<PAGE>
DESCRIPTION OF ARTWORK ON REPORT COVER
Small box above fund name showing a palm tree overlooking Hollywood,
Mulhular
Drive.
SMITH BARNEY
CALIFORNIA
MUNICIPALS
FUNDS, INC.
SEMI-ANNUAL REPORT
AUGUST 31, 1994
SMITH BARNEY
<PAGE>
CALIFORNIA MUNICIPALS FUND INC.
DEAR SHAREHOLDER:
We are pleased to provide you with the Semi-Annual Report which includes
the
portfolio of investments for Smith Barney California Municipals Fund Inc.
for
the six-month period ended August 31, 1994. During the past six months, in
response to declining prices for municipal bonds, the Fund's net asset
value
for Class A and Class B shares declined to $15.56 from $16.15 per share.
Investors owning Class A shares received income distributions of $0.45 per
share; investors owning Class B shares received income distributions of
$0.40
per share. The total return for the six-month period was (0.85%) for Class
A
shares and (1.12%) for Class B shares. Further information about the
performance of your investment during this and previous fiscal periods is
available from the "Financial Highlights" pages of this report.
ECONOMIC OVERVIEW
When we last reported to shareholders in February of this year, in the
Annual
Report, the economy had turned in a very powerful fourth quarter. We
expected
then that the economy would experience steady, healthy growth in 1994, and
we
were not disappointed. Between February and the end of August, the economy
did
extremely well. It has moderated a little since the fourth quarter, but
nevertheless has shown solid, steady growth.
The continued strength in the economy and some very early signs of an
increase
in inflation caused the Federal Reserve Bank to raise the Federal funds
rate (a
sensitive indicator of the direction of interest rates) from 3% at the
beginning
of 1994 to 4.75%. Long-term interest rates also rose, causing a decline in
the
price of bonds because of the inverse relationship between yield and price.
Between now and the end of the year, we would not be surprised to see the
Federal Reserve Bank raise the Federal funds rate to 5%. Looking forward,
we
would expect the economy to slow somewhat over the next three-to-four
months as
the effects of this significant rise in interest rates works its way
through the
economy. Interest rates, both taxable and tax-exempt, appear now to
represent
very fair values and we believe long-term rates will probably move lower
from
where they are right now as the economy begins to slow.
THE CALIFORNIA ECONOMY
California still has not come to terms with its budget deficit, and we
believe
that the state is probably close to hitting its economic bottom. The
federal aid
that went to California after the January earthquake could have jump-
started the
economy had they not had more military base closings and cutbacks in the
defense
industry. In addition, because of the disproportionate number of fairly
wealthy
people in California, relative to the population base, the Clinton tax
increase
has hit California harder than most states. This in turn has exerted a drag
on
the economy. We
1
<PAGE>
consequently continue to avoid the state's general obligation issues as
well as
any lease revenue bonds that get their rating from the state rating.
THE MUNICIPAL MARKET AND PORTFOLIO STRATEGY
As we explained in our February report, the municipal market had been quite
volatile since late October. In March and April, the market had another
fairly
violent downward move. In our opinion, the worst of the market volatility
is now
behind us and volatility will continue to decline as municipal new issuance
declines and investor demand for tax-exempt income continues to increase.
In
1993, there was $300 billion in municipal issuance; in contrast, new
issuance in
1994 is likely to be approximately $140 to $170 billion -- a reduction of
nearly
50 percent.
As you will recall, we had defensively positioned the Fund by shortening
its
average maturity, raising cash, and, for the first time in over three
years,
hedging the portfolio using futures contracts. When 30-year Treasury bond
yields
came close to 7.50%, we believed that the worst of the market volatility
was
over and changed our investment stance. We began lengthening the Fund's
average
maturity and began buying high-quality, investment grade bonds.
Callable and pre-refunded bonds are still an ongoing source of concern for
municipal investors. We are working very hard at keeping low (which we
define as
approximately 5%) the number of bonds in the Fund that have call dates
within
the next 15 to 18 months. A large number of callable bonds could
potentially
impact a fund's income stream fairly dramatically if it loses a lot of its
older, higher coupon bonds.
In mid-November of this year, the way Smith Barney mutual funds are listed
in
the newspaper will change to reflect our consolidated mutual fund family.
Before
the consolidation, the various Classes of Smith Barney and Smith Barney
Shearson
mutual funds were listed in the press under separate headings. Now, all
funds
will appear under the heading "Smith Barney." Your Smith Barney Financial
Consultant will be able to help you locate funds in your newspaper.
On a final note, we are pleased to tell you that Joseph Deane, your
portfolio
manager, continues to be recognized in the national press as one of the
leading
municipal bond portfolio managers in the country. In addition to his
frequent
appearances in The Wall Street Journal and The Bond Buyer, Joe recently was
profiled in the October 3rd issue of Barron's.
We appreciate your continued confidence in our management skills during
this
difficult market environment. We look forward to reporting to you in the
Fund's
Annual Report.
Sincerely,
Health B. McLendon Joseph P. Deane
Chairman of the Board Vice President
and Investment Officer and Investment Officer
October 17, 1994
2
<PAGE>
Smith Barney
California Municipals Fund Inc.
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PORTFOLIO HIGHLIGHTS (UNAUDITED) AUGUST 31,
1994
<TABLE>
INDUSTRY BREAKDOWN
Pie chart depicting the allocation of the California Municipals Fund Inc.
securities held at August 31, 1994 by industry classification. The pie is
broken in pieces representing industries in the following percentages:
<CAPTION>
INDUSTRY PERCENTAGE
<S> <C>
Utilities 19.9%
Transportation 7.8%
Water and Sewer 0.9%
Hospital 13.4%
Other Municipal Bonds, Short-Term
Tax-Exempt Investements and Net
Other Assets and Liabilities 33.5%
Pollution Control Revenue 6.3%
Housing 5.0%
Education 3.9%
General Obligations 9.3%
</TABLE>
<TABLE>
SUMMARY OF MUNICIPAL BONDS AND SHORT-TERM
TAX-EXEMPT INVESTMENTS BY COMBINED RATINGS
<CAPTION>
Standard & Percentage of
Moody's Poor's Market Value
- ---------------------------------------------
<S> <C> <C>
AAA AAA 53.9%
AA AA 17.6
A A 15.6
BAA BBB 6.4
B B 0.1
VMIG1/P-1 A1 0.9
NR NR 5.5
-----
100.0%
-----
</TABLE>
AVERAGE MATURITY 20.54 years
3
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) AUGUST 31,
1994
- ---------------------------------------------------------------------------
- -----
KEY TO INSURANCE ABBREVIATIONS
- ---------------------------------------------------------------------------
- -----
AMBAC -- American Municipal Bond Assurance Corporation
BIGI -- Bond Investors Guaranty Insurance
FGIC -- Federal Guaranty Insurance Corporation
FHA -- Federal Housing Administration
MBIA -- Municipal Bond Investors Assurance
STINS -- State Insurance
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES - 96.4%
CALIFORNIA - 95.0%
$ 2,500,000 Alhambra Arcadia Azush County, California,
Independent Cities Authority, Risk
Management, Certificates of Participation,
7.250% due 3/1/07 NR NR
$ 2,568,750
4,500,000 Alhambra, California, Redevelopment Agency,
Tax Allocation, (AMBAC Insured),
5.850% due 5/1/23 Aaa
AAA 4,280,625
200,000 Anaheim, California, Certificates of
Participation,
(Convention Center, Refunding Project),
(MBIA Insured),
5.700% due 8/1/02 Aaa
AAA 206,000
Association of Bay Area Governments (ABAG),
Financing for Nonprofit Corporations,
California,
Certificates of Participation,
(Stanford University Hospital):
2,100,000 5.250% due 11/1/06 Aa
AA- 2,008,125
3,305,000 5.250% due 11/1/07 Aa
AA- 3,135,619
5,120,000 5.250% due 11/1/08 Aa
AA- 4,819,200
8,955,000 5.500% due 11/1/13 Aa
AA- 8,149,050
5,935,000 5.250% due 11/1/20 Aa
AA- 5,022,494
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
Smith Barney
California Municipals Fund Inc.
