Smith Barney
Oregon
Municipals
Fund
- -------------------------------------
SEMI-ANNUAL REPORT
- -------------------------------------
October 31, 1999
Smith Barney
Mutual Funds
NOT FDIC INSURED o NOT BANK GUARANTEED o MAY LOSE VALUE
<PAGE>
Smith Barney HEATH B. PETER M.
Oregon MCLENDON COFFEY
Municipals
Fund Chairman Vice President
Dear Shareholder:
We are pleased to provide the semi-annual report for the Smith Barney Oregon
Muni-cipals Fund ("Fund") for the period ended October 31, 1999. We hope you
find this report to be useful and informative. In this report, we summarize the
period's prevailing economic and market conditions and outline our portfolio
strategy. A detailed summary of the Fund's performance can be found in the
appropriate sections that follow.
Performance and Investment Strategy Update
For the six months ended October 31, 1999, the Fund's Class A shares returned a
negative 5.16% without sales charges. By comparison, the Fund's Lipper, Inc.
peer group average posted a total return of a negative 5.04% for the same
period. (Lipper, Inc. is a major fund-tracking organization.) Performance
information for the Fund's other share classes can be found beginning on page
five.
Over the six months covered by the report, the Fund distributed income
dividends totaling $0.24 per Class A share. Based on its net asset value
("NAV") of $10.07 as of October 31, 1999, and the current monthly income
distribution rate of $0.0415 for Class A shares, the Fund's annualized
distribution rate is 4.95% for Class A shares. (Please note a portion of the
income from this fund may be subject to the Alternative Minimum Tax ("AMT")).
As of October 31, 1999, the Fund's average call-adjusted maturity was roughly
14.3 years and nearly 86.2% of the Fund's holdings were rated investment grade.
In addition, 33% of the Fund's portfolio was rated AAA, the highest-quality
bond rating.
Oregon Economic Highlights
Our outlook for the state of Oregon is optimistic based on low levels of tax-
supported debt and strong economic growth in recent years, which has resulted
in the state's strong financial condition. Moreover, this growth has helped the
state to accommodate a mandated shift in school funding. Although Oregon's
economic growth has recently slowed due in large part to the reduction of
exports
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Smith Barney Oregon Municipals Fund 1
<PAGE>
to Asia which until recently has been in a recession, we believe that it will
strengthen in 2000.
Oregon has been successful in diversifying its economy from the timber and
agriculture industries to the high-technology and services industries. Oregon's
rising standard of living has also attracted large numbers of new residents and
helped the state to accumulate strategic reserves. Due to its economic success
and prudent debt management, Oregon's municipal securities continue to receive
high ratings from nationally recognized credit rating agencies.
Municipal Bond Market and Economic Overview
In our opinion, fixed-income markets have recently been held in check due to
concerns about the strength of the U.S. economy and the potential for
additional interest rate increases by the Federal Reserve Board ("Fed").
Against this backdrop, yields on long-term municipal bonds have increased in
recent months. With long-term municipal yields close to 6% and the yield curve
steep, we believe extending maturity may be a sound strategy. (The yield curve
shows the difference between short- and long-term rates.)
Indeed, since the most recent peak in late June, the yield on current coupon
long-term U.S. Treasury bonds is up roughly 20 basis points. (A basis point is
a measure of fluctuation of an investment, equal to 1/100 of one percent or
0.01%.) For the same period, the yield on long-term municipals is up more than
50 basis points. Taking a slightly longer view, long-term municipal yields are
up nearly 90 basis points from their lows in late January 1999.
The slope of the municipal yield curve has remained steep, reflecting
individual investors' aversion to market risk. Currently, 30-year Treasuries
yield roughly 90 basis points more than one-year issues. In the municipal
market, insured 20-year general market bonds yield approximately 210 basis
points more than one-year paper. In our opinion, the "extra" slope resulting
from risk aversion makes longer municipals a good fixed-income alternative.
The bond market has had many reasons to trade lower recently, but has resisted
them. Instead, the yield for the 30-year Treasury bond has stayed within a
narrow 40-basis-point trading range since the beginning of June 1999.
The decline of the U.S. dollar against the Japanese yen has negatively impacted
the bond markets during the period under review. Even so, because the dollar's
weakness has been limited to the yen, there has been little concern about
possible capital outflows from the U.S. or an increase in domestic inflation.
Similarly, the recent rise in oil prices has not translated into higher bond
yields because inflation appears to be well contained. The same holds true for
the recent surge in gold prices, which we do not view as a sign of either
higher inflation or higher yields.
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2 1999 Semi-Annual Report to Shareholders
<PAGE>
Fixed-income prices have come under some pressure as a result of higher
interest rates, a strong U.S. economy and improving market and economic
conditions overseas. U.S. Treasuries have remained in a narrow trading range
just above 6%, while long-term municipal bonds are yielding approximately 95%
of long-term U.S. Treasury bonds. Under typical market conditions, municipal
bonds yield roughly 85% of similar-maturity U.S. Treasury bonds.
On an optimistic note, the lack of supply in the market has been a positive
factor for bonds. As the U.S. Treasury Department continues to pay down the
national debt, the latest figures from the Clinton Administration show an
estimated budget surplus of roughly $115 billion for the current fiscal year.
Municipal Bond Market Outlook
Presently, the U.S. economy appears to be in a tug-of-war. On the one hand,
inflation appears to be well contained. On the other hand, most economic
observers -- including most Fed officials -- want the economy to slow from its
current 4% annual growth rate in order to forestall a possible rebound in
inflation. We believe that a modest amount of additional restraint could put
the U.S. economy on a path toward sustainable, noninflationary growth.
In our opinion, the recent rise in interest rates has created several buying
opportunities. We believe that we can maintain a competitive level of
tax-exempt income consistent with prudent investing and careful assessment of
credit quality. Yields on municipal securities have risen quite substantially
and the long end of the yield curve continues to favor municipal bonds. We also
think that current market conditions should be supportive for municipal bonds
for the remainder of 1999.
Municipal bonds could become a scarce commodity as the calendar nears January
1, 2000. Amid recent heavy issuance, municipal securities have become so
plentiful that many prices have declined to year lows. This increased volume
has resulted in lower prices and higher yields.
However, this could soon change as issuance decreases and investors shy away
from the markets due to Y2K concerns. Typically, new issue volume over the past
15 years has fallen by an average of 33% in January and February from November
and December.
In our opinion, the bolstered yields resulting from Y2K concerns and supply
pressures are reaching levels that make municipal issues good investment
opportunities. We also believe that yields have peaked, and that the best
investment opportunities may be in spread products such as municipal issues.
