[GRAPHIC OMITTED]
Smith Barney
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INTERMEDIATE
MUNICIPAL FUND, INC.
Semi-Annual Report
June 30, 2000
<PAGE>
Smith Barney
Intermediate
Municipal
Fund, Inc.
[PHOTO OMITTED] [PHOTO OMITTED]
Heath B. McLendon Peter M. Coffey
Chairman Vice President
Dear Shareholder:
We are pleased to provide you with the semi-annual report for the Smith Barney
Intermediate Municipal Fund, Inc. ("Fund") for the period ended June 30, 2000.
During the period, the Fund distributed income dividends totaling $0.27 per
share. The table below shows the annualized distribution rate and six-month
total return based on the Fund's net asset value ("NAV") per share and its
American Stock Exchange ("AMEX") closing price:(1)
Price Annualized Six-Month
Per Share Distribution Rate(2) Total Return(2)
---------------- -------------------- ---------------
$10.00 (NAV) 5.40% 4.29%
$8.875 (AMEX) 6.08% 9.36%
The Fund had a total return based on NAV of 4.29% for the six months ended June
30, 2000. In comparison, the Lipper Inc. ("Lipper") peer group of closed-end
municipal bond funds returned 4.00% for the same period. (Lipper is major
fund-tracking organization.)
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(1) The NAV is calculated by subtracting total liabilities from the closing
value of all securities held by the Fund (plus all other assets) and
dividing the result (total net assets) by the total number of shares
outstanding. The NAV fluctuates with the changes in the market price of
the securities in which the Fund has invested. However, the price at which
an investor may buy or sell shares of the Fund is at its market (AMEX)
price as determined by supply and demand.
(2) Total returns are based on changes in NAV or the market value,
respectively. Total returns assume the reinvestment of all dividends
and/or capital gains distributions in additional shares. Annualized
distribution rate is the Fund's current monthly income dividend rate,
annualized, and then divided by the NAV or the market value noted in this
report. The annualized distribution rate assumes a current monthly income
dividend rate of $0.045 for twelve months. This rate is as of July 31,
2000 and is subject to change. The important difference between a total
return and an annualized distribution rate is that the total return takes
into consideration a number of factors including the fluctuation of the
NAV or the market value during the period reported. The NAV fluctuation
includes the effects of unrealized appreciation or depreciation in the
Fund. Accordingly, since an annualized distribution rate only reflects the
current monthly income dividend rate annualized, it should not be used as
the sole indicator to judge the return you receive from your Fund
investment. Past performance is not indicative of future results.
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Smith Barney Intermediate Municipal Fund, Inc. 1
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Special Shareholder Notice
On June 23, 2000, the Board of Directors of Smith Barney Intermediate Municipal
Fund, Inc. and the Board of Directors of Smith Barney Municipal Fund, Inc. each
announced their unanimous approval of a proposed plan to combine Smith Barney
Municipal Fund, Inc. (AMEX: SBT) with and into Smith Barney Intermediate
Municipal Fund, Inc. (AMEX: SBI).
In the transaction, SBI will acquire the assets and stated liabilities of SBT in
exchange for shares of SBI. Under the Plan of Reorganization, holders of common
stock of SBT will receive full and fractional shares of SBI common stock, with
an aggregate net asset value equal to the net asset value of their SBT common
stock, computed based on the net asset value of each fund as of the last trading
day prior to the scheduled closing date of October 13, 2000.
The close of business on July 28, 2000, is the record date for the determination
of shareholders of each Fund eligible to vote at the Special Meetings of
Shareholders scheduled for October 11, 2000, subject to such postponements as
the Boards deem appropriate.
The combination of SBT and SBI is subject to the approval of the shareholders of
each Fund, as well as various other customary closing conditions, including the
receipt of legal opinions that the transaction will qualify as a tax-free
reorganization. SBI, the surviving Fund, will continue to operate within the
parameters of its investment objective of providing shareholders with a high
level of current income exempt from regular federal income taxes consistent with
prudent investing. The Fund seeks to maintain a dollar-weighted average maturity
between three and 10 years, and invests at least two-thirds of its total assets
in municipal securities rated in the three highest rating categories at the time
of investment.
SBT invests primarily in investment grade municipal debt securities with
remaining maturities of less than fifteen years. Following the combination with
SBT, SBI's larger size may benefit shareholders through enhanced liquidity in
the secondary market and a lower expense ratio.
Investment Strategy
The Fund's investment objective is to provide as high a level as possible of
current income exempt from federal income taxes.(3) We continue to follow an
investment strategy that emphasizes high-quality, high coupon issues. The Fund
pursues this objective by investing in a diversified portfolio of municipal
securities which we believe do not involve undue risk to income or principal.
In accordance with the Fund's investment policy, the Fund's portfolio is
primarily invested in intermediate-term municipal bonds. At least 80% of its
total assets must be invested in municipal bonds that have remaining maturities
of less
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(3) Please note a portion of the Fund's income may be subject to the
Alternative Minimum Tax ("AMT").
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2 2000 Semi-Annual Report to Shareholders
<PAGE>
than 15 years. We believe that investing in intermediate-term municipal bonds
enables the Fund's portfolio to seek higher yields with only slightly higher
price volatility than short-term municipal securities. Short-term municipal
securities do have a high degree of stability because they are less sensitive to
changing interest rates, however you might be giving up yield potential.
In addition, we raised the credit quality of the portfolio during the period. As
of June 30, 2000, approximately 87% of the Fund's holdings were rated investment
grade(4) and roughly 33% of the Fund's investments were rated triple-A.
A major portion of the Fund's assets were allocated among the following types of
municipal bond issues as of June 30, 2000: hospital bonds (16.5%), education
bonds (13.1%) and multi-family housing bonds (12.0%).
Municipal Bond Market Update
The municipal bond market is being influenced by two conflicting sets of
pressures. On one side is the strong U.S. economy, which is likely to keep the
Federal Reserve Board ("Fed") in a tightening mode throughout the remainder of
2000. On the other side there exists supply and demand pressures which continue
to create shortages in many municipalities and maturities.
The greatest challenge to the bond markets--and to the capital markets in
general--is a U.S. economy which continues to grow, at what some economists
think is an unsustainable rate, without triggering renewed inflationary fears
and pressures. Accordingly, the Fed has shifted to a more aggressive posture to
slow demand to a level that is more in line with the economy's potential
non-inflationary growth rate. The Fed has emphasized that the economic
imbalances resulting from the U.S. demand surge have become more pressing.
Despite recent stock market fluctuations, the broadest indexes remain ahead of
last year's values, suggesting that the wealth effect will diminish only
gradually.