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- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
Banning, California, Certificates of
Participation,
(Banning Wastewater Facilities Corporation):
$ 115,000 11.500% due 11/1/03 NR
AAA $ 139,869
125,000 11.500% due 11/1/04 NR
AAA 152,344
140,000 11.600% due 11/1/05 NR
AAA 171,325
155,000 11.650% due 11/1/06 NR
AAA 190,263
175,000 11.700% due 11/1/07 NR
AAA 215,469
195,000 11.750% due 11/1/08 NR
AAA 240,581
220,000 11.750% due 11/1/09 NR
AAA 271,975
2,695,000 Bay Area Government Association, California,
Revenue, Napa Water Systems Project,
(MBIA Insured),
5.375% due 5/1/10 Aaa
AAA 2,526,563
3,510,000 Brea, California, Redevelopment Agency
Revenue,
(Project A), Tax Allocation Revenue Bonds,
(MBIA Insured),
5.500% due 8/1/08 Aaa
AAA 3,404,700
Brisbane, California, Brisbane Redevelopment
Agency, Tax Allocation for Brisbane Community
Redevelopment, General Obligations:
200,000 9.400% due 5/1/05 NR
AA- 209,500
220,000 9.400% due 5/1/06 NR
AA- 230,450
California Alternative Energy Source,
Financing
Authority Revenue:
210,000 (Richmond Methane Recovery Project),
7.500% due 12/1/94 NR NR
210,263
1,000,000 (SRI International Project), Cogeneration
Revenue,
9.750% due 12/1/05 (in default) NR NR
500,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
Smith Barney
California Municipals Fund Inc.
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- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
California Department of Water Resources,
Central Valley Project Revenue:
$ 2,250,000 Series L,
5.500% due 12/1/23 Aa AA
$ 2,005,313
5,415,000 Series M,
5.000% due 12/1/14 Aa AA
4,602,750
2,500,000 California Educational Facilities, Revenue
Bonds,
(University of San Diego),
6.500% due 10/1/22 A NR
2,525,000
California Health Facilities Financing
Authority
Revenue Bonds:
5,000,000 5.550% due 8/15/25 Aa2 AA
4,431,250
1,000,000 (Adventist Health-West), Series A,
(MBIA Insured),
10.000% due 3/1/14 Aaa
AAA 1,051,040
250,000 (St. Joseph's Health System), Series 1984B,
9.750% due 7/1/99 NR
AAA 264,375
4,000,000 (Sutter Community Hospital, Sacramento),
9.250% due 1/1/13 A1 A+
4,140,000
250,000 (Victory Valley Community Hospital),
Series 1984A, (STINS Insured),
9.875% due 7/1/12 NR A+
258,750
California Housing Finance Agency,
(Home Ownership Mortgage):
Series A:
30,000 9.200% due 8/1/15 Aa AA
31,050
4,750,000 (MBIA Insured),
5.500% due 2/1/14 Aaa
AAA 4,334,375
10,000 Series 1984,
10.250% due 2/1/14 Aa A+
10,088
460,000 Series 1984B,
Zero Coupon due 8/1/16 Aa A+
41,975
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Smith Barney
California Municipals Fund Inc.
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- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
$ 605,000 California Public Capital Improvement Finance
Authority, Joint Power Agency, Series 1988B,
(BIGI Insured),
8.100% due 3/1/18 Aaa
AAA $ 654,156
2,000,000 California Special Districts Finance
Authority,
Certificates of Participation, Series 1988A,
8.500% due 7/1/18 Baa1 NR
2,212,500
California State, General Obligation Bonds,
Veteran Series:
4,000,000 9.700% due 2/1/01 A1 AA
4,910,000
455,000 9.700% due 4/1/02 A1 AA
571,025
725,000 9.000% due 10/1/02 A1 AA
879,969
2,000,000 8.400% due 10/1/06 A1 AA
2,412,500
1,000,000 9.500% due 2/1/10 A1 AA
1,347,500
California Statewide Communities Development
Authority, Lease Revenue,
Certificates of Participation:
2,680,000 5.000% due 10/1/14 Aaa
AAA 2,304,800
(Sutter Health Facilities), (MBIA Insured):
3,145,000 5.400% due 8/15/07 Aaa
AAA 3,011,338
3,315,000 5.500% due 8/15/08 Aaa
AAA 3,169,969
3,500,000 5.500% due 8/15/09 Aaa
AAA 3,320,625
(St. Joseph's Health Facilities):
7,000,000 5.500% due 7/1/09 Aa AA
6,527,500
7,000,000 5.500% due 7/1/10 Aa AA
6,475,000
4,825,000 5.500% due 7/1/14 Aa AA
4,354,563
(Unihealth Facilities Corporation), (AMBAC
Insured):
11,370,000 5.500% due 10/1/06 Aaa
AAA 11,099,963
4,515,000 5.500% due 10/1/07 Aaa
AAA 4,362,619
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
$ 3,000,000 Concord, California, Redevelopment Agency,
Tax Allocation, Central Concord Redevelopment,
Project, (MBIA Insured),
5.250% due 7/1/19 Aaa
AAA $ 2,598,750
6,000,000 Corona, California, Redevelopment Agency,
Tax Allocation, Area A,
(FGIC Insured), Series A,
5.500% due 9/1/24 Aaa
AAA 5,400,000
150,000 Cucamonga, California, County Water District,
Certificates of Participation, (FGIC Insured),
6.000% due 9/1/03 Aaa
AAA 156,563
5,000,000 Culver City, California, Redevelopment Finance
Authority Revenue, (AMBAC Insured),
5.000% due 11/1/23 Aaa
AAA 4,112,500
Desert Sands, California, Unified School
District,
(Measure "O" Project), Series C:
6,365,000 4.900% due 3/1/02 A NR
5,959,231
1,000,000 5.100% due 3/1/04 A NR
925,000
Dublin, California, Certificates of
Participation,
(Civic Center Project), (AMBAC Insured):
1,305,000 5.600% due 2/1/06 Aaa
AAA 1,296,844
1,380,000 5.625% due 2/1/07 Aaa
AAA 1,361,025
4,615,000 5.625% due 2/1/10 Aaa
AAA 4,453,475
2,000,000 East Bay, California, Municipal Utility
Distribution,
Water System Revenue, (MBIA Insured),
5.000% due 6/1/21 Aaa
AAA 1,660,000
Eastern Municipal Water District, California,
Water and Sewer Revenue, (FGIC Insured),
Series A:
1,000,000 5.375% due 7/1/13 Aaa
AAA 921,250
1,000,000 5.250% due 7/1/23 Aaa
AAA 860,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
$ 2,150,000 Fairfield, California, Public Finance
Authority,
Revenue, (MBIA Insured),
5.800% due 4/1/23 Aaa
AAA $ 2,012,938
2,250,000 Fontana, California, Public Financing
Authority,
Tax Allocation Revenue Bonds, Series A,
(MBIA Insured),
5.000% due 9/1/20 Aaa
AAA 1,873,125
Foothill, California, Transit Zone
Certificates, Series A:
1,930,000 5.150% due 11/1/01 Baa1 NR
1,843,150
1,000,000 5.350% due 5/1/03 Baa1 NR
948,750
455,000 Fresno, California, Airport Revenue Bonds,
10.900% due 7/1/14 A NR
477,181
Fresno, California, Health Facilities Revenue,
(Holy Cross Health System):
2,200,000 5.200% due 12/1/04 A1
AA- 2,123,000
2,435,000 5.375% due 12/1/06 A1
AA- 2,343,688
2,565,000 5.400% due 12/1/07 A1
AA- 2,449,575
2,705,000 5.500% due 12/1/08 A1
AA- 2,576,513
Fresno, California, Joint Powers Financing
Authority, Lease Revenue, (Street Light
Acquisition Project), Series A:
200,000 5.375% due 8/1/03 A A+
192,500
3,860,000 5.500% due 8/1/12 A A+
3,454,700
Fresno, California, Joint Powers Financing
Authority Local Agency Revenue, Series A:
2,000,000 6.000% due 9/2/01 NR
BBB 1,987,500
1,000,000 6.200% due 9/2/03 NR
BBB 993,750
1,500,000 6.550% due 9/2/12 NR
BBB 1,445,625
25,000 Fresno County, California, Housing Finance
Revenue, Series A, (FHA Insured),
12.500% due 9/15/12 NR NR
25,469
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Smith Barney
California Municipals Fund Inc.
