-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WW55Yta1GWe2GlIK+m0N9KpZsJE8xgKV07gsN49dwx0i/dMLYi1+QTSSj6Q1lJFa iQNTDa5UttaJn2+C55RSiw== 0000091155-98-000039.txt : 19980123 0000091155-98-000039.hdr.sgml : 19980123 ACCESSION NUMBER: 0000091155-98-000039 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971130 FILED AS OF DATE: 19980122 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MANAGED MUNICIPALS PORTFOLIO INC CENTRAL INDEX KEY: 0000886043 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MD FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06629 FILM NUMBER: 98510881 BUSINESS ADDRESS: STREET 1: TWO WORLD TRADE CENTER CITY: NEW YORK STATE: NY ZIP: 10048 BUSINESS PHONE: 2124648068 N-30D 1 ====================================================================== Managed Municipals Portfolio Inc. Semi-Annual Report November 30, 1997 [LOGO] ================================================================================ [LOGO] Managed Municipals Portfolio Inc. November 30, 1997 ================================================================================ Dear Shareholder: We are pleased to provide the semi-annual report for the Managed Municipals Portfolio Inc. ("Portfolio") for the period ended November 30, 1997. Over the six-month period covered by this report, the Portfolio distributed income dividends totaling $0.348 per share. The table below shows the annualized distribution rate and six-month total return based on the Portfolio's November 30, 1997 net asset value ("NAV") per share and its New York Stock Exchange ("NYSE") closing price:
Price Annualized Six-Month Per Share Distribution Rate* Total Return -------------- ------------------ ------------ $12.45 (NAV) 5.40% 7.73% $11.625 (NYSE) 5.78% 2.97%
In comparison, general closed-end municipal bond funds posted an average total return based on NAV of 6.28% for the same time period, as reported by Lipper Analytical Services, Inc. (Lipper is a major fund-tracking organization.) Municipal Bond Market Update The municipal bond market is in the midst of a powerful rally that began in early spring. Yet municipal bonds have not rallied quite as much as government bonds because this fall has seen a prolific issuance of refunding issues. All of this simply means that municipals are very attractive on an after-tax basis compared to government bonds at this time. We have therefore been fully invested with an emphasis on high-quality issues because of the little yield pick-up available from lower-rated issues. We tend to be value-oriented investors. Quality in our view is coming at a small premium over BAA and lower-rated credits. - ---------- * This distribution assumes monthly dividends at the current rate of $0.056 per share for twelve months. - -------------------------------------[LOGO]------------------------------------- 1 The powerful rally in municipals has created some very interesting investment opportunities. The long maturities in our marketplace are priced almost even with maturities that are considerably shorter. If we can maintain our coupon income yet take much less interest rate risk, we are delighted to do so. As long as the yield curve stays this "flat," we will continue to maintain a high grade profile, and also seek to lessen our interest rate volatility in today's lower interest-rate environment. We have been waiting for this market opportunity for a while. Consistent with one of our key investment strategies after large rallies, we tend to shorten up maturities a lot; after large declines, we usually become more aggressive. Fund's Investment Strategy As of November 30, 1997, approximately 89.6% of the Portfolio's holdings were rated investment grade (BBB/Baa and higher) by either Standard & Poor's Corporation or Moody's Investor Service Inc., with approximately 59% of the Portfolio invested in AAA/Aaa bonds, the highest possible rating. (Investment-grade bonds are those rated Aaa, Aa, A and Baa by Moody's Investors Service, Inc. or AAA, AA, A and BBB by Standard & Poor's Ratings Services, or have an equivalent rating by any nationally recognized statistical rating organization, or determined by the manager to be of equivalent quality.) The Portfolio's largest holdings are concentrated in hospital bonds (about 18% of the Portfolio), transportation bonds (16% of the Portfolio) and water and sewer bonds (roughly 12% of the Portfolio) because we believe they offer good relative values. Municipal Bond Market Outlook The fundamental outlook for bonds is quite good. The U.S. economy continues to produce healthy results without fanning the flames of inflation. And while inflation remains extremely low, with economic uncertainty prevalent in Southeast Asia, we expect it to stay that way for the next several quarters. Federal Reserve Board monetary policy appears to be on hold for the moment, and tax-exempt bonds are in decent supply and are attractively priced. All of those factors should add up to a municipal bond investor-friendly climate over the next quarter or two. While we remain committed to our conservative investment strategy, discipline will continue to be the main determinant of your Fund's maturity structure. - -------------------------------------[LOGO]------------------------------------- 2 In closing, thank you for investing in the Managed Municipals Portfolio Inc. We look forward to continuing to help you pursue your financial goals. Sincerely, /s/ Heath B. McLendon /s/ J. P. Deane - --------------------- --------------- Heath B. McLendon Joseph P. Deane Chairman Vice President and Investment Officer December 19, 1997 - -------------------------------------[LOGO]------------------------------------- 3 ================================================================================ Schedule of Investments November 30, 1997 (unaudited) ================================================================================
Face Amount Ratings Security Value =================================================================================== ==================================== MUNICIPAL BONDS AND NOTES -- 100.0% ==================================== California -- 10.9% $ 3,000,000 AAA Anaheim, CA Public Finance Authority, Lease Revenue, (Public Improvements Project), Series A, FSA-Insured, 5.000% due 3/1/37 $ 2,846,250 2,000,000 AAA California State Department of Water Resource, (Center Valley Project Revenue Water System), MBIA-Insured, 4.750% due 12/1/29 1,812,500 1,000,000 AAA California State Public Works Board, Lease Revenue, AMBAC-Insured, Department of Corrections, CA Prison, 5.250% due 1/1/21 991,250 2,755,000 AA California Statewide Community Development Authority COP, (St. Joseph Health System), 5.250% due 7/1/21 2,720,562 Los Angeles, CA Public Works, Financing Authority Lease Revenue, Series A: 2,000,000 AAA Multiple Capital Projects, AMBAC-Insured, 5.125% due 6/1/17 1,967,500 3,000,000 AA Regional Park & Open Space District, 5.000% due 10/1/16 2,925,000 3,300,000 A- Los Angeles, CA Regional Airport Improvement Corp., Los Angeles International Airport Lease Revenue, 6.500% due 1/1/32(a) 3,427,875 Los Angeles County, CA Metropolitan, Transportation Authority, Sales Tax Revenue, MBIA-Insured: 7,700,000 AAA 5.250% due 7/1/17 7,709,625 3,000,000 AAA 5.250% due 7/1/18 2,992,500 Metropolitan Water District, Southern California Waterworks Revenue Refunding: Series A: 3,000,000 AA 5.000% due 7/1/16 2,940,000 1,500,000 AA 5.000% due 7/1/18 1,460,625 7,500,000 AAA Series B, MBIA-Insured, 4.750% due 7/1/21 6,946,875 3,140,000 AAA Rancho Mirage, CA Redevelopment Agency, Tax Allocation Refunding, 1984 Project, Series A, MBIA-Insured, 5.000% due 4/1/24 3,014,400
