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
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 - 03/31/04
Item 1 - Report to Stockholders
(BULL LOGO)
Merrill Lynch Investment Managers
www.mlim.ml.com
CMA North Carolina
Municipal Money Fund
Annual Report
March 31, 2004
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.
A description of the policies and procedures that the Fund uses to
determine how to vote proxies relating to portfolio securities is
available (1) without charge, upon request, by calling toll-free
1-800-MER-FUND (1-800-637-3863); (2) on www.mutualfunds.ml.com;
and (3) on the Securities and Exchange Commission's website at
http://www.sec.gov.
CMA North Carolina Municipal Money Fund
of CMA Multi-State Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
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CMA North Carolina Municipal Money Fund
Important Tax Information (unaudited)
All of the net investment income distributions paid by CMA North
Carolina Municipal Money Fund of CMA Multi-State Municipal Series
Trust during the taxable year ended March 31, 2004 qualify as
tax-exempt interest dividends for Federal income tax purposes.
Please retain this information for your records.
Electronic Delivery
The Fund offers 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
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When you visit this site, you will obtain a personal identification
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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, MARCH 31, 2004
A Letter From the President
Dear Shareholder
Index returns during the most recent six-month and 12-month
reporting periods indicate that fixed income markets - both taxable
and tax-exempt - continued to reward those investors who were
willing to accept greater risk. The high yield market, as measured
by the Credit Suisse First Boston High Yield Index, provided a
six-month return of +8.65% and a 12-month return of +22.86% as of
March 31, 2004. By comparison, the Lehman Brothers Aggregate Bond
Index returned +2.98% and +5.40% and the Lehman Brothers Municipal
Bond Index returned +3.12% and +5.86% for the six-month and 12-month
periods ended March 31, 2004, respectively.
As of March month-end, the Federal Reserve Board maintained its
accommodative policy stance, pledging "patience" in raising
interest rates. As a result, short-term interest rates remained at
historic lows and kept the short end of the yield curve relatively
flat, making it increasingly difficult to find attractive income
opportunities. Market watchers continue to monitor the economic data
and Federal Reserve Board language for indications of interest rate
direction. Having said that, if the economy continues to grow at its
recent pace, many believe it is just a matter of time before
interest rates move upward.
Equity markets, in the meantime, continued to provide attractive
returns. For the six-month and 12-month periods ended March 31,
2004, the Standard & Poor's 500 Index returned +14.08% and
+35.12%, respectively. Much of the boost came from improving
economic conditions throughout the past year. Significant fiscal
and monetary stimulus, including the low interest rates and tax
cuts, has opened the door to consumer spending, capital spending,
increases in exports and long-awaited job growth. As expected, these
positive developments have led the way to improvements in corporate
earnings - a positive for stock markets.
The events and efforts of the past year leave us with a much
stronger economy today. With all of this in mind, we believe it is
time for investors to consider what can go right in 2004. We
encourage you to revisit your portfolio and your asset allocation
strategy to ensure you are well positioned to take advantage of the
opportunities that lie ahead. Your financial advisor can help you
develop a strategy designed to perform through all types of market
and economic cycles.
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, MARCH 31, 2004
A Discussion With Your Fund's Portfolio Manager
With interest rates holding at historic lows, we looked to purchase
one-year fixed rate paper throughout the period, but used variable
rate demand notes opportunistically for yield enhancement.
How did the Fund perform during the fiscal year in light of the
existing market conditions?
For the 12-month period ended March 31, 2004, CMA North Carolina
Municipal Money Fund paid shareholders a net annualized yield of
..37%.* As of March 31, 2004, the Fund's seven-day yield was .39%.
The Fund's yield was hindered early in the period by the maturity of
a large number of fixed rate securities that had been added to the
portfolio in the second and third quarters of 2002. This was because
we were forced to reinvest the proceeds at lower prevailing interest
rates. Nevertheless, we invested in variable rate demand notes,
which were yielding 1.25% versus 1.10% for one-year fixed rate paper
at this particular time. This ultimately benefited Fund performance.
