<PAGE>
[LOGO OF SEMI-ANNUAL REPORT]
Smith Barney
Money Funds, Inc.
- --------------------------------
June 30, 1996
[LOGO OF SMITH BARNEY MUTUAL FUNDS INVESTING IN YOUR FUTURE EVERY DAY]
<PAGE>
Smith Barney Money Funds, Inc.
Dear Shareholder:
We are pleased to provide you with the semi-annual report for the Smith Barney
Money Funds, Inc. for the six months ended June 30, 1996. In this report, we
summarize the period's prevailing economic and market conditions and outline our
portfolio strategy. A more detailed summary of performance can be found in the
appropriate sections that follow in the semi-annual report.
Performance Summary
The chart below provides the yields for the Cash, Government and Retirement
Portfolios that make up the Smith Barney Money Funds for the seven-day period
ended June 30, 1996.
<TABLE>
<CAPTION>
Smith Barney Money Funds Yields (Class A Shares)
Portfolio Seven-Day Yield Effective Yield*
<S> <C> <C>
Cash 4.76% 4.88%
Government 4.68% 4.79%
Retirement 4.66% 4.77%
</TABLE>
*Assumes dividends are reinvested.
You should be aware that your investment in the Smith Barney Money Funds is
neither insured nor guaranteed by the U.S. government. Moreover, no assurance
can be given that the Smith Barney Money Funds will be able to maintain a stable
net asset value of $1.00 per share.
Asset Growth of Portfolios
Money market funds continue to grow in popularity. In recent years, assets in
the taxable money funds have grown consistently. In fact, as both the stock and
bond markets have become more volatile during the first half of 1996, asset
growth in the industry continues to be strong. Over the six-month period ended
June 30, 1996, total assets under management in the Smith Barney Money Funds
rose by 9%. As of June 30, 1996, the Smith Barney Money Funds had more than $30
billion in total assets under management.
Market Update and Outlook
The past year, and certainly the most recent six months, has been an interesting
period for the financial markets. The period from June 1995 through January of
this year was characterized by low inflation and somewhat weaker economic
growth, and in response to these conditions, the Federal Reserve Board (the Fed)
lowered the fed funds rate (i.e., the rate banks charge each other for
1
<PAGE>
overnight loans) in December and January from 5.75% to 5.25%. In addition to
lowering the fed funds rate, the Fed lowered the discount rate to 5% and cited
reduced potential inflationary pressures as the reason for its easing of
monetary policy.
However, since then, a number of events have reversed the direction of the money
markets and short-term interest rates. Hedge fund selling, an oversupply of new
issues from U.S. Treasury auctions, and concern over the strength of U.S.
economic growth have increased market uncertainty. For example, economic data
released between February and the end of May has indicated that the U.S. economy
is growing more rapidly than previously expected, as evidenced by strong job
creation and higher consumer spending. In addition, inventories, especially in
the automobile industry, have declined, and will probably need to be
replenished. New as well as existing home sales have also shown continued
momentum, with the Northeast region of the U.S. the newest area to exhibit
growth. As a result, expectations for second quarter GDP growth are currently
between an annual rate of 3.5% and 4%.
Despite the apparent strength in the U.S. economy, the Fed left short-term
interest rates unchanged at its most recent Open Market Committee Meeting.
However, it is now widely anticipated that the Fed will raise interest rates in
the near future, especially if jobless claims continue to stabilize or decline,
consumer spending remains strong, and payroll growth in the economy stays at a
monthly level of approximately 200,000 new jobs.
Increasing investor concerns about the possible re-emergence of inflation has
led to an increase in yields, especially from securities with longer-term
maturities. For example, at the beginning of the year, the 3-month U.S. Treasury
bill was yielding 5.06% and the One-Year U.S. Treasury bill was yielding 5.13%.
As of June 30, 1996, the 3-Month and One-Year U.S. Treasury bills were yielding
5.29% and 5.95%, respectively.
Investment Strategy
Since the beginning of the first quarter of the year, we have shortened the Cash
Portfolio's average maturity 83 days to 60 days given the risk of rising short-
term interest rates. In addition, the Government Portfolio's average maturity
was shortened from 64 days to 52 days and the Retirement Portfolio's average
maturity was reduced from 58 days to 51 days.
2
<PAGE>
In closing, thank you for investing in the Smith Barney Money Funds. We look
forward to continuing to help you achieve your financial goals.
Sincerely,
/s/ Heath B. McLendon /s/ Phyllis M. Zahorodny
Heath B. McLendon Phyllis M. Zahorodny
Chairman and Vice President and
Chief Executive Officer Investment Officer
July 12, 1996
3
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) June 30, 1996
<TABLE>
<CAPTION>
CASH PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. AGENCIES AND INSTRUMENTALITIES 8.5%
$ 639,000,000 Federal Farm Credit Bank
mature 7/1/96 to 3/3/97 4.85% to 5.65% $ 638,413,356
405,000,000 Federal Home Loan Bank
mature 10/16/96 to 5/22/97 4.91 to 5.66 404,701,005
1,117,670,000 Federal National Mortgage
Association
mature 8/14/96 to 2/10/97 4.90 to 5.59 1,114,458,581
- --------------------------------------------------------------------------------
TOTAL U.S. AGENCIES AND
INSTRUMENTALITIES
(Cost -- $2,157,572,942) 2,157,572,942
- --------------------------------------------------------------------------------
U.S. TREASURY BILL -- 0.2%
50,000,000 U.S. Treasury Bill matures 1/9/97
(Cost -- $48,718,667) 4.81 48,718,667
- --------------------------------------------------------------------------------
DOMESTIC BANK OBLIGATIONS -- 5.0%
110,000,000 BankAmerica Corp.
mature 1/17/97 to 1/29/97 4.95 to 5.21 110,046,191
70,500,000 Bank of America (Illinois)
mature 12/18/96 to 5/28/97 5.60 to 6.07 70,348,950
50,000,000 Bank of New York Delaware
matures 7/31/96 5.19 50,000,000
30,000,000 Bank of New York
matures 8/14/96 5.35 30,000,358
379,000,000 FCC National
mature 7/12/96 to 11/1/96 5.05 to 5.75 379,018,827
50,000,000 First Chicago Corp. National
matures 12/10/96 5.65 50,002,187
75,000,000 First Union Corp.
matures 8/19/96 5.37 75,000,000
50,000,000 First Union Corp. Bank of
Florida
mature 7/29/96 to 8/22/96 5.32 to 5.34 50,000,000
75,000,000 First Union National Bank of North
Carolina
mature 8/9/96 to 8/30/96 5.34 to 5.35 75,000,000
100,000,000 Morgan Guaranty
mature 1/15/97 to 2/13/97 5.00 to 5.26 99,964,881
165,000,000 National Bank of Detroit
mature 7/23/96 to 1/3/97 5.05 to 5.34 164,950,472
50,000,000 NationsBank Corp.
