<Page>
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: 811-06173
-----------------------------------------------
UBS MUNICIPAL MONEY MARKET SERIES
----------------------------------------------------------------------
(Exact name of registrant as specified in charter)
51 West 52nd Street, New York, New York 10019-6114
----------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Mark F. Kemper, Esq.
UBS Global Asset Management (US) Inc.
51 West 52nd Street
New York, NY 10019-6114
(Name and address of agent for service)
Copy to:
Jack W. Murphy, Esq.
Dechert LLP
1775 I Street, N.W.
Washington, DC 20006-2401
Registrant's telephone number, including area code: 212-882 5000
Date of fiscal year end: June 30
Date of reporting period: December 31, 2005
<Page>
ITEM 1. REPORTS TO STOCKHOLDERS.
<Page>
[UBS GLOBAL ASSET MANAGEMENT LOGO]
UBS RMA
MONEY MARKET PORTFOLIO
U.S. GOVERNMENT PORTFOLIO
TAX-FREE FUND
CALIFORNIA MUNICIPAL MONEY FUND
NEW YORK MUNICIPAL MONEY FUND
NEW JERSEY MUNICIPAL MONEY FUND
SEMIANNUAL REPORT
DECEMBER 31, 2005
<Page>
February 15, 2006
DEAR SHAREHOLDER,
We present you with the semiannual report for UBS RMA Money Market Portfolio;
UBS RMA U.S. Government Portfolio; UBS RMA Tax-Free Fund Inc.; UBS RMA
California Municipal Money Fund; UBS RMA New York Municipal Money Fund; and UBS
RMA New Jersey Municipal Money Fund, for the six months ended December 31, 2005.
PERFORMANCE
With short-term interest rates rising during the past six months, the yields
available on money market securities rose as well. As of December 31, 2005, the
Funds' seven day current yields were: UBS RMA Money Market Portfolio: 3.73%; UBS
RMA U.S. Government Portfolio: 3.33%; UBS RMA Tax-Free Fund Inc.: 2.78%; UBS RMA
California Municipal Money Fund: 2.67%; UBS RMA New York Municipal Money Fund:
2.70%; and UBS RMA New Jersey Municipal Money Fund: 2.52%. (For more on the
Funds' performance, refer to "Performance and Portfolio Characteristics at a
Glance" on pages 8 and 9.)
AN INTERVIEW WITH THE PORTFOLIO MANAGERS
Q. HOW WOULD YOU DESCRIBE THE ECONOMIC ENVIRONMENT DURING THE REPORTING PERIOD?
A. Although the US economy faced a number of challenges during the reporting
period, including high oil prices, rising short-term interest rates,
continuing challenges on a geopolitical level and a devastating hurricane
season at home, it ultimately proved to be quite resilient by most measures.
Gross domestic product (GDP) growth rates for the first three quarters of
2005 averaged more than 3.7%. Although advance estimates for
[SIDENOTE]
UBS RMA MONEY MARKET PORTFOLIO,
UBS RMA U.S. GOVERNMENT PORTFOLIO
INVESTMENT GOAL (BOTH PORTFOLIOS):
Maximum current income consistent with preservation of capital and liquidity.
PORTFOLIO MANAGERS (BOTH PORTFOLIOS):
Michael Markowitz
Robert Sabatino
UBS Global Asset Management (US) Inc.
COMMENCEMENT (BOTH PORTFOLIOS):
October 4, 1982
DIVIDEND PAYMENT (BOTH PORTFOLIOS):
Monthly
UBS RMA TAX-FREE FUND INC., UBS RMA CALIFORNIA MUNICIPAL MONEY FUND, UBS RMA NEW
YORK MUNICIPAL MONEY FUND, UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
INVESTMENT GOAL (ALL FOUR FUNDS):
Maximum current income exempt from federal and/or a specific state's personal
income taxes consistent with preservation of capital and liquidity.
PORTFOLIO MANAGERS (ALL FOUR FUNDS):
Elbridge T. Gerry III
Ryan Nugent
UBS Global Asset Management (US) Inc.
COMMENCEMENT:
Tax-Free--October 4, 1982 California Municipal--November 7, 1988 New York
Municipal--November 10, 1988 New Jersey Municipal--February 1, 1991
DIVIDEND PAYMENT (ALL FOUR FUNDS):
Monthly
1
<Page>
the fourth quarter came in at 1.1%, which is well below the current trend,
preliminary data indicate the lower growth rate was likely the result of
lackluster consumer spending during the fourth quarter, and we believe GDP
growth may pick up again in 2006.
Q. HOW DID THE FEDERAL RESERVE BOARD (THE "FED") REACT IN THIS ECONOMIC
ENVIRONMENT?
A. As expected, the Fed continued to raise interest rates in an attempt to
temper growth and ward off a potential increase in inflation. After five rate
hikes in 2004, the Fed again increased the federal funds rate eight
additional times during 2005 (four of which were during the reporting period)
and once more after the period ended. In total, the Fed's 14 rate hikes have
driven the federal funds rate from 1.00% to 4.50%. Also of note, Ben Bernanke
replaced Alan Greenspan as Chairman of the Fed at the end of his term in
February 2006. Mr. Bernanke has pledged continuity with the Greenspan era,
and we believe the market generally regards this appointment as positive
news.
Q. HOW WERE THE PORTFOLIOS POSITIONED DURING THE SEMIANNUAL PERIOD?
A. We maintained our "bulleted" yield curve positioning, emphasizing securities
with six-month maturities, while avoiding those with one-year maturities,
which we believed appeared overvalued. Generally, a more bulleted strategy
may help performance in a rising rate environment such as that of the past
six months. In particular, we targeted securities maturing around the dates
of the Fed meetings in order to maximize our ability to capture higher
yields.
From a weighted average maturity standpoint, the portfolios all held shorter
maturity positions, with weighted average maturities ranging from 17 to 29
days at the end of December for the tax-free funds. The weighted average
maturity of UBS RMA Money Market Portfolio and UBS RMA U.S. Government
Portfolio was somewhat longer, both approximately 43 days at the end of
December. The shorter maturity stance of the portfolios benefited performance
during the reporting period.
Q. WHAT TYPES OF SECURITIES DID YOU EMPHASIZE FOR THE PORTFOLIOS?
A. For all six of the portfolios, quality, liquidity and yield remained
paramount in our selection process. Within the tax-exempt portfolios, we
emphasized variable rate demand notes--notes that are repayable on demand and
whose interest rate is reset periodically, often daily. We believe there are
frequently seasonal opportunities to add to this type of holding at
attractive prices, and we took advantage of that trend during the course of
the period.
Within UBS RMA U.S. Government Portfolio, we continued to allocate a large
portion of the portfolio's holdings to US Treasury securities. We did,
however, increase our exposure to repurchase agreements over the course of
the period. Within UBS RMA Money Market Portfolio, commercial paper and
certificates of
2
<Page>
deposit continued to make up a significant portion of the portfolio. We also
reduced the Portfolio's exposure to U.S. government agency obligations over
the reporting period, transferring assets to corporate floating rate
securities, which we believed represented an attractive value.
Q. HOW DO YOU ANTICIPATE STRUCTURING THE PORTFOLIOS GOING FORWARD?
A. In general, we remain cautious regarding making any predictions as to when
the Fed will pause or end its tightening campaign, and feel interest rates
may continue to climb for some time. Yields, we believe--especially on the
long end of the curve--will likely rise at some point in the coming months,
as the current flatness of the curve is unsustainable in our opinion. On a
macroeconomic level, the economy appears to be on fairly solid footing, and
we will continue to rely on our research team to interpret developing
macroeconomic events and to identify market-specific opportunities as they
arise.
We thank you for your continued support and welcome any comments or questions
you may have. For additional information on the UBS family of funds,* please
contact your financial advisor or visit us at www.ubs.com/globalam-us.
Sincerely,
/s/ W. Douglas Beck /s/ Elbridge T. Gerry
W. Douglas Beck, CFA Elbridge T. Gerry III
PRESIDENT PORTFOLIO MANAGER
UBS RMA Money Fund Inc. (UBS RMA UBS RMA Tax-Free Fund Inc.
Money Market Portfolio and UBS RMA UBS RMA California Municipal
U.S. Government Portfolio) Money Fund
UBS RMA Tax-Free Fund Inc. UBS RMA New York Municipal
UBS Managed Municipal Trust (UBS RMA Money Fund
California Municipal Money Fund and UBS RMA New Jersey Municipal
UBS RMA New York Municipal Money Money Fund
Fund) MANAGING DIRECTOR
UBS Municipal Money Market Series (UBS UBS Global Asset Management
RMA New Jersey Municipal Money (US) Inc.
Fund)
EXECUTIVE DIRECTOR
UBS Global Asset Management (US) Inc.
* Mutual funds are sold by prospectus only. You should read it carefully and
consider a fund's investment objectives, risks, charges, expenses and other
important information contained in the prospectus before investing.
Prospectuses for most of our funds can be obtained from your financial
advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site
at www.ubs.com/globalam-us.
3
<Page>
/s/ Michael Markowitz /s/ Robert Sabatino
Michael Markowitz Robert Sabatino
PORTFOLIO MANAGER PORTFOLIO MANAGER
UBS RMA Money Market Portfolio UBS RMA Money Market Portfolio
UBS RMA U.S. Government Portfolio UBS RMA U.S. Government Portfolio
MANAGING DIRECTOR DIRECTOR
UBS Global Asset Management (US) Inc. UBS Global Asset Management (US)
Inc.
/s/ Ryan Nugent
Ryan Nugent
PORTFOLIO MANAGER
UBS RMA Tax-Free Fund Inc.
UBS RMA California Municipal Money Fund
UBS RMA New York Municipal Money Fund
UBS RMA New Jersey Municipal Money Fund
DIRECTOR
UBS Global Asset Management (US) Inc.
This letter is intended to assist shareholders in understanding how the Funds
and Portfolios performed during the six months ended December 31, 2005. The
views and opinions in the letter were current as of February 15, 2006. They are
not guarantees of performance or investment results and should not be taken as
investment advice. Investment decisions reflect a variety of factors, and we
reserve the right to change our views about individual securities, sectors and
markets at any time. As a result, the views expressed should not be relied upon
as a forecast of any Fund's or Portfolio's future investment intent. We
encourage you to consult your financial advisor regarding your personal
investment program.
4
<Page>
UNDERSTANDING YOUR FUNDS' EXPENSES (UNAUDITED)
As a shareholder of the Funds*, you incur ongoing costs, including management
fees; service fees (12b-1 or non-12b-1 fees); and other Fund expenses. These
examples are intended to help you understand your ongoing costs (in dollars) of
investing in each Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The examples below are based on an investment of $1,000 invested at the
beginning of the period and held for the entire period, July 1, 2005 to December
31, 2005.
ACTUAL EXPENSES
The first line in the table below for each Fund provides information about its
actual account values and actual expenses. You may use the information in this
line, together with the amount you invested, to estimate the expenses that you
paid over a period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line for each respective Fund under the heading entitled
"Expenses Paid During Period" to estimate the expenses you paid on your account
during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the table below for each Fund provides information about
hypothetical account values and hypothetical expenses based on that Fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not that Fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expenses you paid for the period. You may use this information to
compare the ongoing costs of investing in a Fund and other funds. To do so,
compare these 5% hypothetical examples with the 5% hypothetical examples that
appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs. Therefore, the second line in the table for each Fund is useful
in comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds, if those funds impose transactional
costs--for example, exchange fees. In addition, if those transactional costs
were included, your costs for those other funds would have been higher.
The example does not reflect Resource Management Account(R) (RMA(R)) Program or
Business Services Account BSA(R) Program fees as these are external to the Funds
and relate to those programs.
* Collectively refers to UBS RMA Money Market Portfolio, UBS RMA U.S.
Government Portfolio, UBS RMA Tax-Free Fund Inc., UBS RMA California
Municipal Money Fund, UBS RMA New York Municipal Money Fund and UBS RMA New
Jersey Municipal Money Fund.
5
<Page>
UBS RMA MONEY MARKET PORTFOLIO
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JULY 1, 2005 DECEMBER 31, 2005 07/01/05 TO 12/31/05
- ---------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,016.00 $ 3.00
Hypothetical (5% annual return
before expenses) 1,000.00 1,022.23 3.01
</Table>
* Expenses are equal to the Fund's annualized net expense ratio of 0.59%,
multiplied by the average account value over the period, multiplied by 184
divided by 365 (to reflect the one-half year period).
UBS RMA U.S. GOVERNMENT PORTFOLIO
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JULY 1, 2005 DECEMBER 31, 2005 07/01/05 TO 12/31/05
- ---------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,015.00 $ 3.10
Hypothetical (5% annual return
before expenses) 1,000.00 1,022.13 3.11
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.61%,
multiplied by the average account value over the period, multiplied by 184
divided by 365 (to reflect the one-half year period).
UBS RMA TAX-FREE FUND INC.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JULY 1, 2005 DECEMBER 31, 2005 07/01/05 TO 12/31/05
- ---------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,010.40 $ 2.99
Hypothetical (5% annual return
before expenses) 1,000.00 1,022.23 3.01
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.59%,
multiplied by the average account value over the period, multiplied by 184
divided by 365 (to reflect the one-half year period).
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JULY 1, 2005 DECEMBER 31, 2005 07/01/05 TO 12/31/05
- ---------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,009.90 $ 3.19
Hypothetical (5% annual return
before expenses) 1,000.00 1,022.03 3.21
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.63%,
multiplied by the average account value over the period, multiplied by 184
divided by 365 (to reflect the one-half year period).
6
<Page>
UBS RMA NEW YORK MUNICIPAL MONEY FUND
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JULY 1, 2005 DECEMBER 31, 2005 07/01/05 TO 12/31/05
- ---------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,009.80 $ 3.39
Hypothetical (5% annual return
before expenses) 1,000.00 1,021.83 3.41
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.67%,
multiplied by the average account value over the period, multiplied by 184
divided by 365 (to reflect the one-half year period).
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JULY 1, 2005 DECEMBER 31, 2005 07/01/05 TO 12/31/05
- ---------------------------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,009.10 $ 3.95
Hypothetical (5% annual return
before expenses) 1,000.00 1,021.27 3.97
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.78%,
multiplied by the average account value over the period, multiplied by 184
divided by 365 (to reflect the one-half year period).
7
<Page>
PERFORMANCE AND PORTFOLIO CHARACTERISTICS AT A GLANCE (UNAUDITED)
UBS RMA MONEY MARKET PORTFOLIO
<Table>
<Caption>
YIELDS AND CHARACTERISTICS 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Seven-Day Current Yield* 3.73% 2.63% 1.75%
Seven-Day Effective Yield* 3.80 2.66 1.76
Weighted Average Maturity** 43 days 42 days 46 days
Net Assets (bn) $ 10.4 $ 10.4 $ 11.2
<Caption>
PORTFOLIO COMPOSITION*** 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Commercial Paper 53.7% 53.1% 41.6%
Certificates of Deposit 20.1 20.2 25.2
Short-Term Corporate Obligations 17.6 14.0 12.3
U.S. Government Agency Obligations 7.2 10.1 21.3
Bank Notes 1.0 1.0 --
Money Market Funds 0.3 0.5 0.2
Repurchase Agreements 0.0+ 1.0 --
Time Deposit -- -- 0.3
Other Assets Less Liabilities 0.1 0.1 (0.9)
- -----------------------------------------------------------------------------------------------------------
TOTAL 100.0% 100.0% 100.0%
- -----------------------------------------------------------------------------------------------------------
</Table>
UBS RMA U.S. GOVERNMENT PORTFOLIO
<Table>
<Caption>
YIELDS AND CHARACTERISTICS 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Seven-Day Current Yield* 3.33% 2.46% 1.40%
Seven-Day Effective Yield* 3.38 2.49 1.41
Weighted Average Maturity** 43 days 38 days 45 days
Net Assets (bn) $ 1.1 $ 1.1 $ 1.2
<Caption>
PORTFOLIO COMPOSITION*** 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Repurchase Agreements 64.0% 53.1% 66.4%
U.S. Government Obligations 34.0 50.0 51.5
Money Market Funds 0.5 0.6 1.2
Other Assets Less Liabilities 1.5 (3.7) (19.1)
- -----------------------------------------------------------------------------------------------------------
TOTAL 100.0% 100.0% 100.0%
- -----------------------------------------------------------------------------------------------------------
</Table>
UBS RMA TAX-FREE FUND INC
<Table>
<Caption>
YIELDS AND CHARACTERISTICS 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Seven-Day Current Yield* 2.78% 1.88% 1.28%
Seven-Day Effective Yield* 2.82 1.90 1.29
Weighted Average Maturity** 19 days 11 days 17 days
Net Assets (bn) $ 3.4 $ 3.4 $ 3.1
<Caption>
PORTFOLIO COMPOSITION*** 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Municipal Bonds and Notes 95.0% 92.2% 94.8%
Tax-Exempt Commercial Paper 7.6 8.2 10.5
Money Market Fund 0.0+ -- --
Other Assets Less Liabilities (2.6) (0.4) (5.3)
- -----------------------------------------------------------------------------------------------------------
TOTAL 100.0% 100.0% 100.0%
- -----------------------------------------------------------------------------------------------------------
</Table>
* YIELDS WILL FLUCTUATE AND MAY REFLECT FEE WAIVERS AND/OR EXPENSE
REIMBURSEMENTS. PAST PERFORMANCE DOES NOT PREDICT FUTURE PERFORMANCE, AND
THE PERFORMANCE INFORMATION PROVIDED DOES NOT REFLECT THE DEDUCTION OF
TAXES THAT A SHAREHOLDER MIGHT PAY ON DISTRIBUTIONS. THE RETURN OF AN
INVESTMENT WILL FLUCTUATE. PERFORMANCE RESULTS ASSUME REINVESTMENT OF ALL
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS (IF ANY) AT NET ASSET VALUE ON THE
PAYABLE DATES. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE
PERFORMANCE DATA QUOTED.
** The Funds and Portfolios are actively managed and their weighted average
maturities will differ over time.
*** Weightings represent percentages of net assets as of the dates indicated.
The Funds and Portfolios are actively managed and their compositions will
vary over time.
+ Weighting represents less than 0.05% of net assets as of the date
indicated.
AN INVESTMENT IN AN RMA FUND IS NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH EACH
RMA FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE,
IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN AN RMA FUND.
8
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
<Table>
<Caption>
YIELDS AND CHARACTERISTICS 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Seven-Day Current Yield* 2.67% 1.71% 1.24%
Seven-Day Effective Yield* 2.70 1.73 1.25
Weighted Average Maturity** 18 days 20 days 18 days
Net Assets (mm) $ 934.1 $ 808.8 $ 816.6
<Caption>
PORTFOLIO COMPOSITION*** 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Municipal Bonds and Notes 89.3% 92.3% 94.8%
Tax-Exempt Commercial Paper 10.4 10.1 7.4
Money Market Fund -- 0.3 --
Other Assets Less Liabilities 0.3 (2.7) (2.2)
- -----------------------------------------------------------------------------------------------------------
TOTAL 100.0% 100.0% 100.0%
- -----------------------------------------------------------------------------------------------------------
</Table>
UBS RMA NEW YORK MUNICIPAL MONEY FUND
<Table>
<Caption>
YIELDS AND CHARACTERISTICS 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Seven-Day Current Yield* 2.70% 1.76% 1.15%
Seven-Day Effective Yield* 2.73 1.77 1.16
Weighted Average Maturity** 17 days 7 days 24 days
Net Assets (mm) $ 626.2 $ 596.1 $ 557.8
<Caption>
PORTFOLIO COMPOSITION*** 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Municipal Bonds and Notes 94.0% 93.5% 90.8%
Tax-Exempt Commercial Paper 7.6 6.2 13.3
Other Assets Less Liabilities (1.6) 0.3 (4.1)
- -----------------------------------------------------------------------------------------------------------
TOTAL 100.0% 100.0% 100.0%
- -----------------------------------------------------------------------------------------------------------
</Table>
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
<Table>
<Caption>
YIELDS AND CHARACTERISTICS 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Seven-Day Current Yield* 2.52% 1.64% 1.11%
Seven-Day Effective Yield* 2.55 1.65 1.12
Weighted Average Maturity** 29 days 10 days 18 days
Net Assets (mm) $ 151.9 $ 134.2 $ 135.2
<Caption>
PORTFOLIO COMPOSITION*** 12/31/05 6/30/05 12/31/04
- -----------------------------------------------------------------------------------------------------------
Municipal Bonds and Notes 97.5% 94.6% 94.8%
Money Market Fund 1.7 -- --
Tax-Exempt Commercial Paper -- 5.2 4.9
Other Assets Less Liabilities 0.8 0.2 0.3
- -----------------------------------------------------------------------------------------------------------
TOTAL 100.0% 100.0% 100.0%
- -----------------------------------------------------------------------------------------------------------
</Table>
* YIELDS WILL FLUCTUATE AND MAY REFLECT FEE WAIVERS AND/OR EXPENSE
REIMBURSEMENTS. PAST PERFORMANCE DOES NOT PREDICT FUTURE PERFORMANCE, AND
THE PERFORMANCE INFORMATION PROVIDED DOES NOT REFLECT THE DEDUCTION OF
TAXES THAT A SHAREHOLDER MIGHT PAY ON DISTRIBUTIONS. THE RETURN OF AN
INVESTMENT WILL FLUCTUATE. PERFORMANCE RESULTS ASSUME REINVESTMENT OF ALL
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS (IF ANY) AT NET ASSET VALUE ON THE
PAYABLE DATES. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE
PERFORMANCE DATA QUOTED.
** The Funds are actively managed and their weighted average maturities will
differ over time.
*** Weightings represent percentages of net assets as of the dates indicated.
The Funds are actively managed and their compositions will vary over time.
AN INVESTMENT IN AN RMA FUND IS NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH EACH
RMA FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE,
IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN AN RMA FUND.
