-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, sYFC+am0nGJeCRbJqqfxjEHAyLKcZCbtpm9xmJD6Qn35GtV1G5l3Z6Hu2r2nqIpu UCjTNh+ebt4gcG8zSitc0A== 0000091155-95-000319.txt : 19950905 0000091155-95-000319.hdr.sgml : 19950905 ACCESSION NUMBER: 0000091155-95-000319 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950831 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SMITH BARNEY APPRECIATION FUND INC CENTRAL INDEX KEY: 0000089558 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 132653031 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-01940 FILM NUMBER: 95569387 BUSINESS ADDRESS: STREET 1: TWO WORLD TRADE CENTER CITY: NEW YORK STATE: NY ZIP: 10048 BUSINESS PHONE: 6175731332 FORMER COMPANY: FORMER CONFORMED NAME: SMITH BARNEY SHEARSON APPRECIATION FUND INC DATE OF NAME CHANGE: 19931015 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN BROTHERS APPRECIATION FUND INC DATE OF NAME CHANGE: 19930326 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN APPRECIATION FUND INC/MD/ DATE OF NAME CHANGE: 19930326 N-30D 1 - ----------------------------------- S E M I - A N N U A L R E P O R T - ----------------------------------- [PHOTO APPEARS HERE] Smith Barney Appreciation Fund Inc. - ----------------------------------- June 30, 1995 [LOGO OF SMITH BARNEY MUTUAL FUNDS APPEARS HERE] - ---------------------- Appreciation Fund Inc. - ---------------------- DEAR SHAREHOLDER: In our annual report to shareholders, we suggested that 1995 would be a much better year for the stock market than 1994. We said that the stage was set for upside surprises, because the best investment environment is one where skepticism is rampant, and Federal Reserve monetary policy is loosening. The first six months of 1995 benefitted from both of these factors. The stock market staged a magnificent rally as interest rates fell sharply, and investors began to shed the pessimism that had driven prices down for most of 1994. For the six months ended June 30, 1995, the Smith Barney Appreciation Fund had a total return of 17.24% for Class A shares compared with a return of 20.19% for the unmanaged Standard & Poor's 500 Stock Index, a common benchmark for U.S. stock market performance. Our investment philosophy has always been to own a core of great growth companies such as Procter & Gamble, Johnson & Johnson, Minnesota Mining & Manufacturing, International Flavors & Fragrances, Gillette, and more recently, Microsoft. This type of consumer-oriented company will account for a meaningful amount of the portfolio's performance. As long as they do not seem too expensive, we will tend to hold a large weighting in various growth-stock positions and let the proven managements of these companies do the work for us as shareholders. Around this core of growth stocks, we try to identify timely themes. For example, in the past few years, we have liked the "information highway" theme and have invested in several telecommunications-related stocks including AT&T, one of the Fund's largest holdings, to participate in that theme. We have also believed in the enhanced profitability of industrial America, and in a departure from our traditional growth style of investing of the 1980's, we own positions in such cyclical companies as Ingersoll Rand, Union Pacific, Mead Corp., Hercules, DuPont, and Caterpillar. DuPont also fits into our most successful theme of the past couple of years -- the restructuring of formerly great companies that had fallen on harder times. Companies such as DuPont, Eastman Kodak, Xerox, United Technologies, IBM, Allied Signal, and American Home Products have all experienced significant catalysts for change, either in new management, cost-cutting, or mergers. In each case, the stocks have begun to reflect a better outlook. Although the Fund has modest positions in Microsoft and Intel, and a more substantial position in AMP, it has always been our policy not to "bet the ranch" on any one industry, in this case, technology. Because technology was the best-performing sector in the past three months, the Fund's second quarter was not quite as exciting as the first. In the first quarter, our core multi- national growth stocks turned in an outstanding performance. 1 There were few major sales in the Fund in the first half of the year. KeyCorp, a regional bank stock, was eliminated, as was Southern Pacific Rail, because we believe both have a less promising earnings outlook. We sold our holdings in Aetna, one of our restructuring candidates, and realized a profit on that stock. But for the most part, our sales consisted of an occasional trimming of a position when a stock seemed to be getting richly valued, or when it adequately reflected current or potential good news. Purchases included Mead Corp., a group of paging stocks, a few bank stocks, and some small positions in younger growth companies, such as ACX Technologies and Scotts Co. We are also continuing our recent policy of increasing the percentage of the portfolio represented by its top-20 holdings so that these stocks will have a greater impact on the Fund's performance. We believe that the stock market reacts to three factors: earnings, interest rates, and psychology. As we had anticipated, due to corporate cost-cutting, first-quarter earnings were better than had generally been expected. Estimates have been raised, and while earnings should remain fairly good, even with the slowdown in the economy, they are not likely to generate any fireworks. We believe interest rates will be stable from this point on with short-term rates possibly declining a bit further. That leaves psychology. It is our belief that markets do better "climbing a wall of worry," such as we saw in the first several months of the year. Skepticism has given way to complacency, which may lead to euphoria. We are monitoring the psychological side of the market for such signs, but of course, there are no formulas for it; nor are there any rules about how long this cycle can last. In summary, conditions remain generally friendly to financial assets, and we believe our consistent approach is a good way to participate. We thank you for your investment in the Fund and your continued confidence in our investment management. Sincerely, /s/ Heath B. McLendon /s/ Harry D. Cohen Heath B. McLendon Harry D. Cohen Chairman and Vice President and Chief Executive Officer Investment Officer July 17, 1995 2 Smith Barney Appreciation Fund Inc.
