<DOCUMENT>
<TYPE>N-30D
<SEQUENCE>1
<FILENAME>dn30d.txt
<DESCRIPTION>MANAGED MUNICIPALS PORTFOLIO INC.
<TEXT>
<PAGE>

                              Managed Municipals
                                Portfolio Inc.


                                   [GRAPHIC]



                               QUARTERLY REPORT

                               February 28, 2002

<PAGE>

                                   [GRAPHIC]



                              Managed Municipals
                                Portfolio Inc.

Dear Shareholder:

   We are pleased to provide the quarterly report for Managed Municipals
Portfolio Inc. ("Fund") for the nine months ended February 28, 2002. In this
report, we summarize the period's prevailing economic and market conditions and
outline our investment strategy. A detailed summary of the Fund's performance
can be found in the appropriate sections that follow. We hope you find this
report to be useful and informative.

   During the period, the Fund distributed income dividends to shareholders
totaling $0.45 per share. The table below details the annualized distribution
rate and the nine-month total return for the Fund based on its February 28,
2002 net asset value ("NAV") per share and the New York Stock Exchange ("NYSE")
closing price./1/

<TABLE>
<CAPTION>
                  Price          Annualized         Nine-Month
                  Per Share  Distribution Rate/2/ Total Return/2/
                  ------     -------------------  --------------
               <S>           <C>                  <C>
               $11.84 (NAV)         5.07%              5.18%
               $10.75 (NYSE)        5.58%              5.07%
</TABLE>

-----
1The NAV is calculated by subtracting total liabilities 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 Fund's shares
 outstanding. The NAV fluctuates with the changes in the market price of the
 securities in which the Fund has invested. However, the price at which an
 investor may buy or sell shares of the Fund is at their market (NYSE) price as
 determined by supply of and demand for the Fund's shares.

2Total returns are based on changes in NAV or the market value, respectively.
 Total returns assume the reinvestment of all dividends and/or capital gains
 distributions in additional shares. Annualized distribution rate is the Fund's
 current monthly income dividend rate, annualized, and then divided by the NAV
 or the maket value noted in this report. This annualized distribution rate
 assumes a current monthly income dividend rate of $0.050 for 12 months. This
 rate is as of March 31, 2002 and is subject to change. The important
 difference between a total return and an annualized distribution rate is that
 the total return takes into consideration a number of factors including the
 fluctuation of the NAV or the market value during the period reported. The NAV
 fluctuation includes the effects of unrealized appreciation or depreciation in
 the Fund. Accordingly, since an annualized distribution rate only reflects the
 current monthly income dividend rate annualized, it should not be used as the
 sole indicator to judge the return you receive from your Fund investment. Past
 performance is not indicative of future results.

                                   [GRAPHIC]

                                       1

<PAGE>

   During the period, the Fund generated a total return based on NAV of 5.18%.
In comparison, the Fund's Lipper Inc. ("Lipper")/3/ peer group of general and
insured municipal funds (unleveraged) returned 4.27% for the same period.

Special Notice to Shareholders

   At the time this report was prepared, a plan to merge Managed Municipals
Portfolio II Inc. into Managed Municipals Portfolio Inc. was awaiting
shareholder approval. If the plan is approved, shareholders of Managed
Municipals Portfolio II Inc. will become shareholders of Managed Municipals
Portfolio Inc.

Investment Objective

   The Fund seeks as high a level of current income exempt from Federal income
tax as is consistent with the preservation of principal./4/

Market Overview and Outlook

   The U.S. Federal Reserve Board ("Fed") lowered short-term interest rates
eleven times in 2001, effectively reducing the federal funds rate ("fed funds
rate")/5/ to its lowest level in several decades. In addition, after September
11th, the Fed injected $190 billion in liquidity into the system in the form of
loans to banks and investment dealers. We believe that both of these actions
provided a much-needed boost to an economy that is now showing some very early
signs of recovery.

   Although the economy may limp along for another quarter or two, we believe
that it is probably in the early stages of recovery and that a fairly powerful
economic recovery should gain momentum by late 2002. However, this recovery
could possibly be slowed by lingering skepticism about truthfulness in
corporate accounting practices, along with some possible delays in corporate
earnings releases for the first two or three quarters of 2002 as

-----
3Lipper is a major independent mutual fund tracking organization.
4Certain 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.
5The fed funds rate is the interest rate that banks with excess reserves at a
 Federal Reserve district bank charge other banks that need overnight loans.
 The fed funds rate often points to the direction of U.S. interest rates.

                                   [GRAPHIC]

                                      2

<PAGE>

executives check and double-check their financial reports before releasing
them. We also believe that corporate profits may be somewhat disappointing for
the first six to eight months of the year but will improve enough to exceed
investor expectations by late 2002 and early 2003. In our opinion, the fiscal
stimulus package that was passed by Congress in early 2002 should help the
economy because it was aimed at corporations -- which we believe led the
economy into recession. In our view, the fact that the package was smaller than
anticipated should not prevent its effectiveness.

   With this economic scenario in mind, we believe the Fed will most likely
keep interest rates steady until the economy is on solid footing. Its
aggressive reductions of the fed funds rate in 2001 were designed to bring
short-term interest rates down to a level that would be so compellingly
unattractive that investors might be inspired to begin moving the massive
amounts of money that they had transferred into money market funds back into
the stock and bond market, and into the economy in general. Massive amounts of
money remain on the sidelines. In March 2002, money market funds contained
roughly $2.35 trillion -- which represents roughly 26% of the entire Wilshire
5000 Total Market Index./6/ We believe the Fed wants to be certain that those
funds are flowing back into the market before considering any rate hikes.

   Although recent activity in the bond market indicates that an economic
recovery may be imminent, we believe this optimism may be slightly premature.
For the next six to eight months, we anticipate the bond market will remain an
attractive market for investors. One of the reasons municipal bonds were so
attractively priced at the end of the period is that there were roughly $290
billion in new issues in 2001 -- the second-highest issuance level on record.
However, much of this issuance was from refinancings, not from newly issued
products. In 2002, we believe roughly $200 billion of new issuance will occur,
which, in our view, could help municipal bonds outperform most other
fixed-income products during the next 12 to 18 months. We believe there will be
a significant drop in supply over the next year or two, with the exception of a
large energy-related issuance in California. Because we anticipate a shortage
of supply with continued high demand, we believe that municipal bonds will
perform well versus their taxable counterparts going forward.

-----
6The Wilshire 5000 Total Market Index is the broadest stock market indicator
 covering the performance of the entire U.S. equity market, which consists of
 over 7,000 U.S. headquartered equity securities individually weighted by
 market capitalization. Please note that an investor cannot invest directly in
 an index.

                                   [GRAPHIC]

                                      3

<PAGE>

Fund Outlook

   In general, we anticipate maintaining a fairly aggressive stance during the
next several months. We are currently focusing on high-grade obligations with
an average maturity of roughly 20 years with lower credit risk. As the economy
improves, we anticipate transferring some cash to the sidelines and taking a
slightly more conservative stance than we have taken in the past several years.

   Thank you for investing in the Managed Municipals Portfolio Inc.

