Western Asset Municipal High Income Fund (MHF) N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-05497

Western Asset Municipal High Income Fund Inc.

(Exact name of registrant as specified in charter)

620 Eighth Avenue, 47^th Floor, New York, NY 10018

(Address of principal executive offices) (Zip code)

George P. Hoyt.

Franklin Templeton

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

Registrant’s telephone number, including area code: (888) 777-0102

Date of fiscal year end: October 31

Date of reporting period: April 30, 2022

ITEM 1. REPORT TO STOCKHOLDERS.

The Semi-Annual Report to Stockholders is filed herewith.

Semi-Annual Report April 30, 2022

WESTERN ASSET

MUNICIPAL HIGH INCOME

FUND INC. (MHF)

INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

What’s inside
Letter from the chairman	III
Performance review	IV
Fund at a glance	1
Schedule of investments	2
Statement of assets and liabilities	19
Statement of operations	20
Statements of changes in net assets	21
Financial highlights	22
Notes to financial statements	23
Additional shareholder information	32
Dividend reinvestment plan	33

Fund objective

The Fund seeks high current income exempt from federal income taxes.

The Fund seeks to achieve its investment objective by investing primarily in intermediate-and long-term municipal debt securities issued by state and local governments (“municipal obligations”). However, the Fund may invest in municipal obligations of any maturity. The Fund may invest up to 100% of its assets in municipal obligations rated below investment grade (commonly referred to as “junk bonds”).

   II  Western Asset Municipal High Income Fund Inc.

Letter from the chairman

Dear Shareholder,

We are pleased to provide the semi-annual report of Western Asset Municipal High Income Fund Inc. for the six-month reporting period ended April 30, 2022. Please read on for Fund performance information during the Fund’s reporting period.

As always, we remain committed to providing you with excellent service and a full spectrum of investment choices. We also remain committed to supplementing the support you receive from your financial advisor. One way we accomplish this is through our website, www.franklintempleton.com. Here you can gain immediate access to market and investment information, including:

• Fund prices and performance,

• Market insights and commentaries from our portfolio managers, and

• A host of educational resources.

We look forward to helping you meet your financial goals.

Sincerely,

Jane Trust, CFA

Chairman, President and Chief Executive Officer

May 31, 2022

Western Asset Municipal High Income Fund Inc.    III 

Performance review

For the six months ended April 30, 2022, Western Asset Municipal High Income Fund Inc. returned -7.31% based on its net asset value (“NAV”)ⁱ and -19.20% based on its New York Stock Exchange (“NYSE”) market price per share. The Fund’s unmanaged benchmark, the Bloomberg Municipal Bond Indexⁱⁱ, returned -7.90% for the same period. The Lipper High Yield Municipal Debt Closed-End Funds Category Averageⁱⁱⁱ returned -14.39% over the same time frame. Please note that Lipper performance returns are based on each fund’s NAV.

Certain investors may be subject to the federal alternative minimum tax, and state and local taxes will apply. Capital gains, if any, are fully taxable. Please consult your personal tax or legal adviser.

The Fund has a practice of seeking to maintain a relatively stable level of distributions to shareholders. This practice has no impact on the Fund’s investment strategy and may reduce the Fund’s NAV. The Fund’s manager believes the practice helps maintain the Fund’s competitiveness and may benefit the Fund’s market price and premium/discount to the Fund’s NAV.

During this six-month period, the Fund made distributions to shareholders totaling $0.12 per share. As of April 30, 2022, the Fund estimates that 97% of the distributions were sourced from net investment income and 3% constituted a

return of capital.* The performance table shows the Fund’s six-month total return based on its NAV and market price as of April 30, 2022. Past performance is no guarantee of future results.

Performance Snapshot as of April 30, 2022 (unaudited)
Price Per Share	6-Month Total Return**
$ 7.31 (NAV)		-7.31	%†
$ 6.71 (Market Price)		-19.20	%‡

All figures represent past performance and are not a guarantee of future results. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.

** Total returns are based on changes in NAV or market price, respectively. Returns reflect the deduction of all Fund expenses, including management fees, operating expenses, and other Fund expenses. Returns do not reflect the deduction of brokerage commissions or taxes that investors may pay on distributions or the sale of shares.

† Total return assumes the reinvestment of all distributions, including returns of capital, if any, at NAV.

‡ Total return assumes the reinvestment of all distributions, including returns of capital, if any, in additional shares in accordance with the Fund’s Dividend Reinvestment Plan.

^*  These estimates are not for tax purposes. The Fund will issue a Form 1099 with final composition of the distributions for tax purposes after year-end. A return of capital is not taxable and results in a reduction in the tax basis of a shareholder’s investment. For more information about a distribution’s composition, please refer to the Fund’s distribution press release or, if applicable, the Section 19 notice located in the press release section of our website, www.franklintempleton.com.

    IV  Western Asset Municipal High Income Fund Inc.

Performance review (cont’d)

Looking for additional information?

The Fund is traded under the symbol “MHF” and its closing market price is available in most newspapers under the NYSE listings. The daily NAV is available online under the symbol “XMHFX” on most financial websites. Barron’s and The Wall Street Journal’s Monday edition both carry closed-end fund tables that provide additional information. In addition, the Fund issues a quarterly press release that can be found on most major financial websites as well as www.franklintempleton.com.

In a continuing effort to provide information concerning the Fund, shareholders may call 1-888-777-0102 (toll free), Monday through Friday from 8:00 a.m. to 5:30 p.m. Eastern Time, for the Fund’s current NAV, market price and other information.

Thank you for your investment in Western Asset Municipal High Income Fund Inc. As always, we appreciate that you have chosen us to manage your assets and we remain focused on achieving the Fund’s investment goals.

Sincerely,

Jane Trust, CFA

Chairman, President and Chief Executive Officer

May 31, 2022

RISKS: The Fund is a diversified closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance that the Fund will achieve its investment objective. The Fund’s common stock is traded on the New York Stock Exchange. Similar to stocks, the Fund’s share price will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment. Shares of closed-end funds often trade at a discount to their net asset value. Diversification does not assure against market loss. The Fund’s investments are subject to a number of risks, such as credit risk, inflation risk and interest rate risk. High-yield bonds, known as “junk bonds,” involve greater credit and liquidity risks than investment grade bonds. As interest rates rise, bond prices fall, reducing the value of the Fund’s holdings. Municipal securities purchased by the Fund may be adversely affected by changes in the financial condition of municipal issuers and insurers, regulatory and political developments, uncertainties and public perceptions, and other factors. The Fund may invest in securities of other investment companies. To the extent it does, Fund stockholders will indirectly pay a portion of the operating costs of such companies, in addition to the expenses that the Fund bears directly in connection with its own operation. Investing in securities issued by other investment companies, including exchange-traded funds (“ETFs”) that invest primarily in municipal securities, involves risks

Western Asset Municipal High Income Fund Inc.    V 

similar to those of investing directly in the securities in which those investment companies invest. The Fund may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. The Fund may also invest in money market funds, including funds affiliated with the Fund’s manager and subadviser.

All investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results. All index performance reflects no deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.

ⁱ  Net asset value (“NAV”) is calculated by subtracting total liabilities, including liabilities associated with financial leverage (if any), from the closing value of all securities held by the Fund (plus all other assets) and dividing the result (total net assets) by the total number of the common shares outstanding. The NAV fluctuates with changes in the market prices of securities in which the Fund has invested. However, the price at which an investor may buy or sell shares of the Fund is the Fund’s market price as determined by supply of and demand for the Fund’s shares.

ⁱⁱ  The Bloomberg Municipal Bond Index is a market value weighted index of investment grade municipal bonds with maturities of one year or more.

ⁱⁱⁱ  Lipper, Inc., a wholly-owned subsidiary of Refinitiv, provides independent insight on global collective investments. Returns are based on the six-month period ended April 30, 2022, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 16 funds in the Fund’s Lipper category.

    VI  Western Asset Municipal High Income Fund Inc.

Fund at a glance^† (unaudited)

Investment breakdown (%) as a percent of total investments

† The bar graph above represents the composition of the Fund’s investments as of April 30, 2022 and October 31, 2021. The Fund is actively managed. As a result, the composition of the Fund’s investments is subject to change at any time.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    1 

Schedule of investments (unaudited)

April 30, 2022

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
Municipal Bonds — 93.0%
Alabama — 5.1%
Jefferson County, AL, Sewer Revenue:
Convertible CAB, Subordinated Lien, Warrants, Step bond, Series F, Refunding (0.000% to 10/1/23 then 7.900%)		0.000	%		10/1/50	$	3,020,000	$	3,061,082
Senior Lien, Warrants, Series A, Refunding, AGM		5.500	%		10/1/53		400,000		422,636
Subordinated Lien, Warrants, Series D, Refunding		6.000	%		10/1/42		1,120,000		1,228,530
Subordinated Lien, Warrants, Series D, Refunding		6.500	%		10/1/53		3,000,000		3,309,207
Total Alabama									8,021,455
Alaska — 0.9%
Anchorage, AK, Port Revenue, Series A		5.000	%		12/1/50		250,000		265,090	(a)
Northern Tobacco Securitization Corp., AK, Revenue, Asset Backed Senior Bonds, Class 1, Series A, Refunding		4.000	%		6/1/50		250,000		232,059
Northern Tobacco Securitization Corp., AK, Tobacco Settlement Revenue:
Asset Backed Senior Bonds, Class 1, Series A		4.000	%		6/1/36		400,000		403,287
Asset Backed Senior Bonds, Class 2, Series B-1		4.000	%		6/1/50		500,000		455,158
Total Alaska									1,355,594
Arizona — 3.8%
Arizona, AZ, IDA Revenue, Doral Academy Of Northern Nevada Project, Series A, Refunding		4.000	%		7/15/51		500,000		427,026	(b)
La Paz County, AZ, IDA Revenue, Charter School Solutions, Harmony Public School Project, Series A		5.000	%		2/15/36		1,000,000		1,029,807	(b)
Maricopa County, AZ, IDA Revenue, Legacy Traditional Schools Project, Series 2019, Refunding		5.000	%		7/1/49		500,000		511,136	(b)
Navajo Nation, AZ, Revenue, Series A, Refunding		5.500	%		12/1/30		190,000		199,158	(b)
Phoenix, AZ, IDA Revenue:
Basis School Inc., Refunding		5.000	%		7/1/35		1,000,000		1,025,778	(b)
Great Hearts Academies, Refunding		5.000	%		7/1/41		1,200,000		1,221,885
Salt Verde, AZ, Financial Corp., Natural Gas Revenue, Series 2007		5.000	%		12/1/37		1,500,000		1,643,199
Total Arizona									6,057,989

See Notes to Financial Statements.

