<PAGE>
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
SMITH BARNEY
NEW JERSEY MUNICIPALS
Fund Inc.
SPECIAL DISCIPLINE SERIES
ANNUAL REPORT
MARCH 31, 2000
[LOGO OF SMITH BARNEY MUTUAL FUNDS]
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
<PAGE>
Smith Barney New Jersey Municipals Fund Inc.
[PHOTO] [PHOTO]
HEATH B. MCLENDON JOSEPH P. DEANE
Chairman Vice President and Investment Officer
Dear Shareholder:
We are pleased to provide the annual report for the Smith Barney New Jersey
Municipals Fund Inc. ("Fund") for the year ended March 31, 2000. We hope you
find this report to be 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 year ended March 31, 2000, the Class A, B and L shares of the Fund,
without sales charges, reported negative total returns of 4.28%, 4.82% and
4.86%, respectively. In comparison, the Lipper, Inc. ("Lipper") peer group
average of New Jersey municipal funds posted a return of negative 2.63% for the
same period. (Lipper is an independent fund-tracking organization.) Over the
one-year period covered by the report, the Fund distributed income dividends
totaling $0.64 per Class A share. For additional performance information please
refer to pages 6 through 8.
Relative to our Lipper peer group, we have a greater percentage of portfolio
assets allocated to New Jersey health care issues. This sector has come under
considerable pressure recently, possibly accounting for the Fund's
underperformance relative to its peer group. We are gradually decreasing our
exposure to the lower quality issues in this sector and reallocating assets to
higher quality issues in sectors where we see the greatest opportunities.
Market and Economic Overview
In our view, bond yields are high enough to adequately reflect the risk of
slightly higher inflation. The period covered by this report was marked by
continued robust U.S. economic growth, historically low inflation and low
unemployment.
The Federal Reserve Board ("Fed") raised interest rates for the fifth time in
nine months, aiming to keep inflation at bay and to curb the nation's rapidly
growing economy.1 Perhaps more significant than the Fed's actions was its
- -----------
1 On May 16, 2000, after this letter was written, the Fed raised interest
rates by 0.50% to 6.50%.
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Smith Barney New Jersey Municipals Fund Inc. 1
<PAGE>
accompanying statement that rapid growth could foster inflationary imbalances
that might undermine the economy's record expansion. We believe that this
cautionary statement may hint at a slightly more aggressive approach by the Fed
in the months ahead. However, we think bond yields are high enough to adequately
reflect the risk of slightly higher inflation. Indeed, we think that bond yields
may be near their peak.
We believe performance in the bond market during the period has been a direct
result of Fed monetary policy actions. While presumably aimed at stock market
exuberance, it is the bond market that has taken the brunt of any correction on
fears of further Fed rate increases. In our opinion, the current lack of
inflationary evidence defies a historically tight labor market and reinforces
the influence of technology and the power of global pricing constraints.
The bond market experienced a tough year in 1999. Tax-loss selling and asset
allocation shifts out of municipal securities precipitated massive outflows in
the fourth quarter, prompting bond funds to sell their municipal bond holdings.
This trend drove yields even higher and sent the net asset values of many funds
lower, accelerating outflows and leaving bond dealers reluctant to hold
municipal securities. Additionally, the bond market has suffered in recent
months from uncertainty over the outlook for future Fed monetary policy, given
the resilience of stock markets and the apparent acceleration of consumer demand
at the end of the year. Also, we have noted that supply in the new issue market
is down substantially from last year.
These factors, in addition to the considerable momentum going into 2000, may
mean that there is less financial restraint in the economy than previously
believed. The pace of demand growth is surpassing even optimistic assessments of
the economy's speed limit, threatening to reignite inflation and underscoring
the need for Fed vigilance and restraint.
Under "normal" market conditions, municipal investors pay for the tax-free
income benefits by getting a lower return. Today, however, investors are saving
on taxes without sacrificing returns. It is possible to buy double- and triple-A
rated bonds yielding nearly 100% or more of similar maturity U.S. Treasury
bonds, well above the historical average of roughly 80%. We think these yields
represent an extraordinary favorable value for municipal securities.
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. The Garden State has a diverse and broad
economy that continues to show moderate growth and recent results have exceeded
projections.2 The strength of the economy and conservative budgeting
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2 Source: Fitch IBCA, Inc. an internationally recognized rating agency
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2 2000 Annual Report to Shareholders
<PAGE>
have been responsible for sustained favorable operations, with revenues
consistently over estimates and maintenance at a sound level of surplus. Debt
remains at a moderate level, but has been increasing, due primarily to
transportation, and should continue to expand as the legislature needs to
address a large school-building program as well as new transportation funding.
Formerly dependent on manufacturing, New Jersey now relies heavily on services
and trade.
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 for the most part 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 state, as
transportation projects supported by federal and state appropriations have been
major factors in transportation improvements. Moreover, 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 Fund seeks to provide New Jersey investors with as high a level of
income3 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.
As of March 31, 2000, approximately 79.3% of the Fund's holdings were rated
investment grade (BBB/Baa and higher) by either Standard and Poor's Ratings
Service or Moody's Investors Service, Inc., and 46.1% of the Fund's portfolio
was invested in AAA-rated bonds, the highest rating. (Standard and Poor's
Ratings Service and Moody's Investors Service, Inc. are two major credit
reporting and bond rating agencies.) The Fund's largest holdings are
concentrated in hospital bonds (20.4%), industrial development bonds (16.2%) and
transportation bonds (13.7%). The Fund's average stated call protection was 7
years as of March 31, 2000.
While no guarantees can be made, our belief that municipal securities are
undervalued has led us to rebalance the Fund to capitalize on what we believe
will be a future bullish trend. In general, this means buying bonds carrying
- ------------
3 Please note that a portion of the Fund's income may be subject to the
Alternative Minimum Tax ("AMT").
