[LOGO] CMA(R)
CMA ARIZONA
MUNICIPAL MONEY FUND
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Annual Report
March 31, 1999
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[LOGO] Merrill Lynch
[GRAPHIC OMITTED]
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TO OUR SHAREHOLDERS:
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For the year ended March 31, 1999, CMA Arizona Municipal Money Fund paid
shareholders a net annualized yield of 2.73%.* As of March 31, 1999, the Fund's
7-day yield was 2.31%.
Economic Environment
The state of Arizona's economy continued to prosper in 1998 because of a number
of tax cuts and steady population inflows. Specifically, the Arizona legislature
reduced the corporate tax rate from 9% to 8% and cut personal income taxes again
for a total across-the-board decrease of 31% over the past six years. This led
to strong consumer spending, resulting in a 6.6% year-over-year increase in
retail sales.
Arizona's housing market also performed well with a record 43,000 single-family
housing units built in 1998. The primary factor for the state's housing boom
continued to be strong job growth fueled by a healthy economy. This also
resulted in more people moving and staying in the area for longer periods of
time than has been the norm. For example, more than 85,000 jobs were created in
Arizona during 1998. Nonetheless, forecasters are expecting the state's economy
to moderate in 1999 with indicators such as single-family housing and employment
showing weakness. State economists expect a combination of slower global growth,
more restrictive financial conditions and a slowdown in corporate profits to be
the main contributors to this slowdown. In addition, state lawmakers may have to
cut at least $150 million in spending to balance next year's budget. Preliminary
budget figures show a shortfall caused in part by a reduction in tax revenues
from the expected economic slowdown. Currently, lawmakers are in the midst of
deciding what state-funded programs will have to be eliminated and if the state
will need to do any short-term borrowing. Complicating the issue are pledges by
Governor Hull to trim or eliminate the state's portion of the vehicle license
tax, eliminating up to $95 million in revenue.
Investment Strategy
During the first half of the six-month period ended March 31, 1999, we
maintained a slightly bullish investment strategy for CMA Arizona Municipal
Money Fund. The basis for this strategy was twofold. First, as the period began,
a growing number of economic statistics, which reflected a somewhat weaker
domestic economy, increased the probability that the Federal Reserve Board would
have to ease monetary policy again. Second, it was our opinion that the expected
lack of short-term tax-exempt issuance during this period would cause yields on
fixed-rate securities to outperform those on variable-rate demand obligations.
Furthermore, as the period progressed, more evidence that problems in world
financial markets and economies were worsening caused the yield on the one-year
US Treasury bill to trade below 4.0% during early October 1998. Thus, we
continued to increase the Fund's percentage of fixed-rate product when prudent
in order to lock in more attractive yields.
The Federal Reserve Board eased monetary policy by lowering the Federal Funds
rate from 5.25% to 4.75% with two equal moves of 25 basis points (0.25%) early
in the period. However, as 1999 began, it became apparent that previous interest
rate cuts had a favorable effect on the world's financial markets and that the
probability of a full-blown
* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after all
expenses.
1
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recession was lessening. Moreover, because of an increasing amount of domestic
economic data depicting a robust economy and subdued inflation, we expected the
Federal Reserve Board to keep monetary policy on hold for the near term. We also
believed that because of traditional cash inflows during January and February,
yields on one-year fixed-rate issues would provide little value to extending the
portfolio's average maturity significantly.
In view of these factors, we limited our purchases of fixed-rate securities to
tax-exempt commercial paper maturing in three months-four months that provided
comparable yields. We maintained this slightly bullish posture until the end of
the period when we began to increase the Fund's percentage in variable-rate
demand obligations in order to seek to take advantage of the expected spike in
yields on these issues from cash outflows during tax time. The Fund, which began
the period with an average portfolio maturity in the 65-day range, concluded the
period in the 35-day range. For the six-month period ended March 31, 1999, the
state of Arizona's issuance totaled $4.9 million, a significant decrease from
the $68.5 million issued during the previous six-month period.