For its part, the Federal Reserve Board remained accommodative
throughout the year. The last in a series of interest rate cuts came
in June 2003, as the Federal Reserve Board looked to stimulate
economic growth and ward off the potential for deflation. Although
economic growth began to accelerate later in the year, concerns over
weak job growth persisted in the market. Investors tried to
anticipate when the Federal Reserve Board would restore interest
rates to more neutral levels. The constant interest rate analysis
translated into widespread volatility, which created opportunities
in the fixed income markets.
Describe conditions in the State of North Carolina during the
period.
North Carolina's economy outperformed that of the nation, primarily
because of strength in the state's business-services sector. The
recovery was fragile, however, particularly in the first half of the
year. The state's manufacturing sector and textile and furniture
industries experienced weakness while personal bankruptcies
continued to rise and housing markets remained cool.
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
North Carolina's budget for the 2003 fiscal year, which ended on
June 30, 2003, included a $1.65 billion deficit that was closed
only after authorizing several one-time transfers. To balance its
2004-2005 budget, state officials proposed spending and job cuts and
suspending about $1 billion in planned tax breaks. Specifically,
health services faced approximately $900 million in spending cuts,
mainly from Medicaid, and public schools were slated to lose almost
1,000 jobs.
The state's economic situation improved mildly during the period's
second half. By the end of January 2004, North Carolina's tax
revenues were .6% higher than projected and 2.5% above those in the
prior fiscal year. In addition, the state's labor market
strengthened during the first quarter of 2004, with unemployment
claims continuing to trend downward. Overall, North Carolina remains
primed to continue to outpace the national rate of growth when the
recovery gains steam. This is due to the state's lower-than-average
debt burden and proven ability to diversify its economy.
How did you manage the Fund during the period?
As the fiscal year began, we were looking to increase the Fund's
position in variable rate securities for liquidity purposes. These
securities tend to have shorter maturities and, given the inverted
yield curve at that time, shorter-maturity investments were offering
higher yields than their longer-maturity counterparts. We also
expected yields on variable rate products to spike because of
redemptions related to tax time.
As summer approached, variable rate securities became less
attractive as concerns about deflation and the expectation for
additional interest rate cuts caused yields on shorter-maturity
securities to drop. Given our expectation that monetary policy would
remain accommodative for some time, beginning in mid-May, we
purchased approximately $40 million in fixed rate securities
offering yields ranging from 1.00% to 1.30%. These purchases
benefited the Fund on a relative basis, as we were able to maintain
a larger percentage of fixed rate securities than our peers.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Although the final months of 2003 brought evidence of a recovering
economy, inflation remained under control and the job market
continued to be sluggish. These factors reinforced our belief that
short-term interest rates would remain at current levels for some
time. Thus, we continued to look for opportunities to invest in
fixed rate paper - a search that proved difficult because of limited
supply in both the primary and secondary markets and because those
bonds that were available were priced at relatively unattractive
levels.
Although we continued to search for fixed rate paper in the new
year, the flatness of the short-term tax-exempt yield curve offered
little incentive to extend further out. As the period came to an
end, we were looking to increase our weighting in variable rate
paper - again seeking to take advantage of higher yields typically
available during tax season.
How would you characterize the portfolio's position at the close of
the period?
The Fund ended the period in a slightly bearish stance given the
lack of attractive investment opportunities over the past few
months. We believe the Fund's increased weighting in variable rate
demand notes as of March 31, 2004 will allow us to benefit from the
traditional increase in yields associated with tax-related selling,
at least in the upcoming quarter. Looking further ahead, we believe
the Federal Reserve Board will likely keep monetary policy on hold
well into 2004 to ensure a sustainable economic recovery. With that
in mind, we will continue to look for opportunities to extend the
portfolio's average maturity when prudent.
