<PAGE>
A N N U A L R E P O R T
1995
1995
1995
1995
1995
Smith Barney
Money Funds, Inc.
- ----------------------------------------
December 31, 1995
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to provide you with the annual report for the year ended
December 31, 1995 for Smith Barney Money Funds, Inc. 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 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 December 31, 1995:
Yields from Smith Barney Money Funds (Class A Shares)
<TABLE>
<CAPTION>
Portfolio Seven-Day Yield Effective Yield
- -----------------------------------------------------
<S> <C> <C>
Cash 5.16% 5.30%
Government 5.07% 5.20%
Retirement 5.06% 5.19%
</TABLE>
Please note that an investment in Smith Barney Money Funds is neither
insured nor guaranteed by the U.S. government, and there can be no assurance
that the Funds will be able to maintain a stable net asset value of $1.00 per
share.
Asset Growth of Portfolios
Assets in Smith Barney Money Funds grew significantly during 1995,
reflecting the higher yields provided by money market funds compared to those
offered by insured, fixed-rate investments. In fact, assets in Smith Barney
Money Funds rose by more than 25% during 1995, a trend that was shared by the
money market fund industry in general. In recent years, the money market fund
industry has experienced an annual asset growth rate of more than 20%. This
growth was due in large part to more and more investors looking for stability
of principal and current income.
1995: The Year in Review
The year 1995 began with signs that the U.S. economy, as measured by gross
domestic product (GDP), would continue its recovery. Economic indicators were
strong and the U.S. economy was growing at a rate of roughly 5.00%. However,
this rapid economic growth, combined with strong employment, was
1
<PAGE>
seen by the Federal Reserve as a sign of a possible increase in the rate of
inflation. In an effort to head off any such increase, the Federal Reserve
raised the federal funds rate from 5.50% to 6.00% in early 1995, effectively
slowing economic growth.
The economy's response to this Federal Reserve action was virtually immediate.
As early as March, automobile manufacturers began reporting sluggish demand and
responded with production cuts. This contributed to meager economic growth and,
in a confirmation of expectations, the Federal Reserve eased its monetary policy
on July 6, 1995 and lowered the federal funds rate from 6.00% to 5.75%.
Following its July meeting, the Federal Reserve held firm and did not lower
short-term interest rates until its final meeting of the year. Citing subdued
inflation, the Federal Reserve lowered the federal funds rate another 25 basis
points to 5.50% in December. This action caused an anticipation by investors of
more accommodating moves by the Federal Reserve.
Economic Outlook
As companies substitute technology for labor to keep costs down and overall
economic growth slows, the case for a further Federal Reserve easing becomes
more compelling. We believe inflation will remain low. The federal funds rate
now stands at 5.50% and inflation, as measured by the Consumer Price Index, is
roughly 2.6%. In our view, current Federal Reserve policy is overly restrictive
and the federal funds rate may drop 100 basis points in the coming months.
Investment Strategy
We are bullish and have maintained an average life for Smith Barney Money
Funds at between 65 and 75 days. We continue to follow a conservative approach
in managing the Portfolios. Smith Barney Money Funds have no exposure to
Japanese banks and all securities are first-tier as defined by the Securities
and Exchange Commission.
Our Pledge to You
Smith Barney Money Funds are one of the foundations of Smith Barney Mutual
Funds. They offer you a combination of income, convenient access to your money
and safety of principal. Smith Barney Money Funds embody the spirit of our
Family's overriding investment philosophy: to provide you with access to
investment opportunities supported by years of solid, in-depth investment
experience. While we always seek to provide you with competitive performance,
we never lose sight of the need to help protect your wealth. All of the Smith
Barney Mutual Funds, including Smith Barney Money Funds, are
2
<PAGE>
managed by seasoned investment professionals who generally have more than 20
years of experience in managing money.
We provide these benefits through your Smith Barney Financial Consultant. As
a dedicated professional committed to service, he or she is always ready to
review your investment goals, answer your questions about investing or provide
you with an update on the markets or your portfolio. We encourage you to stay
in touch with your Financial Consultant and take full advantage of all he or
she can offer.
It is with deep regret that we announce the passing of Ralph D. Creasman, a
Director of the Funds and a valued colleague. His wisdom and insights were
valuable and will be missed.
In closing, we would like to thank you for your investment in Smith Barney
Money Funds and look forward to serving your investment needs in the future.
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
January 19, 1996
3
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments December 31, 1995
- --------------------------------------------------------------------------------
CASH PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------
U.S. AGENCIES AND INSTRUMENTALITIES -- 5.5%
<C> <S> <C> <C>
$ 375,000,000 Federal Farm Credit Bank
mature 7/01/96 to 11/01/96 5.49% to 5.72% $ 373,188,850
284,040,000 Federal Home Loan Bank
mature 2/23/96 to 10/16/96 5.62 to 5.99 283,383,052
150,000,000 Federal Home Loan Mortgage Corp.
matures 2/28/96 6.58 150,058,874
345,000,000 Federal National Mortgage Association
mature 2/28/96 to 9/23/96 5.41 to 5.88 344,209,372
113,000,000 Student Loan Marketing Association
mature 4/16/96 to 11/24/97+ 5.10 to 5.18 113,000,000
- ------------------------------------------------------------------------------------------
TOTAL U.S. AGENCIES AND
INSTRUMENTALITIES
(Cost -- $1,263,840,148) 1,263,840,148
==========================================================================================
DOMESTIC BANK OBLIGATIONS -- 7.1%
75,000,000 BankAmerica Corp.
