<PAGE>
Smith Barney
Institutional Cash
Management
Fund, Inc.
ANNUAL REPORT
May 31, 1999
Smith Barney Mutual Funds
<PAGE>
Smith Barney
Institutional Cash
Management
Fund, Inc.
[PHOTO OMITTED]
Heath B. McLendon
Chairman
[PHOTO OMITTED]
Phyllis Zahorodny
Vice President and Investment Officer
[PHOTO OMITTED]
Joseph Benevento
Vice President and Investment Officer
[PHOTO OMITTED]
Joseph P. Deane
Vice President and Investment Officer
Dear Shareholder:
We are pleased to present the annual report for Smith Barney Institutional Cash
Management Fund, Inc. ("Fund") for the fiscal year ended May 31, 1999. We hope
you find this report to be useful and informative. For your convenience, we have
summarized the period's prevailing economic and market conditions below. In
addition, a more detailed summary of performance and current holdings can be
found in the appropriate sections that follow.
Performance Summary
The chart below provides the yields for the Cash, Government and Municipal
Portfolios ("Portfolio(s)") that make up the Fund for the year ended May 31,
1999.
Smith Barney Institutional Cash Management
Fund Yields (Class A Shares)
Portfolio Seven-Day Current Yield 30-Day Yield
- ----------------------------------------------------------------------------
Cash 4.71% 4.71%
Government 4.59% 4.58%
Municipal 3.07% 3.24%
Please note that an investment in the Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
the Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 1
<PAGE>
Cash and Government Portfolio Updates and Strategies
During the last quarter of 1998, the Federal Reserve Board ("Fed") was easing
its monetary policy to accommodate the world capital markets' reaction to the
Asian crisis. The 75 basis point decline in interest rates further fueled an
already strong U.S. economy. Moreover, lower interest rates brought domestic
home sales to record levels, and helped propel consumer demand and the stock
market higher.
The U.S. is now in its ninth year of economic expansion and the annual growth
rate is roughly 4%. Factors that were weakening economic growth such as the
crisis in Asia, a depressed U.S. manufacturing industry and falling commodity
prices have reversed. This has led the Fed to change its monetary stance to a
tightening bias. The capital markets now anticipate that the Federal Open Market
Committee will raise interest rates by 25 basis points in the near future*. As a
result, the short-term yield curve has steepened by about 40 basis points in one
year CDs from 5.00% in November 1998 to 5.40% as of the end of May 1999.
Throughout most of 1999 and in anticipation of higher rates, we continued to
shorten our average maturity from 71 days to 53 days in the Institutional Cash
Portfolio. The Institutional Cash Portfolio was 39.4% in domestic paper, 2.3% in
a government agency, 56% in foreign paper and 2.3% in a repurchase ageement at
the close of the reporting period. The average maturity for the Institutional
Government Portfolio was also reduced from 40 days to 25 days. At the end of May
1999, the Institutional Government Portfolio was 94% in government agencies and
6% in repurchase agreements.
Municipal Portfolio Update and Strategy
Over the past year, two factors have set the stage for decreased supply in the
municipal money market. Strong state fiscal positions, as a result of increased
income tax collections, have brought added liquidity to state and local
government general funds, which in turn has decreased the need for short-term
municipal note issuance. In the variable rate demand obligation ("VRDO") market,
decreasing supply has been the result of issuers extending out to the longer end
of the municipal bond yield curve in order to lock in historically low borrowing
rates. (VRDOs are demand instruments that usually have an indicated maturity of
more than one year, but contain a demand feature that enables the holder to
redeem the investment on no more than 30 days notice. These instruments provide
for automatic adjustment of new rates on set dates and are generally supported
by letters of credit issued by domestic or foreign banks.)
As a result of decreased supply coupled with strong demand from municipal money
market funds, we have seen rates historically rich compared to our taxable
counterparts. For most state and local governments, June signals the end of the
current fiscal year and the pricing of a large portion of their annual note
financings. With strong state finances we do not anticipate seeing an increase
in
- ----------
* As anticipated, on June 30, 1999, the Fed raised short-term interest rates
by 25 basis points.
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2 1999 Annual Report to Shareholders
<PAGE>
annual cash flow borrowing, although we do expect an increase in state
infrastructure financing projects in the form of bond anticipation notes that
could help to ease supply concerns.
Looking forward, we expect VRDO market conditions to change. As inflationary
fears cause the municipal yield curve to steepen (i.e., long term municipal
rates increasing) there should be less incentive for municipal issuers to extend
out to the longer end of the municipal curve. Conversely, this should also
create additional incentive for issuers to use the VRDO market to ride out
higher borrowing rates on the longer end of the market.
In closing, thank you for investing in the Smith Barney Institutional Cash
Management Fund. We hope the Fund has proven to be a convenient, economical and
competitive vehicle for your short-term assets.
Sincerely,
/s/ Heath B. McLendon /s/ Phyllis Zahorodny
Heath B. McLendon Phyllis Zahorodny
Chairman Vice President and
Investment Officer
/s/ Joseph P. Deane /s/ Joseph Benevento
Joseph P. Deane Joseph Benevento
Vice President and Vice President and
Investment Officer Investment Officer
June 24, 1999
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Smith Barney Institutional Cash Management Fund, Inc. 3
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
======================================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 82.8%
$15,000,000 ANZ Delaware Inc. matures 7/12/99 4.87% $ 14,917,829
25,000,000 Abbey National North American matures 7/6/99 4.87 24,883,090
15,000,000 Alliance & Leicester PLC matures 8/5/99 4.91 14,869,188
20,000,000 American Express Credit Co. matures 6/18/99 4.86 19,954,572
30,000,000 American Home Products
mature 7/20/99 to 8/6/99 4.85 to 4.87 29,758,992
25,000,000 Ameritech Capital Funding Corp.
matures 6/10/99 4.80 24,970,125
17,000,000 Associates First Capital Co. matures 6/7/99 4.85 16,986,372
35,000,000 AT&T Corp. mature 6/29/99 to 7/2/99 4.84 to 4.85 34,860,989
17,854,000 Atlantis One Funding Corp.
