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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: 811-03946
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UBS Managed Municipal Trust
(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
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: June 30, 2006
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ITEM 1. REPORTS TO STOCKHOLDERS.
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[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
ANNUAL REPORT
JUNE 30, 2006
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UBS RMA
August 15, 2006
DEAR SHAREHOLDER,
We present you with the annual 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 fiscal year ended June 30, 2006.
PERFORMANCE
With short-term yields steadily rising in conjunction with repeated Federal
Reserve Board rate hikes, the yields available on money market securities moved
higher over the reporting period. As of June 30, 2006, the Funds' seven-day
current yields were: UBS RMA Money Market Portfolio: 4.60%; UBS RMA U.S.
Government Portfolio: 4.21%; UBS RMA Tax-Free Fund Inc.: 3.21%; UBS RMA
California Municipal Money Fund: 3.14%; UBS RMA New York Municipal Money Fund:
3.13%; and UBS RMA New Jersey Municipal Money Fund: 2.92%. (For more on the
funds' performance, refer to "Performance and portfolio characteristics at a
glance" beginning on page 10.)
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 (Americas) 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 (Americas) 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
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1
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UBS RMA
AN INTERVIEW WITH THE PORTFOLIO MANAGERS
Q. CAN YOU DESCRIBE THE ECONOMIC ENVIRONMENT DURING THE REPORTING PERIOD?
A. Overall, the US economy expanded at a solid pace during the fiscal year.
During the third quarter of 2005, gross domestic product (GDP) grew 4.1%
before slipping to 1.7% in the last three months of the year--the first
quarter that GDP growth didn't surpass 3.0% in almost three years. During
the second half of the fiscal year, however, GDP rose at a 4.0% average
annual rate. That said, higher interest rates, a cooling housing market and
continued high oil prices could cause economic growth to moderate in the
months ahead.
Q. HOW DID THE FEDERAL RESERVE BOARD (THE "FED") REACT IN THIS ECONOMIC
ENVIRONMENT?
A. As has been the case since June 2004, the Fed continued to raise interest
rates during the reporting period. While the leadership at the Fed changed
from Alan Greenspan to Ben Bernanke in early 2006, there was little
deviation from its tightening campaign to ward off inflation. During the
12-month reporting period, the Fed raised short-term interest rates eight
times. Since June 30, 2004, the Fed increased rates 17 straight times,
bringing the federal funds target rate from 1.00% to 5.25%, before pausing
after the reporting period ended. Coinciding with the latest rate hike in
June 2006, the Fed said, "The extent and timing of any additional
firming...will depend on the evolution of the outlook for both inflation
and economic growth, as implied by incoming information." To that end, the
Fed could continue to raise rates should economic data suggest it were
appropriate.
As expected, short- and long-term yields rose over the reporting period.
During the 12-months ended June 30, 2006, two-year Treasury yields
increased from 3.66% to 5.16%. Over the same period, 10-year Treasury
yields moved from 3.94% to 5.15%.
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2
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UBS RMA
Q. HOW WERE THE PORTFOLIOS POSITIONED DURING THE FISCAL YEAR?
A. Throughout the reporting period, we employed a "bulleted" strategy within
the portfolios. A bulleted strategy entails focusing on securities with
particular maturities--in this case, we sought to hold securities that
matured shortly before Fed meetings, which gave us the opportunity to
purchase even higher-yielding securities after each Fed rate hike. We
believe this generally was a successful strategy and helped us to capture
yield opportunities during the period.
We also maintained a defensive position within most of the portfolios. In
the UBS RMA Money Market Portfolio, we kept its weighted average maturity
relatively low throughout the reporting period, allowing it to drift
slightly higher to approximately 45 days. For the UBS RMA U.S. Government
Portfolio, we shortened its weighted average maturity from 38 to 23 days
over the period. Although rising interest rates became less of a concern as
the period progressed, we continued to find short-term Treasuries and
repurchase agreements more attractive than longer-dated Treasuries.
For the tax-exempt Portfolios, we also maintained shorter weighted average
maturities relative to our peers during the reporting period. This was
based on expectations for further rate hikes and a lack of attractive
opportunities from longer-dated securities. We allowed most Portfolios'
weighted average maturities to increase somewhat as the period progressed,
as we believed that interest rates were unlikely to continue rising as
dramatically as they had during the beginning of the reporting period.
Q. WHAT TYPES OF SECURITIES DID YOU EMPHASIZE FOR THE PORTFOLIOS?
A. As has been our focus in the past, quality, liquidity and yield remained
paramount in our selection process for all six of the portfolios. Within
UBS RMA U.S. Government Portfolio, we increased its exposure to repurchase
agreements over the course of the period. As of June 30, 2006, repurchase
agreements represented over 65% of its portfolio. Within UBS RMA Money
Market Portfolio, commercial paper and certificates of deposit continued to
make up a significant portion of the Portfolio's holdings. We
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3
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UBS RMA
reduced this Portfolio's exposure to US government agency obligations over
the reporting period, transferring assets to corporate floating rate
securities, which we believed represented an attractive value.
Within the tax-exempt portfolios, we continued to emphasize 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. In addition,
as previously noted, we also found attractive opportunities in commercial
paper.
Q. WHAT FACTORS DO YOU BELIEVE WILL AFFECT THE PORTFOLIOS OVER THE COMING
MONTHS?
A. Despite the pause in interest rate hikes in August, we feel the Fed will
likely look to maintain its inflation fighting credibility over the coming
months, which could mean putting a greater significance on containing
inflation than being accommodative to economic growth. Moderation in the
housing market and high energy prices continue to be a point of concern.
Overall, the portfolios remain well diversified, and we will continue to
seek yield opportunities and liquidity in the portfolios.
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4
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UBS RMA
We thank you for your continued support and welcome any comments or questions
you may have. For additional information on the UBS Funds,* please contact your
financial advisor or visit us at www.ubs.com/globalam-us.
/s/ W. Douglas Beck
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W. Douglas Beck, CFA
PRESIDENT
UBS RMA Money Fund Inc.
(UBS RMA Money Market Portfolio and
UBS RMA U.S. Government Portfolio)
UBS RMA Tax-Free Fund Inc.
UBS Managed Municipal Trust
(UBS RMA California Municipal
Money Fund and UBS RMA
New York Municipal Money Fund)
UBS Municipal Money Market
Series (UBS RMA New Jersey
Municipal Money Fund)
EXECUTIVE DIRECTOR
UBS Global Asset Management
(Americas) Inc.
/s/ Elbridge T. Gerry
- ----------------------------------------
Elbridge T. Gerry III
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
MANAGING DIRECTOR
UBS Global Asset Management
(Americas) Inc.
/s/ Michael Markowitz
- ----------------------------------------
Michael Markowitz
PORTFOLIO MANAGER
UBS RMA Money Market Portfolio
UBS RMA U.S. Government Portfolio
MANAGING DIRECTOR
UBS Global Asset Management
(Americas) Inc.
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5
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UBS RMA
/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 (Americas) Inc.
/s/ Robert Sabatino
- ----------------------------------------
Robert Sabatino
PORTFOLIO MANAGER
UBS RMA Money Market Portfolio
UBS RMA U.S. Government Portfolio
DIRECTOR
UBS Global Asset Management (Americas) Inc.
THIS LETTER IS INTENDED TO ASSIST SHAREHOLDERS IN UNDERSTANDING HOW THE FUNDS
AND PORTFOLIOS PERFORMED DURING THE 12 MONTHS ENDED JUNE 30, 2006. THE VIEWS AND
OPINIONS IN THE LETTER WERE CURRENT AS OF AUGUST 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.
* 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.
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6
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UBS RMA
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, January 1, 2006 to June
30, 2006.
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
* 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.
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7
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UBS RMA
UNDERSTANDING YOUR FUNDS' EXPENSES (UNAUDITED)
(CONTINUED)
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.
UBS RMA MONEY MARKET PORTFOLIO
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JANUARY 1, 2006 JUNE 30, 2006 01/01/06 TO 06/30/06
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Actual $1,000.00 $1,020.80 $2.91
Hypothetical (5% annual
return before expenses) 1,000.00 1,021.92 2.91
* Expenses are equal to the Fund's annualized net expense ratio of 0.58%,
multiplied by the average account value over the period, multiplied by 181
divided by 365 (to reflect the one-half year period).
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8
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UBS RMA
UNDERSTANDING YOUR FUNDS' EXPENSES (UNAUDITED)
(CONTINUED)
UBS RMA U.S. GOVERNMENT PORTFOLIO
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JANUARY 1, 2006 JUNE 30, 2006 01/01/06 TO 06/30/06
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Actual $1,000.00 $1,019.60 $3.15
Hypothetical (5% annual
return before expenses) 1,000.00 1,021.67 3.16
* Expenses are equal to the Fund's annualized expense ratio of 0.63%,
multiplied by the average account value over the period, multiplied by 181
divided by 365 (to reflect the one-half year period).
UBS RMA TAX-FREE FUND INC.
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JANUARY 1, 2006 JUNE 30, 2006 01/01/06 TO 06/30/06
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Actual $1,000.00 $1,013.40 $3.00
Hypothetical (5% annual
return before expenses) 1,000.00 1,021.82 3.01
* Expenses are equal to the Fund's annualized expense ratio of 0.60%,
multiplied by the average account value over the period, multiplied by 181
divided by 365 (to reflect the one-half year period).
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JANUARY 1, 2006 JUNE 30, 2006 01/01/06 TO 06/30/06
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Actual $1,000.00 $1,012.90 $3.19
Hypothetical (5% annual
return before expenses) 1,000.00 1,021.62 3.21
* Expenses are equal to the Fund's annualized expense ratio of 0.64%,
multiplied by the average account value over the period, multiplied by 181
divided by 365 (to reflect the one-half year period).
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9
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UBS RMA
UNDERSTANDING YOUR FUNDS' EXPENSES (UNAUDITED)
(CONCLUDED)
UBS RMA NEW YORK MUNICIPAL MONEY FUND
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JANUARY 1, 2006 JUNE 30, 2006 01/01/06 TO 06/30/06
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Actual $1,000.00 $1,012.90 $3.39
Hypothetical (5% annual
return before expenses) 1,000.00 1,021.42 3.41
* Expenses are equal to the Fund's annualized expense ratio of 0.68%,
multiplied by the average account value over the period, multiplied by 181
divided by 365 (to reflect the one-half year period).
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
JANUARY 1, 2006 JUNE 30, 2006 01/01/06 TO 06/30/06
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Actual $1,000.00 $1,011.90 $4.14
Hypothetical (5% annual
return before expenses) 1,000.00 1,020.68 4.16
* Expenses are equal to the Fund's annualized expense ratio of 0.83%,
multiplied by the average account value over the period, multiplied by 181
divided by 365 (to reflect the one-half year period).
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10
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UBS RMA
PERFORMANCE AND PORTFOLIO CHARACTERISTICS AT A GLANCE (UNAUDITED)
UBS RMA MONEY MARKET PORTFOLIO
YIELDS AND CHARACTERISTICS 6/30/06 12/31/05 6/30/05
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Seven-day current yield* 4.60% 3.73% 2.63%
Seven-day effective yield* 4.70 3.80 2.66
Weighted average maturity** 45 days 43 days 42 days
Net assets (bn) $ 10.6 $ 10.4 $ 10.4
PORTFOLIO COMPOSITION*** 6/30/06 12/31/05 6/30/05
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Commercial paper 51.9% 53.7% 53.1%
Certificates of deposit 21.7 20.1 20.2
Short-term corporate obligations 14.9 17.6 14.0
US government agency obligations 5.9 7.2 10.1
Bank notes 3.3 1.0 1.0
Time deposit 1.1 -- --
Money market funds 0.6 0.3 0.5
Repurchase agreements 0.3 0.0+ 1.0
Other assets less liabilities 0.3 0.1 0.1
TOTAL 100.0% 100.0% 100.0%
UBS RMA U.S. GOVERNMENT PORTFOLIO
YIELDS AND CHARACTERISTICS 6/30/06 12/31/05 6/30/05
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Seven-day current yield* 4.21% 3.33% 2.46%
Seven-day effective yield* 4.30 3.38 2.49
Weighted average maturity** 23 days 43 days 38 days
Net assets (bn) $ 0.8 $ 1.1 $ 1.1
PORTFOLIO COMPOSITION*** 6/30/06 12/31/05 6/30/05
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Repurchase agreements 65.1% 64.0% 53.1%
US government obligations 40.9 34.0 50.0
Money market funds 0.0+ 0.5 0.6
Other assets less liabilities (6.0) 1.5 (3.7)
TOTAL 100.0% 100.0% 100.0%
* 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 WOULD 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 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 Portfolios are actively managed and their compositions will vary over
time.
+ Weighting represents less than 0.05% of net assets as of the dates
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.
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UBS RMA
PERFORMANCE AND PORTFOLIO CHARACTERISTICS AT A GLANCE (UNAUDITED) (CONTINUED)
UBS RMA TAX-FREE FUND INC.
YIELDS AND CHARACTERISTICS 6/30/06 12/31/05 6/30/05
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Seven-day current yield* 3.21% 2.78% 1.88%
Seven-day effective yield* 3.26 2.82 1.90
Weighted average maturity** 14 days 19 days 11 days
Net assets (bn) $ 3.6 $ 3.4 $ 3.4
PORTFOLIO COMPOSITION*** 6/30/06 12/31/05 6/30/05
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Municipal bonds and notes 90.4% 95.0% 92.2%
Tax-exempt commercial paper 10.6 7.6 8.2
Money market fund -- 0.0+ --
Other assets less liabilities (1.0) (2.6) (0.4)
TOTAL 100.0% 100.0% 100.0%
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
YIELDS AND CHARACTERISTICS 6/30/06 12/31/05 6/30/05
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Seven-day current yield* 3.14% 2.67% 1.71%
Seven-day effective yield* 3.18 2.70 1.73
Weighted average maturity** 15 days 18 days 20 days
Net assets (mm) $941.6 $934.1 $808.8
PORTFOLIO COMPOSITION*** 6/30/06 12/31/05 6/30/05
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Municipal bonds and notes 92.0% 89.3% 92.3%
Tax-exempt commercial paper 11.0 10.4 10.1
Money market fund -- -- 0.3
Other assets less liabilities (3.0) 0.3 (2.7)
TOTAL 100.0% 100.0% 100.0%
* 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 COULD 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.
+ 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.
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UBS RMA
PERFORMANCE AND PORTFOLIO CHARACTERISTICS AT A GLANCE (UNAUDITED) (CONCLUDED)
UBS RMA NEW YORK MUNICIPAL MONEY FUND
YIELDS AND CHARACTERISTICS 6/30/06 12/31/05 6/30/05
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Seven-day current yield* 3.13% 2.70% 1.76%
Seven-day effective yield* 3.18 2.73 1.77
Weighted average maturity** 12 days 17 days 7 days
Net assets (mm) $612.7 $626.2 $596.1
PORTFOLIO COMPOSITION*** 6/30/06 12/31/05 6/30/05
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Municipal bonds and notes 92.4% 94.0% 93.5%
Tax-exempt commercial paper 10.9 7.6 6.2
Other assets less liabilities (3.3) (1.6) 0.3
TOTAL 100.0% 100.0% 100.0%
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
YIELDS AND CHARACTERISTICS 6/30/06 12/31/05 6/30/05
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Seven-day current yield* 2.92% 2.52% 1.64%
Seven-day effective yield* 2.96 2.55 1.65
Weighted average maturity** 20 days 29 days 10 days
Net assets (mm) $134.6 $151.9 $134.2
PORTFOLIO COMPOSITION*** 6/30/06 12/31/05 6/30/05
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Municipal bonds and notes 96.7% 97.5% 94.6%
Tax-exempt commercial paper 3.1 -- 5.2
Money market fund -- 1.7 --
Other assets less liabilities 0.2 0.8 0.2
TOTAL 100.0% 100.0% 100.0%
* 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 COULD 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.
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UBS RMA MONEY MARKET PORTFOLIO
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
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US GOVERNMENT AGENCY OBLIGATIONS--5.91%
$210,000 Federal Home Loan Bank 07/06/06 to 4.998 to
09/13/06 5.190%* $209,975,919
178,757 Federal Home Loan Bank 07/14/06 to 5.145 to
07/19/06 5.155@ 178,368,212
239,575 Federal Home Loan 10/23/06 to 4.250 to
Mortgage Corp. 07/09/07 5.500 239,575,000
------------
Total US government agency obligations (cost--$627,919,131) 627,919,131
BANK NOTES--3.26%
BANKING-NON-US--0.94%
100,000 Royal Bank of Scotland PLC 08/24/06 5.218* 100,020,274
BANKING-US--2.32%
247,000 Bank of America N.A. 07/03/06 to 5.310 to
08/15/06 5.315 247,000,000
------------
Total bank notes (cost--$347,020,274) 347,020,274
TIME DEPOSIT--1.15%
BANKING-NON-US--1.15%
122,000 National City Bank, Grand
Cayman Islands
(cost--$122,000,000) 07/03/06 5.250 122,000,000
CERTIFICATES OF DEPOSIT--21.75%
NON-US--13.50%
94,000 ABN AMRO Bank NV
(Chicago) 01/24/07 4.850 94,000,000
100,000 Barclays Bank PLC 07/03/06 5.310* 100,000,000
98,000 Canadian Imperial Bank of
Commerce 07/17/06 5.020 98,000,000
190,000 Credit Suisse First Boston 07/05/06 to 4.960 to
07/12/06 5.075 190,000,000
85,000 Credit Suisse First Boston 07/12/06 5.015* 84,987,518
214,000 Deutsche Bank AG 08/03/06 to 4.170 to
03/06/07 5.090 214,000,000
235,500 Fortis Bank NV-SA 07/07/06 to 3.930 to
02/06/07 4.930 235,500,000
95,000 Natexis Banque Populaires 07/03/06 5.300* 95,000,000
75,000 Royal Bank of Canada 09/15/06 4.715 75,000,000
45,000 Royal Bank of Scotland PLC 07/24/06 5.242* 44,991,954
76,000 Societe Generale 07/03/06 5.320* 76,000,000
27,000 Societe Generale 11/17/06 4.700 27,000,000
- --------------------------------------------------------------------------------
14
<Page>
UBS RMA MONEY MARKET PORTFOLIO
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT--(CONCLUDED)
NON-US--(CONCLUDED)
$100,000 Svenska Handelsbanken 11/08/06 4.750 $ 100,000,000
--------------
1,434,479,472
US--8.25%
80,000 American Express Centurion
Bank 07/10/06 5.080 80,000,000
180,000 American Express, Federal 07/11/06 to 5.000 to
Savings Bank 07/26/06 5.300% 180,000,000
265,000 First Tennessee Bank N.A. 07/19/06 to 5.180 to
(Memphis) 08/24/06 5.230 265,000,000
120,000 Wachovia Bank N.A.
