AXP(SM)
Extra Income
Fund
1999 SEMIANNUAL REPORT
American Express (R) Funds
(icon of) clock
AXP Extra Income Fund seeks to provide shareholders with high current income as
its primary goal and, as its secondary goal, capital growth.
<PAGE>
Bonds with Something Extra
Bonds aren't necessarily conservative securities strictly for people willing to
settle for modest returns. High-yield corporate bonds, for example, are actually
quite aggressive investments, offering high potential returns to investors
willing to take more risk.
These are the bonds that AXP Extra Income Fund invests in. High-yield bonds are
issued by a wide range of companies -- from well-established ones that might be
experiencing financial difficulty to new, rapidly growing ones that have yet to
build a credit history.
Importantly, the Fund spreads its investments among many bonds representing many
types of businesses. This helps to spread the investment risk for shareholders.
Contents
From the Chairman 3
From the Portfolio Manager 4
Fund Facts 5
The 10 Largest Holdings 6
Financial Statements (Fund) 7
Notes to Financial Statements (Fund) 10
Financial Statements (Portfolio) 17
Notes to Financial Statements (Portfolio) 20
Investments in Securities 24
<PAGE>
(picture of) Arne H. Carlson
Arne H. Carlson
Chairman of the board
From the Chairman
We are in an extraordinary period for investing in financial assets, with many
stocks at their all-time highs. Looking at year 2000, American Express Financial
Corporation, the Fund's investment manager, expects the economy to continue to
grow and long-term interest rates to rise only slightly. This is a great time to
take a close look at your goals and investments. We encourage you to:
o Consult a professional investment adviser who can help you cut through
mountains of data.
o Set financial goals that extend beyond those achievable through retirement
plans of your employer.
o Learn as much as you can about your current investments.
The portfolio manager's letter that follows provides a review of the Fund's
investment strategies and performance. The annual report contains other valuable
information as well. The Fund's prospectus describes its investment objectives
and how it intends to achieve those objectives. As experienced investors know,
information is vital to making good investment decisions.
So, take a moment and decide again whether the Fund's investment objectives and
management style fit with your other investments to help you reach your
financial goals. And make it a practice on a regular basis to assess your
investment options.
Sincerely,
Arne H. Carlson
<PAGE>
(picture of) Jack Utter
Jack Utter
Portfolio manager
From the Portfolio Manager
The bond market struggled for much of the past six months amid concerns about
inflation and rising interest rates. Although high-yield issues fared better
than most sectors of the market, an overall decline in prices resulted in AXP
Extra Income Fund's Class A shares (excluding the sales charge) experiencing a
loss of 0.57% on a total return basis for the first half of the fiscal year --
June through November 1999.
The period got off to a reasonably good start, though, as the economy continued
to chug along with little sign of higher inflation. Thanks in part to strength
in its telecommunications and paper/forest products holdings, the Fund produced
positive results through mid-summer.
But the tone of the bond market changed abruptly about that time, as investors,
prompted by a hike in short-term interest rates by the Federal Reserve Board
(the Fed), became increasingly worried that higher inflation and still-higher
interest rates might lie ahead. That concern was reinforced by another Fed rate
hike in late August. While high-yield bonds suffered less from the rise in rates
than did some sectors of the market, a substantial supply of new issues and a
drop-off in demand on the part of investors in high-yield mutual funds kept
downward pressure on prices through October.
A LATE RALLY
Still, the period did end on an encouraging note, as news of still-tame
inflation finally boosted investors' spirits. For the Fund, the result was a
sharp rebound in November, which proved to be its strongest month of the period.
As I look toward the new fiscal year, with economic growth showing no sign of
slacking off, I think the Fed may decide to push short-term interest rates
somewhat higher in the months ahead to avoid a run-up in inflation.
Nevertheless, while that almost surely would present a near-term problem for the
bond market, I think it might ultimately lead to better performance as the
period progresses. Beyond that, because high-yield bonds currently offer
above-average investment value, I think they have the potential to attract
increased interest from investors and, therefore, could enjoy improved price
support.
Jack Utter
<PAGE>
Fund Facts
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
Nov. 30, 1999 $3.76
May 31, 1999 $3.97
Decrease $0.21
Distributions -- June 1, 1999 - Nov. 30, 1999
From income $0.18
From capital gains $ --
Total distributions $0.18
Total return* -0.57%**
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
Nov. 30, 1999 $3.76
May 31, 1999 $3.97
Decrease $0.21
Distributions -- June 1, 1999 - Nov. 30, 1999
From income $0.17
From capital gains $ --
Total distributions $0.17
Total return* -0.95%**
Class Y -- 6-month performance
(All figures per share)
Net asset value (NAV)
Nov. 30, 1999 $3.76
May 31, 1999 $3.97
Decrease $0.21
Distributions -- June 1, 1999 - Nov. 30, 1999
From income $0.19
From capital gains $ --
Total distributions $0.19
Total return* -0.54%**
*The prospectus discusses the effect of sales charges, if any, on the various
classes.
**The total return is a hypothetical investment in the Fund with all
distributions reinvested.
<PAGE>
The 10 Largest Holdings
Percent Value
(of net assets) (as of Nov. 30, 1999)
EchoStar DBS
9.38% 2009 1.13% $41,271,344
CSC Holdings
11.13% Pay-in-kind Series M Preferred 1.04 37,831,889
Outsourcing Solutions
11.00% 2006 .99 36,273,149
NTL
11.40% 2001 .98 35,800,000
AMFM
8.00% 2008 .98 35,638,874
Warren (SD)
14.00% 2006 .87 31,706,045
Nextel Partners
13.78% 2004 .86 31,254,749
Arcadia Financial
11.50% 2007 .83 30,448,200
Gaylord Container
9.88% 2008 .78 28,518,750
NTL
13.00% Pay-in-kind Series B Preferred .78 28,452,602
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 9.24% of net assets
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<TABLE>
<CAPTION>
Financial Statements
Statement of assets and liabilities
AXP Extra Income Fund, Inc.
Nov. 30, 1999 (Unaudited)
Assets
<S> <C>
Investments in High Yield Portfolio (Note 1) $3,651,363,506
--------------
Liabilities
Dividends payable to shareholders 7,719,865
Accrued distribution fee 46,297
Accrued service fee 3
Accrued transfer agency fee 21,730
Accrued administrative services fee 4,325
Other accrued expenses 341,969
-------
Total liabilities 8,134,189
---------
Net assets applicable to outstanding capital stock $3,643,229,317
==============
Represented by
Capital stock-- $.01 par value (Note 1) $ 9,700,103
Additional paid-in capital 4,362,502,381
Undistributed net investment income 4,166,258
Accumulated net realized gain (loss) (296,448,402)
Unrealized appreciation (depreciation) on investments and on
translation of assets and liabilities in foreign currencies (436,691,023)
------------
Total -- representing net assets applicable to outstanding capital stock $3,643,229,317
==============
Net assets applicable to outstanding shares: Class A $2,609,626,524
Class B $1,032,678,149
Class Y $ 924,644
Net asset value per share of outstanding capital stock: Class A shares 694,795,288 $ 3.76
Class B shares 274,968,994 $ 3.76
Class Y shares 246,059 $ 3.76
------- --------------
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Statement of operations
AXP Extra Income Fund, Inc.
Six months ended Nov. 30, 1999 (Unaudited)
Investment income
Income:
<S> <C>
Dividends $ 22,300,181
Interest 185,773,971
-----------
Total income 208,074,152
-----------
Expenses (Note 2):
Expenses allocated from High Yield Portfolio 10,927,285
Distribution fee
Class A 2,821,867
Class B 5,135,998
Transfer agency fee 2,034,657
Incremental transfer agency fee
Class A 161,302
Class B 106,593
Service fee
Class A 426,464
Class B 165,511
Class Y 571
Administrative services fees and expenses 833,338
Compensation of board members 5,578
Printing and postage 321,470
Registration fees 108,044
Audit fees 5,750
Other 4,678
-----
Total expenses 23,059,106
Earnings credits on cash balances (Note 2) (74,705)
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Total net expenses 22,984,401
----------
Investment income (loss) -- net 185,089,751
-----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (71,632,319)
Foreign currency transactions (3,631,875)
----------
Net realized gain (loss) on investments (75,264,194)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (140,219,970)
------------
Net gain (loss) on investments (215,484,164)
------------
Net increase (decrease) in net assets resulting from operations $ (30,394,413)
==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
AXP Extra Income Fund, Inc.