mature 6/24/99 to 7/16/99 4.85 to 4.95 17,769,139
25,000,000 Bank America Corp. matures 8/4/99 4.88 24,786,222
25,000,000 Bank of New York matures 6/11/99 4.89 24,966,597
20,000,000 BBL N.A. Inc. matures 7/23/99 4.89 19,860,467
16,900,000 Banque Nationale de Paris Canada
matures 7/30/99 4.90 16,766,223
17,102,000 Barton Capital Corp. matures 6/3/99 4.83 17,097,430
26,885,000 BCI Funding Corp. mature 6/22/99 to 6/24/99 4.89 to 4.90 26,804,555
12,300,000 Canadian Wheat Board matures 7/26/99 4.81 12,211,679
20,000,000 Centric Capital Corp. mature 6/4/99 to 7/12/99 4.81 to 4.85 19,941,219
25,000,000 CIT Group Holdings Inc. matures 6/1/99 4.84 25,000,000
15,000,000 Cregum North America Inc. matures 7/28/99 4.86 14,886,000
10,000,000 Daimler Chrysler N.A. matures 7/14/99 4.85 9,942,547
15,000,000 Delaware Funding Corp. matures 6/8/99 4.87 14,985,913
15,000,000 Deutsche Bank Financial matures 8/10/99 4.88 14,859,417
15,000,000 Dresdner Bank matures 6/25/99 4.88 14,951,850
15,000,000 Ford Motor Credit matures 6/10/99 4.81 14,982,038
39,600,000 General Electric Capital Corp.
mature 7/28/99 to 8/4/99 4.87 to 4.92 39,282,361
15,000,000 General Motors Acceptance Corp.
matures 7/29/99 4.92 14,882,308
15,000,000 Generale Bank matures 8/16/99 4.96 14,844,833
10,000,000 GTE Corp. matures 6/10/99 4.85 9,987,925
9,800,000 GTE Funding matures 6/21/99 4.90 9,773,431
19,471,000 Halifax PLC mature 7/1/99 4.85 to 4.89 19,392,927
8,265,000 International Lease Finance matures 8/18/99 4.92 8,178,686
20,000,000 Johnson & Johnson matures 6/24/99 4.83 19,938,922
20,000,000 J.P. Morgan & Co. matures 9/27/99 4.92 19,684,678
30,000,000 Merrill Lynch & Co. mature 6/2/99 to 6/11/99 4.81 to 4.88 29,977,875
9,865,000 Monte Rosa matures 6/11/99 4.85 9,851,764
21,000,000 Nationwide Building Society
mature 8/16/99 to 8/17/99 4.89 to 4.96 20,783,161
20,983,000 Osterreich Kontrollbank mature
6/1/99 to 9/22/99 4.81 to 4.91 20,816,136
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
4 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
======================================================================================================
<S> <C> <C> <C>
COMMERCIAL PAPER -- 82.8% (continued)
$ 17,200,000 Pfizer Inc. matures 6/25/99 4.80% $ 17,145,304
24,995,000 Preferred Receivable Funding matures 8/20/99 4.96 24,722,832
23,900,000 Province of British Columbia matures 7/26/99 4.84 23,727,289
10,814,000 Quincy Capital Corp. matures 6/8/99 4.83 10,803,907
19,340,000 Rose Funding matures 8/31/99 5.01 19,098,008
15,000,000 San Paolo U.S. Finance Inc. matures 8/10/99 4.91 14,859,125
15,000,000 Svenska Handelsbanken matures 7/12/99 4.86 14,918,000
23,716,000 Transamerica Finance Corp.
mature 7/19/99 to 7/26/99 4.88 to 4.91 23,550,178
13,000,000 Union Bank of Switzerland matures 7/13/99 4.90 12,927,200
10,000,000 Westpac matures 7/6/99 4.87 9,953,236
13,500,000 Windmill Funding Corp. matures 6/11/99 4.87 13,481,813
- ------------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost-- $893,594,352) 893,594,352
======================================================================================================
FOREIGN CERTIFICATES OF DEPOSIT -- 8.0%
15,000,000 Bayerische Hypo-Und Vereinsbank AG matures 2/7/00 5.05 14,996,021
10,000,000 Bayerische Landesbank matures 2/23/00 5.22 9,993,202
15,000,000 Commerzbank matures 2/1/00 5.00 14,996,599
4,000,000 Dresdner Bank matures 11/9/99 5.02 3,997,602
5,000,000 Deutsche Bank matures 2/2/00 5.10 4,995,612
5,000,000 National Bank of Canada matures 6/10/99 5.82 4,999,935
10,000,000 National Westminster Bank PLC matures 3/15/00 5.20 9,998,100
17,300,000 Royal Bank of Canada matures 8/9/99 4.91 17,299,957
5,000,000 Societie Generale NY matures 1/14/00 5.00 5,000,562
- ------------------------------------------------------------------------------------------------------
TOTAL FOREIGN CERTIFICATES OF DEPOSIT
(Cost-- $86,277,590) 86,277,590
======================================================================================================
MEDIUM-TERM NOTE -- 0.9%
10,000,000 Goldman Sachs matures 2/24/00
(Cost-- $10,000,000) 5.28 10,000,000
======================================================================================================
TIME DEPOSITS -- 3.7%
40,000,000 First Chicago matures 6/1/99
(Cost-- $40,000,000) 4.91 40,000,000
======================================================================================================
</TABLE>
See Notes to Financial Statements.
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Smith Barney Institutional Cash Management Fund, Inc. 5
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
======================================================================================================
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY-- 2.3%
$ 25,000,000 Federal Home Loan Mortgage Corp.
matures 8/16/99
(Cost-- $24,749,306) 4.81% $ 24,749,306
======================================================================================================
REPURCHASE AGREEMENT -- 2.3%
24,481,000 Morgan Stanley Dean Witter & Co., 4.80% due 6/1/99;
Proceeds at maturity -- $24,494,057;
(Fully collateralized by U.S. Treasury Notes,
7.00% due 7/15/06; Market value -- $25,127,298)
(Cost-- $24,481,000) 24,481,000
======================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $1,079,102,248*) $1,079,102,248
======================================================================================================
</TABLE>
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
6 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GOVERNMENT PORTFOLIO
FACE ANNUALIZED
AMOUNT SECURITY YIELD VALUE
======================================================================================================
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES AND INSTRUMENTALITIES -- 93.6%
$31,257,000 Federal Farm Credit Bank
mature 6/1/99 to 6/29/99 4.66% to 4.83% $ 31,221,690
36,665,000 Federal Home Loan Bank
mature at 6/4/99 to 7/23/99 4.71 to 4.82 36,550,092
33,352,000 Federal Home Loan Mortgage Corp.
