SEMI-ANNUAL
REPORT
DESCRIPTION OF ART WORK ON REPORT COVER
Small box above fund name showing a sky view of a New Jersey highway with
surrounding city buildings.
Smith Barney
NEW JERSEY MUNICIPALS FUND INC.
SEPTEMBER 30, 1994
DEAR SHAREHOLDER:
We are pleased to provide you with the Semi-Annual Report which includes
the portfolio of investments for Smith Barney New Jersey Municipals Fund
Inc. for the six-month period ended September 30, 1994. During the past
six months, in response to declining prices for municipal bonds, the
Fund's net asset value for Class A and Class B shares declined to $12.39
from $12.55 per share. Investors owning Class A shares received income
distributions of $0.34 per share; investors owning Class B shares received
income distributions of $0.31 per share. The total return for the six-
month period was 1.44% for Class A shares and 1.16% for Class B shares.
Further information about the performance of your investment during this
and previous fiscal periods is available from the "Financial Highlights"
pages of this report.
The year 1994 has produced a difficult investment climate for the fixed
income investor as fear of an economic expansion and, by implication, the
threat of inflation have gripped both the global and domestic bond mar-
kets. In an effort to combat inflation, the Federal Reserve has raised in-
terest rates six times and there is the possibility that it may do so
again before year end. This has led to a bond market characterized by pes-
simism and selling pressures, and consequently lower prices for most
fixed-income securities. From our perspective, however, trends presently
aligning themselves in the bond markets should provide positive develop-
ments for the debt markets in general, and tax-exempt securities in par-
ticular.
When the markets become convinced that the Federal Reserve will do what is
necessary to slow economic growth, volatility should lessen and bond
prices stabilize. This outcome becomes more likely as the Federal Reserve
raises short-term rates. Furthermore, as the Federal Reserve increases in-
terest rates, the dollar should strengthen, which would heighten the ap-
peal of U.S. debt instruments to foreign investors, thereby providing ad-
ditional support to U.S. markets. We are also of the opinion that once the
fall election cycle completes itself, the markets will benefit from a
clearer knowledge of the political makeup and fiscal direction of our gov-
ernment.
The tax-exempt market should continue to benefit from higher Federal tax
rates and a lack of new debt issuance, both of which heighten the value
and appeal of quality tax-exempt income. On a state level, Governor Whit-
man has honored her election pledge to cut taxes and reduce spending. How-
ever, the state must still deal with a potential budget deficit of upwards
of one billion dollars and a recent court decision that the state -- and
taxpayers -- must find a way to more equally fund the state's school sys-
tem. Therefore, in spite of tax cuts, New Jersey municipal obligations
will continue to be of value to investors in high tax brackets.
We have maintained a high quality portfolio and believe that high grade
municipal obligations are increasingly attractive when compared to U.S.
Treasury securities and should outperform them on a relative basis going
forward. We believe we are well positioned to provide our investors with
high tax-exempt income at below average volatility and risk.
In mid-November of this year, the way Smith Barney mutual funds are listed
in the newspaper was changed to reflect our consolidated mutual fund fam-
ily. Before the consolidation, Smith Barney and Smith Barney Shearson mu-
tual funds were listed in the press under separate headings. Now, all
funds appear under the heading "Smith Barney." Your Smith Barney Financial
Consultant will be able to help you locate funds in your newspaper.
We appreciate your continued confidence and patience during this difficult
investment period. We look forward to reporting to you in the Fund's An-
nual Report.
Sincerely,
Heath B. McLendon
Chairman of the Board and Investment Officer
Lawrence T. McDermott
Vice Present and Investment Officer
November 21, 1994
PORTFOLIO HIGHLIGHTS (UNAUDITED)
SEPTEMBER 30, 1994
DESCRIPTION OF PIE CHARTS IN SHAREHOLDER REPORT
INDUSTRY BREAKDOWN
Pie chart depicting the allocation of the New Jersey Municipals Fund's in-
vestment securities held at September 30, 1994 by industry classification.
The pie is broken in pieces representing industries in the following per-
centages:
<TABLE>
<CAPTION>
INDUSTRY PERCENTAGE
<S> <C>
HOSPITAL 21.3%
UTILITY REVENUE 10.1%
GENERAL OBLIGATION 22.4%
SHORT-TERM MUNICIPAL BONDS AND NOTES AND NET OTHER ASSETS
AND LIABILITIES 0.1%
OTHER 18.0%
EDUCATION 11.9%
HOUSING 3.6%
TRANSPORTATION 3.7%
POLLUTION CONTROL REVENUE 8.9%
</TABLE>
SUMMARY OF MUNICIPAL BONDS AND SHORT-TERM
TAX-EXEMPT INVESTMENTS BY COMBINED RATINGS
<TABLE>
<CAPTION>
STANDARD & PERCENTAGE OF
MOODY'S POOR'S MARKET VALUE
<S> <C> <C>
Aaa OR AAA 60%
Aa AA 13
A A 10
Baa BBB 9
NR NR 8
100%
</TABLE>
AVERAGE MATURITY 21.0 years
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1994
KEY TO INSURANCE ABBREVIATIONS
AMBAC -- American Municipal Bond Assurance Corporation
