<PAGE>
SBMF IRAs: It's About Time...
$2,000 in 2000
SMITH BARNEY MONEY FUNDS, INC.
ANNUAL REPORT
DECEMBER 31, 1999
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
A Message from the Chairman
[PHOTO]
HEATH B.
MCLENDON
Chairman
Dear Shareholder:
The globalization of securities markets continues to accelerate. Economic growth
picked up in Europe and Asia in 1999, with a great deal of corporate
restructuring taking place. A year ago, a major topic of discussion and possible
concern was the introduction of the Euro. (The Euro is the single currency of
the European Monetary Union that was adopted by Belgium, Germany, Spain, France,
Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland on
January 1, 1999.)
Roughly a year later, the introduction of the Euro can be viewed as a success,
fostering lower inflation and interest rates throughout Western Europe.
Moreover, the Euro has contributed to the consolidation of businesses and the
creation of even stronger and more competitive European companies.
Last year, Asia was reeling under the impact of currency and banking problems,
and Japan was mired in economic stagnation. Today, Asia, and particularly
Japan,are experiencing economic rebounds.
The globalization of financial markets has also continued as the New York Stock
Exchange and NASDAQ continue to add more foreign stocks for trading. Investors
have more investment options today than ever before as trading hours expand.
The Internet age has dawned. Increasingly sophisticated financial transactions
are being handled electronically with the click of a "mouse" regardless of
whether you are in New York, Buenos Aires or Timbuktu. Although near-term issues
persist, we believe that the development of the "Information Superhighway"will
remain a powerful driver of share prices.
The Internet is gaining millions of users monthly and many of these people will
become active on-line consumers. Moreover, Dell, a global computer systems
company, estimates that 15% of all U.S. Gross Domestic Product ("GDP") could
soon come from Internet electronic commerce. There is no shortage of companies
willing to provide the systems and services necessary to facilitate
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 1
<PAGE>
online transactions. We expect e-commerce to represent an outstanding investment
opportunity as companies attempt to increase their productivity through online
sourcing and more direct distribution. E-commerce generally conjures up images
of consumers buying books or smaller items on the Internet; however,
business-to-business e-commerce is expanding as well. Traditional industrial
manufacturing companies are aggressively moving toward e-commerce as a means to
boost efficiency.
While the e-commerce revolution is already booming in the U.S., the
international markets present enormous opportunities. Internet penetration is
much lower overseas than in the United States. With the rebound in global growth
and Asia emerging from its slump, we expect that other regions of the world may
begin to catch up with the United States in an effort to become more efficient
and more competitive.
Now that the celebration about the start of a new century is over, a fact that
everyone needs to address is the likelihood that we will all retire in this
century. A fitting New Year's resolution may be to set up or add to an existing
IRA. Call your Salomon Smith Barney Financial Consultant today to find out why
this could be an appropriate time for you to open up an IRA. As the inserted
mailer discusses,the most costly IRA mistake could be waiting to start investing
in one.
Please see the following performance and market update from Portfolio Manager
Phyllis Zahorodny. We remain committed to providing our shareholders with
competitive performance in the new century and helping to make your retirement a
happy and successful one.
Sincerely,
/s/ Heath B. McLendon
Heath B. McLendon
Chairman
- --------------------------------------------------------------------------------
2 1999 Annual Report to Shareholders
<PAGE>
Smith Barney Money Funds, Inc.
[PHOTO]
PHYLLIS M.
ZAHORODNY
Vice President
We are pleased to provide the annual report for the Smith Barney Money Market
Funds, Inc. ("Funds") for the year ended December 31, 1999. 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 Market Funds for the seven-day
period ended December 31, 1999.
Smith Barney Money Market Funds' Yields (Class A Shares)
Portfolio Seven-Day Yield Effective Yield1
- --------------------------------------------------------------------------------
Cash 5.18% 5.32%
Government 4.92 5.04
Retirement 5.21 5.34
- --------------------------------------------------------------------------------
Please note that an investment in any of the funds is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in any of the funds.
Market Update and Outlook
The overnight federal funds rate rose 75 basis points during 1999 and the
short-term yield curve steepened by 150 basis points.2 During the last twelve
months, one-year certificates of deposits ("CDs") rose from 5.00% in January 1,
1999 to 6.50% as of December 31, 1999.
- ------------
1 The seven-day effective yield is calculated similarly to the seven-day
yield but, when annualized, the income earned by an investment in the Fund
or the class is assumed to be reinvested. The effective yield will be
slightly higher than the yield because of the compounding effect of the
assumed reinvestment.
2 The federal funds rate is the interest rate charged by banks with excess
reserves at the Federal Reserve district banks to banks needing overnight
loans to meet reserve requirements. The yield curve is a graphical
depiction of the relationship between the yield on bonds of the same credit
quality but different maturities. A basis point is the smallest measure
used in quoting yields. One basis point is 0.01%, or one one-hundredth of a
percent of yield.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 3
<PAGE>
In our view, robust economic growth should prompt the Federal Reserve Board
("Fed") to continue to tighten monetary policy in 2000.3 We think that many
investors expect several tightenings in 25 basis point increments totaling 75
basis points. However, we think that Fed Chairman Alan Greenspan will do
whatever is necessary to slow down economic growth to a more sustainable pace.
In fact, further rate increases beyond 75 basis points are very possible. Higher
inflation, which could come from higher commodity prices, tight labor markets
and rising overseas growth will affect the pace of future Fed tightenings.
Investment Objective
Each fund seeks maximum current income and preservation of capital.
Government Portfolio
The fund invests exclusively in U.S. government obligations, including mortgage-
backed securities and related repurchase agreements.
Cash and Retirement Portfolio
Each fund invests in high quality U.S. dollar denominated short-term debt
securities. These may include obligations issued by U.S. and foreign banks, the
U.S. government, its agencies or instrumentalities, U.S. states and
municipalities and U.S. and foreign corporate issuers. Each fund will invest at
least 25% of its assets in obligations of domestic and foreign banks. Either the
principal amount of each obligation must be fully insured by the FDIC or the
issuing bank must have more than $100 million of working capital or more than $1
billion of total assets.
Cash Portfolio and Retirement Portfolio may invest in all types of money market
securities including commercial paper, certificates of deposits, bankers'
acceptances, mortgage-backed and asset-backed securities, repurchase agreements
and other short-term debt securities. The funds limit foreign investments to
issues located in major industrialized countries.
Portfolio Update
During the period, and in anticipation of higher rates, we shortened our average
maturity from 60 days to 44 days, 56 days to 42 days and 52 days to 35 days for
the Cash, Government and Retirement Portfolios, respectively. In keeping with
our higher interest rate forecasts, we anticipate positioning the Funds' average
life below 60 days over the next several months.
- -----------
3 On Wednesday, February 2, 2000, the Fed raised short-term rates by 25 basis
points after this letter was written.
- --------------------------------------------------------------------------------
4 1999 Annual Report to Shareholders
<PAGE>
As previously stated, the Government Portfolio is primarily invested in the
government and agency discount notes. Discount notes offer a competitive yield
over comparable U.S. Treasury bills and are highly liquid.
The investments in the Smith Barney Cash Portfolio changed during the period due
to asset growth and because we have reached our credit limits with our approved
list of issuers. In addition, bank issuance has declined over the past year. We
are pleased to report that the fund experienced another year of double-digit
asset growth (14%) with assets totaling approximately $46 billion at year end.