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 4 ================================================================================ Schedule of Investments November 30, 1997 (unaudited)(continued) ================================================================================
Face Amount Ratings Security Value =================================================================================== California -- 10.9% (continued) $ 4,250,000 AAA Riverside County, CA COP (1997 Lease Refunding Project), MBIA-Insured, 5.125% due 11/1/17 $ 4,170,313 2,750,000 AAA Sacramento County, CA Public Facilities Project, MBIA-Insured, 5.375% due 2/1/19 2,767,187 - ----------------------------------------------------------------------------------- 48,692,462 - ----------------------------------------------------------------------------------- Colorado -- 13.4% Arapahoe County, CO Capital Improvement, Public Highway Authority: 14,770,000 AAA E-470 Public Highway Authority, Series A, MBIA-Insured, 5.000% due 9/1/21 14,234,588 3,000,000 Aaa* Pre-Refunded -- Escrowed with U.S. government securities to 8/31/05 Call @ 103, 7.000% due 8/31/26(b)(c) 3,540,000 2,000,000 BBB+ Colorado Springs, CO Airport Revenue, Series A, 7.000% due 1/1/22(a) 2,180,000 1,000,000 AA Colorado Springs, CO Utilities Revenue Refunding & Improvement, Series A, 5.125% due 11/15/23 978,750 60,000,000 Aaa* Dawson Ridge, CO Metropolitan District No. 1, Series B, (Escrowed to Maturity with Refco Strips), zero coupon due 10/1/22 15,525,000 Denver, CO City & County Airport Revenue, Series C: 10,165,000 Baa1* 6.125% due 11/15/25(a) 10,546,187 8,160,000 AAA Escrowed to Maturity with U.S. government securities, 6.125% due 11/15/25(a)(c) 8,955,600 3,155,000 Baa1* 6.750% due 11/15/22(a) 3,415,288 845,000 AAA Pre-Refunded-- Escrowed with U.S. government securities to 11/15/02 Call @ 102, 6.750% due 11/15/22(a)(c) 940,063 - ----------------------------------------------------------------------------------- 60,315,476 - ----------------------------------------------------------------------------------- Connecticut -- 0.3% 1,200,000 AA- Connecticut State Community Development Authority, Special Obligation, Series A, 5.550% due 12/15/15 1,228,500 - -----------------------------------------------------------------------------------
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 5 ================================================================================ Schedule of Investments November 30, 1997 (unaudited)(continued) ================================================================================
Face Amount Ratings Security Value =================================================================================== Florida -- 2.5% $ 5,000,000 BBB- Martin County, FL IDA, (Indiantown Cogeneration Project), Series A, 7.875% due 12/15/25(a) $ 5,806,250 Tampa, FL Revenue Bonds, (Florida Aquarium Inc. Project): 2,900,000 NR 7.550% due 5/1/12(d) 3,309,625 2,000,000 NR 7.750% due 5/1/27(b) 2,300,000 - ----------------------------------------------------------------------------------- 11,415,875 - ----------------------------------------------------------------------------------- Georgia -- 0.0% 200,000 VMIG 1* Burke County, GA Development Authority PCR, GA Power Company, 3.750% due 4/1/32(e) 200,000 - ----------------------------------------------------------------------------------- Hawaii -- 0.9% 4,010,000 AAA Hawaii State GO, Series CP, FGIC-Insured, 5.000% due 10/1/15 3,914,763 - ----------------------------------------------------------------------------------- Illinois -- 2.7% Illinois Health Facilities Authority Revenue: 1,000,000 AAA Edward Obligation Group, Series A, AMBAC-Insured, 5.250% due 2/15/27 967,500 2,000,000 AAA Memorial Health Systems, MBIA-Insured, 5.250% due 10/1/18 1,957,500 1,500,000 AAA Sherman Health Systems, AMBAC-Insured, 5.250% due 8/1/27 1,451,250 4,000,000 AAA Illinois State GO, FGIC-Insured, 5.250% due 12/1/20 3,970,000 4,000,000 AAA Metropolitan Pier & Exposition Authority, IL (McCormick Plan Exposition Project), Series A, AMBAC-Insured, 5.250% due 6/15/27 3,955,000 - ----------------------------------------------------------------------------------- 12,301,250 - ----------------------------------------------------------------------------------- Indiana -- 2.3% 5,000,000 AAA Indiana Health Facilities Financing Authority, Hospital Revenue, (Sisters of St. Francis Health), MBIA-Insured, 5.375% due 11/1/27 4,918,750 5,000,000 Aa3* Indiana Port Commission Revenue Refunding Project, (Cargill Inc. Project), 6.875% due 5/1/12(b) 5,506,250 - ----------------------------------------------------------------------------------- 10,425,000 - -----------------------------------------------------------------------------------
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 6 ================================================================================ Schedule of Investments November 30, 1997 (unaudited)(continued) ================================================================================
Face Amount Ratings Security Value =================================================================================== Louisiana -- 1.3% $ 5,500,000 Aa3* Saint Martin Parish, LA Industrial Revenue, (Cargill Inc. Project), 6.625% due 10/1/12 $ 6,008,750 - ----------------------------------------------------------------------------------- Maryland -- 0.7% 10,000,000 NR Maryland State Energy Financing Administration, Solid Waste Disposal Revenue, Limited Obligation, (Hagerstown Project), 9.000% due 10/15/16(b)(f) 3,100,000 - ----------------------------------------------------------------------------------- Massachusetts -- 6.4% 4,260,000 AAA Massachusetts Bay Transportation Authority, Series B, FSA-Insured, 5.250% due 3/1/26 4,190,775 10,000,000 NR Massachusetts State Industrial Finance Authority, Solid Waste Disposal Revenue, Massachusetts Recycling Association, Series A, 9.000% due 8/1/16(b)(f) 3,750,000 3,000,000 AA- Massachusetts State Port Authority Revenue, Series A, 5.000% due 7/1/27 2,865,000 Massachusetts State Turnpike Authority, Highway System Revenue, Sub-Series B, MBIA-Insured: 2,000,000 AAA 5.250% due 1/1/29 1,977,500 2,500,000 AAA 5.125% due 1/1/37 2,400,000 Massachusetts State Water Resource Authority, MBIA-Insured: 4,000,000 AAA Series B, 5.000% due 12/1/25 3,815,000 2,000,000 AAA Series C, 5.250% due 12/1/20 1,997,500 8,000,000 AAA Series D, 5.000% due 8/1/24 7,740,000 - ----------------------------------------------------------------------------------- 28,735,775 - ----------------------------------------------------------------------------------- Michigan -- 5.9% 1,675,000 AA+ Michigan Municipal Bond Authority Revenue, State Revolving Fund, 5.125% due 10/1/20 1,656,156 2,000,000 AA- Michigan State Building Authority Revenue, Facilities Program, Series II, 4.750% due 10/15/13 1,905,000 5,000,000 AAA Michigan State Hospital Finance Authority Revenue Refunding, Detriot Medical Group, Series A, MBIA-Insured, 5.250% due 8/15/27 4,875,000 16,375,000 NR Midland County, MI Education Development Corp., PCR, Limited Obligation, Series B, 9.500% due 7/23/09(a)(b) 18,217,188 - ----------------------------------------------------------------------------------- 26,653,344 - -----------------------------------------------------------------------------------
