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 811-03111
811-21301
Name of Fund: CMA Tax-Exempt Fund
Master Tax-Exempt Trust
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief
Executive Officer, CMA Tax-Exempt Fund and Master Tax-Exempt
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: 03/31/05
Date of reporting period: 04/01/04 - 03/31/05
Item 1 - Report to Stockholders
CMA Tax-Exempt Fund
Annual Report
March 31, 2005
(BULL LOGO) Merrill Lynch Investment Managers
www.mlim.ml.com
Mercury Advisors
A Division of Merrill Lynch Investment Managers
www.mercury.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.
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) at www.mutualfunds.ml.com;
and (3) on the Securities and Exchange Commission's Web site at
http://www.sec.gov. Information about how the Fund voted proxies
relating to securities held in the Fund's portfolio during the
most recent 12-month period ended June 30 is available (1) at
www.mutualfunds.ml.com and (2) on the Securities and Exchange
Commission's Web site at http://www.sec.gov.
CMA Tax-Exempt Fund
Box 9011
Princeton, NJ
08543-9011
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CMA Tax-Exempt Fund
Portfolio Holdings*
Put Bonds--11.4%
Fixed Rate Notes--17.2%
Tax-Exempt Commercial Paper--7.0%
Variable Rate Demand Obligations--64.4%
* Based on total market value of the Trust as of March 31, 2005.
Investments are valued at amortized cost, which approximates
market value.
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission ("SEC") for the first and third
quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are
available on the SEC's Web site at http://www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the SEC's Public
Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330.
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 Web site at
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 TAX-EXEMPT FUND, MARCH 31, 2005
A Letter From the President
Dear Shareholder
Financial markets broadly posted positive returns over the most
recent reporting period, with international equities providing some
of the most impressive results.
<CAPPTION>
Total Returns as of March 31, 2005 6-month 12-month
U.S. equities (Standard & Poor's 500 Index) + 6.88% + 6.69%
Small-cap U.S. equities (Russell 2000 Index) + 8.00 + 5.41
International equities (MSCI Europe Australasia Far East Index) +15.13 +15.06
Fixed income (Lehman Brothers Aggregate Bond Index) + 0.47 + 1.15
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 1.21 + 2.67
High yield bonds (Credit Suisse First Boston High Yield Index) + 3.39 + 7.84
The U.S. economy continued to show resilience in the face of the
Federal Reserve Board's (the Fed's) continued interest rate hikes
and, more recently, higher oil prices. The Fed's measured tightening
program brought the federal funds rate to 2.75% by period-end as the
central bank continued its campaign to combat emergent inflation.
In fact, business costs have been rising, which is beginning to put
pressure on corporate profit margins. Consumer prices have been
moving up as well, particularly in the areas of gasoline prices,
healthcare costs, housing and education.
U.S. equities ended 2004 in a strong rally, but stumbled into
negative territory in the first quarter of 2005. On the positive
side, corporations have been accelerating their hiring plans,
capital spending remains reasonably robust and merger-and-
acquisition activity has increased. Offsetting the positives
are slowing corporate earnings growth, renewed energy price
concerns and the potential for an economic slowdown later this year.
International equities, especially in Asia, have benefited from
higher economic growth rates. China, in particular, recorded growth
of more than 9% in 2004.
In the bond market, long-term interest rates finally began to inch
higher while significant increases have been recorded on the short
end. This resulted in a flattening of the yield curve throughout
much of the current reporting period. At March 31, 2005, the two-
year Treasury note yielded 3.80% and the 10-year note yielded 4.50%,
a difference of 70 basis points (.70%). This compared to a spread
of 151 basis points six months earlier and 226 basis points 12
months ago.
Looking ahead, the environment is likely to be a challenging one
for investors, with diversification and selectivity becoming
increasingly important themes. With this in mind, we encourage you
to meet with your financial advisor to review your goals and asset
allocation and to rebalance your portfolio, as necessary, to ensure
it remains aligned with your objectives and risk tolerance. As
always, 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,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
President and Trustee
CMA TAX-EXEMPT FUND, MARCH 31, 2005
A Discussion With Your Fund's Portfolio Manager
In anticipation of rising interest rates, we shifted our focus from
fixed rate securities to variable rate demand notes, securities that
quickly reflect changes in market rates.
How did the Fund perform during the fiscal year in light of the
existing market conditions?
For the 12-month period ended March 31, 2005, CMA Tax-Exempt Fund
paid shareholders a net annualized yield of .92%. For the six-month
period ended March 31, 2005, the Fund paid shareholders a net
annualized yield of 1.22%. As of March 31, 2005, the Fund's
seven-day yield was 1.53%.
The Fund performed above the average of its iMoneyNet peers over
the past 12 months. Early in the period, we continued to focus on
overweighting fixed rate notes. This strategy enhanced the Fund's
performance in a market environment characterized by a positively
sloping yield curve. In mid-2004, however, it was becoming apparent
that the Federal Reserve Board (the Fed) would embark on an
ambitious tightening of the nation's monetary policy through a
series of interest rate increases. Between June 2004 and March 2005,
the Fed raised short-term interest rates 25 basis points (.25%) at
seven consecutive meetings, bringing the federal funds rate from 1%
to 2.75%.
Higher interest rates led us to adopt a more defensive investment
strategy. With short-term interest rates rising, the yield curve
(a graphical representation of bond yields) has flattened, causing
shorter-term variable rate demand notes (VRDNs) to outperform longer
fixed rate notes during the last five months of the period. We
reacted to this market shift by letting the Fund's average portfolio
maturity drift lower. Specifically, we reduced the portfolio's
exposure to fixed rate notes while reinvesting those proceeds in
VRDNs and tax-exempt commercial paper. VRDNs react quickly to
changes in short-term interest rates because the notes' rates are
reset either daily or weekly. We also limited our investments in tax-
exempt commercial paper to a maturity range of 30 days - 60 days to
try to keep pace with the rising rate cycle.
Our more conservative investment approach in a rising interest rate
environment contributed to the Fund's solid performance during the
second half of the reporting period, while maintaining a longer-than-
neutral portfolio maturity added favorably to results during the
first half of the Fund's fiscal year.
What changes were made to the portfolio during the period?
The most significant change during the fiscal year was our shift
toward a more conservative investment strategy in the last six
months. In prior periods, we were overweighting fixed rate notes to
take advantage of stable or falling interest rates and a positively
sloped yield curve. We also maintained a weighted average portfolio
maturity that was slightly longer than neutral relative to our peer
group and norms for the Fund.
Since we expected that short-term interest rates would rise in
line with the Fed's anticipated monetary tightening, we began to
restructure the portfolio in the middle of 2004. We let the Fund's
average portfolio maturity drift lower - from 55 days - 60 days in
the second quarter of 2004 to a slightly below neutral 30 days - 35
days at period-end. We underweighted fixed rate notes because
the flattening yield curve reduced the reward for taking on extra
interest rate risk. In addition, on a historical basis, these
tax-exempt fixed notes were expensive relative to their taxable
alternatives. We replaced the fixed rate securities with VRDNs -
both daily and weekly - because these types of securities quickly
reflect the rate changes occurring in the market. Fixed rate
notes, once making up more than 22% of the portfolio, represented
approximately 17% of the portfolio at period-end, with most maturing
in less than 90 days.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
How would you characterize the portfolio's position at the close of
the period?
Generally, the short-term tax-exempt market is driven by technical
factors - such as supply and demand - during the second quarter
of the year, and this can lead to volatile yields for short-term tax-
exempt securities. In addition to the possibility of additional
interest rate increases from the Fed, we're entering a period that
tends to bring redemptions out of money market funds, as taxpayers
withdraw funds to pay their income tax bills. In the spring and
early summer, we traditionally see heavy new issuance of fixed rate
notes, as this represents fiscal year-end for most municipalities,
prompting borrowing to balance budget deficits.
The combination of these factors is expected to lead to higher
interest rates in April and May, which may create an opportunity for
us to purchase securities at higher yields and lock in a higher rate
of accrual for the Fund. Also, the large percentage of fixed rate
notes maturing out of the portfolio in June should provide us with
an opportunity to reinvest assets at higher prevailing interest
rates.
In summary, we believe the Trust is well positioned to take
advantage of higher interest rates in the near future. We will
continue to closely monitor the credit quality of the portfolio's
investments while attempting to offer our shareholders an attractive
yield.
Peter J. Hayes
Vice President and Portfolio Manager
April 14, 2005
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Disclosure of Expenses
Shareholders of this Fund may incur the following charges:
(a) expenses related to transactions, including sales charges,
redemption fees and exchange fees; and (b) operating expenses
including advisory fees, distribution fees including 12(b)-1 fees,
and other Fund expenses. The following example (which is based on a
hypothetical investment of $1,000 invested on October 1, 2004 and
held through March 31, 2005) is intended to assist shareholders both
in calculating expenses based on an investment in the Fund and in
comparing these expenses with similar costs of investing in other
mutual funds.
The first table below provides information about actual account
values and actual expenses. In order to estimate the expenses a
shareholder paid during the period covered by this report,
shareholders can divide their account value by $1,000 and then
multiply the result by the number in the first line under the
heading entitled "Expenses Paid During the Period."
The second table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed rate of return of 5% per year before
expenses. In order to assist shareholders in comparing the ongoing
expenses of investing in this Fund and other funds, compare the 5%
hypothetical example with the 5% hypothetical examples that appear
in other funds' shareholder reports.
The expenses shown in the table are intended to highlight
shareholders ongoing costs only and do not reflect any transactional
expenses, such as sales charges, redemption fees or exchange fees.
Therefore, the second table is useful in comparing ongoing expenses
only, and will not help shareholders determine the relative total
expenses of owning different funds. If these transactional expenses
were included, shareholder expenses would have been higher.
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value October 1, 2004 to
October 1, March 31, March 31,
2004 2005 2005
Actual
CMA Tax-Exempt Fund Class A $1,000 $1,006.10 $2.80
Hypothetical (5% annual return before expenses)**
CMA Tax-Exempt Fund $1,000 $1,022.14 $2.82
* Expenses are equal to the Fund's annualized expense ratio of .56%, multiplied by the average account
value over the period, multiplied by 182/365 (to reflect the one-half year period shown). Because the
Fund is a feeder fund, the expense table example reflects the expenses of both the feeder fund and the
master fund in which it invests.
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days in the
most recent fiscal half-year divided by 365.
Important Tax Information
All of the net investment income distributions paid by CMA
Tax-Exempt Fund during the taxable year ended March 31, 2005 qualify
as tax-exempt interest dividends for federal income tax purposes.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Statement of Assets and Liabilities CMA Tax-Exempt Fund
As of March 31, 2005
Assets
Investment in Master Tax-Exempt Trust (the "Trust"), at value
(identified cost--$9,032,839,337) $ 9,032,839,337
Prepaid expenses 312,120
----------------
Total assets 9,033,151,457
----------------
Liabilities
Payables:
Distributor $ 1,717,388
Administrator 1,697,240
Other affiliates 401,330 3,815,958
----------------
Accrued expenses and other liabilities 61,310
----------------
Total liabilities 3,877,268
----------------
Net Assets
Net assets $ 9,029,274,189
================
Net Assets Consist of
Shares of beneficial interest, $.10 par value, unlimited number of shares
authorized $ 903,158,245
Paid-in capital in excess of par 8,127,459,127
Accumulated realized capital losses allocated from the Trust--net (1,343,183)
----------------
Net Assets--Equivalent to $1.00 per share based on 9,031,582,446 shares of
beneficial interest outstanding. $ 9,029,274,189
================
See Notes to Financial Statements.
Statement of Operations CMA Tax-Exempt Fund
For the Year Ended March 31, 2005
Investment Income
Interest $ 13,209
Net investment income allocated from the Trust:
Interest and amortization of premium and discount earned 135,941,234
Expenses (14,102,143)
----------------
Total income 121,852,300
----------------
Expenses
Administration fees $ 23,045,374
Distribution fees 11,504,068
Transfer agent fees 1,296,614
Registration fees 929,830
Printing and shareholder reports 141,526
Professional fees 87,456
Other 46,913
----------------
Total expenses 37,051,781
----------------
Investment income--net 84,800,519
----------------
Realized Loss Allocated from the Trust--Net
Realized loss--net (873,498)
----------------
Net Increase in Net Assets Resulting from Operations $ 83,927,021
================
See Notes to Financial Statements.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Statements of Changes in Net Assets CMA Tax-Exempt Fund
For the Year Ended March 31,
Increase (Decrease) in Net Assets: 2005 2004
Operations
Investment income--net $ 84,800,519 $ 54,689,821
Realized loss--net (873,498) (255,938)
---------------- ----------------
Net increase in net assets resulting from operations 83,927,021 54,433,883
---------------- ----------------
Dividends to Shareholders
Dividends to shareholders from investment income--net (84,800,519) (54,690,122)
---------------- ----------------
Beneficial Interest Transactions
Net proceeds from sale of shares 35,503,093,560 34,265,235,678
Value of shares issued to shareholders in reinvestment of dividends 84,796,054 54,687,363
---------------- ----------------
Total shares issued 35,587,889,614 34,319,923,041
---------------- ----------------
Cost of shares redeemed (36,079,796,531) (34,644,148,609)
Shares redeemed in connection with the bulk transfer of WCMA shareholder
assets -- (741,257,384)
---------------- ----------------
Total shares redeemed (36,079,796,531) (35,385,405,993)
---------------- ----------------
Net decrease in net assets derived from beneficial interest transactions (491,906,917) (1,065,482,952)
---------------- ----------------
Net Assets
Net decrease in net assets (492,780,415) (1,065,739,191)
Beginning of year 9,522,054,604 10,587,793,795
---------------- ----------------
End of year* $ 9,029,274,189 $ 9,522,054,604
================ ================
* Undistributed investment income $ -- $ 53,944
================ ================
See Notes to Financial Statements.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Financial Highlights CMA Tax-Exempt Fund
The following per share data and ratios have been derived For the Year Ended March 31,
from information provided in the financial statements. 2005 2004 2003++++++ 2002 2001
Per Share Operating Performance
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- ----------- ----------- -----------
Investment income--net .01 .01 .01 .02 .03
Realized gain (loss)--net --++++ --++++ --++++ --++ --++
----------- ----------- ----------- ----------- -----------
Total from investment operations .01 .01 .01 .02 .03
----------- ----------- ----------- ----------- -----------
Less dividends from investment income--net (.01) (.01) (.01) (.02) (.03)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== =========== ===========
Total Investment Return .93% .54% .93% 1.76% 3.51%
=========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses .55%+++ .55%+++ .55%+++ .55% .54%
=========== =========== =========== =========== ===========
Investment income and realized gain
(loss)--net .91% .55% .93% 1.78% 3.46%
=========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of year (in thousands) $ 9,029,274 $ 9,522,055 $10,587,794 $10,545,626 $10,379,038
=========== =========== =========== =========== ===========
++ Amount is less than $.01 per share.
