CURRENT INCOME SHARES, INC.
SEMI-ANNUAL REPORT
JUNE 30, 1999
Investment Adviser:
HIGHMARK CAPITAL
MANAGEMENT, INC.
475 Sansome St.
Suite 1400
San Francisco, CA 94111
(www.highmarkcapmgmt.com)
<PAGE>
CURRENT INCOME SHARES, INC.
- --------------------------------------------------------------------------------
HIGHMARK CAPITAL MANAGEMENT, INC.
August 12, 1999
Dear Shareholders:
We are pleased to report your company's financial results for the six-month
period ending June 30, 1999. During the period, we paid total dividends of $0.40
per share, consisting of quarterly dividends per share of $0.20 in the first and
second quarters. The net asset value per share at June 30, 1999 was $12.65, down
from $13.48 at December 31, 1998. Including dividends, the total return for
Current Income Shares based on net asset value was -3.22% for the six-month
period. The total return based on market value was -9.59%.
During the first half of 1999, interest rates rose sharply, which
negatively impacted Current Income Shares' total return. For instance, the yield
on ten-year Treasury bonds rose from 4.65% at December 31, 1998 to 5.79% at June
30, 1999, while the 30-year bond rose from 5.09% to 5.97% during the same
period.
In periods of rising interest rates, bond prices and net asset values
generally fall. However, this type of environment does not adversely affect the
dividend. Indeed, as bonds with lower yields in the portfolio mature, they are
often replaced with higher-yielding bonds, reflecting the higher interest rate
environment.
In response to rising interest rates, the portfolio's duration (a measure
of sensitivity to interest rates) fell slightly from about 6.1 years at December
31, 1998 to 5.9 years at June 30, 1999. In a period of rising interest rates, a
shorter duration is beneficial because bond prices do not fall as much.
In many ways, the six-months ending June 30, 1999 have been a mirror image
of the second half of 1998. Last year, U.S. Treasury bonds were the best
performers, as yields on the 30-year bond fell as low as 4.7%. With the global
economic crisis in full view, corporate bonds performed poorly as investors
became nervous about credit risk. After the Federal Reserve Board acted
decisively last Fall, the global economy improved. Investors sold Treasury bonds
in early 1999, as the U.S. economy reported stronger than expected growth.
Corporate bonds did not fall in value as much as Treasury bonds, as investors
sought extra yield and became less nervous about credit risk.
As of June 30, 1999, 11% of the portfolio was invested in AAA-rated
securities, while 33% was invested in A-rated corporate bonds. About 47% was
invested in bonds rated BBB while 7% was invested in BB-rated bonds and the
balance, 2% was in cash. Because the period was characterized by the perception
of an accelerating economy, the lower-rated bonds typically performed the best.
We added a number of electric utilities in the BB to A credit range during the
six-month period, which offered significantly higher yield to the portfolio.
As the period drew to a close, the corporate bond supply increased sharply
as issuers
<PAGE>
attempted to take care of their financing needs earlier in the year as Y2K
approached. This caused corporate bonds to underperform, as a surplus of issues
caused prices to fall. At the same time, the Federal Reserve Board was becoming
concerned about inflation, shifting from a neutral to a tightening bias, and
ultimately increased short-term interest rates 25 basis points (0.25%) on June
30, 1999.
If the current economic expansion lasts until next February, it will be the
longest period of prosperity of the last 100 years. Although we are not
forecasting a recession, we believe that the U.S. economy is likely to slow
down. As a result, our strategy is to continue to emphasize higher quality bonds
that do not fluctuate as much with the fortunes of the economy. In addition, we
will continue to maintain a duration position that closely tracks our benchmark.
On the following pages, you will find the complete portfolio of investments
held by Current Income Shares on June 30, 1999, together with the financial
statements for the period.
Thank you for investing in Current Income Shares, Inc.
Sincerely,
/s/Signature omitted
Gregory Knopf, President
<PAGE>
CURRENT INCOME SHARES, INC. --
YEAR 2000 DISCLOSURE STATEMENT
This is a disclosure document within the meaning of the Information and
Readiness Disclosure Act of 1998. Current Income Shares, Inc. depends on the
smooth functioning of computer systems in almost every aspect of its business.
