UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number 811-3111
Name of Fund: CMA Tax-Exempt Fund
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President,
CMA Tax-Exempt Fund, 800 Scudders Mill Road, Plainsboro, NJ, 08536.
Mailing address: P.O. Box 9011, Princeton, NJ, 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 03/31/03
Date of reporting period: 04/01/02 - 3/31/03
Item 1 - Attach shareholder report
(BULL LOGO)
Merrill Lynch Investment Managers
Annual Report
March 31, 2003
CMA Tax-Exempt Fund
www.mlim.ml.com
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 Tax-Exempt Fund
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the year ended March 31, 2003, CMA Tax-Exempt Fund paid
shareholders a net annualized yield of .93%*. As of March 31, 2003,
the Fund's 7-day yield was .73%.
Economic Environment
During the six-month period ended March 31, 2003, equity and fixed
income markets and the domestic economy continued to be influenced
strongly by developments outside of the financial sector. The
uncertainty that surrounded the effectiveness of the weapons
inspections by the United Nations and the eventual onset of war with
Iraq in mid-March weighed heavily on consumer and corporate
spending. Despite the increased volatility in the equity markets
because of geopolitical uncertainty, the Dow Jones Industrial
Average and the NASDAQ Composite Index were able to post positive
gains for the period. However, by March 31, 2003, both indexes were
well off the highs reached in late November 2002.
Fixed income investors favored the very short end of the U.S.
Treasury yield curve because of its relative safety. Six-month
Treasury bills and two-year Treasury notes experienced solid gains
that lowered yields on these instruments 43 basis points (.43%) and
31 basis points, respectively. Finally, the Federal Open Market
Committee has met four times since September 30, 2002, lowering
interest rates 50 basis points at its meeting on November 6, 2002
and bringing the Federal Funds borrowing rate to a historic low of
1.25%. This was done in response to a weakening economy, uncertainty
over the war with Iraq and possible deflationary pressures.
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
Investment Strategy
During the fiscal year ended March 31, 2003, the short-term
municipal market experienced two distinctly different interest rate
environments, both driven by excesses in supply and demand. Most of
the first half of the fiscal year was driven by heavy new-issue
supply and reduced demand in an environment that was perceived to be
one of moderately stronger economic growth. The State of California
and the Department of Water Resources for California both sold multi-
billion dollar issues, while other states and cities also increased
their borrowing because of lower tax revenues from the sluggish
economy. Yields on one-year notes, which began the fiscal year in
the 1.40%--1.45% range, rose to the 1.75%--1.90% range by the
beginning of October 2002, with some smaller issues yielding more
than 2%. This spike in interest rates was seen as opportunity to
extend the Fund's average portfolio maturity by increasing the fixed
rate note sector to 25% of assets and maintaining an above-neutral
average maturity in the 50-day--60-day range. This strategy proved
to be beneficial as the second half of the fiscal year was
characterized by reduced supply and increased demand for short-term
securities. Fixed rate notes outperformed yields on variable rate
securities as short-term interest rates fell as a result of the
Federal Reserve Board's easing of monetary policy and the flight to
quality. At the close of the period, yields on variable rate issues
were in the 1.10% range, while fixed rate notes yielded
approximately the same levels. Thus, our position of fixed rate
notes purchased at higher yields earlier in the period provided a
good core for the Fund as interest rates fell. By March 31, 2003,
the average portfolio maturity was allowed to drift into a more
neutral range of 40 days--45 days as the flat short-term yield curve
provided little incentive to extend the maturity or purchase longer-
dated fixed rate notes.
Going forward, we are entering a difficult time for the short-term
market as we need to assess the impact of the war in Iraq and the
economic response that will ultimately affect interest rates.
Additionally, with states and municipalities having increased budget
deficits, short-term borrowing in our market will increase
dramatically, especially the State of California. We must carefully
review both the credit and market implications as we devise our
portfolio strategy in the coming months.
In Conclusion
On February 13, 2003, CMA Tax-Exempt Fund converted from a stand-
alone investment company to a "feeder" fund that seeks to achieve
its investment objective by investing all of its assets in Master
Tax-Exempt Trust, which has the same investment objective as the
Fund. All investments will be made at the Trust level. This
structure is sometimes called a "master/feeder" structure.
We thank you for your continued support of CMA Tax-Exempt Fund, and
we look forward to serving your investment needs in the months and
years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Trustee
(Kenneth A. Jacob)
Kenneth A. Jacob
Senior Vice President
(John M. Loffredo)
John M. Loffredo
Senior Vice President
(Peter J. Hayes)
Peter J. Hayes
Vice President and
Portfolio Manager
April 23, 2003
CMA TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 2003
Assets:
Investments in Master Tax-Exempt Trust, at value
(identified cost--$10,591,079,299) $10,591,079,299
Prepaid registration fees and other assets 499,678
---------------
Total assets 10,591,578,977
---------------
Liabilities:
Payables:
Distributor $ 1,804,374
Administrator 1,729,459 3,533,833
---------------
Accrued expenses 251,349
---------------
Total liabilities 3,785,182
---------------
Net Assets $10,587,793,795
===============
Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares
authorized $ 1,058,897,231
Paid-in capital in excess of par 9,529,110,311
Accumulated realized capital losses on investments from the Trust--net (213,747)
---------------
Net Assets--Equivalent to $1.00 per share based on 10,588,972,314 shares of
beneficial interest outstanding $10,587,793,795
===============
See Notes to Financial Statements.
CMA TAX-EXEMPT FUND
STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2003++
Investment Income:
Interest and amortization of premium and discount earned $ 137,549,109
Net investment income allocated from the Trust:
Interest 16,809,432
Expenses (2,870,774)
---------------
Total income and net investment income from the Trust 151,487,767
---------------
Expenses:
Investment advisory fees $ 34,799,724
Distribution fees 13,030,962
Administration fees 2,620,623
Transfer agent fees 1,153,787
Accounting services 1,065,487
Registration fees 951,460
Custodian fees 202,340
Professional fees 155,540
Printing and shareholder reports 122,728
Trustees' fees and expenses 55,736
Pricing fees 49,346
Other 100,628
---------------
Total expenses 54,308,361
---------------
Investment income--net 97,179,406
---------------
Realized Gain (Loss) on Investments and from the Trust--Net:
Realized gain (loss):
Investments--net (344,196)
The Trust--net 291,802
---------------
Total realized loss on investments and from the Trust--net (52,394)
---------------
Net Increase in Net Assets Resulting from Operations $ 97,127,012
===============
++On February 13, 2003, the Fund converted from a stand-alone
investment company to a "feeder" fund that seeks to achieve its
investment objective by investing all of its assets in the Trust,
which has the same investment objective as the Fund. All investments
will be made at the Trust level. This structure is sometimes called
a "master/feeder" structure.
See Notes to Financial Statements.
CMA TAX-EXEMPT FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended March 31,
2003++ 2002
Increase (Decrease) in Net Assets:
Operations:
Investment income--net $ 97,179,406 $ 183,685,929
Realized gain (loss) on investments and from the Trust--net (52,394) 576,159
--------------- ---------------
Net increase in net assets resulting from operations 97,127,012 184,262,088
--------------- ---------------
Dividends to Shareholders:
Dividends to shareholders from investment income--net (97,179,406) (183,685,929)
--------------- ---------------
Beneficial Interest Transactions:
Net proceeds from sale of shares 32,237,106,470 32,372,343,021
Value of shares issued to shareholders in reinvestment of dividends 97,182,443 183,691,543
--------------- ---------------
32,334,288,913 32,556,034,564
Cost of shares redeemed (32,292,069,189) (32,390,022,350)
--------------- ---------------
Net increase in net assets derived from beneficial interest transactions 42,219,724 166,012,214
--------------- ---------------
Net Assets:
Total increase in net assets 42,167,330 166,588,373
Beginning of year 10,545,626,465 10,379,038,092
--------------- ---------------
End of year $10,587,793,795 $10,545,626,465
=============== ===============
++On February 13, 2003, the Fund converted from a stand-alone
investment company to a "feeder" fund that seeks to achieve its
investment objective by investing all of its assets in the Trust,
which has the same investment objective as the Fund. All investments
will be made at the Trust level. This structure is sometimes called
a "master/feeder" structure.
See Notes to Financial Statements.
CMA TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
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: 2003++++ 2002 2001 2000 1999
Per Share Operating Performance:
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- ----------- ----------- -----------
Investment income--net .01 .02 .03 .03 .03
Realized and unrealized gain (loss) on
investments and from the Trust--net --++ --++ --++ --++ --++
----------- ----------- ----------- ----------- -----------
Total from investment operations .01 .02 .03 .03 .03
----------- ----------- ----------- ----------- -----------
Less dividends from investment income--net (.01) (.02) (.03) (.03) (.03)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== =========== ===========
Total Investment Return .93% 1.76% 3.51% 2.91% 2.87%
=========== =========== =========== =========== ===========
Ratios to Average Net Assets:
Expenses .55%+++ .55% .54% .54% .55%
=========== =========== =========== =========== ===========
Investment income--net .93% 1.78% 3.46% 2.87% 2.83%
=========== =========== =========== =========== ===========
Supplemental Data:
Net assets, end of year (in thousands) $10,587,794 $10,545,626 $10,379,038 $10,188,792 $ 9,730,131
=========== =========== =========== =========== ===========
++Amount is less than $.01 per share.
++++On February 13, 2003, the Fund converted from a stand-alone
investment company to a "feeder" fund that seeks to achieve its
investment objective by investing all of its assets in the Trust,
which has the same investment objective as the Fund. All investments
will be made at the Trust level. This structure is sometimes called
a "master/feeder" structure.
+++Includes the Fund's share of the Trust's allocated expenses.
See Notes to Financial Statements.
CMA TAX-EXEMPT FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA Tax-Exempt Fund (the "Fund") is registered under the Investment
Company Act of 1940 as a no load, diversified, open-end management
investment company. On February 13, 2003, the Fund converted from a
stand-alone investment company to a "feeder" fund that seeks to
achieve its investment objective by investing all of its assets in
Master Tax-Exempt Trust (the "Trust"), which has the same investment
objective as the Fund. All investments will be made at the Trust
level. This structure is sometimes called a "master/feeder"
structure. The value of the Fund's investment in the Trust reflects
the Fund's proportionate interest in the net assets of the Trust.
The performance of the Fund is directly affected by the performance
of the Trust. The financial statements of the Trust, including the
Schedule of Investments, are included elsewhere in this report and
should be read in conjunction with the Fund's financial statements.
The Fund's financial statements are prepared in conformity with
accounting principles generally accepted in the United States of
America, which may require the use of management accruals and
estimates. The percentage of the Trust owned by the Fund at March
31, 2003 was approximately 100%. The following is a summary of
significant accounting policies followed by the Fund.
(a) Valuation of investments--The Fund records its investments in
the Trust at fair value. Valuation of securities held by the Trust
is discussed in Note 1a of the Trust's Notes to Financial
Statements, which are included elsewhere in this report.
(b) Investment income and expenses--The Fund records daily its
proportionate share of the Trust's income, expenses and realized and
unrealized gains and losses. In addition, the Fund accrues its own
expenses. When the Fund was a stand-alone investment company,
realized gains and losses on security transactions were determined
on the identified cost basis. Interest income (including
amortization of premium and discount) was recognized on the accrual
basis.
(c) 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.
(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 backup withholding tax withheld) in
additional fund shares at net asset value. Dividends and
distributions are declared from the total of net investment income
and net realized gain or loss on investments.
(f) Investment transactions--Investment transactions are accounted
for on a trade date basis.
2. Investment Advisory Agreement and Transactions with Affiliates:
For the period April 1, 2002 to February 12, 2003, the Fund had
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 was responsible for the management of the Fund's portfolio and
provided the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund paid a monthly fee based upon the average daily
value of the Fund's net assets, at the following annual rates: .50%
of the Fund's average daily net assets not exceeding $500 million;
..425% of the average daily net assets in excess of $500 million but
not exceeding $1 billion; and .375% of the average daily net assets
in excess of $1 billion. When the Fund converted from a stand-alone
investment company to a "feeder" fund on February 13, 2003, the
Investment Advisory Agreement between the Fund and FAM was
terminated.
CMA TAX-EXEMPT FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
The Fund has entered into an Administration Agreement with FAM. The
Fund pays a monthly fee at an annual rate of .25% of the Fund's
average daily net assets for the performance of administrative
services (other than investment advice and related portfolio
activities) necessary for the operation of the Fund.
The Fund has adopted a Distribution and Shareholder Servicing Plan
in compliance with Rule 12b-1 under the Investment Company Act of
1940, pursuant to which Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPF&S"), a subsidiary of ML & Co., receives a
distribution fee from the Fund. The fee is accrued daily and paid
monthly at the annual rate of .125% of average daily net assets of
the Fund for shareholders who maintain their accounts through
MLPF&S. The distribution fee is to compensate MLPF&S financial
advisors and other directly involved branch office personnel for
selling shares of the Fund and for providing direct personal
services to shareholders. The distribution fee is not compensation
for the administrative and operational services rendered to the Fund
by MLPF&S in processing share orders and administering shareholder
accounts.
For the year ended March 31, 2003, the Fund reimbursed FAM $181,047
for certain accounting services.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, FDS, and/or ML & Co.
3. Transactions in Shares of Beneficial Interest:
The number of shares sold, reinvested and redeemed during the years
corresponds to the amounts included in the Statements of Changes in
Net Assets for net proceeds from sale of shares, value of shares
reinvested and cost of shares redeemed, respectively, since shares
are recorded at $1.00 per share.
