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 811-4395
SMITH BARNEY MUNI FUNDS
(Exact name of registrant as specified in charter)
125 Broad Street, New York, NY 10004
(Address of principal executive offices) (Zip code)
Robert I. Frenkel, Esq.
Smith Barney Fund Management LLC
300 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 451-2010
Date of fiscal year end: MARCH 31
Date of reporting period: SEPTEMBER 30, 2003
ITEM 1. REPORT TO STOCKHOLDERS.
The SEMI-ANNUAL Report to Stockholders is filed herewith.
SMITH BARNEY
MUNI FUNDS
GEORGIA PORTFOLIO
PENNSYLVANIA PORTFOLIO
CLASSIC SERIES | SEMI-ANNUAL REPORT | SEPTEMBER 30, 2003
Logo: Smith Barney Mutual Funds
Your Serious Money. Professionally Managed.(R)
Your Serious Money. Professionally Managed.(R)
IS A REGISTERED MARK OF CITIGROUP GLOBAL MARKETS INC.
NOT FDIC INSURED o NOT BANK GUARANTEED o MAY LOSE VALUE
WHAT'S INSIDE
LETTER FROM THE CHAIRMAN ................................................. 1
SCHEDULES OF INVESTMENTS ................................................. 4
STATEMENTS OF ASSETS AND LIABILITIES ..................................... 17
STATEMENTS OF OPERATIONS ................................................. 18
STATEMENTS OF CHANGES IN NET ASSETS ...................................... 19
NOTES TO FINANCIAL STATEMENTS ............................................ 21
FINANCIAL HIGHLIGHTS ..................................................... 29
LETTER FROM THE CHAIRMAN
PHOTO OF: R. JAY GERKEN, CFA
Chairman, President and
Chief Executive Officer
DEAR SHAREHOLDER,
In an effort to jump-start a weak economy, the Federal Reserve reduced
short-term interest rates again in late June, driving the federal funds ratei to
just 1%, its lowest level since the Eisenhower Administration. During this
declining-rate environment yields continued to drop. Meanwhile, many states,
including Georgia and Pennsylvania, have been grappling with budget deficits
brought on by the faltering economy, layoffs and declining incomes -- all
leading to lower tax revenues. Shortly after the Fed eased rates in June, the
fixed-income markets experienced a sharp reversal over the summer as signs
emerged that economic growth was more robust than previously thought. Interest
rates moved up sharply as a result. If rates were to continue rising, that would
lead to higher levels of income from fixed-income securities. However, rising
rates would lead to declining prices on outstanding bonds because prices move in
the opposite direction of interest rates.
In this environment, the funds performed as follows:
SMITH BARNEY MUNI FUNDS: GEORGIA PORTFOLIO'S PERFORMANCE
For the six months ended September 30, 2003, Class A shares of the fund, without
sales charges, returned 2.66%.1 This compared with a return of 2.66% of the
broad-based, unmanaged Lehman Brothers Municipal Bond Index,ii and an average of
2.51% for the fund's Lipper peer group of Georgia municipal debt funds, over the
same period.2
1 Performance for the fund's other share classes can be found in the Financial
Highlights section in this report. Performance for other share classes may
vary.
2 Lipper is a major independent mutual-fund tracking organization. Returns are
based on the six-month period ended September 30, 2003, calculated among 29
funds in the Lipper Georgia municipal debt funds category with reinvestment of
dividends and capital gains and excluding sales charges.
1 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SMITH BARNEY MUNI FUNDS: PENNSYLVANIA PORTFOLIO'S PERFORMANCE
For the six months ended September 30, 2003, Class A shares of the fund, without
sales charges, returned 2.33%.1 This compared with a return of 2.66% of the
broad-based, unmanaged Lehman Brothers Municipal Bond Index,ii and an average of
2.33% for the fund's Lipper peer group of Pennsylvania municipal debt funds,
over the same period.iii
At times of uncertainty such as these, we think that it is more important than
ever to develop and stick with a long-range plan. In addition to their
income-producing capabilities, we believe that bonds can be an effective means
of diversification in an overall investment portfolio. And municipal securities
can provide income free from federal, and sometimes state and local, income
taxes. Certain investors may be subject to the federal Alternative Minimum Tax
and state and local income taxes may apply. Capital gains, if any, are fully
taxable. Consult your personal tax adviser for more details. Please work closely
with your financial adviser to determine your proper allocation to fixed-income
securities based on your risk/reward profile and to explore the role they can
play in achieving your long-term financial goals.
As always, thank you for entrusting your assets to us. We look forward to
helping you continue to meet your financial goals.
Sincerely,
/s/ R. Jay Gerken, CFA
R. Jay Gerken, CFA
Chairman, President and Chief Executive Officer
October 9, 2003
The information provided in this letter by the Investment Adviser is not
intended to be a forecast of future events, a guarantee of future results or
investment advice. Views expressed may differ from those of the firm as a whole.
Portfolio holdings and breakdowns are as of September 30, 2003 and are subject
to change. Please refer to pages 4 through 14 for a list and percentage
breakdown of the fund's holdings.
i The federal funds rate is the interest rate that banks with excess reserves
at a Federal Reserve district bank charge other banks that need overnight
loans.
ii The Lehman Brothers Municipal Bond Index is a broad measure of the
municipal bond market with maturities of at least one year. Please note
that an investor cannot invest directly in an index.
iii Lipper is a major independent mutual-fund tracking organization. Returns
are based on the six-month period ended September 30, 2003, calculated
among 62 funds in the Lipper Pennsylvania municipal debt funds category
with reinvestment of dividends and capital gains and excluding sales
charges.
2 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
PERFORMANCE SNAPSHOT
AS OF SEPTEMBER 30, 2003
(NOT INCLUDING SALES CHARGES)
6 MONTHS
Georgia Portfolio Class A shares 2.66%
Average of Lipper Georgia municipal debt funds 2.51%
Pennsylvania Portfolio Class A shares 2.33%
Average of Lipper Pennsylvania municipal debt funds 2.33%
Lehman Brothers Municipal Bond Index 2.66%
Class A share returns assume the reinvestment of income dividends and capital
gains distributions at net asset value and the deduction of all fund
expenses. Returns have not been adjusted to include sales charges that may
apply when shares are purchased or the deduction of taxes that a shareholder
would pay on fund distributions. All figures represent past performance and
are not a guarantee of future results. Principal value and investment returns
will fluctuate and investors' shares, when redeemed may be worth more or less
than their original cost.
Lipper is a major independent mutual-fund tracking organization. Average
annual returns are based on the six-month period ended September 30, 2003,
calculated among 29 funds in the Lipper Georgia municipal debt funds category
and among 62 funds in the Lipper Pennsylvania municipal debt funds category
with reinvestment of dividends and capital gains excluding sales charges.
The Lehman Brothers Municipal Bond Index is a broad measure of the municipal
bond market with maturities of at least one year. Please note that an
investor cannot invest directly in an index.
Certain investors may be subject to the federal Alternative Minimum Tax and
state and local income taxes may apply. Capital gains, if any, are fully
taxable. Consult your personal tax adviser for more details.
3 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) SEPTEMBER 30, 2003
GEORGIA PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
EDUCATION -- 21.7%
$1,000,000 VMIG 1* Athens-Clarke County, University Development Authority
Revenue, University of Georgia, (Athletic Association
Project), 1.200% due 9/1/13 (b) $ 1,000,000
2,000,000 AAA Cherokee County School System, MBIA-Insured,
5.000% due 8/1/16+ 2,186,620
Private Colleges & Universities Authority Revenue:
Emory University Project, Series A:
1,000,000 AA 5.500% due 11/1/24 1,097,250
2,000,000 AA 5.500% due 11/1/31 2,168,220
2,000,000 BBB Mercer Housing Corp. Project, Series A, 6.000% due 6/1/31 2,059,680
Mercer University Project:
500,000 Baa1* 5.750% due 10/1/21 530,830
1,000,000 Baa1* 5.750% due 10/1/31 1,030,650
250,000 A1* Rockdale County School District, 6.000% due 1/1/04 (c) 253,070
Savannah EDA:
1,000,000 BBB- College of Art & Design Inc. Project, 6.800% due 10/1/19 1,120,950
1,000,000 A Student Housing Revenue, (University Funding Foundation
Project), Series A, ACA-Insured, 6.750% due 11/15/20 1,108,810
1,000,000 A University of the Virgin Islands, Refunding & Improvement,
Series A, ACA-Insured, 6.000% due 12/1/24 1,090,540
- ---------------------------------------------------------------------------------------------------------
13,646,620
- ---------------------------------------------------------------------------------------------------------
FINANCE -- 0.8%
500,000 NR Virgin Islands Public Finance Authority Revenue, Series E,
6.000% due 10/1/22 509,130
- ---------------------------------------------------------------------------------------------------------
GENERAL OBLIGATION -- 8.1%
1,500,000 NR Georgia State, RITES, Series B, 10.168% due 4/1/09 (d) 1,992,360
1,000,000 AAA Georgia State, Series B, 5.750% due 8/1/17 1,206,610
500,000 AA Jefferson, 5.900% due 2/1/25 557,695
1,000,000 AAA Puerto Rico Commonwealth, RITES, XLCA-Insured,
9.718% due 7/1/17 (d) 1,319,300
- ---------------------------------------------------------------------------------------------------------
5,075,965
- ---------------------------------------------------------------------------------------------------------
HOSPITALS -- 13.8%
1,000,000 A- Chatham County Hospital Authority Revenue, Memorial Health
Medical Center, Series A, 6.125% due 1/1/24+ 1,056,320
725,000 AAA Clarke County Hospital Authority Revenue, MBIA-Insured,
9.875% due 1/1/06 (c)+ 800,066
Cobb County Kennestone Hospital Authority Revenue:
250,000 Aaa* 9.500% due 2/1/08 (c)+ 296,123
800,000 AAA Series 86A, MBIA-Insured, 7.750% due 2/1/07 (c)+ 879,560
See Notes to Financial Statements.
