[The American Funds Group(r)]
Capital Income Builder
Semi-Annual Report 2000
For the six months ended April 30
[cover illustration: photographs of satellite dish, satellite, architectural
columns]
The goal of Capital Income Builder(r) is to provide a growing dividend - with
higher income distributions every quarter as far as possible - together with a
current yield which exceeds that paid by U.S. stocks generally.
Capital Income Builder is one of 29 American Funds, the nation's third -
largest mutual fund family. For nearly seven decades, Capital Research and
Management Company, the American Funds adviser, has invested with a long-term
focus based on thorough research and attention to risk.
Fund results in this report were calculated for Class A shares at net asset
value (without a sales charge) unless otherwise indicated. Here are the total
returns and average annual compound returns on a $1,000 investment for periods
ended March 31, 2000 (the most recent calendar quarter), with all distributions
reinvested, assuming payment of the 5.75% maximum sales charge at the beginning
of the stated periods - 10 years: +205.66%, or +11.82% a year; 5 years:
+77.85%, or +12.20% a year; 1 year: -7.51%. Results for Class B shares are not
shown because of the brief time between their introduction on March 15 and the
end of the fund's fiscal period. The fund's 30-day yield as of May 31, 2000,
calculated in accordance with the Securities and Exchange Commission formula,
was 4.48%.
Please see the back cover for important information about Class A and B shares.
Figures shown are past results and are not predictive of future results. Share
price and return will vary, so you may lose money. Investing for short periods
makes losses more likely. Investments are not FDIC-insured, nor are they
deposits of or guaranteed by a bank or any other entity. Investing outside the
United States is subject to additional risks, such as currency fluctuations and
political instability, which are detailed in the fund's prospectus.
FELLOW INVESTORS:
In a six-month period marked by severe stock market turbulence, Capital Income
Builder continued to provide shareholders with a generous income stream.
Unfortunately, the six months were not kind to dividend-paying stocks, and
CIB's income return only partially offset a decline in the value of your
shares.
Amid declining stock prices, the fund's net asset value fell to $41.15 per
share at April 30 from $44.90 six months earlier, resulting in a total return
of -2.9%. That was lower than the -0.7% average return of the 221 equity-income
funds tracked by Lipper Inc. Standard & Poor's 500 Stock Composite Index,
meanwhile, returned 7.2%.
DIVERGENT PATHS FOR STOCKS
While it is always disappointing to see a negative return, even over so short a
time, we would emphasize that this six-month reporting period, from November 1
to April 30, was characterized by unusually divergent trends among different
types of stocks. At one end of the spectrum, technology stocks soared to
unprecedented heights. At the other, banks and so-called "bricks-and-mortar"
companies - sectors that typically produce higher dividends - were hamstrung by
investor concerns about the impact of rising interest rates on future earnings.
Notwithstanding the recent euphoria over the highest flying stocks, it is
important to remember the relative stability a good income flow can provide in
a down market and the significant contributions that reinvested dividends have
made to total stock market returns. Indeed, in every decline of 10% or more in
the S&P 500 Index over the fund's 13-year lifetime, Capital Income Builder held
up better. It once again provided some cushion near the end of the reporting
period, when technology-related issues turned down sharply, pulling down
broader market levels. From its high on March 24 to its April 14 calendar-year
low, the S&P 500 Index fell nearly 11%. During that same three-week time frame,
the value of your investment in CIB declined less than 1%.
RISING INCOME
In keeping with its objective of growing income, we are pleased to note that
the dividend for June 2000 rose by a half-cent a share, to 50 cents. For
shareholders who reinvested the December capital gain distribution of $1.54,
this latest dividend income is 7% more than in the same period a year before,
and 114% higher than CIB's first full-quarter payment in December 1987, for an
average annual compound growth rate for income of 6.3%. As the "stair-step"
chart below makes clear, the fund's dividend growth has outpaced the rate of
inflation by a wide margin.
That growth is particularly noteworthy given the stock market's low-yield
environment. CIB's 4.8% dividend rate for April was about four times the 1.2%
rate of the S&P 500 Index.
[Begin sidebar]
CIB'S QUARTERLY DIVIDENDS COMPARED WITH INFLATION
Dividends as declared and as adjusted for reinvested capital gains
[Begin Bar Chart]
(cents per share)
(Index: December 1987 = 100)
<TABLE>
<CAPTION>
Additional income earned Inflation=
on initial shares if the Consumer Price
capital gain distributions Index (through
Fiscal Quarters Dividend were reinvested March 2000)
<S> <C> <C> <C>
4 Aug-Oct 1987 22+ - -
1 Nov-Jan 1988 28 - 100
2 Feb-Apr 1988 28.5 - 101
3 May-Jul 1988 29 - 102.3
4 Aug-Oct 1988 29.5 - 103.8
1 Nov-Jan 1989 30 - 104.4
2 Feb-Apr 1989 30.5 - 106
3 May-Jul 1989 31 - 107.5
4 Aug-Oct 1989 31.5 - 108.3
1 Nov-Jan 1990 32.5 - 109.3
2 Feb-Apr 1990 33 - 111.5
3 May-Jul 1990 33.5 - 112.6
4 Aug-Oct 1990 34 - 115
1 Nov-Jan 1991 34.5 - 115.9
2 Feb-Apr 1991 35 - 117
3 May-Jul 1991 35.5 - 117.9
4 Aug-Oct 1991 36 - 118.9
1 Nov-Jan 1992 36.5 - 119.5
2 Feb-Apr 1992 37 .3 120.7
3 May-Jul 1992 37.5 .3 121.5
4 Aug-Oct 1992 38 .3 122.4
1 Nov-Jan 1993 38.5 .3 123
2 Feb-Apr 1993 39 .5 124.4
3 May-Jul 1993 39.5 .5 125.1
4 Aug-Oct 1993 40 .5 125.7
1 Nov-Jan 1994 40.5 .5 126.3
2 Feb-Apr 1994 41 .6 127.6
3 May-Jul 1994 41.5 .6 128.2
4 Aug-Oct 1994 42 .6 129.5
1 Nov-Jan 1995 42.5 .6 129.7
2 Feb-Apr 1995 43 .8 131.2
3 May-Jul 1995 43.5 .8 132.1
4 Aug-Oct 1995 44 .8 132.8
1 Nov-Jan 1996 44.5 .8 133
2 Feb-Apr 1996 45 1.4 134.9
3 May-Jul 1996 45.5 1.5 135.8
4 Aug-Oct 1996 46 1.5 136.7
1 Nov-Jan 1997 46.5 1.5 137.4
2 Feb-Apr 1997 46.5 1.6 137.4
3 May-Jul 1997 47.0 2.4 138.9
4 Aug-Oct 1997 47.5 2.4 139.7
1 Nov-Jan 1998 48.0 1.6 139.8
2 Feb-Apr 1998 48.0 4.2 140.6
3 May-Jul 1998 48.5 4.2 141.2
4 Aug-Oct 1998 49.0 4.3 141.8
1 Nov-Jan 1999 49.5 4.3 142.0
2 Feb-Apr 1999 48.0 7.3 143.0
3 May-Jul 1999 48.5 7.4 144.0
4 Aug-Oct 1999 49.0 7.5 145.5
1 Nov-Jan 2000 49.5 7.6 145.8
2 Feb-Apr 2000 49.5 9.7 148.3
3 May-July 2000 50.0 9.8
</TABLE>
[End Bar Chart]
Dividend
Additional income earned on initial shares if capital gain distributions were
reinvested.