We invested about 25% of the Cash Portfolio in government agencies such as
Federal Home Loan Bank and Fannie Mae to meet this growth in assets and
declining issuance.
Some of the decline in issuance was due to Y2K-related issues as banks were
unwilling to settle their CDs in the new year and we would expect some issuance
to resurface. We also anticipate keeping a larger portion of the Cash Portfolio
in government agency discount notes during 2000 as we search for more high
quality issuers to add to our approved list.
The Retirement Portfolio is currently invested in the same high quality
securities as the Cash Portfolio; with over almost 70% invested in top tier
domestic and foreign bank credits. The remainder of the fund is comprised of
highly rated domestic and foreign corporations and government agencies.
Thank you for investing in the Smith Barney Money Market Funds. We look forward
to providing you with competitive money market returns in the new century.
/s/ Phyllis Zahorodny
Phyllis Zahorodny
Vice President
January 25, 2000
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 5
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
=================================================================================================
<S> <C> <C> <C>
U.S. AGENCIES AND INSTRUMENTALITIES-- 25.3%
$1,298,084,000 Federal Home Loan Bank
mature 1/28/00 to 3/15/00 5.55% to 5.83% $1,290,338,805
4,072,609,000 Federal Home Loan Mortgage Corp.
mature 1/11/00 to 2/14/00 5.52 to 5.74 4,057,281,075
6,161,992,000 Federal National Mortgage Association
mature 1/18/00 to 3/16/00 5.51 to 5.85 6,124,547,473
- -------------------------------------------------------------------------------------------------
TOTAL U.S. AGENCIES AND
INSTRUMENTALITIES
(Cost -- $11,472,167,353) 11,472,167,353
=================================================================================================
BANK NOTES -- 3.0%
100,000,000 Banc One Columbus NA
matures 2/7/00 6.01 100,000,000
100,000,000 Banc One NA
mature 3/15/00 to 10/10/00 5.90 to 6.19 99,981,517
525,000,000 Bank of America
mature 1/12/00 to 2/7/00 5.82 to 6.01 525,000,000
225,000,000 FCC National
mature 1/18/00 to 1/24/00 5.52 to 5.55 225,000,000
100,000,000 First Chicago
matures 6/5/00 5.55 99,983,596
50,000,000 First Union National Bank
matures 2/28/00 5.30 50,000,000
200,000,000 First USA Bank NA
mature 2/15/00 to 10/10/00 5.93 to 6.20 199,944,555
50,000,000 NationsBank
matures 1/10/00 5.50 50,000,000
- -------------------------------------------------------------------------------------------------
TOTAL BANK NOTES
(Cost -- $1,349,909,668) 1,349,909,668
=================================================================================================
MEDIUM-TERM NOTES -- 0.5%
50,000,000 Abbey National PLC
matures 7/28/00 5.75 49,989,030
100,000,000 Goldman, Sachs & Co.
matures 2/24/00 5.28 100,000,000
100,000,000 Wells Fargo
matures 4/10/00 5.26 99,990,561
- -------------------------------------------------------------------------------------------------
TOTAL MEDIUM-TERM NOTES
(Cost -- $249,979,591) 249,979,591
=================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
6 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
===============================================================================================
<S> <C> <C> <C>
DOMESTIC CERTIFICATES OF DEPOSIT -- 2.2%
$ 150,000,000 American Centurion Bank
mature 2/1/00 to 2/2/00 5.97% to 6.10% $ 150,000,000
50,000,000 Chase Manhattan USA Delaware
matures 1/26/00 5.60 50,000,000
525,000,000 First Union National Bank
mature 1/19/00 to 6/13/00 5.56 to 6.05 525,000,000
245,000,000 Harris Bank
mature 1/10/00 to 1/18/00 6.25 to 6.4 245,000,000
40,000,000 US Bankcorp.
matures 1/18/00 5.51 40,000,000
- -----------------------------------------------------------------------------------------------
TOTAL DOMESTIC CERTIFICATES
OF DEPOSIT
(Cost -- $1,010,000,000) 1,010,000,000
===============================================================================================
TIME DEPOSITS -- 3.6%
102,776,000 Banc One Corp.
matures 1/3/00 4.50 102,776,000
200,000,000 Bank of Montreal
matures 1/12/00 5.75 200,000,000
150,000,000 Deutsche Bank
matures 1/3/00 4.50 150,000,000
200,000,000 Paribas SA
matures 1/3/00 5.00 200,000,000
180,000,000 Republic National Bank of NY
matures 1/3/00 5.25 180,000,000
300,000,000 Societe Generale
matures 1/3/00 5.00 300,000,000
515,000,000 Union Bank of Switzerland
matures 1/12/00 5.53 to 5.58 515,000,000
- -----------------------------------------------------------------------------------------------
TOTAL TIME DEPOSITS
(Cost -- $1,647,776,000) 1,647,776,000
===============================================================================================
COMMERCIAL PAPER -- 44.2%
190,000,000 Abbey National North America
mature 1/31/00 to 2/3/00 5.34 to 6.04 189,017,567
150,000,000 ABN AMRO (Canada)
mature 2/1/00 to 3/3/00 5.88 to 5.93 148,995,378
85,000,000 Alliance & Leicester Building Society
mature 2/4/00 to 2/28/00 5.92 to 6.14 84,379,339
100,000,000 American Express Credit Corp.
matures 1/21/00 6.39 99,647,222
225,000,000 American Home Products
mature 1/18/00 to 1/27/00 5.35 to 5.86 224,238,236
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 7
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
==========================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 44.2% (continued)
$ 265,000,000 ANZ Delaware Inc.
mature 2/1/00 to 3/20/00 5.91% to 6.10% $263,109,500
215,000,000 Aspen Funding
mature 1/19/00 to 3/3/00 5.46 to 6.30 213,920,299
468,000,000 Asset Securitization
mature 2/7/00 to 2/23/00 5.93 to 6.11 464,373,400
500,000,000 Associates First Capital Co.
mature 1/10/00 to 3/15/00 5.50 to 6.33 497,217,569
400,000,000 AT&T Corp.
mature 1/10/00 to 3/2/00 5.87 to 6.29 398,208,472
415,762,000 Atlantis One Funding Corp.
mature 1/18/00 to 2/17/00 5.57 to 6.12 413,729,667
100,000,000 Banc One Corp.
mature 2/14/00 to 2/28/00 5.90 99,181,486
425,000,000 BankAmerica Corp.
mature 1/19/00 to 2/16/00 5.52 to 6.08 422,788,271
275,000,000 Bank Austria Finance
mature 1/10/00 to 2/22/00 5.52 to 6.19 273,743,639
250,000,000 BBL NA Inc.
mature 1/10/00 to 2/10/00 5.55 to 6.37 249,002,722
290,000,000 BCI Funding Corp.
mature 1/7/00 to 2/22/00 5.56 to 6.34 288,659,239
116,500,000 Bell Atlantic Financial Service
mature 1/14/00 to 1/28/00 5.91 to 5.94 116,098,123
170,000,000 Bellsouth Capital Funding
mature 1/19/00 to 2/25/00 5.33 to 5.85 169,139,403
285,835,000 Centric Capital Corp.
mature 1/19/00 to 2/17/00 5.94 to 6.44 284,215,039
650,000,000 Chase Manhattan Bank Corp.
mature 1/20/00 to 4/3/00 5.85 to 5.9 644,989,202
350,000,000 CIT Group Holdings, Inc.
