<DOCUMENT>
<TYPE>N-30D
<SEQUENCE>1
<FILENAME>dn30d.txt
<DESCRIPTION>SALOMON BROTHERS HIGH INCOME FUND II INC.
<TEXT>

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC



May 14, 2001

Dear Shareholders:

We are pleased to provide the annual report for the Salomon Brothers High
Income Fund II Inc ("Fund") as of April 30, 2001. We hope you find this report
to be useful and informative. Included are a market commentary, a schedule of
the Fund's investments as of April 30, 2001, and financial statements for the
year ended April 30, 2001.

The Fund distributed dividends totalling $1.56 per share during the period. The
table below shows the annualized distribution rate and the total return for the
period covered by this report based on the Fund's April 30, 2001 net asset
value ("NAV")/1/ per share and its New York Stock Exchange ("NYSE") closing
price:

                              Annualized           Twelve-Month
              Price Per Share Distribution Rate/2/ Total Return/2/
              --------------- -------------------- ---------------
              $11.08 (NAV)    12.45%               7.11%
              $10.96 (NYSE)   12.59%               6.85%

In comparison, the Salomon Smith Barney High Yield Market Index ("SSB High
Yield Market Index")/3/ returned 0.80% and the J.P. Morgan Emerging Markets
Bond Index Plus ("EMBI+")/4/ returned 11.12% for the same period. Past
performance is not indicative of future results.

U.S. HIGH-YIELD MARKET

The year ended April 30, 2001, was a volatile one for the high-yield bond
market, which managed to return 0.80%, according to the SSB High Yield Market
Index, despite uncertainty in interest rates, the U.S. economic outlook and the
capital markets. Early in the year, continued strength in the U.S. economy and
a strong stock market caused concerns that inflation would rise. As a result,
in May 2000, the Federal Reserve Board ("Fed") increased the federal funds rate
("fed funds rate")/5/ 50 basis points./6/
--------
1 The 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 shares outstanding. The NAV
  fluctuates with changes in the value of the securities in which the Fund has
  invested. However, the price at which the investor may buy or sell shares of
  the Fund is at their market (NYSE) price as determined by supply and demand.
2 Total returns are based on changes in net asset value 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 market value noted in this report. The annualized
  distribution rate assumes a current monthly income dividend rate of $0.115
  for twelve months. This rate is as of May 31, 2001 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.
3 The SSB High Yield Market Index covers a significant portion of the
  below-investment-grade U.S. corporate bond market. Please note that an
  investor cannot invest directly in an index.
4 The EMBI+ is a total return index that tracks the traded market for U.S.
  dollar-denominated Brady bonds and other similar sovereign restructured bonds
  traded in the emerging market. Please note that an investor cannot directly
  invest in an index.
5 The 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.
6 A basis point is 0.01% or one one-hundredth of a percent.

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC



This uncertain interest rate environment, increased volatility in the stock
market and caused substantial high-yield mutual fund outflows, which drove
negative returns in the high-yield market through the first quarter of the
fiscal year. However, during the summer of 2000, the high-yield bond market
enjoyed some relief and positive returns as the Fed held interest rates steady
in response to data hinting at a slowdown in the U.S. economy.

From September to November 2000, the high-yield market reversed course into
negative territory once again as a series of negative earnings revisions and
economic data renewed concerns over sustainable economic growth and corporate
profitability. Additionally, the high-yield market's autumn difficulties were
exacerbated by uncertainty surrounding the U.S. elections, continued mutual
fund outflows and limited broker-dealer liquidity, which was further reduced by
consolidations in the brokerage industry.

In December, the high-yield market enjoyed a modest rally as well-received
comments from Alan Greenspan, expressing a shift in concern towards the slowing
economy and away from potential inflation, sparked hope of interest rate cuts
in the first quarter of 2001. The new calendar year began on a positive note,
and the much anticipated interest rate cuts materialized in January as the Fed
lowered the fed funds rate twice, each time by 50 basis points. The improved
market sentiment and renewed retail demand pushed the high-yield market higher
for the first two months of the year. However, despite interest rate cuts of 50
basis points in March and April of 2001, further earnings warnings in the
technology and telecommunications sectors drove the market down in both months.

For the year ended April 30, 2001, the top-performing industries in high-yield
included cable & other media, gaming and utilities due to their relatively
stable and predictable cash flows. Strong natural gas prices drove out
performance in energy. Healthcare was supported by strong earnings and a
favorable legislative environment. Financials outperformed as a result of the
strong economic environment that existed through most of the year.

The worst performing industry group during the Fund's fiscal year was
telecommunications. This sector suffered as earnings warnings and liquidity
issues increased investors' concerns regarding the viability of many business
plans and the likelihood that additional funding would be provided. In
addition, worries over an emerging slowdown in new vehicle sales and a sluggish
aftermarket parts business drove underperformance in automotive. Metals/mining
underperformed due to sharply higher levels of steel imports, declining steel
demand and plummeting steel product prices.
Technology performance suffered in the high-yield market in tandem with the
Nasdaq Composite Index/7/ as demand dropped off dramatically. Rising raw
material prices negatively impacted the containers sector.

In terms of credit quality, BB issues significantly outperformed B issues,
which in turn significantly outperformed CCC issues as investors favored the
greater liquidity and higher credit quality offered by BB issues. BB, B and CCC
issues returned 12.75%, negative 0.77% and negative 17.27%, respectively, for
the fiscal year, according to the SSB High Yield Market Index.

The main driver of the Fund's performance during the fiscal year was the
underweighting in telecommunications. In addition, the Fund benefited from a
shift to an overweighting in energy and gaming. The Fund's performance was
adversely affected by an overweighting in automotive and by underweightings in
financial, healthcare and utilities. Over the course of the fiscal year, the
Fund responded to market conditions by increasing its positions in gaming,
energy and services/other and by reducing its positions in automotive,
chemicals, industrial and technology.
--------
7 The Nasdaq Composite Index is a market value-weighted index that measures all
  domestic and non-U.S. based securities listed on the NASDAQ stock market.
  Please note that an investor cannot invest directly in an index.

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC


Outlook

While current valuations appear attractive, we expect the high-yield bond
market to continue to experience volatility in the near-term as the longer-term
positive effects of any Fed interest rate cuts and lower long-term interest
rates are offset by several factors in the short run, including (i) heightened
default concerns, (ii) disappointing corporate profitability, (iii) continued
concerns over the U.S. and global economies, (iv) reduced secondary market
liquidity and (v) equity market volatility. In light of these conditions, we
are continuing to pursue a more conservative investment strategy geared to
accumulating BB-rated credits in non-cyclical industries.

EMERGING MARKETS DEBT

Emerging markets debt returned 11.12% for the year ended April 30, 2001, as
measured by the EMBI+. Performance across many countries was balanced as nine
out of sixteen countries outperformed the index. Mexico's upgrade to
investment-grade/8/ status, in addition to higher market liquidity, attracted a
broader group of investors to the asset class. This trend continued through
January 2001, but slowed in momentum with the overall level of economic
activity. Technicals remained strong, helping the asset class decouple from
other risk-oriented markets. Emerging markets debt outperformed most financial
assets, especially U.S. and European high-yield securities, and U.S. and global
stock markets for the period.

At the commencement of the Fund's annual period, the Fed continued with its
inflationary bias, which had driven overnight rates to 6.50%. In December 2000,
the market received a boost as the Fed changed its focus on the U.S. economy
from inflation to a slowdown, and commenced easing interest rates, bringing
overnight rates to 4.50% as of April 30, 2001./9/ The Fed's changing bias was
caused by evidence that U.S. economic growth has slowed considerably in recent
months. The reduction in U.S. interest rates may provide a boost to Latin
America due to the regions' heavy dependence on capital inflows. We believe
this potential positive development could be balanced by the effects of an
economic slowdown in the U.S.

Oil prices, an important driver of value in the emerging debt markets, continue
to remain at high levels. Fiscal balances and monetary reserves improved
substantially as high oil prices contributed to overall credit quality in
Russia, Venezuela, Algeria, Colombia and Mexico -- all oil producers and all
substantial holdings for the Fund. Prices fluctuated during the period, ranging
from a low of $22.40 per barrel to a high of $32.46 per barrel. Oil prices
closed the period at $28.46. Stable or slightly weaker oil prices will be a
modest benefit for the oil importers, without significantly undermining the
very strong external and fiscal performance of the major oil exporters.

Return volatility/10/ for emerging markets debt remained substantially below
historical levels. Return volatility for the 12 months ended April 30, 2001 was
9.50%, well below the 19% historical level. However, the combination of the
Turkish and Argentine financial and political crises in the first quarter of
2001 registered an upward movement in volatility levels. We think this will
normalize as the year progresses.
--------
 8 Investment-grade bonds are those rated Aaa, Aa, A and Baa by Moody's
   Investors Service, Inc. or AAA, AA, A and BBB by Standard & Poor's Ratings
   Service, or that have an equivalent rating by any nationally recognized
   statistical rating organization, or are determined by the portfolio manager
   to be of equivalent quality.
 9 On May 15, 2001, after this letter was written, the Fed cut interest rates
   50 basis points.
10 Return volatility is the standard deviation of monthly returns over the
   period being measured.


<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC


Individual country performance was generally good as 9 of 16 index countries
outperformed the EMBI+ return of 11.12%. The following is a brief description
of each sector's highlights over the past twelve months.

Latin America

Latin America as a region returned 8.33% for the year ended April 30, 2001,
underperforming the index return of 11.12%. Among the key developments in Latin
America during the Fund's fiscal year, Vincente Fox was elected as President,
Brazil obtained a successful $5 billion, 40-year debt exchange and Venezuela
credit quality continued to improve. Argentina's recession and its continuing
political and economic woes contributed to the region's underperformance.