Inflation = Consumer Price Index (through March 2000)
Fiscal Quarters:
1 November-January
2 February-April
3 May-July
4 August-October
+Not a full quarter
[End sidebar]
TELECOMMUNICATIONS STRONG, BANKS WEAK
Among industries that are well-represented in the fund, telecommunications
stocks continued to do well during the six months. The Morgan Stanley Capital
International Telecommunications Index appreciated 12% in price and yielded
1.3%. Meanwhile, utility issues fell 1% in price, although they provided a
relatively generous yield of 3.4%. Bank stocks likewise foundered and were
largely responsible for the fund's poor showing during the six months. Banks,
which account for 17% of net assets, had an average yield of 2.7%, but stock
prices fell some 18%, as inflationary pressures led the Federal Reserve to
increase short-term interest rates three times from November to April (and
again, by half a point, in May). Despite the recent weakness, we believe that
CIB's bank holdings remain attractive long-term investments.*
*Industry returns and yields based on comparable Morgan Stanley Capital
International indexes.
Regardless of broader trends, our focus has always been on the income prospects
of individual companies, not industries, and we are pleased to note that many
of the fund's largest holdings outpaced their average industry yields. Among
them, First Union, CIB's largest holding, yielded 6.0% at April 30; Scottish &
Southern Energy increased its dividend 23.5% to yield 4.9%; and Telecom Italia
yielded 2.3%, reflecting a 42.9% rise in its yearly dividend.
With U.S. stock yields so low, we have been looking elsewhere to help achieve
our objective of above-average and rising income. A growing portion of our
stock assets - close to half at April 30 - are concentrated in companies based
outside this country, where dividend yields have tended to be a bit higher. We
have also increased our exposure to bonds, which have provided a yield
advantage in this rising-interest-rate environment.
PATIENCE IS KEY
It is never easy to see the value of an investment decline, but just as we
temper our enthusiasm about unusually strong short-term gains, so, too, do we
take a measured view of sudden downturns. Experience has taught us that better
yielding stocks should return to winning form; in the meantime, buying
opportunities abound and we are finding very attractive values. We firmly
believe that for investors seeking above-average income, Capital Income
Builder's focus on identifying companies with strong dividend prospects is a
sensible long-term strategy. The current stock market turbulence may bear out
the wisdom of that approach sooner rather than later.
As always, we counsel patience. We thank you for your continued confidence, and
look forward to reporting to you again in six months.
Cordially,
/s/ Paul G. Haaga Jr. /s/ James B. Lovelace
Paul G. Haaga, Jr. James B. Lovelace
Chairman of the Board President
June 13, 2000
<TABLE>
Capital Income Builder, Inc. Unaudited
Investment Portfolio April 30, 2000
<S> <C> <C> <C>
Shares or Market Percent
Principal Value of Net
Equity Securitites Amount (Millions) Assets
-------------------------------------------- ----------- ----------- -----------
ENERGY
ENERGY SOURCES - 4.61%
BP Amoco PLC (ADR) 1,000,000 $51.000 .70%
Chevron Corp. 1,000,000 85.125 1.16
Fortum Oyj 4,600,000 17.174 .24
Kerr-McGee Corp. 282,800 14.635 .20
Phillips Petroleum Co. 1,035,200 49.107 .67
Royal Dutch Petroleum Co. (New York registered) 880,000 50.490
"Shell" Transport and Trading Co., PLC (New York 1,100,000 53.075 1.42
registered)
Ultramar Diamond Shamrock Corp. 650,000 16.087 .22
UTILITIES: ELECTRIC & GAS - 8.44%
Australian Gas Light Co. 1,168,320 6.077 .08
Central and South West Corp. 1,950,000 42.291 .58
Coastal Corp. 6.625% FELINE PRIDES convertible 280,000 8.295 .11
preferred 2002
Consolidated Edison, Inc. 900,000 31.669 .43
DPL Inc. 86,936 2.021 .03
GPU, Inc. 499,100 14.006 .19
KeySpan Corp. 312,800 9.189 .13
National Power PLC 10,600,000 47.996 .66
NiSource Inc. 3,101,200 57.372 .78
Northeast Utilities 263,200 5.659 .08
Pinnacle West Capital Corp. 2,500,000 87.812 1.20
PowerGen PLC 1,600,000 10.077 .14
Scottish and Southern Energy PLC 13,840,000 116.612 1.59
Sierra Pacific Resources 920,000 13.915 .19
Southern Co. 940,000 23.441 .32
Williams Companies, Inc. 3,383,250 126.238 1.73
Wisconsin Energy Corp. 690,000 14.749 .20
----------- -----------
954.112 13.05
----------- -----------
MATERIALS
CHEMICALS - 0.19%
Hickson International PLC 8,700,000 3.384 .05
RPM, Inc. 1,000,000 10.125 .14
FOREST PRODUCTS & PAPER - 1.95%
Chesapeake Corp. 300,000 9.375 .13
Georgia-Pacific Corp., Georgia-Pacific Group 480,000 19.440 .27
7.50% PEPS convertible preferred 2004, units
Louisiana-Pacific Corp. 1,200,000 16.050 .22
PaperlinX Ltd. 4,500,000 8.113 .11
Potlatch Corp. 1,047,900 41.327 .56
Rayonier Inc. 465,600 21.854 .30
Stora Enso Oyj 800,000 8.268 .11
Westvaco Corp. 600,000 18.525 .25