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 7 ================================================================================ Schedule of Investments November 30, 1997 (unaudited)(continued) ================================================================================
Face Amount Ratings Security Value =================================================================================== Minnesota -- 1.1% $ 2,500,000 Aa3* Duluth, MN Seaway Port Authority, IDA, Dock & Wharf Revenue, (Cargill Inc. Project), 6.800% due 5/1/12 $ 2,734,375 Minnesota State Higher Education Facilities Authority Revenue, University St. Thomas Education: 525,000 A2* Series 3, 5.375% due 4/1/18 520,406 615,000 A2* Series 4, 5.400% due 4/1/23 607,313 1,250,000 AA+ Minnesota State Housing Financing Agency, Single-Family Mortgage, Series I, 5.500% due 1/1/17 1,267,187 - ----------------------------------------------------------------------------------- 5,129,281 - ----------------------------------------------------------------------------------- Missouri -- 0.2% 1,000,000 AAA Fenton, MO COP, Capital Improvement Projects, MBIA-Insured, 5.125% due 9/1/17 998,750 - ----------------------------------------------------------------------------------- Mississippi -- 0.3% 1,100,000 A-1+ Harrison County, MS PCR, (du Pont De Nemours Project), 3.900% due 9/1/10(e) 1,100,000 - ----------------------------------------------------------------------------------- Montana -- 1.8% 8,000,000 NR Montana State Board Investment Resource Recovery, (Yellowstone Energy Project), 7.000% due 12/31/19 7,870,000 - ----------------------------------------------------------------------------------- Nebraska -- 0.9% 4,000,000 AAA Nebraska Public Power District Revenue, Series A, MBIA-Insured, 5.250% due 1/1/28 3,960,000 - ----------------------------------------------------------------------------------- New Jersey -- 1.3% 5,200,000 A+ Hudson County, NJ Improvement Authority, 6.625% due 8/1/25 5,635,500 - ----------------------------------------------------------------------------------- New York -- 7.1% New York City Municipal Water Financing Authority, Water & Sewer System Revenue, Series A: 3,000,000 A- 5.125% due 6/15/17 2,936,250 1,500,000 A- 5.125% due 6/15/21 1,451,250 1,090,000 AAA New York State Dormitory Authority Lease Revenue, Health Facilities Improvement Program, Series A, FSA-Insured, 5.500% due 5/15/16 1,104,987
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 8 ================================================================================ Schedule of Investments November 30, 1997 (unaudited)(continued) ================================================================================
Face Amount Ratings Security Value =================================================================================== New York -- 7.1% (continued) New York State Dormitory Authority Revenue: AMBAC-Insured: $ 2,620,000 AAA Barnard College, 5.250% due 7/1/26 $ 2,593,800 6,000,000 AAA Montefiore Medical Center, 5.250% due 2/1/15 6,007,500 4,000,000 AAA Mental Health Services Facilities Improvement, Series D, FSA-Insured, 5.125% due 8/15/17 3,910,000 5,000,000 A- State University Educational Facilities, 5.000% due 5/15/14 4,856,250 New York State Medcare Mental Health Services: 3,000,000 AAA FGIC-Insured, 5.250% due 2/15/19 2,958,750 1,300,000 AAA FSA-Insured, 5.250% due 2/15/21 1,272,375 5,000,000 Aa* Triborough Bridge & Tunnel Authority of NY, General Purpose, Series A, 5.000% due 1/1/24 4,762,500 - ----------------------------------------------------------------------------------- 31,853,662 - ----------------------------------------------------------------------------------- Ohio -- 3.7% 2,000,000 AAA Akron, OH Economic Development, MBIA-Insured, 5.000% due 12/1/18 1,932,500 1,000,000 AAA Cleveland-Cuyahoga County, OH Port Authority Revenue, Rock & Roll Hall of Fame, AMBAC-Insured, 5.400% due 12/1/15 1,008,750 6,360,000 AAA Cuyahoga County, OH Hospital Revenue Refunding, (Metrohealth System), Series A, MBIA-Insured, 5.125% due 2/15/14 6,304,350 2,000,000 AAA Ohio State Higher Educational Facilities Community Revenue, (Union Dayton Project), AMBAC-Insured, 5.350% due 12/1/17 2,027,500 5,320,000 AAA Portage County, OH GO, MBIA-Insured, 5.250% due 12/1/17 5,339,950 - ----------------------------------------------------------------------------------- 16,613,050 - ----------------------------------------------------------------------------------- Pennsylvania -- 2.3% 1,000,000 AAA Allegheny County, PA Airport Revenue, Pittsburgh International Airport, Series B, MBIA-Insured, 5.000% due 1/1/19 967,500 6,000,000 AAA Altoona, PA City Authority, Water Revenue, FGIC-Insured, 5.000% due 11/1/19 5,835,000
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 9 ================================================================================ Schedule of Investments November 30, 1997 (unaudited)(continued) ================================================================================
Face Amount Ratings Security Value =================================================================================== Pennsylvania -- 2.3% (continued) $ 3,500,000 Aaa* Montgomery County, PA Higher Education & Health Authority Revenue, Holy Redeemer Health, Series A, AMBAC-Insured, 5.250% due 12/1/17 $ 3,460,625 - ----------------------------------------------------------------------------------- 10,263,125 - ----------------------------------------------------------------------------------- Puerto Rico -- 0.4% 2,000,000 AAA Puerto Rico Commonweatlh Infrastructure Financing Authority, AMBAC-Insured, 5.000% due 7/1/16 1,967,500 - ----------------------------------------------------------------------------------- South Carolina -- 1.4% 4,000,000 AAA Lexington County, SC Health Services District Inc., Hospital Revenue Refunding & Improvement, FSA-Insured, 5.250% due 11/1/17 3,965,000 2,000,000 BBB+ Myrtle Beach, SC COP, Myrtle Beach Convention Center, 6.875% due 7/1/07 2,147,500 - ----------------------------------------------------------------------------------- 6,112,500 - ----------------------------------------------------------------------------------- Tennessee -- 0.3% 1,150,000 NR Hardeman County, TN Correctional Facilities Corp., 7.750% due 8/1/17 1,273,625 - ----------------------------------------------------------------------------------- Texas -- 13.0% 3,990,000 Aaa* Azle, TX ISD, PSFG, Series C, 5.000% due 2/15/22 3,830,400 4,000,000 AAA Bexar County, TX Health Facilities Development Corp. Revenue, Baptist Health Systems, Series A, MBIA-Insured, 5.250% due 11/15/27 3,910,000 4,190,000 AAA Brazos County, TX Health Facilities, Obligation Group, Series B, MBIA-Insured, 5.375% due 1/1/22 4,184,763 2,000,000 AAA Brownsville, TX Utility Systems Revenue, AMBAC-Insured, 5.250% due 9/1/20 1,982,500 Burleson, TX ISD, PSFG: 1,160,000 Aaa* 6.750% due 8/1/24 1,291,950 2,840,000 Aaa* Pre-Refunded -- Escrowed with U.S. government securities to 8/1/06 Call @ 100, 6.750% due 8/1/24(c) 3,273,100
