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Previous: ILLINOIS CENTRAL RAILROAD CO, 10-Q, 1995-05-09 |
Next: IDS CERTIFICATE CO /MN/, 497, 1995-05-09 |
The Tax-Exempt Bond Fund of America
Semi-annual report for the six months ended February 28, 1995
[The American Funds Group(R)]
FUND OBJECTIVE
The Tax-Exempt Bond Fund of America(R) seeks a high level of federally tax-free
income, consistent with preservation of capital, through a diversified
portfolio of municipal bonds.
The fund invests primarily in state, city and public authority bonds that are
issued to provide funding for projects such as airport modernization, pollution
control, hospital expansion, electric power and highway improvements.
With the elimination of most tax deductions and shelters in recent years,
investing in municipal securities provides one of the few remaining ways to
earn tax-free income. The fund gives investors the opportunity to do so through
a well-diversified portfolio managed by professionals.
Investment highlights
through 2/28/95
6-month total return +2.7%
(income plus capital changes,
with dividends reinvested)
12-month total return +1.4%
(income plus capital changes,
with dividends reinvested)
Tax-free distribution
rate for February
(annualized) +5.6%
(income return only, reflecting
maximum sales charge)
Taxable equivalent distribution
rate (annualized) +9.3%
(for February, assuming a
39.6% federal tax rate)
SEC 30-day yield as
of February 28 +5.4%
(reflecting maximum sales charge)
For current yield information,
please call toll-free: 800/421-0180.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are the total returns and average annual compound
returns for periods ended March 31, 1995 (the most recent calendar quarter) on
an investment at the 4.75% maximum sales charge with all distributions
reinvested:
<TABLE>
<CAPTION>
Total Average Annual
<S> <C> <C>
Return Compound Return
Ten Years +130.64% +8.72%
Five Years + 40.15 +6.98
One Year + 1.90 -
</TABLE>
Sales charges are lower for accounts of $25,000 or more. The fund's 30-day
yield as of March 31, 1995, calculated in accordance with the Securities and
Exchange Commission formula, was 5.22%. The fund's distribution rate as of that
date was 5.61%. The SEC yield reflects income earned by the fund, while the
distribution rate reflects dividends actually paid by the fund. Fund results
through August 1988 do not reflect service and distribution expenses now paid
under its Plan of Distribution. Such expenses may not exceed 0.25% of the
fund's average net assets per year and currently amount to approximately 0.22%.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY HAVE A GAIN OR LOSS OF PRINCIPAL WHEN YOU SELL YOUR SHARES.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY,
THE U.S. GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON. All investments are subject
to certain risks. For example, those which include bonds are affected by
interest rate fluctuations. Accordingly, investors should maintain a long-term
perspective.
FELLOW SHAREHOLDERS:
During the six months ended February 28 - the first half of fiscal 1995 - The
Tax-Exempt Bond Fund of America paid dividends of 34 cents a share. If, like
most of the fund's shareholders, you reinvested those dividends, your income
return was 3.0%, or 6.0% on an annualized basis. This was equivalent to an
annualized taxable income return of 9.8% for shareholders in the top 39.6%
marginal tax bracket. If you took your dividends in cash, your six-month income
return was 2.9% and the value of your holdings declined 0.3%.
The fiscal half-year was marked by a V-shaped swing in the municipal market.
The Federal Reserve's efforts to raise short-term interest rates and contain
inflation placed considerable downward pressure on bond prices through
mid-November. At that point the tenor of the municipal market began to improve,
although the bankruptcy filing by Orange County, California, sidetracked the
rally for a while in December.
Your fund does not own any bonds issued by Orange County. It is not leveraged
and has no exposure to the type of volatile derivatives that caused the
county's woes. The fund does hold some securities issued by two Orange County
agencies, however, and those holdings fell in price following the bankruptcy
filing. They make up less than 1% of the fund's assets and have regained most
of the ground they lost in the weeks following the bankruptcy filing. The
financial health of the two agencies has not changed. Our overall exposure to
the events in Orange County and their ripple effects has thus been minimal.
In the months when the market was sliding, The Tax-Exempt Bond Fund of America
held its ground better than most comparable funds. During the upswing, the
opposite was true. This is a common pattern given your fund's conservative
orientation; it has tended to do better in "down" markets and less well in "up"
markets. For the entire six months, The Tax-Exempt Bond Fund of America
recorded a total return of 2.7% compared with an average return of 2.5% for
comparable funds tracked by Lipper Analytical Services. The unmanaged Lehman
Brothers Municipal Bond Index posted a six-month return of 2.8%.
Looking back over the past 12 months - generally a tough time for
[Pull Quote]
"While the fixed-income markets are still experiencing a fair amount of
turbulence, in our view the worst is probably behind us."
[End Pull Quote]
fixed-income investors - the fund demonstrated good defensive characteristics
relative to its peers. It posted a total return of 1.4% versus 0.6% for the
Lipper average. During this period, the Lehman Brothers Municipal Bond Index
recorded a 1.9% total return.
Throughout calendar 1994, your fund pursued a very cautious investment
approach, gradually building more and more downside protection into the
portfolio by shortening maturities. (Generally, the shorter a bond's maturity,
the less it will fluctuate in price as interest rates rise and fall.)
Starting last October, we began lengthening maturities slightly. While the
fixed-income markets are still experiencing a fair amount of turbulence, in our
view the worst is probably behind us. The Federal Reserve's efforts to contain
inflation show signs of producing the desired effect: a slower pace of economic
growth. The Fed has now raised short-term interest rates seven times in the
past 14 months, and longer term rates have gone up as well.
The issuance of new municipal bonds fell considerably last year. There has been
no corresponding drop in investors' appetite for tax-exempt bonds, which has
been an important factor in the recent strength shown by the municipal market.
Since its introduction in 1979, The Tax-Exempt Bond Fund of America has become
a valuable part of the financial programs of many middle- and upper-income
investors. During this time, assets have grown to more than $1.3 billion and
the share value has increased 260.7% on a total return basis, or an average
compound rate of 8.7% a year. That is nearly twice the 4.7% average annual
increase in the Consumer Price Index for the same period.
[Pull Quote]
"With a number of municipalities and states experiencing financial problems, we
are maintaining a strong commitment to credit quality and geographic
diversification."
[End Pull Quote]
If you were to chart the day-to-day progress of an investment in the fund
through the years, you would find that its advance has not followed a straight
line. Its share value has gone down as well as up, reflecting changes in the
prices of the bonds in the fund's portfolio. Such fluctuations are a fact of
life in fixed-income investing, and the swing that has taken place these past
several months affords a good illustration of that.
With a number of municipalities and states experiencing financial problems, we
are maintaining a strong commitment to credit quality and geographic
diversification. A substantial portion of the fund's portfolio remains invested
in securities rated AAA or AA, the two highest ratings available. The portfolio
is highly diversified, with more than two dozen cities and states represented.
Our investments emphasize bonds sold to finance essential services such as
water, power and sewage treatment. Such bonds are backed by steady, dependable
sources of income and tend to be less affected by budgetary and political
pressures.
