<PAGE>
[GRAPHIC]
Smith Barney
New Jersey
Municipals
Fund Inc.
------------------
SEMI-ANNUAL REPORT
------------------
September 30, 1998
[LOGO] Smith Barney Mutual Funds
Investing for your future.
Every day.(R)
<PAGE>
Smith Barney [PHOTO] [PHOTO]
New Jersey
Municipals HEATH B. LAWRENCE T.
Fund Inc. MCLENDON MCDERMOTT
Chairman Vice President and
Investment Officer
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney
New Jersey Municipals Fund Inc. ("Fund") for the period ended September 30,1998.
In this report,we summarize the period's prevailing economic and market
conditions and outline our portfolio strategy. A detailed summary of the Fund's
performance can be found in the appropriate sections that follow.
Performance Update
For the six months ended September 30,1998,the Class A shares of the Fund had a
total return of 4.65% outperforming its Lipper Analytical Services,Inc. peer
group average total return of 4.39% for the same period. (Lipper is an
independent fund-tracking organization.) Over the six months covered by the
report,the Fund distributed income dividends totaling $0.35 per Class A share.
Based on its net asset value ("NAV") of $13.71 as of September 30,1998 and the
current monthly income distribution per share of $0.055 for Class A shares,this
equates to an annualized yield of 4.81%. For a New Jersey State resident in the
combined federal and state income tax bracket of 42.37%,the Fund's tax-free
yield of 4.81% is equivalent to a taxable yield of 8.35%. (This figure assumes a
federal income tax bracket of 36% which according the Internal Revenue Service
constitutes 10% of all U.S. taxpayers.)
Market and Economic Overview
The municipal bond market has continued to benefit from the U.S. economy's
persistent strength. We expect this year's municipal bond issuance to be heavy
and come close to the record set in 1993,a year when approximately $290 billion
in new debt was issued. Attractive low rates combined with the ongoing
infrastructural needs of many municipalities are,in our view,some of the reasons
why so many municipal bonds have been issued lately.
Attractive low interest rates have been an incentive for state and local
governments to refinance older,high interest rate debt. In addition,when
interest rates are low,it is easier to get voter approval to fund ongoing
infrastructure construction such as school and healthcare facilities.
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Smith Barney New Jersey Municipals Fund Inc. 1
<PAGE>
The globalization of the U.S. economy has made it more vulnerable to foreign
difficulties. In our opinion,the dominant theme in the financial markets
continues be what impact,if any,the problems in Asia and Russia will have on the
U.S. economy and future corporate earnings. During the reporting period,strong
demand for U.S. Treasurys was fueled by a classic flight to safety amidst rising
investor uncertainty. While municipal bond prices have been mostly flat,the
prices of U.S. Treasurys have gone higher and their yields have declined to
historic levels. Tax-exempt bonds have participated in this rally,albeit at a
somewhat subdued pace.
With stock market volatility on the rise and anxiety about the global economy
increasing,the Federal Reserve Board ("Fed") changed its monetary policy from
one of vigilance against inflation to one of combating deflation. (Deflation is
when prices actually fall. Deflation should not be confused with disinflation.
Disinflation is the slowing down of the rate at which prices increase.) The
Federal Open-Market Committee,the committee that sets interest rate and credit
policies for the Federal Reserve System,lowered the federal-funds rate 25 basis
points on September 29, 1998. (A basis point is a means of expressing yield as a
percentage. Each basis point is 1/100 of 1%. The federal-funds rate is an
overnight bank lending rate that is a benchmark for other short-term interest
rates.) After the close of the reporting period,the Fed took an unexpected
action of cutting short-term interest rates again by another 25 basis points on
October 15,1998. The second Fed rate cut came as a surprise to many investment
professionals.
We think that the tax-exempt market,which has been lagging versus the U.S.
Treasurys market in 1998,should experience stable to lower interest rates as
municipal bond volume slows in the coming year. Moreover,we believe the
after-tax attractiveness of municipal bonds should become more apparent to
individual investors in the days ahead.
New Jersey Economic Highlights
New Jersey's general obligation rating is unchanged at Aa1 by Moody's Investors
Service Inc. and their outlook on the Garden State has changed from negative to
stable. This is due to New Jersey's growing economy which has caused a balance
between recurring revenues and expenditures. While New Jersey remains a wealthy
state with a diversified economy,its debt burden is moderate. And New Jersey
still ranks as the second-highest state in average income per family and per
person,trailing only Connecticut.
We continue to favor select New Jersey education and hospital municipal bonds.
Demographic changes such as an older student population and aging schools have
made it easier for New Jersey officials to get approval for more education bond
issuance. Hospitals in New Jersey (and nationally as well) have become
better-run businesses and cost containment has been successfully implemented. In
addition,recent technological developments have enabled many hospitals to
accurately monitor their own financial health and that has been generally
positive for the entire industry.
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2 1998 Semi-Annual Report to Shareholders
<PAGE>
Fund's Investment Strategy
The investment objective of the Fund is to provide New Jersey investors with as
high a level of dividend income exempt from Federal income tax and New Jersey
state personal income tax as is consistent with prudent investment management
and the preservation of capital. The Fund's manager is supported by an
experienced credit analysis team that utilizes extensive research to identify
what they believe to be undervalued issues with less risk potential. Over the
period covered by this report,the Fund continues to focus on high-quality issues
and remains broadly diversified across various sectors.
As of September 30,1998,82% of the Fund's holdings were rated investment grade
(BBB/Baa and higher) by either Standard and Poor's Ratings Services or Moody's
Investors Service Inc.,and just over 57% of the Fund's portfolio was invested in
AAA-rated bonds,the highest rating. (Standard and Poor's Ratings Services and
Moody's Investors Service are two major credit reporting and bond rating
agencies.) The Fund's largest holdings are concentrated in hospital bonds
(24.2%),education bonds (16.0%) and utility bonds (13.9%). The Fund's average
weighted maturity was 20.4 years as of September 30,1998.
Municipal Bond Market Outlook
Going forward,we are optimistic about the attractiveness of the tax-exempt bond
market. We expect that the Fed will lower interest rates at least one more time
in 1998,and if the U.S. economy remains sluggish,we believe that the Fed will
lower rates again in the first half of 1999. We expect a moderately expanding
U.S. economy while the Fed continues to monitor the U.S. economy closely for
signs of either inflationary or deflationary pressures. While the ultimate
effect of the worsening Asian and Russian crisis remains unknown,municipal bonds
are yielding almost as much as U.S. Treasurys,giving investors tax-exempt income
with a competitive yield. At current levels,we believe that tax-exempt
securities represent good relative values.
In closing,thank you for investing in the Smith Barney New Jersey Municipals
Fund. We look forward to continuing to help you pursue your financial goals.
