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 811-7362
Salomon Brothers Municipal Partners 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.
Salomon Brothers Asset Management Inc
300 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 446-1013
Date of fiscal year end: December 31
Date of reporting period: December 31, 2003
ITEM 1. REPORT TO STOCKHOLDERS.
The Annual Report to Stockholders is filed herewith.
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Letter from the Chairman
Dear Shareholder,
I am pleased to report that the Salomon Brothers Municipal Partners Fund Inc.
generated favorable relative returns both on a market price and net asset value
("NAV") i basis for the 12 months ended December 31, 2003. This positive
performance occurred within a sea change for bonds. After a formidable run,
during the early summer bonds lost some of the gains they had generated earlier
in 2003 as signs of a sharp pick-up in the pace of economic growth and rising
long-term U.S. Treasury bond yields exerted pressure on the market. Although
many municipalities grappled with budgetary pressures during much of the year
brought on by the weak economy, tax revenues reportedly grew during the third
quarter of 2003.
Please read on for a more detailed look at prevailing economic and market
conditions during the fund's fiscal year and to see how those conditions may
have affected fund performance.
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.
As always, thank you for your confidence in our stewardship of your assets. We
look forward to helping you continue to meet your financial goals.
Sincerely,
/s/ R. Jay Gerken
R. Jay Gerken, CFA
Chairman and Chief Executive Officer
January 12, 2004
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Manager Overview
Performance Review
During the 12 months ended December 31, 2003, the fund returned 11.07%, based on
its New York Stock Exchange ("NYSE") market price and 6.78% based on its NAV per
share. In comparison, the Lehman Brothers Municipal Bond Index ii returned 5.31%
and the fund's Lipper general municipal debt (leveraged) closed-end funds
category average returned 8.53% over the same time frame. iii Please note that
Lipper performance returns are based on each fund's NAV.
During the period we structured the fund in a defensive posture by placing an
emphasis on bonds with higher coupons, while also maintaining a lower average
life. Although the strategy, at times limited the fund's full participation in
the market rallies, it helped reduce the fund's volatility during the period.
During the 12-month period, the fund distributed dividends to shareholders
totaling $0.84 per share. The performance table shows the fund's annualized
distribution yields, as well as its 12-month total return based on its NAV and
market price as of December 31, 2003. Certain investors may be subject to the
federal Alternative Minimum Tax, and state and local taxes will apply. Capital
gains, if any, are fully taxable. Please consult your personal tax adviser. Past
performance is not indicative of future results.
FUND PERFORMANCE
AS OF DECEMBER 31, 2003
(unaudited)
Annualized 12-Month
Distribution Total
Price Per Share Yield Return
-------------------------------------------
$15.52 (NAV) 5.41% 6.78%
$14.00 (NYSE) 6.00% 11.07%
Total returns are based on changes in NAV or the
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 annualized distribution yield assumes a
current monthly income dividend rate of $0.07 for 12
months. This rate is as of December 31, 2003 and is
subject to change.
Overview
Municipal bonds finished 2003 on a firm note while concluding their fourth
straight year of positive returns. iv Despite an improving economy and vibrant
stock market, investors' interest in tax-exempt municipal bonds held firm during
2003 as the Fed signaled that it was is no hurry to raise short-term interest
rates. Consequently, investors gravitated to the municipal bond market as
higher-rated issues offered favorable taxable equivalent yields v compared to
comparable-maturity U.S. Treasuries and Agencies. vi
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Additionally, 2003 was a banner year for municipal bonds from an issuance
perspective. State and local governments combined issued over $380 billion of
debt to fund new projects and refinance outstanding bonds. vii Tax-exempt new
issue volume exceeded last year's previous record of $358 billion.vii Despite
historically low nominal yields, demand was strong as property and casualty
insurance companies, institutions and individual investors combined to absorb
the massive supply.
Selection of Municipal Bonds
Many municipalities recently reported growth in tax revenues during the third
quarter of 2003 versus the same period in 2002, which has helped boost states'
coffers. Given the modest financial improvement for many municipalities, the
fund maintained its exposure to both state and local general obligation bonds.
Additionally, revenue bonds continued to play a significant role in the
portfolio. These bonds are backed by the generally stable revenue streams of
specific public works (such as bridge tolls), and tend to be less correlated to
drops in personal income tax receipts than state obligations.
As of the period's close, the fund continued to be well diversified and of high
credit quality with holdings from 31 states and an average rating of double A.
The portfolio's top sectors included healthcare, transportation and housing.
Although states and cities have continued to face budgetary challenges, many
have shown some signs of rebounding.
Looking for Additional Information?
The fund is traded under the symbol "MNP" and its closing market price is
available in most newspapers under the NYSE listings. The daily NAV is available
online under symbol XMNPX. 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 allocation press release that can be
found on most major financial web sites as well as
www.citigroupassetmanagement.com.
In a continuing effort to provide information concerning the fund, shareholders
may call 1-888-777-0102 or 1-800-SALOMON (toll free), Monday through Friday from
8:00 a.m. to 6:00 p.m. Eastern Time, for the fund's current NAV, market price
and other information.
Thank you for your investment in the Salomon Brothers Municipal Partners Fund
Inc. We appreciate that you have entrusted us to manage your money and value our
relationship with you.
Sincerely,
/S/ Robert E. Amodeo
Robert E. Amodeo
Executive Vice President
January 12, 2004
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
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 December 31, 2003 and are subject to
change. Please refer to pages 5 through 9 for a list and percentage breakdown of
the fund's holdings.
All index performance reflects no deduction for fees, expenses or taxes.
i NAV is a price that reflects the value of the fund's underlying portfolio
plus other assets, less the fund's liabilities. 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 common shares,
which may be more or less than the fund's NAV.
ii The Lehman Brothers Municipal Bond Index is a broad measure of the municipal
bond market with maturities of at least one year. Please note that an
investor cannot invest directly in an index.
iii Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the 12-month period ended December 31, 2003, calculated
among the 64 funds in the fund's Lipper category including the reinvestment
of dividends and capital gains, if any.
iv Source: The Bond Buyer.
v The taxable equivalent yield applies to income taxation on a federal (not
state and local) level. This yield would be slightly lower for an investor
below the federal income tax bracket of 31% and slightly higher for an
investor in a higher tax bracket.
vi The face-value principal and coupon payments of U.S. Government bonds, in
contrast to municipals, are guaranteed by full faith and credit of the U.S.
Government.
vii Source: Lehman Brothers.
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Schedule of Investments
December 31, 2003
Face
Amount Rating (a) Security Value
---------------------------------------------------------------------------------------------------------
Long-Term Investments -- 99.8%
CALIFORNIA -- 1.3%
$1,370,000 AAA Pleasant Valley, CA School District Ventura County,
Series A, MBIA-Insured, 5.850% due 2/1/17 ...................... $ 1,632,670
-----------
COLORADO -- 0.8%
1,000,000 A- Colorado Springs, CO Hospital Revenue, 6.375% due 12/15/30 ....... 1,069,380
-----------
DISTRICT OF COLUMBIA -- 1.7%
2,000,000 AAA District of Columbia Revenue, (American University),
AMBAC-Insured, 5.625% due 10/1/26 .............................. 2,159,780
-----------
FLORIDA -- 1.3%
1,500,000 AAA Hillsborough County, FL Utility Refunding Revenue,
FGIC-Insured, 5.000% due 8/1/08 ................................ 1,671,465
-----------
GEORGIA -- 0.1%
110,000 AAA Fulton County, GA Housing Authority, Single-Family Mortgage,
Series A, GNMA-Collateralized, 6.600% due 3/1/28 ............... 112,246
-----------
HAWAII -- 1.8%
2,000,000 AAA Hawaii State Airport System Revenue Refunding, Series B,
FGIC-Insured, 6.000% due 7/1/19 ................................ 2,267,360
-----------
ILLINOIS -- 15.5%
3,750,000 AAA Chicago, IL Board of Education, (Chicago School Reform),
AMBAC-Insured, 5.750% due 12/1/27 .............................. 4,167,675
Chicago, IL Midway Airport Revenue, MBIA-Insured:
2,000,000 AAA Series A, 5.500% due 1/1/29 .................................... 2,127,000
2,000,000 AAA Series B, 5.625% due 1/1/29 .................................... 2,121,060
2,000,000 Aaa* Illinois Development Finance Authority, Revolving Fund Revenue,
5.250% due 9/1/12 .............................................. 2,270,800
1,000,000 AA+ Illinois Educational Facilities Authority Revenues, (Northwestern
University), 5.500% due 12/1/13 ................................ 1,157,940
1,500,000 A+ Illinois Health Facilities Authority Revenue Refunding, (Lutheran
General Health System), Series C, 7.000% due 4/1/14 ............ 1,869,495
1,500,000 AAA Illinois State, First Series, FSA-Insured, 5.500% due 5/1/16 ..... 1,731,525
1,000,000 AAA Illinois State, MBIA-Insured, 5.000% due 6/1/13 .................. 1,118,830
3,000,000 Aa3* Illinois State Sales Tax Revenue, Series V, (Pre-Refunded - Escrowed
with U.S. Treasury Obligations to 6/15/05 Call @ 102),
6.375% due 6/15/20 ............................................. 3,279,240
-----------
19,843,565
-----------
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SEE NOTES TO FINANCIAL STATEMENTS.