4 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) SEPTEMBER 30, 2003
GEORGIA PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
HOSPITALS -- 13.8% (CONTINUED)
$ 1,075,000 AAA Columbus Medical Center Hospital Authority Revenue,
Certificate of Anticipation, 7.750% due 7/1/10 (c)++ $ 1,292,956
1,000,000 Aaa* Newton County Hospital Authority Revenue, (Newton Health
System Project), AMBAC-Insured, 6.100% due 2/1/24 1,146,430
Puerto Rico Industrial, Tourist, Educational, Medical &
Environmental Control Facilities, Series A:
1,000,000 BBB- Ryder Memorial Hospital Project, 6.700% due 5/1/24 1,011,440
400,000 B+ San Lucas & Cristo Project, 5.750% due 6/1/19 337,708
495,000 AAA Tri-City Hospital Authority Revenue, Certificate of Anticipation,
South Fulton Hospital, FGIC-Insured,
10.250% due 7/1/06 (c)++ 568,379
1,175,000 Aaa* Ware County Hospital Authority Revenue, Certificate of
Anticipation, MBIA-Insured, 5.500% due 3/1/21 1,278,424
- ---------------------------------------------------------------------------------------------------------
8,667,406
- ---------------------------------------------------------------------------------------------------------
HOUSING: MULTI-FAMILY -- 14.5%
500,000 AAA Acworth Housing Authority Revenue, (Wingate Falls Apartments
Project), FSA-Insured, 6.125% due 3/1/17 (e) 529,100
Atlanta Urban Residential Finance Authority, MFH Revenue:
880,000 B Cascade Pines Housing Project, 6.250% due 9/1/10 (e) 528,000
1,070,000 NR Park Place Apartments, Series A, 6.750% due 3/1/31 993,570
Clayton County Housing Authority, MFH Revenue, Series A:
1,000,000 B2* Magnolia Park Apartments Project, 6.125% due 12/1/24+ 726,300
1,265,000 Aaa* Southlake Cove Project, GNMA-Collateralized,
5.600% due 12/20/24+ 1,335,144
1,480,000 Aaa* Vineyard Pointe Apartments Project, GNMA-Collateralized,
5.500% due 10/20/32+ 1,542,190
1,000,000 Aa2* De Kalb County Housing Authority, MFH Revenue,
Friendly Hills Apartments, Series A, FHA-Insured,
7.050% due 1/1/39 (e) 1,102,560
1,000,000 AAA Fulton County Housing Authority, MFH Revenue, (Concorde Place
Apartment Project), Series A, (Call 7/1/08 @ 102),
6.300% due 7/1/16 (e)(f) 1,182,230
1,000,000 AAA Lawrenceville Housing Authority, MFH Revenue, (Knollwood Park
Apartments Project), FNMA-Collateralized,
6.250% mandatory tender 12/1/29 (e) 1,149,710
- ---------------------------------------------------------------------------------------------------------
9,088,804
- ---------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
5 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) SEPTEMBER 30, 2003
GEORGIA PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
HOUSING: SINGLE-FAMILY -- 0.8%
$ 55,000 AAA Fulton County Housing Authority, Single-Family Mortgage Revenue,
Series A, GNMA-Collateralized, 6.600% due 3/1/28 (e) $ 56,902
300,000 AAA Puerto Rico Housing, Bank & Finance Agency, Single-Family
Mortgage Revenue, Affordable Housing Mortgage, Portfolio I,
FHLMC/FNMA/GNMA-Collateralized, 6.250% due 4/1/29 (e) 311,217
160,000 AAA Virgin Islands HFA Authority, Single-Family Mortgage Revenue,
Series A, GNMA-Collateralized, 6.450% due 3/1/16 (e) 166,277
- ---------------------------------------------------------------------------------------------------------
534,396
- ---------------------------------------------------------------------------------------------------------
LIFE CARE -- 1.1%
660,000 BBB+ Fulton County Residential Care Facilities, Canterbury Court
Project, 6.300% due 10/1/24 673,266
- ---------------------------------------------------------------------------------------------------------
MISCELLANEOUS -- 6.2%
1,000,000 Aaa* Albany-Dougherty Inner City Authority, COP, (Public Purpose
Project), AMBAC-Insured, 5.625% due 1/1/16 1,128,430
1,000,000 AAA Association County Commissioners of Georgia Leasing Program,
COP, (Rockdale County Public Purpose Project),
AMBAC-Insured, 5.625% due 7/1/20 1,109,700
1,000,000 AAA Fulton County Facilities Corp., COP, (Fulton County Public Purpose
Project), AMBAC-Insured, 5.500% due 11/1/18 1,120,190
500,000 BBB+ Puerto Rico Housing Bank & Finance Agency, 7.500% due 12/1/06 548,885
- ---------------------------------------------------------------------------------------------------------
3,907,205
- ---------------------------------------------------------------------------------------------------------
POLLUTION CONTROL -- 9.9%
1,000,000 BBB De Kalb County Development Authority, PCR, (General Motors Corp.
Project), 6.000% due 3/15/21 1,037,650
1,000,000 Ba3* Effingham County IDA, PCR, (Georgia-Pacific Project),
6.500% due 6/1/31 901,010
500,000 A Monroe County Development Authority, PCR, (Oglethorpe Power
Co. Scherer Project), Series A, 6.800% due 1/1/12 610,030
2,000,000 BBB Richmond County Development Authority, Environmental
Improvement Revenue, (International Paper Co. Project),
Series A, 6.250% due 2/1/25 (e) 2,090,420
1,000,000 NR Rockdale County Development Authority, Solid Waste Disposal
Revenue, (Visy Paper Inc. Project), 7.500% due 1/1/26 (e) 1,012,740
500,000 Baa2* Savannah EDA, PCR, (Union Camp Corp. Project),
6.150% due 3/1/17 545,935
- ---------------------------------------------------------------------------------------------------------
6,197,785
- ---------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
6 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) SEPTEMBER 30, 2003
GEORGIA PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
PUBLIC FACILITIES -- 3.6%
$ 250,000 AAA Butts County COP, MBIA-Insured, (Pre-Refunded-- Escrowed
with state and local government securities to 12/1/04
Call @ 102), 6.750% due 12/1/14 $ 271,645
1,000,000 AAA Cobb-Marietta Counties Coliseum & Exhibit Hall Authority
Revenue, MBIA-Insured, 5.625% due 10/1/26+ 1,133,750
2,000,000 AAA East Point Building Authority Revenue, FSA-Insured,
zero coupon due 2/1/20 830,640
- ---------------------------------------------------------------------------------------------------------
2,236,035
- ---------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 2.5%
1,000,000 AAA Atlanta Airport Revenue, Series A, FGIC-Insured,
(Call 1/1/10 @ 101), 5.500% due 1/1/26 (f) 1,162,060
250,000 AAA Metropolitan Atlanta Rapid Transit Authority, Sale Tax Revenue,
Series P, AMBAC-Insured, 6.250% due 7/1/20 310,477
200,000 CCC Puerto Rico Port Authority Revenue, Special Facilities American
Airlines, Series A, 6.250% due 6/1/26 (e) 114,120
- ---------------------------------------------------------------------------------------------------------
1,586,657
- ---------------------------------------------------------------------------------------------------------
UTILITIES -- 1.9%
500,000 AAA Georgia Municipal Electric Authority, Power Revenue,
Series EE, AMBAC-Insured, 7.250% due 1/1/24 670,075
500,000 A Georgia Municipal Gas Authority Revenue, (Southern Storage
Gas Project), 6.300% due 7/1/09 527,305
- ---------------------------------------------------------------------------------------------------------
1,197,380
- ---------------------------------------------------------------------------------------------------------
WATER AND SEWER -- 15.1%
Atlanta Water & Wastewater Revenue, Series A:
1,000,000 AAA FGIC-Insured, 5.500% due 11/1/19 1,167,490
1,000,000 AAA MBIA-Insured, 5.500% due 11/1/27 1,119,200
500,000 A+ Cartersville Development Authority Revenue, Sewer Facilities,
Anheuser Busch, 6.125% due 5/1/27 (e) 523,220
140,000 AAA Cherokee County Water & Sewer Authority Revenue,
MBIA-Insured, 9.625% due 8/1/04 (c)+ 149,926
500,000 AA Clayton County Water & Sewer Revenue, 5.625% due 5/1/20+ 556,350
2,135,000 AAA Cobb County & Marietta Water Authority Revenue,
5.250% due 11/1/21+ 2,321,791
1,000,000 AAA Columbia County Water & Sewer Revenue, FGIC-Insured,
5.500% due 6/1/25+ 1,077,200
Fulton County Water & Sewer Revenue, FGIC-Insured:
10,000 AAA 6.375% due 1/1/14 12,093
290,000 AAA 6.375% due 1/1/14 (c) 353,295
See Notes to Financial Statements.
7 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) SEPTEMBER 30, 2003
GEORGIA PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
WATER AND SEWER -- 15.1% (CONTINUED)
$ 500,000 AAA Milledgeville Water & Sewer Revenue, FSA-Insured,
6.000% due 12/1/21 $ 602,110
430,000 AAA Puerto Rico Commonwealth Aqueduct & Sewer Authority
Revenue, 10.250% due 7/1/09 (c) 540,248
1,000,000 AAA Rockdale County Water & Sewer Authority Revenue, Series A,
MBIA-Insured, 5.500% due 7/1/25 1,075,550
- ---------------------------------------------------------------------------------------------------------
9,498,473
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost-- $58,637,212**) $62,819,122
=========================================================================================================
(a) All ratings are by Standard & Poor's Ratings Service, except for those
identified by an asterisk (*), which are rated by Moody's Investors
Service.
(b) Variable rate obligation payable at par on demand at any time on no more
than seven days notice.
(c) Bonds are escrowed to maturity with U.S. government securities and are
considered by the Manager to be triple-A rated even if the issuer has not
applied for new ratings.
(d) Variable interest rate -- subject to periodic change.
(e) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(f) Pre-Refunded bonds are escrowed with U.S. government securities and are
considered by the Manager to be triple-A rated even if the issuer has not
applied for new ratings.
+ All or a portion of this security is segregated for open futures contracts
commitments (See Note 6).
++ All or a portion of this security is held as collateral for open futures
contracts commitments (See Note 6).
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 15 and 16 for definitions of ratings and certain abbreviations.
See Notes to Financial Statements.
