<PAGE>
DESCRIPTION OF ART WORK ON REPORT COVER
Small box above fund name showing palm trees
in front of a high-rise building.
SMITH BARNEY
INTERMEDIATE
1994
ANNUAL MATURITY
REPORT
CALIFORNIA
MUNICIPALS
FUND
-------------------
NOVEMBER 30, 1994
SMITH BARNEY MUTUAL FUNDS
[LOGO] INVESTING FOR YOUR FUTURE.
EVERYDAY.
<PAGE>
INTERMEDIATE MATURITY CALIFORNIA MUNICIPALS FUND
DEAR SHAREHOLDER:
We are pleased to present the annual report and
audited financial statements for the fiscal year ended November 30, 1994
for
Smith Barney Intermediate Maturity California Municipals Fund. Below we
have
provided a summary of economic and market conditions as well as a brief
review
of the investment strategy used by the Fund. We hope you find this
information
useful as you evaluate your investment.
ECONOMIC AND INTEREST RATE OVERVIEW
Over the past year the bond market experienced significant volatility.
After falling to their lowest levels in 15 years in November 1993, yields
on
municipal bonds retraced their path during the course of the year and in
November 1994 they reached their highest levels in three years. The reason
for
this change in interest rates was the improving economy. In late 1993 and
early
1994, the U.S. economy was clearly showing signs of moderate growth. In
addition, a significant amount of leverage also had built up in the fixed
income markets. To curb the possibility of higher inflation and to stem the
growth of leverage in the market, the Federal Reserve began to raise short-
term
interest rates for the first time since 1988. The Federal Reserve continued
this policy of higher short-term rates throughout 1994, raising the Federal
funds rate to 5.50% and the discount rate to 4.75%. Both are sensitive
indicators of the direction of interest rates.
In response to the Federal Reserve's policy of higher short-term
interest rates, our investment strategy has been to keep the portfolio's
average maturity between approximately 8 1/2 and 9 years. This enables the
Fund
to maximize its tax-exempt income while minimizing its exposure to changing
short-term interest rates. All of the securities in the portfolio are rated
investment grade by either Moody's Investor Services, Inc. or Standard &
Poor's
Corporation, and they are also widely diversified by investment sector.
Throughout 1994 the California economy has shown signs of improvement.
Significant gains in employment coupled with a firmer real estate market
have
boded well for state tax revenues. However, we have avoided general
obligation
bonds issued by the state as well as lease revenue bonds that rely on state
budget appropriations to pay bondholders because of our concern over the
state's
ongoing budget deficits and the legislature's inability to balance the
budget.
We have instead invested the Fund's assets in essential service revenue
bonds --
transportation, water and sewer bonds -- and debt issued by local
communities
for redevelopment projects and various civic improvements.
The problems of Orange County's investment pool have dominated the
municipal
market since early December when Orange County filed for bankruptcy. The
1
<PAGE>
investment pool consists of deposits from Orange County, agencies in Orange
County (such as Orange County Sanitation District and Orange County
Transportation Authority) and various local communities. The pool suffered
substantial losses through the use of leverage and risky derivative
investments.
At the end of this fiscal year, approximately 3.70% of the Fund's assets
were
invested in Orange County Development Agency Tax Allocation bonds. Although
these bonds are issued under the name of Orange County, they rely on a
dedicated
property tax to pay debt service. We believe that the bankruptcy proceeding
will
not have any material impact on the ability of the issuer to make its
scheduled
interest and principal payments and therefore will have little, if any,
effect
on the Fund.
PORTFOLIO SUMMARY
Despite the volatility of the municipal market over the past year, our
outlook
for the future is much more positive. We believe that the Federal Reserve
has
done a credible job of fighting inflation, and this should translate into
lower
yields and lower volatility in the bond markets.
For the near future, our investment strategy will be to increase the Fund's
holdings of AA- and AAA- rated securities. We believe that this strategy
should
provide the Fund with an opportunity to see an increase in the value of its
holdings during a better market environment, yet at the same time maximize
its
tax-exempt dividend income.
DIVIDEND POLICY
The Fund does not pay a level monthly dividend rate but instead distributes
to
shareholders the accrued monthly income earned by the portfolio. We will
continue to strive to offer an attractive dividend distribution as we also
face
uncertain interest rates and continued volatility.
We appreciate your confidence during the difficult investment environment
of
1994, and join you in looking forward to a more benign 1995. Should you
have any
questions about your investment in the Fund or how other Smith Barney
mutual
funds may be useful in helping you reach your financial goals, please speak
with
your Smith Barney Financial Consultant.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman of the Board Vice President and
and Investment Officer Investment Officer
January 16, 1995
2
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
- -
PORTFOLIO HIGHLIGHTS (UNAUDITED) NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- -
DESCRIPTION OF PIE CHART IN SHAREHOLDER REPORT
Industry Breakdown
Pie chart depicting the allocation of the Income Trust Intermediate
Maturity
California Municipals Fund investment securities held at November 30, 1994
by industry classification. The pie is broken in pieces representing
industries in the following percentages:
INDUSTRY PERCENTAGE
<S> <C>
Education 16.1%
Housing 5.2%
Transportation 14.1%
Pollution Control 10.0%
General Obligation 23.2%
Other Municipal Bonds and Notes 15.5%
Hospital 7.5%
Utility 3.3%
Net Other Assets and Liabilities 5.1%
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF MUNICIPAL BONDS AND SHORT-TERM
TAX-EXEMPT INVESTMENTS BY COMBINED RATINGS
Standard & Percent
Moody's Poor's of Value
<S> <C>
- ---------------------------------------------------------------------------
- -
Aaa OR AAA 17.3%
- ---------------------------------------------------------------------------
- -
Aa AA 17.9
- ---------------------------------------------------------------------------
- -
A A 35.4
- ---------------------------------------------------------------------------
- -
Baa BBB 29.4
- ---------------------------------------------------------------------------
- -
100.0%
--------------------
- -
</TABLE>
AVERAGE MATURITY 8.4 years
3
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----
HISTORICAL PERFORMANCE - CLASS A SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- -----
<CAPTION>
Year Ended Net Asset Value Capital Gains Dividends
Total
November 30 Beginning Ending Distributed Paid
Return*
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------
- -----
12/31/91 -
11/30/92 $7.90 $8.04 -- $0.35 6.33
%
- ---------------------------------------------------------------------------
- -----
1993 8.04 8.50 -- 0.39 10.70
%
- ---------------------------------------------------------------------------
- -----
1994 8.50 7.80 $ 0.01 0.39
(3.65)%
- ---------------------------------------------------------------------------
- -----
Total $ 0.01 $1.13
- ---------------------------------------------------------------------------
- -----
Cumulative Total Return -- (12/31/91 through 11/30/94) 13.42
%
- ---------------------------------------------------------------------------
- -----
<FN>
* Figures assume reinvestment of all dividends and capital gains
distributions at net asset value and do not reflect deduction of a
front-end sales charge (maximum 2.00%).
</TABLE>
THE FUND'S POLICY IS TO DISTRIBUTE DIVIDENDS MONTHLY
AND CAPITAL GAINS, IF ANY, ANNUALLY.
<TABLE>
- ---------------------------------------------------------------------------
- -----
AVERAGE ANNUAL TOTAL RETURN** - CLASS A SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- -----
<CAPTION>
Without Sales Charges With Sales
Charges***
With fees Without fees With fees Without
fees
waived and waived and waived and waived
and
expenses expenses expenses
expenses
reimbursed reimbursed reimbursed
reimbursed
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------
- -----
Year Ended 11/30/94 (3.65)% (4.15)% (5.57)%
(6.06)%
- ---------------------------------------------------------------------------
- -----
Inception (12/31/91)
through 11/30/94 4.41 % 3.39 % 3.69 % 2.68
%
- ---------------------------------------------------------------------------
- -----
<FN>
** All average annual total return figures shown reflect the reinvestment
of dividends and capital gains distributions at net asset value. The
investment adviser and administrator waived fees and/or reimbursed
expenses from December 31, 1991 to the present. A shareholder's actual
return for the period during which waivers were in effect would be the
higher of the two numbers shown.
*** Average annual total return figures shown assume the deduction of a
maximum 2.00% sales charge.
</TABLE>
NOTE: On November 7, 1994, existing shares of the Fund were designated
Class A shares. Class A shares are sold subject to a 2.00% front-end
sales charge; however, purchases of Class A shares, which when combined
with current holdings of Class A shares offered with a sales charge
equal or exceed $500,000 in the aggregate, will be made at net asset
value with no initial sales charge but will be subject to a 1.00%
contingent deferred sales charge if redeemed within 12 months of
purchase. Class A shares of the Fund are subject to a service fee of
0.15% of the value of the average daily net assets attributable to that
class.
4
<PAGE>
GROWTH OF $10,000 INVESTED IN CLASS A SHARES OF
SMITH BARNEY INTERMEDIATE MATURITY CALIFORNIA MUNICIPALS FUND
VS. LEHMAN BROTHERS 10 YEAR MUNICIPAL BOND INDEX
AND LIPPER ANALYTICAL SERVICES, INC. PEER GROUP AVERAGE INDEX+
- ---------------------------------------------------------------------------
- -
December 31, 1991 - November 30, 1994
<TABLE>
DESCRIPTION OF MOUNTAIN CHART IN SMITH BARNEY COVERS (CLASS A)
A line graph depicting the total growth (including reinvestment of
dividends
and capital gains) of a hypothetical investment of $10,000 in Smith Barney
Income Trust Intermediate Maturity California Municipals Fund Class A
shares on
December 31, 1991 through November 30, 1994 as compared with the growth of
a
$10,000 investment in the Lehman Brothers 10 Year Muncipal Bond Index and
the
Lipper Analytical Services, Inc. Peer Group Average Index. The plot points
used to draw the line graph were as follows:
<CAPTION>
GROWTH OF $10,000 GROWTH OF $10,000
INVESTMENT IN THE INVESTMENT IN THE
GROWTH OF $10,000 LEHMAN BROTHERS LIPPER ANALYTICAL
INVESTED IN CLASS A 10 YEAR MUNICIPAL SERVICES, INC.
PEER
MONTH ENDED SHARES OF THE FUND BOND INDEX GROUP AVERAGE
INDEX
<S> <C> <C> <C>
12/31/91 $ 9,800 $10,000 $10,000
12/91 $ 9,800 - -
3/92 $ 9,764 $ 9,991 $ 9,979
6/92 $10,105 $10,380 $10,301
9/92 $10,346 $10,682 $10,552
12/92 $10,544 $10,892 $10,731
3/93 $10,894 $11,312 $11,064
6/93 $11,286 $11,686 $11,364
9/93 $11,628 $12,104 $11,724
12/93 $11,758 $12,281 $11,870
3/94 $11,213 $11,629 $11,396
6/94 $11,334 $11,800 $11,490
9/94 $11,428 $11,882 $11,592
11/94 $11,115 $11,488 $11,255
<FN>
+ Illustration of $10,000 invested in Class A shares at inception on
December 31, 1991 through November 30, 1994 assuming deduction of a
maximum 2.00% sales charge at the time of investment and reinvestment of
dividends and capital gains at net asset value.
</TABLE>
LEHMAN BROTHERS 10 YEAR MUNICIPAL BOND INDEX, which began in January
1980, is an unmanaged, broad-based index comprised of approximately
5,200
bonds totaling approximately $63 billion in market capitalization. The
bonds are all municipal bonds with an average maturity of 9.8 years, an
average yield of 4.93% and a duration of 7.08 years.
LIPPER ANALYTICAL SERVICES, INC. PEER GROUP AVERAGE INDEX is composed of
an average of the Fund's peer group of mutual funds (27 as of November
30, 1994) investing in intermediate maturity California tax-exempt
bonds.
This period was one in which municipal bond prices fluctuated and the
results should not be considered as a representation of the dividend
income or capital gain or loss which may be realized from an investment
in the Fund today. No adjustment has been made for shareholder tax
liability on dividends or capital gains.
NOTE: All figures cited here represent past performance and do not
guarantee future results.
FOR A GLOSSARY OF TERMS, PLEASE TURN TO THE END OF THIS REPORT.
5
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
- ---------------
HISTORICAL PERFORMANCE - CLASS C SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- ---------------
Net Asset Value Capital Gains
Dividends Total
Beginning Ending Distributed Paid
Return*
<S> <C> <C> <C> <C>
<C>
- ---------------------------------------------------------------------------
- ---------------
Inception (11/8/94)
through 11/30/94 $7.76 $7.80 -- $0.02
0.72 %
- ---------------------------------------------------------------------------
- ---------------
<FN>
* Figures assume reinvestment of all dividends and capital gains
distributions
at net asset value and do not reflect the deduction of any contingent
deferred sales charge.
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
- ---------------
CUMULATIVE TOTAL RETURN** - CLASS C SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- ---------------
With fees
Without fees
waived
waived
<S> <C>
<C>
- ---------------------------------------------------------------------------
- ---------------
Inception (11/8/94) through 11/30/94 0.72 %
0.70 %
- ---------------------------------------------------------------------------
- ---------------
<FN>
** All cumulative total return figures shown reflect the reinvestment of
dividends and capital gains distributions at net asset value. The
investment adviser and administrator waived fees from November 8, 1994
to the present. A shareholder's actual return for the period during
which waivers were in effect would be the higher of the two numbers
shown.
NOTE: On November 7, 1994, the Fund began offering Class C and Class Y
shares.
Class C shares may be subject to a 1.00% contingent deferred sales charge
if
redeemed within 12 months of purchase and are subject to annual service and
distribution fees of 0.15% and 0.20%, respectively, of the value of the
average
daily net assets attributable to that class. As of November 30, 1994, no
Class Y
shares had been sold.
</TABLE>
6
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
KEY TO INSURANCE ABBREVIATIONS
- ---------------------------------------------------------------------------
- ----
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Federal Guaranty Insurance Corporation
MBIA -- Municipal Bond Investors Assurance
GNMA -- Government National Mortgage Association
<TABLE>
<CAPTION>
RATINGS
MARKET
(UNAUDITED) VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
----------------------------------------------------------------------
- ----------------
MUNICIPAL BONDS AND NOTES - 94.9%
CALIFORNIA - 94.9%
Belmont, California, Redevelopment Agency, Tax
Allocation Project, (Los Costanos Community
Development), Series A:
$ 150,000 5.850% due 8/1/02 A
A- $143,625
160,000 5.950% due 8/1/03 A
A- 152,600
California Educational Facilities Authority,
Revenue Bonds:
320,000 (Loyola Marymount University), Series B,
6.300% due 10/1/03 A1
NR 319,200
200,000 (Mills College),
6.500% due 9/1/02 Baa1
NR 199,750
985,000 (Saint Mary's College),
4.900% due 10/1/03 A
NR 881,575
500,000 (University of Southern California),
5.300% due 10/1/04 Aa
AA 467,500
California Health Facilities Financing
Authority:
200,000 (Adventist Health System/West Agency),
Series B,
(MBIA Insured),
6.150% due 3/1/99 Aaa
AAA 204,500
200,000 (Sisters of Providence),
6.200% due 10/1/03 A1
AA- 191,000
400,000 (St. Elizabeth Hospital Project),
5.900% due 11/15/03 A1
A+ 378,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
MARKET
(UNAUDITED)
VALUE
FACE VALUE MOODY'S S&P
(NOTE 1)
<C> <S> <C> <C>
<C>
----------------------------------------------------------------------
- ---------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
California Housing Finance Agency Revenue,
Home Mortgage:
$ 5,000 10.000% due 2/1/02 Aa AA-
$ 5,025
Series E1:
700,000 5.900% due 2/1/05 Aa AA-
655,375
700,000 5.900% due 8/1/05 Aa AA-
654,500
California State, General Obligation Bonds:
100,000 9.800% due 10/1/00 A1 A+
117,500
200,000 6.000% due 9/1/03 A1 A
197,000
1,200,000 California Statewide Community Development,
Certificates of Participation, (St. Josephs
Health),
5.875% due 7/1/05 Aa AA
1,134,000
190,000 Escondido, California, Unified School District,
Certificates of Participation, Series A,
5.400% due 7/1/03 A A-
173,375
Fresno, California, Joint Powers Financing
Authority, Series A:
1,500,000 5.750% due 9/2/98 NR BBB
1,464,375
355,000 Lease Revenue, (Street Light Acquisition),
Project A,
5.375% due 8/1/03 A A+
324,381
855,000 Garden Grove, California, Tax Allocation
Revenue, (Garden Grove Community Project),
5.375% due 10/1/03 NR A
769,500
1,000,000 Hawthorne, California, Community Redevelopment
Agency, (Tax Allocation Redevelopment Project,
Area 2),
6.200% due 9/1/05 Baa NR
936,250
Irvine Ranch, California, Water District, Joint
Powers Agency, Local Pool Revenue, Issue II:
800,000 7.200% due 8/15/96 NR A+
821,000
480,000 7.800% due 8/15/01 NR A+
505,200
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS MARKET
(UNAUDITED) VALUE
FACE VALUE MOODY'S S&P (NOTE
1)
- ---------------------------------------------------------------------------
- -----
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
$ 285,000 Kern, California, High School
District, Series C, (MBIA Insured),
8.750% due 8/1/03 Aaa AAA
$330,600
Kings County, California, Waste
Management Revenue Bonds:
400,000 6.500% due 10/1/03 NR BBB
387,500
310,000 6.500% due 10/1/04 NR BBB
300,312
230,000 Kings River Conservation District,
(California Pine Flat Power Revenue
Project), Series D,
5.375% due 2/1/00 Aa AA
225,687
30,000 Los Angeles County, California,
Multiple Capital Facilities,
Certificates of Participation,
(Project III),
5.800% due 11/1/98 A A-
29,738
1,000,000 Los Angeles County, California,
General Obligation Bonds, Series A,
5.250% due 9/1/06 Aa1 AA
882,500
Los Angeles County, California,
Transportation Authority,
Transportation Commission,
Certificates of Participation:
500,000 Series B,
6.200% due 7/1/03 A1 A+
496,875
45,000 Series G,
6.100% due 1/1/00 A NR
45,338
500,000 Modesto, California, High School
District, (Stanislaus Company),
(FGIC Insured),
5.300% due 8/1/04 Aaa AAA
465,000
Mojave, California, Water District,
California, Improvement District,
(Moronogo Basin):
250,000 6.250% due 9/1/02 Baa BBB+
243,125
280,000 6.375% due 9/1/03 Baa BBB+
272,300
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- ----------------
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- ----------------
<CAPTION>
RATINGS
MARKET
(UNAUDITED)
VALUE
FACE VALUE MOODY'S S&P
(NOTE 1)
- ---------------------------------------------------------------------------
- ----------------
<C> <S> <C> <C>
<C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
Orange County, California, Development Agency
Tax Allocation, (Santa Ana Heights Project):+
$ 500,000 5.500% due 9/1/00 Baa1 BBB
$ 476,250
500,000 5.600% due 9/1/01 Baa1 BBB
474,375
Palm Springs, California, Financing Authority,
Airport Revenue, (Palm Springs Regional
Airport), (MBIA Insured):
200,000 5.400% due 1/1/03 Aaa AAA
188,500
400,000 5.500% due 1/1/04 Aaa AAA
376,500
385,000 Pinole, California, Redevelopment Agency,
Series A, (Pinole Vista Redevelopment Project
Tax Allocation), (MBIA Insured),
5.500% due 8/1/03 Aaa AAA
366,713
795,000 Redding, California, Joint Powers Financing
Authority, Solid Waste and Corporate Yard,
Series A,
5.000% due 1/1/04 A
BBB+ 699,600
150,000 Riverside County, California, Transportation
Commission, Sales Tax Revenue, Series A,
6.500% due 6/1/00 A
A+ 154,688
Sacramento, California, Regional Transportation
District, Certificates of Participation,
Series A:
300,000 6.375% due 3/1/02 A1 NR
300,750
350,000 6.400% due 3/1/03 A1 NR
349,125
100,000 San Diego, California, Certificates of
Participation, Unified School District,
Series B,
6.000% due 7/1/03 Aa
AA- 98,625
San Francisco, California, City and County
Revenue, (South Beach Project), (GNMA Insured):
340,000 4.750% due 3/1/02 Aaa NR
312,800
305,000 4.900% due 3/1/03 Aaa NR
279,075
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
MARKET
(UNAUDITED)
VALUE
FACE VALUE MOODY'S S&P
(NOTE 1)
<C> <S> <C> <C>
<C>
- ---------------------------------------------------------------------------
- --------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
San Francisco, California, Downtown Parking
Corporation, Parking Revenue, Series R:
$ 450,000 6.000% due 4/1/02 A1 NR
$ 428,625
280,000 6.150% due 4/1/03 A1 NR
266,350
San Jose, California, Airport Revenue:
800,000 (FGIC Insured),
5.400% due 3/1/04 Aaa AAA
734,000
500,000 (MBIA Insured),
5.750% due 3/1/03 Aaa AAA
488,125
Santa Barbara, California, Certificates of
Participation, (Harbor Refunding Project):
270,000 6.400% due 10/1/02 A NR
268,650
285,000 6.500% due 10/1/03 A NR
282,506
Sierra Sands Unified School District,
California, Sierra Sands School Financing
Corporation, Certificates of Participation:
450,000 5.250% due 3/1/00 Baa NR
420,750
470,000 5.350% due 3/1/01 Baa NR
435,925
1,000,000 South Napa, California, Waste Management
Facilities,
6.000% due 2/15/04 Baa1 NR
922,500
450,000 Southern California Rapid Transit Authority,
District A2, Special Benefit Assessment,
6.100% due 9/1/03 Baa A-
433,125
105,000 Tehachapi, California, Unified School District,
School Facilities Corporation, Certificates of
Participation,
5.900% due 8/1/03 Baa NR
96,206
500,000 Ukiah, California, Unified School District,
Certificates of Participation, (Measure A
Capital Projects),
5.625% due 9/1/02 Baa1 BBB
460,000
200,000 University of California, Multiple Purpose
Projects, Series A, (MBIA Insured),
6.100% due 9/1/00 Aaa AAA
202,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
MARKET
(UNAUDITED)
VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C> <C>
<C>
----------------------------------------------------------------------
- ---------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
$ 205,000 Upland, California, Certificates of
Participation, (Police Building Refunding
Project), (AMBAC Insured),
6.200% due 8/1/02 Aaa AAA
S 207,306
- ---------------------------------------------------------------------------
- ---------------
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $25,313,309)
24,098,275
- ---------------------------------------------------------------------------
- ---------------
TOTAL INVESTMENTS (Cost $25,313,309*) 94.9%
24,098,275
===========================================================================
===============
OTHER ASSETS AND LIABILITIES (NET) 5.1
1,305,804
===========================================================================
===============
NET ASSETS 100.0%
$25,404,079
===========================================================================
===============
<FN>
* Aggregate cost for Federal tax purposes.
