<PAGE>
Smith Barney
New Jersey
Municipals
Fund Inc.
------------------
SEMI-ANNUAL REPORT
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September 30, 1999
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
Smith Barney New Jersey Municipals Fund Inc.
[PHOTO OF HEATH B. MCLENDON]
Chairman
[PHOTO OF JOSEPH P. DEANE]
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, 1999. We hope
you find this report useful and informative. 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, 1999, the Class A, B and L shares of the
Fund had negative total returns of 4.14%, 4.40% and 4.42%, respectively, without
sales charges. In comparison, the Lipper Inc. peer group average posted a
negative 3.31% 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 $0.32 per Class A share.
Market and Economic Overview
We believe that the municipal bond market is approaching a temporary bottom. The
Federal Reserve Board ("Fed") has implemented two monetary policy adjustments so
far in 1999 -- a 25 basis point increase on June 30, 1999 and a 25 basis point
increase on August 24, 1999/1/. Fixed income prices have come under some
pressure as a result of increasing interest rates, a strong U.S. economy and
improving market and economic conditions overseas. However, broad-based
inflationary pressures have been absent. In our opinion, long U.S. Treasury
yields are competitive. The yield on the 30-year Treasury bond has stayed within
a narrow 40 basis point trading range since the beginning of June, currently
trading just above 6%, while long-term municipal bonds are yielding
approximately 95% of long-term U.S. Treasury bonds. Under typical market
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1 Subsequent to the date of this shareholder letter, on October 5, 1999, the
Federal Open Market Committee ("FOMC") voted not to change monetary policy
on short-term interest rates. However, it adopted a policy directive toward
a `tightening bias', which indicates what kind of change is most likely if
the FOMC felt action were necessary between meetings, which are usually
held every six to eight weeks.
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Smith Barney New Jersey Municipals Fund Inc. 1
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conditions, municipal bonds yield roughly 85% of similar-maturity U.S. Treasury
bonds.
The financial crisis and ensuing global credit crunch that occurred in 1998
caused spreads to widen substantially between municipal securities and U.S.
Treasuries. The recent upward pressure on municipal yields appears to result
largely from two factors: 1) the lack of demand for municipal bonds by the
traditional institutional sectors that have supported the municipal market; and
2) additional pressures resulting from the pre-Y2K avalanche of issues in the
taxable market, which has attracted institutional investors who would otherwise
buy municipals.
New Jersey Economic Highlights
New Jersey is among the wealthiest of the U.S. states, continuing to rank second
as to personal income per capita. Formerly dependent on manufacturing, the
Garden State now depends heavily on services and trade. In May 1999, the
employment level was 1.4% above the level of a year earlier.
We continue to favor select New Jersey hospital, transportation, and education
municipal bonds. 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. Heavy volume in new transportation issues has
changed the debt structure of the Garden State, as transportation projects
supported by federal and state appropriations have been major factors in
transportation improvements. Demographic changes such as an older student
population and aging schools have also made it easier for New Jersey officials
to get approval for more education bond issuance.
Investment Strategy
The investment objective of the Fund is to provide New Jersey investors with as
high a level of income/2/ exempt from Federal and New Jersey personal income
taxes 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 continued to focus on high-quality issues and remains broadly
diversified across various sectors.
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2 Please note that a portion of the income from this Fund may be subject to
the Alternative Minimum Tax.
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2 1999 Semi-Annual Report to Shareholders
<PAGE>
As of September 30, 1999, 81.2% 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 about 48.8% 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
(21.3%), industrial development bonds (15.3%) and transportation bonds (14.2%).
The Fund's average weighted maturity was 19.6 years as of September 30, 1999.
Municipal Bond Market Outlook
Going forward, we are optimistic about the competitiveness of the tax-exempt
bond market. At current levels, we believe that tax-exempt securities represent
good relative values.
We think that the recent actions of the Fed were preemptively conservative.
Inflation should remain in check, at least in the near term. A possible easing
of economic activity as a result of Y2K ramifications could prove positive for
fixed income markets.
Looking ahead, we believe that the U.S. economy should remain strong in the
coming months with muted inflationary pressures. Recent U.S. economic conditions
have created opportunities for municipal securities to catch up with Treasuries,
and we continue to see good value at the long end of the market.
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/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
October 15, 1999
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Smith Barney New Jersey Municipals Fund Inc. 3
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Historical Performance -- Class A Shares
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Net Asset Value
Period Beginning End Income Capital Gain Return of Total
Ended of Period of Period Dividends Distributions Capital Returns/(1)/
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9/30/99 $13.26 $12.40 $0.32 $0.00 $0.00 (4.14)%+
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3/31/99 13.44 13.26 0.66 0.23 0.00 5.41
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3/31/98 12.92 13.44 0.71 0.06 0.00 10.20
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3/31/97 12.88 12.92 0.68 0.00 0.00 5.74
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3/31/96 12.62 12.88 0.70 0.00 0.00 7.77
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3/31/95 12.55 12.62 0.70 0.00 0.00 6.37
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3/31/94 13.16 12.55 0.70 0.15 0.00 1.66
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3/31/93 12.44 13.16 0.75 0.14 0.01 13.49
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3/31/92 12.17 12.44 0.77 0.13 0.04 10.22
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3/31/91 11.92 12.17 0.83 0.05 0.01 9.89
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3/31/90 11.67 11.92 0.82 0.03 0.00 9.62
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Total $7.64 $0.79 $0.06
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Historical Performance -- Class B Shares
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Net Asset Value
Period Beginning End Income Capital Gain Return of Total
Ended of Period of Period Dividends Distributions Capital Returns/(1)/
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9/30/99 $13.25 $12.39 $0.28 $0.00 $0.00 (4.40)%+
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3/31/99 13.44 13.25 0.59 0.23 0.00 4.80
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3/31/98 12.92 13.44 0.64 0.06 0.00 9.66
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3/31/97 12.88 12.92 0.62 0.00 0.00 5.23
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3/31/96 12.62 12.88 0.63 0.00 0.00 7.20
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3/31/95 12.55 12.62 0.62 0.00 0.00 5.76
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3/31/94 13.16 12.55 0.63 0.15 0.00 1.15
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Inception*
- - 3/31/93 12.75 13.16 0.27 0.14 0.01 6.60+
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Total $4.28 $0.58 $0.01
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4 1999 Semi-Annual Report to Shareholders
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Historical Performance -- Class L Shares
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Net Asset Value
Period Beginning End Income Capital Gain Return of Total
Ended of Period of Period Dividends Distributions Capital Returns/(1)/
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9/30/99 $13.25 $12.39 $0.28 $0.00 $0.00 (4.42)%+
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3/31/99 13.43 13.25 0.58 0.23 0.00 4.78
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3/31/98 12.92 13.43 0.63 0.06 0.00 9.50
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3/31/97 12.88 12.92 0.61 0.00 0.00 5.17
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3/31/96 12.62 12.88 0.63 0.00 0.00 7.17
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Inception*
- - 3/31/95 11.86 12.62 0.18 0.00 0.00 8.01+
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Total $2.91 $0.29 $0.00
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It is the Fund's policy to distribute dividends monthly and capital gains, if
any, annually.
