SALOMON BROTHERS HIGH INCOME FUND II INC, N-30D, 2001-01-05

SALOMON BROTHERS HIGH INCOME FUND II INC
N-30D, 2001-01-05

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<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

November 21, 2000

Dear Shareholders:

We are pleased to provide the semi-annual report for the Salomon Brothers High
Income Fund II Inc (the "Fund") as of October 31, 2000. We hope you find this
report to be useful and informative. Included are market commentaries on the
U.S. high-yield market and the emerging markets debt with discussion on the Fund
performance, a schedule of the Fund's investments as of October 31, 2000 and the
Fund's financial statements for the six-month period ended October 31, 2000. The
Fund distributed income dividends totaling $0.78 per share during the period.
The table below shows the annualized distribution rate and the total return for
the period covered by this report based on the Fund's October 31, 2000 net asset
value ("NAV") per share and its New York Stock Exchange ("NYSE") closing
price:/1/

Annualized
Price Per Share Distribution Rate/2/ Total Return/2/
--------------- -------------------- ---------------
$11.15 (NAV) 13.99% 0.53%
$11.25 (NYSE) 13.87% 2.35%

In comparison, the Salomon Smith Barney High Yield Market Index ("SSB High Yield
Market Index")/3/ returned a negative 1.43% and the J.P. Morgan Emerging Markets
Bond Index Plus ("EMBI+")/4/ returned 5.31% for the same period.

U.S. HIGH-YIELD MARKET

The U.S. high-yield bond market returned a negative 1.43% for the six months
ended October 31, 2000, as reported by the SSB High Yield Market Index. During
the period, the high-yield bond market continued to feel the effects of:

1. uneasiness over inflation and interest rates;
2. volatility in the equity markets;
3. investor outflows from mutual funds;
4. cyclical and default rate concerns; and
5. reduced broker/dealer liquidity.

_____________
1 The NAV is calculated by subtracting total liabilities from the closing value
of all securities held by the Fund (plus all other assets) and dividing the
results (total net assets) by the total number of shares outstanding. The NAV
fluctuates with changes in the value of the securities in which the Fund has
invested. However, the price at which the investor may buy or sell shares of
the Fund is at their market (NYSE) price as determined by supply and demand.

2 Total returns are based on changes in net asset value or the market value,
respectively. Total returns assume the reinvestment of all dividends and/or
capital gains distributions in additional shares. Annualized distribution rate
is the Fund's current monthly income dividend rate, annualized, and then
divided by the NAV or the market value noted in this report. The annualized
distribution rate assumes a current monthly income dividend rate of $0.13 for
twelve months. This rate is as of November 30, 2000 and is subject to change.
The important difference between a total return and an annualized distribution
rate is that the total return takes into consideration a number of factors
including the fluctuation of the NAV or the market value during the period
reported. The NAV fluctuation includes the effects of unrealized appreciation
or depreciation in the Fund. Accordingly, since an annualized distribution
rate only reflects the current monthly income dividend rate annualized, it
should not be used as the sole indicator to judge the return you receive from
your Fund investment. Past performance is not indicative of future results.

3 The SSB High Yield Market Index covers a significant portion of the below-
investment-grade U.S. corporate bond market. Please note an investor cannot
invest directly in an index.

4 The EMBI+ is a total return index that tracks the traded market for U.S.
dollar-denominated Brady and other similar sovereign restructured bonds traded
in the emerging market. Please note an investor cannot invest directly in an
index.
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

The Federal Reserve Board's ("Fed") 50 basis points/5/ interest rate increase
and volatility in the U.S. stock markets contributed to continued mutual fund
outflows of $701 million in May of 2000, as investors focused on the potential
for further interest rate hikes. Investors also increasingly considered the
possibility of a cyclical downturn in the near term, which would exacerbate
already high default rates. As a result, the high-yield bond market returned a
negative 1.39% in May 2000. In June, July and August, however, benign economic
data and a more passive Fed mitigated some interest rate concerns while the high
absolute yields available in the high-yield bond market attracted investors from
the volatile equity markets. As a result, mutual fund flows improved to a
positive $829 million and the high-yield market rallied to return 4.13% for the
three months ended August 31, 2000. However, in September and October, a string
of negative earnings announcements, high energy prices and signs of slowing
economic growth revived profitability and default concerns, adversely affecting
mutual fund flows which led to total net mutual fund outflows of nearly $2.2
billion during the period. As a result, the high-yield bond market suffered
negative returns in the last two months of the period, resulting in a decline of
1.43% for the six months ended October 31, 2000.

For the six months ended October 31, 2000, the high-yield bond market's top
performing sectors included energy, gaming, cable & other media, utilities,
healthcare and financial companies. The energy sector performance was driven by
the sustained rise in oil and gas prices. The less cyclical gaming, cable &
other media and utilities sectors benefited from their perception as industries
with more cash flow stability. The healthcare sector benefited from stronger
earnings performance. The worst performing sectors included telecommunications,
leisure, retail, automotive, metals/mining and supermarkets/drugstores.
Telecommunications underperformed due to increased stock market volatility,
heightened competition and concerns over profitability and funding. Leisure was
adversely impacted by difficulties in the theatre operator sector stemming from
overcapacity. Retail suffered from concerns over decreased consumer spending and
intensified competition. Automotive was negatively affected by cyclical concerns
and deteriorating conditions in the parts aftermarket. Negative steel product
price pressures caused by high imports and customer inventory de-stocking hurt
performance in metals/mining. In terms of credit quality, the BB graded credit
tier, which returned 3.03%, outperformed B and CCC graded returns of negative
2.64% and negative 9.91%, respectively, as investors continued to favor larger,
higher quality, more liquid BB graded issues.

The Fund's performance benefited from overweightings in energy and gaming and
underweightings in telecommunications, leisure and supermarkets/drugstores. The
Fund was adversely impacted, however, by an overweighting in retail and
underweightings in utilities, healthcare and financial. During the course of the
period, the Fund responded to market conditions by increasing its exposure to
energy, gaming, utilities and healthcare issuers and decreasing its exposure to
metals/mining and supermarkets/drugstores issuers.

On October 31, 2000, the high-yield bond market was yielding 13.44%, up from
12.48% at April 28, 2000 as reported by the SSB High-Yield Market Index. The
excess yield over U.S. Treasuries was 7.63%, 152 basis points more than 6.11% as
of April 30, 2000.

OUTLOOK

Going forward, we expect the high-yield bond market to continue to experience
volatility over the course of the Fund's current fiscal year primarily as a
result of several factors, including: (i) mutual fund

_____________
5 A basis point is 0.01% or one one-hundredth of a percent.
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S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

flows, (ii) continued concerns over default rates, (iii) reduced secondary
market liquidity and (iv) continuing cyclical concerns. In light of these
conditions, we are pursuing a conservative investment strategy geared to
overweighting BB graded credits and pursuing selective opportunities in
undervalued B and CCC graded credits.

Emerging Markets Debt

Emerging markets debt returned 5.31% for the six months ended October 31, 2000
as measured by the EMBI+. Performance was mixed throughout the period as monthly
returns varied from 5.07% to negative 2.55%. Additionally, volatility in the
equity markets and heightened tension in the Middle East also impacted emerging
markets debt performance for the period. While Ecuador generated returns of over
41% during the period, individual country performance was more balanced than in
recent periods, with nine countries out-performing and seven countries
underperforming the EMBI+ return for the period. Notable out-performers were
Russia, Venezuela and Nigeria all posting double digit returns.

Throughout the period the Fed continued its policy of slowing the pace of growth
within the U.S. economy. The inflationary bias, now in effect for the past six
Federal Open Market Committee ("FOMC")/6/ meetings was maintained. Rates rose 50
basis points to 6.50% on May 16, 2000. The federal funds rate ("fed funds
rate")/7/ has remained at this level through three subsequent FOMC meetings.

Oil price strength over the past six months continued to drive many emerging
market economies. Oil prices ended the period at $33.75 per barrel (on average)
up over 30% in six months. In our view, Russia, Venezuela, Mexico and Colombia
all continue to benefit from rising oil prices.

Return volatility for emerging markets debt remained substantially lower
relative to year-earlier levels. The decline in volatility is a function of
reduced leverage in the market coupled with expanded investor interest in the
asset class. During the month ending October 31, 2000, return volatility for the
EMBI+ totaled 8.27% down substantially from the 1999 levels of 16.55%.

Ecuador was the best performing country in the EMBI+ returning 41.59% for the
period. Ecuador completed its debt restructuring of defaulted Brady bonds,/8/
exchanging them for two issues of global bonds, one maturing in 2012 and one
maturing in 2030. The relatively fast resolution of this Brady bond default
surprised the market and drove Ecuador's September returns well above the EMBI+
in a difficult month for emerging markets. In addition, the Paris Club granted
Ecuador a standard rescheduling of US $880 million of bilateral debt. This Paris
Club rescheduling represents all arrears plus all payments falling due through
April 2001, when Ecuador's current stand-by agreement with the International
Monetary Fund ("IMF") expires. While Ecuador continues to face a number of
economic and political challenges, we believe that the debt restructuring gives
the country time to deal with these challenges.