Nov. 30, 1999 May 31, 1999
Six months ended Year ended
(Unaudited)
Operations and distributions
<S> <C> <C>
Investment income (loss)-- net $ 185,089,751 $ 373,495,853
Net realized gain (loss) on investments (75,264,194) (127,843,804)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (140,219,970) (413,763,674)
------------ ------------
Net increase (decrease) in net assets resulting from operations (30,394,413) (168,111,625)
----------- ------------
Distributions to shareholders from:
Net investment income
Class A (133,648,471) (296,255,921)
Class B (47,982,538) (98,359,518)
Class Y (55,680) (162,431)
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Total distributions (181,686,689) (394,777,870)
------------ ------------
Capital share transactions (Note 3)
Proceeds from sales
Class A shares (Note 2) 302,109,472 804,097,401
Class B shares 164,890,662 467,391,217
Class Y shares 217,368 648,414
Reinvestment of distributions at net asset value
Class A shares 86,532,786 202,831,655
Class B shares 37,952,109 83,023,420
Class Y shares 54,009 162,431
Payments for redemptions
Class A shares (440,558,597) (888,843,613)
Class B shares (Note 2) (186,791,529) (374,265,469)
Class Y shares (525,410) (1,139,232)
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Increase (decrease) in net assets from capital share transactions (36,119,130) 293,906,224
----------- -----------
Total increase (decrease) in net assets (248,200,232) (268,983,271)
Net assets at beginning of period 3,891,429,549 4,160,412,820
------------- -------------
Net assets at end of period $3,643,229,317 $3,891,429,549
============== ==============
Undistributed net investment income $ 4,166,258 $ 763,196
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See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
AXP Extra Income Fund, Inc.
(Unaudited as to Nov. 30, 1999)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company. The Fund has 10 billion
authorized shares of capital stock.
The Fund offers Class A, Class B and Class Y shares.
o Class A shares are sold with a front-end sales charge.
o Class B shares may be subject to a contingent deferred sales charge and
automatically convert to Class A shares during the ninth calendar year of
ownership.
o Class Y shares have no sales charge and are offered only to qualifying
institutional investors.
All classes of shares have identical voting, dividend and liquidation rights.
The distribution fee, incremental transfer agency fee and service fee (class
specific expenses) differs among classes. Income, expenses (other than class
specific expenses) and realized and unrealized gains or losses on investments
are allocated to each class of shares based upon its relative net assets.
Investment in High Yield Portfolio
The Fund invests all of its assets in the High Yield Portfolio (the Portfolio),
a series of Income Trust (the Trust), an open-end investment company that has
the same objectives as the Fund. The Portfolio invests primarily in long-term
corporate bonds in the lower-rating categories, commonly known as junk bonds.
The Fund records daily its share of the Portfolio's income, expenses and
realized and unrealized gains and losses. The financial statements of the
Portfolio are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements.
The Fund records its investment in the Portfolio at the value that is equal to
the Fund's proportionate ownership interest in the Portfolio's net assets. The
percentage of the Portfolio owned by the Fund as of Nov. 30, 1999 was 99.95%.
Valuation of securities held by the Portfolio is discussed in Note 1 of the
Portfolio's "Notes to financial statements" (included elsewhere in this report).
Use of estimates
Preparing financial statements that conform to generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.
Federal taxes
The Fund's policy is to comply with all sections of the Internal Revenue Code
that apply to regulated investment companies and to distribute substantially all
of its taxable income to the shareholders. No provision for income or excise
taxes is thus required.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes, and losses deferred due to
"wash sale" transactions. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
Dividends to shareholders
Dividends from net investment income, declared daily and paid monthly, are
reinvested in additional shares of the Fund at net asset value or payable in
cash. Capital gains, when available, are distributed along with the last income
dividend of the calendar year.
2. EXPENSES AND SALES CHARGES
In addition to the expenses allocated from the Portfolio, the Fund accrues its
own expenses as follows:
The Fund has an agreement with American Express Financial Corporation (AEFC) to
provide administrative services. Under an Administrative Services Agreement, the
Fund pays AEFC a fee for administration and accounting services at a percentage
of the Fund's average daily net assets in reducing percentages from 0.05% to
0.025% annually. A minor portion of additional administrative service expenses
paid by the Fund are consultants' fees and fund office expenses. Under this
agreement, the Fund also pays taxes, audit and certain legal fees, registration
fees for shares, compensation of board members, corporate filing fees and any
other expenses properly payable by the Fund and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client Service
Corporation (AECSC) maintains shareholder accounts and records. The Fund pays
AECSC an annual fee per shareholder account for this service as follows:
o Class A $19.50
o Class B $20.50
o Class Y $17.50
The Fund has agreements with American Express Financial Advisors Inc. (the
Distributor) for distribution and shareholder services. Under a Plan and
Agreement of Distribution (the Plan), the Fund pays a distribution fee at an
annual rate up to 0.25% of the Fund's average daily net assets attributable to
Class A shares and up to 1.00% for Class B shares. The Plan went into effect
July 1, 1999. Under terms of a prior Plan and Agreement of Distribution (the
Prior Plan) that ended June 30, 1999, the Fund paid a distribution fee for Class
B shares at an annual rate up to 0.75% of average daily net assets. The Prior
Plan was not effective with respect to Class A shares.
Under a Shareholder Service Agreement, the Fund's Class Y shares pay a fee for
service provided to shareholders by financial advisors and other servicing
agents. The fee is calculated at a rate of 0.10% of the Fund's average daily net
assets attributable to Class Y shares. Under terms of a prior agreement that
ended June 30, 1999, the Fund paid a shareholder service fee for Class A and
Class B shares at a rate of 0.175% of average daily net assets. Effective July
1, 1999, the agreement for Class A and Class B shares was converted to the Plan
and Agreement of Distribution discussed above.
Sales charges received by the Distributor for distributing Fund shares were
$10,648,566 for Class A and $1,432,177 for Class B for the six months ended Nov.
30, 1999.
During the six months ended Nov. 30, 1999, the Fund's transfer agency fees were
reduced by $74,705 as a result of earnings credits from overnight cash balances.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended Nov. 30, 1999
Class A Class B Class Y
Sold 78,194,070 42,624,169 55,777
Issued for reinvested distributions 22,481,976 9,865,109 14,009
Redeemed (114,183,147) (48,416,831) (136,465)
------------ ----------- --------
Net increase (decrease) (13,507,101) 4,072,447 (66,679)
Year ended May 31, 1999
Class A Class B Class Y
Sold 196,364,147 113,211,748 159,985
Issued for reinvested distributions 49,792,206 20,406,881 39,979
Redeemed (217,533,478) (91,218,686) (284,954)
------------ ----------- --------
Net increase (decrease) 28,622,875 42,399,943 (84,990)
4. CAPITAL LOSS CARRYOVER
For federal income tax purposes, the Fund has a capital loss carryover of
$220,674,753 as of May 31, 1999, that if not offset by subsequent capital gains,
will expire in 2000 through 2008. It is unlikely the board will authorize a
distribution of any net realized gains until the available capital loss
carryover has been offset or expires.
5. BANK BORROWINGS
The Fund has a revolving credit agreement with U.S. Bank, N.A., whereby the Fund
is permitted to have bank borrowings for temporary or emergency purposes to fund
shareholder redemptions. The Fund must have asset coverage for borrowings not to
exceed the aggregate of 333% of advances equal to or less than five business
days plus 367% of advances over five business days. The agreement, which enables
the Fund to participate with other American Express mutual funds, permits
borrowings up to $200 million, collectively. Interest is charged to each Fund
based on its borrowings at a rate equal to the Federal Funds Rate plus 0.30% or
the Eurodollar Rate (Reserve Adjusted) plus 0.20%. Borrowings are payable up to
90 days after such loan is executed. The Fund also pays a commitment fee equal
to its pro rata share of the amount of the credit facility at a rate of 0.05%
per annum. The Fund had no borrowings outstanding during the six months ended
Nov. 30, 1999.
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<CAPTION>
6. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
Fiscal period ended May 31,
Per share income and capital changesa
Class A
1999c 1999 1998 1997 1996b
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $3.97 $4.58 $4.39 $4.34 $4.15
Income from investment operations:
Net investment income (loss) .19 .40 .40 .39 .28
Net gains (losses) (both realized and unrealized) (.22) (.58) .17 .06 .20
Total from investment operations (.03) (.18) .57 .45 .48
Less distributions:
Dividends from net investment income (.18) (.43) (.38) (.40) (.29)
Net asset value, end of period $3.76 $3.97 $4.58 $4.39 $4.34
Ratios/supplemental data
Net assets, end of period (in millions) $2,610 $2,814 $3,112 $2,582 $2,145
Ratio of expenses to
average daily net assetsd .99%e .91% .89% .92% .94%e
Ratio of net investment income (loss)
to average daily net assets 9.84%e 9.86% 8.90% 9.01% 8.90%e
Portfolio turnover rate
(excluding short-term securities) 19% 47% 81% 92% 61%
Total returnf (.57%) (3.67%) 13.24% 10.92% 11.73%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b The Fund's fiscal year-end was changed from Aug. 31 to May 31, effective 1996.
c Six months ended Nov. 30, 1999 (Unaudited).
d Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
e Adjusted to an annual basis.
f Total return does not reflect payment of a sales charge.