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Average Annual Total Return
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Without Sales Charge/(1)/
Class A Class B Class L
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Six Months Ended 9/30/99+ (4.14)% (4.40)% (4.42)%
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Year Ended 9/30/99 (3.44) (3.95) (4.01)
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Five Years Ended 9/30/99 5.88 5.32 N/A
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Ten Years Ended 9/30/99 6.93 N/A N/A
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Inception* through 9/30/99 7.43 5.14 6.21
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With Sales Charge/(2)/
Class A Class B Class L
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Six Months Ended 9/30/99+ (7.95)% (8.61)% (6.28)%
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Year Ended 9/30/99 (7.29) (8.02) (5.88)
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Five Years Ended 9/30/99 5.01 5.16 N/A
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Ten Years Ended 9/30/99 6.49 N/A N/A
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Inception* through 9/30/99 7.04 5.14 5.98
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Smith Barney New Jersey Municipals Fund Inc. 5
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Cumulative Total Return
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Without Sales Charge/(1)/
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Class A (9/30/89* through 9/30/99) 95.36%
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Class B (Inception* through 9/30/99) 41.34
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Class L (Inception* through 9/30/99)/(2)/ 33.51
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(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) 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.
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6 1999 Semi-Annual Report to Shareholders
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Historical Performance (unaudited)
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Growth of $10,000 Invested in Class A Shares of the
Smith Barney New Jersey Municipals Fund Inc.
vs. Lehman Brothers Municipal Bond Index+
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September 1989 -- September 1999
[GRAPH]
Smith Barney New Jersey Lehman Bros. Municipal
Municipals Fund Inc Bond Index
9/31/89 9,597 10,000
Sep-90 10,520 11,055
Sep-91 11,560 12,074
Sep-92 12,740 13,281
Sep-93 14,459 14,943
Sep-94 14,698 15,289
Sep-95 15,634 16,427
Sep-96 16,849 17,804
Sep-97 17,817 18,773
Sep-98 19,634 20,784
Sep-99 20,696 22,073
+ Hypothetical illustration of $10,000 invested in Class A shares on
September 30, 1989, 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, 1999. 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 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.
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Smith Barney New Jersey Municipals Fund Inc. 7
<PAGE>
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Portfolio Highlights (unaudited) September 30, 1999
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Portfolio Breakdown
[PIE CHART]
2.5% Solid Waste
5.0% Life Care
11.1% General Obligation
21.3% Hospital
7.7% Utilities
6.6% Other
0.5% Water & Sewer
9.1% Education
15.3% Industrial Development
2.4% Pollution Control
4.3% Housing
14.2% Transportation
Summary of Investments by Combined Ratings
Standard & Percentage of
Moody's and/or Poor's Total Investments
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Aaa AAA 48.8%
Aa AA 13.9
A A 1.8
Baa BBB 16.7
Ba BB 4.5
B B 0.6
NR NR 13.7
-----
100.0%
-----
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8 1999 Semi-Annual Report to Shareholders
<PAGE>
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Schedule of Investments (unaudited) September 30, 1999
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<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education -- 9.1%
East Orange Board of Education, COP, FSA-Insured:
$ 1,400,000 AAA Zero coupon due 8/1/14 $ 614,250
1,000,000 AAA Zero coupon due 8/1/15 411,250
1,845,000 AAA Zero coupon due 2/1/19 606,544
2,845,000 AAA Zero coupon due 2/1/23 729,031
2,845,000 AAA Zero coupon due 2/1/27 572,556
750,000 AAA Hamilton Township-Mercer County Board of Education,
COP, Series B, FSA-Insured, 7.000% due 12/15/15 790,312
1,000,000 AAA Lumberton Township School District, COP, MBIA-Insured,
6.100% due 10/1/13 1,043,750
New Jersey EDA, Revenue:
1,030,000 AAA Educational Testing Service, Series A,
4.750% due 5/15/25 863,912
550,000 Aa3* Princeton Montessori Society, LOC Banque National
De Paris, Series S, 6.500% due 6/1/12 570,625
New Jersey State Educational Facilities Financing
Authority Revenue:
950,000 NR Caldwell College, Series A, 7.250% due 7/1/25 992,750
2,700,000 NR Fairleigh Dickinson University, Series C,
6.625% due 7/1/23 2,747,250
550,000 BBB Monmouth University, Series D, 5.125% due 7/1/24 481,937
1,250,000 AAA Seton Hall University Project, Series F,
AMBAC-Insured, 5.000% due 7/1/21 1,150,000
St. Peters College, Series B:
1,000,000 BBB 5.375% due 7/1/18 917,500
2,000,000 BBB 5.500% due 7/1/27 1,822,500
2,360,000 AAA New Jersey State Higher Education Assistance Authority,
Student Loan Revenue, New Jersey Class Loan Program,
Series A, MBIA-Insured, 5.800% due 6/1/16(b)
2,362,950 Rutgers State University Revenue:
600,000 AA Refunding, Series A, 6.400% due 5/1/13 656,250
Series U:
1,810,000 AAA++ 5.000% due 5/1/20 1,642,575
1,905,000 AAA++ 5.000% due 5/1/21 1,721,644
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20,697,586
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General Obligation -- 11.1%
Essex County Improvement Authority, Lease Revenue, GO,
AMBAC-Insured:
500,000 AAA 5.000% due 4/1/14 475,625
850,000 AAA 5.125% due 4/1/29 765,000
200,000 AAA Hudson County GO, FGIC-Insured, 6.550% due 7/1/10 226,500
500,000 AAA Jersey City GO, Series 1991B, FSA-Insured,
8.400% due 5/15/06 603,750
650,000 AAA Lakewood Township School District, GO, Series 92,
AMBAC-Insured, 6.250% due 2/15/11 715,813
</TABLE>
See Notes to Financial Statements.
