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 811-3970
Smith Barney California Municipals Fund Inc.
(Exact name of registrant as specified in charter)
125 Broad Street, New York, NY 10004
(Address of principal executive offices) (Zip code)
Christina T. Sydor, 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: August 31, 2003
ITEM 1. REPORT TO STOCKHOLDERS.
The Semi-Annual Report to Stockholders is filed herewith.
- --------------------------------------------------------------------------------
SMITH BARNEY
CALIFORNIA MUNICIPALS
FUND INC.
- --------------------------------------------------------------------------------
CLASSIC SERIES | SEMI-ANNUAL REPORT | AUGUST 31, 2003
[LOGO] Smith Barney
Mutual Funds
Your Serious Money. Professionally Managed.(R)
Your Serious Money. Professionally Managed.(R) is a registered
service mark of Citigroup Global Markets Inc.
- --------------------------------------------------------------------------------
NOT FDIC INSURED o NOT BANK GUARANTEED o MAY LOSE VALUE
- --------------------------------------------------------------------------------
[PHOTO OMITTED]
JOSEPH P. DEANE
PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
JOSEPH P. DEANE
- --------------------------------------------------------------------------------
Joseph P. Deane has more than 33 years of securities business experience and has
managed the Fund since its inception.
Education: BA in History from Iona College
- --------------------------------------------------------------------------------
FUND OBJECTIVE
- --------------------------------------------------------------------------------
The Fund seeks to provide California investors with as high a level of current
income exempt from federal income taxes and California state personal income
taxes as is consistent with prudent investment management and the preservation
of capital.* The Fund invests at least 80% of its net assets in California
municipal securities. California municipal securities include securities issued
by the state of California and certain other municipal issuers, political
subdivisions, agencies and public authorities that pay interest that is exempt
from California personal income taxes.
- --------------------------------------------------------------------------------
FUND FACTS
- --------------------------------------------------------------------------------
FUND INCEPTION
- --------------------------------------------------------------------------------
April 9, 1984
MANAGER INVESTMENT
INDUSTRY EXPERIENCE
- --------------------------------------------------------------------------------
33 Years
* Certain investors may be subject to the federal Alternative Minimum Tax,
and state and local taxes may apply. Capital gains, if any, are fully
taxable. Please consult your personal tax advisor.
[GRAPHIC OMITTED] Classic Series
- --------------------------------------------------------------------------------
Semi-Annual Report o August 31, 2003
SMITH BARNEY CALIFORNIA
MUNICIPALS FUND INC.
- --------------------------------------------------------------------------------
What's Inside
Letter from the Chairman .................................................. 1
Schedule of Investments ................................................... 2
Statement of Assets and Liabilities ....................................... 11
Statement of Operations ................................................... 12
Statements of Changes in Net Assets ....................................... 13
Notes to Financial Statements ............................................. 14
Financial Highlights ...................................................... 18
================================================================================
LETTER FROM THE CHAIRMAN
================================================================================
[PHOTO OMITTED]
R. JAY GERKEN, CFA
Chairman, President and
Chief Executive Officer
Dear Shareholder,
The philosopher Bertrand Russell famously remarked that, "Change is one thing,
progress is another." You will notice in the following pages that we have begun
to implement some changes to your shareholder report and we will be reflecting
other changes in future reports. Our aim is to make meaningful improvements in
reporting on the management of your Fund and its performance, not just to enact
change for change's sake. Please bear with us during this transition period.
We know that you have questions about fund managers' decisions and plans, and we
want to be sure that you have easy access to the information you need. Keeping
investors informed is, and always will be, one of my top priorities as Chairman
of your Fund. To that end, we encourage you to go to our website:
www.smithbarneymutualfunds.com where you can find additional insight on your
Fund.
In terms of your Fund's stewardship, it is with great sadness that we bring to
your attention the passing of Alfred J. Bianchetti, Director Emeritus, and James
J. Crisona, Director Emeritus, of the Fund. Messrs. Bianchetti and Crisona, who
both passed away on September 4th, lived accomplished lives to the ages of 80
and 97, respectively. We will sorely miss their presence and will remember the
dedicated service they provided to the Fund's shareholders through their
outstanding contributions as long-term members of the Board.
We invite you to read this report in full. Please take the opportunity to talk
to your financial adviser about this report or any other questions or concerns
you have about your Fund and your financial future. 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
R. Jay Gerken, CFA
Chairman, President and Chief Executive Officer
September 24, 2003
1 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Schedule of Investments (unaudited) August 31, 2003
================================================================================
FACE
AMOUNT RATING(a) SECURITY VALUE
==================================================================================================================================
Education -- 5.4%
California Educational Facilities Authority Revenue:
$ 2,980,000 Aa3* Claremont University Center, Series B, 5.000% due 3/1/24 $ 2,931,217
Loyola Marymount University:
230,000 A2* 5.750% due 10/1/24 237,503
1,870,000 Aaa* Call 4/1/04 @ 102, 5.750% due 10/1/24 (b) 1,957,965
Pepperdine University, Series A:
1,775,000 A1* 5.000% due 11/1/18 1,796,229
1,500,000 A1* 5.000% due 11/1/29 1,436,595
6,125,000 Ba1* Pooled College & University Project, Series A, (Call 7/1/08 @ 101),
5.500% due 7/1/15 (b) 5,411,621
1,000,000 A1* Scripps College, 5.250% due 8/1/26 997,310
Southwestern University Project:
2,635,000 A3* 6.600% due 11/1/14 2,808,673
6,505,000 A3* 6.700% due 11/1/24 6,910,847
15,000,000 AAA Stanford University, Series Q, 5.250% due 12/1/32 (c) 15,187,500
450,000 A2* California State Public Works Board, Lease Revenue, High Technology
Facility, San Jose Facilities, Series A, 7.750% due 8/1/06 494,262
2,000,000 AAA California State University Foundation Revenue, Monterey Bay,
MBIA-Insured, 5.350% due 6/1/31 2,061,140
1,000,000 AAA Fullerton University Foundation, Auxiliary Organization Revenue,
Series A, MBIA-Insured, 5.750% due 7/1/30 1,067,310
1,250,000 AAA San Diego Community College District, Lease Revenue, MBIA-Insured,
(Call 12/1/06 @ 102), 6.125% due 12/1/16 (b) 1,445,200
Standard School District, COP, (Capital Improvement Project), Series A:
320,000 A 6.200% due 3/1/10 334,429
340,000 A 6.250% due 3/1/11 355,412
2,600,000 AAA Victor Valley Unified High School District, COP,
MBIA-Insured, 5.750% due 11/1/17 2,836,080
- ----------------------------------------------------------------------------------------------------------------------------------
48,269,293
- ----------------------------------------------------------------------------------------------------------------------------------
Electric -- 1.8%
10,000,000 A3* California State Department of Water Resources, Power Supply
Revenue, Series A, 5.250% due 5/1/20 (c) 10,082,200
Sacramento Power Authority, Cogeneration Project Revenue:
1,800,000 BBB- 6.500% due 7/1/07 1,989,450
1,800,000 BBB- 6.500% due 7/1/08 1,993,068
2,200,000 BBB- 6.500% due 7/1/09 2,420,836
- ----------------------------------------------------------------------------------------------------------------------------------
16,485,554
- ----------------------------------------------------------------------------------------------------------------------------------
Finance -- 7.9%
Fresno Joint Powers Financing Authority, Local Agency Revenue, Series A:
600,000 BBB+ 6.200% due 9/2/03 600,000
1,500,000 BBB+ 6.550% due 9/2/12 1,570,290
3,000,000 AAA Long Beach Bond Finance Authority, Lease Revenue, AMBAC-Insured, 5.250% due 5/1/24 3,041,310
6,500,000 AA Los Angeles County Public Works Financing Authority Revenue, 5.000% due 10/1/19 6,594,900
12,000,000 AAA Los Angeles County Sanitation Districts Financing Authority Revenue, Series A,
5.000% due 10/1/23 12,008,880
895,000 Baa1* Pleasanton Joint Powers Financing Authority Revenue, Series A, 6.150% due 9/2/12 915,585
5,550,000 AAA Pomona Public Financing Authority Revenue, (Merged Redevelopment
Project), Tax Allocation, Series AD, MBIA-Insured, 5.000% due 2/1/21 5,594,178
Sacramento City Financing Authority Revenue, Capital Improvement:
2,000,000 AA- 5.625% due 6/1/30 2,070,180
AMBAC-Insured:
Series A:
5,070,000 AAA 5.500% due 12/1/20 5,425,306
6,300,000 AAA 5.500% due 12/1/21 6,720,273
1,600,000 AAA Solid Waste and Redevelopment Project, 5.875% due 12/1/29 1,742,672
See Notes to Financial Statements.
