UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-6506
Intermediate Muni Fund, Inc.
(Exact name of registrant as specified in charter)
125 Broad Street, New York, NY 10004
(Address of principal executive offices) (Zip code)
Robert I. Frenkel, Esq.
Smith Barney Fund Management LLC
300 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 451-2010
Date of fiscal year end: December 31
Date of reporting period: June 30, 2004
ITEM 1. REPORT TO STOCKHOLDERS.
The Semi-Annual Report to Stockholders is filed herewith.
INTERMEDIATE
MUNI FUND, INC.
Semi-Annual Report
June 30, 2004
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WHAT'S INSIDE
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Letter from the Chairman .................................................. 1
Schedule of Investments ................................................... 6
Statement of Assets and Liabilities ....................................... 17
Statement of Operations ................................................... 18
Statements of Changes in Net Assets ....................................... 19
Notes to Financial Statements ............................................. 20
Financial Highlights ...................................................... 24
Financial Data ............................................................ 26
Additional Shareholder Information ........................................ 27
Dividend Reinvestment Plan ................................................ 28
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LETTER FROM THE CHAIRMAN
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[PHOTO OMITTED]
R. JAY GERKEN, CFA
Chairman, President and
Chief Executive Officer
Dear Shareholder,
After a four-year period of monetary easing, which saw the Federal Reserve Bank
("Fed") steer the key federal funds target rate(i) down to a four-decade low of
one percent, the central bank reversed course in late June to what many
observers believe will be a protracted period of monetary tightening or steering
short-term interest rates higher. Higher interest rates can act as a brake on
robust economic growth to help maintain a balance between steady growth and the
inflation that generally accompanies that growth.
The Fed's increase in the federal funds rate to 1.25% at the end of June was
widely anticipated. Bond yields, particularly those on longer-maturity issues,
began moving up earlier this year as bond prices declined. Yields continued
their ascent as it became more evident that the improving economy and higher
inflation would compel the Fed to act in June. In particular, evidence of
renewed job growth - the one missing piece from the economic recovery - drove
rates higher beginning in the spring.
Intermediate-term municipal bonds, particularly those with 7-to-10 year
maturities, succumbed to more pricing pressure than 15-to-20 year issues, but
all these maturity classes held up better than bonds with longer maturities in
excess of 22 years.(ii) However, as the fund's portfolio manager, Peter Coffey,
explained in past letters to fund shareholders, the fund remained defensively
positioned to hold up better than the municipal bond market in the event of a
rising rate environment. In terms of Net Asset Value ("NAV")(iii) performance,
while the portfolio manager's investment approach reduced the fund's full
participation in the bond market's upside moves when bond prices rose, it
contributed to the fund's NAV returns by diminishing the downward pricing
pressures on the fund when bond prices declined, particularly in April and much
of May. The fund's performance also was influenced by isolated issue- and
sector-specific factors. From a credit-quality perspective, the portfolio
manager maintained a conservative posture targeting bonds in a diverse cross
section of market segments.
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Intermediate Muni Fund, Inc. 1
Fund Performance
The Intermediate Muni Fund, Inc. returned -6.57%, based on its American Stock
Exchange ("AMEX") market price and 0.44% based on its NAV per share during the
six-month period ended June 30, 2004. In comparison, the unmanaged, broad-based
Lehman Brothers Municipal Bond Index,(iv) returned -0.68% and the fund's Lipper
general muni debt (leveraged) closed-end funds category average(v) was -1.26%
over the same time frame. Please note that Lipper performance returns are based
on each fund's NAV. Also, the funds in this Lipper category generally are not
restricted to intermediate-term municipal securities and may hold more
market-sensitive, longer-term bonds.
During this six-month period, the fund distributed dividends to shareholders
totaling $0.31 per share. The performance table shows the fund's 30-day SEC and
annualized distribution yields as well as its six-month total return based on
its NAV and market price as of June 30, 2004. Certain investors may be subject
to the federal Alternative Minimum Tax ("AMT"), and state and local taxes may
apply. Capital gains, if any, are fully taxable. Please consult with your tax or
legal advisor. Past performance is no guarantee of future results. The fund's
yields will vary.
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FUND PERFORMANCE
AS OF JUNE 30, 2004
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Price 30-Day Annualized 6-Month
Per Share SEC Yield Distribution Yield Total Return
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$9.99 NAV 5.94% 6.13% 0.44%
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$9.23 AMEX 6.43% 6.63% -6.57%
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All figures represent past performance and are no guarantee of future results.
The fund's yields will vary.
Total returns are based on changes in NAV or market price, respectively. Total
returns assume the reinvestment of all dividends and/or capital gains
distributions, if any, in additional shares. Annualized distribution yield is
the fund's current monthly income dividend rate, annualized, and then divided by
the NAV or the market price noted in this report. The "SEC yield" is a return
figure often quoted by bond and other fixed-income mutual funds. This quotation
is based on the most recent 30-day (or one-month) period covered by the fund's
filings with the SEC. The yield figure reflects the dividends and interest
earned during the period after deduction of the fund's expenses for the period.
The annualized distribution yield assumes a current monthly income dividend rate
of $0.051 for 12 months. These yields are as of June 30, 2004 and are subject to
change.
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Considering that short-term rates are still hovering near four-decade lows, the
portfolio manager believes that prudence dictates maintaining a conservative
posture in managing the fund's exposure to interest rate risk while focusing on
pursuing competitive yields.
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2 2004 Semi-Annual Report
Information About Your Fund
In recent months several issues in the mutual fund industry have come under the
scrutiny of federal and state regulators. The fund's Adviser and some of its
affiliates have received requests for information from various government
regulators regarding market timing, late trading, fees, and other mutual fund
issues in connection with various investigations. The fund has been informed
that the Adviser and its affiliates are responding to those information
requests, but are not in a position to predict the outcome of these requests and
investigations.
In November 2003, Citigroup Asset Management disclosed an investigation by the
Securities and Exchange Commission ("SEC") and the U.S. Attorney relating to
Citigroup Asset Management's entry into the transfer agency business during
1997-1999. On July 20, 2004, Citigroup disclosed that it had been notified by
the Staff of the SEC that the Staff is considering recommending a civil
injunctive action and/or an administrative proceeding against certain advisory
and transfer agent entities affiliated with Citigroup relating to the creation
and operation of its internal transfer agent unit to serve primarily the Smith
Barney family of mutual funds. This internal transfer agent did not provide
services to the fund. Citigroup is cooperating with the SEC and will seek to
resolve this matter in discussion with the SEC Staff. Although there can be no
assurance, Citigroup does not believe that this matter will have a material
adverse effect on the fund.
Looking for Additional Information?
The fund is traded under the symbol "SBI" and its closing market price is
available in most newspapers under the AMEX listings. The daily NAV is available
on-line under symbol XSBIX. Barron's and The Wall Street Journal's Monday
editions carry closed-end fund tables that will provide additional information.
In addition, the fund issues a quarterly press release that can be found on most
major financial websites as well as www.citigroupassetmanagement.com.
In a continuing effort to provide information concerning the fund, shareholders
may call 1-888-735-6507, Monday through Friday from 8:00 a.m. to 6:00 p.m.
Eastern Time, for the fund's current net asset value, market price, and other
information regarding the fund's portfolio holdings and allocations.
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Intermediate Muni Fund, Inc. 3
Thank you for your investment in the Intermediate Muni Fund, Inc. We appreciate
that you have entrusted us to manage your money and value our relationship with
you.
Sincerely,
/s/ R. Jay Gerken
R. Jay Gerken, CFA
Chairman, President and Chief Executive Officer
July 22, 2004
The information provided is not intended to be a forecast of future events, a
guarantee of future results or investment advice. Views expressed may differ
from those of the firm as a whole.
Portfolio holdings and breakdowns are as of June 30, 2004 and are subject to
change and may not be representative of the portfolio manager's current or
future investments. Please refer to pages 6 through 14 for a list and percentage
breakdown of the fund's holdings.
All index performance reflects no deduction for fees, expenses or taxes. Please
note that an investor cannot invest directly in an index.
RISKS: Keep in mind the fund's investments are subject to interest rate and
credit risks. Lower-rated, higher-yielding bonds, known as "junk bonds", are
subject to greater credit risk, including the risk of default, than higher-rated
obligations. The fund may use derivatives, such as options and futures, which
can be illiquid, may disproportionately increase losses, and have a potentially
large impact on fund performance.
As interest rates rise, bond prices fall, reducing the value of the fund's share
price.
Dividends and yields fluctuate and are subject to change. Yields and dividends
represent past performance and there is no guarantee they will continue to be
paid. Please be advised that not all dividends declared by our funds will
qualify for lower tax rates under the recent tax law changes. Please consult
your tax or legal advisor.
U.S. Treasuries are direct debt obligations issued and backed by the "full faith
and credit" of the U.S. government. The principal and interest payments on U.S.
