<PAGE>
SEMI-ANNUAL REPORT
SMITH BARNEY
INTERMEDIATE
MATURITY
CALIFORNIA
MUNICIPALS FUND
- -----------------------------------
May 31, 1997
[LOGO] SMITH BARNEY MUTUAL FUNDS
Investing for your future.
Every day.
<PAGE>
SMITH BARNEY INTERMEDIATE MATURITY CALIFORNIA MUNICIPALS FUND
================================================================================
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney
Intermediate Maturity California Municipals Fund ("Fund") for the period ended
May 31, 1997. In this report, we summarize the period's prevailing economic and
market conditions and outline the Fund's investment strategy. A detailed summary
of the Fund's performance and current holdings can be found in the appropriate
sections that follow.
Fund's Performance Update
For the six months ended May 31, 1997, the Class A shares of the Fund generated
a total return of 1.42% and outperformed the Fund's Lipper Analytical Services
Inc. intermediate-term municipals peer group average total return of 1.29% for
the same period. (Lipper Analytical Services, Inc. is an independent fund
tracking organization.)
In addition, the Fund paid income dividends totaling $0.20 per Class A share
during the reporting period. Based on a net asset value (NAV) of $8.47 and a
current monthly income dividend of $0.0325 per Class A share, this equates to an
annualized distribution rate of 4.60%. For a California resident in the combined
state and federal income tax bracket of 42%, the Fund's tax-free yield of 4.60%
is equivalent to a taxable yield of 7.93%. (This figure assumes an investor is
in the federal tax bracket of 36%, which constitutes approximately 10% of all
U.S. taxpayers according to the Internal Revenue Service.)
Market and Economic Overview
For the past several months ending in May, the bond market experienced a
significant correction in prices. This correction was a reaction not only to the
Federal Reserve's ("Fed") minor tightening of short-term interest rates but more
so to the conservative stance taken by the Fed's Chairman, Alan Greenspan. Given
a benign inflationary outlook and moderating economic data, we felt this
indicated a less robust economy in the second quarter. We felt that long-term
interest rates were quite cheap. In our view, these factors have led us to a
very positive outlook for long-term interest rates and the municipal bond market
through the summer.
The Fed has declined to push the federal funds rate higher at both the May and
July meetings. (The federal funds rate is the interest rate banks charge each
other for overnight loans and an indicator of the direction of interest rates.)
1
<PAGE>
Despite impressive growth in jobs, the producer price indices (PPI) and consumer
price indices (CPI) have been quite benign. Second quarter growth has also been
much more moderate than the two previous quarters. Therefore, the Fed's response
has been, in our opinion, appropriate, and should be positive for the bond
market.
California Economic Highlights
The California economy has proved to be very vibrant and diversified, enjoying
strong growth most of the last six years. Job growth in the services and
manufacturing sectors, over a broad range of industries, has become the
cornerstone of California's recovery. As a result, the state's unemployment rate
is now at its lowest level in seven years and personal income has risen
steadily. These strong characteristics have allowed California's gross state
product to exceed the $1 trillion level. This is the first time any state has
achieved this level of economic output.
Fund's Investment Strategy
Our basic goal during the recent bond market correction has been to position the
Fund in high-grade bonds and maintain a low cash position. This strategy should
enable us to maximize our dividend income and give us a better chance to
participate in the price appreciation that we believe this market will
experience from today's levels.
During the reporting period, the Fund continued to maintain its emphasis on high
credit quality. As of May 31, 1997, roughly 98.0% of the Fund's holdings were
rated investment grade with nearly 48.0% of these investments rated AAA. (An
investment-grade security is a security with a rating of BBB/Baa or better from
Standard & Poor's Ratings Service or Moody's Investors Service, Inc., two major
credit report and bond rating agencies.)
As an intermediate-term municipal bond fund, the weighted average maturity of
the Fund's securities will normally not exceed ten years. In our opinion, the
shorter-term bonds should provide investors with a competitive return with
significantly less volatility than longer-term bonds. As of May 31, 1997, the
Fund's weighted average maturity was approximately 7.2 years. Also at the end of
the reporting period, the Fund's assets were allocated among the following types
of municipal bond issues: housing bonds (16.6%), hospital bonds (15.8%) and
transportation bonds (13.4%).
2
<PAGE>
Outlook
Throughout 1997, the municipal market has outperformed its taxable counterpart
significantly. This is due simply to an ongoing imbalance in the supply and
demand for municipal bonds. For the past several years, supply has been quite
moderate, averaging about $170 billion per year. Conversely, demand has been
very strong, due to the significant amount of bond calls that have reduced the
amount of municipal debt outstanding by approximately $200 billion during the
last three years. Since we do not foresee any dramatic changes in this
relationship, we expect municipal debt to continue to show strong performance
relative to taxable debt.
In closing, thank you for your investment in the Smith Barney Intermediate
Maturity California Municipals Fund. We look forward to continuing to help you
achieve your financial goals.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
July 9, 1997
3
<PAGE>
================================================================================
Historical Performance -- Class A Shares
================================================================================
<TABLE>
<CAPTION>
Net Asset Value
--------------------
Beginning End Income Capital Total
Period Ended of Period of Period Dividends Gains Returns(1)
================================================================================
<S> <C> <C> <C> <C> <C>
5/31/97 $8.55 $8.47 $0.20 $0.00 1.42%+
- --------------------------------------------------------------------------------
11/30/96 8.53 8.55 0.40 0.00 5.05
- --------------------------------------------------------------------------------
11/30/95 7.80 8.53 0.40 0.00 14.84
- --------------------------------------------------------------------------------
11/30/94 8.50 7.80 0.39 0.01 (3.65)
- --------------------------------------------------------------------------------
11/30/93 8.04 8.50 0.39 0.00 10.70
- --------------------------------------------------------------------------------
Inception*-11/30/92 7.90 8.04 0.35 0.00 6.33+
================================================================================
Total $2.13 $0.01
================================================================================
</TABLE>
================================================================================
Historical Performance -- Class C Shares
================================================================================
<TABLE>
<CAPTION>
Net Asset Value
--------------------
Beginning End Income Capital Total
Period Ended of Period of Period Dividends Gains Returns(1)
================================================================================
<S> <C> <C> <C> <C> <C>
5/31/97 $8.54 $8.46 $0.19 $0.00 1.32%+
- --------------------------------------------------------------------------------
11/30/96 8.52 8.54 0.38 0.00 4.84
- --------------------------------------------------------------------------------
11/30/95 7.80 8.52 0.38 0.00 14.36
- --------------------------------------------------------------------------------
Inception*-11/30/94 7.76 7.80 0.02 0.00 0.72+
================================================================================
Total $0.97 $0.00
================================================================================
</TABLE>
================================================================================
Historical Performance -- Class Y Shares
================================================================================
<TABLE>
<CAPTION>
Net Asset Value
--------------------
Beginning End Income Capital Total
Period Ended of Period of Period Dividends Gains Returns(1)
================================================================================
<S> <C> <C> <C> <C> <C>
5/31/97 $8.56 $8.48 $0.21 $0.00 1.51%+
- --------------------------------------------------------------------------------
11/30/96 8.54 8.56 0.41 0.00 5.22
- --------------------------------------------------------------------------------
Inception*-11/30/95 8.39 8.54 0.09 0.00 2.92+
================================================================================
Total $0.71 $0.00
================================================================================
</TABLE>
IT IS THE FUND'S POLICY TO DISTRIBUTE DIVIDENDS MONTHLY AND CAPITAL GAINS, IF
ANY, ANNUALLY.
4
<PAGE>
================================================================================
Average Annual Total Return
================================================================================
<TABLE>
<CAPTION>
Without Sales Charge(1)
---------------------------------
Class A Class C Class Y
================================================================================
<S> <C> <C> <C>
Six Months Ended 5/31/97+ 1.42% 1.32% 1.51%
- --------------------------------------------------------------------------------
Year Ended 5/31/97 6.58 6.37 6.77
- --------------------------------------------------------------------------------
Five Years Ended 5/31/97 6.48 N/A N/A
- --------------------------------------------------------------------------------
Inception* through 5/31/97 6.23 8.19 5.63
================================================================================
<CAPTION>
With Sales Charge(2)
---------------------------------
Class A Class C Class Y
================================================================================
<S> <C> <C> <C>
Six Months Ended 5/31/97+ (0.56)% 0.32% 1.51%
- --------------------------------------------------------------------------------
Year Ended 5/31/97 4.45 5.37 6.77
- --------------------------------------------------------------------------------
Five Years Ended 5/31/97 6.05 N/A N/A
- --------------------------------------------------------------------------------
Inception* through 5/31/97 5.84 8.19 5.63
================================================================================
</TABLE>
<TABLE>
<CAPTION>
================================================================================
Cumulative Total Return
================================================================================
Without Sales Charge(1)
================================================================================
<S> <C>
Class A (Inception* through 5/31/97) 38.77%
- --------------------------------------------------------------------------------
Class C (Inception* through 5/31/97) 22.35
- --------------------------------------------------------------------------------
Class Y (Inception* through 5/31/97) 9.94
================================================================================
</TABLE>
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges ("CDSC") with respect to Class C shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A shares reflect the deduction
of the maximum initial sales charge of 2.00% and Class C shares reflect the
deduction of a 1.00% CDSC, which applies if shares are redeemed within one
year from initial purchase.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
* Inception dates for Class A, C and Y shares are December 31, 1991, November
8, 1994 and September 8, 1995, respectively.