mature 1/08/96 to 1/19/96 5.70 to 5.75 75,000,000
125,000,000 Bank of New York
mature 4/19/96 to 6/19/96 5.43 to 6.50 125,022,412
383,000,000 FCC National
mature 1/05/96 to 11/01/96 5.50 to 5.78 383,059,470
138,400,000 First Chicago Corp. National
mature 3/11/96 to 4/24/96 6.45 to 6.78 138,363,365
255,000,000 National Bank of Detroit
mature 4/17/96 to 5/30/96 5.60 to 6.50 255,101,038
301,000,000 NationsBank
mature 1/26/96 to 6/28/96 5.50 to 6.78 301,041,111
25,000,000 NationsBank Texas matures 3/08/96 5.60 25,000,000
330,000,000 Pittsburgh National Bank
mature 5/03/96 to 5/24/96 5.93 to 6.40 330,204,341
- ------------------------------------------------------------------------------------------
TOTAL DOMESTIC BANK OBLIGATIONS
(Cost -- $1,632,791,737) 1,632,791,737
==========================================================================================
DOMESTIC CERTIFICATES OF DEPOSIT -- 2.6%
75,000,000 Bank of America
mature 2/22/96 to 4/29/96 5.74 to 5.75 74,998,557
50,000,000 BankAmerica matures 1/03/96 5.77 50,000,000
125,000,000 Bank of New York
mature 4/29/96 to 5/31/96 5.60 to 6.44 125,004,078
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
CASH PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------
DOMESTIC CERTIFICATES OF DEPOSIT -- 2.6% (continued)
<C> <S> <C> <C>
$ 125,000,000 Chemical Bank
mature 1/16/96 to 4/05/96 5.74% to 5.79% $ 125,000,000
25,000,000 Harris Bank matures 5/31/96 5.51 25,004,497
175,000,000 Morgan Guaranty
mature 4/04/96 to 6/12/96 5.48 to 5.78 175,014,940
19,000,000 National Bank of Detroit
matures 2/26/96 5.72 19,003,495
- ------------------------------------------------------------------------------------------
TOTAL DOMESTIC CERTIFICATES
OF DEPOSIT (Cost -- $594,025,567) 594,025,567
==========================================================================================
COMMERCIAL PAPER -- 51.8%
55,000,000 Abbey National North America
mature 1/05/96 to 1/12/96 5.74 to 5.80 54,910,811
25,000,000 ABN AMRO Bank N.V. matures 2/15/96 5.74 24,822,969
30,000,000 AIG Funding matures 7/31/96 5.41 29,076,033
143,500,000 Alliance & Leicester Building Society
mature 1/09/96 to 1/25/96 5.70 to 5.76 143,209,534
39,500,000 American Home Products (AHP Robins)
matures 3/05/96 5.73 39,103,244
63,835,000 American Home Products
mature 1/29/96 to 2/15/96 5.70 to 5.80 63,471,768
254,000,000 Asset Securitization
mature 1/24/96 to 2/29/96 5.74 to 5.83 252,392,304
75,000,000 Associates Corp. of North America
mature 2/06/96 to 2/09/96 5.74 74,563,708
50,000,000 AT & T Capital Corp. matures 1/12/96 5.74 49,913,986
280,000,000 AT & T Corp.
mature 2/26/96 to 5/17/96 5.58 to 5.79 275,311,078
30,000,000 Banca Commerciale Italiana N.Y.
matures 2/29/96 5.76 29,721,717
50,000,000 Bank of America matures 6/19/96 5.41 48,755,694
25,000,000 Bank of Nova Scotia matures 2/16/96 5.70 24,819,833
175,000,000 Bankers Trust N.Y. Corp.
mature 1/31/96 to 3/08/96 5.69 to 5.80 173,693,687
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
CASH PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------
COMMERCIAL PAPER -- 51.8% (continued)
<C> <S> <C> <C>
$ 123,000,000 Banque Francaise du Commerce
Ext. U.S. Finance Co.
mature 2/05/96 to 2/15/96 5.76% to 5.79% $ 122,281,635
142,130,000 British Gas Capital
mature 2/20/96 to 2/27/96 5.73 to 5.74 140,941,340
50,000,000 Canadian Imperial Holding
matures 2/26/96 5.80 49,559,778
144,600,000 Canadian Wheat Board
mature 2/14/96 to 6/13/96 5.40 to 5.75 143,152,632
75,000,000 Cariplo
mature 2/21/96 to 3/04/96 5.69 to 5.85 74,325,792
175,000,000 Chase Manhattan Bank Corp.
mature 2/16/96 to 4/05/96 5.61 to 5.73 173,001,042
274,500,000 Cheltenham & Gloucester
Building Society
mature 1/04/96 to 3/05/96 5.68 to 5.80 272,908,797
310,200,000 Ciesco L.P.
mature 1/11/96 to 3/08/96 5.72 to 5.79 308,235,760
110,000,000 CIT Group Holdings, Inc.
mature 2/12/96 to 3/18/96 5.65 to 5.75 109,009,558
200,000,000 Citicorp matures 1/02/96 6.00 199,966,667
63,000,000 Compagnie Bancaire USA Finance
Corp. mature 1/10/96 to 2/14/96 5.73 to 5.74 62,702,401
130,000,000 Corporate Asset Funding, Co.
mature 1/17/96 to 3/05/96 5.67 to 5.78 129,125,737
200,400,000 Corporate Receivables Corp.
mature 1/19/96 to 3/19/96 5.54 to 5.81 198,518,611
50,000,000 Creditanstalt Finance, Inc.
matures 1/05/96 5.80 49,968,222
195,000,000 Credito Italiano Delaware, Inc.
mature 1/26/96 to 4/17/96 5.71 to 5.88 193,180,821
175,000,000 CXC, Inc.
mature 1/23/96 to 3/15/96 5.68 to 5.88 173,580,894
30,000,000 Daimler-Benz North American Corp.
matures 2/15/96 5.75 29,787,750
246,850,000 Dean Witter, Discover & Co.
mature 1/17/96 to 2/16/96 5.75 to 5.88 245,758,090
50,000,000 Delaware Funding Corp.
matures 2/02/96 5.76 49,747,556
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
CASH PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------
COMMERCIAL PAPER -- 51.8% (continued)
<C> <S> <C> <C>
$ 145,000,000 Dresdner US Finance, Inc.
mature 1/31/96 to 5/03/96 5.65% to 5.74% $ 143,490,333
115,000,000 E.I. du Pont De Nemours
mature 2/16/96 to 10/03/96 5.50 to 5.75 111,889,597
112,000,000 Eli Lilly & Co.
mature 1/23/96 to 6/17/96 5.42 to 5.70 110,620,592
220,309,000 Enterprise Funding Corp.
mature 1/19/96 to 5/28/96 5.66 to 5.89 218,195,442
116,025,000 Falcon Asset Security Corp.
mature 1/22/96 to 3/08/96 5.65 to 5.84 115,223,479
130,000,000 Fleet Mortgage Group
mature 1/19/96 to 3/22/96 5.74 to 5.91 129,326,300
158,800,000 Ford Credit Europe PLC
mature 1/03/96 to 2/16/96 5.70 to 5.98 158,231,387
200,000,000 Ford Motor Credit
mature 1/02/96 to 4/05/96 5.65 to 6.00 198,529,083
355,000,000 General Electric Capital Corp.
mature 1/25/96 to 4/30/96 5.61 to 5.77 351,393,896
239,000,000 General Motors Acceptance Corp.
mature 2/05/96 to 4/22/96 5.69 to 5.78 236,089,868
210,000,000 Generale Bank Inc.
mature 3/07/96 to 4/22/96 5.56 to 5.80 207,205,914
320,000,000 Glaxo Holdings PLC
mature 2/16/96 to 3/15/96 5.66 to 5.74 317,257,353
455,000,000 Goldman Sachs Group L.P.
