Clearbridge MLP and Midstream Fund : Annual Report

Annual Report November 30, 2021

CLEARBRIDGE

MLP AND MIDSTREAM FUND INC. (CEM)

INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Fund objective

Letter from the chairman

The Fund's investment objective is to provide a high level of total return with an emphasis on cash distributions.

The Fund seeks to achieve its objective by investing primarily in energy master limited partners hips ("MLPs") and energy midstream entities.

What's inside

Letter from the chairman	II
Fund overview	1
Fund at a glance	8
Fund performance	9
Schedule of investments	11
Statement of assets and
liabilities	13
Statement of operations	14
Statements of changes in net
assets	15
Statement of cash flows	16
Financial highlights	17
Notes to financial statements	19
Report of independent
registered public
accounting firm	33
Additional information	34
Annual chief executive officer
and principal financial officer
certifications	40
Other shareholder
communications regarding
accounting matters	41
Summary of information
regarding the Fund	42
Dividend reinvestment plan	72

Dear Shareholder,

We are pleased to provide the annual report of ClearBridge MLP and Midstream Fund Inc. for the twelve-month reporting period ended November 30, 2021. Please read on for a detailed look at prevailing economic and market conditions during the Fund's reporting period and to learn how those conditions have affected Fund performance.

As always, we remain committed to providing you with excellent service and a full spectrum of investment choices. We also remain committed to supplementing the support you receive from your financial advisor. One way we accomplish this is through our website, www.franklintempleton.com. Here you can gain immediate access to market and investment information, including:

• Fund prices and performance,
• Market insights and commentaries from our portfolio managers, and
• A host of educational resources.

We look forward to helping you meet your financial goals.

Sincerely

Jane Trust, CFA

Chairman, President and Chief Executive Officer

December 31, 2021

II ClearBridge MLP and Midstream Fund Inc.

Fund overview

Q. What is the Fund's investment strategy?

A. The Fund's investment objective i s to p rovide a h igh level of total return with an emphasis on cash distrib utions. The Fund seeks to achieve its objective by investing primarily in energy master limited partnerships ("MLPs") and energy midstream entities. Under normal market conditions, the Fund invests at least 80% of its managed assets in energy MLPs and energy midstream entities (the 80% policy).

For purposes of the 80% policy, t he Fund considers investments in MLPs to include investments that offer economic exposure to p ublic and private MLPs in the form of MLP equity securities, securities of entities holding primarily general partner or managing member interests in MLPs, securities that are derivatives of interests in MLPs (including I-Shares),exchange-traded funds that primarily hold MLP interests and debt securities of MLPs. For purposes of the 80% policy, t he Fund considers investments in midstream entities as direct or indirect investments in those entitie s t hat provide midstream services including the gathering, transporting, processing, fractionation, storing, refining , and distribution of oil, natural gas liquids, natural gas and refined petroleu m p roducts. The Fund considers an entity to be within the energy sector if it derives at least 50% of its revenues from the business of exploring, developing, producing, gathering, fractionating, transporti ng, processin g, storing, refining, distributing, mining or marketing natural gas, natural gas liquids (including propane), crude oil, refined petroleum products or coal. The Fund may also invest up to 20% of its managed assets in other securities that are not MLPs or midstream entities.

We focus primarily on energy-related M LPs and midstream entities with stable, predictab le cash flows, using a bottom-up process to find MLPs and midstream entities that we believe offer sustainable and predictab le distributions, as well as relatively low direct commodity exposure. We a lso seek out compa nies with the potential to grow their busines ses, and thereby their distributions, over time, evaluating companies based on their geographic footprints, the markets and types of assets they invest in, their balance sheet strength and their ability to make accretive acquisitions.

ClearBrid ge Investments, LLC is the Fund's subadviser. The portfolio managers primarily responsible for overseeing the day-to-day management of the Fund are Michael Clarfel d, CFA, Chris Eades, and Peter Va nderlee, CFA.

Q. What were the overall market conditions during the Fund's reporting period?

A. Equities delivered robust performance during the twelve-month reporting period ended November 30, 2021, as the approval and subseque nt rollout of multiple COVID-19 vaccines combined with accommodati ve monetary policy and ambitious fiscal spending helped the S&P 500 Indexi to a gain of 27.92%. The market was led by cyclical 1 stocks benefiting from the econom ic recovery, as reopened busine sses, greater mobility and a healthy consumer encouraged spending and productio n, and high-growth technology stocks benefiting from

• Cyclicals consists of the following industries: automotive, entertainment, gaming, home construction, lodging, retailers, restaura nts, textiles, and other consumer services.

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Fund overview (cont'd)

stron g s ecular trends as well as a l ingering stay-at- home environment. More defensive non-cyclical2 sectors trailed.