The flexibility to seek out attractive investments in the municipal market
through intensive research all over the country provides an opportunity to
spread risks and enhance returns over time. We will continue to make every
effort to search for sound, attractive values that can provide you with a
rewarding investment experience.
Cordially,
Paul G. Haaga, Jr.
Chairman of the Board
Abner D. Goldstine
President
April 13, 1995
WHY TAX-FREE INVESTING IS WORTHWHILE
The table below is based on the current federal tax rates. To use this table,
find your estimated taxable income to determine your federal tax rate. Then
look at the right-hand column to see what you would have had to earn to equal
the fund's 5.62% tax-free distribution rate in February.
Because of federal tax increases, many high-income investors are finding that
their returns on taxable fixed-income investments have to be even higher to
match those currently offered by tax-exempt municipals. For instance, a couple
with a taxable income of $150,000 faces a federal tax rate of 36%. In this
bracket, the fund's current 5.62% distribution rate would be equivalent to an
income return on a taxable issue of 8.78%. Investors in the highest bracket
(39.6%) would need a taxable income return of 9.30% to match the fund's
tax-free rate.
FEDERAL INCOME TAX RATES
<TABLE>
<CAPTION>
Your Taxable Income Current The fund's 5.62%
Federal tax-exempt distribution
Tax rate in February+ is
Rate* equivalent to a taxable
income return of:
<S> <C> <C> <C>
Single Joint
$0-23,350 $0-39,000 15.0% 6.61%
23,351-56,550 39,001-94,250 28.0 7.81
56,551-117,950 94,251-143,600 31.0 8.14
117,951-256,500 143,601-256,500 36.0 8.78
Over 256,500 Over 256,500 39.6 9.30
</TABLE>
*The federal rates are marginal rates. They do not include an adjustment for
the loss of personal exemptions and the phase-out of itemized deductions that
are applicable to certain taxable income levels.
+The fund's distribution rate is based on offering price and therefore reflects
the effects of the maximum sales charge on the initial investment; it is not a
projection of future results. Such results will reflect interest rate levels,
changes in the value of portfolio securities, the effects of portfolio
transactions, fund expenses and applicable sales charges.
THE TAX-EXEMPT BOND FUND OF AMERICA
Investment Portfolio, February 28, 1995
New York - 12.18%
California - 11.93%
Illinois - 8.73%
Washington - 7.92%
Pennsylvania - 6.26%
Texas - 5.09%
Other States - 42.31%
Cash & Short-Term Securities - 5.58%
Aaa/AAA - 26%
Aa/AA - 19%
A/A - 20%
BBB/Baa - 27%
Below investment grade - 8%
<TABLE>
<CAPTION>
Principal Market
Amount Value
(000) (000)
<S> <C> <C>
TAX-EXEMPT SECURITIES MATURING IN MORE THAN
ONE YEAR - 94.42%
ALABAMA - .18%
The Industrial Development Board of the Town of
Courtland (Alabama), Solid Waste Disposal
Refunding Revenue Bonds (Champion International
Corporation Project) Series 1994A, 5.90% 2017 $2,700 $ 2,453
ALASKA - .81%
Alaska Housing Finance Corporation:
Insured Mortgage Program Refunding Bonds, 1990
First Series, 7.80% 2030 5,900 6,207
Collateralized Bonds (Veterans Mortgage
Program), Series 1992A-1, 6.75% 2032 4,800 4,855
ARIZONA - .36%
Arizona Board of Regents, University of Arizona
System Revenue Bonds, Series 1990B, 6.90% 2006
(Prerefunded 2000) 1,595 1,753
State Transportation Board, Subordinated Highway
Revenue Bonds, Series 1992B, 6.50% 2008
(Prerefunded 2002) 1,850 2,005
Salt River Project Agricultural Improvement and
Power District, Electric System Revenue Bonds,
Refunding Series A, 7.875% 2028 (Prerefunded 1998) 1,000 1,097
CALIFORNIA - 11.93%
General Obligation Bonds, 6.75% 2002 5,000 5,397
Various Purpose General Obligation Bonds,
6.75% 2006 1,000 1,090
California Health Facilities Financing Authority:
Downey Community Hospital, Series 1993, 5.75% 2015 4,990 4,458
Kaiser Permanente Medical Care Program, Semiannual
Tender Revenue Bonds, 1985 Tender Bonds, 5.55% 2025 5,000 4,448
Public Works Board, Lease Revenue Bonds:
(California Community Colleges) 1994 Series B,
(Various Community College Projects):
6.75% 2005 2,505 2,653
7.00% 2007 1,315 1,403
Department of Corrections:
(Various State Prisons), 1993 Series A,
AMBAC Insured, 5.25% 2005 3,800 3,744
(California State Prison-Lassen County,
Susanville), 1993 Series D, 5.20% 2007 3,760 3,480
Statewide Communities Development Authority,
Children's Hospital of Los Angeles, MBIA Insured,
6.00% 2008 3,415 3,541
St. Joseph Health System Obligated Group,
Certificates of Participation:
6.50% 2004 2,540 2,689
5.50% 2014 4,000 3,614
5.50% 2023 2,700 2,362
Castaic Lake Water Agency Financing Corporation,
Refunding Revenue Certificates of Participation
(Water System Improvement Projects), Series 1994A,
MBIA Insured:
7.25% 2010 1,245 1,437
7.00% 2011 2,400 2,708
City of Los Angeles:
State Building Authority Lease Revenue Bonds,
Series 1988 A, 7.20% 2004 3,250 3,419
State Building Authority Lease Revenue Refunding
Bonds, (State of California Department of General
Services Lease), 1993 Series A:
5.375% 2006 5,800 5,548
5.50% 2007 5,545 5,162
Convention and Exhibition Center Authority,
Certificates of Participation:
7.375% 2018 (Prerefunded 1999) 1,000 1,109
7.00% 2020 (Prerefunded 1999) 2,750 3,010
Regional Airports Improvement Corporation,
Facilities Lease Refunding Revenue Bonds,
Issue of 1992, United Air Lines, Inc. (Los
Angeles International Airport), 6.875% 2012 8,500 8,341
Department of Water and Power:
Electric Revenue Bonds:
7.375% 2029(Crossover Refunded 1999) 1,750 1,909
7.10% 2031 3,000 3,302
County of Los Angeles, Certificates of
Participation (Marina Del Rey), Series A:
6.25% 2003 2,000 2,020
6.50% 2008 4,750 4,704
County of Los Angeles, Pension Obligation
Certificates, Series A, 6.875% 2006 13,425 14,028
Northern California Power Agency:
Geothermal Project #3, Special Revenue Bonds,
1993 Refunding Series A, 5.60% 2006 3,000 2,848
County of Orange (Aliso Viejo), Special Tax Bonds
of Community Facilities District No. 88-1,
Series A of 1992:
6.70% 2002 1,740 1,899
7.15% 2006 (Prerefunded 2002) 2,000 2,276
7.35% 2018 (Prerefunded 2002) 10,000 11,502
South Orange County, Public Financing Authority
Special Tax Revenue Bonds, 1994 Series B (Junior
Lien Bonds):
6.65% 2003 1,000 965
6.75% 2004 2,385 2,296
Pleasanton Joint Powers Financing Authority
Reassessment Revenue Bonds, 1993 Series A:
5.40% 1999 4,095 4,065
5.70% 2001 1,750 1,737
Riverside County Transportation Commission, Sales
Tax Revenue Bonds (Limited Tax Bonds), 1991
