<PAGE>
[GRAPHIC]
SMALL BOX ABOVE FUND NAME SHOWING PALM
TREES IN FRONT OF A HIGH-RISE BUILDING.
SEMI- SMITH BARNEY
ANNUAL INTERMEDIATE
REPORT MATURITY
CALIFORNIA
MUNICIPALS
FUND
.......................................
MAY 31, 1995
[LOGO]
<PAGE>
Intermediate Maturity California Municipals
Fund
DEAR SHAREHOLDER:
We are pleased to provide you with the
semi-annual report and
portfolio of investments for Smith Barney
Intermediate
Maturity California Municipals Fund Inc.
for the period ended
May 31, 1995. Reflecting the improvement in the
municipal market that
began in late 1994, Class A shares earned a total
return of 9.39% for
the six-month period. Class C shares, a newly-
available class of
shares, earned a total return of 9.22% for the
period between November
8, 1994 and May 31, 1995. Additional performance
data for each class
of shares during this and previous reporting
periods is available in
the "Financial Highlights" section of this report.
ECONOMIC AND MARKET UPDATE
The increases last year in short-term rates by the
Federal Reserve
Board are clearly slowing the economy's expansion
from its faster pace
of last fall. The question now on the minds of
economists and
investors is whether this is merely a pause in
economic activity or
indicative of longer-term economic weakness. We do
not believe that
forthcoming economic data will show conclusive
evidence of a
recession, and instead are working under the
assumption that the
economy will experience a small pause and then
steady growth with
moderate inflation.
The municipal securities market had a strong rally
during the past six
months and the Fund was positioned to take full
advantage of it. A
significant percentage of the Fund's portfolio was
invested in high
quality, discount coupons, which allowed it to
maximize its net asset
value in the rapidly declining interest rate
environment. The net
asset value increased by $0.52 per
share, to $8.32 on May 31, 1995, from $7.80 on February 28,
1995. Our current
goal is to use market strength to gradually increase
coupons, shorten maturities
and take a more conservative approach to the market until
these interest rate
levels prove they can hold. This is consistent with our long-
term strategy of
providing investors in the Fund with a competitive stream of
California
tax-exempt income with preservation of capital.
Some uncertainties surround the market, however. Among these
are the many flat
tax proposals being championed by members of both political
parties. Real
legislative action is several years away and must be REVENUE
NEUTRAL to make any
economic sense -- a very difficult balancing act to
accomplish. These
discussions have caused periodic weaknesses in the
1
<PAGE>
municipal securities market during the past months and will
no doubt continue to
cause periodic weaknesses over the next few years, which we
will view as an
opportunity to invest at levels that represent real value to
our shareholders. A
general rise in interest rates would be another story, and
we clearly would
react differently to that economic circumstance.
A defining moment for the municipal securities market was
Orange County
California's filing for bankruptcy in December 1994, which
immediately cast a
pall on the entire market. Its impact on the broader market
since then has been
minimal, but has been considerably stronger on the
securities of the County
itself. The recent defeat of "Measure R" makes us quite
skeptical of Orange
County's plans to repay its debt. The Fund has not
participated in any of the
recent debt offerings by Orange County, and holds only two
tax allocation
securities (approximately 4.2% of the Fund's portfolio)
issued by Orange County
Development Agency. Although these bonds are issued under
the name of the
County, they rely on a dedicated property tax to pay debt
service. Management
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.
PORTFOLIO UPDATE
At the end of this reporting period, 100% of the Fund's
portfolio was rated
investment grade (BBB/Baa and higher) by either Standard &
Poor's Corporation or
Moody's Investors Service, Inc. The majority of the Fund's
assets were invested
in general obligation, education, transportation and
pollution control issues.
The average maturity of the Fund was 8.7 years. As we stated
earlier, we intend
to gradually increase coupons, shorten the average maturity
of the portfolio and
assume a more conservative stance.
We look forward to reporting to you in the Fund's annual
report to investors.
