<PAGE>
THE BOARD OF DIRECTORS
NORMAN BARKER, JR.*| Chairman
JOHN E. BRYSON*
RICHARD C. GILMAN
GORDON L. HOUGH*|
WILLIAM G. McGAGH|
RONALD L. OLSON
LOUIS A. SIMPSON
OFFICERS
W. CURTIS LIVINGSTON III
President
KENT S. ENGEL
Vice President
& Portfolio Manager
SCOTT F. GRANNIS
Vice President
ILENE S. HARKER
Secretary
DONNA BARNES
Assistant Secretary
STEVEN T. SARUWATARI
Treasurer
MARIE K. KARPINSKI
Assistant Treasurer
REFERENCES
INVESTMENT ADVISER
Western Asset Management Company
117 East Colorado Boulevard
Pasadena, California 91105
TRANSFER AGENT
State Street Bank and Trust Company
P.O. Box 8200
Boston, Massachusetts, 02266
*Member of Executive Committee
|Member of Audit Committee
PACIFIC
AMERICAN
INCOME
SHARES, INC.
P.O. BOX 983
PASADENA
CALIFORNIA 91102
PACIFIC
AMERICAN
INCOME
SHARES, INC.
SEMI-ANNUAL
REPORT
1995
<PAGE>
Dear Shareholder:
Yields in the fixed income markets declined substantially during the first
half of 1995, reversing the upward course followed most of last year. Combined
with our strategies for investing your funds, this produced very strong
performance on all counts. Total returns (price appreciative plus dividends) for
the first half of the year were 14.0%. A portion of these returns came from the
increase in the value of our portfolio holdings as interest rates fell. These
results compared very favorably both to the overall bond market (at 12.3%) and
to the other funds with which we compete. For the 12 months ended June 30, 1995,
the Fund ranked fourth in this group, second vs. its competitors in the two
years ended June 30, 1995, and first in the five years ended June 30, 1995.
Dividends remained at the rate set earlier in the year and market price per
share increased from $13.125 to $14.50.
The environment in which all this occurred was one where a slowdown in
economic activity and increasing evidence of a longer-term decline in inflation
rates were the driving forces.
Fortunately, we were well-positioned to take advantage of these
developments. For some time now, we have had an interest rate exposure in the
Fund that looked to capture the benefits of declining rates. While this cut into
1994 results, it was a major help so far this year. Our moves to emphasize
intermediate maturities also paid off, as interest rates on shorter instruments
declined much more than on longer ones. As always, the portfolio's major
emphasis was on corporate bonds with attractive coupons and prospects for
improved credit quality; this strategy was rewarded as spreads on most corporate
issues narrowed over the course of the year. Our posture in mortgage-backed
issues also helped as the large relative position we held there early in the
year was a major contributor to performance and we reduced our holding prior to
less positive results in that area in the second quarter.
Market Review
We continue to believe that the economy will experience relatively slow
growth for the balance of the year, and that inflation pressures appear to be
well under control--a combination of circumstances that should cause rates to
decline further and asset values to continue to increase. Longer run, while the
wealth effect of booming stock and bond markets is certainly positive for the
economy's long-term growth prospects, the economy is facing a variety of
restraining influences which are unlikely to turn positive before year end.
Monetary policy--as reflected by a relatively large gap between very short--
term interest rates of 5.75% and core inflation which is running well below 3%--
is still tight, and the Federal Reserve is unlikely to change that basic
situation anytime soon, barring the long shot of an outright recession.
Manufacturers and retailers have still not adjusted inventory levels
sufficiently to match the pronounced slowdown in job growth, income and spending
which has dominated the economic scene this year. Fiscal policy seems determined
to be restrictive, with significant cutbacks in government spending already
taking effect. Sensitive industrial commodity prices, as well as gold, all
reflect a stable price environment and little, if any, pickup in activity. With
an apparent relaxation of
1
Japan's deflationary monetary policies, the dollar appears to be in the
early stages of recovering from very depressed levels, particularly against the
yen; this increases the relative appeal of U.S. financial assets, but also puts
increasing competitive pressure on U.S. exporters.
If the past is any guide, the Fed's response to subpar growth and down-
trending inflation will likely be cautious, limiting the ability of short-term
rates to fall much from current levels; but long-term interest rates have not
fully discounted the prospects of a secular low-inflation environment.
Portfolio Strategy
Consistent with this view, we are continuing to emphasize the longer-
maturity holdings we think will be most favorably impacted. We also continue to
hold the majority of Fund assets in the corporate and mortgage sectors, to
capture their higher yields. Those positions have been trimmed, however, as
those increments have declined materially in the market rally.
