<PAGE>
Salomon Brothers
Opportunity Fund Inc
Semi-Annual Report
FEBRUARY 28, 1999
- ---------------------------------------------------------
Salomon Brothers Asset Management
-------------------------------------------------------
<PAGE>
Salomon Brothers
Opportunity Fund Inc
April 15, 1999
Dear Shareholder:
We are pleased to provide this semi-annual report for Salomon Brothers
Opportunity Fund Inc ("Fund") for the period ended February 28, 1999. Included
are a market commentary, performance results, a summary of major portfolio
changes, and a statement of the Fund's investments and financial statements for
the six months ended February 28, 1999.
During the six months ended February 28, 1999, the Fund's net asset value
decreased from $47.36 per share to $46.51 per share. Dividends totaling $5.41
were paid during this period. This total represents $0.47 per share from net
investment income and $4.94 per share from net realized gains. Assuming the
reinvestment of these distributions in additional shares of the Fund, the net
asset value return for the six months ended February 28, 1999, was 9.09%. During
the same period, the Standard & Poors 500 Index ("S&P 500"), a standard measure
of the U.S. stock market, returned 30.29%.
MARKET REVIEW
The last six months rewarded patience and intestinal fortitude. Global markets
had experienced extreme volatility in August of 1998, primarily in response to
events within Russia. A dramatic devaluation of the ruble and political
instability alarmed investors around the world. The resulting global uncertainty
ignited a "flight to quality" where investors abandoned equities and
credit-sensitive fixed-income products for the safety of Treasuries. The U.S.
stock market plummeted 13.94% in August during this general sell-off.
The Federal Reserve Board responded to this instability with successive rate
cuts on September 29th, October 15th and November 17th. The result was a rebound
in the U.S. stock market, which produced returns of 12.63% and 4.98% in October
and November. Investment conditions in the U.S. proved to be exceptional as
inflation remained subdued in the midst of strong domestic economic growth.
Extensive merger and acquisition activity late in 1998 acted as another catalyst
generating stock market performance.
Market gains were by no means evenly distributed however. A few stocks within a
few sectors had driven the market higher; and those stocks were characterized by
their large capitalizations and rapid growth. As the overall market experienced
a deceleration of earnings growth, investors generally abandoned companies that
were not capable of sustaining or accelerating their growth. As a result,
investments were funneled into the handful of companies that continued to meet
or exceed expectations. The share prices of these companies skyrocketed, driving
some market indices, including the S&P 500, upward at a rapid pace.
<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 HIGHLIGHTS
Bank of New York, General Dynamics and Freddie Mac were among the companies
driving the Fund's positive returns over this six-month period. The Fund's
underperformance versus the benchmark was due in part to investments in Tecumseh
Products-Class B, Monsanto and Orion Capital. The more important factor creating
the discrepancy between the Fund and its benchmark involved stocks that were
omitted from the portfolio. Technology stocks, which were a crucial component of
S&P 500 performance, were underweighted in the Fund. Also, several large cap
growth companies that are trading at very high valuations were not held by the
Fund.
The Fund has steered clear of these investments because of their lofty
valuations. At their current levels, Fund management believes that these stocks
are vulnerable to a significant correction. Positions in Banking, Insurance,
Finance and Transportation will permit the Fund to take a more reasonable
approach to pursuing consistent long-term returns during the balance of 1999.
Thank you for continuing to pursue your long-term financial objectives with the
Salomon Brothers Opportunity Fund Inc.
Cordially,
/s/ Irving Brilliant
Irving Brilliant
President and Portfolio Manager
* * *
If you would like to open an IRA or have any questions about the Fund, please
call 1-888-777-0102 (toll free).
<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 February 28, 1999. 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:
(7.00)% for the one-year period beginning March 1, 1998 and ended February
28, 1999; 15.39% for the five-year period beginning March 1, 1994 and ended
February 28, 1999; 12.95% for the ten-year period beginning March 1, 1989
and ended February 28, 1999.