Page 5
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Schedule of Investments (continued)
December 31, 2003
Face
Amount Rating (a) Security Value
---------------------------------------------------------------------------------------------------------
INDIANA -- 2.3%
$1,000,000 BBB+ Indiana State Development Finance Authority, Environmental Revenue,
(USX Corp. Project), 5.250% due 12/1/22 ........................ $ 1,081,720
1,750,000 AAA Indiana State Revolving Fund Revenue, Series B, 5.000% due 8/1/23 1,806,770
-----------
2,888,490
-----------
IOWA -- 0.9%
1,000,000 A1* Iowa Finance Authority, Hospital Facility Revenue,
6.750% due 2/15/16 ............................................. 1,127,360
-----------
KANSAS -- 1.3%
1,430,000 AA Kansas State Development Finance Authority, Health Facilities
Revenue, (Sisters of Charity), Series J, 6.250% due 12/1/28 .... 1,604,288
-----------
MAINE -- 0.0%
45,000 AA+ Maine State Housing Authority Mortgage Purchase, Series A-2,
6.650% due 11/15/25 ............................................ 46,599
-----------
MARYLAND -- 4.7%
Maryland State Health & Higher Educational Facilities
Authority Revenue:
1,500,000 Baa1* Caroll County General Hospital, 6.000% due 7/1/37 ............. 1,583,820
University of Maryland Medical Systems:
1,000,000 A3* 6.750% due 7/1/30 ............................................ 1,132,470
500,000 A 6.000% due 7/1/32 ............................................ 531,435
2,500,000 Aaa* Northeast Maryland Waste Disposal Authority, Solid Waste Revenue
Refunding, AMBAC-Insured, 5.500% due 4/1/15 .................... 2,785,350
-----------
6,033,075
-----------
MASSACHUSETTS -- 8.1%
3,500,000 AAA Massachusetts State GO, Series C, FGIC-Insured,
5.500% due 11/1/15 ............................................. 4,077,185
2,500,000 AA- Massachusetts State Health & Educational Facilities
Authority Revenue, (Partners Healthcare Systems), Series C,
5.750% due 7/1/32 ............................................. 2,679,500
3,170,000 AAA Massachusetts State Water Pollution Abatement, Series A,
5.750% due 8/1/29 .............................................. 3,545,423
-----------
10,302,108
-----------
MICHIGAN -- 1.2%
1,500,000 AA- Michigan State Hospital Finance Authority Revenue Refunding,
(Trinity Health), Credit C, 5.375% due 12/1/30 ................. 1,542,180
-----------
MINNESOTA -- 2.2%
2,785,000 AA+ Minnesota State Housing Finance Agency, Single-Family Mortgage,
Series H, 6.500% due 1/1/26 .................................... 2,815,746
-----------
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
Page 6
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Schedule of Investments (continued)
December 31, 2003
Face
Amount Rating (a) Security Value
---------------------------------------------------------------------------------------------------------
NEVADA -- 4.4%
$1,350,000 AAA Clark County, NV Passenger Facility Revenue, (McCarran International
Airport), Series A, MBIA-Insured, 5.750% due 7/1/23 ............ $ 1,438,763
Nevada Housing Division, Single-Family Program, Series B-2:
2,605,000 Aa2* 6.400% due 10/1/25 ............................................. 2,661,320
295,000 Aa2* 6.950% due 10/1/26 ............................................. 299,974
1,000,000 AAA Washoe County, NV School District Refunding Revenue,
Series B, FGIC-Insured, 5.500% due 6/1/16 ...................... 1,157,320
-----------
5,557,377
-----------
NEW HAMPSHIRE -- 0.1%
190,000 Aa2* New Hampshire State HFA, Single-Family Residential, Series A,
6.800% due 7/1/15 .............................................. 191,541
-----------
NEW JERSEY -- 9.9%
New Jersey EDA, Series A:
5,150,000 AAA PCR, (Public Service Electric and Gas Co. Project), MBIA-Insured,
6.400% due 5/1/32 ............................................ 5,332,980
4,450,000 AAA Water Facilities Revenue, (New Jersey American Water Co., Inc.
Project), FGIC-Insured, 6.875% due 11/1/34 ................... 4,733,821
1,000,000 A2* New Jersey Health Care Facilities Financing Authority Revenue,
(Hackensack University Medical Center), 6.000% due 1/1/25 ...... 1,047,640
1,395,000 AAA New Jersey Transportation Trust Fund Authority, Transportation
System, Series A, AMBAC-Insured, 5.000% due 12/15/11 ........... 1,565,330
-----------
12,679,771
-----------
NEW YORK -- 6.5%
New York City, NY Municipal Water Finance Authority,
Water & Sewer System Revenue, Series B:
1,175,000 AA 5.750% due 6/15/29 ........................................... 1,299,679
1,000,000 AA 5.125% due 6/15/31 ........................................... 1,025,180
1,250,000 AA+ New York City, NY Transitional Finance Authority Revenue,
Series A, 5.500% due 11/15/17 .................................. 1,409,725
New York City, NY GO, Series A:
180,000 A 6.000% due 5/15/30 ............................................. 196,151
820,000 A Pre-Refunded - Escrowed with U.S. government securities to 5/15/10
(Call @ 101), 6.000% due 5/15/30 ............................. 979,588
190,000 Aaa* New York State Mortgage Agency Revenue, 24th Series,
6.125% due 10/1/30 ............................................. 194,543
2,000,000 AAA New York State Urban Development Corp. Revenue, Correctional
Facilities, AMBAC-Insured, (Pre-Refunded - Escrowed with U.S.
