<PAGE>
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MANAGED MUNICIPALS
PORTFOLIO INC.
Annual Report
May 31, 1994
[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.
May 31, 1994
DEAR SHAREHOLDER:
We are pleased to provide you with the Annual Report and portfolio of
investments for Managed Municipals Portfolio for the fiscal year ended May
31, 1994. This concluded the Portfolio's second year of investment
operations. During this fiscal year, the Portfolio paid investors
dividends
of $0.67 per share of tax-exempt income and a distribution of $0.51 per
share from net realized capital gains. The Portfolio's net asset value
eroded by $0.74 to $12.26 from $13.00, which is in line with the $0.75
decline during the past 12 months in its stock price to $11.50 from
$12.25.
The Portfolio's dividend and capital gains distributions somewhat offset
this decline in its market price, resulting in a total return of 2.27% for
the 1994 fiscal year.
A TALE OF TWO BOND MARKETS:
"IT WAS THE BEST OF TIMES, IT WAS THE WORST OF TIMES . . ."
The past 12 months encompassed two very different market environments.
From May through the end of October 1993, it was the best of times in
terms
of the fixed-income markets, and many investors hoped that the market's
euphoria would last forever. Bond prices rose to extreme heights, which
provided the Portfolio with the unique opportunity to realize and then pay
a
very attractive capital gains distribution, and investors in the Portfolio
saw its net asset value reach a month-end high of $13.50 on September 30,
1993.
From November 1993 to the end of May 1994, however, it was a very
different market environment. After an extremely bullish bond market,
investors found themselves embroiled in a very bearish bond market and
facing the winter of despair. For the first time in close to five years,
market participants confronted a classic situation that, if in fact was
not
the worst of times, came very close. There was a
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<PAGE>
tremendous decline in bond prices, and as important as it was during the
first half of the Portfolio's fiscal year to be offensively positioned in
terms of security holdings, it now was equally as important to be
defensively positioned.
The Federal Reserve's increase in short-term rates was perhaps the
catalyst for the municipal market decline, but all of the fixed income
markets reacted much more powerfully than could have been anticipated,
perhaps even overreacted. We attribute the market's exaggerated response
on
both the upside and the downside to the winding and unwinding of some very
large leveraged trades that were put on by hedge funds. And it is no
secret
that some of these trades did not work out as anticipated, forcing
investors
to unwind their trades sooner than expected and thereby exacerbated the
municipal bond market's downturn. Now that this has passed, the market
should once again react to basic fundamentals more than anything else. As
long as the economic numbers continue to indicate that inflation is still
a
threat, we believe that the Federal Reserve will raise short-term interest
rates until the American economy begins to lose some steam. And as strong
as
the economy looks right now, it could be some time before it begins to
slow.
IT WAS THE AGE OF WISDOM, IT WAS THE AGE OF FOOLISHNESS . . .
Unlike many other investors who believed the bull market for bonds
seemingly would never end, we took an incredibly cautious stance last fall
towards the marketplace. We shortened the average life of the Portfolio's
holdings, raised the percentage of cash holdings, and made the dramatic
move
of hedging the Portfolio against declining bond prices. In sum, we took
about as defensive a position as we could, which is one of the reasons
that
relative to most of the Portfolio's peers it had one of the more stable
net
asset values and a positive total return for this fiscal year.
In late March and early April, we removed all of the hedges from the
Portfolio and began buying long-term municipal bonds. During market
declines, the area that usually declines the most is the high-grade area
of
the market because it is the most liquid. So in April, when we decided
that
the market had adjusted enough and consequently presented some good
investment opportunities, we were able to buy AA and AAA-rated securities
at
very attractive prices. Most of our purchases were in the general
obligation
and essential service revenue sectors, because we think they offer the
best
value at this time, defining value as the highest yield relative to their
credit risk. We are still wary of uninsured health care bonds for two
reasons: the 1986 tax act
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<PAGE>
materially changed the way hospitals are reimbursed by Medicare and
Medicaid; and the current health care package has too many uncertainties
associated with it. We have lengthened the average maturity of the
Portfolio
to 24 years, and have kept a fairly small cash position.
GREAT EXPECTATIONS . . .
By the end of the Portfolio's fiscal year, the worst of the volatility
and downside in the bond market was over. Could it go down from here? Yes,
but if it does, we doubt that the decline will be dramatic; it is far more
likely to be a minor correction. We are a little bit more aggressive on
the
municipal market right now because it is a much more benign investment
climate than it was, and we think that current interest rates represent
very
fair value.
We also believe that the supply and demand characteristics are very
positive for the municipal market and will moderate its volatility. In
terms
of demand, the Clinton tax package makes tax-exempt income for the
individual investor even more valuable than it was in the past. And there
is
also a great deal of institutional participation in our marketplace, which
we haven't seen for a long time.
In terms of supply, we anticipate a tremendous cutback in the supply
of
municipals coming in the market as a result of the rise in interest rates.
Over the next few years, the supply of municipal bonds could decline by 50
percent below 1993's record level. And because of this, we think that
tax-exempt securities will perform substantially better than taxable
issues.