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,
Heath B. McLendon Joseph P. Deanne
CHAIRMAN OF THE BOARD VICE PRESIDENT AND
INVESTMENT OFFICER
JULY 18, 1995
2
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- ---------------
PORTFOLIO HIGHLIGHTS (UNAUDITED)
MAY 31, 1995
INDUSTRY BREAKDOWN
Pie chart depicting the allocation of the Income Trust
Intermediate Maturity
California Municipals Fund investment securities held at May
31, 1995 by
industry classification. The pie is broken in pieces
representing industries in
the following percentages:
<TABLE>
<CAPTION>
INDUSTRY PERCENTAGE
<S> <C>
General Obligation 22.3%
Transportation 16.3%
Education 14.8%
Housing 6.1%
Other Industries and Net Other Assets
and Liabilities 16.4%
Pollution Control 11.5%
Hospital 8.8%
Utility 3.8%
</TABLE>
SUMMARY OF MUNICIPAL BONDS BY COMBINED RATINGS
<TABLE>
<CAPTION>
Standard & Percent
Moody's Poor's of Value
<S> <C> <C> <C>
-------------------------------------------------
AAA AAA 21.9%
-------------------------------------------------
AA AA 16.3
-------------------------------------------------
A A 36.2
-------------------------------------------------
BAA BBB 25.6
-------------------------------------------------
100.0%
---------------
</TABLE>
AVERAGE MATURITY 8.7 years
3
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
MAY 31, 1995
---------------------------------------------------
- ----------
<TABLE>
<S> <C>
KEY TO INSURANCE ABBREVIATIONS
AMBAC -- American Municipal Bond Assurance
Corporation
FGIC -- Federal Guaranty Insurance Corporation
FHA -- Federal Housing Administration
GNMA -- Government National Mortgage
Association
MBIA -- Municipal Bond Investor Assurance
</TABLE>
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
<C> <S> <C>
<C> <C>
-----------------------------------------------------------
- -----------------
MUNICIPAL BONDS AND NOTES -- 97.0%
CALIFORNIA -- 97.0%
Belmont, California,
Redevelopment Agency, Tax
Allocation Project, (Los
Costanos Community
Development), Series A:
$ 150,000 5.850% due 8/1/02 A A-
$ 153,375
160,000 5.950% due 8/1/03 A A-
164,000
California Educational
Facilities Authority,
Revenue Bonds:
945,000 (College of Osteopathic),
5.550% due 6/1/06 NR
AAA 954,450
320,000 (Loyola Marymount
University),
Series B,
6.300% due 10/1/03 A1
NR 344,000
200,000 (Mills College),
6.500% due 9/1/02 A
NR 216,000
500,000 (University of Southern
California),
5.300% due 10/1/04 Aa
AA 509,375
200,000 California Health
Facilities Financing
Authority, (Sisters of
Providence),
6.200% due 10/1/03 A1
AA- 208,500
400,000 California Health
Facilities,
(St. Elizabeth's Hospital
Project),
5.900% due 11/15/03 A1
A+ 410,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
-----------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
CALIFORNIA -- (CONTINUED)
$ 200,000 California Health
Facilities Revenue,
(Adventist Health
System/West Agency), Series
B, (MBIA Insured),
6.150% due 3/1/99 Aaa
AAA $ 211,250
California Housing Finance
Agency Revenue, Home
Mortgage:
5,000 10.000% due 2/1/02 Aa
AA- 5,031
Series E1, (FHA Insured):
700,000 5.900% due 2/1/05 Aa
AA- 713,125
700,000 5.900% due 8/1/05 Aa
AA- 714,000
California State, General
Obligation Bonds:
100,000 9.800% due 10/1/00 A1
A+ 121,625
200,000 6.000% due 9/1/03 A1 A
212,750
1,200,000 California Statewide
Community Development,
Certificates of
Participation, (St. Josephs
Health),
5.875% due 7/1/05 Aa
AA 1,255,500
190,000 Escondido, California,
Unified School District,
Certificates of
Participation, Series A,
5.400% due 7/1/03 A A-
185,963
Fresno, California, Joint
Powers Financing Authority,
Series A:
1,500,000 5.750% due 9/2/98 NR
BBB 1,503,750
355,000 Certificates of
Participation,
(Street Light Acquisition),
Project A,
5.375% due 8/1/03 A
A+ 347,900
855,000 Garden Grove, California,
Agency Tax Allocation
Revenue, (Garden Grove
Community Project),
5.375% due 10/1/03 NR A
843,244
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
-----------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
CALIFORNIA -- (CONTINUED)
$1,000,000 Hawthorne, California,
Community Redevelopment
Agency, (Tax Allocation
Redevelopment Project, Area
2),
6.200% due 9/1/05 Baa
NR $ 1,030,000
Irvine Ranch, California,
Water District, Joint
Powers Agency, Local Pool
Revenue, Issue II:
800,000 7.200% due 8/15/96 NR
A+ 815,000
480,000 7.800% due 8/15/01 NR
A+ 505,800
285,000 Kern, California, High
School District, Series C,
(MBIA Insured),