8 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) SEPTEMBER 30, 2003
PENNSYLVANIA PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
EDUCATION -- 22.9%
$ 1,000,000 AA- Allegheny County Higher Education Building Authority, University
Revenue, Carnegie Mellon University, 5.250% due 3/1/32 $ 1,028,010
990,000 AAA Conneaut School District, AMBAC-Insured, 9.500% due 5/1/12 (b) 1,278,833
Delaware County Authority:
1,000,000 BBB- College Revenue, Neumann College, 6.000% due 10/1/31+ 1,046,460
1,000,000 AAA University Revenue, Villanova University, FGIC-Insured,
5.250% due 8/1/21+ 1,076,260
1,000,000 AAA Greater Johnstown School District, Series B, MBIA-Insured,
5.500% due 8/1/18+ 1,103,800
1,655,000 AAA Greensburg Salem School District, FGIC-Insured,
5.375% due 9/15/18+ 1,822,138
110,000 AAA Lewisburg Area School District, AMBAC-Insured,
9.750% due 2/15/04 (b) 113,511
Lycoming County Authority, College Revenue, Pennsylvania
College of Technology, AMBAC-Insured:
1,000,000 Aaa* 5.125% due 5/1/22 1,043,310
1,000,000 Aaa* 5.375% due 7/1/30 1,035,990
1,000,000 Aaa* 5.250% due 5/1/32 1,034,850
355,000 NR Pennsylvania Housing Finance Agency, 7.750% due 12/1/07 (b) 399,315
Pennsylvania State Higher Education Facilities Authority Revenue:
1,000,000 AAA Clarion University Foundation Inc., Series A, XLCA-Insured,
5.250% due 7/1/18 1,094,080
1,000,000 A Drexel University, 6.000% due 5/1/29 1,075,270
500,000 NR Philadelphia Hospitals & Higher Education Facilities Authority
Revenue, Chestnut Hill College, 6.000% due 10/1/29 485,910
1,000,000 AAA Philadelphia School District, Series A, FSA-Insured,
5.500% due 2/1/31 1,058,780
1,000,000 AAA Plum Boro School District, FGIC-Insured, 5.250% due 9/15/30 1,030,760
80,000 AAA Scranton-Lackawanna Health & Welfare Authority Revenue,
(University of Scranton Project), AMBAC-Insured,
10.000% due 10/1/03 (b) 80,000
1,000,000 AAA State Public School Building Authority, School Revenue,
(Daniel Bonne School District Project), MBIA-Insured,
5.000% due 4/1/22 1,037,500
2,210,000 AA+ Swarthmore Boro Authority, College Revenue,
5.250% due 9/15/20 2,383,286
- ---------------------------------------------------------------------------------------------------------
19,228,063
- ---------------------------------------------------------------------------------------------------------
FINANCE -- 1.3%
1,000,000 BBB- Virgin Islands Public Finance Authority Revenue, Gross Receipts
Taxes, Series A, 6.500% due 10/1/24 1,118,540
- ---------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
9 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) SEPTEMBER 30, 2003
PENNSYLVANIA PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
GENERAL OBLIGATION -- 10.0%
Allegheny County GO:
$ 1,000,000 AAA Series C-52, FGIC-Insured, 5.250% due 11/1/21 $ 1,058,200
1,000,000 AAA Series C-55, MBIA-Insured, 5.375% due 11/1/17 1,108,590
1,000,000 AAA Armstrong County GO, MBIA-Insured, 5.400% due 6/1/31 1,041,920
1,000,000 AAA Dauphin County GO, Second Series, AMBAC-Insured,
5.125% due 11/15/22 1,039,220
1,000,000 Aaa* Luzerne County, Series A, MBIA-Insured, 5.250% due 11/15/18 1,093,080
1,000,000 AA Pennsylvania State GO, First Series, 5.250% due 2/1/19 1,084,570
1,660,000 AAA Pittsburgh County GO, Series A, AMBAC-Insured,
5.250% due 9/1/22 1,757,044
140,000 AAA York GO, AMBAC-Insured, 8.875% due 6/1/06 (b) 156,916
- ---------------------------------------------------------------------------------------------------------
8,339,540
- ---------------------------------------------------------------------------------------------------------
HOSPITAL -- 15.2%
Allegheny County Hospital Development Authority Revenue:
1,000,000 A Catholic Health East Issue, 5.375% due 11/15/22 1,013,240
500,000 AAA General Hospital Project, Series A, MBIA-Insured,
(Call 9/1/07 @ 100), 6.250% due 9/1/20 (c)(d) 583,245
345,000 NR Montefiore Hospital Association, Western Pennsylvania,
6.875% due 7/1/09 (b) 394,821
165,000 AAA Berks County Municipal Authority, Hospital Revenue,
Community General Hospital, AMBAC-Insured,
9.500% due 7/1/05 (b) 180,964
1,625,000 AAA Cambria County Hospital Development Authority, Hospital
Revenue, Conemaugh Valley Memorial Hospital,
7.625% due 9/1/11 (b) 1,969,549
1,255,000 AAA Grove City Area Hospital Authority Revenue, (Woodland Place
Project), FGIC-Insured, 5.500% due 3/1/25+ 1,329,396
1,000,000 BBB+ Hazleton Health Services Authority, Hospital Revenue,
St. Joseph's Medical Center, 6.200% due 7/1/26 929,830
1,000,000 A- Horizon Hospital System Authority, Hospital Revenue, Horizon
Hospital Systems Inc., 6.350% due 5/15/26 1,035,810
1,000,000 A Lehigh County General Purpose Authority Revenue,
Lehigh Valley Health Network, Series A,
5.000% due 7/1/33 956,700
1,000,000 AA Mifflin County Hospital Authority Revenue, Radian-Insured,
6.200% due 7/1/30 1,108,650
1,000,000 A Pennsylvania State Higher Education Facilities Authority Revenue,
UPMC Health Systems, Series A, 6.000% due 1/15/31 1,045,660
75,000 Aaa* Philadelphia Hospital Authority Revenue, (United Hospital Inc.
Project), (Call 7/1/05 @ 100), 10.875% due 7/1/08 (c) 85,499
See Notes to Financial Statements.
10 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) SEPTEMBER 30, 2003
PENNSYLVANIA PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
HOSPITAL -- 15.2% (CONTINUED)
$ 525,000 AA Potter County Hospital Authority Revenue, Charles Cole
Memorial Hospital, Radian-Insured, 6.050% due 8/1/24 $ 570,381
1,075,000 BBB- Puerto Rico Industrial, Tourist, Educational, Medical &
Environmental Control Facilities, (Ryder Memorial Hospital
Project), Series A, 6.700% due 5/1/24 1,087,298
750,000 BB+ Scranton-Lackawanna Health & Welfare Authority Revenue,
(Moses Taylor Hospital Project), 6.250% due 7/1/20 468,375
- ---------------------------------------------------------------------------------------------------------
12,759,418
- ---------------------------------------------------------------------------------------------------------
HOUSING: MULTI-FAMILY -- 0.3%
205,000 AAA Pittsburgh Urban Redevelopment Authority, Mortgage Revenue,
Series B, FNMA/GNMA-Collateralized, 6.950% due 10/1/10 (e) 209,629
- ---------------------------------------------------------------------------------------------------------
HOUSING: SINGLE-FAMILY -- 5.1%
Allegheny County Residential Finance Authority, Mortgage
Revenue, Single-Family Mortgage, GNMA-Collateralized:
825,000 Aaa* Series FF-2, 6.000% due 11/1/31 (e) 862,133
840,000 Aaa* Series II-2, 5.900% due 11/1/32 (e) 874,406
Series Z:
940,000 Aaa* 6.875% due 5/1/26 (e) 975,137
700,000 Aaa* Zero coupon due 5/1/27 (e) 122,521
800,000 AA+ Pennsylvania Housing Finance Agency, Single-Family Mortgage
Revenue, Series 40, 6.900% due 4/1/25 (e) 820,136
610,000 AAA Puerto Rico Housing, Bank & Finance Agency, Single-Family
Mortgage Revenue, Affordable Housing Mortgage, Portfolio I,
FHLMC/FNMA/GNMA-Collateralized, 6.250% due 4/1/29 (e) 632,808
- ---------------------------------------------------------------------------------------------------------
4,287,141
- ---------------------------------------------------------------------------------------------------------
INDUSTRIAL DEVELOPMENT -- 6.8%
1,000,000 BBB+ Allegheny County IDA Revenue, Environmental Improvement,
USX Corp., Series A, 6.700% due 12/1/20 1,044,820
1,000,000 BBB Bradford County IDA, Solid Waste Disposal Revenue,
(International Paper Co.), Series A, 6.600% due 3/1/19 (e) 1,041,670
1,000,000 BBB Erie County IDA, Environmental Improvement Revenue,
(International Paper Co. Project), Series A,
7.625% due 11/1/18 (e)+ 1,049,140
1,000,000 NR Pennsylvania Economic Development Financing Authority,
Exempt Facilities Revenue, National Gypsum Co.,
6.250% due 11/1/27 (e) 948,790
500,000 AAA Philadelphia Authority for IDR, Series B, AMBAC-Insured,
5.250% due 7/1/31 517,705
See Notes to Financial Statements.