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Smith Barney New Jersey Municipals Fund Inc. 3
<PAGE>
maturities of 20 years or longer, with solid credit ratings and trading below
fair market value in price. We are targeting, among others, general obligation
bonds and high-grade revenue credits like water, sewer and toll-road bonds.
Our investment objective for the Fund has been to maximize the dividend yield.
In our view, the municipal bond market has provided us with excellent
opportunities during the reporting period. Since interest rates have increased,
we have been able to invest our excess cash at higher yields.
Our investment strategy going forward will be three-fold:
. We are lengthening maturities in the portfolio to take advantage of the
inexpensive valuations of municipal bonds relative to U.S. Treasuries;
. We are focusing on investing in high-grade issues; and
. We are investing in discount paper, as this is where we believe we can
obtain the best value.
Our goal is to sell off some of our intermediate-term maturities that were
defensive and stretch out longer on the yield curve to lock in today's higher
rates. We see the best opportunity for reward right now at the long end of the
curve. (The yield curve is the graphical depiction of the relationship between
the yield on bonds of the same credit quality but different maturities.)
Market Outlook
We think the U.S. economy should remain stable this year, as low unemployment
and strong consumer confidence will likely support demand for goods.
Additionally, we think that the Fed has engineered a good balance between strong
economic growth and an "acceptable" rate of inflation.
Regarding further Fed tightenings, we think that such future moves would not be
detrimental to the bond market, particularly as the U.S. Treasury continues to
pay down debt and inflation remains moderate. It is our belief that any further
Fed policy actions have already been comfortably priced into the bond market.
Also, we believe that the good news is that the economy's "soft landing" is
likely to be at a higher annual growth rate than was previously thought possible
due to the possible emergence of a "New Economy," where technological advances
can spur economic growth without inflationary pressures because of higher
productivity.
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4 2000 Annual Report to Shareholders
<PAGE>
In our judgment, a number of factors bode well for the municipal market. The new
issue market is expected to shrink this year, boosting demand for bonds
currently outstanding and enhancing interest for the roughly $175 billion of new
municipal securities expected in 2000. Fiscal trends are another major plus.
During past economic downturns, some municipal issuers facing declining tax
receipts were hard-pressed to repay their bond obligations. Today, many state
and local governments boast budget surpluses. We believe these surpluses
indicate that investors will feel more comfortable holding municipal securities,
even in a downturn. And lastly, recent narrowing of spreads in the taxable
market has made alternatives less attractive. All of these trends help to
explain why we remain optimistic about the prospects for the municipal bond
market.
In closing, thank you for investing in the Smith Barney New Jersey Municipals
Fund Inc. 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
April 15, 2000
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Smith Barney New Jersey Municipals Fund Inc. 5
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Historical Performance -- Class A Shares
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Net Asset Value
------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns(1)
================================================================================
3/31/00 $ 13.26 $ 11.96 $ 0.64 $ 0.10 $ 0.00 (4.28)%
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
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
================================================================================
Total $ 7.14 $ 0.86 $ 0.06
================================================================================
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Historical Performance -- Class B Shares
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Net Asset Value
------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns(1)
================================================================================
3/31/00 $ 13.25 $ 11.95 $ 0.57 $ 0.10 $ 0.00 (4.82)%
- --------------------------------------------------------------------------------
3/31/99 13.44 13.25 0.59 0.23 0.00 4.80
- --------------------------------------------------------------------------------
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
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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+
================================================================================
Total $4.57 $ 0.68 $0.01
================================================================================
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6 2000 Annual Report to Shareholders
<PAGE>
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Historical Performance -- Class L Shares
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Net Asset Value
------------------
Beginning End Income Capital Gain Return Total
Year Ended of Year of Year Dividends Distributions of Capital Returns(1)
================================================================================
3/31/00 $ 13.25 $ 11.95 $ 0.56 $ 0.10 $ 0.00 (4.86)%
- --------------------------------------------------------------------------------
3/31/99 13.43 13.25 0.58 0.23 0.00 4.78
- --------------------------------------------------------------------------------
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
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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+
================================================================================
Total $3.19 $ 0.39 $ 0.00
================================================================================
It is the Fund's policy to distribute dividends monthly and capital gains, if
any, annually.
