[LOGO]
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SMITH BARNEY
CALIFORNIA MUNICIPALS
Fund Inc.
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SPECIAL DISCIPLINE SERIES
ANNUAL REPORT
FEBRUARY 29, 2000
[LOGO] Smith Barney
Mutual Funds
NOT FDIC INSURED o NOT BANK GUARANTEED o MAY LOSE VALUE
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<PAGE>
Smith Barney California
Municipals Fund Inc.
The Smith Barney California Municipals Fund Inc. ("Fund") seeks to provide
California investors with as high a level of current income exempt from federal
income taxes and California state personal income tax as is consistent with
prudent investment management and the preservation of capital.(1)
Smith Barney California Municipals Fund Inc.
Average Annual Total Returns
February 29, 2000
Without Sales Charges(2)
------------------------------------
Class A Class B Class L
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One-Year (5.36)% (5.87)% (5.92)%
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Five-Year 5.76 5.22 5.15
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Ten-Year 6.76 N/A N/A
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Since Inception+ 7.99 5.82 7.07
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Without Sales Charges(3)
------------------------------------
Class A Class B Class L
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One-Year (9.16)% (9.93)% (7.75)%
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Five-Year 4.90 5.06 4.93
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Ten-Year 6.33 N/A N/A
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Since Inception+ 7.71 5.82 6.87
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(1) Please note that a portion of the income from the Fund may be subject to
the Alternative Minimum Tax.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class B and L shares.
(3) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 4.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 4.50% CDSC, which
applies if shares are redeemed within one year from purchase. This CDSC
declines by 0.50% the first year after purchase and thereafter by 1.00%
per year until no CDSC is incurred. Class L shares also reflect the
deduction of a 1.00% CDSC, which applies if shares are redeemed within the
first year of purchase.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption value may be more or less than the original cost.
+ Inception dates for Class A, B and L shares are April 9, 1984, November 6,
1992 and November 14, 1994, respectively.
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MARKET HIGHLIGHT
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California is currently experiencing a meaningful economic resurgence, as it
enjoys its best finances of the last ten years. In our view, the Golden State's
economic recovery has been driven mainly by the growth of new, more diversified
industries, which has effectively provided the state with a broader economic
base. The nation's largest state economy, and the seventh largest economy in the
world, now appears to be running on all cylinders as evidenced by rising real
estate prices.
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NASDAQ SYMBOL
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Class A SHRCX
Class B SCABX
Class L SCAcX
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WHAT'S INSIDE
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Shareholder Letter ........................................................ 1
Historical Performance .................................................... 4
Smith Barney California Municipals Fund Inc. at a Glance .................. 6
Schedule of Investments ................................................... 7
Statement of Assets and Liabilities ....................................... 20
Statement of Operations ................................................... 21
Statements of Changes in Net Assets ....................................... 22
Notes to Financial Statements ............................................. 23
Financial Highlights ...................................................... 27
Independent Auditors' Report .............................................. 30
Tax Information ........................................................... 31
<PAGE>
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Shareholder Letter
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[Photo of Heath B. McLendon] [Photo of Joseph P. Deane]
Chairman Vice President and Investment Officer
Dear Shareholder:
We are pleased to provide the annual report for the Smith Barney California
Municipals Fund Inc. ("Fund") for the year ended February 29, 2000. For your
convenience, we have summarized the period's prevailing economic and market
conditions and outlined our current portfolio strategy. A detailed summary of
the Fund's performance can be found in the appropriate sections that follow. We
hope you find this report to be useful and informative.
Performance Update(1)
For the year ended February 29, 2000, the Fund had negative total returns of
5.36%, 5.87% and 5.92% for its Class A, B and L shares, respectively, without
sales charges. In comparison, the Fund's Lipper, Inc. peer group average posted
a total return of negative 4.88% for the same period. (Lipper, Inc. is a major
fund-tracking organization.) Over the twelve-month period covered by this
report, the Fund distributed income dividends totaling $0.76 per Class A share.
For additional Fund performance informa tion please refer to pages four and
five.
Municipal Bond Market Update
The period covered by this report was marked by continued robust U.S. economic
growth, historically low inflation and low unemployment. On February 2, 2000,
the Federal Reserve Board ("Fed") raised interest rates for a fourth time in
less than eight months, aiming to keep inflation at bay and to curb the nation's
rapidly growing economy.(2)
Perhaps more significant than the Fed's actions was its accompanying statement
that rapid growth could foster inflationary imbalances that might undermine the
U.S. economy's record economic expansion. We believe that this cautionary
statement may hint at a slightly more aggressive approach by the Fed in the
months ahead. However, in our view, bond yields are high enough to adequately
reflect the risk of slightly higher inflation. Indeed, we think that bond yields
may be near their peak.
Also, we believe performance in the bond market during the period has been a
direct result of Fed monetary policy actions. While presumably aimed at stock
market exuberance, it is the bond market that has taken the brunt of any
correction on fears of further Fed rate increases. We think the current lack of
inflationary evidence defies a historically tight labor market and reinforces
the influence of technology and the power of global pricing constraints.
The bond market experienced a tough year in 1999. Tax-loss selling and asset
allocation shifts out of municipal securities precipitated massive outflows in
the fourth quarter, prompting bond funds to sell their municipal bond holdings.
This drove yields even higher and sent the net asset values of many funds lower,
accelerating outflows and leaving bond dealers reluctant to hold municipal
securities. Additionally, the bond market has suffered in recent months from
uncertainty over the outlook for future Fed monetary policy, given the
resilience of stock markets and the apparent acceleration of consumer demand at
year-
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(1) Please note that past performance is not indicative of future results.
(2) On Tuesday, March 21, 2000 after this letter was written, the Fed raised
interest rates 0.25%.
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Smith Barney California Municipals Fund Inc. 1
<PAGE>
end. Also, we have noted that supply in the new-issue market is down
substantially from last year.
These factors, in addition to the considerable momentum going into 2000, may
mean that there is less financial restraint in the economy than previously
believed. The pace of demand is surpassing even optimistic assessments of the
economy's speed limit, threatening to reignite inflation and underscoring the
need for Fed vigilance and restraint.
Under "normal" market conditions, municipal investors pay for the tax-free
income benefits by getting a lower return. Today, however, investors are saving
on taxes without sacrificing returns. It is possible to buy double- and triple-A
rated municipals bonds yielding nearly 100% or more of similar-maturity U.S.
Treasury bonds, well above the historical average of roughly 80%. We think these
yields represent extraordinarily good value for municipal securities.
California Economic Highlights
The end of 1999 saw a flourish of holiday sales, which contributed to a burst of
year-end job creation in California. Rising home prices and mortgage rates may
have slowed home sales, but home and business construction continued to grow. An
important sign of the Golden State's current economic strength and future
prospects is the explosion of capital investment in emerging businesses. Fueled
by booming Internet-related companies, venture capital investments in Northern
California tripled in 1999 to $16.2 billion - over 33% of total venture capital
investment for the entire U.S. Based on estimates from National Venture Capital
Association/Venture Economics, the state as a whole accounted for over 42% of
the nation's total venture capital investments.
California's economy passed several important milestones over the period,
reaching a 30-year low in unemployment and passing the 14 million job mark in
nonfarm wage and salary employment. Moreover, California's unemployment rate
dropped to 4.9% -- the lowest level since 1969. The Golden State accounts for
approximately 40% of the entire nation's job growth, with the service sector,
particularly business services, adding the greatest number of jobs. We believe
strong building activity and swelling personal consumption are driving the
distribution of employment gains.
We think these gains, combined with factors such as strong employment growth,
high real estate values, a more broadly diversified state economy and an annual
state GDP of more than $1 trillion, should allow California to remain a
competitive economic force for many years to come.
Investment Strategy
As previously noted, the Fund seeks to provide California investors with as high
a level of current income exempt from federal income taxes and California state
personal income tax as is consistent with conservative investment management and
the preservation of capital.(3) As of February 29, 2000, the Fund's average
weighted maturity is approximately 19.0 years.
Also, as of February 29, 2000, 98.1% of the Fund's holdings were rated
investment grade (BBB/Baa and higher) by either Standard & Poor's Ratings
Service or Moody's Investors Service, Inc., with about 66.0% of the Fund
invested in AAA bonds, the highest possible rating. (Investment-grade bonds are
those rated Aaa, Aa, A and Baa by Moody's Investors Service, Inc. or AAA, AA, A
and BBB by Standard & Poor's Ratings Service, or that have an equivalent rating
by any nationally recognized statistical rating organization, or are determined
by the manager to be of equivalent quality.)
The Fund's largest holdings were concentrated in water and sewer bonds (24.4%),
hospital bonds (15.0%) and education bonds (7.6%). Until recently, our
- ----------
(3) A portion of the Fund's income may be subject to the Alternative Minimum
Tax ("AMT").
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2 2000 Annual Report to Shareholders
<PAGE>
investment strategy had been focused primarily on buying high-grade,
short-maturity bonds, as we remained in on the yield curve in anticipation of
the ensuing increase in interest rates. Currently, with recent interest rate
increases behind us, we have been aggressive buyers of longer, high-grade
discount bonds.
The Fund's investment strategy going forward will be three-fold:
o We are lengthening maturities in the portfolio to take advantage of the
inexpensive valuations of municipal bonds relative to U.S. Treasuries;
o We are focusing on investing in high-grade issues; and
o We are investing in discount paper because this is where we believe we can
obtain the best value.
Our goal is to sell off some of our intermediate-term maturities that were
defensive and stretch out longer on the yield curve to lock in today's higher
rates. We see the best opportunity for potential reward right now at the long
end of the curve. (The yield curve is the graphical depiction of the
relationship between the yield on bonds of the same credit quality but different
maturities.)
Municipal Bond Market Outlook
We think the U.S. economy should remain stable this year, as low unemployment
and strong consumer confidence should likely support demand for goods.
Additionally, we believe that the Fed has engineered a good balance between
strong economic growth and an "acceptable" rate of inflation.
Regarding further Fed tightenings, we believe that such future moves would not
be detrimental to the bond market, particularly as the U.S. Treasury continues
to pay down debt and inflation remains moderate. It is our belief that any
further Fed policy actions have already been comfortably priced into the bond
market. We believe the good news is that the economy's "soft landing" is likely
to be at a higher annual growth rate than was previously thought possible due to
the possible emergence of a "New Economy," where technological advances can spur
economic growth without inflationary pressures because of higher productivity.