Series A, 6.50% 2009 3,600 3,697
Sacramento City Financing Authority, 1991 Revenue
Bonds, 6.80% 2020 (Prerefunded 2001) 5,000 5,556
San Francisco Bay Area Rapid Transit District:
Sales Tax Revenue Refunding Bonds, Series 1990,
AMBAC Insured, 6.75% 2009 3,250 3,456
Redevelopment Agency of the City and County of
San Francisco Refunding Lease Revenue Bonds,
Series 1991 (George R. Moscone Convention
Center), 5.50% 2018 6,000 5,316
County of San Joaquin, Certificates of
Participation (1993 General Hospital Project),
6.25% 2013 1,480 1,398
San Joaquin Hills Transportation Corridor Agency
(Orange County), Senior Lien Toll Road Revenue
Bonds:
0% 2000 4,525 3,273
6.75% 2032 5,000 4,841
The Regents of the University of California
(Various University of California Projects),1993:
Series A:
5.40% 2008 4,000 3,662
5.50% 2021 3,500 3,085
Series B, 5.375% 2009 2,000 1,806
The Regents of the University of California Revenue
Bonds, Series A, MBIA Insured, 6.90% 2015
(Prerefunded 1997) 2,750 2,941
COLORADO - 1.63%
Colorado Housing And Finance Authority:
Multi-Family Housing Insured Mortgage Revenue Bonds, 1982
Series A, 9% 2025 1,960 1,989
General Obligation Bonds, 1994 Series A, 6.80% 2014 1,750 1,789
City and County of Denver, Airport System Revenue
Bonds, Series 1992A, 7.25% 2025 19,800 20,226
Regional Transportation District, Sales
Tax Revenue Refunding Bonds, Series 1993, FGIC
Insured, 5.25% 2005 2,000 1,980
DISTRICT OF COLUMBIA - 3.33%
District of Columbia (Washington, D.C.), General
Obligation Bonds:
Series 1990 A, AMBAC Insured, 7.25% 2005
(Prerefunded 2000) 2,500 2,780
Series 1993 C, 5.25% 2000 4,000 3,709
Series 1993 A, 5.75% 2003 3,000 2,768
Series 1993 A, AMBAC Insured, 5.875% 2005 7,000 6,949
Series A-1, MBIA Insured, 4.95% 2005 1,250 1,131
Series 1993 C, 5.75% 2005 2,500 2,231
Series B-2, FSA Insured, 5.50% 2007 8,725 8,342
Series B-1, AMBAC Insured, 5.50% 2009 8,500 8,010
Hospital Revenue Refunding Bonds:
(Medlantic Healthcare Group, Inc. Issue):
Series 1992 B, 6.50% 2002 3,535 3,565
Series 1992 A, 7.00% 2005 2,000 2,049
Series 1993 A, MBIA Insured, 5.25% 2012 2,000 1,805
(Washington Hospital Center Issue):
Series 1992 A, 7.125% 2019 2,000 1,938
FLORIDA - .92%
Broward County, Resource Recovery Revenue Bonds,
Series 1984 North Project, 7.95% 2008 4,830 5,286
Jacksonville Electric Authority, St. John's River
Power Park System Revenue Bonds, Issue One,
Series Five, 9.50% 2020 (Prerefunded 1995) 750 788
Mid-Bay Bridge Authority Revenue Refunding Bonds:
Series 1993A 8.50% 2022 4,000 4,536
Series 1993D 6.125% 2022 2,150 1,933
GEORGIA - 1.34%
City of Atlanta, Airport Facilities Revenue
Refunding Bonds, Series 1994A, AMBAC Insured:
6.50% 2008 1,500 1,617
6.50% 2009 1,000 1,075
City of Atlanta, Special Purpose Facilities
Revenue Refunding Bonds (Delta Air Lines, Inc.
Project), Series 1989 A, 7.50% 2019 4,500 4,604
Fulco Hospital Authority Revenue Anticipation
Cerificates (St Joseph's Hospital of Atlanta,
Inc.), Series 1994. 4.80% 2001 2,305 2,144
Fulco Hospital Authority Revenue Anticipation
Certificates (Georgia Baptist Health Care System
Project) Series 1992:
A 6.375% 2022 1,595 1,386
B 6.375% 2022 910 791
Development Authority of Fulton County, Special
Facilities Revenue Bonds (Delta Air Lines, Inc.
Project), Series 1992, 6.95% 2012 3,000 2,981
Municipal Electric Authority of Georgia:
Power Revenue Bonds, 1986 Series A, 7.875% 2018
(Prerefunded 1996) 3,500 3,672
HAWAII - .07%
State General Obligation Refunding Bonds of 1993,
Series CC, 5.125% 2009 1,000 944
ILLINOIS - 8.73%
State of Illinois, Civic Center Bonds (Special State
Obligation Bonds) Series 1991, AMBAC Insured, 6.25%
2020 2,000 2,062
Build Illinois Bonds (Sales Tax Revenue Bonds):
Series A, 9.375% 2015 (Prerefunded 1995) 750 780
Series O, 6.00% 2002 1,000 1,031
Health Facilities Authority:
Revenue Bonds Series 1992 A (Alexian Brothers
Medical Center Inc. Project), 6.80% 2022 5,000 4,945
Revenue Refunding Bonds (The Carle Foundation),
FGIC Insured, Series 1989 A, 6.00% 2015 5,250 5,184
Revenue Bonds Series 1992 (Edward Hospital
Association Project), 7.00% 2022 1,000 1,017
Revenue and Revenue Refunding Bonds
(Evangelical Hospitals Corporation):
Series A, 6.25% 2022 5,250 5,000
Series C, 6.25% 2022 4,000 3,809
Revenue Bonds, Series 1994 A (Northwestern Memorial
Hospital), 6.00% 2024 10,000 9,447
Revenue Bonds Series 1993
(OSF Healthcare System):
5.75% 2007 5,760 5,475
6.00% 2013 2,500 2,327
6.00% 2023 5,000 4,526
Regional Transportation Authority, Cook, DuPage,
Kane, Lake, McHenry and Will Counties, Illinois
General Obligation Bonds:
Series 1994D, 7.75% 2019 4,500 5,499
Series 1990A 7.20% 2020 1,000 1,156
City of Chicago:
Chicago-O'Hare International Airport:
Special Facilities Revenue Bonds for United
Airlines:
1984 Series C, 8.20% 2018 1,250 1,329
1988 Series B, 8.85% 2018 1,975 2,179
Special Facilities Revenue Refunding Bonds
(Delta Airlines, Inc. Terminal), 6.45% 2018 10,435 9,713
Special Facilities Revenue Refunding Bonds,
Series 1994 (American Airlines, Inc. Project),
8.20% 2024 2,750 3,016
Skyway Toll Bridge Refunding Revenue Bonds,
Series 1994:
6.50% 2010 7,500 7,352
6.75% 2014 6,500 6,479
Water Revenue Bonds, Refunding
Series 1993, FGIC Insured, 6.50% 2011 4,345 4,619
Wastewater Transmission Revenue Bonds, Refunding
Series 1993, FGIC Insured, 6.50% 2008 5,000 5,346
Public Building Commission of Chicago, Building
Revenue Bonds (Board of Education of the City
of Chicago), MBIA Insured,
Series A of 1993, 5.75% 2018 3,000 2,860
Metropolitan Fair and Exposition Authority,
Dedicated State Tax Revenue Bonds,
1984 Series, 10.375% 2014 (Prerefunded 1995) 5,000 5,227
Metropolitan Pier and Exposition Authority,
McCormick Place Expansion Project Bonds,
Current Interest Bonds, Series 1992 A,
6.50% 2027 8,000 8,041
Metropolitan Water Reclamation District of Greater
Chicago, Series B:
Capital Improvement Bonds, 5.25% 2004 5,000 4,899
Refunding Bonds, 5.30% 2005 5,325 5,201
INDIANA - 2.73%
Housing Finance Authority, Single Family Mortgage
Refunding Revenue Bonds, 1992 Series A, 6.75% 2010 1,660 1,709
Transportation Finance Authority, Airport
Facilities Lease Revenue Bonds, Series A:
6.50% 2007 7,000 7,274
6.75% 2011 2,400 2,481
City of East Chicago, Pollution Control Refunding
Revenue Bonds:
(Inland Steel Company Project No. 10), Series 1993
6.80% 2013 7,000 6,769
(Inland Steel Company Project No. 11), Series 1994
7.125% 2007 3,000 3,070
Hospital Authority of the City of Fort Wayne,
Revenue Bonds (Parkview Memorial Hospital, Inc.
