<PAGE>
[LOGO]
Smith Barney
Money
Funds, Inc.
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SEMI-ANNUAL REPORT
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June 30, 1998
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.(SM)
<PAGE>
[PHOTO] [PHOTO]
HEATH B. PHYLLIS
MCLENDON ZAHORODNY
Chairman Vice President and
Investment Officer
Smith Barney
Money
Funds, Inc.
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney Money
Funds, Inc. for the period ended June 30, 1998. In this report, we summarize the
period's prevailing economic and market conditions and outline our portfolio
strategy. A summary of performance and more detailed financial information can
be found in the appropriate sections that follow.
Performance Summary
The chart below shows 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, 1998.
Smith Barney Money Funds' Yields (Class A Shares)
<TABLE>
<CAPTION>
Portfolio Seven-Day Yield Effective Yield*
- --------------------------------------------------------------------------------
<S> <C> <C>
Cash 4.99% 5.12%
Government 4.95 5.07
Retirement 4.96 5.08
- --------------------------------------------------------------------------------
</TABLE>
Please note that your investment in 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
("NAV") of $1.00 per share.
Market Update and Outlook
Asset growth for the taxable money fund industry was once again stellar. The
industry grew 12.8% over the last six months. The Cash, Government and
Retirement Portfolios participated in that increase with a combined growth rate
of
- ----------
* The effective yield is calculated similarly to the seven-day yield but,
when annualized, the income earned by an investment in a Portfolio is
assumed to be reinvested. The effective yield will be slightly higher than
the seven day yield because of the compounding effect of the assumed
reinvestment.
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Smith Barney Money Funds, Inc. 1
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16.6%. As of June 30, 1998, the Cash Portfolio is the second largest money
fund in the mutual fund industry with assets of $34.3 billion. The Government
Fund is the third largest government money market fund with assets of $4.8
billion. We believe that the generous returns in the stock market have allowed
for large gains in disposable income that have been in turn, invested, in money
market funds.
As we enter the second half of 1998, the U.S. economy's expansion remains
intact. Strong consumer demand has fueled the U.S. economy for six straight
quarters with 3.0% or better Gross Domestic Product ("GDP") growth. (GDP
measures the total output of goods and services.) With little or no evidence of
inflation, the Federal Reserve Board ("Fed") has been able to keep the
federal-funds rate steady at 5.50% since March 1997. (The federal-funds rate is
the interest rate banks charge each other for overnight loans and is a closely
watched indicator of the direction of interest rates.) However, robust
employment gains and the fear of higher wage pressures have kept the Fed on
alert.
Counteracting strong U.S. economic growth are pressing questions from abroad.
The Asian crisis (i.e., economic and currency problems in Indonesia, Thailand,
South Korea and other parts of the region) has finally started to negatively
affect the U.S. trade balance. Moreover, Japan's severe banking problems will
not go away and the Japanese economy continues to teeter on the brink of
depression. In addition, the future of Russia's economy remains cloudy at best.
Due primarily to the extraordinary strength of the U.S. economy, Fed Chairman
Alan Greenspan shifted monetary policy from a neutral stance to a tightening
bias at the March 31, 1998 Federal Open-Market Committee Meeting. (The Federal
Open-Market Committee or FOMC, is the committee that sets interest rates and
credit policies for the Federal Reserve System.) However, the apparent lack of
inflation has given Chairman Greenspan the opportunity to take a "wait and see"
approach with respect to monetary policy. The major fear in the markets now is
that a pre-emptive strike versus inflation could cause serious ramifications in
the already unsettled Asian countries. Record inventory accumulation in the
first quarter of 1998 along with the problems abroad should help to moderate
U.S. economic growth and allow Greenspan to hold rates steady in the months
ahead.
Effective July 1, 1998, the Securities and Exchange Commission ("SEC") has
adopted new rules that tighten risk exposure and necessitate additional
monitoring of bank and insurance guarantees and obligor concentrations with
respect to asset-backed commercial paper. (Asset-backed commercial paper
reflects cash flows from various types of receivables, and is generally
accompanied by a partial guarantee.) All of our guarantors are rated either
A1/P1 or better by Moody's Investors Services, Inc. or Standard and Poor's
Ratings
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2 1998 Semi-Annual Report to Shareholders
<PAGE>
Service, two major credit reporting and bond rating agencies. Any concentrations
or obligors within asset-backed programs will meet the same stringent credit
standards as we generally employ before we make any purchase. We believe the new
SEC rules will further strengthen the overall quality of the money market fund
industry.
Investment Strategy
As noted, we think that many more months of strong U.S. economic growth or
higher-than-expected inflation numbers are necessary for the Fed to raise rates.
Therefore, we are taking advantage of the positively sloping yield curve and
targeting the average maturity at 80 days for the Cash Portfolio and 70 days for
the Government and Retirement Portfolios. (The yield curve shows the difference
between short- and long-term yields. A positively sloping yield curve means that
investors are being compensated with higher yields for the extra market risk
associated with owning longer-maturity securities.) Some of our banking and
corporate names were eliminated during the reporting period. As replacements, we
are planning to add some top-tier corporate names such as SBC Communications
Inc., GTE Corp, Ameritech Capital Funding Corp., and Province De Quebec to the
approved list.
In closing, thank you for investing in the Smith Barney Money Funds, Inc. We
look forward to continuing to help you pursue your financial goals.
Sincerely,
/s/ Heath B. Mclendon /s/ Phyllis M. Zahorodny
Heath B. McLendon Phyllis M. Zahorodny
Chairman Vice President and
Investment Officer
July 14, 1998
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Smith Barney Money Funds, Inc. 3
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<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited) June 30, 1998
============================================================================================================
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
U.S. AGENCIES AND INSTRUMENTALITIES -- 3.3%
$ 116,750,000 Federal Farm Credit Bank
matures 3/2/99 5.50% to 5.52% $ 116,648,255
75,073,000 Federal Home Loan Bank
matures 10/21/98 5.52 73,817,613
363,825,000 Federal Home Loan Mortgage Corp.
mature 7/2/98 to 4/30/99 5.50 to 5.70 361,999,844
586,150,000 Federal National Mortgage Corp.
mature 9/11/98 to 5/7/99 5.50 to 5.75 579,352,589
- ------------------------------------------------------------------------------------------------------------
TOTAL U.S. AGENCIES AND
INSTRUMENTALITIES
(Cost -- $1,131,818,301) 1,131,818,301
============================================================================================================
MEDIUM TERM NOTES -- 6.6%
50,000,000 Banc One Columbus NA
matures 5/11/99 5.74 49,975,286
300,000,000 Bank America National Trust & Savings
Association matures 7/22/98 to 7/23/98 5.50 300,000,448
100,000,000 Bank of New York
matures 5/26/99 5.80 99,913,687
150,000,000 Beta Finance, Inc.
mature 7/15/98 to 11/17/98 5.88 to 5.90 150,000,000
150,000,000 Centauri
mature 7/15/98 to 7/17/98 5.82 to 5.90 150,000,000
75,000,000 FCC National Bank
mature 8/24/98 to 1/7/99 5.52 to 5.75 74,995,013
50,000,000 First Chicago Corp.
matures 10/22/98 5.60 50,000,000
200,000,000 First Union National Bank
mature 7/21/98 to 12/23/98 5.50 to 5.62 200,000,000
150,000,000 Harris Trust
mature 7/10/98 to 8/7/98 5.54 to 5.58 149,999,193
405,000,000 Merrill Lynch & Co., Inc.
mature 7/22/98 to 6/28/99 5.68 to 5.88 404,985,713
300,000,000 NationsBank, NA
mature 7/6/98 to 11/6/98 5.52 to 5.70 300,000,000
221,000,000 Wachovia Bank
mature 7/2/98 to 12/2/98 5.50 to 5.62 221,000,000
133,900,000 Westpac
mature 12/11/98 to 12/16/98 5.90 to 5.93 133,892,115
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TOTAL MEDIUM TERM NOTES
(Cost -- $2,284,761,455) 2,284,761,455
============================================================================================================
</TABLE>
See Notes to Financial Statements.
