INVESTORS
- -------------------------------------------------------------------------------
Bank & Trust Company
November 6, 1996
VIA EDGAR
Securities and Exchange Commission
Office of Filings, Information and Consumer Services
450 Fifth Street, NW
Washington, DC 20549
RE: Salomon Brothers Opportunity Fund Inc (the "Fund")
File No. 811-2884
-----------------
Ladies and Gentlemen:
Pursuant to Rule 30(b)(2) under the Investment Company Act of 1940, as
amended, we are transmitting via EDGAR the annual report for the period ended
August 31, 1996 for the above-referenced Fund.
If you have any questions, please telephone the undersigned at (617)
330-6113. Thank you for your assistance with this matter.
Very truly yours,
/S/ KEVIN M. CONNERTY
---------------------
Kevin M. Connerty
Director
89 South Street, P.O. Box 1537, Boston MA 02205-1537 Tel.: (617) 330-6700
<PAGE>
October 11, 1996
Salomon Brothers
Opportunity Fund Inc
Dear Shareholder:
The net asset value of each of your shares at August 31, 1996 was $37.89,
equivalent to $39.82 assuming the distributions from income and capital gains
paid in December 1995 were reinvested in additional shares of the Fund. This
represented an increase of 11.4% from $35.75 on August 31, 1995, compared with
an increase of 18.7% for the Standard & Poor's Index of 500 Stocks.
The past year was a happy one for many stock market investors. As you can see
from the above figures, the Fund's performance during fiscal 1996 fell short of
that of the S&P 500 Index. However, the Fund retained a cash position of 12-14%
during the year - a factor that penalizes performance in a rising market. Why
this cash position?
The cross-currents were numerous in the face of the rising market and the Fund's
cash position was intended to provide a measure of protection in case of a stock
market decline. We believe that it was prudent to have this cash, in accord with
our objectives and strategies.
Consistent with the Fund's primary objective of achieving above average
long-term capital appreciation and its secondary objective of current income, we
pursue several strategies:
1. Preserve capital;
2. Retain unrealized long-term capital gains. We believe it is often
unwise to sell securities that have sizable gains only to invest the
proceeds in securities that may have more uncertain long-term
potential. Furthermore, the possibility of lower capital gains taxes,
which has been discussed recently, will favor this approach of
minimizing realized capital gains currently; and
3. Obtain a reasonable return.
Our current posture? More of the same, and even more so, especially as members
of the Federal Reserve continue to indicate their inclination to raise interest
rates, which could act as a GNP restrainer.
At August 31, 1996, the Fund was 85.0% invested in common stocks; 15.0% of the
Fund's net assets was held in cash or its equivalent.
On the following pages you will find audited financial statements of the Fund at
August 31, 1996 and an unaudited list of portfolio changes for the six months
ended on that date.
If you would like to open an IRA or have any questions about the Fund, please
call 1-800-SALOMON (1-800-725-6666).
We appreciate the confidence you have demonstrated in the past and hope to
continue to serve you in future years.
Cordially,
/S/ IRVING BRILLIANT
--------------------
Irving Brilliant
President and Portfolio Manager
Page 1
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Results of an Investment in Salomon Brothers Opportunity Fund Inc
Set forth below are average annual total return figures for the periods
indicated and a graph showing the value of a hypothetical $10,000 investment
made in Salomon Brothers Opportunity Fund Inc on August 31, 1986. The average
annual total return figures and the information in the graph represent past
performance; they reflect changes in the price of the Fund's shares and assume
that any income dividends and/or capital gain distributions made by the Fund
during the period were reinvested in additional shares of the Fund. Investment
return and share price of the Fund will fluctuate. Shares when redeemed may be
worth more or less than original cost.
AVERAGE ANNUAL TOTAL RETURN
The average annual total return over the periods indicated below shows the
average annual percentage change in value of an investment in the Fund from the
beginning of the measuring period to the end of the measuring period. When
considering "average" total return for periods longer than one year, it is
important to note that the Fund's annual total return for any one year in the
period might have been greater or less than the average for the entire period.
