Greenwich Street
CALIFORNIA
MUNICIPAL FUND INC.
Quarterly Report
November 30, 1997
<PAGE>
Greenwich Street California Municipal Fund Inc.
Dear Shareholder:
We are pleased to provide the quarterly report for the Greenwich Street
California Municipal Fund Inc. ("Fund") for the three months ended November 30,
1997. Over the three-month period covered by this report, the Fund distributed
income dividends totaling $0.16 per share. The table below details the
annualized distribution rates and three-month total return based on the Fund's
November 30, 1997 net asset value ("NAV") per share and its American Stock
Exchange ("AMEX") closing price:
Price Annualized Three-Month
Per Share Distribution Rate* Total Return
--------- ------------------ ------------
$14.00 (NAV) 4.63% 3.77%
$12.75 (AMEX) 5.08% 1.25%
In comparison, the Fund's Lipper Analytical Services, Inc. ("Lipper") peer group
average posted a total return based on NAV of 2.71% for the same time period.
(Lipper is a major independent fund-tracking organization.)
Municipal Bond Market Update
The municipal bond market is in the midst of a powerful rally that began in
early spring. Yet municipal bonds have not rallied quite as much as government
bonds because this fall has seen a prolific issuance of refunding issues. All of
this simply means that municipals are very attractive on an after-tax basis
compared to government bonds at this time. We have, therefore, been fully
invested with an emphasis on high-quality issues because of the little yield
pick-up available from lower-rated issues. We tend to be value-oriented
investors and quality in our view is coming at a small premium over Baa and
lower-rated credits.
The powerful rally in municipals has created some very interesting investment
opportunities. The long maturities in our marketplace are priced almost even
with maturities that are considerably shorter. If we can maintain our coupon
income yet take much less interest rate risk, we are delighted to do so. As long
as the yield curve stays this "flat," we will continue to maintain a high grade
profile, and also to seek to lessen our interest rate volatility in today's
lower interest-rate environment. We have been waiting for this market
opportunity for a while. Consistent with one of our key investment strategies,
after large rallies,
- ----------
* This distribution assumes monthly dividends at the current rate of $0.054
per share for twelve months.
1
<PAGE>
we tend to shorten up maturities a lot; after large declines, we usually become
more aggressive.
California Economic Highlights
Throughout 1997, California's economic expansion rolled on. The cornerstone to
this expansion has been strong job growth. Over the past several years
California has been able to replace nearly all of the jobs it lost in the
recession of the early 1990's. More importantly, these job gains have occurred
over a broad range of industries that include high-tech manufacturing,
entertainment and international trade. This employment diversification should
enable the Golden State's economy to be less reliant on a narrower group of
industries, (as it was in the late 1980s), and more resilient against any
possible future economic downturns. Moreover, we believe this flexibility should
allow California to be more economically competitive both on a national and
international level throughout 1998.
Fund's Investment Strategy
During the past quarter, the Fund focused on hospital bonds (20.3%),
transportation bonds (17.0%) and water and sewer bonds (20.5%) because we
believe they offered good relative values. At the end of November, the Fund's
weighted average maturity was approximately 24 years. In addition, as of
November 30, 1997, about 88% of the Fund's holdings were rated investment grade
by either Standard & Poor's Ratings Service or Moody's Investors Services Inc.,
with approximately 39% of the Fund invested in triple-A bonds, the highest
possible rating. (Investment-grade bonds are those rated Aaa, Aa, A and Baa by
Moody's Investors Service, Inc. or AAA, AA, A and BBB by Standard & Poor's
Ratings Service, or have an equivalent rating by any nationally recognized
statistical rating organization, or determined by the manager to be of
equivalent quality.)
Municipal Bond Market Outlook
The fundamental outlook for bonds is quite good. The U.S. economy continues to
produce healthy results without fanning the flames of inflation. And while
inflation remains extremely low, with economic uncertainty prevalent in
Southeast Asia, we expect it to stay that way for the next several quarters.
Federal Reserve Board monetary policy appears to be on hold for the moment, and
tax-exempt bonds are in decent supply and are attractively priced. All of those
factors should add up to an investor-friendly climate with respect to municipal
bonds over the next quarter or two. We remain committed and conservative in our
investment strategy, but discipline will be the main determinant of your Fund's
maturity structure.
