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 811-5813

LIQUID RESERVES PORTFOLIO
(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:  AUGUST 31
Date of reporting period: AUGUST 31, 2004

ITEM 1.  REPORT TO STOCKHOLDERS.

         The Annual Report to Stockholders is filed herewith.

Liquid Reserves Portfolio
S C H E D U L E   O F   I N V E S T M E N T S	August 31, 2004

	Principal
	Amount
Issuer	(000’s omitted)		Value
Asset Backed — 4.8%
Blue Heron Financial
Corp.,*
1.63% due 10/15/04	$	500,000	$	500,000,000
1.63% due 12/17/04		175,000		175,000,000
1.64% due 3/18/05		200,000		200,000,000
1.63% due 5/18/05		438,750		438,750,000
Restructured Asset
Securitization,*
1.61% due 12/22/04		500,000		500,000,000
				1,813,750,000
Certificates of Deposit (Domestic) — 3.1%
Harris Trust & Savings,
1.71% due 12/27/04		193,000		193,000,000
Washington Mutual Fin. Corp.,
1.65% due 11/12/04		300,000		300,017,124
Wells Fargo Bank and Co.,
1.52% due 9/8/04		400,000		400,000,000
1.53% due 9/15/04		269,000		269,000,000
				1,162,017,124
Certificates of Deposit (Euro) — 9.3%
Barclays Bank PLC,
1.11% due 9/9/04		100,000		100,000,110
BNP Paribas,
1.75% due 12/31/04		450,000		450,000,000
1.80% due 2/11/05		500,000		500,000,000
Credit Agricole SA,
1.07% due 9/21/04		100,000		99,999,442
Credit Lyonnais SA,
1.09% due 9/20/04		395,000		395,001,037
Depfa Bank PLC,
1.50% due 9/21/04		200,000		200,000,000
Fortis Bank,
1.51% due 9/7/04		500,000		500,000,000
HBOS Treasury
Services PLC,
1.49% due 9/21/04		750,000		750,000,000
Nationwide Building
Society,
1.09% due 9/9/04		100,000		100,000,215
UBS AG,
1.75% due 12/31/04		150,000		150,000,000
Unicredito Italiano SPA,
1.08% due 9/20/04		250,000		250,000,000
				3,495,000,804
Certificates of Deposit (Yankee) — 6.9%
Caylon,
1.78% due 12/28/04		133,900		133,900,000
1.70% due 12/30/04		500,000		500,000,000
1.75% due 12/31/04		150,000		150,000,000
Credit Suisse First
Boston USA,
1.71% due 12/31/04	$	300,000	$	300,000,000
1.75% due 12/31/04		400,000		400,006,669
Deutsche Bank AG,
1.73% due 12/30/04		200,000		199,972,792
HBOS Treasury
Services PLC,
1.08% due 9/27/04		300,000		300,000,000
1.73% due 12/31/04		300,000		300,000,000
Toronto Dominion
Bank,
1.53% due 9/13/04		200,000		200,000,000
Unicredito Italiano SPA,
1.56% due 10/6/04		100,000		100,005,327
				2,583,884,788
Commercial Paper — 36.7%
Amstel Funding Corp.,
1.08% due 9/16/04		200,000		199,910,417
1.77% due 2/1/05		588,310		583,884,438
Atlantis One
Funding Corp.,
1.07% due 9/1/04		154,189		154,189,000
1.78% due 12/8/04		104,452		103,945,872
1.80% due 12/15/04		100,000		99,475,000
Atomium Funding
Corp.,
1.09% due 9/2/04		49,290		49,288,508
1.09% due 9/8/04		21,123		21,118,523
1.11% due 9/17/04		113,696		113,640,163
1.56% due 9/22/04		100,161		100,069,853
1.55% due 10/5/04		80,113		79,995,723
Banco Santander,
1.55% due 9/22/04		88,483		88,402,997
BankAmerica Corp,
1.75% due 2/4/05		450,000		446,587,500
Beethoven Funding
Corp.,
1.55% due 9/7/04		328,464		328,379,147
1.55% due 9/10/04		364,716		364,574,673
1.57% due 9/15/04		261,152		260,992,552
1.57% due 9/17/04		131,701		131,609,102
1.56% due 9/20/04		154,581		154,453,727
1.60% due 9/27/04		103,759		103,639,100
Caisse Nationale
Des Caisses,
1.48% due 9/14/04		150,000		149,919,833
Cobbler Funding Ltd.,
1.55% due 9/15/04		156,290		156,195,792
Crown Point
Capital Co. LLC,
1.07% due 9/10/04		182,993		182,944,049
1.80% due 2/8/05		151,409		150,197,728
Curzon Funding LLC,
1.56% due 9/14/04		100,000		99,943,667

