<PAGE>
Smith Barney Shearson
DAILY
1994 DIVIDEND
ANNUAL FUND INC.
REPORT ..........................
MARCH 31, 1994
SMITH BARNEY SHEARSON
----------------------
<PAGE>
Daily Dividend Fund Inc.
DEAR SHAREHOLDER:
We are pleased to provide the Annual Report for Smith Barney Shearson Daily
Dividend Fund Inc. for the fiscal year ended March 31, 1994. During the past
twelve months the Fund paid dividend distributions totaling $.02708 per share,
resulting in a compounded annual yield of 2.74%.
Since March 1991, when the economy entered into a recovery period, the rate of
economic expansion remained sub-par at best. It wasn't until 1993 -- two years
later -- that the recovery became more broadly based and on solid footing.
Corporations had restructured and had begun to reap the benefits. The consumer
picture had improved, fueled by lower interest rates and brighter employment
prospects. Banks' asset quality improved, lending increased and profits
surged.
By the fourth quarter of 1993 it was evident as auto sales and business
capital
spending soared that the economy was growing at a much faster pace. Gross
Domestic Product grew at a rate of 7.5%. This prompted the Federal Reserve to
reassess its monetary policy. On February 4, 1994, Chairman Greenspan
announced
a reverse course of action and raised short-term interest rates by 25 basis
points to 3.25% as a "preemptive" move to head off future inflation.
Alan Greenspan announced that his goal was to get the inflation-adjusted Fed
funds rate back to "neutral" -- meaning targeting the "correct" level on Fed
funds which brings about desired growth and inflation levels. Historically,
depending on how inflation performs during the first year of a recovery, Fed
funds have risen between 100 and 300 basis points. In addition, Fed funds have
usually traded (on average) at approximately 225 basis points over the
inflation
rate, which currently is 2.0%-2.5%, leading economists to estimate that Fed
funds should be trading at 4.25%-5.00% by year end. The nominal funds rate
calculation will depend on where individual economists perceive the actual
inflation rate is and also on their historical data.
At this point in time, the Federal Reserve Bank has raised the overnight Fed
funds rate by a total of .75 basis points to 3.75% and another 25 basis points
is expected by the next Federal Open Market Committee meeting in May. Since
the
outlook is for short-term rates to continue to rise, the short-term yield
curve
has steepened dramatically. Three-month Euro certificates of deposit are
yielding 4.30% and one-year Euro certificates of deposit are yielding 5.40%.
At
these levels, short-term rates are still historically very low and there
remains
plenty of room to raise rates before choking off the recovery.
We are employing a defensive investment strategy with the majority of our
buying
programs three months and under in maturity. As short-term rates rise, we have
recently increased our position in LIBOR (a short-term, international bank
rate)
and
1
<PAGE>
Treasury bill-based floaters as the yields on these securities reset weekly
and/or monthly.
Going forward, we will continue to strive to maintain our high investment
standards while providing competitive investment yields. We appreciate your
continued confidence and support.
Sincerely,
<TABLE>
<S> <C>
Heath B. McLendon Phyllis M. Zahorodny
Chairman of the Board Vice President
and Investment Officer and Investment Officer
May 16, 1994
</TABLE>
2
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
COMMERCIAL PAPER - 36.8%
ABBEY NATIONAL, N.A.
$ 25,000,000 3.466% 4/04/94 $
24,997,812
25,000,000 3.353% 6/09/94
24,846,875
A.I. CREDIT CORPORATION
20,000,000 3.293% 7/08/94
19,823,600
AIG FUNDING INC.
15,300,000 3.884% 7/25/94
15,112,809
AT & T CORPORATION
50,000,000 3.149% 4/27/94
49,887,333
AT & T CAPITAL CORPORATION
25,000,000 3.517% 4/21/94
24,951,389
ASSOCIATES CORP. OF N.A.
25,000,000 3.145% 4/11/94
24,978,334
25,000,000 3.124% 4/12/94
24,976,320
50,000,000 3.541% 4/26/94
49,877,778
25,000,000 3.611% 4/29/94
24,930,000
25,000,000 3.183% 5/11/94
24,912,500
BANCA COMMERCIALE ITALIANO
35,000,000 3.711% 5/02/94
34,893,788
50,000,000 3.693% 5/16/94
49,775,625
BANKAMERICA CORPORATION
50,000,000 3.288% 7/11/94
49,546,202
30,000,000 3.263% 7/14/94
29,721,800
BANKERS TRUST NEW YORK CORPORATION
25,000,000 3.435% 4/11/94
24,947,787
50,000,000 3.510% 4/11/94
49,977,963
25,000,000 3.509% 4/25/94
24,941,833
100,000,000 3.616% 4/29/94
99,719,612
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - -------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - -------------
<C> <S> <C>
<C>
COMMERCIAL PAPER (CONTINUED)
BANKERS TRUST NEW YORK CORPORATION (CONTINUED)
$ 25,000,000 3.697% 5/20/94 $
24,875,118
25,000,000 3.359% 7/08/94
24,775,417
50,000,000 3.252% 7/11/94
49,551,111
BANQUE NATIONAL DE PARIS
35,000,000 3.869% 7/22/94
34,584,044
25,000,000 3.263% 7/25/94
24,743,646
BAYERISCHE VEREINSBANK A.G.
25,000,000 3.766% 6/17/94
24,805,548
BEAR STEARNS COMPANY
25,000,000 3.853% 6/13/94
24,806,347
BUDGET FUNDING INC.
30,000,000 3.660% 4/25/94
29,927,000
25,000,000 3.672% 5/09/94
24,903,681
50,000,000 3.693% 5/24/94
49,729,847
CCBP INTERNATIONAL INC.
25,000,000 3.247% 4/11/94
24,977,639
CANADIAN WHEAT BOARD
20,000,000 3.868% 7/18/94
19,770,800
20,000,000 3.869% 7/21/94
19,764,433
25,000,000 3.869% 7/22/94
24,702,889
CARIPLO FINANCE INC.
25,000,000 3.226% 4/07/94
24,986,666
25,000,000 3.283% 4/25/94
24,945,833
CIESCO L.P.
20,000,000 3.413% 4/04/94
19,994,333
50,000,000 3.496% 5/03/94
49,845,778
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
COMMERCIAL PAPER (CONTINUED)
CIT GROUP HOLDINGS INC.
$ 25,000,000 3.693% 5/09/94 $
24,903,153
35,000,000 3.694% 5/10/94
34,860,846
40,000,000 3.672% 5/24/94
39,785,056
CITICORP
50,000,000 3.613% 4/18/94
49,915,000
25,000,000 3.895% 7/11/94
24,729,965
COMMERZBANK U.S. FINANCE
76,000,000 3.521% 4/28/94
75,800,500
COMPAGNIE BANCAIRE USA FINANCE CORPORATION
16,000,000 3.345% 7/11/94
15,852,315
CORPORATE ASSET FUNDING CORPORATION
30,000,000 3.417% 4/05/94
29,988,667
25,000,000 3.611% 4/29/94
24,930,000
CORPORATE RECEIVABLES CORPORATION
29,000,000 3.702% 5/06/94
28,896,244
50,000,000 3.674% 5/13/94
49,787,083
CREDIT LYONNAIS N.A.
50,000,000 3.417% 7/06/94
49,552,000
25,000,000 3.273% 7/26/94
24,740,611
CREDITO ITALIANO DELAWARE INC.
25,000,000 3.283% 7/25/94
24,742,049
CXC INC.
25,100,000 3.662% 5/02/94
25,049,308
25,000,000 3.701% 5/02/94
24,892,600
20,000,000 3.672% 5/09/94
19,922,944
35,000,000 3.701% 5/10/94
34,860,467
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
COMMERCIAL PAPER (CONTINUED)
DAIMLER BENZ NORTH AMERICA CORPORATION
$ 18,201,000 3.112% 4/04/94 $
18,196,313
25,000,000 3.174% 4/07/94
24,986,875
50,000,000 3.175% 4/11/94
49,956,250
25,000,000 3.422% 4/18/94
24,959,861
25,000,000 3.498% 5/09/94
24,908,430
DEAN WITTER, DISCOVER & CO.
