<PAGE>
[PHOTOGRAPH]
Smith Barney
[PHOTOGRAPH] Managed
Municipals Fund
------------------
SEMI-ANNUAL REPORT
------------------
August 31, 1997
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day(sm).
<PAGE>
Smith Barney Managed
Municipals Fund Inc.
================================================================================
The Smith Barney Managed Municipals Fund Inc. seeks to maximize current interest
income exempt from Federal income taxes to the extent consistent with prudent
investment management and preservation of capital. The Fund seeks to achieve
this objective by investing in intermediate- and long-term municipal securities
issued by state and municipal governments and by public authorities.
Smith Barney Managed Municipals Fund Inc.'s
Average Annual Total Returns Ended
August 31, 1997
<TABLE>
<CAPTION>
Without Sales Charges*
-------------------------------
Class A Class B Class C
================================================================================
<S> <C> <C> <C>
Six Months+ 5.26% 4.99% 4.97%
- --------------------------------------------------------------------------------
One-Year 10.77 10.15 10.10
- --------------------------------------------------------------------------------
Five-Year 8.80 N/A N/A
- --------------------------------------------------------------------------------
Ten-Year 9.14 N/A N/A
- --------------------------------------------------------------------------------
Since Inception++ 11.05 8.59 11.47
================================================================================
</TABLE>
<TABLE>
<CAPTION>
Without Sales Charges**
-------------------------------
Class A Class B Class C
================================================================================
<S> <C> <C> <C>
Six Months+ 1.05% 0.49% 3.97%
- --------------------------------------------------------------------------------
One-Year 6.35 5.65 9.10
- --------------------------------------------------------------------------------
Five-Year 7.91 N/A N/A
- --------------------------------------------------------------------------------
Ten-Year 8.69 N/A N/A
- --------------------------------------------------------------------------------
Since Inception++ 10.77 8.44 11.47
================================================================================
</TABLE>
* 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 charges with respect to Class A shares or the applicable
contingent deferred sales charges ("CDSC") with respect to Class B and C
shares.
** 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%; Class B shares reflect the
deduction of a 4.50% CDSC which applies if shares are redeemed within one
year from initial purchase. This CDSC declines by 0.50% the first year of
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.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
+ Total return is not annualized as it may not be representative of the total
return for the year.
++ Inception dates for Class A, B and C shares are March 4, 1981, November 6,
1992 and November 9, 1994, respectively.
================================================================================
FUND HIGHLIGHT
================================================================================
Joe Deane, your Fund's Portfolio Manager, was recently cited in a Fortune
Magazine article as a "manager with a proven long-term record in good times and
bad."
================================================================================
NASDAQ SYMBOL
================================================================================
Class A SHMMX
Class B SMMBX
Class C SMMCX
<TABLE>
<CAPTION>
================================================================================
WHAT'S INSIDE
================================================================================
<S> <C>
Shareholder Letter ........................................................ 1
An Interview with Portfolio Manager
Joe Deane ................................................................. 3
Historical Performance .................................................... 5
Smith Barney Managed Municipals Fund Inc.
at a Glance ............................................................... 7
Schedule of Investments ................................................... 8
Statement of Assets and Liabilities ....................................... 27
Statement of Operations ................................................... 28
Statements of Changes in Net Assets ....................................... 29
Notes to Financial Statements ............................................. 30
Financial Highlights ...................................................... 33
</TABLE>
<PAGE>
====================
Shareholder Letter
====================
[PHOTOGRAPH] [PHOTOGRAPH]
HEATH B. JOSEPH P.
MCLENDON DEANE
Chairman Vice President and
Investment Officer
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney Managed
Municipals Fund Inc. ("Fund") for the period ended August 31, 1997. In this
report, we summarize the period's prevailing economic and market conditions and
outline our portfolio strategy. A detailed summary of the Fund's performance can
be found in the appropriate sections that follow.
Performance Update
For the six months ended August 31, 1997, the Fund had a total return of 5.26%,
4.99% and 4.97% for its Class A, B and C shares, respectively. In comparison,
the Fund's Lipper Analytical Services, Inc. peer group average posted a total
return of 4.02% for the same period. (Lipper is an independent fund-tracking
organization.) Over the six-month period covered by this report, the Fund
distributed income dividends totaling $0.45 for Class A shares; based on its net
asset value (NAV) of $15.97 as of August 31, 1997 and the current monthly income
dividend of $0.074 for Class A shares, this equates to an annualized
distribution rate of 5.56%. For an individual in the federal income tax bracket
of 36%, the tax free yield of 5.56% is equivalent to a taxable yield of 8.69%.
Municipal Bond Market Update
The past year in the municipal bond market can be described in three phases. The
first phase was a meaningful rally that began late summer 1996 and culminated in
Federal Reserve Board ("Fed") Chairman Alan Greenspan's "irrational exuberance"
speech in early December. The second phase was a notable increase in rates
because of subsequent fears of a major Fed rate action. The final phase,
culminating in today's market, is one in which rates are back to the levels
present before the Fed chairman's speech. We've believed all along that today's
municipal bond prices are quite appropriate, given the low inflation that
continues to be evident.
Investment Strategy
The Fund seeks to maximize current interest income exempt from Federal income
taxes to the extent consistent with prudent investment management and
preservation of capital. The Fund seeks to achieve this objective by investing
in intermediate- and long-term municipal securities issued by state and
municipal governments and by public authorities. The Fund continues its
investment strategy of selecting coupons and maturities that should benefit the
most from a further decline in long-term interest rates. The Fund's average
weighted maturity is approximately 23 years. In addition, in every market
downturn we have sought out bonds with coupons that would benefit from further
drops in interest rates.
As of this report, the 30-year U.S. Treasury bond yield is approximately 6.7%,
and it could decline to 6% in the near future if inflation remains at today's
low levels. Given our expectation for a continued moderate U.S. economy, we
continue to emphasize longer-term, deeper-discount bonds with very high credit
quality.
As of August 31, 1997, approximately 94.3% of the Fund's holdings were rated
investment grade (BBB/Baa and higher) by either Standard & Poor's Corporation or
Moody's Investors Service Inc., with about 69.5% of the Fund invested in
AAA-rated bonds, the highest possible rating. (Standard & Poor's and Moody's are
two major credit-reporting
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 1
<PAGE>
and bond-rating agencies.) The Fund's largest holdings are concentrated in
transportation bonds (22.3%), water and sewer bonds (16.2%), utility bonds
(12.9%) and hospital bonds (9.2%).
Municipal Bond Market Outlook
Going forward, we would expect a decline in long-term rates, probably sooner
rather than later. The inflation rate is still key for us, and until we begin to
see that deteriorate we will continue to maintain our positive outlook for
municipal bonds.
Municipal bonds have continued to be in tight supply, and there is little reason
to believe there is a major supply spike on the horizon. Municipals have
outperformed the taxable market in the past year and will likely continue to do
so in the near future. In our view, the municipal bond market at today's levels
is very competitively priced and should provide investors with attractive
after-tax yields. Furthermore, municipal bonds may have some capital
appreciation possibilities if the inflation numbers continue on today's steady
path.
In closing, thank you for investing in the Smith Barney Managed Municipals Fund.
We look forward to continuing to help you pursue your financial goals.
Sincerely, Sincerely,
/s/ Heath B. McLendon /s/ J. P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
September 23, 1997
- --------------------------------------------------------------------------------
Now More Than Ever . . .
The Compelling Case for Municipal Bonds Continues!
o Supply of municipal bonds may be tapering off while the demand from aging
Baby Boomers entering their peak earning years for tax-free income is
expected to rise.
o The recent enactment of the Taxpayer Relief Act of 1997 has made taxes and
the need for tax-exempt income more prominent in the minds of many
investors and therefore may stimulate more demand for municipal bonds in
the future.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2 1997 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
An Interview with Portfolio Manager Joe Deane
================================================================================
Joseph "Joe" P. Deane, Managing Director of Smith Barney, has more than 25 years
of Wall Street experience. Joe currently manages in excess of $5 billion of
Smith Barney assets in both open- and closed-end mutual funds, including the
Smith Barney Managed Municipals Fund. We recently talked with Joe about his
outlook for the municipal bond market in the coming months and how he manages
money.
Joe, you were named the top-rated fixed-income manager of 1996 by Morningstar,
Inc., a major fund-ranking organization. To what do you attribute this extremely
prestigious honor?
Joe: Consistency. We think we're pretty unique in the business, because we've
been able to produce consistent numbers through every type of market condition.
For example, we did well in 1992-1993 when the market was up. But we also
performed well in 1994 when the municipal bond market fell.
Joe, what are the dangers of municipal bond investors focusing on yield at the
expense of total return?
Joe: We believe you can't just manage for yield alone, and that's why we
concentrate so much on total return. By making adjustments to your fund's
average maturity you can try to lessen the impact of volatility or take
advantage of it. We think you're going to miss tremendous opportunities or make
yourself more vulnerable to losses when you do not manage for total return.
Moreover, our total-return emphasis is not just about making money, it's about
saving money in down markets. Over the long term, you need to generate high
total returns in order to provide your investors with a competitive stream of
income, especially when interest rates are heading down.
Joe, what is your outlook for the municipal bond market over the next twelve to
eighteen months?
Joe: While that may be too long a time frame to predict market conditions with
any degree of accuracy, we expect that the bond market will rally from today's
levels. We're extremely positive on the market over the next six months.
Joe, is there any risk to your positive outlook on the municipal bond market?
Joe: Because inflation is the main factor driving the bond markets, the greatest
risk to our expectations of a favorable market is a real short-term surprise
with respect to inflation. While we think the chances for higher inflation over
the short run are virtually non-existent, over the long term we will continue to
monitor the numbers closely for any signs of inflationary pressures.
What impact do the recent tax law changes have on the municipal bond market?
Joe: We don't think it will have much impact on the municipal bond market and it
certainly hasn't lowered the need for tax-exempt income. Yet a lower long-term
capital gains rate probably shifts the focus somewhat to discount bonds rather
than premium bonds because of the lower capital gains tax rate.
What differentiates you from many other portfolio managers?
Joe: We have a tendency to lean against the wind, based on a combination of
intuition and experience. And while nobody wants to be contrarian all of the
time, you need to be able to make a bid when you think the market has gotten
beaten down to inexpensive levels, or sell when you think the market is too
expensive. We think many market inefficiencies are caused by emotion, and we're
not afraid to make significant moves quickly if we believe they are appropriate.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 3
<PAGE>
Are municipal bond investors being sufficiently compensated in today's
marketplace when they move away from higher-quality issues toward riskier ones?
Joe: Not really. In fact, in all the years we've been managing money the spread
between AAA-rated issues and BBB-rated issues is now probably the lowest it's
been since I began my career in 1970. In our view, there is much more value in
the higher-rated issues. Right now, there is not enough extra yield associated
with lesser-rated bonds to justify the added risk, so we invest primarily in
high-quality issues.
Joe, how do you stay attuned to the needs of your shareholders?
Joe: If you hold the number of public seminars I do, you really can't lose sight
of the needs of your shareholders. In fact, meeting with individual investors on
a regular basis is one of the most important ways for a portfolio manager to
keep a healthy perspective on his or her job. In addition, constant interaction
with shareholders over the years is a humbling experience and drives home the
point that there are an awful lot of people out there counting on you to do a
good job with their hard-earned money.
And you wouldn't do anything differently with their assets that you would with
your own?
Joe: I would never do anything with their money that I wouldn't do with my own.
That's been one of my guiding principles since I started managing money in 1970.
Joe, what advice would you give an investor who wants to participate in a
municipal bond club?