In our judgment, a number of factors bode well for the municipal bond market.
The new-issue market in the U.S. is expected to shrink this year, boosting
demand for bonds currently outstanding and enhancing interest for the roughly
$175 billion of new municipals that are expected in 2000. Fiscal trends are
another major plus. During past economic downturns, some municipal issuers
facing declining tax receipts were hard-pressed to repay their bond obligations.
Today, many state and local governments boast budget surpluses. We believe these
surpluses indicate that investors will feel more comfortable holding municipals,
even in a downturn. Lastly, recent narrowing of spreads in the taxable market
has made alternatives less attractive. All of these trends help to explain why
we remain optimistic about the long-term prospects for the municipal bond
market.
As always, we will be monitoring these events closely. Thank you for investing
in the Smith Barney California Municipals Fund Inc.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
March 6, 2000
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Smith Barney California Municipals Fund Inc. 3
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Historical Performance -- Class A Shares
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<TABLE>
<CAPTION>
Net Asset Value
-------------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
2/29/00 $16.93 $15.28 $0.76 $0.00 $0.00 (5.36)%
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2/28/99 16.99 16.93 0.80 0.10 0.00 5.02
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2/28/98 16.26 16.99 0.84 0.23 0.00 11.44
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2/28/97 16.31 16.26 0.85 0.20 0.00 6.37
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2/29/96 15.40 16.31 0.84 0.03 0.00 11.93
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2/28/95 16.15 15.40 0.89 0.19 0.00 2.46
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2/28/94 16.70 16.15 0.84 0.65 0.00 5.92
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2/28/93 15.78 16.70 0.97 0.29 0.04 14.76
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2/29/92 15.66 15.78 1.05 0.27 0.00 9.50
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2/28/91 15.61 15.66 1.07 0.12 0.00 8.29
================================================================================================================================
Total $8.91 $2.08 $0.04
================================================================================================================================
</TABLE>
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Historical Performance -- Class B Shares
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<TABLE>
<CAPTION>
Net Asset Value
-------------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
2/29/00 $16.93 $15.28 $0.67 $0.00 $0.00 (5.87)%
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2/28/99 16.98 16.93 0.71 0.10 0.00 4.56
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2/28/98 16.25 16.98 0.76 0.23 0.00 10.88
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2/28/97 16.32 16.25 0.77 0.20 0.00 5.73
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2/29/96 15.40 16.32 0.76 0.03 0.00 11.39
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2/28/95 16.15 15.40 0.80 0.19 0.00 1.89
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2/28/94 16.70 16.15 0.76 0.65 0.00 5.40
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Inception* -- 2/28/93 15.84 16.70 0.28 0.29 0.01 9.27+
================================================================================================================================
Total $5.51 $1.69 $0.01
================================================================================================================================
</TABLE>
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Historical Performance -- Class L Shares
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<TABLE>
<CAPTION>
Net Asset Value
-------------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
2/29/00 $16.91 $15.26 $0.66 $0.00 $0.00 (5.92)%
- --------------------------------------------------------------------------------------------------------------------------------
2/28/99 16.97 16.91 0.70 0.10 0.00 4.45
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2/28/98 16.24 16.97 0.75 0.23 0.00 10.83
- --------------------------------------------------------------------------------------------------------------------------------
2/28/97 16.31 16.24 0.77 0.20 0.00 5.68
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2/29/96 15.40 16.31 0.76 0.03 0.00 11.30
- --------------------------------------------------------------------------------------------------------------------------------
Inception*-- 2/28/95 14.19 15.40 0.23 0.19 0.00 11.72+
================================================================================================================================
Total $3.87 $0.75 $0.00
================================================================================================================================
</TABLE>
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4 2000 Annual Report to Shareholders
<PAGE>
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Historical Performance -- Class Y Shares
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<TABLE>
<CAPTION>
Net Asset Value
-------------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns(1)
=============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
2/29/00 $16.93 $15.29 $0.78 $0.00 $0.00 (5.14)%
- -----------------------------------------------------------------------------------------------------------------------------
Inception*-- 2/28/99 17.19 16.93 0.39 0.10 0.00 1.34+
=============================================================================================================================
Total $1.17 $0.10 $0.00
=============================================================================================================================
</TABLE>
It is the Fund's policy to distribute dividends monthly and capital gains, if
any, annually.
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Average Annual Total Returns
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<TABLE>
<CAPTION>
Without Sales Charges(1)
------------------------------------------------------------
Class A Class B Class L Class Y
======================================================================================================
<S> <C> <C> <C> <C>
Year Ended 2/29/00 (5.36)% (5.87)% (5.92)% (5.14)%
- ----------------------------------------------------------------------------------------------------
Five Years Ended 2/29/00 5.76 5.22 5.15 N/A
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Ten Years Ended 2/29/00 6.76 N/A N/A N/A
- ------------------------------------------------------------------------------------------------------
Inception* through 2/29/00 7.99 5.82 7.07 (2.70)
======================================================================================================
<CAPTION>
With Sales Charges(2)
------------------------------------------------------------
Class A Class B Class L Class Y
======================================================================================================
<S> <C> <C> <C> <C>
Year Ended 2/29/00 (9.16)% (9.93)% (7.75)% (5.14)%
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Five Years Ended 2/29/00 4.90 5.06 4.93 N/A
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Ten Years Ended 2/29/00 6.33 N/A N/A N/A
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Inception* through 2/29/00 7.71 5.82 6.87 (2.70)
======================================================================================================
</TABLE>
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Cumulative Total Returns
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<TABLE>
<CAPTION>
Without Sales Charges(1)
======================================================================================================
<S> <C>
Class A (2/28/90 through 2/29/00) 92.41%
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Class B (Inception* through 2/29/00) 51.31
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Class L (Inception* through 2/29/00) 43.60
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Class Y (Inception* through 2/29/00) (3.86)
======================================================================================================
</TABLE>
(1) Assumes reinvestment of all dividend and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class B and L shares.
(2) Assumes reinvestment of all dividend and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charge of 4.00% and 1.00%,
respectively; Class B shares reflect the deduction of a 4.50% CDSC, which
applies if shares are redeemed within one year from purchase, this CDSC
declines by 0.50% the first year after purchase and thereafter by 1.00%
per year until no CDSC is incurred. Class L shares also reflect the
deduction of a 1.00% CDSC, which applies if shares are redeemed within the
first year of purchase.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
* Inception dates for Class A, B, L and Y shares are April 9, 1984, November
6, 1992, November 14, 1994 and September 22, 1998, respectively.
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Smith Barney California Municipals Fund Inc. 5
<PAGE>
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Smith Barney California Municipals Fund Inc. at a Glance (unaudited)
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Growth of $10,000 Invested in Class A Shares of the Smith Barney California
Municipals Fund Inc. vs. the Lehman Brothers Municipal Bond Index and the Lipper
California Municipal Fund Average+
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February 1990 -- February 2000
[GRAPHIC OMITTED]
SB Cal Muni Lehman Muni Bond Lipper Cal
February 1990 9600 10000 10000
February 1991 10396 10923 10807
February 1992 11211 12014 11836
February 1993 12866 13668 13492
February 1994 13626 14425 14235
February 1995 13960 14697 14271
February 1996 15678 16320 15753
February 1997 16677 17219 16512
February 1998 18585 18794 18062
February 1999 19518 20037 19049
February 2000 18472 19621 17481
+ Hypothetical illustration of $10,000 invested in Class A shares on
February 28, 1990, assuming deduction of the maximum 4.00% sales charge at
the time of investment and reinvestment of dividends and capital gains, if
any, at net asset value through February 29, 2000. The Lehman Brothers
Municipal Bond Index is a weighted composite which is comprised of more
than 15,000 bonds issued within the last 5 years, having a minimum credit
rating of at least Baa and a maturity of at least 2 years, excluding all
bonds subject to the Alternative Minimum Tax and bonds with floating or
zero coupons. The index is unmanaged and is not subject to the same
management and trading expenses of a mutual fund. The Lipper California
Municipal Fund Average is composed of an average of the Fund's peer group
of 108 mutual funds investing in California municipal bonds as of February
29, 2000. The performance of the Fund's other classes may be greater or
less than the Class A shares' performance indicated on this chart,
depending on whether greater or lesser sales charges and fees were
incurred by shareholders investing in the other classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No
adjustment has been made for shareholder tax liability on dividends or
capital gains.
Industry Diversification*
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[The following table was depicted as line graph in the printed material]
Education 7.6%
Escrowed to Maturity 7.2%
General Obligation 5.0%
Hospitals 15.0%
Housing: Multi-Family 2.1%
Housing: Single-Family 2.5%
Pre-Refunded 3.4%
Tax Allocation 3.8%
Transportation 5.9%
Utilities 3.8%
Water and Sewer 24.4%
Other 19.3%
Summary of Investments by Combined Ratings
- --------------------------------------------------------------------------------
Standard Percentage
Moody's & Poor's of Total Investments
- ------------------------------------------------------------
Aaa AAA 65.7%
Aa AA 13.3
A A 13.4
Baa BBB 5.7
Ba BB 0.8
NR NR 1.1
-----
100.0%
=====
* As a percentage of total investments.