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- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
Garden Grove, California, Community Agency,
Tax Allocation Revenue:
$ 500,000 5.375% due 10/1/03 NR A
$ 474,375
3,275,000 5.700% due 10/1/08 NR A
3,045,750
Goleta, California, Water District Revenue,
Certificates of Participation, (FGIC Insured):
3,950,000 5.375% due 12/1/06 Aaa
AAA 3,866,063
1,430,000 5.500% due 12/1/08 Aaa
AAA 1,387,100
2,000,000 Hawthorne, California, Community
Redevelopment,
Tax Allocation,
6.625% due 9/1/14 Baa NR
1,910,000
1,750,000 Hayward, California, Housing Authority
Revenue,
FNMA, Multifamily Revenue, (Cypress Garden
Project), Revenue Bonds, Series C,
9.375% due 12/1/18 NR
AAA 1,850,625
10,000 Huntington Beach, California, Home Mortgage,
Financing Program, Revenue Bonds, Series
1984A,
11.000% due 7/1/17 A NR
10,650
1,500,000 Intercommunity Hospital, California, Financing
Authority, Certificates of Participation,
(North Bay Health Care),
9.750% due 8/1/15 NR
AAA 1,620,000
Irvine Ranch, California, Water District,
Joint Powers Agency, Local Pool Revenue, Issue
II:
9,000,000 7.800% due 2/15/08 NR A
9,540,000
8,500,000 8.250% due 8/15/23 NR A+
9,169,375
1,500,000 Kings River Conservation District, California,
Pine Flat Power Revenue, Series C,
5.500% due 1/1/20 Aa AA
1,381,875
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
$ 100,000 Kern, California, High School District, Series
C,
(MBIA Insured),
8.750% due 8/1/03 Aaa
AAA $ 121,375
2,000,000 Lancaster, California, Redevelopment Agency,
Tax Allocation Bond, (MBIA Insured),
5.700% due 8/1/23 Aaa
AAA 1,857,500
2,000,000 Multifamily Housing Revenue, (High Valley
Apartment Project), (FHA Insured),
9.180% due 11/1/13 NR A-
2,060,000
465,000 Local Government Finance, Joint Powers
Authority, California Revenue, (Anaheim
Redevelopment Agency), Series A,
8.200% due 9/1/15 A A-
530,680
2,000,000 Loma Linda, California, Hospital Revenue
Bonds, (Loma Linda University Medical Center
Project), Series B,
9.000% due 12/1/12 NR
BBB 2,150,000
3,850,000 Long Beach, California, Financing Authority
Revenue (AMBAC Insured),
5.500% due 11/1/22 Aaa
AAA 3,479,438
200,000 Los Angeles, California, Certificates of
Participation, Refunding Bonds, Waste Water,
6.600% due 11/1/99 A1 AA
211,250
1,000,000 Los Angeles, California, Community
Redevelopment Agency, Tax Allocation Bond,
(Central Business District), Series F,
8.500% due 7/1/02 NR A-
1,050,000
Los Angeles, California, Convention And
Exhibition Center Authority, Lease Revenue,
Series A,
(MBIA Insured):
6,000,000 5.375% due 8/15/18 Aaa
AAA 5,317,500
7,000,000 5.125% due 8/15/21 Aaa
AAA 5,897,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
$ 1,595,000 Los Angeles, California, Home Mortgage Revenue
Bonds, GNMA, Second Mortgage Program,
8.100% due 5/1/17 Aaa
AAA $ 1,714,625
2,000,000 Los Angeles, California, Sanitation District,
Series A,
5.250% due 10/1/19 Aa AA
1,727,500
20,075,000 Los Angeles, California, Transportation
Authority Sales Tax Revenue, (Project A),
Series A, (FGIC Insured),
5.000% due 7/1/21 Aaa
AAA 16,662,250
Los Angeles, California, Wastewater Systems
Revenue, Series A, (MBIA Insured):
2,930,000 5.700% due 6/1/09 Aaa
AAA 2,867,737
7,960,000 5.750% due 6/1/11 Aaa
AAA 7,731,150
12,825,000 5.700% due 6/1/20 Aaa
AAA 11,975,344
2,500,000 5.875% due 6/1/24 Aaa
AAA 2,384,375
1,500,000 Los Angeles County, California, Certificates
of Participation, (Van Nuys Courthouse
Project),
9.000% due 6/1/15 NR
AAA 1,646,250
Marin County, California, Municipal Water
District Revenue:
935,000 5.450% due 7/1/07 A1 AA
890,588
1,485,000 5.500% due 7/1/08 A1 AA
1,405,180
125,000 Martinez, California, Home Mortgage,
(Escrowed to Maturity), Housing Revenue,
10.750% due 2/1/16 Aaa
AAA 131,094
375,000 Marysville, California, Hospital Revenue,
(Freemont Rideout Health Group), Series A,
(AMBAC Insured),
6.000% due 1/1/04 Aaa
AAA 388,594
4,890,000 Metropolitan Water District of Southern
California, Series G,
5.750% due 3/1/14 Aaa
AAA 4,724,963
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
Mojave, California, Water Agency, Improvement
District, Series M, (Morongo Basin):
$ 1,500,000 6.600% due 9/1/13 Baa1
BBB+ $ 1,515,000
3,410,000 6.600% due 9/1/22 Baa1
BBB+ 3,414,263
3,000,000 New Haven, California, Unified School
District, School Building Corporation,
Certificates of Participation, Refunding
Bonds,
9.600% due 7/1/01 NR A-
3,196,590
45,000 Northern California Power Agency, Public Power
Revenue Bonds, (Geothermal Project No. 8),
Series 1984A,
11.500% due 7/1/95 Aaa
AAA 46,350
200,000 Oakland, California, Redevelopment Agency,
Certificates of Participation,
(Oakland Convention Center),
10.250% due 9/1/14 NR A
206,035
1,000,000 Olivenhain, California, Municipal Water
District, Water Revenue, (AMBAC Insured),
5.400% due 6/1/09 Aaa
AAA 953,750
Ontario, California, Redevelopment Financing
Authority, (MBIA Insured):
1,550,000 5.500% due 8/1/07 Aaa
AAA 1,511,250
1,635,000 5.500% due 8/1/08 Aaa
AAA 1,577,775
10,575,000 Orange County, California, Housing Finance
Agency, Single Family Residential Mortgage,
Revenue Bonds, Tax-Exempt Interest
Accumulator,
Zero Coupon due 7/1/17 NR
BBB+ 1,202,905
2,800,000 Orange County, California, Sanitation
Districts No. 1, 2 & 3, Certificates of
Participation, (Joint Facility Report),
12.000% due 8/1/96 Aaa A
3,192,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
Orange County, California, Water District
Revenue, Certificates of Participation:
$ 4,300,000 5.500% due 8/15/08 Aa AA
$ 4,133,375
5,515,000 Series A,
5.400% due 8/15/07 Aa AA
5,308,188
2,455,000 Oxnard, California, Public Facilities
Corporation, Certificates of Participation,
(Oxnard Public Facility Corporation), (AMBAC
Insured),
7.500% due 9/1/06 Aaa
AAA 2,746,530
180,000 Palm Springs, California, Financing Authority,
(Palm Springs Regional Airport Revenue), (MBIA
Insured),
5.400% due 1/1/03 Aaa
AAA 181,350
2,350,000 Palomar Pomerado Hospital District,
California,
(MBIA Insured),
5.000% due 11/1/13 Aaa
AAA 2,006,313
6,750,000 Pittsburg, California, Redevelopment Agency,
(Los Medenos Community Project), (FGIC
Insured),
5.500% due 8/1/15 Aaa
AAA 6,252,187
2,000,000 Port Oakland, California, Special Facilities
Revenue, Series A,
6.750% due 1/1/12 Aa3 AA
2,000,000
