<PAGE>
[GRAPHIC]
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Smith Barney
Managed
Municipals
Fund Inc.
[GRAPHIC] ANNUAL REPORT
February 28, 1998
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.(SM)
<PAGE>
Smith Barney Managed
Municipals Fund Inc.
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================================================================================
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.
Average Annual Total Returns
February 28, 1998
<TABLE>
<CAPTION>
Without Sales Charges*
-------------------------------
Class A Class B Class C
================================================================================
<S> <C> <C> <C>
One-Year 12.30% 11.81% 11.69%
- --------------------------------------------------------------------------------
Five-Year 7.87 7.32 N/A
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Ten-Year 9.24 N/A N/A
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Since Inception+ 11.13 9.04 11.75
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<CAPTION>
With Sales Charges**
-------------------------------
Class A Class B Class C
================================================================================
<S> <C> <C> <C>
One-Year 7.81% 7.31% 10.69%
- --------------------------------------------------------------------------------
Five-Year 6.99 7.17 N/A
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Ten-Year 8.79 N/A N/A
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Since Inception+ 10.86 9.04 11.75
================================================================================
</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.
+ Inception dates for Class A, B and C shares are March 4, 1981, November 6,
1992 and November 9, 1994, respectively.
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FUND HIGHLIGHT
================================================================================
The bond market takes its ultimate cue from inflation and bonds experienced a
meaningful rally during the past twelve months. A positive inflation outlook
continues today and that should, in our view, provide a reasonable backdrop for
municipal bonds in the months ahead. And while municipal bonds have lagged a
little on the upside versus taxable bonds, the after-tax spread between
municipal and taxable bonds are very reasonable by historical standards. In our
opinion, the difference in spreads between municipal and taxable bonds should
make municipal bonds less vulnerable to any short-term rate increase if one
occurs.
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NASDAQ SYMBOL
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Class A SHMMX
Class B SMMBX
Class C SMMCX
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WHAT'S INSIDE
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Shareholder Letter ........................................................ 1
Historical Performance .................................................... 3
Smith Barney Managed Municipals Fund Inc.
at a Glance ............................................................... 5
Schedule of Investments ................................................... 6
Statement of Assets and Liabilities ....................................... 30
Statement of Operations ................................................... 31
Statements of Changes in Net Assets ....................................... 32
Notes to Financial Statements ............................................. 33
Financial Highlights ...................................................... 36
Independent Auditors' Report .............................................. 40
Tax Information ........................................................... 41
<PAGE>
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Shareholder Letter
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[PHOTO] [PHOTO]
Heath B. Joseph P.
McLendon Deane
Chairman Vice President and
Investment Officer
Dear Shareholder:
We are pleased to provide the annual report for the Smith Barney Managed
Municipals Fund Inc. ("Fund") for the year ended February 28, 1998. 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 one year ended February 28, 1998, the Fund had a total return of 12.30%,
11.81%, and 11.69% for its Class A, B and C shares, respectively. In comparison,
the Fund's Lipper Analytical Services, Inc. ("Lipper") peer group average posted
a total return of 9.12% for the same period. (Lipper is a major independent
fund-tracking organization.) Over the year covered by this report, the Fund
distributed income dividends totaling $0.79 for Class A shares; based on its net
asset value ("NAV") of $16.19 as of February 28, 1998, and the current monthly
income dividend of $0.068 for Class A shares, this equates to an annualized
distribution rate of 5.04%. For an individual in the Federal income tax bracket
of 36%, the tax free yield of 5.04% is equivalent to a taxable yield of 7.88%.
We are pleased to report that your Fund has been given a four-star rating
overall for its Class A and B shares from Morningstar, Inc.* as of February 28,
1998.
Municipal Bond Market Update
If there was one overriding trend in the bond market over the past year, it had
to be the benign inflation environment despite strong economic growth and a
relatively tight labor market. This is clearly the first time in my career as a
portfolio manager that inflation has stayed subdued in the face of both of these
events.
The bond market takes its ultimate cue from inflation and bonds experienced a
meaningful rally during the past twelve months. A positive inflation outlook
continues today and that should, in our view, provide a reasonable backdrop for
municipal bonds in the months ahead. And while municipal bonds have lagged a
little on the upside versus taxable bonds, the after-tax spread between
municipal and taxable bonds are very reasonable by historical standards. In our
opinion, the difference in spreads between municipal and taxable bonds should
make municipal bonds less vulnerable to any short-term rate increase if one
occurs.
Investment Strategy
As noted, 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's average weighted
maturity is approximately 21 years, but in every market
- ----------
* Morningstar, Inc. proprietary ratings reflect historical risk-adjusted
performance through February 28, 1998. The ratings are subject to change every
month. Past performance is not a guarantee of future results. Morningstar
ratings are calculated from the Fund's 3- and 5-year returns (with fee
adjustments) in excess of 90-day T-bill returns. For Class A and Class B shares,
the Fund received 4 stars for the overall, 3 stars for the 3-year period and 5
stars for the 5-year period. It was rated among 1,497 and 770 of municipal bond
funds for the 3- and 5-year periods, respectively. Ten percent of the funds in a
rating category receive five stars.
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Smith Barney Managed Municipals Fund Inc. 1
<PAGE>
downturn we have sought out coupons that would benefit from further drops in
rates. As of February 28, 1998, the Fund's average weighted maturity was 20.6
years versus approximately 24 years on February 28, 1997.
Our fundamental goal is to try and create portfolios that will provide
shareholders with the ability to participate in the upside of the municipal bond
market (when we think there's great potential), but we also exercise discipline
amidst euphoria when the market experiences a serious rally.
We believe that discipline over time produces attractive, long-term results and
those are the only ones we try to achieve. Recently, our discipline led us, in
early January (when the market was at its euphoric best), to sell some of our
largest and more aggressive holdings. We then waited a bit and redeployed those
assets in shorter maturity bonds that we think should prove to be rewarding. If
the municipal bond market continues to exude strength (and it likely will during
the first half of 1998), we will use ensuing market rallies to do more of the
same. In our view, while the backdrop for bonds today is excellent, rates are at
a historic low. Our philosophy therefore remains "to know when to hold 'em, and
know when to fold 'em."
Two characteristics of the Fund recently are its emphasis on extremely
high-grade securities and, in the last market rally, a shorter average life
since the middle of 1997.
In our view, there is much more value in the higher-rated issues today. Right
now, there is not enough extra yield associated with lesser-rated bonds to
justify the added risk, so our emphasis has been primarily on high-quality
issues. Credit spreads have collapsed between different bond ratings. You are
paid almost nothing extra today to buy higher-risk bonds and we do not think
that condition will change any time soon.
As of February 28, 1998, approximately 94% of the Fund's holdings were rated
investment-grade (BBB/Baa and higher) by either Standard & Poor's Ratings
Service ("Standard & Poor's") or Moody's Investors Service Inc. ("Moody's"),
with about 70% of the Fund invested in AAA bonds, the highest possible rating.
(Standard & Poor's and Moody's are two major credit-reporting and bond-rating
agencies.) The Fund's largest holdings are concentrated in transportation bonds
(15.2%), water & sewer bonds (13.9%) and hospital bonds (13.8%).
Municipal Bond Market Outlook
We anticipate that the municipal bond market over the next six months will be
rather benign, yet not filled with dramatic upside potential. However, we still
think there may be some upside potential in the market, especially if the
long-term U.S. government bond drifts down toward 5 1/2%.
We believe that you cannot just manage for yield alone, and that is why we
concentrate so much on total return. By making adjustments to a fund's average
maturity, you can try to lessen the impact of volatility or take advantage of
it. We think you are going to miss tremendous opportunities or make yourself
more vulnerable to losses when you do not manage for total return.
Over the long term, you need to generate high total returns in order to provide
shareholders with a substantial enough stream of overall distributions,
especially when interest rates are heading down. In order to succeed in today's
municipal bond market, in baseball terms, you need to hit singles and doubles
and not try to always hit home runs. We will, therefore, continue to apply our
best efforts on your behalf and provide you with what we believe is the best
investment vehicle possible consistent with our total-return philosophy. Thank
you for investing in the Smith Barney Managed Municipals Fund Inc.
Sincerely,
/s/ Heath B. Mclendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
March 23, 1998
- --------------------------------------------------------------------------------
2 1998 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Historical Performance -- Class A Shares
====================================================================================================================================
Net Asset Value
------------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
2/28/98 $15.61 $16.19 $0.79 $0.48 $0.00 12.30%
- ------------------------------------------------------------------------------------------------------------------------------------
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
====================================================================================================================================
Total $9.78 $2.81 $0.08
====================================================================================================================================
<CAPTION>
====================================================================================================================================
Historical Performance -- Class B Shares
====================================================================================================================================
Net Asset Value
------------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
2/28/98 $15.60 $16.19 $0.71 $0.48 $0.00 11.81%
- ------------------------------------------------------------------------------------------------------------------------------------
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
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Inception*--2/28/93 15.81 16.71 0.31 0.52 0.01 11.26+
====================================================================================================================================
Total $4.33 $2.65 $0.01
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<CAPTION>
====================================================================================================================================
Historical Performance -- Class C Shares
====================================================================================================================================
Net Asset Value
------------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
2/28/98 $15.60 $16.18 $0.70 $0.48 $0.00 11.69%
- ------------------------------------------------------------------------------------------------------------------------------------
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 $2.62 $1.23 $0.00
====================================================================================================================================
</TABLE>
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Smith Barney Managed Municipals Fund Inc. 3
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Historical Performance -- Class Y Shares
====================================================================================================================================
Net Asset Value
------------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
2/28/98 $15.60 $16.19 $0.82 $0.48 $0.00 12.56%
- ------------------------------------------------------------------------------------------------------------------------------------
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 $2.61 $0.94 $0.00
It is the Fund's policy to distribute dividends monthly and capital gains, if
any, annually.
<CAPTION>
====================================================================================================================================
Average Annual Total Return
====================================================================================================================================
Without Sales Charge(1)
---------------------------------------------------------------------------------
Class A Class B Class C Class Y
====================================================================================================================================
<S> <C> <C> <C> <C>
Year Ended 2/28/98 12.30% 11.81% 11.69% 12.56%
- ------------------------------------------------------------------------------------------------------------------------------------
Five Years Ended 2/28/98 7.87 7.32 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Ten Years Ended 2/28/98 9.24 N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Inception* through 2/28/98 11.13 9.04 11.75 9.25
====================================================================================================================================
<CAPTION>
With Sales Charge(2)
---------------------------------------------------------------------------------
Class A Class B Class C Class Y
====================================================================================================================================
<S> <C> <C> <C> <C>
Year Ended 2/28/98 7.81% 7.31% 10.69% 12.56%
- ------------------------------------------------------------------------------------------------------------------------------------
Five Years Ended 2/28/98 6.99 7.17 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Ten Years Ended 2/28/98 8.79 N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Inception* through 2/28/98 10.86 9.04 11.75 9.25
====================================================================================================================================
<CAPTION>
====================================================================================================================================
Cumulative Total Return
====================================================================================================================================
Without Sales Charge(1)
====================================================================================================================================
<S> <C>
Class A (2/29/88 through 2/28/98) 141.98%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B (Inception* through 2/28/98) 58.41
- ------------------------------------------------------------------------------------------------------------------------------------
Class C (Inception* through 2/28/98) 44.38
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Class Y (Inception* through 2/28/98) 29.33
====================================================================================================================================
</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.
- --------------------------------------------------------------------------------
4 1998 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+
- --------------------------------------------------------------------------------
February 1988 -- February 1998
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Smith Barney Lehman Bros. Lipper Peer
Managed Municipals Funds Inc. Municipal Bond Fund Index Group Average
----------------------------- ------------------------- -------------
<S> <C> <C> <C>
Feb. 1988 $ 9,598 $10,000 $10,000
Feb. 1989 10,300 10,622 10,692
Feb. 1990 11,205 11,712 11,636
Feb. 1991 12,061 12,793 12,578
Feb. 1992 13,484 14,070 13,885
Feb. 1993 15,900 16,008 15,818
Feb. 1994 17,074 16,894 16,654
Feb. 1995 17,774 17,212 16,762
Feb. 1996 19,790 19,114 18,414
Feb. 1997 20,682 20,167 19,238
Feb. 1998 23,226 22,011 20,981
</TABLE>
+ Hypothetical illustration of $10,000 invested in Class A shares on February
29, 1988, assuming deduction of the maximum 4.00% sales charge at the time of
investment and reinvestment of dividends and capital gains, if any, at net
asset value through February 28, 1998. 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 February 28, 1998. 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.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Top Ten States Represented*
- --------------------------------------------------------------------------------
<S> <C>
California 10.1%
Colorado 8.7%
Florida 5.7%
Massachusetts 6.9%
Michigan 6.5%
New York 6.2%
Ohio 3.7%
Texas 19.6%
Virginia 3.1%
Wisconsin 3.1%
</TABLE>
* As a percentage of total investments.