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 10 ================================================================================ Schedule of Investments November 30, 1997 (unaudited)(continued) ================================================================================
Face Amount Ratings Security Value =================================================================================== Texas -- 13.0% (continued) $ 1,000,000 AA Harris County, TX Health Facilities Development Corp. Revenue, School Health Care Systems, Series B, 5.750% due 7/1/27 $ 1,031,250 Harris County, TX Toll Road Refunding: 8,000,000 AAA Sr. Lien, FGIC-Insured, 5.375% due 8/15/20 8,010,000 5,185,000 AA Sub Lien, 5.125% due 8/15/16 5,120,187 2,000,000 AAA Leander, TX ISD, PSFG, 5.625% due 8/15/18 2,032,500 2,000,000 AAA Nueces River Authority, TX Water Supply Facilities, FSA-Insured, 5.500% due 3/1/27 2,012,500 2,000,000 AAA Plano, TX Facilities Health Development Corp. Revenue, Texas Health Resources System, Series C, MBIA-Insured, 5.250% due 2/15/26 1,955,000 3,000,000 AAA San Antonio, TX ISD, PSFG, 5.125% due 8/15/22 2,932,500 Texas Water Development Board Revenue, State Revolving Fund, Sr. Lien, Series B: 3,000,000 AAA 5.000% due 7/15/14 2,985,000 1,000,000 AAA 5.000% due 7/15/15 990,000 5,000,000 AAA 5.000% due 7/15/16 4,918,750 8,000,000 AAA 5.000% due 7/15/19 7,730,000 - ----------------------------------------------------------------------------------- 58,190,400 - ----------------------------------------------------------------------------------- Utah -- 1.7% 8,000,000 A+ Intermountain Power Agency, Utah Power Supply Revenue Refunding, Series D, 5.000% due 7/1/21 7,640,000 - ----------------------------------------------------------------------------------- Virginia -- 4.5% 4,700,000 A* Harrisonburg, VA Redevelopment & Housing Authority, (Jail & Courthouse Project), Public Facilities Lease Revenue, 6.500% due 9/1/14 4,917,375 2,000,000 AAA Upper Occoquan, VA Sewer Authority, Regional Sewer Revenue, Series A, MBIA-Insured, 5.000% due 7/1/25 1,920,000 Virginia College Building Authority, Virginia Educational Facilities Revenue, 21st Century College Program: 3,590,000 AA 5.250% due 8/1/13 3,679,750 3,805,000 AA 5.250% due 8/1/14 3,890,612
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 11 ================================================================================ Schedule of Investments November 30, 1997 (unaudited)(continued) ================================================================================
Face Amount Ratings Security Value =================================================================================== Virginia -- 4.5% (continued) Virginia State HDA, Multi-Family Housing: $ 1,655,000 AA+ Series D, 6.250% due 1/1/15 $ 1,768,781 1,235,000 AAA Series H, AMBAC-Insured, 6.300% due 11/1/15 1,322,994 600,000 AA+ Series K, 5.800% due 11/1/10 640,500 2,000,000 AA Virginia State Transportation Board, Transportation Contract Revenue, Series A, 5.125% due 5/15/21 1,970,000 - ----------------------------------------------------------------------------------- 20,110,012 - ----------------------------------------------------------------------------------- Washington -- 7.5% Chelan County, WA GO Public Utilities, District No. 1: Columbus River Rock, MBIA-Insured, Series A: 20,685,000 AAA Zero coupon due 6/1/21 5,998,650 22,685,000 AAA Zero coupon due 6/1/22 6,266,731 4,750,000 A+ Series B, Remarked 7/1/92, Mandatory put 7/1/19, 6.750% due 7/1/62(a)(b) 5,017,188 3,000,000 AA+ Washington State GO, Series E, 5.000% due 7/1/22 2,891,250 10,550,000 AA- Washington State Health Care Facilities, Authority Revenue, Sisters of Providence Hospital, 7.875% due 10/1/10(b) 11,420,375 2,000,000 AAA Washington State Public Power Supply System Project Number 2, Series A, FSA-Insured, 5.125% due 7/1/11 2,002,500 - ----------------------------------------------------------------------------------- 33,596,694 - ----------------------------------------------------------------------------------- West Virginia -- 1.2% Marion County, WV Community Solid Waste Disposal Facilities Revenue: 1,000,000 NR American Fiber Resource Project, Series B, 9.250% due 12/1/11(a)(b)(f) 500,000 10,000,000 NR American Paper Recycling Project, 7.750% due 12/1/11(a)(b)(f) 5,000,000 - ----------------------------------------------------------------------------------- 5,500,000 - -----------------------------------------------------------------------------------
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 12 ================================================================================ Schedule of Investments November 30, 1997 (unaudited)(continued) ================================================================================
Face Amount Ratings Security Value =================================================================================== Wisconsin -- 4.0% $ 4,070,000 A2* Wisconsin State GO, Series B, 6.600% due 1/1/22(a) $ 4,329,462 Wisconsin State Health & Educational Facilities Authority Revenue, MBIA-Insured: Aurora Health Care Inc.: 3,000,000 AAA 5.250% due 8/15/17 2,970,000 10,000,000 AAA 5.250% due 8/15/27 9,725,000 1,000,000 AAA The Medical College of Wisconsin Inc. Project, 5.400% due 12/1/16 1,001,250 - ----------------------------------------------------------------------------------- 18,025,712 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 100% (COST -- $442,586,414**) $448,831,006 ===================================================================================
(a) Income from this issue is considered a preference item for purposes of calculating the alternative minimum tax. (b) Security segregated by Custodian for open purchase commitments. (c) Pre-Refunded bonds escrowed by U.S. government securities and bonds escrowed to maturity by U.S. government securities are considered by manager to be triple-A rated even if issuer has not applied for new ratings. (d) Security partially segregated by Custodian for futures contracts commitments. (e) Variable rate municipal bonds and notes are payable upon not more than one business day's notice. (f) Security in default. ** Aggregate cost for Federal income tax purposes is substantially the same. See pages 14 and 15 for definition of ratings and certain security descriptions. ================================================================================ Summary of Investments by Combined Ratings November 30, 1997 (unaudited) ================================================================================
================================================================================ Percent of Moody's and/or Standard & Poor's Total Investments ================================================================================ Aaa AAA 59.1% Aa AA 16.9 A A 8.2 Baa BBB 5.4 VMIG 1 A-1 0.3 NR NR 10.1 ----- 100.0% =====