government securities to 1/1/06 Call @ 102), 5.375% due 1/1/25 . 2,191,800
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
Page 7
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Schedule of Investments (continued)
December 31, 2003
Face
Amount Rating (a) Security Value
---------------------------------------------------------------------------------------------------------
NEW YORK -- 6.5% (CONTINUED)
$ 950,000 AAA Port Authority of New York and New Jersey Construction,
96th Series, FGIC-Insured, 6.600% due 10/1/23 .................. $ 995,847
-----------
8,292,513
-----------
OHIO -- 8.3%
1,375,000 Aaa* Butler County, OH, MBIA-Insured, 5.250% due 12/1/15 .............. 1,551,742
2,000,000 BBB+ Miami County, OH Hospital Facilities Revenue Refunding &
Improvement, (Upper Valley Medical Center), 6.250% due 5/15/13 . 2,098,060
6,700,000 A+ Ohio State Water Development Authority, Solid Waste Disposal
Revenue, (Cargill Inc.), 6.300% due 9/1/20 ..................... 6,994,934
-----------
10,644,736
-----------
OREGON -- 1.8%
2,000,000 AAA Oregon State Department of Administrative Services, FSA-Insured,
5.000% due 9/1/12 .............................................. 2,252,760
-----------
PENNSYLVANIA -- 2.3%
1,250,000 AAA Delaware Valley, PA Regional Financial Authority, Local Government
Revenue, Series A, AMBAC-Insured, 5.500% due 8/1/28 ............ 1,405,812
1,090,000 AAA Philadelphia, PA GO, Series A, XLCA-Insured, 5.250% due 2/15/14 .. 1,222,446
250,000 AAA Philadelphia, PA School District, Series A, FSA-Insured,
5.500% due 2/1/31 .............................................. 267,648
-----------
2,895,906
-----------
PUERTO RICO -- 2.3%
2,500,000 AAA Puerto Rico Commonwealth Refunding Revenue, FGIC-Insured,
5.500% due 7/1/13 .............................................. 2,297,600
-----------
TENNESSEE -- 6.3%
2,900,000 AA- Humphreys County, TN IDB, Solid Waste Disposal Revenue,
(E.I. du Pont de Nemours and Co. Project), 6.700% due 5/1/24 ... 3,000,195
3,500,000 AAA Memphis-Shelby County, TN Airport Authority Revenue, Series D,
AMBAC-Insured, 6.000% due 3/1/24 ............................... 3,888,955
1,085,000 AA Tennessee Housing Development Agency, (Homeownership Program),
Series 2C, 6.350% due 1/1/31 ................................... 1,159,366
-----------
8,048,516
-----------
TEXAS -- 6.4%
3,105,000 AAA Lower Colorado River Authority, TX Revenue Refunding & Improvement,
AMBAC-Insured, 5.250% due 5/15/04 .............................. 3,496,199
100,000 AAA North Harris Montgomery Community College District, TX Refunding,
FGIC-Insured, 5.375% due 2/15/16 ............................... 111,061
1,840,000 BBB+ Richardson, TX Hospital Authority Revenue, (Richardson Medical
Center), 6.750% due 12/1/23 .................................... 1,878,677
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
Page 8
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Schedule of Investments (continued)
December 31, 2003
Face
Amount Rating (a) Security Value
---------------------------------------------------------------------------------------------------------
TEXAS -- 6.4% (CONTINUED)
$2,500,000 AAA Texas State Turnpike Authority Revenue, First Tier, Series A,
AMBAC-Insured, 5.500% due 8/15/39 .............................. $ 2,687,425
------------
8,173,362
------------
VIRGINIA -- 1.3%
1,435,000 AA+ Virginia State Public School Authority Refunding Revenue,
(School Financing 1997), Series D, 5.250% due 8/1/12 ........... 1,642,300
------------
WASHINGTON -- 7.0%
1,000,000 AAA Chelan County, WA Public Utility District, (Chelan Hydro System No. 1),
Construction Revenue,Series A, AMBAC-Insured, 5.450% due 7/1/37 1,041,040
4,250,000 AAA Seattle, WA GO, Series B, FSA-Insured, 5.750% due 12/1/28 ........ 4,701,053
1,700,000 AA+ Washington State GO, Series C, 5.500% due 7/1/18 ................. 1,964,282
1,200,000 AAA Washington State Public Power Supply System Revenue Refunding,
(Nuclear Project No. 1), Series A, MBIA-Insured,
5.125% due 7/1/17 .............................................. 1,290,384
------------
8,996,759
------------
Total Long-Term Investments (Cost -- $118,885,794) ............... 127,419,453
------------
Short-Term Investments -- 0.2%
100,000 VMIG 1* Connecticut State Health and Educational Facilities Authority
Revenue Updates, (Edgehill), Series C, 1.150% due 7/1/27 ....... 100,000
100,000 VMIG 1* Jacksonville, FL Electric Authority Subordinated Bond Revenue,
Series F, 1.250% due 10/1/30 ................................... 100,000
------------
Total Short-Term Investments (Cost -- $200,000) .................. 200,000
------------
Total Investments -- 100.0% (Cost -- $119,085,794**) ............. $127,619,453
============
--------------------------------------------------------------------------------
(a) All ratings are by Standard & Poor's Ratings Service, except for those which
are identified by an asterisk (*), are rated by Moody's Investors Service.
** Aggregate cost for Federal income tax purposes is $119,097,336.
See pages 10 and 11 for definitions of ratings and abbreviations.
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
Page 9
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Long-Term Security Ratings (unaudited)
Standard & Poor's Ratings Service ("Standard & Poor's") -- Ratings from "AA" to
"BB" may be modified by the addition of a plus (+) or minus (-) sign to show
relative standings within the major rating categories.
AAA - Bonds rated "AAA" have the highest rating assigned by Standard
& Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA - Bonds rated "AA" have a very strong capacity to pay interest and
repay principal and differ from the highest rated issue only in a
small degree.
A - Bonds rated "A" have a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
BBB - Bonds rated "BBB" are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than in
higher rated categories.
BB - Bonds rated "BB" have less near-term vulnerability to default than
other speculative issues. However, they face major ongoing
uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to inadequate capacity to meet timely
interest and principal payments.
Moody's Investors Service ("Moody's") -- Numerical modifiers 1, 2 and 3 may be
applied to each generic rating from "Aa" to "Baa," where 1 is the highest and 3
the lowest ranking within its generic category.
Aaa - Bonds 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.
NR - Indicates that the bond is not rated by Moody's or Standard & Poor's
as indicated.
Page 10
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
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.
VMIG1 - Moody's highest rating for issues having a demand feature - VRDO.
P-1 - Moody's highest rating for commercial paper and for VRDO prior to the
advent of the VMIG 1 rating.
Abbreviations* (unaudited)
ABAG - Association of Bay Area Governors HDC - Housing Development Corporation
AIG - American International Guaranty HFA - Housing Finance Authority
AMBAC - American Municipal Bond Assurance IDA - Industrial Development Authority
Corporation IDB - Industrial Development Board
BAN - Bond Anticipation Notes IDR - Industrial Development Revenue
BIG - Bond Investors Guaranty INFLOS - Inverse Floaters
CGIC - Capital Guaranty Insurance Company ISD - Independent School District
CHFCLI - California Health Facility LEVRRS - Leveraged Reverse Rate Securities
Construction Loan Insurance LOC - Letter of Credit
CONNIE MBIA - Municipal Bond Investors Assurance
LEE - College Construction Loan Association Corporation
COP - Certificate of Participation MVRICS - Municipal Variable Rate Inverse
EDA - Economic Development Authority Coupon Security
EDR - Economic Development Revenue PCR - Pollution Control Revenue
FGIC - Financial Guaranty Insurance Company PSFG - Permanent School Fund Guaranty
FHA - Federal Housing Administration RAN - Revenue Anticipation Notes
FHLMC - Federal Home Loan Mortgage RIBS - Residual Interest Bonds
Corporation RITES - Residual Interest Tax-Exempt Securities
FLAIRS - Floating Adjustable Interest Rate SYCC - Structured Yield Curve Certificate
Securities TAN - Tax Anticipation Notes
FNMA - Federal National Mortgage Association TECP - Tax Exempt Commercial Paper
FRTC - Floating Rate Trust Certificates TOB - Tender Option Bonds
FSA - Financial Security Assurance TRAN - Tax and Revenue Anticipation Notes
GIC - Guaranteed Investment Contract VA - Veterans Administration
GNMA - Government National Mortgage VRDD - Variable Rate Daily Demand
Association VRWE - Variable Rate Wednesday Demand
GO - General Obligation Bonds XLCA - XL Capital Assurance Inc.
----------
* Abbreviations may or may not appear in the schedule of investments.