The Fund's average annual total return for the periods indicated was as follows:
+11.37% for the one-year period beginning September 1, 1995 and ended
August 31, 1996;
+14.25% for the five-year period beginning September 1, 1991 and ended
August 31, 1996;
+11.15% for the ten-year period beginning September 1, 1986 and ended
August 31, 1996.
CHART
PERFORMANCE COMPARISON - GROWTH OF $10,000
Salomon Brothers
Date S&P 500 Opportunity Fund Inc
---- ------- --------------------
8/31/86 $10,000 $10,000
8/31/87 13,451 12,126
8/31/88 11,054 11,377
8/31/89 15,382 15,122
8/31/90 14,610 12,002
8/31/91 18,545 14,787
8/31/92 20,049 16,694
8/31/93 23,093 20,066
8/31/94 24,359 21,351
8/31/95 29,572 25,847
8/31/96 35,110 28,785
Past performance is not predictive of future performance
Page 2
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Portfolio Changes six months ended August 31, 1996 (unaudited)
(left column)
Additions+
- ---------------------------------------------------
Shares
Increased
-----------------
Airborne Freight.................. 4,000
Amcast Industrial................. 18,500
CNAFinancial...................... 4,000
Crown Crafts...................... 8,700
First Data........................ 2,000(1)
International Shipholding......... 9,500(1)
Kansas City Life Insurance........ 1,000
Loews............................. 7,000
Mississippi Chemical.............. 13,000(1)
National Semiconductor............ 10,000
Old Republic International........ 9,000
Silicon Graphics.................. 13,802(1)*
TRC Companies..................... 15,000
Tecumseh Products, Class B........ 6,000
Wellpoint Health Networks......... 4,300
(1) New addition (2) Elimination
+This list excludes changes resulting entirely from stock dividends and stock
splits.
*8,802 shares received from merger with Cray Research.
(right column)
Reductions
- --------------------------------------------------------
Shares
Decreased
-----------------
Alexander & Baldwin.................... 15,500
Allmerica Property & Casualty Companies 400
Apple Computer......................... 1,500
Bankers Trust NY....................... 3,500
Boatman's Bankshares................... 3,000
Boise Cascade.......................... 6,400(2)
Cray Research.......................... 40,000(2)
El Chico Restaurants................... 3,000
First Chicago NBD...................... 4,800
Foundation Health...................... 21,000
Genzyme................................ 8,000
Humana................................. 7,000
International Business Machines........ 3,000
Kahler Realty.......................... 30,000(2)
KeyCorp................................ 11,600
Kollmorgan............................. 4,000(2)
Magellan Health Services............... 8,000(2)
Micron Technology...................... 5,000(2)
New Germany Fund....................... 10,000
Overseas Shipholding Group............. 23,900
Paragon Trade Brands................... 3,000(2)
Plantronics............................ 3,500(2)
Protective Life........................ 3,000
Salomon................................ 3,600(2)
Tecumseh Products, Class A............. 3,500
Time Warner............................ 5,000
Trenwick Group......................... 4,000
Western National....................... 3,000(2)
Page 3
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Statement of Net Assets August 31, 1996
<TABLE>
<CAPTION>
Common Stocks - 85.0% of Net Assets
- -------------------------------------------------------------------------------------------------------
Value
Shares Cost (Note 1a)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Banks - 13.5%
484,488 Bank of New York ...................................... $ 2,721,411 $13,505,103
12,500 Bankers Trust NY ...................................... 559,920 971,875
46,000 BanPonce .............................................. 701,900 1,196,000
4,200 Boatmen's Bancshares .................................. 18,168 223,650
53,120 First Chicago NBD...................................... 570,621 2,264,240
20,000 First Hawaiian ........................................ 517,800 590,000
3,400 KeyCorp ............................................... 18,589 136,425
5,500 Mercantile Bancorporation ............................. 45,630 268,813
----------- -----------
5,154,039 19,156,106
----------- -----------
Basic Industry - 7.0%
5,000 ASARCO................................................. 157,800 129,375
27,000 Amcast Industrial...................................... 490,974 479,250
5,000 Champion International................................. 200,300 215,000
19,000 Crown Crafts .......................................... 224,965 163,875
9,500 International Shipholding.............................. 162,883 180,500
