<PAGE>
- --------------------------------------------------------------------------------
MANAGED MUNICIPALS
PORTFOLIO INC.
Quarterly Report
February 28, 1994
[LOGO]
- --------------------------------------------------------------------------------
The green cover has a golden picture of an eagle sitting on top of a shield with
two warriors on either side.
<PAGE>
MANAGED MUNICIPALS
PORTFOLIO INC.
April 18, 1994
DEAR SHAREHOLDER:
We are pleased to provide the quarterly report for Managed Municipals
Portfolio Inc. for the nine months ended February 28, 1994. Over the nine
months the U.S. economy has gone from a dead stop to gradual but steady
growth to a powerful fourth quarter of 1993. The United States is clearly
leading the world out of recession based on a leaner and more competitive
industrial foundation, and the lowest interest rates we've seen in a
generation. We expect that the economy will continue to experience steady,
healthy growth.
The Federal Reserve Board responded to economic conditions by keeping
the Federal funds rate (a sensitive indicator of the direction of interest
rates) at 3% for most of this time frame, until they were sure that the
economy was on a steady growth path. In early February, they raised the
Federal funds rate to 3.25% and subsequent raises have brought it to 3.75%.
We see these as just the first moves in a gradual rise in short-term rates
from the Fed. It should have a minimal effect on longer rates, but it could
put pressure on funds that use leverage -- which we don't.
The municipal market over the past nine months stayed very attractive
compared to governments on an after-tax basis. The total issuance of
municipal bonds in 1993 was a record-breaking $300 billion. It is highly
unlikely that new issuance this year will even approach $200 billion, which
will make supply much more constrained. Coupled with the tax increase
instituted by the Clinton Administration which is likely to lead to higher
demand for tax-exempt securities, you have a marketplace that represents
real value. We think that as the issuance of municipal bonds wanes over the
next year, tax-exempts will comfortably outperform taxables and provide
investors with an attractive investment alternative.
CONTINUED
- --------------------------- 1
------------------------------
<PAGE>
PORTFOLIO STRATEGY
As we have described in the past, our investment goal is twofold: to
provide a competitive tax-exempt income stream, and to provide you with the
best total return possible. Early in 1993, when the economy was weaker, we
invested the Portfolio primarily in long-term securities and discount
coupons to take advantage of falling interest rates. (Discount bonds
generally carry a lower coupon rate than currently available in the market
and therefore sell below their redemption value. These bonds generally
appreciate faster as interest rates fall.) In the early fall, when the
30-year Treasury bond traded to the lowest interest rate level in the past
25 years, we became very defensive for a number of reasons. We felt the
market had priced in too much good news, and was quite vulnerable. We
reduced the Portfolio's average life, kept some cash on the sidelines, and
took a very conservative stance for the future. We also hedged the Portfolio
against the decline in the price of bonds by selling short U.S. Treasury
Index futures contracts. A futures contract (which is an agreement to sell
(or buy) a specific amount of a financial instrument at a particular price
on an agreed-upon date) is a tool used in declining markets to help preserve
your investment capital. Preservation of capital is a critical element in
our total return philosophy of investing. We believe these actions saved the
Portfolio a great deal of money when bond prices declined, and we will
continue this more cautious and conservative stance until we believe the
Federal Reserve has stopped raising short-term interest rates.
As of February 28, 1994, 86% of the Portfolio was rated investment grade
(BBB/Baa and higher) by either Standard & Poor's Corporation or Moody's
Investors Service, Inc. (two nationally recognized bond rating
organizations). The majority of the Portfolio's assets were invested in
transportation, general obligation, and insured hospital bonds.
IN THE NEWS . . .
SMART MONEY'S April issue contained an article about the municipal
market and five of its top municipal fund portfolio managers entitled "Local
Heroes." We are proud that Joe Deane, the portfolio manager of Managed
Municipals Portfolio Inc., is profiled in this article.
The stock price of the Portfolio is reported in most daily newspapers in
the listings for securities traded on the New York Stock Exchange under the
abbreviation "MgdMu." Its stock symbol is "MMU." The weekly closing price as
well as the net asset value per share are reported in BARRON'S and the
Monday edition of THE WALL STREET JOURNAL. If you
- ------------------------------ 2
------------------------------
<PAGE>
have any questions or comments about your investment in the Portfolio,
please contact The Shareholder Services Group, Inc. at (800) 331-1710. We
look forward to reporting to you in May in the Annual Report.