+ See Note 10.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -------------
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- -------------
<CAPTION>
<S> <C>
<C>
ASSETS:
Investments, at value (Cost $25,313,309)(Note 1)
See accompanying schedule
$24,098,275
Cash
34,300
Receivable for Fund shares sold
977,222
Interest receivable
408,039
Unamortized organization costs (Note 7)
25,088
- ---------------------------------------------------------------------------
- -------------
TOTAL ASSETS
25,542,924
===========================================================================
=============
LIABILITIES:
Dividends payable $71,859
Accrued shareholder reports expense 23,000
Accrued legal and audit expense 20,750
Registration and filing fees payable 8,100
Service fee payable (Note 3) 3,378
Investment advisory fee payable (Note 2) 2,828
Custodian fees payable (Note 2) 2,500
Administration fee payable (Note 2) 1,330
Transfer agent fees payable (Note 2) 1,000
Payable for Fund shares redeemed 500
Accrued expenses and other payables 3,600
- ---------------------------------------------------------------------------
- ------------
TOTAL LIABILITIES
138,845
===========================================================================
============
NET ASSETS
$25,404,079
===========================================================================
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<S> <C>
NET ASSETS CONSIST OF:
Accumulated net realized loss on investments sold $
(755,382)
Unrealized depreciation of investments
(1,215,034)
Par value
3,259
Paid-in capital in excess of par value
27,371,236
- ---------------------------------------------------------------------------
- -----
TOTAL NET ASSETS
$25,404,079
- ---------------------------------------------------------------------------
- -----
NET ASSET VALUE:
CLASS A SHARES
NET ASSET VALUE per share+
($25,358,843 / 3,253,075 shares of beneficial interest outstanding)
$7.80
- ---------------------------------------------------------------------------
- -----
MAXIMUM OFFERING PRICE PER SHARE ($7.80 / 0.98) (based on sales
charge of 2.00% of the offering price at November 30, 1994)
$7.96
- ---------------------------------------------------------------------------
- -----
CLASS C SHARES
NET ASSET VALUE and offering price per share+
($45,236 / 5,799 shares of beneficial interest outstanding)
$7.80
- ---------------------------------------------------------------------------
- -----
</TABLE>
+ Redemption price per share is equal to net asset value less any
applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -------------
STATEMENT OF OPERATIONS FOR THE YEAR ENDED
NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- -------------
<S> <C>
<C>
INVESTMENT INCOME:
Interest
$1,744,106
- ---------------------------------------------------------------------------
- -------------
EXPENSES:
Investment advisory fee (Note 2) $ 111,347
Administration fee (Note 2) 63,627
Service fee (Note 3) 47,724
Registration and filing fees 42,586
Shareholder reports expense 39,264
Legal and audit fees 30,079
Custodian fees (Note 2) 16,491
Amortization of organization costs (Note 7) 12,042
Transfer agent fees (Notes 2 and 4) 11,824
Trustees' fees and expenses (Note 2) 5,520
Distribution fee (Note 3) 3
Other 12,923
Fees waived by investment adviser and administrator (Note 2)
(154,816)
- ---------------------------------------------------------------------------
- -------------
TOTAL EXPENSES
238,614
- ---------------------------------------------------------------------------
- -------------
NET INVESTMENT INCOME
1,505,492
===========================================================================
=============
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
(NOTES 1 AND 5):
Net realized loss on investments during the year
(731,956)
Net unrealized depreciation of investments during the year
(1,997,496)
===========================================================================
=============
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(2,729,452)
===========================================================================
=============
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
$(1,223,960)
===========================================================================
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- --------------
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------
- --------------
<CAPTION>
YEAR
YEAR
ENDED
ENDED
11/30/94
11/30/93
<S> <C>
<C>
Net investment income $ 1,505,492
$ 886,464
Net realized gain/(loss) on investments sold during the
year (731,956)
25,380
Net unrealized appreciation/(depreciation) of investments
during the year (1,997,496)
673,107
- ---------------------------------------------------------------------------
- --------------
Net increase/(decrease) in net assets resulting from
operations (1,223,960)
1,584,951
Distributions to shareholders from net investment income:
Class A (1,505,401)
(886,464)
Class C (91)
- --
Distribution to shareholders from net realized gain on
investments:
Class A (44,755)
- --
Net increase/(decrease) in net assets from Fund share
transactions (Note 6):
Class A (4,380,596)
21,148,865
Class C 45,000
- --
- ---------------------------------------------------------------------------
- --------------
Net increase/(decrease) in net assets (7,109,803)
21,847,352
NET ASSETS:
Beginning of year 32,513,882
10,666,530
- ---------------------------------------------------------------------------
- --------------
End of year $25,404,079
$32,513,882
- ---------------------------------------------------------------------------
- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- ----
FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------
- ----
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION> YEAR YEAR
PERIOD
ENDED ENDED
ENDED
11/30/94* 11/30/93
11/30/92*
<S> <C> <C> <C>
Net asset value, beginning of year $ 8.50 $ 8.04 $
7.90
- ---------------------------------------------------------------------------
- ----
Income from investment operations:
Net investment income+ 0.39 0.39
0.35
Net realized and unrealized gain/(loss) on
investments (0.69) 0.46
0.14
- ---------------------------------------------------------------------------
- ----
Total from investment operations (0.30) 0.85
0.49
- ---------------------------------------------------------------------------
- ----
Less distributions:
Distributions from net investment income (0.39) (0.39)
(0.35)
Distributions from net realized capital gains (0.01) -- -
- -
- ---------------------------------------------------------------------------
- ----
Total distributions (0.40) (0.39)
(0.35)
- ---------------------------------------------------------------------------
- ----
Net asset value, end of year $ 7.80 $ 8.50 $
8.04
- ---------------------------------------------------------------------------
- ----
Total return++ (3.65)% 10.70%
6.33%
- ---------------------------------------------------------------------------
- ----
Ratios/Supplemental data:
Net assets, end of year (in 000's) $25,359 $32,514
$10,667
Ratio of operating expenses to average net
assets+++ 0.75% 0.72%
0.65%**
Ratio of net investment income to average net
assets 4.73% 4.45%
4.81%**
Portfolio turnover rate 39% 16%
46%
<FN>
* The Fund commenced operations on December 31, 1991. Those shares in
existence
prior to November 7, 1994 were designated Class A shares.
** Annualized.
+ Net investment income before waiver of fees by investment adviser and
administrator for the year ended November 30, 1994 and waiver of fees
and
reimbursement of expenses by investment adviser, sub-investment adviser
and
administrator, and/or custodian and distributor for the year ended
November
30, 1993 and period ended November 30,1992 were $0.35, $0.32 and $0.24
respectively.
++ Total return represents aggregate total return for the period indicated
and
does not reflect any applicable sales charges.
+++ Annualized operating expense ratio before waiver of fees by investment
adviser and administrator for the year ended November 30, 1994 and
before
waiver of fees and before waiver of fees and reimbursement of expenses
by
investment adviser, sub-investment adviser and administrator, and/or
custodian and distributor for the year ended November 30, 1993 and
period
ended November 30, 1992 were 1.24%, 1.49% and 2.18% respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----------
FINANCIAL HIGHLIGHTS
FOR A CLASS C SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<CAPTION>
PERIOD
ENDED
11/30/94*
<S>
<C>
Net asset value, beginning of period
$ 7.76
- ---------------------------------------------------------------------------
- -----------
Income from investment operations:
Net investment income+
0.01
Net realized and unrealized gain on investments
0.05#
- ---------------------------------------------------------------------------
- -----------
Total from investment operations
0.06
- ---------------------------------------------------------------------------
- -----------
Less distributions:
Distributions from net investment income
(0.02)
- ---------------------------------------------------------------------------
- -----------
Total distributions
(0.02)
- ---------------------------------------------------------------------------
- -----------
Net asset value, end of period
$ 7.80
===========================================================================
===========
Total return++
0.72%
===========================================================================
===========
Ratios/Supplemental data:
Net assets, end of period (in 000's)
$ 45
Ratio of operating expenses to average net assets+++
0.95%**
Ratio of net investment income to average net assets
4.53%**
Portfolio turnover rate
39%
===========================================================================
===========
<FN>
* The Fund commenced selling Class C shares on November 8, 1994.
** Annualized.
+ Net investment income before waiver of fees by investment adviser and
administrator for the period ended November 30, 1994 was $0.01.
++ Total return represents aggregate total return for the period indicated
and
does not reflect any applicable sales charges.
+++ Annualized operating expense ratio before waiver of fees by investment
adviser and administrator for the period ended November 30, 1994 was
1.44%.
# The amount in this caption for each share outstanding throughout the
period
may not accord with the change in aggregate gains and losses in the
portfolio
securities for the period because of the timing of purchases and
withdrawals
of shares in relation to the fluctuating market values of the
portfolio.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Income Trust (the "Trust") was organized as a "Massachusetts
business trust" under the laws of the Commonwealth of Massachusetts on
October
17, 1991. The Trust is registered with the Securities and Exchange
Commission
under the Investment Company Act of 1940, as amended (the "1940 Act"), as
an
open-end management investment company. The Trust consists of the following
four
funds: Smith Barney Limited Maturity Treasury Fund, Smith Barney Limited
Maturity Municipals Fund, Smith Barney Intermediate Maturity California
Municipals Fund (the "Fund") and Smith Barney Intermediate Maturity New
York
Municipals Fund. At the time of this report, the Fund offered three classes
of
shares: Class A shares, Class C shares and Class Y shares. Class A shares
are
sold with a front-end sales charge. Class C shares may be subject to a
contingent deferred sales charge ("CDSC") if redeemed within 12 months of
purchase. Class Y shares are available to investors making an initial
investment
of at least $5 million and are not subject to any sales charges,
distribution or
service fees. As of November 7, 1994, the Fund began offering Class C and
Class
Y shares, however, as of November 30, 1994, only Class C shares had been
sold.
All shares of the Fund existing prior to November 7, 1994, were designated
Class
A shares. Each class of shares has identical rights and privileges except
with
respect to the effect of the respective sales charges, the distribution
and/or
service fees borne by each class, expenses allocable exclusively to each
class,
voting rights on matters affecting a single class and the exchange
privilege of
each class. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
Portfolio valuation: Securities are valued by The Boston Company Advisors,
Inc.
("Boston Advisors") after consultation with an independent pricing service
(the
"Service") approved by the Board of Trustees. When, in the judgment of the
Service, quoted bid prices for securities are readily available and are
representative of the bid side of the market, these investments are valued
at
the mean between the quoted bid prices and asked prices. Securities for
which,
in the judgment of the Service, there are no readily obtainable market
quotations (which may constitute a majority of the portfolio securities)
are
carried at fair value as determined by the Service, based on methods which
include consideration of: yields or prices of municipal securities of
comparable
quality, coupon, maturity and type; indications as to values from dealers;
and
general market conditions. Securities, not valued by the
19
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
Service, for which market quotations are not readily available are valued
at
fair value as determined in good faith by or under the direction of the
Board of
Trustees. Short-term investments that mature in 60 days or less are valued
at
amortized cost.
Securities transactions and investment income: Securities transactions are
recorded as of the trade date. Securities purchased or sold on a when-
issued or
delayed-delivery basis may be settled one month or more after the trade
date.
Interest income is recorded on the accrual basis. Realized gains and losses
from
securities sold are recorded on the identified cost basis. Investment
income and
realized and unrealized gains and losses are allocated based upon the
relative
net assets of each class.
Dividends and distributions to shareholders: Dividends from net investment
income are determined on a class level and are declared daily and paid
generally
on the 10th day of the calendar statement month. Distributions determined
on a
Fund level, if any, of any net short- and long-term capital gains earned by
the
Fund will be declared and paid annually after the close of the fiscal year
in
which they are earned. Additional distributions of net investment income
and
capital gains for the Fund may be made at the discretion of the Board of
Trustees in order to avoid the application of a 4.00% nondeductible excise
tax
on certain undistributed amounts of net investment income and capital
gains. To
the extent net realized capital gains can be offset by capital losses and
loss
carryforwards, it is the policy of the Fund not to distribute such gains.
Income distributions and capital gain distributions on a Fund level are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily
due to
differing treatments of income and gains on various investment securities
held
by the Fund, timing differences and differing characterization of
distributions
made by the Fund as a whole.
Federal income taxes: The Trust intends that the Fund separately qualify
as a
regulated investment company, if such qualification is in the best interest
of
its shareholders, which distributes exempt-interest dividends, by complying
with
the requirements of the Internal Revenue Code of 1986, as amended,
applicable to
regulated investment companies and by distributing substantially all of its
earnings to its shareholders. Therefore, no Federal income tax provision is
required.
20
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
2. INVESTMENT ADVISORY AGREEMENT, ADMINISTRATION
AGREEMENT AND OTHER TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with a division of Mutual Management Corp., which was
transferred
effective November 7, 1994 to Smith Barney Mutual Funds Management Inc.
("SBMFM"). Mutual Management Corp. and SBMFM are both wholly owned
subsidiaries
of Smith Barney Holdings Inc. ("Holdings"). Holdings is a wholly owned
subsidiary of The Travelers Inc. Under the Advisory Agreement, the Fund
pays a
monthly fee at the annual rate of 0.35% of the value of its average daily
net
assets.
Prior to April 20, 1994, the Fund was party to an administration agreement
(the
"Administration Agreement") with Boston Advisors, an indirect wholly owned
subsidiary of Mellon Bank Corporation ("Mellon"). Under the Administration
Agreement, the Fund paid a monthly fee at the annual rate of 0.20% of the
value
of its average daily net assets.
As of the close of business on April 20, 1994, SBMFM (formerly known as
"Smith,
Barney Advisers, Inc.") succeeded Boston Advisors as the Fund's
administrator.
The new administration agreement contains substantially the same terms and
conditions, including the level of fees, as the predecessor agreement.
As of the close of business on April 20, 1994, the Fund and SBMFM also
entered
into a sub-administration agreement (the "Sub-Administration Agreement")
with
Boston Advisors. Under the Sub-Administration Agreement, SBMFM pays Boston
Advisors a portion of its administration fee at a rate agreed upon from
time to
time between SBMFM and Boston Advisors.
From time to time, the investment adviser and administrator may voluntarily
waive a portion or all of its investment advisory and/or administrative
fees
otherwise payable to it. For the year ended November 30, 1994, the
investment
adviser and administrator voluntarily waived fees of $98,519 and $56,297,
respectively.
For the year ended November 30, 1994, Smith Barney Inc. ("Smith Barney")
received $69,353 from investors representing commissions (sales charges) on
sales of Class A shares.
A CDSC is generally payable by Class C shareholders and may be payable by
certain Class A shareholders in connection with the redemption of shares
within
one year
21
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
after the date of purchase. For the year ended November 30, 1994, $18,705
in
CDSC were paid to Smith Barney by Class A shareholders.
No officer, director or employee of Smith Barney or any of its affiliates
receives any compensation from the Trust for serving as a Trustee or
officer of
the Trust. The Trust pays each Trustee who is not an officer, director or
employee of Smith Barney or any of its affiliates $4,000 per annum plus
$500 per
meeting attended and reimburses each such Trustee for travel and out-of-
pocket
expenses.
Boston Safe Deposit and Trust Company an indirect wholly owned subsidiary
of
Mellon, serves as the Trust's custodian. The Shareholder Services Group,
Inc., a
subsidiary of First Data Corporation, serves as the Trust's transfer agent.
3. DISTRIBUTION PLAN
Smith Barney acts as distributor of the Fund's shares pursuant to a
distribution
agreement with the Trust and sells shares of the Fund through Smith Barney
or
its affiliates.
Pursuant to Rule 12b-1 under the 1940 Act, the Trust has adopted a services
and
distribution plan (the "Plan"). Under this Plan, the Fund compensates Smith
Barney for servicing shareholder accounts for Class A and Class C
shareholders,
and covers expenses incurred in distributing Class C shares. Smith Barney
is
paid an annual service fee with respect to Class A and Class C shares of
the
Fund at the annual rate of 0.15% of the value of the average daily net
assets of
each respective class of shares. Smith Barney is also paid an annual
distribution fee with respect to Class C shares at the annual rate of 0.20%
of
the value of the average daily net assets of that class. For the year ended
November 30, 1994, the Fund incurred $47,722 and $2 in service fees for
Class A
and Class C shares, respectively. For the period ended November 30, 1994,
the
Fund incurred $3 in distribution fees for Class C shares.
Under its terms, the Plan shall remain in effect from year to year,
provided
that such continuance is approved annually by vote of the Trust's Trustees,
including a majority of those Trustees who are not "interested persons" of
the Trust and who have no direct or indirect financial interest in the
operation of the Plan.
4. EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any
class of
shares are prorated among the classes based upon the relative net assets of
each
class.
22
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
Operating expenses directly attributable to a class of shares are charged
to
that class' operations. In addition to the above service and distribution
fees,
class specific operating expenses for the year ended November 30, 1994
included
transfer agent fees of $11,823 and $1 for Class A and Class C shares,
respectively.
5. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities, excluding short-
term
investments, for the year ended November 30, 1994 were $11,912,855 and
$18,229,993, respectively.
At November 30, 1994, aggregate gross unrealized appreciation for all
securities
in which there was an excess of value over tax cost was $7,209 and
aggregate
gross unrealized depreciation for all securities in which there was an
excess of
tax cost over value was $1,222,243.
6. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest
which
are divided into three classes (Class A, Class C and Class Y) with a $.001
par
value. Changes in shares of beneficial interest in the Fund were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED
11/30/94*
11/30/93
Class A Shares Shares Amount
Shares Amount
===========================================================================
===================
<S> <C> <C> <C>
<C>
Sold 1,242,342 $10,299,195
2,773,792 $23,473,658
Issued as reinvestment of dividends 146,296 1,207,127
81,600 688,363
Redeemed (1,962,629) (15,886,918)
(355,224) (3,013,156)
- ---------------------------------------------------------------------------
- -------------------
Net increase/(decrease) (573,991) $(4,380,596)
2,500,168 $21,148,865
===========================================================================
===================
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED
11/30/94*
Class C Shares Shares Amount
==========================================================
<S> <C> <C>
Sold 5,799 $45,000
- ----------------------------------------------------------
Net increase 5,799 $45,000
==========================================================
<F/N>
* The Fund began offering Class C and Class Y shares on November 7, 1994.
Those
shares in existence prior to November 7, 1994 were designated Class A
shares.
As of November 30, 1994, no Class Y shares had been sold.
</TABLE>
23
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
7. ORGANIZATION COSTS
The Fund bears all costs in connection with its organization including the
fees
and expenses of registering and qualifying its shares for distribution
under
Federal and state securities regulations. All such costs are being
amortized on
the straight-line method over a period of five years from the commencement
of
operations of the Fund. In the event that any of the initial shares of the
Fund
are redeemed during such amortization period, the Fund will be reimbursed
for
any unamortized organization costs in the same proportion as the number of
shares redeemed bears to the number of initial shares held at the time of
redemption.
8. CONCENTRATION OF CREDIT
The Fund primarily invests in debt obligations issued by the State of
California, its political subdivisions, agencies and public authorities to
obtain funds for various public purposes. The Fund is more susceptible to
factors adversely affecting issuers of California municipal securities than
is a
municipal bond fund that is not concentrated in these issuers to the same
extent.
9. CAPITAL LOSS CARRYFORWARD
As of November 30, 1994, the Fund had available for Federal tax purposes
unused
capital loss carryforward of $557,124 expiring in the year 2002.
10. SUBSEQUENT EVENT
On December 6, 1994, Orange County, California ("Orange County") filed for
bankruptcy. Approximately 3.70% of the Fund's portfolio at November 30,
1994 was
invested in Orange County bonds and notes. The Fund believes that the
bankruptcy
proceeding will not have any material impact on the ability of the issuer
to
make its scheduled interest and principal payments and therefore will have
little, if any, effect on the Fund.
24
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------------------------------------------------
- -----
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
SMITH BARNEY INCOME TRUST:
We have audited the accompanying statement of assets and liabilities,
including
the schedule of portfolio investments, of Smith Barney Intermediate
Maturity
California Municipals Fund, of Smith Barney Income Trust (formerly Smith
Barney
Shearson Income Trust), as of November 30, 1994, and the related statement
of
operations for the year then ended, the statement of changes in net assets
for
each of the two years in the period then ended, and the financial
highlights for
each of the two years in the period then ended and for the period from
December
31, 1991 (commencement of operations) to November 30, 1992. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audits 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
November 30, 1994 by correspondence with the custodian and brokers. 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
Smith
Barney Intermediate Maturity California Municipals Fund, of Smith Barney
Income
Trust, as of November 30, 1994, the results of its operations for the year
then
ended, the changes in its net assets for each of the two years in the
period
then ended, and the financial highlights for each of the two years in the
period
then ended and for the period from December 31, 1991 (commencement of
operations) to November 30, 1992, in conformity with generally accepted
accounting principles.
Coopers & Lybrand
L.L.P.
Boston, Massachusetts
January 25, 1995
25
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
TAX INFORMATION (UNAUDITED) FISCAL YEAR ENDED NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
Of the dividends paid by the Fund from investment income for the year ended
November 30, 1994, 100% are tax-exempt for regular Federal income tax
purposes.
26
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PARTICIPANTS
- ---------------------------------------------------------------------------
- -----
DISTRIBUTOR COUNSEL
Smith Barney Inc. Willkie Farr & Gallagher
388 Greenwich Street 153 East 53rd Street
New York, New York 10013 New York, New York 10022
INVESTMENT ADVISER AND
ADMINISTRATOR TRANSFER AGENT
Smith Barney Mutual Funds The Shareholder Services Group,
Inc.
Management Inc. Exchange Place
388 Greenwich Street Boston, Massachusetts 02109
New York, New York 10013
CUSTODIAN
SUB-ADMINISTRATOR
Boston Safe Deposit
The Boston Company Advisors, Inc. and Trust Company
One Boston Place One Boston Place
Boston, Massachusetts 02108 Boston, Massachusetts 02108
27
<PAGE>
Smith Barney
INTERMEDIATE MATURITY
CALIFORNIA MUNICIPALS FUND
- ---------------------------------------------------------------------------
- ----
GLOSSARY OF COMMONLY USED MUTUAL FUND TERMS
- ---------------------------------------------------------------------------
- ----
CAPITAL GAIN (OR LOSS): This is the increase (or decrease) in the market
value
(price) of a security in your portfolio. If a stock or bond appreciates in
price, there is a capital gain; if it depreciates there is a capital loss.
A
capital gain or loss is "realized" upon the sale of a security; if net
capital
gains exceed net capital losses, there may be a capital gain distribution
to
shareholders.
CDSC (CONTINGENT DEFERRED SALES CHARGE): One kind of back-end load, a CDSC
may
be imposed if shares are redeemed during the first few years of ownership.
The
CDSC may be expressed as a percentage of either the original purchase price
or
the redemption proceeds. Most CDSCs decline over time, and some will not be
charged if shares are redeemed after a certain period of time.
DISTRIBUTION RATE: This is the rate at which a mutual fund pays out (or
distributes) interest, dividends and realized capital gains to
shareholders. A
fund's distribution rate is usually expressed as an annualized percent of
the
fund's offering price.
DIVIDEND: This is income generated by securities in a portfolio and
distributed after expenses to shareholders.
FRONT-END SALES CHARGE: This is the sales charge applied to an investment
at
the time of initial purchase.
NET ASSET VALUE (NAV): Net asset value is the total market value of all
securities held by a fund, minus any liabilities, divided by the number of
shares outstanding. It is the value of a single share of a mutual fund on a
given day. The total value of your investment would be the NAV multiplied
by the
number of shares you own.
SEC YIELD: This standardized calculation of a mutual fund's yield is based
on a
formula developed by the Securities and Exchange Commission (SEC) to allow
funds
to be compared on an equal basis. It is an annualized yield based on the
portfolio's potential earnings from dividends, interest and yield to
maturity of
its holdings, and it reflects the payments of all portfolio expenses for
the
most recent 30-day period. Mutual funds are required to use this figure
when
stating yield.
TOTAL RETURN: Total return measures a fund's performance, taking into
account
the combination of dividends paid and the gain or loss in the value of the
securities held in the portfolio. It may be expressed on an average annual
basis
or cumulative basis (total change over a given period). In addition, total
return may be expressed with or without the effects of sales charges or the
reinvestment of dividends and capital gains.
Whenever a fund reports any type of performance, it must also report the
average
annual total return according to the standardized calculation developed by
the
SEC. This standardized calculation was introduced to insure that investors
can
compare different funds on an equal basis. The SEC average annual total
return
calculation includes the effects of all fees and sales charges and assumes
the
reinvestment of all dividends and capital gains.