9
<Page>
UBS RMA MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS -- DECEMBER 31, 2005 (UNAUDITED)
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--7.23%
$ 415,000 Federal Home Loan Bank 01/21/06 to 4.195 to
03/13/06 4.360%* $ 414,945,735
142,705 Federal Home Loan Bank 03/06/06 to 3.625 to
06/08/06 5.125 142,864,782
112,596 Federal Home Loan Mortgage Corp. 02/01/06 to 4.205 to
02/02/06 4.210@ 112,182,109
84,075 Federal Home Loan Mortgage Corp. 10/23/06 4.250 84,075,000
- --------------------------------------------------------------------------------------------------------------------
Total U.S. Government Agency Obligations (cost--$754,067,626) 754,067,626
- --------------------------------------------------------------------------------------------------------------------
BANK NOTE--0.96%
BANKING-NON-U.S.--0.96%
100,000 Royal Bank of Scotland PLC
(cost--$100,045,407) 02/24/06 4.400* 100,045,407
CERTIFICATES OF DEPOSIT--20.13%
NON-U.S.--11.22%
190,000 Barclays Bank PLC 01/05/06 to 4.030 to
01/06/06 4.055 190,000,062
210,500 BNP Paribas 02/13/06 to 3.965 to
05/23/06 4.520 210,500,000
160,000 Calyon N.A., Inc. 01/20/06 4.110 160,000,000
100,000 Deutsche Bank AG 08/03/06 4.170 100,000,000
95,000 Fortis Bank NV-SA 07/07/06 3.930 95,000,000
124,500 HBOS Treasury Services PLC 02/06/06 to 4.225 to
03/21/06 4.370 124,500,000
38,250 Natexis Banque Populaires 03/29/06 4.405 38,250,000
75,000 Royal Bank of Canada 09/15/06 4.715 75,000,000
27,000 Societe Generale 11/17/06 4.700 27,000,000
100,000 Svenska Handelsbanken 11/08/06 4.750 100,000,000
50,000 UniCredito Italiano SpA 03/13/06 3.915 50,000,000
- --------------------------------------------------------------------------------------------------------------------
1,170,250,062
- --------------------------------------------------------------------------------------------------------------------
U.S.--8.91%
256,000 American Express, Federal 01/10/06 to 4.290 to
Savings Bank 01/19/06 4.310 256,000,000
134,500 Citibank N.A. 01/05/06 to 4.035 to
03/06/06 4.405 134,500,000
260,000 First Tennessee Bank N.A. (Memphis) 01/30/06 to 4.310 to
03/27/06 4.450 260,000,000
</Table>
10
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT--(CONCLUDED)
U.S.--(CONCLUDED)
$ 279,000 Wells Fargo Bank N.A. 01/06/06 to 4.260 to
01/18/06 4.320% $ 279,000,000
929,500,000
- --------------------------------------------------------------------------------------------------------------------
Total Certificates of Deposit (cost--$2,099,750,062) 2,099,750,062
- --------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER@--53.71%
ASSET BACKED-BANKING--1.66%
174,697 Atlantis One Funding 02/07/06 to 4.140 to
04/04/06 4.200 173,335,039
ASSET BACKED-MISCELLANEOUS--23.10%
252,000 Amsterdam Funding Corp. 01/12/06 to
01/20/06 4.300 251,547,067
154,017 Barton Capital Corp. 01/03/06 to 4.070 to
01/10/06 4.200 153,938,704
257,917 Bryant Park Funding LLC 01/09/06 to 4.280 to
01/25/06 4.340 257,462,707
102,145 Chariot Funding LLC 01/11/06 to 4.290 to
01/19/06 4.300 101,947,430
259,116 Falcon Asset Securitization Corp. 01/23/06 to 4.310 to
01/26/06 4.315 258,382,829
150,000 Kitty Hawk Funding Corp. 01/17/06 4.300 149,713,333
120,023 Old Line Funding Corp. 01/03/06 to 4.200 to
02/06/06 4.320 119,865,443
186,883 Preferred Receivables Funding Corp. 01/09/06 to 4.290 to
01/23/06 4.330 186,504,543
205,127 Ranger Funding Co. LLC 01/20/06 to 4.290 to
02/01/06 4.350 204,551,158
225,750 Sheffield Receivables Corp. 01/04/06 to 4.290 to
01/31/06 4.340 225,364,826
47,229 Thunderbay Funding 01/10/06 4.060 47,181,062
218,500 Variable Funding Capital Corp. 01/20/06 4.260 to
4.310 218,006,364
235,600 Windmill Funding Corp. 01/10/06 to 4.250 to
01/18/06 4.300 235,160,950
- --------------------------------------------------------------------------------------------------------------------
2,409,626,416
- --------------------------------------------------------------------------------------------------------------------
ASSET BACKED-SECURITIES--9.19%
36,000 Beta Finance, Inc. 02/07/06 4.320 35,840,160
40,160 Cancara Asset Securitization LLC 01/18/06 4.300 40,078,453
</Table>
11
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER@--(CONTINUED)
ASSET BACKED-SECURITIES--(CONCLUDED)
$ 50,000 CC (USA), Inc. (Centauri) 01/17/06 4.070% $ 49,909,556
157,000 Galaxy Funding, Inc. 03/27/06 to 4.140 to
04/03/06 4.420 155,351,171
255,247 Grampian Funding LLC 03/08/06 to 4.365 to
04/21/06 4.400 252,600,355
224,153 Scaldis Capital LLC 01/19/06 to 4.300 to
01/25/06 4.330 223,613,498
202,434 Solitaire Funding LLC 01/23/06 to 4.300 to
03/08/06 4.370 201,386,285
- --------------------------------------------------------------------------------------------------------------------
958,779,478
- --------------------------------------------------------------------------------------------------------------------
AUTOMOBILE OEM--0.24%
25,000 BMW U.S. Capital LLC 01/03/06 4.180 24,994,194
BANKING-NON-U.S.--5.92%
156,050 Alliance & Leicester PLC 01/05/06 to 4.000 to
04/07/06 4.350 155,222,579
243,607 Depfa Bank PLC 01/13/06 to 4.065 to
02/07/06 4.190 242,967,568
124,200 DNB NOR ASA 01/03/06 4.320 to
4.330 124,170,165
95,000 Nationwide Building Society 01/04/06 4.310 94,965,879
- --------------------------------------------------------------------------------------------------------------------
617,326,191
- --------------------------------------------------------------------------------------------------------------------
BANKING-U.S.--7.95%
146,000 Abbey National N.A. LLC 01/03/06 4.290 to
4.320 145,965,120
45,000 CBA (Delaware) Finance, Inc. 01/09/06 4.030 44,959,700
115,500 Danske Corp. 03/27/06 4.050 to
4.100 114,390,467
188,100 Deutsche Bank Financial LLC 01/04/06 to 4.330 to
01/10/06 4.400 187,971,258
95,000 Dexia Delaware LLC 03/10/06 4.380 94,214,033
243,100 Nordea N.A., Inc. 02/09/06 to 4.090 to
04/03/06 4.245 241,499,803
- --------------------------------------------------------------------------------------------------------------------
829,000,381
- --------------------------------------------------------------------------------------------------------------------
BROKERAGE--4.37%
256,500 Bear Stearns Cos., Inc. 01/17/06 to 4.200 to
03/13/06 4.390 255,392,505
156,000 Goldman Sachs Group, Inc. 02/03/06 4.280 155,387,960
</Table>
12
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER@--(CONCLUDED)
BROKERAGE--(CONCLUDED)
$ 45,000 Morgan Stanley 01/03/06 4.430% $ 44,988,925
- --------------------------------------------------------------------------------------------------------------------
455,769,390
- --------------------------------------------------------------------------------------------------------------------
FINANCE-NONCAPTIVE DIVERSIFIED--1.28%
49,450 CIT Group, Inc. 01/23/06 4.170 49,323,985
85,000 General Electric Capital Corp. 03/14/06 3.870 84,342,100
133,666,085
- --------------------------------------------------------------------------------------------------------------------
Total Commercial Paper (cost--$5,602,497,174) 5,602,497,174
- --------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE OBLIGATIONS--17.56%
ASSET BACKED-SECURITIES--4.62%
106,000 Dorada Finance, Inc.** 03/10/06 3.500 105,999,013
229,250 K2 (USA) LLC** 01/03/06 to 4.291 to
01/20/06 4.325* 229,242,871
147,000 Links Finance LLC** 01/03/06 to 4.095 to
01/17/06 4.320* 146,992,744
- --------------------------------------------------------------------------------------------------------------------
482,234,628
- --------------------------------------------------------------------------------------------------------------------
AUTOMOTIVE OEM--0.58%
60,650 American Honda Finance Corp.** 02/22/06 to 4.413 to
03/21/06 4.530* 60,675,768
BANKING-NON-U.S.--2.62%
100,000 ANZ National International Ltd.** 01/09/06 4.311* 100,000,000
173,000 HBOS Treasury Services PLC** 01/03/06 4.311* 173,000,000
- --------------------------------------------------------------------------------------------------------------------
273,000,000
- --------------------------------------------------------------------------------------------------------------------
BANKING-U.S.--1.88%
196,000 Bank of America N.A. 01/31/06 4.310* 196,000,000
BROKERAGE--3.52%
52,250 Citigroup Global Markets
Holdings, Inc. 03/06/06 4.587* 52,289,552
100,000 Goldman Sachs Group, Inc. 01/03/06 4.315* 100,000,000
215,000 Morgan Stanley 01/03/06 4.280 to
4.320* 215,000,000
- --------------------------------------------------------------------------------------------------------------------
367,289,552
- --------------------------------------------------------------------------------------------------------------------
FINANCE-CAPTIVE AUTOMOTIVE--1.89%
197,100 Toyota Motor Credit Corp. 01/03/06 to 4.261 to
01/09/06 4.300* 197,095,047
</Table>
13
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE OBLIGATIONS--(CONCLUDED)
FINANCE-NONCAPTIVE CONSUMER--2.06%
$ 215,000 HSBC Finance Corp. 01/03/06 to 4.355 to
03/22/06 4.551%* $ 215,117,972
FINANCE-NONCAPTIVE DIVERSIFIED--0.39%
40,000 General Electric Capital Corp. 01/09/06 4.440* 40,000,000
- --------------------------------------------------------------------------------------------------------------------
Total Short-Term Corporate Obligations (cost--$1,831,412,967) 1,831,412,967
- --------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT--0.00%
265 Repurchase Agreement dated
12/30/05 with State Street
Bank & Trust Co., collateralized
by $92,737 U.S. Treasury Bonds,
7.875% to 8.125% due
08/15/19 to 02/15/21 and
$143,269 U.S. Treasury Notes,
2.375% due 08/31/06;
(value--$270,438);
proceeds; $265,093
(cost--$265,000) 01/03/06 3.150 265,000
<Caption>
NUMBER OF
SHARES
(000)
- ----------
MONEY MARKET FUND+--0.29%
30,332 BlackRock Provident Institutional
TempFund (cost--$30,332,298) 4.160 30,332,298
- --------------------------------------------------------------------------------------------------------------------
Total Investments (cost--$10,418,370,534
which approximates cost for federal income
tax purposes)--99.88% 10,418,370,534
Other assets in excess of liabilities--0.12% 12,057,744
- --------------------------------------------------------------------------------------------------------------------
Net Assets (applicable to 10,431,667,872 shares
of common stock outstanding equivalent to
$1.00 per share)--100.00% $ 10,430,428,278
- --------------------------------------------------------------------------------------------------------------------
</Table>
* Variable rate securities--maturity dates reflect earlier of reset dates or
stated maturity dates. The interest rates shown are the current rates as of
December 31, 2005, and reset periodically.
** Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities, which represent 7.82% of net assets as of December
31, 2005, are considered liquid and may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
@ Interest rates shown are the discount rates at date of purchase.
+ Interest rate shown reflects yield at December 31, 2005.
OEM Original Equipment Manufacturer
14
<Page>
ISSUER BREAKDOWN BY COUNTRY
<Table>
<Caption>
PERCENTAGE OF PORTFOLIO ASSETS
- ---------------------------------------------------------------
United States 79.3%
United Kingdom 8.0
France 4.2
Ireland 2.3
Norway 1.2
Germany 1.0
New Zealand 1.0
Sweden 1.0
Belgium 0.9
Canada 0.7
Italy 0.4
- ---------------------------------------------------------------
Total 100.0%
- ---------------------------------------------------------------
</Table>
Weighted average maturity -- 43 days
See accompanying notes to financial statements
15
<Page>
UBS RMA U.S. GOVERNMENT PORTFOLIO
STATEMENT OF NET ASSETS -- DECEMBER 31, 2005 (UNAUDITED)
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -----------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--33.98%
$ 50,000 U.S. Treasury Bills 01/17/06 4.100%@ $ 49,920,278
85,000 U.S. Treasury Bills (1) 03/23/06 to 3.905 to
04/13/06 3.950@ 84,168,979
225,150 U.S. Treasury Notes (1) 01/31/06 to 1.500 to
07/31/06 2.750 223,529,254
- -----------------------------------------------------------------------------------------------------------
Total U.S. Government Obligations (cost--$357,618,511) 357,618,511
- -----------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--64.02%
130,000 Repurchase Agreement dated 12/30/05 with Bank of
America, collateralized by $111,943,000 U.S.
Treasury Bills, zero coupon due 04/27/06 and
$22,388,000 U.S. Treasury Notes, 2.625% to
3.875% due 11/15/06 to 05/15/09;
(value--$132,600,433); proceeds: $130,047,667 01/03/06 3.300 130,000,000
85,000 Repurchase Agreement dated 12/30/05 with Bear
Stearns & Co., collateralized by $69,001,000
U.S. Treasury Bonds, 5.250% to 9.250% due
02/15/16 to 02/15/29; (value--$87,811,226);
proceeds: $85,028,333 01/03/06 3.000 85,000,000
33,300 Repurchase Agreement dated 12/30/05 with Deutsche
Bank Securities, Inc., collateralized by
$3,825,000 U.S. Treasury Bills, zero coupon due
02/09/06, $7,126,000 U.S. Treasury Notes, 3.625%
due 04/30/07 and $41,311,000 U.S. Treasury
Stripped Interest Payment Bonds, zero coupon due
08/15/17 to 11/15/28; (value--$33,966,319);
proceeds: $33,312,395 01/03/06 3.350 33,300,000
</Table>
16
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -----------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--(CONCLUDED)
$ 100,000 Repurchase Agreement dated 12/30/05 with Goldman
Sachs Group, Inc., collateralized by
$102,181,000 U.S. Treasury Notes, 4.000% due
03/15/10; (value--$102,000,416); proceeds:
$100,036,111 01/03/06 3.250% $ 100,000,000
150,000 Repurchase Agreement dated 12/30/05 with Merrill
Lynch & Co., collateralized by $154,245,000 U.S.
Treasury Bills, zero coupon due 03/16/06;
(value--$153,000,244); proceeds: $150,055,833 01/03/06 3.350 150,000,000
175,000 Repurchase Agreement dated 12/30/05 with Morgan
Stanley, collateralized by $128,326,000 U.S.
Treasury Bonds, 8.000% due 11/15/21;
(value--$178,500,792); proceeds: $175,066,111 01/03/06 3.400 175,000,000
370 Repurchase Agreement dated 12/30/05 with State
Street Bank & Trust Co., collateralized by
$129,481 U.S. Treasury Bonds, 7.875% to 8.125%
due 08/15/19 to 02/15/21 and $200,036 U.S.
Treasury Notes, 2.375% due 08/31/06;
(value--$377,592); proceeds: $370,130 01/03/06 3.150 370,000
- -----------------------------------------------------------------------------------------------------------
Total Repurchase Agreements (cost--$673,670,000) 673,670,000
- -----------------------------------------------------------------------------------------------------------
<Caption>
NUMBER OF
SHARES
(000)
- ---------
MONEY MARKET FUNDS+--0.52%
5,451 AIM Treasury Portfolio 3.547 5,451,126
++ 0 Federated Treasury Obligation Fund 3.372 97
++ 0 Provident Treasury Trust 3.599 78
- -----------------------------------------------------------------------------------------------------------
Total Money Market Funds (cost--$5,451,301) 5,451,301
- -----------------------------------------------------------------------------------------------------------
</Table>
17
<Page>
<Table>
<Caption>
VALUE
- ----------------------------------------------------------------------------------
Total Investments (cost--$1,036,739,812 which approximates cost
for federal income tax purposes) (2)--98.52% $ 1,036,739,812
Other assets in excess of liabilities--1.48% 15,592,856
- ----------------------------------------------------------------------------------
Net Assets (applicable to 1,052,881,400 shares of common stock
outstanding equivalent to $1.00 per share)--100.00% $ 1,052,332,668
- ----------------------------------------------------------------------------------
</Table>
@ Interest rates shown are the discount rates at date of purchase.
+ Interest rates shown reflect yield at December 31, 2005.
++ Amount represents less than 500 shares.
(1) Security, or portion thereof, was on loan at December 31, 2005.
(2) Includes $291,703,431 of investments in securities on loan, at market
value.
Weighted average maturity -- 43 days
See accompanying notes to financial statements
18
<Page>
UBS RMA TAX-FREE FUND INC.
STATEMENT OF NET ASSETS -- DECEMBER 31, 2005 (UNAUDITED)
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--95.04%
ALABAMA--2.83%
$ 25,000 Alabama Special Care Facilities Financing Authority of
Mobile (Ascension Health Credit Group), Series B A 3.500% $ 25,000,000
12,375 Birmingham Refunding, Series A A 3.560 12,375,000
10,900 Jefferson County Limited Obligation School Warrants,
Series B A 3.550 10,900,000
11,265 Mobile Industrial Development Board, Dock and Wharf
Revenue Refunding (Holnam, Inc. Project), Series A A 3.480 11,265,000
8,700 Mobile Industrial Development Board, Dock and Wharf
Revenue Refunding (Holnam, Inc. Project), Series B A 3.500 8,700,000
12,700 Port City Medical Clinic Board Revenue
(Infirmary Health Systems), Series A A 3.480 12,700,000
14,875 University of Alabama Revenue
(University Hospital), Series C A 3.450 14,875,000
- ---------------------------------------------------------------------------------------------------------------------
95,815,000
- ---------------------------------------------------------------------------------------------------------------------
ALASKA--0.85%
28,870 Alaska Housing Finance Corp., Series A A 3.550 28,870,000
- ---------------------------------------------------------------------------------------------------------------------
ARIZONA--1.85%
8,000 Apache County Industrial Development Authority
(Tucson Electric Power Co.--Springerville Project) A 3.560 8,000,000
11,200 Apache County Industrial Development Authority
(Tucson Electric Power Co.--Springerville
Project), Series B A 3.550 11,200,000
35,000 Apache County Industrial Development Authority
(Tucson Electric Power Co.--Springerville
Project), Series C A 3.560 35,000,000
8,200 Pima County Industrial Development Authority
(Tucson Electric Power Co.--Irvington
Project), Series A A 3.550 8,200,000
- ---------------------------------------------------------------------------------------------------------------------
62,400,000
- ---------------------------------------------------------------------------------------------------------------------
</Table>
19
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
CALIFORNIA--0.76%
$ 9,700 California Department of Water Resources, Power
Supply Revenue Refunding, Subseries F-3 A 3.200% $ 9,700,000
16,000 California Department of Water Resources, Power
Supply Revenue Refunding, Subseries G-14 A 3.170 16,000,000
- ---------------------------------------------------------------------------------------------------------------------
25,700,000
- ---------------------------------------------------------------------------------------------------------------------
COLORADO--3.86%
5,500 Colorado Educational and Cultural Facilities Authority
Revenue Refunding (National Jewish Federation Board
Program), Series A-1 A 3.700 5,500,000
9,600 Colorado Educational and Cultural Facilities Authority
Revenue Refunding (National Jewish Federation Board
Program), Series A-8 A 3.700 9,600,000
11,300 Colorado Educational and Cultural Facilities Authority
Revenue Refunding (National Jewish Federation Board
Program), Series B-1 A 3.700 11,300,000
10,260 Colorado Educational and Cultural Facilities Authority
Revenue Refunding (National Jewish Federation Board
Program), Series B-2 A 3.700 10,260,000
26,200 Colorado Educational and Cultural Facilities Authority
Revenue Refunding (National Jewish Federation Board
Program), Series C-1 A 3.700 26,200,000
24,995 Denver City & County Certificates of Participation
Refunding (Wellington E Web Project), Series C-1 A 3.550 24,995,000
8,260 East 470 Public Highway Authority Revenue Refunding,
Vehicle Registration Fee A 3.550 8,260,000
4,700 Moffat County Pollution Control Revenue Refunding
(Pacificorp Projects) A 3.750 4,700,000
29,560 University of Colorado Hospital Authority
Revenue, Series A A 3.480 29,560,000
- ---------------------------------------------------------------------------------------------------------------------
130,375,000
- ---------------------------------------------------------------------------------------------------------------------
</Table>
20
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
DELAWARE--1.20%
$ 25,000 Delaware Economic Development Authority Revenue
(Hospital Billing and Collections), Series C A 3.520% $ 25,000,000
15,455 University of Delaware Revenue, Series A A 3.500 15,455,000
- ---------------------------------------------------------------------------------------------------------------------
40,455,000
- ---------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA--2.31%
13,065 District of Columbia (Multi-Modal), Series A A 3.550 13,065,000
5,620 District of Columbia Refunding, Series D A 3.550 5,620,000
25,000 District of Columbia Revenue
(George Washington University), Series B A 3.580 25,000,000
9,000 District of Columbia Revenue
(Hillel: The Foundation for Jewish Campus Life) A 3.550 9,000,000
16,430 District of Columbia Revenue
(Pooled Loan Program), Series A A 3.550 16,430,000
9,100 District of Columbia, Series D-1 A 3.480 9,100,000
- ---------------------------------------------------------------------------------------------------------------------
78,215,000
- ---------------------------------------------------------------------------------------------------------------------
FLORIDA--3.92%
33,595 Dade County Water & Sewer System Revenue A 3.380 33,595,000
5,000 Gainesville Utilities System Revenue
Refunding, Series C A 3.700 5,000,000
10,655 Jacksonville Health Facilities Authority,
Hospital Revenue, Series A A 3.750 10,655,000
12,275 Lakeland Educational Facilities Revenue
(Florida Southern College of Lakeland Project) A 3.540 12,275,000
12,900 Nassau County Pollution Control Revenue
(ITT Rayonier, Inc. Project) A 3.540 12,900,000
5,700 Palm Beach County Housing Finance Authority, Housing
Revenue Refunding (Cotton Bay Apartments
Project), Series D A 3.400 5,700,000
</Table>
21
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
FLORIDA--(CONCLUDED)
$ 6,400 Palm Beach County Housing Finance Authority, Housing
Revenue Refunding (Mahogony Bay Apartments Project),
Series C A 3.400% $ 6,400,000
45,965 Sunshine State Governmental
Financing Commission Revenue 3.450 to
A 3.550 45,965,000
- ---------------------------------------------------------------------------------------------------------------------
132,490,000
- ---------------------------------------------------------------------------------------------------------------------
GEORGIA--2.30%
36,770 Burke County Development Authority, Pollution Control 3.540 to
Revenue (Oglethorpe Power Corp.), Series A A 3.580 36,770,000
15,000 Fulton County Development Authority
Revenue (Boys & Girls Club of America)
A 3.550 15,000,000
16,000 Municipal Electric Authority of Georgia
(General Resolution Projects),
Subordinated, Series C A 3.500 16,000,000
10,000 Municipal Electric Authority of Georgia
(Project One), Subordinated, Series D A 3.500 10,000,000
- ---------------------------------------------------------------------------------------------------------------------
77,770,000
- ---------------------------------------------------------------------------------------------------------------------
ILLINOIS--9.57%
22,745 Chicago (Neighborhoods Alive
21 Program), Series B A 3.550 22,745,000
53,050 Chicago O'Hare International Airport
Revenue, Second Lien Series C A 3.550 53,050,000
10,000 Chicago Refunding Project, Series D A 3.510 10,000,000
15,335 Chicago Sales Tax Revenue Refunding A 3.580 15,335,000
16,020 Illinois Development Finance Authority,
Multi-Family Housing Revenue Refunding
(Orleans-Illinois Project) A 3.580 16,020,000
11,400 Illinois Development Finance Authority
Revenue (Chicago Symphony Orchestra) A 3.540 11,400,000
14,100 Illinois Development Finance Authority
Revenue (Francis W. Parker School Project) A 3.530 14,100,000
7,800 Illinois Development Finance Authority
Revenue Refunding (Evanston Northwestern), Series A A 3.570 7,800,000
</Table>
22
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
ILLINOIS--(CONCLUDED)
$ 24,000 Illinois Development Finance Authority
Revenue (St. Vincent De Paul Project), Series A A 3.480% $ 24,000,000
10,000 Illinois Educational Facilities Authority
Revenue (ACI/Cultural Pooled Financing) A 3.520 10,000,000
26,640 Illinois Health Facilities Authority
Revenue Refunding (Advocate Health Care), Series B A 3.520 26,640,000
8,000 Illinois Health Facilities Authority Revenue,
Revolving Fund (Pooled Loan), Series C A 3.580 8,000,000
50,900 Illinois Toll & Highway Authority
Priority Refunding, Series B A 3.480 50,900,000
20,000 Metropolitan Water Reclamation District of Greater
Chicago, Capital Improvement, Series E A 3.530 20,000,000
7,000 Metropolitan Water Reclamation District of Greater
Chicago Refunding, Series A A 3.500 7,000,000
26,500 Metropolitan Water Reclamation District of Greater
Chicago Refunding, Series B A 3.500 26,500,000
- ---------------------------------------------------------------------------------------------------------------------
323,490,000
- ---------------------------------------------------------------------------------------------------------------------
INDIANA--4.2
8,200 Indiana Educational Facilities Authority
Revenue (University of Notre Dame du Lac) A 3.500 8,200,000
10,000 Indiana Finance Authority, Environmental
Improvement Revenue Refunding (Ispat Inland, Inc.) A 3.550 10,000,000
13,315 Indiana Health Facility Financing Authority, Hospital
Revenue (Aces Rehabilitation Hospital) A 3.500 13,315,000
11,000 Indiana Health Facility Financing Authority Revenue
(Ascension Health Credit Group), Series A-3 A 3.350 11,000,000
82,600 Indiana Health Facility Financing Authority Revenue
(Ascension Health Credit Group), Series B A 3.530 82,600,000
</Table>
23
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
INDIANA--(CONCLUDED)
$ 9,640 Indianapolis Local Public Improvement
Bond Bank Refunding, Series F-2 A 3.480% $ 9,640,000
10,000 Indianapolis Local Public Improvement Bond Bank
Refunding (Waterworks Project), Series G-1 A 3.520 10,000,000
- ---------------------------------------------------------------------------------------------------------------------
144,755,000
- ---------------------------------------------------------------------------------------------------------------------
IOWA--1.13%
10,000 Iowa Finance Authority, Health Care Facilities Revenue
Refunding (Iowa Health System), Series B-3 A 3.550 10,000,000
10,000 Iowa Finance Authority Revenue Refunding (Wheaton
Franciscan), Series B A 3.480 10,000,000
18,100 Iowa Higher Education Loan Authority Revenue (Aces
Education Loan Private College) A 3.620 18,100,000
- ---------------------------------------------------------------------------------------------------------------------
38,100,000
- ---------------------------------------------------------------------------------------------------------------------
KENTUCKY--1.30%
22,700 Kenton County Airport Board, Special Facilities Revenue
Refunding, Series B A 3.570 22,700,000
13,675 Louisville & Jefferson County Visitors & Convention
Community Refunding (Kentucky International
Convention), Series B A 3.580 13,675,000
7,475 Shelby County Lease Revenue, Series A A 3.700 7,475,000
- ---------------------------------------------------------------------------------------------------------------------
43,850,000
- ---------------------------------------------------------------------------------------------------------------------
LOUISIANA--0.86%
13,105 Louisiana Public Facilities Authority Revenue
(College and University Equipment and Capital),
Series A A 3.550 13,105,000
16,100 South Louisiana Port Commission Marine Terminal
Facilities Revenue Refunding (Occidental Petroleum) A 3.550 16,100,000
- ---------------------------------------------------------------------------------------------------------------------
29,205,000
- ---------------------------------------------------------------------------------------------------------------------
MARYLAND--3.52%
13,770 Baltimore County Revenue (Oak Crest Village, Inc.