Page 11
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Statement of Assets and Liabilities
December 31, 2003
ASSETS:
Investments, at value (Cost -- $119,085,794) ........................................ $127,619,453
Cash ................................................................................ 22,954
Interest receivable ................................................................. 1,888,740
Receivable for securities sold ...................................................... 30,000
------------
TOTAL ASSETS ........................................................................ 129,561,147
------------
LIABILITIES:
Management fee payable .............................................................. 60,222
Accrued expenses .................................................................... 137,286
------------
TOTAL LIABILITIES ................................................................... 197,508
------------
AUCTION RATE PREFERRED STOCK
(800 SHARES AUTHORIZED AND ISSUED AT $50,000 PER SHARE) (NOTE 4) .................... 40,000,000
------------
TOTAL NET ASSETS ......................................................................... $ 89,363,639
============
NET ASSETS:
Common Stock ($0.001 par value, 100,000,000 shares authorized; 5,757,094
shares outstanding) ............................................................... $ 5,757
Additional paid-in capital .......................................................... 79,673,514
Undistributed net investment income ................................................. 1,443,224
Accumulated net realized loss from investment transactions .......................... (292,515)
Net unrealized appreciation of investments .......................................... 8,533,659
------------
TOTAL NET ASSETS ......................................................................... $ 89,363,639
============
Net Asset Value Per Share of Common Stock ($89,363,639 / 5,757,094 shares outstanding) ... $15.52
======
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
Page 12
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Statement of Operations
For the Year Ended December 31, 2003
INVESTMENT INCOME:
Interest......................................................................... $ 6,630,868
-----------
EXPENSES:
Management fee (Note 2) ......................................................... 706,286
Auction agent fees .............................................................. 101,758
Audit and tax services .......................................................... 73,962
Legal ........................................................................... 71,944
Shareholder communications ...................................................... 71,719
Directors' fees ................................................................. 50,714
Transfer agent .................................................................. 27,375
Listing fees .................................................................... 22,500
Custody ......................................................................... 13,800
Insurance ....................................................................... 3,482
Other ........................................................................... 24,254
-----------
TOTAL EXPENSES .................................................................. 1,167,794
-----------
NET INVESTMENT INCOME ................................................................ 5,463,074
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 3):
Realized Gain From Investment Transactions (excluding short-term investments):
Proceeds from sales .......................................................... 72,255,882
Cost of securities sold ...................................................... 72,094,224
-----------
Net Realized Gain ............................................................... 161,658
-----------
Change in Net Unrealized Appreciation of Investments:
Beginning of year ............................................................ 7,934,821
End of year .................................................................. 8,533,659
-----------
Increase in Net Unrealized Appreciation ......................................... 598,838
-----------
Net Gain on Investments .............................................................. 760,496
-----------
Dividends Paid to Auction Rate Preferred Stockholders
From Net Investment Income ....................................................... (405,855)
-----------
Increase in Net Assets From Operations ............................................... $ 5,817,715
===========
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
Page 13
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Statements of Changes in Net Assets
For the Years Ended December 31,
2003 2002
------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income................................................. $ 5,463,074 $ 5,739,313
Net realized gain ................................................... 161,658 1,977,984
Increase in net unrealized appreciation............................... 598,838 2,975,015
Dividends paid to Auction Rate Preferred Stockholders
from net investment income ......................................... (405,855) (561,118)
----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS................................ 5,817,715 10,131,194
----------- -----------
DISTRIBUTIONS PAID TO COMMON STOCK SHAREHOLDERS FROM:
Net investment income................................................. (4,835,959) (4,527,379)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS PAID TO
COMMON STOCK SHAREHOLDERS........................................... (4,835,959) (4,527,379)
----------- -----------
INCREASE IN NET ASSETS..................................................... 981,756 5,603,815
NET ASSETS:
Beginning of year..................................................... 88,381,883 82,778,068
----------- -----------
END OF YEAR*.......................................................... $89,363,639 $88,381,883
=========== ===========
* Includes undistributed net investment income of: ........................ $1,443,224 $1,221,964
=========== ===========
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
Page 14
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Notes to Financial Statements
Note 1. Organization and Significant Accounting Policies
Salomon Brothers Municipal Partners Fund Inc. ("Fund"), (formerly known as
Municipal Partners Fund Inc.), was incorporated in Maryland on November 24, 1992
and is registered as a diversified, closed-end management investment company
under the Investment Company Act of 1940, as amended. The Board of Directors
authorized 100 million shares of $0.001 par value common stock. The Fund's
primary investment objective is to seek a high level of current income which is
exempt from federal income taxes, consistent with the preservation of capital.
As a secondary investment objective, the Fund intends to enhance portfolio value
by purchasing tax exempt securities that, in the opinion of Salomon Brothers
Asset Management Inc ("SBAM"), an indirect wholly-owned subsidiary of Citigroup
Inc. ("Citigroup"), may appreciate in value relative to other similar
obligations in the marketplace.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts and
disclosures in the financial statements. Actual amounts could differ from those
estimates.
SECURITIES VALUATION. Tax-exempt securities are valued by independent pricing
services which use prices provided by market-makers or estimates of market
values obtained from yield data relating to instruments or securities with
similar characteristics. Short-term investments having a maturity of 60 days or
less are valued at amortized cost which approximates market value. Securities
for which reliable quotations are not readily available are valued at fair value
as determined in good faith by, or under procedures established by, the Board of
Directors.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded on the trade date. Realized gains and losses on sales of securities are
calculated on the identified cost basis. Interest income is accrued on a daily
basis. The Fund amortizes premiums and accretes discounts on securities
purchased using the effective interest method.
FEDERAL INCOME TAXES. The Fund has complied and intends to continue to comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable
to regulated investment companies, and to distribute substantially all of its
income and capital gains, if any, to its shareholders. Therefore, no federal
income tax or excise tax provision is required. The character of income and
gains to be distributed are determined in accordance with income tax regulations
which may differ from GAAP.
Page 15
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Notes to Financial Statements (continued)
DIVIDENDS AND DISTRIBUTIONS. The Fund declares and pays dividends and
distributions to common shareholders monthly from net investment income, net
realized short-term capital gains and other sources, if necessary. Long-term
capital gains, if any, in excess of loss carryovers are expected to be
distributed annually. Dividends and distributions to common shareholders are
recorded on the ex-dividend date. Dividends and distributions to preferred
shareholders are accrued on a weekly basis and are determined as described in
Note 4. The amount of dividends and distributions from net investment income and
net realized gains are determined in accordance with federal income tax
regulations, which may differ from GAAP.
Note 2. Management and Advisory Fees and Other Transactions
SBAM acts as the investment adviser and administrator of the Fund. SBAM provides
all management, advisory and administration services for the Fund. As
compensation for its services, the Fund pays SBAM an investment management fee
at an annual rate of 0.55% of the Fund's average weekly net assets. For purposes
of calculating this fee, the liquidation value of any outstanding preferred
stock of the Fund is not deducted in determining the Fund's average weekly net
assets. This fee is calculated daily and paid monthly.
SBAM has delegated certain administrative services to Smith Barney Fund
Management LLC ("SBFM"), another indirect wholly-owned subsidiary of Citigroup,
pursuant to a Sub-Administration Agreement between SBAM and SBFM.
Note 3. Investments
During the year ended December 31, 2003, the aggregate cost of purchases and
proceeds from sales of investments (including maturities of long-term
investments, but excluding short-term investments) were as follows:
Purchases......................................................... $71,571,449
===========
Sales............................................................. $72,255,882
===========
At December 31, 2003, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were as follows:
Gross unrealized appreciation..................................... $8,629,979
Gross unrealized depreciation..................................... (107,862)
----------
Net unrealized appreciation....................................... $8,522,117
==========
Page 16
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Notes to Financial Statements (continued)
Note 4. Auction Rate Preferred Stock
On April 2, 1993, the Fund closed its public offering of 800 shares of $0.001
par value Auction Rate Preferred Stock ("Preferred Stock") at an offering price
of $50,000 per share. The Preferred Stock has a liquidation preference of
$50,000 per share plus an amount equal to accumulated but unpaid dividends
(whether or not earned or declared) and subject to certain restrictions, are
redeemable in whole or in part.
Dividend rates generally reset every 7 days and are determined by auction
procedures. The dividend rates on the Preferred Stock during the year ended
December 31, 2003 ranged from 0.750% to 1.490%. The weighted average dividend
rate for the year ended December 31, 2003 was 1.010%.
The Fund is subject to certain restrictions relating to the Preferred Stock. The
Fund may not declare dividends or make other distributions on shares of common
stock or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%. The Preferred Stock is also subject to
mandatory redemption at $50,000 per share plus any accumulated or unpaid
dividends, whether or not declared, if certain requirements relating to the
composition of the assets and liabilities of the Fund as set forth in its
Articles Supplementary are not satisfied.
The Preferred Stock, which are entitled to one vote per share, generally vote
with the common shares but vote separately as a class to elect two directors and
on certain matters affecting the rights of the Preferred Stock.
The issuance of preferred stock poses certain risks to holders of common stock,
including, among others the possibility of greater market price volatility and
in certain market conditions, the yield to holders of common stock may be
adversely affected.
The Fund is required to maintain certain asset coverages with respect to the
Preferred Stock. 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 Preferred Stock in order to meet the applicable
requirement. Additionally, failure to meet the foregoing asset requirements
would restrict the Fund's ability to pay dividends to common shareholders.
Note 5. Concentration of Credit Risk
Since the Fund invests a portion of its assets in issuers located in a single
state, it may be affected by economic and political developments in a specific
state or region. Certain debt obligations held by the Fund are entitled to the
benefit of insurance, standby letters of credit or other guarantees of banks or
other financial institutions.
Note 6. Events Subsequent to December 31, 2003
COMMON STOCK DIVIDENDS. On October 22, 2003, the Board of Directors of the Fund
declared two common share dividends from net investment income, each in the
Page 17
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Notes to Financial Statements (continued)
amount of $0.0700 per share, payable on January 30 and February 27, 2004 to
shareholders of record on January 13 and February 18, 2004, respectively. In
addition, on February 5, 2004, the Board of Directors of the Fund declared three
common share dividends from net investment income, each in the amount of $0.07
per share, payable on March 26, April 30 and May 28, 2004 to shareholders of
record on March 16, April 20 and May 18, 2004, respectively.
PREFERRED STOCK DIVIDENDS. The Board of Directors designated each of the
following dividend periods as a Special Rate Period. With each auction date, the
regular auction procedure resumes, subject to the Fund's ability to designate
any subsequent dividend period as a Special Rate Period.
