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 811-5011
Name of Fund: CMA North Carolina Municipal Money Fund of CMA
Multi-State Municipal Series Trust
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President,
CMA North Carolina Municipal Money Fund of CMA Multi-State Municipal
Series Trust, 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: 03/31/04
Date of reporting period: 04/01/03 - 09/30/03
Item 1 - Attach shareholder report
(BULL LOGO)
Merrill Lynch Investment Managers
www.mlim.ml.com
CMA North Carolina
Municipal Money Fund
Semi-Annual Report
September 30, 2003
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. An
investment in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the
Fund. Past performance results shown in this report should not be
considered a representation of future performance, which will
fluctuate. Statements and other information herein are as dated and
are subject to change.
CMA North Carolina Municipal Money Fund
of CMA Multi-State Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
CMA North Carolina Municipal Money Fund
Officers and Trustees
Terry K. Glenn--President and Trustee
Ronald W. Forbes--Trustee
Cynthia A. Montgomery--Trustee
Charles C. Reilly--Trustee
Kevin A. Ryan--Trustee
Roscoe S. Suddarth--Trustee
Richard R. West--Trustee
Edward D. Zinbarg--Trustee
Kenneth A. Jacob--Senior Vice President
John M. Loffredo--Senior Vice President
Darrin J. SanFillippo--Vice President
Donald C. Burke--Vice President and Treasurer
Phillip S. Gillespie--Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
800-221-7210*
*For inquiries regarding your CMA account, call 800-CMA-INFO
(800-262-4636).
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
A Letter From the President
Dear Shareholder
Now in its final quarter, 2003 has been a meaningful year in many
respects. After one of the most significant equity market downturns
in many investors' memories, this year finally brought hopeful signs
for a sustainable economic recovery. Sub par economic growth of 1.4%
in the first quarter of 2003 increased to projected growth of more
than 4% in the second half of the year. With that good news, fixed
income investments, which had become the asset class of choice
during the long equity market decline, faced new challenges.
The Federal Reserve Board continued its accommodative monetary
policy, lowering the Federal Funds rate in June to 1%, its lowest
level since 1958. With this move, the short end of the yield curve
remained relatively flat and it became increasingly difficult to
find attractive income opportunities. Through September 30, 2003,
both the Bond Market Association (BMA) Index and the one-year
Municipal Market Data (MMD) Index averaged 1.03% for the year. Rates
on the BMA Index, which measures the shortest end of the yield
curve, averaged .85% during the third quarter versus 1.16% in the
second quarter. Rates on the one-year MMD Index averaged .98% in the
third quarter, just below the second quarter average of 1%.
Against this backdrop, our portfolio managers continued to work
diligently to maximize tax-exempt returns consistent with the
preservation of capital. With that said, remember also that the
advice and guidance of a skilled financial advisor often can help
you choose those investments that will best serve you as you plan
for your financial future.
Finally, I am proud to premiere a new look to our shareholder
communications. Our portfolio manager commentaries have been trimmed
and organized in such a way that you can get the information you
need at a glance, in plain language. Today's markets are confusing
enough. We want to help you put it all in perspective. The report's
new size also allows us certain mailing efficiencies. Any cost
savings in production or postage are passed on to the Fund and,
ultimately, to Fund shareholders.
We thank you for trusting Merrill Lynch Investment Managers with
your investment assets, and we look forward to serving you in the
months and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Trustee
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
A Discussion With Your Fund's Portfolio Manager
With interest rates low and expected to remain that way for some
time, we looked increasingly to the higher yields offered by fixed
rate notes during the period.
How did the Fund perform during the period in light of the existing
market conditions?
For the six-month period ended September 30, 2003, CMA North
Carolina Municipal Money Fund paid shareholders a net annualized
yield of .39%.* As of September 30, 2003, the Fund's seven-day yield
was .39%.
The Federal Reserve Board cut the Federal Funds rate once more
during the six-month period, sending interest rates to their lowest
levels in almost 50 years. Despite indications that the economy was
strengthening gradually, the Federal Reserve Board emphasized its
concern that deflation was a bigger threat to the economy than
inflation, and reassured investors that it planned to keep short-
term interest rates low until consistent growth in the economy and
employment was evident.