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Average Annual Total Returns
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Without Sales Charges(1)
----------------------------------
Class A Class B Class L
================================================================================
Year Ended 3/31/00 (4.28)% (4.82)% (4.86)%
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Five Years Ended 3/31/00 4.85 4.29 4.23
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Ten Years Ended 3/31/00 6.53 N/A N/A
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Inception* through 3/31/00 7.09 4.72 5.51
================================================================================
With Sales Charges(2)
----------------------------------
Class A Class B Class L
================================================================================
Year Ended 3/31/00 (8.09)% (8.88)% (6.68)%
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Five Years Ended 3/31/00 3.99 4.13 4.02
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Ten Years Ended 3/31/00 6.10 N/A N/A
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Inception* through 3/31/00 6.72 4.72 5.31
================================================================================
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Smith Barney New Jersey Municipals Fund Inc. 7
<PAGE>
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Cumulative Total Returns
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Without Sales Charges(1)
================================================================================
Class A (3/31/90* through 3/31/00) 88.32%
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Class B (Inception* through 3/31/00) 40.72
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Class L (Inception* through 3/31/00) 32.89
================================================================================
(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 also 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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8 2000 Annual Report to Shareholders
<PAGE>
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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+
- --------------------------------------------------------------------------------
March 1990-- March 2000
[GRAPH]
SB NEW JERSEY LEHMAN
MUNICIPALS BROS MUNICIPAL
------------- --------------
3/31/90 9,597 10,000
Mar-91 10,546 10,922
Mar-92 11,623 12,013
Mar-93 13,191 13,517
Mar-94 13,410 13,831
Mar-95 14,264 14,860
Mar-96 15,372 16,105
Mar-97 16,255 16,982
Mar-98 17,912 18,801
Mar-99 18,881 19,967
Mar-00 18,074 19,950
+ Hypothetical illustration of $10,000 invested in Class A shares on March
31, 1999, 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 March 31, 2000. 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. 9
<PAGE>
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Portfolio Highlights (unaudited) March 31, 2000
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Portfolio Breakdown
[GRAPH]
Transportation 13.7%
Solid Waste 2.9%
Life Care 5.2%
General Obligation 8.4%
Hospital 20.4%
Utilities 6.8%
Other 10.6%
Education 9.1%
Industrial Development 16.2%
Pollution Control 2.7%
Housing 4.0%
Summary of Investments by Combined Ratings
Standard & Percentage of
Moody's and/or Poor's Total Investments
- ---------------------------------------------------
Aaa AAA 46.1%
Aa AA 13.3
A A 2.0
Baa BBB 17.9
Ba BB 3.5
B B 2.1
VMIG 1 A-1 0.3
NR NR 14.8
-----
100.0%
=====
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10 2000 Annual Report to Shareholders
<PAGE>
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Schedule of Investments March 31, 2000
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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 $ 633,500
1,000,000 AAA Zero coupon due 8/1/15 423,750
1,845,000 AAA Zero coupon due 2/1/19 620,381
2,845,000 AAA Zero coupon due 2/1/23 743,256
2,845,000 AAA Zero coupon due 2/1/27 583,225
750,000 AAA Hamilton Township-Mercer County Board of Education,
COP, Series B, FSA-Insured, 7.000% due 12/15/15 779,062
1,000,000 AAA Lumberton Township School District, COP, MBIA-Insured,
6.100% due 10/1/13 1,030,000
550,000 Aa3* New Jersey EDA Revenue, Princeton Montessori Society,
LOC Banque National De Paris, Series S, 6.500% due 6/1/12 565,125
New Jersey State Educational Facilities Financing
Authority Revenue:
950,000 NR Caldwell College, Series A, 7.250% due 7/1/25 971,375
2,700,000 NR Fairleigh Dickinson University, Series C,
6.625% due 7/1/23 2,676,375
550,000 BBB Monmouth University, Series D, 5.125% due 7/1/24 468,188
1,250,000 AAA Seton Hall University Project, Series F, AMBAC-Insured,
5.000% due 7/1/21 1,123,438
St. Peters College, Series B:
1,000,000 BBB 5.375% due 7/1/18 896,250
2,000,000 BBB 5.500% due 7/1/27 1,755,000
2,255,000 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) 2,243,725
Rutgers State University Revenue:
600,000 AA Refunding, Series A, 6.400% due 5/1/13 657,750
1,905,000 AA Series U, 5.000% due 5/1/21 1,714,500
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17,884,900
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General Obligation -- 8.4%
850,000 AAA Essex County Improvement Authority, Lease Revenue, GO,
AMBAC-Insured, 5.125% due 4/1/29 769,250
200,000 AAA Hudson County GO, FGIC-Insured, 6.550% due 7/1/10 222,500
500,000 AAA Jersey City GO, Series 1991B, FSA-Insured,
8.400% due 5/15/06 591,250
650,000 AAA Lakewood Township School District, GO, Series 92,
AMBAC-Insured, 6.250% due 2/15/11 707,687
Morris Township GO:
550,000 Aa1* 6.550% due 7/1/09 610,500
550,000 Aa1* 6.550% due 7/1/10 613,250
500,000 Aa1* 6.550% due 7/1/11 560,000
9,000,000 AA+ New Jersey State GO, 4.500% due 2/1/18 7,728,750
1,500,000 AAA North Bergen Township GO, FSA-Insured,
8.000% due 8/15/07 1,777,500
</TABLE>
See Notes to Financial Statements.
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Smith Barney New Jersey Municipals Fund Inc. 11
<PAGE>
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Schedule of Investments (continued) March 31, 2000
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<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
==============================================================================================
<S> <C> <C> <C>
General Obligation -- 8.4% (continued)
$ 500,000 AAA South Amboy GO, MBIA-Insured, 6.375% due 12/1/10 $ 524,375
854,000 AAA Weehawken Township GO, FSA-Insured, 6.350% due 7/1/07 886,025
West Windsor/Plainsboro GO, Regional School District:
180,000 AA 6.750% due 4/1/06 196,875
490,000 AA 6.750% due 4/1/07 540,838
435,000 AA 6.800% due 4/1/08 485,569
170,000 AA 6.800% due 4/1/09 191,250
- ----------------------------------------------------------------------------------------------
16,405,619
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Hospital -- 20.4%
Camden County Improvement Authority Revenue:
3,775,000 B1* Health Care Redevelopment Project, Cooper Health,
5.875% due 2/15/15 2,727,437
1,000,000 AAA Health Systems, Catholic Health East, Series B,
AMBAC-Insured, 5.000% due 11/15/18 905,000
2,500,000 AAA New Jersey EDA, Nursing Home Revenue, RWJ Health
Care Corp., FSA-Insured, 6.500% due 7/1/24 2,634,375
New Jersey Health Care Facilities Financing Authority Revenue:
1,715,000 Aaa* Bayonne Hospital Obligation Group, FSA-Insured,
4.750% due 7/1/27 1,432,025
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 1,251,000
Unrefunded Balance:
200,000 AAA 6.500% due 7/1/12 208,000
850,000 AAA 6.500% due 7/1/21 886,125
Columbus Hospital, Series A:
450,000 B 7.200% due 7/1/01 451,368
1,000,000 B 7.500% due 7/1/21 937,500
2,300,000 Baa2* Deborah Heart & Lung Center, 6.300% due 7/1/23 2,147,625
750,000 BBB+ East Orange General Hospital, Series B, 7.750% due 7/1/20 766,650
1,250,000 AAA Hackensack University Medical Center, MBIA-Insured,
Series B, 5.200% due 1/1/28 1,129,687
Medical Center at Princeton Obligation Group,
AMBAC-Insured:
1,000,000 AAA 5.000% due 7/1/23 883,750
750,000 AAA 5.000% due 7/1/28 654,375
825,000 AAA Medical Center of Ocean County, FSA-Insured,
6.750% due 7/1/20 863,156
825,000 AAA Muhlenberg Regional Medical Center, Series B,
AMBAC-Insured, 8.000% due 7/1/18 834,240
295,000 Ba3* Newcomb Medical Center, Series A, 7.875% due 7/1/03 300,460
Pascack Valley Hospital Association:
2,000,000 BBB- 5.125% due 7/1/18 1,555,000
5,000,000 BBB- 5.125% due 7/1/28 3,631,250
</TABLE>
See Notes to Financial Statements.