Like other investment companies, businesses and individuals around the world,
Current Income Shares could be adversely affected if the computer systems used
by its service providers do not properly process dates on and after January 1,
2000 and distinguish between the year 2000 and the year 1900.
Current Income Shares has made inquiry of its service providers to
determine whether they expect to have their computer systems adjusted for the
year 2000 transition, and is reviewing the year 2000 status of each critical
service provider in an attempt to ensure that there will be no material adverse
consequences to Current Income Shares. Nevertheless, Current Income Shares and
its shareholders may experience losses as a result of year 2000 computer
difficulties experienced by issuers of portfolio securities or custodians,
banks, broker-dealers or others with which Current Income Shares does business.
With regards to the portfolio securities held in Current Income Shares,
HighMark Capital Management, Inc., adviser to Current Income Shares, will be
reviewing selected publicly available sources for Y2K-readiness information
published by the issuers of assets which are held in material amounts in the
Fund. Such Y2K disclosure information will be one of many factors considered by
HighMark Capital Management in making investment decisions on behalf of the
Fund.
See the Union Bank of California, N.A. Y2K Readiness Disclosure, which
gives updated information about the Y2K readiness program in which the Adviser
participates, on the bank's Web site: www.uboc.com/year 2000.
<PAGE>
CURRENT INCOME SHARES, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
(Unaudited)
- ----------------------------------------------------
ASSETS
Investments in securities
at market value:
Bonds (Cost $45,295,023) ..... $45,632,854
Cash ........................... 5,630
Interest receivable and
other assets ................. 877,415
-----------
Total Assets ................. 46,515,899
-----------
LIABILITIES
Accrued expenses ............... 48,535
-----------
NET ASSETS ........................ $46,467,364
===========
Net assets are represented by:
Capital stock, $1 par, 25,000,000
shares authorized 3,673,334
shares issued and outstanding $ 3,673,334
Paid-in capital in excess of par
value 42,977,827
Accumulated net realized losses (553,716)
Unrealized appreciation on
investments ................. 337,831
Undistributed net investment
income ...................... 32,088
-----------
NET ASSETS ........................ $46,467,364
===========
NET ASSET VALUE PER SHARE
($46,467,364 / 3,673,334 shares
of common stock outstanding) . $12.65
======
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(Unaudited)
- ----------------------------
INVESTMENT INCOME
Interest ......................... $ 1,716,630
-----------
Total Investment Income ........ 1,716,630
EXPENSES
Investment management
and advisory fees .............. 119,213
Custodian fees .................. 2,463
Transfer agent fees ............. 27,597
Directors' fees and
shareholder expenses ........... 14,457
Printing ........................ 19,423
Legal and auditing fees ......... 21,694
Listing fees -- NYSE ............ 2,487
Taxes ........................... 4,445
Other expenses .................. 4,053
-----------
Total Expenses 215,832
-----------
Net Investment
Income $ 1,500,798
-----------
REALIZED AND
UNREALIZED GAINS AND LOSSES
ON INVESTMENTS IN SECURITIES
Realized loss from securities
transactions:
Proceeds from sales $ 9,142,473
Cost of securities
sold (9,390,540)
----------
Net realized loss on
investments sold (248,067)
Unrealized depreciation
of investments:
Beginning of period 3,161,979
End of period 337,831
----------
Net unrealized
depreciation during
the period (2,824,148)
-------------
Net realized and
unrealized loss on
investments (3,072,215)
-------------
Net decrease in net assets
resulting from operations ($1,571,417)
=============
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
CURRENT INCOME SHARES, INC.
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
<CAPTION>
FOR THE PERIODS ENDED
- --------------------------------------------------------------------------------------------------------
SIX MONTHS Twelve Months
06/30/99 12/31/98
---------- -------------
FROM INVESTMENT ACTIVITIES
<S> <C> <C>
Net investment income ............................................. $ 1,500,798 $ 3,050,100
Net realized gain (loss) on investments sold ...................... (248,067) 212,657
Net unrealized appreciation/(depreciation) of investments
during the period .............................................. (2,824,148) 67,598
----------- -----------
Net increase/(decrease) in net assets resulting from operations ... (1,571,417) 3,330,355
Dividends to shareholders from net investment income .............. (1,469,334) (3,048,868)
----------- -----------
Increase/(decrease) in net assets .............................. (3,040,751) 281,487
NET ASSETS
Beginning of period ............................................... 49,508,115 49,226,628
----------- -----------
End of period [including underdistributed net investment
income of $32,088 and $624 respectively] ....................... $46,467,364 $49,508,115
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
CURRENT INCOME SHARES, INC.