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Industry Breakdown
- --------------------------------------------------------------------------------
<S> <C>
Other Municipal Bonds 22.0%
Cogeneration Facility 3.6%
Education 7.0%
Hospitals 13.8%
Housing 1.7%
General Obligation 10.4%
Pollution Control 0.8%
Transportation 15.2%
Utilities 11.6%
Water & Sewer 13.9%
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 5
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Alabama -- 0.2%
$ 4,000,000 AAA Alabama Water Pollution Control Authority, Series A,
AMBAC-Insured, 4.750% due 8/15/21 $ 3,765,000
3,200,000 VMIG 1* Decatur, AL IDB, Solid Waste Disposal Revenue,
(Amoco Chemical Co. Project), 3.700% due 5/1/25 (a)(b) 3,200,000
- ------------------------------------------------------------------------------------------------------------------------------------
6,965,000
- ------------------------------------------------------------------------------------------------------------------------------------
Alaska -- 0.3%
Valdez, AK Marine Terminal Revenue, Series A:
8,500,000 AA British Petroleum Pipeline Project, 5.850% due 8/1/25 (c) 8,797,500
1,200,000 A-1+ Exxon Pipeline Co. Project, 3.650% due 12/1/33 (b) 1,200,000
- ------------------------------------------------------------------------------------------------------------------------------------
9,997,500
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona -- 0.9%
12,170,000 A Greenlee County, AZ IDA, PCR, (Phelps Dodge Corp. Project),
5.450% due 6/1/09 12,717,650
3,500,000 A Maricopa County, AZ IDA, Multi-Family Housing Revenue, Series A,
6.500% due 10/1/25 3,683,750
Maricopa County, AZ Pollution Control Corp., PCR,
(Arizona Public Service Co.):
8,900,000 A-1+ Series A, 3.650% due 5/1/29 (b) 8,900,000
1,050,000 A-1+ Series D, 3.550% due 5/1/29 (b) 1,050,000
1,750,000 AAA Pima County, AZ COP, MBIA-Insured, 5.250% due 1/1/12 1,800,313
3,500,000 AAA Pima County, AZ IDA, Healthpartners of Southern Arizona, Series A,
MBIA-Insured, 5.625% due 4/1/14 3,718,750
2,000,000 AAA Yavapi County, AZ IDA, Yavapi Regional Medical Center, Series A,
FSA-Insured, 5.125% due 12/1/13 2,032,500
- ------------------------------------------------------------------------------------------------------------------------------------
33,902,963
- ------------------------------------------------------------------------------------------------------------------------------------
California -- 10.1%
Alameda County, CA COP, (Refunding and Capital Projects),
AMBAC-Insured:
1,000,000 AAA 5.000% due 6/1/13 1,001,250
750,000 AAA 5.000% due 6/1/14 747,187
720,000 AAA 5.000% due 6/1/16 709,200
Anaheim, CA Public Finance Authority Lease
Revenue, (Public Improvement Project),
Series C, FSA-Insured:
8,000,000 AAA Zero coupon bond to yield 6.163% due 9/1/19 2,650,000
17,630,000 AAA Zero coupon bond to yield 5.650% due 9/1/20 5,553,450
15,865,000 AAA Zero coupon bond to yield 6.184% due 9/1/23 4,224,056
25,885,000 AAA Zero coupon bond to yield 6.189% due 9/1/24 6,535,962
5,000,000 AAA Zero coupon bond to yield 6.194% due 9/1/25 1,200,000
2,250,000 A* Apple Valley, CA Unified School District, COP, 5.900% due 9/1/11 2,356,875
1,200,000 A-1+ California Pollution Control Financing Authority, PCR,
(Shell Oil Co. Project), Series B, 3.550% due 10/1/11 (b) 1,200,000
9,250,000 AAA California State Department of Corrections, Board Lease Revenue,
Series A, AMBAC-Insured, 5.250% due 1/1/21 9,296,250
7,545,000 AAA California State Department of Transportation, Series A,
MBIA-Insured, 5.250% due 3/1/16 7,648,743
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
6 1998 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
California -- 10.1% (continued)
California State Department of Water Resources,
(Central Valley Project), Series O:
$12,160,000 AA 4.750% due 12/1/19 $11,628,000
2,000,000 AA 4.750% due 12/1/25 1,887,500
20,040,000 AAA MBIA-Insured, 4.750% due 12/1/29 18,787,500
5,000,000 AAA California State Health Facilities Finance Authority Revenue,
Cedars-Sinai Center, MBIA-Insured, 5.125% due 8/1/17 4,968,750
5,895,000 A California State Public Works Board, Lease Revenue,
Series C, 5.250% due 10/1/14 5,931,844
California Statewide Community Development Authority, COP,
(St. Joseph Health System):
5,000,000 AA 5.125% due 7/1/17 4,993,750
9,500,000 AA 5.250% due 7/1/21 9,523,750
3,000,000 AAA Campbell, CA Unified School District GO, FGIC-Insured,
5.000% due 8/1/17 2,962,500
7,000,000 AAA Chino, CA Unified School District COP, FSA-Insured,
6.125% due 9/1/26 7,603,750
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 5,637,500
15,215,000 AAA Corona, CA Redevelopment Agency, Series A,
FGIC-Insured, 5.500% due 9/1/24 15,671,450
3,775,000 AAA East Bay, CA Municipal Utility District, Water Systems Revenue,
FGIC-Insured, 5.000% due 6/1/26 3,685,344
5,000,000 AAA Fresno County, CA Financing Authority, Solid Waste Revenue,
(American Avenue Landfill Project), MBIA-Insured,
5.750% due 5/15/14 5,325,000 Long Beach,
CA, (Aquarium of the Pacific Project):
1,260,000 BBB 5.750% due 7/1/05 1,338,750
1,200,000 BBB 5.750% due 7/1/06 1,267,500
LosAngeles, CA Metropolitan Transportation
Authority, Sales Tax Revenue, Series A,
MBIA-Insured:
17,770,000 AAA 5.250% due 7/1/14 18,236,463
15,000,000 AAA 5.250% due 7/1/15 15,412,500
1,630,000 AAA Los Angeles, CA Public Works Finance Authority Lease Revenue,
MBIA-Insured, 5.250% due 9/1/13 1,680,938
2,780,000 AAA Los Angeles, CA Unified School District, COP, Series A,
FSA-Insured, 5.500% due 10/1/16 2,901,625
25,900,000 AA Los Angeles County, CA Public Works Financing Authority Revenue,
(Regional Park and Open Space District), Series A,
5.000% due 10/1/16 25,835,250
Metropolitan Water District, Southern California Waterworks Revenue:
8,185,000 AA Series A, 5.000% due 7/1/15 8,215,694
16,010,000 AAA Series B, MBIA-Insured, 4.750% due 7/1/21 15,189,488
</TABLE>
See Notes to Financial Statements.
- -------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 7
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
California -- 10.1% (continued)
$ 15,000,000 AAA Orange County, CA Recovery, COP, Series A, MBIA-Insured,
5.875% due 7/1/19 $ 16,218,750
1,240,000 A-1+ Orange County, CA Sanitation Districts, COP, 3.650% due 8/1/15 (b) 1,240,000
5,200,000 AAA Roseville, CA Water Utility Revenue, COP, FGIC-Insured, 5.200%
due 12/1/15 5,258,500
3,500,000 AAA Sacramento, CA Municipal Utility District, Electrical Revenue, Series L,
MBIA-Insured, 5.200% due 7/1/17 3,521,875
17,000,000 AAA Sacramento County, CA, COP, (Public Facilities Project), AMBAC-Insured,
4.750% due 10/1/27 15,980,000
12,400,000 AAA San Diego, CA Public Facility Financing Authority, Sewer Revenue,
FGIC-Insured, 5.000% due 5/15/25 12,090,000
San Diego County, CA COP, Northern County Regional
Expansion Revenue, AMBAC-Insured:
5,500,000 AAA 5.250% due 11/15/14 5,665,000
4,000,000 AAA 5.000% due 10/1/17 3,950,000
2,420,000 AAA 5.250% due 11/15/19 2,441,175
San Diego County, CA Water Authority, Water Revenue, COP,
Series A:
2,250,000 AA- 4.750% due 5/1/14 2,193,750
3,500,000 AA- 4.750% due 5/1/15 3,368,750
46,755,000 AAA San Francisco, CA State Building Authority Lease Revenue,
AMBAC-Insured, 5.250% due 12/1/21 46,930,331
Santa Clara County, CA Finance Authority Lease Revenue,
AMBAC-Insured:
5,500,000 AAA 6.750% due 11/15/20 6,428,125
2,000,000 AAA 6.250% due 11/15/22 2,250,000
1,515,000 AAA Victorville, CA Multi-Family Revenue, Wimbledon Apartments,
Series A, GNMA-Collateralized, 6.150% due 4/20/16 1,607,794
- ------------------------------------------------------------------------------------------------------------------------------------
360,951,869
- ------------------------------------------------------------------------------------------------------------------------------------
Colorado -- 8.7%
Arapahoe County, CO Capital Improvement Transportation
Highway Revenue:
15,000,000 Baa3* Pre-Refunded-- Escrowed with U.S. government securities to
8/31/05 call @ 103, 7.000% due
8/31/26 (d) 18,000,000
Series A, MBIA-Insured:
10,350,000 AAA 5.000% due 9/1/21 10,078,312
56,550,000 AAA 4.750% due 9/1/23 53,086,312
4,580,000 AAA Boulder, Larimer & Weld Counties, CO Vrain Valley School District,
FGIC-Insured, 5.000% due 12/15/19 4,511,300
12,765,000 BBB+ Colorado Springs, CO Airport Revenue, Series A, 7.000% due
1/1/22 (a)(c) 13,977,675
Dawson Ridge, CO Metropolitan District No. 1, (Escrowed to
Maturity with U.S. government securities):
364,000,000 Aaa* Series A, zero coupon bond to yield 6.644% due 10/1/22 100,100,000
27,785,000 Aaa* Series B, zero coupon bond to yield 6.820% due 10/1/22 (c) 7,640,875
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8 1998 Annual Report to Shareholders.