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12 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) March 31, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
==============================================================================================
<S> <C> <C> <C>
Hospital -- 20.4% (continued)
$3,700,000 NR Raritan Bay Medical Center, 7.250% due 7/1/27 $ 3,325,375
2,000,000 Baa1* Southern Ocean County Hospital, Series A,
6.250% due 7/1/23 1,867,500
St. Barnabas Hospital Obligation Group, MBIA-Insured:
750,000 AAA Zero coupon due 7/1/16 299,062
3,700,000 AAA Zero coupon due 7/1/17 1,382,875
3,450,000 AAA Zero coupon due 7/1/23 875,437
2,500,000 Aaa* St. Barnabas Medical Center, MBIA-Insured, Series A,
5.000% due 7/1/23 2,206,250
2,000,000 BBB- St. Elizabeth's Hospital, 6.000% due 7/1/14 1,770,000
2,750,000 Baa1* St. Mary Hospital, 5.875% due 7/1/12 2,849,687
1,500,000 AAA University of Medicine & Dentistry, Series A,
MBIA-Insured, 5.000% due 9/1/22 1,331,250
- ----------------------------------------------------------------------------------------------
40,106,459
- ----------------------------------------------------------------------------------------------
Housing: Multi-Family -- 2.7%
1,500,000 AAA Newark Housing Financing Corp., Mortgage Revenue,
Refunding, Manor Apartments, Series A, FHA-Insured,
7.500% due 2/15/24 1,584,375
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 2,664,750
1,000,000 AA Regency Park Project, Series H, GNMA-Collateralized,
7.700% due 11/1/30 1,022,510
- ----------------------------------------------------------------------------------------------
5,271,635
- ----------------------------------------------------------------------------------------------
Housing: Single-Family -- 1.3%
2,250,000 AAA New Jersey State Housing & Mortgage Finance Agency
Revenue, Home Buyer, 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) 389,025
- ----------------------------------------------------------------------------------------------
2,644,650
- ----------------------------------------------------------------------------------------------
Industrial Development -- 16.2%
650,000 BBB+ Essex County Improvement Authority, Lease Revenue,
6.600% due 4/1/14 700,375
New Jersey EDA, EDR:
1,495,000 BBB Preston Trucking Co., 6.500% due 9/1/14 1,511,819
945,000 Aaa* Series L, 7.100% due 12/1/11 (b) 983,981
1,320,000 NR Station Plaza Park and Ride LP Project,
6.625% due 7/1/03 (b) 1,329,900
1,000,000 NR Trane Division, 1990 Project, 9.500% due 9/1/00 1,012,590
1,235,000 NR Zirbser-Greenbriar Inc., Series A, 7.375% due 7/15/03 1,264,331
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) March 31, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
==============================================================================================
<S> <C> <C> <C>
Industrial Development -- 16.2% (continued)
$1,500,000 BB+ New Jersey EDA, Electric Energy Facility Revenue,
Vineland Cogeneration LP Project, 7.875% due 6/1/19 (b) $1,573,125
1,000,000 AAA New Jersey EDA, Natural Gas Facilities Revenue, NUI Corp.,
Series A, AMBAC-Insured, 6.350% due 10/1/22 1,038,750
New Jersey EDA, Revenue:
Cadbury Corp. Project, ACA-Insured, Series A:
750,000 A 5.500% due 7/1/18 711,562
1,250,000 A 5.500% due 7/1/28 1,150,000
First Mortgage, Fellowship Village, Series A:
2,000,000 BBB- 5.500% due 1/1/18 1,630,000
2,500,000 BBB- 5.500% due 1/1/25 1,943,750
Harrogate Inc., Series A:
2,000,000 BBB 5.750% due 12/1/16 1,867,500
1,500,000 BBB 5.875% due 12/1/26 1,355,625
1,000,000 A+ Morris Hall/St. Lawrence Project, Series A,
LOC CoreStates First Bank, 6.250% due 4/1/25 1,015,000
970,000 Aa3* Series A-3, (Pre-Refunded -- Escrowed with U.S.