- -------------------------------------------------------------------------------- Historical Performance -- Class A Shares - -------------------------------------------------------------------------------- Net Asset Value -------------------- Beginning End Income Capital Gain Total Period Ended of Period of Period Dividends Distributions Returns/(1)/ ================================================================================ 6/30/95 $10.15 $11.90 $0.00 $0.00 17.24% - -------------------------------------------------------------------------------- 12/31/94 11.01 10.15 0.18 0.60 (0.77) - -------------------------------------------------------------------------------- 12/31/93 10.66 11.01 0.16 0.36 8.13 - -------------------------------------------------------------------------------- 12/31/92 10.26 10.66 0.15 0.09 6.29 - -------------------------------------------------------------------------------- 12/31/91 8.30 10.26 0.20 0.07 26.94 - -------------------------------------------------------------------------------- 12/31/90 8.66 8.30 0.25 0.08 (0.27) - -------------------------------------------------------------------------------- 12/31/89 7.04 8.66 0.24 0.22 29.55 - -------------------------------------------------------------------------------- 12/31/88 6.49 7.04 0.19 0.13 13.45 - -------------------------------------------------------------------------------- 12/31/87 6.54 6.49 0.26 0.25 6.95 - -------------------------------------------------------------------------------- 12/31/86 5.82 6.54 0.00 0.41 19.93 - -------------------------------------------------------------------------------- 12/31/85 4.45 5.82 0.04 0.09 34.38 - -------------------------------------------------------------------------------- 12/31/84 4.52 4.45 0.06 0.09 1.78 ================================================================================ Total $1.73 $2.39 ================================================================================ - -------------------------------------------------------------------------------- Historical Performance -- Class B Shares - -------------------------------------------------------------------------------- Net Asset Value -------------------- Beginning End Income Capital Gain Total Period Ended of Period of Period Dividends Distributions Returns/(1)/ ================================================================================ 6/30/95 $10.14 $11.83 $0.00 $0.00 16.67% - -------------------------------------------------------------------------------- 12/31/94 11.00 10.14 0.10 0.60 (1.53) - -------------------------------------------------------------------------------- 12/31/93 10.65 11.00 0.08 0.36 7.38 - -------------------------------------------------------------------------------- Inception*-12/31/92 10.55 10.65 0.16 0.09 3.28 ================================================================================ Total $0.34 $1.05 ================================================================================ - -------------------------------------------------------------------------------- Historical Performance -- Class C Shares - -------------------------------------------------------------------------------- Net Asset Value -------------------- Beginning End Income Capital Gain Total Period Ended of Period of Period Dividends Distributions Returns/(1)/ ================================================================================ 6/30/95 $10.14 $11.84 $0.00 $0.00 16.77% - -------------------------------------------------------------------------------- 12/31/94 11.00 10.14 0.11 0.60 (1.41) - -------------------------------------------------------------------------------- Inception*-12/31/93 10.99 11.00 0.08 0.36 4.09 ================================================================================ Total $0.19 $0.96 ================================================================================
3 Smith Barney Appreciation Fund Inc.
- -------------------------------------------------------------------------------- Historical Performance -- Class Z Shares - -------------------------------------------------------------------------------- Net Asset Value -------------------- Beginning End Income Capital Gain Total Period Ended of Period of Period Dividends Distributions Returns/(1)/ ================================================================================ 6/30/95 $10.16 $11.92 $0.00 $0.00 17.32% - -------------------------------------------------------------------------------- 12/31/94 11.02 10.16 0.22 0.60 (0.36) - -------------------------------------------------------------------------------- 12/31/93 10.66 11.02 0.18 0.36 8.47 - -------------------------------------------------------------------------------- Inception*-12/31/92 10.55 10.66 0.16 0.09 3.38 ================================================================================ Total $0.56 $1.05 ================================================================================
IT IS THE FUND'S POLICY TO DISTRIBUTE DIVIDENDS AND CAPITAL GAINS, IF ANY, ANNUALLY.
- -------------------------------------------------------------------------------- Average Annual Total Return - -------------------------------------------------------------------------------- Without Sales Charge/(1)/ ------------------------------------------- Class A Class B Class C Class Z ================================================================================ Six Months Ended 6/30/95+ 17.24% 16.67% 16.77% 17.32% - -------------------------------------------------------------------------------- Year Ended 6/30/95 18.71 17.66 17.90 19.11 - -------------------------------------------------------------------------------- Five Years Ended 6/30/95 10.13 N/A N/A N/A - -------------------------------------------------------------------------------- Ten Years Ended 6/30/95 13.70 N/A N/A N/A - -------------------------------------------------------------------------------- Inception* through 6/30/95 N/A 9.58 7.83 10.75 - -------------------------------------------------------------------------------- With Sales Charge/(2)/ ------------------------------------------- Class A Class B Class C Class Z ================================================================================ Six Months Ended 6/30/95+ 11.42% 11.66% 15.77% N/A - -------------------------------------------------------------------------------- Year Ended 6/30/95 12.75 12.66 16.90 N/A - -------------------------------------------------------------------------------- Five Years Ended 6/30/95 8.99 N/A N/A N/A - -------------------------------------------------------------------------------- Ten Years Ended 6/30/95 13.12 N/A N/A N/A - -------------------------------------------------------------------------------- Inception* through 6/30/95 N/A 8.60 7.83 N/A - --------------------------------------------------------------------------------