Project), Series 1992:
6.375% 2013 6,000 5,996
6.40% 2022 8,000 7,826
Indianapolis Local Public Improvement Bond Bank,
Series 1992 D Bonds, 6.60% 2007 1,960 2,015
KENTUCKY - .19%
The Turnpike Authority of Kentucky, Resource
Recovery Road Revenue Refunding Bonds, 1981
Series A:
13.125% 2009 (Prerefunded 1996) 5 6
13.125% 2009 (Prerefunded 1997) 390 461
Kenton County Airport Board, Special Facilities
Revenue Bonds (Delta Air Lines, Inc. Project):
7.80% 2015 1,000 1,039
1992 Series B, 7.25% 2022 1,000 1,012
LOUISIANA - 3.94%
Industrial Development Board of the Parish of
Calcasieu, Inc. (Louisiana) Pollution Control
Revenue Refunding Bonds (Gulf States Utilities
Company Project) Series 1992, 6.75% 2012 3,000 2,966
Lake Charles Harbor and Terminal District, Port
Facilities Revenue Refunding Bonds (Trunkline
LNG Company Project), Series 1992, 7.75% 2022 32,500 34,758
Orleans Levee District, Levee Improvement Fixed Rate
Refunding Bonds, Series 1987 A, 8.25% 2014 10,420 10,498
Parish of St. Charles, Adjustable/Fixed Rate
Pollution Control Revenue Bonds (Louisiana
Power & Light Company Project),
Series 1984, 8.25% 2014 1,500 1,624
Parish of West Feliciana, Pollution Control Revenue
Bonds (Gulf States Utilities Company Project),
Series 1985-C, 7.00% 2015 3,750 3,769
MAINE - 1.54%
Town of Bucksport,Maine Solid Waste Disposal
Revenue Bonds (Champion International Corporation
Project), Series 1985, 6.25% 2010 17,350 16,755
Maine State Housing Authority, Mortgage Purchase
Bonds,1994 Series C-1, 5.90% 2015 4,135 4,239
MARYLAND - 1.16%
State General Obligation Bonds, State
and Local Facilities Loan of 1993, Second Series
(Capital Improvement and Refunding Bonds),
5.00% 2004 1,700 1,678
Community Development Administration, Department
of Housing and Community Development, Single
Family Program Bonds, 1990 First Series,
7.60% 2017 5,920 6,317
Health and Higher Educational Facilities Authority:
Revenue Bonds, Howard County General Hospital
Issue, Series 1993:
5.50% 2013 2,300 1,959
5.50% 2021 1,225 979
Project and Refunding Revenue Bonds, Peninsula
Regional Medical Center Issue, Series 1993,
5.25% 2012 1,000 879
Calvert County, Maryland Economic Development
Revenue Bonds (Asbury-Solomons Island Facility),
Series 1995, 8.625% 2024 3,000 3,054
Prince George's County, Hospital Revenue Bonds
(Dimensions Health Corporation Issue), Series
1992, 7.25% 2017 (Prerefunded 2002) 750 853
MASSACHUSETTS - 4.07%
General Obligation Bonds Consolidated Loan of
1989, Series D, MBIA Insured, 7.00% 2009
(Prerefunded 1999) 1,000 1,097
Health and Educational Facilities Authority,
Revenue Bonds:
Brigham and Women's Hospital Issue, Series D,
6.75% 2024 13,000 13,189
New England Deaconess Hospital Issue, Series
C, 7.20% 2022 3,500 3,581
Massachusetts Bay Transportation Authority, General
Transportation System Bonds, 1994 Series A
Refunding Bonds 7.00% 2007 10,110 11,260
City of Boston, Massachusetts Revenue Refunding
Bonds, Boston City Hospital (FHA Insured Mortgate):
7.625% 2021 980 1,111
5.75% 2023 8,000 7,405
Massachusetts Water Resources Authority:
General Revenue Bonds, 1990 Series A, 7.50% 2009
(Prerefunded 2000) 9,500 10,667
General Revenue Refunding Bonds, 1992 Series A,
5.50% 2022 5,000 4,587
General Revenue Refunding Bonds, 1993 Series B,
5.25% 2009 2,500 2,365
MICHIGAN - 3.60%
The Economic Development Corporation of Dickinson
County (Michigan):
Series 1969, Solid Waste Disposal Refunding
Revenue Bonds, Champion International Project,
6.55% 2007 5,000 5,038
Series 1993, Pollution Control Refunding Revenue
Bonds, Champion International Corporation Projects,
5.85% 2018 3,000 2,709
Job Development Authority, Pollution
Control Revenue Bonds (Chrysler Corporation
Project), Series 1984, 5.70% 1999 10,500 10,503
State Hospital Finance Authority, Hospital Revenue
Refunding Bonds (McLaren Obligated Group),
Series 1993A, 5.375% 2013 2,985 2,573
Michigan State Hospital Finance Authority, Hospital
Revenue Refunding Bonds (Genesys Health System
Obligated Group) Series 1995A:
7.10% 2002 1,955 1,994
8.00% 2005 8,880 9,446
8.10% 2013 5,000 5,171
8.125% 2021 4,500 4,619
7.50% 2027 3,925 3,836
City of Royal Oak Hospital Finance Authority,
Hospital Revenue Bonds (William Beaumont
Hospital), Series 1991D, 6.75% 2020 2,980 3,058
MINNESOTA - .56%
Housing and Redevelopment Authority of the City
of Saint Paul, Hospital Facility Revenue
Bonds (Healtheast Project), Series 1987-B
9.75% 2017 2,770 3,085
9.75% 2017 4,095 4,560
MISSISSIPPI - 2.68%
Claiborne County Adjustable/Fixed Rate Pollution
Control Revenue Bonds (Middle South Energy, Inc.