28
<PAGE>
INTERMEDIATE SMITH BARNEY
MATURITY ------------
CALIFORNIA A Member of TravelersGroup
MUNICIPALS [LOGO]
FUND
TRUSTEES
Burt N. Dorsett
Elliot S. Jaffe
Heath B. McLendon
Cornelius C. Rose, Jr.
OFFICERS
Heath B. McLendon
Chairman of the Board
and Investment Officer
Stephen J. Treadway
President
Joseph P. Deane
Vice President and This report is submitted for the 1994
Investment Officer general information of the
ANNUAL
shareholders of Smith Barney
REPORT
Lewis E. Daidone Intermediate Maturity California
Senior Vice President Municipals Fund. It is not
and Treasurer authorized for distribution to
prospective investors unless
Christina T. Sydor accompanied by an effective
Secretary Prospectus for the Fund, which
contains information concerning
the Fund's investment policies,
fees and expenses as well as other
pertinent information.
SMITH BARNEY
MUTUAL FUNDS
388 Greenwich Street
New York, New York 10013
Fund 165, 480, 496
FD 0310 A5
[LOGO] Recycled
Recyclable
<PAGE>
DESCRIPTION OF ARTWORK ON REPORT
COVER
Small box above fund name
showing a
large bridge in New York.
SMITH BARNEY
INTERMEDIATE
MATURITY
1994 NEW YORK
ANNUAL MUNICIPALS
REPORT FUND
........................................
NOVEMBER 30, 1994
[LOGO] SMITH BARNEY MUTUAL FUNDS
Investing for your future.
Everyday.
<PAGE>
INTERMEDIATE MATURITY NEW YORK MUNICIPALS FUND
DEAR SHAREHOLDER:
We are pleased to provide the annual report and portfolio of investments
for
the fiscal year ended November 30, 1994 for Smith Barney Intermediate
Maturity
New York Municipals Fund. Since we last reported to you six months ago,
prices
for New York tax-exempt bonds continued to weaken as the Federal Reserve
raised
interest rates. As a result, the net asset value per Class A share of the
Fund
declined to $7.80 from $8.54 and resulted in a negative total return for
this
fiscal period -- the first such return in the Fund's history. Investors
owning
Class A shares received net investment income distributions of $0.40 per
share;
and the total return for this fiscal period was (3.97%) for Class A shares.
Further information about the performance of your investment during this
and
previous fiscal periods is available in this report.
ECONOMIC AND INTEREST RATE OVERVIEW
The Federal Reserve raised short-term interest rates six times in 1994
beginning in February, which is a remarkable number of increases in less
than
one year. The Federal Reserve's goal was to curb any creeping inflation
before
it actually appeared. However, the rise in short-term interest rates also
resulted in a rise in longer-term interest rates and consequently a decline
in
the asset value of many longer-term investments. As a result, most fixed
income investments performed poorly in 1994, especially in comparison to
the
strong performance they experienced in 1993.
1994 was also a politically intriguing year. First, higher Federal income
tax
rates that were retroactive to 1993 took effect. Second, Congress became
embroiled in controversial legislation on health care which, had it been
successful, could have led to higher taxes. Third, the NAFTA and GATT trade
agreements were successfully passed. Fourth, and perhaps most significant,
the
Republicans achieved an overwhelming victory in both the House and Senate
by
promising lower taxes and spending, and much less government. The many
Republican victories at the state level -- not only in the state
legislatures
but also the governorships -- are even more significant as these 30 states
will
have much power over the electoral process in 1996.
For many investors this was the first glance into a new and more
challenging
investment environment that tested their ability to maintain a long-term
investment focus. However, we now anticipate that interest rates will soon
stabilize as the results of the new Congress become more apparent and the
effects of the Federal Reserve's interest rate policy become more positive.
We
expect that the recent
1
<PAGE>
GATT and NAFTA trade pacts will also demonstrate that the U.S. is still a
world
leader in both economic policy and financial markets.
New York's budget problems continue. In the beginning of 1994, the City was
dealing with a large budget deficit and, although spending was reduced, at
the
end of 1994 it was still facing a budget shortfall. New York State recently
disclosed its budget shortfall, and we believe that Governor Pataki will
need to
reconsider his plans for a reduction in the state income tax rate.
PORTFOLIO SUMMARY
In response to the Federal Reserve's policy of higher short-term interest
rates
and declining prices in the New York tax-exempt market, our investment
strategy
has been to keep the Fund's average maturity at approximately 6 years,
which
enables the Fund to maximize its tax-exempt income yet minimize its
exposure to
rising interest rates. At the end of this reporting period, nearly half of
the
Fund's assets were invested in municipal bonds rated AAA/Aaa and AA/Aa by
Standard & Poor's Corporation or Moody's Investor Services, Inc.,
respectively.
We believe these high-quality investments provide the portfolio with
greater
protection against credit risk and are also more liquid. The majority of
the
Fund's holdings were in general obligation, transportation, education, and
hospital issues.
DIVIDEND POLICY
The Fund does not pay a level monthly dividend rate but instead distributes
to
shareholders the accrued monthly income earned by the portfolio. We will
continue to strive to offer an attractive dividend distribution as we also
face
uncertain interest rates and continued volatility.
We appreciate your confidence during the difficult investment environment
of
1994, and join you in looking forward to a more benign 1995. Should you
have any
questions about your investment in the Fund or how other Smith Barney
mutual
funds may be useful in helping you reach your financial goals, please speak
with
your Smith Barney Financial Consultant.
Sincerely,
/S/ HEATH B. MCLENDON /S/ LAWRENCE T. MCDERMOTT
Heath B. McLendon Lawrence T. McDermott
Chairman of the Board Vice President and
and Investment Officer Investment Officer
January 16, 1995
2
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
HISTORICAL PERFORMANCE - CLASS A SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
Year Ended Net Asset Value Capital Gains Dividends
Total
November 30 Beginning Ending Distributed Paid
Return*
<S> <C> <C> <C> <C>
<C>
- ---------------------------------------------------------------------------
- -----
12/31/91-
11/30/92 $7.90 $8.18 -- $0.38
8.59 %
- ---------------------------------------------------------------------------
- -----
1993 8.18 8.54 $0.02 0.40
9.76 %
- ---------------------------------------------------------------------------
- -----
1994 8.54 7.80 0.02 0.40
(3.97)%
- ---------------------------------------------------------------------------
- -----
Total $0.04 $1.18
- ---------------------------------------------------------------------------
- -----
Cumulative Total Return -- (12/31/91 through 11/30/94)
14.46 %
- ---------------------------------------------------------------------------
- -----
</TABLE>
* Figures assume reinvestment of all dividends and capital gains
distributions at net asset value and
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
************************************************************** With fees
With fees
waived Without fees waived waived Without fees
waived
and expenses and expenses and expenses and expenses
reimbursed reimbursed reimbursed reimbursed
[S] [C] [C] [C] [C]
- ---------------------------------------------------------------------------
- -----
Year Ended
11/30/94 (3.97)% (4.31)% (5.89)%
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
**************************************************************ursed
expenses from December 31, 1991 to the present. A shareholder's actual
return for the period during which waivers were in effect would be the
higher of the two numbers shown.
*** Average annual total return figures shown assume the deduction of a
maximum
2.00% sales charge.
NOTE: On November 7, 1994, existing shares of the Fund were designated
Class A
shares. Class A shares are sold subject to a 2.00% front-end sales charge;
however, purchases of Class A shares, which when combined with current
holdings
of Class A shares offered with a sales charge equal or exceed $500,000 in
the
aggregate, will be made at net asset value with no initial sales charge but
will
be subject to 1.00% contingent deferred sales charge if redeemed within
twelve
months of purchase. Class A shares of the Fund are subject to a service fee
of
0.15% of the value of the average daily net assets attributable to that
class.
3
<PAGE>
GROWTH OF $10,000 INVESTED IN CLASS A SHARES
OF SMITH BARNEY INTERMEDIATE MATURITY NEW YORK MUNICIPALS FUND
VS. LEHMAN BROTHERS 10 YEAR MUNICIPAL BOND INDEX
AND LIPPER ANALYTICAL SERVICES, INC. PEER GROUP AVERAGE INDEX+
- ---------------------------------------------------------------------------
- -----
December 31, 1991 - November 30, 1994
DESCRIPTION OF MOUNTAIN CHART IN SMITH BARNEY COVERS (CLASS A)
A line graph depicting the total growth (including reinvestment
of dividends and capital gains) of a hypothetical investment of
$10,000 in Smith Barney Income Trust Intermediate Maturity New
York Municipals Fund Class A shares on December 31, 1991 through
November 30, 1994 as compared with the growth of a $10,000
investment in the Lehman Brothers 10 Year Municipal Bond Index
and the larger Lipper Analytical Services, Inc. Peer Group
Average Index. The plot points used to draw the line graph were
as follows:
<TABLE>
<CAPTION>
GROWTH OF $10,000 GROWTH
OF $10,000
INVESTMENT IN THE
INVESTMENT IN THE
GROWTH OF $10,000 LEHMAN BROTHERS LIPPER
ANALYTICAL
INVESTED IN CLASS A 10 YEAR MUNICIPAL
SERVICES, INC. PEER
MONTH ENDED SHARES OF THE FUND BOND INDEX GROUP
AVERAGE INDEX
<S> <C> <C>
<C>
12/31/91 $ 9,800 $10,000
$10,000
12/91 $ 9,800 -
- -
3/92 $ 9,867 $ 9,991
$10,066
6/92 $10,254 $10,380
$10,301
9/92 $10,538 $10,682
$10,489
12/92 $10,758 $10,892
$10,636
3/93 $11,126 $11,312
$11,852
6/93 $11,449 $11,686
$11,022
9/93 $11,772 $12,104
$11,190
12/93 $11,894 $12,281
$11,306
3/94 $11,320 $11,629
$11,139
6/94 $11,486 $11,800
$11,222
9/94 $11,551 $11,882
$11,314
11/94 $11,217 $11,488
$11,234
<FN>
+ Illustration of $10,000 invested in Class A shares at inception on
December 31, 1991 through November 30, 1994, assuming deduction of a
maximum 2.00% sales charge at the time of investment and reinvestment of
dividends and capital gains at net asset value.
LEHMAN BROTHERS 10 YEAR MUNICIPAL BOND INDEX, which began in January
1980, is an unmanaged, broad-based index comprised of approximately
5,200
bonds totaling approximately $63 billion in market capitalization. The
bonds are all municipal bonds with an average maturity of 9.8 years, an
average yield of 4.93% and a duration of 7.08 years.
LIPPER ANALYTICAL SERVICES, INC. PEER GROUP AVERAGE INDEX is composed of
an average of the Fund's peer group of mutual funds (27 as of November
30, 1994) investing in intermediate maturity New York tax-exempt bonds.
This period was one in which municipal bond prices fluctuated and the
results should not be considered as a representation of the dividend
income or capital gain or loss which may be realized from an investment
in the Fund today. No adjustment has been made for shareholder tax
liability on dividends or capital gains.
Index information is available at month-end only; therefore, the closest
month-end to inception date of the class has been used.
NOTE: All figures cited here represent past performance and do not
guarantee future results.
FOR A GLOSSARY OF TERMS, PLEASE TURN TO THE END OF THIS REPORT.
</TABLE>
4
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO HIGHLIGHTS NOVEMBER 30, 1994
(UNAUDITED)
- ---------------------------------------------------------------------------
- -----
INDUSTRY BREAKDOWN
Pie chart depicting the allocation of the Income Trust Intermediate
Maturity New
York Municipals Fund's investment securities held at November 30, 1994 by
industry classification. The pie is broken in pieces representng
industries iin
the following percentages.
INDUSTRY PERCENTAGE
Short-Term Municipal Bonds and
and Liabilities 5.1%
Education 13.2%
Housing 6.81%
Transportation 14.5%
Pollution Control 9.1%
Hospital 12.9%
Utility 10.1%
General Obligations 28.3%
SUMMARY OF MUNICIPAL BONDS BY COMBINED RATINGS
<TABLE>
<CAPTION>
Standard & Percentage of
Moody's Poor's Value
- ---------------------------------------------
<S> <C> <C>
AAA AAA 27.6%
AA AA 15.0
A A 15.9
BAA BBB 39.1
NR NR 2.4
------
100.0%
------
</TABLE>
AVERAGE MATURITY: 5.8 years
5
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
KEY TO INSURANCE ABBREVIATIONS
- ---------------------------------------------------------------------------
- -----
AMBAC -- American Municipal Bond Assurance Corporation
CGIC -- Capital Guaranty Insurance Corporation
FGIC -- Federal Guaranty Insurance Corporation
FHA -- Federal Housing Administration
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
MARKET
(UNAUDITED)
VALUE
FACE VALUE MOODY'S S&P
(NOTE 1)
- ---------------------------------------------------------------------------
- -----
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES - 94.9%
NEW YORK - 86.2%
$ 400,000 Albany, New York, City School
District, Series B, (MBIA Insured),
6.000% due 12/15/00 Aaa AAA $
405,000
200,000 Babylon, New York, Industrial
Development Authority, Babylon
Community Waste Management, Series A,
7.650% due 7/1/97 Baa1 NR
210,750
Battery Park City Authority, New York
Revenue:
175,000 7.400% due 5/1/02 Aaa AAA
188,781
2,000,000 Series A,
6.000% due 11/1/03 A1 AA
1,952,500
790,000 Brookhaven, New York, General Obligation,
(MBIA Insured),
5.300% due 5/1/01 Aaa AAA
763,338
100,000 Buffalo, New York, General Obligation,
(FGIC Insured),
5.800% due 2/1/00 Aaa AAA
99,875
Buffalo, New York:
205,000 Series A, (MBIA Insured),
5.900% due 4/1/01 Aaa AAA
204,488
385,000 Series B, (MBIA Insured),
5.900% due 4/1/01 Aaa AAA
384,038
550,000 Buffalo, New York, Municipal Water
Finance Authority, Water Systems
Revenue, (FSA Insured),
5.350% due 7/1/02 Aaa AAA
528,688
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----------------
PORTFOLIO OF INVESTMENTS (continued)
NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- -----------------
<CAPTION>
RATINGS
MARKET
(UNAUDITED) VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
===========================================================================
=================
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEW YORK (CONTINUED)
$ 200,000 Canandaigua, New York, City School District,
(AMBAC Insured),
6.400% due 6/1/99 Aaa
AAA $ 207,250
200,000 Central Square, New York, Central School
District,
(FGIC Insured),
6.500% due 6/15/99 Aaa
AAA 208,000
250,000 Erie County, New York, Public Improvement
Project,
(FGIC Insured),
5.500% due 1/15/00 Aaa
AAA 246,875
2,500,000 Housing, New York, Revenue Refunding,
6.000% due 11/1/03 A1
AA 2,456,250
495,000 Jamestown, New York, General Obligation, Series
A,
7.000% due 3/15/00 Baa
NR 507,375
Metropolitan Transportation Authority,
New York Service Contract Transit Facilities,
Series 5:
735,000 6.100% due 7/1/98 Baa1
BBB 741,431
200,000 6.250% due 7/1/99 Baa1
BBB 201,750
100,000 Monroe County, New York,
Industrial Development Authority,
Series A, (Genesee Hospital),
6.500% due 11/1/99 A
NR 99,125
2,000,000 New York, New York, EDL Construction,
Series A, (MBIA Insured),
6.500% due 4/1/04 Aaa
AAA 2,062,500
750,000 New York, New York, City Municipal
Water Authority, Water and Sewer Systems
Revenue, General Obligation, Series A,
5.700% due 6/15/02 A
A- 720,938
3,000,000 New York, New York, Series A,
7.000% due 8/1/04 Baa1
A- 3,033,750
500,000 New York, New York, Series B,
6.25% due 10/1/01 Baa1
A- 495,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----------------
PORTFOLIO OF INVESTMENTS (continued)
NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- -----------------
<CAPTION>
RATINGS MARKET
(UNAUDITED) VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
- ---------------------------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEW YORK (CONTINUED)
New York, New York, Series C, Subseries C-1,
(MBIA Insured):
$ 345,000 Prerefunded Balance,
6.000% due 8/1/01 Aaa
AAA $ 345,863
5,000 Unrefunded Balance,
6.000% due 8/1/01 Aaa
AAA 4,988
2,000,000 New York, New York, Series H,
5.700% due 8/1/03 Baa1
A- 1,842,500
New York State, Certificates of Participation:
250,000 6.500% due 3/1/96 Baa1
BBB 253,438
300,000 6.900% due 3/1/98 Baa1
BBB 307,125
New York State Dormitory Authority, Revenue Bonds:
1,000,000 (City University), Second Generation, Series A,
5.500% due 7/1/03 Baa1
BBB 916,250
1,000,000 (City University), Series F,
5.200% due 7/1/03 Baa1
BBB 888,750
500,000 College and University Educational Loan,
(MBIA Insured),
6.200% due 7/1/01 Aaa
AAA 504,375
1,500,000 (Court Facilities Lease Revenue), Series A,
6.000% due 5/15/03 Baa1
BBB+ 1,447,500
365,000 (Episcopal Health), (FHA Insured),
5.200% due 2/1/03 NR
AA 339,906
405,000 (Genesee Valley), Series B, (FHA Insured),
6.300% 8/1/02 NR
AA 411,075
750,000 (Manhattan College),
5.900% due 7/1/02 NR
AA 748,125
State University Educational Facilities:
Series A:
1,000,000 5.300% due 5/15/03 Baa1
BBB+ 901,250
Series B:
1,800,000 5.200% due 5/15/03 Baa1
BBB+ 1,608,750
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----------------------
PORTFOLIO OF INVESTMENTS (continued)
NOVEMBER 30,
199************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
*****************************************************************
<S> <C> <C>
<C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEW YORK (CONTINUED)
New York State Environmental Facilities Corporation:
$ 500,000 Pollution Control Revenue,
State Water Revolving Fund, Series A,
5.950% due 3/15/02 Aaa
AAA $ 503,125
200,000 Resource Recovery Revenue, (Huntington Project),
Series A,
7.375% due 10/1/99 Baa
NR 201,250
2,135,000 Solid Waste Disposal Revenue,
(Occidental Petroleum Corporation),
Sub-Series B,
5.500% due 9/1/03
Baa3 BBB 1,918,830
New York State Medical Care Facilities Finance Agency,
Revenue Bonds:
1,500,000 Series F,
6.000% due 2/15/03
Baa1 BBB 1,445,625
650,000 (Central Suffolk Hospital -- Project A),
5.400% due 11/1/00 NR
BBB 606,937
Hospital and Nursing Home:
815,000 Series A, (FHA Insured),
5.500% due 8/15/04 NR
AAA 755,912
Series B, (FHA Insured):
(Long Island College)
200,000 7.250% due 2/15/98 Aa
AAA 210,750
700,000 5.650% due 8/15/02 NR
AAA 669,375
Series C, (FHA Insured):
835,000 5.900% due 8/15/02 Aa
AA 802,644
220,000 5.950% due 8/15/09 NR
AAA 221,375
750,000 Longterm Health Care Facilities, Series D,
(CGIC Insured),
5.750% due 11/1/02 Aaa
AAA 736,875
725,000 Mental Health Services, Facilities Improvement,
Series F,
6.100% due 2/15/02
Baa1 BBB+ 709,593
600,000 Methodist Hospital, Series A, (FHA Insured),
6.000% due 8/15/02 NR
AA 585,750
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----------------------
PORTFOLIO OF INVESTMENTS (continued)
NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- -----------------------
<CAPTION>
RATINGS MARKET
(UNAUDITED) VALUE
FACE VALUE
MOODY'S S&P (NOTE 1)
- ---------------------------------------------------------------------------
- -----------------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEW YORK (CONTINUED)
New York State Medical Care Facilities Finance
Agency, Revenue Bond: (continued)
$ 250,000 Secured Hospital, Series 1991-A,
6.625% due 8/15/98 Baa
BBB $ 253,437
New York State Municipal Bond Bank Agency,
Special Program Revenue:
925,000 Buffalo, Series A,
6.500% due 3/15/00 NR
BBB+ 929,625
250,000 Rochester, Series A,
6.300% due 3/15/00 NR
A+ 250,000
250,000 New York State Power Authority Revenue
and General Purpose,
Series Z,
5.850% due 1/1/00 Aa
AA- 250,625
New York State Thruway Authority, Service Contract
Local Highway and Bridges:
1,000,000 6.000% due 4/1/02
Baa1 BBB 976,250
1,750,000 6.000% due 4/1/03
Baa1 BBB 1,701,875
New York State Urban Development:
Correctional Facilities, Series 3:
1,230,000 6.700% due 1/1/99
Baa1 BBB 1,260,750
595,000 6.800% due 1/1/00
Baa1 BBB 611,362
1,000,000 5.250% due 1/1/03
Baa1 BBB 898,750
Cornell Center Project:
565,000 5.400% due 1/1/02
Baa1 BBB 522,625
595,000 5.500% due 1/1/03
Baa1 BBB 552,605
985,000 New York State Urban Development, (MBIA Insured),
5.300% due 4/1/04 Aaa
AAA 925,900
2,000,000 Niagara, New York, Frontier Transportation Authority,
Greater Buffalo International Airport,
Series B, (AMBAC Insured),
5.750% due 4/1/04 Aaa
AAA 1,932,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----------------------
PORTFOLIO OF INVESTMENTS (continued)
NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- -----------------------
<CAPTION>
RATINGS MARKET
(UNAUDITED) VALUE
FACE VALUE
MOODY'S S&P (NOTE 1)
- ---------------------------------------------------------------------------
- -----------------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEW YORK (CONTINUED)
Niagara County, New York, (MBIA Insured):
$ 350,000 5.700% due 8/15/00 Aaa
AAA $ 349,125
375,000 5.700% due 8/15/01 Aaa
AAA 371,250
550,000 North Country, New York, Development Authority,
Solid Waste Management Systems Revenue,
Series A,
6.500% due 7/1/01
Baa1 NR 536,938
Oneida-Herkimer, New York, Solid Waste
Disposal:
530,000 5.900% due 4/1/98 Baa
BBB 517,412
800,000 6.300% due 4/1/01 Baa
BBB 769,000
Oyster Bay, New York, General Obligation:
200,000 Series B, (FGIC Insured),
6.400% due 2/1/99 Aaa
AAA 206,000
150,000 Series C, (FGIC Insured),
6.300% due 10/1/99 Aaa
AAA 154,500
500,000 Port Authority of New York and New Jersey,
Consolidated Bonds, 79th Series,
5.750% due 7/15/02 A1
AA- 493,125
920,000 Syracuse, New York, Certificates of
Participation,
Hancock International Airport,
6.300% due 1/1/02 A
A 933,800
500,000 Triborough Bridge & Tunnel Authority, New York,
Special Obligation Refunding, Series A, (MBIA Insured),
6.100% due 1/1/00 Aaa
AAA 509,375
100,000 Wappingers Central School District, New York,
(AMBAC Insured),
6.250% due 12/1/99 Aaa
AAA 103,000
1,500,000 Westchester County, New York, Industrial Development,
(AGR Realty Company Project), Revenue Bonds,
5.750% due 1/1/02 NR
NR 1,440,000
500,000 Yonkers, New York, Series A, (FGIC Insured),
6.000% due 2/15/01 Aaa
AAA 505,625
- ---------------------------------------------------------------------------
- -----------------------
53,561,092
- ---------------------------------------------------------------------------
- -----------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----------------
PORTFOLIO OF INVESTMENTS (continued)
NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- -----------------
<CAPTION>
RATINGS
MARKET
(UNAUDITED) VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
- ---------------------------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
PUERTO RICO - 4.9%
$ 750,000 Commonwealth of Puerto Rico,
Highway and Transit Authority, Series U,
5.875% due 7/1/99 Baa1
A $ 744,375
Puerto Rico Public Buildings Authority,
Public Education and Health Facilities Refunding:
500,000 Series I,
6.600% due 7/1/99 A1
A+ 516,250
600,000 Series K, (FGIC Insured),
6.000% due 7/1/01 Aaa
AAA 606,750
1,250,000 Series M,
5.300% due 7/1/03 Baa1
A 1,157,814
- ---------------------------------------------------------------------------
- -----------------
3,025,189
- ---------------------------------------------------------------------------
- -----------------
GUAM - 3.8%
Guam Airport Authority Revenue, Series A:
560,000 5.700% due 10/1/01 NR
BBB 534,800
300,000 5.900% due 10/1/02 NR
BBB 286,875
850,000 5.100% due 10/1/03 NR
BBB 759,688
750,000 Government of Guam, Limited Obligation,
Highway Revenue, Series A,
5.900% due 5/1/02 Aaa
AAA 752,812
- ---------------------------------------------------------------------------
- -----------------
2,334,175
- ---------------------------------------------------------------------------
- -----------------
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $61,852,893)
58,920,456
- ---------------------------------------------------------------------------
- -----------------
SHORT-TERM MUNICIPAL BONDS AND NOTES - 4.0%
NEW YORK - 3.5%
1,000,000 New York, New York, City Industrial
Development Revenue,
3.700% due 11/1/15+ NR
AAA 1,000,000
1,200,000 New York State Energy Research &
Development Authority,
3.550% due 12/1/26++ Aa2
NR 1,200,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -------------------
PORTFOLIO OF INVESTMENTS (continued)
NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- -------------------
<CAPTION>
RATINGS MARKET
(UNAUDITED) VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
- ---------------------------------------------------------------------------
- -------------------
<C> <S> <C> <C>
<C> <C>
SHORT-TERM MUNICIPAL BONDS AND NOTES (CONTINUED)
PUERTO RICO - 0.5%
$ 300,000 Commonwealth of Puerto Rico, Government
Development Authority,
3.450% due 12/1/15++ Aaa
A1 $ 300,000
- ---------------------------------------------------------------------------
- -------------------
TOTAL SHORT-TERM MUNICIPAL BONDS AND NOTES
(Cost $2,500,000)
2,500,000
- ---------------------------------------------------------------------------
- -------------------
TOTAL INVESTMENTS (Cost $64,352,893*) 98.9%
61,420,456
- ---------------------------------------------------------------------------
- -------------------
OTHER ASSETS AND LIABILITIES (NET) 1.1
669,556
- ---------------------------------------------------------------------------
- -------------------
NET ASSETS 100.0%
$62,090,012
- ---------------------------------------------------------------------------
- -------------------
<FN>
* Aggregate cost for Federal tax purposes.