Sincerely,

/s/ Heath B. McLendon         /s/ Joseph P. Deane
Heath B. McLendon             Joseph P. Deane
Chairman                      Vice President and
                              Investment Officer

March 12, 2002

The information provided in this letter represents the opinion of the manager
and is not intended to be a forecast of future events, a guarantee of future
results nor investment advice. Further, there is no assurance that certain
securities will remain in or out of the Fund. Please refer to pages 6 through
14 for a list and percentage breakdown of the Fund's holdings. Also, please
note any discussion of the Fund's holdings is as of February 28, 2002 and is
subject to change.

                                   [GRAPHIC]

                                      4

<PAGE>


 Take Advantage of the Fund's Dividend Reinvestment Plan!
 Did you know that Fund investors who reinvest their dividends are taking
 advantage of one of the most effective wealth-building tools available today?
 Systematic investments put time to work for you through the strength of
 compounding.

 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, 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), or if the Fund declares a dividend or
 capital gains distribution payable only in cash, PFPC Global Fund Services
 ("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 this report
 beginning on page 28.

 To find more detailed information about the Plan and about how you can
 participate, please call PFPC Global Fund Services at (800) 331-1710.

                                   [GRAPHIC]


                                        5

<PAGE>




                            SCHEDULE OF INVESTMENTS
                         February 28, 2002 (unaudited)


<TABLE>
<CAPTION>
   Face
  Amount   Rating(a)                     Security                        Value
----------------------------------------------------------------------------------
<C>        <C>       <S>                                              <C>
 MUNICIPAL BONDS AND NOTES -- 100.0%
Alabama -- 0.8%
$3,160,000   AAA     Mobile County, AL Board of School
                      Commissioners, Capital Outlay Warrants,
                      Series B, AMBAC-Insured,
                      5.125% due 3/1/26                               $  3,161,106
----------------------------------------------------------------------------------
Alaska -- 1.1%
 4,000,000   AA+     Valdez, AK Marine Terminal Revenue
                      Refunding, BP Pipelines Inc. Project, Series A,
                      5.850% due 8/1/25                                  4,060,040
----------------------------------------------------------------------------------
Arizona -- 1.4%
 4,000,000   AAA     Mesa, AZ IDA, Discovery Health Systems,
                      Series A, MBIA-Insured, 5.625% due 1/1/29          4,167,600
 1,000,000   AA      Salt River Project, Agricultural Improvement &
                      Power District, Electric System Revenue,
                      5.000% due 1/1/31                                    993,880
----------------------------------------------------------------------------------
                                                                         5,161,480
----------------------------------------------------------------------------------
California -- 7.1%
 4,540,000   Ba1*    California Educational Facilities Authority
                      Revenue, (Pooled College & University
                      Projects), Series A, 5.625% due 7/1/23             4,238,317
 4,000,000   A3*     California Health Facilities Authority Revenue,
                      (Cedars-Sinai Medical Center), Series A,
                      6.250% due 12/1/34                                 4,285,760
 1,000,000   A+      California Health Facilities Financing Authority
                      Revenue, Sutter Health, Series A,
                      6.250% due 8/15/35                                 1,062,960
 5,000,000   AAA     Los Angeles County, CA COP, Antelope Valley
                      Courthouse, Series A, AMBAC-Insured,
                      5.250% due 11/1/33                                 5,083,100
 3,340,000   AAA     Rancho Cucamonga, CA Redevelopment
                      Agency Tax Allocation,
                      (Rancho Redevelopment Project),
                      MBIA-Insured, 5.125% due 9/1/30                    3,368,691
 2,000,000   AAA     Riverside, CA Unified School District GO,
                      Series A, FGIC-Insured, 5.000% due 2/1/27          1,988,620
 2,750,000   AAA     Sacramento County, CA COP, (Public Facilities
                      Project), MBIA-Insured, 5.375% due 2/1/19          2,899,682
 2,500,000   AAA     San Francisco, CA City & County Airports
                      Commission, International Airport Revenue,
                      Second Series-27B, FGIC-Insured,
                      5.000% due 5/1/22                                  2,521,775
</TABLE>

SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]

                                      6

<PAGE>




                            SCHEDULE OF INVESTMENTS
                   February 28, 2002 (unaudited) (continued)


<TABLE>
<CAPTION>
   Face
  Amount    Rating(a)                   Security                        Value
---------------------------------------------------------------------------------
<C>         <C>       <S>                                            <C>
California -- 7.1% (continued)
$ 1,000,000   AAA     San Jose, CA Redevelopment Agency Tax
                       Allocation, (Merged Area Redevelopment
                       Project), MBIA-Insured, 5.000% due 8/1/32     $    990,690
--------------------------------------------------------------------------------
                                                                       26,439,595
--------------------------------------------------------------------------------
Colorado -- 14.7%
  3,000,000   AAA     Arapahoe County, CO Capital Improvement
                       Trust Fund, E-470 Public Highway
                       Authority Revenue, (Pre-Refunded --
                       Escrowed with U.S. government
                       securities to 8/31/05 Call @ 103),
                       7.000% due 8/31/26                               3,506,520
  4,000,000   AAA     Colorado Educational & Cultural Facilities
                       Revenue Refunding, (University of Denver
                       Project), AMBAC-Insured,
                       5.375% due 3/1/23                                4,119,200
  3,000,000   A       Colorado Health Facilities Authority Revenue,
                       Series B, Remarketed 7/8/98,
                       5.350% due 8/1/15                                3,054,180
  2,000,000   BBB+    Colorado Springs, CO Airport Revenue,
                       Series A, 7.000% due 1/1/22 (b)                  2,055,800
 60,000,000   Aaa*    Dawson Ridge, CO Metropolitan District
                       No. 1, Series B, (Escrowed to maturity with
                       REFCO Strips), zero coupon due 10/1/22          16,983,600
                      Denver, CO City & County Airport Revenue,
                       Series C:
  3,155,000   A           6.750% due 11/15/22 (b)                       3,265,677
 10,165,000   A           6.125% due 11/15/25 (b)                      10,668,269
  8,160,000   A           Escrowed to maturity with U.S.
                           government securities,
                           6.125% due 11/15/25 (b)(c)                   9,400,646
    845,000   Aaa*        Pre-Refunded -- Escrowed with U.S.
                           government securities to 11/15/02 Call
                           @ 102, 6.750% due 11/15/22 (b)                 892,726
  1,000,000   AAA     Denver, CO City & County COP, Series B,
                       AMBAC-Insured, 5.500% due 12/1/25                1,033,420
--------------------------------------------------------------------------------
                                                                       54,980,038
--------------------------------------------------------------------------------
Connecticut -- 0.3%
  1,000,000   AAA     Connecticut State Health & Education, (Child
                       Care Facilities Project), Series C, AMBAC-
                       Insured, 5.625% due 7/1/29                       1,049,080
--------------------------------------------------------------------------------
</TABLE>


SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]

                                      7

<PAGE>




                            SCHEDULE OF INVESTMENTS
                   February 28, 2002 (unaudited) (continued)