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Smith Barney New Jersey Municipals Fund Inc. 9
<PAGE>
<TABLE>
<CAPTION>
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Schedule of Investments (unaudited) (continued) September 30, 1999
- -----------------------------------------------------------------------------------------------------------
FACE
AMOUNT RATING(a) SECURITY VALUE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
General Obligation -- 11.1% (continued)
Morris Township GO:
$ 550,000 Aa1* 6.550% due 7/1/09 $ 618,063
550,000 Aa1* 6.550% due 7/1/10 617,375
500,000 Aa1* 6.550% due 7/1/11 561,250
New Jersey State GO:
2,500,000 AA+ Series D, 8.000% due 2/15/07 2,990,625
9,000,000 AA+ 4.500% due 2/1/18 7,638,750
1,500,000 AAA North Bergen Township GO, FSA-Insured,
8.000% due 8/15/07 1,811,250
Parsippany-Troy Hills Township GO, MBIA-Insured:
550,000 AAA 5.000% due 12/1/16 520,437
565,000 AAA 5.000% due 12/1/17 529,687
4,620,000 AAA Plainfield Board of Education, GO, FSA-Insured,
5.000% due 8/1/20 4,273,500
500,000 AAA South Amboy GO, MBIA-Insured, 6.375% due 12/1/10 531,250
854,000 AAA Weehawken Township GO, FSA-Insured, 6.350% due 7/1/07 895,632
West Windsor/Plainsboro GO, Regional School District:
180,000 AA 6.750% due 4/1/06 200,700
490,000 AA 6.750% due 4/1/07 550,637
435,000 AA 6.800% due 4/1/08 493,181
170,000 AA 6.800% due 4/1/09 193,375
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25,212,400
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Hospital -- 21.3%
Camden County Improvement Authority Revenue:
3,775,000 Ba2* Health Care Redevelopment Project, Cooper Health,
5.875% due 2/15/15 2,958,656
1,000,000 AAA Health Systems, Catholic Health East, Series B,
AMBAC-Insured, 5.000% due 11/15/18 910,000
2,500,000 AAA New Jersey EDA, Nursing Home Revenue,
RWJ Health Care Corp., FSA-Insured, 6.500% due
7/1/24 New Jersey Health Care Facilities 2,656,250
Financing Authority Revenue:
2,715,000 AAA Barnert Hospital, MBIA/FHA-Insured, 5.000% due 8/1/25 2,399,381
Burdett Tomlin Memorial Hospital, Series D, FGIC-Insured:
1,200,000 AAA Pre-refunded--Escrowed with U.S. government
securities to 7/1/01 Call @ 102, 6.500% due 7/1/12 1,269,000
200,000 AAA Unrefunded Balance, 6.500% due 7/1/12 209,750
850,000 AAA 6.500% due 7/1/21 898,875
2,500,000 AAA Cathedral Health Services Inc., MBIA/FHA-Insured,
5.250% due 8/1/21 2,337,500
Columbus Hospital, Series A:
450,000 B 7.200% due 7/1/01 452,745
1,000,000 B 7.500% due 7/1/21 1,017,500
2,300,000 Baa2* Deborah Heart & Lung Center, 6.300% due 7/1/23 2,343,125
750,000 BBB+ East Orange General Hospital, Series B, 7.750% due 7/1/20 774,818
See Notes to Financial Statements.
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</TABLE>
10 1999 Semi-Annual Report to Shareholders
<PAGE>
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Schedule of Investments (unaudited) (continued) September 30, 1999
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<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hospital -- 21.3% (continued)
$1,250,000 AAA Hackensack University Medical Center, MBIA-Insured,
Series B, 5.200% due 1/1/28 $ 1,143,750
Medical Center at Princeton Obligation Group,
AMBAC-Insured:
1,000,000 AAA 5.000% due 7/1/23 888,750
750,000 AAA 5.000% due 7/1/28 657,188
825,000 AAA Medical Center of Ocean County, FSA-Insured,
6.750% due 7/1/20 876,563
3,000,000 AAA Meridian Health System Obligation Group, FSA-Insured,
5.250% due 7/1/19 2,857,500
825,000 AAA Muhlenberg Regional Medical Center, Series B,
AMBAC-Insured, 8.000% due 7/1/18 837,622
295,000 Ba3* Newcomb Medical Center, Series A, 7.875% due 7/1/03 299,425
Pascack Valley Hospital Association:
2,000,000 BBB 5.125% due 7/1/18 1,767,500
5,000,000 BBB 5.125% due 7/1/28 4,231,250
3,700,000 NR Raritan Bay Medical Center, 7.250% due 7/1/27 3,667,625
St. Barnabas Hospital Obligation Group, MBIA-Insured:
750,000 AAA Zero coupon due 7/1/16 290,625
3,700,000 AAA Zero coupon due 7/1/17 1,345,875
3,450,000 AAA Zero coupon due 7/1/23 862,500
2,500,000 Aaa* St. Barnabas Medical Center, MBIA-Insured, Series A,
5.000% due 7/1/23 2,237,500
2,000,000 BBB St. Elizabeth's Hospital, 6.000% due 7/1/14 1,987,500
2,750,000 Baa1* St. Mary Hospital, 5.875% due 7/1/12 2,739,688
2,000,000 Baa1* Southern Ocean County Hospital, Series A,
6.250% due 7/1/23 2,010,000
1,500,000 AAA University Medicine & Dentistry, Series A, MBIA-Insured,
5.000% due 9/1/22 1,346,250
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48,274,711
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Housing: Multi-Family -- 2.3%
1,500,000 AAA Newark Housing Financing Corp., Mortgage Revenue,
Refunding, Manor Apartments, Series A, FHA-Insured,
7.500% due 2/15/24 1,591,875
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(c) 2,703,000
1,000,000 AA Regency Park Project, Series H, GNMA-Collateralized,
7.700% due 11/1/30 1,021,240
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5,316,115
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</TABLE>
See Notes to Financial Statements.