mature 1/19/00 to 1/25/00 5.90 to 6.29 348,782,028
100,000,000 Commerzbank US Finance
matures 1/24/00 5.52 99,656,917
140,000,000 Credito Italiano
mature 1/10/00 to 2/7/00 6.03 to 6.27 139,554,575
350,000,000 Cregem North America
mature 1/10/00 to 2/17/00 5.83 to 6.10 348,522,028
125,000,000 CS First Boston
mature 1/24/00 to 1/25/00 5.36 to 5.87 124,560,648
600,000,000 Daimler Chrysler Holdings Co.
mature 1/12/00 to 3/13/00 5.58 to 6.29 596,553,375
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
========================================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 44.2% (continued)
$ 314,783,000 Delaware Funding Corp.
mature 1/25/00 to 2/16/00 5.94% to 6.40% $312,862,986
290,000,000 Den Danske Corp.
mature 1/10/00 to 2/14/00 5.35 to 6.34 288,955,585
285,000,000 Deutsche Bank Finance Inc.
mature 1/18/00 to 2/8/00 5.52 to 6.05 283,735,951
425,000,000 Diageo PLC
mature 1/19/00 to 2/14/00 5.50 to 6.04 422,977,527
365,000,000 Dresdner U.S. Finance, Inc.
mature 1/7/00 to 3/17/00 5.50 to 6.29 362,731,722
207,345,000 Enterprise Funding Corp.
mature 1/21/00 to 2/18/00 6.12 to 6.45 206,249,768
293,026,000 Falcon Asset Securities Corp.
mature 1/7/00 to 2/15/00 5.93 to 6.35 291,898,722
250,000,000 Ford Motor Credit Co.
mature 1/10/00 to 1/14/00 5.71 to 5.82 249,556,570
275,000,000 Fortis Funding LLC
mature 1/5/00 to 3/20/00 5.90 to 6.10 273,103,809
750,000,000 General Electric Capital Corp.
mature 1/24/00 to 3/15/00 5.57 to 6.21 744,614,459
150,000,000 General Electric International
matures 1/27/00 5.53 149,418,250
350,000,000 General Motors Acceptance Corp.
mature 1/31/00 to 2/22/00 5.85 to 5.97 347,777,194
75,000,000 Generale Bank
mature 1/12/00 to 1/14/00 5.50 to 5.54 74,861,979
96,600,000 Glaxo Wellcome PLC
mature 2/8/00 to 2/25/00 5.99 to 6.07 95,872,481
600,000,000 Goldman Sachs
mature 1/18/00 to 2/29/00 5.51 to 6.11 596,321,875
150,000,000 Halifax PLC
mature 1/7/00 to 2/4/00 5.58 to 6.05 149,390,055
50,000,000 IBM Corp.
matures 2/11/00 5.85 49,676,555
115,000,000 IBM Credit Corp.
mature 2/11/00 to 2/15/00 5.82 to 5.86 114,210,164
247,115,000 International Lease Finance
mature 2/2/00 to 2/11/00 5.84 to 6.00 245,610,505
75,000,000 International Nederlanden US Funding Corp.
mature 2/2/00 to 2/15/00 5.81 to 5.90 74,518,965
100,000,000 Johnson & Johnson
matures 1/27/00 5.33 99,628,056
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 9
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
======================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 44.2% (continued)
$700,000,000 J.P. Morgan & Co.
mature 1/18/00 to 2/17/00 5.50% to 6.20% $696,768,658
225,074,000 Kitty Hawk
mature 1/20/00 to 2/4/00 5.97 to 6.35 224,092,779
50,000,000 Kredietbank NA Finance
matures 2/3/00 5.91 49,732,792
200,000,000 Lucent Technologies
mature 1/24/00 to 1/26/00 5.26 to 5.51 199,301,750
450,000,000 Merrill Lynch
mature 1/28/00 to 2/1/00 5.51 to 6.25 447,896,570
231,224,000 Monte Rosa Capital
mature 1/24/00 to 2/24/00 5.95 to 6.30 229,601,843
800,000,000 Morgan Stanley Dean Witter & Co.
mature 1/18/00 to 3/2/00 5.35 to 6.13 795,905,834
390,000,000 Moriarity Ltd.
mature 1/10/00 to 2/18/00 5.94 to 6.38 388,146,615
50,000,000 National Australia Funding Delaware
matures 1/27/00 5.85 49,793,806
100,000,000 National Bank of Canada Finance USA
mature 1/18/00 to 1/19/00 5.52 to 5.55 99,738,931
150,000,000 Nationwide Building Society
mature 2/4/00 to 3/21/00 5.92 to 6.10 148,790,306
300,000,000 New Center Asset Trust
mature 2/10/00 to 2/14/00 5.94 to 5.98 297,976,112
250,000,000 Newport Funding
mature 1/10/00 to 3/3/00 5.38 to 6.37 248,952,653
112,850,000 Oesterreische Kontrollbank
mature 2/10/00 to 2/15/00 5.80 to 5.90 112,080,219
75,000,000 Pfizer Inc.
matures 2/8/00 5.82 74,545,583
250,000,000 Preferred Receivable Funding
mature 1/24/00 to 2/10/00 6.11 to 6.35 248,798,056
241,500,000 Procter & Gamble Co.
mature 1/11/00 to 2/18/00 5.84 to 6.40 240,126,929
25,000,000 Province de Quebec
matures 1/11/00 6.06 24,958,125
315,411,000 Quincy Capital Corp.
mature 1/31/00 to 2/15/00 5.94 to 6.22 313,423,615
240,725,000 Receivable Capital Corp.
mature 1/11/00 to 2/10/00 5.95 to 6.39 239,902,371
125,000,000 Saint-Gobain Compagnie
mature 1/18/00 to 2/15/00 5.54 to 5.82 124,231,545
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
======================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 44.2% (continued)
$ 75,000,000 San Paolo US Finance Inc.
mature 1/10/00 to 1/31/00 5.37% to 5.91% $ 74,814,584
50,000,000 SBC Communications
matures 2/11/00 5.85 49,671,430
180,000,000 Societe Generale NA Inc.
mature 1/10/00 to 1/28/00 6.29 to 6.36 179,401,750
50,000,000 Svenska Handelsbanken
matures 2/3/00 6.05 49,725,458
202,721,000 Transamerica Finance Corp.
mature 2/1/00 to 2/24/00 5.88 to 6.10 201,345,325
175,000,000 Unifunding Inc.
mature 2/2/00 to 2/22/00 5.99 to 6.10 173,734,583
74,600,000 USAA Capital Corp.
matures 2/14/00 6.01 74,062,051
100,000,000 Walt Disney Co.
matures 3/1/00 5.87 99,038,332
275,000,000 Wells Fargo Co.
mature 2/7/00 to 2/11/00 5.84 to 6.11 273,197,410
325,000,000 Westpac
mature 2/2/00 to 2/4/00 5.93 to 6.11 323,231,569
450,000,000 Windmill Funding Corp.