Shareholder Meeting Results
The Fund's annual meeting of shareholders was held on April 13, 1995. Of
the 9,319,423 shares outstanding, the following shares (in thousands) were voted
at the meeting:
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C> <C>
Election of seven directors:
Norman Barker, Jr. 6,809 - 114
John E. Bryson 6,809 - 114
Richard C. Gilman 6,809 - 114
Gordon L. Hough 6,809 - 114
William G. McGagh 6,809 - 114
Ronald L. Olson 6,809 - 114
Louis A. Simpson 6,809 - 114
Ratification of selection of
Price Waterhouse LLP as the Fund's
independent accountants for the year
ending December 31, 1995. 6,798 16 109
</TABLE>
As always, we renew our pledge to deliver the highest level of management
expertise to our shareholders. Please let us know if we can answer any questions
for you.
Sincerely,
(signature)
W. Curtis Livingston, III
President
2
<PAGE>
PACIFIC AMERICAN INCOME SHARES, INC.
DIVIDEND REINVESTMENT PLAN
A Dividend Reinvestment Plan is available to all shareholders of record of
the Corporation. For participants in the Plan, cash dividends are automatically
reinvested in additional shares of the Corporation's stock. These shares are
purchased on the open market. Interested shareholders may obtain more
information by contacting the Dividend Reinvestment Agent, State Street Bank and
Trust, P.O. Box 8200, Boston, MA 02266.
SCHEDULE OF INVESTMENTS June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Principal Rating Market
Amount (Note A) Value
<S> <C> <C>
INVESTMENT SECURITIES
FINANCIAL AND LEASING - 7.7%
$1,400,000 Equitable Companies, Sr . Nt., 9% due 12-15-04........... A $ 1,554,224
2,700,000 Dean Witter Discover , Deb., 6.75% due 10-15-13.......... A 2,471,958
2,630,000 PaineWebber Group, Sr . Nt., 7.625% due 2-15-14.......... Baa 2,436,748
5,000,000 Western Financial Savings Bank, Sub. Capital
Deb., 8.5% due 7-1-03................................. Ba 4,925,000
11,387,930
FOREIGN AND INTERNATIONAL AGENCIES
(Note C) - 3.2%
4,000,000 Mexico Par-Series A&B, Deb., 6.25% due 12-31-19.......... Ba 2,435,000
3,600,000 Rep. of Argentina, 7.313%| due 3-31-05................... Ba 2,214,000
4,649,000
INDUSTRIALS AND MISCELLANEOUS - 36.8%
3,947,000 AMR Corp., Deb., 9% due 8-1-12........................... Baa 4,168,861
2,094,000 Auburn Hills Trust, Gtd. Exch. Ctf., 12%| due 5-1-20.... A 3,063,417
2,000,000 Cablevision Industries, Deb., 9.25% due 4-1-08........... B 2,070,000
3,000,000 Coastal Corp., Sub. Nt., 11.75% due 6-15-06.............. Baa 3,240,000
2,500,000 Harrahs Operations, Inc., Sr . Sub. Nt., 8.75% due 3-15-00 Ba 2,512,500
2,500,000 Litton Industries, Inc., Sub. Deb., 12.625% due 7-1-05... Ba 2,605,390
2,242,000 Loews Corporation, Sr . Nt., 7.625% due 6-1-23........... A 2,163,844
500,000 Nabisco Inc., Nt., 6.85% due 6-15-05..................... Baa 492,720
900,000 Nabisco Inc., Nt., 7.55% due 6-15-15..................... Baa 893,574
</TABLE>
3
<PAGE>
PACIFIC AMERICAN INCOME SHARES, INC.