Sincerely,
/s/ Heath B. McLendon /s/ Lawrence T. McDermott
Heath B. McLendon Lawrence T. McDermott
Chairman Vice President and
Investment Officer
October 26, 1998
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Smith Barney New Jersey Municipals Fund Inc. 3
<PAGE>
================================================================================
Historical Performance -- Class A Shares
================================================================================
<TABLE>
<CAPTION>
Net Asset Value
-----------------------
Beginning End Income Capital Gain Return Total
Period Ended of Period of Period Dividends Distributions of Capital Returns(1)
=============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
9/30/98 $13.44 $13.71 $0.35 $0.00 $0.00 4.65%+
- -------------------------------------------------------------------------------------------------------------
3/31/98 12.92 13.44 0.71 0.06 0.00 10.20
- -------------------------------------------------------------------------------------------------------------
3/31/97 12.88 12.92 0.68 0.00 0.00 5.74
- -------------------------------------------------------------------------------------------------------------
3/31/96 12.62 12.88 0.70 0.00 0.00 7.77
- -------------------------------------------------------------------------------------------------------------
3/31/95 12.55 12.62 0.70 0.00 0.00 6.37
- -------------------------------------------------------------------------------------------------------------
3/31/94 13.16 12.55 0.70 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 $7.83 $0.57 $0.06
=============================================================================================================
<CAPTION>
================================================================================
Historical Performance -- Class B Shares
================================================================================
Net Asset Value
-----------------------
Beginning End Income Capital Gain Return Total
Period Ended of Period of Period Dividends Distributions of Capital Returns(1)
=============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
9/30/98 $13.44 $13.70 $0.31 $0.00 $0.00 4.31%+
- -------------------------------------------------------------------------------------------------------------
3/31/98 12.92 13.44 0.64 0.06 0.00 9.66
- -------------------------------------------------------------------------------------------------------------
3/31/97 12.88 12.92 0.62 0.00 0.00 5.23
- -------------------------------------------------------------------------------------------------------------
3/31/96 12.62 12.88 0.63 0.00 0.00 7.20
- -------------------------------------------------------------------------------------------------------------
3/31/95 12.55 12.62 0.62 0.00 0.00 5.76
- -------------------------------------------------------------------------------------------------------------
3/31/94 13.16 12.55 0.63 0.15 0.00 1.15
- -------------------------------------------------------------------------------------------------------------
Inception(*) - 3/31/93 12.75 13.16 0.27 0.14 0.01 6.60+
=============================================================================================================
Total $3.72 $0.35 $0.01
=============================================================================================================
<CAPTION>
================================================================================
Historical Performance -- Class L Shares(2)
================================================================================
Net Asset Value
-----------------------
Beginning End Income Capital Gain Return Total
Period Ended of Period of Period Dividends Distributions of Capital Returns(1)
=============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
9/30/98 $13.43 $13.70 $0.30 $0.00 $0.00 4.33%+
- -------------------------------------------------------------------------------------------------------------
3/31/98 12.92 13.43 0.63 0.06 0.00 9.50
- -------------------------------------------------------------------------------------------------------------
3/31/97 12.88 12.92 0.61 0.00 0.00 5.17
- -------------------------------------------------------------------------------------------------------------
3/31/96 12.62 12.88 0.63 0.00 0.00 7.17
- -------------------------------------------------------------------------------------------------------------
Inception(*) - 3/31/95 11.86 12.62 0.18 0.00 0.00 8.01+
=============================================================================================================
Total $2.35 $0.06 $0.00
=============================================================================================================
</TABLE>
It is the Fund's policy to distribute dividends monthly and capital
gains, if any, annually.
- --------------------------------------------------------------------------------
4 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Average Annual Total Return
================================================================================
<TABLE>
<CAPTION>
Without Sales Charge(1)
-------------------------------------
Class A Class B Class L(2)
================================================================================
<S> <C> <C> <C>
Six Months Ended 9/30/98+ 4.65% 4.31% 4.33%
- --------------------------------------------------------------------------------
Year Ended 9/30/98 8.57 7.95 7.99
- --------------------------------------------------------------------------------
Five Years Ended 9/30/98 5.79 5.23 N/A
- --------------------------------------------------------------------------------
Ten Years Ended 9/30/98 8.23 N/A N/A
- --------------------------------------------------------------------------------
Inception* through 9/30/98 8.53 6.76 9.07
================================================================================
<CAPTION>
Without Sales Charge(3)
-------------------------------------
Class A Class B Class L(2)
================================================================================
<S> <C> <C> <C>
Six Months Ended 9/30/98+ 0.46% (0.19)% 2.25%
- --------------------------------------------------------------------------------
Year Ended 9/30/98 4.21 3.45 5.95
- --------------------------------------------------------------------------------
Five Years Ended 9/30/98 4.94 5.07 N/A
- --------------------------------------------------------------------------------
Ten Years Ended 9/30/98 7.79 N/A N/A
- --------------------------------------------------------------------------------
Inception* through 9/30/98 8.10 6.76 8.78
================================================================================
<CAPTION>
================================================================================
Cumulative Total Return
================================================================================
Without Sales Charge(1)
================================================================================
<S> <C>
Class A (9/30/88* through 9/30/98) 120.55%
- --------------------------------------------------------------------------------
Class B (Inception* through 9/30/98) 47.15
- --------------------------------------------------------------------------------
Class L (Inception* through 9/30/98)(2) 39.09
================================================================================
</TABLE>
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to
Class B and L shares.
(2) On June 12, 1998, Class C shares were renamed Class L shares.
(3) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 4.00% and 1.00%,
respectively. Class B shares reflect the deduction of a 4.50% CDSC,
which applies if shares are redeemed within one year from purchase. This
CDSC declines by 0.50% the first year after purchase and thereafter by
1.00% per year until no CDSC is incurred. Class L shares 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 L 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.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 5
<PAGE>
================================================================================
Historical Performance (unaudited)
================================================================================
Growth of $10,000 Invested in Class A Shares of the
Smith Barney New Jersey Municipals Fund Inc.
