<PAGE>
[GRAPHIC]
SMALL BOX ABOVE FUND NAME SHOWING
A FLORIDA SKYSCAPER WITH ATTACHED
BRIDGES.
SEMI- SMITH BARNEY
ANNUAL FLORIDA
REPORT MUNICIPALS
FUND
.......................................
APRIL 30, 1995
[LOGO]
<PAGE>
Florida Municipals Fund
DEAR SHAREHOLDER:
We are pleased to provide you with the semi-annual report and
portfolio of investments for Smith Barney Florida Municipals
Fund for the six months ended April 30, 1995. Reflecting the
improvement in the municipal market that began in late 1994, the
Fund's Class A and B shares earned a total return of 8.35% and 8.08%,
respectively for this six-month period. Class C shares, a newly
available class of shares, earned a total return of 12.71% for the
period between November 15, 1994 and April 30, 1995. Additional
performance data for each class of shares during this and previous
reporting periods is available in the performance section of the
report following this letter.
MARKET AND ECONOMIC UPDATE
The tax-exempt market has had virtually a non-stop rally since the beginning of
1995 and has recovered from the fall in bond prices in 1994. The recent increase
in the price of fixed income securities has resulted from the Federal Reserve's
seemingly successful policies to slow economic growth and achieve a "soft
landing" for the economy. A decline of approximately 40% in new bond issuance
coupled with the fact that older, higher interest rate debt continues to be
called and mature at a record pace, has also helped strengthen the tax-exempt
market. We believe this supply-demand imbalance will continue over the next six
months and contribute to greater market stability. Unfortunately, recent calls
by the U.S. Congress for tax reform have added uncertainty and a somewhat
negative tone to the tax-exempt market. The tax reform proposal which has
received the most press coverage -- the 17% flat tax -- would result in
increased borrowing costs for state and local governments, and also would reduce
the volume of home mortgage and charitable deductions. However, we believe it is
too early in the legislative process to accurately predict what kind of tax
reform, if any, will actually be enacted and equally premature for investors to
consider avoiding the municipals market. Based on recent trends, we believe that
the current yield range of 6 3/4 to 7% on long-term Treasuries and 5 3/4% on
AAA-rated municipals likely will be sustained.
The State of Florida continues to experience rapid, evolutionary economic
development. Florida's economy is becoming less reliant on agriculture and
seasonal tourism, and instead growth is increasingly coming from the expanding
service and trade sectors, especially banking, insurance and exports. This, in
turn, has resulted in a greater need for infrastructure development and
consequently more bond issuance throughout the State.
1
<PAGE>
- --------------------------------------------------------------------
D I V I D E N D P O L I C Y
ALTHOUGH NOT EXPLICITLY STATED IN THE PROSPECTUS, THE FUND'S POLICY IS TO
PAY A LEVEL MONTHLY DIVIDEND BASED ON OUR PROJECTIONS FOR THE MUNICIPAL BOND
MARKET AND THE GENERAL DIRECTION OF INTEREST RATES. THIS POLICY HAS NO
APPRECIABLE EFFECT ON THE FUND'S INVESTMENT STRATEGIES OR NET ASSET VALUE
PER SHARE SINCE IT IS GUIDED BY MARKET CONDITIONS. IT MEANS THAT WE DO NOT
INVEST IN SPECULATIVE SECURITIES WHICH MAY UNDERMINE THE FUND'S NET ASSET
VALUE PER SHARE IN ORDER TO MAINTAIN AN UNREALISTICALLY HIGH DIVIDEND
POLICY. WE CONTINUALLY MONITOR BOTH THE MARKET AND THE FUND'S INCOME STREAM
TO SEE THAT OUR DIVIDEND PROJECTIONS ARE REALISTIC.
The appetite of Florida residents for quality tax-exempt bonds has been strong,
and new issuance has been quickly absorbed into the market.
PORTFOLIO UPDATE
During the six months ended April 30, 1995, the Fund continued to be invested in
long-term Florida municipal issues in order to offer investors a high level of
income exempt from the State's intangibles tax. At the end of April, 88% of the
Fund's portfolio was invested in securities rated as investment grade (BBB/Baa
or higher) by either Standard & Poor's Corporation or Moody's Investors Service.
The majority of its holdings were in general obligations, housing and utility
bonds. Other large holdings for the Fund were hospital, education and pollution
control issues. The Fund's average maturity at the end of April was 23.7 years.
We appreciate the opportunity to help you meet your investment objective of
tax-free income and value your confidence in our management abilities. We look
forward to reporting to you in December in the Fund's Annual Report.
Sincerely,
Heath B. McLendon Lawrence T. McDermott
CHAIRMAN OF THE BOARD VICE PRESIDENT AND
AND INVESTMENT OFFICER INVESTMENT OFFICER
JUNE 6, 1995
2
<PAGE>
Smith Barney
Florida Municipals Fund
- ------------------------------------------
PORTFOLIO HIGHLIGHTS (UNAUDITED) APRIL 30, 1995
INDUSTRY BREAKDOWN
Pie chart depicting the allocation of the Florida Municipals Fund's investment
securities held at April 30, 1995 by industry classification. The pie is broken
in pieces representing industries in the following percentages:
<TABLE>
<CAPTION>
INDUSTRY PERCENTAGE
<S> <C>
Transportation 3.8%
Pollution Control 7.5%
Industrial 2.9%
Utility 14.3%
General Obligation 18.6%
Other Industries and Net Other Assets and Liabilities 15.3%
Education 8.6%
Housing 16.3%
Hospital 12.7%
</TABLE>
SUMMARY OF MUNICIPAL BONDS AND NOTES
BY COMBINED RATINGS.
