The High
Yield Income
Fund, Inc.
- ------------------------------
Semi-Annual Report
February 28, 1995
<PAGE>
Letter to Shareholders
April 26, 1995
Dear Shareholder:
As bond yields have fallen in recent months, prices have risen, reversing
1994's decline in asset values. Over the past six months, total returns for
high yield bonds are not only in positive territory, but lead all other sectors
of the bond market (including U.S. governments, corporates, mortgages and
municipals) as measured by Lehman Brothers. For this period, The High Yield
Income Fund, Inc. underperformed the Lipper Closed-End High Yield Fund Average.
STOCK SYMBOL
The HIgh Yield Income Fund, Inc. is a closed-end fund traded on the New York
Stock Exchange under the symbol ``HYI'' and is frequently listed as
``HighYldFd'' or ``HiYld'' in the financial sections of newspapers. Also, it
is listed weekly in Barron's and in a special table every Monday in The Wall
Street Journal.
FUNDS PERFORMANCE
As of February 28, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Total Return NAV Market Price
6 Months 2/28/95 2/28/95
High Yield 1.5% $6.91 $7.63
Income Fund1
Lipper Closed-End 3.3% N/A N/A
High Yield Avg.2
</TABLE>
1. Source: Prudential Mutual Fund Management, Inc. Total return of the Fund
represents the change in net asset value from the beginning of the period
(8/31/94) through the end of the period (2/28/95) and assumes the reinvestment
of dividends and distributions. Shares of the Fund are traded on the NYSE.
Past performance is no guarantee of future results.
2. Source: Lipper Analytical Services, Inc. These are the average returns of
25 funds in the closed-end high current yield category for six months.
Fund Overview
The High Yield Income Fund seeks high current income and capital appreciation
from a portfolio of high-yielding, non-investment grade bonds, commonly known
as junk bonds. The Fund generally strives to invest in bonds rated B or BB.
During the past six months, the Fund paid monthly dividends totalling $0.44
per share.
Due to the lack of available obligations in the market with maturities between
10 and 20 years, the Board of Directors recently approved a change in the
Fund's investment policy to eliminate the requirement that the Fund maintain an
average maturity between 10 and 20 years. It is anticipated that, under
current market conditions, the Fund will maintain an average portfolio
<PAGE>
of less than 10 years. As of February 28, 1995, the average weighted maturity
of the portfolio was 9.3 years.
Prepared For Slower Growth
Since we believe the Federal Reserve will be successful in cooling economic
growth, we prepared the portfolio for a slowdown by closely monitoring credit
quality. Of course, we always attempt to concentrate our purchases among
B-rated companies with the potential for possible credit rating upgrades, while
still paying a high enough coupon to support our dividend. As the economy has
decelerated with rising interest rates, we analyzed every issue we purchased
for management depth and financial strength to withstand a slowdown.
We also tried to capitalize on rising interest rates last fall by putting money
to work in the new issue market. As prices of high yield bonds fell in 1994,
demand for these securities softened. This created a buyer's market for new
securities, where high yield issuers had to offer higher coupons in order to
attract new buyers. At the peak of the market, we could obtain about one
percentage point higher yield from new bonds compared with those available in
the secondary market. For example, we purchased Tenet Healthcare and Rogers
Cablesystems. Early in 1995, the situation somewhat reversed itself, because
supply generally contracts in January and February. (During the entire first
quarter, new issuance was down 75% from last year, as measured by CS First
Boston.) This shortage of bonds has helped to lift prices.
Grand Union Surprise Restructuring
The high yield bond market did have one disappointment over the period. In
November, Grand Union announced that it would reorganize, unnerving the market.
Your Fund owned less than 0.5% of net assets in subordinated Grand Union debt,
and has since sold the entire position.
Looking Ahead
We expect continued moderate economic growth through the year, with Gross
Domestic Product averaging between 2.5% and 3.0%. Inflation still appears
poised to rise a bit later this year, but we do not expect it to top 3.5%. At
this writing, the biggest risk to our outlook is the weakening U.S. dollar. If
the Federal Reserve moves aggressively to increase rates in an attempt to prop
up the currency, this period of economic growth might come swiftly to an end.
<PAGE>
Bond investors should be able to sit back and at least collect coupon income
through the rest of the year and maybe benefit from some further price
appreciation.
Once again, we appreciate having you as a shareholder of The High Yield Income
Fund and remain committed to managing it for your benefit.
Sincerely,
Lawrence C. McQuade
President
Lars M. Berkman
Co-Manager
Michael A. Snyder
Co-Manager
New Fund Co-Managers.
On January l, 1995, Lars Berkman, Managing Director, and Mike Snyder, Vice
President, Prudential Investment Advisors, formally took over managing The High
Yield Income Fund. Lars is the portfolio manager of the $3.5 billion open-end
Prudential High Yield Fund. Mike has been on our high yield team for two and a
half years and he is also co-manager of the Prudential Series Fund: High Yield
Portfolio.
<PAGE>
- ----------------------------------------------------------
THE HIGH YIELD INCOME FUND, INC.
Portfolio of Investments
February 28, 1995
(Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
Principal
Moody's Amount Value
Rating (000) Description (a) (Note 1)
- ----------------------------------------------------------------
<C> <C> <S> <C>
LONG-TERM INVESTMENTS--121.5%
BONDS--119.2%
Aerospace--3.8%
Fairchild Industries,
Inc.,
Sr. Sec. Notes,
B2 $ 1,185## 12.25%, 2/1/99.......... $ 1,161,300
K & F Industries, Inc.,
Sr. Sec. Notes,
B1 750# 11.875%, 12/1/03........ 753,750
Rohr, Inc.,
Sr. Notes,
Ba3 500# 11.625%, 5/15/03........ 505,000
Talley Manufacturing &
Technolgy, Inc.,
Sr. Notes,
B2 500# 10.75%, 10/15/03........ 452,500
-----------
2,872,550
-----------
Airlines--1.8%
Northwest Airlines,
Inc.,
Sr. Notes,
NR 480 12.092%, 12/31/00....... 472,577
US Air, Inc.,
Ba2 500# 10.375%, 3/1/13......... 430,000
Sr. Deb.,
B3 250# 12.875%, 4/1/00......... 247,812
Sr. Notes,
B3 250# 10.00%, 7/1/03.......... 182,500
-----------
1,332,889
-----------
Automotive Parts--7.0%
Doehler Jarvis, Inc.,
Sr. Notes,
B3 1,000# 11.875%, 6/1/02......... 1,025,000
Foamex/JPS Automotive
L.P.,
Sr. Notes,
B2 500 11.125%, 6/15/01........ 493,750
Sr. Sec. Disc. Deb. Ser.
