SEMI-ANNUAL REPORT
Smith Barney
Municipal
Money Market
Fund, Inc.
-----------------------------------------------
September 30, 1997
[LOGO FOR SMITH BARNEY MUTUAL FUNDS]
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Smith Barney Municipal Money Market Fund, Inc.
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Dear Shareholder:
We are pleased to provide you with the semi-annual report for the Smith Barney
Municipal Money Market Fund, Inc. ("Fund") for the period ended September 30,
1997. In this report, we summarize the period's prevailing economic and market
conditions and outline our portfolio strategy. A detailed summary of the Fund's
performance can be found in the appropriate sections that follow.
Performance Update
As of September 30, 1997, the Fund's 7-day current yield was 3.36%. The Fund's
7-day effective yield -- which reflects compounding -- was 3.41%. This means
that an investor in the federal income tax bracket of 36% would have to earn a
5.33% taxable yield to match the tax-free income provided by the Fund.
(According to the Internal Revenue Service, approximately 10% of all U.S.
taxpayers fall into the 36% federal income tax bracket.)
While the Fund seeks to maintain a stable net asset value of $1.00 per share,
there can be no assurance this goal will be achieved. The U.S. government
neither insures nor guarantees an investment in the Fund.
Market and Economic Overview
The performance of the U.S. economy has been stellar. Gross Domestic Product
("GDP"), a key economic indicator that measures the total output of goods and
services in the U.S., has expanded at an annual rate of 4.1% for the first half
of 1997. The recently released third quarter 1997 GDP growth of 3.5% suggests
that the U.S. economy has continued its vigorous expansion. According to the
most recently released economic data, this economic growth has not come at the
expense of higher inflation. Consumer prices in August 1997 rose by only 0.2%.
Although producer prices did show a sizable increase in September 1997, so far
in 1997 there has been an overall decline. Moreover, the majority of the
increase in producer prices were one-time adjustments concentrated in a handful
of sectors.
What is of concern on the inflation front has been tightness in the labor
markets. In recent Congressional testimony, Federal Reserve Board ("Fed")
Chairman Alan Greenspan expressed concern that the U.S. economy may be
1
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on an "unsustainable track." With the current unemployment rate at 4.9%, the
available labor pool is strained and further employment growth could push wage
pressures higher. Many fixed income investors viewed Greenspan's testimony as
sobering notice that additional rate increases by the Fed may take place in the
coming months. The last rate increase took place in March 1997, when the Fed
increased the federal-funds rate 25 basis points (0.25%). (The federal-funds
rate is the interest rate banks charge each other for overnight loans and is an
indicator of the direction of interest rates.)
Tax-Exempt Money Market Overview
Over the past six months, variable rate demand obligations ("VRDOs") have
provided some of the most attractive rates on the municipal money market curve.
(VRDOs are demand instruments that usually have an indicated maturity of more
than one year, but contain a demand feature that enables the holder to redeem
the investment on no more than 30 days notice. These instruments provide for
automatic adjustment of new interest rates on set dates and are generally
supported by letters of credit issued by both domestic and foreign banks.)
The VRDO sector of the market has seen a substantial increase in supply, which
currently has outpaced demand in the marketplace. While this segment of the
market has provided the Fund with attractive yields as compared to tax-exempt
commercial paper and municipal notes, we expect the current imbalance to abate
as issuance slows and the growth in tax-exempt money market assets continues to
rise. During the reporting period, we thought the variable rate demand
obligation sector was more attractive than the municipal note sector and
increased our VRDO holdings. Yet we will monitor market conditions closely and
shift our emphasis back to municipal notes if that sector becomes more
attractive on a relative basis.
Investment Strategy
The Fund seeks to provide investors with income exempt from federal income tax
by investing in a portfolio of high-quality, short-term municipal obligations
selected for liquidity and stability of principal. Currently, the Fund's average
maturity is 55 days. Over the coming months, we will continue to monitor
economic data closely and assess its impact on inflation and how that relates to
tax-exempt money markets. As noted and if doing so seems prudent, we will look
to the fixed-rate municipal note market to extend the Fund's average maturity
slightly.
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On a more somber note, we were saddened by the loss of an outstanding physician
and Trustee of the Fund, Dr. Francis P. Martin. His knowledge and wisdom will be
missed.
In closing, thank you for investing in the Smith Barney Municipal Money Market
Fund, Inc. We look forward to continuing to help you pursue your financial
goals.
/s/ Heath B. McLendon /s/ Joseph Benevento
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Heath B. McLendon Joseph Benevento
Chairman Vice President
/s/ Lawrence T. McDermott
- -------------------------
Lawrence T. McDermott
Vice President
October 14, 1997
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<TABLE>
<CAPTION>
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Schedule of Investments (unaudited) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Alabama -- 1.2%
Birmingham Baptist Medical Center:
$11,405,000 VMIG 1* Special Care Facilities Finance Authority Revenue
(Senior Living Communities Inc. Project A) 4.10%(b) $ 11,405,000
5,415,000 VMIG 1* Medical Clinic Board (Western Medical Systems Project
Series A) 4.10%(b) 5,415,000
1,500,000 NR++ Cintronelle IDB PCR Refunding (Akzo Chemicals Inc.
Project) 4.15%(b) 1,500,000
1,000,000 NR++ Huntsville Madison County Airport Authority IDR
(Molex Project) 4.25%(a)(b) 1,000,000
1,000,000 NR++ Mobile County (M&T Chemicals Project)
Series 1984 4.17%(b) 1,000,000
Montgomery BMC Special Care Facilities Financing Authority
Revenue (VHA Alabama Inc. Cap) AMBAC-Insured:
3,175,000 A-1 Series C 4.15%(b) 3,175,000
4,000,000 A-1 Series D 4.15%(b) 4,000,000
9,000,000 A-1 Series F 4.15%(b) 9,000,000
5,500,000 P-1* Montgomery County IDR (Conn Fineblanking Corp. Project)
4.30%(a)(b) 5,500,000
Phenix County IDB Environmental Improvement Revenue
(Mead Coated Board Project) TECP:
8,100,000 P-1* 3.70% due 10/8/97(a) 8,100,000
4,000,000 P-1* 3.70% due 10/20/97(a) 4,000,000
13,000,000 A-1+ Tuscaloosa County IDA Solid Waste Disposal Revenue
(Tuscaloosa Steel Corp. Project) 4.20%(a)(b) 13,000,000
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67,095,000
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Alaska -- 0.4%
11,155,000 VMIG 1* Alaska State Housing Finance Corp. AMBAC-Insured
PART 4.15%(b) 11,155,000
11,000,000 SP-1+ Anchorage GO TAN 4.00% due 12/17/97 11,010,518
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22,165,518
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Arizona -- 2.9%
Apache County IDA Tucson Electric Power Co.:
15,000,000 A-1 PCR Series 81A 4.10%(b) 15,000,000
7,000,000 A-1+ PCR Series 83B 4.15%(b) 7,000,000
9,500,000 A-1+ Series 83A 4.10%(b) 9,500,000
10,150,000 A-1 Series 83C 4.15%(b) 10,150,000
22,800,000 VMIG 1* Arizona Education Loan Revenue Series A 4.05%(a)(b) 22,800,000
Maricopa County PCR (Southern California Edison) TECP:
2,300,000 A-1 Series D 3.65% due 10/10/97 2,300,000
10,950,000 A-1 Series F 3.80% due 10/7/97 10,950,000
7,500,000 A-1+ Mesa Muni Development Corp. TECP 3.65% due 10/6/97 7,500,000
</TABLE>
See Notes to Financial Statements.
4
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<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Arizona -- 2.9% (continued)
$ 7,100,000 VMIG 1* Phoenix Civic Improvement Corp. Revenue (Apartment
Improvements) 4.20%(a)(b) $ 7,100,000
9,500,000 VMIG 1* Phoenix GO Series 16A PART 4.20%(b) 9,500,000
Pima County IDA:
13,000,000 VMIG 1* Hospital Revenue (Casa Grande Regional Medical
Center) 4.15%(b) 13,000,000
Industrial Revenue Tucson Electric Power Project:
6,900,000 A-1+ 4.15%(b) 6,900,000
41,700,000 A-1+ Series A 4.10%(b) 41,700,000
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163,400,000
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Arkansas -- 1.7%
5,200,000 A-1+ Arkansas State Development Finance Authority Health
Care Facilities Revenue (Sisters of Mercy
Health Systems Inc.) Series B 4.05%(b) 5,200,000
2,650,000 NR++ Atkins IDR (Green Bay Foods Project) 4.25%(a)(b) 2,650,000
3,300,000 VMIG 1* Fayetteville IDR (Amcast Industrial Corp.) 4.15%(a)(b) 3,300,000
Little River County Solid Waste Disposal Revenue
Nekoosa Papers Project:
20,450,000 VMIG 1* 4.20%(a)(b) 20,450,000
35,000,000 P-1* Series A 4.20%(a)(b) 35,000,000
10,650,000 A-1+ Little Rock Health Facilities Board Hospital Revenue
(Southwest Hospital) FGIC-Insured 3.85%(b) 10,650,000
7,000,000 NR++ Pine Bluff IDR (Greenfield Inc. Project) 4.25%(a)(b) 7,000,000
6,000,000 NR++ Searcy IDR (Kohler Project) Series 88 4.25%(a)(b) 6,000,000
1,000,000 NR++ Sheridan IDR (Kohler Project) 4.15%(b) 1,000,000
3,550,000 A-1+ Warren Solid Waste Disposal Revenue (Potlatch Corp.
Project) 4.10%(a)(b) 3,550,000
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94,800,000
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California -- 3.2%
California Higher Education Loan Authority Inc. Revenue:
10,000,000 VMIG 1* Refunding Series A 3.95% due 5/1/98(c) 10,000,000
20,000,000 MIG 1* Refunding Series A-2 3.95% due 5/1/98(c) 20,000,000
7,000,000 A-1+ Series 87A 4.00% due 7/1/98(c) 7,000,737
25,500,000 A-1+ Series C 4.10%(a)(b) 25,500,000
54,500,000 SP-1+ California School Cash Reserve Program Authority
Pool-Series A 4.75% due 7/2/98 54,863,404
10,000,000 A-1 California State GO TECP 3.80% due 12/9/97 10,000,000
53,000,000 SP-1+ California State RAN Series A 4.50% due 6/30/98 53,255,312
2,200,000 VMIG 1* Irvine California Public Facilities and Infrastructure
Authority Lease Revenue (Capital Improvement
Project) 3.90%(b) 2,200,000
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182,819,453
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</TABLE>
See Notes to Financial Statements.