25,000,000 3.512% 4/05/94
24,990,278
25,000,000 3.156% 4/15/94
24,969,569
15,000,000 3.590% 4/21/94
14,970,250
25,000,000 3.639% 4/29/94
24,936,979
50,000,000 3.721% 5/02/94
49,840,694
25,000,000 3.681% 5/25/94
24,863,125
30,000,000 3.865% 6/16/94
29,757,433
30,000,000 3.867% 6/22/94
29,738,283
DELAWARE FUNDING CORPORATION
16,603,000 3.706% 5/17/94
16,524,929
DEN DANSKE CORPORATION
25,000,000 3.551% 4/29/94
24,931,361
25,000,000 3.273% 7/25/94
24,742,847
DRESDNER U.S. FINANCE INC.
50,000,000 3.786% 6/14/94
49,614,583
FLEET MORTGAGE GROUP INC.
40,000,000 3.562% 4/04/94
39,988,167
20,000,000 3.590% 4/11/94
19,980,111
25,000,000 3.500% 4/13/94
24,971,000
20,000,000 3.658% 4/20/94
19,963,001
15,000,000 3.678% 4/20/94
14,975,001
25,000,000 3.620% 4/25/94
24,940,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - -------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - -------------
<C> <S> <C>
<C>
COMMERCIAL PAPER (CONTINUED)
FLEET MORTGAGE GROUP INC. (CONTINUED)
$ 20,000,000 3.681% 4/29/94 $
19,942,911
40,000,000 3.734% 5/16/94
39,819,499
FORD CREDIT EUROPE PLC
21,600,000 3.256% 4/07/94
21,588,372
50,000,000 3.419% 4/12/94
49,948,055
FORD MOTOR CREDIT CORPORATION
25,000,000 3.277% 4/04/94
24,993,229
25,000,000 3.465% 4/08/94
24,983,229
25,000,000 3.640% 4/27/94
24,934,458
25,000,000 3.665% 5/09/94
24,903,681
75,000,000 3.729% 5/25/94
74,583,750
GENERAL ELECTRIC CAPITAL CORPORATION
50,000,000 3.435% 4/11/94
49,952,500
50,000,000 3.571% 4/29/94
49,861,945
35,000,000 3.672% 5/06/94
34,875,799
25,000,000 3.480% 5/16/94
24,892,187
50,000,000 3.727% 5/19/94
49,753,333
25,000,000 3.727% 5/25/94
24,861,250
50,000,000 3.356% 7/12/94
49,532,500
GENERAL ELECTRIC CAPITAL SERVICES
25,000,000 3.837% 6/22/94
24,783,611
GOLDMAN SACHS GROUP L.P.
25,000,000 3.579% 4/08/94
24,982,646
50,000,000 3.520% 4/25/94
49,883,333
50,000,000 3.356% 7/07/94
49,555,416
25,000,000 3.408% 7/08/94
24,772,014
GTE CORPORATION
54,000,000 3.630% 4/11/94
53,945,700
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
COMMERCIAL PAPER (CONTINUED)
HANSON FINANCE PLC
$ 25,000,000 3.330% 4/08/94 $
24,983,959
50,000,000 3.781% 5/27/94
49,708,333
100,000,000 3.805% 6/13/94
99,235,528
HYDRO QUEBEC
25,000,000 3.609% 4/22/94
24,947,500
INDOSUEZ N.A. INC. (BANK INDOSUEZ)
25,000,000 3.413% 4/05/94
24,990,556
25,000,000 3.662% 5/03/94
24,918,889
INTERNATIONAL NEDERLANDEN BANK N.V.
50,000,000 3.185% 4/08/94
50,260,524
25,000,000 3.457% 4/08/94
24,691,498
25,000,000 3.250% 5/09/94
24,915,160
LEEDS PERMANENT BUILDING SOCIETY
25,000,000 3.164% 5/16/94
24,902,187
MERRILL LYNCH & COMPANY, INC.
50,000,000 3.520% 4/29/94
49,863,889
25,000,000 3.693% 5/09/94
24,903,153
50,000,000 3.900% 7/22/94
49,410,111
MORGAN (J.P.) & COMPANY
100,000,000 3.900% 7/14/94
98,887,778
MORGAN STANLEY GROUP, INC.
20,000,000 3.445% 4/04/94
19,994,284
50,000,000 3.330% 4/08/94
49,967,916
50,000,000 3.592% 4/29/94
49,871,167
NATIONAL BANK OF CANADA
25,000,000 3.651% 4/28/94
24,931,750
NESTLE CAPITAL CORPORATION
40,300,000 3.591% 4/29/94
40,192,787
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
COMMERCIAL PAPER (CONTINUED)
NYNEX CORPORATION
$ 25,000,000 3.721% 4/27/94 $
24,933,014
35,000,000 3.804% 5/06/94
34,871,375
25,000,000 3.743% 5/16/94
24,888,750
PENNEY (J.C.) FUNDING CORP.
40,000,000 3.513% 4/21/94
39,922,222
40,594,000 3.674% 5/12/94
40,425,253
PEPSICO INC.
25,000,000 3.592% 5/02/94
24,922,931
PHH CORPORATION
25,000,000 3.621% 4/29/94
24,929,806
PHILIP MORRIS CO. INC.
50,000,000 3.124% 4/11/94
49,956,945
25,000,000 3.530% 4/26/94
24,939,063
50,000,000 3.540% 4/27/94
49,872,889
25,000,000 3.591% 4/29/94
24,930,389
PREFERRED RECEIVABLES FUNDING CORPORATION
50,000,000 3.560% 4/11/94
49,950,695
30,000,000 3.693% 5/09/94
29,888,074
36,250,000 3.744% 5/09/94
36,104,243
RABOBANK NEDERLAND N.V.
25,000,000 3.344% 6/16/94
24,831,360
RECEIVABLES CAPITAL CORPORATION
17,102,000 3.694% 5/02/94
17,042,352
60,971,000 3.713% 5/02/94
60,782,125
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
COMMERCIAL PAPER (CONTINUED)
RENAULT ACCEPTANCE B.V.
$ 20,000,000 3.256% 4/05/94 $
19,992,822
25,000,000 3.672% 4/29/94
24,928,833
65,000,000 3.702% 5/24/94
64,653,801
REPUBLIC NATIONAL BANK
30,000,000 3.217% 4/05/94
29,989,366
25,000,000 3.348% 7/07/94
24,778,382
SAINT GOBAIN (COMPAGNIE DE)
25,000,000 3.344% 7/06/94
24,780,666
30,000,000 3.294% 7/11/94
29,727,300
SAN PAOLO U.S. FINANCE INC.
25,000,000 3.226% 4/07/94
24,986,666
SHEFFIELD RECEIVABLES CORPORATION
50,000,000 3.413% 4/04/94
49,985,834
25,000,000 3.562% 4/18/94
24,958,090
22,000,000 3.517% 4/20/94
21,964,361
25,000,000 3.642% 5/02/94
24,921,854
SIEMENS CORPORATION
35,000,000 3.732% 5/05/94
34,882,364
SOCIETE GENERALE N.A. INC.
25,000,000 3.282% 7/18/94
24,757,750
SWEDISH EXPORT CREDIT CORPORATION
25,000,000 3.436% 4/08/94
24,983,716
25,000,000 3.294% 7/11/94
24,777,750
TORONTO DOMINION HOLDINGS USA INC.
