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ANNUAL REPORT
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1995
1995
1995
1995
1995
Greenwich Street
California
Municipal
Fund Inc.
-------------------------------------------------
August 31, 1995
[Logo] Smith Barney Mutual Funds
Investing for your future.
Every day.
<PAGE>
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Greenwich Street California Municipal Fund Inc.
- -----------------------------------------------
Dear Shareholder:
We are pleased to provide the annual report for Greenwich Street California
Municipal Fund for the year ended August 31, 1995. During the past quarter the
Fund distributed dividends totaling $0.174 per share. The table below shows
the
annualized distribution rate based on the Fund's August 31, 1995
American Stock
Exchange closing price:
Annualized
Distribution Rate
-----------------
$12.92 (NAV) 5.39%
$11.50 (AMEX) 6.05%
The Fund's total return for the past three months was -0.72%. For the period
since inception on September 23, 1994 to August 31, 1995, the total return was
12.24%. In comparison, the average total return for all 61 closed-end
municipal
funds was 0.72% for the three months ended August 31, 1995, as reported by
Lipper Analytical Services Inc.
From the time of the Fund's inception in September 1994 through November 1994,
the rising interest-rate environment created a market where yields were
attractive with many issues selling below par. This gave us the opportunity to
position a large percentage of the Fund's portfolio in high-grade, fairly
deep-discount bonds -- and prepared the Fund to take advantage of the
bond-market rally in 1995. After a series of interest-rate hikes orchestrated by
the Federal Reserve Board over a 13-month period which began in February 1994,
the economy has now eased back to a moderate growth rate.
In our view, inflation
is now very much under control. These conditions provide a benign market for
bonds, which we believe will continue for the balance of 1995.
The high-quality discount-bond approach put the Fund in an excellent position
for the rally that we have experienced, and should continue to serve the Fund
well. However, if bond yields ever approach the level seen in the peak of the
rally in late 1993, we will become more defensive with bigger coupons and
shorter maturities.
We have not altered our strategy to any degree because the economic climate is
quite favorable for the fixed-income markets. We believe, however, that bond
prices will not rise much further from today's levels. In our opinion, if the
economic growth remains slow and inflation under control then
municipals should
stay comfortably in their current price range for the remainder of 1995.
The California picture, which has been muddled because of the bankruptcy in
Orange County and financial troubles in Los Angeles county, seems closer to a
permanent solution. Bills are currently pending in the state legislature which
would create long-term solutions for both municipalities. Assuming that they
pass, these bills would remove a cloud that has hung over
California securities
1
<PAGE>
for most of this year. They would also provide a lift for the market's
perception of all California credits, as well as municipal bonds in general.
Thank you for your confidence in our investment management. If you have any
questions about the Fund, please call The Shareholder Services Group at (800)
331-1710.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman and Chief Executive Officer Vice President
September 22, 1995
2
<PAGE>
<TABLE>
<CAPTION>
Greenwich Street California Municipal Fund Inc.
- ---------------------------------------------------------------------------------------------
Schedule of Investments August 31, 1995
- ---------------------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
=============================================================================================
<C> <C> <S> <C>
Education -- 13.4%
$2,100,000 A1* California Education Facility Authority
(Loyola Marymount University), 5.750% due 10/1/24 $2,010,750
2,000,000 A* California Education Facility Authority
(Southwestern University), 6.700% due 11/1/24 2,080,000
2,330,000 A University of California Revenue Series A, 5.800%
due 9/1/23 2,134,862
- ---------------------------------------------------------------------------------------------
6,225,612
- ---------------------------------------------------------------------------------------------
Hospital -- 16.4%
2,000,000 Aa* California Health Facility Financing Authority
(Kaiser Permanente Hospital), 5.550% due 8/15/25 1,802,500
2,000,000 AA California Statewide Community Development Authority
COP (St. Joseph's Hospital), 6.625% due 7/1/21 2,090,000
2,000,000 AA- Fresno Health Facility Revenue (Holy Cross Health
System), 5.625% due 12/1/15 1,882,500
1,785,000 A Torrence Hospital Revenue (Little Company of
Mary Hospital), 6.875% due 7/1/15 1,849,706
- ---------------------------------------------------------------------------------------------
7,624,706
- ---------------------------------------------------------------------------------------------
Housing -- 7.0%
1,305,000 Aa* California Housing Finance Agency Home Mortgage
Series B, 5.700% due 2/1/25 1,212,019
2,000,000 AAA Santa Rosa Mortgage Revenue (Village Square
Apartments) FHA-Insured, 6.875% due 9/1/27 2,052,500
- ---------------------------------------------------------------------------------------------
3,264,519
- ---------------------------------------------------------------------------------------------
Miscellaneous -- 32.9%
2,000,000 AAA Concord Redevelopment Agency Tax Allocation
AMBAC-Insured, 5.250% due 7/1/19 1,805,000
2,100,000 Baa* Hawthorne Community Redevelopment Agency
Tax Allocation, 6.700% due 9/1/20 2,110,500
2,000,000 NR Kings County Waste Management Authority
Solid Waste Revenue, 7.200% due 10/1/14(a) 2,092,500
2,000,000 AAA Los Angeles Convention and Exhibition Center Authority
Lease Revenue MBIA-Insured, 5.375% due 8/15/18 1,850,000
2,000,000 AAA Oceanside Civic Center Project MBIA-Insured,
5.750% due 8/1/15 1,947,500
2,000,000 AAA Orange County Redevelopment Agency Tax Allocation
Revenue (Southwest Redevelopment Project)
AMBAC-Insured, 5.700% due 10/1/23 1,847,500
2,000,000 AAA Rancho Cucamonga Redevelopment Agency Tax
Allocation MBIA-Insured, 5.500% due 9/1/23 1,857,500
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
Greenwich Street California Municipal Fund Inc.