5
<PAGE>
================================================================================
Historical Performance (unaudited)
================================================================================
Growth of $10,000 Invested in Class A Shares of the
Smith Barney Intermediate Maturity California Municipals Fund
vs. Lehman Brothers 10-Year Municipal Bond Index
and Lipper Analytical Services, Inc. Peer Group Average+
- --------------------------------------------------------------------------------
December 1991 -- May 1997
[GRAPHIC]
<TABLE>
<CAPTION>
Lehman Bros. Lipper
SB Intermediate Maturity 10 Year Peer
California Municipal Group
Municipals Fund Bond Index Average
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
12/31/91 9,802 10,000 10,000
11/92 10,422 10,767 10,621
11/93 11,537 12,028 11,671
11/94 11,116 11,491 11,240
11/95 12,767 13,623 12,848
11/96 13,412 14,394 13,490
5/31/97 13,602 14,637 13,664
</TABLE>
+ Hypothetical illustration of $10,000 invested in Class A shares at
inception on December 31, 1991, assuming deduction of the maximum 2.00%
sales charge at the time of investment and reinvestment of dividends and
capital gains, if any, at net asset value through May 31, 1997. The Lehman
Brothers 10-Year Municipal Bond Index ("Index") is a broad-based index
which includes about 5,200 bonds totaling approximately $63 billion in
market capitalization. The Lipper Analytical Services, Inc. Peer Group
Average is composed of an average of the Fund's peer group of mutual funds
(31 funds as of May 31, 1997) investing in intermediate maturity California
tax-exempt bonds. The index is unmanaged and is not subject to the same
management and trading expenses as a mutual fund. The performance of the
Fund's other classes may be greater or less than the Class A shares'
performance indicated on this chart, depending on whether greater or lesser
sales charges and fees were incurred by shareholders investing in the other
classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No adjustment
has been made for shareholder tax liability on dividends or capital gains.
6
<PAGE>
================================================================================
Portfolio Highlights (unaudited) May 31, 1997
================================================================================
Portfolio Breakdown
[PIE CHART]
Education 8.8%
General Obligation 0.8%
Hospital 15.8%
Housing 16.6%
Miscellaneous 17.0%
Solid Waste 9.4%
Tax Allocation 8.5%
Transportation 13.4%
Water & Sewer 9.7%
Summary of Municipal Bonds And Short-Term Tax Exempt
Investments by Combined Ratings
Standard & Percentage of
Moody's and/or Poor's Total Investments
- --------------------------------------------------------------------------------
Aaa AAA 47.6%
Aa AA 14.8
A A 19.4
Baa BBB 15.9*
NR NR 1.6
P-1/VMIG 1 A-1/SP-1 0.7
-----
100.0%
=====
* 0.8% of investments were rated by Fitch Investors Services, Inc.
7
<PAGE>
================================================================================
Schedule of Investments (unaudited) May 31, 1997
================================================================================
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
===========================================================================================================
<C> <C> <S> <C>
Education -- 8.8%
California Educational Facilities Authority,
Revenue Bonds:
$ 945,000 AAA College of Osteopathic Medicine,
CONNIE LEE-Insured, 5.550% due 6/1/06 $ 975,712
320,000 A1* Loyola Marymount University,
Series B, 6.300% due 10/1/03 346,000
200,000 A2* Mills College, 6.500% due 9/1/02 214,750
500,000 AA University of Southern California,
5.300% due 10/1/04 515,625
285,000 AAA Kern High School District, Series C,
MBIA-Insured, (Escrowed to Maturity with U.S.
Government Securities), 8.750% due 8/1/03 349,125
- -----------------------------------------------------------------------------------------------------------
2,401,212
- -----------------------------------------------------------------------------------------------------------
General Obligation -- 0.8%
200,000 A+ California State GO, 6.000% due 9/1/03 214,500
- -----------------------------------------------------------------------------------------------------------
Hospital -- 15.8%
305,000 AAA Arlington Community Hospital Corp., Parkview Community
Hospital, First Mortgage Revenue, (Escrowed to
Maturity with U.S. Government Securities),
8.000% due 6/1/04 333,975
California Health Facilities Financing Authority:
200,000 AAA Adventist Health System/West Agency, Series B,
MBIA-Insured, 6.150% due 3/1/99 206,250
1,000,000 AAA Mills-Peninsula, CONNIE LEE-Insured,
5.300% due 1/15/05 1,016,250
200,000 AA- Sisters of Providence, 6.200% due 10/1/03 215,000
400,000 NR St. Elizabeth's Hospital Project,
(Pre-Refunded -- Escrowed with U.S. Government
Securities to 11/5/02 Call @ 102),
5.900% due 11/15/03(a) 431,500
1,200,000 AA California Statewide Community Development, COP,
St. Joseph's Health, 5.875% due 7/1/05 1,264,500
345,000 AAA City of Marysville Hospital Revenue Refunding Bonds,
(The Fremont-Rideout Health Group), 1993 Series A,
AMBAC-Insured, 5.100% due 1/1/03(b) 351,900
250,000 A Riverside County Asset Leasing Corp., Leasehold
Revenue, Riverside County Hospital (Project A),
6.000% due 6/1/04 261,250
213,000 BBB++ Valley Health Systems COP, (Refunding Project),
6.250% due 5/15/99 215,397
- -----------------------------------------------------------------------------------------------------------
4,296,022
- -----------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
================================================================================
Schedule of Investments (unaudited) (continued) May 31, 1997
================================================================================
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
===========================================================================================================
<C> <C> <S> <C>
Housing -- 16.6%
$1,250,000 AAA ABAG Financing Authority, Multi-Family Housing Revenue,
Series A, 5.700% mandatory put 11/1/06(c) $ 1,265,625
California, Home Mortgage Revenue:
280,000 Aa2* Series B-1, FHA-Insured, 5.900% due 8/1/04(c) 288,750
700,000 Aa2* Series E-1, FHA-Insured, 5.900% due 2/1/05(c) 730,625
700,000 Aa2* Series E-1, FHA-Insured, 5.900% due 8/1/05(c) 732,375
5,000 Aa2* Single-Family Housing Revenue, Series A,
10.000% due 2/1/02 5,009
750,000 AAA Riverside County, Multi-Family Housing Revenue,
Series B, FNMA-Collateralized, 5.625%
mandatory put 7/1/09 748,125
285,000 AAA San Luis Obispo HFA, Multi-Family Housing Revenue,
(Parkwood Apartments Project), Series A,
FNMA-Collateralized, 5.500% due 8/1/03 288,563
465,000 AAA City of Santa Rosa Mortgage Revenue Refunding,
(Marlow Apartments Project), FHA-Insured,
5.600% due 9/1/05 466,743
- -----------------------------------------------------------------------------------------------------------
4,525,815
- -----------------------------------------------------------------------------------------------------------
Miscellaneous -- 17.0%
200,000 P-1* California PCR Financing Authority, 4.050%
due 6/1/17(d) 200,000
800,000 BBB Fresno Joint Powers Financing Authority,
Series A, 5.750% due 9/2/98 802,000
480,000 A+ Irvine Ranch Water District, Joint Powers Agency,
Local Pool Revenue, Issue II, 7.800% due 8/15/01 499,200
1,080,000 AAA Los Angeles County Community Facilities District No. 3,
Special Tax Revenue, Series A, FSA-Insured,
5.250% due 9/1/07 1,093,500
150,000 Aaa* Montclair Redevelopment Agency, Residential
Mortgage Revenue, (Escrowed to Maturity with
U.S. Government Securities), 7.750% due 10/1/11 172,688
San Francisco Downtown Parking, Series R:
450,000 A* 6.000% due 4/1/02 474,750
280,000 A* 6.150% due 4/1/03 299,600
Santa Barbara COP, (Harbor Refunding Project):
270,000 A* 6.400% due 10/1/02 286,538
285,000 A* 6.500% due 10/1/03 306,019
250,000 AA- Simi Valley Community Development Agency COP,
Simi Valley Business Center, Guaranty Agreement
with New England Mutual Life, 6.050%
mandatory put 10/1/99 256,875
205,000 AAA Upland COP, (Police Building Refunding Project),
AMBAC-Insured, 6.200% due 8/1/02 219,606
- -----------------------------------------------------------------------------------------------------------
4,610,776
- -----------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
================================================================================
Schedule of Investments (unaudited) (continued) May 31, 1997
================================================================================
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
===========================================================================================================
<C> <C> <S> <C>
Solid Waste -- 9.4%
Kings County Waste Management,
Solid Waste Revenue Bonds:
$ 400,000 BBB+ 6.500% due 10/1/03(c) $ 426,000
310,000 BBB+ 6.600% due 101/04 332,088
1,000,000 Baa1* South Napa Solid Waste Management Authority,
6.000% due 2/15/04(c) 1,037,500
795,000 A* Redding Joint Powers Financing Authority,
Solid Waste and Corporate Yard Revenue Bonds,
Series A, 5.000% due 1/1/04 772,144
- -----------------------------------------------------------------------------------------------------------
2,567,732
- -----------------------------------------------------------------------------------------------------------
Tax Allocation -- 8.5%
1,000,000 Baa* Hawthorne Community Redevelopment Agency,
Tax Allocation, (Redevelopment Project Area 2),
6.200% due 9/1/05(b) 1,046,250
565,000 AAA Lynwood Redevelopment Agency Tax Allocation,
(Project Area A), AMBAC-Insured, 5.125% due 7/1/03 577,713
665,000 A- Paramount Redevelopment Agency
Tax Allocation Refunding, (Redevelopment Project
Area No. 1), 5.800% due 8/1/03 694,094
- -----------------------------------------------------------------------------------------------------------
2,318,057
- -----------------------------------------------------------------------------------------------------------
Transportation -- 13.4%
500,000 A1* Los Angeles County Transportation Commission, COP,
Series B, 6.200% due 7/1/03 529,375
Palm Springs Financing Authority, Airport Revenue,
Palm Springs Regional Airport, MBIA-Insured:
200,000 AAA 5.400% due 1/1/03(c) 207,000
400,000 AAA 5.500% due 1/1/04(c) 417,000
350,000 A1* Sacramento Regional Transportation, COP, Series A,
6.400% due 3/1/03 374,060
240,000 AAA San Francisco Airport Improvement Corp.,
Lease Revenue, (Escrowed to Maturity with
U.S. Government Securities), 8.000% due 7/1/13 282,300
San Jose, Airport Revenue:
500,000 AAA MBIA-Insured, 5.750% due 3/1/03 526,250
800,000 AAA Series 93, FGIC-Insured, 5.400% due 3/1/04(c) 823,000
450,000 BBB+ Southern California Rapid Transit Authority, District A2,
Special Benefit Assessment, 6.100% due 9/1/03 470,250
- -----------------------------------------------------------------------------------------------------------
3,629,235
- -----------------------------------------------------------------------------------------------------------
Water & Sewer -- 9.7%
1,000,000 AAA El Dorado Public Agency Financing Authority,
FGIC-Insured, 5.200% due 2/15/07 1,012,500
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
================================================================================
Schedule of Investments (unaudited) (continued) May 31, 1997
================================================================================
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
===========================================================================================================
<C> <C> <S> <C>
Water & Sewer -- 9.7% (continued)
$1,000,000 AAA Modesto Irrigation District Financing Authority Revenue,
MBIA-Insured, 5.350% due 10/1/06 $ 1,037,500
Mojave Water District, California Improvement District,
(Morongo Basin):
250,000 AAA Escrowed to Maturity with U.S. Government
Securities, 6.250% due 9/1/02 270,313
280,000 AAA Pre-Refunded -- Escrowed with U.S. Government
Securities to 9/1/02 Call @ 102,
6.375% due 9/1/03 309,050
- -----------------------------------------------------------------------------------------------------------
2,629,363
- -----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $26,129,345**) $27,192,712
===========================================================================================================
</TABLE>
(a) Pre-Refunded bonds escrowed with U.S. Government Securities and bonds
escrowed to maturity with U.S. Government Securities are considered by the
investment advisor to be triple-A rated even if issuer has not applied for
new ratings.