Project), Series A A 3.520 13,770,000
</Table>
24
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
MARYLAND--(CONCLUDED)
$ 18,475 Baltimore Industrial Development
Authority Revenue (Baltimore
Capital Acquisition) A 3.550% $ 18,475,000
28,900 Maryland Health & Higher Educational
Facilities Authority Revenue
(Pooled Loan Program), Series A A 3.550 28,900,000
43,575 Maryland Health & Higher Educational
Facilities Authority Revenue
(Pooled Loan Program), Series B A 3.500 43,575,000
14,092 Maryland Health & Higher Educational
Facilities Authority Revenue
(Pooled Loan Program), Series D A 3.520 14,092,000
- --------------------------------------------------------------------------------------------------------------------
118,812,000
- --------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS--9.52%
11,000 Massachusetts Development Finance
Agency Revenue (Draper Laboratory
Issue) A 3.520 11,000,000
8,500 Massachusetts Health & Educational
Facilities Authority Revenue (Capital
Asset Program), Series E A 3.750 8,500,000
21,510 Massachusetts Health & Educational
Facilities Authority Revenue (Partners
Healthcare System), Series P-1 A 3.540 21,510,000
14,650 Massachusetts Health & Educational
Facilities Authority Revenue (Partners
Healthcare System), Series P-2 A 3.550 14,650,000
109,530 Massachusetts State Refunding, Series A A 3.500 109,530,000
24,850 Massachusetts Water Resources
Authority Refunding (General
Multi-Modal), Subordinated Series B A 3.540 24,850,000
43,800 Massachusetts Water Resources
Authority Refunding (General
Multi-Modal), Subordinated Series C A 3.540 43,800,000
25,000 Massachusetts Water Resources
Authority Refunding (General
Multi-Modal), Subordinated Series D A 3.540 25,000,000
25,000 Massachusetts Water Resources
Authority, Series A A 3.480 25,000,000
</Table>
25
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
MASSACHUSETTS--(CONCLUDED)
$ 37,800 Route 3 North Transportation
Improvements Association,
Lease Revenue (Demand Obligation
Bond), Series B
A 3.490% $ 37,800,000
- --------------------------------------------------------------------------------------------------------------------
321,640,000
- --------------------------------------------------------------------------------------------------------------------
MICHIGAN--0.98%
10,000 Michigan Building Authority Revenue
(Multi-Modal Facilities Program),
Series IIA A 3.330 10,000,000
16,800 Michigan Housing Development
Authority, Single Family Mortgage
Revenue Refunding, Series A A 3.550 16,800,000
6,315 University of Michigan Revenue
(University Hospital), Series A A 3.750 6,315,000
- --------------------------------------------------------------------------------------------------------------------
33,115,000
- --------------------------------------------------------------------------------------------------------------------
MISSISSIPPI--0.02%
650 Harrison County Pollution Control
Revenue Refunding
(E.I. Du Pont De Nemours) A 3.750 650,000
MISSOURI--2.81%
12,000 Bi-State Development Agency
Metropolitan District Revenue
Subordinated (Mass Transit MetroLink),
Series A A 3.500 12,000,000
3,100 Missouri Development Finance
Board, Cultural Facilities Revenue
(Nelson Gallery Foundation), Series B A 3.700 3,100,000
13,200 Missouri Health & Educational
Facilities Authority Revenue
(Assemblies of God College) A 3.550 13,200,000
12,282 Missouri Health & Educational Facilities
Authority Revenue (Barnes Hospital
Project), Series B A 3.580 12,282,000
14,525 Missouri Health & Educational Facilities
Authority Revenue (Washington
University), Series A A 3.700 14,525,000
</Table>
26
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
MISSOURI--(CONCLUDED)
$ 25,075 Missouri Health & Educational Facilities
Authority Revenue (Washington 3.700% to
University), Series B A 3.750 $ 25,075,000
14,740 University of Missouri Revenue
(University Systems Facilities), Series A A 3.700 14,740,000
- --------------------------------------------------------------------------------------------------------------------
94,922,000
- --------------------------------------------------------------------------------------------------------------------
NEBRASKA--0.33%
11,100 NEBHELP, Inc. Revenue
(Multiple-Mode), Series E A 3.550 11,100,000
NEVADA--0.27%
9,000 Clark County Airport Improvement
Revenue Refunding, Series A A 3.490 9,000,000
NEW HAMPSHIRE--1.15%
13,800 New Hampshire Business Finance
Authority Resource Recovery Revenue
Refunding (Wheelabrator), Series A A 3.550 13,800,000
25,000 New Hampshire Health & Education
Facilities Authority Revenue
(Dartmouth College Issue) A 3.520 25,000,000
- --------------------------------------------------------------------------------------------------------------------
38,800,000
- --------------------------------------------------------------------------------------------------------------------
NEW YORK--0.30%
10,000 New York City, Subseries H-2 A 3.470 10,000,000
NORTH CAROLINA--8.93%
9,800 Charlotte Certificates of Participation
(Governmental Facilities Authority),
Series F A 3.550 9,800,000
68,680 Charlotte Water & Sewer System
Revenue Refunding, Series C A 3.500 68,680,000
20,500 Concord Utilities System Revenue
Refunding, Series B A 3.480 20,500,000
10,300 Fayetteville Public Works Commission
Revenue Refunding, Series A A 3.490 10,300,000
63,000 Mecklenburg County Certificates of
Participation A 3.500 63,000,000
</Table>
27
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
NORTH CAROLINA--(CONCLUDED)
$ 11,760 North Carolina Educational Facilities
Finance Agency Revenue (Elon College) A 3.510% $ 11,760,000
5,955 North Carolina Educational Facilities
Finance Agency Revenue
(Providence Day School) A 3.550 5,955,000
30,300 North Carolina Medical Care
Commission Health Care Facilities
Revenue Refunding (Duke University
Health System), Series C A 3.480 30,300,000
16,550 North Carolina Medical Care Commission
Hospital Revenue (Baptist Hospitals
Project) A 3.510 16,550,000
15,000 North Carolina Refunding, Series B A 3.420 15,000,000
21,050 North Carolina Refunding, Series C A 3.480 21,050,000
28,750 Union County, Series A A 3.490 28,750,000
- --------------------------------------------------------------------------------------------------------------------
301,645,000
- --------------------------------------------------------------------------------------------------------------------
OHIO--3.89%
10,000 Butler County Capital Funding Revenue
(CCAO Low Cost Capital), Series A A 3.520 10,000,000
14,900 Cleveland-Cuyahoga County Port
Authority Revenue
(Euclid Ave./93rd St. Garage Office) A 3.580 14,900,000
18,900 Columbus Sewer Revenue Refunding A 3.510 18,900,000
26,130 Franklin County Hospital Revenue
Refunding and Improvement
(U.S. Health Corp.), Series A A 3.490 26,130,000
10,100 Franklin County Hospital Revenue
Refunding Subordinated (OhioHealth 3.500 10,100,000
Doctors Hospital), Series B A
7,220 Mahoning County Housing Revenue
(Youngstown State University Project) A 3.530 7,220,000
14,200 Ohio Air Quality Development Authority
Revenue Refunding (Ohio Edison Project),
Series A A 3.550 14,200,000
29,900 Ohio Water Development Authority
Revenue Refunding (Water
Development-Pure Water Project) A 3.540 29,900,000
- --------------------------------------------------------------------------------------------------------------------
131,350,000
- --------------------------------------------------------------------------------------------------------------------
</Table>
28
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
OREGON--0.65%
$ 15,000 Oregon Tax Anticipation Notes, Series A 11/27/06 4.500% $ 15,187,846
6,700 Portland Multi-Family Revenue
(South Park Block Project), Series A A 3.470 6,700,000
- ---------------------------------------------------------------------------------------------------------------------
21,887,846
- ---------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA--7.02%
10,100 Butler County General Authority
Revenue Refunding (Conneaut
School District Project), Series A A 3.520 10,100,000
10,560 Cumberland County Municipal Authority
Revenue Refunding (Lutheran Services
Northeast/Tressler Lutheran Services
Obligated Group Project), Series C A 3.510 10,560,000
14,065 Delaware County Authority, Hospital
Revenue (Crozer-Chester Medical Center) A 3.520 14,065,000
45,450 Delaware Valley Regional Finance
Authority (Local Government Revenue) A 3.500 45,450,000
25,615 Lancaster County Hospital Authority
Revenue (Health Center, Masonic Homes Project) A 3.520 25,615,000
9,000 Philadelphia Authority for Industrial
Development Revenue (Regional
Performing Arts Center Project) A 3.520 9,000,000
11,300 Philadelphia Hospitals & Higher Education
Facilities Authority Revenue Refunding 3.700 11,300,000
(Children's Hospital Project), Series A A
25,920 Philadelphia Hospitals & Higher Education
Facilities Authority Revenue Refunding 3.700 25,920,000
(Children's Hospital Project), Series B A
57,095 Philadelphia Water & Wastewater Revenue
Refunding, Series B A 3.480 57,095,000
14,200 University of Pittsburgh of the
Commonwealth Systems of Higher
Education (University Capital Project),
Series B A 3.520 14,200,000
13,925 York General Authority Revenue
(Pooled Financing Subordinated), Series B A 3.520 13,925,000
- ---------------------------------------------------------------------------------------------------------------------
237,230,000
- ---------------------------------------------------------------------------------------------------------------------
</Table>
29
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
RHODE ISLAND--0.38%
$ 13,000 Rhode Island Health & Educational
Building Corp. Revenue (Higher
Education Facilities-Brown University), Series A A 3.500% $ 13,000,000
SOUTH CAROLINA--2.07%
27,800 Piedmont Municipal Power Agency,
South Carolina Electric Revenue Refunding, Series A A 3.450 27,800,000
10,000 Piedmont Municipal Power Agency,
South Carolina Electric Revenue Refunding, Series B A 3.450 10,000,000
10,300 Piedmont Municipal Power Agency,
South Carolina Electric Revenue Refunding,
Subseries B-2 A 3.450 10,300,000
10,000 South Carolina Educational Facilities
Authority for Private Nonprofit
Institutions of Higher Learning
Refunding and Improvement (Anderson College) A 3.550 10,000,000
12,015 South Carolina Jobs-Economic
Development Authority, Hospital
Facilities Revenue (Regional Medical
Center of Orangeburg) A 3.480 12,015,000
- ---------------------------------------------------------------------------------------------------------------------
70,115,000
- ---------------------------------------------------------------------------------------------------------------------
TENNESSEE--3.95%
51,700 Clarksville Public Building Authority
Revenue, Pooled Financing
(Tennessee Municipal Bond Fund) A 3.750 51,700,000
9,800 Metropolitan Government of Nashville &
Davidson County, Health & Educational
Facilities Board Revenue (Vanderbilt
University) Series A A 3.500 9,800,000
13,695 Metropolitan Government of Nashville &
Davidson County, Industrial Development
Refunding (David Lipscomb University Project) A 3.550 13,695,000
</Table>
30
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
TENNESSEE--(CONCLUDED)
$ 5,660 Montgomery County Public Building
Authority Revenue Financing
Government Obligation (Pooled Loan) A 3.550% $ 5,660,000
680 Montgomery County Public Building
Authority Revenue (Pooled Loan) A 3.750 680,000
44,000 Shelby County Public Improvement and School,
Series B A 3.550 44,000,000
7,870 Tusculum Health Educational & Housing
Facilities Board, Educational Facilities
Revenue (Tusculum College Project) A 3.550 7,870,000
- ---------------------------------------------------------------------------------------------------------------------
133,405,000
- ---------------------------------------------------------------------------------------------------------------------
TEXAS--6.16%
15,000 Dallas North Tollway System Revenue, Series C A 3.550 15,000,000
23,900 Harris County Health Facilities
Development Corp. Revenue Refunding
(The Methodist Systems), Series B A 3.700 23,900,000
7,050 Tarrant County Housing Finance Corp.
Revenue Refunding (Multi-Family
Housing Apartments Project) A 3.580 7,050,000
133,500 Texas Tax and Revenue Anticipation Notes 08/31/06 4.500 134,799,344
24,165 Texas Turnpike Authority, Central Texas
Turnpike System Revenue, First Tier, Series B A 3.480 24,165,000
3,400 Texas Water Development Board
Revenue Refunding Subordinated
(State Revolving Fund) A 3.750 3,400,000
- ---------------------------------------------------------------------------------------------------------------------
208,314,344
- ---------------------------------------------------------------------------------------------------------------------
VIRGINIA--0.38%
11,545 Fairfax County Economic Development
Authority Revenue (Smithsonian Institution),
Series A A 3.500 11,545,000
1,400 Roanoke Industrial Development Authority,
Hospital Revenue Refunding (Carilion
Health Systems), Series B A 3.700 1,400,000
- ---------------------------------------------------------------------------------------------------------------------
12,945,000
- ---------------------------------------------------------------------------------------------------------------------
</Table>
31
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
WASHINGTON--5.39%
$ 23,000 Energy Northwest Washington Electric
Revenue Refunding (Project No. 3), Series D-3-1 A 3.490% $ 23,000,000
17,500 Energy Northwest Washington Electric
Revenue Refunding (Project No. 3), Series E A 3.580 17,500,000
23,195 King County Sewer Revenue (Junior Lien), Series A A 3.530 23,195,000
22,200 King County Sewer Revenue (Junior Lien), Series B A 3.550 22,200,000
8,600 Seattle Municipal Light & Power Revenue A 3.420 8,600,000
35,370 Snohomish County Public Utility
District No. 001, Electric Revenue
Refunding (Generation Systems), Series 2001A A 3.490 35,370,000
10,000 Tulalip Tribes of The Tulalip Reservation
Special Revenue Refunding A 3.570 10,000,000
6,850 Washington Health Care Facilities
Authority Revenue (Providence Services), Series A A 3.700 6,850,000
22,745 Washington Public Power Supply
Systems Nuclear Project No. 1 Revenue
Refunding, Series 1A-2 A 3.490 22,745,000
12,830 Washington Public Power Supply
Systems Nuclear Project No. 3 Electric
Revenue Refunding, Series 3A A 3.500 12,830,000
- ---------------------------------------------------------------------------------------------------------------------
182,290,000
- ---------------------------------------------------------------------------------------------------------------------
WISCONSIN--0.30%
10,000 Wisconsin Center District Tax Revenue, Series A A 3.550 10,000,000
- ---------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds and Notes (cost--$3,211,711,190) 3,211,711,190
- ---------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER--7.58%
ARIZONA--0.67%
22,725 Salt River Agricultural Improvement & Power 02/09/06 to
02/13/06 3.100 22,725,000
</Table>
32
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER--(CONTINUED)
DISTRICT OF COLUMBIA--0.19%
$ 6,500 District of Columbia (American National Red Cross) 11/01/06 2.800% $ 6,500,000
FLORIDA--1.24%
5,000 Florida Local Government Finance Commission 02/14/06 3.100 5,000,000
37,000 Jacksonville Electric Authority 01/20/06 to 2.850 to
02/22/06 3.150 37,000,000
- ---------------------------------------------------------------------------------------------------------------------
42,000,000
- ---------------------------------------------------------------------------------------------------------------------
GEORGIA--1.01%
34,000 Burke County Development Authority
Pollution Control Revenue,
(Oglethorpe Power Corp.) 01/11/06 to
01/17/06 2.820 34,000,000
ILLINOIS--0.47%
16,000 Illinois Educational Facilities Authority Revenue 01/18/06 2.820 16,000,000
LOUISIANA--0.41%
13,970 Louisiana Offshore Terminal Authority
Deepwater Port Revenue Refunding
(Loop, Inc. First Stage), Series A 01/19/06 2.900 13,970,000
MASSACHUSETTS--0.52%
4,000 Commonwealth of Massachusetts 01/17/06 3.240 4,000,000
13,700 Massachusetts Water Authority 02/08/06 3.150 13,700,000
- ---------------------------------------------------------------------------------------------------------------------
17,700,000
- ---------------------------------------------------------------------------------------------------------------------
MINNESOTA--1.25%
24,500 City of Rochester (Mayo Clinic) 01/24/06 to 2.900 to
01/26/06 3.000 24,500,000
17,600 Rochester Health Care Facility 03/10/06 3.160 17,600,000
- ---------------------------------------------------------------------------------------------------------------------
42,100,000
- ---------------------------------------------------------------------------------------------------------------------
TEXAS--0.73%
14,500 City of Houston 01/23/06 to 2.850 to
01/25/06 2.930 14,500,000
</Table>
33
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER--(CONCLUDED)
TEXAS--(CONCLUDED)
$ 10,048 Texas Department of Transportation 02/15/06 3.130% $ 10,048,000
- ---------------------------------------------------------------------------------------------------------------------
24,548,000
- ---------------------------------------------------------------------------------------------------------------------
UTAH--0.16%
5,400 Intermountain Power Agency 02/13/06 3.130 5,400,000
WASHINGTON--0.93%
23,300 King County Sewer Revenue 02/10/06 to
02/14/06 2.870 23,300,000
8,000 Port of Tacoma 01/13/06 2.850 8,000,000
- ---------------------------------------------------------------------------------------------------------------------
31,300,000
- ---------------------------------------------------------------------------------------------------------------------
Total Tax-Exempt Commercial Paper (cost--$256,243,000) 256,243,000
- ---------------------------------------------------------------------------------------------------------------------
<Caption>
NUMBER OF
SHARES
(000)
- ----------
MONEY MARKET FUND+--0.01%
500 AIM Tax Free Investments (cost--$500,000) 3.160 500,000
- ---------------------------------------------------------------------------------------------------------------------
Total Investments (cost--$3,468,454,190
which approximates cost for federal income tax purposes)--102.63% 3,468,454,190
Liabilities in excess of other assets--(2.63)% (88,946,115)
- ---------------------------------------------------------------------------------------------------------------------
Net Assets (applicable to 3,380,243,834 shares
of common stock outstanding equivalent to
$1.00 per share)--100.00% $ 3,379,508,075
- ---------------------------------------------------------------------------------------------------------------------
</Table>
A Variable rate demand notes are payable on demand. The interest rates shown
are the current rates as of December 31, 2005, and reset periodically.
+ Interest rate shown reflects yield at December 31, 2005.
Weighted average maturity -- 19 days
See accompanying notes to financial statements
34
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
STATEMENT OF NET ASSETS -- DECEMBER 31, 2005 (UNAUDITED)
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--89.32%
$ 2,100 California, Daily Kindergarten Universal,
Series A-1 A 3.730% $ 2,100,000
8,120 California, Daily Kindergarten Universal,
Series A-2 A 3.700 8,120,000
1,100 California, Daily Kindergarten Universal,
Series A-5 A 3.750 1,100,000
3,300 California, Daily Kindergarten Universal,
Series B-1 A 3.730 3,300,000
14,650 California, Daily Kindergarten Universal,
Series B-2 A 3.650 14,650,000
18,000 California Department of Veteran Affairs
Home Purchase, Subseries A-2 A 3.450 18,000,000
10,000 California Department of Water
Resources Power Supply Revenue
(Putters), Series 344 A 3.540 10,000,000
3,640 California Department of Water
Resources Power Supply Revenue, Series B-3 A 3.650 3,640,000
7,200 California Department of Water
Resources Power Supply Revenue, Series B-4 A 3.750 7,200,000
7,000 California Department of Water
Resources Power Supply Revenue, Series C-1 A 3.550 7,000,000
15,000 California Department of Water
Resources Power Supply Revenue, Subseries F-3 A 3.200 15,000,000
8,000 California Department of Water
Resources Power Supply Revenue, Subseries G-14 A 3.170 8,000,000
6,600 California Economic Recovery, Series C-9 A 3.650 6,600,000
10,000 California Health Facilities Financing
Authority (Catholic Health Facilities),
Series J A 3.450 10,000,000
8,004 California Health Facilities Financing
Authority (Floating Pooled Loan Program),
Series B A 3.500 8,004,000
30,755 California Health Facilities Financing
Authority (Hospital Adventist Health Systems), 3.530 to
Series A A 3.700 30,755,000
</Table>
35
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$ 600 California Health Facilities Financing
Authority (Sutter/CHS), Series B A 3.750% $ 600,000
32,250 California Infrastructure & Economic
Development Revenue (Asian Art Museum Foundation) A 3.700 32,250,000
15,500 California Infrastructure & Economic
Development Revenue (Buck Institute Age Research) A 3.540 15,500,000
11,900 California Infrastructure & Economic
Development Revenue (Independent
Systems Operation Corp. Project), Series B A 3.450 11,900,000
7,900 California Infrastructure & Economic
Development Revenue (Independent
Systems Operation Corp. Project), Series C A 3.500 7,900,000
8,000 California Infrastructure & Economic
Development Revenue (Rand Corp.), Series B A 3.750 8,000,000
8,000 California, Series A-1 A 3.750 8,000,000
10,800 California, Series A-2 A 3.750 10,800,000
5,000 California, Series C-1 A 3.500 5,000,000
2,100 California Statewide Communities
Development Authority Revenue
Certificates of Participation Refunding
(House Ear Institute) A 3.700 2,100,000
18,560 California Statewide Communities
Development Authority Revenue
(Kaiser Permanente), Series C A 3.550 18,560,000
3,400 California Statewide Communities
Development Authority Revenue
(Kaiser Permanente), Series M A 3.480 3,400,000
19,420 California Transit Financing Authority A 3.500 19,420,000
9,920 Association of Bay Area Governments
Finance Authority for Nonprofit Corps.
Certificates of Participation
(Lucile Salter Packard Project) A 3.540 9,920,000
21,200 Bay Area Toll Authority Toll Bridge
Revenue (San Francisco Bay Area), Series A A 3.490 21,200,000
</Table>
36
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$ 12,300 Bay Area Toll Authority Toll Bridge
Revenue (San Francisco Bay Area), Series B A 3.430% $ 12,300,000
8,000 Bay Area Toll Authority Toll Bridge
Revenue (San Francisco Bay Area), Series C A 3.500 8,000,000
15,215 Conejo Valley Unified School District
Tax and Revenue Anticipation Notes 06/30/06 3.500 15,280,759
8,000 Desert Sands Unified School District
Tax and Revenue Anticipation Notes 07/07/06 3.500 8,035,920
8,620 East Bay Municipal Utility District
Water Systems Revenue Refunding, Subseries A A 3.430 8,620,000
9,600 East Bay Municipal Utility District
Water Systems Revenue Refunding, Subseries B A 3.470 9,600,000
10,600 East Bay Municipal Utility District
Water Systems Revenue Refunding, Subseries B-1 A 3.430 10,600,000
10,000 East Bay Municipal Utility District
Water Systems Revenue Refunding, Subseries B-3 A 3.450 10,000,000
8,000 Elk Grove Unified School District Tax
and Revenue Anticipation Notes 07/06/06 3.750 8,027,744
13,745 Irvine Improvement Bond Act 1915
Limited Obligation (Assessment District 85-7-1) A 3.550 13,745,000
10,500 Los Angeles County Transport
Commission Sales Tax and Revenue, Series A A 3.430 10,500,000
12,400 Los Angeles Multi-Family Housing
Revenue (Museum Terrace Apartments), Series H A 3.350 12,400,000
10,000 Los Angeles Water and Power Revenue, Subseries A-1 A 3.450 10,000,000
5,000 Los Angeles Water and Power Revenue, Subseries A-4 A 3.450 5,000,000
9,900 Los Angeles Water and Power Revenue, Subseries A-5 A 3.450 9,900,000
7,300 Los Angeles Water and Power Revenue, Subseries A-7 A 3.450 7,300,000
</Table>
37
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$ 9,350 Los Angeles Water and Power Revenue, Subseries B-3 A 3.730% $ 9,350,000
13,150 Los Angeles Water and Power Revenue, Subseries B-6 A 3.700 13,150,000
9,000 Madera Irrigation Financing Authority
Water Revenue, Series A A 3.750 9,000,000
10,000 Metropolitan Water District Southern
California Waterworks Revenue, Series B-1 A 3.450 10,000,000
20,000 Metropolitan Water District Southern 3.450 to
California Waterworks Revenue, Series B-2 A 3.500 20,000,000
12,900 Metropolitan Water District Southern
California Waterworks Revenue, Series B-4 A 3.430 12,900,000
3,350 M-S-R Public Power Agency Revenue
Subordinated Lien (San Juan Project), Series F A 3.700 3,350,000
5,850 Newport Beach Revenue (Hoag Memorial Hospital),
Series A A 3.700 5,850,000
1,100 Newport Beach Revenue (Hoag Memorial Hospital),
Series B A 3.700 1,100,000
12,670 Newport Beach Revenue (Hoag Memorial Hospital),
Series C A 3.700 12,670,000
10,000 Northern California Power Agency
Revenue Refunding (Hydroelectric No. 1-A) A 3.430 10,000,000
4,965 Northern California Transmission Agency
Revenue Refunding (California-Oregon Transmission),
Series A A 3.380 4,965,000
25,513 Oakland Alameda County Coliseum
Authority Lease Revenue A 3.520 25,513,000
12,000 Oakland Alameda County Coliseum
Authority Lease Revenue (Coliseum Project),
Series C-2 A 3.500 12,000,000
6,590 Orange County Apartment Development
Revenue (Niguel Village), Series AA A 3.450 6,590,000
13,200 Orange County Apartment Development
Revenue (Seaside Meadow), Series C A 3.430 13,200,000
32,300 Orange County Water District Revenue
Certificates of Participation, Series A A 3.430 32,300,000
</Table>
38
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$ 6,460 Pasadena Certificates of Participation
(Rose Bowl Imports Project) A 3.500% $ 6,460,000
2,000 Pittsburg Redevelopment Agency Tax
Allocation (Los Medanos Community), Subseries A A 3.750 2,000,000
17,000 Puerto Rico Commonwealth Tax and
Revenue Anticipation Notes 07/28/06 4.500 17,121,163
5,000 Riverside County Certificates of
Participation (Aces Riverside County
Public Facility), Series A A 3.400 5,000,000
5,650 Sacramento County Certificates of
Participation (Administration Center
and Courthouse Project) A 3.500 5,650,000
5,500 Sacramento County Sanitation District
Financing Authority Revenue Subordinated Lien
(Sacramento), Series C A 3.450 5,500,000
7,500 Sacramento Unified School District
Certificates of Participation A 3.550 7,500,000
8,800 San Bernardino County Certificates of Participation
(County Center Refinancing Project) A 3.450 8,800,000
10,000 San Diego County Certificates of Participation A 3.500 10,000,000
4,000 San Francisco City and County Redevelopment Agency
Revenue (Community Facilities District No. 4) A 3.550 4,000,000
8,800 San Jose Redevelopment Agency Revenue
(Merged Area Redevelopment Project), Series B A 3.450 8,800,000
15,050 Simi Valley Multi-Family Housing Revenue
Refunding (Lincoln Wood Ranch) A 3.490 15,050,000
5,300 South Placer Wastewater Authority
California Wastewater Revenue, Series B A 3.500 5,300,000
14,700 Southern California Public Power Authority
Transmission Project Revenue, Subordinated
Refunding (Southern Transmission) A 3.430 14,700,000
4,200 Turlock Irrigation District Certificates of
Participation (Capital Improvement and
Refunding Project) A 3.700 4,200,000
</Table>
39
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
$ 25,000 Western Placer Unified School Certificates
of Participation (School Facilities Project),
Series A A 3.500% $ 25,000,000
- ---------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds and Notes (cost--$834,347,586) 834,347,586
- ---------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER--10.37%
10,000 California Educational Facilities Authority
(Carnegie Institute of Washington), 01/11/06 to 3.050 to
Series B 01/12/06 3.150 10,000,000
15,700 California Statewide Community Development 01/19/06 to 2.820 to
Authority (Kaiser Permanente) 02/22/06 2.140 5,700,000
4,900 East Bay Municipal Utility District
Water Systems Revenue 02/15/06 3.100 4,900,000
23,300 Los Angeles County Capital Asset 01/12/06 to 2.840 to
Leasing Corp. 02/06/06 3.120 23,300,000
9,000 Los Angeles Muni Improvement Corp. 02/10/06 to
02/13/06 3.100 9,000,000
7,500 Sacramento Municipal Utility District 01/10/06 to 3.210 to
01/11/06 3.230 7,500,000
5,000 San Diego County Water 02/09/06 2.800 5,000,000
11,500 San Francisco City and County 01/17/06 to 3.110 to
Public Utilities Commission 01/23/06 3.130 11,500,000
5,000 Transmission Authority of Northern California 02/14/06 3.120 5,000,000
5,000 University of California Regents 01/20/06 2.800 5,000,000
- ---------------------------------------------------------------------------------------------------------------------
Total Tax-Exempt Commercial Paper(cost--$96,900,000) 96,900,000
- ---------------------------------------------------------------------------------------------------------------------
Total Investments (cost--$931,247,586 which approximates
cost for federal income tax purposes)--99.69% 931,247,586
Other assets in excess of liabilities--0.31% 2,868,297
- ---------------------------------------------------------------------------------------------------------------------
Net Assets (applicable to 934,529,404 shares of beneficial
interest outstanding equivalent to $1.00 per share)--100.00% $ 934,115,883
- ---------------------------------------------------------------------------------------------------------------------
</Table>
A Variable rate demand notes are payable on demand. The interest rates shown
are the current rates as of December 31, 2005 and reset periodically.