Joe: I would suggest that most individual investors would be better off
investing in a professionally managed municipal bond fund. But, as previously
noted, the key to successful investing in municipal bonds is not to focus on
yield alone, but on total return potential as well. In addition, I would advise
that most individual investors stand to benefit from maintaining a long-term
perspective. In my opinion, successful investing is about time and not timing.
Joe, what additional resources do you have as a professional money manager that
the average investor might not have?
Joe: There's been an explosion in the amount of technology available to
professional money managers, which in turn has compressed the reaction time you
need to make an investment decision. And while many of these technological tools
are now accessible to the average investor, we have a distinct advantage in
being able to interpret the information and act more quickly.
Joe, thanks for spending some time with us today.
- --------------------------------------------------------------------------------
4 1997 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
Historical Performance -- Class A Shares
================================================================================================================================
Net Asset Value
--------------------------
Beginning End Income Capital Gain Return Total
Period Ended of Period of Period Dividends Distributions of Capital Returns(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
8/31/97 $15.61 $15.97 $ 0.45 $0.00 $0.00 5.26%+
- --------------------------------------------------------------------------------------------------------------------------------
2/28/97 16.20 15.61 0.91 0.38 0.00 4.51
- --------------------------------------------------------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------------------------------------------------------
2/29/92 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
- --------------------------------------------------------------------------------------------------------------------------------
2/29/88 15.88 15.05 1.12 0.01 0.00 2.33
================================================================================================================================
Total $10.56 $2.34 $0.08
================================================================================================================================
<CAPTION>
================================================================================================================================
Historical Performance -- Class B Shares
================================================================================================================================
Net Asset Value
--------------------------
Beginning End Income Capital Gain Return Total
Period Ended of Period of Period Dividends Distributions of Capital Returns(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
8/31/97 $15.60 $15.96 $0.41 $0.00 $0.00 4.99%+
- --------------------------------------------------------------------------------------------------------------------------------
2/28/97 16.20 15.60 0.83 0.38 0.00 3.92
- --------------------------------------------------------------------------------------------------------------------------------
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 $4.03 $2.17 $0.01
================================================================================================================================
<CAPTION>
================================================================================================================================
Historical Performance -- Class C Shares
================================================================================================================================
Net Asset Value
--------------------------
Beginning End Income Capital Gain Return Total
Period Ended of Period of Period Dividends Distributions of Capital Returns(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
8/31/97 $15.60 $15.96 $0.40 $0.00 $0.00 4.97%+
- --------------------------------------------------------------------------------------------------------------------------------
2/28/97 16.20 15.60 0.83 0.38 0.00 3.88
- --------------------------------------------------------------------------------------------------------------------------------
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 $2.32 $0.75 $0.00
================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 5
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
Historical Performance -- Class Y Shares
================================================================================================================================
Net Asset Value
--------------------------
Beginning End Income Capital Gain Return Total
Period Ended of Period of Period Dividends Distributions of Capital Returns(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
8/31/97 $15.60 $15.96 $0.46 $0.00 $0.00 5.35%+
- --------------------------------------------------------------------------------------------------------------------------------
2/28/97 16.20 15.60 0.94 0.38 0.00 4.59
- --------------------------------------------------------------------------------------------------------------------------------
Inception*--2/29/96 15.63 16.20 0.85 0.08 0.00 9.84+
================================================================================================================================
Total $2.25 $0.46 $0.00
================================================================================================================================
</TABLE>
It is the Fund's policy to distribute dividends monthly and capital gains, if
any, annually.
<TABLE>
<CAPTION>
====================================================================================================================================
Average Annual Total Return
====================================================================================================================================
Without Sales Charge(1)
---------------------------------------------------------------------------------
Class A Class B Class C Class Y
====================================================================================================================================
<S> <C> <C> <C> <C>
Six Months Ended 8/31/97+ 5.26% 4.99% 4.97% 5.35%
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31/97 10.77 10.15 10.10 10.88
- ------------------------------------------------------------------------------------------------------------------------------------
Five Years Ended 8/31/97 8.80 N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Ten Years Ended 8/31/97 9.14 N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Inception* through 8/31/97 11.05 8.59 11.47 8.24
====================================================================================================================================
<CAPTION>
With Sales Charge(2)
---------------------------------------------------------------------------------
Class A Class B Class C Class Y
====================================================================================================================================
<S> <C> <C> <C> <C>
Six Months Ended 8/31/97+ 1.05% 0.49% 3.97% 5.35%
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31/97 6.35 5.65 9.10 10.88
- ------------------------------------------------------------------------------------------------------------------------------------
Five Years Ended 8/31/97 7.91 N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Ten Years Ended 8/31/97 8.69 N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Inception* through 8/31/97 10.77 8.44 11.47 8.24
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
================================================================================
Cumulative Total Return
================================================================================
Without Sales Charge(1)
================================================================================
<S> <C>
Class A (8/31/87 through 8/31/97) 139.72%
- --------------------------------------------------------------------------------
Class B (Inception* through 8/31/97) 48.75
- --------------------------------------------------------------------------------
Class C (Inception* through 8/31/97) 35.69
- --------------------------------------------------------------------------------
Class Y (Inception* through 8/31/97) 21.04
================================================================================
</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 charges 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 within 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 A, B, C and Y shares are March 4, 1981, November
6, 1992, November 9, 1994 and April 4, 1995, respectively.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
- --------------------------------------------------------------------------------
6 1997 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Smith Barney Managed Municipals Fund Inc. at a Glance (unaudited)
================================================================================
Growth of $10,000 Invested in Class A Shares of Smith Barney Managed Municipals
Fund Inc. vs. Lehman Brothers Municipal Bond Fund Index and the Lipper Peer
Group Average+
- --------------------------------------------------------------------------------
August 1987 -- August 1997
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL]
<TABLE>
<CAPTION>
Smith Barney Lehman Brothers
Managed Municipals Municipal Bond Lipper Peer
Fund Inc. Fund Index Group Average
------------------ --------------- -------------
<S> <C> <C> <C>
Aug 1987 $ 9,598 $10,000 $10,000
Feb 1988 $10,144 $10,530 $10,534
Feb 1989 $10,885 $11,865 $11,263
Feb 1990 $11,841 $12,333 $12,258
Feb 199l $12,747 $13,471 $13,250
Feb 1992 $14,250 $14,816 $14,595
Feb 1993 $16,804 $16,856 $16,663
Feb 1994 $18,045 $l7,789 $17,543
Feb 1995 $18,784 $18,124 $17,657
Feb 1996 $20,915 $20,l27 $19,397
Feb 1997 $21,858 $21,235 $20,265
Aug 1997 $23,008 $22,066 $21,049
</TABLE>
+ Hypothetical illustration of $10,000 invested in Class A shares on August
31, 1987, 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 August 31, 1997. The Lehman Brothers Municipal Bond
Fund 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 as 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 254 mutual funds investing in municipal securities as
of August 31, 1997. 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.
Top Ten States Represented
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL]
<TABLE>
<CAPTION>
<S> <C>
California 9.2%
Colorado 12.3%
Florida 7.5%
Illinois 4.7%
Massachusetts 6.9%
Michigan 5.1%
New York 7.6%
Texas 14.5%
Virginia 4.8%
Washington 4.2%
</TABLE>
Industry Breakdown
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL]
<TABLE>
<CAPTION>
<S> <C>
Cogeneration Facility 3.7%
Education 5.7%
Hospitals 9.2%
Housing 1.4%
General Obligation 9.0%
Pollution Control 1.5%
Transportation 22.3%
Utilities 12.9%
Water & Sewer 16.2%
Other Municipal Bonds 18.1%
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 7
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Alabama -- 0.4%
$ 15,190,000 AAA Jefferson County, AL Sewer Revenue, Series A, FGIC-Insured,
5.375% due 2/1/27 $ 14,791,262
- -----------------------------------------------------------------------------------------------------------------------------------
Alaska -- 1.2%
42,500,000 AA Valdez, AK Marine Terminal Revenue, (British Petroleum Pipeline
Project), Series A, 5.850% due 8/1/25 (a) 42,765,625