25

Liquid Reserves Portfolio
S C H E D U L E   O F   I N V E S T M E N T S (Continued)	August 31, 2004

	Principal
	Amount
Issuer	(000’s omitted)		Value
Commercial Paper — (cont’d.)
Depfa Bank PLC,
1.47% due 9/17/04	$	157,000	$	156,897,775
1.50% due 10/6/04		194,000		193,717,083
Falcon Asset
Securitization,
1.50% due 9/8/04		201,541		201,482,217
Georgetown Funding,
1.58% due 9/2/04		100,429		100,424,592
1.54% due 9/7/04		100,000		99,974,333
1.50% due 9/16/04		284,710		284,532,056
1.50% due 9/20/04		382,095		381,792,510
1.58% due 9/21/04		100,000		99,912,222
1.62% due 9/27/04		100,000		99,883,000
1.62% due 9/30/04		137,989		137,808,924
1.58% due 10/15/04		500,000		499,034,444
Giro Balanced Funding,
1.60% due 9/30/04		110,000		109,858,222
Grampian Funding LLC,
1.71% due 12/20/04		130,000		129,320,750
1.72% due 12/30/04		200,000		198,853,333
Hannover Funding Co. LLC,
1.51% due 9/2/04		76,592		76,588,787
1.55% due 9/7/04		123,289		123,257,150
1.55% due 9/9/04		60,082		60,061,305
1.55% due 9/20/04		115,000		114,905,923
Jupiter Securitization Corp.,
1.50% due 9/2/04		140,000		139,994,167
Legacy Capital LLC,
1.89% due 2/16/05		146,479		145,187,055
Mane Funding Corp.,
1.54% due 9/17/04		100,000		99,931,555
Mica Funding LLC,
1.56% due 9/13/04		207,000		206,892,360
1.50% due 9/20/04		127,000		126,899,458
1.53% due 9/20/04		400,000		399,677,000
1.53% due 10/1/04		300,000		299,617,500
1.55% due 10/7/04		150,000		149,767,500
1.57% due 10/7/04		100,000		99,843,000
Nationwide Building
Society,
1.09% due 9/10/04		100,000		99,972,750
1.48% due 9/17/04		297,000		296,804,639
Nyala Funding LLC,
1.08% due 9/15/04		133,347		133,290,994
1.65% due 10/15/04		100,000		99,798,333
PACE Receivables
Funding,
1.50% due 9/3/04		118,436		118,426,130
Paradigm Funding LLC,
1.52% due 9/7/04		221,000		220,944,013
Perry Global Funding LLC,
1.07% due 9/2/04		251,645		251,637,521
1.07% due 9/7/04		147,133		147,106,761
Polonius Inc.,
1.55% due 9/15/04		129,000		128,922,242
Regency Markets LLC,
1.55% due 9/17/04	$	103,805	$	103,733,490
1.50% due 9/20/04		196,606		196,450,355
1.60% due 9/30/04		80,000		79,896,889
Saint Germain
Holdings,
1.48% due 9/15/04		186,000		185,892,947
1.56% due 9/16/04		100,000		99,935,000
1.60% due 9/27/04		220,000		219,745,777
Scaldis Capital Ltd.,
1.08% due 9/22/04		105,000		104,933,850
1.60% due 9/28/04		161,975		161,780,630
Sierra Madre
Funding Ltd.,
1.60% due 9/14/04		170,000		169,901,778
Solitaire Funding Ltd.,
1.55% due 9/7/04		190,110		190,060,888
1.60% due 9/23/04		108,780		108,673,637
Spintab AB,
1.49% due 9/15/04		112,000		111,935,103
Surrey Funding Corp.,
1.60% due 9/29/04		120,000		119,850,667
Ticonderoga
1.53% due 9/7/04		185,431		185,383,715
1.55% due 9/22/04		110,242		110,142,323
Tulip Funding Corp.,
1.62% due 9/30/04		400,000		399,478,000
1.80% due 11/26/04		100,000		99,570,000
Victory Receivables
Corp.,
1.53% due 9/2/04		100,000		99,995,750
1.55% due 9/9/04		100,320		100,285,445
1.57% due 9/21/04		124,274		124,165,605
Wal Mart Funding Corp.,
1.55% due 9/20/04		100,000		99,918,194
Windmill Funding
Corp.,
1.50% due 9/9/04		175,000		174,941,667
Yorktown Capital LLC,
1.48% due 9/17/04		185,101		184,979,244
				13,788,025,922
Corporate Notes -— 16.1%
Brahms Funding Corp.,
1.55% due 9/7/04		346,880		346,790,194
1.59% due 9/21/04		398,227		397,875,231
1.60% due 9/22/04		107,427		107,326,735
1.63% due 9/27/04		110,000		109,870,506
1.64% due 9/28/04		266,917		266,588,692
Fenway Funding LLC,
1.55% due 9/7/04		438,912		438,798,614
1.55% due 9/10/04		110,153		110,110,316
1.59% due 9/16/04		146,727		146,629,793
1.62% due 9/27/04		119,637		119,497,025
Foxboro Funding Ltd.,
1.61% due 9/9/04		80,369		80,340,246