4. Distributions to Shareholders:
The tax character of distributions paid during the fiscal years
ended March 31, 2003 and March 31, 2002 was as follows:
3/31/2003 3/31/2002
Distributions paid from:
Tax-exempt income $ 97,179,406 $183,685,929
------------ ------------
Total distributions $ 97,179,406 $183,685,929
============ ============
As of March 31, 2003, there were no significant differences between
the book and tax components of net assets.
5. Capital Loss Carryforward:
On March 31, 2003, the Fund had a net capital loss carryforward of
$216,368, of which $72,081 expires in 2008 and $144,287 expires in
2011. This amount will be available to offset like amounts of any
future taxable gains.
CMA TAX-EXEMPT FUND
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of
Trustees of CMA Tax-Exempt Fund:
We have audited the accompanying statement of assets and liabilities
of CMA Tax-Exempt Fund as of March 31, 2003, and the related
statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and 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. 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, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of CMA Tax-Exempt Fund as of March 31, 2003, the
results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended,
and its financial highlights for each of the five years in the
period then ended, in conformity with accounting principles
generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
May 21, 2003
CMA TAX-EXEMPT FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
All of the net investment income distributions paid daily by CMA
Tax-Exempt Fund during its taxable year ended March 31, 2003 qualify
as tax-exempt interest dividends for Federal income tax purposes.
Please retain this information for your records.
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (IN THOUSANDS)
Face
State Amount Issue Value
Alabama--2.6% $ 50,755 Alabama Special Care Facilities Financing Authority, Mobile Revenue
Refunding Bonds (Ascension Health Credit), VRDN, Series B, 1.15% due
11/15/2039 (d) $ 50,755
40,000 Birmingham, Alabama, Special Care Facilities, Financing Authority,
Revenue Refunding Bonds (Ascension Health Credit), VRDN, Series B,
1.15% due 11/15/2039 (d)+ 40,000
27,765 Daphne, Alabama, Special Care Facilities Financing Authority Revenue
Bonds, FLOATS, Series 593, 1.30% due 8/15/2028 (b)(d) 27,765
12,950 Daphne, Alabama, Special Care Facilities Financing Authority, Revenue
Refunding Bonds (Presbyterian), VRDN, Series B, 1.22% due 8/15/2023 (a)(d) 12,950
4,255 Eagle Tax-Exempt Trust, Birmingham, Alabama, Water Revenue Bonds, VRDN,
Class A, Series 2002-6009, 1.23% due 1/01/2043 (d) 4,255
Eagle Tax-Exempt Trust, Jefferson County, Alabama, Sewer Revenue Refunding
Bonds, VRDN, Series 2002 (d):
7,835 Class 6015, 1.23% due 2/01/2032 7,835
3,000 Class 6016, 1.23% due 2/01/2038 3,000
Jefferson County, Alabama, Sewer Revenue Refunding Bonds, VRDN (d):
68,300 Series C-5, 1.20% due 2/01/2040 68,300
20,000 Series C-6, 1.15% due 2/01/2040 (g) 20,000
Stevenson, Alabama, IDB, Environmental Improvement Revenue Bonds
(Mead Corporation Project), VRDN, AMT (d):
25,000 1.25% due 1/01/2031 25,000
18,000 Series B, 1.25% due 4/01/2033 18,000
6,300 Stevenson, Alabama, IDB, Environmental Improvement Revenue Refunding Bonds
(Mead Corporation Project), VRDN, AMT, Series C, 1.25% due 11/01/2033 (d) 6,300
Alaska--0.4% 16,000 Valdez, Alaska, Marine Terminal Revenue Bonds (Arco Transportation Project),
Series B, 2% due 1/01/2004 16,059
Valdez, Alaska, Marine Terminal Revenue Refunding Bonds (Phillips Petroleum
Company Project):
14,500 Series A, 2% due 1/01/2004 14,554
15,000 Series C, 2% due 1/01/2004 15,056
Arizona--1.0% 45,200 Apache County, Arizona, IDA, IDR (Tucson Electric Power Co.), VRDN,
Series 83-A, 1.15% due 12/15/2018 (d) 45,200
10,200 Arizona Educational Loan Marketing Corporation, Educational Loan Revenue
Bonds, VRDN, AMT, Series A, 1.25% due 3/01/2015 (d)(f) 10,200
Marciopa County, Arizona, IDA, S/F Mortgage Revenue Bonds:
28,556 FLOATS, AMT, Series 707, 1.28% due 12/01/2036(d) 28,556
3,000 Series R-1A, 1.389% due 12/01/2003 3,000
13,620 Series R-2A, 1.389% due 12/01/2003 13,620
Portfolio Abbreviations for Master Tax-Exempt Trust
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
COP Certificates of Participation
CP Commercial Paper
EDA Economic Development Authority
EDR Economic Development Revenue Bonds
FLOATS Floating Rate Securities
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
M/F Multi-Family
MERLOTS Municipal Extendible Receipt Liquidity
Option Tender Securities
MSTR Municipal Securities Trust Receipts
PCR Pollution Control Revenue Bonds
PUTTERS Puttable Tax-Exempt Receipts
RAN Revenue Anticipation Notes
ROCS Reset Option Certificates
S/F Single-Family
TAN Tax Anticipation Notes
TRAN Tax Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Arkansas--1.2% $ 7,000 Arkansas State Development Finance Authority, Environmental Facilities
Revenue Bonds (Teris LLC Project), VRDN, AMT, 1.27% due 3/01/2021 (d) $ 7,000
7,800 Arkansas State Development Finance Authority, M/F Housing Revenue Bonds
(Chapelridge Benton Project), VRDN, AMT, Series C, 1.30% due 6/01/2032 (d) 7,800
42,335 Arkansas State Development Finance Authority, S/F Mortgage Revenue Bonds,
FLOATS, AMT, Series 708, 1.28% due 9/01/2004 (d) 42,335
43,100 North Little Rock, Arkansas, Health Facilities Board, Health Care Revenue
Bonds (Baptist Health), VRDN, Series B, 1.15% due 12/01/2021 (d)(f) 43,100
22,000 Pulaski County, Arkansas, Lease Purpose Revenue Bonds, VRDN, Series A,
1.25% due 3/01/2007 (d)(h) 22,000
7,530 Pulaski County, Arkansas, Public Facilities Board, M/F Housing Revenue
Refunding Bonds (Waterford Apartments), VRDN, AMT, 1.30% due 7/01/2032 (d) 7,530
California--9.2% 6,250 California Health Facilities Financing Authority Revenue Bonds, FLOATS,
Series 591, 1.18% due 3/01/2014 (d)(f) 6,250
California Pollution Control Financing Authority, PCR, Refunding (Pacific Gas
and Electric), VRDN (d):
6,625 Series C, 1.20% due 11/01/2026 6,625
70,000 Series E, 1.25% due 11/01/2026 70,000
80,000 California School Cash Reserve Program Authority Revenue Bonds, Series A,
3% due 7/03/2003 80,269
California State Department of Water Resources, Power Supply Revenue
Bonds(d):
15,840 FLOATS, Series 765, 1.15% due 5/01/2015 (a) 15,840
25,000 VRDN, Series C-4, 1.25% due 5/01/2022 25,000
30,000 VRDN, Series C-9, 1.125% due 5/01/2022 30,000
California State, RAN:
133,000 2.50% due 6/27/2003 133,250
158,000 Index, 1.36% due 6/27/2003 158,000
176,000 Index, Series G, 1.30% due 6/20/2003 176,000
22,000 California Statewide Communities Development Authority, Revenue Refunding
Bonds (Kaiser Permanente), VRDN, Series B, 1.70% due 8/01/2031 (d) 22,000
50,000 California Statewide Communities Development Authority, TRAN, Series A,
3% due 6/30/2003 50,160
Los Angeles, California, Unified School District, GO, TRAN:
25,000 Series B, 3% due 7/01/2003 25,082
100,000 Series C, 3.25% due 7/01/2003 100,387
45,000 San Diego County and School District Revenue Bonds, TRAN, Series B,
3% due 7/31/2003 45,188
25,680 West Basin, California, Municipal Water District Revenue Bonds, COP
(Phase II--Recycled Water Project) VRDN, Series B, 1.40% due 8/01/2027(d) 25,680
Colorado--1.2% 7,900 Adams County, Colorado, School District Number 012, GO, ROCS,
Series II-R-1045, 1.23% due 12/15/2022 (d)(e) 7,900
10,300 Colorado Department of Transportation, Revenue Refunding Bonds, PUTTERS,
Series 318, 1.25% due 6/15/2015 (d)(f) 10,300
6,060 Colorado School Mines Development Corporation Revenue Bonds, VRDN,
1.20% due 9/01/2026 (d) 6,060
Denver, Colorado, City and County Airport Revenue Bonds, VRDN, AMT (d):
10,025 Series F, 1.35% due 11/15/2025 10,025
4,750 Series G, 1.35% due 11/15/2025 4,750
Denver, Colorado, City and County Airport, Revenue Refunding Bonds, AMT (d):
6,000 MERLOTS, Series A61, 1.31% due 11/15/2012 (c) 6,000
20,000 VRDN, Series C, 1.35% due 11/15/2025 20,000
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Colorado $ 6,500 Pitkin County, Colorado, IDR, Refunding (Aspen Skiing Company Project),
(concluded) VRDN, AMT, Series B, 1.25% due 4/01/2014 (d) $ 6,500
53,200 Platte River Power Authority, Colorado, Electric Revenue Refunding Bonds,
VRDN, Sub-Lien, Series S-1, 1.15% due 6/01/2018 (d) 53,200
Connecticut-- 24,750 Eagle Tax-Exempt Trust, Connecticut, VRDN, Series 96, Class 0701, 1.15%
0.2% due 11/15/2004 (d) 24,750
Delaware--0.7% Delaware State, EDA, Revenue Bonds (Hospital Billing and Collection),
VRDN (a)(d):
25,710 Series B, 1.15% due 12/01/2015 25,710
45,000 Series C, 1.15% due 12/01/2015 45,000
District of District of Columbia, GO, Refunding, VRDN (d):
Columbia--1.6% 17,350 MSTR, Series SGA-62, 1.20% due 6/01/2017 (a) 17,350
64,155 Series C, 1.15% due 6/01/2026 (c) 64,155
50,000 District of Columbia, GO, TRAN, 2.50% due 9/30/2003 50,177
18,795 District of Columbia Hospital Revenue Bonds, FLOATS, Series 712, 1.28%
due 7/15/2019 (d) 18,795
20,750 District of Columbia, Multi-Modal Revenue Bonds (Medlantic), VRDN, Series B,
1.15% due 8/15/2038 (d)(e) 20,750
Florida--2.6% 45,981 Bay County, Florida, HFA, S/F Mortgage Revenue Bonds, FLOATS, AMT,
Series 695, 1.35% due 6/01/2004 (d) 45,981
13,885 Broward County, Florida, Professional Sports Facilities, Tax Revenue Bonds,
MSTR, VRDN, Series SGA-38, 1.25% due 9/01/2021 (d)(f) 13,885
33,820 Capital Trust Agency, Florida, M/F Housing Revenue Bonds, VRDN, Series
1999-B, 1.41% due 12/01/2032 (d) 33,820
20,700 Dade County, Florida, Water and Sewer System Revenue Bonds, VRDN,
1.15% due 10/05/2022 (c)(d) 20,700
5,000 Florida Housing Finance Corporation, Housing Revenue Bonds (Tuscany Lakes),
VRDN, AMT, Series 1, 1.30% due 11/15/2035 (d) 5,000
Florida State Board of Education, GO (d):
5,000 Capital Outlay, FLOATS, Series 557, 1.21% due 1/01/2012 5,000
8,000 MSTR, VRDN, Series SGA-139, 1.25% due 6/01/2032 (f) 8,000
11,677 Florida State Department of Environmental Protection, Preservation Revenue
Bonds, FLOATS, Series 722, 1.21% due 7/01/2022 (c)(d) 11,677
845 Gulf Breeze, Florida, Local Government Revenue Bonds, VRDN, Series E,
1.15% due 12/01/2020 (c)(d) 845
4,000 Hillsborough County, Florida, Aviation Authority, Revenue Refunding Bonds,
MERLOTS, AMT, Series A18, 1.31% due 10/01/2013 (d)(f) 4,000
14,375 Jacksonville, Florida, Electric Authority, Electric System Revenue Bonds,
VRDN, Sub-Series F, 1.20% due 10/01/2030 (d) 14,375
5,500 Jacksonville, Florida, Health Facilities Authority, Hospital Revenue Refunding
Bonds (Genesis Rehabilitation Hospital), VRDN, 1.14% due 5/01/2021 (d) 5,500