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4 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
DOMESTIC CERTIFICATES OF DEPOSIT -- 3.6%
$ 25,000,000 Bank America National Trust &
Savings Association matures 10/19/98 5.60% $ 25,000,000
300,000,000 Chase Manhattan Bank
mature 8/10/98 to 5/12/99 5.55 to 5.80 299,921,835
100,000,000 Chase Manhattan Delaware
matures 8/17/98 5.57 100,000,000
260,000,000 Citibank
mature 8/26/98 to 9/17/98 5.53 to 5.56 260,003,476
50,000,000 First Union National Bank
matures 11/6/98 5.65 50,000,000
150,000,000 Harris Trust
mature 7/8/98 to 9/9/98 5.54 to 5.58 149,998,082
51,000,000 Morgan Guaranty
matures 8/6/98 5.51 51,009,660
50,000,000 National Bank of Detroit
matures 8/12/98 5.58 49,679,167
200,000,000 NationsBank, NA
mature 8/7/98 to 9/11/98 5.54 to 5.58 200,000,000
47,000,000 Republic National Bank of New York
matures 7/2/98 5.61 47,000,000
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TOTAL DOMESTIC CERTIFICATES
OF DEPOSIT
(Cost -- $1,232,612,220) 1,232,612,220
============================================================================================================
OTHER CERTIFICATES PROGRAM -- 0.9%
320,000,000 Standard Credit Card Trust Dakota
Certificate Program
mature 8/7/98 to 9/10/98
(Cost -- $317,521,232) 5.57 to 5.60 317,521,232
============================================================================================================
TIME DEPOSIT -- 4.4%
75,000,000 Bank America National Trust
Savings Association matures 7/10/98 5.55 75,000,000
100,000,000 Canadian Imperial Bank Commerce
matures 7/1/98 6.13 100,000,000
250,000,000 Chase Manhattan Bank
matures 7/1/98 6.25 250,000,000
339,981,000 First Chicago National Bank
matures 7/1/98 6.25 339,981,000
400,000,000 Paribas SA
matures 7/1/98 6.37 400,000,000
70,000,000 Societe Generale
matures 7/1/98 6.25 70,000,000
</TABLE>
See Notes to Financial Statements.
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Smith Barney Money Funds, Inc. 5
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
TIME DEPOSIT -- 4.4% (continued)
$ 120,000,000 Toronto Dominion
matures 7/1/98 6.50% $ 120,000,000
175,000,000 Westdeutsche Landesbank
matures 7/1/98 6.25 175,000,000
- ------------------------------------------------------------------------------------------------------------
TOTAL TIME DEPOSITS
(Cost -- $1,529,981,000) 1,529,981,000
============================================================================================================
COMMERCIAL PAPER -- 55.4%
300,000,000 Abbey National North America
mature 7/27/98 to 12/18/98 5.51 to 5.61 296,026,569
65,000,000 A.I. Credit
mature 7/9/98 to 11/10/98 5.50 to 5.63 64,508,644
130,000,000 Alliance & Leicester Bank
mature 7/8/98 to 1/4/99 5.55 to 5.68 127,526,742
150,000,000 American Express Credit Corp.
matures 7/6/98 5.54 to 5.57 149,884,792
45,000,000 American Home Products AC Acquisition
mature 7/10/98 to 8/18/98 5.53 to 5.58 44,789,417
410,000,000 Aspen Funding
mature 7/15/98 to 12/18/98 5.58 to 5.68 403,910,361
391,700,000 Asset Securitization Corp.
mature 7/1/98 to 9/3/98 5.53 to 5.60 389,291,351
600,000,000 Associates Corp. of North America
mature 7/6/98 to 9/9/98 5.55 to 5.66 596,605,611
80,000,000 BankAmerica Corp.
matures 8/24/98 5.51 79,356,800
25,000,000 Bank of America Canada
matures 7/6/98 5.67 25,000,000
50,000,000 Bank of Montreal
matures 8/10/98 5.58 49,694,333
60,000,000 Bank of New York
mature 7/8/98 to 8/19/98 5.50 to 5.54 59,811,311
240,385,000 Barton Capital Corp.
mature 7/9/98 to 7/23/98 5.56 to 5.62 239,800,482
250,000,000 BBL NA Inc.
mature 7/10/98 to 9/14/98 5.57 to 5.59 248,526,160
322,000,000 BCI Funding Corp.
mature 7/2/98 to 12/21/98 5.52 to 5.65 319,493,861
150,000,000 Bear, Stearns & Co.
mature 7/17/98 to 8/12/98 5.56 to 5.57 149,431,778
189,330,000 Bell Atlantic Financial Service
mature 7/20/98 to 7/27/98 5.53 to 5.60 188,675,895
116,000,000 Beta Finance, Inc.
mature 7/24/98 to 9/18/98 5.52 to 5.58 114,796,144
</TABLE>
See Notes to Financial Statements.
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6 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 55.4% (continued)
$ 250,000,000 Cades
mature 8/27/98 to 11/23/98 5.52% to 5.60% $ 247,099,472
500,000,000 Cafco
mature 7/17/98 to 9/25/98 5.54 to 5.60 496,779,035
59,500,000 Caisse Des Depots et Cos.
matures 8/4/98 5.56 59,190,369
50,000,000 Canadian Imperial Bank Commerce
matures 8/10/98 5.57 49,695,000
164,800,000 Canadian Wheat Board
mature 7/13/98 to 9/17/98 5.50 to 5.56 163,366,593
50,000,000 Cariplo Finance Inc.
matures 9/17/98 5.56 49,402,000
101,500,000 CC USA Inc.
mature 7/15/98 to 9/21/98 5.59 to 5.91 100,960,068
100,000,000 CCBP International Inc.
mature 7/15/98 to 10/26/98 5.56 to 5.63 99,004,569
200,086,000 Centric Capital Corp.
mature 7/13/98 to 9/18/98 5.58 to 5.62 198,905,659
50,000,000 Chase Manhattan Bank
matures 9/15/98 5.58 49,420,500
115,000,000 Ciesco
mature 7/27/98 to 8/17/98 5.56 to 5.60 114,313,881
200,000,000 CIT Group Holdings, Inc.
mature 7/30/98 to 11/24/98 5.59 to 5.64 197,486,306
50,000,000 Commerzbank US Finance
matures 7/24/98 5.57 49,823,028
50,000,000 Corporate Receivables Corp.
mature 7/8/98 to 7/22/98 5.55 to 5.56 49,893,639
50,000,000 Credit Agricole Indosuez
matures 8/11/98 5.55 49,689,653
185,000,000 Credit Suisse
matures 8/27/98 to 9/17/98 5.59 182,957,474
110,000,000 Credito Italiano Delaware, Inc.
mature 7/8/98 to 12/7/98 5.55 to 5.64 108,494,619
425,000,000 Cregem North America
mature 7/8/98 to 12/28/98 5.55 to 5.62 420,028,535
500,000,000 CXC Inc.
mature 7/7/98 to 9/14/98 5.55 to 5.60 497,160,267
338,705,000 Daimler-Benz North American Corp.
mature 7/24/98 to 10/20/98 5.54 to 5.61 335,484,988
</TABLE>
See Notes to Financial Statments.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 7
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 55.4% (continued)
$ 155,565,000 Delaware Funding Corp.
mature 7/15/98 to 7/21/98 5.58% to 5.59% $155,177,580
390,000,000 Den Danske Corp.