</TABLE>
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<TABLE>
<CAPTION>
Fiscal period ended May 31,
Per share income and capital changesa
Class B Class Y
1999c 1999 1998 1997 1996b 1999c 1999 1998 1997 1996b
Net asset value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $3.97 $4.58 $4.39 $4.34 $4.15 $3.97 $4.58 $4.39 $4.34 $4.15
Income from investment operations:
Net investment income (loss) .17 .37 .37 .36 .25 .19 .41 .41 .40 .28
Net gains (losses) (both
realized and unrealized) (.21) (.58) .16 .06 .20 (.21) (.59) .16 .06 .20
Total from investment
operations (.04) (.21) .53 .42 .45 (.02) (.18) .57 .46 .48
Less distributions:
Dividends from net
investment income (.17) (.40) (.34) (.37) (.26) (.19) (.43) (.38) (.41) (.29)
Net asset value,
end of period $3.76 $3.97 $4.58 $4.39 $4.34 $3.76 $3.97 $4.58 $4.39 $4.34
Ratios/supplemental data
Net assets, end of period
(in millions) $1,033 $1,076 $1,046 $613 $270 $1 $1 $2 $-- $--
Ratio of expenses to
average daily net assetsd 1.74%e 1.67% 1.65% 1.68% 1.70%e .83%e .83% .82% .85% .76%e
Ratio of net investment
income (loss) to average
daily net assets 9.11%e 9.11% 8.23% 8.18% 8.34%e 9.76%e 9.93% 10.07% 8.68% 8.24%e
Portfolio turnover rate
(excluding short-term
securities) 19% 47% 81% 92% 61% 19% 47% 81% 92% 61%
Total returnf (.95%) (4.39%) 12.42% 10.07% 11.10% (.54%) (3.58%) 13.42% 11.05% 11.83%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b The Fund's fiscal year-end was changed from Aug. 31 to May 31, effective 1996.
c Six months ended Nov. 30, 1999 (Unaudited).
d Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
e Adjusted to an annual basis.
f Total return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
Financial Statements
Statement of assets and liabilities
High Yield Portfolio
Nov. 30, 1999 (Unaudited)
Assets
Investments in securities, at value (Note 1)
(identified cost $4,035,222,769) $3,582,460,337
Accrued interest and dividends receivable 91,065,797
Receivable for investment securities sold 80,245
------
Total assets 3,673,606,379
-------------
Liabilities
Disbursement in excess of cash on demand deposit 415,268
Payable for investment securities purchased 20,075,599
Accrued investment management services fee 55,767
------
Total liabilities 20,546,634
----------
Net assets $3,653,059,745
==============
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statement of operations
High Yield Portfolio
Six months ended Nov. 30, 1999 (Unaudited)
Investment income
Income:
<S> <C>
Dividends $ 22,201,859
Interest 185,999,071
-----------
Total income 208,200,930
-----------
Expenses (Note 2):
Investment management services fee 10,703,078
Compensation of board members 8,221
Custodian fees 76,100
Audit fees 17,250
Other 204,951
-------
Total expenses 11,009,600
Earnings credits on cash balances (Note 2) (77,392)
-------
Total net expenses 10,932,208
----------
Investment income (loss) -- net 197,268,722
-----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) (71,669,176)
Foreign currency transactions (3,633,441)
----------
Net realized gain (loss) on investments (75,302,617)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (140,281,232)
------------
Net gain (loss) on investments (215,583,849)
------------
Net increase (decrease) in net assets resulting from operations $ (18,315,127)
=============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
High Yield Portfolio
Nov. 30, 1999 May 31, 1999
Six months ended Year ended
(Unaudited)
Operations
<S> <C> <C>
Investment income (loss)-- net $ 197,268,722 $ 394,989,832
Net realized gain (loss) on investments (75,302,617) (127,910,210)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (140,281,232) (413,949,530)
------------ ------------
Net increase (decrease) in net assets resulting from operations (18,315,127) (146,869,908)
Net contributions (withdrawals) from partners (223,222,018) (122,534,167)
------------ ------------
Total increase (decrease) in net assets (241,537,145) (269,404,075)
Net assets at beginning of period 3,894,596,890 4,164,000,965
------------- -------------
Net assets at end of period $3,653,059,745 $3,894,596,890
============== ==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
High Yield Portfolio
(Unaudited as to Nov. 30, 1999)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
High Yield Portfolio (the Portfolio) is a series of Income Trust (the Trust) and
is registered under the Investment Company Act of 1940 (as amended) as a
diversified, open-end management investment company. The Portfolio invests
primarily in long-term corporate bonds in the lower-rating categories, commonly
known as junk bonds. The Declaration of Trust permits the Trustees to issue
non-transferable interests in the Portfolio.
The Portfolio's significant accounting policies are summarized below:
Use of estimates
Preparing financial statements that conform to generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.
Valuation of securities
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Securities for which market quotations are not readily available are valued at
fair value according to methods selected in good faith by the board. Short-term
securities maturing in more than 60 days from the valuation date are valued at
the market price or approximate market value based on current interest rates;
those maturing in 60 days or less are valued at amortized cost.
Option transactions
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Portfolio may buy and write options traded on
any U.S. or foreign exchange or in the over-the-counter market where completing
the obligation depends upon the credit standing of the other party. The
Portfolio also may buy and sell put and call options and write covered call
options on portfolio securities as well as write cash-secured put options. The
risk in writing a call option is that the Portfolio gives up the opportunity for
profit if the market price of the security increases. The risk in writing a put
option is that the Portfolio may incur a loss if the market price of the
security decreases and the option is exercised. The risk in buying an option is
that the Portfolio pays a premium whether or not the option is exercised. The
Portfolio also has the additional risk of being unable to enter into a closing
transaction if a liquid secondary market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Portfolio
will realize a gain or loss when the option transaction expires or closes. When
options on debt securities or futures are exercised, the Portfolio will realize
a gain or loss. When other options are exercised, the proceeds on sales for a
written call option, the purchase cost for a written put option or the cost of a
security for a purchased put or call option is adjusted by the amount of premium
received or paid.
Futures transactions
To gain exposure to or protect itself from market changes, the Portfolio may buy
and sell financial futures contracts traded on any U.S. or foreign exchange. The
Portfolio also may buy and write put and call options on these futures
contracts. Risks of entering into futures contracts and related options include
the possibility of an illiquid market and that a change in the value of the
contract or option may not correlate with changes in the value of the underlying
securities.
Upon entering into a futures contract, the Portfolio is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Portfolio each day. The variation margin payments are
equal to the daily changes in the contract value and are recorded as unrealized
gains and losses. The Portfolio recognizes a realized gain or loss when the
contract is closed or expires.
Foreign currency translations and foreign currency contracts
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
The Portfolio may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate fluctuation.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Portfolio and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Portfolio is subject to the credit risk that
the other party will not complete its contract obligations.
Illiquid securities
As of Nov. 30, 1999, investments in securities included issues that are illiquid
which the Portfolio currently limits to 10% of net assets, at market value, at
the time of purchase. The aggregate value of such securities as of Nov. 30, 1999
was $64,118,063 representing 1.8% of net assets. According to board guidelines,
certain unregistered securities are determined to be liquid and are not included
within the 10% limitation specified above.
Federal taxes
For federal income tax purposes the Portfolio qualifies as a partnership and
each investor in the Portfolio is treated as the owner of its proportionate
share of the net assets, income, expenses and realized and unrealized gains and
losses of the Portfolio. As a "pass-through" entity, the Portfolio therefore
does not pay any income dividends or capital gain distributions.
Other
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date. Interest income,
including level-yield amortization of premium and discount, is accrued daily.
2. FEES AND EXPENSES
The Trust, on behalf of the Portfolio, has an Investment Management Services
Agreement with AEFC to manage its portfolio. Under this agreement, AEFC
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Portfolio's average daily net assets in reducing
percentages from 0.59% to 0.465% annually.
Under the agreement, the Trust also pays taxes, brokerage commissions and
nonadvisory expenses, which include custodian fees, audit and certain legal
fees, fidelity bond premiums, registration fees for units, office expenses,
consultants' fees, compensation of trustees, corporate filing fees, expenses
incurred in connection with lending securities of the Portfolio and any other
expenses properly payable by the Trust or Portfolio and approved by the board.