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Smith Barney New Jersey Municipals Fund Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) September 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
<S> <C> <C> <C>
Housing: Single-Family -- 2.0%
New Jersey State Housing & Mortgage Finance Agency
Revenue, Home Buyer:
$1,940,000 AAA Series R, MBIA-Insured, 5.750% due 4/1/17(c) $1,976,375
2,250,000 AAA Series Z, MBIA-Insured, 5.700% due 10/1/17 2,255,625
380,000 AAA Virgin Islands HFA, Single-Family Mortgage Revenue,
Series A, GNMA-Collateralized, 6.500% due
3/1/25(b) 391,875
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4,623,875
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Industrial Development -- 15.3%
650,000 BBB+ Essex County Improvement Authority, Lease Revenue,
6.600% due 4/1/14 714,188
New Jersey EDA, EDR:
1,495,000 BBB+ Preston Trucking Co., 6.500% due 9/1/14 1,539,850
995,000 Aaa* Series L, 7.100% due 12/1/11 (b) 1,045,994
1,320,000 NR Station Plaza Park and Ride LP Project,
6.625% due 7/1/03(b) 1,351,350
1,000,000 NR Trane Division, 1990 Project, 9.500% due
9/1/00 1,031,550
1,235,000 NR Zirbser-Greenbriar Inc., Series A, 7.375% due
7/15/03 1,287,488
1,500,000 BB+ New Jersey EDA, Electric Energy Facility Revenue,
Vineland Cogeneration LP Project, 7.875% due
6/1/19(b) 1,599,375
1,000,000 AAA New Jersey EDA, Natural Gas Facilities Revenue,
NUI Corp., Series A, AMBAC-Insured, 6.350% due
10/1/22 1,052,500
New Jersey EDA, Revenue:
Cadbury Corp. Project, ACA-Insured, Series A:
750,000 A 5.500% due 7/1/18 727,500
1,250,000 A 5.500% due 7/1/28 1,182,813
970,000 Aa3* Economic Growth, Series A, LOC Banque Nationale
de Paris, 6.550% due 12/1/07(b) 1,007,588
First Mortgage, Fellowship Village, Series A:
2,000,000 BBB- 5.500% due 1/1/18 1,840,000
2,500,000 BBB- 5.500% due 1/1/25 2,237,500
Harrogate Inc., Series A:
2,000,000 BBB 5.750% due 12/1/16 1,937,500
1,500,000 BBB 5.875% due 12/1/26 1,443,750
1,000,000 A+ Morris Hall/St. Lawrence Project, Series A,
LOC Corestates First Bank, 6.250% due 4/1/25 1,013,750
3,750,000 NR Sr. Mortgage, Arbor Glen, Series A, 6.000% due
5/15/28 3,520,313
3,890,000 BB New Jersey EDA, Special Facility Revenue, Continental
Airlines Inc. Project, 5.500% due 4/1/28(b) 3,355,125
1,000,000 AAA New Jersey EDA, State Contract, Economic Recovery
Revenue, Series A, FSA-Insured, 6.000% due
3/15/21 1,022,500
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) September 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Industrial Development -- 15.3% (continued)
$5,000,000 Aaa* New Jersey EDA, State Lease Revenue, Bergen County
Administration Complex, MBIA-Insured,
4.750% due 11/15/26 $ 4,181,250
1,500,000 BBB+ New Jersey EDA, Terminal Revenue, GATX Terminal Corp.,
Series 1994, 7.300% due 9/1/19 1,635,000
- --------------------------------------------------------------------------------------
34,726,884
- --------------------------------------------------------------------------------------
Life Care -- 5.0%
New Jersey EDA Revenue, First Mortgage, Keswick Pines:
2,885,000 NR 5.700% due 1/1/18 2,683,050
2,800,000 NR 5.750% due 1/1/24 2,562,000
New Jersey EDA, EDR:
950,000 Aaa* Eagle Rock Convalescent, Inc., GNMA-Collateralized,
7.375% due 12/20/06 1,004,625
5,250,000 BBB- Refunding United Methodist Homes, 5.125% due
7/1/25 4,357,500
745,000 AAA New Jersey Health Care Facilities Financing
Authority Revenue, Spectrum for Living, Series B,
FHA-Insured, 6.500% due 2/1/22 776,663
- -------------------------------------------------------------------------------------
11,383,838
- -------------------------------------------------------------------------------------
Miscellaneous -- 6.6%
615,000 A Atlantic City COP, Series 1991, 8.875% due 1/15/13 802,575
2,500,000 AAA Atlantic County COP, Public Facilities Lease Agreements,
FGIC-Insured, 7.400% due 3/1/09(c) 2,946,875
1,000,000 AAA Essex County Improvement Authority, Parking Facilities
Revenue, AMBAC-Insured, 5.000% due 10/1/17 916,250
240,000 A+ Hudson County Improvement Authority, (Essential Purpose
Pooled Governmental Loan Project), Series 1986,
Remarketed 11/1/90, 7.600% due 8/1/25 250,464
1,500,000 AAA Middlesex County COP, MBIA-Insured, 5.000% due
2/15/19 1,378,125
1,000,000 Aaa* Morristown Parking Authority, Guaranteed Revenue,
FSA-Insured, 5.150% due 8/1/25 913,750
1,750,000 AAA New Brunswick Housing Authority, Lease Revenue,
Rutgers University, FGIC-Insured, 4.750% due
7/1/18 1,531,250
1,000,000 AAA New Brunswick Parking Authority Revenue, Series A,
FGIC-Insured, 6.500% due 9/1/19 1,057,500
480,000 BBB+ New Jersey EDA, EDR, National Association of
Accountants, 7.650% due 7/1/09 499,800
1,000,000 NR New Jersey EDA, Waste Paper Recycling Revenue,
(Marcal Paper Mills Inc. Project), 8.500% due
2/1/10(b) 1,131,250
3,000,000 AAA New Jersey Sports and Exposition Authority,
Monmouth Park, Series A, (Pre-Refunded --
Escrowed with U.S. government securities to
1/1/05 Call @ 102), 8.000% due 1/1/25 3,498,750
- -------------------------------------------------------------------------------------
14,926,589