5
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<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Colorado -- 2.1%
Colorado HFA Revenue:
$ 6,600,000 NR++ Celestial Seasonings 4.50%(a)(b) $ 6,600,000
8,100,000 A-1+ Sisters of Charity Series B 4.05%(b) 8,100,000
3,700,000 NR++ Colorado Postsecondary EFA Revenue (Regis Jesuit
High School Project) 4.15%(b) 3,700,000
37,000,000 SP-1+ Colorado State General Fund Revenue TRAN Series A
4.50% due 6/26/98 37,174,477
Denver City & County Airport Revenue:
7,000,000 A-1+ MBIA-Insured PART 4.20%(b) 7,000,000
5,000,000 A-1+ Series B 4.15%(b) 5,000,000
20,000,000 A-1+ TECP Series A 3.85% due 12/17/97(a) 20,000,000
30,000,000 A-1+ TECP Series 97A 3.65% due 11/12/97(a) 30,000,000
4,000,000 NR++ Wheat Ridge IDR (Leaf Inc. Project) 4.25%(a)(b) 4,000,000
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121,574,477
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Connecticut -- 0.4%
Connecticut State:
13,560,000 VMIG 1* GO 4.15%(b) 13,560,000
10,000,000 A-1+ HFA 4.25%(a)(b) 10,000,000
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23,560,000
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Delaware -- 4.5%
Delaware State Economic Development Authority:
29,000,000 A-1+ IDA Star Enterprises Series B-1 4.10%(a)(b) 29,000,000
MBIA-Insured (Hospital Billing Collection Service):
72,350,000 A-1+ Series A 4.05%(b) 72,350,000
39,400,000 A-1+ Series B 4.05%(b) 39,400,000
71,900,000 A-1+ Series C 4.05%(b) 71,900,000
12,600,000 A-1+ Star Enterprises TECP 3.80% due 11/20/97(a) 12,600,000
10,775,000 A-1+ Delaware Valley Regional Finance Authority Revenue
AMBAC-Insured 3.80% due 12/4/97(c) 10,775,000
14,100,000 A-1+ Eagle Tax-Exempt PART (Delaware State Housing)
MBIA-Insured 3.80% due 3/1/98(c) 14,100,000
6,000,000 A-1 New Castle County Economic Development Revenue
Refunding (Henderson McGuire Project) 4.15%(b) 6,000,000
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256,125,000
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District of Columbia -- 0.1%
District of Columbia GO Refunding PART:
200,000 A-1+ Series A 4.15%(b) 200,000
5,120,000 VMIG 1* Series B-1 FGIC-Insured 4.35%(b) 5,120,000
- -----------------------------------------------------------------------------------------------------
5,320,000
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</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Florida -- 3.5%
Broward County HFA Multi-Family Housing Revenue:
$ 2,000,000 A-1 Margate Investments Project 4.15%(b) $ 2,000,000
3,000,000 VMIG 1* Welleby Apartments Project 4.10%(b) 3,000,000
Eagle Tax-Exempt PART:
13,100,000 A-1+ Florida Board of Education 4.18%(b) 13,100,000
14,130,000 A-1+ Orange County Florida Housing 3.80% due 3/1/98(c) 14,130,000
4,620,000 A-1+ Escambia County HFA Single Family Mortgage Revenue
3.90% due 4/2/98(a)(c) 4,620,000
20,000,000 A-1+ Florida Board of Education Capital Outlay PART 4.10%(b) 20,000,000
Florida Capital Projects Finance Authority Revenue
(Capital Projects Loan Program) Series A:
15,000,000 A-1+ FSA-Insured 4.10%(b) 15,000,000
TECP:
30,100,000 A-1 3.70% due 10/16/97 30,100,000
8,946,000 A-1 3.80% due 2/12/98 8,946,000
Florida HFA PART:
9,000,000 A-1+ 4.25%(a)(b) 9,000,000
7,350,000 A-1+ 4.15%(b) 7,350,000
3,400,000 A-1+ Florida HFA Multi-Family Housing (Series II-J
Ashley Lake Apartments) 4.20%(a)(b) 3,400,000
Florida Local Government Community Association of
Counties TECP:
8,330,000 A-1 3.85% due 2/10/98 8,330,000
12,714,000 A-1 3.80% due 2/12/98 12,714,000
Florida Municipal Power Agency Series A TECP:
3,800,000 A-1 3.70% due 10/15/97 3,800,000
5,520,000 A-1 3.60% due 10/29/97 5,520,000
1,500,000 NR++ Hendry County IDA IDR (Savannah Foods & Industry Project)
4.45%(a)(b) 1,500,000
6,000,000 A-1+ Palm Beach County Health Facilities Authority
(Pooled Hospital Loan Program) MBIA-Insured
TECP 3.75% due 10/2/97 6,000,000
2,200,000 VMIG 1* Pasco County HFA Multi-Family Revenue
(Carlton Arms Magnolia) 4.17%(b) 2,200,000
8,900,000 VMIG 1* Pinellas County Educational Facilities Authority Revenue
Refunding TECP (Pooled Independent Higher Education)
MBIA-Insured 3.65% due 10/8/97 8,900,000
1,185,000 A-1+ Pinellas County HFA Single-Family Mortgage Revenue
PART 4.20%(a)(b) 1,185,000
2,350,000 NR++ Pinellas County Industrial Council IDR (Molex ETC Inc.
Project) 4.25%(a)(b) 2,350,000
6,000,000 VMIG 1* Sunshine State Government Finance Series 1986
TECP 3.75% due 12/8/97 6,000,000
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Florida -- 3.5% (continued)
$ 5,975,000 AAA Tampa Utility Tax (Pre-Refunded-- Escrowed with
U.S. government securities to 10/1/97 Call @ 102)
8.125% due 10/1/15 $ 6,094,500
4,000,000 VMIG 1* West Orange Memorial Hospital TECP
3.625% due 10/30/97 4,000,000
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199,239,500
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Georgia -- 2.0%
7,250,000 A-1+ Atlanta Water and Sewer Revenue FGIC-Insured
PART 4.10%(b) 7,250,000
1,400,000 NR++ Cobb County IDA IDR (RLR Industries Inc. Project) 4.25%(b) 1,400,000
Cobb County Multi-Family Housing:
2,000,000 A-1+ Greenhouse Frey Apartment Project 4.15%(b) 2,000,000
4,055,000 A-1+ Williamstown Apartment Project 4.25%(a)(b) 4,055,000
2,900,000 NR++ Decatur and Bainbridge Counties Development Authority
IDR (Thomas & Betts Project) 4.25%(b) 2,900,000
5,100,000 A-1+ DeKalb County Multi-Family Housing Authority Revenue
Refunding (Camden Brook Project) 3.75%(b) 5,100,000
2,800,000 NR++ Dodge County Industrial Development Authority (Sylvan
Hardwoods LLC Project) 4.25%(b) 2,800,000
7,000,000 A-1+ Georgia Municipal Electric Authority Subseries B 4.05%(b) 7,000,000
5,100,000 A-1+ Georgia Municipal Gas Authority Gas Revenue (Agency
Project) Series B 4.10%(b) 5,100,000
Georgia State GO:
15,200,000 A-1+ Eagle Tax-Exempt PART 3.65% due 2/12/98(c) 15,200,000
6,745,000 NR+ PART 3.70% due 10/30/97(c) 6,745,000
4,835,000 VMIG 1* Series 93C PART 4.20%(b) 4,835,000
4,000,000 NR+ Gwinnett County School District 4.40% due 2/1/98 4,009,813
5,000,000 NR++ Harralson County Development IDR (Gold Kist Project)
4.25%(a)(b) 5,000,000
2,600,000 VMIG 1* Heard County Development Authority PCR 4.00%(a)(b) 2,600,000
2,900,000 NR++ Jackson County IDA IDR (Snider Tire Inc. Project)
4.25%(a)(b) 2,900,000
4,900,000 A-1+ Marietta Housing Authority Multi-Family Revenue Refunding
(Concepts 21 Apartments) 4.20%(b) 4,900,000
6,100,000 A-1 Monroe County Development Authority PCR (Georgia
Power Co.) 3.95%(b) 6,100,000
5,000,000 A-1+ Municipal Electricity Authority Special Obligation PART
MBIA-Insured 4.20%(b) 5,000,000
3,200,000 NR++ Pike County IDA IDR (Thomaston Mills Inc. Project)
4.25%(a)(b) 3,200,000
3,000,000 NR++ Richmond County Development Authority Revenue
(General Signal) 4.15%(b) 3,000,000
3,500,000 NR++ Smyrna Housing Authority Multi-Family Housing Revenue
(Walton Grove Project) 4.25%(a)(b) 3,500,000
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Georgia -- 2.0% (continued)
$ 4,700,000 A-1+ Thomaston-Upson County IDA Revenue (De Ster
Production Corp.) Series A 4.50%(a)(b) $ 4,700,000
Tift County IDA IDR (Queen Carpet Corp. Project):
3,000,000 NR++ Series A 4.25%(a)(b) 3,000,000
1,500,000 NR++ Series B 4.15%(b) 1,500,000
- -----------------------------------------------------------------------------------------------------
113,794,813
- -----------------------------------------------------------------------------------------------------
Hawaii -- 0.5%
Hawaii State GO FGIC-Insured PART:
15,995,000 VMIG 1* 4.20%(b) 15,995,000
5,275,000 VMIG 1* Series CM PART 3.80% due 1/14/98(c) 5,275,000
5,500,000 VMIG 1* Hawaii State Department Budget and Finance Special
Purpose Mortgage Revenue (Ewa Plain Water
Development) 4.05% due 10/1/97(c) 5,500,000
3,200,000 VMIG 1* Hawaii State Housing Finance & Development Corp. Revenue
Affordable Rental Housing Program Series A 4.00%(b) 3,200,000
- -----------------------------------------------------------------------------------------------------
29,970,000
- -----------------------------------------------------------------------------------------------------
Idaho -- 1.1%
23,000,000 A-1+ Cluster County PCR (Amoco Oil) 3.70% due 10/1/97(c) 23,000,000
16,680,000 VMIG 1* Idaho Housing & Finance Authority PART 3.95%
due 1/15/98(a)(c) 16,680,000
25,000,000 SP-1+ Idaho State TAN 4.625% due 6/30/98 25,134,685
- -----------------------------------------------------------------------------------------------------
64,814,685
- -----------------------------------------------------------------------------------------------------
Illinois -- 7.4%
15,660,000 A-1+ Central Lake Community Joint Action Water Agency
Interim Water Revenue PART FGIC-Insured 4.20%(b) 15,660,000
7,400,000 P-1* Chicago Gas Supply Revenue (Peoples Gas Light & Coke Co.)
