-------------
ANNUAL REPORT
-------------
1996
1996
1996
1996
1996 [PHOTO]
Smith Barney
Managed
Municipals
Fund Inc.
-----------------------
February 29, 1996
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.
<PAGE>
-----------------------------------------
Smith Barney Managed Municipals Fund Inc.
-----------------------------------------
Dear Shareholder:
We are pleased to provide you with the annual report for the Smith Barney
Managed Municipals Fund Inc. for the year ended February 29, 1996. In this
report, we outline our current portfolio strategy and provide a brief fund
performance update. A detailed summary of performance and current holdings can
be found in the appropriate sections that follow in the annual report.
Fund Performance Update
For the twelve-month period ended February 29, 1996, Smith Barney Managed
Municipals Fund Inc. posted a total return of 11.34% for Class A shares which is
better than with its Lipper Analytical Services, Inc. peer group average of
9.89%. (Lipper Analytical Services, Inc. is a major fund tracking organization.)
According to Lipper, for the one-year period from March 1, 1995 through February
29, 1996, the Fund ranked 24 out of 227 municipal bond funds.
Market Update
The bond market came into 1996 full of bullish voices regarding virtually every
fixed income vehicle. We did not particularly share that view. Instead, we took
advantage of the bond market rally in late 1995 to lower the Fund's exposure to
interest rate risk. We purchased higher coupon issues and shortened the Fund's
weighted average maturity to make it less responsive to market fluctuations.
Over the near term, although we are a total-return oriented investor, our goal
will primarily be to obtain additional coupon income.
The year 1995 will go down in history as having one of the great bond rallies
and the Fund was well positioned to take advantage of it. However, towards the
end of the year and early in 1996, we believed that rates were reaching
insupportable levels and began to employ a more defensive investment strategy.
We plan to do so until long-term, high grade bonds retreat above 6% in yield. At
that point, we will again begin to redeploy the Fund's cash holdings. We expect
this increase in yields to happen sooner rather than later.
The issue of the flat tax, which was widely debated in the media last fall, is
fading somewhat in today's political environment. Against a backdrop of weakness
in the bond market, municipal bonds have comfortably outperformed taxable
securities. We expect municipal bonds will continue to outperform taxable
securities because of the lower volume of municipal bonds being issued today.
1
<PAGE>
Fund's Investment Strategy
During the past year, the Fund focused on general obligation, transportation and
water/sewer issues because we believe they offered good values. At the end of
February, the Fund's weighted average maturity was 20.6 years and approximately
74% of the Fund's portfolio was rated "A" or better by Moody's Investors Service
Inc. or Standard & Poor's Corporation, two major bond rating agencies.
Market Outlook
While we do not think 1996 will see a repeat of the bond market rally of 1995,
we also do not anticipate a return to the market extremes of 1994. In our view,
it is difficult to conceive of another massive bond rally starting from the
market levels of January 1, 1996.
In closing, the year ahead should be rewarding for municipal bond investors who
remain nimble in terms of managing interest rate risk and who are somewhat more
conservative with respect to their market exposure. We believe municipal bonds
will continue to provide the best after-tax income stream available in today's
market, and should be considered an integral part of many investors' overall
investment strategy.
At this time, we would like to thank you for your investment in Smith Barney
Managed Municipals Fund. We look forward to helping you meet your investment
goals.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman and Vice President and
Chief Executive Officer Investment Officer
March 15, 1996
2
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance -- Class A Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
------------------
Beginning End Income Capital Gain Return of Total
Year Ended of Year of Year Dividends Distributions Capital Returns(1)
=======================================================================================
<C> <C> <C> <C> <C> <C> <C>
2/29/96 $15.47 $16.20 $0.90 $0.08 $0.00 11.34%
- ---------------------------------------------------------------------------------------
2/28/95 16.13 15.47 0.95 0.29 0.00 4.11
- ---------------------------------------------------------------------------------------
2/28/94 16.71 16.13 0.88 0.90 0.00 7.41
- ---------------------------------------------------------------------------------------
2/28/93 15.62 16.71 1.00 0.52 0.03 17.92
- ---------------------------------------------------------------------------------------
2/28/92 14.98 15.62 1.05 0.00 0.02 11.79
- ---------------------------------------------------------------------------------------
2/28/91 15.00 14.98 1.09 0.00 0.03 7.65
- ---------------------------------------------------------------------------------------
2/28/90 14.83 15.00 1.10 0.00 0.00 8.78
- ---------------------------------------------------------------------------------------
2/28/89 15.05 14.83 1.11 0.16 0.00 7.31
- ---------------------------------------------------------------------------------------
2/28/88 15.88 15.05 1.12 0.01 0.00 2.33
- ---------------------------------------------------------------------------------------
2/28/87 15.67 15.88 1.16 0.43 0.00 12.35
=======================================================================================
Total $10.36 $2.39 $0.08
=======================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Historical Performance -- Class B Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
------------------
Beginning End Income Capital Gain Return of Total
Year Ended of Year of Year Dividends Distributions Capital Returns(1)
=======================================================================================
<C> <C> <C> <C> <C> <C> <C>
2/29/96 $15.47 $16.20 $0.82 $0.08 $0.00 10.78%
- ---------------------------------------------------------------------------------------
2/28/95 16.13 15.47 0.86 0.29 0.00 3.54
- ---------------------------------------------------------------------------------------
2/28/94 16.71 16.13 0.80 0.90 0.00 6.86
- ---------------------------------------------------------------------------------------
Inception*
- 2/28/93 15.81 16.71 0.31 0.52 0.01 11.26+
- ---------------------------------------------------------------------------------------
Total $2.79 $1.79 $0.01
=======================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Historical Performance -- Class C Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
------------------
Beginning End Income Capital Gain Return of Total
Year Ended of Year of Year Dividends Distributions Capital Returns(1)
=======================================================================================
<C> <C> <C> <C> <C> <C> <C>
2/29/96 $15.47 $16.20 $0.82 $0.08 $0.00 10.76%
- ---------------------------------------------------------------------------------------
Inception*
- 2/28/95 14.30 15.47 0.27 0.29 0.00 12.36+
- ---------------------------------------------------------------------------------------
Total $1.09 $0.37 $0.00
=======================================================================================
</TABLE>
3
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance -- Class Y Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
------------------
Beginning End Income Capital Gain Return of Total
Year Ended of Year of Year Dividends Distributions Capital Returns(1)
=======================================================================================
<C> <C> <C> <C> <C> <C> <C>
Inception*
- 2/29/96 $15.63 $16.20 $0.85 $0.08 $0.00 9.84%+
=======================================================================================
</TABLE>
It is the Fund's policy to distribute dividends monthly and capital gains, if
any, annually.
- --------------------------------------------------------------------------------
Average Annual Total Return
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Without Sales Charge(1)
----------------------------------------
Class A Class B Class C Class Y
================================================================================
<S> <C> <C> <C> <C>
Year Ended 2/29/96 11.34% 10.78% 10.76% N/A
- --------------------------------------------------------------------------------
Five Years Ended 2/29/96 10.41 N/A N/A N/A
- --------------------------------------------------------------------------------
Ten Years Ended 2/29/96 9.02 N/A N/A N/A
- --------------------------------------------------------------------------------
Inception* through 2/29/96 11.51 9.80 18.22 9.84%+
================================================================================
<CAPTION>
With Sales Charge(2)
----------------------------------------
Class A Class B Class C Class Y
================================================================================
<S> <C> <C> <C> <C>
Year Ended 2/29/96 6.92% 6.28% 9.76% N/A
- --------------------------------------------------------------------------------
Five Years Ended 2/29/96 9.52 N/A N/A N/A
Ten Years Ended 2/29/96 8.57 N/A N/A N/A
Inception* through 2/29/96 11.20 9.32 18.22 9.84%+
================================================================================
</TABLE>
4
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Cumulative Total Return
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Without Sales Charge(1)
================================================================================
<S> <C>
Class A (2/28/86 through 2/29/96) 137.04%
- --------------------------------------------------------------------------------
Class B (Inception* through 2/29/96) 36.37
- --------------------------------------------------------------------------------
Class C (Inception* through 2/29/96) 24.45
- --------------------------------------------------------------------------------
Class Y (Inception* through 2/29/96) 9.84+
================================================================================
</TABLE>
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charge with respect to Class A shares or the applicable
contingent deferred sales charges ("CDSC") with respect to Class B and C
shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A shares reflect the deduction
of the maximum initial sales charge of 4.00% and Class B shares reflect the
deduction of a 4.50% CDSC which applies if shares are redeemed less than
one year from initial purchase. This CDSC declines by 0.50% the first year
after purchase and thereafter by 1.00% per year until no CDSC is incurred.
Class C shares reflect the deduction of a 1.00% CDSC which applies if
shares are redeemed within the first year of purchase.
* Inception dates for Class B, C and Y shares are November 6, 1992, November
9, 1994 and April 4, 1995, respectively. Shares issued prior to November 6,
1992 were designated as Class A shares.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
5
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Class A Shares of
Smith Barney Managed Municipals Fund Inc. vs.
Lehman Brothers Municipal Bond Index and the
Lipper Peer Group Average+
- --------------------------------------------------------------------------------
February 1986 - February 1996
(INSERT TABLE)
+ Hypothetical illustration of $10,000 invested in Class A shares on February
28, 1986, assuming deduction of the maximum 4.00% sales charge at the time of
investment and reinvestment of dividends and capital gains, if any, at net
asset value through February 29, 1996. The Lehman Brothers Municipal Bond
Index is a weighted composite which is comprised of more than 15,000 bonds
issued within the last 5 years, having a minimum credit rating of at least Baa
and a maturity of at least 2 years, excluding all bonds subject to the
Alternative Minimum Tax and bonds with floating or zero coupons. The index is
unmanaged and is not subject to the same management and trading expenses of a
mutual fund. The Lipper Analytical Services, Inc. Peer Group Average ("Lipper
Peer Group Average") is composed of an average of the Fund's peer group of 243
mutual funds investing in municipal securities. The performance of the Fund's
other classes may be greater or less than the Class A shares' performance
indicated on this chart, depending on whether greater or lesser sales charges
and fees were incurred by shareholders investing in the other classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and redemption
values may be more or less than the original cost. No adjustment has been made
for shareholder tax liability on dividends or capital gains.
6
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Portfolio Highlights (unaudited) February 29, 1996
- --------------------------------------------------------------------------------
Industry Breakdown
[The following information was represented by a
pie chart in the printed matter.]