vs. Lehman Brothers Municipal Bond Index+
September 1988 -- September 1998
[GRAPH APPEARS HERE]
Smith Barney
New Jersey Lehman Bros. Municipal
Municipals Fund Inc Bond Index
9/30/88 9600 10000
3/89 9889 10254
3/90 10840 11336
3/91 11912 12381
3/92 13128 13618
3/93 14899 15322
3/94 15146 15678
3/95 16111 16844
3/96 17362 18256
3/97 18360 19250
3/98 20232 21312
9/30/98 21172 22301
+ Hypothetical illustration of $10,000 invested in Class A shares on September
30, 1988, assuming deduction of the maximum 4.00% sales charge at the time of
investment and reinvestment of dividends and capital gains, if any, at net
asset value through September 30, 1998. The Lehman Brothers Municipal Bond
Index is a broad-based, total return index comprised of investment grade,
fixed rate municipal bonds selected from issues larger than $50 million dated
since January 1991. 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 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Portfolio Highlights (unaudited) September 30, 1998
================================================================================
Portfolio Breakdown
- ---------------------------------------------
Water & Sewer 1.5%
- ---------------------------------------------
Education 16.0%
- ---------------------------------------------
Industrial Development 13.4%
- ---------------------------------------------
Pollution Control 3.2%
- ---------------------------------------------
Housing 5.9%
- ---------------------------------------------
Transportation 6.0%
- ---------------------------------------------
Solid Waste 1.7%
- ---------------------------------------------
Life Care 0.8%
- ---------------------------------------------
General Obligation 8.5%
- ---------------------------------------------
Hospital 24.2%
- ---------------------------------------------
Utilities 13.9%
- ---------------------------------------------
Other 4.9%
- ---------------------------------------------
Summary of Investments by Combined Ratings
Standard & Percentage of
Moody's and/or Poor's Total Investments
- --------------------------------------------------------------------------------
Aaa AAA 57.5%
Aa AA 8.0
A A 2.6
Baa BBB 14.1
Ba BB 4.1
B B 0.8
VMIG 1 A-1 0.6
NR NR 12.3
-----
100.0%
=====
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 7
<PAGE>
================================================================================
Schedule of Investments (unaudited) September 30, 1998
================================================================================
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
======================================================================================================
<S> <C> <C>
Education -- 16.0%
East Orange Board of Education, COP, FSA-Insured:
$ 1,300,000 AAA 5.000% due 2/1/14 $1,332,500
1,400,000 AAA Zero coupon bond due 8/1/14 666,750
1,000,000 AAA Zero coupon bond due 8/1/15 451,250
1,845,000 AAA Zero coupon bond due 2/1/19 689,569
2,845,000 AAA Zero coupon bond due 2/1/23 860,612
1,000,000 AAA Zero coupon bond due 8/1/23 296,250
2,845,000 AAA Zero coupon bond due 2/1/27 707,693
750,000 AAA Hamilton Township Board of Education, FSA-Insured,
7.000% due 12/15/15 820,312
500,000 AAA Jersey City, (Hudson County), Fiscal Year Adjustment
Bonds, Series 1991 B, FSA-Insured,
8.400% due 5/15/06 645,000
650,000 AAA Lakewood Township School District, AMBAC-Insured,
Bank Qualified, Series 92, 6.250% due 2/15/11 771,063
Montgomery Township Board of Education,
COP, MBIA-Insured:
1,000,000 Aaa* 4.750% due 9/1/18 980,000
1,100,000 Aaa* 4.875% due 9/1/23 1,093,125
New Jersey EDR:
1,000,000 AAA Educational Testing Service, MBIA-Insured, Series E,
6.000% due 5/15/25 1,111,250
575,000 Aa3* Princeton Montessori Society, LOC, Banque National
De Paris, Series S, 6.500% due 6/1/12 615,969
New Jersey State Educational Facilities,
Financing Authority Revenue:
1,000,000 NR Caldwell College, Series A, 7.250% due 7/1/25 1,087,500
2,700,000 NR Fairleigh Dickinson University, Series C,
6.625% due 7/1/23 2,821,500
Monmouth University, Series D:
425,000 BBB 5.125% due 7/1/18 426,594
550,000 BBB 5.125% due 7/1/24 549,313
3,000,000 AAA Princeton Theological, Series A, 5.000% due 7/1/22 3,041,250
4,365,000 AAA Richard Stockton College, AMBAC-Insured, Series F,
5.400% due 7/1/21 4,550,513
1,250,000 AAA Seton Hall University Project, AMBAC-Insured,
Series F, 5.000% due 7/1/21 1,275,000
St. Peters College, Series B:
1,000,000 BBB 5.375% due 7/1/18 1,021,250
2,000,000 BBB 5.500% due 7/1/27 2,055,000
Stevens Institute of Technology, Series I:
1,000,000 A 5.000% due 7/1/28 1,003,750
1,000,000 A 5.000% due 7/1/28 1,000,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedule of Investments (unaudited) (continued) Septemer 30, 1998
================================================================================
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
=============================================================================================================
<S> <C> <C> <C>
Education -- 16.0% (continued)
$ 2,385,000 AAA New Jersey State Higher Educational Assistance
Authority, Student Loan Revenue, New Jersey Class
Loan Program, Series A, MBIA-Insured,
5.800% due 6/1/16(a) $2,534,063
2,200,000 AAA Perth Amboy, N.J. Board of Education, FSA-Insured,
5.000% due 12/15/17 2,233,000
Rutgers State University:
600,000 AA Refunding, Series 92A, 6.400% due 5/1/13 713,250
Series U:
1,810,000 AA 5.000% due 5/1/20 1,828,100
1,905,000 AA 5.000% due 5/1/21 1,924,050
- -------------------------------------------------------------------------------------------------------------
39,105,476
- -------------------------------------------------------------------------------------------------------------
General Obligation-- 8.5%
2,500,000 AAA Atlantic County COP, Public Facilities Lease Agreements,
FGIC-Insured, 7.400% due 3/1/09(b) 3,159,375
1,340,000 AAA Bayonne GO, FGIC-Insured, 6.125% due 5/1/14 1,477,350
665,000 AAA Belvedere GO, AMBAC-Insured, 7.300% due 12/1/14 705,731
880,000 AAA Greenwich Township Board of Education, FSA-Insured,
5.000% due 1/15/17 889,900
200,000 AAA Hudson County GO, FGIC-Insured, 6.550% due 7/1/10 243,000
1,000,000 AAA Lumberton Township School District, COP, MBIA-Insured,
6.100% due 10/1/13 1,083,750
Morris Township GO:
550,000 AA 6.550% due 7/1/09 668,937
550,000 AA 6.550% due 7/1/10 670,312
500,000 AA 6.550% due 7/1/11 613,125
2,500,000 AA+ New Jersey State GO, Series D,
8.000% due 2/15/07 3,206,250
1,500,000 AAA North Bergen Township Capital Appreciation, FSA-Insured,
8.000% due 8/15/07 1,944,375
Parsippany-Troy Hills Township GO, MBIA-Insured:
550,000 AAA 5.000% due 12/1/16 564,438
565,000 AAA 5.000% due 12/1/17 572,063
Randolph Township School District, GO, FGIC-Insured:
1,000,000 AAA 5.000% due 8/1/17 1,011,250
1,000,000 AAA 5.000% due 8/1/18 1,008,750
500,000 AAA South Amboy GO, Unlimited, MBIA-Insured,
6.375% due 12/1/10 553,125
854,000 AAA Weehawken Township GO, FSA-Insured,
6.350% due 7/1/07 926,590
West Windsor/Plainsboro GO, Regional School District:
180,000 AA 6.750% due 4/1/06 212,625
490,000 AA 6.750% due 4/1/07 586,162
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 9
<PAGE>
Schedule of Investments (unaudited) (continued) September 30, 1998
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
============================================================================================================
<S> <C> <C> <C>
General Obligation -- 8.5% (continued)
$ 435,000 AA 6.800% due 4/1/08 $ 526,894
170,000 AA 6.800% due 4/1/09 209,525
- ------------------------------------------------------------------------------------------------------------
20,833,527