13,000 Mississippi Chemical................................... 271,014 292,500
85,500 Monsanto............................................... 1,050,826 2,746,688
18,000 NL Industries.......................................... 199,350 198,000
11,077 Newmont Mining......................................... 289,765 585,696
14,000 Rayonier .............................................. 404,730 554,750
4,000 Stone Container........................................ 70,240 55,500
68,000 TRC Companies* ........................................ 472,184 263,500
40,100 Tecumseh Products, Class A ............................ 1,106,775 2,105,250
41,000 Tecumseh Products, Class B ............................ 1,721,035 2,009,000
----------- -----------
6,822,841 9,978,884
----------- -----------
Biotechnology & Drugs - 1.6%
20,000 Genzyme*............................................... 277,571 477,500
30,800 Medeva - ADR .......................................... 301,498 473,550
5,000 Merck................................................. 164,800 328,125
25,375 Pharmacia & Upjohn .................................... 507,498 1,065,750
----------- -----------
1,251,367 2,344,925
----------- -----------
Construction - 1.2%
26,700 Ameron................................................ 526,254 967,875
34,250 Liberty Homes, Class A ................................ 435,000 411,000
24,750 Liberty Homes, Class B ................................ 325,688 327,938
----------- -----------
1,286,942 1,706,813
----------- -----------
Consumer Goods - 4.3%
44,500 Alexander & Baldwin ................................... 254,479 1,134,750
4,729 Ames Department Stores, Warrants, Series C* ........... 4,729 9,754
27,300 Archer-Daniels-Midland ................................ 399,000 484,575
16,400 El Chico Restaurants* ................................. 51,250 127,100
6,000 McKesson............................................... 191,250 255,750
100,000 Philips Electronics N.V................................ 1,281,995 3,387,500
31,500 Waban* ................................................ 332,240 669,375
----------- -----------
2,514,943 6,068,804
----------- -----------
</TABLE>
Page 4
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Statement of Net Assets August 31, 1996 (continued)
<TABLE>
<CAPTION>
Common Stocks (continued)
- -------------------------------------------------------------------------------------------------------
Value
Shares Cost (Note 1a)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Energy - 8.4%
14,000 Gilbert Associates, Class A ........................... $ 157,790 $ 154,000
31,000 Global Industrial Technologies*........................ 284,013 596,750
28,000 Murphy Oil ............................................ 859,865 1,225,000
67,000 Royal Dutch Petroleum, 5 Guilder...................... 1,664,599 10,008,125
----------- -----------
2,966,267 11,983,875
----------- -----------
Finance - 11.0%
36,000 Federal Home Loan Mortgage............................ 472,360 3,181,500
61,800 Leucadia National..................................... 165,751 1,405,950
125,000 Loews ................................................. 3,152,184 9,343,750
30,000 New Germany Fund ...................................... 281,167 397,500
48,000 Pioneer Group ......................................... 167,500 1,254,000
----------- -----------
4,238,962 15,582,700
----------- -----------
Health Care - 1.4%
5,250 Bergen Brunswig, Class A .............................. 96,675 146,344
19,000 Foundation Health* .................................... 360,890 570,000
8,095 Horizon/CMSHealthcare*................................. 123,392 101,188
23,000 Humana* ............................................... 188,255 431,250
22,878 Wellpoint Health Networks* ............................ 1,007,246 709,218
----------- -----------
1,776,458 1,958,000
----------- -----------
Insurance-Life, Accident & Health - 5.3%
7,500 American International Group.......................... 440,675 712,500
12,000 Aon ................................................... 293,390 606,000
7,000 Delphi Financial Group, Class A*....................... 136,500 210,000
37,125 Fremont General....................................... 571,663 1,007,016
5,900 Kansas City Life Insurance............................. 293,813 318,969
3,000 Protective Life........................................ 68,216 105,750
10,000 Provident Companies ................................... 180,500 370,000
46,000 UNUM .................................................. 644,644 2,921,000
45,000 USLIFE................................................. 614,841 1,316,250
----------- -----------
3,244,242 7,567,485
----------- -----------
Insurance-Property & Casualty - 18.7%