_______________
6 The FOMC is a policy-making body of the Fed, the U.S. central bank, that is
responsible for the formulation of policy designed to promote economic growth,
full employment, stable prices and a sustainable pattern of international
trade and payments.

7 The fed funds rate is the interest rate that banks with excess reserves at a
Federal Reserve district bank charge other banks that need overnight loans.
The fed funds rate often points to the direction of U.S. interest rates.

8 Brady bonds are public issues, U.S. dollar denominated bonds of developing
countries, mainly Latin America, that were exchanged, in a restructuring, for
commercial bank loans in default.
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Russia was the second best performing country in the EMBI+ over the past six
months, returning 14.06%. It is the best performer year-to-date. The country
continues to work with the IMF on an expanded financing package. Most notable
during the period were:

. The Duma approved the terms of Russia's debt restructuring with the London
Club of creditors. The Russian government signed the agreements and the
debt exchange closed in August;

. Tax collections continued to run ahead of budgeted levels, leading to a
stronger than anticipated fiscal balance; and

. Rising oil prices helped expand Russia's hard currency reserve position.
Russian reserves have doubled over the previous year and now exceed $25
billion. This reserve position substantially strengthens Russia's credit
quality.

This broad range of events encouraged investors to reassess the outlook for
Russia. Russian debt prices reflected this improved outlook. We have remained
overweight Russia during the past six months.

Venezuela returned 11.75% for the period, third highest in the EMBI+. Oil price
strength continues to drive the Venezuelan economy. We believe that Venezuela's
fiscal and external accounts are benefiting from high oil prices, and that
Venezuela's large volume of oil production and its relatively low debt load make
it one of the most leveraged oil and gas producers in the emerging markets.
Politics has been the other key influence on returns in Venezuela this year.
President Chavez was re-elected to a six year term of office in July.
International reserves now exceed total public sector external debt, which
stands at $21 billion. Venezuelan monthly volatility levels, currently at 12%
represent a 50% reduction from twelve months ago. In our view, Venezuela
continues to be an attractive credit at current spread levels, trading at
approximately 115 basis points over the market EMBI+.

Mexico returned 7.73% for the period. Mexico has been viewed by investors as a
safe-haven in emerging markets since Moody's Investors Service upgraded its
foreign currency debt rating to investment grade (Baa3). Sound fiscal policies,
increased political stability and a reduced debt burden continue to be viewed
positively by outside investors. That perception was enhanced when Vincente Fox,
PAN candidate, was elected president on July 2, 2000. The election marked the
first defeat for the PRI party in over 70 years of presidential politics. We
believe this evolutionary opening of the Mexican political system further
establishes Mexico as a leading credit in emerging markets.

Brazil returned 6.91% for the period. Good fiscal results are at the core of
Brazil's solid success. The factors behind these good fiscal results include a
combination of one-off revenue events and very disciplined expenditure control.
Brazilian government officials have made substantial progress in dealing with
the country's debt problems. Brazil successfully completed a $5 billion exchange
of a new 40-year local bond for various issues of its Brady bonds. In addition,
negotiations with the IMF have led to a lowering of the target for foreign
currency reserves, giving the Brazilian central bank additional flexibility in
supporting the local currency.

Argentina lagged the returns of the EMBI+ for the period returning a negative
2.95%. Our underweight position in Argentina continues to contribute to our
overall performance. We believe that the Argentine economy must grow at a more
accelerated pace in order to reduce the fiscal pressure of its debt amortisation
schedule. The federal government of Argentina is working with the IMF while
negotiating with congress and the provisional governments to develop a plan to
freeze spending and stimulate growth.
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Finally, Peru's debt performance has significantly trailed the EMBI+ return for
the period, returning a negative 8.62%. Political uncertainty has risen in Peru
following the resignation of President Fujimori pending new elections. The
president's resignation was precipitated by heightened allegations of election
fraud. New elections are scheduled for April 2001. Fujimori will not stand for
re-election. While the situation is likely to remain volatile, it is our view
that Peru remains totally committed to servicing its debt.

Outlook

The emerging markets closed the month of October with spreads at 745 basis
points over Treasuries. The forces that led to strong emerging markets
performance over the last two years remain intact. We believe reduced volatility
levels and improving country fundamentals will continue to drive valuations in
emerging market countries. In addition, six emerging market countries are on
alert for credit upgrade by the rating agencies.

In a continuing effort to provide timely information concerning Salomon Brothers
High Income Fund II Inc, shareholders may call 1-888-777-0102 (toll free),
Monday through Friday from 8:00 a.m. to 6:00 p.m. EST for the Fund's current net
asset value, market price and other information regarding the Fund's portfolio
holdings and allocations. For information concerning your Salomon Brothers High
Income Fund II Inc stock account, please call PFPC Global Fund Services at
1-800-331-1710.

Sincerely,

/s/ Heath B. McLendon /s/ Peter J. Wilby

Heath B. McLendon Peter J. Wilby
Chairman and President Executive Vice President

/s/ Beth A. Semmel /s/ James E. Craige

Beth A. Semmel James E. Craige
Executive Vice President Executive Vice President
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S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Schedule of Investments (unaudited)
October 31, 2000

<TABLE>
<CAPTION>
Face
Amount Security Value
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Corporate Bonds -- 65.3%
Basic Industries -- 6.0%
$ 10,000,000 AEI Holding Co., Inc., 10.500% due 12/15/05 (a) ............................................ $ 850,000
5,000,000 APP China Group Ltd., 14.000% due 3/15/10 (a) .............................................. 2,112,500
5,000,000 Avecia Group PLC, 11.000% due 7/1/09 ....................................................... 4,825,000
2,800,000 Borden Chemicals & Plastics Ltd., 9.500% due 5/15/05 ....................................... 1,400,000
2,500,000 Gentek Inc., 11.000% due 8/1/09 ............................................................ 2,487,500
10,000,000 Glencore Nickel Property Ltd., 9.000% due 12/1/1 ........................................... 8,312,500
14,475,000 Jordan Industries Inc., zero coupon until 4/1/02 (11.750% thereafter), due 4/1/09 .......... 9,191,625
2,500,000 Lyondell Chemical Co., 9.875% due 5/1/07.................................................... 2,443,750
Owens-Illinois, Inc.:
3,500,000 7.850% due 5/15/04 ....................................................................... 2,642,500
1,500,000 7.500% due 5/15/10 ....................................................................... 1,012,500
P&L Coal Holdings Corp.:
1,500,000 8.875% due 5/15/08 ....................................................................... 1,492,500
2,500,000 9.625% due 5/15/08 ....................................................................... 2,443,750
1,345,000 Pacifica Paper Inc., 10.000% due 3/15/09 ................................................... 1,348,362
4,675,000 PCI Chemicals Canada Inc., 9.250% due 10/15/07 ............................................. 1,799,875
6,000,000 Radnor Holdings Corp., 10.000% due 12/1/03 ................................................. 5,340,000
2,360,000 Repap New Brunswick Inc., 10.625% due 4/15/05 .............................................. 2,436,700
5,000,000 Republic Technology International Corp., 13.750% due 7/15/09 ............................... 781,250
2,925,000 Tembec Industries Inc., 8.625% due 6/30/09 ................................................. 2,873,812
-------------
53,794,124
-------------
Consumer Cyclicals -- 3.9%
2,500,000 Advance Stores Co. Inc., 10.250% due 4/15/08 ............................................... 1,768,750
6,625,000 Aztar Corp., 8.875% due 5/15/07 ............................................................ 6,475,937
2,000,000 Cole National Group, Inc., 8.625% due 8/15/07 .............................................. 1,250,000
3,000,000 Finlay Enterprises Inc., 9.000% due 5/1/08 ................................................. 2,715,000
5,000,000 Guitar Center Management, 11.000% due 7/1/06 ............................................... 4,825,000
HMH Properties Inc.:
500,000 7.875% due 8/1/05 ........................................................................ 477,500
7,000,000 7.875% due 8/1/08 ........................................................................ 6,475,000
Levi Strauss & Co.:
1,500,000 6.800% due 11/1/03 ....................................................................... 1,233,750
2,500,000 7.000% due 11/1/06 ....................................................................... 1,837,500
3,500,000 Mattress Discounters Corp., 12.625% due 7/15/07 ............................................ 3,220,000
2,025,000 Pillowtex Corp., 9.000% due 12/15/07 ....................................................... 313,875

-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.