4 Smith Barney Appreciation Fund Inc.
- -------------------------------------------------------------------------------- Cumulative Total Return - -------------------------------------------------------------------------------- Without Sales Charge/(1)/ ------------------------- Class A (6/30/85 through 6/30/95) 261.05% - -------------------------------------------------------------------------------- Class B (Inception* through 6/30/95) 27.41 - -------------------------------------------------------------------------------- Class C (Inception* through 6/30/95) 19.82 - -------------------------------------------------------------------------------- Class Z (Inception* through 6/30/95) 31.02 - --------------------------------------------------------------------------------
(1) Assumes reinvestment of all dividends and capital gain distributions at net asset value and does not reflect deduction of the applicable sales charge with respect to Class A shares or the applicable contingent deferred sales charges ("CDSC") with respect to Class B and Class C shares. (2) Assumes reinvestment of all dividends and capital gain distributions at net asset value. In addition, Class A shares reflect the deduction of the maximum initial sales charge of 5.00%; Class B shares reflect the deduction of a 5.00% CDSC, which applies if shares are redeemed less than one year from initial purchase and declines by 1.00% per year until no CDSC is incurred. Class C shares reflect the deduction of a 1.00% CDSC which applies if shares are redeemed within the first year of purchase. * The inception dates for Class B, C and Z shares are November 6, 1992, February 4, 1993 and November 6, 1992, respectively. + Represents total return for the period from January 1, 1995 through June 30, 1995, not annualized. 5 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Historical Performance - -------------------------------------------------------------------------------- Growth of $10,000 Invested in Class A Shares of the Smith Barney Appreciation Fund Inc. vs. The Standard & Poor's 500 Index + (unaudited) - -------------------------------------------------------------------------------- June 1985 - June 1995 [GRAPHS APPEARS HERE]
SMITH BARNEY APPRECIATION FUND INC. S&P 500 6/85 $9,500.90 $10,000.00 6/86 $13,299.50 $12,533.23 6/87 $15,977.50 $14,421.30 6/88 $15,163.70 $13,428.58 6/89 $18,002.20 $16,183.91 6/90 $21,176.50 $18,853.98 6/91 $22,571.50 $20,245.14 6/92 $25,128.80 $22,964.26 6/93 $27,958.10 $26,098.87 6/94 $28,896.00 $26,463.97 6/95 $34,302.60 $33,359.13
+ Hypothetical Illustration of $10,000 invested in Class A shares on June 30, 1985, assuming deduction of the maximum 5.00% sales charge at the time of investment and reinvestment of dividends and capital gains, if any, at net asset value through June 30, 1995. The Standard & Poor's 500 Stock Index ("S&P 500") is an index composed of widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and over-the-counter market. Figures for the S&P 500 Index include reinvestment of dividends. The index is unmanaged and it is not subject to the same management and trading expenses as a mutual fund. The performance of the Fund's other classes may be greater or less than the Class A shares' performance indicated on this chart, depending on whether greater or lesser sales charges and fees were incurred by shareholders investing in other classes. All figures represent past performance and are not a guarantee of future results. Investment returns and principal value will fluctuate, and redemption value may be more or less than the original cost. No adjustment has been made for shareholder tax liability on dividends or capital gains. 6 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Portfolio Highlights (unaudited) June 30, 1995 - -------------------------------------------------------------------------------- Industry Breakdown [PIE CHART APPEARS HERE]
Percentage of Industry Breakdown Breakdown - -------------------------------------------------------------------------------- Other Common Stocks 16.6% Repurchase Agreements 11.6% Oil - International & Domestic 9.4% Healthcare/Drugs/Hospital 8.3% Diversified Conglomerate 7.9% Telephone Communication 5.2% Chemical 5.0% Financial Services 4.3% Consumer Products 4.1% Publishing 4.0% Banking 4.0% Retail 3.9% Electrical Equipment 3.6% Office Equipment & Supplies 3.4% Entertainment & Leisure 3.3% Technology 2.8% Insurance 2.6%
Top Ten Holdings
Percentage of Company Total Investments - -------------------------------------------------------------------------------- Eastman Kodak Company 4.2% Minnesota Mining and Manufacturing Company 3.5 American Telephone & Telegraph Company 3.2 Xerox Corporation 2.7 American Home Products Corporation 2.3 Mobil Corporation 2.2 E.I. du Pont de Nemours & Company 2.1 R.R. Donnelley & Sons Company 1.9 Amoco Corporation 1.9 Amp Incorporated 1.8
7 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Schedule of Investments (unaudited) June 30, 1995 - --------------------------------------------------------------------------------
SHARES SECURITY VALUE ================================================================================ COMMON STOCKS -- 88.4% Aerospace -- 2.1% 400,000 Allied Signal Incorporated $ 20,025,000 225,000 Boeing Company 14,090,625 100,000 Lockheed Martin Corporation 6,312,500 239,800 United Technologies Corporation 18,734,375 - -------------------------------------------------------------------------------- 59,162,500 - -------------------------------------------------------------------------------- Appliances -- 0.3% 150,000 Whirlpool Corporation 8,250,000 - -------------------------------------------------------------------------------- Auto-Parts & Accessories -- 0.9% 600,000 Goodyear Tire & Rubber Company 24,750,000 - -------------------------------------------------------------------------------- Automobile -- 2.4% 250,000 Chrysler Corporation 11,968,750 1,100,000 Ford Motor Company 32,725,000 500,000 General Motors Corporation 23,437,500 - -------------------------------------------------------------------------------- 68,131,250 - -------------------------------------------------------------------------------- Banking -- 4.0% 475,000 Bank of New York Incorporated 19,178,125 100,000 Barnett Banks Incorporated 5,125,000 300,000 Chase Manhattan Bank 14,100,000 400,000 Chemical Banking Corporation 18,900,000 350,000 First Virginia Banks Incorporated 13,125,000 350,000 Republic New York Corporation 19,600,000 140,000 Wells Fargo & Company 25,235,000 - -------------------------------------------------------------------------------- 115,263,125 - -------------------------------------------------------------------------------- Beverage, Food and Tobacco -- 2.4% 250,000 Coca-Cola Company 15,937,500 400,000 CPC International 24,700,000 725,000 McDonalds Corporation 28,365,625 - -------------------------------------------------------------------------------- 69,003,125 - -------------------------------------------------------------------------------- Broadcasting -- 2.1% 180,000 Capital Cities / ABC Incorporated 19,440,000 450,000 CBS Incorporated 30,150,000 336,500 Scandinavian Broadcasting 6,814,125 125,000 Turner Broadcasting System Incorporated 2,500,000 - -------------------------------------------------------------------------------- 58,904,125 - --------------------------------------------------------------------------------
See Notes to Financial Statements. 8 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Schedule of Investments (unaudited) (continued) June 30, 1995 - --------------------------------------------------------------------------------