50,000,000 3.250% 5/09/94
49,835,320
TRANSAMERICA CORPORATION
36,000,000 3.638% 5/06/94
35,873,125
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
COMMERCIAL PAPER (CONTINUED)
TRANSAMERICA FINANCE CORPORATION
$ 20,000,000 3.226% 4/07/94 $
19,989,334
25,000,000 3.330% 4/08/94
24,983,959
25,000,000 3.530% 4/11/94
24,975,555
27,000,000 3.495% 5/16/94
26,888,057
15,000,000 3.672% 5/23/94
14,920,917
25,000,000 3.304% 7/11/94
24,777,048
30,000,000 3.917% 7/13/94
29,667,825
25,000,000 3.905% 8/29/94
24,601,041
UNION BANK OF SWITZERLAND
100,000,000 3.653% 4/06/94
99,949,305
WHIRLPOOL CORPORATION
11,000,000 3.531% 4/04/94
10,996,772
50,000,000 3.703% 5/16/94
49,770,000
25,000,000 3.741% 5/18/94
24,878,583
40,000,000 3.867% 6/22/94
39,656,044
WHIRLPOOL FINANCIAL CORPORATION
20,000,000 3.538% 4/22/94
19,958,933
25,000,000 3.661% 4/27/94
24,939,097
20,000,000 3.571% 4/29/94
19,944,778
50,000,000 3.721% 5/02/94
49,840,694
WORKING CAPITAL MANAGEMENT
50,000,000 3.488% 4/08/94
49,966,264
15,250,000 3.642% 5/02/94
15,202,658
- - ------------------------------------------------------------------------------
- - --------------
TOTAL COMMERCIAL PAPER
(Cost $5,764,226,375)
5,764,226,375
- - ------------------------------------------------------------------------------
- - --------------
CERTIFICATES OF DEPOSIT - 23.7%
ABBEY NATIONAL PLC
25,000,000 3.260% 7/13/94
25,002,091
25,000,000 3.720% 7/27/94
25,000,784
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
CERTIFICATES OF DEPOSIT (CONTINUED)
ABN-AMRO BANK N.V.
$ 26,000,000 3.621% 4/29/94 $
25,926,998
20,000,000 3.480% 5/16/94
19,913,750
20,000,000 3.500% 5/16/94
19,913,250
15,000,000 3.340% 6/17/94
15,000,741
BANK OF NEW YORK
25,000,000 3.570% 1/13/95
25,003,848
BANK OF NOVA SCOTIA
24,000,000 3.130% 4/18/94
24,000,204
25,000,000 3.750% 6/24/94
25,000,000
25,000,000 3.440% 9/16/94
25,000,000
15,000,000 3.400% 10/14/94
15,000,395
20,000,000 3.620% 1/10/95
20,012,120
BANK OF TOKYO
25,000,000 3.220% 4/07/94
25,000,207
25,000,000 3.200% 4/11/94
25,000,067
50,000,000 3.170% 4/25/94
50,000,000
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
15,000,000 3.200% 5/09/94
15,003,411
25,000,000 3.380% 8/04/94
25,001,707
10,000,000 3.470% 9/22/94
10,000,468
15,000,000 3.400% 9/30/94
15,005,679
BANQUE INDOSUEZ
25,000,000 3.150% 4/20/94
25,001,382
20,000,000 3.680% 6/17/94
20,000,414
25,000,000 3.580% 8/16/94
25,000,918
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
CERTIFICATES OF DEPOSIT (CONTINUED)
BANQUE NATIONAL DE PARIS
$ 36,000,000 3.520% 4/28/94 $
35,988,740
50,000,000 3.880% 7/01/94
50,002,430
33,000,000 3.250% 7/11/94
33,002,653
25,000,000 3.610% 7/13/94
24,997,015
BANQUE PARIBAS
20,000,000 3.700% 12/08/94
20,000,000
BARCLAYS BANK
25,000,000 3.250% 7/13/94
25,004,202
25,000,000 3.380% 8/04/94
25,000,854
BARCLAYS BANK CANADA
25,000,000 3.521% 4/14/94
24,973,313
25,000,000 3.673% 5/16/94
24,885,937
BAYERISCHE VEREINSBANK
20,000,000 3.140% 4/29/94
20,002,222
CANADIAN IMPERIAL BANK OF COMMERCE
25,000,000 3.440% 4/11/94
25,000,000
25,000,000 3.180% 4/12/94
25,000,000
25,000,000 3.340% 7/01/94
25,000,000
25,000,000 3.340% 7/11/94
25,000,000
25,000,000 3.400% 9/29/94
25,000,000
25,000,000 3.670% 12/05/94
25,000,000
30,000,000 3.690% 12/23/94
30,000,000
25,000,000 3.660% 12/30/94
25,000,000
CARIPLO
25,000,000 3.750% 6/03/94
25,000,000
25,000,000 3.430% 10/17/94
25,001,336
25,000,000 3.750% 11/28/94
25,001,613
25,000,000 3.690% 1/11/95
25,001,908
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - ------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - ------------
<C> <S> <C>
<C>
CERTIFICATES OF DEPOSIT (CONTINUED)
CITIBANK CANADA
$ 13,000,000 3.768% 5/09/94 $
12,948,542
50,000,000 3.730% 1/25/95
50,266,645
COMMERZBANK
25,000,000 3.230% 4/04/94
25,000,042
30,000,000 3.400% 9/15/94
30,004,776
25,000,000 3.400% 10/06/94
25,006,067
25,000,000 3.610% 11/07/94
25,005,254
50,000,000 3.640% 1/18/95
50,003,911
CREDIT AGRICOLE
25,000,000 3.280% 7/12/94
25,001,394
CREDIT LYONNAIS
15,000,000 3.630% 7/01/94
14,997,429
CREDIT INDUSTRIEL ET COMMERCIAL (CIC)
30,000,000 3.750% 6/02/94
30,000,997
20,000,000 3.440% 9/16/94
20,000,903
50,000,000 3.450% 10/12/94
50,002,605
25,000,000 3.720% 1/11/95
25,003,815
CREDIT SUISSE
20,000,000 3.120% 4/12/94
20,000,329
25,000,000 3.510% 4/25/94
24,998,652
50,000,000 3.510% 4/25/94
49,999,292
25,000,000 3.760% 6/07/94
25,000,000
25,000,000 3.760% 6/07/94
25,000,898
25,000,000 3.700% 2/03/95
24,995,877
CREDITANSTALT BANKVEREIN
25,000,000 3.120% 4/25/94
24,999,835
25,000,000 3.690% 11/28/94
24,999,816
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
CERTIFICATES OF DEPOSIT (CONTINUED)
CREDITO ITALIANO
$ 25,000,000 3.450% 10/12/94 $
25,000,651
25,000,000 3.690% 1/11/95
25,001,908
DAI ICHI KANGYO BANK
45,000,000 3.610% 4/22/94
44,996,802
25,000,000 3.170% 4/26/94
25,000,173
50,000,000 3.240% 4/28/94
49,997,331
35,000,000 3.720% 5/04/94
34,999,951
50,000,000 3.700% 5/06/94
49,999,982
50,000,000 3.840% 6/14/94
49,998,899
DEN DANSKE BANK
25,000,000 3.430% 7/29/94
24,990,143
DRESDNER BANK
15,000,000 3.250% 5/18/94
15,001,626
FUJI BANK LIMITED
25,000,000 3.190% 4/07/94
25,000,242
31,000,000 3.240% 4/25/94
30,998,840
25,000,000 3.210% 4/27/94
25,001,048
25,000,000 3.190% 4/27/94
25,000,695
GENERALE BANK
25,000,000 3.740% 6/24/94
25,000,497
HARRIS TRUST AND SAVINGS BANK
15,000,000 3.550% 4/18/94
14,999,023
25,000,000 3.650% 5/17/94
25,000,000
HESSISCHE LANDESBANK
50,000,000 3.820% 6/14/94
49,998,021
25,000,000 3.380% 8/04/94
25,000,000
25,000,000 3.630% 1/18/95
25,001,956
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
CERTIFICATES OF DEPOSIT (CONTINUED)
INDUSTRIAL BANK OF JAPAN
$ 75,000,000 3.230% 4/25/94 $
74,996,384
25,000,000 3.700% 5/04/94
24,990,639
LLOYD'S BANK
10,000,000 3.120% 4/04/94
10,000,084
35,000,000 3.150% 4/29/94
35,002,107
25,000,000 3.620% 7/08/94
24,999,032
25,000,000 3.250% 7/11/94
25,009,580
25,000,000 3.260% 7/14/94
24,998,327
25,000,000 3.380% 8/01/94
24,988,258
MITSUBISHI BANK LTD.