mature 8/10/98 to 12/17/98 5.51 to 5.68 383,896,387
150,000,000 Deutsche Bank Finance Inc.
mature 7/10/98 to 8/14/98 5.56 to 5.58 149,258,528
450,000,000 Diageo PLC
mature 7/29/98 to 12/21/98 5.50 to 5.62 442,141,299
400,000,000 Dresdner US Finance Inc.
mature 7/2/98 to 7/6/98 5.63 to 5.76 399,744,806
210,000,000 E.I. duPont De Nemours
mature 7/13/98 to 8/27/98 5.53 to 5.58 208,757,233
209,732,000 Enterprise Funding Corp.
mature 7/15/98 to 9/10/98 5.57 to 5.60 208,762,439
75,000,000 Falcon Asset Security Corp.
matures 7/23/98 to 7/24/98 5.60 74,736,972
32,510,000 Finnish Export Credit Ltd.
matures 7/31/98 5.70 32,360,454
50,000,000 Ford Credit Europe PLC
mature 8/13/98 to 8/24/98 5.56 to 5.57 49,628,840
225,000,000 Ford Motor Credit Co.
mature 7/6/98 to 7/10/98 5.54 to 5.56 224,737,382
700,000,000 General Electric Capital Corp.
mature 7/7/98 to 11/24/98 5.56 to 5.64 693,121,826
420,000,000 General Motors Acceptance Corp.
mature 7/6/98 to 8/5/98 5.56 to 5.59 419,356,297
225,000,000 Generale Bank
mature 7/2/98 to 11/2/98 5.53 to 5.67 222,562,008
157,525,000 Glaxo Holdings Inc.
mature 7/8/98 to 8/28/98 5.54 to 5.58 156,915,759
550,000,000 Goldman, Sachs & Co.
mature 7/2/98 to 2/18/99 5.56 to 5.71 541,546,597
161,500,000 GTE Corp.
mature 7/1/98 to 7/21/98 5.56 to 5.61 161,327,261
398,000,000 Halifax Building Society
mature 7/23/98 to 12/1/98 5.50 to 5.61 394,099,332
50,000,000 Household Finance Corp.
matures 7/7/98 5.58 49,953,583
300,000,000 IBM Credit Corp.
mature 7/7/98 to 9/3/98 5.53 to 5.57 299,258,681
341,800,000 International Lease Finance
mature 7/20/98 to 9/21/98 5.51 to 5.60 338,931,623
</TABLE>
See Notes to Financial Statements.
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8 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 55.4% (continued)
$ 200,000,000 International Nederlanden US Funding Corp.
mature 10/22/98 to 12/28/98 5.60% to 5.62% $ 195,247,500
565,767,000 J.P. Morgan & Co.
mature 7/2/98 to 12/10/98 5.52 to 5.65 561,570,948
150,000,000 Kingdom of Sweden
mature 8/26/98 to 11/2/98 5.51 to 5.62 148,224,167
171,400,000 Kitty Hawk
mature 7/22/98 to 9/21/98 5.59 to 5.61 170,277,484
50,000,000 Krediet Bank
mature 8/11/98 to 10/19/98 5.56 to 5.61 49,427,840
150,000,000 Lloyds Bank
mature 7/6/98 to 12/23/98 5.56 to 5.66 148,588,007
60,000,000 Lucent Technologies
matures 7/17/98 5.53 59,854,667
370,200,000 Merrill Lynch & Co. Inc.
mature 7/20/98 to 11/20/98 5.50 to 5.68 366,353,816
600,000,000 Morgan Stanley Dean Witter Discover
mature 7/9/98 to 10/28/98 5.50 to 5.81 596,350,650
135,000,000 National Australia Funding Delaware
mature 7/10/98 to 7/17/98 5.54 to 5.55 134,722,214
100,000,000 National Bank of Canada Finance USA
mature 7/8/98 to 8/17/98 5.58 to 5.61 99,586,528
200,000,000 NationsBank Corp.
mature 8/6/98 to 8/20/98 5.53 to 5.56 198,706,778
247,000,000 Norwest Corp.
mature 7/10/98 to 7/31/98 5.56 to 5.57 246,337,704
59,000,000 Oesterreische Kontrollbank
matures 11/20/98 5.61 57,729,337
73,000,000 Ontario Hydro
matures 7/7/98 5.53 72,933,692
60,500,000 Pfizer Inc.
mature 7/2/98 to 7/27/98 5.52 to 5.54 60,337,985
167,775,000 Preferred Receivable Funding
mature 7/8/98 to 8/10/98 5.58 to 5.60 167,146,894
284,200,000 Province de Quebec
mature 7/16/98 to 10/29/98 5.56 to 5.67 280,136,465
104,600,000 Province of British Columbia
mature 8/4/98 to 10/5/98 5.50 to 5.55 103,816,300
259,805,000 Quincy Capital Corp.
mature 7/15/98 to 8/21/98 5.58 to 5.65 258,311,751
261,716,000 Receivable Capital Corp.
mature 7/13/98 to 7/28/98 5.60 to 5.64 260,881,501
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 9
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 55.4% (continued)
$ 296,030,000 Rose Funding
mature 7/28/98 to 8/28/98 5.58% to 5.63% $ 294,575,065
60,000,000 Royal Bank of Canada
matures 8/3/98 5.50 59,705,200
125,000,000 Saint-Gobain Compagnie de
mature 8/25/98 to 12/21/98 5.58 to 5.61 122,676,444
110,000,000 San Paolo US Finance Inc.
mature 7/21/98 to 12/21/98 5.53 to 5.64 108,422,924
50,000,000 SBC Communications
matures 8/13/98 5.54 49,672,722
100,000,000 Siemans Corp.
matures 8/26/98 5.52 99,164,667
100,000,000 Societe Generale (New York)
matures 8/17/98 5.50 99,301,528
257,750,000 Svenska Handelsbanken
mature 8/6/98 to 12/18/98 5.52 to 5.62 254,968,888
150,000,000 Swedish Export Credit Corp.
mature 8/12/98 to 10/20/98 5.53 to 5.60 148,409,361
80,000,000 Toronto Dominion Holdings USA Inc.
mature 7/7/98 to 8/18/98 5.51 to 5.54 79,740,100
127,132,000 Transamerica Finance Corp.
mature 7/8/98 to 8/14/98 5.53 to 5.57 126,567,658
204,150,000 Union Bank of Switzerland
matures 8/4/98 to 8/5/98 5.56 203,071,686
17,000,000 USAA Capital Corp.
matures 7/17/98 5.55 16,958,218
115,000,000 Wachovia Bank
matures 7/6/98 to 7/24/98 5.55 114,690,985
235,000,000 Walt Disney Co.
matures 8/31/98 to 9/9/98 5.50 232,823,528
215,000,000 Westpac
mature 7/8/98 to 11/5/98 5.50 to 5.67 213,593,983
- ------------------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $19,133,445,978) 19,133,445,978
============================================================================================================
FOREIGN CERTIFICATES OF DEPOSIT -- 25.8%
122,000,000 Abbey National PLC
mature 8/21/98 to 10/26/98 5.58 to 5.61 122,000,874
150,000,000 ABN AMRO Bank (Canada)
mature 7/10/98 to 12/4/98 5.54 to 5.62 148,365,468
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
FOREIGN CERTIFICATES OF DEPOSIT -- 25.8% (continued)
$ 50,000,000 ABN AMRO Bank (Chicago)
matures 7/27/98 5.51% $ 50,000,351
80,000,000 ABN AMRO Bank N.V.