mature at 6/3/99 to 10/8/99 4.73 to 4.86 33,196,273
33,000,000 Federal National Mortgage Association
mature at 6/3/99 to 8/24/99 4.75 to 4.90 32,901,776
3,500,000 Tennessee Valley Authority Discount Note
matures 6/14/99 4.75 3,494,016
- ------------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENTS AGENCIES
AND INSTRUMENTALITIES
(Cost--$137,363,847) 137,363,847
======================================================================================================
REPURCHASE AGREEMENTs -- 6.4%
4,319,000 J.P. Morgan Securities Inc., 4.80% due 6/1/99;
Proceeds at maturity -- $4,321,303;
(Fully collateralized by U.S. Treasury Notes,
5.50% due 2/29/00; Market value-- $4,348,245) 4,319,000
5,000,000 Morgan Stanley Dean Witter &Co., 4.80% due 6/1/99;
Proceeds at maturity -- $5,002,667;
(Fully collateralized by U.S. Treasury Notes,
6.625% due 5/15/07; Market value-- $5,133,610) 5,000,000
- ------------------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost-- $9,319,000) 9,319,000
======================================================================================================
TOTAL INVESTMENTS -- 100%
(Cost-- $146,682,847*) $146,682,847
======================================================================================================
</TABLE>
* Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 7
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Alaska -- 2.2%
$ 6,635,000 A-1 Alaska State Housing Finance Corp., Government
Purpose University, Series 97A, 3.35%(b) $ 6,635,000
- ------------------------------------------------------------------------------------------------------
Arizona -- 3.8%
8,600,000 A-1+ Apache County, AZ IDR, (Tucson Electric Power),
Series 83B, 3.25%(b) 8,600,000
1,950,000 A-1 Maricopa County, AZ (Southern Cal Edison), Series F,
TECP, 2.95% due 6/10/99 1,950,000
1,000,000 A-1+ Pima County, AZ IDR, (Tuscon Electric Power), Series A,
3.25%(b) 1,000,000
- ------------------------------------------------------------------------------------------------------
11,550,000
- ------------------------------------------------------------------------------------------------------
California -- 0.7%
2,000,000 VMIG 1* Riverside County, CA (School Financial Authority),
PART, 3.374% due 10/1/99 2,000,000
- ------------------------------------------------------------------------------------------------------
Colorado -- 1.3%
Colorado Housing Finance Authority MFH:
2,000,000 A-1+ Central Park, Series 96C, 3.30%(b) 2,000,000
1,980,000 A-1+ Hamptons, Series 96G, 3.30%(b) 1,980,000
- ------------------------------------------------------------------------------------------------------
3,980,000
- ------------------------------------------------------------------------------------------------------
District of Columbia -- 0.8%
1,500,000 A-1+ District of Columbia G.O., Series 1992A-5,
3.45%(b) 1,500,000
1,000,000 SP-1+ District of Columbia TRAN, Series B,
3.75 due 9/30/99 1,002,097
- ------------------------------------------------------------------------------------------------------
2,502,097
- ------------------------------------------------------------------------------------------------------
Florida -- 6.0%
2,000,000 AAA Dunedin Utility, (Pre-Refunded-- Escrowed with
U.S. government securities to 10/1/99 Call @ 100),
6.00% due 1/1/15 2,050,849
2,000,000 AAA Florida State Turnpike Authority, (Pre-Refunded--
Escrowed with U.S. government securities to 7/1/99
Call @ 102), 7.50% due 7/1/19 2,046,121
5,000,000 NR+ Gulf Breeze, FL (Heritage Healthcare), Series 9, 3.42%(b) 5,000,000
5,950,000 A-1+ Orange County, FL (Adventist Health Systems), 3.20%(b) 5,950,000
2,000,000 A-1+ St. Lucie County, FL (Florida Power & Light), Series 94A,
TECP, 2.95% due 6/10/99 2,000,000
1,300,000 A-1+ Tampa, FL Occupational License Tax, Series A, 3.35%(b) 1,300,000
- ------------------------------------------------------------------------------------------------------
18,346,970
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Georgia -- 2.6%
$ 1,700,000 A-1+ Burke, GA (Oglethorpe Power), Series 98A,
3.25% due 6/21/99 $ 1,700,000
4,000,000 NR+ Fulton, GA Development Authority, (Metro Atlanta
YMCA), Series 97, 3.25%(b) 4,000,000 Municipal
Electricity Authority:
1,350,000 A-1+ Series B, 3.20%(b) 1,350,000
1,000,000 A-1+ Series D, 3.30%(b) 1,000,000
- ------------------------------------------------------------------------------------------------------
8,050,000
- ------------------------------------------------------------------------------------------------------
Hawaii -- 0.7%
1,000,000 VMIG 1* Hawaii Housing Finance & Development Corp.,
Series 93A, 3.30%(b) 1,000,000
1,000,000 NR+ Hawaii State GO, 4.75% due 11/1/99 1,006,322
- ------------------------------------------------------------------------------------------------------
2,006,322
- ------------------------------------------------------------------------------------------------------
Illinois -- 12.6%
5,300,000 A-1+ Chicago, IL (O'Hare Int'l Airport Revenue), Series 94C,
3.20%(b) 5,300,000
1,600,000 A-1+ Chicago, IL Series SGA8, 3.33%(b) 1,600,000
1,000,000 AAA Chicago, IL Water Reclamation District, (Pre-Refunded--
Escrowed with U.S. government securities to 1/1/00,
Call @ 102), 6.80% due 1/1/08 1,041,178
3,000,000 VMIG 1* Chicago, IL Water Revenue, Series 1998-4, 3.39%(b) 3,000,000
2,000,000 A-1+ Illinois Development Finance Authority PCR,
(Con Edison Co.), Series C, 3.30%(b) 2,000,000
1,000,000 VMIG 1* Illinois Health Facility Authority, (Pekin Memorial
Hospital), Series C, 3.34%(b) 1,000,000
4,100,000 A-1+ Illinois Health Facilities Authority Revenue, 3.20%(b) 4,100,000
2,000,000 A-1+ Illinois Health Facilities Authority Revenue, (Victory
Health Services), Series 97B, TECP, 3.25% due 9/7/99 2,000,000
1,815,000 AAA Illinois State Sales Tax, Series K, (Pre-Refunded--
Escrowed with U.S. government securities to 6/15/99,
Call @ 102), 7.00% due 6/15/19 1,853,413
5,700,000 VMIG 1* Illinois State Toll Highway Authority, Series B, 3.25%(b) 5,700,000
1,000,000 A-1+ Lisle, IL MFH, (Ashley of Lisle PJ), 3.32%(b) 1,000,000
9,800,000 A-1+ University of Illinois, (Health Service Facilities Systems),
Series B, 3.20%(b) 9,800,000
- ------------------------------------------------------------------------------------------------------
38,394,591
- ------------------------------------------------------------------------------------------------------
Indiana -- 3.5%
2,125,000 AAA Ball State University Individual Revenue, Student Fee,