(Charlotte) 09/29/06 5.459* 119,985,338
100,000 Wells Fargo Bank N.A. 07/03/06 5.300* 99,998,239
132,000 Wells Fargo Bank N.A. 07/20/06 5.160 132,000,000
--------------
876,983,577
--------------
Total certificates of deposit (cost--$2,311,463,049) 2,311,463,049
COMMERCIAL PAPER@--51.87%
ASSET BACKED-BANKING--0.94%
100,000 Atlantis One Funding 07/10/06 5.095 99,872,625
ASSET BACKED-MISCELLANEOUS--23.19%
265,750 Amsterdam Funding Corp. 07/06/06 to 5.050 to
07/20/06 5.240 265,177,499
190,789 Barton Capital LLC 07/03/06 to 5.120 to
07/12/06 5.270 190,642,122
162,128 Bryant Park Funding LLC 07/10/06 to 5.090 to
07/20/06 5.250 161,755,865
40,000 Chariot Funding LLC 07/17/06 5.210 39,907,378
212,609 Falcon Asset Securitization 07/05/06 to 5.050 to
Corp. 07/19/06 5.220 212,289,583
218,650 Kitty Hawk Funding Corp. 07/17/06 to 5.180 to
07/19/06 5.230 218,123,583
212,808 Old Line Funding Corp. 07/06/06 to 5.070 to
07/12/06 5.120 212,515,012
258,439 Preferred Receivables 07/13/06 to 5.110 to
Funding Corp. 07/14/06 5.150 257,970,280
150,848 Regency Markets No.1 LLC 07/17/06 to 5.200 to
07/21/06 5.280 150,452,707
284,720 Sheffield Receivables Corp. 07/12/06 to 5.120 to
08/02/06 5.300 284,024,957
- --------------------------------------------------------------------------------
15
<Page>
UBS RMA MONEY MARKET PORTFOLIO
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
COMMERCIAL PAPER@--(CONTINUED)
ASSET BACKED-MISCELLANEOUS--(CONCLUDED)
$165,876 Thunderbay Funding 07/17/06 to 5.180 to
08/03/06 5.230 $ 165,353,509
66,940 Variable Funding Capital
Corp. 07/20/06 5.220 66,755,580
85,450 Windmill Funding Corp. 07/20/06 5.120 85,219,095
154,900 Yorktown Capital LLC 07/20/06 5.230 154,472,433
--------------
2,464,659,603
ASSET BACKED-SECURITIES--10.12%
125,000 Cancara Asset
Securitization LLC 07/18/06 5.205% 124,692,761
91,000 CC (USA), Inc. (Centauri) 07/24/06 to 5.000 to
10/02/06 5.390 90,280,117
103,000 Galaxy Funding, Inc. 07/07/06 to 5.020 to
08/21/06 5.100 102,639,125
210,000 Grampian Funding LLC 09/12/06 to 4.880 to
11/17/06 5.120 206,779,278
248,900 Scaldis Capital LLC 07/07/06 to 5.100 to
08/29/06 5.190 247,945,950
304,250 Solitaire Funding LLC 07/12/06 to 5.130 to
08/23/06 5.300 303,479,109
--------------
1,075,816,340
AUTOMOBILE OEM--0.82%
86,630 BMW US Capital LLC 07/03/06 5.260 86,604,685
BANKING-NON-US--1.80%
61,000 Alliance & Leicester PLC 07/06/06 4.900 60,958,486
71,000 Depfa Bank PLC 07/05/06 4.520 70,964,342
60,000 Nationwide Building Society 09/26/06 5.395 59,217,725
--------------
191,140,553
BANKING-US--3.52%
100,000 Barclays US Funding Corp. 08/09/06 5.050 99,452,917
279,000 Nordea N.A., Inc. 07/14/06 to 5.040 to
02/26/07 5.140 274,919,098
--------------
374,372,015
BROKERAGE--5.67%
188,000 Bear Stearns Cos., Inc. 07/10/06 to 5.100 to
07/28/06 5.280 187,491,800
100,000 Goldman Sachs Group, Inc. 07/14/06 5.377 100,000,000
- --------------------------------------------------------------------------------
16
<Page>
UBS RMA MONEY MARKET PORTFOLIO
Statement of net assets--June 30, 2006
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ----------------------------------------------------------------------------------------
COMMERCIAL PAPER@--(CONCLUDED)
BROKERAGE--(CONCLUDED)
$100,000 Greenwich Capital Holdings,
Inc. 07/05/06 5.089* $ 100,000,000
215,000 Morgan Stanley 07/03/06 5.180 to
5.363* 215,000,000
--------------
602,491,800
FINANCE-CAPTIVE AUTOMOTIVE--1.87%
199,700 Toyota Motor Credit Corp. 07/07/06 to 5.100 to
07/28/06 5.255 199,222,057
FINANCE-NONCAPTIVE DIVERSIFIED--3.52%
195,725 CIT Group, Inc. 07/07/06 to 5.070 to
07/18/06 5.210 195,408,968
182,000 General Electric
Capital Corp. 10/06/06 to 4.565 to
01/05/07 5.030% 178,616,028
374,024,996
UTILITIES-OTHER--0.42% --------------
45,000 RWE AG 07/05/06 5.000 44,975,000
--------------
Total commercial paper (cost--$5,513,179,674) 5,513,179,674
SHORT-TERM CORPORATE OBLIGATIONS--14.88%
ASSET BACKED-SECURITIES--7.44%
265,000 Beta Finance, Inc.** 07/03/06 to 5.138 to
08/25/06 5.310* 264,972,494
45,000 CC (USA), Inc. (Centauri)** 08/22/06 5.310* 44,995,993
120,000 CC (USA), Inc. (Centauri)** 04/25/07 5.315 119,995,061
80,000 Dorada Finance, Inc.** 08/25/06 5.175* 79,990,109
175,000 K2 (USA) LLC** 07/03/06 to 5.154 to
07/17/06 5.315* 174,992,772
47,000 Links Finance LLC** 07/17/06 5.013* 46,998,609
58,500 Links Finance LLC** 02/13/07 5.000 58,500,000
--------------
790,445,038
AUTOMOBILE OEM--0.57%
60,650 American Honda Finance Corp.** 08/22/06 to 5.229 to
09/21/06 5.454* 60,660,431
BANKING-NON-US--2.57%
100,000 ANZ National
International Ltd.** 07/07/06 5.110* 100,000,000
</Table>
- --------------------------------------------------------------------------------
17
<Page>
UBS RMA MONEY MARKET PORTFOLIO
Statement of net assets--June 30, 2006
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ----------------------------------------------------------------------------------------
SHORT-TERM CORPORATE OBLIGATIONS--(CONCLUDED)
BANKING-NON-US--(CONCLUDED)
$173,000 HBOS Treasury Services
PLC** 07/03/06 5.159* $ 173,000,000
--------------
273,000,000
BANKING-US--0.88%
93,780 Citigroup Global Markets
Holdings, Inc. 09/01/06 5.331* 93,802,044
FINANCE-CAPTIVE AUTOMOTIVE--1.02%
108,100 Toyota Motor Credit Corp. 07/03/06 5.300* 108,100,000
FINANCE-NONCAPTIVE CONSUMER--2.02%
215,000 HSBC Finance Corp. 07/03/06 to 5.225 to
09/01/06 5.271%* 215,087,179
FINANCE-NONCAPTIVE DIVERSIFIED--0.38%
40,000 General Electric Capital Corp. 07/10/06 5.250* 40,000,000
Total short-term corporate obligations --------------
(cost--$1,581,094,692) 1,581,094,692
REPURCHASE AGREEMENT--0.28%
30,000 Repurchase agreement dated
06/30/06 with
Goldman Sachs & Co.,
collateralized by
$30,693,000 Federal Home
Loan Bank obligations, zero
coupon due 07/21/06;
(value--$30,600,921);
proceeds: $30,013,075
(cost--$30,000,000) 07/03/06 5.230 30,000,000
</Table>
- --------------------------------------------------------------------------------
18
<Page>
UBS RMA MONEY MARKET PORTFOLIO
Statement of net assets--June 30, 2006
<Table>
<Caption>
NUMBER OF
SHARES INTEREST
(000) RATES VALUE
- ----------------------------------------------------------------------------------------
MONEY MARKET FUNDS+--0.59%
31,317 AIM Liquid Assets Portfolio 5.095 31,317,161
31,320 BlackRock Provident
Institutional TempFund 5.054 31,320,008
---------------
Total money market funds (cost--$62,637,169) 62,637,169
Total investments (cost--$10,595,313,989)
which approximates cost for federal income
tax purposes)--99.69% 10,595,313,989
Other assets in excess of liabilities--0.31% 32,638,042
Net assets (applicable to 10,629,208,058
shares of common stock outstanding ---------------
equivalent to $1.00 per share)--100.00% $10,627,952,031
</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
June 30, 2006, and reset periodically.
** Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities, which represent 10.58% of net assets as of June
30, 2006, 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 rates shown reflect yield at June 30, 2006.
OEM Original Equipment Manufacturer
The table below details the Portfolio's transaction activity in an affiliated
issuer for the year ended June 30, 2006. There are no investments in affiliated
issuers at June 30, 2006.
<Table>
<Caption>
INCOME
EARNED FROM
PURCHASES SALES AFFILIATE FOR
DURING THE DURING THE THE YEAR
SECURITY VALUE AT YEAR ENDED YEAR ENDED VALUE AT ENDED
DESCRIPTION 06/30/2005 06/30/06 06/30/06 06/30/06 06/30/06
- ---------------------------------------------------------------------------------
UBS Private
Money Market
Fund LLC $-- $743,757 $743,757 $-- $13
</Table>
- --------------------------------------------------------------------------------
19
<Page>
UBS RMA MONEY MARKET PORTFOLIO
Statement of net assets--June 30, 2006
ISSUER BREAKDOWN BY COUNTRY (UNAUDITED)
PERCENTAGE OF PORTFOLIO ASSETS
- --------------------------------------------------------------------------------
United States 80.0%
United Kingdom 5.1
Switzerland 2.6
Belgium 2.2
Germany 2.0
France 1.9
Canada 1.6
Grand Cayman Islands 1.2
New Zealand 0.9
Sweden 0.9
Netherlands 0.9
Ireland 0.7
Total 100.0%
Weighted average maturity--45 days
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
20
<Page>
UBS RMA U.S. GOVERNMENT PORTFOLIO
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
US GOVERNMENT OBLIGATIONS--40.88%
$180,000 US Treasury Bills 08/10/06 to 4.715 to
09/28/06 4.873%@ $178,450,681
50,000 US Treasury Bills (1) 08/17/06 4.675@ 49,694,826
117,650 US Treasury Notes (1) 07/31/06 2.750 117,496,673
------------
Total US government obligations (cost--$345,642,180) 345,642,180
REPURCHASE AGREEMENTS--59.06%
145,000 Repurchase agreement dated
06/30/06 with Bear
Stearns & Co.,
collateralized by
$55,475,000 US Treasury
Bonds, 6.125% to 7.625%
due 02/15/25 to 08/15/29,
$3,215,000 US Treasury
Inflation Index Bonds,
2.375% due 01/15/25 and
$79,687,000 US Treasury
Notes, 3.375% to 3.625%
due 02/28/07 to 06/15/10;
(value--$147,956,174);
proceeds: $145,053,167 07/03/06 4.400 145,000,000
49,000 Repurchase agreement dated
06/30/06 with Deutsche
Bank Securities, Inc.,
collateralized by
$14,084,890 US Treasury
Notes, 2.250% to 5.125%
due 02/15/07 to 06/30/08,
$10,863,658 US Treasury
Stripped Interest Payment
Bonds, zero coupon due
02/15/08 and $81,880,269
US Treasury Stripped
Principal Payment Bonds,
zero coupon due 02/15/25;
(value--$49,980,000);
proceeds: 49,018,375 07/03/06 4.500 49,000,000
- --------------------------------------------------------------------------------
21
<Page>
UBS RMA U.S. GOVERNMENT PORTFOLIO
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--(CONCLUDED)
$50,000 Repurchase agreement dated
06/30/06 with Goldman
Sachs Group, Inc.,
collateralized by
$54,164,000 US Treasury
Notes, 3.875% due
02/15/13;
(value--$51,000,875);
proceeds: $50,018,333 07/03/06 4.400% $ 50,000,000
125,000 Repurchase agreement dated
06/30/06 with
Merrill Lynch & Co.,
collateralized by
$128,170,000 US Treasury
Notes, 4.125%
due 08/15/08;
(value--$127,502,657);
proceeds: $125,046,875 07/03/06 4.500 125,000,000
130,000 Repurchase agreement dated
06/30/06 with Morgan
Stanley, collateralized
by $102,950,059 US
Treasury Inflation Index
Notes, 3.625%
due 01/15/08;
(value--$132,601,107);
proceeds: $130,048,750 07/03/06 4.500 130,000,000
328 Repurchase agreement dated
06/30/06 with State
Street Bank & Trust Co.,
collateralized by
$337,429 US Treasury
Notes, 4.125%
due 08/15/08;
(value--$335,742);
proceeds: $328,113 07/03/06 4.130 328,000
------------
Total repurchase agreements (cost--$499,328,000) 499,328,000
- --------------------------------------------------------------------------------
22
<Page>
UBS RMA U.S. GOVERNMENT PORTFOLIO
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
INVESTMENTS OF CASH COLLATERAL FROM SECURITIES LOANED--6.02%
REPURCHASE AGREEMENTS--6.00%
$10,715 Repurchase agreement dated
06/30/06 with
Deutsche Bank Securities, Inc.,
collateralized by $3,080,110
US Treasury Notes, 2.250% to
5.125% due 02/15/07 to
06/30/08, $2,375,685
US Treasury Stripped Interest
Payment Bonds, zero coupon
due 02/15/18 and $17,905,731
US Treasury Stripped Principal
Payment Bonds, zero coupon
due 02/15/25;
(value--$10,929,721);
proceeds: $10,719,430 07/03/06 4.500% $ 10,715,412
40,000 Repurchase agreement dated
06/30/06 with Morgan Stanley,
collateralized by $31,676,941
US Treasury Inflation Index
Notes, 3.625% due 01/15/08;
(value--$40,800,342);
proceeds: $40,015,000 07/03/06 4.500 40,000,000
------------
Total repurchase agreements (cost--$50,715,412) 50,715,412
NUMBER OF
SHARES
(000)
- ---------
MONEY MARKET FUNDS+--0.02%
138 AIM Treasury Portfolio 4.529 138,407
++ 0 Federated Treasury Obligation Fund 4.348 99
++ 0 Provident Treasury Trust 4.505 80
------------
Total money market funds (cost--$138,586) 138,586
Total investments of cash collateral from
securities loaned (cost--$50,853,998) 50,853,998
Total investments (cost--$895,824,178
which approximates cost for
federal income tax purposes)--105.96% 895,824,178
Liabilities in excess of other assets--(5.96)% (50,374,258)
Net assets (applicable to 845,979,585
shares of common stock outstanding ------------
equivalent to $1.00 per share)--100.00% $845,449,920
@ Interest rates shown are the discount rates at date of purchase.
+ Interest rates shown reflect yield at June 30, 2006.
++ Amount represents less than 500 shares.
(1) Security, or portion thereof, was on loan at June 30, 2006.
Weighted average maturity -- 23 days
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
23
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--90.43%
ALABAMA--2.52%
$27,800 Alabama Special Care Facilities
Financing Authority of Mobile
(Ascension Health Credit Group),
Series B A 3.950% $27,800,000
12,375 Birmingham Refunding, Series A A 3.950 12,375,000
10,900 Jefferson County Limited
Obligation School Warrants,
Series B A 3.990 10,900,000
11,265 Mobile Industrial Development
Board, Dock and Wharf Revenue
Refunding (Holnam, Inc. Project),
Series A A 3.950 11,265,000
12,700 Port City Medical Clinic Board
Revenue (Infirmary Health
Systems), Series A A 3.950 12,700,000
14,875 University of Alabama Revenue
(University Hospital), Series C A 3.950 14,875,000
-----------
89,915,000
ALASKA--0.81%
28,870 Alaska Housing Finance Corp.,
Series A A 3.980 28,870,000
ARIZONA--3.37%
11,200 Apache County Industrial
Development Authority
(Tucson Electric Power
Co.-Springerville Project),
Series B A 4.000 11,200,000
35,000 Apache County Industrial
Development Authority
(Tucson Electric Power
Co.-Springerville Project),
Series C A 3.930 35,000,000
29,985 Arizona Health Facilities
Authority Revenue
(Banner Health), Series B A 3.960 29,985,000
- --------------------------------------------------------------------------------
24
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
ARIZONA--(CONCLUDED)
$23,000 Arizona Health Facilities
Authority Revenue
(Health Facilities-Catholic West),
Series B A 3.980% $ 23,000,000
12,700 McAllister Academic Village LLC
Revenue (Arizona State
University Project), Series B A 3.950 12,700,000
8,200 Pima County Industrial
Development Authority
(Tucson Electric Power
Co.-Irvington Project), Series A A 4.000 8,200,000
------------
120,085,000
COLORADO--4.19%
6,195 Colorado Educational and
Cultural Facilities Authority
Revenue (National Jewish
Federation Board Program) A 4.030 6,195,000
15,000 Colorado Educational and
Cultural Facilities Authority
Revenue (National Jewish
Federation Board Program),
Series D-1 A 4.030 15,000,000
12,300 Colorado Educational and
Cultural Facilities Authority
Revenue Refunding (National
Jewish Federation Board
Program), Series A-8 A 4.030 12,300,000
12,620 Colorado Educational and
Cultural Facilities Authority
Revenue Refunding (National
Jewish Federation Board
Program), Series B-1 A 4.030 12,620,000
11,060 Colorado Educational and
Cultural Facilities Authority
Revenue Refunding (National
Jewish Federation Board
Program), Series B-2 A 4.030 11,060,000
- --------------------------------------------------------------------------------
25
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
COLORADO--(CONCLUDED)
$ 7,700 Colorado Educational and
Cultural Facilities Authority
Revenue Refunding (National
Jewish Federation Board
Program), Series C-1 A 4.030% $ 7,700,000
30,000 Colorado Educational Loan
Program Tax and Revenue
Anticipation Notes 08/07/06 4.000 30,012,711
24,995 Denver City & County
Certificates of
Participation Refunding
(Wellington E Web
Project), Series C-1 A 3.980 24,995,000
29,560 University of Colorado
Hospital Authority Revenue,
Series A A 3.950 29,560,000
------------
149,442,711
DELAWARE--0.94%
18,000 Delaware Economic
Development Authority
Revenue (Hospital Billing
and Collections), Series C A 3.900 18,000,000
15,455 University of Delaware
Revenue, Series A A 3.960 15,455,000
------------
33,455,000
DISTRICT OF COLUMBIA--2.02%
12,980 District of Columbia
(Multi-Modal), Series A A 3.980 12,980,000
25,000 District of Columbia Revenue
(George Washington
University), Series B A 3.980 25,000,000
8,700 District of Columbia Revenue
(Hillel: The Foundation for
Jewish Campus Life) A 3.990 8,700,000
16,020 District of Columbia Revenue
(Pooled Loan Program),
Series A A 4.000 16,020,000
9,100 District of Columbia, Series D-1 A 3.950 9,100,000
------------
71,800,000
- --------------------------------------------------------------------------------
26
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
FLORIDA--5.22%
$ 7,400 Alachua County Health
Facilities Authority Revenue
(Shands Teaching Hospital),
Series A A 4.020% $ 7,400,000
33,595 Dade County Water & Sewer
System Revenue A 3.950 33,595,000
12,900 Florida Department of
Environmental Protection
Preservation Revenue
(Everglades Restoration),
Series A A 3.960 12,900,000
9,500 Florida Department of
Environmental Protection
Preservation Revenue
(Everglades Restoration),
Series B A 3.980 9,500,000
17,100 Florida Keys Aqueduct
Authority Water Revenue
Refunding A 3.960 17,100,000
16,000 Highlands County Health
Facilities Authority Revenue
(Adventist Health Hospital),
Series A A 3.980 16,000,000
8,500 Jacksonville Health
Facilities Authority
Hospital Revenue, Series A A 4.020 8,500,000
12,275 Lakeland Educational
Facilities Revenue (Florida
Southern College of Lakeland
Project) A 3.970 12,275,000
12,900 Nassau County Pollution
Control Revenue
(ITT Rayonier, Inc. Project) A 3.950 12,900,000
10,000 Sarasota-Manatee Airport
Authority Revenue Refunding A 4.020 10,000,000
45,965 Sunshine State Governmental 3.950 to
Financing Commission Revenue A 3.980 45,965,000
186,135,000
GEORGIA--0.71%
8,910 Burke County Development
Authority, Pollution Control
Revenue (Oglethorpe Power
Corp.), Series A A 4.000 8,910,000
- --------------------------------------------------------------------------------
27
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
GEORGIA--(CONCLUDED)
$ 6,420 Burke County Development
Authority, Pollution Control
Revenue (Oglethorpe Power
Corp.), Series C A 4.020% $ 6,420,000
10,000 Fulton County Development
Authority Revenue (Boys &
Girls Club of America) A 3.990 10,000,000
25,330,000
ILLINOIS--9.10%
22,745 Chicago (Neighborhoods
Alive 21 Program), Series B A 3.980 22,745,000
53,050 Chicago O'Hare International
Airport Revenue, Second Lien
Series C A 3.950 53,050,000
10,000 Chicago Refunding Project,
Series D A 3.970 10,000,000
16,020 Illinois Development Finance
Authority, Multi-Family
Housing Revenue Refunding
(Orleans-Illinois Project) A 3.980 16,020,000
11,400 Illinois Development Finance
Authority Revenue (Chicago
Symphony Orchestra) A 3.950 11,400,000
14,100 Illinois Development Finance
Authority Revenue (Francis
W. Parker School Project) A 3.950 14,100,000
24,000 Illinois Development Finance
Authority Revenue (St.