- ------------------------------------------------------------------------------------------------------------
Hospital -- 24.2%
Camden County Improvement Authority Revenue:
3,775,000 Baa2* Health Care Redevelopment Project, (Cooper Health),
5.875% due 2/15/15 3,992,062
Health Systems, Catholic Health East, Series B,
AMBAC-Insured:
1,000,000 AAA 5.000% due 11/15/18 1,013,750
750,000 AAA 5.000% due 11/15/28 755,625
2,500,000 AAA New Jersey EDA, Nursing Home Revenue, RWJ Health
Care Corp., FSA-Insured, 6.500% due 7/1/24 2,796,875
New Jersey Health Care Facilities Financing
Authority Revenue:
Bayonne Hospital Obligation Group, FSA-Insured:
1,300,000 Aaa* 4.750% due 7/1/18 1,301,625
2,250,000 Aaa* 4.750% due 7/1/27 2,224,688
Burdett Tomlin Memorial Hospital, Series D,
FGIC-Insured:
1,400,000 AAA 6.500% due 7/1/12 1,517,250
850,000 AAA 6.500% due 7/1/21 916,938
2,500,000 AAA Cathedral Health Services Inc., MBIA/FHA-Insured,
5.250% due 8/1/21 2,575,000
Columbus Hospital, Series A:
600,000 Ba2* 7.200% due 7/1/01 612,150
1,000,000 Ba2* 7.500% due 7/1/21 1,048,750
2,300,000 Baa2* Deborah Heart & Lung Center, 6.300% due 7/1/23 2,466,750
750,000 BBB+ East Orange General Hospital, Series B,
7.750% due 7/1/20 798,750
Hackensack University Medical Center, Series A,
MBIA-Insured:
1,500,000 AAA 5.000% due 1/1/18 1,518,750
3,500,000 AAA 5.000% due 1/1/21 3,526,250
1,250,000 AAA 5.200% due 1/1/28 1,278,125
4,500,000 AAA Irvington General Hospital, FHA-Insured,
6.375% due 8/1/15 4,995,000
Medical Center at Princeton, AMBAC-Insured:
1,500,000 AAA 5.000% due 7/1/23 1,524,375
1,000,000 AAA 5.000% due 7/1/28 1,012,500
825,000 AAA Medical Center of Ocean County, Series C,
FSA-Insured, 6.750% due 7/1/20 895,125
825,000 AAA Muhlenberg Regional Medical Center, Series A,
AMBAC-Insured, 8.000% due 7/1/18 850,426
</TABLE>
See Notes to Financial Statements
- --------------------------------------------------------------------------------
10 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedule of Investments (unaudited) (continued) September 30, 1998
================================================================================
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
=============================================================================================================
<S> <C> <C> <C>
Hospital -- 24.2% (continued)
$ 2,750,000 AAA Newark Beth Israel Medical Center, FSA-Insured,
6.000% due 7/1/24 $ 3,000,938
370,000 Ba3* Newcomb Medical Center, Series A,
7.875% due 7/1/03 391,738
1,000,000 BBB+ Pascack Valley Hospital, Series 91,
6.700% due 7/1/11 1,068,750
3,700,000 AAA Raritan Bay Medical Center, MBIA-Insured,
7.250% due 7/1/27 3,945,125
1,150,000 AAA Somerset Medical Center, Series A, FGIC-Insured,
5.200% due 7/1/24 1,170,125
2,000,000 Baa1* Southern Ocean County Hospital, 6.250% due 7/1/23 2,157,500
2,000,000 BBB St. Elizabeth's Hospital, 6.000% due 7/1/14 2,155,000
2,750,000 BBB+ St. Mary Hospital, 5.875% due 7/1/12 2,870,313
2,500,000 Aaa* St. Barnabas Medical Center, Series A, MBIA-Insured,
5.000% due 7/1/23 2,515,625
640,000 AAA Wayne General Hospital, Series B, FHA-Insured,
5.750% due 8/1/11 684,000
1,500,000 AAA University Medicine & Dentistry, Series A, MBIA-Insured,
5.000% due 9/1/22 1,516,875
- -------------------------------------------------------------------------------------------------------------
59,096,753
- -------------------------------------------------------------------------------------------------------------
Housing: Multi-Family -- 2.5%
650,000 BBB+ Essex County Improvement Authority,
Lease Revenue Bonds, 6.600% due 4/1/14 709,313
1,500,000 AAA Newark Housing Financing Corp., Mortgage Revenue,
Refunding, Manor Apartments, Series A, FHA-Insured,
7.500% due 2/15/24 1,661,250
New Jersey State Housing & Mortgage Finance Agency,
Multi-Family Housing Revenue:
2,550,000 AAA Presidential Plaza, Series 1, FHA-Insured,
7.000% due 5/1/30(b) 2,785,875
1,000,000 AA Regency Park Project, GNMA Collateralized,
Series H, 7.700% due 11/1/30 1,030,900
- -------------------------------------------------------------------------------------------------------------
6,187,338
- -------------------------------------------------------------------------------------------------------------
Housing: Single-Family -- 3.4%
New Jersey EDA Revenue, First Mortgage,
Keswick Pines:
2,885,000 NR 5.700% due 1/1/18 2,903,031
2,800,000 NR 5.750% due 1/1/24 2,807,000
1,940,000 AAA New Jersey State Housing & Mortgage Finance Agency
Revenue, MBIA-Insured, Series R,
5.750% due 4/1/17(b) 2,080,650
425,000 AAA Virgin Islands HFA, Single-Family Mortgage,
GNMA-Collateralized, 6.500% due 3/1/25(a) 456,344
- -------------------------------------------------------------------------------------------------------------
8,247,025
- -------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 11
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) September 30, 1998
================================================================================
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
==============================================================================================================
<S> <C> <C> <C>
Industrial Development -- 13.4%
New Jersey EDA, EDR:
$ 970,000 Aa3* Economic Growth Bonds, LOC, Banque National
De Paris, 6.550% due 12/1/07(a) $ 1,041,537
1,500,000 BB+ Electric Revenue, Vineland Cogeneration LP,
7.875% due 6/1/19(a) 1,655,625
1,000,000 AAA Miscellaneous Revenue, State Contract, FSA-Insured,
6.000% due 3/15/21 1,073,750
1,000,000 A+ Nursing Home Revenue, Morris Hall-St. Lawerence,
LOC, Corestates First Bank, 6.250% due 4/1/25 1,075,000
1,495,000 BBB+ Preston Trucking Co., 6.500% due 9/1/14 1,648,238
1,040,000 Aaa* Series L, 7.100% due 12/1/11(a) 1,128,400
1,500,000 BBB+ Terminal Revenue, GATX Terminal Corp., Series 1994,
7.300% due 9/1/19 1,728,750
1,000,000 NR Trane Division, 1990 Project, 9.500% due 9/1/00 1,076,250
1,500,000 NR Zirbser-Greenbriar, 7.375% due 7/15/03 1,618,125
New Jersey EDA, Revenue Refunding, Harrogate Inc.,
Series A:
2,000,000 BBB 5.750% due 12/1/16 2,067,500
1,500,000 BBB 5.875% due 12/1/26 1,554,375
New Jersey EDA, First Mortgage:
Cadbury Corp. Project, ACA-Insured, Series A:
750,000 A 5.500% due 7/1/18 780,000
1,250,000 A 5.500% due 7/1/28 1,296,875
Fellowship Village, Series A:
2,000,000 BBB- 5.500% due 1/1/18 2,005,000
2,500,000 BBB- 5.500% due 1/1/25 2,493,750
1,600,000 NR New Jersey EDA, Industrial Revenue, State Plaza Park
and Ride LP, 6.625% due 7/1/03(a) 1,686,000
1,000,000 AAA New Jersey EDA, Natural Gas Facilities Revenue,
NUI Corp., Series A, AMBAC-Insured,
6.350% due 10/1/22 1,107,500
6,390,000 Ba2* New Jersey EDA, Special Facility Revenue, (Continental
Airlines Inc. Project), 5.500% due 4/1/28(a) 6,374,025
1,200,000 A-1+ Puerto Rico Commonwealth Government Development,
MBIA-Insured, 3.125% due 12/1/15 1,200,000
- --------------------------------------------------------------------------------------------------------------
32,610,700
- --------------------------------------------------------------------------------------------------------------
Life Care -- 0.8%
1,000,000 Aaa* New Jersey EDA, EDR, Eagle Rock Convalescent, Inc.,
GNMA-Collateralized, 7.375% due 12/20/06 1,090,000
765,000 AAA New Jersey Health Care Facilities Financing Authority
Revenue, Spectrum for the Living, FHA-Insured,
6.500% due 2/1/22 827,156
- --------------------------------------------------------------------------------------------------------------
1,917,156
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) September 30, 1998
================================================================================
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