General Obligation 16.7%
Transportation 11.6%
Housing 8.1%
Hospital 6.0%
Pollution Control 3.8%
Education 3.1%
Industrial Development 0.8%
Other Municipal bonds and Short-term Investments 25.5%
Power 4.6%
Utilities 9.0%
Water and Sewer 10.8%
Top Five States Represented
<TABLE>
<CAPTION>
Percentage of
State Total Investments
- --------------------------------------------------------------------------------
<S> <C>
California 13.2%
Texas 11.3
New York 10.7
Colorado 10.5
Massachusetts 6.2
</TABLE>
Summary of Investments by Combined Ratings
<TABLE>
<CAPTION>
Standard & Percentage of
Moody's and/or Poor's Total Investments
- --------------------------------------------------------------------------------
<S> <C> <C>
Aaa AAA 40.1%
Aa AA 17.9
A A 8.1
Baa BBB 14.0
Ba BB 0.9
VMIG 1/P-1 A-1 8.0
NR NR 11.0
-----
100.0%
=====
</TABLE>
7
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 92.3%
Alabama -- 0.4%
$10,000,000 AAA Wilsonville, AL Industrial Development Board, PCR,
Alabama Power Co., Gaston Plant, Series C,
MBIA-Insured, 5.500% due 1/1/24 $ 9,650,000
- --------------------------------------------------------------------------------
Alaska -- 1.7%
46,250,000 AA- Valdez, AK Marine Terminal Revenue, Series A,
5.850% due 8/1/25 (a) 45,614,062
- --------------------------------------------------------------------------------
Arizona -- 0.6%
12,170,000 A Greenlee County, AZ IDA, PCR, (Phelps Dodge
Corporation Project), 5.450% due 6/1/09 12,215,638
480,000 Caa* Maricopa County, AZ Hospital Revenue,
Phoenix General Hospital, Series A,
8.500% due 1/1/16 450,600
4,000,000 A Maricopa County, AZ IDA, Multi-Family Housing
Revenue, Series A, 6.500% due 10/1/25 3,995,000
- --------------------------------------------------------------------------------
16,661,238
- --------------------------------------------------------------------------------
California -- 13.2%
2,240,000 A+ ABAG Finance Authority for Nonprofit
Corporations, 5.750% due 11/1/05 2,312,800
6,000,000 AAA Adelanto, CA Improvement Agency, Tax
Allocation, Series B, FGIC-Insured,
5.500% due 12/1/23 5,835,000
6,600,000 AAA Alhambra, CA Redevelopment Agency, Tax
Allocation, AMBAC-Insured, 5.850% due 5/1/23 6,682,500
6,550,000 AAA Anaheim, CA Public Financing Authority Revenue,
MBIA-Insured, 5.625% due 10/1/22 6,484,500
2,250,000 A* Apple Valley, CA School District COP,
5.900% due 9/1/11 2,266,875
7,000,000 AAA Brea, CA Redevelopment Agency, (Tax Allocation
Project), MBIA-Insured, 5.750% due 8/1/23 7,000,000
California Educational Facilities Authority
Revenue:
2,000,000 A* Pooled College & University Projects,
Series A, 5.600% due 12/1/14 1,957,500
1,000,000 A* University of Redlands, 6.000% due 10/1/25 1,018,750
California Health Facilities Finance Authority
Revenue:
1,000,000 A Daniel Freeman Hospital, Series A,
6.500% due 5/1/20 1,036,250
17,100,000 AA Kaiser Permanente, 5.550% due 8/15/25 16,416,000
2,590,000 Aa* California HFA Revenue Bonds, Home Mortgage,
Series B, FHA-Insured, 5.700% due 2/1/25 2,483,163
14,085,000 AAA California State GO, AMBAC-Insured,
5.900% due 3/1/25 14,366,700
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
California -- 13.2% (continued)
California Statewide Communities,
St. Joseph's Health:
$ 1,000,000 AA 5.500% due 7/1/14 $ 976,250
3,000,000 AA 5.500% due 7/1/23 2,891,250
4,000,000 AAA California Statewide Communities Development
Authority, Multi-Family Revenue, Series E,
6.400% due 6/1/28 (b) 4,020,000
California Statewide Water Department Resources:
19,000,000 AA Series L, 5.750% due 12/1/19 19,213,750
8,545,000 AA Series M, 5.750% due 12/1/14 8,694,537
7,000,000 AAA Chino, CA Unified School District COP,
FSA-Insured, 6.125% due 9/1/26 7,262,500
5,000,000 AAA Contra Costa County, CA Multi-Family Housing
Revenue, (Crescent Park Apartments Project),
Series B, GNMA-Collateralized,
7.800% due 6/20/34 5,525,000
15,215,000 AAA Corona, CA Redevelopment Agency, Area A,
Series A, FGIC-Insured, 5.500% due 9/1/24 14,891,681
2,000,000 AAA Desert Sands, CA Unified School District COP,
Capital Projects, FSA-Insured,
5.625% due 3/1/15 2,005,000
East Bay, CA Municipal Utility District, Water
System Revenue:
8,735,000 AAA 5.000% due 6/1/14 8,298,250
5,000,000 AA- 6.000% due 6/1/20 5,131,250
5,000,000 AAA Fresno County, CA Financing Authority,
Solid Waste Revenue, (American Avenue
Landfill Project), MBIA-Insured,
5.750% due 5/15/14 5,037,500
Long Beach, CA Aquarium of the Pacific Project:
1,260,000 BBB 5.750% due 7/1/05 1,256,850
1,200,000 BBB 5.750% due 7/1/06 1,191,000
10,000,000 AAA Long Beach, CA Financing Authority,
Revenue Bonds, AMBAC-Insured,
5.500% due 11/1/22 9,800,000
Los Angeles, CA Wastewater Systems, Revenue Bonds:
Series A, MBIA-Insured:
18,570,000 AAA 5.800% due 6/1/21 18,709,275
5,000,000 AAA 5.875% due 6/1/24 5,087,500
Series B, MBIA-Insured:
5,375,000 AAA 5.600% due 6/1/20 5,301,094
53,000,000 AAA 5.700% due 6/1/23 52,602,500
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
California -- 13.2% (continued)
$27,500,000 AAA Los Angeles County, CA Metropolitan
Transportation Sales Tax Revenue,
Series A, MBIA-Insured, 5.625% due 7/1/18 $ 27,225,000
2,000,000 AA Metropolitan Water District, Southern CA,
5.500% due 7/1/19 1,950,000
4,500,000 AAA Oceanside, CA COP, AMBAC-Insured,
5.800% due 5/1/21 4,545,000
4,975,000 AAA Ontario, CA Redevelopment Financing Authority,
(Project No.1), MBIA-Insured, 5.500%
due 8/1/18 4,912,812
6,500,000 AAA Orange, CA Redevelopment Agency, Series A,
AMBAC-Insured, 5.700% due 10/1/23 6,451,250
3,000,000 AAA Oxnard, CA Financing Authority, FGIC-Insured,
5.500% due 6/1/14 2,947,500
8,380,000 AAA Palmdale, CA Civic Authority Revenue, Series A,
MBIA-Insured, 5.500% due 7/1/23 8,380,000
4,100,000 AAA Palmdale, CA Water District COP, (Littlerock Dam
Project), Series A, MBIA-Insured,
5.600% due 10/1/17 4,110,250
3,000,000 AAA San Bernadino County, CA COP, West Valley
Detention Center, MBIA-Insured,
6.000% due 11/1/18 3,090,000
2,000,000 AAA San Buenaventura, CA COP, (Capital Improvement
Project), AMBAC-Insured, 5.500% due 1/1/17 1,975,000
San Francisco, CA City and County, Sewer
Revenue, FGIC-Insured:
4,365,000 AAA 5.375% due 10/1/16 4,244,963
6,700,000 AAA 5.375% due 10/1/22 6,406,875
Santa Clara County, CA Finance Authority,
AMBAC-Insured:
5,500,000 AAA 6.750% due 11/15/20 6,118,750
2,000,000 AAA 6.250% due 11/15/22 2,102,500
Sierra, CA Unified School District COP:
395,000 Baa* 5.450% due 3/1/02 392,038
405,000 Baa* 5.550% due 3/1/03 401,456
5,000,000 AAA Simi Valley, CA Public Finance Authority
Revenue, MBIA-Insured, 5.750% due 9/1/23 5,031,250
3,200,000 AAA South Coast, CA Air Quality Management,
Installment Sale Headquarters, AMBAC-Insured,
5.500% due 8/1/14 3,180,000
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
California -- 13.2% (continued)
$ 5,500,000 AAA South Orange County, CA Special Tax Revenue,
Series A, MBIA-Insured, 6.000% due 9/1/18 $ 5,658,125
- --------------------------------------------------------------------------------
344,877,994
- --------------------------------------------------------------------------------
Colorado -- 10.5%
Arapahoe County, CO Capital Improvement
Transportation Highway Revenue:
275,000,000 Baa* Zero coupon due 8/31/26 30,937,500
42,250,000 Baa* 7.000% due 8/31/26 (a) 46,686,250
12,765,000 BBB+ Colorado Springs, CO Airport Revenue,
Series A, 7.000% due 1/1/22 (a)(b) 13,530,900
Dawson Ridge, CO Metropolitan District No. 1,
(Escrowed to Maturity with U.S. Government
Securities):
364,000,000 AAA Series A, zero coupon due 10/1/22 65,520,000
67,785,000 AAA Series B, zero coupon due 10/1/22 12,201,300
Denver, CO City & County Airport Revenue:
Series A:
26,500,000 Baa* 14.000% due 11/15/08 (b) 45,281,875
13,500,000 Baa* 8.000% due 11/15/25 (b) 15,626,250
Series C:
3,500,000 Baa* 6.750% due 11/15/13 (a)(b) 3,661,875
12,035,000 Baa* 6.750% due 11/15/22 (a)(b) 12,561,531
22,425,000 Baa* Series D, 7.000% due 11/15/25 (b) 24,863,719
1,600,000 A- East Cherry Creek Valley, CO Water &
Sanitation District Revenue Bonds, 10.125%
due 12/1/00 1,669,856
1,700,000 A Larimer & Weld Counties, CO School
District GO, 5.750% due 11/15/20 1,683,000
- --------------------------------------------------------------------------------
274,224,056
- --------------------------------------------------------------------------------
Connecticut -- 3.0%
Connecticut State GO, Series A:
10,875,000 Aa* 5.700% due 3/15/10 11,269,219
20,115,000 Aa* 5.700% due 3/15/11 20,693,306
13,750,000 Aa* 5.800% due 3/15/12 14,128,125
13,940,000 Aa* 5.800% due 3/15/13 14,271,075
5,590,000 Aa* 5.800% due 3/15/14 5,680,838
10,930,000 Aa* 5.800% due 3/15/15 11,080,287
- --------------------------------------------------------------------------------
77,122,850
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Florida -- 2.1%
Broward County, FL GO, Public Improvement
Revenue:
$ 1,000,000 AA 12.500% due 1/1/02 $ 1,408,750
1,250,000 AA 12.500% due 1/1/03 1,826,562
1,500,000 AA 12.500% due 1/1/04 2,270,625
1,750,000 AA 12.500% due 1/1/05 2,732,188
2,000,000 AA 12.500% due 1/1/06 3,200,000
6,980,000 AAA Dade County, FL School District, MBIA-Insured,
5.500% due 8/1/14 6,988,725
11,110,000 AA Florida State Board of Education GO,
Capital Outlay, Series C, 5.875% due 6/1/23 11,248,875
Martin County, FL IDA, Indiantown Cogeneration:
10,000,000 BBB- Project A, 7.875% due 12/15/25 (a)(b) 11,400,000
6,010,000 BBB- Project B, 8.050% due 12/15/25 (b) 6,926,525
Tampa, FL Revenue Bonds, (Florida Aquarium
Inc. Project):
3,000,000 NR 7.550% due 5/1/12 3,146,250
3,000,000 NR 7.750% due 5/1/27 3,131,250
- --------------------------------------------------------------------------------
54,279,750
- --------------------------------------------------------------------------------
Georgia -- 0.8%
580,000 AA- Brunswick, GA Housing Authority, Multi-Family
Housing Revenue, Cypress Mill, FHA-Insured,
9.750% due 8/1/26 614,075
Richmond County, GA Development Authority
Revenue, (Escrowed to Maturity with U.S.
