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<PAGE> PAGE 7
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<PAGE> PAGE 13
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<PAGE> PAGE 16
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<PAGE> PAGE 17
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<PAGE> PAGE 19
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<PAGE> PAGE 20
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<PAGE> PAGE 21
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058 A000800 N
059 000800 Y
060 A000800 Y
060 B000800 Y
061 000800 1000
062 A000800 Y
062 B000800 0.0
062 C000800 0.0
062 D000800 8.0
062 E000800 0.0
062 F000800 0.0
062 G000800 0.0
062 H000800 0.0
062 I000800 0.0
062 J000800 0.0
062 K000800 0.0
062 L000800 0.0
062 M000800 0.0
062 N000800 0.0
062 O000800 0.0
062 P000800 84.5
062 Q000800 7.5
062 R000800 0.0
063 A000800 0
063 B000800 8.1
064 A000800 N
064 B000800 N
066 A000800 N
067 000800 N
068 A000800 N
068 B000800 N
069 000800 N
070 A010800 Y
070 A020800 Y
070 B010800 N
070 B020800 N
070 C010800 Y
070 C020800 N
070 D010800 N
070 D020800 N
070 E010800 N
070 E020800 N
070 F010800 N
070 F020800 N
070 G010800 Y
070 G020800 Y
070 H010800 N
<PAGE> PAGE 22
070 H020800 N
070 I010800 Y
070 I020800 N
070 J010800 Y
070 J020800 Y
070 K010800 N
070 K020800 N
070 L010800 Y
070 L020800 Y
070 M010800 Y
070 M020800 Y
070 N010800 Y
070 N020800 N
070 O010800 Y
070 O020800 N
070 P010800 Y
070 P020800 N
070 Q010800 N
070 Q020800 N
070 R010800 N
070 R020800 N
071 A000800 1102
071 B000800 805
071 C000800 1032
071 D000800 78
072 A000800 12
072 B000800 112952
072 C000800 7488
072 D000800 0
072 E000800 0
072 F000800 5646
072 G000800 2259
072 H000800 0
072 I000800 760
072 J000800 46
072 K000800 0
072 L000800 78
072 M000800 25
072 N000800 180
072 O000800 0
072 P000800 0
072 Q000800 0
072 R000800 30
072 S000800 8
072 T000800 5818
072 U000800 0
072 V000800 0
072 W000800 42
072 X000800 14892
072 Y000800 0
072 Z000800 105548
<PAGE> PAGE 23
072AA000800 15929
072BB000800 0
072CC010800 63292
072CC020800 0
072DD010800 105
072DD020800 0
072EE000800 0
073 A010800 0.0000
073 A020800 0.0000
073 B000800 0.0000
073 C000800 0.0000
074 A000800 708
074 B000800 103012
074 C000800 0
074 D000800 1089442
074 E000800 93952
074 F000800 2275
074 G000800 0
074 H000800 0
074 I000800 1314
074 J000800 3345
074 K000800 4582
074 L000800 19561
074 M000800 0
074 N000800 1318191
074 O000800 27523
074 P000800 613
074 Q000800 0
074 R010800 0
074 R020800 0
074 R030800 0
074 R040800 1235
074 S000800 0
074 T000800 1288820
074 U010800 108945
074 U020800 0
074 V010800 0.00
074 V020800 0.00
074 W000800 0.0000
074 X000800 55665
074 Y000800 0
075 A000800 0
075 B000800 1133265
076 000800 0.00
028 A010900 5661
028 A020900 4638
028 A030900 0
028 A040900 60365
028 B010900 6154
028 B020900 8811
028 B030900 0
<PAGE> PAGE 24
028 B040900 55152
028 C010900 5177
028 C020900 4193
028 C030900 0
028 C040900 50838
028 D010900 5939
028 D020900 0
028 D030900 0
028 D040900 54025
028 E010900 6923
028 E020900 7921
028 E030900 0
028 E040900 47130
028 F010900 9986
028 F020900 3797
028 F030900 0
028 F040900 51390
028 G010900 39840
028 G020900 29360
028 G030900 0
028 G040900 318900
028 H000900 21717
029 000900 Y
030 A000900 55
030 B000900 5.00
030 C000900 1.00
031 A000900 0
031 B000900 0
032 000900 0
033 000900 55
034 000900 Y
035 000900 2518
036 A000900 Y
036 B000900 0
037 000900 N
038 000900 0
039 000900 N
040 000900 Y
041 000900 Y
042 A000900 0
042 B000900 0
042 C000900 0
042 D000900 0
042 E000900 0
042 F000900 0
042 G000900 0
042 H000900 0
043 000900 9205
044 000900 0
045 000900 Y
046 000900 N
<PAGE> PAGE 25
047 000900 Y
048 000900 0.450
048 A010900 0
048 A020900 0.000
048 B010900 0
048 B020900 0.000
048 C010900 0