+ Variable rate demand bonds and notes are payable upon not more than one
business day's notice.
++ Variable rate demand bonds and notes are payable upon not more than
seven
business days' notice.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -------------
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- -------------
<S> <C>
<C>
ASSETS:
Investments, at value (Cost $64,352,893) (Note 1)
(See accompanying schedule)
$61,420,456
Interest receivable
908,379
Unamortized organization costs (Note 6)
25,088
Receivable for Fund shares sold
3,112
- ---------------------------------------------------------------------------
- -------------
TOTAL ASSETS
62,357,035
LIABILITIES:
Dividends payable $170,798
Payable for Fund shares redeemed 26,384
Accrued audit fees 18,750
Accrued shareholder reports expense 15,000
Investment advisory fee payable (Note 2) 10,024
Service fee payable (Note 3) 7,561
Custodian fees payable (Note 2) 4,300
Administration fee payable (Note 2) 3,989
Transfer agent fees payable (Note 2) 2,500
Due to custodian 1,617
Accrued expenses and other payables 6,100
- ---------------------------------------------------------------------------
- -------------
TOTAL LIABILITIES
267,023
- ---------------------------------------------------------------------------
- -------------
NET ASSETS
$62,090,012
===========================================================================
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
**************************************************************vestments
sold $(1,555,821)
Unrealized depreciation of investments
(2,932,437)
Par value
7,957
Paid-in capital in excess of par value
66,570,313
- ---------------------------------------------------------------------------
- -------------
TOTAL NET ASSETS
$62,090,012
===========================================================================
=============
NET ASSETS:
CLASS A
NET ASSET VALUE per share+
($62,090,012 / 7,956,800 shares of beneficial interest
outstanding)
$7.80
===========================================================================
=============
MAXIMUM OFFERING PRICE per share ($7.80 / 0.98)
(based on sales charge of 2.00% of the offering price at November 30,
1994)
$7.96
===========================================================================
=============
[FN]
+ Redemption price per share is equal to net asset value less any
applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- ---------------
STATEMENT OF OPERATIONS FOR THE YEAR ENDED
NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- ---------------
<S> <C>
<C>
INVESTMENT INCOME:
Interest
$ 3,740,874
EXPENSES:
Investment advisory fee (Note 2) $ 241,689
Administration fee (Note 2) 138,108
Service fee (Note 3) 103,579
Shareholders reports expense 40,901
Registration and filing fees 35,242
Legal and audit fees 29,427
Transfer agent fees (Note 2) 28,166
Custodian fees (Note 2) 26,454
Amortization of organization costs (Note 6) 12,042
Trustees' fees and expenses (Note 2) 5,520
Other 15,061
Fees waived by investment adviser and administrator (Note 2)
(227,217)
- ---------------------------------------------------------------------------
- ---------------
TOTAL EXPENSES
448,972
- ---------------------------------------------------------------------------
- ---------------
NET INVESTMENT INCOME
3,291,902
===========================================================================
===============
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(NOTES 1 AND 4):
Net realized loss on investments sold during the period
(1,555,501)
Net unrealized depreciation of investments during the year
(4,498,322)
- ---------------------------------------------------------------------------
- ---------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(6,053,823)
===========================================================================
===============
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
$(2,761,921)
===========================================================================
===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- --------------
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------
- --------------
<CAPTION>
YEAR
YEAR
ENDED
ENDED
11/30/94
11/30/93
<S> <C>
<C>
Net investment income $ 3,291,902
$ 2,083,855
Net realized gain/(loss) on investments sold during the
year (1,555,501)
168,933
Net unrealized appreciation/(depreciation) of investments
during the year (4,498,322)
1,222,704
- ---------------------------------------------------------------------------
- --------------
Net increase/(decrease) in net assets resulting from
operations (2,761,921)
3,475,492
Distributions from net investment income -- Class A (3,291,902)
(2,083,855)
Distributions from net realized gain on
investments -- Class A (164,958)
(73,158)
Net increase in net assets from Fund share transactions
(Note 5) -- Class A 1,078,993
41,368,808
- ---------------------------------------------------------------------------
- --------------
Net increase/(decrease) in net assets (5,139,788)
42,687,287
NET ASSETS:
Beginning of year 67,229,800
24,542,513
- ---------------------------------------------------------------------------
- --------------
End of year $62,090,012
$67,229,800
===========================================================================
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----
FINANCIAL HIGHLIGHTS
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<CAPTION>
YEAR YEAR
PERIOD
ENDED ENDED
ENDED
11/30/94 11/30/93
11/30/92*
<S> <C> <C>
<C>
Net asset value, beginning of year $ 8.54 $ 8.18
$ 7.90
- ---------------------------------------------------------------------------
- -------------
Income from investment operations:
Net investment income+ 0.40 0.40
0.38
Net realized and unrealized gain/(loss) on
investments (0.72) 0.38
0.28
- ---------------------------------------------------------------------------
- -------------
Total from investment operations (0.32) 0.78
0.66
- ---------------------------------------------------------------------------
- -------------
Less distributions:
Distributions from net investment income (0.40)
(0.40) (0.38)
Distributions from net realized capital gains (0.02)
(0.02) --
- ---------------------------------------------------------------------------
- -------------
Total distributions (0.42)
(0.42) (0.38)
- ---------------------------------------------------------------------------
- -------------
Net asset value, end of year $ 7.80 $ 8.54
$ 8.18
- ---------------------------------------------------------------------------
- -------------
Total return++ (3.97)% 9.76%
8.59%
- ---------------------------------------------------------------------------
- -------------
Ratios to average net assets/supplemental data:
Net assets, end of year (in 000's) $ 62,090 $ 67,230
$24,543
Ratio of operating expenses to average net
assets+++ 0.65% 0.65%
0.65%**
Ratio of net investment income to average net
assets 4.77% 4.59%
4.95%**
Portfolio turnover rate 68% 22%
68%
- ---------------------------------------------------------------------------
- -------------
<FN>
* The Fund commenced operations on December 31, 1991. Those shares in
existence
prior to November 7, 1994 were designated Class A shares.
** Annualized.
+ Net investment income before waiver of fees by investment adviser and
administrator for the years ended November 30, 1994 and 1993 were $0.37
and
$0.36, respectively. Net investment income before waiver of fees and
reimbursement of expenses by investment adviser, sub-investment adviser
and
administrator, custodian and distributor for the period ended November
30,
1992 was $0.32.
++ Total return represents aggregate total return for the periods indicated
and
does not reflect any applicable sales charges.
+++Annualized operating expense ratios before waiver of fees by investment
adviser and administrator for the years ended November 30, 1994 and 1993
were
0.98% and 1.10%, respectively. Annual operating expense ratios before
waiver
of fees and reimbursement of expenses by investment adviser, sub-
investment
adviser and administrator, custodian and distributor for the period
ended
November 30, 1992 was 1.45%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------
- -----
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Income Trust (the "Trust") was organized as a "Massachusetts
business trust" under the laws of the Commonwealth of Massachusetts on
October
17, 1991. The Trust is registered with the Securities and Exchange
Commission
under the Investment Company Act of 1940, as amended (the "1940 Act"), as
an
open-end management investment company. The Trust consists of the following
four
funds: Smith Barney Limited Maturity Treasury Fund, Smith Barney Limited
Maturity Municipals Fund, Smith Barney Intermediate Maturity California
Municipals Fund and Smith Barney Intermediate Maturity New York Municipals
Fund
(the "Fund"). At the time of this report, the Fund offered three classes of
shares: Class A shares, Class C shares and Class Y shares. Class A shares
are
sold with a front-end sales charge. Class C shares may be subject to a
contingent deferred sales charge ("CDSC") if redeemed within 12 months of
purchase. Class Y shares are available to investors making an initial
investment
of at least $5 million and are not subject to any sales charges,
distribution or
service fees. As of November 7, 1994, the Fund began offering Class C and
Class
Y shares, however, as of November 30, 1994 no Class C or Class Y shares had
been
sold. All shares of the Fund existing prior to November 7, 1994, were
designated
Class A shares. Each class of shares has identical rights and privileges
except
with respect to the effect of the respective sales charges, the
distribution
and/or service fees borne by each class, expenses allocable exclusively to
each
class, voting rights on matters affecting a single class and the exchange
privilege of each class. The following is a summary of significant
accounting
policies consistently followed by the Fund in the preparation of its
financial
statements.
Portfolio valuation: Securities are valued by The Boston Company Advisors,
Inc.
("Boston Advisors") after consultation with an independent pricing service
(the
"Service") approved by the Board of Trustees. When, in the judgment of the
Service, quoted bid prices for securities are readily available and are
representative of the bid side of the market, these investments are valued
at
the mean between the quoted bid prices and asked prices. Securities for
which,
in the judgment of the Service, there are no readily obtainable market
quotations (which may constitute a majority of the portfolio securities)
are
carried at fair value as determined by the Service, based on methods which
include consideration of: yields or prices of municipal securities of
comparable
quality, coupon, maturity and type; indications as to values from dealers;
and
general market conditions. Securities, not valued by the Service, for which
market quotations are not readily available are valued at fair
19
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
value as determined in good faith by or under the direction of the Board of
Trustees. Short-term investments that mature in 60 days or less are valued
at
amortized cost.
Securities transactions and investment income: Securities transactions are
recorded as of the trade date. Securities purchased or sold on a when-
issued or
delayed delivery basis may be settled one month or more after the trade
date.
Interest income is recorded on the accrual basis. Realized gains and losses
from
securities sold are recorded on the identified cost basis.
Dividends and distributions to shareholders: Dividends from net investment
income are determined on a class level and are declared daily and paid
generally
on the 10th day of the calendar month. Distributions determined on a Fund
level,
if any, of any net short- and long-term capital gains earned by the Fund
will be
declared and paid annually after the close of the fiscal year in which they
are
earned. Additional distributions of net investment income and capital gains
for
the Fund may be made at the discretion of the Board of Trustees in order to
avoid the application of a 4.00% nondeductible excise tax on certain
undistributed amounts of net investment income and capital gains. To the
extent
net realized capital gains can be offset by capital losses and loss
carryforwards, it is the policy of the Fund not to distribute such gains.
Income distributions and capital gain distributions are determined in
accordance
with income tax regulations which may differ from generally accepted
accounting
principles. These differences are primarily due to differing treatments of
income and gains on various investment securities held by the Fund, timing
differences and differing characterization of distributions made by the
Fund as
a whole.
Federal income taxes: The Trust intends that the Fund separately qualify
as a
regulated investment company, if such qualification is in the best interest
of
its shareholders, by complying with the requirements of the Internal
Revenue
Code of 1986, as amended, applicable to regulated investment companies and
by
distributing substantially all of its earnings to its shareholders.
Therefore,
no Federal income tax provision is required.
2. INVESTMENT ADVISORY AGREEMENT, ADMINISTRATION
AGREEMENT AND OTHER TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with a division of Mutual Management Corp., which was
transferred
effective November 7, 1994 to Smith Barney Mutual Funds Management Inc.
20
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
("SBMFM"). Mutual Management Corp. and SBMFM are both wholly owned
subsidiaries
of Smith Barney Holdings Inc. ("Holdings"). Holdings is a wholly owned
subsidiary of The Travelers Inc. Under the Advisory Agreement, the Fund
pays a
monthly fee at the annual rate of 0.35% of the value of its average daily
net
assets.
Prior to April 20, 1994, the Fund was party to an administration agreement
(the
"Administration Agreement") with Boston Advisors, an indirect wholly owned
subsidiary of Mellon Bank Corporation ("Mellon"). Under the Administration
Agreement, the Fund paid a monthly fee at the annual rate of 0.20% of the
value
of its average daily net assets.
As of the close of business on April 20, 1994, SBMFM (formerly known as
"Smith,
Barney Advisers, Inc.") succeeded Boston Advisors as the Fund's
administrator.
The new administration agreement contains substantially the same terms and
conditions, including the level of fees, as the predecessor agreement.
As of the close of business on April 20, 1994, the Fund and SBMFM also
entered
into a sub-administration agreement (the "Sub-Administration Agreement")
with
Boston Advisors. Under the Sub-Administration Agreement, SBMFM pays Boston
Advisors a portion of its administration fee at a rate agreed upon from
time to
time between SBMFM and Boston Advisors.
From time to time, the investment adviser and administrator may voluntarily
waive a portion of its investment advisory and/or administration fees
otherwise
payable to it. For the year ended November 30, 1994, the investment adviser
and
administrator voluntarily waived fees of $144,592 and $82,625,
respectively.
For the year ended November 30, 1994, Smith Barney, Inc. ("Smith Barney")
received $132,427 from investors representing commissions (sales charges)
on
sales of Class A shares.
A CDSC is generally payable by Class C shareholders and may be payable by
certain Class A shareholders in connection with the redemption of shares
within
one year after the date of purchase. For the year ended November 30, 1994,
$22,791 in CDSC were paid to Smith Barney by Class A shareholders.
No officer, director or employee of Smith Barney or any of its affiliates
receives any compensation from the Trust for serving as a Trustee or
officer of
the Trust. The Trust pays each Trustee who is not an officer, director or
employee of Smith Barney
21
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
or any of its affiliates $4,000 per annum plus $500 per meeting attended
and
reimburses each such Trustee for travel and out-of-pocket expenses.
Boston Safe Deposit and Trust Company, an indirect wholly owned subsidiary
of
Mellon, serves as the Trust's custodian. The Shareholder Services Group,
Inc., a
subsidiary of First Data Corporation, serves as the Trust's transfer agent.
3. DISTRIBUTION PLAN
Smith Barney acts as distributor of the Fund's shares pursuant to a
distribution
agreement with the Trust and sells shares of the Fund through Smith Barney
or
its affiliates.
Pursuant to Rule 12b-1 under the 1940 Act, the Trust adopted a services and
distribution plan (the "Plan"). Under this Plan, the Fund compensates Smith
Barney for servicing shareholder accounts for Class A and Class C
shareholders,
and covers expenses incurred in distributing Class C shares. Smith Barney
is
paid an annual service fee with respect to Class A and Class C shares of
the
Fund at the annual rate of 0.15% of the value of the average daily net
assets of
each respective class of shares. Smith Barney is also paid an annual
distribution fee with respect to Class C shares at the annual rate of 0.20%
of
the value of the average daily net assets of that class. For the year ended
November 30, 1994, the Fund incurred a service fee of $103,579 for Class A
shares.
Under its terms, the Plan shall remain in effect from year to year,
provided
that such continuance is approved annually by vote of the Trust's Trustees,
including a majority of those Trustees who are not "interested persons" of
the
Trust and who have no direct or indirect financial interest in the
operation of
the Plan.
4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities, excluding short-
term
investments, for the year ended November 30, 1994, were $46,651,814 and
$53,900,191, respectively.
At November 30, 1994, aggregate gross unrealized appreciation for all
securities
in which there was an excess of value over tax cost was $88,153 and
aggregate
gross unrealized depreciation for all securities in which there was an
excess of
tax cost over value was $3,020,590.
22
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
<TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest
which
are divided into three classes (Class A, Class C and Class Y) with a $.001
par
value. Changes in shares of beneficial interest in the Fund were as
follows:
<CAPTION>
YEAR ENDED
YEAR ENDED
11/30/94
11/30/93
Class A Shares* Shares Amount
Shares Amount
- ---------------------------------------------------------------------------
- -------------------
<S> <C> <C> <C>
<C>
Sold 2,019,093 $ 16,902,649
5,539,351 $47,098,821
Issued as reinvestment of dividends 289,917 2,400,444
178,195 1,514,219
Redeemed (2,224,208) (18,224,100)
(846,976) (7,244,232)
- ---------------------------------------------------------------------------
- -------------------
Net increase 84,802 $ 1,078,993
4,870,570 $41,368,808
- ---------------------------------------------------------------------------
- -------------------
<FN>
* As of November 30, 1994, no Class C or Class Y shares had been sold.
</TABLE>
6. ORGANIZATION COSTS
The Fund bears all costs in connection with its organization including the
fees
and expenses of registering and qualifying its shares for distribution
under
Federal and state securities regulations. All such costs are being
amortized on
the straight-line method over a period of five years from the commencement
of
operations of the Fund. In the event that any of the initial shares of the
Fund
are redeemed during such amortization period, the Fund will be reimbursed
for
any unamortized organization costs in the same proportion as the number of
shares redeemed bears to the number of initial shares held at the time of
redemption.
7. CONCENTRATION OF CREDIT
The Fund primarily invests in debt obligations issued by the State of New
York,
its political subdivisions, agencies and public authorities to obtain funds
for
various public purposes. The Fund is more susceptible to factors adversely
affecting issuers of New York municipal securities than is a municipal bond
fund
that is not concentrated in these issuers to the same extent.
8. CAPITAL LOSS CARRYFORWARD
As of November 30, 1994, the Fund had available for Federal tax purposes
unused
capital loss carryforward of $1,450,416 expiring in the year 2002.
23
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------------------------------------------------
- -----
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
SMITH BARNEY INCOME TRUST:
We have audited the accompanying statement of assets and liabilities,
including
the schedule of portfolio investments, of Smith Barney Intermediate
Maturity New
York Municipals Fund, of Smith Barney Income Trust (formerly Smith Barney
Shearson Income Trust), as of November 30, 1994, and the related statement
of
operations for the year then ended, the statement of changes in net assets
for
each of the two years in the period then ended, and the financial
highlights for
each of the two years in the period then ended and for the period from
December
31, 1991 (commencement of operations) to November 30, 1992. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audits 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
November 30, 1994 by correspondence with the custodian and brokers. 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
Smith
Barney Intermediate Maturity New York Municipals Fund, of Smith Barney
Income
Trust, as of November 30, 1994, the results of its operations for the year
then
ended, the changes in its net assets for each of the two years in the
period
then ended, and the financial highlights for each of the two years in the
period
then ended and for the period from December 31, 1991 (commencement of
operations) to November 30, 1992, in conformity with generally accepted
accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 18, 1995
24
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
TAX INFORMATION (UNAUDITED) FISCAL YEAR ENDED NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
Of the dividends paid by the Fund from investment income for the period
ended
November 30, 1994, 100% is tax-exempt for regular Federal income tax
purposes.
25
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PARTICIPANTS
- ---------------------------------------------------------------------------
- -----
DISTRIBUTOR COUNSEL
Smith Barney Inc. Willkie Farr & Gallagher
388 Greenwich Street 153 East 53rd Street
New York, New York 10013 New York, New York 10022
INVESTMENT ADVISER AND TRANSFER AGENT
ADMINISTRATOR
The Shareholder Services Group,
Inc.
Smith Barney Mutual Funds Exchange Place
Management Inc. Boston, Massachusetts 02109
388 Greenwich Street
New York, New York 10013 CUSTODIAN
SUB-ADMINISTRATOR Boston Safe Deposit
and Trust Company
The Boston Company Advisors, Inc. One Boston Place
One Boston Place Boston, Massachusetts 02108
Boston, Massachusetts 02108
26
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
GLOSSARY OF COMMONLY USED MUTUAL FUND TERMS
- ---------------------------------------------------------------------------
- -----
CAPITAL GAIN (OR LOSS): This is the increase (or decrease) in the market
value
(price) of a security in your portfolio. If a stock or bond appreciates in
price, there is a capital gain; if it depreciates there is a capital loss.
A
capital gain or loss is "realized" upon the sale of a security; if net
capital
gains exceed net capital losses, there may be a capital gain distribution
to
shareholders.
CDSC (CONTINGENT DEFERRED SALES CHARGE): One kind of back-end load, a CDSC
may
be imposed if shares are redeemed during the first few years of ownership.
The
CDSC may be expressed as a percentage of either the original purchase price
or
the redemption proceeds. Most CDSCs decline over time, and some will not be
charged if shares are redeemed after a certain period of time.
DISTRIBUTION RATE: This is the rate at which a mutual fund pays out (or
distributes) interest, dividends and realized capital gains to
shareholders. A
fund's distribution rate is usually expressed as an annualized percent of
the
fund's offering price.
DIVIDEND: This is income generated by securities in a portfolio and
distributed
after expenses to shareholders
FRONT-END SALES CHARGE: This is the sales charge applied to an investment
at
the time of initial purchase.
NET ASSET VALUE (NAV): Net asset value is the total market of all
securities
held by a fund, minus any liabilities, divided by the number of shares
outstanding. It is the
value of a single share of a mutual fund on a given day. The total value of
your
investment would be the NAV multiplied by the number of shares you own.
SEC YIELD: This standardized calculation of a mutual fund's yield is based
on a
formula developed by the Securities and Exchange Commission (SEC) to allow
funds
to be compared on an equal basis. It is an annualized yield based on the
portfolio's potential earnings from dividends, interest and yield to
maturity of
its holdings, and it reflects the payments of all portfolio expenses for
the
most recent 30-day period. Mutual funds are required to use this figure
when
stating yield.
TOTAL RETURN: Total return measures a fund's performance, taking into
account
the combination of dividends paid and the gain or loss in the value of the
securities held in the portfolio. It may be expressed on an average annual
basis
or cumulative basis (total change over a given period). In addition, total
return may be expressed with or without the effects of sales charges or the
reinvestment of dividends and capital gains.