It is important to stress that Fed tightening, and the prospect for additional
tightening, have already caused yields on non-U.S. Treasury taxable bonds to
increase sharply relative to U.S. Treasuries. However, in the municipal market,
patterns have been considerably more favorable. Yields on intermediate- and
long-term maturities are up 35 basis points(5) or so from recent lows, but we do
not expect them to move appreciably higher, for several reasons. First, new
issue supply remains very light by recent standards. New issue volume peaked at
$292 billion in 1998, and dropped to roughly $225 billion in 1999. This year,
issuance is running nearly 30% behind 1999 year-to-date levels.
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(4) Investment grade bonds are those rated Aaa, Aa, A and Baa by Moody's
Investors Service, Inc. or AAA, AA, A and BBB by Standard & Poor's Ratings
Service, or that have an equivalent rating by any nationally recognized
statistical rating organization, or determined by the manager to be of
equivalent quality.
(5) A basis point is 0.01% or one one-hundredth of a percent.
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Smith Barney Intermediate Municipal Fund, Inc. 3
<PAGE>
Second, demand for municipals from individual investors remains extremely
strong. Yields are higher, particularly on short and intermediate maturities,
resulting in part from a continuing lack of demand from institutional buyers.
The third reason for our optimism regarding the municipal bond market relates to
asset reallocation. Many individuals have made massive amounts of money in the
stock market, despite recent weakness. Now, with the technology sector under
considerable pressure and the overall stock market weaker and more volatile, a
very large number of investors are seeking to diversify their risks. In many
cases, they are turning to municipal bonds as an alternative.
Portfolio Update(6)
With the bond markets likely to remain volatile, we continue to favor a gradual
approach into the market. We tend to favor intermediate maturities, where most
of the benefits of the steep positive slope of the municipal yield curve can be
obtained. (The yield curve is the graphical depiction of the relationship
between the yield on bonds of the same credit quality but different maturities).
Average credit quality remained relatively high in the portfolio during the
reporting period. Although quality spreads have widened due to earnings
pressure, especially in hospitals and healthcare-related sectors, the difference
in yield between the highest-quality issues and medium-grade issues is, in our
view, relatively modest. We think our proprietary research enables us to invest
in select medium-term credits for which perceived market risk is greater than
our analysis indicates. Moreover, while no guarantees can be made, we think our
strategy may have the potential to increase income.
During the reporting period, we took advantage of rising interest rates to
generate additional yield in the portfolio. We also wanted to incorporate
additional call protection into the portfolio by selling off some of our higher
coupon bonds with shorter calls, and replacing them with bonds that have similar
high coupon structure, but are not subject to early call. (Callable bonds are
redeemable by the issuer before the scheduled maturity under specific conditions
and at a stated price, which usually begins at a premium to par and declines
annually. Bonds are usually "called" when interest rates fall so significantly
that the issuer can save money by floating new bonds at lower rates.)
One of our objectives in the portfolio is to try to create a built-in income
stream for the long term. To this end, we have generally focused on securities
with high credit quality and good call protection, as we believe they offer good
long-term value. Moreover, we have a fairly long-weighted average life in the
portfolio because we believe that the risk of higher inflation at the present
time is negligible. In addition, we think our greater emphasis on call
protection should provide our shareholders with more consistent income if
interest rates do in fact go down.
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(6) The information provided represents the opinion of the managers and is not
intended to be a forecast of future events, a guarantee of future results
nor investment advice. Further, there is no assurance that certain
securities will remain in or out of the Fund.
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4 2000 Semi-Annual Report to Shareholders
<PAGE>
Municipal Bond Market Outlook
In our view, the Fed has been effective in enacting monetary policy and that
should facilitate a soft landing for the economy, during which growth will slow
just enough to relieve inflation worries, but not enough to threaten a
recession. We think the recent rise in interest rates has created buying
opportunities. While no guarantees can be made, we remain confident that we may
be able to achieve a high level of tax-exempt income, consistent with prudent
investing and close attention to credit quality.
In light of the recent volatility in the fixed-income markets, one surprising
result is clear to us: Long-term municipal bond yields have not changed much in
several months. The relative stability of this asset class should be reassuring
for investors seeking to ride out bond market volatility (as well as higher
volatility in the other major capital markets).
We also believe that Fed monetary policy action should be sufficient to slow the
economy without triggering higher inflation. The good news is that the economy's
"soft landing" is likely to be at a higher annual growth rate than was
previously thought possible due to the possible emergence of a New Economy where
technological advances can spur growth without inflationary pressures.
Although the bond markets remain unsettled, we maintain our positive outlook for
municipal securities for the following reasons:
o Longer intermediate and long maturity yields remain very high relative to
taxable counterparts. For example, some bonds are yielding roughly 95% to
100% of similar maturity U.S. Treasuries;
o The municipal yield curve remains very steeply sloped, even as the U.S.
Treasury yield curve is inverted; and
o When capital markets begin to believe that the Fed has achieved its goal
of easing growth down to non-inflationary levels, bonds could rally and
shortages of bonds with the best coupon structures and call provisions
could eventually surface.
Thank you for investing in the Smith Barney Intermediate Municipal Fund, Inc. We
look forward to continuing to help you pursue your financial goals.
Sincerely,
/s/ Heath B. McLendon /s/ Peter M. Coffey
Heath B. McLendon Peter M. Coffey
Chairman Vice President
August 1, 2000
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Smith Barney Intermediate Municipal Fund, Inc. 5
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Take Advantage of the Fund's Dividend Reinvestment Plan!
Did you know that Fund investors who reinvest their dividends are taking
advantage of one of the most effective wealth-building tools available today?
Systematic investments put time to work for you through the strength of
compounding.
As an investor in the Fund, you can participate in its Dividend Reinvestment
Plan ("Plan"), a convenient, simple and efficient way to reinvest your dividends
and capital gains distributions, if any, in additional shares of the Fund. Below
is a short summary of how the Plan works.
Plan Summary
If you are a Plan participant who has not elected to receive your dividends in
the form of a cash payment, then your dividend and capital gain distributions
will be reinvested automatically in additional shares of the Fund.
The number of common stock shares in the Fund you will receive in lieu of a cash
dividend is determined in the following manner. If the market price of the
common stock is equal to or exceeds the net asset value per share ("NAV") on the
determination date, you will be issued shares by the Fund at a price reflecting
the NAV, or 95% of the market price, whichever is greater.
If the market price is less than the NAV at the time of valuation (the close of
business on the determination date), or if the Fund declares a dividend or
capital gains distribution payable only in cash, PFPC Global Fund Services
("Plan Agent") will buy common stock for your account in the open market.
If the Plan Agent begins to purchase additional shares in the open market and
the market price of the shares subsequently rises above the previously
determined NAV before the purchases are completed, the Plan Agent will attempt
to terminate purchases and have the Fund issue the remaining dividend or
distribution in shares at the greater of the previously determined NAV or 95% of
the market price. In that case, the number of Fund shares you receive will be
based on the weighted average of prices paid for shares purchased in the open
market and the price at which the Fund issues the remaining shares.