Darrin J. SanFillippo
Vice President and Portfolio Manager
April 7, 2004
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Schedule of Investments (In Thousands)
Face
Amount Municipal Bonds Value
North Carolina--93.0%
$ 1,700 Alamance County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Millender Project), VRDN, AMT, 1.16% due 12/01/2020 (a) $ 1,700
2,800 Ashe County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (Oldham Saw Inc. Project),
VRDN, AMT, 1.15% due 5/01/2014 (a) 2,800
10,700 Beaufort County, North Carolina, Water District Number VI, GO, BAN, 1.90% due
10/13/2004 10,746
2,100 Buncombe County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Refunding Bonds (Industrial Development Alliance),
VRDN, AMT, 1.27% 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,
1.11% due 9/01/2011 (a) 6,600
1,935 Charlotte, North Carolina, GO, Refunding, 4.75% due 2/01/2005 1,992
4,745 Columbus County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (Kroy Building Products Inc. Project),
VRDN, AMT, 1.04% due 12/01/2025 (a) 4,745
1,623 Faith Town, North Carolina, BAN, 1.75% due 6/02/2004 1,625
1,880 Gaston County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Marlatex Corporation Project), VRDN, AMT, 1.21% due 6/01/2015 (a) 1,880
540 Granville County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (Lace Lastics Company Inc. Project), VRDN,
AMT, 1.21% due 10/01/2005 (a) 540
Guilford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR, VRDN, AMT (a):
2,500 (High Point Textiles Auxiliaries), Refunding, 1.16% due 6/01/2012 2,500
3,600 (Nat Sherman Building LLC), 1.26% due 3/01/2022 3,600
1,000 (Neal Manufacturing), 1.15% due 11/01/2013 1,000
2,100 (Ornamental Products), 1.15% due 12/01/2014 2,100
500 (Pharmagraphics Inc. Project), 1.24% due 9/01/2010 500
2,500 (Snider Tire Inc.), 1.16% due 10/01/2019 2,500
24,615 Halifax County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, Exempt Facilities (Westmoreland), VRDN, 1.14% due
12/01/2019 (a) 24,615
1,000 Harnett County, North Carolina, COP (Harnett County Projects), Refunding, 3% due
10/01/2004 (d) 1,009
1,300 Harnett County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Edwards Brothers Inc. Project), VRDN, AMT, 1.16% due 1/01/2007 (a) 1,300
6,000 Hertford County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Easco Corporation Project), VRDN, AMT, 1.14% due 11/01/2013 (a) 6,000
3,700 Indian Beach, North Carolina, GO, BAN, Beach Improvement, 1.40% due 8/11/2004 3,705
2,400 Johnston County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Hamlin Sheet Metal Co. Inc.), VRDN, AMT, 1.15%
due 11/01/2017 (a) 2,400
5,200 Kernersville, North Carolina, GO, BAN, 2% due 5/19/2004 5,207
4,250 Lee County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Lee Central LLC Project), VRDN, AMT, 1.16% due 12/01/2023 (a) 4,250
2,520 Lincoln County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Packaging NC Project), VRDN, 1.16% due 10/01/2013 (a) 2,520
9,000 Martin County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Penco Products Project), VRDN, AMT, 1.14% 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
FLOATS Floating Rate Securities
GO General Obligation Bonds
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
TRAN Tax Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Schedule of Investments (continued) (In Thousands)
Face
Amount Municipal Bonds Value
North Carolina (concluded)
$ 5,000 Mecklenburg County, North Carolina, GO, Series B, 2% due 2/01/2005 (a) $ 5,038
Mecklenburg County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds, VRDN, AMT (a):
800 (Ferguson Supply and Box Manufacturing), 1.15% due 8/01/2010 800
1,500 (Griffith Micro Science Project), 1.07% due 11/01/2007 1,500
5,600 (Southern Steel Company LLC Project), 1.11% due 3/02/2015 5,600