mature 8/25/98 to 12/21/98 5.51 to 5.62 80,002,022
125,000,000 Australia & New Zealand Bank
mature 7/7/98 to 12/29/98 5.62 to 5.66 125,004,063
375,000,000 Bank Austriengellschaft
mature 7/7/98 to 5/7/99 5.53 to 5.80 374,927,111
155,000,000 Bank Brussels Lambert
mature 8/18/98 to 9/1/98 5.58 to 5.59 155,001,153
175,000,000 Bank of Montreal
mature 7/7/98 to 8/20/98 5.54 to 5.58 175,000,000
325,000,000 Bank of Nova Scotia
mature 7/7/98 to 10/1/98 5.55 to 5.76 325,022,435
399,000,000 Banque National De Paris
mature 7/8/98 to 4/30/99 5.63 to 5.91 398,902,775
25,000,000 Banque National De Paris (San Francisco)
matures 12/18/98 5.60 25,001,148
525,000,000 Barclays Bank
mature 7/7/98 to 3/30/99 5.50 to 5.74 524,982,971
349,000,000 Bayerische Landesbank
mature 7/8/98 to 5/6/99 5.54 to 5.91 348,976,011
405,000,000 Bayerische Vereinsbank
mature 7/13/98 to 1/4/99 5.54 to 5.77 405,002,112
230,000,000 Canadian Imperial Bank Commerce
mature 7/7/98 to 6/14/99 5.54 to 5.76 229,977,754
135,000,000 Cariplo
mature 8/5/98 to 10/22/98 5.58 to 5.60 135,002,865
100,000,000 Commerzbank
mature 7/23/98 to 8/14/98 5.50 to 6.00 99,998,303
434,000,000 Credit Agricole Indosuez
mature 7/7/98 to 4/30/99 5.50 to 5.85 433,941,148
225,000,000 Creditanstalt Bankverein
mature 7/7/98 to 4/23/99 5.54 to 5.75 224,989,441
125,000,000 Credit Suisse First Boston
mature 3/25/99 to 5/7/99 5.70 to 5.86 125,000,000
125,000,000 Credito Italiano
mature 9/29/98 to 11/12/98 5.60 to 5.70 125,008,247
550,000,000 Deutsche Bank
mature 7/2/98 to 5/13/99 5.50 to 5.80 549,958,239
175,000,000 Dresdner Bank
mature 8/10/98 to 4/19/99 5.58 to 5.75 174,996,763
125,000,000 Generale Bank (New York)
mature 7/17/98 to 7/22/98 5.61 to 5.86 125,000,498
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 11
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
FOREIGN CERTIFICATES OF DEPOSIT -- 25.8% (continued)
$ 50,000,000 Halifax Building Society
matures 12/21/98 5.60% $ 50,002,336
200,000,000 Hessiche Landesbank
mature 12/11/98 to 1/19/99 5.60 to 5.98 200,004,269
89,000,000 International Nerderlanden Group
mature 9/14/98 to 11/20/98 5.59 to 5.68 88,994,401
50,000,000 Krediet Bank
matures 8/17/98 5.58 50,000,643
50,000,000 Lloyds Bank
matures 12/29/98 5.62 50,000,000
25,000,000 National Australia Bank
matures 8/26/98 5.52 25,000,378
226,500,000 National Bank of Canada
mature 12/11/98 to 5/19/99 5.60 to 5.80 226,461,283
265,000,000 National Westminster Bank PLC
mature 7/13/98 to 4/28/99 5.52 to 5.84 264,963,840
473,000,000 Rabobank
mature 7/29/98 to 5/5/99 5.51 to 5.80 472,937,053
200,000,000 Royal Bank of Canada
mature 12/11/98 to 4/30/99 5.75 to 5.98 199,946,117
200,000,000 San Paolo Bank
mature 7/6/98 to 5/5/99 5.55 to 5.85 199,960,902
25,000,000 Societe Generale
matures 8/25/98 5.60 24,997,706
504,344,000 Societe Generale (New York)
mature 7/1/98 to 6/22/99 5.52 to 5.89 504,168,420
25,000,000 Svenska Handelsbanken
matures 10/23/98 5.62 25,000,770
547,400,000 Swiss Bank Corp.
mature 7/2/98 to 6/11/99 5.54 to 5.85 547,218,647
250,000,000 Toronto Dominion
mature 7/27/98 to 6/15/99 5.50 to 5.75 249,982,187
225,000,000 Westdeutsche Landesbank
mature 7/8/98 to 10/20/98 5.55 to 5.90 224,999,948
- ------------------------------------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES
OF DEPOSIT (Cost -- $8,886,700,652) 8,886,700,652
============================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $34,516,840,838*) $34,516,840,838
============================================================================================================
</TABLE>
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
GOVERNMENT PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
U.S. OBLIGATIONS -- 0.3%
$ 15,000,000 U.S.Treasury Note
matures 8/31/98
(Cost -- $14,976,453) 5.74% $ 14,976,453
============================================================================================================
U.S. AGENCIES AND INSTRUMENTALITIES -- 98.4%
113,000,000 Federal Farm Credit Bank
mature 10/13/98 to 4/1/99 5.52 to 5.69 112,241,590
439,232,000 Federal Home Loan Bank
mature 7/13/98 to 5/5/99 5.40 to 5.75 435,989,702
2,028,569,000 Federal Home Loan Mortgage Corporation
mature 7/1/98 to 4/8/99 5.46 to 5.85 2,016,562,399
2,184,885,000 Federal National Mortgage Association
mature 7/15/98 to 5/6/99 5.42 to 5.75 2,160,049,094
- ------------------------------------------------------------------------------------------------------------
TOTAL U.S. AGENCIES AND
INSTRUMENTALITIES
(Cost -- $4,724,842,785) 4,724,842,785
============================================================================================================
REPURCHASE AGREEMENT -- 1.3%
61,946,000 Morgan Stanley Dean Witter Discover, 5.73% due 7/1/98;
Proceeds at maturity -- $61,955,860; (Fully collateralized
by U.S. Treasury Notes, 4.750% to 5.875% due 8/31/98 to
6/30/00;
Market value -- $63,205,796) (Cost -- $61,946,000) 61,946,000
============================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $4,801,765,238*) $4,801,765,238
============================================================================================================
</TABLE>
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 13
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
RETIREMENT PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
U.S. AGENCIES AND INSTRUMENTALITIES -- 0.8%
$ 11,000,000 Federal Home Loan Mortgage Corp.
matures 7/2/98
(Cost -- $10,998,350) 5.50% $ 10,998,350
============================================================================================================
DOMESTIC BANK OBLIGATIONS -- 2.7%
20,000,000 Bank of America
mature 7/13/98 to 2/17/99 5.52 to 5.70 19,981,683
17,850,000 Harris Bank
matures 7/10/98 5.55 17,850,000
- ------------------------------------------------------------------------------------------------------------
TOTAL DOMESTIC BANK OBLIGATIONS
(Cost -- $37,831,683) 37,831,683
============================================================================================================
DOMESTIC CERTIFICATES OF DEPOSIT -- 1.2%
10,000,000 Chase Manhattan Bank
matures 5/11/99 5.81 9,993,333
7,000,000 Morgan Guaranty
matures 7/28/98 5.84 6,999,802
- ------------------------------------------------------------------------------------------------------------
TOTAL DOMESTIC CERTIFICATES OF DEPOSIT
(Cost -- $16,993,135) 16,993,135
============================================================================================================
COMMERCIAL PAPER -- 64.1%
15,950,000 Abbey National PLC
matures 7/17/98 5.59 15,910,869
15,000,000 ABN AMRO Bank N.V.
matures 7/2/98 5.55 14,997,721
17,900,000 Alliance & Leicester Building Society
matures 7/8/98 5.55 17,880,961
30,000,000 Asset Securitization Corp.
mature 9/1/98 to 9/3/98 5.58 to 5.59 29,711,567
20,000,000 BankAmerica Corp.
mature 7/10/98 to 10/2/98 5.64 to 5.65 19,846,283
25,000,000 Bank Brussels Lambert
matures 9/9/98 5.58 24,732,153
25,000,000 Bank of Montreal
matures 7/20/98 5.56 24,927,325
30,000,000 BCI Funding Corp.
mature 9/2/98 to 12/14/98 5.59 to 5.61 29,400,042
30,000,000 Bear Stearns
mature 7/8/98 5.58 to 5.60 29,967,698
25,000,000 Canadian Imperial Bank of Commerce
matures 8/24/98 5.58 24,793,750
15,000,000 Cariplo Finance
matures 9/17/98 5.60 14,820,600
</TABLE>
See Notes to Financial Statement.