<TABLE>
<CAPTION>
   Face
  Amount    Rating(a)                  Security                     Value
-----------------------------------------------------------------------------
<C>         <C>       <S>                                        <C>
Florida -- 8.0%
$ 3,000,000   AAA     Florida State Board & Educational Capital
                       Outlay GO, FSA-Insured,
                       5.000% due 6/1/24                         $  2,983,830
  3,000,000   AA+     Florida State Board of Education GO,
                       Series A, 5.125% due 6/1/21                  3,029,460
  1,145,000   AAA     Florida State Department of Transportation
                       GO, FGIC-Insured, 5.000% due 7/1/25          1,137,122
 10,000,000   A+      Jacksonville, FL Electric Authority,
                       Water & Sewer Revenue, Series A,
                       5.375% due 10/1/35                          10,004,400
  5,000,000   BBB-    Martin County, FL IDA, (Indiantown
                       Cogeneration Project), Series A,
                       7.875% due 12/15/25 (b)                      5,262,950
  1,000,000   AAA     Miami Beach, FL Stormwater Revenue,
                       FGIC-Insured, 5.375% due 9/1/30              1,018,970
  2,000,000   Aaa*    Orange County, FL School Board COP,
                       Series A, MBIA-Insured,
                       5.250% due 8/1/23                            2,032,500
                      Tampa, FL Revenue, (Florida Aquarium Inc.
                       Project), (Pre-Refunded -- Escrowed with
                       U.S. government securities to 5/1/02
                       Call @ 102):
  2,345,000   NR          7.550% due 5/1/12 (c)                     2,414,248
  2,000,000   NR          7.750% due 5/1/27 (c)                     2,059,680
-----------------------------------------------------------------------------
                                                                   29,943,160
-----------------------------------------------------------------------------
Georgia -- 2.3%
  3,500,000   AAA     Augusta, GA Water & Sewer Revenue,
                       FSA-Insured, 5.250% due 10/1/26              3,560,445
                      Private Colleges & Universities Authority
                       Revenue, (Mercer University Project):
  2,180,000   A3*         5.750% due 10/1/21                        2,224,232
  2,000,000   A3*         Series A, 5.250% due 10/1/25              1,997,240
  1,000,000   BBB-    Savannah, GA EDA Revenue, College of Art
                       & Design Inc., 6.900% due 10/1/29            1,048,430
-----------------------------------------------------------------------------
                                                                    8,830,347
-----------------------------------------------------------------------------
Hawaii -- 0.5%
  2,000,000   A       Hawaii State Department of Budget &
                       Finance, Special Purpose Revenue, Kaiser
                       Permanente, Series A, 5.100% due 3/1/14      1,994,660
-----------------------------------------------------------------------------
</TABLE>


SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]


                                      8

<PAGE>




                            SCHEDULE OF INVESTMENTS
                   February 28, 2002 (unaudited) (continued)

<TABLE>
<CAPTION>
   Face
  Amount    Rating(a)                   Security                       Value
--------------------------------------------------------------------------------
<C>         <C>       <S>                                           <C>
Illinois -- 6.9%
$ 4,095,000    AAA    Chicago, IL GO, Series D, FGIC-Insured,
                       5.500% due 1/1/35                            $  4,204,050
  6,000,000    AAA    Chicago, IL Skyway Toll Bridge Revenue,
                       AMBAC-Insured, 5.500% due 1/1/31                6,184,800
  8,000,000    A      Illinois Health Facilities Authority Revenue,
                       OSF Healthcare Systems,
                       6.250% due 11/15/29                             8,257,280
                      Illinois State GO:
  5,000,000    AAA      MBIA-Insured, 5.625% due 6/1/25                5,191,400
  2,000,000    AAA      Series 1, FGIC-Insured, 5.125% due 2/1/20      2,014,580
--------------------------------------------------------------------------------
                                                                      25,852,110
--------------------------------------------------------------------------------
Indiana -- 1.4%
  5,000,000    A1*    Indiana Port Commission Revenue Refunding,
                       (Cargill Inc. Project), 6.875% due 5/1/12       5,121,850
--------------------------------------------------------------------------------
Louisiana -- 1.5%
  5,500,000    A1*    St. Martin Parish, LA Industrial Revenue,
                       (Cargill Inc. Project), 6.625% due 10/1/12      5,693,930
--------------------------------------------------------------------------------
Maryland -- 0.1%
 10,000,000    NR     Maryland State Energy Financing
                       Administration, Solid Waste Disposal
                       Revenue, (Hagerstown Recycling Project),
                       9.000% due 10/15/16 (b)(d)                        350,000
--------------------------------------------------------------------------------
Massachusetts -- 0.5%
  2,000,000    AA+    Massachusetts Bay Transportation Authority,
                       Sales Tax Revenue, Series A,
                       5.500% due 7/1/30                               2,063,120
--------------------------------------------------------------------------------
Michigan -- 4.9%
  2,000,000    AAA    Anchor Bay, MI School District GO,
                       Q-SBLF-Insured, 5.000% due 5/1/29               1,959,120
  3,000,000    AAA    East Lansing, MI School District GO,
                       Q-SBLF-Insured, 5.625% due 5/1/30               3,120,030
  2,000,000    AAA    Howell, MI Public Schools GO,
                       Q-SBLF-Insured, 5.250% due 5/1/22               2,033,300
                      Michigan State COP, AMBAC-Insured:
  2,345,000    AAA     5.500% due 6/1/19                               2,444,100
  4,000,000    AAA     5.500% due 6/1/27                               4,130,640
  8,000,000    NR     Michigan State Strategic Fund Resources
                       Recovery, Limited Obligation Revenue,
                       Central Wayne Energy Recovery L.P.,
                       Series A, 7.000% due 7/1/27 (b)(d)              4,800,000
--------------------------------------------------------------------------------
                                                                      18,487,190
--------------------------------------------------------------------------------
</TABLE>

SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]


                                      9

<PAGE>




                            SCHEDULE OF INVESTMENTS
                   February 28, 2002 (unaudited) (continued)

<TABLE>
<CAPTION>
   Face
  Amount    Rating(a)                   Security                      Value
-------------------------------------------------------------------------------
<C>         <C>       <S>                                          <C>
Minnesota -- 2.5%
$ 1,500,000  AAA      Dakota County, MN Community
                       Development Agency, MFH Revenue,
                       FNMA-Collateralized,
                       5.625% due 2/1/26                           $  1,532,565
  2,500,000  A1*      Duluth, MN IDA, Seaway Port Authority,
                       Dock & Wharf Revenue, (Cargill Inc.
                       Project), 6.800% due 5/1/12                    2,560,925
                      Minneapolis & St. Paul, MN Community
                       Airport Revenue, FGIC-Insured:
  1,000,000  AAA          Series A, 5.125% due 1/1/25                   996,590
  3,000,000  AAA          Sub-Series C, 5.250% due 1/1/26             3,018,720
  1,225,000  AA+      Minnesota State Housing Financing
                       Agency, Single-Family Mortgage,
                       Series I, 5.500% due 1/1/17                    1,272,726
-------------------------------------------------------------------------------
                                                                      9,381,526
-------------------------------------------------------------------------------
Missouri -- 0.8%
  1,000,000  VMIG 1*  Missouri State Health & Educational
                       Facilities Authority, St. Louis University,
                       Series B, 1.350% due 10/1/24 (e)               1,000,000
  2,000,000  AAA      St. Louis, MO Airport Revenue, (Airport
                       Development Program), Series A,
                        MBIA-Insured, 5.000% due 7/1/21               2,011,700
-------------------------------------------------------------------------------
                                                                      3,011,700
-------------------------------------------------------------------------------
Montana -- 2.0%
  8,000,000  NR       Montana State Board Investment Resource
                       Recovery Revenue, (Yellowstone Energy
                       L.P. Project), 7.000% due 12/31/19 (b)         7,460,720
-------------------------------------------------------------------------------
Nevada -- 0.9%
  3,500,000  AAA      Truckee Meadows, NV Water Authority
                       Revenue, Series A, FSA-Insured,
                       5.000% due 7/1/25                              3,428,950
-------------------------------------------------------------------------------
New Jersey -- 3.5%
  5,200,000  A+       Hudson County, NJ Improvement
                       Authority, 6.625% due 8/1/25                   5,361,876
  5,000,000  A+       New Jersey Health Care Facilities
                       Financing Authority Revenue, Robert
                       Wood Johnson University Hospital,
                       5.700% due 7/1/20                              5,235,500
  2,395,000  AA-      New Jersey State Highway Authority,
                       Garden State Parkway General Revenue,
                       5.625% due 1/1/30                              2,526,102
-------------------------------------------------------------------------------
                                                                     13,123,478
-------------------------------------------------------------------------------
</TABLE>


SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]


                                      10

<PAGE>




                            SCHEDULE OF INVESTMENTS
                   February 28, 2002 (unaudited) (continued)

<TABLE>
<CAPTION>
   Face
  Amount    Rating(a)                   Security                       Value
--------------------------------------------------------------------------------
<C>         <C>       <S>                                           <C>
New Mexico -- 0.5%
$ 1,670,000   AAA     New Mexico Mortgage Financing Authority,
                       Single-Family Mortgages, Series D-3,
                       5.625% due 9/1/28                            $  1,710,147
--------------------------------------------------------------------------------
New York -- 4.5%
  3,000,000   AAA     Nassau Health Care Corp., NY Health
                       Systems Revenue, Nassau County
                       Guaranteed, FSA-Insured,
                       5.750% due 8/1/29                               3,164,730
  3,500,000   AA      New York City, NY Municipal Water
                       Financing Authority, Water & Sewer
                       System Revenue, Series D,
                       5.250% due 6/15/25                              3,546,900
  3,000,000   AAA     New York State Dormitory Authority
                       Revenue, Series B, FSA-Insured,
                       5.500% due 5/15/30                              3,108,720
  3,000,000   AAA     New York State Thruway Authority,
                       Highway & Bridge Revenue, Series B-1,
                       FGIC-Insured, 5.400% due 4/1/17                 3,151,290
  4,000,000   AA-     Triborough Bridge & Tunnel Authority, NY
                       GO, Series A, 5.000% due 1/1/32                 3,914,760
--------------------------------------------------------------------------------
                                                                      16,886,400
--------------------------------------------------------------------------------
North Dakota -- 2.1%
  8,000,000   AAA     Oliver County, ND PCR, AMBAC-Insured,
                       5.300% due 1/1/27                               8,061,040
--------------------------------------------------------------------------------
Ohio -- 11.4%
  4,500,000   Aa2*    Bexley, OH City School District GO,
                       5.125% due 12/1/27                              4,483,710
  2,000,000   AAA     Canton, OH City School District GO, Series A,
                       MBIA-Insured, 5.500% due 12/1/20                2,088,640
                      Cincinnati, OH Water System Revenue:
  1,345,000   AA+       5.000% due 12/1/20                             1,347,851
  1,700,000   AA+       5.125% due 12/1/21                             1,716,694
  4,500,000   AAA     Cleveland, OH Airport System Revenue,
                       Series A, FSA-Insured, 5.000% due 1/1/31        4,412,115
  2,000,000   AAA     Cuyahoga County, OH Hospital Revenue
                       Refunding, University Hospitals Health
                       System Inc., AMBAC-Insured,
                       5.500% due 1/15/30                              2,051,340
 10,000,000   Aaa*    Hamilton County, OH Sales Tax Revenue,
                       AMBAC-Insured, 5.250% due 12/1/32              10,103,900
</TABLE>

SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]

                                      11

<PAGE>




                            SCHEDULE OF INVESTMENTS
                   February 28, 2002 (unaudited) (continued)

<TABLE>
<CAPTION>
   Face
  Amount    Rating(a)                   Security                       Value
--------------------------------------------------------------------------------
<C>         <C>       <S>                                           <C>
Ohio -- 11.4% (continued)
$ 4,000,000   AAA     Lucas County, OH Hospital Revenue,
                       Promedia Healthcare Obligation Group,
                       AMBAC-Insured, 5.375% due 11/15/29           $  4,064,640
  3,025,000   Aaa*    Muskingum County, OH GO Refunding,
                       County Facilities Improvement,
                       MBIA-Insured, 5.125% due 12/1/19                3,084,018
  1,375,000   AAA     Ohio State Higher Educational Facility
                       Commission Revenue, (University of
                       Dayton Project), AMBAC-Insured,
                       5.500% due 12/1/25                              1,432,764
  2,500,000   AAA     Portage County, OH GO, MBIA-Insured,
                       5.250% due 12/1/17                              2,591,450
  1,500,000   Aaa*    Trumbull County, OH MBIA-Insured,
                       5.200% due 12/1/20                              1,537,005
  2,000,000   AAA     University of Cincinnati, OH General Receipts
                       Revenue, Series A, FGIC-Insured,
                       5.250% due 6/1/24                               2,036,320
  1,500,000   AAA     Warrensville Heights, OH City School
                       District, School Improvements,
                       FGIC-Insured, 5.625% due 12/1/20                1,592,850
--------------------------------------------------------------------------------
                                                                      42,543,297
--------------------------------------------------------------------------------
Oregon -- 2.2%
  3,210,000   AA      Clackamas County, OR Hospital Facilities
                       Authority Revenue, Legacy Health System,
                       5.750% due 5/1/16                               3,423,369
  5,000,000   Aaa*    Clackamas County, OR School District No.
                       007J GO, Lake Oswego, MBIA-Insured,
                       5.000% due 6/1/26                               4,964,900
--------------------------------------------------------------------------------
                                                                       8,388,269
--------------------------------------------------------------------------------
Pennsylvania -- 0.7%
  2,500,000   AAA     Allegheny County, PA Sanitary Authority,
                       Sewer Revenue, MBIA-Insured,
                       5.375% due 12/1/24                              2,559,350
--------------------------------------------------------------------------------
Puerto Rico -- 1.4%
  5,000,000   A-      Puerto Rico Public Finance Corp. Revenue,
                       Series E, 5.750% due 8/1/30                     5,108,800
--------------------------------------------------------------------------------
South Carolina -- 2.4%
  2,000,000   A3*     Myrtle Beach, SC COP, Myrtle Beach
                       Convention Center, (Pre-Refunded --
                       Escrowed with U.S. government
                        securities to 7/1/02 Call @ 102),
                        6.875% due 7/1/07 (c)                          2,075,500
</TABLE>

SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]

                                      12

<PAGE>




                            SCHEDULE OF INVESTMENTS
                   February 28, 2002 (unaudited) (continued)