Series 1, 3.25% due 7/1/99 2,125,247
2,400,000 A-1+ Hammond, IN PCR, (Amoco Oil Co. Project),
Series 94, 3.40%(b) 2,400,000
1,000,000 A-1+ Indiana State Development Finance Authority,
(Youth Opportunity Center), 3.25%(b) 1,000,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 9
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Indiana -- 3.5% (continued)
$ 5,000,000 A-1+ Vernon PCR, Solid Waste General Election, Series 89A,
TECP, 3.20% due 6/21/99 $ 5,000,000
- ------------------------------------------------------------------------------------------------------
10,525,247
- ------------------------------------------------------------------------------------------------------
Iowa -- 2.9%
6,300,000 A-1+ Iowa Finance Authority, (Iowa Health Systems), Series B,
3.25%(b) 6,300,000
2,600,000 A-1+ Iowa Higher Education Loan Authority, (Private College
Facility), 3.35%(b) 2,600,000
- ------------------------------------------------------------------------------------------------------
8,900,000
- ------------------------------------------------------------------------------------------------------
Kentucky -- 0.7%
2,000,000 VMIG 1* Fulton County, (United Healthcare Hospital Co.), 3.35%(b) 2,000,000
- ------------------------------------------------------------------------------------------------------
Louisiana -- 1.4%
1,400,000 NR+ Lake Charles Harbor & Terminal District Port,
Citgo Petroleum Corp., Series 84, 3.30%(b) 1,400,000
900,000 A-1+ Louisiana Public Facility Authority, Willis Knighton
Medical Center, AMBAC-Insured, 3.40%(b) 900,000
2,000,000 A-1+ St. Charles Parish PCR, Shell Oil, 3.10%(b) 2,000,000
- ------------------------------------------------------------------------------------------------------
4,300,000
- ------------------------------------------------------------------------------------------------------
Maryland -- 6.7%
2,000,000 A-1+ Baltimore, MD IDA, (Capital Acquisition), 3.20%(b) 2,000,000
6,500,000 A-1 Baltimore, MD (Oak Crest Village), Series 99A, 3.25%(b) 6,500,000
3,000,000 A-1+ Baltimore, MD PCR (SCM Plants Project), 3.30%(b) 3,000,000
6,000,000 NR+ Maryland State Health & Higher Educational Facilities,
Series B, 3.25%(b) 6,000,000
3,000,000 A-1+ Montgomery County EDA, (Howard Hughes Medical
Center), Series 90B, 3.25%(b) 3,000,000
- ------------------------------------------------------------------------------------------------------
20,500,000
- ------------------------------------------------------------------------------------------------------
Massachusetts -- 5.9%
3,400,000 A-1 Boston, MA IDR, (Boston Home Inc.), 3.55%(b) 3,400,000
2,835,000 A-1+ Dudley Charlton Regional School, Series PA521, 3.27%(b) 2,835,000
6,000,000 A-1+ Massachusetts GO, Series B, 3.00%(b) 6,000,000
Massachusetts Water Resource Authority:
1,000,000 A-1+ Series B, 3.15%(b) 1,000,000
4,900,000 A-1+ Series D, 3.15%(b) 4,900,000
- ------------------------------------------------------------------------------------------------------
18,135,000
- ------------------------------------------------------------------------------------------------------
Michigan -- 3.3%
5,000,000 A-1+ Michigan Strategic Fund PCR, (General Motors Corp.
Project), 3.35%(b) 5,000,000
5,000,000 VMIG 1* Saline EDA, (Evangelical Homes Project), 3.25%(b) 5,000,000
- ------------------------------------------------------------------------------------------------------
10,000,000
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
10 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Minnesota -- 2.3%
$ 3,000,000 NR+ Minneapolis, MN (Seed Academy Harvest School),
3.45%(b) $ 3,000,000
3,000,000 NR+ Minnesota State GO, PART, 3.45%(b) 3,000,000
1,000,000 MIG 1* Minnesota TAN, (School District Tax & Aid Borrowing
Project), 2.95% due 2/24/00 1,000,000
- ------------------------------------------------------------------------------------------------------
7,000,000
- ------------------------------------------------------------------------------------------------------
Missouri -- 0.3%
1,000,000 SP-1+ Missouri State Health & Education Facilities Authority
Revenue, Drury College, Series B, 3.50% due 4/29/00 1,002,820
- ------------------------------------------------------------------------------------------------------
Nevada -- 0.7%
1,000,000 A-1+ Las Vegas Water District GO, Series A, TECP,
3.25% due 7/21/99 1,000,000
1,000,000 A-1+ Nevada State GO, PART, 3.32%(b) 1,000,000
- ------------------------------------------------------------------------------------------------------
2,000,000
- ------------------------------------------------------------------------------------------------------
New Jersey -- 2.7%
7,500,000 A-1+ New Jersey State TRAN, TECP, Series 98A,
3.40% due 6/14/99 7,500,000
570,000 A-1+ New Jersey Transportation Trust Fund Authority,
MBIA-Insured, 3.30%(b) 570,000
- ------------------------------------------------------------------------------------------------------
8,070,000
- ------------------------------------------------------------------------------------------------------
New Mexico -- 0.8%
1,400,000 A-1+ Farmington, NM PCR, (Arizona Public Service Co.),
Series A, 3.30%(b) 1,400,000
1,000,000 SP-1+ New Mexico TRAN, Series 98-99, 4.25% due 6/30/99 1,000,498
- ------------------------------------------------------------------------------------------------------
2,400,498
- ------------------------------------------------------------------------------------------------------
New York -- 4.7%
1,000,000 A-1+ MTA TECP BAN, Subseries CP1, 3.00% due 7/8/99 1,000,000
900,000 SP-1+ Nassau County RAN, Series A, 3.75% due 3/15/00 903,303
5,000,000 A-1+ NYC Muni Water, TECP, Series 3, 3.20% due 6/18/99 5,000,000
NYC TRANS Financial Authority:
1,000,000 NR+ Series A/2, 3.05%(b) 1,000,000
4,500,000 NR+ Subseries A-2(b) 4,500,000
2,000,000 SP-1+ Suffolk County TRAN, Series 1, 3.50% due 8/12/99 2,002,310
- ------------------------------------------------------------------------------------------------------
14,405,613
- ------------------------------------------------------------------------------------------------------
North Carolina -- 4.0%
1,470,000 A-1+ Mecklenburg County Lease Revenue,
(The Young Men's Christian Association), 3.20%(b) 1,470,000
10,690,000 A-1+ North Carolina Education Facilities Agency,
(Brevard College), 3.25%(b) 10,690,000
- ------------------------------------------------------------------------------------------------------
12,160,000