During the six months ended Nov. 30, 1999, the Portfolio's custodian fees were
reduced by $77,392 as a result of earnings credits from overnight cash balances.
The Portfolio also pays custodian fees to American Express Trust Company, an
affiliate of AEFC.
According to a Placement Agency Agreement, American Express Financial Advisors
Inc. acts as placement agent of the Trust's units.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $678,098,198 and $747,520,445, respectively, for the six
months ended Nov. 30, 1999. For the same period, the portfolio turnover rate was
19%. Realized gains and losses are determined on an identified cost basis.
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
High Yield Portfolio
Nov. 30, 1999 (Unaudited)
(Percentages represent value of investments compared to net assets)
Bonds (84.6%)
Issuer Coupon Principal Value(a)
rate amount
Government obligations (--%)
Govt of Algeria
(U.S. Dollar)
<S> <C> <C> <C> <C> <C>
03-04-00 7.06% $522,727(c) $512,273
Mortgage-backed securities (0.1%)
Federal Home Loan Mtge Corp
08-01-17 7.50 2,820(e) 2,864
Merrill Lynch Mtge Investors
06-15-21 7.88 4,657,548 4,228,180
Total 4,231,044
Aerospace & defense (1.6%)
BE Aerospace
Sr Sub Nts Series B
03-01-08 8.00 10,200,000 8,440,500
Compass Aerospace
Sr Sub Nts
04-15-05 10.13 11,335,000(d) 8,104,525
Fairchild
Company Guaranty
04-15-09 10.75 19,550,000 16,617,500
L-3 Communications
Sr Sub Nts Series B
05-01-07 10.38 6,145,000 6,344,713
Sequa
Sr Nts
08-01-09 9.00 20,750,000 20,646,250
Total 60,153,488
Automotive & related (2.5%)
EV Intl
Company Guaranty Series A
03-15-07 11.00 10,500,000 7,350,000
French (JL) Auto Casting
Sr Sub Nts
06-01-09 11.50 12,900,000(d) 12,738,750
Hayes Lemmerz Intl
Company Guaranty Series B
07-15-07 9.13 10,000,000 9,725,000
Lear
Sr Nts
05-15-09 8.11 20,000,000(d) 18,978,400
MSX Intl
Company Guaranty
01-15-08 11.38 13,110,000 12,323,400
Oxford Automotive
Company Guaranty Series D
06-15-07 10.13 25,120,000 22,670,800
Penda
Sr Nts Series B
03-01-04 10.75 4,500,000 4,353,750
Venture Holdings Trust
Sr Nts Series B
07-01-05 9.50 4,000,000 3,740,000
Total 91,880,100
Banks and savings & loans (0.5%)
Sovereign Bancorp
Sr Nts
11-15-06 10.50 16,400,000 16,543,500
Beverages & tobacco (0.3%)
Canandaigua Brands
Company Guaranty
03-01-09 8.50 12,500,000 11,906,250
Chemicals (1.3%)
Allied Waste North America
Company Guaranty Series B
01-01-06 7.63 4,250,000 3,867,500
01-01-09 7.88 18,675,000 16,620,750
Sr Sub Nts
08-01-09 10.00 4,250,000(d) 3,878,125
Lyondell Chemical
Series B
05-01-07 9.88 9,500,000 9,785,000
Sr Sub Nts
05-01-09 10.88 8,800,000 9,174,000
Sterling Chemicals
Company Guaranty Series B
07-15-06 12.38 5,000,000 5,150,000
Total 48,475,375
Commercial finance (0.4%)
Advance Holding
Zero Coupon Series B
04-15-03 12.45 8,800,000(g) 4,400,000
Netia Holdings
(U.S. Dollar) Company Guaranty Series B
11-01-07 10.25 12,750,000(c) 10,773,750
Total 15,173,750
Communications equipment & services (12.9%)
21st Century Telecom Group
Zero Coupon Sr Disc Nts
02-15-03 14.81 19,300,000(g) 8,878,000
AirGate PCS
Zero Coupon
10-01-04 13.50 16,700(g) 10,145,250
Bestel
(U.S. Dollar) Zero Coupon
05-15-01 12.75 6,400,000(c,g) 4,032,000
Birch Telecom
Sr Nts
06-15-08 14.00 14,000,000 14,210,000
Caprock Communications
Sr Nts Series B
07-15-08 12.00 17,000,000 17,085,000
Celcaribe
Sr Nts
03-15-04 13.50 11,150,000 8,139,500
Covad Communications Group
Sr Nts
02-15-09 12.50 10,000,000 10,300,000
Crown Castle Intl
Zero Coupon Sr Disc Nts
08-01-04 11.30 14,750,000(d,g) 8,997,500
Dobson/Sygnet Communications
Sr Nts
12-15-08 12.25 16,000,000 17,600,000
EchoStar DBS
Sr Nts
02-01-09 9.38 41,015,000 41,271,344
Esprit Telecom Group
(U.S. Dollar) Sr Nts
12-15-07 11.50 17,900,000(c) 18,168,500
06-15-08 10.88 17,000,000(c) 16,745,000
GST Equipment Funding
Sr Nts
05-01-07 13.25 6,750,000 6,648,750
GST Network Funding
Zero Coupon Sr Disc Nts
05-01-03 10.50 15,000,000(g) 7,518,750
GST Telecommunications
Sr Sub Nts
11-15-07 12.75 6,750,000 6,615,000
Jordan Telecommunications Products
Sr Nts Series B
08-01-07 9.88 25,950,000 25,431,000
Zero Coupon Sr Disc Nts Series B
08-01-00 10.04 21,900,000(g) 18,834,000
KMC Telecom Holdings
Sr Nts
05-15-09 13.50 12,000,000(d) 11,880,000
Zero Coupon Sr Disc Nts
02-15-03 12.68 12,000,000(g) 6,390,000
MJD Communications
Sr Sub Nts Series B
05-01-08 9.50 5,525,000 4,972,500
NTL
Zero Coupon Sr Nts Series B
02-01-01 11.40 40,000,000(g) 35,800,000
PhoneTel Technologies
Sr Nts
12-15-06 12.00 23,500,000(b) 3,995,000
Price Communications Wireless
Company Guaranty Series B
12-15-06 9.13 24,700,000 25,132,250
RCN
Zero Coupon Sr Disc Nts Series B
02-15-03 9.80 7,500,000(g) 4,893,750
Rhythms Net Connections
Sr Nts
04-15-09 12.75 10,000,000 9,500,000
Spectrasite Holdings
Zero Coupon Sr Disc Nts
04-15-04 11.25 17,200,000(g) 8,944,000
Tele1 Europe
(U.S. Dollar) Sr Nts
05-15-09 13.00 8,000,000(c,d) 8,200,000
Telehub Communications
Zero Coupon Company Guaranty
07-31-01 13.88 12,000,000(g) 1,200,000
Triton Communications
Zero Coupon Company Guaranty
05-01-03 10.86 22,000,000(g) 15,537,500
Unisite
Zero Coupon Sub Nts
12-15-00 13.00 9,000,000(d,g,i) 11,480,400
Versatel Telecom
(U.S. Dollar) Sr Nts
05-15-08 13.25 16,600,000(c) 17,513,000
Vialog
Company Guaranty
11-15-01 12.75 22,600,000 15,820,000
Voicestream Wire
Sr Nts
11-15-09 10.38 8,700,000(d) 9,069,750
Zero Coupon Sr Disc Nts
11-15-04 11.88 17,600,000(d,g) 10,736,000
Williams Communication Group
Sr Nts
10-01-09 10.88 15,000,000 15,712,500
Worldwide Fiber
Sr Nts
08-01-09 12.00 16,000,000(d) 16,380,000
Total 473,776,244
Computers & office equipment (2.4%)
Concentric Network
Sr Nts
12-15-07 12.75 5,600,000 5,901,000
Cooperative Computing
Sr Sub Nts
02-01-08 9.00 20,250,000 14,782,500
Decisionone Holdings
Zero Coupon
08-01-02 9.89 8,450,000(b,g) 10,563
Globix
Sr Nts
05-01-05 13.00 22,220,000 21,608,950
PSINet
Sr Nts
12-01-06 10.50 3,050,000(d) 3,076,688
11-01-08 11.50 6,500,000 6,776,250
Sr Nts Series B
02-15-05 10.00 15,275,000 15,198,625
Verio
Sr Nts
04-01-05 10.38 7,000,000 7,035,000
12-01-08 11.25 11,000,000(d) 11,495,000
Total 85,884,576
Electronics (0.7%)
Hyundai Semiconductor
(U.S. Dollar) Sr Nts