    2  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
California — 10.2%
Alameda, CA, Corridor Transportation Authority Revenue, Second Subordinated Lien, Series B, Refunding		5.000	%		10/1/34	$	500,000	$	528,401
Anaheim, CA, Public Financing Authority Lease Revenue, Series A, Refunding		5.000	%		5/1/46		2,000,000		2,105,237	(c)
California State Community Housing Agency, Essential Housing Revenue, Stoneridge Apartments, Series A		4.000	%		2/1/56		500,000		403,980	(b)
California State MFA Revenue:
Senior Lien, LINXS APM Project, Series A		5.000	%		12/31/43		500,000		522,986	(a)
Senior Lien, LINXS APM Project, Series A		5.000	%		12/31/47		200,000		207,924	(a)
California State PCFA Water Furnishing Revenue, San Diego County Water Authority Desalination Project, Refunding		5.000	%		7/1/39		700,000		749,415	(b)
California State Public Finance Authority Revenue:
ENSO Village Project, Green Bond, Series A		5.000	%		11/15/36		250,000		256,091
ENSO Village Project, Green Bond, Series B-3		2.125	%		11/15/27		250,000		237,324	(b)
California Statewide CDA Revenue:
Provident Group-Pomona Properties LLC, Series A		5.600	%		1/15/36		500,000		505,607	(b)
Provident Group-Pomona Properties LLC, Series A		5.750	%		1/15/45		360,000		363,511	(b)
California Statewide CDA, Community Improvement Authority Revenue, Renaissance at City Center, Series A		5.000	%		7/1/51		175,000		170,275
Golden State, CA, Tobacco Securitization Corp. Revenue, Tobacco Settlement Funded, Series A-1, Refunding		5.250	%		6/1/47		125,000		125,380	(c)
Inland Valley, CA, Development Agency, Successor Agency Tax Allocation Revenue, Series A, Refunding		5.000	%		9/1/44		500,000		520,511
Mountain House Public Financing Authority, CA, Utility Systems Revenue, Green Bond, Series A, BAM		4.000	%		12/1/50		750,000		752,375
M-S-R Energy Authority, CA, Natural Gas Revenue:
Series B		6.500	%		11/1/39		1,000,000		1,243,167
Series C		7.000	%		11/1/34		2,000,000		2,494,222
Series C		6.500	%		11/1/39		2,000,000		2,486,334

See Notes to Financial Statements.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    3 

Schedule of investments (unaudited) (cont’d)

April 30, 2022

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
California — continued
Redding, CA, Redevelopment Agency, Tax Allocation, Shastec Redevelopment Project		5.000	%		9/1/29	$	600,000	$	601,072
River Islands, CA, Public Financing Authority, Special Tax Revenue, Community Facilities District No. 2003-1, Refunding		5.500	%		9/1/45		620,000		635,312
San Francisco, CA, City & County Airport Commission, International Airport Revenue, Series A		5.000	%		5/1/49		1,000,000		1,059,401	(a)
Tobacco Securitization Authority of Southern California Revenue, Asset Backed Refunding, San Diego County Tobacco Asset Securitization Corporation, Class 1, Series A		5.000	%		6/1/48		200,000		210,551
Total California									16,179,076
Colorado — 2.6%
Aristation Metropolitan District, CO, GO, Convertible Unlimited & Special Revenue, Refunding and Improvements		5.000	%		12/1/38		500,000		506,383
Colorado State Health Facilities Authority Revenue, Commonspirit Health Project, Series A-2		4.000	%		8/1/49		500,000		473,932
Colorado State High Performance Transportation Enterprise Revenue, C-470 Express Lanes		5.000	%		12/31/51		150,000		155,124
North Range, CO, Metropolitan District #2, GO, Series A, Refunding		5.625	%		12/1/37		500,000		512,023
Public Authority for Colorado Energy, Natural Gas Purchase Revenue, Series 2008		6.125	%		11/15/23		1,830,000		1,896,223
Village Metropolitan District, CO, Limited & Special Revenue, Series 2020, Refunding and Improvements		5.000	%		12/1/40		500,000		516,091
Total Colorado									4,059,776
Connecticut — 1.1%
Connecticut State Special Tax Revenue:
Transportation Infrastructure, Series A		5.000	%		1/1/37		500,000		547,034
Transportation Infrastructure, Series A		5.000	%		5/1/38		550,000		614,592
Connecticut State, GO, Series A		4.000	%		4/15/37		600,000		621,701
Total Connecticut									1,783,327
District of Columbia — 1.3%
District of Columbia Revenue, Friendship Public Charter School Inc.		5.000	%		6/1/42		2,000,000		2,035,316	(c)

See Notes to Financial Statements.

    4  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
Florida — 3.5%
Broward County, FL, Port Facilities Revenue:
Senior Bonds, Series B		4.000	%		9/1/44	$	1,250,000	$	1,257,609	(a)
Senior Bonds, Series B		4.000	%		9/1/49		500,000		499,371	(a)
Florida State Development Finance Corp., Educational Facilities Revenue:
Mater Academy Projects, Series A		5.000	%		6/15/40		650,000		669,370
Renaissance Charter School Inc. Projects, Series A		6.000	%		6/15/35		250,000		262,259	(b)
Renaissance Charter School Inc. Projects, Series A		6.125	%		6/15/46		215,000		224,660	(b)
Florida State Mid-Bay Bridge Authority Revenue, Series A, Refunding		5.000	%		10/1/28		500,000		527,712
Miami-Dade County, FL, Aviation Revenue, Series A, Refunding		5.000	%		10/1/49		650,000		680,803	(a)
Palm Beach County, FL, Health Facilities Authority Revenue:
Sinai Residences Boca Raton Project, Series A		7.500	%		6/1/49		400,000		409,887
Toby & Leon Cooperman Sinai Residences of Boca Raton Expansion, Refunding		4.000	%		6/1/41		100,000		92,192
Toby & Leon Cooperman Sinai Residences of Boca Raton Expansion, Series A		5.000	%		6/1/55		350,000		356,037
Reunion, FL, East Community Development District, Special Assessment Bond, Series A-2		7.375	%		5/1/33		285,000		3	*(d)
Santa Rosa, FL, Bay Bridge Authority Revenue		6.250	%		7/1/28		641,151		596,270	*(d)
Total Florida									5,576,173
Georgia — 0.4%
Georgia State Municipal Electric Authority Power Revenue:
Plant Vogtle Units 3 & 4 Project, Series A		5.000	%		1/1/56		250,000		265,155
Project One Subordinated, Series A		5.000	%		1/1/45		250,000		273,442
Main Street Natural Gas Inc., GA, Gas Project Revenue, Series A		5.000	%		5/15/43		150,000		157,749
Total Georgia									696,346
Illinois — 14.8%
Chicago, IL, Board of Education, Dedicated Capital Improvement, Special Tax Revenue, Series 2018		5.000	%		4/1/42		1,000,000		1,040,756
Chicago, IL, Board of Education, GO:
Dedicated, Series A		5.000	%		12/1/47		1,000,000		1,033,801
Series A		5.000	%		12/1/40		1,250,000		1,305,470

See Notes to Financial Statements.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    5 

Schedule of investments (unaudited) (cont’d)

April 30, 2022

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
Illinois — continued
Series C, Refunding, AGM		5.000	%		12/1/32	$	250,000	$	278,021
Chicago, IL, GO:
Series A		5.000	%		1/1/44		500,000		524,528
Series A, Refunding		5.000	%		1/1/28		500,000		532,948
Series A, Refunding		6.000	%		1/1/38		300,000		328,513
Series C, Refunding		5.000	%		1/1/25		500,000		523,825
Chicago, IL, O’Hare International Airport Revenue:
Senior Lien, Series G		5.000	%		1/1/42		500,000		523,601	(a)
Series A, Refunding		5.000	%		1/1/31		1,500,000		1,560,147	(a)
Chicago, IL, Transit Authority, Sales Tax Receipts Revenue:
Second Lien		5.000	%		12/1/51		1,000,000		1,066,274
Second Lien, Series A, Refunding		5.000	%		12/1/55		500,000		534,749
Chicago, IL, Wastewater Transmission Revenue, Second Lien, Series B, Refunding		5.000	%		1/1/38		500,000		537,375
Chicago, IL, Waterworks Revenue:
Second Lien, Series 2017, Refunding		5.000	%		11/1/29		500,000		552,000
Second Lien, Series 2017-2, Refunding, AGM		5.000	%		11/1/32		1,260,000		1,395,084
Illinois State Finance Authority, Revenue, Franciscan Communities Inc.:
Series A, Refunding		5.250	%		5/15/47		130,000		134,033	(c)
Series A, Refunding		5.250	%		5/15/47		870,000		878,252
Illinois State Sports Facilities Authority Revenue, State Tax Supported, Series 2019, Refunding, BAM		5.000	%		6/15/30		250,000		278,230
Illinois State University, Auxiliary Facilities System Revenue, Series A, Refunding, AGM		5.000	%		4/1/28		100,000		110,926
Illinois State, GO:
Series 2016, Refunding		5.000	%		2/1/29		300,000		319,094
Series A		5.000	%		3/1/37		1,250,000		1,329,417
Series A		5.000	%		3/1/46		500,000		523,584
Series A, Refunding		5.000	%		10/1/29		1,100,000		1,189,395
Series A, Refunding		5.000	%		10/1/30		550,000		592,202
Series B, Refunding		5.000	%		9/1/27		400,000		431,334
Series D		5.000	%		11/1/27		1,150,000		1,241,508
Metropolitan Pier & Exposition Authority, IL, Revenue:
McCormick Place Expansion Project, Series A		5.000	%		6/15/57		350,000		361,359

See Notes to Financial Statements.