Sincerely,
Heath B. McLendon Joseph P. Deane
CHAIRMAN OF THE BOARD VICE PRESIDENT AND
INVESTMENT OFFICER
April 18, 1994
- --------------------------- 3
------------------------------
<PAGE>
Unaudited Financial Data
Per Share Of Common Stock
<TABLE>
<CAPTION>
NYSE Net Asset Dividend Capital Gains
Closing Price Value Paid Dividend Paid
--------------- ----------- --------- --------------
<S> <C> <C> <C> <C>
June 30, 1993........................... $12.375 $13.22 $0.061 --
July 31, 1993........................... 12.500 13.14 0.061 --
August 31, 1993......................... 12.875 13.42 0.061 --
September 30, 1993...................... 12.625 13.50 0.061 --
October 31, 1993........................ 12.875 13.47 0.061 --
November 30, 1993....................... 12.250 13.36 0.061 --
December 31, 1993....................... 12.500 13.08 0.061 $0.510
January 31, 1994........................ 12.625 13.07 0.061 --
February 28, 1994....................... 12.125 12.84 0.061 --
</TABLE>
Dividend Data*
For the Three Month Period Ended February 28, 1994
<TABLE>
<CAPTION>
Equivalent Taxable Distribution Rate
--------------------------------------------------------------------
Assuming
Per Share Annualized Assuming Assuming Assuming
39.6%
Dividend Distribution 28% Federal 31% Federal 36% Federal
Federal
Distributions Rate Tax Bracket Tax Bracket Tax Bracket
Tax Bracket
------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
<C>
$0.183 5.70% 7.92% 8.26% 8.91%
9.44%
<FN>
- ------------
* Based on February 28, 1994 net asset value of $12.84 per share.
</TABLE>
Each registered shareholder is considered a participant in the Fund's Dividend
Reinvestment Plan, unless the shareholder elects to receive all dividends and
distributions in cash, or unless the shareholder's shares are registered in the
name of a broker, bank or nominee (other than Smith Barney Shearson Inc.) which
does not provide the service. Questions and correspondence concerning the
Dividend Reinvestment Plan should be directed to The Shareholder Services Group,
Inc., P.O. Box 1376, Boston, Massachusetts 02104.
- ------------------------------ 4
------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
KEY TO INSURANCE ABBREVIATIONS
AMBAC -- American Municipal Bond Assurance Corporation
Co Lee -- College Construction Loan Association
FGIC -- Federal Guaranty Insurance Corporation
MBIA -- Municipal Bond Investors Assurance
</TABLE>
<TABLE>
<CAPTION>
Market
Rating Value
Face Value Moody's S&P (Note 1)
<C> <S> <C> <C> <C>
- ---------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--96.7%
ALASKA -- 0.4%
$ 2,000,000 Valdez, Alaska, Marine Terminal
Revenue,
5.650% due 12/1/28 A1 AA- $ 1,915,000
ARIZONA -- 0.9%
4,000,000 Greenlee County, Arizona,
Industrial Development
Authority,
(Phelps Dodge Project),
5.450% due 6/1/09 A3 A 3,935,000
CALIFORNIA -- 11.7%
2,500,000 California Pollution Control
Financing Authority,
(Pacific Gas & Electric
Company), Series A,
6.625% due 6/1/09 A1 A 2,681,250
3,905,000 Culver City, California,
Redevelopment Finance
Authority, Tax Allocation,
(MBIA insured),
4.900% due 11/01/08 Aaa AAA 3,724,394
1,000,000 California Health Facilities -
Kaiser Permanente,
5.450% due 10/01/13 Aa2 AA 971,250
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 5
- ------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Rating Value
Face Value Moody's S&P (Note 1)
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