05-15-07 8.63 13,650,000(c,d) 10,957,196
Metromedia Fiber Network
Sr Nts Series B
11-15-08 10.00 13,750,000 13,956,250
Total 24,913,446
Energy (3.4%)
Canadian Forest Oil
(U.S. Dollar) Company Guaranty
09-15-07 8.75 14,500,000(c) 13,920,000
Clark R&M
Sr Sub Nts
11-15-07 8.88 10,100,000 6,464,000
Energy Corp of America
Sr Sub Nts Series A
05-15-07 9.50 9,000,000 5,220,000
HS Resources
Company Guaranty
11-15-06 9.25 4,250,000 4,196,875
Sr Sub Nts
12-01-03 9.88 9,700,000 9,687,875
Sr Sub Nts Series B
11-15-06 9.25 8,000,000 7,900,000
Hurricane Hydrocarbons
(U.S. Dollar) Sr Nts
11-01-04 11.75 15,750,000(b,c,d) 8,190,000
Lodestar Holdings
Company Guaranty
05-15-05 11.50 18,350,000 10,276,000
Michael Petroleum
Sr Nts Series B
04-01-05 11.50 6,000,000(b) 2,880,000
Nuevo Energy
Sr Sub Nts
06-01-08 9.50 12,000,000(d) 12,000,000
Ocean Energy
Company Guaranty Series B
07-01-08 8.38 14,000,000 13,790,000
Rayovac
Sr Sub Nts Series B
11-01-06 10.25 11,814,000 12,552,375
Roil
(U.S. Dollar)
12-05-02 12.78 4,368,000(c,d) 3,363,360
Tesoro Petroleum
Company Guaranty Series B
07-01-08 9.00 14,250,000 13,680,000
Total 124,120,485
Energy equipment & services (0.9%)
DI Inds
Sr Nts
07-01-07 8.88 6,000,000 5,460,000
Grey Wolf
Company Guaranty Series C
07-01-07 8.88 1,750,000 1,596,875
Northern Offshore
(U.S. Dollar) Company Guaranty Series B
05-15-05 10.00 21,000,000(c) 12,600,000
Plains Resources
Company Guaranty Series D
03-15-06 10.25 9,000,000 8,460,000
Seven Seas Petroleum
Sr Nts Series B
05-15-05 12.50 8,000,000 3,600,000
Total 31,716,875
Financial services (2.3%)
AOA Holdings LLC
Sr Nts
06-01-06 10.38 15,500,000(d) 15,441,875
Arcadia Financial
Sr Nts
03-15-07 11.50 30,165,000 30,448,200
Gemini Inds
12-23-01 13.50 13,567,500(b,i) 6,783,750
Omnipoint Midwest Holding
12-31-06 9.40 4,250,000 4,037,500
12-31-06 10.00 8,500,000 8,075,000
ONO Finance
(U.S. Dollar) Company Guaranty
05-01-09 13.00 4,070,000(c,d) 4,232,800
RBF Finance
Company Guaranty
03-15-09 11.38 12,375,000 13,303,125
Total 82,322,250
Food (0.6%)
Ameriserve Food Distributions
Company Guaranty
10-15-06 8.88 5,100,000 2,703,000
07-15-07 10.13 6,125,000 1,837,500
Aurora Foods
Sr Sub Nts Series D
02-15-07 9.88 10,000,000 10,250,000
Daya Guna
(U.S. Dollar) Company Guaranty
06-01-07 10.00 3,690,000(c,d) 2,214,000
RAB Enterprises
Company Guaranty
05-01-05 10.50 9,600,000 6,528,000
Total 23,532,500
Health care (0.6%)
Alaris Medical
Zero Coupon Sr Disc Nts
08-01-03 11.12 16,000,000(g) 7,040,000
Alaris Medical Systems
Company Guaranty
12-01-06 9.75 16,450,000 13,653,500
Total 20,693,500
Health care services (3.2%)
Abbey Healthcare Group
Sr Sub Nts
11-01-02 9.50 25,750,000 24,591,250
Fountain View
Company Guaranty Series B
04-15-08 11.25 8,600,000 6,536,000
Genesis Health Ventures
Sr Sub Nts
10-01-06 9.25 9,725,000 3,403,750
Hanger Orthopedic Group
Sr Sub Nts
06-15-09 11.25 9,600,000(d) 9,456,000
Magellan Health Services
Sr Sub Nts
02-15-08 9.00 15,000,000 12,150,000
Oxford Health Plans
Sr Nts
05-15-05 11.00 13,000,000 12,350,000
Paracelsus Healthcare
Sr Sub Nts
08-15-06 10.00 17,600,000 9,680,000
Physician Sales & Service
Company Guaranty
10-01-07 8.50 15,250,000 15,364,375
Tenet Healthcare
Sr Sub Nts Series B
12-01-08 8.13 17,050,000 15,728,625
Triad Hospitals Holdings
Sr Sub Nts
05-15-09 11.00 6,050,000(d) 6,292,000
Total 115,552,000
Household products (0.3%)
Scotts
Sr Sub Nts
01-15-09 8.63 10,385,000(d) 10,021,525
Industrial equipment & services (1.8%)
Blount
Company Guaranty
06-15-05 7.00 14,700,000 12,495,000
Fairfield Mfg
Sr Sub Nts
10-15-08 9.63 13,600,000 12,920,000
Grove Holdings/Capital
Zero Coupon
05-01-03 11.63 4,000,000(g) 440,000
Grove Inds
05-01-10 14.50 3,342,730 334,273
Motor & Gears
Sr Nts Series D
11-15-06 10.75 30,500,000 28,365,000
Thermadyne Holdings
Zero Coupon
06-01-03 12.50 12,000,000(g) 5,520,000
Thermadyne Mfg
Company Guaranty
06-01-08 9.88 5,000,000 4,300,000
Total 64,374,273
Insurance (0.4%)
Americo Life
Sr Sub Nts
06-01-05 9.25 15,000,000 14,887,500
Leisure time & entertainment (6.0%)
Alliance Atlantis Communications
(U.S. Dollar) Sr Sub Nts
12-15-09 13.00 15,000,000(c) 14,925,000
Coast Hotels & Casino
Company Guaranty
04-01-09 9.50 9,235,000 8,865,600
Hammons (JQ) Hotels
1st Mtge
02-15-04 8.88 12,000,000 11,040,000
Hollywood Casino Shreveport
1st Mtge
08-01-06 13.00 8,900,000(d) 9,456,250
Hollywood Park
Company Guaranty Series B
02-15-07 9.25 10,000,000 9,900,000
Horseshoe Gaming Holding
Company Guaranty
05-15-09 8.63 16,550,000 15,805,250
Icon Health & Fitness
Company Guaranty
09-27-05 12.00 5,550,000(d) 2,997,000
Isle of Capri Casinos/Capital
1st Mtge Series B
08-31-04 13.00 15,750,000 17,088,750
Lodgenet Entertainment
Sr Nts
12-15-06 10.25 15,000,000 15,150,000
Premier Cruises
Sr Nts
03-15-08 11.00 11,000,000(b,d,h) --
Premier Parks
Sr Nts
04-01-06 9.25 10,000,000 9,775,000
06-15-07 9.75 13,650,000 13,581,750
Regal Cinemas
Sr Sub Nts
06-01-08 9.50 13,000,000 10,530,000
12-15-10 8.88 17,250,000 13,196,250
Trump Atlantic City Assn/Funding
1st Mtge Company Guaranty
05-01-06 11.25 26,945,000 22,094,900
Trump Holdings & Funding
Sr Nts
06-15-05 15.50 28,050,000 25,385,250
United Artists Theatres
Series 1995A
07-01-15 9.30 13,071,216 9,520,028
Sr Sub Nts Series B
04-15-08 9.75 27,000,000 5,130,000
Venetian Casino/LV Sands
Company Guaranty
11-15-05 14.25 6,000,000 3,360,000
Total 217,801,028
Media (9.4%)
Adelphia Communications
Sr Deb
09-15-04 11.88 5,000,000 5,225,000
Sr Nts
11-15-00 9.38 14,000,000 13,877,500
Sr Nts Series B
02-01-08 8.38 9,500,000 8,977,500
AMFM
Company Guaranty
11-01-08 8.00 35,550,000 35,638,874
Zero Coupon Sr Disc Nts
02-01-02 7.49 8,000,000(g) 6,980,000
Australis Holdings
(U.S. Dollar) Zero Coupon Sr Disc Nts
11-01-00 13.35 17,900,000(b,c,g) 179,000
Australis Media
(U.S. Dollar)
11-01-00 14.00 1,785,504(b,c) 1,600,342
(U.S. Dollar) Zero Coupon
05-15-00 12.32 43,500,000(b,c,g) 4,350
05-15-00 13.83 469,560(b,c,g) 2,348
Benedek Communications
Zero Coupon Sr Disc Nts
05-15-01 13.89 13,500,000(g) 12,217,500
Big City Radio
Zero Coupon Company Guaranty
03-15-01 11.25 10,000,000(g) 7,075,000
Bresnan Communications
Sr Nts Series B
02-01-09 8.00 9,050,000 9,095,250
CBS Radio
Pay-in-kind Sub Deb