Ecuador

Ecuador returned 45.96% for the period, dominating individual country
performance. Ecuador completed its debt restructuring of defaulted Brady
bonds/11/, exchanging them for two issues of global bonds during the year. The
relatively fast resolution of this Brady bond default surprised the market and
drove Ecuador's returns. In addition, the Paris Club/12/ granted Ecuador a
standard rescheduling of $880 million of bilateral debt. Ecuador continues to
face a number of economic and political challenges. President Noboa has
developed a good working relationship with the International Monetary Fund
("IMF")/13/, an important factor that has been missing in recent years.
Ecuador's budget forecasts seem realistic, and are not based on sustained high
oil prices. However, in our opinion, the country still needs comprehensive tax
reforms to improve its overall fiscal health.

Venezuela

Venezuela returned 20.97% for the year ended April 30, 2001. Oil price strength
continues to drive the Venezuelan economy as fiscal and external accounts have
shown marked improvement over year earlier levels. The level of international
reserves provides a clear measure of the positive impact that rising oil prices
have had on Venezuelan credit quality. The stock of international reserves,
approximately $23 billion, exceeds the stock of external debt. One further
promising figure for 2000 was the lowest reported inflation figure in fourteen
years, 13.4%, down from 20% in 1999. We maintained our overweight position in
Venezuelan debt instruments.

Mexico

Mexico returned 15.09% for the period. Mexico had an extremely eventful second
half of the year with the election of the first non-PRI party president in 70
years, Vincente Fox. The appointment of Francisco Gil Diaz in February as
minister of finance was especially well received by the market. The Mexican
economy benefited from rising oil prices, as reflected in its overall levels of
growth and fiscal strength. Mexico's progress and its sound fundamentals have
been widely recognized by the market. Mexican debt currently trades
approximately 400 basis points under the market Index.
--------
11 Brady bonds are publicly traded, U.S. dollar-denominated bonds of developing
   countries, mainly in Latin America. Brady bonds are issued in a
   restructuring in exchange for commercial bank loans in default.
12 The Paris Club is the official group of sovereign lenders who have extended
   credit to sovereign governments.
13 The IMF is an international organization of 183 member countries,
   established to promote international monetary cooperation, exchange
   stability and orderly exchange arrangements.


<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC


Brazil

Brazil returned 11.10% for the period, slightly underperforming the EMBI+. We
believe low inflation, continued growth and moderating oil prices should enable
Brazil to continue to improve its credit quality. The spike in volatility in
international financial markets combined with concerns about weakness in the
Brazilian currency impacted the economy and led the Central Bank to raise the
Selic, the overnight lending rate by 100 basis points in March and April to
16.25% percent. On a spread duration basis we maintained our neutral stance to
the index in Brazil.

Non-Latin America

Non-Latin American countries outperformed Latin countries during the fiscal
year, returning 19.10% for the year ended April 30, 2001, as measured by the
EMBI+. Algeria drove returns in Africa while Russia, Poland and Bulgaria
positively drove Eastern European returns. Turkey was the worst performer in
the index, devaluing its currency in the wake of a domestic banking crisis.

African Credits

Algeria, returned 20.50% for the period, benefitting from rising oil and gas
prices and political stability. Morocco returned 9.65% for the period, trailing
the EMBI+. Morocco's economy is highly dependent on the performance of the
agricultural sector and a recent shortage of rainfall has reduced the country's
growth expectations from 8-10% down to 4-5%. The privatization of Maroc Telecom
occurred in late December 2000. The government will receive $2.2 billion from
Vivendi Universal, which will help finance its budget deficit.

Russia

Russia returned 29.08% for the period, driven primarily by sustained high oil
prices. Russia's hard currency reserves doubled from 1999 levels and currently
stand in excess of $30 billion. This reserve position substantially strengthens
Russia's credit quality. The Russian Federation Council approved the 2001
budget in the fourth quarter of 2000. We believe the budget is conservative and
the London Club financing received in August makes Russia's 2001 debt service
obligations very manageable. Russia's attractiveness to investors further
improved when the government decided to pay its Paris Club debts in January and
February and assured it would meet all of its remaining 2001 Paris Club
obligations on time. Finally, the period ended positively as the government and
the IMF made progress on structural reform objectives for 2001 which includes
tax reform, the reduction and streamlining of regulatory procedures and an
improvement in accounting standards. We remained overweight in Russia
throughout the Fund's fiscal year.

Turkey

Turkey was the worst performer in the index during the period, returning a
negative 7.77% for the year. The November 2000 banking crisis became a
full-scale balance of payments crisis for Turkey, which ultimately led to the
devaluation of the currency. The IMF granted the Turkish Treasury over $20
billion in financial aid during the course of the Fund's fiscal year in an
attempt to restore confidence in the domestic banking sector. Recently, Stanley
Fischer of the IMF provided the most unequivocal statement of support for
Turkey since the devaluation, arguing that it deserves the support of the
international community and that it will get it. The potential for negative
political surprises


<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II


diminished somewhat, but we feel the political situation still remains
unpredictable. On a promising note Turkey was the best performer in the index
for April 2001, returning 7.81%. We will continue to monitor developments in
Turkey.

Outlook

The high-yield market closed the annual period with spreads at 787 basis points
over Treasuries. Emerging debt markets have come under pressure with the
developed world's economic slowdown, the poor performance of the stock markets
and the financial woes of Turkey and Argentina. Although we have reduced our
exposure to market risk over the past few months, we continue to remain
invested in a diversified portfolio of emerging markets debt securities.

In a continuing effort to provide timely information concerning Salomon
Brothers High Income Fund II Inc, shareholders may call 1-888-777-0102 (toll
free), Monday through Friday from 8:00 a.m. to 6:00 p.m. EST for the Fund's
current net asset value, market price and other information regarding the
Fund's portfolio holdings and allocations. For information concerning your
Salomon Brothers High Income Fund II Inc stock account, please call PFPC Global
Fund Services at 1-800-331-1710.

Sincerely,

/s/ Heath B. McLendon    /s/ Peter J. Wilby
Heath B. McLendon        Peter J. Wilby
Chairman and President   Executive Vice President

/s/ Beth A. Semmel       /s/ James E. Craige
Beth A. Semmel           James E. Craige
Executive Vice President Executive Vice President

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Schedule of Investments
April 30, 2001

<TABLE>
<CAPTION>
   Face
  Amount                                          Security                                           Value
--------------------------------------------------------------------------------------------------------------
<C>           <S>                                                                                 <C>
  Corporate Bonds -- 61.0%
  Basic Industries -- 4.7%
$ 5,000,000   Abitibi-Consolidated Inc., 8.550% due 8/1/10....................................... $ 5,243,750
 10,000,000   AEI Resources Inc., 10.500% due 12/15/05 (a)(b)(c).................................   3,450,000
  5,000,000   APP China Group Ltd., 14.000% due 3/15/10 (a)(b)(c)................................     337,500
  5,000,000   Avecia Group PLC, 11.000% due 7/1/09...............................................   5,300,000
  4,000,000   Berry Plastics Corp., 12.250% due 4/15/04..........................................   3,820,000
  2,800,000   Borden Chemicals & Plastics Ltd., 9.500% due 5/15/05 (b)(c)........................     490,000
  2,500,000   Gentek Inc., 11.000% due 8/1/09....................................................   2,500,000
 10,000,000   Glencore Nickel Property Ltd., 9.000% due 12/1/14..................................   6,850,000
 14,475,000   Jordan Industries Inc., zero coupon until 4/1/02 (11.750% thereafter), due 4/1/09..   7,599,375
              P&L Coal Holdings Corp.:
  1,500,000     8.875% due 5/15/08...............................................................   1,575,000
  2,500,000     9.625% due 5/15/08...............................................................   2,637,500
  4,675,000   PCI Chemicals Canada Inc., 9.250% due 10/15/07 (b)(c)..............................   1,729,750
  5,000,000   Polymer Group Inc., 9.000% due 7/1/07..............................................   1,975,000
  3,500,000   Radnor Holdings Corp., 10.000% due 12/1/03.........................................   2,922,500
  5,000,000   Republic Technology International Corp., 13.750% due 7/15/09 (b)(c)................     350,000
    925,000   Tembec Industries Inc., 8.625% due 6/30/09.........................................     957,375
                                                                                                  -----------
                                                                                                   47,737,750
                                                                                                  -----------
  Consumer Cyclicals -- 3.8%
  2,500,000   Advance Stores Co. Inc., 10.250% due 4/15/08.......................................   2,362,500
  2,500,000   Argosy Gaming Co., 10.750% due 6/1/09..............................................   2,696,875
  6,625,000   Aztar Corp., 8.875% due 5/15/07....................................................   6,765,781
  1,700,000   Choctaw Resort Development Enterprise, 9.250% due 4/1/09 (a).......................   1,761,625
              Cole National Group, Inc.:
  2,000,000     9.875% due 12/31/06..............................................................   1,790,000
  2,000,000     8.625% due 8/15/07...............................................................   1,710,000
  3,000,000   Finlay Enterprises Inc., 9.000% due 5/1/08.........................................   2,778,750
  5,000,000   Guitar Center Management, 11.000% due 7/1/06.......................................   4,937,500
              HMH Properties Inc.:
    500,000     7.875% due 8/1/05................................................................     492,500
  7,000,000     7.875% due 8/1/08................................................................   6,860,000
  2,000,000   Leslie's Poolmart Inc., 10.375% due 7/15/04........................................   1,670,000
  3,500,000   Mattress Discounters Co., 12.625% due 7/15/07......................................   2,835,000
  2,025,000   Pillowtex Corp., 9.000% due 12/15/07 (b)(c)........................................      91,125
    750,000   Tommy Hilfiger USA Inc., 6.500% due 6/1/03.........................................     712,500
  1,575,000   WestPoint Stevens, Inc., 7.875% due 6/15/05........................................     941,062
                                                                                                  -----------
                                                                                                   38,405,218
                                                                                                  -----------
</TABLE>


--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


                                                                          Page 7

<PAGE>

                   SALOMON BROTHERS HIGH INCOME FUND II INC

Schedule of Investments (continued)
April 30, 2001

<TABLE>
<CAPTION>
   Face
  Amount                               Security                              Value