As for the Portfolio's dividends, at their June meeting, the Board of
Directors approved an amendment to the Portfolio's Dividend Reinvestment
Plan. Under the Plan, a shareholder can elect to have dividends
automatically reinvested in shares of the Portfolio. If the net asset
value
per share of the Portfolio's stock at the time of valuation for purposes
of
the dividend distribution exceeds the market price of the stock, or if the
Portfolio declares a dividend or capital gains distribution payable only
in
cash, the Plan's purchasing agent will buy shares of the Portfolio in the
open market for the plan participants' accounts. Under the current Plan,
these purchases commence on the dividend payment date. The Directors
revised
the Plan to provide that the purchasing agent may commence purchases of
Portfolio shares on the open market as of record date in anticipation of
the
dividend payment. It is hoped that this will decrease the cost of the
repurchased shares by increasing the amount of time over which such
purchases will be made, so that
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<PAGE>
purchases on the open market will not be compacted into a small window
following the payment date. This revision will be effective upon the first
dividend declaration after September 1, 1994.
In closing, we would like to remind you that 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" or its stock symbol "MMU." The weekly closing price and its net
asset value per share are reported in BARRON'S and the Monday edition of
THE
WALL STREET JOURNAL. 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 look forward to another year of market
opportunities.
Sincerely,
Heath B. McLendon Joseph P. Deane
CHAIRMAN OF THE BOARD VICE PRESIDENT AND
INVESTMENT OFFICER
July 13, 1994
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<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 -- $0.510
January 31, 1994....... 12.625 13.07 0.061 --
February 28, 1994...... 12.125 12.84 0.061 --
March 31, 1994......... 11.375 12.23 0.061 --
April 30, 1994......... 11.250 12.23 0.061 --
May 31, 1994........... 11.500 12.26 0.061 --
</TABLE>
Dividend Data
For the Year Ended May 31, 1994
<TABLE>
<CAPTION>
Equivalent
Taxable Distribution Rate
-----------------------------
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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
------------- ------------ ----------- ----------
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<S> <C> <C> <C>
<C> <C>
$0.671 5.47% 7.60% 7.93%
8.55% 9.06%
<FN>
------------
* Based on income dividends of $0.061 for the twelve months ended May
31, 1994.
** Based on May 31, 1994 net asset value of $12.26 per share. Does not
include capital gains dividend of
$0.510 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 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.
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<PAGE>
Portfolio of Investments
MAY 31, 1994
<TABLE>
<S> <C> <C> <C>
KEY TO INSURANCE ABBREVIATIONS
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Federal Guaranty Insurance Corporation
MBIA -- Municipal Bond Investors Assurance
</TABLE>
<TABLE>
<CAPTION>
Rating Market
(unaudited) Value
Face Value
Moody's S&P (Note 1)
<C> <S> <C>
<C> <C>
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MUNICIPAL BONDS AND NOTES--99.5%
ALASKA -- 2.1%
$ 10,115,000 Valdez, Alaska, Marine Terminal Revenue, 5.650% due
12/1/28
A1 AA- $ 9,014,994
CALIFORNIA -- 9.0%
2,000,000 California Housing Financing Agency Revenue, Series A,
6.550% due 8/1/26
Aa A+ 1,985,000
Los Angeles, California, Regional Airport Improvement
Corporation:
3,300,000 (Los Angeles International Airport), Lease Revenue,
6.500% due 1/1/32
NR A- 3,229,875
3,500,000 Regional Airport Improvement, Lease Revenue, 6.800% due
1/1/27
NR A- 3,548,125
1,500,000 Los Angeles, California, Waste Water System Revenue,
Series B, (MBIA insured), 5.700% due 6/1/23
Aaa AAA 1,387,500
8,000,000 Los Angeles County, California, Metropolitan District
Revenue, (AMBAC insured), 5.250% due 7/1/23
Aaa AAA 6,830,000
</TABLE>
See Notes to
Financial Statements.
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<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
Rating Market
(unaudited) Value
Face Value
Moody's S&P (Note 1)
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<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
CALIFORNIA (CONTINUED)
$ 4,055,000 Orange County, California, Water District Authority,
Certificates of Participation, Series A, 5.500% due
8/15/09
Aa AA $ 3,791,425
5,000,000 San Francisco, California, City Sewer Refunding, (AMBAC
insured), 5.500% due 10/1/15
Aaa AAA 4,575,000
San Joaquin Hills, California, Transportation Authority,
Condor Agency Tour Road, Sr. Lien Revenue:
16,000,000 Zero Coupon due 1/1/17
NR NR 3,180,000
25,000,000 Zero Coupon due 1/1/18
NR NR 4,625,000
10,000,000 Zero Coupon due 1/1/20
NR NR 1,575,000
15,000,000 Zero Coupon due 1/1/25
NR NR 1,650,000
1,700,000 Sonoma County, California, Detention Facilities
Improvement Program, Certificates of Participation,
5.000% due 11/15/13
A1 A+ 1,430,125
COLORADO -- 7.9%
2,000,000 Colorado Springs, Colorado, Airport Revenue, Series A,
7.000% due 1/1/22
NR BBB 2,042,500
100,000,000 Dawson Ridge Metropolitan District #1, Series B,
Zero coupon due 10/1/22
Aaa NR 13,000,000
Denver, Colorado, Airport Revenue, Series C:
4,000,000 6.750% due 11/15/22
Baa1 BB 3,575,000
18,325,000 6.125% due 11/15/25
Baa1 BB 14,980,688
</TABLE>
See Notes to
Financial Statements.