11 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) SEPTEMBER 30, 2003
PENNSYLVANIA PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
INDUSTRIAL DEVELOPMENT -- 6.8% (CONTINUED)
$ 1,000,000 AAA Philadelphia Authority for Industrial Development Lease Revenue,
Series B, FSA-Insured, 5.500% due 10/1/19 $ 1,108,330
- ---------------------------------------------------------------------------------------------------------
5,710,455
- ---------------------------------------------------------------------------------------------------------
LIFE CARE -- 8.0%
1,000,000 BBB+ Bucks County IDA Revenue, (Pennswood Village Project),
Series A, 6.000% due 10/1/34 1,031,840
1,260,000 AA Erie County Hospital Authority Health Facilities Revenue,
(St. Mary's Home Project), Radian-Insured,
6.000% due 8/15/23+ 1,379,511
1,100,000 A- Lancaster County Hospital Authority Revenue, (Willow Valley
Retirement Project), 5.875% due 6/1/31 1,128,919
1,650,000 NR Lancaster IDA Revenue, (Garden Spot Village Project),
Series A, 7.625% due 5/1/31 1,741,410
500,000 NR Montgomery County Higher Education & Health Authority
Revenue, Temple Continuing Care Center, 6.750% due 7/1/29 220,000
125,000 BBB+ Montgomery County IDA, Retirement Community Revenue,
Adult Communities Total Services, Series B,
5.625% due 11/15/12 132,419
1,000,000 AA Northampton County IDA Revenue, (Moravian Hall Square
Project), Radian-Insured, 5.500% due 7/1/19 1,077,400
- ---------------------------------------------------------------------------------------------------------
6,711,499
- ---------------------------------------------------------------------------------------------------------
MISCELLANEOUS -- 8.9%
500,000 A-++ Allegheny County Redevelopment Authority, Tax Increment
Revenue, (Waterfront Project), Series A,
6.300% due 12/15/18 (d) 556,135
Dauphin County General Authority:
1,205,000 NR Hotel & Conference Center, Hyatt Regency, 6.200% due 1/1/29 982,184
1,500,000 NR Office & Package, Riverfront Office, 6.000% due 1/1/25+ 1,425,660
1,000,000 AAA Delaware Valley Regional Finance Authority, Local Government
Revenue, Series A, AMBAC-Insured, 5.500% due 8/1/28+ 1,108,600
1,300,000 NR Harrisburg Redevelopment Authority, First Mortgage-Office
Building, 6.750% due 5/15/25 1,308,086
1,560,000 NR New Morgan Municipal Authority Office Revenue, (Commonwealth
Office Project), Series A, 6.500% due 6/1/25 1,596,067
600,000 B+ Puerto Rico Industrial, Tourist, Educational, Medical &
Environmental Control Facilities, (San Lucas & Cristo Project),
Series A, 5.750% due 6/1/19 506,562
- ---------------------------------------------------------------------------------------------------------
7,483,294
- ---------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
12 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) SEPTEMBER 30, 2003
PENNSYLVANIA PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
POLLUTION CONTROL -- 4.4%
$ 1,000,000 BBB Delaware County IDA, Resource Recovery Facility Revenue,
Series A, 6.200% due 7/1/19+ $ 1,032,210
1,000,000 AAA Harrisburg Authority, Resource Recovery Facility Revenue,
Series A, FSA-Insured, 5.500% due 9/1/25+ 1,161,740
1,000,000 BB- New Morgan IDA, Solid Waste Disposal Revenue, (New Morgan
Landfill Co., Inc. Project), 6.500% due 4/1/19 (e) 965,970
500,000 BBB- Pennsylvania Economic Development Financing Authority,
Resource Recovery Revenue, (Colver Project), Series D,
7.150% due 12/1/18 (e) 517,350
- ---------------------------------------------------------------------------------------------------------
3,677,270
- ---------------------------------------------------------------------------------------------------------
SPECIAL OBLIGATION -- 1.4%
255,000 Aaa* Hopewell Township, Special Obligation, 10.600% due 5/1/13 (b) 326,907
730,000 AAA Westmoreland County Municipal Authority, Special Obligation,
9.125% due 7/1/10 (b) 856,998
- ---------------------------------------------------------------------------------------------------------
1,183,905
- ---------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 10.1%
1,000,000 A- Delaware River Joint Toll Bridge Commission, Bridge Revenue,
5.250% due 7/1/18+ 1,077,390
3,375,000 AAA Delaware River Port Authority Pennsylvania & New Jersey, RITES,
FSA-Insured, 9.676% due 1/1/10 (f) 4,156,178
Pennsylvania State Turnpike Commission, AMBAC-Insured:
1,500,000 AAA 5.000% due 7/15/21 1,570,380
1,500,000 AAA 5.500% due 7/15/32 1,620,390
- ---------------------------------------------------------------------------------------------------------
8,424,338
- ---------------------------------------------------------------------------------------------------------
UTILITIES -- 5.6%
1,750,000 AAA Allegheny County Sanitation Authority, Sewer Revenue,
MBIA-Insured, 5.375% due 12/1/17 1,936,445
480,000 AAA Bristol Township Authority, Sewer Revenue, MBIA-Insured,
10.125% due 4/1/09 (b) 595,910
125,000 AAA Coatesville Water Guaranteed Revenue, 6.250% due 10/15/13 (b) 145,496
1,000,000 NR Erie Sewer Authority, Sewer Revenue, MBIA-Insured,
(Call 6/1/10 @ 100), 6.000% due 6/1/21 (c)+ 1,193,180
400,000 AAA Guam Power Authority Revenue, Series A, (Call 10/1/04 @ 102),
6.750% due 10/1/24 (c)+ 431,044
260,000 AAA West Chester Sewer Revenue, 9.750% due 5/1/07 (b) 305,014
See Notes to Financial Statements.
13 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) SEPTEMBER 30, 2003
PENNSYLVANIA PORTFOLIO
FACE
AMOUNT RATING(a) SECURITY VALUE
=========================================================================================================
UTILITIES -- 5.6% (CONTINUED)
$ 45,000 Aaa* Westmoreland County Municipal Authority, Water Revenue,
8.500% due 7/1/04 (b) $ 47,513
- ---------------------------------------------------------------------------------------------------------
4,654,602
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost-- $80,523,396**) $83,787,694
=========================================================================================================
(a) All ratings are by Standard & Poor's Ratings Service, except for those
identified by an asterisk (*) which are rated by Moody's Investors Service
and those identified by a double dagger (++) are rated by Fitch Ratings.
(b) Bonds are escrowed to maturity with U.S. government securities and are
considered by the Manager to be triple-A rated even if the issuer has not
applied for new ratings.
(c) Pre-Refunded bonds are escrowed with U.S. government securities and are
considered by the Manager to be triple-A rated even if the issuer has not
applied for new ratings.
(d) All or a portion of this security is held as collateral for open futures
contracts commitments (See Note 6).
(e) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(f) Variable interest rate - subject to periodic change.
+ All or a portion of this security has been segregated for open futures
contracts commitments (See Note 6).
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 15 and 16 for definitions of ratings and certain abbreviations.
See Notes to Financial Statements.
14 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
BOND RATINGS (UNAUDITED)
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings Service ("Standard & Poor's")-- Ratings from "AA" to
"CCC" may be modified by the addition of a plus (+) or minus (-) sign to show
relative standings within the major rating categories.
AAA -- Bonds rated "AAA" have the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA -- Bonds rated "AA" have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in a
small degree.
A -- Bonds rated "A" have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
bonds in higher rated categories.
BBB -- Bonds rated "BBB" are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for bonds in this
category than in higher rated categories.
BB, B -- Bonds rated "BB," "B" and "CCC" are regarded, on balance, as
and CCC predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the
obligation. "BB" indicates the lowest degree of speculation than
"B," and "CCC" the highest degree of speculation. While such bonds
will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to
adverse conditions.
Moody's Investors Service ("Moody's") -- Numerical modifiers 1, 2, and 3 may be
applied to each generic rating from "Aa" to "B", where 1 is the highest and 3
the lowest rating within its generic category.
Aaa -- Bonds rated "Aaa" are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally
strong position of such issues.
Aa -- Bonds rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in
"Aaa" securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in "Aaa" securities.
A -- Bonds rated "A" possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate
but elements may be present which suggest a susceptibility to
impairment some time in the future.
Baa -- Bonds rated "Baa" are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba -- Bonds rated "Ba" are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and thereby
not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes in this class.
B -- Bonds rates "B" generally lack characteristics of desirable
investments. Assurance of interest and principal payment or of
maintenance of other terms of the contract over any long period of
time may be small.
15 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
BOND RATINGS (UNAUDITED) (CONTINUED)
Fitch Ratings ("Fitch") -- Rating may be modified by the addition of a plus (+)
sign or minus (-) sign to show relative standings within the major ratings
categories.
A -- Bonds rated "A" are considered to be investment-grade and of high
credit quality. The obligor's ability to pay interest and/or
dividends and repay principal is considered to be strong, but may be
more vulnerable to adverse changes in economic conditions and
circumstances than debt or preferred securities with higher ratings.
NR -- Indicates that the bond is not rated by Standard & Poor's, Moody's
or Fitch.
SHORT-TERM SECURITY RATINGS (UNAUDITED)
SP-1 -- Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined to
possess overwhelming safety characteristics are denoted with a plus
(+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable rate
demand obligation (VRDO) rating indicating that the degree of safely
regarding timely payment is either overwhelming or very strong;
those issues determined to possess overwhelming safety
characteristics are denoted with a (+) sign.
P-1 -- Moody's highest rating for commercial paper and for VRDO prior to
the advent of the VMIG 1 rating.
VMIG 1 -- Moody's highest rating for issues having demand feature-- VRDO.
ABBREVIATIONS* (UNAUDITED)
ABAG -- Association of Bay Area
Governments
ACA -- American Capital Assurance
AIG -- American International Guaranty
AMBAC -- American Municipal Bond Assurance Corporation
BAN -- Bond Anticipation Notes
BIG -- Bond Investors Guaranty
CGIC -- Capital Guaranty Insurance
Company
CHFCLI -- California Health Facility
Construction Loan Insurance
CONNIE -- College Construction Loan
LEE Insurance Association
COP -- Certificate of Participation
EDA -- Economic Development
Authority
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance
Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage
Corporation
FLAIRS -- Floating Adjustable Interest Rate
Securities
FNMA -- Federal National Mortgage
Association
FRTC -- Floating Rate Trust Certificates
FSA -- Financial Security Assurance
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage
Association
GO -- General Obligation
HDC -- Housing Development
Corporation
HFA -- Housing Finance Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors
Assurance Corporation
MFH -- Multi-Family Housing
MVRICS -- Municipal Variable Rate Inverse
Coupon Security
PCR -- Pollution Control Revenue
Radian -- Radian Asset Assurance
RAN -- Revenue Anticipation Notes
RIBS -- Residual Interest Bonds
RITES -- Residual Interest Tax-Exempt
Securities
SYCC -- Structured Yield Curve Certificate
TAN -- Tax Anticipation Notes
TECP -- Tax-Exempt Commercial Paper
TOB -- Tender Option Bonds
TRAN -- Tax and Revenue Anticipation
Notes
VA -- Veterans Administration
VRWE -- Variable Rate Wednesday Demand
XLCA -- XLCapital Assurance
- --------------
* Abbreviations may or may not appear in the schedule of investments.