SHARES SECURITY VALUE ================================================================================ Chemicals -- 5.0% 850,000 E.I. du Pont de Nemours & Company $ 58,437,500 350,000 Hercules Incorporated 17,062,500 500,000 Mead Corporation 29,687,500 300,000 Monsanto Company 27,037,500 300,000 Scherwin-Williams Company 10,687,500 - -------------------------------------------------------------------------------- 142,912,500 - -------------------------------------------------------------------------------- Computer Software & Services -- 0.7% 230,000 Microsoft Corporation 20,786,250 - -------------------------------------------------------------------------------- Consumer Products -- 4.1% 500,000 Gillette Company 22,312,500 580,000 International Flavors & Fragrances Incorporated 28,855,000 800,000 Newell Company 19,600,000 550,000 Procter & Gamble Company 39,531,250 260,000 Scotts Company Class A Shares* 5,687,500 - -------------------------------------------------------------------------------- 115,986,250 - -------------------------------------------------------------------------------- Containers/Packaging/Glass -- 1.1% 650,000 Crown Cork & Seal Incorporated* 32,581,250 - -------------------------------------------------------------------------------- Diversified/Conglomerate -- 7.9% 1,950,000 Eastman Kodak Company 118,218,750 200,000 Honeywell Incorporated 8,625,000 1,725,000 Minnesota Mining & Manufacturing Company 98,756,250 - -------------------------------------------------------------------------------- 225,600,000 - -------------------------------------------------------------------------------- Electrical Equipment -- 3.6% 1,225,000 Amp Incorporated 51,756,250 300,000 Emerson Electric Company 21,450,000 500,000 General Electric Company 28,187,500 - -------------------------------------------------------------------------------- 101,393,750 - -------------------------------------------------------------------------------- Entertainment & Leisure -- 3.3% 100,000 Dick Clark Productions Incorporated* 875,000 500,000 Walt Disney Company 27,812,500 78,750 Gaylord Entertainment Corporation Class A Shares* 1,988,438 200,000 GC Companies Incorporated* 6,550,000 700,000 Savoy Pictures Entertainment Incorporated* 6,387,500 1,200,000 Time-Warner Incorporated 49,350,000 - -------------------------------------------------------------------------------- 92,963,438 - --------------------------------------------------------------------------------
See Notes to Financial Statements. 9 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Schedule of Investments (unaudited) (continued) June 30, 1995 - --------------------------------------------------------------------------------
SHARES SECURITY VALUE ================================================================================ Financial Services -- 4.3% 800,000 American Express Company $ 28,100,000 200,000 H & R Block Incorporated 8,225,000 400,000 Federal National Mortgage Association 37,750,000 500,000 Fiserv Incorporated* 14,062,500 50,000 Fund American Enterprises Holdings* 3,568,750 550,000 Household International 27,225,000 200,000 Mercury Finance Company 3,850,000 - -------------------------------------------------------------------------------- 122,781,250 - -------------------------------------------------------------------------------- Healthcare/Drugs/Hospital Supplies -- 8.3% 350,000 Abbott Laboratories 14,175,000 850,000 American Home Products Corporation 65,768,750 600,000 Bristol-Myers-Squibb Company 40,875,000 300,000 Forest Laboratories Incorporated Class A Shares* 13,312,500 100,000 Hospitality Franchise Systems Inc.* 3,462,500 600,000 Johnson & Johnson 40,575,000 600,000 Merck and Company Incorporated 29,400,000 325,000 Warner Lambert Company 28,071,875 - -------------------------------------------------------------------------------- 235,640,625 - -------------------------------------------------------------------------------- Insurance -- 2.6% 400,000 American International Group Incorporated 45,600,000 100,000 CNA Financial Corporation* 8,637,500 251,000 Leucadia National Corporation 12,675,500 250,000 Provident Life and Accident Company of America 5,812,500 - -------------------------------------------------------------------------------- 72,725,500 - -------------------------------------------------------------------------------- Machinery -- 1.0% 150,000 Caterpillar Incorporated 9,637,500 475,000 Ingersoll-Rand Company 18,168,750 - -------------------------------------------------------------------------------- 27,806,250 - -------------------------------------------------------------------------------- Metals -- 0.8% 100,000 Aluminum Company of America 5,012,500 450,000 Cyprus Amax Minerals Company 12,825,000 300,000 Santa Fe Pacific Gold Corporation 3,637,500 - -------------------------------------------------------------------------------- 21,475,000 - -------------------------------------------------------------------------------- Miscellaneous -- 0.1% 100,000 Service Corporation 3,162,500 - -------------------------------------------------------------------------------- Office Equipment & Supplies -- 3.4% 175,000 Alco Standard Corporation 13,978,125
See Notes to Financial Statements. 10 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Schedule of Investments (unaudited) (continued) June 30, 1995 - --------------------------------------------------------------------------------
SHARES SECURITY VALUE ================================================================================ Office Equipment & Supplies -- 3.4% (continued) 250,000 ECI Telecommunications Limited $ 3,421,875 25,000 Global Direct Mail* 493,750 660,000 Xerox Corporation 77,385,000 - -------------------------------------------------------------------------------- 95,278,750 - -------------------------------------------------------------------------------- Oil-Domestic & Crude -- 3.3% 400,000 Amerada Hess Corporation 19,550,000 225,000 Atlantic Richfield Company 24,693,750 300,000 Baker Hughes Incorporated 6,150,000 400,000 Burlington Resources Incorporated 14,750,000 500,000 Enron Corporation 17,562,500 200,000 Global Marine Incorporated* 1,150,000 300,000 Questar Corporation 8,625,000 100,000 Rowan Companies Incorporated* 812,500 - -------------------------------------------------------------------------------- 93,293,750 - -------------------------------------------------------------------------------- Oil International -- 6.1% 800,000 Amoco Corporation 53,300,000 100,000 British Petroleum PLC ADR 8,562,500 300,000 Chevron Corporation 13,987,500 100,000 Ensco International Incorporated* 1,587,500 650,000 Mobil Corporation 62,400,000 275,000 Royal Dutch Petroleum Company ADR 33,515,625 - -------------------------------------------------------------------------------- 173,353,125 - -------------------------------------------------------------------------------- Paper and Paper Products -- 1.0% 200,000 Bowater Incorporated 8,975,000 47,600 Riverwood International Corporation 1,106,700 290,000 St. Joe Paper Company 18,415,000 - -------------------------------------------------------------------------------- 28,496,700 - -------------------------------------------------------------------------------- Publishing -- 4.0% 325,000 Gannett Company 17,631,250 250,000 Harcourt General Incorporated 10,625,000 1,500,000 R.R. Donnelley & Sons Company 54,000,000 500,000 Tribune Company 30,687,500 - -------------------------------------------------------------------------------- 112,943,750 - -------------------------------------------------------------------------------- Railroads -- 1.5% 150,000 Burlington Northern Incorporated 9,506,250 625,000 Union Pacific Corporation 34,609,375 - -------------------------------------------------------------------------------- 44,115,625 - --------------------------------------------------------------------------------