matures 8/12/96 5.35 50,000,000
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
CASH PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
DOMESTIC BANK OBLIGATIONS -- 5.0% (continued)
$ 50,000,000 Wachovia Bank matures 7/2/96 5.33% $ 49,999,983
- --------------------------------------------------------------------------------
TOTAL DOMESTIC BANK OBLIGATIONS
(Cost -- $1,254,331,849) 1,254,331,849
- --------------------------------------------------------------------------------
DOMESTIC CERTIFICATE OF DEPOSIT -- 1.0%
250,000,000 Chase Manhattan USA Delaware
mature 7/19/96 to 6/9/97
(Cost -- $250,000,000) 4.95 to 6.06 250,000,000
- --------------------------------------------------------------------------------
DOMESTIC EURO CERTIFICATES OF DEPOSIT -- 1.2%
200,000,000 Morgan Guaranty
mature 7/15/96 to 8/19/96 5.00 to 5.34 200,001,707
60,000,000 NationsBank Corp.
matures 8/6/96 5.00 59,998,597
40,000,000 Republic National Bank of NY
matures 1/16/97 5.21 40,016,482
- --------------------------------------------------------------------------------
TOTAL DOMESTIC EURO
CERTIFICATES OF DEPOSIT
(Cost -- $300,016,786) 300,016,786
- --------------------------------------------------------------------------------
COMMERCIAL PAPER -- 62.8%
175,000,000 Abbey National North America
mature 1/5/96 to 1/12/96 5.18 to 5.35 174,034,049
25,000,000 ABB Finance
matures 8/9/96 5.00 24,867,833
64,000,000 ABN AMRO Bank N.V.
mature 8/5/96 to 8/26/96 5.05 to 5.34 63,645,578
20,000,000 ABN AMRO Bank Canada
matures 8/22/96 5.00 19,859,022
57,000,000 A.I. Credit
mature 7/23/96 to 8/19/96 5.31 to 5.33 56,743,391
135,500,000 AIG Funding
mature 7/9/96 to 7/31/96 5.33 to 5.41 135,190,079
60,000,000 Alliance & Leicester Building
mature 7/24/96 to 12/5/96 5.20 to 5.64 59,185,858
156,600,000 American Home Products (Foods)
mature 7/11/96 to 7/26/96 5.38 to 5.44 156,223,550
190,000,000 American Home Products
mature 7/1/96 to 8/8/96 5.38 to 5.58 189,316,143
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
CASH PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 62.8% (continued)
$ 349,000,000 Asset Securitization Corp.
mature 7/10/96 to 7/25/96 5.35% to 5.42% $ 347,949,828
300,000,000 Associates Corp. of North
America
mature 7/8/96 to 7/16/96 5.34 to 5.39 299,465,375
50,000,000 AT & T Corp. matures 8/14/96 5.35 49,677,333
83,880,000 Banc One Corp.
mature 7/10/96 to 7/25/96 5.33 83,677,767
75,000,000 Banca Commerciale Italiana N.Y.
mature 7/16/96 to 8/22/96 5.35 74,563,459
100,000,000 Bank of America (BankAmerica
Corp.)
mature 7/1/96 to 8/28/96 5.32 to 5.37 99,788,139
400,000,000 Bank Brussels Lambert
mature 7/1/96 to 7/15/96 5.36 to 5.60 399,525,528
100,000,000 Bank of Montreal matures
7/11/96 5.35 99,852,222
20,000,000 Bank of New York matures
7/15/96 5.35 19,958,544
125,000,000 Bankers Trust N.Y. Corp.
mature 8/13/96 to 8/23/96 5.35 to 5.37 124,172,611
100,000,000 Barclays U.S. Funding Corp.
matures 7/15/96 5.33 99,794,667
75,000,000 Barton Capital Corp. 5.42 74,887,292
matures 7/11/96
65,000,000 BAT Capital Corp.
mature 7/9/96 to 7/18/96 5.35 to 5.36 64,856,386
175,000,000 Bayerische Vereinsbank
mature 7/8/96 to 12/30/96 5.33 to 5.65 174,134,826
100,000,000 BCI Funding Corp.
mature 7/22/96 to 12/16/96 5.34 to 5.66 98,562,375
175,000,000 Bear Stearns
mature 7/1/96 to 7/15/96 5.33 to 5.36 174,792,139
275,000,000 Cades mature 12/20/96 to
12/27/96 5.61 to 5.65 267,737,472
75,000,000 Canadian Wheat Board
mature 9/3/96 to 12/20/96 5.10 to 5.61 73,907,250
50,000,000 Cariplo matures 7/12/96 5.36 49,918,593
225,000,000 Caisse Des Depots Et Cos.
mature 7/10/96 to 8/27/96 5.34 to 5.60 224,307,687
50,000,000 Chase Manhattan USA Delaware
matures 1/15/97 5.65 48,493,000
239,500,000 Cheltenham & Gloucester
Building Society
mature 8/12/96 to 12/23/96 5.01 to 5.66 235,946,354
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
CASH PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 62.8% (continued)
$ 172,800,000 Ciesco L.P.
mature 7/1/96 to 8/2/96 5.34% to 5.55% $ 172,525,978
350,000,000 CIT Group Holdings, Inc.
mature 7/8/96 to 8/30/96 5.32 to 5.36 348,565,458
214,895,000 Commerzbank U.S. Finance
mature 7/2/96 to 8/13/96 5.34 to 5.37 214,583,328
140,600,000 Corporate Asset Funding, Co.
mature 7/10/96 to 8/8/96 5.33 to 5.36 140,140,225
209,700,000 Corporate Receivables Corp.
mature 7/12/96 to 8/23/96 5.06 to 5.36 208,688,805
190,000,000 Creditanstalt Finance, Inc.
mature 7/8/96 to 7/17/96 5.33 to 5.35 189,646,439
218,000,000 Credito Italiano Delaware,
Inc. mature 7/8/96 to
11/12/96 5.02 to 5.69 216,682,780
125,000,000 CXC, Inc.
mature 7/2/96 to 8/1/96 5.34 to 5.39 124,658,243
384,000,000 Daimler-Benz North American
Corp. mature 7/10/96 to
9/4/96 5.11 to 5.36 382,014,897
67,000,000 Dean Witter, Discover & Co.
mature 8/14/96 to 8/19/96 5.36 to 5.70 66,546,481
232,635,000 Delaware Funding Corp.
mature 7/8/96 to 8/16/96 5.34 to 5.36 232,143,938
150,000,000 Den Danske Corp.
mature 7/15/96 to 8/28/96 5.34 149,370,153
375,000,000 Dresdner US Finance, Inc.
mature 7/2/96 to 12/19/96 5.01 to 5.62 372,404,840
383,000,000 E.I. du Pont De Nemours
mature 7/16/96 to 12/20/96 5.33 to 5.71 380,379,115
40,000,000 Eli Lilly & Co.
mature 7/30/96 to 8/15/96 5.32 to 5.34 39,784,150
100,000,000 Enterprise Funding Corp.