(b) Securities segregated by Custodian for open purchase commitment.
(c) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax. (d) Variable rate obligations
payable at par on demand at any time on no more than seven days notice.
++ Fitch Investors Services, Inc.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 12 and 13 for definitions of ratings and certain security
descriptions.
See Notes to Financial Statements.
11
<PAGE>
================================================================================
Bond Ratings
================================================================================
All ratings are by Standard & Poor's Rating Service ("Standard & Poor's"),
except those identified by an asterisk (*) are rated by Moody's Investors
Service Inc. ("Moody's"). The definitions of the applicable rating symbols are
set forth below:
Standard & Poor's -- Ratings from "AA" to "BBB" may be modified by the addition
of a plus (+) or minus (-) sign to show relative standings within the major
rating categories.
AAA -- Bonds rated "AAA" have the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and repay
principal and differ from the highest rated issue only in a small
degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt in
higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.
Moody's -- Numerical modifiers 1, 2 and 3 may be applied to each generic rating
from "Aa" to "Baa," where 1 is the highest and 3 the lowest ranking within its
generic category.
Aaa -- Bonds that are rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred
to as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa -- Bonds that are rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group they comprise what are
generally known as high grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large in "Aaa"
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in "Aaa" securities.
A -- Bonds that are rated "A" possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
some time in the future.
Baa -- Bonds that are rated "Baa" are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.
NR -- Indicates that the bond is not rated by Standard & Poor's or Moody's.
12
<PAGE>
================================================================================
Short-Term Securities Ratings
================================================================================
SP-1 -- Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined to
possess overwhelming safety characteristics are denoted with a plus
(+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate demand
obligation (VRDO) rating indicating that the degree of safety
regarding timely payment is either overwhelming or very strong; those
issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign.
VMIG 1 -- Moody's highest rating for issues having a demand feature -- VRDO.
P-1 -- Moody's highest rating for commercial paper and for VRDO prior to the
advent of the VMIG 1 rating.
================================================================================
Security Descriptions
================================================================================
ABAG -- Association of Bay Area
Governments
AIG -- American International
Guaranty
AMBAC -- American Municipal Bond
Assurance Corporation
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance
Company
CONNIE LEE -- College Construction Loan
Insurance Association
COP -- Certificate of Participation
EDA -- Economic Development
Authority
FLAIRS -- Floating Adjustable Interest
Rate Securities
FGIC -- Financial Guaranty Insurance
Company
FHA -- Federal Housing
Administration
FHLMC -- Federal Home Loan Mortgage
Corporation
FNMA -- Federal National Mortgage
Association
FSA -- Financial Security Assurance
GIC -- Guaranteed Investment
Contract
GNMA -- Government National
Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
IDA -- Industrial Development
Authority
IDB -- Industrial Development Board
IDR -- Industrial Development
Revenue
INFLOS -- Inverse Floaters
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors
Assurance Corporation
MVRICS -- Municipal Variable Rate
Inverse Coupon Security
PCFA -- Pollution Control Financing
Authority
PCR -- Pollution Control Revenue
RIBS -- Residual Interest Bonds
VA -- Veterans Administration
VRDD -- Variable Rate Daily Demand
13
<PAGE>
===============================================================================
Statement of Assets and Liabilities (unaudited) May 31, 1997
===============================================================================
ASSETS:
Investments, at value (Cost -- $26,129,345) $27,192,712
Receivable for securities sold 50,000
Receivable for Fund shares sold 88,227
Interest receivable 445,182
Receivable from investment advisor 110,703
- -------------------------------------------------------------------------------
Total Assets 27,886,824
- -------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 111,384
Payable to bank 50,160
Distribution fees payable 1,095
Accrued expenses 21,872
- -------------------------------------------------------------------------------
Total Liabilities 184,511
- -------------------------------------------------------------------------------
Total Net Assets $27,702,313
===============================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 3,269
Capital paid in excess of par value 27,624,496
Undistributed net investment income 1,529
Accumulated net realized loss from security transactions (990,348)
Net unrealized appreciation of investments 1,063,367
- -------------------------------------------------------------------------------
Total Net Assets $27,702,313
===============================================================================
Shares Outstanding:
Class A 2,921,228
- -------------------------------------------------------------------------------
Class C 315,390
- -------------------------------------------------------------------------------
Class Y 32,759
- -------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $8.47
- -------------------------------------------------------------------------------
Class C* $8.46
- -------------------------------------------------------------------------------
Class Y (and redemption price) $8.48
- -------------------------------------------------------------------------------
Class A Maximium Public Offering Price Per Share
(net asset value plus 2.04% of net asset value per share) $8.64
===============================================================================
* Redemption price is NAV of Class C shares reduced by a 1.00% CDSC if shares
are redeemed within the first year of purchase.
See Notes to Financial Statements.
14
<PAGE>
===============================================================================
Statement of Operations (unaudited)
===============================================================================
For the Six Months Ended May 31, 1997
INVESTMENT INCOME:
Interest $ 750,059
- -------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 3) 41,142
Administration fees (Note 3) 27,428
Distribution fees (Note 3) 22,943
Registration fees 15,000
Audit and legal 14,350
Trustees' fees 11,280
Shareholder and system servicing fees 10,256
Shareholder communications 9,544
Amortization of deferred organization costs 1,004
Custody 690
Other 1,055
- -------------------------------------------------------------------------------
Total Expenses 154,692
Less: Investment advisory and administration fee waivers (Note 3) (49,370)
- -------------------------------------------------------------------------------
Net Expenses 105,322
- -------------------------------------------------------------------------------
Net Investment Income 644,737
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTE 5):
Realized Loss From Security
Transactions (excluding short-term securities):
Proceeds from sales 277,000
Cost of securities sold 281,186
- -------------------------------------------------------------------------------
Net Realized Loss (4,186)
- -------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 1,299,621
End of period 1,063,367
- -------------------------------------------------------------------------------
Decrease in Net Unrealized Appreciation (236,254)
- -------------------------------------------------------------------------------
Net Loss on Investments (240,440)
- -------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 404,297
===============================================================================
See Notes to Financial Statements.
15
<PAGE>
===============================================================================
Statements of Changes in Net Assets
===============================================================================
For the Six Months Ended May 31, 1997 (unaudited)
and the Year Ended November 30, 1996
<TABLE>
<CAPTION>
1997 1996
===============================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 644,737 $ 1,292,655
Net realized gain (loss) (4,186) 21,872
Increase (decrease) in net unrealized appreciation (236,254) 11,418
- -------------------------------------------------------------------------------
Increase in Net Assets From Operations 404,297 1,325,945
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM (NOTE 4):
Net investment income (644,497) (1,291,366)
- -------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (644,497) (1,291,366)
- -------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares 1,855,703 4,206,393
Net asset value of shares issued for
reinvestment of dividends 371,314 913,647
Cost of shares reacquired (1,702,660) (6,462,164)
- -------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions 524,357 (1,342,124)
- -------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 284,157 (1,307,545)
NET ASSETS:
Beginning of period 27,418,156 28,725,701
- -------------------------------------------------------------------------------
End of period* $27,702,313 $27,418,156
===============================================================================
* Includes undistributed net investment income of: $1,529 $1,289
===============================================================================
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
================================================================================
Notes to Financial Statements (unaudited)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Intermediate Maturity California Municipals Fund ("Fund") is a
separate investment fund of the Smith Barney Investment Trust ("Trust"). The
Trust, a Massachusetts business trust, is registered under the Investment
Company Act of 1940, as amended, as a non-diversified, open-end management
investment company and consists of this Fund and the Smith Barney Intermediate
Maturity New York Municipals Fund. The financial statements and financial
highlights for this other fund is presented in a separate semi-annual report.
The significant accounting policies consistently followed by the Fund are:
(a) security transactions are accounted for on the trade date; (b) securities
are valued at the mean between the quoted bid and asked prices by an independent
pricing service that are based on transactions in municipal obligations,
quotations from municipal bond dealers, market transactions in comparable
securities and various relationships between securities; (c) securities maturing
within 60 days are valued at cost plus accreted discount, or minus amortized
premium, which approximates value; (d) gains or losses on the sale of securities
are calculated by using the specific identification method; (e) interest income,
adjusted for amortization of premium and accretion of original issue discount,
is recorded on the accrual basis; market discount is recognized upon the
disposition of the security; (f) direct expenses are charged to the Fund and
each class; management fees and general fund expenses are allocated on the basis
of relative net assets; (g) dividends and distributions to shareholders are
recorded on the ex-dividend date; (h) the Fund intends to comply with the
applicable provisions of the Internal Revenue Code of 1986, as amended,
pertaining to regulated investment companies and to make distributions of
taxable income sufficient to relieve it from substantially all Federal income
and excise taxes; and (i) estimates and assumptions are required to be made
regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
In addition, organization costs have been deferred and are being amortized
on a straight line basis over a five-year period, beginning with the
commencement of the Fund's operations in December 1991.