SCHEDULE OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
Principal Rating Market
Amount (Note A) Value
<S> <C> <C>
$2,635,000 News America Holdings Incorporated, Deb.,
8.875% due 4-26-23............ Ba $ 2,858,606
660,000 News America Holdings Incorporated, Deb.,
9.25% due 2-1-13.............. Ba 739,999
930,000 News America Holdings Incorporated, Nts.,
8.45% due 8-1-34.............. Ba 1,009,468
2,000,000 Occidental Petroleum Company, Sr. Nt.,
11.75% due 3-15-11............ Baa 2,161,900
3,000,000 Owens-Illinois, Inc., Deb., 11% due 12-1-03........... Ba 3,292,500
3,390,000 RJR Nabisco, Inc., Sr . Nt., 8.75% due 8-15-05........ Baa 3,479,123
1,000,000 Rogers Cable System, LTD., Sr . Nt., 10% due 3-15-05. Ba 1,027,500
1,500,000 Safeway Inc., Sr. Sub. Nt., 10% due 12-1-01.......... Ba 1,676,250
900,000 Time Warner Entertainment Company, Deb.,
8.375% due 3-15-23............ Baa 886,788
2,850,000 Time Warner Entertainment Company, L.P., Sr. Nt.,
8.375% due 7-15-33............ Baa 2,789,808
300,000 Time Warner, Inc., Deb., 9.125% due 1-15-13.......... Ba 311,787
600,000 Time Warner, Inc., Deb., 9.15% due 2-1-23............ Ba 622,302
3,000,000 Transco Energy Company, Deb., 9.625% due 6-15-00..... Baa 3,366,780
3,100,000 Unisys Corporation, Sr. Nt., 10.625% due 10-1-99..... Ba 3,332,500
4,300,000 United Airlines, Deb., 11.21% due 5-1-14.............. Baa 5,222,221
53,987,838
</TABLE>
4
<PAGE>
PACIFIC AMERICAN INCOME SHARES, INC.
SCHEDULE OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
Principal Rating Market
Amount (Note A) Value
<S> <C> <C>
MORTGAGE-BACKED SECURITIES - 8.4%
$ 450,732 Federal Home Loan Mortgage Corp., PC, 10.25%
due 5-1-09................................................ Aaa $ 483,063
126,543 Federal Home Loan Mortgage Corp., PC, 10.75%
due 7-1-00................................................ Aaa 136,745
695,599 Federal Home Loan Mortgage Corp., CMO, 11.875%
due 6-15-13............................................... Aaa 740,432
3,266,823 Federal Home Loan Mortgage Corp., Ser . 124A PC
Remic, 8.5% due 3-15-97................................... Aaa 3,287,630
346,992 Federal National Mortgage Assoc., 10.5% due 7-1-09........ Aaa 377,281
220,110 Glendale Federal Savings and Loan Assoc., Mtg.-Bk. Ctf.,
Ser. A, 9.125% Pass-Through due 1-25-08.................. Aa 220,110
263,086 Gov't Nat'l Mortgage Assoc., GPM II, 12.25% due 3-20-14. Aaa 291,697
220,132 Gov't Nat'l Mortgage Assoc., 9% due 9-15-19............... Aaa 232,429
43,808 Granite Home Loan, Mtg. Ctf., 13.5% due 1-1-99
(Note B).................................................. NR 43,808
166,955 Home Savings and Loan Association, Mtg. Pass-Through
Ctf., Fourth Series, 10% Pass-Through Rate due 6-1-09..... Aa 166,955
272,634 Marine Midland, Ser . 1990-3 A4 Mtg. Pass-Through Ctf.,
10% due 6-25-20........................................... Aa 272,634
1,761,328 Resolution Trust Corporation, Mtg. Pass-Through Ctf.,
Series 1991-M1 A1, 7.408%| due 5-25-19..................... Aa 1,689,499
4,000,000 Resolution Trust Corporation, Mtg. Pass-Through Ctf.,
Series 1993-C1 C, 9.4% due 5-25-24......................... Aa 4,154,376
216,586 Valley Federal S&L, Manufactured Housing PC, 13.25%
due 1-15-99 (Note B)...................................... NR 216,586
12,313,245
</TABLE>
5
<PAGE>
PACIFIC AMERICAN INCOME SHARES, INC.