mature 7/1/96 to 7/26/96 5.37 to 5.43 99,812,153
28,000,000 Exxon Imperial matures 7/15/96 5.35 27,942,071
50,000,000 Falcon Asset Security Corp.
matures 7/11/96 5.32 49,926,667
50,000,000 Fleet Financial Group
matures 8/5/96 5.39 49,741,875
50,000,000 Ford Credit Europe PLC
matures 7/8/96 5.36 49,948,181
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
CASH PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 62.8% (continued)
$ 350,000,000 Ford Motor Credit
mature 7/2/96 to 8/29/96 5.34% to 5.40% $ 349,197,528
425,000,000 General Electric Capital Corp.
mature 7/3/96 to 8/29/96 5.12 to 5.38 423,558,917
345,000,000 General Motors Acceptance Corp.
mature 7/11/96 to 12/9/96 5.37 to 5.72 341,076,149
90,000,000 Generale Bank Inc.
mature 7/12/96 to 12/17/96 4.99 to 5.62 88,788,671
268,000,000 Glaxo Holdings PLC
mature 7/8/96 to 8/19/96 5.34 to 5.35 266,781,628
400,000,000 Goldman Sachs Group L.P.
mature 7/1/96 to 7/26/96 5.35 to 5.65 399,471,236
198,815,000 GTE Corp.
mature 7/11/96 to 7/25/96 5.43 to 5.44 198,266,671
175,000,000 Halifax Building Society
mature 7/5/96 to 8/8/96 5.00 to 5.08 174,584,514
150,000,000 Household Finance Corp.
mature 7/23/96 to 8/30/96 5.33 to 5.35 149,010,833
29,000,000 International Nederlanden US
matures 8/21/96 5.34 28,783,491
96,235,000 International Securitization
mature 7/24/96 to 8/12/96 5.37 to 5.42 95,786,932
187,040,000 J.C. Penny Co.
mature 7/16/96 to 7/22/96 5.33 to 5.36 186,531,941
100,000,000 J.P. Morgan & Co.
mature 9/3/96 to 12/16/96 5.00 to 5.61 98,281,556
120,000,000 McKenna Triangle
mature 7/18/96 to 9/5/96 5.34 to 5.36 119,284,428
150,000,000 Merrill Lynch & Co., Inc.
mature 7/8/96 to 8/12/96 5.02 to 5.37 149,325,896
360,000,000 Morgan Stanley Group, Inc.
mature 7/10/96 to 12/11/96 5.20 to 5.66 357,887,281
75,000,000 National Bank of Canada
Finance mature 7/2/96 to
7/22/96 5.06 to 5.38 74,920,389
24,500,000 National & Provincial Building
Society matures 7/16/96 5.33 24,447,019
117,000,000 NationsBank Corp.
mature 7/19/96 to 12/17/96 5.33 to 5.64 115,723,027
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
CASH PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 62.8% (continued)
$ 25,000,000 National Westminster Canada
matures 7/30/96 5.35% $ 24,893,667
135,000,000 Nestle Capital Corp.
matures 7/1/96 5.57 135,000,000
300,000,000 New Center Asset Trust
mature 7/3/96 to 7/30/96 5.35 to 5.68 299,574,667
312,000,000 NYNEX mature 7/1/96 to
7/19/96 5.36 to 5.44 311,671,255
254,650,000 Oesterreichische Kontrollbank
AG mature 7/8/96 to 8/26/96 5.11 to 5.35 253,865,513
218,000,000 Ontario Hydro
mature 8/21/96 to 8/28/96 5.34 216,251,934
50,000,000 Panasonic Finance Inc.
mature 7/23/96 to 7/31/96 5.34 to 5.36 49,808,778
139,000,000 Pepsico, Inc.
mature 7/18/96 to 7/26/96 5.33 138,550,678
98,500,000 Pfizer Inc.
mature 7/29/96 to 7/30/96 5.35 98,086,041
113,000,000 PHH Corp.
mature 7/26/96 to 7/29/96 5.40 to 5.41 112,554,058
373,588,000 Philip Morris Co., Inc.
mature 7/15/96 to 8/15/96 5.32 to 5.36 372,132,074
94,125,000 Preferred Receivable Funding
mature 7/25/96 to 8/22/96 5.38 to 5.41 93,585,431
18,600,000 Province of British Columbia
matures 8/23/96 5.10 18,463,631
50,000,000 Province of Ontario
matures 8/26/96 5.34 49,590,111
238,751,000 Raytheon mature 7/8/96 to
7/19/96 5.34 to 5.39 238,424,426
160,922,000 Receivable Capital Corp.
mature 7/2/96 to 7/25/96 5.36 to 5.44 160,672,374
104,080,000 Royal Bank of Canada
mature 7/1/96 to 8/2/96 5.04 to 5.19 103,909,167
69,395,000 Sheffield Receivable Corp.
mature 7/1/96 to 7/3/96 5.34 to 5.55 69,388,712
100,000,000 Shell Oil Co. matures 7/12/96 5.34 99,837,139
35,000,000 Siemens Corp. matures 7/8/96 5.33 34,963,931
80,000,000 Societe Generale N.A.
mature 7/15/96 to 8/28/96 5.19 to 5.35 79,654,381
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
CASH PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 62.8% (continued)
$ 100,000,000 Swiss Bank Corp.
matures 12/27/96 5.60% $ 97,292,605
49,500,000 Toronto Dominion Holdings
USA Inc.
matures 8/26/96 5.00 49,124,990
123,000,000 Transamerica Corp.
mature 7/8/96 to 7/16/96 5.34 to 5.36 122,780,731
301,576,000 Transamerica Financial Corp.
mature 7/2/96 to 8/6/96 4.97 to 5.36 300,649,346
300,000,000 Union Bank of Switzerland
mature 7/9/96 5.33 299,645,313
211,300,000 Walt Disney Co.
mature 7/11/96 to 1/29/97 5.33 to 5.67 206,717,534
20,000,000 Waste Management Inc.
matures 7/18/96 5.35 19,950,869
200,000,000 Westdeutsche Landesbank
matures 7/11/96 5.35 199,703,333
20,000,000 Whirlpool Corp.
matures 8/27/96 5.37 19,832,167
115,000,000 Whirlpool Financial Corp.
mature 7/15/96 to 7/18/96 5.39 to 5.40 114,737,682
128,108,000 Windmill Funding Corp.
matures 7/10/96 5.41 127,935,054
75,000,000 Woolwich Building Society
mature 7/8/96 to 8/9/96 5.35 to 5.38 74,686,708
100,000,000 Z-Landesbank Bank Austria AG
matures 7/11/96 5.34 99,852,221
- --------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $15,916,034,755) 15,916,034,755
- --------------------------------------------------------------------------------
TIME DEPOSITS -- 1.2%
100,000,000 Postipankki matures 7/1/96 5.64 100,000,000
204,972,000 Z-Landesbank Bank Austria AG
matures 12/11/96 5.63 204,972,000
- --------------------------------------------------------------------------------
TOTAL TIME DEPOSITS
(Cost -- $304,972,000) 304,972,000
- --------------------------------------------------------------------------------
FOREIGN CERTIFICATES OF DEPOSIT -- 17.6%
275,000,000 Abbey National PLC
mature 7/8/96 to 5/21/97 5.04 to 5.78 275,006,648
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
CASH PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
FOREIGN CERTIFICATES OF DEPOSIT--17.6% (continued)
$ 50,000,000 ABN AMRO Bank N.V.