In Conclusion
We thank you for your support of CMA Arizona Municipal Money Fund, and we look
forward to serving your investment needs in the future.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Trustee
/s/ Vincent R. Giordano
Vincent R. Giordano
Senior Vice President
/s/ Darrin J. SanFillippo
Darrin J. SanFillippo
Vice President and Portfolio Manager
May 10, 1999
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After more than 20 years of service, Arthur Zeikel recently retired as Chairman
of Merrill Lynch Asset Management, L.P. (MLAM). Mr. Zeikel served as President
of MLAM from 1977 to 1997 and as Chairman since December 1997. Mr. Zeikel is one
of the country's most respected leaders in asset management and presided over
the growth of Merrill Lynch's asset management business. During his tenure,
client assets under management grew from $300 million to over $500 billion. Mr.
Zeikel will remain on CMA Arizona Municipal Money Fund's Board of Trustees. We
are pleased to announce that Terry K. Glenn has been elected President and
Trustee of the Fund. Mr. Glenn has held the position of Executive Vice President
of MLAM since 1983.
Mr. Zeikel's colleagues at MLAM join the Fund's Board of Trustees in wishing him
well in his retirement from Merrill Lynch and are pleased that he will continue
as a member of the Fund's Board of Trustees.
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CMA ARIZONA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1999 (IN THOUSANDS)
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<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
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<S> <C> <C> <C>
Arizona--98.4% Arizona Educational Loan Marketing Corporation, Educational
Loan Revenue Bonds, VRDN, AMT, Series A (a):
$ 5,400 3.10% due 3/01/2015 (c) ........................................................... $ 5,400
3,200 3.10% due 12/01/2020 .............................................................. 3,200
2,400 Arizona Health Facilities Authority, Hospital System Revenue Bonds
(Northern Arizona Healthcare), VRDN, Series B, 3% due 10/01/2026 (a)(c) ............. 2,400
290 Arizona Health Facilities Authority Revenue Bonds (Arizonac Volunteer
Hospital Federation), VRDN, Series B, 3% due 10/01/2015 (a)(d) ...................... 290
Arizona School District, TAN, Financing Program, COP:
16,000 Series A, 4.10% due 7/30/1999 ..................................................... 16,027
3,500 Series B, 4.20% due 7/30/1999 ..................................................... 3,514
1,500 Arizona State Transportation Board, Excise Tax Revenue Bonds
(Maricopa County Regional Area Road Fund), 6.90% due 7/01/1999 (c) .................. 1,513
2,260 Arizona State Transportation Board, Excise Tax Revenue Refunding Bonds
(Maricopa County Regional Area Road Fund), Series B, 5.50% due 7/01/1999 (b) ........ 2,271
6,000 Cochise County, Arizona, Pollution Control Corporation, Solid Waste Disposal
Revenue Bonds (Arizona Electric Power Co-Op Inc. Project), AMT, 2.50% due
9/01/1999 ........................................................................... 6,000
Coconino County, Arizona, Pollution Control Corporation Revenue Bonds,
VRDN, AMT (a):
16,870 (Arizona Public Service Co. Project), 2.95% due 11/01/2033 ........................ 16,870
17,500 (Arizona Public Service--Navajo Project), Series A, 3.25% due 10/01/2029 .......... 17,500
6,710 (Pollution Control--Arizona Public Service), Series A, 2.95% due 12/01/2031 ....... 6,710
1,000 Coconino County, Arizona, Unified School District No. 001 (Flagstaff), GO,
Refunding, 7.80% due 7/01/1999 (b) .................................................. 1,012
4,000 Eloy, Arizona, IDA, Revenue Bonds (Marley Cooling Project),
VRDN, AMT, 3.05% due 8/01/2020 (a) .................................................. 4,000
4,400 Maricopa County, Arizona, IDA, Hospital Facility Revenue Refunding Bonds
(Samaritan Health Service Hospital), VRDN, Series B2, 3% due 12/01/2008 (a)(c) ...... 4,400
2,000 Maricopa County, Arizona, Pollution Control Corporation, PCR, Refunding
(Arizona Public Service Co.), VRDN, Series C, 2.85% due 5/01/2029 (a) ............... 2,000
</TABLE>
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Portfolio Abbreviations for CMA Arizona Municipal Money Fund