Foothill, California,
Transportation Zone,
Certificates of Participation,
Refunding, Series A:
$ 1,010,000 5.150% due 05/01/01 Baa1 NR $ 991,062
1,550,000 5.250% due 05/01/02 Baa1 NR 1,517,062
Los Angeles, California,
Regional Airport Improvement
Corporation:
3,300,000 (Los Angeles International
Airport), Lease Revenue,
6.500% due 1/1/32 NR A- 3,399,000
3,500,000 Regional Airport Improvement,
Lease Revenue,
6.800% due 1/1/27 NR A- 3,696,875
4,055,000 Orange County, California, Water
District Authority,
Certificates of Participation,
Series A,
5.500% due 8/15/09 Aa AA 4,014,450
8,015,000 Pleasanton, California, Joint
Powers Reassesment Financing
Authority Revenue, Series A,
5.700% due 9/2/01 Baa1 NR 8,065,094
Port Oakland, California,
Special Facilities Revenue,
(Mitsui O.S.K. Lines Limited),
Series A:
1,030,000 6.750% due 1/1/12 Aa3 AA 1,102,100
2,950,000 6.800% due 1/1/19 Aa3 AA 3,222,875
5,000,000 San Francisco, California, City
Sewer Refunding, (AMBAC
insured),
5.500% due 10/1/15 Aaa AAA 4,856,250
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 6
- ------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Rating Value
Face Value Moody's S&P (Note 1)
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
San Joaquin Hills, California,
Transportation Authority, Condor
Agency Tour Road, Sr. Lien
Revenue:
$16,000,000 Zero Coupon due 1/1/17 NR NR $ 3,480,000
25,000,000 Zero Coupon due 1/1/18 NR NR 5,062,500
10,000,000 Zero Coupon due 1/1/20 NR NR 1,775,000
15,000,000 Zero Coupon due 1/1/25 NR NR 1,875,000
1,700,000 Sonoma County, California,
Detention Facilities Improvement
Program, Certificates of
Participation,
5.000% due 11/15/13 A1 A+ 1,532,125
COLORADO -- 9.0%
2,000,000 Colorado Springs, Colorado,
Airport Revenue, Series A,
7.000% due 1/1/22 NR BBB 2,125,000
100,000,000 Dawson Ridge Metropolitan
District #1, Series B,
Zero coupon due 10/1/22 Aaa NR 15,625,000
Denver, Colorado, Airport
Revenue, Series C:
4,000,000 6.750% due 11/15/22 Baa1 BBB 4,155,000
18,325,000 6.125% due 11/15/25 Baa1 BBB 18,027,219
CONNECTICUT -- 0.3%
1,325,000 Connecticut State, Resource
Recovery Project, (American Fuel
Company Project), Series A,
6.450% due 11/15/22 A2 A 1,414,438
FLORIDA -- 5.2%
Charlotte County, Florida,
Utility Revenue, (FGIC insured):
2,600,000 5.375% due 10/1/08 Aaa AAA 2,619,500
3,760,000 5.500% due 10/1/09 Aaa AAA 3,778,800
3,530,000 5.250% due 10/1/10 Aaa AAA 3,437,337
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 7
- ------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Rating Value
Face Value Moody's S&P (Note 1)
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
FLORIDA (CONTINUED)
$ 3,000,000 Florida State Turnpike Authority
Revenue, Series A, (FGIC
insured),
5.250% due 7/1/11 Aaa AAA $ 2,921,250
5,000,000 Hillsborough County, Florida,
Aviation Authority Revenue,
(Tampa International Airport),
(FGIC insured),
5.500% due 10/1/13 Aaa AAA 4,943,750
Tampa, Florida, Revenue Bonds,
(Aquarium Project):
3,000,000 7.550% due 5/1/12 NR NR 3,322,500
2,000,000 7.750% due 5/1/27 NR NR 2,222,500
GUAM -- 0.5%
Guam Power Authority
Revenue, Series A:
850,000 5.100% due 10/01/03 NR BBB 828,750
550,000 5.200% due 10/01/04 NR BBB 534,875
850,000 5.250% due 10/01/05 NR BBB 822,375
INDIANA -- 5.2%
18,305,000 Indiana Bond Bank, Revenue
Guarantee, State Revolving Fund,
Series A,
6.000% due 2/1/15 NR A 18,579,575
4,000,000 Indiana Port Commission Revenue
Refunding Project, (Cargill Inc.