- ------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 11
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Ohio -- 0.7%
$ 2,000,000 SP-1+ Summit County BAN, Series A, 3.80% due 6/1/00 $ 2,011,560
- ------------------------------------------------------------------------------------------------------
Oklahoma -- 1.1%
2,490,000 NR+ Oklahoma City, OK GO, 6.60% due 6/1/99 2,490,000
1,000,000 A-1+ Oklahoma State Water Resource Board Program,
2.90% due 9/1/99 1,000,000
- ------------------------------------------------------------------------------------------------------
3,490,000
- ------------------------------------------------------------------------------------------------------
Oregon -- 1.3%
2,000,000 VMIG 1* Hillsboro Oregon Revenue, Graduate Center Institute
Project, 3.35%(b) 2,000,000
2,000,000 A-1+ Oregon State GO, Series 73H, 3.25%(b) 2,000,000
- ------------------------------------------------------------------------------------------------------
4,000,000
- ------------------------------------------------------------------------------------------------------
Pennsylvania -- 5.1%
1,000,000 A-1 Beaver County, (Duquesne Light), Series 90C,
3.20% due 6/17/99 1,000,000
5,000,000 A-1+ Emmaus Pooled Loan Program, Series G-13, 3.45%(b) 5,000,000
3,480,000 A-1 Pennsylvania Higher Education, (College of Optometry),
3.25%(b) 3,480,000
1,000,000 SP-1+ Philadelphia, PA TRAN, Series A 98-99, 4.28% due 6/30/99 1,000,471
1,000,000 SP-1+ Philadelphia School District TRAN, Series A,
4.25% due 6/30/99 1,000,475
2,000,000 A-1+ Pittsburgh, PA GO, Series A, 3.30%(b) 2,000,000
2,085,000 NR+ Quakertown General Authority Revenue, Series A, 3.45%(b) 2,085,000
- ------------------------------------------------------------------------------------------------------
15,565,946
- ------------------------------------------------------------------------------------------------------
South Carolina -- 1.0%
3,200,000 SP-1+ Piedmont Muni Power Agency, MBIA-Insured, Series A,
3.25%(b) 3,200,000
- ------------------------------------------------------------------------------------------------------
Tennessee -- 3.4%
Clarksville Public Building Authority:
2,000,000 A-1+ Series 94, 3.25%(b) 2,000,000
5,000,000 VMIG 1* Series 97, 3.25%(b) 5,000,000
2,300,000 VMIG 1* Jackson County IDR, (Esselte Project), Series A, 3.35%(b) 2,300,000
1,000,000 AAA Tennessee Energy Acquisition, AMBAC-Insured,
3.75% due 9/1/99 1,000,734
- ------------------------------------------------------------------------------------------------------
10,300,734
- ------------------------------------------------------------------------------------------------------
Texas -- 7.2%
1,475,000 A-1+ Bexar County Health Facilities Retirement Community,
Series A, 3.25%(b) 1,475,000
2,000,000 A-1+ Dallas Area Rapid Transit, TECP, Series B,
3.20% due 8/6/99 2,000,000
5,147,000 A-1+ Harris County, GO TECP, Series A, 3.40% due 6/11/99 5,147,000
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
12 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Schedules of Investments (continued) May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
======================================================================================================
<S> <C> <C> <C>
Texas-- 7.2% (continued)
$ 5,000,000 A-1+ Harris County Toll Road, Series E, 3.25%(b) $ 5,000,000
1,100,000 NR+ McAllen, Texas Health Facility
Development Corp., 3.40%(b) 1,100,000
1,100,000 VMIG 1* Southern Higher Education Authority, (SMU University),
Series 85, 3.40%(b) 1,100,000
2,000,000 VMIG 1* Tarrant County Water Control, 3.45%(b) 2,000,000
300,000 NR+ Texas Small Business IDR, 3.35%(b) 300,000
3,900,000 SP-1+ Texas State TRAN,
Series 98, 4.50% due 8/31/99 3,914,871
- ------------------------------------------------------------------------------------------------------
22,036,871
- ------------------------------------------------------------------------------------------------------
Utah -- 3.9%
11,810,000 A-1+ Central Utah Water Conservation, AMBAC-Insured,
Series E, 3.30%(b) 11,810,000
- ------------------------------------------------------------------------------------------------------
Virginia -- 0.3%
800,000 A-1 Alexandria, VA IDR, (Pooled Loan Program),
Series A 3.25%(b) 800,000
- ------------------------------------------------------------------------------------------------------
Washington -- 2.1%
Washington State Public Power Supply System:
4,720,000 A-1+ Series 3 A-3, 3.25%(b) 4,720,000
1,600,000 A-1+ Series 93, 3.30%(b) 1,600,000
- ------------------------------------------------------------------------------------------------------
6,320,000
- ------------------------------------------------------------------------------------------------------
Wisconsin -- 3.3%
3,700,000 VMIG 1* Milwaukee, WI GO, 3.45%(b) 3,700,000
3,000,000 A-1+ Wisconsin Central District Tax Revenue, Series 96b,
3.42%(b) 3,000,000
2,000,000 A-1+ Wisconsin State Health & Education Facilities Authority
Revenue, AMBAC-Insured, 3.40%(b) 2,000,000
1,437,000 A-1+ Wisconsin Transportation Revenue, TECP Series 97A,
3.00% due 6/9/99 1,437,000
- ------------------------------------------------------------------------------------------------------
10,137,000
- ------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost-- $304,536,269**) $304,536,269
======================================================================================================
</TABLE>
(a) All ratings are by Standard & Poor's Ratings Service, except those which
are identified by an asterisk (*) are rated by Moody's Investors Service
Inc.
(b) Variable rate obligation payable at par on demand at any time on no more
than seven days notice.
+ Security has not been rated by either Moody's Investors Service or
Standard & Poor's Ratings Service. However, the Board of Directors has
determined this security to be considered as a first tier quality issue
due to enhancement features; such as insurance and/or an irrevocable
letter of credit.
** Aggregate cost for Federal income tax purposes is substantially the same.
See page 14 for definition of ratings and certain security descriptions.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 13
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings (unaudited)
- --------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
AAA -- Bonds rated "AAA" have the highest rating assigned by Standard & Poor's
Ratings Service ("Standard & Poor's"). Capacity to pay interest and repay
principal is extremely strong.