8.750% due 8/1/03 Aaa
AAA 353,756
Kings County, California,
Waste Management, Solid
Waste Revenue Bonds:
400,000 6.500% due 10/1/03 NR
BBB 418,000
310,000 6.600% due 10/1/04 NR
BBB 327,050
230,000 Kings River Conservation
District, (California Pine
Flat Power Revenue
Project), Series D,
5.375% due 1/1/00 Aa
AA 236,900
30,000 Los Angeles County,
California, Multiple
Capital Facilities,
Certificates of
Participation, (Project
III),
5.800% due 11/1/98 A A-
30,675
Los Angeles County,
California, Transportation
Authority, Transportation
Commission, Certificates of
Participation:
500,000 Series B,
6.200% due 7/1/03 A1
A+ 531,875
45,000 Series G,
6.100% due 1/1/00 A
NR 47,531
500,000 Modesto, California, High
School District,
(Stanislaus County), (FGIC
Insured),
5.300% due 8/1/04 Aaa
AAA 509,375
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
-----------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
CALIFORNIA -- (CONTINUED)
Mojave, California, Water
District, California
Improvement District,
(Moronogo Basin):
$ 250,000 6.250% due 9/1/02 Baa
BBB+ $ 260,625
280,000 6.375% due 9/1/03 Baa
BBB+ 293,650
Orange County, Cailfornia,
Development Agency Tax
Allocation, (Santa Ana
Heights Project):
500,000 5.500% due 9/1/00 Caa
BBB 485,000
500,000 5.600% due 9/1/01 Caa
BBB 482,500
Palm Springs, California,
Financing Authority,
Airport Revenue, (Palm
Springs Regional Airport),
(MBIA Insured):
200,000 5.400% due 1/1/03 Aaa
AAA 205,000
400,000 5.500% due 1/1/04 Aaa
AAA 411,000
795,000 Redding, California, Joint
Powers Financing Authority,
Solid Waste and Corporate
Yard, Series A,
5.000% due 1/1/04 A
BBB+ 744,319
150,000 Riverside County,
California, Transportation
Commission, Sales Tax
Revenue, Series A,
6.500% due 6/1/00 A
A+ 162,000
Sacramento, California,
Regional Transportation,
Certificates of
Participation, Series A:
300,000 6.375% due 3/1/02 A1
NR 321,000
350,000 6.400% due 3/1/03 A1
NR 375,813
100,000 San Diego, California,
Certificates of
Participation, Unified
School District, Series B,
6.000% due 7/1/03 Aa
AA- 104,875
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET VALUE
FACE VALUE MOODY'S
S&P (NOTE 1)
-----------------------------------------------------------
- -----------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
CALIFORNIA -- (CONTINUED)
San Francisco, California,
City and County Multifamily
Revenue, (South Beach
Project), (GNMA Insured):
$ 340,000 4.750% due 3/1/02 Aaa
NR $ 332,775
305,000 4.900% due 3/1/03 Aaa
NR 298,900
San Francisco, California,
Downtown Parking, Series R:
450,000 6.000% due 4/1/02 A
NR 460,125
280,000 6.150% due 4/1/03 A
NR 288,750
San Jose, California,
Airport Revenue:
500,000 (MBIA Insured),
5.750% due 3/1/03 Aaa
AAA 525,625
800,000 (FGIC Insured),
5.400% due 3/1/04 Aaa
AAA 808,000
Santa Barbara, California,
Certificates of
Participation, (Harbor
Refunding Project):
270,000 6.400% due 10/1/02 A
NR 283,500
285,000 6.500% due 10/1/03 A
NR 301,031
1,000,000 South Napa, California,
Waste Management
Facilities,
6.000% due 2/15/04 Baa1
NR 993,750
450,000 Southern California Rapid
Transit Authority, District
A2, Special Benefit
Assessment,
6.100% due 9/1/03 Baa A-
469,125
105,000 Tehachapi, California,
Unified School District,
School Facilities
Corporation, Certificates
of Participation,
5.900% due 8/1/03 Baa
NR 103,031
200,000 University of California,
Multiple Purpose Projects,
Series A, (MBIA Insured),
6.100% due 9/1/00 Aaa
AAA 213,750
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
<TABLE>
<CAPTION>
RATINGS
MARKET 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 $ 222,936
-----------------------------------------------------------
- -----------------
TOTAL MUNICIPAL BONDS AND NOTES
(COST $23,518,190)
23,027,380
-----------------------------------------------------------
- -----------------
TOTAL INVESTMENTS (COST $23,518,190*)
97.0% 23,027,380
OTHER ASSETS AND LIABILITIES (NET)
3.0 640,726
-----------------------------------------------------------
- -----------------
NET ASSETS
100.0% $23,668,106
-----------------------------------------------------------
- -----------------
<FN>
* Aggregate cost for Federal tax purposes.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- ---------------
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
MAY 31, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost
$22,518,190) (Note 1)
See accompanying schedule
$23,027,380
Cash
433,557
Interest receivable
361,853