Series 93B 3.70% due 12/1/97(a)(c) 7,400,000
3,000,000 A-1+ Chicago GO 4.05%(b) 3,000,000
4,000,000 VMIG 1* Chicago Multi-Family Housing (Waveland Assoc. Project)
Series D 4.10%(b) 4,000,000
Chicago O'Hare International Airport Revenue:
11,500,000 A-1+ Second Lien-A 4.20%(a)(b) 11,500,000
4,400,000 A-1+ Second Lien Series 88B 4.20%(a)(b) 4,400,000
26,600,000 A-1+ Second Lien Series 94B 4.15%(a)(b) 26,600,000
20,000,000 MIG 1* Chicago Park District TAW 4.75% due 9/21/98 20,165,849
Chicago PART AMBAC-Insured:
13,280,000 A-1+ Series 1995 4.20%(b) 13,280,000
3,380,000 A-1+ Series 1996 3.95%(b) 3,380,000
3,045,000 A-1+ Series 1996 4.25%(b) 3,045,000
20,000,000 A-1+ Chicago Tender Note Series 1985 3.55% due 1/31/98 20,000,000
8,235,000 A-1+ Cook County GO PART MBIA-Insured 4.20%(b) 8,235,000
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Illinois -- 7.4% (continued)
$ 4,700,000 NR++ Dupage Water Series 93 TOB 4.18%(b) $ 4,700,000
14,200,000 A-1+ Eagle Tax-Exempt Trust PART (Illinois GO) FGIC-Insured
3.50% due 1/1/98(c) 14,200,000
Illinois Development Finance Authority PCR:
Commonwealth Edison Co. Project AMBAC-Insured:
9,000,000 A-1+ Series A 4.15%(b) 9,000,000
34,400,000 A-1+ Series B 4.05%(b) 34,400,000
12,270,000 A-1+ Illinois Power Co. Project 4.15%(b) 12,270,000
2,700,000 A-1+ Series 1993B 4.10%(b) 2,700,000
1,000,000 A-1+ Series 1994C 4.15%(b) 1,000,000
27,000,000 A-1+ Series 1997A MBIA-Insured 4.25%(a)(b) 27,000,000
Illinois Development Finance Authority Revenue:
40,000,000 A-1+ Adventist Health Systems Series A MBIA-Insured
4.15%(b) 40,000,000
3,000,000 A-1+ Harris Pavilion (Residential Rental) 4.15%(a)(b) 3,000,000
4,000,000 A-1+ Safety Education - Foundation For Safety 4.10%(b) 4,000,000
9,500,000 A-1+ Illinois Education (University Of Chicago) PART 4.18%(b) 9,500,000
14,400,000 A-1+ Illinois HDA Residential Mortgage Revenue PART
AMBAC-Insured 4.25%(a)(b) 14,400,000
Illinois Health Facilities Authority Revenue:
8,800,000 A-1+ Adler Planetarium 4.05%(b) 8,800,000
7,265,000 A-1+ Alexian Bros. TECP MBIA-Insured 3.65% due 10/2/97 7,265,000
6,100,000 A-1+ Decatur Memorial Hospital Project Series A
MBIA-Insured 4.10%(b) 6,100,000
6,500,000 A-1+ Swedish Covenant Hospital Project AMBAC-Insured
4.10%(b) 6,500,000
13,000,000 VMIG 1* University of Chicago TECP 3.80% due 12/2/97 13,000,000
Illinois State GO:
10,000,000 NR+ 5.25% due 10/1/97 10,000,000
3,000,000 NR+ 4.25% due 7/1/98 3,010,200
3,255,000 A-1+ Illinois State Sales Tax Revenue PART FSA-Insured 4.20%(b) 3,255,000
2,940,000 VMIG 1* Illinois Student Assistance Community Student Loan
Revenue 4.15%(a)(b) 2,940,000
2,470,000 NR++ Lincolnwood IDR Refunding (Illinois Self Storage Center)
4.15%(b) 2,470,000
3,300,000 A-1+ Lockport IDR (Panduit Corp. Project) 4.10%(a)(b) 3,300,000
2,000,000 A-1+ Oswego IDR (Griffith Laboratories Project) 4.10%(a)(b) 2,000,000
4,000,000 NR++ Paris IDR (Simonton Building Products Inc.) 4.25%(a)(b) 4,000,000
5,250,000 NR++ Pekin IDR Refunding (BOC Group Inc. Project) 3.75%(b) 5,250,000
15,735,000 A-1+ Regional Transportation Authority PART FGIC-Insured
4.20%(b) 15,735,000
1,785,000 NR++ River Grove IDR Refunding (Self Storage Center) 4.15%(b) 1,785,000
3,000,000 A-1+ University of Illinois Revenue PART FGIC-Insured 4.20%(b) 3,000,000
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Illinois -- 7.4% (continued)
$ 4,700,000 P-1* Will County Solid Waste Disposable Revenue
(BASF Corp. Project) 4.05%(b) $ 4,700,000
- -----------------------------------------------------------------------------------------------------
419,946,049
- -----------------------------------------------------------------------------------------------------
Indiana -- 1.9%
4,100,000 A-1+ Allen County Economic Development Revenue (Mattel
Project) 4.35%(a)(b) 4,100,000
1,785,000 NR++ Bluffton Economic Development Revenue (Snider Tire Inc.
Project) 4.25%(b) 1,785,000
1,725,000 NR++ Central High School Building Corp. Refunding (First
Mortgage) AMBAC-Insured 3.85% due 2/1/98 1,725,000
Fort Wayne:
3,700,000 VMIG 1* Hospital Authority Revenue (Parkview Memorial Hospital)
Series B 4.05%(b) 3,700,000
3,000,000 VMIG 2* PCR (General Motors Corp. Project) 4.20%(b) 3,000,000
20,000,000 SP-1+ Hammond Local Public Improvement Bond Bank
4.20% due 1/8/98 20,026,110
7,500,000 A-1+ Indiana Health Facility Financing Authority Hospital Revenue
(Community Hospitals Project) Series B 4.20%(b) 7,500,000
18,000,000 A-1+ Indiana IDA Solid Waste Series 1990A
3.80% due 2/19/98(a) 18,000,000
11,000,000 SP-1+ Indiana Secondary Market Educational Loans Inc.
Education Loan Revenue Series B
AMBAC-Insured 4.10%(a)(b) 11,000,000
5,300,000 A-1+ Indiana State Development Finance Authority IDR
(Red Gold Inc. Project) AMBAC-Insured 4.10%(a)(b) 5,300,000
1,300,000 NR++ Plymouth IDR (Dean Foods Co. Project) 4.15%(a)(b) 1,300,000
1,210,000 VMIG 1* Richmond Economic Development Revenue (Beverly
Enterprises Indiana) 3.70%(b) 1,210,000
27,600,000 A-1 Rockport PCR Refunding (Michigan Power Co. Project)
Series B AMBAC-Insured 4.15%(b) 27,600,000
1,200,000 A-1+ Whiting Industrial Sewer & Solid Waste Disposal Revenue
Refunding (Amoco Oil Co. Project) 4.00%(a)(b) 1,200,000
- -----------------------------------------------------------------------------------------------------
107,446,110
- -----------------------------------------------------------------------------------------------------
Iowa -- 0.3%
1,500,000 NR++ Cedar Rapids IDR Refunding (McKesson Corp. Project)
4.15%(b) 1,500,000
3,000,000 P-1* Iowa HFA IDR (Sauer-Sundstrand Co. Project) 4.10%(a)(b) 3,000,000
10,000,000 SP-1+ Iowa School Corps Certificates Series A 4.50% due 6/26/98 10,049,488
1,500,000 A-1 Louisa County PCR (Iowa-Illinois Gas & Electric Co. Project)
Series 1987 3.95%(b) 1,500,000
- -----------------------------------------------------------------------------------------------------
16,049,488
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Kansas -- 0.6%
$ 3,400,000 NR++ Fredonia Revenue Exempt Facilities (Systech
Environmental) 4.40%(a)(b) $ 3,400,000
7,015,000 MIG 1* Lawrence GO Series A 4.00% due 6/1/98 7,015,417
14,000,000 NR++ Sedgewick County Airport Facility Revenue (Flight Safety
International Inc. Project) 4.25%(a)(b) 14,000,000
Wichita Airport Authority Facilities Revenue
(Flight Safety International Project):
3,300,000 NR++ 4.15%(b) 3,300,000
6,170,000 NR++ 4.25%(a)(b) 6,170,000
- -----------------------------------------------------------------------------------------------------
33,885,417
- -----------------------------------------------------------------------------------------------------
Kentucky -- 1.6%
3,250,000 NR++ Calvert City PCR (BOC Group Inc. Project) 3.80%(b) 3,250,000
19,400,000 VMIG 1* Clipper Kentucky Tax-Exempt Trust PART 4.18%(b) 19,400,000
Hancock County IDR:
1,516,000 A-1 Jefferson County IDR (Belknap Inc. Project) 3.70%(b) 1,516,000
Southwire Co.:
21,685,000 NR++ Project A 4.25%(b) 21,685,000
1,000,000 NR++ Project B 4.25%(b) 1,000,000
35,000,000 MIG 1* Kentucky TAN Series A 4.50% due 6/25/98 35,160,200
8,400,000 VMIG 1* Pendeleton County Revenue 3.95% due 7/1/98(c) 8,400,000
- -----------------------------------------------------------------------------------------------------
90,411,200
- -----------------------------------------------------------------------------------------------------
Louisiana -- 2.1%
1,410,000 NR++ Kentwood IDR Refunding (Suntory Water Group Inc.)
4.15%(b) 1,410,000
Lake Charles Harbor and Term District Revenue:
400,000 P-1* Citgo Pete Corp. 4.15%(b) 400,000
12,000,000 A-1+ Port Improvement 4.15%(a)(b) 12,000,000
Louisiana Public Facility Authority:
4,200,000 NR++ Home Depot USA Inc. Project 4.25%(a)(b) 4,200,000
9,200,000 VMIG 1* Sisters of Charity Series E 4.10%(b) 9,200,000
7,025,000 VMIG 1* Louisiana State GO Series 29A PART MBIA-Insured
4.20%(b) 7,025,000
12,000,000 A-1+ Louisiana State Offshore Term Authority Deepwater
Port Revenue First Stage Series A 4.00%(b) 12,000,000
36,550,000 VMIG 1* New Orleans Aviation Board Revenue Refunding Series B
MBIA-Insured 4.05%(b) 36,550,000
5,000,000 NR++ Ouachita Parish IDB IDR (Sulzer Escher Wyss Project)
4.25%(a)(b) 5,000,000
St. James Parish PCR (Texaco Project) TECP:
27,900,000 A-1 Series A 3.70% due 10/7/97 27,900,000
3,100,000 A-1 Series B 3.70% due 10/7/97 3,100,000
1,000,000 NR++ Vermillion Parish IDR (Garan Inc. Project) 4.25%(a)(b) 1,000,000
- -----------------------------------------------------------------------------------------------------
119,785,000
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Maine -- 0.2%
$ 1,845,000 A-1+ Maine Finance Authority Economic Development Revenue
Series A, B, C & E 3.95%(a)(b) $ 1,845,000
9,500,000 A-1 Westbrook Revenue (Southern Container Corp. Project)
4.15%(a)(b) 9,500,000
- -----------------------------------------------------------------------------------------------------
11,345,000
- -----------------------------------------------------------------------------------------------------
Maryland -- 3.6%
Anne Arundel County Economic (Baltimore Gas &
Electric Co. Project):
12,000,000 A-1 GO BAN TECP 3.70% due 10/14/97 12,000,000
6,160,000 A-1 TECP 3.85% due 10/7/97(a) 6,160,000
3,000,000 A-1 TECP 3.70% due 12/8/97(a) 3,000,000
4,000,000 A-1+ Baltimore County Economic Development Revenue
(Art Litho Co. Project) 4.25%(a)(b) 4,000,000
10,000,000 A-1+ Baltimore GO TECP 3.65% due 10/7/97 10,000,000
4,000,000 A-1+ Baltimore PCR Refunding (SCM Plants Project)
3.75%(a)(b) 4,000,000
18,700,000 A-1+ Eagle Tax-Exempt Trust PART (Northeast Maryland
Waste Disposal) MBIA-Insured 4.18%(b) 18,700,000
9,000,000 NR++ Maryland State Community Development Administration
Department Housing & Community Development
Series B 4.00%(a)(b) 9,000,000
36,700,000 VMIG 1* Maryland State Health & Higher Educational Facilities
Authority Revenue Peninsula General Hospital 4.10%(b) 36,700,000
Montgomery County Economic Development Revenue
(Howard Hughes Medical Center):
12,100,000 A-1+ Series A 4.10%(b) 12,100,000
25,500,000 A-1+ Series B 4.10%(b) 25,500,000
25,500,000 A-1+ Series C 4.10%(b) 25,500,000
27,500,000 A-1+ Montgomery County Housing Opportunity Community
Housing Revenue (Draper Land Apartments) Issue I
FGIC-Insured 4.20%(a)(b) 27,500,000
8,300,000 A-1+ Washington County Economic Development Revenue
(Purina Mills Inc. Project) 4.10%(a)(b) 8,300,000
- -----------------------------------------------------------------------------------------------------
202,460,000
- -----------------------------------------------------------------------------------------------------
Massachusetts -- 1.4%
10,395,000 VMIG 1* Clipper Massachusetts Tax-Exempt Trust PART