- -----------------------------------------------------------------------------------------------------------------------------------
Arizona -- 0.7%
12,170,000 A Greenlee County, AZ IDA, PCR, (Phelps Dodge Corp. Project),
5.450% due 6/1/09 12,413,400
3,500,000 A Maricopa County, AZ IDA, Multi-Family Housing Revenue,
Series A, 6.500% due 10/1/25 3,600,625
1,750,000 AAA Pima County, AZ COP, MBIA-Insured, 5.250% due 1/1/12 1,752,187
3,500,000 AAA Pima County, AZ IDA, Healthpartners of Southern Arizona,
Series A, MBIA-Insured, 5.625% due 4/1/14 3,583,125
2,000,000 AAA Yavapi County, AZ IDA, Yavapi Regional Medical Center,
Series A, FSA-Insured, 5.125% due 12/1/13 1,970,000
- -----------------------------------------------------------------------------------------------------------------------------------
23,319,337
- -----------------------------------------------------------------------------------------------------------------------------------
California -- 9.2%
Anaheim, CA Public Finance Authority Lease Revenue,
(Public Improvement Projects), FSA-Insured:
59,400,000 AAA Series A, 5.000% due 3/1/37 54,573,750
Series C:
8,000,000 AAA Zero coupon due 9/1/19 2,340,000
15,865,000 AAA Zero coupon due 9/1/23 3,668,781
25,885,000 AAA Zero coupon due 9/1/24 5,662,344
5,000,000 AAA Zero coupon due 9/1/25 1,031,250
29,430,000 AAA Zero coupon due 9/1/26 5,738,850
17,860,000 AAA Zero coupon due 9/1/27 3,281,775
8,835,000 AAA Zero coupon due 9/1/28 1,535,081
12,000,000 AAA Zero coupon due 9/1/29 1,950,000
9,590,000 AAA Zero coupon due 9/1/30 1,462,475
2,250,000 A* Apple Valley, CA Unified School District, COP, 5.900% due 9/1/11 2,300,625
9,250,000 AAA California State Department of Corrections, Board Lease Revenue,
Series A, AMBAC-Insured, 5.250% due 1/1/21 8,984,063
2,000,000 AA California State Department of Water Resources,
(Central Valley Project), 4.750% due 12/1/25 1,780,000
2,975,000 AAA California State Health Facilities Finance Authority Revenue,
Sutter Health Services, FSA-Insured, 5.250% due 8/15/27 2,859,719
7,000,000 AAA California State Public Works Board, Lease Revenue,
Series B, AMBAC-Insured, 5.375% due 12/1/19 6,912,500
7,000,000 AAA Chino, CA Unified School District COP, FSA-Insured,
6.125% due 9/1/26 7,402,500
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 5,581,250
15,215,000 AAA Corona, CA Redevelopment Agency, Series A,
FGIC-Insured, 5.500% due 9/1/24 15,176,963
3,775,000 AAA East Bay, CA Municipal Utility District, Water Systems Revenue,
FGIC-Insured, 5.000% due 6/1/26 3,529,625
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8 1997 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited) (continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
California -- 9.2% (continued)
$ 5,000,000 AAA Fresno County, CA Financing Authority, Solid Waste Revenue,
(American Avenue Landfill Project), MBIA-Insured,
5.750% due 5/15/14 $ 5,162,500
3,955,000 AAA Hayward, CA COP, (Civic Center Project), MBIA-Insured,
5.250% due 8/1/26 3,831,406
Long Beach, CA (Aquarium of the Pacific Project):
1,260,000 BBB 5.750% due 7/1/05 1,310,400
1,200,000 BBB 5.750% due 7/1/06 1,237,500
9,000,000 AAA Los Angeles, CA Harbor Department Revenue, Series C,
MBIA-Insured, 5.375% due 11/1/25 8,876,250
Los Angeles, CA Metropolitan Transportation Authority,
Sales Tax Revenue, Series A, MBIA-Insured:
17,770,000 AAA 5.250% due 7/1/14 17,636,725
15,000,000 AAA 5.250% due 7/1/15 14,793,750
28,000,000 AAA 5.250% due 7/1/27 27,090,000
1,630,000 AAA Los Angeles, CA Public Works Finance Authority Lease Revenue,
MBIA-Insured, 5.250% due 9/1/13 1,625,925
2,780,000 AAA Los Angeles, CA Unified School District, COP, Series A,
FSA-Insured, 5.500% due 10/1/16 2,786,950
2,500,000 AAA Palmdale, CA Elementary School District, Special Tax,
Community District No. 90-1, FSA-Insured, 5.400% due 8/1/25 2,440,625
San Diego County, CA COP, Northern County
Regional Expansion Revenue, AMBAC-Insured:
5,500,000 AAA 5.250% due 11/15/14 5,513,750
4,000,000 AAA 5.000% due 10/1/17 3,820,000
2,420,000 AAA 5.250% due 11/15/19 2,365,550
7,000,000 AAA 5.000% due 10/1/25 6,562,500
50,755,000 AAA San Francisco, CA State Building Authority Lease Revenue,
AMBAC-Insured, 5.250% due 12/1/21 49,295,794
5,000,000 AAA San Jose, CA Redevelopment Agency, Tax Allocation, (Merged Area
Redevelopment Project), MBIA-Insured, 5.000% due 8/1/20 4,706,250
4,680,000 AAA San Pablo, CA Redevelopment Agency, Tax Allocation, (Merged
Project Area), FGIC-Insured, 5.250% due 12/1/23 4,516,200
Santa Clara County, CA Finance Authority Lease Revenue,
AMBAC-Insured:
5,500,000 AAA 6.750% due 11/15/20 6,146,250
2,000,000 AAA 6.250% due 11/15/22 2,127,500
5,000,000 AA Southern California Metropolitan Water District, Water Works
Revenue, Series C, 5.000% due 7/1/37 4,587,500
1,515,000 AAA Victorville, CA Multi-Family Revenue, Wimbledon Apartments,
Series A, GNMA-Collateralized, 6.150% due 4/20/16 1,568,025
- -----------------------------------------------------------------------------------------------------------------------------------
313,772,901
- -----------------------------------------------------------------------------------------------------------------------------------
Colorado -- 12.3%
Arapahoe County, CO Capital Improvement Transportation
Highway Revenue:
275,000,000 Baa3* Pre-Refunded--Escrowed with U.S. government securities to
8/31/05 Call @ 20.8626, zero coupon due 8/31/26 (b) 38,843,750
15,000,000 Baa3* Pre-Refunded--Escrowed with U.S. government securities to
8/31/05 Call @ 103, 7.000% due 8/31/26 (b) 17,643,750
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 9
<PAGE>
<TABLE>
<CAPTION>
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Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Colorado -- 12.3% (continued)
Series A, MBIA-Insured:
$ 5,000,000 AAA 5.000% due 9/1/21 $ 4,681,250
46,680,000 AAA 4.750% due 9/1/23 41,895,300
50,750,000 AAA 5.000% due 9/1/26 47,070,625
37,500,000 AAA Series B, MBIA-Insured, zero coupon due 9/1/24 8,203,125
2,000,000 AAA Castle Pines, CO Metropolitan District, Series B, FSA-Insured,
5.000% due 12/1/15 1,917,500
12,765,000 BBB+ Colorado Springs, CO Airport Revenue, Series A,
7.000% due 1/1/22 (a)(c) 13,850,025
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 88,725,000
67,785,000 Aaa* Series B, zero coupon due 10/1/22 (a) 16,522,594
Denver, CO City & County Airport Revenue,
Series A:
26,500,000 Baa1* 14.000% due 11/15/08 (c) 44,221,875
13,500,000 Baa1* Pre-Refunded--Escrowed with U.S. government securities to
11/15/01 Call @ 100, 8.000% due 11/15/25 (b)(c) 15,052,500
Series C:
3,500,000 Baa1* Pre-Refunded--Escrowed with U.S. government securities to
11/15/02 Call @ 102, 6.750% due 11/15/13 (a)(b)(c) 3,753,750
12,035,000 Baa1* Pre-Refunded--Escrowed with U.S. government securities to
11/15/01 Call @ 100, 6.750% due 11/15/22 (a)(b)(c) 12,877,450
Series D:
19,605,000 AAA MBIA-Insured, 5.500% due 11/15/25 19,359,938
22,425,000 Baa1* Pre-Refunded--Escrowed with U.S. government securities to
11/15/01 Call @ 100, 7.000% due 11/15/25 (c) 23,686,406
23,000,000 AAA Series E, MBIA-Insured, 5.250% due 11/15/23 22,137,500
- -----------------------------------------------------------------------------------------------------------------------------------
420,442,338
- -----------------------------------------------------------------------------------------------------------------------------------
Connecticut -- 0.1%
1,080,000 AAA Connecticut State Health & Educational Facilities Authority Revenue,
William H. Backus Hospital, AMBAC-Insured, 5.625% due 7/1/17 1,100,250
Connecticut State Housing Finance Authority, AMBAC-Insured,
Group Home Mortgage Program:
500,000 AAA 5.600% due 6/15/17 501,875
1,000,000 AAA 5.625% due 6/15/27 1,007,500
- -----------------------------------------------------------------------------------------------------------------------------------
2,609,625
- -----------------------------------------------------------------------------------------------------------------------------------
District of Columbia -- 0.4%
District of Columbia, The American University Education Revenue,
AMBAC-Insured:
3,000,000 AAA 5.250% due 1/1/16 2,913,750
10,765,000 AAA 5.125% due 1/1/27 10,105,644
- -----------------------------------------------------------------------------------------------------------------------------------
13,019,394
- -----------------------------------------------------------------------------------------------------------------------------------
Florida -- 7.5%
Boynton Beach, FL Multi-Family Housing Revenue,
Clipper Cove Apartments:
750,000 A+ 6.350% due 7/1/16 775,313
1,325,000 A+ 6.400% due 7/1/21 1,369,719
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1997 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Florida -- 7.5% (continued)
Broward County, FL GO, Public Improvement Revenue:
$ 1,000,000 Aa2* 12.500% due 1/1/02 $ 1,308,750
1,250,000 Aa2* 12.500% due 1/1/03 1,712,500
1,500,000 Aa2* 12.500% due 1/1/04 2,139,375
1,750,000 Aa2* 12.500% due 1/1/05 2,587,812
2,000,000 Aa2* 12.500% due 1/1/06 3,047,500
2,375,000 AAA Celebration, FL Community Development District, Series B,
MBIA-Insured, 5.500% due 5/1/19 2,366,094
4,740,000 AAA Dade County, FL GO, MBIA-Insured, 5.125% due 10/1/21 4,514,850
5,980,000 AAA Dade County, FL School District, MBIA-Insured,
5.500% due 8/1/14 6,107,075
Dade County, FL Water and Sewer Revenue, FGIC-Insured:
41,270,000 AAA 5.250% due 10/1/21 39,877,138
37,300,000 AAA 5.250% due 10/1/26 35,947,875
1,000,000 AAA First Florida Governmental Financing Commission Revenue,
AMBAC-Insured, 5.750% due 7/1/16 1,027,500
3,400,000 AAA Florida State Correctional Privatization Commission COP, Youth
Detention Facility, Series C, AMBAC-Insured, 5.000% due 8/1/17 3,225,750
3,980,000 AAA Florida State University Revenue, Board of Regents, MBIA-Insured,
5.125% due 5/1/26 3,810,850
Gainesville, FL Utilities Systems Revenue, Series A:
9,600,000 AA 5.200% due 10/1/22 9,288,000
8,000,000 AA 5.200% due 10/1/26 7,610,000
6,715,000 AAA Halifax, FL Hospital Medical Center Revenue, Series A, MBIA-Insured,
5.250% due 10/1/15 6,647,850
6,190,000 AAA Hillsborough County, FL Capital Improvement Program Revenue,
Series A, MBIA-Insured, 5.125% due 7/1/22 5,926,925
3,610,000 AAA Jacksonville, FL Capital Improvement Revenue, (Gator Bowl Project),
AMBAC-Insured, 5.250% due 10/1/25 3,533,288
1,300,000 A-1+ Jacksonville, FL PCR, (Florida Power & Light Corp. Project),
3.300% due 5/1/29 (d) 1,300,000
2,500,000 AAA Martin County, FL Health Facilities Authority, Hospital Revenue,
(Martin Memorial Medical Center Project), Series A,
MBIA-Insured, 5.375% due 11/15/24 2,434,375
Martin County, FL IDA, Indiantown Cogeneration:
10,000,000 BBB- Project A, 7.875% due 12/15/25 (a)(c) 11,462,500
6,010,000 BBB- Project B, 8.050% due 12/15/25 (c) 6,949,063
58,100,000 Aaa* Orange County, FL School Board, COP, Series A, MBIA-Insured,
5.375% due 8/1/22 57,083,250
Reedy Creek, FL Import District Utilities Revenue:
9,000,000 AAA Series C, AMBAC-Insured, 5.000% due 6/1/19 8,460,000
12,500,000 AAA Series 1, MBIA-Insured, 5.000% due 10/1/19 11,750,000
7,045,000 Aaa* Sarasota, FL Hospital Revenue, (Sarasota Memorial Hospital Project),
Series B, MBIA-Insured, 5.375% due 10/1/20 6,886,488
Tampa, FL Revenue Bonds, (Florida Aquarium Inc. Project),
(Pre-Refunded--Escrowed with U.S. government securities
to 5/1/02 Call @ 102):
2,800,000 NR 7.550% due 5/1/12 (b) 3,199,000
3,000,000 NR 7.750% due 5/1/27 (b) 3,453,750
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 11
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Florida -- 7.5% (continued)
$ 2,180,000 AAA Village Center, FL Community Development District, Recreational
Revenue, Series A, MBIA-Insured, 5.850% due 11/1/16 $ 2,272,650