Auction Commencement of Rate Effective Preferred
Date Rate Period Through Rate
--------------------------------------------------------------------------------
12/29/03 12/30/03 1/5/04 1.199%
1/5/04 1/6/04 1/12/04 1.200
1/12/04 1/13/04 1/19/04 1.020
1/16/04 1/20/04 1/26/04 1.080
1/26/04 1/27/04 2/2/04 1.050
2/2/04 2/3/04 2/9/04 1.020
--------------------------------------------------------------------------------
Note 7. Capital Loss Carryforward
At December 31, 2003 the Fund had, for Federal income tax purposes approximately
$280,000 of unused capital loss carryforwards available to offset future capital
gains expiring December 31, 2008. To the extent that these carryforward losses
are used to offset capital gains, it is probable that the gains so offset will
not be distributed.
In addition, the Fund had $576 of capital losses realized after October 31,
2003, which were deferred for tax purposes to the first day of the following
fiscal year.
Note 8. Income Tax Information and Distributions to Shareholders
The tax basis components of distributable earnings at December 31 were:
2003 2002
---------- ----------
Undistributed tax-exempt income ............... $1,443,224 $1,221,964
========== ==========
Accumulated capital losses .................... $ (280,397) $ (442,631)
========== ==========
Unrealized appreciation ....................... $8,522,117 $7,923,279
========== ==========
For the years ended December 31, 2003 and December 31, 2002, the difference
between book basis and tax basis unrealized depreciation for the Fund was
attributable primarily to wash sale loss deferrals.
Page 18
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Notes to Financial Statements (continued)
The tax character of distributions paid during the year ended December 31, was:
2003 2002
---------- ----------
Tax-exempt income ............................ $5,241,814 $5,088,497
========== ==========
Note 9. Additional Information
The Fund has received the following information from Citigroup Asset Management
("CAM"), the Citigroup business unit which includes the Fund's Investment
Manager and other investment advisory companies, all of which are indirect,
wholly-owned subsidiaries of Citigroup. CAM is reviewing its entry, through an
affiliate, into the transfer agent business in the period 1997-1999. As CAM
currently understands the facts, at the time CAM decided to enter the transfer
agent business, CAM sub-contracted for a period of five years certain of the
transfer agency services to a third party and also concluded a revenue guarantee
agreement with this sub-contractor providing that the sub-contractor would
guarantee certain benefits to CAM or its affiliates (the "Revenue Guarantee
Agreement"). In connection with the subsequent purchase of the sub-contractor's
business by an affiliate of the current sub-transfer agent (PFPC Inc.) used by
CAM on many of the funds it manages, this Revenue Guarantee Agreement was
amended, eliminating those benefits in exchange for arrangements that included a
one-time payment from the sub-contractor.
The Boards of CAM-managed funds (the "Boards") were not informed of the Revenue
Guarantee Agreement with the sub-contractor at the time the Boards considered
and approved the transfer agent arrangements. Nor were the Boards informed of
the subsequent amendment to the Revenue Guarantee Agreement when that occurred.
CAM has begun to take corrective actions. CAM will pay to the applicable funds
approximately $17 million (plus interest) that CAM and its affiliates received
from the Revenue Guarantee Agreement and its amendment. The Fund did not
implement the contractual agreement described above and therefore will not
receive any portion of the payment. CAM also plans an independent review to
verify that the transfer agency fees charged by CAM were fairly priced as
compared to competitive alternatives. CAM is instituting new procedures and
making changes designed to ensure no similar arrangements are entered into in
the future.
CAM has briefed the SEC, the New York State Attorney General and other
regulators with respect to this matter, as well as the U.S. Attorney who is
investigating the matter. CAM is cooperating with governmental authorities on
this matter, the ultimate outcome of which is not yet determinable.
The Fund's tansfer agent is EquiServe Trust Company, N.A., which is not
affiliated with CAM or PFPC Inc.
Page 19
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Financial Highlights
Data for a share of common stock outstanding throughout each year ended December
31, unless otherwise noted:
2003 2002 2001 2000 1999
-----------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR................. $15.35 $14.38 $14.25 $13.12 $14.92
------ ------ ------ ------ ------
INCOME (LOSS) FROM OPERATIONS:
Net investment income........................... 0.95 1.00 1.03 1.06 1.02
Net realized and unrealized gain (loss)......... 0.13 0.86 0.04 1.14 (1.77)
Dividends paid to Auction Rate Preferred
Stockholders from net investment income ...... (0.07) (0.10) (0.21) (0.29) (0.25)
------ ------ ------ ------ ------
Total Income (Loss) From Operations................ 1.01 1.76 0.86 1.91 (1.00)
------ ------ ------ ------ ------
DISTRIBUTIONS PAID TO COMMON STOCK
SHAREHOLDERS FROM:
Net investment income........................... (0.84) (0.79) (0.73) (0.78) (0.80)
------ ------ ------ ------ ------
Total Distributions Paid to Common
Stock Shareholders.............................. (0.84) (0.79) (0.73) (0.78) (0.80)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR....................... $15.52 $15.35 $14.38 $14.25 $13.12
====== ====== ====== ====== ======
PER SHARE MARKET VALUE, END OF YEAR................ $14.00 $13.40 $12.59 $12.0625 $10.9375
====== ====== ====== ======== ========
TOTAL RETURN, BASED ON MARKET PRICE(1)............. 11.07% 12.93% 10.52% 17.90% (17.52)%
RATIOS TO AVERAGE NET ASSETS
OF COMMON STOCK SHAREHOLDERS(2):
Operating expenses............................... 1.32% 1.34% 1.33% 1.36% 1.30%
Net investment income............................ 6.17% 6.70% 7.10% 7.84% 7.18%
NET ASSETS OF COMMON STOCK SHAREHOLDERS,
END OF YEAR (000S)............................... $89,364 $88,382 $82,778 $82,067 $75,513
PORTFOLIO TURNOVER RATE............................ 57% 71% 34% 31% 54%
AUCTION RATE PREFERRED STOCK:
Total Amount Outstanding (000s).................. $40,000 $40,000 $40,000 $40,000 $40,000
Asset Coverage Per Share......................... 161,705 160,478 153,473 152,584 144,391
Involuntary Liquidating Preference Per Share 50,000 50,000 50,000 50,000 50,000
Average Market Value Per Share................... 50,000 50,000 50,000 50,000 50,000
--------------------------------------------------------------------------------
(1) For purposes of this calculation, dividends on common shares are assumed to
be reinvested at prices obtained under the Fund's dividend reinvestment plan
and the broker commission paid to purchase or sell a share is excluded.
(2) Ratios calculated on the basis of income and expenses relative to the
average net assets of common shares and excludes the effect of dividend
payments to preferred stockholders.
Page 20
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Report of Independent Auditors
To the Board of Directors and Shareholders of
Salomon Brother Minicipal Partners Fund Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations, and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Salomon Brothers Municipal
Partners Fund Inc. ("Fund") at December 31, 2003, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and the financial highlights for each of the five years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 2003 by correspondence with the custodian, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 18, 2004
Page 21
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Additional Information (unaudited)
INFORMATION ABOUT DIRECTORS AND OFFICERS
The business and affairs of Salomon Brothers Municipal Partners Fund Inc.
("Fund") are managed under the direction of the Board of Directors. Information
pertaining to the Directors and Officers of the Fund is set forth below.
NUMBER OF
PORTFOLIOS ADVISED
BY SBAM(2)
TERM OF PRINCIPAL AND OVERSEEN BY
POSITION(S) OFFICE(1) AND OCCUPATION(S) DIRECTOR OTHER
HELD WITH LENGTH OF DURING PAST (INCLUDING BOARD MEMBERSHIPS
NAME, ADDRESS AND AGE FUND(1) TIME SERVED FIVE YEARS THE FUND) HELD BY DIRECTOR
-------------------------------------------------------------------------------------------------------------------
NON-INTERESTED
DIRECTORS:
Carol L. Colman Director and Since President, 33 None
Colman Consulting Co. Member of 2002 Colman
278 Hawley Road the Audit Consulting Co.
North Salem, NY 10560 Committee,
Age 58 Class I
Daniel P.Cronin Director and Since Associate General 30 None
Pfizer Inc. Member of 2002 Counsel, Pfizer Inc.