Treasuries are guaranteed by the U.S. government when the securities are held to
maturity.
(i) The federal funds rate is the interest rate that banks with excess
reserves at a Federal Reserve district bank charge other banks that need
overnight loans.
(ii) Source: Based upon Lehman Brothers index performance data for each
respective maturity category of municipal bonds.
(iii) NAV is calculated by subtracting total liabilities and outstanding
preferred stock from the closing value of all securities held by the fund
(plus all other assets) and dividing the result (total net assets) by the
total number of the common shares outstanding. The NAV fluctuates with
changes in the market prices of securities in which the fund has invested.
However, the price at which an investor may buy or sell shares of the fund
is at the fund's market price as determined by supply of and demand for
the fund's shares.
(iv) The Lehman Brothers Municipal Bond Index is a broad measure of the
municipal bond market with maturities of at least one year.
(v) Lipper is a major independent mutual fund tracking organization. Average
annual returns are based on the six-month period ended June 30, 2004,
calculated among 65 funds in the Lipper general muni debt (leveraged)
closed-end funds category with reinvestment of dividends and capital
gains.
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4 2004 Semi-Annual Report
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Take Advantage of the Fund's Dividend Reinvestment Plan!
As an investor in the Fund, you can participate in its Dividend Reinvestment
Plan ("Plan"), a convenient, simple and efficient way to reinvest your dividends
and capital gains distributions, if any, in additional shares of the Fund. Below
is a short summary of how the Plan works.
Plan Summary
If you are a Plan participant who has not elected to receive your dividends in
the form of a cash payment, then your dividend and capital gain distributions
will be reinvested automatically in additional shares of the Fund.
The number of common stock shares in the Fund you will receive in lieu of a cash
dividend is determined in the following manner. If the market price of the
common stock is equal to or exceeds the net asset value per share ("NAV") on the
determination date, you will be issued shares by the Fund at a price reflecting
the NAV, or 95% of the market price, whichever is greater.
If the market price is less than the NAV at the time of valuation (the close of
business on the determination date), PFPC Inc. ("Plan Agent") will buy common
stock for your account in the open market.
If the Plan Agent begins to purchase additional shares in the open market and
the market price of the shares subsequently rises above the previously
determined NAV before the purchases are completed, the Plan Agent will attempt
to terminate purchases and have the Fund issue the remaining dividend or
distribution in shares at the greater of the previously determined NAV or 95% of
the market price. In that case, the number of Fund shares you receive will be
based on the weighted average of prices paid for shares purchased in the open
market and the price at which the Fund issues the remaining shares.
A more complete description of the current Plan appears in the section of this
report beginning on page 28. To find out more detailed information about the
Plan and about how you can participate, please call PFPC Inc. at (800) 331-1710.
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Intermediate Muni Fund, Inc. 5
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Schedule of Investments (unaudited) June 30, 2004
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FACE
AMOUNT RATING(a) SECURITY VALUE
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Education -- 16.3%
$ 3,000,000 AAA Alabama State Public School & College Authority Revenue,
5.125% due 11/1/15 $ 3,165,510
1,000,000 A2* Arizona Educational Loan Marketing Corp., Educational Loan
Revenue, Sub-Series, 6.625% due 9/1/05 (b) 1,005,970
1,000,000 Aaa* Athens, GA Housing Authority, Student Housing Lease Revenue,
(University of Georgia - East Campus Project),
AMBAC-Insured, 5.250% due 12/1/23 1,032,860
800,000 AAA Ball State, University of Indiana, University Revenue, Series K,
FGIC-Insured, 5.750% due 7/1/20 867,712
Colorado Educational and Cultural Facilities Authority Revenue,
Charter School:
1,000,000 Baa3* Community Education Center, (Bromley East Project A),
7.000% due 9/15/20 1,021,910
500,000 Baa2* University Lab School Project, 6.125% due 6/1/21 500,380
970,000 AAA Conneaut, PA School District, AMBAC-Insured,
9.500% due 5/1/12+ 1,193,187
2,895,000 AAA Fulton County, GA Development Authority Revenue,
Georgia Tech Athletic Association, 5.500% due 10/1/17 (c) 3,165,190
Greenville County, SC School District, Installment Purchase
Revenue, (Building Equity Sooner for Tomorrow Project):
2,000,000 AA- 5.875% due 12/1/19 (c) 2,164,880
2,000,000 AA- 6.000% due 12/1/21 (c) 2,179,120
1,855,000 Aaa* Highland, OH Local School District, FSA-Insured,
5.750% due 12/1/19 2,059,903
500,000 BBB Illinois Development Finance Authority Revenue, (Chicago
Charter School Foundation Project A), 5.250% due 12/1/12 507,440
1,000,000 AAA Jenison, MI Public Schools, FGIC-Insured, 5.500% due 5/1/20 1,072,730
500,000 NR Los Angeles, CA School District, MBIA-Insured,
9.058% due 7/1/18 571,720
500,000 A Massachusetts State Development Finance Agency Revenue,
Curry College, Series A, ACA-Insured, 6.000% due 3/1/20 516,685
1,450,000 AAA Morgan Hill, CA School District, FGIC-Insured,
5.750% due 8/1/17 (c) 1,595,261
NebHELP Inc. Revenue, NE, MBIA-Insured:
1,000,000 Aaa* Jr. Sub-Series A-6, 6.450% due 6/1/18 (b)(c) 1,035,270
1,800,000 Aaa* Sr. Sub-Series A-5A, 6.200% due 6/1/13 (b)(c) 1,874,790
500,000 A3* New England Education Loan Marketing Corp., MA Student
Loan Revenue, Sub-Issue H, 6.900% due 11/1/09 (b) 558,920
630,000 A New Mexico Educational Assistance Foundation, Student Loan
Revenue, First Sub-Series A-2, 5.950% due 11/1/07 (b) 651,924
1,000,000 AAA Philadelphia, PA School District, Series A, FSA-Insured,
5.500% due 2/1/23 1,053,030
1,350,000 AAA Pittsburgh, PA School District, FSA-Insured,
5.375% due 9/1/16 (c) 1,488,861
1,000,000 AAA Southwest Higher Education Authority Inc., TX, (Southern
Methodist University Project), AMBAC-Insured,
5.500% due 10/1/19 1,081,700
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30,364,953
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See Notes to Financial Statements.
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6 2004 Semi-Annual Report
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Schedule of Investments (unaudited) (continued) June 30, 2004
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FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================================
General Obligation -- 9.3%
$ 500,000 AAA Anchorage, AK GO, Refunding, FGIC-Insured,
6.000% due 10/1/14 $ 576,920
1,000,000 AA Central Falls, RI GO, 5.875% due 5/15/15 1,104,570
1,000,000 AA Harvey, IL GO, Refunding, 6.700% due 2/1/09 (c) 1,034,190
1,310,000 AAA Kane County, IL GO, FGIC-Insured, 5.500% due 1/1/14 1,470,501
1,130,000 Aaa* Lancaster, MA GO, AMBAC-Insured, 5.375% due 4/15/17 1,212,953
1,500,000 AAA Massachusetts State GO, MBIA-Insured, FLAIRS,
9.285% due 5/1/09 (d) 1,861,680
1,000,000 Aaa* Memphis, MI GO, FGIC-Insured, 5.150% due 5/1/19 1,033,940
2,400,000 Aa2* Minnehaha County, SD GO, Limited Tax Certificates,
5.625% due 12/1/20 (c) 2,576,232
2,000,000 AAA Montgomery County, MD GO, Refunding,
5.250% due 10/1/14 (c) 2,185,120
3,010,000 AA+ Ohio State GO, (Conservation Projects), Series A,
5.250% due 9/1/13 (c) 3,260,613
1,000,000 AAA Saraland, AL GO, MBIA-Insured, 5.250% due 1/1/15 1,071,410
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17,388,129
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Hospital -- 23.9%
170,000 AAA Anderson County, SC Hospital Facilities Revenue,
7.125% due 8/1/07+ 181,815
1,500,000 BBB- Arkansas State Development Finance Authority, Hospital
Revenue, Washington Regional Medical Center,
7.000% due 2/1/15 1,635,075
334,127 AAA Birmingham, AL Medical Clinic Board Revenue,
Baptist Medical Centers, 8.300% due 7/1/08+ 370,427
650,000 AAA Calcasieu Parish, LA Memorial Hospital Service District
Hospital Revenue, (Lake Charles Memorial Hospital Project),
Series A, CONNIE LEE-Insured, 7.500% due 12/1/05 696,189
1,160,000 NR California Statewide COP, Community Development Authority
Revenue Refunding, Hospital Triad Healthcare,
(Pre-Refunded-- Escrowed with state and local government
securities to 8/1/04 Call @ 100), 6.250% due 8/1/06 1,206,957
650,000 A- Chatham County, GA Hospital Authority Revenue, Memorial
Health Medical Center, Series A, 6.000% due 1/1/17 685,796
2,000,000 AA Connecticut State Health & Educational Facilities Authority
Revenue, Bristol Hospital, Series B, 5.500% due 7/1/21 2,119,300
1,770,000 BBB Cuyahoga County, OH Hospital Facility Revenue, (Canton Inc.