Page 6
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S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Schedule of Investments (unaudited) (continued)
October 31, 2000

Consumer Non-Cyclicals -- 11.4%
11,000,000 AKI Inc., 10.500% due 7/1/08 ............................................................ 8,800,000
2,000,000 American Safety Razor Co., 9.875% due 8/1/05 ............................................ 1,930,000
4,000,000 Circus Circus Enterprise Inc., 9.250% due 12/1/05 ....................................... 3,970,000
5,000,000 Columbia/HCA Healthcare Co., 6.910% due 6/15/05 ......................................... 4,718,750
7,250,000 Derby Cycle Corp., 10.000% due 5/15/08 .................................................. 1,848,750
6,000,000 French Fragrance Inc., 10.375% due 5/15/07 .............................................. 5,810,000
5,000,000 Fresenius Medical Care Capital Trust II, 7.875% due 2/1/08 .............................. 4,662,500
5,000,000 Harrah's Operating Co. Inc., 7.875% due 12/15/05 ........................................ 4,862,500
6,500,000 Home Interiors & Gifts Inc., 10.125% due 6/1/08 ......................................... 2,177,500
7,750,000 Horseshoe Gaming LLC, 9.375% due 6/15/07 ................................................ 7,798,438
5,500,000 Imperial Holly Corp., 9.750% due 12/15/07 ............................................... 962,500
10,000,000 Iowa Select Farms, L.P., 10.750% due 12/1/05 (a) ........................................ 2,850,000
5,500,000 Majestic Star Casino Inc., 10.875% due 7/1/06 ........................................... 4,867,500
3,000,000 Mandalay Resort Group, 10.250% due 8/1/07 ............................................... 3,082,500
5,000,000 MGM Grand Inc., 9.750% due 6/1/07 ....................................................... 5,212,500
2,500,000 Mohegan Tribal Gaming, 8.750% due 1/1/09 ................................................ 2,450,000
Park Place Entertainment Inc.:
2,000,000 7.875% due 12/15/05 .................................................................. 1,930,000
3,750,000 9.375% due 2/15/07 ................................................................... 3,796,875
4,000,000 Premier International Foods Corp., 12.000% due 9/1/09 ................................... 3,120,000
2,201,000 Pueblo Xtra International Inc., 9.500% due 8/1/03 ....................................... 1,045,475
Revlon Consumer Products Corp.:
1,450,000 8.125% due 2/1/06 .................................................................... 1,022,250
2,250,000 9.000% due 11/1/06 ................................................................... 1,653,750
1,875,000 Station Casions, Inc., 9.875% due 7/1/10 (a) ............................................ 1,889,062
Sun International Hotels Inc.:
500,000 9.000% due 3/15/07 ................................................................... 466,875
4,500,000 8.625% due 12/15/07 .................................................................. 4,151,250

---------------------------------------------------------------------------------------------------------------------
</TABLE>

See Notes to Financial Statements.

Page 7
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Schedule of Investments (unaudited) (continued)
October 31, 2000

Energy -- 6.9%
Belco Oil & Gas Corp.:
1,000,000 10.500% due 4/1/06..................................................................... 1,025,000
3,500,000 8.875% due 9/15/07..................................................................... 3,307,500
5,500,000 Canadian Forest Oil Ltd., 8.750% due 9/15/07............................................. 5,307,500
2,750,000 Comstock Resources Inc., 11.250% due 5/1/07.............................................. 2,901,250
10,000,000 Continental Resources Inc., 10.250% due 8/1/08........................................... 9,000,000
5,030,000 Grey Wolf Inc., 8.875% due 7/1/07........................................................ 4,904,250
5,000,000 Key Energy Services Inc., 14.000% due 1/15/09............................................ 5,675,000
2,000,000 Lomak Petroleum Inc., 8.750% due 1/15/07................................................. 1,910,000
4,500,000 Nuevo Energy Co., 9.375% due 10/1/10 (a)................................................. 4,500,000
5,000,000 Ocean Energy Inc., 8.875% due 7/15/07.................................................... 5,093,750
2,000,000 Pennzoil Co., 10.250% due 11/1/05........................................................ 2,227,500
4,250,000 Pioneer Natural Resource Co., 9.625% due 4/1/10.......................................... 4,473,125
Plains Resources Inc.:
1,500,000 10.250% due 3/15/06.................................................................... 1,515,000
2,750,000 10.250% due 3/15/06 (a)................................................................ 2,777,500
1,000,000 R&B Falcon Corp., 9.500% due 12/15/08.................................................... 1,072,500
5,000,000 Vintage Petroleum Inc., 9.750% due 6/30/09............................................... 5,262,500
--------------
60,952,375
--------------

Financial -- 2.5%
1,975,400 Airplanes Pass-Through Trust, Series D, 10.875% due 3/15/19.............................. 1,490,300
ContiFinancial Corp.:
11,600,000 7.500% due 3/15/02 (b)(c).............................................................. 1,682,000
9,620,000 8.375% due 8/15/03 (b)(c).............................................................. 1,394,900
12,445,000 8.125% due 4/1/08 (b)(c)............................................................... 1,804,525
5,000,000 Felcor Lodging L.P., 9.500% due 9/15/08 (a).............................................. 4,987,500
3,000,000 Metris Cos. Inc., 10.125% due 7/15/06.................................................... 2,850,000
8,000,000 Morgan Stanley Aircraft Finance, Series 1A, Class D1, 8.700% due 3/15/23................. 5,760,000
7,500,000 Nationwide Credit Inc., 10.250% due 1/15/08.............................................. 1,912,500
--------------
21,881,725
--------------
</TABLE>

--------------------------------------------------------------------------------
See Notes to Financial Statements.

Page 8
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Schedule of Investments (unaudited) (continued)
October 31, 2000

Industrial - Manufacturing -- 5.3%
1,485,000 Anchor Advanced Products Inc., 11.750% due 4/1/04.............................................. 1,269,675
8,800,000 Breed Technologies Inc., 9.250% due 4/15/08 (b)(c)............................................. 880
5,375,000 Communication Instruments Inc., 10.000% due 9/15/04............................................ 4,595,625
10,000,000 Federal Mogal Co., 7.500% due 1/15/09.......................................................... 2,450,000
7,000,000 Foamex L.P., 9.875% due 6/15/07................................................................ 5,005,000
3,750,000 Hexcel Corp., 9.750% due 1/15/09............................................................... 3,487,500
2,500,000 International Utility Structures Inc., 10.750% due 2/1/08...................................... 1,812,500
8,000,000 Key Plastics, Inc., 10.250% due 3/15/07 (b)(c)................................................. 520,000
3,875,000 Lear Corp., 8.110% due 5/15/09................................................................. 3,482,655
4,500,000 Moll Industries, Inc., 10.500% due 7/1/08...................................................... 1,237,500
5,000,000 Motors & Gears, Inc., 10.750% due 11/15/06..................................................... 4,875,000
4,000,000 Oxford Automotive Inc., 10.125% due 6/15/07.................................................... 3,180,000
3,000,000 Polymer Group Inc., 9.000% due 7/1/07.......................................................... 2,145,000
7,500,000 Sequa Corp., 9.000% due 8/1/09................................................................. 7,312,500
3,500,000 Williams Scotsman Inc., 9.875% due 6/1/07...................................................... 2,957,500
3,500,000 Winsloew Furniture, Inc., 12.750% due 8/15/07.................................................. 3,237,500
------------
47,568,835
------------

Media - Telecommunications -- 18.3%
2,136,263 Adelphia Communications Corp., 9.500% due 2/15/04.............................................. 2,013,427
2,000,000 Albrittion Communications Co., 9.750% due 11/30/07............................................. 1,925,000
10,500,000 Avalon Cable Holdings LLC, zero coupon until 12/1/03 (11.875% thereafter), due 12/1/08......... 6,930,000
2,000,000 Call Net Enterprises Inc., zero coupon until 8/15/03 (8.940% thereafter), due 8/15/08.......... 570,000
8,250,000 Century Communications, zero coupon due 1/15/08................................................ 3,217,500
8,000,000 Charter Communications Holdings LLC, zero coupon until 4/1/04
(9.920% thereafter), due 4/1/11.............................................................. 4,670,000
Citadel Broadcasting Co.:
2,500,000 10.250% due 7/1/07........................................................................... 2,437,500
2,250,000 9.250% due 11/15/08.......................................................................... 2,086,875
5,000,000 Covad Communications Group, Inc., 12.000% due 2/15/10.......................................... 2,325,000
</TABLE>

--------------------------------------------------------------------------------
See Notes to Financial Statements.

