<PAGE>
- -----------------------------------------------------
MANAGED MUNICIPALS
PORTFOLIO INC.
SEMI-ANNUAL REPORT
November 30, 1993
[LOGO]
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- --
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.
November 30, 1993
DEAR SHAREHOLDER:
The strong price appreciation of the securities in the Portfolio over
the course of 1993 resulted directly from the historic decline in interest
rates as well as the enactment of new tax legislation that additionally
fueled investors' demand for tax-exempt issues. Securities regulations
which
govern the management of this and other closed-end funds require that the
Portfolio distribute annually any realized net capital gains;
consequently,
in December, the Portfolio paid a short-term capital gain of $0.51 per
share.
Because the Portfolio's capital gain was substantially more than its
current tax-exempt dividend, even after the assessment of Federal income
tax, the Portfolio's Board of Directors elected to forgo the regular
monthly
dividend for the month of December only. This action is intended to
support
the dividend level going forward.
During the Portfolio's past fiscal quarter, the first blush of
positive
economic news permeated the bond market. The combination of record new
issue
volume and stronger economic fundamentals caused all fixed income
securities
to move to higher rates (and lower prices) by late November. We think
municipal new issue volume will decline substantially in the future and
that
tax-exempt bonds should outperform taxable bonds over the next year in any
market climate.
We are implementing a two-pronged strategy for our investment
decisions:
the first prong consists of maintaining a high-grade approach to credit
quality and the second is to shorten the average maturities in the
Portfolio. Current tax rates in the United States make municipals a very
prudent investment on an after-tax basis. However, against the backdrop of
an improving economy which could ignite expectations for higher inflation
and interest rates, we feel a more conservative approach to interest rate
risk will prove the most prudent course to pursue.
CONTINUED
- --------------------------- 1
------------------------------
<PAGE>
From time to time, we also will use a futures contract to enhance the
defensive nature of the Portfolio. The use of a futures contract (which is
an agreement to buy or sell 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. We believe preservation of
capital
is a critical element in our total return philosophy of investing.
As of November 30, 1993, 22.5% of the Portfolio was rated AAA, 21.1%
was
rated AA and 21.3% was rated A by either Standard & Poor's Corporation or
Moody's Investors Service, Inc. (two nationally recognized bond rating
organizations). The average maturity was 23 years, and the majority of the
Portfolio's holdings were in the transportation, general obligation,
hospital and education sectors.
If you have any questions or comments about your investment in the
Portfolio, please contact The Shareholder Services Group, Inc. at (800)
331-1710. We appreciate your continued confidence.
Sincerely,
Heath B. McLendon Joseph P. Deane
CHAIRMAN OF THE BOARD VICE PRESIDENT AND
INVESTMENT OFFICER
January 5, 1994
- ------------------------------ 2
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<PAGE>
UNAUDITED FINANCIAL DATA
PER SHARE OF COMMON STOCK
<TABLE>
<CAPTION>
NYSE NET ASSET DIVIDEND
CLOSING PRICE VALUE PAID
------------- --------- --------
- -
<S> <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
</TABLE>
DIVIDEND DATA*
FOR THE THREE MONTH PERIOD ENDED NOVEMBER 30, 1993
<TABLE>
<CAPTION>
EQUIVALENT TAXABLE
DISTRIBUTION RATE
-----------------------------
- -
PER SHARE ANNUALIZED ASSUMING ASSUMING
DIVIDEND DISTRIBUTION 31% FEDERAL 36%
FEDERAL
DISTRIBUTIONS RATE TAX BRACKET TAX
BRACKET
------------- ------------ ----------- ----------
- -
<S> <C> <C> <C>
$0.366 5.48% 7.94% 8.56%
<FN>
------------
* Based on November 30, 1993 net asset value of $13.36 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.