Weighted average maturity -- 18 days
See accompanying notes to financial statements
40
<Page>
UBS RMA NEW YORK MUNICIPAL MONEY FUND
STATEMENT OF NET ASSETS--DECEMBER 31, 2005 (UNAUDITED)
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--93.96%
$ 20,620 New York State Dormitory Authority 3.450 to
Revenue (Cornell University), Series B A 3.700% $ 20,620,000
8,000 New York State Dormitory Authority
Revenue (Mental Health Facilities
Improvement), Series F-2B A 3.520 8,000,000
6,992 New York State Dormitory Authority
Revenue (Metropolitan Museum of Art) A 3.500 6,992,000
7,600 New York State Dormitory Authority
Revenue Non State Supported Debt
(North Shore-Long Island Jewish), Series A A 3.470 7,600,000
5,400 New York State Dormitory Authority
Revenue Non State Supported Debt, Series C A 3.550 5,400,000
12,200 New York State Dormitory Authority
Revenue (Wagner College) A 3.560 12,200,000
6,000 New York State Energy Research &
Development Authority Facilities
Revenue (Con Edison), Subseries A-1 A 3.470 6,000,000
22,150 New York State Energy Research &
Development Authority Pollution
Control Revenue (Orange & Rockland
Project), Series A A 3.450 22,150,000
3,660 New York State Environmental Facilities
Corp. Clean Water & Drinking Revolving
Funds (NYC Municipal Water Finance), Series C 06/15/06 4.000 3,678,657
3,500 New York State Environmental Facilities
Corp. Solid Waste Disposal Revenue
Refunding (G.E. Co.), Series A A 3.720 3,500,000
5,000 New York State Housing Finance Agency
(Normandie Court I Project) A 3.520 5,000,000
13,000 New York State Housing Finance Agency
Revenue (North End Ave. Housing), Series A A 3.560 13,000,000
10,000 New York State Housing Finance Agency
Service Contract Revenue, Series D A 3.520 10,000,000
5,500 New York State Local Government
Assistance Corp. Refunding (Sub Lien),
Series A-5V A 3.450 5,500,000
</Table>
41
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$ 6,000 New York State Local Government Assistance Corp.
Refunding (Sub Lien), Series A-6V A 3.450% $ 6,000,000
7,595 New York State Local Government
Assistance Corp., Series B A 3.450 7,595,000
12,665 New York State Local Government
Assistance Corp., Series G A 3.420 12,665,000
6,270 New York State Thruway Authority Personal Income Tax
Revenue (Putters), Series 1186 A 3.550 6,270,000
14,000 New York State Urban Development Corp.
Revenue (State Facilities & Equipment),
Subseries A-3-B A 3.450 14,000,000
6,000 New York State Urban Development Corp.
Revenue (State Facilities & Equipment),
Subseries A-3-C A 3.520 6,000,000
3,053 Arlington Central School District Bond
Anticipation Notes 11/01/06 4.250 3,080,844
6,550 Erie County Water Authority A 3.450 6,550,000
2,490 Great Neck North Water Authority Systems Revenue,
Series-A A 3.520 2,490,000
18,300 Jay Street Development Corp. New York City Facility
Lease Revenue (Jay Street Project), Series A-3 A 3.470 18,300,000
7,000 Long Island Power Authority Electric
Systems Revenue, Series D A 3.520 7,000,000
8,900 Long Island Power Authority Electric
Systems Revenue, Series G A 3.460 8,900,000
2,000 Long Island Power Authority Electric
Systems Revenue, Subseries 1-B A 3.700 2,000,000
2,300 Long Island Power Authority Electric
Systems Revenue, Subseries 3-B A 3.720 2,300,000
5,000 Long Island Power Authority Electric
Systems Revenue, Subseries 7-A A 3.430 5,000,000
5,000 Metropolitan Transportation Authority,
Series D-1 A 3.480 5,000,000
7,700 Metropolitan Transportation Authority,
Subseries A-2 A 3.460 7,700,000
12,000 Metropolitan Transportation Authority,
Subseries A-3 A 3.350 12,000,000
</Table>
42
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$ 3,155 Metropolitan Transportation Authority,
Subseries G-2 A 3.750% $ 3,155,000
7,355 Monroe County Industrial Development
Agency Civic Facilities Revenue
Refunding (Nazareth College), Series B A 3.530 7,355,000
4,820 Nassau County Interim Finance Authority, Series A A 3.500 4,820,000
10,000 New Rochelle School District Tax
Anticipation Notes, Series A 06/30/06 3.750 10,027,300
19,500 New York City Housing Development Corp.
Multi-Family Mortgage Revenue
(The Crest), Series A A 3.550 19,500,000
6,000 New York City Housing Development Corp.
Multi-Family Rental Housing
(90 West Street), Series A A 3.550 6,000,000
6,500 New York City Housing Development Corp.
Multi-Family Rental Housing
(Queenswood Apartments), Series A A 3.500 6,500,000
14,135 New York City Industrial Development
Agency Civic Facility Revenue
(Center for Jewish History Project) A 3.510 14,135,000
4,420 New York City Industrial Development
Agency Civic Facility Revenue
(Church of Heavenly Rest) A 3.560 4,420,000
6,640 New York City Industrial Development
Agency Civic Facility Revenue
(Lycee Francais De New York Project), Series B A 3.700 6,640,000
6,810 New York City Industrial Development
Agency Civic Facility Revenue
(MSMC Realty Corp. Project) A 3.540 6,810,000
3,000 New York City Industrial Development
Agency Civic Facility Revenue
(National Audubon Society) A 3.700 3,000,000
31,450 New York City Industrial Development
Agency Revenue (Liberty 1 Bryant
Park LLC), Series B A 3.770 31,450,000
15,100 New York City Municipal Water Finance
Authority Water & Sewer Systems
Revenue (Fiscal 2003), Subseries C-1 A 3.820 15,100,000
</Table>
43
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
$ 1,200 New York City Municipal Water Finance Authority
Water & Sewer Systems Revenue (Second Generation
Resolution), Series AA-1 A 3.770% $ 1,200,000
14,600 New York City Municipal Water Finance Authority
Water & Sewer Systems Revenue, Series A A 3.670 14,600,000
5,000 New York City Municipal Water Finance Authority
Water & Sewer Systems Revenue, Series F-2 A 3.560 5,000,000
3,260 New York City, Series B, Subseries B-5 A 3.750 3,260,000
5,100 New York City, Series B-2, Subseries B-5 A 3.750 5,100,000
7,200 New York City, Series E, Subseries E-2 A 3.700 7,200,000
4,900 New York City, Series H, Subseries H-2 A 3.820 4,900,000
3,900 New York City, Subseries A-4 A 3.820 3,900,000
2,500 New York City, Subseries E-4 A 3.740 2,500,000
5,000 New York City, Subseries F-3 A 3.520 5,000,000
5,360 New York City Trust for Cultural Resources
Revenue (Asia Society) A 3.460 5,360,000
14,645 Oneida County Industrial Development Agency
Revenue Civic Facilities (Hamilton College) A 3.520 14,645,000
19,635 Oneida Indian Nation A 3.450 19,635,000
21,700 Port Authority of New York & New Jersey
Special Obligation Revenue
(Versatile Structure Obligation), Series 2 A 3.720 21,700,000
655 Port Authority of New York & New Jersey
Special Obligation Revenue
(Versatile Structure Obligation), Series 3 A 3.750 655,000
10,000 Puerto Rico Commonwealth Tax &
Revenue Anticipation Notes 07/28/06 4.500 10,071,272
3,395 Rensselaer County Industrial Development
Agency Civic Facilities Revenue
(Polytech Institute Project), Series A A 3.520 3,395,000
5,000 Suffolk County Tax Anticipation Notes 09/07/06 4.250 5,039,930
20,900 Suffolk County Water Authority Bond Anticipation Notes A 3.490 20,900,000
24,215 Triborough Bridge & Tunnel Authority 3.470 to
Revenue General Purpose, Series B A 3.490 24,215,000
8,658 Yonkers Industrial Development Agency
(Consumers Union Facility) A 3.650 8,657,645
- ---------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds and Notes (cost--$588,337,648) 588,337,648
- ---------------------------------------------------------------------------------------------------------------------
</Table>
44
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER--7.66%
$ 6,000 New York City General Obligation 01/17/06 2.830% $ 6,000,000
16,400 New York State Environmental 01/12/06 to 2.800 to
Facilities Corp. 02/01/06 2.820 16,400,000
25,578 New York State Power Authority 01/11/06 to 2.840 to
02/10/06 3.120 25,578,000
- --------------------------------------------------------------------------------------------------------------------
Total Tax-Exempt Commercial Paper (cost--$47,978,000) 47,978,000
- --------------------------------------------------------------------------------------------------------------------
Total Investments (cost--$636,315,648 which
approximates cost for federal income
tax purposes)--101.62% 636,315,648
Liabilities in excess of other assets--(1.62)% (10,146,308)
- --------------------------------------------------------------------------------------------------------------------
Net Assets (applicable to 626,293,841 shares of
beneficial interest outstanding equivalent to
$1.00 per share)--100.00% $ 626,169,340
- --------------------------------------------------------------------------------------------------------------------
</Table>
A Variable rate demand notes are payable on demand. The interest rates shown
are the current rates as of December 31, 2005 and reset periodically.
Weighted average maturity -- 17 days
See accompanying notes to financial statements
45
<Page>
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
STATEMENT OF NET ASSETS - DECEMBER 31, 2005 (UNAUDITED)
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--97.47%
$ 325 New Jersey Economic Development
Authority (Bayonne Project
Improvement), Series A A 3.730% $ 325,000
3,700 New Jersey Economic Development
Authority (Bayonne Project
Improvement), Series B A 3.730 3,700,000
2,670 New Jersey Economic Development
Authority (Bayonne Project
Improvement), Series C A 3.730 2,670,000
4,000 New Jersey Economic Development
Authority (Crowley Liner Services
Project) A 3.470 4,000,000
1,250 New Jersey Economic Development
Authority (Danic Urban Renewal) A 3.550 1,250,000
1,985 New Jersey Economic Development
Authority (Institute of Electrical),
Series A A 3.480 1,985,000
405 New Jersey Economic Development
Authority (Kenwood USA Corp. Project) A 3.500 405,000
300 New Jersey Economic Development
Authority (Lawrenceville School Project) A 3.750 300,000
9,775 New Jersey Economic Development
Authority (Lawrenceville School Project),
Series B A 3.650 9,775,000
5,905 New Jersey Economic Development
Authority (Stolthaven Project), Series A A 3.680 5,905,000
1,800 New Jersey Economic Development
Authority (Thermal Energy Limited
Partnership) A 3.580 1,800,000
2,000 New Jersey Economic Development
Authority (Transportation),
Series N10-Regulation D A 3.580 2,000,000
735 New Jersey Economic Development
Authority Refunding
(First Mortgage-Franciscan) A 3.480 735,000
3,200 New Jersey Economic Development
Authority Speciality Facilities Revenue
(Port Newark Container LLC) A 3.530 3,200,000
6,000 New Jersey Economic Development
Authority Water Facilities Revenue
Refunding (United Water NJ, Inc.
Project), Series A A 3.750 6,000,000
</Table>
46
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$ 900 New Jersey Economic Development
Authority Water Facilities Revenue
Refunding (United Water NJ, Inc. Project),
Series B A 3.750% $ 900,000
4,800 New Jersey Educational Facilities Authority
(College of New Jersey), Series A A 3.480 4,800,000
10,715 New Jersey Educational Facilities Authority 3.700 to
(Princeton University), Series B A 3.750 10,715,000
1,900 New Jersey Health Care Facilities Authority
(Community Hospital Group), Series A-1 A 3.480 1,900,000
1,950 New Jersey Health Care Facilities Authority
(Robert Wood Johnson University) A 3.480 1,950,000
3,770 New Jersey Health Care Facilities Authority
(St. Barnabas), Series A A 3.470 3,770,000
5,800 New Jersey Health Care Facilities Authority
(St. Peter's Hospital), Series B A 3.550 5,800,000
4,000 New Jersey Health Care Facilities Authority
(Variable Capital Health Systems
Obligation), Group B A 3.480 4,000,000
3,600 New Jersey Health Care Facilities
Financing Authority Revenue, Series A3 A 3.470 3,600,000
2,335 New Jersey Health Care Facilities
Financing Authority Revenue
(Virtua Health Issue) 07/01/06 5.000 2,356,761
1,900 New Jersey Sports & Exposition Authority,
Series B-1 A 3.520 1,900,000
6,070 New Jersey State Housing & Mortgage
Finance Agency Revenue
(Single Family Housing), Series N A 3.520 6,070,000
4,000 New Jersey State Tax & Revenue
Anticipation Notes, Series A 06/23/06 4.000 4,018,128
1,500 New Jersey State Transportation Trust
Fund Authority (Putters), Series 1142 A 3.550 1,500,000
2,000 New Jersey State Transportation Trust
Fund Authority (Putters), Series 1144 A 3.550 2,000,000
4,000 New Jersey Turnpike Authority A 3.460 4,000,000
2,000 New Jersey Turnpike Authority (Putters),
Series 155 A 3.550 2,000,000
</Table>
47
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
$ 1,210 Atlantic County Improvement Authority
Revenue (Pooled Government
Loan Program) A 3.540% $ 1,210,000
2,000 Bergen County Improvement Authority
(Senior Special Purpose Limited
Obligation), Series B A 3.570 2,000,000
3,162 Bound Brook Bond Anticipation Notes 06/16/06 4.250 3,173,913
1,075 Essex County Improvement Authority
Revenue (Jewish Community Center
Metropolitan Project) A 3.480 1,075,000
4,325 Gloucester County Industrial Pollution
Control Financing Authority Revenue
Refunding (Pollution Control-ExxonMobil) A 3.600 4,325,000
3,500 Mercer County Improvement Authority
(Atlantic Foundation) A 3.460 3,500,000
1,605 Middle Township School District Grant
Anticipation Notes 07/07/06 4.250 1,612,283
1,850 Monmouth County Improvement
Authority (Pooled Government
Loan Program) A 3.450 1,850,000
4,000 Pequannock Township Bond
Anticipation Notes 08/03/06 4.000 4,025,047
5,235 Port Authority of New York and
New Jersey Special Obligation Revenue
(Versatile Structure Obligation), Series 3 A 3.750 5,235,000
2,400 Port Authority of New York and
New Jersey Special Obligation Revenue
(Versatile Structure Obligation), Series 4 A 3.800 2,400,000
1,655 Port Authority of New York and
New Jersey Special Obligation Revenue
(Versatile Structure Obligation), Series 5 A 3.750 1,655,000
3,000 Puerto Rico Commonwealth Tax &
Revenue Anticipation Notes 07/28/06 4.500 3,021,382
4,115 Rutgers State University Refunding,
Series A A 3.650 4,115,000
1,525 Salem County Pollution Control Financing
Refunding (Atlantic City Electric),
Series A A 3.520 1,525,000
2,000 Somerville New Jersey Bond Anticipation
Notes 05/12/06 4.000 2,006,471
- --------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds and Notes (cost--$148,058,985) 148,058,985
- --------------------------------------------------------------------------------------------------------------------
</Table>
48
<Page>
<Table>
<Caption>
NUMBER OF
SHARES INTEREST
(000) RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUND+--1.71%
2,600 BlackRock New Jersey Municipal Money
Market Portfolio (cost--$2,600,000) 2.981% $ 2,600,000
- --------------------------------------------------------------------------------------------------------------------
Total Investments (cost--$150,658,985 which
approximates cost for federal income tax
purposes)--99.18% 150,658,985
Other assets in excess of liabilities--0.82% 1,252,844
- --------------------------------------------------------------------------------------------------------------------
Net Assets (applicable to 151,908,417 shares of
beneficial interest outstanding equivalent to
$1.00 per share)--100.00% $ 151,911,829
- --------------------------------------------------------------------------------------------------------------------
</Table>
A Variable rate demand notes are payable on demand. The interest rates shown
are the current rates as of December 31, 2005 and reset periodically.
+ Interest rate shown reflects yield at December 31, 2005.
Weighted average maturity -- 29 days
See accompanying notes to financial statements
49
<Page>
UBS RMA
STATEMENT OF OPERATIONS
<Table>
<Caption>
FOR THE SIX MONTHS ENDED
DECEMBER 31, 2005
(UNAUDITED)
--------------------------------
MONEY MARKET U.S. GOVERNMENT
PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 198,363,841 $ 19,514,296
Securities lending income -- 142,522
198,363,841 19,656,818
EXPENSES:
Investment advisory and administration fees 26,481,828 2,381,699
Service fees 6,620,457 690,449
Transfer agency and related services fees 3,337,688 121,050
Custody and accounting fees 565,109 58,843
Insurance expense 293,718 31,090
Reports and notices to shareholders 260,252 13,946
Federal and state registration fees 113,234 23,071
Directors'/Trustees' fees 55,558 11,450
Professional fees 54,106 47,542
Interest expense -- --
Other expenses 49,398 10,105
37,831,348 3,389,245
Less: Fee waivers by investment advisor and administrator (6,620,457) --
Net expenses 31,210,891 3,389,245
Net investment income 167,152,950 16,267,573
Net realized gains (losses) from investment activities 125,195 16,122
Net increase in net assets resulting from operations $ 167,278,145 $ 16,283,695
</Table>
50
<Page>
<Table>
<Caption>
FOR THE SIX MONTHS ENDED
DECEMBER 31, 2005
(UNAUDITED)
------------------------------------------------------------------
CALIFORNIA NEW YORK NEW JERSEY
TAX-FREE MUNICIPAL MUNICIPAL MUNICIPAL
FUND MONEY FUND MONEY FUND MONEY FUND
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 46,797,044 $ 11,402,262 $ 8,045,346 $ 1,777,995
Securities lending income -- -- -- --
46,797,044 11,402,262 8,045,346 1,777,995
EXPENSES:
Investment advisory and administration fees 7,281,886 1,981,335 1,451,545 344,882
Service fees 2,213,364 551,434 386,593 82,772
Transfer agency and related services fees 481,263 107,645 99,159 36,255
Custody and accounting fees 189,138 47,162 32,951 7,402
Insurance expense 77,130 18,974 13,807 3,193
Reports and notices to shareholders 35,161 7,658 6,937 4,276
Federal and state registration fees 45,686 14,574 14,836 12,496
Directors'/Trustees' fees 20,865 9,168 8,121 6,027
Professional fees 49,252 44,643 44,525 37,288
Interest expense 26,543 -- -- --
Other expenses 35,716 9,225 7,855 6,352
10,456,004 2,791,818 2,066,329 540,943
Less: Fee waivers by investment advisor and administrator -- -- -- --
Net expenses 10,456,004 2,791,818 2,066,329 540,943
Net investment income 36,341,040 8,610,444 5,979,017 1,237,052
Net realized gains (losses) from investment activities (345) -- -- --
Net increase in net assets resulting from operations $ 36,340,695 $ 8,610,444 $ 5,979,017 $ 1,237,052
</Table>
See accompanying notes to financial statements
51
<Page>
UBS RMA
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE
DECEMBER 31, 2005 YEAR ENDED
(UNAUDITED) JUNE 30, 2005
- ---------------------------------------------------------------------------------------------------------------------------
UBS RMA MONEY MARKET PORTFOLIO
FROM OPERATIONS:
Net investment income $ 167,152,950 $ 183,907,797
Net realized gain (loss) from investment activities 125,195 (1,698,238)
Net increase in net assets resulting from operations 167,278,145 182,209,559
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (167,152,950) (183,907,797)
Net realized gains from investment activities -- (2,152,500)
Total dividends and distributions to shareholders (167,152,950) (186,060,297)
Net increase (decrease) in net assets from capital share transactions 4,425,100 (2,004,556,930)
Net increase (decrease) in net assets 4,550,295 (2,008,407,668)
NET ASSETS:
Beginning of period 10,425,877,983 12,434,285,651
End of period $ 10,430,428,278 $ 10,425,877,983
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income $ -- $ --
- ---------------------------------------------------------------------------------------------------------------------------
UBS RMA U.S. GOVERNMENT PORTFOLIO FROM OPERATIONS:
Net investment income $ 16,267,573 $ 17,682,078
Net realized gain (loss) from investment activities 16,122 (121,037)
Net increase in net assets resulting from operations 16,283,695 17,561,041
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (16,267,573) (17,682,078)
Net decrease in net assets from capital share transactions (59,381,354) (139,098,548)
Net decrease in net assets (59,365,232) (139,219,585)
NET ASSETS:
Beginning of period 1,111,697,900 1,250,917,485
End of period $ 1,052,332,668 $ 1,111,697,900
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income $ -- $ --
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements
52
<Page>
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE
DECEMBER 31, 2005 YEAR ENDED
(UNAUDITED) JUNE 30, 2005
- ----------------------------------------------------------------------------------------------------------------------------
UBS RMA TAX-FREE FUND
FROM OPERATIONS:
Net investment income $ 36,341,040 $ 40,517,259
Net realized losses from investment activities (345) (175)
Net increase in net assets resulting from operations 36,340,695 40,517,084
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (36,341,040) (40,517,259)
Net increase (decrease) in net assets from capital share transactions (27,105,579) 470,677,868
Net increase (decrease) in net assets (27,105,924) 470,677,693
NET ASSETS:
Beginning of period 3,406,613,999 2,935,936,306
End of period $ 3,379,508,075 $ 3,406,613,999
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income $ -- $ --
- ---------------------------------------------------------------------------------------------------------------------------
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
FROM OPERATIONS:
Net investment income $ 8,610,444 $ 9,305,862
Net realized loss from investment activities -- (390)
Net increase in net assets resulting from operations 8,610,444 9,305,472
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (8,610,444) (9,305,862)
Net increase in net assets from beneficial interest transactions 125,353,634 69,629,637
Net increase in net assets 125,353,634 69,629,247
NET ASSETS:
Beginning of period 808,762,249 739,133,002
End of period $ 934,115,883 $ 808,762,249
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income $ -- $ --
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements
53
<Page>
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE
DECEMBER 31, 2005 YEAR ENDED
(UNAUDITED) JUNE 30, 2005
- ----------------------------------------------------------------------------------------------------------------------------
UBS RMA NEW YORK MUNICIPAL MONEY FUND FROM OPERATIONS:
Net investment income $ 5,979,017 $ 6,642,585
Net realized gain from investment activities -- 20
Net increase in net assets resulting from operations 5,979,017 6,642,605
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (5,979,017) (6,642,585)
Net increase in net assets from beneficial interest transactions 30,098,063 33,675,671
Net increase in net assets 30,098,063 33,675,691
NET ASSETS:
Beginning of period 596,071,277 562,395,586
End of period $ 626,169,340 $ 596,071,277
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income $ -- $ --
- ---------------------------------------------------------------------------------------------------------------------------
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
FROM OPERATIONS:
Net investment income $ 1,237,052 $ 1,407,171
Net realized loss from investment activities -- (657)
Net increase in net assets resulting from operations 1,237,052 1,406,514
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (1,237,052) (1,407,171)
Net increase (decrease) in net assets from beneficial interest transactions 17,738,251 (3,266,054)
Net increase (decrease) in net assets 17,738,251 (3,266,711)
NET ASSETS:
Beginning of period 134,173,578 137,440,289
End of period $ 151,911,829 $ 134,173,578
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income $ -- $ --
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements
54
<Page>
UBS RMA
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
UBS RMA Money Fund Inc. (the "Corporation") and UBS RMA Tax-Free Fund Inc. ("RMA
Tax-Free") were organized under the laws of Maryland on July 2, 1982 and are
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended, as open-end management investment companies.
RMA Tax-Free is a diversified mutual fund and the Corporation is a series mutual
fund with three portfolios, each of which are diversified series: UBS RMA Money
Market Portfolio ("Money Market Portfolio"), UBS RMA U.S. Government Portfolio
("U.S. Government Portfolio") and UBS Retirement Money Fund. The financial
statements of UBS Retirement Money Fund are not included herein.
UBS Managed Municipal Trust ("Managed Municipal Trust") and UBS Municipal Money
Market Series ("Municipal Money Market Series") were organized under
Massachusetts law by Declarations of Trust dated November 21, 1986 and September
14, 1990, respectively, and are registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, as open-end
management investment companies. Managed Municipal Trust currently offers two
non-diversified series: UBS RMA California Municipal Money Fund ("RMA
California") and UBS RMA New York Municipal Money Fund ("RMA New York").
Municipal Money Market Series currently offers one non-diversified series: UBS
RMA New Jersey Municipal Money Fund ("RMA New Jersey", and when referred
together with Money Market Portfolio, U.S. Government Portfolio, RMA Tax-Free,
RMA California and RMA New York, collectively, the "Funds").
In the normal course of business the Funds may enter into contracts that contain
a variety of representations or that provide indemnification for certain
liabilities. The Funds' maximum exposure under these arrangements is unknown, as
this would involve future claims that may be made against the Funds that have
not yet occurred. However, the Funds have not had prior claims or losses
pursuant to these contracts and expect the risk of loss to be remote.
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires the Funds' management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates. The
following is a summary of significant accounting policies:
VALUATION AND ACCOUNTING FOR INVESTMENTS AND INVESTMENT INCOME--Investments are
valued at amortized cost, unless a Fund's Board of Directors/Trustees (the
"Board") determines that this does not represent fair value. Periodic review and
monitoring of the valuation of securities held by the Funds is performed in an
effort to ensure that amortized cost approximates market value. Investment
transactions are recorded on the trade date. Realized gains and losses from
investment transactions are calculated using the identified cost method.
Interest income is recorded on an accrual basis. Premiums are amortized and
discounts are accreted as adjustments to interest income and the identified cost
of investments.
55
<Page>
REPURCHASE AGREEMENTS--The Money Market Portfolio and the U.S. Government
Portfolio may purchase securities or other obligations from a bank or securities
dealer (or its affiliate), subject to the seller's agreement to repurchase them
at an agreed upon date (or upon demand) and price. The Money Market Portfolio
and the U.S. Government Portfolio maintain custody of the underlying obligations
prior to their repurchase, either through their regular custodian or through a
special "tri-party" custodian or sub-custodian that maintains a separate account
for both the Money Market Portfolio and/or the U.S. Government Portfolio and
their counterparty. The underlying collateral is valued daily to ensure that the
value, including accrued interest, is at least equal to the repurchase price. In
the event of default of the obligation to repurchase, the Money Market Portfolio
and the U.S. Government Portfolio generally have the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. Repurchase
agreements involving obligations other than U.S government securities (such as
commercial paper, corporate bonds and mortgage loans) may be subject to special
risks and may not have the benefit of certain protections in the event of
counterparty insolvency. If the seller (or seller's guarantor, if any) becomes
insolvent, the Money Market Portfolio and the U.S. Government Portfolio may
suffer delays, costs and possible losses in connection with the disposition or
retention of the collateral. Under certain circumstances, in the event of
default or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral may be subject to legal proceedings. The Money
Market Portfolio and the U.S. Government Portfolio may participate in joint
repurchase agreement transactions with other funds managed, advised or
sub-advised by UBS Global Asset Management (US) Inc. ("UBS Global AM"). UBS
Global AM is an indirect wholly owned asset management subsidiary of UBS AG, an
internationally diversified organization with headquarters in Zurich and Basel,
Switzerland and operations in many areas of the financial services industry.
DIVIDENDS AND DISTRIBUTIONS--Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions is
determined in accordance with federal income tax regulations, which may differ
from U.S. generally accepted accounting principles. These "book/tax" differences
are either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification.
CONCENTRATION OF RISK
The ability of the issuers of the debt securities held by the Funds to meet
their obligations may be affected by economic developments, including those
particular to a specific industry, country or region.
Additionally, RMA California, RMA New York and RMA New Jersey follow an
investment policy of investing primarily in municipal obligations of one state.