See Notes to Financial Statements. 11 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Schedule of Investments (unaudited) (continued) June 30, 1995 - --------------------------------------------------------------------------------
SHARES SECURITY VALUE ================================================================================ Real Estate -- 0.2% 100,000 General Growth Properties $ 2,037,500 150,000 Spieker Properties Incorporated 3,356,250 - -------------------------------------------------------------------------------- 5,393,750 - -------------------------------------------------------------------------------- Retail -- 3.9% 500,000 American Stores Company 14,062,500 525,000 Home Depot Incorporated 21,328,125 150,000 Limited Incorporated 3,300,000 450,000 J.C. Penney Incorporated 21,600,000 350,000 Rite Aid Corporation 8,968,750 1,500,000 Wal-Mart Stores Incorporated 40,125,000 - -------------------------------------------------------------------------------- 109,384,375 - -------------------------------------------------------------------------------- Technology -- 2.8% 150,000 ACX Technologies* 6,262,500 360,000 Intel Corporation 22,792,500 275,000 International Business Machines Corporation 26,400,000 300,000 Motorola Incorporated 20,137,500 134,400 Reynolds & Reynolds Company Class A Shares 3,964,800 - -------------------------------------------------------------------------------- 79,557,300 - -------------------------------------------------------------------------------- Telephone/Communications -- 5.2% 1,700,000 American Telephone & Telegraph Company 90,312,500 47,500 A Plus Communications Incorporated* 629,375 100,000 Arch Communications Group Incorporated* 2,225,000 800,000 Comcast Corporation Class A Shares 14,850,000 100,000 General Instrument Corporation* 3,837,500 100,000 Mobil Telecommunications 2,737,500 60,000 Mobilemedia Corporation* 1,230,000 100,000 Paging Network Incorporated* 3,425,000 60,000 Pronet Incorporated* 1,230,000 1,200,000 Tele-Communications Incorporated Class A Shares* 28,125,000 - -------------------------------------------------------------------------------- 148,601,875 - -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost -- $1,838,663,372) 2,509,697,688 ================================================================================
See Notes to Financial Statements. 12 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Schedule of Investments (unaudited) (continued) June 30, 1995 - --------------------------------------------------------------------------------
FACE AMOUNTS SECURITY VALUE ================================================================================ REPURCHASE AGREEMENTS -- 11.6% $200,000,000 Fuji Securities, Inc., 6.00% due 7/03/95; Proceeds at maturity -- $200,099,951; (Fully collateralized by U.S. Treasury Notes, 6.50% due 9/30/96; Market value -- $204,119,370) $ 200,000,000 100,000,000 Morgan Stanley, Inc., 6.00% due 7/03/95; Proceeds at maturity -- $100,049,976; (Fully collateralized by U.S. Treasury Notes, 7.50% due 1/31/97; Market value -- $102,008,855) 100,000,000 30,067,000 Chemical Securities Inc., 5.98% due 7/03/95; Proceeds at maturity -- $30,081,975; (Fully collateralized by U.S. Treasury Notes, 6.125% due 5/15/98; Market value -- $30,670,980) 30,067,000 - -------------------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENTS (Cost -- $330,067,000) 330,067,000 ================================================================================ TOTAL INVESTMENTS -- 100% (Cost -- $2,168,730,372++) $2,839,764,688 ================================================================================
* Non-income producing security. ++ Aggregate cost for Federal income tax purposes is substantially the same. See Notes to Financial Statements. 13 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Statement of Assets and Liabilities (unaudited) June 30, 1995 - -------------------------------------------------------------------------------- ASSETS: Investments, at value (Cost -- $2,168,730,372) $2,839,764,688 Cash 260 Receivable for securities sold 5,008,048 Receivable for Fund shares sold 1,475,680 Dividends and interest receivable 4,233,517 - -------------------------------------------------------------------------------- Total Assets 2,850,482,193 - -------------------------------------------------------------------------------- LIABILITIES: Management fees payable 1,576,350 Distribution costs payable 1,100,610 Payable for securities purchased 14,372,613 Accrued expenses and other liabilities 241,229 - -------------------------------------------------------------------------------- Total Liabilities 17,290,802 - -------------------------------------------------------------------------------- Total Net Assets $2,833,191,391 ================================================================================ NET ASSETS: Par value of capital shares $ 238,548 Capital paid in excess of par value 1,990,914,013 Undistributed net investment income 21,995,605 Accumulated net realized gain on security transactions 149,008,909 Net unrealized appreciation of investment 671,034,316 - -------------------------------------------------------------------------------- Total Net Assets $2,833,191,391 ================================================================================ Shares Outstanding: Class A 153,228,790 ------------------------------------------------------------------------------ Class B 74,194,153 ------------------------------------------------------------------------------ Class C 684,378 ------------------------------------------------------------------------------ Class Z 10,440,246 ------------------------------------------------------------------------------ Net Asset Value: Class A (and redemption price) $11.90 ------------------------------------------------------------------------------ Class B* $11.83 ------------------------------------------------------------------------------ Class C** $11.84 ------------------------------------------------------------------------------ Class Z (and redemption price) $11.92 ------------------------------------------------------------------------------ Class A Maximum Public Offering Price Per Share (net asset value plus 5.26% of net asset value per share) $12.53 ================================================================================
* Redemption price is NAV of Class B shares reduced by a 5.00% CDSC if shares are redeemed less than one year from initial purchase, and declines by 1.00% per year until no CDSC is incurred. ** Redemption price is NAV of Class C shares reduced by a 1.00% CDSC if shares are redeemed within the first year of purchase. See Notes to Financial Statements. 14 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Statement of Operations (unaudited) - -------------------------------------------------------------------------------- For the Six Months Ended June 30, 1995 INVESTMENT INCOME: Interest $ 9,748,133 Dividends 27,866,234 - -------------------------------------------------------------------------------- Total Investment Income 37,614,367 - -------------------------------------------------------------------------------- EXPENSES: Investment advisory fees (Note 2) 6,382,987 Distribution fees (Note 2) 6,326,448 Administration 2,337,304 Shareholder and system servicing fees 1,810,000 Custodian 100,000 Shareholder communications 100,000 Registration fees 45,000 Audit and legal 30,000 Directors' fees 12,500 Other 104,283 - -------------------------------------------------------------------------------- Total Expenses 17,248,522 - -------------------------------------------------------------------------------- Net Investment Income 20,365,845 - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS (Note 3): Realized Gain From Security Transactions (excluding short-term securities): Proceeds from sales 635,524,839 Cost of securities sold 539,605,976 - -------------------------------------------------------------------------------- Net Realized Gain 95,918,863 - -------------------------------------------------------------------------------- Change in Net Unrealized Appreciation of Investments: Beginning of period 365,357,847 End of period 671,034,316 - -------------------------------------------------------------------------------- Increase in Net Unrealized Appreciation 305,676,469 - -------------------------------------------------------------------------------- Net Gain on Investments 401,595,332 - -------------------------------------------------------------------------------- Increase in Net Assets From Operations $421,961,177 ================================================================================