mature 7/22/96 to 8/23/96 4.97% to 5.26% $ 50,003,183
100,000,000 ABN AMRO Bank Chicago
matures 8/23/96 5.04 100,002,871
200,000,000 Bank of Montreal
mature 7/12/96 to 7/31/96 5.34 to 5.37 200,000,000
150,000,000 Bank of Nova Scotia
mature 9/3/96 to 6/10/97 5.17 to 6.05 149,864,951
325,000,000 Banque National De Paris
mature 7/1/96 to 12/23/96 5.03 to 5.77 324,997,433
196,000,000 Barclays Bank
mature 7/17/96 to 8/23/96 5.34 196,001,018
265,000,000 Bayerische Landesbank
mature 7/23/96 to 1/13/97 4.98 to 5.66 264,974,378
268,000,000 Bayerische Vereinsbank
mature 7/5/96 to 8/9/96 5.06 to 5.34 268,002,393
250,000,000 Canadian Imperial Bank of
Commerce
mature 7/11/96 to 7/17/96 5.34 250,000,000
50,000,000 CIC (Credit Industriel et
Commercial)
mature 7/9/96 to 8/22/96 5.37 to 5.39 50,000,452
200,000,000 Commerzbank AG
mature 7/9/96 to 9/3/96 5.04 to 5.40 200,004,604
105,000,000 Creditanstalt Bankverein
mature 7/15/96 to 8/5/96 5.07 to 5.34 105,001,044
130,000,000 Credit Agricola
mature 8/20/96 to 12/11/96 5.05 to 5.65 130,000,658
50,000,000 Credit Suisse matures 8/5/96 4.97 50,001,129
50,000,000 Den Danske Bank
matures 7/5/96 5.37 49,999,998
320,000,000 Deutsche Bank
mature 7/29/96 to 6/11/97 5.03 to 6.06 319,957,248
392,000,000 Hessiche Landesbank
mature 8/6/96 to 6/13/97 5.00 to 6.07 391,995,189
70,000,000 International Nederlander Bank
N.V. mature 8/20/96 5.34 70,000,959
91,000,000 National Westminster PLC
mature 7/26/96 to 8/2/96 5.06 to 5.33 91,002,208
140,000,000 Rabobank Nederland N.V.
mature 8/26/96 to 6/4/97 5.00 to 6.05 139,962,647
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
CASH PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
FOREIGN CERTIFICATES OF DEPOSIT -- 17.6% (continued)
$ 175,000,000 Royal Bank of Canada
mature 8/1/96 to 12/31/96 4.97% to 5.62% $ 175,023,134
175,000,000 Societe Generale
mature 7/2/96 to 12/20/96 5.11 to 6.10 174,984,111
95,000,000 Swiss Bank Corp.
mature 8/7/96 to 6/3/97 4.97 to 6.06 94,982,001
143,000,000 Toronto Dominion
mature 7/5/96 to 12/11/96 5.33 to 5.63 143,001,328
50,000,000 Union Bank of Switzerland
matures 7/8/96 5.02 50,000,246
130,000,000 Westdeutsche Landesbank
matures 6/11/97 5.37 to 6.06 130,002,709
25,000,000 Z-Landesbank matures 12/11/96 6.06 25,001,100
- --------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES OF DEPOSIT
(Cost -- $4,469,773,640) 4,469,773,640
- --------------------------------------------------------------------------------
OTHER SHORT-TERM NOTES -- 2.0%
70,000,000 General Electric Capital Corp.
mature 9/13/96 to 1/17/97 5.29 to 5.76 69,989,071
310,000,000 Merrill Lynch & Co.
mature 9/19/96 to 5/29/97 5.18 to 5.80 310,000,000
123,000,000 PHH Corp.
mature 2/10/97 to 6/10/97 6.03 132,970,275
- --------------------------------------------------------------------------------
TOTAL OTHER SHORT-TERM NOTES
(Cost -- $512,959,346) 512,959,346
- --------------------------------------------------------------------------------
OTHER-CERTIFICATE PROGRAM -- 0.5%
125,000,000 Dakota Certificates Program
mature 7/10/96 to 7/25/96
(Cost -- $124,680,375) 5.35 to 5.42 124,680,375
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $25,339,060,360*) $25,339,060,360
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
GOVERNMENT PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. AGENCIES AND INSTRUMENTALITIES -- 93.5%
$ 209,205,000 Federal Farm Credit Bank
mature 7/2/96 to 3/3/97 4.91% to 5.45% $ 207,950,192
794,335,000 Federal Home Loan Bank
mature 7/1/96 to 2/10/97 4.90 to 5.52 790,742,276
1,349,486,000 Federal Home Loan Mortgage
Corp.
mature 7/1/96 to 12/23/96 4.85 to 5.40 1,342,356,233
1,824,615,000 Federal National Mortgage
Association
mature 7/1/96 to 2/10/97 4.78 to 5.43 1,810,495,364
2,800,000 Student Loan Mortgage
Association
matures 7/1/96 5.52 2,800,000
45,000,000 Tennessee Valley Authority
mature 7/11/96 to 7/25/96 5.15 to 5.26 44,887,389
- --------------------------------------------------------------------------------
TOTAL U.S. AGENCIES AND
INSTRUMENTALITIES
(Cost -- $4,199,231,454) 4,199,231,454
- --------------------------------------------------------------------------------
U.S. TREASURY BILL -- 0.5%
25,000,000 U.S. Treasury Bill
matures 8/15/96
(Cost -- $24,853,438) 4.80 24,853,438
- --------------------------------------------------------------------------------
U.S. TREASURY NOTE -- 0.6%
25,000,000 U.S. Treasury Note
matures 6/30/97
(Cost -- $24,913,210) 6.00 24,913,210
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 5.4%
43,383,000 Morgan Stanley, 5.35% due 7/1/96;
Proceeds at maturity -- $43,402,342;
(Fully collateralized by U.S. Treasury Notes,
5.375% to 7.875% due 4/15/98 to 8/15/23;
Market value -- $43,596,546) 43,383,000
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
GOVERNMENT PORTFOLIO
FACE
AMOUNT SECURITY VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 5.4% (continued)
$ 200,000,000 Morgan Guaranty, 5.45% due 7/1/96;
Proceeds at maturity -- $200,090,833;
(Fully collateralized by U.S. Treasury Notes,
5.125% to 7.375% due 10/31/97 to 2/29/00;
Market value -- $204,002,022) $ 200,000,000
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost -- $243,383,000) 243,383,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS 100%
(Cost -- $4,492,381,102*) $4,492,381,102
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
RETIREMENT PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. AGENCIES AND INSTRUMENTALITIES -- 8.3%
$ 7,000,000 Federal Farm Credit Bank
matures 2/3/97 4.91% $ 6,802,530
10,000,000 Federal Home Loan Bank
matures 7/15/96 4.90 9,981,333
90,000,000 Federal National Mortgage
Association mature 8/8/96
to 2/10/97 4.90 to 5.60 89,357,200
- --------------------------------------------------------------------------------
TOTAL U.S. AGENCIES AND
INSTRUMENTALITIES
(Cost -- $106,141,063) 106,141,063
- --------------------------------------------------------------------------------
DOMESTIC BANK OBLIGATIONS -- 3.8%
20,000,000 Bank of America
mature 9/18/96 to 1/29/97 5.13 to 5.45 19,996,560
25,000,000 First Union National Bank of
North Carolina matures
8/20/96 5.37 25,000,000
4,000,000 Pittsburgh National Bank
matures 9/18/96 5.70 3,999,570
- --------------------------------------------------------------------------------
TOTAL DOMESTIC BANK OBLIGATIONS
(Cost -- $48,996,130) 48,996,130
- --------------------------------------------------------------------------------
COMMERCIAL PAPER -- 68.0%
19,750,000 A.I. Credit
matures 7/30/96 5.32 19,666,156
5,000,000 AT & T Corp.