- ---------------------------------- 3
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<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (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--94.3%
CALIFORNIA -- 11.5%
$ 2,500,000 California Pollution Control Financing Authority,
(Pacific Gas & Electric Company), Series A,
6.625% due 6/1/09 A-
1 A $ 2,715,625
3,905,000 Culver City, California, Redevelopment Finance
Authority, Tax Allocation, (MBIA insured),
4.900% due 11/1/08
Aaa AAA 3,748,800
1,000,000 California Health Facilities -- Kaiser Permanente,
5.450% due 10/1/13+
Aa2 AA 973,750
Foothill, California, Transportation Zone, Certificates
of Participation, Refunding, Series A:
1,010,000 5.150% due 5/1/01
Baa1 NR 998,637
1,550,000 5.250% due 5/1/02
Baa1 NR 1,530,625
Los Angeles, California, Regional Airport Improvement
Corporation:
3,300,000 (Los Angeles International Airport), Lease Revenue,
6.500% due 1/1/32 NR
A- 3,436,125
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 4
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<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (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)
$ 3,500,000 Regional Airport Improvement, Lease Revenue,
6.800% due 1/1/27 NR
A- $ 3,718,750
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 Reassessment
Financing Authority Revenue, Series A,
5.700% due 9/2/01
Baa NR 8,075,113
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 1,107,250
2,950,000 6.800% due 1/1/19
Aa3 AA 3,237,625
5,000,000 San Francisco, California, City Sewer Refunding, (AMBAC
insured),
5.500% due 10/1/15
Aaa AAA 4,968,750
San Joaquin Hills, California, Transportation Authority,
Condor Agency Tour Road, Sr. Lien Revenue:
16,000,000 Zero Coupon due 1/1/17 NR
NR 3,220,000
25,000,000 Zero Coupon due 1/1/18 NR
NR 4,687,500
10,000,000 Zero Coupon due 1/1/20 NR
NR 1,625,000
25,000,000 Zero Coupon due 1/1/25 NR
NR 2,875,000
1,700,000 Sonoma County, California, Detention Facilities
Improvement Program, Certificates of Participation,
5.000% due 11/15/13 A-
1 A+ 1,553,375
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 5
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<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (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)
COLORADO -- 9.8%
$ 4,000,000 Colorado Health Facilities Authority, (Swedish Medical
Center), Series A,
6.800% due 1/1/23 A
A $ 4,305,000
2,000,000 Colorado Springs, Colorado, Airport Revenue, Series A,
7.000% due 1/1/22 NR
BBB 2,140,000
100,000,000 Dawson Ridge Metropolitan District #1, Series B,
Zero coupon due 10/1/22
Aaa NR 16,250,000
Denver, Colorado, Airport Revenue, Series C:
4,000,000 6.750% due 11/15/22
Baa1 BBB 4,135,000
18,325,000 6.125% due 11/15/25
Baa1 BBB 17,866,875
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+ 1,417,750
FLORIDA -- 6.7%
Charlotte County, Florida, Utility Revenue, (FGIC
Insured):
2,600,000 5.375% due 10/1/08
Aaa AAA 2,609,750
3,760,000 5.500% due 10/1/09
Aaa AAA 3,797,600
3,530,000 5.250% due 10/1/10
Aaa AAA 3,463,812
10,500,000 Florida State Turnpike Authority Revenue, Series A,
(FGIC insured),
5.250% due 7/1/11
Aaa AAA 10,290,000
5,000,000 Hillsborough County, Florida, Aviation Authority
Revenue, (FGIC insured),
5.500% due 10/1/13
Aaa AAA 4,943,750
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 6
- ------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (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)
Tampa, Florida, Revenue Bonds, (Aquarium Project):
$ 3,000,000 7.550% due 5/1/12 NR
NR $ 3,330,000
2,000,000 7.750% due 5/1/27 NR
NR 2,232,500
GUAM -- 0.5%
Guam Power Authority Revenue, Series A:
850,000 5.100% due 10/1/03 NR
BBB 827,688
550,000 5.200% due 10/1/04 NR
BBB 534,875
850,000 5.250% due 10/1/05 NR
BBB 821,312
INDIANA -- 5.1%
18,305,000 Indiana Bond Bank, Revenue Guarantee, State Revolving
Fund, Series A,
6.000% due 2/1/15 NR
A 18,671,100
4,000,000 Indiana Port Commission Revenue Refunding Project,
(Cargill Inc. Project),
6.875% due 5/1/12
Aa3 NR 4,475,000
LOUISIANA -- 3.6%
10,000,000 Lake Charles, Louisiana, (Harbor & Terminal Port
Facilities Project), (Trunkline LNG Company Project),
7.750% due 8/15/22
Ba1 NR 11,425,000
4,500,000 Saint Martin Parish, Louisiana, Industrial Project,
(Cargill Inc. Project),
6.625% due 10/1/12
Aa3 NR 4,950,000
MAINE -- 2.6%
11,880,000 Maine Municipal Bond Bank, Refunding Revenue, Series A,
5.500% due 11/1/09 Aa
A+ 11,761,200
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 7
- ------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (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)
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 -- 4.1%
16,375,000 Midland County, Michigan, Economic Development
Corporation, Pollution Control Revenue, Series B,
9.500% due 7/23/09 NR
NR 18,933,594
MINNESOTA -- 5.1%
2,500,000 Duluth, Minnesota, Seaway Port Authority, Industrial
Development, Dock & Wharf Revenue, (Cargill Inc.