<TABLE>
<CAPTION>
   Face
  Amount    Rating(a)                 Security                        Value
-------------------------------------------------------------------------------
<C>         <C>       <S>                                          <C>
South Carolina -- 2.4% (continued)
$ 3,000,000  AAA      South Carolina State Public Service
                       Authority Revenue, Series B, FSA-
                       Insured, 5.125% due 1/1/37                  $  2,963,760
                      South Carolina Transportation
                       Infrastructure Bank Revenue, Series A:
  3,000,000  AAA          AMBAC-Insured,
                           5.500% due 10/1/30                         3,101,310
  1,000,000  Aaa*         MBIA-Insured, 5.125% due 10/1/31              999,200
----------------------------------------------------------------------------
                                                                      9,139,770
----------------------------------------------------------------------------
Tennessee -- 1.4%
  1,150,000  NR       Hardeman County, TN Correctional
                       Facilities Corp., 7.750% due 8/1/17            1,144,767
                      Sevier County, TN Public Building
                       Authority, Local Government
                       Improvements:
    800,000  VMIG 1*      Project IV-H-1, 1.300% due 6/1/25 (e)         800,000
    100,000  VMIG 1*      Series IV-3, 1.300% due 6/1/25 (e)            100,000
  3,000,000  Aa2*         Tennessee State GO, Series A,
                           5.250% due 3/1/17                          3,116,940
----------------------------------------------------------------------------
                                                                      5,161,707
----------------------------------------------------------------------------
Texas -- 3.3%
  1,160,000  AAA      Burleson, TX ISD, GO, PSFG,
                       6.750% due 8/1/24                              1,285,164
                      Fort Worth, TX International Airport
                       Facility Improvement Corp. Revenue,
                       (American Airlines Inc. Project):
  8,000,000  BB-          6.375% due 5/1/35 (c)                       6,076,640
  2,000,000  BB-          Series A, 5.950% due 5/1/29 (b)             1,942,720
  2,000,000  BB-          Series B, 6.050% due 5/1/29 (b)             1,883,020
  1,000,000  AAA      Harris County, TX Health Facilities,
                       Development Corp., Hospital Revenue,
                       School Health Care Systems, Series B,
                       (Escrowed to maturity with U.S.
                       government securities),
                       5.750% due 7/1/27                              1,105,430
----------------------------------------------------------------------------
                                                                     12,292,974
----------------------------------------------------------------------------
Virginia -- 3.7%
                      Virginia State HDA, MFH:
  1,655,000  AA+        Series D, 6.250% due 1/1/15                   1,730,054
  1,235,000  AAA        Series H, AMBAC-Insured,
                         6.300% due 11/1/15                           1,305,346
</TABLE>

SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]

                                      13

<PAGE>




                            SCHEDULE OF INVESTMENTS
                   February 28, 2002 (unaudited) (continued)

<TABLE>
<CAPTION>
   Face
  Amount    Rating(a)                   Security                      Value
-------------------------------------------------------------------------------
<C>         <C>       <S>                                          <C>
Virginia -- 3.7% (continued)
$10,000,000    AAA      Series H, Sub-Series H-1, MBIA-Insured,
                         5.350% due 7/1/31                         $ 10,145,800
    600,000    AA+      Series K, 5.800% due 11/1/10                    640,380
-------------------------------------------------------------------------------
                                                                     13,821,580
-------------------------------------------------------------------------------
Washington -- 3.7%
                      Chelan County, WA GO, Public Utilities,
                       District No. 1, Columbus River Rock:
 22,685,000    AAA        Series A, MBIA-Insured,
                           zero coupon due 6/1/22                     7,731,275
  4,750,000    AA         Series B, Remarketed 7/1/92,
                           Mandatory put 7/1/19,
                           6.750% due 7/1/62 (b)                      5,139,738
  1,000,000    AAA    Washington State GO, Series 02-A,
                       FSA-Insured, 5.000% due 7/1/25                   979,700
-------------------------------------------------------------------------------
                                                                     13,850,713
-------------------------------------------------------------------------------
Wisconsin -- 1.5%
  4,070,000    AA-    Wisconsin State GO, Series B,
                       6.600% due 1/1/22 (b)                          4,128,038
                      Wisconsin State Health & Educational
                       Facilities Authority Revenue, MBIA-Insured:
  1,100,000    A          Kenosha Hospital & Medical Center
                           Project, 5.700% due 5/15/20                1,092,509
    250,000    AAA        The Medical College of Wisconsin Inc.
                           Project, MBIA-Insured,
                           5.400% due 12/1/16                           260,283
-------------------------------------------------------------------------------
                                                                      5,480,830
-------------------------------------------------------------------------------
                      TOTAL INVESTMENTS -- 100%
                      (COST -- $372,365,990**)                     $374,598,957
-------------------------------------------------------------------------------
</TABLE>
(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,
   Inc.
(b)Income from this issue is considered a preference item for purposes of
   calculating the alternative minimum tax.
(c)Pre-Refunded bonds escrowed by U.S. government securities and bonds escrowed
   to maturity with U.S. government securities are considered by the investment
   advisor to be triple-A rated even if issuer has not applied for new ratings.
(d)Security is currently in default.
(e)Variable rate obligation payable at par on demand at any time on no more
   than seven days notice.
** Aggregate cost for Federal income tax purposes is substantially the same.

    See pages 16 and 17 for definitions of ratings and certain security
    descriptions.

SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]


                                      14

<PAGE>




                  SUMMARY OF INVESTMENTS BY COMBINED RATINGS
                         February 28, 2002 (unaudited)


                                                   Percentage of
             Moody's  and/or   Standard & Poor's Total Investments

               Aaa                   AAA                52.4%
               Aa                     AA                12.6
               A                      A                 23.6
              Baa                    BBB                 2.2
               Ba                     BB                 3.8
             VMIG 1                  A-1                 0.5
               NR                     NR                 4.9
                                                       -----
                                                       100.0%
                                                       =====


                                   [GRAPHIC]

                                      15

<PAGE>




                                 BOND RATINGS
                                  (unaudited)


The definitions of the applicable rating symbols are set forth below:

Standard & Poor's Ratings Service ("Standard and Poor's") -- Ratings from "AA"
to "B" may be modified by the addition of a plus (+) or minus (-) sign to show
relative standings within the major rating categories.

<TABLE>
<C>   <S>
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
        they are 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" and "B" are regarded, on balance, as predominantly speculative
and B   with respect to the issuer's capacity to pay interest and repay principal in accordance
        with the terms of the obligation. "BB" indicates the lowest degree of speculation and
        "B" 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, Inc. ("Moody's") -- Numerical modifiers 1, 2 and 3 may be applied to
each generic rating from "Aa" to "Ba," 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 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 that are 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 thereby not well safeguarded during both good and bad times
        over the future. Uncertainty of position characterizes bonds in this class.
NR    --Indicates that the bond is not rated by Standard & Poor's or Moody's.
</TABLE>


                                   [GRAPHIC]

                                      16

<PAGE>




                          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.
P-1    --Moody's highest rating for commercial paper and for VRDO
         prior to the advent of the VMIG 1 rating.