++++ 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, MARCH 31, 2005
Notes to Financial Statements
CMA Tax-Exempt Fund
1. Significant Accounting Policies:
CMA Tax-Exempt Fund (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as a no load, diversified, open-end
management investment company. The Fund seeks to achieve its
investment objective by investing all of its assets in the Master
Tax-Exempt Trust (the "Trust"), which has the same investment
objective and strategies as the Fund. 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 U.S. generally
accepted accounting principles, which may require the use of
management accruals and estimates. Actual results may differ from
these estimates. The percentage of the Trust owned by the Fund at
March 31, 2005 was 92.6%. The following is a summary of significant
accounting policies followed by the Fund.
(a) Valuation of investments--The Fund records its investment 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
income and expenses.
(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.
(g) Reclassification--U.S. generally accepted accounting principles
require that certain components of net assets be adjusted to
reflect permanent differences between financial and tax reporting.
Accordingly, during the current year, $53,944 has been reclassified
between undistributed net investment income and paid-in capital in
excess of par as a result of permanent differences attributable to
nondeductible expenses. This reclassification has no effect on net
assets or net asset values per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Administration Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), a wholly-owned subsidiary of
Merrill Lynch & Co., Inc. ("ML & Co."), which is the limited
partner. 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"), an affiliate of FAM, 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.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent. Interest is earned by the
Fund from FDS based on the difference, if any, between estimated and
actual daily beneficial share activity, which results in uninvested
net proceeds from sales of Fund shares.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, FDS, and/or ML & Co.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Notes to Financial Statements (concluded)
CMA Tax-Exempt Fund
3. Transactions in 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, and shares
redeemed in connection with the bulk transfer of WCMA shareholder
assets, 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, 2005 and March 31, 2004 was as follows:
3/31/2005 3/31/2004
Distributions paid from:
Tax-exempt income $ 84,800,519 $ 54,690,122
-------------- --------------
Total distributions $ 84,800,519 $ 54,690,122
============== ==============
As of March 31, 2005, there were no significant differences between
book and tax components of net assets.
5. Capital Loss Carryforward:
On March 31, 2005, the Fund had a net capital loss carryforward of
$668,930, of which $72,081 expires in 2008, $144,287 expires in
2011, $220,231 expires in 2012 and $232,331 expires in 2013. This
amount will be available to offset like amounts of any future
taxable gains.
Report of Independent Registered Public Accounting Firm
CMA Tax-Exempt Fund
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, 2005, 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 the standards of the
Public Company Accounting Oversight Board (United States). 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. The Fund is
not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, 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, 2005, 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 U.S. generally accepted
accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
May 20, 2005
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Alabama--3.0% $ 96,755 Alabama Special Care Facilities Financing Authority, Mobile Revenue
Refunding Bonds (Ascension Health Credit), VRDN, Series B, 2.28%
due 11/15/2039 (j) $ 96,755
52,900 Birmingham, Alabama, Special Care Facilities, Financing Authority,
Revenue Refunding Bonds (Ascension Health Credit), VRDN, Series B, 2.22%
due 11/15/2039 (j) 52,900
20,000 Columbia, Alabama, IDB, Revenue Bonds (Alabama Power Company Project), VRDN,
AMT, 2.26% due 11/01/2021 (j) 20,000
27,765 Daphne, Alabama, Special Care Facilities Financing Authority Revenue Bonds,
FLOATS, VRDN, Series 593, 2.20% due 8/15/2008 (j)(k) 27,765
12,450 Daphne, Alabama, Special Care Facilities Financing Authority, Revenue Refunding
Bonds (Presbyterian), VRDN, Series B, 2.16% due 8/15/2023 (a)(j) 12,450
1,000 Decatur, Alabama, IDB, Environmental Facilities Revenue Bonds (BP Amoco Chemical
Company Project), VRDN, AMT, 2.28% due 11/01/2035 (j) 1,000
4,255 Eagle Tax-Exempt Trust, Birmingham, Alabama, Water and Sewer, VRDN, Series
2002-6009, Class A, 2.32% due 1/01/2043 (f)(j) 4,255
Eagle Tax-Exempt Trust, Jefferson County, Alabama, Sewer Revenue Refunding
Bonds, VRDN, Series 2002 (b)(j):
7,835 Class 6015, 2.16% due 2/01/2032 7,835
3,000 Class 6016, 2.16% due 2/01/2038 3,000
32,700 Jefferson County, Alabama, Limited Obligation School Warrants, VRDN, Series B,
2.15% due 1/01/2027 (a)(j) 32,700
5,000 Jefferson County, Alabama, Sewer Revenue Refunding Bonds, VRDN, Series C-6,
2.13% due 2/01/2040 (i)(j) 5,000
18,000 Stevenson, Alabama, IDB, Environmental Improvement Revenue Bonds (Mead
Corporation Project), VRDN, AMT, Series B, 2.34% due 4/01/2033 (j) 18,000
6,300 Stevenson, Alabama, IDB, Environmental Improvement Revenue Refunding Bonds
(Mead Corporation Project), VRDN, AMT, Series C, 2.34% due 11/01/2033 (j) 6,300
Alaska--0.7% 19,400 Alaska Industrial Development and Export Authority Revenue Bonds, ROCS, VRDN,
Series II-R-320, 2.16% due 4/01/2034 (e)(j) 19,400
6,265 Anchorage, Alaska, GO, PUTTERS, VRDN, Series 552, 2.16% due 6/01/2012 (f)(j) 6,265
Valdez, Alaska, Marine Terminal Revenue Refunding Bonds, VRDN (j):
16,155 (BP Pipelines Inc. Project), Series B, 2.23% due 7/01/2037 16,155
24,800 (ConocoPhillips Project), 1.80% due 6/01/2005 24,800
5,500 (ConocoPhillips Transportation Project), 1.47% due 5/01/2005 5,500
Arizona--2.5% 33,000 Apache County, Arizona, IDA, IDR (Tucson Electric Power Co.), VRDN, Series
83-A, 2.35% due 12/15/2018 (j) 33,000
3,000 Arizona School Facilities Board, COP, Refunding, ROCS, VRDN, Series II-R-7001,
2.16% due 9/01/2017 (b)(j) 3,000
10,000 Maricopa County, Arizona, IDA, Health Facilities Revenue Bonds, PUTTERS, VRDN,
Series 420, 2.18% due 1/01/2010 (j) 10,000
Maricopa County, Arizona, IDA, S/F Mortgage Revenue Bonds:
28,556 FLOATS, VRDN, AMT, Series 707, 2.22% due 12/01/2036 (j) 28,556
17,983 Series A, 2.911% due 9/01/2005 17,983
68,595 Series B, 2.757% due 9/01/2005 68,595
71,611 Phoenix, Arizona, IDA, S/F Mortgage Revenue Bonds, AMT, Series A, 2.882%
due 7/01/2005 71,611
9,000 Pima County, Arizona, IDA, S/F Mortgage Revenue Bonds, VRDN, 2.82% due
2/04/2012 (j) 9,000
Portfolio Abbreviations for Master Tax-Exempt Trust
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
COP Certification 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
TAW Tax Anticipation Warrants
TOCS Tender Option Certificates
TRAN Tax Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Arkansas--2.0% $ 7,000 Arkansas State Development Finance Authority, Environmental Facilities
Revenue Bonds (Teris LLC Project), VRDN, AMT, 2.17% due 3/01/2021 (j) $ 7,000
7,800 Arkansas State Development Finance Authority, M/F Housing Revenue Bonds
(Chapelridge Benton Project), VRDN, AMT, Series C, 2.20% due 6/01/2032 (j) 7,800
Arkansas State Development Finance Authority, S/F Mortgage Revenue Bonds:
59,835 2.757% due 9/01/2005 59,835
57,500 FLOATS, AMT, Series 708, 2.38% due 2/01/2008 (j) 57,500
40,000 North Little Rock, Arkansas, Health Facilities Board, Health Care Revenue
Bonds (Baptist Health), VRDN, Series B, 2.15% due 12/01/2021 (f)(j) 40,000
21,940 Pulaski County, Arkansas, Lease Purpose Revenue Bonds, VRDN, Series A,
2.38% due 3/01/2007 (c)(j) 21,940
7,530 Pulaski County, Arkansas, Public Facilities Board, M/F Housing Revenue
Refunding Bonds (Waterford Apartments), VRDN, AMT, 2.20% due 7/01/2032 (j) 7,530
California--4.5% 5,409 California Health Facilities Financing Authority Revenue Bonds, FLOATS, VRDN,
Series 591, 2.17% due 3/01/2014 (f)(j) 5,409
20,900 California Pollution Control Financing Authority, PCR, Refunding (Pacific Gas
and Electric), VRDN, AMT, Series B, 2.24% due 11/01/2026 (j) 20,900
California State Department of Water Resources, Power Supply Revenue Bonds,
VRDN (j):
13,100 Series C-3, 2.10% due 5/01/2022 (a) 13,100
12,270 Series C-8, 2.12% due 5/01/2022 12,270
17,500 California State Economic Recovery, GO, FLOATS, VRDN, Series L27, 2.31%
due 7/01/2017 (j) 17,500
9,805 California State, GO, MERLOTS, VRDN, Series B-45, 2.32% due 10/01/2029 (j) 9,805
California State, RAN:
150,000 Series A, 3% due 6/30/2005 150,467
50,000 Series B, 4.50% due 6/30/2005 50,326
30,000 California Statewide Communities Development Authority, TRAN, Series A-1, 3%
due 6/30/2005 (e) 30,104
26,620 Long Beach, California, Health Facilities Revenue Refunding Bonds (Memorial
Health Services), VRDN, 2.25% due 10/01/2016 (j) 26,620
30,000 Los Angeles, California, Community Redevelopment Agency, M/F Housing Revenue
Bonds (Wilshire Station Apartments Project), VRDN, AMT, Series A, 2.33%
due 10/15/2038 (j) 30,000
37,300 Los Angeles, California, S/F Home Mortgage Revenue Bonds, VRDN, 2.716%
due 10/01/2005 (j) 37,300
25,000 Sacramento County, California, TRAN, Series A, 3% due 7/11/2005 25,093
6,950 South Placer, California, Wastewater Authority, Wastewater Revenue Bonds,
VRDN, Series B, 2.11% due 11/01/2035 (b)(j) 6,950
Colorado--2.2% 7,805 Adams County, Colorado, School District Number 012, GO, ROCS, VRDN, Series
II-R-1045, 2.16% due 12/15/2022 (e)(j) 7,805
3,230 Colorado Department of Transportation Revenue Bonds, ROCS, VRDN, Series
II-R-4046, 2.16% due 12/15/2016 (a)(j) 3,230
10,150 Colorado Department of Transportation, Revenue Refunding Bonds, PUTTERS, VRDN,
Series 318, 2.16% due 6/15/2015 (f)(j) 10,150
12,000 Colorado Educational and Cultural Facilities Authority Revenue Bonds (National
Jewish Federation Bond Program Project), VRDN, Series A-6, 2.20% due 2/01/2025 (j) 12,000
3,960 Colorado Health Facilities Authority, Revenue Refunding Bonds (Catholic Health
Initiatives), VRDN, Series B-1, 2.25% due 3/01/2023 (j) 3,960
6,750 Colorado School Mines Development Corporation, Revenue Refunding Bonds, VRDN,
2.27% due 9/01/2026 (j) 6,750
16,000 Colorado State, Education Loan Program, FLOATS, VRDN, Series L48J, 2.31% due
8/09/2005 (j) 16,000
Denver, Colorado, City and County Airport Revenue Bonds, VRDN, AMT (j):
9,625 Series F, 2.32% due 11/15/2025 9,625
4,575 Series G, 2.32% due 11/15/2025 4,575
Denver, Colorado, City and County Airport Revenue Refunding Bonds, AMT, VRDN (j):
5,905 MERLOTS, Series A61, 2.40% due 11/15/2012 (b) 5,905
19,000 Series C, 2.32% due 11/15/2025 19,000
10,128 Denver, Colorado, City and County S/F Mortgage Revenue Refunding Bonds, VRDN,
AMT, Series A, 2.81% due 10/25/2005 (j) 10,128
2,690 E-470 Public Highway Authority, Colorado, Revenue Refunding Bonds, FLOATS,
VRDN, Series 997, 2.22% due 3/01/2036 (f)(j) 2,690
5,799 El Paso County, Colorado, S/F Mortgage Revenue Refunding Bonds, VRDN,
Series A, 2.80% due 5/25/2005 (j) 5,799
6,500 Pitkin County, Colorado, IDR, Refunding (Aspen Skiing Company Project), VRDN,
AMT, Series B, 2.23% due 4/01/2014 (j) 6,500
53,200 Platte River Power Authority, Colorado, Electric Revenue Refunding Bonds, VRDN,
Sub-Lien, Series S-1, 2.30% due 6/01/2018 (j) 53,200
38,700 University of Colorado Hospital Authority Revenue Bonds, VRDN, Series A, 2.12%
due 11/15/2033 (e)(j) 38,700
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Connecticut-- $ 13,400 Connecticut State Health and Educational Facilities Authority, Revenue
0.4% Refunding Bonds (Ascension Health Credit), VRDN, Series B, 2.27% due