- -----------------------------------------------------------------------------------------------------------------------------------
258,075,240
- -----------------------------------------------------------------------------------------------------------------------------------
Georgia -- 2.0%
Atlanta, GA Water & Sewer Revenue, FGIC-Insured:
19,700,000 AAA 5.250% due 1/1/27 18,912,000
41,050,000 AAA Second Lien, 5.250% due 1/1/27 39,408,000
580,000 AA- Brunswick, GA Housing Authority, Multi-Family Housing Revenue,
Cypress Mill, FHA-Insured, 9.750% due 8/1/26 642,350
40,000,000 Aaa* Richmond County, GA Development Authority Revenue, (Escrowed
to Maturity with U.S. government securities), Series A,
First Mortgage, zero coupon due 12/1/21 10,250,000
- -----------------------------------------------------------------------------------------------------------------------------------
69,212,350
- -----------------------------------------------------------------------------------------------------------------------------------
Illinois -- 4.7%
2,000,000 AAA Chicago, IL GO, Series 1993, FGIC-Insured, 5.375% due 1/1/13 1,997,500
4,395,000 AAA Chicago, IL Midway Airport Revenue, Series A, MBIA-Insured,
5.625% due 1/1/22 4,400,493
10,500,000 AAA Chicago, IL O'Hare International Airport Revenue, Series C,
MBIA-Insured, 5.000% due 1/1/18 9,817,500
Chicago, IL Skyway Toll Bridge Revenue, Series 1996, MBIA-Insured:
5,000,000 AAA 5.375% due 1/1/11 5,050,000
33,100,000 AAA 5.500% due 1/1/23 32,562,125
7,000,000 AAA Chicago, IL Water Revenue, FGIC-Insured, 5.000% due 11/1/25 6,466,250
3,750,000 AA Illinois Developmental Finance Authority, PCR,
5.700% due 8/15/26 3,759,375
3,000,000 AAA Illinois State COP, Department of Central Management Services,
Public Aid Building, MBIA-Insured, 5.650% due 7/1/17 3,003,750
Illinois State GO, FGIC-Insured:
6,300,000 AAA 5.375% due 2/1/19 6,205,500
14,375,000 AAA 5.250% due 12/1/20 13,925,781
Metropolitan Pier & Exposition Authority,
IL Tax Revenue, (McCormick Expansion
Plan Project), Series A:
54,925,000 AAA AMBAC-Insured, 5.250% due 6/15/27 52,865,313
4,410,000 AAA FGIC-Insured, zero coupon due 6/15/21 1,152,112
MBIA-Insured:
5,000,000 AAA Zero coupon due 12/15/19 1,437,500
17,550,000 AAA Zero coupon due 12/15/21 4,453,313
5,000,000 AAA Zero coupon due 12/15/22 1,200,000
44,575,000 AAA Zero coupon due 12/15/24 9,583,625
2,000,000 AAA Springfield, IL GO, Series C, MBIA-Insured, 5.375% due 12/1/21 1,957,500
1,000,000 AAA University of Illinois Revenue Bonds, Auxiliary Facilities Systems,
MBIA-Insured, 5.375% due 10/1/13 995,000
- -----------------------------------------------------------------------------------------------------------------------------------
160,832,637
- -----------------------------------------------------------------------------------------------------------------------------------
Indiana -- 1.0%
9,775,000 AAA Avon, IN Community School Building Corp., First Mortgage,
AMBAC-Insured, 5.250% due 1/1/22 9,396,219
3,005,000 AAA Indiana Bond Bank, State Revenue, Guaranteed-State Revolving
Fund, (Project A), 6.250% due 2/1/09 3,196,569
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1997 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Indiana -- 1.0% (continued)
Indiana Health Facilities Financing Authority Revenue:
Riverview Hospital:
$ 240,000 Baa1* 6.000% due 8/1/98 $ 241,413
255,000 Baa1* 6.200% due 8/1/99 258,506
305,000 Baa1* 6.500% due 8/1/01 314,150
200,000 Baa1* 6.600% due 8/1/02 207,250
3,645,000 A2* St. Anthony Medical/Home Inc., Series H, (Pre-Refunded--Escrowed
with U.S. government securities to 10/1/97 Call @ 102),
9.250% due 10/1/17 (b) 3,732,261
15,000,000 AAA Rockport, IN PCR, Series A, AMBAC-Insured, 6.550% due 6/1/25 16,087,500
- -----------------------------------------------------------------------------------------------------------------------------------
33,433,868
- -----------------------------------------------------------------------------------------------------------------------------------
Maryland -- 1.0%
6,640,000 AAA Baltimore, MD COP, Emergency Telecommunications Facilities,
Series A, AMBAC-Insured, 5.000% due 10/1/17 6,374,400
Baltimore, MD GO, Series A, FGIC-Insured:
2,585,000 AAA 5.625% due 10/15/14 2,675,475
2,745,000 AAA 5.750% due 10/15/15 2,858,231
1,165,000 AAA 5.750% due 10/15/16 1,210,144
2,000,000 AAA Baltimore, MD Mortgage Revenue, (Northbrooke Apartments
Project), GNMA-Collateralized, Series A, 6.350% due 1/20/21 2,107,500
1,375,000 AAA Charles County, MD Mortgage Revenue, (Holly Station Project),
Series A, FHA-Insured, 6.450% due 5/1/26 1,440,313
56,000,000 NR Maryland State Energy Financing Administration, Solid Waste
Disposal Revenue, (Hagerstown Project),
9.000% due 10/15/16 (a)(c) 17,360,000
1,750,000 Aa2* Montgomery County, MD Housing Opportunities Community,
Single-Family Mortgage Revenue, Series A, 5.750% due 7/1/13 1,798,125
- -----------------------------------------------------------------------------------------------------------------------------------
35,824,188
- -----------------------------------------------------------------------------------------------------------------------------------
Massachusetts -- 6.9%
2,200,000 AAA Holyoke, MA GO, Series A, FSA-Insured, 5.500% due 6/15/16 2,233,000
Massachusetts Bay Transportation Authority:
Series B, General Transportation System:
AMBAC-Insured:
15,380,000 AAA 5.375% due 3/1/20 15,130,075
20,890,000 AAA 5.375% due 3/1/25 20,472,200
FSA-Insured:
15,000,000 AAA 5.250% due 3/1/20 14,512,500
41,950,000 AAA 5.250% due 3/1/26 40,324,438
Massachusetts Municipal Wholesale Electric Co., Power Supply
System Revenue:
Series A, AMBAC-Insured:
11,900,000 AAA 5.000% due 7/1/14 11,334,750
2,950,000 AAA 5.000% due 7/1/17 2,761,938
9,435,000 AAA Series B, MBIA-Insured, 5.000% due 7/1/17 8,833,519
Massachusetts State GO, Series C, AMBAC-Insured:
13,990,000 AAA 5.000% due 8/1/13 13,570,300
10,000,000 AAA 5.000% due 8/1/14 9,637,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 13
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Massachusetts -- 6.9% (continued)
Massachusetts State, Health and Educational Facilities
Authority Revenue, MBIA-Insured:
$ 3,290,000 AAA Berklee School of Music, 5.100% due 10/1/27 $ 3,102,437
3,000,000 AAA New England Medical Center, 3.100% due 7/1/13 2,655,000
Massachusetts State Industrial Finance Agency Revenue:
2,600,000 AAA Merrimack College, MBIA-Insured, 5.000% due 7/1/27 2,427,750
31,700,000 NR Solid Waste Disposal Revenue, Massachusetts
Recycling Association, Series A, 9.000% due 8/1/16 (c) 11,887,500
1,765,000 AAA Worcester Polytechnic Institute, MBIA-Insured,
5.125% due 9/1/12 1,780,444
32,280,000 Aa3* Massachusetts State Port Authority Revenue, Series A,
5.000% due 7/1/27 29,899,350
Massachusetts State Water Resources Authority:
27,785,000 AAA MBIA-Insured, 5.000% due 12/1/25 25,874,781
Series B:
3,000,000 A 5.500% due 3/1/17 3,003,750
10,000,000 AAA 4.000% due 12/1/18 8,212,500
10,000,000 AAA Series C, 5.250% due 12/1/20 9,712,500
- -----------------------------------------------------------------------------------------------------------------------------------
237,366,232
- -----------------------------------------------------------------------------------------------------------------------------------
Michigan -- 5.1%
600,000 AAA Central Michigan University Revenue, FGIC-Insured,
5.500% due 10/1/26 598,500
21,585,000 AAA Detroit & Wayne County, MI Stadium Authority Revenue,
FGIC-Insured, 5.250% due 2/1/27 20,640,656
2,090,000 AAA Grand Valley, MI State University Revenue, MBIA-Insured,
5.250% due 10/1/17 2,058,650
2,140,000 AAA Ingham County, MI Building Authority, AMBAC-Insured,
5.000% due 11/1/16 2,011,600
22,625,000 AA+ Michigan Municipal Board Authority, PCR,
5.125% due 10/1/20 21,663,438
40,730,000 AAA Michigan Public Power Agency Revenue, (Belle River Project),
Series A, MBIA-Insured, 5.250% due 1/1/18 39,457,188
Michigan State Hospital Finance Authority Revenue,
Mercy Health Services, AMBAC-Insured:
2,500,000 AAA Series Q, 5.375% due 8/15/26 2,431,250
1,000,000 AAA Series R, 5.375% due 8/15/16 982,500
17,000,000 NR Michigan State Strategic Funding Limited Obligation Revenue,
(Blue Water Fiber Project), 8.000% due 1/1/12 (c)(e) 11,390,000
56,625,000 NR Midland County, MI Economic Development Corp.,
PCR, Subordinated Limited Obligation, Series B,
9.500% due 7/23/09 (c) 62,287,500
3,000,000 AAA Northern Michigan University Revenue, MBIA-Insured,
5.125% due 12/1/20 2,850,000
Rockford, MI Public Schools, GO, FGIC-Insured:
1,000,000 AAA 5.250% due 5/1/22 962,500
1,300,000 AAA 5.250% due 5/1/27 1,241,500
5,750,000 AAA Wayne County, MI Building Authority, Capital Improvement,
Series A, MBIA-Insured, 5.250% due 6/1/16 5,728,437
- -----------------------------------------------------------------------------------------------------------------------------------
174,303,719
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1997 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Minnesota -- 0.1%
- -----------------------------------------------------------------------------------------------------------------------------------
$ 5,000,000 AA+ North St. Paul, MN ISD 622, Series A, 5.125% due 2/1/20 $ 4,856,250
- -----------------------------------------------------------------------------------------------------------------------------------
Mississippi -- 0.1%
1,000,000 P-1* Jackson County, MS PCR, (Chevron Project), 3.800% due 6/1/23 (d) 1,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
Missouri -- 1.3%
4,750,000 AAA Fenton, MO COP, (Capital Improvements Project), MBIA-Insured,
5.125% due 9/1/17 4,637,188
23,235,000 AAA Kansas City, MO Municipal Assistance Corp., Series A,
MBIA-Insured, 5.000% due 4/15/20 21,869,944
Missouri State Environmental Import &
Energy Resource Authority, PCR, State
Revolving Fund, Series E:
1,040,000 Aa1* 5.200% due 1/1/10 1,064,700
2,235,000 Aa1* 5.250% due 1/1/19 2,204,269
2,250,000 AAA Missouri State Health & Educational Facilities Authority, Health
Facilities Revenue, St. Lukes Mission, MBIA-Insured, Series A,
5.375% due 11/15/21 2,207,813
5,400,000 AAA St. Louis, MO Regional Convention & Sports Complex Authority,
AMBAC-Insured, 5.300% due 8/15/20 5,244,750
7,500,000 AAA Sikestown, MO Electric Revenue, MBIA-Insured,
5.000% due 6/1/22 7,040,625
- -----------------------------------------------------------------------------------------------------------------------------------
44,269,289
- -----------------------------------------------------------------------------------------------------------------------------------
Montana -- 0.9%
33,400,000 NR Montana State Board, Resource Recovery Revenue,
(Yellowstone Energy LP Project), 7.000% due 12/31/19 (a)(c) 32,314,500
- -----------------------------------------------------------------------------------------------------------------------------------
Nebraska -- 0.8%
Nebraska Public Power District Revenue, Series A, MBIA-Insured:
24,565,000 AAA Electric System Revenue, 5.250% due 1/1/28 23,613,106
5,000,000 AAA Power Supply System, 5.250% due 1/1/28 4,806,250
- -----------------------------------------------------------------------------------------------------------------------------------
28,419,356
- -----------------------------------------------------------------------------------------------------------------------------------
Nevada -- 0.1%
1,500,000 A-1+ Clark County, NV IDR, (Cogeneration Association Project),
2.350% due 11/1/21 (c)(d) 1,500,000
- -----------------------------------------------------------------------------------------------------------------------------------
New Hampshire -- 0.7%
23,500,000 BBB- New Hampshire IDA, PCR Bonds, United Illuminating, Series B,
10.750% due 10/1/12 (a)(c) 24,318,270