Project),
6.875% due 5/1/12 Aa3 NR 4,460,000
LOUISIANA -- 2.4%
5,000,000 Lake Charles, Louisiana, (Harbor
& Terminal Port Facilities
Project), (Trunkline LNG Company
Project),
7.750% due 8/15/22 Ba1 NR 5,568,750
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 8
- ------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Rating Value
Face Value Moody's S&P (Note 1)
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
LOUISIANA (CONTINUED)
$ 4,500,000 Parish of Saint Martin,
Louisiana, Industrial Project,
(Cargill Inc. Project),
6.625% due 10/1/12 Aa3 NR $ 4,933,125
MAINE -- 4.8%
11,880,000 Maine Municipal Bond Bank,
Refunding Revenue, Series A,
5.500% due 11/1/09 Aa A+ 11,761,200
10,000,000 Maine State Housing Authority,
5.700% due 11/15/26 A1 AA- 9,571,400
MARYLAND -- 0.3%
1,145,000 Baltimore County, Maryland,
Mortgage Revenue, (Kingswood
Common Project),
5.750% due 9/1/20 NR AAA 1,117,806
MASSACHUSETTS -- 1.6%
7,000,000 Commonwealth of Massachusetts,
General Obligation, Series D,
5.750% due 5/1/12 A A 7,087,500
MICHIGAN -- 4.2%
16,375,000 Midland County, Michigan,
Economic Development
Corporation, Pollution Control
Revenue, Series B,
9.500% due 7/23/09 NR NR 18,585,625
MINNESOTA -- 5.3%
2,500,000 Duluth, Minnesota, Seaway Port
Authority, Industrial
Development, Dock & Wharf
Revenue, (Cargill Inc. Project),
6.800% due 5/1/12 Aa3 NR 2,781,250
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 9
- ------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Rating Value
Face Value Moody's S&P (Note 1)
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
MINNESOTA (CONTINUED)
$15,685,000 St. Paul, Minnesota, Housing
Redevelopment Agency, Hospital
Revenue, Series D, (Health East
Project),
9.750% due 11/1/17 Baa1 BBB- $ 18,606,331
2,000,000 St. Paul, Minnesota, Housing &
Redevelopment Authority, Sales
Tax Revenue, (Civic Center
Project),
5.450% due 11/1/13 A A 1,950,000
MONTANA -- 1.2%
5,000,000 Montana State Board, Investment
Resources Recovery, Yellowstone
Energy LP Project,
7.000% due 12/31/19 NR NR 5,081,250
NEW HAMPSHIRE -- 0.8%
3,500,000 New Hampshire State Business
Project, (Manchester Airport
Project),
6.500% due 1/1/19 Aa AA 3,740,625
NEW JERSEY -- 1.8%
5,200,000 Hudson County, New Jersey,
Improvement Authority, Essential
Purpose,
6.625% due 8/1/25 NR A+ 5,687,500
New Jersey State Educational
Facilities Authority Revenue,
(Ramapo College),
(MBIA insured), Series D:
1,170,000 5.350% due 7/1/07 Aaa AAA 1,183,163
1,240,000 5.400% due 7/1/08 Aaa AAA 1,247,750
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 10
- ------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Rating Value
Face Value Moody's S&P (Note 1)
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEW YORK -- 4.1%
New York State, Dormitory
Authority:
$ 2,035,000 (City University), Series A,
5.750% due 7/1/06 Baa1 BBB $ 2,060,438
2,145,000 (City University), Series A,
5.750% due 7/1/06 Baa1 BBB 2,155,725
14,000,000 (State University), Series A,
5.500% due 5/15/06 Baa1 BBB+ 13,930,000
NORTH CAROLINA -- 2.2%
1,600,000 Charlotte, North Carolina,
Certificates of Participation,
Revenue Refunding,
(Convention Facilities Project),
Series C, (AMBAC insured),
5.250% due 12/1/13 Aaa AAA 1,542,000
8,325,000 North Carolina Municipal Power
Agency 1, (Catawba Electric),
Revenue Bonds,
5.750% due 10/1/15 A A 8,200,125
OHIO -- 1.6%
3,000,000 Franklin County, Ohio,
Convention Facilities Authority,
Tax & Lease Revenue Anticipation
Notes, (MBIA insured),
5.850% due 12/1/19 Aaa AAA 3,082,500
3,870,000 Montgomery County, Ohio, General
Obligation, Refunding,
5.350% due 9/1/08 Aa AA 3,840,975
PENNSYLVANIA -- 4.9%
Commonwealth of
Pennsylvania, Certificates of
Participation, (AMBAC insured):