Project),
6.800% due 5/1/12
Aa3 NR 2,787,500
15,850,000 St. Paul, Minnesota, Housing Redevelopment Agency,
Hospital Revenue, Series D, (Health East Project),
9.750% due 11/1/17
Baa1 BBB- 18,371,056
2,000,000 St. Paul, Minnesota, Housing & Redevelopment Authority,
Sales Tax Revenue, (Civic Center Project),
5.450% due 11/1/13 A
A 1,957,500
MONTANA -- 1.1%
5,000,000 Montana State Board Investment Resources Recovery,
Yellowstone Energy LP Project,
7.000% due 12/31/19 NR
NR 5,075,000
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 8
- ------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (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 HAMPSHIRE -- 0.8%
$ 3,500,000 New Hampshire State Business Project, (Manchester
Airport Project),
6.500% due 1/1/19 Aa
AA $ 3,766,875
NEW JERSEY -- 1.8%
5,200,000 Hudson County, New Jersey, Improvement Authority,
Essential Purpose -- Remarketed,
6.625% due 8/1/25 NR
A+ 5,713,500
New Jersey State Educational Facilities Authority
Revenue, (Ramapo College), (MBIA insured), Series D,
1,170,000 5.350% due 7/1/07
Aaa AAA 1,186,088
1,240,000 5.400% due 7/1/08
Aaa AAA 1,257,050
NEW YORK -- 4.0%
New York State, Dormitory Authority:
4,180,000 (City University),
5.750% due 7/1/06
Baa1 BBB 4,239,882
14,000,000 (State University), Series A,
5.500% due 5/15/06
Baa1 BBB+ 13,982,500
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 1,548,000
8,325,000 North Carolina Municipal Power Agency 1, (Catawba
Electric), Revenue Bonds,
5.750% due 10/1/15 A
A 8,356,219
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 9
- ------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (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)
OHIO -- 3.1%
$ 3,000,000 Franklin County, Ohio, Convention Facilities Authority,
Tax & Lease Revenue Anticipation Notes, (MBIA insured),
5.850% due 12/1/19
Aaa AAA $ 3,108,750
3,870,000 Montgomery County, Ohio, General Obligation, Refunding,
5.350% due 9/1/08 Aa
AA 3,932,888
7,000,000 Ohio State, Air Quality Development Authority, Pollution
Control, (Ohio Edison), Series B, (AMBAC Insured),
5.625% due 11/15/29
Aaa AAA 6,965,000
PENNSYLVANIA -- 3.9%
Commonwealth of Pennsylvania, Certificates of
Participation, (AMBAC Insured):
2,500,000 Series A, 5.250% due 7/1/10
Aaa AAA 2,425,000
15,000,000 Series S, 5.250% due 7/1/11
Aaa AAA 14,531,250
1,000,000 Schuykill County, Pennsylvania, Resource Recovery
Revenue Refunding, Industrial Development Authority,
6.500% due 1/1/10 NR
NR 990,000
RHODE ISLAND -- 5.2%
2,500,000 Rhode Island Housing & Mortgage Finance Authority, Home
Ownership -- Remarketed,
6.650% due 10/1/12 Aa
AA+ 2,606,250
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 10
- ------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (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)
RHODE ISLAND (CONTINUED)
$ 12,050,000 Rhode Island State Health & Higher Education Facilities,
Educational Building Corporation Revenue, (Roger
Williams College),