    6  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
Illinois — continued
McCormick Place Expansion Project, Series A, Refunding		4.000	%		12/15/42	$	750,000	$	705,702
McCormick Place Expansion Project, Series A, Refunding		4.000	%		6/15/50		1,000,000		920,659
McCormick Place Expansion Project, Series A, Refunding		5.000	%		6/15/50		250,000		259,677
McCormick Place Expansion Project, Series B, Refunding		5.000	%		6/15/42		1,250,000		1,312,935
Regional Transportation Authority, IL, GO, Series A, Refunding, NATL		6.000	%		7/1/29		930,000		1,072,146
Total Illinois									23,397,545
Indiana — 2.0%
Indiana State Finance Authority Revenue:
BHI Senior Living Inc., Series A, Refunding		4.000	%		11/15/41		500,000		453,195
Marion General Hospital, Series A		4.000	%		7/1/45		200,000		195,181
Private Activity Ohio River Bridges East End Crossing Project, Series A		5.000	%		7/1/48		2,000,000		2,055,690	(a)(c)
Valparaiso, IN, Exempt Facilities Revenue, Pratt Paper LLC Project		7.000	%		1/1/44		500,000		524,744	(a)
Total Indiana									3,228,810
Iowa — 0.5%
Iowa State Finance Authority, Midwestern Disaster Area Revenue, Iowa Fertilizer Company Project, Refunding		5.000	%		12/1/42		750,000		770,401	(e)(f)(g)
Kentucky — 1.9%
Kentucky State PEA, Gas Supply Revenue:
Series A		4.000	%		6/1/26		1,500,000		1,536,511	(e)(g)
Series C		4.000	%		6/1/25		1,400,000		1,420,334	(e)(g)
Total Kentucky									2,956,845
Louisiana — 1.2%
Louisiana State PFA, Lease Revenue:
Provident Group, Flagship Properties		5.000	%		7/1/42		700,000		742,702
Provident Group, Flagship Properties, Series A		4.000	%		7/1/49		500,000		499,978
St. John the Baptist Parish, LA, State Revenue:
Marathon Oil Corp. Project, Refunding		2.200	%		7/1/26		250,000		234,917	(e)(g)
Marathon Oil Corp. Project, Series B-2,
Refunding		2.375	%		7/1/26		400,000		378,538	(e)(g)
Total Louisiana									1,856,135

See Notes to Financial Statements.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    7 

Schedule of investments (unaudited) (cont’d)

April 30, 2022

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
Maryland — 0.7%
Maryland State EDC Revenue:
Morgan State University Project		4.250	%		7/1/50	$	350,000	$	325,528
Seagirt Marine Terminal Project, Series A		5.000	%		6/1/44		400,000		428,430	(a)
Maryland State Health & Higher EFA Revenue, Frederick Health System		4.000	%		7/1/40		300,000		298,715
Total Maryland									1,052,673
Massachusetts — 0.5%
Massachusetts State DFA Revenue:
Wellforce Issue, Series A, Refunding		5.000	%		7/1/36		500,000		544,032
Wellforce Issue, Series A, Refunding		5.000	%		7/1/44		250,000		268,211
Total Massachusetts									812,243
Michigan — 0.7%
Detroit, MI, Downtown Development Authority Revenue, Catalyst Development, Series A, Refunding, AGM		5.000	%		7/1/43		250,000		260,814
Michigan State Finance Authority Revenue:
Henry Ford Health System, Series A		4.000	%		11/15/50		400,000		388,987
Tobacco Settlement Asset Backed Senior Bonds, Series A, Refunding		4.000	%		6/1/49		100,000		95,379
Tobacco Settlement Asset Backed Senior Bonds, Series B-1, Refunding		5.000	%		6/1/49		100,000		103,955
Michigan State Strategic Fund Limited Obligation Revenue, I-75 Improvement Project		5.000	%		12/31/43		250,000		256,453	(a)
Total Michigan									1,105,588
Missouri — 1.8%
Missouri State HEFA Revenue, Senior Living Facilities, Lutheran Senior Services, Refunding		5.000	%		2/1/44		750,000		762,470
St. Louis County, MO, IDA, Senior Living Facilities Revenue, Friendship Village of Sunset Hills, Series A		5.875	%		9/1/43		2,000,000		2,040,872
Total Missouri									2,803,342
Nebraska — 2.1%
Central Plains Energy Project, NE, Gas Project Revenue, Project #3, Series A, Refunding		5.000	%		9/1/42		3,340,000		3,372,924

See Notes to Financial Statements.

    8  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
Nevada — 0.5%
State of Nevada Department of Business & Industry Revenue:
Charter School Lease Revenue, Somerset Academy, Series A		5.000	%		12/15/35	$	300,000	$	310,609	(b)
Charter School Lease Revenue, Somerset Academy, Series A		5.125	%		12/15/45		500,000		511,974	(b)
Total Nevada									822,583
New Jersey — 8.9%
Gloucester County, NJ, PCFA Revenue, Keystone Urban Renewal, Logan Generating, Series A, Refunding		5.000	%		12/1/24		265,000		275,177	(a)(c)
New Jersey State EDA Revenue:
Private Activity-The Goethals Bridge Replacement Project		5.375	%		1/1/43		1,500,000		1,542,212	(a)
Transit Transportation Project, Series A		5.000	%		11/1/32		1,500,000		1,628,995
New Jersey State EDA, Special Facility Revenue, Port Newark Container Terminal LLC Project, Refunding		5.000	%		10/1/37		125,000		132,020	(a)
New Jersey State Health Care Facilities Financing Authority Revenue, Hackensack Meridian Health, Series A, Refunding		5.000	%		7/1/38		100,000		108,599
New Jersey State Higher Education, Student Assistance Authority Revenue, Subordinated, Series 1B		5.000	%		12/1/44		640,000		645,889	(a)
New Jersey State Transportation Trust Fund Authority Revenue:
Transportation Program, Series AA		5.250	%		6/15/32		4,720,000		5,004,459
Transportation Program, Series BB		5.000	%		6/15/44		1,000,000		1,047,689
Transportation System, Series A, Refunding		5.000	%		12/15/28		1,000,000		1,096,150
New Jersey State, GO, COVID-19 Emergency, Series A		5.000	%		6/1/28		1,250,000		1,382,702
Salem County, NJ, PCFA Revenue, Chambers Project, Series A, Refunding		5.000	%		12/1/23		1,020,000		1,043,875	(a)(c)
Tobacco Settlement Financing Corp., NJ, Revenue, Series A, Refunding		5.250	%		6/1/46		150,000		160,273
Total New Jersey									14,068,040

See Notes to Financial Statements.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    9 

Schedule of investments (unaudited) (cont’d)

April 30, 2022

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
New Mexico — 0.4%
Santa Fe, NM, Retirement Facilities Revenue:
EL Castillo Retirement Residences Project, Series A		5.000	%		5/15/49	$	250,000	$	254,893
EL Castillo Retirement Residences Project, Series B		2.625	%		5/15/25		400,000		393,968
Total New Mexico									648,861
New York — 6.0%
Brookhaven, NY, Local Development Corp., Long Island Community Hospital Project, Series A		5.000	%		10/1/34		735,000		792,195
MTA, NY, Transportation Revenue:
Green Bonds, Series A-2		5.000	%		11/15/24		100,000		105,368
Green Bonds, Series D-1		5.000	%		11/15/43		250,000		263,198
Green Bonds, Series D-3		4.000	%		11/15/49		250,000		237,970
Green Bonds, Series E, Refunding		5.000	%		11/15/30		250,000		274,444
Green Bonds, Series E, Refunding		4.000	%		11/15/45		250,000		241,366
Series A-2		5.000	%		5/15/30		400,000		435,847	(e)(g)
New York City, NY, GO, Series F-1		4.000	%		3/1/47		750,000		750,480
New York City, NY, Industrial Development Agency Revenue, Yankee Stadium Project, Refunding		4.000	%		3/1/45		300,000		302,681
New York State Liberty Development Corp., Liberty Revenue:
3 World Trade Center Project, Class 1, Refunding		5.000	%		11/15/44		1,205,000		1,217,817	(b)
7 World Trade Center Project, Class 3, Refunding		3.500	%		9/15/52		700,000		594,307
New York State Thruway Authority General Revenue, Junior Indebtedness Obligations, Junior Lien, Series B		4.000	%		1/1/45		750,000		732,162
New York State Transportation Development Corp., Special Facilities Revenue:
Delta Air Lines Inc., LaGuardia Airport Terminals C and D Redevelopment Project		5.000	%		1/1/33		750,000		786,235	(a)
Delta Air Lines Inc., LaGuardia Airport Terminals C and D Redevelopment Project		4.375	%		10/1/45		250,000		240,139	(a)
John F. Kennedy International Airport Terminal 4 Project, Series C, Refunding		4.000	%		12/1/42		500,000		478,192
LaGuardia Airport Terminal B Redevelopment Project, Series A		5.000	%		7/1/41		300,000		309,312	(a)

See Notes to Financial Statements.