AMBAC-Insured 4.28%(a)(b) 10,395,000
45,000,000 SP-1+ Massachusetts Bay Transportation Authority
Series A 4.25% due 2/27/98 45,110,072
1,600,000 A-1+ Massachusetts State Industrial Finance Agency PCR
(Holyoke Water Power Co.) Series A 4.00%(b) 1,600,000
5,000,000 A-1+ Massachusetts State GO Refunding Series B 3.60%(b) 5,000,000
11,000,000 A-1+ Massachusetts Water Resource Authority Series A
AMBAC-Insured 4.00%(b) 11,000,000
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Massachusetts -- 1.4% (continued)
$ 5,000,000 NR+ Springfield Mass BAN 4.10% due 11/21/97 $ 5,002,691
- -----------------------------------------------------------------------------------------------------
78,107,763
- -----------------------------------------------------------------------------------------------------
Michigan -- 2.9%
3,500,000 NR++ Berrien County Limited Obligation Revenue
(Menasha Corp. Project) 4.15%(b) 3,500,000
4,500,000 A-1 Dearborn Economic Development Corp. Revenue
(Oakbrook Common Project) 4.05%(b) 4,500,000
18,850,000 A-1+ Detroit Sewer Disposable Revenue PART
FGIC-Insured 4.20%(b) 18,850,000
Michigan State HDA:
5,950,000 A-1+ Series B 4.10%(b) 5,950,000
5,000,000 A-1+ Series 1988A TECP 3.70% due 11/17/97(a) 5,000,000
14,180,000 NR+ Series 1995D PART 4.25%(b) 14,180,000
4,000,000 VMIG 1* Series 2010 Rental Housing Revenue PART
FSA-Insured 4.25%(a)(b) 4,000,000
5,500,000 VMIG 1* Woodland Meadows Project Revenue 4.20%(a)(b) 5,500,000
Michigan State Hospital Finance Authority Revenue:
7,000,000 VMIG 1* Mt. Clemens Hospital Refunding 3.75%(b) 7,000,000
5,100,000 A-1 St. Mary Hospital of Livonia Series A 4.05%(b) 5,100,000
45,000,000 SP-1+ Michigan State Municipal Board Authority Revenue
Series B 4.50% due 7/2/98 45,217,657
Michigan Strategic Fund PCR (General Motors
Corp. Project):
20,440,000 VMIG 2* 4.10%(b) 20,440,000
3,000,000 VMIG 2* Refunding 4.20%(b) 3,000,000
24,760,000 A-1+ State Building Authority TECP Series 1 3.70% due 10/9/97 24,760,000
- -----------------------------------------------------------------------------------------------------
166,997,657
- -----------------------------------------------------------------------------------------------------
Minnesota -- 3.0%
Becker PCR (Nothern State Power Co.):
5,000,000 A-1+ 3.65% due 11/3/97 5,000,000
9,900,000 A-1+ Series A TECP 3.40% due 10/15/97 9,900,000
1,900,000 A-1+ Series B TECP 3.65% due 10/10/97 1,900,000
14,900,000 A-1+ Series B TECP 3.70% due 10/22/97 14,900,000
4,000,000 A-1+ Bloomington Multi-Family Revenue Refunding (Rental
Housing Crow/Bloomington) 4.15%(b) 4,000,000
51,485,000 A-1+ Capital Realty Investments Tax-Exempt PART 4.25%(b) 51,485,000
24,000,000 A-1+ Eagle Tax-Exempt Minnesota GO PART
3.50% due 5/1/97(c) 24,000,000
1,000,000 A-1+ Hubbard County Solid Waste Disposal Revenue (Potlatch
Corp. Project) 4.10%(a)(b) 1,000,000
13,210,000 A-1+ Minneapolis GO Series B 4.10%(b) 13,210,000
9,900,000 A-1+ Minneapolis St. Paul Housing Finance Multi-Family
Revenue 4.25%(a)(b) 9,900,000
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Minnesota -- 3.0% (continued)
$ 7,565,000 NR+ Minnesota State GO PART 3.70% due 10/30/97(c) $ 7,565,000
Rochester Health Care Facility (Mayo Foundation Project):
10,000,000 A-1+ Series A 4.30%(b) 10,000,000
16,600,000 A-1+ Series C 4.30%(b) 16,600,000
- -----------------------------------------------------------------------------------------------------
169,460,000
- -----------------------------------------------------------------------------------------------------
Mississippi -- 0.3%
2,880,000 NR++ Jackson IDR Refunding (McKesson Corp. Project) 4.15%(b) 2,880,000
5,000,000 A-1+ Mississippi Business Financial Corp. Solid Waste
Disposal Revenue 4.25%(b) 5,000,000
5,350,000 NR++ Newton IDR Refunding (La-Z-Boy Chair Co. Project)
4.15%(b) 5,350,000
1,500,000 NR++ Washington County IDR (La-Z-Boy Chair Co. Project)
4.25%(a)(b) 1,500,000
- -----------------------------------------------------------------------------------------------------
14,730,000
- -----------------------------------------------------------------------------------------------------
Missouri -- 1.5%
6,495,000 A-1+ Kansas City IDA Multi-Family Housing Revenue (Willow
Creek IV Apartments) 4.05%(b) 6,495,000
13,000,000 A-1+ Maries County IDA Solid Waste Management Revenue
4.30%(a)(b) 13,000,000
Missouri Higher Education Loan Authority
Student Loan Revenue:
13,300,000 VMIG 1* Series 88A 4.10%(a)(b) 13,300,000
14,300,000 MIG 1* Series 90A 4.10%(a)(b) 14,300,000
1,250,000 VMIG 1* Series 90B 4.10%(a)(b) 1,250,000
1,665,000 VMIG 1* Missouri State Economic Development Export &
Infrastructure Board IDA Series E 4.20%(b) 1,665,000
4,000,000 P-1* Missouri State Environmental Improvement and Energy
Authority (Utilicorp United Inc. Project) 4.15%(a)(b) 4,000,000
6,000,000 A-1+ Missouri State Environmental PCR (Union Electric Project)
TECP 3.65% due 10/8/97 6,000,000
Missouri State Health & Educational Facilities
Authority Revenue:
6,000,000 A-1+ Series B 4.05%(b) 6,000,000
2,000,000 A-1+ SSM Health Care Projects MBIA-Insured
Series C 3.70%(b) 2,000,000
8,100,000 A-1+ St. Anthony's Medical Center Series B 4.05%(b) 8,100,000
St. Charles County IDA Revenue Refunding:
3,100,000 A-1+ Casalon Apartment Project 4.15%(b) 3,100,000
3,000,000 VMIG 1* Venture Stores Inc. Project 4.05%(b) 3,000,000
4,000,000 NR++ Versailles IDA IDR Refunding (Gates Rubber Co. Project)
4.13%(b) 4,000,000
- -----------------------------------------------------------------------------------------------------
86,210,000
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Montana -- 0.2%
$ 1,400,000 NR++ Missoula IDR (Washington Corp. Project) 3.56%(b) $ 1,400,000
3,925,000 A-1+ Montana Board of Investment (Colstrip 89) 4.53%(b) 3,925,000
4,000,000 VMIG 1* Montana State Board Housing 4.25%(a)(b) 4,000,000
- -----------------------------------------------------------------------------------------------------
9,325,000
- -----------------------------------------------------------------------------------------------------
Nebraska -- 1.4%
Nebraska Higher Education Loan Program Income Revenue
Student Loan Program:
22,280,000 A-1+ Series D 4.15%(a)(b) 22,280,000
1,600,000 VMIG 1* Series 1985A MBIA-Insured 4.05%(b) 1,600,000
21,075,000 A-1+ Series 1986D 4.15%(a)(b) 21,075,000
27,325,000 A-1+ Series 2016C 4.15%(a)(b) 27,325,000
4,600,000 A-1+ Series 2018C 4.15%(a)(b) 4,600,000
- -----------------------------------------------------------------------------------------------------
76,880,000
- -----------------------------------------------------------------------------------------------------
Nevada -- 0.9%
5,190,000 A-1+ Clark County Airport Improvement Revenue Lien Series A-2
4.20%(a)(b) 5,190,000
29,000,000 A-1+ Clark County IDR Nevada Power Co. Project 4.25%(a)(b) 29,000,000
Clark County PCR Southern California Edison Project
TECP Series A:
5,000,000 A-1+ 3.70% due 11/13/97(a) 5,000,000
3,000,000 A-1+ 3.80% due 12/8/97(a) 3,000,000
11,450,000 A-1+ Clark County School District PART FGIC-Insured 4.20%(b) 11,450,000
- -----------------------------------------------------------------------------------------------------
53,640,000
- -----------------------------------------------------------------------------------------------------
New Hampshire -- 1.6%
4,200,000 A-1+ New Hampshire Higher Educational & Health Facilities
Authority Revenue (VHA New England Inc.)
Series E AMBAC-Insured 4.15%(b) 4,200,000
New Hampshire State Business Finance Authority PCR
Refunding Public Service Co. (Connecticut Light &
Power Co. Project):
7,000,000 A-1+ Series A 4.15%(a)(b) 7,000,000
27,000,000 A-1+ Series D 4.25%(a)(b) 27,000,000
40,500,000 A-1+ Series E 4.15%(a)(b) 40,500,000
3,100,000 A-1 New Hampshire State Finance Authority PCR
(New England Power Co.) TECP 3.65% due 10/10/97 3,100,000
2,000,000 A-1+ New Hampshire State IDA Revenue PCR
(Connecticut Light & Power Co.) 4.20%(a)(b) 2,000,000
5,000,000 A-1 New Hampshire State PCR (New England Power Co.)
TECP 3.75% due 10/23/97(a) 5,000,000
2,900,000 AAA New Hampshire State Turnpike System Revenue
(Pre-Refunded -- Escrowed with U.S. government
securities to 11/1/97 Call @ 102) 8.125% due 11/1/07 2,968,278
- -----------------------------------------------------------------------------------------------------
91,768,278
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
New Jersey -- 0.5%
$26,500,000 A-1+ New Jersey State Housing & Mortgage Finance Agency
Revenue MBIA-Insured 4.20%(a)(b) $ 26,500,000
- -----------------------------------------------------------------------------------------------------
New Mexico -- 0.4%
4,900,000 NR++ Bellen IDR (Solo New Mexico Project) 4.25%(a)(b) 4,900,000
2,800,000 A-1+ Eagle Tax-Exempt PART (New Mexico Mortgage
Finance) FGIC-Insured 4.18%(a)(b) 2,800,000
3,340,000 A-1+ Farmington PCR Refunding (Public Service Co. San Juan)
Series B 4.10% 3,340,000
New Mexico Mortgage Finance Authority:
4,165,000 A-1+ Series 1995 4.25%(a)(b) 4,165,000
5,000,000 SP-1+ Series D-2 3.95% due 6/15/98(a)(c) 5,000,000
3,000,000 NR+ Santa Fe Single-Family Mortgage Revenue Series 1995
3.70% due 11/1/97 3,000,000
- -----------------------------------------------------------------------------------------------------
23,205,000
- -----------------------------------------------------------------------------------------------------
New York -- 3.2%
Eagle Tax-Exempt PART:
2,000,000 A-1+ NYC Environment FSA-Insured 4.18%(b) 2,000,000
16,100,000 A-1+ NYC Municipal Water MBIA-Insured 4.18%(b) 16,100,000
2,000,000 A-1+ NYS Med Care AMBAC-Insured 4.18%(b) 2,000,000
10,000,000 NR+ Eastern Suffolk Educational Services First Supervisory
District RAN 4.50% due 6/24/98 10,034,981
20,450,000 NR+ Monroe County GO BAN Series B 4.00% due 12/12/97 20,469,484
Nassau County:
10,000,000 SP-1+ BAN Series B 4.50% due 11/14/97 10,007,625
6,000,000 SP-1+ RAN Series B 4.50% due 4/10/98 6,019,807
NYC GO:
4,000,000 A-1+ PART AMBAC-Insured 4.15%(b) 4,000,000
2,500,000 A-1+ PART MBIA-Insured 4.15%(b) 2,500,000
13,690,000 A-1 Series M AMBAC-Insured 3.85% due 12/2/97(c) 13,690,000
16,000,000 A-1+ Sub-Series J2 TECP 3.70% due 10/10/97 16,000,000
NYC Muni Water Finance Authority Water & Sewer
System Revenue PART:
3,000,000 A-1+ Series 4 TECP 3.80% due 11/6/97 3,000,000
9,685,000 A-1+ Series 12 MBIA-Insured 4.10%(b) 9,685,000
New York State Energy Research & Development
Authority PCR:
2,400,000 A-1+ Niagara Mohawk Power Project 4.10%(b) 2,400,000
2,800,000 A-1 Rochester Gas & Electric Corp. MBIA-Insured
Series B 4.20%(b) 2,800,000
25,100,000 A-1+ New York State Local Government Assistance Corp.