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 13 ================================================================================ Bond Ratings ================================================================================ All ratings are by Standard & Poor's Ratings Service ("Standard & Poor's"), except those identified by an asterisk (*) are rated by Moody's Investors Service Inc. ("Moody's"). The definitions of the applicable rating symbols are set forth below: Standard & Poor's -- Ratings from "AA" to "BB" 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 differs from the highest rated issue only in a small degree. A -- Bonds rated "A" have a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB -- Bonds rated "BBB" are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for bonds in this category than in higher rated categories. Moody's -- Numerical modifiers 1, 2 and 3 may be applied to each generic rating from "Aa" to "Baa," where 1 is the highest and 3 the lowest ranking within its generic category. Aaa -- Bonds that are rated "Aaa" are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa -- Bonds that are 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 in "Aaa" securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in "Aaa" securities. A -- Bonds that are rated "A" possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment some time in the future. Baa -- Bonds that are rated "Baa" are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. NR -- Indicates that the bond is not rated by Standard & Poor's or Moody's. - -------------------------------------[LOGO]------------------------------------- 14 ================================================================================ Short-Term Securities Ratings ================================================================================ 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. ================================================================================ Security Descriptions ================================================================================ ABAG -- Association of Bay Area Governors AIG -- American International Guaranty AMBAC -- American Municipal Bond Assurance Corporation BAN -- Bond Anticipation Notes BIG -- Bond Investors Guaranty CDA -- Community Development Administration CGIC -- Capital Guaranty Insurance Company CHFCLI -- California Health Facility Construction Loan Insurance 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 -- Federal Savings Association GIC -- Guaranteed Investment Contract GNMA -- Government National Mortgage Association GO -- General Obligation HDC -- Housing Development Corporation HDA -- Housing Development Authority HFA -- Housing Finance Authority IDA -- Industrial Development Authority 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 MVRICS -- Municipal Variable Rate Inverse Coupon Security PCR -- Pollution Control Revenue PFA -- Public Finance Authority PSFG -- Permanent School Fund Guaranty RAN -- Revenue Anticipation Notes RIBS -- Residual Interest Bonds RITES -- Residual Interest Tax-Exempt Securities TAN -- Tax Anticipation Notes TECP -- Tax Exempt Commercial Paper TOB -- Tender Option Bonds TRAN -- Tax and Revenue Anticipation Notes SYCC -- Structured Yield Curve Certificate VA -- Veterans Administration VRDD -- Variable Rate Daily Demand VRWE -- Variable Rate Wednesday Demand - -------------------------------------[LOGO]------------------------------------- 15 ================================================================================ Statement of Assets and Liabilities (unaudited) ================================================================================
November 30, 1997 ================================================================================ ASSETS: Investments, at value (Cost -- $442,586,414) $ 448,831,006 Cash 21,703 Receivable for securities sold 13,328,750 Interest receivable 5,931,737 - ------------------------------------------------------------------------------- Total Assets 468,113,196 - ------------------------------------------------------------------------------- LIABILITIES: Payable for securities purchased 36,627,120 Dividends payable 901,583 Investment advisory fees payable 237,406 Administration fees payable 68,767 Payable to broker 6,250 Accrued expenses 27,927 - ------------------------------------------------------------------------------- Total Liabilities 37,869,053 - ------------------------------------------------------------------------------- Total Net Assets $ 430,244,143 =============================================================================== NET ASSETS: Par value of capital shares $ 34,564 Capital paid in excess of par value 413,048,256 Overdistributed net investment income (1,199,369) Accumulated net realized gain from security transactions 12,172,350 Net unrealized appreciation of investments and futures contracts 6,188,342 - ------------------------------------------------------------------------------- TOTAL NET ASSETS (Equivalent to $12.45 a share on 34,564,281 shares of $0.001 par value outstanding: 500,000,000 shares authorized) $ 430,244,143 ===============================================================================
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 16 ================================================================================ Statement of Operations (unaudited) ================================================================================
Six Months Ended 11/30/97 =============================================================================== INVESTMENT INCOME: Interest $ 11,381,076 - ------------------------------------------------------------------------------- EXPENSES: Investment advisory fees (Note 3) 1,472,403 Administration fees (Note 3) 420,687 Shareholder communications 102,864 Audit and legal 25,203 Directors' fees 24,232 Registration fees 14,469 Custody 9,495 Shareholder and system servicing fees 9,454 Pricing service fees 5,935 Other 3,694 - ------------------------------------------------------------------------------- Total Expenses 2,088,436 - ------------------------------------------------------------------------------- Net Investment Income 9,292,640 - ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FUTURES CONTRACTS (NOTES 4 AND 5): Realized Gain From Security Transactions (excluding short-term securities): Proceeds from sales 262,744,440 Cost of securities sold 254,261,432 - ------------------------------------------------------------------------------- Net Realized Gain 8,483,008 - ------------------------------------------------------------------------------- Change in Net Unrealized Appreciation (Depreciation) of Investments and Futures Contracts: Beginning of period (6,878,902) End of period 6,188,342 - ------------------------------------------------------------------------------- Increase in Net Unrealized Appreciation 13,067,244 - ------------------------------------------------------------------------------- Net Gain on Investments and Futures Contracts 21,550,252 - ------------------------------------------------------------------------------- Increase Net Assets From Operations $ 30,842,892 ===============================================================================
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 17 ================================================================================ Statements of Changes in Net Assets ================================================================================