- -------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) September 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pollution Control -- 2.4%
Middlesex County Pollution Control Authority Financing
Revenue, Amerada Hess Corp.:
$1,000,000 NR 7.875% due 6/1/22 $ 1,113,750
2,000,000 NR 6.875% due 12/1/22(c) 2,102,500
2,150,000 NR New Jersey EDA, Revenue, Sewer Facilities,
Atlantic City Sewer Co., 7.250% due 12/1/11(b) 2,287,063
- --------------------------------------------------------------------------------------
5,503,313
- --------------------------------------------------------------------------------------
Solid Waste -- 2.5%
1,950,000 BB++ Atlantic County Utilities Authority, Solid Waste Revenue,
7.125% due 3/1/16 1,940,250
2,500,000 Aa2* Mercer County Improvement Authority, County Guaranteed
Solid Waste Revenue, 5.750% due 9/15/16 2,528,125
1,250,000 Aa3* New Jersey EDA, Solid Waste Revenue Disposal Facility,
Garden State Paper Co., LOC Toronto Dominion Bank,
7.125% due 4/1/22 1,284,375
- --------------------------------------------------------------------------------------
5,752,750
- --------------------------------------------------------------------------------------
Transportation -- 14.2%
800,000 Baa1* Essex County Improvement Authority, Airport Project
Revenue, 6.800% due 11/1/21(b) 831,000
1,000,000 Baa1* New Jersey EDA, EDR, (American Airlines Inc. Project),
7.100% due 11/1/31(b) 1,051,250
4,000,000 AAA New Jersey EDA, Transportation Project, Sublease,
Series A, FSA-Insured, 5.250% due 5/1/17 3,845,000
New Jersey State Transportation Trust Fund Authority,
Transportation System, Series A:
3,500,000 Aa2* 5.750% due 6/15/16 3,570,000
6,030,000 Aa2* 5.000% due 6/15/17 5,585,287
Port Authority of New York & New Jersey:
1,500,000 AA- 67th Series, 6.875 % due 1/1/25 1,524,225
Special Obligation Revenue:
3,500,000 NR 5th Installment, 6.750% due 10/1/19(b) 3,666,250
2,000,000 AAA 96th Series, FGIC-Insured, 6.600% due 10/1/23(b) 2,132,500
South Jersey Transportation Authority, Transportation
System Revenue, AMBAC-Insured:
2,000,000 AAA 5.000% due 11/1/18 1,830,000
1,000,000 AAA 5.000% due 11/1/19 911,250
7,885,000 AAA 5.125% due 11/1/22 7,214,775
- ------------------------------------------------------------------------------------
32,161,537
- ------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) September 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
Utilities -- 7.7%
<S> <C> <C> <C>
$ 700,000 Baa1* Beachwood Sewer Authority Revenue, Jr. Lien,
6.500% due 12/1/12 $ 729,750
1,000,000 AAA Bordentown Sewer Authority Revenue, Series C,
MBIA-Insured, 6.900% due 12/1/16 1,045,000
Camden County Municipal Utilities Authority,
Sewer Revenue, FGIC-Insured:
1,500,000 AAA 5.250% due 7/15/16 1,440,000
1,000,000 AAA 5.250% due 7/15/17 953,750
2,500,000 AAA Hamilton Township, Atlantic County Municipal Utilities
Authority, FGIC-Insured, 5.000% due 8/15/17 2,293,750
1,385,000 AAA Kearny Municipal Utilities Authority Revenue,
FGIC-Insured, 7.300% due 11/15/18 1,644,688
1,300,000 AAA Middlesex County Improvement Authority, Utilities System
Revenue, Perth Amboy Franchise Project, Series A,
AMBAC-Insured, 5.000% due 9/1/29 1,145,625
1,000,000 AAA Middlesex County Utilities Authority, Sewer Revenue,
Series A, MBIA-Insured, 6.250% due 8/15/10 1,095,000
2,465,000 Aaa* Mount Holly Municipal Utilities Authority, Sewer
Revenue, MBIA-Insured, 4.750% due 12/1/28 2,058,275
1,000,000 AAA New Jersey EDA, Natural Gas Facilities Revenue,
(New Jersey Natural Gas Co. Project), Series A,
AMBAC-Insured, 6.250% due 8/1/24 1,040,000
750,000 AAA Old Bridge Township Municipal Utilities Authority Revenue,
FGIC-Insured, 6.400% due 11/1/09 801,562
1,000,000 AAA Southeast Morris County Municipal Utilities Authority,
Water Revenue, Series A, FGIC-Insured, 6.500% due 1/1/11 1,040,000
Union County Utilities Authority:
1,000,000 AAA Sr. Lease Obligation, Ogden Martin, Series A,)
5.000% due 6/1/23(b) 883,750
Capital Appreciation, County Deficiency, Series C1:
275,000 Aaa* Zero coupon due 6/15/13 130,625
275,000 Aaa* Zero coupon due 6/15/14 122,719
275,000 Aaa* Zero coupon due 6/15/15 115,844
280,000 Aaa* Zero coupon due 6/15/16 108,850
275,000 Aaa* Zero coupon due 6/15/17 101,406
275,000 Aaa* Zero coupon due 6/15/18 94,187
Capital Appreciation, County Deficiency, Series C2:
310,000 Aaa* Zero coupon due 6/15/13 148,025
310,000 Aaa* Zero coupon due 6/15/14 138,337
310,000 Aaa* Zero coupon due 6/15/15 130,587
305,000 Aaa* Zero coupon due 6/15/16 118,569
310,000 Aaa* Zero coupon due 6/15/17 114,312
310,000 Aaa* Zero coupon due 6/15/18 106,175
- ------------------------------------------------------------------------------------------
17,600,786
- ------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) September 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
- ------------------------------------------------------------------------------------------
Water and Sewer -- 0.5%
<S> <C> <C> <C>
$1,000,000 NR New Jersey EDA Water Facilities Revenue, (American
Water Co. Inc. Project), 7.400% due 11/1/01(b) $ 1,033,750