6,000,000 Poway, California, Redevelopment Agency,
(Paraguay Redevelopment Project), (FGIC
Insured),
5.500% due 12/15/23 Aaa
AAA 5,407,500
6,150,000 Rancho Cucamonga, California, (Rancho
Redevelopment Project), (MBIA Insured),
5.500% due 9/1/23 Aaa
AAA 5,535,000
2,000,000 Redding, California, Joint Powers Finance
Authority, (Solid Waste and Corporate Yard),
Series A,
5.500% due 1/1/13 A
BBB+ 1,755,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
Rialto, California, Certificates of
Participation, Wastewater Systems Revenue,
(MBIA Insured):
$ 1,005,000 5.400% due 11/1/06 Aaa
AAA $ 984,900
1,000,000 5.500% due 11/1/07 Aaa
AAA 978,750
1,000,000 5.500% due 11/1/08 Aaa
AAA 968,750
1,500,000 Riverside, California, Redevelopment Agency,
Series A, (MBIA Insured),
5.625% due 8/1/23 Aaa
AAA 1,378,125
1,005,000 Riverside, California, Unified School
District,
Certificates of Participation, (Air
Conditioning Equipment Facilities Project),
9.000% due 7/15/00 NR A-
1,026,355
1,470,000 Riverside County, California, Housing
Authority Revenue Bonds, Series A,
7.900% due 10/1/18 Baa NR
1,541,663
35,000 Riverside County, California, Single Family
Revenue Bonds,
10.500% due 9/1/14 NR
BBB+ 36,793
Sacramento, California, Municipal Utility
District, Electric Revenue:
1,500,000 Series A, (MBIA Insured),
5.750% due 8/15/13 Aaa
AAA 1,295,625
500,000 Series P,
8.625% due 7/1/10 A
AAA 528,800
Sacramento, California, Municipal Utilities
Revenue:
1,000,000 5.500% due 5/15/07 A A-
961,250
750,000 5.500% due 5/15/08 A A-
712,500
3,000,000 5.700% due 5/15/12 A A-
2,797,500
3,000,000 Series G, (MBIA Insured),
4.750% due 9/1/21 Aaa
AAA 2,366,250
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
Sacramento, California, Municipal Utilities Revenue:
(continued)
$ 4,000,000 Series D, (FGIC Insured),
5.250% due 11/15/12 Aaa
AAA $ 3,600,000
Sacramento, California, Regional
Transportation District, Certificates of
Participation, Series A:
200,000 6.375% due 3/1/02 A1 NR
210,000
400,000 6.400% due 3/1/03 A1 NR
420,000
500,000 San Bernardino, California, City Unified
School District,
5.000% due 5/1/05 NR A-
463,750
1,325,000 San Bernardino County, California,
Certificates of Participation, Refunding
Bonds,
(Capital Improvement Project),
7.800% due 7/1/16 A1 NR
1,394,562
San Diego, California, Industrial Development
Authority, Revenue Bonds:
3,500,000 (Horton Grand Saddlery Hotel Project),
10.375% due 12/15/14 NR A+
3,661,875
1,000,000 Series A,
9.250% due 9/1/20 Aa3 A+
1,062,500
2,000,000 San Diego, California, Redevelopment Agency
Refunding, (Marina Redevelopment Project),
8.750% due 12/1/08 Baa1
BBB 2,280,000
San Diego, California, Regional Transportation
District, Certificates of Participation, Sales
Tax Revenue,
(FGIC Insured):
2,000,000 5.250% due 4/1/06 Aaa
AAA 1,930,000
4,000,000 5.250% due 4/1/07 Aaa
AAA 3,815,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
San Francisco, California, City & County
Redevelopment Agency:
$ 5,000,000 Multi-Family Housing, (South Beach Project),
5.700% due 3/1/29 Aaa NR
$ 4,568,750
Sewer Revenue, (FGIC Insured):
6,750,000 5.375% due 10/1/16 Aaa
AAA 6,066,563
8,000,000 5.375% due 10/1/22 Aaa
AAA 7,070,000
Residential Mortgage Revenue:
5,625,000 (Capital Accumulator),
Zero Coupon due 4/1/17 NR
BBB 548,438
250,000 Series 1984A,
9.750% due 10/1/17 NR
BBB 261,250
San Francisco, California, Downtown Parking,
Corporate Parking Revenue:
135,000 6.250% due 4/1/04 A NR
134,663
1,800,000 6.550% due 4/1/12 A NR
1,797,750
1,750,000 6.650% due 4/1/18 A NR
1,760,937
San Joaquin Hills, California, Transportation
Authority, Sr. Lien, Toll Revenue:
5,000,000 Zero Coupon due 1/1/14 NR NR
1,206,250
60,000,000 Zero Coupon due 1/1/16 NR NR
12,450,000
17,500,000 Zero Coupon due 1/1/17 NR NR
3,368,750
25,000,000 Zero Coupon due 1/1/18 NR NR
4,468,750
20,000,000 Zero Coupon due 1/1/19 NR NR
3,250,000
San Jose, California, Airport Revenue Bonds,
Series 93, (FGIC Insured):
200,000 5.400% due 3/1/04 Aaa
AAA 197,000
1,735,000 5.500% due 3/1/05 Aaa
AAA 1,706,805
1,945,000 5.500% due 3/1/07 Aaa
AAA 1,874,494
2,150,000 5.625% due 3/1/13 Aaa
AAA 1,999,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
$ 6,250,000 San Jose, California, Redevelopment Agency,
Merged Area Redevelopment Project, (MBIA
Insured),
5.000% due 8/1/20 Aaa
AAA $ 5,195,313
530,000 San Luis Obispo, California, Housing Authority
Revenue,
5.700% due 8/1/08 NR
AAA 505,487
450,000 San Pablo, California, Redevelopment Agency
Revenue, Single Family Mortgage,
10.125% due 12/1/14 B- NR
480,375
1,000,000 Santa Clara, California, Electric Revenue,
Series B, (MBIA Insured),
5.500% due 7/1/10 Aaa
AAA 952,500
Santa Margarita, Dana Point Authority,
California Revenue, (MBIA Insured):
2,000,000 7.250% due 8/1/09 Aaa
AAA 2,282,500
2,450,000 7.250% due 8/1/10 Aaa
AAA 2,796,062
5,000,000 5.750% due 8/1/20 Aaa
AAA 4,718,750
Sonoma County, California, Certificates of
Participation, (Honor Farm Detention
Facilities Project):
290,000 9.100% due 6/1/01 NR A+
315,375
320,000 9.100% due 6/1/02 NR A+
348,000
345,000 9.100% due 6/1/03 NR A+
375,188
2,500,000 5.000% due 11/15/13 A1 A+
2,106,250
Southern California Public Power Authority,
Power Project Reserve:
1,500,000 (Palo Verde Project), Series C, (Prerefunded),
(AMBAC Insured),
5.750% due 7/1/17 Aaa
AAA 1,561,875
3,000,000 San Juan Project, Series A, (MBIA Insured),
5.000% due 1/1/20 Aaa
AAA 2,501,250
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
Southern California Public Power Authority,
Power Project Reserve: (continued)
$ 5,455,000 Series A, (Mead Phoenix Project), (AMBAC
Insured),
5.000% due 7/1/17 Aaa
AAA $ 4,623,112
4,135,000 South Napa, California, Waste Management
Authority Revenue, Solid Waste Transfer
Facility,
6.500% due 2/15/14 Baa1 NR
4,140,168
9,195,000 South Orange County, California, Foothill Area
Project, (FGIC Insured),
5.750% due 8/15/18 Aaa
AAA 8,735,250
Standard, California, School District, Capital
Improvement Project, Series A:
320,000 6.200% due 3/1/10 NR A-
313,200
340,000 6.250% due 3/1/11 NR A-
332,350
1,500,000 Suisun City, California, Redevelopment Agency,
(MBIA Insured),
5.500% due 10/1/23 Aaa
AAA 1,355,625
3,080,000 Torrance, California, Hospital Revenue Bonds,
(Mary Greeley Hospital),
6.875% due 7/1/15 NR A
3,122,350
50,000 Tulare County, California, Certificates of