Six Months Ended 11/30/97 Year Ended (unaudited) 5/31/97 =============================================================================== OPERATIONS: Net investment income $ 9,292,640 $ 23,131,200 Net realized gain 8,483,008 8,491,422 Increase (decrease) in net unrealized appreciation 13,067,244 (5,938,398) - ------------------------------------------------------------------------------- Increase in Net Assets From Operations 30,842,892 25,684,224 - ------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 2): Net investment income (12,027,658) (22,772,196) Net realized gains -- (10,177,035) - ------------------------------------------------------------------------------- Decrease in Net Assets From Distributions to Shareholders (12,027,658) (32,949,231) - ------------------------------------------------------------------------------- FUND SHARE TRANSACTIONS (NOTE 6): Net asset value of shares issued for reinvestment of dividends 143,116 626,322 - ------------------------------------------------------------------------------- Increase in Net Assets From Fund Share Transactions 143,116 626,322 - ------------------------------------------------------------------------------- Increase (Decrease) in Net Assets 18,958,350 (6,638,685) NET ASSETS: Beginning of period 411,285,793 417,924,478 - ------------------------------------------------------------------------------- End of period* $ 430,244,143 $ 411,285,793 =============================================================================== * Includes undistributed (overdistributed) net investment income of: $ (1,199,369) $ 1,535,649 ===============================================================================
See Notes to Financial Statements. - -------------------------------------[LOGO]------------------------------------- 18 ================================================================================ Notes to Financial Statements (unaudited) ================================================================================ 1. Significant Accounting Policies Managed Municipals Portfolio Inc. ("Fund"), a Maryland corporation, is registered under the Investment Company Act of 1940, as amended, as a non-diversified, closed-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 bid and ask prices provided by an independent pricing service that are based on transactions in municipal obligations, quotations from municipal bond dealers, market transactions in comparable securities and various relationships between securities; (c) securities maturing within 60 days or less are valued at cost plus accreted discount, or minus amortized premium, which approximates value; (d) gains or losses on the sale of securities are calculated by using the specific identification method; (e) interest income, adjusted for amortization of premium and accretion of original issue discount, is recorded on the accrual basis; market discount is recognized upon the disposition of the security; (f) dividends and distributions to shareholders are recorded on the ex-dividend date; (g) 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; (h) the character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. At May 31, 1997, reclassifications were made to the Portfolio's capital accounts to reflect permanent book/tax differences and income and gains available for distributions under income tax regulations; and (i) 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 regular Federal income tax and from designated state income taxes, to retain such tax-exempt status when distributed to the shareholders of the Fund. Capital gain distributions, if any, are taxable to shareholders, and are declared and paid at least annually. - -------------------------------------[LOGO]------------------------------------- 19 ================================================================================ Notes to Financial Statements (unaudited) (continued) ================================================================================ 3. Investment Advisory Agreement, Administration Agreement and Other Transactions Mutual Management Corp. ("MMC"), formerly known as Smith Barney Mutual Funds Management Inc., a subsidiary of Salomon Smith Barney Holdings Inc. ("SSBH"), acts as investment adviser to the Fund. The Fund pays MMC a fee calculated at an annual rate of 0.70% of the average daily net assets of the Fund. This fee is calculated daily and paid monthly. MMC also acts as the Fund's administrator for which the Fund pays a fee calculated at an annual rate of 0.20% of the average daily net assets; this fee is calculated daily and paid monthly. All officers and one Director of the Fund are employees of Smith Barney Inc. 4. Investments For the six months ended November 30, 1997, the aggregate cost of purchases and proceeds from sales of investments (including maturities, but excluding short-term securities) were as follows: ================================================================================ Purchases $278,687,883 - -------------------------------------------------------------------------------- Sales 262,744,440 ================================================================================
At November 30, 1997, the aggregate gross unrealized appreciation and depreciation of investments for Federal income tax purposes were substantially as follows: ================================================================================ Gross unrealized appreciation $ 24,817,836 Gross unrealized depreciation (18,573,244) - -------------------------------------------------------------------------------- Net unrealized appreciation $ 6,244,592 ================================================================================
5. Futures Contracts Initial margin deposits made upon entering into futures contracts are recognized as assets. Securities equal to the initial margin amount are segregated by the custodian in the name of the broker. Additional securities are also segregated up to the current market value of the futures contracts. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized gains or losses by "marking-to-market" on a daily basis to reflect the market value of the contract at the end of each day's trading. Variation margin payments are made or received and recognized as assets due from or liabilities due to broker, depending upon whether unrealized gains or losses are incurred. When the contract is closed, - -------------------------------------[LOGO]------------------------------------- 20 ================================================================================ Notes to Financial Statements (unaudited) (continued) ================================================================================ 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 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 (futures contracts). At November 30, 1997, the Fund had the following open futures contracts:
Futures Expiration # of Basis Market Unrealized Contracts Sold Month/Year Contracts Value Value Gain (Loss) ==================================================================================== U.S. Treasury Short Bond Index 12/97 100 $11,815,625 $11,918,750 $(103,125) Municipal Bond Index 12/97 100 12,181,250 12,228,125 46,875 - ------------------------------------------------------------------------------------ Total $ (56,250) ====================================================================================