See Notes to Financial Statements. 15 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Statements of Changes in Net Assets - -------------------------------------------------------------------------------- For the Six Months Ended June 30, 1995 (unaudited) and the Year Ended December 31, 1994
1995 1994 ======================================================================================== OPERATIONS: Net investment income $ 20,365,845 $ 36,423,127 Net realized gain from security transactions 95,918,863 173,322,683 Increase (decrease) in net unrealized appreciation of investments 305,676,469 (239,245,191) - ---------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Operations 421,961,177 (29,499,381) - ---------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (11,153) (36,643,881) Net realized gain from security transactions -- (140,417,671) - ---------------------------------------------------------------------------------------- Decrease in Net Assets From Distributions to Shareholders (11,153) (177,061,552) - ---------------------------------------------------------------------------------------- FUND SHARE TRANSACTIONS (Note 5): Net proceeds from sale of shares 126,634,991 669,137,931 Net asset value of shares issued for reinvestment of dividends -- 171,376,919 Cost of shares reacquired (272,233,431) (1,102,418,686) - ---------------------------------------------------------------------------------------- Decrease in Net Assets From Fund Share Transactions (145,598,440) (261,903,836) - ---------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets 276,351,584 (468,464,769) NET ASSETS: Beginning of period 2,556,839,807 3,025,304,576 - ---------------------------------------------------------------------------------------- End of period * $2,833,191,391 $2,556,839,807 ======================================================================================== * Includes undistributed net investment income of: $21,995,605 $1,640,913 ========================================================================================
See Notes to Financial Statements. 16 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) - -------------------------------------------------------------------------------- 1. Significant Accounting Policies The Smith Barney Appreciation Fund Inc. ("Fund"), a Maryland Corporation, is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The significant accounting policies consistently followed by the Fund are: (a) securities transactions are accounted for on trade date; (b) securities traded on national securities markets are valued at the closing prices on such markets; securities traded in the over-the-counter market and listed securities for which no sales price was reported and U.S. Government and Government Agency obligations are valued at bid price, or in the absence of a recent bid price, at the bid equivalent obtained from one or more of the major market makers in the securities; (c) short-term investments that have a maturity of 60 days or less are valued at cost plus accreted discount, or minus amortized premium, as applicable; (d) dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis; (e) gains or losses on the sale of securities are calculated by using the specific identification method; (f) direct expenses are charged to each class; management fees and general fund expenses are allocated on the basis of relative net assets; (g) dividends and distributions to shareholders are recorded on the ex-dividend date; (h) the accounting records are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the rate of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, and income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. Differences between income and expense amounts recorded and collected or paid are adjusted when reported by the custodian bank and (i) the Fund intends to comply with the requirements of the Internal Revenue Code pertaining to regulated investment companies and to make the required distributions to shareholders; therefore, no provision for Federal income taxes has been made. 17 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) - -------------------------------------------------------------------------------- 2. Management Agreement and Transactions with Affiliated Persons Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith Barney Holdings Inc. ("SBH"), acts as investment advisor of the Fund. The Fund pays SBMFM an investment advisory fee calculated at the annual rate of 0.55% on the Fund's average daily net assets up to $250 million; 0.513% on the next $250 million; 0.476% on the next $500 million; 0.439% on the next $1 billion; 0.402% on the next $1 billion; and 0.365% on average daily net assets in excess of $3 billion. All fees are calculated daily and paid monthly. SBMFM also serves as administrator to the Fund. As compensation for such services, SBMFM receives a fee computed daily and paid monthly at the following annual rates: 0.20% on the Fund's average daily net assets up to $250 million; 0.187% on the next $250 million; 0.174% on the next $500 million; 0.161% on the next $1 billion; 0.148% on the next $1 billion and 0.135% on the average daily net assets in excess of $3 billion. Smith Barney Inc. ("SB"), another subsidiary of SBH, acts as distributor of Fund shares and primary broker for its portfolio agency transactions. For the six months ended June 30, 1995, SB received brokerage commissions of $205,800 and was paid sales charges on Class A share purchases of approximately $753,000. A contingent deferred sales charge ("CDSC") is imposed on Class B shares which begins at 5.00% if redemption occurs less than one year from initial purchase and declines by 1.00% per year until no CDSC is incurred. A CDSC of 1.00% is imposed on Class C shares if redemption occurs within the first year from the date such investment was made. Any CDSC imposed on redemptions is paid to SB. For the six months ended June 30, 1995, there were approximately $1.1 million in such charges. Pursuant to a Distribution Plan the Fund pays a service fee with respect to its Class A, B and C shares calculated at the annual rate of 0.25% of the average daily net assets of each respective class. The Fund also pays a distribution fee with respect to Class B and C shares calculated at the annual rate of 0.75% of the average daily net assets for each class. All officers and one director of the Fund are employees of SB. 18 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) - -------------------------------------------------------------------------------- 3. Investments During the six months ended June 30, 1995, the aggregate cost of purchases and proceeds from sales of investments (including maturities, but excluding short-term securities) was $475,867,225 and $635,524,839, respectively. At June 30, 1995, the net unrealized appreciation of investments for Federal income tax purposes consisted of the following: =============================================================================== Gross unrealized appreciation $680,805,019 Gross unrealized depreciation (9,770,703) - ------------------------------------------------------------------------------- Net unrealized appreciation $671,034,316 ===============================================================================