Economic changes affecting each state and certain of its public bodies and
municipalities may affect the ability of issuers within each state to pay
interest on, or repay principal of, municipal obligations held by each of those
Funds.
56
<Page>
INVESTMENT ADVISOR AND ADMINISTRATOR
Each Fund's Board has approved an investment advisory and administration
contract ("Advisory Contract") for each Fund with UBS Financial Services Inc.,
an indirect wholly owned subsidiary of UBS AG, under which UBS Financial
Services Inc. serves as investment advisor and administrator of the Funds. In
accordance with the Advisory Contract, each Fund pays UBS Financial Services
Inc. an investment advisory and administration fee, which is accrued daily and
paid monthly, in accordance with the following schedules:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS ANNUAL RATE
- --------------------------------------------------------------------------
MONEY MARKET PORTFOLIO:
All 0.50%+
</Table>
+ UBS Financial Services Inc. has agreed to waive portions of its investment
advisory and administration fee for the Money Market Portfolio (the
"Portfolio") so that the fee rate is reduced to the following: $0 to $1.0
billion--0.50%; in excess of $1.0 billion up to $1.5 billion--0.44%; and over
$1.5 billion--0.36%. UBS Financial Services Inc. has further agreed to cap
the Portfolio's aggregate management and shareholder services fees (paid
pursuant to the Portfolio's Shareholder Services Plan) so that the total of
these does not exceed 0.50% of the Portfolio's average daily net assets. This
cap results in an effective investment advisory and administration fee rate
not to exceed 0.375% of the Portfolio's average daily net assets. (UBS
Financial Services Inc. is waiving a portion of its management fees to offset
the shareholder services fees, and this waiver continues for as long as the
Portfolio's Shareholder Services Plan remains in effect). Accordingly, for
the six months ended December 31, 2005, UBS Financial Services Inc. waived
$6,620,457 of its investment advisory and administration fees from the
Portfolio. At December 31, 2005, UBS Financial Services Inc. owed the
Portfolio $1,108,524 for fee waivers.
<Table>
<Caption>
AVERAGE DAILY NET ASSETS ANNUAL RATE
- --------------------------------------------------------------------------------
U.S. GOVERNMENT PORTFOLIO, RMA CALIFORNIA, RMA NEW YORK AND RMA NEW JERSEY:
Up to $300 million 0.50%
In excess of $300 million up to $750 million 0.44%
Over $750 million 0.36%
RMA TAX-FREE:
Up to $1.0 billion 0.50%
In excess of $1.0 billion up to $1.5 billion 0.44%
Over $1.5 billion 0.36%
</Table>
At December 31, 2005, the Funds owed UBS Financial Services Inc. for investment
advisory and administration fees as follows:
<Table>
Money Market Portfolio $ 4,434,097
U.S. Government Portfolio 390,870
RMA Tax-Free 1,239,096
RMA California 340,553
RMA New York 237,864
RMA New Jersey 63,058
</Table>
UBS Global AM serves as sub-advisor and sub-administrator to the Funds pursuant
to sub-advisory and sub-administration contracts between UBS Financial Services
Inc. and UBS Global AM (each a "Sub-Advisory Contract"). In accordance with each
Sub-Advisory Contract, UBS Financial Services Inc. (not the Funds) pays UBS
Global AM a fee, accrued daily and paid monthly, at an annual rate of 0.08% of
the respective Fund's average daily net assets.
57
<Page>
ADDITIONAL INFORMATION REGARDING COMPENSATION TO AFFILIATE OF A BOARD MEMBER
Effective March 1, 2005, Professor Meyer Feldberg accepted the position of
senior advisor to Morgan Stanley, resulting in him becoming an interested board
member of the Funds. The Funds have been informed that Professor Feldberg's role
at Morgan Stanley does not involve matters directly affecting any UBS funds.
Fund transactions are executed through Morgan Stanley based on that firm's
ability to provide best execution of the transactions. During the six months
ended December 31, 2005, the Funds purchased and sold certain securities (e.g.,
fixed income securities) in principal trades with Morgan Stanley having
aggregate values as follows:
<Table>
Money Market Portfolio $ 3,727,757,376
U.S. Government Portfolio 19,895,000,000
RMA Tax-Free 1,037,968,700
RMA California 319,440,000
RMA New York 81,500,000
RMA New Jersey 82,358,500
</Table>
Morgan Stanley received compensation in connection with these trades, which may
have been in the form of a "mark-up" or "mark-down" of the price of the
securities, a fee from the issuer for maintaining a commercial paper program, or
some other form of compensation. Although the precise amount of this
compensation is not generally known by UBS Global AM, UBS Global AM believes
that under normal circumstances it represents a small portion of the total value
of the transactions.
SHAREHOLDER SERVICE PLANS
UBS Global AM is the principal underwriter of each Fund's shares and has
appointed UBS Financial Services Inc. as a dealer for the sale of the Funds'
shares. Under shareholder service plans, Money Market Portfolio, U.S. Government
Portfolio, RMA Tax-Free, RMA California and RMA New York pay UBS Global AM a
monthly service fee at an annual rate of up to 0.15% of average daily net
assets, and RMA New Jersey is authorized to pay at the annual rate of up to
0.12% of average daily net assets, for providing certain shareholder services.
Currently, UBS Global AM is compensated for providing such services at the
annual rate of 0.125% for each of those Funds except for RMA New Jersey, which
pays at the annual rate of 0.12%. At December 31, 2005, the Funds owed UBS
Global AM for such service fees as follows:
<Table>
Money Market Portfolio $ 1,108,524
U.S. Government Portfolio 112,716
RMA Tax-Free 377,159
RMA California 95,245
RMA New York 63,232
RMA New Jersey 15,134
</Table>
58
<Page>
TRANSFER AGENCY RELATED SERVICES FEES
UBS Financial Services Inc. provides transfer agency related services to the
Funds pursuant to a delegation of authority from PFPC Inc. ("PFPC"), the Funds'
transfer agent, and is compensated for these services by PFPC, not the Funds.
For the six months ended December 31, 2005, UBS Financial Services Inc. received
from PFPC, not the Funds, total transfer agency related services fees as
follows:
<Table>
Money Market Portfolio $ 1,997,811
U.S. Government Portfolio 66,537
RMA Tax-Free 298,810
RMA California 63,722
RMA New York 57,549
RMA New Jersey 19,022
</Table>
SECURITIES LENDING
Each Fund may lend securities up to 33 1/3% of its total assets to qualified
broker-dealers or institutional investors. The loans are secured at all times by
cash, U.S. government securities or irrevocable letters of credit in an amount
at least equal to the market value of the securities loaned, plus accrued
interest and dividends, determined on a daily basis and adjusted accordingly.
Each Fund will regain ownership of loaned securities to exercise certain
beneficial rights; however, each Fund may bear the risk of delay in recovery of,
or even loss of rights in, the securities loaned should the borrower fail
financially. Each Fund receives compensation for lending its securities from
interest or dividends earned on the cash, U.S. government securities or
irrevocable letters of credit held as collateral, net of fee rebates paid to the
borrower plus reasonable administrative and custody fees. UBS Financial Services
Inc. and other affiliated broker-dealers have been approved as borrowers under
the Funds' securities lending program. UBS Securities LLC is the lending agent
for each Fund. For the six months ended December 31, 2005, UBS Securities LLC
earned $47,917 in compensation from the U.S. Government Portfolio as the Fund's
lending agent. At December 31, 2005, the U.S. Government Portfolio owed UBS
Securities LLC $5,336 in compensation as the Fund's lending agent. At December
31, 2005, the U.S. Government Portfolio had securities on loan having a market
value of $291,703,431. The U.S. Government Portfolio's custodian held U.S.
Government agency securities having an aggregate value of $298,254,615 as
collateral for portfolio securities loaned as follows:
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------
$ 95,678 Federal Home Loan Mortgage Corp. 06/15/11 6.000% $ 101,657,875
116,839 Federal National Mortgage Association 09/15/09 6.625 126,618,775
</Table>
59
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ----------------------------------------------------------------------------------------------------------
$ 47,100 Federal National Mortgage Association 03/15/12 6.125% $ 51,326,989
18,400 Federal National Mortgage Association 09/01/15 5.625 18,650,976
- ----------------------------------------------------------------------------------------------------------
$ 298,254,615
- ----------------------------------------------------------------------------------------------------------
</Table>
Money Market Portfolio, RMA Tax-Free, RMA California, RMA New York and RMA New
Jersey did not loan any securities during the six months ended December 31,
2005.
BANK LINE OF CREDIT
RMA Tax-Free participates with certain other funds managed, advised or
sub-advised by UBS Global AM in a $100 million committed credit facility with
State Street Bank and Trust Company ("Committed Credit Facility"), to be
utilized for temporary financing until the settlement of sales or purchases of
portfolio securities, the repurchase or redemption of shares of RMA Tax-Free at
the request of shareholders and other temporary or emergency purposes. Under the
Committed Credit Facility arrangement, RMA Tax-Free has agreed to pay commitment
fees, pro rata, based on the relative asset size of the funds in the Committed
Credit Facility. Interest will be charged to RMA Tax-Free at the overnight
federal funds rate in effect at the time of borrowings, plus 0.50%. For the six
months ended December 31, 2005, RMA Tax-Free had an average daily amount of
borrowing of $54,789,555 for 4 days with a related weighted average annualized
interest rate of 4.36%, which resulted in $26,543 of interest expense.
OTHER LIABILITIES AND COMPONENTS OF NET ASSETS
At December 31, 2005, the Funds had the following liabilities outstanding:
<Table>
<Caption>
PAYABLE FOR OTHER
DIVIDENDS INVESTMENTS LOAN ACCRUED
PAYABLE PURCHASED PAYABLE EXPENSES*
- -----------------------------------------------------------------------------------------------
Money Market Portfolio $ 9,477,738 -- -- $ 2,352,468
U.S. Government Portfolio 859,001 $ 49,920,278 -- 290,740
RMA Tax-Free 2,333,260 57,762,480 $ 49,199,645 385,700
RMA California 599,777 -- -- 117,594
RMA New York 404,902 12,001,144 -- 101,961
RMA New Jersey 87,335 -- -- 43,635
</Table>
* Excludes investment advisory and administration fees and service fees.
60
<Page>
At December 31, 2005, the components of net assets for each of the Funds were as
follows:
<Table>
<Caption>
ACCUMULATED
ACCUMULATED NET REALIZED TOTAL
PAID IN CAPITAL GAIN (LOSS) NET ASSETS
- -------------------------------------------------------------------------------------------------------
Money Market Portfolio $ 10,430,235,862 $ 192,416 $ 10,430,428,278
U.S. Government Portfolio 1,052,493,097 (160,429) 1,052,332,668
RMA Tax-Free 3,379,506,489 1,586 3,379,508,075
RMA California 934,092,718 23,165 934,115,883
RMA New York 626,140,500 28,840 626,169,340
RMA New Jersey 151,908,418 3,411 151,911,829
</Table>
FEDERAL TAX STATUS
Each Fund intends to distribute all or substantially all of its income and to
comply with the other requirements of the Internal Revenue Code applicable to
regulated investment companies. Accordingly, no provision for federal income
taxes is required. In addition, by distributing during each calendar year
substantially all of their net investment income, net realized capital gains and
certain other amounts, if any, the Funds intend not to be subject to a federal
excise tax.
The tax character of distributions paid to shareholders by the Money Market
Portfolio and U.S. Government Portfolio during the six months ended December 31,
2005 and the fiscal year ended June 30, 2005 was ordinary income. The tax
character of all distributions paid to shareholders by RMA Tax-Free, RMA
California, RMA New York and RMA New Jersey during the six months ended December
31, 2005 and the fiscal year ended June 30, 2005 was tax-exempt income.
The components of accumulated earnings (deficit) on a tax basis for the current
fiscal year will be determined after the Funds' fiscal year ending June 30,
2006.
At June 30, 2005, the following Funds had net capital loss carryforwards
available as reductions, to the extent provided in the regulations, of any
future net realized capital gains. These losses expire as follows:
<Table>
<Caption>
MONEY U.S.
FISCAL YEAR MARKET GOVERNMENT RMA RMA RMA
ENDING PORTFOLIO PORTFOLIO TAX-FREE NEW YORK NEW JERSEY
- ------------------------------------------------------------------------
2011 -- $ 66,251 -- -- $ 30
2012 -- 54,167 -- -- --
2013 $ 1,703,123 34,572 $ 175 $ 2,330 253
- ------------------------------------------------------------------------
$ 1,703,123 $ 154,990 $ 175 $ 2,330 $ 283
- ------------------------------------------------------------------------
</Table>
61
<Page>
In accordance with U.S. Treasury regulations, the following Funds have elected
to defer realized capital losses arising after October 31, 2004. Such losses are
treated for tax purposes as arising on July 1, 2005.
<Table>
<Caption>
CAPITAL
LOSSES
- --------------------------------------
U.S. Government $ 104,706
RMA California 390
RMA New Jersey 657
</Table>
CAPITAL SHARE TRANSACTIONS
There are 60 billion $0.001 par value shares of common stock authorized for the
Money Market Portfolio, 10 billion $0.001 par value shares of common stock
authorized for the U.S. Government Portfolio and 20 billion $0.001 par value
shares of common stock authorized for RMA Tax-Free. Transactions in capital
shares, at $1.00 per share, were as follows:
<Table>
<Caption>
FOR THE SIX MONTHS ENDED MONEY MARKET U.S. GOVERNMENT RMA
DECEMBER 31, 2005: PORTFOLIO PORTFOLIO TAX-FREE
- ------------------------------------------------------------------------------------------------------------
Shares sold 60,716,642,956 4,092,988,393 16,294,553,787
Shares repurchased (60,869,590,233) (4,167,834,309) (16,355,824,999)
Dividends reinvested 157,372,377 15,464,562 34,165,633
- ------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 4,425,100 (59,381,354) (27,105,579)
- ------------------------------------------------------------------------------------------------------------
<Caption>
FOR THE YEAR ENDED MONEY MARKET U.S. GOVERNMENT RMA
JUNE 30, 2005: PORTFOLIO PORTFOLIO TAX-FREE
- ------------------------------------------------------------------------------------------------------------
Shares sold 107,179,988,213 7,721,452,084 26,082,741,027
Shares repurchased (109,361,306,575) (7,877,416,751) (25,650,628,491)
Dividends reinvested 176,761,432 16,866,119 38,565,332
- ------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (2,004,556,930) (139,098,548) 470,677,868
- ------------------------------------------------------------------------------------------------------------
</Table>
62
<Page>
BENEFICIAL INTEREST
There is an unlimited amount of $0.001 par value shares of beneficial interest
authorized for RMA California, RMA New York and RMA New Jersey. Transactions in
shares of beneficial interest, at $1.00 per share, were as follows:
<Table>
<Caption>
FOR THE SIX MONTHS ENDED
DECEMBER 31, 2005: RMA CALIFORNIA RMA NEW YORK RMA NEW JERSEY
- ----------------------------------------------------------------------------------------------------------
Shares sold 5,315,299,200 3,275,418,373 857,225,063
Shares repurchased (5,197,957,828) (3,250,891,609) (840,632,945)
Dividends reinvested 8,012,262 5,571,299 1,146,133
- ----------------------------------------------------------------------------------------------------------
Net increase in shares outstanding 125,353,634 30,098,063 17,738,251
- ----------------------------------------------------------------------------------------------------------
<Caption>
FOR THE YEAR ENDED
JUNE 30, 2005: RMA CALIFORNIA RMA NEW YORK RMA NEW JERSEY
- ----------------------------------------------------------------------------------------------------------
Shares sold 8,313,721,208 5,766,075,108 1,539,954,219
Shares repurchased (8,252,923,028) (5,738,665,436) (1,544,542,372)
Dividends reinvested 8,831,457 6,265,999 1,322,099
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 69,629,637 33,675,671 (3,266,054)
- ----------------------------------------------------------------------------------------------------------
</Table>
63
<Page>
UBS RMA MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
Selected data for a share of common stock outstanding throughout each period is
presented below:
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED JUNE 30,
DECEMBER 31, 2005 -------------------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.016 0.016 0.005 0.010 0.022 0.055
Dividends from net investment
income (0.016) (0.016) (0.005) (0.010) (0.022) (0.055)
Distributions from net realized
gains from investment activities -- (0.000)@ (0.000)@ -- -- --
Total dividends and distributions (0.016) (0.016) (0.005) (0.010) (0.022) (0.055)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 1.60% 1.65% 0.51% 1.02% 2.25% 5.61%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 10,430,428 $ 10,425,878 $ 12,434,286 $ 21,832,875 $ 22,768,982 $ 22,609,036
Expenses to average net assets,
net of fee waivers by advisor 0.59%* 0.58%(2) 0.60% 0.61% 0.60% 0.59%
Expenses to average net assets,
before fee waivers by advisor 0.71%* 0.58% 0.60% 0.61% 0.60% 0.59%
Net investment income to average
net assets, net of fee waivers
by advisor 3.15%* 1.59%(2) 0.50% 1.02% 2.21% 5.42%
Net investment income to average
net assets, before fee waivers
by advisor 3.03%* 1.59% 0.50% 1.02% 2.21% 5.42%
</Table>
* Annualized.
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each period reported, reinvestment of all dividends and other
distributions, if any, at net asset value on the payable dates, and a sale
at net asset value on the last day of each period reported. Total
investment return for the period of less than one year has not been
annualized. Returns do not reflect the deduction of taxes that a
shareholder would pay on Portfolio distributions.
(2) During the period August 31, 2004 through June 30, 2005, UBS Financial
Services Inc. waived a portion of its advisory and administration fees. The
ratios excluding the waiver are the same since the fee waiver represents
less than 0.005%.
@ Amount of distribution paid represents less than $0.0005 per share.
64
<Page>
UBS RMA U.S. GOVERNMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
Selected data for a share of common stock outstanding throughout each period is
presented below:
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED JUNE 30,
DECEMBER 31, 2005 ---------------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.015 0.015 0.005 0.010 0.021 0.052
Dividends from net investment
income (0.015) (0.015) (0.005) (0.010) (0.021) (0.052)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 1.50% 1.50% 0.48% 1.00% 2.12% 5.31%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 1,052,333 $ 1,111,698 $ 1,250,917 $ 2,510,453 $ 2,356,829 $ 2,000,303
Expenses to average net assets 0.61%* 0.61% 0.58% 0.56% 0.57% 0.57%
Net investment income to average
net assets 2.95%* 1.49% 0.48% 1.00% 2.06% 5.15%
</Table>
* Annualized.
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each period reported, reinvestment of all dividends and other
distributions, if any, at net asset value on the payable dates, and a sale
at net asset value on the last day of each period reported. Total
investment return for the period of less than one year has not been
annualized. Returns do not reflect the deduction of taxes that a
shareholder would pay on Portfolio distributions.
65
<Page>
UBS RMA TAX-FREE FUND INC.
FINANCIAL HIGHLIGHTS
Selected data for a share of common stock outstanding throughout each period is
presented below:
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED JUNE 30,
DECEMBER 31, 2005 ---------------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.010 0.012 0.004 0.007 0.012 0.032
Dividends from net investment
income (0.010) (0.012) (0.004) (0.007) (0.012) (0.032)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 1.04% 1.23% 0.38% 0.67% 1.24% 3.28%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 3,379,508 $ 3,406,614 $ 2,935,936 $ 3,238,850 $ 3,255,520 $ 3,286,150
Expenses to average net assets 0.59%* 0.59% 0.60% 0.63% 0.60% 0.59%
Net investment income to average
net assets 2.05%* 1.23% 0.38% 0.67% 1.23% 3.20%
</Table>
* Annualized.
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each period reported, reinvestment of all dividends and other
distributions, if any, at net asset value on the payable dates, and a sale
at net asset value on the last day of each period reported. Total
investment return for the period of less than one year has not been
annualized. Returns do not reflect the deduction of taxes that a
shareholder could pay on Fund distributions.
66
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED JUNE 30,
DECEMBER 31, 2005 ------------------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.010 0.011 0.003 0.006 0.011 0.027
Dividends from net investment
income (0.010) (0.011) (0.003) (0.006) (0.011) (0.027)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 0.99% 1.15% 0.31% 0.60% 1.10% 2.75%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 934,116 $ 808,762 $ 739,133 $ 767,006 $ 753,664 $ 759,961
Expenses to average net assets,
net of fee waivers by advisor 0.63%* 0.64% 0.65%(2) 0.66% 0.65% 0.66%
Net investment income to average
net assets, net of fee waivers
by advisor 1.95%* 1.16% 0.31%(2) 0.60% 1.09% 2.70%
</Table>
* Annualized.
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each period reported, reinvestment of all dividends and other
distributions, if any, at net asset value on the payable dates, and a sale
at net asset value on the last day of each period reported. Total
investment return for the period of less than one year has not been
annualized. Returns do not reflect the deduction of taxes that a
shareholder could pay on Fund distributions.
(2) During the year ended June 30, 2004, UBS Financial Service Inc. waived a
portion of its advisory and administration fees. The ratios excluding the
waiver are the same since the fee waiver represents less than 0.005%.
67
<Page>
UBS RMA NEW YORK MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED JUNE 30,
DECEMBER 31, 2005 ------------------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.010 0.011 0.003 0.006 0.011 0.030
Dividends from net investment
income (0.010) (0.011) (0.003) (0.006) (0.011) (0.030)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 0.98% 1.13% 0.29% 0.62% 1.08% 3.04%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 626,169 $ 596,071 $ 562,396 $ 588,851 $ 559,341 $ 574,490
Expenses to average net assets, net
of fee waivers by advisor 0.67%* 0.67% 0.67%(2) 0.67% 0.68% 0.69%
Net investment income to average
net assets, net of fee waivers
by advisor 1.93%* 1.12% 0.29%(2) 0.62% 1.07% 2.95%
</Table>
* Annualized.
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each period reported, reinvestment of all dividends and other
distributions, if any, at net asset value on the payable dates, and a sale
at net asset value on the last day of each period reported. Total
investment return for the period of less than one year has not been
annualized. Returns do not reflect the deduction of taxes that a
shareholder could pay on Fund distributions.
(2) During the year ended June 30, 2004, UBS Financial Services Inc. waived a
portion of its advisory and administration fees. The ratios excluding the
waiver are the same since the fee waiver represents less than 0.005%.
68
<Page>
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED JUNE 30,
DECEMBER 31, 2005 ------------------------------------------------------------------------
(UNAUDITED) 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.009 0.010 0.002 0.005 0.010 0.028
Dividends from net investment
income (0.009) (0.010) (0.002) (0.005) (0.010) (0.028)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 0.91% 1.05% 0.16% 0.51% 0.97% 2.86%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 151,912 $ 134,174 $ 137,440 $ 161,854 $ 128,500 $ 102,162
Expenses to average net assets, net
of fee waivers by advisor 0.78%* 0.79% 0.76%(2) 0.73% 0.77% 0.79%
Net investment income to average
net assets, net of fee waivers
by advisor 1.79%* 1.02% 0.15%(2) 0.50% 0.94% 2.77%
</Table>
* Annualized.
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each period reported, reinvestment of all dividends and other
distributions, if any, at net asset value on the payable dates, and a sale
at net asset value on the last day of each period reported. Total
investment return for the period of less than one year has not been
annualized. Returns do not reflect the deduction of taxes that a
shareholder could pay on Fund distributions.
(2) During the year ended June 30, 2004, UBS Financial Services Inc. waived a
portion of its advisory and administration fees. The ratios excluding the
waiver are the same since the fee waiver represents less than 0.01%.
69
<Page>
UBS RMA
GENERAL INFORMATION (UNAUDITED)
SHAREHOLDER INFORMATION--UBS RMA MONEY MARKET PORTFOLIO & UBS RMA U.S.
GOVERNMENT PORTFOLIO
A special meeting of shareholders of UBS RMA Money Fund, Inc. (the
"Corporation") was held on December 21, 2005. UBS RMA Money Market Portfolio and
UBS RMA U.S. Government Portfolio (each a "Fund") are two of the three
portfolios comprising the Corporation. Shareholders of all three portfolios of
the Corporation, including the two Funds, voted together as a single class in
the election of board members.
At the meeting, Richard Q. Armstrong, David J. Beaubien, Alan S. Bernikow,
Richard R. Burt, Meyer Feldberg, Bernard H. Garil, Heather Richardson Higgins
and William D. White were elected to serve as directors for an indefinite term
until their successors are duly elected and qualified or until they retire,
resign or are earlier removed. The shares were voted as indicated below:
<Table>
<Caption>
TO VOTE FOR OR WITHHOLD
IN THE ELECTION OF: SHARES VOTED FOR SHARES WITHHOLD AUTHORITY
- -------------------------------------------------------------------------------
Richard Q. Armstrong 12,926,813,486.599 382,262,700.021
David J. Beaubien 12,894,932,539.714 414,143,646.906
Alan S. Bernikow 12,917,145,567.570 391,930,619.050
Richard R. Burt 12,925,738,374.086 383,337,812.534
Meyer Feldberg 12,914,466,848.362 394,609,338.258
Bernard H. Garil 12,940,774,429.761 368,301,756.859
Heather Richardson Higgins 12,921,490,612.943 387,585,573.677
William D. White 12,909,060,097.843 400,016,088.777
</Table>
To the best of the Corporation's knowledge, there were no "broker non-votes."
(Broker non-votes are shares held in street name for which the broker indicates
that instructions have not been received from the beneficial owners or other
persons entitled to vote and for which the broker does not have discretionary
voting authority.) Mr. White retired from the board at the end of January 2006.
70
<Page>
SHAREHOLDER INFORMATION--UBS RMA TAX-FREE FUND INC.
A special meeting of shareholders of UBS RMA Tax-Free Fund Inc. (the "Fund") was
held on December 21, 2005.
At the meeting, Richard Q. Armstrong, David J. Beaubien, Alan S. Bernikow,
Richard R. Burt, Meyer Feldberg, Bernard H. Garil, Heather Richardson Higgins
and William D. White were elected to serve as directors for an indefinite term
until their successors are duly elected and qualified or until they retire,
resign or are earlier removed. The shares were voted as indicated below:
<Table>
<Caption>
TO VOTE FOR OR WITHHOLD
IN THE ELECTION OF: SHARES VOTED FOR SHARES WITHHOLD AUTHORITY
- -------------------------------------------------------------------------------
Richard Q. Armstrong 3,296,130,098.843 100,551,682.707
David J. Beaubien 3,288,769,625.508 107,912,156.042
Alan S. Bernikow 3,248,165,528.429 148,516,253.121
Richard R. Burt 3,249,371,377.920 147,310,403.630
Meyer Feldberg 3,242,975,285.117 153,706,496.433
Bernard H. Garil 3,305,576,298.984 91,105,482.566
Heather Richardson Higgins 3,302,454,578.144 94,227,203.406
William D. White 3,287,794,472.769 108,887,308.781
</Table>
To the best of the Fund's knowledge, there were no "broker non-votes." (Broker
non-votes are shares held in street name for which the broker indicates that
instructions have not been received from the beneficial owners or other persons
entitled to vote and for which the broker does not have discretionary voting
authority.) Mr. White retired from the board at the end of January 2006.