01-15-09 11.38 9,475,300(j) 10,612,336
Central Euro Media
(U.S. Dollar) Sr Nts
08-15-04 9.38 12,175,000(c) 4,748,250
Coaxial Communications/Phoenix
Company Guaranty
08-15-06 10.00 10,000,000 9,825,000
Globo Communicacoes Participacoes
(U.S. Dollar) Sr Nts
12-05-08 10.63 15,000,000(c,d) 12,056,250
Golden Sky Systems
Company Guaranty Series B
08-01-06 12.38 8,500,000 8,585,000
MDC Communications
(U.S. Dollar) Sr Sub Nts
12-01-06 10.50 16,350,000(c) 16,390,875
Outdoor Systems
Company Guaranty
10-15-06 9.38 10,000,000 10,475,000
06-15-07 8.88 20,755,000 21,429,537
Paxson Communications
Sr Sub Nts
10-01-02 11.63 14,700,000 15,251,250
Pegasus Media & Communications
Series B
07-01-05 12.50 15,400,000 16,709,000
Sr Nts Series B
10-15-05 9.63 11,100,000 11,044,500
Price Communications Wireless
Sr Sub Nts
07-15-07 11.75 10,000,000 11,000,000
Radio Unica
Zero Coupon Company Guaranty
08-01-02 11.74 13,000,000(g) 8,482,500
Regional Independent Medical
(U.S. Dollar) Sr Nts
07-01-08 10.50 15,200,000(c) 15,162,000
Sinclair Broadcast Group
Sr Sub Nts
12-15-07 8.75 1,800,000 1,678,500
Company Guaranty
07-15-07 9.00 2,550,000 2,390,625
Susquehanna Media
Sr Sub Nts
05-15-09 8.50 6,395,000 6,267,100
Telemundo Holdings
Zero Coupon Sr Disc Nts Series B
08-15-03 11.50 17,000,000(g) 9,690,000
TeleWest Communications
(U.S. Dollar) Sr Nts
11-01-08 11.25 8,000,000(c) 8,660,000
(U.S. Dollar) Zero Coupon
10-01-00 11.64 7,000,000(c,g) 6,483,750
(U.S. Dollar) Zero Coupon Sr Disc Nts
04-15-04 8.96 13,725,000(c,d,g) 8,749,688
Veninfotel
(U.S. Dollar) Cv Pay-in-kind
03-01-02 10.00 10,418,625(c,i,j) 15,627,938
WRC Media/Weekly Read/JLC
11-15-09 12.75 12,500,000(d) 12,375,000
Total 344,566,763
Metals (2.4%)
AK Steel
Company Guaranty
02-15-09 7.88 15,000,000 14,250,000
EnviroSource
Sr Nts
06-15-03 9.75 26,648,000 16,055,420
Great Lakes Acquisition
Zero Coupon Series B
05-15-03 21.06 6,500,000(g) 3,079,375
Imexsa Export Trust
(U.S. Dollar)
05-31-03 10.13 7,947,481(c,d) 7,788,531
Maxxam Group Holdings
Sr Nts Series B
08-01-03 12.00 12,000,000 11,400,000
Ormet
Company Guaranty
08-15-08 11.00 17,000,000(d) 15,130,000
Pen Holdings
Company Guaranty Series B
06-15-08 9.88 10,625,000 10,040,625
Sheffield Steel
1st Mtge Series B
12-01-05 11.50 10,200,000 8,415,000
Total 86,158,951
Miscellaneous (10.6%)
Adams Outdoor Advertising
Sr Nts
03-15-06 10.75 10,800,000 11,313,000
Advanced Glassfiber Yarn
Sr Sub Nts
01-15-09 9.88 17,720,000 16,125,200
Argo-Tech
Company Guaranty
10-01-07 8.63 5,750,000 4,894,688
Company Guaranty Series D
10-01-07 8.63 13,000,000 11,082,500
Bistro Trust
Sub Nts
12-31-02 9.50 10,000,000(d) 9,402,000
Booth Creek Ski Holdings
Sr Nts Series B
03-15-07 12.50 4,500,000 3,228,750
Centaur Mining & Exploration
(U.S. Dollar) Company Guaranty
12-01-07 11.00 11,500,000(c) 11,270,000
Charter Communications Holdings LLC
Sr Nts
04-01-09 8.63 15,200,000 14,402,000
Comforce Operating
Sr Nts Series B
12-01-07 12.00 4,750,000 3,408,125
Consolidated Container
Sr Sub Nts
07-15-09 10.13 17,900,000(d) 18,034,250
Cybernet Internet Service
Sr Nts
07-01-09 14.00 10,250,000(i) 8,968,750
Dura Operating
Company Guaranty Series B
05-01-09 9.00 9,000,000 8,370,000
ECM Funding LP
06-10-02 11.92 1,079,825(i) 1,077,125
Equinix
12-01-07 13.00 17,000,000(d) 17,000,000
Falcon Products
Company Guaranty Series B
06-15-09 11.38 15,250,000 14,411,250
Great Central Mines
(U.S. Dollar) Sr Nts
04-01-08 8.88 10,000,000(c) 8,950,000
ISG Resources
04-15-08 10.00 17,445,000 15,351,600
Knology Holdings
Zero Coupon Sr Disc Nts
10-15-02 12.14 6,600,000(g) 3,927,000
Nebco Evans Holding
Zero Coupon Sr Disc Nts
07-15-02 34.18 8,500,000(g) 1,190,000
Nextel Partners
Zero Coupon Sr Disc Nts
02-01-04 13.78 47,900,000(g) 31,254,749
Norcal Waste Systems
Company Guaranty Series B
11-15-05 13.50 20,300,000 21,924,000
NSM Steel
Company Guaranty
02-01-06 12.00 7,739,335(b,d) 464,360
02-01-08 12.25 11,700,000(b,d) 234,000
NTEX
(U.S. Dollar) Sr Nts
06-01-06 11.50 6,900,000(c) 2,898,000
Outsourcing Solutions
Sr Sub Nts Series B
11-01-06 11.00 37,395,000 36,273,149
Panolam Inds
Sr Sub Nts
02-15-09 11.50 4,450,000(d) 4,527,875
Park-Ohio Inds
Sr Sub Nts
12-01-07 9.25 19,025,000 18,311,563
Pierce Leahy Command
Company Guaranty
05-15-08 8.13 25,150,000 23,106,563
Poland Telecom Finance
(U.S. Dollar) Company Guaranty Series B
12-01-07 14.00 16,500,000(c) 12,375,000
Riviera Black Hawk
1st Mtge
06-01-05 13.00 10,425,000(d) 10,868,063
SC Intl
09-01-07 9.25 17,650,000 15,929,125
SFC New Holdings
Sr Nts
08-15-01 11.25 15,000,000 14,400,000
SFC Sub Inc
Zero Coupon
12-15-05 11.00 718,404(b,g) 72
Stellex Inds
Sr Sub Nts Series B
11-01-07 9.50 11,450,000 8,244,000
Talton Holdings
Company Guaranty Sr Nts Series B
06-30-07 11.00 3,650,000 3,449,250
Total 386,666,007
Multi-industry conglomerates (1.0%)
Communications & Power Inds
Sr Sub Nts Series B
08-01-05 12.00 10,000,000 8,100,000
Jordan Inds
Sr Nts Series D
08-01-07 10.38 10,410,000 10,097,700
Zero Coupon Sr Sub Debs Series B
04-01-02 11.75 17,692,251(g) 11,499,963
Metromedia Intl Group
Sr Disc Nts Series B
09-30-07 10.50 5,826,000 2,738,220
Prime Succession
Sr Sub Nts
08-15-04 10.75 13,475,000 5,390,000
Total 37,825,883
Paper & packaging (7.2%)
Bear Island LLC/Finance
Sr Nts Series B
12-01-07 10.00 6,875,000 6,531,250
Berry Plastics
Sr Sub Nts
04-15-04 12.25 3,250,000(d) 3,404,375
07-15-07 11.00 7,100,000(d) 6,975,750
BPC Holding
Sr Nts Series B
06-15-06 12.50 11,750,000 10,839,375
Crown Paper
Sr Sub Nts
09-01-05 11.00 18,025,000 12,617,500
Doman Inds
(U.S. Dollar)
03-15-04 8.75 14,625,000(c) 12,431,250
(U.S. Dollar) Company Guaranty
07-01-04 12.00 9,750,000(c) 10,140,000
(U.S. Dollar) Sr Nts Series B
11-15-07 9.25 3,500,000(c) 2,738,750
Gaylord Container
Sr Nts
06-15-07 9.75 6,000,000 5,760,000
02-15-08 9.88 32,500,000 28,518,750
Sr Nts Series B
06-15-07 9.38 3,750,000 3,506,250
Graham Packaging/GPC Capital
Zero Coupon Sr Disc Nts Series B
01-15-03 11.57 6,900,000(g) 4,579,875
Grupo Industrial Durango
(U.S. Dollar)
08-01-03 12.63 5,000,000(c) 5,012,500
Packaging Corp of America
Company Guaranty
04-01-09 9.63 9,905,000 10,202,150
Repap New Brunswick
(U.S. Dollar)
06-01-04 11.50 7,500,000(c) 7,668,750
(U.S. Dollar) Sr Nts