Project), 6.750% due 1/1/10 1,927,619
710,000 BBB Denver, CO Health & Hospital Authority Healthcare Revenue,
Series A, 6.250% due 12/1/16 722,553
1,000,000 AAA Harris County, TX Hospital District Revenue Refunding,
MBIA-Insured, 6.000% due 2/15/15 (c) 1,112,540
2,000,000 BBB+ Hawaii State Department of Budget & Finance, Special Purpose
Revenue, Kapiolani Health Care System, 6.400% due 7/1/13 2,025,520
1,220,000 BBB+ Henderson, NV Health Care Facility Revenue, Catholic
Healthcare West, Series A, 6.200% due 7/1/09 1,341,390
See Notes to Financial Statements.
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Intermediate Muni Fund, Inc. 7
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Schedule of Investments (unaudited) (continued) June 30, 2004
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FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================================
Hospital -- 23.9% (continued)
Illinois Health Facilities Authority Revenue:
$ 625,000 AAA Methodist Medical Center Project, 9.000% due 10/1/10+ $ 735,544
750,000 AAA Ravenswood Hospital Medical Center Project,
7.250% due 8/1/06+ 792,368
1,300,000 BBB Illinois Health Facilities Authority Revenue Refunding,
Friendship Village of Schaumburg, 6.650% due 12/1/06 1,305,655
1,000,000 A1* Iowa Finance Authority Health Care Facilities Revenue,
Genesis Medical Center, 6.250% due 7/1/20 1,038,840
1,200,000 BBB Klamath Falls, OR Intercommunity Hospital Authority Revenue,
(Merle West Medical Center Project), 8.000% due 9/1/08+ 1,341,504
Lake County, OH Hospital Improvement Revenue:
290,000 AAA Lake County Memorial Hospital Project, 8.625% due 11/1/09+ 334,599
155,000 NR Ridgecliff Hospital Project, 8.000% due 10/01/09+ 176,261
1,625,000 NR Lee Memorial Health System Board of Directors, FL Hospital
Revenue, FSA-Insured, FLAIRS, 10.238% due 4/1/10 (d) 1,968,135
405,000 NR Lees Summit, MO IDA, Health Facilities Revenue, (John Knox
Village Project), 5.750% due 8/15/11 433,200
270,000 AAA Lima, OH Hospital Revenue, St. Rita Hospital of Lima,
7.500% due 11/1/06+ 288,244
15,000 NR Loma Linda, CA Community Hospital Corporation Revenue,
8.000% due 12/1/08 17,860
1,150,000 NR Los Angeles, CA COP, Hollywood Presbyterian Medical Center,
9.625% due 7/1/13+ 1,474,530
150,000 AAA Louisiana Public Facilities Authority Hospital Revenue
Refunding, (Southern Baptist Hospital Inc. Project),
8.000% due 5/15/12+ 177,461
330,000 AAA Madison County, IN Industrial Hospital Authority Facilities
Revenue, (Community Hospital of Anderson Project),
9.250% due 1/1/10+ 389,149
Maricopa County, AZ Hospital Revenue:
180,000 AAA Samaritan Health Service, 7.625% due 1/1/08 194,882
784,000 AAA St. Luke's Hospital Medical Center Project,
8.750% due 2/1/10+ 916,653
1,000,000 AAA Maryland State Health & Higher Education Facilities Authority
Revenue Refunding, (Mercy Medical Center Project),
FSA-Insured, 6.500% due 7/1/13 1,164,730
370,000 AAA Massachusetts State Development Finance Agency Revenue,
Series A, GNMA-Collateralized, 6.700% due 10/20/21 416,731
Massachusetts State Health & Educational Facilities Authority
Revenue:
Caritas Christi Obligation, Series B:
2,000,000 BBB 6.500% due 7/1/12 2,194,140
835,000 BBB 6.750% due 7/1/16 906,008
1,000,000 BBB- Milford-Whitinsville Regional Hospital, Series D,
6.500% due 7/15/23 1,023,940
1,000,000 BBB Winchester Hospital, Series E, 6.750% due 7/1/30 1,046,920
1,190,000 AAA Massachusetts State Industrial Finance Agency, Assisted Living
Facility Revenue, (Arbors at Amherst Project),
GNMA-Collateralized, 5.750% due 6/20/17 (b) 1,291,019
See Notes to Financial Statements.
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8 2004 Semi-Annual Report
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2004
--------------------------------------------------------------------------------
FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================================
Hospital -- 23.9% (continued)
$ 1,000,000 A Michigan State Hospital Finance Authority Revenue, Oakwood
Obligated Group, 5.500% due 11/1/18+ $ 1,031,170
915,000 A- New Hampshire Health & Educational Facilities Authority
Revenue, Covenant Healthcare System, 6.500% due 7/1/17 993,617
1,135,000 NR New York City, NY IDA, Civic Facilities Revenue Refunding,
(New York Community Hospital Brooklyn),
6.875% due 11/1/10 (c) 1,143,115
2,000,000 B- Oklahoma Developmental Finance Authority Revenue
Refunding, Hillcrest Healthcare System, Series A,
5.625% due 8/15/19 (c) 2,020,000
Orange County, FL Health Facilities Authority Revenue:
Adventist Health Care:
1,500,000 A 6.250% due 11/15/24 1,600,320
630,000 AAA Southern Adventist Hospital Project, 8.750% due 10/1/09+ 728,639
785,000 NR First Mortgage, Health Care Facilities, 8.750% due 7/1/11 783,367
Philadelphia, PA Hospitals Authority Revenue:
125,000 AAA Thomas Jefferson University Hospital, 7.000% due 7/1/08+ 135,941
535,000 Aaa* United Hospital Inc. Project, (Call 7/1/05 @ 100),
10.875% due 7/1/08 (e) 573,028
1,000,000 NR Rainbow City, AL Special Health Care Facilities Financing
Authority, (Regency Pointe Inc.), Series B,
7.250% due 1/1/06 (c) 1,003,460
130,000 AAA San Leandro, CA Hospital Revenue, Vesper Memorial Hospital,
AMBAC-Insured, 11.500% due 5/1/11+ 170,459
340,000 Aaa* Tarrant County, TX Hospital Authority Revenue, Adventist
Health System-Sunbelt, 10.250% due 10/1/10 416,915
255,000 NR Tom Green County, TX Hospital Authority, 7.875% due 2/1/06+ 270,450
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44,524,035
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Housing: Multi-Family -- 3.8%
1,000,000 A3* Bexar County, TX Housing Finance Corp., Multi-Family Housing
Revenue Refunding, Nob Hill Apartments, Series A,
6.000% due 6/1/21 1,012,300
285,000 AAA Charlotte, NC Mortgage Revenue Refunding, Double Oaks
Apartments, Series A, FHA-Insured, 7.300% due 11/15/07 304,374
490,000 Baa1* Dallas, TX Housing Corp., Capital Projects Refunding,
7.700% due 8/1/05 492,215
El Paso County, TX Housing Finance Corp., Multi-Family
Housing Revenue:
360,000 A3* American Village Communities, Series A,
6.250% due 12/1/24 363,247
280,000 Baa3* La Plaza Apartments, Sub-Series C, 8.000% due 7/1/30 280,728
585,000 AAA Grand Prairie, TX Housing Finance Corp., Multi-Family
Housing Revenue, (Landings of Carrier Project A),
GNMA-Collateralized, 6.650% due 9/20/22 (c) 645,764
1,175,000 A3* Lubbock, TX Housing Finance Corp., Multi-Family Housing
Revenue, (Las Colinas Quality Creek Apartments),
6.000% due 7/1/22 1,183,871
See Notes to Financial Statements.