39,600 Allmerica Property & Casualty Companies............... 696,152 1,118,700
33,000 CNA Financial* ........................................ 1,051,403 3,316,500
328,000 Chubb ................................................. 2,802,937 14,555,000
40,000 Merchants Group ....................................... 600,000 755,000
22,000 Old Republic International............................ 353,680 489,500
110,375 Orion Capital ......................................... 1,613,469 5,546,340
15,500 Trenwick Group........................................ 433,063 825,375
----------- -----------
7,550,704 26,606,415
----------- -----------
</TABLE>
Page 5
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Statement of Net Assets August 31, 1996 (continued)
<TABLE>
<CAPTION>
Common Stocks (continued)
- -------------------------------------------------------------------------------------------------------
Value
Shares Cost (Note 1a)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Real Estate - 1.9%
39,900 Forest City Enterprises, Class A....................... $ 845,723 $ 1,725,675
20,700 Forest City Enterprises, Class B, Conv................. 364,301 905,625
----------- -----------
1,210,024 2,631,300
----------- -----------
Technology - 2.0%
8,500 Apple Computer......................................... 319,750 206,125
2,000 First Data............................................. 152,120 156,000
15,000 Intel ................................................ 137,313 1,197,188
5,000 International Business Machines....................... 275,485 571,875
20,000 National Semiconductor*................................ 313,700 367,500
13,802 Silicon Graphics* ..................................... 280,170 320,897
----------- -----------
1,478,538 2,819,585
----------- -----------
Telecommunications/Media - 0.3%
12,000 Heritage Media, Class A* .............................. 113,859 240,000
5,800 Time Warner........................................... 123,185 193,575
----------- -----------
237,044 433,575
----------- -----------
Transportation - 8.4%
39,600 AMR* .................................................. 1,828,141 3,247,200
130,000 APL.................................................... 1,338,789 3,071,250
52,000 Airborne Freight ...................................... 515,758 1,228,500
33,000 Canadian Pacific ...................................... 528,285 742,500
42,000 General Dynamics ...................................... 928,543 2,693,250
9,000 Lockheed Martin ....................................... 308,520 757,125
6,000 OMI* .................................................. 29,060 48,000
5,100 Overseas Shipholding Group............................. 71,224 95,625
----------- -----------
5,548,320 11,883,450
----------- -----------
TOTAL COMMON STOCKS ................................... $45,280,691 120,721,917
=========== ===========
</TABLE>
Page 6
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Statement of Net Assets August 31, 1996 (continued)
Corporate Short-Term Notes - 14.8%
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Principal Value
Amount (Note 1a)
- -------------------------------------------------------------------------------------------------------
<C> <C> <C>
$ 3,609,000 American Express Credit, 5.26%, due 09/03/96......................... $ 3,611,639
5,193,000 Exxon Asset Management, 5.27%, due 09/05/96.......................... 5,195,283
6,245,000 Ford Motor Credit, 5.30%, due 09/06/96............................... 6,246,841
5,935,000 General Electric Capital, 5.28%, due 09/04/96........................ 5,938,485
------------
TOTAL CORPORATE SHORT-TERM NOTES..................................... 20,992,248
------------
CASH AND RECEIVABLES - 0.3%............................ $ 480,380
LIABILITIES - (0.1)%................................... (210,380) 270,000
--------- ------------
NET ASSETS-100% - equivalent to $37.89 offering and
redemption price per share on 3,747,743 shares of
$.01 par value capital stock outstanding;
15,000,000 shares authorized ...................................... $141,984,165
============
Net Assets Consist of:
Capital stock........................................................ $ 37,477
Additional paid-in capital........................................... 60,062,694
Undistributed net investment income.................................. 1,432,827
Undistributed net realized gain...................................... 5,009,941
Net unrealized appreciation.......................................... 75,441,226
------------
Net Assets........................................................... $141,984,165
------------
</TABLE>
- ---------
*Non-income producing security.
See accompanying notes to financial statements.