(continued on page four)
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Smith Barney Oregon Municipals Fund 3
<PAGE>
In closing, we would like to thank you for your investment in the Smith Barney
Oregon Municipals Fund. We look forward to helping you achieve your financial
goals.
Sincerely,
/s/ Health B. McLendon /s/ Peter M. Coffey
Heath B. McLendon Peter M. Coffey
Chairman Vice President
November 8, 1999
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4 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Historical Performance -- Class A Shares
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<TABLE>
<CAPTION>
Net Asset Value
-------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/31/99 $10.87 $10.07 $0.24 $0.00 (5.16)%+
- ----------------------------------------------------------------------------------------------------
4/30/99 10.76 10.87 0.49 0.09 6.56
- ----------------------------------------------------------------------------------------------------
4/30/98 10.27 10.76 0.52 0.00 9.97
- ----------------------------------------------------------------------------------------------------
4/30/97 10.26 10.27 0.54 0.15 7.01
- ----------------------------------------------------------------------------------------------------
4/30/96 10.09 10.26 0.54 0.06 7.70
- ----------------------------------------------------------------------------------------------------
Inception* - 4/30/95++ 9.55 10.09 0.49 0.00 11.08+
- ----------------------------------------------------------------------------------------------------
Total $2.82 $0.30
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<CAPTION>
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Historical Performance -- Class B Shares
- --------------------------------------------------------------------------------
Net Asset Value
-------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/31/99 $10.85 $10.06 $0.22 $0.00 (5.33)%+
- ----------------------------------------------------------------------------------------------------
4/30/99 10.75 10.85 0.44 0.09 5.94
- ----------------------------------------------------------------------------------------------------
4/30/98 10.26 10.75 0.47 0.00 9.43
- ----------------------------------------------------------------------------------------------------
4/30/97 10.25 10.26 0.49 0.15 6.48
- ----------------------------------------------------------------------------------------------------
4/30/96 10.09 10.25 0.49 0.06 7.09
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Inception* - 4/30/95++ 9.55 10.09 0.45 0.00 10.59+
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Total $2.56 $0.30
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<CAPTION>
- --------------------------------------------------------------------------------
Historical Performance -- Class L Shares
- --------------------------------------------------------------------------------
Net Asset Value
-------------------------
Beginning End Income Capital Gain Total
Period Ended of Period of Period Dividends Distributions Returns(1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/31/99 $10.86 $10.07 $0.22 $0.00 (5.34)%+
- ----------------------------------------------------------------------------------------------------
4/30/99 10.76 10.86 0.44 0.09 5.90
- ----------------------------------------------------------------------------------------------------
4/30/98 10.27 10.76 0.46 0.00 9.38
- ----------------------------------------------------------------------------------------------------
4/30/97 10.26 10.27 0.48 0.15 6.43
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Inception* - 4/30/96 10.28 10.26 0.47 0.06 4.99 +
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Total $2.07 $0.30
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</TABLE>
It is the Fund's policy to distribute dividends monthly and capital gains, if
any, annually.
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Smith Barney Oregon Municipals Fund 5
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Total Returns
- --------------------------------------------------------------------------------
Without Sales Charges(1)
---------------------------------------------
Class A Class B Class L
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Six Months Ended 10/31/99+ (5.16)% (5.33)% (5.34)%
- -----------------------------------------------------------------------------
Year Ended 10/31/99 (3.38) (3.87) (3.90)
- -----------------------------------------------------------------------------
Inception* through 10/31/99 6.69++ 6.15++ 4.66
- -----------------------------------------------------------------------------
<CAPTION>
With Sales Charges(2)
---------------------------------------------
Class A Class B Class L
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Six Months Ended 10/31/99+ (8.93)% (9.50)% (7.21)%
- -----------------------------------------------------------------------------
Year Ended 10/31/99 (7.26) (7.99) (5.76)
- -----------------------------------------------------------------------------
Inception* through 10/31/99 5.89++ 6.15++ 4.43
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Cumulative Total Returns
- --------------------------------------------------------------------------------
<CAPTION>
Without Sales Charges(1)
- ---------------------------------------------------------------------
<S> <C>
Class A (Inception* through 10/31/99) 42.27%++
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Class B (Inception* through 10/31/99) 38.41++
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Class L (Inception* through 10/31/99) 22.53
- ---------------------------------------------------------------------
</TABLE>
(1) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value and does not reflect the deduction of the
applicable sales charges with respect to Class A and L shares or the
applicable contingent deferred sales charges ("CDSC") with respect to Class
B and L shares.
(2) Assumes reinvestment of all dividends and capital gain distributions, if
any, at net asset value. In addition, Class A and L shares reflect the
deduction of the maximum initial sales charges of 4.00% and 1.00%,
respectively. Class B shares reflect the deduction of a 4.50% CDSC, which
applies if shares are redeemed within one year from purchase. This CDSC
declines by 0.50% the first year after purchase and thereafter by 1.00% per
year until no CDSC is incurred. Class L shares reflect the deduction of a
1.00% CDSC, which applies if shares are redeemed within the first year of
purchase.
+ Total return is not annualized, as it may not be representative of the
total return for the year.
* The inception date for Class A and B shares is May 23, 1994 and May 16,
1995 for Class L shares.
++ Total return includes the effect of the cash contribution to capital from
the investment adviser which was made on October 24, 1994. Without this
cash contribution the total returns would have been:
<TABLE>
<CAPTION>
Class A Class B
- -----------------------------------------------------------------------------
<S> <C> <C>
Inception* through 4/30/95 6.23% 5.55%
- -----------------------------------------------------------------------------
Inception* through 10/31/99:
Average Annual Total Return Without Sales Charges 6.04% 5.42%
Average Annual Total Return With Sales Charges 5.24 5.42
- -----------------------------------------------------------------------------
Cumulative Total Return 37.61% 33.31%
- -----------------------------------------------------------------------------
</TABLE>
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6 1999 Semi-Annual Report to Shareholders
<PAGE>
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Historical Performance (unaudited)
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Growth of $10,000 Invested in Class A and B Shares of
Smith Barney Oregon Municipals Fund vs.
the Lehman Brothers Municipal Bond Index+
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May 1994 -- October 1999
[Begin chart]
5/23/99 9598 10000 10000
4/95 10662 10609 10574
4/96 11483 11442 11414
4/97 12287 12310 12172
4/98 13512 13559 13305
4/99 14398 14520 14230
10/31/99 13655 13841 13737
[End Chart]
+ Hypothetical illustration of $10,000 invested in Class A and B shares on May
23, 1994 (inception date), assuming deduction of the maximum 4.00% sales
charge at the time of investment for Class A shares and the deduction of the
maximum 4.50% CDSC for Class B shares, which applies if shares are redeemed
within one year from purchase. This CDSC declines by 0.50% the first year
after purchase and thereafter by 1.00% per year until no CDSC is incurred.