--------------------------------------------------------------------------------------
<C>           <S>                                                          <C>
  Consumer Non-Cyclicals -- 14.3%
$11,000,000   AKI Inc., 10.500% due 7/1/08................................ $9,900,000
  2,000,000   American Safety Razor Co., 9.875% due 8/1/05................  1,980,000
  4,000,000   Circus Circus Enterprise Inc., 9.250% due 12/1/05...........  4,065,000
  5,000,000   Coast Hotels & Casinos, Inc., 9.500% due 4/1/09.............  5,106,250
  1,000,000   Davita Inc., 9.250% due 4/15/11 (a).........................  1,037,500
  2,500,000   Elizabeth Arden Inc., 11.750% due 2/1/11....................  2,643,750
  1,500,000   Fleming Cos. Inc., 10.125% due 4/1/08 (a)...................  1,571,250
  3,875,000   French Fragrance Inc., 10.375% due 5/15/07..................  3,884,688
  2,750,000   Fresenius Medical Care Capital Trust II, 7.875% due 2/1/08..  2,674,375
  3,750,000   Harrah's Operating Co. Inc., 7.875% due 12/15/05............  3,796,875
              HCA - The Healthcare Co.:
  5,000,000     6.910% due 6/15/05........................................  4,975,000
    625,000     8.750% due 9/1/10.........................................    675,781
  3,040,000     8.360% due 4/15/24........................................  2,937,400
  3,511,000   Hines Horticulture, Inc., 12.750% due 10/15/05..............  3,221,342
  6,500,000   Home Interiors & Gifts Inc., 10.125% due 6/1/08.............  2,502,500
  7,750,000   Horseshoe Gaming LLC, 9.375% due 6/15/07....................  8,118,125
  4,500,000   Iasis Healthcare Corp., 13.000% due 10/15/09................  4,882,500
  5,500,000   Imperial Holly Corp., 9.750% due 12/15/07 (b)(c)............    508,750
  5,769,000   Iowa Select Farms, L.P., 10.750% due 12/1/06................  2,596,050
  3,000,000   Mandalay Resort Group, 10.250% due 8/1/07...................  3,165,000
  5,000,000   MGM Grand Inc., 9.750% due 6/1/07...........................  5,375,000
  2,500,000   Mohegan Tribal Gaming Corp., 8.750% due 1/1/09..............  2,593,750
  5,000,000   North Atlantic Trading Co., 11.000% due 6/15/04.............  4,100,000
              Park Place Entertainment Inc.:
  5,750,000     9.375% due 2/15/07........................................  6,023,125
  3,750,000     8.875% due 9/15/08........................................  3,871,875
  3,000,000   Premier International Foods Corp., 12.000% due 9/1/09.......  3,015,000
  2,201,000   Pueblo Xtra International Inc., 9.500% due 8/1/03...........    451,205
              Revlon Consumer Products Corp.:
  3,450,000     8.125% due 2/1/06.........................................  2,432,250
  3,750,000     9.000% due 11/1/06........................................  2,737,500
              Rite Aid Corp.:
  4,000,000     10.500% due 9/15/02 (a)...................................  3,960,000
  4,300,000     7.625% due 4/15/05........................................  3,504,500
              Station Casinos, Inc.:
  3,000,000     8.375% due 2/15/08 (a)....................................  3,037,500
  1,875,000     9.875% due 7/1/10.........................................  1,957,031
</TABLE>


--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


Page 8

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Schedule of Investments (continued)
April 30, 2001

<TABLE>
<CAPTION>
    Face
   Amount                                   Security                                    Value
--------------------------------------------------------------------------------------------------
<C>            <S>                                                                   <C>
  Consumer Non-Cyclicals -- 14.3% (continued)
               Sun International Hotels Inc.:
 $   750,000     9.000% due 3/15/07................................................. $    742,500
   4,500,000     8.625% due 12/15/07................................................    4,342,500
   3,000,000   Syratech Corp., 11.000% due 4/15/07..................................    1,878,750
               Tenet Healthcare Corp.:
   1,750,000     8.000% due 1/15/05.................................................    1,820,000
   5,250,000     9.250% due 9/1/10..................................................    5,978,437
   6,500,000   Triad Hospitals Inc., 8.750% due 5/1/09 (a)..........................    6,662,500
   2,500,000   United Industries Corp., 9.875% due 4/1/09...........................    1,837,500
   2,500,000   Vlasic Foods International Inc., 10.250% due 7/1/09 (b)(c)...........      762,500
   6,000,000   Windmere-Durable Holdings, Inc., 10.000% due 7/31/08.................    5,550,000
   3,500,000   Winsloew Furniture, Inc., 12.750% due 8/15/07........................    3,237,500
                                                                                     ------------
                                                                                      146,113,059
                                                                                     ------------
  Energy -- 7.3%
               Belco Oil & Gas Corp.:
   1,500,000     10.500% due 4/1/06.................................................    1,522,500
   3,761,000     8.875% due 9/15/07.................................................    3,742,195
   5,500,000   Canadian Forest Oil Ltd., 8.750% due 9/15/07.........................    5,637,500
   4,000,000   Comstock Resources Inc., 11.250% due 5/1/07..........................    4,220,000
  10,000,000   Continental Resources Inc., 10.250% due 8/1/08.......................    8,750,000
   5,530,000   Grey Wolf Inc., 8.875% due 7/1/07....................................    5,654,425
   2,250,000   Ico Inc., 10.375% due 6/1/07.........................................    2,264,062
   5,000,000   Key Energy Services Inc., 14.000% due 1/15/09........................    5,900,000
   2,000,000   Lomak Petroleum Inc., 8.750% due 1/15/07.............................    1,960,000
               Nuevo Energy Co.:
   2,000,000     9.500% due 6/1/08..................................................    2,007,500
   4,000,000     9.375% due 10/1/10.................................................    4,477,500
   5,000,000   Ocean Energy Inc., 8.875% due 7/15/07................................    5,325,000
   4,000,000   Parker Drilling Corp., 9.750% due 11/15/06...........................    4,190,000
   4,250,000   Pioneer Natural Resource Co., 9.625% due 4/1/10......................    4,659,062
   4,250,000   Plains Resources Inc., 10.250% due 3/15/06...........................    4,319,062
   1,000,000   R&B Falcon Corp., 9.500% due 12/15/08................................    1,162,500
   5,000,000   Vintage Petroleum Inc., 9.750% due 6/30/09...........................    5,525,000
   2,500,000   Western Gas Resources Inc., Company Guaranteed, 10.000% due 6/15/09..    2,693,750
                                                                                     ------------
                                                                                       74,010,056
                                                                                     ------------
  Financial -- 2.6%
   1,975,400   Airplanes Pass-Through Trust, Series D, 10.875% due 3/15/19..........    1,233,914
   7,000,000   Felcor Lodging L.P., 9.500% due 9/15/08..............................    7,332,500
</TABLE>


--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


                                                                          Page 9

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Schedule of Investments (continued)
April 30, 2001


<TABLE>
<CAPTION>
   Face
  Amount                                             Security                                             Value
-------------------------------------------------------------------------------------------------------------------
<C>           <S>                                                                                      <C>
  Financial -- 2.6% (continued)
$10,000,000   Meristar Hospitality Corp., 9.125% due 1/15/11 (a)...................................... $10,250,000
  7,996,000   Morgan Stanley Aircraft Finance, Series 1A, Class D1, 8.700% due 3/15/23................   5,037,480
  7,500,000   Nationwide Credit Inc., 10.250% due 1/15/08.............................................   2,625,000
                                                                                                       -----------
                                                                                                        26,478,894
                                                                                                       -----------
  Housing Related -- 0.8%
              American Standard Inc.:
    625,000     7.375% due 4/15/05....................................................................     625,000
  1,675,000     7.375% due 2/1/08.....................................................................   1,666,625
              Nortek Inc.:
  4,025,000     9.875% due 3/1/04.....................................................................   4,045,125
  2,000,000     8.875% due 8/1/08.....................................................................   1,920,000
                                                                                                       -----------
                                                                                                         8,256,750
                                                                                                       -----------
  Industrial - Manufacturing -- 3.4%
  4,500,000   Aqua Chemical Inc., 11.250% due 7/1/08..................................................   3,240,000
              BE Aerospace:
  2,000,000     9.500% due 11/1/08....................................................................   2,070,000
    500,000     8.875% due 5/1/11 (a).................................................................     505,000
  3,000,000   Blount Inc., 13.000% due 8/1/09.........................................................   1,635,000
  8,800,000   Breed Technologies Inc., 9.250% due 4/15/08 (b)(c)......................................         880
  2,000,000   Fedders North America, Inc., 9.375% due 8/15/07.........................................   1,882,500
  7,000,000   Foamex L.P., 9.875% due 6/15/07.........................................................   4,103,750
  3,750,000   Hexcel Corp., 9.750% due 1/15/09........................................................   3,637,500
  2,500,000   International Utility Structures Inc., 10.750% due 2/1/08...............................   1,600,000
  8,000,000   Key Plastics, Inc., 10.250% due 3/15/07 (b)(c)..........................................         800
  2,750,000   Moll Industries, Inc., 10.500% due 7/1/08...............................................     976,250
  3,750,000   Motors & Gears, Inc., 10.750% due 11/15/06..............................................   3,731,250
  7,500,000   Sequa Corp., 9.000% due 8/1/09..........................................................   7,650,000
  2,250,000   Terex Corp., 10.375% due 4/1/11 (a).....................................................   2,306,250
  2,000,000   Williams Scotsman Inc., 9.875% due 6/1/07...............................................   1,720,000
                                                                                                       -----------
                                                                                                        35,059,180
                                                                                                       -----------
  Media - Telecommunications -- 14.7%
              Adelphia Communications Corp.:
  2,136,263     9.500% due 2/15/04....................................................................   2,056,153
  1,500,000     10.500% due 7/15/04...................................................................   1,548,750
 10,500,000   Avalon Cable Holdings LLC, zero coupon until 12/1/03 (11.875% thereafter), due 12/1/08..   8,268,750
  2,000,000   Call Net Enterprises Inc., zero coupon until 8/15/03 (8.940% thereafter), due 8/15/08...     410,000
  8,250,000   Century Communications, zero coupon due 1/15/08.........................................   3,939,375
</TABLE>