Whenever a fund reports any type of performance, it must also report the
average
annual total return according to the standardized calculation developed by
the
SEC. This standardized calculation was introduced to insure that investors
can
compare different funds on an equal basis. The SEC average annual total
return
calculation includes the effects of all fees and sales charges and assumes
the
reinvestment of all dividends and capital gains.
27
<PAGE>
Smith Barney
INTERMEDIATE MATURITY NEW YORK
MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
OUR APPROACH TO MUTUAL FUND INVESTING
- ---------------------------------------------------------------------------
- -----
1. PERSONAL SERVICE
The Smith Barney Financial Consultant ("FC") is highly trained and deeply
committed to client service. Your FC works with you to establish a
relationship
based on one-to-one communication and the highest standards of quality.
2. ANALYZING YOUR NEEDS
Defining your needs and establishing specific goals is the first step
toward any
successful investment program. The Smith Barney Strategic Asset Allocator -
- - a
sophisticated financial planning tool -- can help you and your FC evaluate
your
resources and objectives. This groundwork then becomes the basis for a
strategy
designed specifically for you. Your FC can use the Strategic Asset
Allocator on
a periodic basis to ensure that your investment strategy is keeping pace
with
your changing needs and goals.
3. A UNIQUE MUTUAL FUND INVESTMENT PROGRAM
Your Smith Barney FC offers a number of mutual fund assessment tools that
are
unmatched in the financial services industry. Smith Barney FCs have access
to a
proprietary mutual fund research database that provides information at
their
fingertips on more than 2,100 funds. In addition, working with another
proprietary system known as the Mutual Fund Evaluation Service, your FC can
help
guide you through the complex mutual fund maze. Specifically, the
Evaluation
Service can provide a clear picture of the past performance of mutual funds
you
currently own. Presented in both graphic and numerical form, this
illustration
provides a wealth of easily understood data on more than 2,100 funds. This
complimentary service allows you to judge whether your mutual fund has
helped
meet your investment needs.
4. LOOKING AHEAD
Selecting a mutual fund should not be a one-event process that ends with
the
purchase of shares. You can count on the expertise of your FC as he or she
continues to monitor and evaluate your funds, to suggest new strategies and
to
listen. That, in our opinion, is how to use mutual funds to help achieve
your
financial goals.
28
<PAGE>
INTERMEDIATE SMITH BARNEY
MATURITY ------------
NEW YORK A Member of
TravelersGroup
MUNICIPALS [LOGO]
FUND
TRUSTEES
Burt N. Dorsett
Elliot S. Jaffe
Heath B. McLendon
Cornelius C. Rose, Jr.
OFFICERS
Heath B. McLendon
Chairman of the Board
and Investment Officer
Stephen J. Treadway
President
Joseph P. Deane
Vice President and This report is submitted for the
Investment Officer general information of the
shareholders of Smith Barney
Lewis E. Daidone Intermediate Maturity New York
Senior Vice President Municipals Fund. It is not
and Treasurer authorized for distribution to
prospective investors unless
Christina T. Sydor accompanied by an effective
Secretary Prospectus for the Fund, which
contains information concerning
the Fund's investment policies,
fees and expenses as well as other
pertinent information.
SMITH BARNEY
MUTUAL FUNDS
388 Greenwich Street
New York, New York 10013
Fund 164, 481, 497
FD 0311 A5
[LOGO] Recycled
Recyclable
<PAGE>
[Small box above fund name showing an
aerial shot of the land and ocean
surrounding it.]
SMITH BARNEY
LIMITED
1994
ANNUAL MATURITY
REPORT
MUNICIPALS
FUND
..................................
NOVEMBER 30, 1994
[LOGO] SMITH BARNEY MUTUAL FUNDS
INVESTING FOR YOUR FUTURE.
EVERYDAY.
<PAGE>
DEAR SHAREHOLDER:
Limited Maturity Municipals Fund
We are pleased to provide the annual report and portfolio of investments
for
the fiscal year ended November 30, 1994 for Smith Barney Limited Maturity
Municipals Fund. Since we last reported to you six months ago, prices for
tax-exempt bonds continued to weaken as the Federal Reserve raised interest
rates. As a result, the net asset value per Class A share of the Fund
declined
to $7.94 from $8.26; however, the Fund's tax-exempt distributions of $0.34
per
Class A share offset this decline, and resulted in a slightly positive
total
return for this fiscal period of 0.23% for Class A shares. Further
information
about the performance of your investment during this and previous fiscal
periods is available in this report.
ECONOMIC AND INTEREST RATE OVERVIEW
The Federal Reserve raised short-term interest rates six times in 1994
beginning in February, which is a remarkable number of increases in less
than
one year. The Federal Reserve's goal was to curb any creeping inflation
before
it actually appeared. However, the rise in short-term interest rates also
resulted in a rise in longer-term interest rates and consequently a decline
in
the asset value of many longer-term investments. As a result, most fixed
income
investments performed poorly in 1994, especially in comparison to the
strong
performance they experienced in 1993.
1994 was also a politically intriguing year. First, higher Federal income
tax
rates that were retroactive to 1993 took effect. Second, Congress became
embroiled in controversial legislation on health care which, had it been
successful, could have led to higher taxes. Third, the NAFTA and GATT trade
agreements were successfully passed. Fourth, and perhaps most significant,
the
Republicans achieved an overwhelming victory in both the House and Senate
by
promising lower taxes and spending, and much less government. The many
Republican victories at the state level -- not only in the state
legislatures
but also the governorships -- are even more significant as these 30 states
will
have much power over the electoral process in 1996.
For many investors this was the first glance into a new and more
challenging
investment environment that tested their ability to maintain a long-term
investment focus. However, we now anticipate that interest rates will soon
stabilize as the results of the new Congress become more apparent and the
effects of the Federal Reserve's interest rate policy become more positive.
We
expect that the recent GATT and NAFTA trade pacts will also demonstrate
that the
U.S. is still a world leader in both economic policy and financial markets.
1
<PAGE>
PORTFOLIO SUMMARY
In response to the Federal Reserve's policy of higher short-term interest
rates
and generally declining prices in the tax-exempt market, our investment
strategy
has been to keep the Fund's average maturity at approximately 3 years,
which
enables the Fund to maximize its tax-exempt income yet minimize its
exposure to
rising interest rates. At the end of this reporting period, over half of
the
Fund's assets were invested in municipal bonds rated AAA/Aaa and AA/Aa by
Standard & Poor's Corporation or Moody's Investor Services, Inc.,
respectively.
We believe these high-quality investments provide the portfolio with
greater
protection against credit risk and are also more liquid. The majority of
the
Fund's holdings were in general obligation, hospital, education, and
housing
issues.
DIVIDEND POLICY
The Fund does not pay a level monthly dividend rate but instead distributes
to
shareholders the accrued monthly income earned by the portfolio. We will
continue to strive to offer an attractive dividend distribution as we also
face
uncertain interest rates and continued volatility.
We appreciate your confidence during the difficult investment environment
of
1994, and join you in looking forward to a more benign 1995. Should you
have any
questions about your investment in the Fund or how other Smith Barney
mutual
funds may be useful in helping you reach your financial goals, please speak
with
your Smith Barney Financial Consultant.
Sincerely,
/s/ Heath B. McLendon /s/ Lawrence T. McDermott
Heath B. McLendon Lawrence T. McDermott
Chairman of the Board Vice President and
and Investment Officer Investment Officer
January 12, 1995
2
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO HIGHLIGHTS (UNAUDITED) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
Industry Breakdown
Pie chart depicting the allocation of the Income Trust Limited Maturity
Municipals Fund investment securities held at November 30, 1994 by industry
classification. The pie is broken in pieces representing industries in the
following percentages:
<CAPTION>
INDUSTRY PERCENTAGE
<S> <C>
General Obligation 20.3%
Privately Placed Tax-Exempt Municipal
Lease Agreement and Net Other Assets
and Liabilities 2.1%
Education 14.3%
Housing 12.0%
Transportation 6.2%
Pollution Control 5.5%
Other Munmicipal Bonds and Notes 14.2%
Hospital 15.6%
Industry Development 2.6%
Utility 7.2%
</TABLE>
<TABLE>
SUMMARY OF MUNICIPAL BONDS BY COMBINED RATINGS
<CAPTION>
Standard & Percent
Moody's Poor's of Value
- ---------------------------------------------------------------------------
- -
<S> <C> <C> <C>
AAA OR AAA 34.9%
- ---------------------------------------------------------------------------
- -
AA AA 16.8
- ---------------------------------------------------------------------------
- -
A A 24.9
- ---------------------------------------------------------------------------
- -
BAA BBB 22.0
- ---------------------------------------------------------------------------
- -
NR NR 1.4
- ---------------------------------------------------------------------------
- -
100.0%
------------------
- -
<FN>
AVERAGE MATURITY 3.0 years
</TABLE>
3
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----
HISTORICAL PERFORMANCE - CLASS A SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- -----
<CAPTION>
Year Ended Net Asset Value Capital Gains Dividends
Total
November 30 Beginning Ending Distributed Paid
Return*
- ---------------------------------------------------------------------------
- -----
<S> <C> <C> <C> <C>
<C>
12/31/91-
11/30/92 $7.90 $8.07 -- $0.36
6.88%
- ---------------------------------------------------------------------------
- -----
1993 8.07 8.26 $0.00+ 0.36
6.98%
- ---------------------------------------------------------------------------
- -----
1994 8.26 7.94 0.00+ 0.34
0.23%
- ---------------------------------------------------------------------------
- -----
Total $0.00+ $1.06
- ---------------------------------------------------------------------------
- -----
Cumulative Total Return -- (12/31/91 through 11/30/94)
14.59%
- ---------------------------------------------------------------------------
- -----
<FN>
* Figures assume reinvestment of all dividends and capital gains
distributions
at net asset value and do not reflect deduction of a front-end sales
charge
(maximum 2.00%).
+ Amount represents less than $0.01 per share.
</TABLE>
THE FUND'S POLICY IS TO DISTRIBUTE DIVIDENDS MONTHLY
AND CAPITAL GAINS, IF ANY, ANNUALLY.
<TABLE>
- ---------------------------------------------------------------------------
- ----------
AVERAGE ANNUAL TOTAL RETURN** - CLASS A SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- ----------
<CAPTION>
Without Sales Charges With Sales
Charges***
With fees Without fees With fees
Without fees
waived waived waived
waived
- ---------------------------------------------------------------------------
- ----------
<S> <C> <C> <C>
<C>
Year Ended 11/30/94 0.23% (0.09)% (1.78)%
(1.92)%
- ---------------------------------------------------------------------------
- ----------
Inception (12/31/91) through
11/30/94 4.78% 4.37% 4.06%
3.65%
- ---------------------------------------------------------------------------
- ----------
<FN>
** All average annual total return figures shown reflect the reinvestment
of dividends
and capital gains distributions at net asset value. The investment
adviser and
administrator waived fees from December 31, 1991 to the present. A
shareholder's
actual return for the period during which waivers were in effect would
be the higher
of the two numbers shown.
*** Average annual total return figures shown assume the deduction of a
maximum 2.00% sales charge.
NOTE: On November 7, 1994, existing shares of the Fund were designated
Class A shares. Class A
shares are sold subject to a 2.00% front-end sales charge; however,
purchases of Class A shares,
which when combined with current holdings of Class A shares offered
with a sales charge equal
or exceed $500,000 in the aggregate, will be made at net asset value
with no initial sales charge
but will be subject to 1.00% contingent deferred sales charge if
redeemed within 12 months of
purchase. Class A shares of the Fund are subject to a service fee of
0.15% of the value of the
average daily net assets attributable to that class.
</TABLE>
4
<PAGE>
GROWTH OF $10,000 INVESTED IN CLASS A SHARES OF
SMITH BARNEY LIMITED MATURITY MUNICIPALS FUND
VS. LEHMAN BROTHERS 5-YEAR MUNICIPAL BOND INDEX
AND LIPPER ANALYTICAL SERVICES, INC. PEER GROUP AVERAGE INDEX+
- ---------------------------------------------------------------------------
- -----
December 31, 1991 - November 30, 1994
<TABLE>
DESCRIPTION OF MOUNTAIN CHART IN SMITH BARNEY COVERS (CLASS A)
A line graph depicting the total growth (including reinvestment of
dividends and capital gains)
of a hypothetical investment of $10,000 in Smith Barney Income Trust
Limited Maturity Municipals
Fund Class A shares on December 31, 1991 through November 30, 1994 as
compared with the growth of
a $10,000 investment in the Lehman Brothers 5 Year Municipal Bond Index and
the Lipper Analytical
Services, Inc. Peer Group Average Index. The plot points used to draw the
line graph were as follows:
<CAPTION>
GROWTH OF $10,000
GROWTH OF $10,000
INVESTMENT IN THE
INVESTMENT IN THE
GROWTH OF $10,000 LEHMAN BROTHERS
LIPPER ANALYTICAL
INVESTED IN CLASS A 5 YEAR MUNICIPAL
SERVICES, INC. PEER
MONTH ENDED SHARES OF THE FUND BOND INDEX GROUP
AVERAGE INDEX
<S> <C> <C>
<C>
12/31/91 $9,800 $10,000
$10,000
12/91 $9,800 -
- -
3/92 $9,889 $10,006
$10,066
6/92 $10,139 $10,342
$10,301
9/92 $10,350 $10,611
$10,489
12/92 $10,547 $10,762
$10,636
3/93 $10,790 $11,045
$10,852
6/93 $11,004 $11,301
$11,022
9/93 $11,214 $11,560
$11,190
12/93 $11,310 $11,701
$11,306
3/94 $11,107 $11,372
$11,139
6/94 $11,196 $11,494
$11,222
9/94 $11,303 $11,605
$11,314
11/94 $11,230 $11,422
$11,234
<FN>
+ Illustration of $10,000 invested in Class A shares at inception on
December 31, 1991
through November 30, 1994, assuming deduction of a maximum 2.00% sales
charge at the
time of investment and reinvestment of dividends and capital gains at
net asset value.
</TABLE>
LEHMAN BROTHERS 5-YEAR MUNICIPAL BOND INDEX is an unmanaged, broad-based
index which includes about 3,400 tax-free issues totaling approximately
$39 billion in market capitalization. The average maturity of the
securities in the index is approximately 5.09 years.
LIPPER ANALYTICAL SERVICES, INC. PEER GROUP AVERAGE INDEX is composed of
an average of the Fund's peer group of mutual funds (47 as of November
30, 1994) investing in limited maturity municipal securities.
This period was one in which municipal bond prices fluctuated and the
results should not be considered as a representation of the dividend
income or capital gain or loss which may be realized from an investment
in the Fund today. No adjustment has been made for shareholder tax
liability on dividends or capital gains.
NOTE: All figures cited here represent past performance and do not
guarantee future results.
5
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- ----------------
HISTORICAL PERFORMANCE - CLASS C SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- ----------------
<CAPTION>
Net Asset Value Capital Gains
Dividends Total
Beginning Ending Distributed Paid
Return*
- ---------------------------------------------------------------------------
- ----------------
<S> <C> <C> <C> <C>
<C>
Inception (11/17/94)
through 11/30/94 $7.92 $7.94 --
$0.00+ 0.31%
- ---------------------------------------------------------------------------
- ----------------
<FN>
* Figures assume reinvestment of all dividends and capital gains
distributions at net asset
value and do not reflect deduction of any contingent deferred sales
charge.
+ Amount represents less than $0.01 per share.
</TABLE>
<TABLE>
- ---------------------------------------------------------------------------
- -----
CUMULATIVE TOTAL RETURN** - CLASS C SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- -----
<CAPTION>
With fees Without
fees
waived
waived
- ---------------------------------------------------------------------------
- -----
<S> <C> <C>
Inception (11/17/94) through 11/30/94 0.31% 0.31%
- ---------------------------------------------------------------------------
- -----
<FN>
** All cumulative total return figures shown reflect the reinvestment of
dividends and capital gains distributions at net asset value. The
investment adviser and administrator waived fees from November 17, 1994
to the present. A shareholder's actual return for the period during
which waivers were in effect would be the higher of the two numbers
shown.
NOTE: On November 7, 1994, the Fund began offering Class C and Class Y
shares. Class C shares may be subject to a 1.00% contingent deferred
sales charge if redeemed within 12 months of purchase and are subject
to
annual service and distribution fees of 0.15% and 0.20%, respectively,
of the value of the average daily net assets attributable to that
class.
As of November 30, 1994, no Class Y shares had been sold.
</TABLE>
6
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
- ---------------------------------------------------------------------------
- -----
KEY TO INSURANCE ABBREVIATIONS
- ---------------------------------------------------------------------------
- -----
AMBAC -- American Municipal Bond Assurance
Corporation
CGIC -- Capital Guaranty Insurance Corporation
FGIC -- Federal Guaranty Insurance Corporation
FHA -- Federal Housing Administration
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
- ---------------------------------------------------------------------------
- ----------------
<S> <C> <C> <C>
<C>
MUNICIPAL BONDS AND NOTES - 97.9%
ALABAMA - 1.0%
Alabama Housing Finance Authority, Single
Mortgage,
$ 245,000 5.250% due 4/1/98 Aaa NR
$ 238,875
255,000 5.250% due 10/1/98 Aaa NR
247,669
260,000 5.400% due 4/1/99 Aaa NR
251,875
ARIZONA - 1.1%
810,000 Yuma & La Paz County, Arizona, Community
College District, (Arizona Western College),
(AMBAC Insured),
6.200% due 7/1/98 Aaa
AAA 830,250
CALIFORNIA - 1.3%
1,000,000 Central Valley, California, Financing
Authority, Cogeneration Project Revenue,
(Carson Inc.), 5.000% due 7/1/98 NR
BBB- 963,750
COLORADO - 2.0%
610,000 Arapahoe County, Colorado, Certificates of
Participation, (AMBAC Insured),
5.400% due 12/1/96 Aaa
AAA 615,338
390,000 Colorado Housing Finance Authority, Single
Family Project, Series A3 5.750% due 5/1/97 NR AA
387,562
500,000 Meridian, Colorado, Metropolitan District,
General Obligation, Refunding Bonds,
7.000% due 12/1/97 A3 NR
522,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
- ---------------------------------------------------------------------------
- -----------------
<S> <C> <C> <C>
<C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
CONNECTICUT - 0.8%
$ 625,000 New Haven, Connecticut, General Obligation,
Series B, 5.700% due 12/1/97 Baa
BBB- $ 622,656
DISTRICT OF COLUMBIA - 3.3%
995,000 District of Columbia, Certificates of
Participation, 6.000% due 1/1/97 NR
BBB 987,538
250,000 District of Columbia, General Obligation,
Series A, 5.000% due 6/1/98 Baa A-
240,625
1,295,000 District of Columbia, Metropolitan Area
Transportation, (FGIC Insured),
6.000% due 7/1/98 Aaa
AAA 1,320,900
FLORIDA - 3.2%
850,000 Broward County, Florida, Educational Facilities
Authority Revenue, 5.150% due 4/1/99 NR
AAA 822,375
1,125,000 Dade County, Florida, Health Facilities
Authority Hospital Revenue, Series A, (Baptist
Hospital, Miami), 5.750% due 5/1/16 NR A+
1,134,844
500,000 Florida Housing Finance Agency, Adjustable
Multifamily Mortgage, Series QQ, (FSA Insured),
5.500% due 11/1/07 Aaa
AAA 495,625
GEORGIA - 1.8%
1,250,000 Municipal Electric Authority of Georgia,
Special Obligation Refunding, Second Crossover
Series, 8.125% due 1/1/17 A A+
1,350,000
GUAM - 2.3%
1,800,000 Government of Guam, General Obligation Bonds,
Series A, 5.750% due 8/15/99 NR
BBB 1,782,000
IDAHO - 0.3%
220,000 Idaho Housing Agency, Single Family Mortgage,
Refunding Bonds, 5.500% due 1/1/97 Aa NR
218,350
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
- ---------------------------------------------------------------------------
- -----------------
<S> <C> <C> <C>
<C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
ILLINOIS - 8.4%
$ 250,000 Hoffman Estates, Illinois, Tax Increment
Revenue, Junior Lien, (Hoffman Estates
Development Project), 6.500% due 5/15/01 Baa1
BBB+ $ 247,500
1,000,000 Illinois Development Financing Authority,
Adjustable Demand Revenue Bonds, (Catholic
Charities Housing), Series A, 5.000% due 1/1/28 Aa2 NR
985,000
500,000 Illinois Educational Facilities Authority,
Adjustable Demand Revenue Bonds, (Museum of
Science and Industry), 5.625% due 10/1/26 Aa3 NR
496,875
Illinois Health Facilities Authority, Revenue
Bonds:
1,040,000 (Children's Memorial Hospital),(MBIA Insured),
6.000% due 8/15/98 Aaa AAA
1,055,600
1,045,000 (Delnor Community Hospital),(FSA Insured),
4.500% due 5/15/98 Aaa AAA
1,004,506
1,650,000 Joliet, Illinois, Corporate Purpose, (MBIA
Insured), 5.400% due 1/1/98 Aaa AAA
1,643,812
1,000,000 St. Clair County, Illinois, General Obligation,
(FGIC Insured), 4.600% due 10/1/98 Aaa AAA
968,750
INDIANA - 2.1%
Indiana Bond Bank, Special Project:
415,000 Series F,
5.800% due 8/1/97 NR A
421,744
500,000 Guaranteed Revolving,
4.900% due 2/1/99 NR A
483,125
750,000 Warrick County, Indiana, Environmental
Improvement, (Southern Indiana Gas & Electric
Project), Series A, 4.650% due 5/1/28 Aa2 AA
721,875
IOWA - 3.2%
500,000 Iowa State, Certificates of Participation,
Series A, (AMBAC Insured), 5.400% due 7/1/96 Aaa AAA
504,375
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED) MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
- ---------------------------------------------------------------------------
- ------------------
<S> <C> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
IOWA (CONTINUED)
$ 435,000 Iowa State, Housing Finance Authority, Single
Family Mortgage, Series F, (AMBAC Insured),
5.150% due 1/1/98 Aaa
AAA $ 432,281
350,000 Iowa Student Loan Liquidity Corporation,
Student Loan Revenue, Series A,
6.000% due 3/1/98 Aa1
NR 350,875
1,190,000 Sioux City, Iowa, Hospital Revenue Refunding,
(Sisters of Mercy Health), Series D, (MBIA
Insured), 5.000% due 8/15/98 Aaa
AAA 1,163,225
KENTUCKY - 1.3%
990,000 University of Louisville, Kentucky, Series J,
4.875% due 5/1/98 A1
AA- 975,150
LOUISIANA - 1.7%
305,000 Louisiana Public Facilities Revenue, Student
Loan, Louisiana Opportunity Loan, Series A,
(FSA Insured), 5.700% due 1/1/97 Aaa
AAA 307,669
500,000 Louisiana State, General Obligation Refunding
Bond, Series A, (CGIC Insured),
6.600% due 8/1/97 Aaa
AAA 520,000
500,000 New Orleans, Louisiana, Exhibit Hall Authority,
Hotel Occupancy Tax Revenue, (AMBAC Insured),
5.250% due 1/15/97 Aaa
AAA 501,250
MAINE - 0.3%
250,000 Maine Health & Higher Educational Facilities,
Special Obligation Revenue, Medium Term
Facilities, (FSA Insured), 5.500% due 7/1/97 Aaa
AAA 250,625
MARYLAND - 0.4%
320,000 Montgomery County, Maryland, Housing Authority,
Multifamily Revenue, Series 85A, (Hunt Club),
6.000% due 2/1/97++++ Aa
AA+ 318,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED) MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
- ---------------------------------------------------------------------------
- ------------------
<S> <C> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
MASSACHUSETTS - 8.4%
$ 750,000 Lowell, Massachusetts, General Obligation,
5.500% due 8/15/97 Baa1
NR $ 751,875
Massachusetts Municipal Electric Wholesale
Company,
Power Supply System Revenue:
Series C:
285,000 5.800% due 7/1/96 A
BBB+ 287,850
205,000 6.000% due 7/1/97 A
BBB+ 208,075
Series E:
100,000 5.100% due 7/1/97 A
BBB+ 99,125
445,000 Massachusetts State Health and Educational
Facilities Authority, Medical Center of Central