2 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Schedule of Investments (unaudited) (continued) August 31, 2003
================================================================================
FACE
AMOUNT RATING(a) SECURITY VALUE
==================================================================================================================================
Finance -- 7.9% (continued)
$ 2,800,000 AAA Salida Area Public Facilities Financing Agency Community Facilities
District, Special Tax Revenue, FSA-Insured, 5.250% due 9/1/18 $ 2,962,932
2,875,000 AAA Santa Ana Financing Authority, Lease Revenue, Series A,
MBIA-Insured, 6.250% due 7/1/24 3,309,700
2,000,000 AAA South Orange County Public Financing Authority, Special Tax
Revenue, Series A, MBIA-Insured, 7.000% due 9/1/10 (d) 2,421,140
Virgin Islands Public Finance Authority Revenue, Series A:
10,000,000 BBB- 5.500% due 10/1/18 (c) 10,098,700
5,000,000 BBB- 6.500% due 10/1/24 5,505,600
- ----------------------------------------------------------------------------------------------------------------------------------
70,581,646
- ----------------------------------------------------------------------------------------------------------------------------------
General Obligation -- 8.8%
2,000,000 AAA Adelanto School District, Series B, FGIC-Insured, zero coupon due 9/1/18 916,960
California State GO, Veterans Bonds:
1,000,000 A Series AT, 9.500% due 2/1/10 1,303,530
2,000,000 A Series AU, 8.400% due 10/1/06 2,349,060
Los Angeles Unified School District:
20,000,000 AAA Series A, 5.000% due 7/1/24 19,921,600
14,230,000 AAA Series E, MBIA-Insured, 5.125% due 7/1/22 (c) 14,466,360
4,720,000 AAA Pasadena Unified School District, Series A, FGIC-Insured, 5.000% due 5/1/20 4,796,370
1,000,000 Aa1* San Diego Public Safety Communication Project, 6.650% due 7/15/11 1,188,370
5,000,000 AAA San Diego Unified School District, Series E, FSA-Insured, 5.250% due 7/1/24 5,111,550
Santa Margarita/Dana Point Authority Revenue:
20,000,000 AAA Series A, AMBAC-Insured, 5.125% due 8/1/18 (c) 20,990,400
1,500,000 AAA Water Improvement Districts 3, 3A, 4 & 4A, Series B, MBIA-Insured,
7.250% due 8/1/14 1,900,020
1,530,000 AAA Santa Rosa High School District, FGIC-Insured, 5.900% due 5/1/14 1,597,947
4,000,000 AAA Tahoe Truckee Unified School District, Improvement District No. 1,
Series A, FGIC-Insured, (Call 8/1/09 @ 101), 5.750% due 8/1/20 (b) 4,634,360
- ----------------------------------------------------------------------------------------------------------------------------------
79,176,527
- ----------------------------------------------------------------------------------------------------------------------------------
Hospitals -- 11.8%
1,500,000 BBB ABAG Finance Authority for Nonprofit Corp., COP, (Rehabilitation Mental
Health Services Inc. Project), California Mortgage Insured, 6.550% due 6/1/22 1,518,225
California Health Facilities Financing Authority Revenue:
2,500,000 AAA Catholic Health Facilities, AMBAC-Insured, 5.750% due 7/1/15 2,694,100
3,000,000 AAA Catholic Healthcare West, MBIA-Insured, 5.125% due 7/1/24 2,997,870
12,000,000 A3* Cedars-Sinai Medical Center, Series A, 6.125% due 12/1/30 (c) 12,514,560
1,930,000 NR Daniel Freeman Hospital, (Call 5/1/05 @ 102), 6.500% due 5/1/20 (b) 2,132,206
Industrial Health Facilities, Series A:
705,000 BBB Casa De Las Campanas, 5.500% due 8/1/12 742,048
2,500,000 BBB Marshall Hospital, 5.250% due 11/1/18 2,503,450
Kaiser Permanente:
3,500,000 AAA Series A, FSA-Insured, 5.000% due 6/1/18 3,596,460
1,750,000 A Series B, 5.250% due 10/1/14 1,817,200
5,145,000 AAA Stanford Health Care, Series A, FSA-Insured, 5.000% due 11/15/18 5,294,977
Sutter Health, Series A:
FSA-Insured:
1,470,000 AAA 5.125% due 8/15/17 1,539,296
1,500,000 AAA 5.250% due 8/15/27 1,509,075
2,000,000 AAA MBIA-Insured, 5.000% due 8/15/19 2,050,020
5,000,000 AAA California State Public Works Board Lease Revenue, Department of
Health Services, Series A, MBIA-Insured, 5.750% due 11/1/24 5,279,450
See Notes to Financial Statements.