71
<Page>
SHAREHOLDER INFORMATION--UBS RMA CALIFORNIA MUNICIPAL MONEY FUND & UBS RMA NEW
YORK MUNICIPAL MONEY FUND
A special meeting of shareholders of UBS Managed Municipal Trust (the "Trust")
was held on December 21, 2005. UBS RMA California Municipal Money Fund and UBS
RMA New York Municipal Money Fund (each a "Fund") are the two portfolios
comprising the Trust. Shareholders of both Funds voted together as a single
class in the election of board members.
At the meeting, Richard Q. Armstrong, David J. Beaubien, Alan S. Bernikow,
Richard R. Burt, Meyer Feldberg, Bernard H. Garil, Heather Richardson Higgins
and William D. White were elected to serve as trustees for an indefinite term
until their successors are duly elected and qualified or until they retire,
resign or are earlier removed. The shares were voted as indicated below:
<Table>
<Caption>
TO VOTE FOR OR WITHHOLD
IN THE ELECTION OF: SHARES VOTED FOR SHARES WITHHOLD AUTHORITY
- -------------------------------------------------------------------------------
Richard Q. Armstrong 1,472,026,716.832 34,762,122.338
David J. Beaubien 1,471,924,272.505 34,864,566.665
Alan S. Bernikow 1,434,298,733.657 72,490,105.513
Richard R. Burt 1,434,378,546.904 72,410,292.266
Meyer Feldberg 1,472,785,417.651 34,003,421.519
Bernard H. Garil 1,472,926,238.750 33,862,600.420
Heather Richardson Higgins 1,471,987,815.119 34,801,024.051
William D. White 1,470,594,856.306 36,193,982.864
</Table>
To the best of the Trust's knowledge, there were no "broker non-votes." (Broker
non-votes are shares held in street name for which the broker indicates that
instructions have not been received from the beneficial owners or other persons
entitled to vote and for which the broker does not have discretionary voting
authority.) Mr. White retired from the board at the end of January 2006.
72
<Page>
SHAREHOLDER INFORMATION--UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
A special meeting of shareholders of UBS Municipal Money Market Series (the
"Trust") was held on December 21, 2005. UBS RMA New Jersey Municipal Money Fund
(the "Fund") is the sole portfolio comprising the Trust. Shareholders of the
Fund voted in the election of board members.
At the meeting, Richard Q. Armstrong, David J. Beaubien, Alan S. Bernikow,
Richard R. Burt, Meyer Feldberg, Bernard H. Garil, Heather Richardson Higgins
and William D. White were elected to serve as trustees for an indefinite term
until their successors are duly elected and qualified or until they retire,
resign or are earlier removed. The shares were voted as indicated below:
<Table>
<Caption>
TO VOTE FOR OR WITHHOLD
IN THE ELECTION OF: SHARES VOTED FOR SHARES WITHHOLD AUTHORITY
- -------------------------------------------------------------------------------
Richard Q. Armstrong 138,142,984.034 2,399,766.926
David J. Beaubien 138,726,104.534 1,816,646.426
Alan S. Bernikow 138,733,403.932 1,809,347.028
Richard R. Burt 138,733,403.932 1,809,347.028
Meyer Feldberg 138,733,403.932 1,809,347.028
Bernard H. Garil 138,733,403.932 1,809,347.028
Heather Richardson Higgins 138,726,104.534 1,816,646.426
William D. White 138,733,403.932 1,809,347.028
</Table>
To the best of the Trust's knowledge, there were no "broker non-votes." (Broker
non-votes are shares held in street name for which the broker indicates that
instructions have not been received from the beneficial owners or other persons
entitled to vote and for which the broker does not have discretionary voting
authority.) Mr. White retired from the board at the end of January 2006.
QUARTERLY FORM N-Q PORTFOLIO SCHEDULES
The Funds will file their complete schedules 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 Funds' Forms N-Q are available on the SEC's
Web site at http://www.sec.gov. The Funds' Forms N-Q may be reviewed and copied
at the SEC's Public Reference Room in Washington, D.C. Information on the
operation of the SEC's Public Reference Room may be obtained by calling
1-800-SEC 0330. Additionally, you may obtain copies of Forms N-Q from the Funds
upon request by calling 1-800-647 1568.
73
<Page>
UBS RMA Money Market Portfolio
Board Approval of the Advisory and Administration Contract and Sub-Advisory and
Sub-Administration Contract (unaudited)
BACKGROUND. At a meeting of the board of UBS RMA Money Fund, Inc. (the
"Corporation") on July 20, 2005, the board members, including the Corporation's
Independent Directors (I.E., those directors who are not "interested persons" of
the Corporation as that term is defined in the Investment Company Act of 1940,
as amended), considered and approved the continuance of the Advisory and
Administration Contract between the Corporation and UBS Financial Services Inc.
with respect to UBS RMA Money Market Portfolio (the "Fund") ("Advisory and
Administration Contract") and the Sub-Advisory and Sub-Administration Contract
between UBS Financial Services Inc. and UBS Global Asset Management (US) Inc.
("UBS Global AM") with respect to the Fund ("Sub-Advisory and Sub-Administration
Contract"). In preparing for the meeting, the board members had requested and
received information from UBS Financial Services Inc. and UBS Global AM to
assist them, including performance and expense information for other investment
companies with similar investment objectives. The board received and considered
a variety of information concerning UBS Financial Services Inc. and UBS Global
AM, as well as the advisory, sub-advisory, administrative, sub-administrative
and distribution arrangements for the Fund, certain portions of which are
discussed below. The Independent Directors discussed the materials initially
provided by management prior to the scheduled board meeting in a session with
their independent legal counsel and requested, and received from management,
supplemental materials to assist them in their consideration of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract.
Subsequently, the Chairman of the board and independent legal counsel to the
Independent Directors met with management representatives to discuss generally
how information would be provided at the board meeting. The Independent
Directors also met for several hours the evening before the board meeting and
met again after management's presentation was completed to review the disclosure
that had been presented to them at the meeting. At all of these sessions, the
Independent Directors met in session with their independent legal counsel. The
Independent Directors also received a memorandum from their independent legal
counsel discussing the duties of board members in considering approval of
advisory, administration, distribution and service agreements.
BOARD APPROVAL OF ADVISORY AND ADMINISTRATION CONTRACT AND SUB-ADVISORY AND
SUB-ADMINISTRATION CONTRACT. In approving the Advisory and Administration
Contract and the Sub-Advisory and Sub-Administration Contract, the board,
including the Independent Directors, considered the following factors:
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AND ADMINISTRATION
CONTRACT AND THE SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT. The board
received and considered information regarding the nature, extent and quality of
management and sub-advisory services provided to the Fund by UBS Financial
Services Inc. under the Advisory and Administration
74
<Page>
Contract and UBS Global AM under the Sub-Advisory and Sub-Administration
Contract, respectively, during the past year. The board also received a
description of the administrative and other services rendered to the Fund and
its shareholders by management, including in particular UBS Financial Services
Inc.'s oversight of UBS Global AM's provision of sub-advisory and
sub-administrative services. The board noted that information received at
regular meetings throughout the year related to the services rendered by UBS
Financial Services Inc. concerning the management of the Fund's affairs and UBS
Financial Services Inc.'s role in overseeing UBS Global AM's provision of
sub-advisory and sub-administrative services to the Fund and management's role
in coordinating providers of other services to the Fund, including custody,
accounting and transfer agency services. The board's evaluation of the services
provided by UBS Financial Services Inc. and UBS Global AM took into account the
board's knowledge and familiarity gained as board members of funds in the UBS
New York fund complex, including the scope and quality of UBS Financial Services
Inc.'s and UBS Global AM's investment management, sub-advisory and other
capabilities and the quality of management's administrative, sub-administrative
and other services. The board observed that the scope of services provided by
management had expanded over time as a result of regulatory and other
developments, including maintaining and monitoring UBS Global AM's own and the
Fund's expanded compliance programs.
The board had available to it the qualifications, backgrounds and
responsibilities of the Fund's senior personnel and the portfolio management
team primarily responsible for the day-to-day portfolio management of the Fund
and recognized that many of these persons report to the board regularly, some at
every board meeting. The board also considered, based on its knowledge of UBS
Financial Services Inc., UBS Global AM and their affiliates, the financial
resources available to management and its parent organization, UBS AG.
The board reviewed how transactions in Fund assets are effected. While UBS
Global AM's brokerage policies and practices, the standards applied in seeking
best execution, UBS Global AM's policies and practices regarding soft dollars,
the use of a broker affiliated with UBS Financial Services Inc. and UBS Global
AM and the existence of quality controls applicable to brokerage allocation
procedures were available to the board, many of these policies and practices
were deemed not applicable to the management of a money market fund's portfolio.
Management reminded the board that the Fund functions as a sweep vehicle.
In addition, management also reported to the board on, among other things, its
disaster recovery plans and portfolio manager compensation arrangements.
The board concluded that, overall, it was satisfied with the nature, extent and
quality of services provided (and expected to be provided) under the Advisory
and Administration Contract and the Sub-Advisory and Sub-Administration
Contract.
75
<Page>
FUND PERFORMANCE. The board received and considered performance information of
the Fund compared to other funds (the "Performance Universe") selected by
Lipper, Inc. ("Lipper"), an independent provider of investment company data,
over the one-, three-, five-, and 10-year periods ended May 31, 2005. The board
was provided with a description of the methodology Lipper used to determine the
similarity of the Fund with the funds included in the Performance Universe. The
board also noted that it had received information throughout the year at
periodic intervals with respect to the Fund's performance.
The comparative Lipper information showed that the Fund's performance was
consistently in the second quintile for the one-, three-, and ten-year periods
and in the first quintile for the five-year period and, thus, that the Fund had
outperformed most of the funds in its Performance Universe. Based on its review,
the board concluded that the Fund's investment performance was satisfactory.
MANAGEMENT FEES AND EXPENSE RATIOS. The board reviewed and considered the
contractual management fee (the "Contractual Management Fee") (0.50%) payable by
the Fund to UBS Financial Services Inc. in light of the nature, extent and
quality of the management and administrative services provided by UBS Financial
Services Inc. The board also considered that effective July 1, 2005, in
connection with shareholders' recent approval of a shareholder services plan for
the Fund, the Fund's Contractual Management Fee was reduced by a contractual fee
waiver arrangement so that the management fee is not to exceed the following
breakpoint schedule: up to $1.0 billion in average daily net assets--0.50%; in
excess of $1.0 billion and up to $1.5 billion in average daily net
assets--0.44%; over $1.5 billion in average daily net assets--0.36%. The board
noted that UBS Financial Services Inc. had also agreed, in connection with the
shareholders' approval of the plan, that it would cap the Fund's aggregate
management and service fees so that the total of these two expenses would not
exceed the Fund's current Contractual Management Fee. The board also reviewed
and considered the actual fee rate paid by the Fund (the "Actual Management
Fee") (0.371%) which was calculated based upon the comparison period utilized by
Lipper, but then adjusted by Lipper to reflect the imposition of the new fee
waiver discussed above.
Additionally, the board received and considered information comparing the Fund's
Contractual Management Fee, Actual Management Fee and overall expenses with
those of other funds in a group of funds selected and provided by Lipper (the
"Expense Group"). The board also received information on UBS Global Asset
Management (Americas) Inc.'s (an affiliate of both UBS Financial Services Inc.
and UBS Global AM) standard institutional account fees for short-term fixed
income-type accounts. The board noted that these fees were lower than the
Contractual and Actual Management Fees (which Contractual and Actual Management
Fees reflect the aggregate of fees payable to UBS Financial
76
<Page>
Services Inc. and the sub-advisory and sub-administration fees payable to UBS
Global AM), but also noted management's explanation that comparisons with such
accounts may be of limited relevance given the different structures and
regulatory requirements of mutual funds versus such accounts, the differences in
the levels of services required by mutual funds and such accounts and the
memorandum provided by the Fund's legal counsel discussing court decisions
regarding the limited usefulness of such comparisons. Management also discussed
with the board the Fund's distribution arrangements. The board noted that UBS
Global AM is the principal distributor of the Fund's shares and has appointed
UBS Financial Services Inc. as a dealer for the sale of the Fund's shares. The
board also noted that the Fund's shareholders had recently approved the adoption
of a shareholder services plan with respect to the Fund, under which plan UBS
Global AM pays all or virtually all of the service fee to UBS Financial Services
Inc.
The comparative Lipper information showed that the Fund's Contractual Management
Fee and Actual Management Fee were in the fifth and second quintile,
respectively, of the funds in their Expense Group (I.E., ninth and fourth lowest
of ten respectively, for the comparison periods utilized in the Lipper report,
after adjusting the data for the more recent fee waivers) and that, therefore,
although the Fund's Contractual Management Fee was higher than that of most of
the funds in its Expense Group, its Actual Management Fee was below the average
for its Expense Group. The board also noted that the Fund's total expenses of
0.598% were third lowest in its Expense Group for the comparison period utilized
in the Lipper report, placing it in the second quintile for its Expense Group.
The board did not receive comparative information from Lipper with respect to
the Fund's sub-advisory and sub-administration fee (the "Sub-advisory Fee"). The
board noted that the compensation paid to UBS Global AM is paid by UBS Financial
Services Inc., not the Fund, and, accordingly, that the retention of UBS Global
AM does not increase the fees otherwise incurred by the Fund's shareholders.
Taking all of the above into consideration, the board determined that the
Contractual Management Fee and the Sub-advisory Fee were reasonable in light of
the nature, extent and quality of the services provided to the Fund under the
Advisory and Administration Contract and the Sub-Advisory and Sub-Administration
Contract, respectively.
UBS FINANCIAL SERVICES INC. PROFITABILITY. The board received and considered a
profitability analysis of UBS Financial Services Inc. and its affiliates in
providing services to the Fund. The board also received profitability
information with respect to the UBS New York fund complex as a whole. In
addition, the board received information with respect to the allocation
methodologies used in preparing this profitability data. The board also received
information about UBS Financial Services Inc.'s profitability in comparison with
the limited available industry data.
77
<Page>
UBS Financial Services Inc.'s profitability was considered not excessive in
light of the nature, extent and quality of the services provided to the Fund.
ECONOMIES OF SCALE. The board received and considered information from
management regarding whether there have been economies of scale with respect to
the management of the Fund, whether the Fund has appropriately benefited from
any economies of scale, and whether there is potential for realization of any
further economies of scale. The board considered whether economies of scale in
the provision of services to the Fund were being passed along to the
shareholders.
The board noted that the Fund's Contractual Management Fee, after giving effect
to the contractual waivers, contained breakpoints. The board considered that the
Fund's asset level exceeded the breakpoints and, as a result, the Fund and its
shareholders realized certain economies of scale because the total expense ratio
of the Fund was lower than if no breakpoints had been in place given the
addition of the service plan. Accordingly, the board determined that economies
of scale were passed on to shareholders in the form of breakpoints to the
Management Fee. The board also noted that as the Fund's assets have increased
over time, it has realized other economies of scale as certain expenses, such as
fees for directors, auditors and legal fees, become a smaller percentage of
overall assets. The board also noted that the Fund's Sub-advisory Fee did not
contain breakpoints but also that, as the Sub-advisory Fee is paid by UBS
Financial Services Inc., not the Fund, separate considerations of economies of
scale with respect to the Sub-advisory Fee were not relevant.
Generally, in light of UBS Financial Services Inc.'s profitability data, the
Actual (as well as Contractual) Management Fee, and the breakpoints currently in
place, the board believed that UBS Financial Services Inc.'s sharing of current
economies of scale with the Fund was acceptable.
OTHER BENEFITS TO UBS FINANCIAL SERVICES INC. AND UBS GLOBAL AM. The board
considered other benefits received by UBS Financial Services Inc., UBS Global AM
and their affiliates as a result of their relationship with the Fund, including
the opportunity to offer additional products and services to Fund shareholders.
In light of the costs of providing investment management, sub-advisory,
administrative, sub-administrative and other services to the Fund and UBS
Financial Services Inc.'s and UBS Global AM's ongoing commitment to the Fund,
the profits and other ancillary benefits that UBS Financial Services Inc. and
its affiliates received were considered reasonable.
In light of all of the foregoing, the board approved the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract to
continue for another year.
78
<Page>
No single factor reviewed by the board was identified by the board as the
principal factor in determining whether to approve the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract.
The Independent Directors were advised by separate independent legal counsel
throughout the process. The board discussed the proposed continuance of the
Advisory and Administration Contract and the Sub-Advisory and Sub-Administration
Contract in a private session with their independent legal counsel at which no
representatives of UBS Financial Services, Inc. or UBS Global AM were present.
79
<Page>
UBS RMA U.S. Government Portfolio
Board Approval of the Advisory and Administration Contract and Sub-Advisory
and Sub-Administration Contract (unaudited)
BACKGROUND. At a meeting of the board of UBS RMA Money Fund Inc. (the
"Corporation") on July 20, 2005, the board members, including the Corporation's
Independent Directors (i.e., those directors who are not "interested persons" of
the Corporation as that term is defined in the Investment Company Act of 1940,
as amended), considered and approved the continuance of the Advisory and
Administration Contract between the Corporation and UBS Financial Services Inc.
with respect to UBS RMA U.S. Government Portfolio (the "Fund") ("Advisory and
Administration Contract") and the Sub-Advisory and Sub-Administration Contract
between UBS Financial Services Inc. and UBS Global Asset Management (US) Inc.
("UBS Global AM") with respect to the Fund ("Sub-Advisory and Sub-Administration
Contract"). In preparing for the meeting, the board members had requested and
received information from UBS Financial Services Inc. and UBS Global AM to
assist them, including performance and expense information for other investment
companies with similar investment objectives. The board received and considered
a variety of information concerning UBS Financial Services Inc. and UBS Global
AM, as well as the advisory, sub-advisory, administrative, sub-administrative
and distribution arrangements for the Fund, certain portions of which are
discussed below. The Independent Directors discussed the materials initially
provided by management prior to the scheduled board meeting in a session with
their independent legal counsel and requested, and received from management,
supplemental materials to assist them in their consideration of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract.
Subsequently, the Chairman of the board and independent legal counsel to the
Independent Directors met with management representatives to discuss generally
how information would be provided at the board meeting. The Independent
Directors also met for several hours the evening before the board meeting and
met again after management's presentation was completed to review the disclosure
that had been presented to them at the meeting. At all of these sessions the
Independent Directors met in session with their independent legal counsel. The
Independent Directors also received a memorandum from their independent legal
counsel discussing the duties of board members in considering approval of
advisory, administration, distribution and service agreements.
BOARD APPROVAL OF ADVISORY AND ADMINISTRATION CONTRACT AND SUB-ADVISORY AND
SUB-ADMINISTRATION CONTRACT. In approving the Advisory and Administration
Contract and the Sub-Advisory and Sub-Administration Contract, the board,
including the Independent Directors, considered the following factors:
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AND ADMINISTRATION
CONTRACT AND THE SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT. The board
received and considered information regarding the nature, extent and quality of
management and sub-advisory services provided to the Fund by UBS Financial
Services Inc. under the Advisory and Administration Contract and UBS Global AM
under the Sub-Advisory and Sub-Administration
80
<Page>
Contract, respectively, during the past year. The board also received a
description of the administrative and other services rendered to the Fund and
its shareholders by management, including in particular UBS Financial Services
Inc.'s oversight of UBS Global AM's provision of sub-advisory and
sub-administration services. The board noted that information received at
regular meetings throughout the year related to the services rendered by UBS
Financial Services Inc. concerning the management of the Fund's affairs and UBS
Financial Services Inc.'s role in overseeing UBS Global AM's provision of
sub-advisory and sub-administrative services to the Fund and management's role
in coordinating providers of other services to the Fund, including custody,
accounting and transfer agency services. The board's evaluation of the services
provided by UBS Financial Services Inc. and UBS Global AM took into account the
board's knowledge and familiarity gained as board members of funds in the UBS
New York fund complex, including the scope and quality of UBS Financial Services
Inc.'s and UBS Global AM's investment management, sub-advisory and other
capabilities and the quality of management's administrative, sub-administrative
and other services. The board observed that the scope of services provided by
management had expanded over time as a result of regulatory and other
developments, including maintaining and monitoring UBS Global AM's own and the
Fund's expanded compliance programs.
The board had available to it the qualifications, backgrounds and
responsibilities of the Fund's senior personnel and the portfolio management
team primarily responsible for the day-to-day portfolio management of the Fund
and recognized that many of these persons report to the board regularly, some at
every board meeting. The board also considered, based on its knowledge of UBS
Financial Services Inc., UBS Global AM and their affiliates, the financial
resources available to management and its parent organization, UBS AG.
The board reviewed how transactions in Fund assets are effected. While UBS
Global AM's brokerage policies and practices, the standards applied in seeking
best execution, UBS Global AM's policies and practices regarding soft dollars,
the use of a broker affiliated with UBS Financial Services Inc. and UBS Global
AM and the existence of quality controls applicable to brokerage allocation
procedures were available to the board, many of these policies and practices
were deemed not applicable to the management of a money market fund's portfolio.
In addition, management also reported to the board on, among other things, its
disaster recovery plans and portfolio manager compensation arrangements.
The board concluded that, overall, it was satisfied with the nature, extent and
quality of services provided (and expected to be provided) under the Advisory
and Administration Contract and the Sub-Advisory and Sub-Administration
Contract.
FUND PERFORMANCE. The board received and considered performance information of
the Fund compared to other funds (the "Performance Universe") selected by
Lipper, Inc. ("Lipper"), an independent provider of investment company data,
81
<Page>
over the one-, three-, five- and 10-year periods ended May 31, 2005. The board
was provided with a description of the methodology Lipper used to determine the
similarity of the Fund with the funds included in the Performance Universe. The
board also noted that it had received information throughout the year at
periodic intervals with respect to the Fund's performance.
The comparative Lipper information showed that the Fund's performance was
consistently in the second quintile for the one-, three-, and five-year periods
and in the third quintile for the ten-year period and, thus, that the Fund's
performance was above the Performance Universe average for the one-, three-, and
five-year periods and approximately at the Performance Universe Average for the
ten-year period. Based on its review, the board concluded that the Fund's
investment performance was satisfactory.
MANAGEMENT FEES AND EXPENSE RATIOS. The board reviewed and considered the
contractual management fee (the "Contractual Management Fee") (0.428% after the
imposition of breakpoints, which are discussed further) payable by the Fund to
UBS Financial Services Inc. in light of the nature, extent and quality of the
management and administrative services provided by UBS Financial Services Inc.
The board also reviewed and considered the actual fee rate paid by the Fund (the
"Actual Management Fee") (0.402%).
Additionally, the board received and considered information comparing the Fund's
Contractual Management Fee, Actual Management Fee and overall expenses with
those of other funds in a group of funds selected and provided by Lipper (the
"Expense Group"). The board also received information on UBS Global Asset
Management (Americas) Inc.'s (an affiliate of both UBS Financial Services Inc.
and UBS Global AM) standard institutional account fees for short-term fixed
income-type accounts. The board noted that these fees were lower than the
Contractual and Actual Management Fees (which Contractual and Actual Management
Fees reflect the aggregate of fees payable to UBS Financial Services Inc. and
the sub-advisory and sub-administration fees payable to UBS Global AM), but also
noted management's explanation that comparisons with such accounts may be of
limited relevance given the different structures and regulatory requirements of
mutual funds versus such accounts, the differences in the levels of services
required by mutual funds and such accounts and the memorandum provided by the
Fund's legal counsel discussing court decisions regarding the limited usefulness
of such comparisons. Management also discussed with the board the Fund's
distribution arrangements. The board noted that UBS Global AM is the principal
distributor of the Fund's shares and has appointed UBS Financial Services Inc.
as a dealer for the sale of the Fund's shares, and that the Fund pays UBS Global
AM a monthly service fee at the annual rate of up to 0.15% of the Fund's average
daily net assets for providing certain shareholder services and
82
<Page>
that, currently, the amount paid UBS Global AM is 0.125% of average daily net
assets.
The comparative Lipper information showed that the Fund's Contractual Management
Fee and Actual Management Fee were in the third quintile and fourth quintile,
respectively, of the funds in their Expense Group (I.E., fourth and fifth lowest
of seven, respectively, for the comparison periods utilized in the Lipper
report) and, thus, that the Fund's contractual and actual management fee were
somewhat above the median for their Expense Group average. The board also noted
that the Fund's total expenses of 0.578% were third lowest in its Expense Group
for the comparison period utilized in the Lipper report, placing it in the
second quintile for its Expense Group and thus, its total expenses were below
the average for its Expense Group.
The board did not receive comparative information from Lipper with respect to
the Fund's sub-advisory and sub-administration fee (together, the "Sub-advisory
Fee"). The board noted that the compensation paid to UBS Global AM is paid by
UBS Financial Services Inc., not the Fund, and, accordingly, that the retention
of UBS Global AM does not increase the fees otherwise incurred by the Fund's
shareholders.
Taking all of the above into consideration, the board determined that the
Contractual Management Fee and the Sub-advisory Fee were reasonable in light of
the nature, extent and quality of the services provided to the Fund under the
Advisory and Administration Contract and the Sub-Advisory and Sub-Administration
Contract, respectively.
UBS FINANCIAL SERVICES INC. PROFITABILITY. The board received and considered a
profitability analysis of UBS Financial Services Inc. and its affiliates in
providing services to the Fund. The board also received profitability
information with respect to the UBS New York fund complex as a whole. In
addition, the board received information with respect to the allocation
methodologies used in preparing this profitability data.The board also received
information about UBS Financial Services Inc.'s profitability in comparison with
the limited available industry data. UBS Financial Services Inc.'s profitability
was considered not excessive in light of the nature, extent and quality of the
services provided to the Fund.
ECONOMIES OF SCALE. The board received and considered information from
management regarding whether there have been economies of scale with respect to
the management of the Fund, whether the Fund has appropriately benefited from
any economies of scale, and whether there is potential for realization of any
further economies of scale. The board considered whether economies of scale in
the provision of services to the Fund were being passed along to the
shareholders.
83
<Page>
The board noted that the Fund's Contractual Management Fee contained
breakpoints. The board considered that the Fund's asset level exceeded the
breakpoints and, as a result, the Fund and its shareholders realized certain
economies of scale because the total expense ratio of the Fund was lower than if
no breakpoints had been in place. Accordingly, the board determined that
economies of scale were passed on to shareholders in the form of breakpoints to
the Management Fee. The board also noted that as the Fund's assets have
increased over time, it has realized other economies of scale as certain
expenses, such as fees for directors, auditors and legal fees, become a smaller
percentage of overall assets. The board also noted that the Fund's Sub-advisory
Fee did not contain breakpoints but also that, as the Sub-advisory Fee is paid
by UBS Financial Services Inc., not the Fund, separate considerations of
economies of scale with respect to the Sub-advisory Fee were not relevant.