    10  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
New York — continued
LaGuardia Airport Terminal B Redevelopment Project, Series A		5.250	%		1/1/50	$	500,000	$	514,610	(a)
Port Authority of New York & New Jersey Revenue, Consolidated Series 221		4.000	%		7/15/50		750,000		718,636	(a)
Troy Capital Resource Corp., NY, Revenue, Rensselaer Polytechnic Institute Project, Series A, Refunding		4.000	%		9/1/40		500,000		492,744
Total New York									9,487,703
North Carolina — 0.3%
North Carolina State Turnpike Authority, Monroe Expressway Toll Revenue, Series A, Refunding		5.000	%		7/1/47		500,000		522,461
Ohio — 1.1%
Buckeye, OH, Tobacco Settlement Financing Authority Revenue, Senior Bonds, Series B-2, Refunding		5.000	%		6/1/55		800,000		779,240
Ohio State Air Quality Development Authority Revenue, American Electric Company Project, Series B, Refunding		2.500	%		10/1/29		350,000		324,005	(a)(e)(g)
Ohio State Private Activity Revenue, Portsmouth Bypass Project		5.000	%		6/30/53		700,000		726,097	(a)
Total Ohio									1,829,342
Oklahoma — 0.3%
Tulsa County, OK, Industrial Authority, Senior Living Community Revenue, Montereau Inc. Project, Refunding		5.250	%		11/15/37		500,000		529,431
Oregon — 0.8%
Clackamas County, OR, Hospital Facility Authority Revenue, Senior Living, Willamette View Project, Refunding		5.000	%		11/15/37		500,000		509,909
Yamhill County, OR, Hospital Authority Revenue, Friendsview Retirement Community, Series A, Refunding		5.000	%		11/15/51		725,000		687,529
Total Oregon									1,197,438
Pennsylvania — 4.3%
Allegheny County, PA, HDA Revenue, University Pittsburgh Medical Center, Series A, Refunding		4.000	%		7/15/38		350,000		352,259
Commonwealth Financing Authority, PA, Tobacco Master Settlement Payment Revenue Bonds, Series 2018		5.000	%		6/1/33		200,000		216,547

See Notes to Financial Statements.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    11 

Schedule of investments (unaudited) (cont’d)

April 30, 2022

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
Pennsylvania — continued
Cumberland County, PA, Municipal Authority Revenue:
Diakon Lutheran Social Ministries 2015, Refunding		5.000	%		1/1/28	$	45,000	$	47,860	(c)
Diakon Lutheran Social Ministries 2015, Refunding		5.000	%		1/1/28		105,000		111,673	(c)
Diakon Lutheran Social Ministries 2015, Refunding		5.000	%		1/1/28		200,000		209,836
Erie County, PA, Convention Center Authority Guaranteed Hotel Revenue, County Guaranty, Refunding		5.000	%		1/15/36		750,000		793,440
Lancaster, PA, IDA Revenue, Willow Valley Communities Project		5.000	%		12/1/49		500,000		535,133
Pennsylvania State Turnpike Commission Revenue, Subordinated, Series B, Refunding		5.000	%		6/1/39		3,170,000		3,385,741
Philadelphia, PA, Authority for IDR:
Charter School Revenue, A String Theory Charter School Project		5.000	%		6/15/40		400,000		405,022
City Service Agreement Revenue, Rebuild Project		5.000	%		5/1/38		500,000		551,732
Lease Revenue, Refunding		5.000	%		10/1/30		250,000		283,015
Total Pennsylvania									6,892,258
Puerto Rico — 2.0%
Puerto Rico Sales Tax Financing Corp., Sales Tax Revenue:
CAB, Restructured, Series A-1		0.000	%		7/1/27		240,000		205,286
CAB, Restructured, Series A-1		0.000	%		7/1/46		1,220,000		344,078
Restructured, Series A-1		4.550	%		7/1/40		50,000		50,398
Restructured, Series A-1		5.000	%		7/1/58		900,000		924,714
Restructured, Series A-2		4.329	%		7/1/40		330,000		327,074
Restructured, Series A-2A		4.550	%		7/1/40		1,380,000		1,390,991
Total Puerto Rico									3,242,541
Tennessee — 0.3%
Tennessee State Energy Acquisition Corp., Natural Gas Revenue, Series 2018		4.000	%		11/1/25		400,000		407,879	(e)(g)
Texas — 6.3%
Arlington, TX, Higher Education Finance Corp., Education Revenue, Uplift Education, Series A		5.000	%		12/1/46		200,000		205,911
Arlington, TX, Special Tax Revenue, Subordinated Lien, Series C, BAM		5.000	%		2/15/41		500,000		519,242

See Notes to Financial Statements.

    12  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
Texas — continued
Austin, TX, Airport System Revenue:
Series 2022		5.000	%		11/15/52	$	300,000	$	323,628	(a)(f)
Series B		5.000	%		11/15/39		600,000		644,331	(a)
Central Texas Regional Mobility Authority Revenue, Senior Lien, Series E		4.000	%		1/1/50		500,000		488,049
Gulf Coast, TX, IDA, Solid Waste Disposal Revenue, Citgo Petroleum Corp. Project		4.875	%		5/1/25		1,000,000		999,859	(a)
Love Field, TX, Airport Modernization Corp., General Airport Revenue:
Series 2017		5.000	%		11/1/33		20,000		21,087	(a)
Series 2017		5.000	%		11/1/36		20,000		21,041	(a)
New Hope Cultural Education Facilities Finance Corp., TX, Retirement Facility Revenue, Westminster Project		4.000	%		11/1/49		400,000		374,019
New Hope, Cultural Education Facilities Finance Corp., TX, Retirement Facility Revenue:
MRC Crestview, Refunding		5.000	%		11/15/36		550,000		593,130	(c)
Westminster Manor Project, Refunding		5.000	%		11/1/40		1,000,000		1,045,531
New Hope, Cultural Education Facilities Finance Corp., TX, Student Housing Revenue, Collegiate Housing Stephenville II LLC, Tartleton State University Project, Series A		5.000	%		4/1/39		1,165,000		1,221,417	(c)
Newark, TX, Higher Education Finance Corp., Education Revenue, TLC Academy, Series A		4.000	%		8/15/56		350,000		292,201
Tarrant County, TX, Cultural Education Facilities Finance Corp., Retirement Facility Revenue, Buckner Retirement Services Inc. Project, Refunding		5.000	%		11/15/37		700,000		753,461
Texas State, Municipal Gas Acquisition & Supply Corp. I, Gas Supply Revenue, Senior Lien, Series D		6.250	%		12/15/26		660,000		707,012
Texas State Private Activity Bond Surface Transportation Corp. Revenue:
Senior Lien, Blueridge Transportation Group LLC		5.000	%		12/31/40		1,000,000		1,050,616	(a)
Senior Lien, Blueridge Transportation Group LLC		5.000	%		12/31/50		500,000		521,244	(a)
Willacy County, TX, Jail Public Facilities Corp. Project Revenue		7.500	%		11/1/25		250,000		219,312
Total Texas									10,001,091

See Notes to Financial Statements.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    13 

Schedule of investments (unaudited) (cont’d)

April 30, 2022

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
Utah — 0.8%
Utah State Charter School Finance Authority, Charter School Revenue:
Summit Academy Inc., Series A, Refunding, UT CSCE		5.000	%		4/15/39	$	350,000	$	381,906
Syracuse Arts Academy Project, UT CSCE		5.000	%		4/15/42		250,000		261,470
Utah State Infrastructure Agency, Telecommunications Revenue, Series A		5.250	%		10/15/33		550,000		567,168
Total Utah									1,210,544
Virginia — 3.5%
Virginia State Port Authority, Port Facilities Revenue:
Series B, Refunding		5.000	%		7/1/41		250,000		264,193	(a)
Series B, Refunding		5.000	%		7/1/45		300,000		315,725	(a)
Virginia State Small Business Financing Authority Revenue:
Bon Secours Mercy Health, Series A, Refunding		4.000	%		12/1/49		400,000		391,003
National Senior Campuses, Inc., Series A, Refunding		5.000	%		1/1/34		200,000		215,886
Senior Lien, 95 Express Lanes LLC Project, Refunding		5.000	%		1/1/38		1,000,000		1,073,988	(a)
Senior Lien, Elizabeth River Crossing OpCo LLC Project		5.250	%		1/1/32		1,000,000		1,005,802	(a)
Senior Lien, Elizabeth River Crossing OpCo LLC Project		5.500	%		1/1/42		2,000,000		2,012,403	(a)
Senior Lien, I-495 HOT Lanes Project, Refunding		5.000	%		12/31/47		250,000		267,238	(a)
Total Virginia									5,546,238
Washington — 0.6%
Washington State Health Care Facilities Authority Revenue:
Commonspirit Health, Series B, Refunding		5.000	%		8/1/26		250,000		267,753	(e)(g)
Seattle Cancer Care Alliance		4.000	%		12/1/40		370,000		371,241
Seattle Cancer Care Alliance, Refunding		5.000	%		9/1/50		250,000		270,013
Total Washington									909,007
Wisconsin — 1.8%
Public Finance Authority, WI, Revenue:
Carmelite System Inc., Obligated Group, Series 2020		5.000	%		1/1/40		100,000		106,720
Celanese Project, Series B, Refunding		5.000	%		12/1/25		550,000		588,778	(a)

See Notes to Financial Statements.

    14  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
Wisconsin — continued
Church Home of Hartford Inc. Project, Refunding		5.000	%		9/1/38	$	250,000	$	253,380	(b)
Public Finance Authority, WI, Student Housing Revenue:
Appalachian State University Project, Series A, AGM		4.000	%		7/1/45		600,000		600,857
CHF Wilmington LLC, University of North Carolina at Wilmington Project, AGM		5.000	%		7/1/53		1,000,000		1,047,393
University of Hawai’i Foundation Project, Green Bonds, Series A-1		4.000	%		7/1/51		280,000		250,679	(b)
Total Wisconsin									2,847,807
Total Municipal Bonds (Cost — $147,405,774)									147,284,782
Municipal Bonds Deposited in Tender Option Bond Trust (h) —1.1%
New York — 1.1%
New York State Dormitory Authority, State Personal Income Tax Revenue, General Obligations Bonds, Series A (Cost — $1,739,930)		4.000	%		3/15/45		1,740,000		1,740,000
Total Investments before Short-Term Investments (Cost — $149,145,704)									149,024,782
Short-Term Investments — 6.3%
Municipal Bonds — 6.2%
Alabama — 0.6%
West Jefferson, AL, Solid Waste Disposal Revenue, Alabama Power Company Miller Plant Project, Series 2008		0.410	%		12/1/38		1,000,000		1,000,000	(a)(i)(j)
California — 0.3%
California State MFA Revenue, Chevron USA Inc. Project, Series A		0.300	%		11/1/35		100,000		100,000	(i)(j)
San Francisco, CA, City & County Airport Commission, International Airport Revenue, Second Series A, Refunding, LOC - Bank of America N.A.		0.420	%		5/1/30		400,000		400,000	(a)(i)(j)
Total California									500,000
Florida — 0.1%
Gainesville, FL, Industrial Development Revenue, Gainesville Hillel Inc., Series 2003, LOC - TD Bank N.A.		0.450	%		5/1/33		200,000		200,000	(i)
Massachusetts — 0.1%
Massachusetts State HEFA Revenue, Massachusetts Institute of Technology, Series J-1		0.400	%		7/1/31		185,000		185,000	(i)(j)