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<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
Rating Market
(unaudited) Value
Face Value
Moody's S&P (Note 1)
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<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
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 $ 1,245,500
FLORIDA -- 2.4%
5,000,000 Hillsborough County, Florida, Aviation Authority Revenue,
(Tampa International Airport), (FGIC insured), 5.500% due
10/1/13
Aaa AAA 4,687,500
Tampa, Florida, Revenue Bonds, (Aquarium Project):
3,000,000 7.550% due 5/1/12
NR NR 3,191,250
2,000,000 7.750% due 5/1/27
NR NR 2,135,000
GEORGIA -- 3.7%
16,200,000 Atlanta, Georgia, Airport Facilities Revenue, Series B,
(AMBAC insured), 6.000% due 1/1/14
Aaa AAA 15,754,500
ILLINOIS -- 1.6%
7,145,000 Chicago, Illinois, Skyway Toll Bridge, Refunding Revenue,
6.500% due 1/1/10
Baa BBB- 6,903,856
INDIANA -- 5.1%
18,305,000 Indiana Bond Bank, Revenue Guarantee, State Revolving
Fund, Series A, 6.000% due 2/1/15
NR A 17,481,275
4,000,000 Indiana Port Commission Revenue Refunding Project,
(Cargill Inc. Project), 6.875% due 5/1/12
Aa3 NR 4,235,000
</TABLE>
See Notes to
Financial Statements.
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<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
Rating Market
(unaudited) Value
Face Value
Moody's S&P (Note 1)
- - --------------------------------------------------------------------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
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 $ 5,300,000
4,500,000 Saint Martin Parish, Louisiana, Industrial Project,
(Cargill Inc. Project), 6.625% due 10/1/12
Aa3 NR 4,713,750
MAINE -- 4.5%
10,880,000 Maine Municipal Bond Bank, Refunding Revenue, Series A,
5.500% due 11/1/09
AA A+ 10,240,800
10,000,000 Maine State Housing Authority, 5.700% due 11/15/26
A1 AA- 8,850,000
MARYLAND -- 0.3%
1,145,000 Baltimore County, Maryland, Mortgage Revenue, (Kingswood
Common Project), 5.750% due 9/1/20
NR AAA 1,054,831
MASSACHUSETTS -- 2.5%
7,000,000 Commonwealth of Massachusetts, General Obligation, Series
D, 5.750% due 5/1/12
A A+ 6,755,000
4,115,000 Massachusetts Bay Transportation Authority, Series B,
5.500% due 3/1/21
A A+ 3,734,363
MICHIGAN -- 4.7%
2,000,000 Michigan State Strategic Funding, Ltd., (Blue Water Fiber
Project), 8.000% due 1/1/12
NR NR 1,960,000
</TABLE>
See Notes to
Financial Statements.
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<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
Rating Market
(unaudited) Value
Face Value
Moody's S&P (Note 1)
- - --------------------------------------------------------------------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
MICHIGAN (CONTINUED)
$ 16,375,000 Midland County, Michigan, Economic Development
Corporation, Pollution Control Revenue, Series B, 9.500%
due 7/23/09
NR NR $ 18,073,906
MINNESOTA -- 4.8%
2,500,000 Duluth, Minnesota, Seaway Port Authority, Industrial
Development, Dock & Wharf Revenue, (Cargill Inc.
Project), 6.800% due 5/1/12
NR AA- 2,665,625
15,685,000 St. Paul, Minnesota, Housing Redevelopment Agency,
Hospital Revenue, Series D, (Health East Project), 9.750%
due 11/1/17
Baa BBB- 17,724,050
MONTANA -- 1.1%
5,000,000 Montana State Board Investment Resources Recovery,
Yellowstone Energy LP Project, 7.000% due 12/31/19
NR NR 4,806,250
NEW HAMPSHIRE -- 3.8%
New Hampshire Higher Education & Health Revenue, (Mary
Hitchcock Memorial Hospital Project):
7,000,000 5.250% due 8/15/21
Aaa AAA 6,028,750
6,755,000 5.750% due 8/15/23
Aaa AAA 6,231,488
3,500,000 New Hampshire State Business Project, (Manchester Airport
Project),
6.500% due 1/1/19
Aa AA 3,600,625
</TABLE>
See Notes to
Financial Statements.