048 C020900 0.000
048 D010900 0
048 D020900 0.000
048 E010900 0
048 E020900 0.000
048 F010900 0
048 F020900 0.000
048 G010900 0
048 G020900 0.000
048 H010900 0
048 H020900 0.000
048 I010900 0
048 I020900 0.000
048 J010900 0
048 J020900 0.000
048 K010900 0
048 K020900 0.000
062 A000900 Y
062 B000900 0.0
062 C000900 0.0
062 D000900 0.0
062 E000900 0.0
062 F000900 0.0
062 G000900 0.0
062 H000900 0.0
062 I000900 0.0
062 J000900 0.0
062 K000900 0.0
062 L000900 0.0
062 M000900 0.0
062 N000900 0.0
062 O000900 0.0
062 P000900 40.3
062 Q000900 0.0
062 R000900 59.7
063 A000900 0
063 B000900 2.8
064 A000900 N
064 B000900 N
066 A000900 Y
066 F000900 Y
067 000900 N
068 A000900 N
068 B000900 N
<PAGE> PAGE 26
069 000900 N
070 A010900 Y
070 A020900 Y
070 B010900 Y
070 B020900 N
070 C010900 Y
070 C020900 N
070 D010900 Y
070 D020900 N
070 E010900 Y
070 E020900 N
070 F010900 Y
070 F020900 N
070 G010900 Y
070 G020900 N
070 H010900 Y
070 H020900 N
070 I010900 N
070 I020900 N
070 J010900 N
070 J020900 N
070 K010900 N
070 K020900 N
070 L010900 Y
070 L020900 Y
070 M010900 N
070 M020900 N
070 N010900 Y
070 N020900 Y
070 O010900 Y
070 O020900 Y
070 P010900 N
070 P020900 N
070 Q010900 Y
070 Q020900 N
070 R010900 Y
070 R020900 N
071 A000900 625440
071 B000900 1107547
071 C000900 1399936
071 D000900 45
072 A000900 12
072 B000900 46731
072 C000900 44390
072 D000900 0
072 E000900 0
072 F000900 6432
072 G000900 2859
072 H000900 0
072 I000900 1352
072 J000900 58
<PAGE> PAGE 27
072 K000900 0
072 L000900 188
072 M000900 15
072 N000900 80
072 O000900 0
072 P000900 0
072 Q000900 0
072 R000900 28
072 S000900 14
072 T000900 9205
072 U000900 0
072 V000900 0
072 W000900 35
072 X000900 20266
072 Y000900 0
072 Z000900 70855
072AA000900 24744
072BB000900 0
072CC010900 158793
072CC020900 0
072DD010900 14048
072DD020900 58898
072EE000900 32857
073 A010900 0.0000
073 A020900 0.0000
073 B000900 0.0000
073 C000900 0.0000
074 A000900 29993
074 B000900 0
074 C000900 0
074 D000900 0
074 E000900 0
074 F000900 1224966
074 G000900 0
074 H000900 0
074 I000900 0
074 J000900 27127
074 K000900 0
074 L000900 11504
074 M000900 0
074 N000900 1293590
074 O000900 10410
074 P000900 30936
074 Q000900 0
074 R010900 0
074 R020900 0
074 R030900 0
074 R040900 4823
074 S000900 0
074 T000900 1247421
074 U010900 16000
<PAGE> PAGE 28
074 U020900 64348
074 V010900 0.00
074 V020900 0.00
074 W000900 0.0000
074 X000900 93813
074 Y000900 0
075 A000900 0
075 B000900 1432174
076 000900 0.00
028 A011000 48997
028 A021000 9864
028 A031000 0
028 A041000 41443
028 B011000 45903
028 B021000 19855
028 B031000 0
028 B041000 39351
028 C011000 45729
028 C021000 9973
028 C031000 0
028 C041000 45937
028 D011000 48747
028 D021000 0
028 D031000 0
028 D041000 41116
028 E011000 54115
028 E021000 19987
028 E031000 0
028 E041000 52185
028 F011000 58515
028 F021000 9980
028 F031000 0
028 F041000 58162
028 G011000 302006
028 G021000 69659
028 G031000 0
028 G041000 278194
028 H001000 57069
029 001000 Y
030 A001000 983
030 B001000 4.50
030 C001000 0.00
031 A001000 983
031 B001000 0
032 001000 0
033 001000 0
034 001000 Y
035 001000 2890
036 A001000 Y
036 B001000 0
037 001000 N
<PAGE> PAGE 29
038 001000 0
039 001000 N
040 001000 Y
041 001000 Y
042 A001000 0
042 B001000 0
042 C001000 0
042 D001000 0
042 E001000 0
042 F001000 0
042 G001000 0
042 H001000 0
043 001000 100
044 001000 0
045 001000 Y
046 001000 N
047 001000 Y
048 001000 0.450
048 A011000 0
048 A021000 0.000
048 B011000 0
048 B021000 0.000
048 C011000 0
048 C021000 0.000
048 D011000 0
048 D021000 0.000
048 E011000 0
048 E021000 0.000
048 F011000 0
048 F021000 0.000
048 G011000 0
048 G021000 0.000
048 H011000 0
048 H021000 0.000
048 I011000 0
048 I021000 0.000
048 J011000 0
048 J021000 0.000
048 K011000 0
048 K021000 0.000
049 001000 N
050 001000 N