3 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Schedule of Investments (unaudited) (continued) August 31, 2003
================================================================================
FACE
AMOUNT RATING(a) SECURITY VALUE
==================================================================================================================================
Hospitals -- 11.8% (continued)
California Statewide Communities Development Authority Revenue, COP:
$ 4,515,000 AAA Industrial Health Facilities, Unihealth America, Series A, AMBAC-Insured,
5.500% due 10/1/07 (e) $ 5,086,960
19,000,000 A Kaiser Permanente, 5.300% due 12/1/15 (c) 19,668,040
1,100,000 BBB Solheim Lutheran Home, 6.500% due 11/1/17 1,171,654
St. Joseph's Health System:
4,125,000 AA- 5.500% due 7/1/14 4,191,866
4,000,000 AA- 5.250% due 7/1/21 4,027,600
8,000,000 AA- Call 7/1/04 @ 102, 6.625% due 7/1/21 (b) 8,527,360
Sutter Health Obligated Group, MBIA-Insured:
3,500,000 AAA 5.500% due 8/15/09 3,572,625
500,000 AAA 6.000% due 8/15/25 542,880
Fresno Health Facilities Revenue, Holy Cross Health System Corp.:
2,200,000 AA- 5.200% due 12/1/04 2,264,042
2,435,000 AA- 5.375% due 12/1/06 2,501,232
2,000,000 AA- 5.625% due 12/1/15 2,044,440
1,000,000 AAA Modesto Health Facilities Revenue, Memorial Hospital Association, Series B,
MBIA-Insured, 5.125% due 6/1/17 1,043,060
2,000,000 AAA San Bernardino County COP, (Capital Facility Project), Series B,
6.875% due 8/1/24 (e) 2,486,560
645,000 AAA Santa Rosa Hospital Revenue, (Santa Rosa Hospital Memorial Project),
10.300% due 3/1/11 (e) 839,500
1,250,000 BBB Sequoia Hospital District, 5.375% due 8/15/23 (e) 1,272,712
- ----------------------------------------------------------------------------------------------------------------------------------
105,429,468
- ----------------------------------------------------------------------------------------------------------------------------------
Housing: Multi-Family -- 2.0%
1,250,000 AAA ABAG Finance Authority for Nonprofit Corp., Multi-Family Revenue,
(Edgewood Apartments Project), Series A, FNMA-Collateralized,
5.700% due 11/1/26 (c) 1,314,400
6,000,000 NR California Statewide Communities Development Authority Revenue,
Series E, FNMA-Collateralized, 6.400% due 6/1/28 (d)(f) 6,249,060
1,740,000 AAA Riverside County Housing Authority, Multi-Family Housing Revenue,
Brandon Place Apartments, Series B, FNMA-Collateralized,
5.625% due 7/1/29 (f) 1,886,021
660,000 AA San Francisco City & County Redevelopment Agency, Multi-Family
Housing Revenue, 1045 Mission Apartments, Series C,
GNMA-Collateralized, 5.200% due 12/20/17 (f) 673,187
1,500,000 Aa1* San Jose Multi-Family Housing Revenue, Timberwood Apartments,
Series A, LOC-Wells Fargo Bank, 7.500% due 2/1/20 1,507,035
3,320,000 AA- Santa Rosa Mortgage Revenue, (Village Square Apartments Project),
Series A, FHA-Insured, 6.875% due 9/1/27 3,432,249
2,755,000 AAA Victorville Multi-Family Housing Revenue, Wimbledon Apartments,
Series A, GNMA-Collateralized, 6.300% due 4/20/31 2,865,393
- ----------------------------------------------------------------------------------------------------------------------------------
17,927,345
- ----------------------------------------------------------------------------------------------------------------------------------
Housing: Single-Family -- 3.6%
California HFA Revenue Bonds, Home Mortgage:
Capital Appreciation:
350,000 Aa2* Series 1983-B, FHA-Insured, zero coupon due 8/1/15 128,908
310,000 Aa2* Series 1984-B, zero coupon due 8/1/16 73,024
10,000 Aa2* MGIC-Insured, 10.250% due 2/1/14 10,492
Single-Family Mortgage:
1,800,000 AAA Issue A-2, FHA-Insured, 6.350% due 8/1/15 (d)(f) 1,859,238
2,565,000 AAA Series B-3, Class II, MBIA-Insured, 5.375% due 8/1/21 (f) 2,605,809
2,635,000 AAA California Rural Home Mortgage Financing Authority, Single-Family
Mortgage Revenue, Mortgage-Backed Security, Series D, FNMA/
GNMA-Collateralized, 6.000% due 12/1/31 (f) 2,758,713
10,000,000 AAA California State Department of Veterans Affairs, Home Purchase Revenue,
Series A, AMBAC-Insured, 5.350% due 12/1/27 (c) 10,215,400
See Notes to Financial Statements.
4 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Schedule of Investments (unaudited) (continued) August 31, 2003
================================================================================
FACE
AMOUNT RATING(a) SECURITY VALUE
==================================================================================================================================
Housing: Single-Family -- 3.6% (continued)
$ 270,000 AAA Contra Costa County Home Mortgage Revenue, Mortgage-Backed
Securities Program, GNMA-Collateralized, 7.750% due 5/1/22 (e)(f) $ 355,455
130,000 Aaa* Los Angeles Home Mortgage Revenue Bonds, (Second Mortgage Project),
GNMA-Collateralized, 8.100% due 5/1/17 134,425
120,000 AAA Martinez Home Mortgage Revenue Bonds, 10.750% due 2/1/16 (e) 172,739
3,325,000 AAA Perris Single-Family Mortgage Revenue, Series A, Mortgage-Backed
Securities Program, 8.300% due 12/1/13 (e)(f) 4,274,620
6,000,000 AAA Pleasanton-Suisun City Home Financing Authority, Home Mortgage
Revenue, Series A, MBIA-Insured, zero coupon due
10/1/16 (e) 3,153,780 Riverside County Single-Family
Mortgage Revenue, Series A,
Mortgage-Backed Securities Program, GNMA Collateralized:
2,620,000 AAA 8.300% due 11/1/12 (e)(f) 3,478,967
1,000,000 AAA 7.800% due 5/1/21 (e)(f) 1,328,590
1,500,000 AAA Sacramento County Single-Family Mortgage Revenue, Issue A,
GNMA-Collateralized, 8.000% due 7/1/16 (e)(f) 1,886,865
- ----------------------------------------------------------------------------------------------------------------------------------
32,437,025
- ----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous -- 17.2%
2,000,000 AAA Anaheim COP, Regular Fixed Option Bonds, MBIA-Insured,
6.200% due 7/16/23 2,202,060
1,025,000 Baa2* Azusa COP, (Capital Improvements Refinancing Project), 6.625%
due 8/1/13 1,060,721
10,000,000 AA Beverly Hills Public Financing Authority, Lease Revenue, (Capital
Improvements Project), Series A, 5.250% due 6/1/28 (c) 10,061,200
California County Tobacco Securitization Agency, Asset-Backed
Revenue, Alameda County:
5,250,000 Baa2* 5.750% due 6/1/29 4,209,660
4,000,000 A1* 6.000% due 6/1/42 2,995,600
California Infrastructure & Economic Development Bank Revenue:
AMBAC-Insured:
3,365,000 AAA Department of Public Social Services, 5.000% due 9/1/35 3,296,590
4,000,000 AAA Series A, 5.500% due 4/1/32 4,132,280
15,000,000 AAA FGIC-Insured, 5.000% due 7/1/29 14,782,800
2,500,000 AAA California State Public Works Board Lease Revenue, Department of
Corrections, Series B, MBIA-Insured, 5.000% due 9/1/21 2,504,375
3,000,000 AAA Contra Costa County COP, (Capital Projects), AMBAC-Insured, 5.250%
due 2/1/21 3,067,800
3,680,000 AAA Fontana COP, AMBAC-Insured, 5.000% due 9/1/21 3,714,114
2,770,000 AAA Fresno County Financing Authority, Solid Waste Revenue, (American
Avenue Landfill Project), MBIA-Insured, 5.750% due 5/15/14 2,978,941
20,000,000 BBB Golden State Tobacco Securitization Corp., Tobacco Settlement Revenue,
Series 2003-A-1, 6.750% due 6/1/39 (c) 16,562,400
Inland Empire Solid Waste Financing Authority Revenue,
FSA-Insured:
5,000,000 AAA 6.250% due 8/1/11 (f) 5,784,750
2,500,000 AAA Call 8/1/06 @ 102, 6.000% due 8/1/16 (b)(f) 2,835,950
2,345,000 BBB Kings County Waste Management Authority, Solid Waste Revenue,
7.200% due 10/1/14 (f) 2,450,244
3,250,000 AAA Los Angeles County Community Facilities, District No. 3, Special Tax
Refunding, Series A, FSA-Insured, 5.500% due 9/1/14 3,572,400
1,675,000 AAA Orange County 1996 Recovery, COP, Series A, MBIA-Insured,
6.000% due 7/1/26 1,841,813
25,000,000 AAA San Francisco, CA State Building Authority, Lease Revenue, San
Francisco Civic Center, Complex-A, AMBAC-Insured, 5.250%
due 12/1/21 (c) 25,959,750
San Francisco City & County COP, San Bruno Jail No. 3, AMBAC-Insured:
14,000,000 AAA 5.250% due 10/1/26 (c) 14,189,140
5,000,000 AAA 5.250% due 10/1/33 (c) 5,052,750
See Notes to Financial Statements.