A more complete description of the current Plan appears in the section of this
report beginning on page 25. To find out more detailed information about the
Plan and about how you can participate, please call PFPC Global Fund Services at
(800) 331-1710.
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6 2000 Semi-Annual Report to Shareholders
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Schedule of Investments (unaudited) June 30, 2000
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FACE
AMOUNT RATING(a) SECURITY VALUE
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Education -- 13.1%
$1,200,000 AAA Alta Loma, CA School District,
Capital Appreciation, Series A, zero
coupon due 8/1/19 $ 397,500
1,700,000 Aa2* Arizona Educational Lien Revenue, Series B,
7.000% due 3/1/02 (b) 1,742,500
1,805,000 AAA Bastrop, TX ISD, PSFG, zero coupon due 2/15/18 643,031
2,500,000 AAA Chicago, IL Board of Education, Capital
Appreciation, Chicago School of Reform,
Series A, AMBAC-Insured, zero coupon
due 12/1/16 968,750
1,000,000 AAA Franklin, TX Special School District,
Capital Appreciation, FSA-Insured, zero
coupon due 6/1/19 328,750
400,000 Aaa* Joshua, TX Independent School Board,
Capital Appreciation, Series C, PSFG,
zero coupon due 2/15/12 212,000
255,000 AAA Massachusetts Education Loan Authority Issue E,
Series A, AMBAC-Insured, 6.850% due 1/1/04 (b) 263,925
500,000 A* Montana Higher Education Student Assistance
Corp., Student Loan Revenue, 7.050% due
6/1/04, Sinking Fund Average Life 3/1/03 (b) 510,624
1,000,000 Aaa* Nebhelp Inc., Nebraska Revenue, MBIA-Insured,
Series A, 6.200% due 6/1/13 1,042,500
1,000,000 Aaa* Nebraska Income Revenue, Junior Subordinate,
Series A-6, MBIA-Insured, 6.450% due 6/1/18,
Sinking Fund Average Life 8/8/17 (b) 1,041,250
500,000 A3* New England Education Loan Marketing Corp.,
Massachusetts Refunding Student Loan Revenue,
6.900% due 11/1/09 (b) 545,625
500,000 AAA New Haven, CT GO, Series 1992A, 9.250%
due 3/1/02, Sinking Fund Average Life 8/30/00 523,750
1,870,000 A* New Mexico Educational Assistance Foundation,
Student Loan Revenue, Series A-2, 5.950%
due 11/1/07(b) 1,870,000
1,000,000 Aaa* Northwest, TX ISD, Capital Appreciation, PSFG,
zero coupon due 8/15/13 467,500
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10,557,705
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Escrowed to Maturity (c) -- 10.7%
620,000 AAA Illinois Health Facilities Authority Revenue,
(Ravenwood Hospital Medical Center Project),
7.250% due 8/1/06 660,300
310,000 NR Los Angeles, CA Hollywood Presbyterian Medical
Center, 9.625% due 7/1/13, Sinking Fund
Average Life 6/13/08 395,250
775,000 AAA Metropolitan Nashville,TN Airport Authority
Revenue, 7.500% due 7/1/05, Sinking Fund
Average Life 10/14/02 821,500
194,000 AAA New Jersey State Turnpike Authority Revenue
Refunding Bonds, 10.375% due 1/1/03, Sinking
Fund Average Life 1/25/02 209,520
1,355,000 A- New York, NY GO, Series D, 7.300% due 2/1/01 1,377,330
1,855,000 A New York State Urban Development Corp. Revenue,
7.300% due 4/1/01 1,894,994
1,330,000 AAA Ohio State Water Development Authority Revenue,
Safe Water, Series 2, 9.375% due 12/1/10,
Sinking Fund Average Life 10/1/05 1,582,700
See Notes to Financial Statements.
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Smith Barney Intermediate Municipal Fund, Inc. 7
<PAGE>
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Schedule of Investments (unaudited) (continued) June 30, 2000
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FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
Escrowed to Maturity (c) -- 10.7% (continued)
$ 60,000 AAA Salt Lake City, UT Water Conservancy
Distribution Revenue, Series A,
MBIA-Insured, 10.875% due 10/1/02,
Sinking Fund Average Life 5/17/01 $ 64,425
825,000 NR Southwestern Illinios, Development Authority
Hospital Revenue, (Wood River Hospital
Project), 6.875% due 8/1/03,
Sinking Fund Average Life 9/19/01 849,750
125,000 AA Taos County, NM Gross Receipts Tax Revenue,
Asset Guaranty-Insured, 6.125% due 12/1/01,
Sinking Fund Average Life 12/25/00 126,250
650,000 NR Tom Green County, TX Hospital Authority, 7.875%
due 2/1/06 701,188
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8,683,207
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General Obligation -- 6.2%
1,000,000 AA Central Falls, RI GO, Asset Guaranty-Insured,
5.875% due 5/15/15 1,020,000
1,000,000 AAA Chicago, IL GO, AMBAC-Insured, 6.100%
due 1/1/03 1,031,250
660,000 Aaa* East Rochester, NY Union Free School District,
FSA-Insured, 5.700% due 6/15/00 687,225
1,000,000 AA Harvey, IL GO Refunding, Asset Guaranty-Insured,
6.700% due 2/1/09, Sinking Fund Average
Life 2/26/08 1,072,500
145,000 A- New York, NY GO, Series D, 7.300% due 2/1/01 147,290
1,735,000 AAA Palo Duro River Authority, TX Refunding,
CGIC-Insured, zero coupon due 8/1/09 1,075,700
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5,033,965
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Hospital -- 16.5%
1,000,000 BBB- Arkansas Development Finance Authority Revenue,
(Washington Regional Medical Center), 7.000%
due 2/1/15 981,250
1,090,000 BB Colorado Health Facilities Authority Revenue,
Rocky Mountain Adventist, 6.250% due 2/1/04 1,068,200
1,500,000 AA Cumberland County, NC Hospital Facilities
Revenue, Cumberland County Hospital
Systems Inc., 5.250% due 10/1/13 1,436,250
625,000 AA Harris County, TX Health Facilities Development
Corp. Hospital Revenue, (Texas Children's
Hospital Project), Series A, 5.375%
due 10/1/11 612,500
2,000,000 A Hawaii State Department of Budget and Finance,
Special Purpose Mangement Revenue,
Kapiolani Health Care System, 6.400%
due 7/1/13 2,025,000
1,000,000 BBB+ Henderson, NV Health Care Facility Revenue,
(Catholic Healthcare West Project), Series A,
6.200% due 7/1/09 968,750
1,000,000 A2* Indiana Health Facilities Authority Hospital
Revenue Refunding Bonds, St. Anthony
Medical Center, 7.000% due 10/1/06,
Sinking Fund Average Life 10/17/05 1,056,250
535,000 AAA Lima, OH Hospital Revenue, 7.500% due 11/1/06 575,794
700,000 BBB- Louisiana Public Facilities Authority Revenue,
General Health Systems Project, 6.000%
due 11/1/16 690,375
See Notes to Financial Statements.