government securities to 12/1/02 Call @ 101.50),
6.550% due 12/1/07 (b)(d) 999,100
3,750,000 NR Sr. Mortgage, Arbor Glen, Series A, 6.000% due 5/15/28 2,887,500
3,890,000 BB New Jersey EDA, Special Facility Revenue, Continental
Airlines Inc. Project, 5.500% due 4/1/28 (b) 3,112,000
1,000,000 AAA New Jersey EDA, State Contract, Economic Recovery
Revenue, Series A, FSA-Insured, 6.000% due 3/15/21 1,012,500
3,000,000 Aaa* New Jersey EDA, State Lease Revenue, Bergen County
Administration Complex, MBIA-Insured,
4.750% due 11/15/26 2,550,000
1,500,000 BBB+ New Jersey EDA, Terminal Revenue, GATX Terminal Corp.,
Series 1994, 7.300% due 9/1/19 1,584,375
500,000 A-1+ New Jersey EDA, Water Facilities Revenue, United Water
Project, Series C, AMBAC-Insured, 4.150% due
11/1/25 (b)(c) 500,000
- ----------------------------------------------------------------------------------------------
31,733,783
- ----------------------------------------------------------------------------------------------
Life Care -- 5.2%
New Jersey EDA, EDR:
905,000 Aaa* Eagle Rock Convalescent, Inc., GNMA-Collateralized,
7.375% due 12/20/06 944,847
5,250,000 BBB- Refunding United Methodist Homes, 5.125% due 7/1/25 3,845,625
New Jersey EDA Revenue, First Mortgage, Keswick Pines:
2,885,000 NR 5.700% due 1/1/18 2,398,156
2,800,000 NR 5.750% due 1/1/24 2,254,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
14 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) March 31, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
==============================================================================================
<S> <C> <C> <C>
Life Care -- 5.2% (continued)
$ 735,000 AAA New Jersey Health Care Facilities Financing Authority Revenue,
Spectrum for Living, Series B, FHA-Insured,
6.500% due 2/1/22 $ 757,969
- ----------------------------------------------------------------------------------------------
10,200,597
- ----------------------------------------------------------------------------------------------
Miscellaneous -- 10.1%
615,000 A Atlantic City COP, Series 1991, 8.875% due 1/15/13 803,344
2,500,000 AAA Atlantic County COP, Public Facilities Lease Agreements,
FGIC-Insured, 7.400% due 3/1/09 (c) 2,906,250
5,000,000 AAA Casino Reinvestment Development Authority Parking Fee
Revenue, Series A, FSA-Insured, 5.250% due 10/1/16 4,825,000
1,000,000 AAA Essex County Improvement Authority, Parking Facilities
Revenue, AMBAC-Insured, 5.000% due 10/1/17 926,250
240,000 A+ Hudson County Improvement Authority, (Essential Purpose
Pooled Governmental Loan Project), Series 1986,
Remarketed 11/1/90, 7.600% due 8/1/25 246,540
1,525,000 AAA Monmouth County Improvement Authority Revenue,
Governmental Loan, AMBAC-Insured, 5.750% due 12/1/19 1,538,344
1,000,000 Aaa* Morristown Parking Authority, Guaranteed Revenue,
FSA-Insured, 5.150% due 8/1/25 910,000
1,750,000 AAA New Brunswick Housing Authority, Lease Revenue, Rutgers
University, FGIC-Insured, 4.750% due 7/1/18 1,546,563
1,000,000 AAA New Brunswick Parking Authority Revenue, Series A,
FGIC-Insured, 6.500% due 9/1/19 1,033,750
480,000 BBB++ New Jersey EDA, EDR, National Association of Accountants,
7.650% due 7/1/09 495,000
1,000,000 NR New Jersey EDA, Waste Paper Recycling Revenue,
(Marcal Paper Mills Inc. Project), 8.500% due 2/1/10 (b) 1,097,500
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 3,431,250
- ----------------------------------------------------------------------------------------------
19,759,791
- ----------------------------------------------------------------------------------------------
Pollution Control -- 2.7%
Middlesex County Pollution Control Authority Financing
Revenue, Amerada Hess Corp.:
1,000,000 NR 7.875% due 6/1/22 1,086,250
2,000,000 NR 6.875% due 12/1/22 2,020,000
2,030,000 NR New Jersey EDA, Revenue, Sewer Facilities,
Atlantic City Sewer Co., 7.250% due 12/1/11 (b) 2,131,500
- ----------------------------------------------------------------------------------------------
5,237,750
- ----------------------------------------------------------------------------------------------
Solid Waste -- 2.9%
1,950,000 BB++ Atlantic County Utilities Authority, Solid Waste Revenue,
7.125% due 3/1/16 1,859,813
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) March 31, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
==============================================================================================
<S> <C> <C> <C>
Solid Waste -- 2.9% (continued)
$2,500,000 Aa2* Mercer County Improvement Authority, County Guaranteed
Solid Waste Revenue, 5.750% due 9/15/16 $ 2,540,625
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 1,275,000
- ----------------------------------------------------------------------------------------------
5,675,438
- ----------------------------------------------------------------------------------------------
Transportation -- 13.7%
800,000 Baa1* Essex County Improvement Authority, Airport Project
Revenue, 6.800% due 11/1/21 (b) 811,000
1,000,000 Baa1* New Jersey EDA, EDR, (American Airlines Inc. Project),
7.100% due 11/1/31 (b) 1,021,250
6,000,000 AAA New Jersey EDA, Transportation Project, Sublease, Series A,
FSA-Insured, 5.250% due 5/1/17 5,767,500
3,000,000 AA- New Jersey State Highway Authority Garden State Parkway,
General Revenue, Series Parkway, 5.625% due 1/1/30 2,955,000
3,780,000 AA New Jersey State Transportation Trust Fund Authority,
Transportation System, Series A, 5.000% due 6/15/17 3,491,775
Port Authority of New York & New Jersey,
Special Obligation Revenue:
3,500,000 NR 5th Installment, 6.750% due 10/1/19 (b) 3,561,250
2,000,000 AAA 96th Series, FGIC-Insured, 6.600% due 10/1/23 (b) 2,097,500
7,885,000 AAA South Jersey Transportation Authority, Transportation
System Revenue, AMBAC-Insured, 5.125% due 11/1/22 7,204,919
- ----------------------------------------------------------------------------------------------
6,910,194
- ----------------------------------------------------------------------------------------------
Utilities -- 6.8%
700,000 Baa1* Beachwood Sewer Authority Revenue, Jr. Lien,
6.500% due 12/1/12 730,625
1,000,000 AAA Bordentown Sewer Authority Revenue, Series C,
MBIA-Insured, 6.900% due 12/1/16 1,029,870
1,000,000 AAA Camden County Municipal Utilities Authority,
Sewer Revenue, FGIC-Insured, 5.250% due 7/15/17 956,250
2,500,000 AAA Hamilton Township, Atlantic County Municipal Utilities
Authority, FGIC-Insured, 5.000% due 8/15/17 2,309,375
1,385,000 AAA Kearny Municipal Utilities Authority Revenue,
FGIC-Insured, 7.300% due 11/15/18 1,623,913
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 1,150,500
1,000,000 AAA Middlesex County Utilities Authority, Sewer Revenue,
Series A, MBIA-Insured, 6.250% due 8/15/10 1,076,250
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 1,028,750
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (continued) March 31, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(a) SECURITY VALUE
==============================================================================================
<S> <C> <C> <C>
Utilities -- 6.8% (continued)
$ 750,000 AAA Old Bridge Township Municipal Utilities Authority Revenue,
FGIC-Insured, 6.400% due 11/1/09 $ 794,063
1,000,000 AAA Southeast Morris County Municipal Utilities Authority,
Water Revenue, Series A, FGIC-Insured, 6.500% due 1/1/11 1,032,300
Union County Utilities Authority:
Capital Appreciation, County Deficiency, Series C2:
310,000 Aaa* Zero coupon due 6/15/13 150,738
310,000 Aaa* Zero coupon due 6/15/14 141,438
310,000 Aaa* Zero coupon due 6/15/15 132,525
305,000 Aaa* Zero coupon due 6/15/16 122,000
310,000 Aaa* Zero coupon due 6/15/17 116,250
310,000 Aaa* Zero coupon due 6/15/18 108,888
1,000,000 AAA Sr. Lease Obligation, Ogden Martin, Series A,
5.000% due 6/1/23 (b) 878,750
- ----------------------------------------------------------------------------------------------