Government Securities):
46,590,000 Aaa* Series A, 1st Mortgage, zero coupon
due 12/1/21 8,852,100
12,800,000 Aaa* Subseries C, zero coupon due 12/1/21 2,432,000
19,705,000 Aaa* Savannah, GA EDA Revenue, (Escrowed to Maturity
with U.S. Government Securities), zero coupon
due 12/1/21 3,743,950
Washington, GA EDA, Wilkes Payroll Company,
Escrowed to Maturity with U.S. Government
Securities:
16,625,000 AAA Zero coupon due 12/1/21 3,158,750
8,800,000 AAA Zero coupon due 12/1/21 1,672,000
- --------------------------------------------------------------------------------
20,472,875
- --------------------------------------------------------------------------------
Hawaii -- 0.3%
7,000,000 A- Hawaii State Airports Systems Revenue, 2nd
Series, 7.000% due 7/1/18 (b) 7,665,000
- --------------------------------------------------------------------------------
Illinois -- 1.6%
4,000,000 AA- Chicago, IL Gas Supply Revenue Refunding,
The Peoples Gas, Series A, 6.100% due 6/1/25 4,060,000
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Illinois -- 1.6% (continued)
$ 4,590,000 AAA Illinois Municipal Electric Agency Power Supply
System Revenue, Series A, AMBAC-Insured,
5.750% due 2/1/21 $ 4,544,100
Illinois State GO:
4,000,000 AA- 5.750% due 4/1/13 4,065,000
5,600,000 AA- 5.750% due 4/1/14 5,649,000
12,900,000 AA- 5.875% due 8/1/16 13,093,500
3,000,000 AAA Illinois State COP, Department of Central
Management Services, Public Aid Building,
MBIA-Insured, 5.650% due 7/1/17 2,947,500
3,160,000 Aaa* Lansing, IL Multi-Famiy Housing Revenue,
GNMA-Collateralized, Salem Cross Apartments,
Series A, 6.100% due 3/1/20 3,124,450
University of Illinois Revenue Bonds, Auxilary
Facilities Systems, MBIA-Insured:
1,000,000 AAA 5.375% due 10/1/13 980,000
4,000,000 AAA 5.600% due 10/1/22 3,920,000
- --------------------------------------------------------------------------------
42,383,550
- --------------------------------------------------------------------------------
Indiana -- 1.2%
Indiana Bond Bank, State Revenue, Guarantee-State
Revolving Fund, (Project A):
3,005,000 A 6.250% due 2/1/09 3,155,250
2,500,000 A 6.000% due 2/1/15 2,568,750
2,205,000 A 6.000% due 2/1/16 2,260,125
Indiana Health Facilities Authority Revenue,
Riverview Hospital:
245,000 Baa1* 5.800% due 8/1/97 246,838
240,000 Baa1* 6.000% due 8/1/98 242,400
255,000 Baa1* 6.200% due 8/1/99 259,144
305,000 Baa1* 6.500% due 8/1/01 313,387
200,000 Baa1* 6.600% due 8/1/02 206,250
3,700,000 Baa1* St. Anthony Medical/Home Inc., Series H,
9.250% due 10/1/17 4,079,250
2,000,000 AAA Indiana University Revenues, Student Fee,
Series K, MBIA-Insured, 5.875% due 8/1/20 2,030,000
15,000,000 AAA Rockport, IN PCR, Series A, AMBAC-Insured,
6.550% due 6/1/25 15,881,250
- --------------------------------------------------------------------------------
31,242,644
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
13
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Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
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Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Maine -- 0.3%
$ 8,100,000 AA- Maine State Housing Authority, Mortgage Power
Revenue, Series A, 5.650% due 11/15/20 $ 7,857,000
- --------------------------------------------------------------------------------
Maryland -- 2.6%
Baltimore County, MD Mortgage Revenue,
GNMA-Collateralized:
2,500,000 AAA Day Village Apartments Project, Series A,
5.625% due 1/20/14 2,468,750
2,000,000 AAA Northbrooke Apartments Project, Series A,
6.350% due 1/20/21 2,042,500
1,500,000 AAA Charles County, MD Mortgage Revenue, (Holly
Station Project), Series A, FHA-Insured,
6.450% due 5/1/26 1,535,625
56,000,000 NR Maryland State Energy, Solid Waste Disposal
Revenue, Recycling Hagerstown, 9.000%
due 10/15/16 (a) 57,540,000
Montgomery County, MD Housing Opportunities
Community, Multi-Family Housing Revenue,
Series A:
2,135,000 Aa* 5.900% due 7/1/15 2,097,638
1,755,000 Aa* 6.000% due 7/1/20 1,761,581
- --------------------------------------------------------------------------------
67,446,094
- --------------------------------------------------------------------------------
Massachusetts -- 6.2%
15,785,000 AAA Massachusetts Bay Transportation Authority,
Series A, MBIA-Insured, 5.500% due 3/1/22 15,212,794
3,420,000 AAA Massachusetts Bay Transportation Authority,
General Transportation, Series B,
AMBAC-Insured, 5.375% due 3/1/25 3,278,925
Massachusetts State, Health and Educational
Facilities Authority Revenue:
3,000,000 AAA Baystate Medical Center, Series D,
FGIC-Insured, 5.000% due 7/1/12 2,827,500
7,870,000 AAA Lahey Clinic Medical Center, MBIA-Insured,
5.375% due 7/1/23 7,535,525
3,000,000 AAA New England Medical Center, MBIA-Insured,
3.100% due 7/1/13 2,565,000
15,250,000 AAA Newton Wellesley Hospital, Series E,
MBIA-Insured, 6.000% due 7/1/25 15,707,500
10,000,000 AAA Tufts University, Series F, FGIC-Insured,
5.950% due 8/15/18 10,262,500
Massachusetts State HFA, Multi-Family
Housing, Series A:
3,800,000 AAA AMBAC-Insured, 6.150% due 10/1/15 3,857,000
13,000,000 AAA MBIA-Insured, 6.150% due 7/1/18 13,292,500
</TABLE>
See Notes to Financial Statements.
14
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Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
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- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Massachusetts -- 6.2% (continued)
$ 3,500,000 A+ Massachusetts State HFA, Single-Family
Housing, Series 44, 5.900% due 12/1/13 $ 3,513,125
31,700,000 NR Massachusetts State Industrial Finance
Agency, Solid Waste Disposal Revenue,
Series A, 9.000% due 8/1/16 (a) 31,739,625
Massachusetts State Water Resources Authority:
Series A, MBIA-Insured:
29,405,000 AAA 6.000% due 8/1/20 30,176,881
3,740,000 AAA 6.000% due 8/1/24 3,838,175
3,000,000 A Series B, 5.500% due 3/1/17 2,895,000
13,835,000 AAA Massachusetts State GO, Series A,
MBIA-Insured, 5.750% due 2/1/15 14,146,288
1,250,000 AAA Southeastern Massachusetts University Building
Refunding, Series A, AMBAC-Insured, Muni
Government Guaranteed, 5.750% due 5/1/16 1,271,875
- --------------------------------------------------------------------------------
162,120,213
- --------------------------------------------------------------------------------
Michigan -- 4.6%
4,500,000 AAA Detroit, MI Sewer Disposal Revenue Refunding,
Series A, FGIC-Insured, 5.700% due 7/1/13 4,533,750
Lakeshore, MI Public Schools, MBIA-Insured:
2,500,000 AAA 5.750% due 5/1/15 2,537,500
2,500,000 AAA 5.700% due 5/1/22 2,506,250
8,000,000 AAA Michigan State Hospital Finance Authority
Revenue, Oakwood Hospital Group, Series A,
FGIC-Insured, 5.500% due 11/1/13 7,910,000
Michigan State Housing Development Authority,
Rental Housing Revenue:
5,000,000 AAA Series A, AMBAC-Insured, 5.875%
due 10/1/17 4,993,750
18,215,000 AAA Series B, MBIA-Insured, 6.150%
due 10/1/15 18,556,531
17,000,000 NR Michigan State Strategic Funding Limited
Obligation Revenue, (Blue Water Fiber
Project), 8.000% due 1/1/12 16,320,000
56,625,000 NR Midland County, MI Economic Development
Corporation, PCR Bonds, Subordinated
Limited Obligation, Series B, 9.500%
due 7/23/09 (b) 62,570,625
- --------------------------------------------------------------------------------
119,928,406
- --------------------------------------------------------------------------------
Minnesota -- 2.8%
2,855,000 NR Dakota County, MN Housing Redevelopment Authority,
Multi-Family Mortgage Revenue, Series 1985A,
9.500% due 6/1/08 2,812,175
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Minnesota -- 2.8% (continued)
Minnesota State HFA, Rental Housing Revenue,
Series D, MBIA-Insured:
$ 4,205,000 AAA 5.450% due 2/1/07 $ 4,215,513
4,565,000 AAA 5.450% due 8/1/07 4,576,412
4,345,000 AAA 5.550% due 2/1/08 4,355,862
4,820,000 AAA 5.550% due 8/1/08 4,832,050
11,360,000 AAA 5.800% due 8/1/11 11,388,400
8,900,000 AAA 5.900% due 8/1/15 8,922,250
3,500,000 AAA 5.950% due 2/1/18 3,508,750
3,600,000 AAA 6.000% due 2/1/22 3,609,000
21,405,000 Baa1* St. Paul, MN Housing and Redevelopment
Authority, Hospital Revenue Bonds,
(Healtheast Project), Series D, 9.750%
due 11/1/17 23,331,450
1,430,000 CCC St. Paul, MN Port Authority, IDR, Series
1984B, 11.000% due 12/1/13(a) 1,353,138
- --------------------------------------------------------------------------------
72,905,000
- --------------------------------------------------------------------------------
Missouri -- 0.5%