<TABLE>
<CAPTION>
Standard & Percent
Moody's Poor's of Value
<S> <C> <C> <C>
--------------------------------------------
AAA OR AAA 49%
--------------------------------------------
AA AA 7
--------------------------------------------
A A 11
--------------------------------------------
BAA BBB 21
--------------------------------------------
BA BB 2
--------------------------------------------
NR NR 10
--------------------------------------------
100%
---------------
</TABLE>
AVERAGE MATURITY 23.7 years
3
<PAGE>
Smith Barney
Florida Municipals Fund
- ------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) APRIL 30, 1995
-------------------------------------------------------------
<TABLE>
<S> <C> <C>
KEY TO INSURANCE ABBREVIATIONS
AMBAC -- American Municipal Bond
Assurance Corporation
CO LEE -- College Construction Loan
Association
FGIC -- Federal Guaranty Insurance
Corporation
FHA -- Federal Housing Administration
MBIA -- Municipal Bond Investors
Assurance
</TABLE>
<TABLE>
<CAPTION>
RATINGS MARKET VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
<C> <S> <C> <C> <C>
-----------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES -- 98.9%
FLORIDA -- 96.6%
Alachua County, Florida,
Health Facilities
Authority, Santa Fe
Healthcare System, Health
Revenue:
$ 215,000 6.875% due 11/15/02 Baa1 BBB+ $ 224,406
640,000 6.050% due 11/15/16 Baa1 BBB+ 590,400
250,000 Boca Raton, Florida,
Special Assessment
Improvement, (Visions 90
Project),
6.000% due 7/1/22 A1 NR 245,000
500,000 Boynton Beach, Florida,
Utility System Revenue
Bonds, (FGIC Insured),
6.250% due 11/1/20 Aaa AAA 504,375
860,000 Bradford County, Florida,
Health Facilities
Authority, (Santa Fe
Project),
6.050% due 11/15/16 Baa BBB+ 782,600
Brevard County, Florida:
1,000,000 Health Facilities
Authority, (Holmes Regional
Medical Center Project),
5.750% due 10/1/13 A1 NR 936,250
750,000 Housing Finance Authority,
Single Family Mortgage
Revenue,
6.600% due 9/1/16 Aaa NR 759,375
400,000 School Board Authority,
Series A, (AMBAC Insured),
6.500% due 7/1/12 Aaa AAA 417,500
500,000 Tourist Development Tax
Revenue,
6.875% due 3/1/13 NR NR 491,875
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 1995
<TABLE>
<CAPTION>
RATINGS MARKET VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
FLORIDA -- (CONTINUED)
$1,000,000 Broward County, Florida,
Educational Facilities
Authority, (Co Lee
Insured),
6.000% due 4/1/13 NR AAA $ 977,500
400,000 Citrus County, Florida,
Pollution Control Revenue,
Series B, Florida Power
Corporation, (Crystal River
Project),
6.350% due 2/1/22 A1 A+ 408,000
405,000 Clearwater, Florida,
Multifamily Housing
Revenue, (Drew Gardens
Project), Series A, (FHA
Insured),
6.500% due 10/1/25 NR AAA 406,013
300,000 Collier County, Florida,
Special Assessment,
Pine/Naples--Municipal
Services,
5.600% due 11/1/13 NR BBB 267,750
500,000 Crystal River, Florida,
Water and Sewer Revenue
Bonds, (AMBAC Insured),
6.250% due 10/1/22 Aaa AAA 503,750
Dade County, Florida:
1,000,000 Aviation Facilities
Revenue, Series B , (MBIA
Insured),
6.600% due 10/1/22 Aaa AAA 1,032,500
500,000 Health Facilities
Authority, Hospital
Revenue, (North Shore
Medical Center Project),
(AMBAC Insured),
6.500% due 8/15/15 Aaa AAA 516,875
500,000 School District, Series A,
(MBIA Insured),
6.125% due 6/1/14 Aaa AAA 501,875
500,000 Davie, Florida, Water and
Sewer Revenue Bonds, (AMBAC
Insured),
6.250% due 10/1/17 Aaa AAA 506,250
1,000,000 Duval County, Florida,
Housing Finance Authority,
6.700% due 10/1/26 Aaa NR 1,007,500
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 1995
<TABLE>
<CAPTION>
RATINGS MARKET VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
FLORIDA -- (CONTINUED)
$ 500,000 Enflewood, Florida, Water
Distribution Utility
System,
6.000% due 10/1/23 Aaa AAA $ 489,375
500,000 Enterprise Community
Development District,
6.125% due 5/1/24 Aaa AAA 500,000
Escambia County, Florida:
750,000 Health and Education
Financing Authority,
(Baptist Hospital & Manor
Project),
6.750% due 10/1/14 NR BBB+ 747,188
500,000 (Champion International
Corporation Project),
6.950% due 11/1/07 Baa1 BBB 518,125
500,000 Series B,
6.250% due 1/1/15 Aaa AAA 511,250
Pollution Control Revenue,