- --------------------------------------------------------------------------------
14 1998 Semi-Annual Report Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
RETIREMENT PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 64.1% (continued)
$ 15,000,000 Centric Capital Corp.
matures 7/1/98 5.56% $ 15,000,000
25,000,000 Chase Manhattan Bank
matures 7/23/98 5.56 24,915,819
18,000,000 Ciesco L.P.
matures 8/10/98 5.57 17,890,200
20,000,000 Creditanstalt Finance Inc
matures 7/7/98 5.55 19,981,767
37,900,000 Credito Italiano
mature 8/4/98 to 10/28/98 5.58 to 5.68 37,456,707
25,000,000 Cregem North America
mature 8/20/98 to 11/17/98 5.57 to 5.65 24,673,160
15,000,000 Diageo PLC
matures 7/6/98 5.55 14,988,604
25,000,000 Dresdner US Finance Inc.
matures 7/2/98 5.53 24,996,167
25,900,000 E.I. duPont De Nemours & Co.
matures 7/21/98 5.54 25,821,005
10,000,000 Finnish Export Credit Ltd.
matures 7/31/98 5.74 9,953,750
20,000,000 Ford Motor Credit
matures 8/13/98 5.57 19,868,133
30,000,000 General Electric Capital Corp.
mature 7/6/98 to 8/7/98 5.59 29,928,325
40,000,000 General Motors Acceptance Corp.
matures 7/1/98 6.50 40,000,000
30,000,000 Generale Bank
mature 8/14/98 to 12/4/98 5.58 to 5.65 29,458,258
42,900,000 Goldman, Sachs & Co.
mature 7/6/98 to 11/12/98 5.59 to 5.70 42,363,701
27,000,000 Halifax Building Society
matures 7/7/98 5.53 26,975,475
25,000,000 ING U.S. Funding
matures 9/9/98 5.58 24,732,639
35,000,000 J.P. Morgan & Co.
mature 8/13/98 to 10/01/98 5.57 to 5.60 34,695,208
10,000,000 Lloyds Bank
matures 7/6/98 5.66 9,992,361
35,000,000 Merrill Lynch
mature 7/30/98 to 10/15/98 5.59 to 5.64 34,668,794
15,000,000 Morgan Stanley
matures 7/29/98 5.55 14,937,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 15
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
RETIREMENT PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 64.1% (continued)
$ 21,000,000 National Australia Bank
matures 7/6/98 5.56% $ 20,983,842
12,000,000 NationsBank Corp.
matures 8/20/98 5.53 11,910,333
20,000,000 Preferred Receivable Funding
matures 8/18/98 5.61 19,851,733
20,000,000 Province De Quebec
matures 10/21/98 5.67 19,656,534
30,000,000 San Paolo US Finance Inc.
mature 7/8/98 to 12/21/98 5.56 to 5.64 29,715,345
15,000,000 Svenska Handelsbanken
matures 8/28/98 5.59 14,866,842
- ------------------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $887,270,671) 887,270,671
============================================================================================================
FOREIGN CERTIFICATES OF DEPOSIT -- 27.4%
32,000,000 Banque National De Paris
matures 10/5/98 to 12/4/98 5.64 32,001,520
13,900,000 Banque National Paris San Francisco
matures 7/27/98 5.53 13,899,942
40,000,000 Bank of Nova Scotia
mature 8/3/98 to 3/29/98 5.51 to 5.80 39,964,095
20,000,000 Barclays Bank
mature 10/5/98 to 10/30/98 5.55 to 5.60 20,004,597
25,000,000 Bayerische Vereinsbank
mature 8/17/98 to 2/2/99 5.57 to 5.61 24,999,424
5,000,000 Canadian Imperial Bank of Commerce
matures 8/11/98 5.90 4,999,796
15,000,000 Cariplo
matures 9/8/98 5.60 15,000,283
15,000,000 Citibank
matures 9/23/98 5.56 15,000,000
15,000,000 Commerzbank
matures 8/17/98 5.90 14,999,538
20,000,000 Credit Agricole Indosuez
mature 2/26/99 to 4/16/99 5.71 to 5.82 19,990,543
8,000,000 Credit Suisse
matures 10/21/98 5.67 8,001,742
20,000,000 Creditanstalt Bankverein
matures 7/6/98 5.57 20,000,055
10,000,000 Cregem North America
matures 9/3/98 5.59 9,999,504
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1998 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
============================================================================================================
Schedules of Investments (unaudited)(continued) June 30, 1998
============================================================================================================
RETIREMENT PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
============================================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 64.1% (continued)
$ 25,000,000 Deutsche Bank
mature 10/20/98 to 4/16/99 5.59% to 5.75% $ 25,000,947
25,000,000 Krediet Bank
matures 8/17/98 5.58 25,000,210
10,000,000 National Bank of Canada
matures 6/10/99 5.82 9,995,037
30,000,000 Rabobank Nederland N.V.
mature 10/5/98 to 4/20/99 5.70 to 5.75 29,993,169
34,000,000 Societe Generale
mature 8/25/98 to 5/5/99 5.54 to 5.85 33,997,425
17,000,000 Swiss Bank Corp.