The expectation for a stable short-term interest rate environment
created a strong demand for fixed rate notes with maturities of
six months - one year. This caused yields on these notes to fall
later in the period and somewhat flattened the yield curve when
compared to variable rate demand securities. However, our aggressive
pursuit of fixed rate notes earlier in the period enabled us to lock
in a favorable spread above variable rate securities. This strategy
enhanced the performance of the Fund during the six-month period.
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
Describe conditions in the state of North Carolina during the
period.
North Carolina's economy continued to outperform the nation's, but
its recovery remained fragile. Although employment grew in the first
half of the year, average weekly hours in manufacturing were
stagnant and demand for textiles and furniture remained weak. In
fiscal year 2003, the state closed a $1.65 billion deficit using
several one-time fund transfers, including $30 million from the
Tobacco Trust Fund, $10 million from the Health and Wellness Fund
and $250 million from the Highway Trust Fund. The 2004-2005 budget
was passed in June. To balance the budget, state officials proposed
spending and job cuts as well as the suspension of $1 billion in
planned tax breaks.
Despite the underlying concerns, we believe North Carolina is
positioned to outpace the nation in terms of growth when the
economic recovery gains strength. This is largely thanks to its
diversified economy and lower-than-average debt burden.
How did you manage the Fund during the period?
In the first half of the period, yields declined from already low
levels as investors worried about the potential for deflation and
its impact on Federal Reserve Board monetary policy. The falling
yields happened to coincide with modest issuance of new North
Carolina short-term fixed rate securities. Although we participated
in a handful of opportunities--mostly small county-level issues and
other secondary market notes--we were not able to extend the Fund's
average portfolio maturity as much as we would have liked.
Conditions improved somewhat in the second half of the period when
we saw an increase in municipal supply. During this time, we added
longer-term, higher-yielding fixed paper to the portfolio when
prudent, purchasing approximately $26 million of fixed notes with
yields of .95% or more. The ability to lock in these rates benefited
Fund performance.
During most of the past six months, we looked to maintain a larger
percentage of fixed rate paper than our peers. Early in the period,
however, we were careful to keep enough of the Fund's assets in
short-maturity holdings to handle anticipated tax-time shareholder
redemptions and to take advantage of the expected spike in yields on
these securities. During September, municipal issuance picked up.
This coincided with the end of the quarter, when brokers typically
offer variable paper at somewhat more attractive yields. As a
result, we increasingly took inflows of cash and made investments in
this area.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
How would you characterize the portfolio's position at the close of
the period?
The Fund ended the period with an average portfolio maturity of 34
days versus 32 days for the average of funds in its iMoneyNet, Inc.
category. This compared to an average life of 30 days at the
beginning of the period, just one day longer than the iMoneyNet
group's average maturity at that same time. As of September 30,
2003, the Fund had $257.0 million in net assets, an 11% decline from
March 31, 2003.
We continue to take a neutral approach to the North Carolina short-
term municipal market, given our expectation that the Federal
Reserve Board will leave interest rates unchanged for the
foreseeable future. In the months ahead, we will continue to monitor
developments in the national and North Carolina economies,
maintaining our basic investment strategy while shifting the Fund's
allocation between fixed and variable rate notes in what we believe
are the best interests of our shareholders.
We also will keep a watchful eye on the Federal Reserve Board's
monetary policy and stand ready to respond with changes to our
investment approach as needed. Moreover, with a majority of fixed
rate issuance behind us, we anticipate the short-term tax-exempt
yield curve will remain relatively flat for the near term. Thus,
unless the economy changes course and is weak enough to generate
another cut in the Federal Funds interest rate, we expect to
purchase fewer fixed rate securities than we did in the current
period.