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6 2000 Annual Report to Shareholders
<PAGE>
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Schedule of Investments February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) SECURITY VALUE
===========================================================================================================================
<S> <C> <C> <C>
Education -- 7.6%
$ 2,000,000 AAA Adelanto School District, Series B, FGIC-Insured,
zero coupon due 9/1/18 $ 667,500
California Educational Facilities Authority Revenue:
2,980,000 Aa3* Claremont University Center, Series B, 5.000% due 3/1/24 2,581,425
Pepperdine University, Series A:
1,775,000 A1* 5.000% due 11/1/18 1,562,000
1,500,000 A1* 5.000% due 11/1/29 1,256,250
6,125,000 Ba1* Pooled College & University Project, Series A, 5.500% due 7/1/15 5,680,937
Southwestern University Project:
2,635,000 A3* 6.600% due 11/1/14 2,796,394
4,505,000 A3* 6.700% due 11/1/24 4,668,306
2,500,000 A3* University of San Diego, 6.500% due 10/1/22 2,662,500
California State Public Works Board, Lease Revenue:
905,000 A+ High Technology Facility, San Jose Facilities, Series A,
7.750% due 8/1/06 989,844
Various California State University Projects, Series B:
3,085,000 A+ 5.400% due 9/1/13 3,058,006
1,745,000 A+ 5.450% due 9/1/14 1,723,187
2,425,000 A+ 5.500% due 9/1/15 2,376,500
1,400,000 A+ 5.550% due 9/1/16 1,368,500
1,400,000 AAA Eastside Unified High School District, Santa Clara County,
Series B, FGIC-Insured, 5.000% due 9/1/18 1,256,500
1,750,000 AAA Escondito Unified School District, Series A, FGIC-Insured,
5.125% due 9/1/15 1,669,062
10,000,000 AAA Fremont Unified School District, Alameda County, Series A,
FGIC-Insured, 4.750% due 8/1/20 8,437,500
1,250,000 AAA Lake Elsinore Unified School District, COP, MBIA-Insured,
4.750% due 2/1/20 1,054,687
2,300,000 AAA Rio Linda Unified School District, FSA-Insured, 5.250% due 8/1/17 2,173,500
1,250,000 AAA San Diego Community College District, Lease Revenue, MBIA-Insured,
6.125% due 12/1/16 1,356,250
1,530,000 AAA Santa Rosa High School District, FGIC-Insured, 5.900% due 5/1/14 1,572,075
5,580,000 AAA South Orange County Community College District, COP, (Capital
Improvement Refining Project), MBIA-Insured, 5.000% due 8/1/19 4,952,250
Standard School District, COP, (Capital Improvement Project), Series A:
320,000 A- 6.200% due 3/1/10 330,000
340,000 A- 6.250% due 3/1/11 348,500
4,500,000 BBB Ukiah Unified School District, COP, (Measure A Capital Projects),
6.000% due 9/1/10 4,646,250
2,600,000 AAA Victor Valley Unified High School District, MBIA-Insured,
5.750% due 11/1/17 2,606,500
2,500,000 Baa1* Yuba City Unified School District, COP, (Andors Karperos School
Construction Project), 6.700% due 2/1/13 2,605,625
- ---------------------------------------------------------------------------------------------------------------------------
64,400,048
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
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Smith Barney California Municipals Fund Inc. 7
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) SECURITY VALUE
=========================================================================================================================
<S> <C> <C> <C>
Electric -- 0.7%
Sacramento Power Authority, Cogeneration Project Revenue:
$ 1,800,000 BBB- 6.500% due 7/1/07 $ 1,908,000
1,800,000 BBB- 6.500% due 7/1/08 1,910,250
2,200,000 BBB- 6.500% due 7/1/09 2,282,500
- -------------------------------------------------------------------------------------------------------------------------
6,100,750
- -------------------------------------------------------------------------------------------------------------------------
Escrowed to Maturity(b) -- 7.2%
270,000 AAA Contra Costa County Home Mortgage Revenue, Mortgage Backed
Securities Program, GNMA-Collateralized, 7.750% due 5/1/22 326,700
100,000 AAA Kern High School District, Series C, MBIA-Insured, 8.750% due 8/1/03 113,000
125,000 AAA Martinez Home Mortgage Revenue Bonds, 10.750% due 2/1/16 181,250
3,325,000 AAA Perris Single-Family Mortgage Revenue, Series A, Mortgage Backed
Securities Program, GNMA-Collateralized, 8.300% due 6/1/13 (c) 4,052,344
6,000,000 AAA Pleasanton-Suisun City HFA, Home Mortgage, Series A, MBIA-Insured,
zero coupon due 10/1/16 2,160,000
Riverside County, Single-Family Mortgage Revenue, Series A,
Mortgage Backed Securities Program, GNMA-Collateralized:
2,620,000 AAA 8.300% due 11/1/12 (c) 3,219,325
1,000,000 AAA 7.800% due 5/1/21 (c) 1,245,000
San Joaquin Hills California Transportation Corridor Agency
Toll Road Revenue:
5,000,000 AAA Zero coupon due 1/1/14 2,256,250
60,000,000 AAA Zero coupon due 1/1/16 23,850,000
17,500,000 AAA Zero coupon due 1/1/17 6,518,750
25,000,000 AAA Zero coupon due 1/1/18 8,718,750
20,000,000 AAA Zero coupon due 1/1/19 6,500,000
775,000 AAA Santa Rosa Hospital Revenue, (Santa Rosa Hospital Memorial Project),
10.300% due 3/1/11 997,812
1,250,000 Baa* Sequoia Hospital District Revenue, 5.375% due 8/15/23 1,171,875
- -------------------------------------------------------------------------------------------------------------------------
61,311,056
- -------------------------------------------------------------------------------------------------------------------------
General Obligation -- 5.0%
California State GO:
5,000,000 AAA 4.750% due 2/1/29 4,062,500
Veterans Bonds:
455,000 AA- Series AL, 9.700% due 4/1/02 502,206
725,000 AA- Series AM, 9.000% due 10/1/02 803,844
Series AT:
4,000,000 AA- 9.700% due 2/1/01 4,209,120
1,000,000 AA- 9.500% due 2/1/10 1,331,250
2,000,000 AA- Series AU, 8.400% due 10/1/06 2,395,000
4,720,000 AAA Pasadena Unified School District, Series A, FGIC-Insured,
5.000% due 5/1/20 4,165,400
1,000,000 Aa1* San Diego Public Safety Communication Project, 6.650% due 7/15/11 1,123,750
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) SECURITY VALUE
====================================================================================================================
<S> <C> <C> <C>
General Obligation -- 5.0% (continued)
Santa Margarita/Dana Point Authority Revenue, GO:
$ 20,000,000 AAA Series A, AMBAC-Insured, 5.125% due 8/1/18 $18,325,000
1,500,000 AAA Water Improvement Districts 3-3A-4 & 4A, Series B, MBIA-Insured,
7.250% due 8/1/14 1,775,625
4,000,000 AAA Tahoe Truckee Unified School District Improvement, District No. 1,
Series A, FGIC-Insured, 5.750% due 8/1/20 3,955,000
- --------------------------------------------------------------------------------------------------------------------
42,648,695
- --------------------------------------------------------------------------------------------------------------------
Hospitals -- 15.0%
1,500,000 AA- ABAG Finance Authority for Nonprofit Corps., COP,
(Rehabilitation Mental Health Services Inc. Project),
California Mortgage Insured, 6.550% due 6/1/22 1,531,875
225,000 AA- California Health Facilities Authority Revenue, Victory Valley
Community Hospital, Series 84-A, 9.875% due 7/1/12 225,765
California Health Facilities Financing Authority Revenue:
AMBAC-Insured:
2,500,000 AAA Catholic Health Facilities, 5.750% due 7/1/15 2,518,750
5,620,000 AAA Catholic Healthcare West, Series E, 5.250% due 7/1/16 5,331,975
10,000,000 A2* Cedars-Sinai Medical Center, Series A, 6.125% due 12/1/30 9,525,000
Industrial Health Facilities:
705,000 AA- Casa De Las Campanas, Series A, 5.500% due 8/1/12 692,662
2,500,000 AA- Marshall Hospital, Series A, 5.250% due 11/1/18 2,209,375
1,000,000 AAA Scripps Health, Series C, MBIA-Insured, 5.000% due 10/1/14 941,250
Kaiser Permanente:
3,500,000 AAA Series A, FSA-Insured, 5.000% due 6/1/18 3,119,375
Series B:
5,000,000 A 5.250% due 10/1/14 4,400,000
5,000,000 A 5.250% due 10/1/16 4,306,250
17,500,000 A 5.000% due 10/1/18 14,065,625
Series A, Catholic Healthcare West, MBIA-Insured:
2,000,000 AAA 5.000% due 7/1/17 1,807,500
3,000,000 AAA 5.125% due 7/1/24 2,643,750
5,145,000 AAA Stanford Health Care, Series A, 5.000% due 11/15/18 4,579,050
Sutter Health, Series A:
FSA-Insured:
1,470,000 AAA 5.125% due 8/15/17 1,361,587
1,500,000 AAA 5.250% due 8/15/27 1,335,000
MBIA-Insured:
3,000,000 AAA 5.000% due 8/15/18 2,666,250
2,000,000 AAA 5.000% due 8/15/19 1,775,000
California Statewide Community Development Authority Revenue, COP:
4,515,000 AAA Industrial Health Facilities, Unihealth, Series A, AMBAC-Insured,
5.500% due 10/1/07 4,644,806
19,000,000 A Kaiser Permanente, 5.300% due 12/1/15 16,625,000
1,100,000 AA- Solheim Lutheran Home, 6.500% due 11/1/17 1,120,625
St. Joseph's Health System:
4,825,000 AA 5.500% due 7/1/14 4,559,625
4,000,000 AA 5.250% due 7/1/21 3,470,000
6,000,000 AA 6.625% due 7/1/21 6,547,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 9
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) SECURITY VALUE
=====================================================================================================================
<S> <C> <C> <C>
Hospitals -- 15.0% (continued)