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<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
Rating Market
(unaudited) Value
Face Value
Moody's S&P (Note 1)
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<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
NEW JERSEY -- 1.6%
$ 5,200,000 Hudson County, New Jersey, Improvement Authority,
Essential Purpose -- Remarketed, 6.625% due 8/1/25
NR A+ $ 5,440,500
1,500,000 Middlesex County, New Jersey, Certificates of
Participation, 6.000% due 8/15/14
Aaa AAA 1,496,250
NEW YORK -- 6.5%
10,000,000 New York State, Dormitory Authority, (State University),
Series A, 5.500% due 5/15/06
Baa1 BBB+ 9,687,500
New York State, Local Government Assistance:
8,225,000 Series B,
5.500% due 4/1/21
A A 7,340,813
5,300,000 Series C, 5.500% due 4/1/18
A A 4,756,750
6,500,000 New York State, Medical Care Facilities, 5.375% due
2/15/25
Aa AAA 5,646,875
NORTH CAROLINA -- 1.8%
8,325,000 North Carolina Municipal Power Agency 1, (Catawba
Electric), Revenue Bonds, 5.750% due 10/1/15
A A 7,763,062
OHIO -- 0.7%
3,000,000 Franklin County, Ohio, Convention Facilities Authority,
Tax & Lease Revenue Anticipation Notes, (MBIA insured),
5.850% due 12/1/19
Aaa AAA 2,906,250
</TABLE>
See Notes to
Financial Statements.
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<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
Rating Market
(unaudited) Value
Face Value
Moody's S&P (Note 1)
- - --------------------------------------------------------------------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
PENNSYLVANIA -- 2.5%
$ 3,900,000 Doylestown, Pennsylvania, Hospital Authority Revenue,
Series A, 5.000% due 7/1/23
Aaa AAA $ 3,261,375
5,000,000 Pennsylvania Economic Development Finance Authority,
(Resource Recovery -- Northampton Generating Project),
Series A, 6.400% due 1/1/09
NR NR 4,793,750
2,500,000 Pennsylvania State, Industrial Development Authority
Revenue, 6.000% due 1/1/12
Aaa AAA 2,478,125
RHODE ISLAND -- 4.2%
2,500,000 Rhode Island Housing & Mortgage Finance Authority, Home
Ownership -- Remarketed, 6.650% due 10/1/12
Aa AA+ 2,537,500
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 12,275,937
3,000,000 Rhode Island State, Public Building Authority, Series A,
(AMBAC insured), 5.250% due 2/1/10
Aaa AAA 2,733,750
</TABLE>
See Notes to
Financial Statements.
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<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
Rating Market
(unaudited) Value
Face Value
Moody's S&P (Note 1)
- - --------------------------------------------------------------------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
SOUTH CAROLINA -- 2.9%
Charleston County, South Carolina, Certificates of
Participation:
$ 1,000,000 5.900% due 6/1/07
Aaa AAA $ 998,750
1,000,000 6.000% due 6/1/09
Aaa AAA 986,250
1,000,000 6.100% due 12/1/10
Aaa AAA 991,250
Myrtle Beach, South Carolina, Certificates of
Participation, (Myrtle Beach Convention Center Project):
2,000,000 6.875% due 7/1/07
Baa1 BBB+ 2,032,500
7,315,000 6.875% due 7/1/17
Baa1 BBB+ 7,360,719
SOUTH DAKOTA -- 0.7%
3,000,000 South Dakota State Housing Authority, (Homeowners
Mortgage Project), 5.800% due 5/1/14
Aa AA+ 2,861,250
TEXAS -- 3.1%
12,250,000 Sam Rayburn, Texas, Municipal Power Agency, Supply
Systems, Revenue Refunding, Series A, 6.750% due 10/1/14
Baa BB 11,913,125
1,000,000 Texas State Veterans Housing Assistance, 6.450% due
6/1/23
Aa AA 1,003,750
VIRGINIA -- 4.7%
4,700,000 Harrisonburg, Virginia, Redevelopment and Housing
Authority, Public Facility Lease Revenue, (Jail &
Courthouse Project), 6.500% due 9/1/14
A NR 4,770,500
</TABLE>
See Notes to
Financial Statements.
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<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
Rating Market
(unaudited) Value
Face Value
Moody's S&P (Note 1)
- - --------------------------------------------------------------------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
VIRGINIA (CONTINUED)
$ 1,755,000 Virginia Beach, Virginia, General Obligation Refunding,
5.450% due 7/15/11
Aa AA $ 1,669,444
14,000,000 Virginia State Public Building Authority, Series C,
5.750% due 8/1/12
Aa AA 13,300,000
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+ 4,868,750
5,650,000 Chelan County, Washington, Public Utilities District
#001, (Chelan Hydro), Series E,
5.700% due 7/1/08
A1 A+ 5,416,938
18,200,000 Washington State Health Care Facilities, (Sisters of
Providence Hospital), 7.875% due 10/1/10
A1 AA- 19,769,750
WEST VIRGINIA -- 2.1%
9,000,000 Marion County, West Virginia, County Commission, 7.750%
due 12/1/11
NR NR 8,808,750
WISCONSIN -- 5.4%
4,070,000 Wisconsin State, General Obligation, Series B, 6.600% due
1/1/22
Aa AA 4,268,412
</TABLE>
See Notes to
Financial Statements.