1,500,000 6.900% due 8/1/22 Baa1 BBB 1,524,375
500,000 Utility Authority Revenue,
Series A, (FGIC Insured),
6.300% due 1/1/23 Aaa AAA 505,625
750,000 Florida Department of
Transportation, (Right of
Way),
6.500% due 7/1/21 Aa AA 774,375
180,000 Turnpike Authority Revenue,
Series A, (FGIC Insured),
6.350% due 7/1/22 Aaa AAA 182,925
Florida Housing Finance
Agency:
General Mortgage, Series A,
(FHA Insured):
250,000 6.350% due 6/1/14 NR AAA 251,563
1,085,000 6.750% due 8/4/14 Aaa AAA 1,112,125
500,000 6.400% due 6/1/24 NR AAA 506,875
1,465,000 Series B,
6.650% due 7/1/26 Aa AA 1,481,481
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 1995
<TABLE>
<CAPTION>
RATINGS MARKET VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
FLORIDA -- (CONTINUED)
$ 750,000 Florida State Board of
Education, Capital Outlay,
Series B,
6.700% due 6/1/22 Aa AA+ $ 789,375
Florida State Correctional
Commission, (MBIA Insured),
750,000 6.000% due 8/1/14 Aaa AAA 747,188
750,000 6.250% due 1/1/15 Aaa AAA 763,125
1,250,000 Florida State, Mid-Bay
Bridge Revenue, Series A,
6.100% due 10/1/22 NR NR 1,110,938
445,000 Fort Lauderdale, Florida,
Central Beach Community
Redevelopment Agency,
(AMBAC Insured),
6.150% due 9/1/08 Aaa AAA 453,344
Hillsborough County,
Florida:
1,000,000 Aviation Authority, Special
Purpose, (Delta Airlines
Project),
6.800% due 1/1/24 Ba3 BB 948,750
820,000 Community Center Project,
Series 2,
6.750% due 7/1/22 A A 854,850
1,125,000 School Board, Certificate
of Participation, (MBIA
Insured),
6.000% due 7/1/14 Aaa AAA 1,117,969
Hillsborough County,
Florida, Utilities Revenue,
Refunding and Improvement,
(MBIA Insured):
190,000 (prerefunded 8/1/01),
7.000% due 8/1/14 NR BBB+ 211,375
930,000 (unrefunded 8/1/01),
7.000% due 8/1/14 Baa1 BBB+ 971,850
1,000,000 Homestead, Florida,
Industrial Development
Revenue, Series A,
7.950% due 11/1/18 NR NR 955,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 1995
<TABLE>
<CAPTION>
RATINGS MARKET VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
FLORIDA -- (CONTINUED)
$ 310,000 Jacksonville, Florida,
Hospital Revenue,
(University Medical Center,
Inc. Project), (Co Lee
Insured),
6.600% due 2/1/21 NR AAA $ 320,075
1,250,000 Lake County, Florida,
Resource Recovery,
Industrial Revenue, Series
1993-A,
5.950% due 10/1/13 Baa BBB+ 1,118,750
840,000 Leesburg, Florida, Hospital
Revenue, (Leesburg Regional
Medical Center Project),
Series B,
5.200% due 7/1/02 Baa1 BBB+ 787,500
500,000 Martin County, Florida,
Industrial Development
Revenue,
7.875% due 12/15/25 Baa3 BBB- 533,125
500,000 Melbourne, Florida, Water &
Sewer Revenue,
6.375% due 10/1/22 Aaa AAA 516,250
1,000,000 Miami, Florida, Sports
Exhibition Authority, (FGIC
Insured),
6.150% due 10/1/20 Aaa AAA 1,003,750
1,000,000 Miramar, Florida,
Wastewater Improvement
Authority,
6.750% due 10/1/16 Aaa AAA 1,068,750
Nassau County, Florida,
Pollution Control Revenue:
1,000,000 (ITT Rayonier Inc.
Project),
6.200% due 7/1/15 Baa2 BBB 956,250
595,000 (ITT Rayonier--Project 6),
6.250% due 6/1/10 Baa2 BBB 579,381
1,250,000 North Miami, Florida,
Educational Facilities
Revenue, (Johnson & Wales
University Project), Series
A,
6.100% due 4/1/13 NR NR 1,159,375
500,000 North Port, Florida,
Utility Revenue, (FGIC
Insured),
6.250% due 10/1/22 Aaa AAA 505,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 1995
<TABLE>
<CAPTION>
RATINGS MARKET VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
FLORIDA -- (CONTINUED)
$ 500,000 Northern Palm Beach County,
Water Control District,
Unit Development No. 31,
Program 1,
6.750% due 11/1/07 NR NR $ 500,000
Orange County, Florida,
Health Facilities Authority
Revenue:
1,250,000 6.750% due 10/1/18 Aaa AAA 1,276,562
1,050,000 (Orlando Regional Health
Center), (MBIA Insured),
6.000% due 11/1/24 Aaa AAA 1,030,312
100,000 Solid Waste Facilities
Revenue Bonds, (FGIC
Insured),
6.375% due 10/1/17 Aaa AAA 102,125
Tourist Development Tax
Revenue:
750,000 Series B, (AMBAC Insured),
6.000% due 10/1/21 Aaa AAA 741,562
1,500,000 Series B,
6.000% due 10/1/24 Aaa AAA 1,475,625
400,000 Orlando, Florida:
Capital Improvement Special
Revenue,
6.000% due 10/1/22 A1 AA- 392,500
1,500,000 Orlando and Orange
Counties, Florida,
Expressway Authority, Jr.