6.500% due 11/15/24 NR
AAA $ 13,074,250
8,100,000 Rhode Island State, Public Building Authority, Series A,
(AMBAC insured),
5.250% due 2/1/10
Aaa AAA 7,846,875
SOUTH CAROLINA -- 2.1%
Myrtle Beach, South Carolina, Certificates of
Participation, (Myrtle Beach Convention Center Project):
2,000,000 6.875% due 7/1/07
Baa1 BBB+ 2,135,000
7,315,000 6.875% due 7/1/17
Baa1 BBB+ 7,644,175
TEXAS -- 3.1%
12,250,000 Sam Rayburn, Texas, Municipal Power Agency, Supply
Systems, Revenue Refunding, Series A,
6.750% due 10/1/14
Baa1 BBB 13,076,875
1,000,000 Texas State Veterans Housing Assistance,
6.450% due 6/1/23 Aa
AA 1,056,250
VIRGINIA -- 5.1%
4,700,000 Harrisonburg, Virginia, Redevelopment and Housing
Authority, Public Facility Lease Revenue,
6.500% due 9/1/14 A-
1 NR 4,964,375
Virginia Beach, Virginia, General Obligation Refunding:
1,555,000 5.400% due 7/15/09 Aa
AA 1,578,325
755,000 5.450% due 7/15/10 Aa
AA 766,325
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 11
- ------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (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)
VIRGINIA (CONTINUED)
$ 1,755,000 5.450% due 7/15/11 Aa
AA $ 1,783,519
14,000,000 Virginia State Public Building Authority, Series C,
5.750% due 8/1/12 Aa
AA 14,297,500
WASHINGTON -- 6.9%
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 A-
1 A 5,195,312
5,650,000 Chelan County, Washington, Public Utilities District
#001, (Chelan Hydro), Series E,
5.700% due 7/1/08 A-
1 A+ 5,727,687
18,500,000 Washington State Health Care Facilities, (Sisters of
Providence Hospital),
7.875% due 10/1/10++ A-
1 AA- 20,429,500
WISCONSIN -- 4.1%
11,220,000 Wisconsin State, General Obligation, Series B,+++
6.600% due 1/1/22 Aa
AA 12,159,675
6,770,000 Wisconsin State Health and Educational Facilities
Authority, (Marquette University Project), (MBIA
insured),
5.500% due 12/1/11
Aaa AAA 6,659,987
- --------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS AND NOTES
(COST $406,353,719)
$ 429,951,619
- --------------------------------------------------------------------------
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 12
- ------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (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 -- 5.1%
ARIZONA -- 0.1%
$ 500,000 Pinal County, Arizona Industrial Development Authority,
Polution Control,
2.000% Rate due 12/1/09+ NR
NR $ 500,000
CALIFORNIA -- 1.7%
200,000 California Pollution Control Project, Series A, (Shell
Oil),
1.800% due 10/1/10+
VMIG1 A1+ 200,000
1,400,000 California Financial Resources Recovery Revenue, (Ultra
Power Project), Malaga-A,
2.250% due 4/1/17+ P1
NR 1,400,000
1,000,000 California Pollution Control Financing Authority,
(Rocklin Project), Series A,
2.250% due 6/1/17+ NR
NR 1,000,000
2,300,000 California Health Facilities Financing Authority, (St.
Joseph Project A),
1.800% due 7/1/13+
VMIG1 NR 2,300,000
400,000 California Health Facilities Financing Authority, (St.