11/15/2029 (j) $ 13,400
5,200 Connecticut State Special Tax Obligation Revenue Bonds, Transportation
Infrastructure, VRDN, Second Lien, Series 1, 2.28% due 12/01/2010 (e)(j) 5,200
19,800 Eagle Tax-Exempt Trust, Connecticut, GO, VRDN, Series 96-0701, 2.14% due
11/15/2007 (j) 19,800
Delaware--0.6% Delaware State EDA Revenue Bonds (Hospital Billing and Collection),
VRDN (a)(j):
39,125 Series B, 2.24% due 12/01/2015 39,125
16,200 Series C, 2.24% due 12/01/2015 16,200
District of 10,000 District of Columbia, CP, 1.98% due 5/04/2005 10,000
Columbia--1.2% District of Columbia, GO, Refunding, VRDN (j):
17,350 MSTR, Series SGA-62, 2.23% due 6/01/2017 (a) 17,350
13,440 Series C, 2.25% due 6/01/2026 (b) 13,440
60,110 District of Columbia, HFA, S/F Mortgage Revenue Bonds, VRDN, AMT, 2.86% due
12/23/2005 (j) 60,110
18,245 District of Columbia Hospital Revenue Bonds, FLOATS, VRDN, Series 712, 2.22%
due 7/15/2019 (j) 18,245
Florida--3.5% 13,885 Broward County, Florida, Professional Sports Facilities, Tax Revenue Bonds,
MSTR, VRDN, Series SGA-38, 2.28% due 9/01/2021 (f)(j) 13,885
22,715 Capital Trust Agency, Florida, M/F Housing Revenue Bonds, VRDN, Series 1999-B,
2.17% due 12/01/2032 (j) 22,715
40,300 Dade County, Florida, Water and Sewer System Revenue Bonds, VRDN, 2.28% due
10/05/2022 (b)(j) 40,300
6,500 Florida Housing Finance Corporation, Housing Revenue Bonds (Tuscany Lakes),
VRDN, AMT, Series 1, 2.20% due 11/15/2035 (d)(j) 6,500
8,000 Florida State Board of Education, GO, MSTR, VRDN, Series SGA-139, 2.28% due
6/01/2032 (f)(j) 8,000
Florida State Board of Education, Lottery Revenue Bonds, VRDN (j):
6,220 FLOATS, Series 858, 2.32% due 1/01/2017 (f) 6,220
2,860 ROCS, Series II-R-4521, 2.15% due 7/01/2020 (b) 2,860
11,678 Florida State Department of Environmental Protection, Preservation Revenue
Bonds, FLOATS, VRDN, Series 722, 2.16% due 7/01/2022 (b)(j) 11,678
6,000 Highlands County, Florida, Health Facilities Authority, Hospital Revenue
Refunding Bonds (Adventist Health System), VRDN, Series C, 2.20% due 11/15/2021 (j) 6,000
3,980 Hillsborough County, Florida, Aviation Authority Revenue Refunding Bonds,
MERLOTS, VRDN, AMT, Series A18, 2.40% due 10/01/2013 (f)(j) 3,980
2,875 Hillsborough County, Florida, Port District Revenue Refunding Bonds, FLOATS,
VRDN, AMT, Series 1019, 2.20% due 6/01/2018 (f)(j) 2,875
Jacksonville Electric Authority, Florida, Water and Sewer System Revenue
Refunding Bonds, VRDN (j):
2,695 PUTTERS, Series 408, 2.16% due 10/01/2011 (b) 2,695
16,965 Series B, 2.28% due 10/01/2036 (i) 16,965
5,000 Jacksonville, Florida, Health Facilities, CP, 1.93% due 7/27/2005 5,000
4,600 Jacksonville, Florida, Sales Tax Revenue Bonds, MERLOTS, VRDN, Series B26,
2.35% due 10/01/2027 (f)(j) 4,600
32,100 Martin County, Florida, PCR, Refunding (Florida Power & Light Company Project),
VRDN, 2.32% due 7/15/2022 (j) 32,100
Orange County, Florida, Health Facilities Authority Revenue Bonds, FLOATS,
VRDN (j):
32,995 Series 532, 2.33% due 11/15/2015 (a) 32,995
19,295 Series 830, 2.16% due 11/15/2022 (e) 19,295
Orlando-Orange County Expressway Authority, Florida, Expressway Revenue Bonds,
VRDN (a)(j):
37,350 Sub-Series A-2, 2.11% due 7/01/2040 37,350
47,600 Sub-Series B-1, 2.28% due 7/01/2040 47,600
10,000 Palm Beach County, Florida, Health Facilities Authority, CP, 2.10% due 5/10/2005 10,000
2,090 Palm Beach County, Florida, School Board, COP, ROCS, VRDN, Series II-R-2105,
2.31% due 8/01/2015 (b)(j) 2,090
6,925 Reedy Creek, Florida, Improvement District, Florida Utilities Revenue Bonds,
ROCS, VRDN, Series II-R-4027, 2.15% due 10/01/2023 (f)(j) 6,925
Georgia--3.9% 4,400 Albany-Dougherty County, Georgia, Hospital Authority, Revenue Refunding Bonds,
FLOATS, VRDN, Series L3J, 2.31% due 9/01/2020 (a)(j) 4,400
16,300 Appling County, Georgia, Development Authority, PCR (Georgia Power Plant Hatch),
VRDN, Second Series, 2.28% due 12/01/2018 (j) 16,300
Atlanta, Georgia, Airport Revenue Refunding Bonds, VRDN (f)(j):
26,710 Series B-2, 2.13% due 1/01/2030 26,710
21,710 Series C-3, 2.13% due 1/01/2030 21,710
4,000 Atlanta, Georgia, Urban Residential Finance Authority, M/F Housing Revenue
Bonds (Lindbergh City Center Apartment Project), VRDN, AMT, 2.19% due
11/01/2044 (j) 4,000
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Georgia Atlanta, Georgia, Water and Wastewater Revenue Bonds, VRDN (j):
(concluded) $ 3,000 MSTR, SGA-145, 2.30% due 11/01/2033 (f) $ 3,000
9,000 ROCS, Series II-R-324, 2.16% due 11/01/2043 (e) 9,000
44,960 Atlanta, Georgia, Water and Wastewater Revenue Refunding Bonds, VRDN,
Series B, 2.13% due 11/01/2038 (e)(j) 44,960
8,000 Augusta, Georgia, Water and Sewer Revenue Refunding Bonds, MSTR, VRDN,
Series SGS-140, 2.30% due 10/01/2032 (e)(j) 8,000
Clayton County, Georgia, Development Authority, Special Facilities Revenue
Bonds (Delta Air Lines Project), VRDN (j):
10,545 AMT, Series B, 2.37% due 5/01/2035 10,545
6,500 AMT, Series C, 2.37% due 5/01/2035 6,500
10,135 Series A, 2.32% due 6/01/2029 10,135
7,000 Cobb County, Georgia, Development Authority Revenue Bonds (Whitefield Academy
Inc. Project), VRDN, 2.28% due 7/01/2025 (j) 7,000
38,500 Cobb County, Georgia, GO, TAN, 3.50% due 12/30/2005 38,798
40,000 Cobb County, Georgia, School District, Short-Term Notes, 3% due 12/30/2005 40,268
Eagle Tax-Exempt Trust, Atlanta, Georgia, Water and Wastewater Revenue Bonds,
VRDN (e)(j):
9,100 Series 2005-0009, Class A, 2.16% due 11/01/2043 9,100
4,475 Series A, 2.32% due 11/01/2028 4,475
10,585 Eagle Tax-Exempt Trust, Georgia, GO, VRDN, Series 01, Class 1001, 2.16% due
11/01/2017 (j) 10,585
6,815 Georgia Municipal Electric Authority, Power Revenue Bonds (MACON Trust), VRDN,
Series E, 2.20% due 1/01/2017 (j) 6,815
2,595 Gwinnett County, Georgia, Development Authority, COP, ROCS, VRDN, Series
II-R-6009, 2.32% due 1/01/2021 (f)(j) 2,595
68,500 Gwinnett County, Georgia, School District, GO, Construction Sales Tax Notes,
3.25% due 12/30/2005 69,055
12,500 Metropolitan Atlanta Rapid Transit Authority, Georgia, CP, 1.85% due 5/03/2005 12,500
5,200 Monroe County, Georgia, Development Authority, PCR (Georgia Power Company--Scherer),
Second Series 95, 1.20% due 4/19/2005 5,200
10,400 Putnam County, Georgia, Development Authority, PCR (Georgia Power Company),
First Series 97, 1.20% due 4/19/2005 10,400
Hawaii--0.4% 7,930 Eagle Tax-Exempt Trust, Hawaii, VRDN, Series 2001, Class 1101, 2.16% due
7/01/2011 (e)(j) 7,930
7,500 Hawaii Pacific Health, Special Purpose Revenue Refunding Bonds (Wilcox
Memorial Hospital), VRDN, Series B-2, 2.35% due 7/01/2033 (h)(j) 7,500
7,220 Hawaii State, GO, FLOATS, VRDN, Series 605, 2.16% due 8/01/2015 (b)(j) 7,220
2,000 Hawaii State, Revenue Bonds, ROCS, VRDN, Series II-R-6504, 2.32% due
10/01/2024 (f)(j) 2,000
15,995 Municipal Securities Trust Certificates Revenue Bonds, VRDN, AMT, Series
2002-186, Class A, 2.30% due 2/25/2021 (f)(j) 15,995
Idaho--0.0% 4,000 Idaho State, GO, TAN, 3% due 6/30/2005 4,014
Illinois--8.0% 14,285 ABN Amro Munitops Certificates Trust, Chicago, Illinois, GO, VRDN, Series
2001-31, 2.33% due 1/01/2009 (b)(j) 14,285
Aurora (Kane, DuPage and Will Counties) and Springfield (Sangamon County),
Illinois, S/F Mortgage Revenue Bonds, AMT:
25,995 FLOATS, VRDN, Series 789, 2.22% due 4/03/2006 (j) 25,995
32,762 FLOATS, VRDN, Series 1021, 2.38% due 3/01/2006 (j) 32,762
11,734 Series A, 2.767% due 4/01/2005 11,734
4,000 Chicago, Illinois, Board of Education, GO, Refunding, PUTTERS, VRDN, Series
472, 2.35% due 6/01/2014 (b)(j) 4,000
4,400 Chicago, Illinois, GO, FLOATS, VRDN, Series 1026, 2.16% due 1/01/2035 (f)(j) 4,400
8,125 Chicago, Illinois, GO, Refunding, PUTTERS, VRDN, Series 737, 2.16% due
1/01/2013 (e)(j) 8,125
11,080 Chicago, Illinois, GO, VRDN, Series B, 2.25% due 1/01/2012 (j) 11,080
17,250 Chicago, Illinois, Metropolitan Water Reclamation District, Greater Chicago
Area, GO, Refunding, VRDN, Series A, 2.29% due 12/01/2031 (j) 17,250
Chicago, Illinois, Midway Airport Revenue Bonds, Second Lien, VRDN, AMT (f)(j):
8,900 Series A, 2.23% due 1/01/2029 8,900
5,000 Series B, 2.23% due 1/01/2029 5,000
5,800 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, ROCS, VRDN,
Series II-R-2021, 2.16% due 1/01/2020 (a)(j) 5,800
Chicago, Illinois, O'Hare International Airport Revenue Bonds, ROCS, VRDN, AMT (j):
2,700 Series II-R-239, 2.20% due 1/01/2022 (e) 2,700
5,995 Series II-R-250, 2.20% due 1/01/2034 (g) 5,995
14,300 Chicago, Illinois, O'Hare International Airport, Special Facilities Revenue
Bonds (Compagnie Nationale--Air France), VRDN, AMT, 2.35% due 5/01/2018 (j) 14,300
14,000 Chicago, Illinois, Park District, Corporate Purpose, TAW, Series A, 3%
due 5/02/2005 14,018
6,765 Chicago, Illinois, Park District, GO, Refunding, ROCS, VRDN, Series
II-R-4002, 2.16% due 1/01/2023 (b)(j) 6,765
3,800 Chicago, Illinois, Revenue Bonds (Homestart Program), VRDN, Series A, 2.21%
due 6/01/2005 (j) 3,800
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Illinois $ 48,400 Chicago, Illinois, Second Lien Water Revenue Refunding Bonds, VRDN, 2.12%
(continued) due 11/01/2031 (f)(j) $ 48,400
3,385 Cook County, Illinois, GO, Refunding, ROCS, VRDN, Series II-R-2063, 2.16%
due 11/15/2021 (f)(j) 3,385
11,000 Eagle Tax-Exempt Trust, Chicago Board of Education, VRDN, Series 01,
Class 1309, 2.16% due 12/01/2026 (j) 11,000
9,900 Eagle Tax-Exempt Trust, Chicago, Illinois, GO, VRDN, Series 98, Class 1301,
2.16% due 1/01/2017 (j) 9,900
30,000 Eagle Tax-Exempt Trust, Cook County, Illinois, VRDN, Series 02, Class 1303,
2.32% due 11/15/2025 (a)(j) 30,000
14,355 Eagle Tax-Exempt Trust, Illinois Metropolitan Expo Center, VRDN, Series 98,
Class 1306, 2.32% due 6/15/2029 (j) 14,355
Eagle Tax-Exempt Trust, Illinois State, GO, VRDN (j):
11,000 Series 01, Class 1307, 2.16% due 11/01/2022 11,000
11,100 Series 02, Class 1302, 2.16% due 2/01/2027 11,100
3,000 Eagle Tax-Exempt Trust, Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Bonds, VRDN, Series 2004-0030, Class A, 2.16%
due 6/15/2042 (f)(j) 3,000
3,400 Eagle Tax-Exempt Trust, Metropolitan Pier and Exposition Authority, Illinois,
Hospitality Facilities Revenue Bonds, Class 49, VRDN, Series A, 2.16% due
7/01/2026 (j) 3,400
5,000 Eagle Tax-Exempt Trust, Metropolitan Pier and Exposition Authority, Illinois,
VRDN, Series 2002-6001, Class A, 2.32% due 12/15/2028 (f)(j) 5,000
2,000 Eagle Tax-Exempt Trust, Regional Transportation Authority, Illinois, Revenue
Bonds, VRDN, Series 2005-0003, Class A, 2.16% due 6/01/2034 (e)(j) 2,000
5,000 Illinois Development Finance Authority, Water Facilities Revenue Refunding
Bonds (Illinois American Water Company), VRDN, AMT, 2.15% due 3/01/2032 (f)(j) 5,000
Illinois Educational Facilities Authority Revenue Bonds, VRDN (j):
8,450 (Art Institute of Chicago), 2.30% due 3/01/2027 8,450
4,700 (Chicago Historical Society), 2.30% due 12/01/2025 4,700
28,800 Illinois Educational Facilities Authority, Revenue Refunding Bonds (The Art
Institute of Chicago), VRDN, 2.30% due 3/01/2027 (j) 28,800
14,000 Illinois HDA, Homeowner Mortgage Revenue Bonds, AMT, Series B-2, 1.04%
due 4/01/2005 14,000
Illinois HDA, M/F Housing Revenue Bonds (Danbury Court Apartments), VRDN, AMT (j):
6,300 Series A, 2.23% due 5/01/2037 6,300
450 Series B, 2.33% due 5/01/2037 450
Illinois Health Facilities Authority Revenue Bonds, Revolving Fund, Pooled,
VRDN (j):
10,000 Series B, 2.25% due 8/01/2020 10,000
7,000 Series F, 2.25% due 8/01/2015 7,000
9,550 Illinois Health Facilities Authority, Revenue Refunding Bonds (Resurrection
Health Care), VRDN, Series A, 2.24% due 5/15/2029 (e)(j) 9,550
2,940 Illinois State Dedicated Tax (Macon Trust), VRDN, Series N, 2.22% due
12/15/2020 (a)(j) 2,940
8,600 Illinois State Finance Authority Revenue Bonds (Northwestern University),
VRDN, Sub-Series A, 2.21% due 12/01/2034 (j) 8,600
12,500 Illinois State Finance Authority, Revenue Refunding Bonds (Central DuPage
Health System), VRDN, Series B, 2.29% due 11/01/2038 (j) 12,500
6,500 Illinois State, GO, FLOATS, VRDN, Series 1024, 2.16% due 3/01/2034 (j) 6,500