17
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
2. PORTFOLIO CONCENTRATION
Since the Fund invests primarily in obligations of issuers within
California, it is subject to possible concentration risks associated with
economic, political, or legal developments or industrial or regional matters
specifically affecting California.
3. INVESTMENT ADVISORY AGREEMENT, ADMINISTRATION
AGREEMENT AND OTHER TRANSACTIONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment adviser to the Fund. The Fund
pays SBMFM an advisory fee calculated at an annual rate of 0.30% of the average
daily net assets. This fee is calculated daily and paid monthly. For the six
months ended May 31, 1997, SBMFM waived $29,622 of its investment advisory fees.
SBMFM also acts as the Fund's administrator for which the Fund pays a fee
calculated at the annual rate of 0.20% of the average daily net assets. This fee
is calculated daily and paid monthly. For the six months ended May 31, 1997,
SBMFM waived $19,748 of its administration fees.
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts as distributor of
Fund shares. For the six months ended May 31, 1997, SB received sales charges of
approximately $17,000 on sales of the Fund's Class A shares.
Pursuant to a Distribution Plan, the Fund pays a service fee with respect
to its Class A and C shares, calculated at the annual rate of 0.15% of the
average daily net assets for each class. In addition, the Fund pays a
distribution fee with respect to its Class C shares calculated at the annual
rate of 0.20%.
For the six months ended May 31, 1997, total Distribution Plan fees were:
Class A Class C
================================================================================
Distribution Plan Fees $18,432 $4,511
================================================================================
All officers and one Trustee of the Fund are employees of SB.
4. EXEMPT-INTEREST DIVIDENDS AND OTHER DISTRIBUTIONS
The Fund intends to satisfy conditions that will enable interest from
municipal securities, which is exempt from regular Federal income tax and from
designated state income taxes, to retain such tax-exempt status when distributed
to the shareholders of the Fund.
18
<PAGE>
===============================================================================
Notes to Financial Statements (unaudited) (continued)
===============================================================================
Capital gains distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
5. INVESTMENTS
For the six months ended May 31, 1997, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
===============================================================================
Purchases $1,071,425
- -------------------------------------------------------------------------------
Sales 277,000
===============================================================================
At May 31, 1997, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
===============================================================================
Gross unrealized appreciation $1,082,063
Gross unrealized depreciation (18,696)
- -------------------------------------------------------------------------------
Net unrealized appreciation $1,063,367
===============================================================================
6. CAPITAL LOSS CARRYFORWARDS
At November 30, 1996, the Fund had for Federal tax purposes approximately
$986,000 of capital loss carryforwards available, subject to certain
limitations, to offset future capital gains. To the extent that these
carryforward losses are used to offset capital gains, it is probable that the
gains so offset will not be distributed.
The amount and year of expiration for each carryforward loss is indicated
below:
11/30/01 11/30/02 11/30/03
===============================================================================
Capital Loss Carryforwards $22,000 $695,000 $269,000
===============================================================================
7. SHARES OF BENEFICIAL INTEREST
As of May 31, 1997, the Fund had an unlimited number of shares of
beneficial interest authorized with a par value of $0.001 per share. The Fund
has the ability to issue multiple classes of shares. Each share of a class
represents an identical interest and has the same rights, except that each class
bears certain direct expenses, including those specifically related to the
distribution of its shares.
At May 31, 1997, total paid-in capital amounted to the following for each
class:
Class A Class C Class Y
===============================================================================
Total Paid-in Capital $24,730,105 $2,661,815 $235,845
===============================================================================
19
<PAGE>
===============================================================================
Notes to Financial Statements (unaudited) (continued)
===============================================================================
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 1997 November 30, 1996
----------------------- ----------------------
Shares Amount Shares Amount
===============================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 180,540 $1,530,156 411,844 $ 3,492,374
Shares issued on
reinvestment 38,800 327,807 96,895 816,607
Shares redeemed (168,202) (1,424,106) (710,606) (6,007,948)
- -------------------------------------------------------------------------------
Net Increase (Decrease) 51,138 $ 433,857 (201,867) $(1,698,967)
===============================================================================
Class C
Shares sold 38,520 $ 325,547 84,737 $ 714,019
Shares issued on
reinvestment 4,499 37,960 10,006 84,206
Shares redeemed (32,865) (278,554) (53,891) (454,216)
- -------------------------------------------------------------------------------
Net Increase 10,154 $ 84,953 40,852 $ 344,009
===============================================================================
Class Y
Shares sold -- -- -- --
Shares issued on
reinvestment 657 $ 5,547 1,521 $ 12,834
Shares redeemed -- -- -- --
- -------------------------------------------------------------------------------
Net Increase 657 $ 5,547 1,521 $ 12,834
===============================================================================
</TABLE>
20
<PAGE>
================================================================================
Financial Highlights
================================================================================
For a share of each class of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
Class A Shares 1997(1) 1996 1995 1994 1993 1992(2)
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.55 $8.53 $7.80 $8.50 $8.04 $7.90
- ------------------------------------------------------------------------------------------------------------------------
Income (Loss) From
Operations:
Net investment income (3) 0.20 0.40 0.40 0.39 0.39 0.35
Net realized and
unrealized gain (loss) (0.08) 0.02 0.73 (0.69) 0.46 0.14
- ------------------------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 0.12 0.42 1.13 (0.30) 0.85 0.49
- ------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.20) (0.40) (0.40) (0.39) (0.39) (0.35)
Net realized gains -- -- -- (0.01) -- --
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.20) (0.40) (0.40) (0.40) (0.39) (0.35)
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $8.47 $8.55 $8.53 $7.80 $8.50 $8.04
- ------------------------------------------------------------------------------------------------------------------------
Total Return 1.42%++ 5.05% 14.84% (3.65)% 10.70% 6.33%++
- ------------------------------------------------------------------------------------------------------------------------
Net Assets, End of
Period (000s) $24,755 $24,537 $26,211 $25,359 $32,514 $10,667
- ------------------------------------------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses (3) 0.75%+ 0.77% 0.75% 0.75% 0.72% 0.65%+
Net investment income 4.73+ 4.69 4.89 4.73 4.45 4.81+
- ------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 15% 8% 39% 16% 46%
========================================================================================================================
</TABLE>
(1) For the six months ended May 31, 1997 (unaudited).
(2) For the period from December 31, 1991 (inception date) to November 30,
1992.
(3) The investment adviser and administrator waived all or part of their fees
for the six months ended May 31, 1997, the four years ended November 30,
1996 and the period ended November 30, 1992. In addition, the investment
adviser reimbursed the Fund for $75,189 in expenses for the year ended
November 30, 1996. If such fees were not waived and expenses were not
reimbursed, the per share effect on net investment income and the expense
ratios would have been as follows:
<TABLE>
<CAPTION>
Expense Ratios
Per Share Decreases to Without Fee Waivers
Net Investment Income and Reimbursements
-------------------------------------------- ---------------------------------------------
1997 1996 1995 1994 1993 1992 1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $0.02 $0.07 $0.03 $0.04 $0.07 $0.11 1.10%+ 1.54% 1.16% 1.24% 1.49% 2.18%+
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
21
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
Class C Shares 1997(1) 1996 1995 1994(2)
===================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $8.54 $8.52 $7.80 $7.76
- ---------------------------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.19 0.38 0.38 0.01
Net realized and unrealized gain(loss) (0.08) 0.02 0.72 0.05**
- ---------------------------------------------------------------------------------------------------
Total Income From Operations 0.11 0.40 1.10 0.06
- ---------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.19) (0.38) (0.38) (0.02)
- ---------------------------------------------------------------------------------------------------
Total Distributions (0.19) (0.38) (0.38) (0.02)
- ---------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $8.46 $8.54 $8.52 $7.80
- ---------------------------------------------------------------------------------------------------
Total Return 1.32%++ 4.84% 14.36% 0.72%++
- ---------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $2,669 $2,607 $2,254 $45
- ---------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (3) 0.96%+ 0.98% 0.98% 0.95%+
Net investment income 4.52+ 4.48 4.54 4.53+
- ---------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 15% 8% 39%
===================================================================================================
</TABLE>
(1) For the six months ended May 31, 1997 (unaudited).
(2) For the period from November 8, 1994 (inception date) to November 30, 1994.
(3) The investment adviser and administrator waived all or part of their fees
for the six months ended May 31, 1997, the two years ended November 30,
1996 and the period ended November 30, 1994. In addition, the investment
adviser reimbursed the Fund for $75,189 in expenses for the year ended
Novemebr 30, 1996. If such fees were not waived and expenses were not
reimbursed, the per share effect on net investment income and the expense
ratios would have been as follows:
<TABLE>
<CAPTION>
Expense Ratios
Per Share Decreases to Without Fee Waivers
Net Investment Income and Reimbursements
------------------------- --------------------------
1997 1996 1995 1994 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class C $0.02 $0.07 $0.03 $0.00* 1.31%+ 1.75% 1.39% 1.44%+
</TABLE>
* Amount represents less than $0.01 per share.
** 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.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
22
<PAGE>
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
Class Y Shares 1997(1) 1996 1995(2)
================================================================================
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $8.56 $8.54 $8.39
- --------------------------------------------------------------------------------
Income From Operations:
Net investment income(3) 0.21 0.41 0.09
Net realized and unrealized gain (loss) (0.08) 0.02 0.15
- --------------------------------------------------------------------------------
Total Income From Operations 0.13 0.43 0.24
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.21) (0.41) (0.09)
- --------------------------------------------------------------------------------
Total Distributions (0.21) (0.41) (0.09)
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $8.48 $8.56 $8.54
- --------------------------------------------------------------------------------
Total Return 1.51%++ 5.22% 2.92%++
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $278 $274 $261
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (3) 0.57%+ 0.59% 0.58%+
Net investment income 4.91+ 4.87 4.74+
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 15% 8%
================================================================================
</TABLE>
(1) For the six months ended May 31, 1997 (unaudited).