Participation, Financing Project, Series A,
(MBIA Insured),
5.700% due 11/15/03 Aaa
AAA 51,375
4,500,000 Ukiah, California, Unified School District,
6.000% due 9/1/10 Baa1
BBB 4,151,250
University Of California, Revenue Bonds,
Series A:
1,070,000 5.500% due 9/1/06 NR A-
1,037,900
1,125,000 5.600% due 9/1/07 NR A-
1,094,062
1,195,000 5.600% due 9/1/08 NR A-
1,156,163
1,255,000 5.700% due 9/1/09 NR A-
1,203,230
1,330,000 5.700% due 9/1/10 NR A-
1,266,825
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
$ 1,700,000 Upland, California, Hospital Revenue,
Certificates of Participation, (San Antonio
Community Hospital),
7.800% due 1/1/18 NR A
$ 1,923,125
17,115,000 West & Central Basin Finance Authority,
California,
West Basin Project, Series A, (AMBAC Insured),
5.000% due 8/1/16 Aaa
AAA 14,590,537
1,000,000 Woodland, California, Hospital Revenue,
Certificates of Participation, (Woodland
Memorial Hospital),
8.200% due 8/1/15 NR A
1,088,750
COLORADO - 1.4%
50,000,000 Dawson Ridge, Colorado, Metropolitan District
Commission, No. 1,
Zero Coupon due 10/1/22 Aaa NR
7,062,500
---------------------------------------------------------------------
- ----------------
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $508,690,232)
506,268,872
---------------------------------------------------------------------
- ----------------
SHORT-TERM TAX-EXEMPT INVESTMENTS - 0.9%
CALIFORNIA - 0.9%
California Health Facilities Financing
Authority
Revenue Bonds:
2,600,000 (St. Joseph's Health System), Series 1984B,
3.050% due 7/1/13+ VMIG1 NR
2,600,000
100,000 (Sutter), Series A,
3.050% due 3/1/20+ VMIG1
A1+ 100,000
35,000 Irvine, California, Improvement Bond Act 1915,
2.800% due 9/2/15+ VMIG1
A1+ 35,000
Irvine Ranch, California, Water Conservation
District, Construction Bonds, Series B:
200,000 3.100% due 10/1/10+ NR
A1+ 200,000
1,700,000 2.850% due 6/1/15+ VMIG1
A1+ 1,700,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (UNAUDITED) (continued) AUGUST 31,
1994
<TABLE>
<CAPTION>
MARKET
RATINGS
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
- ---------------------------------------------------------------------------
- --------------
SHORT-TERM TAX EXEMPT INVESTMENTS (CONTINUED)
CALIFORNIA (CONTINUED)
$ 100,000 Orange County California, Sanitation
Authority, (MBIA Insured),
2.800% due 8/1/16+ VMIG1
A1+ $ 100,000
---------------------------------------------------------------------
- ----------------
TOTAL SHORT-TERM TAX EXEMPT INVESTMENTS
(Cost $4,735,000)
4,735,000
---------------------------------------------------------------------
- ----------------
TOTAL INVESTMENTS (Cost $513,425,232*) 97.3%
511,003,872
---------------------------------------------------------------------
- ----------------
OTHER ASSETS AND LIABILITIES (NET) 2.7
14,371,924
---------------------------------------------------------------------
- ----------------
NET ASSETS 100.0%
$525,375,796
---------------------------------------------------------------------
- ----------------
<FN>
* Aggregate cost for Federal tax purposes.
+ Variable rate demand notes are payable upon not more than one day's
notice.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
Smith Barney
California Municipals Fund Inc.
<TABLE>
- ---------------------------------------------------------------------------
- --------------
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) AUGUST 31, 1994
<S> <C>
<C>
ASSETS:
Investments, at value (Cost $513,425,232) (Note 1)
See accompanying schedule
$511,003,872
Cash
49,357
Receivable for investment securities sold
14,335,565
Interest receivable
7,429,964
Receivable for Fund shares sold
827,299
- ---------------------------------------------------------------------------
- --------------
TOTAL ASSETS
533,646,057
- ---------------------------------------------------------------------------
- --------------
LIABILITIES:
Payable for investment securities purchased $7,354,605
Dividends payable 348,660
Investment advisory fee payable (Note 2) 154,992
Payable for Fund shares redeemed 118,466
Administration fee payable (Note 2) 88,510
Service fees payable (Note 3) 66,255
Distribution fee payable (Note 3) 49,586
Custodian fees payable (Note 2) 22,500
Transfer agent fees payable (Note 2) 15,000
Accrued expenses and other payables 51,687
- ---------------------------------------------------------------------------
- --------------
TOTAL LIABILITIES
8,270,261
- ---------------------------------------------------------------------------
- --------------
NET ASSETS
$525,375,796
- ---------------------------------------------------------------------------
- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
Smith Barney
California Municipals Fund Inc.
<TABLE>
- ---------------------------------------------------------------------------
- --------------
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) (continued)
<S>
<C>
NET ASSETS CONSIST OF:
Distributions in excess of net investment income earned to date
$ (613,951)
Accumulated net realized gain on investments sold
6,382,008
Unrealized depreciation of investments
(2,421,360)
Par value
337,569
Paid-in capital in excess of par value
521,691,530
- ---------------------------------------------------------------------------
- --------------
TOTAL NET ASSETS
$525,375,796
- ---------------------------------------------------------------------------
- --------------
NET ASSET VALUE:
CLASS A SHARES:
NET ASSET VALUE and redemption price per share
($405,436,888 / 26,048,671 shares of common stock outstanding)
$ 15.56
- ---------------------------------------------------------------------------
- --------------
Maximum offering price per share ($15.56 / 0.955) (based on maximum
sales charge of 4.5% of the offering price on August 31, 1994)
$ 16.29
- ---------------------------------------------------------------------------
- --------------
CLASS B SHARES:
NET ASSET VALUE and offering price per share+
($119,938,908 / 7,708,185 shares of common stock outstanding)
$ 15.56
- ---------------------------------------------------------------------------
- --------------
<FN>
+ Redemption price per share is equal to net asset value less any
applicable
contingent deferred sales charge.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
Smith Barney
California Municipals Fund Inc.