Receivable for Fund shares sold
39,982
Unamortized organization costs (Note 7)
19,067
- ------------------------------------------------------------
- ------
TOTAL ASSETS
23,881,839
- ------------------------------------------------------------
- ------
LIABILITIES:
Payable for Fund shares redeemed $113,798
Dividends payable 66,377
Investment advisory fee payable (Note
2) 5,979
Administration fee payable (Note 2) 3,488
Service fee payable (Note 3) 3,066
Custodian fees payable (Note 2) 2,200
Transfer agent fees payable (Note 2) 808
Distribution fee payable (Note 3) 42
Accrued expenses and other payables 17,975
- ------------------------------------------------------------
- ------
TOTAL LIABILITIES
213,733
- ------------------------------------------------------------
- ------
NET ASSETS
$23,668,106
- ------------------------------------------------------------
- ------
NET ASSETS consist of:
Accumulated net realized loss on
investments sold
(892,242)
Unrealized appreciation of investments
509,190
Par value
2,844
Paid-in capital in excess of par value
24,048,314
- ------------------------------------------------------------
- ------
TOTAL NET ASSETS
$23,668,106
- ------------------------------------------------------------
- ------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
- ------------------------------------------------------------
- - MAY 31, 1995
<TABLE>
<S> <C>
NET ASSET VALUE:
CLASS A SHARES:
NET ASSET VALUE per share+
($23,416,362 DIVIDED BY 2,814,234
shares of beneficial interest
outstanding) $8.32
- ----------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE ($8.32
DIVIDED BY 0.980)
(based on sales charge of 2.00% of the
offering price at May 31, 1995) $8.49
- ----------------------------------------------------------
CLASS C SHARES:
NET ASSET VALUE and offering price per
share+
($251,744 DIVIDED BY 30,255 shares of
beneficial interest outstanding) $8.32
- ----------------------------------------------------------
<FN>
+ Redemption price per share is equal to Net Asset Value
less any applicable
contingent deferred sales charge.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- ---------------
STATEMENT OF OPERATIONS (UNAUDITED)
- ------------------------------------------------------------
- -
FOR THE SIX
MONTHS ENDED MAY 31, 1995
<TABLE>
<S> <C>
<C>
INVESTMENT INCOME:
Interest
$ 705,382
- ------------------------------------------------------------
- -------------------
EXPENSES:
Investment advisory fee (Note 2) $
42,677
Administration fee (Note 2)
24,387
Service fee (Note 3)
18,290
Legal and audit fees
13,139
Custodian fees (Note 2)
6,542
Amortization of organization costs (Note 7)
6,021
Trustees' fees and expenses (Note 2)
4,695
Transfer agent fees (Notes 2 and 4)
4,673
Distribution fee (Note 3)
205
Other
20,565
Fees waived by investment adviser and
administrator (Note 2)
(50,596)
- ------------------------------------------------------------
- -------------------
TOTAL EXPENSES
90,598
- ------------------------------------------------------------
- -------------------
NET INVESTMENT INCOME
614,784
- ------------------------------------------------------------
- -------------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS (NOTES 1
AND 5):
Net realized loss on investments during the
period
(136,860)
Net unrealized appreciation of investments
during the period
1,724,224
- ------------------------------------------------------------
- -------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
1,587,364
- ------------------------------------------------------------
- -------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$2,202,148
- ------------------------------------------------------------
- -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- ---------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
5/31/95 ENDED
(UNAUDITED) 11/30/94
<S>
<C> <C>
Net investment income
$ 614,784 $ 1,505,492
Net realized loss on investments during the period
(136,860) (731,956)
Net unrealized appreciation/(depreciation) of
investments during the period
1,724,224 (1,997,496)
- ------------------------------------------------------------
- -------------------------
Net increase/(decrease) in net assets resulting from
operations
2,202,148 (1,223,960)
Distributions to shareholders from net investment
income:
Class A
(610,051) (1,505,401)
Class C
(4,733) (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
(3,515,489) (4,380,596)
Class C
192,152 45,000