Lien,
5.950% due 7/1/23 NR A- 1,434,375
200,000 Pace Property Finance
Authority, Utility Systems
Refunding & Improvement,
6.250% due 9/1/13 NR BBB 191,750
760,000 Palm Bay, Florida, Lease
Revenue,
6.850% due 9/1/13 Baa NR 755,250
Palm Beach County, Florida:
1,000,000 Health Facilities
Authority, (Good Samaritan
Health System Project),
6.300% due 10/1/22 NR A- 972,500
800,000 Pinellas County, Florida,
Sewer Revenue, (FGIC
Insured),
6.550% due 8/1/27 Aaa NR 802,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 1995
<TABLE>
<CAPTION>
RATINGS MARKET VALUE
FACE VALUE MOODY'S S&P (NOTE 1)
-----------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
FLORIDA -- (CONTINUED)
$ 750,000 Plant City, Florida,
Utility System Revenue,
6.000% due 10/1/20 Aaa AAA $ 742,500
500,000 Seminole County, Florida,
Water and Sewer Revenue
Bonds, (MBIA Insured),
6.000% due 10/1/19 Aaa AAA 496,250
1,500,000 South Broward, Florida,
Hospital District,
5.500% due 5/1/28 A1 A+ 1,286,250
500,000 Tallahassee, Florida,
Electric Revenue, Series B,
6.200% due 10/1/12 Aa AA- 508,125
Tampa, Florida:
1,000,000 Revenue Allegany Health
Systems, (St. Joseph's
Project), (MBIA Insured),
6.700% due 12/1/18 Aaa AAA 1,068,750
500,000 (Florida Aquarium Inc.
Project),
7.750% due 5/1/27 NR NR 515,625
100,000 Water and Sewer Revenue
Bonds, (FGIC Insured),
6.250% due 10/1/12 Aaa AAA 102,625
500,000 Volusia County, Florida,
Educational Facilities
Authority,
6.500% due 10/15/15 NR AAA 513,750
-----------------------------------------------------------------------------
52,565,482
-----------------------------------------------------------------------------
GUAM -- 1.4%
750,000 Guam Airport Authority
Revenue, Series A,
6.500% due 10/1/23 NR BBB 750,937
-----------------------------------------------------------------------------
PUERTO RICO -- 0.9%
500,000 Commonwealth of Puerto
Rico, (AMBAC Insured),
5.875% due 7/1/18 Aaa AAA 493,125
-----------------------------------------------------------------------------
TOTAL INVESTMENTS (Cost $54,042,665*) 98.9% 53,809,544
OTHER ASSETS AND LIABILITIES (NET) 1.1 622,034
-----------------------------------------------------------------------------
NET ASSETS 100.0% $ 54,431,578
-----------------------------------------------------------------------------
<FN>
*Aggregate cost for Federal tax purposes.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Smith Barney
Florida Municipals Fund
- ---------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost
$54,042,665) (Note 1)
See accompanying schedule $53,809,544
Interest receivable 862,534
Receivable for Fund shares sold 164,328
Unamortized organization costs (Note 7) 73,090
- -------------------------------------------------------------------------
TOTAL ASSETS 54,909,496
- -------------------------------------------------------------------------
LIABILITIES:
Payable for Fund shares redeemed $143,463
Dividends payable 119,704
Due to custodian 89,679
Investment advisory fee payable (Note
2) 31,790
Administration fee payable (Note 2) 18,165
Distribution fee payable (Note 3) 15,772
Service fees payable (Note 3) 6,791
Custodian fees payable (Note 2) 3,800
Transfer agent fees payable (Note 2) 1,604
Accrued expenses and other payables 47,150
- -------------------------------------------------------------------------
TOTAL LIABILITIES 477,918
- -------------------------------------------------------------------------
NET ASSETS $54,431,578
- -------------------------------------------------------------------------
NET ASSETS consist of:
Undistributed net investment income $ 38,931
Accumulated net realized loss on
investments sold (699,295)
Unrealized depreciation of investments (233,121)
Par value 5,585
Paid-in capital in excess of par value 55,319,478
- -------------------------------------------------------------------------
TOTAL NET ASSETS $54,431,578
- -------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
- ------------------------------------------------------------- APRIL 30, 1995
<TABLE>
<S> <C>
NET ASSET VALUE:
CLASS A SHARES:
NET ASSET VALUE and redemption price
per share
($16,459,880 DIVIDED BY 1,688,599
shares of beneficial interest
outstanding) $9.75
- ---------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE ($9.75
DIVIDED BY 0.960)
(based on sales charge of 4.00% of the
offering price on April 30, 1995) $10.16
- ---------------------------------------------------------
CLASS B SHARES:
NET ASSET VALUE and offering price per
share+
($37,903,841 DIVIDED BY 3,889,351
shares of beneficial interest
outstanding) $9.75
- ---------------------------------------------------------
CLASS C SHARES:
NET ASSET VALUE and offering price per
share+
($67,857 DIVIDED BY 6,957 shares of
beneficial interest outstanding) $9.75
- ---------------------------------------------------------
<FN>
+ Redemption price per share is equal to net asset value less any contingent
deferred sales charge.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
Smith Barney
Florida Municipals Fund
- ---------------------------------------------------------------------------
STATEMENT OF OPERATIONS (UNAUDITED)