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Colorado -- 8.7% (continued)
Denver, CO City & County Airport Revenue:
Series A:
$26,500,000 Baa1* 14.000% due 11/15/08 (a) $ 44,553,125
9,915,000 Baa1* 8.000% due 11/15/25 (a) 11,055,225
3,585,000 Aaa* Pre-Refunded-- Escrowed with U.S. government securities to
11/15/01 Call @ 100, 8.000% due 11/15/25 (a) 4,042,087
Series C:
3,090,000 Baa1* 6.750% due 11/15/13 (a) 3,371,963
9,505,000 Baa1* 6.750% due 11/15/22 (a) 10,336,688
410,000 Aaa* Pre-Refunded-- Escrowed with U.S. government securities to
11/15/02 Call @ 102, 6.750% due 11/15/13 (a) 459,712
2,530,000 Aaa* Pre-Refunded-- Escrowed with U.S. government securities to
11/15/01 Call @ 100, 6.750% due 11/15/22 (a) 2,836,763
Series D:
17,760,000 Baa1* 7.000% due 11/15/25 (a) 19,136,400
4,665,000 Aaa* Pre-Refunded-- Escrowed with U.S. government securities to
11/15/01 Call @ 100, 7.000% due 11/15/25 (a) 5,102,344
E-470 Public Highway Authority, Colorado Revenue, Series A,
MBIA-Insured:
1,120,000 AAA 5.000% due 9/1/15 1,113,000
2,600,000 AAA 5.000% due 9/1/16 2,574,000
- ------------------------------------------------------------------------------------------------------------------------------------
311,975,781
- ------------------------------------------------------------------------------------------------------------------------------------
Connecticut -- 0.4%
1,080,000 AAA Connecticut State Health & Educational Facilities Authority Revenue,
William H. Backus Hospital, AMBAC-Insured, 5.625% due 7/1/17 1,134,000
Connecticut State Housing Finance Authority, Group Home Mortgage
Program, AMBAC-Insured:
500,000 AAA 5.600% due 6/15/17 516,250
1,000,000 AAA 5.625% due 6/15/27 1,037,500
Mashantucket Western Pequot Tribe, Connecticut Special Revenue,
Sub-144A, Series B:
1,000,000 NR 5.550% due 9/1/08 (e) 1,048,750
2,000,000 NR 5.700% due 9/1/12 (e) 2,107,500
6,500,000 NR 5.750% due 9/1/18 (e) 6,760,000
- ------------------------------------------------------------------------------------------------------------------------------------
12,604,000
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware -- 0.1%
5,300,000 A-1+ Delaware State EDA, Solid Waste Disposal & Sewer Facilities,
(Geigy Corp. Project), Series A, 3.650% due 3/1/26 (a)(b) 5,300,000
- ------------------------------------------------------------------------------------------------------------------------------------
District of Columbia -- 0.6%
District of Columbia, The American University Education Revenue,
AMBAC-Insured:
3,000,000 AAA 5.250% due 1/1/16 3,022,500
19,765,000 AAA 5.125% due 1/1/27 19,221,463
- ------------------------------------------------------------------------------------------------------------------------------------
22,243,963
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 9
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Florida -- 5.7%
Boynton Beach, FL Multi-Family Housing Revenue,
Clipper Cove Apartments:
$ 750,000 A+ 6.350% due 7/1/16 $ 794,062
1,325,000 A+ 6.400% due 7/1/21 1,402,843
Broward County, FL GO, Public Improvement Revenue:
1,000,000 Aa2* 12.500% due 1/1/02 1,293,750
1,250,000 Aa2* 12.500% due 1/1/03 1,700,000
1,500,000 Aa2* 12.500% due 1/1/04 2,135,625
1,750,000 Aa2* 12.500% due 1/1/05 2,592,188
2,000,000 Aa2* 12.500% due 1/1/06 3,065,000
2,375,000 AAA Celebration, FL Community Development District, Series B,
MBIA-Insured, 5.500% due 5/1/19 2,455,156
Dade County, FL GO, MBIA-Insured:
4,740,000 AAA 5.125% due 10/1/21 4,751,850
4,000,000 AAA 5.125% due 10/1/26 3,950,000
9,300,000 A-1+ Dade County, FL IDA, Exempt Facilities Revenue,
Florida Power & Light Co., 3.650% due 6/1/21 (b) 9,300,000
41,270,000 AAA Dade County, FL Water and Sewer Revenue, FGIC-Insured,
5.250% due 10/1/21 41,837,463
1,000,000 AAA First Florida Governmental Financing Commission Revenue,
AMBAC-Insured, 5.750% due 7/1/16 1,062,500
3,400,000 AAA Florida State Correctional Privatization Commission COP, Youth
Detention Facility, Series C, AMBAC-Insured, 5.000% due 8/1/17 3,370,250
Florida State Turnpike Authority, Turnpike Revenue, Department of
Transportation, Series A, FGIC-Insured:
4,040,000 AAA 5.000% due 7/1/13 4,060,200
5,180,000 AAA 5.000% due 7/1/14 5,199,425
8,985,000 AAA 5.000% due 7/1/15 8,951,306
20,825,000 AAA 4.750% due 7/1/20 19,809,781
9,350,000 AA Gainesville, FL Utilities Systems Revenue, Series A,
5.200% due 10/1/22 9,361,688
6,715,000 AAA Halifax, FL Hospital Medical Center Revenue, Series A,
MBIA-Insured, 5.250% due 10/1/15 6,857,694
6,190,000 AAA Hillsborough County, FL Capital Improvement Program Revenue,
Series A, MBIA-Insured, 5.125% due 7/1/22 6,120,363
1,000,000 A-1+ Hillsborough County, FL IDA, PCR, (Tampa Electric Co.),
3.600% due 5/15/18 (b) 1,000,000
Martin County, FL IDA, Indiantown Cogeneration:
10,000,000 BBB- Project A, 7.875% due 12/15/25 (a)(c) 11,675,000
6,010,000 BBB- Project B, 8.050% due 12/15/25 (a) 7,076,775
5,000,000 AAA Orange County, FL Tourist Development Tax Revenue,
MBIA-Insured, 5.000% due 10/1/19 4,943,750
6,500,000 Aaa* Polk County, FL Utility Systems Revenue, Series A, FGIC-Insured,
5.250% due 10/1/17 6,630,000
Reedy Creek, FL Import District Utilities Revenue:
8,200,000 AAA Series C, AMBAC-Insured, 5.000% due 6/1/19 8,036,000
4,180,000 AAA Series 1, MBIA-Insured, 5.000% due 10/1/19 4,070,275
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1998 Annual Report to Shareholders.
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Florida -- 5.7% (continued)
Seminole County, FL School Board, COP, AMBAC-Insured, Series A:
$ 4,000,000 AAA 5.000% due 7/1/17 $ 3,945,000
4,425,000 AAA 5.000% due 7/1/19 4,364,156
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 (d) 3,213,000
3,000,000 NR 7.750% due 5/1/27 (d) 3,465,000
3,115,000 AAA Tampa-Hillsborough County, FL Expressway Authority Revenue,
AMBAC-Insured, 5.125% due 7/1/19 3,126,681
2,180,000 AAA Village Center, FL Community Development District, Recreational
Revenue, Series A, MBIA-Insured, 5.850% due 11/1/16 2,460,675
- ------------------------------------------------------------------------------------------------------------------------------------
204,077,456
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia -- 0.6%
20,300,000 AAA Atlanta, GA Water & Sewer Revenue, FGIC-Insured,
Second Lien, 5.250% due 1/1/27 20,376,125
580,000 AA- Brunswick, GA Housing Authority, Multi-Family Housing Revenue,
Cypress Mill, FHA-Insured, 9.750% due 8/1/26 638,725
- ------------------------------------------------------------------------------------------------------------------------------------
21,014,850
- ------------------------------------------------------------------------------------------------------------------------------------
Hawaii -- 0.1%
3,000,000 AAA Hawaii State GO, Series CP, FGIC-Insured, 5.000% due 10/1/17 2,996,250
- ------------------------------------------------------------------------------------------------------------------------------------
Illinois -- 2.2%
2,000,000 AAA Chicago, IL GO, Series 1993, FGIC-Insured, 5.375% due 1/1/13 2,057,500
12,500,000 AAA Chicago, IL O'Hare International Airport Revenue, Series C,
MBIA-Insured, 5.000% due 1/1/18 12,140,625
5,295,000 AAA Illinois Developmental Finance Authority, Hospital Revenue, Sisters of
St. Francis Health Service, MBIA-Insured, 5.375% due 11/1/27 5,321,475
Illinois Health Facilities Authority Revenue:
Edward Obligation Group, Series A, AMBAC-Insured:
2,000,000 AAA 5.250% due 2/15/17 2,005,000
3,000,000 AAA 5.250% due 2/15/27 2,951,250
Memorial Health Systems, MBIA-Insured:
6,680,000 Aaa* 5.250% due 10/1/18 6,663,300
3,000,000 Aaa* 5.250% due 10/1/27 2,970,000
500,000 Aaa* Rockford Health Systems, AMBAC-Insured,
5.100% due 8/15/11 506,250
Sherman Health Systems, AMBAC-Insured:
3,000,000 AAA 5.250% due 8/1/17 3,015,000
6,000,000 AAA 5.250% due 8/1/27 5,940,000
1,000,000 AAA Illinois Municipal Electric Agency Power Supply, FSA-Insured,
5.000% due 2/1/18 970,000
3,000,000 AAA Illinois State COP, Department of Central Management Services,
Public Aid Building, MBIA-Insured, 5.650% due 7/1/17 3,150,000
Illinois State GO, FGIC-Insured:
3,300,000 AAA 5.375% due 2/1/19 3,366,000
14,375,000 AAA 5.250% due 12/1/20 14,500,781
3,600,000 A-1+ Joliet, IL Regional Port District, Marine Terminal Revenue,
(Exxon Project), 3.650% due 10/1/24 (b) 3,600,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 11
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Illinois -- 2.2% (continued)
$ 4,800,000 A-1+ Southwestern, IL Development Authority, Environmental Improvement
Revenue, (Shell Oil Co., Wood River Project),
3.700% due 11/1/25 (a)(b) $ 4,800,000
2,000,000 AAA Springfield, IL GO, Series C, MBIA-Insured, 5.375% due 12/1/21 2,030,000
1,000,000 AAA University of Illinois Revenue Bonds, Auxiliary Facilities Systems,
MBIA-Insured, 5.375% due 10/1/13 1,028,750
- ------------------------------------------------------------------------------------------------------------------------------------
77,015,931
- ------------------------------------------------------------------------------------------------------------------------------------
Indiana -- 1.7%
5,975,000 AAA Avon, IN Community School Building Corp., First Mortgage,
AMBAC-Insured, 5.250% due 1/1/22 5,982,469
6,310,000 AAA Delaware County, IN Hospital Authority, Hospital Authority,
Cardinal Health Systems, AMBAC-Insured, 5.000% due 8/1/16 6,136,475
3,005,000 AAA Indiana Bond Bank, State Revenue, Guarantee-State Revolving
Fund, (Project A), 6.250% due 2/1/09 3,286,719
18,500,000 AAA Indiana Health Facilities Financing Authority Hospital Revenue:
Sisters of St. Francis Health, Series A, MBIA-Insured,
5.375% due 11/1/27 18,592,500
Riverview Hospital:
240,000 Baa1* 6.000% due 8/1/98 241,838
255,000 Baa1* 6.200% due 8/1/99 261,375
305,000 Baa1* 6.500% due 8/1/01 323,300
200,000 Baa1* 6.600% due 8/1/02 215,250
2,000,000 VMIG 1* Jasper County, IN PCR, Northern Independent Public Services,
Series C, 3.650% due 4/1/19 (b) 2,000,000
Mishawaka, IN School City, School Building Corp.:
2,000,000 A 5.500% due 7/15/15 2,055,000
3,000,000 A 5.300% due 7/15/18 2,988,750
Rockport, IN PCR:
2,235,000 A-1+ AEP Generating Co. Project, Series B, 3.650% due 7/1/25 (b) 2,235,000
15,000,000 AAA Michigan Power Co. Project, Series A, AMBAC-Insured,
6.550% due 6/1/25 16,425,000
- ------------------------------------------------------------------------------------------------------------------------------------
60,743,676
- ------------------------------------------------------------------------------------------------------------------------------------
Kansas -- 0.1%
3,550,000 A-1 Overland Park, KS Revenue, (General Motors Corp. Project),
3.650% due 11/1/01 (b) 3,550,000
- ------------------------------------------------------------------------------------------------------------------------------------
Louisiana -- 0.6%
St. Charles Parish, LA PCR, Shell Oil Co.:
Norco Project:
15,250,000 A-1+ 3.700% due 11/1/21 (a)(b) 15,250,000
2,500,000 AAA 3.700% due 9/1/23 (a)(b) 2,500,000
Series A:
1,700,000 A-1+ 3.700% due 10/1/22 (a)(b) 1,700,000
Series B:
400,000 A-1+ 3.600% due 10/1/22 (b) 400,000
- ------------------------------------------------------------------------------------------------------------------------------------
19,850,000
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1998 Annual Report to Shareholders.