METALS: NONFERROUS - 0.63%
Billiton PLC 12,500,000 46.388 .63
MISCELLANEOUS MATERIALS & COMMODITIES - 0.41%
De Beers Consolidated Mines Ltd. 850,000 17.459 .24
Iluka Resources Ltd. 5,599,000 12.270 .17
----------- -----------
232.578 3.18
----------- -----------
CAPITAL EQUIPMENT
ELECTRICAL & ELECTRONICS - 0.59%
Hubbell Inc., Class B 1,667,800 43.467 .59
ELECTRONIC INSTRUMENTS - 0.04%
Thermo Instrument Systems Inc. 4.50% convertible $3,000,000 2.771 .04
debentures 2003 (1)
ENERGY EQUIPMENT - 0.39%
IHC Caland NV 700,000 28.365 .39
INDUSTRIAL COMPONENTS - 0.43%
Tomkins PLC 10,250,000 31.460 .43
MACHINERY & ENGINEERING - 0.15%
Foster Wheeler Corp. 1,200,000 11.025 .15
----------- -----------
117.088 1.60
----------- -----------
CONSUMER GOODS
APPLIANCES & HOUSEHOLD DURABLES - 0.17%
Newell Rubbermaid Inc. 500,000 12.594 .17
AUTOMOBILES - 1.65%
Ford Motor Co. 2,212,600 121.002 1.65
BEVERAGES & TOBACCO - 3.23%
Altadis SA (formerly Societe National d'Exploitation 1,820,827 21.306 .29
Industrielle des Tabacs et Allumettes "SEITA")
Foster's Brewing Group Ltd. 19,488,200 49.268 .67
Gallaher Group PLC 8,800,000 43.475 .60
Philip Morris Companies Inc. 3,165,000 69.234 .95
R.J. Reynolds Tobacco Holdings, Inc. 1,560,000 32.370 .44
UST Inc. 1,350,000 20.250 .28
FOOD & HOUSEHOLD PRODUCTS - 0.78%
Devro PLC 5,000,000 4.588 .06
Nabisco Group Holdings Corp. 1,500,000 19.312 .27
Sara Lee Corp. 2,200,000 33.000 .45
HEALTH & PERSONAL CARE - 0.11%
Radiometer A/S 245,000 7.782 .11
----------- -----------
434.181 5.94
----------- -----------
SERVICES
BROADCASTING & PUBLISHING - 0.46%
Houston Industries, Inc. (converting to Time 150,000 22.209 .30
Warner Inc.) 7.00% ACES convertible preferred 2000
West Australian Newspapers Holdings Ltd. 3,817,917 11.714 .16
BUSINESS SERVICES - 4.47%
American Water Works Co., Inc. 1,850,000 41.972 .57
Autopistas del Mare Nostrum, SA Concesionaria del 750,000 11.030 .15
Estado
BRISA--Auto-Estradas de Portugal, SA (1) 1,950,000 13.797 .19
Cendant Corp. 7.50% FELINE PRIDES convertible 400,000 9.950 .19
preferred 2001
Cendant Corp., rights, 2001 400,000 3.625
Hutchison Delta Finance Ltd. 7.00% convertible $11,000,000 12.760 .17
debentures 2002 (1)
Hyder PLC 6,953,807 27.050 .37
Thames Water PLC 7,377,083 92.978 1.27
United Utilities PLC 11,920,000 114.067 1.56
DIVERSIFIED TELECOMMUNICATION SERVICES - 8.18%
BCT.TELUS Communications Inc. 1,010,489 26.402 .36
Deutsche Telekom AG 527,200 33.845 .46
Koninklijke PTT Nederland NV 1,092,031 110.230 1.51
SBC Communications Inc. 1,700,000 74.481 1.02
Swisscom AG 251,391 88.895 1.22
Telecom Argentina STET-France Telecom SA, Class B (ADR) 359,200 10.035 .14
Telecom Corp. of New Zealand Ltd. 15,784,160 66.615
Telecom Corp. of New Zealand Ltd. (1) 8,380,000 35.367
Telecom Corp. of New Zealand Ltd. (ADR) 25,000 .848 1.40
Telecom Italia SpA 24,103,800 151.118 2.07
LEISURE & TOURISM - 0.82%
Host Marriott Financial Trust 6.75% QUIPS convertible 400,000 14.450 .20
preferred 2026
Seagram Co. Ltd. 7.50% ACES convertible preferred 720,000 36.630 .50
2002, units
Sky City Ltd. 2,800,000 8.544 .12
MERCHANDISING - 1.13%
J.C. Penney Co., Inc. 1,550,000 21.409 .29
Safeway PLC 14,650,000 49.352 .67
Somerfield PLC 14,015,000 12.430 .17
TRANSPORTATION: AIRLINES - 0.34%
Qantas Airways Ltd. 11,500,000 24.665 .34
TRANSPORTATION: RAIL & ROAD - 0.14%
Canadian National Railway Co. 5.25% convertible 220,000 9.900 .14
preferred 2029
----------- -----------
1,136.368 15.54
----------- -----------
FINANCE
BANKING - 17.46%
ABN AMRO Holding NV 1,262,722 26.044 .36
AmSouth Bancorporation 2,750,000 40.047 .55
Australia and New Zealand Banking Group Ltd. 2,456,986 17.001 .23
BancWest Corp. 800,000 14.650 .20
Bank of America Corp. 2,070,000 101.430 1.39
Bank of Nova Scotia 4,241,600 96.713 1.32
BANK ONE CORP. 2,511,000 76.586 1.05
Barclays PLC 3,100,000 79.204 1.08
Comerica Inc. 1,250,000 52.969 .72
Commonwealth Bank of Australia 1,326,000 20.210 .28
First Security Corp. 1,600,000 22.600 .31
First Union Corp. 4,895,706 156.051 2.13
Hang Seng Bank Ltd. 2,450,000 22.569 .31
HSBC Holdings PLC 3,049,749 34.065 .47
Huntington Bancshares Inc. 2,150,000 39.237 .54
J.P. Morgan & Co. Inc. 120,000 15.405 .21
KeyCorp 2,040,000 37.740 .52
Keystone Financial, Inc. 1,062,650 15.940 .22
Lloyds TSB Group PLC 4,000,000 39.087 .53
National Australia Bank Ltd. 2,342,246 32.112 .44
National City Corp. 1,600,000 27.200 .37
Royal Bank of Canada 1,825,000 86.183 1.18
United Bankshares, Inc. 1,775,000 38.717 .53
Valley National Bancorp 600,000 15.788 .22
Wachovia Corp. 1,100,000 68.956 .94
Washington Mutual, Inc. 600,000 15.337 .21
Westpac Banking Corp. 7,293,755 46.589 .64
Wilmington Trust Corp. 815,700 37.624 .51
FINANCIAL SERVICES - 1.51%
Health Care Property Investors, Inc. 1,545,000 43.067 .59
Irish Life & Permanent PLC 2,525,000 20.923 .29
OM Gruppen AB 1,100,000 45.802 .63
INSURANCE - 2.79%
American General Corp. 250,000 14.000 .19
Lincoln National Corp. 1,720,000 59.877 .82