- ------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost-- $232,304,049**) $227,214,134
==========================================================================================
</TABLE>
(a) All ratings are by Standard & Poor's Rating Service with the exception of
those identified by an asterisk (*) or a double dagger (++), which are
rated by Moody's Investor Service, Inc. and Fitch IBCA, Inc., respectively.
(b) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(c) Security segregated by Custodian for open purchase commitments.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 17 through 19 for definitions of ratings and certain security
descriptions.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings (unaudited)
- --------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Rating Service ("Standard & Poor's") -- Ratings from "AA" to
"BB" may be modified by the addition of a plus (+) or minus (-) sign to show
relative standings within the major rating categories.
AAA -- Bonds rated "AAA" have the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and repay
principal and differ from the highest rated 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 Investors Service, Inc. ("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 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.
Ba -- Bonds that are 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 that are 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.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings (unaudited) (continued)
- --------------------------------------------------------------------------------
Fitch IBCA, Inc. ("Fitch") -- Rating may be modified by the addition of a plus
(+) or minus (-) sign to show relative standings with the major ratings
categories.
AAA -- Bonds rated AAA by Fitch have the lowest expectation of credit risk.
The obligor has an exceptionally strong capacity for timely payment of
financial commitments which is highly unlikely to be adversely
affected by foreseeable events
BBB -- Bonds rated BBB by Fitch currently have a low expectation of credit
risk. The capacity for timely payment of financial commitments is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to impair this capacity. This
is the lowest investment grade category assigned by Fitch.
BB -- Bonds rated BB by Fitch carry the possibility of credit risk
developing, particularly as the result of adverse economic change over
time. Business or financial alternatives may, however, be available to
allow financial commitments to be met. Securities rated in this
category are not considered by Fitch to be investment grade.
NR -- Indicates that the bond is not rated by Standard & Poor's, Moody's or
Fitch.
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.
- --------------------------------------------------------------------------------
18 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
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. 19
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) September 30, 1999
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $232,304,049) $227,214,134
Cash 32,873
Interest receivable 3,550,390
Receivable for Fund shares sold 87,520
- --------------------------------------------------------------------------------
Total Assets 230,884,917
- --------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 3,651,790
Investment advisory fees payable 55,674
Administration fees payable 40,685
Distribution fees payable 15,581
Accrued expenses 49,430
- --------------------------------------------------------------------------------
Total Liabilities 3,813,160
- --------------------------------------------------------------------------------
Total Net Assets $227,071,757
================================================================================
NET ASSETS:
Par value of capital shares $ 18,322
Capital paid in excess of par value 231,353,770
Undistributed net investment income 148,150
Accumulated net realized gain from securities transactions 641,430
Net unrealized depreciation of investments (5,089,915)
- --------------------------------------------------------------------------------
Total Net Assets $227,071,757
================================================================================
Shares Outstanding:
Class A 12,440,168
-----------------------------------------------------------------------------
Class B 5,080,988
-----------------------------------------------------------------------------
Class L 800,423
-----------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $12.40
-----------------------------------------------------------------------------
Class B* $12.39
-----------------------------------------------------------------------------
Class L** $12.39
-----------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 4.17% of net asset value per share) $12.92
-----------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $12.52
================================================================================
* 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.