9,060,000 AAA Kansas City, MO Municipal Assistance Corporation
Revenue, Bartle Convention Center, Series A,
MBIA-Insured, 5.600% due 4/15/16 9,060,000
Saint Charles, MO GO School District:
1,845,000 AA 5.125% due 3/1/13 1,810,406
1,995,000 AA 5.125% due 3/1/14 1,945,125
- --------------------------------------------------------------------------------
12,815,531
- --------------------------------------------------------------------------------
Montana -- 1.3%
33,400,000 NR Montana State Board, Resource Recovery Revenue,
(Yellowstone Energy LP Project),
7.000% due 12/31/19 (a)(b) 32,732,000
- --------------------------------------------------------------------------------
Nevada -- 0.4%
9,275,000 AAA Clark County, NV School District, Series A,
MBIA-Insured, 5.875% due 6/15/13 9,622,812
- --------------------------------------------------------------------------------
New Hampshire -- 1.7%
18,655,000 AAA New Hampshire Higher Education & Health
Facilities Authority Revenue, Mary Hitchcock
Memorial Hospital, FGIC-Insured, 5.750%
due 8/15/23 18,724,956
23,500,000 BBB- New Hampshire IDA, PCR Bonds, UTD Illuminating,
Series B, 10.750% due 10/1/12 (a)(b) 26,143,750
- --------------------------------------------------------------------------------
44,868,706
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
New Jersey -- 2.3%
$ 3,375,000 AAA Monmouth County, NJ Improvement Authority
Revenue, FSA-Insured, 5.450% due 7/15/13 $ 3,353,906
6,000,000 AAA New Jersey EDA Market Transition Facilities
Revenue, Series A, MBIA-Insured, 5.875%
due 7/1/11 6,277,500
New Jersey State Housing & Mortgage Finance
Agency, Multi-Family Housing Revenue, Series A,
AMBAC-Insured:
7,340,000 AAA 6.000% due 11/1/14 7,477,625
12,950,000 AAA 6.050% due 11/1/20 13,192,813
8,515,000 AAA New Jersey State Housing & Mortgage Finance
Agency, Home Buyer Series O, MBIA-Insured,
6.350% due 10/1/27 (b) 8,674,656
13,000,000 AAA Salem County, NJ Industrial Pollution Control,
Financing Authority Revenue Bonds, (Public
Service Electric & Gas Project), Series A,
MBIA-Insured, 5.700% due 5/1/28 13,032,500
7,520,000 A+ South Jersey Port Corporation, NJ Revenue,
Marine Terminal, Series G, 5.600% due 1/1/23 7,313,200
- --------------------------------------------------------------------------------
59,322,200
- --------------------------------------------------------------------------------
New Mexico -- 0.4%
1,500,000 AAA Farmington, NM Utility Systems Revenue Bonds,
FGIC-Insured, 9.750% due 5/15/13 1,548,675
2,000,000 AAA Las Cruces, NM Utility Revenue, MBIA-Insured,
5.500% due 12/1/11 (b) 1,992,500
New Mexico Mortgage Finance Authority,
Single-FamilyMortgage Revenue, GNMA, FNMA
& FHLMC-Collateralized:
1,500,000 AAA 5.550% due 7/1/17 1,485,000
2,000,000 AAA 5.650% due 7/1/27 1,965,000
3,550,000 Aaa* Santa Fe, NM Single Family Mortgage Revenue,
FNMA & GNMA-Collateralized, 6.300%
due 11/1/28 (b) 3,567,750
- --------------------------------------------------------------------------------
10,558,925
- --------------------------------------------------------------------------------
New York -- 10.0%
City University of New York COP, John
Jay College:
14,165,000 BBB 5.750% due 8/15/03 14,430,594
14,315,000 BBB 5.750% due 8/15/05 14,440,256
3,500,000 BBB 6.000% due 8/15/06 3,591,875
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
New York -- 10.0% (continued)
New York City, NY GO:
Series B:
$ 2,500,000 BBB+ 6.200% due 8/15/06 $ 2,571,875
3,500,000 BBB+ 7.250% due 8/15/07 3,959,375
9,870,000 BBB+ 5.750% due 8/15/08 9,721,950
Series D:
1,315,000 BBB+ 6.500% due 2/15/05 1,388,969
10,055,000 BBB+ 6.500% due 2/15/06 10,557,750
2,400,000 BBB+ 6.000% due 2/15/09 2,409,000
Series E:
4,000,000 BBB+ 6.500% due 2/15/05 4,240,000
2,490,000 BBB+ 5.750% due 5/15/06 2,477,550
New York City, NY Municipal Water Finance
Authority, Water & Sewer Revenue:
Series A:
10,000,000 A* 5.500% due 6/15/20 9,587,500
23,280,000 A* 5.500% due 6/15/23 22,377,900
5,000,000 A* 6.000% due 6/15/25 5,081,250
3,300,000 AAA Series A, AMBAC-Insured, 5.750% due 6/15/18 3,312,375
9,185,000 AAA Series A, FGIC-Insured, 5.750% due 6/15/18 9,219,444
3,050,000 AAA Series F, MBIA-Insured, 5.750% due 6/15/20 3,072,875
New York State Dormitory Authority:
City University System:
6,000,000 AAA 2nd Residence, Series 95A, FGIC-Insured,
5.375% due 7/1/14 5,880,000
3rd Residence, Series 95-1, AMBAC-Insured:
3,400,000 AAA 5.250% due 7/1/08 3,391,500
3,575,000 AAA 5.250% due 7/1/09 3,548,188
3,765,000 AAA 5.250% due 7/1/10 3,722,644
12,060,000 AAA 5.375% due 7/1/25 11,562,525
5,000,000 AAA Series 2-1994, MBIA-Insured, 6.250%
due 7/1/19 5,206,250
Iona College, MBIA-Insured:
485,000 AAA 6.600% due 7/1/07 534,712
420,000 AAA 6.600% due 7/1/08 462,000
555,000 AAA 6.600% due 7/1/09 608,419
540,000 AAA 6.700% due 7/1/10 592,650
1,000,000 AA Wesley Garden Nursing Home, FHA-Insured,
5.900% due 8/1/15 976,250
7,420,000 Aa* New York State Environmental Facilities
Corporation, PCR, State Water Revolving
Fund, NYC Muni Water, 5.875% due 6/15/14 7,633,325
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
New York -- 10.0% (continued)
New York State, Local Government Assistance Corporation:
Series A:
$ 2,135,000 A 5.900% due 4/1/12 $ 2,185,706
1,950,000 A 5.900% due 4/1/13 1,989,000
3,420,000 A 5.500% due 4/1/23 3,253,275
Series B:
8,050,000 A 5.500% due 4/1/21 7,667,625
Series C:
3,575,000 A 5.500% due 4/1/22 3,405,188
2,000,000 Aa* New York State Mortgage Agency Revenue,
Homeowner's Mortgage, 5.850% due 10/1/25 (b) 1,937,500
6,025,000 AA New York State Medical Care Facilities Finance
Agency, Series A, FHA-Insured, 6.375%
due 8/15/24 6,303,656
2,000,000 A* New York State Refunding GO, 12.000%
due 11/15/03 2,915,000
New York State Thruway Authority Revenue,
FGIC-Insured:
8,460,000 AAA Series A, 5.500% due 1/1/23 8,227,350
Series C:
4,250,000 AAA 6.000% due 1/1/15 4,404,062
30,825,000 AAA 6.000% due 1/1/25 31,672,687
Port Authority of New York & New Jersey,
MBIA-Insured:
5,030,000 AAA 5.700% due 10/15/20 5,055,150
5,000,000 AAA 5.875% due 10/15/27 5,050,000
10,000,000 Aa* Triborough Bridge & Tunnel Authority of New
York, General Purpose Revenue Bonds,
Series P, 5.500% due 1/1/19 9,662,500
- --------------------------------------------------------------------------------
260,287,700
- --------------------------------------------------------------------------------
North Carolina -- 0.9%
4,500,000 BBB+ Carteret County, NC COP, (Elementary School
Project), 6.500% due 2/1/07 4,770,000
12,000,000 AAA North Carolina Municipal Power Agency,
Catawaba Electric Revenue, MBIA-Insured,
5.500% due 1/1/12 11,955,000
6,915,000 Aa* North Carolina HFA, Single-Family Housing,
Series CC, FHA-Insured, 5.950%
due 9/1/17 6,958,219
- --------------------------------------------------------------------------------
23,683,219
- --------------------------------------------------------------------------------
North Dakota -- 0.7%
1,000,000 NR Grand Forks, ND Housing Facilities Revenue,
Senior United Health Resources, 9.250%
due 12/1/10 1,110,000
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
North Dakota -- 0.7% (continued)
$16,000,000 AAA Mercer County, ND PCR, Basin Electric Power
Company, 2nd Series, AMBAC-Insured, 6.050%
due 1/1/19 $ 16,520,000
- --------------------------------------------------------------------------------
17,630,000
- --------------------------------------------------------------------------------
Ohio -- 0.9%
3,000,000 Aaa* Akron, Bath and Copley, OH Joint Township,
Hospital Revenue Bonds, (Akron City Hospital
Project), 8.875% due 11/15/07 3,315,000
2,000,000 AA Grandview Heights, OH City School District,
6.050% due 12/1/15 2,120,000
750,000 AAA Montgomery County, OH Solid Waste Revenue,
MBIA-Insured, 5.350% due 11/1/10 748,125
6,500,000 AAA Ohio State Water Development Authority Revenue,
Fresh Water, AMBAC-Insured, 5.900%
due 12/1/21 6,695,000
10,145,000 Aa3* Toledo Lucas County, OH Port Authority,
(Cargill Inc. Project), 5.900%
due 12/1/15 10,373,262
- --------------------------------------------------------------------------------
23,251,387
- --------------------------------------------------------------------------------
Oklahoma -- 0.1%
1,975,000 AA Tulsa, OK Industrial Authority Hospital
Revenue, St. John Medical Center, 6.250%
due 2/15/17 2,024,375
1,000,000 AA- Woods County, OK IDA, Revenue Refunding,
(Cargill Inc. Project), 6.250% due 10/1/14 1,050,000