- -------------------------------------------------------------
FOR THE SIX MONTHS ENDED APRIL 30, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $1,699,090
- ---------------------------------------------------------------------------
EXPENSES:
Distribution fee (Note 3) $ 90,633
Investment advisory fee (Note 2) 90,577
Administration fee (Note 2) 51,758
Service fee (Note 3) 38,819
Legal and audit fees 23,973
Trustees' fees and expenses (Note 2) 21,084
Amortization of organization costs (Note 7) 14,619
Custodian fees (Note 2) 9,373
Transfer agent fees (Notes 2 and 4) 7,149
Other 42,990
Fees waived by investment adviser and
administrator (Note 2) (46,168)
- ---------------------------------------------------------------------------
TOTAL EXPENSES 344,807
- ---------------------------------------------------------------------------
NET INVESTMENT INCOME 1,354,283
- ---------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS (NOTES 1 AND 5):
Net realized loss on investments sold during the
period (137,822)
Net unrealized appreciation of investments
during the period 2,980,489
- ---------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 2,842,667
- ---------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,196,950
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Smith Barney
Florida Municipals Fund
- ---------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
4/30/95 ENDED
(UNAUDITED) 10/31/94
<S> <C> <C>
Net investment income $ 1,354,283 $ 2,451,517
Net realized loss on investments during the period (137,822) (561,473)
Net unrealized gain/(loss) of investments during the
period 2,980,489 (5,972,896)
- -------------------------------------------------------------------------------------
Net increase/(decrease) in net assets resulting from
operations 4,196,950 (4,082,852)
Distributions to shareholders from net investment
income:
Class A (414,589) (748,400)
Class B (877,244) (1,703,117)
Class C (1,282) --
Distributions to shareholders in excess of net
investment income:
Class A -- (15,001)
Class B -- (34,140)
Distributions to shareholders from net realized gain on
investments:
Class A -- (37,401)
Class B -- (87,745)
Net increase in net assets from Fund share transactions
(Note 6):
Class A 1,490,916 2,509,303
Class B 861,970 5,033,792
Class C 62,190 --
- -------------------------------------------------------------------------------------
Net increase in net assets 5,318,911 834,439
NET ASSETS:
Beginning of period 49,112,667 48,278,228
- -------------------------------------------------------------------------------------
End of period (including undistributed net investment
income and (distributions in excess of net
investment income)
of $38,931 and ($22,237), respectively) $54,431,578 $49,112,667
- -------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
Smith Barney
Florida Municipals Fund
- ---------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR PERIOD
4/30/95 ENDED ENDED
(UNAUDITED) 10/31/94*** 10/31/93*
<S> <C> <C> <C>
Net Asset Value, beginning of period $ 9.24 $ 10.53 $ 9.55
- -----------------------------------------------------------------------------------
Income from investment operations:
Net investment income+ 0.26 0.51 0.49
Net realized and unrealized gain/(loss) on
investments 0.50 (1.25) 1.02
- -----------------------------------------------------------------------------------
Total from investment operations 0.76 (0.74) 1.51
Less Distributions:
Dividends from net investment income (0.25) (0.51) (0.49)
Distributions in excess of net investment
income -- (0.01) --
Distributions from net realized capital
gains -- (0.03) (0.04)
- -----------------------------------------------------------------------------------
Total distributions (0.25) (0.55) (0.53)
- -----------------------------------------------------------------------------------
Net Asset Value, end of period $ 9.75 $ 9.24 $ 10.53
- -----------------------------------------------------------------------------------
Total Return++ 8.35% (7.31)% 16.07%
- -----------------------------------------------------------------------------------
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $16,460 $14,087 $13,450
Ratio of operating expenses to average net
assets+++ 0.98%** 0.99% 0.97%**
Ratio of net investment income to average
net assets 5.59%** 5.13% 4.78%**
Portfolio turnover rate 11% 55% 27%
- -----------------------------------------------------------------------------------
<FN>
* The Fund commenced operations on November 6, 1992.
** Annualized.
*** Per share amounts have been calculated using the monthly average share
method, which more appropriately presents the per share data for the period
since the use of the undistributed net investment income method does not
accord with results of operations.
+ Net investment income before waiver of fees by investment adviser and
administrator was $0.25, $0.48 and $0.45 for the six months ended April 30,
1995, the year ended October 31, 1994 and the period ended October 31, 1993,
respectively.
++ Total return represents aggregate total return for the periods indicated and
does not reflect any applicable sales charge.