mature 1/17/96 to 5/07/96 5.64 to 5.80 448,363,227
288,600,000 Halifax Building Society
mature 1/08/96 to 4/09/96 5.60 to 5.78 286,307,744
375,880,000 Hanson Finance PLC
mature 1/08/96 to 3/11/96 5.67 to 5.82 373,650,481
75,000,000 Household Finance Corp.
mature 2/09/96 to 2/23/96 5.76 to 5.77 74,483,472
25,000,000 Household International
matures 3/08/96 5.70 24,738,514
90,000,000 Indosuez North America, Inc.
mature 1/29/96 to 2/05/96 5.80 to 5.84 89,604,046
275,000,000 International Nederlander
mature 2/23/96 to 6/20/96 5.42 to 5.80 271,178,072
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
CASH PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------
COMMERCIAL PAPER -- 51.8% (continued)
<C> <S> <C> <C>
$ 94,500,000 J.C. Penney Co.
mature 1/05/96 to 2/23/96 5.73% to 5.74% $ 93,793,985
185,000,000 JP Morgan & Co.
mature 1/11/96 to 3/15/96 5.66 to 5.76 183,710,784
217,000,000 McKenna Triangle
mature 1/11/96 to 3/15/96 5.65 to 5.87 195,410,708
192,000,000 Merrill Lynch & Co., Inc.
mature 1/10/96 to 4/30/96 5.62 to 5.83 215,136,308
177,000,000 Morgan Stanley Group, Inc.
mature 1/29/96 to 6/24/96 5.43 to 5.83 175,302,826
227,000,000 National & Provincial Building Society
mature 1/04/96 to 4/17/96 5.71 to 5.80 225,102,674
150,000,000 National Bank of Canada Finance USA
mature 1/19/96 to 4/05/96 5.70 to 5.89 148,682,344
50,000,000 NationsBank Corp. matures 3/20/96 5.65 49,391,042
290,000,000 New Center Asset Trust
mature 1/02/96 to 2/26/96 5.74 to 6.03 289,027,993
182,475,000 Oesterreichische Kontrollbank AG
mature 1/11/96 to 6/13/96 5.41 to 5.73 179,697,745
46,400,000 Pepsico, Inc. matures 2/23/96 5.71 46,016,092
202,625,000 Preferred Receivable Funding
mature 1/05/96 to 3/06/96 5.71 to 5.84 201,465,514
78,100,000 Province of British Columbia
mature 2/26/96 to 5/02/96 5.65 to 5.82 77,101,942
134,213,000 Receivable Capital Corp.
mature 1/25/96 to 3/14/96 5.68 to 5.84 133,073,174
99,500,000 Renault Acceptance B.V.
mature 1/08/96 5.82 to 5.83 99,388,947
233,719,000 Royal Bank of Canada
mature 1/11/96 to 6/17/96 5.44 to 5.77 229,584,064
166,435,000 Sheffield Receivable
mature 1/19/96 to 2/16/96 5.74 to 5.84 165,571,033
50,000,000 Societe Generale N.A. Inc.
matures 3/18/96 5.70 49,407,528
100,000,000 Swedish Export Credit
mature 2/01/96 to 6/18/96 5.42 to 5.79 98,875,292
129,500,000 Toronto Dominion Holding USA Inc.
mature 2/12/96 to 4/25/96 5.75 to 5.77 127,787,722
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
CASH PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------
COMMERCIAL PAPER -- 51.8% (continued)
<C> <S> <C> <C>
$ 112,000,000 Transamerica Corp.
mature 1/19/96 to 3/18/96 5.71% to 5.74% $ 111,103,652
300,000,000 Union Bank of Switzerland
matures 1/02/96 6.00 299,949,999
50,000,000 Westdeutsche Landesbank
matures 2/09/96 5.75 49,693,146
90,000,000 Whirlpool Financial Corp.
mature 1/22/96 to 3/13/96 5.73 to 5.78 89,342,479
85,904,000 Windmill Funding Corp.
mature 1/24/96 to 1/30/96 5.84 to 5.89 85,542,205
107,900,000 WMX Technologies, Inc.
mature 1/16/96 to 2/06/96 5.77 to 5.79 107,511,924
205,000,000 Woolwich Building Society
mature 1/10/96 to 3/27/96 5.67 to 5.77 203,652,115
50,000,000 Z-Landesbank Bank Austria AG
matures 3/11/96 5.65 49,458,472
- ------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $11,855,079,958) 11,855,079,958
==========================================================================================
TIME DEPOSITS -- 2.4%
141,824,000 Banque Paribas matures 1/02/96 5.88 141,824,000
250,000,000 First Chicago matures 1/02/96 6.00 250,000,000
150,000,000 Z-Landesbank Bank Austria AG
matures 1/02/96 6.00 150,000,000
- ------------------------------------------------------------------------------------------
TOTAL TIME DEPOSITS
(Cost -- $541,824,000) 541,824,000
==========================================================================================
FOREIGN CERTIFICATES OF DEPOSIT -- 26.0%
350,000,000 Abbey National PLC
mature 1/16/96 to 3/18/96 5.55 to 6.81 350,008,654
155,000,000 ABN AMRO Bank N.V.
mature 1/16/96 to 4/11/96 5.72 to 5.75 155,006,217
70,000,000 ABN AMRO Bank (Chicago)
mature 1/18/96 to 5/16/96 5.60 to 5.74 70,002,737
350,000,000 Bank of Nova Scotia
mature 1/04/96 to 6/11/96 5.51 to 7.79 350,009,453
75,000,000 Banque Francais du Commerce Ext.
mature 1/04/96 to 2/23/96 5.65 to 6.78 75,000,021
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
CASH PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------
FOREIGN CERTIFICATES OF DEPOSIT -- 26.0% (continued)
<C> <S> <C> <C>
$ 314,000,000 Banque National De Paris
mature 1/20/96 to 6/14/96 5.44% to 5.83% $ 314,017,437
267,000,000 Banque Paribas
mature 1/04/96 to 6/07/96 5.53 to 5.80 267,009,222
200,000,000 Barclays Bank
mature 1/03/96 to 1/12/96 5.80 200,000,149
407,000,000 Bayerische Landesbank
mature 1/04/96 to 6/27/96 5.40 to 5.83 407,030,523
150,000,000 Bayerische Vereinsbank
mature 1/10/96 to 2/05/96 5.78 to 5.80 149,999,459
70,000,000 Canadian Imperial Bank of Commerce
mature 1/16/96 to 4/22/96 5.66 to 5.80 70,006,080
151,546,210 Cariplo
mature 2/08/96 to 3/04/96 5.71 to 5.77 151,550,341
287,000,000 Commerzbank AG
mature 2/06/96 to 7/10/96 5.39 to 6.65 287,070,689
150,000,000 Credit Industrial et Commercial
mature 1/10/96 to 5/29/96 5.64 to 5.80 150,002,407
278,500,000 Creditanstalt Bankverein
mature 1/08/96 to 4/19/96 5.66 to 5.76 278,616,165
25,000,000 Credit Agricola matures 3/05/96 5.66 25,000,438
24,000,000 Credit Suisse matures 3/07/96 5.66 23,992,777
490,000,000 Deutsche Bank
mature 1/02/96 to 4/26/96 5.61 to 6.80 490,040,674
170,000,000 Dresdner Bank
mature 1/31/96 to 2/29/96 5.60 to 6.67 170,050,879
250,000,000 Hessiche Landesbank
mature 1/16/96 to 4/23/96 5.69 to 5.83 249,993,966
300,000,000 Lloyds Bank
mature 1/04/96 to 4/22/96 5.77 to 6.80 300,073,605
25,000,000 National Bank of Canada Finance
matures 1/12/96 5.81 25,000,075
280,000,000 National Westminster PLC
mature 1/05/96 to 6/04/96 5.50 to 5.80 280,009,837
263,000,000 Rabobank Nederland N.V.