4,610 Jacksonville, Florida, Sales Tax Revenue Bonds, MERLOTS, Series B26,
1.26% due 10/01/2027 (d)(f) 4,610
2,950 Lee County, Florida, Hospital Board of Directors, Hospital Revenue Bonds
(Memorial Health System), VRDN, Series B, 1.20% due 4/01/2027 (d) 2,950
32,100 Martin County, Florida, PCR, Refunding (Florida Power & Light Company
Project), VRDN, 1.25% due 7/15/2022 (d) 32,100
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Florida $ 16,665 Orange County, Florida, Health Facilities Authority Revenue Bonds, FLOATS,
(concluded) Series 532, 1.35% due 11/15/2015 (a)(d) $ 16,665
Orlando and Orange County, Florida, Expressway Authority, Expressway
Revenue Refunding Bonds, VRDN (d)(e):
20,000 Series C2, 1.20% due 7/01/2025 20,000
15,000 Series C3, 1.20% due 7/01/2025 15,000
10,000 Sarasota County, Florida, Public Hospital Board, Hospital Revenue Bonds
(Sarasota Memorial Hospital), VRDN, Series A, 1.35% due 7/01/2037 (d) 10,000
Georgia--3.0% 120,000 Atlanta, Georgia, Airport Revenue Bonds, BAN, 2.25% due 10/30/2003 120,170
Atlanta, Georgia, Urban Residential Finance Authority, S/F Mortgage
Revenue Bonds, VRDN (d):
1,555 Series NT-R-1A, 1.374% due 12/01/2003 1,555
6,195 Series R-3A, 1.374% due 12/01/2004 6,195
8,000 Augusta, Georgia, Water and Sewer Revenue Refunding Bonds, MSTR, VRDN,
Series SGS-140, 1.25% due 10/01/2032 (d)(e) 8,000
Burke County, Georgia, Development Authority, PCR, Refunding:
12,200 (Georgia Power Corporation Plant Vogtle), First Series, 1.25%
due 3/25/2004 12,200
11,500 (Oglethorpe Power Corporation), VRDN, Series B, 1.15% due
1/01/2020 (a)(d) 11,500
20,470 De Kalb County, Georgia, School District, GO, TAN, Series 2002-2007, 2%
due 12/31/2007 20,633
10,585 Eagle Tax-Exempt Trust, Georgia, GO, VRDN, Series 01, Class 1001, 1.23%
due 11/01/2017 (d) 10,585
15,000 Fulton County, Georgia, Housing Authority Revenue Bonds, VRDN, 1.30%
due 12/01/2034 (d) 15,000
6,815 Georgia Municipal Electric Authority, Power Revenue Bonds, VRDN, Series D,
1.23% due 1/01/2017 (d) 6,815
85,000 Gwinnett County, Georgia, School District, GO, Construction Sales Tax Notes,
2% due 12/29/2003 85,567
15,995 Municipal Securities Trust Certificates Revenue Bonds, VRDN, AMT, Series
2002-186, Class A, 1.25% due 2/25/2021 (d)(f) 15,995
Hawaii--0.9% 7,930 Eagle Tax-Exempt Trust, Hawaii, VRDN, Series 2001, Class 1101, 1.23%
due 7/01/2011 (d) 7,930
Hawaii State, GO (d):
7,220 FLOATS, Series 605, 1.21% due 8/01/2015 (c) 7,220
28,740 VRDN, Series II-R-126, 1.23% due 1/01/2005 (b) 28,740
Honolulu, Hawaii, City and County, GO, Refunding, VRDN, Series C (c)(d):
16,700 1.30% due 12/01/2012 16,700
16,600 1.30% due 12/01/2017 16,600
4,100 1.30% due 12/01/2019 4,100
19,000 Honolulu, Hawaii, City and County M/F Housing Revenue Bonds (Moanalua
Hillside Apartments), VRDN, AMT, 1.20% due 9/15/2032 (d) 19,000
Idaho--0.4% 45,500 Idaho State, GO, TAN, 3% due 6/30/2003 45,653
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Illinois--9.7% $ 14,285 ABN Amro Munitops Certificates Trust, GO, VRDN, Series 2001-31, 1.23%
due 1/01/2009 (c)(d) $ 14,285
Aurora, Illinois, Kane and DuPage Counties and Springfield, Illinois,
Single Mortgage Revenue Bonds (d):
34,700 FLOATS, AMT, Series 789, 1.27% due 4/03/2006 34,700
58,630 VRDN, Series A, 1.404% due 4/01/2004 58,630
13,710 Chicago, Illinois, GO, VRDN, Series B, 1.15% due 1/01/2012 (d) 13,710
31,615 Chigago, Illinois, Metropolitan Pier and Exposition Center, Municipal Series
Trust Certificates, Revenue Refunding Bonds, VRDN, Class A, Series 2001-157,
1.25% due 10/05/2017 (c)(d) 31,615
53,000 Chicago, Illinois, Midway Airport Revenue Bonds, Second Lien, VRDN, AMT,
Series A, 1.25% due 1/01/2029 (d)(f) 53,000
33,895 Chicago, Illinois, Municipal Securities Trust Certificates, GO, Refunding,
VRDN, Class A, Series 2002-191, 1.38% due 3/18/2019 (c)(d) 33,895
36,000 Chicago, Illinois, Neighborhoods Alive 21, GO, VRDN, Series B, 1.15%
due 1/01/2037 (d)(f) 36,000
29,950 Chicago, Illinois, O'Hare International Airport, Municipal Securities Trust
Certificates Revenue Bonds, VRDN, AMT, Class A, Series 2001-151, 1.22%
due 6/30/2015 (a)(d) 29,950
25,445 Chicago, Illinois, O'Hare International Airport, Municipal Securities Trust
Certificates, Revenue Refunding Bonds, VRDN, AMT, Class A, Series 2000-93,
1.22% due 10/04/2012 (a)(d) 25,445
Chicago, Illinois, O'Hare International Airport Revenue Bonds, CP, Series 2001A:
25,300 1.25% due 4/08/2003 25,300
12,520 1.25% due 4/09/2003 12,520
5,290 Chicago, Illinois, O'Hare International Airport Revenue Bonds (General Airport
Second Lien), VRDN, Series B, 1.13% due 1/01/2015 (d) 5,290
14,300 Chicago, Illinois, O'Hare International Airport, Special Facilities Revenue
Bonds (Compagnie Nationale--Air France), VRDN, AMT, 1.25% due 5/01/2018 (d) 14,300
26,100 Chicago, Illinois, Revenue Bonds (Homestart Program), VRDN, Series A,
1.25% due 6/01/2005 (d) 26,100
29,085 Cook County, Illinois, Municipal Securities Trust Certificates, GO, Refunding,
VRDN, Class A, Series 2001-145, 1.25% due 11/15/2029 (c)(d) 29,085
11,000 Eagle Tax-Exempt Trust, Chicago Board of Education, VRDN, Series 01,
Class 1309, 1.23% due 12/01/2026 (d) 11,000
Eagle Tax-Exempt Trust, Chicago, Illinois, GO, VRDN, Class 1301(d):
14,380 Series 95, 1.23% due 1/01/2024 14,380
9,900 Series 98, 1.23% due 1/01/2017 9,900
5,000 Eagle Tax-Exempt Trust, Chicago, Illinois, Metropolitan Pier and Exposition
Center, VRDN, Class A, Series 2002-6001, 1.23% due 12/15/2028 (d)(f) 5,000
30,000 Eagle Tax-Exempt Trust, Cook County, Illinois, VRDN, Series 02, Class 1303,
1.23% due 11/15/2025 (d) 30,000
11,000 Eagle Tax-Exempt Trust, Illinois, GO, VRDN, Series 01, Class 1307, 1.23% due
11/01/2022 (d) 11,000
14,355 Eagle Tax-Exempt Trust, Illinois, Metropolitan Expo Center, VRDN, Series 98,
Class 1306, 1.23% due 6/15/2029 (d) 14,355
11,100 Eagle Tax-Exempt Trust, Illinois State, GO, VRDN, Series 02, Class 1302, 1.23%
due 2/01/2027 (d) 11,100
Illinois Development Finance Authority, Revenue Refunding Bonds (Provena
Health), VRDN (d):
41,500 Series B, 1.25% due 5/01/2028 (f) 41,500
20,000 Series C, 1.25% due 5/01/2028 20,000
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Illinois $ 5,000 Illinois Development Finance Authority, Water Facilities Revenue Refunding
(concluded) Bonds (Illinois American Water Company), VRDN, AMT, 1.25% due 3/01/2032 (d)(f) $ 5,000
Illinois Educational Facilities Authority Revenue Bonds, VRDN (d):
8,450 (The Art Institute of Chicago), 1.20% due 3/01/2027 8,450
66,000 (The Art Institute of Chicago), 1.20% due 3/01/2034 66,000
4,800 (Chicago Historical Society), 1.15% due 12/01/2025 4,800
Illinois Educational Facilities Authority, Revenue Refunding Bonds, VRDN (d):
30,300 (The Art Institute of Chicago), 1.20% due 3/01/2027 30,300
17,800 (Northwestern University), 1.20% due 12/01/2025 17,800
Illinois HDA, M/F Housing Revenue Bonds (Danbury Court Apartments),
VRDN, AMT (d):
6,300 Series A, 1.25% due 5/01/2037 6,300
450 Series B, 1.35% due 5/01/2037 450
5,000 Illinois HDA, Owner Occupied Housing Revenue Bonds, AMT, Series B,
1.12% due 4/30/2003 5,000
15,000 Illinois Health Facilities Authority, CP, 1.10% due 4/02/2003 15,000
10,000 Illinois Health Facilities Authority Revenue Bonds (Evanston Hospital
Corporation), CP, 1.05% due 5/15/2003 10,000
Illinois Health Facilities Authority Revenue Bonds, Revolving Fund, Pooled,
VRDN (d):
50,000 Series B, 1.15% due 8/01/2020 50,000
7,000 Series F, 1.15% due 8/01/2015 7,000
Illinois Health Facilities Authority, Revenue Refunding Bonds, VRDN (d):
18,660 (Little Company of Mary Hospital), Series A, 1.26% due 8/15/2021 (f) 18,660
16,700 (Resurrection Health), Series B, 1.15% due 5/15/2029 (e) 16,700
6,800 (University of Chicago Hospitals), 1.15% due 8/01/2026 (f) 6,800
2,940 Illinois State Dedicated Tax (Macon Trust), VRDN, Series N, 1.25% due
12/15/2020 (d) 2,940
18,815 Illinois State, FLOATS, Series SG-60, 1.21% due 8/01/2019 (d) 18,815
9,000 Illinois State, GO, MERLOTS, Series B04, 1.26% due 12/01/2024 (d)(e)(f) 9,000
Illinois State, GO, Refunding (d)(f):
16,785 FLOATS, Series 743D, 1.21% due 8/01/2015 16,785
5,980 MERLOTS, Series A49, 1.26% due 8/01/2013 5,980
4,400 Illinois Student Assistance Commission, Student Loan Revenue Bonds, VRDN,
AMT, Series A, 1.20% due 3/01/2006 (d) 4,400
10,000 Madison County, Illinois, Environmental Improvement Revenue Bonds (Shell
Wood River Project), VRDN, AMT, Series A, 1.20% due 3/01/2033 (d) 10,000
21,350 Regional Transportation Authority, Illinois, FLOATS, Series SG-82, 1.21%
due 6/01/2025 (d) 21,350
Regional Transportation Authority, Ilinois, GO, MERLOTS (d):
19,970 Series A24, 1.26% due 7/01/2032 (f) 19,970
5,000 Series A41, 1.26% due 6/01/2017 (c) 5,000
5,190 Regional Transportation Authority, Illinois, Revenue Bonds, MERLOTS,
Series B15, 1.26% due 6/01/2027 (d)(f) 5,190
11,100 Southwestern Illinois Development Authority, Solid Waste Disposal Revenue
Bonds (Shell Oil Company--Wood River Project), VRDN, AMT, 1.20% due
8/01/2021 (d) 11,100
7,000 Will County, Illinois, Exempt Facilities Revenue Bonds (Amoco Chemical
Company Project), VRDN, AMT, 1.20% due 3/01/2028 (d) 7,000
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Indiana--5.2% $ 10,000 ABN Amro Munitops Certificates Trust, VRDN, Series 1998-5, 1.23%
due 4/05/2006 (d)(e) $ 10,000
13,000 Goshen, Indiana, EDR, Refunding (Goshen College Project), VRDN, 1.20%
due 10/01/2037 (d) 13,000
Indiana Bond Bank Revenue Bonds:
107,600 Advance Funding Program Notes, Series A, 2% due 1/27/2004 (a) 108,392
5,875 FLOATS, Series 670, 1.21% due 10/01/2022 (d)(f) 5,875
Indiana Bond Bank, Special Program Notes, Series A:
1,600 1.60% due 1/06/2004 1,601
17,400 2% due 1/06/2004 17,499
Indiana Health Facilities Financing Authority, Hospital Revenue Bonds, VRDN (d):
82,200 (Clarian Health Obligation Group), Series C, 1.15% due 3/01/2030 82,200
15,000 (Community Hospitals Project), Series A, 1.20% due 7/01/2027 15,000
Indiana Health Facilities Financing Authority, Hospital Revenue Refunding
Bonds (Clarian Health Partners), VRDN (d):
51,800 Series B, 1.20% due 2/15/2026 51,800
50,800 Series C, 1.20% due 2/15/2026 50,800
1,650 Indiana Health Facilities Financing Authority Revenue Bonds (Capital Access
Designated Pool), VRDN, 1.15% due 1/01/2012 (d) 1,650
67,190 Indiana Health Facilities Financing Authority, Revenue Refunding Bonds
(Ascension Health Credit), VRDN, Series B, 1.15% due 11/15/2039 (a)(d) 67,190
41,330 Indiana Secondary Market Educational Loans Inc., Educational Loan Revenue
Bonds, VRDN, AMT, Series B, 1.20% due 12/01/2014 (a)(d) 41,330