===============================================================================================================
<S> <C> <C> <C>
Miscellaneous -- 4.9%
$ 615,000 A Atlantic City COP, Series 1991, (Public Facilities Lease
Agreements Atlantic City Project), 8.875% due 1/15/13 $ 877,912
1,000,000 AAA Essex County Improvement Authority Parking Facilities
Revenue, AMBAC-Insured, 5.000% due 10/1/17 1,020,000
240,000 A+ The Hudson County Improvement Authority,
(Essential Purpose Pooled Governmental Loan Project),
Series 1986, 7.600% due 8/1/25 259,500
1,750,000 AAA Middlesex County COP, MBIA-Insured,
5.000% due 2/15/19 1,769,687
1,515,000 Aaa* Morristown Parking Authority, FSA-Insured,
5.150% due 8/1/25 1,539,619
1,000,000 AAA New Brunswick Parking Authority Revenue,
City Guaranteed Parking, Series A, FGIC-Insured,
6.500% due 9/1/19 1,096,250
New Jersey EDA:
480,000 NR EDR, National Association of Accountants,
7.650% due 7/1/09 512,400
400,000 VMIG1* Natural Gas Facilities Revenue, NUI Corp. Project,
AMBAC-Insured, Series A, 3.000% due 6/1/26(c) 400,000
1,000,000 NR Waste Paper Recycling Revenue, (Marcal Paper Project),
8.500% due 2/1/10(a) 1,193,750
3,000,000 NR New Jersey Sports and Expo Authority, Monmouth Park,
Refunding, Series A, 8.000% due 1/1/25 3,405,000
- ---------------------------------------------------------------------------------------------------------------
12,074,118
- ---------------------------------------------------------------------------------------------------------------
Pollution Control -- 3.2%
1,950,000 B1* Atlantic County Utilities Authority, Solid Waste Revenue,
7.125% due 3/1/16 1,998,750
Middlesex County, Pollution Control Authority Financing
Revenue, Amerada Hess Corp.:
1,000,000 NR 7.875% due 6/1/22 1,163,750
2,000,000 NR 6.875% due 12/1/22(b) 2,167,500
2,245,000 NR New Jersey EDA, Sewer Facility, Atlantic City Sewer Co.,
7.250% due 12/1/11(a) 2,472,306
- ---------------------------------------------------------------------------------------------------------------
7,802,306
- ---------------------------------------------------------------------------------------------------------------
Solid Waste -- 1.7%
2,500,000 Aa2* Mercer County Improvement Authority, County
Guaranteed Solid Waste Revenue, 5.750% due 9/15/16 2,737,500
1,250,000 Aa2* New Jersey EDA, Solid Waste Revenue,
Garden State Paper Co., 7.125% due 4/1/22 1,326,563
- ---------------------------------------------------------------------------------------------------------------
4,064,063
- ---------------------------------------------------------------------------------------------------------------
Transportation -- 6.0%
500,000 Aaa* Delaware River Port Authority, PA & NJ Delaware River
Bridges, Revenue Refunding, AMBAC-Insured,
7.375% due 1/1/07 514,740
</TABLE>
See Notes to Financial Statements
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 13
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) September 30, 1998
================================================================================
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
==============================================================================================================
<S> <C> <C> <C>
Transportation -- 6.0% (continued)
$ 800,000 Baa1* Essex County Improvement Authority, Airport Project
Revenue, Series 92, 6.800% due 11/1/21(a) $ 850,000
1,000,000 Baa1* New Jersey EDA Revenue, (American Airlines Inc. Project),
7.100% due 11/1/31(a) 1,092,500
Port Authority of New York & New Jersey:
1,500,000 AA- 67th Series, 6.875% due 1/1/25 1,567,500
Special Obligation Revenue:
3,500,000 NR 5th Installment, 6.750% due 10/1/19(a) 3,941,875
2,000,000 AAA 96th Series, FGIC-Insured, 6.600% due 10/1/23(a) 2,247,500
10,000,000 AAA Puerto Rico Commonwealth Highway & Transportation
Authority, Transportation Revenue, Series A,
AMBAC-Insured, zero coupon bond due 7/1/16 4,400,000
- --------------------------------------------------------------------------------------------------------------
14,614,115
- --------------------------------------------------------------------------------------------------------------
Utilities -- 13.9%
700,000 Baa1* Beachwood Sewer Authority Revenue, Jr. Lien,
6.500% due 12/1/12 761,250
1,000,000 AAA Bordentown Sewerage Authority Revenue, Series C,
MBIA-Insured, 6.900% due 12/1/16 1,082,500
Camden County Municipal Utilities Authority,
Sewer Revenue, FGIC-Insured:
1,500,000 AAA 5.250% due 7/15/16 1,565,625
1,000,000 AAA 5.250% due 7/15/17 1,040,000
2,500,000 AAA Hamilton Township, Atlantic County Municipal Utilities
Authority, FGIC-Insured, 5.000% due 8/15/17 2,546,875
1,385,000 AAA Kearny Municipal Utilities Authority Revenue,
FGIC-Insured, 7.300% due 11/15/18 1,883,600
1,000,000 AAA Middlesex County Utilities Authority, Sewer Revenue,
Series A, MBIA-Insured, 6.250% due 8/15/10 1,191,250
1,000,000 AAA New Jersey EDA, Natural Gas Facilities Revenue,
Series A, AMBAC-Insured, 6.250% due 8/1/24 1,100,000
750,000 AAA Old Bridge Township Municipal Utilities Authority Revenue,
FGIC-Insured, 6.400% due 11/1/09 833,438
1,000,000 AAA Southeast Morris County Municipal Utilities Authority, Water
Revenue, Series A, FGIC-Insured, 6.500% due 1/1/11 1,072,500
Union County Utility Authority:
Sr. Lease Obligation, Ogden Martin, Series A:
4,000,000 AAA 5.000% due 6/1/23 4,010,000
5,000,000 AAA 5.350% due 6/1/23 5,143,750
County Deficiency, Series A1:
1,010,000 Aaa* Zero coupon bond due 6/15/13 505,000
1,010,000 Aaa* Zero coupon bond due 6/15/14 482,275
1,010,000 Aaa* Zero coupon bond due 6/15/15 454,500
1,010,000 Aaa* Zero coupon bond due 6/15/16 433,037
1,010,000 Aaa* Zero coupon bond due 6/15/17 409,050
1,010,000 Aaa* Zero coupon bond due 6/15/18 388,850
</TABLE>
See Notes to Financial Statements
- --------------------------------------------------------------------------------
14 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Schedule of Investments (unaudited)(continued) September 30, 1998
================================================================================
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
================================================================================================
<S> <C> <C> <C>
Utilities -- 13.9% (continued)
County Deficiency, Series A2:
$ 2,500,000 Aaa* 5.000% due 6/15/28 $2,503,125
1,850,000 Aaa* Zero coupon bond due 6/15/13 925,000
1,850,000 Aaa* Zero coupon bond due 6/15/14 883,375
1,850,000 Aaa* Zero coupon bond due 6/15/15 832,500
1,850,000 Aaa* Zero coupon bond due 6/15/16 793,187
1,850,000 Aaa* Zero coupon bond due 6/15/17 749,250
1,850,000 Aaa* Zero coupon bond due 6/15/18 712,250
County Deficiency, Series C1:
275,000 Aaa* Zero coupon bond due 6/15/13 138,531
275,000 Aaa* Zero coupon bond due 6/15/14 132,344
275,000 Aaa* Zero coupon bond due 6/15/15 124,781
280,000 Aaa* Zero coupon bond due 6/15/16 121,100
275,000 Aaa* Zero coupon bond due 6/15/17 112,406
275,000 Aaa* Zero coupon bond due 6/15/18 106,906
County Deficiency, Series C2:
310,000 Aaa* Zero coupon bond due 6/15/13 156,163
310,000 Aaa* Zero coupon bond due 6/15/14 149,187
310,000 Aaa* Zero coupon bond due 6/15/15 140,663
305,000 Aaa* Zero coupon bond due 6/15/16 131,912
310,000 Aaa* Zero coupon bond due 6/15/17 126,713
310,000 Aaa* Zero coupon bond due 6/15/18 120,512
- ------------------------------------------------------------------------------------------------
33,863,405
- ------------------------------------------------------------------------------------------------
Water & Sewer -- 1.5%
New Jersey EDA:
1,610,000 AAA Middlesex County Water Revenue, MBIA-Insured,
5.250% due 2/1/29(a) 1,646,225
1,000,000 NR Water Facilities Revenue, (American Water Co. Inc.