16 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) SEPTEMBER 30, 2003
GEORGIA PENNSYLVANIA
PORTFOLIO PORTFOLIO
================================================================================
ASSETS:
Investments, at value (Cost -- $58,637,212 and
$80,523,396, respectively) $ 62,819,122 $ 83,787,694
Cash 1,312,155 543,704
Interest receivable 1,033,330 1,452,723
Receivable for Fund shares sold 205,615 123,851
Receivable for securities sold -- 10,000
Prepaid expenses 5,657 2,274
- --------------------------------------------------------------------------------
TOTAL ASSETS 65,375,879 85,920,246
- --------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 1,000,698 --
Payable to broker-- variation margin 226,563 317,188
Payable for Fund shares reacquired -- 38,550
Management fees payable 41,811 31,558
Distribution plan fees payable 6,662 12,518
Accrued expenses 34,120 38,724
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 1,309,854 438,538
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $64,066,025 $85,481,708
================================================================================
NET ASSETS:
Par value of shares of beneficial interest $ 4,841 $ 6,509
Capital paid in excess of par value 62,183,510 84,795,974
Undistributed (overdistributed) net
investment income 39,350 (38,751)
Accumulated net realized loss from investment
transactions and futures contracts (1,730,305) (1,687,728)
Net unrealized appreciation of investments
and futures contracts 3,568,629 2,405,704
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $64,066,025 $85,481,708
================================================================================
SHARES OUTSTANDING:
Class A 3,285,812 2,735,520
------------------------------------------------------------------------------
Class B 843,259 2,784,878
------------------------------------------------------------------------------
Class L 711,571 988,249
------------------------------------------------------------------------------
NET ASSET VALUE:
Class A (and redemption price) $13.25 $13.16
------------------------------------------------------------------------------
Class B * $13.21 $13.12
------------------------------------------------------------------------------
Class L * $13.20 $13.11
------------------------------------------------------------------------------
MAXIMUM PUBLIC OFFERING PRICE PER SHARE:
Class A (net asset value plus 4.17%
of net asset value) $13.80 $13.71
------------------------------------------------------------------------------
Class L (net asset value plus 1.01%
of net asset value) $13.33 $13.24
================================================================================
*Redemption price is NAV of Class B and L shares reduced by a 4.50% and 1.00%
contingent deferred sales charge, respectively, if shares are redeemed within
one year from purchase payment (See Note 4).
See Notes to Financial Statements.
17 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2003
GEORGIA PENNSYLVANIA
PORTFOLIO PORTFOLIO
================================================================================
INVESTMENT INCOME:
Interest $ 1,728,261 $ 2,427,662
- --------------------------------------------------------------------------------
EXPENSES:
Management fees (Note 4) 141,113 197,295
Distribution plan fees (Note 7) 101,381 195,948
Shareholder communications (Note 7) 9,005 18,313
Custody 8,070 12,521
Shareholder servicing fees (Note 7) 7,481 15,580
Audit and legal 6,386 9,543
Registration fees 2,519 1,587
Trustees' fees 241 552
Other 1,418 2,665
- --------------------------------------------------------------------------------
TOTAL EXPENSES 277,614 454,004
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,450,647 1,973,658
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES 5 AND 6):
Realized Gain (Loss) From:
Investment transactions 101,459 (144,146)
Futures contracts 562,641 762,244
- --------------------------------------------------------------------------------
NET REALIZED GAIN 664,100 618,098
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments
and Futures Contracts:
Beginning of period 4,086,277 3,152,436
End of period 3,568,629 2,405,704
DECREASE IN NET UNREALIZED APPRECIATION (517,648) (746,732)
- --------------------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENTS AND FUTURES CONTRACTS 146,452 (128,634)
- --------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM OPERATIONS $ 1,597,099 $ 1,845,024
================================================================================
See Notes to Financial Statements.
18 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2003 (UNAUDITED)
AND THE YEAR ENDED MARCH 31, 2003
GEORGIA PORTFOLIO SEPTEMBER 30 MARCH 31
================================================================================
OPERATIONS:
Net investment income $ 1,450,647 $ 3,107,431
Net realized gain (loss) 664,100 (680,856)
Increase (decrease) in net
unrealized appreciation (517,648) 2,701,663
- --------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM OPERATIONS 1,597,099 5,128,238
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM (NOTES 3 AND 8):
Net investment income (1,449,219) (3,059,371)
- --------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (1,449,219) (3,059,371)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 9):
Net proceeds from sale of shares 5,895,671 10,562,344
Net asset value of shares issued for
reinvestment of dividends 590,148 1,133,646
Cost of shares reacquired (5,446,768) (13,551,520)
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 1,039,051 (1,855,530)
- --------------------------------------------------------------------------------
INCREASE IN NET ASSETS 1,186,931 213,337
NET ASSETS:
- --------------------------------------------------------------------------------
Beginning of period 62,879,094 62,665,757
- --------------------------------------------------------------------------------
END OF PERIOD* $64,066,025 $62,879,094
================================================================================
* Includes undistributed net investment income of: $39,350 $37,922
================================================================================
See Notes to Financial Statements.
19 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2003 (UNAUDITED)
AND THE YEAR ENDED MARCH 31, 2003
PENNSYLVANIA PORTFOLIO SEPTEMBER 30 MARCH 31
================================================================================
OPERATIONS:
Net investment income $ 1,973,658 $ 4,136,756
Net realized gain (loss) 618,098 (468,545)
Increase (decrease) in net unrealized appreciation (746,732) 3,002,322
- --------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM OPERATIONS 1,845,024 6,670,533
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM (NOTES 3 AND 8):
Net investment income (2,018,842) (4,135,340)
In excess of net investment income -- (82,307)
- --------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (2,018,842) (4,217,647)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 9):
Net proceeds from sale of shares 9,597,870 17,626,290
Net asset value of shares issued for
reinvestment of dividends 1,121,358 2,340,148
Cost of shares reacquired (11,401,380) (20,031,287)
- --------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS (682,152) (64,849)
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS (855,970) 2,388,037
NET ASSETS:
Beginning of period 86,337,678 83,949,641
- --------------------------------------------------------------------------------
END OF PERIOD* $85,481,708 $86,337,678
================================================================================
* Includes undistributed (overdistributed)
net investment income of: $(38,751) $6,433
================================================================================
See Notes to Financial Statements.
20 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Significant Accounting Policies
The Georgia and Pennsylvania Portfolios ("Funds") are separate investment funds
of the Smith Barney Muni Funds ("Trust"), a Massachusetts business trust, which
is registered under the Investment Company Act of 1940, as amended, as an
open-end non-diversified management investment company. The Trust consists of
these Funds and seven other separate investment funds: Florida, National, New
York, Limited Term, California Money Market, Massachusetts Money Market and New
York Money Market Portfolios. The financial statements and financial highlights
for the other funds are presented in separate shareholder reports.
The significant accounting policies consistently followed by the Funds are: (a)
security transactions are accounted for on trade date; (b) securities are valued
at the mean between the bid and asked prices provided by an independent pricing
service that are based on transactions in municipal obligations, quotations from
municipal bond dealers, market transactions in comparable securities and various
relationships between securities; (c) securities for which market quotations are
not available will be valued in good faith at fair value by or under the
direction of the Board of Trustees; (d) securities maturing within 60 days are
valued at cost plus accreted discount or minus amortized premium, which
approximates value; (e) gains or losses on the sale of securities are calculated
by using the specific identification method; (f) interest income, adjusted for
amortization of premium and accretion of discount, is recorded on an accrual
basis; (g) dividends and distributions to shareholders are recorded on the
ex-dividend date; (h) class specific expenses are charged to each Fund and each
class; management fees and general fund expenses are allocated on the basis of
relative net assets of each Fund and each class or on another reasonable basis;
(i) each Fund intends to comply with the applicable provisions of the Internal
Revenue Code of 1986, as amended, pertaining to regulated investment companies
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes; (j) the character of income
and gains to be distributed is determined in accordance with income tax
regulations which may differ from accounting principles generally accepted in
the United States of America; and (k) 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.
21 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
2. Portfolio Concentration
Since the Georgia and Pennsylvania Portfolios invest primarily in obligations of
issuers within Georgia and Pennsylvania, respectively, each Fund is subject to
possible concentration risks associated with economic, political, or legal
developments or industrial or regional matters specifically affecting the
respective state in which it invests.
3. Exempt-Interest Dividends and Other Distributions
Each Fund intends to satisfy conditions that will enable interest from municipal
securities, which is exempt from regular Federal income tax and from designated
state income taxes, to retain such tax-exempt status when distributed to the
shareholders of the Fund.
It is the Funds' policy to distribute dividends monthly. Capital gain
distributions, if any, are taxable to shareholders, and are declared and paid at
least annually.
4. Management Agreement and Other Transactions
Smith Barney Fund Management LLC ("SBFM"), an indirect wholly-owned subsidiary
of Citigroup Inc. ("Citigroup"), acts as investment manager to the Funds. The
Funds pay SBFM a management fee calculated at an annual rate of 0.45% of each
Fund's respective average daily net assets. This fee is calculated daily and
paid monthly.
Citicorp Trust Bank, fsb. ("CTB"), another subsidiary of Citigroup, acts as the
Funds' transfer agent and PFPC Inc. ("PFPC") acts as the Funds' sub-transfer
agent. CTB receives account fees and asset-based fees that vary according to the
size and type of account. PFPC is responsible for shareholder recordkeeping and
financial processing for all shareholder accounts and is paid by CTB. For the
six months ended September 30, 2003, the Funds paid transfer agent fees totaling
$18,388 to CTB.
22 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The totals for each Fund were as follows:
TRANSFER AGENT FEES
================================================================================
Georgia Portfolio $ 6,407
- --------------------------------------------------------------------------------
Pennsylvania Portfolio 11,981
================================================================================
Citigroup Global Markets Inc. ("CGM"), another indirect wholly-owned subsidiary
of Citigroup, acts as the Funds' distributor.