2,500,000 Series A,
5.250% due 7/1/10 Aaa AAA 2,403,125
15,000,000 Series S,
5.250% due 7/1/11 Aaa AAA 14,306,250
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 11
- ------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Rating Value
Face Value Moody's S&P (Note 1)
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
PENNSYLVANIA (CONTINUED)
$ 5,000,000 Pennsylvania Economic
Development Finance
Authority (Resource Recovery -
Northampton Generating Project),
Series A,
6.400% due 1/1/09 NR NR $ 4,993,750
RHODE ISLAND -- 5.2%
2,500,000 Rhode Island Housing & Mortgage
Finance Authority, Home
Ownership - Remarketed,
6.650% due 10/1/12 Aa AA+ 2,600,000
12,050,000 Rhode Island State Health &
Higher Education Facilities,
Educational Building
Corporation Revenue,
(Roger Williams College),
(Co Lee insured),
6.500% due 11/15/24 NR AAA 12,773,000
8,100,000 Rhode Island State, Public
Building Authority, Series A,
(AMBAC insured),
5.250% due 2/1/10 Aaa AAA 7,765,875
SOUTH CAROLINA -- 2.2%
Myrtle Beach, South Carolina,
Certificates of Participation,
(Myrtle Beach Convention Center
Project):
2,000,000 6.875% due 7/1/07 Baa1 AA+ 2,117,500
7,315,000 6.875% due 7/1/17 Baa1 AA+ 7,598,456
SOUTH DAKOTA -- 1.1%
South Dakota State, Housing
Authority, (Homeowners Mortgage
Project):
1,750,000 5.600% due 5/1/09 Aa NR 1,750,000
3,000,000 5.800% due 5/1/14 Aa AA+ 3,000,000
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 12
- ------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Rating Value
Face Value Moody's S&P (Note 1)
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
TEXAS -- 3.0%
$12,250,000 Sam Rayburn, Texas, Municipal
Power Agency, Supply Systems,
Revenue Refunding, Series A,
6.750% due 10/1/14 Baa BB $ 12,188,750
1,000,000 Texas State Veterans Housing
Assistance,
6.450% due 6/1/23 Aa AA 1,033,750
VIRGINIA -- 5.2%
4,700,000 Harrisonburg, Virginia,
Redevelopment and Housing
Authority, Public Facility Lease
Revenue, (Jail & Courthouse
Project),
6.500% due 9/1/14 A1 NR 4,899,750
Virginia Beach, Virginia,
General Obligation Refunding:
1,555,000 5.400% due 7/15/09 Aa AA 1,560,831
755,000 5.450% due 7/15/10 Aa AA 757,831
1,755,000 5.450% due 7/15/11 Aa AA 1,763,775
14,000,000 Virginia State Public Building
Authority, Series C,
5.750% due 8/1/12 Aa AA 14,245,000
WASHINGTON -- 7.1%
4,750,000 Chelan County, Washington,
Public Utilities District,
General Obligation, Series
1993A, District 4, - Remarketed,
(mandatory put 7/1/19),
6.750% due 7/1/62++ A1 A 5,177,500
5,650,000 Chelan County, Washington,
Public Utilities District #001,
(Chelan Hydro), Series E,
5.700% due 7/1/08 A1 A+ 5,713,563
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 13
- ------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Rating Value
Face Value Moody's S&P (Note 1)
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
WASHINGTON (CONTINUED)
$18,200,000 Washington State Health Care
Facilities, (Sisters of
Providence Hospital),
7.875% due 10/1/10 A1 AA- $ 20,338,500
WEST VIRGINIA -- 2.0%
9,000,000 Marion County, West Virginia,
County Commission,
7.750% due 12/1/11 NR NR 8,943,750
WISCONSIN -- 2.5%
4,070,000 Wisconsin State, General
Obligation, Series B,
6.600% due 1/1/22++ Aa AA 4,400,688
6,770,000 Wisconsin State Health and
Educational Facilities
Authority, (Marquette University
Project), (MBIA insured),
5.500% due 12/1/11 Aaa AAA 6,583,825
- ---------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS AND NOTES
(COST $409,989,541) $428,264,663
- ---------------------------------------------------------------------------
SHORT-TERM TAX-EXEMPT INVESTMENTS--3.7%
CALIFORNIA -- 3.1%
3,200,000 California Health Facilities
Financing Authority, (St.