The illustration also assumes reinvestment of dividends and capital gains,
if any, at net asset value through October 31, 1999. The Lehman Brothers
Municipal Bond Index is a broad based, total return index comprised of
investment grade, fixed rate municipal bonds selected from issues larger
than $50 million issued since January 1991. The index is unmanaged and is
not subject to the same management and trading expenses as a mutual fund.
The performance of the Fund's other class of shares may be greater or less
than Class A and B shares' performance indicated on this chart, depending on
whether greater or lesser sales charges and fees were incurred by
shareholders investing in the other class.
All figures represent past performance and are not a guarantee of future
results. Investment returns and principal value will fluctuate, and redemption
values may be more or less than the original cost. No adjustment has been made
for shareholder tax liability on dividends or capital gains.
* This figure includes the effect of the cash contribution to capital from the
investment adviser.
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Smith Barney Oregon Municipals Fund 7
<PAGE>
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Portfolio Highlights (unaudited) October 31, 1999
- --------------------------------------------------------------------------------
Portfolio Breakdown
[Begin chart]
Miscellaneous 8.3%
Tax Allocation 0.7%
Education 13.3%
Utilities 6.4%
General Obligation 11.9%
Industrial Development 2.7%
Water and Sewer 4.8%
Hospitals 9.6%
Life Care Systems 4.9%
Transportation 8.7%
Housing 24.5%
Short-Term 4.2%
[End Chart]
Summary of Investments by Combined Ratings
<TABLE>
<CAPTION>
Standard & Percentage of
Moody's and/or Poor's Total Investments
- --------------------------------------------------------
<S> <C> <C>
Aaa AAA 33.0%
Aa AA 25.4
A A 15.2
Baa BBB 12.6
NR NR 13.8
-----
100.0%
=====
</TABLE>
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8 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING (a) SECURITY VALUE
- ---------------------------------------------------------------------------------------------
Education -- 13.3%
<S> <C> <C> <C>
$1,000,000 AAA Columbia County School District No. 502,
FGIC-Insured, zero coupon due 6/1/18 $331,250
1,000,000 AAA Marion County School District No. 103C, Woodburn
Deferred Interest, Series B, FGIC-Insured,
zero coupon due 11/1/12 482,500
1,000,000 AAA Oregon Health Sciences, University Revenue, Series A,
MBIA-Insured, zero coupon due 7/1/13 460,000
1,000,000 AA Oregon State Board Higher Education, Series A,
6.000% due 8/1/26 1,072,500
430,000 A3* Oregon State Health, Housing, Educational & Cultural
Facilities Authority, Series A, (Oak Tree Foundation
Project), 6.100% due 5/1/15 435,375
Umatilla County:
610,000 AAA Blue Mountain Community College District,
AMBAC-Insured, 5.250% due 6/15/13 597,037
1,000,000 AAA School District No. 8R, (Hermiston Project), GO,
MBIA-Insured, 5.050% due 6/15/16 913,750
Washington County School District No. 088J,
(Sherwood Project), FSA-Insured:
100,000 AAA 6.100% due 6/1/12 104,500
400,000 AAA Pre-Refunded -- Escrowed with U.S. government
securities to 6/1/05 Call @ 100,
6.100% due 6/1/12(b) 426,000
- ---------------------------------------------------------------------------------------------
4,822,912
- ---------------------------------------------------------------------------------------------
General Obligation -- 11.9%
450,000 AAA Chemeketa Community College District, GO,
FGIC-Insured, 5.800% due 6/1/12 473,062
500,000 AAA Lane County Bethel, GO, School District No. 052,
FGIC-Insured, 6.400% due 12/1/09 535,625
500,000 AAA Lincoln County School District, GO, Series 95,
FGIC-Insured, 5.250% due 6/15/12 490,625
480,000 AA Oregon State Veterans Welfare, GO, Series 76A,
5.900% due 10/1/17 485,400
Puerto Rico Commonwealth, GO, Public Improvement
Refunding Bonds:
1,000,000 A 5.500% due 7/1/13 1,000,000
1,000,000 AAA AMBAC-Insured, 4.500% due 7/1/23 808,750
500,000 Aaa* Yamhill County School District No. 040, GO,
FGIC-Insured, 5.600% due 6/1/16 500,000
- ---------------------------------------------------------------------------------------------
4,293,462
- ---------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
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Smith Barney Oregon Municipals Fund 9
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING (a) SECURITY VALUE
- ---------------------------------------------------------------------------------------------------
Hospitals -- 9.6%
<S> <C> <C> <C>
$500,000 A Benton County Hospital Facility Authority Revenue,
(Samaritan Health Services Project),
5.200% due 10/1/17 $451,875
Clackamas County Hospital Facility Authority Revenue:
1,000,000 AA Legacy Health Systems, 5.500% due 2/15/14 976,250
1,000,000 Baa1* Williamette Falls Hospital Project, 6.000% due 4/1/19 937,500
595,000 BBB+ Klamath Falls Intercommunity Hospital Authority
Revenue, (Gross-Merle West Medical Center Project),
7.100% due 9/1/24 613,594
500,000 BBB- Puerto Rico Industrial Tourist Education, Medical &
Environmental Control Facilities, (Ryder Memorial
Hospital Project), Series A, 6.700% due 5/1/24 511,250
- ---------------------------------------------------------------------------------------------------
3,490,469
- ---------------------------------------------------------------------------------------------------
Housing: Multi-Family -- 15.1%
215,000 Aa2* Oregon State Housing & Community Services,
Housing & Finance Revenue Bonds, Assisted or
Insured Multi-Unit Mortgages, Series A, FHA-Insured,
6.800% due 7/1/13 222,794
Portland Housing Authority, Multi-Family Revenue, Series A:
500,000 Aa1* Cherry Blossom Apartments, GNMA-Collateralized,
6.100% due 12/20/26(c) 509,375
1,000,000 Aa3* Cherry Ridge Project, 6.250% due 5/1/12(c) 1,015,000
300,000 NR Sr. Lien Revenue, (Fairview Woods Project),
Pre-Refunded -- Escrowed with U.S. government
securities to 8/1/04 Call @ 100,
6.875% due 8/1/14(b) 327,000
555,000 AAA Portland Multi-Family Revenue, Collins Circle Apartments,
FNMA-Collateralized, 5.125% due 6/1/21(c) 498,806
Washington County Housing Authority, Multi-Family Revenue:
1,000,000 NR Affordable Housing Pool, Series A, 6.000% due 7/1/20 916,250
1,000,000 Aa3* Bethany Meadows Project, 6.250% due 8/1/13(c) 1,016,250
1,000,000 AAA Tualatin Meadows Project, FNMA-Collateralized,
5.900% due 11/1/18(c) 978,750
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5,484,225
- ---------------------------------------------------------------------------------------------------
Housing: Single-Family -- 9.4%
Oregon State Housing & Community Services, Mortgage
Revenue Bonds, Single-Family Mortgage Program:
2,000,000 Aa2* Series B, 6.875% due 7/1/28 2,075,000
310,000 Aa2* Series D, 6.500% due 7/1/24(c) 315,427
500,000 A Portland Housing Authority Revenue, Pooled Housing,
Series A, 5.000% due 1/1/19 450,625
</TABLE>
See Notes to Financial Statements.