13,382,485
- ----------------------------------------------------------------------------------------------
Water and Sewer -- 0.5%
1,000,000 NR New Jersey EDA Water Facilities Revenue, (American
Water Co. Inc. Project), 7.400% due 11/1/01 (b) 1,020,000
- ----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $204,859,216**) $196,233,301
==============================================================================================
</TABLE>
(a) All ratings are by Standard & Poor's Ratings Service, except those
identified by an asterisk (*), which are rated by Moody's Investors
Service, Inc., or those which are identified by a double dagger (++) are
rated by Fitch IBCA, Inc.
(b) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(c) Variable rate obligation payable at par on demand at any time on no more
than seven days notice.
(d) Pre-Refunded bonds escrowed with U.S. government securities and bonds
escrowed to maturity with U.S. government securities are considered by the
manager to be triple-A rated even if issuer has not applied for new
ratings.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 18 through 20 for definitions of ratings and certain security
descriptions.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings (unaudited)
- --------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings 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" and "B" are regarded, on balance, as predominantly and
and B speculative with respect to the issuer's capacity to pay interest and
repay principal in accordance with the terms of the obligation. "BB"
indicates the lowest degree of speculation and "B" the highest degree of
speculation. While such bonds will likely have some quality and
protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.
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.
- --------------------------------------------------------------------------------
18 2000 Annual Report to Shareholders
<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.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Security Descriptions (unaudtied)
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
20 2000 Annual Report to Shareholders
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Statement of Assets and Liabilities March 31, 2000
- ----------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments, at value (Cost-- $204,859,216) $196,233,301
Cash 50,399
Interest receivable 3,560,983
Receivable for Fund shares sold 730,712
- ----------------------------------------------------------------------------------
Total Assets 200,575,395
- ----------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 371,081
Fund shares purchased 69,526
Investment advisory fees payable 50,244
Administration fees payable 37,065
Distribution fees payable 26,735
Accrued expenses 61,275
- ----------------------------------------------------------------------------------
Total Liabilities 615,926
- ----------------------------------------------------------------------------------
Total Net Assets $199,959,469
==================================================================================
NET ASSETS:
Par value of capital shares $ 16,723
Capital paid in excess of par value 212,337,626
Undistributed net investment income 383,275
Accumulated net realized loss from security transactions (4,152,240)
Net unrealized depreciation of investments (8,625,915)
- ----------------------------------------------------------------------------------
Total Net Assets $199,959,469
==================================================================================
Shares Outstanding:
Class A 11,398,333
--------------------------------------------------------------------------------
Class B 4,609,734
--------------------------------------------------------------------------------
Class L 714,941
--------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $ 11.96
--------------------------------------------------------------------------------
Class B * $ 11.95
--------------------------------------------------------------------------------
Class L ** $ 11.95
--------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 4.17% of net asset value per share) $ 12.46
--------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $ 12.07
==================================================================================
</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.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Year Ended March 31, 2000
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 13,434,042
- --------------------------------------------------------------------------------
EXPENSES:
Distribution fees (Note 4) 699,458
Investment advisory fees (Note 4) 672,124
Administration fees (Note 4) 448,083
Shareholder and system servicing fees 83,169
Audit and legal 35,107
Shareholder communications 24,024
Registration fees 22,057
Pricing service fees 21,050
Directors' fees 14,541
Custody 12,098
Other 10,835
- --------------------------------------------------------------------------------
Total Expenses 2,042,546
- --------------------------------------------------------------------------------
Net Investment Income 11,391,496
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 5):
Realized Loss From Security Transactions
(excluding short-term securities):
Proceeds from sales 77,088,024
Cost of securities sold 81,233,418
- --------------------------------------------------------------------------------
Net Realized Loss (4,145,394)
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation) of Investments:
Beginning of year 9,928,846
End of year (8,625,915)
- --------------------------------------------------------------------------------
Increase in Net Unrealized Depreciation (18,554,761)
- --------------------------------------------------------------------------------
Net Loss on Investments (22,700,155)
- --------------------------------------------------------------------------------
Decrease in Net Assets From Operations $(11,308,659)
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets For the Years Ended March 31,
- --------------------------------------------------------------------------------
2000 1999
================================================================================
OPERATIONS:
Net investment income $ 11,391,496 $ 11,387,917
Net realized gain (loss) (4,145,394) 4,425,358
Increase in net unrealized depreciation (18,554,761) (3,694,376)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations (11,308,659) 12,118,899
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 3):
Net investment income (11,004,883) (11,425,954)
Net realized gains (1,749,720) (4,138,625)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (12,754,603) (15,564,579)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares 33,842,730 37,708,339
Net asset value of shares issued for
reinvestment of dividends 7,394,209 9,304,918
Cost of shares reacquired (65,236,571) (25,846,205)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions (23,999,632) 21,167,052
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (48,062,894) 17,721,372
NET ASSETS:
Beginning of year 248,022,363 230,300,991
- --------------------------------------------------------------------------------
End of year* $199,959,469 $248,022,363
================================================================================
* Includes undistributed (overdistributed)
net investment income of: $ 383,275 $ (3,338)
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
24 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (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"), which, in
turn, is a subsidiary of Citigroup Inc. ("Citigroup"), 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.