+++ Annualized expense ratio before waiver of fees by investment adviser and
administrator was 1.16%, 1.27% and 1.38% for the six months ended April 30,
1995, the year ended October 31, 1994 and the period ended October 31, 1993,
respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
Smith Barney
Florida Municipals Fund
- ------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR PERIOD
4/30/95 ENDED ENDED
(UNAUDITED) 10/31/94*** 10/31/93*
<S> <C> <C> <C>
Net Asset Value, beginning of period $ 9.24 $ 10.53 $ 9.55
- -----------------------------------------------------------------------------------
Income from investment operations:
Net investment income+ 0.24 0.46 0.44
Net realized and unrealized gain/(loss) on
investments 0.50 (1.25) 1.02
- -----------------------------------------------------------------------------------
Total from investment operations 0.74 (0.79) 1.46
Less Distributions:
Dividends from net investment income (0.23) (0.46) (0.44)
Distributions in excess of net investment
income -- (0.01)
Distributions from net realized capital
gains -- (0.03) (0.04)
- -----------------------------------------------------------------------------------
Total distributions (0.23) (0.50) (0.48)
- -----------------------------------------------------------------------------------
Net Asset Value, end of period $ 9.75 $ 9.24 $ 10.53
- -----------------------------------------------------------------------------------
Total Return++ 8.08% (7.76)% 15.52%
- -----------------------------------------------------------------------------------
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $37,904 $35,026 $34,828
Ratio of operating expenses to average net
assets+++ 1.48%** 1.49% 1.48%**
Ratio of net investment income to average
net assets 5.08%** 4.62% 4.27%**
Portfolio turnover rate 11% 55% 27%
- -----------------------------------------------------------------------------------
<FN>
* The Fund commenced operations on November 6, 1992.
** Annualized.
*** Per share amounts have been calculated using the monthly average share
method, which more appropriately presents the per share data for the period
since the use of the undistributed net investment income method does not
accord with results of operations.
+ Net investment income before waiver of fees by investment adviser and
administrator was $0.23, $0.43 and $0.40 for the six months ended April 30,
1995, the year ended October 31, 1994 and the period ended October 31, 1993,
respectively.
++ Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charge.
+++ Annualized expense ratio before waiver of fees by investment adviser and
administrator was 1.66%, 1.78% and 1.88% for the six months ended April 30,
1995, the year ended October 31, 1994 and the period ended October 31, 1993,
respectively.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
Smith Barney
Florida Municipals Fund
- ------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A CLASS C SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
4/30/95*
(UNAUDITED)
<S> <C>
Net Asset Value, beginning of period $8.89
- -----------------------------------------------------------------------------
Income from investment operations:
Net investment income+ 0.22
Net realized and unrealized gain on investments 0.85
- -----------------------------------------------------------------------------
Total from investment operations 1.07
Less Distributions:
Dividends from net investment income (0.21)
- -----------------------------------------------------------------------------
Total distributions (0.21)
- -----------------------------------------------------------------------------
Net Asset Value, end of period $9.75
- -----------------------------------------------------------------------------
Total Return++ 12.71%
- -----------------------------------------------------------------------------
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 68
Ratio of operating expenses to average net assets+++ 1.57%**
Ratio of net investment income to average net assets 5.00%**
Portfolio turnover rate 11%
- -----------------------------------------------------------------------------
<FN>
* The Fund commenced selling Class C shares on November 15, 1994.
** Annualized.
+ Net investment income before waiver of fees by investment adviser and
administrator for the period ended April 30, 1995 was $0.21.
++ Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charge.
+++ Annualized expense ratio before waiver of fees by investment adviser and
administrator for the period ended April 30, 1995 was 1.75%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
Smith Barney
Florida Municipals Fund
- ---------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Smith Barney Florida Municipals Fund (the "Fund") (formerly known as "Smith
Barney Shearson Florida Municipals Fund") is a non-diversified, open-end
management investment company registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended (the "1940
Act"). The Fund was organized on August 31, 1992 under the laws of the
Commonwealth of Massachusetts and is a business entity commonly known as a
"Massachusetts business trust." Effective November 7, 1994, the Fund began
offering Class C and Class Y shares and continued to offer Class A and Class B
shares. As of April 30, 1995, no Class Y shares have been sold. Class A shares
are sold with a front-end sales charge. Class B and Class C shares may be
subject to a contingent deferred sales charge ("CDSC") upon redemption. Class B
shares will convert automatically to Class A shares eight years after the date
of original purchase. Class Y shares are available to investors making an
initial investment of at least $5 million and are not subject to any sales
charges, distribution or service fees. All classes of shares have identical
rights and privileges except with respect to the effect of the respective sales
charges, the distribution and/or service fees borne by each class, expenses
allocable exclusively to each class, voting rights on matters affecting a single
class, the exchange privilege of each class and the conversion feature of Class
B shares. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
PORTFOLIO VALUATION: Securities are valued at the close of trading on the New
York Stock Exchange, Inc. by The Boston Company Advisors, Inc. ("Boston
Advisors"), an indirect wholly owned subsidiary of Mellon Bank Corporation
("Mellon"), after consultation with an independent pricing service (the
"Service") approved by the Fund's Board of Trustees. 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 (as obtained by the
Service from dealers in such securities). Securities for which, in the judgment
of the Service, there are no readily available market quotations (which may
constitute a majority of the portfolio securities) are carried at fair value as
determined by the Service, based on methods which include consideration of:
yields or prices of municipal securities of comparable quality, coupon,
18
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
maturity and type; indications as to values from dealers; and general market
conditions. Short-term investments that mature in 60 days or less are valued at
amortized cost whenever the Board of Trustees determines that amortized cost
reflects the fair value of those investments.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded as of the trade date. Interest income is recorded on the accrual basis.