BIGI -- Bond Investors Guaranty Insurance
FGIC -- Federal Guaranty Insurance Corporation
FHA -- Federal Housing Administration
FSA -- Federal Security Assurance
MBIA -- Municipal Bond Investors Assurance
<TABLE>
<CAPTION>
RATINGS
FACE VALUE MOODY'S S&P
(NOTE 1)
<S> <C> <C> <C>
<C>
MUNICIPAL BONDS AND NOTES -- 99.9%
NEW JERSEY -- 99.6%
$2,500,000 Atlantic County, New Jersey:
Certificates of Participation,
Public Facilities Lease Agree-
ment, (FGIC Insured),
7.400% due 3/1/2009 Aaa AAA
$ 2,815,625
375,000 Improvement Authority Revenue,
Luxury Tax Revenue Convention
Center, (MBIA Insured), 7.400%
due 7/1/2016 Aaa AAA
423,281
950,000 Utilities Authority Revenue,
Solid Waste Revenue,
7.125% due 3/1/2016 Baa NR
946,438
1,340,000 Bayonne, New Jersey, General Ob-
ligation Bonds, (FGIC Insured),
6.125% due 5/1/2014 Aaa AAA
1,316,550
700,000 Beachwood, New Jersey, Sewer Au-
thority Revenue, Junior Lien,
6.500% due 12/1/2012 Baa1 NR
706,125
665,000 Belvedere, New Jersey, General
Obligation Refunding Bonds,
(AMBAC Insured),
7.300% due 12/1/2014 Aaa AAA
720,694
1,000,000 Bordentown, New Jersey, Sewerage
Authority Revenue, Series C,
(MBIA Insured),
6.900% due 12/1/2016 Aaa AAA
1,070,000
1,000,000 Camden County, New Jersey, Im-
provement Authority Revenue, Se-
ries B, (AMBAC Insured),
5.250% due 12/1/2018 Aaa AAA
870,000
385,000 Cape May County, New Jersey,
Bridge Commission, County Guaran-
teed Revenue,
6.700% due 6/1/2002 A1 A
397,031
200,000 Delaware River Junction Toll
Bridge Commission, Refunding
Bonds, (FGIC Insured),
6.250% due 7/1/2012 Aaa AAA
203,500
500,000 Delaware River Port Authority,
Pennsylvania and New Jersey, Del-
aware River Bridge Revenue Re-
funding, (AMBAC Insured),
7.375% due 1/1/2007 Aaa AAA
540,000
550,000 Dover, New Jersey, Board of Edu-
cation, Certificates of Partici-
pation, (FGIC Insured),
6.600% due 6/1/2011 Aaa AAA
567,188
175,000 Essex County, New Jersey:
General Obligation Bonds, (FSA
Insured),
6.500% due 12/1/2011 Aaa AAA
178,938
2,500,000 Improvement Authority, (FGIC In-
sured),
5.200% due 12/1/2024 Aaa AAA
2,093,750
650,000 Improvement Authority, Newark,
Lease Revenue Bonds,
6.600% due 4/1/2014 Baa1 BBB+
632,938
750,000 Evesham Township, New Jersey,
Board of Education, Certificates
of Participation,
(FGIC Insured),
6.875% due 9/1/2011 Aaa AAA
790,313
Gloucester County, New Jersey:
500,000 Utilities Authority,
6.250% due 1/1/2024 A1 AA-
877,500
1,000,000 Utilities Authority, Sewerage
System, Series 91A,
6.500% due 1/1/2021 A1 AA-
1,003,750
500,000 Hoboken, New Jersey, Parking Au-
thority Revenue, (FGIC Insured),
6.000% due 6/1/2014 Aaa AAA
485,000
425,000 Hudson County, New Jersey:
Certificates of Participation,
Correctional Facilities, (MBIA
Insured),
6.600% due 12/1/2021 Aaa AAA
435,625
200,000 General Obligation Bonds, (FGIC
Insured),
6.550% due 7/1/2010 Aaa AAA
206,500
3,750,000 Improvement Authority, Solid
Waste System Revenue,
7.100% due 1/1/2020 NR BBB-
3,740,625
1,000,000 Improvement Authority, Solid
Waste System Revenue, Series A,
6.100% due 7/1/2020 NR A+
942,500
1,700,000 Jersey City, New Jersey:
Sewerage Authority, (AMBAC In-
sured),
6.250% due 1/1/2014 Aaa AAA
1,710,625
530,000 Water Utility, General Obligation
Bonds, (AMBAC Insured),
7.500% due 10/1/2003 Aaa AAA
573,063
1,500,000 Keansburg, New Jersey, Municipal
Utilities Authority Revenue,
(FGIC Insured),
6.000% due 12/1/2019 Aaa AAA
1,443,750
1,385,000 Kearney, New Jersey, Municipal
Utilities Authority Revenue,
(FGIC Insured),
7.300% due 11/15/2018 Aaa AAA
1,594,481
1,500,000 Lower Township, New Jersey, Mu-
nicipal Utilities Authority,
(MBIA Insured),
6.125% due 12/1/2013 Aaa AAA
1,485,000
1,000,000 Lumberton Township, New Jersey,
School District, Certificates of
Participation, (Fiscal Funding
New Jersey, Inc.), (MBIA In-
sured),
6.100% due 10/1/2013 Aaa AAA
987,500
200,000 Mercer County, New Jersey, Im-
provement Authority Revenue, Re-
funding Bonds, Solid Waste, Se-
ries A, (FGIC Insured),
6.700% due 4/1/2013 Aaa AAA
209,250
Middlesex County, New Jersey:
Pollution Control Authority Fi-
nancing Revenue,
(Amerada Hess):
1,000,000 7.875% due 6/1/2022+++ NR NR
1,048,750
2,000,000 6.875% due 12/1/2022 NR NR
2,017,500
Certificates of Participation,
(MBIA Insured),
500,000 6.125% due 2/15/2019 Aaa AAA
484,375
500,000 Monroe Township, New Jersey, Mu-
nicipal Utilities Authority,
Gloucester County Revenue, (AMBAC
Insured),
6.650% due 7/1/2011 Aaa AAA
518,750
Morris Township, New Jersey, Gen-
eral Obligation Notes:
550,000 6.550% due 7/1/2009 Aa AA
579,563
550,000 6.550% due 7/1/2010 Aa AA
578,188
500,000 6.550% due 7/1/2011 Aa AA
523,750
1,200,000 Morristown, New Jersey, Revenue
Refunding, General Obligation
Bonds,
6.500% due 2/1/2006 A1 A+
1,251,000
1,000,000 New Brunswick, New Jersey, Park-
ing Authority Revenue, City Guar-
anteed Parking, Series A,
6.500% due 9/1/2019 Aaa AAA
1,032,500
New Jersey, Economic Development
Authority:
1,000,000 Economic Development Revenue,
(Health Village Inc.),
7.800% due 5/1/2016 NR BBB
1,050,000
480,000 Economic Development Revenue,
(National Association of Accoun-
tants),
7.650% due 7/1/2009 NR NR
495,600
660,000 Economic Development Revenue, Se-
ries S, (Princeton Montessori So-
ciety),
6.500% due 6/1/2012 Aaa NR
655,050
1,000,000 Economic Development Revenue,
(Trane Division), (1990 Project),