Massachusetts, Series A, 6.000% due 7/1/97 A
A 451,119
1,000,000 Massachusetts State Housing Authority,
5.350% due 1/1/99 Aaa
AAA 975,000
Massachusetts Water Resources Authority,
500,000 Series A, 5.600% due 7/15/96 A
A 502,500
New England Educational Loan Marketing
Corporation, Student Loan:
1,000,000 Series B,
5.000 due 6/1/98 A1
A- 967,500
1,000,000 Series C,
4.750% due 7/1/98 A1
A- 962,500
500,000 Plymouth County, Massachusetts, Certificates of
Participation, Series A, 5.700% due 10/1/96 NR
BBB- 498,750
720,000 Springfield, Massachusetts, School Project,
Series B, 5.300% due 9/1/97 Baa
NR 719,100
MICHIGAN - 1.3%
750,000 Detroit, Michigan, District State Aid,
5.625% due 5/1/97 Baa
BBB+ 751,875
250,000 Michigan Higher Education Student Loan,
Education Revenue, Series XIV-A,
5.400% due 10/1/96 A
NR 249,062
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED) MARKET VALUE
FACE VALUE
MOODY'S S&P (NOTE 1)
- ---------------------------------------------------------------------------
- ----------------------
<S> <C> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEVADA - 2.8%
$ 1,000,000 Clark County, Nevada, Airport Systems Revenue,
(MBIA Insured), 7.500% due 7/1/97 Aaa
AAA $1,057,500
1,000,000 Clark County, Nevada, General Obligation, (FGIC
Insured), 7.500% due 7/1/04 Aaa
AAA 1,080,000
NEW HAMPSHIRE - 0.4%
275,000 New Hampshire Higher Education & Health
Authority Revenue, (Elliot Hospital of Manchester),
(AMBAC Insured), 5.700% due 10/1/97 Aaa
AAA 277,750
NEW JERSEY - 3.3%
500,000 Atlantic County, New Jersey, Utilities
Authority, Solid Waste Revenue, 6.250% due 3/1/97 Baa
NR 501,875
435,000 Camden County, New Jersey, Pollution Control
Finance Authority, Solid Waste Resource
Recovery Revenue, Series D, 6.350% due 12/1/97 Baa1
BBB+ 437,175
1,075,00 Hudson County, New Jersey, Improvement
Authority, 5.750% due 1/1/98 NR
BBB- 1,044,094
500,000 New Jersey Health Care Facilities Center,
(Atlantic City Medical Center), Series C,
5.600% due 7/1/96 A
A- 501,250
NEW MEXICO - 0.5%
410,000 New Mexico Mortgage Finance Authority, Single
Family, Series A1, 5.500% due 1/1/97 Aa
AA 406,412
NEW YORK - 13.1%
1,450,000 Babylon, New York, Industrial Development
Authority, Babylon Community Waste Management,
Series A, 7.650% due 7/1/97 Baa1
NR 1,527,937
600,000 Metropolitan Transit Authority, New York,
Service Contract Transit Fees, Series 5,
6.100% due 7/1/98 Baa1
BBB 605,250
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED) MARKET VALUE
FACE VALUE
MOODY'S S&P (NOTE 1)
- ---------------------------------------------------------------------------
- ------------------------
<S> <C> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEW YORK (CONTINUED)
Metropolitan Transit Authority, New York,
General Obligation:
$ 500,000 6.600% due 1/1/99 Aaa
AAA $ 517,500
750,000 Series C,
5.400% due 8/1/97
Baa1 A- 753,750
2,000,000 Series H,
5.100% due 8/1/98
Baa1 A- 1,982,500
1,000,000 Series I,
6.000% due 8/1/96
Baa1 A- 1,011,250
850,000 New York State, Certificates of Participation,
5.150% due 2/1/98
Baa1 BBB 822,375
640,000 New York State, Medical Care Facilities Agency,
Mental Health Service Facilities Improvement,
Series D,
6.300% due 8/15/97
Baa1 BBB+ 653,600
1,250,000 New York State, Transportation Highway
Authority, Service Contract, Highway and Bridge Revenue,
5.200% due 4/1/97
Baa1 BBB 1,237,500
North County, New York, Solid Waste Disposal,
Series A:
455,000 5.400% due 7/1/95
Baa NR 454,431
400,000 6.000% due 7/1/97
Baa1 NR 399,500
NORTH CAROLINA - 0.8%
615,000 Charlotte, North Carolina, Certificates of
Participation, Municipal Facilities Purchase
Project, Series A,
4.900% due 1/1/98
NR AA 603,469
OHIO - 1.3%
1,000,000 Ohio State, Public Facilities Commission,
Series II-A, (FSA Insured),
5.300% due 12/1/97
Aaa AAA 1,003,750
OKLAHOMA - 1.6%
Cleveland County, Oklahoma, Home Loan
Authority, Single Family Mortgage Revenue:
175,000 6.000% due 8/1/96
A NR 174,344
150,000 6.100% due 2/1/97
A NR 149,250
190,000 6.100% due 8/1/97
A NR 188,813
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED) MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
- ---------------------------------------------------------------------------
- ------------------
<S> <C> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
OKLAHOMA (CONTINUED)
$ 750,000 Grand River Dam Authority,
4.700 % due 6/1/97 A
A- $ 742,500
OREGON - 0.6%
500,000 Clackamas County, Oregon, Hospital Facilities
Authority Revenue, (Sisters of Providence),
Series A,
5.300% due 10/1/96 A1
AA- 500,000
PENNSYLVANIA - 6.7%
125,000 Falls Township, Pennsylvania Hospital Authority
Revenue, (Delaware Valley Medical), (FHA
Insured),
6.000% due 8/1/01 NR
AAA 116,719
500,000 Lehigh County, Pennsylvania, Industrial and
Community Development Authority,
(Strawbridge Project),
7.200% due 12/15/01 NR
BBB 500,000
500,000 Pennsylvania State Higher Education,
(Thomas Jefferson University), Series A,
5.500% due 8/15/97 Aa
A+ 503,125
1,170,000 Pennsylvania State Industrial Development
Authority Revenue, (AMBAC Insured),
6.000% due 1/1/99 Aaa
AAA 1,184,625
Philadelphia, Pennsylvania, Hospitals and
Higher Education Facilities Authority:
(Albert Einstein Medical Center):
365,000 6.300% due 10/1/96 A
BBB+ 365,912
390,000 6.500% due 10/1/97 A
BBB+ 388,538
1,000,000 (Graduate Health Systems),
6.500% due 7/1/97 Baa1
BBB+ 1,001,250
275,000 Philadelphia, Pennsylvania, Water & Sewer
Revenue, 12th Series,
7.300% due 7/1/96 NR
AAA 284,969
750,000 Westmoreland County, Pennsylvania,
Industrial Development Authority, (Valley
Landfill Project),
4.375% due 5/1/18++++ Aa1
AA 737,813
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED) MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
- ---------------------------------------------------------------------------
- ------------------
<S> <C> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
PUERTO RICO - 0.5%
$ 420,000 Puerto Rico Medical Hospital, Series A,
(St. Lukes Hospital),
5.400% due 6/1/97 NR
A- $ 412,650
RHODE ISLAND - 0.7%
500,000 Rhode Island State, Student Loan Authority,
Series A,
5.700% due 12/1/96 A
NR 500,625
SOUTH CAROLINA - 0.7%
500,000 South Carolina State, Public Service Authority,
Revenue, (Santee-Cooper Project), Series D,
5.500% due 7/1/98 A1
A+ 500,625
TEXAS - 9.4%
500,000 Arlington, Texas, Waterworks & Sewer Revenue,
Refunding and Improvement, (FGIC Insured),
5.400% due 6/1/97 Aaa
AAA 503,750
2,000,000 Bell County, Texas, Health Facilities
Development
Corporation, Central Texas Pooled Health,
Series A,
4.750% due 10/1/23 NR
AA 1,907,500
1,000,000 Brazos, Texas, Higher Education Authority,
Series A-1,
5.300% due 12/1/97 Aa
NR 987,500
300,000 Dallas-Forth Worth, Texas, Regional Airport
Revenue, Series A, (FGIC Insured),
5.875% due 11/1/07 Aaa
AAA 296,250
1,000,000 Harris, Texas, Port Houston Authority, (MBIA
Insured),
5.700% due 5/1/99 Aaa
AAA 1,001,250
1,000,000 North Texas, Higher Education Authority,
Student Loan Revenue, Series B,
4.850% due 4/1/98 Aaa
NR 967,500
1,000,000 Tarrant County, Texas, Housing Finance
Corporation, Multifamily Housing, (Bedford
Springs),
4.500% due 9/1/06 NR
AA- 1,000,000
500,000 Texas State, Veterans Housing Assistance,
(FHA Insured),
6.050% due 12/1/12 Aa
AA 488,125
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED) MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<S> <C> <C>
<C> <C>
- ---------------------------------------------------------------------------
- ------------------
MUNICIPAL BONDS AND NOTES (CONTINUED)
VIRGIN ISLANDS - 0.8%
$ 635,000 Virgin Islands Public Financing Authority,
Matching
Revenue Funding, Series A,
6.250% due 10/1/96 NR
NR $ 638,969
VIRGINIA - 1.3%
500,000 Fairfax County, Virginia, Redevelopment &
Housing Authority, Multifamily Housing Revenue
Refunding, Mortgage Loan, Kingsley, Series A,
(FHA Insured),
6.500% due 11/1/01 NR
AAA 495,000
500,000 Virginia Educational Loan Authority, Guaranteed
Revenue, Series C,
4.850% due 3/1/98 Aaa
NR 485,625
WASHINGTON - 2.7%
485,000 Washington State Housing Finance, Single Family
Mortgage Revenue, (GNMA and FNMA Securities
Program), Series D,
5.800% due 7/1/97 NR
AAA 480,150
1,500,000 Washington State Public Power Supply, Series B,
(Nuclear Project No. 3),
7.000% due 7/1/97 Aa
AA 1,554,375
WISCONSIN - 4.7%
Wisconsin Housing Economic and Development
Authority:
1,045,000 4.500% due 11/1/98 A1
A 983,606
250,000 Series A,
5.400% due 11/1/97 A1
A 246,875
2,360,000 Wisconsin, State, Health & Educational
Facilities
Authority, (Aurora Health Care),(MBIA Insured),
5.500% due 8/15/98 Aaa
AAA 2,351,150
WYOMING - 1.8%
1,500,000 Platte County, Wyoming, Pollution Control
Revenue,
4.200% due 1/1/99 A2
A 1,396,875
- ---------------------------------------------------------------------------
- -----------------
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $76,320,398)
74,724,426
- ---------------------------------------------------------------------------
- -----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PORTFOLIO OF INVESTMENTS (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
RATINGS
(UNAUDITED)
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<S> <C> <C>
<C> <C>
- ---------------------------------------------------------------------------
- -----------------
PRIVATELY PLACED TAX-EXEMPT
MUNICIPAL LEASE AGREEMENT -- 0.5% (COST $421,286)
TENNESSEE -- 0.5%
$ 416,907 The Health and Educational Facilities Board of
the Metropolitan Government of Nashville and
Davidson County, Tennessee, on behalf of Cocke
County, Baptist Hospital 7.250% due 9/1/96+++ NR NR
$ 413,780
- ---------------------------------------------------------------------------
- -----------------
TOTAL INVESTMENTS (Cost $76,741,684*) 98.4%
75,138,206
- ---------------------------------------------------------------------------
- -----------------
OTHER ASSETS AND LIABILITIES (NET) 1.6
1,204,744
- ---------------------------------------------------------------------------
- -----------------
NET ASSETS 100.0%
$76,342,950
- ---------------------------------------------------------------------------
- -----------------
<FN>
* Aggregate cost for Federal tax purposes.
+++ Backed by an irrevocable bank letter of credit in the amount of
$416,907.
++++
"Put" bonds and notes with demand features with maturities greater
than one year.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- ----------------
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- ----------------
<S> <C>
<C>
ASSETS:
Investments, at value (Cost $76,741,684) (Note 1)
See accompanying schedule
$75,138,206
Interest receivable
1,368,066
Receivable for investment securities sold
1,218,145
Receivable for Fund shares sold
170,047
Unamortized organization costs (Note 7)
25,088
- ---------------------------------------------------------------------------
- ----------------
TOTAL ASSETS
77,919,552
LIABILITIES:
Due to custodian $1,117,693
Dividends payable 187,253
Payable for Fund shares redeemed 126,366
Investment advisory fee payable (Note 2) 47,985
Administration fee payable (Note 2) 27,420
Service fee payable (Note 3) 9,734
Custodian fees payable (Note 2) 6,000
Transfer agent fees payable (Note 2) 3,500
Accrued expenses and other payables 50,651
- ---------------------------------------------------------------------------
- ----------------
TOTAL LIABILITIES
1,576,602
- ---------------------------------------------------------------------------
- ----------------
NET ASSETS
$76,342,950
===========================================================================
================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- ---------------
STATEMENT OF ASSETS AND LIABILITIES (continued) NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- ---------------
<S> <C>
<C>
NET ASSETS CONSIST OF:
Undistributed net investment income
$ 8,275
Accumulated net realized loss on investments sold
(661,793)
Net unrealized depreciation of investments
(1,603,478)
Par value
9,618
Paid-in capital in excess of par value
78,590,328
- ---------------------------------------------------------------------------
- ---------------
TOTAL NET ASSETS
$76,342,950
- ---------------------------------------------------------------------------
- ---------------
NET ASSET VALUE:
CLASS A SHARES
NET ASSET VALUE per share+
($76,236,934 / 9 ,605,017 shares of beneficial interest
outstanding)
$7.94
- ---------------------------------------------------------------------------
- ---------------
MAXIMUM OFFERING PRICE per share ($7.94 / 0 .98)
(based on sales charge of 2.00% of the offering price on November 30,
1994)
$8.10
- ---------------------------------------------------------------------------
- ---------------
CLASS C SHARES
NET ASSET VALUE and offering price per share+
($106,016 / 13,354 shares of beneficial interest outstanding)
$7.94
- ---------------------------------------------------------------------------
- ---------------
<FN>
+ Redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- --------------
STATEMENT OF OPERATIONS FOR THE YEAR ENDED NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- --------------
<S> <C>
<C>
INVESTMENT INCOME:
Interest
$4,631,334
EXPENSES:
Investment advisory fee (Note 2) $ 327,452
Administration fee (Note 2) 187,115
Service fee (Note 3) 140,336
Transfer agent fees (Notes 2 and 4) 39,658
Custodian fees (Note 2) 33,711
Legal and audit fees 29,427
Amortization of organization costs (Note 7) 12,042
Trustees' fees and expenses (Note 2) 5,520
Other 102,501
Fees waived by investment adviser and administrator (Note 2)
(129,091)
- ---------------------------------------------------------------------------
- --------------
TOTAL EXPENSES
748,671
- ---------------------------------------------------------------------------
- --------------
NET INVESTMENT INCOME
3,882,663
===========================================================================
==============
REALIZED AND UNREALIZED GAINS/(LOSS) ON INVESTMENTS
(NOTES 1 AND 5):
Net realized loss on investments during the year
(616,478)
Net unrealized depreciation of investments during the year
(3,140,215)
===========================================================================
==============
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(3,756,693)
===========================================================================
==============
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$ 125,970
===========================================================================
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
<TABLE>
- ---------------------------------------------------------------------------
- ---------------
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------
- ---------------
<CAPTION>
YEAR
YEAR
ENDED
ENDED
11/30/94
11/30/93
<S> <C>
<C>
Net investment income $ 3,882,663
$ 2,761,200
Net realized loss on investments sold during the year (616,478)
(36,551)
Net unrealized appreciation/(depreciation) of investments
during the year (3,140,215)
1,092,054
- ---------------------------------------------------------------------------
- ---------------
Net increase in net assets resulting from operations 125,970
3,816,703
Distributions to shareholders from net investment income:
Class A (3,882,660)
(2,752,925)
Class C (3)
- --
Distribution to shareholders from net realized gain on
investments:
Class A (8,764)
(20,318)
Net increase/(decrease) in net assets from Fund share
transactions (Note 6):
Class A (16,418,251)
58,998,036
Class C 106,015
- --
- ---------------------------------------------------------------------------
- ---------------
Net increase/(decrease) in net assets (20,077,693)
60,041,496
NET ASSETS:
Beginning of year 96,420,643
36,379,147
- ---------------------------------------------------------------------------
- ---------------
End of year (including undistributed net investment income
of $8,275 and $8,275, respectively) $76,342,950
$96,420,643
===========================================================================
===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------
- -----
<TABLE>
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<CAPTION>
YEAR YEAR
PERIOD
ENDED ENDED
ENDED
11/30/94* 11/30/93
11/30/92*
<S> <C> <C>
<C>
Net asset value, beginning of year $ 8.26 $ 8.07
$ 7.90
- ---------------------------------------------------------------------------
- -----------------
Income from investment operations:
Net investment income+ 0.34 0.36
0.36
Net realized and unrealized gain/(loss) on
investments (0.32) 0.19
0.17
- ---------------------------------------------------------------------------
- -----------------
Total from investment operations 0.02 0.55
0.53
- ---------------------------------------------------------------------------
- -----------------
Less distributions:
Distributions from net investment income (0.34)
(0.36) (0.36)
Distributions from net realized capital gains (0.00)**
(0.00)** --
- ---------------------------------------------------------------------------
- -----------------
Total distributions (0.34)
(0.36) (0.36)
- ---------------------------------------------------------------------------
- -----------------
Net asset value, end of year $ 7.94 $ 8.26
$ 8.07
- ---------------------------------------------------------------------------
- -----------------
Total return++ 0.23% 6.98%
6.88%
- ---------------------------------------------------------------------------
- -----------------
Ratios/Supplemental data:
Net assets, end of year (in 000's) $76,237 $96,421
$36,379
Ratio of operating expenses to average net
assets+++ 0.80% 0.75%
0.65%***
Ratio of net investment income to average net
assets 4.15% 4.24%
4.74%***
Portfolio turnover rate 28% 4%
22%
- ---------------------------------------------------------------------------
- -----------------
<FN>
* The Fund commenced operations on December 31, 1991. Those shares in
existence prior to
November 7, 1994 were designated Class A shares.
** Amount represents less than $0.01 per share.
*** Annualized.
+ Net investment income per share before waiver of fees by investment
adviser
and administrator for the years ended November 30, 1994 and 1993 and
waiver
of fees by investment adviser, sub-investment adviser and
administrator,
and/or custodian and distributor for the period ended November 30, 1992
were
$0.33, $0.33 and $0.31, respectively.
++ Total return represents aggregate total return for the period indicated
and
does not reflect any applicable sales charges.
+++ Annualized operating expense ratios before waiver of fees by investment
adviser and administrator for the years ended November 30, 1994 and
1993 and
waiver of fees by investment adviser, sub-investment adviser and
administrator, and/or custodian and distributor for the period ended
November
30, 1992 were 0.94%, 1.07% and 1.28%, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------
- -----
FOR A CLASS C SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD ENDED
11/30/94*
<S>
<C>
Net asset value, beginning of period
$7.92
- ---------------------------------------------------------------------------
- -------------
Income from investment operations:
Net investment income+
0.00**
Net realized and unrealized gain on investments
0.02#
- ---------------------------------------------------------------------------
- -------------
Total from investment operations
0.02
Less distributions:
Distributions from net investment income
0.00**
- ---------------------------------------------------------------------------
- -------------
Total distributions
0.00
- ---------------------------------------------------------------------------
- -------------
Net asset value, end of period
$7.94
- ---------------------------------------------------------------------------
- -------------
Total return++
0.31%
- ---------------------------------------------------------------------------
- -------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)
$ 106
Ratio of operating expenses to average net assets+++
1.00%***
Ratio of net investment income to average net assets
3.94%***
Portfolio turnover rate
28%
- ---------------------------------------------------------------------------
- -------------
<FN>
* The Fund commenced selling Class C shares on November 17, 1994.
** Amount represents less than $0.01 per share.
*** Annualized.
+ Net investment income per share before waiver of fees by investment
adviser
and administrator for the period ended November 30, 1994 was less than
$0.01.
++ Total return represents aggregate total return for the period
indicated and
does not reflect any applicable sales charges.
+++ Annualized operating expense ratio before waiver of fees by investment
adviser and administrator for the period ended November 30, 1994 was
1.14%.
# The amount in this caption for each share outstanding throughout the
period
may not accord with the change in aggregate gains and losses in
portfolio
securities for the period because of the timing of purchases and
withdrawals
of shares in relation to the fluctuating market values of the
portfolio.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------
- -----
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Income Trust (the "Trust") was organized as a "Massachusetts
business trust" under the laws of the Commonwealth of Massachusetts on
October 17, 1991. The Trust is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company. The Trust consists of
the
following four funds: Smith Barney Limited Maturity Treasury Fund, Smith
Barney
Limited Maturity Municipals Fund (the "Fund"), Smith Barney Intermediate
Maturity California Municipals Fund and Smith Barney Intermediate Maturity
New
York Municipals Fund. At the time of this report, the Fund offered three
classes
of shares: Class A shares, Class C shares and Class Y shares. Class A
shares
are sold with a front-end sales charge. Class C shares may be subject to a
contingent deferred sales charge ("CDSC") if redeemed within 12 months of
purchase. Class Y shares are available to investors making an initial
investment
of at least $5 million and are not subject to any sales charges,
distribution
or service fees. As of November 7, 1994, the Fund began offering Class C
and
Class Y shares, however, as of November 30, 1994, only Class C shares had
been
sold. All shares of the Fund existing prior to November 7, 1994, were
designated Class A shares. Each class of shares has identical rights and
privileges except with respect to the effect of the respective sales
charges,
the distribution and/or service fees borne by each class, expenses
allocable
exclusively to each class, voting rights on matters affecting a single
class
and the exchange privilege of each class. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
Portfolio valuation: Securities are valued by The Boston Company Advisors,
Inc.
("Boston Advisors") after consultation with an independent pricing service
(the
"Service") approved by the Board of Trustees. When, in the judgment of the
Service, quoted bid prices for securities are readily available and are
representative of the bid side of the market, these investments are valued
at
the mean between the quoted bid prices and asked prices. Securities for
which,
in the judgment of the Service, there are no readily obtainable market
quotations (which may constitute a majority of the portfolio securities)
are
carried at fair value as determined by the Service, based on methods which
include consideration of: yields or prices of municipal securities of
comparable
quality, coupon, maturity and type; indications as to values from dealers;
and
general market conditions. Securities, not valued by the Service, for which
market quotations are not readily available are valued at fair
24
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
value as determined in good faith by or under the direction of the Board of
Trustees. Short-term investments that mature in 60 days or less are valued
at
amortized cost.
Securities transactions and investment income: Securities transactions are
recorded as of the trade date. Securities purchased or sold on a when-
issued or
delayed-delivery basis may be settled one month or more after the trade
date.
Interest income is recorded on the accrual basis. Realized gains and losses
from
securities sold are recorded on the identified cost basis. Investment
income and
realized and unrealized gains and losses are allocated based upon the
relative
net assets of each class.