mature 1/16/96 to 5/31/96 5.71 to 5.84 263,013,964
100,000,000 Royal Bank of Canada
mature 1/11/96 to 4/23/96 5.74 to 5.80 99,991,493
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
CASH PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- -------------------------------------------------------------------------------------------
FOREIGN CERTIFICATES OF DEPOSIT -- 26.0% (continued)
<C> <S> <C> <C>
$ 345,000,000 Societe Generale N.A. Inc.
mature 1/02/96 to 4/02/96 5.60% to 5.74% $ 345,015,479
50,000,000 Swiss Bank Corporation
matures 2/02/96 5.75 50,000,866
99,000,000 Toronto Dominion
mature 3/11/96 to 3/28/96 5.64 to 6.82 99,001,924
80,000,000 Union Bank of Switzerland
mature 6/17/96 5.40 to 5.41 80,041,959
168,000,000 Westdeutsche Landesbank
mature 1/16/96 to 3/12/96 5.68 to 5.81 168,001,992
- ------------------------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES
OF DEPOSIT (Cost -- $5,944,559,482) 5,944,559,482
================================================================================================
OTHER SHORT-TERM NOTES -- 2.0%
25,000,000 Beneficial Corp. matures 6/14/96 5.90 25,000,000
20,000,000 General Electric Capital Corp.
matures 9/13/96 5.64 20,000,000
230,000,000 Merrill Lynch & Co.
mature 3/01/96 to 9/19/96 5.68 to 6.87 230,000,000
150,000,000 PHH Corporation
mature 3/14/96 to 3/22/96 6.51 to 6.69 150,000,000
35,000,000 Westdeutsche Landesbank
matures 3/13/96 6.64 35,007,131
- ------------------------------------------------------------------------------------------------
TOTAL OTHER SHORT-TERM NOTES
(Cost -- $460,007,131) 460,007,131
================================================================================================
OTHER -- 0.4%
96,989,000 Dakota Certificates Program
mature 1/12/96 to 3/12/96
(Cost -- $96,267,953) 5.69 to 5.87 96,267,953
================================================================================================
REPURCHASE AGREEMENTS -- 2.2%
200,000,000 First Boston, Inc., 5.60% due 1/19/96;
Proceeds at maturity -- $200,933,333; (Fully
collateralized by U.S. Treasury Notes,
7.500% to 12.750% due 11/15/10 to
11/15/16; Market value -- $204,103,436) 200,000,000
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
CASH PORTFOLIO
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY VALUE
- ------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 2.2% (continued)
<C> <S> <C>
$ 100,000,000 JP Morgan & Co., 5.60% due 1/19/96;
Proceeds at maturity -- $100,466,667; (Fully
collateralized by U.S. Treasury Notes,
5.625% to 6.000% due 6/30/97 to 8/31/97;
Market value -- $102,003,551) $ 100,000,000
200,000,000 Morgan Stanley Group, Inc., 5.90% due 1/05/96
Proceeds at maturity -- $200,590,000; (Fully
collateralized by U.S. Treasury Notes,
5.500% to 9.500% due 7/01/97 to 7/01/25;
Market value -- $203,044,873) 200,000,000
- -------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost -- $500,000,000) 500,000,000
===========================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $22,888,395,976)++ $22,888,395,976
===========================================================================================
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
GOVERNMENT PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------------
U.S. AGENCIES AND INSTRUMENTALITIES -- 91.5%
<C> <S> <C> <C>
$ 137,700,000 Federal Farm Credit Bank
mature 1/05/96 to 11/01/96 5.37% to 5.66% $ 137,032,433
1,069,205,000 Federal Home Loan Bank
mature 1/02/96 to 10/16/96 5.29 to 5.99 1,061,066,269
887,722,000 Federal Home Loan Mortgage Corp.
mature 1/02/96 to 6/21/96 5.29 to 5.91 880,491,419
1,683,720,000 Federal National Mortgage Association
mature 1/05/96 to 11/14/96 5.30 to 5.93 1,670,883,050
30,000,000 Tennessee Valley Authority
mature 1/17/96 to 1/18/96 5.64 29,925,094
- ----------------------------------------------------------------------------------------------------
TOTAL U.S. AGENCIES AND
INSTRUMENTALITIES
(Cost -- $3,779,398,265) 3,779,398,265
====================================================================================================
REPURCHASE AGREEMENTS -- 8.5%
100,000,000 Morgan Stanley Group, Inc., 5.75% due 1/18/96
Proceeds at maturity -- $100,479,167;
(Fully collateralized by U.S. Treasury
Notes, 6.375% due 6/30/97;
Market value -- $102,058,906) 100,000,000
20,031,000 Morgan Stanley Group, Inc., 5.90% due 1/02/96
Proceeds at maturity -- $20,044,131;
(Fully collateralized by U.S. Treasury Bills
due 3/14/96; Market value -- $20,449,970) 20,031,000
130,000,000 Goldman Sachs & Co., 5.85% due 1/02/96
Proceeds at maturity -- $130,084,500;
(Fully collateralized by U.S. Treasury
Notes; 6.160% to 9.875% due 2/16/96
to 11/02/18; Market value -- $132,600,423) 130,000,000
100,000,000 Morgan Guaranty, 5.77% due 1/12/96
Proceeds at maturity -- $100,496,861;
(Fully collateralized by U.S. Treasury Notes;
5.875% to 9.125% due 2/15/96 to 11/15/00;
Market value -- $102,004,480) 100,000,000
- ----------------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost -- $350,031,000) 350,031,000
====================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $4,129,429,265)++ $4,129,429,265
===================================================================================================
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
RETIREMENT PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------
U.S. AGENCIES AND INSTRUMENTALITIES -- 4.1%
<C> <S> <C> <C>
$ 5,000,000 Federal Farm Credit Bank
matures 3/01/96 6.21% $ 4,950,833
13,020,000 Federal Home Loan Bank
mature 1/05/96 to 2/16/96 6.24 to 6.54 12,968,196
13,000,000 Federal National Mortgage Association
mature 8/19/96 to 10/07/96 5.35 to 5.55 12,857,359
21,000,000 Student Loan Marketing Association
mature 4/16/96 to 11/24/97+ 5.09 to 5.18 21,000,000
- ------------------------------------------------------------------------------------------
TOTAL U.S. AGENCIES AND
INSTRUMENTALITIES
(Cost -- $51,776,388) 51,776,388
==========================================================================================
DOMESTIC BANK OBLIGATIONS -- 5.6%
20,000,000 Bank of New York
mature 4/22/96 to 6/11/96 5.50 to 5.78 20,000,000
10,000,000 Chemical Bank matures 4/05/96 5.79 10,000,000
20,000,000 First Chicago Corp. National
mature 1/05/96 to 6/05/96 5.54 to 5.78 20,000,000
8,000,000 National Bank of Detroit
matures 2/26/96 5.74 8,001,239
10,000,000 NationsBank Texas matures 4/08/96 5.65 10,000,000
4,000,000 Pittsburgh National Bank
matures 9/18/96 5.61 3,998,580
- ------------------------------------------------------------------------------------------
TOTAL DOMESTIC BANK OBLIGATIONS
(Cost -- $71,999,819) 71,999,819
==========================================================================================
COMMERCIAL PAPER -- 63.1%
10,000,000 Abbey National North America Corp.