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Intermediate Muni Fund, Inc. 9
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2004
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FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================================
Housing: Multi-Family -- 3.8% (continued)
$ 500,000 Aaa* Maricopa County, AZ IDA, Multi-Family Housing Revenue,
(Bay Club at Mesa Cove Project), Series A, MBIA-Insured,
5.700% due 9/1/20 $ 499,955
530,000 A2* McMinnville, TN Housing Authority Revenue Refunding,
First Mortgage, Beersheba Heights, 6.000% due 10/1/09 561,853
Mount Vernon, IL Elderly Housing Corp., First Lien Revenue:
215,000 Ba3* 7.875% due 4/1/05 215,185
235,000 Ba3* 7.875% due 4/1/06 235,153
250,000 Ba3* 7.875% due 4/1/07 250,180
270,000 Ba3* 7.875% due 4/1/08 270,162
Tarrant County, TX Housing Finance Corp. Revenue,
Multi-Family Housing, Westridge:
100,000 Ba3* Sr. Series A, 6.000% due 6/1/21 82,408
470,000 Caa1* Sub-Series C, 8.500% due 6/1/31 347,166
430,000 BBB Tulsa, OK Housing Assistance Corp., Multi-Family Revenue,
7.250% due 10/1/07 (b) 430,103
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7,174,664
----------------------------------------------------------------------------------------------------------
Housing: Single-Family -- 0.9%
135,000 AAA Cabell, Putnam & Wayne Counties, WV Single-Family
Residence Mortgage Revenue, FGIC-Insured,
7.375% due 4/1/10 152,727
5,000 AA Juneau, AK City & Borough Home Mortgage Revenue
Refunding, Mortgage-Backed Securities Program,
FNMA-Collateralized, 8.000% due 2/1/09 5,023
395,000 AA Massachusetts State Housing Finance Agency, Single-Family
Housing Revenue, Series 38, 7.200% due 12/1/26 (b) 404,551
95,000 AAA Missouri State Housing Development Community Mortgage
Revenue, Series C, GNMA/FNMA-Collateralized,
7.450% due 9/1/27 (b) 97,606
145,000 AAA Pima County, AZ IDA, Single-Family Mortgage Revenue,
Series A, GNMA/FNMA/FHLMC-Collateralized,
7.100% due 11/1/29 (b) 153,204
295,000 NR San Leandro, CA Redevelopment Agency, Residential
Mortgage Revenue, (Call 10/1/04 @ 100),
11.250% due 4/1/13 (e) 301,626
85,000 AAA St. Louis County, MO Single-Family Mortgage Revenue,
MBIA-Insured, 6.750% due 4/1/10 88,459
375,000 AAA Texas State Department of Housing and Community Affairs,
Home Mortgage Revenue, RIBS, Series C-2, GMNA/FNMA/
FHLMC-Collateralized, 11.822% due 7/2/24 (b)(d) 391,170
----------------------------------------------------------------------------------------------------------
1,594,366
----------------------------------------------------------------------------------------------------------
Industrial Development -- 5.5%
1,000,000 NR Alaska Industrial Development & Export Authority Revenue,
Williams Lynxs Alaska Cargoport, 8.000% due 5/1/23 (b) 1,027,850
535,000 NR Bourbonnais, IL IDR Refunding, (Kmart Corp. Project),
6.600% due 10/1/06 (f) 107,000
See Notes to Financial Statements.
--------------------------------------------------------------------------------
10 2004 Semi-Annual Report
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2004
--------------------------------------------------------------------------------
FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================================
Industrial Development -- 5.5% (continued)
$ 2,000,000 BBB LaCrosse, WI Resource Recovery Revenue Refunding,
(Northern States Power Co. Project),
6.000% due 11/1/21 (b) $ 1,999,800
1,365,000 AA Northampton County, PA IDA Revenue, (Moravian Hall Square
Project), 5.500% due 7/1/19 (c) 1,429,687
55,000 AAA Oklahoma State Industrial Authority Revenue, Oklahoma Health
Care Corp., Series A, FGIC-Insured, (Call 5/1/07 @ 100),
9.125% due 11/1/08 (e) 62,291
1,000,000 AAA Pennsylvania State IDR, Economic Development Revenue,
AMBAC-Insured, 5.500% due 7/1/21 1,072,470
1,000,000 B2* Rockbridge County, VA IDA Revenue, Virginia Horse Center,
Series C, 6.850% due 7/15/21 920,970
795,000 A South Dakota Economic Development Finance Authority,
Economic Development Revenue, APA Optics, Series A,
6.750% due 4/1/16 (b) 843,741
1,280,000 NR Suffolk County, NY IDA, Civic Facility Revenue, (Eastern Long
Island Hospital Association Project A), 7.750% due 1/1/22 1,290,240
1,500,000 NR Wasco County, OR Solid Waste Disposal Revenue, (Waste
Connections Inc. Project), 7.000% due 3/1/12 (b) 1,566,510
----------------------------------------------------------------------------------------------------------
10,320,559
----------------------------------------------------------------------------------------------------------
Miscellaneous -- 8.1%
1,500,000 NR Barona Band of Mission Indians, CA, 8.250% due 1/1/20 1,596,795
1,860,000 Aaa* Broomfield, CO COP, Open Space Park & Recreational
Facilities, AMBAC-Insured, 5.500% due 12/1/20 1,978,333
3,000,000 AA- California State Economic Recovery, Series A,
5.000% due 7/1/17 3,103,590
1,260,000 BBB District of Columbia, Tobacco Settlement Financing Corp.,
6.250% due 5/15/24 1,143,034
745,000 A Illinois Development Finance Authority Revenue,
East St. Louis, 6.875% due 11/15/05 770,844
1,690,000 AAA Monroe, LA Sales & Use Tax Revenue, FGIC-Insured,
5.625% due 7/1/25 (c) 1,789,947
1,000,000 NR Oglala Sioux Tribe, SD Essential Government Revenue,
5.500% due 7/1/13 995,790
1,500,000 BBB+ Puerto Rico Housing Bank & Finance Agency,
7.500% due 12/1/06 (c) 1,614,030
2,000,000 AA- Tobacco Settlement Financing Corp., NY, Series C-1,
5.500% due 6/1/14 2,104,980
----------------------------------------------------------------------------------------------------------
15,097,343
----------------------------------------------------------------------------------------------------------
Pollution Control -- 3.4%
2,000,000 Aa3* Brazos River, TX Harbor Navigation District, Brazoria
County, PCR, (BASF Corp. Project), 6.750% due 2/1/10 2,309,860
1,000,000 AAA Monroe County, MI PCR, (Detroit Edison Co. Project),
Series A, AMBAC-Insured, 6.350% due 12/1/04 (b)(c) 1,018,520
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Intermediate Muni Fund, Inc. 11
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2004
--------------------------------------------------------------------------------
FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================================
Pollution Control -- 3.4% (continued)
$ 2,000,000 BB+ Ohio State Air Quality Development Authority Revenue,
Pollution Control, (Cleveland Electric Illuminating Co.
Project), 6.000% due 12/1/13 (c) $ 2,054,040
1,000,000 BB+ Warren, AR Solid Waste Disposal Revenue, (Potlatch Corp.
Project), 7.000% due 4/1/12 1,023,180
----------------------------------------------------------------------------------------------------------
6,405,600
----------------------------------------------------------------------------------------------------------
Public Facilities -- 1.5%
De Kalb County, IN Industrial Redevelopment Authority
Revenue, (Mini-Mill Local Public Improvement Project),
Series A:
1,000,000 A- 6.250% due 1/15/08 1,034,500
1,350,000 A- 6.250% due 1/15/09 1,400,625
400,000 Aaa* Sevier County, TN Public Building Authority, Local
Government Public Improvement, 1.080% due 6/1/20 400,000
----------------------------------------------------------------------------------------------------------
2,835,125
----------------------------------------------------------------------------------------------------------
Transportation -- 11.9%
2,120,000 AAA Atlanta, GA Metropolitan Rapid Transit Authority, Sales Tax
Revenue, Series E, 7.000% due 7/1/11+ 2,500,349
1,500,000 AAA Chicago, IL O'Hare International Airport Revenue, Lien A-2,
5.750% due 1/1/19 (c) 1,593,465
1,855,000 A Connecticut State Special Obligation, Parking Revenue,
Bradley International Airport, Series A, ACA-Insured,
6.375% due 7/1/12 (b) 1,973,609
1,500,000 AAA Connecticut State Special Tax Obligation Revenue,
FSA-Insured, FLAIRS, 9.576% due 10/1/09 (d) 1,774,500
5,000,000 B- Connector 2000 Association, SC Toll Road Revenue,
Capital Appreciation, Series B, zero coupon due 1/1/15 1,450,050
2,000,000 AAA Dallas, TX Area Rapid Transit Sales Tax Revenue, Sr. Lien,
AMBAC-Insured, 5.375% due 12/1/16 (c) 2,150,740
1,500,000 CCC Dallas/Fort Worth, TX International Airport Facility,
Improvement Corp. Revenue Refunding, American
Airlines Inc., Series C, 6.150% due 5/1/29, mandatory
tender 11/1/07 (b)(c) 1,280,250
1,855,000 AAA Delaware River, Port Authority of Pennsylvania & New Jersey,
FSA-Insured, FLAIRS, 9.775% due 1/1/10 (d) 2,216,947
1,000,000 Aaa* Harrisburg, PA Parking Authority, Parking Revenue,
FSA-Insured, 5.500% due 5/15/20 (c) 1,069,610
2,505,000 AAA Hillsborough County, Florida Aviation Authority Revenue,
Tampa International Airport, Series C, 5.000% due 10/1/17 2,589,068
250,000 AAA Lee County, FL Southwest Florida Regional Airport Revenue,
MBIA-Insured, 8.625% due 10/1/09+ 288,500
145,000 AAA Metropolitan Nashville, TN Airport Authority Tennessee
Airport Revenue, MBIA-Insured, 7.500% due 7/1/05+ 148,629
4,595,000 BB Pocahontas Parkway Association, VA Toll Road Revenue,
Capital Appreciation, Series B, zero coupon due 8/15/19 (c) 1,429,459
235,000 AAA San Francisco, CA Airport Improvement Corp. Lease Revenue,
United Airlines Inc., 8.000% due 7/1/13+ 282,120
See Notes to Financial Statements.