- --------------------------------------------------------------------------------
3,074,375
- --------------------------------------------------------------------------------
Oregon -- 0.4%
1,720,000 A1 Multnomah County, OR School District,
5.500% due 6/1/15 1,702,800
6,950,000 Aa* Oregon State GO, Series B, 6.375% due 8/1/24 7,471,250
1,500,000 AAA Oregon Veterans Welfare GO, Series L,
12.500% due 9/1/06 1,597,035
- --------------------------------------------------------------------------------
10,771,085
- --------------------------------------------------------------------------------
Pennsylvania -- 1.4%
- --------------------------------------------------------------------------------
6,250,000 AAA Beaver County, PA IDA, PCR, Pennsylvania Power
Company, Beaver Valley Project,
AMBAC-Insured, 6.000% due 9/1/28 6,367,188
2,000,000 AAA Bradford, PA Area School District,
FGIC-Insured, 5.800% due 10/1/19 2,040,000
5,000,000 AAA Cambria County, PA IDA, PCR, Pennsylvania
Power Company, Series A, MBIA-Insured,
5.800% due 11/1/20 5,018,750
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Pennsylvania -- 1.4% (continued)
$ 100,000 D Delaware County, PA Hospital Authority Revenue
Bonds, Sacred Heart Medical Center,
9.750% due 9/1/11 $ 60,000
Pennsylvania Economic Development Financing
Authority Revenue, (Northhampton Generating
Project), Series C:
2,000,000 NR 6.875% due 1/1/11 1,985,000
12,000,000 NR 6.950% due 1/1/21 11,865,000
8,280,000 AA Pennsylvania HFA, Single-Family Mortgage
Revenue, Series 35A, 6.100% due 10/1/13 8,259,300
- --------------------------------------------------------------------------------
35,595,238
- --------------------------------------------------------------------------------
South Carolina -- 0.5%
Charleston County, SC COP, Charleston Public
Facilities Corp., MBIA-Insured:
2,500,000 AAA 5.500% due 12/1/15 2,440,625
9,250,000 AAA 5.500% due 12/1/20 8,949,375
1,400,000 AAA South Carolina State, Public Service Revenue,
Series B, FGIC-Insured, 5.875% due 1/1/23 1,412,250
- --------------------------------------------------------------------------------
12,802,250
- --------------------------------------------------------------------------------
Tennessee -- 0.2%
Chattanooga, TN Health, Educational & Housing Facility
Board, Mortgage Revenue, Red Bank Health Care,
FHA-Insured:
90,000 A 11.250% due 2/1/00 109,125
90,000 A 11.250% due 8/1/00 111,262
100,000 A 11.250% due 2/1/01 125,500
105,000 A 11.250% due 8/1/01 134,138
110,000 A 11.250% due 2/1/02 142,175
115,000 A 11.250% due 8/1/02 151,081
120,000 A 11.250% due 2/1/03 159,000
130,000 A 11.250% due 8/1/03 174,688
135,000 A 11.250% due 2/1/04 182,081
145,000 A 11.250% due 8/1/04 198,106
150,000 A 11.250% due 2/1/05 207,375
180,000 A 11.250% due 8/1/05 251,775
3,370,000 AA Metropolitan Government Nashville & Davidson
County, TN, 5.700% due 5/15/25 3,386,850
- --------------------------------------------------------------------------------
5,333,156
- --------------------------------------------------------------------------------
Texas -- 9.8%
26,565,000 Aaa* Arlington, TX ISD, 5.750% due 2/15/21 26,897,063
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Texas -- 9.8% (continued)
Austin, TX Water, Sewer & Electric Authority
Revenue Bonds:
$ 855,000 A* 14.000% due 5/15/99, (Escrowed to Maturity
with U.S. Government Securities) $ 1,153,181
48,215,000 A* 14.000% due 11/15/01 (a) 65,632,669
960,000 A* 14.000% due 11/15/01, (Escrowed to Maturity
with U.S. Government Securities) 1,285,200
10,000,000 AAA Bexar County, TX Health Facilities Development
Revenue, Incarnate Ward, FSA-Insured,
6.100% due 11/15/23 10,462,500
16,535,000 Aaa* Burleson, TX ISD, PSF Guaranty, 6.750%
due 8/1/24 18,002,481
Copperas Cove Island, TX ISD, PSF Guaranty
Refunding:
1,960,000 AAA 5.600% due 2/1/13 1,989,400
2,035,000 AAA 5.600% due 2/1/14 2,057,894
8,500,000 AAA El Paso, TX ISD, PSF Guaranty, Refunding,
6.000% due 2/15/19 8,808,125
1,215,000 AAA Fort Bend County, TX Levee Improvement District,
No. 011, MBIA-Insured, 5.875% due 3/1/13 1,239,300
1,000,000 Aa3* Harris County, TX IDR Corporation Refunding,
Cargill Inc., 7.000% due 10/1/15 1,097,500
4,000,000 AAA Houston, TX Water & Sewer System Revenue,
Series A, MBIA-Insured, 5.250% due 12/1/25 3,770,560
Leander, TX ISD, PSF Guaranty:
1,000,000 AAA 5.600% due 8/15/13 1,000,000
1,260,000 AAA 5.600% due 8/15/15 1,253,700
2,000,000 AAA 5.625% due 8/15/19 1,970,000
2,000,000 AAA 5.625% due 8/15/20 1,957,500
45,385,000 AAA Matagorda County, TX Navigational District
No. 1, PCR Refunding, Power & Light Co.,
MBIA-Insured, 6.100% due 7/1/28 (a) 46,349,431
4,250,000 A1 Milan County, TX IDR, PCR, (Alcoa Project),
5.650% due 12/1/12 4,244,688
Orleans, TX Levee District, Trust Receipts,
Series A, FSA-Insured:
5,675,000 AAA 5.950% due 11/1/07 5,859,437
7,055,000 AAA 5.950% due 11/1/10 7,107,912
8,655,000 AAA 5.950% due 11/1/14 8,828,100
Port Arthur, TX MBIA-Insured:
1,025,000 AAA 5.500% due 2/15/16 1,012,188
4,775,000 AAA 5.500% due 2/15/20 4,679,500
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Texas -- 9.8% (continued)
Sam Rayburn, TX Municipal Power Agency:
$12,560,000 BB Series A, 6.750% due 10/1/14 $ 11,665,100
7,835,000 BB Series B, 5.500% due 10/1/20 6,042,744
8,440,000 AAA Sherman, TX ISD, Series A, 5.750% due 2/15/25 8,513,850
4,000,000 AAA Tarrant County, TX Health Facilities
Development Corp., Harris Methodist Health
Systems, Series A, AMBAC-Insured, 5.125%
due 9/1/12 3,820,000
- --------------------------------------------------------------------------------
256,700,023
- --------------------------------------------------------------------------------
Utah -- 0.8%
Intermountain Power Agency, UT Power Supply
Revenue:
13,000,000 AA* Series D, 5.000% due 7/1/21 11,813,750
2,000,000 AA* Series H, (Escrowed with U.S. Government
Securities to 5/28/96 call @ 100), 6.000%
due 7/1/21 2,008,460
Salt Lake City, UT Housing Authority,
Multi-Family Revenue Refunding, HDC,
(Project A):
1,160,000 A 6.000% due 4/1/12 1,157,100
2,650,000 A 6.000% due 4/1/25 2,610,250
Utah State HFA, Single-Family Mortgage
Revenue
4,945,000 Aa* FHA-Insured, 5.700% due 7/1/26 4,703,931
- --------------------------------------------------------------------------------
22,293,491
- --------------------------------------------------------------------------------
Virginia -- 2.3%
Arlington County, VA IDA Multi-Family Housing
Revenue:
705,000 A 6.300% due 7/1/16 727,031
750,000 A 6.350% due 7/1/20 773,438
1,000,000 A 6.375% due 7/1/25 1,032,500
9,850,000 AAA Chesapeake Bay, VA Bridge and Tunnel District
Revenue Refunding, General Resolution,
MBIA-Insured, 5.750% due 7/1/25 9,923,875
1,200,000 AAA Hampton, VA Redevelopment & Housing Authority,
Senior Living Association Revenue, Series A,
GNMA-Collateralized, 6.000% due 1/20/26 1,201,500
1,125,000 Aa* Hanover County, VA IDA Public Facilities
Leasing Revenue, (Hanover County Project),
5.600% due 7/15/11 1,120,781
3,000,000 AAA Loudoun County, VA IDA Loudoun Hospital
Center, FSA-Insured, 5.800% due 6/1/26 3,018,750
1,045,000 AAA Lynchburg, VA Redevelopment & Housing
Authority Revenue, Waldon Pond, Series A,
GNMA-Collateralized, 6.200% due 7/20/27 1,051,531
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Virginia -- 2.3% (continued)
$ 2,160,000 AA Norfolk, VA Redevelopment and Housing Authority
Educational Facilities Revenue, Tidewater
Community College Campus, 5.875%
due 11/1/15 $ 2,249,100
Richmond, VA IDA Revenue, Elderly Residential
Facilities Mortgage, FHA-Insured:
735,000 AAA 6.050% due 12/1/15 740,512
1,190,000 AAA 6.150% due 6/1/25 1,204,875
Riverside, VA Regulatory Jail Authority
Facility Revenue, MBIA-Insured:
2,035,000 AAA 5.875% due 7/1/14 2,098,594
15,870,000 AAA 6.000% due 7/1/25 16,326,263
Roanoke, VA Redevelopment & Housing
Authority Revenue, Series A, Westwind III,
GNMA-Collateralized:
500,000 AAA 6.125% due 7/20/15 503,750
2,630,000 AAA 6.200% due 7/20/26 2,646,438
Virginia State Housing Development Authority,
Commonwealth Mortgage Revenue, Series D-2,
MBIA-Insured:
1,225,000 AAA 5.650% due 1/1/13 1,206,625
6,775,000 AAA 5.750% due 1/1/19 6,639,500
3,385,000 AA Virginia State Resource Authority, Sewer System
Revenue, Harrisonburg-Rockingham Region,
Series A, 6.000% due 5/1/22 3,435,775
500,000 AA Virginia State Resource Authority, Water & Sewer
System Revenue, Series A, 5.600% due 10/1/25 495,000
3,030,000 AA Virginia State Transportation Board,
Transportation Contract Revenue, (U.S.