- ---------------------------------------------------------------------------------------------
Schedule of Investments (continued) August 31, 1995
- ---------------------------------------------------------------------------------------------
FACE
AMOUNT RATING SECURITY VALUE
=============================================================================================
<C> <C> <S> <C>
Miscellaneous -- 32.9% (continued)
$2,000,000 AAA San Jose Redevelopment Agency Tax Allocation
MBIA-Insured, 5.250% due 8/1/16 $ 1,827,500
- ---------------------------------------------------------------------------------------------
15,338,000
- ---------------------------------------------------------------------------------------------
Short-Term Investments(b) -- 0.9%
California Pollution Control Finance
Authority Resource Recovery:
100,000 VMIG 1* (Burney Forest Project) 3.55% 100,000
200,000 VMIG 1* (Malago Project) 3.95% 200,000
100,000 VMIG 1* (Rocklin Project) 3.65% 100,000
- ---------------------------------------------------------------------------------------------
400,000
- ---------------------------------------------------------------------------------------------
Transportation -- 9.4%
2,000,000 AAA Los Angeles County Metropolitan Transportation
Authority Sales Tax Allocation MBIA-Insured,
5.625% due 7/1/18 1,912,500
20,000,000 NR San Joaquin Hills, Transportation Corridor Agency
Senior Lien Toll, zero coupon due 1/1/26 2,450,000
- ---------------------------------------------------------------------------------------------
4,362,500
- ---------------------------------------------------------------------------------------------
Water & Sewer -- 20.0%
1,240,000 AAA Anaheim Public Finance Authority Water Utility
(Lenain Filtration Project) FGIC-Insured, 5.250%
due 10/1/19 1,103,600
2,000,000 AA California State Department of Water Revenue
Series L, 5.500% due 12/1/23 1,845,000
1,825,000 AA Los Angeles Department of Water & Power Electricity,
6.125% due 1/15/33 1,822,719
2,000,000 AAA Los Angeles Waste Water System Revenue Refunding
FGIC-Insured, 5.200% due 11/1/21 1,782,500
1,000,000 AAA Redding JT Powers Finance Authority Waste Water
Revenue FGIC-Insured, 5.500% due 12/1/18 940,000
2,000,000 AAA San Diego Sewer Revenue Series A AMBAC-Insured,
5.250% due 5/15/20 1,800,000
- ---------------------------------------------------------------------------------------------
9,293,819
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $43,459,643*) $46,509,156
=============================================================================================
</TABLE>
(a) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(b) 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 page 5 for the definition of ratings and certain security descriptions.
See Notes to Financial Statements.
4
<PAGE>
Greenwich Street California Municipal Fund Inc.
- --------------------------------------------------------------------------------
Ratings and Security Descriptions
- --------------------------------------------------------------------------------
BOND RATINGS
All ratings are by Standard & Poor's Corporation, except that those identified
by an asterisk (*) are rated by Moody's Investors Services. The definitions of
the applicable rating symbols are set forth below:
Standard & Poor's -- Ratings from "AA" to "BBB" may be modified by the addition
of a plus (+) or a minus (-) sign to show relative standings within the major
rating categories.
AAA -- 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 bonds in this category than in
higher rated categories.
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 rating
within its generic category.
Aaa -- Bonds that are 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 that are 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 as 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 that are 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 that are 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 Corporation
or Moody's Investors Services.
SHORT - TERM SECURITIES RATINGS
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.