2
<PAGE>
In closing, thank you for investing in the Greenwich Street California Municipal
Fund Inc. We look forward to continuing to help you pursue your financial goals.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President
December 23, 1997
3
<PAGE>
Schedule of Investments (unaudited) November 30, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT RATINGS SECURITY VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Education -- 8.6%
California Education Facility Authority:
$ 2,100,000 A1* Loyola Marymount University, 5.750% due 10/1/24 $ 2,157,750
2,000,000 A3* Southwestern University, 6.700% due 11/1/24 2,180,000
- -------------------------------------------------------------------------------------------------------
4,337,750
- -------------------------------------------------------------------------------------------------------
General Obligation -- 3.5%
1,715,000 AAA California State GO, AMBAC-Insured, 5.000% due 10/11/18 1,665,694
100,000 A-1+ Irvine California Improvement Board Act 1915 GO,
Assessment District No. 89-10, 3.750% due 9/2/15 (a) 100,000
- -------------------------------------------------------------------------------------------------------
1,765,694
- -------------------------------------------------------------------------------------------------------
Hospitals -- 20.3%
California Health Facility Financing Authority:
1,930,000 A+ Daniel Freeman Hospital, 6.500% due 5/1/20 2,094,050
2,000,000 AA Kaiser Permanente Hospital, 5.550% due 8/15/25 1,997,500
2,000,000 AA California Statewide Community Development Authority,
COP, St. Joseph's Hospital, 6.625% due 7/1/21 (b) 2,275,000
2,000,000 AA Fresno Health Facility Revenue, Holy Cross Health
System, 5.625% due 12/1/15 2,052,500
1,705,000 A Torrence Hospital Revenue, Little Company of Mary
Hospital, 6.875% due 7/1/15 1,852,056
- -------------------------------------------------------------------------------------------------------
10,271,106
- -------------------------------------------------------------------------------------------------------
Housing -- 7.3%
1,400,000 Aa2* California HFA Home Mortgage, Series E, FHA-Insured,
6.375% due 8/1/27 (c) 1,489,250
2,000,000 AAA Santa Rosa Mortgage Revenue, Village Square
Apartments, FHA-Insured, 6.875% due 9/1/27 2,180,000
- -------------------------------------------------------------------------------------------------------
3,669,250
- -------------------------------------------------------------------------------------------------------
Miscellaneous -- 10.5%
2,000,000 AAA Los Angeles Convention and Exhibition Center Authority
Lease Revenue, MBIA-Insured, 5.375% due 8/15/18 1,997,500
1,675,000 AAA Orange County 1996 Recovery COP,
Series A, MBIA-Insured, 6.000% due 7/1/26 1,785,969
1,500,000 NR Sacramento County, CA Special Tax Refinancing,
Community Facilities District No.1, 6.300% due 9/1/21 1,530,000
- -------------------------------------------------------------------------------------------------------
5,313,469
- -------------------------------------------------------------------------------------------------------
Tax Allocation -- 12.3%
2,100,000 Baa* Hawthorne Community Redevelopment Agency,
Tax Allocation, 6.700% due 9/1/20 2,241,750
2,000,000 AAA Rancho Cucamonga Redevelopment Agency,
Tax Allocation, MBIA-Insured, 5.250% due 9/1/26 1,980,000
2,000,000 AAA San Jose Redevelopment Agency, Tax Allocation,
MBIA-Insured, 5.250% due 8/1/16 2,005,000
- -------------------------------------------------------------------------------------------------------
6,226,750
- -------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
Schedule of Investments (unaudited) (continued) November 30, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT RATINGS SECURITY VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Transportation -- 17.0%
$ 2,000,000 Baa* Foothill Eastern Transportation, California Toll Revenue,
6.000% due 1/1/34 (b) $ 2,077,500
2,000,000 AAA Los Angeles County Metropolitan Transportation Authority,
Sales Tax Allocation, MBIA-Insured, 5.625% due 7/1/18 2,050,000
20,000,000 NR San Joaquin Hills Transportation Corridor Agency,
Senior Lien Toll, zero coupon due 1/1/26 4,475,000
- -------------------------------------------------------------------------------------------------------
8,602,500
- -------------------------------------------------------------------------------------------------------
Water & Sewer -- 20.5%
1,240,000 AAA Anaheim Public Finance Authority, Water Utility,
(Lenain Filtration Project), FGIC-Insured,
5.250% due 10/1/19 1,235,350
2,000,000 AA California State Department of Water Revenue,
Series L, 5.500% due 12/1/23 2,017,500
2,140,000 AAA East Bay Mud Wastewater System, FGIC-Insured,
5.000% due 6/1/26 2,051,725
400,000 A-1+ Irvine Ranch California Water District, Refunding,
3.750% due 4/1/33 (a) 400,000
2,000,000 BBB+ Kings County Waste Management Authority, Solid
Waste Revenue, 7.200% due 10/1/14 (c) 2,192,500
1,000,000 AAA Redding Joint Powers Financing Authority, Waste Water
Revenue, FGIC-Insured, 5.500% due 12/1/18 1,012,500
1,500,000 AAA San Diego PCFA Sewer Revenue, FGIC-Insured,
5.000% due 5/15/20 1,445,625
- -------------------------------------------------------------------------------------------------------
10,355,200
- -------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $43,490,221**) $50,541,719
=======================================================================================================
</TABLE>
(a) Variable rate obligation payable at par on demand at any time on no more
than seven days notice.