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8 2000 Semi-Annual Report to Shareholders
<PAGE>
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Schedule of Investments (unaudited) (continued) June 30, 2000
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FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
Hospital -- 16.5% (continued)
$ 510,000 BBB+ Maricopa County, AZ IDA, Health Facilities
Revenue, (Catholic Healthcare West Project),
Series A, 5.250% due 7/1/06 $ 485,775
1,000,000 AAA Maryland Health & Higher Education Facility
Authority Revenue, (Mercy Medical Center
Project), FSA-Insured, 6.500% due 7/1/13,
Sinking Fund Average Life 3/7/11 1,101,250
500,000 AAA Orange County, FL Health Facilities
Authority Revenue, Adventist Health
System/Sunbelt, FSA-Insured, FLAIRS, 6.050%
due 11/15/07 (d) 518,125
1,045,000 BBB+ Rhode Island State Health & Education Building
Corp. Revenue, Roger Williams Hospital
Financing, 5.400% due 7/1/13, Sinking Fund
Average Life 1/23/12 902,619
1,000,000 Baa2* Tomball, TX Hospital Authority Revenue, Tomball
Regional Hospital, 5.750% due 7/1/14 881,250
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13,303,388
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Housing: Multi-Family -- 12.0%
885,000 AA Beaumont, TX Multi-Family Housing Finance,
Regency Place Apartments, Asset
Guaranty-Insured, 7.000% mandatory tender
10/1/03, Sinking Fund Average Life 7/21/03 887,062
535,000 AAA Charlotte, NC Mortgage Revenue Refunding,
Double Oaks Apartment, Series A, FHA-Insured,
7.300% due 11/15/07, Sinking Fund Average
Life 2/24/04 561,080
785,000 AA Hudson County, NJ Improvement Authority,
Multi-Family Housing Revenue Bonds, 6.600%
due 6/1/04, Sinking Fund Average
Life 9/24/02 (b) 810,513
820,000 A2* McMinnville, TN Housing Authority Revenue
Refunding, First Mortgage, Beersheba Heights,
6.000% due 10/1/09 833,325
380,000 AAA Missouri State Housing Development Community
Mortgage Revenue, Series C,
GNMA/FNMA-Collateralized, 7.450% due 9/1/27,
Sinking Fund Average Life 12/9/22 409,925
500,000 NR Montgomery County, PA Redevelopment Authority,
Multi-Family Housing Revenue, Series A,
6.375% due 7/1/12, Sinking Fund Average
Life 1/29/09 504,375
Mount Vernon, IL Elderly Housing Corp., First
Lien Revenue Bonds, Section 8 Assisted,
Series 1979:
160,000 Ba3* 7.875% due 4/1/01 160,386
170,000 Ba3* 7.875% due 4/1/02 170,065
185,000 Ba3* 7.875% due 4/1/03 184,945
200,000 Ba3* 7.875% due 4/1/04 200,000
215,000 Ba3* 7.875% due 4/1/05 214,942
235,000 Ba3* 7.875% due 4/1/06 234,937
250,000 Ba3* 7.875% due 4/1/07 249,920
270,000 Ba3* 7.875% due 4/1/08 270,000
710,000 AAA San Jose, CA Multi-Family Housing, (County
Brook Project), FNMA-Collateralized, 6.500%
mandatory tender 4/1/02 721,538
See Notes to Financial Statements.
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Smith Barney Intermediate Municipal Fund, Inc. 9
<PAGE>
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Schedule of Investments (unaudited) (continued) June 30, 2000
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FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
Housing: Multi-Family -- 12.0% (continued)
$ 755,000 Aa2* Streamwood, IL Multi-Family Housing Revenue,
(Southgate Project), FHA-Insured, 6.200%
due 11/1/07 $ 779,643
1,000,000 NR Texas State Department of Housing & Community
Affairs, Home Management Revenue, Series C-2,
Variable Rate due 7/2/24 1,107,500
705,000 NR Tulsa, OK Housing Assistance Corp. Multi-Family
Revenue, 7.250% due 10/1/17, Sinking Fund
Average Life 7/16/04 727,913
675,000 AAA Washington County, OR Housing Authority,
Multi-Family Housing Revenue, (Terrace View
Project), FNMA-Collateralized, 5.500% due
12/1/17 (b) 638,719
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9,666,788
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Housing: Single Family -- 4.1%
920,000 A+ Massachusetts State HFA, Single-Family,
Series 38, 7.200% due 12/1/26 (b) 960,250
245,000 AAA St. Louis County, MO Single-Family Mortgage
Revenue, MBIA-Insured, 6.750% due 4/1/10 245,225
1,000,000 AA+ Virginia State Housing Development Authority
Commonwealth Mortgage, Series H, 6.100%
due 7/1/03 1,026,250
1,060,000 AA Wisconsin Housing & Education Development
Authority, Home Ownership Revenue, 6.350%
due 3/1/01 1,071,035
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3,302,760
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Industrial Development -- 4.9%
400,000 Aa3* Cambria County, PA Industrial Development
Authority, Series A-1, Variable Rate
due 12/1/28 400,000
1,000,000 A+ Kanawha, WV Commerial Development Revenue,
(May Department Store Project), 6.500% due
6/1/03 1,037,500
1,300,000 AA Massachusetts State Development Finance
Agency Revenue, Worcester Redevelopment
Authority Issue, Guaranty-Insured, 6.000%
due 6/1/24 1,314,625
1,000,000 BB+ Oklahoma Developmental Finance Authority
Revenue, Hillcrest Healthcare System,
Series A, 5.625% due 8/15/19 800,000
500,000 BBB Schuylkill County, PA Industrial Development
Authority Revenue, Pine Groove Landfill
Inc., 5.100% due 10/1/19 435,000
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3,987,125
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Life Care -- 2.3%
945,000 NR Coweta County, GA Development Authority Revenue,
(Care-Pointe Project), Series A, 6.750%
due 7/1/10 865,856
980,000 AAA Massachusetts State Industrial Finance Agency
Assisted Living Facility Revenue, (Arbors at
Amherst Project), GNMA-Collateralized, 5.750%
due 6/20/17 991,025
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1,856,881
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Miscellaneous -- 4.9%
1,000,000 NR Barona Band of Mission Indians, CA, 8.250%
due 1/1/20 1,015,000
1,000,000 BBB- Clarksville, TN Natural Gas Acquisition Corp.
Gas Revenue, Series A, 7.500% due 11/1/04 1,024,530
See Notes to Financial Statements.