matures 7/1/96 5.77 5,000,000
10,000,000 Asset Securitization Corp.
matures 9/19/96 5.48 9,880,000
31,000,000 Banca Commerciale Italiana
mature 7/8/96 to 7/12/96 5.36 30,959,113
13,000,000 Bank of New York
matures 7/15/96 5.33 12,973,307
15,000,000 Barclays U.S. Funding Corp.
matures 7/22/96 5.33 14,953,800
30,000,000 Bear Stearns
mature 7/2/96 to 7/19/96 5.33 to 5.36 29,945,228
20,000,000 Cades
matures 12/20/96 5.61 19,479,222
22,000,000 Canadian Imperial Bank
mature 7/2/96 to 8/28/96 5.34 to 5.35 21,896,456
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
RETIREMENT PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 68.0% (continued)
$ 10,000,000 Canadian Wheat Board
matures 12/20/96 5.63% $ 9,738,178
35,000,000 Chase Manhattan Bank Corp.
mature 8/15/96 to 12/9/96 5.35 to 5.66 34,589,028
27,000,000 Cheltenham & Gloucester
Building Society mature
7/2/96 to 12/11/96 5.35 to 5.66 26,624,698
20,000,000 Ciesco L.P.
matures 8/22/96 5.40 19,845,444
30,000,000 CIT Group Holdings Inc.
mature 7/30/96 to 8/13/96 5.34 to 5.43 29,850,672
25,000,000 Citicorp
matures 7/1/96 5.55 25,000,000
26,040,000 Commerzbank U.S. Finance
mature 7/9/96 to 8/23/96 5.05 to 5.33 25,955,385
30,825,000 Credito Italiano
mature 7/22/96 to 8/27/96 5.11 to 5.42 30,677,857
20,000,000 Daimler-Benz North America Co.
matures 9/25/96 5.46 19,742,956
20,000,000 Dean Witter, Discover & Co.
matures 7/25/96 5.36 19,928,933
20,775,000 Den Danske Corp.
matures 8/20/96 5.42 20,620,053
10,000,000 Dresdner US Finance Inc.
matures 8/26/96 5.17 9,921,911
35,000,000 Ford Motor Credit Corp.
matures 7/24/96 to 8/26/96 5.34 to 5.44 34,831,663
38,000,000 General Electric Capital Corp.
mature 7/15/96 to 9/25/96 5.12 to 5.44 37,756,152
22,000,000 Goldman Sachs Group, L.P.
matures 8/5/96 5.38 21,885,997
15,750,000 International Nederlanden Group
matures 9/19/96 5.49 15,560,300
10,000,000 J.P. Morgan & Co.
matures 12/16/96 5.61 9,745,200
17,000,000 McKenna Triangle
matures 8/20/96 5.36 16,875,333
20,750,000 Merrill Lynch & Co., Inc.
matures 7/15/96 5.38 20,706,828
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
RETIREMENT PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 68.0% (continued)
$ 20,000,000 Morgan Stanley
matures 7/24/96 5.38% $ 19,931,511
20,000,000 New Center Asset Trust
matures 7/1/96 5.68 20,000,000
5,000,000 Oesterreichische Kontrollbank AG
matures 8/26/96 5.00 4,962,044
15,000,000 Ontario Hydro
matures 8/29/96 5.40 14,868,971
20,000,000 PHH Corporation
matures 7/31/96 5.39 19,910,667
19,500,000 Philip Morris Co. Inc.
mature 7/16/96 to 7/26/96 5.35 to 5.39 19,441,729
15,000,000 Preferred Receivable Funding
matures 8/26/96 5.45 14,874,000
2,478,000 Province of British Columbia
matures 8/6/96 5.05 2,465,808
25,000,000 Province of Ontario
matures 7/22/96 5.32 24,923,146
15,000,000 Receivables Capital Corp.
matures 7/22/96 5.38 14,953,188
10,000,000 San Paolo US Finance Inc.
matures 8/19/96 5.02 9,933,306
10,000,000 Sheffield Receivable Corp.
matures 7/3/96 5.34 9,997,056
20,000,000 Siemens Corp.
matures 8/21/96 5.40 19,848,133
21,000,000 Transamerica Finance Corp.
mature 9/16/96 to 9/23/96 5.46 to 5.47 20,746,114
10,000,000 Unilever Capital Corp.
matures 10/25/96 5.03 9,843,722
20,000,000 Union Bank of Switzerland
matures 7/1/96 5.55 20,000,000
10,000,000 USAA Capital Corp.
matures 7/19/96 5.37 9,973,250
6,000,000 Waste Management Inc.
matures 8/29/96 5.05 5,951,620
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
RETIREMENT PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 68.0% (continued)
$ 12,000,000 Woolwich Building Society
matures 7/8/96 5.35% $ 11,987,680
- --------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $869,221,815) 869,221,815
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT -- 17.3%
10,000,000 ABN AMRO Bank N.V.
matures 8/7/96 5.04 9,999,586
20,000,000 Bayerische Vereinsbank
mature 7/5/96 to 8/5/96 5.07 to 5.34 20,000,293
20,000,000 Cariplo
matures 8/28/96 5.41 19,998,152
10,000,000 Credit Agricole
matures 8/20/96 5.00 9,999,449
20,000,000 Lloyds Bank
mature 7/5/96 to 7/16/96 5.09 to 5.25 20,000,407
20,000,000 Morgan Guaranty
mature 7/15/96 to 8/20/96 5.00 to 5.07 20,001,143
10,000,000 National Bank of Detroit
matures 8/19/96 5.35 9,928,201
33,000,000 National Westminster Bank PLC
mature 7/26/96 to 9/16/96 5.35 to 5.41 32,851,890
7,000,000 Rabobank Nederland N.V.
matures 6/5/97 6.10 6,994,028
15,000,000 Royal Bank of Canada
matures 8/1/96 5.01 15,000,172
20,000,000 Societe Generale
matures 7/8/96 5.36 20,000,000
14,000,000 Swiss Bank Corp.
matures 8/7/96 5.00 14,000,131
13,000,000 Toronto Dominion
matures 7/31/96 5.34 12,999,992
10,000,000 Westdeutsche Landesbank
matures 7/8/96 5.37 10,000,000
- --------------------------------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost -- $221,773,444) 221,773,444
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
Smith Barney Money Funds, Inc.