<TABLE>
- ---------------------------------------------------------------------------
- --------------
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED AUGUST 31,
1994
<S> <C>
<C>
INVESTMENT INCOME:
Interest
$ 16,584,918
EXPENSES:
Investment advisory fee (Note 2) $912,937
Administration fee (Note 2) 521,404
Service fees (Note 3) 392,068
Distribution fee (Note 3) 283,686
Transfer agent fees (Notes 2 and 4) 67,319
Custodian fees (Note 2) 44,025
Legal and audit fees 40,962
Directors' fees and expenses (Note 2) 22,687
Other 83,992
- ---------------------------------------------------------------------------
- --------------
TOTAL EXPENSES
2,369,080
- ---------------------------------------------------------------------------
- --------------
NET INVESTMENT INCOME
14,215,838
- ---------------------------------------------------------------------------
- --------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS (NOTES 1 AND 5):
Net realized gain/(loss) on:
Securities
(6,450,131)
Futures contracts
8,871,755
- ---------------------------------------------------------------------------
- --------------
Net realized gain on investments during the period
2,421,624
- ---------------------------------------------------------------------------
- --------------
Net change in unrealized depreciation of:
Securities
(19,283,864)
Futures contracts
(2,281,250)
- ---------------------------------------------------------------------------
- --------------
Net unrealized depreciation of investments during the period
(21,565,114)
- ---------------------------------------------------------------------------
- --------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(19,143,490)
- ---------------------------------------------------------------------------
- --------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
$ (4,927,652)
- ---------------------------------------------------------------------------
- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR
8/31/94
ENDED
(UNAUDITED)
2/28/94
<S> <C>
<C>
Net investment income $ 14,215,838
$ 25,809,861
Net realized gain on securities and futures contracts
during
the period 2,421,624
18,390,272
Net unrealized depreciation on securities and futures
contracts
during the period (21,565,114)
(15,730,247)
- ---------------------------------------------------------------------------
- ------------
Net increase/(decrease) in net assets resulting from
operations (4,927,652)
28,469,886
Distributions to shareholders from net investment income:
Class A (11,655,410)
(21,453,692)
Class B (2,918,675)
(3,407,803)
Distribution to shareholders in excess of net investment
income:
Class A --
(220,654)
Class B --
(35,050)
Distributions to shareholders from capital gains:
Class A --
(16,828,789)
Class B --
(3,683,752)
Net increase/(decrease) in net assets from Fund share
transactions (Note 6):
Class A (4,226,777)
15,790,654
Class B 16,183,755
72,861,938
- ---------------------------------------------------------------------------
- ------------
Net increase/(decrease) in net assets (7,544,759)
71,492,738
NET ASSETS:
Beginning of period 532,920,555
461,427,817
- ---------------------------------------------------------------------------
- ------------
End of period (including distributions in excess of net
investment income of $613,951 and $255,704,
respectively) $525,375,796
$532,920,555
- ---------------------------------------------------------------------------
- ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
FINANCIAL HIGHLIGHTS (UNAUDITED)
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
YEAR YEAR
8/31/94 ENDED
ENDED ENDED
(UNAUDITED) 2/28/94***
2/28/93* 2/28/92
<S> <C> <C> <C>
<C>
Operating performance:
Net asset value, beginning of period $16.15 $16.70
$15.78 $15.66
- ---------------------------------------------------------------------------
- --------------
Income from investment operations:
Net investment income+++ 0.44 0.86
0.97 1.04
Net realized and unrealized gain/(loss)
on investments (0.58) 0.08
1.25 0.40
- ---------------------------------------------------------------------------
- --------------
Total from investment operations (0.14) 0.94
2.22 1.44
- ---------------------------------------------------------------------------
- --------------
Less distributions:
Distributions from net investment income (0.45) (0.83)
(0.97) (1.05)
Distributions in excess of net investment
income -- (0.01)
- -- --
Distributions from net realized gains -- (0.65)
(0.29) (0.27)
Return of capital -- --
(0.04) --
- ---------------------------------------------------------------------------
- --------------
Total distributions (0.45) (1.49)
(1.30) (1.32)
- ---------------------------------------------------------------------------
- --------------
Net asset value, end of period $15.56 $16.15
$16.70 $15.78
- ---------------------------------------------------------------------------
- --------------
Total return++ (0.85)% 5.92%
14.76% 9.50%
- ---------------------------------------------------------------------------
- --------------
Ratios/supplemental data:
Net assets, end of period (in 000's) $405,437 $425,181
$423,504 $364,809
Ratio of operating expenses to average
net assets 0.79%** 0.80%
0.70% 0.65%
Ratio of net investment income to average
net assets 5.55%** 5.20%
6.04% 6.54%
Portfolio turnover rate 31% 76%
72% 86%
- ---------------------------------------------------------------------------
- --------------
<FN>
* The Fund commenced operations on April 9, 1984. On November 6, 1992
the Fund
commenced selling Class B shares. Any shares in existence prior to
November
6, 1992 were designated Class A shares.
** Annualized.
*** Per share amounts have been calculated using the monthly average share
method, which more appropriately presents the per share data for the
period
since the use of the undistributed method does not accord with the
results
of operations for both Classes of shares.
+ Annualized expense ratios before waiver of fees and voluntary
reimbursement
of expenses by investment adviser and sub-investment adviser and
administrator were 0.82% and 0.95% for the fiscal year ended February
28,
1986 and the fiscal period ended February 28, 1985, respectively.
++ Total return represents aggregate total return for the period
indicated and
does not reflect any applicable sales charges.
+++ Net investment income per share before waiver of fees and voluntary
reimbursement of expenses by investment adviser and sub-investment
adviser
and administrator was $1.20 and $1.06, for the fiscal year ended
February
28, 1986 and the fiscal period ended February 28, 1985, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------
- ----------
<CAPTION>
YEAR YEAR YEAR YEAR YEAR YEAR
PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
ENDED
2/28/91 2/28/90 2/28/89 2/28/88 2/28/87 2/28/86
2/28/85*
<S> <C> <C> <C> <C> <C>
<C>
$ 15.61 $ 15.33 $ 15.49 $ 16.54 $ 16.16 $ 13.94
$ 14.25
- ---------------------------------------------------------------------------
- ----------
1.07 1.09 1.12 1.09 1.14 1.21
1.14
0.17 0.26 (0.13) (0.98) 0.71 2.22
(0.31)
- ---------------------------------------------------------------------------
- ----------
1.24 1.35 0.99 0.11 1.85 3.43
0.83
- ---------------------------------------------------------------------------
- ----------
(1.07) (1.07) (1.12) (1.09) (1.14) (1.21)
(1.14)
-- -- -- -- -- --
- --
(0.12) -- (0.03) (0.07) (0.33) --
- --
-- -- -- -- -- --
- --
- ---------------------------------------------------------------------------
- ----------
(1.19) (1.07) (1.15) (1.16) (1.47) (1.21)
(1.14)
- ---------------------------------------------------------------------------
- ----------
$ 15.66 $ 15.61 $ 15.33 $ 15.49 $ 16.54 $ 16.16
$ 13.94
- ---------------------------------------------------------------------------
- ----------
8.29% 9.02% 6.67% 1.09% 12.13% 25.80%
6.35%
- ---------------------------------------------------------------------------
- ----------
$334,599 $328,938 $313,059 $156,464 $207,872 $111,705
$39,739
0.65% 0.72% 0.67% 0.64% 0.67% 0.73%+
0.33%**+
6.85% 6.95% 7.19% 7.26% 6.99% 8.08%
9.31%**
53% 35% 27% 22% 16% 14%
32%
- ---------------------------------------------------------------------------
- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
Smith Barney
California Municipals Fund Inc.