See Notes to Financial Statements.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    15 

Schedule of investments (unaudited) (cont’d)

April 30, 2022

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Maturity Date		Face Amount		Value
Mississippi — 1.1%
Mississippi State Business Finance Corp., Gulf Opportunity Zone, IDR:
Chevron USA Inc. Project, Series B		0.330	%		12/1/30	$	950,000	$	950,000	(i)(j)
Chevron USA Inc. Project, Series B		0.330	%		11/1/35		100,000		100,000	(i)(j)
Chevron USA Inc. Project, Series C		0.330	%		12/1/30		150,000		150,000	(i)(j)
Chevron USA Inc. Project, Series H		0.330	%		11/1/35		400,000		400,000	(i)(j)
Chevron USA Inc. Project, Series L		0.330	%		11/1/35		200,000		200,000	(i)(j)
Total Mississippi									1,800,000
New York — 1.1%
New York City, NY, GO, Subseries I-4, LOC - TD Bank N.A.		0.320	%		4/1/36		500,000		500,000	(i)(j)
New York State Energy Research & Development Authority Facilities Revenue, Consolidated Edison Co. of New York Inc. Project, Subseries A-2, LOC - Bank of Nova Scotia		0.420	%		6/1/36		500,000		500,000	(a)(i)(j)
New York State HFA Revenue, 42nd & 10th Housing, Series A, LIQ - FHLMC		0.440	%		11/1/41		700,000		700,000	(a)(i)(j)
Total New York									1,700,000
Oregon — 0.3%
Oregon State Facilities Authority Revenue, Peacehealth, Series B, Refunding, LOC - TD Bank N.A.		0.320	%		8/1/34		400,000		400,000	(i)(j)
Pennsylvania — 0.1%
Philadelphia, PA, Authority for IDR, Gift of Life Donor Program Project, LOC - TD Bank N.A.		0.440	%		12/1/34		100,000		100,000	(i)(j)
Texas — 0.2%
Lower Neches Valley Authority, TX, Industrial Development Corp. Revenue, ExxonMobil Corp., Refunding		0.320	%		5/1/46		300,000		300,000	(i)(j)
Utah — 2.3%
Murray City, UT, Hospital Revenue, IHC Health Services Inc., Series B, , SPA - JPMorgan Chase & Co.		0.310	%		5/15/37		2,300,000		2,300,000	(i)(j)
Utah County, UT, Hospital Revenue, IHC Health Services Inc., Series C, SPA - TD Bank N.A.		0.300	%		5/15/58		1,400,000		1,400,000	(i)(j)
Total Utah									3,700,000
Total Municipal Bonds (Cost — $9,885,000)									9,885,000

See Notes to Financial Statements.

    16  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

Western Asset Municipal High Income Fund Inc.

(Percentages shown based on Fund net assets)

Security	Rate			Shares		Value
Money Market Funds — 0.1%
Western Asset Premier Institutional Government Reserves, Premium Shares (Cost — $75,976)		0.198	%		75,976	$	75,976	(k)
Total Short-Term Investments (Cost — $9,960,976)							9,960,976
Total Investments — 100.4% (Cost — $159,106,680)							158,985,758
TOB Floating Rate Notes — (0.8)%							(1,305,000	)
Other Assets in Excess of Other Liabilities — 0.4%							615,540
Total Net Assets — 100.0%						$	158,296,298

* Non-income producing security.

^(a)  Income from this issue is considered a preference item for purposes of calculating the alternative minimum tax (“AMT”).

^(b)  Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Directors.

^(c)  Pre-Refunded bonds are generally escrowed with U.S. government obligations and/or U.S. government agency securities.

^(d)  The coupon payment on this security is currently in default as of April 30, 2022.

^(e)  Maturity date shown represents the mandatory tender date.

^(f)  Securities traded on a when-issued or delayed delivery basis.

^(g)  Variable rate security. Interest rate disclosed is as of the most recent information available. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.

^(h)  Represents securities deposited into a special purpose entity, referred to as a Tender Option Bond (“TOB”) trust (Note 1).

⁽ⁱ⁾  Variable rate demand obligations (“VRDOs”) have a demand feature under which the Fund can tender them back to the issuer or liquidity provider on no more than 7 days notice. The interest rate generally resets on a daily or weekly basis and is determined on the specific interest rate reset date by the remarketing agent, pursuant to a formula specified in official documents for the VRDO, or set at the highest rate allowable as specified in official documents for the VRDO. VRDOs are benchmarked to the Securities Industry and Financial Markets Association (“SIFMA”) Municipal Swap Index. The SIFMA Municipal Swap Index is compiled from weekly interest rate resets of tax-exempt VRDOs reported to the Municipal Securities Rulemaking Board’s Short-term Obligation Rate Transparency System.

^(j)  Maturity date shown is the final maturity date. The security may be sold back to the issuer before final maturity.

^(k)  In this instance, as defined in the Investment Company Act of 1940, an “Affiliated Company” represents Fund ownership of at least 5% of the outstanding voting securities of an issuer, or a company which is under common ownership or control with the Fund. At April 30, 2022, the total market value of investments in Affiliated Companies was $75,976 and the cost was $75,976 (Note 7).

See Notes to Financial Statements.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    17 

Schedule of investments (unaudited) (cont’d)

April 30, 2022

Western Asset Municipal High Income Fund Inc.

Abbreviation(s) used in this schedule:
AGM	— Assured Guaranty Municipal Corporation — Insured Bonds
BAM	— Build America Mutual — Insured Bonds
CAB	— Capital Appreciation Bonds
CDA	— Communities Development Authority
CSCE	— Charter School Credit Enhancement
DFA	— Development Finance Agency
EDA	— Economic Development Authority
EDC	— Economic Development Corporation
EFA	— Educational Facilities Authority
FHLMC	— Federal Home Loan Mortgage Corporation
GO	— General Obligation
HDA	— Housing Development Authority
HEFA	— Health & Educational Facilities Authority
HFA	— Housing Finance Agency
IDA	— Industrial Development Authority
IDR	— Industrial Development Revenue
LIQ	— Liquidity Facility
LOC	— Letter of Credit
MFA	— Municipal Finance Authority
MTA	— Metropolitan Transportation Authority
NATL	— National Public Finance Guarantee Corporation — Insured Bonds
PCFA	— Pollution Control Financing Authority
PEA	— Public Energy Authority
PFA	— Public Facilities Authority
SPA	— Standby Bond Purchase Agreement — Insured Bonds

See Notes to Financial Statements.

    18  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

Statement of assets and liabilities (unaudited)

April 30, 2022

Assets:
Investments in unaffiliated securities, at value (Cost — $159,030,704)	$	158,909,782
Investments in affiliated securities, at value (Cost — $75,976)		75,976
Receivable for securities sold		3,955,970
Interest receivable		2,281,204
Dividends receivable from affiliated investments		6
Prepaid expenses		328
Total Assets		165,223,266
Liabilities:
Payable for securities purchased		5,045,783
TOB Floating Rate Notes (Note 1)		1,305,000
Distributions payable		428,694
Investment management fee payable		72,634
Interest expense payable		1,868
Directors’ fees payable		74
Accrued expenses		72,915
Total Liabilities		6,926,968
Total Net Assets	$	158,296,298
Net Assets:
Par value ($0.01 par value; 21,651,223 shares issued and outstanding; 500,000,000 shares authorized)	$	216,512
Paid-in capital in excess of par value		163,604,428
Total distributable earnings (loss)		(5,524,642)
Total Net Assets	$	158,296,298
Shares Outstanding		21,651,223
Net Asset Value		$7.31

See Notes to Financial Statements.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    19 

Statement of operations (unaudited)

For the Six Months Ended April 30, 2022

Investment Income:
Interest	$	3,129,868
Dividends from affiliated investments		14
Total Investment Income		3,129,882
Expenses:
Investment management fee (Note 2)		462,493
Transfer agent fees		29,474
Directors’ fees		28,540
Audit and tax fees		22,844
Legal fees		15,655
Fund accounting fees		12,774
Stock exchange listing fees		6,199
Interest expense (Note 1)		5,361
Shareholder reports		5,214
Insurance		483
Custody fees		450
Miscellaneous expenses		3,288
Total Expenses		592,775
Less: Fee waivers and/or expense reimbursements (Note 2)		(14)
Net Expenses		592,761
Net Investment Income		2,537,121
Realized and Unrealized Loss on Investments (Notes 1 and 3):
Net Realized Loss From Unaffiliated Investment Transactions		(662,221)
Change in Net Unrealized Appreciation (Depreciation) From Unaffiliated Investments		(14,358,012)
Net Loss on Investments		(15,020,233)
Decrease in Net Assets From Operations	$	(12,483,112)

See Notes to Financial Statements.