--------------------------------------------------------------------------------
12 2004 Semi-Annual Report
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2004
--------------------------------------------------------------------------------
FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================================
Transportation -- 11.9% (continued)
$ 595,000 NR Sanford, FL Airport Authority IDR, (Central Florida
Terminals Inc. Project A), 7.500% due 5/1/06 (b) $ 457,531
Tulsa, OK Municipal Airport Revenue Refunding, American
Airlines, Series B:
500,000 B- 6.000% due 6/1/35, mandatory tender 12/1/08 (b) 464,500
500,000 B- 5.650% due 12/1/35, mandatory tender 12/1/08 (b) 458,450
----------------------------------------------------------------------------------------------------------
22,127,777
----------------------------------------------------------------------------------------------------------
Utilities -- 4.0%
1,000,000 BBB Burlington, KS Environmental Improvement Revenue,
(Kansas City Power & Light Project), 4.750% due 9/1/15 1,033,550
2,000,000 AAA Energy Northwest Washington Electric Revenue,
(Project No. 3), Series A, FSA-Insured,
5.500% due 7/1/18 (c) 2,127,400
500,000 A Georgia Municipal Electric Authority, Power System Revenue,
Series X, 6.500% due 1/1/12 (c) 566,000
1,000,000 AAA Griffin, GA Combined Public Utility Revenue, AMBAC-Insured,
5.000% due 1/1/21 (c) 1,024,610
1,000,000 BBB North Carolina Eastern Municipal Power Agency, Power
System Revenue, Series D, 6.450% due 1/1/14 (c)+ 1,100,670
1,390,000 AAA North Carolina Municipal Power Agency No. 1, Catawba
Electricity Revenue, 10.500% due 1/1/10 (c) 1,699,817
----------------------------------------------------------------------------------------------------------
7,552,047
----------------------------------------------------------------------------------------------------------
Water & Sewer -- 11.4%
1,045,000 AAA Boston, MA Water & Sewer Community Revenue, (Escrowed to
maturity with state and local government securities),
10.875% due 1/1/09 1,252,662
1,445,000 AA- Charleston, SC Waterworks & Sewer Revenue,
5.250% due 1/1/16 1,536,815
2,000,000 AA+ Chicago, IL Metropolitan Water Reclamation District, Capital
Improvement, Series A, (Escrowed with state and local
government securities to 12/1/12 Call @ 101),
5.500% due 12/1/14+ 2,247,900
1,370,000 AAA Cleveland, OH Waterworks Revenue, Series K, FGIC-Insured,
5.250% due 1/1/21 1,429,376
1,000,000 AAA El Paso, TX Water and Sewer Revenue Refunding and
Improvement, Series A, FSA-Insured, 6.000% due 3/1/15 1,140,570
2,000,000 AA Fort Worth, TX Water and Sewer Revenue,
5.625% due 2/15/17 (c)+ 2,182,520
1,000,000 AAA Gainesville, GA Water & Sewer Revenue, FSA-Insured,
5.375% due 11/15/20 (c) 1,056,160
600,000 AAA Jackson, TN Water and Sewer Revenue, 7.200% due 7/1/12 685,632
Ohio State Water Development Authority Revenue:
2,660,000 AAA 9.375% due 12/1/10 (c)(g)+ 3,121,244
465,000 AAA Safe Water, Series III, 9.000% due 12/1/10 528,677
2,000,000 AAA Philadelphia, PA Water & Wastewater Revenue, Series B,
FGIC-Insured, 5.250% due 11/1/14 2,172,380
1,765,000 AAA Pueblo, CO Bridge Waterworks, Water Revenue Improvement,
Series A, FSA-Insured, 6.000% due 11/1/14 (c) 1,998,157
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Intermediate Muni Fund, Inc. 13
--------------------------------------------------------------------------------
Schedule of Investments (unaudited) (continued) June 30, 2004
--------------------------------------------------------------------------------
FACE
AMOUNT RATING(a) SECURITY VALUE
==========================================================================================================
Water & Sewer -- 11.4% (continued)
$ 190,000 AAA Ringwood Borough, NJ Sewer Authority Special Obligation,
9.875% due 7/1/13 $ 239,305
Spanish Fork City, UT Water Revenue, FSA-Insured:
350,000 Aa* Call 6/1/12 @ 100, 5.500% due 6/1/16 (e) 392,560
1,135,000 Aa* Unrefunded, 5.500% due 6/1/16 1,234,903
----------------------------------------------------------------------------------------------------------
21,218,861
----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $182,198,610**) $186,603,459
==========================================================================================================
(a) All ratings are by Standard & Poor's Ratings Service, except for those
that are identified by an asterisk (*), which are rated by Moody's
Investors Service.
(b) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(c) All or a portion of this security is segregated for open futures
contracts.
(d) Inverse floating rate security -- coupon varies inversely with level of
short-term tax-exempt interest rates.
(e) Pre-Refunded bonds are escrowed with U.S. government securities and are
considered by the Manager to be triple-A rated even if the issuer has not
applied for new ratings.
(f) Security is currently in default.
(g) All or a portion of this security is held as collateral for open futures
contracts.
+ Bonds are escrowed to maturity with U.S. government securities and are
considered by the Manager to be triple-A rated even if the issuer has not
applied for new ratings.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 15 and 16 for definitions of ratings and certain abbreviations.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
14 2004 Semi-Annual Report
--------------------------------------------------------------------------------
Bond Ratings (unaudited)
--------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings Service ("Standard & Poor's") -- Ratings from "AA" to
"CCC" may be modified by the addition of a plus (+) or a 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 it normally exhibits
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 debt in this
category than in higher rated categories.
BB, B -- Bonds rated "BB", "B", "CCC" and "CC" are regarded, on balance, as
CCC and CC predominantly speculative and with respect to capacity to pay
interest and repay principal in accordance with the terms of the
obligation. "BB" represents a lower degree of speculation than
"B", and "CC" the highest degree of speculation. While such bonds
will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
Moody's Investors Service ("Moody's") -- Numerical modifiers 1, 2, and 3 may be
applied to each generic rating from "Aa" to "Caa", where 1 is the highest and 3
the lowest rating within its generic category.
Aaa -- Bonds rated "Aaa" are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred
to as "gilt edge." Interest payments are protected by a large or
by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally
strong position of such issues.
Aa -- Bonds rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in
"Aaa" securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which
make the long-term risks appear somewhat larger than in "Aaa"
securities.
A -- Bonds rated "A" possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate
but elements may be present which suggest a susceptibility to
impairment some time in the future.
Baa -- Bonds rated "Baa" are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba -- Bonds rated "Ba" are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate, and
therefore not well safeguarded during both good and bad times over
the future. Uncertainty of position characterizes bonds in this
class.
B -- Bonds rated "B" generally lack characteristics of the desirable
investments. Assurance of interest and principal payments or
maintenance of other terms of the contract over any long period of
time may be small.
Caa -- Bonds rated "Caa" are of poor standing. These issues may be in
default, or there may be present elements of danger with respect
to principal or interest.
--------------------------------------------------------------------------------
Intermediate Muni Fund, Inc. 15
--------------------------------------------------------------------------------
Bond Ratings (unaudited) (continued)
--------------------------------------------------------------------------------
Ca -- Bonds rated "Ca" represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C -- Bonds rated "C" are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Fitch Ratings ("Fitch") -- Ratings from "AA" to "BBB" may be modified by the
addition of a plus (+) sign or minus (-) sign to show relative standings within
the major ratings categories.
AA -- Bonds rated "AA" are considered to be investment-grade and of very
high credit quality. The obligor's ability to pay interest and/or
dividends and repay principal is very strong.
A -- Bonds and preferred stock considered to be investment-grade and of
high credit quality. The obligor's ability to pay interest and/or
dividends and repay principal is considered to be strong, but may
be more vulnerable to adverse changes in economic conditions and
circumstances than debt or preferred securities with higher
ratings.
BBB -- Bonds rated "BBB" are considered to be investment-grade and of
satisfactory credit quality. The obligor's ability to pay interest
or dividends and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances, however,
are more likely to have adverse impact on these securities and,
therefore, impair timely payment. The likelihood that the ratings
of these bonds will fall below investment grade is higher than for
securities with higher ratings.
NR -- Indicates that the bond is not rated by Standard & Poor's, Moody's
or Fitch.