- --------------------------------------------------------------------------------
Short-Term Security Ratings (unaudited)
- --------------------------------------------------------------------------------
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 Investors Service Inc. ("Moody's") highest rating for issues
having a demand feature -- VRDO.
MIG 1 -- Moody's highest rating for short-term municipal obligations.
P-1 -- Moody's highest rating for commercial paper and for VRDO prior to
the advent of the VMIG 1 rating.
NR -- Indicates that the bond is not rated by Moody's or Standard &
Poor's.
- --------------------------------------------------------------------------------
Security Descriptions (unaudited)
- --------------------------------------------------------------------------------
AMBAC -- AMBAC Indemnity Corporation
BAN -- Bond Anticipation Notes
EDA -- Economic Development Authority
EDC -- Economic Development Corporation
EFA -- Educational Facilities Authority
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance Company
FRTC -- Floating Rate Trust Certificates
FSA -- Financial Security Assurance
GO -- General Obligation
HDA -- Housing Development Authority
HEFA -- Health and Educational Facilities Authority
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDC -- Industrial Development Corporation
IDR -- Industrial Development Revenue
MBIA -- Municipal Bond Investor's Assurance Corporation
MFH -- Multi-Family Housing
MTA -- Metropolitan Transportation Authority
PART -- Partnership Structure
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PFA -- Public Facilities Authority
RAN -- Revenue Anticipation Notes
RAW -- Revenue Anticipation Warrants
STEM -- Short-Term Extendable Maturity
TAN -- Tax Anticipation Notes
TECP -- Tax Exempt Commercial Paper
TOB -- Tender Option Bond
TRAN -- Tax & Revenue Anticipation Notes
USD -- United School District
VHA -- Veterans Housing Authority
- --------------------------------------------------------------------------------
14 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cash Government Municipal
Portfolio Portfolio Portfolio
================================================================================================
ASSETS:
<S> <C> <C> <C>
Investments, at amortized cost $1,079,102,248 $ 146,682,847 $ 304,536,269
Cash 96 545 52,813
Interest receivable 1,760,774 4,826 1,629,239
Receivable for securities sold -- -- 8,269,523
Prepaid expenses 188,346 85,172 271
Other assets -- 22,000 --
- ------------------------------------------------------------------------------------------------
Total Assets 1,081,051,464 146,795,390 314,488,115
- ------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 19,098,008 -- 2,011,560
Dividends payable 3,881,162 541,666 767,636
Management fees payable 1,502,713 104,144 149,001
Distribution fees payable 1,973 -- 985
Deferred compensation payable 1,293 551 498
Accrued expenses 61,233 45,803 15,198
- ------------------------------------------------------------------------------------------------
Total Liabilities 24,546,382 692,164 2,944,878
- ------------------------------------------------------------------------------------------------
Total Net Assets $1,056,505,082 $ 146,103,226 $ 311,543,237
================================================================================================
NET ASSETS CONSIST OF:
Capital Stock
(25,000,000,000 shares
authorized for each Portfolio;
par value $0.00001 per share) $ 10,565 $ 1,461 $ 3,115
Capital paid in excess of par value 1,056,494,517 146,101,765 311,541,663
Accumulated net realized loss
from security transactions -- -- (1,541)
- ------------------------------------------------------------------------------------------------
Total Net Assets $1,056,505,082 $ 146,103,226 $ 311,543,237
================================================================================================
Class A Shares Outstanding: 1,056,498,989 146,099,162 311,544,338
- ------------------------------------------------------------------------------------------------
Net Asset Value $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 15
<PAGE>
- --------------------------------------------------------------------------------
Statements of Operations For the Year Ended May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cash Government Municipal
Portfolio Portfolio Portfolio
==============================================================================================
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 51,879,884 $ 5,752,457 $ 4,531,579
- ----------------------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 2,641,152 304,826 368,395
Shareholder and system servicing fees 170,000 31,500 36,000
Registration fees 68,191 26,018 72,293
Custody 53,500 15,000 18,000
Audit and legal 33,000 23,000 17,500
Directors' fees 27,000 10,500 12,000
Shareholder communications 26,000 4,500 2,000
Distribution fees (Note 2) 2,896 -- 633
Rating service fees -- 33,500 --
Other 9,000 11,828 5,031
- ----------------------------------------------------------------------------------------------
Total Expenses 3,030,739 460,672 531,852
Less: Management fee waivers (Note 2) (782,506) (200,682) (219,394)
- ----------------------------------------------------------------------------------------------
Net Expenses 2,248,233 259,990 312,458
- ----------------------------------------------------------------------------------------------
Net Investment Income 49,631,651 5,492,467 4,219,121
- ----------------------------------------------------------------------------------------------
Net Realized Gain (Loss) From
Security Transactions 29,546 3,607 (184)
- ----------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 49,661,197 $ 5,496,074 $ 4,218,937
==============================================================================================
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
16 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Years Ended May 31,
Cash Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 49,631,651 $ 30,641,549
Net realized gain 29,546 6,986
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 49,661,197 30,648,535
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (49,633,063) (30,642,659)
Net realized gain (27,593) (324)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (49,660,656) (30,642,983)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sale of shares 7,688,594,257 4,848,429,756
Net asset value of shares issued
for reinvestment of dividends 47,094,457 26,496,571
Cost of shares reacquired (7,529,966,754) (4,240,204,283)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 205,721,960 634,722,044
- --------------------------------------------------------------------------------
Increase in Net Assets 205,722,501 634,727,596
- --------------------------------------------------------------------------------
NET ASSETS:
Beginning of year 850,782,581 216,054,985
- --------------------------------------------------------------------------------
End of year $ 1,056,505,082 $ 850,782,581
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 17
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Years Ended May 31,
Government Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 5,492,467 $ 6,399,088
Net realized gain 3,607 --
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 5,496,074 6,399,088
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (5,493,894) (6,397,204)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (5,493,894) (6,397,204)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sale of shares 833,058,394 630,868,183
Net asset value of shares issued
for reinvestment of dividends 5,204,391 6,477,905
Cost of shares reacquired (780,645,320) (700,704,603)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Fund Share Transactions 57,617,465 (63,358,515)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 57,619,645 (63,356,631)
NET ASSETS:
Beginning of year 88,483,581 151,840,212
- --------------------------------------------------------------------------------
End of year $ 146,103,226 $ 88,483,581
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
For the Years Ended May 31,
Municipal Portfolio 1999 1998
================================================================================
OPERATIONS:
Net investment income $ 4,219,121 $ 2,354,445
Net realized loss (184) (1,067)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 4,218,937 2,353,378
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (4,219,987) (2,353,139)
Net realized gain -- (440)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (4,219,987) (2,353,579)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sale of shares 1,661,218,756 780,950,264
Net asset value of shares issued
for reinvestment of dividends 3,399,379 2,114,140
Cost of shares reacquired (1,438,744,794) (721,059,255)
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 225,873,341 62,005,149
- --------------------------------------------------------------------------------
Increase in Net Assets 225,872,291 62,004,948
NET ASSETS:
Beginning of year 85,670,946 23,665,998
- --------------------------------------------------------------------------------
End of year $ 311,543,237 $ 85,670,946
================================================================================
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 19
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Smith Barney Institutional Cash Management Fund, Inc. ("Fund"), a Maryland
corporation, is registered under the Investment Company Act of 1940, as amended,
as a diversified, open-end management investment company. The Fund consists of
three separate investment portfolios ("Portfolios"): Cash Portfolio ("Cash"),
Government Portfolio ("Government") and Municipal Portfolio ("Municipal").