051 001000 N
052 001000 N
053 A001000 N
062 A001000 Y
062 B001000 0.0
062 C001000 0.0
062 D001000 6.8
062 E001000 0.0
062 F001000 0.0
<PAGE> PAGE 30
062 G001000 0.0
062 H001000 0.0
062 I001000 0.0
062 J001000 0.0
062 K001000 0.0
062 L001000 0.0
062 M001000 4.8
062 N001000 33.1
062 O001000 0.0
062 P001000 18.0
062 Q001000 2.0
062 R001000 35.3
063 A001000 0
063 B001000 17.9
064 A001000 N
064 B001000 N
066 A001000 N
067 001000 N
068 A001000 N
068 B001000 N
069 001000 N
070 A011000 Y
070 A021000 Y
070 B011000 Y
070 B021000 N
070 C011000 Y
070 C021000 N
070 D011000 N
070 D021000 N
070 E011000 Y
070 E021000 N
070 F011000 N
070 F021000 N
070 G011000 Y
070 G021000 N
070 H011000 N
070 H021000 N
070 I011000 N
070 I021000 N
070 J011000 Y
070 J021000 Y
070 K011000 N
070 K021000 N
070 L011000 Y
070 L021000 Y
070 M011000 Y
070 M021000 Y
070 N011000 Y
070 N021000 N
070 O011000 Y
070 O021000 N
<PAGE> PAGE 31
070 P011000 N
070 P021000 N
070 Q011000 N
070 Q021000 N
070 R011000 N
070 R021000 N
071 A001000 2482
071 B001000 2301
071 C001000 2706
071 D001000 8504
072 A001000 12
072 B001000 223385
072 C001000 5810
072 D001000 0
072 E001000 0
072 F001000 12547
072 G001000 5576
072 H001000 0
072 I001000 1988
072 J001000 598
072 K001000 0
072 L001000 96
072 M001000 30
072 N001000 150
072 O001000 0
072 P001000 0
072 Q001000 0
072 R001000 28
072 S001000 16
072 T001000 19196
072 U001000 0
072 V001000 0
072 W001000 103
072 X001000 40328
072 Y001000 0
072 Z001000 188867
072AA001000 53421
072BB001000 0
072CC011000 45384
072CC021000 0
072DD011000 19754
072DD021000 189337
072EE001000 0
073 A011000 0.0000
073 A021000 0.0000
073 B001000 0.0000
073 C001000 0.0000
074 A001000 0
074 B001000 205331
074 C001000 0
074 D001000 2758988
<PAGE> PAGE 32
074 E001000 60318
074 F001000 0
074 G001000 0
074 H001000 0
074 I001000 923
074 J001000 218243
074 K001000 0
074 L001000 45204
074 M001000 24234
074 N001000 3313241
074 O001000 306801
074 P001000 0
074 Q001000 0
074 R011000 105831
074 R021000 0
074 R031000 0
074 R041000 8804
074 S001000 0
074 T001000 2891805
074 U011000 33386
074 U021000 304019
074 V011000 0.00
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076 001000 0.00
SIGNATURE THOMAS M. REYNOLDS
TITLE CONTROLLER
To The Shareholders and Board of Trustees of
Smith Barney Income Funds:
In planning and performing our audits of the financial
statements of the Smith Barney Convertible Fund of Smith
Barney Income Funds (the "Fund") for the year ended July 31,
1997, we considered its internal control structure,
including procedures for safeguarding securities, in order
to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of the Fund is responsible for establishing
and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of internal control structure policies and
procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition and that transactions
are executed in accordance with management's authorization
and recorded properly to permit preparation of financial
statements in conformity with generally accepted accounting
principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and not be
detected. Also, projection of any evaluation of the
structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or
that the effectiveness of the design and operation may
deteriorate.
Our consideration of the internal control structure would
not necessarily disclose all matters in the internal control
structure that might be material weaknesses under standards
established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which
the design or operation of the specific internal control
structure elements does not reduce to a relatively low level
the risk that errors or irregularities in amounts that would
be material in relation to the financial statements being