6. Capital Shares During the six months ended November 30, 1997, capital stock transactions were as follows:
Shares Amount ================================================================================== Shares issued on reinvestment 11,867 $143,116 ==================================================================================
- -------------------------------------[LOGO]------------------------------------- 21 ================================================================================ Financial Highlights ================================================================================ For a share of capital stock outstanding throughout each period:
1997(1) 1997 1996 1995 1994 1993(2) ======================================================================================================================== Net Asset Value, Beginning of Period $11.90 $12.11 $12.55 $12.26 $13.00 $12.00 - ------------------------------------------------------------------------------------------------------------------------ Income From Operations: Net investment income 0.27 0.67 0.67 0.72 0.67 0.63 Net realized and unrealized gain (loss) 0.63 0.08 (0.35) 0.49 (0.23) 0.97 - ------------------------------------------------------------------------------------------------------------------------ Total Income From Operations 0.90 0.75 0.32 1.21 0.44 1.60 - ------------------------------------------------------------------------------------------------------------------------ Offering Costs Charged to Paid-In Capital -- -- -- -- -- (0.02) - ------------------------------------------------------------------------------------------------------------------------ Less Distributions From: Net investment income (0.35) (0.66) (0.75) (0.67) (0.67) (0.55) Net realized gains -- (0.30) (0.01) (0.25) (0.51) (0.03) - ------------------------------------------------------------------------------------------------------------------------ Total Distributions (0.35) (0.96) (0.76) (0.92) (1.18) (0.58) - ------------------------------------------------------------------------------------------------------------------------ Net Asset Value, End of Period $12.45 $11.90 $12.11 $12.55 $12.26 $13.00 - ------------------------------------------------------------------------------------------------------------------------ Total Return, Based on Market Value 2.97%++ 7.89% 8.26% 8.40% 2.98% 7.02%++ - ------------------------------------------------------------------------------------------------------------------------ Total Return, Based on Net Asset Value* 7.73%++ 6.59% 2.79% 10.96% 3.45% 13.58%++ - ------------------------------------------------------------------------------------------------------------------------ Net Assets, End of Period (millons) $430 $411 $418 $433 $423 $444 - ------------------------------------------------------------------------------------------------------------------------ Ratios to Average Net Assets: Expenses 0.98%+ 1.00% 1.00% 1.02% 1.00% 0.98%+ Net investment income 4.37+ 5.56 5.35 5.97 5.15 5.48+ - ------------------------------------------------------------------------------------------------------------------------ Portfolio Turnover Rate 60% 113% 45% 93% 72% 169% - ------------------------------------------------------------------------------------------------------------------------ Market Value, End of Period $11.625 $11.625 $11.690 $11.500 $11.500 $12.250 ========================================================================================================================
(1) For the six months ended November 30, 1997 (unaudited). (2) For the period from June 26, 1992 (commencement of operations) to May 31, 1993. * Total return is based on the Fund's net asset value at the beginning and end of the period rather than the market value. Dividends are reinvested in accordance with the Fund's dividend reinvestment plan. ++ Total return is not annualized, as it may not be representative of the total return for the year. + Annualized. - -------------------------------------[LOGO]------------------------------------- 22 ================================================================================ Quarterly Results of Operations (unaudited) ================================================================================
Net Realized and Net Increase Unrealized (Decrease) in Investment Net Investment Gain (Loss) on Net Assets From Income Income Investments Operations ------------------------------------------------------------------------------------------ Per Per Per Per Quarter Ended Total Share Total Share Total Share Total Share =========================================================================================================== August 31, 1995 $6,836,154 $0.20 $5,726,578 $0.17 $ (4,006,671) $(0.12) $ 1,719,907 $ 0.05 November 30, 1995 6,832,879 0.20 5,725,758 0.17 9,842,182 0.29 15,567,940 0.45 February 29, 1996 6,815,655 0.19 5,690,615 0.16 (268,190) (0.01) 5,422,425 0.16 May 31, 1996 6,848,128 0.20 5,871,300 0.17 (17,496,145) (0.51) (11,624,845) (0.34) August 31, 1996 7,112,514 0.21 6,061,372 0.18 (2,945,507) (0.09) 3,115,865 0.09 November 30, 1996 6,873,415 0.20 5,826,055 0.17 17,188,697 0.50 23,014,752 0.67 February 28, 1997 6,706,752 0.19 5,680,888 0.16 (9,381,274) (0.27) (3,700,386) (0.11) May 31, 1997 6,582,277 0.19 5,562,885 0.16 (2,308,892) (0.06) 3,253,993 0.10 August 31, 1997 5,809,421 0.17 4,751,757 0.14 11,642,588 0.34 16,394,345 0.48 November 30, 1997 5,571,655 0.16 4,540,883 0.13 9,907,664 0.29 14,448,547 0.42 ===========================================================================================================
- -------------------------------------[LOGO]------------------------------------- 23 ================================================================================ Financial Data (unaudited) ================================================================================ For a share of capital stock outstanding throughout each period:
NYSE Net Dividend Record Payable Closing Asset Dividend Reinvestment Date Date Price+ Value+ Paid Price =================================================================================== 6/23/95 6/30/95 $11.625 $12.49 $0.064 $11.86 7/26/95 7/31/95 11.750 12.33 0.064 11.84 8/22/95 8/25/95 11.750 12.20 0.064 11.90 9/26/95 9/29/95 11.750 12.38 0.064 11.87 10/24/95 10/27/95 11.750 12.46 0.064 11.92 11/20/95 11/24/95 11.875 12.59 0.064 11.99 12/26/95 12/29/95 12.125 12.69 0.064 12.30 1/23/96 1/26/96 12.500 12.66 0.064 12.51 2/20/96 2/23/96 12.250 12.68 0.064 12.14 3/26/96 3/29/96 11.750 12.43 0.060 11.61 4/23/96 4/26/96 11.250 12.24 0.060 11.53 5/28/96 5/31/96 11.813 12.25 0.060 11.65 6/25/96 6/28/96 11.500 12.05 0.060 11.49 7/23/96 7/26/96 11.875 12.05 0.060 11.87 8/27/96 8/30/96 11.688 12.12 0.060 11.72 9/24/96 9/27/96 11.625 12.13 0.060 11.64 10/22/96 10/25/96 11.625 12.23 0.060 11.57 11/25/96 11/29/96 11.500 12.44 0.060 11.57 12/23/96* 12/27/96 11.375 12.12 0.295 11.73 1/28/97 1/31/97 11.625 11.88 0.060 11.75 2/25/97 2/28/97 11.750 12.07 0.060 11.78 3/24/97 3/27/97 11.500 11.73 0.060 11.53 4/22/97 4/25/97 11.563 11.60 0.060 11.57 5/27/97 5/30/97 11.375 11.82 0.060 11.68 6/24/97 6/27/97 11.750 12.06 0.060 11.98 7/22/97 7/25/97 12.000 12.43 0.060 12.08 8/26/97 8/29/97 11.750 12.17 0.060 11.83 9/23/97 9/26/97 11.750 12.30 0.056 11.91 10/28/97 10/31/97 11.375 12.33 0.056 11.60 11/24/97 11/28/97 11.563 12.41 0.056 11.64 ===================================================================================