14,115 Municipal Securities Trust Certificates, GO, VRDN, Series 138, Class A, 1.05% due
3/16/2015 (a) 14,115
949 Newland, North Carolina, BAN, 1.70% due 10/13/2004 952
3,200 North Carolina Agriculture Finance Authority, Agriculture Development Revenue Bonds
(Albemarle Cotton Growers), VRDN, AMT, 1.16% 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, 1.16% due 6/01/2016 (a) 8,610
North Carolina Capital Facilities Finance Agency, Educational Facilities Revenue Bonds,
VRDN (a):
3,300 (Barton College), 1.05% due 2/01/2013 3,300
655 (Canterbury School Project), 1.05% due 8/01/2022 655
17,700 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, MERLOTS,
VRDN, Series A22, 1.09% due 1/01/2024 (a)(c) 17,700
3,000 North Carolina Infrastructure Finance Corporation, COP (North Carolina State
Correctional Facilities Project), Series A, 2% due 2/01/2005 3,022
5,335 North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds
(Cabarrus Memorial Hospital Project), VRDN, AMT, 1.01% due 3/01/2028 (a) 5,335
300 North Carolina Medical Care Commission, Hospital Revenue Bonds (Pooled Financing
Project), VRDN, Series A, 1.02% due 10/01/2016 (a) 300
4,445 North Carolina Medical Care Commission, Retirement Facilities Revenue Refunding Bonds
(Aldersgate Project), VRDN, 1.12% due 1/01/2031 (a) 4,445
North Carolina Municipal Power Agency Number 1, Catawba Electric Revenue Bonds, VRDN (a):
6,780 PUTTERS, Series 341, 1.05% due 1/01/2015 (b) 6,780
4,335 ROCS, Series II R-211, 1.08% 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
1,000 MERLOTS, Series A23, 1.09% due 3/01/2027 1,000
910 Piedmont Triad Airport Authority, North Carolina, Special Facility Revenue Bonds
(Cessna Aircraft Company Project), VRDN, 1.15% due 10/01/2012 (a) 910
1,000 Raleigh, North Carolina, GO, 5.20% due 6/01/2004 1,007
2,300 Rowan County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, PCR, IDR (Hon Industries Project), VRDN, AMT, 1.16% due 4/01/2018 (a) 2,300
2,100 Rutherford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (All American Homes of North Carolina), VRDN, AMT, 1.22%
due 11/01/2011 (a) 2,100
2,240 Sampson County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Dubose Strapping Inc. Project), VRDN, AMT, 1.21% due 1/01/2012 (a) 2,240
3,000 Stanley County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Patrick Industries Project), VRDN, AMT, 1.22% due 8/01/2010 (a) 3,000
400 University of North Carolina Hospital at Chapel Hill, Revenue Refunding Bonds, VRDN,
Series A, 1% due 2/15/2031 (a) 400
3,140 Vance County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (HH Hunt Manufacturing Facilities LLC Project), VRDN, 1.16% due
6/01/2015 (a) 3,140
Wake County, North Carolina, Public Improvement, GO:
4,000 Series B, 1.75% due 4/01/2004 4,000
3,000 Series C, 1.75% due 4/01/2004 3,000
1,000 Wilmington, North Carolina, GO, 5.60% due 6/01/2004 (f) 1,034
2,100 Wilson County, North Carolina, Industrial Facilities and Pollution Control Financing
Authority, IDR (Supreme/Murphy Truck Project), VRDN, AMT, 1.24% due 6/01/2015 (a) 2,100
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Schedule of Investments (concluded) (In Thousands)
Face
Amount Municipal Bonds Value
Puerto Rico--6.0%
$10,900 Puerto Rico Commonwealth, TRAN, 2% due 7/30/2004 $ 10,936
2,000 Puerto Rico Public Buildings Authority, Revenue Refunding Bonds, FLOATS, VRDN,
Series 787, 1.05% due 7/08/2004 (a)(e) 2,000
1,500 Puerto Rico Public Finance Corporation Revenue Bonds, VRDN, FLOATS, Series 911,
1.05% due 8/01/2026 (a)(e) 1,500
Total Investments (Cost--$238,283*)--99.0% 238,283
Other Assets Less Liabilities--1.0% 2,293
---------
Net Assets--100.0% $ 240,576
=========
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at March 31, 2004.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FSA Insured.
(e)CIFG Insured.
(f)Prerefunded.
*Cost for Federal income tax purposes.