Sutter Health Obligated Group, MBIA-Insured:
$ 3,500,000 AAA 5.500% due 8/15/09 $ 3,570,000
500,000 AAA 6.000% due 8/15/25 501,250
Fresno Health Facilities Revenue, Holy Cross Health System Corp.:
2,200,000 AA 5.200% due 12/1/04 2,202,750
2,435,000 AA 5.375% due 12/1/06 2,441,087
1,000,000 AAA Modesto Health Facilities Revenue, Memorial Hospital Association,
Series B, MBIA-Insured, 5.125% due 6/1/17 927,500
2,000,000 A Riverside County Asset Leasing Corp., (Riverside County
Hospital Project), Series A, 6.375% due 6/1/09 2,057,500
2,750,000 A2* San Joaquin County COP, (General Hospital Project 1993),
6.250% due 9/1/13 2,939,062
9,260,000 A Torrance Hospital Revenue Bonds, Little County of Mary Hospital,
6.875% due 7/1/15 9,804,025
1,500,000 NR Valley Health System, COP, 6.875% due 5/15/23 1,396,875
- ---------------------------------------------------------------------------------------------------------------------
127,843,644
- ---------------------------------------------------------------------------------------------------------------------
Housing: Multi-Family -- 2.1%
1,250,000 AAA ABAG, Series 96A, FNMA-Collateralized, 5.700% due 11/1/26 1,253,125
California HFA:
395,000 Aa2* Home Mortgage Revenue, Series F-1, 7.000% due 8/1/26 (c) 402,406
1,595,000 Aa2* Series A, 6.625% due 2/1/24 (c) 1,624,906
480,000 AAA Series C, MBIA-Insured, 7.000% due 8/1/23 (c) 492,600
6,000,000 AAA California Statewide Community Development Authority, COP,
St. Joseph's Health System Group, Series E, FNMA-Collateralized,
6.400% due 6/1/28 (c) 6,060,000
1,740,000 AAA Riverside County Housing Authority, Multi-Family Housing Revenue,
Brandon Place Apartments, Series B, FNMA-Collateralized,
5.625% due 7/1/29 (c) 1,750,875
665,000 AAA San Francisco City & County Redevelopment, Multi-Family Housing
Revenue, 1045 Mission Apartments, Series C, GNMA-Collateralized,
5.200% due 12/20/17 (c) 611,800
1,500,000 Aa1* San Jose Multi-Family Timberwood Apartments, Series A,
LOC-Wells Fargo Bank, 7.500% due 2/1/20 1,505,625
1,320,000 AA Santa Rosa Mortgage Revenue, (Village Square Apartments Project),
Series A, FHA-Insured, 6.875% due 9/1/27 1,371,150
2,755,000 AAA Victorville Multi-Family Housing Revenue, Wimbledon Apartments,
Series A, GNMA-Collateralized, 6.300% due 4/20/31 2,772,219
- ---------------------------------------------------------------------------------------------------------------------
17,844,706
- ---------------------------------------------------------------------------------------------------------------------
Housing: Single-Family -- 2.5%
California HFA Revenue Bonds, Home Mortgage:
10,000 Aa2* 10.250% due 2/1/14 10,073
Capital Appreciation:
350,000 Aa2* Series 1983-B, zero coupon due 8/1/15 73,500
310,000 Aa2* Series 1984-B, zero coupon due 8/1/16 49,600
3,000,000 AAA Series B, AMBAC-Insured, 5.150% due 2/1/18 (c) 2,707,500
5,225,000 Aa2* Series E, Remarketed 10/16/96, 6.375% due 8/1/27 (c) 5,264,187
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) SECURITY VALUE
=====================================================================================================================
<S> <C> <C> <C>
Housing: Single-Family -- 2.5% (continued)
Single-Family Mortgage:
$ 6,490,000 AAA Issue A-2, FHA-Insured, 6.350% due 8/1/15 (c) $ 6,611,687
3,520,000 AAA Series B-3, Class II, MBIA-Insured, 5.375% due 8/1/21 3,194,400
Los Angeles Home Mortgage Revenue Bonds, GNMA-Collateralized:
585,000 Aaa* Second Mortgage Project, 8.100% due 5/1/17 604,744
375,000 AAA Single-Family Mortgage Revenue, Mortgage Backed Securities
Program, Issue A, 7.550% due 12/1/23 (c) 383,265
1,500,000 AAA Sacramento County Single-Family Mortgage Revenue, Issue A,
GNMA-Collateralized, (Escrowed to maturity with U.S. government
securities), 8.125% due 7/1/16 (c) 1,848,750
95,000 AA+ San Francisco City & County Single-Family Mortgage Revenue,
GNMA/FNMA-Collateralized, 7.450% due 1/1/24 (c) 97,204
95,000 AAA Southern California HFA, Single-Family Mortgage Revenue,
GNMA/FNMA-Collateralized, Series B, 7.750% due 3/1/24 (c) 97,479
- ---------------------------------------------------------------------------------------------------------------------
20,942,389
- ---------------------------------------------------------------------------------------------------------------------
Miscellaneous -- 15.5%
500,000 A3* ABAG Finance Authority Nonprofit Corps., COP, Peninsula Family,
YMCA, Series A, 6.800% due 10/1/11 526,875
2,500,000 NR Alhambra, Arcadia, Azusa Counties, Independent Cities Risk
Management Authority, COP, 7.250% due 3/1/07 2,500,000
2,000,000 AAA Anaheim COP, Regular Fixed Option Bonds, MBIA-Insured,
6.200% due 7/16/23 (d) 2,042,500
1,025,000 Baa2* Azusa COP, (Capital Improvements Refinancing Project),
6.625% due 8/1/13 1,068,562
California Public Capital Improvements Finance Authority Revenue,
(Pooled Project):
750,000 NR Series A, 8.500% due 3/1/18 768,232
540,000 AAA Series B, BIG-Insured, 8.100% due 3/1/18 546,075
California State Public Works Board, Lease Revenue:
2,500,000 AAA Department of Corrections, Series B, MBIA-Insured,
5.000% due 9/1/21 2,193,750
5,000,000 AAA Department of Health Services, Series A, 5.750% due 11/1/24 4,881,250
3,000,000 AAA Contra Costa County COP, (Capital Projects), AMBAC-Insured,
5.250% due 2/1/21 2,741,250
Corona, PFA Revenue, Superior Lien, Series A, FSA-Insured:
830,000 AAA 4.900% due 9/1/14 770,862
2,500,000 AAA 5.000% due 9/1/20 2,203,125
3,680,000 AAA Fontana COP, AMBAC-Insured, 5.000% due 9/1/21 3,229,200
Fresno Joint Powers Financing Authority, Local Agency
Revenue, Series A:
1,300,000 BBB 6.000% due 9/2/01 1,309,750
1,000,000 BBB 6.200% due 9/2/03 1,017,500
1,500,000 BBB 6.550% due 9/2/12 1,545,000
3,000,000 AAA Long Beach Board Finance Authority Lease Revenue, Rainbow Harbor
Refining Project, Series A, AMBAC-Insured, 5.250% due 5/1/24 2,711,250
14,900,000 AAA Los Angeles California Parking Revenue, Series A,
4.750% due 5/1/24 12,329,750
3,250,000 AAA Los Angeles County Community Facilities, District No. 3, Special Tax
Refunding, Series A, FSA-Insured, 5.500% due 9/1/14 3,258,125
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) SECURITY VALUE
=======================================================================================================================
<S> <C> <C> <C>
Miscellaneous -- 15.5% (continued)
Los Angeles County COP:
$ 2,000,000 BBB+ Special Linked SAVRS & RIBS, 6.708% due 6/1/15 (d) $ 2,087,500
1,000,000 BBB+ Structured Yield Curve Note, 6.600% due 11/1/11 1,051,250
Los Angeles County Public Works Financing Authority Revenue:
3,500,000 AAA Multiple Capital Facilities Project, Series B, AMBAC-Insured,
5.125% due 12/1/29 3,084,375
6,500,000 AA Regional Park & Open Space District, Series A,
5.000% due 10/1/19 5,793,125
1,750,000 AAA Marin Emergency Radio & Public Safety Revenue Authority,
AMBAC-Insured, 4.750% due 8/15/18 1,511,562
735,000 AAA Oakland Lease Revenue, COP, AMBAC-Insured, 4.750% due 6/1/19 630,262
2,670,000 AAA Ontario Redevelopment Finance Authority Revenue, (Project No. 1),
MBIA-Insured, (Escrowed to maturity with U.S. government securities),
5.800% due 8/1/23 2,626,612
895,000 Baa1* Pleasanton Joint Powers Financing Authority Revenue, Series A,
6.150% due 9/2/12 909,544
1,600,000 AAA Sacramento City Financing Authority Revenue, Capital Improvement,
(Solid Waste & Redevelopment Project), AMBAC-Insured,
5.875% due 12/1/29 1,588,000
4,600,000 AAA Sacramento County COP, (Public Facilities Project), Solid Waste
Facilities, MBIA-Insured, 5.250% due 12/1/16 4,381,500
2,800,000 AAA Salida Area Public Financing Agency Community Facilities District,
Special Tax No. 1988-1, FSA-Insured, 5.250% due 9/1/18 2,604,000
2,000,000 AAA San Bernadino COP, (Capital Facilities Project), Series B, (Escrowed to
maturity with U.S. government securities), 6.875% due 8/1/24 2,295,000
San Diego County COP:
9,000,000 AAA Central Jail Refunding, AMBAC-Insured, 5.000% due 10/1/25 7,796,250
1,000,000 AAA Regular Fixed Option Certificates, MBIA-Insured,
6.363% due 11/18/19 (d) 1,030,000
5,000,000 AAA San Diego Special Tax Facilities, Community District No. 1,
MBIA-Insured, 4.750% due 9/1/20 4,231,250
135,000 A3* San Francisco Downtown Parking, Corporate Parking Revenue Bonds,
6.250% due 4/1/04 142,256
4,310,000 Aaa* San Marcos Public Facilities Authority, Public Facilities Revenue,
(Escrowed to maturity with U.S. government securities),
zero coupon due 1/1/19 1,352,262
5,995,000 AAA San Ramone COP, (Central Park Project), FSA-Insured,
5.000% due 8/1/24 5,253,119
2,875,000 AAA Santa Ana Financing Authority Lease Revenue, Police Administration &
Holding Facility, Series A, MBIA-Insured, 6.250% due 7/1/24 3,047,500
3,460,000 A+ Santa Barbara County COP, 5.700% due 3/1/11 3,524,875
7,180,000 AAA Santa Maria Redevelopment Agency, Town Center Package,
FSA-Insured, 5.000% due 6/1/16 6,641,500
2,795,000 AAA Solano County COP, (Capital Improvement Project),
5.000% due 11/15/19 2,484,056
Sonoma County COP, Detention Facilities Improvement Project:
4,200,000 A+ 5.000% due 11/15/13 4,005,750
3,000,000 A+ 5.000% due 11/15/17 2,707,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) SECURITY VALUE
=====================================================================================================================
<S> <C> <C> <C>
Miscellaneous -- 15.5% (continued)
$ 2,000,000 AAA South Orange County Public Finance Authority, Special Tax Revenue,
Series A, MBIA-Insured, 7.000% due 9/1/10 $ 2,292,500
Virgin Islands Public Finance Authority Revenue, Series A:
10,000,000 BBB- 5.500% due 10/1/18 8,837,500
3,000,000 BBB- Gross Receipts Taxes, Loan Note, 6.500% due 10/1/24 2,958,750
2,000,000 AAA Vista Community Development, Tax Allocation Revenue, Vista
Redevelopment Project Area, MBIA-Insured, 5.250% due 9/1/15 1,935,000
- ---------------------------------------------------------------------------------------------------------------------
132,445,854
- ---------------------------------------------------------------------------------------------------------------------
Pollution Control Revenue -- 1.2%
California Financing Authority:
2,500,000 AA- Pacific Gas & Electric Co., Series B, 6.350% due 6/1/09 (c) 2,618,750
500,000 BBB Resource Recovery Revenue, Waste Management Income,
Series A, 7.150% due 2/1/11 (c) 502,500
502,500 San Diego Gas & Electric, Series A:
5,000,000 A+ 5.900% due 6/1/14 5,131,250
1,500,000 AA- 6.800% due 6/1/15 (c) 1,642,500
- ---------------------------------------------------------------------------------------------------------------------
9,895,000
- ---------------------------------------------------------------------------------------------------------------------
Pre-Refunded(e) -- 3.4%
California Health Facilities Financing Authority Revenue:
115,000 Aa1* Community Provider Pooled Loan Project, Series A,
(Call 6/1/00 @ 102), 7.350% due 6/1/20 118,233
1,250,000 NR South Coast Medical Center, (Call 7/1/00 @ 102),
7.250% due 7/1/15 1,288,038
1,450,000 NR St. Elizabeth Hospital, (Call 11/15/02 @ 102),
6.200% due 11/15/09 1,535,188
California Public Works Board Lease Revenue, Series A:
2,000,000 AAA California State University Project, (Call 10/1/02 @ 102),
6.700% due 10/1/17 2,140,000
1,000,000 AAA Department of Corrections State Prison, Series A,
(Call 9/1/00 @ 102), 7.000% due 9/1/09 1,035,150
1,405,000 Aaa* Contra Costa County COP, Merrithew Memorial Hospital,
(Call 11/1/02 @ 102), 6.500% due 11/1/06 1,499,838
1,500,000 AAA Desert Hospital District, COP, (Call 7/1/00 @ 102),
8.100% due 7/1/20 1,550,250
1,000,000 AA Fresno Health Facilities Revenue, Holy Cross Health System,
St. Agnes, (Call 6/1/02 @ 102), 6.625% due 6/1/21 1,062,500
1,000,000 NR Inglewood Insured Hospital Revenue Bonds, Daniel Freeman
Hospital Inc., (Call 5/1/01 @ 102), 6.750% due 5/1/13 1,047,500
450,000 AAA Los Angeles Convention & Exhibition Center Authority,
(Call 12/1/05 @ 100), 9.000% due 12/1/20 542,813
1,950,000 Aa3* Los Angeles Department of Water & Power, Electric Plantation
Revenue, (Call 1/15/01 @ 102), 7.100% due 1/15/31 2,027,610
Mojave Water Agency, Improvement District, Morongo Basin,
(Call 9/1/02 @ 102):
1,500,000 AAA 6.600% due 9/1/13 1,599,375
5,510,000 AAA 6.600% due 9/1/22 (f) 5,875,038
750,000 A- Northern California Power Agency, Public Power Revenue,
(Geothermal Project No. 3), Series A, (Call 7/1/08 @ 100),
5.000% due 7/1/09 748,125
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) SECURITY VALUE
=====================================================================================================================
<S> <C> <C> <C>
Pre-Refunded(e) -- 3.4% (continued)
$ 500,000 AAA Oceanside COP, AMBAC-Insured, (Call 8/1/02 @ 102),
7.300% due 8/1/21 $ 540,625
1,000,000 NR Orange County Community Facility District, Special Tax, Series A,
(Call 8/15/00 @ 102), 7.800% due 8/15/15 1,037,070
1,000,000 A2* Rancho Mirage COP, Eisenhower Memorial Hospital, Joint Powers
Financing Authority, (Call 3/1/02 @ 102), 7.000% due 3/1/22 1,065,000
2,000,000 AAA Rancho Water District Financing Authority Revenue,
Regular Fixed Option Bonds, AMBAC-Insured,
(Call 9/11/01 @ 102), 6.427% due 8/17/21 (d) 2,085,000
1,000,000 AAA San Buenaventura COP, AMBAC-Insured, (Call 10/1/00 @ 102),
7.500% due 10/1/20 1,040,470
1,300,000 AAA Yolo County Flood Control & Water Conservation District, COP,
FGIC-Insured, (Call 7/15/03 @ 100), 7.125% due 7/15/15 1,402,375
- --------------------------------------------------------------------------------------------------------------------
29,240,198
- --------------------------------------------------------------------------------------------------------------------
Solid Waste -- 1.9%
2,770,000 AAA Fresno County Finance Authority, Solid Waste Revenue Bonds,
American Avenue Landfill, MBIA-Insured, 5.750% due 5/15/14 2,825,400
Inland Empire Solid Waste Authority Revenue, FSA-Insured:
5,000,000 AAA 6.250% due 8/1/11 (c) 5,306,250
2,500,000 AAA 6.000% due 8/1/16 (c) 2,668,750
470,000 BBB Kings County Waste Management Authority, Solid Waste Revenue,
7.200% due 10/1/14 (c) 507,013
1,000,000 BB Nevada County COP, 7.500% due 6/1/21 1,036,250
4,135,000 Baa2* South Napa Waste Management Authority Revenue,
(Solid Waste Transfer Facilities Project), 6.500% due 2/15/14 (c) 4,259,050
- --------------------------------------------------------------------------------------------------------------------
16,602,713
- --------------------------------------------------------------------------------------------------------------------
Tax Allocation -- 3.8%
2,000,000 AAA Anaheim Public Finance Authority, Tax Allocation Revenue,
Regular Fixed Option Bonds, MBIA-Insured, 6.450% due 12/28/18 (d) 2,100,000
1,000,000 Baa3* Azusa Redevelopment Agency, Tax Allocation, Merged Project Area,
Series A, 6.750% due 8/1/23 1,001,250
1,200,000 AAA Bay Area Government Assessment, Tax Allocation, Redevelopment
Agency Pool, Series A-6, FSA-Insured, 5.250% due 12/15/17 1,134,000
295,000 AAA Brea Public Finance Authority, Tax Allocation, MBIA-Insured,
7.000% due 8/1/15 309,381
Brisbane Redevelopment Agency, Tax Allocation,
(Brisbane Community Redevelopment Project):
200,000 AA 9.400% due 5/1/05 201,466
220,000 AA 9.400% due 5/1/06 221,558
30,000 AAA Concord Redevelopment Agency, Tax Allocation, Series 3,
MBIA-Insured, 8.000% due 7/1/18 30,343
6,000,000 AAA Corona Redevelopment Agency, Tax Allocation, Redevelopment Project
Area A, Series A, FGIC-Insured, 5.500% due 9/1/24 5,647,500
1,000,000 AAA El Centro Redevelopment Tax Allocation, MBIA-Insured,
6.375% due 11/1/17 1,052,500
4,160,000 AAA Fontana Public Finance Authority, Tax Allocation, MBIA-Insured,
Series A, 5.000% due 9/1/20 3,712,800
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) SECURITY VALUE
===================================================================================================================
<S> <C> <C> <C>
Tax Allocation -- 3.8% (continued)
$ 3,275,000 BBB+ Garden Grove Community Development Agency, Tax Allocation,
(Garden Grove Community Project), 5.700% due 10/1/08 $ 3,295,469
2,000,000 Baa* Hawthorne Community Redevelopment, Tax Allocation,
(Project Area 2), 6.625% due 9/1/14 2,090,000
Rancho Cucamonga Redevelopment, Tax Allocation,
(Rancho Redevelopment Project):
2,500,000 AAA FSA-Insured, 5.250% due 9/1/20 2,278,125
2,445,000 AAA MBIA-Insured, 5.250% due 9/1/16 2,331,919
San Diego Redevelopment, Tax Allocation,
(Centre City Redevelopment Project), AMBAC-Insured:
2,220,000 AAA Series A, 4.750% due 9/1/18 1,917,525
1,000,000 AAA Series C, 4.750% due 9/1/18 863,750
4,595,000 AAA Santa Clara Redevelopment Agency, Tax Allocation,
(Bayshore North Project), AMBAC-Insured, Series A,
5.250% due 6/1/19 4,279,094
- -------------------------------------------------------------------------------------------------------------------
32,466,680
- -------------------------------------------------------------------------------------------------------------------
Transportation -- 5.9%
Alameda Corridor Transportation Authority Revenue,
Series A, MBIA-Insured:
8,000,000 AAA 4.750% due 10/1/19 6,840,000
4,530,000 AAA 4.750% due 10/1/25 3,725,925
8,890,000 AAA Foothill/Eastern Corridor Agency, California Toll Road Revenue,
MBIA-Insured, 5.125% due 1/15/19 8,078,788
13,420,000 AAA Los Angeles County Metropolitan Transportation Authority,
Sales Tax Revenue, Proposal A, 1st Tier, Series B, FSA-Insured,
4.750% due 7/1/24 11,088,275
2,000,000 A3* Port of Oakland Special Facilities Revenue, Series A,
6.750% due 1/1/12 (c) 2,065,000
9,000,000 AAA Sacramento County Airport System Revenue, Series A,
MBIA-Insured, 5.900% due 7/1/24 (c) 8,865,000
400,000 A1* Sacramento Regional Transportation District, COP, Series A,
6.400% due 3/1/03 421,000
3,000,000 AAA San Francisco Airport Community International Corp., Lease Revenue,
FGIC-Insured, 6.500% due 5/1/19 (c) 3,120,000
180,000 AAA San Francisco Airport Improvement Corp., Lease Revenue,
(Escrowed to maturity with U.S. government securities),
8.000% due 7/1/13 207,675