Effective October 1999, Citi Fiduciary Trust Company ("CFTC"), another
subsidiary of Citigroup, became the Fund's transfer agent and PFPC Global Fund
Services ("PFPC") became the sub-transfer agent. CFTC receives account fees and
asset-based fees that vary according to the size and type of account. PFPC is
responsible for shareholder recordkeeping and financial processing for all
shareholder accounts and is paid by CFTC. During the period October 1, 1999
through March 31, 2000, the Fund paid transfer agent fees of $32,044 to CFTC.
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 are maximum initial sales charges of 4.00% and 1.00% for Class A and L
shares, respectively. 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
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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.
For the year ended March 31, 2000, SSB and CFBDS received sales charges of
$144,000 and $25,000 on sales of the Fund's Class A and L shares, respectively.
In addition, CDSCs paid to SSB were approximately:
Class A Class B Class L
================================================================================
CDSCs $15,000 $93,000 $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 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 year ended March 31, 2000, total Distribution Plan fees
incurred were:
Class A Class B Class L
================================================================================
Distribution Plan Fees $228,500 $404,862 $66,096
================================================================================
All officers and one Director of the Fund are employees of SSB.
5. Investments
During the year ended March 31, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $46,810,016
- --------------------------------------------------------------------------------
Sales 77,088,024
================================================================================
At March 31, 2000, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
================================================================================
Gross unrealized appreciation $ 4,581,307
Gross unrealized depreciation (13,207,222)
- --------------------------------------------------------------------------------
Net unrealized depreciation $ (8,625,915)
================================================================================
- --------------------------------------------------------------------------------
26 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
6. Capital Loss Carryforward
At March 31, 2000, the Fund had, for Federal income tax purposes, approximately
$1,315,000 of unused capital loss carryforwards expiring March 31, 2008 which
are available to offset future capital gains. To the extent that these
carryforward losses are used to offset capital gains, it is probable that the
gains so offset will not be distributed.
7. Capital Shares
At March 31, 2000, 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.
At March 31, 2000, total paid-in capital amounted to the following for each
class:
Class A Class B Class L
================================================================================
Total Paid-in Capital $141,101,374 $61,664,443 $9,588,532
================================================================================
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 2000 March 31, 1999
-------------------------- --------------------------
Shares Amount Shares Amount
=============================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 1,907,027 $ 23,527,964 1,710,440 $ 23,029,562
Shares issued on reinvestment 405,630 4,989,583 468,877 6,294,593
Shares reacquired (3,701,369) (45,420,891) (1,171,864) (15,777,162)
- ---------------------------------------------------------------------------------------------
Net Increase (Decrease) (1,388,712) $(16,903,344) 1,007,453 $ 13,546,993
=============================================================================================
Class B
Shares sold 577,215 $ 7,166,572 834,214 $ 11,214,455
Shares issued on reinvestment 167,342 2,056,689 198,587 2,663,886
Shares reacquired (1,367,865) (16,785,900) (694,084) (9,335,744)
- ---------------------------------------------------------------------------------------------
Net Increase (Decrease) (623,308) $ (7,562,639) 338,717 $ 4,542,597
=============================================================================================
Class L+
Shares sold 248,648 $ 3,148,194 256,602 $ 3,464,322
Shares issued on reinvestment 28,338 347,937 25,853 346,439
Shares reacquired (248,369) (3,029,780) (54,400) (733,299)
- ---------------------------------------------------------------------------------------------
Net Increase 28,617 $ 466,351 228,055 $ 3,077,462
=============================================================================================
+ On June 12, 1998, Class C shares were renamed Class L shares
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 27
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended March 31:
<TABLE>
<CAPTION>
Class A Shares 2000(1) 1999(1) 1998 1997 1996
==================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 13.26 $ 13.44 $ 12.92 $ 12.88 $ 12.62
- --------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.65 0.66 0.70 0.70 0.70
Net realized and unrealized gain (loss) (1.21) 0.05 0.59 0.02 0.26
- --------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.56) 0.71 1.29 0.72 0.96
- --------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.64) (0.66) (0.71) (0.68) (0.70)
Net realized gains (0.10) (0.23) (0.06) -- --
- --------------------------------------------------------------------------------------------------
Total Distributions (0.74) (0.89) (0.77) (0.68) (0.70)
- --------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 11.96 $ 13.26 $ 13.44 $ 12.92 $ 12.88
- --------------------------------------------------------------------------------------------------
Total Return (4.28)% 5.41% 10.20% 5.74% 7.77%
- --------------------------------------------------------------------------------------------------
Net Assets, End of Year(millions) $ 136 $ 170 $ 158 $ 148 $ 154
- --------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.74% 0.75% 0.75% 0.76% 0.84%
Net investment income 5.26 4.89 5.22 5.44 5.41
- --------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 21% 52% 55% 36% 22%
==================================================================================================
(1) Per share amounts have been calculated using the monthly average shares method.