- ------------------------------------------------------------
- -------------------------
Net decrease in net assets
(1,735,973) (7,109,803)
NET ASSETS:
Beginning of period
25,404,079 32,513,882
- ------------------------------------------------------------
- -------------------------
End of period
$23,668,106 $25,404,079
- ------------------------------------------------------------
- -------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- ---------------
FINANCIAL HIGHLIGHTS
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR YEAR PERIOD
5/31/95 ENDED ENDED ENDED
(UNAUDITED) 11/30/94* 11/30/93 11/30/92*
<S>
<C> <C> <C> <C>
Net Asset Value, beginning of period
$ 7.80 $ 8.50 $ 8.04 $ 7.90
- ------------------------------------------------------------
- -------------------------
Income from investment operations:
Net investment income+
0.20 0.39 0.39 0.35
Net realized and unrealized gain/(loss) on investments
0.52 (0.69) 0.46 0.14
- ------------------------------------------------------------
- -------------------------
Total from investment operations
0.72 (0.30) 0.85 0.49
Less distributions:
Distributions from net investment income
(0.20) (0.39) (0.39) (0.35)
Distributions from net realized capital gains
- -- (0.01) -- --
- ------------------------------------------------------------
- -------------------------
Total distributions
(0.20) (0.40) (0.39) (0.35)
- ------------------------------------------------------------
- -------------------------
Net Asset Value, end of period
$ 8.32 $ 7.80 $ 8.50 $ 8.04
- ------------------------------------------------------------
- -------------------------
Total return++
9.39% (3.65)% 10.70% 6.33%
- ------------------------------------------------------------
- -------------------------
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)
$23,416 $25,359 $32,514 $10,667
Ratio of operating expenses to average net assets+++
0.74%** 0.75% 0.72% 0.65%**
Ratio of net investment income to average net assets
5.04%** 4.73% 4.45% 4.81%**
Portfolio turnover rate
4% 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 six months ended May 31, 1995 and
year ended November
30, 1994 and waiver of fees and reimbursement of
expenses by investment
adviser, sub-investment adviser, administrator, and/or
custodian and
distributor for the year ended November 30,1993 and
period ended November 30,
1992 were $0.19, $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 six months ended May
31, 1995 and year
ended November 30, 1994 and before waiver of fees and
reimbursement of
expenses by investment adviser, sub-investment adviser,
administrator and/or
custodian and distributor for the year ended November
30, 1993 and period
ended November 30, 1992 were 1.16%, 1.24%, 1.49% and
2.18%, respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- ---------------
FINANCIAL HIGHLIGHTS
FOR A CLASS C SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
5/31/95 ENDED
(UNAUDITED) 11/30/94*
<S>
<C> <C>
Net Asset Value, beginning of period
$ 7.80 $ 7.76
- ------------------------------------------------------------
- -------------------------
Income from investment operations:
Net investment income+
0.19 0.01
Net realized and unrealized gain on investments
0.52 0.05#
- ------------------------------------------------------------
- -------------------------
Total from investment operations
0.71 0.06
Less distributions:
Distributions from net investment income
(0.19) (0.02)
- ------------------------------------------------------------
- -------------------------
Total distributions
(0.19) (0.02)
- ------------------------------------------------------------
- -------------------------
Net Asset Value, end of period
$ 8.32 $ 7.80
- ------------------------------------------------------------
- -------------------------
Total return++
9.22% 0.72%
- ------------------------------------------------------------
- -------------------------
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)
$ 252 $ 45
Ratio of operating expenses to average net assets+++
0.94%** 0.95%**
Ratio of net investment income to average net assets
4.85%** 4.53%**
Portfolio turnover rate
4% 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 six months ended May 31, 1995 and
for the period ended
November 30, 1994 were $0.18 and $0.01, 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 six months ended May
31, 1995 and for the
period ended November 30, 1994 were 1.35% and 1.44%,
respectively.