Joseph Project B),
1.800% due 7/1/13+
VMIG1 NR 400,000
400,000 California Pollution Control Financing Resources,
(Delano Project),
2.200% due 8/1/19+ P1
NR 400,000
2,100,000 Irvine Ranch, California, Water District Authority,
Series A,
1.850% due 10/1/00+ NR
A1+ 2,100,000
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 13
- ------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (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)
DISTRICT OF COLUMBIA -- 0.4%
$ 1,900,000 District of Columbia, Refunding, Series A-2,
2.200% due 10/1/07+
VMIG A1+ $ 1,900,000
MISSISSIPPI -- 0.0%
100,000 Jackson County, Mississippi, Pollution Control Revenue,
1.800% due 12/1/16+ P1
NR 100,000
NEW YORK -- 0.5%
700,000 New York City, New York, Housing Development St-A,
2.300% due 1/1/23+ NR
A1+ 700,000
1,500,000 New York City, New York, Industrial Development Revenue,
2.100% due 11/1/15+ NR
A1+ 1,500,000
TEXAS -- 1.9%
8,800,000 Gulf Coast Waste Disposal Authority, (Amoco Project),
1.800% due 10/1/17+
VMIG1 A1+ 8,800,000
WYOMING -- 0.5%
1,500,000 Green River, Wyoming, Pollution Control Revenue,
2.150% due 6/1/07+ NR
NR 1,500,000
600,000 Sublette City, Wyoming Pollution Control Revenue,
Exxon-87B,
2.150% due 7/1/17+ P1
A1+ 600,000
TOTAL SHORT-TERM TAX-EXEMPT INVESTMENTS
(COST $23,400,000)
$ 23,400,000
- --------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $429,753,719*)
99.4% $ 453,351,619
- --------------------------------------------------------------------------
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 14
- ------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Market
Value
Contracts
(Note 1)
- --------------------------------------------------------------------------
<C> <S> <C>
<C> <C>
SHORT-TERM TAX-EXEMPT INVESTMENTS (CONTINUED)
FUTURES CONTRACTS -- SHORT POSITION
- -- (25.3%)
900 U.S. Treasury Bond Index Futures, December 1993
$(103,950,000)
100 U.S. Treasury Bond Index Futures, March 1994
(11,421,875)
- --------------------------------------------------------------------------
TOTAL FUTURES CONTRACTS
(CONTRACT AMOUNT $118,514,063)
(25.3) (115,371,875)
OTHER ASSETS AND LIABILITIES (NET)
25.9 118,307,619
- --------------------------------------------------------------------------
NET ASSETS
100.0% $ 456,287,363
- --------------------------------------------------------------------------
<FN>
* Aggregate cost for Federal tax purposes.
+ Variable rate demand bonds are payable upon not more than one days' notice.
++ Restricted as to resale. See Note 5.
+++ $5,000,000 segregated to cover open futures contracts.
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 15
- ------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1993 (UNAUDITED) (CONTINUED)
SUMMARY OF MUNICIPAL BONDS BY COMBINED RATINGS
<TABLE>
<CAPTION>
STANDARD
& PERCENT
MOODY'S POOR'S OF VALUE
<S> <C> <C> <C>
Aaa or AAA 22.5 %
Aa AA 21.1
A A 21.3
Baa BBB 21.3
Ba BB 2.5
P1 SP1+ 1.0
NR NR 10.3
-----------
100.0 %
-----------
-----------
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 16
- ------------------------------
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1993 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
-------------------------------------------------------------
ASSETS:
Investments, at value (Cost $429,753,719)
(Note 1)
See accompanying schedule $453,351,619
Cash 715,442
Receivable for short futures
contracts position 118,514,063
Receivable for investment
securities sold 8,051,515
Interest receivable 6,746,825
-------------------------------------------------------------
TOTAL ASSETS 587,379,464
-------------------------------------------------------------
LIABILITIES:
Financial futures contracts --
short position, at value
(Cost $118,514,063) (Note 1)
See accompanying schedule $115,371,875
Payable for investment
securities purchased 10,021,046
Variation margin on short
futures contracts 3,142,188
Dividends payable 2,083,332
Investment advisory fee payable
(Note 2) 262,613
Administration fee payable
(Note 2) 75,032
Custodian fees payable (Note 2) 18,600
Accrued Directors' fees and
expenses (Note 2) 6,000
Transfer agent fees payable
(Notes 2 and 4) 1,500
Accrued expenses and other
payables 109,915
-------------------------------------------------------------
TOTAL LIABILITIES 131,092,101
-------------------------------------------------------------
NET ASSETS $456,287,363
-------------------------------------------------------------
NET ASSETS consist of:
Undistributed net investment
income $ 1,811,812
Accumulated net realized gain on investment
sold 18,599,209
Unrealized appreciation of
investments 26,740,088
Par value 34,153
Paid-in capital in excess of
par value 409,102,101
-------------------------------------------------------------
TOTAL NET ASSETS $456,287,363
-------------------------------------------------------------
NET ASSET VALUE, offering price and redemption price per
share
($456,287,363 DIVIDED BY 34,152,990 shares of common stock
outstanding) $13.36
-------------------------------------------------------------
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 17
- ------------------------------
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1993 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
----------------------------------------------------------------------
INVESTMENT INCOME:
Interest $13,757,884
----------------------------------------------------------------------
EXPENSES:
Investment advisory fee (Note 2) $1,597,987
Administration fee (Note 2) 456,568