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey -- 0.1%
2,500,000 Aaa* New Jersey Economic Development Authority Revenue,
(Hillcrest Health Service Systems Project),
AMBAC-Insured, 5.375% due 1/1/16 2,503,125
- -----------------------------------------------------------------------------------------------------------------------------------
New Mexico -- 0.1%
3,550,000 Aaa* Santa Fe, NM Single-Family Mortgage Revenue,
FNMA & GNMA-Collateralized, 6.300% due 11/1/28 (c) 3,660,938
- -----------------------------------------------------------------------------------------------------------------------------------
New York -- 7.6%
4,945,000 AAA Dutchess County, NY IDA, Civic Facilities Revenue,
(Bard College Project), AMBAC-Insured, 5.375% due 6/1/27 4,839,919
2,960,000 AA Housing Corp. of New York Revenue, 5.500% due 11/1/20 2,926,700
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 15
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
New York -- 7.6% (continued)
$ 2,695,000 AAA New York City, NY Education Construction Fund Revenue,
AMBAC-Insured, 5.500% due 4/1/16 $ 2,701,738
1,280,000 AAA New York City, NY IDA, Civic Facilities Revenue, (Trinity Episcopal
School Corp. Project), MBIA-Insured, 5.250% due 6/15/17 1,254,400
New York City, NY Municipal Water Financing Authority,
Water & Sewer Revenue:
11,950,000 AAA MBIA-Insured, 5.375% due 6/15/19 11,815,563
Series A:
7,150,000 A2* 5.125% due 6/15/17 6,819,313
17,840,000 A2* 5.125% due 6/15/21 16,925,700
6,145,000 AAA AMBAC-Insured, 5.125% due 6/15/22 5,899,200
44,870,000 AAA FSA-Insured, 5.375% due 6/15/26 43,972,600
13,840,000 AAA Series B, AMBAC-Insured, 5.375% due 6/15/19 13,684,300
17,000,000 AAA New York Metropolitan Transportation Authority, Dedicated
Tax Fund, Series A, MBIA-Insured, 5.250% due 4/1/26 16,362,500
New York State Dormitory Authority:
City University:
6,000,000 AAA Series A, FGIC-Insured, 5.375% due 7/1/14 6,022,500
16,260,000 AAA Series 1, AMBAC-Insured, 5.375% due 7/1/25 15,975,450
5,000,000 AAA Series 2, MBIA-Insured, 6.250% due 7/1/19 5,268,750
Iona College, MBIA-Insured:
485,000 AAA 6.600% due 7/1/07 526,831
420,000 AAA 6.600% due 7/1/08 455,700
555,000 AAA 6.600% due 7/1/09 601,481
540,000 AAA 6.700% due 7/1/10 586,575
14,765,000 AAA Montefiore Medical Center, AMBAC-Insured, 5.250% due 2/1/15 14,598,893
5,750,000 AAA Mount Sinai School of Medicine, Series A, MBIA-Insured,
5.000% due 7/1/21 5,369,063
5,250,000 AAA Municipal Health Facilities, Series A, FSA-Insured,
5.500% due 5/15/24 5,250,000
2,260,000 AAA The New School For Social Research, MBIA-Insured,
5.625% due 7/1/16 2,305,200
5,000,000 AAA Pace University, MBIA-Insured, 5.625% due 7/1/17 5,100,000
2,000,000 A New York State GO, 12.000% due 11/15/03 2,777,500
New York State Medical Care Facilities, Financing Agency Revenue:
10,000,000 AAA FGIC-Insured, 5.250% due 2/15/19 9,650,000
840,000 AAA Series A, FHA-Insured, 5.375% due 2/15/25 825,300
8,350,000 AAA Series F, FSA-Insured, 5.250% due 2/15/21 7,963,813
2,825,000 AAA New York State Thruway Authority Revenue, Series B,
MBIA-Insured, 5.000% due 1/1/20 2,655,500
New York State Urban Development Corp. Revenue:
4,000,000 AAA AMBAC-Insured, 5.250% due 1/1/18 3,905,000
3,250,000 AAA FSA-Insured, 5.250% due 1/1/21 3,128,125
100,000 A-1+ Port Authority of New York & New Jersey Revenue Bonds, Versatile
Structure Obligation, 3.250% due 4/1/24 (d) 100,000
Triborough Bridge & Tunnel Authority of New
York, General Purpose Revenue Bonds,
Series A:
10,000,000 Aa* 5.200% due 1/1/20 9,562,500
24,350,000 Aa* 5.000% due 1/1/24 22,523,750
1,100,000 AAA Troy City, NY Municipal Assistance Corp., Series A,
MBIA-Insured, 5.000% due 1/15/16 1,050,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1997 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
New York -- 7.6% (continued)
$ 6,000,000 AAA Upper Mohawk, NY Regional Water Systems Revenue, Series A,
FSA-Insured, 5.125% due 10/1/26 $ 5,655,000
- -----------------------------------------------------------------------------------------------------------------------------------
259,059,364
- -----------------------------------------------------------------------------------------------------------------------------------
North Carolina -- 0.9%
4,500,000 A* Carteret County, NC COP, (Elementary School Project),
6.500% due 2/1/07 4,803,750
500,000 AAA Gaston County, NC COP, (Public Facilities Project), MBIA-Insured,
5.250% due 12/1/16 493,125
3,780,000 AA North Carolina Medical Care, Community Health Care Facilities
Revenue, (Carolina Medicorp Project), 5.125% due 5/1/16 3,647,700
16,755,000 AAA North Carolina Municipal Power Agency, Catawaba Electric Revenue,
Series A, AMBAC-Insured, 5.375% due 1/1/20 16,398,956
5,000,000 AA University of North Carolina at Chapel Hill Hospital Revenue,
5.250% due 2/15/26 4,850,000
- -----------------------------------------------------------------------------------------------------------------------------------
30,193,531
- -----------------------------------------------------------------------------------------------------------------------------------
North Dakota -- 0.1%
1,000,000 A* Grand Forks, ND Housing Facilities Revenue, Senior United Health
Resources, (Pre-Refunded--Escrowed with U.S. government
securities to 12/1/97 Call @ 102), 9.250% due 12/1/10 (b) 1,032,770
- -----------------------------------------------------------------------------------------------------------------------------------
Ohio -- 3.3%
Akron, Bath and Copley, OH Joint Township, Hospital Revenue Bonds:
3,000,000 Aaa* Akron City Hospital Project, (Pre-Refunded--Escrowed with U.S.
government securities to 11/15/97 Call @ 102),
8.875% due 11/15/07 3,089,970
Akron General Medical Center Project, AMBAC-Insured:
14,630,000 AAA 5.375% due 1/1/17 14,575,138
20,000,000 AAA 5.375% due 1/1/22 19,725,000
3,490,000 AAA 5.375% due 1/1/27 3,420,200
1,000,000 Aaa* Brecksville-Broadview Heights, OH City School District,
FGIC-Insured, 6.500% due 12/1/16 1,118,750
Clermont County, OH Hospital Facility
Revenue, Mercy Health Systems, Series B,
AMBAC-Insured:
3,415,000 AAA 5.625% due 9/1/16 3,453,419
1,300,000 AAA 5.625% due 9/1/21 1,311,375
Cleveland, OH Waterworks Revenue, Refunding
& Improvement, First Mortgage, Series H,
MBIA-Insured:
1,000,000 AAA 5.625% due 1/1/13 1,028,750
1,000,000 AAA 5.700% due 1/1/14 1,030,000
Cuyahoga County, OH Hospital Revenue, Metrohealth Systems,
MBIA-Insured:
1,000,000 AAA 5.375% due 2/15/12 1,005,000
1,000,000 AAA 5.625% due 2/15/17 1,012,500
3,000,000 AAA Cuyahoga County, OH Port Authority Revenue, Rock & Roll
Hall of Fame, AMBAC-Insured, 5.400% due 12/1/15 2,973,750
2,500,000 A-1+ Hamilton County, OH Hospital Revenue, MBIA-Insured,
3.100% due 1/1/18 (d) 2,500,000
46,885,000 AAA Lorrain County, OH Hospital Revenue, Catholic Healthcare Partners,
MBIA-Insured, 5.500% due 9/1/27 46,298,938
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 17
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Ohio -- 3.3% (continued)
$ 1,500,000 NR Ohio State Solid Waste Revenue, Republic Engineered Steels Inc.,
9.000% due 6/1/21 (c) $ 1,552,500
1,585,000 AAA Twinsburg, OH Local School District, FGIC-Insured,
5.900% due 12/1/21 1,654,343
University of Akron, OH General Revenue, AMBAC-Insured:
1,000,000 AAA 5.125% due 1/1/11 1,002,500
1,000,000 AAA 5.125% due 1/1/12 997,500
2,000,000 AAA 5.250% due 1/1/17 1,960,000
2,525,000 AAA 5.250% due 1/1/22 2,449,250
- -----------------------------------------------------------------------------------------------------------------------------------
112,158,883
- -----------------------------------------------------------------------------------------------------------------------------------
Oklahoma -- 0.1%
1,975,000 AA Tulsa, OK Industrial Authority, Hospital Revenue, St. John's Medical
Center, 6.250% due 2/15/17 2,086,093
1,455,000 AAA Tulsa, OK Metropolitan Utility Authority, Utility Revenue,
MBIA-Insured, 5.750% due 9/1/25 1,482,281
1,000,000 AA- Woods County, OK IDA, Revenue Refunding, (Cargill Inc. Project),
6.250% due 10/1/14 1,072,500
- -----------------------------------------------------------------------------------------------------------------------------------
4,640,874
- -----------------------------------------------------------------------------------------------------------------------------------
Oregon -- 0.2%
6,950,000 AA Oregon State GO, Series B, 6.375% due 8/1/24 7,314,875
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania -- 1.8%
6,500,000 AAA Allegheny County, PA Airport Revenue, Pittsburgh International Airport,
Series B, MBIA-Insured, 5.000% due 1/1/19 6,101,875
Delaware County, PA Interboro School District GO, MBIA-Insured:
985,000 AAA 5.150% due 8/15/13 966,531
935,000 AAA 5.200% due 8/15/14 916,300
1,150,000 AAA 5.300% due 8/15/17 1,115,500
1,600,000 AAA 5.375% due 8/15/22 1,552,000
1,000,000 AAA 5.375% due 8/15/25 961,250
4,000,000 AAA Lehigh County, PA General Purpose Authority Revenue,
Good Shepherd Rehabilitation Hospital, AMBAC-Insured,
5.250% due 11/15/27 3,835,000
3,240,000 AAA Lewisburg, PA Area School District, MBIA-Insured,
5.125% due 3/15/18 3,094,200
7,765,000 AAA Northeastern Pennsylvania Hospital & Education Authority,
Wyoming Valley Health Care, Series A, AMBAC-Insured,
5.250% due 1/1/26 7,473,812
Owen J. Roberts School District, Series A, MBIA-Insured:
1,515,000 AAA 5.200% due 5/15/12 1,524,469
1,570,000 AAA 5.250% due 5/15/13 1,579,812
1,670,000 AAA 5.300% due 5/15/14 1,674,175
4,565,000 AAA 5.375% due 5/15/18 4,530,762
Pennsylvania Economic Development Financing Authority Revenue,
(Northhampton Generating Project), Series C:
2,000,000 NR 6.875% due 1/1/11 (c) 2,007,500
12,000,000 NR 6.950% due 1/1/21 (c) 11,910,000
2,500,000 VMIG 1* Pennsylvania State Higher Education Facilities Authority,
3.100% due 11/15/35 (d) 2,500,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1997 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Pennsylvania -- 1.8% (continued)
Philadelphia, PA School District GO, Series A, AMBAC-Insured, Series B:
$ 1,000,000 AAA 5.000% due 4/1/10 $ 991,250
1,000,000 AAA 5.000% due 4/1/11 985,000
1,000,000 AAA 5.000% due 4/1/12 983,750
3,310,000 AAA 5.250% due 4/1/17 3,227,250
2,220,000 AAA 5.375% due 4/1/19 2,181,150
- -----------------------------------------------------------------------------------------------------------------------------------
60,111,586
- -----------------------------------------------------------------------------------------------------------------------------------
South Carolina -- 0.1%
2,625,000 AAA Berkeley County, SC School District COP, MBIA-Insured,
5.250% due 2/1/16 2,559,375
- -----------------------------------------------------------------------------------------------------------------------------------
Tennessee -- 0.7%
Chattanooga, TN Health, Educational & Housing Facility Board,
Mortgage Revenue, Red Bank Health Care, FHA-Insured:
30,000 A 11.250% due 2/1/00 34,275
90,000 A 11.250% due 8/1/00 105,300
100,000 A 11.250% due 2/1/01 119,250
105,000 A 11.250% due 8/1/01 127,837
110,000 A 11.250% due 2/1/02 136,262
115,000 A 11.250% due 8/1/02 145,187
120,000 A 11.250% due 2/1/03 153,450
130,000 A 11.250% due 8/1/03 169,162
135,000 A 11.250% due 2/1/04 176,850
145,000 A 11.250% due 8/1/04 192,850
150,000 A 11.250% due 2/1/05 202,500
180,000 A 11.250% due 8/1/05 246,375
11,000,000 NR Hardeman County, TN Correctional Facilities Corp.,
7.750% due 8/1/17 11,838,750
1,500,000 AAA Metropolitan Government Nashville & Davidson County, TN Health
& Educational Facilities Board, Refunding & Improvement,
Meharry Medical College, AMBAC-Insured, 5.000% due 12/1/24 1,402,500
Shelby County, TN Health, Educational & Housing Facilities Board,
Hospital Revenue, Methodist Health System, MBIA-Insured:
2,500,000 AAA 5.200% due 8/1/13 2,456,250
1,500,000 AAA 5.250% due 8/1/14 1,473,750
5,000,000 AAA 5.300% due 8/1/15 4,906,250
- -----------------------------------------------------------------------------------------------------------------------------------
23,886,798
- -----------------------------------------------------------------------------------------------------------------------------------
Texas -- 14.5%
Austin, TX Utility Systems Revenue, FSA-Insured:
5,160,000 AAA 5.125% due 11/15/16 4,927,800
4,000,000 AAA 5.125% due 11/15/17 3,835,000
Austin, TX Water, Sewer & Electric Authority Revenue Bonds:
50,590,000 A* 14.000% due 11/15/01 (f) 62,984,550
855,000 A* Pre-Refunded--Escrowed with U.S. government securities to
5/15/99 Call @ 100, 14.000% due 11/15/01 (b) 983,250
960,000 A* Pre-Refunded--Escrowed with U.S. government securities to
various call dates (5/15/98 to 11/15/01) Call @ 100,
14.000% due 11/15/01 (b) 1,146,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 19
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Texas -- 14.5% (continued)
Bexar County, TX Health Facilities Development Corp. Revenue,
Baptist Health System, Series A, MBIA-Insured:
$ 38,440,000 AAA 5.375% due 11/15/22 $ 37,479,000
12,120,000 AAA 5.250% due 11/15/27 11,544,300
7,000,000 AAA Brownsville, TX Utilities Systems Revenue, AMBAC-Insured,
5.250% due 9/1/20 6,763,750
Burleson, TX ISD, PSFG:
4,795,000 Aaa* 6.750% due 8/1/24 5,304,468
11,740,000 NR Pre-Refunded--Escrowed with U.S. government securities to
8/1/06 Call @ 100, 6.750% due 8/1/24 (b) 13,471,650
Conroe, TX ISD, PSFG:
3,000,000 AAA Series A, 5.600% due 2/15/21 3,018,750
Series B:
1,000,000 AAA 5.450% due 2/1/15 1,010,000
1,075,000 AAA 5.450% due 2/1/16 1,085,750
Copperas Cove Island, TX ISD, PSFG Refunding:
1,960,000 AAA 5.600% due 2/1/13 2,011,450
2,035,000 AAA 5.600% due 2/1/14 2,080,787
6,105,000 AAA El Paso County, TX Community College District Revenue,
AMBAC-Insured, 5.375% due 4/1/19 5,967,637
1,215,000 AAA Fort Bend County, TX Levee Improvement District No. 011,
MBIA-Insured, 5.875% due 3/1/13 1,268,156
3,000,000 AAA Harris County, TX Health Facilities, (Texas Medical Center
Parking Project), MBIA-Insured, 5.900% due 5/15/20 3,082,500
Harris County, TX Health Facilities Development Corp. Revenue:
4,325,000 AA Series B, 5.750% due 7/1/27 4,379,062
12,000,000 A-1+ St. Lukes Hospital, 3.600% due 2/15/27 (d) 12,000,000
1,000,000 Aa3* Harris County, TX Industrial Development Corp., IDR, Cargill Inc.,
7.000% due 10/1/15 (d) 1,100,000 Harris
County, TX Toll Road Revenue:
5,800,000 AA 5.100% due 8/15/15 5,662,250
10,655,000 AA 5.125% due 8/15/17 10,282,075
17,020,000 AA 5.000% due 8/15/21 15,871,150
30,820,000 AAA FGIC-Insured, 5.375% due 8/15/20 30,280,650
MBIA-Insured:
14,200,000 AAA 5.125% due 8/15/17 13,685,250
9,125,000 AAA 5.000% due 8/15/24 8,463,437
8,520,000 AAA Houston, TX Airport System Revenue, FGIC-Insured,
5.125% due 7/1/22 8,136,600
Houston, TX Community College System Revenue, MBIA-Insured:
1,705,000 AAA 5.600% due 4/15/14 1,743,362
3,295,000 AAA 5.650% due 4/15/15 3,356,781
Houston, TX Water & Sewer Revenue:
Series A:
FGIC-Insured:
6,095,000 AAA 5.250% due 12/1/21 5,950,243
25,195,000 AAA 5.250% due 12/1/22 24,565,125
21,765,000 AAA 5.375% due 12/1/27 21,356,906
40,000,000 AAA MBIA-Insured, 5.250% due 12/1/25 38,950,000
13,895,000 AAA Series C, FGIC-Insured, 5.250% due 12/1/22 13,547,625
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1997 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Texas -- 14.5% (continued)
Kilgore, TX ISD, GO, PSFG:
$ 525,000 Aaa* 5.400% due 2/15/14 $ 532,218
400,000 Aaa* 5.375% due 2/15/15 403,000
La Porte, TX ISD, GO, PSFG:
500,000 AAA 5.500% due 2/15/14 509,375
500,000 AAA 5.500% due 2/15/15 506,875
500,000 AAA 5.500% due 2/15/16 506,875
880,000 AAA 5.250% due 2/15/19 861,300
1,260,000 AAA Leander, TX ISD, PSFG, 5.600% due 8/15/15 1,280,475
2,000,000 AAA Montgomery County, TX COP, Series A, MBIA-Insured,
5.000% due 3/1/18 1,897,500
North Central, TX Health Development Corp. Revenue,
(Zale Lipshy University Project), FSA-Insured:
9,820,000 AAA 5.450% due 4/1/15 9,709,525
4,175,000 AAA 5.450% due 4/1/19 4,070,625
Nueces River, TX Water Supply Facilities, (Corpus Christi Lake
Project), FSA-Insured:
1,545,000 AAA 5.250% due 7/15/17 1,529,550
3,630,000 AAA 5.500% due 3/1/27 3,616,388
1,025,000 AAA Port Arthur, TX GO, MBIA-Insured, 5.500% due 2/15/16 1,036,531
700,000 A-1+ Sabine River, TX PCR, Texas Utilities Electric Co.,
Series B, 3.450% due 3/1/26 (c)(d) 700,000
4,585,000 AA San Antonio, TX GO, Series A, 5.000% due 8/1/16 4,367,213
7,460,000 Aaa* Socorro, TX ISD, PSFG, 5.125% due 2/15/27 7,031,050
Texas State Public Finance Authority, Building Revenue,
AMBAC-Insured:
2,650,000 AAA 5.000% due 8/1/13 2,563,875
2,800,000 AAA 5.000% due 8/1/14 2,688,000
2,960,000 AAA 5.000% due 8/1/15 2,823,100
42,050,000 AAA Texas State Turnpike Authority Revenue, George Bush Turnpike,
FGIC-Insured, 5.250% due 1/1/23 40,525,688
Texas State Water Development GO:
5,000,000 AA 5.000% due 8/1/19 4,687,500
3,435,000 AA 5.250% due 8/1/28 3,323,363
Tyler, TX Health Facilities Development Corp., (East Texas
Medical Center Project):
FSA-Insured:
Series B:
2,000,000 AAA 5.500% due 11/1/17 2,007,500
4,000,000 AAA 5.600% due 11/1/27 4,000,000
3,250,000 AAA Series C, 5.500% due 11/1/17 3,262,188
1,600,000 AAA MBIA-Insured, Series A, 5.500% due 11/1/17 1,606,000
2,500,000 AAA Victoria, TX Utility Systems Revenue, Series A, MBIA-Insured,
5.000% due 12/1/21 2,334,375
- -----------------------------------------------------------------------------------------------------------------------------------
495,675,403
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 21
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Utah -- 3.6%
Intermountain Power Agency, UT Power Supply Revenue:
$ 15,335,000 Aa* Series A, 5.000% due 7/1/23 $ 13,878,175
Series D:
106,795,000 A+ 5.000% due 7/1/21 99,719,831
11,000,000 A+ 5.000% due 7/1/23 10,092,500
- -----------------------------------------------------------------------------------------------------------------------------------
123,690,506
- -----------------------------------------------------------------------------------------------------------------------------------
Virginia -- 4.8%
Arlington County, VA IDA Multi-Family Housing Revenue:
705,000 A 6.300% due 7/1/16 743,775
750,000 A 6.350% due 7/1/20 791,250
1,000,000 A 6.375% due 7/1/25 1,056,250
Chesapeake Bay, VA Bridge & Tunnel Commission District Revenue,
General Resolution, MBIA-Insured:
2,000,000 AAA 5.250% due 7/1/19 1,945,000
5,025,000 AAA 5.000% due 7/1/22 4,704,656
4,000,000 AAA Hanover County, VA Water & Sewer Systems,
MBIA-Insured, 5.250% due 2/1/26 3,900,000
Harrisonburg, VA Redevelopment & Housing Authority,
Multi-Family Housing Revenue, (Battery Heights Project),
Series A, GNMA-Collateralized:
1,425,000 AAA 6.100% due 4/20/16 1,492,687
2,715,000 AAA 6.150% due 4/20/26 2,840,569
500,000 AAA Lynchburg, VA Redevelopment & Housing Authority Revenue,
Waldon Pond, Series A, GNMA-Collateralized,
6.200% due 7/20/27 525,625
2,160,000 AA Norfolk, VA Redevelopment & Housing Authority, Educational
Facilities Revenue, Tidewater Community College Campus,
5.875% due 11/1/15 2,257,200
Northern Virginia Transit District Commuter Rail Revenue,
(Virginia Railway Express Project), MBIA-Insured:
1,245,000 AAA 5.150% due 7/1/12 1,249,669
1,000,000 AAA 5.200% due 7/1/13 1,003,750
7,000,000 AAA 5.400% due 7/1/17 7,026,250
200,000 AAA Peninsula, VA Port Authority, PCR, (Shell Oil Project),
3.350% due 12/1/05 (d) 200,000
14,035,000 AAA Riverside, VA Regulatory Jail Authority Facility Revenue,
MBIA-Insured, 5.875% due 7/1/14 14,666,575
2,130,000 AAA Roanoke, VA Redevelopment & Housing Authority Revenue,
Series A, Westwind III, GNMA-Collateralized,
6.200% due 7/20/26 2,204,550
4,695,000 AAA Southeastern Virginia Public Service Authority Revenue,
Series A, MBIA-Insured, 5.125% due 7/1/13 4,589,363
5,000,000 AAA Spotsylvania County, VA Water & Sewer Revenue, MBIA-Insured,
5.250% due 6/1/22 4,856,250
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1997 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Virginia -- 4.8% (continued)
Upper Occoquan, VA Sewer Authority, Sewer Revenue:
$ 5,000,000 AAA FGIC-Insured, 5.000% due 7/1/21 $ 4,712,500
MBIA-Insured:
34,175,000 AAA 5.000% due 7/1/25 32,081,781
56,955,000 AAA 4.750% due 7/1/29 50,689,950
2,000,000 AAA Virginia Beach, VA Water & Sewer Revenue,
MBIA-Insured, 5.125% due 2/1/19 1,922,500
Virginia State Housing Development Authority, Commonwealth
Mortgage Revenue:
1,225,000 AAA Series D-2, MBIA-Insured, 5.650% due 1/1/13 1,270,938
Series D-4:
1,330,000 AA+ 6.100% due 1/1/11 1,393,175
1,365,000 AA+ 6.100% due 7/1/11 1,429,838
1,400,000 AA+ 6.125% due 1/1/12 1,470,000
1,440,000 AA+ 6.125% due 7/1/12 1,512,000
1,485,000 AA+ 6.150% due 1/1/13 1,555,538
1,525,000 AA+ 6.150% due 7/1/13 1,597,438
1,565,000 AA+ 6.200% due 1/1/14 1,639,338
1,615,000 AA+ 6.200% due 7/1/14 1,691,713
4,345,000 AA Virginia State Transportation Board, Transportation Contract Revenue,
Series A, 5.125% due 5/15/21 4,160,338
- -----------------------------------------------------------------------------------------------------------------------------------
163,180,466
- -----------------------------------------------------------------------------------------------------------------------------------
Washington -- 4.2%
Chelan County, WA Public Utility District 1, MBIA-Insured:
22,685,000 AAA Zero coupon due 6/1/14 9,159,069
22,685,000 AAA Zero coupon due 6/1/17 7,684,544
10,000,000 AAA Zero coupon due 6/1/18 3,150,000
11,340,000 AAA Zero coupon due 6/1/19 3,373,650
11,540,000 AAA Zero coupon due 6/1/25 2,423,400
22,685,000 AAA Zero coupon due 6/1/26 4,451,930
21,985,000 AAA Zero coupon due 6/1/28 3,847,375
22,300,000 AAA Zero coupon due 6/1/29 3,679,500
59,935,000 AA+ Washington State GO, Series E, 5.000% due 7/1/22 56,039,225
Washington State Public Power Supply Project Revenue, Series B:
24,000,000 Aa1* 5.500% due 7/1/17 (g) 23,010,000
29,220,000 Aa1* 5.500% due 7/1/18 27,978,150
- -----------------------------------------------------------------------------------------------------------------------------------
144,796,843
- -----------------------------------------------------------------------------------------------------------------------------------
West Virginia -- 0.7%
Marion County, WV County Commissioner, Solid Waste Disposal
Facilities Revenue:
4,000,000 NR American Fiber Resource Project, Series B,
9.250% due 12/1/11 (c)(e) 2,000,000
40,000,000 NR American Power Paper Recycling Project,
7.750% due 12/1/11 (c)(e) 20,000,000
800,000 A-1+ Marshall County, WV Bayer Corp., 3.100% due 3/1/09 (d) 800,000
- -----------------------------------------------------------------------------------------------------------------------------------
22,800,000
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 23
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Schedule of Investments (unaudited)(continued) August 31, 1997
===================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
===================================================================================================================================
<S> <C> <C> <C>
Wisconsin -- 0.7%
Southeast Wisconsin Professional Baseball Park, District Sales
Tax Revenue, MBIA-Insured:
$ 1,500,000 AAA Zero coupon due 12/15/24 $ 322,500
1,500,000 AAA Zero coupon due 15/15/25 303,750
3,500,000 AAA Zero coupon due 12/15/27 634,375
3,500,000 AAA Zero coupon due 12/15/28 599,375
4,500,000 AAA Zero coupon due 12/15/29 731,250
1,325,000 Aaa* Winneconne, WI Community School District GO, FGIC-Insured,
6.750% due 4/1/16 1,455,843