+ As of record date. * Capital gain distribution. - -------------------------------------[LOGO]------------------------------------- 24 ================================================================================ Dividend Reinvestment Plan (unaudited) ================================================================================ Under the Portfolio's Dividend Reinvestment Plan ("Plan"), a shareholder whose shares of Common Stock are registered in his own name will have all distributions from the Portfolio reinvested automatically by First Data as agent under the Plan, unless the shareholder elects to receive cash. Distributions with respect to shares registered in the name of a broker-dealer or other nominee (that is, in "Street Name") will be reinvested by the broker or nominee in additional shares under the Plan, unless the service is not provided by the broker or nominee or the shareholder elects to receive distributions in cash. Investors who own Common Stock registered in Street Name should consult their broker-dealers for details regarding reinvestment. All distributions to shareholders who do not participate in the Plan will be paid by check mailed directly to the record holder by or under the direction of First Data as dividend paying agent. The number of shares of Common Stock distributed to participants in the Plan in lieu of a cash dividend is determined in the following manner. When the market price of the Common Stock is equal to or exceeds the net asset value per share of the Common Stock on the date of valuation, Plan participants will be issued shares of Common Stock at a price equal to the greater of net asset of value most recently determined as described below under "Net Asset Value" or 95% of the market price of the Common Stock. If the market price of the Common Stock is less than the net asset value of the Common Stock at the time of valuation, or if the Portfolio declares a dividend or capital gains distribution payable only in cash, First Data will buy Common Stock in the open market, on the New York Stock Exchange or elsewhere, for the participant accounts. If following the commencement of the purchases and before First Data has completed its purchases, the market price exceeds the net asset value of the Common Stock, First Data will attempt to terminate purchases in the open market and cause the Portfolio to issue the remaining portion of the dividend or distribution in shares at a price equal to the greater of (a) net asset value or (b) 95% of the then current market price. In this case, the number of shares received by a Plan participant will be based on the weighted average of prices paid for shares purchased in the open market and the price at which the Portfolio issues the remaining shares. To the extent First Data is unable to stop open market purchases and cause the Portfolio to issue the remaining shares, the average per share purchase price paid by the Purchasing Agent may exceed the net asset value of the Common Stock, resulting in the acquisition of fewer shares than if the dividend or capital gains distribution had been paid in Common Stock issued by the Portfolio at net asset value. First Data will begin to purchase Common Stock on the open market as soon as practicable after the payment date of the dividend or capital gains distribution, but in no event shall such purchases continue later than 30 days after that date, except when necessary to comply with applicable provisions of the federal securities laws. - -------------------------------------[LOGO]------------------------------------- 25 ================================================================================ Dividend Reinvestment Plan (unaudited) (continued) ================================================================================ First Data maintains all shareholder accounts in the Plan and furnishes written confirmations of all transactions in each account, including information needed by a shareholder for personal and tax records. The automatic reinvestment of dividends and capital gains distributions will not relieve Plan participants of any income tax that may be payable on the dividends or capital gains distributions. Common Stock in the account of each Plan participant will be held by First Data in uncertificated form in the name of each Plan participant. Plan participants are subject to no charge for reinvesting dividends and capital gains distributions under the Plan. First Data's fees for handling the reinvestment of dividends and capital gains distributions will be paid by the Portfolio. No brokerage charges apply with respect to shares of Common Stock issued directly by the Portfolio under the Plan. Each Plan participant will, however, bear a proportionate share of brokerage commissions incurred with respect to any open market purchases made under the Plan. Experience under the Plan may indicate that changes to it are desirable. The Portfolio reserves the right to amend or terminate the Plan as applied to any dividend or capital gains distribution paid subsequent to written notice of the change sent to participants at least 30 days before the record date for the dividend or capital gains distribution. The Plan also may be amended or terminated by First Data, with the Portfolio's prior written consent, on at least 30 days' written notice to Plan participants. All correspondence concerning the Plan should be directed by mail to First Data Investor Services Group, P.O. Box 1376, Boston, Massachusetts 02104 or by telephone at 1-800-331-1710. ---------- Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Fund may purchase shares of its common stock in the open market. - -------------------------------------[LOGO]------------------------------------- 26 Managed Municipals Portfolio Inc. Directors Investment Adviser and Allan J. Bloostein Administrator Martin Brody Mutual Management Corp. Dwight B. Crane 388 Greenwich Street Robert A. Frankel New York, New York 10013 William R. Hutchinson Heath B. McLendon, Chairman Transfer Agent First Data Investor Services Charles F. Barber, Emeritus Group, Inc. P.O. Box 1376 Officers Boston, Massachusetts 02104 Heath B. McLendon President and Custodian Chief Executive Officer PNC Bank, N.A. 17th & Chestnut Streets Lewis E. Daidone Philadelphia, Pennsylvania 19103 Senior Vice President and Treasurer Joseph P. Deane Vice President and Investment Officer David Fare Investment Officer Thomas M. Reynolds Controller Christina T. Sydor Secretary - -------------------------------------[LOGO]------------------------------------- 27 [This page intentionally left blank] ================================================================================ This report is only intended for shareholders of the Managed Municipals Portfolio Inc. It is not a Prospectus, circular or representation intended for use in the purchase or sale of shares of the Fund or of any securities mentioned in the report. FD0837 1/98 ================================================================================ -----END PRIVACY-ENHANCED MESSAGE-----