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
CP Commercial Paper
DATES Daily Adjustable Tax-Exempt Securities
GO General Obligation Bonds
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
TAN Tax Anticipation Notes
VRDN Variable Rate Demand Notes
3
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CMA ARIZONA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1999 (CONTINUED) (IN THOUSANDS)
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<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
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<S> <C> <C> <C>
Arizona Maricopa County, Arizona, Pollution Control Corporation, PCR, Refunding
(continued) (Southern California Education--Palo Verde), CP:
$ 3,000 Series E, 2.80% due 4/14/1999 ..................................................... $ 3,000
4,000 Series F, 2.90% due 5/12/1999 ..................................................... 4,000
2,025 Maricopa County, Arizona, School District No. 006 (Washington Elementary,
Projects of 1996), GO, Series B, 6% due 7/01/1999 (d) ............................... 2,037
1,000 Maricopa County, Arizona, School District No. 028 (Kyrene Elementary), COP,
4.25% due 1/01/2000 (b) ............................................................. 1,008
4,815 Maricopa County, Arizona, Unified High School District No. 210 (Phoenix
Project of 1995), GO, Series C, 4.50% due 7/01/1999 ................................. 4,823
1,085 Maricopa County, Arizona, Unified School District No. 48 (Scottsdale), GO,
6.50% due 7/01/1999 ................................................................. 1,093
1,500 Maricopa County, Arizona, Unified School District No. 097 (Deer Valley
Project of 1996), GO, Series D, 5.625% due 7/01/1999 (d) ............................ 1,509
Mesa, Arizona, Municipal Development Corporation, CP:
2,000 2.65% due 5/13/1999 ............................................................... 2,000
1,200 Series B, 2.95% due 6/16/1999 ..................................................... 1,200
2,090 Mohave County, Arizona, IDA, IDR (Citizens Utilities Company Project), VRDN,
AMT, 3% due 5/01/2032 (a) ........................................................... 2,090
Mohave County, Arizona, IDA, IDR (Citizens Utilities), CP:
5,000 2.95% due 4/08/1999 ............................................................... 5,000
6,100 2.75% due 5/10/1999 ............................................................... 6,100
1,400 3% due 5/18/1999 .................................................................. 1,400
4,000 3.20% due 6/23/1999 ............................................................... 4,000
2,000 Navajo County, Arizona, IDA, IDR (Citizens Utilities Company Project), VRDN,
AMT, 3% due 5/01/2032 (a) ........................................................... 2,000
7,000 Phoenix, Arizona, Civic Improvement Corporation, Wastewater Systems Lease
Revenue Bonds (Tender Option Certificates), VRDN, Series BTP-250,
3.20% due 7/01/2023 (a) ............................................................. 7,000
1,000 Phoenix, Arizona, GO, Refunding, Series A, 6% due 7/01/1999 ......................... 1,006
8,420 Phoenix, Arizona, IDA, M/F Housing Revenue Bonds (Mariners Pointe Apartments
Project), VRDN, AMT, Series A, 3.25% due 10/01/2023 (a) ............................. 8,420
Phoenix, Arizona, IDA, M/F Housing Revenue Refunding Bonds, VRDN (a):
1,000 (Bell Square Apartments Project), 3.15% due 6/01/2025 ............................. 1,000
2,475 (Lynwood Apartments Project), 3.05% due 10/01/2025 ................................ 2,475
4,000 (Paradise Lakes Apartments Project), 3.15% due 7/01/2025 .......................... 4,000
3,915 Phoenix, Arizona, IDA, Revenue Bonds (Laich Industries Corp.
Project), VRDN, AMT, 3.20% due 9/01/2016 (a) ........................................ 3,915
2,500 Phoenix, Arizona, IDA, Revenue Refunding Bonds (VAW of America Inc.), VRDN,
3.15% due 2/01/2012 (a) ............................................................. 2,500
1,000 Phoenix, Arizona, Street and Highway User Revenue Refunding Bonds,
5.75% due 7/01/1999 ................................................................. 1,007
3,380 Pima County, Arizona, GO, Refunding, 4.75% due 7/01/1999 (c) ........................ 3,396
1,000 Pima County, Arizona, IDA, IDR, Refunding (Brush Wellman Inc.
