Clearbridge MLP and Midstream Fund : Annual Report

Annual Report November 30, 2022

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 partnerships ("MLPs") and energy midstream entities.

What's inside

Letter from the chairman	II
Fund overview	1
Fund at a glance	7
Fund performance	8
Schedule of investments	10
Statement of assets and
liabilities	12
Statement of operations	13
Statements of changes in net
assets	14
Statement of cash flows	15
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, 2022. 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 30, 2022

1. ClearBridge MLP and Midstream Fund Inc.

Fund overview

Q. What is the Fund's investment strategy?

A. 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 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, the Fund considers investments in MLPs to include investments that offer economic exposure to public 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, the Fund considers investments in midstream entities as direct or indirect investments in those entities that provide midstream services including the gathering, transporting, processing, fractionation, storing, refining, and distribution of oil, natural gas liquids, natural gas and refined petroleum products. 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, transporting, processing, 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 MLPs and midstream entities with stable, predictable cash flows, using a bottom-up process to find MLPs and midstream entities that we believe offer sustainable and predictable distributions, as well as relatively low direct commodity exposure. We also seek out companies with the potential to grow their businesses, 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.

ClearBridge Investments, LLC is the Fund's subadviser. The portfolio managers primarily responsible for overseeing the day-to-day management of the Fund are Michael Clarfeld, CFA, Chris Eades, and Peter Vanderlee, CFA.

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

A. Global economies began to face multiple headwinds, led by a combination of stubbornly high inflation, rising geopolitical uncertainty and lingering supply chain and policy impacts from the COVID-19 pandemic. In the U.S., the Federal Reserve Board began to tighten monetary conditions, with dampening effects on the economy increasingly visible toward the end of the reporting period. At the same time, Russia's invasion of Ukraine helped create a spiraling energy crisis in Europe as some of its natural gas supplies were cut off heading into the winter of 2023. Finally, China experienced slowing growth as the country continued to enact strict measures to reduce the spread of COVID-19. Consequently, equity markets began pricing in a reasonable chance of recession, both domestically and abroad.

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Fund overview (cont'd)

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

A. The MLP sector performed strongly during the reporting period, outperforming equities by a large margin as an opening global economy contended with structural undersupply of oil and gas, exacerbated by Russia's invasion of Ukraine and the ensuing drop in Russian energy supply. Crude oil prices rose to begin the period amid elevated demand before falling from in excess of $120 per barrel in June 2022 to $77 per barrel. Toward the end of the period, recession fears left oil market traders fearful of global demand downdrafts for crude oil in 2023 much like those witnessed during the Global Financial Crisis (GFC). A strengthening U.S. dollar and large-scale releases of crude oil from the U.S. Strategic Petroleum Reserve (SPR) also drove downside in crude oil prices later in the reporting period.

During the GFC, global oil demand declined by two million barrels per day (or 2%) and oil prices fell from $140 per barrel to less than $50 per barrel. We see several notable differences between the current environment and the GFC. First, due to Russia limiting natural gas supplies to Europe, there has been and will likely continue to be large-scale switching from natural gas to oil to generate electricity in Europe. This could add 0.8 million barrels per day of oil demand compared to prior to Russian's invasion of Ukraine. Second, the U.S. releases of crude oil from its SPR are coming to an end. These withdrawals added more than one million barrels per day of supply into the market over the last six months but soon will no longer do so. Further, the barrels of oil removed from the SPR will ultimately have to be replaced - potentially resulting in a meaningful demand uplift for crude oil heading into 2023 and 2024. Third, Russian crude oil production is expected to fall between

0.5 to 1.0 million barrels per day, largely due to lack of investment in its resource base as money is being diverted to fund its war machine.

The combination of these three factors leaves the crude oil market more insulated from a recession driving down global demand than in prior economic downturns. As such, most oil market watchers still expect global oil demand growth in 2023 by 1 to 2 million barrels per day (driven largely by emerging markets).

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

A. Despite recent pressure, crude oil prices in the U.S. remain well above levels that would lead us to expect a decline in drilling activity. Barring a fall in oil prices below $60 per barrel, we would expect the number of rigs drilling for oil to continue slowly moving higher. Even with the recent fall in oil prices, the number of rigs drilling for oil in the U.S. has increased from 574 rigs to a current 627 rigs. The pathway to U.S. oil production approaching pre-pandemic levels (and driving midstream company cash flows higher) is through increasing drilling activity. Recent increases in drilling activity give us confidence in a growing cash flow profile for midstream companies looking into 2023.

Valuation for U.S. midstream companies remains well below the levels seen before the pandemic. Entering 2020, enterprise value to EBITDA (EV/EBITDA) multiples stood at roughly 10.5x. Despite the rebound the sector has experienced since the March 2020 lows, the sector today trades at 8.8x - despite what we view as a vastly better business model today than entering 2020. Dividend/distribution coverage has moved from 1.1x to more than

2 ClearBridge MLP and Midstream Fund Inc. 2022 Annual Report

2.0x. The sector has moved from being free cash negative to free cash flow positive (increasingly so in 2023) and balance sheet leverage (debt/EBITDA) has moved from in excess of 5.0x to below 3.5x. With no need for midstream companies to access capital markets for the foreseeable future, we increasingly expect excess cash flow (above and beyond capital spending and dividends/distributions) to be used for increasing share buybacks and further increasing dividends/distributions.

With improving financial metrics and continued low valuations, we still see solid upside potential for the U.S. midstream sector despite strong performance in 2021 and 2022.

Performance review

For the twelve months ended November 30, 2022, ClearBridge MLP and Midstream

Fund Inc. returned 44.33% based on its net asset value ("NAV")i and 43.36% based on its New York Stock Exchange ("NYSE") market price per share. The Alerian MLP Indexii and the Lipper Energy MLP Closed-End Funds Category Averageiii returned 42.25% and 31.53%, 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 investment 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.

During the twelve-month period, the Fund made distributions to shareholders totaling $2.32 per share. The performance table shows the Fund's twelve-month total return based on its NAV and market price as of November 30, 2022. Past performance is no guarantee of future results.

Performance Snapshot as of November 30, 2022

		12-Month
Price Per Share	Total Return*
$42.47	(NAV)	44.33%†
$35.77	(Market Price)	43.36%‡

All figures represent past performance and are not a guarantee of future results.

• Total returns are based on changes in NAV or market price, respectively. Returns reflect the deduction of all Fund expenses, including management fees, operating expenses, and other Fund expenses. Returns do not reflect the deduction of brokerage commissions or taxes that investors may pay on distributions or the sale of shares.

† Total return assumes the reinvestment of all distributions at NAV.

• Total return assumes the reinvestment of all distributions in additional shares in accordance with the Fund's Dividend Reinvestment Plan.

Q. What were the leading contributors to performance?

A. On an absolute basis, the diversified energy infrastructure subsector was the leading contributor to performance during the reporting period, followed by the gathering/ processing subsector. Relative to the Alerian MLP Index, sector allocation contributed

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