Ohio Casualty Corp. 675,000 11.222 .15
Royal & Sun Alliance Insurance Group PLC 5,759,390 32.127 .44
Union des Assurances Federales 75,000 9.903 .13
XL Capital Ltd. 1,630,800 77.667 1.06
REAL ESTATE - 5.04%
AMB Property Corp. 1,500,000 33.094 .45
Apartment Investment and Management Co., Class A 1,125,000 44.719 .61
Archstone Communities Trust 4,784,585 103.467 1.42
Bradley Real Estate, Inc. 1,045,000 18.875 .26
Cabot Industrial Trust 695,000 13.379 .18
Castellum AB 1,000,000 9.290 .12
Equity Residential Properties Trust 545,000 24.798 .34
Glenborough Realty Trust Inc., Series A, 7.75% 314,300 4.793 .06
convertible preferred 2049
HKR International Ltd. 7,380,800 2.890 .04
Kimco Realty Corp. 510,000 20.304 .28
Meditrust Corp., paired stock 2,960,000 5.920 .08
ProLogis Trust 1,191,114 23.450 .32
Spieker Properties, Inc. 250,000 11.078 .15
Washington Real Estate Investment Trust 145,500 2.337 .03
Weingarten Realty Investors 1,260,000 51.030 .70
----------- -----------
1,960.066 26.80
----------- -----------
MULTI-INDUSTRY, GOLD MINES & MISCELLANEOUS
MULTI-INDUSTRY - 0.25%
Hunting PLC 4,260,000 8.816 .12
Lend Lease Corp. Ltd. 887,368 9.623 .13
GOLD MINES - 0.60%
Anglogold Ltd. 1,145,000 43.651 .60
MISCELLANEOUS - 0.97%
Equity securities in initial period of acquisition 70.680 .97
----------- -----------
132.770 1.82
----------- -----------
----------- -----------
TOTAL EQUITY SECURITIES (cost: $4,335.673 million) 4,967.163 67.93
Principal Market Percent
Amount Value of Net
BONDS AND NOTES (Millions) Assets
-------------------------------------------- ----------- ----------- -----------
CORPORATE
Aflac Inc. 6.50% 2009 11,000,000 9.810 .13
Airplanes Pass Through Trust, pass through certificates, 12,945,581 12.764 .23
Series 1, Class B, 6.635% 2019 (2,3)
Airplanes Pass Through Trust, pass-through certificates, 5,154,273 4.584
Series 1, Class C, 8.15% 2019 (2)
Allegiance Corp. 7.80% 2016 3,000,000 2.922 .04
Allied Waste North America, Inc. 7.625% 2006 3,000,000 2.325 .03
Allstate Corp. 7.20%-7.875% 2005-2009 15,500,000 14.894 .20
Associates Corp. of North America 5.80% 2004 15,000,000 14.015 .19
Atlas Air, Inc., 1998-1 Pass Through Trust, Class A, 8,701,215 7.870 .17
7.38% 2018 (2)
Atlas Air, Inc., 1998-1 Pass Through Trust, Class B, 4,855,903 4.557
7.68% 2014 (2)
Bank One Corp. 6.875% 2006 5,000,000 4.763 .07
Bear Stearns Commercial Mortgage Securities Inc., 29,147,628 28.193 .39
pass-through certificates, Series 1999-WF2, Class A-1,
6.80% 2031 (2)
Cable & Wireless Communications PLC 6.625%-6.75% 9,625,000 9.568 .13
2005-2008
Cablevision Systems Corp. 7.875%-8.125% 2007-2009 5,500,000 5.242 .07
Canandaigua Wine Co., Inc. 8.625% 2006 4,000,000 3.900 .05
Century Communications Corp. 8.75% 2007 2,000,000 1.815 .03
Chancellor Media Corp. of Los Angeles 8.00% 2008 3,000,000 2.948 .04
Charter Communications Holdings, LLC 8.25% 2007 6,000,000 5.370 .07
Chase Commercial Mortgage Securities Corp., pass-through 9,976,593 9.966 .14
certificates, Series 2000-1, Class A-1, 7.656% 2032 (2)
Chase Credit Card Master Trust, Series 2000-1, Class C, 10,000,000 9.968 .14
6.608% 2004 (3)
Columbia Gas System, Inc., Series C, 6.80% 2005 2,000,000 1.852 .07
Columbia Gas System, Inc., Series G, 7.62% 2025 3,000,000 2.612
Columbia/HCA Healthcare Corp. 6.125%-6.91% 2000-2045 51,830,000 50.181 .69
Container Corp. of America 9.75% 2003 9,835,000 9.761 .13
Continental Airlines, Inc., pass-through certificates, 2,663,204 2.585
Series 1997-1, Class C, 7.42% 2007 (2,3)
Continental Airlines, Inc., pass-through certificates, 4,757,717 4.348 .31
Series 1997-4, Class A, 6.90% 2018 (2)
Continental Airlines, Inc., pass-through certificates, 10,000,000 9.676
Series 2000-1, Class A-1, 8.048% 2020 (2)
Continental Airlines, Inc., pass-through certificates, 5,500,000 5.486
Series 2000-1, Class B, 8.388% 2020 (2)
Continental Auto Receivables Owner Trust, Series 2000-A, 8,250,000 8.190 .11
Class A4, 7.42% 2004 (1)
Cox Radio, Inc. 6.375% 2005 3,500,000 3.266 .04
Delta Air Lines, Inc., 1991 Equipment Certificates 2,000,000 2.001 .03
Trust, Series K, 10.00% 2014 (1)
Deutsche Bank Capital Funding Trust I, 7.872% 10,000,000 9.181 .13
2049 (1,2,3)
DLJ Mortgage Acceptance Corp., Series 1996-CF1, 1,459,184 1.452 .02
Class A-1A, 7.28% 2028 (1)
EQCC Home Equity Loan Trust, asset-backed certificates, 5,000,000 4.730 .06
Series 1999-2, Class A-4F, 6.753% 2027 (2)
Federal-Mogul Corp. 7.50% 2009 5,000,000 3.810 .05
FIRSTPLUS Home Loan Owner Trust, Series 1997-1, 4,250,000 4.212 .06
Class A-6, 6.95% 2015 (2)
Ford Motor Credit Co. 7.50% 2005 15,000,000 14.810 .20
Fred Meyer, Inc. 7.375%-7.45% 2005-2008 5,000,000 4.747 .07
Freeport-McMoRan Copper & Gold Inc. 7.20% 2026 2,000,000 1.517 .02
GMAC Commercial Mortgage Securities, Inc., 14,595,000 13.685 .19
pass-through certificates, Series 1998-C1, Class D,
6.974% 2030 (2)
Hasbro, Inc. 7.95%-8.50% 2003-2006 13,750,000 13.700 .19
Hearst-Argyle Television, Inc. 7.00% 2018 1,425,000 1.204 .02