Page 9
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Schedule of Investments (unaudited) (continued)
October 31, 2000

<TABLE>
<CAPTION>
Face
Amount Security Value
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media - Telecommunication -- 18.3% (continued)
CSC Holdings Inc.:
$ 5,250,000 9.875% due 2/15/13................................................................... $ 5,355,000
5,000,000 9.875% due 4/1/23.................................................................... 5,075,000
2,250,000 Exodus Communications Inc., 11.625% due 7/15/10 (a).................................... 2,092,500
4,000,000 Frontiervision Holdings L.P., zero coupon until 9/15/01 (11.875% thereafter),
due 9/15/07.......................................................................... 3,360,000
Global Crossing Holding Ltd.:
2,500,000 9.125% due 11/15/06.................................................................. 2,396,875
5,000,000 9.500% due 11/15/09.................................................................. 4,800,000
7,500,000 Hollinger International Publishing Inc., 9.250% due 2/1/06............................. 7,462,500
4,250,000 ICG Holdings Inc., zero coupon until 5/1/01 (12.500% thereafter), due 5/1/06........... 722,500
Intermedia Communications Inc.:
1,375,000 8.500% due 1/15/08................................................................... 1,299,375
3,625,000 8.600% due 6/1/08.................................................................... 3,434,687
3,000,000 Lamar Media Group, 9.625% due 12/1/06.................................................. 3,037,500
2,750,000 Leap Wireless International Inc., 12.500% due 4/15/10.................................. 2,021,250
Level 3 Communications Inc.:
3,750,000 11.000% due 3/15/08.................................................................. 3,393,750
3,625,000 9.125% due 5/1/08.................................................................... 2,945,312
Nextel Communications Inc.:
10,000,000 Zero coupon until 10/31/02 (9.750% thereafter), due 10/31/07......................... 7,675,000
8,000,000 Zero coupon until 2/15/03 (9.950% thereafter), due 2/15/08........................... 5,980,000
2,500,000 NextLink Communications Inc., 10.750% due 6/1/09....................................... 2,206,250
NTL Communications Corp.:
5,000,000 Zero coupon until 2/1/01 (11.500% thereafter), due 2/1/06............................ 4,425,000
10,000,000 Zero coupon until 10/15/03 (12.375% thereafter), due 10/15/08........................ 5,900,000
8,250,000 Price Communications Wireless Inc., 9.125% due 12/15/06................................ 8,291,250
PSINet Inc.:
1,500,000 11.500% due 11/1/08.................................................................. 746,250
4,500,000 11.000% due 8/1/09................................................................... 2,193,750
10,000,000 R.H. Donnelley Corp., 9.125% due 6/1/08................................................ 9,750,000
2,500,000 Rogers Cantel, Inc., 9.375% due 6/1/08................................................. 2,562,500
6,500,000 Rogers Communications Inc., 8.875% due 7/15/07......................................... 6,532,500
10,000,000 Sun Media Corp., 9.500% due 2/15/07.................................................... 10,125,000
4,350,000 Telecorp PCS Inc., 10.625% due 7/15/10................................................. 4,360,875
Telewest Communications PLC:
2,500,000 9.625% due 10/1/06................................................................... 2,075,000
3,250,000 Zero coupon until 10/1/00 (11.000% thereafter), due 10/1/07.......................... 2,843,750
3,125,000 Zero coupon until 4/15/04 (9.250% thereafter), due 4/15/09........................... 1,414,063
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements.

Page 10
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Schedule of Investments (unaudited) (continued)
October 31, 2000

<TABLE>
<CAPTION>
Face
Amount Security Value
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media - Telecommunication -- 18.3%(continued)
$ 3,750,000 Ubiquitel Operating Co., zero coupon until 4/15/05 (14.000% thereafter), due 4/15/10........ $ 1,706,250
16,500,000 United International Holdings, zero coupon until 2/15/03 (10.750% thereafter),
due 2/15/08.............................................................................. 10,147,500
-------------
162,506,489
-------------
Service - Other -- 5.2%
10,000,000 Advanstar Communications Inc., 9.250% due 5/1/08............................................ 10,150,000
Allied Waste North America, Inc.:
1,850,000 7.875% due 1/1/09........................................................................ 1,604,875
2,250,000 10.000% due 8/1/09....................................................................... 1,935,000
7,000,000 American Business Information Inc., 9.500% due 6/15/08...................................... 5,355,000
4,500,000 Aqua Chemical Inc., 11.250% due 7/1/08...................................................... 3,082,500
5,000,000 Avis Rent-A-Car, Inc., 11.000% due 5/1/09................................................... 5,350,000
3,000,000 Comforce Operating Inc., 12.000% due 12/1/07................................................ 1,350,000
4,750,000 Crown Castle International Corp., 10.750% due 8/1/11........................................ 4,892,500
4,000,000 Holt Group, 9.750% due 1/15/06.............................................................. 545,000
750,000 Iron Mountain Inc., 8.750% due 9/30/09...................................................... 718,125
4,000,000 Mail-Well Corp., 8.750% due 12/15/08........................................................ 2,980,000
Pierce Leahy Co.:
2,250,000 11.125% due 7/15/06...................................................................... 2,348,438
4,400,000 8.125% due 5/15/08....................................................................... 4,114,000
6,500,000 Safety-Kleen Corp., 9.250% due 5/15/09 (b)(c)............................................... 97,500
2,000,000 Sitel Corp., 9.000% due 3/15/06............................................................. 1,770,000
-------------
46,292,938
-------------
Technology - Electronics -- 1.0%
3,000,000 Amphenol Corp., 9.875% due 5/15/07.......................................................... 3,045,000
7,500,000 Polaroid Corp., 11.500% due 2/15/06......................................................... 5,887,500
-------------
8,932,500
-------------

Transportation -- 2.0%
5,000,000 Enterprise Shipholding Inc., 8.875% due 5/1/08.............................................. 2,531,250
5,500,000 Northwest Airlines Corp., 7.625% due 3/15/05................................................ 5,018,750
7,000,000 Stena Line, 10.625% due 6/1/08.............................................................. 3,605,000
6,933,679 Viacao Aerea Riograndens, 9.600% due 2/10/05................................................ 6,448,321
-------------
17,603,321
-------------
</TABLE>

--------------------------------------------------------------------------------
See Notes to Financial Statements.

Page 11
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Schedule of Investments (unaudited) (continued)
October 31, 2000

<TABLE>
<CAPTION>
Face
Amount Security Value
------------------------------------------------------------------------------------------
Utilities -- 1.9%
<S> <C> <C>
$ 5,000,000 AES Corp., 9.375% due 9/15/10................................ $ 5,100,000
5,000,000 Azurix Corp., 10.750% due 2/15/10............................ 4,625,000
Calpine Corp.:
2,675,000 8.750% due 7/15/07........................................ 2,624,844
2,425,000 7.750% due 4/15/09........................................ 2,282,531
2,500,000 8.625% due 8/15/10........................................ 2,471,875
-----------
17,104,250
-----------

Total Corporate Bonds (Cost -- $729,213,229).................. 581,681,218
-----------
Convertible Corporate Bonds -- 0.9%
Consumer Non-Cyclical -- 0.2%
37,500,000 Sunbeam Corp., zero coupon due 3/25/18 (a)................. 2,250,000
-----------
Technology -- 0.7%
7,500,000 Quantum Corp., 7.000% due 8/1/04........................... 6,042,225
-----------

Total Convertible Corporate Bonds (Cost--$16,799,310)......... 8,292,225
-----------

Face
Amount+
-------------
Sovereign Bonds -- 31.7%
Argentina -- 6.1%
Republic of Argentina:
5,000,000/ABS/ 8.750% due 7/10/02......................................... 4,531,250
500,000 14.250% due 11/30/02 (d)................................... 481,250
9,000,000 11.725% due 4/10/05 (d).................................... 8,370,000
3,380,000/ABS/ 11.750% due 2/12/07........................................ 2,894,125
20,000 11.750% due 4/7/09......................................... 17,595
3,750,000 11.375% due 3/15/10........................................ 3,215,625
13,970,000 11.750% due 6/15/15........................................ 11,916,410
18,509,144/ABS/ Bocon Pro 1, 2.7348% due 4/1/07 (d)........................ 12,751,699
11,250,000 FRB, 7.625% due 3/31/05 (d)................................ 9,850,781
-----------
54,028,735
-----------
</TABLE>

________________________________________________________________________________
See Notes to Financial Statements.

Page 12
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Schedule of Investments (unaudited) (continued)
October 31, 2000

Face
Amount+ Security Value
--------------------------------------------------------------------------------

Brazil -- 6.2%
Federal Republic of Brazil:
160,000 12.750% due 1/15/20.............................. $ 148,560
4,840,000 12.250% due 3/6/30............................... 4,228,950
65,766,000 11.000% due 8/17/40.............................. 50,574,054
------------
54,951,564
------------

Bulgaria -- 1.4%
16,890,000 Republic of Bulgaria, FLIRB, Series A, 3.000% due
7/28/12 (d) ................................................. 12,002,457
------------
Colombia -- 1.8%
Republic of Colombia:
1,300,000 12.8325% due 8/13/05 (d)......................... 1,290,250
5,500,000 9.750% due 4/23/09............................... 4,412,375
8,835,000 11.750% due 2/25/20.............................. 7,116,593
4,500,000 8.375% due 2/15/27............................... 2,778,750
------------
15,597,968
------------

