,464
========== ===========
Florida Limited Maturity Fund
Class C Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 14,831 $ 148,588
Shares issued to shareholders in
reinvestment of dividends 114 1,132
---------- -----------
Total issued 14,945 149,720
Shares redeemed (8,565) (85,527)
---------- -----------
Net increase 6,380 $ 64,193
========== ===========
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
Florida Limited Maturity Fund
Class D Shares for the Six Months Dollar
Ended January 31, 2000 Shares Amount
Shares sold 187,234 $ 1,822,063
Shares issued to shareholders in
reinvestment of dividends 1,144 11,165
---------- -----------
Total issued 188,378 1,833,228
Shares redeemed (105,428) (1,024,263)
---------- -----------
Net increase 82,950 $ 808,965
========== ===========
Florida Limited Maturity Fund
Class D Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 84,836 $ 854,705
Shares issued to shareholders in
reinvestment of dividends 3,256 32,702
---------- -----------
Total issued 88,092 887,407
Shares redeemed (368,434) (3,658,985)
---------- -----------
Net decrease (280,342) $(2,771,578)
========== ===========
5. Capital Loss Carryforward:
At July 31, 1999, each Fund of the Trust had an approximate net
capital loss carryforward as follows: $260,000 in the California
Limited Maturity Fund, all of which expires in 2004; and $631,000 in
the Florida Limited Maturity Fund, of which $431,000 expires in 2003
and $200,000 expires in 2004. These amounts will be available to
offset like amounts of any future taxable gains.
