<PAGE>
S E M I - A N N U A L R E P O R T
SMITH BARNEY
NEW JERSEY
MUNICIPALS
FUND INC.
- ---------------------------------
September 30, 1995
[LOGO] Smith Barney Mutual Funds
INVESTING FOR YOUR FUTURE.
EVERY DAY.
<PAGE>
Smith Barney New Jersey Municipals Fund Inc.
Dear Shareholder:
We are pleased to provide you with the semi-annual report which includes the
schedule of investments for Smith Barney New Jersey Municipals Fund Inc. for the
six-month period ended September 30, 1995. For your convenience, we have
summarized the period's prevailing economic and market conditions below and
outlined our portfolio strategy during this time. The total return for the six-
month period for the Smith Barney New Jersey Municipals Fund Inc. was 5.08%
(Class A Shares). The Fund's one-year total return for the period ending
September 30, 1995 was 10.18% (Class A Shares). These total return figures
compare favorably with the six-month 4.43% and one-year 9.61% average annual
total returns for all New Jersey municipal bond funds tracked by Lipper
Analytical Services. A more detailed summary of performance during this and
previous fiscal periods can be found in the "Financial Highlights" section of
this report.
Market & Economic Overview
Over the past six months, the fixed-income markets have been characterized by
generally lower interest rates, as measured by the decline of 30-Year Treasuries
from 7.43% on March 31st to 6.50% on September 30th, a drop of nearly 100 basis
points. Long-term municipal bond yields, however, barely budged over the time
period, starting out on March 30th at 6.29% as represented by the Bond Buyer's
25-Year Revenue Bond Index and finishing at 6.27% on September 28th. This is due
primarily to tax reform concerns.
Although some analysts have been forecasting a slight pick-up in economic
activity during the final quarter of 1995, it now appears that the Federal
Reserve Board has been successful in controlling inflation and encouraging a
sustainable and slower rate of economic growth this year. The Board declined to
alter the federal funds rate in September, leaving it unchanged at 5 3/4%, a
move that reflected its confidence in the current rate of economic growth.
However, while the economy did pick up steam compared to the sluggish first
quarter of 1995, it has yet to make up its mind for the year and conflicting
indicators all point to continued uncertainty going into 1996. Consumer spending
is rising at an annual pact of 2.5% to 3%, a relatively neutral rate further
tempered by recent indications that consumer households are growing more
cautious.
1
<PAGE>
A number of other economic indicators edged up over the past six months compared
to early 1995, including car buying, housing starts and industrial production
before slowing again in September. The most recent Index of Leading Indicators
- -- used by the U.S. government to forecast economic conditions -- eased downward
slightly in September, fueled by cheaper commodity prices. This index measures
eleven different indicators, ranging from unemployment benefit claims to
building permits. While a majority of these indicators showed a slight uptick in
September, others dipped. The overall result was confirmation of our
expectations for slow economic growth and steady, or even lower, interest rates
by year end.
In response to these conditions, the municipal bond market continued to lag
somewhat relative to Treasuries. The big uncertainty over the municipal market
continues to be tax reform. The current budget, which is heading for a showdown
in Washington, contains a capital gains cut but does not address broader tax
reform. Flat tax proposals are still being discussed, but a number of alternate
reform measures are on the table as well. We expect this issue to emerge as the
centerpiece of the 1996 Presidential elections.
In short, until a more definite consensus emerges from Washington, we can not be
certain of the impact on municipal bonds and are holding fast on our relatively
cautious investment approach. Looking forward -- and absent radical tax reform
- -- we expect municipal bonds to perform well relative to taxable investments,
due primarily to diminishing supply. There continues to be little refinancing or
new issue activity. New issue activity is increasing toward year-end but remains
well below the levels seen in previous years. The Public Securities Association
now predicts approximately $140 billion in new issues by the end of 1995, less
than half the record amount that came to market in 1993. This reduction in
supply has helped to support underlying values. If the supply situation
continues into 1996 as we expect, stronger appreciation opportunities could
develop, particularly for bonds with long maturities and good call protection.
NEW JERSEY ECONOMIC HIGHLIGHTS
New Jersey is still the strongest-rated Northeastern state with "AA1" and "AA"
ratings from the major credit rating agencies. On a state level, Governor
Whitman and the State Assembly have made New Jersey a more friendly place for
taxpayers and businesses. Over the past two years, state officials have
implemented an earlier-than-expected and aggressive 30% income tax reduction and
a reduction in the corporate tax rate from 9% to 7 1/2%. In addition, New Jersey
officials have reduced state spending by roughly 1 1/2% to 2% over the past two
years.
2
<PAGE>
We have maintained a high quality portfolio with 88% in investment-grade
securities. (An investment-grade security is a security with a rating of BBB/Baa
from S&P or Moody's). We believe we are well positioned to provide our investors
with high tax-exempt income at below-average volatility and risk.
CONCLUSION
At this time, we would like to thank you for your continued participation in the
Smith Barney New Jersey Municipals Fund Inc. and your ongoing confidence in our
management approach.
Sincerely,
/s/ Heath B. McLendon /s/ Lawrence T. McDermott
Heath B. McLendon Lawrence T. McDermott
Chairman and Vice President and
Chief Executive Officer Investment Officer
November 8, 1995
3
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Historical Performance--Class A Shares
<TABLE>
<CAPTION>
Net Asset Value
------------------------
Period Beginning End Income Capital Gain Return of Total
Ended of Period of Period Dividends Distribution Capital Returns(1)
--------- --------- --------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
9/30/95 $12.62 $12.89 $ 0.35 $0.00 $0.00 5.08%+
3/31/95 12.55 12.62 0.70 0.00 0.00 6.37
3/31/94 13.16 12.55 0.69 0.15 0.00 1.66
3/31/93 12.44 13.16 0.75 0.14 0.01 13.49
3/31/92 12.17 12.44 0.77 0.13 0.04 10.22
3/31/91 11.92 12.17 0.83 0.05 0.01 9.89
3/31/90 11.67 11.92 0.82 0.03 0.00 9.62
Inception*
-3/31/89 11.40 11.67 0.82 0.01 0.00 9.84
------ ------ ----- ----- ----- -----
Total $5.73 $0.51 $0.06
===== ===== =====
</TABLE>
Historical Performance--Class B Shares
<TABLE>
<CAPTION>
Net Asset Value
------------------------
Period Beginning End Income Capital Gain Return of Total
Ended of Period of Period Dividends Distribution Capital Returns(1)
--------- --------- --------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
9/30/95 $12.62 $12.89 $0.32 $0.00 $0.00 4.77%+
3/31/95 12.55 12.62 0.62 0.00 0.00 5.76
3/31/94 13.16 12.55 0.62 0.15 0.00 1.15
Inception*
- 3/31/93 12.75 13.16 0.27 0.14 0.01 6.60
------ ------ ----- ----- ----- ----
Total $1.83 $0.29 $0.01
===== ===== =====
</TABLE>
Historical Performance--Class C Shares
<TABLE>
<CAPTION>
Net Asset Value
------------------------
Period Beginning End Income Capital Gain Return of Total
Ended of Period of Period Dividends Distribution Capital Returns(1)
--------- --------- --------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
9/30/95 $12.62 $12.89 $0.32 $0.00 $0.00 4.77%+
Inception*
- 3/31/95 11.86 12.62 0.18 0.00 0.00 8.01
------ ------ ----- ----- ----- ----
Total$ $0.50 $0.00 $0.00
===== ===== =====
</TABLE>
IT IS THE FUND'S POLICY TO DISTRIBUTE DIVIDENDS MONTHLY AND CAPITAL GAINS, IF
ANY, ANNUALLY.