- --------------------------------------------------------------------------------
20 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended September 30, 1999
INVESTMENT INCOME:
Interest $ 6,893,862
- --------------------------------------------------------------------------------
EXPENSES:
Distribution fees (Note 4) 371,804
Investment advisory fees (Note 4) 357,462
Administration fees (Note 4) 238,308
Shareholder and system servicing fees 43,828
Shareholder communications 20,406
Audit and legal 19,554
Registration fees 10,028
Pricing service fees 9,525
Directors' fees 7,271
Custody 6,434
Other 3,761
- --------------------------------------------------------------------------------
Total Expenses 1,088,381
- --------------------------------------------------------------------------------
Net Investment Income 5,805,481
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED LOSS ON
INVESTMENTS (NOTE 5):
Realized Loss From Security Transactions
(excluding short-term securities):
Proceed from sales 39,749,663
Cost of securities sold 40,851,107
- --------------------------------------------------------------------------------
Net Realized Loss (1,101,444)
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation) of investments:
Beginning of period 9,928,846
End of period (5,089,915)
- --------------------------------------------------------------------------------
Increase in Net Unrealized Depreciation (15,018,761)
- --------------------------------------------------------------------------------
Net Loss on Investments (16,120,205)
- --------------------------------------------------------------------------------
Decrease in Net Assets From Operations $(10,314,724)
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended September 30, 1999 (unaudited)
and the Year Ended March 31, 1999
September 30 March 31
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment income $ 5,805,481 $ 11,387,917
Net realized gain (loss) (1,101,444) 4,425,358
Increase in net unrealized depreciation (15,018,761) (3,694,376)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
From Operations (10,314,724) 12,118,899
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 3):
Net investment income (5,653,993) (11,425,954)
Net realized gains -- (4,138,625)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (5,653,993) (15,564,579)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 16,454,731 37,708,339
Net asset value of shares issued for
reinvestment of dividends 3,194,600 9,304,918
Cost of shares reacquired (24,631,220) (25,846,205)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (4,981,889) 21,167,052
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (20,950,606) 17,721,372
NET ASSETS:
Beginning of period 248,022,363 230,300,991
- --------------------------------------------------------------------------------
End of period* $227,071,757 $248,022,363
================================================================================
* Includes undistributed (overdistributed) net
investment income of: $148,150 ($3,338)
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 1999 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.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
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 regular 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
SSB Citi Fund Management LLC ("SSBC"), formerly known as SSBC Fund Management
Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as
investment adviser to the Fund. The Fund pays SSBC an advisory fee calculated at
an annual rate of 0.30% of the average daily net assets. This fee is calculated
daily and paid monthly.
SSBC also acts as the Fund's administrator for which the Fund pays a fee
calculated at an annual rate of 0.20% of the average daily net assets up to $500
million and 0.18% of the average daily net assets in excess of $500 million.
This fee is calculated daily and paid monthly.
CFBDS, Inc. ("CFBDS"), acts as the Fund's distributor. Salomon Smith Barney Inc.
("SSB"), another subsidiary of SSBH, as well as certain other broker-dealers,
continues to sell Fund shares to the public as a member of the selling group.
There is a contingent deferred sales charge ("CDSC") of 4.50% on Class B shares,
which applies if redemption occurs within one year from 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 L shares also have a 1.00% CDSC, which
applies if redemption occurs within the first year of purchase. In certain
cases, Class A shares also have a 1.00% CDSC, which applies if redemption occurs
within the first year of purchase. This CDSC only applies to those purchases of
Class A shares, which, when combined with current holdings of Class A shares,
equal or exceed $500,000 in aggregate. These purchases do not incur an initial
sales charge.
- --------------------------------------------------------------------------------
24 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
For the six months ended September 30, 1999, SSB and CFBDS received sales
charges of $113,000 and $18,000 on sales of the Fund's Class A and Class L
shares, respectively. In addition, CDSCs paid to SSB were approximately:
Class A Class B Class L
- --------------------------------------------------------------------------------
CDSCs $7,000 $42,000 $3,000
- --------------------------------------------------------------------------------
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 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, 1999, total Distribution
Plan fees incurred were:
Class A Class B Class L
- --------------------------------------------------------------------------------
Distribution Plan Fees $121,562 $215,862 $34,380
- --------------------------------------------------------------------------------
All officers and one Director of the Fund are employees of SSB.
5. Investments
During the six months ended September 30, 1999, the aggregate cost of purchases
and proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
- --------------------------------------------------------------------------------
Purchases $34,551,395
- --------------------------------------------------------------------------------
Sales 39,749,663
- --------------------------------------------------------------------------------
At September 30, 1999, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
- --------------------------------------------------------------------------------
Gross unrealized appreciation $ 5,692,937
Gross unrealized depreciation (10,782,852)
- --------------------------------------------------------------------------------
Net unrealized depreciation $ (5,089,915)
- --------------------------------------------------------------------------------
6. Capital Shares
At September 30, 1999, 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.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
At September 30, 1999, total paid-in capital amounted to the following for each
class:
Class A Class B Class L
- --------------------------------------------------------------------------------
Total Paid-in Capital $153,492,708 $67,269,183 $10,610,201
- --------------------------------------------------------------------------------
Transactions in shares of each class were as follows:
Six Months Ended Year Ended
September 30, 1999 March 31, 1999
-------------------------- --------------------------
Shares Amount Shares Amount
================================================================================
Class A
Shares sold 826,818 $ 10,594,347 1,710,440 $23,029,562
Shares issued on
reinvestment 169,201 2,163,898 468,877 6,294,593
Shares reacquired (1,342,896) (17,270,255) (1,171,864) (15,777,162)
- --------------------------------------------------------------------------------
Net Increase (Decrease) (346,877) $ (4,512,010) 1,007,453 $ 13,546,993
================================================================================
Class B
Shares sold 288,377 $ 3,713,676 834,214 $ 11,214,455
Shares issued on reinvestment 69,149 883,627 198,587 2,663,886
Shares reacquired (509,580) (6,555,202) (694,084) (9,335,744)
- --------------------------------------------------------------------------------
Net Increase (Decrease) (152,054) $ (1,957,899) 338,717 $ 4,542,597
================================================================================
Class L+
Shares sold 165,255 $ 2,146,708 256,602 $ 3,464,322
Shares issued on reinvestment 11,520 147,075 25,853 346,439
Shares reacquired (62,676) (805,763) (54,400) (733,299)
- --------------------------------------------------------------------------------
Net Increase 114,099 $ 1,488,020 228,055 $ 3,077,462
================================================================================
+ On June 12, 1998, Class C shares were renamed Class L shares.