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10 2000 Semi-Annual Report to Shareholders
<PAGE>
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Schedule of Investments (unaudited) (continued) June 30, 2000
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FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
Miscellaneous -- 4.9% (continued)
$ 1,000,000 A Illinois Development Finance Authority Revenue,
City of East St. Louis, 6.875% due 11/15/05,
Sinking Fund Average Life 7/26/03 $ 1,058,750
795,000 A South Dakota Economic Development Finance
Authority, APA Optics, Series A, 6.750%
due 4/1/16, Sinking Fund Average
Life 7/7/13 (b) 842,700
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3,940,980
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Pollution Control -- 5.2%
890,000 B1* Altantic City, NJ Utility Authority Solid Waste
Revenue, 7.000% due 3/1/02, Sinking Fund
Average Life 10/1/00 885,550
1,000,000 Aa3* Brazos River, TX Navigation Harbor District,
Brazonia County, PCR, (BASF Corp. Project),
6.750% due 2/1/10 1,093,750
1,200,000 BBB+ Erie County, PA PCR (International Paper
Company Project), Series A, 5.300% due 4/1/12 1,147,500
1,000,000 AAA Monroe County, MI PCR, (Detroit Edison
Co. Project), AMBAC-Insured, 6.350%
due 12/1/04 (b) 1,058,750
--------------------------------------------------------------------------------
4,185,550
--------------------------------------------------------------------------------
Pre-Refunded (e) -- 1.3%
70,000 AAA Indiana University Revenue, Series 1983N,
(Call 7/1/01 @ 100), 10.000% due 7/1/03,
Sinking Fund Average Life 12/22/00 71,591
115,000 AAA Ohio State Water Development Authority Revenue,
Armco Steel Corp., 7.785% due 11/1/00, Sinking
Fund Average Life 5/2/00 116,173
55,000 AAA Oklahoma State IDA,Oklahoma Health Care Corp.,
Series A, FGIC-Insured, (Various Call Dates),
9.125% due 11/1/08, Sinking Fund Average
Life 5/7/06 64,488
210,000 AAA Oshkosh, WI Hospital Facility Revenue, Mercy
Medical Center, 7.375% due 7/1/09, Sinking
Fund Average Life 1/22/04 227,325
510,000 Aaa* Philadelphia, PA Hospital Authority Revenue,
United Hospital Inc. Project, 10.875%
due 7/1/08 609,450
--------------------------------------------------------------------------------
1,089,027
--------------------------------------------------------------------------------
Public Facilities -- 3.0%
1,350,000 A- Dekalb County, IN Redelopment Authority Revenue,
Mini-Mill Public Improvement, 6.250%
due 1/15/09 1,412,436
1,000,000 AA- LaCrosse, WI Resource Recovery Revenue,
(Northern States Power Co. Project), 6.000%
due 11/1/21 (b) 1,001,250
--------------------------------------------------------------------------------
2,413,686
--------------------------------------------------------------------------------
Transportation -- 11.0%
1,000,000 A Connecticut State Special Obligation, (Bradley
International Airport), ACA-Insured, Series A,
6.375% due 7/1/12 1,035,000
3,000,000 BBB- Connector 2000 Association, SC Toll Road Revenue,
Capital Appreciation, Series B, zero coupon
due 1/1/15 1,012,500
2,035,000 AAA Dallas Fort Worth, TX Regional Airport Revenue
Refunding, Series 1992A, FGIC-Insured, 7.750%
due 11/1/03 2,223,238
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Intermediate Municipal Fund, Inc. 11
<PAGE>
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2000
--------------------------------------------------------------------------------
FACE
AMOUNT RATING(a) SECURITY VALUE
================================================================================
Transportation -- 11.0% (continued)
$1,920,000 A Denver, CO City & County Airport Revenue,
Series 1990A, 8.250% due 11/15/02 (b) $ 1,979,789
3,110,000 AAA E-470 Public Highway Authority, Colorado
Revenue, Capital Appreciation, Series B,
MBIA-Insured, zero coupon due 9/1/14 1,407,275
500,000 A- PittsField Township, MI Economic Development
Corp. Revenue Refunding, (Airport Association
Project), Unconditional Guaranty-Lincoln
National, 6.400% due 12/1/02 505,000
3,000,000 BBB- Pocahontas Parkway Association, Virgina Toll
Road Revenue, Capital Appreciation, Series B,
zero coupon due 8/15/19 780,000
--------------------------------------------------------------------------------
8,942,802
--------------------------------------------------------------------------------
Utilities -- 3.5%
2,215,000 AAA Chelan County, WA Public Utililties Distribution
No. 1, Columbia River Rock Island,
MBIA-Insured, zero coupon due 6/1/13 1,074,275
1,500,000 AAA Long Island Power Authority, New York Electric
Systems Revenue, Capital Appreciation,
FSA-Insured, Series B, zero coupon due 6/1/15 643,125
1,000,000 AA Washington State Public Power Supply, Nuclear
Project No.1, 7.750% due 7/1/03 1,075,000
--------------------------------------------------------------------------------
2,792,400
--------------------------------------------------------------------------------
Water & Sewer -- 1.3%
1,000,000 AAA Pueblo, CO Bridge Waterworks, Water Revenue,
Series A, FSA-Insured, 6.000% due 11/1/14 1,050,000
--------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $79,422,790**) $80,806,264
================================================================================
(a) All ratings are by Standard & Poor's Ratings Service, except those
identified by an asterisk (*) which are rated by Moody's Investors
Service, Inc.
(b) Income from these issues is considered a preference item for purposes of
calculating the alternative minimum tax.
(c) Bonds are escrowed to maturity with U.S. government securities and are
considered by the Manager to be triple-A rated even if issuer has not
applied for new ratings.
(d) Inverse floating rate security - coupon varies inversely with level of
short-term tax-exempt interest rates.
(e) 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.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 13 and 14 for definition of ratings and certain security
descriptions.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Bond Ratings (unaudited)
--------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings Service ("Standard & Poor's") -- Ratings from "AA" to
"BB" may be modified by the addition of a plus (+) or a 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 differs 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 it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.
BB -- Bonds rated "BB" are regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal
in accordance with the terms of the obligation. While such bonds will
likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse
conditions.
Moody's Investors Service, Inc. ("Moody's") -- Numerical modifiers 1, 2, and 3
may be applied to each generic rating from "Aa" to "B", where 1 is the highest
and 3 the lowest rating within its generic category.
Aaa -- Bonds 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 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 as 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 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 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 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, and therefore not well
safeguarded during both good and bad times over the future. Uncertainty
of position characterizes bonds in this class.
B -- Bonds rated "B" generally lack characteristics of the desirable
investments. Assurance of interest and principal payments or 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.