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Maryland -- 0.9%
Baltimore, MD GO, Series A, FGIC-Insured:
$ 2,585,000 AAA 5.625% due 10/15/14 $ 2,762,718
2,745,000 AAA 5.750% due 10/15/15 2,954,306
1,165,000 AAA 5.750% due 10/15/16 1,249,463
2,000,000 AAA Baltimore, MD Mortgage Revenue, (Northbrooke Apartments
Project), GNMA-Collateralized, Series A, 6.350% due 1/20/21 2,150,000
1,375,000 AAA Charles County, MD Mortgage Revenue, (Holly Station Project),
Series A, FHA-Insured, 6.450% due 5/1/26 1,471,250
750,000 Aa2* Maryland State Community Development Administration, Department of
Housing & Community Development, Series C, 5.550% due 7/1/27 758,438
56,000,000 NR Maryland State Energy Financing Administration, Solid Waste
Disposal Revenue, (Hagerstown Project),
9.000% due 10/15/16 (a)(c)(f) 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 1,850,625
- ------------------------------------------------------------------------------------------------------------------------------------
30,556,800
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts -- 6.9%
2,200,000 AAA Holyoke, MA GO, Series A, FSA-Insured, 5.500% due 6/15/16 2,293,500
Massachusetts Bay Transportation Authority, Series B,
General Transportation System:
AMBAC-Insured:
20,380,000 AAA 5.375% due 3/1/20 20,813,075
12,790,000 AAA 5.375% due 3/1/25 13,029,812
FSA-Insured:
15,000,000 AAA 5.250% due 3/1/20 15,206,250
42,450,000 AAA 5.250% due 3/1/26 42,715,312
Massachusetts Municipal Wholesale Electric Co., Power Supply
System Revenue:
Series A, AMBAC-Insured:
11,900,000 AAA 5.000% due 7/1/14 11,766,125
2,950,000 AAA 5.000% due 7/1/17 2,883,625
9,435,000 AAA Series B, MBIA-Insured, 5.000% due 7/1/17 9,222,713
10,000,000 AAA Massachusetts State GO, Series C, AMBAC-Insured,
5.000% due 8/1/14 10,037,500
3,000,000 AAA Massachusetts State Health and Educational Facilities Authority Revenue,
New England Medical Center, MBIA-Insured, 3.100% due 7/1/13 2,756,250
9,500,000 AAA Massachusetts State Housing Finance Agency, Housing Development,
Series A, MBIA-Insured, 5.300% due 12/1/17 9,500,000
Massachusetts State Industrial Finance Agency Revenue:
31,700,000 NR Solid Waste Disposal Revenue, Massachusetts
Recycling Association, Series A, 9.000% due 8/1/16 (a)(f) 11,887,500
1,765,000 AAA Worcester Polytechnic Institute, MBIA-Insured, 5.125% due 9/1/12 1,804,713
5,000,000 AA Massachusetts State Special Obligation Revenue, Series A,
5.000% due 6/1/17 4,931,250
Massachusetts State Turnpike Authority, Metropolitan Highway
System Revenue, Series B, MBIA-Insured:
14,625,000 AAA 5.250% due 1/1/29 14,643,281
13,000,000 AAA 5.125% due 1/1/37 12,756,250
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 13
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Massachusetts -- 6.9% (continued)
Massachusetts State Water Resources Authority:
MBIA-Insured:
$ 9,000,000 AAA 4.000% due 12/1/18 $ 7,706,250
27,785,000 AAA 5.000% due 12/1/25 26,812,525
Series B:
3,000,000 A 5.500% due 3/1/17 3,078,750
9,635,000 AAA MBIA-Insured, 4.750% due 12/1/21 9,056,900
10,000,000 AAA Series C, MBIA-Insured, 5.250% due 12/1/20 10,075,000
3,000,000 AAA Series D, MBIA-Insured, 5.000% due 8/1/24 2,906,250
- ------------------------------------------------------------------------------------------------------------------------------------
245,882,831
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan -- 6.5%
20,000,000 AAA Detroit & Wayne Counties, MI Stadium Authority Revenue,
FGIC-Insured, 5.250% due 2/1/27 20,025,000
2,090,000 AAA Grand Valley, MI State University Revenue, MBIA-Insured,
5.250% due 10/1/17 2,126,575
2,140,000 AAA Ingham County, MI Building Authority, AMBAC-Insured,
5.000% due 11/1/16 2,094,525
3,000,000 AAA Lake Superior, MI State University Revenue,
MBIA-Insured, 5.000% due 11/15/12 2,996,250
1,200,000 AAA Leslie, MI Public Schools, Ingham & Jackson Counties GO,
FGIC-Insured, 5.000% due 5/1/18 1,182,000
22,625,000 AA+ Michigan Municipal Board Authority, PCR,
5.125% due 10/1/20 22,822,969
39,340,000 AAA Michigan Public Power Agency Revenue, (Belle River Project),
Series A, MBIA-Insured, 5.250% due 1/1/18 39,192,475
21,000,000 AA Michigan State Building Authority Revenue, Facilities Program,
Series II, 4.750% due 10/15/13 20,475,000
Michigan State Hospital Finance Authority Revenue:
43,610,000 AAA Detroit Medical Group, Series A, AMBAC-Insured,
5.250% due 8/15/27 43,282,925
Mercy Health Services, AMBAC-Insured:
2,250,000 AAA Series Q, 5.375% due 8/15/26 2,269,688
1,000,000 AAA Series R, 5.375% due 8/15/16 1,018,750
Michigan State Strategic Fund:
2,300,000 A-1 Limited Obligation Revenue, (Dow Chemical Co. Project),
3.650% due 2/1/09 (b) 2,300,000
4,000,000 P-1* PCR, (Consumers Power Project), 3.650% due 4/15/18 (b) 4,000,000
56,625,000 NR Midland County, MI Economic Development Corp., PCR
Bonds, Subordinated Limited Obligation, Series B,
9.500% due 7/23/09 (a) 62,853,750
3,000,000 AAA Northern Michigan University Revenue, MBIA-Insured,
5.125% due 12/1/20 2,992,500
1,300,000 AAA Rockford, MI Public Schools, GO, FGIC-Insured,
5.250% due 5/1/27 1,301,625 South Lyon,
MI Community Schools, FGIC-Insured:
1,000,000 AAA 5.125% due 5/1/16 1,001,250
1,495,000 AAA 5.125% due 5/1/20 1,485,656
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1998 Annual Report to Shareholders.
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Michigan -- 6.5% (continued)
$ 600,000 A-1+ University of MI Hospitals, University Revenues, Series A,
3.650% due 12/1/19 (b) $ 600,000
- ------------------------------------------------------------------------------------------------------------------------------------
234,020,938
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota -- 0.1%
5,000,000 AA+ North St. Paul, MN ISD 622, Series A,
5.125% due 2/1/20 5,006,250
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi -- 0.2%
3,500,000 VMIG 1* Jackson County, MS PCR, (Chevron U.S.A. Inc. Project),
3.600% due 12/1/16 (b) 3,500,000
2,000,000 VMIG 1* Mississippi Business Finance Corp., MS Solid Waste Disposal Revenue,
(Mississippi Power Co. Project), 3.750% due 7/1/25 (a)(b) 2,000,000
2,200,000 P-1* Perry County, MS PCR, (Leaf River Forest Project),
3.650% due 3/1/02 (b) 2,200,000
- ------------------------------------------------------------------------------------------------------------------------------------
7,700,000
- ------------------------------------------------------------------------------------------------------------------------------------
Missouri -- 1.1%
4,750,000 AAA Fenton, MO COP, (Capital Improvements Project), MBIA-Insured,
5.125% due 9/1/17 4,791,562
Kansas City, MO IDA Hospital Revenue, Research Health
Services System, MBIA-Insured:
800,000 VMIG 1* 3.650% due 4/15/15 (b) 800,000
1,000,000 VMIG 1* 3.650% due 10/15/15 (b) 1,000,000
25,235,000 AAA Kansas City, MO Municipal Assistance Corp., Series A,
MBIA-Insured, 5.000% due 4/15/20 24,793,388
Missouri State Environmental Import & Energy Resource Authority,
PCR, State Revolving Fund, Series E:
1,040,000 Aa1* 5.200% due 1/1/10 1,098,500
2,235,000 Aa1* 5.250% due 1/1/19 2,288,081
4,900,000 AAA St. Louis, MO Regional Convention & Sports Complex Authority,
AMBAC-Insured, 5.300% due 8/15/20 4,949,000
- ------------------------------------------------------------------------------------------------------------------------------------
39,720,531
- ------------------------------------------------------------------------------------------------------------------------------------
Montana -- 1.0%
3,500,000 NR Forsyth, MT PCR, (Pacificorp), 3.750% due 12/1/16 (b) 3,500,000
33,400,000 NR Montana State Board, Resource Recovery Revenue,
(Yellowstone Energy LP Project), 7.000% due 12/31/19 (a)(c) 33,525,250
- ------------------------------------------------------------------------------------------------------------------------------------
37,025,250
- ------------------------------------------------------------------------------------------------------------------------------------
Nebraska -- 0.4%
14,300,000 AAA Nebraska Public Power District Revenue, Series A,
Electric System Revenue, MBIA-Insured, 5.250% due 1/1/28 14,228,500
- ------------------------------------------------------------------------------------------------------------------------------------
New Jersey -- 0.9%
2,000,000 AAA Hamilton Township, Atlantic County, NJ Municipal Utilities Authority,
FGIC-Insured, 5.000% due 8/15/17 1,980,000
Monmouth County, NJ Improvement
Authority Revenue, AMBAC-Insured:
1,000,000 AAA 5.050% due 12/1/14 1,003,750
500,000 AAA 5.150% due 12/1/17 501,875
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 15
<PAGE>
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<CAPTION>
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AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
New Jersey -- 0.9% (continued)
$ 2,500,000 Aaa* New Jersey EDA Revenue, (Hillcrest Health Service Systems Project),
AMBAC-Insured, 5.375% due 1/1/16 $ 2,590,625
29,000,000 Aa3* New Jersey State Transportation Toll Road Fund Authority,
Transportation System, Series A, 4.750% due 6/15/16 27,912,500
- ------------------------------------------------------------------------------------------------------------------------------------
33,988,750
- ------------------------------------------------------------------------------------------------------------------------------------
New Mexico -- 0.1%
1,000,000 A-1+ Farmington, NM PCR, (Arizona Public Service Co.), Series B,
3.650% due 9/1/24 (b) 1,000,000
3,550,000 Aaa* Santa Fe, NM Single-Family Mortgage Revenue,
FNMA & GNMA-Collateralized, 6.300% due 11/1/28 (a) 3,745,250
- ------------------------------------------------------------------------------------------------------------------------------------
4,745,250
- ------------------------------------------------------------------------------------------------------------------------------------
New York -- 6.2%
1,710,000 AA Housing Corp. of New York Revenue, 5.500% due 11/1/20 1,720,687
1,100,000 AA Monroe County, NY Water Authority Revenue, 5.000% due 8/1/19 1,083,500
2,695,000 AAA New York City, NY Education Construction Fund Revenue,
AMBAC-Insured, 5.500% due 4/1/16 2,806,168
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 1,288,000
New York City, NY Municipal Water Financing Authority,
Water & Sewer Revenue:
11,950,000 AAA MBIA-Insured, 5.375% due 6/15/19 12,069,500
1,090,000 A2* Series A, 5.125% due 6/15/21 1,070,925
6,145,000 AAA Series A, AMBAC-Insured, 5.125% due 6/15/22 6,075,868
12,650,000 A-1+ Series G, FGIC-Insured, 3.650% due 6/15/24 (b) 12,650,000
2,250,000 AAA New York Metropolitan Transportation Authority, Dedicated Tax Fund,
Series A, MBIA-Insured, 5.250% due 4/1/26 2,252,812
3,200,000 A-1+ New York, NY GO, Subseries E5, 3.600% due 8/1/16 (b) 3,200,000
New York State Dormitory Authority:
City University:
6,000,000 AAA Series A, FGIC-Insured, 5.375% due 7/1/14 6,120,000
5,000,000 AAA Series 2, MBIA-Insured, 6.250% due 7/1/19 5,362,500
1,000,000 AAA Culinary Institute, MBIA-Insured, 5.000% due 7/1/17 983,750
Iona College, MBIA-Insured:
485,000 AAA 6.600% due 7/1/07 529,256
420,000 AAA 6.600% due 7/1/08 457,275
555,000 AAA 6.600% due 7/1/09 603,563
540,000 AAA 6.700% due 7/1/10 588,600
Mental Health Services Facilities Improvement, FSA-Insured:
9,000,000 AAA Series C, 5.125% due 8/15/17 8,955,000
Series D:
2,000,000 AAA 5.125% due 8/15/17 1,990,000
4,790,000 AAA 5.125% due 8/15/27 4,700,188
20,765,000 AAA Montefiore Medical Center, AMBAC-Insured, 5.250% due 2/1/15 20,972,650
5,750,000 AAA Mount Sinai School of Medicine, Series A, MBIA-Insured,
5.000% due 7/1/21 5,570,313
4,500,000 AAA Municipal Health Facilities, Series A, FSA-Insured,
5.500% due 5/15/24 4,635,000
5,160,000 A- State University Educational Facilities,
5.000% due 5/15/13 5,166,450
</TABLE>
See Notes to Financial Statements.