25,000,000 3.600% 4/29/94
24,999,993
NATIONAL BANK OF CANADA
25,000,000 3.450% 4/11/94
25,000,000
50,000,000 3.700% 5/16/94
50,000,000
NATIONSBANK
25,000,000 3.500% 4/08/94
25,000,000
25,000,000 3.850% 7/22/94
25,000,000
NATIONAL WESTMINSTER BANK PLC
25,000,000 3.420% 4/11/94
25,125,945
48,000,000 3.670% 5/31/94
47,997,670
30,000,000 3.260% 7/29/94
29,999,024
NATIONAL BANK OF DETROIT
15,000,000 3.370% 7/28/94
15,005,330
RABO BANK
25,000,000 3.340% 6/30/94
25,002,344
25,000,000 3.280% 7/07/94
25,005,223
20,000,000 3.550% 8/03/94
20,003,687
10,000,000 3.670% 12/22/94
9,999,787
21,000,000 3.650% 12/29/94
21,002,947
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
CERTIFICATES OF DEPOSIT (CONTINUED)
REPUBLIC NATIONAL BANK OF NEW YORK
$ 75,000,000 3.610% 5/06/94 $
75,000,000
ROYAL BANK OF CANADA
15,000,000 3.300% 7/11/94
15,001,242
18,000,000 3.270% 7/29/94
18,002,598
25,000,000 3.300% 7/29/94
25,008,826
25,000,000 3.390% 7/29/94
25,001,622
25,000,000 3.690% 12/07/94
25,001,674
SAN PAOLO BANK
75,000,000 3.520% 4/07/94
74,996,370
SANWA BANK
25,000,000 3.170% 4/13/94
25,000,053
40,000,000 3.170% 4/18/94
40,000,151
SOCIETE GENERALE
18,000,000 3.270% 4/25/94
18,001,649
27,000,000 3.500% 4/25/94
26,998,161
25,000,000 3.520% 4/25/94
24,997,974
25,000,000 3.790% 6/15/94
25,001,548
25,000,000 3.400% 10/14/94
25,000,000
40,000,000 3.680% 12/05/94
40,000,000
SUMITOMO BANK
50,000,000 3.240% 4/29/94
49,997,651
50,000,000 3.610% 4/29/94
50,001,160
50,000,000 3.680% 5/06/94
50,000,415
20,000,000 3.710% 5/13/94
20,000,152
TORONTO DOMINION
25,000,000 3.570% 1/13/95
25,005,703
25,000,000 3.630% 1/18/95
25,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
CERTIFICATES OF DEPOSIT (CONTINUED)
UNION BANK OF SWITZERLAND
$ 35,000,000 3.330% 6/14/94 $
35,003,407
25,000,000 3.330% 6/30/94
25,000,000
WESTDEUTSCHE LANDESBANK
25,000,000 3.550% 8/10/94
25,000,000
- - ------------------------------------------------------------------------------
- - --------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $3,710,022,241)
3,710,022,241
- - ------------------------------------------------------------------------------
- - --------------
INTEREST
RATE
------
FLOATING RATE NOTES - 12.4%
AT & T CAPITAL CORPORATION
50,000,000 3.705% 4/05/94
49,992,170
75,000,000 3.280% 4/18/94
75,000,000
BANQUE NATIONAL DE PARIS
100,000,000 3.700% 4/05/94
100,000,000
BEAR STEARNS COMPANY
50,000,000 3.562% 4/01/94
50,000,000
56,000,000 3.663% 4/05/94
56,000,000
50,000,000 3.375% 4/21/94
50,000,000
BENEFICIAL CORPORATION
100,000,000 3.570% 4/01/94
99,997,532
75,000,000 3.700% 4/05/94
74,991,532
50,000,000 3.680% 4/05/94
49,995,123
CITIBANK CANADA
100,000,000 3.562% 4/07/94
100,000,000
CIT GROUP
75,000,000 3.680% 4/05/94
74,985,164
FCC NATIONAL BANK
100,000,000 4.100% 4/05/94
100,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
INTEREST MATURITY
MARKET VALUE
FACE VALUE RATE DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
FLOATING RATE NOTES (CONTINUED)
GOLDMAN SACHS GROUP
$100,000,000 3.760% 4/05/94 $
100,000,000
100,000,000 3.425% 4/11/94
100,000,000
MERRILL LYNCH & COMPANY
75,000,000 3.460% 5/17/94
75,000,000
MORGAN STANLEY GROUP INC.
100,000,000 3.625% 4/11/94
100,000,000
PHH CORPORATION
100,000,000 3.730% 4/05/94
99,994,410
100,000,000 3.740% 4/05/94
99,993,970
STUDENT LOAN MARKETING ASSOCIATION
55,000,000 3.750% 4/05/94
55,000,000
100,000,000 3.770% 4/05/94
100,000,000
211,600,000 3.840% 4/05/94
211,538,111
35,400,000 3.930% 4/05/94
35,460,156
TRANSAMERICA FINANCE CORPORATION
80,000,000 3.600% 4/05/94
80,000,000
- - ------------------------------------------------------------------------------
- - --------------
TOTAL FLOATING RATE NOTES
(Cost $1,937,948,168)
1,937,948,168
- - ------------------------------------------------------------------------------
- - --------------
SHORT-TERM BANK NOTES - 9.0%
BANK OF NEW YORK
25,000,000 3.720% 6/30/94
24,998,657
25,000,000 3.820% 6/30/94
24,998,425
100,000,000 3.730% 6/30/94
99,980,270
25,000,000 3.664% 11/08/94
24,985,155
CITIBANK
50,000,000 3.700% 6/03/94
50,000,000
CREDIT AGRICOLE
25,000,000 3.550% 7/15/94
24,987,286
50,000,000 3.640% 7/15/94
49,985,554
25,000,000 3.710% 7/15/94
24,999,356
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
INTEREST MATURITY
MARKET VALUE
FACE VALUE RATE DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
SHORT-TERM BANK NOTES (CONTINUED)
FCC NATIONAL BANK
$ 25,000,000 3.610% 7/08/94 $
25,000,000
50,000,000 3.460% 9/29/94
49,987,360
25,000,000 3.730% 11/28/94
25,000,000
25,000,000 3.650% 1/18/95
25,000,000
50,000,000 3.410% 2/22/95
49,977,603
NATIONSBANK
25,000,000 3.830% 6/07/94
24,991,864
60,000,000 3.710% 6/21/94
59,992,143
25,000,000 3.496% 9/30/94
24,993,989
100,000,000 3.634% 1/11/95
99,923,658
NATIONAL BANK OF DETROIT
100,000,000 3.530% 4/11/94
100,001,347
25,000,000 3.345% 4/15/94
24,999,366
50,000,000 3.600% 4/19/94
49,997,907
50,000,000 3.610% 7/20/94
49,973,364
50,000,000 3.383% 10/03/94
49,975,433
50,000,000 4.345% 10/03/94
49,979,614
PITTSBURGH NATIONAL BANK
106,000,000 3.320% 4/29/94
105,994,215
25,000,000 3.300% 6/10/94
24,995,489
25,000,000 3.430% 7/08/94
24,995,183
25,000,000 3.550% 7/08/94
24,994,964
25,000,000 3.590% 7/08/94
25,006,540
25,000,000 3.550% 7/15/94
24,995,072
25,000,000 3.560% 7/15/94
24,996,466
25,000,000 3.759% 8/02/94
25,001,607
25,000,000 4.503% 9/12/94
25,028,492
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
INTEREST MATURITY
MARKET VALUE
FACE VALUE RATE DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
SHORT-TERM BANK NOTES (CONTINUED)
WESTDEUTSCHE LANDESBANK
$ 25,000,000 3.624% 8/22/94 $
24,996,549
50,000,000 3.863% 8/22/94
50,006,800
- - ------------------------------------------------------------------------------
- - --------------
TOTAL SHORT-TERM BANK NOTES
(Cost $1,415,739,728)
1,415,739,728
- - ------------------------------------------------------------------------------
- - --------------
ANNUALIZED
YIELD ON
DATE OF
PURCHASE
(UNAUDITED)
---------
U.S. GOVERNMENT AND AGENCY NOTES - 4.1%
FEDERAL HOME LOAN BANK
11,540,000 3.547% 8/25/94
11,681,055
FEDERAL NATIONAL MORTGAGE ASSOCIATION
25,000,000 3.380% 7/11/94
24,767,139
25,000,000 3.365% 7/20/94
24,747,917
17,000,000 3.800% 7/26/94
16,794,583
STUDENT LOAN MARKETING ASSOCIATION
75,000,000 3.700% 6/30/94
74,983,301
U.S. TREASURY NOTES
100,000,000 3.397% 10/31/94
100,474,824
25,000,000 3.495% 11/15/94
25,370,693
25,000,000 3.502% 11/15/94
25,376,893
50,000,000 3.528% 11/15/94
50,746,074
25,000,000 3.545% 11/15/94
25,378,052
50,000,000 3.627% 11/30/94
50,318,025
50,000,000 3.657% 12/31/94
51,441,675
50,000,000 3.698% 1/31/95
50,199,074
25,000,000 3.740% 1/31/95
25,108,728
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
ANNUALIZED
YIELD ON
DATE OF
PURCHASE MATURITY
MARKET VALUE
FACE VALUE (UNAUDITED) DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