--------------------------------------------------------------------------------
Smith Barney Intermediate Municipal Fund, Inc. 13
<PAGE>
--------------------------------------------------------------------------------
Security Descriptions (unaudited)
--------------------------------------------------------------------------------
ACA -- American Capital Assurance
AMBAC -- AMBAC Indemnity Corporation
CGIC -- Capital Guaranty Insurance Company
COP -- Certificate of Participation
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
IDA -- Industrial Development Agency
IDR -- Industrial Development Revenue
ISD -- Independent School District
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
PCFA -- Pollution Control Financing Authority
PCR -- Pollution Control Revenue
PSFG -- Permanent School Fund Guaranty
RIBS -- Residual Interest Bonds
--------------------------------------------------------------------------------
14 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) June 30, 2000
--------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $79,422,790) $ 80,806,264
Cash 37,816
Receivable for securities sold 984,273
Interest receivable 1,315,340
--------------------------------------------------------------------------------
Total Assets 83,143,693
--------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 890,088
Dividends payable 102,266
Management fees payable 40,760
Accrued expenses 48,833
--------------------------------------------------------------------------------
Total Liabilities 1,081,947
--------------------------------------------------------------------------------
Total Net Assets $ 82,061,746
================================================================================
NET ASSETS:
Par value of capital shares $ 8,210
Capital paid in excess of par value 82,329,551
Undistributed net investment income 86,294
Accumulated net realized loss on security transactions (1,745,783)
Net unrealized appreciation of investments 1,383,474
--------------------------------------------------------------------------------
Total Net Assets
(Equivalent to $10.00 a share on 8,210,165 shares of $0.001
par value outstanding; 100,000,000 shares authorized) $ 82,061,746
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Intermediate Municipal Fund, Inc. 15
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations (unaudited)
--------------------------------------------------------------------------------
For the Six Months Ended June 30, 2000
INVESTMENT INCOME:
Interest $ 2,578,484
--------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 244,979
Shareholder and system servicing fees 20,288
Shareholder communications 17,405
Audit and legal 13,526
Pricing service fees 6,465
Director's fees 3,102
Registration fees 2,983
Custody 2,486
Other 4,388
--------------------------------------------------------------------------------
Total Expenses 315,622
--------------------------------------------------------------------------------
Net Investment Income 2,262,862
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 4):
Realized Loss From Security Transactions
(excluding short-term securities):
Proceeds from sales 30,968,739
Cost of securities sold 31,344,426
--------------------------------------------------------------------------------
Net Realized Loss (375,687)
--------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period 393,865
End of period 1,383,474
--------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 989,609
--------------------------------------------------------------------------------
Net Gain on Investments 613,922
--------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 2,876,784
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
16 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Six Months Ended June 30, 2000 (unaudited)
and the Year Ended December 31, 1999
<TABLE>
<CAPTION>
2000 1999
===================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,262,862 $ 4,449,430
Net realized loss (375,687) (1,368,760)
Increase (decrease) in net unrealized appreciation 989,609 (4,648,263)
------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations 2,876,784 (1,567,593)
------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 2):
Net investment income (2,206,184) (4,416,912)
Net realized gains -- (47,888)
------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (2,206,184) (4,464,800)
------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Treasury stock acquired (1,322,568) --
------------------------------------------------------------------------------------
Decrease in Net Assets From
Fund Share Transactions (1,322,568) --
------------------------------------------------------------------------------------
Decrease in Net Assets (651,968) (6,032,393)
NET ASSETS:
Beginning of period 82,713,714 88,746,107
------------------------------------------------------------------------------------
End of period* $ 82,061,746 $ 82,713,714
===================================================================================
* Includes undistributed net investment income of: $ 86,294 $ 29,616
===================================================================================
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Smith Barney Intermediate Municipal Fund, Inc. 17
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
--------------------------------------------------------------------------------
1. Significant Accounting Policies
The Smith Barney Intermediate Municipal Fund, Inc. ("Fund"), a Maryland
corporation, is registered under the Investment Company Act of 1940, as amended,
as a diversified, closed-end management investment company.
The significant accounting policies consistently followed by the Fund are:(a)
security transactions are accounted for on trade date;(b) securities are valued
at the mean between the bid and ask prices provided by an independent pricing
service that are based on transactions in municipal obligations, quotations from
municipal bond dealers, market transactions in comparable securities and various
relationships between securities; (c) securities for which market quotations are
not available will be valued in good faith at fair market value by or under the
direction of the Board of Directors; (d) securities maturing within 60 days are
valued at cost plus accreted discount, or minus amortized premium, which
approximates value; (e) gains or losses on the sale of securities are calculated
by using the specific identification method; (f) interest income, adjusted for
amortization of premium and accretion of original issue discount, is recorded on
the accrual basis; market discount is recognized upon the disposition of the
security; (g) 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; (h) dividends and
distributions to shareholders are recorded on the ex-dividend date; (i) the
character of income and gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. At December 31, 1999, reclassifications were made to the Fund's
capital accounts to reflect permanent book/tax differences and income and gains
available for distributions under income tax regulation. Net investment income,
net realized gains and net assets were not affected by this change; and (j)
estimates and assumptions are required to be made regarding assets, liabilities
and changes in net assets resulting from operations when financial statements
are prepared. Changes in the economic environment, financial markets and any
other parameters used in determining these estimates could cause actual results
to differ.
2. Exempt-Interest Dividends and Other Distributions
The Fund intends to satisfy conditions that will enable interest from municipal
securities, which is exempt from Federal income tax and from designated state
income taxes, to retain such tax-exempt status when distributed to the
shareholders of the Fund.
--------------------------------------------------------------------------------
18 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
Capital gains distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
3. Management Agreement and Transactions with Affiliated Persons
SSB Citi Fund Management LLC ("SSBC"), a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH"), which, in turn, is a subsidiary of Citigroup Inc., acts
as investment manager to the Fund. As compensation for its services, the Fund
pays SSBC a fee calculated at the annual rate of 0.60% of the Fund's average
daily net assets. This fee is calculated daily and paid monthly.
All officers and one Director of the Fund are employees of Salomon Smith Barney
Inc., another subsidiary of SSBH.
4. Investments
During the six months ended June 30, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
================================================================================
Purchases $26,589,249
--------------------------------------------------------------------------------
Sales 30,968,739
================================================================================
At June 30, 2000, aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
================================================================================
Gross unrealized appreciation $1,996,093
Gross unrealized depreciation (612,619)
--------------------------------------------------------------------------------
Net unrealized appreciation $1,383,474
================================================================================
5. Futures Contracts
Initial margin deposits made upon entering into futures contracts are recognized
as assets. The initial margin is segregated by the custodian and is noted in the
schedule of investments. During the period the futures contract is open, changes
in the value of the contract are recognized as unrealized gains or losses by
"marking to market" on a daily basis to reflect the market value of the contract
at the end of each day's trading. Variation margin payments are made or received
and recognized as assets due from or liabilities due to broker, depending upon
whether unrealized gains or losses are incurred. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
proceeds from (or cost of) the closing transactions and the Fund's basis in
--------------------------------------------------------------------------------
Smith Barney Intermediate Municipal Fund, Inc. 19
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
the contract.The Fund enters into such contracts to hedge a portion of its
portfolio. The Fund bears the market risk that arises from changes in the value
of the financial instruments and securities indices (futures contracts).