Page 7
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Statement of Operations for the year ended August 31, 1996
Investment Income
<TABLE>
<S> <C> <C>
Income
Dividends (net of foreign withholding taxes of $84,832) ............................. $ 2,870,091
Interest ............................................................................ 1,008,923
------------
3,879,014
Expenses
Management fee ........................................................ $ 1,406,443
Shareholder services .................................................. 51,915
Audit and tax return preparation fees ................................. 48,150
Legal ................................................................. 37,905
Custodian ............................................................. 39,142
Printing .............................................................. 23,030
Registration and filing fees .......................................... 18,460
Directors' fees and expenses .......................................... 5,650
Other ................................................................. 23,680
-----------
1,654,375
Credits earned from custodian on cash balances......................... (1,852) 1,652,523
----------- ------------
Net investment income................................................................ 2,226,491
------------
Net Realized and Unrealized Gain on Investments
Net realized gain on investments..................................................... 5,924,655
Increase in net unrealized appreciation.............................................. 6,598,349
------------
Net realized gain and increase in net unrealized appreciation........................ 12,523,004
------------
Net increase in net assets resulting from operations................................. $14,749,495
============
</TABLE>
See accompanying notes to financial statements.
Page 8
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
August 31, August 31,
1996 1995
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income ..................................... $ 2,226,491 $ 1,635,190
Net realized gain on investments .......................... 5,924,655 5,072,992
Increase in net unrealized appreciation ................... 6,598,349 16,116,974
------------ ------------
Net increase in net assets resulting from operations ...... 14,749,495 22,825,156
------------ ------------
Distributions to Shareholders from
Net investment income ..................................... (1,749,572) (1,345,523)
Net realized gain on investments .......................... (4,957,121) (5,382,092)
------------ ------------
(6,706,693) (6,727,615)
------------ ------------
Capital Share Transactions
Proceeds from sales of 541,164 and 669,713 shares,
respectively ............................................ 20,104,930 21,215,202
Net asset value of 157,728 and 203,063 shares, respectively,
issued in reinvestment of net investment income and net
realized gain distributions ............................. 5,716,069 5,720,292
Payment for redemption of 621,760 and 975,251 shares,
respectively............................................. (23,116,339) (30,551,387)
------------ ------------
Change in net assets resulting from capital share transactions,
representing net increase of 77,132 and net decrease of
102,475 shares, respectively............................. 2,704,660 (3,615,893)
------------ ------------
Total increase in net assets............................... 10,747,462 12,481,648
Net Assets
Beginning of year ......................................... 131,236,703 118,755,055
------------ ------------
End of year (includes undistributed net investment income of
$1,432,827 and $955,908, respectively) .................. $141,984,165 $131,236,703
============ ============
See accompanying notes to financial statements.
Page 9
</TABLE>
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Notes to Financial Statements
1. Significant Accounting Policies
The Fund is registered as a non-diversified, open-end management investment
company under the Investment Company Act of 1940, as amended. The Fund's primary
objective is to achieve above-average long-term capital appreciation. Current
income is a secondary objective. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles ("GAAP"). The preparation of financial statements in
accordance with GAAP requires management to make estimates of certain reported
amounts in the financial statements. Actual amounts could differ from those
estimates.
(a) Securities Valuation. Portfolio securities listed or traded on
national securities exchanges, or reported on the NASDAQ national market
system, are valued at the last sale price, or if there have been no sales
on that day, at the mean of the current bid and ask price which represents
the current value of the security. Over-the-counter securities are valued
at the mean of the current bid and ask price. If no quotations are readily
available (as may be the case for securities of limited marketability),
such portfolio securities are valued at a fair value determined pursuant to
procedures established by the Board of Directors. Corporate short-term
notes with maturities of 60 days or less at date of purchase are valued at
cost plus interest earned, which approximates market value.
(b) Federal Income Taxes. The Fund has complied and intends to continue
to comply with the requirements of the Internal Revenue Code of 1986, as
amended, applicable to regulated investment companies, and to distribute
all of its taxable income to its shareholders. Therefore, no Federal income
tax or excise tax provision is required.