--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


Page 10

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Schedule of Investments (continued)
April 30, 2001


<TABLE>
<CAPTION>
   Face
  Amount                             Security                              Value
------------------------------------------------------------------------------------
<C>         <S>                                                         <C>
Media - Telecommunications -- 14.7% (continued)
$ 8,000,000 Charter Communications Holdings LLC, zero coupon until
              4/1/04 (9.920% thereafter), due 4/1/11................... $ 5,740,000
            Citadel Broadcasting Co.:
  2,500,000   10.250% due 7/1/07.......................................   2,675,000
  2,250,000   9.250% due 11/15/08......................................   2,418,750
            CSC Holdings Inc.:
  5,250,000   9.875% due 2/15/13.......................................   5,604,375
    500,000   10.500% due 5/15/16......................................     563,750
  5,000,000   9.875% due 4/1/23........................................   5,387,500
  4,000,000 Frontiervision Holdings L.P., zero coupon until 9/15/01
              (11.875% thereafter), due 9/15/07........................   4,080,000
            Global Crossing Holding Ltd.:
  2,500,000   9.125% due 11/15/06......................................   2,387,500
  4,250,000   9.500% due 11/15/09......................................   3,973,750
  7,500,000 Hollinger International Publishing Inc., 9.250% due 2/1/06.   7,762,500
  2,500,000 Insight Midwest L.P., 10.500% due 11/1/10 (a)..............   2,718,750
  3,000,000 Lamar Media Group, 9.625% due 12/1/06......................   3,157,500
  2,750,000 Leap Wireless International Inc., 12.500% due 4/15/10......   1,773,750
            Level 3 Communications Inc.:
  2,875,000   11.000% due 3/15/08......................................   1,990,937
    875,000   9.125% due 5/1/08........................................     568,750
  5,000,000 Mediacom LLC, 9.500% due 1/15/13 (a).......................   4,900,000
            Nextel Communications Inc.:
 10,000,000   Zero coupon until 10/31/02 (9.750% thereafter), due
               10/31/07................................................   6,900,000
  8,000,000   Zero coupon until 2/15/03 (9.950% thereafter), due
               2/15/08.................................................   5,340,000
  4,150,000 NextLink Communications Inc., 10.750% due 6/1/09...........   2,075,000
            NTL Communications Corp.:
  3,000,000   11.500% due 2/1/06.......................................   2,550,000
 10,000,000   Zero coupon until 10/1/03 (12.375% thereafter), due
               10/1/08.................................................   5,300,000
  8,250,000 Price Communications Wireless Inc., 9.125% due 12/15/06....   8,538,750
            PSINet Inc.:
  1,500,000   11.500% due 11/1/08 (b)(c)...............................     105,000
  4,500,000   11.000% due 8/1/09 (b)(c)................................     315,000
 10,000,000 R.H. Donnelly Corp., 9.125% due 6/1/08.....................  10,250,000
  2,500,000 Rogers Cantel, Inc., 9.375% due 6/1/08.....................   2,487,500
  6,500,000 Rogers Communications Inc., 8.875% due 7/15/07.............   6,532,500
 10,000,000 Sun Media Corp., 9.500% due 2/15/07........................  10,100,000
  1,650,000 Telecorp PCS Inc., 10.625% due 7/15/10.....................   1,575,750
</TABLE>



--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


                                                                         Page 11

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Schedule of Investments (continued)
April 30, 2001

<TABLE>
<CAPTION>
   Face
  Amount                             Security                              Value
-------------------------------------------------------------------------------------
<C>         <S>                                                         <C>
Media - Telecommunications -- 14.7% (continued)
            Telewest Communications PLC:
$ 2,500,000   9.625% due 10/1/06....................................... $  2,300,000
  3,250,000   11.000% due 10/1/07......................................    3,144,375
  3,125,000   Zero coupon until 4/15/04 (9.250% thereafter), due
               4/15/09.................................................    1,773,437
  3,750,000 Ubiquitel Operating Co., zero coupon until 4/15/05 (14.000%
              thereafter), due 4/15/10.................................    1,612,500
 13,000,000 United International Holdings, zero coupon until 2/15/03
              (10.750% thereafter), due 2/15/08........................    6,435,000
  1,000,000 World Color Press, Inc., 7.750% due 2/15/09................      980,000
                                                                        ------------
                                                                         150,240,652
                                                                        ------------
Services - Other -- 5.1%
            Allied Waste North America, Inc.:
  1,850,000   7.875% due 1/1/09........................................    1,826,875
  4,500,000   10.000% due 8/1/09.......................................    4,674,375
  3,500,000 American Tower Corp., 9.375% due 2/1/09 (a)................    3,508,750
  5,000,000 Avis Group Holdings Inc., 11.000% due 5/1/09...............    5,643,750
  4,375,000 Comforce Operating Inc., 12.000% due 12/1/07...............    3,270,313
  5,750,000 Crown Castle International Corp., 10.750% due 8/1/11.......    6,166,875
  4,000,000 Holt Group, 9.750% due 1/15/06 (b)(c)......................      215,000
  1,625,000 Integrated Electric Services Co., 9.375% due 2/1/09........    1,596,562
            Iron Mountain Inc.:
    750,000   8.750% due 9/30/09.......................................      766,875
  2,000,000   8.625% due 4/1/13........................................    2,020,000
  6,000,000 Mail-Well Corp., 8.750% due 12/15/08.......................    5,190,000
  4,400,000 Pierce Leahy Co., 8.125% due 5/15/08.......................    4,389,000
  6,500,000 Safety-Kleen Corp., 9.250% due 5/15/09 (b)(c)..............          650
  6,250,000 SBA Communications Corp., 10.250% due 2/1/09 (a)...........    6,218,750
  4,000,000 Sitel Corp., 9.250% due 3/15/06............................    3,460,000
            Spectrasite Holdings Inc.:
  4,300,000   Zero coupon until 4/15/04 (11.250% thereafter), due
               4/15/09.................................................    2,300,500
  1,000,000   Zero coupon until 3/15/05 (12.875% thereafter), due
               3/15/10.................................................      500,000
                                                                        ------------
                                                                          51,748,275
                                                                        ------------
Technology - Electronics -- 1.2%
  7,000,000 American Business Information Inc., 9.500% due 6/15/08.....    4,585,000
  6,250,000 Polaroid Corp., 11.500% due 2/15/06........................    2,343,750
  6,500,000 Xerox Cap Europe PLC, 5.750% due 5/15/02...................    5,622,500
                                                                        ------------
                                                                          12,551,250
                                                                        ------------
</TABLE>



--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


Page 12

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Schedule of Investments (continued)
April 30, 2001


<TABLE>
<CAPTION>
      Face
     Amount                               Security                              Value
------------------------------------------------------------------------------------------
<C>              <S>                                                         <C>
Transportation -- 1.3%
$ 5,000,000      Enterprise Shipholding Inc., 8.875% due 5/1/08 (a)(b)...... $  2,325,000
  5,500,000      Northwest Airlines Corp., 7.625% due 3/15/05...............    5,252,500
  6,163,415      Viacao Aerea Riograndens, 9.600% due 2/10/05...............    5,639,525
                                                                             ------------
                                                                               13,217,025
                                                                             ------------
Utilities -- 1.8%
  4,000,000      The AES Corp., 9.375% due 9/15/10..........................    4,170,000
  2,875,000      Azurix Corp., 10.750% due 2/15/10..........................    2,932,500
                 Calpine Corp.:
  2,675,000        8.750% due 7/15/07.......................................    2,701,750
  3,500,000        8.500% due 5/1/08........................................    3,508,750
  2,425,000        7.750% due 4/15/09.......................................    2,324,969
  2,500,000        8.625% due 8/15/10.......................................    2,512,500
                                                                             ------------
                                                                               18,150,469
                                                                             ------------
                 Total Corporate Bonds (Cost -- $729,169,372)...............  621,968,578
                                                                             ------------
Convertible Corporate Bonds -- 0.4%
Technology -- 0.4%
  5,875,000      Aspect Telecommunications, zero coupon due 8/10/18.........    1,189,688
  3,625,000      Cypress Semiconductor Corp., 3.750% due 7/1/05.............    3,122,031
                                                                             ------------
                 Total Convertible Corporate Bonds (Cost -- $4,248,928).....    4,311,719
                                                                             ------------
<CAPTION>
      Face
    Amount+
-----------------
<C>              <S>                                                         <C>
Sovereign Bonds -- 28.5%
Argentina -- 3.8%
                 Republic of Argentina:
  8,310,000/ARS/   8.750% due 7/10/02.......................................    6,918,075
    500,000        14.250% due 11/30/02 (d).................................      456,250
 29,000,000        13.969% due 4/10/05 (d)..................................   26,100,000
  8,823,145/ARS/ Bocon Pro 1, 2.766% due 4/1/07 (d).........................    5,604,299
                                                                             ------------
                                                                               39,078,624
                                                                             ------------
Brazil -- 8.1%
                 Federal Republic of Brazil:
 14,950,000        11.250% due 7/26/07......................................   14,755,650
  7,500,000        8.875% due 4/15/24.......................................    5,047,500
</TABLE>



--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


                                                                         Page 13

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Schedule of Investments (continued)
April 30, 2001