9.500% due 9/1/2000 NR NR
1,110,000
1,500,000 Economic Development Revenue,
(Zirser-Greenbriar),
7.375% due 7/15/2003 NR NR
1,471,875
750,000 Electric Revenue, (Vineland Co-
generation L.P.),
7.875% due 6/1/2019 NR NR
787,500
1,250,000 Industrial Revenue, (Garden State
Paper Co.),
8.125% due 4/1/2022 Aa1 NR
1,276,563
2,005,000 Industrial Revenue, (Station
Plaza Park and Ride L.P.),
6.625% due 7/1/2003 NR NR
1,999,988
1,500,000 Miscellaneous Revenue, (State
Contract),
(FSA Insured),
6.000% due 3/15/2021 Aaa AAA
1,445,625
2,500,000 Natural Gas Facilities Revenue,
(NUI Corporation), Series A,
(AMBAC Insured),
6.350% due 10/1/2022 Aaa AAA
2,456,250
500,000 Nursing Home Revenue,
(Absecon Manor Project), (FHA In-
sured),
8.250% due 2/1/2028 NR AA+
526,250
1,500,000 Nursing Home Revenue, Series A,
(Franciscan Oaks),
8.500% due 10/1/2023 NR NR
1,548,750
1,000,000 Nursing Home Revenue,
(Morris Hall-St. Lawrence),
6.250% due 4/1/2025 NR A+
951,250
2,500,000 Nursing Home Revenue, (RWJ Health
Care Corporation), (FSA Insured),
6.500% due 7/1/2024 Aaa AAA
2,503,125
Nursing Home Revenue, (St Barna-
bas Realty Development Corporation),
(MBIA Insured):
2,000,000 5.250% due 7/1/2013 Aaa AAA
1,765,000
1,000,000 5.250% due 7/1/2020 Aaa AAA
852,500
4,500,000 Pollution Control Revenue, (Pub-
lic Service Electric & Gas Corpo-
ration), (MBIA Insured),
6.400% due 5/1/2032 Aaa AAA
4,353,750
1,500,000 Sewer Facilities Revenue, (Atlan-
tic City Sewer Company),
7.250% due 12/1/2011 NR A
1,608,750
1,500,000 Terminal Revenue, (GATX Terminal
Corporation), Series 1994,
7.300% due 9/1/2019+++ Baa1 A-
1,601,250
1,000,000 Waste Paper Recycling Revenue,
(Marcel Paper Mills Inc.
Project),
8.500% due 2/1/2010 NR NR
1,093,750
750,000 Water Revenue, Series D,
(Hackensack Water),
7.000% due 10/1/2017 NR A
780,938
New Jersey Health Care Facili-
ties, Financing Authority Reve-
nue:
250,000 (Atlantic City Medical Center),
Series B,
(FHA Insured),
8.375% due 8/1/2020 Aaa AAA
280,313
1,000,000 (Atlantic City Medical Center),
Series C,
6.800% due 7/1/2011 A A-
1,020,000
(Burdett Tomlin Memorial Hospi-
tal),
Series D, (FGIC Insured):
1,400,000 6.500% due 7/1/2012 Aaa AAA
1,429,750
850,000 6.500% due 7/1/2021 Aaa AAA
864,875
(Columbus Hospital), Series A:
1,350,000 7.200% due 7/1/2001 Baa1 BB-
1,203,000
1,000,000 7.500% due 7/1/2021 Baa1 BB-
993,750
1,500,000 (Community Medical Center), Se-
ries D,
(MBIA Insured),
6.000% due 7/1/2019 Aaa AAA
1,423,125
250,000 (Community Memorial Hospital As-
sociation),
Series C,
8.000% due 7/1/2014 A A-
266,875
1,550,000 (Deborah Heart & Lung Center),
6.300% due 7/1/2023 Baa1 BBB+
1,472,500
1,500,000 (Helene Fuld Medical Center), Se-
ries C,
8.125% due 7/1/2013 Aaa A
1,623,750
3,000,000 (Irvington General Hospital),
(FHA Insured),
6.375% due 8/1/2004 NR AAA
2,932,500
1,125,000 (J.F.K. Health System), Obligated
Group,
(FGIC Insured),
6.700% due 7/1/2021 Aaa AAA
1,174,219
(Jersey Shore Medical Center),
Series B,
(AMBAC Insured):
475,000 8.000% due 7/1/2018 Aaa AAA
531,406
1,250,000 6.250% due 7/1/2021 Aaa AAA
1,218,750
260,000 (Kennedy Memorial University Med-
ical Center), Series D,
7.875% due 7/1/2009 A A-
276,250
435,000 (Kimball Medical Center),
Series C,
8.000% due 7/1/1998 Baa BBB-
452,944
830,000 (Medical Center of Ocean County),
Series C, (FSA Insured),
6.750% due 7/1/2020 Aaa AAA
868,388
(Newark Beth Israel Medical Cen-
ter),
(FSA Insured):
200,000 6.000% due 7/1/2016 Aaa AAA
191,000
2,950,000 6.000% due 7/1/2024 Aaa AAA
2,784,063
600,000 (Newcomb Medical Center),
Series A,
7.875% due 7/1/2003 Baa BBB+
644,250
2,000,000 (Ocean County Hospital),
6.250% due 7/1/2023 Baa NR
1,882,500
1,000,000 (Overlook Hospital Association),
Series E,
(FGIC Insured),
6.700% due 7/1/2017 Aaa AAA
1,052,500
1,000,000 (Raritan Bay Medical Center),
7.250% due 7/1/2027 NR NR
948,750
(Riverview Medical Center),
(AMBAC Insured), Series A:
1,000,000 5.500% due 7/1/2013 Aaa AAA
905,000
1,000,000 5.500% due 7/1/2018 Aaa AAA
887,500
825,000 8.000% due 7/1/2018 Aaa AAA
911,625
1,250,000 (St. Elizabeth's Hospital
Project), Series B,
8.250% due 7/1/2020 Baa BBB
1,337,500
1,750,000 (St. Mary Hospital),
5.875% due 7/1/2012 Baa BBB-
1,577,188
825,000 (Spectrum for Living),
6.500% due 2/1/2022 NR AAA
817,780
1,250,000 (Wayne General Hospital), (FHA
Insured),
5.750% due 8/1/2011 NR AAA
1,160,937
New Jersey Sports and Expo Au-
thority,
Series A, State Contract:
1,250,000 6.250% due 7/1/2020, (MBIA In-
sured) Aaa AAA
1,221,875
2,900,000 6.000% due 3/1/2021 Aa A+
2,751,375
2,500,000 New Jersey State, Certificates of
Participation, Equipment Leasing
Revenue, Series A,
6.400% due 4/1/2005 A1 A+
2,534,375
2,500,000 New Jersey State, Series D,
8.000% due 2/15/2007++++ Aa1 AA+
2,937,500
New Jersey State Educational Fa-
cilities, Financing Authority
Revenue, Higher Education:
1,335,000 (Drew University), Series B,
7.450% due 2/1/2005 NR A
1,426,780
2,700,000 (Fairleigh Dickinson University),
Series C,
6.625% due 7/1/2023 NR NR
2,460,375
1,500,000 (Trenton State College),
Series E,
(AMBAC Insured),
6.000% due 7/1/2019 Aaa AAA
1,438,125
3,500,000 (New Jersey Institute of Technol-
ogy), (MBIA Insured),
6.000% due 7/1/2015 Aaa AAA
3,386,250
2,500,000 New Jersey State Higher Education
Assistance,
5.300% due 7/1/2010 NR A+