- - ---------------------------------- 14
- - ------------------------------
<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
Rating Market
(unaudited) Value
Face Value
Moody's S&P (Note 1)
- - --------------------------------------------------------------------------
<C> <S> <C>
<C> <C>
MUNICIPAL BONDS AND NOTES (CONTINUED)
WISCONSIN (CONTINUED)
Wisconsin State Health and Educational Facilities
Authority:
$ 6,000,000 Aurura, Health Care Obligated Credit, (MBIA insured),
5.250% due 8/15/23
Aaa AAA $ 5,115,000
6,770,000 (Marquette University Project), (MBIA insured), 5.500%
due 12/1/11
Aaa AAA 6,219,937
8,215,000 Wisconsin State Transportation Revenue, Series A, 5.500%
due 7/1/22
A1 AA- 7,342,155
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TOTAL MUNICIPAL BONDS AND NOTES
(COST $422,859,271)
$420,609,218
- - --------------------------------------------------------------------------
</TABLE>
See Notes to
Financial Statements.
- - ---------------------------------- 15
- - ------------------------------
<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
Rating Market
(unaudited) Value
Face Value
Moody's S&P (Note 1)
- - --------------------------------------------------------------------------
<C> <S> <C>
<C> <C>
SHORT-TERM TAX-EXEMPT INVESTMENTS -- 0.9%
CALIFORNIA -- 0.3%
$ 300,000 California Health Facilities Financing Authority, Series
A, 2.950% due 3/1/20+
VMIG-1 A-1+ $ 300,000
700,000 Irvine Ranch, California, Water District Revenue, Series
B, 2.850% due 10/1/09+
NR A-1 700,000
DISTRICT OF COLUMBIA -- 0.2%
700,000 District of Columbia, Refunding Revenue, Series A-5,
3.000% due 10/1/07+
VMIG-1 A-1+ 700,000
FLORIDA -- 0.3%
1,200,000 Bay County, Florida, Hospital Systems, (Bay Medical),
3.150% due 4/1/18+
VMIG-1 NR 1,200,000
LOUISIANA -- 0.0%
200,000 East Baton Rouge Parish, Louisiana, Refunding Revenue,
3.200% due 6/1/98+
Aaa NR 200,000
NEW YORK -- 0.0%
200,000 New York City, New York, Subseries A-4, 3.200% due
8/1/21+
VMIG-1 A-1 200,000
TEXAS -- 0.1%
300,000 Gulf Coast Waste Disposal Authority, (Amoco Project),
3.100% due 8/1/23+
VMIG-1 A-1+ 300,000
WYOMING -- 0.0%
100,000 Vinta County, Wyoming, Pollution Control Revenue, 2.900%
due 12/1/22+
NR NR 100,000
</TABLE>
See Notes to
Financial Statements.
- - ---------------------------------- 16
- - ------------------------------
<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
Market
Value
(Note 1)
- - --------------------------------------------------------------------------
<C> <S> <C>
<C> <C>
TOTAL SHORT-TERM TAX-EXEMPT INVESTMENTS
(COST $3,700,000)
$ 3,700,000
- - --------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $426,559,271*)
100.4% 424,309,218
OTHER ASSETS AND LIABILITIES (NET)
(0.4) (1,516,803)
- - --------------------------------------------------------------------------
NET ASSETS
100.0% $422,792,415
- - --------------------------------------------------------------------------
<FN>
* Aggregate cost for Federal tax purposes.
+ Variable rate demand bonds are payable upon not more than one day's notice.
</TABLE>
See Notes to
Financial Statements.
- - ---------------------------------- 17
- - ------------------------------
<PAGE>
Portfolio of Investments
MAY 31, 1994 (CONTINUED)
Summary of Municipal Bonds and Notes and Short-Term Tax-Exempt Investments by
Combined Ratings
(unaudited)
<TABLE>
<CAPTION>
STANDARD
& PERCENT
MOODY'S POOR'S OF VALUE
<S> <C> <C> <C>
Aaa or AAA 24.7 %
Aa AA 19.4
A A 23.0
Baa BBB 18.0
Ba BB 1.2
VMIG-1 A-1 0.8
NR NR 12.9
---------
100.0 %
---------
---------
</TABLE>
See Notes to
Financial Statements.
- - ---------------------------------- 18
- - ------------------------------
<PAGE>
Statement of Assets and Liabilities
MAY 31, 1994
<TABLE>
<CAPTION>
<S> <C> <C>
---------------------------------------------------------------
ASSETS:
Investments, at value (Cost $426,559,271)(Note
1)
See accompanying schedule $424,309,218
Cash 130,438
Interest receivable 6,803,988
---------------------------------------------------------------
TOTAL ASSETS 431,243,644
---------------------------------------------------------------
LIABILITIES:
Payable for investment
securities purchased $ 6,880,040
Dividends payable 1,148,205
Investment advisory fee payable
(Note 2) 249,894
Administration fee payable
(Note 2) 71,398
Custodian fees payable (Note 2) 11,000
Transfer agent fees payable
(Note 2) 3,100
Accrued expenses and other
payables 87,592
---------------------------------------------------------------
TOTAL LIABILITIES 8,451,229
---------------------------------------------------------------
NET ASSETS $422,792,415
---------------------------------------------------------------
NET ASSETS consist of:
Undistributed net investment
income $ 2,750,182
Accumulated net realized gain on investments 8,690,310
Unrealized depreciation of
investments (2,250,053)
Par value 34,496
Paid-in capital in excess of
par value 413,567,480
---------------------------------------------------------------
TOTAL NET ASSETS $422,792,415
---------------------------------------------------------------
NET ASSET VALUE, per share
($422,792,415 DIVIDED BY 34,495,979 shares of common stock
outstanding) $12.26
---------------------------------------------------------------
</TABLE>
See Notes to
Financial Statements.