2,000,000 AA Wisconsin Housing & Economic Development Authority,
Home Ownership Revenue, Series A, 6.450% due 3/1/17 2,107,500
5,000,000 AAA Wisconsin Public Power Inc., Power Supply System Revenue,
Series A, MBIA-Insured, 5.750% due 7/1/23 5,037,500
Wisconsin State Health & Education Authority, Aurora
Health Care, MBIA-Insured:
6,500,000 AAA 5.625% due 2/15/17 6,556,874
7,150,000 AAA 5.250% due 8/15/23 6,801,437
- -----------------------------------------------------------------------------------------------------------------------------------
24,550,404
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $3,348,548,724**) $3,418,262,122
===================================================================================================================================
</TABLE>
(a) Security segregated by Custodian for open purchase commitments.
(b) Pre-Refunded bonds escrowed by U.S. government securities and bonds
escrowed to maturity with U.S. government securities are considered by the
manager to be triple-A rated even if issuer has not applied for new
ratings.
(c) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(d) Variable rate obligation payable at par on demand at any time on no more
than seven days notice.
(e) Security is in default.
(f) Security partially segregated by Custodian for open purchase commitments.
(g) Security serves as collateral for futures contracts.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 25 and 26 for definitions of ratings and certain security
descriptions.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 1997 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Bond Ratings
================================================================================
All ratings are by Standard & Poor's Ratings Service ("Standard & Poor's"),
except those identified by an asterisk (*) are rated by Moody's Investors
Service Inc. ("Moody's"). The definitions of the applicable rating symbols are
set forth below:
Standard & Poor's -- Rating from "AA" to "B" 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.
BB -- Bonds rated "BB" have less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties
or exposure to adverse business, financial, or economic conditions
which could lead to inadequate capacity to meet timely interest and
principal payments. The "BB" rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied
"BBB-" rating.
B -- Bonds rated "B" have a greater vulnerability to default but currently
have the capacity to meet interest payments and principal payments.
Adverse business, financial, or economic conditions will likely impair
capacity or willingness to pay interest and repay principal. The "B"
category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BB" or "BB-" rating.
Moody's -- Numerical modifiers 1, 2 and 3 may be applied to each generic rating
from "Aa" to "B," 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.
Ba -- Bonds that are rated "Ba" are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate and thereby not
well safeguarded during both good and bad time over the future.
Uncertainty of position characterizes bonds in this class.
B -- Bonds that are rated "B" generally lack characteristics of desirable
investments. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
NR -- Indicates that the bond is not rated by Standard & Poor's or Moody's.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 25
<PAGE>
================================================================================
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.
VMIG1 -- 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
PSFG -- Permanent School Fund Guaranty
RAN -- Revenue Anticipation Notes
RIBS -- Residual Interest Bonds
RITES -- Residual Interest Tax-Exempt Securities
SYCC -- Structured Yield Curve Certificate
TAN -- Tax Anticipation Notes
TECP -- Tax Exempt Commercial Paper
TOB -- Tender Option Bonds
TRAN -- Tax and Revenue Anticipation Notes
VA -- Veterans Administration
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
- --------------------------------------------------------------------------------
26 1997 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Statement of Assets and Liabilities (unaudited) August 31, 1997
===================================================================================================================================
<S> <C>
ASSETS:
Investments, at value (Cost $3,348,548,724) $3,418,262,122
Cash 1,191,598
Receivable for securities sold 22,031,314
Receivable for Fund shares sold 6,230,079
Interest receivable 44,151,473
Receivable from broker-variation margin 54,688
Other receivables 400,000
- -----------------------------------------------------------------------------------------------------------------------------------
Total Assets 3,492,321,274
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 188,528,242
Dividends payable 14,746,870
Investment advisory fees payable 891,487
Administration fees payable 491,258
Distribution fees payable 285,377
Accrued expenses 130,887
- -----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 205,074,121
- -----------------------------------------------------------------------------------------------------------------------------------
Total Net Assets $3,287,247,153
===================================================================================================================================
NET ASSETS:
Par value of capital shares $ 2,058,456
Capital paid in excess of par value 3,160,148,966
Overdistributed net investment income (11,754,004)
Accumulated net realized gain from security transactions and futures contracts 66,061,149
Net unrealized appreciation of investments and futures contracts 70,732,586
- -----------------------------------------------------------------------------------------------------------------------------------
Total Net Assets $3,287,247,153
===================================================================================================================================
Shares Outstanding:
Class A 135,998,288
------------------------------------------------------------------------------------------------------------------------------
Class B 63,076,735
------------------------------------------------------------------------------------------------------------------------------
Class C 6,106,627
------------------------------------------------------------------------------------------------------------------------------
Class Y 663,931
------------------------------------------------------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $15.97
------------------------------------------------------------------------------------------------------------------------------
Class B * $15.96
------------------------------------------------------------------------------------------------------------------------------
Class C ** $15.96
------------------------------------------------------------------------------------------------------------------------------
Class Y (and redemption price) $15.96
------------------------------------------------------------------------------------------------------------------------------
Class A Maximum Public Offering Price Per Share
(net asset value plus 4.17% of net value per share) $16.64
===================================================================================================================================
</TABLE>
* Redemption price is NAV of Class B shares reduced by a 4.50% CDSC if shares
are redeemed within 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.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 27
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
Statement of Operations (unaudited) For the Six Months Ended August 31, 1997
===================================================================================================================================
<S> <C>
INVESTMENT INCOME:
Interest $ 93,494,023
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Distribution fees (Note 3) 4,985,405
Investment advisory fees (Note 3) 4,858,690
Administration fees (Note 3) 2,715,424
Shareholder and system servicing fees 417,637
Registration fees 261,435
Custody 75,243
Shareholder communications 46,992
Audit and legal 45,841
Directors' fees 27,886
Pricing service fees 24,690
Other 25,689
- -----------------------------------------------------------------------------------------------------------------------------------
Total Expenses 13,484,932
- -----------------------------------------------------------------------------------------------------------------------------------
Net Investment Income 80,009,091
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FUTURES CONTRACTS (NOTES 4 AND 5):
Realized Gain From:
Security transactions (excluding short-term securities) 33,644,861
Futures contracts 722,312
- -----------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain 34,367,173
- -----------------------------------------------------------------------------------------------------------------------------------
Net Change in Unrealized Appreciation of Investments
and Futures Contracts:
Beginning of period 24,523,840
End of period 70,732,586
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 46,208,746
- -----------------------------------------------------------------------------------------------------------------------------------
Net Gain on Investments and Futures Contracts 80,575,919
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $160,585,010
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
28 1997 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statements of Changes in Net Assets
====================================================================================================================================
For the Six Months Ended August 31, 1997 (unaudited)
and the Year Ended February 28, 1997
August 31 February 28
====================================================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 80,009,091 $ 151,392,297
Net realized gain 34,367,173 95,197,754
Increase (decrease) in net unrealized appreciation 46,208,746 (124,536,241)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 160,585,010 122,053,810
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 2):
Net investment income (86,317,354) (156,838,038)
Net realized gains -- (67,763,497)
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (86,317,354) (224,601,535)
- ------------------------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 389,413,881 650,661,760
Net asset value of shares issued for reinvestment of dividends 43,752,410 144,411,936
Cost of shares reacquired (203,703,496) (377,121,395)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 229,462,795 417,952,301
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets 303,730,451 315,404,576
NET ASSETS:
Beginning of period 2,983,516,702 2,668,112,126
- ------------------------------------------------------------------------------------------------------------------------------------
End of period* $3,287,247,153 $2,983,516,702
====================================================================================================================================
* Includes overdistributed net investment income of: $ (11,754,004) $ (5,445,741)
====================================================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 29
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)
================================================================================
1. Significant Accounting Policies
Smith Barney Managed Municipals Fund Inc. ("Fund"), a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company.