Realized gains and losses from securities sold are recorded on the identified
cost basis. Investment income and realized and unrealized gains and losses are
allocated based upon the relative net assets of each class of shares.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment
income are determined on a class level and are declared daily and are paid on
the last day of the Smith Barney Inc. ("Smith Barney") statement month.
Distributions from net realized capital gains are determined on a fund level and
are declared and paid annually after the end of the fiscal year in which earned.
In addition, in order to avoid the application of a 4.00% nondeductible excise
tax on certain undistributed amounts of ordinary income and capital gains, the
Fund may make any other distributions as are necessary to avoid this tax. To the
extent net realized capital gains can be offset by capital losses and loss
carryforwards, it is the policy of the Fund not to distribute such gains.
Income distributions and capital gain distributions on a Fund level are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily due to
differing treatments of income and gains on various investment securities held
by the Fund, timing differences and differing characterization of distributions
made by the Fund as a whole.
FLORIDA TAXES: Florida currently imposes an "intangibles tax" on certain
securities and other intangible assets owned by Florida residents. The Fund has
received a ruling from Florida authorities that, if on December 31 of any year
the Fund's portfolio consists solely of assets exempt from the intangibles
19
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
tax, the Fund's shares will be exempt from the Florida intangibles tax for the
following year. The Fund intends to manage its portfolio so that the Fund's
shares will be exempt from the Florida intangibles tax.
FEDERAL INCOME TAXES: It is the policy of the Fund to qualify as a regulated
investment company, which distributes exempt-interest dividends, 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 Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with Greenwich Street Advisors, formerly a division of Mutual
Management Corp., which was transferred effective November 7, 1994, to Smith
Barney Mutual Funds Management Inc. ("SBMFM"). Mutual Management Corp. and SBMFM
(formerly known as "Smith, Barney Advisers Inc.") are both wholly owned
subsidiaries of Smith Barney Holdings Inc. ("Holdings"), which in turn is a
wholly owned subsidiary of Travelers Group Inc. Under the Advisory Agreement,
the Fund pays a monthly fee at the following annual rates: 0.35% of the value of
the Fund's average daily net assets up to $500 million and 0.32% of the value of
its average daily net assets in excess of $500 million.
The Fund has entered into an administration agreement (the "Administration
Agreement") with SBMFM. Under the Administration Agreement, the Fund pays a fee
computed daily and paid monthly based on the following annual rates: 0.20% of
the value of the Fund's average daily net assets up to $500 million and 0.18% of
the value of the Fund's average daily net assets in excess of $500 million
The Fund and SBMFM have also entered into a sub-administration agreement (the
"Sub-Administration Agreement") with Boston Advisors.
20
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Under the Sub-Administration Agreement, SBMFM pays Boston Advisors a portion of
its administration fee at a rate agreed upon from time to time between SBMFM and
Boston Advisors.
From time to time the investment adviser and administrator may voluntarily waive
a portion or all of the fees otherwise payable to it. For the six months ended
April 30, 1995, SBMFM voluntarily waived investment advisory and administration
fees in the amounts of $29,380 and $16,788, respectively.
For the six months ended April 30, 1995, Smith Barney received $23,295 from
investors representing commissions (sales charges) on sales of Class A shares.
A CDSC is generally payable by a shareholder in connection with the redemption
of certain Class A, Class B and Class C shares. In circumstances in which the
CDSC is imposed, the amount of the charge will vary depending on the number of
years since the date of purchase. For the six months ended April 30, 1995, Smith
Barney received from shareholders $82,820 in CDSC on the redemption of Class B
shares.
No officer, trustee or employee of Smith Barney or any of its affiliates
receives any compensation from the Fund for serving as a Trustee or officer of
the Fund. The Fund pays each Trustee who is not an officer, trustee, or employee
of Smith Barney or any of its affiliates $2,500 per annum plus $250 per meeting
attended and each Trustee emeritus who is not an officer, trustee, or employee
of Smith Barney or any of its affiliates $1,250 per annum plus $125 per meeting
attended. The Fund reimburses each such Trustee for travel and out-of-pocket
expenses incurred to attend such meetings.
Boston Safe Deposit and Trust Company, an indirect wholly owned subsidiary of
Mellon, serves as the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, serves as the Fund's transfer agent.
21
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. DISTRIBUTION PLAN
Smith Barney acts as distributor of the Fund's shares pursuant to a distribution
agreement with the Fund, and sells shares of the Fund through Smith Barney or
its affiliates.
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a services and
distribution plan (the "Plan"). Under this Plan, the Fund compensates Smith
Barney for servicing shareholder accounts for Class A, Class B and Class C
shareholders, and covers expenses incurred in distributing Class B and Class C
shares. Smith Barney is paid an annual service fee with respect to Class A,
Class B and Class C shares of the Fund at the annual rate of 0.15% of the value
of the average daily net assets of each respective class of shares. Smith Barney
is also paid an annual distribution fee with respect to Class B and Class C
shares at the annual rate of 0.50% and 0.55%, respectively of the value of the
average daily net assets of each respective class of shares. During the six
months ended April 30, 1995, the Fund incurred service fees of $11,633, $27,144
and $42 for Class A, Class B and Class C shares, respectively. For the six
months ended April 30, 1995, the Fund incurred a distribution fee of $90,480 and
$153 for Class B and Class C shares, respectively.