mature 1/10/00 to 2/3/00 5.56 to 6.25 448,826,854
260,000,000 Woolwich Building Society
mature 1/18/00 to 3/3/00 5.44 to 6.07 258,405,303
- --------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $20,096,476,263) 20,096,476,263
======================================================================================
FOREIGN CERTIFICATES OF DEPOSIT -- 20.1%
360,000,000 Abbey National PLC
mature 1/4/00 to 7/24/00 5.30 to 6.11 359,984,197
50,000,000 ABN AMRO Bank (New York)
matures 6/5/00 5.55 49,989,747
50,000,000 ABN AMRO Bank NV
matures 3/16/00 5.20 49,996,042
50,000,000 ANZ Banking Group LTD
matures 1/18/00 5.86 50,000,231
75,000,000 Bank Austriengellschaft
mature 2/17/00 to 3/16/00 5.21 to 5.93 74,996,686
150,000,000 Bank Brussels Lambert
mature 2/1/00 to 3/22/00 5.90 to 6.11 150,001,981
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
===========================================================================================
<S> <C> <C> <C>
FOREIGN CERTIFICATES OF DEPOSIT-- 20.1% (continued)
$ 300,000,000 Bank of Montreal
mature 1/10/00 to 2/29/00 5.21% to 6.25% $299,997,666
397,000,000 Bank of Nova Scotia
mature 1/10/00 to 10/2/00 5.20 to 6.33 396,929,810
50,000,000 Banque National De Paris
matures 3/10/00 5.20 50,001,933
75,000,000 Banque National De Paris San Francisco
mature 1/26/00 to 2/14/00 5.60 to 5.90 75,000,338
326,500,000 Barclays Bank
mature 1/10/00 to 10/2/00 5.81 to 6.20 326,390,868
580,000,000 Bayerische Hypo-Und Vereinsbank
mature 1/20/00 to 7/12/00 5.22 to 5.87 579,970,368
390,000,000 Bayerische Landesbank
mature 1/31/00 to 10/2/00 5.21 to 6.08 389,913,183
50,000,000 Canadian Imperial Bank Commerce
mature 3/3/00 to 3/15/00 5.20 50,001,365
400,000,000 Cariplo
mature 1/10/00 to 2/29/00 5.53 to 6.33 400,003,910
400,000,000 Commerzbank
mature 2/1/00 to 7/3/00 5.21 to 5.80 399,969,904
150,000,000 Credit Agricole Indosuez
mature 2/1/00 to 3/22/00 5.90 to 6.06 150,002,206
50,000,000 Credit Communal De Belgique
matures 6/14/00 5.64 49,990,247
50,000,000 Credit Suisse
matures 1/14/00 5.57 50,000,176
100,000,000 Credito Italiano
matures 1/10/00 5.52 100,000,304
75,000,000 Den Danske Corp.
mature 1/18/00 to 7/13/00 5.75 to 5.90 74,993,881
360,000,000 Deutsche Bank
mature 1/7/00 to 6/26/00 5.70 to 6.20 359,990,499
135,000,000 Dresdner Bank
mature 1/18/00 to 3/9/00 5.20 to 6.19 134,995,868
225,000,000 Halifax Building Society
mature 1/18/00 to 2/15/00 5.52 to 6.10 225,000,548
400,000,000 Hessiche Landesbank
mature 1/24/00 to 9/29/00 5.86 to 6.03 399,947,503
338,000,000 International Nederlanden Group
mature 1/18/00 to 2/17/00 5.90 to 6.00 338,008,805
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
======================================================================================
<S> <C> <C> <C>
FOREIGN CERTIFICATES OF DEPOSIT -- 20.1% (continued)
$ 150,000,000 KBC Bank NV
mature 2/8/00 5.92% to 6.00% $ 150,009,574
100,000,000 Krediet Bank
matures 1/18/00 to 1/28/00 5.89 100,000,597
300,000,000 Lloyds Bank
mature 1/12/00 to 2/14/00 5.35 to 6.05 299,997,610
175,000,000 National Australia Bank
matures 2/3/00 6.05 175,001,588
250,000,000 National Bank of Canada
mature 1/19/00 to 6/9/00 5.55 to 5.93 249,977,325
350,000,000 National Westminster Bank PLC
mature 1/20/00 to 7/3/00 5.20 to 5.70 349,964,480
50,000,000 Nationwide Building Society
matures 3/22/00 5.91 50,001,103
200,000,000 Rabobank
mature 1/10/00 to 6/14/00 5.20 to 6.25 199,986,693
345,000,000 Royal Bank of Canada
mature 2/29/00 to 7/12/00 5.20 to 5.75 344,938,583
275,000,000 San Paolo Bank
mature 2/8/00 to 7/14/00 5.58 to 6.01 274,966,515
220,000,000 Societe Generale New York
mature 1/14/00 to 6/5/00 5.54 to 6.25 219,986,879
250,000,000 Svenska Handelsbanken
mature 1/24/00 to 2/18/00 5.84 to 5.95 250,005,346
50,000,000 Toronto Dominion
matures 3/17/00 5.20 49,995,990
459,000,000 Union Bank of Switzerland
mature 3/1/00 to 10/2/00 5.27 to 6.20 458,867,156
400,000,000 Westdeutsche Landesbank
mature 1/12/00 to 2/2/00 5.54 to 6.38 400,000,851
- --------------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES
OF DEPOSIT
(Cost -- $9,159,778,556) 9,159,778,556
======================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE
AMOUNT SECURITY VALUE
========================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT -- 1.1%
$ 500,000,000 Morgan Stanley Dean Witter & Co., 5.59% due 2/1/00;
Proceeds at maturity -- $505,822,917;
(Fully collateralized by FNMA, 6.63% due 9/15/09;
Market value -- $514,014,534)
(Cost -- $500,000,000) $ 500,000,000
========================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $45,486,087,431*) $45,486,087,431
========================================================================================
</TABLE>
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GOVERNMENT PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
=============================================================================================
<S> <C> <C> <C>
U.S. AGENCIES AND INSTRUMENTALITIES -- 90.3%
$ 204,620,000 Federal Farm Credit Bank
mature 1/14/00 to 5/15/00 5.55% to 5.83% $ 203,177,626
1,471,435,000 Federal Home Loan Bank
mature 1/19/00 to 4/26/00 4.71 to 5.75 1,461,875,645
2,183,940,000 Federal Home Loan Mortgage Corp.
mature 1/3/00 to 8/11/00 1.50 to 5.85 2,169,112,145
1,071,528,000 Federal National Mortgage Association
mature 1/18/00 to 9/29/00 4.76 to 5.92 1,065,709,757
- ---------------------------------------------------------------------------------------------
TOTAL U.S. AGENCIES AND
INSTRUMENTALITIES
(Cost -- $4,899,875,173) 4,899,875,173
=============================================================================================
REPURCHASE AGREEMENTS -- 9.7%
244,377,000 Morgan Stanley Dean Witter & Co., 2.50% due 1/3/00;
Proceeds at maturity -- $244,427,912;
(Fully collateralized by U.S. Treasury
Bills, Notes, Bonds, 6.00% due 2/15/26;
Market value -- $244,545,680) 244,377,000
30,000,000 Goldman, Sachs & Co., 2.00% due 1/3/00;
Proceeds at maturity -- $30,005,000;
(Fully collateralized by U.S. Treasury
Bills, Notes, Bonds, 6.25% due 8/31/00;
Market value -- $30,600,311) 30,000,000
250,000,000 Morgan Guaranty, 3.00% due 1/3/00;
Proceeds at maturity -- $250,062,500;
(Fully collateralized by U.S. Treasury
Bills, Notes, Bonds, 5.88% to 8.75%
due 2/15/00 to 11/15/26;
Market value -- $252,172,065) 250,000,000
- ---------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost -- $524,377,000) 524,377,000
=============================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $5,424,252,173*) $5,424,252,173
=============================================================================================
</TABLE>
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
========================================================================================
<S> <C> <C> <C>
U.S. AGENCIES AND INSTRUMENTALITIES -- 0.6%
$10,000,000 Federal Home Loan Mortgage Corp.