PERFORMANCE COMPARISON -- GROWTH OF $10,000
(Unaudited)
Salomon Brothers
Standard & Poor's Opportunity
DATE 500 Index Fund Inc
- ---- ----------------- ----------------
2/89 $10,000 $10,000
8/89 11,981 12,376
8/90 9,508 11,758
8/89 11,981 14,915
8/92 13,226 16,095
8/93 15,897 18,538
8/94 16,915 19,550
8/95 20,478 23,737
8/96 22,806 28,181
8/97 35,546 39,631
8/98 30,969 42,848
2/99 33,783 55,818
Past performance is not predictive of future performance
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
Major Portfolio Changes (unaudited)
For the Six Months Ended February 28, 1999
ADDITIONS+
- -----------------------------------------------
Shares
---------
Airborne Freight.................. 4,000
Amcast Industrial................. 6,700
Canadian Pacific.................. 4,000
Foundation Health Systems,
Class A Shares.................. 4,300
Lafarge Corp...................... 13,000(1)
Mississippi Chemical.............. 10,000
Murphy Oil........................ 4,000
National Processing............... 7,000
Philip Morris..................... 4,000(1)
Pogo Producing.................... 18,000(1)
REDUCTIONS+
- -----------------------------------------------
Shares
---------
Allmerica Financial............... 10,800
American International Group...... 16,875(2)
American General.................. 5,300
Aon............................... 14,000(2)
Bank of New York.................. 55,000
Champion International............ 5,000(2)
Delphi Financial Group,
Class A Shares.................. 4,426
Dravo............................. 35,400(2)
FDX............................... 4,000(2)
Federal Home Loan Mortgage........ 10,000
First Chicago NBD................. 14,020(2)
Forest City Enterprises,
Class A Shares.................. 6,000
General Dynamics.................. 3,900
Intel............................. 6,500
Loews............................. 22,000
Mercantile Bancorporation......... 4,000
NationsBank....................... 5,481(2)
Seagate Technology................ 5,000(2)
UNUM.............................. 8,000
- --------------
(1) New addition.
(2) Elimination.
+ Exclusive of changes resulting entirely from mergers, stock dividends, and
stock splits.
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
Schedule of Investments (unaudited)
February 28, 1999
<TABLE>
<CAPTION>
Shares Security Value
- -------------------------------------------------------------------------------------------------------------------
COMMON STOCK -- 80.4%
<S> <C> <C>
Banks -- 19.2%
875,976 Bank of New York................................................... $ 30,604,411
3,000 Mellon Bank........................................................ 202,875
4,250 Mercantile Bancorp................................................. 193,906
130,000 Popular............................................................ 4,314,375
------------
35,315,567
------------
Basic Industry -- 4.3%
35,600 Amcast Industrial.................................................. 674,175
3,500 Citation *......................................................... 35,656
6,000 Deltic Timber...................................................... 143,250
55,000 Mississippi Chemical............................................... 563,750
10,000 MotivePower Industries *........................................... 275,625
18,000 NL Industries...................................................... 174,375
15,000 National Processing *.............................................. 90,938
11,077 Newmont Mining..................................................... 191,078
28,000 Rayonier........................................................... 1,146,250
3,960 Smurfit -- Stone Container *....................................... 71,528
17,100 Solutia............................................................ 304,594
2,500 Southern Peru Copper............................................... 24,688
82,500 TRC Cos. *......................................................... 386,719
Tecumseh Products:
34,100 Class A Shares................................................... 1,679,425
47,000 Class B Shares................................................... 2,126,750
------------
7,888,801
------------
Biotechnology & Drugs -- 2.7%
11,000 Angeion *.......................................................... 7,906
15,300 Medeva-- ADR....................................................... 103,275
76,500 Monsanto........................................................... 3,485,531
25,375 Pharmacia & Upjohn................................................. 1,382,937
------------
4,979,649
------------
Construction -- 1.1%
25,800 Ameron............................................................. 1,012,650
13,000 Lafarge Corp....................................................... 414,375
Liberty Homes:
29,050 Class A Shares................................................... 265,081
24,750 Class B Shares................................................... 293,906
------------
1,986,012
------------
Consumer Goods -- 5.6%
35,500 Alexander & Baldwin................................................ 701,125
2,000 Ames Department Stores *........................................... 60,000
20,000 BJ's Wholesale Club *.............................................. 871,250
9,700 Cone Mills *....................................................... 47,288
10,900 Harcourt General................................................... 499,356
28,500 Homebase *......................................................... 147,844
14,800 IBP................................................................ 333,000
20,737 News Corp.-- ADR................................................... 544,346
</TABLE>
See Notes to Financial Statements.