<TABLE>
- ---------------------------------------------------------------------------
- -------------
FINANCIAL HIGHLIGHTS (continued)
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<CAPTION>
SIX MONTHS
ENDED YEAR
PERIOD
8/31/94 ENDED
ENDED
(UNAUDITED)
2/28/94*** 2/28/93*
<S> <C> <C>
<C>
Operating performance:
Net asset value, beginning of period $ 16.15 $ 16.70
$ 15.84
- ---------------------------------------------------------------------------
- -------------
Income from investment operations:
Net investment income 0.40 0.77
0.29
Net realized and unrealized gain/(loss) on
investment (0.59) 0.09
1.15
- ---------------------------------------------------------------------------
- -------------
Total from investment operations (0.19) 0.86
1.44
- ---------------------------------------------------------------------------
- -------------
Less distributions:
Distributions from net investment income (0.40)
(0.75) (0.28)
Distributions in excess of net investment income --
(0.01) --
Distributions from net realized gains --
(0.65) (0.29)
Return of capital -- --
(0.01)
- ---------------------------------------------------------------------------
- -------------
Total distributions (0.40)
(1.41) (0.58)
- ---------------------------------------------------------------------------
- -------------
Net asset value, end of period $ 15.56 $ 16.15
$ 16.70
- ---------------------------------------------------------------------------
- -------------
Total return++ (1.12)%
5.40% 9.27%
- ---------------------------------------------------------------------------
- -------------
Ratios/supplemental data:
Net assets, end of period (in 000's) $119,939 $107,740
$37,924
Ratio of operating expenses to average net assets 1.31%**
1.33% 1.30%**
Ratio of net investment income to average net
assets 5.03%**
4.67% 5.44%**
Portfolio turnover rate 31%
76% 72%
- ---------------------------------------------------------------------------
- -------------
<FN>
* The Fund commenced selling Class B shares on November 6, 1992.
** Annualized.
*** Per share amounts have been calculated using the monthly average share
method, which more appropriately presents the per share data for the
period
since the use of the undistributed method does not accord with the
results
of operations for both Classes of shares.
++ Total return represents aggregate total return for the period
indicated and
does not reflect any applicable sales charges.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney California Municipals Fund Inc. (the "Fund"), formerly known
as
Smith Barney Shearson California Municipals Fund Inc., was incorporated
under
the laws of the State of Maryland on February 17, 1984. The Fund is a
non-diversified, open-end management investment company registered with the
Securities and Exchange Commission under the Investment Company Act of
1940, as
amended (the "1940 Act"). The Fund offers two classes of shares: Class A
shares
and Class B shares. Class A shares are sold with a front-end sales charge.
Class
B shares may be subject to a contingent deferred sales charge ("CDSC").
Class B
shares will convert automatically to Class A shares eight years after the
date
of original purchase. Both Classes of shares have identical rights and
privileges except with respect to the effect of the respective sales
charges to
each Class, the distribution and/or service fees borne by each Class,
expenses
allocable exclusively to each Class, voting rights on matters affecting a
single
Class, the exchange privilege of each Class and the conversion feature of
Class
B shares. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
Portfolio valuation: Securities are valued by The Boston Company Advisors,
Inc.
("Boston Advisors") after consultation with an independent pricing service
(the
"Service") approved by the Board of Directors. When, in the judgment of the
Service, quoted bid prices for securities are readily available and are
representative of the bid side of the market, these investments are valued
at
the mean between the quoted bid prices and asked prices (as obtained by the
Service from dealers in such securities). Securities for which, in the
judgment
of the Service, there are no readily obtainable market quotations (which
may
constitute a majority of the portfolio securities) are carried at fair
value as
determined by the Service, based on methods which include consideration of:
yields or prices of municipal securities of comparable quality, coupon,
maturity
and type; indications as to values from dealers; and general market
conditions.
Short-term investments that mature in 60 days or less are valued at
amortized
cost.
Futures contracts: Upon entering into a futures contract, the Fund is
required
to deposit with the broker an amount of cash or cash equivalents equal to a
certain percentage of the contract amount. This is known as the "initial
margin." Subsequent payments ("variation margin") are made or received by
the
Fund each day, depending on the daily fluctuation of the value of the
contract.
29
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (continued)
For financial statement purposes, an amount equal to the settlement amount
of
the contract is included in the Statement of Assets and Liabilities as an
asset
and as an equivalent liability. For long futures positions, the asset is
marked-to-market daily; for short futures positions, the liability is
marked-to-market daily. The daily changes in the contract are recorded as
unrealized gains or losses. The Fund recognizes a realized gain or loss
when the
contract is closed.
There are several risks in connection with the use of futures contracts as
a
hedging device. The change in value of futures contracts primarily
corresponds
with the value of their underlying instruments, which may not correlate
with the
change in value of the hedged investments. In addition, there is the risk
the
Fund may not be able to enter into a closing transaction because of an
illiquid
secondary market.
Repurchase Agreements: The Fund may engage in repurchase agreement
transactions.
Under the terms of a typical repurchase agreement, the Fund takes
possession of
an underlying debt obligation subject to an obligation of the seller to
repurchase, and the Fund to resell, the obligation at an agreed-upon price
and
time, thereby determining the yield during the Fund's holding period. This
arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the collateral
is at
least equal at all times to the total amount of the repurchase obligations,
including interest. In the event of counter-party default, the Fund has the
right to use the collateral to offset losses incurred. There is potential
loss
to the Fund in the event the Fund is delayed or prevented from exercising
its
rights to dispose of the collateral securities, including the risk of a
possible
decline in the value of the underlying securities during the period while
the
Fund seeks to assert its rights. The Fund's investment adviser,
administrator or
sub-administrator acting under the supervision of the Board of Directors,
reviews the value of the collateral and the creditworthiness of those banks
and
dealers with which the Fund enters into repurchase agreements to evaluate
potential risks.
Securities transactions and investment income: Securities transactions are
recorded as of the trade date. Interest income is recorded on the accrual
basis.
Securities purchased or sold on a when-issued or delayed delivery basis may
be
settled a month or more after the trade date. Interest income on these
securities is not accrued until settlement date. When required, the Fund
instructs the custodian to segregate assets in a separate account with a
current
value at least equal to the amount of its when-issued purchase commitments.
Realized gains and losses from securities sold are recorded on the
identified
cost basis. Investment income and realized and
30
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (continued)
unrealized gains and losses are allocated based upon the relative net
assets of
each Class of shares.
Dividends and distributions to shareholders: Dividends from net investment
income are determined on a Class level, declared on each day that the Fund
is
open for business and paid on the last day of the Smith Barney Inc. ("Smith
Barney") statement month. Distributions from net realized capital gains are
declared and paid annually, after the end of the fiscal year in which
earned. In
addition, in order to avoid the application of a 4% nondeductible excise
tax on
certain undistributed amounts of ordinary income and capital gains, the
Fund may
make an additional distribution shortly before December 31 in each year of
any
undistributed ordinary income or capital gains and expects to make any
other
distributions as are necessary to avoid this tax. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and
gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund as a whole.
Federal taxes: It is the policy of the Fund to qualify as a regulated
investment
company, which distributes tax exempt interest dividends, by complying with
the
requirements of the Internal Revenue Code of 1986, as amended, applicable
to
regulated investment companies and by distributing substantially all of its
earnings to its shareholders. Therefore, no Federal income tax provision is
required.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE
AND OTHER TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with Greenwich Street Advisors, a division of Mutual Management
Corp., which is controlled by Smith Barney Holdings Inc. ("Holdings").
Holdings
is a wholly-owned subsidiary of The Travelers Inc. Under the Advisory
Agreement,
the Fund pays a monthly fee at the following annual rates: 0.35% of the
value of
its average daily net assets up to $500 million and 0.32% of the value of
its
average daily net assets in excess of $500 million.
Prior to April 20, 1994, the Fund was party to an administration agreement
with
Boston Advisors, an indirect wholly-owned subsidiary of Mellon Bank
Corporation
("Mellon"). Under this agreement, the Fund paid a monthly fee at the annual
rate
31
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (continued)
of .20% of the value of its average daily net assets up to $500 million and
0.18% of the value of its average daily net assets in excess of $500
million.