2,215,625
New Jersey State Housing & Mort-
gage Finance Agency:
Multifamily Housing Revenue;
1,550,000 (Presidential Plaza-FHA),
Series 1,
7.000% due 5/1/2030 NR AAA
1,594,562
1,000,000 (Regency Park Project), Series H,
7.700% due 11/1/2030 NR AA
1,040,000
Home Mortgage Revenue
(MBIA Insured):
740,000 Series B,
8.100% due 10/1/2017 Aaa AAA
788,100
30,000 Series C,
8.375% due 4/1/2017 Aaa AAA
32,212
410,000 Series D,
7.700% due 10/1/2029 Aaa AAA
427,937
3,000,000 New Jersey State Transportation
Trust Fund, (FSA Insured),
4.750% due 6/15/2003 Aaa AAA
2,805,000
2,000,000 New Jersey State Turnpike, Trans-
portation Revenue Bonds, (MBIA
Insured),
6.500% due 1/1/2016 Aaa AAA
2,047,500
1,500,000 North Bergen, New Jersey:
Township Capital Appreciation,
(FSA Insured),
8.000% due 8/15/2007 Aaa AAA
1,777,500
1,960,000 Township, Municipal Utilities Au-
thority, Sewer Revenue, (FGIC In-
sured),
7.875% due 12/15/2009 Aaa AAA
2,290,750
North Jersey District Water Sup-
ply Commission, New Jersey Re-
funding, (Wanaque North Project),
Series A, (MBIA Insured):
2,500,000 6.000% due 7/1/2021 Aaa AAA
2,393,750
1,195,000 6.500% due 11/15/2021 Aaa AAA
1,221,887
Old Bridge Township, New Jersey:
General Obligation Bonds, (FGIC
Insured):
560,000 6.550% due 7/15/2010 Aaa AAA
575,400
720,000 6.550% due 7/15/2011 Aaa AAA
739,800
750,000 Municipal Utililities Authority
Revenue,
(FGIC Insured),
6.400% due 11/1/2009 Aaa AAA
768,750
Passaic Valley, New Jersey, Sewer
Commission Revenue, Water Supply
Revenue, Series A, (FGIC Insured):
2,000,000 5.000% due 12/15/2022 Aaa AAA
1,872,500
100,000 6.400% due 12/15/2022 Aaa AAA
99,875
500,000 Perth Amboy, New Jersey:
Board of Education, Certificates
of Participation, (FSA Insured),
6.125% due 12/15/2017 Aaa AAA
491,875
1,600,000 Refunding Bonds, Series A, (FSA
Insured),
5.300% due 9/1/2011 Aaa AAA
1,446,000
1,750,000 Piscataway Township, New Jersey
School District, (FHA Insured),
5.375% due 12/15/2010 Aaa AAA
1,581,562
1,750,000 Pleasantville, New Jersey, School
District, Certificates of Partic-
ipation, Fiscal Funding New Jer-
sey, Inc., (BIGI Insured),
7.700% due 10/1/2013 Aaa AAA
1,918,438
Rutgers State University, New
Jersey, University of New Jersey:
1,000,000 Series A,
6.500% due 5/1/2018 A1 AA
1,003,750
750,000 Series P,
6.850% due 5/1/2021 A1 AA
774,375
Sayreville, New Jersey, Housing
745,000 Development Corporation, Mortgage
Revenue, FHA Refunding,
(Lakeview-Section 8),
7.750% due 8/1/2024 NR AAA
772,005
1,500,000 Scotch Plains Township, New Jer-
sey, Senior Citizen Housing Cor-
poration, Revenue Bonds,
5.750% due 9/1/2023 Aa NR
1,410,000
2,500,000 Somerset Raritan Valley, New Jer-
sey, Sewer Authority Revenue, Se-
ries G,
6.750% due 7/1/2010 A1 AA
2,646,875
500,000 South Amboy, New Jersey, General
Obligation Bonds, (MBIA Insured),
6.375% due 12/1/2010 Aaa AAA
505,625
750,000 South Monmouth, New Jersey, Re-
gional Sewer Authority, (MBIA In-
sured),
6.000% due 1/15/2014 Aaa AAA
735,937
1,000,000 Southeast Morris County, New Jer-
sey, Municipal Utilities Author-
ity, Water Revenue, Series A,
(FGIC Insured),
6.500% due 1/1/2011 Aaa AAA
1,023,750
1,500,000 Stafford, New Jersey, Municipal
Utilities Authority, Sewer and
Water Revenue,
(FGIC Insured),
6.125% due 12/1/2022 Aaa AAA
1,475,625
1,350,000 Tinton Falls, New Jersey, School
Board of Education, Certificates
of Participation,
(FSA Insured),
6.500% due 6/15/2017 Aaa AAA
1,299,375
750,000 Trenton, New Jersey, General Ob-
ligation Bonds, (MBIA Insured),
6.550% due 8/15/2009 Aaa AAA
767,812
900,000 Union City, New Jersey, General
Obligation Bonds, (MBIA Insured),
6.700% due 9/1/2012 Aaa AAA
947,250
1,000,000 Union County, New Jersey, Im-
provement Authority Revenue,
(Cranford Township Project),
7.750% due 5/1/2003 A1 A+
1,087,500
1,140,000 University of New Jersey, School
of Medicine and Dentistry, Series
C,
7.200% due 12/1/2019 A AA
1,211,250
1,400,000 Warren Hills, New Jersey, Re-
gional School District, (FSA In-
sured),
5.250% due 12/15/2009 Aaa AAA
1,272,250
854,000 Weehawken Township, New Jersey,
General Obligation Bonds, (FSA
Insured),
6.350% due 7/1/2007 Aaa AAA
878,553
1,000,000 West New York, New Jersey, Gen-
eral Obligation Bonds, (AMBAC In-
sured),
6.450% due 7/15/2006 Aaa AAA
1,032,500
West Windsor, Plainsboro, New
Jersey, Regional School District:
180,000 6.750% due 4/1/2006 A1 AA
193,950
490,000 6.750% due 4/1/2007 A1 AA
526,137
435,000 6.800% due 4/1/2008 A1 AA
466,537
170,000 6.800% due 4/1/2009 A1 AA
183,175
1,030,000 Winslow Township, New Jersey, Re-
funding Bonds, General Obligation
Bonds, (FGIC Insured),
6.400% due 10/1/2010 Aaa AAA
1,039,013
169,007,590
PUERTO RICO -- 0.3%
495,000 Commonwealth of Puerto Rico,
8.000% due 7/1/2008 Baa1 A
546,975
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $169,808,774)
169,554,565
SHORT-TERM MUNICIPAL BOND AND NOTES -- 0.5%
NEW JERSEY -- 0.4%
615,000 New Jersey Economic Development
Authority, Industrial and Eco-
nomic Development Revenue, (Mak-
ita USA Inc. Project),
3.550% due 8/1/1995++ NR A+
615,000
100,000 Port Authority New York and New
Jersey, Special Obligation Bonds,
3.650% due 8/1/2028+ VMIG-1 A1+
100,000
PUERTO RICO -- 0.1%
100,000 Commonwealth of Puerto Rico, Gov-
ernment Development Bank,
3.550% due 12/1/2015++ VMIG-1 A1+
100,000