Route 58 Corridor Development Project),
Series B, 5.500% due 5/15/18 2,976,975
- --------------------------------------------------------------------------------
59,372,813
- --------------------------------------------------------------------------------
Washington -- 3.9%
2,455,000 AAA Spokane, WA Lease Revenue, (Multi-Purpose Arena
Project), AMBAC-Insured, 5.750% due 1/1/18 2,455,000
Washington State:
12,150,000 AA Series A, 5.750% due 9/1/19 12,195,562
3,500,000 AA Series B, 5.750% due 5/1/18 3,535,000
6,800,000 AA Series 1993A, 5.750% due 10/1/17 6,876,500
15,260,000 AA Series 1995C, 5.800% due 7/1/20 15,488,900
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Washington -- 3.9% (continued)
Washington State, Public Power Supply Systems,
Revenue Refunding:
Nuclear Project No.1, Series B,
$ 6,995,000 AAA MBIA-Insured, 5.600% due 7/1/15 $ 6,925,050
24,000,000 AA 5.500% due 7/1/17 22,560,000
29,220,000 AA 5.500% due 7/1/18(a) 27,430,275
5,500,000 AA Series C, 5.375% due 7/1/15 5,142,500
- --------------------------------------------------------------------------------
102,608,787
- --------------------------------------------------------------------------------
West Virginia -- 1.5%
Marion County, WV County Commissioner, Solid Waste
Disposal Facilities Revenue:
40,000,000 NR American Power, Paper Recycling Project,
7.750% due 12/1/11 (b) 35,000,000
4,000,000 NR American Fiber Resource Project, Series B,
9.250% due 12/1/11 (b) 3,990,000
- --------------------------------------------------------------------------------
38,990,000
- --------------------------------------------------------------------------------
Wisconsin -- 0.1%
2,000,000 AA Wisconsin Housing & EDA, Home Ownership Revenue,
Series A, 6.450% due 3/1/17 2,067,500
- --------------------------------------------------------------------------------
Wyoming -- 0.3%
4,000,000 AAA Natrona County, WY Hospital Revenue, (Wyoming
Medical Center Project), AMBAC-Insured,
6.000% due 9/15/24 4,095,000
3,180,000 AA Wyoming Community Development Authority,
Housing Revenue, Series 6, 6.100%
due 12/1/25 3,183,975
- --------------------------------------------------------------------------------
7,278,975
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS AND NOTES
(Cost -- $2,276,235,074) 2,406,110,905
================================================================================
SHORT-TERM INVESTMENTS (c) -- 7.7%
Alabama -- 0.2%
2,100,000 A-1 Columbia, AL IDB PCR, (Alabama Power Company
Project), Series E, 3.350% due 10/1/22 2,100,000
4,100,000 A-1+ McIntosh, AL IDB, PCR, (Geiby Corporation
Project), 3.350% due 7/1/04 4,100,000
- --------------------------------------------------------------------------------
6,200,000
- --------------------------------------------------------------------------------
Alaska -- 0.5%
12,100,000 VMIG1* Valdez, AK Marine Terminal Revenue,
(Exxon Company Pipeline Project), Series C,
3.250% due 12/1/33 12,100,000
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Arizona -- 0.3%
Maricopa County, AZ PCR, Public Service:
$ 2,700,000 A-1+ Series A, 3.350% due 5/1/24 $ 2,700,000
2,000,000 A-1 Series D, 3.200% due 5/1/24 2,000,000
2,800,000 A-1+ Pinal County, AZ IDA, PCR, 3.400% due 12/1/09 2,800,000
- --------------------------------------------------------------------------------
7,500,000
- --------------------------------------------------------------------------------
Arkansas -- 0.2%
5,300,000 P-1* Pine Bluff, AR IDR, (Camden Wire Project),
3.450% due 8/1/05 5,300,000
- --------------------------------------------------------------------------------
District of Columbia -- 0.0%
1,000,000 VMIG1* District of Columbia Revenue Bonds, American
Association for the Advancement of Science,
3.450% due 10/1/22 1,000,000
- --------------------------------------------------------------------------------
Florida -- 0.1%
2,700,000 A-1 Pinellas County, FL Health Facilities
Authority Revenue, Pooled Hospital Loan
Program, 3.450% due 12/1/15 2,700,000
- --------------------------------------------------------------------------------
Georgia -- 0.1%
Burke County, GA Development Authority PCR,
Georgia Power Company:
1,600,000 VMIG1* 3.400% due 4/1/25 1,600,000
1,100,000 VMIG1* 3.400% due 7/1/24 1,100,000
600,000 VMIG1* Georgia State Hospital Finance Authority
Revenue, GA Pooled Hospital Loan Program,
3.400% due 3/1/01 600,000
- --------------------------------------------------------------------------------
3,300,000
- --------------------------------------------------------------------------------
Illinois -- 0.2%
4,100,000 A-1+ Joliet, IL Regional Port District, (Exxon
Project), 3.250% due 10/1/24 4,100,000
1,600,000 VMIG1* Southwestern IL Development Authority, Solid
Waste Disposal Revenue, (Shell Oil Company
Wood River Project), 3.550% due 4/1/22 1,600,000
- --------------------------------------------------------------------------------
5,700,000
- --------------------------------------------------------------------------------
Indiana -- 0.4%
Jasper County, IN PCR, Northern IN Public Service:
3,000,000 VMIG1* Series A, 3.350% due 8/1/10 3,000,000
5,725,000 VMIG1* Series B, 3.350% due 6/1/13 5,725,000
500,000 A-1 Rockport, IN PCR (AEP Generating Company
Project), Series B, 3.350% due 7/1/25 500,000
- --------------------------------------------------------------------------------
9,225,000
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Louisiana -- 0.2%
$ 3,500,000 VMIG1* Louisiana State Offshore Terminal Authority,
Deepwater Port Revenue, 1st Stage, 3.350%
due 9/1/08 $ 3,500,000
2,000,000 VMIG1* Louisiana State Recovery, District Sales Tax
Revenue, 3.500% due 7/1/97 2,000,000
- --------------------------------------------------------------------------------
5,500,000
- --------------------------------------------------------------------------------
Michigan -- 0.5%
- --------------------------------------------------------------------------------
1,400,000 A-1 Michigan State, Strategic Funding, Limited Obligation
Revenue, (Dow Chemical Company Project),
3.350% due 2/1/09 1,400,000
12,100,000 VMIG1* University of Michigan Revenue, Series A,
3.350% due 12/1/19 12,100,000
- --------------------------------------------------------------------------------
13,500,000
- --------------------------------------------------------------------------------
Mississippi -- 0.5%
Jackson County, MS PCR (Chevron USA Inc. Project):
6,000,000 P-1* 3.350% due 12/1/16 6,000,000
4,600,000 P-1* 3.350% due 6/1/23 4,600,000
1,000,000 VMIG1* Mississippi Business Financing Corporation,
Mississippi Solid Waste Disposal Revenue,
(Mississippi Power Company Project),
3.450% due 7/1/25 1,000,000
1,100,000 P-1* Perry County, MS PCR, (Leaf River Forest
Project), 3.400% due 3/1/02 1,100,000
- --------------------------------------------------------------------------------
12,700,000
- --------------------------------------------------------------------------------
Montana -- 0.1%
1,300,000 Aa1* Butte Silver Bow, MT PCR (Poulenc Inc.
Project), 3.200% due 3/1/13 1,300,000
- --------------------------------------------------------------------------------
Nevada -- 0.1%
3,000,000 VMIG1* Clark County, NV IDR, (Cogeneration Association
Project), 3.450% due 11/1/20 3,000,000
- --------------------------------------------------------------------------------
New York -- 0.7%
New York, NY GO:
3,100,000 VMIG1* Subseries A-4, 3.300% due 8/1/22 3,100,000
2,900,000 VMIG1* Subseries A-4, 3.300% due 8/1/23 2,900,000
2,500,000 VMIG1* Subseries A-10, 3.450% due 8/1/16 2,500,000
1,700,000 VMIG1* Subseries B-5, 3.300% due 8/15/22 1,700,000
2,400,000 VMIG1* Subseries B-6, 3.300% due 8/15/05 2,400,000
4,400,000 VMIG1* Subseries E-5, 3.500% due 8/1/17 4,400,000
100,000 VMIG1* New York State Energy Research & Development
Authority, PCR New York State Electric & Gas
Company, 3.200% due 6/1/29 100,000
- --------------------------------------------------------------------------------
17,100,000
- --------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Ohio -- 0.2%
$ 4,200,000 VMIG1* Ohio State Air Quality Development Authority
Revenue, Cincinnati Gas & Electric Company,
Series A, 3.450% due 9/1/30 $ 4,200,000
- --------------------------------------------------------------------------------
South Carolina -- 0.3%
2,400,000 VMIG1* Orangeburg County, SC Solid Waste Disposal
Facilities Revenue, SC Electric and Gas,
3.550% due 10/1/24 2,400,000
7,000,000 VMIG1* South Carolina EDA Economic Development Revenue,
St. Francis Hospital, 3.400% due 7/1/22 7,000,000
- --------------------------------------------------------------------------------
9,400,000
- --------------------------------------------------------------------------------
Texas -- 1.5%
Brazos River, TX HBR Naval District, (Dow Chemical
Company Project):
5,000,000 P-1* 3.600% due 5/1/23 5,000,000
4,000,000 P-1* Series A, 3.600% due 12/1/18 4,000,000
5,790,000 VMIG1* Guadalupe-Blanco, TX River Authority PCR,
(Central Power & Light Company Project),
3.350% due 11/1/15 5,790,000
9,700,000 VMIG1* Gulf Coast, TX IDA Marine Terminal Revenue,
(Amoco Oil Company Project), 3.550%
due 4/1/28 9,700,000
Gulf Coast, TX Waste Disposal Authority, PCR,
(Amoco Oil Company Project):
8,100,000 VMIG1* 3.250% due 10/1/17 8,100,000
100,000 VMIG1* 3.550% due 5/1/23 100,000
1,900,000 VMIG1* 3.550% due 6/1/24 1,900,000
5,800,000 VMIG1* Sabine River, TX PCR Texas Utilities Electric
Company, Series A, 3.450% due 4/1/30 5,800,000
- --------------------------------------------------------------------------------
40,390,000
- --------------------------------------------------------------------------------
Virginia -- 0.2%
Peninsula Port Authority, VA Coal Terminal Revenue:
3,100,000 P-1* Shell Oil Company, Series A, 3.400%
due 12/1/05 3,100,000
2,000,000 P-1* Dominion Terminal Project, Series C,
3.450% due 7/1/16 2,000,000
- --------------------------------------------------------------------------------
5,100,000
- --------------------------------------------------------------------------------
Washington -- 0.5%
Washington State Health Care Facilities Authority
Revenue, Sisters of Providence:
3,100,000 VMIG1* Series B, 3.350% due 10/1/05 3,100,000
1,800,000 VMIG1* Series C, 3.350% due 10/1/05 1,800,000
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 1996
- --------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
================================================================================
<S> <C> <C> <C>
Washington -- 0.5% (continued)
$ 3,500,000 VMIG1* Series D, 3.350% due 10/1/05 $ 3,500,000
4,400,000 VMIG1* Series E, 3.350% due 10/1/05 4,400,000
- --------------------------------------------------------------------------------
12,800,000
- --------------------------------------------------------------------------------
Wyoming -- 0.9%
6,100,000 VMIG1* Green River, WY Revenue, Rhone Poulenc
Wyoming, 3.500% due 10/1/18 6,100,000
9,200,000 A-1+ Kemmerer County, WY PCR, (Exxon Project),
3.250% due 11/1/14 9,200,000
3,250,000 A-1+ Sublette County, WY PCR (Exxon Project),
Series A, 3.350% due 7/1/17 3,250,000
5,300,000 P-1* Unita County, WY PCR (Chevron USA Inc.
Project), 3.350% due 8/15/20 5,300,000
- --------------------------------------------------------------------------------
23,850,000
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(Cost -- $201,865,000) 201,865,000
================================================================================
TOTAL INVESTMENTS -- 100%
(Cost -- $2,478,100,074*) $2,607,975,905
================================================================================
</TABLE>
(a) Security segregated by Custodian for open futures contract commitments.
(b) Income from these issues is considered a preference item for purposes of
calculating the alternative minimum tax.
(c) Variable rate obligation payable at par on demand at any time on no more
than seven days notice.
* Aggregate cost for Federal income tax purposes is substantially the same.
See pages 30 and 31 for definition of ratings and certain security descriptions.
See Notes to Financial Statements.
29
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Bond Ratings
- --------------------------------------------------------------------------------
All ratings are by Standard & Poor's Corporation ("Standard & Poor's"), except
those identified by an asterisk (*) are rated by Moody's Investors Services
("Moody's"). The definitions of the applicable rating symbols are set forth
below:
Standard & Poor's-- Rating from "AA" to "BBB" may be modified by the addition of
a plus (+) or minus (-) sign to show relative standings within the major rating
categories.
AAA -- Bonds rated "AAA" have the highest rating assigned by Standard
& Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and
repay principal and differs from the highest rated issue only in a
small degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity
to pay interest and repay principal for bonds in this category than in
higher rated categories.
CCC -- Bonds rated "CCC" have a currently identifiable vulnerability to
default, and are dependent upon favorable business, financial, and
economic conditions to meet timely payment of interest and repayment
of principal. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal. The "CCC" rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied "B"
or "B-" rating.
D -- Bonds rated "D" are in default, and payment of interest and/or
repayment of principal is in arrears.
Moody's-- Numerical modifiers 1, 2 and 3 may be applied to each
generic rating from "Aa" to "Baa," where 1 is the highest and 3 the
lowest ranking within its generic category.
Aaa -- Bonds that are rated "Aaa" are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa -- Bonds that are rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in "Aaa" securities.
A -- Bonds that are rated "A" possess many favorable investment
attributes and are to be considered as upper medium grade obligations.
Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment some time in the future.
Baa -- Bonds that are rated "Baa" are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
30
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Bond Ratings
- --------------------------------------------------------------------------------
Caa -- Bonds that are rated "Caa" are of poor standing. These issues
may be in default, or present elements of danger may exist with
respect to principal interest.
NR -- Indicates that the bond is not rated by Standard & Poor's or Moody's.