(b) Security is segregated by Custodian for open market purchase commitment.
(c) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 6 and 7 for definition of ratings and certain security
descriptions.
See Notes to Financial Statements.
5
<PAGE>
Bond Ratings
All ratings are by Standard & Poor's Ratings Service ("Standard & Poor's"),
except those identified by an asterisk (*) are rated by Moody's Investors
Service, Inc. ("Moody's"). 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 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 differ 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
bonds 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 or
Moody's.
6
<PAGE>
Short-Term Security 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.
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.
Security Descriptions
AMBAC -- AMBAC Indemnity Corporation
COP -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
GO -- General Obligation
HFA -- Housing Finance Agency
MBIA -- Municipal Bond Investors Assurance Corporation
PCFA -- Pollution Control Financing Authority
7
<PAGE>
Statement of Assets and Liabilities (unaudited) November 30, 1997
ASSETS:
Investments, at value (Cost -- $43,490,221) $ 50,541,719
Cash 66,881
Interest receivable 772,785
Deferred organization costs 37,467
- --------------------------------------------------------------------------------
Total Assets 51,418,852
- --------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 95,825
Management fees payable 34,169
Accrued expenses 62,422
- --------------------------------------------------------------------------------
Total Liabilities 192,416
- --------------------------------------------------------------------------------
Total Net Assets $51,226,436
================================================================================
NET ASSETS:
Par value of capital shares $ 3,658
Capital paid in excess of par value 43,831,350
Overdistributed net investment income (34,400)
Accumulated net realized gain from security transactions 374,330
Net unrealized appreciation of investments 7,051,498
- --------------------------------------------------------------------------------
Total Net Assets
(Equivalent to $14.00 a share on 3,658,334 shares of $0.001
par value outstanding; 500,000,000 shares authorized) $51,226,436
================================================================================
See Notes to Financial Statements.
8
<PAGE>
Statement of Operations (unaudited)
For the Three Months Ended November 30, 1997
INVESTMENT INCOME:
Interest $ 689,868
- --------------------------------------------------------------------
EXPENSES:
Management fees (Note 3) 111,131
Audit and legal 12,362
Shareholder and system servicing fees 8,792
Shareholder communications 6,827
Amortization of deferred organization costs 4,977
Directors' fees 975
Pricing service fees 878
Registration fees 732
Custody 617
Other 854
- --------------------------------------------------------------------
Total Expenses 148,145
- --------------------------------------------------------------------
Net Investment Income 541,723
- --------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 4):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 1,954,440
Cost of securities sold 1,889,900
- --------------------------------------------------------------------
Net Realized Gain 64,540
- --------------------------------------------------------------------
Changes in Net Unrealized Appreciation of Investments:
Beginning of period 5,823,868
End of period 7,051,498
- --------------------------------------------------------------------
Increase in Net Unrealized Appreciation 1,227,630
- --------------------------------------------------------------------
Net Gain on Investments 1,292,170
- --------------------------------------------------------------------
Increase in Net Assets From Operations $1,833,893
====================================================================
See Notes to Financial Statements.