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10 1999 Semi-Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING (a) SECURITY VALUE
- ------------------------------------------------------------------------------------------------
Housing: Single-Family -- 9.4% (continued)
<S> <C> <C> <C>
$320,000 AAA Puerto Rico Housing Bank & Finance Agency, Single-
Family Mortgage Revenue, Affordable Housing
Mortgage-Portfolio I, GNMA/FNMA/FHLMC-
Collateralized, 6.250% due 4/1/29(c) $326,400
240,000 AAA Virgin Islands HFA, Single-Family Mortgage Revenue,
Program A, GNMA-Collateralized,
6.450% due 3/1/16(c) 244,800
- ------------------------------------------------------------------------------------------------
3,412,252
- ------------------------------------------------------------------------------------------------
Industrial Development -- 2.7%
1,000,000 Baa2* Oregon State EDR, Georgia-Pacific Corp., Series CVLII,
6.350% due 8/1/25(c) 991,250
- ------------------------------------------------------------------------------------------------
Life Care Systems -- 4.9%
400,000 NR Albany Hospital Facilities Authority Revenue, Mennonite
Home of Albany Inc., 5.900% due 10/1/20 367,000
Clackamas County Hospital Facilities Authority Revenue:
500,000 NR Robison Jewish Home Project, 6.250% due 10/1/28 472,500
1,000,000 NR Senior Living Facility Mary's Woods at Marylhurst,
Series A, 6.625% due 5/15/29 947,500
- ------------------------------------------------------------------------------------------------
1,787,000
- ------------------------------------------------------------------------------------------------
Miscellaneous -- 8.3%
435,000 A3* Deschutes County COP, 5.000% due 6/1/16 386,606
345,000 NR Lebanon Urban Renewal Agency, 5.500% due 6/1/14 325,163
Oregon State Bond Bank Revenue, Economic
Development Department, Series 1:
50,000 A2* 6.700% due 1/1/15 53,312
550,000 A2* Pre-Refunded -- Escrowed with U.S. government
securities to 1/1/03 Call @ 102,
6.700% due 1/1/15(b) 593,312
500,000 AAA Oregon State Department of Administrative Services,
COP, Series A, AMBAC-Insured, 5.800% due 5/1/24 529,375
500,000 BBB Puerto Rico Housing Bank & Finance Agency, Kidder,
7.500% due 12/1/06 551,875
500,000 BBB- Virgin Islands Public Finance Authority Revenue,
Sr. Lien, Series A, 5.500% due 10/1/18 463,125
100,000 NR Western Generation Agency, (Wauna Cogeneration
Project), Series B, 7.250% due 1/1/09(c) 104,250
- ------------------------------------------------------------------------------------------------
3,007,018
- ------------------------------------------------------------------------------------------------
Short-Term (d) -- 4.2%
1,500,000 Aa3* Oregon State Veterans Welfare, GO, Series 73E,
3.450% due 12/1/16 1,500,000
- ------------------------------------------------------------------------------------------------
Tax Allocation -- 0.7%
250,000 A- Medford Urban Renewal Agency, Tax Revenue, Series A,
5.875% due 9/1/10 252,187
- ------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Oregon Municipals Fund 11
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE
AMOUNT RATING (a) SECURITY VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Transportation -- 8.7%
Port Portland Airport Revenue, Portland
International Airport:
$500,000 AAA Series 12C, 5.000% due 7/1/18(c) $438,125
1,000,000 AAA Series B, AMBAC-Insured, 5.500% due 7/1/18(c) 947,500
1,500,000 A Puerto Rico Commonwealth Highway & Transportation
Authority, Highway Revenue, Series Y,
5.000% due 7/1/36 1,261,875
500,000 Baa2* Puerto Rico Port Authority Revenue, Special Facilities,
(American Airlines Project), Series A,
6.250% due 6/1/26(c) 488,750
- ----------------------------------------------------------------------------------------------------
3,136,250
- ----------------------------------------------------------------------------------------------------
Utilities -- 6.4%
500,000 AAA Guam Power Authority Revenue, Series A,
6.300% due 10/1/22 536,875
1,000,000 NR Klamath Falls Electric Revenue, Sr. Lien,
5.875% due 1/1/16 936,250
1,000,000 AAA Puerto Rico Electric Power Authority, Series EE,
4.500% due 7/1/18 831,250
- ----------------------------------------------------------------------------------------------------
2,304,375
- ----------------------------------------------------------------------------------------------------
Water and Sewer -- 4.8%
250,000 A+ Beavertown Water Revenue, Series 1994,
6.125% due 6/1/14 255,000
360,000 A+ Clackamas County Service District No. 001, Sewer
Revenue, 6.375% due 10/1/14 374,400
500,000 AAA Klamath Falls Water Revenue, FSA-Insured,
5.600% due 7/1/16 498,125
600,000 NR Port Umatilla Water Revenue, 6.650% due 8/1/22(c) 618,000
- ----------------------------------------------------------------------------------------------------
1,745,525
- ----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $36,769,320**) $36,226,925
- ----------------------------------------------------------------------------------------------------
</TABLE>
(a) All ratings are by Standard & Poor's Ratings Service with the exception of
those identified by an asterisk (*), which are rated by Moody's Investors
Service, Inc.
(b) Pre-Refunded bonds escrowed with U.S. government securities are considered
by the investment adviser to be triple-A rated even if the issuer has not
applied for new ratings.
(c) Income from these issues is considered a preference item for purposes of
calculating the alternative minimum tax.
(d) Variable rate obligation payable at par on demand at any time on no more
than seven days notice.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 13 and 14 for definition of ratings and certain security descriptions.
See Notes to Financial Statements.