2,770,000 AAA San Francisco Bay Area Rapid Transportation District Sales Tax,
AMBAC-Insured, 5.000% due 7/1/28 2,371,813
San Jose Airport Revenue Bonds,
FGIC-Insured:
200,000 AAA 5.400% due 3/1/04 (c) 205,500
1,500,000 AAA 5.500% due 3/1/07 (c) 1,537,500
1,250,000 A* Santa Barbara COP, (Harbor Reference Project), 6.750% due 10/1/27 1,296,875
- -------------------------------------------------------------------------------------------------------------------
49,823,351
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) SECURITY VALUE
=======================================================================================================================
<S> <C> <C> <C>
Utilities -- 3.8%
$ 360,000 A- Northern California Power Agency, Public Power Refunding,
Geothermal Project No. 3, Series A, 5.000% due 7/1/09 $ 354,600
2,000,000 AAA Redding Electric System Revenue, COP, Regular Linked SAVRS
& RIBS, MBIA-Insured, 6.368% due 7/8/22 (d) 2,097,500
2,670,000 AAA Redding Joint Powers Finance Authority, Electric System Revenue,
Series D, MBIA-Insured, 5.250% due 6/1/15 2,583,225
5,000,000 AAA Riverside Electrical Revenue, AMBAC-Insured, 5.000% due 10/1/22 4,337,500
Sacramento Municipal Utility District Electric Revenue:
Series D:
4,000,000 AAA FGIC-Insured, 5.250% due 11/15/12 3,990,000
4,500,000 AAA MBIA-Insured, 5.250% due 11/15/20 4,156,875
3,000,000 A Series E, 5.700% due 5/15/12 3,030,000
5,425,000 AAA Series I, MBIA-Insured, 5.750% due 1/1/15 5,472,469
5,000,000 AAA Southern California Public Power Authority, Power Project Revenue,
(Mead Adelanto Project), Series A, AMBAC-Insured,
5.000% due 7/1/17 4,537,500
1,960,000 BBB- Trinity County Public Utility District, COP, Electric District
Facilities, 6.750% due 4/1/23 (c) 1,964,900
- -----------------------------------------------------------------------------------------------------------------------
32,524,569
- -----------------------------------------------------------------------------------------------------------------------
Water & Sewer -- 24.4%
California State Department of Water, Central Valley Project Revenue:
Series O:
1,000,000 AA 5.000% due 12/1/22 873,750
2,235,000 AA 4.750% due 12/1/25 1,843,875
5,000,000 AA Series S, 5.000% due 12/1/19 4,450,000
11,000,000 AA Series U, 5.000% due 12/1/29 9,377,500
Castaic Lake Water Revenue, COP, (Water System Improvement
Project), AMBAC-Insured:
7,270,000 AAA 5.250% due 8/1/19 6,770,188
7,115,000 AAA 5.125% due 8/1/30 6,270,094
6,000,000 AAA Clovis Sewer Revenue Refunding, MBIA-Insured, 5.200% due 8/1/28 5,317,500
East Bay Municipal Utility District, FGIC-Insured:
9,300,000 AAA Wastewater Treatment Systems Revenue, 5.000% due 6/1/26 8,021,250
Water Systems Revenue:
7,500,000 AAA 5.000% due 6/1/15 7,059,375
1,750,000 AAA 5.000% due 6/1/16 1,605,625
5,000,000 AAA 4.750% due 6/1/21 4,218,750
8,400,000 AAA 5.000% due 6/1/26 7,245,000
Eastern Municipal Water District, COP, Water & Sewer Revenue,
Series A:
FGIC-Insured:
1,000,000 AAA 6.750% due 7/1/12 1,135,000
1,000,000 AAA 5.375% due 7/1/13 1,000,000
17,750,000 AAA MBIA-Insured, 5.250% due 7/1/23 16,219,063
1,900,000 AAA El Centro Financing Authority, Water & Wastewater Revenue, Series A,
AMBAC-Insured, 5.125% due 10/1/27 1,681,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) SECURITY VALUE
=========================================================================================================================
<S> <C> <C> <C>
Water & Sewer -- 24.4% (continued)
Fresno Sewer Revenue, Series A, MBIA-Insured:
$ 18,150,000 AAA 5.000% due 9/1/23 $ 15,835,875
6,400,000 AAA 4.750% due 9/1/26 5,272,000
2,430,000 AAA Los Angeles Wastewater System Revenue, Series A, MBIA-Insured,
5.700% due 6/1/09 2,505,938
Metropolitan Water District, Southern California Waterworks Revenue:
Series A:
1,000,000 AA 5.000% due 7/1/18 898,750
13,900,000 AA 4.750% due 7/1/22 11,589,125
6,000,000 AA 5.000% due 7/1/26 5,167,500
12,430,000 AAA MBIA-Insured, 5.000% due 7/1/30 10,627,650
4,500,000 AA Series C, 5.250% due 7/1/16 4,291,875
Modesto Irrigation District Financing Authority Revenue, COP,
Capital Improvement:
3,000,000 AAA Series A, AMBAC-Insured, 4.750% due 7/1/26 2,456,250
2,360,000 A+ Series B, 5.300% due 7/1/22 2,073,850
1,925,000 AAA Morgan Hill COP, FSA-Insured, 5.125% due 6/1/21 1,720,469
6,045,000 AAA Orange Cove Irrigation District Revenue, COP, (Rehabilitation Project),
AMBAC-Insured, 5.000% due 2/1/17 5,546,288
4,560,000 AAA Pittsburg Public Finance Authority, Wastewater Revenue, Series A,
FGIC-Insured, 5.375% due 6/1/22 4,246,500
6,575,000 AAA Placer County Water Revenue, COP, (Capital Improvement Projects),
AMBAC-Insured, 5.500% due 7/1/29 6,131,188
Pomona Public Financing Authority:
2,500,000 AAA Series AA, Water Facilities Project, 5.000% due 5/1/29 2,134,375
2,855,000 AAA Series Q, MBIA-Insured, 5.750% due 12/1/15 2,887,119
San Diego PFA Sewer Revenue, FGIC-Insured:
28,875,000 AAA 5.000% due 5/15/20 25,518,281
3,885,000 AAA Series B, 4.750% due 5/15/17 3,394,519
15,000,000 AA- San Francisco Public Utility, Community Water Revenue,
5.000% due 11/1/26 12,712,500
- -------------------------------------------------------------------------------------------------------------------------
208,098,522
- -------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $859,297,648**) $852,188,175
=========================================================================================================================
</TABLE>
(a) All ratings are by Standard & Poor's Ratings Service with the exception of
those identified by an asterisk (*), which are rated by Moody's Investors
Service, Inc.
(b) Bonds are escrowed to maturity with U.S. government securities and are
considered by the Manager to be triple-A rated even if issuer has not
applied for new ratings.
(c) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(d) Coupon for a residual interest bond varies inversely with the level of
short-term tax-exempt interest rates.
(e) Bonds are escrowed with U.S. government securities and are considered by
the Manager to be triple-A rated even if issuer has not applied for new
ratings.
(f) Security partially segregated by Custodian for open purchase commitments
and/or futures contracts commitments.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 18 and 19 for definitions of ratings and certain security
descriptions.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings (unaudited)
- --------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings Service ("Standard & Poor's") -- Ratings from "AA" to
"BB" may be modified by the addition of a plus (+) or minus (-) sign to show
relative standings within the major rating categories.
AAA -- Bonds rated "AAA"' have the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in a small
degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than bonds
in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debts in this category than in higher
rated categories.
BB -- Bonds rated "BB" have less near-term vulnerability to default than
other speculative issues. However, they face major ongoing
uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to inadequate capacity to meet timely
interest and principal payments.
Moody's Investors Service, Inc. ("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 rating within its generic category.
Aaa -- Bonds 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 these bonds.
Aa -- Bonds 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 that make the long-term risks
appear somewhat larger than in "Aaa" securities.
A -- Bonds 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 that suggest a susceptibility to impairment
some time in the future.
Baa -- Bonds rated "Baa" are considered to be medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payment
and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.
Ba -- Bonds rated "Ba" are judged to have speculative elements; their future
cannot be considerd as well assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future. Uncertainty
of position characterizes bonds in this class.
NR -- Indicates that the bond is not rated by Standard & Poor's or Moody's.
- --------------------------------------------------------------------------------
18 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Short-Term Security Ratings (unaudited)
- --------------------------------------------------------------------------------
SP-1 -- Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined to
possess overwhelming safety characteristics are denoted with a plus
(+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate demand
obligation ("VRDO") rating indicating that the degree of safety
regarding timely payment is either overwhelming or very strong; those
issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign.
VMIG 1 -- Moody's highest rating for issues having a demand feature -- VRDO.
P-1 -- Moody's highest rating for commercial paper and for VRDO prior to the
advent of the VMIG 1 rating.