9
<PAGE>
Statements of Changes in Net Assets
For the Three Months Ended November 30, 1997 (unaudited) and the Year Ended
August 31, 1997
November 30 August 31
================================================================================
OPERATIONS:
Net investment income $ 541,723 $ 2,269,926
Net realized gain 64,540 602,584
Increase in net unrealized appreciation 1,227,630 2,594,889
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 1,833,893 5,467,399
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM (NOTE 2):
Net investment income (592,647) (2,304,816)
Net realized gains -- (1,207,250)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (592,647) (3,512,066)
- --------------------------------------------------------------------------------
Increase in Net Assets 1,241,246 1,955,333
NET ASSETS:
Beginning of period 49,985,190 48,029,857
- --------------------------------------------------------------------------------
End of period* $51,226,436 $49,985,190
================================================================================
* Includes undistributed (overdistributed) net
investment income of: $(34,400) $16,524
================================================================================
See Notes to Financial Statements.
10
<PAGE>
Notes to Financial Statements (unaudited)
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 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 that are based on transactions in municipal
obligations, quotations from municipal bond dealers, market transactions in
comparable securities and various relationships between securities; (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) dividends and distributions
to shareholders are recorded on the ex-dividend date; (g) 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; and (h) 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.
In addition, organization costs have been deferred and are being amortized
on a straight-line basis over a five year period, beginning at the commencement
of the Fund's operations in September 1994.
2. 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.
11
<PAGE>
Notes to Financial Statements (unaudited) (continued)
3. MANAGEMENT AGREEMENT AND AFFILIATED TRANSACTIONS
Mutual Management Corp. ("MMC"), formerly known as Smith Barney Mutual
Funds Management Inc., a subsidiary of Salomon Smith Barney Holdings Inc.
("SSBH"), acts as investment manager to the Fund. The Fund pays MMC 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.
All officers and one director of the Fund are employees of Smith Barney
Inc., another subsidiary of SSBH.
4. INVESTMENTS
For the three months ended November 30, 1997, the aggregate cost of
purchases and proceeds from sales of investments (including maturities, but
excluding short-term securities) were as follows:
================================================================================
Purchases $1,658,748
- --------------------------------------------------------------------------------
Sales 1,954,440
================================================================================
At November 30, 1997, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
================================================================================
Gross unrealized appreciation $7,051,498
Gross unrealized depreciation --
- --------------------------------------------------------------------------------
Net unrealized appreciation $7,051,498
================================================================================
5. PORTFOLIO CONCENTRATION
Since the Fund invests primarily in obligations of issuers within
California, it is subject to possible concentration risks associated with
economic, political, or legal developments or industrial or regional matters
specifically affecting California.
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
12
<PAGE>
Notes to Financial Statements (unaudited) (continued)
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.
The Fund enters into such contracts to hedge a portion of its
portfolio.The Fund bears the market risk that arises from changes in the value
of the financial instruments and securities indices (futures contracts).
At November 30, 1997, the Fund had no open futures contracts.
7. LENDING OF PORTFOLIO SECURITIES
The Fund has an agreement with its custodian whereby the custodian may
lend securities owned by the Fund to brokers, dealers and other financial
organizations. Fees earned by the Fund on securities lending are recorded as
interest income. Loans of securities by the Fund are collateralized by either
cash, U.S. government securities or high quality money market instruments that
are maintained at all times in an amount at least equal to the current market
value of the loaned securities, plus a margin depending on the type of
securities loaned. The custodian establishes and maintains the collateral in a
segregated account.
At November 30, 1997, there were no securities on loan.
13
<PAGE>
Financial Highlights
For a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
1997(1) 1997 1996 1995(2)(3)
=========================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $13.66 $13.13 $12.92 $12.00
- -----------------------------------------------------------------------------------------
Income From Operations:
Net investment income(4) 0.15 0.62 0.63 0.60
Net realized and unrealized gain 0.35 0.87 0.30 0.84
- -----------------------------------------------------------------------------------------
Total Income From Operations 0.50 1.49 0.93 1.44
- -----------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.16) (0.63) (0.70) (0.52)
Net realized gains -- (0.33) (0.02) --
- -----------------------------------------------------------------------------------------
Total Distributions (0.16) (0.96) (0.72) (0.52)
- -----------------------------------------------------------------------------------------
Net Asset Value, End of Period $14.00 $13.66 $13.13 $12.92
- -----------------------------------------------------------------------------------------
Total Return, Based on Market Value 1.25%++ 13.39% 11.92% 0.25%++
- -----------------------------------------------------------------------------------------
Total Return, Based on Net Asset Value* 3.77%++ 12.19% 7.96% 12.24%++
- -----------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $51,226 $49,985 $48,030 $47,250
- -----------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses(4) 1.17%+ 1.21% 1.15% 1.02%+
Net investment income 4.28+ 4.64 4.75 5.16+
- -----------------------------------------------------------------------------------------
Portfolio Turnover Rate 3% 28% 42% 7%
- -----------------------------------------------------------------------------------------
Market Value, End of Period $12.750 $12.750 $12.125 $11.500
=========================================================================================
</TABLE>
(1) For the three months ended November 30, 1997 (unaudited).