5 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Schedule of Investments (unaudited) (continued) August 31, 2003
================================================================================
FACE
AMOUNT RATING(a) SECURITY VALUE
==================================================================================================================================
Miscellaneous -- 17.2% (continued)
$ 3,205,000 AAA San Luis Obispo County Financing Authority Revenue, (Lopez Dam
Improvement Project), Series A, MBIA-Insured, 5.375% due 8/1/30 $ 3,291,279
4,310,000 Aaa* San Marcos Public Facilities Authority, Public Facilities Revenue,
zero coupon due 1/1/19 (e) 1,980,186
3,460,000 AA- Santa Barbara County COP, 5.700% due 3/1/11 3,585,598
2,795,000 AAA Solano County COP, (Capital Improvement Project), AMBAC-Insured,
5.000% due 11/15/19 (e) 2,876,474
4,200,000 AA- Sonoma County COP, (Detention Facilities Improvement Project),
5.000% due 11/15/13 4,295,172
4,135,000 Baa2* South Napa Waste Management Authority Revenue, 6.500% due 2/15/14 (f) 4,274,598
- ----------------------------------------------------------------------------------------------------------------------------------
153,558,645
- ----------------------------------------------------------------------------------------------------------------------------------
Pollution Control Revenue -- 1.6%
California Financing Authority:
2,500,000 CCC Pacific Gas & Electric Co., Series B, 6.350% due 6/1/09 (f) 2,506,175
1,500,000 A+ San Diego Gas & Electric, Series A, 6.800% due 6/1/15 (f) 1,734,555
9,900,000 BB Southern California Edison Co., Series B, 6.400% due 12/1/24 (c)(f) 9,785,556
- ----------------------------------------------------------------------------------------------------------------------------------
14,026,286
- ----------------------------------------------------------------------------------------------------------------------------------
Public Facilities -- 0.3%
450,000 AAA Los Angeles Convention & Exhibition Center Authority, COP,
(Call 12/1/05 @ 100), 9.000% due 12/1/20 (b) 524,763
2,000,000 AAA Monrovia Financing Authority, Lease Revenue, AMBAC-Insured,
5.125% due 12/1/31 2,000,680
- ----------------------------------------------------------------------------------------------------------------------------------
2,525,443
- ----------------------------------------------------------------------------------------------------------------------------------
Solid Waste -- 0.5%
4,600,000 AAA Sacramento County COP, (Public Facilities Project), Solid Waste
Facilities, 5.250% due 12/1/16 4,917,814
- ----------------------------------------------------------------------------------------------------------------------------------
Tax Allocation -- 6.4%
2,000,000 AAA Anaheim Public Finance Authority, Tax Allocation Revenue, Regular
Fixed Option Bonds, MBIA-Insured, 6.450% due 12/28/18 2,341,180
1,000,000 Baa3* Azusa Redevelopment Agency, Tax Allocation, (Merged Project Area),
Series A, 6.750% due 8/1/23 1,023,050
30,000 AAA Concord Redevelopment Agency, Tax Allocation, Series 3, BIG-Insured,
8.000% due 7/1/18 30,599
5,000,000 AAA Corona-Norco Unified School District, Special Tax, MBIA-Insured,
5.500% due 9/1/33 5,194,700
6,000,000 AAA Corona Redevelopment Agency, Tax Allocation, (Redevelopment Project
Area A), Series A, FGIC-Insured, 5.500% due 9/1/24 (c) 6,203,220
1,000,000 AAA El Centro Redevelopment Agency, Tax Allocation, MBIA-Insured,
6.375% due 11/1/17 1,129,850
2,160,000 AAA Fontana Public Finance Authority, Tax Allocation, Series A, MBIA-Insured,
5.000% due 9/1/20 2,185,682
3,275,000 A- Garden Grove Community Development Agency, Tax Allocation, (Garden
Grove Community Project), 5.700% due 10/1/08 3,351,930
Hawthorne Community Redevelopment Agency, Tax Allocation, (Project
Area 2), (Call 9/1/04 @ 102):
2,000,000 Baa2* 6.625% due 9/1/14 (b) 2,108,140
2,100,000 Baa2* 6.700% due 9/1/20 (b) 2,186,163
6,485,000 AAA Healdsburg Community Redevelopment Agency, Tax Allocation,
(Sotoyome Community Development Project), Series A, MBIA-Insured,
5.125% due 8/1/31 6,487,010
6,500,000 AAA La Quinta Redevelopment Agency, Tax Allocation, (Redevelopment Project
Area No. 1), AMBAC-Insured, 5.125% due 9/1/32 6,502,665
2,670,000 AAA Ontario Redevelopment Financing Authority, Tax Allocation, (Redevelopment
Project No. 1), MBIA-Insured, 5.800% due 8/1/23 (e) 2,730,289
Rancho Cucamonga Redevelopment Agency, Tax Allocation, (Rancho
Redevelopment Project):
2,500,000 AAA FSA-Insured, 5.250% due 9/1/20 2,608,350
MBIA-Insured:
2,445,000 AAA 5.250% due 9/1/16 2,627,006
1,000,000 AAA 5.250% due 9/1/26 1,014,440
See Notes to Financial Statements.