The reporting period began with positive developm ents for COVID-19 vaccines and resolution of the U.S. election , which led to a b roadening of market leadership from the mega cap growth stocks that had soared during the height of pandemic lockdowns. Positive COVID-19 vaccine trial results from Pfizer/BioNTech and Moderna increased optimism about an eventual return to normal economic activity, sparking a rally in cyclical areas of the market. In the fourth quarter of 2020, value stocks, led by energy and financials, outperformed growth stocks for the first time since 2018. Stocks also benefited as Joe Biden won the race for president and looked set to govern with a s mall majority in Congress

Aggressive fiscal and monetary policies continued unabated in early 2021, helping support consumer demand that, combined with stop-and-start supply chain recovery as COVID-19 rippled throug h g lobal regions, raised inflation concerns and led to soaring commodi ty prices. Despite waves of COVID-19 periodically offering a b id to tech stocks that would benefit from a stay-at-home environment, inflation worries led to a steepening yield curve, weighing on high-multiple growth stocks and supporting cyclicals. Amid easing business restrictions and accommodating fiscal and monetary policies, the U.S. economy picked up steam, with business confidence and new jobs numbers increasing steadily

Markets wavered in September 2021 after the Delta variant of COVID-19 put a pause on recovery plays and higher inflation coincided with signals from the Federal Reserve Board that it would reduce its bond buying as early as November and potentially raise the federal funds rate in late 2022 or 2023. Equities delivered a flattish third quarter of 2021 as already challenging labor and supply shortages and broad-based inflationa ry pressures intensified, weighing on industrials and materials companies. Energy felt crosswinds from a s lowing Chinese economy even while global demand remained strong. Robust third quarter 2021 corporate earnings, however, s uggesting companies have largely been able to absorb inflationary pressures, led to strong gains in October while the discovery of the Omicron variant of COVID-19 in late November 2021 reintroduced risks of pandemic-related restrictio ns.

Q. What were the overall market conditions for the MLP sector during the reporting period?

A. The global rollout of vaccines, combined with heavy government stimulus, helped brighten the outlook for economic reopening over the reporting period, supporting strong demand for energy and helping oil prices recove r f rom $45 to $66 per barrel of We st Texas Intermediate crude. The period saw the global oil market continue its move from grossly oversupp lied, following a demand plummet at the outset of the pandemic in early 2020, to modestly undersup plied. Global oil productio n i ncreases beginning in the fourth quarter of 2020 continued throughout the period, benefiting the MLP sector, w ith the Alerian MLP Indexii gainin g 38.75% for the twe lve-month reporting period. This trailed the S&P 500 Index's energy sector's (+56.61% ) return, dominated by higher-beta oil exploration and

• Non-cyclicals consists of the following industries: consumer products, food/beverage, health care, pharmaceuticals, supermarkets and tobacco.

2 ClearBridge MLP and Midstream Fund Inc. 2021 Annual Report

production companie s, whi le outperform ing the S&P 500 Index's (+27.92% ) g ain. Global oil demand is expected to average roughly 96 million barrels per day in 2021 and approac h previo us peak demand in 2022

Q. How did we respond to these changing market conditions?

A. Our investment approach remained consistent throughout the reporting period. We continued to focus on MLPs and infrastructure companies that are engaged in the midstream space. These companies are generally less exposed to the volatility of commodi ty prices and have business models that are largely fee based. We focus on companies with high-quality assets, solid balance sheets and good growth outlooks.

The pathway to U.S. oil production approac hing pre-pandem ic levels is through increasing drilling activity. With crude oil futures currently discounting roughly $65 per barrel over the next two years, there should be sufficient economic returns to expect a continued i ncrease in the number of rigs drilling. Yet, large publicly traded oil and gas produce rs have asserted they will not significantly increase drilling activity, even with crude oil and natural gas prices at current levels. Their stated modus operandi is to return free cash flow to investors rather than increase drilling activity. This is in direct contrast to previous reporting cycles.

Perhaps contrarian, our view remains that if economic returns are there (and they are), capital will find its way to drilling more wells. Rig count acceleration may be slower than in prior cycles, but, in our view, economic returns will drive capital toward increasing the number of wells drilled. This should result in a continued recovery in U.S. production volumes, which should drive growing cash flows for U.S. midstream companies in

both 2022 and 2023. It is also importa nt to note that a continued recovery in U.S. production volumes will come with little capital spending requirements on the part of midstream companies. The infrastructure systems are largely built out.

Our base case remains that global oil demand continues to recover to pre-pandemic levels during 2022, driving the need for more oil supply on the global market. At present, oil prices continue to signal a need for continued increases in U.S. drilling activity to bring more oil onto the market. This, in turn, should increase throughputs across energy infrastructure systems in the U.S. allowing growing cash flows to fully display the benefit of the evolved U.S. midstream busines s model.

Performance review

For the twelve months ended November 30, 2021, ClearBridge MLP and Midstream

Fund Inc. returned 64.74% based on its net asset value ("NAV") iii and 76.05% based on its New York Stock Exchange ("NYSE") market price per share. The Alerian MLP Index and the Lipper Energy MLP Closed-End Funds Category Average iv returned 38.75% and 46.53%, respectively, over the same time frame. Please note that Lipper performance returns are based on each fund's NAV

The Fund has a practice of seeking to maintain a relatively stable level of distributions to shareholders. This practice has no impact on the Fund's i nvestment strategy and may reduce the Fund's NAV. The Fund's manager believes the practice helps maintain the Fund's competitiveness and may benefit the Fund's market price and premium/discount to the Fund's NAV

ClearBridge MLP and Midstream Fund Inc. 2021 Annual Report

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