Schedules of Investments (unaudited) (continued) June 30, 1996
<TABLE>
<CAPTION>
RETIREMENT PORTFOLIO
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
TIME DEPOSIT -- 2.0%
$ 25,000,000 Z-Landerbank Bank Austria AG
matures 7/1/96
(Cost -- $25,000,000) 5.63% $ 25,000,000
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.6%
7,554,000 Morgan Stanley Group, Inc., 5.35% due 7/1/96;
Proceeds at maturity -- $7,557,368; (Fully
collateralized by U.S. Treasury Notes,
6.500% to 10.750% due 2/15/03 to 5/15/05;
Market value -- $7,563,821) (Cost -- $7,554,000) 7,554,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $1,278,686,452*) $1,278,686,452
- --------------------------------------------------------------------------------
</TABLE>
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
19
<PAGE>
Smith Barney Money Funds, Inc.
Statements of Assets and Liabilities (unaudited) June 30, 1996
<TABLE>
<CAPTION>
Cash Government Retirement
Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments,
at amortized cost $25,339,060,360 $4,492,381,102 $1,278,686,452
Cash -- 609 716
Interest receivable 114,906,260 4,272,726 4,091,059
Other assets 1,594,148 2,262 193,393
- -------------------------------------------------------------------------------
Total Assets 25,455,560,768 4,496,656,699 1,282,971,620
- -------------------------------------------------------------------------------
LIABILITIES:
Management fees payable 8,372,360 1,510,566 459,695
Distribution fees payable 1,211,987 202,029 61,246
Dividends payable 46,031,342 7,697,539 2,281,265
Payable for securities
purchased 146,878,997 192,013,753 --
Accrued expenses 930,815 259,706 145,166
- -------------------------------------------------------------------------------
Total Liabilities 203,425,501 201,683,593 2,947,372
- -------------------------------------------------------------------------------
Total Net Assets $25,252,135,267 $4,294,973,106 $1,280,024,248
- -------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital Stock
(40,000,000,000,
10,000,000,000 and
5,000,000,000 shares
authorized, respectively;
par value $0.01 per share) $ 252,530,809 $ 42,949,565 $ 12,800,242
Capital paid in excess
of par value 25,000,797,982 4,252,023,541 1,267,224,006
Accumulated net realized
loss from security
transactions (1,193,524) -- --
- -------------------------------------------------------------------------------
Total Net Assets $25,252,135,267 $4,294,973,106 $1,280,024,248
- -------------------------------------------------------------------------------
Shares Outstanding 25,253,080,944 4,294,956,461 1,280,024,248
- -------------------------------------------------------------------------------
Net Asset Value $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
Smith Barney Money Funds, Inc.
Statements of Operations (unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended June 30, 1996
Cash Government Retirement
Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $682,489,180 $116,113,846 $34,008,937
- -----------------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 50,346,904 9,281,416 2,751,212
Distribution fees (Note 3) 12,441,639 2,145,360 625,645
Shareholder and system
servicing fees 10,185,945 1,193,056 707,017
Registration fees 1,266,372 130,050 99,359
Shareholder communications 1,755,557 185,561 170,250
Custody 604,071 83,440 49,707
Directors' fees 90,862 12,488 12,536
Audit and legal 90,365 33,293 9,455
Other 156,908 55,784 22,520
- -----------------------------------------------------------------------------
Total Expenses 76,938,623 13,120,448 4,447,701
- -----------------------------------------------------------------------------
Net Investment Income 605,550,557 102,993,398 29,561,236
- -----------------------------------------------------------------------------
Net Realized Gain From
Security Transactions 260,944 -- --
- -----------------------------------------------------------------------------
Increase in Net Assets
From Operations $605,811,501 $102,993,398 $29,561,236
- -----------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
Smith Barney Money Funds, Inc.
Statements of Changes in Net Assets
For the Six Months Ended June 30, 1996 (unaudited)
and the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Cash Portfolio 1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 605,550,557 $ 1,110,789,278
Net realized gain 260,944 406,767
- ------------------------------------------------------------------------------
Increase in Net Assets From Operations 605,811,501 1,111,196,045
- ------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2) (605,550,557) (1,109,614,260)
- ------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 56,898,573,261 95,078,500,639
Net asset value of shares issued
for reinvestment of dividends 611,555,979 1,061,864,432
Cost of shares reacquired (55,258,892,864) (90,733,030,654)
- ------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 2,251,236,376 5,407,334,417
- ------------------------------------------------------------------------------
Increase in Net Assets 2,251,497,320 5,408,916,202
NET ASSETS:
Beginning of period 23,000,637,947 17,591,721,745
- ------------------------------------------------------------------------------
End of period $ 25,252,135,267 $ 23,000,637,947
- ------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
Smith Barney Money Funds, Inc.
Statements of Changes in Net Assets (continued)
For the Six Months Ended June 30, 1996 (unaudited)
and the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Government Portfolio 1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 102,993,398 $ 212,199,200
Net realized gain --- 404,836
- -----------------------------------------------------------------------------
Increase in Net Assets From Operations 102,993,398 212,604,036
- -----------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2) (102,993,398) (211,997,883)
- -----------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 8,473,846,925 16,176,144,568
Net asset value of shares issued
for reinvestment of dividends 105,084,890 205,431,104
Cost of shares reacquired (8,359,439,226) (16,036,689,142)
- -----------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 219,492,589 344,886,530
- -----------------------------------------------------------------------------
Increase in Net Assets 219,492,589 345,492,683
NET ASSETS:
Beginning of period 4,075,480,517 3,729,987,834
- -----------------------------------------------------------------------------
End of period $ 4,294,973,106 $ 4,075,480,517
- -----------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
Smith Barney Money Funds, Inc.
Statements of Changes in Net Assets (continued)
For the Six Months Ended June 30, 1996 (unaudited)
and the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Retirement Portfolio 1996 1995
- ---------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 29,561,236 $ 60,061,754
- ---------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2) (29,561,236) (60,061,754)
- ---------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 2,371,258,764 4,330,327,073
Net asset value of shares issued
for reinvestment of dividends 30,418,053 58,412,308
Cost of shares reacquired (2,401,305,097) (4,170,429,234)
- ---------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 371,720 218,310,147
- ---------------------------------------------------------------------------
Increase in Net Assets 371,720 218,310,147
NET ASSETS:
Beginning of period 1,279,652,528 1,061,342,381
- ---------------------------------------------------------------------------
End of period $ 1,280,024,248 $ 1,279,652,528
- ---------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
Smith Barney Money Funds, Inc.