26

Liquid Reserves Portfolio
S C H E D U L E   O F   I N V E S T M E N T S (Continued)	August 31, 2004

	Principal
	Amount
Issuer	(000’s omitted)			Value
Corporate Notes -— (cont’d.)
Harwood Street Funding LLC,
1.59% due 9/1/04	$	96,500		$	96,500,000
1.57% due 9/13/04		187,275			187,176,993
1.57% due 9/23/04		187,364			187,184,235
Main Street,
1.57% due 9/1/04		100,000			100,000,000
1.57% due 9/3/04		46,095			46,090,979
1.58% due 9/9/04		348,000			347,877,813
1.60% due 9/10/04		100,000			99,960,000
1.60% due 9/16/04		232,000			231,845,335
1.60% due 9/17/04		100,000			99,928,889
1.60% due 9/21/04		115,000			114,897,778
1.62% due 9/22/04		160,000			159,848,800
1.64% due 9/29/04		100,000			99,872,442
1.69% due 10/7/04		206,000			205,651,860
1.69% due 10/12/04		150,000			149,711,292
Mica Funding LLC,
1.59% due 9/20/04		375,000			374,685,315
Nyala Funding LLC,
1.72% due 11/18/04		151,000			150,437,273
Park Granada LLC,
1.52% due 9/7/04		350,000			349,911,625
1.53% due 9/8/04		252,382			252,306,916
1.60% due 9/20/04		129,800			129,690,391
1.58% due 9/21/04		100,000			99,912,222
1.58% due 9/23/04		350,000			349,662,054
1.63% due 9/28/04		110,000			109,865,525
					6,066,845,089
Master Notes — 3.2%
Merrill Lynch & Co. Inc.,*
1.71% due 9/1/04		371,300			371,300,000
Morgan Stanley,*
1.76% due 9/1/04		850,000			850,000,000
					1,221,300,000
Medium Term Notes — 7.9%
K2 USA LLC,*
1.50% due 9/20/04		100,500			100,420,438
1.60% due 9/28/04		150,000			149,997,250
Links Finance Corp.,*
1.56% due 1/18/05		250,000			249,981,165
Merrill Lynch &
Co. Inc.,*
1.51% due 10/1/05		385,000			385,000,000
Premier Asset
Collection Entity Ltd.,*
1.57% due 4/25/05		100,000			99,980,460
1.57% due 7/15/05		100,000			99,986,937
Sigma Finance Inc.,*
1.56% due 1/18/05		175,000			174,986,816
1.57% due 1/21/05		100,000			99,990,327
1.56% due 5/16/05		250,000			249,955,872
1.56% due 7/19/05		300,000			299,920,850
1.56% due 7/25/05		200,000			199,946,540
Stanfield Victoria
Funding LLC,*
1.56% due 7/20/05	$	100,000		$	99,969,485
1.57% due 8/1/05		100,000			99,976,935
1.56% due 8/22/05		100,000			99,952,027
Tango Finance Corp.,*
1.58% due 8/15/05		122,000			121,994,168
Whistlejacket
Capital LLC,*
1.56% due 12/15/04		111,000			110,993,597
White Pine
Finance LLC,*
1.56% due 9/15/04		100,000			99,999,044