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
Schedule of Investments (unaudited) (continued)
February 28, 1999
<TABLE>
<CAPTION>
Shares Security Value
- -------------------------------------------------------------------------------------------------------------------
Consumer Goods -- 5.6% (continued)
<S> <C> <C>
4,000 Philip Morris...................................................... $ 156,500
100,000 Philips Electronics N.V.-- ADR..................................... 6,962,500
------------
10,323,209
------------
Energy -- 6.9%
32,000 Murphy Oil *....................................................... 1,094,000
18,000 Pogo Producing..................................................... 166,500
260,000 Royal Dutch Petroleum, 5 Guilder................................... 11,407,500
------------
12,668,000
------------
Finance -- 8.3%
15,010 American General................................................... 1,099,483
80,000 Federal Home Loan Mortgage......................................... 4,710,000
60,300 Leucadia National *................................................ 1,797,694
88,000 Loews.............................................................. 6,880,500
48,000 Pioneer Group...................................................... 783,000
------------
15,270,677
------------
Health Care -- 1.4%
12,000 Foundation Health Systems, Class A Shares *........................ 96,000
6,827 HEALTHSOUTH *...................................................... 79,364
36,000 Humana *........................................................... 630,000
22,077 Wellpoint Health Networks *........................................ 1,741,323
------------
2,546,687
------------
Insurance - Life, Accident & Health -- 1.9%
4,313 Delphi Financial Group, Class A Shares............................. 206,754
1,714 Delphi International Ltd........................................... 14,569
24,450 Fremont General.................................................... 482,887
5,900 Kansas City Life Insurance......................................... 488,225
28,000 Provident Cos...................................................... 917,000
30,400 UNUM............................................................... 1,360,400
------------
3,469,835
------------
Insurance - Property & Casualty -- 18.0%
5,040 Allmerica Financial................................................ 269,010
105,300 CNA Financial *.................................................... 3,573,619
328,000 Chubb.............................................................. 19,598,000
5,000 Intercargo......................................................... 56,875
40,000 Merchants Group.................................................... 865,000
45,000 Old Republic International......................................... 846,563
220,750 Orion Capital...................................................... 7,298,547
4,000 Reliance Group Holdings............................................ 41,250
185,000 Trenwick Group..................................................... 536,500
------------
33,085,364
------------
Real Estate -- 2.2%
Forest City Enterprises:
121,700 Class A Shares................................................... 2,616,550
66,100 Class B Shares, Convertible...................................... 1,412,887
------------
4,029,437
------------
</TABLE>
See Notes to Financial Statements.
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
Schedule of Investments (unaudited) (continued)
February 28, 1999
<TABLE>
<CAPTION>
Shares Security Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Technology -- 1.4%
10,000 Inso *............................................................. $ 69,688
17,500 Intel.............................................................. 2,098,906
15,000 National Semiconductor *........................................... 157,500
21,302 Silicon Graphics *................................................. 339,501
------------
2,665,595
------------
Transportation -- 7.4%
78,200 AMR *.............................................................. 4,390,650
73,000 Airborne Freight................................................... 2,847,000
32,000 Canadian Pacific................................................... 594,000
80,100 General Dynamics................................................... 4,841,044
9,500 International Shipholding.......................................... 149,625
18,000 Lockheed Martin.................................................... 678,375
11,600 Overseas Shipholding Group......................................... 141,375
------------
13,642,069
------------
TOTAL COMMON STOCK (Cost -- $39,149,234) .......................... 147,870,902
------------
</TABLE>
<TABLE>
<CAPTION>
Face
Amount Security Value
- -------------------------------------------------------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS -- 0.9%
<S> <C> <C>
Consumer Goods -- 0.9%
$1,750,000 Fine Host, 5.000% due 11/1/04 +.................................... 1,260,000
2,500,000 Sunbeam, zero coupon due 3/25/18................................... 309,375
------------
TOTAL CONVERTIBLE CORPORATE BONDS
(Cost -- $1,804,797)................................................ 1,569,375
------------
TOTAL LONG-TERM INVESTMENTS (Cost-- $40,954,031)................... 149,440,277
------------
CORPORATE SHORT-TERM NOTES -- 18.7%
6,182,000 American Express Credit Corp., 4.824% due 3/4/99................... 6,182,000
4,369,000 Associates First Capital Corp., 4.824% due 3/3/99.................. 4,369,000
6,847,000 Chevron Oil Finance Corp., 4.814% due 3/1/99....................... 6,847,000
8,882,000 Ford Motor Credit Corp., 4.854% due 3/5/99......................... 8,882,000
8,160,000 General Electric Capital Corp., 4.794% due 3/2/99.................. 8,160,000
------------
TOTAL CORPORATE SHORT-TERM NOTES (Cost -- $34,440,000)............. 34,440,000
------------
TOTAL INVESTMENTS-- 100% (Cost -- $75,394,031**)................... $183,880,277
============
</TABLE>
- -------------
* Non-income producing security.