8,985 Illinois State, GO, MERLOTS, VRDN, Series B04, 2.35% due 12/01/2024 (e)(j) 8,985
Illinois State, GO, Refunding, VRDN (j):
16,555 FLOATS, Series 743D, 2.32% due 8/01/2015 (f)(i) 16,555
5,880 MERLOTS, Series A49, 2.35% due 8/01/2013 (e) 5,880
16,605 Illinois Student Assistance Commission, Student Loan Revenue Bonds, VRDN,
AMT, Series A-I, 2.33% due 9/01/2034 (f)(j) 16,605
Metropolitan Pier and Exposition Authority, Illinois, Dedicated State Tax
Revenue Bonds, VRDN (f)(j):
1,400 FLOATS, Series 962, 2.22% due 12/15/2034 1,400
4,600 ROCS, Series II-R-271, 2.41% due 12/15/2032 4,600
670 ROCS, Series II-R-310, 2.25% due 12/15/2033 670
4,180 TOCS, Series Z-1, 2.24% due 12/15/2026 4,180
29,950 Municipal Securities Trust Certificates, Chicago O'Hare Airport, Illinois,
Revenue Bonds, VRDN, AMT, Series 2001-151, Class A, 2.25% due 6/30/2015 (a)(j) 29,950
Municipal Securities Trust Certificates, Cook County, Illinois, GO, Refunding,
VRDN, Class A (b)(j):
29,085 Series 2001-145, 2.30% due 11/15/2029 29,085
33,895 Series 2002-191, 2.30% due 3/18/2019 33,895
31,615 Municipal Securities Trust Certificates, Metropolitan Pier and Exposition
Authority, Illinois, Revenue Refunding Bonds, VRDN, Series 2001-157, Class A,
2.30% due 10/05/2017 (b)(j) 31,615
26,045 Municipal Securities Trust Certificates Revenue Refunding Bonds, Chicago O'Hare
International Airport, Illinois, VRDN, AMT, Series 2000-93, Class A, 2.25% due
10/04/2012 (a)(j) 26,045
21,350 Regional Transportation Authority, Illinois, FLOATS, VRDN, Series SG-82, 2.16%
due 6/01/2025 (j) 21,350
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Illinois Regional Transportation Authority, Illinois, GO, MERLOTS, VRDN (j):
(concluded) $ 19,865 Series A24, 2.35% due 7/01/2032 (f) $ 19,865
4,940 Series A41, 2.35% due 6/01/2017 (b) 4,940
5,175 Regional Transportation Authority, Illinois, Revenue Bonds, MERLOTS, VRDN,
Series B15, 2.35% due 6/01/2027 (f)(j) 5,175
33,018 Regional Transportation Authority, Illinois, Revenue Refunding Bonds, FLOATS,
VRDN, Series 818-D, 2.16% due 7/01/2033 (b)(j) 33,018
8,300 Will County, Illinois, Exempt Facilities Revenue Bonds (Amoco Chemical
Company Project), VRDN, AMT, 2.28% due 3/01/2028 (j) 8,300
Indiana--5.3% 10,000 ABN Amro Munitops Certificates Trust, South Bend, Indiana, Community School
District, VRDN, Series 1998-5, 2.33% due 4/05/2006 (e)(j) 10,000
5,400 Carmel, Indiana, School Building Corporation Revenue Bonds, ROCS, VRDN, Series
II-R-2065, 2.16% due 7/15/2020 (f)(j) 5,400
13,000 Goshen, Indiana, EDR, Refunding (Goshen College Project), VRDN, 2.30% due
10/01/2037 (j) 13,000
6,500 Hammond, Indiana, Sewer and Solid Waste Disposal, Revenue Refunding Bonds
(Cargill Inc. Project), VRDN, AMT, 2.39% due 12/01/2024 (j) 6,500
50,000 Indiana Bond Bank, Advance Funding Program Notes, Series A, 3.25% due 1/26/2006 50,383
5,875 Indiana Bond Bank Revenue Bonds, FLOATS, VRDN, Series 670, 2.16% due
10/01/2022 (f)(j) 5,875
Indiana Health Facilities Financing Authority, Hospital Revenue Bonds,
VRDN (j):
79,100 (Clarian Health Obligation Group), Series C, 2.30% due 3/01/2030 79,100
37,100 (Clarian Health Partners), Series H, 2.30% due 3/01/2033 37,100
15,000 (Community Hospitals Project), Series A, 2.10% due 7/01/2027 15,000
Indiana Health Facilities Financing Authority, Hospital Revenue Refunding Bonds
(Clarian Health Partners), VRDN (j):
51,800 Series B, 2.30% due 2/15/2026 51,800
50,800 Series C, 2.30% due 2/15/2026 50,800
350 Indiana Health Facilities Financing Authority Revenue Bonds (Capital Access
Designated Pool), VRDN, 2.30% due 1/01/2012 (j) 350
20,000 Indiana Health Facilities Financing Authority, Revenue Refunding Bonds
(Ascension Health Credit), VRDN, Series GP-A-2, 1.73% due 7/05/2005 (j) 20,000
40,250 Indiana State Development Finance Authority, Environmental Revenue Bonds
(PSI Energy Inc. Projects), VRDN, AMT, Series A, 2.43% due 12/01/2038 (j) 40,250
18,500 Indiana State, HFA, S/F Mortgage Revenue Bonds, VRDN, AMT, Series D-2,
2.30% due 12/15/2005 (j) 18,500
5,325 Indiana State Office Building Commission, Facilities Revenue Bonds, ROCS,
VRDN, Series II-R-4534, 2.16% due 7/01/2020 (j) 5,325
2,000 Indiana Transportation Finance Authority, Highway Revenue Refunding Bonds,
FLOATS, VRDN, Series 942D, 2.16% due 12/01/2022 (b)(j) 2,000
2,600 Indianapolis, Indiana, Local Public Improvement Bond Bank Revenue Bonds,
PUTTERS, VRDN, Series 422, 2.35% due 8/15/2020 (a)(j) 2,600
34,995 Municipal Securities Trust Certificates, Indianapolis, Indiana, Local
Tax-Exempt, GO, VRDN, Series 2002-192, Class A, 2.30% due 6/18/2014 (f)(j) 34,995
7,700 Whiting, Indiana, Environmental Facilities Revenue Bonds (BP Products North
America Project), VRDN, AMT, 2.28% due 7/01/2035 (j) 7,700
Whiting, Indiana, Environmental Facilities Revenue Refunding Bonds, VRDN, AMT (j):
2,400 (Amoco Oil Company Project), 2.28% due 1/01/2026 2,400
1,000 (Amoco Oil Company Project), 2.28% due 7/01/2031 1,000
6,800 (BP Products of North America), 2.28% due 1/01/2038 6,800
26,535 (BP Products Project), Series C, 2.28% due 7/01/2034 26,535
25,600 Whiting, Indiana, Industrial Sewer and Solid Waste Disposal Revenue Refunding
Bonds (Amoco Oil Company Project), VRDN, AMT, 2.28% due 1/01/2026 (j) 25,600
Iowa--0.4% 27,000 Iowa State, TRAN, 3% due 6/30/2005 27,078
10,000 Louisa County, Iowa, PCR, Refunding (Iowa--Illinois Gas and Electric), VRDN,
Series A, 2.37% due 9/01/2016 (j) 10,000
Kansas--0.5% 3,990 Kansas State Department of Transportation, Highway Revenue Bonds, ROCS, VRDN,
Series II-R-6020, 2.32% due 3/01/2019 (e)(j) 3,990
13,000 Kansas State Turnpike Authority, Turnpike Revenue Refunding Bonds, PUTTERS,
VRDN, Series 361, 2.16% due 3/01/2011 (a)(j) 13,000
32,060 Olathe, Kansas, Temporary, GO, Series A, 2.50% due 6/01/2005 32,119
2,775 Reno and Labette Counties, Kansas, S/F Mortgage Revenue Bonds, FLOATS, VRDN,
Series 915, 2.41% due 12/01/2015 (j) 2,775
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Kentucky--2.9% $ 2,500 Boyd County, Kentucky, Sewer and Solid Waste Revenue Bonds (Air Products and
Chemicals Project), VRDN, AMT, 2.35% due 6/01/2021 (j) $ 2,500
7,800 Breckinridge County, Kentucky, Lease Program Revenue Bonds (Kentucky
Association of Counties Leasing Trust), VRDN, Series A, 2.20% due 2/01/2032 (j) 7,800
20,930 Carroll County, Kentucky, Solid Waste, CP, 2.10% due 5/09/2005 20,930
Daviess County, Kentucky, Solid Waste Disposal Facility Revenue Bonds
(Scott Paper Company Project), VRDN, AMT (j):
44,100 Series A, 2.35% due 12/01/2023 44,100
26,200 Series B, 2.35% due 12/01/2023 26,200
3,375 Eagle Tax-Exempt Trust, Kentucky State Property and Buildings Commission,
Revenue Refunding Bonds, VRDN, Series 2004-0002, Class A, 2.32% due
10/01/2018 (e)(j) 3,375
Jefferson County, Kentucky, CP:
22,500 2.02% due 5/02/2005 22,500
26,000 2.05% due 5/02/2005 26,000
2,200 Kenton County, Kentucky, Airport Board, Special Facilities Revenue Refunding
Bonds, VRDN, Series B, 2.32% due 10/01/2030 (j) 2,200
6,850 Kentucky State Property and Buildings Commission, Revenue Refunding Bonds,
FLOATS, VRDN, Series 739, 2.16% due 2/01/2018 (f)(j) 6,850
36,475 Kentucky State Turnpike Authority, Resource Recovery Road Revenue Bonds,
FLOATS, VRDN, Series 488, 2.16% due 7/01/2007 (e)(j) 36,475
4,395 Louisville and Jefferson Counties, Kentucky, Metropolitan Sewer District,
Sewer and Drain System Revenue Bonds, ROCS, VRDN, Series II-R-304, 2.32%
due 5/15/2037 (b)(j) 4,395
50,000 Louisville and Jefferson Counties, Kentucky, Metropolitan Sewer District,
Sewer and Drain System Revenue Refunding Bonds, VRDN, Series B, 2.25% due
5/15/2023 (e)(j) 50,000
15,000 Shelby County, Kentucky, Lease Revenue Bonds, VRDN, Series A, 2.20% due
9/01/2034 (j) 15,000
10,000 Trimble County, Kentucky, CP, 2.02% due 5/02/2005 10,000
Louisiana--3.7% 17,700 Ascension Parish, Louisiana, Revenue Bonds (BASF Corporation Project), VRDN,
AMT, 2.31% due 3/01/2025 (j) 17,700
11,313 East Baton Rouge, Louisiana, Mortgage Finance Authority, S/F Mortgage Revenue
Bonds, VRDN, Series B, 2.87% due 12/01/2005 (j) 11,313
4,995 East Baton Rouge, Louisiana, Mortgage Finance Authority, S/F Revenue Bonds,
FLOATS, VRDN, AMT, Series 996, 2.22% due 6/02/2008 (j) 4,995
16,878 Jefferson Parish, Louisiana, Home Mortgage Authority, S/F Mortgage Revenue Bonds,
VRDN, AMT, Series B, 2.776% due 9/23/2005 (j) 16,878
Jefferson Parish, Louisiana, Hospital Service District Number 001, Hospital
Revenue Bonds, VRDN (j):
10,000 PUTTERS, Series 522, 2.18% due 12/01/2008 10,000
25,000 (West Jefferson Medical Center), Series B, 2.14% due 1/01/2028 (e) 25,000
Louisiana HFA, S/F Mortgage Revenue Refunding Bonds, VRDN (j):
37,505 2.897% due 4/29/2005 37,505
24,143 2.907% due 5/31/2035 24,143
5,506 AMT, 2.907% due 5/31/2005 5,506
6,000 Louisiana Local Government, Environmental Facilities, Community Development
Authority Revenue Bonds (Honeywell International Inc. Project), VRDN, AMT,
2.32% due 12/01/2037 (j) 6,000
Louisiana Public Facilities Authority Revenue Bonds, VRDN (j):
2,850 (Air Products and Chemicals Project), AMT, 2.35% due 12/01/2039 2,850
13,745 (Equipment and Capital Facilities Loan Program), Series C, 2.16% due 7/01/2024 13,745
2,845 Louisiana State GO, FLOATS, VRDN, Series 667, 2.16% due 4/01/2019 (b)(j) 2,845
4,210 Louisiana State GO, Refunding, ROCS, VRDN, Series II-R-1069, 2.16% due
8/01/2017 (f)(j) 4,210
New Orleans, Louisiana, Ernest N. Morial Exhibit Hall Authority, Special Tax,
VRDN (a)(j):
5,105 MERLOTS, Series A46, 2.35% due 7/15/2028 5,105
8,130 ROCS, Series II-R-4038, 2.16% due 7/15/2023 8,130
11,500 New Orleans, Louisiana, Finance Authority, S/F Mortgage Revenue Bonds, FLOATERS,
VRDN, Series 990, 2.22% due 6/02/2008 (j) 11,500
21,557 New Orleans, Louisiana, Finance Authority, S/F Mortgage Revenue Refunding Bonds,
VRDN, Series C, 2.752% due 6/01/2042 (j) 21,557
111,800 New Orleans, Louisiana, Sewer Service Revenue Refunding Notes, BAN, 2.75%
due 7/29/2005 112,254
4,400 Saint Charles Parish, Louisiana, PCR, Refunding (Shell Oil Company Project),
VRDN, 2.14% due 6/01/2005 (j) 4,400
7,700 Saint Charles Parish, Louisiana, PCR (Shell Oil Company--Norco Project), VRDN,
AMT, 2.28% due 11/01/2021 (j) 7,700
4,400 South Louisiana Port Commission, Port Revenue Refunding Bonds (Occidental
Petroleum), VRDN, 2.25% due 7/01/2018 (j) 4,400
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Maine--0.4% $ 7,305 Maine Governmental Facilities Authority, Lease Rental Revenue Refunding
Bonds, ROCS, VRDN, Series II-R-5027, 2.32% due 10/01/2013 (e)(j) $ 7,305
Maine State, GO:
6,000 BAN, 3% due 6/23/2005 6,019
26,000 TAN, 3% due 6/30/2005 26,090
Maryland--0.8% 35,700 Baltimore, Maryland, Port Facilities Revenue Bonds (Occidental Petroleum),
FLOATS, VRDN, 1.98% due 10/14/2011 (j) 35,700
38,305 Maryland State Health and Higher Educational Facilities Authority Revenue
Refunding Bonds, FLOATS, VRDN, Series 867, 2.18% due 7/01/2019 (b)(j) 38,305
Massachusetts-- 44,000 Acton-Boxborough Regional School District, Massachusetts, GO, BAN, 3.50%
3.2% due 12/09/2005 44,310
10,000 Eagle Tax-Exempt Trust, Massachusetts Commuter Facilities, VRDN, Series 2001,
Class 2101, 2.15% due 6/15/2033 (j) 10,000
Massachusetts State, GO (Central Artery), VRDN (j):
23,460 Series A, 2.24% due 12/01/2030 23,460
10,555 Series B, 2.24% due 12/01/2030 10,555
Massachusetts State, GO, Refunding, VRDN (j):
29,745 FLOATS, Series 716D, 2.12% due 8/01/2018 (f) 29,745
2,700 Series A, 2.24% due 9/01/2016 2,700
11,790 Massachusetts State Health and Educational Facilities Authority Revenue Bonds
(Capital Asset Program), VRDN, Series E, 2.22% due 1/01/2035 (j) 11,790
Massachusetts State Heritage, CP:
33,250 2.12% due 5/10/2005 33,250
10,500 2.13% due 5/12/2005 10,500
6,000 Massachusetts State Industrial Finance Agency, CP, 2.15% due 5/11/2005 6,000
Massachusetts State, Special Obligation Revenue Bonds, CP:
30,200 2.30% due 4/14/2005 30,200
19,300 2.30% due 4/26/2005 19,300
9,815 Route 3 North Transit Improvement Association, Massachusetts, Lease Revenue