1.60% due 9/28/04		108,000			107,997,992
1.58% due 10/25/04		118,000			117,996,499
					2,969,046,402
Promissory Note — 2.9%
Goldman Sachs
Group Inc.
1.72% due 2/24/05		1,100,000			1,100,000,000
Time Deposits — 2.4%
Dexia Bank
1.58% due 9/1/04		578,000			578,000,000
Svenska Handelsbanken
1.55% due 9/1/04		324,311			324,311,000
					902,311,000
United States
Government Agencies — 6.6%
Federal Home
Loan Bank*
1.49% due 9/17/04		100,000			99,933,777
1.49% due 10/19/04		250,000			249,503,333
1.89% due 3/15/05		200,000			197,952,500
Federal National
Mortgage
Association,*
1.48% due 10/13/04		670,000			668,843,134
1.49% due 10/13/04		775,578			774,234,822
1.72% due 2/2/05		100,000			99,264,222
1.75% due 5/23/05		100,000			100,000,000
1.49% due 7/6/05		275,000			274,886,517
					2,464,618,305
Total Investments,
at Amortized Cost		99.9%			37,566,799,434
Other Assets,
Less Liabilities		0.1			19,843,328
Net Assets		100.0	%	$	37,586,642,762

* The coupon rate listed for floating or adjustable rate securities represent the rate at period end.The due dates on these securities reflect the next interest rate reset date or, when applicable, the maturity date.

See Notes to Financial Statements.

27

Liquid Reserves Portfolio
S T A T E M E N T   O F   A S S E T S  A N D   L I A B I L I T I E S
August 31, 2004
ASSETS:
Investments at value (Note 1A)				$	37,566,799,434
Cash					498
Interest receivable					23,744,982
Total Assets					37,590,544,914
LIABILITIES:
Management fee payable (Note 2)					2,448,052
Accrued expenses and other liabilities					1,454,100
Total Liabilities					3,902,152
Total Net Assets				$	37,586,642,762
Represented by:
Capital paid in excess of par value				$	37,586,642,762
S TAT E M E N T   O F    O P E R AT I O N S
For the Year Ended August 31, 2003
INTEREST (NOTE 1):				$	435,706,091
EXPENSES:
Management fee (Note 2)	$	55,561,429
Custody and fund accounting fees		7,496,410
Trustees’ fees		579,480
Audit and legal		279,939
Other		30,699
Total Expenses		63,947,957
Less: management fee waived (Note 2)		(26,870,821	)
fees paid indirectly (Note 1F)		(297	)
Net Expenses					37,076,839
Net Investment Income					398,629,252
Net Realized Gain on Investment					3,202,155
Increase in Net Assets From Operations				$	401,831,407
See Notes to Financial Statements.