6 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Schedule of Investments (unaudited) (continued) August 31, 2003
================================================================================
FACE
AMOUNT RATING(a) SECURITY VALUE
==================================================================================================================================
Tax Allocation -- 6.4% (continued)
San Jose Redevelopment Agency, Tax Allocation, (Merged Area
Redevelopment Project):
$ 5,000,000 AAA 5.000% due 8/1/24 $ 4,980,500
2,000,000 AAA MBIA-Insured, 5.250% due 8/1/16 2,062,900
2,000,000 AAA Vista Community Development Commission, Tax Allocation, (Vista
Redevelopment Project), MBIA-Insured, 5.250% due 9/1/15 2,110,200
- ----------------------------------------------------------------------------------------------------------------------------------
56,877,874
- ----------------------------------------------------------------------------------------------------------------------------------
Transportation -- 11.9%
2,000,000 AAA Foothill Eastern Corridor Agency, California Toll Revenue, Sr. Lien,
Series A, (Call 1/1/07 @ 100), 6.000% due 1/1/34 (b)(d) 2,247,120
1,250,000 AAA Fresno Airport Revenue, Series A, FSA-Insured, 5.500% due 7/1/30 1,289,150
2,000,000 A3* Port of Oakland Special Facilities Revenue, Series A, 6.750% due 1/1/12 (f) 2,035,040
9,000,000 AAA Sacramento County Airport System Revenue, Series A, MBIA-Insured,
5.900% due 7/1/24 (f) 9,693,270
140,000 AAA San Francisco Airport Improvement Corp. Lease Revenue, United
Airlines Inc., 8.000% due 7/1/13 (e) 174,250
15,270,000 AAA San Francisco Bay Area Rapid Transportation District, Sales Tax
Revenue, AMBAC-Insured, 5.000% due 7/1/28 (c) 15,076,376
3,000,000 AAA San Francisco City and County Airports Commission, International Airport
Revenue, FGIC-Insured, 6.500% due 5/1/19 (f) 3,134,940
San Joaquin Hills, CA Transportation Corridor Agency, Toll Road Revenue:
5,000,000 AAA Zero coupon due 1/1/14 (e) 3,154,900
60,000,000 AAA Zero coupon due 1/1/16 (c)(e) 33,399,000
17,500,000 AAA Zero coupon due 1/1/17 (e) 9,169,125
25,000,000 AAA Zero coupon due 1/1/18 (c)(e) 12,305,250
20,000,000 AAA Zero coupon due 1/1/19 (e) 9,230,000
20,000,000 AAA Zero coupon due 1/1/26 (e) 5,917,600
- ----------------------------------------------------------------------------------------------------------------------------------
106,826,021
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities -- 2.8%
Northern California Power Agency, Public Power Revenue, (Geothermal
Project No. 3.), Series A:
360,000 A- 5.000% due 7/1/09 360,446
750,000 A- Call 7/1/08 @ 100, 5.000% due 7/1/09 (b) 829,665
2,000,000 AAA Redding Electric System Revenue, COP, Regular Linked SAVRS &
RIBS, MBIA-Insured, 6.368% due 7/1/22 2,359,700
Sacramento Municipal Utility District Electric Revenue,
MBIA-Insured:
4,500,000 AAA Series D, 5.250% due 11/15/20 4,627,800
Series I, (Call 1/1/04 @ 102):
1,720,000 AAA 5.750% due 1/1/15 (b) 1,780,699
2,900,000 AAA 5.750% due 1/15/15 (b) 3,002,341
6,000,000 AAA Series N, 5.000% due 8/15/28 5,923,980
805,000 AAA Unrefunded Balance 2001, Series I, 5.750% due 1/1/15 830,422
5,000,000 AAA Southern California Public Power Authority, Power Project Revenue,
(Mead Adelanto Project), Series A, AMBAC-Insured, 5.000% due 7/1/17 5,136,050
- ----------------------------------------------------------------------------------------------------------------------------------
24,851,103
- ----------------------------------------------------------------------------------------------------------------------------------
Water and Sewer -- 18.0%
1,240,000 AAA Anaheim Public Financing Authority Revenue, Water Utility, (Lenain
Filtration Project), FGIC-Insured, 5.250% due 10/1/19 1,284,714
California State Department of Water Resources, Central Valley Project Revenue:
4,195,000 AAA Series AA, 5.000% due 12/1/23 4,197,895
1,000,000 AA Series O, 5.000% due 12/1/22 1,004,670
5,000,000 AA Series S, 5.000% due 12/1/19 5,075,600
11,000,000 AA Series U, 5.000% due 12/1/29 (c) 10,763,060
See Notes to Financial Statements.
7 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Schedule of Investments (unaudited) (continued) August 31, 2003
================================================================================
FACE
AMOUNT RATING(a) SECURITY VALUE
==================================================================================================================================
Water and Sewer -- 18.0% (continued)
Castaic Lake Water Agency Revenue, COP, (Water System Improvement
Project), AMBAC-Insured:
$ 7,270,000 AAA 5.250% due 8/1/19 $ 7,625,576
7,615,000 AAA 5.125% due 8/1/30 7,621,244
6,000,000 AAA Clovis Sewer Revenue Refunding, MBIA-Insured, 5.200% due 8/1/28 6,037,740
4,000,000 AAA Cucamonga County Water District, COP, FGIC-Insured, 5.125% due 9/1/31 4,001,400
11,440,000 AAA East Bay Municipal Utility District Wastewater Treatment Systems Revenue,
FGIC-Insured, 5.000% due 6/1/26 (c) 11,331,778
East Bay Municipal Utility District Water Systems Revenue:
8,400,000 AAA FGIC-Insured, 5.000% due 6/1/26 8,320,536
8,400,000 AAA MBIA-Insured, 5.000% due 6/1/26 8,320,536
Eastern Municipal Water District, COP, Water & Sewer Revenue:
1,000,000 AAA FGIC-Insured, 6.750% due 7/1/12 1,202,720
17,750,000 AAA Series A, MBIA-Insured, 5.250% due 7/1/23 (c) 17,982,348
1,900,000 AAA El Centro Financing Authority, Water & Wastewater Revenue, Series A,
AMBAC-Insured, 5.125% due 10/1/27 1,904,351
Metropolitan Water District, Southern California Waterworks Revenue:
Series A:
1,000,000 AA 5.000% due 7/1/18 1,030,820
12,900,000 AA 4.750% due 7/1/22 (c) 12,402,189
13,150,000 AA 5.000% due 7/1/26 (c) 12,938,022
4,500,000 AA Series C, 5.250% due 7/1/16 4,736,250
1,925,000 AAA Morgan Hill COP, (Water Systems Improvement Projects), FSA-Insured,
5.125% due 6/1/21 1,974,934
4,560,000 AAA Pittsburg Public Financing Authority, Wastewater Revenue, Series A,
FGIC-Insured, 5.375% due 6/1/22 4,685,491
6,575,000 AAA Placer County Water Agency Revenue, COP, (Capital Improvement Projects),
AMBAC-Insured, 5.500% due 7/1/29 6,872,913
Pomona Public Financing Authority Revenue:
2,855,000 AAA Series Q, MBIA-Insured, 5.750% due 12/1/15 3,113,235
2,500,000 AAA Water Facilities Project, Series AA, FSA-Insured, 5.000% due 5/1/29 2,464,275
6,875,000 AAA San Diego PFA, Sewer Revenue, FGIC-Insured, 5.000% due 5/15/20 6,950,762
2,820,000 AAA Sunnyvale Financing Authority, Water & Wastewater Revenue,
AMBAC-Insured, 5.000% due 10/1/22 2,831,054
4,350,000 AAA Vallejo Parity Revenue Refunding, (Water Improvement Project),
Series A, FSA-Insured, 5.250% due 5/1/29 4,404,375
- ----------------------------------------------------------------------------------------------------------------------------------
161,078,488
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $828,260,959**) $894,968,532
==================================================================================================================================
(a) All ratings are by Standard & Poor's Ratings Service, except for those
which are identified by an asterisk (*), are rated by Moody's Investors
Service.
(b) Pre-Refunded bonds are escrowed with U.S. government securities and are
considered by the Manager to be triple-A rated even if issuer has not
applied for new ratings.
(c) All or a portion of this security has been segregated for open futures
contract commitments.
(d) All or a portion of this security is held as collateral for open futures
contracts committments.
(e) Bonds are escrowed to maturity with U.S. government securities and are
considered by the Manager to be triple-A rated even if issuer has not
applied for new ratings.
(f) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 9 and 10 for definitions of ratings and abbreviations.
See Notes to Financial Statements.
8 Smith Barney California Municipals Fund Inc. | 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 debts in this category than in higher
rated categories.
BB, B, -- Bonds rated "BB", "B", "CCC" and "CC" are regarded, on balance, as
CCC predominantly speculative with respect to capacity to pay interest and
and CC repay principal in accordance with the terms of the obligation. "BB"
represents a lower degree of speculation than "B", "CCC" and "CC", the
highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainities 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 "Caa", 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 these bonds.