- --------------------------------------------------------------------------------
26 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
year ended March 31, except where noted:
Class A Shares 1999(1)(2) 1999(2) 1998 1997 1996 1995
- --------------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $13.26 $13.44 $12.92 $12.88 $12.62 $12.55
- --------------------------------------------------------------------------------
Income (Loss)From Operations:
Net investment income 0.33 0.66 0.70 0.70 0.70 0.70
Net realized and
unrealized gain (loss) (0.87) 0.05 0.59 0.02 0.26 0.07
- --------------------------------------------------------------------------------
Total Income (Loss)
From Operations (0.54) 0.71 1.29 0.72 0.96 0.77
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.32) (0.66) (0.71) (0.68) (0.70) (0.70)
Net realized gains -- (0.23) (0.06) -- -- --
- --------------------------------------------------------------------------------
Total Distributions (0.32) (0.89) (0.77) (0.68) (0.70) (0.70)
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $12.40+ $13.26 $13.44 $12.92 $12.88 $12.62
- --------------------------------------------------------------------------------
Total Return (4.14)%++ 5.41% 10.20% 5.74% 7.77% 6.37%
- --------------------------------------------------------------------------------
Net Assets,
End of Period (millions) $154 $170 $158 $148 $154 $107
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.75%++ 0.75% 0.75% 0.76% 0.84% 0.88%*
Net investment income 5.05+ 4.89 5.22 5.44 5.41 5.61
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 14% 52% 55% 36% 22% 32%
================================================================================
(1) For the six months ended September 30, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
* 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. 27
<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 1999(1)(2) 1999(2) 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------------
Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period $13.25 $13.44 $12.92 $12.88 $12.62 $12.55
- ---------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.29 0.59 0.63 0.64 0.63 0.63
Net realized and
unrealized gain (loss) (0.87) 0.04 0.59 0.02 0.26 0.06
- ---------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations (0.58) 0.63 1.22 0.66 0.89 0.69
Less Distributions From:
Net investment income (0.28) (0.59) (0.64) (0.62) (0.63) (0.62)
Net realized gains -- (0.23) (0.06) -- -- --
- ---------------------------------------------------------------------------------------------------
Total Distributions (0.28) (0.82) (0.70) (0.62) (0.63) (0.62)
- ---------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $12.39 $13.25 $ 13.44 $12.92 $12.88 $12.62
- ---------------------------------------------------------------------------------------------------
Total Return (4.40)%++ 4.80% 9.66% 5.23% 7.20% 5.76%
- ---------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $62,946 $69,350 $65,773 $62,249 $63,272 $55,334
- ---------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.27%+ 1.28% 1.27% 1.28% 1.36% 1.39%*
Net investment income 4.53+ 4.37 4.70 4.92 4.90 5.09
- ---------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 14% 52% 55% 36% 22% 32%
===================================================================================================
</TABLE>
(1) For the six months ended September 30, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
* 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.
- --------------------------------------------------------------------------------
28 1999 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 1999(1)(2) 1999(2)(3) 1998 1997 1996 1995(4)
- -------------------------------------------------------------------------------------------------
Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period $13.25 $13.43 $12.92 $12.88 $12.62 $11.86
- ----------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.29 0.58 0.61 0.63 0.62 0.20
Net realized and
unrealized gain (loss) (0.87) 0.05 0.59 0.02 0.27 0.74
- ----------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations (0.58) 0.63 1.20 0.65 0.89 0.94
Less Distributions From:
Net investment income (0.28) (0.58) (0.63) (0.61) (0.63) (0.18)
Net realized gains -- (0.23) (0.06) -- -- --
- ----------------------------------------------------------------------------------------------------
Total Distributions (0.28) (0.81) (0.69) (0.61) (0.63) (0.18)
- ----------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $12.39 $13.25 $13.43 $12.92 $12.88 $12.62
Total Return (4.42)%++ 4.78% 9.50% 5.17% 7.17% 8.01%++
- ----------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $9,913 $9,093 $6,153 $4,861 $3,812 $248
- ----------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.32% 1.32% 1.39% 1.32% 1.41% 1.44%*+
Net investment income 4.49 4.32 4.58 4.88 4.82 5.05+
- ----------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 14% 52% 55% 36% 22% 32%
- ----------------------------------------------------------------------------------------------------
</TABLE>
(1) For the six months ended September 30, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L shares.
(4) For the period from December 13, 1994 (inception date) to March 31, 1995.
* Expense ratio excludes interest expense. Expense ratio including interest
expense would have been 1.45% for the period 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. 29
<PAGE>
[LOGO OF SALOMON SMITH BARNEY]
A member of citigroup
Directors Custodian
Herbert Barg PNC Bank, N.A.
Alfred J. Bianchetti
Martin Brody Shareholder
Dwight B. Crane Servicing Agent
Burt Dorsett Smith Barney Private Trust
Elliot Jaffe 388 Greenwich Street, 22nd Floor
Stephen E. Kaufman New York, New York 10013
Joseph J. McCann
Heath B. McLendon, Chairman Sub-Shareholder
Cornelius Rose Servicing Agent
First Data Investor Services Group,
James J. Crisona, Emeritus Inc.
P.O. Box 9699
Officers Providence, Rhode Island 02940-9699
Heath B. McLendon
President and This report is submitted for the
Chief Executive Officer general information of the shareholders
of Smith Barney New Jersey Municipals
Lewis E. Daidone Fund Inc. It is not authorized for
Senior Vice President distribution to prospective investors
and Treasurer unless accompanied or preceded by a
current Prospectus for the Fund, which
Joseph P. Deane contains information concerning the
Vice President Fund's investment policies and expenses
and Investment Officer as well as other pertinent information
Paul A. Brook
Controller Salomon Smith Barney is a service mark
of Salomon Smith Barney Inc.
Christina T. Sydor
Secretary Smith Barney New Jersey
Municipals Fund Inc.
Investment Adviser 388 Greenwich Street, MF-2
and Administrator New York, New York 10013
SSB Citi Fund Management LLC
www.smithbarney.com/mutualfunds
Distributor
CFBDS, Inc.