There are maximum initial sales charges of 4.00% and 1.00% for Class A and L
shares, respectively. There is a contingent deferred sales charge ("CDSC") of
4.50% on Class B shares, which applies if redemption occurs within one year from
purchase payment. This CDSC declines by 0.50% the first year after purchase
payment and thereafter by 1.00% per year until no CDSC is incurred. Class L
shares also have a 1.00% CDSC, which applies if redemption occurs within one
year from purchase payment. In certain cases, Class A shares have a 1.00% CDSC,
which applies if redemption occurs within one year from purchase payment. This
CDSC only applies to those purchases of Class A shares, which, when combined
with current holdings of Class A shares, equal or exceed $500,000 in the
aggregate. These purchases do not incur an initial sales charge.
For the six months ended September 30, 2003, CDSCs paid to CGM and sales charges
received by CGM were approximately:
CDSCS SALES CHARGES
------------------------------ -------------------
CLASS A CLASS B CLASS L CLASS A CLASS L
================================================================================
Georgia Portfolio -- $ 5,000 -- $24,000 $7,000
- --------------------------------------------------------------------------------
Pennsylvania Portfolio -- 18,000 -- 38,000 5,000
================================================================================
All officers and one Trustee of the Trust are employees of Citigroup or its
affiliates.
23 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. Investments
During the six months ended September 30, 2003, the aggregate cost of purchases
and proceeds from sales of investments (including maturities of long-term
investments, but excluding short-term investments) were as follows:
GEORGIA PENNSYLVANIA
PORTFOLIO PORTFOLIO
================================================================================
Purchases $8,188,604 $10,487,371
- --------------------------------------------------------------------------------
Sales 8,696,294 11,420,507
================================================================================
At September 30, 2003, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
GEORGIA PENNSYLVANIA
PORTFOLIO PORTFOLIO
================================================================================
Gross unrealized appreciation $4,985,251 $4,257,242
Gross unrealized depreciation (803,341) (992,944)
- --------------------------------------------------------------------------------
Net unrealized appreciation $4,181,910 $3,264,298
================================================================================
6. Futures Contracts
Securities or cash equal to the initial margin amount are either deposited with
the broker or segregated by the custodian upon entering into the futures
contract. Additional securities are also segregated up to the current market
value of the futures contracts. During the period the futures contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking to market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin payments are
made or received and recognized as assets due from or liabilities due to broker,
depending upon whether unrealized gains or losses are incurred. When the
contract is closed, the Fund records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transactions and
the Fund's basis in the contract.
The Fund enters into such contracts typically to hedge a portion of its
portfolio. The Fund bears the market risk that arises from changes in the value
of the financial instruments and securities indices.
24 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
At September 30, 2003, the Funds had the following open futures contracts:
NUMBER OF BASIS MARKET UNREALIZED
GEORGIA PORTFOLIO CONTRACTS EXPIRATION VALUE VALUE LOSS
===============================================================================================
TO SELL:
20-year U.S. Treasury Bond 125 12/03 $13,406,250 $14,019,531 $(613,281)
===============================================================================================
NUMBER OF BASIS MARKET UNREALIZED
PENNSYLVANIA PORTFOLIO CONTRACTS EXPIRATION VALUE VALUE LOSS
===============================================================================================
TO SELL:
20-year U.S. Treasury Bond 175 12/03 $18,768,750 $19,627,344 $(858,594)
===============================================================================================
7. Class Specific Expenses
Pursuant to a Rule 12b-1 Distribution Plan, each Fund pays a service fee with
respect to Class A, B and L shares, calculated at an annual rate of 0.15% of the
average daily net assets of each respective class. In addition, each Fund pays a
distribution fee with respect to its Class B and L shares calculated at the
annual rate of 0.50% and 0.55% of the average daily net assets of each class,
respectively. For the six months ended September 30, 2003, total Rule 12b-1
Distribution Plan fees, which are accrued daily and paid monthly, were as
follows:
CLASS A CLASS B CLASS L
================================================================================
Georgia Portfolio $31,419 $ 38,014 $31,948
- --------------------------------------------------------------------------------
Pennsylvania Portfolio 27,685 122,737 45,526
================================================================================
For the six months ended September 30, 2003, total Shareholder Servicing fees
were as follows:
CLASS A CLASS B CLASS L
================================================================================
Georgia Portfolio $2,709 $2,653 $2,119
- --------------------------------------------------------------------------------
Pennsylvania Portfolio 4,113 8,447 3,020
================================================================================
For the six months ended September 30, 2003, total Shareholder Communication
expenses were as follows:
CLASS A CLASS B CLASS L
================================================================================
Georgia Portfolio $3,238 $3,190 $2,577
- --------------------------------------------------------------------------------
Pennsylvania Portfolio 5,267 9,569 3,477
================================================================================
25 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
8. Distributions Paid to Shareholders by Class
SIX MONTHS ENDED YEAR ENDED
GEORGIA PORTFOLIO SEPTEMBER 30, 2003 MARCH 31, 2003
================================================================================
NET INVESTMENT INCOME
Class A $1,008,280 $2,147,792
Class B 247,851 542,486
Class L 193,088 369,093
- --------------------------------------------------------------------------------
Total $1,449,219 $3,059,371
================================================================================
SIX MONTHS ENDED YEAR ENDED
PENNSYLVANIA PORTFOLIO SEPTEMBER 30, 2003 MARCH 31, 2003
================================================================================
CLASS A
Net investment income $908,134 $1,781,120
In excess of net investment income -- 33,526
- --------------------------------------------------------------------------------
Total $908,134 $1,814,646
================================================================================
CLASS B
Net investment income $828,086 $1,765,591
In excess of net investment income -- 36,467
- --------------------------------------------------------------------------------
Total $828,086 $1,802,058
================================================================================
CLASS L
Net investment income $282,622 $ 588,629
In excess of net investment income -- 12,314
- --------------------------------------------------------------------------------
Total $282,622 $ 600,943
================================================================================
9. Shares of Beneficial Interest
At September 30, 2003, the Trust had an unlimited amount of shares of beneficial
interest authorized with a par value of $0.001 per share. The Funds have the
ability to issue multiple classes of shares. Each share of a class represents an
identical interest in its respective Fund and has the same rights, except that
each class bears certain expenses specifically related to the distribution of
its shares.
26 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Transactions in shares of each class were as follows:
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2003 MARCH 31, 2003
-------------------------- -------------------------
GEORGIA PORTFOLIO SHARES AMOUNT SHARES AMOUNT
================================================================================
CLASS A
Shares sold 332,003 $ 4,373,120 475,111 $ 6,268,581
Shares issued on
reinvestment 24,798 328,339 45,392 597,537
Shares reacquired (227,644) (3,020,671) (719,314) (9,441,536)
- --------------------------------------------------------------------------------
Net Increase (Decrease) 129,157 $ 1,680,788 (198,811) $ (2,575,418)
================================================================================
CLASS B
Shares sold 55,158 $ 728,703 185,294 $ 2,420,856
Shares issued on
reinvestment 9,046 119,448 20,927 274,732
Shares reacquired (151,056) (1,991,873) (180,670) (2,376,952)
- --------------------------------------------------------------------------------
Net Increase (Decrease) (86,852) $(1,143,722) 25,551 $ 318,636
================================================================================
CLASS L
Shares sold 59,870 $ 793,848 142,156 $ 1,872,907
Shares issued on
reinvestment 10,793 142,361 19,920 261,377
Shares reacquired (32,841) (434,224) (131,780) (1,733,032)
- --------------------------------------------------------------------------------
Net Increase 37,822 $ 501,985 30,296 $ 401,252
================================================================================
PENNSYLVANIA PORTFOLIO
================================================================================
CLASS A
Shares sold 496,268 $ 6,563,325 559,298 $ 7,372,675
Shares issued on
reinvestment 40,425 533,042 82,813 1,089,471
Shares reacquired (389,156) (5,093,742) (819,137) (10,782,637)
- --------------------------------------------------------------------------------
Net Increase (Decrease) 147,537 $ 2,002,625 (177,026) $ (2,320,491)
================================================================================
CLASS B
Shares sold 157,240 $ 2,078,284 580,378 $ 7,640,541
Shares issued on
reinvestment 32,518 427,436 70,314 922,538
Shares reacquired (387,911) (5,104,398) (497,549) (6,527,297)
- --------------------------------------------------------------------------------
Net Increase (Decrease) (198,153) $(2,598,678) 153,143 $ 2,035,782
================================================================================
CLASS L
Shares sold 72,821 $ 956,261 198,570 $ 2,613,074
Shares issued on
reinvestment 12,250 160,880 25,026 328,139
Shares reacquired (91,433) (1,203,240) (207,219) (2,721,353)
- --------------------------------------------------------------------------------
Net Increase (Decrease) (6,362) $ (86,099) 16,377 $ 219,860
================================================================================
27 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
10. Subsequent Event
The Funds have received the following information from Citigroup Asset
Management ("CAM"), the Citigroup business unit which includes the Funds'
Investment Manager and other investment advisory companies, all of which are
indirect, wholly-owned subsidiaries of Citigroup. CAM is reviewing its entry,
through an affiliate, into the transfer agent business in the period 1997-1999.
As CAM currently understands the facts, at the time CAM decided to enter the
transfer agent business, CAM sub-contracted for a period of five years certain
of the transfer agency services to a third party and also concluded a revenue
guarantee agreement with this sub-contractor providing that the sub-contractor
would guarantee certain benefits to CAM or its affiliates (the "Revenue
Guarantee Agreement"). In connection with the subsequent purchase of the
sub-contractor's business by an affiliate of the current sub-transfer agent
(PFPC Inc.) used by CAM on many of the funds it manages, this Revenue Guarantee
Agreement was amended eliminating those benefits in exchange for arrangements
that included a one-time payment from the sub-contractor.
The Boards of CAM-managed funds (the "Boards") were not informed of the Revenue
Guarantee Agreement with the sub-contractor at the time the Boards considered
and approved the transfer agent arrangements. Nor were the Boards informed of
the subsequent amendment to the Revenue Guarantee Agreement when that occurred.