235 East 42nd Street the Audit
New York, NY 10017 Committee,
Age 57 Class II
Leslie H. Gelb Director and Since President, Emeritus 32 Director of
The Council on Member of 2001 and Senior Board two registered
Foreign Relations the Audit Fellow, The Council investment
58 East 68th Street Committee, on Foreign Relations; companies
New York, NY 10021 Class I formerly, Columnist, advised by
Age 66 Deputy Editorial Advantage
Page Editor and Advisers, Inc.
Editor, Op-Ed Page, ("Advantage")
The New York Times
William R. Hutchinson Director and Since President, W. R. 42 Director of
535 N. Michigan Member of the 2003 Hutchinson & Associated
Suite 1012 Nominating and Associates Inc., Banc-Corp.
Chicago, IL 60611 Audit Committees, formerly Group Vice
Age 61 Class III President, Mergers and
Acquisitions, BP Amoco
Riordan Roett Director and Since Professor and 32 The Latin
Johns Hopkins University Member of 1995 Director, Latin America Equity
1740 Massachusetts Ave, NW the Audit America Studies Fund, Inc.
Washington, DC 20036 Committee, Program, Paul H.
Age 66 Class III Nitze School of
Advanced International
Studies, The Johns
Hopkins University
Jeswald W. Salacuse Director and Since Henry J. Braker 32 Director of
Tufts University Member of 1993 Professor of two registered
The Fletcher School of Law the Audit Commercial Law and investment
& Diplomacy Committee, formerly Dean, The companies
160 Packard Avenue Class III Fletcher School of advised by
Medford, MA 02155 Law & Diplomacy, Advantage
Age 66 Tufts University
Page 22
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Additional Information (unaudited) (continued)
NUMBER OF
PORTFOLIOS ADVISED
BY SBAM(2)
TERM OF PRINCIPAL AND OVERSEEN BY
POSITION(S) OFFICE(1) AND OCCUPATION(S) DIRECTOR OTHER
HELD WITH LENGTH OF DURING PAST (INCLUDING BOARD MEMBERSHIPS
NAME, ADDRESS AND AGE FUND(1) TIME SERVED FIVE YEARS THE FUND) HELD BY DIRECTOR
-------------------------------------------------------------------------------------------------------------------
INTERESTED
DIRECTOR:
R. Jay Gerken, CFA(3) Director, Since Managing Director 221 None
Citigroup Asset Chairman 2002 of Citigroup Global
Management ("CAM") and Chief Markets Inc. ("CGM");
399 Park Avenue, 4th Floor Executive Officer, Chairman, President,
New York, NY 10022 Class II Chief Executive
Age 52 Officer and Director
of Smith Barney Fund
Management LLC
("SBFM") Travelers
Investment Adviser,
Inc. ("TIA") and Citi
Fund Management Inc.
("CFM"); President and
Chief Executive Officer
of certain mutual funds
associated with
Citigroup Inc.
("Citigroup"); Formerly
Portfolio Manager of
Smith Barney Allocation
Series Inc. (from 1996
to 2001) and Smith
Barney Growth and
Income Fund (from 1996
to 2000)
OFFICERS:
Peter J. Wilby, CFA President Since Managing Director N/A N/A
CAM 2002 of CGM and Salomon
399 Park Avenue, 4th Floor Brothers Asset
New York, NY 10022 Executive Vice 1994- Management Inc
Age 44 President 2002 ("SBAM")
Andrew B. Shoup Treasurer(4) Since Director of CAM; Senior N/A N/A
CAM 2004 Vice President and Chief
125 Broad Street, Administrative Officer of
10th Floor Senior Vice Since mutual funds associated
New York, NY 10004 President and 2003 with Citigroup; Treasurer
Age 47 Chief of certain mutual funds
Administrative associated with Citigroup;
Officer Head of International Funds
Administration of CAM
(from 2001 to 2003);
Director of Global Funds
Administration of CAM
from 2000 to 2001); Head
of U.S. Citibank Funds
Administration of CAM
(from 1998 to 2000)
Robert E.Amodeo Executive Vice Since Managing Director N/A N/A
CAM President 1999 of SBAM and CGM
399 Park Avenue, 4th Floor since December 2001;
New York, NY 10022 Director of SBAM
Age 38 and CGM since
December 1998;
Vice President of
SBAM and CGM
from January 1996
to December 1998
Page 23
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Additional Information (unaudited) (continued)
NUMBER OF
PORTFOLIOS ADVISED
BY SBAM(2)
TERM OF PRINCIPAL AND OVERSEEN BY
POSITION(S) OFFICE(1) AND OCCUPATION(S) DIRECTOR OTHER
HELD WITH LENGTH OF DURING PAST (INCLUDING BOARD MEMBERSHIPS
NAME, ADDRESS AND AGE FUND(1) TIME SERVED FIVE YEARS THE FUND) HELD BY DIRECTOR
-------------------------------------------------------------------------------------------------------------------
Frances M. Guggino Controller Since Vice President N/A N/A
CGM 2002 of CGM; Controller of
125 Broad Street, 10th Floor certain mutual funds
New York, NY 10004 associated with Citigroup
Age 45
Robert I. Frenkel Secretary Since Managing Director and N/A N/A
CAM and Chief 2003 General Counsel of
300 First Stamford Place Legal Officer Global Mutual Funds for
4th Floor CAM and its predecesor
Stamford, CT 06902 (since 1994); Secretary of
Age 48 CFM; Secretary and Chief
Legal Officer of mutual
funds associated with
Citigroup
--------------------------------------------------------------------------------
(1) The Fund's Board of Directors is divided into three classes: Class I, Class
II and Class III. The terms of office of the Class I, II and III Directors
expire at the Annual Meetings of Stockholders in the year 2006, year 2004
and year 2005, respectively, or thereafter in each case when their
respective successors are duly elected and qualified. The Fund's
executive officers are chosen each year at the first meeting of the Fund's
Board of Directors following the Annual Meeting of Stockholders, to hold
office until the meeting of the Board following the next Annual Meeting of
Stockholders and until their successors are duly elected and qualified.
(2) Number of portfolios advised by SBAM or affiliates of SBAM.
(3) Mr. Gerken is an "interested person" of the Fund as defined in the
Investment Company Act of 1940, as amended, because Mr. Gerken is an officer
of SBFM and certain of its affiliates.
(4) As of January 20, 2004.
Page 24
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Dividend Reinvestment Plan (unaudited)
Pursuant to certain rules of the Securities and Exchange Commission, the
following additional disclosure is provided.
Pursuant to the Fund's Dividend Reinvestment Plan ("Plan"), holders of Common
Stock whose shares of Common Stock are registered in their own names will be
deemed to have elected to have all distributions automatically reinvested by
EquiServe Trust Company, N.A. ("Plan Agent") in Fund shares pursuant to the
Plan, unless they elect to receive distributions in cash. Holders of Common
Stock who elect to receive distributions in cash will receive all distributions
in cash by check in dollars mailed directly to the holder by the Plan Agent as
dividend-paying agent. Holders of Common Stock who do not wish to have
distributions automatically reinvested should notify the Plan Agent at the
address below. Distributions with respect to Common Stock registered in the name
of a bank, broker-dealer or other nominee (i.e., in "street name") will be
reinvested under the Plan unless the service is not provided by the bank,
broker-dealer or other nominee or the holder elects to receive dividends and
distributions in cash. Investors who own shares registered in the name of a
bank, broker-dealer or other nominee should consult with such nominee as to
participation in the Plan through such nominee, and may be required to have
their shares registered in their own names in order to participate in the Plan.
The Plan Agent serves as agent for the holders of Common Stock in administering
the Plan. After the Fund declares a dividend on the Common Stock or determines
to make a capital gain distribution, the Plan Agent will, as agent for the
participants, receive the cash payment and use it to buy the Fund's Common Stock
in the open market, on the New YorkStock Exchange or elsewhere, for the
participants' accounts. The Fund will not issue any new shares of Common Stock
in connection with the Plan.
Participants have the option of making additional cash payments to the Plan
Agent, monthly, in a minimum amount of $250, for investment in the Fund's Common
Stock. The Plan Agent will use all such funds received from participants to
purchase shares of Common Stock in the open market on or about the first
business day of each month. To avoid unnecessary cash accumulations, and also to
allow ample time for receipt and processing by the Plan Agent, it is suggested
that participants send in voluntary cash payments to be received by the Plan
Agent approximately ten days before an applicable purchase date specified above.
A participant may withdraw a voluntary cash payment by written notice, if the
notice is received by the Plan Agent not less than 48 hours before such payment
is to be invested.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in an account, including information
needed by shareholders for personal and tax records. Shares of Common Stock in
the account of each Plan participant will be held by the Plan Agent in the name
of the participant, and each shareholder's proxy will include those shares
purchased pursuant to the Plan.