PORTFOLIO OF INVESTMENTS IN SECURITIES
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, 1999
- -------------------------------------------------------------------------------------------------------------------
Standard & Poor's Principal Market
Security Rating Amount Value
- -------------------------------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATION -- (2.5%)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Bond 6.375%, 08/15/27 ..................... AAA $1,140,000 $1,167,109
- -------------------------------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATION (COST $1,170,597) ........... 1,167,109
- -------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATION -- (7.6%)
- -------------------------------------------------------------------------------------------------------------------
GNMA Pool# 439463 8.000%, 12/15/26 ...................... AAA 3,443,790 3,537,393
- -------------------------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATION (COST $3,509,026) ............................. 3,537,393
- -------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS -- (87.1%)
- -------------------------------------------------------------------------------------------------------------------
ASSET BACKED (0.8% OF NET ASSETS)
Chase Manhattan 6.610%, 09/15/02 ........................ AAA 344,021 346,292
- -------------------------------------------------------------------------------------------------------------------
TOTAL ASSET BACKED ......................................... 346,292
- -------------------------------------------------------------------------------------------------------------------
AUTO RENT & LEASE (2.0% OF NET ASSETS)
Hertz Corp 7.000%, 01/15/28 ............................. A- 1,000,000 941,250
- -------------------------------------------------------------------------------------------------------------------
TOTAL AUTO RENT & LEASE .................................... 941,250
- -------------------------------------------------------------------------------------------------------------------
BANKS (10.7% OF NET ASSETS)
Bankers Trust 7.250%, 01/15/03 .......................... A+ 1,500,000 1,509,375
Fleet Financial 7.125%, 04/15/06 ........................ A- 1,500,000 1,507,500
Golden State Escrow 7.000%, 08/01/03 .................... BB+ 1,000,000 975,000
Wells Fargo Capital 7.960%, 12/15/26 .................... A- 1,000,000 1,001,250
- -------------------------------------------------------------------------------------------------------------------
TOTAL BANKS ................................................ 4,993,125
- -------------------------------------------------------------------------------------------------------------------
BROADCASTING, NEWSPAPERS & ADVERTISING (2.1% OF NET ASSETS)
News America Holdings 7.750%, 02/01/24 ................. BBB- 1,000,000 978,750
- -------------------------------------------------------------------------------------------------------------------
TOTAL BROADCASTING, NEWSPAPERS & ADVERTISING .............. 978,750
- -------------------------------------------------------------------------------------------------------------------
ELECTRICAL UTILITIES (17.1% OF NET ASSETS)
Chugach Electric 9.140%, 03/15/22 ...................... A 1,000,000 1,086,250
Cleveland Electric 7.670%, 07/01/04 .................... BB+ 1,000,000 1,018,750
Duke Energy 7.875%, 08/15/04 ........................... BBB- 1,000,000 1,052,500
Houston Industries 9.375%, 06/01/01 .................... BBB+ 2,000,000 2,105,000
Orange & Rockland 7.000%, 03/01/29 ..................... A+ 1,250,000 1,173,438
Utilicorp United 8.450%, 11/15/99 ...................... BBB 1,500,000 1,513,125
- -------------------------------------------------------------------------------------------------------------------
TOTAL ELECTRICAL UTILITIES ................................ 7,949,063
- -------------------------------------------------------------------------------------------------------------------
ENERGY (9.8% OF NET ASSETS)
Phillips Petroleum 7.125%, 03/15/28 .................... A- 1,000,000 921,250
Union Oil of California 9.125%, 02/15/06 ............... BBB+ 2,000,000 2,190,000
Union Pacific 7.000%, 10/15/06 ......................... BBB- 1,500,000 1,430,625
- -------------------------------------------------------------------------------------------------------------------
TOTAL ENERGY .............................................. 4,541,875
- -------------------------------------------------------------------------------------------------------------------
GAS (4.5% OF NET ASSETS)
Coastal 9.625%, 05/15/12 ............................... BBB 1,000,000 1,198,750
KN Energy 7.250%, 03/01/28 ............................. BBB- 1,000,000 893,750
- -------------------------------------------------------------------------------------------------------------------
TOTAL GAS ................................................. 2,092,500
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
CURRENT INCOME SHARES, INC.