mature 10/1/98 to 2/10/99 5.60 16,994,432
- ------------------------------------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES OF DEPOSIT
(Cost -- $379,842,259) 379,842,259
============================================================================================================
TIME DEPOSITS -- 3.0%
42,000,000 First National Bank Chicago
matures 7/1/98
(Cost -- $42,000,000) 6.25 42,000,000
============================================================================================================
REPURCHASE AGREEMENT -- 0.8%
10,493,000 Morgan Stanley Dean Witter Discover, 5.73% due 7/1/98;
Proceeds at maturity -- $10,494,670; (Fully collateralized
by U.S. Treasury Notes, 6.375% due 1/15/99;
Market value -- $10,710,295) (Cost -- $10,493,000) 10,493,000
============================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $1,385,429,098*) $1,385,429,098
============================================================================================================
</TABLE>
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 17
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================
Statements of Assets and Liabilities (unaudited) June 30, 1998
===============================================================================================
Cash Government Retirement
Portfolio Portfolio Portfolio
===============================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at amortized cost $ 34,516,840,838 $ 4,801,765,238 $ 1,385,429,098
Cash 591 948 218
Interest receivable 219,371,896 4,626,918 8,589,952
Other assets -- 656,662 --
- -----------------------------------------------------------------------------------------------
Total Assets 34,736,213,325 4,807,049,766 1,394,019,268
- -----------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 173,675,173 -- --
Dividends payable 74,598,205 10,447,534 3,026,294
Management fees payable 10,563,374 1,628,996 514,102
Distribution fees payable 965,072 96,651 40,140
Deferred compensation payable 159,083 26,625 10,167
Accrued expenses 2,486,520 290,949 40,041
- -----------------------------------------------------------------------------------------------
Total Liabilities 262,447,427 12,490,755 3,630,744
- -----------------------------------------------------------------------------------------------
Total Net Assets $ 34,473,765,898 $ 4,794,559,011 $ 1,390,388,524
===============================================================================================
NET ASSETS:
Capital Stock
(40,000,000,000,
10,000,000,000 and
5,000,000,000 shares
authorized, respectively;
par value $0.01 per share) $ 344,745,997 $ 47,945,424 $ 13,900,246
Capital paid in excess of par value 34,130,101,553 4,746,613,587 1,376,124,326
Undistributed net investment income -- -- 363,952
Accumulated net realized loss
from security transactions (1,081,652) -- --
- -----------------------------------------------------------------------------------------------
Total Net Assets $ 34,473,765,898 $ 4,794,559,011 $ 1,390,388,524
===============================================================================================
Shares Outstanding:
Class A 34,360,969,675 4,728,635,299 1,390,024,572
---------------------------------------------------------------------------------------------
Class L 327,650 233,832 --
---------------------------------------------------------------------------------------------
Class Y 110,864,403 8,473,935 --
---------------------------------------------------------------------------------------------
Class Z 2,437,975 57,199,301 --
---------------------------------------------------------------------------------------------
Net Asset Value, per class $1.00 $1.00 $1.00
===============================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statements of Operations (unaudited) June 30, 1998
================================================================================
For the Six Months Ended June 30, 1998
<TABLE>
<CAPTION>
Cash Government Retirement
Portfolio Portfolio Portfolio
================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 946,236,614 $ 134,846,671 $ 39,691,371
- --------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 65,148,635 10,273,714 3,007,520
Shareholder and system
servicing fees 17,211,593 1,131,593 884,754
Distribution fees (Note 3) 16,654,902 2,379,854 690,224
Shareholder communications 3,938,634 141,908 295,903
Registration fees 1,391,507 190,451 203,464
Custody 1,068,798 99,492 23,070
Directors' fees 148,648 13,618 4,500
Insurance 132,162 49,273 14,326
Audit and legal 53,253 25,845 15,845
Other 66,203 12,000 4,150
- --------------------------------------------------------------------------------
Total Expenses 105,814,335 14,317,748 5,143,756
- --------------------------------------------------------------------------------
Net Investment Income 840,422,279 120,528,923 34,547,615
- --------------------------------------------------------------------------------
Net Realized Gain (Loss) From
Security Transactions (4,030) 4,549 --
- --------------------------------------------------------------------------------
Increase in Net Assets
From Operations $ 840,418,249 $ 120,533,472 $ 34,547,615
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 19
<PAGE>
================================================================================
Statements of Changes in Net Assets
================================================================================
For the Six Months Ended June 30, 1998 (unaudited)
and the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Cash Portfolio 1998 1997
================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 840,422,279 $ 1,491,886,315
Net realized gain (loss) (4,030) 13,789
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 840,418,249 1,491,900,104
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS (NOTE 2) (840,364,027) (1,491,864,232)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Proceeds from sale of shares 80,167,449,072 133,949,259,558
Net asset value of shares issued
in connection with the transfer
of net assets of Common Sense
Money Market Fund (Note 7) 61,201,233 --
Net asset value of shares issued
in connection with the transfer
of net assets of the Smith Barney
Funds, Inc. -- Income Return
Account Portfolio (Note 8) -- 977,206
Net asset value of shares issued
for reinvestment of dividends 816,027,876 1,440,716,985
Cost of shares reacquired (77,463,743,537) (131,985,544,414)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 3,580,934,644 3,405,409,335
- --------------------------------------------------------------------------------
Increase in Net Assets 3,580,988,866 3,405,445,207
NET ASSETS:
Beginning of period 30,892,777,032 27,487,331,825
- --------------------------------------------------------------------------------
End of period $ 34,473,765,898 $ 30,892,777,032
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statements of Changes in Net Assets (continued)
================================================================================
For the Six Months Ended June 30, 1998 (unaudited)
and the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Government Portfolio 1998 1997
================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 120,528,923 $ 225,000,522
Net realized gain 4,549 1,014
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 120,533,472 225,001,536
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS (NOTE 2) (120,533,472) (225,001,536)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Proceeds from sale of shares 9,234,364,888 16,950,826,473
Net asset value of shares issued
for reinvestment of dividends 118,441,807 218,982,359
Cost of shares reacquired (9,189,089,823) (16,981,687,366)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 163,716,872 188,121,466
- --------------------------------------------------------------------------------
Increase in Net Assets 163,716,872 188,121,466
NET ASSETS:
Beginning of period 4,630,842,139 4,442,720,673
- --------------------------------------------------------------------------------
End of period $ 4,794,559,011 $ 4,630,842,139
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 21
<PAGE>
================================================================================
Statements of Changes in Net Assets (continued)
================================================================================
For the Six Months Ended June 30, 1998 (unaudited)
and the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Retirement Portfolio 1998 1997
================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 34,547,615 $ 67,588,831
Net realized gain -- 4,875
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 34,547,615 67,593,706
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS (NOTE 2) (34,183,663) (67,593,706)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Proceeds from sale of shares 2,649,084,729 5,002,210,790
Net asset value of shares issued
for reinvestment of dividends 33,673,978 66,161,619
Cost of shares reacquired (2,659,854,169) (5,056,269,867)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 22,904,538 12,102,542
- --------------------------------------------------------------------------------
Increase in Net Assets 23,268,490 12,102,542
NET ASSETS:
Beginning of period 1,367,120,034 1,355,017,492
- --------------------------------------------------------------------------------
End of period $ 1,390,388,524 $ 1,367,120,034
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
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
accounted for 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, which approximates 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 by 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
Mutual Management Corp. ("MMC"), a subsidiary of Salomon Smith Barney Holdings,
Inc. ("SSBH"), acts as investment manager to the Fund. As compensation for its
services, each Portfolio pays MMC a daily fee calculated at the following rates:
Cash Portfolio: 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 Portfolio: 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 Portfolio: 0.45% on the first $1.0 billion of average daily
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 23
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
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 SSBH, for assistance in distributing Class A
and L shares, calculated at an annual rate of 0.10% of average daily net assets
of each class, respectively. For the six months ended June 30, 1998, total
Distribution Plan fees incurred were:
<TABLE>
<CAPTION>
Portfolio Class A Class L
================================================================================
<S> <C> <C>
Cash $19,527,382 $539
Government 2,776,413 199
================================================================================
</TABLE>
All officers and one Director of the Fund are employees of SB.
4. Capital Loss Carryforward
At December 31, 1997, the Cash Portfolio had, for Federal tax purposes,
approximately $1,344,000 of capital loss carryforwards available to offset
future capital gains. 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. The amount and expiration of the carryforwards are indicated below.
Expiration occurs on December 31 of the year indicated:
<TABLE>
<CAPTION>
2000 2001
================================================================================
<S> <C> <C>
Carryforward Amounts $213,000 $1,131,000
================================================================================
</TABLE>
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 L 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. Effective June 12, 1998, the Fund adopted the
renaming of existing Class C shares as Class L shares.