06-01-04 9.00 19,900,000(c) 19,551,750
04-15-05 10.63 18,550,000(c) 17,297,875
Riverwood Intl
Company Guaranty
08-01-07 10.63 5,500,000 5,720,000
04-01-08 10.88 10,000,000 10,000,000
Company Guaranty Sr Nts
04-01-06 10.25 15,000,000 15,375,000
Silgan Holdings
06-01-09 9.00 13,250,000 12,521,250
Pay-in-kind
07-15-06 13.25 5,621,000(j) 6,084,733
Stone Container
Sr Nts
08-01-16 12.58 9,000,000 9,247,500
Tjiwi Kimia Intl
(U.S. Dollar) Company Guaranty
08-01-01 13.25 7,000,000(b,c) 6,195,000
Warren (SD)
Pay-in-kind
12-15-06 14.00 27,690,869(j) 31,706,045
Total 264,625,678
Restaurants & lodging (1.4%)
American Restaurant Group
Company Guaranty Series B
02-15-03 11.50 9,000,000 6,750,000
Domino's
Company Guaranty Series B
01-15-09 10.38 16,325,000 15,467,938
Florida Panthers Holdings
Company Guaranty
04-15-09 9.88 11,000,000 10,560,000
Prime Hospitality
Sr Sub Nts Series B
04-01-07 9.75 18,700,000 18,045,500
Total 50,823,438
Retail (1.5%)
Amazon.com
Zero Coupon Sr Disc Nts
05-01-03 10.00 11,500,000(g) 7,590,000
Dairy Mart Convenience Stores
Sr Sub Nts
03-15-04 10.25 17,675,000 14,935,375
Sr Sub Nts Series B
03-15-04 10.25 6,250,000 5,281,250
Maxim Group
Company Guaranty Series B
10-15-07 9.25 12,500,000(b) 10,593,750
Musicland Group
Company Guaranty Series B
03-15-08 9.88 16,750,000 14,195,625
Rite Aid
Cv Sub Nts
09-15-02 5.25 4,000,000 2,010,000
Total 54,606,000
Textiles & apparel (0.9%)
Anvil Knitwear
Sr Nts Series B
03-15-07 10.88 14,000,000 10,220,000
Galey & Lord
Company Guaranty
03-01-08 9.13 20,050,000 4,611,500
GFSI
Sr Sub Nts Series B
03-01-07 9.63 13,000,000 7,800,000
GFSI Holdings
Zero Coupon Sr Disc Nts Series B
09-15-04 10.77 17,300,000(g) 5,190,000
Steel Heddle Group
Zero Coupon Series B
06-01-03 13.74 6,200,000(g) 922,250
Steel Heddle Mfg
Company Guaranty Series B
06-01-08 10.63 4,600,000 2,530,000
Total 31,273,750
Transportation (1.2%)
American Architectural
Company Guaranty
12-01-07 11.75 10,000,000 3,500,000
Autopistas Del Sol
(U.S. Dollar) Sr Nts
08-01-09 10.25 10,800,000(c,d) 8,370,000
Enterprises Shipholding
(U.S. Dollar) Sr Nts
05-01-08 8.88 21,305,000(c) 12,676,475
Global Ocean Carriers
Sr Nts
07-15-07 10.25 13,500,000(b) 3,780,000
Greater Beijing First Expressways
(U.S. Dollar) Sr Nts
06-15-04 9.25 3,500,000(c) 1,575,000
06-15-07 9.50 5,000,000(c) 2,150,000
Hermes Europe RailTel
(U.S. Dollar) Sr Nts
01-15-09 10.38 10,500,000(c) 10,342,500
Total 42,393,975
Utilities -- gas (0.2%)
Leviathan Gas
Company Guaranty Series B
06-01-09 10.38 8,400,000 8,736,000
Utilities -- telephone (6.6%)
Allegiance Telecom
Zero Coupon Sr Disc Nts Series B
02-15-03 11.99 30,450,000(g) 21,467,250
AT&T Canada
(U.S. Dollar) Sr Nts
08-15-07 12.00 8,750,000(c) 10,106,250
(U.S. Dollar) Zero Coupon Sr Disc Nts
11-01-02 10.74 8,300,000(c,g) 6,847,500
06-15-03 9.96 16,000,000(c,g) 12,480,000
COLT Telecommunications Group
(U.S. Dollar) Zero Coupon
12-15-01 12.00 8,500,000(c,g) 7,458,750
Energis
(U.S. Dollar)
06-15-09 9.75 8,175,000(c,d) 8,420,250
Geotek Communications
Cv Sr Sub Nts
02-15-01 12.00 4,135,000(b) 5,169
Intermedia Communications
Sr Nts Series B
11-01-07 8.88 11,025,000 10,253,250
06-01-08 8.60 2,400,000 2,190,000
Zero Coupon Sr Disc Nts Series B
07-15-02 10.65 22,375,000(g) 16,333,750
ITC Deltacom
Sr Nts
03-01-08 8.88 17,250,000 16,732,500
11-15-08 9.75 4,500,000 4,590,000
McLeod USA
Sr Nts
03-15-08 8.38 7,680,000 7,276,800
02-15-09 8.13 13,000,000 12,187,500
Omnipoint Communications
Sr Nts
08-15-06 11.63 22,400,000 23,911,999
Paging Network
Sr Sub Nts
02-01-06 8.88 8,500,000 2,805,000
08-01-07 10.13 7,950,000 2,623,500
Panamsat Intl Systems
Pay-in-kind
04-15-05 12.75 4,000(j) 4,360
Primus Telecommunications Group
Sr Nts
08-01-04 11.75 11,550,000 11,434,500
01-15-09 11.25 4,250,000 3,995,000
Sr Nts Series B
05-15-08 9.88 10,000,000 8,950,000
Pronet
Sr Sub Nts
06-15-05 11.88 19,350,000 13,158,000
RSL Communications
(U.S. Dollar) Company Guaranty
11-15-06 12.25 10,167,000(c) 10,319,505
11-15-08 10.50 1,875,000(c) 1,790,625
11-15-09 9.88 7,700,000(c) 6,776,000
United Pan-Europe Communications
(European Monetary Unit) Sr Nts
11-01-09 11.25 8,500,000(c,i) 8,776,250
(U.S. Dollar) Sr Nts
08-01-09 10.88 10,200,000(c,d) 10,480,500
Total 241,374,208
Total bonds
(Cost: $3,490,691,528) $3,087,522,635
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Common stocks (2.2%)
Issuer Shares Value(a)
<S> <C> <C>
Arena Brands 111,111(b,i) $2,555,553
Celcaribe 1,812,990(b,d) 1,812,990
Communications & Power Inds 3,500(b) 525,000
Concentric Network 300,000(b) 8,531,250
Earthwatch 314,426(b,d) 707,459
Gaylord Container Cl A 1,000,000(b) 6,250,000
Global TeleSystems Group 215,400(b) 6,879,338
Intermedia Communications 311,942(b) 8,695,383
Jack in the Box 21,000(b) 442,313
Nextel Communications Cl A 41,056(b) 4,069,676
OpTel 17,000(b,d) 170
Pagemart Nationwide 50,750(b) 203,000
Pegasus Communications 16,923(b) 1,110,572
Premier Holdings 814,645 3,054,918
Price Communications 840,211(b) 21,057,787
Specialty Foods 300,000(b) 75,000
Versatel Telecom Intl ADR 200,000(b,c) 5,500,000
Weatherford Intl 170,580(b) 5,959,639
Wilshire Financial Services Group 2,412,000(b) 3,015,000
Wilshire Real Estate Investment Trust 140,000 306,250
Wireless One 25,000(b) 32,500
Total common stocks
(Cost: $89,931,253) $80,783,798
Preferred stocks & other (9.2%)
Issuer Shares Value(a)
21st Century Telecom Group
13.75% Pay-in-kind 3,301(j) $1,650,500
Warrants 2,600 26,000
Adelphia Business Solutions
Pay-in-kind 5,810(j) 5,403,300
Allegiance Telecom
Warrants 30,450 2,892,750
American Mobile Satellite
Warrants 8,000(d) 400,000
American Restaurant Group
12.00% Pay-in-kind Series B 4,155(j) 3,324,000
Warrants 3,500 35
APP Finance II Mauritius Cl B
12.00% 22,600(b,c) 14,690,000
Australis Holdings
Warrants 13,400(c) 134
Bar Technologies
Warrants 10,000 200,000
Belco Oil & Gas
6.50% Cv 210,000 3,360,000
Bell Technology
Warrants 19,525 1,952,500
Benedek Communications
11.50% Pay-in-kind 7,000(b,j) 5,600,000
Warrants 70,000 140,000
Bestel
Warrants 10,400 312,000
Birch Telecom
Warrants 14,000 77,000
Capstar Broadcasting
12.00% Pay-in-kind Exchangeable 50,562(j) 5,966,316
Capstar Communications
12.63% Pay-in-kind Series E 68,630(j) 8,098,340