matures 1/08/96 5.71 9,989,092
4,500,000 Abbey National Treasury PLC
matures 1/08/96 5.69 4,495,109
10,000,000 ABN AMRO Bank N.V.
matures 2/20/96 5.75 9,921,181
21,000,000 Asset Securitization
mature 1/12/96 to 2/16/96 5.73 to 5.75 20,903,243
42,775,000 AT & T Corp.
mature 1/25/96 to 5/10/96 5.59 to 5.79 42,216,235
23,000,000 Bank of America
mature 3/01/96 to 6/26/96 5.40 to 5.75 22,619,183
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
RETIREMENT PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------
COMMERCIAL PAPER -- 63.1% (continued)
<C> <S> <C> <C>
$ 21,300,000 Bankers Trust New York Corp.
mature 2/27/96 to 3/05/96 5.68% to 5.75% $ 21,097,569
10,000,000 Banque Paribas matures 1/12/96 5.79 9,982,461
13,250,000 Bear Stearns mature 1/12/96 5.80 to 5.81 13,226,640
10,000,000 Canadian Imperial Holding
matures 1/08/96 5.82 9,988,858
7,000,000 Canadian Wheat Board
matures 3/28/96 5.70 6,905,774
10,000,000 Chase Manhattan Bank Corp.
matures 3/04/96 5.72 9,901,475
10,000,000 Cheltenham & Gloucester Building
Society matures 2/12/96 5.75 9,933,967
12,000,000 Ciesco L.P. matures 2/06/96 5.76 11,931,360
8,800,000 Compagnie Bancaire USA Finance Corp.
mature 1/03/96 to 2/08/96 5.81 to 5.85 8,768,169
10,000,000 Corporate Asset Funding Co.
matures 1/17/96 5.78 9,974,711
15,500,000 Daimler-Benz North America Corp.
matures 1/26/96 5.83 15,437,569
31,800,000 Dean Witter, Discover & Co.
mature 1/26/96 to 2/15/96 5.76 to 5.79 31,606,533
20,000,000 Dresdner US Finance Inc.
mature 1/17/96 to 1/22/96 5.80 to 5.81 19,940,944
7,000,000 E.I. du Pont De Nemours
matures 4/26/96 5.70 6,874,929
22,000,000 Eli Lilly & Co.
mature 2/23/96 to 3/22/96 5.68 to 5.74 21,774,858
25,000,000 Ford Motor Credit Corp.
mature 2/13/96 to 2/22/96 5.75 to 5.77 24,809,111
36,500,000 General Electric Capital Corp.
mature 1/24/96 to 5/02/96 5.53 to 5.76 36,142,002
37,800,000 Goldman Sachs Group, LP
mature 1/12/96 to 5/07/96 5.56 to 5.79 37,463,842
32,600,000 Hanson Finance PLC
mature 1/12/96 to 2/16/96 5.75 to 5.80 32,485,568
10,000,000 Indosuez North America, Inc.
matures 1/29/96 5.81 9,955,667
10,000,000 International Nederlander
matures 2/23/96 5.81 9,916,967
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
RETIREMENT PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------
COMMERCIAL PAPER -- 63.1% (continued)
<C> <S> <C> <C>
$ 9,150,000 J.P. Morgan & Co.
mature 1/31/96 to 2/16/96 5.73% to 5.77% $ 9,094,502
20,000,000 Krediet Bank North America Finance
mature 1/02/96 to 1/31/96 5.78 to 5.84 19,950,819
30,000,000 McKenna Triangle
mature 1/18/96 to 2/13/96 5.75 to 5.82 29,876,264
23,500,000 Merrill Lynch & Co., Inc.
mature 2/28/96 to 4/30/96 5.63 to 5.78 23,161,956
5,000,000 Morgan Stanley Group, Inc.
matures 6/24/96 5.47 4,870,694
21,000,000 National & Provincial Building Society
mature 2/05/96 to 3/18/96 5.75 to 5.80 20,819,157
12,000,000 NationsBank Corp. matures 1/16/96 5.70 11,972,050
13,000,000 Oesterreichische Kontrollbank AG
matures 6/13/96 5.50 12,683,161
20,000,000 PHH Corporation matures 1/12/96 5.77 19,965,228
3,300,000 Preferred Receivable Funding
matures 1/30/96 5.76 3,284,848
6,965,000 Province of British Columbia
mature 4/03/96 to 6/10/96 5.44 to 5.75 6,828,219
19,500,000 Royal Bank of Canada
mature 2/02/96 to 6/06/96 5.46 to 5.75 19,229,901
13,850,000 San Paolo US Finance Inc.
matures 3/01/96 5.75 13,719,118
17,800,000 Sheffield Receivable Corp.
mature 2/16/96 to 2/23/96 5.63 to 5.78 17,660,566
20,000,000 Siemens Corp.
mature 1/08/96 to 1/26/96 5.56 to 5.75 19,950,525
10,000,000 Societe Generale matures 1/18/96 5.83 9,972,611
12,000,000 Swedish Export Credit matures 2/09/96 5.71 11,926,420
23,000,000 Toronto Dominion Holding USA Inc.