- - ---------------------------------- 19
- - ------------------------------
<PAGE>
Statement of Operations
FOR THE YEAR ENDED MAY 31, 1994
<TABLE>
<CAPTION>
<S> <C> <C>
---------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $27,440,453
---------------------------------------------------------------------------
EXPENSES:
Investment advisory fee (Note 2) $3,122,879
Administration fee (Note 2) 892,251
Transfer agent fees (Note 2) 79,483
Legal and audit fees 66,712
Custodian fees (Note 2) 64,634
Directors' fees and expenses (Note 2) 35,775
Other 191,340
---------------------------------------------------------------------------
TOTAL EXPENSES 4,453,074
---------------------------------------------------------------------------
NET INVESTMENT INCOME 22,987,379
---------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS (NOTES 1 AND 3):
Net realized gain on:
Securities transactions 2,686,541
Futures contracts 10,776,209
---------------------------------------------------------------------------
Net realized gain on investments during the year 13,462,750
Net unrealized depreciation of investments during
the year (21,622,471)
---------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS (8,159,721)
---------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $14,827,658
---------------------------------------------------------------------------
</TABLE>
See Notes to
Financial Statements.
- - ---------------------------------- 20
- - ------------------------------
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
5/31/94 5/31/93*
<S> <C> <C>
---------------------------------------------------------------
Net investment income $ 22,987,379 $ 21,534,063
Net realized gain on securities
transactions and futures
contracts during the period 13,462,750 13,601,869
Net unrealized
appreciation/(depreciation)
of investments during the
period (21,622,471) 19,372,418
---------------------------------------------------------------
Net increase in net assets
resulting from operations 14,827,658 54,508,350
Distributions to shareholders
from:
Net investment income (23,021,268) (18,749,992)
Net realized gain on
investments (17,418,025) (956,284)
Net increase in net assets from
Portfolio share transactions
(Note 4) 4,465,722 409,735,872
Offering cost charged to
paid-in-capital (Note 4) -- (699,626)
---------------------------------------------------------------
Net increase/(decrease) in net
assets (21,145,913) 443,838,320
NET ASSETS:
Beginning of period 443,938,328 100,008
---------------------------------------------------------------
End of year (including
undistributed net investment
income of $2,750,182 and
$2,784,071, respectively) $422,792,415 $443,938,328
---------------------------------------------------------------
<FN>
* The Portfolio commenced operations on June 26, 1992.
</TABLE>
See Notes to
Financial Statements.
- - ---------------------------------- 21
- - ------------------------------
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED PERIOD
ENDED
5/31/94
5/31/93*
<S> <C> <C>
---------------------------------------------------------------------------
Operating performance:
Net asset value, beginning of period $ 13.00 $ 12.00
---------------------------------------------------------------------------
Net investment income 0.67 0.63
Net realized and unrealized gain/(loss) on
investments (0.23) 0.97
---------------------------------------------------------------------------
Net increase in net assets resulting from
operations 0.44 1.60
---------------------------------------------------------------------------
Offering cost charged to paid-in-capital --
(0.02)
Distributions:
Dividends from net investment income (0.67)
(0.55)
Distributions from net realized capital gains (0.51)
(0.03)
---------------------------------------------------------------------------
Total distributions (1.18)
(0.58)
---------------------------------------------------------------------------
Net asset value, end of period $ 12.26 $ 13.00
---------------------------------------------------------------------------
Market value, end of period $ 11.50 $ 12.25
Total investment return*** 2.27%
7.02%
---------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in 000's) $422,792 $443,938
Ratio of operating expenses to average net
assets 1.00%
0.98%**
Ratio of net investment income to average net
assets 5.15%
5.48%**
Portfolio turnover rate 72%
169%
---------------------------------------------------------------------------
<FN>
* The Portfolio commenced operations on June 26, 1992.
** Annualized.
*** Total return represents aggregate return based on market value for the
period indicated.
</TABLE>
See Notes to
Financial Statements.
- - ---------------------------------- 22
- - ------------------------------
<PAGE>
Notes to Financial Statements
MAY 31, 1994
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 its Statement of Assets and Liabilities as an
asset
and as an equivalent liability. For long futures positions, the asset is
marked-to-market daily. For short futures positions, the liability is
marked-to-market daily. 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.
There are several risks in connection with the use of futures contracts as
a
hedging device. The change in value of futures contracts primarily
- - ---------------------------------- 23
------------------------------
<PAGE>
Notes to Financial Statements
MAY 31, 1994 (CONTINUED)
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.