Croatia -- 0.1%
Republic of Croatia:
423,634 Series A, 7.750% due 7/31/10 (d)................. 391,862
181,744 Series B, 7.750% due 7/31/06 (d)................. 173,111
------------
564,973
------------

Ecuador -- 0.9%
Republic of Ecuador:
5,000,000 12.000% due 11/15/12............................. 3,400,000
12,375,000 4.000% due 8/15/30 (d)........................... 4,721,836
------------
8,121,836
------------

Ivory Coast -- 0.4%
Republic of Ivory Coast:
7,000,000 FLIRB, due 3/29/18 (b)(c)........................ 962,500
17,099,998 PDI, due 3/29/18 (b)(c).......................... 2,479,500
------------
3,442,000
------------
Peru -- 1.4%
Republic of Peru:
16,875,000 FLIRB, 3.750% due 3/29/18 (d).................... 8,996,484
6,000,000 PDI, 4.000% due 3/7/17 (d)....................... 3,622,500
------------
12,618,984
------------

________________________________________________________________________________
See Notes to Financial Statements.

Page 13
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Schedule of Investments (unaudited) (continued)
October 31, 2000

<TABLE>
<CAPTION>
Face
Amount+ Security Value
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Russia -- 7.5%
Republic of Russia Federation:
757,643 8.250% due 3/31/10............................................................................. $ 488,680
175,162,500 2.500% due 3/31/30 (d)......................................................................... 66,233,320
-------------
66,722,000
-------------

Venezuela -- 5.9%
Republic of Venezuela:
22,375,000 13.625% due 8/15/18............................................................................ 20,808,750
9,090,000 9.250% due 9/15/27............................................................................. 6,010,763
3,750,000 Discount Bond, Series W-A, 7.375% due 3/31/20(d)............................................... 3,018,750
FLIRB:
15,011,720 Series A, 7.4375% due 3/31/07 (d)............................................................ 12,422,198
5,261,840 Series B, 7.4375% due 3/31/07 (d)............................................................ 4,354,173
7,175,470 NMB, 8.000% due 12/18/05 (d)................................................................... 6,099,150
-------------
52,713,784
--------------
Total Sovereign Bonds (Cost -- $289,518,349...................................................... 280,764,301
-------------
Loan Participations (e) -- 1.7%
7,735,136 Kingdom of Morocco, Tranche A, 7.750% due 1/1/09 (Chase Manhattan Bank) (d).................... 6,777,914
10,105,729 The People's Democratic Republic of Algeria, Tranche 1, 6.8125% due 9/4/06
(Chase Manhattan Bank) (d)..................................................................... 8,539,341
-------------
Total Loan Participations (Cost -- $15,140,928)................................................. 15,317,255
-------------

Shares
----------------
Preferred Stock -- 0.4%
15,000 CSC Holdings Inc., Series M 11.125% due 4/1/08.................................................. 1,592,625
26,550 Rural Cellular Corp., 12.500% due 5/15/05....................................................... 2,100,769
TCR Holding Corp.:
17,552 Class B Shares (c)............................................................................ 176
9,654 Class C Shares (c)............................................................................ 97
25,451 Class D Shares (e)............................................................................ 255
52,657 Class E Shares (d)............................................................................ 527
-------------
Total Preferred S(Cost -- $4,238,116)......................................................... 3,694,449
-------------
</TABLE>

--------------------------------------------------------------------------------
See Notes to Financial Statements.

Page 14
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Schedule of Investments (unaudited) (continued)
October 31, 2000

<TABLE>
<CAPTION>
Face
Amount Security Value
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Warrants (c) -- 0.0%
$ 5,000 APP China Group Ltd., Expires 3/15/10........................................... $ 50
2,750 Leap Wireless International Inc., Expires 4/15/10............................... 30,594
3,500 Mattress Discounters Co., Expires 7/15/0........................................ 35,000
5,000 Republic Technologies/RTI Capital Corp., Expires 7/15/09........................ 500
5,000 Ubiquitel Operating Inc., Expires 4/15/1........................................ 150,625
3,500 Winsloew Furniture, Inc., Expires 8/15/07....................................... 52,500
------------
Total Warrants (Cost -- $528,375)............................................... 269,269
------------

Repurchase Agreement -- 0.0%
355,000 Warburg Dillon Read LLC, 6.540% due 11/1/00; Proceeds at maturity -- $355,064;
(Fully collateralized by U.S. Treasury Bonds, 11.625% due 11/15/00;
Market value -- $ 363,056) (Cost -- $355,000)................................ 355,000
------------
Total Investments -- 100% (Cost -- $1,055,793,307*)............................. $890,373,717
============
</TABLE>

______________________
+ Face amount denominated in U.S. dollars unless otherwise indicated.
(a) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers.
(b) Security is currently in default.
(c) Non-income producing security.
(d) Rate shown reflects current rate on instrument with variable rate or step
coupon rates.
(e) Participation interests were acquired through the financial institutions
indicated.
* Aggregate cost for Federal income tax purposes is substantially the same.

Abbreviations used in this schedule:
-----------------------------------
ARS -- Argentine Peso.
FLIRB -- Front Loaded Interest Reduction Bond.
FRB -- Floating Rate Bond.
NMB -- New Money Bond.
PDI -- Past Due Interest.

--------------------------------------------------------------------------------
See Notes to Financial Statements.

Page 15
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Statement of Assets and Liabilities (unaudited)
October 31, 2000

<TABLE>
ASSETS:
<S> <C>
Investments, at value (Cost -- $1,055,793,307)................................................ $ 890,373,717
Cash.......................................................................................... 716
Interest receivable........................................................................... 24,018,393
Prepaid expenses.............................................................................. 14,335
--------------
Total Assets.................................................................................. 914,407,161
--------------

LIABILITIES:
Bank loan (Note 9)............................................................................ 155,000,000
Loan interest payable......................................................................... 957,604
Management fee payable........................................................................ 786,798
Administration fee payable.................................................................... 78,680
Accrued expenses.............................................................................. 208,783
--------------
Total Liabilities............................................................................. 157,031,865
--------------
Total Net Assets.............................................................................. $ 757,375,296
==============

NET ASSETS:
Common stock ($0.001 par value, 100,000,000 shares authorized; 67,940,079 shares
outstanding)................................................................................ $ 67,940
Additional paid-in capital.................................................................... 1,011,875,842
Overdistributed net investment income......................................................... (6,027,782)
Accumulated net realized loss from security transactions...................................... (83,121,114)
Net unrealized depreciation on investments.................................................... (165,419,590)
--------------
Total Net Assets.............................................................................. $ 757,375,296
--------------
Net Asset Value, per share ($757,375,296 / 67,940,079 shares).................................... $ 11.15
==============
</TABLE>

--------------------------------------------------------------------------------
See Notes to Financial Statements.

Page 16
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Statement of Operations
For the Six Months Ended October 31, 2000 (unaudited)

<TABLE>
<S> <C>
INCOME:
Interest........................................................................................ $ 57,420,072
-------------
EXPENSES:
Interest expense (Note 9)....................................................................... 5,500,273
Management fees (Note 2)........................................................................ 4,749,537
Administration fees (Note 2).................................................................... 474,954
Audit and legal................................................................................. 162,781
Custody......................................................................................... 43,041
Registration fees............................................................................... 31,444
Directors' fees................................................................................. 12,918
Other........................................................................................... 45,918
-------------
Total Expenses.................................................................................. 11,020,866
-------------
Net Investment Income.............................................................................. 46,399,206
-------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTE 3):
Net Realized Loss From Security Transactions (excluding short-term securities):
Proceeds from sales........................................................................... 522,142,836
Cost of securities sold....................................................................... 522,285,744
-------------
Net Realized Loss............................................................................... (142,908)
-------------
Change in Net Unrealized Depreciation of Investments:
Beginning of period........................................................................... (124,238,419)
End of period................................................................................. (165,419,590)
-------------
Increase in Net Unrealized Depreciation......................................................... (41,181,171)
-------------
Net Loss on Investments............................................................................ (41,324,079)
-------------
Increase in Net Assets From Operations............................................................. $ 5,075,127
=============
</TABLE>

_______________________________________________________________________________
See Notes to Financial Statements.

Page 17

<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Statements of Changes in Net Assets
For the Six Months Ended October 31, 2000 (unaudited)
and the Year Ended April 30, 2000

<TABLE>
<CAPTION>
October 31 April 30
------------ ----------
<S> <C> <C>
OPERATIONS:
Net investment income................................................... $ 46,399,206 $ 96,576,660
Net realized loss....................................................... (142,908) (35,895,120)
Increase in net unrealized depreciation................................. (41,181,171) (77,781,609)
--------------- -------------
Increase (Decrease) in Net Assets From Operations....................... 5,075,127 (17,100,069)
--------------- -------------