TOTAL SHORT-TERM MUNICIPAL BOND
AND NOTES (Cost $815,000)
815,000
TOTAL INVESTMENTS (Cost $170,623,774*) 100.4%
170,369,565
OTHER ASSETS AND LIABILITIES (NET) (0.4)
(654,271)
NET ASSETS 100.0%
$169,715,294
<FN>
* Aggregate cost for Federal tax purposes.
+ Variable rate demand notes payable upon not more than one business
days' notice.
++ Variable rate demand notes payable upon not more than seven business
days' notice.
+++ When-issued security (Note 1).
++++ Collateral with a face value of $1,000,000 held for when-issued secu-
rity.
</TABLE>
See Notes to Financial Statements
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
SEPTEMBER 30, 1994
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost $170,623,774) (Note
1)
See accompanying schedule
$170,369,565
Cash
48,159
Interest receivable
3,075,145
Receivable for investment securities sold
318,542
TOTAL ASSETS
173,811,411
LIABILITIES:
Payable for investment securities purchased $3,507,328
Dividends payable 275,103
Payable for Fund shares redeemed 147,398
Investment advisory fee payable (Note 2) 49,183
Administration fee payable (Note 2) 28,104
Distribution fee payable (Note 3) 21,854
Service fee payable (Note 3) 21,078
Custodian fees payable (Note 2) 8,000
Transfer agent fees payable (Note 2) 6,060
Accrued expenses and other payables 32,009
TOTAL LIABILITIES
4,096,117
NET ASSETS
$169,715,294
NET ASSETS CONSIST OF:
Distributions in excess of net investment income
$(110,070)
Accumulated net realized loss on investments sold
(1,962,003)
Unrealized depreciation of investments
(254,209)
Par value
13,700
Paid-in capital in excess of par value
172,027,876
TOTAL NET ASSETS
$169,715,294
NET ASSET VALUE:
CLASS A SHARES
NET ASSET VALUE and redemption price per share
($116,937,775 / 9,439,467 shares of common stock
outstanding)
$12.39
Maximum offering price per share ($12.39 / 0.955)
(based on sales charge of 4.5% of the offering
price on September 30, 1994)
$12.97
CLASS B SHARES
NET ASSET VALUE and offering price per share+
($52,777,519 / 4,260,764 shares of common stock
outstanding)
$12.39
<FN>
+ Redemption price per share is equal to Net Asset Value less any applica-
ble contingent deferred sales charge.
</TABLE>
See Notes to Financial Statements
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1994
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest
$5,406,664
EXPENSES:
Investment advisory fee (Note 2) $299,306
Administration fee (Note 2) 171,032
Distribution fee (Note 3) 129,690
Service fee (Note 3) 128,277
Transfer agent fees (Notes 2 and 4) 36,864
Legal and audit fees 35,433
Custodian fees (Note 2) 22,699
Directors' fees and expenses (Note 2) 8,813
Other 45,467
TOTAL EXPENSES
877,581
NET INVESTMENT INCOME
4,529,083
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(NOTES 1 AND 5):
Net realized loss on investments sold during the
period
(1,991,223)
Net unrealized depreciation of investments during
the period
(276,871)
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(2,268,094)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$2,260,989
</TABLE>
See Notes to Financial Statements
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
YEAR
ENDED
ENDED
9/30/94
3/31/94
(UNAUDITED)
<S> <C> <C>
Net investment income $4,529,083 $
8,076,673
Net realized gain/(loss) on investments sold
during the period (1,991,223)
1,474,192
Net unrealized depreciation of investments dur-
ing the period (276,871)
(8,942,109)
Net increase in net assets resulting from opera-
tions 2,260,989
608,756
Distributions to shareholders from net invest-
ment income:
Class A (3,243,407)
(6,377,318)
Class B (1,264,454)
(1,613,063)
Distribution to shareholders in excess of net
investment income:
Class A --
(68,872)
Class B --
(17,420)
Distribution to shareholders from net realized
gain on investments:
Class A --
(1,446,042)
Class B --
(490,715)
Distribution to shareholders from capital:
Class A --
(35,156)
Class B --
(9,844)
Net increase/(decrease) in net assets from capi-
tal share transactions (Note 6):
Class A (1,438,941)
10,438,364
Class B 5,113,313
35,313,040
Net increase in net assets 1,427,500
36,301,730
NET ASSETS:
Beginning of period 168,287,794
131,986,064
End of period (including distributions in excess
of net investment income of $110,070 and
$131,292, respectively) $169,715,294
$168,287,794
</TABLE>
See Notes to Financial Statements
FINANCIAL HIGHLIGHTS
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS YEAR YEAR
YEAR
ENDED ENDED ENDED
ENDED
9/30/94 3/31/94 3/31/93
3/31/92
(UNAUDITED)
<S> <C> <C> <C>
<C>
Operating performance:
Net asset value, beginning of period $12.55 $13.16 $12.44
$12.17
Income from investment operations:
Net investment income*** 0.34 0.70 0.75
0.77
Net realized and unrealized gain-
/(loss) on investments (0.16) (0.46) 0.87
0.44
Total from investment operations 0.18 0.24 1.62
1.21
Less Distributions:
Distributions from net investment in-
come (0.34) (0.69)
(0.75) (0.77)
Distributions in excess of net invest-
ment income -- (0.01) --
- --
Distributions from net realized gains -- (0.15)
(0.14) (0.13)
Distributions from capital -- (0.00)#
(0.01) (0.04)
Total distributions (0.34) (0.85)
(0.90) (0.94)
Net asset value, end of period $12.39 $12.55 $13.16
$12.44
Total return+++ 1.44% 1.66%
13.49% 10.22%
Ratios/supplemental data:
Net assets, end of period (in 000's) $116,938 $119,913 $115,694
$92,797
Ratio of operating expenses to average
net assets+ 0.87%** 0.83%
0.74% 0.67%++
Ratio of net investment income to av-
erage net assets 5.45%** 5.17%
5.76% 6.18%
Portfolio turnover rate 21% 32%
58% 98%
<FN>
** Annualized.
*** Net investment income before waiver of fees and/or reimbursement of
expenses by investment adviser, sub-investment adviser and administra-
tor for the years ended March 31, 1994, 1993, 1992, 1991, 1990, and
1989 would have been $.69, $.73, $.75, $.78, $.77, and $.74,
respectively.
# Amount represents less than $0.01 per Class A share.
+ Expense ratios before partial waiver of fees by investment adviser,
sub-investment adviser and administrator for the years ended March 31,
1994, 1993, 1992, 1991, and 1990 and before the partial waiver of fees
and reimbursement of expenses by investment adviser, sub-investment
adviser and administrator for the period ended March 31,1989 were
0.88%, 0.90%, 0.83%, 1.08% and 1.23%, respectively.
++ The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense was 0.68% for the year ended
March 31,1992.
+++ Total return represents aggregate total return for the periods indi-
cated and does not reflect any applicable sales charges.
</TABLE>
See Notes to Financial Statements
FINANCIAL HIGHLIGHTS (continued)
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
YEAR YEAR
PERIOD
ENDED ENDED
ENDED
3/31/91 3/31/90
3/31/89*
<S> <C> <C> <C>
Operating performance:
Net asset value, beginning of period $11.92 $11.67
$11.40
Income from investment operations:
Net investment income*** 0.82 0.83
0.82
Net realized and unrealized gain/(loss) on
investments 0.32 0.27
0.28
Total from investment operations 1.14 1.10
1.10
Less Distributions:
Distributions from net investment income (0.83) (0.82)
(0.82)
Distributions in excess of net investment
income -- --
- --
Distributions from net realized gains (0.05) (0.03)
(0.01)
Distributions from capital (0.01) --
- --
Total distributions (0.89) (0.85)
(0.83)
Net asset value, end of period $12.17 $11.92
$11.67
Total return+++ 9.89% 9.62%
9.84%
Ratios/supplemental data:
Net assets, end of period (in 000's) $65,378 $38,728
$29,265
Ratio of operating expenses to average net
assets+ 0.57% 0.55%
0.52%**
Ratio of net investment income to average
net assets 6.74% 6.89%
7.23%**
Portfolio turnover rate 44% 42%
25%
<FN>
* The Fund commenced operations on April 22, 1988. Those shares in ex-
istence prior to November 6, 1992, were designated as Class A shares.
** Annualized.
*** Net investment income before waiver of fees and/or reimbursement of
expenses by investment adviser, sub-investment adviser and administra-
tor for the years ended March 31, 1994, 1993, 1992, 1991, 1990, and
1989 would have been $.69, $.73, $.75, $.78, $.77, and $.74,
respectively.
+ Expense ratios before partial waiver of fees by investment adviser,
sub-investment adviser and administrator for the years ended March 31,
1994, 1993, 1992, 1991, and 1990 and before the partial waiver of fees
and reimbursement of expenses by investment adviser, sub-investment
adviser and administrator for the period ended March 31,1989 were
0.88%, 0.90%, 0.83%, 1.08% and 1.23%, respectively.
+++ Total return represents aggregate total return for the periods indi-
cated and does not reflect any applicable sales charges.
</TABLE>
See Notes to Financial Statements
FINANCIAL HIGHLIGHTS
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS YEAR
PERIOD
ENDED ENDED
ENDED
9/30/94 3/31/94
3/31/93*
(UNAUDITED)
<S> <C> <C>
<C>
Operating performance:
Net asset value, beginning of period $12.55 $13.16
$12.75
Income from investment operations:
Net investment income*** 0.32 0.64
0.28
Net realized and unrealized gain/(loss) on
investments (0.17) (0.47)
0.55
Total from investment operations 0.15 0.17
0.83
Less Distributions:
Distributions from net investment income (0.31) (0.62)
(0.27)
Distributions in excess of net investment
income -- (0.01)
- --
Distributions from net realized gains -- (0.15)
(0.14)
Distributions from capital -- (0.00)+++
(0.01)
Total distributions (0.31) (0.78)
(0.42)
Net asset value, end of period $12.39 $12.55
$13.16
Total return++ 1.16% 1.15%
6.60%
Ratios/supplemental data:
Net assets, end of period (in 000's) $52,778 $48,375
$16,293
Ratio of operating expenses to average net
assets+ 1.39%** 1.36%
1.33%**
Ratio of net investment income to average
net assets 4.94%** 4.64%
5.17%**
Portfolio turnover rate 21% 32%
58%
<FN>
* The Fund commenced selling Class B shares on November 6, 1992.
** Annualized
.
*** Net investment income before waiver of fees and/or reimbursement of
expenses by investment
adviser, sub-investment adviser and/or administrator for the years
ended March 31, 1994 and 1993 would have been $.63 and $.27,
respectively.
+ Annualized expense ratio before partial waivers of fees by investment
adviser, sub-investment adviser and administrator for the years ended
March 31, 1994 and 1993 were 1.41% and 1.49%, respectively.
++ Total return represents aggregate total return for the periods indi-
cated and does not reflect any
applicable sales charges.
+++ Amount represents less than $0.01 per Class B share.