Dividends and distributions to shareholders: Dividends from net investment
income are determined on class level and are declared daily and paid
generally
on the 10th day of the calendar month. Distributions determined on a Fund
level,
if any, of any net short- and long-term capital gains earned by the Fund
will be
declared and paid annually after the close of the fiscal year in which they
are
earned. Additional distributions of net investment income and capital gains
for
the Fund may be made at the discretion of the Board of Trustees in order to
avoid the application of a 4.00% nondeductible excise tax on certain
undistributed amounts of net investment income and capital gains. To the
extent
net realized capital gains can be offset by capital losses and loss
carryforwards, it is the policy of the Fund not to distribute such gains.
Income distributions and capital gain distributions on a Fund level
are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily
due to
differing treatments of income and gains on various investment securities
held
by the Fund, timing differences and differing characterization of
distributions
made by the Fund as a whole.
Federal income taxes: The Trust intends that the Fund separately
qualify
as a regulated investment company, if such qualification is in the best
interest
of its shareholders, which distributes exempt-interest dividends, by
complying
with the requirements of the Internal Revenue Code of 1986, as amended,
applicable to regulated investment companies and by distributing
substantially
all of its earnings to its shareholders. Therefore, no Federal income tax
provision is required.
25
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
2. INVESTMENT ADVISORY AGREEMENT, ADMINISTRATION AGREEMENT AND OTHER
TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with a division of Mutual Management Corp., which was
transferred
effective November 7, 1994 to Smith Barney Mutual Funds Management Inc.
("SBMFM"). Mutual Management Corp. and SMBFM are both wholly owned
subsidiaries
of Smith Barney Holdings Inc. ("Holdings"). Holdings is a wholly owned
subsidiary of The Travelers Inc. Under the Advisory Agreement, the Fund
pays a
monthly fee at the annual rate of 0.35% of the value of its average daily
net
assets.
Prior to April 20, 1994, the Fund was party to an administration agreement
(the
"Administration Agreement") with Boston Advisors, an indirect wholly owned
subsidiary of Mellon Bank Corporation ("Mellon"). Under the Administration
Agreement, the Fund paid a monthly fee at the annual rate of 0.20% of the
value
of its average daily net assets.
As of the close of business on April 20, 1994, SBMFM (formerly known as
"Smith,
Barney Advisers, Inc.") succeeded Boston Advisors as the Fund's
administrator.
The new administration agreement contains substantially the same terms and
conditions, including the level of fees, as the predecessor agreement.
As of the close of business on April 20, 1994, the Fund and SBMFM also
entered
into a sub-administration agreement (the "Sub-Administration Agreement")
with
Boston Advisors. Under the Sub-Administration Agreement, SBMFM pays Boston
Advisors a portion of its administration fee at a rate agreed upon from
time to
time between SBMFM and Boston Advisors.
From time to time the investment adviser and administrator may voluntarily
waive
a portion or all of its investment advisory and/or administrative fees
otherwise
payable to it. For the year ended November 30, 1994, the investment adviser
and
administrator voluntarily waived fees of $82,149 and $46,942, respectively.
For the year ended November 30, 1994, Smith Barney Inc. ("Smith Barney")
received $154,588 from investors representing commissions (sales charges)
on
sales of Class A shares.
A CDSC is generally payable by Class C shareholders and may be payable by
certain Class A shareholders in connection with the redemption of shares
within
one year
26
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
after the date of purchase. For the year ended November 30, 1994, $81,916
in
CDSC were paid to Smith Barney by Class A shareholders.
No officer, director or employee of Smith Barney or any of its affiliates
receives any compensation from the Trust for serving as a Trustee or
officer of
the Trust. The Trust pays each Trustee who is not an officer, director or
employee of Smith Barney or any of its affiliates $4,000 per annum plus
$500 per
meeting attended and reimburses each such Trustee for travel and out-of-
pocket
expenses.
Boston Safe Deposit and Trust Company, an indirect wholly owned subsidiary
of
Mellon, serves as the Trust's custodian. The Shareholder Services Group,
Inc., a
subsidiary of First Data Corporation, serves as the Trust's transfer agent.
3. DISTRIBUTION PLAN
Smith Barney acts as distributor of the Fund's shares pursuant to a
distribution
agreement with the Trust and sells shares of the Fund through Smith Barney
or
its affiliates.
Pursuant to Rule 12b-1 under the 1940 Act, the Trust has adopted a services
and
distribution plan (the "Plan"). Under this Plan, the Fund compensates Smith
Barney for servicing shareholder accounts for Class A and Class C
shareholders,
and covers expenses incurred in distributing Class C shares. Smith Barney
is
paid an annual service fee with respect to Class A and Class C shares of
the
Fund at the annual rate of 0.15% of the value of the average daily net
assets of
each respective class of shares. Smith Barney is also paid an annual
distribution fee with respect to Class C shares at the annual rate of 0.20%
of
the value of the average daily net assets of that class. For the year ended
November 30, 1994, the Fund incurred $140,336 in service fees for Class A.
For
the period ended November 30, 1994, the Fund incurred no service or
distribution
fees for Class C shares.
Under its terms, the Plan shall remain in effect from year to year,
provided
that such continuance is approved annually by vote of the Trust's Trustees,
including a majority of those Trustees who are not "interested persons" of
the
Trust and who have no direct or indirect financial interest in the
operation of
the Plan.
4. EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any
class of
shares are prorated among the classes based upon the relative net assets of
each
class. Operating expenses directly attributable to a class of shares are
charged
to that class'
27
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
operations. In addition to the above service and distribution fees, class
specific operating expenses for the year ended November 30, 1994 included
transfer agent fees of $39,658 for Class A shares. For the period ended
November
30, 1994, there were no transfer fees attributable to Class C shares.
5. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities, excluding short-
term
investments, for the year ended November 30, 1994 were $25,355,625 and
37,631,278, respectively.
At November 30, 1994, aggregate gross unrealized appreciation for all
securities
in which there was an excess of value over tax cost was $107,065, and
aggregate
gross unrealized depreciation for all securities in which there was an
excess of
tax cost over value was $1,710,543.
6. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest
which
are divided into three classes (Class A, Class C, and Class Y) with a $.001
par
value. Changes in shares of beneficial interest in the Fund were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED
11/30/94*
11/30/93
Class A Shares Shares Amount
Shares Amount
<S> <C> <C> <C>
<C>
- ---------------------------------------------------------------------------
- --------------------
Sold 3,175,899 $ 26,079,012
8,687,874 $71,494,853
Issued as reinvestment of dividends 353,609 2,875,739
249,827 2,058,125
Redeemed (5,604,134) (45,373,002)
(1,768,690) (14,554,942)
- ---------------------------------------------------------------------------
- --------------------
Net increase/(decrease) (2,074,626) $(16,418,251)
7,169,011 $58,998,036
- ---------------------------------------------------------------------------
- --------------------
</TABLE>
28
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
PERIOD ENDED
11/30/94*
Class C Shares Shares Amount
<S> <C> <C>
- --------------------------------------------------------------
Sold 13,354 $ 106,015
- --------------------------------------------------------------
Net increase 13,354 $ 106,015
- --------------------------------------------------------------
<FN>
* The Fund began offering Class C and Class Y shares on November 7, 1994.
Those
shares in existence prior to November 7, 1994 were designated Class A
shares.
As of November 30, 1994, no Class Y shares had been sold.
</TABLE>
7. ORGANIZATION COSTS
The Fund bears all costs in connection with its organization including the
fees
and expenses of registering and qualifying its shares for distribution
under
Federal and state securities regulations. All such costs are being
amortized on
the straight-line method over a period of five years from commencement of
operations of the Fund. In the event that any of the initial shares of the
Fund
are redeemed during such amortization period, the Fund will be reimbursed
for
any unamortized organization costs in the same proportion as the number of
shares redeemed bears to the number of initial shares held at the time of
redemption.
8. CAPITAL LOSS CARRYFORWARD
As of November 30, 1994, the Fund had available for Federal tax purposes
unused
capital loss carryforward of $483,118 expiring in the year 2002.
29
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------------------------------------------------
- -----
THE SHAREHOLDERS AND BOARD OF TRUSTEES OF SMITH BARNEY INCOME TRUST:
We have audited the accompanying statement of assets and liabilities,
including
the schedule of portfolio investments, of Smith Barney Limited Maturity
Municipals Fund, of Smith Barney Income Trust (formerly Smith Barney
Shearson
Income Trust), as of November 30, 1994 and the related statement of
operations
for the year then ended, the statement of changes in net assets for each of
the
two years in the period then ended, and the financial highlights for each
of the
two years in the period then ended and for the period from December 31,
1991
(commencement of operations) to November 30, 1992. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audits 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
November 30, 1994 by correspondence with the custodian and brokers. An
audit
also includes assessing the accounting principles used and significant
estimates
made by management, as well as evaluating the overall financial
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
Smith
Barney Limited Maturity Municipals Fund, of Smith Barney Income Trust, as
of
November 30, 1994, the results of its operations for the year then ended,
the
changes in its net assets for each of the two years in the period then
ended,
and the financial highlights for each of the two years in the period then
ended
and for the period from December 31, 1991 (commencement of operations) to
November 30, 1992, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 18, 1995
30
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
TAX INFORMATION (UNAUDITED) FISCAL YEAR ENDED NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
Of the dividends paid by the Fund from investment income for the year ended
November 30, 1994, 100% are tax-exempt for regular Federal income tax
purposes.
31
<PAGE>
Smith Barney
LIMITED MATURITY MUNICIPALS FUND
- ---------------------------------------------------------------------------
- -----
PARTICIPANTS
- ---------------------------------------------------------------------------
- -----
DISTRIBUTOR COUNSEL
Smith Barney, Inc. Willkie Farr & Gallagher
388 Greenwich Street 153 East 52rd Street
New York, New York 10013 New York, New York 10022
INVESTMENT ADVISER AND TRANSFER AGENT
ADMINISTRATOR The Shareholder Services
Smith Barney Mutual Funds Group. Inc.
Management Inc. Exchange Place
388 Greenwich Street Boston, Massachusetts 02109
New York, New York 10013
CUSTODIAN
SUB-ADMINISTRATOR
Boston Safe Deposit and
The Boston Company Advisors, Inc. Trust Company
One Boston Place One Boston Place
Boston, Massachusetts 02108 Boston, Massachusetts 02108
32
<PAGE>
LIMITED SMITH BARNEY
MATURITY ------------
MUNICIPALS A Member of TravelersGroup
FUND [LOGO]
TRUSTEES
Burt N. Dorsett
Elliot S. Jaffe
Heath B. McLendon
Cornelius C. Rose, Jr.
OFFICERS
Heath B. McLendon
Chairman of the Board
and Investment Officer
Stephen J. Treadway
President
This report is submitted for the
Lawrence T. McDermott general information of the
Vice President and shareholders of Smith Barney
Investment Officer Limited Maturity Municipals
Fund. It is not authorized for
Lewis E. Daidone distribution to prospective
Senior Vice President investors unless accompanied
and Treasurer or preceded by an effective
Prospectus for the Fund, which
Christina T. Sydor contains information concerning
Secretary the Fund's investment policies,
fees and expenses as well as
other pertinent information.
SMITH BARNEY
MUTUAL FUNDS
388 Greenwich Street
New York, New York 10013
Fund 163, 482, 498
FD 0309 A5
[LOGO] Recycled
Recyclable
<PAGE>
DESCRIPTION OF ARTWORK ON REPORT COVER
Small box above fund name showing a round,
eagle
symbol laying on the American flag.
SMITH BARNEY
LIMITED
1994 MATURITY
ANNUAL TREASURY
REPORT FUND
......................................
NOVEMBER 30, 1994
[LOGO] SMITH BARNEY MUTUAL FUNDS
Investing for your future.
Everyday.
<PAGE>
DEAR SHAREHOLDER:
We are pleased to present the annual report and audited financial
statements
for the fiscal year ended November 30, 1994 for Smith Barney Limited
Maturity
Treasury Fund. Below we have provided a summary of economic and market
conditions as well as a brief review of the investment strategy used by the
Fund. We hope you find this information useful as you evaluate your
investment.
ECONOMIC AND INTEREST RATE OVERVIEW
There is no doubt that 1993 and 1994 will be historically described as the
opposing years of financial opportunity and investment dilemma. Interest
rates
declined in 1993 to levels not seen in 25 years, providing individuals and
businesses alike with the opportunity to refinance debt and enjoy the
investment returns associated with the period. These lower rates were the
springboard for renewed economic growth and a spirit of well-being not
experienced since pre-1988.
As events began to unfold in 1994, the financial market and the Federal
Reserve
began to address the prospect of rising inflation created by this "feel
good"
attitude by changing its interest rate policy. The central bank's
tightening
efforts in February would be the first of six moves. To the confusion and
dismay of many during 1994, the economy appeared to be a freight train with
a
full head of steam unwilling to slow down, and further interest rate hikes
cannot be discounted as of this writing. Rising interest rates, as
demonstrated
below, resulted in negative total returns on most government securities, as
demonstrated by the following Treasury securities:
<TABLE>
<CAPTION>
YIELD TOTAL
RETURN
11/1993 11/1994 1/1-
12/30/1994
------- ------- -----------
- ---
<S> <C> <C> <C>
3-Month Bills............................. 3.20% 5.70% 5.69%
2-Year Notes.............................. 4.20 7.40 0.48
5-Year Notes.............................. 5.15 7.80 (4.52)
10-Year Notes............................. 5.80 7.90 (8.91)
30-Year Bonds............................. 6.30 8.00 (13.92)
</TABLE>
PORTFOLIO SUMMARY
The Fund's total return for this fiscal year was (5.12%), roughly
equivalent to
that of a 5-year Treasury note. We made modest restructuring moves to
extend the
portfolio's average maturity beyond the point which we believe to be
negatively
impacted by the Federal Reserve's tightening; unfortunately, the
unprecedented
abruptness of the interest rate rise left few investment maturities
unscathed.
1
<PAGE>
We anticipate that economic growth will begin to slow in 1995 as the
Federal
Reserve's actions begin to have their desired effect. Consequently,
interest
rates should decline modestly and, under this scenario, the Fund's net
asset
value per share should rebound. Within the investment restrictions of the
Fund
which limit the Fund's average maturity to a maximum of five years, we will
continue to invest in those Treasury securities which appear to offer the
most
attractive relative value.
DIVIDEND POLICY
The Fund does not pay a level monthly dividend rate but instead distributes
to
shareholders the accrued monthly income earned by the portfolio. We will
continue to strive to offer an attractive dividend distribution as we also
face
uncertain interest rates and continued volatility.
We appreciate your continued confidence during the difficult investment
climate
of the past fiscal year. We recognize that the unprecedented market
fluctuations
of the past year have been an unsettling experience for investors. After
becoming accustomed to rising valuations in the government securities
market,
this past year was for many investors the first glance into a new and more
challenging investment environment. These short-term departures from
historical
trends can sorely test an investor's ability to maintain a long-term
investment
focus, but are nonetheless a vital part of the investment cycle that allows
the
markets to pause, regroup, and begin the next leg up. Should you have any
questions about your investment in the Fund, please contact your Smith
Barney
Financial Consultant, who will be able to provide you with additional
information about the Fund. We look forward to reporting to you in six
months'
time.
Sincerely,
/S/ HEATH B. MCLENDON /S/ JAMES E. CONROY
Heath B. McLendon James E. Conroy
Chairman of the Board Vice President and
and Investment Investment Officer
Officer
January 12, 1995
2
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----
HISTORICAL PERFORMANCE - CLASS A SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- -----
<CAPTION>
Year Ended Net Asset Value Capital Gains Dividends
Total
November 30 Beginning Ending Distributed Paid
Return*
- ---------------------------------------------------------------------------
- -----
<S> <C> <C> <C> <C>
<C>
12/31/91-
11/30/92 $7.90 $7.88 -- $0.37
4.54 %
- ---------------------------------------------------------------------------
- -----
1993 7.88 8.14 $0.09 0.38
9.49 %
- ---------------------------------------------------------------------------
- -----
1994 8.14 7.08 0.33 0.34
(5.12)%
- ---------------------------------------------------------------------------
- -----
Total $0.42 $1.09
- ---------------------------------------------------------------------------
- -----
Cumulative Total Return -- (12/31/91 through 11/30/94)
8.61 %
- ---------------------------------------------------------------------------
- -----
<FN>
* Figures assume reinvestment of all dividends and capital gains
distributions
at net asset value and do not reflect deduction of a front-end sales
charge
(maximum 2.00%).
</TABLE>
THE FUND'S POLICY IS TO DISTRIBUTE DIVIDENDS MONTHLY
AND CAPITAL GAINS, IF ANY, ANNUALLY.
<TABLE>
- ---------------------------------------------------------------------------
- -----
AVERAGE ANNUAL TOTAL RETURN** - CLASS A SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- -----
<CAPTION>
Without Sales Charges With Sales
Charges***
With fees Without fees With fees
Without fees
waived waived waived
waived
- ---------------------------------------------------------------------------
- ----------
<S> <C> <C> <C>
<C>
Year Ended 11/30/94 (5.12)% (5.25)% (7.02)%
(7.11)%
- ---------------------------------------------------------------------------
- ----------
Inception (12/31/91)
through 11/30/94 2.87% 2.54% 2.16%
1.83%
- ---------------------------------------------------------------------------
- ----------
<FN>
** All average annual total return figures shown reflect the reinvestment
of dividends and capital gains distributions at net asset value. The
investment adviser and administrator waived fees from December 31, 1991
to the present. A shareholder's actual return for the period during
which waivers were in effect would be the higher of the two numbers
shown.
*** Average annual total return figures shown assume the deduction of a
maximum 2.00% sales charge.
</TABLE>
NOTE: On November 7, 1994, existing shares of the Fund were designated
Class A
shares. Class A shares are sold subject to a 2.00% front-end sales charge;
however, purchases of Class A shares, which when combined with current
holdings
of Class A shares offered with a sales charge equal or exceed $500,000 in
the
aggregate, will be made at net asset value with an initial sales charge but
will
be subject to 1.00% contingent deferred sales charge if redeemed within 12
months of purchase. Class A shares of the Fund are subject to a service fee
of
0.15% of the value of the average daily net assets attributable to that
class.
3
<PAGE>
GROWTH OF $10,000 INVESTED IN CLASS A SHARES
OF SMITH BARNEY LIMITED MATURITY TREASURY FUND
VS. LEHMAN BROTHERS INTERMEDIATE TREASURY INDEX AND
LIPPER ANALYTICAL SERVICES, INC. PEER GROUP AVERAGE INDEX+
- ---------------------------------------------------------------------------
- -----
December 31, 1991 - November 30, 1994
<TABLE>
DESCRIPTION OF MOUNTAIN CHART IN SMITH BARNEY COVERS (CLASS A)
A line graph depicting the total growth (including reinvestment of
dividends and capital gains) of a
hypothetical investment of $10,000 in Smith Barney Income Trust Limited
Maturity Treasury Fund Class A
shares on December 31, 1991 through November 30, 1994 as compared with the
growth of a $10,000 investment
in the Lehman Brothers 10 Year Municipal Bond Index and the Lipper
Analytical Services, Inc. Peer Group
Average Index. The plot points used to draw the line graph were as follows:
<CAPTION>
GROWTH OF $10,000
GROWTH OF $10,000
INVESTMENT IN THE
INVESTMENT IN THE
GROWTH OF $10,000 LEHMAN BROTHERS
LIPPER ANALYTICAL
INVESTED IN CLASS A 10 YEAR MUNICIPAL
SERVICES, INC. PEER
MONTH ENDED SHARES OF THE FUND BOND INDEX
GROUP AVERAGE INDEX
<S> <C> <C>
<C>
12/91 $ 9,800 $10,000
$10,000
3/92 $ 9,599 $ 9,890
$ 9,942
6/92 $10,009 $10,275
$10,257
9/92 $10,535 $10,733
$10,609
12/92 $10,394 $10,694
$10,580
3/93 $10,872 $11,098
$10,871
6/93 $11,095 $11,317
$10,997
9/93 $11,305 $11,557
$11,152
12/93 $11,258 $11,574
$11,198
3/94 $10,861 $11,358
$11,097
6/94 $10,702 $11,296
$11,091
9/94 $10,745 $11,382
$11,172
11/94 $10,643 $11,333
$11,153
<FN>
+ Illustration of $10,000 invested in Class A shares at inception on
December 31, 1991 through November 30, 1994, assuming deduction of a
maximum 2.00% sales charge at the time of investment and reinvestment of
dividends and capital gains at net asset value.
</TABLE>
LEHMAN BROTHERS INTERMEDIATE TREASURY INDEX is an unmanaged, broad-based
index with approximately $1.4 billion in market capitalization which
tracks the market value of approximately 131 actively-traded U.S.
Treasury
securities with maturities of 3 to 10 years.
LIPPER ANALYTICAL SERVICES, INC. PEER GROUP AVERAGE INDEX is composed of
an average of the Fund's peer group of mutual funds (16 as of November
30,
1994) investing in limited maturity treasury securities.
This period was one in which treasury prices fluctuated and the results
should not be considered as a representation of the dividend income or
capital gain or loss which may be realized from an investment in the
Fund
today. No adjustment has been made for shareholder tax liability on
dividends or capital gains.
Index information is available at month-end only; therefore, the closest
month-end to inception date of the class has been used.
NOTE: All figures cited here represent past performance and do not
guarantee future results.
4
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
<TABLE>
- ---------------------------------------------------------------------------
- --------------
HISTORICAL PERFORMANCE - CLASS C SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- --------------
<CAPTION>
Net Asset Value Capital Gains
Dividends Total
Beginning Ending Distributed Paid
Return*
- ---------------------------------------------------------------------------
- --------------
<S> <C> <C> <C> <C>
<C>
Inception (11/7/94)
through 11/30/94 $7.09 $7.08 -- $0.01
(0.02)%
- ---------------------------------------------------------------------------
- --------------
<FN>
* Figures assume reinvestment of all dividends and capital gains
distributions
at net asset value and do not reflect the deduction of any contingent
deferred sales charge.
</TABLE>
<TABLE>
- ---------------------------------------------------------------------------
- -----
CUMULATIVE TOTAL RETURN** - CLASS C SHARES (UNAUDITED)
- ---------------------------------------------------------------------------
- -----
<CAPTION>
With fees Without
fees
waived
waived
- ---------------------------------------------------------------------------
- -----
<S> <C> <C>
Inception (11/7/94) through 11/30/94 (0.02)%
(0.02)%
- ---------------------------------------------------------------------------
- -----
<FN>
** All cumulative total return figures shown reflect the reinvestment of
dividends and capital gains distributions at net asset value. The
investment adviser and administrator waived fees from November 7, 1994
to
the present. A shareholder's actual return for the period during which
waivers were in effect would be the higher of the two numbers shown.
</TABLE>
NOTE: On November 7, 1994, the Fund began offering Class C and Class Y
shares. Class C shares may be subject to a 1.00% contingent deferred
sales charge if redeemed within twelve months of purchase and are
subject
to annual service and distribution fees of 0.15% and 0.20%,
respectively,
of the value of the average daily net assets attributable to that class.
As of November 30, 1994, no Class Y shares had been sold.