- -------------------------------------------------------------------------------
16 1998 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
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====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
New York -- 6.2% (continued)
$ 2,000,000 A New York State GO, 12.000% due 11/15/03 $ 2,772,500
New York State Local Government Assistance Corp., Series B,
MBIA-Insured:
10,320,000 AAA 4.750% due 4/1/14 10,049,100
12,090,000 AAA 4.750% due 4/1/15 11,712,188
28,500,000 AAA 4.875% due 4/1/20 27,288,750
New York State Medical Care Facilities, Financing Agency Revenue,
8,000,000 AAA FGIC-Insured, 5.250% due 2/15/19 7,990,000
2,825,000 AAA New York State Thruway Authority Revenue, Series B,
MBIA-Insured, 5.000% due 1/1/20 2,764,969
New York State Urban Development Corp. Revenue:
4,000,000 AAA AMBAC-Insured, 5.250% due 1/1/18 4,005,000
3,250,000 AAA FSA-Insured, 5.250% due 1/1/21 3,237,813
Port Authority of NY & NJ Special Obligation Revenue,
Versatile Structure:
4,500,000 A-1+ Obligation 3, 3.500% due 6/1/20 (b) 4,500,000
500,000 A-1+ Obligation 5, 3.500% due 8/1/24 (b) 500,000
Triborough Bridge & Tunnel Authority of New
York, General Purpose Revenue Bonds,
Series A:
10,000,000 Aa3* 5.200% due 1/1/20 10,000,000
22,350,000 Aa3* 5.000% due 1/1/24 21,567,750
1,100,000 AAA Troy City, NY Municipal Assistance Corp., Series A,
MBIA-Insured, 5.000% due 1/15/16
1,086,250 Yonkers, NY GO, FGIC-Insured:
1,125,000 AAA Series A, 5.000% due 9/1/14 1,115,156
2,000,000 AAA Series B, 5.000% due 9/1/17 1,972,500
- ------------------------------------------------------------------------------------------------------------------------------------
221,413,981
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina -- 1.6%
4,500,000 A* Carteret County, NC COP, (Elementary School Project),
6.500% due 2/1/07 4,871,250
1,000,000 AAA Centennial Authority, NC Hotel Tax Revenue, (Arena Project),
FSA-Insured, 5.125% due 9/1/15 1,010,000
1,750,000 AAA New Hanover County, NC COP, (New Hanover Project),
MBIA-Insured, 5.000% due 12/1/17 1,721,562
3,780,000 AA North Carolina Medical Care, Community Health Care Facilities
Revenue, (Carolina Medicorp Project), 5.125% due 5/1/16 3,746,925
North Carolina Municipal Power Agency, Catawaba Electric
Revenue, Series A:
16,755,000 AAA AMBAC-Insured, 5.375% due 1/1/20 17,027,269
MBIA-Insured:
8,860,000 AAA 5.125% due 1/1/15 8,937,525
18,850,000 AAA 5.125% due 1/1/17 19,014,938
- ------------------------------------------------------------------------------------------------------------------------------------
56,329,469
- ------------------------------------------------------------------------------------------------------------------------------------
North Dakota -- 0.1%
1,000,000 AAA Fargo, ND Water Revenue, MBIA-Insured, 5.125% due 1/1/14 1,006,250
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 17
<PAGE>
<TABLE>
<CAPTION>
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Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Ohio -- 3.7%
Akron, Bath and Copley, OH Joint Township,
Hospital Revenue Bonds, Akron General
Medical Center Project, AMBAC-Insured:
$14,630,000 AAA 5.375% due 1/1/17 $ 15,068,900
18,000,000 AAA 5.375% due 1/1/22 18,360,000
3,500,000 AA- Akron, OH GO, 5.000% due 12/1/18 3,443,125
8,375,000 AAA Akron, OH Economic Development, MBIA-Insured, 5.000% due 12/1/18 8,238,906
1,000,000 Aaa* Brecksville-Broadview Heights, OH City School District,
FGIC-Insured, 6.500% due 12/1/16 1,147,500
12,950,000 AAA Butler County, OH Transportation Improvement District, Series A,
FSA-Insured, 5.125% due 4/1/17 12,950,000
Clermont County, OH Hospital Facility Revenue,
Mercy Health Systems, Series B, AMBAC-Insured:
3,415,000 AAA 5.625% due 9/1/16 3,585,750
1,000,000 AAA 5.625% due 9/1/21 1,047,500
Cleveland, OH Waterworks Revenue, Refunding
& Improvement, First Mortgage, Series H,
MBIA-Insured:
1,000,000 AAA 5.625% due 1/1/13 1,058,750
1,000,000 AAA 5.700% due 1/1/14 1,061,250
Cuyahoga County, OH Hospital Revenue, Metrohealth System,
MBIA-Insured:
1,000,000 AAA 5.375% due 2/15/12 1,037,500
1,000,000 AAA 5.625% due 2/15/17 1,050,000
Series A:
5,180,000 AAA 5.500% due 2/15/12 5,549,075
5,050,000 AAA 5.125% due 2/15/13 5,087,875
6,680,000 AAA 5.125% due 2/15/15 6,688,350
3,025,000 AAA 5.125% due 2/15/16 3,032,562
4,890,000 AAA 5.125% due 2/15/17 4,890,000
13,935,000 AAA 5.250% due 2/15/19 14,004,675
3,000,000 AAA Cuyahoga County, OH Port Authority Revenue, Rock & Roll
Hall of Fame, AMBAC-Insured, 5.400% due 12/1/15 3,078,750
4,065,000 AAA Franklin County, OH Convention Facilities Authority, Tax & Lease Revenue
Anticipation Bonds, MBIA-Insured, 5.000% due 12/1/17 4,004,025
5,000,000 Aaa* Greater Cleveland Regional Transportation Authority, OH GO,
FGIC-Insured, 5.000% due 12/1/18 4,912,500
850,000 Aaa* Mount Vernon, OH Water System Improvement, AMBAC-Insured,
5.125% due 12/1/18 851,063
3,750,000 AAA North Canton, OH City School GO, FGIC-Insured, 5.000% due 12/1/19 3,665,625
100,000 A-1+ Ohio State Air Quality Development Authority Revenue,
Cincinnati Gas & Electric, Series B, 3.600% due 9/1/30 (b) 100,000
1,500,000 NR Ohio State Solid Waste Revenue, Republic Engineered Steels Inc.,
9.000% due 6/1/21 (a) 1,631,250
1,585,000 AAA Twinsburg, OH Local School District, FGIC-Insured,
5.900% due 12/1/21 1,709,819 University
of Akron, OH General Revenue,
AMBAC-Insured:
1,000,000 AAA 5.125% due 1/1/11 1,030,000
1,000,000 AAA 5.125% due 1/1/12 1,025,000
2,525,000 AAA 5.250% due 1/1/22 2,540,781
- ------------------------------------------------------------------------------------------------------------------------------------
131,850,531
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1998 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
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Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Oklahoma -- 0.1%
$ 1,975,000 AA Tulsa, OK Industrial Authority, Hospital Revenue,
St. John's Medical Center, 6.250% due 2/15/17 $ 2,128,063
1,000,000 AA- Woods County, OK IDA, Revenue Refunding, (Cargill Inc. Project),
6.250% due 10/1/14 1,093,750
- ------------------------------------------------------------------------------------------------------------------------------------
3,221,813
- ------------------------------------------------------------------------------------------------------------------------------------
Oregon -- 0.5%
Clackamas & Washington Counties, OR School District No. 003,
FGIC-Insured:
4,360,000 AAA 5.000% due 6/1/15 4,376,350
3,555,000 AAA 5.000% due 6/1/16 3,555,000
1,685,000 AAA 5.000% due 6/1/17 1,678,681
6,950,000 AA Oregon State GO, Series B,
6.375% due 8/1/24 7,592,875
- ------------------------------------------------------------------------------------------------------------------------------------
17,202,906
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania -- 3.0%
Allegheny County, PA Airport Revenue, Pittsburgh International
Airport, Series B, MBIA-Insured:
5,000,000 AAA 5.000% due 1/1/17 4,906,250
6,500,000 AAA 5.000% due 1/1/19 6,337,500
14,300,000 AAA Altoona, PA City Authority Water Revenue, FGIC-Insured,
5.000% due 11/1/19 14,174,875
3,500,000 A-1 Chester County, PA IDA, IDR, (General Motors Corp. Project),
3.600% due 8/1/01 (b) 3,500,000 Delaware
County, PA Interboro School District GO,
MBIA-Insured:
985,000 AAA 5.150% due 8/15/13 996,081
935,000 AAA 5.200% due 8/15/14 945,518
1,150,000 AAA 5.300% due 8/15/17 1,158,625
1,600,000 AAA 5.375% due 8/15/22 1,614,000
Fairview, PA School District GO, FGIC-Insured:
2,620,000 AAA 5.200% due 2/15/15 2,649,475
3,345,000 AAA 5.000% due 2/15/18 3,294,825
3,240,000 AAA Lewisburg, PA Area School District, MBIA-Insured,
5.125% due 3/15/18 3,231,900
Montgomery County, PA Higher Education & Health Authority
Revenue, Holy Redeemer Health, Series A:
6,000,000 AAA 5.250% due 10/1/17 6,037,500
2,000,000 AAA 5.250% due 10/1/27 1,995,000
Owen J. Roberts School District, Series A, MBIA-Insured:
1,515,000 AAA 5.200% due 5/15/12 1,560,450
1,570,000 AAA 5.250% due 5/15/13 1,619,062
1,670,000 AAA 5.300% due 5/15/14 1,718,013
Pennsylvania Economic Development Financing Authority
Revenue, (Northhampton Generating Project), Series C:
2,000,000 NR 6.875% due 1/1/11 (a) 2,075,000
12,000,000 NR 6.950% due 1/1/21 (a) 12,480,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 19
<PAGE>
<TABLE>
<CAPTION>
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Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Pennsylvania -- 3.0% (continued)
Pennsylvania State University:
Series A:
$ 3,430,000 AA- 5.000% due 8/15/15 $ 3,408,563
3,660,000 AA- 5.000% due 8/15/16 3,623,400
3,845,000 AA- 5.000% due 8/15/17 3,792,131
4,045,000 AA- 5.000% due 8/15/18 3,984,325
Series B:
1,035,000 AA- 5.000% due 8/15/15 1,019,475
1,090,000 AA- 5.000% due 8/15/16 1,076,375
Philadelphia, PA School District GO, Series B, AMBAC-Insured:
1,000,000 AAA 5.000% due 4/1/10 1,022,500
1,000,000 AAA 5.000% due 4/1/11 1,012,500
1,000,000 AAA 5.000% due 4/1/12 1,010,000
3,310,000 AAA 5.250% due 4/1/17 3,355,513
2,220,000 AAA 5.375% due 4/1/19 2,256,075
7,825,000 AAA Philadelphia, PA Water & Wastewater Revenue, Series A,
AMBAC-Insured, 5.000% due 8/1/14 7,805,438
3,100,000 AAA Scranton, PA School District GO, AMBAC-Insured,
5.000% due 4/1/17 3,045,750
- ------------------------------------------------------------------------------------------------------------------------------------
106,706,119
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina -- 2.2%
Beaufort County, SC Hospital Facilities Revenue, Beaufort County
Memorial Hospital, AMBAC-Insured:
5,330,000 AAA 5.000% due 12/1/12 5,310,012
2,000,000 AAA 5.000% due 12/1/17 1,967,500
3,600,000 A-1+ Berkeley County, SC Exempt Facility Industrial Revenue, (Amoco
Chemical Co. Project), 3.700% due 4/1/27 (a)(b) 3,600,000
2,625,000 AAA Berkeley County, SC School District COP, MBIA-Insured,
5.250% due 2/1/16 2,647,968
Citadel Military College, SC Revenue,
AMBAC-Insured:
3,000,000 AAA 5.125% due 4/1/15 3,007,500
3,115,000 AAA 5.125% due 4/1/17 3,115,000
Lexington County, SC Health Services
District Inc., Hospital Revenue,
Refunding & Improvement, FSA-Insured:
7,310,000 AAA 5.250% due 11/1/17 7,373,963
13,000,000 AAA 5.125% due 11/1/26 12,805,000
Piedmont Municipal Power Agency, SC Electric Revenue, Series A,
MBIA-Insured:
5,300,000 AAA 5.000% due 1/1/15 5,286,750
7,015,000 AAA 4.875% due 1/1/17 6,804,550
30,150,000 AAA 4.750% due 1/1/25 28,303,313
- ------------------------------------------------------------------------------------------------------------------------------------
80,221,556
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1998 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Tennessee -- 0.9%
Chattanooga, TN Health, Educational &
Housing Facility Board, Mortgage
Revenue, Red Bank Health Care,
FHA-Insured:
$ 30,000 A 11.250% due 2/1/00 $ 33,637
90,000 A 11.250% due 8/1/00 103,612
100,000 A 11.250% due 2/1/01 117,750
105,000 A 11.250% due 8/1/01 126,656
110,000 A 11.250% due 2/1/02 135,163
115,000 A 11.250% due 8/1/02 144,469
120,000 A 11.250% due 2/1/03 153,000
130,000 A 11.250% due 8/1/03 169,000
135,000 A 11.250% due 2/1/04 177,188
145,000 A 11.250% due 8/1/04 193,575
150,000 A 11.250% due 2/1/05 203,438
180,000 A 11.250% due 8/1/05 247,950
Hardeman County, TN Correctional Facilities Corp.:
1,200,000 NR 6.900% due 8/1/03 1,270,500
11,000,000 NR 7.750% due 8/1/17 12,361,250
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 2,537,500
1,500,000 AAA 5.250% due 8/1/14 1,528,125
5,000,000 AAA 5.300% due 8/1/15 5,100,000
7,755,000 Aaa* Tennessee State GO, Series B, 5.500% due 5/1/23 8,171,831
- ------------------------------------------------------------------------------------------------------------------------------------
32,774,644
- ------------------------------------------------------------------------------------------------------------------------------------
Texas -- 19.6%
7,335,000 Aaa* Arlington, TX ISD GO, PSFG, 4.750% due 2/15/22 6,913,237
Austin, TX Utility Systems Revenue, FSA-Insured:
5,160,000 AAA 5.125% due 11/15/16 5,166,450
3,500,000 AAA 5.125% due 11/15/17 3,504,375
Austin, TX Water, Sewer & Electric Authority Revenue Bonds:
50,590,000 A* 14.000% due 11/15/01 (g) 60,771,237
855,000 A* Pre-Refunded-- Escrowed with U.S. government securities to
5/15/99 Call @ 100, 14.000% due 11/15/01 (d) 916,987
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 (d) 1,100,400
2,330,000 AAA Beaumont, TX ISD, GO, PSFG, 4.750% due 2/15/17 2,248,450