Project):
Series A, 9.50% 2013 1,550 1,755
Series B, 8.25% 2014 7,250 7,779
Series C, 9.875% 2014 23,535 26,935
NEW JERSEY - .53%
New Jersey Economic Development Authority, First
Mortgage Revenue Fixed Rate Bonds (Fellowship
Village Project) Series 1995A 9.25% 2025 7,000 7,186
NEW MEXICO - .29%
Mortgage Finance Authority, Single Family Mortgage
Purchase Refunding Senior Bonds, 1992 Series
A-1, 6.85% 2010 3,830 3,999
NEW YORK - 12.18%
Dormitory Authority of the State of New York:
State University Educational Facilities Revenue
Refunding Bonds:
Series 1990 B, 7.50% 2011 3,220 3,630
Series 1990 A, 7.50% 2013 6,500 7,337
Series 1990 B, 7.00% 2016 1,000 1,039
Series 1992 A, 6.25% 2017 5,000 4,952
City University System, Consolidated Second
General Resolution Revenue Bonds:
Series 1990 F, FGIC Insured, 7.50% 2020
(Prerefunded 2000) 7,100 8,024
Series G, 5.00% 2002 2,000 1,874
Court Facilities Lease Revenue Bonds (The City
of New York Issue), Series 1993A, 5.00% 1999 3,410 3,355
Environmental Facilities Corporation, State Water
Pollution Control Revolving Fund Revenue Bonds
(New York City Municipal Water Finance Authority
Project):
Series 1994 A, 5.75% 2009 8,380 8,323
Series 1991 E, 6.875% 2010 2,000 2,120
Series 1990 A, 7.50% 2012 500 541
Local Government Assistance Corporation:
Series 1991 A Bonds, 7.00% 2016
(Prerefunded 2001) 7,000 7,803
Series 1991 B Bonds, 7.50% 2020
(Prerefunded 2001) 6,925 7,899
Series 1991 C Bonds, 0% 2005 5,000 2,855
Series 1991 D Bonds, 7.00% 2011 2,000 2,120
Series 1991 D Bonds, 7.00% 2018
(Prerefunded 2002) 10,150 11,411
Series 1991 D Bonds, 6.75% 2021
(Prerefunded 2002) 2,700 2,996
Series 1992 C Bonds, 5.50% 2022 1,000 916
State Medical Care Facilities Finance Agency,
Mental Health Services Facilities Improvement
Revenue Bonds:
1991 Series A, 7.50% 2021 (Prerefunded 2001) 3,645 4,136
1993 Series F, Refunding, 4.60% 1999 1,000 954
1994 Series A, 5.10% 2003 1,720 1,608
Urban Development Corporation, Correctional
Capital Facilities Revenue Bonds:
Series 2, 6.50% 2021 (Prerefunded 2001) 3,700 3,964
Series 1993, 5.25% 2003 4,500 4,335
Metropolitan Transit Authority, Transit Facilities
Service Contract Bonds, Series O and P,
5.375% 2002 4,000 3,891
City of New York General Obligation Bonds:
Fiscal 1992 Series H, 6.875% 2002 1,900 1,983
Fiscal 1993 Series A, 6.25% 2003 4,200 4,254
Fiscal 1991 Series B, 8.25% 2006 1,500 1,728
Fiscal 1994 Series C, 5.50% 2007 9,000 8,226
Fiscal 1990 Series A, 6.00% 2012 1,450 1,349
Fiscal 1991 Series B, 7.00% 2016 10,000 10,189
Fiscal 1993 Series B, 6.75% 2017 7,635 7,645
New York City, Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds:
Fiscal 1989 Series B, FGIC Insured,
7.625% 2017 (Prerefunded 1998) 3,000 3,292
Fiscal 1991 Series C, 7.75% 2020
(Prerefunded 2001) 5,000 5,769
Fiscal 1994 Series B, 4.875% 2002 3,000 2,838
Fiscal 1994 Series B, 5.50% 2019 2,000 1,825
New York City Transit Authority, Transit
Facilities Revenue Bonds (Livingston Plaza
Project), Series 1990, FSA Insured, 7.50% 2020
(Prerefunded 2000) 4,000 4,484
Triborough Bridge and Tunnel Authority, General
Purpose and Revenue Bonds:
Series K, 8.25% 2017 (Prerefunded 1997) 1,000 1,083
Series S, 7.00% 2021 (Prerefunded 2001) 12,400 13,735
Series Y, 6.00% 2012 1,000 1,018
NORTH CAROLINA - 2.21%
North Carolina Eastern Municipal Power Agency,
Power System Revenue Bonds:
Refunding Series 1993 C, 5.50% 2007 5,250 4,812
1993 B, 7.25% 2007 5,000 5,396
Series 1993 A, 6.125% 2009 14,525 14,265
North Carolina Municipal Power Agency Number 1,
Catawba Electric Revenue Bonds:
Series 1992, 7.250% 2007 (Prerefunded 1996) 2,500 2,711
Series 1985 B, 8.50% 2017 (Prerefunded 1996) 2,000 2,107
Series 1985 A, 9.625% 2019 (Prerefunded 1996) 750 804
OHIO - .30%
Ohio Water Development Authority, State Pollution
Control Revenue Refunding Bonds, 1989 series A
(Ohio Edison Company Project), 7.625% 2023 4,000 4,073
OKLAHOMA - .22%
Grand River Dam Authority, Revenue Bonds,
Refunding Series 1993, 5.875% 2007 3,000 3,051
PENNSYLVANIA - 6.26%
The Cambria County Industrial Development Authority
(Pennsylvania), Pollution Control Revenue Refunding
Bonds, Series 1994 (Bethlehem Steel Corporation
Project), 7.50% 2015 2,000 2,031
Pennsylvania Convention Center Authority Refunding
Revenue Bonds, 1994 Series A, 6.25% 2004 10,000 9,925
Higher Educational Facilities Authority, Revenue
Bonds (Thomas Jefferson University), 1992
Series A, 6.625% 2009 1,250 1,312
Housing Finance Authority, Single Family Mortgage
Revenue Bonds:
Series 1990-29A, 7.375% 2016 3,575 3,802
Series 1992-33, 6.85% 2009 1,000 1,062
The Pennsylvania Industrial Development Authority,
Economic Development Revenue Bonds, Series 1994,
AMBAC Insured, 7.00% 2007 1,750 1,983
Beaver County Industrial Development Authority,
Polluion Control Revenue Refunding Bonds, 1989
Series A (Ohio Edison Company Beaver Valley
Project), 7.75% 2024 2,100 2,171
Lawrence County Industrial Development Authority,
Pollution Control Revenue Refunding Bonds, 1991
Series A (Pennsylvania Power Company New Castle
Project), 7.15% 2017 3,125 3,204
The Hospitals and Higher Education Facilities
Authority of Philadelphia:
Hospital Revenue Bonds (The Children's Hospital of
Philadelphia Project), Series A of 1992:
6.50% 2009 (Prerefunded 2002) 4,500 4,912
6.50% 2021 (Prerefunded 2002) 3,000 3,275
Frankford Hospital, Series A:
6.00% 2014 1,805 1,539
6.00% 2023 7,250 5,887
The Hospital Authority of Philadelphia Hospital
Revenue Bonds (Temple University Hospital):
Series of 1993 A, 6.50% 2008 12,500 12,465
Series of 1983, 6.625% 2023 25,060 23,519
City of Pottsville Hospital Authority, Hospital
Revenue Bonds (The Pottsville Hospital and Warne
Clinic), Series of 1994, 7.25% 2024 8,500 7,944
RHODE ISLAND - 1.97%
Convention Center Authority Refunding Revenue
Bonds, MBIA Insured:
1993 Series B, 5.00% 2008 2,790 2,564
1993 Series A, 5.00% 2010 3,190 2,877
1993 Series B, 5.25% 2015 5,000 4,520
Depositors Economic Protection
Corporation, Special Obligation Bonds:
1992 Series A, FSA Insured, 6.625% 2019
(Prerefunded 2002) 1,000 1,099