- --------------------------------------------------------------------------------
Short-Term Securities Ratings
- --------------------------------------------------------------------------------
SP-1 -- Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined to
possess overwhelming safety characteristics are denoted with a plus
(+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate demand
obligation (VRDO) rating indicating that the degree of safety
regarding timely payment is either overwhelming or very strong; those
issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign.
VMIG 1 -- Moody's highest rating for issues having a demand feature -- (VRDO).
P-1 -- Moody's highest rating for commercial paper and for VRDO prior to the
advent of the VMIG 1 rating.
- --------------------------------------------------------------------------------
Security Descriptions
- --------------------------------------------------------------------------------
ABAG -- Association of Bay Area Governors
AIG -- American International Guaranty
AMBAC -- American Municipal Bond Assurance Corporation
BAN -- Bond Anticipation Notes
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance Company
CHFCLI -- California Health Facility
Construction Loan Insurance
COP -- Certificate of Participation
EDA -- Economic Development Authority
ETM -- Escrowed To Maturity
FAIRS -- Floating Adjustable Interest Rate Securities
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FRTC -- Floating Rate Trust Certificates
FSA -- Federal Savings Association
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage
Association
GO -- General Obligation
HDC -- Housing Development Corporation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
ISD -- Independent School District
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCR -- Pollution Control Revenue
PSF -- Permanent School Fund
RAN -- Revenue Anticipation Notes
RIBS -- Residual Interest Bonds
RITES -- Residual Interest Tax-Exempt Securities
TAN -- Tax Anticipation Notes
TECP -- Tax Exempt Commercial Paper
TOB -- Tender Option Bonds
TRAN -- Tax and Revenue Anticipation
Notes
SYCC -- Structured Yield Curve Certificate
VA -- Veterans Administration
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
31
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (Cost-- $2,478,100,074) $2,607,975,905
Cash 66,476
Receivable for securities sold 21,921,069
Receivable for Fund shares sold 12,373,553
Interest receivable 36,649,401
- --------------------------------------------------------------------------------
Total Assets 2,678,986,404
- --------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 7,310,970
Payable for Fund shares redeemed 995,949
Investment advisory fees payable 663,460
Distribution fees payable 619,054
Payable to broker 564,531
Administration fees payable 371,564
Accrued expenses 348,750
- --------------------------------------------------------------------------------
Total Liabilities 10,874,278
- --------------------------------------------------------------------------------
Total Net Assets $2,668,112,126
================================================================================
NET ASSETS:
Par value of capital shares $ 1,646,684
Capital paid in excess of par value 2,513,145,642
Accumulated net realized gain on security transactions and
futures 4,259,719
Net unrealized appreciation of investments and futures 149,060,081
================================================================================
Total Net Assets $2,668,112,126
================================================================================
Shares Outstanding:
Class A 116,792,173
- --------------------------------------------------------------------------------
Class B 45,053,250
- --------------------------------------------------------------------------------
Class C 2,062,794
- --------------------------------------------------------------------------------
Class Y 760,136
- --------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $16.20
- --------------------------------------------------------------------------------
Class B* $16.20
- --------------------------------------------------------------------------------
Class C** $16.20
- --------------------------------------------------------------------------------
Class Y (and redemption price) $16.20
- --------------------------------------------------------------------------------
Class A Maximum Public Offering Price Per Share
(net asset value plus 4.17% of net asset value per share) $16.88
================================================================================
</TABLE>
* Redemption price is NAV of Class B shares reduced by a 4.50% CDSC if shares
are redeemed less than one year from initial purchase (See Note 3).
** Redemption price is NAV of Class C shares reduced by a 1.00% CDSC if shares
are redeemed within the first year of purchase.
See Notes to Financial Statements.
32
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Statement of Operations For the Year Ended February 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Interest $156,248,779
- --------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 3) 7,749,486
Distribution fees (Note 3) 6,882,959
Administration fees (Note 3) 4,344,556
Shareholder and system servicing fees 705,635
Custody 162,714
Registration fees 156,243
Audit and legal 118,872
Shareholder communications 118,430
Directors' fees 59,285
Other 223,857
- --------------------------------------------------------------------------------
Total Expenses 20,522,037
- --------------------------------------------------------------------------------
Net Investment Income 135,726,742
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FUTURES (NOTES 4 and 7):
Realized Gain (Loss) From:
Security transactions (excluding short-term securities) 78,444,381
Futures contracts (34,133,844)
- --------------------------------------------------------------------------------
Net Realized Gain 44,310,537
- --------------------------------------------------------------------------------
Net Change in Unrealized Appreciation of Investments
and Futures:
Beginning of year 68,091,433
End of year 149,060,081
- --------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 80,968,648
- --------------------------------------------------------------------------------
Net Gain on Investments 125,279,185
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $261,005,927
================================================================================
</TABLE>
See Notes to Financial Statements.
33
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets For the Years Ended
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
February 29, 1996 February 28, 1995
================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 135,726,742 $ 133,163,756
Net realized gain (loss) 44,310,537 (13,267,083)
Increase (decrease) in net
unrealized appreciation 80,968,648 (33,873,453)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 261,005,927 86,023,220
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM (NOTE 2):
Net investment income (135,414,152) (132,030,388)
Overdistribution of net investment income -- (312,590)
Net realized gains (12,936,891) (41,104,797)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (148,351,043) (173,447,775)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sale of shares 540,718,904 493,112,198
Net asset value of shares issued for
reinvestment of dividends 91,398,350 109,529,136
Cost of shares reacquired (368,696,313) (419,997,436)
- --------------------------------------------------------------------------------
Increase in Net Assets From Fund
Share Transactions 263,420,941 182,643,898
- --------------------------------------------------------------------------------
Increase in Net Assets 376,075,825 95,219,343
NET ASSETS:
Beginning of year 2,292,036,301 2,196,816,958
- --------------------------------------------------------------------------------
End of year* $2,668,112,126 $2,292,036,301
================================================================================
* Includes overdistributed net investment income of: -- $(312,590)
================================================================================
</TABLE>
See Notes to Financial Statements.
34
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Managed Municipals Fund Inc. (the "Fund"), a Maryland
corporation, is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company.
The significant accounting policies consistently followed by the Fund are:
(a) securities transactions are accounted for on trade date; (b) securities are
valued at the mean between bid and ask prices provided by an independent pricing
service that are based on transactions in municipal obligations, quotations from
municipal bond dealers, market transactions in comparable securities and various
relationships between securities; (c) short-term investments and securities
maturing within 60 days or less are valued at cost plus accreted discount, or
minus amortized premium, which approximates market value; (d) gains or losses on
the sale of securities are calculated by using the specific identification
method; (e) interest income, adjusted for amortization of premiums and accretion
of original issue discounts, is recorded on the accrual basis; market discount
is recognized upon the disposition of the security; (f) dividends and
distributions to shareholders are recorded on the ex-dividend date; (g) direct
expenses are charged to the Fund and each class; investment advisory fees and
general Fund expenses are allocated on the basis of relative net assets; (h) the
Fund intends to comply with the applicable provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), pertaining to regulated investment
companies and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes; and (i) estimates and
assumptions are required to be made regarding assets, liabilities and changes in
net assets resulting from operations when financial statements are prepared.
Changes in the economic environment, financial markets and other parameters used
in determining these estimates could cause actual results to differ from these
amounts.
2. EXEMPT-INTEREST DIVIDENDS AND OTHER DISTRIBUTIONS
The Fund intends to satisfy requirements that allows interest from
municipal securities, which is exempt from regular Federal income tax and from
certain states' income taxes, to retain its exempt-interest status when
distributed to the shareholders of the Fund.
Capital gain distributions, if any, are taxable to shareholders, and are
declared and paid at least annually. Additional taxable distributions may be
made if necessary to avoid a Federal excise tax.
35
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
3. INVESTMENT ADVISORY AGREEMENT, ADMINISTRATION
AGREEMENT AND OTHER TRANSACTIONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment adviser to the Fund. The Fund
pays SBMFM an advisory fee calculated at an annual rate of 0.35% of the average
daily net assets up to $500 million; 0.32% of the average daily net assets of
the next $1.0 billion and 0.29% in excess of $1.5 billion. This fee is
calculated daily and paid monthly.
SBMFM also acts as the Fund's administrator for which the Fund pays a fee
calculated at an annual rate of 0.20% of the average daily net assets up to $500
million; 0.18% of the average daily net assets of the next $1.0 billion and
0.16% of the average daily net assets in excess of $1.5 billion. This fee is
calculated daily and paid monthly.
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts as distributor of
Fund shares. For the year ended February 29, 1996, SB received approximately
$3,302,000 on sales of the Fund's Class A shares.
There is a contingent deferred sales charge ("CDSC") of 4.50% on Class B
shares, which applies if redemption occurs less than one year from initial
purchase. This CDSC declines by 0.50% the first year after purchase and by 1.00%
per year thereafter until no CDSC is incurred. Class C shares have a 1.00% CDSC,
which applies if redemption occurs within the first year from the date. In
addition, Class A shares are subject to a CDSC of 1.00% on redemptions made
within the first year of purchase, only on those Class A shares purchased which
equal or exceed $500,000 in the aggregate, an initial sales charge is not
imposed on these shares. For the year ended February 29, 1996, CDSCs paid to SB
were:
<TABLE>
<CAPTION>
Class A Class B Class C
================================================================================
<S> <C> <C> <C>
CDSCs $62,000 $1,907,000 $6,000
================================================================================
</TABLE>
Pursuant to a Distribution Plan, the Fund pays a service fee with respect
to its Class A, B and C shares, calculated at the annual rate of 0.15% of the
average daily net assets for each respective class. In addition, the Fund pays a
distribution fee with respect to its Class B and C shares calculated at the
annual rate of 0.50% and 0.55%, of the average daily net assets of each class,
respectively. For the year ended February 29, 1996, total Distribution Plan fees
incurred were:
<TABLE>
<CAPTION>
Class A Class B Class C
================================================================================
<S> <C> <C> <C>
DISTRIBUTION PLAN FEES $2,752,984 $4,012,541 $117,434
================================================================================
</TABLE>
36
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
All officers and one Director of the Fund are employees of SB.
4. INVESTMENTS
During the year ended February 29, 1996, the aggregate cost of purchases
and proceeds from sales (including maturities, but excluding short-term
securities) of investments were as follows:
<TABLE>
<CAPTION>
================================================================================
<S> <C>
Purchases $1,829,271,883
- --------------------------------------------------------------------------------
Sales 1,919,560,935
================================================================================
</TABLE>
At February 29, 1996, the gross unrealized appreciation and depreciation of
investments for Federal income tax purposes was approximately:
<TABLE>
<CAPTION>
================================================================================
<S> <C>
Gross unrealized appreciation $138,539,455
Gross unrealized depreciation (8,663,624)
- --------------------------------------------------------------------------------
Net unrealized appreciation $129,875,831
================================================================================
</TABLE>
5. CAPITAL SHARES
At February 29, 1996, there were one billion shares of $0.01 par value
capital stock authorized. The Fund has established multiple classes of shares.