# 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.
15
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- ---------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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. Effective November 7, 1994, the Fund began
offering Class C and
Class Y shares and all existing shares were designated Class
A shares. As of May
31, 1995, no Class Y shares have been sold. Class A shares
are sold with a
front-end sales charge. Class C shares may be subject to a
contingent deferred
sales charge ("CDSC") upon redemption. 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. All classes of
shares have
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 the close of
trading on the New
York Stock Exchange, Inc. by The Boston Company Advisors,
Inc. ("Boston
Advisors"), an indirect wholly owned subsidiary of Mellon
Bank Corporation
("Mellon"), 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
16
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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 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 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.
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. It is the policy of
the Fund to declare
dividends from net investment income daily and to pay such
dividends on the last
business day of the Smith Barney Inc. ("Smith Barney")
statement month.
Distributions of any net realized capital gains are declared
and paid annually,
after the end of the fiscal year. 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.
17
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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.
2. INVESTMENT ADVISORY AGREEMENT, ADMINISTRATION
AGREEMENT AND OTHER TRANSACTIONS
The Fund has entered into an investment advisory agreement
(the "Advisory
Agreement") with Smith Barney Mutual Funds Management Inc.
("SBMFM"). SBMFM
(formerly known as Smith Barney Advisers, Inc.), is a wholly
owned subsidiary of
Smith Barney Holdings Inc. ("Holdings"), which in turn is a
wholly owned
subsidiary of Travelers Group 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
The Fund has entered into an administration agreement (the
"Administration
Agreement') with SBMFM. Under the Administration Agreement,
the Fund pays a
monthly fee at the annual rate 0.20% of the value of its
average daily net
assets.
The Fund and SBMFM have 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, SBMFM may voluntarily waive a portion or
all of its advisory
and/or administrative fees otherwise payable to it. For the
six months ended May
31, 1995, SBMFM voluntarily waived advisory fees of $32,198
and administrative
fees of $18,398.
18
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
For the six months ended May 31, 1995, Smith Barney Inc.
("Smith Barney")
received $12,346 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 six months
ended May 31, 1995,
$4,048 in CDSCs 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 each Trustee emeritus who is not an
officer, director or
employee of Smith Barney or any of its affiliates $2,000 per
annum plus $250 per
meeting attended. The Trust reimburses each Trustee for
travel and out-of-pocket
expenses incurred in attending such meetings.
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 service 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
19
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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 six months ended May 31, 1995, the Fund incurred
$18,137 and $153 in
service fees for Class A and Class C shares, respectively.
For the six months
ended May 31, 1995, the Fund incurred $205 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. Operating expenses directly attributable to a class
of shares are charged
to that class' operations. In addition to the above
servicing and distribution
fees, class specific operating expenses for the six months
ended May 31, 1995
included transfer agent fees of $4,636 and $37 for Class A
and Class C shares,
respectively.
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities,
excluding short-term
investments, for the six months ended May 31, 1995 were
$937,239 and $3,585,161,
respectively.
At May 31, 1995, aggregate gross unrealized appreciation for
all securities in
which there was an excess of value over tax cost was
$621,400, and aggregate
gross unrealized depreciation for all securities in which
there was an excess of
tax cost over value was $112,210.