- --------------------------------------------------------------------------------
Security Descriptions (unaudited)
- --------------------------------------------------------------------------------
ABAG -- Association of Bay Area Governments
AIG -- American International Guaranty
AMBAC -- AMBAC Indemnity Corporation
BAN -- Bond Anticipation Notes
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance Company
CHFCLI -- California Health Facility Construction Loan Insurance
CONNIE LEE -- College Construction Loan Insurance Association
COP -- Certificate of Participation
EDA -- Economic Development Authority
ETM -- Escrowed To Maturity
FAIRS -- Floating Adjustable Interest Rate Securities
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FRTC -- Floating Rate Trust Certificates
FSA -- Financial Security Assurance
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HDC -- Housing Development Corporation
HFA -- Housing Finance Authority
IDA -- Industrial Development Agency
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
ISD -- Independent School District
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCR -- Pollution Control Revenue
PFA -- Public Financing Authority
PSFG -- Permanent School Fund Guaranty
RAN -- Revenue Anticipation Notes
RIBS -- Residual Interest Bonds
SAVRS -- Select Auction Variable Rate Securities
TAN -- Tax Anticipation Notes
TECP -- Tax Exempt Commercial Paper
TOB -- Tender Option Bonds
TRAN -- Tax and Revenue Anticipation Notes
SYCC -- Structured Yield Curve Certificate
VA -- Veterans Administration
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost-- $859,297,648) $ 852,188,175
Interest receivable 12,719,141
Receivable for Fund shares sold 527,595
Receivable for securities sold 65,000
Other assets 10,169
- ---------------------------------------------------------------------------------------------------
Total Assets 865,510,080
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for Fund shares purchased 1,220,995
Investment advisory fees payable 321,870
Payable to broker - variation margin 112,500
Payable to bank 92,615
Distribution fees payable 38,279
Administration fees payable 29,178
Accrued expenses 206,282
- ---------------------------------------------------------------------------------------------------
Total Liabilities 2,021,719
- ---------------------------------------------------------------------------------------------------
Total Net Assets $ 863,488,361
===================================================================================================
NET ASSETS:
Par value of capital shares $ 56,518
Capital paid in excess of par value 892,806,059
Undistributed net investment income 124,836
Accumulated net realized loss from security transactions and futures contracts (22,100,704)
Net unrealized depreciation of investments and futures contracts (7,398,348)
- ---------------------------------------------------------------------------------------------------
Total Net Assets $ 863,488,361
===================================================================================================
Shares Outstanding:
Class A 41,093,291
----------------------------------------------------------------------------------------------
Class B 12,822,473
----------------------------------------------------------------------------------------------
Class L 2,527,773
----------------------------------------------------------------------------------------------
Class Y 74,725
----------------------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $15.28
----------------------------------------------------------------------------------------------
Class B * $15.28
----------------------------------------------------------------------------------------------
Class L ** $15.26
----------------------------------------------------------------------------------------------
Class Y (and redemption price) $15.29
----------------------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 4.17% of net asset value per share) $15.92
----------------------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $15.41
===================================================================================================
</TABLE>
* Redemption price is NAV of Class B shares reduced by a 4.50% CDSC if
shares are redeemed within one year from initial purchase (See Note 3).
** Redemption price is NAV of Class L shares reduced by a 1.00% CDSC if
shares are redeemed within the first year of purchase.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Year Ended February 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 55,087,335
- ------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 3) 2,983,546
Distribution fees (Note 3) 2,882,478
Administration fees (Note 3) 1,890,814
Shareholder and system servicing fees 201,644
Audit and legal 135,511
Registration fees 48,581
Shareholder communications 46,782
Custody 43,612
Directors' fees 41,996
Pricing fees 36,790
Other 30,916
- ------------------------------------------------------------------------------------------
Total Expenses 8,342,670
- ------------------------------------------------------------------------------------------
Net Investment Income 46,744,665
- ------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES 4 AND 5):
Realized Loss From:
Security transactions (18,520,213)
Futures contracts (84,000)
- ------------------------------------------------------------------------------------------
Net Realized Loss (18,604,213)
- ------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation) of Investments:
Beginning of year 79,656,591
End of year (7,398,348)
- ------------------------------------------------------------------------------------------
Increase in Net Unrealized Depreciation (87,054,939)
- ------------------------------------------------------------------------------------------
Net Loss on Investments and Futures Contracts (105,659,152)
- ------------------------------------------------------------------------------------------
Decrease in Net Assets From Operations $ (58,914,487)
==========================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Year Ended February 29, 2000
and the Year Ended February 28, 1999
<TABLE>
<CAPTION>
2000 1999
============================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 46,744,665 $ 43,919,316
Net realized loss (18,604,213) (3,397,658)
Increase in net unrealized appreciation (depreciation) (87,054,939) 7,234,476
- ------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations (58,914,487) 47,756,134
- ------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 2):
Net investment income (44,975,146) (44,415,694)
In excess of net investment income -- (1,220,517)
Net realized gains -- (5,885,401)
- ------------------------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (44,975,146) (51,521,612)
- ------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 147,999,352 253,027,947
Net asset value of shares issued for reinvestment of dividends 25,037,033 29,727,113
Cost of shares reacquired (271,883,695) (125,516,529)
- ------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Fund Share Transactions (98,847,310) 157,238,531
- ------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (202,736,943) 153,473,053
NET ASSETS:
Beginning of year 1,066,225,304 912,752,251
- ------------------------------------------------------------------------------------------------------------
End of year* $ 863,488,361 $ 1,066,225,304
============================================================================================================
* Includes undistributed (overdistributed) net investment income of: $ 124,836 $ (1,644,683)
============================================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Smith Barney California Municipals Fund Inc. ("Fund"), a Maryland corporation,
is registered under the Investment Company Act of 1940, as amended, as a
non-diversified, open-end management investment company.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities are valued
at the mean between the quoted bid and asked prices as provided by an
independent pricing service; (c) securities maturing within 60 days are valued
at cost plus accreted discount or minus amortized premium, which approximates
value; (d) gains or losses on the sale of securities are calculated using the
specific identification method; (e) interest income, adjusted for amortization
of premium and accretion of original issue discount, is recorded on an accrual
basis; market discount is recognized upon the disposition of the security; (f)
direct expenses are charged to each class; management fees and general fund
expenses are allocated on the basis of relative net assets; (g) dividends and
distributions to shareholders are recorded on the ex-dividend date; (h) the Fund
intends to comply with the applicable provisions of the Internal Revenue Code of
1986, as amended, pertaining to regulated investment companies and to make
distributions of taxable income sufficient to relieve it from substantially all
Federal income and excise taxes; (i) the character of income and gains to be
distributed are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. At February 29, 2000,
reclassifications were made to the Fund's capital accounts to reflect permanent
book/tax differences and income and gains available for distributions under
income tax regulations. Net investment income, net realized gains and net assets
were not affected by this adjustment; and (j) estimates and assumptions are
required to be made regarding assets, liabilities and changes in net assets
resulting from operations when financial statements are prepared. Changes in the
economic environment, financial markets and any other parameters used in
determining these estimates could cause actual results to differ.
2. Exempt-Interest Dividends and Other Distributions
The Fund intends to satisfy conditions that will enable interest from municipal
securities, which is exempt from Federal income tax and from designated state
income taxes, to retain such tax-exempt status when distributed to the
shareholders of the Fund.
Capital gains distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
3. Investment Advisory Agreement, Administration Agreement and Other
Transactions
SSB Citi Fund Management LLC ("SSBC"), formerly known as SSBC Fund Management
Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), which, in
turn, is a subsidiary of Citigroup Inc. ("Citigroup"), acts as investment
adviser to the Fund. The Fund pays SSBC an advisory fee calculated at an annual
rate of 0.30% of the average daily net assets. The investment advisory fee is
calculated daily and paid monthly.
SSBC also acts as the Fund's administrator for which the Fund pays a fee
calculated at an annual rate of 0.20% of the average daily net assets up to $500
million and 0.18% of the average daily net assets in excess of $500 million.
This fee is calculated daily and paid monthly.
Effective October 1999, Citi Fiduciary Trust Company ("CFTC"), another
subsidiary of Citigroup, became the Fund's transfer agent and PFPC Global Fund
Services ("PFPC") became the sub-transfer agent. CFTC receives account fees and
asset-based fees that vary according to the account size and type of account.
PFPC is responsible for shareholder record-
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
keeping and financial processing for all shareholder accounts and is paid by
CFTC. During the period October 1, 1999 through February 29, 2000, the Fund paid
transfer agent fees of $68,173 to CFTC.
CFBDS, Inc. ("CFBDS") acts as the Fund's distributor. Salomon Smith Barney Inc.
("SSB"), another subsidiary of SSBH, as well as certain other broker-dealers,
continues to sell Fund shares to the public as a member of the selling group.
There is a contingent deferred sales charge ("CDSC") of 4.50% on Class B shares,
which applies if redemption occurs within one year from purchase. This CDSC
declines by 0.50% the first year after purchase and thereafter by 1.00% per year
until no CDSC is incurred. Class L shares also have a 1.00% CDSC, which applies
if redemption occurs within the first year of purchase. In addition, Class A
shares also have a 1.00% CDSC, which applies if redemption occurs within the
first year of purchase. This CDSC only applies to those purchases of Class A
shares, which, when combined with current holdings of Class A shares, equal or
exceed $500,000 in the aggregate. These purchases do not incur an initial sales
charge.
For the year ended February 29, 2000, SSB and CFBDS received sales charges of
approximately $823,000 and $68,000 on sales of the Fund's Class A shares and
Class L shares, respectively. In addition, CDSCs paid to SSB were approximately:
Class A Class B Class L
================================================================================
CDSCs $ 31,000 $503,000 $ 15,000
================================================================================
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to its
Class A, B and L shares calculated at an annual rate of 0.15% of the average
daily net assets for each respective class. In addition, the Fund pays a
distribution fee with respect to its Class B and L shares calculated at an
annual rate of 0.50% and 0.55% of the average daily net assets of each class,
respectively.
For the year ended February 29, 2000, total Distribution Plan fees incurred
were:
Class A Class B Class L
================================================================================
Distribution Plan Fees $1,081,175 $1,481,570 $ 319,733
================================================================================
All officers and one Director of the Fund are employees of SSB.
4. Investments
During the year ended February 29, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $284,821,917
- --------------------------------------------------------------------------------
Sales 378,085,989
================================================================================
At February 29, 2000, aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were as follows:
================================================================================
Gross unrealized appreciation $ 25,958,176
Gross unrealized depreciation (33,067,649)
- --------------------------------------------------------------------------------
Net unrealized depreciation $ (7,109,473)
================================================================================
5. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. Securities equal to the initial margin amount are segregated by the
custodian in the name of the broker. Additional securities are also segregated
up to the current market value of the futures contracts. During the period the
futures contract is open, changes in the value of the contract are recognized as
unrealized gains or losses by "marking-to-market" on a daily basis to reflect
the market value of the contract at the end of each day's trading. Variation
margin payments are received or made and recognized as assets due from or
liabilities due to broker, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Fund records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transactions and the Fund's basis in the contract.
- --------------------------------------------------------------------------------
24 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
The Fund enters into such contracts to hedge a portion of its portfolio. The
Fund bears the market risk that arises from changes in the value of the
financial instruments and securities indices (futures contracts).