</TABLE>
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney New Jersey Municipals Fund Inc. (the "Fund") (formerly Smith
Barney Shearson New Jersey Municipals Fund Inc.) was incorporated under
the laws of the State of Maryland on November 12, 1987. The Fund is a non-
diversified, open-end management investment company registered with the
Securities and Exchange Commission under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund commenced operations on April
22, 1988. As of November 6, 1992, the Fund began offering two classes of
shares to the general public: Class A shares and Class B shares. Class A
shares are sold with a front-end sales charge. Class B shares may be sub-
ject to a contingent deferred sales charge ("CDSC"). Class B shares will
automatically convert to Class A shares eight years after the original
purchase date. Each class of shares has identical rights and privileges
except with respect to the effect of the respective sales charges, the
distribution and/or service fees borne by each class, expenses allocable
exclusively to each class, voting rights on matters affecting a single
class, the exchange privilege of each class and the conversion feature of
Class B shares. The following is a summary of significant accounting poli-
cies consistently followed by the Fund in the preparation of its financial
statements.
Portfolio valuation: Securities are valued at the close of regular trading
on the New York Stock Exchange by The Boston Company Advisors, Inc. ("Bos-
ton Advisors") after consultation with an independent pricing service (the
"Service") approved by the Board of Directors. When, in the judgment of
the Service, quoted bid prices for investments are readily available and
are representative of the bid side of the market, these investments are
valued at the mean between the quoted bid prices and asked prices (as ob-
tained by the Service from dealers in such securities). Securities for
which, in the judgment of the Service, there are no readily available mar-
ket quotations (which may constitute a majority of the portfolio securi-
ties) are carried at fair value as determined by the Service, based on
methods which include consideration of: yields or prices of municipal se-
curities of comparable quality, coupon, maturity and type; indications as
to values from dealers; and general market conditions. Short-term invest-
ments that mature in 60 days or less are valued at amortized cost whenever
the Board of Directors determines that amortized cost reflects the fair
value of those investments.
Securities transactions and investment income: Securities transactions are
recorded as of the trade date. Realized gains and losses from securities
sold are recorded on the identified cost basis. Investment income and re-
alized and unrealized gains and losses are allocated based upon relative
net assets of each class. Interest income is recorded on the accrual
basis.
Securities purchased or sold on a when-issued or delayed-delivery basis
may be settled a month or more after the trade date; interest income is
not accrued until settlement date. When required, the Fund instructs the
custodian to segregate assets in a separate account with a current value
at least equal to the amount of its when-issued purchase commitments.
Dividends and distributions to shareholders: Dividends from net investment
income determined on a class level, if any, of the Fund are declared daily
and paid on the last business day of the Smith Barney Inc. ("Smith Bar-
ney") statement month. Distributions determined on a fund level, if any,
of any net short- and long-term capital gains earned by the Fund will be
declared and paid annually after the close of the fiscal year in which
they are earned. Additional distributions of net investment income and
capital gains for the Fund may be made at the discretion of the Board of
Directors in order to avoid the application of a 4% nondeductible excise
tax on certain undistributed amounts of net investment income and capital
gains. To the extent net realized capital gains can be offset by capital
losses and loss carryforwards, it is the policy of the Fund not to dis-
tribute such gains.
Federal income taxes: The Fund intends to qualify as a regulated invest-
ment company, if such qualification is in the best interests of its share-
holders, by complying with the requirements of the Internal Revenue Code
of 1986, as amended, applicable to regulated investment companies and by
distributing substantially all of its earnings to its shareholders. There-
fore, no Federal income tax provision is required.
2. INVESTMENT ADVISORY AGREEMENT, ADMINISTRATION AGREEMENT AND OTHER
TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advi-
sory Agreement") with a division of Mutual Management Corp., which has
been transferred effective November 7, 1994 to Smith Barney Mutual
Funds Management Inc. ("SBMFM"). Mutual Management Corp. and SBMFM are
both wholly owned subsidiaries of Smith Barney Holdings Inc. ("Hold-
ings"). Holdings is a wholly owned subsidiary of The Travelers Inc.
Under the Advisory Agreement, the Fund pays SBMFM a monthly fee at the
annual rate of 0.35% of the value of its average daily net assets up
to $500 million and 0.32% of the value of its average daily net assets
thereafter.
Prior to April 20, 1994, the Fund was party to an administration agreement
with Boston Advisors, an indirect wholly owned subsidiary of Mellon Bank
Corporation ("Mellon"). Under this agreement, the Fund paid a monthly fee
at the annual rate of 0.20% of the value of its average daily net assets
up to $500 million and 0.18% average daily net assets thereafter for its
services.
As of the close of business on April 20, 1994, SBMFM (formerly known as
Smith, Barney Advisers, Inc.), succeeded Boston Advisors as the Fund's ad-
ministrator. The new administration agreement contains substantially the
same terms and conditions, including the level of fees, as the predecessor
agreement.
As of the close of business on April 20, 1994, the Fund and SBMFM entered
into a sub-administration agreement (the "Sub-Administration Agreement")
with Boston Advisors. Under the Sub-Administration Agreement, SBMFM pays
Boston Advisors a portion of its administration fee at a rate agreed upon
from time to time between SBMFM and Boston Advisors.
For the six months ended September 30, 1994, Smith Barney received from
investors $153,199 representing commissions (sales charges) on sales of
Class A shares.
A CDSC is generally payable by a shareholder in connection with the re-
demption of Class B shares within five years after the date of purchase.
In circumstances in which the CDSC is imposed, the amount of the charge
ranges between 4.5% and 1.0% of net asset value depending on the number of
years since the date of purchase. For the six months ended September 30,
1994, Smith Barney received from shareholders $76,664 in contingent de-
ferred sales charges on the redemption of Class B shares.
No officer, director or employee of Smith Barney or any of its affiliates
receives any compensation from the Fund for serving as a Director or of-
ficer of the Fund. The Fund pays each Director who is not an officer, di-
rector, or employee of Smith Barney or any of its affiliates $1,000 per
annum plus $100 per meeting attended and reimburses each such Director for
travel and out-of-pocket expenses.
Boston Safe Deposit and Trust Company, an indirect wholly owned subsidiary
of Mellon, serves as the Fund's custodian. The Shareholder Services Group,
Inc., a subsidiary of First Data Corporation, serves as the Fund's trans-
fer agent.
3. DISTRIBUTION PLAN
Smith Barney acts as distributor of the Fund's shares pursuant to a dis-
tribution agreement with the Fund, and sells shares of the Fund through
Smith Barney or its affiliates.