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 that 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 that suggest a susceptibility to impairment
some time in the future.
Baa -- Bonds rated "Baa" are considered to be medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payment
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 bonds in this class.
B -- Bonds rated "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.
Caa -- Bonds rated "Caa" are of poor standing. These issues may be in
default, or present elements of danger may exist with respect to
principal or interest.
NR -- Indicates that the bond is not rated by Standard & Poor's or Moody's.
9 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Short-Term Security Ratings (unaudited)
================================================================================
SP-1 -- Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined to
possess overwhelming safety characteristics are denoted with a plus
(+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate demand
obligation ("VRDO") rating indicating that the degree of safety
regarding timely payment is either overwhelming or very strong; those
issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign.
VMIG 1 -- Moody's highest rating for issues having a demand feature -- VRDO.
P-1 -- Moody's highest rating for commercial paper and for VRDO prior to the
advent of the VMIG 1 rating.
================================================================================
Abbreviations* (unaudited)
================================================================================
ABAG -- Association of Bay Area Governments
AIG -- American International Guaranty
AMBAC -- AMBAC Indemnity 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 Insurance
LEE Association
COP -- Certificate of Participation
EDA -- Economic Development Authority
ETM -- Escrowed To Maturity
FAIRS -- Floating Adjustable Interest Rate Securities
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
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 Agency
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
ISD -- Independent School District
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MGIC -- MGIC Investment Corporation
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCR -- Pollution Control Revenue
PFA -- Public Financing Authority
PSFG -- Permanent School Fund Guaranty
RAN -- Revenue Anticipation Notes
RIBS -- Residual Interest Bonds
SAVRS -- Select Auction Variable Rate 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
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
- ----------
* Abbreviations may or may not appear on the schedule of investments.
10 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Statement of Assets and Liabilities (unaudited) August 31, 2003
================================================================================
ASSETS:
Investments, at value (Cost -- $828,260,959) $894,968,532
Interest receivable 10,983,611
Receivable for securities sold 2,805,000
Receivable for Fund shares sold 1,345,274
Receivable from broker -- variation margin 467,969
- --------------------------------------------------------------------------------------------------------
Total Assets 910,570,386
- --------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 5,194,400
Bank overdraft 1,529,918
Dividends payable 1,487,297
Payable for Fund shares reacquired 269,138
Investment advisory fee payable 230,207
Administration fee payable 146,595
Distribution plan fees payable 65,808
Accrued expenses 71,863
- --------------------------------------------------------------------------------------------------------
Total Liabilities 8,995,226
- --------------------------------------------------------------------------------------------------------
Total Net Assets $901,575,160
========================================================================================================
NET ASSETS:
Par value of capital shares $ 54,214
Capital paid in excess of par value 849,695,660
Undistributed net investment income 2,173,927
Accumulated net realized loss from investment transactions and futures contracts (34,516,371)
Net unrealized appreciation of investments and futures contracts 84,167,730
- --------------------------------------------------------------------------------------------------------
Total Net Assets $901,575,160
========================================================================================================
Shares Outstanding:
Class A 41,861,765
---------------------------------------------------------------------------------------------------
Class B 8,787,256
---------------------------------------------------------------------------------------------------
Class L 3,564,603
---------------------------------------------------------------------------------------------------
Net Asset Value:
Class A (and redemption price) $ 16.64
---------------------------------------------------------------------------------------------------
Class B * $ 16.62
---------------------------------------------------------------------------------------------------
Class L * $ 16.60
---------------------------------------------------------------------------------------------------
Maximum Public Offering Price Per Share:
Class A (net asset value plus 4.17% of net asset value per share) $ 17.33
---------------------------------------------------------------------------------------------------
Class L (net asset value plus 1.01% of net asset value per share) $ 16.77
========================================================================================================
* Redemption price is NAV of Class B and L shares reduced by a 4.50% and
1.00% CDSC, respectively, if shares are redeemed within one year from
purchase payment (See Note 3).
See Notes to Financial Statements.
11 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Statement of Operations (unaudited) For the Six Months Ended August 31, 2003
================================================================================
INVESTMENT INCOME:
Interest $ 24,156,353
- -------------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fee (Note 3) 1,405,869
Distribution plan fees (Note 7) 1,256,635
Administration fee (Note 3) 893,795
Shareholder servicing fees (Note 7) 97,973
Custody 30,539
Audit and legal 17,782
Shareholder communications (Note 7) 16,855
Registration fees 11,532
Directors' fees 7,131
Other 2,383
- -------------------------------------------------------------------------------------------------------
Total Expenses 3,740,494
- -------------------------------------------------------------------------------------------------------
Net Investment Income 20,415,859
- -------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES 4 AND 5):
Realized Gain (Loss) From:
Investment transactions 4,460,921
Futures contracts (16,099,511)
- -------------------------------------------------------------------------------------------------------
Net Realized Loss (11,638,590)
- -------------------------------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments and Futures Contracts:
Beginning of period 79,969,066
End of period 84,167,730
- -------------------------------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 4,198,664
- -------------------------------------------------------------------------------------------------------
Net Loss on Investments and Futures Contracts (7,439,926)
- -------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 12,975,933
=======================================================================================================
See Notes to Financial Statements.
12 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Statements of Changes in Net Assets
================================================================================
For the Six Months Ended August 31, 2003 (unaudited)
and the Year Ended February 28, 2003
August 31 February 28
===================================================================================================================
OPERATIONS:
Net investment income $ 20,415,859 $ 43,202,388
Net realized loss (11,638,590) (4,589,485)
Increase (decrease) in net unrealized appreciation 4,198,664 (5,423,733)
- -------------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 12,975,933 33,189,170
- -------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTES 2 AND 8):
Net investment income (19,849,516) (42,834,733)
- -------------------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions to Shareholders (19,849,516) (42,834,733)
- -------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 9):
Net proceeds from sale of shares 51,075,114 152,922,831
Net asset value of shares issued for reinvestment of dividends 10,547,620 23,106,619
Cost of shares reacquired (106,101,302) (190,165,123)
- -------------------------------------------------------------------------------------------------------------------
Decrease in Net Assets From Fund Share Transactions (44,478,568) (14,135,673)
- -------------------------------------------------------------------------------------------------------------------
Decrease in Net Assets (51,352,151) (23,781,236)
NET ASSETS:
Beginning of period 952,927,311 976,708,547
- -------------------------------------------------------------------------------------------------------------------
End of period* $ 901,575,160 $952,927,311
===================================================================================================================
* Includes undistributed net investment income of: $ 2,173,927 $ 1,607,584
===================================================================================================================
See Notes to Financial Statements.
13 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Notes to Financial Statements (unaudited)
================================================================================
1. Significant Accounting Policies
Smith Barney California Municipals Fund Inc. ("Fund"), a Maryland corporation,
is registered under the Investment Company Act of 1940, as amended, as a
non-diversified, open-end management investment company.
The significant accounting policies consistently followed by the Fund are: (a)
security transactions are accounted for on trade date; (b) securities are valued
at the mean between the quoted bid and asked prices as provided by an
independent pricing service; (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 Directors; (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 using the
specific identification method; (f) interest income, adjusted for amortization
of premium and accretion of discount, is recorded on an accrual basis; (g) class
specific expenses are charged to each class; management fees and general fund
expenses are allocated on the basis of relative net assets of each class or on
another reasonable basis; (h) dividends and distributions to shareholders are
recorded on the ex-dividend date; (i) the Fund intends to comply with the
applicable provisions of the Internal Revenue Code of 1986, as amended,
pertaining to regulated investment companies and to make distributions of
taxable income sufficient to relieve it from substantially all Federal income
and excise taxes; (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.