Refunding Bonds, VRDN, Series B, 2.27% due 6/15/2033 (a)(j) 9,815
9,000 Walpole, Massachusetts, GO, BAN, 3.25% due 11/03/2005 9,071
18,344 Westford, Massachusetts, GO, Refunding, BAN, 2.25% due 5/10/2005 18,363
20,370 Weymouth, Massachusetts, GO, BAN, 3.25% due 9/22/2005 20,468
23,500 Woburn, Massachusetts, GO, BAN, 1.75% due 4/08/2005 23,503
Michigan--2.7% Detroit, Michigan, City School District, VRDN (j):
4,615 GO, Series A, 2.20% due 5/01/2029 (e) 4,615
48,605 MERLOTS, Series A113, 1.80% due 7/27/2005 48,605
6,285 Detroit, Michigan, Sewage Disposal System Revenue Refunding Bonds, MERLOTS,
VRDN, Series B-02, 2.35% due 7/01/2028 (e)(j) 6,285
9,755 Detroit, Michigan, Sewer Disposal Revenue Refunding Bonds, MSTR, VRDN,
SGB 47-A, 2.16% due 7/01/2028 (e)(j) 9,755
8,910 Eagle Tax-Exempt Trust, Detroit, Michigan, GO, VRDN, Series 2004-1006, Class A,
2.16% due 4/01/2009 (f)(j) 8,910
6,900 Eagle Tax-Exempt Trust, Grand Rapids Michigan, Sanitation Sewer System, VRDN,
Series A, 2.32% due 1/01/2022 (b)(j) 6,900
Kent Hospital Finance Authority, Michigan, Revenue Refunding Bonds (Spectrum
Health), VRDN (f)(j):
24,200 Series B, 2.30% due 1/15/2026 24,200
16,800 Series C, 2.30% due 1/15/2026 16,800
20,000 Michigan Municipal Bond Authority Revenue Bonds, Series B-2, 3% due 8/23/2005 20,112
4,285 Michigan State Building Authority, Revenue Refunding Bonds, ROCS, VRDN,
Series II-R-2064, 2.16% due 10/15/2021 (f)(j) 4,285
40,000 Michigan State, GO, Series A, 3.50% due 9/30/2005 40,296
34,400 Michigan State Hospital Finance Authority Revenue Bonds (Ascension Health),
VRDN, Series B-1, 2.24% due 11/15/2033 (j) 34,400
22,000 Michigan State Hospital Finance Authority, Revenue Refunding Bonds, MERLOTS,
VRDN, Series K, 2.35% due 11/15/2023 (f)(j) 22,000
2,600 Michigan State Strategic Fund, CP, 2.15% due 4/01/2005 2,600
16,505 Municipal Securities Trust Certificates, Revenue Refunding Bonds (Michigan
State Hospital), VRDN, Series 1997-24, Class A, 2.30% due 12/01/2005 (e)(j) 16,505
Minnesota--1.7% City of Rochester, Minnesota, CP:
24,200 2.30% due 4/15/2005 24,200
16,250 2.07% due 5/02/2005 16,250
13,500 2.03% due 5/11/2005 13,500
17,468 Duluth, Minnesota, EDA, Health Care Facilities Revenue Refunding Bonds, FLOATS,
VRDN, Series 895, 2.18% due 2/15/2020 (a)(j) 17,468
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Minnesota $ 12,500 Minnesota Rural Water Finance Authority, Public Projects Construction
(concluded) Revenue Notes, 3% due 10/01/2005 $ 12,578
Minnesota State, CP:
50,000 2.03% due 5/19/2005 50,000
16,500 2.03% due 5/20/2005 16,500
14,500 2.03% due 5/26/2005 14,500
1,695 Minnesota State, GO, ROCS, VRDN, Series II-R-4065, 2.16% due 8/01/2023 (j) 1,695
Mississippi--1.4% 7,100 Mississippi Business Finance Corporation, Mississippi Solid Waste Disposal
Revenue Bonds (Mississippi Power Company Project), VRDN, AMT, 2.32% due
7/01/2025 (j) 7,100
3,520 Mississippi Business Finance Corporation, Mississippi, Solid Waste Disposal
Revenue Refunding Bonds (Mississippi Power Company Project), VRDN, AMT,
2.32% due 5/01/2028 (j) 3,520
5,200 Mississippi Business Finance Corporation Revenue Bonds (Mississippi Power
Company), VRDN, AMT, 2.28% due 12/01/2027 (j) 5,200
12,500 Mississippi Home Corporation, Lease Purpose Revenue Bonds, VRDN, 2.22% due
10/01/2007 (j) 12,500
75,355 Mississippi Home Corporation, S/F Revenue Bonds, FLOATS, VRDN, AMT, Series
989, 2.22% due 10/03/2005 (j) 75,355
25,900 Mississippi Hospital Equipment and Facilities Authority Revenue Bonds
(Mississippi Baptist Medical Center), VRDN, 2.15% due 7/01/2012 (j) 25,900
5,500 University of Mississippi Educational Building Corporation Revenue Bonds
(The University of Mississippi Medical Center Pediatric and Research
Facilities Project), VRDN, 2.13% due 6/01/2034 (a)(j) 5,500
Nebraska--1.5% 77,500 American Public Energy Agency, Nebraska, Gas Supply Revenue Bonds (National
Public Gas Agency Project), VRDN, Series B, 2.27% due 2/01/2014 (j) 77,500
2,000 Eagle Tax-Exempt Trust, Nebraska Public Power District Revenue Bonds, VRDN,
Series 1016, Class A, 2.32% due 1/01/2035 (a)(j) 2,000
25,000 Lincoln, Nebraska, Electric System, CP, 2.10% due 4/08/2005 25,000
4,375 Municipal Energy Agency of Nebraska, Power Supply System Revenue Bonds, ROCS,
Series II-R-2051, VRDN, 2.16% due 4/01/2022 (e)(j) 4,375
4,315 Nebhelp Inc., Nebraska, Revenue Bonds, ROCS, VRDN, AMT, Series II-R-205,
2.20% due 6/01/2013 (f)(j) 4,315
32,400 Nebraska Public Power District, CP, 1.98% due 4/06/2005 32,400
4,995 Nebraska Public Power District Revenue Refunding Bonds, ROCS, VRDN, Series
II-R-209, 2.16% due 1/01/2012 (f)(j) 4,995
Nevada--1.1% 29,185 ABN Amro Munitops Certificates Trust, Clark County, Nevada, Airport Revenue
Bonds, VRDN, Series 1999-15, 2.32% due 1/02/2008 (f)(j) 29,185
50,400 Clark County, Nevada, Airport System Subordinate Lien Revenue Refunding Bonds,
VRDN, Series C, 2.28% due 7/01/2029 (b)(j) 50,400
2,495 Clark County, Nevada, IDR, Refunding, PUTTERS, VRDN, AMT, Series 722, 2.19%
due 12/01/2012 (b)(j) 2,495
9,045 Las Vegas Valley, Nevada, Water District, GO, Refunding, MERLOTS, VRDN,
Series B 10, 2.35% due 6/01/2024 (f)(j) 9,045
6,605 Nevada Housing Division Revenue Bonds (Multi-Unit Housing--Mesquite), VRDN,
AMT, Series B, 2.58% due 5/01/2028 (j) 6,605
5,850 Nevada State Department of Business and Industry, Solid Waste Disposal Revenue
Bonds (Republic Services Inc. Project), VRDN, AMT, 2.47% due 12/01/2034 (j) 5,850
7,280 Washoe County, Nevada, School District, GO, ROCS, VRDN, Series II-R-2012,
2.16% due 6/01/2020 (b)(j) 7,280
New Hampshire-- 13,350 New Hampshire Health and Educational Facilities Authority, Revenue
0.9% Refunding Bonds (Dartmouth Hitchcock Obligation), VRDN, Series A, 2.12%
due 8/01/2031 (e)(j) 13,350
New Hampshire Higher Educational and Health Facilities Authority, Revenue
Refunding Bonds, FLOATS, VRDN (b)(j):
5,475 Series 772, 2.18% due 1/01/2017 5,475
11,000 Series 866, 2.18% due 8/15/2021 11,000
7,415 New Hampshire State Business Finance Authority, Resource Recovery Revenue
Refunding Bonds (Wheelabrator), VRDN, Series A, 2.25% due 1/01/2018 (j) 7,415
25,600 New Hampshire State Business Fund, CP, 2.15% due 5/11/2005 25,600
25,000 New Hampshire State Industrial Finance Agency, CP, 2.12% due 5/10/2005 25,000
New Jersey--2.1% 21,832 East Brunswick Township, New Jersey, BAN, 3% due 1/06/2006 21,977
15,000 Fair Lawn, New Jersey, School District, GO, 2.70% due 5/20/2005 15,022
9,500 New Jersey Health Care Facilities Financing Authority Revenue Bonds,
FLOATS, VRDN, Series 702, 2.16% due 7/01/2014 (f)(j) 9,500
52,000 New Jersey State, FLOATS, VRDN, Series L55J, 2.31% due 6/24/2005 (j) 52,000
70,000 New Jersey State, TRAN, Series A, 3% due 6/24/2005 70,170
New Jersey State Turnpike Authority, Turnpike Revenue Bonds, VRDN (e)(j):
10,400 Series C-2, 2.22% due 1/01/2024 10,400
8,000 Series C-3, 2.22% due 1/01/2024 8,000
20,000 Passaic County, New Jersey, GO, Refunding, BAN, 3% due 6/10/2005 20,053
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
New Mexico--1.0% $ 25,000 Bernalillo County, New Mexico, GO, TRAN, 3% due 6/30/2005 $ 25,087
New Mexico Mortgage Finance Authority, S/F Mortgage Program Revenue Bonds, AMT:
10,894 1.625% due 9/23/2005 10,894
42,000 VRDN, 2.716% due 1/01/2040 (j) 42,000
15,000 New Mexico State, FLOATS, VRDN, Series L38, 2.31% due 6/30/2005 (j) 15,000
New York--5.4% 16,230 Albany, New York, City School District, GO, BAN, 2.75% due 6/30/2005 16,274
4,000 Babylon, New York, Union Free School District, GO, TAN, 2.75% due 6/29/2005 4,011
24,700 Eagle Tax-Exempt Trust, New York State Dormitory Authority (Memorial Sloan),
VRDN, Series 98, Class 3202, 2.30% due 7/01/2023 (j) 24,700
14,200 East Meadow, New York, Union Free School District, GO, BAN, 2.50% due 8/17/2005 14,253
8,700 Elmont, New York, Union Free School District, GO, TAN, 2.75% due 6/29/2005 8,721
7,500 Hastings Township, New York, GO, BAN, 2.75% due 7/15/2005 7,524
3,800 Kings Park, New York, Central School District, GO, BAN, 2.75% due 8/02/2005 3,815
9,000 Longwood Central School District of Suffolk County, New York, GO, TAN, 2.75%
due 6/30/2005 9,025
5,805 Metropolitan Transportation Authority, New York, Dedicated Tax Fund, Revenue
Refunding Bonds, VRDN, Series B, 2.12% due 11/01/2022 (e)(j) 5,805
55,000 Monroe County, New York, GO, RAN, 2.50% due 4/15/2005 55,021
20,000 Monroe County, New York, Public Improvement, GO, BAN, 3% due 7/28/2005 20,078
13,995 Municipal Securities Trust Certificates Revenue Bonds, New York City, New York,
City Transitional Finance Authority, VRDN, Series 2002-202, Class A, 2.26%
due 10/21/2010 (b)(j) 13,995
24,000 New York City, New York, City IDA, Liberty Revenue Bonds (One Bryant Park LLC
Project), VRDN, Series A, 2.32% due 11/01/2039 (j) 24,000
15,000 New York City, New York, City Municipal Water Finance Authority, CP, 1.96%
due 4/11/2005 15,000
21,500 New York City, New York, City Municipal Water Finance Authority, Water and
Sewer System Revenue Refunding Bonds, MSTR, VRDN, Series SGB-27, 2.14% due
6/15/2024 (e)(j) 21,500
3,000 New York City, New York, City Transitional Finance Authority Revenue Bonds
(New York City Recovery), VRDN, Series 1, Sub-Series 1D, 2.17% due 11/01/2022 (j) 3,000
8,500 New York State Local Government Assistance Corporation Revenue Bonds, VRDN,
Series B, 2.20% due 4/01/2025 (j) 8,500
3,300 New York State Local Government Assistance Corporation, Revenue Refunding Bonds,
Sub-Lien, VRDN, Series A-5V, 2.20% due 4/01/2020 (e)(j) 3,300
5,995 New York State Power Authority Revenue Bonds, ROCS, VRDN, Series II-R-210,
2.14% due 11/15/2015 (f)(j) 5,995
15,000 Riverhead, New York, Central School District, GO, TAN, 2.75% due 6/30/2005 15,041
12,000 Rochester, New York, GO, Refunding, BAN, Series II, 3% due 10/21/2005 12,073
155,000 Suffolk County, New York, GO, TAN, Series I, 3.25% due 8/16/2005 155,764
19,410 Triborough Bridge and Tunnel Authority, New York, General Purpose Revenue
Bonds, VRDN, Series B, 2.29% due 1/01/2033 (j) 19,410
10,000 Triborough Bridge and Tunnel Authority, New York, General Purpose Revenue
Refunding Bonds, VRDN, Series B, 2.27% due 1/01/2032 (a)(j) 10,000
13,030 Triborough Bridge and Tunnel Authority, New York, Special Obligation Revenue
Refunding Bonds, VRDN, Series C, 2.27% due 1/01/2031 (e)(j) 13,030
25,000 Ulster County, New York, GO, BAN, 2.75% due 6/10/2005 25,055
14,950 Wilson, New York, Central School District, GO, BAN, 2.75% due 8/03/2005 15,008
North Carolina-- 19,995 Municipal Securities Trust Certificates, North Carolina Eastern Municipal
1.5% Power Agency, GO, Refunding, VRDN, Series 2002-201, Class A, 2.28% due
4/12/2017 (j) 19,995
8,165 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds,
MERLOTS, VRDN, Series A22, 1.30% due 4/13/2005 (j) 8,165
49,500 North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds
(Novant Health Group), VRDN, Series A, 2.30% due 11/01/2034 (j) 49,500
North Carolina Medical Care Commission, Hospital Revenue Bonds (Moses H. Cone
Memorial Health System), VRDN (j):
16,000 Series A, 2.10% due 10/01/2035 16,000
15,300 Series B, 2.10% due 10/01/2035 15,300
4,500 North Carolina State, GO, MERLOTS, VRDN, Series A23, 2.35% due 3/01/2027 (j) 4,500
Wake County, North Carolina, GO:
16,000 Series A, 2% due 4/01/2005 16,000
15,000 Series B, 2% due 4/01/2005 15,000
3,900 Wake County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Solid Waste Disposal--Highway 55), VRDN,
AMT, 2.22% due 9/01/2013 (j) 3,900
North Dakota--0.1% 6,320 Oliver City, North Dakota, PCR, Refunding, MERLOTS, VRDN, Series B07, 2.35%
due 1/01/2027 (a)(j) 6,320
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Ohio--1.9% $ 2,000 Brunswick, Ohio, GO, BAN, 2.50% due 5/26/2005 $ 2,003
50,000 Cleveland, Ohio, Water Revenue Refunding Bonds, VRDN, Series M, 2.10%
due 1/01/2033 (e)(j) 50,000
4,000 Eagle Tax-Exempt Trust, Cincinnati, Ohio, City School District, GO, VRDN,
Series 2004-34, Class A, 2.31% due 12/01/2031 (e)(j) 4,000