Joseph's Project B),
2.200% due 7/1/13+ VMIGI NR 3,200,000
3,500,000 California Health Facilities
Financing Authority, (St.
Joseph's Health Systems), Series
B,
2.200% due 7/1/09+ VMIGI A1+ 3,500,000
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 14
- ------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Rating Value
Face Value Moody's S&P (Note 1)
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SHORT-TERM TAX-EXEMPT INVESTMENTS (CONTINUED)
CALIFORNIA (CONTINUED)
$ 200,000 California Pollution Control
Financing Authority,
(Honey LK Project),
2.250% 9/1/18+ P1 NR $ 200,000
California Pollution Control
Financing Resources:
3,900,000 (Delano Project),
2.300% due 8/1/19+ VMIGI NR 3,900,000
1,300,000 (HL Power),
2.250% due 9/1/18+ P1 NR 1,300,000
1,700,000 (Rocklin Project), Series A,
2.350% due 6/1/17+ P1 NR 1,700,000
100,000 (Rocklin Project), Series B,
2.350% due 6/1/17+ P1 NR 100,000
FLORIDA -- 0.1%
300,000 Hillsborough County, Florida,
Industrial Development
Authority,
2.450% due 6/1/21+ VMIGI A1+ 300,000
TEXAS -- 0.5%
2,000,000 Gulf Coast Waste Disposal
Authority, (Amoco Project),
2.450% due 10/01/17+ VMIGI A1+ 2,000,000
100,000 Lubbock, Texas, Health Facility
Development Corporation, (St.
Joseph's Health System),
Hospital Revenue,
2.300% due 7/1/13+ VMIGI A1+ 100,000
- ---------------------------------------------------------------------------
TOTAL SHORT-TERM TAX-EXEMPT INVESTMENTS
(COST $16,300,000) $ 16,300,000
- ---------------------------------------------------------------------------
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 15
- ------------------------------
<PAGE>
Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Value
(Note 1)
- ---------------------------------------------------------------------------
<C> <S> <C> <C> <C>
TOTAL INVESTMENTS
(COST $426,289,541*) 100.4% 444,564,663
- ---------------------------------------------------------------------------
<CAPTION>
Contracts
<C> <S> <C> <C> <C>
- ---------------------------------------------------------------------------
FUTURES CONTRACTS--SHORT POSITION--(25.4)%
(CONTRACT AMOUNT $114,321,875)
1,000 U.S. Treasury Bond Index
Futures,
March 1994 (25.4) $(112,406,250)
- ---------------------------------------------------------------------------
OTHER ASSETS AND LIABLITIES (NET) 25.0 110,666,895
- ---------------------------------------------------------------------------
NET ASSETS 100.0% $ 442,825,308
- ---------------------------------------------------------------------------
<FN>
* Aggregate cost for Federal tax purposes.
+ Variable rate demand bonds are payable upon not more than one day's notice.
++ $6,322,469 segregated to cover open futures contracts.
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 16
- ------------------------------
<PAGE>
Portfolio of Investments (continued)
FEBRUARY 28, 1994
Summary of Municipal Bonds by Combined Ratings
(Unaudited)
<TABLE>
<CAPTION>
PERCENT OF
TOTAL
STANDARD & MUNICIPAL BONDS
MOODY'S POOR'S AND NOTES
<S> <C> <C>
Aaa or AAA 21.1%
Aa AA 25.5
A A 18.0
Baa BBB 19.3
Ba BB 1.3
P1 & VMIGI SP1+ 2.3
NR NR 12.5
------
100.0%
------
------
</TABLE>
See Note to
Portfolio of Investments.
- ---------------------------------- 17
- ------------------------------
<PAGE>
Note to Portfolio of Investments
FEBRUARY 28, 1994 (UNAUDITED)
Significant Accounting Policy.