(2) For the period from September 8, 1995 (inception date) to November 30,
1995.
(3) The investment adviser and administrator waived all or part of their fees
for the six months ended May 31, 1997, the year ended November 30, 1996 and
the period ended November 30, 1995. In addition, the investment adviser
reimbursed the Fund for $75,189 in expenses for the year ended November 30,
1996. If such fees were not waived and expenses were not reimbursed, the
per share effect on net investment income and the expense ratios would have
been as follows:
<TABLE>
<CAPTION>
Expense Ratios
Per Share Decrease to Without Fee Waivers
Net Investment Income and Reimbursements
--------------------- -------------------
1997 1996 1995 1997 1996 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Class Y $0.02 $0.07 $0.03 0.92%+ 1.36% 0.99%+
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
23
<PAGE>
[This page intentionally left blank]
<PAGE>
SMITH BARNEY
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, Chairman
Cornelius C. Rose, Jr.
James J. Crisona, Emeritus
Officers
Heath B. McLendon
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Joseph P. Deane
Vice President and
Investment Officer
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
SMITH BARNEY
- ---------------------------------
A Member of TravelersGroup [LOGO]
Investment Adviser and
Administrator
Smith Barney Mutual Funds
Management Inc.
Distributor
Smith Barney Inc.
Custodian
PNC Bank, N.A.
Shareholder
Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
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 a current Prospectus for the Fund, which contains information
concerning the Fund's investment policies and expenses as well as other
pertinent information.
SMITH BARNEY
INTERMEDIATE MATURITY
CALIFORNIA
MUNICIPALS FUND
388 Greenwich Street
New York, New York 10013
FD2400 7/97
SEMI-ANNUAL REPORT
SMITH BARNEY
INTERMEDIATE
MATURITY
NEW YORK
MUNICIPALS
FUND
- ----------------------------------
May 31, 1997
[LOGO] SMITH BARNEY MUTUAL FUNDS
Investing for your future.
Every day.
<PAGE>
- --------------------------------------------------------------------------------
Smith Barney Intermediate Maturity New York Municipals Fund
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney
Intermediate Maturity New York Municipals Fund ("Fund") for the period ended May
31, 1997. In this report, we summarize the period's prevailing economic and
market conditions and outline the Fund's investment strategy. A detailed summary
of the Fund's performance and current holdings can be found in the appropriate
sections that follow.
Fund's Performance and Investment Strategy
For the six months ended May 31, 1997, the Class A shares of the Fund generated
a total return of 1.54% and outperformed the Fund's Lipper Analytical Services
Inc. intermediate-term municipals peer group average total return of 1.28% for
the same period. (Lipper Analytical Services, Inc. is an independent fund
tracking organization.)
During the reporting period, the Fund continued to maintain its emphasis on high
credit quality. As of May 31, 1997, roughly 95.2% of the Fund's holdings were
rated investment grade with 43.2% of these investments rated AAA. (An investment
- -grade security is a security with a rating of BBB/Baa or better from Standard &
Poor's Ratings Service or Moody's Investors Service, Inc., respectively, two
major credit report and bond rating agencies.)
In addition, the Fund paid income dividends totaling $0.21 per Class A share
during the reporting period. Based on a net asset value (NAV) of $8.39 and a
current monthly income dividend of roughly $0.035 per Class A share, this
equates to an annualized distribution rate of 5.01%. For a New York resident in
the combined state and federal income tax bracket of 40.62%, the Fund's tax-free
yield of 5.01% is equivalent to a taxable yield of 8.44%. (This figure assumes
an investor is in the federal tax bracket of 36%, which constitutes
approximately 10% of all U.S. taxpayers according to the Internal Revenue
Service.)
As an intermediate-term municipal bond fund, the weighted average maturity of
the Fund's securities will normally not exceed ten years. As of May 31, 1997,
the Fund's weighted average maturity was approximately 8.1 years. Also at the
end of the reporting period, the Fund's assets were allocated among the
following types of municipal bond issues: transportation bonds (18.1%),
education bonds (15.2%), and general obligation bonds (13.6%).
1
<PAGE>
We continue to follow an investment strategy that emphasizes high-quality
issues, good call protection and broad sector diversification. Generally, we
focus on the coupon, maturity and call features of the Fund's holdings rather
than the specific purpose for which the bond is being issued. Moreover, we
continue to slightly extend the average life of the Fund's holdings to take
advantage of the higher income stream from the longer-term issues.
New York Economic Highlights
The economic recovery of New York state, and particularly New York City, has
continued, led primarily by Wall Street and the financial services industries.
Moreover, both the state and city administrations have been successful in their
efforts to create a more efficient government and a more favorable business
environment. In the case of New York state, this downsizing has been
accomplished mainly through attrition and retirement incentives. Furthermore,
New York now leads the nation in reducing taxes for both residents and
businesses.
Personal income growth in the Empire State remains strong, averaging well over
4.5% a year and income levels are nearly 20% above the national average. Yet,
like many states in the Northeast region, job growth still lags national
averages. Although down slightly from the previous year, the New York state
unemployment rate was about 6.2% in 1996, almost 1% higher than the national
average. Nevertheless, New York continues to earn a single A-minus and A3 rating
for its general obligation debt from Standard & Poor's Ratings Service and
Moody's Investors Services, respectively, indicating their generally positive
outlook for the Empire State's economic future. In our opinion, we believe that
continued fiscal restraint along with an improving employment should benefit
select New York municipal bonds.
Market Update and Outlook
The U.S. economy continued to grow steadily during the course of the year. Yet
conflicting official economic reports released during the year led many
investors to vacillate between a view of a slowing U.S. economy and one that was
beginning to overheat, which in turn led to considerable volatility in the bond
markets. However, since the beginning of 1997, many economic indicators showed
that the U.S. economy was expanding at a brisk pace. In response to a steady
stream of government economic reports, the Federal Reserve Board ("Fed") raised
the federal funds rate by 25 basis points, or 0.25% in March of this year. (The
federal funds rate is the interest rate banks charge each other for overnight
loans and is a closely watched indicator of the direction of interest rates.)
2
<PAGE>
Although many investors had expected an additional tightening of Fed monetary
policy at its May or July meetings, the Fed declined to raise interest rates on
both occasions. In our opinion, a positive inflation outlook and recent signs of
a softening U.S. economy led to the Fed's decision to leave rates unchanged.
However, we believe there is some risk of additional interest rate increases
later on this year. Recently released government reports indicated that the U.S.
economy grew at nearly a 5.8% annualized rate for the first quarter of 1997
compared to the already robust 3.8% annualized growth rate posted during the
fourth quarter of 1996. These U.S. economic growth rates are well beyond the
Fed's stated target range of approximately 2.5% annualized growth. Moreover,
it's unclear if the U.S. economy will be able to slow down enough over the
coming months to satisfy the Fed's concerns of possibly higher inflationary
pressures.
In closing, thank you for your investment in the Smith Barney Intermediate
Maturity New York Municipals Fund. We look forward to continuing to help you
achieve your financial goals.
Sincerely,
/s/ Heath B. McLendon /s/ Peter M. Coffey
Heath B. McLendon Peter M. Coffey
Chairman Vice President and
Investment Officer
July 2, 1997
3
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance -- Class A Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
----------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
==========================================================================================
<S> <C> <C> <C> <C> <C>
5/31/97 $ 8.47 $ 8.39 $ 0.21 $ 0.00 1.54%+
- ------------------------------------------------------------------------------------------
11/30/96 8.48 8.47 0.41 0.00 4.85
- ------------------------------------------------------------------------------------------
11/30/95 7.80 8.48 0.41 0.00 14.31
- ------------------------------------------------------------------------------------------
11/30/94 8.54 7.80 0.40 0.02 (3.97)
- ------------------------------------------------------------------------------------------
11/30/93 8.18 8.54 0.40 0.02 9.76
- ------------------------------------------------------------------------------------------
Inception* - 11/30/92 7.90 8.18 0.38 0.00 8.59+
==========================================================================================
Total $2.21 $0.04
==========================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Historical Performance -- Class C Shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
----------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
==========================================================================================
<S> <C> <C> <C> <C> <C>
5/31/97 $ 8.47 $ 8.39 $ 0.20 $ 0.00 1.44%+
- ------------------------------------------------------------------------------------------
11/30/96 8.48 8.47 0.39 0.00 4.64
- ------------------------------------------------------------------------------------------
Inception* - 11/30/95 7.87 8.48 0.38 0.00 13.01+
==========================================================================================
Total $ 0.97 $ 0.00
==========================================================================================
</TABLE>
It is the Fund's policy to distribute dividends monthly and capital gains, if
any, annually.
- --------------------------------------------------------------------------------
Average Annual Total Return
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Without Sales Charge(1)
-----------------------
Class A Class C
================================================================================
<S> <C> <C>
Six Months Ended 5/31/97+ 1.54% 1.44%
- --------------------------------------------------------------------------------
Year Ended 5/31/97 7.10 6.88
- --------------------------------------------------------------------------------
Five Years Ended 5/31/97 6.19 N/A
- --------------------------------------------------------------------------------
Inception* through 5/31/97 6.31 7.56
================================================================================
With Sales Charge(2)
-----------------------
Class A Class C
================================================================================
Six Months Ended 5/31/97+ (0.45)% 0.44%
- --------------------------------------------------------------------------------
Year Ended 5/31/97 4.93 5.88
- --------------------------------------------------------------------------------
Five Years Ended 5/31/97 5.77 N/A
- --------------------------------------------------------------------------------
Inception* through 5/31/97 5.92 7.56
================================================================================
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
Cumulative Total Return
- --------------------------------------------------------------------------------
Without Sales Charge(1)
================================================================================
Class A (Inception* through 5/31/97) 39.31%
- --------------------------------------------------------------------------------
Class C (Inception* through 5/31/97) 19.96
================================================================================
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the applicable
sales charges with respect to Class A shares or the applicable contingent
deferred sales charges ("CDSC") with respect to Class C shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A shares reflect the deduction
of the maximum initial sales charge of 2.00% and Class C shares reflect the
deduction of a 1.00% CDSC, which applies if shares are redeemed within one
year from initial purchase.