22,275 Eagle Tax-Exempt Trust, Ohio State Turnpike, VRDN, Series 98, Class 3503,
2.31% due 2/15/2026 (j) 22,275
10,500 Eagle Tax-Exempt Trust, Ohio, Water Authority Revenue Bonds (Ohio Edison),
VRDN, Series 95, Class 3502, 2.15% due 7/01/2015 (j) 10,500
28,000 Hamilton County, Ohio, Health Care Facilities Revenue Bonds (Twin Towers
and Twin Lakes), VRDN, Series A, 2.20% due 7/01/2023 (j) 28,000
9,000 Hamilton County, Ohio, Student Housing Revenue Bonds (Block 3 Community
Urban Redevelopment Corporation Project), VRDN, 2.33% due 8/01/2036 (j) 9,000
2,370 Municipal Securities Trust Certificates, Princeton, Ohio, City School
District, GO, VRDN, Series SGB 50-A, 2.31% due 12/01/2030 (f)(j) 2,370
Ohio State Air Quality Development Authority, Revenue Refunding Bonds
(Cincinnati Gas and Electric), VRDN (j):
7,900 Series A, 2.46% due 9/01/2030 7,900
16,300 Series B, 2.52% due 9/01/2030 16,300
25,000 Ohio State, GO, Common Schools, VRDN, Series A, 2.30% due 3/15/2025 (j) 25,000
5,000 Ohio State, GO, FLOATS, VRDN, Series 603, 2.15% due 9/15/2020 (e)(j) 5,000
Oklahoma--2.1% 3,400 Cleveland County, Oklahoma, Development Authority, Family Mortgage Revenue
Refunding Bonds, VRDN, 1.59% due 5/25/2005 (j) 3,400
3,300 Cleveland County, Oklahoma, Home Loan Authority, S/F Mortgage Revenue
Refunding Bonds, VRDN, Series A, 1.61% due 4/25/2005 (j) 3,300
Comanche County, Oklahoma, Home Finance Authority, S/F Mortgage Revenue Bonds,
VRDN, Series A (j):
19,656 2.767% due 4/01/2005 19,656
3,719 2.53% due 5/02/2005 3,719
17,502 2.921% due 4/03/2006 17,502
3,525 Oklahoma County, Oklahoma, Finance Authority Revenue Bonds (Oklahoma County
Housing Preservation), VRDN, 2.17% due 1/01/2033 (j) 3,525
Oklahoma County, Oklahoma, HFA, S/F Mortgage Revenue Bonds, VRDN (j):
43,623 Series A, 2.779% due 5/02/2005 43,623
10,256 Series D, 2.716% due 2/01/2006 10,256
5,000 Oklahoma State Development Finance Authority Revenue Bonds (ConocoPhillips
Company Project), VRDN, AMT, 2.42% due 12/01/2005 (j) 5,000
2,817 Oklahoma State Housing Finance Agency, S/F Mortgage Revenue Refunding Bonds,
2.68% due 8/31/2005 2,817
42,280 Oklahoma State Industries Authority, Revenue Refunding Bonds (Integris Baptist),
VRDN, Series B, 2.20% due 8/15/2029 (f)(j) 42,280
36,000 Oklahoma State Water Resource Board, State Loan Program Revenue Bonds, VRDN,
Series A, 1.58% due 4/01/2005 (j) 36,000
2,116 Tulsa County, Oklahoma, Home Finance Authority Revenue Bonds, 2.921% due 4/03/2006 2,116
Tulsa County, Oklahoma, Home Finance Authority, S/F Mortgage Revenue Bonds,
VRDN, Series A (j):
7,500 2.757% due 4/01/2005 7,500
2,594 AMT, 2.767% due 4/01/2005 2,594
Oregon--0.2% 11,730 ABN Amro Munitops Certificates Trust, Portland, Oregon, GO, VRDN, Series
2001-4, 2.32% due 6/01/2009 (f)(j) 11,730
4,795 Eagle Tax-Exempt Trust, Oregon State Department of Administrative Services
Revenue Bonds, VRDN, Series 2004-1010, Class A, 2.16% due 9/01/2009 (e)(j) 4,795
Pennsylvania-- 37,325 Allegheny County, Pennsylvania, GO, Refunding, Series C-50, 1.40% due 5/01/2005 37,325
2.7% 2,500 Butler County, Pennsylvania, IDA, IDR, Refunding (Wetterau Finance Co. Project),
VRDN, 2.14% due 12/01/2014 (j) 2,500
25,240 Dauphin County, Pennsylvania, General Authority, Revenue Refunding Bonds
(School District Pooled Financing Program II), VRDN, 2.32% due 9/01/2032 (a)(j) 25,240
Delaware Valley, Pennsylvania, Regional Finance Authority, Local Government
Revenue Bonds, VRDN (j):
15,600 Mode 1, 2.30% due 8/01/2016 15,600
15,100 Series B, 2.30% due 12/01/2020 15,100
5,400 Series C, 2.30% due 12/01/2020 5,400
15,150 Series D, 2.30% due 12/01/2020 15,150
Emmaus, Pennsylvania, General Authority Revenue Bonds, VRDN (j):
13,200 (Pennsylvania Loan Program), Series A, 2.15% due 3/01/2030 (e) 13,200
700 Series D, 2.29% due 3/01/2024 700
10,625 Sub-Series A-10, 2.29% due 3/01/2024 10,625
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Pennsylvania $ 11,690 Erie County, Pennsylvania, Hospital Authority Revenue Bonds, FLOATS, VRDN,
(concluded) Series 820, 2.16% due 7/01/2022 (f)(j) $ 11,690
12,000 Lackawanna County, Pennsylvania, GO, MSTR, VRDN, Series SGB-38, 2.15%
due 9/15/2020 (j) 12,000
5,000 Mount Lebanon, Pennsylvania, School District, GO, MERLOTS, VRDN, Series B19,
2.35% due 2/15/2027 (f)(j) 5,000
6,700 Pennsylvania Economic Development Financing Authority, Wastewater Treatment
Revenue Refunding Bonds (Sunoco Inc.--R & M Project), VRDN, AMT, Series B,
2.53% due 10/01/2034 (j) 6,700
9,590 Pennsylvania State Turnpike Commission, Turnpike Revenue Refunding Bonds,
VRDN, Series B, 2.15% due 12/01/2012 (j) 9,590
25,700 Philadelphia, Pennsylvania, School District, GO, TRAN, 3% due 6/30/2005 25,788
40,475 Philadelphia, Pennsylvania, Water and Wastewater Revenue Refunding Bonds,
VRDN, 2.29% due 6/15/2023 (e)(j) 40,475
Rhode Island--0.4% Rhode Island State and Providence Plantations, GO, FLOATS, VRDN (j):
26,100 Series 568, 2.16% due 9/01/2017 (f) 26,100
16,020 Series 720, 2.16% due 11/01/2022 (b) 16,020
South Carolina-- 12,195 ABN Amro Munitops Certificates Trust, Lexington County, South Carolina, GO,
0.8% VRDN, Series 2001-37, 2.33% due 2/01/2010 (b)(j) 12,195
5,000 Berkeley County, South Carolina, IDR (Nucor Corporation Project), VRDN, AMT,
Series A, 2.34% due 3/01/2029 (j) 5,000
6,380 Florence County, South Carolina, Solid Waste Disposal and Wastewater Treatment
Revenue Bonds (Roche Carolina Inc. Project), VRDN, AMT, 2.30% due 4/01/2027 (j) 6,380
8,035 Medical University Hospital Authority, South Carolina, Hospital Facilities,
Revenue Refunding Bonds, VRDN, Series A-5, 2.17% due 8/15/2027 (f)(j) 8,035
23,000 South Carolina Association of Governmental Organizations, COP, 2.75% due 4/15/2005 23,011
6,250 South Carolina Jobs EDA, EDR (Holcim (US) Inc. Project), VRDN, AMT, 2.27%
due 12/01/2033 (j) 6,250
12,500 South Carolina Transportation Infrastructure Bank Revenue Bonds, FLOATS, VRDN,
Series 728, 2.16% due 10/01/2022 (a)(j) 12,500
South Dakota-- 13,300 Lawrence County, South Dakota, Solid Waste Disposal Revenue Bonds (Homestake
0.1% Mining), VRDN, AMT, Series A, 2.26% due 7/01/2032 (j) 13,300
Tennessee--4.6% 16,000 Blount County, Tennessee, Public Building Authority, Local Government Public
Improvement Revenue Bonds, VRDN, Series A-4-A, 2.27% due 6/01/2032 (j) 16,000
Clarksville, Tennessee, Public Building Authority Revenue Bonds, Pooled
Financing (Tennessee Municipal Bond Fund), VRDN (j):
37,605 2.15% due 11/01/2027 37,605
66,270 2.15% due 6/01/2029 66,270
11,060 2.22% due 7/01/2031 11,060
10,605 2.22% due 1/01/2033 10,605
10,800 2.22% due 7/01/2034 10,800
1,460 Jackson, Tennessee, Health, Educational & Housing Facilities Board, M/F Housing
Revenue Bonds (Villages at Old Hickory Project), VRDN, AMT, 2.69% due 12/01/2005 (j) 1,460
8,100 Loudon, Tennessee, IDB, PCR, Refunding (A.E. Staley Manufacturing Company
Project), VRDN, 2.12% due 6/01/2023 (j) 8,100
6,450 Memphis, Tennessee, Health, Educational and Housing Facility Board, M/F Housing
Revenue Bonds (Chickasaw Place Apartments), VRDN, AMT, 2.22% due 6/01/2033 (j) 6,450
6,020 Memphis, Tennessee, Health, Educational and Housing Facility Board Revenue Bonds
(Not-for-Profit M/F Program), VRDN, 2.17% due 8/01/2032 (j) 6,020
Montgomery County, Tennessee, Public Building Authority, Pooled Financing Revenue
Bonds, VRDN (j):
2,980 (Montgomery County Loan Pool), 2.15% due 7/01/2019 2,980
27,805 (Tennessee County Loan Pool), 2.15% due 11/01/2027 27,805
525 (Tennessee County Loan Pool), 2.22% due 4/01/2032 525
Sevier County, Tennessee, Public Building Authority Revenue Bonds, Local
Government Public Improvement II, VRDN (a)(j):
7,100 Series A-1, 2.14% due 6/01/2024 7,100
4,630 Series E-2, 2.14% due 6/01/2021 4,630
5,000 Series F-3, 2.14% due 6/01/2005 5,000
Sevier County, Tennessee, Public Building Authority Revenue Bonds, Local
Government Public Improvement III, VRDN (j):
69,900 AMT, Series A, 2.30% due 6/01/2028 (a) 69,900
10,000 Series D-2, 2.14% due 6/01/2017 (a) 10,000
4,350 Series D-6, 2.14% due 6/01/2020 (a) 4,350
18,970 Series E-1, 2.14% due 6/01/2025 18,970
10,000 Series E-4, 2.14% due 6/01/2025 (a) 10,000
37,000 Sevier County, Tennessee, Public Building Authority Revenue Bonds, Local
Government Public Improvement VI, VRDN, Series A-1, 2.27% due 6/01/2029 (j) 37,000
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Tennessee $ 4,635 Shelby County, Tennessee, GO, Refunding, ROCS, VRDN, Series II-R-3023,
(concluded) 2.32% due 4/01/2020 (f)(j) $ 4,635
12,000 Shelby County, Tennessee, Health, Educational and Housing Facilities
Board Revenue Bonds (Hutchison School Project), VRDN, 2.15% due 5/01/2026 (j) 12,000
Tennessee HDA, S/F Mortgage Revenue Bonds, VRDN, AMT, Series CN-1 (j):
15,300 2.272% due 8/11/2005 15,300
18,960 2.636% due 8/11/2005 18,960
29,500 Tennessee State Local Development Authority Revenue Bonds (Student Loan
Program), BAN, Series A, 3% due 5/31/2005 29,568
Texas--12.3% 15,750 ABN Amro Munitops Certificates Trust, Houston, Texas, Airport Revenue Bonds,
VRDN, AMT, Series 1998-15, 2.39% due 7/05/2006 (b)(j) 15,750
13,500 ABN Amro Munitops Certificates Trust, San Antonio, Texas, Electric and Gas
Revenue Bonds, VRDN, Series 1998-22, 2.33% due 1/03/2007 (f)(j) 13,500
29,950 ABN Amro Munitops Certificates Trust, San Antonio, Texas, Independent School
District, VRDN, Series 1999-10, 2.32% due 3/07/2007 (j) 29,950
9,030 ABN Amro Munitops Certificates Trust, Texas Permanent School Fund, Independent
School District, GO, VRDN, Series 2001-8, 2.33% due 2/15/2007 (j) 9,030
28,167 Austin, Texas, Utility System, CP, 2.30% due 4/27/2005 28,167
4,510 Austin, Texas, Water and Wastewater System, Revenue Refunding Bonds, ROCS,
VRDN, Series II-R-6029, 2.16% due 11/15/2024 (a)(j) 4,510
10,000 Brazos River Authority, Texas, Harbor Navigational District, Brazoria County
Revenue Bonds (BASF Corp.), VRDN, AMT, 2.31% due 4/01/2032 (j) 10,000
25,000 Brazos River, Texas, Harbor Industrial Development Corporation Revenue Bonds
(BASF Corporation Project), VRDN, AMT, 2.37% due 5/01/2038 (j) 25,000
5,000 Cameron County, Texas, Housing Finance Corporation, S/F Mortgage Revenue Bonds,
VRDN, 2.746% due 9/01/2005 (j) 5,000
18,487 Central Texas Housing Finance Corporation, S/F Mortgage Revenue Bonds, VRDN,
AMT, Series A, 2.753% due 7/01/2005 (j) 18,487
7,370 Corpus Christi, Texas, Business and Job Development Corporation, Sales Tax
Revenue Refunding Bonds, ROCS, VRDN, Series II-R-2001, 1.70% due 9/01/2017 (a)(j) 7,370
4,000 Corpus Christi, Texas, Industrial Development Crop, IDR (Dedietrich USA
Incorporated Project), VRDN, AMT, 2.45% due 11/01/2008 (j) 4,000
3,740 Corpus Christi, Texas, Utility System Revenue Refunding Bonds, ROCS, VRDN,
Series II-R-2149, 2.32% due 7/15/2024 (e)(j) 3,740
Dallas-Fort Worth, Texas, International Airport Revenue Bonds, VRDN, AMT (j):
4,408 FLOATS, Series 824, 2.38% due 11/01/2015 (a) 4,408
7,140 PUTTERS, Series 350, 2.35% due 5/01/2011 (f) 7,140
2,500 PUTTERS, Series 351, 2.19% due 5/01/2008 (e) 2,500
4,995 PUTTERS, Series 385, 2.19% due 5/01/2008 (b) 4,995
3,000 ROCS, Series II-R-268, 2.36% due 11/01/2033 (f) 3,000
Dallas-Fort Worth, Texas, Regional Airport Revenue Bonds, MSTR, VRDN, AMT (f)(j):
25,300 Series SGB-49, 2.25% due 11/01/2023 25,300
9,495 Series SGB-52, 2.33% due 11/01/2017 9,495
Dallas-Fort Worth, Texas, Regional Airport Revenue Refunding Bonds, MSTR, VRDN (j):
23,885 AMT, Series SGB-46, 2.33% due 11/01/2020 (f) 23,885
6,600 Series SGB-52, 2.16% due 11/01/2015 (b) 6,600
2,845 Dallas, Texas, Area Rapid Transit Revenue Refunding Bonds, ROCS, VRDN,
Series II-R-2078, 2.16% due 12/01/2022 (a)(j) 2,845
2,500 Denton, Texas, Independent School District, GO, VRDN, Series 2005-A, 2.18%
due 8/01/2035 (j) 2,500
8,435 Eagle Tax-Exempt Trust, Dallas-Fort Worth, Texas, International Airport Revenue
Bonds, VRDN, AMT, Series 2003-0020, Class A, 2.20% due 11/01/2032 (a)(j) 8,435
9,900 Eagle Tax-Exempt Trust, Dallas-Fort Worth, Texas, VRDN, Series 96C, Class 4301,
2.32% due 11/01/2005 (j) 9,900
6,000 Eagle Tax-Exempt Trust, Dallas, Texas, VRDN, Series 01, Class 4310, 2.16% due