The significant accounting policies consistently followed by the Portfolios are:
(a) transactions in money market instruments and government obligations are
accounted for on trade date; (b) the Portfolios use the amortized cost method
for valuing investments; accordingly, the cost of securities plus accreted
discount, or minus amortized premium, approximates value; (c) interest income is
recorded on an accrual basis; (d) expenses are charged to each Portfolio and
each class; management fees and general fund expenses are allocated on the basis
of relative net assets; (e) the Portfolios intend 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 be relieved from substantially all Federal income and excise
taxes; and (f) 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. Management Agreement and Other Transactions
SSBC Fund Management Inc. ("SSBC"), formerly known as Mutual Management Corp., a
subsidiary of Salomon Smith Barney Holdings, Inc. ("SSBH"), acts as investment
manager of the Fund. As compensation for its services, each Portfolio pays SSBC
a management fee calculated at an annual rate of 0.27% of the average daily net
assets of each Portfolio. This fee is calculated daily and paid monthly.
For the year ended May 31, 1999, SSBC waived management fees of $782,506,
$200,682 and $219,394 for the Cash, Government and Municipal Portfolios,
respectively.
On October 8, 1998, CFBDS, Inc. became the Fund's distributor. Prior to that
date Salomon Smith Barney Inc. ("SSB"), another subsidiary of SSBH, was the
Fund's distributor. SSB, as well as certain other broker-dealers, continues to
sell Fund shares to the public as a member of the selling group.
- --------------------------------------------------------------------------------
20 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to its
Class B shares calculated at an annual rate of 0.25% of the average daily net
assets of each Portfolio's Class B shares. For the year ended May 31, 1999,
total Distribution Plan fees incurred were:
Cash Government Municipal
================================================================================
Distribution Plan Fees $2,896 -- $633
================================================================================
All officers and one Director of the Fund are employees of SSB.
3. Dividends, Exempt-Interest Dividends and Other Distributions
Each Portfolio declares and records a dividend of substantially all of its net
investment income on each business day. Such dividends are paid or reinvested
monthly in each respective Portfolio's shares on the payable date.
Furthermore, Municipal intends to satisfy conditions that will enable interest
from municipal securities, which are exempt from regular Federal income tax and
from designated state income taxes, to retain such status when distributed to
its shareholders.
Capital gain distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
4. Repurchase Agreements
The Fund purchases, and its custodian takes possession of, U.S. government
securities from banks and securities dealers subject to agreements to resell the
securities to the sellers at a future date (generally, the next business day) at
an agreed-upon higher repurchase price. The Fund requires continual maintenance
of the market value of the collateral in amounts at least equal to the
repurchase price.
5. Capital Shares
At May 31, 1999, the Fund had 75,000,000,000 shares of capital stock authorized
with a par value of $0.00001 per share. The Fund has the ability to issue
multiple classes of shares within the Portfolios. 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.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 21
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Transactions in shares of each Portfolio were as follows:
Year Ended Year Ended
May 31, 1999 May 31, 1998
================================================================================
Cash Portfolio -- Class A Shares
Shares sold 7,683,594,257 4,843,709,377
Shares issued on reinvestment 47,033,344 26,444,115
Shares reacquired (7,522,505,306) (4,237,831,783)
- --------------------------------------------------------------------------------
Net Increase 208,122,295 632,321,709
================================================================================
Cash Portfolio -- Class B Shares (a)(b)
Shares sold 5,000,000 4,720,379
Shares issued on reinvestment 61,113 52,456
Shares reacquired (7,461,448) (2,372,500)
- --------------------------------------------------------------------------------
Net Increase (Decrease) (2,400,335) 2,400,335
================================================================================
Government Portfolio
Shares sold 833,058,394 630,868,183
Shares issued on reinvestment 5,204,391 6,477,905
Shares reacquired (780,645,320) (700,704,603)
- --------------------------------------------------------------------------------
Net Increase (Decrease) 57,617,465 (63,358,515)
================================================================================
Municipal Portfolio -- Class A Shares
Shares sold 1,654,103,348 774,368,714
Shares issued on reinvestment 3,399,379 2,105,943
Shares reacquired (1,431,629,386) (714,469,508)
- --------------------------------------------------------------------------------
Net Increase 225,873,341 62,005,149
================================================================================
Municipal Portfolio -- Class B Shares (b)
Shares sold 7,115,408 6,581,550
Shares issued on reinvestment -- 8,197
Shares reacquired (7,115,408) (6,589,747)
- --------------------------------------------------------------------------------
Net Increase -- --
================================================================================
(a) Transactions are for the period from October 28, 1997 (inception date) to
May 31, 1998.
(b) As of May 31, 1999, Class B shares were fully redeemed.
- --------------------------------------------------------------------------------
22 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended May 31:
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------
Cash Portfolio 1999 1998 1997 1996(1)
====================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------
Net investment income (2) 0.051 0.055 0.052 0.053
Distributions from net investment income (0.051) (0.055) (0.052) (0.053)
Distributions from net realized gains (0.000)* (0.000)* -- --
- ----------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return 5.23% 5.58% 5.35% 5.44%++
- ----------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $1,056,505 $ 848,383 $ 216,055 $ 277,572
- ----------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (2)(3) 0.23% 0.23% 0.23% 0.15%+
Net investment income 5.07 5.43 5.23 5.43+
====================================================================================================
</TABLE>
(1) For the period from June 16, 1995 (inception date) to May 31, 1996.