Project), Series 1991, 7.400% due 11/1/01(a) 1,066,250
Washington Township, New Jersey Municipal Utilities
Authority, Water & Sewer Revenue, Series A,
FGIC-Insured:
1,055,000 Aaa* Zero coupon bond due 12/15/20 369,250
1,055,000 Aaa* Zero coupon bond due 12/15/21 348,150
1,055,000 Aaa* Zero coupon bond due 12/15/26 272,981
- ------------------------------------------------------------------------------------------------
3,702,856
- ------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost $227,786,070**) $244,118,838
================================================================================================
</TABLE>
(a) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(b) Security segregated by Custodian for open purchase commitment.
(c) Variable rate obligation payable at par on demand on no more than seven
days notice.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 16 and 17 for definitions of ratings and certain security
descriptions.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 15
<PAGE>
================================================================================
Bonds Ratings (unaudited
================================================================================
All ratings are by Standard & Poor's Rating Services ("Standard & Poor's"),
except that those identified by an asterisk (*) are rated by Moody's Investors
Service Inc. ("Moody's"). The definitions of the applicable rating symbols are
set forth below:
Standard & Poor's -- Ratings from "AA" to "BB" may be modified by the addition
of a plus (+) or minus (-) sign to show relative standings within the major
rating categories.
AAA -- Bonds rated "AAA" have the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and
repay principal and differ from the highest rated 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.
BB -- Bonds rated "BB"have less near-term vulnerability to default than
other speculative issues. However, they face major ongoing
uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to inadequate capacity to meet timely
interest and principal payments.
Moody's -- Numerical modifiers 1, 2 and 3 may be applied to each generic rating
from "Aa" to "B", where 1 is the highest and 3 the lowest ranking within its
generic category.
Aaa -- Bonds rated "Aaa" are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to
as "gilt edge". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can
be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa -- Bonds rated "Aa" are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large 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 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 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.
Ba -- Bonds rated "Ba" are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate thereby not well
safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B -- Bonds rated "B" generally lack characteristics of desirable
investments. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of
time may be small.
NR -- Indicates that the bond is not rated by either Standard & Poor's or
Moody's.
- --------------------------------------------------------------------------------
16 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Short-Term Security Ratings (unaudited)
================================================================================
SP-1 -- Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined to
possess overwhelming safety characteristics are denoted with a plus
(+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate
demand obligation (VRDO) rating indicating that the degree of safety
regarding timely payment is either overwhelming or very strong; those
issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign.
VMIG 1 -- Moody's highest rating for issues having a demand feature -- VRDO.
P-1 -- Moody's highest rating for commercial paper and for VRDO prior to the
advent of the VMIG 1 rating.
================================================================================
Security Descriptions (unaudited)
================================================================================
ABAG -- Association of Bay Area Governments
ACA -- American Credit Association
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
EDR -- Economic Development Revenue
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 -- Financing Security Assurance
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation Bonds
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
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 17
<PAGE>
================================================================================
Statement of Assets and Liabilities (unaudited) September 30, 1998
================================================================================
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (Cost-- $227,786,070) $244,118,838
Receivable for Fund shares sold 235,287
Receivable for securities sold 117,224
Interest receivable 3,388,469
- -----------------------------------------------------------------------------------
Total Assets 247,859,818
- -----------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 3,014,366
Investment advisory fees payable 59,403
Administration fees payable 43,171
Payable to bank 32,500
Distribution fees payable 22,434
Accrued expenses 63,225
- -----------------------------------------------------------------------------------
Total Liabilities 3,235,099
- -----------------------------------------------------------------------------------
Total Net Assets $244,624,719
===================================================================================
NET ASSETS:
Par value of capital shares $ 17,844
Capital paid in excess of par value 224,812,429
Overdistributed net investment income (156,767)
Accumulated net realized gain from security transactions 3,618,445
Net unrealized appreciation of investments 16,332,768
- -----------------------------------------------------------------------------------
Total Net Assets $244,624,719
===================================================================================
Shares Outstanding:
Class A 12,307,397
--------------------------------------------------------------------------------
Class B 4,986,069
--------------------------------------------------------------------------------
Class L 551,126
--------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $13.71
--------------------------------------------------------------------------------
Class B(*) $13.70
--------------------------------------------------------------------------------
Class L(**) $13.70
--------------------------------------------------------------------------------
Maximum Public Offering Price Per Share
Class A (net asset value plus 4.17% of net asset value per share) $14.28
--------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $13.84
===================================================================================
</TABLE>
* Redemption price is NAV of Class B shares reduced by a 4.50% CDSC if
shares are redeemed within one year from purchase (See Note 4).