9,870,000 AAA Bexar County, TX Health Facilities Development Corp. Revenue,
Baptist Health System, Series A, MBIA-Insured, 5.250% due 11/15/27 9,808,312
4,500,000 AAA Brazos County, TX Health Facility, Series B, MBIA-Insured,
5.375% due 1/1/28 4,539,375
Brazos River Authority, TX PCR, Texas Utilities Electric, MBIA-Insured:
20,000,000 A-1+ Series A, 3.650% due 2/1/32 (a)(b) 20,000,000
3,900,000 A-1+ Series C, 3.700% due 2/1/32 (a)(b) 3,900,000
300,000 P-1* Brazos River, TX Harbor Navigational District, Brazoria County
Revenue, BASF Corp., 3.700% due 4/1/32 (a)(b) 300,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 21
<PAGE>
<TABLE>
<CAPTION>
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Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Texas -- 19.6% (continued)
$ 1,300,000 A-1+ Brazos River Authority Revenue, Houston Lighting & Power Co.,
AMBAC-Insured, 3.650% due 11/1/18 (a)(b) $ 1,300,000
6,750,000 AAA Brownsville, TX Utilities Systems Revenue, AMBAC-Insured,
5.250% due 9/1/20 6,766,875
4,075,000 AAA Burkburnett, TX ISD, GO, PSFG, 5.000% due 2/15/18 3,993,500
Burleson, TX ISD, PSFG:
4,795,000 Aaa* 6.750% due 8/1/24 5,400,368
11,740,000 NR Pre-Refunded-- Escrowed with U.S. government securities to
8/1/06 Call @ 100, 6.750% due 8/1/24 (d) 13,750,475
1,570,000 AAA Carrollton, TX ISD, GO, PSFG, 5.000% due 2/15/19 1,540,562
Conroe, TX ISD, PSFG:
3,000,000 AAA Series A, 5.600% due 2/15/21 3,112,500
Series B:
1,000,000 AAA 5.450% due 2/15/15 1,032,500
1,075,000 AAA 5.450% due 2/15/16 1,109,937
Copperas Cove Island, TX ISD, PSFG Refunding:
1,960,000 AAA 5.600% due 2/1/13 2,045,750
2,035,000 AAA 5.600% due 2/1/14 2,113,856
Del Valle, TX ISD, GO, PSFG:
2,600,000 AAA 5.000% due 2/1/11 2,642,250
2,730,000 AAA 5.050% due 2/1/12 2,767,537
2,875,000 AAA 5.100% due 2/1/13 2,914,531
3,025,000 AAA 5.125% due 2/1/14 3,066,593
3,185,000 AAA 5.150% due 2/1/15 3,220,831
7,000,000 AAA 5.000% due 2/1/18 6,886,250
El Paso County, TX Community College District Revenue,
Series B, AMBAC-Insured:
1,720,000 AAA 5.125% due 4/1/12 1,730,750
1,000,000 AAA 5.125% due 4/1/15 1,001,250
1,545,000 AAA 5.125% due 4/1/19 1,537,275
3,000,000 AAA Elgin, TX ISD, GO, PSFG, 5.200% due 10/1/18 3,015,000
1,215,000 AAA Fort Bend County, TX Levee Improvement District No. 011,
MBIA-Insured, 5.875% due 3/1/13 1,292,456
Fort Worth, TX Higher Education Finance Corp., Higher Education
Revenue, (Texas Christian University Project):
2,690,000 AA- 4.875% due 3/15/12 2,673,187
2,825,000 AA- 4.875% due 3/15/13 2,789,687
3,000,000 AA- 5.000% due 3/15/17 2,943,750
2,000,000 AA- 5.000% due 3/15/20 1,955,000
2,800,000 AA Fort Worth, TX Water & Sewer Revenue, Refunding & Improvement,
5.000% due 2/15/18 2,761,500
Gulf Coast Waste Disposal Authority, TX, (Amoco Oil Co. Project),
4,600,000 A-1+ 3.700% due 8/1/23 (a)(b) 4,600,000
3,400,000 A-1+ 3.700% due 5/1/24 (a)(b) 3,400,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1998 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Texas -- 19.6% (continued)
Harris County, TX Industrial Development Corp.:
Exxon Project:
$ 1,700,000 A-1+ PCR, 3.700% due 8/15/27 (a)(b) $ 1,700,000
3,500,000 VMIG 1* Solid Waste Disposal Revenue, 3.600% due 4/1/33 (a)(b) 3,500,000
1,000,000 Aa3* IDR, Cargill Inc., 7.000% due 10/1/15 1,111,250
Harris County, TX Toll Road Revenue:
5,800,000 AA 5.100% due 8/15/15 5,836,250
12,155,000 AA 5.125% due 8/15/17 12,170,193
25,320,000 AA 5.000% due 8/15/21 24,750,300
23,820,000 AAA FGIC-Insured, 5.375% due 8/15/20 24,117,750
14,200,000 AAA MBIA-Insured, 5.125% due 8/15/17 14,129,000
8,520,000 AAA Houston, TX Airport System Revenue, FGIC-Insured,
5.125% due 7/1/22 8,520,000
Houston, TX Community College System Revenue:
MBIA-Insured:
1,705,000 AAA 5.600% due 4/15/14 1,792,381
3,295,000 AAA 5.650% due 4/15/15 3,463,869
Student Fee, AMBAC-Insured:
1,315,000 AAA 5.000% due 4/15/15 1,300,206
1,380,000 AAA 5.000% due 4/15/16 1,355,850
1,450,000 AAA 5.000% due 4/15/17 1,419,188
1,520,000 AAA 5.000% due 4/15/18 1,482,000
Houston, TX GO, Series A:
4,535,000 AA- 5.000% due 3/1/11 4,614,363
11,550,000 AA- 5.000% due 3/1/12 11,694,375
7,445,000 AA- 5.000% due 3/1/13 7,510,144
3,000,000 AA- 5.000% due 3/1/16 2,981,250
5,485,000 AA- 5.000% due 3/1/17 5,443,863
5,760,000 AA- 5.000% due 3/1/18 5,702,400
Houston, TX Water & Sewer Revenue, FGIC-Insured:
Series A:
6,095,000 AAA 5.250% due 12/1/21 6,171,188
25,195,000 AAA 5.250% due 12/1/22 25,352,469
29,000,000 AAA 5.250% due 12/1/25 29,145,000
13,895,000 AAA Series C, 5.250% due 12/1/22 13,981,844
9,615,000 AAA Series D, 5.000% due 12/1/18 9,446,738
Kilgore, TX ISD GO, PSFG:
525,000 Aaa* 5.400% due 2/15/14 542,063
400,000 Aaa* 5.375% due 2/15/15 411,000
La Porte, TX ISD GO, PSFG:
500,000 AAA 5.500% due 2/15/14 521,875
500,000 AAA 5.500% due 2/15/15 520,000
500,000 AAA 5.500% due 2/15/16 520,000
880,000 AAA 5.250% due 2/15/19 887,700
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 23
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Texas -- 19.6% (continued)
$ 1,260,000 AAA Leander, TX ISD, PSFG, 5.600% due 8/15/15 $ 1,287,922
1,600,000 AAA Lockhart, TX ISD, GO, PSFG, 5.000% due 8/1/22 1,554,000
Manor, TX ISD, GO, PSFG:
1,185,000 AAA 5.100% due 8/1/14 1,199,813
1,235,000 AAA 5.100% due 8/1/15 1,245,806
1,000,000 AAA 5.000% due 8/1/17 988,750
5,500,000 AAA Midland County, TX Hospital District Revenue, AMBAC-Insured,
5.375% due 6/1/16 5,582,500
2,000,000 AAA Montgomery County, TX COP, Series A, MBIA-Insured,
5.000% due 3/1/18 1,967,500
9,820,000 AAA North Central, TX Health Development Corp. Revenue,
(Zale Lipshy University Project), FSA-Insured,
5.450% due 4/1/15 10,065,500
3,630,000 AAA Nueces River, TX Water Supply Facilities, (Corpus Christi Lake
Project), FSA-Insured, 5.500% due 3/1/27 3,734,363
5,000,000 AAA Plano, TX Health Facilities Development Corporate Revenue, Texas Health
Resource Systems, Series C, MBIA-Insured, 5.250% due 2/15/26 4,993,750
1,025,000 AAA Port Arthur, TX GO, MBIA-Insured, 5.500% due 2/15/16 1,055,750
Port of Port Arthur, TX Navigational District, AMBAC-Insured:
3,290,000 AAA 4.875% due 3/1/17 3,224,200
2,460,000 AAA 4.875% due 3/1/19 2,376,975
Sabine River Authority, TX PCR, Texas Utilities Electric Co.:
9,400,000 A-1+ Series A, 3.750% due 4/1/30 (a)(b) 9,400,000
1,300,000 A-1+ Series B, 3.650% due 3/1/26 (a)(b) 1,300,000
Santa Fe, TX ISD GO, PSFG:
1,190,000 Aaa* 5.250% due 2/15/17 1,207,850
2,270,000 AAA 5.125% due 2/15/19 2,270,000
7,460,000 Aaa* Socorro, TX ISD, PSFG, 5.125% due 2/15/27 7,348,100
Stephenville, TX ISD, GO, PSFG:
1,125,000 AAA 5.000% due 2/15/14 1,130,625
1,570,000 AAA 5.000% due 2/15/15 1,571,963
1,735,000 AAA 5.000% due 2/15/17 1,726,325
18,000,000 AAA Tarrant County, TX Health Facilities Developmental Corp.,
TX Health Resources Systems, Series A, MBIA-Insured,
5.250% due 2/15/22 18,022,500
Texas State Public Financing Authority GO:
9,500,000 AA 5.000% due 10/1/12 9,595,000
5,000,000 AA 5.000% due 10/1/15 4,993,750
Texas State Public Finance Authority, Building Revenue,
AMBAC-Insured:
2,650,000 AAA 5.000% due 8/1/13 2,676,500
2,800,000 AAA 5.000% due 8/1/14 2,817,500
2,960,000 AAA 5.000% due 8/1/15 2,967,400
General Services Common Projects, Series A:
5,450,000 AAA 5.000% due 2/1/17 5,347,813
5,730,000 AAA 5.000% due 2/1/18 5,615,400
32,300,000 AAA Texas State Turnpike Authority Revenue, George Bush Turnpike,
FGIC-Insured, 5.250% due 1/1/23 32,340,375
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
23 1998 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Texas -- 19.6% (continued)
Texas State Water Development Board Revenue, State Revolving Fund,
Series B:
$ 3,000,000 AAA 5.000% due 7/15/14 $ 3,018,750
2,500,000 AAA 5.000% due 7/15/15 2,506,250
7,000,000 AAA 5.000% due 7/15/16 6,982,500
200,000 AAA 5.000% due 7/15/17 198,250
64,640,000 AAA 5.000% due 7/15/19 63,832,000
Texas State Water Development GO, Series D:
10,000,000 AA 5.000% due 8/1/16 9,912,500
6,000,000 AA 5.000% due 8/1/19 5,910,000
Tyler, TX Health Facilities Development Corp.,
(East Texas Medical Center Project):
1,350,000 AAA Series A, MBIA-Insured, 5.500% due 11/1/17 1,398,938
2,000,000 AAA Series B, FSA-Insured, 5.500% due 11/1/17 2,050,000
3,250,000 AAA Series C, FSA-Insured, 5.500% due 11/1/17 3,367,813
2,500,000 AAA Victoria, TX Utility Systems Revenue, Series A, MBIA-Insured,
5.000% due 12/1/21 2,450,000
Weatherford, TX ISD GO, PSFG:
3,295,000 Aaa* 5.000% due 2/15/13 3,319,713
3,000,000 Aaa* 5.000% due 2/15/15 3,007,500
- ------------------------------------------------------------------------------------------------------------------------------------
702,189,646
- ------------------------------------------------------------------------------------------------------------------------------------
Utah -- 2.6%
1,200,000 A-1+ Carbon County, UT PCR, (Pacificorp Projects),
3.650% due 11/1/24 (b) 1,200,000
93,295,000 A+ Intermountain Power Agency, UT Power Supply Revenue,
Series D, 5.000% due 7/1/21 90,962,625
- ------------------------------------------------------------------------------------------------------------------------------------
92,162,625
- ------------------------------------------------------------------------------------------------------------------------------------
Virginia -- 3.1%
Arlington County, VA IDA Multi-Family Housing Revenue:
705,000 A 6.300% due 7/1/16 759,637
750,000 A 6.350% due 7/1/20 808,125
1,000,000 A 6.375% due 7/1/25 1,078,750
Blue Ridge Regional Jail Authority, VA Regional Jail Facility Revenue,
MBIA-Insured:
1,600,000 AAA 5.000% due 12/1/11 1,634,000
750,000 AAA 5.000% due 12/1/12 750,000
1,200,000 AAA 5.000% due 12/1/13 1,194,000
1,750,000 AAA 5.200% due 12/1/17 1,756,562
1,000,000 AAA 5.200% due 12/1/21 1,002,500
Chesapeake Bay, VA Bridge & Tunnel
Commission District Revenue, General
Resolution, MBIA-Insured:
1,500,000 AAA 5.250% due 7/1/19 1,511,250
5,025,000 AAA 5.000% due 7/1/22 4,937,063
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 1,530,094
2,715,000 AAA 6.150% due 4/20/26 2,915,231
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 25
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
Virginia -- 3.1% (continued)
$ 500,000 AAA Lynchburg, VA Redevelopment & Housing Authority Revenue,
Waldon Pond, Series A, GNMA-Collateralized,
6.200% due 7/20/27 $ 538,125
2,160,000 AA Norfolk, VA Redevelopment & Housing Authority, Educational
Facilities Revenue, Tidewater Community College Campus,
5.875% due 11/1/15 2,324,700
Northern Virginia Transit District Commuter Rail Revenue,
(Virginia Railway Express Project), MBIA-Insured:
1,245,000 AAA 5.150% due 7/1/12 1,283,906
1,000,000 AAA 5.200% due 7/1/13 1,031,250
14,035,000 AAA Riverside, VA Regulatory Jail Authority Facility Revenue,
MBIA-Insured, 5.875% due 7/1/14 15,175,344
2,130,000 AAA Roanoke, VA Redevelopment & Housing Authority Revenue,
Series A, Westwind III, GNMA-Collateralized,
6.200% due 7/20/26 2,260,463
51,505,000 AAA Upper Occoquan, VA Sewer Authority, Sewer Revenue,
MBIA-Insured, 4.750% due 7/1/29 48,028,413
Virginia State Housing Development Authority, Commonwealth
Mortgage Revenue:
1,225,000 AAA Series D-2, MBIA-Insured, 5.650% due 1/1/13 1,300,031
Series D-4:
1,330,000 AA+ 6.100% due 1/1/11 1,424,763
1,365,000 AA+ 6.100% due 7/1/11 1,462,256
1,400,000 AA+ 6.125% due 1/1/12 1,501,500
1,440,000 AA+ 6.125% due 7/1/12 1,544,400
1,485,000 AA+ 6.150% due 1/1/13 1,590,806
1,525,000 AA+ 6.150% due 7/1/13 1,633,656
1,565,000 AA+ 6.200% due 1/1/14 1,676,506
1,615,000 AA+ 6.200% due 7/1/14 1,730,069
5,895,000 AA+ Virginia State Public School Authority, School Financing,
Series I, 5.125% due 8/1/16 5,924,475
- ------------------------------------------------------------------------------------------------------------------------------------
110,307,875
- ------------------------------------------------------------------------------------------------------------------------------------
Washington -- 1.7%
2,530,000 Aaa* Thurston County, WA GO, MBIA-Insured, 5.000% due 8/1/15 2,504,700
Washington State Public Power Supply Project Revenue,
Series B:
24,000,000 Aa1* 5.500% due 7/1/17 (h) 24,060,000
29,220,000 Aa1* 5.500% due 7/1/18 29,293,050
6,420,000 AAA Washington State Public Power Supply System,
Nuclear Project No. 2, Series A, FSA-Insured,
5.125% due 7/1/11 6,540,375
- ------------------------------------------------------------------------------------------------------------------------------------
62,398,125
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
26 1998 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Schedule of Investments (continued) February 28, 1998