18,900 Indiana State, HFA, S/F Mortgage Revenue Bonds, VRDN, AMT, Series E-2,
1.40% due 1/01/2034 (d) 18,900
8,335 Indianapolis, Indiana, Local Public Improvement Bond Bank Revenue Bonds,
PUTTERS, Series 331, 1.30% due 2/01/2023 (a)(d) 8,335
34,995 Indianapolis, Indiana, Public Improvement Bonds, Municipal Securities Trust
Certificates, GO, VRDN, Series 2002-192, Class A, 1.25% due 6/18/2014 (d)(f) 34,995
10,000 Whiting, Indiana, Environmental Facilities, Revenue Refunding Bonds
(BP Products Project), VRDN, AMT, Series C, 1.20% due 7/01/2034 (d) 10,000
7,600 Whiting, Indiana, Industrial Sewer and Solid Waste Disposal, Revenue Refunding
Bonds (Amoco Oil Company Project), VRDN, AMT, 1.20% due 1/01/2026 (d) 7,600
Iowa--0.4% 30,000 Iowa State School Cash Anticipation Program, TRAN, 2.75% due 6/20/2003 (e) 30,072
14,500 Iowa Student Loan Liquidity Corporation, Student Loan Revenue Bonds, VRDN,
AMT, Series B, 1.20% due 12/01/2013 (a)(d) 14,500
Kansas--0.2% 9,100 Butler County, Kansas, Solid Waste Disposal Facilities Revenue Bonds (Texaco
Refining and Marketing), VRDN, AMT, Series A, 1.20% due 8/01/2024 (d) 9,100
16,800 Kansas State Development Finance Authority, Health Facilities Revenue Bonds
(Stormont-Vail), VRDN, Series M, 1.20% due 11/15/2023 (d)(f) 16,800
Kentucky--4.3% 12,195 ABN Amro Munitops Certificates Trust, Lexington, Kentucky, GO, VRDN,
Series 2001-37, 1.23% due 2/01/2010 (c)(d) 12,195
5,100 Ashland, Kentucky, PCR, Refunding (Calgon Carbon Corporation Project),
FLOATS, Series A, 1.45% due 10/01/2006 (d) 5,100
20,930 Carroll County, Kentucky, PCR, CP, 1.15% due 5/22/2003 20,930
Daviess County, Kentucky, Solid Waste Disposal Facility Revenue Bonds
(Scott Paper Company Project), VRDN, AMT (d):
44,100 Series A, 1.25% due 12/01/2023 44,100
16,300 Series A, 1.25% due 5/01/2024 16,300
26,200 Series B, 1.25% due 12/01/2023 26,200
21,700 Series B, 1.25% due 5/01/2024 21,700
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Kentucky $ 16,000 Jefferson County, Kentucky, PCR (Louisville Gas and Electric Company), CP,
(concluded) Series A, 1.17% due 5/06/2003 $ 16,000
Kentucky Asset/Liability Commission, General Fund Revenue Bonds, TRAN:
85,000 Series A, 2.75% due 6/26/2003 85,217
45,000 Series B, 1.30% due 6/26/2003 45,000
75,000 Kentucky Association of Counties, Advance Revenue Cash Flow Borrowing,
COP, TRAN, 3% due 6/30/2003 75,243
5,900 Kentucky State Property and Buildings Commission, Revenue Refunding Bonds,
FLOATS, Series 575, 1.21% due 2/01/2017 (d)(e) 5,900
36,475 Kentucky State Turnpike Authority, Resource Recovery Road Revenue Bonds,
FLOATS, Series 488, 1.21% due 7/01/2007 (d)(e) 36,475
20,330 Logan/Todd, Kentucky, Regional Water Commission, Revenue Refunding Bonds,
BAN, 3% due 8/01/2003 20,419
21,500 Trimble County, Kentucky, PCR, CP, 1.12% due 5/06/2003 21,500
Louisiana--2.8% 5,100 Ascension Parish, Louisiana, PCR, Refunding (Shell Oil Company Project),
VRDN, 1.15% due 9/01/2023 (d) 5,100
17,700 Ascension Parish, Louisiana, Revenue Bonds (BASF Corporation Project),
VRDN, AMT, 1.30% due 3/01/2025 (d) 17,700
31,500 Calcasieu Parish, Louisiana, IDB, Environmental Revenue Refunding Bonds
(Citgo Petroleum Corp.), VRDN, AMT, 1.20% due 3/01/2025 (d) 31,500
22,700 East Baton Rouge, Louisiana, Mortgage Finance Authority Revenue Bonds
(Conventional Program Notes), Series A-R-4, 1.152% due 3/11/2004 22,699
25,000 Jefferson Parish, Louisiana, Hospital Service District Number 001, Hospital
Revenue Bonds (West Jefferson Medical Center), VRDN, Series B, 1.15%
due 1/01/2028 (d)(e) 25,000
6,000 Louisiana Local Government, Environmental Facilities, Community
Development Authority Revenue Bonds (Honeywell International Inc.
Project), VRDN, AMT, 1.35% due 12/01/2037 (d) 6,000
Louisiana Public Facilities Authority Revenue Bonds (Equipment and Capital
Facilities Loan Program), VRDN (d):
21,645 Series B, 1.23% due 7/01/2023 21,645
15,620 Series C, 1.25% due 7/01/2024 15,620
2,845 Louisiana State GO, FLOATS, Series 667, 1.25% due 4/01/2019 (c)(d) 2,845
5,100 Louisiana State Offshore Terminal Authority, Deepwater Port Revenue
Refunding Bonds (First Stage A-Loop Inc.), VRDN, 1.15% due 9/01/2008 (d) 5,100
New Orleans, Louisiana, Finance Authority, S/F Mortgage Revenue
Refunding Bonds, VRDN (d):
25,000 Series C, 1.374% due 6/01/2042 25,000
27,700 Series R-6, 1.129% due 3/11/2004 27,699
24,200 Plaquemines Parish, Louisiana, Environmental Revenue Bonds
(BP Exploration & Oil), VRDN, AMT, 1.20% due 10/01/2024 (d) 24,200
4,400 Saint Charles Parish, Louisiana, PCR, Refunding (Shell Oil Company Project),
VRDN, 1.15% due 6/01/2005 (d) 4,400
Saint Charles Parish, Louisiana, PCR, VRDN, AMT (d):
24,400 (Shell Oil Company--Norco Project), 1.20% due 11/01/2021 24,400
15,100 (Shell Oil Company--Norco Project), 1.20% due 9/01/2023 15,100
21,000 (Shell Oil Company Project), Series A, 1.20% due 10/01/2022 21,000
4,400 South Louisiana Port Commission, Port Revenue Refunding Bonds
(Occidental Petroleum), VRDN, 1.15% due 7/01/2018 (d) 4,400
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Maine--0.2% $ 16,500 Windham, Maine, GO, BAN, 2.25% due 6/30/2003 $ 16,548
Maryland--1.1% 5,245 Anne Arundel County, Maryland, Pollution Revenue Bonds (Baltimore Gas &
Electric Company), VRDN, 2.20% due 7/01/2014 (d) 5,245
35,700 Baltimore, Maryland, Port Facilities Revenue Bonds (Occidental Petroleum),
FLOATS, 1.05% due 10/14/2011 (d) 35,700
Maryland State Community Development Administration, Department of
Housing and Community Develoment, Residential Revenue Refunding Bonds:
19,760 AMT, Series E, 1.25% due 12/18/2003 19,760
20,000 Series D, 1.20% due 12/18/2003 20,000
36,300 Maryland State Energy Financing Administration, Solid Waste Disposal Revenue
Bonds (Cimenteries Project), VRDN, AMT, 1.20% due 5/01/2035 (d) 36,300
Massachusetts-- 10,000 Eagle Tax-Exempt Trust, Massachusetts Commuter Facilities, VRDN, Series
1.6% 2001, Class 2101, 1.15% due 6/15/2033 (d) 10,000
53,925 Franklin, Massachusetts, GO, BAN, 3% due 5/01/2003 53,970
6,150 Hudson, Massachusetts, GO, BAN, 3% due 5/14/2003 6,157
29,973 Massachusetts State, GO, Refunding, FLOATS, Series 716D, 1.15% due
8/01/2018 (d)(f) 29,973
12,166 Mattapoisett, Massachusetts, GO, BAN, 3% due 5/01/2003 12,175
22,000 Natick, Massachusetts, GO, BAN, 3% due 5/01/2003 22,018
17,940 Peabody, Massachusetts, GO, Refunding, BAN, 3% due 4/14/2003 17,947
17,000 Springfield, Massachusetts, GO, BAN, 3% due 4/14/2003 17,013
Michigan--2.0% 8,000 ABN Amro Munitops Certificates Trust, Michigan, GO, VRDN, Series 2002-29,
1.60% due 11/01/2010 (c)(d) 8,000
4,615 Detroit Michigan, City School District, GO, VRDN, Series A, 1.23% due
5/01/2029 (d)(e) 4,615
14,730 Detroit, Michigan, City School District, MERLOTS, Series A-113, 1.26%
due 5/01/2029 (d) 14,730
Kent Hospital Finance Authority, Michigan, Revenue Refunding Bonds
(Spectrum Health), VRDN (d)(f):
24,200 Series B, 1.15% due 1/15/2026 24,200
16,800 Series C, 1.15% due 1/15/2026 16,800
Michigan State Hospital Finance Authority, Revenue Refunding Bonds (d):
22,000 MERLOTS, Series K, 1.26% due 11/15/2023 (f) 22,000
20,000 (Trinity Health), VRDN, Series E, 1.15% due 12/01/2030 (a) 20,000
4,600 Michigan State Strategic Fund, PCR, Refunding (Consumers Power Project),
VRDN, 1.15% due 4/15/2018 (a)(d) 4,600
16,505 Municipal Securities Trust Certificates, Revenue Refunding Bonds (Michigan
State Hospital), VRDN, Series 1997-24, Class A, 1.25% due 12/01/2005 (d)(e) 16,505
76,920 Wayne Charter County, Michigan, Airport Revenue Bonds (Detroit Metropolitan
Wayne County), VRDN, AMT, Series A, 1.20% due 12/01/2032 (c)(d) 76,920
Minnesota--1.4% 15,000 City of Rochester, Minnesota, CP, Series 2001-C, 1.05% due 4/01/2003 15,000
46,825 Eagle Tax-Exempt Trust, Minnesota, GO, VRDN, Series 93-A, 1.23% due
8/01/2003 (d) 46,825
Minnesota State, CP:
9,000 1.05% due 4/01/2003 9,000
81,000 1.10% due 4/03/2003 81,000
Mississippi--1.0% 7,000 Jackson County, Mississippi, Industrial Sewer Facilities Revenue Bonds
(Chevron U.S.A. Inc. Project), VRDN, AMT, 1.20% due 12/15/2024 (d) 7,000
7,100 Mississippi Business Finance Corporation, Mississippi Solid Waste Disposal
Revenue Bonds (Mississippi Power Company Project), VRDN, AMT, 1.25%
due 7/01/2025 (d) 7,100
3,520 Mississippi Business Finance Corporation, Mississippi, Solid Waste Disposal
Revenue Refunding Bonds (Mississippi Power Company Project), VRDN, AMT,
1.25% due 5/01/2028 (d) 3,520
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Mississippi $ 12,500 Mississippi Home Corporation, Lease Purpose Revenue Bonds, VRDN,
(concluded) 1.25% due 10/01/2007 (d) $ 12,500
27,894 Mississippi Home Corporation, S/F Revenue Bonds, FLOATS, AMT, Series 714,
1.28% due 10/03/2005 (d) 27,894
Mississippi Hospital Equipment and Facilities Authority Revenue Bonds,
VRDN (d):
19,300 (Baptist Memorial Hospital Project), 1.18% due 5/01/2021 19,300
25,900 (Mississippi Baptist Medical Center), 1.19% due 7/01/2012 25,900
Missouri--1.5% 40,000 Lees Summit, Missouri, M/F Housing Revenue Bonds (Affordable Housing
Acquisition), VRDN, Series A, 1.49% due 7/01/2046 (d) 40,000
11,400 Missouri Development Finance Board, Cultural Facilities Revenue Bonds
(Nelson Gallery Foundation), VRDN, Series B, 1.20% due 12/01/2031 (d)(f) 11,400
Missouri Higher Education Loan Authority, Student Loan Revenue Bonds,
VRDN, AMT (d):
7,800 Series A, 1.20% due 6/01/2017 7,800
37,800 Series B, 1.20% due 6/01/2020 37,800
10,665 Missouri-Illinois Bi-State Development Agency, Metropolitan District Revenue
Bonds, PUTTERS, Series 311, 1.25% due 10/01/2013 (d) 10,665
49,835 Tobacco Settlement Financing Authority, Missouri, General Fund Revenue
Bonds, Temporary Notes, Series A, 1.60% due 6/15/2003 49,843
Nebraska--1.5% 4,995 Nebhelp Inc., Nebraska, Revenue Bonds, ROCS, AMT, Series II-R-205, 1.15%
due 6/01/2013 (d)(f) 4,995
24,000 Nebraska Investment Finance Authority, S/F Housing Revenue Refunding
Bonds, VRDN, AMT, Series E, 1.25% due 9/01/2033 (d) 24,000
47,500 Nebraska Public Power District Revenue Bonds, CP, 1.03% due 4/10/2003 47,500
4,995 Nebraska Public Power District, Revenue Refunding Bonds, ROCS,
Series II-R-209, 1.15% due 1/01/2012 (d)(f) 4,995
Omaha, Nebraska, Public Power, CP:
24,750 1.10% due 4/14/2003 24,750
30,000 1.07% due 5/01/2003 30,000
18,600 1.15% due 5/27/2003 18,600
Nevada--2.1% 29,185 ABN Amro Munitops Certificates Trust, VRDN, Series 1999-15, 1.22% due
1/02/2008 (d)(f) 29,185
156,700 Clark County, Nevada, Airport Improvement Revenue Refunding Bonds, VRDN,
Series A, 1.25% due 7/01/2012 (d)(f) 156,700
12,500 Clark County, Nevada, IDR (Southwest Gas Corporation Project), VRDN, AMT,