Custodian fees (Note 2) 36,553
Legal and audit fees 36,274
Directors' fees and expenses (Note 2) 25,663
Transfer agent fees (Note 2) 10,794
Other 66,309
----------------------------------------------------------------------
TOTAL EXPENSES 2,230,148
----------------------------------------------------------------------
NET INVESTMENT INCOME 11,527,736
----------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (NOTES 1 AND 3):
Net realized gain on investments sold during the
period 5,953,624
Net change in unrealized appreciation of:
Securities 4,225,482
Futures contracts 3,142,188
----------------------------------------------------------------------
Net unrealized appreciation of investments during
the period 7,367,670
----------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS 13,321,294
----------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $24,849,030
----------------------------------------------------------------------
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 18
- ------------------------------
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED NOVEMBER 30, 1993 (UNAUDITED)
<TABLE>
<CAPTION>
Six Months
Ended
11/30/93 Period Ended
(unaudited) 5/31/93*
<S> <C> <C>
-------------------------------------------------------------
Net investment income $11,527,736 $ 21,534,063
Net realized gain on
investments sold during the
period 5,953,624 13,601,869
Net unrealized appreciation of
investments, and futures
contracts during the period 7,367,670 19,372,418
-------------------------------------------------------------
Net increase in net assets
resulting from operations 24,849,030 54,508,350
Distributions to shareholders
from:
Net investment income (12,499,995 ) (18,749,992)
Net realized gain on
investments -- (956,284)
Net increase in net assets from
Portfolio share transactions
(Note 4) -- 409,735,872
Offering cost charged to
paid-in-capital (Note 4) -- (699,626)
-------------------------------------------------------------
Net increase in net assets 12,349,035 443,838,320
NET ASSETS:
Beginning of period 443,938,328 100,008
-------------------------------------------------------------
End of period (including
undistributed net investment
income of $1,811,812 and
$2,784,071, respectively) $456,287,363 $443,938,328
-------------------------------------------------------------
<FN>
* The Portfolio commenced operations on June 26, 1992.
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 19
- ------------------------------
<PAGE>
FINANCIAL HIGHLIGHTS
NOVEMBER 30, 1993 (UNAUDITED)
<TABLE>
<CAPTION>
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Six Months
Ended
11/30/93# Period
Ended
(unaudited)
5/31/93*
<S> <C> <C>
------------------------------------------------------------------------
Operating performance:
Net asset value, beginning of period $ 13.00 $ 12.00
------------------------------------------------------------------------
Net investment income 0.34 0.63
Net realized and unrealized gain on
investments 0.35 0.97
------------------------------------------------------------------------
Net increase in net assets resulting from
operations 0.69 1.60
------------------------------------------------------------------------
Offering cost charged to paid-in-capital --
(0.02)
Distributions:
Dividends from net investment income (0.33)
(0.55)
Distributions from net realized capital gains --
(0.03)
------------------------------------------------------------------------
Total distributions (0.33)
(0.58)
------------------------------------------------------------------------
Net asset value, end of period $ 13.36 $ 13.00
------------------------------------------------------------------------
Market value, end of period $ 12.25 $ 12.25
------------------------------------------------------------------------
Total investment return*** 2.32%
7.02%
------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in 000's) $456,287 $443,938
Ratio of operating expenses to average net
assets 0.98%**
0.98%**
Ratio of net investment income to average net
assets 5.05%**
5.48%**
Portfolio turnover rate 32%
169%
------------------------------------------------------------------------
<FN>
* The Portfolio commenced operations on June 26, 1992.
** Annualized.
*** Total return represents aggregate return based on market value for the
period indicated.
# The per share amounts have been calculated using the monthly average
shares method, which more appropriately presents per share data for the
period since use of the undistributed method did not accord with the
results of operations.
</TABLE>
SEE NOTES TO
FINANCIAL STATEMENTS.
- ---------------------------------- 20
- ------------------------------
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1993 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES.
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 preparation of its financial statements in conformity with
generally accepted accounting principles.
PORTFOLIO VALUATION: Investments are valued by The Boston Company Advisors,
Inc. ("Boston Advisors") 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.
FUTURES CONTRACTS: Upon entering into a futures contract, the Portfolio is
required to deposit with the broker an amount of cash or cash equivalents
equal
to a certain percentage of the contract amount. This is known as the "initial
margin." Subsequent payments ("variation margin") are made or received by the
Portfolio each day, depending on the daily fluctuation of the value of the
contract.