- --------------------------------------------------------------------------------
24 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
Transactions in shares of each Portfolio were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
Cash Portfolio June 30, 1998 December 31, 1997
================================================================================
<S> <C> <C>
Class A
Shares sold 79,917,038,607 133,360,262,023
Net asset value of shares issued
in connection with the transfer
of net assets of the Common Sense
Money Market Fund (Note 7) 61,201,233 --
Net asset value of shares issued
in connection with the transfer
of net assets of the Smith Barney
Funds, Inc. -- Income Return
Account Portfolio (Note 8) -- 977,206
Shares issued on reinvestment 814,507,391 1,436,817,723
Shares redeemed (77,259,437,807) (131,404,913,110)
- --------------------------------------------------------------------------------
Net Increase 3,533,309,424 3,393,143,842
================================================================================
Class L*
Shares sold 331,120 1,015,538
Shares issued on reinvestment 27,964 103,407
Shares redeemed (2,047,306) (1,255,407)
- --------------------------------------------------------------------------------
Net Decrease (1,688,222) (136,462)
================================================================================
Class Y
Shares sold 247,188,156 587,981,997
Shares issued on reinvestment 1,429,038 3,795,560
Shares redeemed (201,735,858) (579,375,897)
- --------------------------------------------------------------------------------
Net Increase 46,881,336 12,401,660
================================================================================
Class Z
Shares sold 2,891,189 --
Shares issued on reinvestment 63,483 295
Shares redeemed (522,566) --
- --------------------------------------------------------------------------------
Net Increase 2,432,106 295
================================================================================
</TABLE>
* On June 12, 1998, Class C shares were renamed Class L shares.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 25
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
Government Portfolio June 30, 1998 December 31, 1997
================================================================================
<S> <C> <C>
Class A
Shares sold 9,175,268,205 16,638,043,109
Shares issued on reinvestment 116,751,108 215,119,151
Shares redeemed (9,135,068,169) (16,634,487,380)
- -------------------------------------------------------------------------------
Net Increase 156,951,144 218,674,880
================================================================================
Class L*
Shares sold 9,912 45,838
Shares issued on reinvestment 9,251 36,492
Shares redeemed (286,865) (562,515)
- -------------------------------------------------------------------------------
Net Decrease (267,702) (480,185)
================================================================================
Class Y
Shares sold 49,724,404 293,187,265
Shares issued on reinvestment 261,492 1,331,017
Shares redeemed (48,941,568) (338,961,831)
- -------------------------------------------------------------------------------
Net Increase (Decrease) 1,044,328 (44,443,549)
================================================================================
Class Z
Shares sold 9,362,367 19,550,261
Shares issued on reinvestment 1,419,956 2,495,699
Shares redeemed (4,793,221) (7,675,640)
- -------------------------------------------------------------------------------
Net Increase 5,989,102 14,370,320
================================================================================
Retirement Portfolio
================================================================================
Class A
Shares sold 2,649,084,729 5,002,210,790
Shares issued on reinvestment 33,673,978 66,161,619
Shares redeemed (2,659,854,169) (5,056,269,867)
- -------------------------------------------------------------------------------
Net Increase 22,904,538 12,102,542
================================================================================
</TABLE>
* On June 12, 1998, Class C shares were renamed Class L shares.
- --------------------------------------------------------------------------------
26 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
7. Transfer of Net Assets
On January 5, 1998, the Cash Portfolio acquired the assets and certain
liabilities of the Common Sense Money Market Fund ("CSMFM"), in a taxable
transaction pursuant to a plan of reorganization approved by CSMFM shareholders
on December 23, 1997. Total shares issued by the Cash Portfolio and the total
net assets of CSMFM and the Cash Portfolio on the date of the transfer were as
follows:
<TABLE>
<CAPTION>
Shares Total Net Total Net
Acquired Issued by the Assets of Assets of
Fund Cash Portfolio CSMFM Cash Portfolio
================================================================================
<S> <C> <C> <C>
CSMFM 61,201,233 $61,201,233 $31,076,861,519
================================================================================
</TABLE>
The net assets of the Cash Portfolio immediately after the transfer were
$31,138,062,752.
8. Transfer of Net Assets
On December 5, 1997, the Cash Portfolio acquired the assets and certain
liabilities of the Smith Barney Funds, Inc. -- Income Return Account Portfolio
("IRAP"), in a taxable transaction pursuant to a plan of reorganization approved
by IRAP shareholders on November 19, 1997. Total shares issued by the Cash
Portfolio and the total net assets of IRAP and the Cash Portfolio on the date of
the transfer were as follows:
<TABLE>
<CAPTION>
Shares Total Net Total Net
Acquired Issued by the Assets of Assets of
Fund Cash Portfolio IRAP Cash Portfolio
================================================================================
<S> <C> <C> <C>
IRAP 977,206 $977,206 $31,595,186,434
================================================================================
</TABLE>
The net assets of the Cash Portfolio immediately after the transfer were
$31,596,163,640.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 27
<PAGE>
================================================================================
Financial Highlights
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------------------------
Cash Portfolio 1998(1) 1997 1996 1995 1994 1993
===============================================================================================================================
<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 0.025 0.050 0.050 0.054 0.037 0.026
Dividends from
net investment income (0.025) (0.050) (0.050) (0.054) (0.037) (0.026)
- -------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------------------
Total Return 2.51%++ 5.12% 4.98% 5.53% 3.73% 2.63%
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (billions) $34 $31 $27 $23 $18 $3
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.64%+ 0.64% 0.62% 0.62% 0.64% 0.64%
Net investment income 5.02+ 5.01 4.87 5.39 4.10 2.60
===============================================================================================================================
<CAPTION>
Class L(2)
------------------------------------------------------------------------------------
Cash Portfolio 1998(1) 1997 1996 1995 1994(3)
===============================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.025 0.051 0.050 0.054 0.007
Dividends from
net investment income (0.025) (0.051) (0.050) (0.054) (0.007)
- -------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------------------
Total Return 2.54%++ 5.17% 4.98% 5.53% 0.70%++
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $328 $2,016 $2,152 $1,737 $1,323
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.59%+ 0.59% 0.62% 0.62% 0.62%+
Net investment income 5.09+ 5.05 4.87 5.39 4.77+
===============================================================================================================================
<CAPTION>
Class Y
------------------------------------------------------------------------------------
Cash Portfolio 1998(1) 1997 1996 1995 1994(4)
===============================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.026 0.052 0.051 0.054 0.0004
Dividends from
net investment income (0.026) (0.052) (0.051) (0.054) (0.0004)
- -------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------------------
Total Return 2.62%++ 5.32% 5.09% 5.50% 0.40%++
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $111 $64 $52 $30 $0.5
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.43%+ 0.43% 0.52% 0.51% 0.53%+
Net investment income 5.23+ 5.22 4.97 5.29 5.23+
===============================================================================================================================
</TABLE>
(1) For the six months ended June 30, 1998 (unaudited).
(2) On June 12, 1998, Class C shares were renamed Class L shares.
(3) For the period from November 10, 1994 (inception date) to December 31,
1994.
(4) For the period from December 29, 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.
- --------------------------------------------------------------------------------
28 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class Z
----------------------------------------------------------------------------------
Cash Portfolio 1998(1) 1997 1996 1995 1994(2)
=============================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income 0.026 0.052 0.051 0.055 0.006
Dividends from
net investment income (0.026) (0.052) (0.051) (0.055) (0.006)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------
Total Return 2.62%++ 5.33% 5.06% 5.63% 0.60%++
- -----------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $2,438 $6 $6 $5 $5
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.46%+ 0.44% 0.53% 0.52% 0.47%+
Net investment income 5.62+ 5.21 4.96 5.49 5.12+
=============================================================================================================================
<CAPTION>
Class A
----------------------------------------------------------------------------------
Government Portfolio 1998(1) 1997 1996 1995 1994 1993(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 0.025 0.049 0.048 0.053 0.036 0.025
Dividends from
net investment income (0.025) (0.049) (0.048) (0.053) (0.036) (0.025)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------
Total Return 2.49%++ 5.04% 4.89% 5.45% 3.63% 2.55%
- -----------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (billions) $5 $5 $4 $4 $4 $1
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.59%+ 0.61% 0.61% 0.60% 0.61% 0.61%
Net investment income 4.99+ 4.92 4.78 5.31 4.03 2.53
=============================================================================================================================
<CAPTION>
Class L(4)(5)
----------------------------------------------------------------------------------
Government Portfolio 1998(1) 1997 1996 1995 1994
=============================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income 0.025 0.049 0.048 0.053 0.036
Dividends from
net investment income (0.025) (0.049) (0.048) (0.053) (0.036)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------
Total Return 2.50%++ 5.04% 4.89% 5.46% 3.63%
- -----------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $234 $502 $982 $1,459 $3,961
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.59%+ 0.61% 0.61% 0.60% 0.61%
Net investment income 4.99+ 4.90 4.78 5.36 3.78
=============================================================================================================================
</TABLE>
(1) For the six months ended June 30, 1998 (unaudited).