VMIG 1 -- Moody's highest rating for issues having demand feature --
variable-rate demand obligation (VRDO).
SECURITY DESCRIPTIONS
AMBAC -- American Municipal Bond Assurance Corporation
CGIC -- Capital Guaranty Insurance Company
COP -- Certificate of Participation
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
FSA -- Financial Security Assurance
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
IDA -- Industrial Development Agency
IDR -- Industrial Development Revenue
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
PCFA -- Pollution Control Financing Authority
PCR -- Pollution Control Revenue
PSF -- Permanent School Fund
RIBS -- Residual Interest Bonds
5
<PAGE>
Greenwich Street California Municipal Fund Inc.
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities August 31, 1995
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost--$43,459,643) $46,509,156
Cash 59,821
Interest receivable 767,759
Deferred organization costs 83,321
- --------------------------------------------------------------------------------
Total Assets 47,420,057
- --------------------------------------------------------------------------------
LIABILITIES:
Management fees payable 35,338
Accrued expenses and other liabilities 134,874
- --------------------------------------------------------------------------------
Total Liabilities 170,212
- --------------------------------------------------------------------------------
Total Net Assets $47,249,845
================================================================================
NET ASSETS:
Par value of capital shares $ 3,658
Capital paid in excess of par value 43,831,350
Undistributed net investment income 278,796
Net realized gain on security transactions 86,528
Net unrealized appreciation of investments 3,049,513
- --------------------------------------------------------------------------------
Total Net Assets
(Equivalent to $12.92 a share on 3,658,334 shares of $0.001
par value outstanding; 500,000,000 shares authorized) $47,249,845
================================================================================
See Notes to Financial Statements.
6
<PAGE>
Greenwich Street California Municipal Fund Inc.
- --------------------------------------------------------------------------------
Statement of Operations For the Period Ended August 31, 1995(a)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $2,618,971
- --------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 381,704
Shareholder and system servicing fees 26,000
Amortization of organization costs 18,733
Directors' fees 15,000
Audit and legal 15,000
Shareholder communications 13,000
Insurance 3,000
Custody 3,000
Pricing service 911
Other 8,089
- --------------------------------------------------------------------------------
Total Expenses 484,437
Less: Fee waiver (Note 2) 53,912
- --------------------------------------------------------------------------------
Net Expenses 430,525
- --------------------------------------------------------------------------------
Net Investment Income 2,188,446
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 3,026,217
Cost of securities sold 2,939,689
- --------------------------------------------------------------------------------
Net Realized Gain 86,528
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments:
Beginning of period --
End of period 3,049,513
- --------------------------------------------------------------------------------
Increase In Net Unrealized Appreciation 3,049,513
- --------------------------------------------------------------------------------
Net Gain on Investments 3,136,041
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $5,324,487
================================================================================
(a) For the period from September 23, 1994 (commencement of operations) to
August 31, 1995.
See Notes to Financial Statements.
7
<PAGE>
Greenwich Street California Municipal Fund Inc.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Period Ended August 31, 1995(a)
OPERATIONS:
Net investment income $ 2,188,446
Net realized gain 86,528
Increase in net unrealized appreciation 3,049,513
- --------------------------------------------------------------------------------
Increase In Net Assets From Operations 5,324,487
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,909,650)
- --------------------------------------------------------------------------------
Decrease In Net Assets From Distributions To Shareholders 1,909,650
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS FROM:
Net proceeds from sale of 3,658,334 shares (less offering
expenses of $65,000) 43,835,008
- --------------------------------------------------------------------------------
Increase In Net Assets From Fund Share Transactions 43,835,008
- --------------------------------------------------------------------------------
Increase In Net Assets 47,249,845
NET ASSETS
Beginning of period --
- --------------------------------------------------------------------------------
End of period* $ 47,249,845
================================================================================
* Includes undistributed net investment income of: $ 278,796
================================================================================
(a) For the period from September 23, 1994 (commencement of operations) to
August 31, 1995.
See Notes to Financial Statements.
8
<PAGE>
Greenwich Street California Municipal Fund Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Greenwich Street California Municipal Fund Inc. ("Fund"), a Maryland
corporation, is registered under the Investment Company Act of 1940, as amended,
as a non-diversified, closed-end management investment company. The Fund
commenced operations on September 23, 1994 after completion of the initial
public offering of 3,625,000 shares of its common stock and the issuance of
8,334 shares to related parties at $12.00 per share. The underwriters' option
for the purchase of 25,000 additional shares was exercised on November 22, 1994.