Income distributions and capital gain distributions are determined in
accordance
with income tax regulations which may differ from generally accepted
accounting
principles. These differences are primarily due to timing differences and
differing characterization of distributions made by the Portfolio.
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 Transactions
The Portfolio has entered into an investment advisory agreement (the
"Advisory Agreement") with Greenwich Street Advisors, a division of Mutual
Management Corp., which is controlled by Smith Barney Holdings Inc.
("Holdings"). Holdings is a wholly owned subsidiary of The Travelers
- - ------------------------------ 24
------------------------------
<PAGE>
Notes to Financial Statements
MAY 31, 1994 (CONTINUED)
Inc. Under the Advisory Agreement, the Portfolio pays a monthly fee at the
annual rate of 0.70% of the value of its average daily net assets. Prior to
July
30, 1993, Shearson Lehman Advisors served as investment adviser to the
Portfolio.
Prior to June 1, 1994, the Portfolio was party to an administration
agreement, with Boston Advisors, an indirect wholly owned subsidiary of Mellon
Bank Corporation ("Mellon"). Under this agreement, the Portfolio paid a
monthly
fee at the annual rate of .20% of the value of its average daily net assets.
As of the close of business on June 1, 1994, Smith, Barney Advisers, Inc.
("SBA"), which is controlled by Holdings, succeeded Boston Advisors as the
Portfolio's administrator. The new administration agreement contains
substantially the same terms and conditions, including the level of fees, as
the
predecessor agreement.
As of the close of business on June 1, 1994, the Portfolio also entered
into
a sub-administration agreement (the "Sub-Administration Agreement") with
Boston
Advisors. Under the Sub-Administration Agreement, Boston Advisors is paid a
portion of the fees paid by the Portfolio to SBA at a rate agreed upon from
time
to time between SBA and Boston Advisors.
No officer, director, or employee of Smith Barney Advisers 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 Advisers
or any of its 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, 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.
3. Securities Transactions.
For the year ended May 31, 1994, cost of purchases and proceeds from sales
of
investment securities (excluding short-term investments) aggregated
$298,187,184
and $313,662,703, respectively.
- - ---------------------------------- 25
------------------------------
<PAGE>
Notes to Financial Statements
MAY 31, 1994 (CONTINUED)
At May 31, 1994, gross unrealized appreciation for all securities in which
there was an excess of value over tax cost amounted to $5,971,197, and the
gross
unrealized depreciation for all securities in which there was an excess of tax
cost over value amounted to $8,221,250.
4. Portfolio Shares.
At May 31, 1994, 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>
Year Ended Period Ended
05/31/94 05/31/93*
<S> <C> <C> <C> <C>
- - ------------------------------------------------------------------------------
- - -------
SHARES AMOUNT SHARES
AMOUNT
- - ------------------------------------------------------------------------------
- - -------
INITIAL PUBLIC
OFFERING -- -- 30,000,000
$360,000,000+
SUBSEQUENT OFFERING -- -- 4,144,656
49,735,872
ISSUED AS REINVESTMENT
OF DIVIDENDS 342,989 $4,465,722 --
- - --
- - ---------------------------------------------------------------------------
TOTAL INCREASE 342,989 $4,465,722 34,144,656
$409,735,872
- - ---------------------------------------------------------------------------
<FN>
+ Before offering costs charged to paid-in capital of $699,626.
* The Portfolio commenced operations on June 26, 1992.
</TABLE>
- - ------------------------------ 26
------------------------------
<PAGE>
Notes to Financial Statements
MAY 31, 1994 (CONTINUED)
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------
QUARTERLY RESULTS OF OPERATIONS
(Unaudited)
Net Increase/
Net Realized and
(Decrease)
Unrealized Gain/
in Net Assets
Investment Net Investment (Loss) on
Resulting From
Income Income Investments
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
FEBRUARY 28,
1994 6,678,467 .19 5,549,454 .16 (4,168,370) (.12)
1,381,084 .04
MAY 31,
1994 7,004,102 .24 5,910,189 .17 (17,312,645)
(.46) (11,402,456) (.29)
- - ---------------------------------------------------------------------------
</TABLE>
- - ---------------------------------- 27
------------------------------
<PAGE>
Report of Independent Accountants
To the Shareholders and Board of Directors of
Managed Municipals Portfolio Inc.:
We have audited the accompanying statement of assets and liabilities of
Managed Municipals Portfolio Inc., including the schedule of portfolio
investments, as of May 31, 1994, and the related statement of operations for
the
year then ended, and the statement of changes in net assets and the financial
highlights for the year then ended and for the period June 26, 1992
(commencement of operations) to May 31, 1993. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on
a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1994 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to
above present fairly, in all material respects, the financial position of
Managed Municipals Portfolio Inc. as of May 31, 1994, the results of its
operations for the year then ended, and the changes in its net assets and the
financial highlights for the year then ended and for the period June 26, 1992
(commencement of operations) to May 31, 1993, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
July 13, 1994
- - ------------------------------ 28
------------------------------
<PAGE>
Additional Information
(UNAUDITED)
Portfolio Management
Joseph P. Deane, who is Vice President and Investment Officer of the
Portfolio
is primarily responsible for management of the Portfolio's assets. Mr. Deane
has
served the Portfolio in these capacities since the commencement of the
Portfolio's operations.