matures 3/9/00 (Cost -- $9,891,011) 5.85% $ 9,891,011
========================================================================================
BANK NOTES -- 3.8%
30,000,000 Bank of America
mature 1/12/00 to 2/3/00 5.85 to 5.95 30,000,000
35,000,000 FCC National
mature 1/20/00 to 2/25/00 5.56 to 5.83 34,998,817
- ----------------------------------------------------------------------------------------
TOTAL BANK NOTES
(Cost -- $64,998,817) 64,998,817
========================================================================================
MEDIUM-TERM NOTES -- 1.2%
10,000,000 Abbey National North America
matures 7/28/00 5.75 9,997,806
10,000,000 Goldman, Sachs & Co.
matures 2/24/00 5.17 10,000,000
- ----------------------------------------------------------------------------------------
TOTAL MEDIUM-TERM NOTES
(Cost -- $19,997,806) 19,997,806
========================================================================================
COMMERCIAL PAPER -- 60.6%
24,900,000 Abbey National North America
mature 2/3/00 to 2/25/00 5.92 to 6.04 24,729,254
35,000,000 Alliance and Leicester Building Society
mature 1/24/00 to 2/4/00 5.97 to 6.01 34,840,617
29,000,000 ANZ Delaware Inc.
mature 2/7/00 to 3/20/00 5.91 to 6.04 28,743,133
35,000,000 Asset Securitization Corp.
mature 1/20/00 to 2/7/00 5.98 to 6.11 34,828,517
30,000,000 Atlantis One Funding Corp.
mature 1/20/00 to 2/10/00 5.89 to 6.09 29,866,889
30,000,000 AT&T Corp.
mature 1/27/00 to 1/31/00 6.09 to 6.19 29,861,361
10,000,000 Bank Brussels Lambert
matures 3/17/00 6.12 9,872,700
14,108,000 Bank America Corp.
matures 1/27/00 5.90 14,049,107
15,000,000 Bank of Nova Scotia
matures 1/10/00 6.26 14,976,675
43,000,000 BCI Funding Corp.
mature 1/18/00 to 2/22/00 5.94 to 6.38 42,723,993
29,900,000 Bell Atlantic Financial Services
mature 1/25/00 to 1/26/00 5.97 to 6.31 29,777,920
5,000,000 Bellsouth Telecommunications
matures 2/2/00 6.20 4,972,667
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
=======================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 60.6% (continued)
$10,000,000 CIT Group Holdings Inc.
matures 1/20/00 6.04% $ 9,968,333
20,000,000 Credito Italiano Delaware Inc.
mature 1/7/00 to 2/2/00 6.05 to 6.36 19,936,222
29,000,000 Cregem North America Inc.
mature 1/7/00 to 1/21/00 5.90 to 5.99 28,937,997
10,000,000 Daimler Chrysler North America
matures 1/20/00 5.58 9,971,394
20,000,000 Den Danske Corp.
mature 1/24/00 to 2/24/00 5.92 to 6.16 19,873,833
8,000,000 Deutsche Bank
matures 1/18/00 5.52 7,979,713
45,000,000 Dresdner US Finance Inc.
mature 1/7/00 to 1/18/00 5.50 to 6.29 44,927,908
20,000,000 E.I. Dupont De Nemours & Co.
matures 1/25/00 6.09 19,919,333
30,000,000 Ford Motor Credit
matures 1/28/00 6.09 29,864,100
10,000,000 Generale Bank
matures 1/14/00 5.54 9,980,554
50,000,000 General Electric Capital Corp.
mature 2/1/00 to 3/16/00 5.58 to 5.99 49,642,038
40,000,000 General Motors Acceptance Corp.
mature 1/18/00 to 2/8/00 5.97 to 6.48 39,806,579
25,000,000 Goldman Sachs & Co.
mature 2/1/00 to 2/3/00 6.09 24,866,006
27,700,000 GTE Funding Inc.
mature 2/8/00 to 2/10/00 6.08 to 6.30 27,517,940
9,900,000 Halifax PLC
matures 2/4/00 6.05 9,844,087
25,000,000 International Lease Finance
matures 2/17/00 5.87 24,811,021
39,900,000 J.P. Morgan & Co.
mature 1/18/00 to 3/22/00 5.50 to 6.10 39,673,801
32,000,000 Morgan Stanley Dean Witter & Co.
mature 1/6/00 to 3/2/00 5.59 to 6.13 31,868,523
32,000,000 Nationwide Building Society
matures 3/21/00 5.92 31,587,556
27,000,000 Oesterreich Kontrollbank
matures 1/25/00 5.97 26,893,800
42,200,000 Preferred Receivables Funding Corp.
mature 1/20/00 to 1/28/00 6.15 to 6.35 42,024,433
20,000,000 Procter & Gamble Co.
mature 2/25/00 to 3/3/00 5.88 19,811,997
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
==========================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 60.6% (continued)
$19,875,000 San Paolo US Finance
mature 1/19/00 to 2/8/00 5.94% to 5.99% $19,783,971
10,000,000 Toronto Dominion Holdings
matures 1/20/00 6.40 9,966,433
25,850,000 Transamerica Finance Corp.
mature 1/28/00 to 2/8/00 5.92 to 6.13 25,724,468
45,000,000 Unifunding Inc.
mature 1/25/00 to 3/9/00 5.92 to 6.02 44,711,889
30,000,000 Wells Fargo Corp.
mature 1/31/00 to 2/7/00 6.04 to 6.13 29,837,822
20,000,000 Westpac Bank
matures 2/3/00 6.01 19,892,017
10,000,000 Woolwich Building Society
matures 1/27/00 5.89 9,958,400
- ------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost -- $1,028,825,001) 1,028,825,001
==========================================================================================
DOMESTIC CERTIFICATES OF DEPOSIT -- 0.6%
11,000,000 First Union National Bank of North
Carolina
matures 6/2/00 (Cost -- $11,000,000) 5.56 11,000,000
==========================================================================================
FOREIGN CERTIFICATES OF DEPOSIT -- 21.7%
20,000,000 Bank of Montreal
matures 1/13/00 6.33 20,000,000
10,000,000 Bank of Nova Scotia
matures 1/11/00 5.36 9,998,551
18,000,000 Banque National De Paris
matures 2/1/00 6.07 18,000,307
10,000,000 Bayerische Landesbank
matures 2/23/00 5.22 9,998,651
40,000,000 Bayerische Hypo-und Vereinsbank
mature 1/20/00 to 7/12/00 5.55 to 5.80 39,996,514
10,000,000 Canadian Imperial Bank Commerce
matures 1/20/00 6.43 10,000,000
30,000,000 Cariplo
matures 2/1/00 6.07 29,999,605
45,000,000 Commerzbank
mature 1/18/00 to 3/15/00 5.21 to 6.04 44,993,375
15,000,000 Credit Suisse First Boston Corp.
matures 1/19/00 5.57 15,000,030
32,000,000 Deutsche Bank Financial Inc.