At June 30, 2000, there were no open futures contracts.
6. Options Contracts
Premiums paid when put or call options are purchased by the Fund represent
investments, which are marked-to-market daily. When a purchased option expires,
the Fund will realize a loss in the amount of the premium paid. When the Fund
enters into a closing sales transaction, the Fund will realize a gain or loss
depending on whether the proceeds from the closing sales transaction are greater
or less than the premium paid for the option. When the Fund exercises a put
option, it will realize a gain or loss from the sale of the underlying security
and the proceeds from such sale will be decreased by the premium originally
paid. When the Fund exercises a call option, the cost of the security which the
Fund purchases upon exercise will be increased by the premium originally paid.
At June 30, 2000, there were no open purchased call or put option contracts.
When a Fund writes a covered call or put option, an amount equal to the premium
received by the Fund is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Fund realizes a gain
equal to the amount of the premium received. When the Fund enters into a closing
purchase transaction, the Fund realizes a gain or loss depending upon whether
the cost of the closing transaction is greater or less than the premium
originally received without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is eliminated.
When a written call option is exercised, the cost of the security sold will be
decreased by the premium originally received. When a put option is exercised,
the amount of the premium originally received will reduce the cost of the
security which the Fund purchased upon exercise. When written index options are
exercised, settlement is made in cash.
The risk associated with purchasing options is limited to the premium originally
paid. The Fund enters into options for hedging purposes. The risk in writing a
call option is that the Fund gives up the opportunity to participate in any
increase in the price of the underlying security beyond the exercise price. The
risk in writing a put option is that the Fund is exposed to the risk of a loss
if the market price of the underlying security declines.
During the six months ended June 30, 2000, the Fund did not write any call or
put option contracts.
--------------------------------------------------------------------------------
20 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
7. Capital Shares
At June 30, 2000, the Fund had 100,000,000 shares of common stock authorized
with a par value of $0.001 per share.
On January 4, 2000, the Fund commenced a share repurchase plan. As of June 30,
2000, repurchased shares totaled 154,000 for a total cost of $1,322,568.
8. Capital Loss Carryforward
At December 31, 1999 the Fund had, for Federal income tax purposes, a capital
loss carryforward of approximately $1,041,500, available to offset future
capital gains through December 31, 2007. To the extent that these carryforward
losses are used to offset capital gains, it is probable that any gains so offset
will not be distributed.
--------------------------------------------------------------------------------
Smith Barney Intermediate Municipal Fund, Inc. 21
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended December 31,
except where noted:
<TABLE>
<CAPTION>
2000(1) 1999 1998 1997 1996 1995
=====================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 9.89 $ 10.61 $ 10.64 $ 10.47 $ 10.66 $ 9.95
-----------------------------------------------------------------------------------------------------
Income (Loss)
From Operations:
Net investment income 0.27 0.53 0.55 0.57 0.58 0.58
Net realized and
unrealized gain (loss) 0.09 (0.71) 0.01 0.28 (0.17) 0.73
-----------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations 0.36 (0.18) 0.56 0.85 0.41 1.31
-----------------------------------------------------------------------------------------------------
Gains From Repurchase
of Treasury Stock 0.02 -- -- -- -- --
-----------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.27) (0.53) (0.55) (0.57) (0.60) (0.60)
In excess of net
investment income -- -- -- (0.01) -- --
Net realized gains -- (0.01) (0.04) (0.10) -- --
-----------------------------------------------------------------------------------------------------
Total Distributions (0.27) (0.54) (0.59) (0.68) (0.60) (0.60)
-----------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 10.00 $ 9.89 $ 10.61 $ 10.64 $ 10.47 $ 10.66
-----------------------------------------------------------------------------------------------------
Total Return, Based on
Market Value(2) 9.36%++ (17.10)% 7.05% 13.42% 1.56% 15.93%
-----------------------------------------------------------------------------------------------------
Total Return, Based on
Net Asset Value(2) 4.29%++ (1.39)% 5.50% 8.49% 4.13% 13.72%
-----------------------------------------------------------------------------------------------------
Net Assets,
End of Period (millions)$82 $ 83 $ 89 $ 89 $ 87 $ 88
-----------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.78%+ 0.77% 0.76% 0.74% 0.77% 0.72%
Net investment income 5.56+ 5.17 5.10 5.42 5.56 5.63
-----------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 38% 54% 42% 58% 21% 13%
-----------------------------------------------------------------------------------------------------
Market Price,
End of Period $ 8.875 $ 8.375 $10.688 $10.563 $ 9.938 $10.375
=====================================================================================================
</TABLE>
(1) For the six months ended June 30, 2000 (unaudited).
(2) The total return calculation assumes that dividends are reinvested in
accordance with the Fund's dividend reinvestment plan.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
22 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Financial Data (unaudited)
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
AMEX Net Asset Dividends Reinvestment
Period Closing Price* Value* Paid Price
================================================================================
1998
January $10.94 $10.69 $0.048 $10.64
February 10.63 10.63 0.048 10.63
March 10.06 10.58 0.048 10.21
April 10.00 10.51 0.045 10.00
May 9.81 10.61 0.045 9.93
June 10.00 10.60 0.045 10.08
July 10.19 10.58 0.045 10.13
August 10.06 10.68 0.045 10.12
September 10.38 10.75 0.045 10.40
October 10.63 10.68 0.045 10.58
November 10.50 10.66 0.045 10.65
December 10.69 10.61 0.045 10.74
December+ 10.69 10.61 0.036 10.61
1999
January 9.88 10.69 0.044 10.06
February 10.25 10.58 0.044 10.31
March 10.13 10.53 0.044 10.12
April 10.13 10.52 0.044 10.02
May 9.88 10.40 0.044 9.86
June 9.50 10.23 0.044 9.53
June+ 9.50 10.23 0.006 9.53
July 9.50 10.22 0.044 9.53
August 9.38 10.11 0.044 9.37
September 9.31 10.06 0.044 9.27
October 9.00 9.94 0.044 8.94
November 8.56 9.99 0.044 8.54
December 8.38 9.89 0.044 8.47
2000
January 8.63 9.83 0.044 8.64
February 8.50 9.87 0.044 8.46
March 8.56 10.00 0.044 8.54
April 8.44 9.92 0.045 8.50
May 8.56 9.84 0.045 8.64
June 8.88 10.00 0.045 8.91
================================================================================
* On the last business day of the month.
+ Capital gain distribution.