1993 Series A, 5.75% 2021 6,500 6,027
1993 Series A, 6.375% 2022 7,000 6,968
Housing and Mortgage Finance Corporation,
Homeownership Opportunity Bonds, Series 3-A,
7.80% 2010 2,500 2,675
SOUTH CAROLINA - .01%
South Carolina Public Service Authority, Electric
Revenue Bonds, 7.875% 2021 (Prerefunded 1996) 140 147
TENNESSEE - 2.45%
The Health and Educational Facilities Board of the
Metropolitan Government of Nashville and Davidson
County, Tennessee, 9.25% 2024 6,600 6,714
Memphis-Shelby County Airport Authority, Special
Facilities Revenue Bonds, Refunding Series 1992
(Federal Express Corporation), 6.75% 2012 26,375 26,604
TEXAS - 5.09%
National Research Laboratory Commission General
Obligation Bonds, Series 1990 (Superconducting
Super Collider Project), 7.125% 2020
(Prerefunded 2000) 14,450 15,953
City of Austin, Combined Utility Systems Revenue
Refunding Bonds, Series 1990 A, FGIC Insured,
6.00% 2010 2,000 2,018
Dallas-Fort Worth International Airport, Facility
Improvement Corporation (Delta Air Lines, Inc.),
Revenue Refunding Bonds, Series 1993, 6.25% 2013 6,420 5,884
Fort Worth Independent School District (Tarrant
County, Texas), Unlimited Tax Refunding Bonds,
Series 1993, 4.90% 2002 2,875 2,801
Harris County Health Facilities Development
Corporation:
SCH Health Care System Revenue Bonds (Sisters
of Charity of the Incarnate Word, Houston,
Texas), Series 1991A, 7.10% 2021 24,000 25,181
Hospital Revenue Bonds (St. Luke's Episcopal
Hospital Project), Series 1991A 6.75% 2021 7,470 7,607
Harris County Toll Road, Unlimited Tax and
Subordinate Lien Revenue Bonds, Series 1984,
10.375% 2014 (Prerefunded 1998) 1,000 1,150
North Central Texas Health Facilities Development
Corporation, Hospital Revenue Bonds
(Presbyterian Healthcare System Project),
Series 1993, 5.90% 2021 3,000 2,799
Northside Independent School District (Bexar,
Medina, and Bandera Counties, Texas), Unlimited
Tax School Building Bonds, Series 1991, 6.375% 2008 4,000 4,152
Tomball Hospital Authority, Hospital Revenue
Refunding Bonds, Series 1993, Tomball Regional
Hospital, 6.125% 2023 2,000 1,668
UTAH - 2.81%
Intermountain Power Agency:
Special Obligation Refunding Bonds,
5th Crossover Series:
FGIC Insured, 7.00% 2015 8,250 8,663
7.20% 2019 1,000 1,045
Power Supply Revenue Refunding Bonds:
1985 Series A, 10.375% 2016 (Crossover
Refunded 1995) 6,000 6,260
1985 Series H, 9.00% 2019 (Crossover
Refunded 1995) 1,250 1,286
Salt Lake City, Utah Hospital Revenue Bonds, Series
1992 (IHC Hospitals, Inc.):
5.50% 2021 8,100 7,145
6.25% 2023 14,125 13,743
VERMONT - .09%
Vermont Housing Finance Agency, Single Family
Housing Bonds, Series 4, 5.75% 2012 1,250 1,283
VIRGINIA - .89%
Industrial Development Authority of Fairfax
County, Hospital Revenue Refunding Bonds (Inova
Health System Hospitals Project), Series 1993A:
4.80% 2005 1,850 1,720
5.00% 2010 3,450 3,029
5.25% 2019 1,000 852
Industrial Development Authority of the City of
Norfolk, Hospital Revenue Bonds (Sentara
Hospitals-Norfolk Project), Series 1991,
6.50% 2013 2,500 2,587
Commonwealth Transportation Baord, Commonwealth of
Virginia Transportation Contract Revenue Bonds,
Series 1988 (Route 28 Project) 7.80% 2016 3,500 3,848
WASHINGTON - 7.92%
State General Obligation, Series B, 5.50% 2010 2,000 1,934
Washington Health Care Facilities Authority
Revenue Bonds, Series 1992, (Swedish Hospital
Medical Center, Seattle), AMBAC Insured, 6.30% 2022 4,000 4,000
Washington Public Power Supply System:
Nuclear Project No. 1 Refunding Revenue Bonds:
Series 1989 A, 7.50% 2015 (Prerefunded 1999) 1,820 2,026
Series 1992 A, 6.50% 2015 10,250 10,256
Series 1989 A, 6.00% 2017 11,000 10,331
Nuclear Project No. 2 Refunding Revenue Bonds:
Series 1990 A, 7.375% 2012 (Prerefunded 2000) 17,335 19,422
Series 1993 A, 5.10% 2000 5,600 5,477
Series 1994 A, 6.00% 2007 20,000 19,843
Series 1994 A, 5.25% 2008 6,800 6,190
Nuclear Project No. 3 Refunding Revenue Bonds:
BIG Insured, 7.25% 2016 (Prerefunded 1999) 5,000 5,521
Series 1989 B, 7.25% 2015 (Prerefunded 2000) 5,450 6,026
Series 1989 B, FGIC Insured, 7.00% 2005 14,400 15,527
Series 1989 B, 7.125% 2016 1,000 1,107
WEST VIRGINIA - .21%
Kanawha County, West Virginia, Pollution Control
Revenue Bonds (Union Carbide Corporation Project),
Series 1984, 7.35% 2004 2,600 2,813
WISCONSIN - .88%
Health and Educational Facilities Authority,
Revenue Bonds:
Childrens Hospital Project, Series 1993, FGIC
Insured, 5.50% 2006 2,000 1,938
Pollution Control and Industrial Development Revenue
Bonds (General Motors Corporation Projects), City
of Janesville, Series 1984, 5.55% 2009 3,000 2,707
City of Superior, Wisconsin, Limited Obligation
Refunding Revenue Bonds (Midwest Energy Resources
Company Project), Series E-1991 (Collateralized)
FGIC Insured, 6.90% 2021 6,000 6,719
The Wisconsin Public Power Incorporated System,
Power Supply System Revenue Bonds, Series
1990 A, AMBAC Insured, 7.40% 2020 (pre-refunded
2000) 500 562
WYOMING - .06%
Community Development Authority, Single Family
Mortgage Bonds, 1989 Series A, 7.90% 2017 755 799
-----------
1,283,414
-----------
TAX-EXEMPT SECURITIES MATURING IN
ONE YEAR OR LESS - 3.89%
City of Houston, Texas, Tax and Revenue Anticipation
Notes, Series 1994, 4.50% 1995 4,100 4,102
State of Illinois General Obligation Notes,
4.75% 1995 1,000 1,000
County of Los Angeles, 1994-95 Tax and Revenue
Anticipation Notes, 4.50% 6/30/95 21,650 21,659
County of Los Angeles, California, Certificates of
Participation (Marina Del Rey), Series A,
4.75% 7/1/95 2,890 2,886
North Central Texas Health Facilities Development
Corporation, Hospital Revenue Bonds (Presbyterian
Medical Center Project), Series 1985C, Daily
Adjustable Tax-Exempt Securities, 3.80% 2015 1,500 1,500
Peninsula Ports Authority of Virginia, Coal Terminal
Revenue Refunding Bonds (Dominion Terminal
Associates Project), Series 1987, Daily Adjustable
Tax-Exempt Securities, 3.75% 2016 500 500
Port of Port Arthur Navigation District of Jefferson
County, Texas Pollution Control Revenue Refunding
Bonds (Texaco Inc. Project), Series 1994, Daily