Each share of a class represents an identical interest in the Fund and has the
same rights, except that each class bears certain expenses specifically related
to the distribution of its shares. At February 29, 1996, total paid-in capital
amounted to the following for each class:
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
================================================================================
<S> <C> <C> <C> <C>
Total Paid-in Capital $1,743,224,536 $727,179,209 $32,520,579 $11,868,002
================================================================================
</TABLE>
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
February 29, 1996 February 28, 1995
------------------------ ---------------------------
Shares Amount Shares Amount
================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 15,591,125 $248,495,845 17,117,100 $259,346,666
Shares issued on
reinvestment 4,274,567 68,011,465 5,781,236 86,678,010
Shares redeemed (17,620,753) (280,733,228) (22,890,002) (345,915,622)
- --------------------------------------------------------------------------------
Net Increase 2,244,939 $ 35,774,082 8,334 $ 109,054
================================================================================
</TABLE>
37
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
February 29, 1996* February 28, 1995+
----------------------- ---------------------------
Shares Amount Shares Amount
================================================================================
<S> <C> <C> <C> <C>
Class B
Shares sold 14,787,518 $236,215,756 14,985,398 $228,523,461
Shares issued on
reinvestment 1,405,224 22,387,664 1,526,136 22,776,341
Shares redeemed (4,400,671) (70,245,187) (4,930,470) (73,869,017)
- --------------------------------------------------------------------------------
Net Increase 11,792,071 $188,358,233 11,581,064 $177,430,785
================================================================================
Class C
Shares sold 1,820,006 $ 29,125,231 357,851 $ 5,242,071
Shares issued on
reinvestment 45,540 729,020 5,107 74,785
Shares redeemed (151,454) (2,433,627) (14,256) (212,797)
- --------------------------------------------------------------------------------
Net Increase 1,714,092 $ 27,420,624 348,702 $ 5,104,059
================================================================================
Class Y
Shares sold 1,705,945 $ 26,882,072 -- --
Shares issued on
reinvestment 16,831 270,201 -- --
Shares redeemed (962,640) (15,284,271) -- --
- --------------------------------------------------------------------------------
Net Increase 760,136 $ 11,868,002 -- --
================================================================================
</TABLE>
* For Class Y shares, transactions are for the period from April 4, 1995
(inception date) to February 29, 1996.
+ For Class C shares transactions are for the period from November 9, 1994
(inception date) to February 28, 1995.
6. SECURITY VALUED BY THE FUND'S BOARD OF DIRECTORS
One of the Fund's investments is valued at the direction of the Fund's
Board of Directors; this security is currently in default, and has been valued
in good faith, taking into consideration the appropriate economic, financial and
other pertinent available information pertaining to the defaulted security. The
table below shows the security valued by the Fund's Board of Directors:
<TABLE>
<CAPTION>
Value as of
Acquisition Par 2/29/96 Percentage
Security Date Amount Value of Net Assets Cost
===============================================================================
Delaware County,
PA Hospital Authority
Revenue Bonds, Sacred
Heart Medical Center,
<S> <C> <C> <C> <C> <C>
9.750% due 9/1/11 8/25/92 $100,000 $60,000 0.002% $99,427
===============================================================================
</TABLE>
38
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
7. FUTURES CONTRACTS
Initial margin deposits are made upon entering into futures contracts and
are recognized as assets. The initial margin is segregated by the custodian as
noted in the schedule of investments. During the period the futures contract is
open, changes in the value of the contract are recognized as unrealized gains or
losses by "marking to market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin payments are
made or received and recognized as assets due from or liabilities due to broker,
depending upon whether unrealized gains or losses are incurred. When the
contract is closed, the Fund records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and
the Fund's basis in the contract.
At February 29, 1996, the Fund had the following open futures contracts:
<TABLE>
<CAPTION>
Expiration # of Basis Market Unrealized
Futures contracts sold Month/Year Contracts Value Value Gain
============================================================================================
<S> <C> <C> <C> <C> <C>
U.S. Government
Long Bond Index 3/96 3,350 $402,725,000 $384,726,563 $17,998,437
Municipal Bond Index 3/96 800 95,610,813 94,425,000 1,185,813
- --------------------------------------------------------------------------------------------
$19,184,250
============================================================================================
</TABLE>
39
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Class A Shares 1996 1995 1994(1) 1993(2) 1992
====================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $15.47 $16.13 $16.71 $15.62 $14.98
- --------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.91 0.95 0.90 1.00 1.05
Net realized and unrealized gain (loss) 0.80 (0.37) 0.30 1.64 0.66
- --------------------------------------------------------------------------------------------------------------------
Total Income From Operations 1.71 0.58 1.20 2.64 1.71
- --------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.90) (0.95) (0.87) (1.00) (1.05)
Overdistribution of net investment income . -- (0.00)* (0.01) -- --
Net realized gains (0.08) (0.29) (0.90) (0.52) --
Capital -- -- -- (0.03) (0.02)
- --------------------------------------------------------------------------------------------------------------------
Total Distributions (0.98) (1.24) (1.78) (1.55) (1.07)
- --------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $16.20 $15.47 $16.13 $16.71 $15.62
Total Return 11.34% 4.11% 7.41% 17.92% 11.79%
Net Assets, End of Year (millions) $1,892 $1,772 $1,847 $1,795 $1,598
Ratios to Average Net Assets:
Expenses 0.70% 0.71% 0.72% 0.64% 0.59%
Net investment income 5.47 6.25 5.43 6.30 6.83
- --------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 80% 100% 131% 206% 173%
====================================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method, which more appropriately presents the per share data for the period
since the use of the undistributed net investment income method does not
accord with results of operations.
(2) On November 6, 1992, the Fund commenced selling Class B shares. Any shares
in existence prior to November 6, 1992 were designated as Class A shares.
* Amount represents less than $0.01.
40
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Class B Shares 1996 1995 1994(1) 1993(2)
====================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $15.47 $16.13 $16.71 $15.81
- ------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.82 0.86 0.81 0.32
Net realized and unrealized gain (loss) 0.81 (0.37) 0.31 1.42
- ------------------------------------------------------------------------------------
Total Income From Operations 1.63 0.49 1.12 1.74
- ------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.82) (0.86) (0.79) (0.31)
Overdistribution of net investment income -- (0.00)* (0.01) --
Net realized gains (0.08) (0.29) (0.90) (0.52)
Capital -- -- -- (0.01)
- ------------------------------------------------------------------------------------
Total Distributions (0.90) (1.15) (1.70) (0.84)
- ------------------------------------------------------------------------------------
Net Asset Value, End of Year $16.20 $15.47 $16.13 $16.71
- ------------------------------------------------------------------------------------
Total Return 10.78% 3.54% 6.86% 11.26%++
- ------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $729,953 $514,675 $349,633 $61,355
- ------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.22% 1.23% 1.25% 1.24%+
Net investment income 4.94 5.73 4.90 5.70+
- ------------------------------------------------------------------------------------
Portfolio Turnover Rate 80% 100% 131% 206%
====================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method, which more appropriately presents the per share data for the period
since the use of the undistributed net investment income method does not
accord with results of operations.
(2) For the period from November 6, 1992 (inception date) to February 28, 1993.
* Amount represents less than $0.01.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
41
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Class C Shares 1996 1995(1)
=====================================================================================
<S> <C> <C>
Net Asset Value, Beginning of Year $15.47 $14.30
- -------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.82 0.27
Net realized and unrealized gain 0.81 1.46*
- -------------------------------------------------------------------------------------
Total Income From Operations 1.63 1.73
- -------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.82) (0.27)
Overdistribution of net investment income -- (0.00)**
Net realized gains (0.08) (0.29)
Capital -- --
- -------------------------------------------------------------------------------------
Total Distributions (0.90) (0.56)
- -------------------------------------------------------------------------------------
Net Asset Value, End of Year $16.20 $15.47
Total Return 10.76% 12.36%++
Net Assets, End of Year (000s) $33,411 $5,395
Ratios to Average Net Assets:
Expenses 1.27% 1.29%+
Net investment income 4.86 5.67+
- -------------------------------------------------------------------------------------
Portfolio Turnover Rate 80% 100%
=====================================================================================
</TABLE>
(1) For the period from November 9, 1994 (inception date) to February 28, 1995.
* The amount shown may not accord with the change in aggregate gains and
losses of portfolio securities due to the timing of sales and redemptions
of Fund shares.
** Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
42
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Class Y Shares 1996(1)
==================================================================================
<S> <C>
Net Asset Value, Beginning of Year $15.63
- ----------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.85
Net realized and unrealized gain 0.65
- ----------------------------------------------------------------------------------
Total Income From Operations 1.50
- ----------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.85)
Net realized gains (0.08)
- ----------------------------------------------------------------------------------
Total Distributions (0.93)
- ----------------------------------------------------------------------------------
Net Asset Value, End of Year $16.20
- ----------------------------------------------------------------------------------
Total Return 9.84%++
- ----------------------------------------------------------------------------------
Net Assets, End of Year (000s) $12,314
- ----------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.57%+
Net investment income 5.62+
- ----------------------------------------------------------------------------------
Portfolio Turnover Rate 80%
==================================================================================
</TABLE>
(1) For the period from April 4, 1995 (inception date) to February 29, 1996.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
43
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
The amount of long-term capital gains paid by the Fund to its shareholders
for the fiscal year ended February 29, 1996, was $12,936,891.
For the year ended February 29, 1996, 99.77% of the dividends paid by the
Fund from net investment income were tax-exempt for regular Federal income tax
purposes.
44
<PAGE>
Smith Barney
Managed Municipals Fund Inc.
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of
Smith Barney Managed Municipals Fund Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the Smith Barney Managed Municipals Fund Inc. as
of February 29, 1996, and the related statements of operations, changes in net
assets, and financial highlights for the year 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 audit. The statement of changes
in net assets for the year ended February 28, 1995 and the financial highlights
for each of the years in the four-year period then ended were audited by other
auditors whose report thereon dated April 10, 1995, expressed an unqualified
opinion on that statement of changes in net assets and those financial
highlights.
We conducted our audit 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 February 29, 1996, by
correspondence with the custodian. As to securities purchased and sold but not
received or delivered, we performed other appropriate auditing procedures. 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Smith Barney Managed
Municipals Fund Inc. as of February 29, 1996, and the results of its operations,
changes in its net assets and financial highlights for the year then ended, in
conformity with generally accepted accounting principles.
/S/ KPMG PEAT MARWICK LLP
New York, New York
April 25, 1996
45
<PAGE>
Smith Barney SMITH BARNEY
Managed --------------------
Municipals A Member of Travelers Group {LOGO]
Fund Inc.
Directors
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt N. Dorsett
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon
Cornelius C. Rose
Officers
Heath B. McLendon
Chairman and Investment Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President
and Treasurer
Joseph P. Deane
Vice President and
Investment Officer
David Fare
Investment Officer
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
Investment Adviser
and Administrator
Smith Barney Mutual Funds
Management Inc.
Distributor
Smith Barney Inc.
Custodian
PNC Bank, N.A.
Shareholder
Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of the shareholders of
Smith Barney Managed Municipals Fund Inc. It is not authorized for distribution
to prospective investors unless accompanied or preceded by a current Prospectus
for the Fund, which contains information concerning the Fund's investment
policies and expenses as well as other pertinent information.
Smith Barney Managed
Municipals Fund Inc.
388 Greenwich Street
New York, New York 10013
FD 2207 4/96