--------------------------------------------------------------------------------
Short-Term Security Ratings (unaudited)
--------------------------------------------------------------------------------
SP-1 -- Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined to
possess overwhelming safety characteristics are denoted with a
plus (+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate
demand obligation ("VRDO") rating indicating that the degree of
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.
--------------------------------------------------------------------------------
Abbreviations* (unaudited)
--------------------------------------------------------------------------------
ACA -- American Capital Assurance
AMBAC -- Ambac
CGIC -- Capital Guaranty Insurance Company
CONNIE -- College Construction Loan
LEE Insurance Association
COP -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FLAIRS -- Floating Adjustable Interest Rate Securities
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
IDA -- Industrial Development Agency
IDR -- Industrial Development Revenue
INDLC -- Industrial Indemnity Company
ISD -- Independent School District
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
PCFA -- Pollution Control Financing Authority
PCR -- Pollution Control Revenue
PSFG -- Permanent School Fund Guaranty
RIBS -- Residual Interest Bonds
VRDD -- Variable Rate Daily Demand
----------
* Abbreviations may or may not appear in the Schedule of Investments.
--------------------------------------------------------------------------------
16 2004 Semi-Annual Report
--------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) June 30, 2004
--------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $182,198,610) $ 186,603,459
Cash 7,339
Interest receivable 3,341,765
Receivable for securities sold 848,373
Prepaid expenses 21,848
-----------------------------------------------------------------------------------------
Total Assets 190,822,784
-----------------------------------------------------------------------------------------
LIABILITIES:
Payable to broker -- variation margin 468,750
Management fee payable 93,605
Distributions payable to Municipal Auction Rate
Cumulative Preferred Stockholders 3,473
Accrued expenses 50,037
-----------------------------------------------------------------------------------------
Total Liabilities 615,865
-----------------------------------------------------------------------------------------
Series M Municipal Auction Rate Cumulative Preferred Stock
(2,000 shares authorized and issued at $25,000 per share) (Note 6) 50,000,000
-----------------------------------------------------------------------------------------
Total Net Assets $ 140,206,919
=========================================================================================
NET ASSETS:
Par value of capital shares $ 14,033
Capital paid in excess of par value 141,521,690
Undistributed net investment income 1,322,082
Accumulated net realized loss from investment transactions and
futures contracts (5,930,735)
Net unrealized appreciation of investments and futures contracts 3,279,849
-----------------------------------------------------------------------------------------
Total Net Assets
(Equivalent to $9.99 per share on 14,032,784 capital shares of
$0.001 par value outstanding; 100,000,000 capital shares authorized) $ 140,206,919
=========================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Intermediate Muni Fund, Inc. 17
--------------------------------------------------------------------------------
Statement of Operations (unaudited)
--------------------------------------------------------------------------------
For the Six Months Ended June 30, 2004
INVESTMENT INCOME:
Interest $ 5,318,328
--------------------------------------------------------------------------------
EXPENSES:
Management fee (Note 3) 575,848
Auction participation fees (Note 6) 62,401
Audit and legal 22,986
Transfer agency services 21,294
Custody 15,470
Shareholder communications 15,106
Stock exchange listing fees 8,726
Rating agency fees 8,500
Insurance fees 3,946
Directors' fees 2,730
Auction agency fees 1,900
Other 6,424
--------------------------------------------------------------------------------
Total Expenses 745,331
--------------------------------------------------------------------------------
Net Investment Income 4,572,997
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES 4 AND 5):
Realized Gain (Loss) From:
Investment transactions (148,169)
Futures contracts 503,144
--------------------------------------------------------------------------------
Net Realized Gain 354,975
--------------------------------------------------------------------------------
Change in Net Unrealized Appreciation of Investments
and Futures Contracts:
Beginning of period 7,433,181
End of period 3,279,849
--------------------------------------------------------------------------------
Decrease in Net Unrealized Appreciation (4,153,332)
--------------------------------------------------------------------------------
Net Loss on Investments and Futures Contracts (3,798,357)
--------------------------------------------------------------------------------
Distributions Paid to Municipal Auction Rate Cumulative Preferred
Stockholders From Net Investment Income (244,622)
--------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 530,018
================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
18 2004 Semi-Annual Report
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
For the Six Months Ended June 30, 2004 (unaudited)
and the Year Ended December 31, 2003
2004 2003
===================================================================================================
OPERATIONS:
Net investment income $ 4,572,997 $ 9,401,893
Net realized gain (loss) 354,975 (462,620)
Decrease in net unrealized appreciation (4,153,332) (70,343)
Dividends paid to Municipal Auction Rate Cumulative
Preferred Stockholders from net investment income (244,622) (501,981)
---------------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 530,018 8,366,949
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS PAID TO COMMON STOCK
SHAREHOLDERS FROM (NOTE 2):
Net investment income (4,291,186) (8,570,907)
---------------------------------------------------------------------------------------------------
Decrease in Net Assets From Distributions
Paid to Common Stock Shareholders (4,291,186) (8,570,907)
---------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS:
Net asset value of shares issued for reinvestment of dividends 287,921 --
---------------------------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 287,921 --
---------------------------------------------------------------------------------------------------
Decrease in Net Assets (3,473,247) (203,958)
NET ASSETS:
Beginning of period 143,680,166 143,884,124
---------------------------------------------------------------------------------------------------
End of period* $ 140,206,919 $ 143,680,166
===================================================================================================
* Includes undistributed net investment income of: $ 1,322,082 $ 1,284,893
===================================================================================================
See Notes to Financial Statements.
--------------------------------------------------------------------------------
Intermediate Muni Fund, Inc. 19
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
--------------------------------------------------------------------------------
1. Significant Accounting Policies
The Intermediate Muni Fund, Inc. ("Fund"), a Maryland corporation, is registered
under the Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company.
The following are significant accounting policies consistently followed by the
Fund and are in conformity with U.S. generally accepted accounting principles
("GAAP"):(a) security transactions are accounted for on trade date;(b)
securities are valued at the mean between the bid and asked prices provided by
an independent pricing service that are based on transactions in municipal
obligations, quotations from municipal bond dealers, market transactions in
comparable securities and various relationships between securities; (c)
securities for which market quotations are not available will be valued in good
faith at fair value by or under the direction of the Board of Directors; (d)
securities maturing within 60 days are valued at cost plus accreted discount, or
minus amortized premium, which approximates value; (e) gains or losses on the
sale of securities are calculated by using the specific identification method;
(f) interest income, adjusted for amortization of premium and accretion of
discount, is recorded on an accrual basis; (g) dividends and distributions to
shareholders are recorded monthly by the Fund on the ex-dividend date for the
shareholders of Common Stock based on net investment income. The holders of the
Municipal Auction Rate Cumulative Preferred Stock shall be entitled to receive
dividends in accordance with an auction that will normally be held weekly and
out of funds legally available to shareholders; (h) the character of income and
gains to be distributed is determined in accordance with income tax regulations
which may differ from GAAP; (i) the Fund intends to comply with the applicable
provisions of the Internal Revenue Code of 1986, as amended, pertaining to
regulated investment companies and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes;
(j) the net asset value of the Fund's Common Stock is determined by dividing the
value of the net assets available to Common Stock by the total number of shares
of common stock outstanding. For the purpose of determining the net asset value
per share of the common stock, the value of the Fund's net assets shall be
deemed to equal the value of the Fund's assets less (1) the Fund's
liabilities,(2) the aggregate liquidation value (i.e., $25,000 per outstanding
share) of the Municipal Auction Rate Cumulative Preferred Stock and (3)
accumulated and unpaid dividends on the outstanding Municipal Auction Rate
Cumulative Preferred Stock issue; and (k) estimates and assumptions are required
to be made regarding assets, liabilities and changes in net assets resulting
from operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
--------------------------------------------------------------------------------
20 2004 Semi-Annual Report
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
2. Exempt-Interest Dividends and Other Distributions
The Fund intends to satisfy conditions that will enable interest from municipal
securities, which is exempt from Federal income tax and from designated state
income taxes, to retain such tax-exempt status when distributed to the
shareholders of the Fund.
Capital gains distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
3. Management Agreement and Transactions with Affiliated Persons
Smith Barney Fund Management LLC ("SBFM"), an indirect wholly-owned subsidiary
of Citigroup Inc. ("Citigroup"), acts as investment manager to the Fund. As
compensation for its services, the Fund pays SBFM a management fee calculated at
an annual rate of 0.60% of the Fund's average daily net assets. For purposes of
calculating the management fee, the liquidation value of any preferred stock of
the Fund is not deducted in determining the Fund's average daily net assets.
This fee is calculated daily and paid monthly.
All officers and one Director of the Fund are employees of Citigroup or its
affiliates.