+ Total return is not annualized, as it may not be representative of the total
return for the year.
* Inception dates for Class A and C shares are December 31, 1991 and December
5, 1994, respectively.
5
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance (unaudited)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Class A Shares of the
Smith Barney Intermediate Maturity New York Municipals Fund
vs. Lehman Brothers 10 Year Municipal Bond Index
and Lipper Analytical Services, Inc. Peer Group Average+
- --------------------------------------------------------------------------------
December 1991 -- May 1997
[GRAPHIC]
Smith Barney Lehman Brothers
Intermediate Maturity 10 Year Municipal Lipper Peer
NY Municipals Bond Fund Index Group Average
12/31/91 $ 9,802 $10,000 $10,000
11/92 10,644 10,767 10,685
11/93 11,683 12,028 11,625
11/94 11,219 11,491 11,230
11/95 12,824 13,623 12,796
11/96 13,447 14,394 13,383
5/31/97 13,654 14,637 13,554
+ Hypothetical illustration of $10,000 invested in Class A shares at inception
on December 31, 1991, assuming deduction of the maximum 2.00% sales charge at
the time of investment and reinvestment of dividends and capital gains, if
any, at net asset value through May 31, 1997. The Lehman Brothers 10 Year
Municipal Bond Index is a 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. The index is unmanaged and is
not subject to the same management and trading expenses of a mutual fund. The
Lipper Analytical Services, Inc. Peer Group Average is an average of the
Fund's peer group of mutual funds (23 funds as of May 31, 1997) investing in
intermediate maturity New York tax-exempt bonds. The performance of the
Fund's other classes may be greater or less than the Class A shares'
performance indicated on this chart, depending on whether greater or lesser
sales charges and fees were incurred by shareholders investing in the other
classes.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and
redemption values may be more or less than the original cost. No adjustment
has been made for shareholder tax liability on dividends or capital gains.
6
<PAGE>
- --------------------------------------------------------------------------------
Portfolio Highlights (unaudited) May 31, 1997
- --------------------------------------------------------------------------------
Industry Breakdown
[GRAPHIC APPEARS HERE]
Education 15.2%
General Obligation 13.6%
Government Facilities 8.1%
Hospitals 9.9%
Industrial Development 7.2%
Other 14.7%
Pollution Control 4.7%
Transportation 18.1%
Finance 3.4%
Water & Sewer 5.1%
Summary of Investments by Combined Ratings
Standard & Percentage of
Moody's and/or Poor's Total Investments*
=====================================================================
Aaa AAA 43.2%
Aa AA 11.8
A A 21.4
Baa BBB 18.8
B B 0.2
NR NR 4.6
-----
100.0%
=====
* 20.0% of total investments were rated by Fitch Investor Services Inc.:
17.9% were A rated and 2.1% were BBB rated.
7
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) May 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
====================================================================================
<S> <C> <C> <C>
Education -- 15.2%
$ 400,000 AAA Albany City School District, Series B,
MBIA-Insured, 6.000% due 12/15/00 $ 419,500
200,000 AAA Canandaigua City School District,
AMBAC-Insured, 6.400% due 6/1/99 208,250
200,000 AAA Central Square Central School District,
FGIC-Insured, 6.500% due 6/15/99 208,750
1,000,000 A++ City University of New York COP,
John Jay College, 6.000% due 8/15/06 1,038,750
2,000,000 AAA New York Educational Construction Fund,
Series A, MBIA-Insured, 6.500% due 4/1/04 (a) 2,202,500
New York State Dormitory Authority, Revenue Bonds:
1,000,000 AAA Barnard College, AMBAC-Insured, 5.250% due 7/1/16 958,750
500,000 AAA College and University Educational Loan,
MBIA-Insured, 6.200% due 7/1/01 (b) 530,625
750,000 AA Manhattan College, Asset-Insured, 5.900% due 7/1/02 786,563
985,000 AAA New York State Urban Development Corp.,
(Higher Education Project), MBIA-Insured, 5.300%
due 4/1/04 1,009,625
100,000 AAA Wappingers Central School District, AMBAC-Insured,
6.250% due 12/1/99 104,500
- ------------------------------------------------------------------------------------
7,467,813
- ------------------------------------------------------------------------------------
Finance -- 3.4%
City of Troy, Municipal Assistance Corp.,
MBIA-Insured:
1,080,000 AAA Series A, 5.000% due 1/15/08 1,069,200
1,990,000 AAA Series B, zero coupon due 1/15/19 589,538
- ------------------------------------------------------------------------------------
1,658,738
- ------------------------------------------------------------------------------------
General Obligation -- 13.6%
Buffalo GO:
100,000 AAA FGIC-Insured, 5.800% due 2/1/00 103,375
205,000 AAA Series A, MBIA-Insured, 5.900% due 4/1/01 214,481
385,000 AAA Series B, MBIA-Insured, 5.900% due 4/1/01 402,806
250,000 AAA Erie County Public Improvement Project, GO,
FGIC-Insured, 5.500% due 1/15/00 255,937
495,000 Baa* Jamestown GO, Series A, 7.000% due 3/15/00 521,606
1,000,000 Aa* Monroe County Public Improvement Project GO,
Series A, 6.000% due 3/1/18 1,055,000
1,000,000 AAA Nassau County GO, Combined Sewer District, Series E,
MBIA-Insured, 5.400% due 5/1/10 1,020,000
New York City GO:
2,000,000 A++ Series A, 7.000% due 8/1/04 (a) 2,192,500
500,000 A++ Series B, 6.250% due 10/1/01 522,500
Oyster Bay GO, FGIC-Insured:
200,000 AAA Series B, 6.400% due 2/1/99 206,500
150,000 AAA Series C, 6.300% due 10/1/99 156,562
- ------------------------------------------------------------------------------------
6,651,267
- ------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
====================================================================================
<S> <C> <C> <C>
Government Facilities -- 8.1%
New York State Urban Development, Correctional
Facilities:
$1,900,000 A++ Series A, 6.500% due 1/1/09 $2,071,000
Series 3:
1,230,000 A++ 6.700% due 1/1/99 1,271,513
595,000 A++ 6.800% due 1/1/00 625,494
- ------------------------------------------------------------------------------------
3,968,007
- ------------------------------------------------------------------------------------
Hospitals -- 9.9%
100,000 B1* Monroe County IDA, Genesee Hospital, Series A,
6.500% due 11/1/99 101,750
New York State Dormitory Authority, Revenue
Bonds:
270,000 AA Genesee Valley, Series B, FHA-Insured,
6.300% due 8/1/02 290,925
1,000,000 BBB+ Mental Health Services, 6.000% due 2/15/12 1,037,500
500,000 BBB++ Nyack Hospital, Series A, 6.250% due 7/1/13 511,875
New York State Medical Care Facilities, Revenue
Bonds:
725,000 BBB+ Health Services Facility, 6.100% due 2/15/02 759,439
815,000 AAA Hospital and Nursing Home, Series A,
FHA-Insured, 5.500% due 8/15/04 840,469
Methodist Hospital, FHA-Insured:
250,000 BBB Secured Hospital, Series 1991A, 6.625% due 8/15/98 255,625
575,000 AA Series A, 6.000% due 8/15/02 605,906
460,000 AA Series C, 5.900% due 8/15/02 477,250
- ------------------------------------------------------------------------------------
4,880,739
- ------------------------------------------------------------------------------------
Housing: Multi-Family -- 3.2%
1,000,000 AA New York State Housing Corp., (Battery Park City
Project), 6.000% due 11/1/03 1,047,500
500,000 Aa* North Tonawanda Housing Development Corp.,
Mortgage Revenue, Bishop Gibbons, Series B,
FHA-Insured, 6.350% due 12/15/02 523,125
- ------------------------------------------------------------------------------------
1,570,625
- ------------------------------------------------------------------------------------
Industrial Development -- 7.2%
500,000 BBB++ New York City IDA, Civil Facilities Revenue,
(YMCA Greater NY Project), 6.000% due 8/1/07 516,250
750,000 A+ ++ United Nations Development Corp., Series A,
6.000% due 7/1/12 764,062
Westchester County IDA :
1,000,000 AAA Resource Recovery Revenue, (Westchester Resco Co.