Series B, 1.25% due 3/01/2038 (d) 12,500
9,065 Las Vegas Valley, Nevada, Water District, GO, Refunding, MERLOTS, Series B-10,
1.26% due 6/01/2024 (d)(f) 9,065
6,795 Nevada Housing Division Revenue Bonds (Multi-Unit Housing--Mesquite),
VRDN, AMT, Series B, 1.35% due 5/01/2028 (d) 6,795
7,345 Washoe County, Nevada, School District, GO, ROCS, Series II-R-2012,
1.23% due 6/01/2020 (c)(d) 7,345
New Hampshire-- 5,475 New Hampshire Higher Educational and Health Facilities Authority Revenue
0.2% Refunding Bonds, FLOATS, Series 772, 1.21% due 1/01/2017 (c)(d) 5,475
7,415 New Hampshire State Business Finance Authority, Resource Recovery Revenue
Refunding Bonds (Wheelabrator), VRDN, Series A, 1.15% due 1/01/2018 (d) 7,415
5,400 New Hampshire State, HFA, M/F Housing Revenue Bonds (P.R.A. Properties--
Pheasant Run Project), VRDN, AMT, 1.20% due 5/01/2025 (d) 5,400
New Jersey-- 17,200 Atlantic City, New Jersey, GO, BAN, 2.75% due 4/07/2003 17,202
0.3% 14,000 Bayonne, New Jersey, Municipal Utilities Authority, Revenue Refunding Bonds
(Water Project Notes), 5.35% due 6/26/2003 14,105
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
New Mexico-- $ 30,000 Bernalillo County, New Mexico, GO, TRAN, Series A, 2% due 12/15/2003 $ 30,175
0.3%
New York--6.9% 16,279 Afton, New York, Central School District, GO, Refunding, BAN, 2.75%
due 5/22/2003 16,298
19,720 Babylon, New York, IDA Residential Recovery Revenue Refunding Bonds
(Ogden Martin Project), VRDN, 1.25% due 1/01/2019 (d)(e) 19,720
24,700 Eagle Tax-Exempt Trust, New York State (Memorial Sloan), VRDN, Series 98,
Class 3202, 1.18% due 7/01/2023 (d) 24,700
10,900 Fonda-Fultonville, New York, Central School District, GO, BAN, 3%
due 4/11/2003 10,902
19,000 Freeport, New York, GO, Refunding, BAN, Series A, 1.75% due 1/22/2004 19,068
12,000 Hempstead, New York, Union Free School District, GO, TAN, 2.75% due
6/26/2003 12,027
15,000 Johnson City, New York, Central School District, GO, BAN, 2.75% due
6/25/2003 15,034
14,885 Metropolitan Transportation Authority, New York, Service Contract Revenue
Refunding Bonds, FLOATS, Series 741, 1.18% due 1/01/2017 (d)(f) 14,885
17,600 Monroe County, New York, Public Improvement, GO, BAN, 2% due 12/19/2003 17,700
21,500 New York City, New York, City Municipal Water Finance Authority, Water and
Sewer System Revenue Refunding Bonds, MSTR, VRDN, Series SGB-27, 1.18%
due 6/15/2024 (d)(e) 21,500
63,000 New York City, New York, City Transitional Finance Authority, BAN, Refunding,
Series 2, 2% due 2/19/2004 63,515
9,100 New York City, New York, City Transitional Finance Authority Revenue Bonds
(New York City Recovery), VRDN, Series 1, Sub-Series 1C, 1.15% due
11/01/2022 (d) 9,100
95,000 New York City, New York, GO, FLOATS, Series L28J, 1.25% due 4/11/2003 (d) 95,000
20,000 New York City, New York, Water Authority, CP, Series 7, 1.15% due 4/24/2003 20,000
17,500 New York State, HFA, Service Contract Revenue Refunding Bonds, VRDN,
Series B, 1.125% due 3/15/2026 (d) 17,500
300 New York State Local Government Assistance Corporation Revenue Bonds,
VRDN, Series B, 1.10% due 4/01/2025 (d) 300
New York State Local Government Assistance Corporation, Revenue Refunding
Bonds, Sub-Lien, VRDN (d):
57,500 Series 4V, 1.15% due 4/01/2022 57,500
16,885 Series 8V, 1.15% due 4/01/2019 16,885
5,995 New York State Power Authority Revenue Bonds, ROCS, Series II-R-210, 1.15%
due 11/15/2015 (d)(f) 5,995
6,796 Northport-East Northport, New York, Union Free School District, GO, BAN,
2.75% due 4/30/2003 6,800
20,934 Sandy Creek, New York, Central School District, GO, Refunding, BAN, 2.50%
due 6/27/2003 20,973
5,000 South Huntington, New York, Union Free School District, GO, TAN, 2.50%
due 6/26/2003 5,011
15,000 Starpoint, New York, Central School District, GO, BAN, 2.75% due 6/27/2003 15,036
175,000 Suffolk County, New York, GO, TAN, Series I, 1.75% due 8/14/2003 175,451
10,000 Triborough Bridge and Tunnel Authority, New York, General Purpose Revenue
Refunding Bonds, VRDN, Series B, 1.15% due 1/01/2032 (d) 10,000
31,910 Triborough Bridge and Tunnel Authority, New York, Revenue Bonds, FLOATS,
Series 729, 1.18% due 11/15/2019 (d)(f) 31,910
8,000 West Islip, New York, Union Free School District, GO, TAN, 2.50% due
6/27/2003 8,018
North Carolina-- 19,995 Municipal Securities Trust Certificates, GO, Refunding, VRDN, Series 2002-201,
0.4% Class A, 1.23% due 4/12/2017 (d) 19,995
10,000 Municipal Securities Trust Certificates, GO, VRDN, Series 2001-125, Class A,
1.15% due 7/23/2015 (d) 10,000
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
North Carolina $ 8,165 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds,
(concluded) MERLOTS, Series A22, 1.26% due 1/01/2024 (d)(f) $ 8,165
4,500 Wake County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Solid Waste Disposal--Highway 55),
VRDN, AMT, 1.32% due 9/01/2013 (d) 4,500
North Dakota-- 6,355 Oliver City, North Dakota, PCR, Refunding, MERLOTS, Series B07, 1.26%
0.1% due 1/01/2027 (a)(d) 6,355
Ohio--1.8% Clinton County, Ohio, Hospital Revenue Bonds (Ohio Hospital Capital Asset Inc.
Pooled Loan), VRDN (d):
2,135 1.65% due 6/01/2028 2,135
10,830 1.25% due 7/01/2029 10,830
38,000 Dayton, Ohio, City School District, GO, BAN, 2% due 7/10/2003 38,087
22,275 Eagle Tax-Exempt Trust, Ohio State Turnpike, VRDN, Series 98, Class 3503,
1.23% due 2/15/2026 (d) 22,275
10,500 Eagle Tax-Exempt Trust, Ohio, Water Authority Revenue Bonds (Ohio Edison),
VRDN, Series 95, Class 3502, 1.23% due 7/01/2015 (d) 10,500
23,875 Franklin County, Ohio, Hospital Revenue Bonds (Holy Cross Health System),
VRDN, 1.18% due 6/01/2016 (d) 23,875
16,020 Franklin County, Ohio, Hospital Revenue Refunding and Improvement Bonds
(U.S. Health Corporation), VRDN, Series A, 1.15% due 12/01/2021 (d) 16,020
23,000 Kettering, Ohio, City School District, GO, BAN, 2% due 6/25/2003 23,046
10,400 Montgomery County, Ohio, Revenue Refunding Bonds (Miami Valley Hospital),
VRDN, Series A, 1.15% due 11/15/2022 (d) 10,400
1,765 Ohio HFA, M/F Housing Revenue Bonds (Kenwood Congregate--Retire),
VRDN, 1.05% due 12/01/2015 (d) 1,765
9,600 Ohio HFA, Revenue Bonds, ROCS, AMT, Series II-R-187, 1.27% due 9/01/2007 (d) 9,600
5,000 Ohio State, GO, FLOATS, Series 603, 1.21% due 9/15/2020 (d)(e) 5,000
12,500 Toledo, Ohio, City School District, GO, BAN, 2% due 7/23/2003 12,536
Oklahoma--1.7% Comanche County, Oklahoma, Home Finance Authority, S/F Mortgage Revenue
Bonds, VRDN, Series A (d):
5,306 1.19% due 4/01/2004 5,305
4,820 1.40% due 4/01/2004 4,820
7,500 Grand Gateway, Oklahoma, Home Finance Authority, S/F Mortgage Revenue
Bonds, VRDN, Series A, 1.374% due 2/01/2006 (d) 7,500
Moore, Oklahoma, EDA, S/F Mortgage Revenue Bonds, VRDN (d):
7,000 Series A, 1.14% due 4/08/2004 7,000
2,900 Series B-R-3, 1.14% due 12/11/2003 2,900
35,000 Oklahoma County, Oklahoma, Finance Authority Revenue Bonds (Oklahoma
County Housing Preservation), VRDN, 1.30% due 1/01/2033 (d) 35,000
9,200 Oklahoma County, Oklahoma, HFA, S/F Mortgage Revenue Bonds, Series C-R-3,
1.14% due 12/11/2003 9,200
12,839 Oklahoma County, Oklahoma, Home Finance Authority, S/F Mortgage Revenue
Bonds, VRDN, Series D, 1.374% due 6/02/2003 (d) 12,839
65,900 Oklahoma State Industries Authority, Revenue Refunding Bonds (Integris
Baptist), VRDN, Series B, 1.15% due 8/15/2029 (d)(f) 65,900
7,000 Rogers County, Oklahoma, HFA Revenue Bonds, Series A, 1.188% due
12/01/2003 7,000
Tulsa County, Oklahoma, Home Finance Authority, S/F Mortgage Revenue
Bonds:
15,000 Series G, 1.359% due 12/01/2003 15,000
8,200 VRDN, Series A, 1.374% due 4/01/2004 (d) 8,200
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Oregon--1.4% $ 11,730 ABN Amro Munitops Certificates Trust, GO, VRDN, Series 2001-4, 1.23%
due 6/01/2009 (d)(f) $ 11,730
4,250 Gilliam County, Oregon, Solid Waste Disposal Revenue Bonds (Waste
Management Inc. Project), VRDN, 1.20% due 7/01/2027 (d) 4,250
7,170 Oregon State Health, Housing, Educational and Cultural Facilities Authority
Revenue Bonds (Sacred Heart Medical Center), VRDN, Series A, 1.15%
due 11/01/2028 (d) 7,170
125,190 Oregon State, TAN, Series A, 3.25% due 5/01/2003 125,320
Pennsylvania-- 2,500 Butler County, Pennsylvania, IDA, IDR, Refunding (Wetterau Finance Co.
1.9% Project), VRDN, 1.20% due 12/01/2014 (d) 2,500
25,240 Dauphin County, Pennsylvania, General Authority, Revenue Refunding
Bonds (School District Pooled Financing Program II), VRDN, 1.17%
due 9/01/2032 (a)(d) 25,240
6,000 Delaware Valley, Pennsylvania, Regional Finance Authority, Local Government
Revenue Bonds, VRDN, Mode 1, 1.15% due 8/01/2016 (d) 6,000
18,735 Eagle Tax-Exempt Trust, Pennsylvania, GO, VRDN, Series 94, Class 3803,
1.23% due 5/01/2008 (d) 18,735
Emmaus, Pennsylvania, General Authority Revenue Bonds, VRDN (d):
13,200 (Pennsylvania Loan Program), Series A, 1.15% due 3/01/2030 (e) 13,200
7,500 Series D, 1.20% due 3/01/2024 7,500
5,200 Series G, 1.20% due 3/01/2024 5,200
5,600 Huntingdon County, Pennsylvania, General Authority, College Revenue Bonds
(Juniata College Project), VRDN, Series A, 2.05% due 5/01/2026 (d) 5,600
12,000 Lackawanna County, Pennsylvania, GO, MSTR, VRDN, Series SGB-38, 1.23%
due 9/15/2020 (d) 12,000
5,000 Mount Lebanon, Pennsylvania, School District, GO, MERLOTS, Series B19,
1.26% due 2/15/2027 (d)(f) 5,000
Pennsylvania State Higher Education Assistance Agency, Student Loan
Revenue Bonds, VRDN, Series A (d):
18,700 1.20% due 12/01/2025 18,700
50,000 AMT, 1.20% due 6/01/2029 (a) 50,000
2,900 Pennsylvania State Higher Educational Facilities Authority Revenue Bonds
(Association of Independent Colleges and Universities), VRDN, Series H-9,
2.20% due 5/01/2031 (d) 2,900
Pennsylvania State Turnpike Commission, Turnpike Revenue Refunding
Bonds, VRDN (d):
20,000 Series A-1, 1.15% due 12/01/2030 20,000
8,800 Series A-3, 1.15% due 12/01/2032 8,800
Rhode Island-- Rhode Island State and Providence Plantations, GO, FLOATS (d):
0.4% 26,160 Series 568, 1.21% due 9/01/2017 (f) 26,160
16,170 Series 720, 1.21% due 11/01/2022 (c) 16,170
South Carolina-- Berkeley County, South Carolina, Exempt Facilities, Industrial Revenue Bonds
2.2% (Amoco Chemical Company Project), VRDN, AMT(d):
15,300 1.20% due 4/01/2027 15,300
5,700 1.20% due 4/01/2028 5,700
118,000 Charleston County, South Carolina, School District, GO, BAN, 2% due 2/25/2004 118,941
Florence County, South Carolina, Solid Waste Disposal and Wastewater
Treatment Revenue Bonds (Roche Carolina Inc. Project), VRDN, AMT (d):
35,000 1.20% due 4/01/2026 35,000
19,200 1.20% due 4/01/2027 19,200
South Carolina Jobs EDA, Economic Development Revenue Bonds (Wellman Inc.