4. Repurchase Agreements The Fund purchases (and its custodian takes possession of) U.S. Government securities from banks and securities dealers subject to agreements to resell the securities to the sellers at a future date (generally, the next business day) at an agreed-upon higher repurchase price. The Fund requires continual maintenance of the market value of the collateral in amounts at least equal to the repurchase price. 5. Capital Shares At June 30, 1995, the Fund had two billion shares of $0.001 par value capital stock authorized. The Fund has the ability to issue multiple classes of shares. Each share of a class represents an identical interest and has the same rights, except that each class bears certain expenses, including those specifically related to the distribution of its shares. Effective November 7, 1994, the Fund adopted a new class structure, renaming the existing Class C and D shares as Class Z and C shares, respectively. At June 30, 1995, total paid-in capital amounted to the following for each class:
Class A Class B Class C Class Z ================================================================================ Total Paid-in Capital $1,194,010,648 $679,769,539 $7,500,047 $109,872,327 ================================================================================
19 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) - -------------------------------------------------------------------------------- Transactions in shares of each class were as follows:
Six Months Ended Year Ended June 30, 1995 December 31, 1994 ---------------------- ----------------------- Shares Amount Shares Amount ====================================================================================== Class A Shares sold 3,347,886 $ 37,107,093 44,084,284 $ 488,137,245 Shares issued on reinvestment -- -- 11,449,490 116,212,319 Shares redeemed (16,487,707) (180,643,732) (32,594,240) (358,392,877) - -------------------------------------------------------------------------------------- Net Increase (Decrease) (13,139,821) $(143,536,639) 22,939,534 $ 245,956,687 ====================================================================================== Class B Shares sold 6,687,927 $ 74,169,998 13,930,876 $ 152,849,192 Shares issued on reinvestment -- -- 4,660,147 47,253,894 Shares redeemed (7,545,883) (82,928,349) (60,436,380) (664,262,057) - -------------------------------------------------------------------------------------- Net Decrease (857,956) $ (8,758,351) (41,845,357) $(464,158,971) ====================================================================================== Class C Shares sold 496,682 $ 5,474,718 327,092 $ 3,573,460 Shares issued on reinvestment -- -- 32,039 324,876 Shares redeemed (309,227) (3,402,390) (63,463) (694,090) - -------------------------------------------------------------------------------------- Net Increase 187,455 $ 2,072,328 295,668 $ 3,204,246 ====================================================================================== Class Z Shares sold 912,721 $ 9,883,182 2,221,990 $ 24,578,034 Shares issued on reinvestment -- -- 746,636 7,585,830 Shares redeemed (470,612) (5,258,960) (7,290,364) (79,069,662) - -------------------------------------------------------------------------------------- Net Increase (Decrease) 442,109 $ 4,624,222 (4,321,738) $ (46,905,798) ======================================================================================
20 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Financial Highlights - -------------------------------------------------------------------------------- For a share of each class of capital stock outstanding throughout each period:
Class A Shares (1) 1995(2) 1994 1993(3) 1992 1991 =================================================================================================================== Net Asset Value, Beginning of Period $10.15 $11.01 $10.66 $10.26 $8.30 - ------------------------------------------------------------------------------------------------------------------- Income (Loss) from Operations: Net investment income 0.10 0.16 0.15 0.18 0.18 Net realized and unrealized gain (loss) on investments 1.65 (0.24) 0.72 0.46 2.05 - ------------------------------------------------------------------------------------------------------------------- Total Income (Loss) From Operations 1.75 (0.08) 0.87 0.64 2.23 - ------------------------------------------------------------------------------------------------------------------- Less Distributions: Distributions from net investment income -- (0.18) (0.16) (0.15) (0.20) Distributions from capital gains -- (0.60) (0.36) (0.09) (0.07) - ------------------------------------------------------------------------------------------------------------------- Total Distributions -- (0.78) (0.52) (0.24) (0.27) - ------------------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $11.90 $10.15 $11.01 $10.66 $10.26 - ------------------------------------------------------------------------------------------------------------------- Total Return 17.24%++ (0.77)% 8.13% 6.29% 26.94% - ------------------------------------------------------------------------------------------------------------------- Net Assets, End of Period (000s) $1,822,681 $1,689,268 $1,579,248 $1,712,411 $1,752,884 - ------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets: Expenses 1.08%+ 1.02% 1.03% 0.88% 0.80% Net investment income 1.78+ 1.61 1.35 1.58 2.20 - ------------------------------------------------------------------------------------------------------------------- Portfolio Turnover Rate 20% 52% 52% 21% 19% ===================================================================================================================
(1) All shares in existence prior to November 6, 1992 were designated as Class A shares. (2) For the six months ended June 30, 1995 (unaudited). (3) Per share amounts have been calculated using the monthly average shares method, which more appropriately presents per share data for this year since the use of the undistributed income method did not accord with results of operations. ++ Not annualized as it may not be representative of the total return for the year. + Annualized. 21 Smith Barney Appreciation Fund Inc. - ------------------------------------------------------------------------------- Financial Highlights (continued) - ------------------------------------------------------------------------------- For a share of each class of capital stock outstanding throughout each period:
Class B Shares 1995(1) 1994 1993(2) 1992(2)(3) ============================================================================================================ Net Asset Value, Beginning of Period $10.14 $11.00 $10.65 $10.55 - ------------------------------------------------------------------------------------------------------------ Income (Loss) from Operations: Net investment income 0.05 0.13 0.06 0.01 Net realized and unrealized gain (loss) on investments 1.64 (0.29) 0.73 0.34 - ------------------------------------------------------------------------------------------------------------ Total Income (Loss) From Operations 1.69 (0.16) 0.79 0.35 - ------------------------------------------------------------------------------------------------------------ Less Distributions: Distributions from net investment income -- (0.10) (0.08) (0.16) Distributions from capital gains -- (0.60) (0.36) (0.09) - ------------------------------------------------------------------------------------------------------------ Total Distributions -- (0.70) (0.44) (0.25) - ------------------------------------------------------------------------------------------------------------ Net Asset Value, End of Period $11.83 $10.14 $11.00 $10.65 - ------------------------------------------------------------------------------------------------------------ Total Return 16.67%++ (1.53)% 7.38% 3.28%++ - ------------------------------------------------------------------------------------------------------------ Net Assets, End of Period (000s) $878,014 $761,000 $1,285,966 $1,122,249 - ------------------------------------------------------------------------------------------------------------ Ratios to Average Net Assets: Expenses 1.85%+ 1.80% 1.83% 1.82%+ Net investment income 1.01+ 0.83 0.56 0.64+ - ------------------------------------------------------------------------------------------------------------ Portfolio Turnover Rate 20% 52% 52% 21% ============================================================================================================
(1) For the six months ended June 30, 1995 (unaudited). (2) Per share amounts have been calculated using the monthly average shares method, which more appropriately presents per share data for this year since the use of the undistributed income method did not accord with results of operations. (3) For the period from November 6, 1992 (inception date) to December 31, 1992. ++ Not annualized as it may not be representative of the total return for the year. + Annualized. 22 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Financial Highlights (continued) - -------------------------------------------------------------------------------- For a share of each class of capital stock outstanding throughout each period:
Class C Shares 1995(1) 1994 1993(2)(3) ===================================================================================== Net Asset Value, Beginning of Period $10.14 $11.00 $10.99 - ------------------------------------------------------------------------------------- Income (Loss) from Operations: Net investment income 0.06 0.10 0.07 Net realized and unrealized gain (loss) on investments 1.64 (0.25) 0.38 - ------------------------------------------------------------------------------------- Total Income (Loss) From Operations 1.70 (0.15) 0.45 - ------------------------------------------------------------------------------------- Less Distributions: Distributions from net investment income -- (0.11) (0.08) Distributions from capital gains -- (0.60) (0.36) - ------------------------------------------------------------------------------------- Total Distributions -- (0.71) (0.44) - ------------------------------------------------------------------------------------- Net Asset Value, End of Period $11.84 $10.14 $11.00 - ------------------------------------------------------------------------------------- Total Return 16.77%++ (1.41)% 4.09%++ - ------------------------------------------------------------------------------------- Net Asset, End of Period (000s) $8,099 $5,040 $2,214 - ------------------------------------------------------------------------------------- Ratios to Average Net Assets: Expenses 1.86%+ 1.66% 1.68%+ Net investment income 0.97+ 0.98 0.71+ - ------------------------------------------------------------------------------------- Portfolio Turnover Rate 20% 52% 52% =====================================================================================
(1) For the six months ended June 30, 1995 (unaudited). (2) Per share amounts have been calculated using the monthly average shares method, which more appropriately presents per share data for this year since the use of the undistributed income method did not accord with results of operations. (3) For the period from February 4, 1993 (inception date) to December 31, 1993. ++ Not annualized as it may not be representative of the total return for the year. + Annualized. 23 Smith Barney Appreciation Fund Inc. - -------------------------------------------------------------------------------- Financial Highlights (continued) - -------------------------------------------------------------------------------- For a share of each class of capital stock outstanding throughout each period:
Class Z Shares 1995(1) 1994 1993(2) 1992(3) =========================================================================================================== Net Asset Value, Beginning of Period $10.16 $11.02 $10.66 $10.55 - ----------------------------------------------------------------------------------------------------------- Income (Loss) from Operations: Net investment income 0.12 0.20 0.19 0.03 Net realized and unrealized gain (loss) on investments 1.64 (0.24) 0.71 0.33 - ----------------------------------------------------------------------------------------------------------- Total Income (Loss) From Operations 1.76 (0.04) 0.90 0.36 - ----------------------------------------------------------------------------------------------------------- Less Distributions: Distributions from net investment income -- (0.22) (0.18) (0.16) Distributions from capital gains -- (0.60) (0.36) (0.09) - ----------------------------------------------------------------------------------------------------------- Total Distributions -- (0.82) (0.54) (0.25) - ----------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $11.92 $10.16 $11.02 $10.66 - ----------------------------------------------------------------------------------------------------------- Total Return 17.32%++ (0.41)% 8.47% 3.38%++ - ----------------------------------------------------------------------------------------------------------- Net Assets, End of Period (000s) $124,397 $101,532 $157,876 $151,427 - ----------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets: Expenses 0.82%+ 0.64% 0.66% 0.80%+ Net investment income 2.04+ 1.99 1.73 1.66+ - ----------------------------------------------------------------------------------------------------------- Portfolio Turnover Rate 20% 52% 52% 21% ===========================================================================================================
(1) For the six months ended June 30, 1995 (unaudited). (2) Per share amounts have been calculated using the monthly average shares method, which more appropriately presents per share data for this year since the use of the undistributed income method did not accord with results of operations. (3) For the period from November 6, 1992 (inception date) to December 31, 1992. ++ Not annualized as it may not be representative of the total return for the year. + Annualized. 24 Smith Barney Appreciation Fund Inc. Directors Herbert Barg Alfred Banchetti Martin Brody Dwight Crane Burt N. Dorsett Elliot S. Jaffe Stephen kaufman Joseph McCann Heath B. Mclendon, Chairman Cornelius C. Rose, Jr. Officers Heath B. McLendon Chief Executive Officer Jessica M. Bibliowicz President Lewis E. Daidone Senior Vice President and Treasurer Harry D. Cohen Vice President and Investment Officer Christina T. Sydor Secretary [LOGO OF SMITH BARNEY TRAVELERS GROUP APPEARS HERE] Investment Manager Smith Barney Mutual Funds Management Inc. Distributor Smith Barney Inc. Custodian PNC Bank Shareholder Servicing Agent The Shareholder Services Group, Inc. P.O. Box 9134 Boston, MA 02205-9134 This report is submitted for the general information of the shareholders of Smith Barney Appreciation Fund Inc. It is not authorized for distribution to prospective investors unless accompanied or preceded by an effective Prospectus for the Fund, which contains information concerning the Fund's investment policies and expenses as well as other pertinent information. Smith Barney Appreciation Fund Inc. 388 Greenwich Street New York, New York 10013 FD 0404 8/95 -----END PRIVACY-ENHANCED MESSAGE-----