4
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Average Annual Total Return
Without Sales Charge(1)
-----------------------------------
Class A Class B Class C
------- ------- -------
Six Months Ended 9/30/95+ 5.08% 4.77% 4.77%
Year Ended 9/30/95 10.18 9.54 N/A
Five Years Ended 9/30/95 8.77 N/A N/A
Inception* through 9/30/95 8.85 6.33 13.17
With Sales Charge(2)
-----------------------------------
Class A Class B Class C
------- ------- -------
Six Months Ended 9/30/95+ 0.84% 0.27% 3.77%
Year Ended 9/30/95 5.78 5.04 N/A
Five Years Ended 9/30/95 7.89 N/A N/A
Inception* through 9/30/95 8.26 5.40 12.17
Cumulative Total Return
Without Sales Charge(1)
-----------------------
Class A (Inception* through 9/30/95) 88.02%
Class B (Inception* through 9/30/95) 19.48
Class C (Inception* through 9/30/95) 13.17
(1) Assumes reinvestment of all dividends and capital gain distributions at net
asset value and does not reflect deduction of the applicable sales charge
with respect to Class A shares or the applicable contingent deferred sales
charges ("CDSC") with respect to Class B and C shares.
(2) Assumes reinvestment of all dividends and capital gain distributions at net
asset value. In addition, Class A shares reflect the deduction of the
maximum initial sales charge of 4.00% and Class B shares reflect the
deduction of a 4.50% CDSC, which applies if shares are redeemed less than
one year from initial 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 C shares reflect the deduction of a 1.00% CDSC which applies if shares
are redeemed within the first year of purchase.
* Inception dates for Class A, B and C shares are April 22, 1988, November 6,
1992 and December 13, 1994, respectively.
+ Total return is not annualized, as it may not be representative of the total
return for the year.
5
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Historical Performance
GROWTH OF $10,000 INVESTED IN CLASS A SHARES OF THE
SMITH BARNEY NEW JERSEY MUNICIPALS FUND INC.
VS. LEHMAN MUNI BOND FUND INDEX+
(UNAUDITED)
- -------------------------------------------------------
April 1988 - September 1995
[GRAPH APPEARS HERE]
Measurement period Smith Barney
(Fiscal year Covered) New Jersey Lehman
- --------------------- Municipal Long Bonds
Funds, Inc. Index
Measurement PT -
4/22/88 $ 9596 $ 10000
FYE 3/89 $ 10540 $ 10641
FYE 3/90 $ 11554 $ 11763
FYE 3/91 $ 12696 $ 12847
FYE 3/92 $ 13992 $ 14131
FYE 3/93 $ 15879 $ 15900
FYE 3/94 $ 16143 $ 16269
FYE 3/95 $ 17171 $ 17479
FYE 9/95 $ 18042 $ 18414
+ Hypothetical illustration of $10,000 invested in Class A shares at inception
on April 22, 1988, assuming deduction of the maximum 4.00% sales charge at the
time of investment and reinvestment of dividends and capital gains at net asset
value through September 30, 1995. The Lehman Muni Bond Fund Index ("Index") is a
broad based, total return index comprised of 8,000 bonds which are all
investment grade, fixed rate, longer term maturities (greater than two years)
and are selected from issues larger than $50 million dated since January, 1984.
The Index is unmanaged and is not subject to the same management and trading
expenses of a mutual fund. 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.