For financial statement purposes, an amount equal to the settlement amount
of
the contract is included in the Statement of Assets and Liabilities as an
asset
and as an equivalent liability. For long futures positions, the asset is
marked-to-market daily to reflect the current market value of the futures
contract; for short futures positions, the liability is marked-to-market daily
to reflect the current market value. The daily changes in the contract are
recorded as unrealized gains or losses. The Portfolio recognizes a realized
gain
or loss when the contract is closed.
- ---------------------------------- 21
------------------------------
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1993 (UNAUDITED) (CONTINUED)
There are several risks in connection with the use of futures contracts as
a
hedging device. The change in value of futures contracts primarily corresponds
with the value of their underlying instruments, which may not correlate with
the
change in value of the hedged investments. In addition, there is the risk the
Portfolio may not be able to enter into a closing transaction because of an
illiquid secondary market.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded as of the trade date. Securities purchased or sold on a when-issued
or
delayed-delivery basis may be settled a month or more after trade date.
Realized
gains and losses on investments sold are recorded on the basis of identified
cost. Interest income is recorded on the accrual basis.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the
Portfolio to make monthly distributions of substantially all of its net
investment income to shareholders. Net realized capital gains, if any, will be
distributed to shareholders at least once a year. In addition, in order to
avoid
the application of a 4% nondeductible excise tax on certain undistributed
amounts of ordinary income and capital gains, the Portfolio may make an
additional distribution shortly before December 31 in each year of any
undistributed ordinary income or capital gains and expects to make any other
distributions as are necessary to avoid the application of this tax. To the
extent that net realized capital gains can be offset by capital losses and
loss
carryforwards, it is the policy of the Portfolio not to distribute such gains.
FEDERAL INCOME TAXES: It is the policy of the Portfolio to qualify as a
regulated investment company, if such qualification is in the best interest of
its shareholders, by complying with the requirements of the Internal Revenue
Code of 1986, as amended, applicable to regulated investment companies and by
distributing substantially all of its earnings to its shareholders. Therefore,
no Federal income tax provision is required.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER RELATED PARTY
TRANSACTIONS.
Up to the close of business on July 30, 1993, the Portfolio was party to an
investment advisory agreement with Shearson Lehman Brothers Inc. ("Shearson
Lehman Brothers") on behalf of Shearson Lehman Advisors, a member of the Asset
Management Group of Shearson Lehman Brothers. Under the investment advisory
agreement, the Portfolio paid a monthly fee at the annual rate of .70% of the
value of its average daily net assets.
- ------------------------------ 22
------------------------------
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1993 (UNAUDITED) (CONTINUED)
As of the close of business on July 30, 1993, The Travelers Inc. (which at
the time was known as Primerica Corporation) ("Travelers") and Smith Barney,
Harris Upham & Co. Incorporated completed the acquisition of substantially all
of the domestic retail brokerage and asset management business of Shearson
Lehman Brothers and Smith Barney, Harris Upham & Co. Incorporated was renamed
Smith Barney Shearson Inc. ("Smith Barney Shearson").
As of the close of business on July 30, 1993, Greenwich Street Advisors, a
division of Mutual Management Corp., which is controlled by Smith Barney
Shearson Holdings Inc. ("Holdings"), succeeded Shearson Lehman Advisors as the
Portfolio's investment adviser. Holdings is a wholly owned subsidiary of
Travelers. The new investment advisory agreement with Greenwich Street
Advisors
(the "Advisory Agreement") contains terms and conditions substantially similar
to the investment advisory agreement with the predecessor investment adviser
and
provides for payment of fees at the same rates as were paid to such
predecessor
investment adviser.
The Portfolio has also entered in to an administration agreement
("Administration Agreement") with Boston Advisors, an indirect wholly owned
subsidiary of Mellon Bank Corporation ("Mellon Bank"). Under the
Administration
Agreement, the Portfolio pays a monthly fee at the annual rate of .20% of the
value of its average daily net assets. Prior to the close of business on May
21,
1993, Boston Advisors served as sub-investment adviser and administrator to
the
Portfolio.
No officer, director, or employee of Smith Barney Shearson or Boston
Advisors
or of any parent or subsidiary of those corporations receives any compensation
from the Portfolio for serving as a Director or officer of the Portfolio. The
Portfolio pays each Director, who is not an officer, director or employee of
Smith Barney Shearson or Boston Advisors or any of their affiliates, $5,000
per
annum plus $500 per meeting attended and reimburses each such Director for
travel and out-of-pocket expenses.