(c) Dividends and Distributions. The Fund declares and pays dividends
from net investment income and distributions from net realized gains, if
any, annually. Dividends and distributions to shareholders are recorded on
the ex-dividend date. The amount of dividends and distributions from net
investment income and net realized gains are determined in accordance with
federal income tax regulations, which may differ from GAAP. These
differences are due primarily to deferral of wash sale and post-October
losses. Permanent book/tax differences are reclassified within the capital
accounts based on their federal income tax basis treatment; temporary
differences do not require reclassifications. Dividends and distributions
which exceed net investment income and net realized gains for financial
reporting purposes but not for tax purposes are reported as dividends in
excess of net investment income and distributions in excess of net realized
capital gains.
(d) Other. Securities transactions are recorded as of the trade date.
Dividend income and dividends payable are recorded on the ex-dividend date.
Interest income is recognized when earned. Noncash dividend income is
recorded based on market or fair value of property received. Gains or
losses on sales of securities are calculated for financial accounting and
Federal income tax purposes on the identified cost basis.
Page 10
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Notes to Financial Statements (continued)
2. Capital Stock
Payable for Fund shares redeemed at August 31, 1996 amounted to $37,543.
3. Management Fee and Other Transactions
The Fund retains Salomon Brothers Asset Management Inc ("SBAM"), an
indirect wholly-owned subsidiary of Salomon Inc ("Salomon"), to act as
investment manager of the Fund subject to supervision by the Board of Directors
of the Fund. SBAM furnishes the Fund with office space and pays the compensation
of its officers. The management fee for these services is payable monthly at an
annual rate of 1% of average daily net assets. The management fee payable at
August 31, 1996 was $120,388.
If in any fiscal year the total expenses of the Fund, excluding taxes,
interest, brokerage and extraordinary expenses, but including the management
fee, exceed the most stringent expense limitation imposed by state securities
regulations applicable to the Fund, SBAM will pay or reimburse the Fund for the
excess. Currently, this limitation on an annual basis is 2.5% of the first $30
million of average daily net assets, 2.0% of the next $70 million of average
daily net assets and 1.5% of average daily net assets in excess of $100 million.
For the year ended August 31, 1996, there was no such reimbursement.
Brokerage commissions of $120 were paid to Salomon Brothers Inc, the Fund's
distributor and an indirect wholly-owned subsidiary of Salomon, for transactions
executed on behalf of the Fund during the year ended August 31, 1996.
During the year ended August 31, 1996, the Fund received dividend income of
$2,848 from Salomon. At August 31, 1996, the Fund did not hold shares of
Salomon.
Investors Bank & Trust Company ("IBT") serves as custodian for the Fund.
Prior to May 1, 1996, Boston Safe Deposit and Trust Company ("Boston Safe") was
the Fund's custodian. During the year ended August 31, 1996, custodian fees paid
to IBT and Boston Safe were reduced by $102 and $1,750, respectively, relating
to credits earned on cash balances held by each custodian.
4. Portfolio Activity
The cost of securities purchased and proceeds from securities sold
(excluding corporate short-term notes) during the year ended August 31, 1996
aggregated $6,306,737 and $16,585,337, respectively.
Cost of securities held (excluding corporate short-term notes) on August
31, 1996 for Federal income tax purposes was $45,476,718. As of August 31, 1996,
gross unrealized appreciation and depreciation, based on cost for Federal income
tax purposes, amounted to $76,054,718 and $809,519, respectively, resulting in
net unrealized appreciation of $75,245,199.