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12 1999 Semi-Annual Report to Shareholders
<PAGE>
Bond Ratings (unaudited)
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings Service ("Standard & Poor's") -- Ratings from "AA" to
"BBB" may be modified by the addition of a plus (+) or minus (-) sign to show
relative standings within the major rating categories.
<TABLE>
<S> <C> <C>
TAAA -- Bonds rated "AAA" have the highest rating assigned by Standard & Poor's. Capacity to
pay interest and repay principal is extremely strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and repay principal and
differs from the highest rated issue only in a small degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay principal although it
is somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than debt in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an adequate capacity to pay interest and repay
principal. Whereas they normally exhibit adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this category than in higher rated
categories.
</TABLE>
Moody's Investors Service, Inc. ("Moody's") -- Numerical modifiers 1, 2 and 3
may be applied to each generic rating from "Aa" to "Baa," where 1 is the
highest and 3 the lowest ranking within its generic category.
<TABLE>
<S> <C> <C>
Aaa -- Bonds rated "Aaa" are judged to be of the best quality. They carry the smallest degree
of investment risk and are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
Aa -- Bonds rated "Aa" are judged to be of high quality by all standards. Together with the "Aaa"
group they comprise what are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be as large in Aaa securities
or fluctuation of protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than in Aaa
securities.
A -- Bonds rated "A" possess many favorable investment attributes and are to be considered
as upper medium grade obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a susceptibility to
impairment some time in the future.
Baa -- Bonds rated "Baa" are considered as medium grade obligations, i.e., they are neither
highly protected nor poorly secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.
NR -- Indicates that the bond is not rated by Standard & Poor's or Moody's.
</TABLE>
- --------------------------------------------------------------------------------
Smith Barney Oregon Municipals Fund 13
<PAGE>
Short-Term Security Ratings (unaudited)
<TABLE>
<S> <C> <C>
SP-1 -- Standard & Poor's highest rating indicating very strong or strong capacity to pay principal
and interest; those issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate demand obligation
(VRDO) rating indicating that the degree of safety regarding timely payment is either
overwhelming or very strong; those issues determined to possess overwhelming safety
characteristics are denoted with a plus (+) sign.
VMIG 1 -- Moody's highest rating for issues having a demand feature--VRDO.
P-1 -- Moody's highest rating for commercial paper and for VRDO prior to the advent of the
VMIG 1 rating.
</TABLE>
- --------------------------------------------------------------------------------
Security Descriptions (unaudited)
ABAG -- Association of Bay Area
Governments
AIG -- American International Guaranty
AMBAC -- AMBAC Indemnity Corporation
BAN -- Bond Anticipation Notes
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance
Company
CHFCLI -- California Health Facility
Construction Loan Insurance
CONNIE -- College Construction Loan
LEE Insurance Association
COP -- Certificate of Participation
EDA -- Economic Development Authority
EDR -- Economic Development Revenue
ETM -- Escrowed To Maturity
FGIC -- Financial Guaranty Insurance
Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage
Corporation
FLAIRS -- Floating Adjustable Interest
Rate Securities
FNMA -- Federal National Mortgage
Association
FRTC -- Floating Rate Trust Certificates
FSA -- Financing Security Assurance
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage
Association
GO -- General Obligation
HDC -- Housing Development
Corporation
HFA -- Housing Finance Authority
IDA -- Industrial Development
Authority
IDB -- Industrial Development Board
IDR -- Industrial Development
Revenue
INFLOS -- Inverse Floaters
ISD -- Independent School District
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors
Assurance Corporation
MVRICS -- Municipal Variable Rate Inverse
Coupon Security
PCR -- Pollution Control Revenue
PSF -- Permanent School Fund
RAN -- Revenue Anticipation Notes
RIBS -- Residual Interest Bonds
RITES -- Residual Interest Tax-Exempt
Securities
TAN -- Tax Anticipation Notes
TECP -- Tax-Exempt Commercial Paper
TOB -- Tender Option Bonds
TRAN -- Tax and Revenue Anticipation
Notes
SYCC -- Structured Yield Curve
Certificate
VA -- Veterans Administration
VRDD -- Variable Rate Daily
Demand
VRWE -- Variable Rate Wednesday
Demand
- --------------------------------------------------------------------------------
14 1999 Semi-Annual Report to Shareholders
<PAGE>
Statement of Assets and Liabilities (unaudited) October 31, 1999
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments, at value (Cost -- $36,769,320) $36,226,925
Interest receivable 632,874
Receivable for Fund shares sold 1,908
- ---------------------------------------------------------------------------------
Total Assets 36,861,707
- ---------------------------------------------------------------------------------
LIABILITIES:
Payable to bank 387,050
Dividends payable 138,936
Administration fees payable 57,817
Investment advisory fees payable 15,429
Distribution fees payable 2,949
Accrued expenses 38,212
- ---------------------------------------------------------------------------------
Total Liabilities 640,393
- ---------------------------------------------------------------------------------
Total Net Assets $36,221,314
- ---------------------------------------------------------------------------------
NET ASSETS:
Par value of shares of beneficial interest $ 3,598
Capital paid in excess of par value 37,131,165
Undistributed net investment income 28,258
Accumulated net realized loss from security transactions (399,312)
Net unrealized depreciation of investments (542,395)
- ---------------------------------------------------------------------------------
Total Net Assets $36,221,314
- ---------------------------------------------------------------------------------
Shares Outstanding:
Class A 1,460,934
- ---------------------------------------------------------------------------------
Class B 1,774,909
- ---------------------------------------------------------------------------------
Class L 362,623
- ---------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $10.07
- ---------------------------------------------------------------------------------
Class B* $10.06
- ---------------------------------------------------------------------------------
Class L** $10.07
- ---------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 4.17% of net asset value per share) $10.49
- ---------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $10.17
- ---------------------------------------------------------------------------------
</TABLE>
* Redemption price is NAV of Class B shares reduced by a 4.50% CDSC if shares
are redeemed within one year from purchase (See Note 4).