Vincent De Paul Project),
Series A A 3.950 24,000,000
10,000 Illinois Educational
Facilities Authority Revenue
(ACI/Cultural Pooled
Financing) A 4.020 10,000,000
15,000 Illinois Finance Authority
Revenue (Chicago Historical
Society) A 4.000 15,000,000
7,400 Illinois Finance Authority
Revenue (Proctor Hospital),
Series B A 4.000 7,400,000
- --------------------------------------------------------------------------------
28
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
ILLINOIS--(CONCLUDED)
$26,640 Illinois Health Facilities
Authority Revenue Refunding
(Advocate Health Care),
Series B A 3.970% $ 26,640,000
42,075 Illinois Toll & Highway
Authority Priority
Refunding, Series B A 3.950 42,075,000
11,300 Illinois Toll & Highway
Authority Revenue (Putters),
Series 1355 A 4.010 11,300,000
29,010 Lemont Township High School
District (ABN Amro Munitops
Certificates of Trust Series
2006-26)* A 4.020 29,010,000
20,000 Metropolitan Water
Reclamation District of
Greater Chicago, Capital
Improvement, Series E A 3.980 20,000,000
11,700 University of Illinois,
University Revenue Refunding
(UIC South A Campus
Project), Series A 3.980 11,700,000
------------
324,440,000
INDIANA--3.30%
10,000 Indiana Finance Authority,
Environmental Improvement
Revenue Refunding (Ispat
Inland, Inc.) A 3.950 10,000,000
15,000 Indiana Health & Educational
Facilities Financing
Authority Revenue Refunding
(St. Francis Health
Systems), Series A A 3.960 15,000,000
13,315 Indiana Health Facility
Financing Authority,
Hospital Revenue (Aces
Rehabilitation Hospital) A 3.970 13,315,000
32,600 Indiana Health Facility
Financing Authority Revenue
(Ascension Health Credit
Group), Series B A 3.900 32,600,000
10,000 Indianapolis Local Public
Improvement Bond Bank
Refunding (Waterworks
Project), Series G-1 A 4.000 10,000,000
- --------------------------------------------------------------------------------
29
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
INDIANA--(CONCLUDED)
$12,150 Purdue University Revenue
(Student Facilities System),
Series A A 3.950% $ 12,150,000
24,515 (Student Fee), Series V
Purdue University Revenue A 3.950 24,515,000
------------
117,580,000
IOWA--0.49%
17,400 Iowa Higher Education Loan
Authority Revenue (Aces
Education Loan Private
College) A 4.040 17,400,000
KANSAS--0.44%
15,700 Kansas Development Finance
Authority Revenue (Sisters
of Charity), Series D A 4.030 15,700,000
KENTUCKY--1.16%
22,700 Kenton County Airport Board,
Special Facilities Revenue
Refunding, Series B A 4.040 22,700,000
6,090 Kentucky Public Energy
Authority Gas Supply
Revenue, Series A A 4.060 6,090,000
12,575 Louisville & Jefferson
County Visitors & Convention
Community Refunding
(Kentucky International
Convention), Series B A 4.040 12,575,000
41,365,000
LOUISIANA--0.89%
3,150 Louisiana Citizens Property
Insurance Corp. Assessment
Revenue (Putters), Series
1349* A 4.010 3,150,000
12,505 Louisiana Public Facilities
Authority Revenue (College
and University Equipment and
Capital), Series A A 3.980 12,505,000
- --------------------------------------------------------------------------------
30
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
LOUISIANA--(CONCLUDED)
$16,100 South Louisiana Port
Commission Marine Terminal
Facilities Revenue Refunding
(Occidental Petroleum) A 4.000% $ 16,100,000
------------
31,755,000
MARYLAND--3.46%
13,770 Baltimore County Revenue
(Oak Crest Village, Inc.
Project), Series A A 3.980 13,770,000
18,475 Baltimore Industrial
Development Authority
Revenue (Baltimore Capital
Acquisition) A 4.000 18,475,000
7,300 Maryland Economic
Development Corp. Revenue
(US Pharmacopeial Project),
Series A A 4.040 7,300,000
28,900 Maryland Health & Higher
Educational Facilities
Authority Revenue (Pooled
Loan Program), Series A A 3.950 28,900,000
43,575 Maryland Health & Higher
Educational Facilities
Authority Revenue (Pooled
Loan Program), Series B A 3.970 43,575,000
11,427 Maryland Health & Higher
Educational Facilities
Authority Revenue (Pooled
Loan Program), Series D A 3.980 11,427,000
------------
123,447,000
MASSACHUSETTS--8.29%
21,510 Massachusetts Health &
Educational Facilities
Authority Revenue (Partners
Healthcare System), Series
P-1 A 3.980 21,510,000
- --------------------------------------------------------------------------------
31
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
MASSACHUSETTS--(CONCLUDED)
$14,650 Massachusetts Health &
Educational Facilities
Authority Revenue (Partners
Healthcare System),
Series P-2 A 3.970% $ 14,650,000
75,060 Massachusetts State
Refunding, Series A A 3.960 75,060,000
24,850 Massachusetts Water Resources
Authority Refunding (General
Multi-Modal), Subordinated
Series B A 3.980 24,850,000
43,800 Massachusetts Water Resources
Authority Refunding (General
Multi-Modal), Subordinated
Series C A 3.980 43,800,000
25,000 Massachusetts Water Resources
Authority Refunding (General
Multi-Modal), Subordinated
Series D A 3.980 25,000,000
25,000 Massachusetts Water Resources
Authority, Series A A 3.950 25,000,000
10,000 Pembroke Bond Anticipation
Notes 08/03/06 4.000 10,003,392
37,800 Route 3 North Transportation
Improvements Association,
Lease Revenue (Demand
Obligation Bond), Series B A 3.960 37,800,000
18,000 University of Massachusetts
Building Authority Project
Revenue Refunding, Series 1 A 3.960 18,000,000
------------
295,673,392
MICHIGAN--1.59%
30,000 Kent Hospital Finance
Authority Revenue Refunding
(Spectrum Health), Series A A 3.950 30,000,000
10,000 Michigan Building Authority
Revenue (Multi-Modal
Facilities Program), Series
IIA A 3.980 10,000,000
- --------------------------------------------------------------------------------
32
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
MICHIGAN--(CONCLUDED)
$16,800 Michigan Housing Development
Authority, Single Family
Mortgage Revenue Refunding,
Series A A 3.980% $16,800,000
------------
56,800,000
MINNESOTA--0.86%
16,830 Minneapolis Health Care
Systems Revenue Refunding
(Fairview Health Services),
Series A A 3.950 16,830,000
13,900 Minneapolis Health Care
Systems Revenue Refunding
(Fairview Health Services),
Series C A 3.950 13,900,000
------------
30,730,000
MISSOURI--1.81%
12,000 Bi-State Development Agency
Metropolitan District Revenue
Subordinated (Mass Transit
MetroLink), Series A A 3.980 12,000,000
10,400 Missouri Health & Educational
Facilities Authority Revenue
(Assemblies of God College) A 4.000 10,400,000
12,282 Missouri Health & Educational
Facilities Authority Revenue
(Barnes Hospital Project),
Series B A 3.980 12,282,000
16,950 Missouri Health & Educational
Facilities Authority Revenue
(Washington University),
Series A A 4.030 16,950,000
13,000 Missouri Health & Educational
Facilities Authority Revenue
(Washington University),
Series B A 4.030 13,000,000
------------
64,632,000
NEBRASKA--0.31%
11,100 NEBHELP, Inc. Revenue
(Multiple-Mode), Series E A 4.050 11,100,000
- --------------------------------------------------------------------------------
33
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
NEVADA--1.05%
$ 9,000 Clark County Airport
Improvement Revenue
Refunding, Series A A 3.960% $ 9,000,000
28,500 Clark County Airport Revenue,
Sub Lien, Series C A 3.960 28,500,000
------------
37,500,000
NEW HAMPSHIRE--0.39%
13,800 New Hampshire Business
Finance Authority Resource
Recovery Revenue Refunding
(Wheelabrator), Series A A 4.000 13,800,000
NORTH CAROLINA--7.49%
9,800 Charlotte Certificates of
Participation (Governmental
Facilities Authority),
Series F A 4.000 9,800,000
68,350 Charlotte Water & Sewer
System Revenue Refunding,
Series C A 3.950 68,350,000
16,730 Charlotte-Mecklenburg
Hospital Authority Health
Care System Revenue Refunding
(Carolinas Healthcare), A 4.040 16,730,000
Series C
20,500 Concord Utilities System
Revenue Refunding,
Series B A 3.950 20,500,000
10,300 Fayetteville Public Works
Commission Revenue Refunding,
Series A A 3.960 10,300,000
59,815 Mecklenburg County
Certificates of Participation A 3.950 59,815,000
11,760 North Carolina Educational
Facilities Finance Agency
Revenue (Elon College) A 4.000 11,760,000
16,550 North Carolina Medical Care
Commission Hospital Revenue
(Baptist Hospitals Project) A 3.950 16,550,000
- --------------------------------------------------------------------------------
34
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
NORTH CAROLINA--(CONCLUDED)
$21,050 North Carolina Refunding,
Series C A 3.950% $ 21,050,000
27,595 Union County, Series A A 3.940 27,595,000
4,500 University of North Carolina
Hospital Chapel Hill Revenue,
Series B A 4.050 4,500,000
------------
266,950,000
OHIO--3.24%
10,000 Butler County Capital Funding
Revenue (CCAO Low Cost
Capital), Series A A 3.990 10,000,000
18,900 Columbus Sewer Revenue
Refunding A 3.970 18,900,000
36,240 Franklin County Hospital
Revenue Refunding and
Improvement (US Health Corp.),
Series A A 3.960 36,240,000
10,100 Franklin County Hospital
Revenue Refunding
Subordinated (OhioHealth
Doctors Hospital), Series B A 3.970 10,100,000
14,200 Ohio Air Quality Development
Authority Revenue Refunding
(Ohio Edison Project), Series A A 3.950 14,200,000
26,300 Ohio Water Development
Authority Revenue Refunding
(Water Development-Pure
Water Project) A 3.980 26,300,000
------------
115,740,000
OKLAHOMA--0.25%
8,845 Oklahoma Industrial Authority
Revenue Refunding
(Integris Baptist), Series B A 4.030 8,845,000
- --------------------------------------------------------------------------------
35
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
OREGON--0.42%
$15,000 Oregon Tax Anticipation Notes,
Series A 11/27/06 4.500% $ 15,084,815
PENNSYLVANIA--6.04%
10,100 Butler County General Authority
Revenue Refunding (Conneaut
School District Project),
Series A A 3.980 10,100,000
10,490 Cumberland County Municipal
Authority Revenue Refunding
(Lutheran Services
Northeast/Tressler Lutheran
Services Obligated Group
Project), Series C A 3.980 10,490,000
14,065 Delaware County Authority,
Hospital Revenue
(Crozer-Chester Medical Center) A 3.970 14,065,000
45,450 Delaware Valley Regional
Finance Authority (Local
Government Revenue) A 3.970 45,450,000
25,615 Lancaster County Hospital
Authority Revenue (Health
Center, Masonic Homes Project) A 3.980 25,615,000
9,000 Philadelphia Authority for
Industrial Development Revenue
(Regional Performing Arts
Center Project) A 3.920 9,000,000
15,260 Philadelphia Water &
Wastewater Revenue Refunding A 3.960 15,260,000
57,095 Philadelphia Water & Wastewater
Revenue Refunding, Series B A 3.950 57,095,000
14,200 University of Pittsburgh of the
Commonwealth Systems of Higher
Education (University Capital
Project), Series B A 3.950 14,200,000
- --------------------------------------------------------------------------------
36
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
PENNSYLVANIA--(CONCLUDED)
$13,925 York General Authority Revenue
(Pooled Financing
Subordinated), Series B A 3.980% $ 13,925,000
------------
215,200,000
RHODE ISLAND--0.56%
20,000 Lincoln Bond Anticipation Notes 08/01/06 4.250 20,011,077
SOUTH CAROLINA--1.80%
14,850 Berkeley County Water & Sewer
Revenue Refunding System,
Series A A 4.000 14,850,000
27,800 Piedmont Municipal Power
Agency, South Carolina Electric
Revenue Refunding, Series A A 3.980 27,800,000
10,000 South Carolina Educational
Facilities Authority for
Private Nonprofit Institutions
of Higher Learning Refunding
and Improvement (Anderson
College) A 4.000 10,000,000
11,325 South Carolina Jobs-Economic
Development Authority, Hospital
Facilities Revenue (Regional
Medical Center of Orangeburg) A 3.950 11,325,000
------------
63,975,000
TENNESSEE--4.21%
60,590 Clarksville Public Building
Authority Revenue, Pooled
Financing (Tennessee Municipal
Bond Fund) A 4.050 60,590,000
13,805 Knox County Health Educational
& Housing Facilities Board
Revenue Refunding (Baptist
Hospital Systems Project) A 3.980 13,805,000
- --------------------------------------------------------------------------------
37
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
TENNESSEE--(CONCLUDED)
$13,425 Metropolitan Government of
Nashville & Davidson County,
Industrial Development
Refunding (David Lipscomb
University Project) A 3.990% $ 13,425,000
17,000 Montgomery County Public
Building Authority Pooled
Financing Revenue (Tennessee
County Loan Pool) A 4.000 17,000,000
515 Montgomery County Public
Building Authority Revenue
Financing Government
Obligation (Pooled Loan) A 4.000 515,000
44,000 Shelby County Public
Improvement and School,
Series B A 4.000 44,000,000
640 Tusculum Health Educational &
Housing Facilities Board,
Educational Facilities Revenue
(Tusculum College Project) A 3.990 640,000
------------
149,975,000
TEXAS--7.63%
23,100 Arlington Special Obligation
(Special Tax-Dallas Cowboys),
Series B A 4.000 23,100,000
15,000 Dallas North Tollway System
Revenue, Series C A 4.000 15,000,000
30,400 Harris County Health Facilities
Development Corp. Revenue
(Methodist Hospital Systems),
Series A A 3.600 30,400,000
18,300 Harris County Health Facilities
Development Corp. Special
Facilities Revenue (Texas
Medical Center Projects) A 4.030 18,300,000
20,000 Northwest Texas Independent
School District 08/03/06 3.440 20,000,707
- --------------------------------------------------------------------------------
38
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
TEXAS--(CONCLUDED)
$ 7,050 Tarrant County Housing
Finance Corp. Revenue
Refunding (Multi-Family
Housing Apartments Project) A 4.040% $ 7,050,000
133,500 Texas Tax and Revenue
Anticipation Notes 08/31/06 4.500 133,827,521
24,165 Texas Turnpike Authority,
Central Texas Turnpike System
Revenue, First Tier, Series B A 3.950 24,165,000
------------
271,843,228
VIRGINIA--0.32%
11,545 Fairfax County Economic
Development Authority
Revenue (Smithsonian
Institution), Series A A 3.950 11,545,000
WASHINGTON--4.81%
23,000 Energy Northwest Washington
Electric Revenue Refunding
(Project No. 3), Series D-3-1 A 3.960 23,000,000
26,850 Energy Northwest Washington
Electric Revenue Refunding
(Project No. 3), Series E A 3.980 26,850,000
23,195 King County Sewer Revenue
(Junior Lien), Series A A 3.950 23,195,000
22,200 King County Sewer Revenue
(Junior Lien), Series B A 3.980 22,200,000
35,370 Snohomish County Public
Utility District No. 001,
Electric Revenue Refunding
(Generation Systems),
Series 2001A A 3.960 35,370,000
10,000 Tulalip Tribes of The Tulalip
Reservation Special Revenue
Refunding A 4.020 10,000,000
- --------------------------------------------------------------------------------
39
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
- --------------------------------------------------------------------------------
WASHINGTON--(CONCLUDED)
$ 7,645 Washington Health Care
Facilities Authority Revenue
(Providence Services),
Series A A 4.030% $ 7,645,000
22,745 Washington Public Power
Supply Systems Nuclear
Project No. 1 Revenue
Refunding, Series 1A-2 A 3.960 22,745,000
615 Washington Public Power
Supply Systems Nuclear
Project No. 3 Electric
Revenue Refunding, Series 3A A 4.000 615,000
-------------
171,620,000
WISCONSIN--0.74%
16,500 Appleton Area School District
Tax and Revenue Anticipation
Promissory Notes 09/29/06 4.000 16,513,436
10,000 Wisconsin Center District Tax
Revenue, Series A A 4.000 10,000,000
-------------
26,513,436
Total municipal bonds and notes
(cost--$3,224,257,659) 3,224,257,659
TAX-EXEMPT COMMERCIAL PAPER--10.63%
FLORIDA--1.50%
12,280 City of Jacksonville 09/12/06 3.550 12,280,000
9,300 Jacksonville Electric
Authority 08/11/06 3.530 9,300,000
15,000 Jacksonville Electric
Authority, Series 200-F 09/14/06 3.480 15,000,000
10,000 Jacksonville Electric
Authority, Series C 09/08/06 3.350 10,000,000
7,000 Palm Beach County School
District 10/12/06 3.470 7,000,000
-------------
53,580,000
- --------------------------------------------------------------------------------
40
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER--(CONTINUED)
GEORGIA--0.42%
$15,000 Burke County Development
Authority Pollution Control
Revenue (Oglethorpe Power 09/08/06 to 3.350 to
Corp.) 09/13/06 3.500% $15,000,000
ILLINOIS--1.29%
10,000 Evanston Hospital, Series A 09/07/06 3.350 10,000,000
10,000 Evanston Hospital, Series B 09/07/06 3.350 10,000,000
10,000 Evanston Hospital, Series C 09/07/06 3.350 10,000,000
16,000 Illinois Educational Facilities
Authority Revenue 08/09/06 3.500 16,000,000
-------------
46,000,000
INDIANA--0.84%
30,000 Indiana University 09/08/06 to
09/11/06 3.550 30,000,000
LOUISIANA--0.39%
13,970 Louisiana Offshore Terminal
Authority Deepwater Port
Revenue Refunding (Loop, Inc.