mature 1/08/96 to 2/27/96 5.75 to 5.81 22,872,582
36,250,000 Transamerica Finance Corp.
mature 1/16/96 to 2/01/96 5.74 to 5.81 36,121,637
10,000,000 Union Bank of Switzerland
matures 1/02/96 5.90 9,998,361
14,000,000 Woolwich Building Society
matures 3/27/96 5.67 13,814,049
- ------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $806,035,685) 806,035,685
==========================================================================================
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
RETIREMENT PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ------------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT -- 26.1%
<C> <S> <C> <C>
$ 19,000,000 ABN AMRO Bank N.V.
mature 2/05/96 to 6/28/96 5.41% to 5.80% $ 18,999,708
20,000,000 Abbey National PLC
mature 2/29/96 to 3/01/96 5.58 to 5.72 20,002,355
8,000,000 Bank of Montreal matures 1/12/96 5.80 8,000,015
10,000,000 Bank of Nova Scotia matures 4/22/96 5.60 10,000,434
10,000,000 Banque National De Paris
matures 2/05/96 5.83 9,999,367
8,000,000 Bayerische Landesbank
matures 1/17/96 6.58 8,002,400
9,000,000 Bayerische Vereinsbank
matures 1/25/96 5.77 8,999,748
10,000,000 Canadian Imperial Bank of Commerce
matures 1/30/96 5.82 10,000,000
10,000,000 Cariplo matures 3/04/96 5.71 10,000,674
30,000,000 Commerzbank US Finance
mature 1/12/96 to 3/18/96 5.69 to 5.75 30,004,598
19,000,000 Credit Suisse
mature 1/17/96 to 1/29/96 5.72 to 5.73 18,999,607
13,000,000 Creditanstalt Bankverien
matures 5/13/96 5.53 13,000,469
25,000,000 Deutsche Bank
mature 2/01/96 to 4/12/96 5.75 to 6.61 25,002,021
29,000,000 Morgan Guaranty matures 4/04/96 5.61 to 5.79 29,005,506
28,000,000 National Westminster PLC
mature 1/05/96 to 2/01/96 5.70 to 5.82 28,001,440
10,000,000 Rabobank Nederland N.V.
matures 1/31/96 5.75 10,000,243
6,000,000 Royal Bank of Canada
matures 2/09/96 5.76 5,999,840
23,000,000 Societe Generale
mature 1/02/96 to 3/06/96 5.75 to 5.80 23,000,000
14,000,000 Swiss Bank Corporation
mature 1/05/96 to 6/03/96 5.52 to 5.77 14,001,588
10,000,000 Toronto Dominion matures 4/02/96 5.63 10,000,000
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1995
- --------------------------------------------------------------------------------
RETIREMENT PORTFOLIO
<TABLE>
<CAPTION>
ANNUALIZED
FACE YIELD ON DATE
AMOUNT SECURITY OF PURCHASE VALUE
- ----------------------------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSITS -- 26.1% (continued)
<C> <S> <C> <C>
$ 8,000,000 Union Bank of Switzerland
matures 2/20/96 5.82% $ 7,999,920
15,000,000 Westdeutsche Landesbank
matures 2/05/96 5.78 15,000,000
- --------------------------------------------------------------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost -- $334,019,933) 334,019,933
==============================================================================================================
REPURCHASE AGREEMENT -- 1.1%
13,557,000 Morgan Stanley Group, Inc., 5.90% due 1/02/96;
Proceeds at maturity -- $13,565,887;
(Fully collateralized by U.S. Treasury Bills due 3/14/96;
Market value -- $13,837,879)
(Cost -- $13,557,000) 13,557,000
==============================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $1,277,388,825)++ $1,277,388,825
==============================================================================================================
</TABLE>
+ Weekly Floating Rate Note -- Interest varies with the three month Treasury
Bill.
++ Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
18
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cash Government Retirement
Portfolio Portfolio Portfolio
================================================================================
<S> <C> <C> <C>
ASSETS:
Investments,
at amortized cost $22,888,395,976 $4,129,429,265 $1,277,388,825
Cash 564 710 711
Interest receivable 188,938,992 4,005,041 6,356,615
Other assets 485,906 1,963 91,331
- --------------------------------------------------------------------------------
Total Assets 23,077,821,438 4,133,436,979 1,283,837,482
- --------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 68,166,756 11,935,879 3,623,353
Management fees payable 8,097,012 1,509,886 464,924
Distribution fees payable 687,011 122,099 39,041
Payable for securities
purchased -- 44,220,000 --
Accrued expenses 232,712 168,598 57,636
- --------------------------------------------------------------------------------
Total Liabilities 77,183,491 57,956,462 4,184,954
- --------------------------------------------------------------------------------
Total Net Assets $23,000,637,947 $4,075,480,517 $1,279,652,528
================================================================================
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) $ 230,018,446 $ 40,754,639 $ 12,796,525
Capital paid in excess
of par value 22,772,073,969 4,034,725,878 1,266,856,003
Accumulated net realized
loss on security
transactions (1,454,468) -- --
- --------------------------------------------------------------------------------
Total Net Assets $23,000,637,947 $4,075,480,517 $1,279,652,528
================================================================================
Shares Outstanding 23,001,844,568 4,075,463,872 1,279,652,528
- --------------------------------------------------------------------------------
Net Asset Value $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Statements of Operations For the Year Ended December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cash Government Retirement
Portfolio Portfolio Portfolio
================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $1,239,233,547 $236,123,446 $68,256,275
- -------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 85,620,015 17,222,206 5,043,576
Distribution fees (Note 3) 20,587,880 3,949,617 1,135,894
Shareholder and system
servicing fees 18,066,913 2,073,684 1,471,331
Shareholder communications 2,683,096 209,999 246,118
Custody 658,929 154,951 66,010
Registration fees 221,873 123,264 166,261
Audit and legal 217,358 46,799 14,574
Directors' fees 129,006 35,000 21,352
Other 259,199 108,726 29,405
- -------------------------------------------------------------------------------
Total Expenses 128,444,269 23,924,246 8,194,521
- -------------------------------------------------------------------------------
Net Investment Income 1,110,789,278 212,199,200 60,061,754
- -------------------------------------------------------------------------------
Net Realized Gain From
Security Transactions 406,767 404,836 --
- -------------------------------------------------------------------------------
Increase in Net Assets
From Operations $1,111,196,045 $212,604,036 $60,061,754
===============================================================================
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Years Ended December 31,
<TABLE>
<CAPTION>
Cash Portfolio
----------------------------------
1995 1994
==============================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,110,789,278 $ 193,724,147
Net realized gains 406,767 --
- ------------------------------------------------------------------------------
Increase in Net Assets From Operations 1,111,196,045 193,724,147
- ------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS (NOTE 2) (1,109,614,260) (193,497,134)
- ------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Proceeds from sale of shares 95,078,500,639 25,932,015,959
Net asset value of shares issued in
connection with the transfer of
the net assets of the Smith Barney
Daily Dividend Fund Inc. (Note 6) -- 14,862,405,020
Net asset value of shares issued for
reinvestment of dividends 1,061,864,432 152,373,648
Cost of shares reacquired (90,733,030,654) (26,307,843,802)
- ------------------------------------------------------------------------------
Increase in Net Assets
From Fund Share Transactions 5,407,334,417 14,638,950,825
- ------------------------------------------------------------------------------
Increase in Net Assets 5,408,916,202 14,639,177,838
NET ASSETS:
Beginning of year 17,591,721,745 2,952,543,907
- ------------------------------------------------------------------------------
End of year $23,000,637,947 $17,591,721,745
==============================================================================
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Years Ended December 31,
<TABLE>
<CAPTION>
Government Portfolio
----------------------------------
1995 1994
==============================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 212,199,200 $ 40,273,266
Net realized gains 404,836 --
- -----------------------------------------------------------------------------
Increase in Net Assets From Operations 212,604,036 40,273,266
- -----------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS (NOTE 2) (211,997,883) (40,235,782)
- -----------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Proceeds from sale of shares 16,176,144,568 4,478,706,764
Net asset value of shares issued in
connection with the transfer of the
net assets of the Smith Barney
Government and Agencies Fund Inc.