PORTFOLIO OF INVESTMENTS IN SECURITIES (CONCLUDED)
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, 1999
- -------------------------------------------------------------------------------------------------------------------
Standard & Poor's Principal Market
Security Rating Amount Value
- -------------------------------------------------------------------------------------------------------------------
MANUFACTURING (8.3% OF NET ASSETS)
<S> <C> <C> <C>
Lockheed Martin 7.700%, 06/15/08 ...................... BBB+ $1,500,000 $ 1,541,250
Owens-Illinois 8.100%, 05/15/07 ....................... BB+ 1,250,000 1,243,750
Westvaco 10.125%, 06/01/19 ............................ A 1,000,000 1,052,500
- -------------------------------------------------------------------------------------------------------------------
TOTAL MANUFACTURING ...................................... 3,837,500
- -------------------------------------------------------------------------------------------------------------------
MORTGAGE BANKERS (1.9% OF NET ASSETS)
Prudential Home Mortgage 7.000%, 02/25/26 ............. A 965,192 905,475
- -------------------------------------------------------------------------------------------------------------------
TOTAL MORTGAGE BANKERS ................................... 905,475
- -------------------------------------------------------------------------------------------------------------------
RETAIL (5.4% OF NET ASSETS)
Safeway 7.450%, 09/15/27 .............................. BBB 1,000,000 1,005,000
Staples 7.125%, 08/15/07 .............................. BBB- 1,500,000 1,494,375
- -------------------------------------------------------------------------------------------------------------------
TOTAL RETAIL ............................................. 2,499,375
- -------------------------------------------------------------------------------------------------------------------
SECURITIES BROKER/DEALER (2.2% OF NET ASSETS)
Lehman Brothers 8.750%, 05/15/02 ...................... A 1,000,000 1,045,000
- -------------------------------------------------------------------------------------------------------------------
TOTAL SECURITIES BROKER/DEALER ........................... 1,045,000
- -------------------------------------------------------------------------------------------------------------------
SOVEREIGN & SUPRANATIONAL (5.5% OF NET ASSETS)
Province of Nova Scotia 8.750%, 04/01/22 .............. A- 1,100,000 1,295,250
Saskatchewan 9.375%, 12/15/20 ......................... A 1,000,000 1,253,750
- -------------------------------------------------------------------------------------------------------------------
TOTAL SOVEREIGN & SUPRANATIONAL .......................... 2,549,000
- -------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS (7.4% OF NET ASSETS)
Cable and Wireless 6.625%, 03/06/05 ................... A- 1,000,000 975,000
TCI Communications 7.125%, 02/15/28 ................... AA- 900,000 874,125
WorldCom 7.750%, 04/01/07 ............................. A- 1,500,000 1,573,125
- -------------------------------------------------------------------------------------------------------------------
TOTAL TELECOMMUNICATIONS ................................. 3,422,250
- -------------------------------------------------------------------------------------------------------------------
TRANSPORTATION (9.4% OF NET ASSETS)
AMR 10.000%, 04/15/21 ................................. BBB- 1,500,000 1,813,125
General Motors 8.950%, 07/02/09 ....................... A- 1,500,000 1,550,325
Norfolk Southern 7.050%, 05/01/37 ..................... BBB+ 1,000,000 1,011,250
- -------------------------------------------------------------------------------------------------------------------
TOTAL TRANSPORTATION ..................................... 4,374,700
- -------------------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $40,163,203) ................. 40,476,155
- -------------------------------------------------------------------------------------------------------------------
CASH EQUIVALENT -- (1.0%)
- -------------------------------------------------------------------------------------------------------------------
Federated Prime Money Market 4.909%, .................. NR 452,197 452,197
- -------------------------------------------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT (COST $452,197) .................... 452,197
- -------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (98.2% OF NET ASSETS)
(COST $45,295,023) ........................... 45,632,854
- -------------------------------------------------------------------------------------------------------------------
Other Assets and Liabilities, Net
(1.8% of Net Assets) ......................... 834,510
- -------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS (100.0% OF NET ASSETS) ......... 46,467,364
===================================================================================================================
</TABLE>
5
<PAGE>
CURRENT INCOME SHARES, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
JUNE 30, 1999
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Current Income Shares, Inc. (the "Company") is registered under the
Investment Company Act of 1940, as amended, as a diversified, closed-end
management investment company. The Company was incorporated on November 15,
1972, and commenced operations on March 27, 1973. The primary investment
objective of the Company is to seek a high level of current income for its
shareholders consistent with investment in a diversified portfolio in which
marketable debt securities considered by management to be of high quality will
predominate. To a lesser extent the Company may also invest in other debt
securities and in certain equities.