Darrin J. SanFillippo
Vice President and Portfolio Manager
October 9, 2003
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
Schedule of Investments (In Thousands)
Face
State Amount Municipal Bonds Value
North $ 1,800 Alamance County, North Carolina, Industrial Facilities and Pollution Control
Carolina--95.9% Financing Authority, IDR (Millender Project), VRDN, AMT, 1.20% due 12/01/2020 (a) $ 1,800
2,800 Ashe County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (Oldham Saw Inc. Project),
VRDN, AMT, 1.20% due 5/01/2014 (a) 2,800
2,100 Buncombe County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Refunding Bonds (Industrial Development Alliance),
VRDN, AMT, 1.33% due 8/01/2009 (a) 2,100
6,600 Cabarrus County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (S&D Coffee Inc. Project), VRDN, AMT,
1.15% due 9/01/2011 (a) 6,600
6,600 Chapel Hill University, North Carolina, Hospital Revenue Refunding Bonds, VRDN,
Series B, 1.22% due 2/15/2031 (a) 6,600
1,395 Charlotte, North Carolina, COP (Fiscal Year 2000 Equipment Acquisition Project),
5.25% due 3/01/2004 1,420
2,615 Charlotte, North Carolina, GO, FLOATS, Series 500, 1.14% due 5/01/2016 (a) 2,615
2,435 Charlotte, North Carolina, Public Improvement, GO, Series A, 4.75% due 2/01/2004 2,465
Charlotte, North Carolina, Water and Sewer, GO:
1,035 4.75% due 2/01/2004 1,048
1,000 5.80% due 2/01/2004 (e) 1,025
2,709 Chocowinity, North Carolina, BAN, 2.50% due 10/22/2003 2,711
1,623 Faith Town, North Carolina, BAN, 1.75% due 6/02/2004 1,630
1,940 Gaston County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Marlatex Corporation Project), VRDN, AMT, 1.25% due 6/01/2015 (a) 1,940
585 Granville County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (Lace Lastics Company Inc. Project),
VRDN, AMT, 1.25% due 10/01/2005 (a) 585
200 Guilford County, North Carolina, GO, VRDN, Series C, 1.10% due 10/01/2017 (a) 200
Guilford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Neal Manufacturing), VRDN, AMT (a):
500 1.35% due 9/01/2010 500
1,200 1.20% due 11/01/2013 1,200
2,200 1.20% due 12/01/2014 2,200
2,600 1.20% due 10/01/2019 2,600
3,700 1.30% due 3/01/2022 3,700
25,015 Halifax County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, Exempt Facilities (Westmoreland), VRDN, 1.20%
due 12/01/2019 (a) 25,015
1,600 Harnett County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Edwards Brothers Inc. Project), VRDN, AMT, 1.20%
due 1/01/2007 (a) 1,600
6,000 Hertford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Easco Corporation Project), VRDN, AMT, 1.22%
due 11/01/2013 (a) 6,000
Holly Ridge, North Carolina, GO, BAN:
325 2.50% due 1/28/2004 326
1,080 1.60% due 3/10/2004 1,083
270 2% due 3/10/2004 271
2,500 Johnston County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Hamlin Sheet Metal Co. Inc.), VRDN, AMT, 1.20%
due 11/01/2017 (a) 2,500
5,200 Kernersville, North Carolina, GO, BAN, 2% due 5/19/2004 5,233
2,635 Lincoln County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Packaging NC Project), VRDN, 1.23% due 10/01/2013 (a) 2,635
9,000 Martin County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Penco Products Project), VRDN, AMT, 1.22% due 9/01/2022 (a) 9,000
Portfolio Abbreviations for CMA North Carolina Municipal Money Fund
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
COP Certificates of Participation
CP Commercial Paper
FLOATS Floating Rate Securities
GO General Obligation Bonds
HFA Housing Finance Agency
IDR Industrial Development Revenue Bonds
MERLOTS Municipal Extendible Receipt Liquidity Option
Tender Securities
PCR Pollution Control Revenue Bonds
PUTTERS Puttable Tax-Exempt Receipts
ROCS Reset Option Certificates
VRDN Variable Rate Demand Notes
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
Schedule of Investments (continued) (In Thousands)
Face
State Amount Municipal Bonds Value
North Carolina Mecklenburg County, North Carolina, Industrial Facilities and Pollution Control
(concluded) Financing Authority, Industrial Revenue Bonds, VRDN, AMT (a):
$ 800 (Ferguson Supply and Box Manufacturing), 1.20% due 8/01/2010 $ 800
1,500 (Griffith Micro Science Project), 1.20% due 11/01/2007 1,500