====================================================================================================================================
FACE
AMOUNT RATINGS SECURITY VALUE
====================================================================================================================================
<S> <C> <C> <C>
West Virginia -- 0.7%
Marion County, WV County Commissioner,
Solid Waste Disposal Facilities Revenue,
Adirondak Recycling, Series A:
$18,100,696 NR 8.000% due 12/1/25 $ 18,100,696
2,529,723 NR 10.000% due 12/1/25 2,529,723
Ohio County, WV Board of Education, GO:
2,000,000 A+ 5.000% due 6/1/13 1,987,500
500,000 A+ 5.125% due 6/1/18 495,000
West Virginia University Revenues, (West
Virginia University Project), Student
Union, Series B, AMBAC-Insured:
1,755,000 AAA 5.000% due 5/1/17 1,715,512
1,915,000 AAA 5.000% due 5/1/18 1,869,519
- ------------------------------------------------------------------------------------------------------------------------------------
26,697,950
- ------------------------------------------------------------------------------------------------------------------------------------
Wisconsin -- 3.1%
1,325,000 Aaa* Winneconne, WI Community School District GO, FGIC-Insured,
6.750% due 4/1/16 1,485,657
2,000,000 AA Wisconsin Housing & EDA, Home Ownership Revenue, Series A,
6.450% due 3/1/17 2,145,000
Wisconsin State Health & Educational Facilities Authority,
Aurora Health Care, MBIA-Insured:
33,000,000 AAA 5.250% due 8/15/17 33,247,500
500,000 AAA 5.250% due 8/15/23 500,625
75,775,000 AAA 5.250% due 8/15/27 75,301,406
- ------------------------------------------------------------------------------------------------------------------------------------
112,680,188
- ------------------------------------------------------------------------------------------------------------------------------------
Wyoming -- 0.5%
6,000,000 A-1+ Subblette County, WY PCR, (Exxon Project), Series A,
3.750% due 7/1/17 (a)(b) 6,000,000
11,000,000 P-1* Unita County, WY PCR, (Chevron USA Inc. Project),
3.600% due 8/15/20 (b) 11,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
17,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost-- $3,428,941,597**) $3,580,228,017
====================================================================================================================================
</TABLE>
(a) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(b) Variable rate obligation payable at par on demand at any time on no more
than seven days notice.
(c) Security segregated by Custodian for open purchase commitments.
(d) Pre-Refunded bond escrowed with U.S. government securities and bond
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.
(e) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions that are exempt from
registration, generally to qualified institutional buyers.
(f) Security is in default.
(g) Security is partially segregated by Custodian for open purchase
commitments.
(h) Portion of the security serves as collateral for futures contracts.
** Aggregate cost for Federal income tax purposes is $3,429,240,418.
See pages 28 and 29 for definitions of ratings and certain security
descriptions.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc 27
<PAGE>
================================================================================
Bond Ratings (unaudited)
================================================================================
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.
- --------------------------------------------------------------------------------
28 1998 Annual Report to Shareholders
<PAGE>
================================================================================
Short Term Security Ratings (unaudited)
================================================================================
SP-1 -- Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined
to possess overwhelming safety characteristics are denoted with a
plus (+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate
demand obligation (VRDO) rating indicating that the degree of
safety regarding timely payment is either overwhelming or very
strong; those issues determined to possess overwhelming safety
characteristics are denoted with a plus (+) sign.
VMIG 1 -- Moody's highest rating for issues having a demand feature --
VRDO.
P-1 -- Moody's highest rating for commercial paper and for VRDO prior to
the advent of the VMIG 1 rating.
================================================================================
Security Descriptions (unaudited)
================================================================================
ABAG -- Association of Bay Area Governments
AIG -- American International Guaranty
AMBAC -- AMBAC Indemnity 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 Security
SYCC -- Structured Yield Curve Certificate
TAN -- Tax Anticipation Notes
TECP -- Tax Exempt Commercial Paper
TOB -- Tender Option Bonds
TRAN -- Tax and Revenue Anticipation Notes
VAN -- Veterans Administration
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 29
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Assets and Liabilities February 28, 1998
====================================================================================================================================
<S> <C>
ASSETS:
Investments, at value (Cost $3,428,941,597) $3,580,228,017
Receivable for securities sold 37,709,153
Receivable for Fund shares sold 18,407,937
Interest receivable 40,873,082
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets 3,677,218,189
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 36,489,464
Dividends payable 5,820,602
Payable for Fund shares redeemed 2,024,595
Investment advisory fees payable 867,050
Administration fees payable 495,457
Distribution fees payable 234,893
Payable to bank 145,187
Payable to broker-- variation margin 126,563
Accrued expenses 311,902
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 46,515,713
- ------------------------------------------------------------------------------------------------------------------------------------
Total Net Assets $3,630,702,476
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Par value of capital shares $ 2,242,240
Capital paid in excess of par value 3,456,172,398
Overdistributed net investment income (5,846,251)
Accumulated net realized gain from security transactions and futures contracts 25,816,450
Net unrealized appreciation of investments and futures contracts 152,317,639
- ------------------------------------------------------------------------------------------------------------------------------------
Total Net Assets $3,630,702,476
====================================================================================================================================
Shares Outstanding:
Class A 146,163,867
-------------------------------------------------------------------------------------------------------------------------------
Class B 69,491,736
-------------------------------------------------------------------------------------------------------------------------------
Class C 7,833,894
-------------------------------------------------------------------------------------------------------------------------------
Class Y 734,546
-------------------------------------------------------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $16.19
-------------------------------------------------------------------------------------------------------------------------------
Class B * $16.19
-------------------------------------------------------------------------------------------------------------------------------
Class C ** $16.18
-------------------------------------------------------------------------------------------------------------------------------
Class Y (and redemption price) $16.19
-------------------------------------------------------------------------------------------------------------------------------
Class A Maximum Public Offering Price Per Share
(net asset value plus 4.17% of net asset value per share) $16.87
====================================================================================================================================
</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 Note 3).
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
30 1998 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Statement of Operations For the Year Ended February 28, 1998
================================================================================
<S> <C>
INVESTMENT INCOME:
Interest $186,050,816
- --------------------------------------------------------------------------------
EXPENSES:
Distribution fees (Note 3) 10,467,272
Investment advisory fees (Note 3) 10,103,778
Administration fees (Note 3) 5,643,278
Shareholder and system servicing fees 872,041
Registration fees 485,087
Custody 180,782
Shareholder communications 164,992
Audit and legal 90,716
Directors' fees 56,488
Pricing service fees 48,990
Other 50,839
- --------------------------------------------------------------------------------
Total Expenses 28,164,263
- --------------------------------------------------------------------------------
Net Investment Income 157,886,553
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FUTURES CONTRACTS(NOTES 4 AND 5):
Realized Gain From:
Security transactions (excluding short-term securities) 93,413,902
Futures contracts 1,299,500
- --------------------------------------------------------------------------------
Net Realized Gain 94,713,402
- --------------------------------------------------------------------------------
Net Change in Unrealized Appreciation of Investments
and Futures Contracts:
Beginning of year 24,523,840
End of year 152,317,639
- --------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 127,793,799
- --------------------------------------------------------------------------------
Net Gain on Investments and Futures Contracts 222,507,201
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $380,393,754
================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 31
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Statement of Changes in Net Assets For the Years Ended February 28, 1998
====================================================================================================================================
1998 1997
====================================================================================================================================
OPERATIONS:
<S> <C> <C>
Net investment income $ 157,886,553 $ 151,392,297
Net realized gain 94,713,402 95,197,754
Increase (decrease) in net unrealized appreciation 127,793,799 (124,536,241)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 380,393,754 122,053,810
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 2):
Net investment income (158,287,063) (156,838,038)
Net realized gains (100,590,928) (67,763,497)
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (258,877,991) (224,601,535)
- ------------------------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 791,732,693 650,661,760
Net asset value of shares issued for reinvestment of dividends 166,707,545 144,411,936
Cost of shares reacquired (432,770,227) (377,121,395)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 525,670,011 417,952,301
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets 647,185,774 315,404,576
NET ASSETS:
Beginning of year 2,983,516,702 2,668,112,126
- ------------------------------------------------------------------------------------------------------------------------------------
End of year* $3,630,702,476 $2,983,516,702
====================================================================================================================================
* Includes overdistributed net investment income of: $(5,846,251) $(5,445,741)
====================================================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
32 1998 Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements
================================================================================
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
an 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, 1998,
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 adjustment; (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
Mutual Management Corp. ("MMC"), formerly known as Smith Barney Mutual Funds
Management Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"),
acts as investment adviser to the Fund. The Fund pays MMC 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.