Project), VRDN, 3.15% due 9/01/2009 (a) ............................................ 1,000
</TABLE>
4
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CMA ARIZONA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1999 (CONTINUED) (IN THOUSANDS)
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<TABLE>
<CAPTION>
Face Value
State Amount Issue (Note 1a)
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<S> <C> <C> <C>
Arizona Pima County, Arizona, IDA, M/F Housing Revenue Refunding Bonds, VRDN (a):
(concluded) $ 6,790 (Eastside Place Apartments), 3.10% due 5/01/2027 .................................. $ 6,790
5,000 (La Cholla Apartments Project), 3.15% due 12/01/2025 .............................. 5,000
1,400 Pinal County, Arizona, IDA, PCR (Newmont), DATES, VRDN, Series A,
2.85% due 12/01/2009 (a) ............................................................ 1,400
5,000 Santa Cruz County, Arizona, IDA, IDR (Citizens Utilities),
CP, 2.80% due 5/10/1999 ............................................................. 5,000
1,015 Scottsdale, Arizona, Preservation Authority, Excise Tax Revenue Bonds,
5% due 7/01/1999 (d) ................................................................ 1,018
9,200 Tempe, Arizona, Excise Tax Revenue Bonds, VRDN, 2.90% due 7/01/2023 (a) ............. 9,200
1,000 Tucson, Arizona, Airport Authority Inc., Special Revenue
Bonds (LearJet Inc.), VRDN, AMT, Series A, 3.15% due 9/01/2028 (a) .................. 1,000
3,000 Yavapai County, Arizona, IDA, IDR (Citizens Utilities), CP, 2.80%
due 4/07/1999 ....................................................................... 3,000
2,400 Yavapai County, Arizona, IDA, IDR (Citizens Utilities), CP,
AMT, 2.80% due 5/11/1999 ............................................................ 2,400
3,725 Yuma, Arizona, IDA, M/F Housing Revenue Refunding Bonds (El
Encanto Apartments), VRDN, Series A, 3.10% due 11/01/2008 (a) ....................... 3,725
2,000 Yuma County, Arizona, IDA, IDR (Meadowcraft Inc. Project), VRDN, AMT,
3.15% due 11/01/2012 (a) ............................................................ 2,000
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Puerto Rico-- 800 Puerto Rico Commonwealth, Government Development Bank, Revenue
1.0% Refunding Bonds, VRDN, 2.75% due 12/01/2015 (a)(c) .................................. 800
1,300 Puerto Rico Commonwealth, Highway and Transportation Authority, Highway
Revenue Refunding Bonds, Series X, 2.75% due 7/01/1999 .............................. 1,300
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Total Investments (Cost--$212,719*)--99.4% .......................................... 212,719
Other Assets Less Liabilities--0.6% ................................................. 1,299
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Net Assets--100.0% .................................................................. $214,018
========
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</TABLE>
(a) The interest rate is subject to change periodically based on certain
indexes. The interest rate shown is the rate in effect at March 31, 1999.
(b) AMBAC Insured.
(c) MBIA Insured.
(d) FGIC Insured.
* Cost for Federal income tax purposes.
See Notes to Financial Statements.
5
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CMA ARIZONA MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1999
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Assets:
Investments, at value (identified cost--
$212,718,938) (Note 1a) .......................... $212,718,938
Cash ............................................. 83,284
Interest receivable .............................. 1,420,327
Prepaid registration fees and other
assets (Note 1d) ................................. 5,312
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Total assets ..................................... 214,227,861
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Liabilities:
Payables:
Investment adviser (Note 2) .................... $ 97,767
Distributor (Note 2) ........................... 65,763 163,530
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Accrued expenses and other liabilities ........... 46,782
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Total liabilities ................................ 210,312
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Net Assets ....................................... $214,017,549
============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par
value, unlimited number of shares authorized ..... $ 21,406,799
Paid-in capital in excess of par ................. 192,661,126
Accumulated realized capital losses--
net (Note 4) ..................................... (50,376)
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Net Assets--Equivalent to $1.00 per share
based on 214,067,990 shares of beneficial
interest outstanding ............................. $214,017,549
============
See Notes to Financial Statements.