Boston Safe Deposit and Trust Company ("Boston Safe"), an indirect wholly
owned subsidiary of Mellon Bank, serves as the Portfolio's custodian. The
Shareholder Services Group, Inc., a subsidiary of First Data Corporation,
serves
as the Portfolio's transfer agent.
- ---------------------------------- 23
------------------------------
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1993 (UNAUDITED) (CONTINUED)
3. SECURITIES TRANSACTIONS.
For the six months ended November 30, 1993, cost of purchases and proceeds
from sales of investment securities (excluding short-term investments)
aggregated $131,997,982 and $169,335,601, respectively.
At November 30, 1993, gross unrealized appreciation for all securities in
which there was an excess of value over tax cost amounted to $23,864,439, and
gross unrealized depreciation for all securities in which there was an excess
of
tax cost over value amounted to $266,539.
4. PORTFOLIO SHARES.
At November 30, 1993, 500,000,000 shares of common stock, with a par value
of
$.001 per share were authorized.
Common stock transactions were as follows:
<TABLE>
<CAPTION>
Period Ended
05/31/93*
<S> <C> <C>
- ------------------------------------------------------------------------------
- -------
SHARES
AMOUNT
- ------------------------------------------------------------------------------
- -------
INITIAL PUBLIC OFFERING 30,000,000
$360,000,000+
SUBSEQUENT OFFERING 4,144,656
49,735,872
- ---------------------------------------------------------------------------
TOTAL INCREASE 34,144,656
$409,735,872
- ---------------------------------------------------------------------------
<FN>
+Before organization costs charged to paid-in capital of $699,626.
*The Portfolio commenced operations on June 26, 1992.
</TABLE>
For the six months ended November 30, 1993, there was no change in capital
stock activity.
5. RESTRICTED SECURITY.
The following security is restricted as to resale and, accordingly, is
valued
at fair value in good faith by or under the direction of the Portfolio's Board
of Directors taking into consideration such factors as the Board deems
appropriate.
- ------------------------------ 24
------------------------------
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1993 (UNAUDITED) (CONTINUED)
The following table, in addition to showing the security's fair value and
value per unit, shows the acquisition date, the percentage of the Portfolio's
total net assets that the security comprises, as well as the aggregate cost.
<TABLE>
<CAPTION>
PERCENTAGE
PAR ACQUISITION FAIR OF
TOTAL VALUE PER
SECURITY VALUE DATE VALUE NET
ASSETS COST UNIT
<S> <C> <C> <C> <C>
<C> <C>
- ------------------------------------------------------------------------------
- -------
WASHINGTON STATE
HEALTH CARE
FACILITIES,
(SISTERS OF
PROVIDENCE
HOSPITAL), 7.875%
DUE 10/1/10 $18,500,000 6/25/92 $20,429,500
4.5% $19,689,550 $110.43
- ---------------------------------------------------------------------------
</TABLE>
The Portfolio may purchase securities which are subject to legal or
contractual restrictions on resale if not more than 5% of the value of the
Portfolio's total assets would be invested in such securities or in securities
for which there is no readily available market. In purchasing securities which
could not be sold by the Portfolio without registration under the Securities
Act
of 1933, as amended, the Portfolio will endeavor to obtain the right to
registration at the expense of the issuer. There generally will be a lapse of
time between the decision by the Portfolio to sell any such security and the
registration of the security permitting sale. During any such period, the
security will be subject to market fluctuations.
- ---------------------------------- 25
------------------------------
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1993 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
QUARTERLY RESULTS OF OPERATIONS
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>
QUARTER PER PER PER
PER
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
- ---------------------------------------------------------------------------
</TABLE>
- ------------------------------ 26
------------------------------
<PAGE>
MANAGED MUNICIPALS
PORTFOLIO INC.
DIRECTORS
Charles F. Barber
Allan J. Bloostein
Robert E. Borgesen
Marina Brody
Dwight B. Crane
Heath B. McLendon
OFFICERS
Heath B. McLendon
CHAIRMAN OF THE BOARD
Richard P. Roelofs
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
- ---------------------------------- 27
------------------------------
<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.
- ------------------------------------------------------------------------------
- --