B,
Zero Coupon (until
7/1/99),
Caa 1,000DD 14.00%, 7/1/04.......... 535,000
Sr. Sub. Deb.,
B3 $ 500# 11.875%, 10/1/04........ $ 481,250
Harvard Indusries, Inc.,
Sr. Notes,
B2 1,250# 12.00%, 7/15/04......... 1,284,375
Motor Wheel Corp.,
Sr. Notes,
B2 500# 11.50%, 3/1/00.......... 447,500
SPX Corp.,
Sr. Sub. Notes,
B3 1,000# 11.75%, 6/1/02.......... 1,032,500
-----------
5,299,375
-----------
Beverages-Bottlers--1.2%
Heileman Acquisition
Corp.,
Sr. Sub. Notes,
B3 111# 9.625%, 1/31/04......... 76,590
Seven-Up/RC Bottling
Co.,
Sr. Sec. Notes,
Caa 1,000 11.50%, 8/1/99.......... 820,000
-----------
896,590
-----------
Building & Related Industries--4.4%
Building Material Corp.
of America,
Sr. Notes, Ser. B,
NR 1,250 Zero Coupon, 7/1/04... 675,000
Miles Homes, Inc.,
Sr. Notes,
B2 500#DD 12.00%, 4/1/01.......... 335,000
Overhead Door Corp.,
Sr. Notes,
B1 750# 12.25%, 2/1/00.......... 765,000
Southdown, Inc.,
Sr. Sub. Notes,
NR 500 14.00%, 10/15/01........ 545,000
Wickes Lumber Co.,
Sr. Sub. Notes,
B3 1,000# 11.625%, 12/15/03....... 970,000
-----------
3,290,000
-----------
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Principal
Moody's Amount Value
Rating (000) Description (a) (Note 1)
- -----------------------------------------------------------------
<C> <C> <S> <C>
Cable & Pay Television Systems--6.5%
Adelphia Communications
Corp.,
Sr. Notes,
B3 $ 500# 12.50%, 5/15/02......... $ 482,500
PIK Note Ser. B,
NR 523 9.50%, 2/15/04.......... 379,215
Chancellor Broadcasting
Co.,
Sr. Sub. Notes,
B3 1,000# 12.50%, 10/1/04......... 1,000,000
Diamond Cable Co.,
Sr. Notes,
Zero Coupon (until
9/30/99),
B3 500 13.25%, 9/30/04......... 290,000
Falcon Holdings Inc.,
Sr. Sub. PIK Notes,
NR 1,000 11.00%, 9/15/03......... 921,300
NWCG Holdings Corp.,
Sr. Sec'd. Disc. Note
Ser. B,
Caa 500 Zero Coupon, 6/15/99.... 291,250
Scott Cable Communications, Inc.,
Sub. Deb.,
NR 250 12.25%, 4/15/01......... 200,000
United Artists, Inc.,
Sr. Sec. Notes,
Ba3 1,000# 11.50%, 5/1/02.......... 1,067,500
United Int'l Holdings,
Inc.,
Sr. Disc. Notes,
B3 500DD 14.00%, 11/15/99........ 280,000
-----------
4,911,765
-----------
Chemicals & Plastics--5.0%
Applied Extrusion Technology, Inc.,
Sr. Notes, Ser. B,
B3 1,000## 11.50%, 4/1/02.......... 1,017,500
G-I Holdings, Inc.,
Sr. Def'd. Cpn. Notes,
Ba3 500# Zero Coupon, 10/1/98.... 320,000
LaRoche Industries,
Inc.,
Sr. Sub. Notes,
B3 500# 13.00%, 8/15/04......... 485,000
NL Industries, Inc.,
Sr. Sec. Notes,
B1 500 11.75%, 10/15/03........ 521,250
Polymer Group, Inc.,
Sr. Notes,
Caa 500 12.75%, 7/15/02......... 482,500
Rexene Corp.,
Sr. Notes,
B1 $ 500# 11.75%, 12/1/04......... $ 522,500
Uniroyal Technology
Corp.,
Notes,
B2 500DD 11.75%, 6/1/03.......... 407,500
-----------
3,756,250
-----------
Conglomerate--6.7%
Great Dane Holdings,
Inc.,
Sr. Sub. Notes.,
Caa 500 12.75%, 8/1/01.......... 495,000
IMO Industries, Inc.,
Sr. Sub. Deb.,
B3 500# 12.00%, 11/1/01......... 510,000
Interlake Corp.,
Sr. Sub. Deb.,
B3 500# 12.125%, 3/1/02......... 490,000
JB Poindexter, Inc.,
Sr. Notes,
B2 1,000## 12.50%, 5/15/04......... 957,500
MAXXAM Group, Inc.,
Sr. Sec. Disc. Notes,
Zero Coupon, (until
8/1/98),
B3 1,000 12.25%, 8/1/03........ 570,000
Sr. Sec. Notes,
B3 1,000# 11.25%, 8/1/03.......... 930,000
Newflo Corp.,
Sub. Notes,
B3 1,150 13.25%, 11/15/02........ 1,115,500
-----------
5,068,000
-----------
Consumer Products--4.6%
Acme Boot Co.,
Sr. Notes,
B2 250#DD 11.50%, 12/15/00........ 102,500
Astrum International
Corp.,
Notes,
B3 500# 11.50%, 6/8/03.......... 508,750
Health O Meter, Inc.,
Sr. Sub. Notes,
B3 500DD 13.00%, 8/15/02......... 445,000
JB Williams Holdings,
Inc.,
Sr. Notes,
B3 500# 12.00%, 3/1/04.......... 470,000
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Principal
Moody's Amount Value
Rating (000) Description (a) (Note 1)
- -----------------------------------------------------------------
<C> <C> <S> <C>
Consumer Products (cont'd)
MacAndrews & Forbes Group, Inc.,
Sub. Deb.,
NR $ 500 13.00%, 3/1/99.......... $ 500,000
Sub. Notes,
NR 500 12.25%, 7/1/96.......... 495,000
Revlon Consumer Products
Corp., Deb.,
NR 1,000 9.375%, 4/1/01.......... 935,000
-----------
3,456,250
-----------
Energy--3.1%
Clark R&M Holdings,
Inc.,
Sr. Sec. Notes, Ser.