Generally, in light of UBS Financial Services Inc.'s profitability data, the
Actual (as well as Contractual) Management Fee and the breakpoints currently in
place, the board believed that UBS Financial Services Inc.'s sharing of current
economies of scale with the Fund was acceptable.
OTHER BENEFITS TO UBS FINANCIAL SERVICES INC. AND UBS GLOBAL AM. The board
considered other benefits received by UBS Financial Services Inc., UBS Global AM
and their affiliates as a result of their relationship with the Fund, including
the opportunity to offer additional products and services to Fund shareholders.
In light of the costs of providing investment management, sub-advisory,
administrative, sub-administrative and other services to the Fund and UBS
Financial Services Inc.'s and UBS Global AM's ongoing commitment to the Fund,
the profits and other ancillary benefits that UBS Financial Services Inc. and
its affiliates received were considered reasonable.
In light of all of the foregoing, the board approved each of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract to
continue for another year.
No single factor reviewed by the board was identified by the board as the
principal factor in determining whether to approve the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract.
The Independent Directors were advised by separate independent legal counsel
throughout the process. The board discussed the proposed continuance of the
Advisory and Administration Contract and the Sub-Advisory and Sub-Administration
Contract in a private session with their independent legal counsel at which no
representatives of UBS Financial Services Inc. or UBS Global AM were present.
84
<Page>
UBS RMA Tax-Free Fund
Board Approval of the Advisory and Administration Contract and Sub-Advisory
and Sub-Administration Contract (unaudited)
BACKGROUND. At a meeting of the board of UBS RMA Tax-Free Fund Inc. (the "Fund")
on July 20, 2005, the board members, including the directors who are not
"interested persons" of the Fund ("Independent Directors") as defined in the
Investment Company Act of 1940, as amended, considered and approved the
continuance of the Advisory and Administration Contract between the Fund and UBS
Financial Services Inc. ("Advisory and Administration Contract") and the
Sub-Advisory and Sub-Administration Contract between UBS Financial Services Inc.
and UBS Global Asset Management (US) Inc. ("UBS Global AM") ("Sub-Advisory and
Sub-Administration Contract"). In preparing for the meeting, the board members
had requested and received information from UBS Financial Services Inc. and UBS
Global AM to assist them, including performance and expense information for
other investment companies with similar investment objectives. The board
received and considered a variety of information concerning UBS Financial
Services Inc. and UBS Global AM, as well as the advisory, sub-advisory,
administrative, sub-administrative and distribution arrangements for the Fund,
certain portions of which are discussed below. The Independent Directors
discussed the materials initially provided by management prior to the scheduled
board meeting in a session with their independent legal counsel and requested,
and received from management, supplemental materials to assist them in their
consideration of the Advisory and Administration Contract and the Sub-Advisory
and Sub-Administration Contract. Subsequently, the Chairman of the board and
independent legal counsel to the Independent Directors met with management
representatives to discuss generally how information would be provided at the
board meeting. The Independent Directors also met for several hours the evening
before the board meeting and met again after management's presentation was
completed to review the disclosure that had been presented to them at the
meeting. At all of these sessions the Independent Directors met in session with
their independent legal counsel. The Independent Directors also received a
memorandum from their independent legal counsel discussing the duties of board
members in considering approval of advisory, administration, distribution and
service agreements.
BOARD APPROVAL OF ADVISORY AND ADMINISTRATION CONTRACT AND SUB-ADVISORY AND
SUB-ADMINISTRATION CONTRACT. In approving the Advisory and Administration
Contract and the Sub-Advisory and Sub-Administration Contract the board,
including the Independent Directors, considered the following factors:
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AND ADMINISTRATION
CONTRACT AND THE SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT. The board
received and considered information regarding the nature, extent and quality of
management and sub-advisory services provided to the Fund by UBS Financial
Services Inc. under the Advisory and Administration Contract and UBS Global AM
under the Sub-Advisory and Sub-Administration Contract, respectively, during the
past year. The board also received a description of the administrative and other
services rendered to the Fund and its shareholders
85
<Page>
by management, including in particular UBS Financial Services Inc.'s oversight
of UBS Global AM's provision of sub-advisory and sub-administration services.
The board noted that information received at regular meetings throughout the
year related to the services rendered by UBS Financial Services Inc. concerning
the management of the Fund's affairs and UBS Financial Services Inc.'s role in
overseeing UBS Global AM's provision of sub-advisory and sub-administrative
services to the Fund and management's role in coordinating providers of other
services to the Fund, including custody, accounting and transfer agency
services. The board's evaluation of the services provided by UBS Financial
Services Inc. and UBS Global AM took into account the board's knowledge and
familiarity gained as board members of funds in the UBS New York fund complex,
including the scope and quality of UBS Financial Services Inc.'s and UBS Global
AM's investment management, sub-advisory and other capabilities and the quality
of management's administrative, sub-administrative and other services. The board
observed that the scope of services provided by management had expanded over
time as a result of regulatory and other developments, including maintaining and
monitoring UBS Global AM's own and the Fund's expanded compliance programs.
The board had available to it the qualifications, backgrounds and
responsibilities of the Fund's senior personnel and the portfolio management
team primarily responsible for the day-to-day portfolio management of the Fund
and recognized that many of these persons report to the board regularly, some at
every board meeting. The board also considered, based on its knowledge of UBS
Financial Services Inc., UBS Global AM and their affiliates, the financial
resources available to management and its parent organization, UBS AG.
The board reviewed how transactions in Fund assets are effected. While UBS
Global AM's brokerage policies and practices, the standards applied in seeking
best execution, UBS Global AM's policies and practices regarding soft dollars,
the use of a broker affiliated with UBS Financial Services Inc. and UBS Global
AM and the existence of quality controls applicable to brokerage allocation
procedures were available to the board, many of these policies and practices
were deemed not applicable to the management of a money market fund's portfolio.
In addition, management also reported to the board on, among other things, its
disaster recovery plans and portfolio manager compensation arrangements.
The board concluded that, overall, it was satisfied with the nature, extent and
quality of services provided (and expected to be provided) under the Advisory
and Administration Contract and the Sub-Advisory and Sub-Administration
Contract.
FUND PERFORMANCE. The board received and considered performance information of
the Fund compared to other funds (the "Performance Universe") selected by
Lipper, Inc. ("Lipper"), an independent provider of investment company data,
over the one-, three-, five- and 10-year periods ended May 31, 2005. The board
was provided with a description of the methodology Lipper used to determine
86
<Page>
the similarity of the Fund with the funds included in the Performance Universe.
The board also noted that it had received information throughout the year at
periodic intervals with respect to the Fund's performance.
The comparative Lipper information showed that the Fund's performance was in the
second quintile for the one-year period and the third quintile for the three-,
five-year and 10 year periods shown. Based on its review, the board concluded
that the Fund's investment performance was satisfactory.
MANAGEMENT FEES AND EXPENSE RATIOS. The board reviewed and considered the
contractual management fee (the "Contractual Management Fee") (0.415% after the
imposition of breakpoints, which are discussed further below) payable by the
Fund to UBS Financial Services Inc. in light of the nature, extent and quality
of the management and administrative services provided by UBS Financial Services
Inc. The board also reviewed and considered the actual fee rate paid by the Fund
(the "Actual Management Fee") (0.415%).
Additionally, the board received and considered information comparing the Fund's
Contractual Management Fee, Actual Management Fee and overall expenses with
those of other funds in a group of funds selected and provided by Lipper (the
"Expense Group"). The board also received information on UBS Global Asset
Management (Americas) Inc.'s (an affiliate of both UBS Financial Services Inc.
and UBS Global AM) standard institutional account fees for short-term fixed
income-type accounts. The board noted that these fees were lower than the
Contractual and Actual Management Fees (which Contractual and Actual Management
Fees reflect the aggregate of fees payable to UBS Financial Services Inc. and
the sub-advisory and sub-administration fees payable to UBS Global AM), but also
noted management's explanation that comparisons with such accounts may be of
limited relevance given the different structures and regulatory requirements of
mutual funds versus such accounts, the differences in the levels of services
required by mutual funds and such accounts and the memorandum provided by the
Fund's legal counsel discussing court decisions regarding the limited usefulness
of such comparisons. Management also discussed with the board the Fund's
distribution arrangements. The board noted that UBS Global AM is the principal
distributor of the Fund's shares and has appointed UBS Financial Services Inc.
as a dealer for the sale of the Fund's shares, and that the Fund pays UBS Global
AM a monthly service fee at the annual rate of up to 0.15% of the Fund's average
daily net assets for providing certain shareholder services and that, currently,
the amount paid UBS Global AM is 0.125% of average daily net assets.
The comparative Lipper information showed that the Fund's Contractual Management
Fee and Actual Management Fee were each in the third quintile of the funds in
their Expense Group (I.E., fourth lowest of seven, for the comparison periods
utilized in the Lipper report). The board also noted that the Fund's total
expenses of 0.603% was third lowest in its Expense Group for the comparison
87
<Page>
period utilized in the Lipper report, placing it in the second quintile for its
Expense Group.
The board did not receive comparative information from Lipper with respect to
the Fund's sub-advisory and sub-administration fee (together, the "Sub-advisory
Fee"). The board noted that the compensation paid to UBS Global AM is paid by
UBS Financial Services Inc., not the Fund, and, accordingly, than the retention
of UBS Global AM does not increase the fees otherwise incurred by the Fund's
shareholders.
Taking all of the above into consideration, the board determined that the
Contractual Management Fee and the Sub-advisory Fee were reasonable in light of
the nature, extent and quality of the services provided to the Fund under the
Advisory and Administration Contract and the Sub-Advisory and Sub-Administration
Contract, respectively.
UBS FINANCIAL SERVICES INC. PROFITABILITY. The board received and considered a
profitability analysis of UBS Financial Services Inc. and its affiliates in
providing services to the Fund. The board also received profitability
information with respect to the UBS New York fund complex as a whole. In
addition, the board received information with respect to the allocation
methodologies used in preparing this profitability data. The board also received
information about UBS Financial Services Inc.'s profitability in comparison with
the limited available industry data. UBS Financial Services Inc.'s profitability
was considered not excessive in light of the nature, extent and quality of the
services provided to the Fund.
ECONOMIES OF SCALE. The board received and considered information from
management regarding whether there have been economies of scale with respect to
the management of the Fund, whether the Fund has appropriately benefited from
any economies of scale, and whether there is potential for realization of any
further economies of scale. The board considered whether economies of scale in
the provision of services to the Fund were being passed along to the
shareholders.
The board noted that the Fund's Contractual Management Fee contained
breakpoints. The board considered that the Fund's asset level exceeded the
breakpoints and, as a result, the Fund and its shareholders realized certain
economies of scale because the total expense ratio of the Fund was lower than if
no breakpoints had been in place. Accordingly, the board determined that
economies of scale were passed on to shareholders in the form of breakpoints to
the Contractual Management Fee. The board also noted that as the Fund's assets
have increased over time, it has realized other economies of scale as certain
expenses, such as fees for directors, auditors and legal fees, become a smaller
percentage of overall assets. The board also noted that the Fund's Sub-advisory
Fee did not contain breakpoints but also that, as the Sub-advisory Fee is paid
by UBS Financial Services Inc., not the Fund, separate considerations of
economies of scale with respect to the Sub-advisory Fee were not relevant.
88
<Page>
Generally, in light of UBS Financial Services Inc.'s profitability data, the
Actual (as well as Contractual) Management Fee and the breakpoints currently in
place, the board believed that UBS Financial Services Inc.'s sharing of current
economies of scale with the Fund was acceptable.
OTHER BENEFITS TO UBS FINANCIAL SERVICES INC. AND UBS GLOBAL AM. The board
considered other benefits received by UBS Financial Services Inc., UBS Global AM
and their affiliates as a result of their relationship with the Fund, including
the opportunity to offer additional products and services to Fund shareholders.
In light of the costs of providing investment management, sub-advisory,
administrative, sub-administrative and other services to the Fund and UBS
Financial Services Inc.'s and UBS Global AM's ongoing commitment to the Fund,
the profits and other ancillary benefits that UBS Financial Services Inc. and
its affiliates received were considered reasonable.
In light of all of the foregoing, the board approved each of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract to
continue for another year.
No single factor reviewed by the board was identified by the board as the
principal factor in determining whether to approve the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract.
The Independent Directors were advised by separate independent legal counsel
throughout the process. The board discussed the proposed continuance of the
Advisory and Administration Contract and the Sub-Advisory and Sub-Administration
Contract in a private session with their independent legal counsel at which no
representatives of UBS Financial Services Inc. or UBS Global AM were present.
89
<Page>
UBS RMA California Municipal Money Fund
Board Approval of the Advisory and Administration Contract and Sub-Advisory
and Sub-Administration Contract (unaudited)
BACKGROUND. At a meeting of the board of UBS Managed Municipal Trust (the
"Trust") on July 20, 2005, the board members, including the Trust's Independent
Trustees (i.e., those trustees who are not "interested persons" of the Trust as
that term is defined in the Investment Company Act of 1940, as amended),
considered and approved the continuance of the Advisory and Administration
Contract between the Trust and UBS Financial Services Inc. with respect to UBS
RMA California Municipal Money Fund (the "Fund") ("Advisory and Administration
Contract") and the Sub-Advisory and Sub-Administration Contract between UBS
Financial Services Inc. and UBS Global Asset Management (US) Inc. ("UBS Global
AM") with respect to the Fund ("Sub-Advisory and Sub-Administration Contract").
In preparing for the meeting, the board members had requested and received
information from UBS Financial Services Inc. and UBS Global AM to assist them,
including performance and expense information for other investment companies
with similar investment objectives. The board received and considered a variety
of information concerning UBS Financial Services Inc. and UBS Global AM, as well
as the advisory, sub-advisory, administrative, sub-administrative and
distribution arrangements for the Fund, certain portions of which are discussed
below. The Independent Trustees discussed the materials initially provided by
management prior to the scheduled board meeting in a session with their
independent legal counsel and requested, and received from management,
supplemental materials to assist them in their consideration of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract.
Subsequently, the Chairman of the board and independent legal counsel to the
Independent Trustees met with management representatives to discuss generally
how information would be provided at the board meeting. The Independent Trustees
also met for several hours the evening before the board meeting and met again
after management's presentation was completed to review the disclosure that had
been presented to them at the meeting. At all of these sessions the Independent
Trustees met in session with their independent legal counsel. The Independent
Trustees also received a memorandum from their independent legal counsel
discussing the duties of board members in considering approval of advisory,
administration, distribution and service agreements.
BOARD APPROVAL OF ADVISORY AND ADMINISTRATION CONTRACT AND SUB-ADVISORY AND
SUB-ADMINISTRATION CONTRACT. In approving the Advisory and Administration
Contract and the Sub-Advisory and Sub-Administration Contract, the board,
including the Independent Trustees, considered the following factors:
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AND ADMINISTRATION
CONTRACT AND THE SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT. The board
received and considered information regarding the nature, extent and quality of
management and sub-advisory services provided to the Fund by UBS Financial
Services Inc. under the Advisory and Administration Contract and UBS Global AM
under the Sub-Advisory and Sub-Administration
90
<Page>
Contract, respectively, during the past year. The board also received a
description of the administrative and other services rendered to the Fund and
its shareholders by management, including in particular UBS Financial Services
Inc.'s oversight of UBS Global AM's provision of sub-advisory and
sub-administrative services. The board noted that information received at
regular meetings throughout the year related to the services rendered by UBS
Financial Services Inc. concerning the management of the Fund's affairs and UBS
Financial Services Inc.'s role in overseeing UBS Global AM's provision of
sub-advisory and sub-administrative services to the Fund and management's role
in coordinating providers of other services to the Fund, including custody,
accounting and transfer agency services. The board's evaluation of the services
provided by UBS Financial Services Inc. and UBS Global AM took into account the
board's knowledge and familiarity gained as board members of Funds in the UBS
New York fund complex, including the scope and quality of UBS Financial Services
Inc.'s and UBS Global AM's investment management, sub-advisory and other
capabilities and the quality of management's administrative, sub-administrative
and other services. The board observed that the scope of services provided by
management had expanded over time as a result of regulatory and other
developments, including maintaining and monitoring UBS Global AM's own and the
Fund's expanded compliance programs.
The board had available to it the qualifications, backgrounds and
responsibilities of the Fund's senior personnel and the portfolio management
team primarily responsible for the day-to-day portfolio management of the Fund
and recognized that many of these persons report to the board regularly, some at
every board meeting. The board also considered, based on its knowledge of UBS
Financial Services Inc., UBS Global AM and their affiliates, the financial
resources available to management and its parent organization, UBS AG.
The board reviewed how transactions in Fund assets are effected. While UBS
Global AM's brokerage policies and practices, the standards applied in seeking
best execution, UBS Global AM's policies and practices regarding soft dollars,
the use of a broker affiliated with UBS Financial Services Inc. and UBS Global
AM and the existence of quality controls applicable to brokerage allocation
procedures were available to the board, many of these policies and practices
were deemed not applicable to the management of a money market fund's portfolio.
In addition, management also reported to the board on, among other things, its
disaster recovery plans and portfolio manager compensation arrangements.
The board concluded that, overall, it was satisfied with the nature, extent and
quality of services provided (and expected to be provided) under the Advisory
and Administration Contract and the Sub-Advisory and Sub-Administration
Contract.
FUND PERFORMANCE. The board received and considered performance information of
the Fund compared to other funds (the "Performance Universe") selected by
Lipper, Inc. ("Lipper"), an independent provider of investment company data,
91
<Page>
over the one-, three-, five- and 10-year periods ended May 31, 2005. The board
was provided with a description of the methodology Lipper used to determine the
similarity of the Fund with the funds included in the Performance Universe. The
board also noted that it had received information throughout the year at
periodic intervals with respect to the Fund's performance.
The comparative Lipper information showed that the Fund's performance was in the
third quintile for the one-year period and the fourth quintile for the three-,
five- and 10-year periods shown. The Board requested that management explain the
Fund's long-term underperformance. Management explained that, in comparison with
its Performance Universe, the Fund's portfolio was generally of higher overall
credit quality and contained very minimum exposure to positions subject to the
alternative minimum tax ("AMT"). Management noted that, in general, its state
tax-free funds were managed in a higher quality, generally more defensive
posture than a number of their peers. Both of these portfolio management
decisions had resulted in a slightly lower yield over time when compared to the
Performance Group. Management also noted that, as California was a
relatively-high tax state, peers that may have less sensitive (or less affluent)
a client base tended to incorporate significant exposures to AMT investments,
and that these differentials in AMT investments between the Fund and its peers
were frequently the reason for the Fund's fourth quintile placement. Management
also noted that, more recently, the portfolio management team's decision to have
a very short weighted average maturity of its portfolio had penalized
performance to a degree. Based on its review and management's explanation,
including management's explanation that the Fund was being managed to provide a
higher quality alternative to its investors in comparison to some of its peers,
the board concluded that the Fund's investment performance was satisfactory.
MANAGEMENT FEES AND EXPENSE RATIOS. The board reviewed and considered the
contractual management fee (the "Contractual Management Fee") (0.447% after the
imposition of breakpoints, which are discussed further below) payable by the
Fund to UBS Financial Services Inc. in light of the nature, extent and quality
of the management and administrative services provided by UBS Financial Services
Inc. The board also reviewed and considered the actual fee rate paid by the Fund
(the "Actual Management Fee") (0.457%).
Additionally, the board received and considered information comparing the Fund's
Contractual Management Fee, Actual Management Fee and overall expenses with
those of other funds in a group of funds selected and provided by Lipper (the
"Expense Group"). The board also received information on UBS Global Asset
Management (Americas) Inc.'s (an affiliate of both UBS Financial Services Inc.
and UBS Global AM) standard institutional account fees for short-term fixed
income-type accounts. The board noted that these fees were lower than the
Contractual and Actual Management Fees (which Contractual and Actual Management
Fees
92
<Page>
reflect the aggregate of fees payable to UBS Financial Services Inc. and the
sub-advisory and sub-administration fees payable to UBS Global AM), but also
noted management's explanation that comparisons with such accounts may be of
limited relevance given the different structures and regulatory requirements of
mutual funds versus such accounts, the differences in the levels of services
required by mutual funds and such accounts and the memorandum provided by the
Fund's legal counsel discussing court decisions regarding the limited usefulness
of such comparisons. Management also discussed with the board the Fund's
distribution arrangements. The board noted that UBS Global AM is the principal
distributor of the Fund's shares and has appointed UBS Financial Services Inc.
as a dealer for the sale of the Fund's shares, and that the Fund pays UBS Global
AM a monthly service fee at the annual rate of up to 0.15% of the Fund's average
daily net assets for providing certain shareholder services and that, currently,
the amount paid UBS Global AM is 0.125% of average daily net assets.
The comparative Lipper information showed that the Fund's Contractual Management
Fee and Actual Management Fee were in the second and fourth quintile,
respectively, of the funds in their Expense Group (I.E., third and sixth lowest
of nine, respectively, for the comparison periods utilized in the Lipper
report). The board also noted that the Fund's total expenses of 0.646% were
seventh lowest in its Expense Group for the comparison period utilized in the
Lipper report, placing it in the fourth quintile for its Expense Group.
The board did not receive comparative information from Lipper with respect to
the Fund's sub-advisory and sub-administration fee (together, the "Sub-advisory
Fee"). The board noted that the compensation paid to UBS Global AM is paid by
UBS Financial Services Inc., not the Fund, and, accordingly, that the retention
of UBS Global AM does not increase the fees otherwise incurred by the Fund's
shareholders.
Taking all of the above into consideration, the board determined that the
Contractual Management Fee and the Sub-advisory Fee were reasonable in light of
the nature, extent and quality of the services provided to the Fund under the
Advisory and Administration Contract and the Sub-Advisory and Sub-Administration
Contract, respectively.
UBS FINANCIAL SERVICES INC. PROFITABILITY. The board received and considered a
profitability analysis of UBS Financial Services Inc. and its affiliates in
providing services to the Fund. The board also received profitability
information with respect to the UBS New York fund complex as a whole. In
addition, the board received information with respect to the allocation
methodologies used in preparing this profitability data. The board also received
information about UBS Financial Services Inc.'s profitability in comparison with
the limited available industry data. UBS Financial Services Inc.'s profitability
was considered not excessive in light of the nature, extent and quality of the
services provided to the Fund.
93
<Page>
ECONOMIES OF SCALE. The board received and considered information from
management regarding whether there have been economies of scale with respect to
the management of the Fund, whether the Fund has appropriately benefited from
any economies of scale, and whether there is potential for realization of any
further economies of scale. The board considered whether economies of scale in
the provision of services to the Fund were being passed along to the
shareholders.
The board noted that the Fund's Contractual Management Fee contained
breakpoints. The board considered that the Fund's asset level exceeded the
breakpoints and, as a result, the Fund and its shareholders realized certain
economies of scale because the total expense ratio of the Fund was lower than if
no breakpoints had been in place. Accordingly, the board determined that
economies of scale were passed on to shareholders in the form of breakpoints to
the Contractual Management Fee. The board also noted that as the Fund's assets
have increased over time, it has realized other economies of scale as certain
expenses, such as fees for directors, auditors and legal fees, become a smaller
percentage of overall assets. The board also noted that the Fund's Sub-advisory
Fee did not contain breakpoints but also that, as the Sub-advisory Fee is paid
by UBS Financial Services Inc., not the Fund, separate considerations of
economies of scale with respect to the Sub-advisory Fee were not relevant.
Generally, in light of UBS Financial Services Inc.'s profitability data, the
Actual (as well as Contractual) Management Fee and the breakpoints currently in
place, the board believed that UBS Financial Services Inc.'s sharing of current
economies of scale with the Fund was acceptable.
OTHER BENEFITS TO UBS FINANCIAL SERVICES INC. AND UBS GLOBAL AM. The board
considered other benefits received by UBS Financial Services Inc., UBS Global AM
and their affiliates as a result of their relationship with the Fund, including
the opportunity to offer additional products and services to Fund shareholders.
In light of the costs of providing investment management, sub-advisory,
administrative, sub-administrative and other services to the Fund and UBS
Financial Services Inc.'s and UBS Global AM's ongoing commitment to the Fund,
the profits and other ancillary benefits that UBS Financial Services Inc. and
its affiliates received were considered reasonable.
In light of all of the foregoing, the board approved each of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract to
continue for another year.
No single factor reviewed by the board was identified by the board as the
principal factor in determining whether to approve the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract.
The Independent Trustees
94
<Page>
were advised by separate independent legal counsel throughout the process. The
board discussed the proposed continuance of the Advisory and Administration
Contract and the Sub- Advisory and Sub-Administration Contract in a private
session with their independent legal counsel at which no representatives of UBS
Financial Services Inc. or UBS Global AM were present.
95
<Page>
UBS RMA New York Municipal Money Fund
Board Approval of the Advisory and Administration Contract and Sub-Advisory
and Sub-Administration Contract (unaudited)
BACKGROUND. At a meeting of the board of UBS Managed Municipal Trust (the
"Trust") on July 20, 2005, the board members, including the Trust's Independent
Trustees (i.e., those trustees who are not "interested persons" of the Trust as
that term is defined in the Investment Company Act of 1940, as amended),
considered and approved the continuance of the Advisory and Administration
Contract between the Trust and UBS Financial Services Inc. with respect to UBS
RMA New York Municipal Money Fund (the "Fund") ("Advisory and Administration
Contract") and the Sub-Advisory and Sub-Administration Contract between UBS
Financial Services Inc. and UBS Global Asset Management (US) Inc. ("UBS Global
AM") with respect to the Fund ("Sub-Advisory and Sub-Administration Contract").
In preparing for the meeting, the board members had requested and received
information from UBS Financial Services Inc. and UBS Global AM to assist them,
including performance and expense information for other investment companies
with similar investment objectives. The board received and considered a variety
of information concerning UBS Financial Services Inc. and UBS Global AM, as well
as the advisory, sub-advisory, administrative, sub-administrative and
distribution arrangements for the Fund, certain portions of which are discussed
below. The Independent Trustees discussed the materials initially provided by
management prior to the scheduled board meeting in a session with their
independent legal counsel and requested, and received from management,
supplemental materials to assist them in their consideration of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract.
Subsequently, the Chairman of the board and independent legal counsel to the
Independent Trustees met with management representatives to discuss generally
how information would be provided at the board meeting. The Independent Trustees
also met for several hours the evening before the board meeting and met again
after management's presentation was completed to review the disclosure that had
been presented to them at the meeting. At all of these sessions the Independent
Trustees met in session with their independent legal counsel. The Independent
Trustees also received a memorandum from their independent legal counsel
discussing the duties of board members in considering approval of advisory,
administration, distribution and service agreements.