In the case of holders of Common Stock, such as banks, broker-dealers or other
nominees, who hold shares for others who are beneficial owners, the Plan Agent
will administer the Plan on the basis of the number of shares of Common Stock
Page 25
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Dividend Reinvestment Plan (unaudited) (continued)
certified from time to time by the holders as representing the total amount
registered in such holders' names and held for the account of beneficial owners
that have not elected to receive distributions in cash.
There is no charge to participants for reinvesting dividends or capital gains
distributions or voluntary cash payments. The Plan Agent's fees for the
reinvestment of dividends and capital gains distributions and voluntary cash
payments will be paid by the Fund. However, each participant will pay a pro rata
share of brokerage commissions incurred with respect to the Plan Agent's open
market purchases in connection with the reinvestment of dividends and
distributions and voluntary cash payments made by the participant. The receipt
of dividends and distributions under the Plan will not relieve participants of
any income tax which may be payable on such dividends or distributions.
Participants may terminate their accounts under the Plan by notifying the Plan
Agent in writing. Such termination will be effective immediately if notice in
writing is received by the Plan Agent not less than ten days prior to any
dividend or distribution record date. Upon termination, the Plan Agent will send
the participant a certificate for the full shares held in the account and a cash
adjustment for any fractional shares or, upon written instruction from the
participant, the Plan Agent will sell part or all of the participant's shares
and remit the proceeds to the participant, less a $2.50 fee plus brokerage
commission for the transaction.
Experience under the Plan may indicate that changes in the Plan are desirable.
Accordingly, the Fund and the Plan Agent reserve the right to terminate the Plan
as applied to any voluntary cash payments made and any dividend or distribution
paid subsequent to notice of the termination sent to all participants in the
Plan at least 30 days before the record date for the dividend or distribution.
The Plan also may be amended by the Fund or the Plan Agent upon at least 30
days' written notice to participants in the Plan.
All correspondence concerning the Plan should be directed tothe Plan Agent, P.O.
Box 43010, Providence, Rhode Island 02940-3010.
___________________________________
This report is transmitted to the shareholders of Salomon Brothers Municipal
Partners Fund Inc. for their information. This is not a prospectus, circular or
representation intended for use in the purchase of shares of the Fund or any
securities mentioned in this report.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock in the open market.
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 1-800-446-1013 and by
visiting the SEC's web site at www.sec.gov.
Page 26
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Tax Information (unaudited)
For Federal tax purposes, the Fund hereby designates for the fiscal year ended
December 31, 2003:
o 100% of the dividends paid by the Fund from net investment income as tax
exempt for regular Federal income tax purposes.
Page 27
SALOMON BROTHERS MUNICIPAL PARTNERS FUND INC.
Directors Salomon Brothers Municipal Partners
Fund Inc.
CAROL L. COLMAN
DANIEL P. CRONIN 125 Broad Street
10th Floor, MF-2
LESLIE H. GELB New York, New York 10004
Telephone 1-888-777-0102
R. JAY GERKEN, CFA
INVESTMENT MANAGER
WILLIAM R. HUTCHINSON Salomon Brothers Asset Management Inc
399 Park Avenue
RIORDAN ROETT New York, New York 10022
JESWALD W. SALACUSE AUCTION AGENT
Deutsche Bank
60 Wall Street
New York, New York 10005
Officers
CUSTODIAN
R. JAY GERKEN, CFA State Street Bank and Trust Company
Chairman and 225 Franklin Street
Chief Executive Officer Boston, Massachusetts 02110
PETER J. WILBY, CFA DIVIDEND DISBURSING AND TRANSFER AGENT
President EquiServe Trust Company, N.A.
P.O. Box 43010
ANDREW B. SHOUP* Providence, Rhode Island 02940-3010
Senior Vice President, Chief
Administrative Officer LEGAL COUNSEL
and Treasurer Simpson Thacher & Bartlett LLP
425 Lexington Avenue
ROBERT E. AMODEO New York, New York 10017
Executive Vice President
INDEPENDENT AUDITORS
FRANCES M. GUGGINO PricewaterhouseCoopers LLP
Controller 1177 Avenue of the Americas
New York, New York 10036
ROBERT I. FRENKEL
Secretary and NEW YORK STOCK EXCHANGE SYMBOL
Chief Legal Officer MNP
-----------
* Elected Treasurer as of January 20, 2004.
Page 28
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[This page intentionally left blank.)
Salomon Brothers
Municipal Partners
Fund Inc.
Annual Report
DECEMBER 31, 2003
[LOGO]
EquiServe Trust Company, N.A.
P.O. Box 43010
Providence, Rhode Island 02940-3010
MNPANN 12/03
04-6074
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Directors of the registrant has determined that William R.
Hutchinson, the Chairman of the Board's Audit Committee, possesses the
technical attributes identified in Instruction 2(b) of Item 3 to Form
N-CSR to qualify as an "audit committee financial expert," and has
designated Mr. Hutchinson as the Audit Committee's financial expert.
Mr. Hutchinson is an "independent" Director pursuant to paragraph
(a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees for Salomon Brothers Municipal Partners
Fund Inc. were $40,000 and $40,000 for the years
ended 12/31/03 and 12/31/02, respectively.
(b) Audit-Related Fees for Salomon Brothers Municipal
Partners Fund Inc. of $30,000 and $29,000 for the
years ended 12/31/03 and 12/31/02. These amounts
represent procedures performed and prepared for
agreed upon procedures letter in accordance with the
terms of the Supplementary Articles.
In addition, aggregate Audit-Related Fees billed in
the years ended 12/31/03 and 12/31/02 for assurance
and related services by the Accountant to the
Registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by
another investment adviser), and any entity
controlling, controlled by or under common control
with the investment adviser that provides ongoing
services to the Salomon Brothers Municipal Partners
Fund Inc. ("service affiliates"), that were
reasonably related to the performance of the annual
audit of the service affiliates. Accordingly, there
were no such fees that required pre-approval by the
Audit Committee for the period from May 6, 2003 to
December 31, 2003 (prior to May 6, 2003 services
provided by the Accountant were not required to be
pre-approved).
(c) Tax Fees for Salomon Brothers Municipal Partners Fund
Inc. of $3,000 and $3,000 for the years ended
12/31/03 and 12/31/02. These amounts represent
aggregate fees paid for tax compliance, tax advice
and tax planning services, which include (the filing
and amendment of federal, state and local income tax
returns, timely RIC qualification review and tax
distribution and analysis planning) rendered by the
Accountant to Salomon Brothers Municipal Partners
Fund Inc.
There were no fees billed for tax services by the
Accountants to service affiliates for the period May
6, 2003 through December 31, 2003 that required
pre-approval by the Audit Committee.
(d) There were no All Other Fees for Salomon Brothers
Municipal Partners Fund Inc. for the years ended
12/31/03 and 12/31/02.
ALL OTHER FEES. The aggregate fees billed for all
other non-audit services rendered by the Accountant
to Salomon Brothers Asset Management ("SBAM"), and
any entity controlling, controlled by or under common
control with SBAM that provided ongoing services to
Salomon Brothers Municipal Partners Fund Inc.,
requiring pre-approval by the Audit Committee for the
period May 6, 2003 through December 31, 2003, which
included the issuance of reports on internal control
under SAS No. 70 relating to various Citigroup Asset
Management ("CAM") entities, were $558,750; all of
which were pre-approved by the Audit Committee.
(e) (1) Audit Committee's pre-approval policies and
procedures described in paragraph (c) (7) of Rule
2-01 of Regulation S-X. The Charter for the Audit
Committee (the "Committee") of the Board of each
registered investment company (the "Fund") advised by
Smith Barney Fund Management LLC or Salomon Brothers
Asset Management Inc. or one of their affiliates
(each, an "Adviser") requires that the Committee
shall approve (a) all audit and permissible non-audit
services to be provided to the Fund and (b) all
permissible non-audit services to be provided by the
Fund's independent auditors to the Adviser and any
Covered Service Providers if the engagement relates
directly to the operations and financial reporting of
the Fund. The Committee may implement policies and
procedures by which such services are approved other
than by the full Committee.