The following is a summary of significant accounting policies followed by the
Company in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
(a) Security valuation -- Portfolio securities listed or traded on a national
securities exchange are valued at the last reported sales price;
securities traded in the over-the-counter market and listed securities
for which no sales were reported on that date are valued at the most
recent bid price.
(b) Federal income taxes -- It is the Company's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income and net
capital gains to its shareholders. Accordingly, no Federal income tax
provision is required.
(c) Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of income and
expenses during the reporting period. Actual results could differ from
those estimates.
(d) Other -- Security transactions are accounted for on the trade date the
securities are purchased or sold. Purchased discounts and premiums on
securities held are accreted or amortized to interest income over the
life of each security using a method which approximates the effective
interest method. Interest income is recognized on the accrual basis of
accounting. Realized gains and losses are computed using the specific
cost of the securities sold.
2. Purchases and Sales of Securities
Purchases and sales of investment securities other than short-term securities
and U.S. Government obligations aggregated $4,287,466 and $2,986,584,
respectively. Purchases and sales of U.S. Government obligations aggregated $0
and $1,603,288, respectively.
As of June 30, 1999, unrealized appreciation for Federal income tax purposes
aggregated $337,831 of which $1,246,142 related to appreciated securities and
$908,311 related to depreciated securities. The aggregate cost for Federal
income tax purposes was not materially different from amounts reported for
financial reporting purposes.
The Company had capital loss carryforwards at December 31, 1998, that can be
used to offset future capital gains.
CAPITAL LOSS CAPITAL LOSS
CARRYOVERS CARRYOVERS
EXPIRING 2004 EXPIRING 2005
-------------- --------------
$208,907 $96,836
6
<PAGE>
CURRENT INCOME SHARES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
JUNE 30, 1999
3. Transactions with Affiliates
HighMark Capital Management, Inc., (the "Adviser") a subsidiary of
UnionBanCal Corp., provides investment management and advisory services to the
Company. For the period ending June 30, 1999, investment management/advisory
fees totaling $119,213 were paid to the Adviser. The fee is based on an annual
rate of 0.5% of the Company's average net assets.
Union Bank of California, N.A. acts as custodian ("the Custodian") for the
Company. Fees of the Custodian are
being paid on the basis of net assets of the Company.
4. Agreements with Service Providers
Harris Trust Company of California provides Transfer Agent and Dividend
Reinvestment Plan services.