28

Liquid Reserves Portfolio
S T A T E M E N T S   O F   C H A N G E S   I N   N E T   A S S E T S
	Years Ended August 31,
	2004			2003
OPERATIONS:
Net investment income	$	398,629,252		$	619,131,302
Net realized gain on investments		3,202,155			—
Increase in Net Assets From Operations		401,831,407			619,131,302
CAPITAL TRANSACTIONS:
Proceeds from contributions (Note 1)		86,116,419,663			95,248,125,837
Value of withdrawals		(88,378,702,148	)		(101,427,035,864	)
Decrease in Net Assets From
Capital Transactions		(2,262,282,485	)		(6,178,910,027	)
Decrease in Net Assets		(1,860,451,078	)		(5,559,778,725	)
NET ASSETS:
Beginning of year		39,447,093,840			45,006,872,565
End of year	$	37,586,642,762		$	39,447,093,840
See Notes to Financial Statements.

29

Liquid Reserves Portfolio
F I N A N C I A L   H I G H L I G H T S

	Years Ended August 31,
	2004			2003			2002			2001			2000
Ratios/Supplemental Data:
Net assets (000’s omitted)	$	37,586,643		$	39,447,094		$	45,006,873		$	32,073,343		$	14,392,341
Ratios to Average Net Assets:
Expenses#		0.10	%		0.10	%		0.10	%		0.10	%		0.10	%
Net investment income		1.09	%		1.39	%		2.29	%		5.27	%		5.93	%
Total Return		1.09	%		1.49	%		2.36	%		N/A			N/A
Note: If agents of the Portfolio had not voluntarily waived all or a portion of their fees for the years
indicated, the ratios would have been as follows:
Ratios to Average Net Assets:
Expenses		0.17	%		0.17	%		0.19	%		0.22	%		0.22	%
Net investment income		1.02	%		1.32	%		2.20	%		5.15	%		5.81	%

# The ratio of expenses to average net assets will not exceed 0.10% as a result of a voluntary expense limitation, which may be terminated at any time.

See Notes to Financial Statements.

30

Liquid Reserves Portfolio
N O T E S   T O   F I N A N C I A L   S T A T E M E N T S

1. Organization and Significant Accounting Policies

Liquid Reserves Portfolio formerly known as Cash Reserves Portfolio, (the “Portfolio”), is registered under the U.S. Investment Company Act of 1940, as amended (the “1940 Act”), as a no-load, diversified, open-end management investment company which was organized as a trust under the laws of the State of New York. The Declaration of Trust permits the Trustees to issue beneficial interests in the Portfolio. Citi Fund Management Inc. (the “Manager”) acts as the Investment Manager. At August 31, 2004, all investors in the Portfolio were funds advised by the Manager and or its affiliates.

The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

The following are significant accounting policies consistently followed by the Portfolio and are in conformity with GAAP:

     A. Valuation of Investments Money market instruments are valued at amortized cost, in accordance with Rule 2a-7 under the 1940 Act, which approximates market value. This method involves valuing a portfolio security at its cost and thereafter assuming a constant amortization to maturity of any discount or premium. The Portfolio’s use of amortized cost is subject to its compliance with certain conditions as specified under Rule 2a-7 of the 1940 Act.

     B. Interest Income and Expenses Interest income consists of interest accrued and discount earned (including both original issue and market discount adjusted for amortization of premium) on the investments of the Portfolio. Expenses of the Portfolio are accrued daily. The Portfolio bears all costs of its operations other than expenses specifically assumed by the Manager.

     C. Income Taxes The Portfolio is classified as a partnership for Federal income tax purposes. As such, each investor in the Portfolio is treated as owner of its proportionate share of the net assets, income, expenses and realized and unrealized gains and losses of the Portfolio. Therefore, no Federal income tax provision is required. It is intended that the Portfolio’s assets will be managed so an investor in the Portfolio can satisfy the requirements of the subchapter M of the Internal Revenue Code.

     D. Repurchase Agreements It is the policy of the Portfolio to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian bank’s vault, all securities held as collateral in support of repurchase agreement investments. Additionally, procedures have been established to monitor, on a daily basis, the market value of the repurchase agreements’ underlying investments to ensure the existence of a proper level of collateral.

     E. Other Purchases, maturities and sales of money market instruments are accounted for on the date of the transaction. Realized gains and losses are calculated on the identified cost basis.