Dividend Reinvestment Plan
Under the Portfolio's Dividend Reinvestment (the "Plan"), a shareholder
whose
Common Stock is registered in his own name will have all distributions
reinvested automatically by The Shareholder Services Group, Inc. ("TSSG") as
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 Common Stock under the Plan, but only if the service is
provided by the broker or nominee, and the broker or nominee makes an election
on behalf of the shareholder to participate in the Plan. Distributions with
respect to Common Stock registered in the name of Shearson Lehman Brothers
will
automatically be reinvested by Shearson Lehman Brothers in additional shares
under the Plan unless the shareholder elects to receive distributions in cash.
A
shareholder who holds Common Stock registered in the name of a broker or other
nominee may not be able to transfer the Common Stock to another broker or
nominee and continue to participate in the Plan. Investors who own Common
Stock
registered in street name should consult their broker or nominee for details
regarding reinvestment.
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. Whenever the
market price of the Portfolio's Common Stock is equal to or exceeds the net
asset value per share, participants will be issued shares of Common Stock
valued
at the greater of (i) net asset value per share or (ii) 95% of the then
current
market price. If the net asset value per share of Common Stock at the time of
valuation exceeds the market price of the Common Stock, TSSG will buy shares
of
the Portfolio's Common Stock on the open market, on the New York Stock
Exchange,
Inc. or elsewhere, beginning on the payment date of the dividend or
distribution, until it has expended for such purchases all of the cash that
would otherwise be payable to the participants. Effective as of the first
dividend following September 1, 1994, TSSG may commence purchasing shares
beginning on the record date
- - ---------------------------------- 29
------------------------------
<PAGE>
Additional Information
(CONTINUED) (UNAUDITED)
for the dividend or distribution. The number of purchased shares that will
then
be credited to the participants' accounts will be based on the average per
share
purchase price of the shares so purchased, including brokerage commissions. If
TSSG commences purchases in the open market and the market price of the shares
subsequently exceeds net asset value before the completion of the purchases,
TSSG will attempt to terminate purchases in the open market and cause the
Portfolio to issue the remaining dividend or distribution in shares at net
asset
value per share. In this case, the number of shares of Common Stock received
by
the participant will be based on the weighted average of prices paid for
shares
purchased in the open market and the price at which the Portfolio issues the
remaining shares.
Plan participants are not subject to any charge for reinvesting dividends
or
capital gains distributions. Each Plan participant will, however, bear a
proportionate share of brokerage commissions incurred with respect to TSSG's
open market purchases of shares of Common Stock in connection with the
reinvestment of dividends or capital gains distributions. For the fiscal
period
ending May 31, 1994, no such brokerage commissions were incurred.
A participant in the Plan will be treated for Federal income tax purposes
as
having received, on the dividend payment date, a dividend or distribution in
an
amount equal to the cash that the participant could have received instead of
share of Common Stock.
A shareholder may terminate participation in the Plan at any time by
notifying TSSG in writing. A termination will be effective immediately if
notice
is received by TSSG not less than 10 days before any dividend or distribution
record date. Otherwise, the termination will be effective, and only with
respect
to any subsequent dividends or distributions, on the first trading day after
the
dividend or distribution has been credited to the participant's account in
additional shares of Common Stock of the Portfolio. Upon termination according
to a participant's instructions, TSSG will either (a) issue certificates for
the
whole shares credited to a Plan account and a check representing any
fractional
shares or (b) sell the shares in the market. There will be $5.00 fee assessed
for liquidation service, plus brokerage commissions, and TSSG is authorized to
sell a sufficient number of a participant's shares to cover such amounts.
The Plan is described in more detail on pages 27-28 of the Portfolio's
Prospectus dated June 18, 1992. Information concerning the Plan may be
obtained
from TSSG at 1-(800) 331-1710.
- - ------------------------------ 30
------------------------------
<PAGE>
MANAGED MUNICIPALS
PORTFOLIO INC.
Directors
Charles F. Barber
Allan J. Bloostein
Martin Brody
Dwight B. Crane
Robert A. Frankel
Heath B. McLendon
Officers
Heath B. McLendon
CHAIRMAN OF THE BOARD
Stephen J. Treadway
PRESIDENT
Richard P. Roelofs
EXECUTIVE VICE PRESIDENT
Joseph P. Deane
VICE PRESIDENT AND
INVESTMENT OFFICER
David Fare
INVESTMENT OFFICER
Lewis E. Daidone
TREASURER
Christina T. Sydor
SECRETARY
Investment Adviser
Greenwich Street Advisors
Two World Trade Center
New York, New York 10048
Administrator
Smith, Barney Advisers, Inc.
1345 Avenue of the Americas
New York, New York 10105
Sub-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
- - ---------------------------------- 31
------------------------------
<PAGE>
- - ------------------------------------------------------------------------------
- - --
This report is sent to the shareholders of
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.
FD2246 G4
- - ------------------------------------------------------------------------------
- - --