mature 1/7/00 to 3/2/00 6.00 to 6.20 32,000,251
10,000,000 Landesbank Hessen-Thuringen
matures 9/29/00 6.22 9,978,071
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
=================================================================================================
<S> <C> <C> <C>
FOREIGN CERTIFICATES OF DEPOSIT -- 21.7% (continued)
$30,000,000 International Nederlanden Group
mature 2/9/00 to 2/17/00 5.92% to 5.93% $30,000,866
25,000,000 KBC Bank NV
matures 1/18/00 6.00 25,000,336
15,000,000 Lloyds TSB Bank
matures 2/10/00 5.90 14,999,921
15,000,000 San Paolo Bank
matures 2/2/00 6.05 15,000,381
8,000,000 Societe Generale
matures 1/21/00 6.13 8,000,083
10,000,000 Svenska Handelsbanken
matures 1/14/00 6.22 9,999,392
25,000,000 Westdeutsche Landesbank
mature 1/24/00 to 2/2/00 6.04 to 6.05 25,000,000
- -------------------------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES
OF DEPOSIT
(Cost -- $367,966,334) 367,966,334
=================================================================================================
TIME DEPOSITS -- 11.3%
50,000,000 Bank Austriengellschaft
matures 1/3/00 4.75 50,000,000
40,000,000 Canadian Imperial Bank Commerce
matures 1/3/00 4.25 40,000,000
50,000,000 Chase Manhattan Bank
matures 1/3/00 4.00 50,000,000
12,000,000 Paribas SA
matures 1/3/00 5.00 12,000,000
40,000,000 Societe Generale
matures 1/3/00 5.00 40,000,000
- -------------------------------------------------------------------------------------------------
TOTAL TIME DEPOSITS
(Cost -- $192,000,000) 192,000,000
=================================================================================================
REPURCHASE AGREEMENT -- 0.2%
3,129,000 Morgan Stanley Dean Witter & Co., 2.50% due 1/3/00;
Proceeds at maturity -- $3,129,652;
(Fully collateralized by U.S. Treasury Notes,
7.63% due 2/15/07; Market value -- $3,201,117)
(Cost -- $3,129,000) 3,129,000
=================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $1,697,807,969*) $1,697,807,969
=================================================================================================
</TABLE>
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cash Government Retirement
Portfolio Portfolio Portfolio
=============================================================================================================
<S> <C> <C> <C>
ASSETS:
Investments, at amortized cost $45,486,087,431 $5,424,252,173 $1,697,807,969
Cash 254 78 266
Interest receivable 232,558,211 1,722,772 7,526,231
- -------------------------------------------------------------------------------------------------------------
Total Assets 45,718,645,896 5,425,975,023 1,705,334,466
- -------------------------------------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 12,807,019 1,397,557 482,436
Management fees payable 14,347,958 1,798,671 613,902
Distribution fees payable 1,251,039 104,733 54,164
Deferred compensation payable 159,083 26,625 10,167
Accrued expenses 12,777,280 885,701 473,929
- -------------------------------------------------------------------------------------------------------------
Total Liabilities 41,342,379 4,213,287 1,634,598
- -------------------------------------------------------------------------------------------------------------
Total Net Assets $45,677,303,517 $5,421,761,736 $1,703,699,868
=============================================================================================================
NET ASSETS:
Par value of capital shares
(50,000,000,000,
10,000,000,000 and
5,000,000,000 shares
authorized, respectively;
par value $0.01 per share) $ 456,780,251 $ 54,217,458 $ 17,036,979
Capital paid in excess of par value 45,221,492,669 5,367,544,965 1,686,660,913
Undistributed net investment income 5,745 -- 1,976
Accumulated net realized loss
from security transactions (975,148) (687) --
- -------------------------------------------------------------------------------------------------------------
Total Net Assets $45,677,303,517 $5,421,761,736 $1,703,699,868
=============================================================================================================
Shares Outstanding:
Class A 45,482,256,056 5,413,542,497 1,703,697,892
---------------------------------------------------------------------------------------------------------
Class L 582,330 113,328 --
---------------------------------------------------------------------------------------------------------
Class Y 67,401,433 8,089,954 --
---------------------------------------------------------------------------------------------------------
Class Z 127,785,254 -- --
---------------------------------------------------------------------------------------------------------
Net Asset Value, per class $1.00 $1.00 $1.00
=============================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations For the Year Ended December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cash Government Retirement
Portfolio Portfolio Portfolio
==================================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $2,294,474,090 $279,332,544 $88,971,197
- --------------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 166,564,956 22,847,469 7,196,326
Shareholder and system
servicing fees 47,915,441 3,870,838 2,282,156
Distribution fees (Note 3) 43,554,214 5,439,100 1,697,506
Shareholder communications 4,601,855 454,863 410,170
Registration fees 3,171,825 486,822 227,777
Custody 2,637,275 229,320 83,625
Directors' fees 194,800 39,441 11,880
Insurance 187,400 54,945 14,862
Audit and legal 87,393 52,863 38,010
Other 16,295 40,450 6,987
- --------------------------------------------------------------------------------------------------
Total Expenses 268,931,454 33,516,111 11,969,299
Less: Management
fee waiver (Note 3) -- -- (271,460)
- --------------------------------------------------------------------------------------------------
Net Expenses 268,931,454 33,516,111 11,697,839
- --------------------------------------------------------------------------------------------------
Net Investment Income 2,025,542,636 245,816,433 77,273,358
- --------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) From
Security Transactions 29,464 (687) --
- --------------------------------------------------------------------------------------------------
Increase in Net Assets
From Operations $2,025,572,100 $245,815,746 $77,273,358
==================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
Cash Portfolio 1999 1998
==================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,025,542,636 $ 1,768,076,620
Net realized gain 29,464 69,008
- --------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 2,025,572,100 1,768,145,628
- --------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS (NOTE 2) (2,025,536,891) (1,768,014,366)
- --------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Proceeds from sale of shares 198,679,971,946 161,515,398,630
Net asset value of shares issued
for reinvestment of dividends 2,050,571,947 1,705,807,910
Cost of shares reacquired (195,130,900,489) (154,036,489,930)
- --------------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 5,599,643,404 9,184,716,610
- --------------------------------------------------------------------------------------------------
Increase in Net Assets 5,599,678,613 9,184,847,872
NET ASSETS:
Beginning of year 40,077,624,904 30,892,777,032
- --------------------------------------------------------------------------------------------------
End of year $ 45,677,303,517 $ 40,077,624,904
==================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
Government Portfolio 1999 1998
================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 245,816,433 $ 248,376,887
Net realized gain (loss) (687) 5,119
- ------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 245,815,746 248,382,006
- ------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS (NOTE 2) (245,816,433) (248,382,006)
- ------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sales of shares 19,683,983,366 18,766,441,650
Net asset value of shares issued
for reinvestment of dividends 251,441,644 242,100,573
Cost of shares reacquired (19,858,393,187) (18,294,653,762)
- ------------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 77,031,823 713,888,461
- ------------------------------------------------------------------------------------------------
Increase in Net Assets 77,031,136 713,888,461
NET ASSETS:
Beginning of year 5,344,730,600 4,630,842,139
- ------------------------------------------------------------------------------------------------
End of year $ 5,421,761,736 $ 5,344,730,600
================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Years Ended December 31,
Retirement Portfolio 1999 1998
==============================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 77,273,358 $ 72,353,969
- ----------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 77,273,358 72,353,969
- ----------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS (NOTE 2) (77,273,358) (72,351,993)
- ----------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sales of shares 6,301,771,167 5,440,139,414
Net asset value of shares issued
for reinvestment of dividends 78,916,786 70,372,913
Cost of shares reacquired (6,359,076,721) (5,195,545,701)
- ----------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 21,611,232 314,966,626
- ----------------------------------------------------------------------------------------------
Increase in Net Assets 21,611,232 314,968,602
NET ASSETS:
Beginning of year 1,682,088,636 1,367,120,034
- ----------------------------------------------------------------------------------------------
End of year $ 1,703,699,868 $ 1,682,088,636
==============================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
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 U.S. 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 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
SSB Citi Fund Management LLC ("SSBC"), formerly known as SSBC Fund Management
Inc., a subsidiary of Salomon Smith Barney Holdings, Inc. ("SSBH") which, in
turn, is a subsidiary of Citigroup Inc. ("Citigroup"), acts as investment
manager to the Fund. As compensation for its services, each Portfolio pays SSBC
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 net assets, 0.40% on
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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. For the year ended
December 31, 1999, SSBC waived $271,460 of its management fees for the
Retirement Portfolio.