(2) For the period from November 15, 1994 (inception date) to December 31,
1994.
(3) Since no difference in expenses existed for Class A, L and Y shares of the
Government Portfolio for 1993, this information is identical for each class
of shares.
(4) The inception date for Class L shares is March 5, 1993.
(5) On June 12, 1998, Class C shares were renamed Class L shares.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 29
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class Y(2)
---------------------------------------------------------------------------------------
Government Portfolio 1998(1) 1997 1996 1995 1994(3)
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.025 0.050 0.049 0.054 0.036
Dividends from
net investment income (0.025) (0.050) (0.049) (0.054) (0.036)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return 2.55%++ 5.14% 4.99% 5.55% 3.65%
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $8,475 $7,430 $51,873 $5,376 $917
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.49%+ 0.51% 0.51% 0.50% 0.60%
Net investment income 5.07+ 4.98 4.88 5.51 3.58
===================================================================================================================================
<CAPTION>
Class Z
---------------------------------------------------------------------------------------
Government Portfolio 1998(1) 1997 1996 1995 1994(4)(5)
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.025 0.050 0.049 0.054 0.007
Dividends from
net investment income (0.025) (0.050) (0.049) (0.054) (0.007)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return 2.55%++ 5.14% 4.99% 5.56% 0.70%++
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $57 $51 $37 $31 $30
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.49%+ 0.51% 0.51% 0.50% 0.51%+
Net investment income 5.08+ 5.03 4.88 5.42 4.93+
===================================================================================================================================
<CAPTION>
Class A
---------------------------------------------------------------------------------------
Retirement Portfolio 1998(1) 1997 1996 1995 1994 1993
===================================================================================================================================
<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 0.025 0.049 0.048 0.053 0.036 0.026
Dividends from
net investment income (0.025) (0.049 (0.048) (0.053) (0.036) (0.026)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return 2.48%++ 5.03% 4.86% 5.42% 3.67% 2.58%
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $1,390 $1,367 $1,355 $1,280 $1,061 $1,184
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.74%+ 0.71% 0.71% 0.72% 0.70% 0.70%
Net investment income 4.99+ 4.92 4.75 5.28 3.57 2.55
===================================================================================================================================
</TABLE>
(1) For the six months ended June 30, 1998 (unaudited).
(2) The inception date for Class Y shares is October 28, 1993.
(3) On November 7, 1994, the former Class C shares were renamed as Class Y
shares.
(4) For the period from November 9, 1994 (inception date) to December 31, 1994.
(5) On November 7, 1994, the former Class Y shares were renamed as Class Z
shares.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
30 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Additional Shareholder Information (unaudited)
================================================================================
On March 9, 1998, a special meeting of shareholders of the Fund was held for the
purpose of voting on the following matters:
1. To elect Directors of the Fund; and
2. To approve or disapprove the reclassification, modification and/or
elimination of certain fundamental investment policies.
The results of the vote on Proposal 1 were as follows:
<TABLE>
<CAPTION>
Shares Voted Percentage Shares Voted Percentage
Name of Directors For Shares Voted Against Shares Voted
===============================================================================================
<S> <C> <C> <C> <C>
Donald R. Foley 18,263,787,910.365 96.800% 603,735,474.755 3.200%
Paul Hardin 18,286,836,891.365 96.922 580,686,493.755 3.078
Heath B. McLendon 18,292,038,763.375 96.950 575,484,621.745 3.050
Roderick C. Rasmussen 18,273,216,574.365 96.850 594,306,810.755 3.150
John P. Toolan 18,287,545,987.335 96.926 579,977,397.785 3.074
===============================================================================================
</TABLE>
Proposal 2 requested that shareholders approve certain changes to the
fundamental policies of the Fund in order to modernize them in view of certain
regulatory, business or industry developments that have occurred since original
adoption of these policies by the Fund. The following chart demonstrates that
all proposals were approved by shareholders.
Please note that "M" indicates a modification of the policy; "E" indicates the
elimination of the policy; and "R" indicates the reclassification of the policy
from fundamental (which would require shareholder approval to change) to
non-fundamental (which can be changed by a vote of the Board of Trustees).
<TABLE>
<CAPTION>
Cash, Government
and Retirement
Portfolios
================================================================================
<S> <C>
M Diversification Approved
- --------------------------------------------------------------------------------
M Borrowing Approved
- --------------------------------------------------------------------------------
E Ability to Pledge Assets Approved
- --------------------------------------------------------------------------------
M Lending by the Fund Approved
- --------------------------------------------------------------------------------
R Margin and Short Sales Approved
- --------------------------------------------------------------------------------
M Real Estate and Commodities Approved
- --------------------------------------------------------------------------------
R Restricted and Illiquid Securities Approved
- --------------------------------------------------------------------------------
R Purchases of Securities of Other Investment Companies Approved
- --------------------------------------------------------------------------------
R Exercising Control or Management Approved
- --------------------------------------------------------------------------------
R Investing in Oil, Gas and Mineral Exploration Approved
- --------------------------------------------------------------------------------
R Puts, Calls and Combinations Thereof Approved
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 31
<PAGE>
================================================================================
Additional Shareholder Information (unaudited) (continued)
================================================================================
The information below reports the lowest percentage of shares voting for the
proposals, the highest percentage of shares voting against and abstaining by
shareholders of the Fund on all proposals.
<TABLE>
<CAPTION>
Cash Portfolio
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
======================================================================================================
<S> <C> <C> <C> <C> <C>
14,035,433,186.926 88.557% 487,786,317.900 3.077% 1,325,878,358.894 8.366%
======================================================================================================
<CAPTION>
Government Portfolio
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
======================================================================================================
<S> <C> <C> <C> <C> <C>
2,036,513,417.080 86.940% 110,887,522.200 4.734% 195,024,730.770 8.326%
======================================================================================================
<CAPTION>
Retirement Portfolio
Percentage Percentage Percentage
Shares Voted of Shares Shares Voted of Shares Shares of Shares
For Voted Against Voted Abstaining Abstained
======================================================================================================
<S> <C> <C> <C> <C> <C>
594,961,438.160 87.278% 28,170,032.930 4.132% 58,555,395.010 8.590%
======================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
32 1998 Semi-Annual Report to Shareholders
<PAGE>
Smith Barney SMITH BARNEY
Money ------------
Funds, Inc.
A Member of TravelersGroup [LOGO]
Directors Investment Manager
Donald R. Foley Mutual Management Corp.
Paul Hardin
Heath B. McLendon, Chairman Distributors
Roderick C. Rasmussen Smith Barney Inc.
John P. Toolan PFS Distributor, Inc.
Joseph H. Fleiss, Emeritus Custodian
C. Richard Youngdahl, Emeritus PNC Bank, N.A.
Officers Shareholder
Heath B. McLendon Servicing Agent
President and First Data Investor Services Group, Inc.
Chief Executive Officer P.O. Box 9134
Boston, MA 02205-9134
Lewis E. Daidone
Senior Vice President
and Treasurer This report is submitted for the general
information of the shareholders of Smith
Phyllis M. Zahorodny Barney Money Funds, Inc. It is not
Vice President and authorized for distribution to
Investment Officer prospective investors unless accompanied
or preceded by a current Prospectus for
Martin R. Hanley the Fund, which contains information
Vice President concerning the Fund's investment
policies and expenses as well as other
Irving P. David pertinent information.
Controller
Christina T. Sydor Smith Barney
Secretary Money Funds, Inc.
388 Greenwich Street
New York, New York 10013
www.smithbarney.com
FD0622 8/98