6
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Portfolio Highlights (unaudited) September 30, 1995
INDUSTRY BREAKDOWN
[GRAPH APPEARS HERE]
General Obligation 21.0
Hospital 19.7
Utilities 16.9
Other 12.2
Education 8.0
Industrial Development 7.6
Pollution Control 6.8
Housing: Multi-Family 5.6
Transportation 2.2
Summary of Investments by Combined Ratings
STANDARD & PERCENTAGE OF
MOODY'S AND/OR POOR'S TOTAL INVESTMENTS
- ----------------------------------------------------------------
Aaa AAA 52.8%
Aa AA 12.8
A A 11.9
Baa BBB 9.6
Ba BB 1.6
VMIG 1 A-1 0.3
NR NR 11.0
=====
100.0%
=====
7
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Schedule of Investments (unaudited) September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITIES VALUE
- ----------- ------ --------------------------------------------------- ------------
<S> <C> <C> <C>
Education - 8.0%
$ 640,000 Aa3* New Jersey Economic Development Revenue,
Series S, Princeton Montessori Society, LOC
Banque National De Paris, 6.500% due 6/1/12 $ 664,000
New Jersey State Educational Facilities,
Financing Authority Revenue:
1,000,000 NR Caldwell College, Series A, 7.250% due 7/1/25 1,008,750
1,285,000 A- Drew University, Series B, 7.450% due 2/1/05 1,379,769
2,700,000 NR Fairleigh Dickinson University, Series C,
6.625% due 7/1/23 2,578,500
2,450,000 A+ New Jersey State Higher Education Assistance,
5.300% due 7/1/10(a) 2,284,625
750,000 AA Rutgers State University, University of New Jersey,
Series P, 6.850% due 5/1/21 803,437
South Brunswick Township, Board of Education,
FGIC-Insured:
1,500,000 AAA 6.400% due 8/1/18 1,578,750
1,500,000 AAA 6.400% due 8/1/19 1,573,125
1,140,000 AA University of New Jersey, School of Medicine and
Dentistry, Series C, 7.200% due 12/1/19 1,246,875
------------
13,117,831
------------
General Obligation - 21.0%
2,500,000 AAA Atlantic County COP Lease Agreement, FGIC-Insured,
7.400% due 3/1/09 2,975,000
375,000 AAA Atlantic County Improvement Luxury Tax Revenue,
Convention Center, MBIA-Insured, 7.400% due 7/1/16 449,531
1,340,000 AAA Bayonne GO, FGIC-Insured, 6.125% due 5/1/14 1,381,875
665,000 AAA Belvedere GO, AMBAC-Insured, 7.300% due 12/1/14 729,838
385,000 A1* Cape May Bridge Commission, Guaranteed
Revenue Bonds, 6.700% due 6/1/02 404,731
550,000 AAA Dover Board of Education COP, FGIC-Insured,
6.600% due 6/1/11 581,625
Essex County GO:
175,000 AAA FSA-Insured, 6.500% due 12/1/11 183,750
2,500,000 AAA Improvement Authority, FGIC-Insured,
5.200% due 12/1/24 2,250,000
750,000 AAA Evesham Township, Board of Education COP,
FGIC-Insured, 6.875% due 9/1/11 818,438
200,000 AAA Hudson County GO Bonds, FGIC-Insured,
6.550% due 7/1/10 221,750
425,000 AAA Hudson County Correctional Facilities, MBIA-Insured,
6.600% due 12/1/21 448,906
</TABLE>
See Notes to Financial Statements
8
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Schedule of Investments (unaudited) (continued) September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITIES VALUE
- ----------- ------ --------------------------------------------------- ------------
General Obligation - 21.0% (continued)
<S> <C> <C> <C>
$ 1,000,000 AAA Lumberton Township School District COP,
MBIA-Insured, 6.100% due 10/1/13 $ 1,037,500
Morris Township, GO:
550,000 AA 6.550% due 7/1/09 620,125
550,000 AA 6.550% due 7/1/10 617,375
500,000 AA 6.550% due 7/1/11 558,125
1,200,000 A+ Morristown GO, Revenue Refunding,
6.500% due 2/1/06 1,249,500
2,500,000 A+ New Jersey State COP, Equipment Leasing Revenue,
Series A, 6.400% due 4/1/05 2,703,125
2,500,000 AA+ New Jersey State GO, Series D,
8.000% due 2/15/07 3,137,500
1,500,000 AAA North Bergen Township Capital Appreciation,
FSA-Insured, 8.000% due 8/15/07 1,860,000
Old Bridge Township GO, FGIC-Insured:
560,000 AAA 6.550% due 7/15/10 598,500
720,000 AAA 6.550% due 7/15/11 767,700
500,000 AAA Perth Amboy Board of Education COP, FSA-Insured,
6.125% due 12/15/17 516,875
1,750,000 AAA Piscataway Township School District COP, FHA-Insured,
5.375% due 12/15/10 1,736,875
1,750,000 AAA Pleasantville School District COP, BIG-Insured,
7.700% due 10/1/13 1,935,938
495,000 A Puerto Rico Commonwealth GO Unlimited,
8.000% due 7/1/08 544,500
500,000 AAA South Amboy GO Unlimited, MBIA-Insured,
6.375% due 12/1/10 532,500
750,000 AAA Trenton GO, MBIA-Insured, 6.550% due 8/15/09 801,563
900,000 AAA Union City GO, MBIA-Insured, 6.700% due 9/1/12 966,375
1,400,000 AAA Warren Hills Regional School District COP,
FSA-Insured, 5.250% due 12/15/09 1,359,750
854,000 AAA Weehawken Township GO, FSA-Insured,
6.350% due 7/1/07 912,712
West Windsor/Plainsboro GO, Regional School District:
180,000 AA 6.750% due 4/1/06 203,400
490,000 AA 6.750% due 4/1/07 556,150
435,000 AA 6.800% due 4/1/08 496,987
170,000 AA 6.800% due 4/1/09 194,225
------------
34,352,744
------------
</TABLE>
See Notes to Financial Statements
9
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Schedule of Investments (unaudited) (continued) September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITIES VALUE
- ----------- ------ --------------------------------------------------- ------------
<S> <C> <C> <C>
Hospital -- 19.7%
$1,000,000 AAA Camden County Improvement Authority, Health
Services Project B, AMBAC-Insured,
5.250% due 12/1/18 $ 936,250
2,500,000 AAA New Jersey EDA, Nursing Home Revenue, RWJ
Health Care Corporation, FSA-Insured,
6.500% due 7/1/24 2,625,000
New Jersey Health Care Facilities Financing
Authority Revenue:
1,000,000 A* Atlantic City Medical Center, Series C,
6.800% due 7/1/11 1,061,250
Burdett Tomlin Memorial Hospital, Series D,
FGIC-Insured:
1,400,000 AAA 6.500% due 7/1/12 1,475,250
850,000 AAA 6.500% due 7/1/21 889,313
Columbus Hospital, Series A:
1,050,000 Baa1* 7.200% due 7/1/01 1,084,125
1,000,000 Baa1* 7.500% due 7/1/21 1,011,250