First Stage), Series A 09/14/06 3.580 13,970,000
MARYLAND--0.86%
30,662 Johns Hopkins University 08/04/06 to 3.500 to
09/06/06 3.720 30,662,000
NEW YORK--1.32%
47,000 New York City Municipal Water 08/15/06 to
Authority 08/17/06 3.670 47,000,000
- --------------------------------------------------------------------------------
41
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER--(CONTINUED)
NORTH CAROLINA--0.59%
$20,900 Charlotte Water & Sewer 07/26/06 to 3.600 to
08/01/06 3.680% $20,900,000
PUERTO RICO--0.67%
24,000 Puerto Rico Government
Development Bank Custodial
Receipts (Backed by Letter of
Credit from Societe Generale)* 07/24/06 3.250 24,000,000
SOUTH CAROLINA--0.28%
10,000 South Carolina Public Service
Authority 08/08/06 3.550 10,000,000
TENNESSEE--0.28%
10,000 Metropolitan Government
Nashville--Vanderbilt
University 08/04/06 3.720 10,000,000
TEXAS--1.40%
18,000 Harris County 08/08/06 to 3.550 to
08/09/06 3.630 18,000,000
10,000 Houston Higher Education
Finance Authority--Rice
University 08/10/06 3.520 10,000,000
12,500 Houston Utility Systems Revenue 09/06/06 3.350 12,500,000
9,200 Texas A & M University 08/14/06 3.530 9,200,000
-------------
49,700,000
UTAH--0.28%
10,000 Intermountain Power Agency
Revenue 10/06/06 3.400 10,000,000
WASHINGTON--0.37%
13,000 King County Sewer Revenue 09/13/06 3.560 13,000,000
- --------------------------------------------------------------------------------
42
<Page>
UBS RMA TAX-FREE FUND INC.
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- --------------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER--(CONCLUDED)
WYOMING--0.14%
$5,000 Sweetwater County
Series 88A (Pacificorp) 09/08/06 3.570% $ 5,000,000
Total tax-exempt commercial paper --------------
(cost--$378,812,000) 378,812,000
Total investments (cost--$3,603,069,659
which approximates cost for federal
income tax purposes)--101.06% 3,603,069,659
Liabilities in excess of other assets--
(1.06)% (37,712,964)
Net assets (applicable to 3,566,092,454
shares of common stock outstanding --------------
equivalent to $1.00 per share)--100.00% $3,565,356,695
A Variable rate demand notes are payable on demand. The interest rates shown
are the current rates as of June 30, 2006, and reset periodically.
* Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities, which represent 1.58% of net assets as of June 30,
2006, are considered liquid and may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
Weighted average maturity--14 days
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
43
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ----------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--92.00%
$ 3,600 California, Daily Kindergarten
Universal, Series A-5 A 3.880% $ 3,600,000
10,000 California Department of
Water Resources Power Supply
Revenue (Putters), Series 344 A 4.000 10,000,000
18,060 California Department of
Water Resources Power
Supply Revenue, Series C-4 A 3.920 18,060,000
7,200 California Department of
Water Resources Power
Supply Revenue, Subseries F-2 A 3.940 7,200,000
9,200 California Department of
Water Resources Power
Supply Revenue, Subseries F-4 A 3.930 9,200,000
3,655 California Department of
Water Resources Power
Supply Revenue, Subseries F-5 A 4.000 3,655,000
8,000 California Department of
Water Resources Power
Supply Revenue, Subseries G-14 A 3.920 8,000,000
10,100 California Educational Facilities
Authority Revenue Refunding
(Carnegie Institution Washington),
Series A A 3.920 10,100,000
7,850 California Educational Facilities
Authority Revenue
(Stanford University), Series S-4 A 3.890 7,850,000
10,000 California Health Facilities
Financing Authority
(Catholic Health Facilities),
Series J A 3.890 10,000,000
6,904 California Health Facilities
Financing Authority (Floating
Pooled Loan Program), Series B A 3.920 6,904,000
8,000 California Health Facilities
Financing Authority (Hospital
Adventist Health Systems),
Series A A 3.950 8,000,000
</Table>
- --------------------------------------------------------------------------------
44
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -----------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$15,500 California Infrastructure &
Economic Development Revenue
(Buck Institute for Age Research) A 3.900% $15,500,000
8,100 California Infrastructure &
Economic Development Revenue
(Independent Systems Operation
Corp. Project), Series B A 3.890 8,100,000
5,615 California Infrastructure &
Economic Development Revenue
(Independent Systems Operation
Corp. Project), Series C A 3.920 5,615,000
8,200 California Infrastructure &
Economic Development Revenue
(Rand Corp.), Series B A 3.890 8,200,000
2,750 California Pollution Control
Financing Authority Pollution
Control Revenue
(ExxonMobil Project) A 3.800 2,750,000
11,890 California, Series A-2 A 3.880 11,890,000
8,900 California, Series B, Subseries B-6 A 3.920 8,900,000
5,000 California, Series B-1 A 3.900 5,000,000
5,000 California, Series C-1 A 3.920 5,000,000
6,985 California Statewide Communities
Development Authority Revenue
(Cathedral High School Project) A 3.850 6,985,000
4,100 California Statewide Communities
Development Authority Revenue
Certificates of Participation
Refunding (House Ear Institute) A 3.930 4,100,000
18,560 California Statewide Communities
Development Authority Revenue
(Kaiser Permanente), Series C A 3.950 18,560,000
16,900 California Statewide Communities
Development Authority Revenue
(Kaiser Permanente), Series D A 3.950 16,900,000
3,400 California Statewide Communities
Development Authority Revenue
(Kaiser Permanente), Series M A 3.950 3,400,000
</Table>
- --------------------------------------------------------------------------------
45
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -----------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$4,220 California Statewide Communities
Development Authority Revenue
(North Peninsula Jewish) A 3.930% $ 4,220,000
19,420 California Transit Financing
Authority A 3.920 19,420,000
4,900 Abag Finance Authority for
Nonprofit Corps. Revenue (Jewish
Community Center Project) A 3.950 4,900,000
9,920 Association of Bay Area
Governments Finance Authority
for Nonprofit Corps. Certificates
of Participation (Lucile Salter
Packard Project) A 3.950 9,920,000
7,000 Bay Area Toll Authority Toll Bridge
Revenue (San Francisco Bay Area),
Series A A 3.870 7,000,000
12,300 Bay Area Toll Authority Toll Bridge
Revenue (San Francisco Bay Area),
Series B A 3.850 12,300,000
15,000 Bay Area Toll Authority Toll Bridge
Revenue (San Francisco Bay Area),
Series B-2 A 3.850 15,000,000
8,000 Bay Area Toll Authority Toll Bridge
Revenue (San Francisco Bay Area),
Series C A 3.880 8,000,000
8,000 Desert Sands Unified School
District Tax and Revenue
Anticipation Notes 07/07/06 3.500 8,001,152
18,000 Dublin San Ramon Services
District Sewer Revenue Certificates
of Participation A 3.900 18,000,000
8,725 East Bay Municipal Utility District
Wastewater Systems Revenue
Refunding, Subseries 1 A 3.880 8,725,000
8,620 East Bay Municipal Utility District
Water Systems Revenue Refunding,
Subseries A A 3.870 8,620,000
2,300 East Bay Municipal Utility District
Water Systems Revenue Refunding,
Subseries B A 3.880 2,300,000
</Table>
- --------------------------------------------------------------------------------
46
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$10,600 East Bay Municipal Utility
District Water Systems Revenue
Refunding, Subseries B-1 A 3.880% $10,600,000
9,935 East Bay Municipal Utility
District Water Systems Revenue
Refunding, Subseries B-3 A 3.920 9,935,000
8,000 Elk Grove Unified School
District Tax and Revenue
Anticipation Notes 07/06/06 3.750 8,000,746
1,300 Irvine Improvement Bond Act
of 1915 Limited Obligation
(Assessment District 05-21),
Series A A 3.990 1,300,000
13,745 Irvine Improvement Bond Act
of 1915 Limited Obligation
(Assessment District 85-7-I) A 3.950 13,745,000
4,800 Lodi Electric Systems Revenue
Certificates of Participation,
Series A A 3.870 4,800,000
10,500 Los Angeles County Transport
Commission Sales Tax and
Revenue, Series A A 3.870 10,500,000
12,400 Los Angeles Multi-Family Housing
Revenue (Museum Terrace
Apartments), Series H A 3.930 12,400,000
35,000 Los Angeles Wastewater Systems
Revenue Refunding, Subseries A A 3.980 35,000,000
6,000 Los Angeles Wastewater Systems
Revenue Refunding, Subseries B-1 A 3.930 6,000,000
10,000 Los Angeles Water and Power
Revenue, Subseries A-1 A 3.920 10,000,000
5,000 Los Angeles Water and Power
Revenue, Subseries A-4 A 3.890 5,000,000
9,900 Los Angeles Water and Power
Revenue, Subseries A-5 A 3.920 9,900,000
3,850 Los Angeles Water and Power
Revenue, Subseries B-3 A 3.940 3,850,000
- --------------------------------------------------------------------------------
47
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$ 800 Menlo Park Community
Development Agency Tax
Allocation Refunding (Las Pulgas
Community Development) A 3.990% $ 800,000
5,000 Metropolitan Water District
Southern California Waterworks
Revenue, Series A-2 A 3.850 5,000,000
10,000 Metropolitan Water District
Southern California Waterworks
Revenue, Series B-1 A 3.920 10,000,000
20,000 Metropolitan Water District
Southern California Waterworks
Revenue, Series B-2 A 3.920 20,000,000
5,850 Newport Beach Revenue (Hoag
Memorial Hospital), Series A A 3.990 5,850,000
3,795 Newport Beach Revenue (Hoag
Memorial Hospital), Series B A 3.990 3,795,000
7,645 Newport Beach Revenue (Hoag
Memorial Hospital), Series C A 3.990 7,645,000
16,100 Northern California Power Agency
Revenue Refunding
(Hydroelectric No. 1-A) A 3.870 16,100,000
7,005 Northern California Transmission
Agency Revenue Refunding
(California-Oregon Transmission),
Series A A 3.900 7,005,000
25,513 Oakland Alameda County
Coliseum Authority Lease
Revenue A 3.950 25,513,000
15,000 Oakland Alameda County
Coliseum Authority Lease Revenue
(Coliseum Project), Series C-2 A 3.920 15,000,000
6,590 Orange County Apartment
Development Revenue (Niguel
Village), Series AA A 3.940 6,590,000
13,200 Orange County Apartment
Development Revenue (Seaside
Meadow), Series C A 3.870 13,200,000
- --------------------------------------------------------------------------------
48
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$40,000 Orange County Water District
Revenue Certificates of
Participation, Series A A 3.870% $40,000,000
17,000 Puerto Rico Commonwealth
Tax and Revenue Anticipation
Notes 07/28/06 4.500 17,015,728
5,000 Riverside County Certificates
of Participation (Aces Riverside
County Public Facility),
Series A A 3.900 5,000,000
5,430 Sacramento County Certificates
of Participation (Administration
Center and Courthouse Project) A 3.920 5,430,000
5,500 Sacramento County Sanitation
District Financing Authority
Revenue Subordinated Lien
(Sacramento), Series C A 3.940 5,500,000
12,300 Sacramento Unified School
District Certificates of
Participation A 3.950 12,300,000
11,400 San Bernardino County
Certificates of Participation
(County Center Refinancing
Project) A 3.890 11,400,000
10,000 San Diego County Certificates
of Participation A 3.950 10,000,000
4,350 San Francisco City and County
Airports Community International
Airport Revenue Refunding,
Second Series 33I A 3.940 4,350,000
14,000 San Francisco City and County
Airports Community International
Airport Revenue Refunding,
Second Series 33J A 3.850 14,000,000
4,000 San Francisco City and County
Redevelopment Agency Revenue
(Community Facilities District
No. 4) A 3.940 4,000,000
8,800 San Jose Redevelopment Agency
Revenue (Merged Area
Redevelopment Project),
Series B A 3.850 8,800,000
- --------------------------------------------------------------------------------
49
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
$5,400 Santa Ana Health Facilities
Revenue (Multi Modal Town
and Country) A 3.930% $ 5,400,000
8,800 Santa Clara Unified School
District Tax and Revenue
Anticipation Notes 07/02/07 4.500 8,883,072
15,050 Simi Valley Multi-Family
Housing Revenue Refunding
(Lincoln Wood Ranch) A 3.910 15,050,000
5,300 South Placer Wastewater
Authority California Wastewater
Revenue, Series B A 3.980 5,300,000
27,400 Southern California Public Power
Authority Transmission Project
Revenue, Subordinated Refunding
(Southern Transmission) A 3.870 27,400,000
4,100 Turlock Irrigation District
Certificates of Participation
(Capital Improvement and
Refunding Project) A 3.930 4,100,000
10,000 Vernon Natural Gas Financing
Authority Revenue, (Vernon Gas
Project), Series B A 3.950 10,000,000
25,000 Western Placer Unified School
Certificates of Participation
(School Facilities Project), A 3.950 25,000,000
Series A
Total municipal bonds and notes ------------
(cost--$866,332,698) 866,332,698
TAX-EXEMPT COMMERCIAL PAPER--10.99%
10,000 California Educational
Facilities Authority (Carnegie 09/07/06 to 3.610 to
Institute of Washington) 09/08/06 3.630 10,000,000
6,400 California Statewide
Community Development
Authority (Kaiser Permanente) 09/13/06 3.500 6,400,000
24,000 Los Angeles Municipal 09/07/06 to 3.330 to
Improvement Corp. 10/06/06 3.550 24,000,000
- --------------------------------------------------------------------------------
50
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -----------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER--(CONCLUDED)
$11,000 Puerto Rico Government
Development Bank Enhanced
Custodial Receipts (Backed
by Letter of Credit from
Societe Generale)* 07/24/06 3.250% $ 11,000,000
1,700 Riverside County 09/14/06 3.580 1,700,000
5,000 San Diego County Water 08/10/06 3.580 5,000,000
18,145 San Jose Finance 07/31/06 to 3.380 to
Authority 10/31/06 3.610 18,145,000
11,500 San Gabriel Valley Council 08/09/06 to 3.540 to
of Government 10/06/06 3.550 11,500,000
5,000 Transmission Authority
of Northern California 08/09/06 3.550 5,000,000
10,700 Ventura County Public 08/03/06 to
Finance Authority 08/04/06 3.700 10,700,000
Total tax-exempt commercial paper ------------
(cost--$103,445,000) 103,445,000
Total investments (cost--$969,777,698
which approximates cost for federal
income tax purposes)--102.99% 969,777,698
Liabilities in excess of other assets--(2.99)% (28,153,840)
Net assets (applicable to 942,037,379
shares of beneficial interest
outstanding equivalent to $1.00 per ------------
share)--100.00% $941,623,858
A Variable rate demand notes are payable on demand. The interest rates shown
are the current rates as of June 30, 2006 and reset periodically.
* Security exempt from registration under Rule 144A of the Securities Act of
1933. This security, which represents 1.17% of net assets as of June 30,
2006, is considered liquid and may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
Weighted average maturity--15 days
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
51
<Page>
UBS RMA NEW YORK MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -----------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--92.36%
$25,520 New York State Dormitory
Authority Revenue (Cornell 3.900 to
University), Series B A 4.000% $25,520,000
8,000 New York State Dormitory
Authority Revenue (Mental
Health Facilities
Improvement),
Series F-2B A 3.950 8,000,000
6,992 New York State Dormitory
Authority Revenue
(Metropolitan Museum of Art) A 3.900 6,992,000
29,200 New York State Dormitory
Authority Revenue Non State
Supported Debt (North
Shore-Long Island Jewish
Health System), Series A A 3.930 29,200,000
5,400 New York State Dormitory
Authority Revenue Non State
Supported Debt, Series C A 3.950 5,400,000
17,300 New York State Dormitory
Authority Revenue Non State
Supported Debt (University of
Rochester), Series A-1 A 3.920 17,300,000
12,200 New York State Dormitory
Authority Revenue
(Wagner College) A 3.950 12,200,000
6,000 New York State Energy
Research & Development
Authority Facilities Revenue
(Con Edison), Subseries A-1 A 3.930 6,000,000
22,150 New York State Energy
Research & Development
Authority Pollution Control
Revenue (Orange & Rockland
Project), Series A A 3.910 22,150,000
5,000 New York State Housing
Finance Agency (Normandie
Court I Project) A 3.950 5,000,000
13,000 New York State Housing
Finance Agency Revenue
(North End Ave. Housing),
Series A A 3.950 13,000,000
- --------------------------------------------------------------------------------
52
<Page>
UBS RMA NEW YORK MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$20,000 New York State Housing
Finance Agency Service
Contract Revenue Refunding,
Series A A 3.950% $20,000,000
10,000 New York State Housing
Finance Agency Service
Contract Revenue Refunding,
Series D A 3.950 10,000,000
5,500 New York State Local
Government Assistance Corp.
Refunding (Sub Lien),
Series A-5V A 3.950 5,500,000
6,000 New York State Local
Government Assistance Corp.
Refunding (Sub Lien),
Series A-6V A 3.950 6,000,000
7,395 New York State Local
Government Assistance Corp.,
Series B A 3.950 7,395,000
12,265 New York State Local
Government Assistance Corp.,
Series G A 3.910 12,265,000
6,265 New York State Thruway
Authority Personal Income Tax
Revenue (Putters), Series 1186 A 4.010 6,265,000
14,000 New York State Urban
Development Corp. Revenue
(State Facilities & Equipment),
Subseries A-3-B A 3.910 14,000,000
8,570 New York State Urban
Development Corp. Revenue
(State Facilities & Equipment),
Subseries A-3-C A 3.950 8,570,000
3,053 Arlington Central School
District Bond Anticipation
Notes 11/01/06 4.250 3,064,265
- --------------------------------------------------------------------------------
53
<Page>
UBS RMA NEW YORK MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$3,800 Dutchess County Industrial
Development Agency Civic
Facilities Revenue
(Marist College), Series A A 3.960% $ 3,800,000
6,550 Erie County Water Authority A 3.910 6,550,000
2,390 Great Neck North Water
Authority Systems Revenue,
Series A A 3.950 2,390,000
26,400 Jay Street Development Corp.
New York City Facility Lease
Revenue (Jay Street Project),
Series A-3 A 3.930 26,400,000
7,000 Long Island Power Authority
Electric Systems Revenue,
Series D A 3.950 7,000,000
8,900 Long Island Power Authority
Electric Systems Revenue,
Subseries 7-A A 3.920 8,900,000
6,000 Metropolitan Transportation
Authority, Subseries A-2 A 3.900 6,000,000
18,900 Metropolitan Transportation
Authority, Subseries A-3 A 3.950 18,900,000
7,015 Monroe County Industrial
Development Agency Civic
Facilities Revenue Refunding
(Nazareth College), Series B A 3.940 7,015,000
4,820 Nassau County Interim Finance
Authority, Series A A 3.950 4,820,000
19,500 New York City Housing
Development Corp. Multi-Family
Mortgage Revenue (The Crest),
Series A A 3.950 19,500,000
6,500 New York City Housing
Development Corp. Multi-Family
Rental Housing (Queenswood
Apartments), Series A A 3.900 6,500,000
- --------------------------------------------------------------------------------
54
<Page>
UBS RMA NEW YORK MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$14,135 New York City Industrial
Development Agency Civic
Facility Revenue (Center for
Jewish History Project) A 3.970% $14,135,000
4,420 New York City Industrial
Development Agency Civic
Facility Revenue (Church of
Heavenly Rest) A 3.970 4,420,000
6,590 New York City Industrial
Development Agency Civic
Facility Revenue (MSMC Realty
Corp. Project) A 3.950 6,590,000
24,650 New York City Industrial
Development Agency Revenue
(Liberty 1 Bryant Park LLC),
Series B A 4.060 24,650,000
4,200 New York City Municipal Water
Finance Authority Water &
Sewer Systems Revenue
(Second Generation Resolution),
Series AA-1 A 3.980 4,200,000
10,000 New York City Municipal Water
Finance Authority Water &
Sewer Systems Revenue,
Series F-2 A 3.940 10,000,000
9,000 New York City, Series I,
Subseries I-6 A 3.980 9,000,000
3,800 New York City, Subseries H1 3.960 to
A 4.030 3,800,000
7,220 New York City Trust for
Cultural Resources Revenue
(Asia Society) A 3.940 7,220,000
3,050 New York City Trust for
Cultural Resources Revenue
(Pierpont Morgan Library) A 3.950 3,050,000
4,800 Niagara Falls Bridge
Commission Toll Revenue,
Series A A 3.910 4,800,000
- --------------------------------------------------------------------------------
55
<Page>
UBS RMA NEW YORK MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
$14,645 Oneida County Industrial
Development Agency Revenue
Civic Facilities
(Hamilton College) A 3.950% $ 14,645,000
16,990 Oneida Indian Nation A 3.960 16,990,000
10,000 Puerto Rico Commonwealth
Tax & Revenue Anticipation
Notes 07/28/06 4.500 10,009,252
3,285 Rensselaer County Industrial
Development Agency Civic
Facilities Revenue (Polytechnic
Institute Project), Series A A 4.030 3,285,000
2,500 Riverhead Industrial
Development Agency Civic
Facilities Revenue Refunding
(Central Suffolk Hospital),
Series C A 3.940 2,500,000
5,000 Suffolk County Tax
Anticipation Notes 09/07/06 4.250 5,010,905
20,900 Suffolk County Water
Authority Bond Anticipation
Notes A 3.930 20,900,000
39,115 Triborough Bridge & Tunnel
Authority Revenue General 3.930 to
Purpose, Series B A 3.950 39,115,000
Total municipal bonds and notes ------------
(cost--$565,916,422) 565,916,422
TAX-EXEMPT COMMERCIAL PAPER--10.92%
6,000 New York City General
Obligation 08/11/06 3.470 6,000,000
16,000 New York City Municipal 08/15/06
Water Finance Authority to
08/17/06 3.670 16,000,000
13,800 New York State Environmental 09/08/06
Facilities Corp. to 3.450 to
09/13/06 3.580 13,800,000
14,000 Metropolitan Transportation 07/10/06
Authority to 3.500 to
10/10/06 3.530 14,000,000
9,090 Port Authority of New York & 10/05/06
New Jersey to
10/06/06 3.520 9,090,000
- --------------------------------------------------------------------------------
56
<Page>
UBS RMA NEW YORK MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- --------------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER--(CONCLUDED)
$8,000 Puerto Rico Government
Development Bank Enhanced
Custodial Receipts (Backed by
Letter of Credit from Societe
Generale)* 07/24/06 3.250% $ 8,000,000
Total tax-exempt commercial paper ------------
(cost--$66,890,000) 66,890,000
Total investments (cost--$632,806,422
which approximates cost for federal income
tax purposes)--103.28% 632,806,422
Liabilities in excess of other
assets--(3.28)% (20,110,775)
Net assets (applicable to 612,820,148
shares of beneficial interest outstanding ------------
equivalent to $1.00 per share)--100.00% $612,695,647
A Variable rate demand notes are payable on demand. The interest rates shown
are the current rates as of June 30, 2006, and reset periodically.