4. Investments
During the six months ended June 30, 2004, the aggregate cost of purchases and
proceeds from sales of investments (including maturities of long-term
investments, but excluding short-term investments) were as follows:
================================================================================
Purchases $27,218,530
--------------------------------------------------------------------------------
Sales 26,018,241
================================================================================
At June 30, 2004, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
================================================================================
Gross unrealized appreciation $ 6,695,209
Gross unrealized depreciation (2,290,360)
--------------------------------------------------------------------------------
Net unrealized appreciation $ 4,404,849
================================================================================
5. Futures Contracts
Securities or cash equal to the initial margin amount are either deposited with
the broker or segregated by the custodian upon entering into the futures
contract. Additional securities are also segregated up to the current market
value of the futures contracts. During the period the futures contract is open,
changes in the
--------------------------------------------------------------------------------
Intermediate Muni Fund, Inc. 21
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
value of the contract are recognized as unrealized gains or losses by "marking
to market" on a daily basis to reflect the market value of the contract at the
end of each day's trading. Variation margin payments are received or made and
recognized as assets due from or liabilities due to broker, depending upon
whether unrealized gains or losses are incurred. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
proceeds from (or cost of) the closing transactions and the Fund's basis in the
contract. The Fund enters into such contracts typically to hedge a portion of
its portfolio. The Fund bears the market risk that arises from changes in the
value of the financial instruments and securities indices.
At June 30, 2004, the Fund had the following open futures contracts:
Number of Basis Market Unrealized
Contracts Expiration Value Value Loss
==========================================================================================================
Contracts to Sell:
U.S. 10 Year Treasury Note 500 9/04 $52,062,500 $53,187,500 $(1,125,000)
==========================================================================================================
6. Municipal Auction Rate Cumulative Preferred Stock
On January 28, 2002, the Fund issued 2,000 shares of Series M Municipal Auction
Rate Cumulative Preferred Stock ("ARCPS"). The underwriting discount of $500,000
and offering expenses of $278,731 associated with the ARCPS offering were
recorded as a reduction of the capital paid in excess of par value of common
stock for the year ended December 31, 2002. The ARCPS' dividends are cumulative
at a rate determined at an auction and the dividend period is typically 7 days.
The dividend rates ranged from 0.80% to 1.16% during the six months ended June
30, 2004. At June 30, 2004, the dividend rate was 1.16%.
The ARCPS are redeemable under certain conditions by the Fund, or subject to
mandatory redemption (if the Fund is in default of certain coverage
requirements) at a redemption price equal to the liquidation preference, which
is the sum of $25,000 per share plus accumulated and unpaid dividends.
The Fund is required to maintain certain asset coverages with respect to the
ARCPS. If the Fund fails to maintain these coverages and does not cure any such
failure within the required time period, the Fund is required to redeem a
requisite number of the ARCPS in order to meet the applicable requirement.
Additionally, failure to meet the foregoing asset coverage requirements would
restrict the Fund's ability to pay dividends to common shareholders.
--------------------------------------------------------------------------------
22 2004 Semi-Annual Report
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
--------------------------------------------------------------------------------
Citigroup Global Markets Inc. ("CGM") another indirect wholly-owned subsidiary
of Citigroup, also currently acts as a broker/dealer in connection with the
auction of ARCPS. After each auction, the auction agent will pay to each
broker/dealer, from monies the Fund provides, a participation fee at the annual
rate of 0.25% of the purchase price of the ARCPS that the broker/dealer places
at the auction. For the six months ended June 30, 2004, CGM earned $62,401 as a
participating broker/dealer.
7. Additional Information
Citigroup has been notified by the Staff of the Securities and Exchange
Commission ("SEC") that the Staff is considering recommending a civil injunctive
action and/or an administrative proceeding against Citigroup Asset Management
("CAM"), including its applicable investment advisory companies and Citicorp
Trust Bank ("CTB"), an internal transfer agent, relating to the creation and
operation of the internal transfer agent unit to serve certain CAM-managed
funds. CTB did not provide services to the Fund. This notification arises out of
a previously disclosed investigation by the SEC and the U.S. Attorney and
relates to CTB's entry in 1999 into the transfer agency business, CAM's
retention of, and agreements with an unaffiliated sub transfer agent, the
adequacy of the disclosures made to the fund boards that approved the transfer
agency arrangements, (including CAM's failure to disclose a related revenue
guarantee agreement benefiting CAM and its affiliates), and CAM's operation of
and compensation for the transfer agency business. The revenue guarantee
described above was terminated in 1999 and CAM will be paying the applicable
funds, primarily through fee waivers, a total of approximately $17 million (plus
interest) that is the amount of the revenue received by Citigroup relating to
the revenue guarantee. The Fund did not implement the contractual arrangement
described above and therefore will not receive any portion of the payment.
Citigroup is cooperating fully in the investigation and will seek to resolve the
matter in discussions with the SEC Staff. Although there can be no assurance,
Citigroup does not believe that this matter will have a material adverse effect
on the Fund.
--------------------------------------------------------------------------------
Intermediate Muni Fund, Inc. 23
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended December 31,
unless otherwise noted:
2004(1) 2003 2002 2001 2000 1999
===============================================================================================================================
Net Asset Value,
Beginning of Period $ 10.26 $ 10.27 $ 10.21 $ 10.20 $ 9.89 $ 10.61
-------------------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(2) 0.34 0.68 0.68 0.56 0.55 0.53
Net realized and unrealized
gain (loss)(2) (0.28) (0.03) 0.07 -- 0.28 (0.71)
Dividends paid to Municipal
Auction Rate Cumulative
Preferred Stockholders
from net investment
income (0.02) (0.05) (0.05) -- -- --
-------------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From
Operations 0.04 0.60 0.70 0.56 0.83 (0.18)
-------------------------------------------------------------------------------------------------------------------------------
Gains From Repurchase of
Treasury Stock -- -- -- 0.00* 0.02 --
-------------------------------------------------------------------------------------------------------------------------------
Underwriting Commissions and
Expenses from the Issuance
of Municipal Auction Rate
Cumulative Preferred Stock -- -- (0.06) -- -- --
-------------------------------------------------------------------------------------------------------------------------------
Distributions Paid To Common
Stock Shareholders From:
Net investment income (0.31) (0.61) (0.58) (0.55) (0.54) (0.53)
Net realized gains -- -- -- -- -- (0.01)
-------------------------------------------------------------------------------------------------------------------------------
Total Distributions Paid to
Common Stock Shareholders (0.31) (0.61) (0.58) (0.55) (0.54) (0.54)
-------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 9.99 $ 10.26 $ 10.27 $ 10.21 $ 10.20 $ 9.89
-------------------------------------------------------------------------------------------------------------------------------
Total Return, Based on
Market Price(3) (6.57)%++ 13.33% 4.03% 17.17% 11.90% (17.10)%
-------------------------------------------------------------------------------------------------------------------------------
Total Return, Based on
Net Asset Value(3) 0.44%++ 6.22% 6.73% 6.01% 9.68% (1.39)%
-------------------------------------------------------------------------------------------------------------------------------
Net Assets, End of
Period (millions) $ 140 $ 144 $ 144 $ 143 $ 143 $ 83
-------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets
Based on Common Shares
Outstanding(4):
Expenses 1.05%+ 1.07% 1.08% 0.80% 0.78% 0.77%
Net investment income(2) 6.45+ 6.55 6.59 5.35 5.47 5.17
-------------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 14% 21% 49% 36% 45% .54%
-------------------------------------------------------------------------------------------------------------------------------
Market Price, End of Period $ 9.23 $ 10.19 $ 9.56 $ 9.75 $ 8.81 $ 8.375
===============================================================================================================================
--------------------------------------------------------------------------------
24 2004 Semi-Annual Report
--------------------------------------------------------------------------------
Financial Highlights (continued)
--------------------------------------------------------------------------------
2004(1) 2003 2002 2001 2000 1999
===============================================================================================================================
Municipal Auction Rate
Cumulative Preferred Stock(5):
Total Amount Outstanding (000s) $ 50,000 $ 50,000 $ 50,000 -- -- --
Asset Coverage Per Share 95,103 96,840 96,942 -- -- --
Involuntary Liquidating
Preference Per Share(6) 25,000 25,000 25,000 -- -- --
Average Market Value Per Share(6) 25,000 25,000 25,000 -- -- --
===============================================================================================================================
(1) For the six months ended June 30, 2004 (unaudited).
(2) Effective January 1, 2001, the Fund adopted a change in the accounting
method that requires the Fund to amortize premiums and accrete all
discounts. Without the adoption of this change, for the year ended
December 31, 2001, the ratio of net investment income to average net
assets would have been 5.31%. Per share information, ratios and
supplemental data for the periods prior to January 1, 2001 have not been
restated to reflect this change in presentation. In addition, the impact
of this change to net investment income and net realized and unrealized
gain was less than $0.01 per share.
(3) The total return calculation assumes that dividends are reinvested in
accordance with the Fund's dividend reinvestment plan.