Adjustable Tax-Exempt Securities, 4.00% 2024 500 500
State of Texas, Tax and Revenue Anticipation notes,
Series 1994, 5.00% 1995 15,770 15,818
City of Valdez, Alaska Marine Terminal Revenue Bonds,
(Exxon Pipeline Company Project) Series 1985,
Daily Adjustable Tax-Exempt Securities, 3.90% 2025 2,500 2,500
State of Wisconsin Operating Notes of 1994, 4.50%
6/15/95 2,340 2,341
-----------
52,806
-----------
TOTAL TAX-EXEMPT SECURITIES (cost: $1,297,290,000) 1,336,220
Excess of cash and receivables over payables 22,972
-----------
NET ASSETS $1,359,192
===========
See Notes to Financial Statements
</TABLE>
The Tax-Exempt Bond Fund of America
Financial Statements
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1995 (dollars in thousands) Unaudited
<S> <C> <C>
Assets:
Tax-exempt securities
(cost: $1,297,290) $1,336,220
Cash 852
Receivables for-
Sales of investments $ 7,656
Sales of fund's shares 2,566
Accrued interest 21,320 31,542
---------- -----------
1,368,614
Liabilities:
Payables for-
Purchases of investments 4,417
Repurchases of fund's shares 1,310
Dividends payable 2,643
Management services 408
Accrued expenses 644 9,422
---------- -----------
Net Assets at February 28, 1995-
Equivalent to $11.61 per share on
117,029,823 shares of $1 par value
capital stock outstanding (authorized
capital stock--200,000,000 shares) $1,359,192
===========
STATEMENT OF OPERATIONS
for the six months ended February 28, 1995 Unaudited
(dollars in thousands)
Investment Income:
Income:
Interest on tax-exempt securities $ 44,035
-----------
Expenses:
Management services fee $ 2,545
Distribution expenses 1,393
Transfer agent fee 218
Reports to shareholders 25
Registration statement and prospectus 22
Postage, stationery and supplies 7
Directors' fees 13
Auditing and legal fees 36
Custodian fee 24
Taxes other than federal income tax 1 4,284
---------- -----------
Net investment income 39,751
-----------
Realized Loss and Unrealized
Appreciation on Investments:
Net realized loss (1,172)
Net unrealized appreciation on investments:
Beginning of period 44,575
End of period 38,930
----------
Net change in unrealized appreciation
on investments (5,645)
-----------
Net realized loss and change in
unrealized appreciation on investments (6,817)
-----------
Net Increase in Net Assets Resulting
from Operations $32,934
===========
STATEMENT OF CHANGES IN NET ASSETS
(dollars in thousands)
Six months
ended Year ended
February 28, August 31,
1995* 1994
----------- -----------
Operations:
Net investment income $ 39,751 $ 76,230
Net realized loss on investments (1,172) (359)
Net change in unrealized appreciation
on investments (5,645) (80,386)
----------- -----------
Net increase (decrease) in net assets
resulting from operations 32,934 (4,515)
----------- -----------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (39,682) (77,282)
Distributions from net realized gain on
investments - (9,069)
----------- -----------
Total dividends and distributions (39,682) (86,351)
----------- -----------
Capital Share Transactions:
Proceeds from shares sold:
13,067,595 and 33,079,334
shares, respectively 147,107 399,869
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on investments:
2,131,699 and 4,618,485 shares,
respectively 24,034 55,571
Cost of shares repurchased:
17,045,161 and 25,556,775
shares, respectively (190,299) (306,226)
----------- -----------
Net (decrease) increase in net assets
resulting from capital share
transactions (19,158) 149,214
----------- -----------
Total (decrease) increase in net assets (25,906) 58,348
Net Assets:
Beginning of period 1,385,098 1,326,750
----------- -----------
End of period $1,359,192 $1,385,098
=========== ===========
</TABLE>
*Unaudited
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
1. The Tax-Exempt Bond Fund of America (the "fund") is
registered under the Investment Company Act of 1940 as an open-end, diversified
management investment company. The following paragraphs summarize the
significant accounting policies consistently followed by the fund in the
preparation of its financial statements:
Tax-exempt securities with original or remaining maturities in excess of 60
days are valued at prices obtained from a national municipal bond pricing
service. The pricing service takes into account various factors such as
quality, yield and maturity of tax-exempt securities comparable to those held
by the fund, as well as actual bid and asked prices on a particular day. Other
securities with original or remaining maturities in excess of 60 days,
including securities for which pricing services are not available, are valued
at the mean of their quoted bid and asked prices. All securities with 60 days
or less to maturity are valued at amortized cost, which approximates market
value. Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by the Valuation Committee of
the Board of Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Interest income is reported on the accrual basis. Premiums and
original issue discounts on securities purchased are amortized over the life of
the respective securities. Dividends are declared on a daily basis after the
determination of the fund's net investment income and paid to shareholders on a
monthly basis.
Pursuant to the custodian agreement, the fund may receive credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
No credits were utilized during the six months ended February 28, 1995.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net investment income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision
is required.
As of February 28,1995, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $38,930,000, of which $55,491,000
related to appreciated securities and $16,561,000 related to depreciated
securities. There was no difference between book and tax realized gains on
securities transactions for the six months ended February 28, 1995. The cost
of portfolio securities for book and federal
income tax purposes was $1,297,290,000 at February 28, 1995.