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 bid and ask prices provided by an independent pricing
service that are based on transactions in municipal obligations, quotations from
municipal bond dealers, market transactions in comparable securities and various
relationships between securities; (c) short-term securities maturing within 60
days are valued at cost plus accreted discount, or minus amortized premium, as
applicable; (d) gains or losses on the sale of securities are calculated by
using the specific identification method; (e) interest income, adjusted for
amortization of premiums and accretion of original issue discounts, is recorded
on the accrual basis; and (f) the Fund intends to comply with the applicable
provisions of the Internal Revenue Code of 1986, as amended, pertaining to
regulated investment companies and make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes.
In addition, organization and initial offering expenses have been deferred
and are being amortized on a straight-line method over a five year period,
beginning with the commencement of the Fund's operations in September, 1994.
2. MANAGEMENT AGREEMENT AND TRANSACTIONS WITH AFFILIATED PERSONS
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc., through its Greenwich Street Advisors division ("GSA"),
acts as investment manager to the Fund. As compensation for GSA's services, the
Fund pays SBMFM a fee calculated at an annual rate of 0.90% of the Fund's
average daily net assets; this fee is calculated daily and paid monthly.
SBMFM waived $53,912 of its management fees for the period ended August 31,
1995.
All officers and two directors of the Fund are employees of Smith Barney.
3. INVESTMENT TRANSACTIONS
For the period ended August 31, 1995 the total aggregate cost of purchases
and proceeds from sales of investments (excluding short-term investments) were
$45,846,149 and $3,026,217, respectively. At August 31, 1995, aggregate net
unrealized appreciation for all securities in which there is an excess of market
value over tax cost amounted to $3,049,513.
9
<PAGE>
Greenwich Street California Municipal Fund Inc.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout the period:
1995(a)(b)
================================================================================
Net Asset Value, Beginning of Period $12.00
- --------------------------------------------------------------------------------
Income From Investment Operations:
Net investment income* 0.60
Net realized and unrealized gain on investments 0.84
- --------------------------------------------------------------------------------
Total Income from Investment Operations 1.44
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.52)
- --------------------------------------------------------------------------------
Total Distributions (0.52)
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $12.92
- --------------------------------------------------------------------------------
Total Return 12.24%++
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $47,250
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses* 1.02%+
Net investment income 5.16+
Portfolio Turnover Rate 7.32%
- --------------------------------------------------------------------------------
Market Price at End of Period $11.50
================================================================================
(a) Based on the weighted average shares outstanding for the period.
(b) For the period from September 23, 1994 (commencement of operations) to
August 31, 1995.
++ Total return is not annualized as it may not be representative of the total
return for that period.
+ Annualized.
* The Manager has waived a portion of its management fees for the period from
September 23, 1994 to August 31, 1995. If such fees were not waived, the
per share decrease in net investment income would have been $0.01, and the
ratio of expenses to average net assets would have been 1.14%, annualized.
- --------------------------------------------------------------------------------
Financial Data (unaudited)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout the period:
AMEX Net Asset Income Reinvestment
Period Closing Price Value Declared Price
================================================================================
December 27, 1994 $10.875 $11.48 $0.058 $10.27
January 24, 1995 11.125 11.75 0.058 11.27
February 21, 1995 11.625 12.46 0.058 11.77
March 21, 1995 11.625 12.71 0.058 11.77
April 25, 1995 11.500 12.87 0.058 11.65
May 23, 1995 11.750 13.03 0.058 11.77
June 23, 1995 11.750 12.81 0.058 12.02
July 28, 1995 11.750 13.08 0.058 11.95
August 25, 1995 11.625 12.70 0.058 11.65
================================================================================
10
<PAGE>
Greenwich Street California Municipal Fund Inc.
- --------------------------------------------------------------------------------
Dividend Reinvestment Plan
- --------------------------------------------------------------------------------
Pursuant to the Fund's Dividend Reinvestment Plan ("Plan"), all distributions
are automatically reinvested by The Shareholder Services Group, Inc., as plan
agent ("Plan Agent"), in additional shares of its Common Stock ("Common Shares")
as provided below unless a shareholder elects to receive cash.
Distributions with respect to Common Shares registered in the name of a
broker-dealer or other nominee (i.e., in "street name") are reinvested by the
broker or nominee in additional Common Shares under the Plan, unless the service
is not provided by the broker or nominee. Investors who own Common Shares
registered in street name should consult their broker-dealer for details. All
distributions to shareholders who do not participate in the Plan are paid by
check, mailed directly to the record holder by the Plan Agent.