The significant accounting policies consistently followed by the Fund are: (a)
security 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) securities maturing within 60 days are
valued at cost plus accreted discount, or minus amortized premium, which
approximates 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 premium and accretion of original issue discount, 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 each class; investment
advisory fees and general Fund expenses are allocated on the basis of relative
net assets of each class; (h) the character of income and gains to be
distributed are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. At February 28, 1997,
reclassifications were made to the Fund's capital accounts to reflect permanent
book/tax differences and income and gains available for distributions under
income tax regulations. Net investment income, net realized gains and net assets
were not affected by this change; (i) the Fund intends to comply with the
applicable provisions of the Internal Revenue Code of 1986, as amended,
pertaining to regulated investment companies and to make distributions of
taxable income sufficient to relieve it from substantially all Federal income
and excise taxes; and (j) 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.
2. Exempt-Interest Dividends and Other Distributions
The Fund intends to satisfy requirements that allow 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. If necessary, additional taxable
distributions may be made to avoid a Federal excise tax.
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.
- --------------------------------------------------------------------------------
30 1997 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
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 six months ended August 31, 1997, SB received approximately
$34,000 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 thereafter by
1.00% per year until no CDSC is incurred. Class C shares have a 1.00% CDSC,
which applies if redemption occurs within the first year of purchase. For the
six months ended August 31, 1997, CDSCs paid to SB were approximately $30,000
for Class B shares.
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 six months ended August 31, 1997, total Distribution Plan fees incurred
were:
<TABLE>
<CAPTION>
Class A Class B Class C
================================================================================
<S> <C> <C> <C>
Distribution Plan Fees $1,568,737 $3,118,735 $297,933
================================================================================
</TABLE>
All officers and one Director of the Fund are employees of SB.
4. Investments
During the six months ended August 31, 1997, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
<TABLE>
================================================================================
<S> <C>
Purchases $2,090,250,658
- --------------------------------------------------------------------------------
Sales 1,839,638,788
================================================================================
</TABLE>
At August 31, 1997, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
<TABLE>
================================================================================
<S> <C>
Gross unrealized appreciation $160,247,802
Gross unrealized depreciation (90,534,404)
- --------------------------------------------------------------------------------
Net unrealized appreciation $ 69,713,398
================================================================================
</TABLE>
5. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. The initial margin is segregated by the custodian and is 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 transactions and the Fund's basis in the
contract.
The Fund enters into such contracts to hedge a portion of its portfolio. The
Fund bears the market risk that arises from changes in the value of the
financial instruments and securities indices (futures contracts) and the credit
risk should a counterparty fail to perform under such contracts.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 31
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
At August 31, 1997, the Fund had the following open futures contracts:
<TABLE>
<CAPTION>
Expiration # of Basis Market Unrealized
Month/Year Contracts Value Value Gain (Loss)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Futures contracts to buy:
Municipal Bond Index 9/97 650 $ 77,019,875 $ 77,675,000 $ 655,125
Municipal Bond Index 12/97 100 11,787,500 11,781,250 (6,250)
- ------------------------------------------------------------------------------------------------------------------------------------
88,807,375 89,456,250 648,875
- ------------------------------------------------------------------------------------------------------------------------------------
Futures contracts to sell:
U.S. Government Long Bond Index 9/97 750 85,214,063 84,843,750 370,313
- ------------------------------------------------------------------------------------------------------------------------------------
Total $1,019,188
====================================================================================================================================
</TABLE>
6. Capital Shares
At August 31, 1997, the Fund had one billion shares of capital stock authorized
with a par value of $0.01 per share. 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 August 31, 1997, 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 $2,044,920,220 $1,010,790,623 $96,166,130 $10,330,449
==================================================================================================================================
</TABLE>
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
August 31, 1997 February 28, 1997
------------------------------------ ------------------------------------
Shares Amount Shares Amount
====================================================================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 14,653,332 $ 229,881,381 21,634,495 $ 341,397,558
Shares issued on reinvestment 1,913,370 29,782,033 6,248,668 98,638,168
Shares redeemed (8,718,553) (137,031,153) (16,525,197) (260,972,303)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase 7,848,149 $ 122,632,261 11,357,966 $ 179,063,423
====================================================================================================================================
Class B
Shares sold 7,780,334 $ 121,563,160 15,844,694 $ 250,198,692
Shares issued on reinvestment 808,743 12,589,618 2,667,860 42,095,245
Shares redeemed (3,531,996) (55,202,463) (5,546,150) (87,632,838)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase 5,057,081 $ 78,950,315 12,966,404 $ 204,661,099
====================================================================================================================================
Class C
Shares sold 2,106,571 $ 32,953,715 3,427,266 $ 54,065,510
Shares issued on reinvestment 80,228 1,249,571 203,850 3,214,832
Shares redeemed (734,247) (11,469,880) (1,039,835) (16,368,197)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase 1,452,552 $ 22,733,406 2,591,281 $ 40,912,145
====================================================================================================================================
Class Y
Shares sold 312,500 $ 5,015,625 320,308 $ 5,000,000
Shares issued on reinvestment 8,523 131,188 29,359 463,691
Shares redeemed -- -- (766,895) (12,148,057)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 321,023 $ 5,146,813 (417,228) $ (6,684,366)
====================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
32 1997 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class A Shares 1997(1) 1997 1996 1995 1994(2) 1993
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $15.61 $16.20 $15.47 $16.13 $16.71 $15.62
- ----------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.42 0.88 0.91 0.95 0.90 1.00
Net realized and unrealized gain (loss) 0.39 (0.18) 0.80 (0.37) 0.30 1.64
- ----------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.81 0.70 1.71 0.58 1.20 2.64
- ----------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.45) (0.91) (0.90) (0.95) (0.88) (1.00)
Net realized gains -- (0.38) (0.08) (0.29) (0.90) (0.52)
Capital -- -- -- -- -- (0.03)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.45) (1.29) (0.98) (1.24) (1.78) (1.55)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $15.97 $15.61 $16.20 $15.47 $16.13 $16.71
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return 5.26%++ 4.51% 11.34% 4.11% 7.41% 17.92%
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $2,172 $2,000 $1,892 $1,772 $1,847 $1,795
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.68%+ 0.68% 0.70% 0.71% 0.72% 0.64%
Net investment income 5.26+ 5.60 5.47 6.25 5.43 6.30
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 58% 103% 80% 100% 131% 206%
==================================================================================================================================
</TABLE>
(1) For the six months ended August 31, 1997 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method, rather than the undistributed net investment income method, because
it more accurately reflects the per share data for the period.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 33
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class B Shares 1997(1) 1997 1996 1995 1994(2) 1993(3)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $15.60 $16.20 $15.47 $16.13 $16.71 $15.81
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.38 0.79 0.82 0.86 0.81 0.32
Net realized and unrealized gain (loss) 0.39 (0.18) 0.81 (0.37) 0.31 1.42
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.77 0.61 1.63 0.49 1.12 1.74
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.41) (0.83) (0.82) (0.86) (0.80) (0.31)
Net realized gains -- (0.38) (0.08) (0.29) (0.90) (0.52)
Capital -- -- -- -- -- (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.41) (1.21) (0.90) (1.15) (1.70) (0.84)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $15.96 $15.60 $16.20 $15.47 $16.13 $16.71
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 4.99%++ 3.92% 10.78% 3.54% 6.86% 11.26%++
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $1,007 $905 $730 $515 $350 $61
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.20%+ 1.19% 1.22% 1.23% 1.25% 1.24%+
Net investment income 4.74+ 5.09 4.94 5.73 4.90 5.70+
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 58% 103% 80% 100% 131% 206%
====================================================================================================================================
</TABLE>
(1) For the six months ended August 31, 1997 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method, rather than the undistributed net investment income method, because
it more accurately reflects the per share data for the period.
(3) For the period from November 6, 1992 (inception date) to February 28, 1993.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
34 1997 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class C Shares 1997(1) 1997 1996 1995(2)
===================================================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $15.60 $16.20 $15.47 $14.30
- -----------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.37 0.79 0.82 0.27
Net realized and unrealized gain (loss) 0.39 (0.18) 0.81 1.46*
- -----------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.76 0.61 1.63 1.73
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.40) (0.83) (0.82) (0.27)
Net realized gains -- (0.38) (0.08) (0.29)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.40) (1.21) (0.90) (0.56)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $15.96 $15.60 $16.20 $15.47
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return 4.97%++ 3.88% 10.76% 12.36%++
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $97,461 $72,597 $33,411 $5,395
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.25%+ 1.24% 1.27% 1.29%+
Net investment income 4.69+ 5.04 4.86 5.67+
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 58% 103% 80% 100%
===================================================================================================================================
</TABLE>
(1) For the six months ended August 31, 1997 (unaudited).
(2) For the period from November 9, 1994 (inception date) to February 28, 1995.
* The amount shown may not agree with the change in aggregate gains and
losses of portfolio securities due to the timing of sales and redemptions
of Fund shares.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 35
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class Y Shares 1997(1) 1997(2) 1996(3)
===================================================================================================================================
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $15.60 $16.20 $15.63
- -----------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.43 0.90 0.85
Net realized and unrealized gain (loss) 0.39 (0.18) 0.65
- -----------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.82 0.72 1.50
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.46) (0.94) (0.85)
Net realized gains -- (0.38) (0.08)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.46) (1.32) (0.93)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $15.96 $15.60 $16.20
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return 5.35%++ 4.59% 9.84%++
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $10,600 $5,350 $12,314
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.53%+ 0.52% 0.57%+
Net investment income 5.41+ 5.76 5.62+
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 58% 103% 80%
===================================================================================================================================
</TABLE>
(1) For the six months ended August 31, 1997 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method, rather than the undistributed net investment income method, because
it more accurately reflects the per share data for the period.
(3) 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.
- --------------------------------------------------------------------------------
36 1997 Semi-Annual Report to Shareholders
<PAGE>
Smith Barney
Managed Municipals
Fund Inc.
Directors Investment Adviser and Administrator
Herbert Barg Smith Barney Mutual Funds Management
Alfred J. Bianchetti Inc.
Martin Brody
Dwight B. Crane
Burt N. Dorsett Distributor
Elliot S. Jaffe Smith Barney Inc.
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon, Chairman
Cornelius C. Rose Custodian
PNC Bank, N.A.
James J. Crisona, Emeritus
Officers
Shareholder Servicing Agent
Heath B. McLendon First Data Investor Services Group, Inc.
Chief Executive Officer P.O. Box 9134
Boston, MA 02205-9134
Lewis E. Daidone
Senior Vice President and Treasurer This report is for the information of
shareholders of Smith Barney Managed
Joseph P. Deane Municipals Fund Inc., but it may also be
Vice President and Investment Officer used as sales literature when preceded
or accompanied by the current
David Fare prospectus, which gives details about
Vice President and Investment Officer charges, expenses, investment objectives
and operating policies of the Fund. If
Thomas M. Reynolds used as sales material after September
Controller 30, 1997, this report must be
accompanied by performance for the most
Christina T. Sydor recently completed calendar quarter.
Secretary
SMITH BARNEY
------------
A Member of TravelersGroup [LOGO]
Smith Barney
Managed Municipals Fund Inc.
Smith Barney Mutual Funds
388 Greenwich Street
New York, New York 10013
FD0435 10/97