Household Finance Corp. 7.875% 2007 15,000,000 14.845 .20
HSBC Capital Funding 9.547% 2022 (1,3) 10,000,000 10.182 .14
Jet Equipment Trust, Series 1995-B, Class C, 5,000,000 5.180 .07
9.71% 2015 (1)
Joseph E. Seagram & Sons, Inc. 6.625% 2005 10,000,000 9.278 .13
Liberty Media Corp. 7.875% 2009 13,000,000 12.343 .17
Lockheed Martin Corp. 8.20% 2009 10,000,000 9.811 .13
McDermott Inc. 9.375% 2002 6,000,000 5.108 .07
McKesson Corp. 6.40% 2008 4,000,000 3.084 .04
Metris Master Trust, Series 2000-1, Class C, 11,000,000 11.045 .15
7.396% 2008 (1,3)
Midland Cogeneration Venture LP, Secured Lease 1,899,983 1.943 .03
Obligation Bonds, Series C-91, 10.33% 2002
Money Store Residential Trust 1997-1, Class M-1, 15,000,000 13.915 .19
7.085% 2016
Morgan Stanley Aircraft Finance, Series 2, 10,000,000 10.000 .14
Class B2, 7.02% 2025 (1,3)
Nabisco, Inc. 6.375% 2035 (3) 10,020,000 8.657 .12
Owens-Illinois, Inc. 7.85%-8.10% 2004-2007 2,000,000 1.913 .03
PanAmSat Corp. 6.00% 2003 5,000,000 4.716 .06
Pegasus Aviation Lease Securitization, Series 2000-1, 11,000,000 10.990 .15
Class A2, 8.37% 2030 (1)
Qwest Communications International Inc. 0%/9.47% 2,000,000 1.599 .02
2007 (4)
ReliaStar Financial Corp. 6.50% 2008 4,950,000 4.446 .06
Security National Mortgage Loan Trust, Series 6,800,000 6.614 .09
2000-1, Class A2, 8.75% 2024 (1,2)
SocGen Real Estate Co. LLC, Series A, 7.64% 2049 (1) 10,000,000 9.035 .12
Tenet Healthcare Corp. 8.125% 2008 5,000,000 4.650 .06
TRW Inc. 7.125% 2009 10,000,000 9.094 .12
Vodafone AirTouch PLC 7.625%-7.75% 2005-2010 (1) 25,000,000 25.078 .34
WestPoint Stevens Inc. 7.875% 2005 5,000,000 4.100 .06
WMX Technologies, Inc. 6.375%-7.10% 2003-2026 12,749,000 11.511 .16
World Omni Master Owner Trust, Series 2000-1, 6,000,000 6.000 .08
Class B, 6.583% 2005 (3)
----------- -----------
543.617 7.44
----------- -----------
GOVERNMENTS AND GOVERNMENTAL AUTHORITIES
Canadian Government 7.00% September 2001 C$40,000,000 27.299 .37
Fannie Mae:
!7.50% April 2030 (2) $ 1,000,000 .978 .11
!8.00% May 2030 (2) 7,000,216 6.989
Federal Home Loan Banks:
!6.875% January 2005 18,200,000 17.938 .38
!5.125% October 2008 10,960,000 9.458
----------- -----------
62.662 .86
----------- -----------
U.S. TREASURIES
6.50% May 2001 3,000,000 2.998 .04
8.00% May 2001 6,000,000 6.087 .09
7.50% November 2001 100,000,000 101.125 1.38
14.25% February 2002 75,000,000 84.281 1.15
6.50% May 2002 100,000,000 99.641 1.36
5.50% May 2003 10,000,000 9.691 .13
11.125% August 2003 95,000,000 107.216 1.47
6.50% May 2005 7,500,000 7.485 .10
6.125% August 2007 2,200,000 2.154 .03
8.375% August 2008 33,000,000 34.495 .47
8.75% November 2008 100,000,000 106.016 1.45
8.875% February 2019 7,595,000 9.715 .13
6.375% August 2027 9,000,000 9.190 .13
----------- -----------
580.094 7.93
----------- -----------
----------- -----------
TOTAL BONDS AND NOTES (cost: $1,228.411 million) 1,186.373 16.23
----------- -----------
TOTAL INVESTMENT SECURITIES (cost: $5,564.084 million) 6,153.536 84.16
Principal Market Percent
Amount Value of Net
SHORT-TERM SECURITIES (Millions) Assets
-------------------------------------------- ----------- ----------- -----------
CORPORATE SHORT-TERM NOTES
Alcoa Inc. 6.00%-6.10% due 5/24-7/12/2000 53,760,000 53.357 .73
Bell Atlantic Financial Services, Inc. 5.92%-6.05% 86,100,000 85.653 1.17
due 5/15-6/13/2000
BellSouth Capital Funding Corp. 6.02%-6.04% due 60,900,000 60.564 .83
5/24-6/9/2000
CIT Group, Inc. 6.00%-6.04% due 5/1/2000 37,100,000 37.094 .50
E.I. du Pont de Nemours and Co. 5.85%-6.00% due 5/2/2000 40,000,000 39.987 .55
Ford Motor Credit Co. 6.03%-6.07% due 6/8-6/20/2000 33,800,000 33.540 .46
Fortune Brands Inc. 6.06%-6.13% due 6/7-7/12/2000 (1) 55,000,000 54.494 .75
General Electric Capital Corp. 5.90%-6.05% 72,000,000 71.886 .98
due 5/9-5/10/2000
H.J. Heinz Co. 6.03%-6.04% due 5/5-5/19/2000 75,250,000 75.132 1.03
Household Finance Corp. 6.03% due 6/5/2000 41,230,000 40.981 .56
IBM Credit Corp. 5.95%-5.96% due 5/19/2000 64,500,000 64.295 .88
Monsanto Co. 5.87%-6.07% due 5/8-6/1/2000 75,000,000 74.787 1.02
Procter & Gamble Co. 6.02%-6.08% 5/24-6/6/2000 52,500,000 52.185 .71
SBC Communications Inc. 5.88%-6.05% due 76,000,000 75.701 1.04
5/18-5/30/2000 (1)
USAA Capital Corp. 5.86%-6.05% due 5/16-6/8/2000 50,000,000 49.770 .68
----------- -----------
869.426 11.89
----------- -----------
U.S. TREASURY SHORT-TERM NOTES
6.125%-8.75% due 5/15-9/30/2000 $280,000,000 281.062 3.84
----------- -----------
TOTAL SHORT-TERM SECURITIES (cost: $1,160.302 million) 1,150.488 15.73
----------- -----------
EXCESS OF CASH AND RECEIVABLES OVER PAYABLES 7.887 .11
----------- -----------
TOTAL SHORT-TERM SECURITIES, CASH AND RECEIVABLES, 1,158.375 15.84
NET OF PAYABLES
----------- -----------
NET ASSETS $7,311.911 100.00%
=========== ===========
(1) Purchased in a private placement transaction;
resale to the public may require registration or
sale only to qualified institutional buyers.