If the Fund declares a distribution payable either in Common Shares or in cash,
nonparticipants in the Plan receive cash, and Plan participants receive the
equivalent in Common Shares valued in the following manner: whenever the market
price is equal to or exceeds the net asset value per share at the time Common
Shares are valued for the purpose of determining the number of Common Shares
equivalent to the cash distribution, participants are issued Common Shares
valued at the greater of (1) the net asset value most recently determined or (2)
95% of the then current market price of the Common Shares.
If the net asset value of the Common Shares at the time of valuation exceeds the
market price of the Common Shares, or if the Fund declares a distribution
payable only in cash, the Plan Agent buys Common Shares in the open market, on
the American Stock Exchange or elsewhere, for the participants' accounts.
(Effective October 1, 1995, the plan's valuation date will change to the record
date from the payable date.) If, following the commencement of purchases and
before the Plan Agent has completed its purchases the market price exceeds the
net asset value of the Common Shares, the average per Common Share purchase
price paid by the Plan Agent may exceed the net asset value of the Common
Shares, resulting in the acquisition of fewer Common Shares than if the
distribution had been paid in Common Shares issued by the Fund at net asset
value. The Plan Agent applies all cash received as a distribution to purchase
Common Shares on the open market as soon as practicable after the payment date
of the distribution, but in no event later than 30 days after such date, except
when necessary to comply with applicable provisions of the Federal securities
laws.
11
<PAGE>
Greenwich Street California Municipal Fund Inc.
- --------------------------------------------------------------------------------
Dividend Reinvestment Plan (continued)
- --------------------------------------------------------------------------------
Participants in the Plan may withdraw from the Plan upon written notice to the
Plan Agent which must be received at least ten business days prior to the
distribution record date to become effective for that distribution. Shares in
the account of each Plan participant are held by the Plan Agent in
non-certificated form in the name of the Plan Agent or participant. When a
participant withdraws from the Plan or upon termination of the Plan as provided
below, certificates for whole Fund shares credited to his or her account under
the Plan are issued and a cash payment is made for any fraction of a Fund share
credited to such account.
The automatic reinvestment of distributions does not relieve participants of any
Federal income tax that may be payable on such distributions.
The Fund does not charge participants for reinvesting distributions. Any Plan
Agent's fees for the handling of reinvestment of distributions under the Plan
are paid by the Fund. There are no brokerage charges with respect to Common
Shares issued directly by the Fund as a result of distributions payable either
in stock or in cash. However, each participant pays a pro-rata share of
brokerage commissions incurred with respect to the Plan Agent's open market
purchases in connection with the reinvestment of distributions.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund and the Plan Agent reserve the right to amend the plan as applied to
any distribution paid subsequent to written notice of the change sent to all
shareholders of the Fund at least 90 days before the record date for the
distribution. The Plan also may be terminated by the Fund or the Plan Agent by
at least 30 days' written notice to all shareholders of the Fund. All
correspondence concerning the Plan should be directed to the Plan Agent at The
Shareholders Services Group, Inc., P.O. Box 1376, Boston, Massachusetts 02104.
12
<PAGE>
Greenwich Street California Municipal Fund Inc.
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
Greenwich Street California Municipal Fund Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Greenwich Street California Municipal
Fund Inc. as of August 31, 1995, and the related statement of operations,
statement of changes in net assets, and financial highlights for the period from
September 23, 1994 (commencement of operations)to August 31, 1995. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Greenwich Street California
Municipal Fund Inc. as of August 31, 1995, and the results of its operations,
changes in its net assets and financial highlights for the period from September
23, 1994 (commencement of operations) to August 31, 1995, in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
New York, New York
October 11, 1995
13
<PAGE>
Greenwich Street SMITH BARNEY
California ------------
Municipal Fund Inc. A Member of Travelers Group [Logo]
Directors
Jessica M. Bibliowicz
Ralph D. Creasman
Joseph H. Fleiss
Donald R. Foley
Paul Hardin
Francis P. Martin, M.D.
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
C. Richard Youngdahl
Officers
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
Lewis E. Daidone
Senior Vice President and Treasurer
Joseph P. Deane
Vice President
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
Investment Manager
Smith Barney Mutual
Funds Management Inc.
Distributor
Smith Barney Inc.
Custodian
PNC Bank
Shareholder Servicing Agent
The Shareholder Services Group, Inc.
P.O. Box 1376
Boston, MA 02104
This report is submitted for the general information of the shareholders of
Greenwich Street California Municipal Fund Inc. It is not authorized for
distribution to prospective investors unless accompanied or preceded by a
current Prospectus for the Fund, which contains information concerning the
Fund's investment policies and expenses as well as other pertinent information.
Greenwich Street
California Municipal
Fund Inc.
388 Greenwich Street
New York, New York 10013
FD01037 10/95