<TABLE>
<CAPTION>
   Face
 Amount+                               Security                                Value
----------------------------------------------------------------------------------------
<C>        <S>                                                              <C>
Brazil -- 8.1% (continued)
20,840,000   12.250% due 3/6/30............................................ $18,026,600
51,721,000   11.000% due 8/17/40...........................................  39,320,890
 7,757,883   C bond, 8.000% due 4/15/14....................................   5,847,504
                                                                            -----------
                                                                             82,998,144
                                                                            -----------
Bulgaria -- 1.6%
20,890,000 Republic of Bulgaria, FLIRB, Series A, 3.000% due 7/28/12 (d)...  15,824,175
                                                                            -----------
Columbia -- 0.8%
           Republic of Columbia:
 4,500,000   8.700% due 2/15/16............................................   3,352,500
 4,635,000   11.750% due 2/25/20...........................................   4,209,739
 1,250,000   11.850% due 3/9/28............................................   1,006,250
                                                                            -----------
                                                                              8,568,489
                                                                            -----------
Ecuador -- 1.0%
           Republic of Ecuador:
23,758,000   4.000% due 8/15/30 (a)(d).....................................   9,206,225
 2,200,000   4.000% due 8/15/30 (d)........................................     852,500
                                                                            -----------
                                                                             10,058,725
                                                                            -----------
Ivory Coast -- 0.3%
17,099,998 Republic of Ivory Coast, PDI, due 3/29/18 (b)(c)................   2,564,999
                                                                            -----------
Mexico -- 0.9%
10,000,000 United Mexican States, 8.125% due 12/30/19......................   9,120,000
                                                                            -----------
Panama -- 0.1%
   939,929 Republic of Panama, PDI, 6.4375% due 7/17/16 (d)................     756,643
                                                                            -----------
Peru -- 0.4%
           Republic of Peru:
   175,000   FLIRB, 4.000% due 3/7/17 (a)(d)...............................      94,500
 8,200,000   FLIRB, 4.000% due 3/7/17 (d)..................................   4,428,000
                                                                            -----------
                                                                              4,522,500
                                                                            -----------
Philippines -- 0.1%
 1,333,333 Republic of Philippines, NMB, 6.875% due 1/5/05 (d).............   1,276,667
                                                                            -----------
Poland -- 0.3%
 3,000,000 Republic of Poland, PDI, 6.000% due 10/27/14 (d)................   2,945,625
                                                                            -----------
</TABLE>


--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


Page 14

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Schedule of Investments (continued)
April 30, 2001


<TABLE>
<CAPTION>
   Face
 Amount+                               Security                                Value
-----------------------------------------------------------------------------------------
<C>        <S>                                                              <C>
Russia -- 4.7%
           Russia:
22,500,000   10.000% due 6/26/07........................................... $ 18,084,375
43,657,643   8.250% due 3/31/10............................................   30,160,883
                                                                            ------------
                                                                              48,245,258
                                                                            ------------
Venezuela -- 6.4%
           Republic of Venezuela:
32,315,000   13.625% due 8/15/18...........................................   31,684,858
22,465,000   9.250% due 9/15/27............................................   15,573,862
   499,996   DCB, 7.375% due 12/18/07 (d)..................................      423,746
             FLIRB:
13,856,935    Series A, 5.6875% due 3/31/07 (d)............................   11,700,450
   571,420    Series B, 5.6875% due 3/31/07 (d)............................      482,493
 6,523,213   NMB, 7.500% due 12/18/05 (d)..................................    5,544,731
                                                                            ------------
                                                                              65,410,140
                                                                            ------------

           Total Sovereign Bonds (Cost -- $289,945,558)....................  291,369,989
                                                                            ------------
Loan Participations (e) -- 1.5%
 3,074,246 Kingdom of Morocco, Tranche A, 7.5625% due 1/1/09 (Chase
             Manhattan Bank, Goldman Sachs) (d)............................    2,724,551
           The People's Democratic Republic of Algeria:
 9,263,585   Tranche 1, 5.8125% due 9/4/06 (Chase Manhattan Bank, Goldman
              Sachs) (d)...................................................    8,059,319
 5,684,211   Tranche 3, 5.8125% due 3/4/10 (Chase Manhattan Bank) (d)......    4,604,211
                                                                            ------------
           Total Loan Participations (Cost -- $14,969,002).................   15,388,081
                                                                            ------------
<CAPTION>
  Shares
----------
<C>        <S>                                                              <C>
Common Stock -- 0.0%
     1,311 UnitedGlobalCom Inc., Class A Shares (Cost -- $20,563)..........       21,012
                                                                            ------------
</TABLE>



--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


                                                                         Page 15

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Schedule of Investments (continued)
April 30, 2001


<TABLE>
<CAPTION>
  Shares                               Security                               Value
---------------------------------------------------------------------------------------
<C>        <S>                                                              <C>
Preferred Stock -- 0.5%
    15,417 CSC Holdings Inc., Series M, 11.125% due 4/1/08................. $1,676,599
     3,850 Rural Cellular Corp., 12.500% due 5/11/15.......................  2,762,375
           TCR Holding Corp.:
    17,552   Class B (c)...................................................        176
     9,654   Class C (c)...................................................         97
    25,451   Class D (c)...................................................        255
    52,657   Class E (c)...................................................        527
    23,500 UnitedGlobalCom Inc., Series D, 7.000%..........................    470,000
                                                                            ----------
           Total Preferred Stock (Cost -- $5,748,778)......................  4,910,029
                                                                            ----------
Warrants and Rights (c) -- 0.5%
     5,000 APP China Group Ltd., Expires 3/15/10 (a).......................        500
29,381,748 Contifinancial Corp., Units of Interest, (Represents interests
             in a trust in the liquidation of Contifinancial Corp. and its
             affiliates) (f)...............................................  4,289,735
     2,750 Leap Wireless International Inc., (Exercise price of $96.80 per
             share expiring on 4/15/10. Each warrant exercisable for 5.146
             shares of common stock.) (a)..................................    110,344
     3,500 Mattress Discounters Co., (Exercise price of $0.01 per share
             expiring on 7/15/07. Each warrant exercisable for 4.85 shares
             of Class A common stock and 0.539 shares of Class L common
             stock.).......................................................     26,687
     5,000 Republic Technologies International Inc., Expires 7/15/09.......        500
     5,000 Ubiquitel Operating Co., (Exercise price of $22.74 per share
             expiring on 4/15/10. Each warrant exercisable for 5.965 shares
             of common stock.).............................................     51,250
     8,025 Venezuela Discount Rights.......................................          8
     3,500 Winsloew Furniture, Inc., (Exercise price of $0.01 per share
             expiring on 8/15/07. Each warrant exercisable for 0.2298
             shares of common stock.)......................................     35,875
                                                                            ----------
           Total Warrants and Rights (Cost -- $4,818,110)..................  4,514,899
                                                                            ----------
</TABLE>



--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


Page 16

<PAGE>

                   SALOMON BROTHERS HIGH INCOME FUND II INC
Schedule of Investments (continued)
April 30, 2001


<TABLE>
<CAPTION>
   Face
  Amount                                  Security                                    Value
-------------------------------------------------------------------------------------------------
<C>         <S>                                                                   <C>
Repurchase Agreements -- 7.6%
$38,681,000 J.P. Morgan Securities Inc., 4.450% due 5/1/01; Proceeds at maturity
              -- $38,685,781; (Fully collateralized by U.S. Treasury Bonds,
              6.375% due 8/15/27; Market value -- $39,454,506)................... $   38,681,000
 38,681,000 Warburg Dillon Read LLC, 4.523% due 5/1/01; Proceeds at maturity --
              $38,685,860; (Fully collateralized by U.S. Treasury Notes & Bonds,
              5.625% to 7.250% due 10/31/01 to 5/15/16; Market value --
              $39,454,844).......................................................     38,681,000
                                                                                  --------------
            Total Repurchase Agreements (Cost -- $77,362,000)....................     77,362,000
                                                                                  --------------
            Total Investments -- 100% (Cost -- $1,126,282,311*).................. $1,019,846,307
                                                                                  ==============
</TABLE>

--------
+   Face amount denominated in U.S dollars unless otherwise indicated.
(a) Security is exempt from registration under Rule 144A of the Securities Act
    of 1933. This security may be resold in transactions that are exempt from
    registration, normally to qualified institutional buyers.
(b) Security is currently in default.
(c) Non-income producing security.
(d) Rate shown reflects current rate on instrument with variable rate or step
    coupon rates.
(e) Participation interests were acquired through the financial institutions
    indicated.
(f) Security valued in accordance with fair valuation procedures.
*   Aggregate cost for Federal income tax purposes is substantially the same.


Abbreviations used in this schedule:
----------------------------------------------
ARS   -- Argentine Peso.
C     -- Capitalization Bond.
DCB   -- Debt Conversion Bond.
FLIRB -- Front Loaded Interest Reduction Bond.
NMB   -- New Money Bond.
PDI   -- Past Due Interest.


--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


                                                                         Page 17

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Statement of Assets and Liabilities
April 30, 2001


<TABLE>
<S>                                                                                               <C>
ASSETS:
   Investments, at value (Cost -- $1,126,282,311)................................................ $1,019,846,307
   Cash..........................................................................................            306
   Interest receivable...........................................................................     22,140,053
   Receivable for securities sold................................................................      6,921,732
   Prepaid expenses..............................................................................         31,934
                                                                                                  --------------
   Total Assets..................................................................................  1,048,940,332
                                                                                                  --------------

LIABILITIES:
   Loan (Note 9).................................................................................    260,000,000
   Payable for securities purchased..............................................................     19,835,162
   Dividends payable.............................................................................      2,507,005
   Loan interest payable.........................................................................      1,167,990
   Management fee payable........................................................................        837,517
   Administration fee payable....................................................................         83,752
   Accrued expenses..............................................................................        164,633
                                                                                                  --------------
   Total Liabilities.............................................................................    284,596,059
                                                                                                  --------------
Total Net Assets................................................................................. $  764,344,273
                                                                                                  ==============

NET ASSETS:
   Common stock ($0.001 par value, 100,000,000 shares authorized; 69,003,201 shares outstanding). $       69,003
   Additional paid-in capital....................................................................  1,013,338,636
   Overdistributed net investment income.........................................................     (2,542,310)
   Accumulated net realized loss from security transactions......................................   (140,085,052)
   Net unrealized depreciation of investments....................................................   (106,436,004)
                                                                                                  --------------
Total Net Assets................................................................................. $  764,344,273
                                                                                                  ==============
Net Asset Value, per share ($764,344,273 / 69,003,201 shares)....................................         $11.08
                                                                                                  ==============
</TABLE>




--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


Page 18

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Statement of Operations
For the Year Ended April 30, 2001



<TABLE>
<S>                                                                                 <C>
INCOME:
   Interest........................................................................ $  116,852,466
                                                                                    --------------