** Redemption price is NAV of Class L shares reduced by a 1.00% CDSC if
shares are redeemed within the first year of purchase.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Statement of Operations (unaudited)
================================================================================
For the Six Months Ended September 30, 1998
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Interest $ 6,725,045
- -----------------------------------------------------------------------------------
<S> <C>
EXPENSES:
Distribution fees (Note 4) 362,200
Investment advisory fees (Note 4) 353,843
Administration fees (Note 4) 235,895
Shareholder and system servicing fees 43,288
Shareholder communications 20,406
Audit and legal 19,554
Registration fees 10,028
Pricing service fees 9,525
Directors' fees 7,271
Custody 6,369
Other 3,761
- -----------------------------------------------------------------------------------
Total Expenses 1,072,140
- -----------------------------------------------------------------------------------
Net Investment Income 5,652,905
- -----------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTE 5):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 74,333,553
Cost of securities sold 72,171,249
- -----------------------------------------------------------------------------------
Net Realized Gain 2,162,304
- -----------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 13,623,222
End of period 16,332,768
- -----------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 2,709,546
- -----------------------------------------------------------------------------------
Net Gain on Investments 4,871,850
- -----------------------------------------------------------------------------------
Increase in Net Assets From Operations $10,524,755
===================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 19
</TABLE>
<PAGE>
================================================================================
Statements of Changes in Net Assets
================================================================================
For the Six Months Ended September 30, 1998 (unaudited)
and the Year Ended March 31, 1998
<TABLE>
<CAPTION>
September 30, March 31,
=================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 5,652,905 $ 11,227,379
Net realized gain 2,162,304 3,094,901
Increase in net unrealized appreciation 2,709,546 6,771,520
- ---------------------------------------------------------------------------------
Increase in Net Assets From Operations 10,524,755 21,093,800
- ---------------------------------------------------------------------------------
DISTRIBUTION TO SHAREHOLDERS
FROM (NOTE 3):
Net investment income (5,844,371) (11,457,998)
Net realized gain -- (1,015,534)
- ---------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (5,844,371) (12,473,532)
- ---------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 17,089,579 26,651,401
Net asset value of shares issued for
reinvestment of dividends 3,415,777 7,471,348
Cost of shares reacquired (10,862,012) (27,799,598)
- ---------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 9,643,344 6,323,151
- ---------------------------------------------------------------------------------
Increase in Net Assets 14,323,728 14,943,419
NET ASSETS:
Beginning of period 230,300,991 215,357,572
- ---------------------------------------------------------------------------------
End of period/*/ $244,624,719 $230,300,991
=================================================================================
/*/ Includes undistributed (overdistributed) net
investment income of: $(156,767) $34,699
=================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
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 trade date; (b) securities are valued
at the mean between the quoted bid and ask prices provided 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)
securities for which market quotations are not available will be valued in good
faith at fair value by or under the direction of the Board of Directors; (d)
securities maturing within 60 days are valued at cost plus accreted discount or
minus amortized premium, which approximates value; (e) gains or losses on the
sale of securities are calculated by using the specific identification method;
(f) interest income, adjusted for amortization of premium and accretion of
original issue discount, is recorded on an accrual basis; market discount is
recognized upon the disposition of the security; (g) 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 by class; (h) dividends and
distributions to shareholders are recorded on the ex-dividend date; (i) the
character of income and gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles; (j) the Fund intends to comply with the applicable provisions of the
Internal Revenue Code of 1986, as amended, pertaining to regulated investment
companies and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes; and (k) estimates and
assumptions are required to be made regarding assets, liabilities and changes in
net assets resulting from operations when financial statements are prepared.
Changes in the economic environment, financial markets and any other parameters
used in determining these estimates could cause actual results to differ.
2. Fund Concentration
Since the Fund invests primarily in obligations of issuers within New Jersey, it
is subject to possible concentration risks associated with economic, political
or legal developments or industrial or regional matters specifically affecting
New Jersey.
3. Exempt-Interest Dividends and Other Distributions
The Fund intends to satisfy conditions that will enable interest from municipal
securities, which is exempt from regular Federal income tax and from designated
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 21
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
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
Mutual Management Corp. ("MMC"),a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH"),acts as investment adviser to the Fund. The Fund pays
MMC an advisory fee calculated at an annual rate of 0.30% of the average daily
net assets. This fee is calculated daily and paid monthly.
MMC 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.
On October 8,1998,CFBDS,Inc.,became the Fund's distributor. Prior to that
date,Salomon Smith Barney Inc. ("SSB"),another subsidiary of SSBH,was the Fund's
distributor. SSB (as well as certain other broker-dealers) continues to sell
Fund shares to the public as a member of the selling group.
On June 12,1998,the Portfolio's existing Class C shares were renamed Class L
shares.Effective June 15,1998,Class L shares are being sold at net asset value
plus a maximum initial sales charge of 1.00%. Class L shares also have a 1.00%
contingent deferred sales charge ("CDSC"),which applies if redemption occurs
within the first year of purchase.
There is also a CDSC of 4.50% on Class B shares,which applies if redemption
occurs within one year from purchase. This CDSC declines by 0.50% the first year
after purchase and thereafter by 1.00% per year until no CDSC is incurred.
For the six months ended September 30,1998,SSB received sales charges of
$169,000 and $11,000 on sales of the Fund's Class A and Class L shares,
respectively. In addition,CDSC paid to SSB were approximately:
Class B Class L
================================================================================
CDSCs $30,000 $2,000
================================================================================
Pursuant to a Distribution Plan,the Fund pays a service fee with respect to its
Class A,B and L shares,calculated at the annual rate of 0.15% of the average
daily net assets for each respective class. In addition,the Fund pays a
distribution fee with
- --------------------------------------------------------------------------------
22 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)(continued)
================================================================================
respect to its Class B and L shares calculated at the annual rate of 0.50% and
0.55% of the average daily net assets for each class, respectively. For the six
months ended September 30, 1998, total Distribution Plan fees incurred were:
Class A Class B Class L
================================================================================
Distribution Plan Fees $121,839 $216,995 $23,366
================================================================================
All officers and one Director of the Fund are employees of SSB.
5. Investments
During the six months ended September 30, 1998, the aggregate cost of purchases
and proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $76,998,965
- --------------------------------------------------------------------------------
Sales 74,333,553
================================================================================
At September 30, 1998, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
================================================================================
Gross unrealized appreciation $16,332,768
Gross unrealized depreciation --
- --------------------------------------------------------------------------------
Net unrealized appreciation $16,332,768
================================================================================
6. Capital Shares
At September 30, 1998, the Fund had 100 million shares of capital stock
authorized with a par value of $0.001 per share. The Fund has the ability to
issue multiple classes of shares. Each share of a class represents an identical
interest and has the same rights, except that each class bears certain direct
expenses, including those specifically related to the distribution of its
shares. Effective June 12, 1998, the Fund adopted the renaming of existing Class
C shares as Class L shares.
At September 30, 1998, total paid-in capital amounted to the following for each
class:
Class A Class B Class L
================================================================================
Total Paid-in Capital $151,604,065 $65,928,450 $7,297,758
================================================================================
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 23
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
September 30, 1998 March 31, 1998
-------------------- --------------------------
Shares Amount Shares Amount
=============================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 840,259 $ 11,363,596 1,254,490 $ 16,808,489
Shares issued on reinvestment 173,403 2,342,521 382,956 5,097,645
Shares redeemed (485,857) (6,559,777) (1,331,406) (17,702,432)
- ---------------------------------------------------------------------------------------------
Net Increase 527,805 $ 7,146,340 306,040 $ 4,203,702
=============================================================================================
Class B
Shares sold 307,219 $ 4,149,883 609,600 $ 8,121,587
Shares issued on reinvestment 71,408 964,095 163,158 2,170,492
Shares redeemed (286,883) (3,870,013) (696,778) (9,268,625)
- ---------------------------------------------------------------------------------------------
Net Increase 91,744 $ 1,243,965 75,980 $ 1,023,454
=============================================================================================
Class L+
Shares sold 116,644 $ 1,576,100 128,843 $ 1,721,325
Shares issued on reinvestment 8,088 109,161 15,280 203,211
Shares redeemed (31,875) (432,222) (62,246) (828,541)
- ---------------------------------------------------------------------------------------------
Net Increase 92,857 $ 1,253,039 81,877 $ 1,095,995
=============================================================================================
</TABLE>
+ On June 12, 1998, Class C shares were renamed Class L shares.