** Redemption price is NAV of Class L shares reduced by a 1.00% CDSC if shares
are redeemed within the first year of purchase.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Oregon Municipals Fund 15
<PAGE>
Statement of Operations (unaudited)
For the Six Months Ended October 31, 1999
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Interest $1,060,771
- ------------------------------------------------------------------------------------
EXPENSES:
Distribution fees (Note 4) 85,110
Investment advisory fees (Note 4) 56,471
Administration fees (Note 4) 37,647
Audit and legal 15,501
Shareholder and system servicing fees 13,596
Shareholder communications 13,252
Trustees' fees 7,551
Pricing service fees 3,602
Registration fees 3,251
Custody 1,050
Other 4,406
- ------------------------------------------------------------------------------------
Total Expenses 241,437
Less: Investment advisory and administration fee waivers (Note 4) (28,236)
- ------------------------------------------------------------------------------------
Net Expenses 213,201
- ------------------------------------------------------------------------------------
Net Investment Income 847,570
- ------------------------------------------------------------------------------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTE 5):
Realized Loss From Security Transactions
(excluding short-term securities):
Proceeds from sales 12,822,220
Cost of securities sold 13,275,747
- ------------------------------------------------------------------------------------
Net Realized Loss (453,527)
- ------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation) of Investments:
Beginning of period 1,898,002
End of period (542,395)
- ------------------------------------------------------------------------------------
Increase in Net Unrealized Depreciation (2,440,397)
- ------------------------------------------------------------------------------------
Net Loss on Investments (2,893,924)
- ------------------------------------------------------------------------------------
Decrease in Net Assets From Operations $(2,046,354)
- ------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Semi-Annual Report to Shareholders
<PAGE>
Statements of Changes in Net Assets
For the Six Months Ended October 31, 1999 (unaudited)
and the Year Ended April 30, 1999
<TABLE>
<CAPTION>
October 31 April 30
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $847,570 $1,463,042
Net realized gain (loss) (453,527) 136,136
Increase in net unrealized appreciation (depreciation) (2,440,397) 430,108
- -------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations (2,046,354) 2,029,286
- -------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 3):
Net investment income (820,331) (1,479,516)
Net realized gains -- (282,224)
- -------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (820,331) (1,761,740)
- -------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 7):
Net proceeds from sale of shares 2,733,426 9,452,267
Net asset value of shares issued for reinvestment of dividends 436,094 1,169,668
Cost of shares reacquired (3,065,528) (3,077,154)
- -------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 103,992 7,544,781
- -------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets (2,762,693) 7,812,327
NET ASSETS:
Beginning of period 38,984,007 31,171,680
- -------------------------------------------------------------------------------------------------
End of period* $36,221,314 $38,984,007
- -------------------------------------------------------------------------------------------------
* Includes undistributed net investment income: $28,258 $1,019
- -------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Oregon Municipals Fund 17
<PAGE>
Notes to Financial Statements (unaudited)
1. Significant Accounting Policies
Smith Barney Oregon Municipals Fund ("Fund"), a Massachusetts business trust,
is registered under the Investment Company Act of 1940, as amended, as a non-
diversified, open-end management investment company.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities are
valued at the mean between the quoted bid and ask prices provided by an
independent pricing service; (c) securities maturing within 60 days are valued
at cost plus accreted discount or minus amortized premium, which approximates
value; (d) gains or losses on the sale of securities are calculated by using
the specific identification method; (e) interest income, adjusted for
amortization of premium and accretion of original issue discount, is recorded
on an accrual basis; market discount is recognized upon the disposition of the
security; (f) direct expenses are charged to the Fund and each class;
investment advisory, administration fees and general fund expenses are
allocated on the basis of relative net assets by class; (g) dividends and
distributions to shareholders are recorded on the ex-dividend date; (h) the
Fund intends to comply with the applicable provisions of the Internal Revenue
Code of 1986, as amended, pertaining to regulated investment companies and to
make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes; (i) the character of income
and gains to be distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles. At
April 30, 1999, reclassifications were made to the capital accounts of the Fund
to reflect permanent book/tax differences and income and gains available for
distribution under income tax regulations. Accordingly, reclassifications were
made from total paid-in capital to accumulated net realized gains and
overdistributed net investment income in the amounts of $32,591 and $4,046,
respectively. Net investment income, net realized gains and net assets were not
affected by this change; and (j) estimates and assumptions are required to be
made regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
2. Fund Concentration
Since the Fund invests primarily in obligations of issuers within Oregon, it is
subject to possible concentration risks associated with economic, political or
legal developments or industrial or regional matters specifically affecting
Oregon.
- --------------------------------------------------------------------------------
18 1999 Semi-Annual Report to Shareholders
<PAGE>
Notes to Financial Statements (unaudited) (continued)
3. Exempt-Interest Dividends and Other Distributions
The Fund intends to satisfy conditions that will enable interest from municipal
securities, which is exempt from regular Federal income tax and from designated
state income taxes, to retain such tax-exempt status when distributed to the
shareholders of the Fund.
Capital gains distributions, if any, are taxable to shareholders, and are
declared and paid at least annually. Additional taxable distributions may be
made if necessary to avoid a Federal excise tax.
4. Investment Advisory Agreement, Administration Agreement and
Affiliated Transactions
SSB Citi Fund Management LLC ("SSBC"), formerly known as SSBC Fund Management
Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as
investment adviser to the Fund. The Fund pays SSBC an investment advisory fee
calculated at an annual rate of 0.30% of the Fund's average daily net assets.
This fee is calculated daily and paid monthly. SSBC waived $16,942 of the
investment advisory fees for the Fund for the six months ended October 31,
1999.
SSBC also acts as the Fund's administrator for which the Fund pays a fee
calculated at an annual rate of 0.20% of the average daily net assets up to
$500 million and 0.18% of the average daily net assets in excess of $500
million. This fee is calculated daily and paid monthly. SSBC waived $11,294 of
its administration fees for the six months ended October 31, 1999.
CFBDS, Inc. acts as the Fund's distributor. Salomon Smith Barney Inc. ("SSB"),
another subsidiary of SSBH, as well as certain other broker-dealers, continues
to sell Fund shares to the public as members of the selling group.
There is a contingent deferred sales charge ("CDSC") of 4.50% on Class B
shares, which applies if redemption occurs within one year from purchase. This
CDSC declines by 0.50% the first year after purchase and thereafter by 1.00%
per year until no CDSC is incurred. Class L shares also have a 1.00% CDSC,
which applies if redemption occurs within the first year of purchase.
For the six months ended October 31, 1999, SSB and CFBDS received sales charges
of $10,000 and $7,000 on sales of the Fund's Class A and Class L shares,
respectively. In addition, CDSCs paid to SSB were approximately $19,000 for
Class B shares.
- --------------------------------------------------------------------------------
Smith Barney Oregon Municipals Fund 19
<PAGE>
Notes to Financial Statements (unaudited) (continued)
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to
its Class A, B and L shares calculated at an annual rate of 0.15% of the
average daily net assets for each respective class. In addition, the Fund pays
a distribution fee with respect to its Class B and L shares calculated at the
annual rates of 0.50% and 0.55% of the average daily net assets for each class,
respectively. For the six months ended October 31, 1999, total Distribution
Plan fees incurred were:
<TABLE>
<CAPTION>
Class A Class B Class L
- ------------------------------------------------------------
<S> <C> <C> <C>
Distribution Plan Fees $11,437 $61,363 $12,310
- ------------------------------------------------------------
</TABLE>
All officers and one Trustee of the Fund are employees of SSB.