    20  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

Statements of changes in net assets

For the Six Months Ended April 30, 2022 (unaudited) and the Year Ended October 31, 2021	2022		2021
Operations:
Net investment income	$	2,537,121	$	5,530,560
Net realized gain (loss)		(662,221)		658,165
Change in net unrealized appreciation (depreciation)		(14,358,012)		2,769,633
Increase (Decrease) in Net Assets From Operations		(12,483,112)		8,958,358
Distributions to Shareholders From (Note 1):
Total distributable earnings		(2,615,314)		(5,659,997)
Decrease in Net Assets From Distributions to Shareholders		(2,615,314)		(5,659,997)
Fund Share Transactions:
Reinvestment of distributions (7,553 and 10,736 shares issued, respectively)		60,893		88,019
Increase in Net Assets From Fund Share Transactions		60,893		88,019
Increase (Decrease) in Net Assets		(15,037,533)		3,386,380
Net Assets:
Beginning of period		173,333,831		169,947,451
End of period	$	158,296,298	$	173,333,831

See Notes to Financial Statements.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    21 

Financial highlights

For a share of capital stock outstanding throughout each year ended October 31, unless otherwise noted:
	20221,2			20211			20201			20191			20181			20171
Net asset value, beginning of period		$8.01			$7.86			$8.04			$7.66			$7.93			$8.09
Income (loss) from operations:
Net investment income		0.12			0.26			0.27			0.30			0.32			0.32
Net realized and unrealized gain (loss)		(0.70)			0.15			(0.16)			0.39			(0.28)			(0.17)
Total income (loss) from operations		(0.58)			0.41			0.11			0.69			0.04			0.15
Less distributions from:
Net investment income		(0.12)	3		(0.26)			(0.29)			(0.31)			(0.31)			(0.31)
Total distributions		(0.12)			(0.26)			(0.29)			(0.31)			(0.31)			(0.31)
Net asset value, end of period		$7.31			$8.01			$7.86			$8.04			$7.66			$7.93
Market price, end of period		$6.71			$8.44			$7.19			$7.64			$6.91			$7.49
Total return, based on NAV4,5		(7.31)	%		5.25	%		1.43	%		9.12	%		0.45	%		1.92	%
Total return, based on Market Price6		(19.20)	%		21.33	%		(2.15)	%		15.20	%		(3.76)	%		3.67	%
Net assets, end of period (millions)		$158			$173			$170			$174			$166			$171
Ratios to average net assets:
Gross expenses		0.70	%7		0.71	%		0.71	%		0.68	%		0.68	%		0.69	%
Net expenses		0.70	7,8,9		0.71	8,9		0.71	8		0.68			0.68			0.69
Net investment income		3.02	7		3.16			3.43			3.86			4.09			4.06
Portfolio turnover rate		12	%		14	%		27	%		16	%		13	%		11	%

¹  Per share amounts have been calculated using the average shares method.

²  For the six months ended April 30, 2022 (unaudited).

³  The actual source of the Fund’s current fiscal year distributions may be from net investment income, return of capital or a combination of both. Shareholders will be informed of the tax characteristics of the distributions after the close of the fiscal year.

⁴  Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁵  The total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁶  The total return calculation assumes that distributions are reinvested in accordance with the Fund’s dividend reinvestment plan. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

⁷  Annualized.

⁸  Reflects fee waivers and/or expense reimbursements.

⁹  The manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund.

See Notes to Financial Statements.

    22  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

Notes to financial statements (unaudited)

1. Organization and significant accounting policies

Western Asset Municipal High Income Fund Inc. (the “Fund”) was incorporated in Maryland and is registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund seeks high current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing primarily in intermediate and long-term municipal debt securities issued by state and local governments. However, the Fund may invest in municipal obligations of any maturity. The Fund may invest up to 100% of its assets in municipal obligations rated below investment grade (commonly referred to as “junk bonds”). Investment grade securities are those rated in the Baa/BBB categories or above by at least one National Recognized Statistical Rating Organization that provides such a rating or unrated securities that the subadviser determined to be of comparable credit quality. For credit ratings purposes, pre-refunded bonds are deemed to be unrated. The subadviser determines the credit quality of pre-refunded bonds based on the quality of the escrowed collateral and such other factors as the subadviser deems appropriate.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”). 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. Subsequent events have been evaluated through the date the financial statements were issued.

(a) Investment valuation. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services typically use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Investments in open-end funds are valued at the closing net asset value per share of each fund on the day of valuation. If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Fund’s Board of Directors.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    23 

Notes to financial statements (unaudited) (cont’d)

The Board of Directors is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Global Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Directors, is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Board of Directors. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among market participants.

The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuer’s financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts’ research and observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.

For each portfolio security that has been fair valued pursuant to the policies adopted by the Board of Directors, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are reported to the Board of Directors quarterly.

The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.

    24  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical investments

• Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets carried at fair value:

ASSETS
Description	Quoted Prices (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Long-Term Investments†:
Municipal Bonds		—	$	147,284,782		—	$	147,284,782
Municipal Bonds Deposited in Tender Option Bond Trust		—		1,740,000		—		1,740,000
Total Long-Term Investments		—		149,024,782		—		149,024,782
Short-Term Investments†:
Municipal Bonds		—		9,885,000		—		9,885,000
Money Market Funds	$	75,976		—		—		75,976
Total Short-Term Investments		75,976		9,885,000		—		9,960,976
Total Investments	$	75,976	$	158,909,782		—	$	158,985,758

† See Schedule of Investments for additional detailed categorizations.

(b) Tender option bonds. The Fund may enter into tender option bond (“TOB”) transactions and may invest in inverse floating rate instruments (“Inverse Floaters”) issued in TOB transactions. The Fund may participate either in structuring an Inverse Floater or purchasing an Inverse Floater in the secondary market. When structuring an Inverse Floater, the Fund deposits securities (typically municipal bonds or other municipal securities) (the “Underlying Bonds”) into a special purpose entity, referred to as a TOB trust. The TOB trust generally issues floating rate notes (“Floaters”) to third parties and residual interest, Inverse Floaters, to the Fund. The Floaters issued by the TOB trust have interest rates which reset weekly and provide the holders of the Floaters the option to tender their notes back to the TOB trust for redemption at par at each reset date. The net proceeds of the sale of the Floaters, after expenses, are received by the Fund and may be invested in additional securities. The

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    25 

Notes to financial statements (unaudited) (cont’d)

Inverse Floaters are inverse floating rate debt instruments, as the return on those bonds is inversely related to changes in a specified interest rate. Distributions on any Inverse Floaters paid to the Fund will be reduced or, in the extreme, eliminated as short-term interest rates rise and will increase when such interest rates fall. Floaters issued by a TOB trust may be senior to the Inverse Floaters held by the Fund. The value and market for Inverse Floaters can be volatile, and Inverse Floaters can have limited liquidity.

An investment in an Inverse Floater structured by the Fund is accounted for as a secured borrowing. The Underlying Bonds deposited into the TOB trust are included in the Fund’s Schedule of Investments and a liability for Floaters (TOB floating rate notes) issued by the TOB trust is recognized in the Fund’s Statement of Assets and Liabilities. The carrying amount of the TOB trust’s floating rate note obligations as reported on the Statement of Assets and Liabilities approximates its fair value. Interest income, including amortization, on the Underlying Bonds is recognized in the Fund’s Statements of Operations. Interest paid to holders of the Floaters, as well as other expenses related to administration, liquidity, remarketing and trustee services of the TOB trust, are recognized in Interest expense in the Fund’s Statement of Operations.

(c) Securities traded on a when-issued and delayed delivery basis. The Fund may trade securities on a when-issued or delayed delivery basis. In when-issued and delayed delivery transactions, the securities are purchased or sold by the Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price and yield to the Fund at the time of entering into the transaction.

Purchasing such securities involves risk of loss if the value of the securities declines prior to settlement. These securities are subject to market fluctuations and their current value is determined in the same manner as for other securities.

(d) Credit and market risk. The Fund invests in high-yield instruments that are subject to certain credit and market risks. The yields of high-yield obligations reflect, among other things, perceived credit and market risks. The Fund’s investments in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk related to timely and ultimate payment of interest and principal, greater market price volatility and less liquid secondary market trading.

(e) Security transactions and investment income. Security transactions are accounted for on a trade date basis. Interest income (including interest income from payment-in-kind securities), adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. The cost of investments sold is determined by use of the specific identification method. To the extent any issuer defaults or a credit event occurs that impacts the issuer, the Fund may halt any additional interest income accruals and consider the realizability of interest accrued up to the date of default or credit event.

    26  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

(f) Distributions to shareholders. Distributions from net investment income of the Fund, if any, are declared quarterly and paid on a monthly basis. The actual source of the Fund’s monthly distributions may be from net investment income, return of capital or a combination of both. Shareholders will be informed of the tax characteristics of the distributions after the close of the fiscal year. The Fund intends to satisfy conditions that will enable interest from municipal securities, which is exempt from federal and certain state income taxes, to retain such tax-exempt status when distributed to the shareholders of the Fund. Distributions of net realized gains, if any, are taxable and are declared at least annually. Distributions to shareholders of the Fund are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.

(g) Compensating balance arrangements. The Fund has an arrangement with its custodian bank whereby a portion of the custodian’s fees is paid indirectly by credits earned on the Fund’s cash on deposit with the bank.

(h) Federal and other taxes. It is the Fund’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986 (the “Code”), as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute its taxable income and net realized gains, if any, to shareholders in accordance with timing requirements imposed by the Code. Therefore, no federal or state income tax provision is required in the Fund’s financial statements.

Management has analyzed the Fund’s tax positions taken on income tax returns for all open tax years and has concluded that as of October 31, 2021, no provision for income tax is required in the Fund’s financial statements. The Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

(i) Reclassification. GAAP requires that certain components of net assets be reclassified to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share.

2. Investment management agreement and other transactions with affiliates

Legg Mason Partners Fund Advisor, LLC (“LMPFA”) is the Fund’s investment manager and Western Asset Management Company, LLC (“Western Asset”) is the Fund’s subadviser. LMPFA and Western Asset are indirect, wholly-owned subsidiaries of Franklin Resources, Inc. (“Franklin Resources”).

LMPFA provides administrative and certain oversight services to the Fund. The Fund pays an investment management fee, calculated daily and paid monthly, at an annual rate of 0.55% of the Fund’s average daily net assets.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    27 

Notes to financial statements (unaudited) (cont’d)

LMPFA delegates to Western Asset the day-to-day portfolio management of the Fund. For its services, LMPFA pays Western Asset monthly 70% of the net management fee it receives from the Fund.

The manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund.

During the six months ended April 30, 2022, fees waived and/or expenses reimbursed amounted to $14, all of which was an affiliated money market fund waiver.

All officers and one Director of the Fund are employees of Franklin Resources or its affiliates and do not receive compensation from the Fund.