Project), VRDN, AMT (d):
5,400 1.25% due 12/01/2010 5,400
12,295 1.25% due 12/01/2012 12,295
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
South Carolina $ 12,500 South Carolina Transportation Infrastructure Bank Revenue Bonds, FLOATS,
(concluded) Series 728, 1.21% due 10/01/2022 (a)(d) $ 12,500
10,700 York County, South Carolina, PCR, Refunding (Duke Power Company Project),
CP, 1.25% due 4/03/2003 10,700
South Dakota-- 13,300 Lawrence County, South Dakota, Solid Waste Disposal Revenue Bonds
0.1% (Homestake Mining), VRDN, AMT, Series A, 1.25% due 7/01/2032 (d) 13,300
Tennessee--5.1% Blount County, Tennessee, Public Building Authority, Local Government Public
Improvement Revenue Bonds, VRDN (a)(d):
2,500 Series A-1-D, 1.15% due 6/01/2025 2,500
8,000 Series A-2-E, 1.15% due 6/01/2035 8,000
Clarksville, Tennessee, Public Building Authority Revenue Bonds, Pooled
Financing (Tennessee Municipal Bond Fund), VRDN (d):
46,405 1.15% due 11/01/2027 46,405
81,200 1.15% due 6/01/2029 81,200
70 1.14% due 7/01/2031 70
22,600 1.14% due 1/01/2033 22,600
Knoxville, Tennessee, Utilities Board Revenue Bonds, VRDN (d)(e):
12,080 (Sub-Electric System), 1.15% due 1/15/2005 12,080
15,915 (Sub-Gas System), 1.15% due 1/15/2005 15,915
18,625 (Sub-Wastewater System), 1.15% due 1/15/2005 18,625
8,100 Loudon, Tennessee, IDB, PCR, Refunding (A.E. Staley Manufacturing Company
Project), VRDN, 1.17% due 6/01/2023 (d) 8,100
25,000 Memphis, Tennessee, Health, Educational and Housing Facility Board Revenue
Bonds (Not-for Profit M/F Program), VRDN, 1.41% due 8/01/2032 (d) 25,000
4,430 Metropolitan Government of Nashville and Davidson County, Tennessee,
Health and Education Facilities Board Revenue Bonds, FLOATS, Series 533,
1.35% due 11/15/2016 (d)(e) 4,430
Montgomery County, Tennessee, Public Building Authority, Pooled Financing
Revenue Bonds, VRDN (d):
34,195 (Montgomery County Loan), 1.15% due 7/01/2019 34,195
36,360 (Tennessee County Loan Pool), 1.15% due 11/01/2027 36,360
Sevier County, Tennessee, Public Building Authority Revenue Bonds, Local
Government Public Improvement, VRDN (d):
69,900 AMT, Series III-A, 1.20% due 6/01/2028 (a) 69,900
7,100 Series II-A-1, 1.15% due 6/01/2024 (a) 7,100
5,560 Series II-E-2, 1.15% due 6/01/2021 (a) 5,560
15,000 Series II-F-3, 1.15% due 6/01/2005 (a) 15,000
10,000 Series III-D-2, 1.15% due 6/01/2017 (a) 10,000
4,690 Series III-D-6, 1.15% due 6/01/2020 (a) 4,690
19,100 Series III-E-1, 1.15% due 6/01/2025 19,100
10,000 Series III-E-4, 1.15% due 6/01/2025 10,000
5,700 Series IV-2, 1.15% due 6/01/2020 (e) 5,700
5,000 Series IV-3, 1.15% due 6/01/2025 (e) 5,000
6,170 Series IV-A-4, 1.15% due 6/01/2020 (e) 6,170
7,000 Series IV-B-3, 1.15% due 6/01/2013 (e) 7,000
6,000 Series IV-B-4, 1.15% due 6/01/2025 (e) 6,000
4,100 Series IV-B-5, 1.15% due 6/01/2022 (e) 4,100
6,635 Series IV-E-3, 1.15% due 6/01/2024 (a) 6,635
3,865 Series IV-E-4, 1.15% due 6/01/2020 (a) 3,865
6,000 Series IV-G-2, 1.15% due 6/01/2022 6,000
26,000 Shelby County, Tennessee, CP, Series A, 1.12% due 4/01/2003 26,000
12,000 Shelby County, Tennessee, Health, Educational and Housing Facilities Board
Revenue Bonds (Hutchison School Project), VRDN, 1.19% due 5/01/2026 (d) 12,000
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Texas--10.1% $ 9,030 ABN Amro Munitops Certificates Trust, Grapevine, Texas, Permanent
School Fund, GO, VRDN, Series 2001-8, 1.23% due 2/15/2007 (d) $ 9,030
15,750 ABN Amro Munitops Certificates Trust, Houston, Texas, Airport, VRDN, AMT,
Series 1998-15, 1.27% due 7/05/2006 (c)(d) 15,750
ABN Amro Munitops Certificates Trust, San Antonio, Texas, VRDN (d):
13,500 Series 1998-22, 1.23% due 1/03/2007 (f) 13,500
29,950 Series 1999-10, 1.23% due 3/07/2007 (f) 29,950
5,075 Aldine, Texas, Independent School District, GO, Refunding, ROCS,
Series II-R-158, 1.23% due 2/15/2020 (d) 5,075
7,445 Austin, Texas, Utility System Revenue Refunding Bonds, ROCS, Series II-R-159,
1.23% due 5/15/2014 (d)(e) 7,445
Bell County, Texas, Health Facilities Development Corporation, Hospital
Revenue Bonds (Scott & White Memorial Hospital), VRDN (d)(f):
2,000 Series 2001-1, 1.15% due 8/15/2031 2,000
28,400 Series B-1, 1.15% due 8/15/2029 28,400
26,500 Series B-2, 1.15% due 8/15/2029 26,500
13,925 Bexar County, Texas, Revenue Bonds, FLOATS, Series 454, 1.21% due
8/15/2008 (d)(f) 13,925
10,000 Brazos River Authority, Texas, Harbor Navigational District, Brazoria County
Revenue Bonds (BASF Corp.), VRDN, AMT, 1.30% due 4/01/2032 (d) 10,000
8,700 Central Texas Housing Finance Corporation, S/F Mortgage Revenue Bonds,
Series 1-R3, 1.14% due 7/10/2003 8,700
7,460 Corpus Christi, Texas, Business and Job Development Corporation, Sales Tax
Revenue Refunding Bonds, ROCS, Series II-R-2001, 1.23% due 9/01/2017 (a)(d) 7,460
4,000 Corpus Christi, Texas, Industrial Development Corp., IDR (Dedietrich USA
Incorporated Project), VRDN, AMT, 1.35% due 11/01/2008 (d) 4,000
Dallas-Fort Worth, Texas, Regional Airport Revenue Bonds, MSTR, VRDN,
AMT (d)(f):
25,300 Series SGB-49, 1.22% due 11/01/2023 25,300
9,495 Series SGB-52, 1.28% due 11/01/2017 9,495
Dallas-Fort Worth, Texas, Regional Airport Revenue Refunding Bonds,
MSTR, VRDN (d):
23,885 AMT, Series SGB-46, 1.28% due 11/01/2020 (f) 23,885
6,600 Series SGB-52, 1.23% due 11/01/2015 (c) 6,600
9,900 Eagle Tax-Exempt Trust, Dallas-Fort Worth, Texas, VRDN, Series 96C,
Class 4301, 1.23% due 11/01/2005 (d) 9,900
6,000 Eagle Tax-Exempt Trust, Dallas, Texas, VRDN, Series 01, Class 4310,
1.23% due 12/01/2026 (d) 6,000
4,915 Eagle Tax-Exempt Trust, San Antonio, Texas, VRDN, Series 01, Class 4311,
1.23% due 8/15/2026 (d) 4,915
11,120 El Paso County, Texas, Housing Finance Corporation, S/F Mortgage Revenue
Bonds, Series A, 1.14% due 12/11/2003 11,120
5,300 Grapevine, Texas, Industrial Development Corporation, Airport Revenue
Refunding Bonds (Southern Air Transport), VRDN, 1.20% due 3/01/2010 (d) 5,300
7,300 Gulf Coast IDA, Texas, Marine Terminal Revenue Bonds (Amoco Oil Company
Project), VRDN, AMT, 1.20% due 4/01/2028 (d) 7,300
7,400 Gulf Coast IDA, Texas, Solid Waste Disposal Revenue Bonds (Citgo Petroleum
Corporation Project), VRDN, AMT, 1.20% due 4/01/2026 (d) 7,400
12,500 Gulf Coast, Texas, Waste Disposal Authority Revenue Bonds (Air Products
Project), VRDN, AMT, 1.40% due 3/01/2035 (d) 12,500
25,000 Gulf Coast Waste Disposal Authority, Texas, Environmental Facilities Revenue
Bonds (American Acryl LP Project), VRDN, AMT, Series B, 1.25%
due 9/01/2036 (d) 25,000
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Texas $ 28,500 Gulf Coast Waste Disposal Authority, Texas, Environmental Facilities Revenue
(continued) Refunding Bonds (Amoco Oil Company Project), VRDN, AMT, 1.20% due
1/01/2026 (d) $ 28,500
36,300 Gulf Coast Waste Disposal Authority, Texas, PCR (Amoco Oil Company Project),
VRDN, AMT, 1.20% due 6/01/2024 (d) 36,300
17,710 Harris County, Texas, FLOATS, Series SG-45, 1.21% due 8/15/2016 (d) 17,710
6,150 Harris County, Texas, Health Facilities Development Corporation, Hospital
Revenue Bonds (Texas Children's Hospital), VRDN, Series B-1, 1.15% due
10/01/2029 (d) 6,150
6,700 Harris County, Texas, Health Facilities Development Corporation, Revenue
Refunding Bonds (Methodist Hospital), VRDN, 1.15% due 12/01/2032 (d) 6,700
10,400 Harris County, Texas, Health Facilities Development Corporation, Special
Facilities Revenue Bonds (Texas Medical Center Project), VRDN, 1.15%
due 2/15/2022 (d)(f) 10,400
11,400 Harris County, Texas, Industrial Development Corporation, Revenue Refunding
Bonds (Shell Oil Company Project), VRDN, 1.15% due 4/01/2027 (d) 11,400
Harris County, Texas, Industrial Development Corporation, Solid Waste
Disposal Revenue Bonds, VRDN, AMT (d):
46,100 (Deer Park Limited Partnership), Series A, 1.30% due 2/01/2023 46,100
12,500 (Deer Park), Series 95-B, 1.30% due 3/01/2023 12,500
10,415 Harris County, Texas, Revenue Refunding Bonds, ROCS, Series II-R-1030,
1.23% due 8/15/2017 (d)(e) 10,415
7,840 Houston, Texas, Water and Sewer System Revenue Bonds, MERLOTS,
Series A-128, 1.26% due 12/01/2029 (d)(f) 7,840
9,760 Laredo, Texas, Housing Finance Corporation, S/F Mortgage Revenue Bonds,
FLOATS, Series 715, 1.28% due 5/03/2004 (d) 9,760
4,860 Middle Rio Grande, Texas, Housing Finance Corporation, S/F Revenue Bonds,
FLOATS, AMT, Series 709, 1.28% due 8/02/2004 (d) 4,860
10,395 Municipal Securities Trust Certificates, Revenue Refunding Bonds, VRDN,
Series 2001-134, Class A, 1.25% due 5/15/2010 (d)(e) 10,395
2,000 North Central Texas, Health Facility Development Corporation Revenue Bonds
(Methodist Hospitals--Dallas), VRDN, Series B, 1.15% due 10/01/2015 (d)(f) 2,000
North Texas Higher Education Authority Inc., Student Loan Revenue Bonds,
VRDN, AMT (a)(d):
12,800 Series C, 1.20% due 4/01/2020 12,800
13,700 Series F, 1.20% due 4/01/2020 13,700
North Texas Higher Education Authority Inc., Student Loan Revenue Refunding
Bonds, VRDN, AMT (d):
26,000 1.20% due 12/01/2032 26,000
29,000 Series A, 1.20% due 4/01/2005 29,000
5,000 Series A, 1.20% due 4/01/2020 5,000
3,000 North Texas Thruway Authority, Dallas, North Thruway Systems, Revenue
Refunding Bonds, VRDN, Series II-R-166, 1.23% due 1/01/2016 (c)(d) 3,000
5,000 Northside, Texas, Independent School District, GO, VRDN, Series B,
1.27% due 8/01/2033 (d) 5,000
Panhandle-Plains, Texas, Higher Education Authority Incorporated, Student
Loan Revenue Bonds, VRDN, AMT, Series A (d):
9,000 1.20% due 6/01/2021 9,000
13,700 1.20% due 6/01/2025 13,700
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Texas $ 4,700 Panhandle-Plains, Texas, Higher Education Authority Incorporated, Student
(concluded) Loan Revenue Refunding Bonds, VRDN, AMT, Series A, 1.20% due 6/01/2008 (d) $ 4,700
5,000 Pasadena, Texas, Independent School District, GO, VRDN, Series A, 1.35%
due 4/01/2004 (d) 5,000
17,335 Port Arthur, Texas, Navigation District, Environmental Facilities Revenue
Refunding Bonds (Motiva Enterprises Project), VRDN, AMT, 1.40% due
12/01/2027 (d) 17,335
10,000 Port Arthur, Texas, Navigation District, Industrial Development Corporation,
Exempt Facilities Revenue Bonds (Air Products and Chemicals Project),