* Security exempt from registration under Rule 144A of the Securities Act of
1933. This security, which represents 1.31% of net assets as of June 30,
2006, is considered liquid and may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
Weighted average maturity--12 days
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
57
<Page>
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--96.71%
$ 475 New Jersey Economic
Development Authority
(Bayonne Project
Improvement), Series A A 3.970% $ 475,000
3,900 New Jersey Economic
Development Authority
(Bayonne Project
Improvement), Series B A 3.970 3,900,000
4,770 New Jersey Economic
Development Authority
(Bayonne Project
Improvement), Series C A 3.970 4,770,000
3,600 New Jersey Economic
Development Authority
(Crowley Liner Services Project) A 3.940 3,600,000
1,250 New Jersey Economic
Development Authority
(Danic Urban Renewal) A 3.960 1,250,000
405 New Jersey Economic
Development Authority
(Kenwood USA Corp. Project) A 3.990 405,000
4,000 New Jersey Economic
Development Authority
Revenue (First Mortgage
Winchester Gardens), Series A 11/01/06 8.625 4,142,779
2,000 New Jersey Economic
Development Authority
Revenue (Lawrenceville School
Project), Series A 07/01/06 5.750 2,040,000
4,000 New Jersey Economic
Development Authority
Revenue Refunding (Foreign
Trade Zone Project) A 4.000 4,000,000
3,200 New Jersey Economic
Development Authority
Speciality Facilities Revenue
(Port Newark Container LLC) A 4.020 3,200,000
5,005 New Jersey Economic
Development Authority
(Stolthaven Project), Series A A 3.890 5,005,000
- --------------------------------------------------------------------------------
58
<Page>
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$1,800 New Jersey Economic
Development Authority
(Thermal Energy Limited
Partnership) A 4.000% $1,800,000
2,000 New Jersey Economic
Development Authority
(Transportation),
Series N10-Regulation D A 4.010 2,000,000
3,350 New Jersey Economic
Development Authority
Water Facilities Revenue
Refunding (United Water NJ,
Inc. Project), Series A A 3.940 3,350,000
205 New Jersey Economic
Development Authority
Water Facilities Revenue
Refunding (United Water NJ,
Inc. Project), Series B A 4.020 205,000
800 New Jersey Economic
Development Authority Water
Facilities Revenue Refunding
(United Water NJ, Inc. Project),
Series C A 4.070 800,000
4,800 New Jersey Educational
Facilities Authority (College of
New Jersey), Series A A 3.940 4,800,000
2,000 New Jersey Educational
Facilities Authority (Princeton 3.850 to
University), Series B A 3.900 2,000,000
550 New Jersey Educational
Facilities Authority (Princeton
University), Series F A 3.580 550,000
4,620 New Jersey Health Care
Facilities Authority
(Community Hospital Group),
Series A-1 A 3.940 4,620,000
1,950 New Jersey Health Care
Facilities Authority
(Robert Wood Johnson University) A 3.940 1,950,000
4,305 New Jersey Health Care
Facilities Authority
(St. Barnabas), Series A A 3.940 4,305,000
- --------------------------------------------------------------------------------
59
<Page>
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONTINUED)
$5,800 New Jersey Health Care
Facilities Authority
(St. Peter's Hospital), Series B A 3.790% $5,800,000
2,500 New Jersey Health Care
Facilities Authority (Variable
Capital Health Systems
Obligation), Group B A 3.940 2,500,000
5,200 New Jersey Health Care
Facilities Financing Authority
Revenue, Series A3 A 3.930 5,200,000
2,335 New Jersey Health Care
Facilities Financing Authority
Revenue (Virtua Health Issue) 07/01/06 5.000 2,335,000
2,500 New Jersey Sports &
Exposition Authority, Series B-1 A 3.920 2,500,000
6,070 New Jersey State Housing &
Mortgage Finance Agency
Revenue (Single Family
Housing), Series N A 3.980 6,070,000
1,995 New Jersey State
Transportation Trust Fund
Authority (Putters), Series 1144 A 4.010 1,995,000
5,000 New Jersey Turnpike Authority A 3.930 5,000,000
1,000 New Jersey Turnpike Authority
(Putters), Series 155 A 4.010 1,000,000
3,900 New Jersey Turnpike Authority
Revenue, Series C-1 A 3.900 3,900,000
1,210 Atlantic County Improvement
Authority Revenue (Pooled
Government Loan Program) A 3.980 1,210,000
2,000 Bergen County Improvement
Authority (Senior Special
Purpose Limited Obligation),
Series B A 4.020 2,000,000
670 Essex County Improvement
Authority Revenue (Jewish
Community Center
Metropolitan Project) A 3.940 670,000
1,600 Essex County Improvement
Authority Revenue (Pooled
Government Loan Program) A 3.960 1,600,000
- --------------------------------------------------------------------------------
60
<Page>
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
$2,500 Mercer County Improvement
Authority (Atlantic Foundation) A 3.920% $ 2,500,000
3,210 Middle Township School
District Grant Anticipation 07/07/06 to 4.250 to
Notes 12/06/06 4.500 3,213,508
4,000 Montclair Township
Temporary Notes 03/15/07 4.250 4,017,238
4,000 Pequannock Township Bond
Anticipation Notes 08/03/06 4.000 4,003,862
5,785 Port Authority of New York
and New Jersey Special
Obligation Revenue (Versatile
Structure Obligation), Series 3 A 3.940 5,785,000
2,400 Port Authority of New York
and New Jersey Special
Obligation Revenue (Versatile
Structure Obligation), Series 4 A 3.990 2,400,000
3,000 Puerto Rico Commonwealth
Tax & Revenue Anticipation
Notes 07/28/06 4.500 3,002,776
2,815 Rutgers State University
Refunding, Series A A 3.900 2,815,000
1,525 Salem County Pollution
Control Financing Refunding
(Atlantic City Electric), Series A A 3.900 1,525,000
Total municipal bonds and notes ------------
(cost--$130,210,163) 130,210,163
</Table>
- --------------------------------------------------------------------------------
61
<Page>
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
Statement of net assets--June 30, 2006
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER--3.08%
1,510 Port Authority of New York
and New Jersey 09/06/06 3.600 1,510,000
2,631 Puerto Rico Government
Development Bank Enhanced
Custodial Receipts (Backed by
Letter of Credit from Societe
Generale)* 07/24/06 3.250 2,631,000
Total tax-exempt commercial paper ------------
(cost--$4,141,000) 4,141,000
Total investments (cost--$134,351,163
which approximates cost for federal
income tax purposes)--99.79% 134,351,163
Other assets in excess of liabilities--0.21% 288,320
Net assets (applicable to 134,636,071
shares of beneficial interest outstanding ------------
equivalent to $1.00 per share)--100.00% $134,639,483
A Variable rate demand notes are payable on demand. The interest rates shown
are the current rates as of June 30, 2006 and reset periodically.
* Security exempt from registration under Rule 144A of the Securities Act of
1933. This security, which represents 1.95% of net assets as of June 30,
2006, is considered liquid and may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
Weighted average maturity--20 days
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
62
<Page>
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- --------------------------------------------------------------------------------
63
<Page>
UBS RMA
Statement of operations
<Table>
<Caption>
FOR THE YEAR ENDED JUNE 30, 2006
--------------------------------
MONEY MARKET U.S. GOVERNMENT
PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $452,329,303 $40,476,791
Securities lending income
(includes $13; $0; $0; $0; $0; $0,
respectively, earned from an affiliated entity) 4,565 212,590
------------ -----------
452,333,868 40,689,381
EXPENSES:
Investment advisory and administration fees 53,289,380 4,439,018
Service fees 13,322,345 1,270,492
Transfer agency and related services fees 6,240,120 218,504
Custody and accounting fees 1,315,721 123,808
Insurance expense 538,639 64,022
Reports and notices to shareholders 496,710 14,876
Federal and state registration fees 254,655 45,031
Directors'/Trustees' fees 112,641 20,549
Professional fees 106,005 100,986
Interest expense -- --
Other expenses 67,816 17,783
------------ -----------
75,744,032 6,315,069
Less: Fee waivers by investment
advisor and administrator (13,322,345) --
Net expenses 62,421,687 6,315,069
Net investment income 389,912,181 34,374,312
Net realized gains (losses) from investment
activities 108,762 35,189
Net increase in net assets resulting from ------------ -----------
operations $390,020,943 $34,409,501
</Table>
- --------------------------------------------------------------------------------
64
<Page>
<Table>
<Caption>
FOR THE YEAR ENDED JUNE 30, 2006
----------------------------------------------------
CALIFORNIA NEW YORK NEW JERSEY
TAX-FREE MUNICIPAL MUNICIPAL MUNICIPAL
FUND MONEY FUND MONEY FUND MONEY FUND
- -------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $107,931,266 $26,659,548 $18,652,300 $4,137,611
Securities lending income
(includes $13; $0; $0; $0; $0; $0,
respectively, earned from an affiliated entity) -- -- -- --
107,931,266 26,659,548 18,652,300 4,137,611
------------ ----------- ----------- ----------
EXPENSES:
Investment advisory and administration fees 14,865,136 4,068,464 2,971,152 712,421
Service fees 4,536,506 1,141,828 792,941 170,981
Transfer agency and related services fees 1,050,139 227,500 210,889 81,974
Custody and accounting fees 449,330 113,287 78,462 17,693
Insurance expense 156,501 40,909 28,511 6,760
Reports and notices to shareholders 101,839 20,081 17,592 9,607
Federal and state registration fees 160,742 33,135 33,516 25,547
Directors'/Trustees' fees 47,975 20,014 17,666 12,394
Professional fees 128,690 114,123 109,536 97,899
Interest expense 38,813 -- -- --
Other expenses 66,859 20,276 18,453 14,423
------------ ----------- ----------- ----------
21,602,530 5,799,617 4,278,718 1,149,699
Less: Fee waivers by investment
advisor and administrator -- -- -- --
Net expenses 21,602,530 5,799,617 4,278,718 1,149,699
Net investment income 86,328,736 20,859,931 14,373,582 2,987,912
Net realized gains (losses) from investment
activities (345) -- -- --
Net increase in net assets resulting from ------------ ----------- ----------- ----------
operations $ 86,328,391 $20,859,931 $14,373,582 $2,987,912
</Table>
- --------------------------------------------------------------------------------
65
<Page>
UBS RMA
Statement of changes in net assets
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
---------------------------------
2006 2005
- ----------------------------------------------------------------------------------------------
UBS RMA MONEY MARKET PORTFOLIO
FROM OPERATIONS:
Net investment income $ 389,912,181 $ 183,907,797
Net realized gain (loss) from investment activities 108,762 (1,698,238)
--------------- ---------------
Net increase in net assets resulting from operations 390,020,943 182,209,559
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (389,912,181) (183,907,797)
Net realized gains from investment activities -- (2,152,500)
Total dividends and distributions to shareholders (389,912,181) (186,060,297)
Net increase (decrease) in net assets from capital
share transactions 201,965,286 (2,004,556,930)
Net increase (decrease) in net assets 202,074,048 (2,008,407,668)
NET ASSETS:
Beginning of year 10,425,877,983 12,434,285,651
End of year $10,627,952,031 $10,425,877,983
Accumulated undistributed net investment income $ -- $ --
UBS RMA U.S. GOVERNMENT PORTFOLIO
FROM OPERATIONS:
Net investment income $ 34,374,312 $ 17,682,078
Net realized gain (loss) from investment activities 35,189 (121,037)
--------------- ---------------
Net increase in net assets resulting from operations 34,409,501 17,561,041
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (34,374,312) (17,682,078)
Net decrease in net assets from capital share transactions (266,283,169) (139,098,548)
Net decrease in net assets (266,247,980) (139,219,585)
NET ASSETS:
Beginning of year 1,111,697,900 1,250,917,485
End of year $ 845,449,920 $ 1,111,697,900
Accumulated undistributed net investment income $ -- $ --
</Table>
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
66
<Page>
UBS RMA
Statement of changes in net assets
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
-------------------------------
2006 2005
- --------------------------------------------------------------------------------------------
UBS RMA TAX-FREE FUND
FROM OPERATIONS:
Net investment income $ 86,328,736 $ 40,517,259
Net realized losses from investment activities (345) (175)
-------------- --------------
Net increase in net assets resulting from operations 86,328,391 40,517,084
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (86,328,736) (40,517,259)
Net increase in net assets from capital share transactions 158,743,041 470,677,868
Net increase in net assets 158,742,696 470,677,693
NET ASSETS:
Beginning of year 3,406,613,999 2,935,936,306
End of year $3,565,356,695 $3,406,613,999
Accumulated undistributed net investment income $ -- $ --
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
FROM OPERATIONS:
Net investment income $ 20,859,931 $ 9,305,862
Net realized loss from investment activities -- (390)
Net increase in net assets resulting from operations 20,859,931 9,305,472
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (20,859,931) (9,305,862)
Net increase in net assets from beneficial interest
transactions 132,861,609 69,629,637
Net increase in net assets 132,861,609 69,629,247
NET ASSETS:
Beginning of year 808,762,249 739,133,002
End of year $ 941,623,858 $ 808,762,249
Accumulated undistributed net investment income $ -- $ --
</Table>
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
67
<Page>
UBS RMA
Statement of changes in net assets
FOR THE YEARS ENDED JUNE 30,
----------------------------
2006 2005
- ---------------------------------------------------------------------------
UBS RMA NEW YORK MUNICIPAL MONEY FUND
FROM OPERATIONS:
Net investment income $ 14,373,582 $ 6,642,585
Net realized gain from investment activities -- 20
Net increase in net assets resulting ------------ ------------
from operations 14,373,582 6,642,605
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (14,373,582) (6,642,585)
Net increase in net assets from beneficial
interest transactions 16,624,370 33,675,671
Net increase in net assets 16,624,370 33,675,691
NET ASSETS:
Beginning of year 596,071,277 562,395,586
End of year $612,695,647 $596,071,277
Accumulated undistributed net
investment income $ -- $ --
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
FROM OPERATIONS:
Net investment income $ 2,987,912 $ 1,407,171
Net realized loss from investment activities -- (657)
Net increase in net assets resulting ------------ ------------
from operations 2,987,912 1,406,514
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (2,987,912) (1,407,171)
Net increase (decrease) in net assets from
beneficial interest transactions 465,905 (3,266,054)
Net increase (decrease) in net assets 465,905 (3,266,711)
NET ASSETS:
Beginning of year 134,173,578 137,440,289
End of year $134,639,483 $134,173,578
Accumulated undistributed net
investment income $ -- $ --
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
68
<Page>
UBS RMA
Notes to financial statements
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
- --------------------------------------------------------------------------------
69
<Page>
UBS RMA
Notes to financial statements
claims or losses pursuant to these contracts and expect the risk of loss to be
remote.
The preparation of financial statements in accordance with US 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.
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 U.S. Government Portfolio generally have the right to liquidate the
collateral and
- --------------------------------------------------------------------------------
70
<Page>
UBS RMA
Notes to financial statements
apply the proceeds in satisfaction of the obligation. Repurchase agreements
involving obligations other than US 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 (Americas) Inc.
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 US 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
- --------------------------------------------------------------------------------
71
<Page>
UBS RMA
Notes to financial statements
ability of issuers within each state to pay interest on, or repay principal of,
municipal obligations held by each of those Funds.
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:
AVERAGE DAILY NET ASSETS ANNUAL RATE
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO:
All 0.50%+
+ 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 year ended June 30, 2006, UBS Financial
Services Inc. waived $13,322,345 of its investment advisory and
administration fees from the Portfolio. At June 30, 2006, UBS Financial
Services Inc. owed the Portfolio $1,110,499 for fee waivers.
- --------------------------------------------------------------------------------
72
<Page>
UBS RMA
Notes to financial statements
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%
At June 30, 2006, the Funds owed UBS Financial Services Inc. for investment
advisory and administration fees as follows:
Money Market Portfolio $4,441,995
U.S. Government Portfolio 319,910
RMA Tax-Free 1,235,874
RMA California 343,381
RMA New York 245,953
RMA New Jersey 58,155
UBS Global Asset Management (US) Inc. ("UBS Global AM--US") served as each
Fund's sub-advisor and sub-administrator until April 1, 2006. On April 1, 2006,
each Fund's Sub-Advisory and Sub-Administration Contract ("Sub-Advisory
Contract") was transferred from UBS Global AM--US to UBS Global Asset Management
(Americas) Inc. ("UBS Global AM--Americas").
The transfer of the Sub-Advisory Contracts between sister companies occurred in
connection with an internal reorganization involving UBS Global AM--US and UBS
Global AM--Americas. Each Trust's or Company's Board approved the transfer of
the related Sub-Advisory Contract effective April 1, 2006. All of the personnel
of UBS Global AM--US who previously provided investment advisory services to
each Fund continue to provide investment advisory services to each Fund as
employees of UBS Global AM--Americas. UBS Global AM--Americas has the same
contractual rights and responsibilities under each Sub-Advisory Contract as
those previously held by UBS Global AM--US.
- --------------------------------------------------------------------------------
73
<Page>
UBS RMA
Notes to financial statements
UBS Global AM--US and UBS Global AM--Americas are both indirect wholly owned
subisidiaries of UBS AG. UBS Global AM--US continues to serve as each Fund's
principal underwriter.
In accordance with each Sub-Advisory Contract, UBS Financial Services Inc. (not
the Funds) paid UBS Global AM--Americas (or UBS Global AM--US for periods prior
to April 1, 2006) a fee, accrued daily and paid monthly, at an annual rate of
0.08% of the respective Fund's average daily net assets.