A,
B1 500 Zero Coupon, 2/15/00.... 282,500
Empire Gas Corp.,
Sr. Sec. PIK Notes,
Caa 500DD 7.00%, 7/15/04.......... 350,000
Mesa Capital Corp.,
Sec. Disc. Notes,
Zero Coupon (until
6/30/95),
B3 1,000 12.75%, 6/30/98......... 935,000
Presidio Oil Co.,
Sr. Sec. Notes, Ser.
B,
Caa 750 11.50%, 9/15/00......... 622,500
Sr. Sub. Notes, Ser. B,
Ca 400 13.30%, 7/15/02......... 216,000
-----------
2,406,000
-----------
Financial Services--1.8%
Acme Holdings, Inc.,
Sr. Notes,
Ca 500 11.75%, 6/1/00.......... 160,000
American Financial
Corp.,
Sub. Deb., Ser. B,
NR 815 12.00%, 9/3/99.......... 815,000
Lomas Mortgage USA,
Inc.,
Sr. Notes,
B1 500 10.25%, 10/1/02......... 420,000
-----------
1,395,000
-----------
Food & Beverage--8.4%
Curtice Burns Foods,
Inc.,
Sr. Sub. Notes,
B3 $ 500# 12.25%, 2/1/05.......... $ 520,000
Del Monte Corp.,
Sub. PIK Notes,
NR 1,193 12.25%, 9/1/02.......... 1,088,760
Di Giorgio Corp.,
Sr. Notes,
B2 375# 12.00%, 2/15/03......... 330,000
Fresh Del Monte Produce,
N.V.,
Sr. Notes,
B1 1,000# 10.00%, 5/1/03.......... 700,000
Pilgrim's Pride Corp.,
Sr. Sub. Notes,
B3 1,000# 10.875%, 8/1/03......... 930,000
Premium Standard Farm
Finance L.P.,
Sr. Sec. Disc. Notes,
Zero Coupon (until
9/15/96)
NR 1,385 12.00%, 9/15/03......... 1,108,000
Specialty Foods Acquisition Corp.,
Sr. Sec. Disc. Notes,
Zero Coupon (until
8/15/99),
Caa 500 13.00%, 8/15/05....... 237,500
Sr. Sub. Notes,
B3 500 11.25%, 8/15/03......... 477,500
Sr. Unsec. Notes,
B2 1,000# 10.25%, 8/15/01......... 960,000
-----------
6,351,760
-----------
Gaming--6.8%
Casino America, Inc.,
First Mtge. Bonds,
B1 1,000DD 11.50%, 11/15/01........ 960,000
Casino Magic Finance
Corp.,
First Mtge. Bonds,
B1 750DD 11.50%, 10/15/01........ 570,000
Fitzgerald Gaming Corp.,
Sr. Sec. Notes,
NR 250DD 13.50%, 3/15/96......... 135,000
GB Property Funding
Corp.,
First Mtge. Notes,
B2 500# 10.875%, 1/15/04........ 430,000
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
Principal
Moody's Amount Value
Rating (000) Description (a) (Note 1)
- -----------------------------------------------------------------
<C> <C> <S> <C>
Gaming (cont`d)
Grand Casino Resorts,
Inc.,*
First Mtg. Notes, Ser
B,
12.50%, 2/1/00, Ser.
NR $ 500 B..................... $ 500,000
Hollywood Casino Corp.,
Sr. Sec. Notes,
NR 1,275 14.00%, 4/1/98.......... 1,351,500
Sam Houston Race Park,
Ltd.,
Sr. Sec. Notes,
NR 500DD 11.75%, 7/15/99......... 75,000
Showboat, Inc.,
Sr. Sub. Notes,
B2 500# 13.00%, 8/1/09.......... 515,000
Trump Plaza Funding,
Inc.,
First Mtge. Notes,
B3 500# 10.875%, 6/15/01........ 400,000
Trump Taj Mahal Funding,
Inc.,
First Mtg. PIK Bonds,
Class B,
Caa 250 11.35%, 11/15/99........ 177,500
-----------
5,114,000
-----------
Healthcare--3.2%
Continental Medical
System, Inc.,
Sr. Sub. Notes,
B2 1,000 10.875%, 8/15/02........ 885,000
National Medical
Enterprises Inc.,
Sr. Sub. Notes,
Ba3 1,000 10.125%, 3/1/05......... 1,021,250
Ornda HealthCorp, Inc.,
Sr. Sub. Notes,
B2 500# 12.25%, 5/15/02......... 541,250
-----------
2,447,500
-----------
Home Builders & Real Estate--4.3%
Baldwin Co.,
Sr. Notes,
B2 750# 10.375%, 8/1/03......... 465,000
Continental Homes
Holdings,
Sr. Notes,
B1 500# 12.00%, 8/1/99.......... 475,000
Engle Homes, Inc.,
Sr. Notes,
B2 500# 11.75%, 12/15/00........ 456,000
Forecast Group, L.P.,
Sr. Notes,
B3 500# 11.375%, 12/15/00....... 310,000
JM Peters Co. Inc.,
Sr. Note
B3 $ 500#DD 12.75%, 5/1/02.......... $ 405,000
NVR, Inc.,
Sr. Notes,
B2 1,000# 11.00%, 4/15/03......... 895,000
The Presley Companies,
Sr. Notes,
B2 250# 12.50%, 7/1/01.......... 215,000
-----------
3,221,000
-----------
Leisure & Tourism--0.9%
Host Marriott
Hospitality, Inc.,
Sr. Notes,
B1 300 10.625%, 2/1/00......... 300,000
Kloster Cruise Ltd.,
Sr. Sec. Notes,
B2 500## 13.00%, 5/1/03.......... 387,500
-----------
687,500
-----------
Paper & Packaging--11.6%
Domtar, Inc.,
Notes,
Ba1 750# 12.00%, 4/15/01......... 813,750
Sr. Notes,
Ba1 250# 11.75%, 3/15/99......... 266,250
Fort Howard Corp.,
Jr. Sub. Deb.,
Zero Coupon (until
11/1/94),
B3 750# 14.125%, 11/1/04........ 755,625
Gaylord Container Corp.,
Sr. Sub. Disc. Notes,
Zero Coupon (until
5/15/96),
Caa 1,000 12.75%, 5/15/05......... 925,000
Indah Kiat International
Finance Co.,
Sr. Sec. Notes, Ser.