VRDN, AMT, 1.40% due 4/01/2036 (d) 10,000
Port Arthur, Texas, Navigation District Revenue Bonds, VRDN, AMT (d):
20,000 (BASF Corporation Project), 1.30% due 4/01/2033 20,000
10,000 Multi-Mode (Atofina Petrochemicals), Series B, 1.25% due 4/01/2027 10,000
19,200 Port Corpus Christi, Texas, Industrial Development Corporation, Environmental
Facilities Revenue Bonds (Citgo Petroleum Corporation Project), VRDN, AMT,
1.20% due 8/01/2028 (d) 19,200
50,000 Port Corpus Christi, Texas, Nueces County Solid Waste Disposal Revenue
Refunding Bonds (Flint Hills Resources), VRDN, AMT, Series A, 1.55%
due 7/01/2029 (d) 50,000
10,000 San Antonio, Texas, Hotel Occupancy Revenue Bonds, FLOATS, Series SG-51,
1.21% due 8/15/2019 (d) 10,000
12,000 San Antonio, Texas, Water System, CP, 1% due 4/09/2003 12,000
2,200 South Texas Higher Education Authority Incorporated Revenue Bonds, VRDN,
AMT, 1.20% due 12/01/2027 (d)(f) 2,200
7,200 Southeast Texas Housing Finance Corporation, Revenue Refunding Bonds,
Series R-3, 1.152% due 3/11/2004 7,200
45,000 Texas State, College Student Loan, GO, Refunding, 1.125% due 7/01/2003 45,000
50,000 Texas State Department of Housing and Community Affairs, Residential
Mortgage Revenue Bonds, AMT, Series B, 1.25% due 10/01/2003 50,000
9,195 Texas State, GO, Refunding, FLOATS, Series 657, 1.21% due 4/01/2010 (d) 9,195
107,840 Texas State, TRAN, 2.75% due 8/29/2003 108,545
5,530 Texas State University System Financing Revenue Refunding Bonds, ROCS,
Series II-R-1011, 1.23% due 3/15/2019 (d)(e) 5,530
5,770 Travis County, Texas, Housing Finance Corporation, S/F Mortgage Revenue
Bonds, Series 2001-1, 1.094% due 4/10/2003 5,770
4,200 West Side Calhoun County, Texas, Navigation District Sewer and Solid Waste
District Revenue Bonds (BP Chemicals Inc. Project), VRDN, AMT, 1.20%
due 4/01/2031 (d) 4,200
Utah--0.7% 20,000 Intermountain Power Agency, Utah, CP, 1.10% due 4/09/2003 20,000
21,100 Utah County, Utah, Hospital Revenue Refunding Bonds (IHC Health Services
Inc.), VRDN, Series C, 1.15% due 5/15/2035 (d) 21,100
20,000 Utah State Board of Regents, Student Loan Revenue Bonds, VRDN, AMT,
Series C, 1.15% due 11/01/2013 (a)(d) 20,000
12,500 Weber County, Utah, Hospital Revenue Bonds (IHC Health Services), VRDN,
Series A, 1.15% due 2/15/2031 (d) 12,500
Vermont--0.0% 3,460 Vermont HFA, S/F Revenue Bonds, VRDN, AMT, Series 16 A, 1.28%
due 5/01/2032 (d)(e) 3,460
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONTINUED) (IN THOUSANDS)
Face
State Amount Issue Value
Virginia--1.2% $ 6,000 Metropolitan Washington D.C., Airport Authority System Revenue Bonds,
ROCS, Series II-R-195, 1.27% due 10/01/2032 (c)(d) $ 6,000
56,000 Metropolitan Washington D.C., CP, 1.10% due 4/07/2003 56,000
66,400 Norfolk, Virginia, IDA, Revenue Bonds (Pooled Financing Program-Sentara),
CP, 1.03% due 4/10/2003 66,400
3,320 Virginia State, GO, Refunding, ROCS, Series II-R-170, 1.23% due 6/01/2015 (d) 3,320
Washington-- 20,000 ABN Amro Munitops Certificates Trust, Seattle, Washington, GO, VRDN,
2.0% Series 1998-16, 1.22% due 10/04/2006 (d)(f) 20,000
22,900 Clark County, Washington, Public Utility District Number 001, Generating
System Revenue Refunding Bonds, MSTR, VRDN, Series SGA-118, 1.20%
due 1/01/2025 (d)(e) 22,900
14,810 King County, Washington, Sewer Revenue Refunding Bonds, FLOATS,
Series 554, 1.21% due 7/01/2009 (c)(d) 14,810
4,995 Port Seattle, Washington, Revenue Bonds, MERLOTS, AMT, Series B 04,
1.31% due 9/01/2015 (d) 4,995
24,700 Seattle, Washington, Municipal Light and Power Revenue Bonds, RAN,
2.50% due 11/21/2003 24,857
4,945 Snohomish County, Washington, GO, ROCS, Series II-R-1059, 1.23%
due 12/01/2020 (d)(f) 4,945
14,105 Tacoma, Washington, Water Revenue Refunding Bonds, FLOATS, Series 555,
1.21% due 12/01/2009 (c)(d) 14,105
15,075 Washington State, GO, PUTTERS, Series 333, 1.30% due 12/01/2014 (d)(f) 15,075
12,985 Washington State, GO, Refunding, MERLOTS, Series A57, 1.26% due
1/01/2011 (d)(f) 12,985
Washington State Housing Finance Commission, M/F Housing Revenue Bonds,
VRDN, AMT (d):
6,400 (Arbors on the Park Project), 1.30% due 10/01/2024 6,400
9,695 (Courtside Apartments Project), 1.25% due 1/01/2026 9,695
14,070 Washington State, Motor Vehicle Fuel Tax, Municipal Securities Trust
Certificates, GO, VRDN, Series 2001-112, Class A, 1.20% due 1/07/2021 (d) 14,070
Washington State Public Power Supply Systems, Electric Revenue Refunding
Bonds, VRDN (d)(f):
8,700 (Project Number 2), Series 2A-1, 1.10% due 7/01/2012 8,700
6,500 (Project Number 2), Series 2A-2, 1.10% due 7/01/2012 6,500
4,600 (Project Number 3), Series 3-A, 1.07% due 7/01/2018 4,600
24,910 Washington State Public Power Supply Systems, Revenue Refunding Bonds
(Nuclear Project Number 1), VRDN, Series 1A-2, 1.10% due 7/01/2017 (d) 24,910
West Virginia-- 10,695 ABN Amro Munitops Certificates Trust, West Virginia State, GO, VRDN,
0.2% Series 2000-12, 1.23% due 6/04/2008 (d)(f) 10,695
11,220 Hancock County, West Virginia, County Commission, IDR, Refunding
(The Boc Group Inc. Project), VRDN, 1.17% due 8/01/2005 (d) 11,220
MASTER TAX-EXEMPT TRUST
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2003 (CONCLUDED) (IN THOUSANDS)
Face
State Amount Issue Value
Wisconsin-- $ 16,000 Carlton, Wisconsin, PCR, Refunding (Wisconsin Power and Light Company
2.1% Project), VRDN, Series B, 1.55% due 9/01/2005 (d) $ 16,000
14,850 Eagle Tax-Exempt Trust, Wisconsin Ball Park, VRDN, Series 98, Class 4901,
1.23% due 12/15/2026 (d) 14,850
350 Eagle Tax-Exempt Trust, Wisconsin Housing and Economic Development,
VRDN, Series 94C, Class 4901, 1.23% due 9/01/2015 (d) 350
4,235 Hartland, Wisconsin, IDR (Commercial Communications Inc. Project), VRDN,
AMT, 1.40% due 8/01/2009 (d) 4,235
50,000 Milwaukee, Wisconsin, RAN, Series B, 2.75% due 8/28/2003 50,268
19,000 Pleasant Prairie, Wisconsin, Pollution Revenue Refunding Bonds (Wisconsin
Electric Power Company), VRDN, Series C, 1.45% due 9/01/2030 (d) 19,000
7,775 Wisconsin Housing and Economic Development Authority, Home Ownership
Revenue Refunding Bonds, VRDN, AMT, Series E, 1.25% due 3/01/2028 (d) 7,775
10,400 Wisconsin State, CP, Series 2000A, 1.05% due 4/11/2003 10,400
34,935 Wisconsin State, GO, CP, 1.15% due 5/21/2003 34,935
16,000 Wisconsin State Petroleum Inspection Fee Revenue Bonds, CP, Series 2002,
1.05% due 4/04/2003 16,000
Wisconsin State Transportation Revenue Bonds, CP:
26,500 1.12% due 4/04/2003 26,500
12,670 1.15% due 5/29/2003 12,670
14,050 Wisconsin State Transportation Revenue Bonds, ROCS, Series II-R-1021,
1.23% due 7/01/2021 (c)(d) 14,050
Wyoming--0.6% 12,960 Lincoln County, Wyoming, PCR, Refunding (Pacificorp Projects), VRDN,
1.25% due 11/01/2024 (a)(d) 12,960
16,960 Sweetwater County, Wyoming, PCR, Refunding (Pacificorp Project), VRDN,
1.25% due 11/01/2024 (a)(d) 16,960
35,000 Wyoming State Education Fund, TRAN, 2.50% due 6/27/2003 35,077
Puerto Rico-- 33,380 Puerto Rico Commonwealth TRAN, 2.50% due 7/30/2003 33,492
0.3%
Total Investments (Cost--$10,586,396*)--100.0% 10,586,396
Other Assets Less Liabilities--0.0% 4,783
-----------
Net Assets--100.0% $10,591,179
===========
(a)AMBAC Insured.
(b)Prerefunded.
(c)FGIC Insured.
(d)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at March 31, 2003.
(e)FSA Insured.
(f)MBIA Insured.
(g)XL Captial Insured.
(h)FHLMC Collateralized.
*Cost for Federal income tax purposes.
See Notes to Financial Statements.
MASTER TAX-EXEMPT TRUST
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 2003
Assets:
Investments, at value (identified cost--$10,586,395,571) $10,586,395,571
Cash 5,023
Receivables:
Interest $ 45,934,952
Securities sold 16,471 45,951,423
---------------
Prepaid registration fees and other assets 712,132
---------------
Total assets 10,633,064,149
---------------
Liabilities:
Payables:
Securities purchased 40,000,000
Investment adviser 1,729,476 41,729,476
---------------
Accrued expenses and other liabilities 155,290
---------------
Total liabilities 41,884,766
---------------
Net Assets $10,591,179,383
===============
Net Assets Consist of:
Investors' capital $10,591,179,383
---------------
Net assets $10,591,179,383
===============
See Notes to Financial Statements.
MASTER TAX-EXEMPT TRUST
STATEMENT OF OPERATIONS FOR THE PERIOD FEBRUARY 13, 2003++ TO MARCH 31, 2003
Investment Income:
Interest and amortization of premium and discount earned $ 16,809,536
Expenses:
Investment advisory fees $ 2,620,639
Accounting services 185,213
Custodian fees 35,173
Trustees' fees and expenses 9,688
Pricing fees 8,578
Professional fees 750
Other 10,753
---------------
Total expenses 2,870,794
---------------
Investment income--net 13,938,742
---------------
Realized Gain on Investments--Net 291,802
---------------
Net Increase in Net Assets Resulting from Operations $ 14,230,544
===============
++Commencement of operations.
See Notes to Financial Statements.
MASTER TAX-EXEMPT TRUST
STATEMENT OF CHANGES IN NET ASSETS
For the Period
February 13, 2003++
to March 31,
2003
Increase (Decrease) in Net Assets:
Operations:
Investment income--net $ 13,938,742
Realized gain on investments--net 291,802
---------------
Net increase in net assets resulting from operations 14,230,544
---------------
Capital Transactions:
Proceeds from contributions 3,757,178,224
Fair value of net asset contributions 10,591,437,724
Fair value of withdrawals (3,771,767,109)
---------------
Net increase in net assets derived from capital transactions 10,576,848,839
---------------
Net Assets:
Total increase in net assets 10,591,079,383
Beginning of period 100,000
---------------
End of period $10,591,179,383
===============
++Commencement of operations.
See Notes to Financial Statements.
MASTER TAX-EXEMPT TRUST
FINANCIAL HIGHLIGHTS
For the Period
February 13, 2003++
The following ratios have been derived from to March 31,
information provided in the financial statements. 2003
Total Investment Return: .68%*
===============
Ratios to Average Net Assets:
Expenses .21%*
===============
Investment income and realized gain on investments--net 1.04%*
===============
Supplemental Data:
Net assets, end of period (in thousands) $ 10,591,179
===============
*Annualized.