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 year ended
June 30, 2006, the Funds purchased and sold certain securities (e.g., fixed
income securities) in principal trades with Morgan Stanley having aggregate
values as follows:
Money Market Portfolio $ 8,264,649,401
U.S. Government Portfolio 37,112,000,000
RMA Tax-Free 2,076,511,820
RMA California 783,825,000
RMA New York 289,083,000
RMA New Jersey 158,818,500
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 the Fund's investment advisor or
sub-advisor, it is believed that under normal
- --------------------------------------------------------------------------------
74
<Page>
UBS RMA
Notes to financial statements
circumstances such compensation represents a small portion of the total value of
the transactions.
SHAREHOLDER SERVICE PLANS
UBS Global AM--US 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 the shareholder service plans, Money Market Portfolio, U.S.
Government Portfolio, RMA Tax-Free, RMA California and RMA New York pay UBS
Global AM--US 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--US 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 June 30, 2006, the Funds owed
UBS Global AM--US for such service fees as follows:
Money Market Portfolio $1,110,499
U.S. Government Portfolio 88,820
RMA Tax-Free 377,753
RMA California 96,969
RMA New York 65,670
RMA New Jersey 13,957
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.
- --------------------------------------------------------------------------------
75
<Page>
UBS RMA
Notes to financial statements
For the year ended June 30, 2006, UBS Financial Services Inc. received from
PFPC, not the Funds, total transfer agency related services fees as follows:
Money Market Portfolio $3,865,472
U.S. Government Portfolio 126,376
RMA Tax-Free 636,819
RMA California 132,983
RMA New York 120,649
RMA New Jersey 39,628
SECURITIES LENDING
Each Fund may lend securities up to 331/3% of its total assets to qualified
broker-dealers or institutional investors. The loans are secured at all times by
cash, US 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, US 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 year ended June 30, 2006, UBS Securities LLC earned $1,458 and
$72,053 in compensation from the Money Market Portfolio and the U.S. Government
Portfolio, respectively, as the Funds' lending agent. At June 30, 2006, the U.S.
Government Portfolio owed UBS Securities LLC $3,886 in compensation as the
Fund's lending agent. At June 30, 2006, the U.S. Government Portfolio had
securities on loan having a market value of $164,521,870. The U.S. Government
Portfolio's custodian held cash equivalents as collateral for securities loaned
of $50,853,998.
- --------------------------------------------------------------------------------
76
<Page>
UBS RMA
Notes to financial statements
In addition, the U.S. Government Portfolio's custodian held US government agency
securities having an aggregate value of $117,035,662 as collateral for portfolio
securities loaned as follows:
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES DATES VALUE
- ------------------------------------------------------------------
$15,998 Federal Home Loan
Mortgage Corp. 10/06/06 2.750% $ 15,883,614
52,375 Federal Home Loan
Mortgage Corp. 04/18/11 5.125 51,578,900
48,980 Federal Home Loan
Mortgage Corp. 01/15/12 5.750 49,573,148
------------
$117,035,662
RMA Tax-Free, RMA California, RMA New York and RMA New Jersey did not loan any
securities during the year ended June 30, 2006. The Money Market Portfolio did
not have any securities on loan at June 30, 2006 and did not owe UBS Securities
LLC any compensation as the Fund's lending agent.
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 year
ended June 30, 2006, RMA Tax-Free had an average daily amount of borrowing of
$52,926,252 for 6 days with a related weighted average
- --------------------------------------------------------------------------------
77
<Page>
UBS RMA
Notes to financial statements
annualized interest rate of 4.40%, which resulted in $38,813 of interest
expense.
OTHER LIABILITIES AND COMPONENTS OF NET ASSETS
At June 30, 2006, the Funds had the following liabilities outstanding:
<Table>
<Caption>
PAYABLE FOR
PAYABLE FOR CASH COLLATERAL OTHER
DIVIDENDS INVESTMENTS FROM SECURITIES ACCRUED
PAYABLE PURCHASED LOANED EXPENSES*
- -----------------------------------------------------------------------------------
Money Market Portfolio $6,756,227 -- -- $1,478,537
U.S. Government Portfolio 488,480 -- $50,853,998 135,739
RMA Tax-Free 1,581,726 $56,166,800 -- 403,017
RMA California 399,110 32,088,670 -- 143,353
RMA New York 273,589 22,517,659 -- 124,666
RMA New Jersey 54,708 1,608,274 -- 70,122
</Table>
* Excludes investment advisory and administration fees and service fees.
At June 30, 2006, the components of net assets for each of the Funds were as
follows:
ACCUMULATED
ACCUMULATED NET REALIZED TOTAL
PAID IN CAPITAL GAIN (LOSS) NET ASSETS
- --------------------------------------------------------------------------------
Money Market Portfolio $10,627,776,048 $ 175,983 $10,627,952,031
U.S. Government Portfolio 845,591,282 (141,362) 845,449,920
RMA Tax-Free 3,565,355,109 1,586 3,565,356,695
RMA California 941,600,693 23,165 941,623,858
RMA New York 612,666,807 28,840 612,695,647
RMA New Jersey 134,636,072 3,411 134,639,483
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
- --------------------------------------------------------------------------------
78
<Page>
UBS RMA
Notes to financial statements
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 all distributions paid to shareholders by the Money Market
Portfolio and U.S. Government Portfolio during the fiscal years ended June 30,
2006 and 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 fiscal years ended June 30, 2006 and June 30, 2005
was tax-exempt income.
At June 30, 2006, components of accumulated earnings on a tax basis for each of
the Funds were as follows:
<Table>
<Caption>
ACCUMULATED TOTAL TAX BASIS
ORDINARY TAX-EXEMPT CAPITAL AND ACCUMULATED
INCOME INCOME OTHER LOSSES EARNINGS
- ------------------------------------------------------------------------------------
Money Market Portfolio $8,526,571 -- $(1,594,361) $6,932,210
U.S. Government Portfolio 571,625 -- (224,507) 347,118
RMA Tax-Free -- $1,583,832 (520) 1,583,312
RMA California -- 422,665 (390) 422,275
RMA New York -- 304,759 (2,330) 302,429
RMA New Jersey -- 59,059 (940) 58,119
</Table>
At June 30, 2006, 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 RMA
ENDING PORTFOLIO PORTFOLIO TAX-FREE CALIFORNIA NEW YORK NEW JERSEY
- -------------------------------------------------------------------------------------
2011 -- $ 66,251 -- -- -- $ 30
2012 -- 54,167 -- -- -- --
2013 $1,580,188 34,572 $175 -- $2,330 253
2014 -- 69,517 -- $390 -- 657
---------- -------- ---- ---- ------ ----
$1,580,188 $224,507 $175 $390 $2,330 $940
</Table>
- --------------------------------------------------------------------------------
79
<Page>
UBS RMA
Notes to financial statements
In addition, the Money Market Portfolio utilized $122,935 of the capital loss
carryforward to offset current year realized gains.
In accordance with US Treasury regulations, the Money Market Portfolio and RMA
Tax-Free have elected to defer realized capital losses of $14,173 and $345,
respectively, arising after October 31, 2005. Such losses are treated for tax
purposes as arising on July 1, 2006.
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:
FOR THE YEAR ENDED MONEY MARKET U.S. GOVERNMENT RMA
JUNE 30, 2006: PORTFOLIO PORTFOLIO TAX-FREE
- ------------------------------------------------------------------------------
Shares sold 130,539,445,900 8,039,913,466 37,029,751,216
Shares repurchased (130,712,166,383) (8,339,456,937) (36,954,404,043)
Dividends reinvested 374,685,769 33,260,302 83,395,868
Net increase (decrease)
in shares outstanding 201,965,286 (266,283,169) 158,743,041
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
BENEFICIAL INTEREST
There is an unlimited amount of $0.001 par value shares of beneficial interest
authorized for RMA California, RMA New York
- --------------------------------------------------------------------------------
80
<Page>
UBS RMA
Notes to financial statements
and RMA New Jersey. Transactions in shares of beneficial interest, at $1.00 per
share, were as follows:
FOR THE YEAR ENDED
JUNE 30, 2006: RMA CALIFORNIA RMA NEW YORK RMA NEW JERSEY
- --------------------------------------------------------------------------------
Shares sold 12,621,749,957 7,503,855,781 1,888,223,327
Shares repurchased (12,508,912,428) (7,501,011,261) (1,890,609,106)
Dividends reinvested 20,024,080 13,779,850 2,851,684
Net increase in shares
outstanding 132,861,609 16,624,370 465,905
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)
SUBSEQUENT EVENT
UBS Financial Services Inc. serves as the investment advisor and administrator
of UBS RMA New Jersey Municipal Money Fund (the "Fund") pursuant to an
Investment Advisory and Administration Contract (the "Contract").
Effective August 1, 2006, the Contract was amended to reduce the compensation
paid by the Fund to UBS Financial Services Inc. to the following:
AVERAGE DAILY NET ASSETS ANNUAL RATE
Up to $300 million 0.45%
In excess of $300 million up to $750 million 0.39
Over $750 million 0.31
- --------------------------------------------------------------------------------
81
<Page>
UBS RMA MONEY MARKET PORTFOLIO
Financial highlights
Selected data for a share of common stock outstanding throughout each year is
presented below:
FOR THE YEAR
ENDED JUNE 30,
--------------
2006
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00
Net investment income 0.037
Dividends from net investment income (0.037)
Distributions from net realized gains from investment activities --
Total dividends and distributions (0.037)
NET ASSET VALUE, END OF YEAR $ 1.00
TOTAL INVESTMENT RETURN(1) 3.71%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $10,627,952
Expenses to average net assets, net of fee waivers by advisor 0.58%
Expenses to average net assets, before fee waivers by advisor 0.71%
Net investment income to average net assets, net of fee
waivers by advisor 3.66%
Net investment income to average net assets, before fee
waivers by advisor 3.53%
@ Amount of distribution paid represents less than $0.0005 per share.
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each year 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 year reported. Returns do not
reflect the deduction of taxes that a shareholder would pay on Portfolio
distributions.
(2) During the period August 1, 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%.
- --------------------------------------------------------------------------------
82
<Page>
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
----------------------------------------------------------
2005 2004 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.016 0.005 0.010 0.022
Dividends from net investment income (0.016) (0.005) (0.010) (0.022)
Distributions from net realized gains from investment activities (0.000)@ (0.000)@ -- --
Total dividends and distributions (0.016) (0.005) (0.010) (0.022)
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 1.65% 0.51% 1.02% 2.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $10,425,878 $12,434,286 $21,832,875 $22,768,982
Expenses to average net assets, net of fee waivers by advisor 0.58%(2) 0.60% 0.61% 0.60%
Expenses to average net assets, before fee waivers by advisor 0.58% 0.60% 0.61% 0.60%
Net investment income to average net assets, net of fee
waivers by advisor 1.59%(2) 0.50% 1.02% 2.21%
Net investment income to average net assets, before fee
waivers by advisor 1.59% 0.50% 1.02% 2.21%
</Table>
- --------------------------------------------------------------------------------
83
<Page>
UBS RMA U.S. GOVERNMENT PORTFOLIO
Financial highlights
Selected data for a share of common stock outstanding throughout each year is
presented below:
FOR THE YEAR
ENDED JUNE 30,
--------------
2006
- ------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00
Net investment income 0.034
Dividends from net investment income (0.034)
NET ASSET VALUE, END OF YEAR $ 1.00
TOTAL INVESTMENT RETURN(1) 3.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $845,450
Expenses to average net assets 0.62%
Net investment income to average net assets 3.38%
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each year 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 year reported. Returns do not
reflect the deduction of taxes that a shareholder would pay on Portfolio
distributions.
- --------------------------------------------------------------------------------
84
<Page>
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
-------------------------------------------------
2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.015 0.005 0.010 0.021
Dividends from net investment income (0.015) (0.005) (0.010) (0.021)
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 1.50% 0.48% 1.00% 2.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $1,111,698 $1,250,917 $2,510,453 $2,356,829
Expenses to average net assets 0.61% 0.58% 0.56% 0.57%
Net investment income to average net assets 1.49% 0.48% 1.00% 2.06%
</Table>
- --------------------------------------------------------------------------------
85
<Page>
UBS RMA TAX-FREE FUND INC.
Financial highlights
Selected data for a share of common stock outstanding throughout each year is
presented below:
FOR THE YEAR
ENDED JUNE 30,
--------------
2006
- ------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00
Net investment income 0.024
Dividends from net investment income (0.024)
NET ASSET VALUE, END OF YEAR $ 1.00
TOTAL INVESTMENT RETURN(1) 2.40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $3,565,357
Expenses to average net assets 0.60%
Net investment income to average net assets 2.38%
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each year 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 year reported. Returns do not
reflect the deduction of taxes that a shareholder could pay on Fund
distributions.
- --------------------------------------------------------------------------------
86
<Page>
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
-------------------------------------------------
2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.012 0.004 0.007 0.012
Dividends from net investment income (0.012) (0.004) (0.007) (0.012)
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 1.23% 0.38% 0.67% 1.24%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $3,406,614 $2,935,936 $3,238,850 $3,255,520
Expenses to average net assets 0.59% 0.60% 0.63% 0.60%
Net investment income to average net assets 1.23% 0.38% 0.67% 1.23%
</Table>
- --------------------------------------------------------------------------------
87
<Page>
UBS RMA CALIFORNIA MUNICIPAL MONEY FUND
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each
year is presented below:
FOR THE YEAR
ENDED JUNE 30,
--------------
2006
- ------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00
Net investment income 0.023
Dividends from net investment income (0.023)
NET ASSET VALUE, END OF YEAR $ 1.00
TOTAL INVESTMENT RETURN(1) 2.29%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $941,624
Expenses to average net assets, net of fee waivers by 0.63%
advisor
Net investment income to average net assets, net of fee
waivers by advisor 2.28%
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each year 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 year reported. 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%.
- --------------------------------------------------------------------------------
88
<Page>
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
----------------------------------------------
2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.011 0.003 0.006 0.011
Dividends from net investment income (0.011) (0.003) (0.006) (0.011)
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 1.15% 0.31% 0.60% 1.10%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $808,762 $739,133 $767,006 $753,664
Expenses to average net assets, net of fee waivers by 0.64% 0.65%(2) 0.66% 0.65%
advisor
Net investment income to average net assets, net of fee
waivers by advisor 1.16% 0.31%(2) 0.60% 1.09%
</Table>
- --------------------------------------------------------------------------------
89
<Page>
UBS RMA NEW YORK MUNICIPAL MONEY FUND
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each
year is presented below:
FOR THE YEAR
ENDED JUNE 30,
--------------
2006
- ------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00
Net investment income 0.023
Dividends from net investment income (0.023)
NET ASSET VALUE, END OF YEAR $ 1.00
TOTAL INVESTMENT RETURN(1) 2.28%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $612,696
Expenses to average net assets, net of fee waivers by
advisor 0.67%
Net investment income to average net assets, net of fee
waivers by advisor 2.27%
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each year 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 year reported. 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%.
- --------------------------------------------------------------------------------
90
<Page>
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
---------------------------------------------
2005 2004 2003 2002
- -------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.011 0.003 0.006 0.011
Dividends from net investment income (0.011) (0.003) (0.006) (0.011)
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 1.13% 0.29% 0.62% 1.08%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $596,071 $562,396 $588,851 $559,341
Expenses to average net assets, net of fee waivers by
advisor 0.67% 0.67%(2) 0.67% 0.68%
Net investment income to average net assets, net of fee
waivers by advisor 1.12% 0.29%(2) 0.62% 1.07%
</Table>
- --------------------------------------------------------------------------------
91
<Page>
UBS RMA NEW JERSEY MUNICIPAL MONEY FUND
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each
year is presented below:
FOR THE YEAR
ENDED JUNE 30,
--------------
2006
--------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00
Net investment income 0.021
Dividends from net investment income (0.021)
NET ASSET VALUE, END OF YEAR $ 1.00
TOTAL INVESTMENT RETURN(1) 2.11%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $134,639
Expenses to average net assets, net of fee
waivers by advisor 0.81%
Net investment income to average net assets,
net of fee waivers by advisor 2.10%
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each year 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 year reported. 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%.
- --------------------------------------------------------------------------------
92
<Page>
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
--------------------------------------------
2005 2004 2003 2002
--------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00 $ 1.00 $ 1.00 $1.00
Net investment income 0.010 0.002 0.005 0.010
Dividends from net investment income (0.010) (0.002) (0.005) (0.010)
NET ASSET VALUE, END OF YEAR $ 1.00 $ 1.00 $ 1.00 $1.00
TOTAL INVESTMENT RETURN(1) 1.05% 0.16% 0.51% 0.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000's) $134,174 $137,440 $161,854 $128,500
Expenses to average net assets,
net of fee waivers by advisor 0.79% 0.76%(2) 0.73% 0.77%
Net investment income to average net assets,
net of fee waivers by advisor 1.02% 0.15%(2) 0.50% 0.94%
</Table>
- --------------------------------------------------------------------------------
93
<Page>
UBS RMA
Report of independent registered public accounting firm Ernst & Young LLP
The Boards of Directors/Trustees and Shareholders of UBS RMA:
Money Market Portfolio
U.S. Government Portfolio
Tax-Free Fund Inc.
California Municipal Money Fund
New York Municipal Money Fund
New Jersey Municipal Money Fund
We have audited the accompanying statements of net assets of the UBS RMA Money
Market Portfolio and UBS RMA U.S. Government Portfolio (two of the Funds
comprising UBS RMA Money Fund Inc.), UBS RMA Tax-Free Fund Inc., UBS RMA
California Municipal Money Fund and UBS RMA New York Municipal Money Fund (two
of the Funds comprising UBS Managed Municipal Trust) and UBS RMA New Jersey
Municipal Money Fund (the sole Fund comprising UBS Municipal Money Market
Series) (collectively, the "Funds") as of June 30, 2006, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in
- --------------------------------------------------------------------------------
94
<Page>
UBS RMA
Report of independent registered public accounting firm Ernst & Young LLP
(concluded)
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of June 30, 2006, by correspondence with the custodian
and others, or by other appropriate auditing procedures where replies from
others were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of 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 at June 30, 2006, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended, in conformity
with US generally accepted accounting principles.
Ernst & Young LLP
New York, New York
August 16, 2006
- --------------------------------------------------------------------------------
95
<Page>
UBS RMA
General information (unaudited)
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.
PROXY VOTING POLICIES, PROCEDURES AND RECORD
You may obtain a description of each Fund's (1) proxy voting policies, (2) proxy
voting procedures and (3) information regarding how a Fund voted any proxies
related to portfolio securities during the most recent 12-month period ended
June 30 for which an SEC filing has been made, without charge, upon request by
contacting a Fund directly at 1-800-647 1568, online on a Fund's Web site:
www.ubs.com/ubsglobalam-proxy, or on the EDGAR Database on the SEC's Web site
(http://www.sec.gov).
- --------------------------------------------------------------------------------
96
<Page>
UBS RMA
Boards' approvals of sub-advisory and sub-administration contracts (unaudited)
BACKGROUND. At meetings of the boards overseeing the six UBS RMA Funds (each a
"Fund") on February 8, 2006, the members of each board, including the board
members who are not "interested persons" of a Fund ("Independent Board
Members"), as defined in the Investment Company Act of 1940, as amended,
considered and approved the transfer of the respective Fund's current
Sub-Advisory and Sub-Administration Contract between UBS Financial Services
Inc., the Fund's investment advisor, and UBS Global Asset Management (US) Inc.
("UBS Global AM") to UBS Global Asset Management (Americas) Inc. ("UBS Global
Americas"), an affiliate of UBS Global AM.