5. Investments
During the six months ended October 31, 1999, the aggregate cost of purchases
and proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
<TABLE>
<CAPTION>
- -------------------------
<S> <C>
Purchases $11,787,126
- -------------------------
Sales $12,822,220
- -------------------------
</TABLE>
At October 31, 1999, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------
<S> <C>
Gross unrealized appreciation $ 534,782
Gross unrealized depreciation (1,077,177)
- -----------------------------------------------
Net unrealized depreciation $(542,395)
- -----------------------------------------------
</TABLE>
6. Futures Contracts
Initial margin deposits are made upon entering into futures contracts and are
recognized as assets. Securities equal to the initial margin amount are
segregated by the custodian in the name of the broker. Additional securities
are also segregated up to the current market value of the futures contracts.
During the period the futures contract is open, changes in the value of the
contract are recognized as unrealized gains or losses by "marking to market" on
a daily basis to reflect the market value of the contract at the end of each
day's trading. Variation margin payments are received or made and recognized as
assets due from or liabilities due to broker, depending upon whether unrealized
gains or losses are incurred. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the proceeds from (or
cost of) the closing transactions and the Fund's basis in the contract.
- --------------------------------------------------------------------------------
20 1999 Semi-Annual Report to Shareholders
<PAGE>
Notes to Financial Statements (unaudited) (continued)
The Fund enters into such contracts to hedge a portion of its portfolio. The
Fund bear the market risk that arises from changes in the value of the
financial instruments and securities indices (futures contracts).
At October 31, 1999, the Fund had no open futures contracts.
7. Shares of Beneficial Interest
At October 31, 1999, the Fund had an unlimited number of shares of beneficial
interest authorized with par value of $0.001 per share. The Fund has the
ability to issue multiple classes of shares. Each share of a class represents
an identical interest and has the same rights, except that each class bears
certain direct expenses, including those specifically related to the
distribution of its shares.
At October 31, 1999, total paid-in capital amounted to the following for each
class:
<TABLE>
<CAPTION>
Class A Class B Class L
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Total Paid-in Capital $15,029,536 $18,243,929 $3,861,298
- ----------------------------------------------------------------------
</TABLE>
Transactions in shares of each class were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
October 31, 1999 April 30, 1999
------------------------------- ----------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------
Class A
<S> <C> <C> <C> <C>
Shares sold 74,336 $ 784,351 340,767 $3,725,265
Shares issued on reinvestment 18,200 190,535 45,010 491,631
Shares reacquired (103,242) (1,089,985) (63,742) (698,280)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (10,706) $(115,099) 322,035 $3,518,616
- ------------------------------------------------------------------------------------------------
Class B
Shares sold 111,398 $1,167,154 395,222 $4,317,774
Shares issued on reinvestment 18,665 195,103 53,382 582,138
Shares reacquired (182,705) (1,904,727) (173,824) (1,903,362)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) (52,642) $(542,470) 274,780 $2,996,550
- ------------------------------------------------------------------------------------------------
Class L+
Shares sold 74,047 $ 781,921 128,930 $1,409,228
Shares issued on reinvestment 4,825 50,456 8,787 95,899
Shares reacquired (6,807) (70,816) (43,294) (475,512)
- ------------------------------------------------------------------------------------------------
Net Increase 72,065 $ 761,561 94,423 $1,029,615
- ------------------------------------------------------------------------------------------------
</TABLE>
+ On June 12, 1998, Class C shares were renamed Class L shares.
- --------------------------------------------------------------------------------
Smith Barney Oregon Municipals Fund 21
<PAGE>
Financial Highlights
For a share of each class of beneficial interest outstanding throughout each
year ended April 30, except where noted:
<TABLE>
<CAPTION>
Class A Shares 1999(1)(2) 1999(2) 1998 1997 1996 1995(3)(4)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $10.87 $10.76 $10.27 $10.26 $10.09 $ 9.55
- ------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(5) 0.25 0.49 0.53 0.54 0.55 0.49
Net realized and
unrealized gain (loss) (0.81) 0.20 0.48 0.16 0.22 0.54
- ------------------------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations (0.56) 0.69 1.01 0.70 0.77 1.03
- ------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.24) (0.49) (0.52) (0.54) (0.54) (0.49)
Net realized gains -- (0.09) -- (0.13) (0.06) --
In excess of net realized gains -- -- -- (0.02) -- --
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.24) (0.58) (0.52) (0.69) (0.60) (0.49)
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.07 $10.87 $10.76 $10.27 $10.26 $10.09
- ------------------------------------------------------------------------------------------------------------------------
Total Return (5.16)%++ 6.56% 9.97% 7.01% 7.70% 11.08%++
- ------------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $14,717 $15,994 $12,371 $9,769 $7,520 $6,323
- ------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(5) 0.82%+ 0.87% 0.65% 0.65% 0.66% 0.82%+
Net investment income 4.76+ 4.49 4.96 5.21 5.21 5.28+
- ------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 31% 28% 49% 37% 75% 30%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the six months ended October 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period from May 23, 1994 (inception date) to April 30, 1995.
(4) Total return for Class A shares for the period ended April 30, 1995
includes the effect of the cash contribution from the adviser which was
made on October 24, 1994. The total amount of this contribution was
$251,349. Without this cash contribution the total return would have been
6.23%.