Project), AMBAC-Insured, 6.000% due 7/1/09 (b) 1,052,500
1,170,000 NR Revenue Bonds, (AGR Realty Company Project),
5.750% due 1/1/02 1,194,863
- ------------------------------------------------------------------------------------
3,527,675
- ------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
====================================================================================
<S> <C> <C> <C>
Life Care Systems -- 3.0%
$ 750,000 AA New York State Dormitory Authority Revenue,
Hebrew Home for the Aged, FHA-Insured,
5.625% due 2/1/17 $ 759,375
700,000 AAA New York State Medical Care Facilities Finance Agency,
Long-Term Health Care Facilities,
Series D, CGIC-Insured, 5.750% due 11/1/02 735,875
- ------------------------------------------------------------------------------------
1,495,250
- ------------------------------------------------------------------------------------
Miscellaneous -- 4.1%
500,000 A Capital District Youth Center Lease Revenue, LOC Key Bank,
6.000% due 2/1/17 498,125
300,000 A++ New York State COP, 6.900% due 3/1/98 305,562
New York State Municipal Bond Bank Agency,
Special Program Revenue:
925,000 BBB+ Buffalo, Series A, 6.500% due 3/15/00 962,000
250,000 A+ Rochester, Series A, 6.300% due 3/15/00 258,750
- ------------------------------------------------------------------------------------
2,024,437
- ------------------------------------------------------------------------------------
Pollution Control -- 4.7%
New York State Environmental Facilities Corp., Series A:
500,000 AAA PCR, 5.950% due 3/15/02 528,125
155,000 Baa1* Resource Recovery Revenue, (Huntington Project),
7.375% due 10/1/99 (b) 161,394
245,000 Baa* North Country Development Authority, Solid Waste
Management Systems Revenue,
Series A, 6.500% due 7/1/01 253,575
Oneida-Herkimer Solid Waste Management Authority:
530,000 Baa* 5.900% due 4/1/98 533,678
800,000 Baa* 6.300% due 4/1/01 822,000
- ------------------------------------------------------------------------------------
2,298,772
- ------------------------------------------------------------------------------------
Pre-Refunded(c) -- 0.6%
295,000 AAA North Country, Development Authority, Solid Waste
Management Systems Revenue, Series A,
(Call 7/1/99 @ 102), 6.500% due 7/1/01 313,438
- ------------------------------------------------------------------------------------
Public Facilities -- 1.3%
600,000 AAA Puerto Rico Public Buildings Authority, Public Education
and Health Facilities Refunding, Series K,
FGIC-Insured, 6.000% due 7/1/01 637,500
- ------------------------------------------------------------------------------------
Transportation -- 18.1%
750,000 AAA Government of Guam, Limited Obligation, Highway
Revenue, Series A, FSA-Insured, 5.900% due 5/1/02 794,062
Guam Transportation Authority Revenue, Series A:
560,000 BBB 5.700% due 10/1/01 571,200
300,000 BBB 5.900% due 10/1/02 308,625
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) May 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING SECURITY VALUE
====================================================================================
<S> <C> <C> <C>
Transportation -- 18.1% (continued)
Metropolitan Transportation Authority, New York Service
Contract, Transit Facilities, Series 5:
$ 735,000 Baa1* 6.100% due 7/1/98 $ 749,883
200,000 Baa1* 6.250% due 7/1/99 207,250
1,000,000 Baa1* New York State Thruway Authority, Service Contract,
Local Highway and Bridges, 6.000% due 4/1/02 1,040,000
600,000 AAA Niagara Falls Bridge Commission Toll Revenue, Series B,
FGIC-Insured, 5.250% due 10/1/15 586,500
2,000,000 AAA Niagara Frontier Transportation Authority, Greater Buffalo
International Airport, Series B, AMBAC-Insured,
5.750% due 4/1/04(b) 2,077,500
1,000,000 NR Port Authority of New York & New Jersey, Revenue
Bonds, 6.750% due 10/1/11 (b) 1,053,750
920,000 A Syracuse COP, Hancock International Airport,
6.300% due 1/1/02(b) 983,250
500,000 AAA Triborough Bridge & Tunnel Authority, Special Obligation
Refunding, Series A, MBIA-Insured,
6.100% due 1/1/00 520,625
- ------------------------------------------------------------------------------------
8,892,645
- ------------------------------------------------------------------------------------
Utilities -- 2.5%
250,000 Aa* New York State Power Authority and General Purpose
Revenue, Series Z, 5.850% due 1/1/00 258,437
1,000,000 AAA Puerto Rico Electric Power Authority, Power Revenue,
Series AA, MBIA-Insured, 5.375% due 7/1/27 971,250
- ------------------------------------------------------------------------------------
1,229,687
- ------------------------------------------------------------------------------------
Water & Sewer -- 5.1%
1,390,000 AAA Suffolk County Southwest Sewer District GO, MBIA-Insured,
6.000% due 2/1/07 1,492,512
1,000,000 AAA Suffolk County Water Authority, Waterworks Revenue,
MBIA-Insured, 5.100% due 6/1/09 998,750
- ------------------------------------------------------------------------------------
2,491,262
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $47,526,075**) $49,107,855
====================================================================================
</TABLE>
(a) Security segregated by Custodian for open purchase commitment.
(b) Income from these issues is considered a preference item for purposes of
calculating the alternative minimum tax.
(c) Bonds are escrowed with U.S. Government securities and are considered by the
Manager to be triple-A rated even if the issuer has not applied for new
ratings.
++ Fitch Investor Services Inc. rating.
** Aggregate cost for Federal income tax purposes is substantially the
same.
See pages 12 and 13 for definition of ratings and certain security
descriptions.
See Notes to Financial Statements.
11
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings
- --------------------------------------------------------------------------------
All ratings are by Standard & Poor's Ratings Service ("Standard & Poor's"),
except those identified by an asterisk (*) are rated by Moody's Investors
Service Inc. ("Moody's"). The definitions of the applicable rating symbols are
set forth below:
Standard & Poor's -- Ratings from "AA" to "BBB" may be modified by the addition
of a plus (+) or minus (-) sign to show relative standings within the major
rating categories.
AAA -- Bonds rated "AAA" have the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and repay
principal and differ from the highest rated issue only in a small degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
Moody's -- Numerical modifiers 1, 2 and 3 may be applied to each generic rating
from "Aa" to "B," where 1 is the highest and 3 the lowest ranking within its
generic category.
Aaa -- Bonds that are rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa -- Bonds that are rated "Aa" are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A -- Bonds that are rated "A" possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa -- Bonds that are rated "Baa" are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba -- Bonds that are rated "Ba" are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B -- Bonds that are rated "B" generally lack characteristics of desirable
investments. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
NR -- Indicates that the bond is not rated by Standard & Poor's or Moody's.
12
<PAGE>
- --------------------------------------------------------------------------------
Security Descriptions
- --------------------------------------------------------------------------------
ABAG -- Association of Bay Area Governments
AIG -- American International Guaranty
AMBAC -- American Municipal Bond Assurance Corporation
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance Company
COP -- Certificate of Participation
EDA -- Economic Development Authority
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
FLAIRS -- Floating Adjustable Interest Rate Securities
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCR -- Pollution Control Revenue
RIBS -- Residual Interest Bonds
VA -- Veterans Administration
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
13
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) May 31, 1997
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $47,526,075) $49,107,855
Interest receivable 815,594
Receivable from investment adviser 93,979
- --------------------------------------------------------------------------------
Total Assets 50,017,428
- --------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 209,186
Payable to bank 80,762
Distribution fees payable 1,855
Accrued expenses 21,436
- --------------------------------------------------------------------------------
Total Liabilities 313,239
- --------------------------------------------------------------------------------
Total Net Assets $49,704,189
================================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 5,922
Capital paid in excess of par value 49,949,199
Undistributed net investment income 1,089
Accumulated net realized loss from security transactions (1,833,801)
Net unrealized appreciation of investments 1,581,780
- --------------------------------------------------------------------------------
Total Net Assets $49,704,189
================================================================================
Shares Outstanding:
Class A 5,743,662
------------------------------------------------------------------------------
Class C 178,717
------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $8.39
------------------------------------------------------------------------------
Class C* $8.39
------------------------------------------------------------------------------
Class A Maximum Public Offering Price Per Share
(net asset value plus 2.04% of net asset value per share) $8.56
================================================================================
* Redemption price is NAV of Class C shares reduced by a 1.00% CDSC if
shares are redeemed within the first year of purchase.
See Notes to Financial Statements.
14
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended May 31, 1997
INVESTMENT INCOME:
Interest $ 1,388,451
- --------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 2) 74,545
Administration fees (Note 2) 49,697
Distribution fees (Note 2) 38,665
Shareholder communications 20,000
Trustees' fees 16,100
Registration fees 15,000
Shareholder and system servicing fees 14,843
Audit and legal 10,800
Pricing service fees 4,623
Custody 1,612
Amortization of deferred organization costs 1,003
Other 1,798
- --------------------------------------------------------------------------------
Total Expenses 248,686
Less: Investment advisory and administration fee waivers (Note 2) (85,618)
- --------------------------------------------------------------------------------
Net Expenses 163,068
- --------------------------------------------------------------------------------
Net Investment Income 1,225,383
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 5):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 12,023,157
Cost of securities sold 11,993,888
- -------------------------------------------------------------------------------
Net Realized Gain 29,269
- -------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 2,071,461
End of period 1,581,780
- --------------------------------------------------------------------------------
Decrease in Net Unrealized Appreciation (489,681)
- --------------------------------------------------------------------------------
Net Loss on Investments (460,412)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 764,971
================================================================================
See Notes to Financial Statements.
15
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Six Months Ended May 31, 1997 (unaudited)
and the Year Ended November 30, 1996
1997 1996
================================================================================
OPERATIONS:
Net investment income $ 1,225,383 $ 2,502,414
Net realized gain (loss) 29,269 (75,989)
Decrease in net unrealized appreciation (489,681) (60,433)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 764,971 2,365,992
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM (NOTE 3):
Net investment income (1,230,837) (2,496,331)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (1,230,837) (2,496,331)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares 4,180,175 4,707,959
Net asset value of shares issued
for reinvestment of dividends 696,774 1,697,310
Cost of shares reacquired (5,253,570) (8,689,089)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Fund Share Transactions (376,621) (2,283,820)
- --------------------------------------------------------------------------------
Decrease in Net Assets (842,487) (2,414,159)
NET ASSETS:
Beginning of period 50,546,676 52,960,835
- --------------------------------------------------------------------------------
End of period* $ 49,704,189 $ 50,546,676
================================================================================
* Includes undistributed net investment income of: $1,089 $6,543
================================================================================
See Notes to Financial Statements.
16
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Intermediate Maturity New York Municipals Fund ("Fund") is a
separate investment fund of the Smith Barney Investment Trust ("Trust"). The
Trust, a Massachusetts business trust, is registered under the Investment
Company Act of 1940, as amended, as a non-diversified, open-end management
investment company and consists of this Fund and the Smith Barney Intermediate
Maturity California Municipals Fund. The financial statements and financial
highlights for this other fund is presented in a separate semi-annual report.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on the trade date; (b) securities are
valued at the mean between the quoted bid and ask prices by an independent
pricing service that are based on transactions in municipal obligations,
quotations from municipal bond dealers, market transactions in comparable
securities and various relationships between securities; (c) securities maturing
within 60 days are valued at cost plus accreted discount, or minus amortized
premium, which approximates value; (d) gains or losses on the sale of securities
are calculated by using the specific identification method; (e) interest income,
adjusted for amortization of premium and accretion of original issue discount,
is recorded on the accrual basis; market discount is recognized upon the
disposition of the security; (f) direct expenses are charged to the Fund and
each class; investment advisory fees and general fund expenses are allocated on
the basis of relative net assets; (g) dividends and distributions to
shareholders are recorded on the ex-dividend date; (h) the Fund intends to
comply with the applicable provisions of the Internal Revenue Code of 1986, as
amended, pertaining to regulated investment companies and to make distributions
of taxable income sufficient to relieve it from substantially all Federal income
and excise taxes; and (i) estimates and assumptions are required to be made
regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
In addition, organization costs have been deferred and have been amortized on
a straight line basis over a five year period, beginning with the commencement
of the Fund's operations in December 1991. Therefore, as of May 31, 1997, the
amortization of the deferred organization costs had been completed.