Notes to Financial Statements (unaudited)
1. Significant Accounting Policies
Smith Barney Money Funds, Inc. ("Fund"), a Maryland corporation, is registered
under the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund consists of three separate investment
portfolios ("Portfolios"): the Cash Portfolio, the Government Portfolio and the
Retirement Portfolio.
The significant accounting policies consistently followed by the Fund are: (a)
transactions in money market instruments and government obligations are recorded
on trade date; (b) the Fund uses the amortized cost method for valuing
investments; accordingly, the cost of securities plus accreted discount, or
minus amortized premium, approximates market value; (c) interest income is
recorded on the accrual basis; (d) direct expenses are charged to each portfolio
and each class; management fees and general fund expenses are allocated on the
basis of relative net assets; (e) gains or losses on the sale of securities are
calculated using the specific identification method; (f) the Portfolios intend
to comply with the applicable provisions of the Internal Revenue Code of 1986,
as amended, pertaining to regulated investment companies and to make
distributions of taxable income sufficient to be relieved from substantially all
Federal income and excise taxes; and (g) estimates and assumptions are required
to be made regarding assets, liabilities and changes in net assets resulting
from operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
2. Dividends
Each Portfolio declares and records a dividend of substantially all of its net
investment income on each business day. Such dividends are paid or reinvested
monthly in each respective Portfolio's shares on the payable date.
3. Management Agreement and Other Transactions
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings, Inc. ("SBH"), acts as investment manager to the Fund. As
compensation for its services, each Portfolio pays SBMFM a daily fee calculated
at the following rates: Cash: 0.45% on the first $6.0 billion of average daily
net assets, 0.425% on the next $6.0 billion, 0.40% on the next $6.0 billion and
0.35% on the average daily net assets in excess of $18.0 billion; Government:
0.45% on the first $2.5
25
<PAGE>
Smith Barney Money Funds, Inc.
Notes to Financial Statements (unaudited) (continued)
billion of the average daily net assets, 0.40% on the next $2.5 billion and
0.35% on average daily net assets in excess of $5.0 billion; and Retirement:
0.45% on the first $1.0 billion of average daily net assets, 0.40% on the next
$1.0 billion and 0.35% on average daily net assets in excess of $2.0 billion.
These fees are calculated daily and paid monthly.
Pursuant to a Distribution Plan, each Portfolio makes payments to Smith Barney
Inc. ("SB"), another subsidiary of SBH, for assistance in distributing Class A
and C shares, calculated at the annual rate of 0.10% of average daily net assets
of each class, respectively. For the six months ended June 30, 1996, total
Distribution Plan fees incurred were:
<TABLE>
<CAPTION>
Portfolio Class A Class C
- --------------------------------------------------------------------------------
<S> <C> <C>
Cash $12,440,642 $997
Government 2,144,715 645
Retirement 625,645 --
- --------------------------------------------------------------------------------
</TABLE>
All officers and two Directors of the Fund are employees of SB.
4. Capital Loss Carryforward
At December 31, 1995, the Cash Portfolio had, for Federal tax purposes,
$1,464,199 of capital loss carryforwards available to offset future capital
gains through December 31, 2002. To the extent that these carryforward losses
are used to offset capital gains, it is probable that the gains so offset will
not be distributed.
5. Repurchase Agreements
The Fund purchases, and its custodian takes possession of, U.S. Government
securities from banks and securities dealers subject to agreements to resell the
securities to the sellers at a future date (generally, the next business day) at
an agreed-upon higher repurchase price. The Fund requires continual maintenance
of the market value of the collateral in amounts at least equal to the
repurchase price.
6. Capital Shares
The Fund has multiple classes of shares within the Cash and Government
Portfolios. Class A and Class Y shares can be purchased directly by investors;
Class C shares can only be purchased by participants in the Smith Barney 401(k)
Program; and, Class Z shares can only be purchased by participants in the Smith
Barney Employee 401(k) Program.
26
<PAGE>
Smith Barney Money Funds, Inc.
Notes to Financial Statements (unaudited) (continued)
At June 30, 1996, the Cash, Government and Retirement Portfolios had the
following shares outstanding for each class:
<TABLE>
<CAPTION>
Class A Class C Class Y Class Z
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash 25,163,162,589 2,129,580 87,783,337 5,438
Government 4,253,736,570 1,188,330 5,638,344 34,393,217
Retirement 1,280,024,248 -- -- --
- -------------------------------------------------------------------------------
</TABLE>
Transactions in shares of each Portfolio were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
Cash Portfolio June 30, 1996 December 31, 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
Class A
Shares sold 56,646,820,968 94,844,353,231
Shares issued on reinvestment 610,421,278 1,060,968,654
Shares redeemed (55,064,031,946) (90,528,044,829)
- -------------------------------------------------------------------------------
Net Increase 2,193,210,300 5,377,277,056
- -------------------------------------------------------------------------------
Class C
Shares sold 1,274,346 1,759,379
Shares issued on reinvestment 48,474 76,027
Shares redeemed (929,819) (1,421,588)
- -------------------------------------------------------------------------------
Net Increase 393,001 413,818
- -------------------------------------------------------------------------------
Class Y
Shares sold 250,477,947 232,388,029
Shares issued on reinvestment 1,086,089 819,469
Shares redeemed (193,931,099) (203,564,237)
- -------------------------------------------------------------------------------
Net Increase 57,632,937 29,643,261
- -------------------------------------------------------------------------------
Class Z
Shares sold -- --
Shares issued on reinvestment 138 282
Shares redeemed -- --
- -------------------------------------------------------------------------------
Net Increase 138 282
- -------------------------------------------------------------------------------
</TABLE>
27
<PAGE>
Smith Barney Money Funds, Inc.
Notes to Financial Statements (unaudited) (continued)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
Government Portfolio June 30, 1996 December 31, 1995
- ----------------------------------------------------------------------
<S> <C> <C>
Class A
Shares sold 8,439,313,831 16,082,844,648
Shares issued on reinvestment 104,057,260 203,071,713
Shares redeemed (8,327,150,276) (15,944,430,768)
- ----------------------------------------------------------------------
Net Increase 216,220,815 341,485,593
- ----------------------------------------------------------------------
Class C
Shares sold 52,096 112,576
Shares issued on reinvestment 31,945 117,703
Shares redeemed (354,503) (2,732,614)
- ----------------------------------------------------------------------
Net Increase (Decrease) (270,462) 2,502,335
- ----------------------------------------------------------------------
Class Y
Shares sold 30,820,149 84,418,479
Shares issued on reinvestment 166,812 559,403
Shares redeemed (30,724,447) (80,518,760)
- ----------------------------------------------------------------------
Net Increase 262,514 4,459,122
- ----------------------------------------------------------------------
Class Z
Shares sold 3,660,849 8,768,865
Shares issued on reinvestment 828,873 1,682,285
Shares redeemed (1,210,000) (9,007,000)
- ----------------------------------------------------------------------
Net Increase 3,279,722 1,444,150
- ----------------------------------------------------------------------
Retirement Portfolio
- ----------------------------------------------------------------------
Class A
Shares sold 2,371,258,764 4,330,327,073
Shares issued on reinvestment 30,418,053 58,412,308
Shares redeemed (2,401,305,097) (4,170,429,234)
- ----------------------------------------------------------------------
Net Increase 371,720 218,310,147
- ----------------------------------------------------------------------
</TABLE>
28
<PAGE>
Smith Barney Money Funds, Inc.