audited may occur and not be detected within a timely period
by employees in the normal course of performing their
assigned functions. However, we noted no matters involving
the internal control structure, including procedures for
safeguarding securities, that we consider to be material
weaknesses as defined above as of July 31, 1997.
This report is intended solely for the information and use
of management and the Securities and Exchange Commission.
September 15, 1997
To The Shareholders and Board of Trustees of
Smith Barney Income Funds:
In planning and performing our audits of the financial
statements of the Smith Barney Diversified Strategic Income
Fund of Smith Barney Income Funds (the "Fund") for the year
ended July 31, 1997, we considered its internal control
structure, including procedures for safeguarding securities,
in order to determine our auditing procedures for the
purpose of expressing our opinion on the financial
statements and to comply with the requirements of Form N-
SAR, not to provide assurance on the internal control
structure.
The management of the Fund is responsible for establishing
and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of internal control structure policies and
procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition and that transactions
are executed in accordance with management's authorization
and recorded properly to permit preparation of financial
statements in conformity with generally accepted accounting
principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and not be
detected. Also, projection of any evaluation of the
structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or
that the effectiveness of the design and operation may
deteriorate.
Our consideration of the internal control structure would
not necessarily disclose all matters in the internal control
structure that might be material weaknesses under standards
established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which
the design or operation of the specific internal control
structure elements does not reduce to a relatively low level
the risk that errors or irregularities in amounts that would
be material in relation to the financial statements being
audited may occur and not be detected within a timely period
by employees in the normal course of performing their
assigned functions. However, we noted no matters involving
the internal control structure, including procedures for
safeguarding securities, that we consider to be material
weaknesses as defined above as of July 31, 1997.
This report is intended solely for the information and use
of management and the Securities and Exchange Commission.
September 15, 1997
To The Shareholders and Board of Trustees of
Smith Barney Income Funds:
In planning and performing our audits of the financial
statements of the Smith Barney Exchange Reserve Fund of
Smith Barney Income Funds (the "Fund") for the year ended
July 31, 1997, we considered its internal control structure,
including procedures for safeguarding securities, in order
to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of the Fund is responsible for establishing
and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of internal control structure policies and
procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition and that transactions
are executed in accordance with management's authorization
and recorded properly to permit preparation of financial
statements in conformity with generally accepted accounting
principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and not be
detected. Also, projection of any evaluation of the
structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or
that the effectiveness of the design and operation may
deteriorate.