3. The fee of $2,545,000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Directors of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.30% of the first $60 million of average net assets;
0.21% of such assets in excess of $60 million but not exceeding $1 billion;
0.18% of such assets in excess of $1 billion but not exceeding $3 billion; and
0.16% of such assets in excess of $3 billion ("asset-based fee"); plus 3.00%
on the first $3,333,333 of the fund's monthly gross investment income; 2.50% of
such income in excess of $3,333,333 but not exceeding $8,333,333; and 2.25% of
such income in excess of $8,333,333 ("income-based fee").
Pursuant to a Plan of Distribution, the fund may expend up to 0.25% of its
average net assets annually for any activities primarily intended to result in
sales of fund shares, provided the categories of expenses for which
reimbursement is made are approved by the fund's Board of Directors. Fund
expenses under the Plan include payments to dealers to compensate them for
their selling and servicing efforts. During the six months ended February 28,
1995, distribution expenses under the Plan were $1,393,000. As of February 28,
1995, accrued and unpaid distribution expenses were $605,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $218,000. American Funds Distributors, Inc. (AFD), the principal
underwriter of the fund's shares, received $277,000 (after allowances to
dealers) as its portion of the sales charges paid by purchasers of the fund's
shares. Such sales charges are not an expense of the fund and, hence, are not
reflected in the accompanying statement of operations.
Directors who are unaffiliated with CRMC may elect to defer part or all of the
fees earned for services as members of the board. Amounts deferred are not
funded and are general unsecured liabilities of the fund. As of February 28,
1995, aggregate amounts deferred were $14,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Directors and officers of the fund
are or may be considered to be affiliated with CRMC, AFS and AFD. No such
persons received any renumeration diretly from the fund.
4. As of February 28, 1995, accumulated net realized loss on investments was
$2,624,000 and additional paid-in capital was $1,205,786,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $311,734,000 and $377,180,000, respectively, during
the six months ended February 28, 1995.
Per-Share Data and Ratios
<TABLE>
<CAPTION>
Six
months
ended
February Year Ended August 31
28,
1995/1/ 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $11.65 $12.43 $11.78 $11.30 $10.78 $10.99
-------- -------- ------ ------ ------- ------
Income from Investment Operations:
Net investment income .34 .67 .68 .70 .71 .73
Net realized and unrealized (loss)gain (.04) (.69) .73 .48 .52 (.21)
on investments
-------- ------ ------ ------ ------- ------
Total income from investment operations .30 (.02) 1.41 1.18 1.23 .52
-------- ------ ------ ------ ------- ------
Less Distributions:
Dividends from net investment income (.34) (.68) (.68) (.70) (.71) (.73)
Distributions from net realized gains -- (.08) (.08) -- -- --
--------- ------ ------ ------ ------- ------
Total distributions (.34) (.76) (.76) (.70) (.71) (.73)
--------- ------ ------ ------ ------- ------
Net Asset Value, End of Period $11.61 $11.65 $12.43 $11.78 $11.30 $10.78
========= ====== ====== ====== ======= ======
Total Return/2/ 2.71% (.14)% 12.42% 10.80% 11.70% 4.84%
Ratios/Supplemental Data:
Net assets, end of period (in millions) $1,359 $1,385 $1,327 $921 $712 $551
Ratio of expenses to average net assets .32%/3/ .69% .71% .71% .72% .70%
Ratio of net income to average net assets 3.01%/3/ 5.53% 5.62% 6.04% 6.33% 6.65%
Portfolio turnover rate 24.1% 22.4% 15.6% 17.2% 24.7% 39.9%
</TABLE>
/1/ Unaudited
/2/ This was calculated without deducting a sales Charge. The maximum sales
charge is 4.75% of the fund's
offering price.
/3/ Based on operations for the period shown and, accordingly, not
representative of full year's operations.
BOARD OF DIRECTORS
H. FREDERICK CHRISTIE
Palos Verdes Estates, California
Private investor; former President and Chief
Executive Officer, The Mission Group; former
President, Southern California Edison Company
DIANE C. CREEL
Long Beach, California
Chairwoman, Chief Executive Officer and
President, The Earth Technology Corporation
MARTIN FENTON, JR.
San Diego, California
Chairman of the Board, Senior Resource
Group, Inc. (senior living centers management)
LEONARD R. FULLER
Los Angeles, California
President, Fuller & Company, Inc.
(financial management consulting firm)
ABNER D. GOLDSTINE
Los Angeles, California
PRESIDENT OF THE FUND
Senior Vice President and Director,
Capital Research and Management Company
PAUL G. HAAGA, JR.
Los Angeles, California
CHAIRMAN OF THE BOARD OF THE FUND
Senior Vice President and Director,
Capital Research and Management Company
HERBERT HOOVER III
Pasadena, California
Private investor
RICHARD G. NEWMAN
Los Angeles, California
Chairman of the Board, President and Chief
Executive Officer, AECOM Technology
Corporation (architectural engineering)
PETER C. VALLI
Long Beach, California
Chairman of the Board and Chief Executive
Officer, BW/IP International, Inc.
(industrial manufacturing)
Leonard Weil retired from the Board effective December 31, 1994. He has been a
member of the Board of Directors since 1987. The Directors thank him for his
many contributions to the fund.
Diane Creel and Leonard Fuller were elected
Directors effective September 22, 1994.
OTHER OFFICERS
NEIL L. LANGBERG
Los Angeles, California
SENIOR VICE PRESIDENT OF THE FUND
Vice President - Investment
Management Group, Capital Research
and Management Company
MARY C. CREMIN
Los Angeles, California
VICE PRESIDENT AND TREASURER OF THE FUND
Senior Vice President - Fund Business
Management Group, Capital Research and Management Company
MICHAEL J. DOWNER
Los Angeles, California
VICE PRESIDENT OF THE FUND
Senior Vice President - Fund Business
Management Group, Capital Research
and Management Company
JULIE F. WILLIAMS
Los Angeles, California
SECRETARY OF THE FUND
Vice President - Fund Business
Management Group, Capital Research and Management Company
KIMBERLY S. VERDICK
Los Angeles, California
ASSISTANT SECRETARY OF THE FUND
Compliance Associate - Fund Business
Management Group, Capital Research
and Management Company
NYMIA M. CUCUECO
Los Angeles, California
ASSISTANT TREASURER OF THE FUND
Vice President - Fund Business
Management Group, Capital Research
and Management Company
ANTHONY W. HYNES, JR.
Los Angeles, California
ASSISTANT TREASURER OF THE FUND
Vice President - Fund Business
Management Group, Capital Research
and Management Company
OFFICES OF THE FUND AND OF THE INVESTMENT ADVISER
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92621-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
P.O. Box 2205
Brea, California 92622-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Morrison & Foerster
345 California Street
San Francisco, California 94104-2675
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR SECURITIES DEALER OR FINANCIAL PLANNER, OR CALL THE FUND'S
TRANSFER AGENT, TOLL-FREE, AT 800/421-0180.
This report is for the information of shareholders of The Tax-Exempt Bond Fund
of America, but it may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the fund. If used as
sales material after June 30, 1995, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Litho in USA BDA/FS
Lit. No. TEBF-013-0495
Printed on recycled paper
[The American Funds Group(R)]
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