SCHEDULE OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
Principal Rating Market
Amount (Note A) Value
<S> <C> <C>
UTILITIES - GAS AND ELECTRIC - 16.7%
$1,080,000 CN Yankee Atomic Mtg., Ser . A, 12% due 6-1-00 Baa $1,144,800
3,500,000 First PV Funding Corporation, Deb., 10.15%
due 1-15-16................................... B 3,600,625
5,000,000 Long Island Lighting Co., Deb., 7.05%
due 3-15-03................................... Ba 4,580,150
2,500,000 Long Island Lighting Co., Gen. & Ref. Mtg., 9%
due 11-1-22................................... Ba 2,321,350
2,000,000 Louis Dreyfus Natural Gas, Sr . Sub. Nts., 9.25%
due 6-15-04................................... Ba 2,104,254
2,298,000 North Atlantic Energy , 1st Mtg., 9.05%
due 6-1-02.................................... Ba 2,301,976
2,488,000 PNPP II Funding Corp., CLB, 9.12% due 5-30-16. Baa 2,338,297
4,000,000 Sithe/Independence Funding Corporation, Nt., 9%
due 12-30-13 (Note D)........................ Baa 4,228,920
1,900,000 Systems Energy Resources, Inc., Deb., 7.43%
due 1-15-11.................................. Baa 1,837,604
24,457,976
U.S. GOVERNMENT AND AGENCIES - 16.8%
3,000,000 Federal National Mortgage Assoc., 8% due 4-25-06... Aaa 3,124,680
3,175,000 Resolution Funding Corporation, 8.875% due 4-15-30. Aaa 4,033,234
1,870,000 U.S. Treasury Bonds, 11.625% due 11-15-04.......... Aaa 2,570,670
2,810,000 U.S. Treasury Bonds, 12% due 8-15-13............... Aaa 4,144,750
6,620,000 U.S. Treasury Bonds, 8.125% due 8-15-19............ Aaa 7,701,973
1,410,000 U.S. Treasury Notes, 5.75% due 8-15-03............. Aaa 1,367,037
390,000 U.S. Treasury Notes, 7.875% due 11-15-04........... Aaa 434,362
1,300,000 U.S. Treasury Notes, 6.5% due 5-15-05.............. Aaa 1,327,625
24,704,331
Total Investment Securities - 89.6% 131,500,320
</TABLE>
6
<PAGE>
PACIFIC AMERICAN INCOME SHARES, INC.
SCHEDULE OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
Principal Market
Amount Value
<C> <S> <C>
SHORT-TERM SECURITIES - 8.4%
$ 2,359,000 Goldman Sachs, Repurchase Agreement,
6% dated 6-30-95, to be
repurchased at $2,360,180
on 7-3-95 (Collateral: $1,695,000
U.S. Treasury Notes, 12% due 5-15-05,
value $2,421,000)....................... $ 2,359,000
10,000,000 Federal National Mortgage Assoc.,
Discount Note, 5.91% due 7-5-95......... 9,993,433
Total Short-Term Securities 12,352,433
Total Investments - 98.0% $143,852,753
</TABLE>
Note A - The rating shown is the higher of the ratings provided by Moody's
Investors Service or Standard and Poor's Corporation. Securities issued and/or
guaranteed by the U.S. Government or any of its agencies, when not rated by
Moody's or Standard and Poor's, are considered to be Aaa.
Note B - The Company purchased Granite Home Loan Mortgage Certificates at
98.958, and Valley Federal S&L Manufactured Housing Participation Certificates
at 99.5, in private placement transactions on December 22, 1983 and January 30,
1984, respectively. These investments are restricted as to resale and amounted
to approximately $260,000 (0.2% of net assets) at June 30, 1995. Restricted
securities have been valued at fair value in accordance with valuation methods
approved by the Board of Directors. Such approved methods reflect the Board's
consideration of, among other things, the financial condition of the issuer,
pricing opinions of two outside broker-dealers, current interest rates and the
maturity of the security. The Company will bear the costs incurred, if any, in
connection with any future disposition of these securities.
Note C - Foreign securities are denominated and traded in U.S. dollars.
Note D - Rule 144a security.
|The rate shown is the rate as of June 30, 1995.
See notes to financial statements.
7
<PAGE>
PACIFIC AMERICAN INCOME SHARES, INC.
STATEMENT OF ASSETS AND LIABILITIES June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investment securities at market value
(Cost $123,910,128).................................... $131,500,320
Short-term securities - at cost plus interest earned..... 12,352,433
Total investments..................................... $143,852,753
Cash..................................................... 283
Accrued interest......................................... 2,964,058
Other assets............................................. 14,521
146,831,615
LIABILITIES:
Accrued expenses......................................... 41,430
Investment Advisory fee payable.......................... 63,568
104,998
NET ASSETS - equivalent to $15.74 per share on
9,319,423 shares of Common Stock outstanding............. $146,726,617
SUMMARY OF STOCKHOLDERS' EQUITYS:
Common Stock, par value $.01 per share: authorized
10,000,000 shares; issued and outstanding
9,319,423 shares..................................... $ 93,194
Capital surplus.......................................... 141,490,573
Undistributed net investment income...................... 376,335
Accumulated net realized loss on investments............. (2,823,677)
Unrealized appreciation of investments................... 7,590,192
Net assets applicable to outstanding Common Stock........ $146,726,617
</TABLE>
See notes to financial statements
8
<PAGE>
PACIFIC AMERICAN INCOME SHARES, INC.
STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
For the Six Months
Ended June 30, 1995
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest................................................. $ 6,150,774
Expenses:
Advisory fee............................................. $ 364,014
Transfer agent and shareholder servicing expense........ 38,525
Custodian fees........................................... 37,621
Directors' fees and expenses............................. 24,890
Printing, stationery, and reports to
shareholders........................................... 21,485
Legal and auditing fees.................................. 18,438
Taxes, other than federal income taxes................... 17,692
Registration fees........................................ 7,590
Other expenses........................................... 12,762
543,017
Net investment income................................ 5,607,757
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments
(excluding short-term securities):
Proceeds from sales of investments................... 93,338,452
Cost of securities sold on basis of
identified cost.................................... (92,955,962)
Net realized gain of investments.................. 382,490
Unrealized appreciation (depreciation) of
investments:
End of period appreciation........................... 7,590,192
Beginning of period depreciation..................... (5,498,961)
Increase in unrealized appreciation............... 13,089,153
Net realized and unrealized gain on
investments..................................... 13,471,643
Increase in net assets resulting from operations......... $19,079,400
</TABLE>
See notes to financial statements.
9
<PAGE>
PACIFIC AMERICAN INCOME SHARES, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
June 30, 1995 December 31, 1994
(Unaudited)
<S> <C> <C>
Operations:
Net investment income................................ $ 5,607,757 $ 11,493,894
Net realized gain (loss) on investments.............. 382,490 (2,994,572)
Increase (decrease) in unrealized appreciation of
investments....................................... 13,089,153 (14,755,901)
Increase (decrease) in net assets resulting from
operations........................................ 19,079,400 (6,256,579)
Distributions to shareholders from:
Net investment income................................ (5,591,654) (11,183,308)
Net realized gain on investments..................... - (745,554)
Total increase (decrease)......................... 13,487,746 (18,185,441)
Net Assets:
Beginning of period.................................. 133,238,871 151,424,312
End of period (including undistributed net investment
income of $376,335 and $360,232, respectively). $146,726,617 $133,238,871
</TABLE>
See notes to financial statements.
10
<PAGE>
PACIFIC AMERICAN INCOME SHARES, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Company is registered under the Investment Company Act of 1940 as a
diversified, closed-end management investment company. The significant
accounting policies of the Company, which are in accordance with generally
accepted accounting principles for investment companies, include the following:
(a) Cash -- Cash includes demand deposits held with the Company's custodian
and does not include short-term investments.
(b) Investments -- Security transactions are recorded on the trade date.
Investment securities owned at June 30, 1995 are reflected in the accompanying
Schedule of Investments at their value on June 30, 1995. In valuing portfolio
securities, securities listed or traded on a national securities exchange are
valued at the last sales price on the last business day of the period. Each
security traded in the over-the-counter market, including listed debt securities
whose primary market is believed to be over-the-counter, is generally valued at
the mean of the bid prices at the time of computation. Prices are obtained from
at least two dealers regularly making a market in the security, unless such
prices can be obtained from only a single market maker. The method of valuing
restricted securities is described in Note B to the Schedule of Investments. The
difference between cost and market value is reflected separately as unrealized
appreciation of investments. Short-term securities are generally stated at cost
plus interest earned, which approximates market value.
The net realized gain or loss on investment transactions is determined for
federal income tax and financial reporting purposes on the basis of identified
cost. Purchases and sales of securities other than short-term and U.S.
government securities for the six months ended June 30, 1995 aggregated
$19,548,036 and $26,700,800, respectively. Purchases and sales of U.S.
government securities were $53,997,809 and $66,637,653, respectively, for the
six months ended June 30, 1995. As of June 30, 1995, unrealized appreciation for
federal income tax and financial reporting purposes aggregated $7,590,192 of
which $8,785,827 related to appreciated securities and $1,195,635 related to
depreciated securities. The aggregate cost of investment securities owned for
federal income tax purposes was $136,262,561 at June 30, 1995.
(c) Recognition of income, expense and distributions to shareholders -- The
Company accrues interest income and certain expenses on a daily basis. Dividends
are recorded on the ex-dividend date.
(d) Federal income taxes -- No provision for federal income or excise taxes
has been made in the accompanying financial statements because the Company
intends to distribute to its shareholders substantially all of its taxable net
income and realized capital gains, and otherwise comply with the Internal
Revenue Code provisions applicable to regulated investment companies.