+ Security is exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers.
** Aggregate cost for Federal income tax purposes is substantially the same.
See 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 Assets and Liabilities (unaudited)
February 28, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost -- $40,954,031)........................................ $149,440,277
Corporate short-term notes, at value (Cost -- $34,440,000)......................... 34,440,000
Cash............................................................................... 490
Receivable for securities sold..................................................... 199,411
Dividends and interest receivable.................................................. 105,544
------------
Total Assets....................................................................... 184,185,722
------------
LIABILITIES:
Management fees payable............................................................ 297,916
Payable for Fund shares reacquired................................................. 159,681
Accrued expenses................................................................... 24,653
------------
Total Liabilities.................................................................. 482,250
------------
Total Net Assets..................................................................... $183,703,472
============
NETASSETS:
Common stock ($0.01 par value, authorized 15,000,000 shares;
3,950,139 shares outstanding)...................................................... $ 39,501
Additional paid-in capital......................................................... 70,142,396
Undistributed net investment income................................................ 191,651
Accumulated net realized gain on security transactions............................. 4,843,678
Net unrealized appreciation on investments......................................... 108,486,246
------------
Total Net Assets..................................................................... $183,703,472
============
Net Asset Value Per Share ($183,703,472 / 3,950,139 shares).......................... $46.51
=======
</TABLE>
See 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 Operations (unaudited)
For the Six Months Ended February 28, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends.......................................................................... $ 1,163,797
Interest........................................................................... 957,179
Less: Foreign withholding tax...................................................... (32,509)
-----------
Total Investment Income............................................................ 2,088,467
-----------
EXPENSES:
Management fees (Note 2)........................................................... 936,975
Custodian.......................................................................... 28,640
Shareholder services............................................................... 23,270
Audit and tax services............................................................. 21,480
Shareholder communication fees..................................................... 18,795
Legal.............................................................................. 17,005
Registration fees.................................................................. 8,055
Directors' fees (Note 2)........................................................... 3,580
Other.............................................................................. 7,160
-----------
Total Expenses..................................................................... 1,064,960
-----------
Net Investment Income................................................................ 1,023,507
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales.............................................................. 12,876,927
Cost of securities sold.......................................................... 4,590,053
-----------
Net Realized Gain.................................................................. 8,286,874
-----------
Change in Net Unrealized Appreciation on Investments:
Beginning of period.............................................................. 101,396,990
End of period.................................................................... 108,486,246
-----------
Increase in Net Unrealized Appreciation............................................ 7,089,256
-----------
Net Gain on Investments.............................................................. 15,376,130
-----------
Increase in Net Assets From Operations............................................... $16,399,637
===========
</TABLE>
See Notes to Financial Statements.
Page 9
<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
Statements of Changes in Net Assets
For the Six Months Ended February 28, 1999 (unaudited)
and the Year Ended August 31, 1998
<TABLE>
<CAPTION>
1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................... $ 1,023,507 $ 1,720,273
Net realized gain........................................ 8,286,874 15,568,652
Increase (decrease) in net unrealized appreciation....... 7,089,256 (22,723,931)
------------ ------------
Increase (Decrease) in Net Assets From Operations........ 16,399,637 (5,435,006)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.................................... (1,859,709) (1,444,133)
Net realized gains....................................... (18,345,688) (5,165,552)
------------ ------------
Decrease in Net Assets From
Distributions to Shareholders.......................... (20,205,397) (6,609,685)
------------ ------------
FUND SHARE TRANSACTIONS (NOTE 4):
Net proceeds from sale of shares......................... 1,645,618 5,372,304
Net asset value of shares issued for
reinvestment of distributions.......................... 16,435,062 5,244,472
Cost of shares reacquired................................ (7,840,594) (9,798,741)
------------ ------------
Increase in Net Assets From Fund Share Transactions...... 10,240,086 818,035
------------ ------------
Increase (Decrease) in Net Assets.......................... 6,434,326 (11,226,656)
NET ASSETS:
Beginning of period...................................... 177,269,146 188,495,802
------------ ------------
End of period*........................................... $183,703,472 $177,269,146
------------ ------------
------------ ------------
*Includes undistributed net investment income of:........ $191,651 $1,027,853
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements.
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 (unaudited)
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. Short-term securities
with less than 60 days remaining to maturity when acquired by the Fund are
valued at amortized cost 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 substantially 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 sales 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. To the extent they exceed net investment income
and net realized capital gains for tax purposes, they are reported as tax
return of capital.