12/01/2026 (j) 6,000
4,915 Eagle Tax-Exempt Trust, San Antonio, Texas, VRDN, Series 01, Class 4311, 2.16%
due 8/15/2026 (j) 4,915
4,924 El Paso County, Texas, Housing Finance Corporation, S/F Mortgage Revenue Bonds,
VRDN, Series A, 2.551% due 12/01/2035 (j) 4,924
4,500 Fort Bend County, Texas, GO, MSTR, VRDN, SGB-46-A, 2.16% due 3/01/2032 (f)(j) 4,500
5,300 Grapevine, Texas, Industrial Development Corporation, Airport Revenue
Refunding Bonds (Southern Air Transport), VRDN, 2.18% due 3/01/2010 (j) 5,300
19,000 Gulf Coast Waste Disposal Authority, Texas, Environmental Facilities Revenue
Bonds (American Aeryl LP Project), VRDN, AMT, 2.20% due 5/01/2038 (j) 19,000
Gulf Coast Waste Disposal Authority, Texas, Revenue Bonds, VRDN, AMT (j):
12,500 (Air Products Project), 2.35% due 3/01/2035 12,500
2,200 (Air Products Project), 2.35% due 12/01/2039 2,200
2,500 (Waste Management Inc.), Series A, 2.35% due 4/01/2019 2,500
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Texas $ 10,470 Harris County-Houston, Texas, Sports Authority, Special Revenue Refunding
(concluded) Bonds, VRDN, TOCS, Series Z-3, 2.24% due 11/15/2025 (f)(j) $ 10,470
Harris County, Texas, Health Facilities Development Corporation, Revenue
Refunding Bonds (Methodist Hospital), VRDN (j):
145,770 2.20% due 5/06/2005 (c)(k) 145,770
60,000 Series B, 2.07% due 12/01/2032 60,000
46,100 Harris County, Texas, Industrial Development Corporation, Solid Waste Disposal
Revenue Bonds (Deer Park Limited Partnership), VRDN, AMT, Series A, 2.29% due
2/01/2023 (j) 46,100
Harris County, Texas, Revenue Refunding Bonds, ROCS, VRDN (j):
10,305 Series II-R-1030, 2.16% due 8/15/2017 (e) 10,305
5,410 Series II-R-2101, 2.32% due 8/15/2014 (b) 5,410
4,503 Houston, Texas, Housing Finance Corporation, S/F Mortgage Revenue Refunding
Bonds, VRDN, 2.015% due 10/03/2005 (j) 4,503
75,000 Houston, Texas, Independent School District, GO, Refunding (School Building),
VRDN, 1.73% due 6/15/2005 (j) 75,000
Houston, Texas, Utility System Revenue Refunding Bonds, VRDN (e)(j):
5,365 ROCS, Series II-R-4063, 2.32% due 5/15/2021 5,365
6,000 TOCS, Series A, 2.17% due 5/25/2012 6,000
7,800 Houston, Texas, Water and Sewer System Revenue Bonds, MERLOTS, VRDN, Series
A-128, 2.35% due 12/01/2029 (f)(j) 7,800
3,370 Irving, Texas, Independent School District, GO, Refunding, ROCS, VRDN, Series
II-R-2028, 2.16% due 2/15/2022 (j) 3,370
5,000 Lewisville, Texas, Independent School District, GO, Refunding, PUTTERS, VRDN,
Series 701, 2.16% due 8/15/2010 (b)(j) 5,000
10,000 Lower Colorado River Authority, Texas, CP, 2.05% due 5/03/2005 10,000
10,395 Municipal Securities Trust Certificates, Austin, Texas, Water Revenue Refunding
Bonds, VRDN, Series 2001-134, Class A, 2.30% due 5/15/2010 (e)(j) 10,395
North Central Texas, CP:
7,000 1.88% due 4/05/2005 7,000
24,000 2.03% due 5/04/2005 24,000
17,335 Port Arthur, Texas, Navigation District, Environmental Facilities Revenue
Refunding Bonds (Motiva Enterprises Project), VRDN, AMT, 2.45% due 12/01/2027 (j) 17,335
10,000 Port Arthur, Texas, Navigation District, Industrial Development Corporation,
Exempt Facilities Revenue Bonds (Air Products and Chemicals Project), VRDN,
AMT, 2.35% due 4/01/2036 (j) 10,000
Port Arthur, Texas, Navigation District Revenue Bonds, VRDN, AMT (j):
20,000 (BASF Corporation Project), 2.31% due 4/01/2033 20,000
10,000 Multi-Mode (Atofina Petrochemicals), Series B, 2.40% due 4/01/2027 10,000
6,000 Port of Corpus Christi Authority, Texas, Nueces County Solid Waste Disposal
Revenue Bonds (Flint Hills Resources LP Project), VRDN, AMT, 2.59% due 1/01/2030 (j) 6,000
50,000 Port of Corpus Christi Authority, Texas, Nueces County Solid Waste Disposal,
Revenue Refunding Bonds (Flint Hills Resources LP Project), VRDN, AMT, Series A,
2.65% due 7/01/2029 (j) 50,000
10,000 San Antonio, Texas, Hotel Occupancy Revenue Bonds, FLOATS, VRDN, Series SG-51,
2.16% due 8/15/2019 (j) 10,000
27,000 San Antonio, Texas, Junior Lien Electric and Gas System Revenue Bonds, VRDN,
2.20% due 12/01/2005 (j) 27,000
4,995 San Marcos, Texas, Consolidated Independent School District, GO, MERLOTS, VRDN,
Series C-23, 1.70% due 9/01/2005 (j) 4,995
7,915 Southeast Texas Housing Finance Corporation Revenue Bonds, VRDN, 2.855% due
4/03/2006 (j) 7,915
8,131 Southeast Texas Housing Finance Corporation, Revenue Refunding Bonds, 2.701%
due 4/01/2005 8,131
33,210 Texas Municipal Power Agency Revenue Bonds, Series 91, CP, 1.93% due 4/04/2005 33,210
45,000 Texas State, College Student Loan, GO, Refunding, VRDN, AMT, 1.80% due
7/01/2005 (j) 45,000
122,000 Texas State, TRAN, 3% due 8/31/2005 122,691
2,200 Texas State Turnpike Authority, Central Texas Turnpike System Revenue Bonds,
ROCS, VRDN, Series II-R-284, 2.32% due 8/15/2039 (a)(j) 2,200
5,460 Texas State University, System Financing Revenue Refunding Bonds, ROCS, VRDN,
Series II-R-1011, 2.16% due 3/15/2019 (e)(j) 5,460
4 Travis County, Texas, Housing Finance Corporation, S/F Mortgage Revenue Bonds,
VRDN, Series 2001-1, 2.54% due 5/01/2007 (j) 4
15,200 University of Texas, CP, 1.95% due 4/11/2005 15,200
5,000 Victoria County, Texas, Hospital Revenue Refunding Bonds, FLOATS, VRDN, Series
959, 2.16% due 1/01/2016 (a)(j) 5,000
6,200 West Side Calhoun County, Texas, Navigation District Sewer and Solid Waste
District Revenue Bonds (BP Chemicals Inc. Project), VRDN, AMT, 2.28% due
4/01/2031 (j) 6,200
4,775 Williamson County, Texas, GO, Refunding, PUTTERS, VRDN, Series 410, 2.32%
due 2/15/2012 (f)(j) 4,775
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (continued) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
Utah--0.2% $ 7,400 Intermountain Power Agency, Utah, Power Supply Revenue Bonds, VRDN, Series F,
2.02% due 7/01/2018 (a)(j) $ 7,400
5,000 Murray City, Utah, Hospital Revenue Bonds (IHC Health Services, Inc.), VRDN,
Series C, 2.20% due 5/15/2036 (j) 5,000
8,300 Utah Water Finance Agency, Tender Option Revenue Bonds, VRDN, Series A-9,
2.33% due 7/01/2034 (a)(j) 8,300
Vermont--0.0% 2,650 Vermont HFA, S/F Revenue Bonds, VRDN, AMT, Series 16 A, 2.25% due
5/01/2032 (e)(j) 2,650
Virginia--1.4% Metropolitan Washington Airports Authority, D.C., Airport System Revenue
Refunding Bonds, VRDN, AMT (j):
49,040 MERLOTS, Series C35, 1.73% due 10/01/2014 (f) 49,040
1,700 PUTTERS, Series 404, 2.19% due 10/01/2011 (b) 1,700
7,725 Metropolitan Washington Airports Authority, D.C., System Revenue Bonds, ROCS,
VRDN, Series II-R-195, 2.20% due 10/01/2032 (b)(j) 7,725
Norfolk, Virginia, CP:
36,200 1.98% due 4/06/2005 36,200
38,000 2.03% due 5/06/2005 38,000
Washington--2.8% 20,000 ABN Amro Munitops Certificates Trust, Port Seattle, Washington Revenue Bonds,
VRDN, Series 1998-16, 2.33% due 10/04/2006 (f)(j) 20,000
12,685 Central Puget Sound, Washington, Regional Transit Authority, Sales and Use
Tax Revenue Bonds, ROCS, VRDN, Series II-R-7510, 2.32% due 11/01/2023 (a)(j) 12,685
22,900 Clark County, Washington, Public Utility District Number 001, Generating System
Revenue Refunding Bonds, MSTR, VRDN, Series SGA-118, 2.23% due 1/01/2025 (e)(j) 22,900
3,000 Eagle Tax-Exempt Trust, Bellevue, Washington, GO, Refunding, VRDN, Series
2004-1011, Class A, 2.16% due 12/01/2043 (f)(j) 3,000
19,000 Energy Northwest, Washington, Electric Revenue Refunding Bonds (Project No. 3),
VRDN, Series D-3-1, 2.29% due 7/01/2018 (e)(j) 19,000
8,945 Grant County, Washington, Public Utility District Number 002, Electric Revenue
Refunding Bonds, ROCS, VRDN, Series II-R-2039, 2.16% due 1/01/2019 (e)(j) 8,945
1,830 King County, Washington, GO, ROCS, VRDN, Series II-R-5036, 2.32% due
12/01/2013 (a)(j) 1,830
5,250 King County, Washington, School District Number 410, Snoqualmie Valley, GO,
ROCS, VRDN, Series II-R-4513, 2.16% due 12/01/2020 (e)(j) 5,250
14,745 King County, Washington, Sewer Revenue Refunding Bonds, FLOATS, VRDN, Series
554, 2.16% due 7/01/2009 (b)(j) 14,745
2,275 Lewis County, Washington, Public Utility District Number 001, Cowlitz Falls
Hydroelectric Revenue Refunding Bonds, VRDN, Series II-R-4026, 2.16% due
10/01/2023 (f)(j) 2,275
14,070 Municipal Securities Trust Certificates, Washington State Motor Vehicle Fuel
Tax, GO, VRDN, Series 2001-112, Class A, 2.23% due 1/07/2021 (j) 14,070
4,965 Port of Seattle, Washington, Revenue Bonds, MERLOTS, VRDN, AMT, Series B04,
2.40% due 9/01/2015 (b)(j) 4,965
1,000 Port of Seattle, Washington, Revenue Refunding Bonds, FLOATS, VRDN, Series
1028, 2.16% due 7/01/2033 (f)(j) 1,000
4,965 Seattle, Washington, Water System Revenue Refunding Bonds, ROCS, VRDN, Series
II-R-4006, 2.16% due 9/01/2022 (f)(j) 4,965
23,500 Snohomish County, Washington, Public Utility District Number 001, Electric
Revenue Bonds (Generation System), VRDN, 2.28% due 1/01/2025 (f)(j) 23,500
3,480 Spokane County, Washington, Spokane School District Number 081, GO, ROCS,
VRDN, Series II-R-4000, 2.16% due 12/01/2019 (e)(j) 3,480
5,635 Tacoma, Washington, Convention Center and Parking Revenue Bonds, ROCS, VRDN,
Series II-R-2144, 2.32% due 12/01/2022 (f)(j) 5,635
14,020 Tacoma, Washington, Water Revenue Refunding Bonds, FLOATS, VRDN, Series 555,
2.16% due 12/01/2009 (b)(j) 14,020
Washington State, GO, PUTTERS, VRDN (j):
15,075 Series 333, 2.19% due 12/01/2014 (f) 15,075
5,960 Series 747, 2.16% due 1/01/2013 (e) 5,960
4,485 Series 749, 2.16% due 1/01/2013 (e) 4,485
Washington State, GO, Refunding, MERLOTS, VRDN (f)(j):
5,230 Series A05, 2.35% due 1/01/2013 5,230
12,865 Series A57, 2.35% due 1/01/2011 12,865
Washington State Housing Finance Commission, M/F Housing Revenue Bonds,
VRDN, AMT (j):
6,400 (Arbors on the Park Project), 2.45% due 10/01/2024 6,400
9,305 (Courtside Apartments Project), 2.22% due 1/01/2026 9,305
Washington State Public Power Supply Systems, Electric Revenue Refunding Bonds
(Project Number 2), VRDN (f)(j):
17,505 Series 2A-1, 2.28% due 7/01/2012 17,505
11,440 Series 2A-2, 2.28% due 7/01/2012 11,440
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Schedule of Investments (concluded) Master Tax-Exempt Trust (In Thousands)
Face
State Amount Municipal Bonds Value
West Virginia-- $ 10,695 ABN Amro Munitops Certificates Trust, West Virginia State, GO, VRDN, Series
0.2% 2000-12, 2.33% due 6/04/2008 (f)(j) $ 10,695
11,220 Hancock County, West Virginia, County Commission, IDR, Refunding (The BOC
Group Inc. Project), VRDN, 2.12% due 8/01/2005 (j) 11,220
Wisconsin--1.1% 16,000 Carlton, Wisconsin, PCR, Refunding (Wisconsin Power and Light Company Project),
VRDN, Series B, 2.50% due 9/01/2005 (j) 16,000
14,850 Eagle Tax-Exempt Trust, Wisconsin Ball Park, VRDN, Series 98, Class 4901,
2.32% due 12/15/2026 (j) 14,850
5,000 Eagle Tax-Exempt Trust, Wisconsin State, GO, Refunding, VRDN, Series 2004-1009,
Class A, 2.16% due 5/01/2008 (b)(j) 5,000
3,170 Hartland, Wisconsin, IDR (Commercial Communications Inc. Project), VRDN, AMT,
2.25% due 8/01/2009 (j) 3,170
2,690 Manitowoc, Wisconsin, Electric Revenue Bonds, ROCS, VRDN, Series II-R-2177, 2.16%
due 10/01/2024 (b)(j) 2,690
4,545 Milwaukee, Wisconsin, GO, PUTTERS, VRDN, Series 762, 2.16% due 2/15/2013 (e)(j) 4,545
57,570 Wisconsin State, GO, CP, 2% due 4/06/2005 57,570
6,065 Wisconsin State, Transportation Revenue Refunding Bonds, ROCS, Series
II-R-2180, 1.84% due 7/01/2025 (e)(j) 6,065
Wyoming--1.2% 12,960 Lincoln County, Wyoming, PCR, Refunding (PacifiCorp Projects), VRDN, 2.24% due
11/01/2024 (a)(j) 12,960
16,960 Sweetwater County, Wyoming, PCR, Refunding (PacifiCorp Project), VRDN, 2.24%
due 11/01/2024 (a)(j) 16,960
83,000 Wyoming State Education Fund, TRAN, 3% due 6/24/2005 83,275
Puerto Rico--0.3% 12,800 Puerto Rico Electric Power Authority, Power Revenue Bonds, MSTR, VRDN, Series
SGA-43, 2.23% due 7/01/2022 (f)(j) 12,800
Puerto Rico Government Development Bank, CP:
8,712 2.05% due 4/12/2005 8,712
10,000 2.15% due 5/02/2005 10,000
Total Investments (Cost--$9,920,471*)--101.8% 9,920,471
Liabilities in Excess of Other Assets--(1.8%) (170,664)
-----------
Net Assets--100.0% $ 9,749,807
===========
* Cost for federal income tax purposes.