C,
Ba3 1,000 12.50%, 6/15/06......... 980,000
Ivex Packaging Corp.,
Sr. Disc. Deb., Ser.
B,
Zero Coupon (until
3/15/00),
Caa 1,250 13.25%, 3/15/05......... 553,125
Sr. Sub. Notes,
B3 500# 12.50%, 12/15/02........ 522,500
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Principal
Moody's Amount Value
Rating (000) Description (a) (Note 1)
- -----------------------------------------------------------------
<C> <C> <S> <C>
Paper & Packaging (cont'd)
Mail Well Envelope
Corp.,
Sr. Sub. Notes,
B3 $ 250# 10.50%, 2/15/04......... $ 223,750
Mail Well Holding, Inc.,
Sr. Notes,
Zero Coupon (until
12/15/00),
Caa 900DD 11.75%, 2/15/06......... 360,000
Malette, Inc.,
Sr. Sec'd. Notes,
Ba3 500 12.25%, 7/15/04......... 510,000
Neodata Services, Inc.,
Sr. Def'd. Cpn. Notes,
Ser. B,
Zero Coupon (until
5/1/96),
B3 750 12.00%, 5/1/03.......... 585,000
SD Warren Corp.,
Sr. Sub. Notes,
B1 500# 12.00%, 12/15/04........ 530,000
Seminole Kraft Corp.,
Sub. Notes,
NR 500 13.50%, 10/15/96........ 500,000
Stone Container Corp.,
Sr. Notes,
B1 750# 12.625%, 7/15/98........ 806,250
Williamhouse Regency
Delaware, Inc.,
Sr. Sub. Deb.,
B2 500# 11.50%, 6/15/05......... 482,500
-----------
8,813,750
-----------
Publishing--6.1%
Affiliated Newspapers
Investments, Inc.,
Sr. Disc. Notes,
Zero Coupon (until
7/1/99),
B3 500DD 13.25%, 7/1/06........ 245,000
Affinity Group, Inc.,
Sr. Sub. Notes,
B2 500# 11.50%, 10/15/03........ 490,000
Big Flower Press, Inc.,
Sr. Sub. Notes,
B3 1,000# 10.75%, 8/1/03.......... 940,000
Garden State Newspapers,
Sr. Sub. Notes,
B2 500# 12.00%, 7/1/04.......... 500,000
Imax Corp.,
Sr. Notes,
NR $ 500 7.00%, 3/1/01........... $ 415,000
Newcity Communications,
Inc.,
Sr. Sub. Notes,
B3 1,000# 11.375%, 11/1/03........ 930,000
Sullivan Graphics, Inc.,
Sr. Sub. Notes,
Ca 1,000 15.00%, 2/1/00.......... 1,058,750
-----------
4,578,750
-----------
Restaurants--2.8%
Carrols Corp.,
Sr. Notes,
B3 250# 11.50%, 8/15/03......... 231,250
Family Restaurants,
Inc.,
Sr. Notes,
B1 1,000## 9.75%, 2/1/02........... 755,000
Flagstar Corp.,
Sr. Notes,
B2 675 10.75%, 9/15/01......... 658,125
B2 500 10.875%, 12/1/02........ 487,500
-----------
2,131,875
-----------
Retail--5.7%
Apparel Retailers, Inc.
Sr. Disc. Deb.,
Zero Coupon (until
8/15/98),
Caa 1,000 12.75%, 8/15/05......... 560,000
Cole National Corp.,
Sr. Notes,
B1 625# 11.25%, 10/1/01......... 603,125
Eye Care Centers
America, Inc.,
Sr. Notes,
NR 500DD 12.00%, 10/1/03......... 390,000
Hills Stores Co.,
Sr. Notes,
NR 1,000 10.25%, 9/30/03......... 940,000
Pier 1 Imports, Inc.,
Sub. Deb.,
B1 339# 11.50%, 7/15/03......... 349,170
Specialty Retailers,
Inc.,
Sr. Sub. Notes,
B3 500 11.00%, 8/15/03......... 461,250
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Principal
Moody's Amount Value
Rating (000) Description (a) (Note 1)
- -----------------------------------------------------------------
<C> <C> <S> <C>
Retail (cont'd)
Thrifty Payless, Inc.,
Sr. Notes,
B2 $ 500 11.75%, 4/15/03......... $ 520,000
Sr. Sub. Notes,
B3 500DD 12.25%, 4/15/04......... 500,000
-----------
4,323,545
-----------
Services--0.6%
ICF International, Inc.,
Sr. Sub. Notes,
B3 500DD 12.00%, 12/31/03........ 450,000
-----------
Steel & Metals--5.2%
Geneva Steel Co., Sr.,
Notes,
B1 500# 11.125%, 3/15/01........ 472,500
GS Technologies Operating, Inc.,
Sr. Notes,
B2 500# 12.00%, 9/1/04.......... 513,750
Horsehead Industries,
Inc.,
Sr. Sub. Ext. Reset
Notes,
B1 500 15.75%, 6/1/97.......... 515,000
Sub. Notes,
B2 500 14.00%, 6/1/99.......... 511,250
Kaiser Aluminum &
Chemical Corp.,
Sr. Sub. Notes,
B2 250# 12.75%, 2/1/03.......... 260,000
Tubos De Aceros De
Mexico SA,
NR 500 13.75%, 12/8/99......... 400,000
Ucar Global Enterprises
Inc.,
Sr. Sub. Notes,
B2 750# 12.00%, 1/15/05......... 787,500
W C I Steel, Inc.,
Sr. Notes,
B1 500# 10.50%, 3/1/02.......... 485,000
-----------
3,945,000
-----------
Supermarkets--8.8%
Farm Fresh, Inc.,
Sr. Notes,
B2 500# 12.25%, 10/1/00......... 462,500
Food 4 Less
Supermarkets, Inc.,
Sr. Disc. Notes, Ser.