Page 11
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Financial Highlights
Selected data per share of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Year Ended August 31,
-----------------------------------------------------------------
1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------
Per Share Operating Performance:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year .... $35.75 $31.47 $31.91 $27.64 $25.16
------ ------ ------ ------ ------
Net investment income.................. .60 .45 .42 .57 .36
Net gains (or losses) on securities
(both realized and unrealized)....... 3.38 5.68 1.48 4.85 2.79
------ ------ ------ ------ ------
Total from investment operations .... 3.98 6.13 1.90 5.42 3.15
------ ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income .. (.48) (.37) (.64) (.345) (.50)
Distributions from net realized gain
on investments....................... (1.36) (1.48) (1.70) (.805) (.17)
------ ------ ------ ------ ------
Total dividends and distributions ... (1.84) (1.85) (2.34) (1.15) (.67)
------ ------ ------ ------ ------
Net asset value, end of year........... $37.89 $35.75 $31.47 $31.91 $27.64
====== ====== ====== ====== ======
Total investment return based on net
asset value per share................ +11.4% +21.1% +6.4% +20.2% +12.9%
Ratios/Supplemental data:
Net assets, end of year (thousands) ... $141,984 $131,237 $118,755 $116,607 $101,679
Ratio of expenses to average net assets 1.18% 1.18% 1.22% 1.23% 1.25%
Ratio of net investment income to
average net assets................... 1.59% 1.39% 1.29% 1.86% 1.28%
Portfolio turnover rate................ 5% 8% 13% 10% 11%
Average broker commission rate......... $0.0591 - - - -
</TABLE>
See accompanying notes to financial statements.
Page 12
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
Report of Independent Accountants
To the Board of Directors and Shareholders of
Salomon Brothers Opportunity Fund Inc
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Salomon Brothers Opportunity Fund Inc (the "Fund") at August 31, 1996, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial highlights
for each of the five years in the period then ended, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 1996 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
New York, New York
October 11, 1996
- --------------------------------------------------------------------------------
TAX INFORMATION (UNAUDITED)
We are required by the Internal Revenue Code to advise you within 60 days
of the Fund's fiscal year end as to the federal tax status of distributions paid
by the Fund during such fiscal year. Accordingly, during its fiscal year ended
August 31, 1996, the Fund paid distributions from realized long-term capital
gains of $1.18 per share which are taxable as such.
We wish to advise you that the corporate dividends received deduction for
the Fund is 76%.
- --------------------------------------------------------------------------------
Page 13
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
(left column)
Directors
Irving Brilliant
President
Benito Gaguine
Attorney at Law
Rosalind A. Kochman
Administrator and counsel,
Kochman Eye Surgical Facility
Irving Sonnenschein
Partner of law firm of Sonnenschein,
Sherman & Deutsch
Officers
Irving Brilliant
President and Portfolio Manager
Lawrence H. Kaplan
Executive Vice President and General Counsel
Alan M. Mandel
Treasurer
Tana E. Tselepis
Secretary
Janet S. Tolchin
Assistant Treasurer
Jennifer G. Muzzey
Assistant Secretary
(right column)
Salomon Brothers Opportunity Fund Inc
7 World Trade Center
New York, New York 10048
1-800-SALOMON (1-800-725-6666)
Investment Manager
Salomon Brothers Asset Management Inc
7 World Trade Center
New York, New York 10048
Distributor
Salomon Brothers Inc
7 World Trade Center
New York, New York 10048
Custodian
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
Dividend Disbursing and Transfer Agent
First Data Investor Services Group, Inc.
53 State Street
Boston, Massachusetts 02109-2873
Legal Counsel
Simpson Thacher & Bartlett
New York, New York 10017-3909
Independent Accountants
Price Waterhouse LLP
New York, New York 10036
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of
Salomon Brothers Opportunity Fund Inc. It is not authorized for distribution to
prospective investors unless accompanied or preceded by an effective Prospectus
for the Fund, which contains information concerning the Fund's investment
policies and expenses as well as other pertinent information.
Page 14
<PAGE>
(left column)
Salomon Brothers Asset Management
P.O. Box 9109
Boston, MA 02205-9109
FIRST-CLASS
U.S. POSTAGE
PAID
BOSTON, MA
PERMIT No. 54201
(right column)
Salomon Brothers
Opportunity Fund Inc
Annual Report
- -----------------------------------------
Salomon Brothers Asset Management
-----------------------------------------
<PAGE>
(left column)
Salomon Brothers Asset Management
P.O. Box 9109
Boston, MA 02205-9109
FIRST-CLASS
U.S. POSTAGE
PAID
BOSTON, MA
PERMIT No. 54201
(right column)
Salomon Brothers
Opportunity Fund Inc
Annual Report
AUGUST 31, 1996
- -----------------------------------------
Salomon Brothers Asset Management
-----------------------------------------