(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 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
Notes to Financial Statements (unaudited)(continued)
2. Management Fee and Other Transactions
The Fund retains Salomon Brothers Asset Management Inc ("SBAM"), a
wholly-owned subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), to act
as investment manager of the Fund, subject to the 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.
3. Portfolio Activity
During the six months ended February 28, 1999, the aggregate cost of
purchases and proceeds from sales of investments (including maturities, but
excluding short-term securities) were as follows:
Purchases........................................ $ 1,635,470
============
Sales............................................ $ 12,876,927
============
At February 28, 1999, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
Gross unrealized appreciation................... $110,273,740
Gross unrealized depreciation................... (1,787,494)
------------
Net unrealized depreciation..................... $108,486,246
============
4. Shares of Capital Stock
At February 28, 1999, the Fund had 15,000,000 shares of capital stock
authorized with a par value of $0.01 per share. Transactions in shares for the
portfolio were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
February 28, 1999 August 31, 1998
---------------------------- ---------------------------
Shares Amount Shares Amount
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold................................ 33,428 $ 1,645,618 97,900 $ 5,372,304
Shares issued on reinvestment.............. 333,965 16,435,062 98,645 5,244,472
Shares reacquired.......................... (159,989) (7,840,594) (176,190) (9,798,741)
-------- ----------- -------- -----------
Net Increase............................... 207,404 $10,240,086 20,355 $ 818,035
======== =========== ======== ===========
</TABLE>
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
Financial Highlights
Selected data per share of capital stock outstanding throughout each year ended
August 31, except where noted:
<TABLE>
<CAPTION>
1999(1) 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $47.36 $50.64 $37.89 $35.75 $31.47 $31.91
------ ------ ------ ------ ------ ------
Income (Loss) From Operations:
Net investment income.......... 0.24 0.46 0.43 0.60 0.45 0.42
Net realized and unrealized gain (loss) 4.32 (1.95) 14.46 3.38 5.68 1.48
------ ------ ------ ------ ------ ------
Total Income (Loss) From Operations 4.56 (1.49) 14.89 3.98 6.13 1.90
------ ------ ------ ------ ------ ------
Less Distributions From:
Net investment income.......... (0.47) (0.39) (0.62) (0.48) (0.37) (0.64)
Net realized gains............. (4.94) (1.40) (1.52) (1.36) (1.48) (1.70)
------ ------ ------ ------ ------ ------
Total Distributions.............. (5.41) (1.79) (2.14) (1.84) (1.85) (2.34)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period... $46.51 $47.36 $50.64 $37.89 $35.75 $31.47
====== ====== ====== ====== ====== ======
Total Return..................... 9.1%++ (3.3)% 40.5% 11.4% 21.1% 6.4%
Net Assets, End of Period (000s). $183,703 $177,269 $188,496 $141,984 $131,237 $118,755
Ratios to Average Net Assets:
Expenses....................... 1.14%+ 1.12% 1.16% 1.18% 1.18% 1.22%
Net investment income.......... 1.09+ 0.83 0.95 1.59 1.39 1.29
Portfolio Turnover Rate.......... 1% 3% 4% 5% 8% 13%
</TABLE>
(1) For the six months ended February 28, 1999 (unaudited).
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
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
Directors
IRVING BRILLIANT
President
B. ALEXANDER GAGUINE
Consultant
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
LEWIS E. DAIDONE
Executive Vice President and Treasurer
ANTHONY PACE
Assistant Controller
CHRISTINA T. SYDOR
Secretary
Salomon Brothers Opportunity Fund Inc
7 World Trade Center
New York, New York 10048
1-888-777-0102, toll free
INVESTMENT MANAGER
Salomon Brothers Asset Management Inc
7 World Trade Center
New York, New York 10048
DISTRIBUTOR
CFBDS, Inc.
21 Milk Street
Boston, Massachusetts 02109-5408
CUSTODIAN
PNC Bank N.A.
200 Stevens Drive
Lester, Pennsylvania 19113
DIVIDEND DISBURSING AND TRANSFER AGENT
First Data Investor Services Group, Inc.
53 State Street
Boston, Massachusetts 02109-2873
LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3909
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
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>
Salomon Brothers Asset Management
P.O. Box 5127
Westborough, MA 01581-5127
---------------------
FIRST-CLASS
U.S. POSTAGE
PAID
NORTHREADING, MA
PERMITNo. 105
--------------------
OPSEMI 2/99