                             SECURITY DESCRIPTIONS
                                  (unaudited)

ABAG   --Association of Bay Area Governments
AIG    --American International Guaranty
AMBAC  --AMBAC Indemnity Corporation
BAN    --Bond Anticipation Notes
BIG    --Bond Investors Guaranty
CDA    --Community Development Administration
CGIC   --Capital Guaranty Insurance Company
CHFCLI --California Health Facility Construction Loan Insurance
COP    --Certificate of Participation
EDA    --Economic Development Authority
ETM    --Escrowed To Maturity
FAIRS  --Floating Adjustable Interest Rate Securities
FGIC   --Financial Guaranty Insurance Company
FHA    --Federal Housing Administration
FHLMC  --Federal Home Loan Mortgage Corporation
FNMA   --Federal National Mortgage Association
FRTC   --Floating Rate Trust Certificates
FSA    --Financial Security Assurance
GIC    --Guaranteed Investment Contract
GNMA   --Government National Mortgage Association
GO     --General Obligation
HDA    --Housing Development Authority
HDC    --Housing Development Corporation
HFA    --Housing Finance Authority
IDA    --Industrial Development Authority
IDB    --Industrial Development Board
IDR    --Industrial Development Revenue
INFLOS --Inverse Floaters
ISD    --Independent School District
LOC    --Letter of Credit
MBIA   --Municipal Bond Investors Assurance Corporation
MFH    --Multi-Family Housing
MVRICS --Municipal Variable Rate Inverse Coupon Security
PCR    --Pollution Control Revenue
PFA    --Public Finance Authority
PSFG   --Permanent School Fund Guaranty
Q-SBLF --Qualified School Bond Loan Fund
RAN    --Revenue Anticipation Notes
RIBS   --Residual Interest Bonds
RITES  --Residual Interest Tax-Exempt Securities
SYCC   --Structured Yield Curve Certificate
TAN    --Tax Anticipation Notes
TECP   --Tax Exempt Commercial Paper
TOB    --Tender Option Bonds
TRAN   --Tax and Revenue Anticipation Notes
VAN    --Veterans Administration
VRDD   --Variable Rate Daily Demand
VRWE   --Variable Rate Wednesday Demand


                                   [GRAPHIC]

                                      17

<PAGE>




                      STATEMENT OF ASSETS AND LIABILITIES
                                  (unaudited)

<TABLE>
<CAPTION>
                                                               February 28, 2002
--------------------------------------------------------------------------------
<S>                                                            <C>
ASSETS:
  Investments, at value (Cost -- $372,365,990)                    $374,598,957
  Interest receivable                                                4,875,758
  Receivable for securities sold                                       190,000
-------------------------------------------------------------------------------
  Total Assets                                                     379,664,715
-------------------------------------------------------------------------------
LIABILITIES:
  Payable for securities purchased                                   1,980,200
  Dividends payable                                                    326,734
  Investment advisory fee payable                                       89,911
  Payable to bank                                                       73,803
  Administration fee payable                                            57,828
  Accrued expenses                                                     105,862
-------------------------------------------------------------------------------
  Total Liabilities                                                  2,634,338
-------------------------------------------------------------------------------
Total Net Assets                                                  $377,030,377
-------------------------------------------------------------------------------
NET ASSETS:
  Par value of capital shares                                    $      31,849
  Capital paid in excess of par value                              387,408,505
  Overdistributed net investment income                               (306,239)
  Accumulated net realized loss from security transactions         (12,336,705)
  Net unrealized appreciation of investments                         2,232,967
-------------------------------------------------------------------------------
Total Net Assets
 (Equivalent to $11.84 a share on 31,848,644 shares of $0.001
 par value outstanding; 500,000,000 shares authorized)            $377,030,377
-------------------------------------------------------------------------------
</TABLE>

SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]

                                      18

<PAGE>




                            STATEMENT OF OPERATIONS
                                  (unaudited)

<TABLE>
<CAPTION>
                                                             Nine Months Ended
                                                             February 28, 2002
------------------------------------------------------------------------------
<S>                                                          <C>
INVESTMENT INCOME:
 Interest                                                       $15,709,851
-----------------------------------------------------------------------------
EXPENSES:
 Investment advisory fee (Note 3)                                 1,981,420
 Administration fee (Note 3)                                        566,120
 Shareholder communications                                         120,668
 Shareholder and system servicing fees                               74,724
 Audit and legal                                                     42,541
 Directors' fees                                                     40,101
 Registration fees                                                   22,438
 Custody                                                             12,921
 Pricing service fees                                                12,063
 Other                                                               61,978
-----------------------------------------------------------------------------
 Total Expenses                                                   2,934,974
 Less: Investment advisory fee waiver (Note 3)                   (1,169,139)
-----------------------------------------------------------------------------
 Net Expenses                                                     1,765,835
-----------------------------------------------------------------------------
Net Investment Income                                            13,944,016
-----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 4):
 Realized Gain From Security Transactions
 (excluding short-term securities):
   Proceeds from sales                                           87,026,316
   Cost of securities sold                                       85,483,776
-----------------------------------------------------------------------------
 Net Realized Gain                                                1,542,540
-----------------------------------------------------------------------------
 Increase in Net Unrealized Appreciation (Note 1)                 2,097,842
-----------------------------------------------------------------------------
Net Gain on Investments                                           3,640,382
-----------------------------------------------------------------------------
Increase in Net Assets From Operations                         $ 17,584,398
-----------------------------------------------------------------------------
</TABLE>

SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]

                                      19

<PAGE>




                      STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
                                              Nine Months Ended
                                              February 28, 2002  Year Ended
                                                 (unaudited)    May 31, 2001
   --------------------------------------------------------------------------
   <S>                                        <C>               <C>
   OPERATIONS:
     Net investment income                      $ 13,944,016    $ 19,132,327
     Net realized gain                             1,542,540       3,688,224
     Increase in net unrealized appreciation       2,097,842      21,646,189
   --------------------------------------------------------------------------
     Increase in Net Assets From Operations       17,584,398      44,466,740
   --------------------------------------------------------------------------
   DISTRIBUTIONS TO SHAREHOLDERS
   FROM (NOTE 2):
     Net investment income                       (14,331,890)    (19,162,536)
   --------------------------------------------------------------------------
     Decrease in Net Assets From
      Distributions to Shareholders              (14,331,890)    (19,162,536)
   --------------------------------------------------------------------------
   FUND SHARE TRANSACTIONS (NOTE 8):
     Treasury stock acquired                              --      (3,648,358)
   --------------------------------------------------------------------------
     Decrease in Net Assets From
      Fund Share Transactions                             --      (3,648,358)
   --------------------------------------------------------------------------
   Increase in Net Assets                          3,252,508      21,655,846
   NET ASSETS:
     Beginning of period                         373,777,869     352,122,023
   --------------------------------------------------------------------------
     End of period*                             $377,030,377    $373,777,869
   --------------------------------------------------------------------------
   * Includes undistributed (overdistributed)
      net investment income of:                    $(306,239)        $22,877
   --------------------------------------------------------------------------
</TABLE>

SEE NOTES TO
FINANCIAL STATEMENTS.

========================
                                   [GRAPHIC]

                                      20

<PAGE>




                         NOTES TO FINANCIAL STATEMENTS
                                  (unaudited)

   1. SIGNIFICANT ACCOUNTING POLICIES

   Managed Municipals Portfolio Inc. ("Fund"), a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended, as a
non-diversified, closed-end management investment company.

   The significant accounting policies consistently followed by the Fund are:
(a) security transactions are accounted for on trade date; (b) securities are
valued at the mean between bid and ask prices provided by an independent
pricing service that are based on transactions in municipal obligations,
quotations from municipal bond dealers, market transactions in comparable
securities and various relationships between securities; (c) securities
maturing within 60 days or less are valued at cost plus accreted discount, or
minus amortized premium, which approximates value; (d) gains or losses on sale
of securities are calculated by using the specific identification method; (e)
interest income, adjusted for amortization of premium and accretion of
discount, is recorded on an accrual basis; (f) dividends and distributions to
shareholders are recorded on the ex-dividend date; (g) the Fund intends to
comply with the applicable provisions of the Internal Revenue Code of 1986, as
amended, pertaining to regulated investment companies and to make distributions
of taxable income sufficient to relieve it from substantially all Federal
income and excise taxes; (h) the character of income and gains to be
distributed are determined in accordance with income tax regulations which may
differ from accounting principles generally accepted in the United States of
America; and (i) estimates and assumptions are required to be made regarding
assets, liabilities and changes in net assets resulting from operations when
financial statements are prepared. Changes in the economic environment,
financial markets and any other parameters used in determining these estimates
could cause actual results to differ.