++Commencement of operations.
See Notes to Financial Statements.
MASTER TAX-EXEMPT TRUST
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Master Tax-Exempt Trust (the "Trust") is registered under the
Investment Company Act of 1940 and is organized as a Delaware
business trust. The Declaration of Trust permits the Trustees to
issue nontransferable interest in the Trust, subject to certain
limitations. On February 13, 2003, the Trust received all of the
assets of CMA Tax-Exempt Fund, a registered investment company that
converted to a master/feeder structure. The Trust's financial
statements are prepared in conformity with accounting principles
generally accepted in the United States of America, which may
require the use of management accruals and estimates. The following
is a summary of significant accounting policies followed by the
Trust.
(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 demand notice payment period. In the case of a floating rate
instrument, the remaining maturity is the next coupon date on which
the interest rate is to be adjusted.
(b) Income taxes--The Trust is classified as a partnership for
Federal income tax purposes. As such, each investor in the Trust is
treated as owner of its proportionate share of the net assets,
income, expenses and realized and unrealized gains and losses of the
Trust. Accordingly, as a "pass through" entity, the Trust pays no
income dividends or capital gains distributions. Therefore, no
Federal income tax provision is required. It is intended that the
Trust's assets will be managed so an investor in the Trust can
satisfy the requirements of subchapter M of the Internal Revenue
Code.
(c) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Realized gains and losses on security
transactions are determined on the identified cost basis. Interest
income (including amortization of premium and discount) is
recognized on the accrual basis.
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.
FAM is responsible for the management of the Trust's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Trust. For such
services, the Trust pays a monthly fee based upon the average daily
value of the Trust's net assets at the following annual rates: .25%
of the Trust's average daily net assets not exceeding $500 million;
..175% of the average daily net assets in excess of $500 million but
not exceeding $1 billion; and .125% of the average daily net assets
in excess of $1 billion.
For the period February 13, 2003 to March 31, 2003, the Trust
reimbursed FAM $30,048 for certain accounting services.
Certain officers and/or trustees of the Trust are officers and/or
directors of FAM, PSI, and/or ML & Co.
MASTER TAX-EXEMPT TRUST
INDEPENDENT AUDITORS' REPORT
To the Investors and Board of
Trustees of Master Tax-Exempt Trust:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Master Tax-
Exempt Trust as of March 31, 2003, and the related statements of
operations and changes in net assets, and the financial highlights
for the period February 13, 2003 (commencement of operations)
through March 31, 2003. These financial statements and financial
highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and 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 as of March 31, 2003, by
correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures.
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 audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Master Tax-Exempt Trust as of March 31, 2003,
the results of its operations, the changes in its net assets, and
its financial highlights for the period February 13, 2003 through
March 31, 2003, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
May 21, 2003
CMA TAX-EXEMPT FUND
OFFICERS AND TRUSTEES
Number of
Portfolios Other
in Fund Director-
Position(s) Length Complex ships
Held of Time Overseen by Held by
Name, Address & Age with Fund Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Interested Trustee
Terry K. Glenn* President 1999 to President and Chairman of Merrill Lynch 118 Funds None
P.O. Box 9011 and present Investment Managers, L.P. ("MLIM")/Fund 162 Portfolios
Princeton, Trustee and Asset Management, L.P. ("FAM")-Advised
NJ 08543-9011 1988 to Funds since 1999; Chairman (Americas
Age: 62 present Region) of MLIM from 2000 to 2002;
Executive Vice President of MLIM and FAM
(which terms as used herein include their
corporate predecessors) from 1983 to 2002;
President of FAM Distributors, Inc. ("FAMD")
from 1986 to 2002 and Director thereof from
1991 to 2002; Executive Vice President and
Director of Princeton Services, Inc.
("Princeton Services") from 1993 to 2002;
President of Princeton Administrators, L.P.
from 1989 to 2002; Director of Financial
Data Services, Inc. from 1985 to 2002.
*Mr. Glenn is a director, trustee or member of an advisory board of
certain other investment companies for which FAM or MLIM acts as
investment adviser. Mr. Glenn is an "interested person," as
described in the Investment Company Act, of the Fund based on his
former positions with FAM, MLIM, FAMD, Princeton Services and
Princeton Administrators, L.P. The Trustee's term is unlimited.
Directors serve until their resignation, removal or death, or until
December 31 of the year in which they turn 72. As Fund President,
Mr. Glenn serves at the pleasure of the Board of Trustees.
Number of
Portfolios Other
in Fund Director-
Position(s) Length Complex ships
Held of Time Overseen by Held by
Name, Address & Age with Fund Served* Principal Occupation(s) During Past 5 Years Trustee Trustee
Independent Trustees
Ronald W. Forbes Trustee 1988 to Professor Emeritus of Finance, School of 45 Funds None
P.O. Box 9095 present Business, State University of New York at 51 Portfolios
Princeton, Albany since 2000 and Professor thereof
NJ 08543-9095 from 1989 to 2000; International Consultant,
Age: 62 Urban Institute from 1995 to 1999.
Cynthia A. Montgomery Trustee 1994 to Professor, Harvard Business School since 45 Funds Unum
P.O. Box 9095 present 1989; Director, Unum Provident Corporation 51 Portfolios Provident
Princeton, since 1990; Director, Newell Rubbermaid, Corporation;
NJ 08543-9095 Inc. since 1995. Newell
Age: 50 Rubbermaid,
Inc.
CMA TAX-EXEMPT FUND
OFFICERS AND TRUSTEES (CONTINUED)
Number of
Portfolios Other
in Fund Director-
Position(s) Length Complex ships
Held of Time Overseen by Held by
Name, Address & Age with Fund Served* Principal Occupation(s) During Past 5 Years Trustee Trustee
Independent Trustees (concluded)
Charles C. Reilly Trustee 1990 to Self-employed financial consultant since 45 Funds None
P.O. Box 9095 present 1990. 51 Portfolios
Princeton,
NJ 08543-9095
Age: 71
Kevin A. Ryan Trustee 1992 to Founder and Director Emeritus of The 45 Funds None
P.O. Box 9095 present Boston University Center for the 51 Portfolios
Princeton, Advancement of Ethics and Character;
NJ 08543-9095 Professor of Education at Boston
Age: 70 University from 1982 to 1999 and
Professor Emeritus since 1999.
Roscoe S. Suddarth Trustee 2000 to President, Middle East Institute from 45 Funds None
P.O. Box 9095 present 1995 to 2001; Foreign Service Officer, 51 Portfolios
Princeton, United States Foreign Service from 1961
NJ 08543-9095 to 1995; Career Minister from 1989 to
Age: 67 1995; Deputy Inspector General, U.S.
Department of State from 1991 to 1994;
U.S. Ambassador to the Hashemite
Kingdom of Jordan from 1987 to 1990.
Richard R. West Trustee 1988 to Dean Emeritus of New York University, 45 Funds Bowne & Co.,
P.O. Box 9095 present Leonard N. Stern School of Business 51 Portfolios Inc.; Vornado
Princeton, Administration since 1994. Operating
NJ 08543-9095 Company;
Age: 65 Vornado
Realty Trust;
Alexander's,
Inc.
Edward D. Zinbarg Trustee 2000 to Self-employed financial consultant since 45 Funds None
P.O. Box 9095 present 1994. 51 Portfolios
Princeton,
NJ 08543-9095
Age: 68
*The Trustee's term is unlimited. Directors serve until their
resignation, removal, or death, or until December 31 of the year in
which they turn 72.
CMA TAX-EXEMPT FUND
OFFICERS AND TRUSTEES (CONCLUDED)
Position(s) Length
Held of Time
Name, Address & Age with Fund Served* Principal Occupation(s) During Past 5 Years
Fund Officers
Donald C. Burke Vice 1993 to First Vice President of MLIM and FAM since 1997 and Treasurer thereof
P.O. Box 9011 President present since 1999; Senior Vice President and Treasurer of Princeton Services
Princeton, and and since 1999; Vice President of FAMD since 1999; Director of MLIM Taxation
NJ 08543-9011 Treasurer 1999 to since 1990.
Age: 42 present
Kenneth A. Jacob Senior 2002 to Managing Director of MLIM since 2000; Director (Tax-Exempt Fixed Income)
P.O. Box 9011 Vice present of MLIM from 1997 to 2000.
Princeton, President
NJ 08543-9011
Age: 51
John M. Loffredo Senior 2002 to Managing Director of MLIM since 2000; Director (Tax-Exempt Fixed Income)
P.O. Box 9011 Vice present of MLIM from 1998 to 2000.
Princeton, President
NJ 08543-9011
Age: 39
Phillip S. Gillespie Secretary 2000 to First Vice President of MLIM since 2001; Director (Legal Advisory) of MLIM
P.O. Box 9011 present from 2000 to 2001; Vice President of MLIM from 1999 to 2000; Attorney
Princeton, associated with MLIM since 1998; Assistant General Counsel of Chancellor
NJ 08543-9011 LGT Asset Management, Inc. from 1997 to 1998.
Age: 39
*Officers of the Fund serve at the pleasure of the Board of
Trustees.
Further information about the Fund's Officers and Trustees is
available in the Fund's Statement of Additional Information, which
can be obtained without charge by calling 1-800-MER-FUND.
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
or 800-262-4636.
Item 2 - Did registrant adopt a code of ethics, as of the end of the
period covered by this report, that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by
the registrant or a third party? If not, why not? Briefly describe
any amendments or waivers that occurred during the period. State
here if code of ethics/amendments/waivers are on website and give
website address-. State here if fund will send code of ethics to
shareholders without charge upon request--N/A (not answered until
July 15, 2003 and only annually for funds)
Item 3 - Did the registrant's board of directors determine that the
registrant either: (i) has at least one audit committee financial
expert serving on its audit committee; or (ii) does not have an
audit committee financial expert serving on its audit committee? If
yes, disclose name of financial expert and whether he/she is
"independent," (fund may, but is not required, to disclose
name/independence of more than one financial expert) If no, explain
why not. -N/A (not answered until July 15, 2003 and only annually
for funds)
Item 4 - Disclose annually only (not answered until December 15,
2003)
(a) Audit Fees - Disclose aggregate fees billed for each of the last
two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements
for those fiscal years. N/A.
(b) Audit-Related Fees - Disclose aggregate fees billed in each of
the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance
of the audit of the registrant's financial statements and are not
reported under paragraph (a) of this Item. Registrants shall
describe the nature of the services comprising the fees disclosed
under this category. N/A.
(c) Tax Fees - Disclose aggregate fees billed in each of the last
two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the
fees disclosed under this category. N/A.
(d) All Other Fees - Disclose aggregate fees billed in each of the
last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs
(a) through (c) of this Item. Registrants shall describe the nature
of the services comprising the fees disclosed under this category.
N/A.
(e)(1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation
S-X. N/A.
(e)(2)Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the
audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X. N/A.
(f) If greater than 50%, disclose the percentage of hours expended
on the principal accountant's engagement to audit the registrant's
financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal
accountant's full-time, permanent employees. N/A.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to
the registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant for each of the
last two fiscal years of the registrant. N/A.
(h) Disclose whether the registrant's audit committee has considered
whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence. N/A.
Item 5 - If the registrant is a listed issuer as defined in Rule 10A-
3 under the Exchange Act, state whether or not the registrant has a
separately-designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act. If the
registrant has such a committee, however designated, identify each
committee member. If the entire board of directors is acting as the
registrant's audit committee in Section 3(a)(58)(B) of the Exchange
Act, so state.
If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act regarding an exemption from the listing
standards for audit committees.
(Listed issuers must be in compliance with the new listing rules by
the earlier of their first annual shareholders meeting after January
2004, or October 31, 2004 (annual requirement))
Item 6 - Reserved
Item 7 - For closed-end funds that contain voting securities in
their portfolio, describe the policies and procedures that it uses
to determine how to vote proxies relating to those portfolio
securities. N/A (not answered until July 1, 2003)
Item 8--Reserved
Item 9(a) - Disclose the conclusions of the registrant's principal
executive officer or officers and principal financial officer or
officers, or persons performing similar functions, about the
effectiveness of the registrant's disclosure controls and procedures
(as defined in Rule 30a-2(c) under the Act (17 CFR 270.30a-2(c)))
based on their evaluation of these controls and procedures as of a
date within 90 days of the filing date of the report that includes
the disclosure required by this paragraph. N/A (not answered until
July 15, 2003 and only annually for funds)
Item 9(b)--There were no significant changes in the registrant's
internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Item 10 - Exhibits
10(a) - Attach code of ethics or amendments/waivers, unless code of
ethics or amendments/waivers is on website or offered to
shareholders upon request without charge. N/A.
10(b) - Attach certifications pursuant to Section 302 of the
Sarbanes-Oxley Act. Attached hereto.
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CMA Tax-Exempt Fund
By: _/s/ Terry K. Glenn_______
Terry K. Glenn,
President of
CMA Tax-Exempt Fund
Date: May 21, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
By: _/s/ Terry K. Glenn________
Terry K. Glenn,
President of
CMA Tax-Exempt Fund
Date: May 21, 2003
By: _/s/ Donald C. Burke________
Donald C. Burke,
Chief Financial Officer of
CMA Tax-Exempt Fund
Date: May 21, 2003
Attached hereto as an exhibit are the certifications pursuant to
Section 906 of the Sarbanes-Oxley Act.