--------------------------------------------------------------------------------
Smith Barney Intermediate Municipal Fund, Inc. 23
<PAGE>
--------------------------------------------------------------------------------
Additional Shareholder Information (unaudited)
--------------------------------------------------------------------------------
On April 20, 2000, the Annual Meeting of shareholders of the Fund was held for
the purpose of voting on the following matters:
1. To vote on the election of Heath B. McLendon, Allan J. Bloostein and
Richard E. Hanson, Jr. to serve as Directors until the year 2003; and
2. To approve or disapprove the selection of KPMG LLP as the independent
auditors for the current fiscal year of the Fund.
The results of the vote on Proposal 1 were as follows:
Voted % of Shares Votes % of Shares
Directors* Voted For Voted For Against Voted Against
================================================================================
Allan J. Bloostein 7,930,444 99.216% 62,651 0.784%
Richard E. Hanson, Jr. 7,929,544 99.205 63,551 0.795
Heath B. McLendon 7,936,944 99.298 56,151 0.702
================================================================================
The results of the vote on Proposal 2 were as follows:
% of Shares Votes % of Shares Votes % of Shares
Votes For Voted For Against Voted Against Abstained Abstained
================================================================================
7,939,635 99.331% 27,470 0.344% 25,990 0.325%
================================================================================
* The following Directors, representing the balance of the Board of
Directors, continue to serve: Lee Abraham, Jane F. Dasher, Donald R.
Foley, Paul Hardin, Roderick C. Rasmussen and John P. Toolan.
--------------------------------------------------------------------------------
24 2000 Semi-Annual Report to Shareholders
<PAGE>
--------------------------------------------------------------------------------
Dividend Reinvestment Plan (unaudited)
--------------------------------------------------------------------------------
Under the Fund's Dividend Reinvestment Plan ("Plan"), a shareholder whose shares
of common stock are registered in his own name will have all distributions from
the fund reinvested automatically by PFPC Global Fund Services ("PFPC"), as
purchasing agent under the plan, unless the shareholder elects to receive cash.
Distributions with respect to shares registered in the name of a broker-dealer
or other nominee (that is, in street name) will be reinvested by the broker or
nominee in additional shares under the Plan, unless the service is not provided
by the broker or nominee or the shareholder elects to receive distributions in
cash. Investors who own common stock registered in street name should consult
their broker-dealers for details regarding reinvestment. All distributions to
shareholders who do not participate in the plan will be paid by check mailed
directly to the record holder by or under the direction of First Data as
dividend paying agent.
The number of shares of common stock distributed to participants in the plan in
lieu of a cash dividend is determined in the following manner. When the market
price of the common stock is equal to or exceeds the net asset value per share
of the common stock on the determination date (generally, the record date for
the distribution), Plan participants will be issued shares of common stock by
the fund at a price equal to the greater of net asset value determined as
described below under "Net Asset Value" or 95% of the market price of the common
stock.
If the market price of the common stock is less than the net asset value of the
common stock at the time of valuation (which is the close of business on the
determination date), or if the Fund declares a dividend or capital gains
distribution payable only in cash, PFPC will buy common stock in the open
market, on the AMEX or elsewhere, for the participants' accounts. If following
the commencement of the purchases and before PFPC has completed its purchases,
the market price exceeds the net asset value of the common stock as of the
valuation time, PFPC will attempt to terminate purchases in the open market and
cause the fund to issue the remaining portion of the dividend or distribution in
shares at a price equal to the greater of (a) net asset value as of the
valuation time or (b) 95% of the then current market price. In this case, the
number of shares received by a Plan participant will be based on the weighted
average of prices paid for shares purchased in the open market and the price at
which the fund issues the remaining shares. To the extent PFPC is unable to stop
open market purchases and cause the Fund to issue the remaining shares, the
average per share purchase price paid by PFPC may exceed the net asset value of
the common stock as of the valuation time, resulting in the acquisition of fewer
shares than if the dividend or capital gains distribution had been paid in
common stock issued by the Fund at such net asset value. PFPC will begin to
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Smith Barney Intermediate Municipal Fund, Inc. 25
<PAGE>
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Dividend Reinvestment Plan (unaudited) (continued)
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purchase common stock on the open market as soon as practicable after the
determination date for the dividend or capital gains distribution, but in no
event shall such purchases continue later than 30 days after the payment date
for such dividend or distribution, or the record date for a succeeding dividend
or distribution, except when necessary to comply with applicable provisions of
the federal securities laws.
PFPC maintains all shareholder accounts in the Plan and furnishes written
confirmations of all transactions in each account, including information needed
by a shareholder for personal and tax records. The automatic reinvestment of
dividends and capital gains distributions will not relieve plan participants of
any income tax that may be payable on the dividends or capital gains
distributions. Common stock in the account of each plan participant will be held
by PFPC in uncertificated form in the name of the plan participant.
Plan participants are subject to no charge for reinvesting dividends and capital
gains distributions under the Plan. PFPC's fees for handling the reinvestment of
dividends and capital gains distributions will be paid by the fund. No brokerage
charges apply with respect to shares of common stock issued directly by the fund
under the Plan. Each plan participant will, however, bear a proportionate share
of any brokerage commissions actually incurred with respect to any open market
purchases made under the plan.
Experience under the Plan may indicate that changes to it are desirable. The
Fund reserves the right to amend or terminate the plan as applied to any
dividend or capital gains distribution paid subsequent to written notice of the
change sent to participants at least 30 days before the record date for the
dividend or capital gains distribution. The plan also may be amended or
terminated by PFPC, with the fund's prior written consent, on at least 30 days'
written notice to plan participants. All correspondence concerning the plan
should be directed by mail to PFPC Global Fund Services, P.O. Box 8030, Boston,
Massachusetts 02266-8030 or by telephone at 1-800-451-2010.
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26 2000 Semi-Annual Report to Shareholders
<PAGE>
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Smith Barney
INTERMEDIATE [GRAPHIC OMITTED]
MUNICIPAL FUND, INC.
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DIRECTORS
Lee Abraham
Alan J. Bloostein
Jane F. Dasher
Donald R. Foley
Richard E. Hanson, Jr.
Paul Hardin
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
Joseph H. Fleiss, Emeritus
OFFICERS
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Peter M. Coffey
Vice President
Anthony Pace
Controller
Christina T. Sydor
Secretary
INVESTMENT MANAGER
SSB Citi Fund Management LLC
CUSTODIAN
PFPC Trust Company
SHAREHOLDER
SERVICING AGENT
PFPC Global Fund Services
P.O. Box 8030
Boston, Massachusetts 02266-8030
This report is intended only for the shareholders of Smith Barney Intermediate
Municipal Fund, Inc. It is not a Prospectus, circular or representation intended
for use in the purchase or sale of shares of the Fund or any securities
mentioned in the report.
SMITH BARNEY
INTERMEDIATE
MUNICIPAL FUND, INC.
388 Greenwich Street
New York, New York 10013
FD0633 8/00