Effective October 1999, Smith Barney Private Trust Company ("Private Trust"),
another subsidiary of Citigroup, became the Fund's transfer agent and PFPC
Global Services ("PFPC") became the sub-transfer agent. Private Trust receives
account fees and asset-based fees that vary according to the account size and
type of account, PFPC is responsible for shareholder recordkeeping and financial
processing for all shareholder accounts. During the period October 1, 1999
through December 31, 1999, the Fund paid transfer agent fees of $3,065,278,
$680,453 and $515,276 for the Cash, Government and Retirement Portfolios,
respectively, to Private Trust.
CFBDS, Inc. acts as the Fund's distributor. Salomon Smith Barney Inc. ("SSB"),
another subsidiary of SSBH, as well as certain other broker-dealers, continues
to sell Fund shares to the public as a member of the selling group.
Pursuant to a Distribution Plan, each Portfolio makes payments to SSB, 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 year ended December 31, 1999, total Distribution Plan fees incurred
were:
Portfolio Class A Class L
================================================================================
Cash $43,553,768 $446
Government 5,438,940 160
Retirement 1,697,506 --
================================================================================
All officers and one Director of the Fund are employees of SSB.
4. Capital Loss Carryforward
At December 31, 1999, the Cash Portfolio and the Government Portfolio had, for
Federal tax purposes, approximately $1,245,000 and $1,000, respectively, 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:
2000 2001 2007
================================================================================
Cash Portfolio $114,000 $1,131,000 --
- --------------------------------------------------------------------------------
Government Portfolio -- -- $1,000
================================================================================
- --------------------------------------------------------------------------------
26 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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.
Transactions in shares of each Portfolio were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
Cash Portfolio December 31, 1999 December 31, 1998
=======================================================================================
<S> <C> <C>
Class A
Shares sold 198,147,351,264 160,978,115,930
Shares issued on reinvestment 2,042,125,985 1,702,308,541
Shares reacquired (194,624,622,047) (153,590,683,868)
- ---------------------------------------------------------------------------------------
Net Increase 5,564,855,202 9,089,740,603
=======================================================================================
Class L*
Shares sold 544,299 532,262
Shares issued on reinvestment 21,431 36,582
Shares reacquired (395,544) (2,172,572)
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) 170,186 (1,603,728)
=======================================================================================
Class Y
Shares sold 354,140,105 533,737,417
Shares issued on reinvestment 3,500,399 3,343,643
Shares reacquired (448,769,869) (442,533,329)
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) (91,129,365) 94,547,731
=======================================================================================
Class Z
Shares sold 177,936,278 3,013,021
Shares issued on reinvestment 4,924,132 119,144
Shares reacquired (57,113,029) (1,100,161)
- ---------------------------------------------------------------------------------------
Net Increase 125,747,381 2,032,004
=======================================================================================
</TABLE>
* On June 12, 1998, Class C shares were renamed Class L shares.
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 27
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
Government Portfolio December 31, 1999 December 31, 1998
=====================================================================================
<S> <C> <C>
Class A
Shares sold 19,504,048,114 18,703,029,473
Shares issued on reinvestment 250,660,045 238,831,953
Shares reacquired (19,625,167,349) (18,229,543,894)
- -------------------------------------------------------------------------------------
Net Increase 129,540,810 712,317,532
=====================================================================================
Class L*
Shares sold 18,659 17,492
Shares issued on reinvestment 7,304 14,544
Shares reacquired (119,109) (327,096)
- -------------------------------------------------------------------------------------
Net Decrease (93,146) (295,060)
=====================================================================================
Class Y
Shares sold 179,814,769 50,233,404
Shares issued on reinvestment 620,607 393,725
Shares reacquired (176,004,288) (54,397,870)
- -------------------------------------------------------------------------------------
Net Increase (Decrease) 4,431,088 (3,770,741)
=====================================================================================
Class Z+
Shares sold 101,824 13,161,281
Shares issued on reinvestment 153,688 2,860,351
Shares reacquired (57,102,441) (10,384,902)
- -------------------------------------------------------------------------------------
Net Increase (Decrease) (56,846,929) 5,636,730
=====================================================================================
Retirement Portfolio
Class A
=====================================================================================
Shares sold 6,301,771,167 5,440,139,414
Shares issued on reinvestment 78,916,786 70,372,913
Shares reacquired (6,359,076,721) (5,195,545,701)
- -------------------------------------------------------------------------------------
Net Increase 21,611,232 314,966,626
=====================================================================================
</TABLE>
* On June 12, 1998, Class C shares were renamed Class L shares.
+ As of June 30, 1999, Class Z shares were fully redeemed.
- --------------------------------------------------------------------------------
28 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended December 31:
<TABLE>
<CAPTION>
Class A Shares
----------------------------------------------------------------------------
Cash Portfolio 1999 1998 1997 1996 1995
==========================================================================================================================
<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 0.046 0.050 0.050 0.050 0.054
Dividends from
net investment income (0.046) (0.050) (0.050) (0.050) (0.054)
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Total Return 4.73% 5.07% 5.12% 4.98% 5.53%
- --------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (billions) $45 $40 $31 $27 $23
- --------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1) 0.62% 0.63% 0.64% 0.62% 0.62%
Net investment income 4.63 4.95 5.01 4.87 5.39
==========================================================================================================================
<CAPTION>
Class L Shares
----------------------------------------------------------------------------
Cash Portfolio 1999 1998(2) 1997 1996 1995
==========================================================================================================================
<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 0.047 0.050 0.051 0.050 0.054
Dividends from
net investment income (0.047) (0.050) (0.051) (0.050) (0.054)
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Total Return 4.78% 5.12% 5.17% 4.98% 5.53%
- --------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $582 $412 $2,016 $2,152 $1,737
Ratios to Average Net Assets:
Expenses(1) 0.57% 0.59% 0.59% 0.62% 0.62%
Net investment income 4.70 5.07 5.05 4.87 5.39
==========================================================================================================================
<CAPTION>
Class Y Shares
----------------------------------------------------------------------------
Cash Portfolio 1999 1998 1997 1996 1995
==========================================================================================================================
<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 0.048 0.052 0.052 0.051 0.054
Dividends from
net investment income (0.048) (0.052) (0.052) (0.051) (0.054)
- ---------=----------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00 $1.00
- ----------=---------------------------------------------------------------------------------------------------------------
Total Return 4.91% 5.29% 5.32% 5.09% 5.50%
- -----------=--------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $67 $159 $64 $52 $30
- ------------=-------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1) 0.42% 0.42% 0.43% 0.52% 0.51%
Net investment income 4.76 5.17 5.22 4.97 5.29
==========================================================================================================================
</TABLE>
(1) As a result of a voluntary expense limitation, expense ratios will not
exceed 0.70%.