5,850 (Southern Steel Company LLC Project), 1.15% due 3/02/2015 5,850
3,500 Mecklenburg County, North Carolina, Public Improvement, GO, Series B, 3.25%
due 2/01/2004 3,525
14,115 Municipal Securities Trust Certificates, GO, VRDN, Series 138, Class A, 1.12%
due 3/16/2015 (a) 14,115
949 Newland, North Carolina, GO, BAN, 1.50% due 10/15/2003 949
3,200 North Carolina Agriculture Finance Authority, Agriculture Development Revenue
Bonds (Albemarle Cotton Growers), VRDN, AMT, 1.20% due 7/01/2014 (a) 3,200
8,610 North Carolina Agriculture Finance Authority, Agriculture Development Revenue
Refunding Bonds (Harvey Fertilizer and Gas Project), VRDN, AMT, 1.20% due 6/01/2016 (a) 8,610
North Carolina Capital Facilities Finance Agency, Educational Facilities Revenue
Bonds, VRDN (a):
3,500 (Barton College), 1.10% due 2/01/2013 3,500
655 (Canterbury School Project), 1.10% due 8/01/2022 655
17,700 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, MERLOTS,
VRDN, Series A22, 1.15% due 1/01/2024 (a) 17,700
1,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Refunding Bonds,
Series A, 5.50% due 1/01/2004 (c) 1,011
North Carolina HFA, Home Ownership Revenue Bonds, VRDN, AMT (a):
1,600 Series 15-C, 1.10% due 7/01/2032 (d) 1,600
6,500 Series 16-C, 1.10% due 7/01/2032 6,500
North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds,
VRDN (a):
8,235 (Cabarrus Memorial Hospital Project), AMT, 1.10% due 3/01/2028 8,235
5,865 (Randolph Hospital Inc. Project), 1.05% due 3/01/2024 5,865
4,445 North Carolina Medical Care Commission, Retirement Facilities Revenue Refunding
Bonds (Aldersgate Project), VRDN, 1.15% due 1/01/2031 (a) 4,445
North Carolina Municipal Power Agency Number 1, Catawba Electric Revenue Bonds,
VRDN (a):
6,800 PUTTERS, Series 341, 1.13% due 1/01/2015 (b) 6,800
4,335 ROCS, Series II R-211, 1.15% due 1/01/2020 (c) 4,335
North Carolina State, GO, VRDN (a):
4,995 FLOATS, Series 828, 1.05% due 7/08/2004 4,995
5,500 MERLOTS, Series A23, 1.15% due 3/01/2027 5,500
1,010 Piedmont Triad Airport Authority, North Carolina, Special Facility Revenue Bonds
(Cessna Aircraft Company Project), VRDN, 1.20% due 10/01/2012 (a) 1,010
6,555 Robeson County, North Carolina, GO, BAN, 2.75% due 10/22/2003 6,561
2,300 Rowan County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, PCR, IDR (Hon Industries Project), VRDN, AMT, 1.20%
due 4/01/2018 (a) 2,300
2,300 Rutherford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (All American Homes of North Carolina), VRDN, AMT, 1.35%
due 11/01/2011 (a) 2,300
2,380 Sampson County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Dubose Strapping Inc. Project), VRDN, AMT, 1.25% due 1/01/2012 (a) 2,380
2,486 Sampson County, North Carolina, Water and Sewer District II, GO, BAN, 1.50% due
1/28/2004 2,491
3,000 Stanley County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Patrick Industries Project), VRDN, AMT, 1.35% due 8/01/2010 (a) 3,000
3,220 Vance County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (HH Hunt Manufacturing Facilities LLC Project), VRDN, 1.20% due
6/01/2015 (a) 3,220
1,100 Wake County, North Carolina, GO, Series B, 4.50% due 2/01/2004 1,113
Wake County, North Carolina, Public Improvement, GO:
1,400 4.50% due 3/01/2004 1,421
4,000 Series B, 1.75% due 4/01/2004 4,013
3,000 Series C, 1.75% due 4/01/2004 3,010
2,295 Wilmington, North Carolina, GO, Refunding, Series B, 2% due 3/01/2004 2,306
2,200 Wilson County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Supreme/Murphy Truck Project), VRDN, AMT, 1.35% due 6/01/2015 (a) 2,200
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
Schedule of Investments (concluded) (In Thousands)
Face
Amount Municipal Bonds Value
Puerto Rico-- Government Development Bank of Puerto Rico, CP:
3.1% $ 2,000 0.75% due 10/10/2003 $ 2,000
4,000 0.90% due 10/29/2003 4,000
2,000 Puerto Rico Public Buildings Authority Revenue Refunding Bonds, FLOATS, VRDN,
Series 787, 1.05% due 7/08/2004 (a) 2,000
Total Investments (Cost--$254,417*)--99.0% 254,417
Other Assets Less Liabilities--1.0% 2,627
---------
Net Assets--100.0% $ 257,044
=========
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at September 30, 2003.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FSA Insured.