EXPENSES:
   Interest expense (Note 9).......................................................     12,974,759
   Management fee (Note 2).........................................................      9,651,573
   Administration fee (Note 2).....................................................        965,157
   Audit and legal.................................................................        249,941
   Custody.........................................................................         76,792
   Directors' fees.................................................................         29,778
   Shareholder communications......................................................         29,453
   Other...........................................................................        152,082
                                                                                    --------------
   Total Expenses..................................................................     24,129,535
                                                                                    --------------
Net Investment Income..............................................................     92,722,931
                                                                                    --------------

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
   Net Realized Loss From Security Transactions (excluding short-term securities):
     Proceeds from sales...........................................................  1,099,639,312
     Cost of securities sold.......................................................  1,156,746,158
                                                                                    --------------
   Net Realized Loss...............................................................    (57,106,846)
                                                                                    --------------
   Change in Net Unrealized Depreciation of Investments:
     Beginning of year.............................................................   (124,238,419)
     End of year...................................................................   (106,436,004)
                                                                                    --------------
   Decrease in Net Unrealized Depreciation.........................................     17,802,415
                                                                                    --------------
Net Loss on Investments............................................................    (39,304,431)
                                                                                    --------------
Increase in Net Assets From Operations............................................. $   53,418,500
                                                                                    ==============
</TABLE>



--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


                                                                         Page 19

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Statements of Changes in Net Assets
For the Years Ended April 30,


<TABLE>
<CAPTION>
                                                                   2001           2000
                                                              -------------  -------------
<S>                                                           <C>            <C>
OPERATIONS:
   Net investment income..................................... $  92,722,931  $  96,576,660
   Net realized loss.........................................   (57,106,846)   (35,895,120)
   (Increase) decrease in net unrealized depreciation........    17,802,415    (77,781,609)
                                                              -------------  -------------
   Increase (Decrease) in Net Assets From Operations.........    53,418,500    (17,100,069)
                                                              -------------  -------------

DISTRIBUTIONS TO SHAREHOLDERS FROM:
   Net investment income.....................................   (95,243,747)   (95,974,620)
   Capital...................................................   (10,559,053)            --
                                                              -------------  -------------
   Decrease in Net Assets From Distributions to Shareholders.  (105,802,800)   (95,974,620)
                                                              -------------  -------------

CAPITAL SHARE TRANSACTIONS:
   Proceeds from shares issued on reinvestment of dividends
   (2,261,462 shares issued).................................    25,985,832             --
   Offering expenses credited to paid-in capital.............            --         24,975
                                                              -------------  -------------
   Increase in Net Assets From Capital Share Transactions....    25,985,832         24,975
                                                              -------------  -------------
Decrease in Net Assets.......................................   (26,398,468)  (113,049,714)

NET ASSETS:
   Beginning of year.........................................   790,742,741    903,792,455
                                                              -------------  -------------
   End of year*.............................................. $ 764,344,273  $ 790,742,741
                                                              =============  =============
* Includes overdistributed net investment income of:......... $  (2,542,310) $     (21,494)
                                                              =============  =============
</TABLE>




--------------------------------------------------------------------------------
                      See Notes to Financial Statements.


Page 20

<PAGE>

                   SALOMON BROTHERS HIGH INCOME FUND II INC
Statement of Cash Flows
For the Year Ended April 30, 2001


<TABLE>
<S>                                                                                        <C>
CASH FLOWS USED BY OPERATING ACTIVITIES:
   Purchases of long-term portfolio investments........................................... $(1,169,115,593)
   Proceeds from disposition of long-term portfolio investments and principal paydowns....   1,023,039,039
   Net sale of short-term portfolio investments...........................................       1,564,000
                                                                                           ---------------
                                                                                              (144,512,554)

   Net investment income..................................................................      92,722,931
   Capitalized income on payment-in-kind securities.......................................        (351,002)
   Amortization of net premium/discount on investments....................................     (24,574,201)
   Net change to receivables/payables related to operations...............................       1,579,444
                                                                                           ---------------
   Net Cash Flows Used by Operating Activities............................................     (75,135,382)
                                                                                           ---------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
   Increase in loan payable...............................................................     155,000,000
   Cash dividends paid....................................................................    (105,850,347)
   Proceeds from reinvestment of dividends................................................      25,985,832
                                                                                           ---------------
   Net Cash Flows Provided by Financing Activities........................................      75,135,485
                                                                                           ---------------
Net Increase in Cash......................................................................             103
Cash, Beginning of year...................................................................             203
                                                                                           ---------------
Cash, End of year......................................................................... $           306
                                                                                           ===============
</TABLE>

--------------------------------------------------------------------------------
                      See Notes to Financial Statements.



                                                                         Page 21

<PAGE>

                   SALOMON BROTHERS HIGH INCOME FUND II INC

Notes to Financial Statements


Note 1. Significant Accounting Policies

Salomon Brothers High Income Fund II Inc ("Fund") was incorporated in Maryland
and is registered as a diversified, closed-end, management investment company
under the Investment Company Act of 1940, as amended. The Fund seeks to
maintain a high level of current income by investing primarily in a diversified
portfolio of high-yield U.S. corporate debt securities and high-yield foreign
sovereign debt securities. As a secondary objective, the Fund seeks capital
appreciation.

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.

(a) SECURITIES VALUATION. In valuing the Fund's assets, all securities for
which market quotations are readily available are valued (i) at the last sale
price prior to the time of determination if there were a sale on the date of
determination, (ii) at the mean between the last current bid and asked prices
if there were no sales on such date and bid and asked quotations are available,
and (iii) at the bid price if there were no sales price on such date and only
bid quotations are available. Publicly traded foreign government debt
securities are typically traded internationally in the over-the-counter market,
and are valued at the mean between the last current bid and asked price as at
the close of business of that market. However, when the spread between bid and
asked price exceeds five percent of the par value of the security, the security
is valued at the bid price. Securities may also be 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 and all
other securities and assets are valued at fair value as determined in good
faith by, or under procedures established by, the Board of Directors.

(b) INVESTMENT TRANSACTIONS. Investment transactions are recorded on the trade
date. Interest income is accrued on a daily basis. Market discount or premium
on securities purchased is accreted or amortized, respectively, on an effective
yield basis over the life of the security. The Fund uses the specific
identification method for determining realized gain or loss on investments.
Dividend income is recorded on ex-dividend date.

(c) FEDERAL INCOME TAXES. The Fund has complied and intends to continue to
comply with the requirements of the Internal Revenue Code of 1986, as amended,
applicable to regulated investment companies, and to distribute all of its
income to its shareholders. Therefore, no federal income tax or excise tax
provision is required.



Page 22

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Notes to Financial Statements (continued)

(d) DIVIDENDS AND DISTRIBUTIONS. The Fund declares and pays dividends to
shareholders monthly from net investment income. Net realized gains, if any, in
excess of loss carryovers are expected to be distributed annually. Dividends
and distributions to shareholders are recorded on the ex-dividend date. 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. To the extent these differences are
permanent in nature, such amounts are reclassified within the components of net
assets.

(e) REPURCHASE AGREEMENTS. When entering into repurchase agreements, it is the
Fund's policy to take possession, through its custodian, of the underlying
collateral and to monitor its value at the time the arrangement is entered into
and during the term of the repurchase agreement to ensure that it equals or
exceeds the repurchase price. In the event of default of the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain circumstances, in the
event of default or bankruptcy by the other party to the agreement, realization
and/or retention of the collateral may be subject to legal proceedings.

(f) YEAR END TAX RECLASSIFICATIONS. The character of income and gains to be
distributed are determined in accordance with income tax regulations which may
differ from GAAP. At April 30, 2001, reclassifications were made to the capital
accounts of the Fund to reflect permanent book/tax differences and income and
gains available for distributions under income tax regulations. Net investment
income, net realized loss and net assets were not affected by this change.

Note 2. Management Fee and Other Transactions

Salomon Brothers Asset Management Inc, a wholly-owned subsidiary of Salomon
Smith Barney Holdings ("SSBH"), which, in turn, is a subsidiary of Citigroup
Inc., acts as investment manager ("Investment Manager") to the Fund. The
Investment Manager is responsible on a day-to-day basis for the management of
the Fund's portfolio in accordance with the Fund's investment objectives and
policies and for making decisions to buy, sell or hold particular securities of
the Fund. The management fee for these services is payable monthly at an annual
rate of 1.00% of the Fund's average weekly net assets plus the proceeds of any
outstanding borrowings used for leverage.

Smith Barney Fund Management LLC, formerly known as SSB Citi Fund Management
LLC, another subsidiary of SSBH, acts as the Fund's administrator
("Administrator") for which the Fund pays a monthly fee at an annual rate of
0.10% of the value of the Fund's average weekly net assets plus the proceeds of
any outstanding borrowings used for leverage. The administrator performs
certain administrative services necessary for the operation of the Fund.



                                                                         Page 23

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Notes to Financial Statements (continued)

During periods in which the Fund is utilizing financial leverage, the fees
which are payable to the Investment Manager and Administrator as a percentage
of the Fund's assets will be higher than if the Fund did not utilize leverage
because the fees are calculated as a percentage of the Fund's assets, including
those investments purchased with leverage.

At April 30, 2001, the Investment Manager and Salomon Smith Barney Inc., an
affiliate of the Investment Manager, owned 6,667 shares of the Fund.

Certain officers and/or directors of the Fund are also officers and/or
directors of the Investment Manager.

Note 3. Portfolio Activity

During the year ended April 30, 2001, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:

<TABLE>
<S>                                                         <C>
   Purchases............................................... $1,213,802,483
                                                            ==============
   Sales................................................... $1,099,639,312
                                                            ==============
</TABLE>

At April 30, 2001, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
<TABLE>
<S>                                                         <C>
   Gross unrealized appreciation........................... $  29,200,718
   Gross unrealized depreciation...........................  (135,636,722)
                                                            -------------
   Net unrealized depreciation............................. $(106,436,004)
                                                            =============
</TABLE>

Note 4. Option Contracts

The Fund may from time to time enter into option contracts. Premiums paid when
put or call options are purchased by the Fund, represent investments, which are
marked-to-market daily. When a purchased option expires, the Fund will realize
a loss in the amount of the premium paid. When the Fund enters into a closing
sales transaction, the Fund will realize a gain or loss depending on whether
the proceeds from the closing sales transaction are greater or less than the
premium paid for the option. When the Fund exercises a put option, it will
realize a gain or loss from the sale of the underlying security and the
proceeds from such sale will be decreased by the premium originally paid. When
the Fund exercises a call option, the cost of the security which the Fund
purchases upon exercise will be increased by the premium originally paid.