(2) Pass-through security backed by a pool of
mortgages or other loans on which principal payments
are periodically made. Therefore, the effective
maturity is shorter than the stated maturities.
(3) Coupon rate may change periodically.
(4) Step bond; coupon rate will increase at a later
date.
ADR = American Depositary Receipts
See Notes to Financial Statements
</TABLE>
CAPITAL INCOME BUILDER
Portfolio Summary - APRIL 30, 2000
Equity Securities Appearing
in the Portfolio since October
31, 1999
Castellum
Consolidated Edison
Hang Seng Bank
HKR International
Hubbell
IHC Caland
Iluka Resources
Irish Life & Permanent
Lloyds TSB Group
Louisiana-Pacific
Newell Rubbermaid
Northeast Utilities
OM Gruppen
Paperlinx
R.J. Reynolds Tobacco Holdings
Radiometer
RPM
Sara Lee
Somerfield
Southern
Equity Securities Eliminated
from the Portfolio since October
31, 1999
Bristol-Myers Squibb
CalEnergy Capital Trust
CarrAmerica Realty
Chase Manhattan
Conoco
Dominion Resources
Duke-Weeks Realty
DuPont
France Telecom
Imperial Credit Commercial Mortgage Investment
Philadelphia Suburban
US WEST
USX
<TABLE>
Capital Income Builder
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES Unaudited
at April 30, 2000 (dollars in millions)
<S> <C> <C>
Assets:
Investment securities at market
(cost: $5,564.084) $6,153.536
Short-term securities
(cost: $1,160.302) 1,150.488
Cash .928
Receivables for --
Sales of investments $43.743
Sales of fund's shares 3.393
Dividends and accrued interest 51.665 98.801
------------ ---------------
7,403.753
Liabilities:
Payables for --
Purchases of investments 33.943
Repurchases of fund's shares 10.324
Management services 2.038
Dividends on fund's shares 42.279
Accrued expenses 3.258 91.842
------------ ---------------
Net Assets at April 30, 2000 -- (authorized $7,311.911
capital stock -- 400,000,000 shares) ===============
Class A shares, $.01 par value
Net assets $7,309.092
Shares outstanding 177,638,759
Net asset value per share $41.15
Class B shares, $.01 par value
Net assets $2.819
Shares outstanding 68,524
Net asset value per share $41.14
STATEMENT OF OPERATIONS Unaudited
for the six months ended April 30, 2000 (dollars in millions)
Investment Income:
Income:
Dividends $107.676
Interest 94.258 $201.934
------------
Expenses:
Management services fee 13.098
Distribution expenses - Class A 8.847
Distribution expenses - Class B .002
Transfer agent fee - Class A 2.723
Transfer agent fee - Class B .001
Reports to shareholders .009
Registration statement and prospectus .358
Postage, stationery and supplies .326
Directors' fees .077
Auditing and legal fees .052
Custodian fee .488
Taxes other than federal income tax .111
Other expenses .109 26.201
------------ ---------------
Net investment income 175.733
---------------
Realized Gain and Change in Unrealized
Appreciation on Investments:
Net realized gain 392.027
Net change in unrealized appreciation on
investments (823.588)
---------------
Net realized gain and change in unrealized
appreciation on investments (431.561)
---------------
Net Decrease in Net Assets Resulting from
Operations (255.828)
===============
STATEMENT OF CHANGES IN NET ASSETS (dollars in millions)
Six months Year
ended ended
4/30/2000* 10/31/99
------------ ---------------
Operations:
Net investment income $ 175.733 $ 378.400
Net realized gain on investments 392.027 329.823
Net change in unrealized appreciation
on investments (823.588) (484.382)
------------ ---------------
Net (decrease) increase in net assets
resulting from operations (255.828) 223.841
------------ ---------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income:
Class A (169.564) (376.344)
Class B (.007) .000
Distributions from net realized gain
on investments:
Class A (294.288) (510.675)
Class B .000 .000
------------ ---------------
Total dividends and distributions (463.859) (887.019)
------------ ---------------
Capital Share Transactions:
Proceeds from shares sold 308.295 1,227.223
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments 433.735 799.504
Cost of shares repurchased (1,483.205) (1,337.580)
------------ ---------------
Net (decrease) increase in net assets (741.175) 689.147
resulting from capital share transactions ------------ ---------------
Total (Decrease) Increase in Net Assets (1,460.862) 25.969
Net Assets:
Beginning of period 8,772.773 8,746.804
------------ ---------------
End of period (including
undistributed net investment
income of: $11.412 and $5.250, respectively) $7,311.911 $8,772.773
============ ===============
* Unaudited.