31

Liquid Reserves Portfolio
N O T E S   T O   F I N A N C I A L   S T A T E M E N T S(Continued)

     F. Fees Paid Indirectly The Portfolio’s custodian calculates its fees based on the Portfolio’s average daily net assets. The fee is reduced according to a fee arrangement, which provides for custody fees to be reduced based on a formula developed to measure the value of cash deposited with the custodian by the Portfolio. This amount is shown as a reduction of expenses on the Statement of Operations.

2. Management Fees

The Manager is responsible for overall management of the Portfolio’s business affairs, and has a Management Agreement with the Portfolio. The Manager or an affiliate also provides certain administrative services to the Portfolio. These administrative services include providing general office facilities and supervising the overall administration of the Portfolio.

The management fees paid to the Manager are accrued daily and payable monthly. The management fee is computed at an annual rate of 0.15% of the Funds’ average daily net assets. The management fee amounted to $55,561,429 of which $26,870,821 was voluntarily waived for the year ended August 31, 2004. Such waiver is voluntary and can be terminated at any time at the discretion of the Manager. The Portfolio pays no compensation directly to any Trustee or any officer who is affiliated with the Manager, all of whom receive remuneration for their services to the Portfolio from the Manager or its affiliates. Certain of the officers and a Trustee of the Portfolio are officers and a director of the Manager or its affiliates.

3. Investment Transactions

Purchases, maturities and sales of money market instruments aggregated $814,948,110,606 and $812,036,318,664, respectively, for the year ended August 31, 2004.

4. Federal Income Tax Basis of Investment Securities

The tax cost of investment securities owned at August 31, 2004, for federal income tax purposes, amounted to $37,566,799,434.

5. Trustee Retirement Plan

The Trustees of the Fund have adopted a Retirement Plan for all Trustees who are not “interested persons” of the Fund, within the meaning of the 1940 Act. Under the Plan, all Trustees are required to retire from the Board as of the last day of the calendar year in which the applicable Trustee attains age 75 (certain Trustees who had already attained age 75 when the Plan was adopted were required to retire effective December 31, 2003). Trustees may retire under the Plan before attaining the mandatory retirement age. Trustees who have served as Trustee of the Trust or any of the investment companies associated with Citigroup for at least ten years when they retire are eligible to receive the maximum retirement benefit under the Plan. The maximum retirement benefit is an amount equal to five times the amount of retainer and regular meeting fees payable to a Trustee during the calendar year

32

Liquid Reserves Portfolio
N O T E S   T O   F I N A N C I A L   S T A T E M E N T S(Continued)

ending on or immediately prior to the applicable Trustee’s retirement. Amounts under the Plan may be paid in installments or in a lump sum (discounted to present value). Three former Trustees are currently receiving payments under the plan. In addition two other former Trustees received a lump sum payment under the plan during this period. The Fund’s allocable share of the expenses of the Plan for the year ended August 31, 2004 and the related liability at August 31, 2004 was not material.

6. Additional Information

In connection with an investigation previously disclosed by Citigroup, the Staff of the Securities and Exchange Commission (“SEC”) has notified Citigroup Asset Management (“CAM”), the Citigroup business unit that includes the Portfolio’s investment manager and other investment advisory companies; Citicorp Trust Bank (“CTB”), an affiliate of CAM; Thomas W. Jones, the former CEO of CAM; and two other individuals, one of whom is an employee and the other of whom is a former employee of CAM, that the SEC Staff is considering recommending a civil injunctive action and/or an administrative proceeding against each of them relating to the creation and operation of an internal transfer agent unit to serve various CAM-managed funds.

In 1999, CTB entered the transfer agent business. CTB hired an unaffiliated subcontractor to perform some of the transfer agent services. The subcontractor, in exchange, had signed a separate agreement with CAM in 1998 that guaranteed investment management revenue to CAM and investment banking revenue to a CAM affiliate. The sub-contractor’s business was later taken over by PFPC Inc., and at that time the revenue guarantee was eliminated and a one-time payment was made by the subcontractor to a CAM affiliate.