The Committee shall not approve non-audit services
that the Committee believes may impair the
independence of the auditors. As of the date of the
approval of this Audit Committee Charter, permissible
non-audit services include any professional services
(including tax services), that are not prohibited
services as described below, provided to the Fund by
the independent auditors, other than those provided
to the Fund in connection with an audit or a review
of the financial statements of the Fund. Permissible
non-audit services may not include: (i) bookkeeping
or other services related to the accounting records
or financial statements of the Fund; (ii) financial
information systems design and implementation; (iii)
appraisal or valuation services, fairness opinions or
contribution-in-kind reports; (iv) actuarial
services; (v) internal audit outsourcing services;
(vi) management functions or human resources; (vii)
broker or dealer, investment adviser or investment
banking services; (viii) legal services and expert
services unrelated to the audit; and (ix) any other
service the Public Company Accounting Oversight Board
determines, by regulation, is impermissible.
Pre-approval by the Committee of any permissible
non-audit services is not required so long as: (i)
the aggregate amount of all such permissible
non-audit services provided to the Fund, the Adviser
and any service providers controlling, controlled by
or under common control with the Adviser that provide
ongoing services to the Fund ("Covered Service
Providers") constitutes not more than 5% of the total
amount of revenues paid to the independent auditors
during the fiscal year in which the permissible
non-audit services are provided to (a) the Fund, (b)
the Adviser and (c) any entity controlling,
controlled by or under common control with the
Adviser that provides ongoing services to the Fund
during the fiscal year in which the services are
provided that would have to be approved by the
Committee; (ii) the permissible non-audit services
were not recognized by the Fund at the time of the
engagement to be non-audit services; and (iii) such
services are promptly brought to the attention of the
Committee and approved by the Committee (or its
delegate(s)) prior to the completion of the audit.
(f) N/A
(g) Non-audit fees billed by the Accountant for services
rendered to Salomon Brothers Municipal Partners Fund
Inc. and CAM and any entity controlling, controlled
by, or under common control with CAM that provides
ongoing services to Salomon Brothers Municipal
Partners Fund Inc. were $18.3 million and $6.4
million for the years ended 12/31/2003 and
12/31/2002.
(h) Yes. The Salomon Brothers Municipal Partners Fund
Inc.'s Audit Committee has considered whether the
provision of non-audit services that were rendered to
Service Affiliates which were not pre-approved (not
requiring pre-approval) is compatible with
maintaining the Auditor's independence. All services
provided by the Accountant to the Salomon Brothers
Municipal Partners Fund Inc. or to Service Affiliates
which were required to be pre-approved were
pre-approved as required.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The Board of Directors of the Fund has delegated the authority to
develop policies and procedures relating to proxy voting to the
Manager. The Manager is part of Citigroup Asset Management ("CAM"), a
group of investment adviser affiliates of Citigroup, Inc.
("Citigroup"). Along with the other investment advisers that comprise
CAM, the Manager has adopted a set of proxy voting policies and
procedures (the "Policies") to ensure that the Manager votes proxies
relating to equity securities in the best interest of clients.
In voting proxies, the Manager is guided by general fiduciary
principles and seeks to act prudently and solely in the best interest
of clients. The Manager attempts to consider all factors that could
affect the value of the investment and will vote proxies in the manner
that it believes will be consistent with efforts to maximize
shareholder values. The Manager may utilize an external service
provider to provide it with information and/or a recommendation with
regard to proxy votes. However, such recommendations do not relieve the
Manager of its responsibility for the proxy vote.
In the case of a proxy issue for which there is a stated position in
the Policies, CAM generally votes in accordance with such stated
position. In the case of a proxy issue for which there is a list of
factors set forth in the Policies that CAM considers in voting on such
issue, CAM votes on a case-by-case basis in accordance with the general
principles set forth above and considering such enumerated factors.
In the case of a proxy issue for which there is no stated position or
list of factors that CAM considers in voting on such issue, CAM votes
on a case-by-case basis in accordance with the general principles set
forth above. Issues for which there is a stated position set forth in
the Policies or for which there is a list of factors set forth in the
Policies that CAM considers in voting on such issues fall into a
variety of categories, including election of directors, ratification of
auditors, proxy and tender offer defenses, capital structure issues,
executive and director compensation, mergers and corporate
restructurings, and social and environmental issues. The stated
position on an issue set forth in the Policies can always be
superseded, subject to the duty to act solely in the best interest of
the beneficial owners of accounts, by the investment management
professionals responsible for the account whose shares are being voted.
Issues applicable to a particular industry may cause CAM to abandon a
policy that would have otherwise applied to issuers generally. As a
result of the independent investment advisory services provided by
distinct CAM business units, there may be occasions when different
business units or different portfolio managers within the same business
unit vote differently on the same issue.
In furtherance of the Manager's goal to vote proxies in the best
interest of clients, the Manager follows procedures designed to
identify and address material conflicts that may arise between the
Manager's interests and those of its clients before voting proxies on
behalf of such clients. To seek to identify conflicts of interest, CAM
periodically notifies CAM employees (including employees of the
Manager) in writing that they are under an obligation (i) to be aware
of the potential for conflicts of interest with respect to voting
proxies on behalf of client accounts both as a result of their personal
relationships and due to special circumstances that may arise during
the conduct of CAM's and the Manager's business, and (ii) to bring
conflicts of interest of which they become aware to the attention of
compliance personnel. The Manager also maintains and considers a list
of significant relationships that could present a conflict of interest
for the Manager in voting proxies. The Manager is also sensitive to the
fact that a significant, publicized relationship between an issuer and
a non-CAM affiliate might appear to the public to influence the manner
in which the Manager decides to vote a proxy with respect to such
issuer. Absent special circumstances or a significant, publicized
non-CAM affiliate relationship that CAM or the Manager for prudential
reasons treats as a potential conflict of interest because such
relationship might appear to the public to influence the manner in
which the Manager decides to vote a proxy, the Manager generally takes
the position that non-CAM relationships between Citigroup and an issuer
(e.g. investment banking or banking) do not present a conflict of
interest for the Manager in voting proxies with respect to such issuer.
Such position is based on the fact that the Manager is operated as an
independent business unit from other Citigroup business units as well
as on the existence of information barriers between the Manager and
certain other Citigroup business units.
CAM maintains a Proxy Voting Committee, of which the Manager personnel
are members, to review and address conflicts of interest brought to its
attention by compliance personnel. A proxy issue that will be voted in
accordance with a stated position on an issue or in accordance with the
recommendation of an independent third party is not brought to the
attention of the Proxy Voting Committee for a conflict of interest
review because the Manager's position is that to the extent a conflict
of interest issue exists, it is resolved by voting in accordance with a
pre-determined policy or in accordance with the recommendation of an
independent third party. With respect to a conflict of interest brought
to its attention, the Proxy Voting Committee first determines whether
such conflict of interest is material. A conflict of interest is
considered material to the extent that it is determined that such
conflict is likely to influence, or appear to influence, the Manager's
decision-making in voting proxies. If it is determined by the Proxy
Voting Committee that a conflict of interest is not material, the
Manager may vote proxies notwithstanding the existence of the conflict.
If it is determined by the Proxy Voting Committee that a conflict of
interest is material, the Proxy Voting Committee is responsible for
determining an appropriate method to resolve such conflict of interest
before the proxy affected by the conflict of interest is voted. Such
determination is based on the particular facts and circumstances,
including the importance of the proxy issue and the nature of the
conflict of interest. Methods of resolving a material conflict of
interest may include, but are not limited to, disclosing the conflict
to clients and obtaining their consent before voting, or suggesting to
clients that they engage another party to vote the proxy on their
behalf.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal
financial officer have concluded that the registrant's
disclosure controls and procedures (as defined in Rule 30a-
3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act")) are effective as of a date within 90 days of the
filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the
disclosure controls and procedures required by Rule 30a-3(b)
under the 1940 Act and 15d-15(b) under the Securities Exchange
Act of 1934.
(b) There were no changes in the registrant's internal control
over financial reporting (as defined in Rule 30a-3(d) under
the 1940 Act) that occurred during the registrant's last
fiscal half-year (the registrant's second fiscal half-year in
the case of an annual report) that have materially affected,
or are likely to materially affect the registrant's internal
control over financial reporting.
ITEM 10. EXHIBITS.
(a) Code of Ethics attached hereto.
Exhibit 99.CODE ETH
(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.
Salomon Brothers Municipal Partners Fund Inc.
By: /s/ R. Jay Gerken R. Jay Gerken
Chief Executive Officer of
Salomon Brothers Municipal Partners Fund Inc.
Date: March 8, 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
Salomon Brothers Municipal Partners Fund Inc.
Date: March 8, 2004
By: /s/ Andrew B. Shoup
Andrew B. Shoup
Chief Administrative Officer of
Salomon Brothers Municipal Partners Fund Inc.
Date: March 8, 2004