At April 30, 2001, the Fund did not hold any purchased call or put option
contracts.

When the Fund writes a call or put option, an amount equal to the premium
received by the Fund is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Fund realizes a gain
equal to the amount of the premium received. When the Fund enters into a
closing purchase transaction, the Fund realizes a gain or loss depending upon
whether the cost of the closing transaction is greater or less than the premium
originally received, without regard to any unrealized gain or loss on the
underlying security, and the liability related to



Page 24

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Notes to Financial Statements (continued)

such option is eliminated. When a written call option is exercised the proceeds
of the security sold will be increased by the premium originally received. When
a written put option is exercised, the amount of the premium originally
received will reduce the cost of the security which the Fund purchased upon
exercise. When written index options are exercised, settlement is made in cash.

The Fund enters into options for hedging purposes. The risk associated with
purchasing options is limited to the premium originally paid. The risk in
writing a covered call option is that the Fund gives up the opportunity to
participate in any increase in the price of the underlying security beyond the
exercise price. The risk in writing a put option is that the Fund is exposed to
the risk of loss if the market price of the underlying security declines.

During the year ended April 30, 2001, the Fund did not enter into any written
covered call or put option contracts.

Note 5. Loan Participations

The Fund invests in fixed and floating rate loans arranged through private
negotiations between a foreign sovereign entity and one or more financial
institutions. The Fund's investment in any such loan may be in the form of a
participation in or an assignment of the loan.

In connection with purchasing participations, the Fund generally will have no
right to enforce compliance by the borrower with the terms of the loan
agreement relating to the loan, nor any rights of set-off against the borrower,
and the Fund may not benefit directly from any collateral supporting the loan
in which it has purchased the participation. As a result, the Fund will assume
the credit risk of both the borrower and the lender that is selling the
participation. In the event of the insolvency of the lender selling the
participation, the Fund may be treated as a general creditor of the lender and
may not benefit from any set-off between the lender and the borrower.

At April 30, 2001, the Fund held loan participations with a total cost of
$14,969,002.

Note 6. Credit Risk

The yields of emerging markets debt obligations and high-yield corporate debt
obligations reflect, among other things, perceived credit risk. The Fund's
investment in securities rated below investment grade typically involve risks
not associated with higher rated securities including, among others, overall
greater risk of timely and ultimate payment of interest and principal, greater
market price volatility and less liquid secondary market trading. The
consequences of political, social, economic or diplomatic changes may have
disruptive effects on the market prices of investments held by the Fund.

Note 7. Dividends Subsequent to April 30, 2001

The Board of Directors of the Fund declared a common stock dividend from net
investment income of $0.115 per share for the months of May, June, July and
August 2001, payable on May 25, June 29, July 27 and August 31, 2001 to
shareholders of record on May 15, June 12, July 17 and August 14, 2001,
respectively.


                                                                         Page 25

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Notes to Financial Statements (continued)

Note 8. Capital Loss Carryforward

At April 30, 2001, the Fund had, for Federal income tax purposes, a capital
loss carryforward of approximately $83,075,000, available to offset future
capital gains. To the extent that these carryforward losses are used to offset
capital gains, it is probable that any gains so offset will not be distributed.

The amount and expiration of the carryforwards are indicated below. Expiration
occurs on April 30 of the year indicated:

<TABLE>
<CAPTION>
                                 2007        2008        2009        Total
                              ----------- ----------- ----------- -----------
<S>                           <C>         <C>         <C>         <C>
   Carryforward Amounts...... $32,298,000 $40,142,000 $10,635,000 $83,075,000
</TABLE>

Note 9. Loan

At April 30, 2001, the Fund had outstanding a $260,000,000 loan pursuant to a
revolving credit and security agreement with CXC Inc., a commercial paper
conduit issuer for which Citicorp North America Inc. acts as administrative
agent. The loans generally bear interest at a variable rate based on the
weighted average interest rates of the underlying commercial paper or LIBOR,
plus any applicable margin. Securities held by the fund are subject to a lien,
granted to the lenders, to the extent of the borrowing outstanding and any
additional expenses.


Page 26

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Financial Highlights

Data for a share of capital stock outstanding throughout the year ended April
30, unless otherwise noted:

<TABLE>
<CAPTION>
                                                                        2001      2000      1999(1)
-------------------------------------------------------------------------------------------------------
<S>                                                                   <C>       <C>       <C>
Net Asset Value, Beginning of Year................................... $  11.85  $  13.54  $  15.00
                                                                      --------  --------  --------
Income (Loss) From Operations:
  Net investment income..............................................     1.37      1.45      1.23
  Net realized and unrealized loss...................................    (0.58)    (1.70)    (1.45)
                                                                      --------  --------  --------
Total Income (Loss) From Operations..................................     0.79     (0.25)    (0.22)
                                                                      --------  --------  --------
Offering Costs on Issuance of Common Stock...........................       --        --     (0.02)
                                                                      --------  --------  --------
Less Distributions From:
  Net investment income..............................................    (1.40)    (1.44)    (1.22)
  Capital............................................................    (0.16)       --        --
                                                                      --------  --------  --------
Total Distributions..................................................    (1.56)    (1.44)    (1.22)
                                                                      ========  ========  ========
Net Asset Value, End of Year......................................... $  11.08  $  11.85  $  13.54
                                                                      ========  ========  ========
Per Share Market Value, End of Year.................................. $  10.96  $ 11.750  $ 12.625
                                                                      ========  ========  ========
Total Return, Based on Market Price Per Share(2).....................     6.85%     5.45%    (7.57)%++
Ratios to Average Net Assets:
  Total expenses, including interest expense.........................     3.09%     2.09%     1.54%+
  Total expenses, excluding interest expense (operating expenses)....     1.43%     1.29%     1.24%+
  Net investment income..............................................    11.87%    11.48%     9.84%+
Loans Outstanding, End of Year (000s)................................ $260,000  $105,000  $105,000
Weighted Average Interest Rate on Loans..............................     6.69%     6.18%     5.72%
Net Assets, End of Year (000s)....................................... $764,344  $790,743  $903,792
Portfolio Turnover Rate..............................................      118%       68%       66%
-------------------------------------------------------------------------------------------------------
</TABLE>

(1) For the period from May 28, 1998 (commencement of operations) through April
    30, 1999.
(2) For purposes of this calculation, dividends 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.
++  Total return is not annualized, as it may not be representative of the
    total return for the year.
+   Annualized.


                                                                         Page 27

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Report of Independent Accountants

To the Board of Directors and Shareholders of
Salomon Brothers High Income Fund II Inc

In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations, of
changes in net assets and of cash flows and the financial highlights present
fairly, in all material respects, the financial position of Salomon Brothers
High Income Fund II Inc (the "Fund") at April 30, 2001, the results of its
operations and its cash flows for the year then ended, and 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 two years in the period then ended and for the
period May 28, 1998 (commencement of operations) through April 30, 1999, 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 April 30, 2001 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.

PricewaterhouseCoopers LLP
New York, NY
June 21, 2001


Page 28

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Selected Quarterly Financial Information (unaudited)

Summary of quarterly results of operations:

                                                            Net Realized &
                                         Net Investment       Unrealized
                                             Income           Gain (Loss)
                                        ----------------- -------------------
Quarters Ended(1)                        Total  Per Share   Total   Per Share
------------------------------------------------------------------------------
July 31, 1999.......................... $22,833 $0.34     $(44,121) $(0.66)
October 31, 1999.......................  24,606  0.37      (28,350)  (0.42)
January 31, 2000.......................  25,079  0.38       (6,790)  (0.10)
April 30, 2000.........................  24,059  0.36      (34,416)  (0.52)
July 31, 2000..........................  21,722  0.32       12,537    0.18
October 31, 2000.......................  24,677  0.37      (53,861)  (0.79)
January 31, 2001.......................  23,039  0.34       25,060    0.36
April 30, 2001.........................  23,131  0.34      (22,811)  (0.33)

--------
(1) Totals expressed in thousands of dollars except per share amounts.


                                                                         Page 29

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Dividend Reinvestment Plan (unaudited)

Pursuant to certain rules of the Securities and Exchange Commission the
following additional disclosure is provided.

Each shareholder purchasing shares of common stock ("Shares") of Salomon
Brothers High Income Fund II Inc ("Fund") will be deemed to have elected to be
a participant in the Dividend Reinvestment Plan ("Plan"), unless the
shareholder specifically elects in writing (addressed to the Agent at the
address below or to any nominee who holds Shares for the shareholder in its
name) to receive all income dividends and distributions of capital gains in
cash, paid by check, mailed directly to the record holder by or under the
direction of PFPC Global Fund Services, formerly known as First Data Investor
Services Group, Inc. as the Fund's dividend-paying agent ("Agent"). A
shareholder whose Shares are held in the name of a broker or nominee who does
not provide an automatic reinvestment service may be required to take such
Shares out of "street name" and register such Shares in the shareholder's name
in order to participate, otherwise dividends and distributions will be paid in
cash to such shareholder by the broker or nominee. Each participant in the Plan
is referred to herein as a "Participant." The Agent will act as Agent for each
Participant, and will open accounts for each Participant under the Plan in the
same name as their Shares are registered.

Unless the Fund declares a dividend or distribution payable only in the form of
cash, the Agent will apply all dividends and distributions in the manner set
forth below.