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a service
and distribution plan (the "Plan"). Under this Plan, the Fund compensates
Smith Barney for servicing shareholder accounts for Class A and Class B
shareholders, and covers expenses incurred in distributing Class B shares.
Smith Barney is paid an annual service fee with respect to Class A and
Class B shares of the Fund at the rate of 0.15% of the value of the aver-
age daily net assets of each respective class of shares. Smith Barney is
also paid an annual distribution fee with respect to Class B shares at the
rate of .50% of the value of the average daily net assets attributable to
those shares. For the six months ended September 30, 1994, the Fund in-
curred $89,370 and $38,907 in service fees for Class A and Class B shares,
respectively. For the six months ended September 30, 1994, the Fund in-
curred $129,690 in distribution fees for Class B shares.
4. EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any
class of shares are prorated among the classes based upon the relative net
assets of each class. Operating expenses directly attributable to a class
of shares are charged to that class' operations. In addition to the above
servicing and distribution fees, class specific operating expenses include
transfer agent fees. For the six months ended September 30, 1994, the Fund
paid transfer agent fees of $22,511 and $14,353 for Class A and Class B
shares, respectively.
5. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of investment securities, ex-
cluding short-term investments, for the six months ended September 30,
1994, amounted to $40,882,201 and $34,867,682, respectively.
At September 30, 1994, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost amounted to
$3,784,484, and the aggregate gross unrealized depreciation for all secu-
rities in which there was an excess of tax cost over value amounted to
$4,038,693.
6. COMMON STOCK
At September 30, 1994, 100 million shares of $.001 par value common stock
were authorized. Changes in shares of common stock outstanding for the
Fund which are divided into two classes, Class A and Class B, were as fol-
lows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR
ENDED
9/30/94 3/31/94
CLASS A SHARES: Shares Amount Shares
Amount
<S> <C> <C> <C> <C>
Sold 472,855 $5,950,814 1,647,480
$22,242,307
Issued as reinvestment of
dividends 166,682 2,096,216 392,313
5,278,384
Redeemed (753,960) (9,485,971) (1,274,430)
(17,082,327)
Net increase/(decrease) (114,423) $(1,438,941) 765,363
$10,438,364
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
9/30/94 3/31/94
CLASS B SHARES: Shares Amount Shares
Amount
<S> <C> <C> <C> <C>
Sold 588,502 $7,406,222 2,659,770
$35,847,840
Issued as reinvestment of
dividends 71,166 894,915 114,141
1,536,557
Redeemed (254,101) (3,187,824) (156,456)
(2,071,357)
Net increase 405,567 $5,113,313 2,617,455
$35,313,040
<FN>
* The Fund commenced selling Class B shares on November 6, 1992. Any
shares outstanding prior to November 6, 1992 were designated as Class A
shares.
</TABLE>
7. CONCENTRATION OF CREDIT
The Fund primarily invests in debt obligations issued by the State of New
Jersey and 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 New Jersey municipal securities
than is a municipal bond fund that is not concentrated in these issuers to
the same extent.
8. LINE OF CREDIT
The Fund and several affiliated entities participate in a $50 million line
of credit provided by Continental Bank N.A. under an Amended and Restated
Line of Credit Agreement (the "Agreement") dated April 30, 1992 and re-
newed effective May 31, 1994, primarily for temporary or emergency pur-
poses, including the meeting of redemption requests that otherwise might
require the untimely disposition of securities. The Fund may borrow up to
the lesser of $25 million or 10% of its net assets. Interest is payable
either at the bank's Money Market Rate or the London Interbank Offered
Rate (LIBOR) plus .375% on an annualized basis. Under the terms of the
Agreement, as amended, the Fund and the other affiliated entities are
charged an aggregate commitment fee of $100,000 which is allocated equally
among each of the participants. The Agreement requires, among other provi-
sions, each participating fund to maintain a ratio of net assets (not in-
cluding funds borrowed pursuant to the Agreement) to aggregate amount of
indebtedness pursuant to the Agreement of no less than 5 to 1. At Septem-
ber 30, 1994, the Fund had no outstanding borrowings under this Agreement.
9. SUBSEQUENT EVENT
On July 20, 1994, the Board of Directors of the Fund approved several
changes to the class and pricing structure of Smith Barney Shearson Mutual
Funds to facilitate consolidation of that fund complex with the Smith Bar-
ney Mutual Fund Complex (the "Uniform Structure"). Under the Uniform
Structure, effective November 7, 1994, shares previously designated as
Class A or Class B shares will retain those designations. In addition, the
Fund will offer newly designated Class Y shares, without imposition of a
sales charge, to investors making an initial investment of at least $5
million. Adoption of the Uniform Structure will have no effect on the
rights and privileges of the Fund's current shareholders.
PARTICIPANTS
DISTRIBUTOR
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
INVESTMENT ADVISER
AND ADMINISTRATOR
Smith Barney Mutual Funds
Management Inc.
388 Greenwich Street
New York, New York 10013
SUB-ADMINISTRATOR
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
AUDITORS AND COUNSEL
Coopers & Lybrand
One Post Office Square
Boston, Massachusetts 02109
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
TRANSFER AGENT
The Shareholder Services
Group, Inc.
Exchange Place
Boston, Massachusetts 02109
CUSTODIAN
Boston Safe Deposit
and Trust Company
One Boston Place
Boston, Massachusetts 02108
NEW JERSEY
MUNICIPALS
FUND INC.
DIRECTORS
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
James J. Crisona
Burt N. Dorsett
Robert A. Frankel
Dr. Paul Hardin
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon
Cornelius C. Rose, Jr.
OFFICERS
Heath B. McLendon
Chairman of the Board
and Investment Officer
Stephen J. Treadway
President
Richard P. Roelofs
Executive Vice President
Lawrence T. McDermott
Vice President and
Investment Officer
Karen L. Mahoney-Malcomson
Investment Officer
Lewis E. Daidone
Treasurer
Christina T. Sydor
Secretary
This report is submitted for the general information of the shareholders
of Smith Barney New Jersey Municipals Fund Inc. It is not authorized for
distribution to prospective investors unless accompanied or preceded by an
effective Prospectus for the Fund, which contains information concerning
the Fund's investment policies, fees and expenses as well as other perti-
nent information.
[LOGO]
SMITH BARNEY
MUTUAL FUND
388 Greenwich Street
New York, New York 10013
Fund 66,206
FD0450 K4