(2) Based on the weighted average shares outstanding for the period.
(3) For the period from September 23, 1994 (commencement of operations) to
August 31, 1995.
(4) The Manager has waived a portion of its management fees for the period
ended August 31, 1995. If such fees were not waived, the per share
decrease on net investment income would have been $0.01 and the expense
ratio would have been 1.14%, annualized.
* The total return is based on the Fund's net asset value at the beginning
and end of the period rather than the market value. Dividends are
reinvested in accordance with the Fund's dividend reinvestment plan.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
14
<PAGE>
Financial Data (unaudited)
For a share of capital stock outstanding throughout each period:
AMEX
Record Payable Closing Net Asset Income Reinvestment
Date Date Price+ Value+ Declared Price
================================================================================
12/14/94 12/20/94 $10.875 $11.48 $0.05800 $10.27
1/17/95 1/24/95 11.125 11.78 0.05800 11.27
2/14/95 2/21/95 11.625 12.46 0.05800 11.77
3/14/95 3/21/95 11.625 12.71 0.05800 11.77
4/11/95 4/18/95 11.500 12.92 0.05800 11.65
5/16/95 5/23/95 11.750 13.03 0.05800 11.77
6/20/95 6/23/95 11.750 13.08 0.05800 12.02
7/25/95 7/28/95 11.750 12.81 0.05800 11.95
8/22/95 8/25/95 11.625 12.70 0.05800 11.65
9/26/95 9/29/95 11.500 12.99 0.05800 11.65
10/24/95 10/27/95 11.625 13.27 0.05800 11.77
11/20/95 11/24/95 11.875 13.48 0.05800 12.02
12/26/95 12/29/95 12.000 13.80 0.05800 12.02
12/26/95* 12/29/95 12.000 13.80 0.02365 12.02
1/23/96 1/26/96 12.063 13.75 0.05800 12.14
2/20/96 2/23/96 11.938 13.78 0.05800 12.05
3/26/96 3/29/96 11.750 13.27 0.05800 12.05
4/23/96 4/26/96 12.000 13.10 0.05800 12.10
5/28/96 5/31/96 12.000 13.19 0.05800 12.03
6/25/96 6/28/96 12.000 12.96 0.05800 12.09
7/23/96 7/26/96 12.375 13.14 0.05800 12.41
8/27/95 8/30/96 12.125 13.27 0.05800 12.14
9/24/96 9/27/96 11.875 13.25 0.05800 12.01
10/22/96 10/25/96 12.000 13.43 0.05800 12.14
11/25/96 11/29/96 12.500 13.73 0.05800 12.76
12/03/96* 12/13/96 12.375 13.49 0.33000 12.76
1/28/97 1/31/97 12.563 13.12 0.05800 12.75
2/25/97 2/28/97 12.500 13.42 0.05800 12.64
3/24/97 3/27/97 12.375 13.02 0.05800 12.50
4/22/97 4/25/97 12.500 12.91 0.05800 12.61
5/27/97 5/30/97 12.563 13.17 0.05800 12.72
6/24/97 6/27/97 12.750 13.48 0.05800 12.86
7/22/97 7/25/97 12.688 13.79 0.05400 12.82
8/26/97 8/29/97 12.688 13.62 0.05400 12.89
9/23/97 9/26/97 12.625 13.95 0.05400 13.03
10/28/97 10/31/97 12.688 13.97 0.05400 12.90
11/24/97 11/28/97 12.688 14.00 0.05400 13.08
================================================================================
+ Effective October 24, 1995, the Fund changed its valuation date from
payable date to record date. For the period from December 14, 1994 through
September 26, 1995, the AMEX closing price and net asset value are as of
payable date.
* Capital gain distribution.
15
<PAGE>
Dividend Reinvestment Plan (unaudited)
Under the Fund's Dividend Reinvestment Plan ("Plan"), a shareholder whose
shares of Common Stock are registered in his own name will have all
distributions from the Fund reinvested automatically by First Data Investor
Services Group, Inc. ("First Data") as agent under the Plan, unless the
shareholder elects to receive cash.