1,500,000 AAA Community Medical Center, Series D,
MBIA-Insured, 6.000% due 7/1/19 1,513,125
250,000 A Community Memorial Hospital Association,
Series C, 8.000% due 7/1/14 267,812
1,550,000 Baa1* Deborah Heart & Lung Center, 6.300% due 7/1/23 1,551,937
3,000,000 AAA Irvington General Hospital, FHA-Insured,
6.375% due 8/1/15 3,142,500
1,500,000 A Helene Fuld Medical Center, Series C,
8.125% due 7/1/13 1,618,125
1,125,000 AAA J.F.K. Health System, Obligated Group,
FGIC-Insured, 6.700% due 7/1/21 1,195,313
260,000 A1* Kennedy Memorial University Medical Center,
Series D, 7.875% due 7/1/09 277,550
340,000 Baa* Kimball Medical Center, Series C,
8.000% due 7/1/98 355,300
825,000 AAA Medical Center of Ocean County, Series C,
FSA-Insured, 6.750% due 7/1/20 902,344
3,550,000 AAA Newark Beth Israel Medical Center, FSA-Insured,
6.000% due 7/1/24 3,603,250
600,000 BBB+ Newcomb Medical Center, Series A,
7.875% due 7/1/03 653,250
2,000,000 Baa* Ocean County Hospital, 6.250% due 7/1/23 1,877,500
585,000 AAA Overlook Hospital Association, Series E,
FGIC-Insured, 6.700% due 7/1/17 605,475
1,000,000 NR Raritan Bay Medical Center, 7.250% due 7/1/27 992,500
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Schedule of Investments (unaudited) (continued) September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITIES VALUE
- ----------- ------ --------------------------------------------------- ------------
<S> <C> <C> <C>
Hospital -- 19.7% (continued)
$ 825,000 AAA Riverview Medical Center, Series A,
AMBAC-Insured, 8.000% due 7/1/18 $ 910,594
1,250,000 Baa* St. Elizabeth's Hospital Project, Series B,
8.250% due 7/1/20 1,337,500
1,750,000 Baa1* St. Mary Hospital, 5.875% due 7/1/12 1,645,000
725,000 AAA Wayne General Hospital, FHA-Insured,
5.750% due 8/1/11 726,812
------------
32,258,325
------------
Housing: Multi-Family -- 5.6%
650,000 BBB+ Essex County Improvement Authority, Lease
Revenue Bonds, 6.600% due 4/1/14 660,563
1,000,000 A+ Hudson County Improvement Authority, Solid
Waste System Revenue, Series A, 6.100% due 7/1/20 1,008,750
1,500,000 AAA Newark Housing Financing Corporation, Mortgage
Revenue Refunding Manor Apartments, Series A,
FHA-Insured, 7.500% due 2/15/24 1,612,500
New Jersey State Housing & Mortgage Finance Agency,
Multi-Family Housing Revenue:
1,550,000 AAA Presidential Plaza, Series 1, FHA-Insured,
7.000% due 5/1/30 1,617,812
1,000,000 AAA Refunding, Series A, AMBAC-Insured,
6.000% due 11/1/14 1,001,250
1,000,000 AA Regency Park Project, Series H, 7.700% due 11/1/30 1,041,250
735,000 AAA Sayreville Housing Development Corporation,
Mortgage Revenue Refunding, Lakeview Apartments,
FHA-Insured, 7.750% due 8/1/24 805,744
1,500,000 Aa* Scotch Plains Township Senior Citizen Housing
Corporation, Revenue Bonds, 5.750% due 3/1/23 1,417,500
------------
9,165,369
------------
Housing: Single-Family -- 0.7%
New Jersey State Housing & Mortgage Finance Agency
Revenue, MBIA-Insured:
740,000 AAA Series B, 8.100% due 10/1/17 784,400
30,000 AAA Series C, 8.375% due 4/1/17 31,987
310,000 AAA Series D, 7.700% due 4/1/29(a) 326,275
------------
1,142,662
------------
Industrial Development -- 7.6%
New Jersey EDA:
1,000,000 AAA Natural Gas Facilities Revenue, NUI Corporation,
Series A, AMBAC-Insured, 6.350% due 10/1/22 1,038,750
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Schedule of Investments (unaudited) (continued) September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
- ----------- ------ --------------------------------------------------- ------------
Industrial Development -- 7.6% (continued)
<S> <C> <C> <C>
Economic Development Revenue:
$ 1,000,000 NR Trane Division 1990 Project, 9.500% due 9/1/00 $ 1,127,500
1,500,000 NR Zirser-Greenbriar, 7.375% due 7/15/03 1,524,375
1,500,000 BB+ Electric Revenue, Vineland Cogeneration LP,
7.875% due 6/1/19(a) 1,606,875
1,000,000 AAA Miscellaneous Revenue, State Contract, FSA-Insured,
6.000% due 3/15/21 1,017,500
Nursing Home Revenue:
1,500,000 NR Franciscan Oaks, Series A, 8.500% due 10/1/23 1,591,875
1,000,000 A+ Morris Hall-St. Lawrence, 6.250% due 4/1/25 1,016,250
2,000,000 AAA St. Barnabas Reality Development Corporation,
MBIA-Insured, 5.250% due 7/1/13 1,885,000
1,500,000 A- Terminal Revenue, GATX Terminal Corporation,
Series 1994, 7.300% due 9/1/19 1,665,000
==========
12,473,125
==========
Lifecare -- 1.2%
1,000,000 BBB New Jersey EDA, EDR, Health Village Inc.,
7.800% due 5/1/16 1,056,250
815,000 AAA New Jersey Health Care Facilities, Financing Authority
Revenue, Spectrum for Living, FHA-Insured,
6.500% due 2/1/22 848,619
=========
1,904,869
=========
Miscellaneous -- 9.5%
200,000 AAA Delaware River Junction, Toll Bridge Commission,
Refunding Bonds, FGIC-Insured, 6.250% due 7/1/12 208,500
1,000,000 AAA New Brunswick Parking Authority Revenue,
City Guaranteed Parking, Series A, FGIC-Insured,
6.500% due 9/1/19 1,058,750
New Jersey EDA:
480,000 NR EDR, National Association of Accountants,
7.650% due 7/1/09 515,400
1,975,000 NR Industrial Revenue, State Plaza Park and Ride LP,
6.625% due 7/1/03 2,039,188
500,000 A- Nursing Home Revenue, Absecon Manor Project,
FHA-Insured, 8.250% due 2/1/28 517,500
1,000,000 NR Waste Paper Recycling Revenue, Marcal Paper
Project, 8.500% due 2/1/10(a) 1,146,250
New Jersey Sports and Expo Authority:
1,250,000 AAA Convention Center, Luxury Tax Revenue,
MBIA-Insured, 6.250% due 7/1/20 1,289,062
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Schedule of Investments (unaudited) (continued) September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITIES VALUE
- ----------- ------ --------------------------------------------------- ------------
Miscellaneous -- 9.5% (continued)
<S> <C> <C> <C>
$2,000,000 NR Monmouth Park, Refunding, Series A,
8.000% due 1/1/25 $ 2,182,500
3,400,000 Aa* State Contract, Series A, 6.000% due 3/1/21 3,417,000