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FHLMC Collateralized.
(d) FNMA Collateralized.
(e) FSA Insured.
(f) MBIA Insured.
(g) CIFG Insured.
(h) Radian Insured.
(i) XL Capital Insured.
(j) Security may have a maturity of more than one year at time of issuance, but has
variable rate and demand features which qualify it as a short-term security.
The rate disclosed is that currently in effect. This rate changes periodically
based upon prevailing market rates.
(k) Prerefunded.
See Notes to Financial Statements.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Statement of Assets and Liabilities Master Tax-Exempt Trust
As of March 31, 2005
Assets
Investments in unaffiliated securities, at value
(identified cost--$9,920,470,700) $ 9,920,470,700
Cash 234,776
Receivables:
Interest $ 49,204,892
Contributions 117,386 49,322,278
---------------
Prepaid expenses 31,398
---------------
Total assets 9,970,059,152
---------------
Liabilities
Payables:
Securities purchased 218,980,582
Investment adviser 977,753
Other affiliates 101,693 220,060,028
---------------
Accrued expenses and other liabilities 192,111
---------------
Total liabilities 220,252,139
---------------
Net Assets
Net assets $ 9,749,807,013
===============
Net Assets Consist of
Investors' capital $ 9,749,807,013
---------------
Net Assets $ 9,749,807,013
===============
See Notes to Financial Statements.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Statement of Operations Master Tax-Exempt Trust
For the Year Ended March 31, 2005
Investment Income
Interest and amortization of premium and discount earned $ 146,570,995
Expenses
Investment advisory fees $ 13,303,547
Accounting services 1,292,053
Custodian fees 244,045
Professional fees 106,058
Pricing fees 64,779
Trustees' fees and expenses 58,529
Printing and shareholder reports 46,633
Other 92,450
---------------
Total expenses 15,208,094
---------------
Investment income--net 131,362,901
---------------
Realized Loss--Net
Realized loss on investments--net (941,838)
---------------
Net Increase in Net Assets Resulting from Operations $ 130,421,063
===============
See Notes to Financial Statements.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Statements of Changes in Net Assets Master Tax-Exempt Trust
For the Year Ended March 31,
Increase (Decrease) in Net Assets: 2005 2004
Operations
Investment income--net $ 131,362,901 $ 98,514,257
Realized loss--net (941,838) (272,665)
---------------- ----------------
Net increase in net assets resulting from operations 130,421,063 98,241,592
---------------- ----------------
Capital Transactions
Proceeds from contributions 42,296,733,453 38,210,930,891
Fair value of withdrawals (42,929,977,629) (38,647,721,740)
---------------- ----------------
Net decrease in net assets derived from capital transactions (633,244,176) (436,790,849)
---------------- ----------------
Net Assets
Total decrease in net assets (502,823,113) (338,549,257)
Beginning of year 10,252,630,126 10,591,179,383
---------------- ----------------
End of year $ 9,749,807,013 $ 10,252,630,126
================ ================
See Notes to Financial Statements.
Financial Highlights Master Tax-Exempt Trust
For the Period
For the Year Ended February 13, 2003++
The following per share data and ratios have been derived March 31, to March 31,
from information provided in the financial statements. 2005 2004 2003
Total Investment Return
Total investment return 1.33% .94% .68%*
============== ============== ==============
Ratios to Average Net Assets
Expenses .15% .15% .21%*
============== ============== ==============
Investment income and realized gain (loss)--net 1.31% .94% 1.04%*
============== ============== ==============
Supplemental Data
Net assets, end of period (in thousands) $ 9,749,807 $ 10,252,630 $ 10,591,179
============== ============== ==============
* Annualized.
++ Commencement of operations.
See Notes to Financial Statements.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Notes to Financial Statements
Master Tax-Exempt Trust
1. Significant Accounting Policies:
Master Tax-Exempt Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, and is organized as a
Delaware statutory trust. The Declaration of Trust permits the
Trustees to issue nontransferable interest in the Trust, subject to
certain limitations. The Trust's financial statements are prepared
in conformity with U.S. generally accepted accounting principles,
which may require the use of management accruals and estimates.
Actual results may differ from these 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. 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 year ended March 31, 2004, the Trust reimbursed FAM $248,516
for certain accounting services.
Certain officers and/or trustees of the Trust are officers and/or
directors of FAM, PSI, and/or ML & Co.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Report of Independent Registered Public Accounting Firm
Master Tax-Exempt Trust
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, 2005, 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 respective periods 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 the standards of the
Public Company Accounting Oversight Board (United States). 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. The Trust is
not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Trust's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation of securities
owned as of March 31, 2005, by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed
other auditing procedures. 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 Master Tax-Exempt Trust as of March 31, 2005,
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 respective periods then
ended, in conformity with U.S. generally accepted accounting
principles.
Deloitte & Touche LLP
Princeton, New Jersey
May 20, 2005
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Officers and Trustees
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name, Address & Age Fund/Trust Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Interested Trustee
Robert C. Doll, Jr.* President 2005 to President of MLIM/FAM-advised funds since 124 Funds None
P.O. Box 9011 and present 2005; President of MLIM and FAM since 2001; 163 Portfolios
Princeton, Trustee Co-Head (Americas Region) thereof from 2000
NJ 08543-9011 to 2001 and Senior Vice President from 1999
Age: 50 to 2001; President and Director of Princeton
Services, Inc. ("Princeton Services") since
2001; President of Princeton Administrators,
L.P. ("Princeton Administrators") since
2001; Chief Investment Officer of Oppenheimer
Funds, Inc. in 1999 and Executive Vice
President thereof from 1991 to 1999.
* Mr. Doll 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. Doll is an "interested person," as defined
in the Investment Company Act, of the Fund based on his current
positions with MLIM, FAM, Princeton Services and Princeton
Administrators, L.P. Trustees serve until their resignation, removal
or death, or until December 31 of the year in which they turn 72. As
Fund/Trust President, Mr. Doll serves at the pleasure of the Board
of Trustees.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Officers and Trustees (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/Trust Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Independent Trustees*
Ronald W. Forbes Trustee 1982/2002 Professor Emeritus of Finance, School of 48 Funds None
P.O. Box 9095 to present Business, State University of New York 48 Portfolios
Princeton, at Albany since 2000 and Professor
NJ 08543-9095 thereof from 1989 to 2000; International
Age: 64 Consultant, Urban Institute from 1995 to
1999.
Cynthia A. Montgomery Trustee 1994/2002 Professor, Harvard Business School since 48 Funds Newell
P.O. Box 9095 to present 1989; Associate Professor, J.L. Kellogg 48 Portfolios Rubbermaid, Inc.
Princeton, Graduate School of Management, Northwestern (manufacturing)
NJ 08543-9095 University from 1985 to 1989; Associate
Age: 52 Professor, Graduate School of Business
Administration, University of Michigan
from 1979 to 1985; Director, Harvard
Business School of Publishing since 2005.
Jean Margo Reid Trustee 2004 to Self-employed consultant since 2001; 48 Funds None
P.O. Box 9095 present Counsel of Alliance Capital Management 48 Portfolios
Princeton, (investment adviser) in 2000; General
NJ 08543-9095 Counsel, Director and Secretary of
Age: 59 Sanford C. Bernstein & Co., Inc.
(investment adviser/broker-dealer) from
1997 to 2000; Secretary, Sanford C.
Bernstein Fund, Inc. from 1994 to 2000;
Director and Secretary of SCB, Inc. since
1998; Director and Secretary of SCB
Partners, Inc. since 2000; Director of
Covenant House from 2001 to 2004.
Roscoe S. Suddarth Trustee 2000/2002 President, Middle East Institute from 48 Funds None
P.O. Box 9095 to present 1995 to 2001; Foreign Service Officer, 48 Portfolios
Princeton, United States Foreign Service from 1961
NJ 08543-9095 to 1995; Career Minister from 1989 to
Age: 69 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 1981/2002 Professor of Finance from 1984 to 1995, 48 Funds Bowne & Co.,
P.O. Box 9095 to present Dean from 1984 to 1993 and since 1995 48 Portfolios Inc. (financial
Princeton, Dean Emeritus of New York University printers);
NJ 08543-9095 Leonard N. Stern School of Business Vornado
Age: 67 Administration. Realty Trust
(real estate
company);
Alexander's, Inc.
(real estate
company)
Edward D. Zinbarg Trustee 2000/2002 Self-employed financial consultant since 48 Funds None
P.O. Box 9095 to present 1994; Executive Vice President of The 48 Portfolios
Princeton, Prudential Insurance Company of America
NJ 08543-9095 from 1988 to 1994; former Director of
Age: 70 Prudential Reinsurance Company and former
Trustee of The Prudential Foundation.
* Trustees serve until their resignation, removal or death, or until
December 31 of the year in which they turn 72.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
Officers and Trustees (concluded)
Position(s) Length of
Held with Time
Name, Address & Age Fund/Trust Served Principal Occupation(s) During Past 5 Years
Fund Officers*
Donald C. Burke Vice 1993/2002 First Vice President of MLIM and FAM since 1997 and Treasurer thereof since
P.O. Box 9011 President to present 1999; Senior Vice President and Treasurer of Princeton Services since 1999
Princeton, and and and Director since 2004; Vice President of FAMD since 1999; Vice President
NJ 08543-9011 Treasurer 1999 to of MLIM and FAM from 1990 to 1997; Director of Taxation of MLIM from 1990
Age: 44 present to 2001; Vice President, Treasurer and Secretary of the IQ Funds since 2004.
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: 54
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: 41
Peter J. Hayes Vice 1989/2002 Managing Director of MLIM since 2000; Director (Tax-Exempt Fund Management)
P.O. Box 9011 President to present of MLIM from 1997 to 2000.
Princeton,
NJ 08543-9011
Age: 45
Jeffrey Hiller Chief 2004 to Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice
P.O. Box 9011 Compliance present President and Chief Compliance Officer of MLIM (Americas Region) since 2004;
Princeton, Officer Chief Compliance Officer of the IQ Funds since 2004; Global Director of
NJ 08543-9011 Compliance at Morgan Stanley Investment Management from 2002 to 2004;
Age: 53 Managing Director and Global Director of Compliance at Citigroup Asset
Management from 2000 to 2002; Chief Compliance Officer at Soros Fund
Management in 2000; Chief Compliance Officer at Prudential Financial from
1995 to 2000; Senior Counsel in the Commission's Division of Enforcement in
Washington, D.C. from 1990 to 1995.
Alice A. Pellegrino Secretary 2004 to Director (Legal Advisory) of MLIM since 2002; Vice President of MLIM from
P.O. Box 9011 present 1999 to 2002; Attorney associated with MLIM since 1997; Secretary of MLIM,
Princeton, FAM, FAMD and Princeton Services since 2004.
NJ 08543-9011
Age: 45
* Officers of the Fund/Trust 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 (800-262-4636).
Effective January 1, 2005, Terry K. Glenn, President and Trustee and
Kevin A. Ryan, Trustee of CMA Tax-Exempt Fund and Master Tax-Exempt
Trust retired. The Fund's/Trust's Board of Trustees wishes Messrs.
Glenn and Ryan well in their retirements.
Effective January 1, 2005, Robert C. Doll, Jr. became President and
Trustee of the Fund and the Trust.
CMA TAX-EXEMPT FUND, MARCH 31, 2005
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
CMA Tax-Exempt Fund
(a) Audit Fees - Fiscal Year Ending March 31, 2005 - $6,500
Fiscal Year Ending March 31, 2004 - $6,200
(b) Audit-Related Fees -
Fiscal Year Ending March 31, 2005 - $0
Fiscal Year Ending March 31, 2004 - $0
(c) Tax Fees - Fiscal Year Ending March 31, 2005 - $5,700
Fiscal Year Ending March 31, 2004 - $5,200
The nature of the services include tax compliance, tax advice
and tax planning.
(d) All Other Fees - Fiscal Year Ending March 31, 2005 - $0
Fiscal Year Ending March 31, 2004 - $0
Master Tax-Exempt Trust
(a) Audit Fees - Fiscal Year Ending March 31, 2005 - $35,000
Fiscal Year Ending March 31, 2004 - $33,000
(b) Audit-Related Fees -
Fiscal Year Ending March 31, 2005 - $0
Fiscal Year Ending March 31, 2004 - $0
(c) Tax Fees - Fiscal Year Ending March 31, 2005 - $6,500
Fiscal Year Ending March 31, 2004 - $6,000
The nature of the services include tax compliance, tax advice
and tax planning.
(d) All Other Fees - Fiscal Year Ending March 31, 2005 - $0
Fiscal Year Ending March 31, 2004 - $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 all of the
registrants the Committee oversees. 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, 2005 - $10,018,400
Fiscal Year Ending March 31, 2004 - $16,708,160
(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) - $945,000, 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 - Portfolio Managers of Closed-End Management Investment
Companies - Not Applicable
Item 9 - Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers - Not
Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - Not
Applicable
Item 11 - Controls and Procedures
11(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.
11(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 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(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 Tax-Exempt Fund and Master Tax-Exempt Trust
By: /s/ Robert C. Doll, Jr.
-------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
CMA Tax-Exempt Fund and Master Tax-Exempt Trust
Date: May 23, 2005
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/ Robert C. Doll, Jr.
--------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
CMA Tax-Exempt Fund and Master Tax-Exempt Trust
Date: May 23, 2005
By: /s/ Donald C. Burke
----------------------------
Donald C. Burke,
Chief Financial Officer of
CMA Tax-Exempt Fund and Master Tax-Exempt Trust
Date: May 23, 2005