For various historical reasons, the six UBS RMA Funds were established over time
as separate legal entities or separate series of different legal entities, each
with its own board. The same individuals serve as board members overseeing each
Fund, and often hold joint board meetings. Instead of repeating below in
separate sections each board's basis for the approval of Sub-Advisory and
Sub-Administration Contract(s), the discussion relays the findings made by each
board with respect to the Fund or Funds it oversees. By way of additional
explanation, (1) UBS RMA Money Market Portfolio and UBS RMA U.S. Government
Portfolio are series of UBS RMA Money Fund, Inc., a Maryland corporation; (2)
UBS RMA Tax-Free Fund Inc. is a separate Maryland corporation; (3) UBS RMA
California Municipal Money Fund and UBS RMA New York Municipal Money Fund are
series of UBS Managed Municipal Trust, a Massachusetts business trust; and (4)
UBS RMA New Jersey Municipal Money Fund is a series of UBS Municipal Money
Market Series, a Massachusetts business trust.
The board received information and materials about the proposed transfer both at
its November 2005 meeting and at its February 2006 meeting. In considering the
approval of the transfer of the Sub-Advisory and Sub-Administration Contract for
the Fund(s) it oversees (such transfer referred to as the "New Sub-Advisory and
Sub-Administration Contract"), the board reviewed a memorandum from UBS Global
AM explaining the reasons for the proposed transfer, including that the transfer
would result in management
- --------------------------------------------------------------------------------
97
<Page>
UBS RMA
Boards' approvals of sub-advisory and sub-administration contracts (unaudited)
efficiencies and eliminate the duplication of functions that had resulted from
having two registered investment advisors, UBS Global AM and UBS Global
Americas, providing investment advisory or sub-advisory services to the UBS
funds. The board also reviewed material provided by UBS Global AM on UBS Global
Americas, including that the current portfolio managers for a Fund would not
change as a result of the transfer from UBS Global AM to UBS Global Americas.
The board also noted management's explanation that any expenses resulting from
the transfer would be borne by UBS Global AM, and not a Fund. The board also
received and reviewed a draft of an opinion to be provided by Dechert LLP, Fund
counsel, that the proposed transfer would not be considered an "assignment" of
the existing sub-advisory contract under the Investment Company Act of 1940, as
amended, because (1) there would be no change of actual control of the
sub-advisor to a Fund; (2) there would be no change of management of the
sub-advisor to a Fund; (3) the nature, quality and extent of the sub-advisory
services provided by UBS Global AM under the current Sub-Advisory and
Sub-Administration Contract would not change as a result of the transfer; (4)
the transfer would not result in any change in the fundamental investment
processes, investment strategies or investment techniques currently employed by
UBS Global AM portfolio managers or other investment professionals in providing
services to a Fund; and (5) there would be no change to any of the material
terms of the Sub-Advisory and Sub-Administration Contract as a result of the
transfer. The board took note of its knowledge of UBS Global AM and its
affiliates, including UBS Global Americas, and the current Sub-Advisory and
Sub-Administration Contract for a Fund, including the extensive materials it had
reviewed at its annual contract renewal meeting in the summer of 2005 for a
Fund, and noted that it had at that time received a memorandum from its
independent legal counsel discussing, among other things, the duties of board
members in considering approval of advisory and sub-advisory agreements. UBS
Financial Services Inc. noted that it supported the transfer of its contract
with its affiliate.
- --------------------------------------------------------------------------------
98
<Page>
UBS RMA
Boards' approvals of sub-advisory and sub-administration contracts (unaudited)
In its consideration of the approval of the New Sub-Advisory and
Sub-Administration Contract, the board considered the following factors:
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE NEW SUB-ADVISORY AND
SUB-ADMINISTRATION CONTRACT. The board took note that at its last annual
contract renewal meeting for a Fund, in connection with its review of a Fund's
advisory, sub-advisory and distribution agreements, it had received and
considered extensive information regarding the nature, extent and quality of
management services generally provided to a Fund by UBS Financial Services Inc.
under a Fund's Investment Advisory and Administration Contract and by UBS Global
AM under a Fund's Sub-Advisory and Sub-Administration Contract, and a
description of the administrative and other services rendered to a Fund and its
shareholders by UBS Financial Services Inc. or UBS Global AM and management's
role in coordinating providers of other services to a Fund, including custody,
accounting and transfer agency services. The board considered management's
explanation that UBS Global Americas would provide identical services under the
New Sub-Advisory and Sub-Administration Contract as were provided by UBS Global
AM under the current Sub-Advisory and Sub-Administration Contract. The board's
evaluation of the services to be provided by UBS Global Americas to a Fund 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
investment management and other capabilities and the quality of administrative
and other services, and considered that based on the materials presented to them
these services would remain the same. The board also considered, based on its
knowledge of UBS Global AM and UBS Global Americas, the financial resources
available to UBS Global Americas and its parent organization, UBS AG, one of the
leading financial services companies in the world.
The board concluded that, overall, it was satisfied with the nature, extent and
quality of services expected to be provided to a Fund under the New Sub-Advisory
and Sub-Administration Contract.
- --------------------------------------------------------------------------------
99
<Page>
UBS RMA
Boards' approvals of sub-advisory and sub-administration contracts (unaudited)
MANAGEMENT FEES. The board noted that the current contractual fee for a Fund
under the current Sub-Advisory and Sub-Administration Contract was not proposed
to be changed under the New Sub-Advisory and Sub-Administration Contract. The
board also considered that at its most recent annual contract renewal meeting
during the summer of 2005, it had received and reviewed information on the
contractual fee payable by a Fund to UBS Financial Services Inc. under the
Investment Advisory and Administration Contract, including information on
management fees paid by comparable funds. It was noted that UBS Financial
Services Inc., not a Fund, pays the sub-advisory fee. The board recognized that
the current fee arrangements would not change as a result of the transfer.
FUND PERFORMANCE. The board took into consideration the reports on Fund
performance received by the board at each meeting and the more extensive review
and discussion of Fund performance at its most recent annual contract renewal
meeting. The board also noted that the transfer would not result in any change
in the fundamental investment processes, investment strategies or investment
techniques of a Fund and that no changes in the current Fund personnel
overseeing Fund management were proposed or anticipated as a result of the
transfer.
Based on its prior review and the more updated performance information provided,
the board concluded that a Fund's investment performance was satisfactory.
SUB-ADVISOR PROFITABILITY. As UBS Global Americas would be a new sub-advisor to
a Fund, profitability of UBS Global Americas in providing services to a Fund was
not a primary factor considered by the board. The board did note that at its
most recent annual contract renewal meeting it received and considered a
profitability analysis of UBS Global AM and its affiliates in providing services
to a Fund and had determined at that time that UBS Global AM's profitability was
considered not excessive in light of the nature, extent and quality of the
services provided to a Fund. The board also recognized that the sub-advisory fee
would not change as a result
- --------------------------------------------------------------------------------
100
<Page>
UBS RMA
Boards' approvals of sub-advisory and sub-administration contracts (unaudited)
of the transfer and the services provided to a Fund by UBS Global Americas would
be identical to those currently provided by UBS Global AM, making the
profitability data received at its last contract renewal meeting still of some
relevance. UBS Global AM also noted that a significant benefit of the transfer
of the Sub-Advisory and Sub-Administration Contract to UBS Global Americas was
to reduce a regulatory capital requirement imposed on UBS Global AM, which was
expected to permit the eventual transfer of certain financial assets owned by
UBS Global AM to satisfy regulatory requirements to other parts of UBS AG for
other corporate purposes.
ECONOMIES OF SCALE. The board noted that it had previously considered whether
economies of scale in the provision of services to a Fund would be passed along
to the shareholders during its most recent consideration of the annual renewal
of the Investment Advisory and Administration Contract and the Sub-Advisory and
Sub-Administration Contract and did not see the need to reconsider this factor
again in the context of the transfer of the agreement to a sister investment
advisor.
OTHER BENEFITS TO UBS GLOBAL AMERICAS. The board considered other benefits
received by UBS Global Americas and its affiliates as a result of its proposed
relationship with a Fund, including the potential opportunity to offer
additional products and services to Fund shareholders. The board also considered
the benefits to be realized when certain assets of UBS Global AM were freed from
certain regulatory requirements and were available to be paid as a dividend from
one part of UBS AG to another part of UBS AG for such purposes as UBS AG deemed
appropriate.
In light of the costs of providing investment management, administrative and
other services to a Fund and UBS Global America's expected ongoing commitment to
a Fund, the profits and other ancillary benefits that UBS Global Americas and
its affiliates received or would receive were considered reasonable.
In light of all of the foregoing, the board approved the New Sub-Advisory and
Sub-Administration Contract for a Fund.
- --------------------------------------------------------------------------------
101
<Page>
UBS RMA
Boards' approvals of sub-advisory and sub-administration contracts (unaudited)
No single factor reviewed by the board was identified by the board as the
principal factor in determining whether to approve the New Sub-Advisory and
Sub-Administration Contract. The Independent Board Members were advised by
separate independent legal counsel throughout the process. The board discussed
the proposed approval of the New Sub-Advisory and Sub-Administration Contract in
a private session with their independent legal counsel at which no
representatives of UBS Financial Services Inc., UBS Global AM or UBS Global
Americas were present.
- --------------------------------------------------------------------------------
102
<Page>
UBS RMA
Supplemental information (unaudited)
BOARDS OF DIRECTORS OR TRUSTEES & OFFICERS
UBS RMA Money Fund Inc. ("RMA Money Fund") and UBS RMA Tax-Free Fund Inc. ("RMA
Tax-Free Fund") (each a "Corporation") were organized as Maryland corporations.
UBS RMA Money Market Portfolio and UBS RMA U.S. Government Portfolio are series
of RMA Money Fund. UBS Managed Municipal Trust ("Managed Municipal Trust") and
UBS Municipal Money Market Series ("Municipal Money Market Series") (each a
"Trust") were formed as business trusts under the laws of the Commonwealth of
Massachusetts. UBS RMA California Municipal Money Fund and UBS RMA New York
Municipal Money Fund are series of Managed Municipal Trust. UBS RMA New Jersey
Municipal Money Fund is a series of Municipal Money Market Series. Each
Corporation or Trust is governed by a Board of Directors or Trustees,
respectively (sometimes referred to as "board members"), which oversees the
operations of the applicable Fund. Each board member serves an indefinite term
of office. Officers are appointed by the board members and serve at the pleasure
of a Board. The table below shows, for each board member and officer, his or her
name, address and age, the position held with the Corporation or Trust, the
length of time served as a board member and officer of the Corporation or Trust,
the board member's and officer's principal occupations during the last five
years, the number of portfolios in the UBS fund complex overseen by the board
member or for which a person served as an officer, and other directorships held
by such board member.
The Corporations' and Trusts' Statement of Additional Information contains
additional information about the board members and is available, without charge,
upon request, by calling 1-800-647 1568.
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103
<Page>
UBS RMA
Supplemental information (unaudited)
INTERESTED BOARD MEMBER
<Table>
<Caption>
POSITION(S)
HELD WITH TERM OF OFFICE+ AND
NAME, ADDRESS, AND AGE FUNDS LENGTH OF TIME SERVED
- -----------------------------------------------------------------------------------------
Meyer Feldberg++; 64 Director/Trustee Since 1991 (Managed Municipal
Morgan Stanley Trust) Since 1992 (RMA Money Fund,
1585 Broadway RMA Tax-Free Fund) Since 1996
33rd Floor (Municipal Money Market Series)
New York, NY 10036
INDEPENDENT BOARD MEMBERS
Richard Q. Armstrong; 71 Director/Trustee Since 1996 (Director/Trustee) Since
c/o Willkie Farr & Gallagher LLP and Chairman of 2004 (Chairman of the Board of
787 Seventh Avenue the Board of Directors/Trustees)
New York, NY 10019-6099 Directors/Trustees
David J. Beaubien; 71 Director/Trustee Since 2001
84 Doane Road
Ware, MA 01082
</Table>
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104
<Page>
UBS RMA
Supplemental information (unaudited)
<Table>
<Caption>
NUMBER OF OTHER DIRECTORSHIPS
PRINCIPAL OCCUPATION(S) PORTFOLIOS IN FUND COMPLEX HELD BY
DURING PAST 5 YEARS OVERSEEN BY BOARD MEMBER BOARD MEMBER
- -----------------------------------------------------------------------------------------
Professor Feldberg is Dean Professor Feldberg is a director Professor Feldberg
Emeritus and Sanford Bernstein or trustee of 29 investment is also a director of
Professor of Leadership and companies (consisting of 48 Primedia Inc.
Ethics at Columbia Business portfolios) for which UBS (publishing),
School, although on a two year Global AM or one of its Federated
leave of absence. He is also a affiliates serves as investment Department Stores,
senior advisor to Morgan Stanley advisor, sub-advisor or Inc. (operator of
(financial services) (since manager. department stores),
March 2005). Prior to July 2004, Revlon, Inc.
he was Dean and Professor of (cosmetics), and
Management of the Graduate SAPPI, Ltd.
School of Business at Columbia (producer of paper).
University (since 1989).
Mr. Armstrong is chairman and Mr. Armstrong is a director or None
principal of R.Q.A. Enterprises trustee of 16 investment
(management consulting firm) companies (consisting of 35
(since April 1991 and principal portfolios) for which UBS
occupation since March 1995). Global AM or one of its
affiliates serves as investment
advisor, sub-advisor or
manager.
Mr. Beaubien is retired (since Mr. Beaubien is a director or Mr. Beaubien is also
2003). He was chairman of trustee of 16 investment a director of IEC
Yankee Environmental Systems, companies (consisting of Electronics, Inc., a
Inc., a manufacturer of 35 portfolios) for which UBS manufacturer of
meteorological measuring Global AM or one of its electronic
systems (since 1991). affiliates serves as investment assemblies.
advisor, sub-advisor or manager.
</Table>
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105
<Page>
UBS RMA
Supplemental information (unaudited)
INDEPENDENT BOARD MEMBERS (CONTINUED)
POSITION(S)
HELD WITH TERM OF OFFICE+ AND
NAME, ADDRESS, AND AGE FUNDS LENGTH OF TIME SERVED
- -------------------------------------------------------------------------
Alan S. Bernikow; 65 Director/Trustee Since 2005
207 Benedict Ave.
Staten Island, NY 10314
Richard R. Burt; 59 Director/Trustee Since 1996
1275 Pennsylvania Ave., N.W.
Washington, D.C. 20004
- --------------------------------------------------------------------------------
106
<Page>
UBS RMA
Supplemental information (unaudited)
<Table>
<Caption>
NUMBER OF OTHER DIRECTORSHIPS
PRINCIPAL OCCUPATION(S) PORTFOLIOS IN FUND COMPLEX HELD BY
DURING PAST 5 YEARS OVERSEEN BY BOARD MEMBER BOARD MEMBER
- -------------------------------------------------------------------------------------------
Mr. Bernikow is a consultant on Mr. Bernikow is a director or Mr. Bernikow is
non-management matters for the trustee of 16 investment also a director of
firm of Deloitte & Touche companies (consisting of Revlon, Inc.
(international accounting and 35 portfolios) for which UBS (cosmetics) (and
consulting firm) (since Global AM or one of its serves as the chair
June 2003). Previously, he was affiliates serves as investment of its audit
Deputy Chief Executive Officer at advisor, sub-advisor or manager. committee), a
Deloitte & Touche. director of Mack-
Cali Realty
Corporation (real
estate investment
trust) (and serves as
the chair of its
audit committee)
and a director of
the Casual Male
Retail Group, Inc.
(menswear).
Mr. Burt is chairman of Diligence Mr. Burt is a director or trustee Mr. Burt is also a
Inc. (information and risk of 16 investment companies director of The
management firm) and IEP (consisting of 35 portfolios) for Central European
Advisors (international which UBS Global AM or one Fund, Inc., The
investments and consulting firm). of its affiliates serves as Germany Fund,
investment advisor, sub-advisor Inc., The New
or manager. Germany Fund,
Inc., IGT, Inc.
(provides
technology to
gaming and
wagering industry)
and The Protective
Group, Inc.
(produces armor
products).
</Table>
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107
<Page>
UBS RMA
Supplemental information (unaudited)
INDEPENDENT BOARD MEMBERS (CONCLUDED)
POSITION(S)
HELD WITH TERM OF OFFICE+ AND
NAME, ADDRESS, AND AGE FUNDS LENGTH OF TIME SERVED
- --------------------------------------------------------------------------------
Bernard H. Garil; 66 Director/Trustee Since 2005
6754 Casa Grande Way
Delray Beach, FL 33446
Heather R. Higgins; 46 Director/Trustee Since 2005
255 E. 49th St., Suite 23D
New York, NY 10017
- --------------------------------------------------------------------------------
108
<Page>
UBS RMA
Supplemental information (unaudited)
<Table>
<Caption>
NUMBER OF OTHER DIRECTORSHIPS
PRINCIPAL OCCUPATION(S) PORTFOLIOS IN FUND COMPLEX HELD BY
DURING PAST 5 YEARS OVERSEEN BY BOARD MEMBER BOARD MEMBER
- ---------------------------------------------------------------------------------------------
Mr. Garil is retired (since 2001). Mr. Garil is a director or trustee Mr. Garil is also a
He was a Managing Director at of 16 investment companies director of OFI
PIMCO Advisory Services (from (consisting of 35 portfolios) for Trust Company
1999 to 2001) where he served which UBS Global AM or one (commercial trust
as President of closed-end funds of its affiliates serves as company) and a
and Vice-President of the variable investment advisor, sub-advisor trustee for the
insurance product funds advised or manager. Brooklyn College
by OpCap Advisors (until 2001). Foundation, Inc.
(charitable
foundation).
Ms. Higgins is the President and Ms. Higgins is a director or None
Director of The Randolph trustee of 16 investment
Foundation (charitable foundation) companies (consisting of
(since 1991). Ms. Higgins also 35 portfolios) for which UBS
serves on the boards of several Global AM or one of its
non-profit charitable groups, affiliates serves as investment
including the Independent advisor, sub-advisor or
Women's Forum (chairman), the manager.
Philanthropy Roundtable (vice
chairman) and the Hoover
Institution (executive committee).
</Table>
- --------------------------------------------------------------------------------
109
<Page>
UBS RMA
Supplemental information (unaudited)
OFFICERS
<Table>
<Caption>
PRINCIPAL OCCUPATION(S) DURING
TERM OF OFFICE+ PAST 5 YEARS; NUMBER OF
NAME, ADDRESS, POSITION(S) HELD AND LENGTH PORTFOLIOS IN FUND COMPLEX FOR
AND AGE WITH FUNDS OF TIME SERVED WHICH PERSON SERVES AS OFFICER
- ---------------------------------------------------------------------------------------------
Joseph Allessie*; Vice President Since 2005 Mr. Allessie is a director and
41 and Assistant deputy general counsel at UBS
Secretary Global Asset Management (US)
Inc. and UBS Global Asset
Management (Americas) Inc.
(collectively, "UBS Global
AM--Americas region") (since
2005). Prior to joining UBS
Global AM--Americas region,
he was senior vice president
and general counsel of
Kenmar Advisory Corp. (from
2004 to 2005). Prior to that
Mr. Allessie was general
counsel and secretary of GAM
USA Inc., GAM Investments,
GAM Services, GAM Funds,
Inc. and the GAM Avalon
Funds (from 1999 to 2004).
Mr. Allessie is a vice president
and assistant secretary of
20 investment companies
(consisting of 90 portfolios) for
which UBS Global AM--
Americas region or one of its
affiliates serves as investment
advisor, sub-advisor or
manager.