20
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
6. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of
beneficial interest with a
$.001 par value. Changes in shares of beneficial interest in
the Fund were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
5/31/95
11/30/94*
CLASS A SHARES: Shares
Amount Shares Amount
<S> <C> <C>
<C> <C>
- ------------------------------------------------------------
- -------------------------
Sold 140,297 $
1,123,479 1,242,342 $ 10,299,195
Issued as reinvestment of dividends 54,036
433,070 146,296 1,207,127
Redeemed (633,174)
(5,072,038) (1,962,629) (15,886,918)
- ------------------------------------------------------------
- -------------------------
Net decrease (438,841)
$(3,515,489) (573,991) $ (4,380,596)
- ------------------------------------------------------------
- -------------------------
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
5/31/95
11/30/94*
CLASS C SHARES: Shares
Amount Shares Amount
<S> <C> <C>
<C> <C>
- ------------------------------------------------------------
- -------------------------
Sold 24,205 $
190,144 5,799 $ 45,000
Issued as reinvestment of dividends 251
2,008 146,296 1,207,127
- ------------------------------------------------------------
- -------------------------
Net increase 24,456 $
192,152 5,799 $ 45,000
- ------------------------------------------------------------
- -------------------------
<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.
</TABLE>
As of November 30, 1994, no Class Y shares had been sold.
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
owned by Smith Barney 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.
21
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- -
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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 an
unused capital loss carryforward of $557,124 expiring in the
year 2002.
10. ORANGE COUNTY HOLDINGS
At May 31, 1995, approximately 4% of the Fund's portfolio
was invested in
securities issued by various agencies located within Orange
County, California.
However, none of these holdings are direct obligations of
the county itself, and
more than half are either insured (American Municipal Bond
Assurance
Corporation, Municipal Bond Investor Assurance or Federal
Guaranty Insurance
Corporation) or backed by guaranteed investment contracts.
The Fund believes
that the bankruptcy proceedings entered into by the County
will not have a
material impact on the ability of these issuers to make
scheduled interest and
principal payments and therefore will have little, if any,
effect on the Fund.
22
<PAGE>
Smith Barney
Intermediate Maturity
California Municipals Fund
- ------------------------------------------------------------
- ---------------
PARTICIPANTS
DISTRIBUTOR
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
INVESTMENT ADVISER AND
ADMINISTRATOR
Smith Barney Mutual Funds
Management Inc.
388 Greenwich Street
New York, New York 10013
SUB-INVESTMENT ADVISOR
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
COUNSEL
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
TRANSFER AGENT
The Shareholder Services Group, Inc.
Exchange Place
Boston, Massachusetts 02109
CUSTODIAN
Boston Safe Deposit and
Trust Company
One Boston Place
Boston, Massachusetts 02108
23
<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 my 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. 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.
24
<PAGE>
INTERMEDIATE
MATURITY
CALIFORNIA
MUNICIPALS
FUND
TRUSTEES
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt N. Dorsett
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon
Cornelius C. Rose, Jr.
OFFICERS
Heath B. McLendon
CHAIRMAN OF THE BOARD
AND INVESTMENT OFFICER
Jessica M. Bibliowicz
PRESIDENT
Lewis E. Daidone
SENIOR VICE PRESIDENT
AND TREASURER
Joseph P. Deane
VICE PRESIDENT AND
INVESTMENT OFFICER
Christina T. Sydor
SECRETARY
[LOGO]
THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE
SHAREHOLDERS OF
SMITH BARNEY INTERMEDIATE MATURITY CALIFORNIA MUNICIPALS
FUND. IT IS NOT
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS
ACCOMPANIED OR
PRECEDED BY AN EFFECTIVE PROSPECTUS FOR THE FUND, WHICH
CONTAINS INFORMATION
CONCERNING THE FUND'S INVESTMENT POLICIES AND EXPENSES AS
WELL AS OTHER
PERTINENT INFORMATION.
SMITH BARNEY
MUTUAL FUNDS
388 Greenwich Street
New York, New York 10013
Fund 165, 480, 496
[LOGO]
FD2330 7/95