- --------------------------------------------------------------------------------
24 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Higlights
================================================================================
For a share of each class of beneficial interest outstanding throughout each
year ended March 31 except where noted:
<TABLE>
<CAPTION>
Class A Shares 1998(1) 1998 1997 1996 1995 1994
===================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $13.44 $12.92 $12.88 $12.62 $12.55 $13.16
- -------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income (2) 0.34 0.70 0.70 0.70 0.70 0.70
Net realized and
unrealized gain (loss) 0.28 0.59 0.02 0.26 0.07 (0.46)
- -------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.62 1.29 0.72 0.96 0.77 0.24
- -------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.35) (0.71) (0.68) (0.70) (0.70) (0.70)
Net realized gains -- (0.06) -- -- -- (0.15)
- -------------------------------------------------------------------------------------------------------------------
Total Distributions (0.35) (0.77) (0.68) (0.70) (0.70) (0.85)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $13.71 $13.44 $12.92 $12.88 $12.62 $12.55
- -------------------------------------------------------------------------------------------------------------------
Total Return 4.65%++ 10.20% 5.74% 7.77% 6.37% 1.66%
- -------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (millions) $169 $158 $148 $154 $107 $120
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (2) 0.74%+ 0.75% 0.76% 0.84% 0.88%* 0.83%
Net investment income 4.96+ 5.22 5.44 5.41 5.61 5.17
- -------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 32% 55% 36% 22% 32% 32%
===================================================================================================================
</TABLE>
(1) For the six months ended September 30, 1998 (unaudited).
(2) The investment adviser waived all or part of its fees in the year ended
March 31, 1994. If such fees were not waived, the per share decrease to
net investment income would have been $0.01 and the expense ratio would
have been 0.88%.
* Expense ratio excludes interest expense. Expense ratio including
interest expense would have been 0.89% for the year ended March 31,
1995.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 25
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of beneficial interest outstanding throughout each
year ended March 31 except where noted:
<TABLE>
<CAPTION>
Class B Shares 1998(1) 1998 1997 1996 1995 1994
===================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $13.44 $12.92 $12.88 $12.62 $12.55 $13.16
- -------------------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income (2) 0.30 0.63 0.64 0.63 0.63 0.64
Net realized and
unrealized gain (loss) 0.27 0.59 0.02 0.26 0.06 (0.47)
- -------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.57 1.22 0.66 0.89 0.69 0.17
- -------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.31) (0.64) (0.62) (0.63) (0.62) (0.63)
Net realized gains -- (0.06) -- -- -- (0.15)
- -------------------------------------------------------------------------------------------------------------------
Total Distributions (0.31) (0.70) (0.62) (0.63) (0.62) (0.78)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $13.70 $13.44 $12.92 $12.88 $12.62 $12.55
- -------------------------------------------------------------------------------------------------------------------
Total Return 4.31%++ 9.66% 5.23% 7.20% 5.76% 1.15%
- -------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $68,326 $65,773 $62,249 $63,272 $55,334 $48,375
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (2) 1.27%+ 1.27% 1.28% $ 1.36% 1.39%(*) 1.36%
Net investment income 4.43+ 4.70 4.92 4.90 5.09 4.64
- -------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 32% 55% 36% 22% 32% 32%
===================================================================================================================
</TABLE>
(1) For the six months ended September 30, 1998 (unaudited).
(2) The investment adviser waived all or part of its fees in the year ended
March 31, 1994. If such fees were not waived, the per share decrease to net
investment income would have been $0.01 and the expense ratio would have
been 1.41%.
* Expense ratio excludes interest expense. Expense ratio including interest
expense would have been 1.40% for the year ended March 31, 1995.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
26 1998 Semi-Annual Report to Shareholders
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of beneficial interest outstanding throughout each
year ended March 31 except where noted:
<TABLE>
<CAPTION>
Class L Shares(1) 1998(2) 1998 1997 1996 1995(3)
======================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $13.43 $12.92 $12.88 $12.62 $11.86
- ------------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.30 0.61 0.63 0.62 0.20
Net realized and unrealized gain 0.27 0.59 0.02 0.27 0.74
- ------------------------------------------------------------------------------------------------------
Total Income From Operations 0.57 1.20 0.65 0.89 0.94
- ------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.30) (0.63) (0.61) (0.63) (0.18)
Net realized gains -- (0.06) -- -- --
- ------------------------------------------------------------------------------------------------------
Total Distributions (0.30) (0.69) (0.61) (0.63) (0.18)
- ------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.70 $13.43 $12.92 $12.88 $12.62
- ------------------------------------------------------------------------------------------------------
Total Return 4.33%++ 9.50% 5.17% 7.17% 8.01%++
- ------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $7,548 $6,153 $4,861 $3,812 $248
- ------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.32%+ 1.39% 1.32% 1.41% 1.44%+
Net investment income 4.38+ 4.58 4.88 4.82 5.05+
- ------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 32% 55% 36% 22% 32%
======================================================================================================
</TABLE>
(1) On June 12, 1998, Class C shares were renamed Class L shares.
(2) For the six months ended September 30, 1998 (unaudited).
(3) For the period from December 13, 1994 (inception date) to March 31, 1995.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 27
<PAGE>
[This page intentionally left blank]
<PAGE>
SalomonSmithBarney
----------------------------
A member of Citigroup [LOGO]
Directors Investment Adviser
Herbert Barg and Administrator
Alfred J. Bianchetti Mutual Management Corp.
Martin Brody
Dwight B. Crane Distributor
Burt Dorsett CFBDS, Inc.
Elliot Jaffe
Stephen E. Kaufman Custodian
Joseph J. McCann PNC Bank, N.A.
Heath B. McLendon, Chairman
Cornelius Rose Shareholder
Servicing Agent
James J. Crisona, Emeritus First Data Investor Services Group, Inc.
P.O. Box 9134
Officers Boston, MA 02205-9134
Heath B. McLendon
President and
Chief Executive Officer This report is submitted for the general
information of the shareholders of Smith
Barney New Jersey Municipals Fund Inc. It
Lewis E. Daidone is not authorized for distribution to
Senior Vice President prospective investors unless accompanied
and Treasurer or preceded by a current Prospectus for
the Fund, which contains information
Lawrence T. McDermott concerning the Fund's investment policies
Vice President and expenses as well as other pertinent
and Investment Officer information.
Thomas M. Reynolds
Controller Salomon Smith Barney is a service mark
of Salomon Smith Barney Inc.
Christina T. Sydor
Secretary Smith Barney New Jersey
Municipals Fund Inc.
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com
FD0450 11/98