5. Financial Highlights
Selected data for each share of capital stock outstanding throughout each
period follows:
<TABLE>
<CAPTION>
01/01/99 to
06/30/99 01/01/98 to 01/01/97 to 01/01/96 to 01/01/95 to 01/01/94 to
(UNAUDITED) 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
---------- ------------ ----------- ---------- ----------- -----------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Investment Income $ 0.47 $ 0.95 $ (0.97) $ 0.95 $ 1.00 $ 1.06
Expenses (0.06) (0.12) (0.12) (0.12) (0.12) (0.12)
------- -------- ------- -------- -------- --------
Net Investment Income 0.41 0.83 0.85 0.83 0.88 0.94
Dividends distributed from net
Investment Income (0.40) (0.83) (0.85) (0.88) (1.48) (0.94)
Net realized and unrealized gain
(loss) on investments (0.84) 0.08 0.35 (0.54) 1.79 (1.74)
------- -------- ------- -------- -------- --------
Net increase (decrease) in
net asset value (0.83) 0.08 0.35 (0.59) 1.19 (1.74)
Net asset value:
Beginning of period 13.48 13.40 13.05 13.64 12.45 14.19
------- -------- ------- -------- -------- --------
End of period $ 12.65 $ 13.48 $ 13.40 $ 13.05 $ 13.64 $ 12.45
======= ======== ======= ======== ======== ========
Per share market value:
End of period $10.750 $ 12.313 $ 12.188 $ 11.375 $ 11.875 $ 11.000
Total investment return*+ (3.22)% 8.05% 15.33% 3.54% 22.25% (8.33)%
RATIOS AND SUPPLEMENTAL DATA
Ratio of expenses to average
net assets 0.91% 0.91% 0.95% 1.00% 0.90% 0.90%
Ratio of net investment income to
average net assets 6.3% 6.2% 6.5% 6.3% 6.6% 7.2%
Portfolio turnover rate 9.30% 13.23% 52.10% 62.86% 118.52% 42.21%
Net assets, end of period (000) $46,467 $ 49,508 $ 49,227 $ 47,943 $ 50,120 $ 45,739
<FN>
*Does not reflect the brokerage commission.
+Total return based on market value.
</FN>
</TABLE>
7
<PAGE>
CURRENT INCOME SHARES, INC.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
(Unaudited)
JUNE 30, 1999
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
6. Unaudited Quarterly Results of Operations
The following is a summary of unaudited quarterly results of operations:
Net Realized and
Distributed Net Unrealized Gain (Loss)
Investment Income on Investments
Investment ---------------------------------------------
Income Amount Per Share Amount Per Share
--------- --------- -------- --------- ---------
Three months ended:
<S> <C> <C> <C> <C> <C>
September 30, 1998 ................... $885,570 $771,400 $0.21 $ 1,204,096 $ 0.33
December 31, 1998 .................... 883,192 808,134 0.22 (1,273,797) (0.35)
March 31, 1999 ....................... 751,233 734,667 0.20 (1,574,150) (0.43)
June 30, 1999 ........................ 749,565 734,667 0.20 (1,498,065) (0.41)
September 30, 1997 ................... $908,688 $789,768 $0.21 $ 880,366 $ 0.24
December 31, 1997 .................... 891,447 844,867 0.23 678,751 0.18
March 31, 1998 ....................... 862,370 734,667 0.20 (50,337) (0.01)
June 30, 1998 ........................ 871,040 734,667 0.20 400,293 0.11
</TABLE>
7. Dividend Reinvestment Plan
The Company maintains a Dividend Reinvestment Plan (the "Plan") in which
shareholders may participate. The Plan is offered through Harris Trust Company
of California (the "Agent"). Under the Plan, the Agent uses dividends and other
cash distributions from the Company to purchase additional shares of Company
common stock in the open market for Plan participants. Participants may also
make certain cash contributions to the Plan. Further information regarding the
Plan may be obtained by writing to the Agent at: Harris Trust Company of
California, 311 West Monroe Street (11th Floor), Chicago, IL 60606, or calling
(877) 588-4147.
8
<PAGE>
CURRENT INCOME SHARES, INC.
NOTES
<PAGE>
DIRECTORS
Willard H. Altman*
Clark R. Gates
Michael L. Noel*
Robert M. Whitler*
*Serve as members of the Audit Committee
OFFICERS
Michael L. Noel Chairman
Gregory Knopf President
Jack Montgomery Vice President and
Portfolio Manager
Richard H. Earnest Vice President
Kevin A. Rogers Vice President
John V. Skidmore Vice President
John J. King Secretary
Milton M. Fukuda Treasurer
AUDITORS
Deloitte & Touche LLP
50 Fremont St.
San Francisco, CA 94105
CUSTODIAN
Union Bank of California
475 Sansome St., 15th Floor
San Francisco, CA 94111
TRANSFER & DIVIDEND
REINVESTMENT PLAN AGENT
Harris Trust Company of California
311 West Monroe St., 11th Floor
Chicago, IL 60606
COMPANY MAILING ADDRESS
Current Income Shares, Inc.
445 South Figueroa St., Suite 306
Los Angeles, CA 90071
COMPANY TELEPHONE
(888) 465-2825
NYSE SYMBOL
"CUR"
83353-99