CAM did not disclose the revenue guarantee when the boards of various CAM-managed funds hired CTB as transfer agent. Nor did CAM disclose to the boards of the various CAM-managed funds the one-time payment received by the CAM affiliate when it was made.

In addition, the SEC Staff has indicated that it is considering recommending action based on the adequacy of the disclosures made to the fund boards that approved the transfer agency arrangement, CAM’s initiation and operation of, and compensation for, the transfer agent business and CAM’s retention of, and agreements with, the subcontractor.

Citigroup is cooperating fully in the investigation and will seek to resolve the matter in discussions with the SEC Staff. Although there can be no assurance, Citigroup does not believe that this matter will have a material adverse effect on the Portfolio. As previously disclosed, CAM has already agreed to pay the applicable funds, primarily through fee waivers, a total of approximately $17 million (plus interest) that is the amount of the revenue received by Citigroup relating to the revenue guarantee.

33

Liquid Reserves Portfolio
N O T E S   T O   F I N A N C I A L   S T A T E M E N T S(Unaudited) (Continued)

The Portfolio did not implement the contractual arrangement described above and therefore will not receive any portion of such payment.

34

Liquid Reserves Portfolio
R E P O R T   O F   I N D E P E N D E N T   R E G I S T E R E D   P U B L I C
A C C O U N T I N G   F I R M

To the Trustees and Investors of
Liquid Reserves Portfolio:

     In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Liquid Reserves Portfolio (the “Portfolio”) at August 31, 2004, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Portfolio’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these fin ancial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
October 22, 2004

35

Liquid Reserves Portfolio
A D D I T I O N A L   I N F O R M AT I O N (Unaudited)

Information about the Trustees and Officers of the Portfolio can be found on pages 19 through 24 of this report.

36

ITEM 2.  CODE OF ETHICS.

                  The registrant has adopted a code of ethics that applies to
                  the registrant's principal executive officer, principal
                  financial officer, principal accounting officer or controller.

ITEM 3.  AUDIT COMMITTEE FINANCIAL EXPERT.

                  The Board of Trustees of the registrant has determined that
                  Jane F. Dasher, the Chairman of the Board's Audit Committee,
                  possesses the technical attributes identified in Instruction
                  2(b) of Item 3 to Form N-CSR to qualify as an "audit committee
                  financial expert," and has designated Ms. Dasher as the Audit
                  Committee's financial expert. Ms. Dasher is an "independent"
                  Trustee pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.


Item 4.  Principal Accountant Fees and Services

(a)  Audit Fees for the Liquid Reserves Portfolio of $26,000 and $26,000 for the
     years ended 8/31/04 and 8/31/03.

(b)  Audit-Related Fees for the Liquid Reserves Portfolio of $0 and $0 for the
     years ended 8/31/04 and 8/31/03.

(c)  Tax Fees for Liquid Reserves Portfolio of $2,100 and $2,100 for the years
     ended 8/31/04 and 8/31/03. These amounts represent aggregate fees paid for
     tax compliance, tax advice and tax planning services, which include (the
     filing and amendment of federal, state and local income tax returns, timely
     RIC qualification review and tax distribution and analysis planning)
     rendered by the Accountant to Liquid Reserves Portfolio

(d)  All Other Fees for Liquid Reserves Portfolio of $0 and $0 for the years
     ended 8/31/04 and 8/31/03.

(e)  (1) Audit Committee's pre-approval policies and procedures described in
     paragraph (c) (7) of Rule 2-01 of Regulation S-X.

         The Charter for the Audit Committee (the "Committee") of the Board of
         each registered investment company (the "Fund") advised by Smith Barney
         Fund Management LLC or Salomon Brothers Asset Management Inc or one of
         their affiliates (each, an "Adviser") requires that the Committee shall
         approve (a) all audit and permissible non-audit services to be provided
         to the Fund and (b) all permissible non-audit services to be provided
         by the Fund's independent auditors to the Adviser and any Covered
         Service Providers if the engagement relates directly to the operations
         and financial reporting of the Fund. The Committee may implement
         policies and procedures by which such services are approved other than
         by the full Committee.