B,
Zero Coupon (until
12/15/97),
Caa $ 500 15.25%, 12/15/04........ $ 392,500
B3 500 13.75%, 6/15/01......... 532,500
(cost $530,625; purchase
date--3/22/94),
Sr. Sub. Notes,
B3 500 13.75%, 6/15/01**....... 532,500
Pathmark Stores, Inc.
Sr. Sub. Notes,
B2 750 9.625%, 5/1/03.......... 699,375
Jr. Sub. Notes,
B3 500# Zero Coupon, 11/1/03.... 270,000
Sub. Notes,
B3 500# 12.625%, 6/15/02........ 527,500
Penn Traffic Co.,
Sr. Sub. Notes,
B2 1,500## 9.625%, 4/15/05......... 1,406,250
Pueblo Xtra
International, Inc.,
Sr. Notes,
B2 1,000 9.50%, 8/1/03........... 845,000
Ralphs Grocery Co.,
Sr. Sub. Notes,
B2 500## 9.00%, 4/1/03........... 485,000
White Rose Foods, Inc.,
Sr. Notes,
NR 1,000 Zero Coupon, 11/1/98.... 530,000
-----------
6,683,125
-----------
Technology--1.3%
Bell & Howell Holding
Co.,
Deb., Ser. B,**
(cost $572,075;
purchase
date--3/31/94),
Zero Coupon (until
3/1/00),
B3 1,000 11.25%, 3/1/05.......... 512,500
Waters Corp.,
Sr. Sub. Notes,
NR 500 12.75%, 9/30/04......... 507,500
-----------
1,020,000
-----------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Principal
Moody's Amount Value
Rating (000) Description (a) (Note 1)
- -----------------------------------------------------------------
<C> <C> <S> <C>
Telecommunications--2.4%
Dial Call
Communications, Inc.,
Sr. Disc. Notes,
Caa $ 1,000DD Zero Coupon, 4/15/04.... $ 280,000
Page Mart, Inc.,
Sr. Disc. Exchg.
Notes,
Zero Coupon (until
11/1/98),
NR 1,000DD 12.25%, 11/1/03......... 610,000
Sr. Disc. Note,
Zero Coupon (until
2/1/00),
NR 1,000DD 15.05%, 2/1/05.......... 542,500
Pricellular Wireless
Corp.,
Sr. Sub. Disc. Notes,
Zero Coupon (until
11/15/97),
Caa 500 14.00%, 11/15/01...... 367,500
-----------
1,800,000
-----------
Textiles--3.9%
CMI Industries, Inc.,
Sr. Sub. Notes,
B1 1,000## 9.50%, 10/1/03.......... 860,000
Forstmann Textiles,
Inc.,
Sr. Sub. Notes,
B3 755# 14.75%, 4/15/99......... 785,200
(cost $445,814; purchase
date--7/23/92),
B3 380 14.75%, 4/15/99**....... 395,200
Westpoint Stevens, Inc.,
Sr. Sub. Deb.,
B3 1,000# 9.375%, 12/15/05........ 930,000
-----------
2,970,400
-----------
Transportation--0.7%
Transtar Holdings L.P.,
Sr. Disc. Notes,
Zero Coupon (until
12/15/99),
B-* 1,000 13.375%, 12/15/03....... 550,000
-----------
Waste Management--0.6%
Clean Harbors, Inc.,
Sr. Notes,
B2 500 12.50%, 5/15/01......... 450,000
-----------
Total bonds
(cost $95,227,795).... 90,222,874
-----------
<CAPTION>
- -----------------------------------------------------------------
Value
Shares Description (a) (Note 1)
- -----------------------------------------------------------------
<C> <C> <S> <C>
COMMON STOCKS--0.9%
Conglomerate--0.3%
3,770 PG Partners I L.P.,..... $ 169,672
Thermadyne Industries,
2,660 Inc.,D................ 38,570
-----------
208,242
-----------
Energy--0.1%
Petrolane, Inc.,D
4,900 Class B................. 66,150
-----------
Food & Beverage--0.5%
68,040 RJR Nabisco, Inc.,...... 382,725
Specialty Foods
7,500 Acquisition Corp.,D... 15,000
-----------
397,725
-----------
Retail
Thrifty Payless, Inc.,D
9,500 Class C................. 35,625
-----------
Total common stocks
(cost $1,230,994)..... 707,742
-----------
PREFERRED STOCKS--1.3%
Healthcare--0.2%
FoxMeyer Corp.
Ser. A Exchangeable
4,550 4.20.................. 159,913
-----------
Steel--0.6%
Republic Engineered
41,012 Steel, Inc............ 461,399
-----------
Supermarkets--0.5%
Pantry Pride, Inc.D
14.875%, Exchangeable,
2,500 Ser. B................ 242,500
Supermarkets General
Holdings Corp.,
5,000 14.08%.................. 110,000
-----------
352,500
-----------
Total preferred stocks
(cost $986,299)....... 973,812
-----------
WARRANTSD--0.1%
Building & Related Industries
Miles Homes, Inc.,
6,000 expiring 4/1/97......... 3,000
Southdown, Inc.,
5,000 expiring 10/15/96....... 20,000
-----------
23,000
-----------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Value
Shares Description (a) (Note 1)
- ------------------------------------------------------------------
<C> <C> <S> <C>
Chemicals & Plastic
Uniroyal Technology
Corp.,
5,000 expiring 6/1/03......... $ 5,000
-----------
Energy
Empire Gas Corp.,
690 expiring 7/15/04........ 690
Ugi Corp.
833 expiring 3/31/98........ 125
-----------
815
-----------
Gaming
Casino America, Inc.,
3,263 expiring 11/15/96....... 1,631
Casino Magic Finance
Corp.,
4,500 expiring 10/14/96....... 225
Fitzgerald Gaming Corp.,
250 expiring 3/15/96........ 11,250
Sam Houston Race Park,
Ltd.
2,000 expiring 7/15/99........ 200
-----------
13,306
-----------
Retail
Eye Care Centers
America, Inc.,
500 expiring 10/1/03........ 2,500
-----------
Services
ICF International, Inc.,
2,400 expiring 12/31/98....... 1,800
-----------
Supermarkets
Purity Supreme, Inc.,**
1,733 expiring 8/6/97......... 35
-----------
Telecommunications
Dial Page, Inc.