See Notes to Financial Statements.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Statement of Assets and Liabilities
As of March 31, 2004
Assets
Investments, at value (identified cost--$238,283,379) $ 238,283,379
Receivables:
Beneficial interest sold $ 1,668,803
Securities sold 700,521
Interest 625,347 2,994,671
---------------
Prepaid expenses 7,798
---------------
Total assets 241,285,848
---------------
Liabilities
Payables:
Custodian bank 616,319
Distributor 50,509
Investment adviser 16,749
Other affiliates 6,174 689,751
---------------
Accrued expenses 20,495
---------------
Total liabilities 710,246
---------------
Net Assets
Net assets $ 240,575,602
===============
Net Assets Consist of
Shares of beneficial interest, $.10 par value, unlimited number of shares
authorized $ 24,057,563
Paid-in capital in excess of par 216,502,700
Undistributed realized capital gains--net 15,339
---------------
Net Assets--Equivalent to $1.00 per share based on 240,575,628 shares of
beneficial interest outstanding $ 240,575,602
===============
See Notes to Financial Statements.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Statement of Operations
For the Year Ended March 31, 2004
Investment Income
Interest and amortization of premium earned $ 2,947,585
Expenses
Investment advisory fees $ 1,350,630
Distribution fees 337,621
Accounting services 67,439
Professional fees 66,850
Transfer agent fees 31,763
Printing and shareholder reports 21,742
Registration fees 16,533
Custodian fees 12,529
Pricing fees 8,232
Trustees' fees and expenses 2,754
Other 13,800
---------------
Total expenses before waiver 1,929,893
Waiver of expenses (295)
---------------
Total expenses after waiver 1,929,598
---------------
Investment income--net 1,017,987
---------------
Realized Gain on Investments--Net
Realized gain on investments--net 48,962
---------------
Net Increase in Net Assets Resulting from Operations $ 1,066,949
===============
See Notes to Financial Statements.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Statements of Changes in Net Assets
For the Year Ended March 31,
Increase (Decrease) in Net Assets: 2004 2003
Operations
Investment income--net $ 1,017,987 $ 2,487,924
Realized gain on investments--net 48,962 17,465
--------------- ---------------
Net increase in net assets resulting from operations 1,066,949 2,505,389
--------------- ---------------
Dividends to Shareholders
Dividends to shareholders from investment income--net (1,017,987) (2,487,924)
--------------- ---------------
Beneficial Interest Transactions
Net proceeds from sale of shares 472,763,982 677,991,496
Value of shares issued to shareholders in reinvestment of dividends 1,018,022 2,487,778
--------------- ---------------
473,782,004 680,479,274
Cost of shares redeemed (521,334,272) (758,614,308)
--------------- ---------------
Net decrease in net assets derived from beneficial interest transactions (47,552,268) (78,135,034)
--------------- ---------------
Net Assets
Total decrease in net assets (47,503,306) (78,117,569)
Beginning of year 288,078,908 366,196,477
--------------- ---------------
End of year $ 240,575,602 $ 288,078,908
=============== ===============
See Notes to Financial Statements.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
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: 2004 2003 2002 2001 2000
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
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 year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total investment return .37% .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 .38% .77% 1.62% 3.36% 2.72%
========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of year (in thousands) $ 240,576 $ 288,079 $ 366,196 $ 330,559 $ 291,536
========== ========== ========== ========== ==========
++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, MARCH 31, 2004
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. 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.
(g) Custodian bank--The Fund recorded an amount payable to the
custodian bank reflecting an overnight overdraft which resulted from
a failed trade which settled the next day.