(e)Prerefunded.
*Cost for Federal income tax purposes.
See Notes to Financial Statements.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
Statement of Assets and Liabilities
As of September 30, 2003
Assets
Investments, at value (identified cost--$254,416,984) $ 254,416,984
Cash 44,328
Receivables:
Beneficial interest sold $ 2,058,707
Interest 612,404 2,671,111
---------------
Prepaid registration fees and other assets 12,328
---------------
Total assets 257,144,751
---------------
Liabilities
Payables:
Distributor 72,468
Other affiliates 14,174
Investment adviser 14,160
---------------
Total liabilities 100,802
---------------
Net Assets
Net assets $ 257,043,949
===============
Net Assets Consist of
Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized $ 25,709,294
Paid-in capital in excess of par 231,368,278
Accumulated realized capital losses--net (33,623)
---------------
Net Assets--Equivalent to $1.00 per share based on 257,092,937 shares of
beneficial interest outstanding $ 257,043,949
===============
See Notes to Financial Statements.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
Statement of Operations
For the Six Months Ended September 30, 2003
Investment Income
Interest and amortization of premium earned $ 1,554,389
Expenses
Investment advisory fees $ 702,870
Distribution fees 175,612
Accounting services 33,982
Professional fees 30,065
Transfer agent fees 17,472
Printing and shareholder reports 10,364
Registration fees 7,902
Custodian fees 6,209
Pricing fees 3,666
Trustees' fees and expenses 1,306
Other 7,065
---------------
Total expenses before waiver 996,513
Waiver of expenses (295)
---------------
Total expenses after waiver 996,218
---------------
Investment income--net 558,171
---------------
Net Increase in Net Assets Resulting from Operations $ 558,171
===============
See Notes to Financial Statements.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
Statements of Changes in Net Assets
For the Six For the
Months Ended Year Ended
September 30, March 31,
Increase (Decrease) in Net Assets: 2003 2003
Operations
Investment income--net $ 558,171 $ 2,487,924
Realized gain on investments--net -- 17,465
--------------- ---------------
Net increase in net assets resulting from operations 558,171 2,505,389
--------------- ---------------
Dividends to Shareholders
Dividends to shareholders from investment income--net (558,171) (2,487,924)
--------------- ---------------
Beneficial Interest Transactions
Net proceeds from sale of shares 233,961,747 677,991,496
Value of shares issued to shareholders in reinvestment of dividends 558,079 2,487,778
--------------- ---------------
234,519,826 680,479,274
Cost of shares redeemed (265,554,785) (758,614,308)
--------------- ---------------
Net decrease in net assets derived from beneficial interest transactions (31,034,959) (78,135,034)
--------------- ---------------
Net Assets
Total decrease in net assets (31,034,959) (78,117,569)
Beginning of period 288,078,908 366,196,477
--------------- ---------------
End of period $ 257,043,949 $ 288,078,908
=============== ===============
See Notes to Financial Statements.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
Financial Highlights
For the Six
The following per share data and ratios have been derived Months Ended
from information provided in the financial statements. September 30, For the Year Ended March 31,
Increase (Decrease) in Net Asset Value: 2003 2003 2002 2001 2000
Per Share Operating Performance
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Investment income--net --++ .01 .02 .03 .03
Realized gain on investments--net -- --++ -- -- --++
---------- ---------- ---------- ---------- ----------
Total from investment operations --++ .01 .02 .03 .03
---------- ---------- ---------- ---------- ----------
Less dividends from investment income--net --++++ (.01) (.02) (.03) (.03)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Investment Return .39%* .76% 1.63% 3.42% 2.76%
========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses, net of waiver .71%* .70% .71% .71% .71%
========== ========== ========== ========== ==========
Expenses .71%* .70% .71% .71% .71%
========== ========== ========== ========== ==========
Investment income--net .40%* .77% 1.62% 3.36% 2.72%
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of period (in thousands) $ 257,044 $ 288,079 $ 366,196 $ 330,559 $ 291,536
========== ========== ========== ========== ==========
*Annualized.
++Amount is less than $.01 per share.