Century Maintenance
13.25% Pay-in-kind Series C 136,096(j) 13,745,696
Clark Materials Handling
13.00% 7,621(b) 2,286,300
Clearnet Communications
Warrants 42,240 633,600
Communications & Power Inds
14.00% Pay-in-kind Series B 213,634(j) 17,304,323
Concentric Network
13.50% Pay-in-kind Series B 13,539(j) 12,658,965
Crown Packaging
Warrants 10,000(h) --
CSC Holdings
11.13% Pay-in-kind Series M 348,681(j) 37,831,889
11.75% Pay-in-kind Series H 159,224(j) 17,594,252
Cybernet Internet
Warrants 10,250 1,127,500
Dairy Mart
Warrants 311,333 108,967
Dobson Communications
13.00% Pay-in-kind 10,817(j) 11,628,275
Fairfield Mfg
11.25% Pay-in-kind 6,580(b,j) 6,514,199
Geotek Communications
Warrants 872,500 1
HarCor Energy
Warrants 110,000 55,000
Hemmeter Enterprises
Warrants 36,000(h) --
HF Holdings
Warrants 53,125(h) --
Hosiery Corp of America
Warrants 10,000 400,000
Intermedia Communications
7.00% Cv Series F 240,000(b) 5,280,000
13.50% Pay-in-kind Series B 19,910(j) 18,914,500
Warrants 22,750 2,451,313
Intl Wireless Communications
Warrants 14,750 148
Iridium World Communications
Warrants 17,150 172
Jitney-Jungle Stores of America Cl A
15.00% 109,500 109,500
KMC Telecom Holdings
Warrants 12,000 36,000
Knology Holdings
Warrants 11,000 22,000
Lady Luck Gaming
Pay-in-kind 50,000(b,i,j) 2,000,000
Liberty Group Publishing
14.75% Cv 19,097(b) 420,134
MetroNet Communications
Warrants 8,750 1,116,336
Nakornthai Strip Mill
Warrants 7,407,184 7
Nebco Evans Holdings
11.25% Pay-in-kind 137,299(j) 1,647,588
Nextel Communications
11.13% Pay-in-kind Series E 7,882(j) 8,039,640
13.00% Pay-in-kind Series D 21,853(j) 23,601,240
North Atlantic Trading
12.00% Pay-in-kind 1(b,d,j) 18
NTL
13.00% Pay-in-kind Series B 27,557(j) 28,452,602
ONO Finance
Value Ctfs 4,070(c,d,i) 244,200
Packaging Corp of America
12.38% Pay-in-kind 44,968(j) 4,901,512
Paxson Communications
12.50% Pay-in-kind Exchangeable 245,072(b,j) 24,997,344
Pegasus Communications
12.75% Pay-in-kind 62,500(b,j) 7,000,000
12.75% Pay-in-kind Series A 3,653(b,j) 3,872,180
PLD Telekom
Warrants 4,000(b) 200
Warrants 4,000 200
Poland Telecom
Warrants 16,500(c) 907,500
Primus Telecommunications
Warrants 11,550 288,750
R&B Falcon
13.88% Cm Pay-in-kind 432(d,j) 450,360
Warrants 12,000(d) 3,360,000
RSL Communications
Warrants 9,500 888,250
SGW Holding
12.50% Pay-in-kind Series B 144,980(b,i,j) 2,464,660
Cv Series A 87,091(b,i) 899,940
Warrants 2,750 870,375
Sinclair Capital
11.63% 140,000 13,720,000
Tele1 Europe
Warrants 8,000(d) 640,000
Telehub Communications
Warrants 12,000 60,000
Unifi Communications
Warrants 10,000 100
Unisite
Cl C 5,938(i) 3,239,452
Warrants 4,504(i) 45
Vialog
Warrants 22,600 836,200
Wireless One
Warrants 23,250 233
Total preferred stocks & other
(Cost: $378,130,394) $337,714,541
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (2.1%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (1.5%)
Federal Home Loan Mtge Corp Disc Nts
<S> <C> <C> <C> <C> <C>
12-14-99 5.28% $1,000,000 $997,952
12-16-99 5.26 900,000 897,792
12-16-99 5.26 5,000,000 4,987,735
12-20-99 5.22 1,700,000 1,695,089
01-10-00 5.60 4,900,000 4,866,795
02-01-00 5.59 5,600,000 5,541,004
02-04-00 5.59 10,400,000 10,285,219
Federal Natl Mtge Assn Disc Nts
12-07-99 5.25 16,000,000 15,983,200
12-13-99 5.25 7,900,000 7,884,480
Total 53,139,266
Commercial paper (0.6%)
Bell Atlantic
01-12-00 5.88 7,900,000 7,844,893
Electronic Data Systems
12-01-99 5.70 8,300,000(f) 8,298,686
GTE Funding
01-18-00 5.94 5,300,000 5,257,077
Natl Rural Utilities
12-02-99 5.30 1,900,000 1,899,441
Total 23,300,097
Total short-term securities
(Cost: $76,469,594) $76,439,363
Total investments in securities
(Cost: $4,035,222,769)(k) $3,582,460,337
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing. For long-term debt securities, item identified is in
default as to payment of interest and/or principal.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated. As of Nov. 30,
1999, the value of foreign securities represented 13.69% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(e) Adjustable rate mortgage; interest rate varies to reflect current market
conditions; rate shown is the effective rate on Nov. 30, 1999.
(f) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(g) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to interest reset date disclosed.
(h) Negligible market value.
(i) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Nov. 30, 1999, is as follows:
Security Acquisition Cost
dates
Arena Brands
Common 09-03-92 $5,888,888
Cybernet Internet Service
14.00% Sr Nts 2009 11-04-99 10,250,000
ECM Funding LP
11.92% 2002 04-13-92 1,277,510
Gemini Inds
13.50% 2001 12-23-96 13,500,000
Lady Luck Gambling
Pay-in-kind Preferred 11-19-98 1,750,000
SGW Holdings
12.50% Pay-in-kind
Series B Preferred 08-12-97 thru 08-31-99 2,332,663
Cv Series A Preferred 08-12-97 899,998
Unisite
Cl C Preferred 12-17-97 2,750,066
Warrants 12-17-97 --
13.00% Zero Coupon
Sub Nts 2000* 12-18-97 9,000,000
United Pan-Europe Communications
(European Monetary Unit)
11.25% Sr Nts 2009* 10-25-99 8,437,270
Veninfotel
(U.S. Dollar) 10.00%
Cv Pay-in-kind 2002 03-05-97 thru 09-01-98 9,450,000
Voicestream Wire
10.38% Sr Nts 2009* 11-05-99 8,700,000
11.88% Zero Coupon
Sr Disc Nts 2004* 11-05-99 9,866,736
* Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended.
(j) Pay-in-kind securities are securities in which the issuer makes interest or
dividend payments in cash or in additional securities. The securities usually
have the same terms as the original holdings.
(k) At Nov. 30, 1999, the cost of securities for federal income tax purposes was
approximately $4,035,223,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $114,961,000
Unrealized depreciation (567,724,000)
------------
Net unrealized depreciation $(452,763,000)
<PAGE>
American
Express
Funds
AXP Extra Income Fund
IDS Tower 10
Minneapolis, MN 55440-0010
Ticker Symbol
Class A: INEAX Class B: IEIBX Class Y: IEIYX
PRSRT STD AUTO U.S.
POSTAGE
PAID
SPENCER, IA
PERMIT NO. 85
S-6470 N (1/00)
Distributed by American Express Financial Advisors Inc. Member NASD. American
Express Company is separate from American Express Financial Advisors Inc. and is
not a broker-dealer.