(4) Calculated on basis of average net assets of common shareholders. Ratios
do not reflect the effect of dividend payments to preferred shareholders.
(5) On January 28, 2002, the Fund issued 2,000 shares of Series M Municipal
Auction Rate Cumulative Preferred Stock at $25,000 a share.
(6) Excludes accumulated and unpaid dividends.
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
--------------------------------------------------------------------------------
Intermediate Muni Fund, Inc. 25
--------------------------------------------------------------------------------
Financial Data (unaudited)
--------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
AMEX Net Asset Dividends Reinvestment
Period Closing Price* Value* Paid Price
================================================================================
Fiscal Year 2002
January $ 9.70 $10.21 $0.046 $ 9.67
February 9.69 10.29 0.046 9.67
March 9.50 10.02 0.046 9.52
April 9.59 10.16 0.048 9.58
May 9.70 10.18 0.048 9.75
June 9.87 10.27 0.048 9.95
July 9.90 10.37 0.048 9.92
August 10.05 10.44 0.048 10.07
September 10.09 10.57 0.048 10.11
October 9.75 10.24 0.051 9.50
November 9.42 10.16 0.051 9.57
December 9.56 10.27 0.051 9.48
Fiscal Year 2003
January 9.45 10.18 0.051 9.47
February 9.47 10.25 0.051 9.60
March 9.48 10.19 0.051 9.53
April 9.75 10.24 0.051 9.70
May 10.09 10.40 0.051 10.01
June 9.98 10.31 0.051 10.03
July 9.61 10.12 0.051 10.12
August 10.02 10.09 0.051 10.01
September 10.15 10.24 0.051 10.19
October 10.22 10.21 0.051 10.25
November 10.39 10.28 0.051 10.32
December 10.19 10.26 0.051 10.31
Fiscal Year 2004
January 10.41 10.27 0.051 10.29
February 10.49 10.36 0.051 10.41
March 10.49 10.19 0.051 10.25
April 9.20 10.08 0.051 9.24
May 9.57 10.02 0.051 9.60
June 9.23 9.99 0.051 9.39
================================================================================
* On the last business day of the month.
--------------------------------------------------------------------------------
26 2004 Semi-Annual Report
--------------------------------------------------------------------------------
Additional Shareholder Information (unaudited)
--------------------------------------------------------------------------------
Results of the Annual Meeting of Shareholders
The Annual Meeting of Shareholders of the Intermediate Muni Fund, Inc. was held
on April 29, 2004, for the purpose of considering and voting upon the election
of three Class II Directors, each for a three-year term. At the Meeting the
holders of the Preferred Stock voting separately, voted on a Preferred Class
Director. The following table provides information concerning the matters voted
on at the Meeting.
Election of Directors*
Nominees Votes For Votes Withheld
-------- --------- --------------
Paul Hardin 12,513,674 154,494
(Preferred Stockholders only) 1,794 2
Roderick C. Rasmussen 12,517,920 150,248
John P. Toolan 12,511,951 156,217
----------
* The following Directors representing the balance of the Board of Directors
continue to serve as Directors: Lee Abraham, Alan J. Bloostein, Jane F.
Dasher, Donald R. Foley, R. Jay Gerken and Richard E. Hanson Jr.
--------------------------------------------------------------------------------
Intermediate Muni Fund, Inc. 27
--------------------------------------------------------------------------------
Dividend Reinvestment Plan (unaudited)
--------------------------------------------------------------------------------
Under the Fund's Dividend Reinvestment Plan ("Plan"), a shareholder whose shares
of common stock are registered in his own name will have all distributions from
the fund reinvested automatically by PFPC Inc. ("PFPC"), as purchasing 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 determination date (generally, the record date for
the distribution), Plan participants will be issued shares of common stock by
the fund at a price equal to the greater of net asset value 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 (which is the close of business on the
determination date), PFPC will buy common stock in the open market, on the AMEX
or elsewhere, for the participants' accounts. If following the commencement of
the purchases and before PFPC has completed its purchases, the market price
exceeds the net asset value of the common stock as of the valuation time, PFPC
will attempt to terminate purchases in the open market and cause the fund to
issue the remaining portion of the dividend or distribution in shares at a price
equal to the greater of (a) net asset value as of the valuation time 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 fund issues the
remaining shares. To the extent PFPC is unable to stop open market purchases and
cause the Fund to issue the remaining shares, the average per share purchase
price paid by PFPC may exceed the net asset value of the common stock as of the
valuation time, resulting in the acquisition of fewer shares than if the
dividend or capital gains distribution had been paid in common stock issued by
the Fund at such net asset value. PFPC will begin to purchase common stock on
the open market as soon as practicable after the determination date for the
dividend or capital gains distribution, but in no event
--------------------------------------------------------------------------------
28 2004 Semi-Annual Report
--------------------------------------------------------------------------------
Dividend Reinvestment Plan (unaudited) (continued)
--------------------------------------------------------------------------------
shall such purchases continue later than 30 days after the payment date for such
dividend or distribution, or the record date for a succeeding dividend or
distribution, except when necessary to comply with applicable provisions of the
federal securities laws.
PFPC 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 PFPC in uncertificated form in the name of the plan participant.
Plan participants are subject to no charge for reinvesting dividends and capital
gains distributions under the Plan. PFPC's fees for handling the reinvestment of
dividends and capital gains distributions will be paid by the fund. No brokerage
charges apply with respect to shares of common stock issued directly by the fund
under the Plan. Each plan participant will, however, bear a proportionate share
of any brokerage commissions actually 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
Fund 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 PFPC, with the fund'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 PFPC Inc., P.O. Box 8030, Boston, Massachusetts
02266-8030 or by telephone at (800) 331-1710.
------------------------------
Beginning August 31, 2004, information on how the Fund voted proxies relating to
portfolio securities during the 12 month period ended June 30, 2004 will be
available (1) without charge, upon request, by calling 1-800-451-2010 and (2) on
the SEC's website at www.sec.gov.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request, by telephoning the Fund (toll-free) at 1-800-451-2010 and by
visiting the SEC's website at www.sec.gov.
--------------------------------------------------------------------------------
INTERNEDIATE [GRAPHIC OMITTED]
MUNI FUND, INC.
--------------------------------------------------------------------------------
DIRECTORS
Lee Abraham
Alan J. Bloostein
Jane F. Dasher
Donald R. Foley
R. Jay Gerken, CFA
Chairman
Richard E. Hanson, Jr.
Paul Hardin
Roderick C. Rasmussen
John P. Toolan
OFFICERS
R. Jay Gerken, CFA
President and Chief
Executive Officer
Andrew B. Shoup
Senior Vice President and
Chief Administrative Officer
Robert J. Brault
Chief Financial Officer
and Treasurer
Peter M. Coffey
Vice President
Andrew Beagley
Chief Compliance Officer
Kaprel Ozsolak
Controller
Robert I. Frenkel
Secretary and
Chief Legal Officer
INVESTMENT MANAGER
Smith Barney Fund Management LLC
CUSTODIAN
State Street Bank and Trust Company
SHAREHOLDER
SERVICING AGENT
PFPC Inc.
P.O. Box 8030
Boston, Massachusetts 02266-8030
This report is intended only for the shareholders of Intermediate Muni Fund,
Inc. It is not a Prospectus, circular or representation intended for use in the
purchase or sale of shares of the Fund or any securities mentioned in the
report.
INTERMEDIATE
MUNI FUND, INC.
125 Broad Street
10th Floor, MF-2
New York, New York 10004
FD0633 8/04
04-7079
SBI
Listed on the American
Stock Exchange
ITEM 2. CODE OF ETHICS.
Not Applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not Applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal
financial officer have concluded that the registrant's disclosure
controls and procedures (as defined in Rule 30a- 3(c) under the
Investment Company Act of 1940, as amended (the "1940 Act")) are
effective as of a date within 90 days of the filing date of this
report that includes the disclosure required by this paragraph,
based on their evaluation of the disclosure controls and
procedures required by Rule 30a-3(b) under the 1940 Act and
15d-15(b) under the Securities Exchange Act of 1934.
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940
Act) that occurred during the registrant's last fiscal half-year
(the registrant's second fiscal half-year in the case of an
annual report) that have materially affected, or are likely to
materially affect the registrant's internal control over
financial reporting.
ITEM 11. EXHIBITS.
(a) Not applicable.
(b) Attached hereto.
Exhibit 99.CERT Certifications pursuant to section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 99.906CERT Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this Report
to be signed on its behalf by the undersigned, there unto duly authorized.
Intermediate Muni Fund, Inc.
By: /s/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer of
Intermediate Muni Fund, Inc.
Date: September 7, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer of
Intermediate Muni Fund, Inc.
Date: September 7, 2004
By: /s/ Robert J. Brault
Robert J. Brault
Chief Financial Officer of
Intermediate Muni Fund, Inc.
Date: September 7, 2004