If, on the determination date (as defined below), the market price per Share
equals or exceeds the net asset value per Share on that date (such condition, a
"market premium"), the Agent will receive the dividend or distribution in newly
issued Shares of the Fund on behalf of Participants. If, on the determination
date, the net asset value per Share exceeds the market price per Share (such
condition, a "market discount"), the Agent will purchase Shares in the open
market. The determination date will be the fourth New York Stock Exchange
trading day (a New York Stock Exchange trading day being referred to herein as
a "Trading Day") preceding the payment date for the dividend or distribution.
For purposes herein, "market price" will mean the average of the highest and
lowest prices at which the Shares sell on the New York Stock Exchange on the
particular date, or if there is no sale on that date, the average of the
closing bid and asked quotations.

Purchases made by the Agent will be made as soon as practicable commencing on
the Trading Day following the determination date and terminating no later than
30 days after the dividend or distribution payment date except where temporary
curtailment or suspension of purchase is necessary to comply with applicable
provisions of federal securities law; provided, however, that such purchases
will, in any event, terminate on the Trading Day prior to the "ex-dividend"
date next succeeding the dividend or distribution payment date.


Page 30

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Dividend Reinvestment Plan (unaudited) (continued)

If (i) the Agent has not invested the full dividend amount in open market
purchases by the date specified at the bottom of the prior page as the date on
which such purchases must terminate or (ii) a market discount shifts to a
market premium during the purchase period, then the Agent will cease making
open market purchases and will receive the uninvested portion of the dividend
amount in newly issued Shares (x) in the case of (i) above, at the close of
business on the date the Agent is required to terminate making open market
purchases as specified at the bottom of the prior page or (y) in the case of
(ii) above, at the close of business on the date such shift occurs; but in no
event prior to the payment date for the dividend or distribution.

In the event that all or part of a dividend or distribution amount is to be
paid in newly issued Shares, such Shares will be issued to Participants in
accordance with the following formula: (i) if, on the valuation date, the net
asset value per share is less than or equal to the market price per Share, then
the newly issued Shares will be valued at net asset value per Share on the
valuation date provided, however, that if the net asset value is less than 95%
of the market price on the valuation date, then such Shares will be issued at
95% of the market price and (ii) if, on the valuation date, the net asset value
per share is greater than the market price per Share, then the newly issued
Shares will be issued at the market price on the valuation date. The valuation
date will be the dividend or distribution payment date, except that with
respect to Shares issued pursuant to the paragraph above, the valuation date
will be the date such Shares are issued. If a date that would otherwise be a
valuation date is not a Trading Day, the valuation date will be the next
preceding Trading Day.

The open market purchases provided for above may be made on any securities
exchange on which the Shares of the Fund are traded, in the over-the-counter
market or in negotiated transactions, and may be on such terms as to price,
delivery and otherwise as the Agent shall determine. Funds held by the Agent
uninvested will not bear interest, and it is understood that, in any event, the
Agent shall have no liability in connection with any inability to purchase
Shares within the time periods herein provided, or with the timing of any
purchases effected. The Agent shall have no responsibility as to the value of
the Shares acquired for the Participant's account. The Agent may commingle
amounts of all Participants to be used for open market purchases of Shares and
the price per Share allocable to each Participant in connection with such
purchases shall be the average price (including brokerage commissions) of all
Shares purchased by the Agent.

The Agent will maintain all Participant accounts in the Plan and will furnish
written confirmations of all transactions in each account, including
information needed by Participants for personal and tax records. The Agent will
hold Shares acquired pursuant to the Plan in noncertificated form in the
Participant's name or that of its nominee, and each Participant's


                                                                         Page 31

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Dividend Reinvestment Plan (unaudited) (continued)

proxy will include those Shares purchased pursuant to the Plan. The Agent will
forward to Participants any proxy solicitation material and will vote any
Shares so held for Participants only in accordance with the proxy returned by
Participants to the Fund. Upon written request, the Agent will deliver to
Participants, without charge, a certificate or certificates for the full
Shares.

The Agent will confirm to Participants each acquisition made for their
respective accounts as soon as practicable but not later than 60 days after the
date thereof. Although Participants may from time to time have an undivided
fractional interest (computed to three decimal places) in a Share of the Fund,
no certificates for fractional shares will be issued. Dividends and
distributions on fractional shares will be credited to each Participant's
account. In the event of termination of a Participant's account under the Plan,
the Agent will adjust for any such undivided fractional interest in cash at the
market value of the Fund's Shares at the time of termination less the pro rata
expense of any sale required to make such an adjustment.

Any share dividends or split shares distributed by the Fund on Shares held by
the Agent for Participants will be credited to their respective accounts. In
the event that the Fund makes available to Participants rights to purchase
additional Shares or other securities, the Shares held for Participants under
the Plan will be added to other Shares held by the Participants in calculating
the number of rights to be issued to Participants.

The Agent's service fee for handling capital gains distributions or income
dividends will be paid by the Fund. Participants will be charged a pro rata
share of brokerage commissions on all open market purchases.

Participants may terminate their accounts under the Plan by notifying the Agent
in writing or by calling 1-800-331-1710. Such termination will be effective
immediately if notice is received by the Agent not less than ten days prior to
any dividend or distribution record date; otherwise such termination will be
effective on the first Trading Day after the payment due for such dividend or
distribution with respect to any subsequent dividend or distribution. The Plan
may be amended or terminated by the Fund as applied to any dividend or capital
gains distribution paid subsequent to written notice of the change or
termination sent to Participants at least 30 days prior to the record date for
the dividend or capital gains distribution. The Plan may be amended or
terminated by the Agent, with the Fund's prior written consent, on at least 30
days' written notice to Plan Participants. Notwithstanding the preceding two
sentences, the Agent or the Fund may amend or supplement the Plan at any time
or times when necessary or appropriate to comply with applicable law or rules
or policies of the Securities and Exchange Commission or any other regulatory
authority. Upon any termination, the Agent will cause a certificate or
certificates for the full Shares held by each Participant under the Plan and
cash adjustment for any fraction to be delivered to each Participant without
charge. If the Participant elects by notice


Page 32

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Dividend Reinvestment Plan (unaudited) (continued)

to the Agent in writing in advance of such termination to have the Agent sell
part or all of a Participant's Shares and remit the proceeds to Participant,
the Agent is authorized to deduct a $2.50 fee plus brokerage commission for
this transaction from the proceeds.

Any amendment or supplement shall be deemed to be accepted by each Participant
unless, prior to the effective date thereof, the Agent receives written notice
of the termination of the Participant's account under the Plan. Any such
amendment may include an appointment by the Agent in its place and stead of a
successor Agent under these terms and conditions, with full power and authority
to perform all or any of the acts to be performed by the Agent under these
terms and conditions. Upon any such appointment of an Agent for the purpose of
receiving dividends and distributions, the Fund will be authorized to pay to
such successor Agent, for each Participant's account, all dividends and
distributions payable on Shares of the Fund held in each Participant's name or
under the Plan for retention or application by such successor Agent as provided
in these terms and conditions.

In the case of Participants, such as banks, broker-dealers or other nominees,
which hold Shares for others who are beneficial owners ("Nominee Holders"), the
Agent will administer the Plan on the basis of the number of Shares certified
from time to time by each Nominee Holder as representing the total amount
registered in the Nominee Holder's name and held for the account of beneficial
owners who are to participate in the Plan.

The Agent shall at all times act in good faith and use its best efforts within
reasonable limits to insure the accuracy of all services performed under this
Agreement and to comply with applicable law, but assumes no responsibility and
shall not be liable for loss or damage due to errors unless such error is
caused by its negligence, bad faith, or willful misconduct or that of its
employees.

All correspondence concerning the Plan should be directed to the Agent at P.O.
Box 8030, Boston, Massachusetts 02266-8030.

Additional Shareholder Information (unaudited)

This report is transmitted to the shareholders of Salomon Brothers High Income
Fund II 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, as amended, that from time to time the Fund may purchase,
at market prices, shares of its common stock in the open market.


                                                                         Page 33

<PAGE>

SALOMON BROTHERS HIGH INCOME FUND II INC

Directors

DANIEL P. CRONIN
   Vice President -- Associate General Counsel, Pfizer International Inc

HEATH B. MCLENDON
   Managing Director, Salomon Smith Barney Inc.; President and Director, Smith
   Barney Fund Management LLC and Travelers Investment Advisors, Inc.

RIORDAN ROETT
   Professor and Director,
   Latin American Studies Program, Paul H. Nitze School of Advanced
   International Studies, Johns Hopkins University

JESWALD W. SALACUSE
   Henry J. Braker Professor of
   Commercial Law, and formerly Dean, The Fletcher School of Law & Diplomacy
   Tufts University

Officers

HEATH B. MCLENDON
   Chairman and President

LEWIS E. DAIDONE
   Executive Vice President and Treasurer

MAUREEN O'CALLAGHAN
   Executive Vice President

JAMES E. CRAIGE
   Executive Vice President

THOMAS K. FLANAGAN
   Executive Vice President

BETH A. SEMMEL
   Executive Vice President

PETER J. WILBY
   Executive Vice President

ANTHONY PACE
   Controller

CHRISTINA T. SYDOR
   Secretary

Salomon Brothers High Income Fund II Inc
   7 World Trade Center New York, New York 10048 Telephone 1-888-777-0102

INVESTMENT MANAGER
   Salomon Brothers Asset Management Inc 7 World Trade Center New York, New
   York 10048

CUSTODIAN
   PFPC Trust Company 17th and Chestnut Streets Philadelphia, Pennsylvania
   19103

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

INDEPENDENT ACCOUNTANTS
   PricewaterhouseCoopers LLP 1177 Avenue of the Americas New York, New York
   10036

LEGAL COUNSEL
   Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017

NEW YORK STOCK EXCHANGE SYMBOL
   HIX


Page 34

<PAGE>

      Salomon Brothers
      High Income Fund II Inc


      Annual Report
      April 30, 2001

            -------------------------------
          Salomon Brothers Asset Management
                    --------------------------------------

                                   BULK RATE
                                 U.S. POSTAGE
                                     PAID
                               STATEN ISLAND, NY
                                PERMIT No. 169
PFPC Global Fund Services
P.O. Box 8030
Boston, MA 02266-8030

</TEXT>
</DOCUMENT>