See Notes to Financial Statements
</TABLE>
CAPITAL INCOME BUILDER
Notes to Financial Statements Unaudited
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - Capital Income Builder, Inc. (the "fund") is registered under
the Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks to provide a growing dividend together with
a current yield which exceeds that paid by U.S. stocks generally. The fund
offers Class A and Class B shares. Class A shares are sold with an initial
sales charge of up to 5.75%. Class B shares are sold without an initial sales
charge but subject to a contingent deferred sales charge paid upon redemption.
This charge declines from 5% to zero over a period of six years. Class B
shares have higher distribution expenses and transfer agency fees than Class A
shares. Class B shares are automatically converted to Class A shares eight
years after the date of purchase. Holders of both classes of shares have equal
pro rata rights to assets and identical voting, dividend, liquidation and other
rights, except that each class bears different distribution and transfer agent
expenses, and each class shall have exclusive rights to vote on matters
affecting only that class.
SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could
differ from those estimates. The following is a summary of the significant
accounting policies consistently followed by the fund in the preparation of its
financial statements:
SECURITY VALUATION - Equity securities, including depositary receipts, are
valued at the last reported sale price on the exchange or market on which such
securities are traded, as of the close of business on the day the securities
are being valued or, lacking any sales, at the last available bid price. In
cases where equity securities are traded on more than one exchange, the
securities are valued on the exchange or market determined by the investment
adviser to be the broadest and most representative market, which may be either
a securities exchange or the over-the-counter market. Fixed-income securities
are valued at prices obtained from a pricing service, when such prices are
available; however, in circumstances where the investment adviser deems it
appropriate to do so, such securities will be valued at the mean quoted bid and
asked prices or at prices for securities of comparable maturity, quality and
type. The ability of the issuers of the debt securities held by the fund to
meet their obligations may be affected by economic developments in a specific
industry, state or region. Short-term securities maturing within 60 days are
valued at amortized cost, which approximates market value. Securities and
assets for which representative market quotations are not readily available are
valued at fair value as determined in good faith by a committee appointed by
the Board of Directors.
NON-U.S. CURRENCY TRANSLATION - Assets and liabilities initially expressed in
terms of non-U.S. currencies are translated into U.S. dollars at the prevailing
market rates at the end of the reporting period. Purchases and sales of
securities and income and expenses are translated into U.S. dollars at the
prevailing market rates on the dates of such transactions. The effects of
changes in non-U.S. currency exchange rates on investment securities and other
assets and liabilities are included with the net realized and unrealized gain
or loss on investment securities.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions are
accounted for as of the trade date. Realized gains and losses from securities
transactions are determined based on specific identified cost. Dividend income
is recognized on the ex-dividend date, and interest income is recognized on an
accrual basis. Original issue discounts on securities are amortized daily over
the expected life of the security. Amortization of market discounts on
securities is recognized upon disposition. The fund does not amortize premiums
on securities purchased.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends to shareholders are
declared daily from net investment income. Distributions paid to shareholders
are recorded on the ex-dividend date.
COMMON EXPENSES - Income, expenses other than class-specific expenses and
realized and unrealized gains and losses are allocated daily between the
classes based on their relative net asset values. Distribution expenses,
transfer agent fees and other class-specific expenses are accrued daily and
charged to the applicable share class.
2. NON-U.S. INVESTMENTS
INVESTMENT RISK - Investments in securities of non-U.S. issuers in certain
countries involve special investment risks. These risks may include, but are
not limited to, investment and repatriation restrictions, revaluation of
currencies, adverse political, social, and economic developments, government
involvement in the private sector, limited and less reliable investor
information, lack of liquidity, certain local tax law considerations, and
limited regulation of the securities markets.
TAXATION - Dividend and interest income is recorded net of non-U.S. taxes paid.
For the six months ended April 30, 2000, such non-U.S. taxes were $4,817,000.
CURRENCY GAINS AND LOSSES - Net realized currency losses on dividends,
interest, and other receivables and payables, on a book basis, were $328,000
for the six months ended April 30, 2000.
3. FEDERAL INCOME TAXATION
The fund complies with the requirements of the Internal Revenue Code applicable
to regulated investment companies and intends to distribute all of its net
taxable income and net capital gains for the fiscal year. As a regulated
investment company, the fund is not subject to income taxes if such
distributions are made. Required distributions are determined on a tax basis
and may differ from net investment income and net realized gains for financial
reporting purposes. In addition, the fiscal year in which amounts are
distributed may differ from the year in which the net investment income and net
realized gains are recorded by the fund.
As of April 30, 2000, net unrealized appreciation on investments for federal
income tax purposes aggregated $581,088,000; $1,136,704,000 related to
appreciated securities and $555,616,000 related to depreciated securities.
During the six months ended April 30, 2000, the fund realized, on a tax basis,
a net capital gain of $392,355,000 on securities transactions. Net losses
related to non-U.S. currency transactions of $328,000 were treated as an
adjustment to ordinary income for federal income tax purposes. The cost of
portfolio securities for federal income tax purposes was $6,722,936,000 at
April 30, 2000.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $13,098,000 for management services was
incurred pursuant to an agreement with Capital Research and Management Company
(CRMC), with which certain officers and Directors of the fund are affiliated.
The Investment Advisory and Service Agreement provides for monthly fees,
accrued daily, based on the following rates and average net asset levels:
<TABLE>
<CAPTION>
<S> <C> <C>
Average Net Asset Level
Rate In Excess of Up to
0.24% $0 $1 billion
0.20% $1 billion $2 billion
0.18% $2 billion $3 billion
0.165% $3 billion $5 billion
0.155% $5 billion $8 billion
0.15% $8 billion
</TABLE>
The agreement also provides for fees based on 3% of the fund's monthly gross
investment income. For purposes of the Investment Advisory and Service
Agreement, gross investment income means gross income, computed without taking
account of gains or losses from sales of capital assets.
DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution for Class A shares,
the fund may expend up to 0.30% of Class A average daily net assets annually
for any activities primarily intended to result in sales of fund shares,
provided the categories of expenses for which reimbursement is made are
approved by the fund's Board of Directors. Pursuant to a Plan of Distribution
for Class B shares, the fund may expend up to 1.00% of Class B average daily
net assets annually to compensate dealers for their selling and servicing
efforts. During the six months ended April 30, 2000, distribution expenses
under the Plans of Distribution for Class A and Class B shares were $8,847,000
and $2,000, respectively. As of April 30, 2000, accrued and unpaid distribution
expenses for Class A and Class B shares were $2,790,000 and $2,000,
respectively. American Funds Distributors, Inc. (AFD), the principal
underwriter of the fund's shares, received $1,056,000 (after allowances to
dealers) as its portion of the sales charges paid by purchasers of the fund's
shares. Such sales charges are not an expense of the fund and, hence, are not
reflected in the accompanying statement of operations.
TRANSFER AGENT FEE - American Funds Service Company (AFS), the transfer agent
for the fund, was paid a fee of $2,724,000.
DEFERRED DIRECTORS' FEES - Directors who are unaffiliated with CRMC may elect
to defer part or all of the fees earned for services as members of the Board.
Amounts deferred are not funded and are general unsecured liabilities of the
fund. As of April 30, 2000, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1993), net of any payments to
Directors, were $303,000.
AFFILIATED DIRECTORS AND OFFICERS - CRMC is owned by The Capital Group
Companies, Inc. AFS and AFD are both wholly owned subsidiaries of CRMC. Certain
Directors and officers of the fund are or may be considered to be affiliated
with CRMC, AFS and AFD. No such persons received any remuneration directly from
the fund.
5. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,552,169,000 and $1,485,370,000, respectively,
during the six months ended April 30, 2000.
As of April 30, 2000, net assets consisted of the following:
<TABLE>
<CAPTION>
<S> <C>
Capital paid in on shares of beneficial $6,350,470,000
interest
Undistributed net investment income 11,412,000
Accumulated net realized gain 370,916,000
Net unrealized appreciation 579,113,000
Net Assets $7,311,911,000
</TABLE>
Capital share transations in the fund were as follows:
<TABLE>
(dollars in millions)
Six months ended April 30, 2000 Year ended October 31, 1999
Amount Shares Amount Shares
<S> <C> <C> <C> <C>
Class A Shares:
Sold $ 7,2 $ 1,227. 26,06
Reinvested dividends and distributio 10,44 799 17,23
Repurchased (1 (35,43 (1,337. (28,64
Net (decrease) increase in Class A (17,74 689 14,64
Class B Shares: +
Sold - -
Reinvested dividends and distributio - -
Repurchased - -
Net increase in Class B - -
Total net (decrease) increase in fund $ (17,67 $ 689 14,64
* Unaudited.
+ Class B shares were offered for sale
commencing March 15, 2000.
</TABLE>
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $488,000 includes $18,000 that was paid by these credits
rather than in cash.
<TABLE>
PER-SHARE DATA AND RATIOS
Net gains/
(losses) on
Net asset securities
value, Net (both realized
Period beginning investment and
Ended of period income unrealized)
<S> <C> <C> <C> <C>
Class A: (2) 2000 $44.90 $.93 (3) $(2.24) (3)
1999 48.40 1.93 (.70)
1998 46.14 2.09 3.87
1997 39.70 1.74 7.20
1996 36.27 1.95 3.92
Class B: (6) 2000 40.33 .13 (3) .88 (3)
Total Dividends
from (from net Distributions
Period investment investment (from capital
Ended operations income) gains)
<S>
2000 $(1.31) $(.90) $(1.54)
1999 1.23 (1.92) (2.81)
1998 5.96 (2.09) (1.61)
1997 8.94 (1.77) (.73)
1996 5.87 (1.94) (.50)
Class B: (6) 2000 1.01 (.20) -
Net asset
Period Total value, end Total
Ended Distributions of period return (2)
Class A: (2) 2000 $(2.44) $41.15 (2.87)% (4)
1999 (4.73) 44.90 2.53%
1998 (3.70) 48.40 13.33
1997 (2.50) 46.14 23.16
1996 (2.44) 39.70 16.76
Class B: (6) 2000 (.20) 41.14 2.29 (4)
Ratio of Ratio of
Net assets, expenses net income
Periodend of period to average to average
Ended (in millions) net assets net assets
Class A: (2) 2000 $7,309 0.65% (5) 4.42% (5)
1999 8,773 .64 4.15
1998 8,747 .64 4.35
1997 7,301 .65 4.04
1996 5,418 .71 5.19
Class B: (6) 2000 3 1.4 (5) 3.67 (5)
Portfolio
Period turnover
Ended rate
Class A: (2) 2000 22.88% (7)
1999 20.56
1998 24.38
1997 27.65
1996 27.56
Class B: (6) 2000 22.88 (7)
(1) Excludes sales charge on A shares or
(2) The periods ended 1996 through 1999
represent fiscal years ended October 31;
the period ended 2000 represents the six
months ended April 30 (unaudited).
(3) Based on average shares outstanding.
(4) Based on operations for the period shown
and, accordingly, not representative of a full year.
(5) Annualized.
(6) Class B shares were not offered before
March 15, 2000. Figures shown are for the
period March 15 to April 30, 2000.
(7) Represents portfolio turnover rate for
the six months ended April 30, 2000.
</TABLE>
[The American Funds Group(r)]
Offices of the fund and of the investment
adviser, Capital Research and Management
Company
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92821-5823
Transfer agent for shareholder accounts
American Funds Service Company
(Please write to the address nearest you.)
P.O. Box 2205
Brea, California 92822-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
Custodian of assets
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, New York 10081-0001
Counsel
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071-2899
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
This report is for the information of shareholders of Capital Income Builder,
but it may also be used as sales literature when preceded or accompanied by the
current prospectus, which gives details about charges, expenses, investment
objectives and operating policies of the fund. If used as sales material after
June 30, 2000, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
For information about your account or any of the fund's services, or for a
prospectus for any of the American Funds, please contact your financial
adviser. You may also call American Funds Service Company, toll-free, at
800/421-0180, or visit www.americanfunds.com on the World Wide Web. Please read
the prospectus carefully before you invest or send money.
There are two ways to invest in Capital Income Builder. Class A shares are
subject to a 5.75% maximum up-front sales charge that declines for accounts of
$25,000 or more. Class B shares, which are not available for certain
employer-sponsored retirement plans, have no up-front sales charge. They are,
however, subject to additional expenses of approximately 0.75% a year over the
first eight years of ownership. If redeemed within six years, they may also be
subject to a contingent deferred sales charge (5% maximum) that declines over
time.
Printed on recycled paper
Litho in USA DD/AL/4617
Lit. No. CIB-013-0600