U.S. GOVERNMENT AND AGENCY NOTES (CONTINUED)
$ 25,000,000 3.748% 1/31/95 $
25,108,728
50,000,000 3.684% 2/15/95
51,725,796
- - ------------------------------------------------------------------------------
- - --------------
TOTAL U.S. GOVERNMENT AND AGENCY NOTES (Cost
$634,222,557)
634,222,557
- - ------------------------------------------------------------------------------
- - --------------
INTEREST
RATE
------
EURO-TIME DEPOSITS - 4.0%
BANKAMERICA
207,527,000 3.562% 4/04/94
207,527,000
GIROCREDIT BANK
150,000,000 3.687% 4/04/94
150,000,000
REPUBLIC NATIONAL BANK OF NEW YORK
275,000,000 3.562% 4/04/94
275,000,000
- - ------------------------------------------------------------------------------
- - --------------
TOTAL EURO-TIME DEPOSITS (Cost $632,527,000)
632,527,000
- - ------------------------------------------------------------------------------
- - --------------
MEDIUM-TERM NOTES - 2.9%
AT & T CAPITAL CORPORATION
50,000,000 3.460% 9/23/94
50,000,000
BAYERISCHE LANDESBANK
50,000,000 3.730% 12/09/94
49,958,034
50,000,000 3.620% 1/18/95
49,965,320
BENEFICIAL CORPORATION
50,000,000 3.480% 4/28/94
49,998,016
GENERAL ELECTRIC CAPITAL CORPORATION
50,000,000 3.590% 1/19/95
49,977,925
MERRILL LYNCH & COMPANY
25,000,000 3.660% 8/05/94
25,000,000
25,000,000 3.530% 8/23/94
25,000,000
25,000,000 3.630% 11/15/94
25,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
INTEREST MATURITY
MARKET VALUE
FACE VALUE RATE DATE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
MEDIUM-TERM NOTES (CONTINUED)
PEPSICO INC.
$ 80,000,000 3.600% 2/03/95 $
79,956,120
WACHOVIA BANK
43,000,000 3.436% 4/29/94
43,059,395
- - ------------------------------------------------------------------------------
- - --------------
TOTAL MEDIUM-TERM NOTES
(Cost $447,914,810)
447,914,810
- - ------------------------------------------------------------------------------
- - --------------
BANKERS' ACCEPTANCES -- 0.3%
REPUBLIC NATIONAL BANK
25,000,000 3.869% 7/14/94
24,738,541
25,000,000 3.815% 7/14/94
24,713,430
- - ------------------------------------------------------------------------------
- - --------------
TOTAL BANKERS' ACCEPTANCES
(Cost $49,451,971)
49,451,971
- - ------------------------------------------------------------------------------
- - --------------
REPURCHASE AGREEMENTS - 8.0%
100,000,000 Agreement with Bear Stearns & Company, dated
03/30/94 bearing 3.750% to be repurchased at
$100,072,917 on 04/06/94, collateralized by
$17,070,000 FNMA, 6.500% due 11/25/20,
$28,281,700 FNMA, 6.000% due 08/15/13,
$29,000,000 FNMA Gold, 6.500% due 09/25/19,
$31,927,000 FNMA, 5.550% due 05/25/13
100,000,000
100,000,000 Agreement with Bear Stearns & Company, dated
03/28/94 bearing 3.720% to be repurchased at
$100,072,333 on 04/04/94, collateralized by
$42,400,000 FNMA, 5.000% due 01/25/24,
$5,400,000 FNMA, 6.500% due 06/25/23,
$12,785,000 FNMA, 5.800% due 01/25/14,
$14,953,400 FHLMC, 4.475% due 09/15/23,
$35,000,000 FNMA, 6.000% due 08/25/15
100,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
MARKET VALUE
FACE VALUE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S>
<C>
REPURCHASE AGREEMENTS (CONTINUED)
$100,000,000 Agreement with Citibank N.A., dated 01/25/94
bearing 3.120% to be repurchased at
$100,780,000 on 04/25/94, collateralized by
$19,892,000 FNMA, 6.073% due 03/01/33,
$16,036,000 FHLMC, 13.350% due 01/15/09,
$13,451,000 FHLMC, 3.940% due 07/01/23,
$10,605,000 FNMA REMIC, 4.344% due 11/25/23,
$20,000,000 FNMA, 4.000% due 06/25/22,
$33,593,000 FNMA, 6.500% due 12/25/13 $
100,000,000
100,000,000 Agreement with First Boston Corporation, dated
03/28/94 bearing 3.680% to be repurchased at
$100,613,333 on 05/27/94, collateralized by
$100,000,000 FNMA ARM, 5.866% due 02/01/31,
$39,926,993 FHLMC ARM, 9.33% due 08/01/20,
$15,825,000 FNMA REMIC, 11.930% due 04/25/23
100,000,000
50,000,000 Agreement with First Boston Corporation, dated
01/13/94 bearing 3.150% to be repurchased at
$50,393,750 on 04/13/94, collateralized by
$30,104,738 FNMA ARM, 5.209% due 10/01/27,
$15,180,000 FNMA REMIC, 4.000% due 01/25/04,
$10,600,000 FNMA REMIC, 4.750% due 01/25/09,
$14,690,000 FNMA REMIC, 3.781% due 08/25/20
50,000,000
100,000,000 Agreement with Goldman, Sachs & Co., dated
03/29/94 bearing 3.650% to be repurchased at
$100,070,972 on 04/05/94, collateralized by
$45,320,833 FNMA, 10.000% due 06/25/22,
$42,908,077 FNMA, 6.75% due 11/25/22,
$5,596,000 FHLMC, 5.500% due 03/15/21,
$27,847,000 FNMA Strip, Zero Coupon due
02/25/23
100,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued) MARCH 31,
1994
<CAPTION>
MARKET VALUE
FACE VALUE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S>
<C>
REPURCHASE AGREEMENTS (CONTINUED)
$200,000,000 Agreement with Goldman, Sachs & Co., dated
03/24/94 bearing 3.700% to be repurchased at
$200,287,778 on 04/07/94, collateralized by
$28,800,000 FNMA REMIC, 6.000% due 03/25/06,
$31,800,000 FNMA REMIC, 6.500% due 01/15/08,
$62,342,000 FHLMC REMIC, 4.013% due 06/15/22,
$100,000,000 FHLMC REMIC, 4.025% due 01/15/22,
$193,000,000 FHLMC REMIC, 3.525% due 04/15/23,
$25,000,000 FHLMC REMIC, 6.300% due 09/15/02,
$30,000,000 FHLMC REMIC, 3.613% due 04/15/22 $
200,000,000
200,000,000 Agreement with Kidder, Peabody & Co., dated
03/31/94 bearing 3.800% to be repurchased at
$200,084,444 on 04/04/94, collateralized by
$127,527,000 FHLMC REMIC, 5.400% due 07/15/18,
$43,557,000 FHLMC REMIC, 6.500% due 11/15/18,
$47,250,000 FHLMC REMIC, 3.620% due 07/15/03
200,000,000
100,000,000 Agreement with Prudential Securities, Inc.,
dated 03/24/94 bearing 3.670% to be repurchased
at $100,142,722 on 04/07/94, collateralized by
$22,478,000 FNMA, 7.000% due 10/15/22,
$40,000,000 FHLMC REMIC, 8.500% due 08/15/01,
$19,750,000 FNMA REMIC, 7.000% due 08/25/23,
$19,887,000 FHLMC REMIC, 8.000% due 04/15/07
100,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
PORTFOLIO OF INVESTMENTS (continued)
MARCH 31, 1994
<CAPTION>
MARKET VALUE
FACE VALUE
(NOTE 1)
- - ------------------------------------------------------------------------------
- - --------------
<C> <S> <C>
<C>
REPURCHASE AGREEMENTS (CONTINUED)
$200,000,000 Agreement with Prudential Securities, Inc.,
dated 03/28/94 bearing 3.700% to be repurchased
at $200,143,889 on 04/04/94, collateralized by
$47,000,000
FNMA REMIC, 6.500% due 12/25/13, $50,000,000
FNMA REMIC, 4.687% due 10/25/23, $29,000,000
FNMA REMIC, 4.390% due 10/25/22, $20,106,920
FNMA REMIC, 4.580% due 09/25/23, $28,000,000
FNMA REMIC, 5.250% due 10/25/01, $21,818,000
FHLMC REMIC, 4.950% due 03/15/04, $19,714,000
FHLMC REMIC, 4.970% due 06/15/23, $9,000,000
FHLMC REMIC, 5.000% due 03/15/13 $
200,000,000
- - ------------------------------------------------------------------------------
- - --------------
TOTAL REPURCHASE AGREEMENTS
(Cost $1,250,000,000)
1,250,000,000