Under its terms, the Plan shall remain in effect from year to year, provided
that such continuance is approved annually by vote of the Fund's Board of
Trustees, including a majority of those Trustees who are not "interested
persons" of the Fund and who have no direct or indirect financial interest in
the operation of the Plan.
4. EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any class of
shares are prorated among the classes based upon the relative net assets of each
class. Operating expenses directly attributable to a class of shares are charged
to that class' operations. In addition to the above servicing and distribution
fees, class specific operating expenses include transfer agent fees. For the six
months ended April 30, 1995, transfer agent fees for Class A, Class B and Class
C shares were $1,950, $5,181 and $18, respectively.
22
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities, excluding
short-term investments, for the six months ended April 30, 1995, amounted to
$7,898,033 and $5,379,113, respectively.
At April 30, 1995, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost amounted to
$775,450, and the aggregate gross unrealized depreciation for all securities in
which there was an excess of tax cost over value amounted to $1,008,571.
6. SHARES OF BENEFICIAL INTEREST
At April 30, 1995, an unlimited number of shares of beneficial interest with par
value of $.001 per share were authorized and divided into three classes, Class
A, Class B and Class C.
Changes in shares of beneficial interest outstanding were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
4/30/95 10/31/94
CLASS A SHARES: Shares Amount Shares Amount
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
Sold 489,428 $ 4,513,733 613,550 $6,194,067
Issued as reinvestment of dividends 25,479 240,556 48,516 481,110
Redeemed (350,356) (3,263,373) (415,343) (4,165,874 )
- -------------------------------------------------------------------------------------
Net increase 164,551 $ 1,490,916 246,723 $2,509,303
- -------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
4/30/95 10/31/94
CLASS B SHARES: Shares Amount Shares Amount
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
Sold 617,934 $ 5,681,710 1,031,963 $10,397,778
Issued as reinvestment of dividends 46,587 439,547 102,199 1,014,195
Redeemed (565,831) (5,259,287) (651,380) (6,378,181 )
- -------------------------------------------------------------------------------------
Net increase 98,690 $ 861,970 482,782 $5,033,792
- -------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
Smith Barney
Florida Municipals Fund
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PERIOD ENDED
4/30/95*
CLASS C SHARES: Shares Amount
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 6,948 $ 62,103
Issued as reinvestment of dividends 9 87
- -------------------------------------------------------------------------------------
Net increase 6,957 $ 62,190
- -------------------------------------------------------------------------------------
<FN>
* The Fund commenced selling Class C shares on November 15, 1994.
</TABLE>
7. ORGANIZATION COSTS
The Fund bears all costs in connection with its organization including the fees
and expenses of registering and qualifying its shares for distribution under
Federal and state securities regulations. All such costs are being amortized on
the straight-line method over a period of five years from November 6, 1992
(commencement of operations). In the event any of the initial shares in the Fund
are redeemed during such period, the Fund will be reimbursed for any unamortized
organization costs in the same proportion as the number of shares redeemed bears
to the number of initial shares outstanding at the time of redemption.
8. CONCENTRATION OF CREDIT
The Fund primarily invests in debt obligations issued by the State of Florida
and its political subdivisions, agencies and public authorities to obtain funds
for various public purposes. The Fund is more susceptible to factors adversely
affecting issuers of Florida municipal securities than is a municipal bond fund
that is not concentrated in these issuers to the same extent.
9. CAPITAL LOSS CARRYFORWARDS
At October 31, 1994, the Fund had available for Federal income tax purposes an
unused capital loss carryforward of $561,473 expiring in 2002.
24
<PAGE>
FLORIDA
MUNICIPALS
FUND
TRUSTEES
Herbert Barg
Alfred J. Bianchetti
Martin Brody
Dwight B. Crane
Burt N. Dorsett
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Heath B. McLendon
Cornelius C. Rose
OFFICERS
Heath B. McLendon
CHAIRMAN OF THE BOARD
AND INVESTMENT OFFICER
Jessica Bibliowicz
PRESIDENT
Lawrence T. McDermott
VICE PRESIDENT AND
INVESTMENT OFFICER
Karen L. Mahoney-Malcomson
INVESTMENT OFFICER
Lewis E. Daidone
SENIOR VICE PRESIDENT
AND TREASURER
Christina T. Sydor
SECRETARY
[LOGO]
THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF
SMITH BARNEY FLORIDA MUNICIPALS FUND. IT IS NOT AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS UNLESS ACCOMPANIED OR PRECEDED BY AN EFFECTIVE PROSPECTUS
FOR THE FUND, WHICH CONTAINS INFORMATION CONCERNING THE FUND'S INVESTMENT
POLICIES, FEES AND EXPENSES AS WELL AS OTHER PERTINENT INFORMATION.
SMITH BARNEY
MUTUAL FUNDS
388 Greenwich Street
New York, New York 10013
Fund 237, 238
[LOGO]
FD2217 F5