17
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISORY AGREEMENT, ADMINISTRATION
AGREEMENT AND OTHER TRANSACTIONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc. ("SBH"), acts as investment adviser to the Fund. The Fund
pays SBMFM an advisory fee calculated at an annual rate of 0.30% of the average
daily net assets. This fee is calculated daily and paid monthly. For the six
months ended May 31, 1997, SBMFM waived $51,371 of its investment advisory fee.
SBMFM also acts as the Fund's administrator for which the Fund pays a fee
calculated at the annual rate of 0.20% of the average daily net assets. This fee
is calculated daily and paid monthly. For the six months ended May 31, 1997,
SBMFM waived $34,247 of its administration fee.
Smith Barney Inc. ("SB"), another subsidiary of SBH, acts as distributor of
Fund shares. For the six months ended May 31, 1997, SB received sales charges of
approximately $98,000 on purchases of the Fund's Class A shares.
There is a contingent deferred sales charge ("CDSC") of 1.00% on Class C
shares, which applies if redemption occurs within one year from initial
purchase. For the six months ended May 31, 1997, CDSCs paid to SB for Class C
shares were approximately $1,000.
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to
its Class A and C shares, calculated at the annual rate of 0.15% of the average
daily net assets for each respective class. In addition, the Fund pays a
distribution fee with respect to its Class C shares calculated at the annual
rate of 0.20% of the average daily net assets. For the six months ended May 31,
1997, total Distribution Plan fees incurred were:
Class A Class C
================================================================================
Distribution Plan Fees $36,228 $2,437
================================================================================
All officers and one Trustee of the Fund are employees of SB.
18
<PAGE>
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
3. EXEMPT-INTEREST DIVIDENDS AND OTHER DISTRIBUTIONS
The Fund intends to satisfy conditions that will enable interest from
municipal securities, which is exempt from regular Federal income tax and from
designated state income taxes, to retain such tax-exempt status when distributed
to the shareholders of the Fund.
Capital gains distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
4. FUND CONCENTRATION
Since the Fund invests primarily in obligations of issuers within New York, it
is subject to possible concentration risk, associated with economic, political
or legal developments or industrial or regional matters specifically affecting
New York.
5. INVESTMENTS
For the six months ended May 31, 1997, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding short-
term securities) were as follows:
================================================================================
Purchases $12,033,057
- --------------------------------------------------------------------------------
Sales 12,023,157
================================================================================
At May 31, 1997, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
================================================================================
Gross unrealized appreciation $1,585,491
Gross unrealized depreciation (3,711)
- --------------------------------------------------------------------------------
Net unrealized appreciation $1,581,780
================================================================================
6. CAPITAL LOSS CARRYFORWARD
At November 30, 1996, the Fund had, for Federal income tax purposes,
approximately $1,863,000 of loss carryforwards available to offset any future
capital gains. To the extent that these carryforward losses are used to offset
capital gains, it is probable that the gains so offset will not be distributed.
The amount and year of the expiration for each carryforward loss is indicated
below:
2002 2003 2004
======================================================================
Carryforward Amounts $1,450,000 $337,000 $76,000
======================================================================
19
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
7. Shares of Beneficial Interest
As of May 31, 1997, the Fund had an unlimited number of shares of beneficial
interest authorized with a par value of $0.001 per share. The Fund has the
ability to issue multiple classes of shares. Each share of a class represents an
identical interest and has the same rights, except that each class bears certain
direct expenses, including those specifically related to the distribution of its
shares.
At May 31, 1997, total paid-in capital amounted to the following for each
class:
Class A Class C
================================================================================
Total Paid-in Capital $48,456,494 $1,498,627
================================================================================
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 1997 November 30, 1996
---------------------- ------------------------
Shares Amount Shares Amount
========================================================================================
<S> <C> <C> <C> <C>
Class A
Shares sold 444,493 $ 3,737,141 452,026 $ 3,806,875
Shares issued on reinvestment 80,418 672,320 198,862 1,660,796
Shares redeemed (608,481) (5,106,273) (1,024,421) (8,544,418)
- ----------------------------------------------------------------------------------------
Net Decrease (83,570) $ (696,812) (373,533) $(3,076,747)
========================================================================================
Class C
Shares sold 52,756 $ 443,034 107,515 $ 901,084
Shares issued on reinvestment 2,924 24,454 4,379 36,514
Shares redeemed (17,686) (147,297) (17,498) (144,671)
- ----------------------------------------------------------------------------------------
Net Increase 37,994 $ 320,191 94,396 $ 792,927
========================================================================================
</TABLE>
20
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
Class A Shares 1997(1) 1996 1995 1994 1993 1992(2)
==================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $8.47 $8.48 $7.80 $8.54 $8.18 $7.90
- --------------------------------------------------------------------------------------------------
Income (Loss) From
Operations:
Net investment income (3) 0.21 0.41 0.41 0.40 0.40 0.38
Net realized and
unrealized gain (loss) (0.08) (0.01) 0.68 (0.72) 0.38 0.28
- --------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 0.13 0.40 1.09 (0.32) 0.78 0.66
- --------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.21) (0.41) (0.41) (0.40) (0.40) (0.38)
Net realized gains -- -- -- (0.02) (0.02) --
- --------------------------------------------------------------------------------------------------
Total Distributions (0.21) (0.41) (0.41) (0.42) (0.42) (0.38)
- --------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $8.39 $8.47 $8.48 $7.80 $8.54 $8.18
- --------------------------------------------------------------------------------------------------
Total Return 1.54%++ 4.85% 14.31% (3.97)% 9.76% 8.59%++
- --------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $48,205 $49,355 $52,568 $62,090 $67,230 $24,543
- --------------------------------------------------------------------------------------------------
Ratios to Average
Net Assets:
Expenses (3) 0.65%+ 0.66% 0.65% 0.65% 0.65% 0.65%+
Net investment income 4.94+ 4.86 5.01 4.77 4.59 4.95+
- --------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 24% 67% -- 68% 22% 68%
==================================================================================================
</TABLE>
(1) For the six months ended May 31, 1997 (unaudited).
(2) For the period from December 31, 1991 (inception date) to November 30, 1992.
(3) The investment adviser has waived all or part of its fees for the six months
ended May 31, 1997, the four years ended November 30, 1996 and the period
ended November 30, 1992. If such fees were not waived, the per share effect
on net investment income and the expense ratios would have been as follows:
<TABLE>
<CAPTION>
Per Share Decreases to Expense Ratios
Net Investment Income Without Fee Waivers
---------------------------------------- ----------------------------------------
1997 1996 1995 1994 1993 1992 1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $0.01 $0.04 $0.03 $0.03 $0.04 $0.06 1.00%+ 1.08% 0.97% 0.98% 1.10% 1.45%+
</TABLE>
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
21
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of each class of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
Class C Shares 1997(1) 1996 1995(2)
================================================================================
<S> <C> <C>
Net Asset Value, Beginning of Period $ 8.47 $ 8.48 $ 7.87
- --------------------------------------------------------------------------------
Income From Operations:
Net investment income (3) 0.20 0.39 0.38
Net realized and unrealized gain (loss) (0.08) (0.01) 0.61
- --------------------------------------------------------------------------------
Total Income From Operations 0.12 0.38 0.99
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.20) (0.39) (0.38)
- --------------------------------------------------------------------------------
Total Distributions (0.20) (0.39) (0.38)
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 8.39 $ 8.47 $ 8.48
- --------------------------------------------------------------------------------
Total Return 1.44%++ 4.64% 13.01%++
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $1,499 $1,192 $393
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (3) 0.87%+ 0.88 0.86%+
Net investment income 4.72+ 4.64 4.74+
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 24% 67% --
================================================================================
</TABLE>
(1) For the six months ended May 31, 1997 (unaudited).
(2) For the period from December 5, 1994 (inception date) to November 30, 1995.
(3) The investment adviser has waived all or part of its fees for the six months
ended May 31, 1997, the year ended November 30, 1996 and the period ended
November 30, 1995. If such fees were not waived, the per share effect on net
investment income and expense ratios would have been as follows:
Per Share Decreases to Expense Ratios
Net Investment Income Without Fee Waivers
---------------------- -------------------
1997 1996 1995 1997 1996 1995
---- ---- ---- ---- ---- ----
Class C $0.01 $0.02 $0.03 1.22%+ 1.30% 1.19%+
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
22
<PAGE>
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<PAGE>
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<PAGE>
SMITH BARNEY
INTERMEDIATE
MATURITY NEW YORK
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, Chairman
Cornelius C. Rose, Jr.
James J. Crisona, Emeritus
Officers
Heath B. McLendon
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Peter M. Coffey
Vice President and
Investment Officer
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
SMITH BARNEY
- ---------------------------------
A Member of TravelersGroup [LOGO]
Investment Adviser and Administrator
Smith Barney Mutual Funds
Management Inc.
Distributor
Smith Barney Inc.
Custodian
PNC Bank, N.A.
Shareholder
Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of the shareholders of
Smith Barney Intermediate Maturity New York Municipals Fund. It is not
authorized for distribution to prospective investors unless accompanied or
preceded by a current Prospectus for the Fund, which contains information
concerning the Fund's investment policies and expenses as well as other
pertinent information.
SMITH BARNEY
INTERMEDIATE MATURITY
NEW YORK
MUNICIPALS FUND
388 Greenwich Street
New York, New York 10013
FD2401 7/97