(5) The investment adviser and administrator waived all or part of their fees
for the six months ended October 31, 1999 and the years ended April 30,
1999, 1998, 1997, 1996 and the period ended April 30, 1995. In addition,
the investment adviser has reimbursed the Fund for $53,166, $85,446 and
$64,336 in expenses for the years ended April 30, 1997, 1996 and the
period ended April 30, 1995, respectively. If such fees were not waived
and expenses were not reimbursed, the per share effect on the net
investment income and the ratios of expenses to average net assets would
have been as follows:
<TABLE>
<CAPTION>
Per Share Decreases
to Net Investment Income
------------------------------------------------------------
1999(1) 1999 1998 1997 1996 1995
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Class A $0.01 $0.01 $0.05 $0.07 $0.11 $0.12
<CAPTION>
Expense Ratios
Without Fee Waivers
and Reimbursements
--------------------------------------------------------------
1999(1) 1999 1998 1997 1996 1995
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Class A 0.96%+ 0.99% 1.12% 1.41% 1.75% 2.05%+
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
22 1999 Semi-Annual Report to Shareholders
<PAGE>
Financial Highlights (continued)
For a share of each class of beneficial interest outstanding throughout each
year ended April 30, except where noted:
<TABLE>
<CAPTION>
Class B Shares 1999(1)(2) 1999(2) 1998 1997 1996 1995(3)(4)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $10.85 $10.75 $10.26 $10.25 $10.09 $9.55
- -------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(5) 0.22 0.43 0.48 0.48 0.49 0.44
Net realized and
unrealized gain (loss) (0.79) 0.20 0.48 0.17 0.22 0.55
- -------------------------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations (0.57) 0.63 0.96 0.65 0.71 0.99
- -------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.22) (0.44) (0.47) (0.49) (0.49) (0.45)
Net realized gains -- (0.09) -- (0.13) (0.06) --
In excess of net realized gains -- -- -- (0.02) -- --
- -------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.22) (0.53) (0.47) (0.64) (0.55) (0.45)
- -------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.06 $10.85 $10.75 $10.26 $10.25 $10.09
- -------------------------------------------------------------------------------------------------------------------------
Total Return (5.33)%++ 5.94% 9.43% 6.48% 7.09% 10.59%++
- -------------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $17,853 $19,833 $16,691 $13,184 $9,861 $6,558
- -------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(5) 1.32%+ 1.39% 1.17% 1.17% 1.21% 1.38%+
Net investment income 4.25+ 3.97 4.44 4.69 4.62 4.74+
- -------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 31% 28% 49% 37% 75% 30%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the six months ended October 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period from May 23, 1994 (inception date) to April 30, 1995.
(4) Total return for Class B shares for the period ended April 30, 1995
includes the effect of the cash contribution from the adviser which was
made on October 24, 1994. The total amount of this contribution was
$221,558. Without this cash contribution the total return would have been
5.55%.
(5) The investment adviser and administrator waived all or part of their fees
for the six months ended October 31, 1999 and the years ended April 30,
1999, 1998, 1997, 1996 and the period ended April 30, 1995. In addition,
the investment adviser has reimbursed the Fund for $53,166, $85,446 and
$64,336 in expenses for the years ended April 30, 1997, 1996 and the
period ended April 30, 1995, respectively. If such fees were not waived
and expenses were not reimbursed, the per share effect on the net
investment income and the ratios of expenses to average net assets would
have been as follows:
<TABLE>
<CAPTION>
Per Share Decreases
to Net Investment Income
------------------------------------------------------------
1999(1) 1999 1998 1997 1996 1995
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Class B $0.0 $0.01 $0.05 $0.07 $0.11 $0.11
<CAPTION>
Expense Ratios
Without Fee Waivers
and Reimbursements
-------------------------------------------------------------
1999(1) 1999 1998 1997 1996 1995
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Class B 1.47%+ 1.51% 1.63% 1.93% 2.29% 2.59%+
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Oregon Municipals Fund 23
<PAGE>
Financial Highlights (continued)
For a share of each class of beneficial interest outstanding throughout each
year ended April 30, except where noted:
<TABLE>
<CAPTION>
Class L Shares 1999(1)(2) 1999(2)(3) 1998 1997 1996(4)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.86 $10.76 $10.27 $10.26 $10.28
- ----------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(5) 0.22 0.43 0.47 0.47 0.45
Net realized and unrealized gain (loss) (0.79) 0.20 0.48 0.17 0.06
- ----------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations (0.57) 0.63 0.95 0.64 0.51
- ----------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.22) (0.44) (0.46) (0.48) (0.47)
Net realized gains -- (0.09) -- (0.13) (0.06)
In excess of net realized gains -- -- -- (0.02) --
- ----------------------------------------------------------------------------------------------------------------
Total Distributions (0.22) (0.53) (0.46) (0.63) (0.53)
- ----------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.07 $10.86 $10.76 $10.27 $10.26
- ----------------------------------------------------------------------------------------------------------------
Total Return (5.34)%++ 5.90% 9.38% 6.43% 4.99%++
- ----------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $3,651 $3,157 $2,110 $913 $614
- ----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(5) 1.36%+ 1.43% 1.21% 1.21% 1.25%+
Net investment income 4.22+ 3.94 4.39 4.66 4.80+
- ----------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 31% 28% 49% 37% 75%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the six months ended October 31, 1999 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L shares.
(4) For the period from May 16, 1995 (inception date) to April 30, 1996.
(5) The investment adviser and administrator waived all or part of their fees
for the six months ended October 31, 1999 and the years ended April 30,
1999, 1998, 1997 and the period ended April 30, 1996. In addition, the
investment adviser has reimbursed the Fund for $53,166 and $85,446 in
expenses for the year ended April 30, 1997 and the period ended April 30,
1996, respectively. If such fees were not waived and expenses were not
reimbursed, the per share effect on the net investment income and the
ratios of expenses to average net assets would have been as follows:
<TABLE>
<CAPTION>
Per Share Decreases
to Net Investment Income
--------------------------------------------------
1999(1) 1999 1998 1997 1996
------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Class L $0.01 $0.01 $0.04 $0.06 $0.10
<CAPTION>
Expense Ratios
Without Fee Waivers
and Reimbursements
---------------------------------------------------
1999(1) 1999 1998 1997 1996
------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Class L 1.51%+ 1.55% 1.67% 1.96% 2.38%+
</TABLE>
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
24 1999 Semi-Annual Report to Shareholders
<PAGE>
<TABLE>
<S> <C>
Trustees Investment Adviser
Herbert Barg and Administrator
Alfred J. Bianchetti SSB Citi Fund Management LLC
Martin Brody
Dwight B. Crane Distributor
Burt N. Dorsett CFBDS, Inc.
Elliott S. Jaffe
Stephen E. Kaufman Custodian
Joseph J. McCann PNC Bank, N.A.
Heath B. McLendon, Chairman
Cornelius C. Rose, Jr. Transfer Agent
James J. Crisona, Emeritus PFPC Global Fund ServicesP.O. Box 9699
Providence, Rhode Island 02940-9699
Officers
Heath B. McLendon This report is submitted for the general
President and information of the shareholders of Smith
Chief Executive Officer Barney Oregon Municipals Fund. Itis not
authorized for distribution to
Lewis E. Daidone prospective investors unless accompanied
Senior Vice Presidentand Treasurer or preceded by a current Prospectus for
the Fund, which con tains information
Peter M. Coffey concerning the Fund's investment
Vice President policies and expenses as well as other
pertinent information. Salomon Smith
Anthony Pace Barney is a service mark of Salomon
Controller Smith Barney Inc.
Christina T. Sydor Smith Barney
Secretary Oregon Municipals Funds
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com/mutualfunds
FD0820 12/99
</TABLE>