BOARD APPROVAL OF ADVISORY AND ADMINISTRATION CONTRACT AND SUB-ADVISORY AND
SUB-ADMINISTRATION CONTRACT. In approving the Advisory and Administration
Contract and the Sub-Advisory and Sub-Administration Contract, the board,
including the Independent Trustees, considered the following factors:
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AND ADMINISTRATION
CONTRACT AND THE SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT. The board
received and considered information regarding the nature, extent and quality of
management and sub-advisory services provided to the Fund by UBS Financial
Services Inc. under the Advisory and Administration Contract and UBS Global AM
under the Sub-Advisory and Sub-Administration Contract, respectively, during the
past year. The board also received a description
96
<Page>
of the administrative and other services rendered to the Fund and its
shareholders by management, including in particular UBS Financial Services
Inc.'s oversight of UBS Global AM's provision of sub-advisory and
sub-administrative services. The board noted that information received at
regular meetings throughout the year related to the services rendered by UBS
Financial Services Inc. concerning the management of the Fund's affairs and UBS
Financial Services Inc.'s role in overseeing UBS Global AM's provision of
sub-advisory and sub-administrative services to the Fund and management's role
in coordinating providers of other services to the Fund, including custody,
accounting and transfer agency services. The board's evaluation of the services
provided by UBS Financial Services Inc. and UBS Global AM took into account the
board's knowledge and familiarity gained as board members of funds in the UBS
New York fund complex, including the scope and quality of UBS Financial Services
Inc.'s and UBS Global AM's investment management, sub-advisory and other
capabilities and the quality of management's administrative, sub-administrative
and other services. The board observed that the scope of services provided by
management had expanded over time as a result of regulatory and other
developments, including maintaining and monitoring UBS Global AM's own and the
Fund's expanded compliance programs.
The board had available to it the qualifications, backgrounds and
responsibilities of the Fund's senior personnel and the portfolio management
team primarily responsible for the day-to-day portfolio management of the Fund
and recognized that many of these persons report to the board regularly, some at
every board meeting. The board also considered, based on its knowledge of UBS
Financial Services Inc., UBS Global AM and their affiliates, the financial
resources available to management and its parent organization, UBS AG.
The board reviewed how transactions in Fund assets are effected. While UBS
Global AM's brokerage policies and practices, the standards applied in meeting
best execution, UBS Global AM's policies and practices regarding soft dollars,
the use of a broker affiliated with UBS Financial Services Inc. and UBS Global
AM and the existence of quality controls applicable to brokerage allocation
procedures were available to the board, many of these policies and practices
were deemed not applicable to the management of a money market fund's portfolio.
In addition, management also reported to the board on, among other things, its
disaster recovery plans and portfolio manager compensation arrangements.
The board concluded that, overall, it was satisfied with the nature, extent and
quality of services provided (and expected to be provided) under the Advisory
and Administration Contract and the Sub-Advisory and Sub-Administration
Contract.
FUND PERFORMANCE. The board received and considered performance information of
the Fund compared to other funds (the "Performance Universe") selected by
Lipper, Inc. ("Lipper"), an independent provider of investment company data,
over the one-, three-, five- and 10-year periods ended May 31, 2005. The board
97
<Page>
was provided with a description of the methodology Lipper used to determine the
similarity of the Fund with the funds included in the Performance Universe. The
board also noted that it had received information throughout the year at
periodic intervals with respect to the Fund's performance.
The comparative Lipper information showed that the Fund's performance was
consistently in the fourth quintile for the one-, three-, five-year and 10-year
periods shown. The Board requested that management explain the Fund's
underperformance. Management explained that, in comparison with its Performance
Universe, the Fund's portfolio was generally of higher overall credit quality
and contained very minimum exposure to positions subject to the alternative
minimum tax ("AMT"). Management noted that, in general, its state tax-free funds
were managed in a higher quality, generally more defensive posture than a number
of their peers. Both of these portfolio management decisions had resulted in a
slightly lower yield over time when compared to the Performance Group.
Management also noted that, as New York was a relatively-high tax state, peers
that may have less sensitive (or less affluent) a client base tended to
incorporate significant exposures to AMT investments, and that these
differentials in AMT investments between the Fund and its peers were frequently
the reason for the Fund's fourth quintile placement. Management also noted that,
more recently, the portfolio management team's decision to have a very short
weighted average maturity of its portfolio had penalized performance to a
degree. Based on its review and management's explanation, including management's
explanation that the Fund was being managed to provide a higher quality
alternative to its investors in comparison to some of its peers, the board
concluded that the Fund's investment performance was satisfactory.
MANAGEMENT FEES AND EXPENSE RATIOS. The board reviewed and considered the
contractual management fee (the "Contractual Management Fee") (0.471% after the
imposition of breakpoints, which are discussed further below) payable by the
Fund to UBS Financial Services Inc. in light of the nature, extent and quality
of the management and administrative services provided by UBS Financial Services
Inc. The board also reviewed and considered the actual fee rate paid by the Fund
(the "Actual Management Fee") (0.470%).
Additionally, the board received and considered information comparing the Fund's
Contractual Management Fee, Actual Management Fee and overall expenses with
those of other funds in a group of funds selected and provided by Lipper (the
"Expense Group"). The board also received information on UBS Global Asset
Management (Americas) Inc.'s (an affiliate of both UBS Financial Services Inc.
and UBS Global AM) standard institutional account fees for short-term fixed
income-type accounts. The board noted that these fees were lower than the
Contractual and Actual Management Fees (which Contractual and Actual Management
Fees reflect the aggregate of fees payable to UBS Financial Services Inc. and
the
98
<Page>
sub-advisory and sub-administration fees payable to UBS Global AM), but also
noted management's explanation that comparisons with such accounts may be of
limited relevance given the different structures and regulatory requirements of
mutual funds versus such accounts, the differences in the levels of services
required by mutual funds and such accounts and the memorandum provided by the
Fund's legal counsel discussing court decisions regarding the limited usefulness
of such comparisons. Management also discussed with the board the Fund's
distribution arrangements. The board noted that UBS Global AM is the principal
distributor of the Fund's shares and has appointed UBS Financial Services Inc.
as a dealer for the sale of the Fund's shares, and that the Fund pays UBS Global
AM a monthly service fee at the annual rate of up to 0.15% of the Fund's average
daily net assets for providing certain shareholder services and that, currently,
the amount paid UBS Global AM is 0.125% of average daily net assets.
The comparative Lipper information showed that the Fund's Contractual Management
Fee and Actual Management Fee were in the second and fourth quintile,
respectively, of the funds in their Expense Group (I.E., fourth and sixth
lowest, respectively, of nine, for the comparison periods utilized in the Lipper
report). The board also noted that the Fund's total expenses of 0.667% were
sixth lowest in its Expense Group for the comparison period utilized in the
Lipper report, placing it in the fourth quintile for its Expense Group.
The board did not receive comparative information from Lipper with respect to
the Fund's sub-advisory and sub-administration fee (together, the "Sub-advisory
Fee"). The board noted that the compensation paid to UBS Global AM is paid by
UBS Financial Services Inc., not the Fund, and, accordingly, that the retention
of UBS Global AM does not increase the fees otherwise incurred by the Fund's
shareholders.
Taking all of the above into consideration, the board determined that the
Contractual Management Fee and the Sub-advisory Fee were reasonable in light of
the nature, extent and quality of the services provided to the Fund under the
Advisory and Administration Contract and the Sub-Advisory and Sub-Administration
Contract, respectively.
UBS FINANCIAL SERVICES INC. PROFITABILITY. The board received and considered a
profitability analysis of UBS Financial Services Inc. and its affiliates in
providing services to the Fund. The board also received profitability
information with respect to the UBS New York fund complex as a whole. In
addition, the board received information with respect to the allocation
methodologies used in preparing this profitability data. The board also received
information about UBS Financial Services Inc.'s profitability in comparison with
the limited available industry data. UBS Financial Services Inc.'s profitability
was considered not excessive in light of the nature, extent and quality of the
services provided to the Fund.
99
<Page>
ECONOMIES OF SCALE. The board received and considered information from
management regarding whether there have been economies of scale with respect to
the management of the Fund, whether the Fund has appropriately benefited from
any economies of scale, and whether there is potential for realization of any
further economies of scale. The board considered whether economies of scale in
the provision of services to the Fund were being passed along to the
shareholders.
The board noted that the Fund's Contractual Management Fee contained
breakpoints. The board considered that the Fund's asset level exceeded the first
of its breakpoints and, as a result, the Fund and its shareholders realized
certain economies of scale because the total expense ratio of the Fund was lower
than if no breakpoints had been in place. Accordingly, the board determined that
economies of scale were passed on to shareholders in the form of breakpoints to
the Contractual Management Fee. The board also noted that as the Fund's assets
have increased over time, it has realized other economies of scale as certain
expenses, such as fees for directors, auditors and legal fees, become a smaller
percentage of overall assets. The board also noted that the Fund's Sub-advisory
Fee did not contain breakpoints but also that, as the Sub-advisory Fee is paid
by UBS Financial Services Inc., not the Fund, separate considerations of
economies of scale with respect to the Sub-advisory Fee were not relevant.
Generally, in light of UBS Financial Services Inc.'s profitability data, the
Actual (as well as Contractual) Management Fee and the breakpoints currently in
place, the board believed that UBS Financial Services lnc.'s sharing of current
economies of scale with the Fund was acceptable.
OTHER BENEFITS TO UBS FINANCIAL SERVICES INC. AND UBS GLOBAL AM. The board
considered other benefits received by UBS Financial Services lnc., UBS Global AM
and their affiliates as a result of their relationship with the Fund, including
the opportunity to offer additional products and services to Fund shareholders.
In light of the costs of providing investment management, sub-advisory,
administrative, sub-administrative and other services to the Fund and UBS
Financial Services Inc.'s and UBS Global AM's ongoing commitment to the Fund,
the profits and other ancillary benefits that UBS Financial Services Inc. and
its affiliates received were considered reasonable.
In light of all of the foregoing, the board approved each of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract to
continue for another year.
No single factor reviewed by the board was identified by the board as the
principal factor in determining whether to approve the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract.
The Independent Trustees were advised by separate independent legal counsel
throughout the
100
<Page>
process. The board discussed the proposed continuance of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract in
a private session with their independent legal counsel at which no
representatives of UBS Financial Services Inc. or UBS Global AM were present.
101
<Page>
UBS RMA New Jersey Municipal Money Fund
Board Approval of the Advisory and Administration Contract and Sub-Advisory
and Sub-Administration Contract (unaudited)
BACKGROUND. At a meeting of the board of UBS Municipal Money Market Series (the
"Trust") on July 20, 2005, the board members, including the Trust's Independent
Trustees (i.e., those trustees who are not "interested persons" of the Trust as
that term is defined in the Investment Company Act of 1940, as amended),
considered and approved the continuance of the Advisory and Administration
Contract between the Trust and UBS Financial Services Inc. with respect to UBS
RMA New Jersey Municipal Money Fund (the "Fund") ("Advisory and Administration
Contract") and the Sub-Advisory and Sub-Administration Contract between UBS
Financial Services Inc. and UBS Global Asset Management (US) Inc. ("UBS Global
AM") with respect to the Fund ("Sub-Advisory and Sub-Administration Contract").
In preparing for the meeting, the board members had requested and received
information from UBS Financial Services Inc. and UBS Global AM to assist them,
including performance and expense information for other investment companies
with similar investment objectives. The board received and considered a variety
of information concerning UBS Financial Services Inc. and UBS Global AM, as well
as the advisory, sub-advisory, administrative, sub-administrative and
distribution arrangements for the Fund, certain portions of which are discussed
below. The Independent Trustees discussed the materials initially provided by
management prior to the scheduled board meeting in a session with their
independent legal counsel and requested, and received from management,
supplemental materials to assist them in their consideration of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract.
Subsequently, the Chairman of the board and independent legal counsel to the
Independent Trustees met with management representatives to discuss generally
how information would be provided at the board meeting. The Independent Trustees
also met for several hours the evening before the board meeting and met again
after management's presentation was completed to review the disclosure that had
been presented to them at the meeting. At all of these sessions the Independent
Trustees met in session with their independent legal counsel. The Independent
Trustees also received a memorandum from their independent legal counsel
discussing the duties of board members in considering approval of advisory,
administration, distribution and service agreements.
BOARD APPROVAL OF ADVISORY AND ADMINISTRATION CONTRACT AND SUB-ADVISORY AND
SUB-ADMINISTRATION CONTRACT. In approving the Advisory and Administration
Contract and the Sub-Advisory and Sub-Administration Contract, the board,
including the Independent Trustees, considered the following factors:
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AND ADMINISTRATION
CONTRACT AND THE SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT. The board
received and considered information regarding the nature, extent and quality of
management and sub-advisory services provided to the
102
<Page>
Fund by UBS Financial Services Inc. under the Advisory and Administration
Contract and UBS Global AM under the Sub-Advisory and Sub-Administration
Contract, respectively, during the past year. The board also received a
description of the administrative and other services rendered to the Fund and
its shareholders by management, including in particular UBS Financial Services
Inc.'s oversight of UBS Global AM's provision of sub-advisory and
sub-administrative services. The board noted that information received at
regular meetings throughout the year related to the services rendered by UBS
Financial Services Inc. concerning the management of the Fund's affairs and UBS
Financial Services Inc.'s role in overseeing UBS Global AM's provision of
sub-advisory and sub-administrative services to the Fund and management's role
in coordinating providers of other services to the Fund, including custody,
accounting and transfer agency services. The board's evaluation of the services
provided by UBS Financial Services Inc. and UBS Global AM took into account the
board's knowledge and familiarity gained as board members of funds in the UBS
New York fund complex, including the scope and quality of UBS Financial Services
Inc.'s and UBS Global AM's investment management, sub-advisory and other
capabilities and the quality of management's administrative, sub-administrative
and other services. The board observed that the scope of services provided by
management had expanded over time as a result of regulatory and other
developments, including maintaining and monitoring UBS Global AM's own and the
Fund's expanded compliance programs.
The board had available to it the qualifications, backgrounds and
responsibilities of the Fund's senior personnel and the portfolio management
team primarily responsible for the day-to-day portfolio management of the Fund
and recognized that many of these persons report to the board regularly, some at
every board meeting. The board also considered, based on its knowledge of UBS
Financial Services Inc., UBS Global AM and their affiliates, the financial
resources available to management and its parent organization, UBS AG.
The board reviewed how transactions in Fund assets are effected. While UBS
Global AM's brokerage policies and practices, the standards applied in seeking
best execution, UBS Global AM's policies and practices regarding soft dollars,
the use of a broker affiliated with UBS Financial Services Inc. and UBS Global
AM and the existence of quality controls applicable to brokerage allocation
procedures were available to the board, many of these policies and practices
were deemed not applicable to the management of a money market fund's portfolio.
In addition, management also reported to the board on, among other things, its
disaster recovery plans and portfolio manager compensation arrangements.
The board concluded that, overall, it was satisfied with the nature, extent and
quality of services provided (and expected to be provided) under the Advisory
and Administration Contract and the Sub-Advisory and Sub-Administration
Contract.
103
<Page>
FUND PERFORMANCE. The board received and considered performance information of
the Fund compared to other funds (the "Performance Universe") selected by
Lipper, Inc. ("Lipper"), an independent provider of investment company data,
over the one-, three-, five- and 10-year periods ended May 31, 2005. The board
was provided with a description of the methodology Lipper used to determine the
similarity of the Fund with the funds included in the Performance Universe. The
board also noted that it had received information throughout the year at
periodic intervals with respect to the Fund's performance.
The comparative Lipper information showed that the Fund's performance was
consistently in the fourth quintile for the one-, three-, five-year and 10-year
periods shown. The Board requested that management explain the Fund's
underperformance. Management explained that, in comparison with its Performance
Universe, the Fund's portfolio was generally of higher overall credit quality
and contained relatively limited exposure to positions subject to the
alternative minimum tax ("AMT"). Management noted that, in general, its state
tax-free funds were managed in a higher quality, generally more defensive
posture than a number of their peers. Both of these portfolio management
decisions had resulted in a slightly lower yield over time when compared to the
Performance Group. Management also noted that, as New Jersey was a
relatively-high tax state, peers that may have less sensitive (or less affluent)
a client base tended to incorporate significant exposures to AMT investments,
and that these differentials in AMT investments between the Fund and its peers
were frequently the reason for the Fund's fourth quintile placement. Management
also noted that, more recently, the portfolio management team's decision to have
a very short weighted average maturity of its portfolio had penalized
performance to a degree. Based on its review and management's explanation,
including management's explanation that the Fund was being managed to provide a
higher quality alternative to its investors in comparison to some of its peers,
the board concluded that the Fund's investment performance was satisfactory.
MANAGEMENT FEES AND EXPENSE RATIOS. The board reviewed and considered the
contractual management fee (the "Contractual Management Fee") (0.50%) payable by
the Fund to UBS Financial Services Inc. in light of the nature, extent and
quality of the management and administrative services provided by UBS Financial
Services Inc. The board also reviewed and considered the actual fee rate paid by
the Fund (the "Actual Management Fee") (0.493%).
Additionally, the board received and considered information comparing the Fund's
Contractual Management Fee, Actual Management Fee and overall expenses with
those of other funds in a group of funds selected and provided by Lipper (the
"Expense Group"). The board also received information on UBS Global Asset
Management (Americas) Inc.'s (an affiliate of both UBS Financial Services Inc.
and UBS Global AM) standard institutional account fees for short-term fixed
104
<Page>
income-type accounts. The board noted that these fees were lower than the
Contractual and Actual Management Fees (which Contractual and Actual Management
Fees reflect the aggregate of fees payable to UBS Financial Services Inc. and
the sub-advisory and sub-administration fees payable to UBS Global AM), but also
noted management's explanation that comparisons with such accounts may be of
limited relevance given the different structures and regulatory requirements of
mutual funds versus such accounts, the differences in the levels of services
required by mutual funds and such accounts and the memorandum provided by the
Fund's legal counsel discussing court decisions regarding the limited usefulness
of such comparisons. Management also discussed with the board the Fund's
distribution arrangements. The board noted that UBS Global AM is the principal
distributor of the Fund's shares and has appointed UBS Financial Services Inc.
as a dealer for the sale of the Fund's shares, and that the Fund pays UBS Global
AM a monthly service fee at the annual rate of 0.12% of the Fund's average daily
net assets for providing certain shareholder services.
The comparative Lipper information showed that the Fund's Contractual Management
Fee and Actual Management Fee were in the first and fourth quintile,
respectively, of the funds in their Expense Group (I.E., second and eighth
lowest, respectively, of ten, for the comparison periods utilized in the Lipper
report). The board also noted that the Fund's total expenses of 0.755% were
seventh lowest in its Expense Group for the comparison period utilized in the
Lipper report, placing it in the fourth quintile for its Expense Group.
The board did not receive comparative information from Lipper with respect to
the Fund's sub-advisory and sub-administration fee (together, the "Sub-advisory
Fee"). The board noted that the compensation paid to UBS Global AM is paid by
UBS Financial Services Inc., not the Fund, and, accordingly, that the retention
of UBS Global AM does not increase the fees otherwise incurred by the Fund's
shareholders.
Taking all of the above into consideration, the board determined that the
Management Fee and the Sub-advisory Fee were reasonable in light of the nature,
extent and quality of the services provided to the Fund under the Investment
Advisory and Administration Contract and the Sub-Advisory and Sub-Administration
Contract, respectively.
UBS FINANCIAL SERVICES INC. PROFITABILITY. The board received and considered a
profitability analysis of UBS Financial Services Inc. and its affiliates in
providing services to the Fund. The board also received profitability
information with respect to the UBS New York fund complex as a whole. In
addition, the board received information with respect to the allocation
methodologies used in preparing this profitability data. The board also received
information about UBS Financial Services Inc.'s profitability in comparison with
the limited available
105
<Page>
industry data. UBS Financial Services Inc.'s profitability was considered not
excessive in light of the nature, extent and quality of the services provided to
the Fund.
ECONOMIES OF SCALE. The board received and considered information from
management regarding whether there have been economies of scale with respect to
the management of the Fund, whether the Fund has appropriately benefited from
any economies of scale, and whether there is potential for realization of any
further economies of scale. The board considered whether economies of scale in
the provision of services to the Fund were being passed along to the
shareholders.
The board noted that the Fund's Contractual Management Fee contained
breakpoints. Although the Fund had not yet reached the specified asset level at
which a breakpoint to its Contractual Management Fee would be triggered, the
board noted that the Fund's breakpoints reflected the potential for sharing
economies of scale with shareholders as the Fund grows. The board also noted
that as the Fund's assets have increased over time, it has realized other
economies of scale as certain expenses, such as fees for directors, auditors and
legal fees, become a smaller percentage of overall assets. The board also noted
that the Fund's Sub-advisory Fee did not contain breakpoints but also that, as
the Sub-advisory Fee is paid by UBS Financial Services Inc., not the Fund,
separate considerations of economies of scale with respect to the Sub-advisory
Fee were not relevant.
Generally, in light of UBS Financial Services Inc.'s profitability data, the
Actual (as well as Contractual) Management Fee and the breakpoints which would
provide for sharing of economies of scale with shareholders if the Fund grew,
the board believed that UBS Financial Services lnc.'s sharing of current and
potential economies of scale with the Fund was acceptable.
OTHER BENEFITS TO UBS FINANCIAL SERVICES INC. AND UBS GLOBAL AM. The board
considered other benefits received by UBS Financial Services Inc., UBS Global AM
and their affiliates as a result of their relationship with the Fund, including
the opportunity to offer additional products and services to Fund shareholders.
In light of the costs of providing investment management, sub-advisory,
administrative, sub-administrative and other services to the Fund and UBS
Financial Services Inc.'s and UBS Global AM's ongoing commitment to the Fund,
the profits and other ancillary benefits that UBS Financial Services Inc. and
its affiliates received were considered reasonable.
In light of all of the foregoing, the board approved each of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract to
continue for another year.
No single factor reviewed by the board was identified by the board as the
principal factor in determining whether to approve the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract.
The Independent
106
<Page>
Trustees were advised by separate independent legal counsel throughout the
process. The board discussed the proposed continuance of the Advisory and
Administration Contract and the Sub-Advisory and Sub-Administration Contract in
a private session with their independent legal counsel at which no
representatives of UBS Financial Services Inc. or UBS Global AM were present.
107
<Page>
(This page intentionally left blank)
<Page>
(This page intentionally left blank)
<Page>
(This page intentionally left blank)
<Page>
(This page intentionally left blank)
<Page>
(This page intentionally left blank)
<Page>
DIRECTORS/TRUSTEES
Richard Q. Armstrong
CHAIRMAN
David J. Beaubien
Alan S. Bernikow
Richard R. Burt
Meyer Feldberg
Bernard H. Garil
Heather Richardson Higgins
PRINCIPAL OFFICERS
W. Douglas Beck
PRESIDENT
Mark F. Kemper
VICE PRESIDENT AND SECRETARY
Thomas Disbrow
VICE PRESIDENT AND TREASURER
Michael H. Markowitz
VICE PRESIDENT
(TAXABLE FUNDS)
Elbridge T. Gerry, III
VICE PRESIDENT
(TAX-FREE FUNDS)
INVESTMENT ADVISOR AND ADMINISTRATOR
UBS Financial Services Inc.
1285 Avenue of the Americas
New York, New York 10019-6028
SUB-ADVISOR, SUB-ADMINISTRATOR AND PRINCIPAL UNDERWRITER
UBS Global Asset Management (US) Inc.
51 West 52nd Street
New York, New York 10019-6114
THE FINANCIAL INFORMATION INCLUDED HEREIN IS TAKEN FROM THE RECORDS OF THE FUNDS
WITHOUT EXAMINATION BY INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS WHO DO NOT
EXPRESS AN OPINION THEREON.
THIS REPORT IS NOT TO BE USED IN CONNECTION WITH THE OFFERING OF SHARES OF THE
FUNDS UNLESS ACCOMPANIED OR PRECEDED BY AN EFFECTIVE PROSPECTUS.
(C) 2006 UBS Global Asset Management (US) Inc. All rights reserved.
<Page>
[UBS LOGO]
PRESORTED
STANDARD
U.S. POSTAGE
PAID
COMPUTERSHARE
UBS GLOBAL ASSET MANAGEMENT (US) INC.
51 West 52nd Street
New York, New York 10019
<Page>
ITEM 2. CODE OF ETHICS.
Form N-CSR disclosure requirement not applicable to this filing of a semi-annual
report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Form N-CSR disclosure requirement not applicable to this filing of a semi-annual
report.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Form N-CSR disclosure requirement not applicable to this filing of a semi-annual
report.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Included as part of the report to shareholders filed under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
<Page>
The registrant's Board has established a Nominating and Corporate Governance
Committee. The Nominating and Corporate Governance Committee will consider
nominees recommended by shareholders if a vacancy occurs among those board
members who are not "interested persons" as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended. In order to recommend a nominee, a
shareholder should send a letter to the chairperson of the Nominating and
Corporate Governance Committee, Richard R. Burt, care of the Secretary of the
registrant at UBS Global Asset Management (US) Inc., 51 West 52nd Street, New
York, New York 10019-6114, and indicate on the envelope "Nominating and
Corporate Governance Committee." The shareholder's letter should state the
nominee's name and should include the nominee's resume or curriculum vitae, and
must be accompanied by a written consent of the individual to stand for election
if nominated for the Board and to serve if elected by shareholders.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940, as amended) are effective based on their evaluation of
these controls and procedures as of a date within 90 days of the
filing date of this document.
(b) The registrant's principal executive officer and principal financial
officer are aware of no changes in the registrant's internal control
over financial reporting (as defined in Rule 30a-3(d) under the
Investment Company Act of 1940, as amended) that occurred during the
registrant's last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
(a) (1) Code of Ethics - Form N-CSR disclosure requirement not applicable
to this filing of a semi-annual report.
(a) (2) Certifications of principal executive officer and principal
financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 is attached hereto as Exhibit EX-99.CERT.
(a) (3) Written solicitation to purchase securities under Rule 23c-1 under
the Investment Company Act of 1940 sent or given during the period
covered by the report by or on behalf of the registrant to 10 or more
persons - not applicable to the registrant.
(b) Certifications of principal executive officer and principal financial
officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is
attached hereto as Exhibit EX-99.906CERT.
<Page>
SIGNATURES
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.
UBS Municipal Money Market Series
By: /s/ W. Douglas Beck
-------------------
W. Douglas Beck
President
Date: March 10, 2006
--------------
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/ W. Douglas Beck
-------------------
W. Douglas Beck
President
Date: March 10, 2006
--------------
By: /s/ Thomas Disbrow
------------------
Thomas Disbrow
Vice President and Treasurer
Date: March 10, 2006
--------------