As of the close of business on April 20, 1994, Smith, Barney Advisers, Inc.
("SBA"), which is controlled by Holdings, succeeded Boston Advisors as the
Fund's administrator. The new administration agreement contains
substantially
the same terms and conditions, including the level of fees, as the
predecessor
agreement.
As of the close of business on April 20, 1994, the Fund and SBA entered
into a
sub-administration agreement with Boston Advisors (the "Sub-Administration
Agreement"). Under the Sub-Administration Agreement, SBA pays Boston
Advisors a
portion of its fee at a rate agreed upon from time to time between SBA and
Boston Advisors.
For the six months ended August 31, 1994, the Fund incurred total brokerage
commissions of $25,456, none of which was paid to Smith Barney.
For the six months ended August 31, 1994, Smith Barney received from
investors
$694,263 representing commissions (sales charges) on sales of Class A
shares.
A CDSC is generally payable by a shareholder in connection with the
redemption
of Class B shares within five years after the date of purchase. In
circumstances
in which the CDSC is imposed, the amount of the charge ranges between 4.5%
and
1% of net asset value depending on the number of years since the date of
purchase. For the six months ended August 31, 1994, Smith Barney received
from
shareholders $232,338 in CDSCs on the redemption of Class B shares.
No officer, director or employee of Smith Barney or any of its affiliates
receives any compensation from the Fund for serving as a Director or
officer of
the Fund. The Fund pays each Director who is not an officer, director, or
employee of Smith Barney or any of its affiliates $2,000 per annum plus
$500 per
meeting attended and reimburses each such Director for travel and out-of-
pocket
expenses.
Boston Safe Deposit and Trust Company, an indirect wholly owned subsidiary
of
Mellon, serves as the Fund's custodian. The Shareholder Services Group,
Inc., a
subsidiary of First Data Corporation, serves as the Fund's transfer agent.
32
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (continued)
3. DISTRIBUTION PLAN
Smith Barney acts as distributor of the Fund's shares pursuant to a
distribution
agreement with the Fund, and sells shares of the Fund through Smith Barney
or
its affiliates.
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a services
and
distribution plan (the "Plan"). Under this Plan, the Fund compensates Smith
Barney for servicing shareholder accounts for Class A and Class B
shareholders
and covers expenses incurred in distributing Class B shares. Smith Barney
is
paid an annual service fee with respect to Class A and Class B shares of
the
Fund at the annual rate of 0.15% of the value of the average daily net
assets of
each respective Class of shares. Smith Barney is also paid an annual
distribution fee with respect to Class B shares at the annual rate of 0.50%
of
the value of the average daily net assets of Class B shares. For the six
months
ended August 31, 1994, the Fund incurred service fees of $306,962 and
$85,106
for Class A and Class B shares, respectively. For the six months ended
August
31, 1994, the Fund incurred a distribution fee of $283,686 for Class B
shares.
4. EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any
Class of
shares are prorated among the Classes based upon the relative net assets of
each
Class. Operating expenses directly attributable to a Class of shares are
charged
to that Class' operations. In addition to the above service and
distribution
fees, Class specific operating expenses include transfer agent fees. For
the six
months ended August 31, 1994, transfer agent fees for Class A and Class B
shares
were $44,231 and $23,088, respectively.
5. SECURITIES TRANSACTIONS
Costs of purchases and proceeds from sales of investment securities,
excluding
short-term investments, for the six months ended August 31, 1994, amounted
to
$181,358,691 and $153,226,808, respectively.
At August 31, 1994, aggregate gross unrealized appreciation for all
securities
in which there was an excess of value over tax cost amounted to $8,860,647
and
aggregate gross unrealized depreciation for all securities in which there
was an
excess of tax cost over value amounted to $11,282,007.
33
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (continued)
6. COMMON STOCK
At August 31, 1994, the Fund had authorized capital of 500 million shares
of
$.01 par value common stock divided into two classes: Class A and Class B.
Changes in common stock outstanding were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED
8/31/94
2/28/94*
CLASS A SHARES: SHARES AMOUNT
SHARES AMOUNT
- ---------------------------------------------------------------------------
- -------------------
<S> <C> <C> <C>
<C>
Sold 1,191,201 $ 18,494,051
2,686,986 $ 44,513,803
Issued as reinvestment of
dividends 456,504 7,100,256
1,519,575 25,027,145
Redeemed (1,917,872) (29,821,084)
(3,246,672) (53,750,654)
- ---------------------------------------------------------------------------
- -------------------
Net increase/(decrease) (270,167) $ (4,226,777)
959,889 $ 15,790,654
- ---------------------------------------------------------------------------
- -------------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED
8/31/94
2/28/94*
CLASS B SHARES: SHARES AMOUNT
SHARES AMOUNT
<S> <C> <C> <C>
<C>
- ---------------------------------------------------------------------------
- -------------------
Sold 1,445,660 $22,503,638
4,488,473 $74,380,170
Issued as reinvestment of
dividends 103,964 1,616,732
278,568 4,584,260
Redeemed (511,679) (7,936,615)
(367,733) (6,102,492)
- ---------------------------------------------------------------------------
- -------------------
Net increase 1,037,945 $16,183,755
4,399,308 $72,861,938
- ---------------------------------------------------------------------------
- -------------------
<FN>
* The Fund commenced selling Class B shares on November 6, 1992. Any shares
outstanding prior to November 6, 1992 were designated as Class A shares.
</TABLE>
7. LINE OF CREDIT
The Fund and several affiliated entities participate in a $50 million line
of
credit provided by Continental Bank N.A. under an Amended and Restated Line
of
Credit Agreement (the "Agreement") dated April 30, 1992 and renewed
effective
May 31, 1994, primarily for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. Under this Agreement the Fund may borrow up to
the
lesser of $25 million or 10% of its net assets. Interest is payable either
at
the bank's Money Market Rate or the London Interbank Offered Rate (LIBOR)
plus
0.375% on an annualized basis. Under the terms of the Agreement, as
amended, the
Fund and the
34
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (continued)
other affiliated entities are charged an annual aggregate commitment fee of
$100,000, which is allocated equally among each of the participants. The
Agreement requires, among other provisions, each participating fund to
maintain
a ratio of net assets (not including funds borrowed pursuant to the
Agreement)
to aggregate amount of indebtedness pursuant to the Agreement of no less
than 5
to 1. During the six months ended August 31, 1994, the Fund had an average
outstanding daily balance of $2,174 with an interest rate of 4.625%.
Interest
expense totaled $51 for the six months ended August 31, 1994. At August 31,
1994, the Fund had no outstanding borrowings under this Agreement.
8. CONCENTRATION OF CREDIT
The Fund primarily invests in debt obligations issued by the State of
California
and local governments in the State of California, its political
subdivisions,
agencies and public authorities to obtain funds for various public
purposes. The
Fund is more susceptible to factors adversely affecting issuers of
California
municipal securities than is a municipal bond fund that is not concentrated
in
these issuers to the same extent.
35
<PAGE>
Smith Barney
California Municipals Fund Inc.
- ---------------------------------------------------------------------------
- -----
PARTICIPANTS
DISTRIBUTOR
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
INVESTMENT ADVISER
Greenwich Street Advisors
388 Greenwich Street
New York, New York 10013
ADMINISTRATOR
Smith, Barney Advisers, Inc.
388 Greenwich Street
New York, New York 10013
SUB-ADMINISTRATOR
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
AUDITORS AND COUNSEL
Coopers & Lybrand
One Post Office Square
Boston, Massachusetts 02109
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
TRANSFER AGENT
The Shareholder Services Group, Inc.
Exchange Place
Boston, Massachusetts 02109
CUSTODIAN
Boston Safe Deposit and
Trust Company
One Boston Place
Boston, Massachusetts 02108
36