</Table>
- --------------------------------------------------------------------------------
110
<Page>
UBS RMA
Supplemental information (unaudited)
OFFICERS (CONTINUED)
<Table>
<Caption>
PRINCIPAL OCCUPATION(S) DURING
TERM OF OFFICE+ PAST 5 YEARS; NUMBER OF
NAME, ADDRESS, POSITION(S) HELD AND LENGTH PORTFOLIOS IN FUND COMPLEX FOR
AND AGE WITH FUNDS OF TIME SERVED WHICH PERSON SERVES AS OFFICER
- ---------------------------------------------------------------------------------------------
W. Douglas Beck*; President Since 2005 Mr. Beck is an executive director
39 and head of product
development and management
for UBS Global AM--Americas
region (since 2002). From
March 1998 to November 2002,
he held various positions at
Merrill Lynch, the most recent
being first vice president and co-
manager of the managed
solutions group. Mr. Beck is
president of 20 investment
companies (consisting of 90
portfolios) for which UBS Global
AM--Americas region or one of
its affiliates serves as investment
advisor, sub-advisor or manager,
and was vice president of such
investment companies from
2003 to 2005.
Thomas Disbrow*; Vice President Since 2000 Mr. Disbrow is a director (since
40 and Treasurer (Vice 2001), head of retail mutual
President) fund operations and co-head of
Since 2004 the mutual fund finance
(Treasurer) department (since 2004) of UBS
Global AM--Americas region.
Mr. Disbrow is a vice president
and treasurer of 16 investment
companies (consisting of
35 portfolios) and vice president
and assistant treasurer of four
investment companies
(consisting of 55 portfolios) for
which UBS Global AM--
Americas region or one of its
affiliates serves as investment
advisor, sub-advisor or
manager.
</Table>
- --------------------------------------------------------------------------------
111
<Page>
UBS RMA
Supplemental information (unaudited)
OFFICERS (CONTINUED)
<Table>
<Caption>
PRINCIPAL OCCUPATION(S) DURING
TERM OF OFFICE+ PAST 5 YEARS; NUMBER OF
NAME, ADDRESS, POSITION(S) HELD AND LENGTH PORTFOLIOS IN FUND COMPLEX FOR
AND AGE WITH FUNDS OF TIME SERVED WHICH PERSON SERVES AS OFFICER
- ---------------------------------------------------------------------------------------------
Michael J. Flook*; Vice President Since 2006 Mr. Flook is an associate director
41 and Assistant and a senior manager of the
Treasurer mutual fund finance department
of UBS Global AM--Americas
region (since 2006). Prior to
joining UBS Global AM--
Americas region, he was a
senior manager with The
Reserve (asset management
firm) from May 2005 to
May 2006. Prior to that he was
a senior manager with PFPC
Worldwide since October 2000.
Mr. Flook is a vice president
and assistant treasurer of
16 investment companies
(consisting of 35 portfolios) for
which UBS Global AM--
Americas region or one of its
affiliates serves as investment
advisor, sub-advisor or manager.
Elbridge T. Gerry III*; Vice President Since 1996 Mr. Gerry is a managing
49 (Managed director--municipal fixed
Municipal income of UBS Global AM--
Trust) Americas region (since 2001).
Since 2000 Mr. Gerry is a vice president of
(Municipal six investment companies
Money Market (consisting of 10 portfolios) for
Series, RMA which UBS Global AM--
Tax-Free Fund) Americas region or one of its
affiliates serves as investment
advisor, sub-advisor or manager.
</Table>
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112
<Page>
UBS RMA
Supplemental information (unaudited)
OFFICERS (CONTINUED)
<Table>
<Caption>
PRINCIPAL OCCUPATION(S) DURING
TERM OF OFFICE+ PAST 5 YEARS; NUMBER OF
NAME, ADDRESS, POSITION(S) HELD AND LENGTH PORTFOLIOS IN FUND COMPLEX FOR
AND AGE WITH FUNDS OF TIME SERVED WHICH PERSON SERVES AS OFFICER
- ----------------------------------------------------------------------------------------------------
Mark F. Kemper**; Vice President Since 2004 Mr. Kemper is general counsel of UBS
48 and Secretary Global AM--Americas region (since
2004). Mr. Kemper also is a managing
director of UBS Global AM--Americas
region (since 2006). He was deputy
general counsel of UBS Global Asset
Management (Americas) Inc. ("UBS
Global AM (Americas)") from July
2001 to July 2004.He has been
secretary of UBS Global AM--Americas
since 1999 and assistant secretary
of UBS Global Asset Management Trust
Company since 1993. Mr. Kemper is
secretary of UBS Global AM--Americas
region (since 2004). Mr. Kemper is
vice president and secretary of 20
investment companies (consisting of
90 portfolios) for which UBS Global
AM--Americas region or one of its
affiliates serves as investment
advisor, sub-advisor or manager.
Joanne M. Kilkeary*; Vice President Since 2004 Ms. Kilkeary is an associate
38 and Assistant director (since 2000) and a senior
Treasurer manager (since 2004) of the mutual
fund finance department of UBS
Global AM--Americas region. Ms.
Kilkeary is a vice president and
assistant treasurer of 16 investment
companies (consisting of 35
portfolios) for which UBS Global
AM--Americas region or one of its
affiliates serves as investment
advisor, sub-advisor or manager.
</Table>
- --------------------------------------------------------------------------------
113
<Page>
UBS RMA
Supplemental information (unaudited)
OFFICERS (CONTINUED)
<Table>
<Caption>
PRINCIPAL OCCUPATION(S) DURING
TERM OF OFFICE+ PAST 5 YEARS; NUMBER OF
NAME, ADDRESS, POSITION(S) HELD AND LENGTH PORTFOLIOS IN FUND COMPLEX FOR
AND AGE WITH FUNDS OF TIME SERVED WHICH PERSON SERVES AS OFFICER
- ----------------------------------------------------------------------------------------------------
Tammie Lee*; Vice President Since 2005 Ms. Lee is a director and associate
35 and Assistant general counsel of UBS Global
Secretary AM--Americas region (since 2005).
Prior to joining UBS Global
AM--Americas region, she was vice
president and counsel at Deutsche
Asset Management/Scudder Investments
from 2003 to 2005. Prior to that she
was assistant vice president and
counsel at Deutsche Asset
Management/Scudder Investments from
2000 to 2003. Ms. Lee is a vice
president and assistant secretary of
20 investment companies (consisting
of 90 portfolios) for which UBS
Global AM--Americas region or one of
its affiliates serves as investment
advisor, sub-advisor or manager.
Joseph T. Malone*; Vice President Since 2004 Mr. Malone is a director (since
38 and Assistant 2001) and co-head of the mutual fund
Treasurer finance department (since 2004) of
UBS Global AM--Americas region. From
August 2000 through June 2001, he
was the controller at AEA Investors
Inc. Mr. Malone is vice president
and assistant treasurer of 16
investment companies (consisting of
35 portfolios) and vice president,
treasurer and principal accounting
officer of four investment companies
(consisting of 55 portfolios) for
which UBS Global AM--Americas region
or one of its affiliates serves as
investment advisor, sub-advisor or
manager.
</Table>
- --------------------------------------------------------------------------------
114
<Page>
UBS RMA
Supplemental information (unaudited)
OFFICERS (CONTINUED)
<Table>
<Caption>
PRINCIPAL OCCUPATION(S) DURING
TERM OF OFFICE+ PAST 5 YEARS; NUMBER OF
NAME, ADDRESS, POSITION(S) HELD AND LENGTH PORTFOLIOS IN FUND COMPLEX FOR
AND AGE WITH FUNDS OF TIME SERVED WHICH PERSON SERVES AS OFFICER
- ----------------------------------------------------------------------------------------------------
Michael H. Vice President Since 2001 Mr. Markowitz is a managing director
Markowitz**; (RMA Money (since 2004), portfolio manager and
41 Fund) head of U.S. short duration fixed
income (since 2003) of UBS Global
AM--Americas region. Mr. Markowitz
is a vice president of five
investment companies (consisting of
23 portfolios) for which UBS Global
AM--Americas region or one of its
affiliates serves as investment
advisor, sub-advisor or manager.
Joseph McGill*; Vice President Since 2004 Mr. McGill is a managing director
44 and Chief Compliance (since 2006) and chief compliance
Officer officer (since 2003) at UBS Global
AM--Americas region. Prior to
joining UBS Global AM--Americas
region, he was assistant general
counsel at J. P. Morgan Investment
Management (from 1999 to 2003). Mr.
McGill is a vice president and chief
compliance officer of 20 investment
companies (consisting of 90
portfolios) for which UBS Global
AM--Americas region or one of its
affiliates serves as investment
advisor, sub-advisor or manager.
</Table>
- --------------------------------------------------------------------------------
115
<Page>
UBS RMA
Supplemental information (unaudited)
OFFICERS (CONTINUED)
<Table>
<Caption>
PRINCIPAL OCCUPATION(S) DURING
TERM OF OFFICE+ PAST 5 YEARS; NUMBER OF
NAME, ADDRESS, POSITION(S) HELD AND LENGTH PORTFOLIOS IN FUND COMPLEX FOR
AND AGE WITH FUNDS OF TIME SERVED WHICH PERSON SERVES AS OFFICER
- ----------------------------------------------------------------------------------------------------
Eric Sanders*; Vice President Since 2005 Mr. Sanders is a director and
40 and Assistant associate general counsel of UBS
Secretary Global AM--Americas region (since
2005). From 1996 until June 2005, he
held various positions at Fred Alger
& Company, Incorporated, the most
recent being assistant vice
president and associate general
counsel. Mr. Sanders is a vice
president and assistant secretary of
20 investment companies (consisting
of 90 portfolios) for which UBS
Global AM--Americas region or one of
its affiliates serves as investment
advisor, sub-advisor or manager.
Keith A. Weller*; Vice President Since 1995 Mr. Weller is an executive director
45 and Assistant (Managed and senior associate general counsel
Secretary Municipal of UBS Global AM--Americas region
Trust, RMA (since 2005) and has been an
Money Fund, attorney with affiliated entities
RMA Tax-Free, since 1995. Mr. Weller is a vice
Fund) Since president and assistant secretary of
1996 20 investment companies (consisting
(Municipal of 90 portfolios) for which UBS
Money Market Global AM--Americas region or one of
Series) its affiliates serves as investment
advisor, sub-advisor or manager.
</Table>
* This person's business address is 51 West 52nd Street, New York, New York
10019-6114.
** This person's business address is One North Wacker Drive, Chicago, Illinois
60606.
+ Each board member holds office for an indefinite term. Each board member
who has attained the age of seventy-two (72) years will be subject to
retirement on the last day of the month in which he or she attains such
age. Officers are appointed by the board members and serve at the pleasure
of the board.
++ Professor Feldberg is deemed an "interested person" of the Funds as defined
in the Investment Company Act because he is a senior advisor to Morgan
Stanley, a financial services firm with which the Funds may conduct
transactions.
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<Page>
DIRECTORS/TRUSTEES
Richard Q. Armstrong
CHAIRMAN
David J. Beaubien
Alan S. Bernikow
Richard R. Burt
Meyer Feldberg
Bernard H. Garil
Heather R. 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 AND SUB-ADMINISTRATOR
UBS Global Asset Management (Americas) Inc.
51 West 52nd Street
New York, New York 10019-6114
PRINCIPAL UNDERWRITER
UBS Global Asset Management (US) Inc.
51 West 52nd Street
New York, New York 10019-6114
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 (Americas) Inc. All rights reserved.
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[UBS LOGO]
UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
51 West 52nd Street
New York, New York 10019
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ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to its principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions pursuant to Section 406 of
the Sarbanes-Oxley Act of 2002. (The registrant has designated the code of
ethics adopted pursuant to Sarbanes-Oxley as a "Code of Conduct" to lessen the
risk of confusion with its separate code of ethics adopted pursuant to Rule
17j-1 under the Investment Company Act of 1940, as amended.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board has determined that the following person serving on the
registrant's Audit Committee is an "audit committee financial expert" as defined
in item 3 of Form N-CSR: Alan S. Bernikow. Mr. Bernikow is independent as
defined in item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES:
For the fiscal years ended June 30, 2006 and June 30, 2005, the
aggregate Ernst & Young LLP (E&Y) audit fees for professional services
rendered to the registrant were approximately $95,800 and $99,400,
respectively.
Fees included in the audit fees category are those associated with the
annual audits of financial statements and services that are normally
provided in connection with statutory and regulatory filings.
(b) AUDIT-RELATED FEES:
In each of the fiscal years ended June 30, 2006 and June 30, 2005, the
aggregate audit-related fees billed by E&Y for services rendered to
the registrant that are reasonably related to the performance of the
audits of the financial statements, but not reported as audit fees,
were approximately $3,000 and $5,424, respectively.
Fees included in the audit-related fees category are those associated
with (1) the reading and providing of comments on the 2005 and 2004
semiannual financial statements and (2) review of the consolidated
2004 and 2003 reports on the profitability of the UBS Funds to UBS
Global Asset Management (US) Inc. ("UBS Global AM") and its affiliates
to assist the board members in their annual advisory/administration
contract and service/distribution plan reviews.
There were no audit-related fees required to be approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal
years indicated above.
(c) TAX FEES:
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In each of the fiscal years ended June 30, 2006 and June 30, 2005, the
aggregate tax fees billed by E&Y for professional services rendered to
the registrant were approximately $24,120 and $16,200, respectively.
Fees included in the tax fees category comprise all services performed
by professional staff in the independent accountant's tax division
except those services related to the audits. This category comprises
fees for review of tax compliance, tax return preparation and excise
tax calculations.
There were no tax fees required to be approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years
indicated above.
(d) ALL OTHER FEES:
In each of the fiscal years ended June 30, 2006 and June 30, 2005,
there were no fees billed by E&Y for products and services, other than
the services reported in Item 4(a)-(c) above, rendered to the
registrant.
Fees included in the all other fees category would consist of services
related to internal control reviews, strategy and other consulting,
financial information systems design and implementation, consulting on
other information systems, and other tax services unrelated to the
registrant.
There were no "all other fees" required to be approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal
years indicated above.
(e) (1) AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES:
The registrant's Audit Committee ("audit committee") has adopted an
"Audit Committee Charter (Amended and Restated as of May 12, 2004)"
(the "charter"). The charter contains the audit committee's
pre-approval policies and procedures. Reproduced below is an
excerpt from the charter regarding pre-approval policies and
procedures:
The [audit] Committee shall:
...
2. Pre-approve (a) all audit and permissible non-audit
services(1) to be provided to the Fund and (b) all
permissible non-audit services to be provided by the
Fund's independent auditors to UBS Global [AM] and any
Covered Service Providers, if the engagement relates
directly to the operations and financial reporting of
the Fund. In carrying out this responsibility, the
Committee shall seek periodically from UBS Global [AM]
and from the independent auditors a list of such audit
and permissible non-audit services that can be expected
to be rendered to the Fund, UBS Global [AM] or any
Covered Service Providers by the Fund's independent
auditors, and an estimate of the fees sought to be paid
in connection with such services. The Committee may
delegate its responsibility to pre-approve any such
audit and permissible non-audit services to a
sub-committee consisting of the Chairperson of the
Committee and two other members of the Committee as the
Chairperson, from time to time, may determine and
appoint, and such sub-committee shall
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report to the Committee, at its next regularly
scheduled meeting after the sub-committee's meeting,
its decision(s). From year to year, the Committee shall
report to the Board whether this system of pre-approval
has been effective and efficient or whether this
Charter should be amended to allow for pre-approval
pursuant to such policies and procedures as the
Committee shall approve, including the delegation of
some or all of the Committee's pre-approval
responsibilities to other persons (other than UBS
Global [AM] or the Fund's officers).
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(1) The Committee will not approve non-audit
services that the Committee believes may
taint the independence of the auditors.
Currently, permissible non-audit services
include any professional services (including
tax services) that are not prohibited
services as described below, provided to the
Fund by the independent auditors, other than
those provided to the Fund in connection with
an audit or a review of the financial
statements of the Fund. Permissible non-audit
services may NOT include: (i) bookkeeping or
other services related to the accounting
records or financial statements of the Fund;
(ii) financial information systems design and
implementation; (iii) appraisal or valuation
services, fairness opinions or
contribution-in-kind reports; (iv) actuarial
services; (v) internal audit outsourcing
services; (vi) management functions or human
resources; (vii) broker or dealer, investment
adviser or investment banking services;
(viii) legal services and expert services
unrelated to the audit; and (ix) any other
service the Public Company Accounting
Oversight Board determines, by regulation, is
impermissible.
Pre-approval by the Committee of any
permissible non-audit services is not
required so long as: (i) the aggregate amount
of all such permissible non-audit services
provided to the Fund, UBS Global [AM] and any
service providers controlling, controlled by
or under common control with UBS Global [AM]
that provide ongoing services to the Fund
("Covered Service Providers") constitutes not
more than 5% of the total amount of revenues
paid to the independent auditors (during the
fiscal year in which the permissible
non-audit services are provided) by (a) the
Fund, (b) its investment adviser and (c) any
entity controlling, controlled by, or under
common control with the investment adviser
that provides ongoing services to the Fund
during the fiscal year in which the services
are provided that would have to be approved
by the Committee; (ii) the permissible
non-audit services were not recognized by the
Fund at the time of the engagement to be
non-audit services; and (iii) such services
are promptly brought to the attention of the
Committee and approved by the Committee (or
its delegate(s)) prior to the completion of
the audit.
(e) (2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X:
AUDIT-RELATED FEES:
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There were no amounts that were approved by the audit committee
pursuant to the de minimis exception for the fiscal years ended
June 30, 2006 and June 30, 2005 on behalf of the registrant.
There were no amounts that were required to be approved by the
audit committee pursuant to the de minimis exception for the
fiscal years ended June 30, 2006 and June 30, 2005 on behalf of
the registrant's service providers that relate directly to the
operations and financial reporting of the registrant.
TAX FEES:
There were no amounts that were approved by the audit committee
pursuant to the de minimis exception for the fiscal years ended
June 30, 2006 and June 30, 2005 on behalf of the registrant.
There were no amounts that were required to be approved by the
audit committee pursuant to the de minimis exception for the
fiscal years ended June 30, 2006 and June 30, 2005 on behalf of
the registrant's service providers that relate directly to the
operations and financial reporting of the registrant.
ALL OTHER FEES:
There were no amounts that were approved by the audit committee
pursuant to the de minimis exception for the fiscal years ended
June 30, 2006 and June 30, 2005 on behalf of the registrant.
There were no amounts that were required to be approved by the
audit committee pursuant to the de minimis exception for the
fiscal years ended June 30, 2006 and June 30, 2005 on behalf of
the registrant's service providers that relate directly to the
operations and financial reporting of the registrant.
(f) According to E&Y, for the fiscal year ended June 30, 2006, the
percentage of hours spent on the audit of the registrant's financial
statements for the most recent fiscal year that were attributed to
work performed by persons who are not full-time, permanent employees
of E&Y was 0%.
(g) For the fiscal years ended June 30, 2006 and June 30, 2005, the
aggregate fees billed by E&Y of $1,647,963 and $1,726,445,
respectively, for non-audit services rendered on behalf of the
registrant ("covered"), its investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser) and any
entity controlling, controlled by, or under common control with the
adviser ("non-covered") that provides ongoing services to the
registrant for each of the last two fiscal years of the registrant is
shown in the table below:
2006 2005
---------- ----------
Covered Services $ 27,120 $ 21,624
Non-Covered Services 1,620,843 1,704,821
(h) The registrant's audit committee was not required to consider whether
the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any sub-adviser whose
role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling,
controlled by, or under
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common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
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.
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, 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
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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 that occurred during the registrant's most
recent fiscal half-year 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 as required pursuant to Section 406 of the
Sarbanes-Oxley Act of 2002 (and designated by registrant as a "Code of
Conduct") is incorporated by reference herein from Exhibit EX-99.CODE
ETH to the registrant's Report on Form N-CSR filed September 7, 2004
(Accession Number: 0001047469-04-028104)(SEC File No. 811-03946).
(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.
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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 Managed Municipal Trust
By: /s/ W. Douglas Beck
---------------------------------
W. Douglas Beck
President
Date: September 8, 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: September 8, 2006
By: /s/ Thomas Disbrow
---------------------------------
Thomas Disbrow
Vice President and Treasurer
Date: September 8, 2006