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CMA ARIZONA MUNICIPAL MONEY FUND
STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1999
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Investment Income (Note 1c):
Interest and amortization of premium earned ...... $ 7,010,993
Expenses:
Investment advisory fees (Note 2) ................ $ 1,025,182
Distribution fees (Note 2) ....................... 252,963
Professional fees ................................ 55,471
Accounting services (Note 2) ..................... 45,973
Registration fees (Note 1d) ...................... 43,167
Transfer agent fees (Note 2) ..................... 24,976
Custodian fees ................................... 19,568
Printing and shareholder reports ................. 15,142
Pricing fees ..................................... 4,271
Trustees' fees and expenses ...................... 1,448
Other ............................................ 2,761
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Total expenses ................................... 1,490,922
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Investment income--net ........................... 5,520,071
Realized Loss on Investments--Net (Note 1c) ...... (8,913)
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Net Increase in Net Assets Resulting
from Operations .................................. $ 5,511,158
============
See Notes to Financial Statements.
6
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CMA ARIZONA MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
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For the Year Ended March 31,
-------------------------------
Increase (Decrease) in Net Assets: 1999 1998
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Operations:
Investment income--net ....................... $ 5,520,071 $ 5,310,413
Realized loss on investments--net ............ (8,913) (5,210)
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Net increase in net assets resulting
from operations .............................. 5,511,158 5,305,203
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Dividends to Shareholders (Note 1e):
Investment income--net ....................... (5,520,071) (5,310,413)
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Net decrease in net assets resulting
from dividends to shareholders ............... (5,520,071) (5,310,413)
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Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares ............. 718,009,373 823,452,683
Net asset value of shares issued
to shareholders in reinvestment of
dividends (Note 1e) .......................... 5,520,081 5,310,334
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723,529,454 828,763,017
Cost of shares redeemed ...................... (722,779,681) (785,032,055)
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Net increase in net assets derived
from beneficial interest transactions ........ 749,773 43,730,962
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Net Assets:
Total increase in net assets ................. 740,860 43,725,752
Beginning of year ............................ 213,276,689 169,550,937
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End of year .................................. $ 214,017,549 $ 213,276,689
============= =============
See Notes to Financial Statements.
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CMA ARIZONA MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
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<TABLE>
<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: 1999 1998 1997 1996 1995
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<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 ................ 2.73% 3.05% 2.86% 3.35% 2.83%
========= ========= ========= ========= =========
Ratios to Average Net Assets:
Expenses, net of reimbursement ......... .73% .74% .76% .58% .54%
========= ========= ========= ========= =========
Expenses ............................... .73% .74% .76% .77% .85%
========= ========= ========= ========= =========
Investment income--net ................. 2.69% 2.99% 2.80% 3.27% 2.84%
========= ========= ========= ========= =========
Supplemental Data:
Net assets, end of year
(in thousands) ......................... $ 214,018 $ 213,277 $ 169,551 $ 137,520 $ 103,717
========= ========= ========= ========= =========
</TABLE>
+ Amount is less than $.01 per share.
See Notes to Financial Statements.
7
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CMA ARIZONA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
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1. Significant Accounting Policies:
CMA Arizona Municipal Money Fund (the "Fund") is part of CMA Multi-State
Municipal Series Trust (the "Trust"). The Fund is registered under the
Investment Company Act of 1940 as a non-diversified, open-end management
investment company. The Fund's financial statements are prepared in accordance
with generally accepted accounting principles which may require the use of
management accruals and estimates. The following is a summary of significant
accounting policies followed by the Fund.