- - ------------------------------------------------------------------------------
- - --------------
TOTAL INVESTMENTS (Cost $15,842,052,850*) 101.2%
15,842,052,850
OTHER ASSETS AND LIABILITIES (NET) (1.2)
(184,510,084)
- - ------------------------------------------------------------------------------
- - --------------
NET ASSETS 100.0%
$15,657,542,766
- - ------------------------------------------------------------------------------
- - --------------
<FN>
* Aggregate cost for Federal tax purposes.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1994
<S> <C> <C>
ASSETS:
Investments, at value (Cost $15,842,052,850)
(Note 1)
See accompanying schedule
$15,842,052,850
Cash
495
Receivable for Fund shares sold
196,773,515
Interest receivable
84,856,290
- - ------------------------------------------------------------------------------
- - --------------
TOTAL ASSETS
16,123,683,150
- - ------------------------------------------------------------------------------
- - --------------
LIABILITIES:
Payable for Fund shares redeemed $ 283,919,734
Payable for investment securities purchased 149,937,395
Dividends payable 22,236,829
Investment advisory fee payable (Note 2) 3,835,132
Administration fee payable (Note 2) 2,560,294
Transfer agent fees payable (Note 2) 2,500,000
Custodian fees payable (Note 2) 220,000
Accrued expenses and other payables 931,000
- - ------------------------------------------------------------------------------
- - --------------
TOTAL LIABILITIES
466,140,384
- - ------------------------------------------------------------------------------
- - --------------
NET ASSETS
$15,657,542,766
- - ------------------------------------------------------------------------------
- - --------------
NET ASSETS CONSIST OF:
Accumulated net realized loss on investments sold $
(741,184)
Par value
156,580,880
Paid-in capital in excess of par value
15,501,703,070
- - ------------------------------------------------------------------------------
- - --------------
TOTAL NET ASSETS
$15,657,542,766
- - ------------------------------------------------------------------------------
- - --------------
NET ASSET VALUE, offering and redemption price per share
($15,657,542,766 / 15,658,088,027 shares of common stock
outstanding)
$1.00
- - ------------------------------------------------------------------------------
- - --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31,
1994
<S> <C>
<C>
INVESTMENT INCOME:
Interest $
548,634,572
- - ------------------------------------------------------------------------------
- - --------------
EXPENSES:
Investment advisory fee (Note 2) $48,342,802
Sub-investment advisory and/or administration fee (Note 2) 32,270,201
Transfer agent fees (Note 2) 30,319,050
Custodian fees (Note 2) 1,387,788
Legal and audit fees 101,817
Directors' fees and expenses (Note 2) 84,162
Other 4,104,535
Fees waived by investment adviser and administrator
(Note 2) (4,311,300)
- - ------------------------------------------------------------------------------
- - --------------
TOTAL EXPENSES
112,299,055
- - ------------------------------------------------------------------------------
- - --------------
NET INVESTMENT INCOME
436,335,517
- - ------------------------------------------------------------------------------
- - --------------
NET REALIZED GAIN ON INVESTMENTS SOLD
178,117
- - ------------------------------------------------------------------------------
- - --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $
436,513,634
- - ------------------------------------------------------------------------------
- - --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
YEAR
YEAR
ENDED
ENDED
3/31/94
3/31/93
<S> <C> <C>
Net investment income $ 436,335,517 $
536,634,960
Net realized gain/(loss) on investments sold 178,117
(352,000)
- - ------------------------------------------------------------------------------
- - --------------
Net increase in net assets resulting from
operations 436,513,634
536,282,960
Distributions to shareholders from net investment
income (436,335,517)
(536,634,960)
Net decrease in net assets from Fund share
transactions (Note 3) (962,064,163)
(1,187,611,707)
- - ------------------------------------------------------------------------------
- - --------------
Net decrease in net assets (961,886,046)
(1,187,963,707)
NET ASSETS:
Beginning of year 16,619,428,812
17,807,392,519
- - ------------------------------------------------------------------------------
- - --------------
End of year $15,657,542,766
$16,619,428,812
- - ------------------------------------------------------------------------------
- - --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --
FINANCIAL HIGHLIGHTS
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR:
<CAPTION>
YEAR YEAR YEAR
YEAR
ENDED ENDED ENDED
ENDED
3/31/94 3/31/93 3/31/92
3/31/91
<S> <C> <C> <C>
<C>
Net asset value, beginning of year $1.0000 $1.0000 $1.0000
$1.0000
- - ------------------------------------------------------------------------------
- - --------------
Income from investment operations:
Net investment income* 0.0271 0.0314 0.0514
0.0736
Net realized gain/(loss) on
investments -- -- --
- - --
- - ------------------------------------------------------------------------------
- - --------------
Total from investment operations 0.0271 0.0314 0.0514
0.0736
- - ------------------------------------------------------------------------------
- - --------------
Less distributions:
Distributions from net investment
income (0.0271) (0.0314) (0.0514)
(0.0736)
Distributions from net realized
capital gains -- -- --
- - --
- - ------------------------------------------------------------------------------
- - --------------
Total Distributions (0.0271) (0.0314) (0.0514)
(0.0736)
- - ------------------------------------------------------------------------------
- - --------------
Net asset value, end of year $1.0000 $1.0000 $1.0000
$1.0000
- - ------------------------------------------------------------------------------
- - --------------
Total return++ 2.74% 3.19% 5.26%
7.61%
- - ------------------------------------------------------------------------------
- - --------------
Ratios to average net assets/
supplemental data:
Net assets, end of year (000's) $15,657,543 $16,619,429 $17,807,393
$16,663,387
Ratio of operating expenses to
average net assets 0.70%+ 0.67%+ 0.67%+
0.69%+
Ratio of net investment income to
average net assets 2.71% 3.14% 5.11%
7.35%
- - ------------------------------------------------------------------------------
- - --------------
<FN>
+ Expense ratios before waiver of fees and certain other payments by
investment
adviser and sub-investment adviser and administrator for the years ended
March 31, 1994, 1993, 1992, 1991, 1990 and 1989 were .72%, .70%, .70%,
.70%,
.72% and .81%, respectively.