5
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
<TABLE>
- ---------------------------------------------------------------------------
- ---------------
PORTFOLIO OF INVESTMENTS NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- ---------------
<CAPTION>
MARKET VALUE
FACE VALUE
(NOTE 1)
- ---------------------------------------------------------------------------
- ---------------
<C> <S> <C>
<C>
U.S. TREASURY SECURITIES - 98.0%
U.S. TREASURY NOTES:
$17,500,000 4.750% due 2/15/97
$16,549,575
150,000 6.000% due 12/31/97
143,421
1,300,000 4.750% due 8/31/98
1,175,382
4,000,000 4.750% due 10/31/98
3,602,160
19,000,000 6.875% due 7/31/99
18,349,250
15,000,000 5.875% due 2/15/04
13,036,950
U.S. TREASURY STRIP:
30,000,000 7.000% due 2/15/00
20,163,300
- ---------------------------------------------------------------------------
- ---------------
TOTAL INVESTMENTS (COST $77,827,819*) 98.0%
73,020,038
- ---------------------------------------------------------------------------
- ---------------
OTHER ASSETS AND LIABILITIES (NET) 2.0
1,515,744
- ---------------------------------------------------------------------------
- ---------------
NET ASSETS 100.0%
$74,535,782
- ---------------------------------------------------------------------------
- ---------------
<FN>
* Aggregate cost for Federal tax purposes.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
<TABLE>
- ---------------------------------------------------------------------------
- --------------
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- --------------
<S> <C>
<C>
ASSETS:
Investments, at value (Cost $77,827,819) (Note 1)
See accompanying schedule
$73,020,038
Cash
1,015,689
Interest receivable
971,017
Receivable for Fund shares sold
52,823
Unamortized organization costs (Note 7)
25,088
Other assets
58,877
- ---------------------------------------------------------------------------
- --------------
TOTAL ASSETS
75,143,532
- ---------------------------------------------------------------------------
- --------------
LIABILITIES:
Dividends payable $222,851
Payable for Fund shares redeemed 134,736
Investment advisory fee payable (Note 2) 119,620
Administration fee payable (Note 2) 68,326
Service fee payable (Note 3) 9,400
Transfer agent fees payable (Note 2) 6,000
Custodian fees payable (Note 2) 4,000
Accrued expenses and other payables 42,817
- ---------------------------------------------------------------------------
- --------------
TOTAL LIABILITIES
607,750
- ---------------------------------------------------------------------------
- --------------
NET ASSETS
$74,535,782
- ---------------------------------------------------------------------------
- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
<TABLE>
- ---------------------------------------------------------------------------
- -------------
STATEMENT OF ASSETS AND LIABILITIES (continued) NOVEMBER 30, 1994
- ---------------------------------------------------------------------------
- -------------
<S>
<C>
NET ASSETS CONSIST OF:
Undistributed net investment income
$ 28,662
Accumulated net realized loss on investments sold
(1,688,724)
Unrealized depreciation of investments
(4,807,781)
Par value
10,524
Paid-in capital in excess of par value
80,993,101
- ---------------------------------------------------------------------------
- -------------
TOTAL NET ASSETS
$74,535,782
- ---------------------------------------------------------------------------
- -------------
NET ASSET VALUE:
CLASS A SHARES
NET ASSET VALUE per share+
($74,479,034 / 10,516,209 shares of beneficial interest outstanding)
$7.08
- ---------------------------------------------------------------------------
- -------------
MAXIMUM OFFERING PRICE per share ($7.08 / 0.98)
(based on sales charge of 2.00% of the offering price at
November 30, 1994)
$7.22
- ---------------------------------------------------------------------------
- -------------
CLASS C SHARES
NET ASSET VALUE and offering price per share+
($56,748 / 8,010 shares of beneficial interest outstanding)
$7.08
- ---------------------------------------------------------------------------
- -------------
<FN>
+ Redemption price per share is equal to net asset value less any
applicable contingent
deferred sales charge.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
<TABLE>
- ---------------------------------------------------------------------------
- --------------
STATEMENT OF OPERATIONS FOR THE YEAR ENDED NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- --------------
<S> <C>
<C>
INVESTMENT INCOME:
Interest
$ 3,431,890
- ---------------------------------------------------------------------------
- --------------
EXPENSES:
Investment advisory fee (Note 2) $215,192
Administration fee (Note 2) 122,966
Service fees (Note 3) 92,226
Transfer agent fees (Notes 2 and 4) 52,808
Legal and audit fees 45,186
Shareholders reports expense 41,508
Registration and filing fees 40,586
Custodian fees (Note 2) 19,198
Amortization of organization costs (Note 7) 12,042
Trustees' fees and expenses (Note 2) 10,178
Distribution fees (Note 3) 1
Other 9,085
Fees waived by investment adviser and administrator (Note 2)
(54,013)
- ---------------------------------------------------------------------------
- --------------
TOTAL EXPENSES
606,963
- ---------------------------------------------------------------------------
- --------------
NET INVESTMENT INCOME
2,824,927
- ---------------------------------------------------------------------------
- --------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(NOTES 1 AND 5):
Net realized loss on investments sold during the year
(1,688,724)
Net unrealized depreciation of investments during the year
(4,164,125)
- ---------------------------------------------------------------------------
- --------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(5,852,849)
- ---------------------------------------------------------------------------
- --------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
$(3,027,922)
- ---------------------------------------------------------------------------
- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
<TABLE>
- ---------------------------------------------------------------------------
- ---------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------
- ---------------------------
<CAPTION>
YEAR YEAR
ENDED ENDED
11/30/94 11/30/93
<S> <C>
<C>
Net investment income $
2,824,927 $ 2,242,976
Net realized gain/(loss) on investment during the year
(1,688,724) 2,172,569
Net unrealized depreciation of investments during the year
(4,164,125) (217,200)
- ---------------------------------------------------------------------------
- ---------------------------
Net increase/(decrease) in net assets resulting from operations
(3,027,922) 4,198,345
Distributions to shareholders from net investment income:
Class A
(2,796,965) (2,242,269)
Class C
(7) --
Distributions to shareholders from net realized gain on investments:
Class A
(2,172,569) (518,134)
Net increase in net assets from Fund share transactions (Note 6):
Class A
30,450,611 5,620,932
Class C
56,653 --
- ---------------------------------------------------------------------------
- ---------------------------
Net increase in net assets
22,509,801 7,058,874
NET ASSETS:
Beginning of year
52,025,981 44,967,107
- ---------------------------------------------------------------------------
- ---------------------------
End of year (including undistributed net investment income of $28,662
and $707, respectively)
$74,535,782 $52,025,981
- ---------------------------------------------------------------------------
- ---------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
<TABLE>
- ---------------------------------------------------------------------------
- -----------
FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------
- -----------
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<CAPTION>
YEAR YEAR
PERIOD
ENDED ENDED
ENDED
11/30/94 11/30/93
11/30/92*
<S> <C> <C>
<C>
Net asset value, beginning of year $ 8.14 $ 7.88
$ 7.90
- ---------------------------------------------------------------------------
- -----------
Income from investment operations:
Net investment income+ 0.34 0.38
0.37
Net realized and unrealized gain/(loss) on investments (0.73) 0.35
(0.02)
- ---------------------------------------------------------------------------
- ------------
Total from investment operations (0.39) 0.73
0.35
- ---------------------------------------------------------------------------
- ------------
Less distributions:
Distributions from net investment income (0.34) (0.38)
(0.37)
Distributions from net realized capital gains (0.33) (0.09)
- --
- ---------------------------------------------------------------------------
- ------------
Total distributions (0.67) (0.47)
(0.37)
- ---------------------------------------------------------------------------
- ------------
Net asset value, end of year $ 7.08 $ 8.14
$ 7.88
- ---------------------------------------------------------------------------
- ------------
Total return++ (5.12)% 9.49%
4.54%
- ---------------------------------------------------------------------------
- ------------
Ratios/supplemental data:
Net assets, end of year (in 000's) $74,479 $52,026
$44,967
Ratio of operating expenses to average net assets+++ 0.99% 0.79%
0.65%**
Ratio of net investment income to average net assets 4.59% 4.58%
4.96%**
Portfolio turnover rate 152% 104%
188%
- ---------------------------------------------------------------------------
- ------------
<FN>
* The Fund commenced operations on December 31, 1991. Those shares in
existence prior to November 7, 1994 were designated as Class A shares.
** Annualized
+ Net investment income per share before waiver of fees by investment
adviser and administrator for the years ended November 30, 1994 and
1993
and waiver of fees by the investment adviser, sub-investment adviser,
administrator and custodian for the period ended November 30, 1992
were
$0.33, $0.36 and $0.33, respectively.
++ Total return represents aggregate total return for the periods
indicated
and does not reflect any applicable sales charges.
+++ Annualized operating expense ratios before waiver of fees by
investment
adviser and administrator for the years ended November 30, 1994 and
1993
and waiver of fees by investment adviser, sub-investment adviser,
administrator and custodian for the period ended November 30, 1992
were
1.08%, 1.04% and 1.19%, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
- ---------------------------------------------------------------------------
- -----
FINANCIAL HIGHLIGHTS (continued)
FOR A CLASS C SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
11/30/94*
<S>
<C>
Net asset value, beginning of period
$ 7.09
- ---------------------------------------------------------------------------
- ----------
Income from investment operations:
Net investment income+
0.01
Net realized and unrealized loss on investments
(0.01)
- ---------------------------------------------------------------------------
- ----------
Total from investment operations
0.00
- ---------------------------------------------------------------------------
- ----------
Less distributions:
Distributions from net investment income
(0.01)
- ---------------------------------------------------------------------------
- ----------
Total distributions
(0.01)
- ---------------------------------------------------------------------------
- ----------
Net asset value, end of period
$ 7.08
- ---------------------------------------------------------------------------
- ----------
Total return++
(0.02)%
- ---------------------------------------------------------------------------
- ----------
Ratios/supplemental data:
Net assets, end of period (in 000's)
$ 57
Ratio of operating expenses to average net assets+++
1.19%**
Ratio of net investment income to average net assets
4.42%**
Portfolio turnover rate
152%
- ---------------------------------------------------------------------------
- ----------
<FN>
* The Fund commenced offering Class C shares on November 7, 1994.
** Annualized
+ Net investment income per share before waiver of fees by investment
adviser and administrator for the period ended November 30, 1994 was
$0.01.
++ Total return represents aggregate total return for the periods
indicated
and does not reflect any applicable sales charges.
+++ Annualized operating expense ratio before waiver of fees by investment
adviser and administrator for the period ended November 30, 1994 was
1.19%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS
- ---------------------------------------------------------------------------
- -----
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Income Trust (the "Trust") was organized as a "Massachusetts
business trust" under the laws of the Commonwealth of Massachusetts on
October
17, 1991. The Trust is registered with the Securities and Exchange
Commission
under the Investment Company Act of 1940, as amended (the "1940 Act"), as
an
open-end management investment company. The Trust consists of the following
four
funds: Smith Barney Limited Maturity Treasury Fund (the "Fund"), Smith
Barney
Limited Maturity Municipals Fund, Smith Barney Intermediate Maturity
California
Municipals Fund and Smith Barney Intermediate Maturity New York Municipals
Fund.
At the time of this report, the Fund offered three classes of shares: Class
A
shares, Class C shares and Class Y shares. Class A shares are sold with a
front-end sales charge. Class C shares may be subject to a contingent
deferred
sales charge ("CDSC") if redeemed within 12 months of purchase. Class Y
shares
are available to investors making an initial investment of at least $5
million
and are not subject to any sales charges, distribution or service fees. As
of
November 7, 1994, the Fund began offering Class C and Class Y shares,
however,
as of November 30, 1994 only Class C shares had been sold. All shares of
the
Fund existing prior to November 7, 1994, were designated Class A shares.
Each
class of shares has identical rights and privileges except with respect to
the
effect of the respective sales charges, the distribution and/or service
fees
borne by each class, expenses allocable exclusively to each class, voting
rights
on matters affecting a single class and the exchange privilege of each
class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements.
Portfolio valuation: Securities are valued at market value or, in the
absence
of market value, at fair value as determined by or under the direction of
the
Board of Trustees. Short-term investments that mature within 60 days or
less are
valued at amortized cost.
Securities transactions and investment income: Securities transactions are
recorded as of the trade date. Securities purchased or sold on a when-
issued or
delayed-delivery basis may be settled a month or more after the trade date.
Interest income is recorded on the accrual basis. Realized gains and losses
from
securities sold are recorded on the identified cost basis.
Dividends and distributions to shareholders: It is the policy of the Fund
to
declare dividends from net investment income daily and to pay such
dividends
monthly. Distributions from net realized capital gains, if any, are
declared and
paid annually,
13
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
after the end of the calendar year in which earned. In addition, in order
to
avoid the application of a 4.00% nondeductible excise tax on certain
undistributed amounts of ordinary income and capital gains, the Fund may
make an
additional distribution shortly before December 31 in each year of any
undistributed ordinary income or capital gains and expects to make any
other
distributions as are necessary to avoid this tax. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and
gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.
Federal income taxes: The Trust intends that the Fund separately qualify
as a
regulated investment company, if such qualification is in the best interest
of
its shareholders, by complying with the requirements of the Internal
Revenue
Code of 1986, as amended, applicable to regulated investment companies and
by
distributing substantially all of its earnings to its shareholders.
Therefore,
no Federal income tax provision is required.
2. INVESTMENT ADVISORY AGREEMENT, ADMINISTRATION AGREEMENT AND OTHER
TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with a division of Mutual Management Corp., which was
transferred
effective November 7, 1994 to Smith Barney Mutual Funds Management Inc.
("SBMFM"). Mutual Management Corp. and SBMFM are both wholly owned
subsidiaries
of Smith Barney Holdings Inc. ("Holdings"). Holdings is a wholly owned
subsidiary of The Travelers Inc. Under the Advisory Agreement, the Fund
pays a
monthly fee at the annual rate of 0.35% of the value of its average daily
net
assets.
Prior to April 20, 1994, the Fund was party to an administration agreement
(the
"Administration Agreement") with The Boston Company Advisors, Inc. ("Boston
Advisors"), an indirect wholly owned subsidiary of Mellon Bank Corporation
("Mellon"). Under the Administration Agreement, the Fund paid a monthly fee
at
the annual rate of 0.20% of the value of its average daily net assets.
As of the close of business on April 20, 1994, SBMFM (formerly known as
"Smith,
Barney Advisers, Inc."), succeeded Boston Advisors as the Fund's
administrator.
The new administration agreement contains substantially the same terms and
conditions, including the level of fees, as the predecessor agreement.
14
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
As of the close of business on April 20, 1994, the Fund and SBMFM also
entered
into a sub-administration agreement (the "Sub-Administration Agreement")
with
Boston Advisors. Under the Sub-Administration Agreement, SBMFM pays Boston
Advisors a portion of its administration fee at a rate agreed upon from
time to
time between SBMFM and Boston Advisors.
From time to time, the investment adviser and the administrator may
voluntarily
waive a portion of its investment advisory and/or administration fees
otherwise
payable to it. For the year ended November 30, 1994, the investment adviser
and
administrator voluntarily waived its fees of $34,372 and $19,641,
respectively.
For the year ended November 30, 1994, Smith Barney, Inc. ("Smith Barney")
received $59,800 from investors representing commissions (sales charges) on
sales of Class A shares.
A CDSC is generally payable by Class C shareholders and may be payable by
certain Class A shareholders in connection with the redemption of shares
within
one year after the date of purchase. For the year ended November 30, 1994,
$43,639 in CDSC were paid to Smith Barney by Class A shareholders.
No officer, director or employee of Smith Barney or any of its affiliates
receives any compensation from the Trust for serving as a Trustee or
officer of
the Trust. The Trust pays each Trustee who is not an officer, director or
employee of Smith Barney or any of its affiliates $4,000 per annum plus
$500 per
meeting attended and reimburses each such Trustee for travel and out-of-
pocket
expenses.
Boston Safe Deposit and Trust Company, an indirect wholly owned subsidiary
of
Mellon, serves as the Trust's custodian. The Shareholder Services Group,
Inc., a
subsidiary of First Data Corporation, serves as the Trust's transfer agent.
3. DISTRIBUTION PLAN
Smith Barney acts as distributor of the Fund's shares pursuant to a
distribution
agreement with the Trust and sells shares of the Fund through Smith Barney
or
its affiliates.
Pursuant to Rule 12b-1 under the 1940 Act, the Trust adopted a services and
distribution plan (the "Plan"). Under this Plan, the Fund compensates Smith
Barney for servicing shareholder accounts for Class A and Class C
shareholders
and covers expenses incurred in distributing Class C shares. Smith Barney
is
paid an annual service fee with respect to Class A and Class C shares of
the
Fund at the annual rate
15
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
of 0.15% of the value of the average daily net assets of each respective
class
of shares. Smith Barney is also paid an annual distribution fee with
respect to
Class C shares at the annual rate of 0.20% of the value of the average
daily net
assets of that class. For the year ended November 30, 1994, the Fund
incurred
service fees of $92,225 and $1 for Class A and Class C shares,
respectively. For
the year ended November 30, 1994, the Fund incurred distribution fees of $1
for
Class C shares.
Under its terms, the Plan shall remain in effect from year to year,
provided
that such continuance is approved annually by vote of the Trust's Trustees,
including a majority of those Trustees who are not "interested persons" of
the
Trust and who have no direct or indirect financial interest in the
operation of
the Plan.
4. EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any
class of
shares are prorated among the classes based upon the relative net assets of
each
class. Operating expenses directly attributable to a class of shares are
charged
to that class' operations. In addition to the above service and
distribution
fees, class specific operating expenses for the year ended November 30,
1994
included transfer agent fees of $52,798 and $10 for Class A and Class C
shares,
respectively.
5. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds of U.S. government securities, excluding
short-term investments, for the year ended November 30, 1994, were
$91,401,384
and $114,425,805, respectively.
At November 30, 1994, the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$4,807,781.
There was no aggregate gross unrealized appreciation for any securities
held at
year-end.
16
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
<TABLE>
6. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest
which
are divided into three classes (Class A, Class C and Class Y) with a $.001
par
value. Changes in shares of beneficial interest in the Fund were as
follows:
<CAPTION>
YEAR ENDED
YEAR ENDED
11/30/94*
11/30/93
Class A Shares Amount
Shares Amount
- ---------------------------------------------------------------------------
- -------------------
<S> <C> <C> <C>
<C>
Sold 1,073,997 $ 8,159,579
2,881,661 $ 23,543,768
Issued in exchange for shares of
Smith Barney Shearson Worldwide
Prime Assets Fund (Note 9) 6,833,657 49,994,241 --
- --
Issued as reinvestment of dividends 574,504 4,360,726
303,092 2,449,289
Redeemed (4,354,640) (32,063,935)
(2,500,147) (20,372,125)
- ---------------------------------------------------------------------------
- -------------------
Net increase 4,127,518 $ 30,450,611
684,606 $ 5,620,932
- ---------------------------------------------------------------------------
- -------------------
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED
11/30/94*
Class C Shares Amount
<S> <C> <C>
- ----------------------------------------------------------
Sold 8,010 $56,653
- ----------------------------------------------------------
Net increase 8,010 $56,653
- ----------------------------------------------------------
<FN>
* The Fund began offering Class C shares on November 7, 1994. Those shares
in existence prior to November 7, 1994 were designated Class A shares.
As
of November 30, 1994, no Class Y shares had been sold.
</TABLE>
7. ORGANIZATION COSTS
The Fund bears all cost in connection with its organization including the
fees
and expenses of registering and qualifying its shares for distribution
under
Federal and state securities regulations. All such costs are being
amortized on
the straight-line basis over a period of five years from commencement of
operations of the Fund. In the event that any of the initial shares of the
Fund
are redeemed during such amortization period, the Fund will be reimbursed
for
any unamortized organization costs in the same proportion as the number of
shares redeemed bears to the number of initial shares held at the time of
redemption.
17
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
- ---------------------------------------------------------------------------
- -----
NOTES TO FINANCIAL STATEMENTS (continued)
- ---------------------------------------------------------------------------
- -----
8. CAPITAL LOSS CARRYFORWARD
As of November 30, 1994, the Fund had available for Federal tax purposes
unused
capital loss carryforward of $1,477,350 expiring in the year 2002.
<TABLE>
9. REORGANIZATION
On July 15, 1994, the Fund (the "Acquiring Fund") acquired the assets and
certain liabilities of Smith Barney Shearson Worldwide Prime Assets Fund
(the
"Acquired Fund"), in exchange for shares of the Acquiring Fund, pursuant to
a
plan of reorganization approved by the Acquired Fund's shareholders on July
5,
1994. Total shares issued by the Acquiring Fund, the total net assets of
the
Acquired Fund and the Acquiring Fund are as follows:
<CAPTION>
SHARES TOTAL
NET TOTAL NET
ISSUED BY ASSETS
OF ASSETS OF
ACQUIRING ACQUIRED ACQUIRING
ACQUIRED ACQUIRING
FUND FUND FUND FUND
FUND
- ---------------------------------------------------------------------------
- ----------------
<S> <C> <C> <C>
<C>
The Fund Smith Barney Shearson Worldwide Prime
Assets Fund 6,833,657
$49,994,241 $45,562,581
- ---------------------------------------------------------------------------
- ----------------
</TABLE>
The total net assets of the Acquired Fund before acquisition included
unrealized
depreciation of $11,138. The total net assets of the Acquiring Fund
immediately
after the acquisition were $95,556,822.
10. SUBSEQUENT EVENT
On December 20, 1994, the Board of Trustees of the Trust approved the
reorganization of the Fund with and into the Smith Barney Funds, Inc. --
Short-Term U.S. Treasury Securities Portfolio. Subject to the approval of
the
Fund's shareholders, the reorganization will take place on or about May 5,
1995.
18
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
- ---------------------------------------------------------------------------
- -----
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------------------------------------------------
- -----
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
SMITH BARNEY INCOME TRUST:
We have audited the accompanying statement of assets and liabilities,
including
the schedule of portfolio investments, of Smith Barney Limited Maturity
Treasury
Fund, of Smith Barney Income Trust (formerly Smith Barney Shearson Income
Trust), as of November 30, 1994, and the related statement of operations
for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of
the two
years in the period then ended and for the period from December 31, 1991
(commencement of operations) to November 30, 1992. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audits 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
November 30, 1994 by correspondence with the custodian and brokers. 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
Smith
Barney Limited Maturity Treasury Fund, of Smith Barney Income Trust, as of
November 30, 1994, the results of its operations for the year then ended,
the
changes in its net assets for each of the two years in the period then
ended,
and the financial highlights for each of the two years in the period then
ended
and for the period from December 31, 1991 (commencement of operations) to
November 30, 1992, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 18, 1995
19
<PAGE>
Smith Barney
LIMITED MATURITY TREASURY FUND
- ---------------------------------------------------------------------------
- -----
TAX INFORMATION (UNAUDITED) FISCAL YEAR ENDED NOVEMBER 30,
1994
- ---------------------------------------------------------------------------
- -----
Of the dividends paid by the Fund from investment income for the year ended
November 30, 1994, 100% has been derived from investments in U.S.
government and
agency obligations. All or a portion of the distributions from this income
may
be exempt from taxation at the state level. Consult your tax advisor for
state
specific information.
The amount of long-term capital gain paid for the fiscal year ended
November 30,
1994 was $2,142,340.
20
<PAGE>
LIMITED SMITH BARNEY
MATURITY ------------
TREASURY A Member of
TravelersGroup
FUND
[LOGO]
TRUSTEES
Burt N. Dorsett
Elliot S. Jaffe
Heath B. McLendon
Cornelius C. Rose, Jr.
OFFICERS
Heath B. McLendon
Chairman of the Board
and Investment Officer
Stephen J. Treadway
President
James E. Conroy
Vice President and This report is submitted for the
Investment Officer general information of the
shareholders of Smith Barney
Lewis E. Daidone Limited Maturity Treasury
Senior Vice President Fund. It is not authorized for
and Treasurer distribution to prospective
investors unless accompanied
Christina T. Sydor or preceded by an effective
Secretary Prospectus for the Fund, which
contains information concerning
the Fund's investment policies,
fees and expenses as well as
other pertinent information.
SMITH BARNEY
MUTUAL FUNDS
388 Greenwich Street
New York, New York 10013
Fund 162, 475, 495
FD 0308 A5
[LOGO] Recycled
Recyclable