(Note 6) -- 3,137,185,388
Net asset value of shares issued for
reinvestment of dividends 205,431,104 32,260,125
Cost of shares reacquired (16,036,689,142) (4,554,003,884)
- -----------------------------------------------------------------------------
Increase in Net Assets
From Fund Share Transactions 344,886,530 3,094,148,393
- -----------------------------------------------------------------------------
Increase in Net Assets 345,492,683 3,094,185,877
NET ASSETS:
Beginning of year 3,729,987,834 635,801,957
- -----------------------------------------------------------------------------
End of year $4,075,480,517 $3,729,987,834
=============================================================================
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Years Ended December 31,
<TABLE>
<CAPTION>
Retirement Portfolio
----------------------------------
1995 1994
==============================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 60,061,754 $ 40,875,476
- -----------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS (NOTE 2) (60,061,754) (40,875,476)
- -----------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Proceeds from sale of shares 4,330,327,073 3,903,151,175
Net asset value of shares issued for
reinvestment of dividends 58,412,308 37,087,661
Cost of shares reacquired (4,170,429,234) (4,063,219,480)
- -----------------------------------------------------------------------------
Increase (Decrease) in Net Assets
From Fund Share Transactions 218,310,147 (122,980,644)
- -----------------------------------------------------------------------------
Increase (Decrease) in Net Assets 218,310,147 (122,980,644)
NET ASSETS:
Beginning of year 1,061,342,381 1,184,323,025
- -----------------------------------------------------------------------------
End of year $1,279,652,528 $1,061,342,381
=============================================================================
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 from these amounts.
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
24
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
assets in excess of $18.0 billion; Government: 0.45% on the first $2.5 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 year ended December 31, 1995,
total Distribution Plan fees incurred were:
<TABLE>
<CAPTION>
Portfolio Class A Class C
===========================================
<S> <C> <C>
Cash $20,586,423 $1,457
Government 3,947,440 2,177
Retirement 1,135,894 --
===========================================
</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,
approximately $1,464,199 of unused 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. Transfer of Assets
On November 17, 1994 the net assets of the Smith Barney Daily Dividend Fund
Inc. ("SBDDF") and Smith Barney Government and Agencies Fund Inc. ("SBGAF")
were transferred into Smith Barney Money Funds, Inc.: Cash and Government
Portfolios, respectively, pursuant to an Agreement and Plan of Reorganization
dated July 26, 1994.
25
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
The transaction was structured for tax purposes to qualify as a tax-free
reorganization under the Internal Revenue Code. The SBDDF's and SBGAF's net
assets at that date were $14,862,405,020 and $3,137,185,388, respectively.
Directly after the transfer the combined net assets were $18,096,646,896 and
$3,779,716,739 for the Cash and Government Portfolios, respectively.
7. 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.
At December 31, 1995, 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 22,969,952,289 1,736,579 30,150,400 5,300
Government 4,037,515,755 1,458,792 5,375,830 31,113,495
Retirement 1,279,652,528 -- -- --
====================================================================
</TABLE>
26
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Transactions in shares of each Portfolio were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
Cash Portfolio December 31, 1995 December 31, 1994+
===========================================================================
<S> <C> <C>
Class A
Shares sold 94,844,353,231 25,930,115,865
Transfer from SBDDF (Note 6) -- 14,865,420,439
Shares issued on reinvestment 1,060,968,654 152,368,338
Shares redeemed (90,528,044,829) (26,307,773,316)
- -------------------------------------------------------------------------
Net Increase 5,377,277,056 14,640,131,326
=========================================================================
Class C
Shares sold 1,759,379 1,387,955
Shares issued on reinvestment 76,027 5,292
Shares redeemed (1,421,588) (70,486)
- -------------------------------------------------------------------------
Net Increase 413,818 1,322,761
=========================================================================
Class Y
Shares sold 232,388,029 507,139
Shares issued on reinvestment 819,469 --
Shares redeemed (203,564,237) --
- -------------------------------------------------------------------------
Net Increase 29,643,261 507,139
=========================================================================
Class Z
Shares sold -- 5,000
Shares issued on reinvestment 282 18
Shares redeemed -- --
- -------------------------------------------------------------------------
Net Increase 282 5,018
=========================================================================
</TABLE>
+ For Class C, Y and Z shares, transactions are for the period from inception
(November 10, 1994, December 29, 1994 and December 15, 1994, respectively) to
December 31, 1994.