Financial Highlights
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------------
Cash Portfolio 1996(1) 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Net investment income 0.024 0.054 0.037 0.026 0.033 0.055
Dividends from net investment income (0.024) (0.054) (0.037) (0.026) (0.033) (0.055)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Total Return 2.44%++ 5.53% 3.73% 2.63% 3.31% 5.66%
- -------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in millions) $25,162 $22,969 $17,590 $2,953 $2,841 $1,784
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.62%+ 0.62% 0.64% 0.64% 0.60% 0.52%
Net investment income 4.89+ 5.39 4.10 2.60 3.17 5.55
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
Class C Class Y
-------------------------------- -------------------------------
Cash Portfolio 1996(1) 1995 1994(2) 1996(1) 1995 1994(3)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Net investment income 0.024 0.054 0.007 0.025 0.054 0.0004
Dividends from net investment income (0.024) (0.054) (0.007) (0.025) (0.054) (0.0004)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Total Return 2.44%++ 5.53% 0.007%++ 2.49%++ 5.50% 0.0004%++
- -------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in millions) $2.0 $1.7 $1.0 $88.0 $30.2 $0.5
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.62%+ 0.62% 0.62%+ 0.52%+ 0.51% 0.53%+
Net investment income 4.88+ 5.39 4.77+ 4.94+ 5.29 5.23+
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
Class Z
--------------------------------
Cash Portfolio 1996(1) 1995 1994(4)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Net investment income 0.025 0.055 0.006
Dividends from net investment income (0.025) (0.055) (0.006)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Total Return 2.47%++ 5.63% 0.006%++
- -------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in millions) $0.005 $0.005 $0.005
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.53%+ 0.52% 0.47%+
Net investment income 4.97+ 5.49 5.12+
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the six months ended June 30, 1996 (unaudited).
(2) For the period from November 10, 1994 (inception date) to December 31,
1994.
(3) For the period from December 29, 1994 (inception date) to December 31,
1994.
(4) For the period from November 15, 1994 (inception date) to December 31,
1994.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
29
<PAGE>
Smith Barney Money Funds, Inc.
Financial Highlights (continued)
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------------
Government Portfolio 1996(1) 1995 1994 1993 1992(2) 1991
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Net investment income 0.024 0.053 0.036 0.025 0.032 0.054
Dividends from net investment income (0.024) (0.053) (0.036) (0.025) (0.032) (0.054)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Total Return 2.39%++ 5.45% 3.63% 2.55% 3.32% 5.57%
- -------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in millions) $4,254 $4,038 $3,695 $ 636 $ 675 $ 394
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.61%+ 0.60% 0.61% 0.61% 0.55% 0.49%
Net investment income 4.67+ 5.31 4.03 2.53 3.15 5.43
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
Class C(3) Class Y(4)
-------------------------------- -------------------------------
Government Portfolio 1996(1) 1995 1994(5) 1996(1) 1995 1994(6)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Net investment income 0.024 0.053 0.036 0.024 0.054 0.0036
Dividends from net investment income (0.024) (0.053) (0.036) (0.024) (0.054) (0.0036)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Total Return 2.39%++ 5.46% 3.63% 2.44%++ 5.55% 3.65%
- -------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in millions) $1.0 $1.5 $4.0 $6.0 %5.4 $1.0
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.61%+ 0.60% 0.61%+ 0.51%+ 0.50% 0.60%
Net investment income 4.76+ 5.36 3.78 4.84+ 5.51 3.58
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
Class Z
--------------------------------
Government Portfolio 1996(1) 1995 1994(7)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Net investment income 0.024 0.054 0.007
Dividends from net investment income (0.024) (0.054) (0.007)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Total Return 2.44%++ 5.56% 0.007%++
- -------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in millions) $34.0 $31.1 $30.0
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.51%+ 0.50% 0.51%+
Net investment income 4.85+ 5.42 4.93+
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the six months ended June 30, 1996 (unaudited).
(2) Since no difference in expenses existed for Class A, C and Y shares the
Government Portfolio for 1993, this information is identical for each
class of shares.
(3) The inception date for Class C shares is March 5, 1993.
(4) The inception date for Class Y shares is October 28, 1993.
(5) On November 7, 1994, the former Class C shares were renamed as Class Y
shares.
(6) On November 7, 1994, the former Class Y shares were renamed as Class Z
shares.
(7) For the period from November 9, 1994 (inception date) to December 31,
1994.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
30
<PAGE>
Smith Barney Money Funds, Inc.
Financial Highlights (continued)
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------------
Retirement Portfolio 1996(1) 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Net investment income 0.024 0.053 0.036 0.026 0.032 0.054
Dividends from net investment income (0.024) (0.053) (0.036) (0.026) (0.032) (0.054)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------
Total Return 2.37%++ 5.42% 3.67% 2.58% 3.26% 5.58%
- -------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in millions) $1,280 $1,280 $1,061 $1,184 $1,030 $972
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.71%+ 0.72% 0.70% 0.70% 0.64% 0.57%
Net investment income 4.72+ 5.28 3.57 2.55 3.21 5.44
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the six months ended June 30, 1996 (unaudited).
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
31
<PAGE>
[This page intentionally left blank]
<PAGE>
Smith Barney
Money Funds, Inc.
Directors
Jessica M. Bibliowicz
Joseph H. Fleiss
Donald R. Foley
Paul Hardin
Francis P.Martin, M.D.
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
C. Richard Youngdahl
Officers
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President
and Treasurer
Phyllis M. Zahorodny
Vice President
Irving P. David
Controller
Christina T. Sydor
Secretary
[LOGO OF SMITH BARNEY
A MEMBER OF TRAVELERS GROUP
APPEARS HERE]
Investment Manager
Smith Barney Mutual Funds
Management Inc.
Distributor
Smith Barney Inc.
Custodian
PNC Bank, N.A.
Shareholder
Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of the shareholders of
Smith Barney Money Funds, Inc. It is not authorized for distribution to
prospective investors unless accompanied or preceded by an effective Prospectus
for the Fund, which contains information concerning the Fund's investment
policies and expenses as well as other pertinent information.
Smith Barney
Money Funds, Inc.
388 Greenwich Street
New York, New York 10013
FD0622 8/96