1,000 expiring 4/25/99........ $ 750
Pagemart Nationwide,
Inc.,
4,600 expiring 11/1/03........ 14,950
-----------
15,700
-----------
Total warrants
(cost $47,465)........ 62,156
-----------
RIGHTSD
Automotive Parts
Foamex/JPS Automotive
L.P.,
expiring July '99
1,000 (cost $0)............. 15,000
-----------
Total long-term
investments
(cost $97,492,553).... 91,981,584
-----------
Total
Investments--121.5%
(cost $97,492,553)...... 91,981,584
Liabilities in excess of
other
assets--(21.5%)....... (16,269,632)
-----------
Net Assets--100%........ $75,711,952
-----------
-----------
</TABLE>
- ------------------
(a) The following abbreviations are used in portfolio descriptions:
PIK--Payment in kind securities.
<TABLE>
<C> <S>
# Total security segregated as collateral for line
of credit. Aggregate value of segregated
securities--$34,563,522; (Note 4).
## Portion of security segregated as collateral for
line of credit. Aggregate value of segregated
securities--$6,495,676; (Note 4).
* Standard & Poor's Rating.
** Indicates a restricted security; the aggregate
cost of such securities is $1,548,514. The
aggregate value ($1,440,200) is approximately 1.9%
of net assets.
D Non-income producing securities.
DD Consists of more than one class of securities
traded together as a unit; generally bonds with
attached stock or warrants.
</TABLE>
NR--Not rated by Moody's or Standard & Poor's.
See Notes to Financial Statements.
11
<PAGE>
- ----------------------------------------------------------
THE HIGH YIELD INCOME FUND, INC.
Statement of Assets and Liabilities
February 28, 1995
(Unaudited)
- ----------------------------------------------------------
<TABLE>
<S> <C>
Assets
Investments, at value (cost
$97,492,553).......................... $91,981,584
Receivable for investments sold......... 5,467,655
Interest receivable..................... 2,405,029
Prepaid expenses and other assets....... 7,959
-----------
Total assets...................... 99,862,227
-----------
Liabilities
Bank overdraft.......................... 555,221
Loan payable (Note 4)................... 20,000,000
Payable for investments purchased....... 3,328,382
Loan interest payable................... 111,407
Accrued expenses........................ 81,760
Due to Manager.......................... 42,686
Deferred trustees' fees................. 30,819
-----------
Total liabilities................. 24,150,275
-----------
Net Assets.............................. $75,711,952
-----------
-----------
Net assets were comprised of:
Common stock, at par.................. $ 109,516
Paid-in capital in excess of par...... 99,421,289
-----------
99,530,805
Accumulated distributions in excess of
net investment income............... (15,388)
Accumulated net realized loss on
investments......................... (18,292,496)
Net unrealized depreciation on
investments......................... (5,510,969)
-----------
Net assets, February 28, 1995......... $75,711,952
-----------
-----------
Net asset value and redemption price per
share ($75,711,952 / 10,951,633 shares
of common stock issued and
outstanding).......................... $6.91
-----------
-----------
</TABLE>
- ----------------------------------------------------------
THE HIGH YIELD INCOME FUND, INC.
Statement of Operations
Six Months Ended February 28, 1995
(Unaudited)
- ----------------------------------------------------------
<TABLE>
<S> <C>
Net Investment Income
Income
Interest............................... $ 5,729,783
Dividends.............................. 145,270
-----------
5,875,053
-----------
Expenses
Management fee......................... 262,306
Custodian's fees and expenses.......... 60,000
Audit fee.............................. 27,000
Transfer agent's fees and expenses..... 27,000
Reports to shareholders................ 25,000
Trustees' fees......................... 20,000
Registration fees...................... 13,000
Insurance.............................. 9,000
Legal fees............................. 7,000
Miscellaneous.......................... 1,031
-----------
Total operating expenses............. 451,337
Loan interest expense (Note 4)......... 635,312
-----------
Total expenses....................... 1,086,649
-----------
Net investment income.................... 4,788,404
-----------
Realized and Unrealized
Loss on Investments
Net realized loss on investment
transactions........................... (2,385,838)
Net change in unrealized
appreciation/depreciation on
investments............................ (846,437)
-----------
Net loss on investments.................. (3,232,275)
-----------
Net Increase in Net Assets
Resulting from Operations................ $ 1,556,129
-----------
-----------
</TABLE>
See Notes to Financial Statements. See Notes to Financial Statements.
12
<PAGE>
- ----------------------------------------------------------
THE HIGH YIELD INCOME FUND, INC.
Statement of Cash Flows
Six Months Ended February 28, 1995
(Unaudited)
- ----------------------------------------------------------
<TABLE>
<S> <C>
Increase (Decrease) in Cash
Cash flows provided from operating
activities:
Interest and dividends received
(excluding
discount amortization of
$907,210).......................... $ 4,915,335
Operating expenses paid.............. (483,651)
Loan interest paid................... (619,113)
Maturities of short-term portfolio
investments, net................... 643,000
Purchases of long-term portfolio
investments........................ (34,491,255)
Proceeds from disposition of
long-term
portfolio investments.............. 33,893,240
Deferred expenses.................... 8,149
----------------
Net cash provided from operating
activities......................... 3,865,705
----------------
Cash flows used for financing
activities:
Cash dividends paid (excluding
reinvestment of dividends of
$381,149).......................... (4,422,643)
----------------
Net decrease in cash................... (556,938)
Cash at beginning of period............ 1,717
----------------
Cash at end of period.................. $ (555,221)
----------------
----------------
Reconciliation of Net Increase in Net Assets
to Net Cash Provided from Operating Activities
Net increase in net assets resulting
from operations...................... $ 1,556,129
----------------
Decrease in investments................ 1,015,460
Net realized loss on investment
transactions......................... 2,385,838
Net change in net unrealized
appreciation/depreciation on
investments.......................... 846,437
Increase in receivable for investments
sold................................. (5,053,280)
Increase in interest receivable........ (52,507)
Decrease in deferred expenses and other
assets............................... 8,149
Increase in payable for investments
purchased............................ 3,175,594
Decrease in accrued expenses and other
liabilities.......................... (16,115)
----------------
Total adjustments.................... 2,309,576
----------------
Net cash provided from operating
activities....................... $ 3,865,705
----------------
----------------
</TABLE>
- ----------------------------------------------------------
THE HIGH YIELD INCOME FUND, INC.