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................................................... (52,405,494) (95,974,620)
--------------- -------------
Decrease in Net Assets From Distributions to Shareholders............... (52,405,494) (95,974,620)
--------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued on reinvestment of dividends
(1,193,340 shares issued)............................................. 13,962,922 --
Offering expenses credited to paid-in capital........................... -- 24,975
--------------- -------------
Increase in Net Assets From Capital Share Transactions.................. 13,962,922 24,975
--------------- -------------
Decrease in Net Assets..................................................... (33,367,445) (113,049,714)

NET ASSETS:
Beginning of period..................................................... 790,742,741 903,792,455
--------------- -------------
End of period*.......................................................... $ 757,375,296 $ 790,742,741
=============== =============
*Includes overdistributed net investment income of:........................ $ (6,027,782) $ (21,494)
=============== =============
</TABLE>

_______________________________________________________________________________
See Notes to Financial Statements.

Page 18
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Statement of Cash Flows (unaudited)
For the Six Months Ended October 31, 2000

<TABLE>
<S> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Purchases of long-term portfolio investments.............................................. $ (649,800,561)
Proceeds from disposition of long-term portfolio investments and principal paydowns....... 528,490,518
Net sale of short-term portfolio investments.............................................. 78,571,000
--------------
(42,739,043)

Net investment income..................................................................... 46,399,206
Capitalized income on payment-in-kind securities.......................................... (143,190)
Amortization of net premium/discount on investments....................................... (12,016,011)
Net change to receivables/payables related to operations.................................. 49,496,676
--------------
Net Cash Flows Provided by Operating Activities........................................... 40,997,638
--------------
CASH FLOWS USED BY FINANCING ACTIVITIES:
Cash dividends paid....................................................................... (52,405,494)
Proceeds from reinvestment of dividends................................................... 11,408,369
--------------
Net Cash Flows Used by Financing Activities............................................... (40,997,125)
--------------
Net Increase in Cash......................................................................... 513
Cash, Beginning of period.................................................................... 203
--------------
Cash, End of period.......................................................................... $ 716
==============
</TABLE>

_______________________________________________________________________________
See Notes to Financial Statements.

Page 19
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I N C

Notes to Financial Statements (unaudited)

Note 1. Significant Accounting Policies

Salomon Brothers High Income Fund II Inc ("Fund") was incorporated in Maryland
and is registered as a diversified, closed-end, management investment company
under the Investment Company Act of 1940, as amended.

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual amounts could differ from those estimates.

(a) SECURITIES VALUATION. In valuing the Fund's assets, all securities for which
market quotations are readily available are valued (i) at the last sale price
prior to the time of determination if there were a sale on the date of
determination, (ii) at the mean between the last current bid and asked prices if
there were no sales on such date and bid and asked quotations are available, and
(iii) at the bid price if there were no sales price on such date and only bid
quotations are available. Publicly traded foreign government debt securities are
typically traded internationally in the over-the-counter market, and are valued
at the mean between the last current bid and asked price as at the close of
business of that market. However, when the spread between bid and asked price
exceeds five percent of the par value of the security, the security is valued at
the bid price. Securities may also be valued by independent pricing services
which use prices provided by market-makers or estimates of market values
obtained from yield data relating to instruments or securities with similar
characteristics. Short-term investments having a maturity of 60 days or less are
valued at amortized cost which approximates market value. Securities for which
reliable quotations are not readily available and all other securities and
assets are valued at fair value as determined in good faith by, or under
procedures established by, the Board of Directors.

(b) INVESTMENT TRANSACTIONS. Investment transactions are recorded on the trade
date. Interest income is accrued on a daily basis. Market discount or premium on
securities purchased is accreted or amortized, respectively, on an effective
yield basis over the life of the security. The Fund uses the specific
identification method for determining realized gain or loss on investments.
Dividend income is recorded on ex-dividend date.

(c) FEDERAL INCOME TAXES. The Fund has complied and intends to continue to
comply with the requirements of the Internal Revenue Code of 1986, as amended,
applicable to regulated investment companies, and to distribute all of its
income to its shareholders. Therefore, no federal income tax or excise tax
provision is required.

(d) DIVIDENDS AND DISTRIBUTIONS. The Fund declares and pays dividends to
shareholders monthly from net investment income. Net realized gains, if any, in
excess of loss carryovers are expected to be distributed annually. Dividends and
distributions to shareholders are recorded on the ex-dividend date. The amount
of dividends and distributions from net investment income

Page 20
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I N C

Notes to Financial Statements (unaudited) (continued)

and net realized gains are determined in accordance with federal income tax
regulations, which may differ from GAAP. To the extent these differences are
permanent in nature, such amounts are reclassified within the components of net
assets.

(e) DEFERRED ORGANIZATION COSTS. Organization costs amounting to $85,000 were
incurred in connection with the organization of the Fund. These costs have been
deferred and were being amortized ratably over a five-year period from
commencement of operations in May 1998. However, in accordance with the AICPA
Statement of Position No. 98-5, "Reporting on the Costs of Start-up Activities",
the Fund has expensed the unamortized amount of this asset on the first day of
the current fiscal year.

(f) REPURCHASE AGREEMENTS. When entering into repurchase agreements, it is the
Fund's policy to take possession, through its custodian, of the underlying
collateral and to monitor its value at the time the arrangement is entered into
and during the term of the repurchase agreement to ensure that it equals or
exceeds the repurchase price. In the event of default of the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. 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.

(g) YEAR END TAX RECLASSIFICATIONS. The character of income and gains to be
distributed are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. At April 30, 2000,
reclassifications were made to the capital accounts of the Fund to reflect
permanent book/tax differences and income and gains available for distributions
under income tax regulations. Net investment income, net realized loss and net
assets were not affected by this change.

Note 2. Management Fee and Other Transactions

Salomon Brothers Asset Management Inc, a wholly-owned subsidiary of Salomon
Smith Barney Holdings ("SSBH"), which, in turn, is a subsidiary of Citigroup
Inc., acts as investment manager ("Investment Manager") to the Fund. The
Investment Manager is responsible on a day-to-day basis for the management of
the Fund's portfolio in accordance with the Fund's investment objectives and
policies and for making decisions to buy, sell or hold particular securities of
the Fund. The management fee for these services is payable monthly at an annual
rate of 1.00% of the Fund's average weekly net assets plus the proceeds of any
outstanding borrowings used for leverage.

SSB Citi Fund Management LLC ("SSBC"), another subsidiary of SSBH, acts as the
Fund's administrator ("Administrator") for which the Fund pays a monthly fee at
an annual rate of 0.10% of the value of the Fund's average weekly net assets
plus the proceeds of any outstanding borrowings used for leverage. The
administrator performs certain administrative services necessary for the
operation of the Fund.

Page 21
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I N C

Notes to Financial Statements (unaudited) (continued)

During periods in which the Fund is utilizing financial leverage, the fees which
are payable to the Investment Manager and Administrator as a percentage of the
Fund's assets will be higher than if the Fund did not utilize leverage because
the fees are calculated as a percentage of the Fund's assets, including those
investments purchased with leverage.

At October 31, 2000, the Investment Manager and Salomon Smith Barney Inc., an
affiliate of the Investment Manager, owned 6,667 shares of the Fund.

Certain officers and/or directors of the Fund are also officers and/or directors
of the Investment Manager.

Note 3. Portfolio Activity

During the six months ended October 31, 2000, the aggregate cost of purchases
and proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:

Purchases.................................................. $ 592,280,706
==============
Sales...................................................... $ 522,142,836
==============

At October 31, 2000, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:

Gross unrealized appreciation.............................. $ 10,841,426
Gross unrealized depreciation.............................. (176,261,016)
--------------
Net unrealized depreciation................................ $ (165,419,590)
==============
Note 4. Options Contracts

The Fund may from time to time enter into options contracts. Premiums paid when
put or call options are purchased by the Fund, represent investments, which are
marked-to-market daily. When a purchased option expires, the Fund will realize a
loss in the amount of the premium paid. When the Fund enters into a closing
sales transaction, the Fund will realize a gain or loss depending on whether the
proceeds from the closing sales transaction are greater or less than the premium
paid for the option. When the Fund exercises a put option, it will realize a
gain or loss from the sale of the underlying security and the proceeds from such
sale will be decreased by the premium originally paid. When the Fund exercises a
call option, the cost of the security which the Fund purchases upon exercise
will be increased by the premium originally paid.

At October 31, 2000, the Fund held no purchased call or put option contracts.

When the Fund writes a call or put option, an amount equal to the premium
received by the Fund is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Fund realizes a gain
equal to the amount of the premium received. When the Fund enters into a closing
purchase transaction, the Fund realizes a gain or loss depending upon whether
the cost of the closing transaction is greater or less than the premium
originally received,

Page 22
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I N C

Notes to Financial Statements (unaudited) (continued)

without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is eliminated. When a written call option
is exercised the proceeds of the security sold will be increased by the premium
originally received. When a written put option is exercised, the amount of the
premium originally received will reduce the cost of the security which the Fund
purchased upon exercise. When written index options are exercised, settlement is
made in cash.