2,000,000 AAA Port Authority NY & NJ, Consolidated Loan, Series 96,
FGIC-Insured, 6.600% due 10/1/23(a) 2,097,500
1,000,000 A+ Union County Improvement Authority Revenue,
Cranford Township Project, 7.750% due 5/1/03 1,100,000
------------
15,571,650
------------
Pollution Control -- 6.8%
950,000 Ba* Atlantic County Utilities Authority, Solid Waste Revenue,
7.125% due 3/1/16 953,562
3,750,000 BBB- Hudson County Improvement Authority, Solid Waste
System Revenue, 7.100% due 1/1/20 3,754,688
200,000 AAA Mercer County Improvement Revenue, FGIC-Insured,
Series A, 6.700% due 4/1/13(a) 207,000
Middlesex County Pollution Control Authority
Financing Revenue, Amerada Hess Corp.:
1,000,000 NR 7.875% due 6/1/22 1,123,750
2,000,000 NR 6.875% due 12/1/22 2,095,000
New Jersey EDA:
1,250,000 Aa1* Solid Waste Revenue, Garden State Paper Co.,
7.125% due 4/1/22(a) 1,317,188
1,500,000 A Sewer Facility, Atlantic City Sewer Co.,
7.250% due 12/1/11(a) 1,640,625
------------
11,091,813
------------
Short-Term (b) -- 0.3%
500,000 VMIG 1* Commonwealth of Puerto Rico, Government
Bank Revenue Bond, 3.450% due 12/1/15 500,000
------------
Transportation -- 2.2%
500,000 AAA Delaware River Port Authority, PA & NJ Delaware River 555,000
Bridges, Revenue Refunding, AMBAC-Insured,
7.375% due 1/1/07
500,000 AAA Hoboken Parking Authority Revenue, FGIG-Insured,
6.000% due 6/1/24 513,750
2,500,000 AAA New Jersey State Transportation Trust Fund
Transportation System, MBIA-Insured,
5.500% due 6/15/13 2,437,500
------------
3,506,250
------------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Schedule of Investments (unaudited) (continued) September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITIES VALUE
- ----------- ------ --------------------------------------------------- ------------
<S> <C> <C> <C>
Utilities -- 16.9%
$ 700,000 Baa1* Beachwood Sewer Authority Revenue, Junior Lien,
6.500% due 12/1/12 $ 727,125
1,000,000 AAA Bordentown Sewerage Authority Revenue, Series C,
MBIA-Insured, 6.900% due 12/1/16 1,067,500
Gloucester County Utilities Authority, Sewer Revenue:
1,000,000 AA- 6.500% due 1/1/21 1,038,750
900,000 AA- 6.259% due 1/1/24 930,375
1,700,000 AAA Jersey City Sewer Authority, AMBAC-Insured,
6.250% due 1/1/14 1,836,000
530,000 AAA Jersey City Water Utility, AMBAC-Insured,
7.500% due 10/1/03 570,412
1,385,000 AAA Kearny Municipal Utilities Authority Revenue,
FGIC-Insured, 7.300% due 11/15/18 1,687,969
1,500,000 AAA Lower Township Municipal Utilities Authority,
MBIA-Insured, 6.125% due 12/1/13 1,556,250
500,000 AAA Monroe Township Municipal Utilities Authority,
Gloucester County Revenue, AMBAC-Insured,
6.650% due 7/1/11 535,000
New Jersey EDA:
4,500,000 AAA PCR, PSE&G Corp., MBIA-Insured, 6.400% due 5/1/32(a) 4,640,625
750,000 A Water Facilities Revenue, Hackensack Water,
Series D, 7.000% due 10/1/17(a) 772,500
1,960,000 AAA North Bergen Township Municipal Utilities Authority,
Sewer Revenue, FGIC-Insured, 7.875% due 12/15/09 2,457,350
North Jersey District Water Supply Commission,
Refunding, Wanaque North Project, Series A,
MBIA-Insured:
2,500,000 AAA 6.000% due 7/1/21 2,553,125
1,195,000 AAA 6.500% due 11/15/21 1,268,194
750,000 AAA Old Bridge Township Municipal Utilities Authority
Revenue, FGIC-Insured, 6.400% due 11/1/09 707,812
2,500,000 AA Somerset/Raritan Valley Sewer Authority Revenue,
6.750% due 7/1/10 2,687,500
1,000,000 AAA Southeast Morris County Municipal Utilities
Authority, Water Revenue, Series A, FGIC-Insured,
6.500% due 1/1/11 1,055,000
1,500,000 AAA Stafford Municipal Utilities Authority, Sewer and
Water Revenue, FGIC-Insured, 6.125% due 12/1/22 1,543,125
------------
27,724,612
------------
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Schedule of Investments (unaudited) (continued) September 30, 1995
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITIES VALUE
- ----------- ------ --------------------------------------------------- ------------
<S> <C> <C> <C>
Water and Sewer -- 0.5%
$ 100,000 AAA Passaic Valley Sewer Commission Revenue,
Water Supply Revenue, Series A, FGIC-Insured,
6.400% due 12/15/22 $ 104,375
750,000 AAA South Monmouth Regional Sewer Authority,
MBIA-Insured, 6.000% due 1/15/14 776,250
------------
880,625
------------
TOTAL INVESTMENT -- 100%
(Cost -- $156,492,0154)(c) $163,689,875
============
</TABLE>
(a) Income from these issues is considered a preference item for purposes of
calculating the alternative minimum tax.
(b) Variable rate obligations payable at par on demand at any time on no more
than seven days notice.
(c) Aggregate cost for Federal income tax purposes is substantially the same.
See pages 16 and 17 for definitions of ratings and certain security
descriptions.
15
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Bond Ratings
All ratings are by Standard & Poor's Corporation, except those identified by an
asterisk (*) are rated by Moody's Investors Services. The definitions of the
applicable rating symbols are set forth below:
Standard & Poor's -- Ratings from "AA" to "BBB" may be modified by the addition
of a plus (+) or 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 issue only in a
small degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
BBB -- 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 debt in this category than in higher
rated categories.
Moody's -- Numerical modifiers 1, 2 and 3 may be applied to each generic rating
from "Aa" to "Baa", where 1 is the highest and 3 the lowest ranking
within its generic category.
Aaa -- Bonds that are rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt edge". Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa -- Bonds that are rated "Aa" are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-
term risks appear somewhat larger than in Aaa securities.