++++Amount is less than $(.01) per share.
See Notes to Financial Statements.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
Notes to Financial Statements
1. Significant Accounting Policies:
CMA North Carolina Municipal Money Fund (the "Fund ") is part of CMA
Multi-State Municipal Series Trust (the "Trust "). The Fund is
registered under the Investment Company Act of 1940, as amended, as
a non-diversified, open-end management investment company. 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. These unaudited financial statements reflect all
adjustments, which are, in the opinion of management, necessary to a
fair statement of the results for the interim period presented. All
such adjustments are of a normal, recurring nature. The following is
a summary of significant accounting policies followed by the Fund.
(a) Valuation of investments--Investments are valued at amortized
cost, which approximates market value. For the purpose of valuation,
the maturity of a variable rate demand instrument is deemed to be
the 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--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(c) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). 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.
(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 are declared
from the total of net investment income, excluding discounts earned
other than original issue discounts. Net realized capital gains, if
any, are normally distributed annually after deducting prior years'
loss carryforward. The Fund may distribute capital gains more
frequently than annually in order to maintain the Fund's net asset
value at $1.00 per share.
(f) Expenses--Certain expenses have been allocated to the individual
funds in the Trust on a pro rata basis based upon the respective
aggregate net asset value of each Fund included in the Trust.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect, wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets, at the following annual rates: .50%
of the first $500 million of average daily net assets; .425% of
average daily net assets in excess of $500 million but not exceeding
$1 billion; and .375% of average daily net assets in excess of
$1 billion. For the six months ended September 30, 2003, FAM earned
fees of $702,870, of which $295 was waived.
Pursuant to the Distribution and Shareholder Servicing Plan in
compliance with Rule 12b-1 under the Investment Company Act of 1940,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S")
receives a distribution fee from the Fund at the end of each month
at the annual rate of .125% of average daily net assets of the Fund.
The distribution fee is to compensate MLPF&S financial 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.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
Notes to Financial Statements (concluded)
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
For the six months ended September 30, 2003, the Fund reimbursed FAM
$2,987 for certain accounting services.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, FDS, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares sold, reinvested and redeemed during the
periods corresponds to the amounts included in the Statements of
Changes in Net Assets for net proceeds from sale of shares, value of
shares reinvested and cost of shares redeemed, respectively, since
shares are recorded at $1.00 per share.
4. Capital Loss Carryforward:
On March 31, 2003, the Fund had a net capital loss carryforward of
$33,623, of which $6,425 expires in 2005, $26,651 expires in 2007
and $547 expires in 2008. This amount will be available to offset
like amounts of any future taxable gains.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
Electronic Delivery
The Fund is now offering electronic delivery of communications to
its shareholders. In order to receive this service, you must
register your account and provide us with e-mail information.
To sign up for this service, simply access this website
http://www.icsdelivery.com/live and follow the instructions.
When you visit this site, you will obtain a personal identification
number (PIN). You will need this PIN should you wish to update your
e-mail address, choose to discontinue this service and/or make any
other changes to the service. This service is not available for
certain retirement accounts at this time.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, SEPTEMBER 30, 2003
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 (annual requirement
only)
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 (annual requirement only)
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. N/A
(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
Item 8--Reserved
Item 9(a) - The registrant's certifying officers have reasonably
designed such disclosure controls and procedures to ensure material
information relating to the registrant is made known to us by others
particularly during the period in which this report is being
prepared. The registrant's certifying officers have determined that
the registrant's disclosure controls and procedures are effective
based on our evaluation of these controls and procedures as of a
date within 90 days prior to the filing date of this report.
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 North Carolina Municipal Money Fund of CMA Multi-State Municipal
Series Trust
By: _/s/ Terry K. Glenn_______
Terry K. Glenn,
President of
CMA North Carolina Municipal Money Fund of CMA
Multi-State Municipal Series Trust
Date: November 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 North Carolina Municipal Money Fund of CMA
Multi-State Municipal Series Trust
Date: November 21, 2003
By: _/s/ Donald C. Burke________
Donald C. Burke,
Chief Financial Officer of
CMA North Carolina Municipal Money Fund of CMA
Multi-State Municipal Series Trust
Date: November 21, 2003
Attached hereto as a furnished exhibit are the certifications
pursuant to Section 906 of the Sarbanes-Oxley Act.