27
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Government Portfolio December 31, 1995 December 31, 1994+
===========================================================================
<S> <C> <C>
Class A
Shares sold 16,082,844,648 4,363,424,514
Transfer from SBGAF (Note 6) -- 3,137,812,379
Shares issued on reinvestment 203,071,713 31,980,417
Shares redeemed (15,944,430,768) (4,470,695,392)
- -------------------------------------------------------------------------
Net Increase 341,485,593 3,062,521,918
=========================================================================
Class C*
Shares sold 112,576 30,251,826
Shares issued on reinvestment 117,703 132,329
Shares redeemed (2,732,614) (26,660,799)
- -------------------------------------------------------------------------
Net Increase (Decrease) (2,502,335) 3,723,356
=========================================================================
Class Y**
Shares sold 84,418,479 54,917,425
Shares issued on reinvestment 559,403 87,333
Shares redeemed (80,518,760) (56,143,993)
- -------------------------------------------------------------------------
Net Increase (Decrease) 4,459,122 (1,139,235)
=========================================================================
Class Z
Shares sold 8,768,865 30,112,999
Shares issued on reinvestment 1,682,285 60,046
Shares redeemed (9,007,000) (503,700)
- -------------------------------------------------------------------------
Net Increase 1,444,150 29,669,345
=========================================================================
Retirement Portfolio
=========================================================================
Class A
Shares sold 4,330,327,073 3,903,151,175
Shares issued on reinvestment 58,412,308 37,087,661
Shares redeemed (4,170,429,234) (4,063,219,480)
- -------------------------------------------------------------------------
Net Increase (Decrease) 218,310,147 (122,980,644)
=========================================================================
</TABLE>
* On November 7, 1994, the former Class B shares were renamed Class C shares.
** On November 7, 1994, the former Class C shares were renamed Class Y shares.
+ For Class Z shares, transactions are for the period from November 9, 1994
(inception date) to December 31, 1994.
28
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Class A
-------------------------------------------
Cash Portfolio 1995 1994 1993 1992 1991
==============================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Net investment income 0.054 0.037 0.026 0.033 0.055
Dividends from net investment
income (0.054) (0.037) (0.026) (0.033) (0.055)
- ------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Total Return 5.53% 3.73% 2.63% 3.31% 5.66%
- ------------------------------------------------------------------------------
Net Assets, End of Year
(in millions) $22,969 $17,590 $ 2,953 $ 2,841 $ 1,784
- ------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.62% 0.64% 0.64% 0.60% 0.52%
Net investment income 5.39 4.10 2.60 3.17 5.55
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
Class C Class Y
---------------- -----------------
Cash Portfolio 1995 1994(a) 1995 1994(b)
==============================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Net investment income 0.054 0.007 0.054 0.0004
Dividends from net investment income (0.054) (0.007) (0.054) (0.0004)
- ------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Total Return 5.53% 0.007%++ 5.50% 0.0004%++
- ------------------------------------------------------------------------------
Net Assets, End of Year (in millions) $1.7 $1.0 $30.2 $0.5
- ------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.62% 0.62%+ 0.51% 0.53%+
Net investment income 5.39 4.77+ 5.29 5.23+
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
Class Z
-----------------
Cash Portfolio 1995 1994(c)
==============================================================================
<S> <C> <C>
Net Asset Value, Beginning of Year $1.00 $1.00
- ------------------------------------------------------------------------------
Net investment income 0.055 0.006
Dividends from net investment income (0.055) (0.006)
- ------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00
- ------------------------------------------------------------------------------
Total Return 5.63% 0.006%++
- ------------------------------------------------------------------------------
Net Assets, End of Year (in millions) $0.005 $0.005
- ------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.52% 0.47%+
Net investment income 5.49 5.12+
==============================================================================
</TABLE>
(a) For the period from November 10, 1994 (inception date) to December 31, 1994.
(b) For the period from December 29, 1994 (inception date) to December 31, 1994.
(c) 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 the
total return for that period.
+ Annualized.
29
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Class A
-------------------------------------------
Government Portfolio 1995 1994 1993(a) 1992 1991
==============================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Net investment income 0.053 0.036 0.025 0.032 0.054
Dividends from net investment
income (0.053) (0.036) (0.025) (0.032) (0.054)
- ------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Total Return 5.45% 3.63% 2.55% 3.32% 5.57%
- ------------------------------------------------------------------------------
Net Assets, End of Year
(in millions) $4,038 $3,695 $ 636 $ 675 $ 394
- ------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.60% 0.61% 0.61% 0.55% 0.49%
Net investment income 5.31 4.03 2.53 3.15 5.43
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
Class C Class Y
---------------- -----------------
Government Portfolio 1995 1994 1995 1994
==============================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Net investment income 0.053 0.036 0.054 0.036
Dividends from net investment income (0.053) (0.036) (0.054) (0.036)
- ------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Total Return 5.46% 3.63% 5.55% 3.65%
- ------------------------------------------------------------------------------
Net Assets, End of Year (in millions) $1.5 $4.0 $5.4 $1.0
- ------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.60% 0.61% 0.50% 0.60%
Net investment income 5.36 3.78 5.51 3.58
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
Class Z
-----------------
Government Portfolio 1995 1994(b)
==============================================================================
<S> <C> <C>
Net Asset Value, Beginning of Year $1.00 $1.00
- ------------------------------------------------------------------------------
Net investment income 0.054 0.007
Dividends from net investment income (0.054) (0.007)
- ------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00
- ------------------------------------------------------------------------------
Total Return 5.56% 0.007%+
- ------------------------------------------------------------------------------
Net Assets, End of Year (in millions) $31.1 $30.0
- ------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.50% 0.51%+
Net investment income 5.42 4.93+
==============================================================================
</TABLE>
(a) Since no difference in expenses existed for Class A and C shares the
Government Portfolio for 1993, this information is identical for each class
of shares.
(b) 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
the total return for that period.
+ Annualized.
30
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Class A
-------------------------------------------
Retirement Portfolio 1995 1994 1993 1992 1991
==============================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Net investment income 0.053 0.036 0.026 0.032 0.054
Dividends from net investment
income (0.053) (0.036) (0.026) (0.032) (0.054)
- ------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------
Total Return 5.42% 3.67% 2.58% 3.26% 5.58%
- ------------------------------------------------------------------------------
Net Assets, End of Year
(in millions) $1,280 $1,061 $1,184 $1,030 $972
- ------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.72% 0.70% 0.70% 0.64% 0.57%
Net investment income 5.28 3.57 2.55 3.21 5.44
==============================================================================
</TABLE>
31
<PAGE>
SMITH BARNEY MONEY FUNDS, INC.
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
The Smith Barney Money Funds, Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Smith Barney Money Funds, Inc. (comprising,
respectively, the Cash, Government and Retirement Portfolios) as of December 31,
1995, and the related statements of operations for the year then ended,
statements of changes in net assets for each of the years in the two-year period
then ended and the financial highlights for each of the years in the five-year
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian. As to securities
purchased but not received, we performed other appropriate auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting Smith Barney Money Funds, Inc. as of
December 31, 1995, the results of their operations for the year then ended, the
changes in their net assets for each of the years in the two-year period then
ended and the financial highlights for each of the years in the five-year period
then ended, in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
New York, New York
February 2, 1996
32
<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
SMITH BARNEY
- ------------
A Member of TravelersGroup[ART]
INVESTMENT MANAGER
Smith Barney Mutual Funds
Management Inc.
DISTRIBUTOR
Smith Barney Inc.
CUSTODIAN
PNC Bank
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
FD0858 2/96