Series A 3.95%(b) 25,100,000
10,098,000 NR++ New York State Medical Care Facilities Finance Agency
Revenue PART Series B FSA-Insured 4.10%(b) 10,098,000
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
New York -- 3.2% (continued)
$24,275,000 A-1+ New York State Thruway Authority Revenue PART
SGA 66 4.10%(b) $ 24,275,000
3,000,000 NR++ Rochester GO PART AMBAC-Insured 4.20%(b) 3,000,000
- -----------------------------------------------------------------------------------------------------
183,179,897
- -----------------------------------------------------------------------------------------------------
North Carolina -- 1.1%
6,000,000 NR++ Alamance County Industrial Facilities & PCR Financing
Authority (Culp Inc. Project) 4.25%(a)(b) 6,000,000
3,500,000 NR++ Iredell County Industrial Facilities & PCFA Industrial
Revenue (Valspar Corp. Project) 4.25%(a)(b) 3,500,000
4,335,000 A-1+ Mecklenburg County Lease Revenue
(The Young Men's Christian Project) 4.05%(b) 4,335,000
9,995,000 A-1 North Carolina HFA Series PP 4.20%(a)(b) 9,995,000
North Carolina Municipal Power Agency Authority
(Catawba Project) TECP:
11,500,000 A-1+ 3.70% due 10/20/97 11,500,000
18,810,000 A-1+ 3.65% due 11/3/97 18,810,000
3,625,000 NR++ Pasquotank County Hospital Revenue 4.17%(b) 3,625,000
5,000,000 A-1+ University of North Carolina Revenue (Kenan Memorial
Stadium) 4.05%(b) 5,000,000
- -----------------------------------------------------------------------------------------------------
62,765,000
- -----------------------------------------------------------------------------------------------------
Ohio -- 2.4%
7,100,000 VMIG 1* Clermont County Hospital Facilities Revenue (Mercy Health
Systems) Series A 3.70%(b) 7,100,000
14,000,000 A-1+ Eagle Tax-Exempt Ohio Water District PART
AMBAC-Insured 3.30%(b) 14,000,000
15,000,000 A-1+ Lake County Hospital Facilities Revenue (Lake Hospital
Systems Inc.) 4.15%(b) 15,000,000
Lorraine County Mercy Health Systems TECP:
10,000,000 A-1+ 3.70% due 11/3/97 10,000,000
15,000,000 A-1+ 3.70% due 11/4/97 15,000,000
2,000,000 NR++ Oakwood Village IDR (Sennet Steel Corp. Project) 4.10%(b) 2,000,000
18,300,000 SP-1+ Ohio School Districts TAN Series B 4.47% due 6/30/98 18,377,552
Ohio State Air Quality Development Authority Revenue:
4,000,000 A-1+ JMG FDG Limited Partnership Series A 4.15%(a)(b) 4,000,000
8,000,000 A-1+ TECP Duquesne Light PCR Series 88 3.75% due 10/7/97(a) 8,000,000
5,000,000 P-1* Ohio State Solid Waste Disposal Revenue
(USG Corp. Project) 4.00%(a)(b) 5,000,000
Ohio State Water Development Authority:
5,500,000 A-1+ Duquesne Light Co. Project PCR 4.20%(a)(b) 5,500,000
9,900,000 VMIG 1* Timken Co. Project Waste Disposal Revenue 4.10%(a)(b) 9,900,000
1,600,000 A-1 Scioto County Hospital Revenue (VHA Center Inc.) Series D
AMBAC-Insured 4.15%(b) 1,600,000
21,795,000 SP-1+ Summit County BAN Series A 4.50% due 6/4/98 21,884,017
1,480,000 A-1+ Toledo City Services Special Assessment Notes 4.15%(b) 1,480,000
- -----------------------------------------------------------------------------------------------------
138,841,569
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Oklahoma -- 0.4%
$ 7,030,000 VMIG 1* Broken Arrow Economic Development Authority
(Paragon Films Inc. Project) 4.42%(a)(b) $ 7,030,000
4,500,000 NR++ Creek County Industrial Authority IDR
(Henry Vogt Machinery) 4.30%(a)(b) 4,500,000
8,980,000 A-1+ Oklahoma State Student Loan Authority Revenue
(Student Loan) Series A MBIA-Insured 4.15%(a)(b) 8,980,000
- -----------------------------------------------------------------------------------------------------
20,510,000
- -----------------------------------------------------------------------------------------------------
Oregon -- 1.0%
1,300,000 NR++ Oregon State Economic Development Commission Economic
& IDR (Trust Joint) 4.15%(b) 1,300,000
11,185,000 A-1+ Oregon State GO Series 73F 4.05%(b) 11,185,000
Oregon State Housing & Community Services Department
Mortgage Revenue (Single Family Mortgage Program):
10,000,000 VMIG 1* Series C 3.95% due 5/14/98(c) 10,000,000
2,500,000 VMIG 1* Series D 4.05% due 5/14/98(a)(c) 2,500,000
Oregon State Veterans Welfare:
4,000,000 NR+ Series B 3.95% due 2/2/98(c) 4,000,000
5,000,000 NR+ Series C 4.05% due 2/2/98(a)(c) 5,000,000
6,850,000 A-1 Port St. Helen's PCR (Portland General Electric)
Series A 4.10%(b) 6,850,000
16,900,000 P-1* Washington County Multi-Family Housing Authority
(Cedar Mill Project) 4.15%(a)(b) 16,900,000
- -----------------------------------------------------------------------------------------------------
57,735,000
- -----------------------------------------------------------------------------------------------------
Pennsylvania -- 6.4%
6,750,000 NR++ Allegheny County Hospital Development Authority Revenue
(Health Care Dialysis Clinic) 3.75%(b) 6,750,000
Allegheny County IDA IDR:
3,400,000 VMIG 1* Longwood At Oakmont Inc. Series D 4.05%(b) 3,400,000
5,800,000 VMIG 1* Residential Rental Development Series A 4.25%(a)(b) 5,800,000
Beaver County PCR IDA (Duquesne Light Co.) TECP:
4,200,000 A-1+ 3.85% due 10/7/97(a) 4,200,000
5,000,000 A-1+ 3.625% due 10/30/97(a) 5,000,000
6,000,000 NR++ Berks County TRAN 4.375% due 12/31/97 6,010,528
2,600,000 NR++ Bucks County IDA IDR (Dunmore Corp. Project) 4.20%(a)(b) 2,600,000
12,400,000 A-1+ Cambria County IDA Resource Recovery Revenue
(Cambria Cogen Project) Series V-2 4.15%(a)(b) 12,400,000
Carbon County IDA Resource Recovery
(Panther Creek) TECP:
8,975,000 A-1+ 3.65% due 10/9/97(a) 8,975,000
2,700,000 A-1+ 3.75% due 10/23/97(a) 2,700,000
17,000,000 A-1+ 3.70% due 11/12/97(a) 17,000,000
11,000,000 A-1+ Commonwealth of Pennsylvania PART FGIC-Insured
3.90% due 12/3/97(c) 11,000,000
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Pennsylvania -- 6.4% (continued)
$ 8,665,000 A-1+ Commonwealth of Pennsylvania State GO PART
AMBAC-Insured 3.95%(b) $ 8,665,000
9,910,000 VMIG 1* Cumberland County Municipal Authority Revenue
(United Methodist Aging Homes) 3.87% due 6/4/98(c) 9,910,000
Delaware County IDR (Philadelphia Electric Co.)
FGIC-Insured TECP:
1,600,000 A-1+ 3.65% due 10/8/97 1,600,000
8,000,000 A-1+ 3.60% due 11/13/97 8,000,000
Eagle Tax-Exempt Trust PART AMBAC-Insured
Beaver County:
19,000,000 A-1+ Series 95A 4.18%(b) 19,000,000
19,000,000 A-1+ Series 95B 4.18%(b) 19,000,000
3,900,000 NR++ East Pennsylvania Industrial & Commercial
Development Authority (Electronic Data Systems
Corp.) 4.15%(a)(b) 3,900,000
375,000 A-1 Emmaus General Authority Revenue
Sub-Series E9 4.20%(b) 375,000
20,110,000 VMIG 1* Indiana County IDA PCR (Conemaugh Project)
Series A 4.15%(a)(b) 20,110,000
2,500,000 NR++ Luzerne County IDA IDR (Culp Inc. Project) 4.25%(a)(b) 2,500,000
5,400,000 A-1+ Pennsylvania Energy Development Authority (Piney Creek)
Series A 4.20%(a)(b) 5,400,000
Pennsylvania State Higher Education Assistance Agency
Student Loan Revenue:
3,200,000 A-1+ Series B 4.10%(a)(b) 3,200,000
10,000,000 A-1+ Series C 4.10%(a)(b) 10,000,000
8,200,000 A-1 Pennsylvania State Higher Educational Facilities Authority
Health Services Revenue (Allegheny Delaware VY-D)
4.00%(b) 8,200,000
75,000,000 SP-1+ Philadelphia TRAN 4.50% due 6/30/98 75,281,851
18,700,000 P-1* Quakertown General Authority Revenue (Pooled
Financing Program) Series A FGIC-Insured 3.75%(b) 18,700,000
19,800,000 VMIG 1* Quakertown Hospital Program Series 1985A 4.15%(b) 19,800,000
5,800,000 A-1 Sayre Health Care Facilities Authority Revenue
(VHR Cap Financing Project) Series J
AMBAC-Insured 4.10%(b) 5,800,000
10,235,000 A-1+ Southeastern Transportation Authority Special
Revenue PART FGIC-Insured 4.20%(b) 10,235,000
Venango IDA (Scrubgrass Project) TECP:
2,600,000 A-1+ 3.70% due 10/8/97(a) 2,600,000
4,915,000 A-1+ 3.80% due 12/8/97(a) 4,915,000
17,600,000 A-1 York General Authority Pooled Financing Revenue 4.05%(b) 17,600,000
- -----------------------------------------------------------------------------------------------------
360,627,379
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Rhode Island -- 0.4%
$17,042,000 NR+ Cranston GO BAN 4.25% due 10/1/97 $ 17,042,000
3,900,000 A-1+ Providence (Washington Street Garage Corp.