(2) The Manager has waived a portion of its fees for thePortfolio for the
years ended May 31, 1999, 1998, 1997 and the period ended May 31, 1996. If
the Manager had not agreed to the fee waiver, the per share effect on net
investment income and the ratio of expenses to average net assets for the
Class A shares would have been:
<TABLE>
<CAPTION>
Per Share
Decrease to Net Expense Ratio
Investment Income Without Fee Waiver
--------------------------------- ------------------------------------
1999 1998 1997 1996 1999 1998 1997 1996
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $0.001 $0.001 $0.001 $0.001 0.31% 0.35% 0.36% 0.39%+
</TABLE>
(3) As a result of a voluntary expense limitation, the ratio of expenses to
average net assets of the Portfolio will not exceed 0.23%.
* Amount represents less than $0.001.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 23
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended May 31:
<TABLE>
<CAPTION>
Government Portfolio 1999 1998 1997 1996(1)
====================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------
Net investment income (2) 0.049 0.053 0.052 0.052
Distributions from net investment income (0.049) (0.053) (0.052) (0.052)
Distributions from net realized gains -- -- (0.000)* (0.000)*
- ----------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return 5.05% 5.46% 5.29% 5.36%++
- ----------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 146,103 $ 88,484 $ 151,840 $ 57,698
- ----------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (2)(3) 0.23% 0.23% 0.21% 0.16%+
Net investment income 4.86 5.33 5.18 5.28+
====================================================================================================
</TABLE>
(1) For the period from June 16, 1995 (commencement of operations) to May 31,
1996.
(2) The Manager has waived a portion of its fees for thePortfolio for the
years ended May 31, 1999, 1998, 1997 and the period ended May 31, 1996. If
the Manager had not agreed to the fee waiver, the per share effect on net
investment income and the ratio of expenses to average net assets would
have been:
Per Share
Decrease to Net Expense Ratio
Investment Income Without Fee Waiver
- --------------------------------- ------------------------------------
1999 1998 1997 1996 1999 1998 1997 1996
- ------ ------ ------ ------ ------ ------ ------ ------
$0.002 $0.002 $0.001 $0.002 0.42% 0.39% 0.43% 0.55%+
(3) As a result of a voluntary expense limitation, the ratio of expenses to
average net assets of the Portfolio will not exceed 0.23%.
* Amount represents less than $0.001.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
24 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (continued)
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended May 31:
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------
Municipal Portfolio 1999 1998 1997 1996(1)
====================================================================================================
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------
Net investment income (2) 0.031 0.035 0.034 0.035
Distributions from net investment income (0.031) (0.035) (0.034) (0.035)
Distributions from net realized gains -- (0.000)* -- --
- ----------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return 3.18% 3.56% 3.40% 3.55%++
- ----------------------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 311,543 $ 85,671 $ 23,666 $ 59,308
- ----------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (2)(3) 0.23% 0.23% 0.21% 0.15%+
Net investment income 3.09 3.50 3.34 3.46+
====================================================================================================
</TABLE>
(1) For the period from June 16, 1995 (commencement of operations) to May 31,
1996.
(2) The Manager has waived all or part of its fees for thePortfolio for the
years ended May 31, 1999, 1998, 1997 and the period ended May 31, 1996. In
addition, the Manager agreed to reimburse the Portfolio for $63,835 in
expenses for the period ended May 31, 1996. If the Manager had not agreed
to the fee waiver and the expense reimbursement, the per share effect on
net investment income and the ratio of expenses to average net assets
would have been:
<TABLE>
<CAPTION>
Per Share
Decrease to Net Expense Ratio
Investment Income Without Fee Waiver
--------------------------------- ------------------------------------
1999 1998 1997 1996 1999 1998 1997 1996
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $0.002 $0.001 $0.004 $0.003 0.39% 0.41% 0.41% 0.69%+
</TABLE>
(3) As a result of a voluntary expense limitation, the ratio of expenses to
average net assets of the Portfolio will not exceed 0.23%.
* Amount represents less than $0.001.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 25
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of
Smith Barney Institutional Cash Management Fund, Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Cash, Government and Municipal Portfolios
of Smith Barney Institutional Cash Management Fund, Inc. as of May 31, 1999, and
the related statements of operations for the year then ended, the statements of
changes in net assets for each of the years in the two-year period then ended
and financial highlights for each of the years in the three-year period then
ended and for the period from June 16, 1995 (commencement of operations) to May
31, 1996. 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
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1999, by correspondence with the custodian. As to securities sold or
purchased but not yet delivered or received, we performed other appropriate
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Cash, Government and Municipal Portfolios of Smith Barney Institutional Cash
Management Fund, Inc, as of May 31, 1999, the results of their operations for
the year then ended, the changes in their net assets for each of the years in
the two-year period then ended and financial highlights for each of the years in
the three-year period then ended and for the period from June 16, 1995 to May
31, 1996, in conformity with generally accepted accounting principles.
/s/ KPMG LLP
New York, New York
July 15, 1999
- --------------------------------------------------------------------------------
26 1999 Annual Report to Shareholders
<PAGE>
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes the Fund hereby designates for the fiscal year ended
May 31, 1999:
-- 100.00% of the dividends paid by the Municipal Portfolio from net
investment income as tax-exempt for regular Federal income tax
purposes.
A total of 39.26% of the dividends paid by the Government Portfolio from net
investment income are derived from Federal obligations and may be exempt from
taxation at the state level.
- --------------------------------------------------------------------------------
Smith Barney Institutional Cash Management Fund, Inc. 27
<PAGE>
Directors
Paul R. Ades
Herbert Barg
Dwight B. Crane
Frank G. Hubbard
Heath B. McLendon, Chairman
Jerome Miller
Ken Miller
John F. White, Emeritus
Officers
Heath B. McLendon
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Phyllis Zahorodny
Vice President and
Investment Officer
Joseph P. Deane
Vice President and
Investment Officer
Joseph Benevento
Vice President and
Investment Officer
Irving P. David
Controller
Christina T. Sydor
Secretary
Investment Manager
SSBC Fund Management Inc.
Distributor
CFBDS, Inc.
Custodian
PNC Bank, N.A.
Shareholder
Servicing Agent
First Data Investor Services Group, Inc.
P.O. Box 9134
Boston, MA 02205-9134
This report is submitted for the general information of the shareholders of
Smith Barney Institutional Cash Management 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.
Salomon Smith Barney is a service mark of Salomon Smith Barney Inc.
Smith Barney
Institutional Cash
Management
Fund, Inc.
388 Greenwich Street, MF-2
New York, New York 10013
www.smithbarney.com
FD2405 7/99