++ Total return represents aggregate total return for the year indicated.
* Net investment income before waiver of fees by investment adviser,
sub-investment adviser, and administrator for the years ended March 31,
1994,
1993, 1992, 1991 and 1990 were $0.0268, $0.0311, $0.0512, $0.0735 and
$0.0842, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
- - ------------------------------------------------------------------------------
- - --
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
YEAR
ENDED ENDED ENDED ENDED ENDED
ENDED
3/31/90 3/31/89 3/31/88 3/31/87 3/31/86
3/31/85
<S> <C> <C> <C> <C>
<C>
$1.0000 $1.0002 $1.0002 $1.0002 $1.0002
$1.0002
- - ------------------------------------------------------------------------------
- - --------------
0.0844 0.0739 0.0612 0.0571 0.0735
0.0955
-- (0.0001) -- -- --
0.0001
- - ------------------------------------------------------------------------------
- - --------------
0.0844 0.0738 0.0612 0.0571 0.0735
0.0956
- - ------------------------------------------------------------------------------
- - --------------
(0.0844) (0.0739) (0.0612) (0.0571) (0.0735)
(0.0955)
-- (0.0001) -- -- --
(0.0001)
- - ------------------------------------------------------------------------------
- - --------------
(0.0844) (0.0740) (0.0612) (0.0571) (0.0735)
(0.0956)
- - ------------------------------------------------------------------------------
- - --------------
$1.0000 $1.0000 $1.0002 $1.0002 $1.0002
$1.0002
- - ------------------------------------------------------------------------------
- - --------------
8.77% 7.66% 6.29% 5.86% 7.60%
9.99%
- - ------------------------------------------------------------------------------
- - --------------
$17,410,711 $13,153,813 $4,054,441 $3,543,527 $3,730,128
$3,681,621
0.70% 0.80% 0.76% 0.74% 0.69%
8.38% 7.41% 6.12% 5.73% 7.35%
9.55
- - ------------------------------------------------------------------------------
- - --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
- - ------------------------------------------------------------------------------
- - --
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Shearson Daily Dividend Fund Inc. (the "Fund"), a Maryland
corporation, is registered with the Securities and Exchange Commission under
the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of
its
financial statements.
Portfolio valuation: Securities are valued at amortized cost which
approximates
market value. Amortized cost valuation involves valuing an instrument at its
cost initially and thereafter assuming a constant amortization to maturity of
any discount or premium, regardless of the effect of fluctuating interest
rates
on the market value of the instrument.
Securities transactions and investment income: Securities transactions are
recorded as of the trade date. Realized gains and losses from securities
transactions are recorded on the basis of identified cost. Interest income is
recorded on the accrual basis.
Repurchase agreements: The Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund
takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding
period.
This arrangement results in a fixed rate of return that is not subject to
market
fluctuations during the Fund's holding period. The value of the collateral is
at
least equal at all times to the total amount of the repurchase obligations,
including interest. In the event of counterparty default, the Fund has the
right
to use the collateral to offset losses incurred. There is potential loss to
the
Fund in the event the Fund is delayed or prevented from exercising its rights
to
dispose of the collateral securities, including the risk of a possible decline
in the value of the underlying securities during the period while the Fund
seeks
to assert its rights. The Fund's investment adviser or administrator, acting
under the supervision of the Board of Directors, reviews the value of the
collateral and the creditworthiness of those banks and dealers with which the
Fund enters into repurchase agreements to evaluate potential risks.
Dividends and distributions to shareholders: It is the policy of the Fund to
declare dividends from net investment income on each day that the Fund is open
for business and to pay such dividends on the second Friday of the calendar
month.
32
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
- - ------------------------------------------------------------------------------
- - --
NOTES TO FINANCIAL STATEMENTS (continued)
Capital gains, unless offset by any available capital loss carryforwards, are
distributed to shareholders annually after the close of the fiscal year in
which
earned or more frequently to maintain the Fund's net asset value of $1.00 per
share. In addition, in order to avoid the application of a 4% nondeductible
excise tax on certain undistributed amounts of ordinary income and capital
gains, the Fund may make an additional distribution of any undistributed
ordinary income or capital gains before each December 31 and expects to make
any
other distributions as are necessary to avoid the application of this tax. Net
investment income distributions and capital gain distributions are determined
in
accordance with income tax regulations which may differ from generally
accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities held by the
Fund, timing differences and differing characterization of distributions made
by
the Fund as a whole.
Federal income taxes: It is the policy of the Fund to qualify as a regulated
investment company, if such qualification is in the best interest of its
shareholders, by complying with the requirements of the Internal Revenue Code
of
1986, as amended, applicable to regulated investment companies and by
distributing substantially all of its earnings to its shareholders. Therefore,
no Federal income tax provision is required.
Reclassifications: During the current period, the Fund adopted Statement of
Position 93-2 "Determination, Disclosure and Financial Statement Presentation
of
Income, Capital Gain, and Return of Capital Distributions by Investment
Companies." Accordingly, certain reclassifications have been made to the
components of capital in the Statement of Net Assets to conform with the
accounting and reporting guidelines of this statement. Distributions in excess
of book basis accumulated realized gains or undistributed net investment
income
that were the result of permanent book and tax accounting differences have
been
reclassified to paid-in capital. Accordingly, amounts as of March 31, 1993
have
been restated to reflect a decrease in paid-in capital and an increase in
accumulated net realized gains of $51,923.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with Greenwich Street Advisors, a division of Mutual Management
Corp., which is controlled by Smith Barney Shearson Holdings Inc.
("Holdings").
33
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
- - ------------------------------------------------------------------------------
- - --
NOTES TO FINANCIAL STATEMENTS (continued)
Holdings is a wholly owned subsidiary of The Travelers Inc. Under the
investment
advisory agreement, the Fund pays a monthly fee at the following annual rates:
.25% of the value of the Fund's average daily net assets up to $50 million and
.30% of the value of its average daily net assets in excess of $50 million.
Prior to July 30, 1993, Shearson Lehman Advisors served as investment adviser
to
the Fund.
The Fund also has entered into an administration agreement (the
"Administration
Agreement") dated May 21, 1993, with The Boston Company Advisors, Inc.
("Boston
Advisors"), an indirect wholly owned subsidiary of Mellon Bank Corporation
("Mellon"). Under the Administration Agreement, the Fund pays a monthly fee at
the following annual rates: .25% of the value of the Fund's average daily net
assets up to $50 million and .20% of the value of its average daily net assets
in excess of $50 million. Prior to the close of business on May 21, 1993,
Boston
Advisors served as sub-investment adviser and administrator to the Fund.
Greenwich Street Advisors and Boston Advisors have undertaken to waive fees in
an amount sufficient to ensure that the total investment advisory and
administration fees paid by the Fund will be .475% of the value of its average
daily net assets between $5 billion and $10 billion and .45% of the value of
its
average daily net assets in excess of $10 billion. For the year ended March
31,
1994, Greenwich Street Advisors and Boston Advisors voluntarily waived fees of
$2,586,780 and $1,724,520, respectively.
No officer, director, or employee of Smith Barney Shearson Inc. ("Smith Barney
Shearson"), Boston Advisors or of any parent or subsidiary of those
corporations
receives any compensation from the Fund for serving as a director or officer
of
the Fund. The Fund pays each Director who is not an officer, Director, or
employee of Smith Barney Shearson, Boston Advisors or of any of their
affiliates
$7,000 per annum plus $500 per meeting attended and reimburses each such
Director for travel and out-of-pocket expenses.
Boston Safe Deposit and Trust Company, an indirect wholly owned subsidiary of
Mellon, serves as the Fund's custodian. The Shareholder Services Group, Inc.,
a
subsidiary of First Data Corporation, serves as the Fund's transfer agent.