   In November 2000, the American Institute of Certified Public Accountants
("AICPA") issued a revised Audit and Accounting Guide for Investment Companies
("Guide"). This revised version is effective for financial statements issued
for fiscal years beginning after December 15, 2000. The revised Guide requires
the Fund to amortize premium and accrete all discounts on all fixed-income
securities. The Fund adopted this requirement effective June 1, 2001. This
change does not affect the Fund's net asset value, but does change the
classification of certain amounts in the statement of operations. For the
nine-month period ended February 28, 2002, interest income increased by $20,105
and the change in net unrealized appreciation of investments decreased by
$20,105. In addition, the Fund recorded adjustments to increase the cost of
securities and increase accumulated undistributed net investment income by
$58,758 to reflect the cumulative effect of this change up to the date of the
adoption.


                                   [GRAPHIC]

                                      21

<PAGE>




                         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 regular Federal income tax and from
designated state income taxes, to retain such tax-exempt status when
distributed to the shareholders of the Fund.

   Capital gain distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.

   3. INVESTMENT ADVISORY AGREEMENT, ADMINISTRATION AGREEMENT AND OTHER
      TRANSACTIONS

   Smith Barney Fund Management LLC ("SBFM"), a subsidiary of Salomon Smith
Barney Holdings Inc., which, in turn, is a subsidiary of Citigroup Inc.
("Citigroup"), acts as investment adviser to the Fund. The Fund pays SBFM a fee
calculated at an annual rate of 0.70% of the average daily net assets of the
Fund. This fee is calculated daily and paid monthly. For the nine months ended
February 28, 2002, SBFM waived $1,169,139 of its investment advisory fee.

   SBFM also acts as the Fund's administrator for which the Fund pays a fee
calculated at an annual rate of 0.20% of the average daily net assets. This fee
is calculated daily and paid monthly.

   All officers and one Director of the Fund are employees of Citigroup or its
affiliates.

   4. INVESTMENTS

   During the nine months ended February 28, 2002, the aggregate cost of
purchases and proceeds from sales of investments (including maturities, but
excluding short-term securities) were as follows:

----------------------------------------------------------------------------
Purchases                                                        $81,892,540
----------------------------------------------------------------------------
Sales                                                             87,026,316
----------------------------------------------------------------------------

   At February 28, 2002, aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:

-----------------------------------------------------------------------------
Gross unrealized appreciation                                    $ 17,375,954
Gross unrealized depreciation                                     (15,142,987)
------------------------------------------------------------------------------
Net unrealized appreciation                                      $  2,232,967
-----------------------------------------------------------------------------

                                   [GRAPHIC]

                                      22

<PAGE>




                         NOTES TO FINANCIAL STATEMENTS
                            (unaudited) (continued)


   5. FUTURES CONTRACTS

   Initial margin deposits made upon entering into futures contracts are
recognized as assets. Securities equal to the initial margin amount are
segregated by the custodian in the name of the broker. Additional securities
are also segregated up to the current market value of the futures contracts.
During the period the futures contract is open, changes in the value of the
contract are recognized as unrealized gains or losses by "marking-to-market" on
a daily basis to reflect the market value of the contract at the end of each
day's trading. Variation margin payments are 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 to hedge a portion of its portfolio. The
Fund bears the market risk that arises from changes in the value of the
financial instruments and securities indices (futures contracts).

   At February 28, 2002, the Fund did not hold any futures contracts.

   6. SECURITIES TRADED ON A WHEN-ISSUED BASIS

   In a when-issued transaction, the Fund commits to purchasing securities for
which specific information is not yet known at the time of the trade.
Securities purchased on a when-issued basis are not settled until they are
delivered to the Fund. Beginning on the date the Fund enters into the
when-issued transaction, the custodian maintains cash, U.S. government
securities or other liquid high grade debt obligations in a segregated account
equal in value to the purchase price of the when-issued security. These
transactions are subject to market fluctuations and their current value is
determined in the same manner as for other securities.

   At February 28, 2002, the Fund did not hold any when-issued securities.

   7. CAPITAL LOSS CARRYFORWARD

   At May 31, 2001, the Fund had, for Federal income tax purposes,
approximately $13,879,000 of unused capital loss carryforwards available to
offset future capital gains. 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. Expirations occur on May 31 of the years below:

                                                           2007      2008
-----------------------------------------------------------------------------
Carryforward Amounts                                     $240,000 $13,639,000
-----------------------------------------------------------------------------

                                   [GRAPHIC]

                                      23

<PAGE>




                         NOTES TO FINANCIAL STATEMENTS
                            (unaudited) (continued)


   8. CAPITAL SHARES

   At February 28, 2002, the Fund had 500,000,000 shares of common stock
authorized with a par value of $0.001 per share.
   On June 21, 1999, the Fund commenced a share repurchase plan. Since the
inception of the repurchase plan, the Fund repurchased (and retired) 2,758,300
shares with a total cost of $26,171,171. For the year ended May 31, 2001, the
Fund repurchased (and retired) 370,700 shares with a total cost of $3,648,358.

   On January 16, 2001, the Fund suspended the share repurchase plan.


                                   [GRAPHIC]

                                      24

<PAGE>




                             FINANCIAL HIGHLIGHTS


For a share of capital stock outstanding throughout each year ended May 31,
unless otherwise noted:

<TABLE>
<CAPTION>
                                 2002/(1)/   2001    2000     1999    1998    1997
------------------------------------------------------------------------------------
<S>                              <C>        <C>     <C>      <C>     <C>     <C>
Net Asset Value,
 Beginning of Period              $11.74    $10.93  $11.97   $12.37  $11.90  $12.11
-----------------------------------------------------------------------------------
Income (Loss) From Operations:
  Net investment income/(2)(3)/     0.44      0.60    0.58     0.58    0.54    0.67
  Net realized and unrealized
   gain (loss)                      0.11      0.79   (1.14)   (0.32)   0.83    0.08
-----------------------------------------------------------------------------------
Total Income (Loss)
 From Operations                    0.55      1.39   (0.56)    0.26    1.37    0.75
-----------------------------------------------------------------------------------
Gain From Repurchase of
 Treasury Stock                       --      0.02    0.12       --      --      --
-----------------------------------------------------------------------------------
Less Distributions From:
  Net investment income            (0.45)    (0.60)  (0.60)   (0.54)  (0.61)  (0.66)
  Net realized gains                  --        --      --    (0.12)  (0.29)  (0.30)
-----------------------------------------------------------------------------------
Total Distributions                (0.45)    (0.60)  (0.60)   (0.66)  (0.90)  (0.96)
-----------------------------------------------------------------------------------
Net Asset Value, End of Period    $11.84    $11.74  $10.93   $11.97  $12.37  $11.90
-----------------------------------------------------------------------------------
Total Return,
 Based on Market Value/(4)/         5.07%++  20.69%  (3.88)%   0.11%   2.08%   7.89%
-----------------------------------------------------------------------------------
Total Return,
 Based on Net Asset Value/(4)/      5.18%++  13.90%  (2.82)%   2.66%  12.14%   6.59%
-----------------------------------------------------------------------------------
Net Assets,
 End of Period (millions)           $377      $374    $352     $414    $428    $411
-----------------------------------------------------------------------------------
</TABLE>