A -- Bonds that are rated "A" possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
some time in the future.
Baa -- Bonds that are rated "Baa" are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
NR -- Indicates that the bond is not rated by Standard & Poor's Corporation
or Moody's Investors Services.
16
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Short-Term Securities Ratings
SP-1 -- Standard & Poor's highest rate 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
ABAG -- Association of Bay Area Governments
AIG -- American International Guaranty
AMBAC -- American Municipal Bond Assurance Corporation
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance Company
COP -- Certificate of Participation
EDA -- Economic Development Authority
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
FSA -- Federal Savings Association
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCR -- Pollution Control Revenue
RIBS -- Residual Interest Bonds
VA -- Veterans Administration
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
17
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Statement of Assets and Liabilities (unaudited) September 30, 1995
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments, at value (Cost -- $156,492,014) $163,689,875
Cash 32,375
Receivable for Fund shares sold 108,950
Interest receivable 2,867,844
------------
TOTAL ASSETS 166,699,044
------------
LIABILITIES:
Payable for securities purchased 1,006,667
Dividend payable 726,479
Management fees payable 47,417
Administration fees payable 27,095
Distribution fees payable 23,768
Accrued expenses and other liabilities 173,536
------------
TOTAL LIABILITIES 2,004,962
------------
TOTAL NET ASSETS $164,694,082
============
NET ASSETS:
Par value of capital shares $ 12,778
Capital paid in excess of par value 160,887,818
Overdistributed net investment income (204,928)
Accumulated net realized loss on security transactions (3,199,447)
Net unrealized appreciation of investments 7,197,861
------------
TOTAL NET ASSETS $164,694,082
============
SHARES OUTSTANDING:
Class A 8,197,905
Class B 4,554,295
Class C 25,350
NET ASSET VALUE:
Class A (and redemption price) $12.89
Class B * $12.89
Class C ** $12.89
CLASS A MAXIMUM PUBLIC OFFERING PRICE PER SHARE
(net asset value plus 4.17% of net asset value per share) $13.43
</TABLE>
* Redemption price is NAV of Class B shares reduced by a CDSC of
4.50% if shares are redeemed less than one year from initial purchase
(See Note 4).
** Redemption price is NAV of Class C shares reduced by a CDSC of 1.00% if
shares are redeemed within the first year of purchase.
See Notes to Financial Statements.
18
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Statement of Operations (unaudited)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Interest $ 5,139,161
EXPENSES:
Management fees (Note 4) 287,053
Distribution fees (Note 4) 266,100
Administration fees (Note 4) 164,031
Shareholder and servicing fees 36,340
Audit and legal 35,399
Shareholder communications 24,605
Custody 21,068
Pricing service fees 10,000
Directors' fees 8,356
Registration fees 8,201
Other 9,563
------------
TOTAL EXPENSES 870,716
------------
NET INVESTMENT INCOME 4,268,445
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 5:)
Realized Loss From Security Transactions
(excluding short-term securities):
Proceeds from sales 6,047,428
Cost of securities sold 6,049,743
------------
NET REALIZED LOSS (2,315)
------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 3,594,166
End of period 7,197,861
------------
INCREASE IN NET UNREALIZED APPRECIATION 3,603,695
------------
NET GAIN ON INVESTMENTS 3,601,380
------------
INCREASE IN NET ASSETS FROM OPERATIONS $ 7,869,825
============
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Statements of Changes in Net Assets
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1995 (UNAUDITED)
AND THE YEAR ENDED MARCH 31, 1995
<TABLE>
<CAPTION>
SEPTEMBER 30 MARCH 31
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 4,268,445 $ 9,021,931
Net realized loss (2,315) (3,197,132)
Increase in net unrealized appreciation 3,603,695 3,571,504
------------ ------------
INCREASE IN NET ASSETS FROM OPERATIONS 7,869,825 9,396,303
------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM (NOTE 3):
Net investment income (4,362,076) (9,001,936)
Net realized gains -- (29,564)
------------ ------------
Decrease in Net Assets From
Distributions to Shareholders (4,362,076) (9,031,500)
------------ ------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares 8,267,532 22,726,723
Net asset value of shares issued
for reinvestment of dividends 2,271,159 5,847,777
Cost of shares reacquired (11,854,233) (34,725,222)
------------ ------------
DECREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS (1,315,542) (6,150,722)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS 2,192,207 (5,785,919)
NET ASSETS
Beginning of period 162,501,875 168,287,794
------------ ------------
END OF PERIOD* $164,694,082 $162,501,875
============ ============
*Includes overdistributed net investment income of: $ (204,928) $ (111,297)
============ ============
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Notes to Financial Statements (unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney New Jersey 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 the trade date; (b) securities
are valued at the mean between the quoted bid and asked prices by an independent
pricing service that are based on transactions in municipal obligations,
quotations from municipal bond dealers, market transactions in comparable
securities and various relationships between securities; (c) short-term
securities and securities maturing within 60 days are valued at cost plus
(minus) accreted discount (amortized premium), which approximates value; (d)
gains or losses on the sale of securities are calculated by using the specific
identification method; (e) interest income, adjusted for amortization of
premiums and accretion of original issue discount, is recorded on the accrual
basis; market discount is recognized upon the disposition of the security; (f)
direct expenses are charged to the Fund and each class; management fees and
general fund expenses are allocated on the basis of relative net assets; and (g)
the Fund intends to comply with the applicable provision 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.
2. FUND CONCENTRATION
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.
21
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Notes to Financial Statements (unaudited) (continued)
3. 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.
4. INVESTMENT ADVISORY AGREEMENT, ADMINISTRATION
AGREEMENT AND OTHER TRANSACTIONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment adviser to the Fund. The Funds
pays SBMFM an advisory fee calculated at an annual rate of 0.35% of average
daily net assets up to $500 million and 0.32% of average daily net assets in
excess of $500 million. This fee is calculated daily and paid monthly.
SBMFM 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.
In addition, The Boston Company Advisors, Inc. ("Boston Advisors"), an
indirect wholly owned subsidiary of Mellon Bank, acted as sub-administrator to
the Fund. SBMFM paid Boston Advisors a portion of its administration fee at a
rate agreed upon from time to time between SBMFM and Boston Advisors. As of June
12, 1995 this relationship was terminated.