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 year ended, March 31, 2004, FAM earned fees of
$1,350,630, 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, MARCH 31, 2004
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 year ended March 31, 2004, the Fund reimbursed FAM $5,390
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 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, 2004 and March 31, 2003 was as follows:
3/31/2004 3/31/2003
Distributions paid from:
Tax-exempt income $ 1,017,987 $ 2,487,924
------------ ------------
Total distributions $ 1,017,987 $ 2,487,924
============ ============
As of March 31, 2004, there were no significant differences between
the book and tax components of net assets.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Independent Auditors' Report
To the Shareholders and Board of Trustees
of CMA Multi-State Municipal Series Trust:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of CMA North
Carolina Municipal Money Fund of CMA Multi-State Municipal Series
Trust (the "Trust") as of March 31, 2004, 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 Trust'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. Our procedures included
confirmation of securities owned as of March 31, 2004, by
correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of CMA North Carolina Municipal Money Fund of CMA
Multi-State Municipal Series Trust as of March 31, 2004, 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 14, 2004
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Officers and Trustees (unaudited)
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name, Address & Age Fund Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Interested Trustee
Terry K. Glenn* President 1999 to President of the Merrill Lynch Investment 124 Funds None
P.O. Box 9011 and present Managers, L.P. ("MLIM")/Fund Asset 160 Portfolios
Princeton, Trustee and Management, L.P. ("FAM")--Advised Funds
NJ 08543-9011 1988 to since 1999; Chairman (Americas Region) of
Age: 63 present 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.
since 1985.
* Mr. Glenn is a director, trustee or member of an advisory board of
certain other investment companies for which MLIM or FAM 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 MLIM, FAM, FAMD, Princeton Services and
Princeton Administrators, L.P. The Trustee's term is unlimited.
Trustees 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.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Officers and Trustees (unaudited)(continued)
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name, Address & Age 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 51 Funds None
P.O. Box 9095 present Business, State University of New York at 50 Portfolios
Princeton, Albany since 2000 and Professor thereof
NJ 08543-9095 from 1989 to 2000; International Consultant
Age: 63 at the Urban Institute from 1995 to 1999.
Cynthia A. Montgomery Trustee 1994 to Professor, Harvard Business School since 51 Funds Newell
P.O. Box 9095 present 1989. 50 Portfolios Rubbermaid, Inc.
Princeton,
NJ 08543-9095
Age: 51
Kevin A. Ryan Trustee 1992 to Director Emeritus of The Boston University 51 Funds None
P.O. Box 9095 present Center for the Advancement of Ethics and 50 Portfolios
Princeton, Character from 1989 to 1999; Professor of
NJ 08543-9095 Education at Boston University from 1982
Age: 71 to 1999 and Professor Emeritus thereof
since 1999.
Roscoe S. Suddarth Trustee 2000 to President of Middle East Institute from 51 Funds None
P.O. Box 9095 present 1995 to 2001; Foreign Service Officer of 50 Portfolios
Princeton, United States Foreign Service from 1961 to
NJ 08543-9095 1995 and Career Minister thereof from 1989
Age: 68 to 1995; Deputy Inspector General of 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 Professor of Finance, New York University, 51 Funds Bowne & Co.,
P.O. Box 9095 present Leonard N. Stern School of Business 50 Portfolios Inc.; Vornado
Princeton, Administration from 1982 to 1994 and Operating
NJ 08543-9095 Dean Emeritus thereof since 1994. Company;
Age: 66 Vornado Realty
Trust and
Alexander's, Inc.
Edward D. Zinbarg Trustee 2000 to Self-employed financial consultant since 51 Funds None
P.O. Box 9095 present 1994; Executive Vice President of The 50 Portfolios
Princeton, Prudential Insurance Company of America
NJ 08543-9095 from 1988 to 1994; Former Director of
Age: 69 Prudential Reinsurance Company and former
Trustee of The Prudential Foundation.
* The Trustee's term is unlimited. Trustees serve until their
resignation, removal or death, or until December 31 of the year in
which they turn 72.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Officers and Trustees (unaudited)(concluded)
Position(s) Length of
Held with Time
Name, Address & Age 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 since
P.O. Box 9011 President present 1999; Senior Vice President and Treasurer of Princeton Services since 1999;
Princeton, and and Vice President of FAMD since 1999; Director of MLIM Taxation since 1990.
NJ 08543-9011 Treasurer 1999 to
Age: 43 present
Kenneth A. Jacob Senior 2002 to Managing Director of MLIM since 2000; Director (Tax-Exempt Fund Management)
P.O. Box 9011 Vice present of MLIM from 1997 to 2000.