Project) 4.20%(a)(b) 3,900,000
- -----------------------------------------------------------------------------------------------------
20,942,000
- -----------------------------------------------------------------------------------------------------
South Carolina -- 1.1%
Anderson County Industrial Revenue:
6,580,000 NR++ Culp Inc. Project 4.25%(a)(b) 6,580,000
2,400,000 NR++ Fed Paper Board Co. Inc. Project 4.25%(a)(b) 2,400,000
4,000,000 NR++ Mikron Corp. Anderson Project 4.40%(a)(b) 4,000,000
2,252,000 NR++ Chesterfield County IDR (Culp Inc. Project) 4.25%(a)(b) 2,252,000
700,000 P-1* Horry County Revenue (Carolina Treatment) 4.15%(b) 700,000
19,000,000 SP-1+ Piedmont Muni Power Agency Electric Revenue Refunding
Series A MBIA-Insured TECP 3.73% due 1/7/98 19,000,000
South Carolina Jobs Economic Development
Authority Revenue:
5,000,000 P-1* BASF Corp. Project 4.10%(a)(b) 5,000,000
4,200,000 NR++ Conco Medical Products Project 4.25%(a)(b) 4,200,000
4,300,000 NR++ Galey & Lord Industries Inc. Project 4.25%(a)(b) 4,300,000
2,000,000 NR++ Greenville Machinery Project 4.25%(a)(b) 2,000,000
6,000,000 NR++ Orders Realty Co. Inc. Project 4.25%(a)(b) 6,000,000
6,070,000 A-1+ South Carolina Public Service Authority TECP
3.70% due 10/22/97 6,070,000
- -----------------------------------------------------------------------------------------------------
62,502,000
- -----------------------------------------------------------------------------------------------------
South Dakota -- 0.4%
7,000,000 P-1* Lawrence County Solid Waste Disposal Revenue
(Homestake Mining) Series A 4.05%(b) 7,000,000
15,445,000 VMIG 1* South Dakota HDA Series F 3.75% due 11/13/97 15,445,000
- -----------------------------------------------------------------------------------------------------
22,445,000
- -----------------------------------------------------------------------------------------------------
Tennessee -- 3.0%
4,735,000 P-1* Anderson County Tennessee IDB Revenue Becromal of
America Inc. Project 4.60%(a)(b) 4,735,000
7,500,000 A-1+ Clarksville Public Building Authority Revenue (Pooled
Financing Tennessee Muni Board Fund) 4.10%(b) 7,500,000
9,700,000 A-1+ Eagle Tax-Exempt PART (Tennessee HDA)
FSA-Insured 4.28%(a)(b) 9,700,000
8,100,000 NR++ Loudon IDB PCR (AE Stanley Manufacturing) 4.15%(b) 8,100,000
11,400,000 VMIG 1* Metro Government Nashville & Davidson County IDB
Revenue Multi-Family Housing (Arbor Knoll)
4.15%(b) 11,400,000
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Tennessee -- 3.0% (continued)
$20,700,000 A-1+ Metropolitan Nashville Airport Refunding FGIC-Insured
Series 1995 4.10%(b) $ 20,700,000
2,600,000 NR++ Roane County IDB IDR (Great Lakes Carbon Corp.)
3.80%(b) 2,600,000
Sevier County Public Building Authority (Local Government
Public Improvement) AMBAC-Insured:
6,700,000 VMIG 1* Series B 4.05%(b) 6,700,000
4,500,000 VMIG 1* Series E-2 4.05%(b) 4,500,000
1,750,000 VMIG 1* Series E-5 4.05%(b) 1,750,000
5,300,000 VMIG 1* Series E-6 4.05%(b) 5,300,000
28,500,000 A-1+ Tennessee State Housing Development Agency
(Homeownership Project) Series 5-B
3.85% due 3/5/98(a)(c) 28,500,000
31,500,000 SP-1+ Tennessee State Local Development Authority Revenue
BAN Series A 4.25% due 5/28/98 31,571,366
Volunteer State Student Funding Corp. Tennessee
Student Loan Revenue:
2,000,000 A-1 Series A 4.15%(a)(b) 2,000,000
26,000,000 A-1 Series A-3 4.15%(a)(b) 26,000,000
- -----------------------------------------------------------------------------------------------------
171,056,366
- -----------------------------------------------------------------------------------------------------
Texas -- 12.9%
Austin Combine Utility System Series A TECP:
1,750,000 A-1+ 3.65% due 10/9/97 1,750,000
11,325,000 A-1+ 3.70% due 10/22/97 11,325,000
19,340,000 A-1+ Austin Utility System Revenue PART MBIA-Insured 4.20%(b) 19,340,000
8,500,000 A-1+ Bexar County HFA Multi-Family Revenue Refunding
(Fountainhead Apartments) 4.15%(b) 8,500,000
Brazos River Authority PCR (Texas Utilities Electric Co.) TECP:
34,170,000 A-1+ 3.85% due 10/30/97(a) 34,171,113
10,000,000 A-1 3.80% due 2/19/98(a) 10,000,000
600,000 P-1* Brazos River Harbor Navy District Revenue (BASF Corp.
Project) 4.05%(b) 600,000
4,100,000 A-1+ Brownsvillle Utility System TECP Series A 3.65% due 10/9/97 4,100,000
Corpus Christi Texas IDA IDR (Dedietrich USA Inc. Project):
3,000,000 P-1* #129AX 4.20%(a)(b) 3,000,000
2,000,000 P-1* #129BX 4.20%(a)(b) 2,000,000
15,000,000 A-1+ Dallas Fort Worth Regional Airport Revenue PART
MBIA-Insured 4.25%(b) 15,000,000
Eagle Tax-Exempt PART:
9,900,000 A-1+ Bexar County 4.25%(a)(b) 9,900,000
8,400,000 A-1+ San Antonio AMBAC-Insured 4.18%(b) 8,400,000
11,000,000 A-1+ Greater East Texas Higher Education Authority Inc.
Student Loan Revenue Senior Lien Series 1995A
3.85% due 5/1/98(a)(c) 11,000,000
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Texas -- 12.9% (continued)
$ 3,100,000 NR++ Guadalupe Blanco River IDA IDR Refunding (BOC Group Inc.
Project) 4.15%(b) $ 3,100,000
2,100,000 A-1+ Gulf Coast Waste Disposal Authority PCR (Amoco
Standard Oil Co. Project) 4.00%(a)(b) 2,100,000
Harris County:
GO Series A TECP:
2,340,000 A-1+ 3.65% due 10/6/97 2,340,000
2,486,000 A-1+ 3.65% due 10/10/97 2,486,000
9,400,000 VMIG 1* Health Facilities Development Corp. Revenue (Buckner
Retirement Services Project) 4.10%(b) 9,400,000
25,910,000 A-1+ PART 4.20%(b) 25,910,000
34,100,000 VMIG 1* TAN 4.25% due 2/27/98 34,176,866
7,000,000 A-1+ Hockley County IDC PCR (Amoco Project)
3.70% due 3/1/98(c) 7,000,000
Houston Airport TECP Series A:
3,000,000 A-1+ 3.70% due 10/9/97(a) 3,000,000
11,200,000 A-1+ 3.70% due 10/14/97(a) 11,200,000
Houston GO TECP:
Series A:
5,000,000 A-1+ 3.70% due 10/1/97 5,000,000
5,000,000 A-1+ 3.70% due 10/16/97 5,000,000
10,000,000 A-1+ Series B 3.65% due 10/10/97 10,000,000
Intermountain Power Agency TECP Series 85F:
10,200,000 A-1+ 3.70% due 10/20/97 10,200,000
5,900,000 A-1+ 3.70% due 10/22/97 5,900,000
9,800,000 A-1+ Katy Independent School District 3.40%(b) 9,800,000
8,000,000 NR++ Leon County IDC IDR (BOC Group Inc. Project) 4.15%(b) 8,000,000
15,000,000 A-1+ Lower Colorado River Authority TECP Series C
3.70% due 11/3/97 15,000,000
15,000,000 VMIG 1* Mansfield Independent School District 4.15%(b) 15,000,000
1,100,000 NR++ McAllen Health Facilities Development Corp. Revenue
(McAllen Associates No. 1) 4.15%(b) 1,100,000
17,900,000 P-1* Midlothina IDC PCR (Crow Cem Co. Project) 4.15%(b) 17,900,000
North Texas Higher Education Authority Inc.
Student Loan Revenue Refunding:
6,700,000 A-1+ Series 1991A 4.10%(a)(b) 6,700,000
3,500,000 SP-1+ Series 1991F AMBAC-Insured 4.10%(a)(b) 3,500,000
5,500,000 SP-1+ Series 1993A 4.10%(a)(b) 5,500,000
15,400,000 VMIG 1* Series 1996C AMBAC-Insured 4.10%(a)(b) 15,400,000
4,000,000 A-1 Plano Health Development Corp. Hospital MBIA-Insured
TECP 3.70% due 10/9/97 4,000,000
Port Corpus Christi IDC Revenue Refunding (Valero Refining):
24,400,000 A-1+ Series C 4.00%(b) 24,400,000
2,100,000 A-1+ Series D 4.20%(a)(b) 2,100,000
15,000,000 A-1+ Richardson Independent School District Series A 4.15%(b) 15,000,000
2,850,000 NR++ Round Rock IDC IDR Refunding (Tellabs Inc. Project) 4.15%(b) 2,850,000
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Texas -- 12.9% (continued)
$23,000,000 VMIG 1* Sabine River Authority PCR (Texas Utilities Project)
Series A MBIA-Insured 4.10%(a)(b) $ 23,000,000
6,000,000 A-1 San Antonio Electric TECP Series A
3.75% due 11/13/97(a) 6,000,000
20,500,000 A-1+ San Antonio Housing Finance Corp. Multi-Family Housing
Revenue (Braesview Apartments Project) 3.70%(a)(b) 20,500,000
3,570,000 A-1+ Texas A&M University Revenue PART AMBAC-Insured
4.20%(b) 3,570,000
57,965,000 VMIG 1* Texas Small Business IDC IDR (Texas Public
Capital Access) 4.10%(b) 57,965,000
194,000,000 SP-1+ Texas State TRAN Series A 4.75% due 8/31/98 195,566,194
5,900,000 VMIG 2* Trinity River Authority PCR (General Motors Corp.