</TABLE>
- --------------------------------------------------------------------------------
28 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended March 31:
<TABLE>
<CAPTION>
Class B Shares 2000(1) 1999(1) 1998 1997 1996
==========================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 13.25 $ 13.44 $ 12.92 $ 12.88 $ 12.62
- ----------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.59 0.59 0.63 0.64 0.63
Net realized and unrealized gain (loss) (1.22) 0.04 0.59 0.02 0.26
- ----------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.63) 0.63 1.22 0.66 0.89
- ----------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.57) (0.59) (0.64) (0.62) (0.63)
Net realized gains (0.10) (0.23) (0.06) -- --
- ----------------------------------------------------------------------------------------------------------
Total Distributions (0.67) (0.82) (0.70) (0.62) (0.63)
- ----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 11.95 $ 13.25 $ 13.44 $ 12.92 $ 12.88
- ----------------------------------------------------------------------------------------------------------
Total Return (4.82)% 4.80% 9.66% 5.23% 7.20%
- ----------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 55,108 $ 69,350 $ 65,773 $ 62,249 $ 63,272
- ----------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.26% 1.28% 1.27% 1.28% 1.36%
Net investment income 4.74 4.37 4.70 4.92 4.90
- ----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 21% 52% 55% 36% 22%
==========================================================================================================
(1) Per share amounts have been calculated using the monthly average shares method.
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 29
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of capital stock outstanding throughout each year
ended March 31:
<TABLE>
<CAPTION>
Class L Shares 2000(1) 1999(1)(2) 1998 1997 1996
==============================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 13.25 $ 13.43 $ 12.92 $ 12.88 $ 12.62
- --------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income 0.59 0.58 0.61 0.63 0.62
Net realized and unrealized gain (loss) (1.23) 0.05 0.59 0.02 0.27
- --------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.64) 0.63 1.20 0.65 0.89
- --------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.56) (0.58) (0.63) (0.61) (0.63)
Net realized gains (0.10) (0.23) (0.06) -- --
- --------------------------------------------------------------------------------------------------------------
Total Distributions (0.66) (0.81) (0.69) (0.61) (0.63)
- --------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 11.95 $ 13.25 $ 13.43 $ 12.92 $ 12.88
- --------------------------------------------------------------------------------------------------------------
Total Return (4.86)% 4.78% 9.50% 5.17% 7.17%
- --------------------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 8,544 $ 9,093 $ 6,153 $ 4,861 $ 3,812
- --------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.32% 1.32% 1.39% 1.32% 1.41%
Net investment income 4.70 4.32 4.58 4.88 4.82
- --------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 21% 52% 55% 36% 22%
==============================================================================================================
(1) Per share amounts have been calculated using the monthly average shares method.
(2) On June 12, 1998, Class C shares were renamed Class L shares.
</TABLE>
- --------------------------------------------------------------------------------
30 2000 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditor's' Report
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of
Smith Barney New Jersey Municipals Fund Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the Smith Barney New Jersey Municipals Fund Inc.
as of March 31, 2000, the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended and the financial highlights for each of the years in
the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of March 31, 2000, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion,the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Smith Barney New Jersey Municipals Fund Inc. as of March 31, 2000, the results
of its operations for the year then ended, the changes in its net assets for
each of the years in the two-year period then ended and financial highlights for
each of the years in the five-year period then ended, in conformity with
accounting principles generally accepted in the United States of America.
/S/ KPMG LLP
New York, New York
May 11, 2000
- --------------------------------------------------------------------------------
Smith Barney New Jersey Municipals Fund Inc. 31
<PAGE>
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes the Fund hereby designates for the fiscal year ended
March 31, 2000:
. 100% of the dividends paid by the Fund from net investment income as
tax-exempt for regular Federal income tax purposes.
. Long-term capital gain distributions paid of $1,553,443.
- --------------------------------------------------------------------------------
32 2000 Annual Report to Shareholders
<PAGE>
[LOGO OF SALOMON SMITH BARNEY]
Directors
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt Dorsett
Elliot Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon, Chairman
Cornelius Rose
James J. Crisona, Emeritus
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Joseph P. Deane
Vice President
and Investment Officer
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Adviser
and Administrator
SSB Citi Fund Management LLC
Distributor
CFBDS, Inc.
Custodian
PFPC Trust Company
Transfer Agent
Citi Fiduciary Trust Company
388 Greenwich Street, 22nd Floor
New York, New York 10013
Sub-Transfer Agent
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island 02940-9699
This report is submitted for the general information of the shareholders of
Smith Barney New Jersey Municipals Fund Inc. It is not authorized for
distribution to prospective investors unless accompanied or preceded by a
current Prospectus for the Fund, which contains information concerning the
Fund's investment policies and expenses as well as other pertinent information.
If used as sales material after June 30, 2000, this report must be accompanied
by performance information for the most recently completed calendar quarter.
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Smith Barney New Jersey
Municipals Fund Inc.
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com/mutualfunds
FD0370 5/00