Princeton, President
NJ 08543-9011
Age: 53
John M. Loffredo Senior 2002 to Managing Director of MLIM since 2000; Director (Tax-Exempt Fund Management)
P.O. Box 9011 Vice present of MLIM from 1998 to 2000.
Princeton, President
NJ 08543-9011
Age: 40
Darrin J. SanFillippo Vice 1996 to Vice President of MLIM since 1998.
P.O. Box 9011 President present
Princeton,
NJ 08543-9011
Age: 39
Phillip S. Gillespie Secretary 2000 to First Vice President of MLIM since 2001; Director (Legal Advisory) from 2000
P.O. Box 9011 present to 2001; Vice President from 1999 to 2000; Attorney associated with MLIM
Princeton, since 1998.
NJ 08543-9011
Age: 40
* 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 800-262-4363.
Charles C. Reilly, Trustee of CMA North Carolina Municipal Money
Fund, has recently retired. The Fund's Board of Trustees wishes
Mr. Reilly well in his retirement.
CMA NORTH CAROLINA MUNICIPAL MONEY FUND, MARCH 31, 2004
Item 2 - Code of Ethics - The registrant has adopted 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 and principal accounting officer, or persons
performing similar functions. A copy of the code of ethics
is available without charge upon request by calling toll-free
1-800-MER-FUND (1-800-637-3863).
Item 3 - Audit Committee Financial Expert - The registrant's board
of directors has determined that (i) the registrant has the
following audit committee financial experts serving on its audit
committee and (ii) each audit committee financial expert is
independent: (1) Ronald W. Forbes, (2) Richard R. West, and (3)
Edward D. Zinbarg.
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending March 31, 2004 - $30,200
Fiscal Year Ending March 31, 2003 - $34,164
(b) Audit-Related Fees - Fiscal Year Ending March 31, 2004 - $0
Fiscal Year Ending March 31, 2003 - $0
(c) Tax Fees - Fiscal Year Ending March 31, 2004 - $5,200
Fiscal Year Ending March 31, 2003 - $4,800
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ending March 31, 2004 - $0
Fiscal Year Ending March 31, 2003 - $0
(e)(1) The registrant's audit committee (the "Committee") has
adopted policies and procedures with regard to the pre-approval of
services. Audit, audit-related and tax compliance services provided
to the registrant on an annual basis require specific pre-approval
by the Committee. The Committee also must approve other non-audit
services provided to the registrant and those non-audit services
provided to the registrant's affiliated service providers that
relate directly to the operations and the financial reporting of the
registrant. Certain of these non-audit services that the Committee
believes are a) consistent with the SEC's auditor independence rules
and b) routine and recurring services that will not impair the
independence of the independent accountants may be approved by the
Committee without consideration on a specific case-by-case basis
("general pre-approval"). However, such services will only be
deemed pre-approved provided that any individual project does not
exceed $5,000 attributable to the registrant or $50,000 for the
project as a whole. Any proposed services exceeding the pre-
approved cost levels will require specific pre-approval by the
Committee, as will any other services not subject to general pre-
approval (e.g., unanticipated but permissible services). The
Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board
meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending March 31, 2004 - $16,708,160
Fiscal Year Ending March 31, 2003 - $17,378,427
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to
the registrant's 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.
Regulation S-X Rule 2-01(c)(7)(ii) - $541,640, 0%
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for
Closed-End Management Investment Companies - Not Applicable
Item 8 - Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers - Not Applicable
Item 9 - Submission of Matters to a Vote of Security Holders - Not
Applicable
Item 10 - Controls and Procedures
10(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.
10(b) - There were no changes in the registrant's internal control
over financial reporting (as defined in Rule 30a-3(d) under the Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal half-
year of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 11 - Exhibits attached hereto
11(a)(1) - Code of Ethics - See Item 2
11(a)(2) - Certifications - Attached hereto
11(a)(3) - Not Applicable
11(b) - Certifications - 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: May 21, 2004
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: May 21, 2004
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: May 21, 2004