The Fund is permitted to purchase or sell securities, typically short-term variable rate demand obligations, from or to certain other affiliated funds or portfolios under specified conditions outlined in procedures adopted by the Board of Directors. The

procedures have been designed to provide assurance that any purchase or sale of securities by the Fund from or to another fund or portfolio that is, or could be considered, an affiliate by virtue of having a common investment manager or subadviser (or affiliated investment manager or subadviser), common Directors and/or common officers complies with Rule 17a-7 under the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. For the six months ended April 30, 2022, such purchase and sale transactions (excluding accrued interest) were $5,400,000 and $5,100,000, respectively.

3. Investments

During the six months ended April 30, 2022, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) were as follows:

Purchases	$	19,327,986
Sales		21,702,307

At April 30, 2022, the aggregate cost of investments and the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:

	Cost*		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Net Unrealized Depreciation
Securities	$	157,801,680	$	4,280,748	$	(4,401,670)	$	(120,922)

* Cost of investments for federal income tax purposes includes the value of Inverse Floaters issued in TOB transactions (Note 1).

4. Derivative instruments and hedging activities

During the six months ended April 30, 2022, the Fund did not invest in derivative instruments.

    28  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

5. Distributions subsequent to April 30, 2022

The following distributions have been declared by the Fund’s Board of Directors and are payable subsequent to the period end of this report:

Record Date	Payable Date		Amount
4/22/2022		5/2/2022	$	0.0198
5/23/2022		6/1/2022	$	0.0198
6/23/2022		7/1/2022	$	0.0198
7/22/2022		8/1/2022	$	0.0198
8/24/2022		9/1/2022	$	0.0198

6. Stock repurchase program

On November 16, 2015, the Fund announced that the Fund’s Board of Directors (the “Board”) had authorized the Fund to repurchase in the open market up to approximately 10% of the Fund’s outstanding common stock when the Fund’s shares are trading at a discount to net asset value. The Board has directed management of the Fund to repurchase shares of common stock at such times and in such amounts as management reasonably believes may enhance stockholder value. The Fund is under no obligation to purchase shares at any specific discount levels or in any specific amounts. During the six months ended April 30, 2022, the Fund did not repurchase any shares.

7. Transactions with affiliated company

As defined by the 1940 Act, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control with the Fund. The following company was considered an affiliated company for all or some portion of the six months ended April 30, 2022. The following transactions were effected in such company for the six months ended April 30, 2022.

	Affiliate
	Value at
	October 31,		Purchased				Sold
	2021		Cost		Shares		Cost		Shares
Western Asset Premier Institutional Government Reserves, Premium Shares	$	68,828	$	2,225,896		2,225,896	$	2,218,748		2,218,748

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    29 

Notes to financial statements (unaudited) (cont’d)

(cont’d)	Realized Gain (Loss)		Dividend Income		Net Increase (Decrease) in Unrealized Appreciation (Depreciation)		Affiliate Value at April 30, 2022
Western Asset Premier Institutional Government Reserves, Premium Shares		—	$	14		—	$	75,976

8. Deferred capital losses

As of October 31, 2021, the Fund had deferred capital losses of $4,361,378, which have no expiration date, that will be available to offset future taxable capital gains.

9. Recent accounting pronouncement

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB issued ASU No. 2021-01, with further amendments to Topic 848. The amendments in the ASUs provide optional temporary accounting recognition and financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the LIBOR and other interbank-offered based reference rates as of the end of 2021 and 2023. The ASUs are effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of these ASUs will not have a material impact on the financial statements.

10. Other matters

The outbreak of the respiratory illness COVID-19 (commonly referred to as “coronavirus”) has continued to rapidly spread around the world, causing considerable uncertainty for the global economy and financial markets. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, are not known. The COVID-19 pandemic could adversely affect the value and liquidity of the Fund’s investments, impair the Fund’s ability to satisfy redemption requests, and negatively impact the Fund’s performance. In addition, the outbreak of COVID-19, and measures taken to mitigate its effects, could result in disruptions to the services provided to the Fund by its service providers.

*  *  *

The Fund’s investments, payment obligations, and financing terms may be based on floating rates, such as the London Interbank Offered Rate, or “LIBOR,” which is the offered rate for short-term Eurodollar deposits between major international banks. On March 5, 2021, the ICE Benchmark Administration, the administrator of LIBOR, stated that it will cease the publication of the overnight and one-, three-, six- and twelve-month USD LIBOR settings

    30  Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report

immediately following the LIBOR publication on Friday, June 30, 2023. All other LIBOR settings, including the one-week and two-month USD LIBOR settings, have ceased publication as of January 1, 2022. There remains uncertainty regarding the nature of any replacement rate and the impact of the transition from LIBOR on the Fund’s transactions and the financial markets generally. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund’s investments cannot yet be determined.

*  *  *

On February 24, 2022, Russia engaged in military actions in the sovereign territory of Ukraine. The current political and financial uncertainty surrounding Russia and Ukraine may increase market volatility and the economic risk of investing in securities in these countries and may also cause uncertainty for the global economy and broader financial markets. The ultimate fallout and long-term impact from these events are not known. The Fund will continue to assess the impact on valuations and liquidity and will take any potential actions needed in accordance with procedures approved by the Board of Directors.

Western Asset Municipal High Income Fund Inc. 2022 Semi-Annual Report    31 

Additional shareholder information (unaudited)

Results of annual meeting of shareholders

The Annual Meeting of Shareholders of Western Asset Municipal High Income Fund Inc. was held on April 8, 2022 for the purpose of considering and voting upon the proposals presented at the Meeting. The following table provides information concerning the matters voted upon at the Meeting:

Election of directors

Nominees	Votes For		Votes Withheld		Abstain
Daniel P. Cronin		17,938,153		453,232		364,158
Paolo M. Cucchi		17,526,605		853,249		375,689
Nisha Kumar		17,906,911		492,531		356,101

At April 30, 2022, in addition to Daniel P. Cronin, Paolo M. Cucchi and Nisha Kumar, the other Directors of the Fund were as follows:

Robert D. Agdern

Carol L. Colman

William R. Hutchinson

Eileen A. Kamerick

Jane Trust

Ratification of Selection of Independent Registered Public Accountants

To ratify the selection of PricewaterhouseCoopers LLP (“PwC”) as independent registered public accountants of the Fund for the fiscal year ended October 31, 2022.

For	Against	Abstain
18,314,354	259,574	181,615

    32  Western Asset Municipal High Income Fund Inc.

Dividend reinvestment plan (unaudited)

Unless you elect to receive distributions in cash (i.e., opt-out), all dividends, including any capital gain dividends and return of capital distributions, on your Common Stock will be automatically reinvested by Computershare Trust Company, N.A., as agent for the stockholders (the “Plan Agent”), in additional shares of Common Stock under the Fund’s Dividend Reinvestment Plan (the “Plan”). You may elect not to participate in the Plan by contacting the Plan Agent. If you do not participate, you will receive all cash distributions paid by check mailed directly to you by Computershare Trust Company, N.A., as dividend paying agent.

If you participate in the Plan, the number of shares of Common Stock you will receive will be determined as follows:

(1) If the market price of the Common Stock (plus $0.03 per share commission) on the payment date (or, if the payment date is not a NYSE trading day, the immediately preceding trading day) is equal to or exceeds the net asset value per share of the Common Stock at the close of trading on the NYSE on the payment date, the Fund will issue new Common Stock at a price equal to the greater of (a) the net asset value per share at the close of trading on the NYSE on the payment date or (b) 95% of the market price per share of the Common Stock on the payment date.

(2) If the net asset value per share of the Common Stock exceeds the market price of the Common Stock (plus $0.03 per share commission) at the close of trading on the NYSE on the payment date, the Plan Agent will receive the dividend or distribution in cash and will buy Common Stock in the open market, on the NYSE or elsewhere, for your account as soon as practicable commencing on the trading day following the payment date and terminating no later than the earlier of (a) 30 days after the dividend or distribution payment date, or (b) the payment date for the next succeeding dividend or distribution to be made to the stockholders; except when necessary to comply with applicable provisions of the federal securities laws. If during this period: (i) the market price (plus $0.03 per share commission) rises so that it equals or exceeds the net asset value per share of the Common Stock at the close of trading on the NYSE on the payment date before the Plan Agent has completed the open market purchases or (ii) if the Plan Agent is unable to invest the full amount eligible to be reinvested in open market purchases, the Plan Agent will cease purchasing Common Stock in the open market and the Fund shall issue the remaining Common Stock at a price per share equal to the greater of (a) the net asset value per share at the close of trading on the NYSE on the day prior to the issuance of shares for reinvestment or (b) 95% of the then current market price per share.

Common Stock in your account will be held by the Plan Agent in non-certificated form. Any proxy you receive will include all shares of Common Stock you have received under the Plan. You may withdraw from the Plan (i.e., opt-out) by notifying the Plan Agent in writing at 462 South 4th Street, Suite 1600, Louisville, KY 40202 or by calling the Plan Agent at 1-888-888-0151. Such withdrawal will be effective immediately if notice is received by the Plan Agent not less than ten business days prior to any dividend or distribution record date;

Western Asset Municipal High Income Fund Inc.    33 

Dividend reinvestment plan (unaudited) (cont’d)

otherwise such withdrawal will be effective as soon as practicable after the Plan Agent’s investment of the most recently declared dividend or distribution on the Common Stock.

Plan participants who sell their shares will be charged a service charge (currently $5.00 per transaction) and the Plan Agent is authorized to deduct brokerage charges actually incurred from the proceeds (currently $0.05 per share commission). There is no service charge for reinvestment of your dividends or distributions in Common Stock. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases. Because all dividends and distributions will be automatically reinvested in additional shares of Common Stock, this allows you to add to your investment through dollar cost averaging, which may lower the average cost of your Common Stock over time. Dollar cost averaging is a technique for lowering the average cost per share over time if the Fund’s net asset value declines. While dollar cost averaging has definite advantages, it cannot assure profit or protect against loss in declining markets.

Automatically reinvesting dividends and distributions does not mean that you do not have to pay income taxes due upon receiving dividends and distributions. Investors will be subject to income tax on amounts reinvested under the Plan.