The Fund enters into options for hedging purposes. The risk associated with
purchasing options is limited to the premium originally paid. The risk in
writing a covered call option is that the Fund gives up the opportunity to
participate in any increase in the price of the underlying security beyond the
exercise price. The risk in writing a put option is that the Fund is exposed to
the risk of loss if the market price of the underlying security declines.

During the six months ended October 31, 2000, the Fund did not enter into any
written covered call or put option contracts.

Note 5. Loan Participations

The Fund invests in fixed and floating rate loans arranged through private
negotiations between a foreign sovereign entity and one or more financial
institutions. The Fund's investment in any such loan may be in the form of a
participation in or an assignment of the loan.

In connection with purchasing participations, the Fund generally will have no
right to enforce compliance by the borrower with the terms of the loan agreement
relating to the loan, nor any rights of set-off against the borrower, and the
Fund may not benefit directly from any collateral supporting the loan in which
it has purchased the participation. As a result, the Fund will assume the credit
risk of both the borrower and the lender that is selling the participation. In
the event of the insolvency of the lender selling the participation, the Fund
may be treated as a general creditor of the lender and may not benefit from any
set-off between the lender and the borrower.

At October 31, 2000, the Fund held loan participations with a total cost of
$15,140,928.

Note 6. Credit Risk

The yields of emerging markets debt obligations and high-yield corporate debt
obligations reflect, among other things, perceived credit risk. The Fund's
investment in securities rated below investment grade typically involve risks
not associated with higher rated securities including, among others, overall
greater risk of timely and ultimate payment of interest and principal, greater
market price volatility and less liquid secondary market trading. The
consequences of political, social, economic or diplomatic changes may have
disruptive effects on the market prices of investments held by the Fund.

Note 7. Dividends Subsequent to October 31, 2000

The Board of Directors of the Fund declared a common stock dividend from net
investment income of $0.13 per share for the months of November and December
2000, payable on November 24 and December 29, 2000 to shareholders of record on
November 14 and December 12, 2000, respectively.

Page 23
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I N C

Notes to Financial Statements (unaudited) (continued)

Note 8. Capital Loss Carryforward

At April 30, 2000, the Fund had, for Federal income tax purposes, a capital loss
carryforward of approximately $72,343,500, available to offset future capital
gains. To the extent that these carryforward losses are used to offset capital
gains, it is probable that any gains so offset will not be distributed.

The amount and expiration of the carryforwards are indicated below. Expiration
occurs on April 30 of the year indicated:

<TABLE>
<CAPTION>
2007 2008 Total
------------- ------------- --------------
<S> <C> <C> <C>
Carryforward Amounts . . . . . . . . . . . . $ 32,298,000 $ 40,142,000 $ 72,440,000
</TABLE>

Note 9. Bank Loan

At October 31, the Fund had outstanding a $155,000,000 loan pursuant to a
revolving credit and security agreement with CXC Inc., a commercial paper
conduit issuer for which Citicorp North America Inc. acts as administrative
agent.

Page 24
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I N C

Financial Highlights

Data for a share of capital stock outstanding throughout the year ended April
30, except where noted:

<TABLE>
<CAPTION>
2000(1) 2000 1999(2)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period............................ $ 11.85 $ 13.54 $ 15.00
---------- ---------- -------------
Income (Loss) From Operations:
Net investment income........................................ 0.69 1.45 1.23
Net realized and unrealized loss............................. (0.61) (1.70) (1.45)
---------- ---------- -------------
Total Income (Loss) From Operations............................. 0.08 (0.25) (0.22)
---------- ---------- -------------
Offering Costs on Issuance of Common Stock..................... -- -- (0.02)
---------- ---------- -------------
Less Distributions From:
Net investment income........................................ (0.78) (1.44) (1.22)
---------- ---------- -----------
Net Asset Value, End of Period.................................. $ 11.15 $ 11.85 $ 13.54
========== ========= ===========

Per Share Market Value, End of Period........................... $ 11.250 $ 11.750 $ 12.625
========== ========= ===========
Total Return, Based on Market Price Per Share(3)................ 2.35%++ 5.45% (7.57)%++
Ratios to Average Net Assets:

Total expenses, including interest expense................... 2.75%+ 2.09% 1.54%+

Total expenses, excluding interest expense (operating
expenses)................................................... 1.37%+ 1.29% 1.24%+
Net investment income........................................ 11.57%+ 11.48% 9.84%+
Bank Loans Outstanding, End of Period (000s).................... $ 155,000 $ 105,000 $ 105,000
Weighted Average Interest Rate on Bank Loans.................... 7.19% 6.18% 5.72%

Net Assets, End of Period (000s)................................ $ 757,375 $ 790,743 $ 903,792
Portfolio Turnover Rate......................................... 58% 68% 66%
----------------------------------------------------------------------------------------------------------------
</TABLE>

(1) For the six months ended October 31, 2000 (unaudited).
(2) For the period May 28, 1998 (commencement of operations) through April 30,
1999.
(3) For purposes of this calculation, dividends are assumed to be reinvested at
prices obtained under the Fund's dividend reinvestment plan and the broker
commission paid to purchase or sell a share is excluded.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.

Page 25
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Selected Quarterly Financial Information (unaudited)

Summary of quarterly results of operations:

<TABLE>
<CAPTION>
Net Realized &
Net Investment Unrealized
Income Gain (Loss)
---------------------- ------------------------
Quarters Ended(1) Total Per Share Total Per Share
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
July 31, 1998(2) .................................................. $ 11,896 $ 0.18 $ (9,730) $ (0.15)
October 31, 1998 .................................................. 22,489 0.34 (138,586) (2.10)
January 31, 1999 .................................................. 23,108 0.35 32,169 0.48
April 30, 1999 .................................................... 24,054 0.36 21,289 0.32
July 31, 1999 ..................................................... 22,833 0.34 (44,121) (0.66)
October 31, 1999 .................................................. 24,606 0.37 (28,350) (0.42)
January 31, 2000 .................................................. 25,079 0.38 (6,790) (0.10)
April 30, 2000 .................................................... 24,059 0.36 (34,416) (0.52)
July 31, 2000 .................................................... 21,722 0.32 12,537 0.18
October 31, 2000 .................................................. 24,677 0.37 (53,861) (0.79)
</TABLE>

_________________
(1) Totals expressed in thousands of dollars except per share amounts.
(2) For the period May 28, 1998 (commencement of operations) through July 31,
1998.

Page 26
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Dividend Reinvestment Plan (unaudited)

Pursuant to certain rules of the Securities and Exchange Commission the
following additional disclosure is provided.

Each shareholder purchasing shares of common stock ("Shares") of Salomon
Brothers High Income Fund II Inc ("Fund") will be deemed to have elected to be a
participant in the Dividend Reinvestment Plan ("Plan"), unless the shareholder
specifically elects in writing (addressed to the Agent at the address below or
to any nominee who holds Shares for the shareholder in its name) to receive all
income dividends and distributions of capital gains in cash, paid by check,
mailed directly to the record holder by or under the direction of PFPC Global
Fund Services, formerly known as First Data Investor Services Group, Inc. as the
Fund's dividend-paying agent ("Agent"). A shareholder whose Shares are held in
the name of a broker or nominee who does not provide an automatic reinvestment
service may be required to take such Shares out of "street name" and register
such Shares in the shareholder's name in order to participate, otherwise
dividends and distributions will be paid in cash to such shareholder by the
broker or nominee. Each participant in the Plan is referred to herein as a
"Participant." The Agent will act as Agent for each Participant, and will open
accounts for each Participant under the Plan in the same name as their Shares
are registered.

Unless the Fund declares a dividend or distribution payable only in the form of
cash, the Agent will apply all dividends and distributions in the manner set
forth below.

If, on the determination date (as defined below), the market price per Share
equals or exceeds the net asset value per Share on that date (such condition, a
"market premium"), the Agent will receive the dividend or distribution in newly
issued Shares of the Fund on behalf of Participants. If, on the determination
date, the net asset value per Share exceeds the market price per Share (such
condition, a "market discount"), the Agent will purchase Shares in the open
market. The determination date will be the fourth New York Stock Exchange
trading day (a New York Stock Exchange trading day being referred to herein as a
"Trading Day") preceding the payment date for the dividend or distribution. For
purposes herein, "market price" will mean the average of the highest and lowest
prices at which the Shares sell on the New York Stock Exchange on the particular
date, or if there is no sale on that date, the average of the closing bid and
asked quotations.

Purchases made by the Agent will be made as soon as practicable commencing on
the Trading Day following the determination date and terminating no later than
30 days after the dividend or distribution payment date except where temporary
curtailment or suspension of purchase is necessary to comply with applicable
provisions of federal securities law; provided, however, that such purchases
will, in any event, terminate on the Trading Day prior to the "ex-dividend" date
next succeeding the dividend or distribution payment date.