Statement of Changes
in Net Assets
(Unaudited)
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Increase (Decrease) in Net
Assets
Six Months
Ended Year Ended
February 28, August 31,
Operations 1995 1994
----------------- ---------------
Net investment income..... $ 4,788,404 $ 9,564,848
<S> <C> <C>
Net realized gain (loss)
on investment
transactions............ (2,385,838) 1,939,634
Net change in unrealized
appreciation/depreciation
of investments.......... (846,437) (7,045,586)
----------------- ---------------
Net increase in net assets
resulting from
operations.............. 1,556,129 4,458,896
----------------- ---------------
Dividends paid to
shareholders from net
investment income......... (4,750,606) (9,945,260)
Dividends paid to
shareholders in excess of
net investment income..... -- (485,187)
Net asset value of shares
issued to shareholders in
reinvestment of
dividends................. 381,149 708,165
----------------- ---------------
Total decrease.............. (2,813,328) (5,263,386)
Net Assets
Beginning of period......... 78,525,280 83,788,666
----------------- ---------------
End of period............... $75,711,952 $ 78,525,280
----------------- ---------------
----------------- ---------------
</TABLE>
See Notes to Financial Statements. See Notes to Financial Statements.
13
<PAGE>
- ----------------------------------------------------------
THE HIGH YIELD INCOME FUND, INC.
Notes to Financial Statements
(Unaudited)
- ----------------------------------------------------------
The High Yield Income Fund, Inc. (the ``Fund'') was organized in Maryland on
August 21, 1987 as a diversified, closed-end management investment company. The
Fund's primary investment objective is to maximize current income to
shareholders through investment in a diversified portfolio of high-yield,
fixed-income securities rated in the medium to lower categories by recognized
rating services or non-rated securities of comparable quality. As a secondary
investment objective, the Fund will seek capital appreciation, but only when
consistent with its primary objective. The ability of issuers of debt securities
held by the Fund to meet their obligations may be affected by economic or
political developments in a specific industry or region.
Note 1. Accounting The following is a summary of
Policies significant accounting policies
followed by the Fund in the preparation of its
financial statements.
Security Valuation: Portfolio securities that are actively traded in the
over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, are valued at the mean between the
most recently quoted bid and asked prices provided by principal market makers.
Any security for which the primary market is on an exchange is valued at the
last sales price on such exchange on the day of valuation or, if there was no
sale on such day, the last bid price quoted on such day. Securities issued in
private placements are valued at the mean between the bid and asked prices
provided by principal market makers. Any security for which a reliable market
quotation is unavailable is valued at fair value as determined in good faith by
or under the direction of the Fund's Board of Directors.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, take
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction including accrued interest.
If the seller defaults and the value of the collateral declines, or if
bankruptcy proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
The Fund may invest up to 20% of its total assets in securities which are not
readily marketable, including those which are restricted as to disposition under
securities law (``restricted securities'').
Cash Flow Information: The Fund invests in securities and distributes dividends
from net investment income which are paid in cash or are reinvested at the
discretion of shareholders. These activities are reported in the Statement of
Changes in Net Assets and additional information on cash receipts and cash
payments is presented in the Statement of Cash Flows.
Accounting practices that do not affect reporting activities on a cash basis
include carrying investments at value, accruing income on PIK securities and
amortizing discounts on debt obligations. Cash, as used in the Statement of Cash
Flows, is the amount reported as ``Cash'' in the Statement of Assets and
Liabilities.
Security Transactions and Investment Income: Security transactions are recorded
on the trade date. Realized and unrealized gains and losses from securities
transactions are calculated on the identified cost basis. Interest income which
is comprised of three elements: stated coupon rate, original issue discount and
market discount, is recorded on the accrual basis. Dividend income is recorded
on the ex-dividend date.
Federal Income Taxes: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to shareholders.
Therefore, no federal income tax provision is required.
Dividends and Distributions: The Fund expects to pay dividends of net investment
income monthly and make distributions at least annually of net capital gains, if
any. Dividends and distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Note 2. Agreements The Fund has a management
agreement with Prudential Mutual Fund Management,
Inc. (``PMF''). Pursuant to this agreement, PMF has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PMF has entered into a subadvisory agreement with The Prudential
Investment Corporation (``PIC''). PIC furnishes
14
<PAGE>
investment advisory services in connection with the management of the Fund. PMF
pays for the services of PIC, the cost of compensation of officers of the Fund,
occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears
all other costs and expenses.
The management fee paid PMF is computed weekly and payable monthly, at an
annual rate of .70 of 1% of the Fund's average weekly net assets.
PMF and PIC are indirect, wholly-owned subsidiaries of the (``Prudential'')
Insurance Company of America.
Note 3. Portfolio Purchases and sales of invest
Securities ment securities, other than
short-term investments, for the six months ended
February 28, 1995 aggregated $37,666,849 and $38,946,519, respectively.
The cost basis of investments for federal income tax purposes at February 28,
1995 was $97,617,629 and, accordingly, net unrealized depreciation including
short-term investments, for federal income tax purposes was $5,636,045 (gross
unrealized appreciation-$1,729,166; gross unrealized depreciation-$7,365,211).
The Fund had a capital loss carryforward as of August 31, 1994 of
approximately $15,825,300 of which $514,200 expires in 1998, $6,419,700 expires
in 1999 and $8,891,400 expires in 2000. During the fiscal year ended August 31,
1994 the Fund utilized approximately $2,117,231 of its capital loss
carryforward. Accordingly, no capital gains distribution is expected to be paid
to shareholders until net realized gains have been realized in excess of such
amounts.
Note 4. Borrowings The Fund approved a
$20,000,000 uncommitted line of credit with State
Street Bank & Trust Co. Interest on any such borrowings outstanding fluctuates
daily, at one percentage higher than the Federal Funds rate.
The average daily balance outstanding and the maximum face amount of
borrowings outstanding at any month end for the six months ended February 28,
1995 was $20,000,000 at a weighted average interest rate of 6.32%.
Note 5. Capital There are 200 million shares
of $.01 par value common stock authorized.
Prudential owned 11,000 shares of common stock as of February 28, 1995.
During the six months ended February 28, 1995 and the fiscal year ended
August 31, 1994 the Fund issued 54,307 and 89,141 shares, respectively, in
connection with the reinvestment of dividends.
Note 6. Dividends On March 1 and April 3 the
and Distributions Board of Directors of the Fund
declared dividends of $.0725 per share payable on
March 31 and April 28, respectively, to shareholders of record on March 15 and
April 13, respectively.