3. FUND SHARES
The authorized capital stock of the Fund consists of 20 billion shares with a
par value of $.01 per share. Because the Fund has sold shares, issued shares
as
reinvestments of dividends and redeemed shares only at a constant net asset
value of $1.00 per
34
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
<TABLE>
- - ------------------------------------------------------------------------------
- - --------------
NOTES TO FINANCIAL STATEMENTS (continued)
share, the number of shares represented by such sales, reinvestments and
redemptions is the same as the amounts shown below for such transactions.
<CAPTION>
YEAR ENDED
YEAR ENDED
3/31/94
3/31/93
- - ------------------------------------------------------------------------------
- - --------------
<S> <C> <C>
Sold $ 73,097,475,489 $
75,041,738,867
Issued as reinvestment of dividends 422,546,123
529,548,293
Redeemed (74,482,085,775)
(76,758,898,867)
- - ------------------------------------------------------------------------------
- - --------------
Net decrease $ (962,064,163) $
(1,187,611,707)
- - ------------------------------------------------------------------------------
- - --------------
</TABLE>
4. CAPITAL LOSS CARRYFORWARDS
At March 31, 1994 the Fund had available for Federal income tax purposes
unused
loss carryforwards of $178,264, $141,920 and $421,000 expiring in the years
1998, 1999 and 2002, respectively. Under current tax law, loss carryforwards
realized after October 31 may be deferred and treated as occurring on the
first
day of the following fiscal year.
For the fiscal year ended March 31, 1993, the Fund deferred losses of $599,117
into the fiscal year ended March 31, 1994.
5. SUBSEQUENT EVENT
On April 20, 1994, the Fund's Board of Directors approved a new administration
agreement with Smith, Barney Advisers, Inc. ("Smith Barney Advisers")
containing
substantially the same terms and conditions, including the level of fees, as
the
current agreement. The Board also approved a sub-administration agreement with
Boston Advisors. Under the proposed arrangements, Boston Advisors would be
paid
a portion of the amount paid by the Fund to Smith Barney Advisers at a rate
agreed upon from time to time between Smith Barney Advisers and Boston
Advisors.
35
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
- - ------------------------------------------------------------------------------
- - --
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
SMITH BARNEY SHEARSON DAILY DIVIDEND FUND INC.
We have audited the accompanying statement of assets and liabilities of Smith
Barney Shearson Daily Dividend Fund Inc. including the schedule of portfolio
investments, as of March 31, 1994, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the
two
years in the period then ended, and the financial highlights for each of the
ten
years in the 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
March
31, 1994 by correspondence with the custodian and brokers. 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
Smith
Barney Shearson Daily Dividend Fund Inc. as of March 31, 1994, 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 ten years in the period then ended, in conformity with generally
accepted
accounting principles.
Coopers &
Lybrand
Boston, Massachusetts
May 10, 1994
36
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
- - ------------------------------------------------------------------------------
- - --
TAX INFORMATION (UNAUDITED) YEAR ENDED MARCH 31,
1994
Of the dividends paid by the Fund from net investment income for the year
ended
March 31, 1994, 2.5% has been derived from investments in U.S. government and
agency obligations. All or a portion of the distributions from this income may
be exempt from taxation at the state level. Consult your tax advisor for state
specific information.
37
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
- - ------------------------------------------------------------------------------
- - --
PARTICIPANTS
DISTRIBUTOR
Smith Barney Shearson Inc.
388 Greenwich Street
New York, New York 10013
INVESTMENT ADVISER
Greenwich Street Advisors
Two World Trade Center
New York, New York 10048
ADMINISTRATOR
Smith, Barney Advisers, Inc.
1345 Avenue of the Americas
New York, New York 10105
SUB-ADMINISTRATOR
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
AUDITORS AND COUNSEL
Coopers & Lybrand
One Post Office Square
Boston, Massachusetts 02109
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
TRANSFER AGENT
The Shareholder Services
Group, Inc.
Exchange Place
Boston, Massachusetts 02109
CUSTODIAN
Boston Safe Deposit
and Trust Company
One Boston Place
Boston, Massachusetts 02108
38
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
- - ------------------------------------------------------------------------------
- - --
INVESTOR BENEFITS
MONTHLY DISTRIBUTIONS
It's your fund's policy to distribute dividend income monthly.
AUTOMATIC REINVESTMENT
You may reinvest your dividends and/or capital gains automatically in
additional
shares of your fund at the current net asset value.
UNLIMITED EXCHANGES
If your investment goals change, you may exchange into another Smith Barney
Shearson mutual fund with the same sales charge structure without incurring a
sales charge.*
MUTUAL FUND
EVALUATION SERVICE
Through your Financial Consultant, you may obtain a free personalized analysis
of how your fund has performed for you, taking into account the effect of
every
transaction. The analysis is based upon month-end data from CDA Investment
Technologies, Inc., a widely recognized mutual fund information service. An
evaluation also gives you other important facts and figures about your
investment.
For more information about these benefits, or if you have any other questions,
please call your Financial Consultant or write:
MUTUAL FUND POLICY GROUP
SMITH BARNEY SHEARSON
388 GREENWICH STREET 37TH FLOOR
NEW YORK, NY 10013
* After written notification, exchange privilege may be modified or terminated
at any time.
39
<PAGE>
Smith Barney Shearson
Daily Dividend Fund Inc.
- - ------------------------------------------------------------------------------
- - --
OUR APPROACH TO MUTUAL FUND INVESTING
1. PERSONAL SERVICE
The Smith Barney Shearson Financial Consultant ("FC") is highly trained and
deeply committed to client service. Your FC works with you to establish a
relationship based on one-to-one communication and the highest standards of
quality.
2. ANALYZING YOUR NEEDS
Defining your needs and establishing specific goals is the first step toward
any
successful investment program. The Smith Barney Shearson Strategic Asset
Allocator -- a sophisticated financial planning tool -- can help you and your
FC
evaluate your resources and objectives. This groundwork then becomes the basis
for a strategy designed specifically for you. Your FC can use the Strategic
Asset Allocator on a periodic basis to ensure that your investment strategy is
keeping pace with your changing needs and goals.
3. A UNIQUE MUTUAL FUND INVESTMENT PROGRAM
Your Smith Barney Shearson FC offers a number of mutual fund assessment tools
that are unmatched in the financial services industry. Smith Barney Shearson
FCs
have access to a proprietary mutual fund research database that provides
information at their fingertips on more than 2,100 funds. In addition, working
with another proprietary system known as the Mutual Fund Evaluation Service,
your FC can help guide you through the complex mutual fund maze. Specifically,
the Evaluation Service can provide a clear picture of the past performance of
mutual funds you currently own. Presented in both graphic and numerical form,
this illustration provides a wealth of easily understood data on more than
2,100
funds. This complimentary service allows you to judge whether your mutual fund
has helped meet your investment needs.
4. LOOKING AHEAD
Selecting a mutual fund should not be a one-event process that ends with the
purchase of shares. You can count on the expertise of your FC as he or she
continues to monitor and evaluate your funds, to suggest new strategies and to
listen. That, in our opinion, is how to use mutual funds to help achieve your
financial goals.
40
<PAGE>
DAILY DIVIDEND
FUND INC.
DIRECTORS
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
James J. Crisona
Robert A. Frankel
Dr. Paul Hardin
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon
OFFICERS
Heath B. McLendon
Chairman of the Board and
Investment Officer
Stephen J. Treadway
President
Richard P. Roelofs
Executive Vice President
Phillis M. Zahorodny
Vice President and
Investment Officer
Lewis E. Daidone
Treasurer
Christina T. Sydor
Secretary
This report is submitted for the information of the shareholders of Smith
Barney Shearson Daily Dividend 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.
SMITH BARNEY SHEARSON
- - ---------------------
SMITH BARNEY SHEARSON
MUTUAL FUNDS
Two World Trade Center
New York, New York 10048
Fund 1
FDO369 E4
1994
ANNUAL
REPORT