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts as distributor of
Fund shares. For the six months ended September 30, 1995, SB received sales
charges of approximately $72,000 of the Fund's Class A shares.
There is a contingent deferred sales charge ("CDSC") of 4.50% on Class B
shares if redemption occurs less than one year from initial purchase and
22
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Notes to Financial Statements (unaudited) (continued)
thereafter by 1.00% per year until no CDSC is incurred. Class C shares have a
1.00% CDSC if redemption occurs within the first year from the date such
investment was made. For the six months ended September 30, 1995, CDSCs of
approximately $61,000 were paid to SB.
Pursuant to a Distribution Plan, the Fund pays a service fee with respect
to its Class A, B and C shares, calculated at the annual rate of 0.15% of the
average daily net assets for each class. In addition, the Fund pays a
distribution fee with respect to its Class B and C shares calculated at the
annual rate of 0.50% and 0.55%, respectively, of the average daily net assets
for each class.
All officers and one Director of the Fund are employees of SB.
5. INVESTMENTS
During the six months ended September 30, 1995, the aggregate cost of
purchases and proceeds from sales of investments (including maturities, but
excluding short-term securities) of investments were as follows:
Purchases $6,003,388
----------
Sales 6,047,428
----------
At September 30, 1995, the net unrealized appreciation of investments for
Federal income tax purposes consisted of the following:
Gross unrealized appreciation $8,127,565
Gross unrealized depreciation (929,704)
----------
Net unrealized appreciation $7,197,861
==========
6. CAPITAL LOSS CARRYFORWARD
At March 31, 1995, the Fund had for Federal tax purposes approximately
$2,456,970 of unused loss carryforwards available to offset future capital gains
expiring March 31, 2003. To the extent that these carryforward losses are used
to offset capital gains, it is probable that the gains so offset will not be
distributed.
7. CAPITAL SHARES
As of September 30, 1995, the Fund has authorized 100 million shares of
$0.001 par value capital stock. The Fund has the ability to issue multiple
classes of shares. Each share of a class represents an identical
23
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Notes to Financial Statements (unaudited) (continued)
interest and has the same rights, except that each class bears certain direct
expenses, including those specifically related to the distribution of its
shares. At September 30, 1995, total paid-in capital amounted to the following
for each class:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
Total Paid-in Capital $100,270,763 $ 60,314,182 $ 315,651
============ ============ =========
<CAPTION>
Transactions in shares of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1995 MARCH 31, 1995*
-------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 290,726 $ 3,720,920 806,228 $ 9,970,151
Shares issued on
reinvestment 116,948 1,489,126 326,175 4,033,183
Shares redeemed (684,283) (8,765,857) (2,211,779) (27,041,571)
-------- ------------ ---------- -------------
Net Decrease (276,609) $ (3,555,811) (1,079,376) $ (13,038,237)
======== ============ ========== =============
CLASS B
Shares sold 350,257 $ 4,476,543 1,011,453 $ 12,515,653
Shares issued on
reinvestment 61,010 776,976 146,701 1,813,092
Shares redeemed (241,712) (3,086,481) (628,611) (7,683,651)
-------- ------------ ---------- -------------
Net Increase 169,555 $ 2,167,038 529,543 $ 6,645,094
======== ============ ========== =============
CLASS C
Shares sold 5,433 $ 70,069 19,546 $ 240,919
Shares issued on
reinvestment 397 5,057 120 1,502
Shares redeemed (146) (1,895) -- --
-------- ------------ ---------- -------------
Net Increase 5,684 $ 73,231 19,666 $ 242,421
======== ============ ========== =============
</TABLE>
* For Class C Shares, Transactions are for the period from December 13, 1994
(inception date) to March 31, 1995.
Subsequent Event (unaudited)
On July 19, 1995, the Board of Directors of the Fund approved a reduction in
the investment advisory fee paid by the Fund to SBMFM. Accordingly, effective
November 17, 1995, the Fund's investment advisory fee will be decreased from
0.35% to 0.30% of the average daily net assets of the Fund.
24
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPAL FUND INC.
Financial Highlights
FOR A SHARE OF EACH CLASS OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
CLASS A SHARES 1995(1) 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 12.62 $ 12.55 $ 13.16 $ 12.44 $ 12.17 $ 11.92
-------- -------- -------- -------- -------- ---------
INCOME FROM OPERATIONS:
Net investment income(2) 0.33 0.70 0.70 0.75 0.77 0.82
Net realized and unrealized
gain (loss) 0.29 0.70 (0.46) 0.87 0.44 0.32
-------- -------- -------- -------- -------- ---------
Total Income From Operations 0.62 0.77 0.24 1.62 1.21 1.14
-------- -------- -------- -------- -------- ---------
LESS DISTRIBUTIONS FROM:
Net investment income (0.35) (0.70) (0.69) (0.75) (0.77) (0.83)
Overdistribution of net income -- -- (0.01) -- -- --
Net realized gains -- (0.00)* (0.15) (0.14) (0.13) (0.05)
Capital -- -- (0.00)* (0.01) (0.04) (0.01)
-------- -------- -------- -------- -------- ---------
Total Distributions (0.35) (0.70) (0.85) (0.90) (0.94) (0.89)
-------- -------- -------- -------- -------- ---------
NET ASSET VALUE,
END OF PERIOD $ 12.89 $ 12.62 $ 12.55 $ 13.16 $ 12.44 $ 12.17
-------- -------- -------- -------- -------- ---------
TOTAL RETURN 5.08%++ 6.37% 1.66% 13.49% 10.22% 9.89%
-------- -------- -------- -------- -------- ---------
NET ASSETS,
END OF PERIOD (000s) $105,663 $106,919 $119,913 $115,694 $ 92,797 $ 65,378
-------- -------- -------- -------- -------- ---------
RATIOS TO AVERAGE NET ASSETS:
Expenses(2)(3) 0.88%+ 0.88% 0.83% 0.74% 0.67% 0.57%
Net investment income 5.38+ 5.61 5.17 5.76 6.18 6.74
-------- -------- -------- -------- -------- ---------
PORTFOLIO TURNOVER RATE 24% 32% 32% 58% 98% 44%
======== ======== ======== ======== ======== =========
</TABLE>
(1) For the six months ended September 30, 1995 (unaudited).