CAM has begun to take corrective actions. CAM will pay to the applicable funds
$16 million (plus interest) that CAM and its affiliates received from the
Revenue Guarantee Agreement and its amendment. CAM also plans an independent
review to verify that the transfer agency fees charged by CAM were fairly priced
as compared to competitive alternatives. CAM is instituting new procedures and
making changes designed to ensure no similar arrangements are entered into in
the future.
CAM has briefed the SEC, the New York State Attorney General and other
regulators with respect to this matter, as well as the U.S. Attorney who is
investigating the matter. CAM is cooperating with governmental authorities on
this matter, the ultimate outcome of which is not yet determinable.
28 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
FINANCIAL HIGHLIGHTS
For a share of each class of beneficial interest outstanding throughout each
year ended March 31, unless otherwise noted:
CLASS A SHARES
---------------------------------------------------------------
GEORGIA PORTFOLIO 2003(1)(2) 2003(2) 2002(2) 2001(2) 2000(2) 1999(2)
===================================================================================================
NET ASSET VALUE,
BEGINNING OF PERIOD $13.22 $12.79 $13.08 $12.40 $13.43 $13.43
- ---------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income(3)(4) 0.32 0.66 0.65 0.64 0.65 0.62
Net realized and unrealized
gain (loss)(4) 0.03 0.42 (0.29) 0.69 (1.06) 0.12
- ---------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.35 1.08 0.36 1.33 (0.41) 0.74
- ---------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.32) (0.65) (0.65) (0.65) (0.62) (0.62)
In excess of net investment income -- -- (0.00)* -- -- (0.03)
Net realized gains -- -- -- -- -- (0.09)
- ---------------------------------------------------------------------------------------------------
Total Distributions (0.32) (0.65) (0.65) (0.65) (0.62) (0.74)
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.25 $13.22 $12.79 $13.08 $12.40 $13.43
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN(5) 2.66%++ 8.54% 2.76% 11.02% (2.97)% 5.61%
- ---------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $43,537 $41,740 $42,917 $45,594 $43,100 $34,680
- ---------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses(3)(6) 0.69%+ 0.72% 0.75% 0.75% 0.68% 0.64%
Net investment income(4) 4.83+ 4.98 4.97 5.08 4.74 4.63
- ---------------------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 14% 19% 43% 35% 98% 48%
===================================================================================================
(1) For the six months ended September 30, 2003 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) The Manager waived all or a portion of its fees for the year ended March
31, 1999. If such fees were not waived and expenses not reimbursed, the per
share decrease to net investment income would have been $0.01 and the
actual expense ratio would have been 0.74%.
(4) Effective April 1, 2001, the Fund adopted a change in the accounting method
which requires the Fund to amortize premiums and accrete all discounts.
Without the adoption of this change, for the year ended March 31, 2002, the
ratio of net investment income to average net assets would have been 4.95%.
In addition, the impact of this change to net investment income and net
realized and unrealized loss per share was less than $0.01. Per share
information, ratios and supplemental data for the periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
(5) Performance figures may reflect fee waivers and/or expense reimbursements.
Past performance is no guarantee of future results. In the absence of fee
waivers and/or expense reimbursements, the total return would be reduced.
(6) As a result of voluntary expense limitations, expense ratios will not
exceed 0.80%.
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
29 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of each class of beneficial interest outstanding throughout each
year ended March 31, unless otherwise noted:
CLASS B SHARES
--------------------------------------------------------------
GEORGIA PORTFOLIO 2003(1)(2) 2003(2) 2002(2) 2001(2) 2000(2) 1999(2)
==================================================================================================
NET ASSET VALUE,
BEGINNING OF PERIOD $13.19 $12.76 $13.07 $12.40 $13.42 $13.43
- --------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income(3)(4) 0.28 0.58 0.58 0.58 0.56 0.56
Net realized and unrealized
gain (loss)(4) 0.02 0.43 (0.30) 0.68 (1.03) 0.10
- --------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.30 1.01 0.28 1.26 (0.47) 0.66
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.28) (0.58) (0.59) (0.59) (0.55) (0.55)
In excess of net investment income -- -- (0.00)* -- -- (0.03)
Net realized gains -- -- -- -- -- (0.09)
- --------------------------------------------------------------------------------------------------
Total Distributions (0.28) (0.58) (0.59) (0.59) (0.55) (0.67)
- --------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.21 $13.19 $12.76 $13.07 $12.40 $13.42
- --------------------------------------------------------------------------------------------------
TOTAL RETURN(5) 2.31%++ 8.03% 2.12% 10.39% (3.45)% 4.99%
- --------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $11,139 $12,265 $11,544 $11,154 $11,503 $13,633
- --------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses(3)(6) 1.26%+ 1.26% 1.29% 1.30% 1.30% 1.15%
Net investment income(4) 4.25+ 4.45 4.42 4.56 4.47 4.12
- --------------------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 14% 19% 43% 35% 98% 48%
===================================================================================================
(1) For the six months ended September 30, 2003 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) The Manager waived all or a portion of its fees for the year ended March
31, 1999. If such fees were not waived and expenses not reimbursed, the per
share decrease to net investment income would have been $0.02 and the
actual expense ratio would have been 1.26%.
(4) Effective April 1, 2001, the Fund adopted a change in the accounting method
which requires the Fund to amortize premiums and accrete all discounts.
Without the adoption of this change, for the year ended March 31, 2002, the
ratio of net investment income to average net assets would have been 4.41%.
In addition, the impact of this change to net investment income and net
realized and unrealized loss per share was less than $0.01. Per share
information, ratios and supplemental data for the periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
(5) Performance figures may reflect fee waivers and/or expense reimbursements.
Past performance is no guarantee of future results. In the absence of fee
waivers and/or expense reimbursements, the total return would be reduced.
(6) As a result of voluntary expense limitations, expense ratios will not
exceed 1.30%.
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
30 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of each class of beneficial interest outstanding throughout each
year ended March 31, unless otherwise noted:
CLASS L SHARES
---------------------------------------------------------------
GEORGIA PORTFOLIO 2003(1)(2) 2003(2) 2002(2) 2001(2) 2000(2) 1999(2)(3)
===================================================================================================
NET ASSET VALUE,
BEGINNING OF PERIOD $13.17 $12.75 $13.05 $12.39 $13.41 $13.41
- ---------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income(4)(5) 0.28 0.57 0.57 0.57 0.56 0.55
Net realized and unrealized
gain (loss)(5) 0.03 0.42 (0.29) 0.67 (1.04) 0.12
- ---------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.31 0.99 0.28 1.24 (0.48) 0.67
- ---------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.28) (0.57) (0.58) (0.58) (0.54) (0.55)
In excess of net investment income -- -- (0.00)* -- -- (0.03)
Net realized gains -- -- -- -- -- (0.09)
- ---------------------------------------------------------------------------------------------------
Total Distributions (0.28) (0.57) (0.58) (0.58) (0.54) (0.67)
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.20 $13.17 $12.75 $13.05 $12.39 $13.41
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN(6) 2.36%++ 7.90% 2.15% 10.26% (3.51)% 5.01%
- ---------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $9,390 $8,874 $8,205 $7,460 $5,893 $7,304
- ---------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses(4)(7) 1.31%+ 1.33% 1.34% 1.35% 1.33% 1.20%
Net investment income(5) 4.20+ 4.38 4.39 4.48 4.44 4.07
- ---------------------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 14% 19% 43% 35% 98% 48%
===================================================================================================
(1) For the six months ended September 30, 2003 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L shares.
(4) The Manager waived all or a portion of its fees for the year ended March
31, 1999. If such fees were not waived and expenses not reimbursed, the per
share decrease to net investment income would have been $0.02 and the
actual expense ratio would have been 1.31%.
(5) Effective April 1, 2001, the Fund adopted a change in the accounting method
which requires the Fund to amortize premiums and accrete all discounts.
Without the adoption of this change, for the year ended March 31, 2002, the
ratio of net investment income to average net assets would have been 4.37%.
In addition, the impact of this change to net investment income and net
realized and unrealized loss per share was less than $0.01. Per share
information, ratios and supplemental data for the periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
(6) Performance figures may reflect fee waivers and/or expense reimbursements.
Past performance is no guarantee of future results. In the absence of fee
waivers and/or expense reimbursements, the total return would be reduced.
(7) As a result of voluntary expense limitations, expense ratios will not
exceed 1.35%.
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
31 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of each class of beneficial interest outstanding throughout each
year ended March 31, unless otherwise noted:
CLASS A SHARES
---------------------------------------------------------------
PENNSYLVANIA PORTFOLIO 2003(1)(2) 2003(2) 2002(2) 2001(2) 2000(2) 1999(2)
===================================================================================================
NET ASSET VALUE,
BEGINNING OF PERIOD $13.18 $12.79 $12.89 $12.18 $13.44 $13.54
- ---------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income(3)(4) 0.32 0.67 0.69 0.69 0.67 0.66
Net realized and unrealized
gain (loss)(3) (0.02) 0.40 (0.09) 0.71 (1.25) 0.08
- ---------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.30 1.07 0.60 1.40 (0.58) 0.74
- ---------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.32) (0.67) (0.69) (0.69) (0.66) (0.69)
In excess of net investment income -- (0.01) (0.01) -- -- --
Net realized gains -- -- -- -- (0.02) (0.15)
- ---------------------------------------------------------------------------------------------------
Total Distributions (0.32) (0.68) (0.70) (0.69) (0.68) (0.84)
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.16 $13.18 $12.79 $12.89 $12.18 $13.44
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN(5) 2.33%++ 8.49% 4.69% 11.84% (4.31)% 5.61%
- ---------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $35,999 $34,099 $35,370 $31,203 $27,978 $31,718
- ---------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses(3)(6) 0.71%+ 0.66% 0.50% 0.54% 0.63% 0.50%
Net investment income(4) 4.83+ 5.07 5.34 5.55 5.29 4.94
- ---------------------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 12% 33% 49% 34% 54% 49%
===================================================================================================
(1) For the six months ended September 30, 2003 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) The Manager has waived all or part of its fees for the years ended March
31, 2003, 2002, 2001, 2000 and 1999. If such fees were not waived and
expenses not reimbursed, the effect on net investment income and expense
ratios would have been as follows:
Expense Ratios
Net Investment Income Without Fee Waivers and/or
Per Share Decreases Expense Reimbursements
--------------------------------- ---------------------------------
2003 2002 2001 2000 1999 2003 2002 2001 2000 1999
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Class A $0.01 $0.03 $0.02 $0.01 $0.03 0.72% 0.70% 0.74% 0.75% 0.75%
(4) Effective April 1, 2001, the Fund adopted a change in the accounting method
which requires the Fund to amortize premiums and accrete all discounts.