The Fund reserves the right to amend or terminate the Plan if, in the judgment of the Board of Directors, the change is warranted. The Plan may be terminated, amended or supplemented by the Fund upon notice in writing mailed to stockholders at least 30 days prior to the record date for the payment of any dividend or distribution by the Fund for which the termination or amendment is to be effective. Upon any termination, you will be sent cash for any fractional share of Common Stock in your account. You may elect to notify the Plan Agent in advance of such termination to have the Plan Agent sell part or all of your Common Stock on your behalf. Additional information about the Plan and your account may be obtained from the Plan Agent at 462 South 4th Street, Suite 1600, Louisville, KY 40202 or by calling the Plan Agent at 1-888-888-0151.

    34  Western Asset Municipal High Income Fund Inc.

Western Asset

Municipal High Income Fund Inc.

Directors

Robert D. Agdern

Carol L. Colman

Daniel P. Cronin

Paolo M. Cucchi

William R. Hutchinson

Eileen A. Kamerick

Nisha Kumar

Jane Trust

Chairman

Officers

Jane Trust

President and Chief Executive Officer

Christopher Berarducci

Treasurer and Principal Financial Officer

Fred Jensen

Chief Compliance Officer

George P. Hoyt

Secretary and Chief Legal Officer

Thomas C. Mandia*

Senior Vice President

Jeanne M. Kelly

Senior Vice President

Western Asset Municipal High Income Fund Inc.

620 Eighth Avenue

47th Floor

New York, NY 10018

Investment manager

Legg Mason Partners Fund Advisor, LLC

Subadviser

Western Asset Management Company, LLC

Custodian

The Bank of New York Mellon

Transfer agent

Computershare Inc.

462 South 4th Street, Suite 1600

Louisville, KY 40202

Independent registered public accounting firm

PricewaterhouseCoopers LLP

Baltimore, MD

Legal counsel

Simpson Thacher & Bartlett LLP

900 G Street NW

Washington, DC 20001

New York Stock Exchange Symbol

MHF

* Effective February 10, 2022, Mr. Mandia became a Senior Vice President.

Legg Mason Funds Privacy and Security Notice

Your Privacy and the Security of Your Personal Information is Very Important to the Legg Mason Funds

This Privacy and Security Notice (the “Privacy Notice”) addresses the Legg Mason Funds’ privacy and data protection practices with respect to nonpublic personal information the Funds receive. The Legg Mason Funds include any funds sold by the Funds’ distributor, Franklin Distributors, LLC, as well as Legg Mason-sponsored closed-end funds. The provisions of this Privacy Notice apply to your information both while you are a shareholder and after you are no longer invested with the Funds.

The Type of Nonpublic Personal Information the Funds Collect About You

The Funds collect and maintain nonpublic personal information about you in connection with your shareholder account. Such information may include, but is not limited to:

• Personal information included on applications or other forms;

• Account balances, transactions, and mutual fund holdings and positions;

• Bank account information, legal documents, and identity verification documentation;

• Online account access user IDs, passwords, security challenge question responses; and

• Information received from consumer reporting agencies regarding credit history and creditworthiness (such as the amount of an individual’s total debt, payment history, etc.).

How the Funds Use Nonpublic Personal Information About You

The Funds do not sell or share your nonpublic personal information with third parties or with affiliates for their marketing purposes, or with other financial institutions or affiliates for joint marketing purposes, unless you have authorized the Funds to do so. The Funds do not disclose any nonpublic personal information about you except as may be required to perform transactions or services you have authorized or as permitted or required by law.

The Funds may disclose information about you to:

• Employees, agents, and affiliates on a “need to know” basis to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators;

• Service providers, including the Funds’ affiliates, who assist the Funds as part of the ordinary course of business (such as printing, mailing services, or processing or servicing your account with us) or otherwise perform services on the Funds’ behalf, including companies that may perform statistical analysis, market research and marketing services solely for the Funds;

• Permit access to transfer, whether in the United States or countries outside of the United States to such Funds’ employees, agents and affiliates and service providers as required to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators;

• The Funds’ representatives such as legal counsel, accountants and auditors to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators;

• Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust.

NOT PART OF THE SEMI-ANNUAL  REPORT

Legg Mason Funds Privacy and Security Notice (cont’d)

Except as otherwise permitted by applicable law, companies acting on the Funds’ behalf, including those outside the United States, are contractually obligated to keep nonpublic personal information the Funds provide to them confidential and to use the information the Funds share only to provide the services the Funds ask them to perform. The Funds may disclose nonpublic personal information about you when necessary to enforce their rights or protect against fraud, or as permitted or required by applicable law, such as in connection with a law enforcement or regulatory request, subpoena, or similar legal process. In the event of a corporate action or in the event a Fund service provider changes, the Funds may be required to disclose your nonpublic personal information to third parties. While it is the Funds’ practice to obtain protections for disclosed information in these types of transactions, the Funds cannot guarantee their privacy policy will remain unchanged.

Keeping You Informed of the Funds’ Privacy and Security Practices

The Funds will notify you annually of their privacy policy as required by federal law. While the Funds reserve the right to modify this policy at any time they will notify you promptly if this privacy policy changes.

The Funds’ Security Practices

The Funds maintain appropriate physical, electronic and procedural safeguards designed to guard your nonpublic personal information. The Funds’ internal data security policies restrict access to your nonpublic personal information to authorized employees, who may use your nonpublic personal information for Fund business purposes only.

Although the Funds strive to protect your nonpublic personal information, they cannot ensure or warrant the security of any information you provide or transmit to them, and you do so at your own risk. In the event of a breach of the confidentiality or security of your nonpublic personal information, the Funds will attempt to notify you as necessary, so you can take appropriate protective steps. If you have consented to the Funds using electronic communications or electronic delivery of statements, they may notify you under such circumstances using the most current email address you have on record with them.

In order for the Funds to provide effective service to you, keeping your account information accurate is very important. If you believe that your account information is incomplete, not accurate or not current, if you have questions about the Funds’ privacy practices, or our use of your nonpublic personal information, write the Funds using the contact information on your account statements, email the Funds by clicking on the Contact Us section of the Funds’ website at www.franklintempleton.com, or contact the Fund at 1-888-777-0102.

Revised April 2018

Legg Mason California Consumer Privacy Act Policy

Although much of the personal information we collect is “nonpublic personal information” subject to federal law, residents of California may, in certain circumstances, have additional rights under the California Consumer Privacy Act (“CCPA”). For example, if you are a broker,

NOT PART OF THE SEMI-ANNUAL  REPORT

Legg Mason Funds Privacy and Security Notice (cont’d)

dealer, agent, fiduciary, or representative acting by or on behalf of, or for, the account of any other person(s) or household, or a financial advisor, or if you have otherwise provided personal information to us separate from the relationship we have with personal investors, the provisions of this Privacy Policy apply to your personal information (as defined by the CCPA).

• In addition to the provisions of the Legg Mason Funds Security and Privacy Notice, you may have the right to know the categories and specific pieces of personal information we have collected about you.

• You also have the right to request the deletion of the personal information collected or maintained by the Funds.

If you wish to exercise any of the rights you have in respect of your personal information, you should advise the Funds by contacting them as set forth below. The rights noted above are subject to our other legal and regulatory obligations and any exemptions under the CCPA. You may designate an authorized agent to make a rights request on your behalf, subject to the identification process described below. We do not discriminate based on requests for information related to our use of your personal information, and you have the right not to receive discriminatory treatment related to the exercise of your privacy rights.

We may request information from you in order to verify your identity or authority in making such a request. If you have appointed an authorized agent to make a request on your behalf, or you are an authorized agent making such a request (such as a power of attorney or other written permission), this process may include providing a password/passcode, a copy of government issued identification, affidavit or other applicable documentation, i.e. written permission. We may require you to verify your identity directly even when using an authorized agent, unless a power of attorney has been provided. We reserve the right to deny a request submitted by an agent if suitable and appropriate proof is not provided.

For the 12-month period prior to the date of this Privacy Policy, the Legg Mason Funds have not sold any of your personal information; nor do we have any plans to do so in the future.

Contact Information

Address: Data Privacy Officer, 100 International Dr., Baltimore, MD 21202

Email: DataProtectionOfficer@franklintempleton.com

Phone: 1-800-396-4748

Revised October 2020

NOT PART OF THE SEMI-ANNUAL  REPORT

Western Asset Municipal High Income Fund Inc.

Western Asset Municipal High Income Fund Inc.

620 Eighth Avenue

47th Floor

New York, NY 10018

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, at market prices, shares of its stock.

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. To obtain information on Form N-PORT, shareholders can call the Fund at 1-888-777-0102.

Information on how the Fund voted proxies relating to portfolio securities during the prior 12-month period ended June 30th of each year and a description of the policies and procedures that the Fund uses to determine how to vote proxies related to portfolio transactions are available (1) without charge, upon request, by calling 1-888-777-0102, (2) at www.franklintempleton.com and (3) on the SEC’s website at www.sec.gov.

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Fund may be found on Franklin Templeton’s website, which can be accessed at www.franklintempleton.com. Any reference to Franklin Templeton’s website in this report is intended to allow investors public access to information regarding the Fund and does not, and is not intended to, incorporate Franklin Templeton’s website in this report.

This report is transmitted to the shareholders of Western Asset Municipal High Income Fund Inc. for their information. This is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in this report.

Computershare Inc.

462 South 4th Street, Suite 1600

Louisville, KY 40202

WAS04050 6/22 SR22-4435

ITEM 2. CODE OF ETHICS.

Not applicable.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

Included herein under Item 1.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. INVESTMENT PROFESSIONALS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 13. EXHIBITS.

(a) (1) Not applicable.

Exhibit  99.CODE ETH

(a) (2)  Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit 99.CERT

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit 99.906CERT

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto duly authorized.

Western Asset Municipal High Income Fund Inc.

By:	/s/ Jane Trust
	Jane Trust
	Chief Executive Officer

Date: June 27, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Jane Trust
	Jane Trust
	Chief Executive Officer

Date: June 27, 2022

By:	/s/ Christopher Berarducci
	Christopher Berarducci
	Principal Financial Officer

Date: June 27, 2022