         The Committee shall not approve non-audit services that the Committee
         believes may impair the independence of the auditors. As of the date of
         the approval of this Audit Committee Charter, permissible non-audit
         services include any professional services (including tax services),
         that are not prohibited services as described below, provided to the
         Fund by the independent auditors, other than those provided to the Fund
         in connection with an audit or a review of the financial statements of



         the Fund. Permissible non-audit services may not include: (i)
         bookkeeping or other services related to the accounting records or
         financial statements of the Fund; (ii) financial information systems
         design and implementation; (iii) appraisal or valuation services,
         fairness opinions or contribution-in-kind reports; (iv) actuarial
         services; (v) internal audit outsourcing services; (vi) management
         functions or human resources; (vii) broker or dealer, investment
         adviser or investment banking services; (viii) legal services and
         expert services unrelated to the audit; and (ix) any other service the
         Public Company Accounting Oversight Board determines, by regulation, is
         impermissible.

         Pre-approval by the Committee of any permissible non-audit services is
         not required so long as: (i) the aggregate amount of all such
         permissible non-audit services provided to the Fund, the Adviser and
         any service providers controlling, controlled by or under common
         control with the Adviser that provide ongoing services to the Fund
         ("Covered Service Providers") constitutes not more than 5% of the total
         amount of revenues paid to the independent auditors during the fiscal
         year in which the permissible non-audit services are provided to (a)
         the Fund, (b) the Adviser and (c) any entity controlling, controlled by
         or under common control with the Adviser that provides ongoing services
         to the Fund during the fiscal year in which the services are provided
         that would have to be approved by the Committee; (ii) the permissible
         non-audit services were not recognized by the Fund at the time of the
         engagement to be non-audit services; and (iii) such services are
         promptly brought to the attention of the Committee and approved by the
         Committee (or its delegate(s)) prior to the completion of the audit.

         (2) For the Liquid Reserves Portfolio, the percentage of fees that were
         approved by the audit committee, with respect to: Audit-Related Fees
         were 100% and 100% for the years ended 8/31/04 and 8/31/03; Tax Fees
         were 100% and 100% for the years ended 8/31/04 and 8/31/03; and Other
         Fees were 100% and 100% for the years ended 8/31/04 and 8/31/03.

(f)  N/A

(g)  Non-audit fees billed by the Accountant for services rendered to Liquid
     Reserves Portfolio and CAM and any entity controlling, controlled by, or
     under common control with CAM that provides ongoing services to Liquid
     Reserves Portfolio were $2.8 million and $6.4 million for the years ended
     8/31/04 and 8/31/03.

(h)  Yes. The Liquid Reserves Portfolio's Audit Committee has considered whether
     the provision of non-audit services that were rendered to Service
     Affiliates which were not pre-approved(not requiring pre-approval) is
     compatible with maintaining the Auditor's independence. All services
     provided by the Accountant to the Liquid Reserves Portfolio or to Service
     Affiliates which were required to be pre-approved as required.




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.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         Not applicable.

ITEM 10. CONTROLS AND PROCEDURES.

         (a)(1)   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.

         (a)(2)   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 11. EXHIBITS.

         (a)(1)   Code of Ethics attached hereto.

                  Exhibit 99.CODE ETH

         (a)(2)   Attached hereto.

                  Exhibit 99.CERT         Certifications pursuant to section 302
                                          of the Sarbanes-Oxley Act of 2002

         (b)      Furnished.

                  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.

LIQUID RESERVES PORTFOLIO


By:      /s/ R. Jay Gerken
         (R. Jay Gerken)
         Chief Executive Officer of
         LIQUID RESERVES PORTFOLIO

Date:    November 9, 2004

     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
         LIQUID RESERVES PORTFOLIO

Date:    November 9, 2004


By:      /s/ Frances M. Guggino
         (Frances M. Guggino)
         Chief Financial Officer of
         LIQUID RESERVES PORTFOLIO

Date:    November 9, 2004