(a) Valuation of investments--Investments are valued at amortized cost, which
approximates market value. For the purpose of valuation, the maturity of a
variable rate demand instrument is deemed to be the next coupon date on which
the interest rate is to be adjusted. In the case of a floating rate instrument,
the remaining maturity is the demand notice payment period.
(b) Income taxes--It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no Federal income tax provision is required.
(c) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Interest income (including amortization of premium and discount) is recognized
on the accrual basis. Realized gains and losses on security transactions are
determined on the identified cost basis.
(d) Prepaid registration fees--Prepaid registration fees are charged to expense
as the related shares are issued.
(e) Dividends and distributions to shareholders--The Fund declares dividends
daily and reinvests daily such dividends (net of non-resident alien tax and
back-up withholding tax withheld) in additional fund shares at net asset value.
Dividends are declared from the total of net investment income, excluding
discounts earned other than original issue discounts. Net realized capital
gains, if any, are normally distributed annually after deducting prior years'
loss carryforward. The Fund may distribute capital gains more frequently than
annually in order to maintain the Fund's net asset value at $1.00 per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML &
Co."), which is the limited partner.
FAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services, the Fund pays a monthly fee
based upon the average daily value of the Fund's net assets, at the following
annual rates: 0.50% of the first $500 million of average daily net assets;
0.425% of average daily net assets in excess of $500 million but not exceeding
$1 billion; and 0.375% of average daily net assets in excess of $1 billion.
Pursuant to the Distribution and Shareholder Servicing Plan in compliance with
Rule 12b-1 under the Investment Company Act of 1940, Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLPF&S") receives a distribution fee from the
Fund at the end of each month at the annual rate of 0.125% of average daily net
assets of the Fund. The distribution fee is to compensate MLPF&S financial
consultants and other directly involved branch office personnel for selling
shares of the Fund and for providing direct personal
8
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CMA ARIZONA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
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services to shareholders. The distribution fee is not compensation for the
administrative and operational services rendered to the Fund by MLPF&S in
processing share orders and administering shareholder accounts.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is
the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or directors of
FAM, PSI, FDS, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the period corresponds to the
amounts included in the Statements of Changes in Net Assets for net proceeds
from sale of shares and cost of shares redeemed, respectively, since shares are
recorded at $1.00 per share.
4. Capital Loss Carryforward:
At March 31, 1999, the Fund had a net capital loss carryforward of approximately
$47,000, of which $6,000 expires in 2004, $30,000 expires in 2005, $6,000
expires in 2006 and $5,000 expires in 2007. This amount will be available to
offset like amounts of any future taxable gains.
9
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CMA ARIZONA MUNICIPAL MONEY FUND
INDEPENDENT AUDITORS' REPORT
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The Board of Trustees and Shareholders, CMA Arizona 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 Arizona Municipal Money Fund of CMA
Multi-State Municipal Series Trust as of March 31, 1999, the related statements
of operations for the year then ended and changes in net assets for each of the
years in the two-year period then ended, and the financial highlights for each
of the years in the five-year period then ended. These financial statements and
the financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at March
31, 1999 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 Arizona
Municipal Money Fund of CMA Multi-State Municipal Series Trust as of March 31,
1999, the results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
May 10, 1999
- --------------------------------------------------------------------------------
IMPORTANT TAX INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
All of the net investment income distributions paid daily by CMA Arizona
Municipal Money Fund of CMA Multi-State Municipal Series Trust during its
taxable year ended March 31, 1999 qualify as tax-exempt interest dividends for
Federal income tax purposes.
Additionally, there were no capital gains distributed by the Fund during its
taxable year ended March 31, 1999.
Please retain this information for your records.
10
<PAGE>
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CMA ARIZONA 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
Robert Harris--Secretary
- --------------------------------------------------------------------------------
Gerald M. Richard, Treasurer of CMA Arizona Municipal Money Fund has recently
retired. His colleagues at Merrill Lynch Asset Management, L.P. join the Fund's
Board of Trustees in wishing Mr. Richard well in his retirement.
- --------------------------------------------------------------------------------
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].
11
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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 Arizona
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011 #16714--3/99
[LOGO] Printed on post-consumer recycled paper