Without the adoption of this change, for the year ended March 31, 2002, the
ratio of net investment income to average net assets would have been 5.33%.
In addition, the impact of this change to net investment income and net
realized and unrealized loss per share was less than $0.01. Per share
information, ratios and supplemental data for the periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
(5) Performance figures may reflect fee waivers and/or expense reimbursements.
Past performance is no guarantee of future results. In the absence of fee
waivers and/or expense reimbursements, the total return would be reduced.
(6) As a result of voluntary expense limitations, expense ratios will not
exceed 0.80%.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
32 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of each class of beneficial interest outstanding throughout each
year ended March 31, unless otherwise noted:
CLASS B SHARES
---------------------------------------------------------------
PENNSYLVANIA PORTFOLIO 2003(1)(2) 2003(2) 2002(2) 2001(2) 2000(2) 1999(2)
===================================================================================================
NET ASSET VALUE,
BEGINNING OF PERIOD $13.14 $12.76 $12.86 $12.17 $13.42 $13.52
- ---------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income(3)(4) 0.28 0.59 0.62 0.62 0.60 0.60
Net realized and unrealized
gain (loss)(4) (0.01) 0.40 (0.08) 0.70 (1.24) 0.07
- ---------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.27 0.99 0.54 1.32 (0.64) 0.67
- ---------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.29) (0.60) (0.63) (0.63) (0.59) (0.62)
In excess of net investment income -- (0.01) (0.01) -- -- --
Net realized gains -- -- -- -- (0.02) (0.15)
- ---------------------------------------------------------------------------------------------------
Total Distributions (0.29) (0.61) (0.64) (0.63) (0.61) (0.77)
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.12 $13.14 $12.76 $12.86 $12.17 $13.42
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN(5) 2.07%++ 7.89% 4.22% 11.15% (4.78)% 5.07%
- ---------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $36,530 $39,184 $36,108 $29,894 $26,296 $25,234
- ---------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses(3)(6) 1.26%+ 1.20% 1.03% 1.08% 1.15% 1.01%
Net investment income(4) 4.28+ 4.54 4.80 5.01 4.79 4.45
- ---------------------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 12% 33% 49% 34% 54% 49%
===================================================================================================
(1) For the six months ended September 30, 2003 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) The Manager has waived all or part of its fees for the years ended March
31, 2003, 2002, 2001, 2000 and 1999. If such fees were not waived and
expenses not reimbursed, the effect on net investment income and expense
ratios would have been as follows:
Expense Ratios
Net Investment Income Without Fee Waivers and/or
Per Share Decreases Expense Reimbursements
--------------------------------- ---------------------------------
2003 2002 2001 2000 1999 2003 2002 2001 2000 1999
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Class B $0.01 $0.03 $0.02 $0.01 $0.03 1.25% 1.24% 1.28% 1.26% 1.26%
(4) Effective April 1, 2001, the Fund adopted a change in the accounting method
which requires the Fund to amortize premiums and accrete all discounts.
Without the adoption of this change, for the year ended March 31, 2002, the
change to net investment income and net realized and unrealized loss and
the ratio of net investment income to average net assets was less than
$0.01, $0.01 and 0.01%, respectively. Per share information, ratios and
supplemental data for the periods prior to April 1, 2001 have not been
restated to reflect this change in presentation.
(5) Performance figures may reflect fee waivers and/or expense reimbursements.
Past performance is no guarantee of future results. In the absence of fee
waivers and/or expense reimbursements, the total return would be reduced.
(6) As a result of voluntary expense limitations, expense ratios will not
exceed 1.30%.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
33 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of each class of beneficial interest outstanding throughout each
year ended March 31, unless otherwise noted:
CLASS L SHARES
---------------------------------------------------------------
PENNSYLVANIA PORTFOLIO 2003(1)(2) 2003(2) 2002(2) 2001(2) 2000(2) 1999(2)(3)
===================================================================================================
NET ASSET VALUE,
BEGINNING OF PERIOD $13.13 $12.75 $12.85 $12.16 $13.41 $13.51
- ---------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income(4)(5) 0.28 0.59 0.62 0.61 0.59 0.60
Net realized and unrealized
gain (loss)(5) (0.01) 0.40 (0.09) 0.70 (1.24) 0.06
- ---------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.27 0.99 0.53 1.31 (0.65) 0.66
- ---------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (0.29) (0.60) (0.62) (0.62) (0.58) (0.61)
In excess of net investment income -- (0.01) (0.01) -- -- --
Net realized gains -- -- -- -- (0.02) (0.15)
- ---------------------------------------------------------------------------------------------------
Total Distributions (0.29) (0.61) (0.63) (0.62) (0.60) (0.76)
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.11 $13.13 $12.75 $12.85 $12.16 $13.41
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN(6) 2.04%++ 7.84% 4.16% 11.08% (4.83)% 5.02%
- ---------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000S) $12,953 $13,055 $12,472 $10,381 $8,635 $10,490
- ---------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses(4)(7) 1.31%+ 1.25% 1.08% 1.16% 1.20% 1.07%
Net investment income(5) 4.23+ 4.48 4.77 4.94 4.70 4.40
- ---------------------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE 12% 33% 49% 34% 54% 49%
===================================================================================================
(1) For the six months ended September 30, 2003 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) On June 12, 1998, Class C shares were renamed Class L shares.
(4) The Manager has waived all or part of its fees for the years ended March
31, 2003, 2002, 2001, 2000 and 1999. If such fees were not waived and
expenses not reimbursed, the effect on net investment income and expense
ratios would have been as follows:
Expense Ratios
Net Investment Income Without Fee Waivers and/or
Per Share Decreases Expense Reimbursements
--------------------------------- ---------------------------------
2003 2002 2001 2000 1999 2003 2002 2001 2000 1999
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Class L $0.01 $0.03 $0.02 $0.01 $0.03 1.31% 1.28% 1.36% 1.32% 1.32%
(5) Effective April 1, 2001, the Fund adopted a change in the accounting method
which requires the Fund to amortize premiums and accrete all discounts.
Without the adoption of this change, for the year ended March 31, 2002, the
ratio of net investment income to average net assets would have been 4.76%.
In addition, the impact of this change to net investment income and net
realized and unrealized loss per share was less than $0.01. Per share
information, ratios and supplemental data for the periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
(6) Performance figures may reflect fee waivers and/or expense reimbursements.
Past performance is no guarantee of future results. In the absence of fee
waivers and/or expense reimbursements, the total return would be reduced.
(7) As a result of voluntary expense limitations, expense ratios will not
exceed 1.35%.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
34 SMITH BARNEY MUNI FUNDS | 2003 Semi-Annual Report
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SMITH BARNEY
MUNI FUNDS
TRUSTEES
Lee Abraham
Allan J. Bloostein
Jane F. Dasher
Donald R. Foley
R. Jay Gerken, CFA
Chairman
Richard E. Hanson, Jr.
Paul Hardin
Roderick C. Rasmussen
John P. Toolan
OFFICERS
R. Jay Gerken, CFA
President and
Chief Executive Officer
Andrew B. Shoup*
Senior Vice President and
Chief Administrative Officer
Richard L. Peteka
Chief Financial Officer
and Treasurer
Peter M. Coffey
Vice President and
Investment Officer
Kaprel Ozsolak
Controller
Robert I. Frenkel*
Secretary and
Chief Legal Officer
*As of November 25, 2003.
INVESTMENT MANAGER
Smith Barney Fund
Management LLC
DISTRIBUTOR
Citigroup Global Markets Inc.
CUSTODIAN
State Street Bank and
Trust Company
TRANSFER AGENT
Citicorp Trust Bank, fsb.
125 Broad Street, 11th Floor
New York, New York 10004
SUB-TRANSFER AGENT
PFPC Inc.
P.O. Box 9699
Providence, Rhode Island
02940-9699
SMITH BARNEY MUNI FUNDS
- --------------------------------------------------------------------------------
GEORGIA PORTFOLIO
PENNSYLVANIA PORTFOLIO
The Funds are separate investment funds of the Smith Barney Muni Funds, a
Massachusetts business trust.
This report is submitted for the general information of shareholders of Smith
Barney Muni Funds -- Georgia and Pennsylvania Portfolios, but it may also be
used as sales literature when preceded or accompanied by the current Prospectus,
which gives details about charges, expenses, investment objectives and operating
policies of the Funds. If used as sales material after December 31, 2003, this
report must be accompanied by performance information for the most recently
completed calendar quarter.
SMITH BARNEY MUNI FUNDS
Smith Barney Mutual Funds
125 Broad Street
10th Floor, MF-2
New York, New York 10004
For complete information on any Smith Barney Mutual Funds, including management
fees and expenses, call or write your financial professional for a free
prospectus. Read it carefully before you invest or send money.
www.smithbarneymutualfunds.com
(C)2003 Citigroup Global Markets Inc.
Member NASD, SIPC
FD01563 11/03 03-5694
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. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. 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 registrant's last fiscal half-year
(the registrant's second fiscal half-year in the case of an
annual report) that have materially affected, or are likely to
materially affect the registrant's internal control over
financial reporting.
ITEM 10. EXHIBITS.
(a) Not applicable.
(b) Attached hereto.
Exhibit 99.CERT Certifications pursuant to section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 99.906CERT Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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.
SMITH BARNEY MUNI FUNDS
By: /s/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer of
SMITH BARNEY MUNI FUNDS
Date: December 15, 2003
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/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer of
SMITH BARNEY MUNI FUNDS
Date: December 15, 2003
By: /s/ Richard L. Peteka
Richard L. Peteka
Chief Financial Officer of
SMITH BARNEY MUNI FUNDS
Date: December 15, 2003