2. Exempt-Interest Dividends and Other Distributions
The Fund intends to satisfy conditions that will enable interest from municipal
securities, which is exempt from 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 Fund's policy to distribute dividends monthly. Capital gains
distributions, if any, are taxable to shareholders, and are declared and paid at
least annually.
3. Investment Advisory Agreement, Administration Agreement and Other
Transactions
Smith Barney Fund Management LLC ("SBFM"), an indirect wholly-owned subsidiary
of Citigroup Inc. ("Citigroup"), acts as investment adviser to the Fund. The
Fund pays SBFM an advisory fee calculated at an annual rate of 0.30% of the
Fund's average daily net assets. This fee is calculated daily and paid monthly.
SBFM also acts as the Fund's administrator for which the Fund pays a fee
calculated at an annual rate of 0.20% of the Fund's average daily net assets up
to $500 million and 0.18% of the Fund's average daily net assets in excess of
$500 million. This fee is calculated daily and paid monthly.
Citicorp Trust Bank, fsb. ("CTB"), another subsidiary of Citigroup, acts as the
Fund's transfer agent. PFPC Global Fund Services ("PFPC") and Primerica
Shareholder Services ("PSS"), another subsidiary of Citigroup, act as the Fund's
sub-transfer agents. CTB receives account fees and asset-based fees that vary
according to the size and type of account. PFPC and PSS are responsible for
shareholder recordkeeping and financial processing for all shareholder accounts
and are paid by CTB. For the six months ended August 31, 2003, the Fund paid
transfer agent fees of $77,918 to CTB.
14 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
Citigroup Global Markets Inc. ("CGM") and PFSDistributors, Inc., both of which
are subsidiaries of Citigroup, act as the Fund's distributors.
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 addition, Class A shares also 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 August 31, 2003, CGM and its affiliates received sales
charges of approximately $337,000 and $39,000 on sales of the Fund's Class A and
L shares, respectively. In addition, for the six months ended August 31, 2003,
CDSCs paid to CGM and its affiliates were approximately:
Class A Class B Class L
================================================================================
CDSCs $24,000 $126,000 $1,000
================================================================================
All officers and one Director of the Fund are employees of Citigroup or its
affiliates.
4. Investments
During the six months ended August 31, 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:
================================================================================
Purchases $ 97,482,216
- --------------------------------------------------------------------------------
Sales 108,980,687
================================================================================
At August 31, 2003, aggregate gross unrealized appreciation and depreciation of
investments for Federal income tax purposes were substantially as follows:
================================================================================
Gross unrealized appreciation $72,329,415
Gross unrealized depreciation (5,621,842)
- --------------------------------------------------------------------------------
Net unrealized appreciation $66,707,573
================================================================================
5. 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 contract. During the period the futures contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking-to-market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin payments are
received or made and recognized as assets due 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.
15 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
At August 31, 2003, the Fund had the following open futures contracts:
Number of Basis Market Unrealized
Contracts Expiration Value Value Gain (Loss)
==================================================================================================================================
To Sell:
U.S. Treasury Bonds 1,550 9/03 $183,965,625 $166,479,687 $17,485,938
U.S. Treasury Bonds 875 12/03 92,724,219 92,750,000 (25,781)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Unrealized Gain on Open Futures Contracts $17,460,157
===================================================================================================================================
6. Concentration of Credit
The Fund primarily invests in debt obligations issued by the State of California
and local governments in the State of California, its political subdivisions,
agencies and public authorities to obtain funds for various public purposes. The
Fund is more susceptible to factors adversely affecting issuers of California
municipal securities than is a municipal bond fund that is not concentrated in
these issuers to the same extent.
7. Class Specific Expenses
Pursuant to a Distribution Plan, the Fund pays a service fee with respect to its
Class A, B and L shares calculated at the annual rate of 0.15% of the average
daily net assets of each respective class. The Fund also 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 for each class, respectively. For the
six months ended August 31, 2003, total Distribution Plan fees, which are
accrued daily and paid monthly, were as follows:
Class A Class B Class L
================================================================================
Distribution Plan Fees $541,417 $500,915 $214,303
================================================================================
For the six months ended August 31, 2003, total Shareholder Servicing fees were
as follows:
Class A Class B Class L
================================================================================
Shareholder Servicing Fees $62,208 $27,244 $8,521
================================================================================
For the six months ended August 31, 2003, total Shareholder Communication
expenses were as follows:
Class A Class B Class L
================================================================================
Shareholder Communication Expenses $11,200 $4,307 $1,348
================================================================================
8. Distributions Paid to Shareholders by Class
Six Months Ended Year Ended
August 31, 2003 February 28, 2003
================================================================================
Net Investment Income
Class A $15,726,813 $33,776,815
Class B 2,957,874 6,604,782
Class L 1,164,829 2,453,136
- --------------------------------------------------------------------------------
Total $19,849,516 $42,834,733
================================================================================
16 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Notes to Financial Statements (unaudited) (continued)
================================================================================
9. Capital Shares
At August 31, 2003, the Fund had 500 million shares of $0.001 par value capital
stock authorized. The Fund has the ability to establish multiple classes of
shares. Each share of a class represents an identical interest in the Fund and
has the same rights, except that each class bears certain expenses specifically
related to the distribution of its shares.
Transactions in shares of each class were as follows:
Six Months Ended Year Ended
August 31, 2003 February 28, 2003
--------------------------------- ---------------------------------
Shares Amount Shares Amount
===========================================================================================================================
Class A
Shares sold 2,277,089 $ 38,187,608 6,865,113 $ 115,404,814
Shares issued on reinvestment 494,596 8,279,393 1,073,073 18,045,904
Shares reacquired (4,681,860) (78,506,605) (8,295,606) (139,736,628)
- ---------------------------------------------------------------------------------------------------------------------------
Net Decrease (1,910,175) $(32,039,604) (357,420) $ (6,285,910)
===========================================================================================================================
Class B
Shares sold 508,166 $ 8,514,326 1,453,307 $ 24,480,955
Shares issued on reinvestment 89,486 1,495,752 203,405 3,416,150
Shares reacquired (1,221,792) (20,436,866) (2,292,714) (38,569,588)
- ---------------------------------------------------------------------------------------------------------------------------
Net Decrease (624,140) $(10,426,788) (636,002) $ (10,672,483)
===========================================================================================================================
Class L
Shares sold 261,309 $ 4,373,180 773,862 $ 13,037,062
Shares issued on reinvestment 46,257 772,475 98,008 1,644,565
Shares reacquired (427,969) (7,157,831) (705,628) (11,858,907)
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) (120,403) $ (2,012,176) 166,242 $ 2,822,720
===========================================================================================================================
17 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Financial Highlights
================================================================================
For a share of each class of capital stock outstanding throughout each year
ended February 28, unless otherwise noted:
Class A Shares 2003(1)(2) 2003(2) 2002(2) 2001(2) 2000(2)(3) 1999(2)
===================================================================================================================================
Net Asset Value, Beginning of Period $16.76 $16.93 $16.70 $15.28 $16.93 $16.99
- -----------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(4) 0.38 0.77 0.79 0.79 0.78 0.77
Net realized and unrealized gain (loss)(4) (0.13) (0.17) 0.22 1.41 (1.67) 0.07
- -----------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.25 0.60 1.01 2.20 (0.89) 0.84
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.37) (0.77) (0.78) (0.78) (0.76) (0.78)
In excess of net investment income -- -- -- -- -- (0.02)
Net realized gains -- -- -- -- -- (0.10)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.37) (0.77) (0.78) (0.78) (0.76) (0.90)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $16.64 $16.76 $16.93 $16.70 $15.28 $16.93
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return 1.49%++ 3.59% 6.20% 14.70% (5.36)% 5.02%
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $ 697 $ 734 $ 747 $ 698 $ 628 $ 769
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 0.68%+ 0.70% 0.68% 0.68% 0.70% 0.68%
Net investment income(4) 4.48+ 4.58 4.68 4.91 4.99 4.53
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 11% 12% 21% 29% 29% 13%
===================================================================================================================================
(1) For the six months ended August 31, 2003 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the year ended February 29, 2000.