Project) 4.20%(b) 5,900,000
- -----------------------------------------------------------------------------------------------------
734,650,173
- -----------------------------------------------------------------------------------------------------
Utah -- 2.5%
20,000,000 A-1+ Intermountain Power Agency Power Supply Revenue
Series E 3.80% due 6/15/98(c) 20,000,000
4,000,000 A-1+ Morgan County Solid Waste Disposal Revenue
(Holnam Inc. Project) 4.20%(a)(b) 4,000,000
4,945,000 A-1 Ogden City IDR (Infiltrator System Inc. Project)
4.15%(a)(b) 4,945,000
Salt Lake City:
23,000,000 A-1+ Airport Revenue Series A 4.20%(a)(b) 23,000,000
15,000,000 A-1+ Revenue Bonds (IHC Health Services Inc.) 3.70%(b) 15,000,000
17,000,000 NR+ TRAN 4.00% due 12/31/97 17,014,377
4,900,000 VMIG 1* Salt Lake County Housing Authority (Sandy Retirement
Center) 3.80%(b) 4,900,000
Utah State Board Regents Student Loan Revenue:
AMBAC-Insured:
27,000,000 A-1+ Series A 4.10%(a)(b) 27,000,000
15,000,000 VMIG 1* Series C 4.10%(a)(b) 15,000,000
12,600,000 A-1+ Series L 4.10%(a)(b) 12,600,000
- -----------------------------------------------------------------------------------------------------
143,459,377
- -----------------------------------------------------------------------------------------------------
Vermont -- 0.3%
14,200,000 A-1+ Vermont IDA IDR (Ryegate Project) 4.15%(a)(b) 14,200,000
- -----------------------------------------------------------------------------------------------------
Virginia -- 0.6%
2,100,000 A-1+ Brunswick County IDA Facility Revenue (Aegis Waste
Solutions Inc.) 4.25%(b) 2,100,000
4,100,000 VMIG 1* Charles City & County IDA Exempt Facility Revenue
(Chambers Development of Virginia Inc. Project)
4.05%(a)(b) 4,100,000
7,400,000 A-1 Fairfax County IDA (Inova Health Systems) TECP
3.40% due 10/6/97 7,400,000
6,505,000 NR++ Hampton Roads Sanitation Waste Water Revenue PART
4.12%(b) 6,505,000
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Virginia -- 0.6% (continued)
$ 3,000,000 A-1+ King George County IDA Solid Waste Disposal Facility
Revenue (Garnet of VA Inc. Project) 4.20%(a)(b) $ 3,000,000
9,385,000 VMIG 1* Virginia State HDA Commonwealth Mortgage TOB
4.25%(a)(b) 9,385,000
- -----------------------------------------------------------------------------------------------------
32,490,000
- -----------------------------------------------------------------------------------------------------
Washington -- 2.0%
Eagle Tax-Exempt PART:
14,000,000 A-1+ Washington Public Power Services MBIA-Insured
4.18%(b) 14,000,000
14,600,000 A-1+ Washington State GO 3.50% due 1/1/98(c) 14,600,000
17,255,000 A-1+ Pierce County EDA Special Revenue (Weyerhaeuser
Real Estate) 4.00%(b) 17,255,000
1,200,000 P-1* Pierce County EDC Dock and Wharf Facility Revenue
(Securities Industry Project) 4.15%(a)(b) 1,200,000
7,245,000 NR++ Pierce County (Port Sea-Land Service Project) 4.15%(b) 7,245,000
6,500,000 A-1 Port Pasco Economic Development (Douglas Fruit Co. Inc.
Project) 4.20% (a)(b) 6,500,000
Washington Metropolitan Airport Authority TECP:
10,000,000 A-1+ 4.00% due 11/17/97 10,000,000
10,000,000 NR++ 3.95% due 2/20/98(a) 10,000,000
Washington State Housing Finance Commission
Multi-Family Mortgage Revenue:
7,450,000 A-1+ Arbors on the Park Project 4.25%(a)(b) 7,450,000
6,340,000 VMIG 1* Glenbrooke Apartments Project Series A 4.15%(a)(b) 6,340,000
Washington State Public Power Supply:
3,600,000 A-1 Nuclear Project No. 3 Revenue Refunding
Series 3A-2 4.10%(b) Series 3A-2 4.10%(b) 3,600,000
4,998,000 VMIG 1* PART 3.80% due 1/14/98(c) 4,998,000
2,600,000 NR++ Yakima County Washington Public Corp. IDR
(John I. Haas Project) 4.20%(b) 2,600,000
Yakima County Public Corp.:
6,400,000 P-1* Can Am Millwork Limited 4.35%(a)(b) 6,400,000
2,000,000 NR++ Longview Fibre Co. Project 4.30%(a)(b) 2,000,000
- -----------------------------------------------------------------------------------------------------
114,188,000
- -----------------------------------------------------------------------------------------------------
West Virginia -- 0.8%
10,000,000 A-1 Grant County (Electric Power Co.) TECP
3.70% due 11/12/97(a) 10,000,000
950,000 NR++ Harrison County Nursing Facility Revenue Refunding
(Salem Health Care Corp.) 4.00% due 9/1/98(c) 950,000
Marion County Commission Solid Waste Disposal
Facility Revenue (Granttown Project):
5,100,000 A-1+ Series B 4.15%(a)(b) 5,100,000
3,500,000 A-1+ Series D 4.15%(a)(b) 3,500,000
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
West Virginia -- 0.8% (continued)
$ 1,730,000 NR++ Putnam County Solid Waste Disposal Revenue
(FMC Corp.) 4.25%(a)(b) $ 1,730,000
West Virginia Public Energy Authority Revenue
(Morgantown Assoc. Project) TECP:
5,400,000 A-1+ 3.80% due 10/6/97(a) 5,400,000
9,100,000 A-1+ 3.65% due 10/10/97(a) 9,100,000
West Virginia State Hospital Finance Authority Hospital
Revenue Revenue (Mid-Atlantic/Cap) AMBAC-Insured:
5,700,000 A-1 Series D 4.15%(b) 5,700,000
3,090,000 A-1 Series E 4.15%(b) 3,090,000
2,300,000 A-1 Series G 4.15%(b) 2,300,000
- -----------------------------------------------------------------------------------------------------
46,870,000
- -----------------------------------------------------------------------------------------------------
Wisconsin -- 2.8%
9,500,000 NR++ Brokaw Sewer & Solid Waste Revenue (Wausau Paper
Mills Co. Project) 4.35%(a)(b) 9,500,000
11,800,000 A-1+ Eagle Tax-Exempt PART Housing EDA 4.33%(a)(b) 11,800,000
6,605,000 NR+ Milwaukee GO PART 4.20%(b) 6,605,000
10,000,000 SP-1+ Milwaukee RAN Series A 4.50% due 2/19/98 10,032,795
25,500,000 A-1+ University Hospitals & Clinics Authority Revenue
MBIA-Insured 3.70%(b) 25,500,000
Wisconsin GO TECP Series A:
20,246,000 A-1+ 3.65% due 10/6/97 20,246,000
9,157,000 A-1+ 3.65% due 10/8/97 9,157,000
6,074,000 A-1+ 3.625% due 10/14/97 6,074,000
3,500,000 VMIG 1* Wisconsin HEFA Revenue (SSM Health Care Project)
Series A 4.15%(b) 3,500,000
3,850,000 VMIG 1* Wisconsin Housing and Economic Development
Authority Home Ownership Revenue PART
AMBAC-Insured 4.25%(a)(b) 3,850,000
22,005,000 A-1 Wisconsin Housing Economic Development Authority
PART 3.90%(a)(b) 22,005,000
6,320,000 A-1+ Wisconsin Public Power Supply System Revenue
PART AMBAC-Insured 4.20%(b) 6,320,000
4,000,000 SP-1+ Wisconsin State Operating Notes 4.50% due 6/15/98 4,017,894
Wisconsin Transportation Revenue TECP:
10,141,000 A-1 3.70% due 10/7/97 10,141,000
10,000,000 A-1 3.70% due 11/3/97 10,000,000
- -----------------------------------------------------------------------------------------------------
158,748,689
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1997
=====================================================================================================
FACE
AMOUNT RATING SECURITY VALUE
=====================================================================================================
<C> <C> <S> <C>
Wyoming -- 0.5%
$18,000,000 A-1+ Uinta County (Amoco Standard Oil Co.) Series A
3.90% due 12/1/97(c) $ 18,004,595
10,710,000 VMIG 1* Wyoming Community Development Authority
TOB 3.90%(a)(b) 10,710,000
- -----------------------------------------------------------------------------------------------------
28,714,595
- -----------------------------------------------------------------------------------------------------
Miscellaneous -- 2.8%
Capital Realty Investments Tax-Exempt PART:
5,000,000 A-1+ Series 2 4.25%(b) 5,000,000
16,345,000 A-1+ Series 3 4.25%(b) 16,345,000
17,000,000 A-1+ Series 4 4.30%(a)(b) 17,000,000
Clipper Blue Tax-Exempt PART:
8,941,747 VMIG 1* 4.68%(b) 8,941,747
69,186,390 VMIG 1* 95-1 4.28%(a)(b) 69,186,390
22,201,970 VMIG 1* 95-1 4.48%(b) 22,201,970
19,374,638 VMIG 1* 95-2 4.48%(b) 19,374,638
1,890,000 A-1 Pooled Puttable Floating Options Tax-Exempt
PART 4.10%(b) 1,890,000
100,000 VMIG 1* Puerto Rico Commonwealth Government Development
Bank Series 1995 3.70%(b) 100,000
- -----------------------------------------------------------------------------------------------------
160,039,745
- -----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost-- $5,676,795,198**) $5,676,795,198
=====================================================================================================
</TABLE>
(a) Income from these issues is considered a preference item for the purposes
of calculating the alternative tax.
(b) Variable rate obligation payable at par on demand at any time on no more
than seven days notice.
(c) Variable rate obligation payable at par on demand on the date indicated. +
Security has not been rated by either Moody's Investors Service or
Standard & Poor's. However, the Board of Directors has determined this
security to present minimal credit risks.
++ Security has not been rated by either Moody's Investors Service or
Standard & Poor's. However, the Board of Directors has determined this
security to be considered as a first tier quality issue due to enhancement
features; such as insurance and/or an irrevocable letter of credit.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 28 and 29 for definition of ratings and certain security descriptions.
See Notes to Financial Statements.
27
<PAGE>
================================================================================
Bond Ratings
================================================================================
All ratings are by Standard & Poor's Ratings Services ("Standard & Poor's")
except that 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 -- Ratings from "AA" to "BBB" may be modified by the addition
of a plus (+) or a minus (-) sign to show relative standings within the major
rating categories.
AAA -- Debt rated "AAA"' have the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA -- Debt rated "AA" have a very strong capacity to pay interest and repay
principal and differ from the highest rated issue only in a small
degree.
A -- Debt 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 -- Debt rated "BBB" is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits
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 debt in this
category than in higher rated categories.
Moody's -- Numerical modifiers 1, 2 and 3 may be applied to each generic rating
from "Aa" to "Baa", where 1 is the highest and 3 the lowest raking 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 as 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.
NR -- Indicates that the bond is not rated by Standard & Poor's or
Moody's.
28
<PAGE>
================================================================================
Short-Term Securities Ratings
================================================================================
SP-1 -- Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined to
possess overwhelming safety characteristics are denoted with a plus
(+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate demand
obligation (VRDO) rating indicating that the degree of safety
regarding timely payment is either overwhelming or very strong; those
issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign.
A-2 -- Standard & Poor's second highest commercial paper and 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.
MIG 1 -- Moody's highest rate for short-term municipal obligations.
VMIG 1 -- Moody's highest rating for issues having a demand feature -- VRDO.