Distributions with respect to shares registered in the name of a
broker-dealer or other nominee (i.e., in "Street Name") will be reinvested by
the broker or nominee in additional shares under the Plan, unless the service is
not provided by the broker or nominee or the shareholder elects to receive
distributions in cash. Investors who own Common Stock registered in Street Name
should consult their broker-dealers for details regarding reinvestment. All
distributions to shareholders who do not participate in the Plan will be paid by
check, mailed directly to the record holder by or under the direction of First
Data as dividend paying agent.
The number of shares of Common Stock distributed to participants in the
Plan in lieu of a cash dividend is determined in the following manner. When the
market price of the Common Stock is equal or exceeds the net asset value per
share of the Common Stock on the date of valuation. Plan participants will be
issued shares of Common Stock at a price equal to the greater of (1) net asset
value most recently determined or (2) 95% of the market price of the Common
Stock.
If the market price of the Common Stock is less than the net asset value
of the Common Stock at the time of valuation , or if the Fund declares a
dividend or capital gains distribution payable only in cash, First Data will buy
Common Stock in the open market, on the American Stock Exchange or elsewhere,
for the participants' accounts. If following the commencement of purchases and
before First Data has completed its purchases, the market price exceeds the net
asset value of the Common Stock, First Data will attempt to terminate purchases
in the open market and cause the Fund to issue the remaining portion of the
dividend or distribution in shares at a price equal to the greater of (a) net
asset value or (b) 95% of the then current market price. In this case, the
number of shares received by a Plan participant will be based on the weighted
average of prices paid for shares purchased in the open market and the price at
which the Fund issues the remaining shares. To the extent First Data is unable
to stop open market purchases and cause the Fund to issue the remaining shares,
the average per share purchase price paid by First Data may exceed the net asset
value of the Common Stock, resulting in the acquisition of fewer shares than if
the dividend or capital gains distribution had been paid in Common Stock
16
<PAGE>
Dividend Reinvestment Plan (unaudited) (continued)
issued by the Fund at net asset value. First Data will begin to purchase Common
Stock on the open market as soon as practicable after the payment date of the
dividend and capital gains distribution, but in no event shall such purchases
continue later than 30 days after that date, except when necessary to comply
with applicable provisions of the federal securities laws.
First Data maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in each account, including information
needed by a shareholder for personal and tax records. The automatic reinvestment
of dividends and capital gains distributions will not relieve Plan participants
of any income tax that may be payable on the dividends or capital gains
distributions. Common Stock in the account of each Plan participant will be held
by First Data in uncertificated form in the name of the Plan participant.
Plan participants are subject to no charge for reinvesting dividends and
capital gains distributions under the Plan. First Data's fees for handling the
reinvestment of dividends and capital gains distributions will be paid by the
Fund. No brokerage charges apply with respect to shares of Common Stock issued
directly by the Fund under the Plan. Each Plan participant will, however, bear a
proportionate share of brokerage commissions incurred with respect to any open
market purchases made under the Plan.
Experience under the Plan may indicate that changes to it are desirable.
The Fund reserves the right to amend or terminate the Plan as applied to any
dividend or capital gains distribution paid subsequent to written notice of the
change sent to participants at least 30 days before the record date for the
dividend or capital gains distribution. The Plan may also be amended or
terminated by First Data, with the Fund's prior written consent, on at least 30
days' written notice to Plan participants. All correspondence concerning the
Plan should be directed by mail to First Data Investor Services Group, Inc. P.O.
Box 1376, Boston, Massachusetts 02104 or by telephone at 1-800-331-1710.
Additional Shareholder Information (unaudited)
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that from time to time the Fund may purchase
shares of its common stock in the open market.
17
<PAGE>
Greenwich Street
CALIFORNIA
MUNICIPAL FUND INC.
DIRECTORS
Joseph H. Fleiss
Donald R. Foley
Paul Hardin
Heath B. McLendon, Chairman
Roderick C. Rasmussen
John P. Toolan
C. Richard Youngdahl, Emeritus
OFFICERS
Heath B. McLendon
President and Chief Executive Officer
Lewis E. Daidone
Senior Vice President and Treasurer
Joseph P. Deane
Vice President and Investment Officer
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
INVESTMENT MANAGER
Mutual Management Corp.
CUSTODIAN
PNC Bank, N.A.
SHAREHOLDER
SERVICING AGENT
First Data Investor 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
FD01057 1/98