(2) On June 12, 1998, Class C shares were renamed Class L shares.
- -------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 29
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended December 31:
<TABLE>
<CAPTION>
Class Z Shares
-----------------------------------------------------------------------------
Cash Portfolio 1999 1998 1997 1996 1995
==========================================================================================================================
<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 0.048 0.052 0.052 0.051 0.055
Dividends from
net investment income (0.048) (0.052) (0.052) (0.051) (0.055)
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Total Return 4.91% 5.29% 5.33% 5.06% 5.63%
- --------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $128 $2 $6 $6 $5
- --------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1) 0.41% 0.43% 0.44% 0.53% 0.52%
Net investment income 4.86 5.21 5.21 4.96 5.49
==========================================================================================================================
<CAPTION>
Class A Shares
-----------------------------------------------------------------------------
Government Portfolio 1999 1998 1997 1996 1995
==========================================================================================================================
<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 0.045 0.049 0.049 0.048 0.053
Dividends from
net investment income (0.045) (0.049) (0.049) (0.048) (0.053)
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Total Return 4.60% 5.00% 5.04% 4.89% 5.45%
- --------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (billions) $5 $5 $5 $4 $4
- --------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1) 0.61% 0.60% 0.61% 0.61% 0.60%
Net investment income 4.50 4.88 4.92 4.78 5.31
==========================================================================================================================
<CAPTION>
Class L Shares
-----------------------------------------------------------------------------
Government Portfolio 1999 1998(2) 1997 1996 1995
==========================================================================================================================
<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 0.045 0.049 0.049 0.048 0.053
Dividends from
net investment income (0.045) (0.049) (0.049) (0.048) (0.053)
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------------
Total Return 4.62% 5.01% 5.04% 4.89% 5.46%
- --------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $113 $206 $502 $982 $1,459
- --------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1) 0.59% 0.59% 0.61% 0.61% 0.60%
Net investment income 4.47 4.94 4.90 4.78 5.36
==========================================================================================================================
</TABLE>
(1) As a result of a voluntary expense limitation, expense ratios will not
exceed 0.70%.
(2) On June 12, 1998, Class C shares were renamed Class L shares.
- --------------------------------------------------------------------------------
30 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended December 31:
<TABLE>
<CAPTION>
Class Y Shares
-------------------------------------------------------------------
Government Portfolio 1999 1998 1997 1996 1995
==================================================================================================================
<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 0.047 0.050 0.050 0.049 0.054
Dividends from
net investment income (0.047) (0.050) (0.050) (0.049) (0.054)
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------
Total Return 4.78% 5.13% 5.14% 4.99% 5.55%
- ------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $8,090 $3,659 $7,430 $51,873 $5,376
- ------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1) 0.45% 0.48% 0.51% 0.51% 0.50%
Net investment income 4.64 5.06 4.98 4.88 5.51
==================================================================================================================
<CAPTION>
Class A Shares
-------------------------------------------------------------------
Retirement Portfolio 1999 1998 1997 1996 1995
==================================================================================================================
<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(2) 0.046 0.049 0.049 0.048 0.053
Dividends from
net investment income (0.046) (0.049) (0.049) (0.048) (0.053)
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------
Total Return 4.65% 5.04% 5.03% 4.86% 5.42%
- ------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $1,704 $1,682 $1,367 $1,355 $1,280
- ------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(1)(2) 0.69% 0.70% 0.71% 0.71% 0.72%
Net investment income 4.55 4.92 4.92 4.75 5.28
==================================================================================================================
</TABLE>
(1) As a result of a voluntary expense limitation, expense ratios will not
exceed 0.70%.
(2) The investment manager waived a portion of their management fees for the
years ended December 31, 1999 and December 31, 1998. If such fees were not
waived, the per share decrease on net investment income and the actual
expense ratio would have been as follows:
Per Share Decreases to Expense Ratios
Net Investment Income Without Reimbursement
---------------------- ---------------------
1999 $0.0001 0.71%
1998 0.0002 0.72
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 31
<PAGE>
- --------------------------------------------------------------------------------
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. (comprised of
the Cash, Government and Retirement Portfolios) as of December 31, 1999, the
related statements of operations for the year then ended, the 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, 1999, by correspondence with the custodian. 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, 1999, 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 LLP
New York, New York
February 7, 2000
- --------------------------------------------------------------------------------
32 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Additional Shareholder Information (unaudited)
- --------------------------------------------------------------------------------
On May 12, 1999, a special meeting of shareholders of the Fund was held for the
purpose of electing Directors to the Fund.
The results of the vote were as follows:
<TABLE>
<CAPTION>
Shares Percentage Shares Percentage
Voted of Shares Voted of Shares
Name of Director For Voted Against Voted
===================================================================================================
<S> <C> <C> <C> <C>
Lee Abraham 24,877,816,835.447 97.210% 713,892,218.231 2.790%
Allan J. Bloostein 24,888,479,607.317 97.252 703,229,446.361 2.748
Jane F. Dasher 24,915,929,915.304 97.359 675,779,138.374 2.641
Donald R. Foley 24,875,929,196.977 97.203 715,779,856.701 2.797
Richard E. Hanson, Jr 24,908,391,108.087 97.330 683,317,945.591 2.670
Paul Hardin 24,914,151,780.798 97.352 677,557,272.880 2.648
Heath B. McLendon 24,916,433,450.778 97.361 675,275,602.900 2.639
Roderick C. Rasmussen 24,883,856,239.688 97.234 707,852,813.990 2.766
John P. Toolan 24,911,304,135.464 97.341 680,404,918.214 2.659
===================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes, the Fund hereby designates for the fiscal year ended
December 31,1999:
Percentage of the ordinary dividends paid by the Funds from net investment
income are derived from Federal obligations and may be exempt from taxation at
the state level:
. Cash Portfolio 0.60%
. Government Portfolio 19.17
- --------------------------------------------------------------------------------
Smith Barney Money Funds, Inc. 33
<PAGE>
[LOGO OF SALOMON SMITH BARNEY]
Directors
Lee Abraham
Allan J. Bloostein
Jane F. Dasher
Donald R. Foley
Richard E. Hanson, Jr.
Paul Hardin
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
Joseph H. Fleiss, Emeritus
Officers
Heath B. McLendon
President and Chief Executive Officer
Lewis E. Daidone
Senior Vice President and Treasurer
Phyllis M. Zahorodny
Vice President
Martin R. Hanley
Vice President
Irving P. David
Controller
Christina T. Sydor
Secretary
Investment Manager
SSB Citi Fund Management LLC
Distributor
CFBDS, Inc.
Custodian
PNC Bank, N.A.
Transfer Agent
Smith Barney Private Trust Company
388 Greenwich Street, 22nd Floor
New York, New York 10013
Sub-Transfer Agent
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island 02940-9699
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 a current Prospectus for
the Fund, which contains information concerning the Fund's investment policies
and expenses as well as other pertinent information.
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Smith Barney
Money Funds, Inc.
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com/mutualfunds
FD0858 2/00