11
<PAGE>
PACIFIC AMERICAN INCOME SHARES, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 2 - INVESTMENT ADVISORY AGREEMENT AND AFFILIATED PERSONS
The Company has entered into an investment advisory agreement with Western
Asset Management Company ("Adviser"), which is a wholly owned subsidiary of Legg
Mason, Inc., pursuant to which the Adviser provides investment advice and
administrative services to the Company. In return for its advisory services, the
Company pays the Adviser a monthly fee at an annual rate of 0.7% of the average
monthly net assets of the Company up to $60,000,000 and 0.4% of such net assets
in excess of $60,000,000. If expenses (including the Adviser's fee but excluding
interest, taxes, brokerage fees, the expenses of any offering by the Company of
its securities and extraordinary expenses beyond the control of the Company)
borne by the Company in any fiscal year exceed 1.5% of average net assets up to
$30,000,000 and 1% of average net assets over $30,000,000, the Adviser will
reimburse the Company for any excess. No expense reimbursement is due for the
six months ended June 30, 1995 nor for the year ended December 31, 1994.
NOTE 3 - QUARTERLY RESULTS OF OPERATIONS:
<TABLE>
<CAPTION>
Three Months Ended
June 30, 1995 March 31, 1995 Dec. 31, 1994 Sept. 30, 1994
<S> <C> <C> <C> <C> <C>
Investment income Total.......................... $ 3,114,653 $3,036,121 $ 3,084,482 $ 3,233,052
Net investment income Total.......................... 2,805,108 2,802,649 2,778,236 3,006,269
Per Share...................... .301 .301 .298 .323
Net realized and
unrealized gain
(loss) on
investments Total.......................... 12,020,012 1,451,631 (1,842,315) (2,500,960)
Per Share...................... 1.290 .156 (.198) (.268)
<CAPTION>
Three Months Ended
June 30, 1994 March 31, 1994 Dec. 31, 1993 Sept. 30, 1993
<S> <C> <C> <C> <C> <C>
Investment income Total.......................... $ 3,106,948 $ 3,140,450 $ 3,223,233 $ 3,249,811
Net investment income Total.......................... 2,841,919 2,867,470 2,936,709 2,986,912
Per Share...................... .305 .308 .318 .324
Net realized and
unrealized gain
(loss) on
investments Total.......................... (5,992,323) (7,414,875) (3,037,086) 5,141,164
Per Share...................... (.643) (.796) (.288) .487
</TABLE>
12
<PAGE>
PACIFIC AMERICAN INCOME SHARES, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 4 - FINANCIAL HIGHLIGHTS:
Contained below is per share operating performance data for a share of
common stock outstanding, total investment return, ratios to average net assets
and other supplemental data. This information has been derived from information
provided in the financial statements and market price data for the Company's
shares.
<TABLE>
<CAPTION>
For the Six
Months Ended For the Years Ended December 31,
June 30, 1995 1994 1993 1992 1991 1990
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period.......................... $14.30 $16.25 $15.94 $16.06 $14.62 $15.24
Net investment income........... .60 1.23 1.27 1.38 1.47 1.47
Net gain (loss) on securities
(realized and unrealized)..... 1.44 (1.90) .84 .39 1.43 (.63)
Total from investment operations 2.04 (.67) 2.11 1.77 2.90 .84
Distributions paid from:
Net investment income........... (.60) (1.20) (1.28) (1.40) (1.46) (1.46)
Net realized gain on investments - (.08) (.52) - - -
Dilutive effect of stock issuance. - - - (.49) - -
Net asset value, end of period.... $15.74 $14.30 $16.25 $15.94 $16.06 $14.62
Market value per share, end of
period.......................... $14.50 $13.125 $16.375 $15.625 $15.75 $13.75
TOTAL RETURN:
Based on market value per share 15.09%(B) (12.75%) 16.57% 8.17% 25.82% (1.31%)
RATIOS TO AVERAGE NET
ASSETS:
Expenses.......................... .78%(C) .76% .72%(A) .79%(A) .84%(A) .89%(A)
Net investment income............. 8.03%(C) 8.20% 7.71% 8.31% 9.60% 10.02%
SUPPLEMENTAL DATA:
Portfolio turnover rate........... 108.89%(C) 116.19% 130.25% 83.51% 41.52% 48.48%
Net assets at end of period
(in thousands).................. $146,727 $133,239 $151,424 $142,311 $107,735 $98,102
</TABLE>
(A) Exclusive of expenses relating to Convertible Notes which were converted in
1993.
(B) Not annualized.
(C) Annualized.
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