Note 7. Quarterly Data
(Unaudited)
<TABLE>
<CAPTION>
Net
realized and Net increase
unrealized in net assets
Net Investment gains
(losses) on resulting from
Quarterly Total income
investments operations
period ended income Amount Per share Amount
Per share Amount Per share
- ------------------ ---------- ------------------------ --------------
- ------------ -------------------------
<S> <C> <C> <C> <C>
<C> <C> <C>
November 30, 1992 $2,983,763 $2,530,119 $ .23 $ (1,883,941)
$ (.18) $ 646,178 $ .06
February 28, 1993 3,100,143 2,659,916 .25 1,747,668
.16 4,407,584 .40
May 31, 1993 2,985,599 2,541,318 .24 1,893,736
.18 4,435,054 .41
August 31, 1993 3,585,185 3,146,381 .29 257,925
.02 3,404,306 .32
November 30, 1993 2,959,989 2,507,291 .23 1,136,926
.11 3,644,217 .34
February 28, 1994 2,718,394 2,272,046 .21 1,785,670
.16 4,057,716 .37
May 31, 1994 2,841,363 2,357,649 .22 (5,939,341)
(.55) (3,581,692) (.33)
August 31, 1994 2,950,781 2,427,862 .21 (2,089,206)
(.18) 338,656 .03
November 30, 1994 2,921,772 2,392,424 .22 (4,432,809)
(.41) (2,040,385) (.19)
February 28, 1995 2,953,281 2,395,980 .22 1,200,534
.11 3,596,514 .33
</TABLE>
<TABLE>
<CAPTION>
Dividends
and Share
Quarterly distributions price
period ended Amount Per share High Low
- ------------------ ------------------------ ------------
<S> <C> <C> <C> <C>
November 30, 1992 $2,417,334 $ .2250 $8 $7
February 28, 1993 2,421,213 .2250 83/8 7 1/4
May 31, 1993 2,424,024 .2250 81/2 8 1/8
August 31, 1993 2,429,851 .2250 87/8 8 1/8
November 30, 1993 2,488,477 .2300 81/2 8 1/8
February 28, 1994 3,046,577 .2800 91/8 8 3/8
May 31, 1994 2,526,830 .2300 91/8 7 3/4
August 31, 1994 2,368,563 .2100 81/2 7 3/4
November 30, 1994 2,373,295 .2200 8 7
February 28, 1995 2,377,311 .2200 75/8 6 7/8
</TABLE>
15
<PAGE>
- --------------------------------------------------------------------------------
THE HIGH YIELD INCOME FUND, INC.
Financial Highlights
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended August 31,
February 28, ----------
- ---------------------------------------------
1995 1994
1993 1992 1991 1990
-------------- -------
- ------- ------- ------- -------
<S> <C> <C>
<C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year*............ $ 7.21 $ 7.75
$ 7.46 $ 6.84 $ 6.79 $ 8.60
-------------- -------
- ------- ------- ------- -------
Net investment income.......................... .44 .87
1.01 .90 .90 .97
Net realized and unrealized gain (loss) on
investments.................................. (.30) (.46)
.18 .62 .08 (1.68)
-------------- -------
- ------- ------- ------- -------
Total from investment operations............. .14 .41
1.19 1.52 .98 (.71)
-------------- -------
- ------- ------- ------- -------
Dividends paid to shareholders from net
investment income............................ (.44) (.91)
(.90) (.90) (.90) (.97)
Distributions from net realized capital
gains........................................ -- --
- -- -- -- --
Distributions to shareholders in excess of net
investment income............................ -- (.04)
- -- -- -- --
Return of capital distributions................ -- --
- -- -- (.03) (.13)
-------------- -------
- ------- ------- ------- -------
Total dividends and distributions............ (.44) (.95)
(.90) (.90) (.93) (1.10)
-------------- -------
- ------- ------- ------- -------
Net asset value, end of period*................ $ 6.91 $ 7.21
$ 7.75 $ 7.46 $ 6.84 $ 6.79
-------------- -------
- ------- ------- ------- -------
-------------- -------
- ------- ------- ------- -------
Market price per share, end of period*......... $ 7.63 $ 7.88
$ 8.75 $ 7.75 $ 6.63 $ 5.75
-------------- -------
- ------- ------- ------- -------
-------------- -------
- ------- ------- ------- -------
TOTAL INVESTMENT RETURN+....................... 1.50% 1.67%
26.80% 31.79% 34.15% (31.20)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)................ $ 75,712 $78,525
$83,789 $80,007 $73,080 $72,494
Average net assets (000)....................... $ 75,413 $83,241
$80,747 $77,579 $67,388 $80,780
Ratio of expenses to average net assets........ 2.91%DD 2.29%
2.20% 1.55% 1.39% 1.43%
Ratio of net investment income to average net
assets....................................... 12.80%DD 11.49%
13.47% 12.35% 14.23% 12.79%
Portfolio turnover rate........................ 41% 79%
83% 74% 72% 27%
Asset coverage................................. 479% 493%
519% 500% -- --
Total debt outstanding at period end (000)..... $ 20,000 $20,000
$20,000 $20,000 -- --
</TABLE>
- ---------------
* NAV and market value published in The Wall Street Journal each Monday.
D Total investment return is calculated assuming a purchase of common stock
at the current market price on
the first day and a sale at the current market price on the last day of
each period reported. Dividends are assumed, for purposes of this
calculation, to be reinvested at prices obtained under the Fund's
dividend and reinvestment plan. Does not reflect brokerage commissions.
DD Annualized
See Notes to Financial Statements.
16
<PAGE>
Directors
Eugene C. Dorsey
Donald D. Lennox
Lawrence C. McQuade
Richard A. Redeker
Stanley E. Shirk
Robin B. Smith
Officers
Lawrence C. McQuade, President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Custodian and Transfer Agent
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Dechert Price & Rhoads
1500 K Street N.W.
Washington, D.C. 20005
The accompanying financial statements as of February 28, 1995,
were not audited and, accordingly, no opinion is expressed on
them.
This report is for stockholder information. This is not a
prospectus intended for use in the purchase or sale of fund
shares.
The High Yield Income Fund, Inc.
One Seaport Plaza
New York, NY 10292
Toll free (800) 451-6788
or collect (212) 214-3332
429904105