(4) Effective March 1, 2001, the Fund adopted a change in the accounting
method that requires the Fund to amortize premiums and accrete all
discounts. Without the adoption of this change, for the year ended
February 28, 2002, those amounts would have been $0.77, $0.24 and 4.61%
for net investment income, net realized and unrealized gain and the ratio
of net investment income to average net assets, respectively. Per share
information, ratios and supplemental data for the periods prior to March
1, 2001 have not been restated to reflect this change in presentation.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
18 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each year
ended February 28, unless otherwise noted:
Class B Shares 2003(1)(2) 2003(2) 2002(2) 2001(2) 2000(2)(3) 1999(2)
===================================================================================================================================
Net Asset Value, Beginning of Period $16.74 $16.92 $16.69 $15.28 $16.93 $16.98
- -----------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(4) 0.33 0.68 0.69 0.70 0.70 0.68
Net realized and unrealized gain (loss)(4) (0.13) (0.18) 0.24 1.41 (1.68) 0.08
- -----------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.20 0.50 0.93 2.11 (0.98) 0.76
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.32) (0.68) (0.70) (0.70) (0.67) (0.69)
In excess of net investment income -- -- -- -- -- (0.02)
Net realized gains -- -- -- -- -- (0.10)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.32) (0.68) (0.70) (0.70) (0.67) (0.81)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $16.62 $16.74 $16.92 $16.69 $15.28 $16.93
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return 1.22%++ 3.02% 5.69% 14.06% (5.87)% 4.56%
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $ 146 $ 157 $ 170 $ 183 $ 196 $ 247
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.20%+ 1.22% 1.20% 1.19% 1.22% 1.20%
Net investment income(4) 3.96+ 4.06 4.14 4.39 4.47 4.02
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 11% 12% 21% 29% 29% 13%
===================================================================================================================================
(1) For the six months ended August 31, 2003 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the year ended February 29, 2000.
(4) Effective March 1, 2001, the Fund adopted a change in the accounting
method that requires the Fund to amortize premiums and accrete all
discounts. Without the adoption of this change, for the year ended
February 28, 2002, those amounts would have been $0.68, $0.25 and 4.07%
for net investment income, net realized and unrealized gain and the ratio
of net investment income to average net assets, respectively. Per share
information, ratios and supplemental data for the periods prior to March
1, 2001 have not been restated to reflect this change in presentation.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
19 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
Financial Highlights (continued)
================================================================================
For a share of each class of capital stock outstanding throughout each year
ended February 28, unless otherwise noted:
Class L Shares 2003(1)(2) 2003(2) 2002(2) 2001(2) 2000(2)(3) 1999(2)(4)
====================================================================================================================================
Net Asset Value, Beginning of Period $16.72 $16.90 $16.68 $15.26 $16.91 $16.97
- ------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(5) 0.33 0.68 0.69 0.69 0.69 0.67
Net realized and unrealized gain (loss)(5) (0.13) (0.19) 0.22 1.42 (1.68) 0.07
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.20 0.49 0.91 2.11 (0.99) 0.74
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.32) (0.67) (0.69) (0.69) (0.66) (0.68)
In excess of net investment income -- -- -- -- -- (0.02)
Net realized gains -- -- -- -- -- (0.10)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.32) (0.67) (0.69) (0.69) (0.66) (0.80)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $16.60 $16.72 $16.90 $16.68 $15.26 $16.91
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 1.21%++ 2.99% 5.59% 14.09% (5.92)% 4.45%
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (millions) $ 59 $ 62 $ 60 $ 51 $ 38 $ 48
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.24%+ 1.26% 1.25% 1.24% 1.28% 1.24%
Net investment income(5) 3.92+ 4.01 4.12 4.34 4.41 3.97
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 11% 12% 21% 29% 29% 13%
====================================================================================================================================
(1) For the six months ended August 31, 2003 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the year ended February 29, 2000.
(4) On June 12, 1998, Class C shares were renamed Class L shares.
(5) Effective March 1, 2001, the Fund adopted a change in the accounting
method that requires the Fund to amortize premiums and accrete all
discounts. Without the adoption of this change, for the year ended
February 28, 2002, those amounts would have been $0.68, $0.23 and 4.05%
for net investment income, net realized and unrealized gain and the ratio
of net investment income to average net assets, respectively. Per share
information, ratios and supplemental data for the periods prior to March
1, 2001 have not been restated to reflect this change in presentation.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
20 Smith Barney California Municipals Fund Inc. | 2003 Semi-Annual Report
================================================================================
SMITH BARNEY
CALIFORNIA MUNICIPALS FUND INC.
================================================================================
DIRECTORS
Herbert Barg
Dwight B. Crane
Burt N. Dorsett
R. Jay Gerken, CFA
Chairman
Elliot S. Jaffe
Stephen E. Kaufman
Joseph J. McCann
Cornelius C. Rose, Jr.
OFFICERS
R. Jay Gerken, CFA
President and
Chief Executive Officer
Lewis E. Daidone
Senior Vice President and
Chief Administrative Officer
Richard L. Peteka
Chief Financial Officer
and Treasurer
Joseph P. Deane
Vice President and
Investment Officer
Kaprel Ozsolak
Controller
Christina T. Sydor
Secretary
INVESTMENT ADVISER
ANDADMINISTRATOR
Smith Barney Fund
Management LLC
DISTRIBUTORS
Citigroup Global Markets Inc.
PFS Distributors, 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 AGENTS
PFPC Global Fund Services
P.O. Box 9699
Providence, Rhode Island
02940-9699
Primerica Shareholders Services
P.O. Box 9662
Providence, Rhode Island
02940-9662
- --------------------------------------------------------------------------------
Smith Barney California Municipals Fund Inc.
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of
Smith Barney California Municipals Fund Inc., 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 Fund. If used as sales material after November 30, 2003, this report must be
accompanied by performance information for the most recently completed calendar
quarter.
SMITH BARNEY CALIFORNIA MUNICIPALS FUND INC.
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
FD0434 10/03 03-5510
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 California Municipals Fund Inc.
By: /s/ R. Jay Gerken R. Jay Gerken
Chief Executive Officer of
Smith Barney California Municipals Fund Inc.
Date: October 31, 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 California Municipals Fund Inc.
Date: October 31, 2003
By: /s/ Richard L. Peteka
Richard L. Peteka
Chief Financial Officer of
Smith Barney California Municipals Fund Inc.
Date: October 31, 2003