Page 27
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Dividend Reinvestment Plan (unaudited) (continued)

If (i) the Agent has not invested the full dividend amount in open market
purchases by the date specified at the bottom of the prior page as the date on
which such purchases must terminate or (ii) a market discount shifts to a market
premium during the purchase period, then the Agent will cease making open market
purchases and will receive the uninvested portion of the dividend amount in
newly issued Shares (x) in the case of (i) above, at the close of business on
the date the Agent is required to terminate making open market purchases as
specified at the bottom of the prior page or (y) in the case of (ii) above, at
the close of business on the date such shift occurs; but in no event prior to
the payment date for the dividend or distribution.

In the event that all or part of a dividend or distribution amount is to be paid
in newly issued Shares, such Shares will be issued to Participants in accordance
with the following formula: (i) if, on the valuation date, the net asset value
per share is less than or equal to the market price per Share, then the newly
issued Shares will be valued at net asset value per Share on the valuation date
provided, however, that if the net asset value is less than 95% of the market
price on the valuation date, then such Shares will be issued at 95% of the
market price and (ii) if, on the valuation date, the net asset value per share
is greater than the market price per Share, then the newly issued Shares will be
issued at the market price on the valuation date. The valuation date will be the
dividend or distribution payment date, except that with respect to Shares issued
pursuant to the paragraph above, the valuation date will be the date such Shares
are issued. If a date that would otherwise be a valuation date is not a Trading
Day, the valuation date will be the next preceding Trading Day.

The open market purchases provided for above may be made on any securities
exchange on which the Shares of the Fund are traded, in the over-the-counter
market or in negotiated transactions, and may be on such terms as to price,
delivery and otherwise as the Agent shall determine. Funds held by the Agent
uninvested will not bear interest, and it is understood that, in any event, the
Agent shall have no liability in connection with any inability to purchase
Shares within the time periods herein provided, or with the timing of any
purchases effected. The Agent shall have no responsibility as to the value of
the Shares acquired for the Participant's account. The Agent may commingle
amounts of all Participants to be used for open market purchases of Shares and
the price per Share allocable to each Participant in connection with such
purchases shall be the average price (including brokerage commissions) of all
Shares purchased by the Agent.

The Agent will maintain all Participant accounts in the Plan and will furnish
written confirmations of all transactions in each account, including information
needed by Participants for personal and tax records. The Agent will hold Shares
acquired pursuant to the Plan in noncertificated form in the Participant's name
or that of its nominee, and each Participant's

Page 28
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Dividend Reinvestment Plan (unaudited) (continued)

proxy will include those Shares purchased pursuant to the Plan. The Agent will
forward to Participants any proxy solicitation material and will vote any Shares
so held for Participants only in accordance with the proxy returned by
Participants to the Fund. Upon written request, the Agent will deliver to
Participants, without charge, a certificate or certificates for the full Shares.

The Agent will confirm to Participants each acquisition made for their
respective accounts as soon as practicable but not later than 60 days after the
date thereof. Although Participants may from time to time have an undivided
fractional interest (computed to three decimal places) in a Share of the Fund,
no certificates for fractional shares will be issued. Dividends and
distributions on fractional shares will be credited to each Participant's
account. In the event of termination of a Participant's account under the Plan,
the Agent will adjust for any such undivided fractional interest in cash at the
market value of the Fund's Shares at the time of termination less the pro rata
expense of any sale required to make such an adjustment.

Any share dividends or split shares distributed by the Fund on Shares held by
the Agent for Participants will be credited to their respective accounts. In the
event that the Fund makes available to Participants rights to purchase
additional Shares or other securities, the Shares held for Participants under
the Plan will be added to other Shares held by the Participants in calculating
the number of rights to be issued to Participants.

The Agent's service fee for handling capital gains distributions or income
dividends will be paid by the Fund. Participants will be charged a pro rata
share of brokerage commissions on all open market purchases.

Participants may terminate their accounts under the Plan by notifying the Agent
in writing or by calling 1-800-331-1710. Such termination will be effective
immediately if notice is received by the Agent not less than ten days prior to
any dividend or distribution record date; otherwise such termination will be
effective on the first Trading Day after the payment due for such dividend or
distribution with respect to any subsequent dividend or distribution. The Plan
may be amended or terminated by the Fund as applied to any dividend or capital
gains distribution paid subsequent to written notice of the change or
termination sent to Participants at least 30 days prior to the record date for
the dividend or capital gains distribution. The Plan may be amended or
terminated by the Agent, with the Fund's prior written consent, on at least 30
days' written notice to Plan Participants. Notwithstanding the preceding two
sentences, the Agent or the Fund may amend or supplement the Plan at any time or
times when necessary or appropriate to comply with applicable law or rules or
policies of the Securities and Exchange Commission or any other regulatory
authority. Upon any termination, the Agent will cause a certificate or
certificates for the full Shares held by each Participant under the Plan and
cash adjustment for any fraction to be delivered to each Participant without
charge. If the Participant elects by notice

Page 29
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Dividend Reinvestment Plan (unaudited) (continued)

to the Agent in writing in advance of such termination to have the Agent sell
part or all of a Participant's Shares and remit the proceeds to Participant, the
Agent is authorized to deduct a $2.50 fee plus brokerage commission for this
transaction from the proceeds.

Any amendment or supplement shall be deemed to be accepted by each Participant
unless, prior to the effective date thereof, the Agent receives written notice
of the termination of the Participant's account under the Plan. Any such
amendment may include an appointment by the Agent in its place and stead of a
successor Agent under these terms and conditions, with full power and authority
to perform all or any of the acts to be performed by the Agent under these terms
and conditions. Upon any such appointment of an Agent for the purpose of
receiving dividends and distributions, the Fund will be authorized to pay to
such successor Agent, for each Participant's account, all dividends and
distributions payable on Shares of the Fund held in each Participant's name or
under the Plan for retention or application by such successor Agent as provided
in these terms and conditions.

In the case of Participants, such as banks, broker-dealers or other nominees,
which hold Shares for others who are beneficial owners ("Nominee Holders"), the
Agent will administer the Plan on the basis of the number of Shares certified
from time to time by each Nominee Holder as representing the total amount
registered in the Nominee Holder's name and held for the account of beneficial
owners who are to participate in the Plan.

The Agent shall at all times act in good faith and use its best efforts within
reasonable limits to insure the accuracy of all services performed under this
Agreement and to comply with applicable law, but assumes no responsibility and
shall not be liable for loss or damage due to errors unless such error is caused
by its negligence, bad faith, or willful misconduct or that of its employees.

All correspondence concerning the Plan should be directed to the Agent at P.O.
Box 8030, Boston, Massachusetts 02266-8030.

Additional Shareholder Information (unaudited)

Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that from time to time the Fund may purchase,
at market prices, shares of its common stock in the open market.

Page 30
<PAGE>

S A L O M O N B R O T H E R S H I G H I N C O M E F U N D I I I N C

Directors

CHARLES F. BARBER
Consultant; formerly Chairman,
ASARCO Inc.

DANIEL P. CRONIN
Vice President -- General Counsel,
Pfizer International Inc

HEATH B. MCLENDON
Managing Director, Salomon Smith Barney Inc.;
President and Director, SSB Citi Fund
Management LLC and Travelers Investment
Advisors, Inc.

RIORDAN ROETT
Professor and Director,
Latin American Studies Program,
Paul H. Nitze School of Advanced
International Studies,
Johns Hopkins University

JESWALD W. SALACUSE
Henry J. Braker Professor of
Commercial Law, and formerly Dean,
The Fletcher School of Law & Diplomacy
Tufts University

Officers
HEATH B. MCLENDON
Chairman and President

LEWIS E. DAIDONE
Executive Vice President and Treasurer

MAUREEN O'CALLAGHAN
Executive Vice President

JAMES E. CRAIGE
Executive Vice President

THOMAS K. FLANAGAN
Executive Vice President

BETH A. SEMMEL
Executive Vice President

PETER J. WILBY
Executive Vice President

ANTHONY PACE
Controller

CHRISTINA T. SYDOR
Secretary

Salomon Brothers High Income Fund II Inc
7 World Trade Center
New York, New York 10048
Telephone 1-888-777-0102

INVESTMENT MANAGER
Salomon Brothers Asset Management Inc
7 World Trade Center
New York, New York 10048

CUSTODIAN
PFPC Trust Company
17th and Chestnut Streets
Philadelphia, Pennsylvania 19103

DIVIDEND DISBURSING AND TRANSFER AGENT
PFPC Global Fund Services
P.O. Box 8030
Boston, Massachusetts 02266-8030

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036

LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue New
York, New York 10017

NEW YORK STOCK EXCHANGE SYMBOL
HIX
<PAGE>

PFPC Global Fund Services
P.O. Box 8030
Boston, MA 02266-8030

Salomon Brothers
High Income Fund II Inc

Semi-Annual Report
October 31, 2000

Art To Come

Salomon Brothers Asset Management