Our consideration of the internal control structure would
not necessarily disclose all matters in the internal control
structure that might be material weaknesses under standards
established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which
the design or operation of the specific internal control
structure elements does not reduce to a relatively low level
the risk that errors or irregularities in amounts that would
be material in relation to the financial statements being
audited may occur and not be detected within a timely period
by employees in the normal course of performing their
assigned functions. However, we noted no matters involving
the internal control structure, including procedures for
safeguarding securities, that we consider to be material
weaknesses as defined above as of July 31, 1997.
This report is intended solely for the information and use
of management and the Securities and Exchange Commission.
September 15, 1997
To The Shareholders and Board of Trustees of
Smith Barney Income Funds:
In planning and performing our audits of the financial
statements of the Smith Barney High Income Fund of Smith
Barney Income Funds (the "Fund") for the year ended July 31,
1997, we considered its internal control structure,
including procedures for safeguarding securities, in order
to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of the Fund is responsible for establishing
and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of internal control structure policies and
procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition and that transactions
are executed in accordance with management's authorization
and recorded properly to permit preparation of financial
statements in conformity with generally accepted accounting
principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and not be
detected. Also, projection of any evaluation of the
structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or
that the effectiveness of the design and operation may
deteriorate.
Our consideration of the internal control structure would
not necessarily disclose all matters in the internal control
structure that might be material weaknesses under standards
established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which
the design or operation of the specific internal control
structure elements does not reduce to a relatively low level
the risk that errors or irregularities in amounts that would
be material in relation to the financial statements being
audited may occur and not be detected within a timely period
by employees in the normal course of performing their
assigned functions. However, we noted no matters involving
the internal control structure, including procedures for
safeguarding securities, that we consider to be material
weaknesses as defined above as of July 31, 1997.
This report is intended solely for the information and use
of management and the Securities and Exchange Commission.
September 15, 1997
To The Shareholders and Board of Trustees of
Smith Barney Income Funds:
In planning and performing our audits of the financial
statements of the Smith Barney Tax-Exempt Income Fund of
Smith Barney Income Funds (the "Fund") for the year ended
July 31, 1997, we considered its internal control structure,
including procedures for safeguarding securities, in order
to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of the Fund is responsible for establishing
and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of internal control structure policies and
procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition and that transactions
are executed in accordance with management's authorization
and recorded properly to permit preparation of financial
statements in conformity with generally accepted accounting
principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and not be
detected. Also, projection of any evaluation of the
structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or
that the effectiveness of the design and operation may
deteriorate.
Our consideration of the internal control structure would
not necessarily disclose all matters in the internal control
structure that might be material weaknesses under standards
established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which
the design or operation of the specific internal control
structure elements does not reduce to a relatively low level
the risk that errors or irregularities in amounts that would
be material in relation to the financial statements being
audited may occur and not be detected within a timely period
by employees in the normal course of performing their
assigned functions. However, we noted no matters involving
the internal control structure, including procedures for
safeguarding securities, that we consider to be material
weaknesses as defined above as of July 31, 1997.
This report is intended solely for the information and use
of management and the Securities and Exchange Commission.
September 15, 1997
To The Shareholders and Board of Trustees of
Smith Barney Income Funds:
In planning and performing our audits of the financial
statements of the Smith Barney Utilities Fund of Smith
Barney Income Funds (the "Fund") for the year ended July 31,
1997, we considered its internal control structure,
including procedures for safeguarding securities, in order
to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of the Fund is responsible for establishing
and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of internal control structure policies and
procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition and that transactions
are executed in accordance with management's authorization
and recorded properly to permit preparation of financial
statements in conformity with generally accepted accounting
principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and not be
detected. Also, projection of any evaluation of the
structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or
that the effectiveness of the design and operation may
deteriorate.
Our consideration of the internal control structure would
not necessarily disclose all matters in the internal control
structure that might be material weaknesses under standards
established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which
the design or operation of the specific internal control
structure elements does not reduce to a relatively low level
the risk that errors or irregularities in amounts that would
be material in relation to the financial statements being
audited may occur and not be detected within a timely period
by employees in the normal course of performing their
assigned functions. However, we noted no matters involving
the internal control structure, including procedures for
safeguarding securities, that we consider to be material
weaknesses as defined above as of July 31, 1997.
This report is intended solely for the information and use
of management and the Securities and Exchange Commission.
September 15, 1997