MMC 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 Managed Municipals Fund Inc. 33
<PAGE>
================================================================================
Notes to Financial Statements (continued)
================================================================================
Smith Barney Inc. ("SB"), another subsidiary of SSBH, acts as distributor of
Fund shares. For the year ended February 28, 1998, SB received approximately
$5.2 million 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. In certain
cases, Class A shares also have a 1.00% CDSC, which applies if redemption occurs
within the first year of purchase. This CDSC only applies to those purchases of
Class A shares, which when combined with current holdings of Class A shares,
equal or exceed $500,000 in the aggregate. These purchases do not incur an
initial sales charge. For the year ended February 28, 1998, CDSCs paid to SB
were:
<TABLE>
<CAPTION>
Class A Class B Class C
================================================================================
<S> <C> <C> <C>
CDSCs $194,000 $1,275,000 $29,000
================================================================================
</TABLE>
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to its
Class A, B and C shares, calculated at an annual rate of 0.15% of the average
daily net assets for each respective class. In addition, the Fund pays a
distribution fee with respect to its Class B and C shares calculated at the
annual rate of 0.50% and 0.55%, of the average daily net assets of each class,
respectively.
For the year ended February 28, 1998, total Distribution Plan fees incurred
were:
<TABLE>
<CAPTION>
Class A Class B Class C
================================================================================
<S> <C> <C> <C>
Distribution Plan Fees $3,247,646 $6,535,992 $683,634
================================================================================
</TABLE>
All officers and one Director of the Fund are employees of SB.
4. Investments
During the year ended February 28, 1998, 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 $3,798,215,640
- --------------------------------------------------------------------------------
Sales 3,694,091,268
================================================================================
</TABLE>
At February 28, 1998, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
<TABLE>
================================================================================
<S> <C>
Gross unrealized appreciation $210,292,734
Gross unrealized depreciation (59,305,135)
- --------------------------------------------------------------------------------
Net unrealized appreciation $150,987,599
================================================================================
</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).
- --------------------------------------------------------------------------------
34 1998 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Notes to Financial Statements (continued)
====================================================================================================================================
At February 28, 1998, the Fund had the following open futures contracts:
Expiration # of Basis Market Unrealized
Month/Year Contracts Value Value Gain
====================================================================================================================================
Futures contracts to sell:
<S> <C> <C> <C> <C> <C>
Municipal Bond Index 3/98 750 $ 93,408,250 $ 92,390,624 $1,017,626
U.S. Government Long Bond Index 3/98 450 54,365,156 54,351,563 13,593
- ------------------------------------------------------------------------------------------------------------------------------------
Total $147,773,406 $146,742,187 $1,031,219
====================================================================================================================================
</TABLE>
6. Capital Shares
At February 28, 1998, 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 February 28, 1998, 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 $2,208,563,444 $1,114,327,796 $124,034,008 $11,489,390
====================================================================================================================================
</TABLE>
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
February 28, 1998 February 28, 1997
-------------------------------- ------------------------------------
Shares Amount Shares Amount
====================================================================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 29,486,209 $ 470,065,083 21,634,495 $ 341,397,558
Shares issued on reinvestment 6,901,333 109,832,919 6,248,668 98,638,168
Shares redeemed (18,373,814) (293,622,517) (16,525,197) (260,972,303)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase 18,013,728 $ 286,275,485 11,357,966 $ 179,063,423
====================================================================================================================================
Class B
Shares sold 15,027,839 $ 238,903,620 15,844,694 $ 250,198,692
Shares issued on reinvestment 3,169,741 50,431,107 2,667,860 42,095,245
Shares redeemed (6,725,498) (106,847,239) (5,546,150) (87,632,838)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase 11,472,082 $ 182,487,488 12,966,404 $ 204,661,099
====================================================================================================================================
Class C
Shares sold 4,455,449 $ 70,921,771 3,427,266 $ 54,065,510
Shares issued on reinvestment 353,026 5,622,820 203,850 3,214,832
Shares redeemed (1,628,656) (25,943,307) (1,039,835) (16,368,197)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase 3,179,819 $ 50,601,284 2,591,281 $ 40,912,145
====================================================================================================================================
Class Y
Shares sold 732,857 $ 11,842,219 320,308 $ 5,000,000
Shares issued on reinvestment 51,522 820,699 29,359 463,691
Shares redeemed (392,741) (6,357,164) (766,895) (12,148,057)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) 391,638 $ 6,305,754 (417,228) $ (6,684,366)
====================================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 35
<PAGE>
================================================================================
Financial Highlights
================================================================================
For a share of each class of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Class A Shares 1998 1997 1996 1995 1994(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $15.61 $16.20 $15.47 $16.13 $16.71
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.79 0.88 0.91 0.95 0.90
Net realized and unrealized gain (loss) 1.06 (0.18) 0.80 (0.37) 0.30
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 1.85 0.70 1.71 0.58 1.20
Less Distributions From:
Net investment income (0.79) (0.91) (0.90) (0.95) (0.88)
Net realized gains (0.48) (0.38) (0.08) (0.29) (0.90)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.27) (1.29) (0.98) (1.24) (1.78)
Net Asset Value, End of Year $16.19 $15.61 $16.20 $15.47 $16.13
Total Return 12.30% 4.51% 11.34% 4.11% 7.41%
Net Assets, End of Year (millions) $2,367 $2,000 $1,892 $1,772 $1,847
Ratios to Average Net Assets:
Expenses 0.68% 0.68% 0.70% 0.71% 0.72%
Net investment income 4.98 5.60 5.47 6.25 5.43
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 110% 103% 80% 100% 131%
====================================================================================================================================
</TABLE>
(1) 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.
- --------------------------------------------------------------------------------
36 1998 Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Class B Shares 1998 1997 1996 1995 1994(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $15.60 $16.20 $15.47 $16.13 $16.71
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.72 0.79 0.82 0.86 0.81
Net realized and unrealized gain (loss) 1.06 (0.18) 0.81 (0.37) 0.31
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 1.78 0.61 1.63 0.49 1.12
Less Distributions From:
Net investment income (0.71) (0.83) (0.82) (0.86) (0.80)
Net realized gains (0.48) (0.38) (0.08) (0.29) (0.90)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.19) (1.21) (0.90) (1.15) (1.70)
Net Asset Value, End of Year $16.19 $15.60 $16.20 $15.47 $16.13
Total Return 11.81% 3.92% 10.78% 3.54% 6.86%
Net Assets, End of Year (millions) $1,125 $905 $730 $515 $350
Ratios to Average Net Assets:
Expenses 1.20% 1.19% 1.22% 1.23% 1.25%
Net investment income 4.46 5.09 4.94 5.73 4.90
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 110% 103% 80% 100% 131%
====================================================================================================================================
</TABLE>
(1) 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.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 37
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Class C Shares 1998(1) 1997 1996 1995(2)
====================================================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $15.60 $16.20 $15.47 $14.30
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.70 0.79 0.82 0.27
Net realized and unrealized gain (loss) 1.06 (0.18) 0.81 1.46*
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 1.76 0.61 1.63 1.73
Less Distributions From:
Net investment income (0.70) (0.83) (0.82) (0.27)
Net realized gains (0.48) (0.38) (0.08) (0.29)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.18) (1.21) (0.90) (0.56)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $16.18 $15.60 $16.20 $15.47
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 11.69% 3.88% 10.76% 12.36%++
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $126,766 $72,597 $33,411 $5,395
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.25% 1.24% 1.27% 1.29%+
Net investment income 4.38 5.04 4.86 5.67+
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 110% 103% 80% 100%
====================================================================================================================================
</TABLE>
(1) 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.
(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.
- --------------------------------------------------------------------------------
38 1998 Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
Class Y Shares 1998(1) 1997(1) 1996(2)
====================================================================================================================================
<S> <C> <C> <C>
Net Asset Value, Beginning of Year $15.60 $16.20 $15.63
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.82 0.90 0.85
Net realized and unrealized gain (loss) 1.07 (0.18) 0.65
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income From Operations 1.89 0.72 1.50
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.82) (0.94) (0.85)
Net realized gains (0.48) (0.38) (0.08)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.30) (1.32) (0.93)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $16.19 $15.60 $16.20
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 12.56% 4.59% 9.84%++
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $11,893 $5,350 $12,314
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.52% 0.52% 0.57%+
Net investment income 5.06 5.76 5.62+
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 110% 103% 80%
====================================================================================================================================
</TABLE>
(1) 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.
(2) 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.
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 39
<PAGE>
================================================================================
Independent Auditors' Report
================================================================================
The Shareholders and Board of Directors of
the Smith Barney Managed Municipals Fund Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Smith Barney Managed Municipals Fund Inc. as of
February 28, 1998, the related statement of operations for the year then ended,
the statements of changes in net assets for each of the years in the two-year
period then ended and financial highlights for each of the years in the
three-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights for each of the years in the
two-year period ended February 28, 1995 were audited by other auditors whose
report thereon, dated April 10, 1995, expressed an unqualified opinion on those
financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
February 28, 1998, by correspondence with the custodian. As to securities
purchased or sold but not yet received or delivered, we performed other
appropriate auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Smith
Barney Managed Municipals Fund Inc. as of February 28, 1998, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended and financial highlights for each of
the years in the three-year period then ended, in conformity with generally
accepted accounting principles.
/s/ KPMG PEAT MARWICK LLP
New York, New York
April 20, 1998
- --------------------------------------------------------------------------------
40 1998 Annual Report to Shareholders
<PAGE>
================================================================================
Tax Information (unaudited)
================================================================================
For Federal tax purposes the Fund hereby designates for the fiscal year ended
February 28, 1998:
o 99.6% of the dividends paid by the Fund from net investment income as
tax exempt for regular Federal income tax purposes.
o The Taxpayer Relief Act of 1997 enacted differing rates of tax on
various long-term capital gain transactions. As a result, the Fund
designates:
o Total long-term capital gain distributions paid of $20,985,205.
$7,872,167 are considered "28 percent rate gains".
$13,113,038 are considered "20 percent rate gains".
- --------------------------------------------------------------------------------
Smith Barney Managed Municipals Fund Inc. 41
<PAGE>
Smith Barney
Managed Municipals
Fund Inc.
Directors Investment Adviser and Administrator
Herbert Barg Mutual Management Corp.
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane Distributor
Burt N. Dorsett Smith Barney Inc.
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann Custodian
Heath B. McLendon, Chairman PNC Bank, N.A.
Cornelius C. Rose
James J. Crisona, Emeritus Shareholder Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9134
Officers Boston, MA 02205-9134
Heath B. McLendon
President and Chief Executive Officer
Lewis E. Daidone This report is submitted for the general
Senior Vice President and Treasurer information of shareholders of Smith
Barney Managed Municipals Fund Inc. It
Joseph P. Deane is not for distribution to prospective
Vice President and Investment Officer investors unless accompanied by an
effective Prospectus for the Fund, which
David Fare contains information concerning the
Vice President and Investment Officer Fund's investment policies and expenses
as well as other pertinent information.
Thomas M. Reynolds
Controller
Christina T. Sydor SMITH BARNEY
Secretary ------------
A Member of TravelersGroup[LOGO]
Smith Barney Managed
Municipals Fund Inc.
Smith Barney Mutual Funds
388 Greenwich Street
New York, New York 10013
www.smithbarney.com