(2) The manager has waived all or part of its fees in each of the periods in the
four-year period ended March 31, 1994. If such fees were not waived, the per
share decrease of net investment income and the ratios of expenses to
average net assets would be as follows:
Per Share Decreases Expense Ratios
of Net Investment Income Without Fee Waivers
-------------------------- ----------------------
1994 1993 1992 1991 1994 1993 1992 1991
----- ----- ----- ----- ---- ---- ---- ----
Class A $0.01 $0.02 $0.02 $0.04 0.88% 0.90% 0.83% 0.90%
(3) Expense ratios exclude interest expense. Expense ratios including interest
expense would have been 0.89% and 0.68% for the years ended March 31, 1995
and March 31, 1992, respectively.
* Amount represents less than $0.01.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
25
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Financial Highlights (continued)
FOR A SHARE OF EACH CLASS OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
Class B Shares 1995(1) 1995 1994 1993(2)
------- ------- ------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.62 $ 12.55 $ 13.16 $ 12.75
------- ------- ------- -------
INCOME FROM OPERATIONS:
Net investment income(3) 0.32 0.63 0.64 0.28
Net realized and unrealized gain (loss) 0.27 0.06 (0.47) 0.55
------- ------- ------- -------
Total Income From Operations 0.59 0.69 0.17 0.83
------- ------- ------- -------
LESS DISTRIBUTION FROM:
Net investment income (0.32) (0.62) (0.62) (0.27)
Overdistribution of net income -- -- (0.01) --
Net realized gains -- (0.00)* (0.15) (0.14)
Capital -- -- (0.00)* (0.01)
------- ------- ------- -------
Total Distributions (0.32) (0.62) (0.78) (0.42)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 12.89 $ 12.62 $ 12.55 $ 13.16
------- ------- ------- -------
TOTAL RETURN 4.77%++ 5.76% 1.15% 6.60%++
------- ------- ------- -------
NET ASSETS, END OF PERIOD (000s) $58,704 $55,334 $48,375 $16,293
------- ------- ------- -------
RATIOS TO AVERAGE NET ASSETS
Expenses(3)(4) 1.40%+ 1.39% 1.36% 1.33%+
Net investment income 4.88+ 5.09 4.64 5.17+
------- ------- ------- -------
PORTFOLIO TURNOVER RATE 24% 32% 32% 58%
======= ======= ======= =======
</TABLE>
(1) For the six months ended September 30, 1995 (unaudited).
(2) For the period from November 6, 1992 (inception date) to March 31, 1993.
(3) The manager has waived all or part of its fees in each of the periods in
the two-year period ended March 31, 1994. If such fees were not waived,
the per share decrease of net investment income and the ratios of expenses
to average net assets would be as follows:
Per Share Decreases Expense Ratios
of Net Investment Income Without Fee Waivers
------------------------ ---------------------
1994 1993(2) 1994 1993(2)
----- ------ ----- -------
Class B $0.01 $0.01 1.41% 1.49%+
(4) Expense ratios exclude interest expense. Expense ratios including interest
expense would have been 1.40% for the year ended March 31, 1995.
* Amount represents less than $0.01.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
26
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Financial Highlights (continued)
FOR A SHARE OF EACH CLASS OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
CLASS C SHARES 1995(1) 1995(2)
--------- ---------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.62 $11.86
--------- ---------
INCOME FROM OPERATIONS:
Net investment income 0.30 0.20
Net realized and unrealized gain 0.29 0.74
--------- ---------
Total Income From Operations 0.59 0.94
--------- ---------
LESS DISTRIBUTIONS FROM:
Net investment income (0.32) (0.18)
Overdistribution of net income -- --
Net realized gains -- (0.00)*
--------- ---------
Total Distributions (0.32) (0.18)
--------- ---------
NET ASSET VALUE, END OF PERIOD $12.89 $12.62
--------- ---------
TOTAL RETURN++ 4.77% 8.01%
--------- ---------
NET ASSETS, END OF PERIOD (000S) $327 $248
--------- ---------
RATIOS TO AVERAGE NET ASSETS:+
Expenses 1.45% 1.44%
Net investment income 4.83 5.05
--------- ---------
PORTFOLIO TURNOVER RATE 24% 32%
========= =========
</TABLE>
(1) For the period six months ended September 30, 1995 (unaudited).
(2) For the period from December 13, 1994 (inception date) to March 31, 1995.
* Amount represents less than $0.01.
++ Total return is not annualized, as it may not be representative of the
total return for year.
+ Annualized.
27
<PAGE>
SMITH BARNEY
NEW JERSEY MUNICIPALS FUND INC.
Additional Information
Change in Independent Auditor: On October 20, 1994, based upon the
recommendation of the Audit Committee of the Fund, the Board of Directors
determined not to retain Coopers & Lybrand L.L.P ("Coopers & Lybrand") as the
Fund's independent auditor and voted to appoint KPMG Peat Marwick LLP. During
the Fund's two most recent fiscal years, Coopers & Lybrand's audit reports
contained no adverse opinion or disclaimer of opinion; nor were the reports
qualified or modified as to uncertainty, audit scope, or accounting principles.
Further, during this same period there were no disagreements with Coopers &
Lybrand on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of Coopers & Lybrand, would have caused it to make reference
to the subject matter of such disagreements in connection with its audit
reports. The Fund has requested Coopers & Lybrand to provide a letter to the
Securities and Exchange Commission stating whether Coopers & Lybrand agrees with
the foregoing statements, and to provide the Fund with a copy of such letter. A
copy of this letter is available upon request by calling the Fund at (212)
723-9218.
28
<PAGE>
SMITH BARNEY
NEW JERSEY
MUNICIPALS
FUND INC.
DIRECTORS
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt Dorsett
Elliot Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon, Chairman
Cornelius Rose
OFFICERS
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President
and Treasurer
Lawrence T. McDermott
Vice President
and Investment Officer
Karen L. Mahoney-Malcomson
Investment Officer
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
SMITH BARNEY
------------
A Member of TravelersGroup[LOGO]
INVESTMENT ADVISER
Smith Barney Mutual Funds
Management Inc.
DISTRIBUTOR
Smith Barney Inc.
CUSTODIAN
PNC Bank
SHAREHOLDER
SERVICING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
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 a
current Prospectus for the Fund, which contains information concerning the
Fund's investment policies and expenses as well as other pertinent information.
SMITH BARNEY
NEW JERSEY
MUNICIPALS FUND INC.
388 Greenwich Street
New York, New York 10013
FD0450 11/95