Managed Municipals Portfolio Inc. (the "Portfolio") was organized as a
corporation under the laws of the State of Maryland on April 9, 1992 and is
registered with the Securities and Exchange Commission as a non-diversified,
closed-end management investment company under the Investment Company Act of
1940, as amended. The policies described below are followed consistently by the
Portfolio in the valuation of its portfolio.
PORTFOLIO VALUATION: Investments are valued by The Boston Company Advisors,
Inc. after consultation with an independent pricing service (the "Service")
approved by the Board of Directors. When, in the judgment of the Service, quoted
bid prices for investments are readily available and are representative of the
bid side of the market, these investments are valued at the mean between the
quoted bid prices and asked prices. Investments for which, in the judgment of
the Service, no readily obtainable market quotations are available, are carried
at fair value as determined by the Service, based on methods that include
consideration of: yields or prices of municipal obligations of comparable
quality, coupon, maturity and type; indications as to values from dealers; and
general market conditions. The Service may use electronic data processing
techniques and/or a matrix system to determine valuations. Short-term
investments that mature in fewer than 60 days are valued at amortized cost.
- ------------------------------ 18
------------------------------
<PAGE>
Additional Information
FEBRUARY 28, 1994
- ----------------------------------------------------------------------------
QUARTERLY RESULTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Net Realized and
Unrealized Gain/ Net Increase in Net
Investment Net Investment (Loss) on Assets Resulting
Income Income Investments From Operations
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
----------------------------------------------------------------------------
<CAPTION>
PER PER PER PER
QUARTER ENDED TOTAL SHARE TOTAL SHARE TOTAL SHARE
TOTAL SHARE
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
----------------------------------------------------------------------------
AUGUST 31,
1992 $4,525,875 $.13 $3,784,459 $.11 $ 6,021,320 $.18 $ 9,805,779 $.29
NOVEMBER 30,
1992 6,700,130 .20 5,735,834 .17 (1,009,530) (.03) 4,726,304 .14
FEBRUARY 28,
1993 6,927,436 .20 5,789,926 .17 31,655,970 .93 37,445,896 1.10
MAY 31, 1993 7,247,334 .21 6,223,844 .18 (3,693,473) (.11) 2,530,371
.07
AUGUST 31,
1993 6,954,864 .20 5,796,493 .17 14,702,966 .43 20,499,459 .60
NOVEMBER 30,
1993 6,803,020 .17 5,731,243 .17 (1,381,672) (.08) 4,349,571 .09
FEBRUARY 28,
1994 6,678,467 .19 5,549,454 .16 (1,850,523) (.03) 1,381,084 .04
----------------------------------------------------------------------------
</TABLE>
- --------------------------- 19
------------------------------
<PAGE>
MANAGED MUNICIPALS
PORTFOLIO INC.
Directors
Charles F. Barber
Allan J. Bloostein
Robert E. Borgesen
Martin Brody
Dwight B. Crane
Heath B. McLendon
Officers
Heath B. McLendon
CHAIRMAN OF THE BOARD AND
INVESTMENT OFFICER
Stephen J. Treadway
PRESIDENT
Richard P. Roelofs
EXECUTIVE VICE PRESIDENT
Joseph P. Deane
VICE PRESIDENT AND
INVESTMENT OFFICER
David Fare
INVESTMENT OFFICER
Vincent Nave
TREASURER
Francis J. McNamara, III
SECRETARY
Investment Adviser
Greenwich Street Advisors
Two World Trade Center
New York, New York 10048
Administrator
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
Auditors and Counsel
Coopers & Lybrand
One Post Office Square
Boston, Massachusetts 02109
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Transfer Agent
The Shareholder Services Group, Inc.
Exchange Place
Boston, Massachusetts 02109
Custodian
Boston Safe Deposit and
Trust Company
One Boston Place
Boston, Massachusetts 02108
- ------------------------------ 20
------------------------------
<PAGE>
- --------------------------------------------------------------------------------
This report is sent to the shareholders of the
Managed Municipals Portfolio Inc.
for their information. It is not a Prospectus,
circular or representation intended for use in the
purchase or sale of shares of the Portfolio or of any
securities mentioned in the report.
- --------------------------------------------------------------------------------