At February 29, 2000, the Fund had the following open futures contracts:
<TABLE>
<CAPTION>
Expiration # of Basis Market Unrealized
Month/Year Contracts Value Value Gain (Loss)
===========================================================================================================
<S> <C> <C> <C> <C> <C>
Futures contracts to buy:
Municipal Bond Index 3/00 300 $ 27,429,500 $ 27,984,376 $ 554,876
- -----------------------------------------------------------------------------------------------------------
Futures contracts to sell:
U.S. Treasury Long Bond Index 3/00 300 27,674,999 28,518,750 (843,751)
- -----------------------------------------------------------------------------------------------------------
Net Unrealized Loss $ (288,875)
===========================================================================================================
</TABLE>
6. Capital Shares
At February 29, 2000, the Fund had 500 million shares of $0.001 par value
capital stock authorized. 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.
At February 29, 2000, total paid-in capital amounted to the following for each
class:
<TABLE>
<CAPTION>
Class A Class B Class L Class Y
=========================================================================================
<S> <C> <C> <C> <C>
Total Paid-in Capital $638,788,869 $210,297,125 $42,345,211 $1,431,372
=========================================================================================
</TABLE>
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
February 29, 2000 February 28, 1999(1)
---------------------------- ---------------------------
Shares Amount Shares Amount
================================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 6,983,346 $ 112,760,970 9,597,866 $ 163,199,621
Shares issued on reinvestment 1,158,388 18,429,385 1,267,288 21,508,604
Shares reacquired (12,477,687) (197,363,379) (4,546,797) (77,276,081)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (4,335,953) $ (66,173,024) 6,318,357 $ 107,432,144
================================================================================================
Class B
Shares sold 1,628,698 $ 26,306,497 3,186,068 $ 54,114,417
Shares issued on reinvestment 326,617 5,195,228 385,228 6,535,072
Shares reacquired (3,741,218) (59,176,884) (1,695,121) (28,785,369)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (1,785,903) $ (27,675,159) 1,876,175 $ 31,864,120
================================================================================================
Class L(2)
Shares sold 551,473 $ 8,931,885 1,131,864 $ 19,213,909
Shares issued on reinvestment 85,035 1,350,873 79,230 1,343,281
Shares reacquired (956,885) (15,073,569) (251,417) (4,268,907)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (320,377) $ (4,790,811) 959,677 $ 16,288,283
================================================================================================
Class Y
Shares sold -- $ -- 960,767 $ 16,500,000
Shares issued on reinvestment 3,854 61,547 19,970 340,156
Shares reacquired (17,634) (269,863) (892,232) (15,186,172)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (13,780) $ (208,316) 88,505 $ 1,653,984
================================================================================================
</TABLE>
(1) For Class Y shares, transactions are for the period from September 22,
1998 (inception date) to February 28, 1999.
(2) On June 12, 1998, Class C shares were renamed Class L shares.
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
7. Capital Loss Carryforward
At February 29, 2000, the Fund had, for Federal income tax purposes, capital
loss carryforwards of approximately $13,908,000 available, subject to certain
limitations, to offset future capital gains. To the extent that these capital
carryforward losses are used to offset capital gains, it is probable that the
gains so offest will not be distributed.
The amount and expiration of the carryforwards are indicated below. Expiration
occurs at the end of February of the year indicated:
2007 2008
================================================================================
Carryforward Amounts $ 2,923,000 $10,985,000
================================================================================
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.
- --------------------------------------------------------------------------------
26 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended February 28, except where noted:
<TABLE>
<CAPTION>
Class A Shares 2000(1)(2) 1999(1) 1998 1997 1996(1)(3)
===========================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 16.93 $ 16.99 $ 16.26 $ 16.31 $ 15.40
- ----------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.78 0.77 0.82 0.85 0.85
Net realized and unrealized gain (loss) (1.67) 0.07 0.98 0.15 0.93
- ----------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.89) 0.84 1.80 1.00 1.78
- ----------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.76) (0.78) (0.84) (0.85) (0.84)
In excess of net investment income -- (0.02) -- -- --
Net realized gains -- (0.10) (0.23) (0.20) (0.03)
- ----------------------------------------------------------------------------------------------------------
Total Distributions (0.76) (0.90) (1.07) (1.05) (0.87)
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 15.28 $ 16.93 $ 16.99 $ 16.26 $ 16.31
- ----------------------------------------------------------------------------------------------------------
Total Return (5.36)% 5.02% 11.44% 6.37% 11.93%
- ----------------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $ 628 $ 769 $ 664 $ 579 $ 582
- ----------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.70% 0.68% 0.70% 0.71% 0.76%
Net investment income 4.99 4.53 4.97 5.29 5.26
- ----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 29% 13% 43% 60% 44%
===========================================================================================================
<CAPTION>
Class B Shares 2000(1)(2) 1999(1) 1998 1997 1996(1)(3)
===========================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 16.93 $ 16.98 $ 16.25 $ 16.32 $ 15.40
- ----------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.70 0.68 0.74 0.76 0.75
Net realized and unrealized gain (loss) (1.68) 0.08 0.98 0.14 0.96
- ----------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.98) 0.76 1.72 0.90 1.71
- ----------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.67) (0.69) (0.76) (0.77) (0.76)
In excess of net investment income -- (0.02) -- -- --
Net realized gains -- (0.10) (0.23) (0.20) (0.03)
- ----------------------------------------------------------------------------------------------------------
Total Distributions (0.67) (0.81) (0.99) (0.97) (0.79)
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 15.28 $ 16.93 $ 16.98 $ 16.25 $ 16.32
- ----------------------------------------------------------------------------------------------------------
Total Return (5.87)% 4.56% 10.88% 5.73% 11.39%
- ----------------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $ 196 $ 247 $ 216 $ 173 $ 153
- ----------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.22% 1.20% 1.21% 1.23% 1.29%
Net investment income 4.47 4.02 4.45 4.75 4.71
- ----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 29% 13% 43% 60% 44%
===========================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) For the year ended February 29, 2000.
(3) For the year ended February 29, 1996.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 27
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended February 28, except where noted:
<TABLE>
<CAPTION>
Class L Shares 2000(1)(2) 1999(1)(3) 1998 1997 1996(1)(4)
===========================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 16.91 $ 16.97 $ 16.24 $ 16.31 $ 15.40
- ----------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.69 0.67 0.73 0.75 0.78
Net realized and unrealized gain (loss) (1.68) 0.07 0.98 0.15 0.92
- ----------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.99) 0.74 1.71 0.90 1.70
- ----------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.66) (0.68) (0.75) (0.77) (0.76)
In excess of net investment income -- (0.02) -- -- --
Net realized gains -- (0.10) (0.23) (0.20) (0.03)
- ----------------------------------------------------------------------------------------------------------
Total Distributions (0.66) (0.80) (0.98) (0.97) (0.79)
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 15.26 $ 16.91 $ 16.97 $ 16.24 $ 16.31
- ----------------------------------------------------------------------------------------------------------
Total Return (5.92)% 4.45% 10.83% 5.68% 11.30%
- ----------------------------------------------------------------------------------------------------------
Net Assets, End of Year (millions) $ 38 $ 48 $ 32 $ 17 $ 11
- ----------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.28% 1.24% 1.26% 1.29% 1.39%
Net investment income 4.41 3.97 4.39 4.69 4.44
- ----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 29% 13% 43% 60% 44%
===========================================================================================================
</TABLE>
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) For the year ended February 29, 2000.
(3) On June 12, 1998, Class C shares were renamed Class L shares.
(4) For the year ended February 29, 1996.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
28 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended February 28, except where noted:
Class Y Shares 2000(1)(2) 1999(1)(3)
================================================================================
Net Asset Value, Beginning of Year $ 16.93 $ 17.19
- --------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.82 0.34
Net realized and unrealized loss (1.68) (0.11)
- --------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.86) 0.23
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.78) (0.37)
In excess of net investment income -- (0.02)
Net realized gains -- (0.10)
- --------------------------------------------------------------------------------
Total Distributions (0.78) (0.49)
- --------------------------------------------------------------------------------
Net Asset Value, End of Year $ 15.29 $ 16.93
- --------------------------------------------------------------------------------
Total Return (5.14)% 1.34%++
- --------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 1,142 $ 1,498
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.46% 0.53%+
Net investment income 5.22 4.56+
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 29% 13%
================================================================================
(1) Per share amounts have been calculated using the monthly average shares
method.
(2) For the year ended February 29, 2000.
(3) For the period from September 22, 1998 (inception date) to February 28,
1999.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 29
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of
Smith Barney California Municipals Fund Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Smith Barney California Municipals Fund Inc. as
of February 29, 2000, the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended and financial highlights for each of the years in the
five-year period then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
February 29, 2000, by correspondence with the custodian. As to securities sold
but not yet delivered, we performed other appropriate auditing procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Smith
Barney California Municipals Fund Inc. as of February 29, 2000, the results of
its operations for the year then ended, the changes in its net assets for each
of the years in the two-year period then ended and financial highlights for each
of the years in the five-year period then ended, in conformity with generally
accepted accounting principles.
KPMG LLP
New York, New York
April 13, 2000
- --------------------------------------------------------------------------------
30 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes the Fund hereby designates for the fiscal year ended
February 29, 2000:
o 100% of the dividends paid by the Fund from net investment income as
tax-exempt for regular Federal income tax purposes.
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc. 31
<PAGE>
Smith Barney California Municipals Fund Inc.
Directors
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt N. Dorsett
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon, Chairman
Cornelius C. Rose
James J. Crisona, Emeritus
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President and Treasurer
Joseph P. Deane
Vice President and Investment Officer
David Fare
Investment Officer
Anthony Pace
Controller
Christina T. Sydor
Secretary
Investment Adviser and Administrator
SSB Citi Fund Management LLC
Distributor
CFBDS, Inc.
Custodian
PNC Bank, N.A.
Transfer Agent
Citi Fiduciary Trust Company
388 Greenwich Street, 22nd Floor
New York, New York 10013
Sub-Transfer Agent
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island 02940-9699
This report is submitted for the general information of shareholders of Smith
Barney California Municipals Fund Inc., but it may also be used as sales
literature when proceeded or accompanied by the current Prospectus, which gives
details about charges, expenses, investment objectives and operating policies of
the Fund. If used as sales material after May 31, 2000, this report must be
accompanied by performance information for the most recently completed calendar
quarter.
SALOMON SMITH BARNEY
--------------------
A member if citigroup [LOGO]
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Smith Barney California
Municipals Fund Inc.
Smith Barney Mutual Funds
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com/mutualfunds
FD0434 4/00