VMIG 2 -- Moody's second 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
================================================================================
AMBAC -- American Municipal Bond Assurance Corporation
BAN -- Bond Anticipation Notes
CGIC -- Capital Guaranty Insurance Company
EDC -- Economic Development Corporation
EFA -- Educational Facilities Authority
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance Company
FRTC -- Floating Rate Trust Certificates
FSA -- Financial Security Assurance
GO -- General Obligation
HDA -- Housing Development Authority
HEFA -- Health and Educational Facilities Authority
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDC -- Industrial Development Corporation
IDR -- Industrial Development Revenue
MBIA -- Municipal Bond Investors Assurance Corporation
PART -- Partnership Structure
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PFA -- Public Facilities Authority
RAN -- Revenue Anticipation Notes
RAW -- Revenue Anticipation Warrants
STEM -- Short-Term Extendable Maturity
SWAP -- Swap Structure
TAN -- Tax Anticipation Notes
TECP -- Tax Exempt Commercial Paper
TOB -- Tender Option Bond
TRAN -- Tax & Revenue Anticipation Notes
VHA -- Veterans Housing Authority
29
<PAGE>
================================================================================
Statement of Assets and Liabilities (unaudited) September 30, 1997
================================================================================
ASSETS:
Investments, at amortized cost $ 5,676,795,198
Cash 72,418
Interest receivable 37,222,042
Receivable for securities sold 21,000,000
- -------------------------------------------------------------------------------
Total Assets 5,735,089,658
- -------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 154,500,250
Dividends payable 7,978,628
Management fees payable 2,221,042
Distribution fees payable 177,206
Accrued expenses 1,381,767
- -------------------------------------------------------------------------------
Total Liabilities 166,258,893
- -------------------------------------------------------------------------------
Total Net Assets $5,568,830,765
===============================================================================
NET ASSETS:
Capital stock (10,000,000,000 shares
authorized; par value $0.01 per share) $ 55,696,556
Capital paid in excess of par value 5,514,318,080
Accumulated net realized loss on security transactions (1,183,871)
- -------------------------------------------------------------------------------
Total Net Assets $5,568,830,765
===============================================================================
Shares Outstanding:
Class A 5,565,433,988
----------------------------------------------------------------------------
Class C 4,651
----------------------------------------------------------------------------
Class Y 4,217,006
----------------------------------------------------------------------------
Net Asset Value, per share $1.00
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
30
<PAGE>
================================================================================
Statement of Operations (unaudited)
================================================================================
For the Six Months Ended September 30, 1997
INVESTMENT INCOME:
Interest $106,391,703
- --------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 13,534,623
Distribution fees (Note 3) 2,796,952
Shareholder and system servicing fees 958,178
Registration fees 430,500
Shareholder communications 95,620
Custody 74,094
Audit and legal 19,841
Directors' fees 10,155
Other 32,852
- --------------------------------------------------------------------------------
Total Expenses 17,952,815
- --------------------------------------------------------------------------------
Net Investment Income 88,438,888
- --------------------------------------------------------------------------------
Net Realized Gain From Security Transactions 176,984
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 88,615,872
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
31
<PAGE>
================================================================================
Statements of Changes in Net Assets
================================================================================
For the Six Months Ended September 30, 1997 (unaudited)
and the Year Ended March 31, 1997
September 30 March 31
===============================================================================
OPERATIONS:
Net investment income $ 88,438,888 $ 156,274,255
Net realized gain (loss) 176,984 (68,434)
- -------------------------------------------------------------------------------
Increase in Net Assets From Operations 88,615,872 156,205,821
- -------------------------------------------------------------------------------
DISTRIBUTIONS TOSHAREHOLDERS (NOTE 2) (88,438,888) (156,274,255)
- -------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sale of shares 12,069,866,589 23,013,880,836
Net asset value of shares issued for
reinvestment of dividends 85,148,198 155,223,817
Cost of shares reacquired (12,153,277,993) (23,015,472,861)
- -------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 1,736,794 153,631,792
- -------------------------------------------------------------------------------
Increase in Net Assets 1,913,778 153,563,358
NET ASSETS:
Beginning of period 5,566,916,987 5,413,353,629
- -------------------------------------------------------------------------------
End of period $ 5,568,830,765 $ 5,566,916,987
===============================================================================
See Notes to Financial Statements.
32
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Municipal Money Market 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) the Fund uses the
amortized cost method for valuing investments; accordingly, the cost of
securities plus accreted discount, or minus amortized premium, approximates
value; (c) interest income, adjusted for amortization of premium and accretion
of original issue discount, is recorded on the accrual basis; market discount is
recognized upon the disposition of the security; (d) direct expenses are charged
to each class; management fees and general expenses are allocated on the basis
of relative net assets by class; (e) gains or losses on the sale of securities
are calculated by using the specific identification method; (f) dividends and
distributions to shareholders are recorded on the ex-dividend date; (g) the Fund
intends to comply with the applicable provisions of the Internal Revenue Code
pertaining to regulated investment companies and make distributions of taxable
income sufficient to relieve it from substantially all Federal income and excise
taxes; (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; and (i) estimates and assumptions are required to be made
regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
2. EXEMPT-INTEREST DIVIDENDS AND OTHER DISTRIBUTIONS
The Fund declares and records a dividend of substantially all of its net
investment income on each business day. Such dividends are paid or reinvested
monthly in Fund shares on the payable date. Furthermore, the Fund intends to
satisfy conditions that will enable interest from municipal securities, which is
exempt from regular Federal income tax and from designated state income taxes,
to retain such status when distributed to its shareholders.
Capital gain distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
33
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
3. MANAGEMENT AGREEMENT AND OTHER TRANSACTIONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment manager of the Fund. The Fund
pays SBMFM a management fee calculated at the annual rate of 0.50% on the first
$2.5 billion of the Fund's average daily net assets, 0.475% on the next $2.5
billion and 0.45% on average daily net assets in excess of $5.0 billion. These
fees are calculated daily and paid monthly.
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts as distributor
of Fund shares. Pursuant to a Distribution Plan, the Fund pays SB a service fee
calculated with respect to Class A and C shares at the annual rate of 0.10% of
the Fund's average daily net assets.
All officers and one Director of the Fund are employees of SB.
4. CAPITAL LOSS CARRYFORWARD
At March 31, 1997, the Fund had, for Federal income tax purposes,
approximately $1,361,000 of capital loss carryforwards available to offset
future capital gains. To the extent that these carryforward losses are used to
offset capital gains, it is possible that the gains so offset will not be
distributed. The amount and expiration of the carryforwards are indicated below.
Expiration occurs on March 31 of the year indicated.
2000 2001 2002 2003 2004
- --------------------------------------------------------------------------------
Carryforward Amounts $97,000 $1,086,000 $37,000 $72,000 $69,000
- --------------------------------------------------------------------------------
5. CAPITAL SHARES
The Fund has the ability to establish 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. Class A and Class Y shares can be purchased
directly by investors. Class C shares are not available for purchase. They
represent previously issued B shares, which were renamed as Class C shares
effective November 7, 1994. Class C shares may only be redeemed or exchanged out
of the Fund.
At September 30, 1997, total paid-in capital amounted to the following for
each class:
Class A Class C Class Y
- --------------------------------------------------------------------------------
Total Paid-in Capital $5,565,791,797 $4,651 $4,218,188
- --------------------------------------------------------------------------------
34
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
Transactions in shares of each class were as follows:
Six Months Ended Year Ended
September 30, 1997 March 31,1997
================================================================================
Class A
Shares sold 12,064,871,397 22,921,128,655
Shares issued on reinvestment 85,070,529 154,549,067
Shares redeemed (12,147,656,267) (22,908,963,488)
- --------------------------------------------------------------------------------
Net Increase 2,285,659 166,714,234
================================================================================
Class C
Shares sold -- 199,991
Shares issued on reinvestment 141 3,890
Shares redeemed (10,611) (232,619)
- --------------------------------------------------------------------------------
Net Decrease (10,470) (28,738)
================================================================================
Class Y
Shares sold 4,995,192 92,552,190
Shares issued on reinvestment 77,528 670,860
Shares redeemed (5,611,115) (106,276,754)
- --------------------------------------------------------------------------------
Net Decrease (538,395) (13,053,704)
================================================================================
35
<PAGE>
================================================================================
Financial Highlights
================================================================================
For a share of each class of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Class A Shares 1997(1) 1997 1996 1995 1994 1993
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------------------------------------------
Net investment income(2) 0.016 0.029 0.033 0.027 0.019 0.022
Dividends from
net investment income (0.016) (0.029) (0.033) (0.027) (0.019) (0.022)
- --------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------------------------------------------
Total Return 1.59%++ 2.94% 3.34% 2.71% 1.89% 2.25%
- --------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (millions) $ 5,565 $ 5,562 $ 5,395 $ 4,651 $ 1,286 $ 1,251
- --------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(2) 0.64%+ 0.67% 0.63% 0.61% 0.64% 0.62%
Net investment income 3.15+ 2.90 3.28 3.01 1.87 2.22
====================================================================================================================
Class C Shares 1997(1) 1997 1996 1995(3) 1994(4)
====================================================================================================================
Net Asset Value,
Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------------------------------------------
Net investment income(2) 0.016 0.029 0.033 0.027 0.019
Dividends from
net investment income (0.016) (0.029) (0.033) (0.027) (0.019)
- --------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------------------------------------------------
Total Return 1.60%++ 2.94% 3.34% 2.71% 1.89%++
- --------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (millions) $ 0.01 $ 0.02 $ 0.04 $ 1.0 $ 5.0
- --------------------------------------------------------------------------------------------------------------------
Ratios of Average Net Assets:
Expenses(2) 0.64%+ 0.67% 0.60% 0.61% 0.64%+
Net investment income 3.20+ 2.89 3.43 3.01 1.87+
====================================================================================================================
</TABLE>
(1) For the six months ended September 30, 1997 (unaudited).
(2) The manager has waived a part of its fees for the years ended March 31,
1996 and March 31, 1995. If such fees were not waived, the per share
effect on net investment income and expense ratios would have been as
follows:
Per Share Decreases Expense Ratios
to Net Investment Income Without Fee Waivers
1996 1995 1996 1995
---- ---- ---- ----
Class A $0.0001 $0.0002 0.64% 0.63%
Class C 0.0001 0.0002 0.62 0.63
(3) On November 7, 1994, the former Class B shares were renamed Class C
shares.
(4) For the period from May 25, 1993 (inception date) to March 31, 1994.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
36
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each period:
Class Y Shares 1997(1) 1997 1996(2)
- -------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------
Net investment income 0.016 0.030 0.004
Dividends from net investment income (0.016) (0.030) (0.004)
- -------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------
Total Return 1.64%++ 3.04% 0.39%++
- -------------------------------------------------------------------------------
Net Assets, End of Period (in millions) $ 4.0 $ 5.0 $ 18.0
- -------------------------------------------------------------------------------
Ratios of Average Net Assets:
Expenses 0.54%+ 0.57% 0.55%+
Net investment income 3.24+ 3.00 2.81+
- -------------------------------------------------------------------------------
(1) For the six months ended September 30, 1997 (unaudited).
(2) For the period from February 12, 1996 (inception date) to March 31, 1996.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
37
<PAGE>
Smith Barney [LOGO FOR SMITH BARNEY]
Municipal Money
Market Fund, Inc.
Directors
Joseph H. Fleiss
Donald R. Foley
Paul Hardin
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
C. Richard Youngdahl, Emeritus
Officers
Heath B. McLendon
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Joseph Benevento
Vice President
Lawrence T. McDermott
Vice President
Irving P. David
Controller
Christina T. Sydor
Secretary
Investment Manager
Smith Barney Mutual
Funds Management Inc.
Distributor
Smith Barney Inc.
Custodian
PNC Bank, N.A.
Shareholder
Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 1376
Boston, MA 02104
This report is submitted for the general information of the shareholders of
Smith Barney Municipal Money Market Fund, Inc. It is not authorized for
distribution to prospective investors unless accompanied or preceded by a
current Prospectus for the Fund, which contains information concerning the
Fund's investment policies and expenses as well as other pertinent information.
Smith Barney
Municipal Money
Market Fund, Inc.
388 Greenwich Street
New York, New York 10013
FD0807 11/97