                                   [GRAPHIC]

                                      25

<PAGE>




                             FINANCIAL HIGHLIGHTS
                                  (continued)


For a share of capital stock outstanding throughout each year ended May 31,
unless otherwise noted:

<TABLE>
<CAPTION>
                              2002/(1)/   2001    2000     1999    1998     1997
---------------------------------------------------------------------------------
<S>                           <C>       <C>     <C>     <C>      <C>     <C>
Ratios to Average Net Assets:
  Expenses/(2)/                  0.63%+   0.68%   0.89%    0.94%   0.99%    1.00%
  Net investment income/(3)/     4.94+    5.15    5.19     4.72    4.35     5.56
---------------------------------------------------------------------------------
Portfolio Turnover Rate            22%      58%     35%      23%     87%     113%
---------------------------------------------------------------------------------
Market Value, End of Period    $10.75   $10.67  $9.375  $10.375  $11.00  $11.625
---------------------------------------------------------------------------------
</TABLE>
(1) For the nine months ended February 28, 2002 (unaudited).
(2) The investment adviser waived a portion of its fees for the nine months
    ended February 28, 2002, and the years ended May 31, 2001 and 2000. In
    addition, the investment adviser and administrator waived a portion of
    their fees for the year ended May 31, 1999. If such fees were not waived,
    the per share decreases in net investment income and actual expense ratios
    would have been as follows:

                             Per share decreases in   Expense ratios
                             net investment income  without fee waivers
                             ---------------------- -------------------
         2002                        $0.04                 1.04%+
         2001                         0.04                 1.01
         2000                         0.02                 1.04
         1999                         0.01                 1.02
(3) Without the adoption of the change in the accounting method discussed in
    Note 1, the ratio of net investment income to average net assets would have
    been 4.93%. Per share, ratios and supplemental data for the periods prior
    to June 1, 2001 have not been restated to reflect this change in
    presentation. In addition, the impact of this change to net investment
    income was less than $0.01 per share.
(4) The total return calculation assumes that dividends are reinvested in
    accordance with the Fund's dividend reinvestment plan.
++ Total return is not annualized, as it may not be representative of the total
   return for the year.
+  Annualized.


                                   [GRAPHIC]

                                      26

<PAGE>




                                FINANCIAL DATA
                                  (unaudited)


For a share of capital stock outstanding throughout each period:

<TABLE>
<CAPTION>
                                NYSE    Net              Dividend
             Record   Payable  Closing Asset  Dividend Reinvestment
              Date     Date    Price+  Value+   Paid      Price
            -------------------------------------------------------
            <S>       <C>      <C>     <C>    <C>      <C>
             6/22/99   6/25/99 $10.563 $11.67  $0.050     $10.61
             7/27/99   7/30/99  10.063  11.67   0.050      10.03
             8/24/99   8/27/99   9.813  11.29   0.050       9.95
             9/21/99   9/24/99   9.688  11.24   0.050       9.70
            10/26/99  10/29/99   9.625  10.85   0.050      10.85
            11/22/99  11/26/99   9.563  11.08   0.050       9.25
            12/27/99  12/30/99   9.000  10.90   0.050       9.10
             1/26/00   1/28/00   9.563  10.76   0.050       9.48
             2/22/00   2/25/00   9.500  10.85   0.050       9.52
             3/28/00   3/31/00   9.313  11.18   0.050       9.46
             4/25/00   4/28/00   9.313  11.14   0.050       9.36
             5/23/00   5/26/00   9.188  10.79   0.050       9.33
             6/27/00   6/30/00   9.750  11.20   0.050       9.91
             7/25/00   7/28/00   9.688  11.37   0.050       9.89
             8/22/00   8/25/00  10.000  11.54   0.050      10.04
             9/26/00   9/29/00   9.688  11.42   0.050       9.80
            10/24/00  10/27/00   9.688  11.49   0.050       9.78
            11/20/00  11/24/00   9.750  11.47   0.050       9.80
            12/26/00  12/29/00   9.938  11.85   0.050      10.25
             1/23/01   1/26/01  10.688  11.92   0.050      10.70
             2/20/01   2/23/01  10.770  11.88   0.050      10.81
             3/27/01   3/30/01  10.450  11.89   0.050      10.58
             4/24/01   4/27/01  10.370  11.65   0.050      10.55
             5/22/01   5/25/01  10.650  11.71   0.050      10.69
             6/26/01   6/29/01  10.400  11.80   0.050      10.61
             7/24/01   7/27/01  10.590  11.88   0.050      10.71
             8/28/01   8/31/01  10.830  12.09   0.050      11.00
             9/25/01   9/28/01  10.330  11.87   0.050      10.65
            10/23/01  10/26/01  10.640  11.93   0.050      10.82
            11/27/01  11/30/01  10.580  11.83   0.050      10.51
            12/24/01  12/28/01  10.310  11.63   0.050      10.43
             1/22/02   1/25/02  10.600  11.81   0.050      10.74
             2/19/02   2/22/02  10.600  11.77   0.050      10.72
            ------------------------------------------------------
</TABLE>
+ As of record date.


                                   [GRAPHIC]

                                      27

<PAGE>




                          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 Global Fund
Services ("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 PFPC 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), or if the Fund declares a dividend or capital gains
distribution payable only in cash, PFPC will buy common stock in the open
market, on the NYSE 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



                                   [GRAPHIC]

                                      28

<PAGE>




                          DIVIDEND REINVESTMENT PLAN
                            (unaudited) (continued)

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 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 Global Fund Services, P.O. Box 8030, Boston,
Massachusetts 02266-8030 or by telephone at (800) 331-1710.

                          --------------------------

   Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that from time to time the Fund may purchase
shares of its common stock in the open market.



                                   [GRAPHIC]

                                      29

<PAGE>

                              Managed Municipals
                                Portfolio Inc.

DIRECTORS
Allan J. Bloostein
Dwight B. Crane
Paolo M. Cucchi
Robert A. Frankel
Paul Hardin
William R. Hutchinson
Heath B. McLendon, Chairman
George M. Pavia

Charles F. Barber, Emeritus

OFFICERS
Heath B. McLendon
President and
Chief Executive Officer

Lewis E. Daidone
Senior Vice President and Treasurer

Joseph P. Deane
Vice President and Investment Officer

David Fare
Investment Officer

Paul A. Brook
Controller

Christina T. Sydor
Secretary

INVESTMENT ADVISER AND ADMINISTRATOR
Smith Barney Fund Management LLC
333 W34th Street
New York, New York 10001

TRANSFER AGENT
PFPC Global Fund Services
P.O. Box 8030
Boston, Massachusetts 02266-8030

CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110



                                   [GRAPHIC]

                                      30

<PAGE>



                                   [GRAPHIC]



             THIS REPORT IS ONLY INTENDED FOR SHAREHOLDERS OF THE
                       MANAGED MUNICIPALS PORTFOLIO INC.
                            IT IS NOT A PROSPECTUS,
              CIRCULAR OR REPRESENTATION INTENDED FOR USE IN THE
               PURCHASE OR SALE OF SHARES OF THE FUND OR OF ANY
                      SECURITIES MENTIONED IN THE REPORT.

                                  FD0879 4/02


</TEXT>
</DOCUMENT>
