Fund Description: Western Asset Managed Municipals Fund, formerly the Managed Municipals Portfolio, is a non-diversified, closed-end management investment company. <p> INVESTMENT OBJECTIVE: The Fund seeks as high a level of current income exempt from federal income tax as is consistent with the preservation of principal. <p> FUND STRATEGY: The fund seeks to achieve its objective by investing primarily in investment grade municipal debt securities issued by state and local governments, political subdivisions, agencies and public authorities (municipal obligations). Under normal market conditions, the fund invests at least 80% of its total assets in municipal obligations rated investment grade at the time of investment. The fund issued $250 million of municipal auction rate cumulative preferred shares on May 22, 2002. This offering enabled the fund to invest in additional securities that met the fund's objectives. So long as the rates earned by the fund's portfolio (net of expenses) are greater than the rate the fund is paying on its preferred shares, the fund may be able to increase the income stream for its common shareholders. Changes in net asset value and market price, both up and down, are magnified by leverage. <p> FUND MANAGEMENT: Legg Mason Partners Fund Advisor, LLC, a wholly owned subsidiary of Franklin Resources, Inc.. (NYSE:BEN), is the Fund's investment manager, and provides administrative and management services to the Fund. Western Asset Management Company, an affiliate of the adviser, is the Fund's subadviser and is responsible for the day-to-day portfolio management of the Fund.