[THE AMERICAN FUNDS GROUP(R)]
AMERICAN HIGH-INCOME TRUST
Annual Report for the year ended September 30, 1999
[cover photo: close-up of coin]
AMERICAN HIGH-INCOME TRUST(SM) seeks a high level of current income and,
secondarily, capital appreciation through a diversified, carefully supervised
portfolio consisting primarily of lower rated, higher risk corporate bonds.
American High-Income Trust is one of the 29 mutual funds in The American Funds
Group,(r) the nation's third-largest mutual fund family. For more than six
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.
RESULTS AT A GLANCE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
One Year Five Years Ten Years
RETURNS (for periods ended
September 30, 1999)*
annualized
American High-Income Trust +8.11% 9.28% 10.26%
Credit Suisse First
Boston High Yield Index +3.95 +8.62 +10.52
Salomon Smith Barney Broad
Investment-Grade
(BIG) Bond Index -0.27 +7.86 +8.16
Lipper High Yield Bond
Fund Index +5.25 +8.60 +9.47
</TABLE>
*Change in value of investment with dividends and capital gain distributions
reinvested.
30-DAY RATES (as of October 31, 1999)
Yield based on Securities and Exchange Commission formula 9.45%
Distribution rate based on offering price 8.89
Distribution rate based on net asset value 9.33
The SEC yield reflects income the fund expects to earn based on its current
portfolio of securities, while the distribution rate is based solely on the
fund's past dividends. Accordingly, the fund's SEC yield and distribution rate
may differ.
For the 10 years ended September 30, 1999, American High-Income Trust ranked
10th in total return among the 54 high current yield funds in existence
throughout the period, according to Lipper, Inc. For the five years ended
September 30, it ranked 18th of 101, and for the 12 months ended September 30,
the fund ranked 48th of 302. Lipper rankings do not reflect the effects of
sales charges.
PREPARING FOR THE YEAR 2000
The fund's key service providers - Capital Research and Management Company, the
investment adviser, and American Funds Service Company, the transfer agent -
have updated all computer systems to process date-related information properly
following the turn of the century. Other preparations continue, including
external monitoring and contingency planning. If you'd like more detailed
information, call Shareholder Services at 800/421-0180, ext. 21, or visit our
Web site at www.americanfunds.com.
Fund results in this report were computed without a sales charge unless
otherwise indicated. 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 US QUARTENTEED BY A BANK OR ANY
OTHER ENTITY.
[PHOTO: close-up of coin]
FELLOW SHAREHOLDERS:
American High-Income Trust's fiscal 1999 was marked by sharply diverging trends
in the high-yield bond market. The year can be divided into two distinct
periods - a brief period of rising prices followed by a long downturn - and saw
sharply divergent returns among different kinds of bonds.
Shareholders who reinvested dividends totaling $1.29 a share and a 4.5 cents a
share capital gain paid in December earned a total return of 8.1% for the year
and had an income return of 9.8%. Investors who took distributions in cash had
an income return of 9.4% and saw the value of their holdings decline 1.4%.
The fund's results outpaced its benchmark index and the majority of other
high-yield bond funds. The unmanaged Credit Suisse First Boston High Yield
Index rose 3.9% and the Lipper High Yield Bond Fund Index gained 5.2%. While
high-yield bonds generally posted favorable returns, the unmanaged Salomon
Smith Barney Broad Investment-Grade Bond Index, which measures higher grade
bonds, declined 0.3%.
TWO DISTINCT PERIODS
American High-Income Trust began its fiscal year as the worst of 1998's bond
market turmoil was coming to an end. During most of 1998, U.S. Treasury bonds
rose in price while many other bond prices fell. At the beginning of the year,
however, interest rates on U.S. Treasury bonds began to rise and their prices,
which move in the opposite direction of interest rates, declined. The
high-yield market, which had suffered during the 1998 turmoil, began to
recover. Prices of high-yield bonds rose until May, when a combination of
factors began to push prices lower. Interest rates in the high-yield market,
which had fluctuated since the beginning of the fiscal year, began to rise
steadily. At the same time, the supply of high-yield bonds outstripped demand.
WORLDWIDE DEMAND INCREASES
The fund was helped during the year by its holdings in several areas, including
wireless telecommunications, broadcasting, media and cable television. These
issuers generally did well as worldwide demand for their products and services
exceeded expectations. These industries are also in the midst of a
consolidation phase that has pushed valuations of wireless assets and equity
prices higher, benefiting many of the fund's holdings.
Results in several other industries were disappointing, however. The health
care sector has been hurt by government action to reduce payments to doctors
and hospitals, and many high-yield bonds issued by health care providers
declined in price. The fund's results were also held back by its holdings in
the auto parts industry, with several companies reporting disappointing
results.
It is common for the high-yield bond market to be discussed as though it were a
single entity. In fact, it is normal for some bonds to gain value while others
decline. Finding good opportunities in this multifaceted, fluctuating market
requires in-depth research and the ability to look beyond the current
investment cycle. It often requires the fund's analysts and portfolio
counselors to take a worldwide view when making investment decisions. Beginning
on page 3, we examine the role global research plays in investing within the
United States.
We look forward to reporting to you again in six months.
Cordially,
/s/Paul G. Haaga, Jr. /s/David C. Barclay
Paul G. Haaga, Jr. David C. Barclay
Chairman of the Board President
November 16, 1999
THE VALUE OF A LONG-TERM
PERSPECTIVE
Here's how a $10,000 investment in American High-Income Trust grew between
February 19, 1988, when the fund began operations, and September 30, 1999, the
end of its latest fiscal year. As you can see, that $10,000 grew to $29,409
with all distributions reinvested.
[begin line chart]
$29,979/1/
Credit Suisse First Boston
High Yield Index
$29,409/2,3/
American
High-Income Trust
with dividends reinvested
$27,037/1/
Lipper High Yield Bond
Fund Index
$24,908/1/
Salomon Smith Barney
Broad Investment-Grade
Bond Index
$14,474/4/
Consumer Price Index
(inflation)
$10,000
original investment
<TABLE>
<CAPTION>
American Lipper High Salomon
High-Income Current Brothers
Year ended Credit Suisse Trust/2/,/3/ Yield Broad Consumer
Boston with Bond Funds Investment- Price Index
September High Yield dividends Index/1/ Grade Bond (inflation)
30 Index/1/ reinvested Index/1/ /4/
<S> <C> <C> <C> <C> <C>
1988/5/ $10,446 $10,074 $10,475 $10,222 $10,328
1989 11,367 11,073 10,935 11,367 10,776
1990 12,237 10,628 9,570 12,237 11,440
1991 14,198 13,723 12,290 14,198 11,828
1992 15,999 16,204 15,132 15,999 12,181
1993 17,627 18,568 17,473 17,627 12,509
1994 17,063 18,866 17,899 17,063 12,879
1995 19,461 21,382 20,178 19,461 13,207
1996 20,423 24,308 22,612 20,423 13,603
1997 22,406 27,872 25,995 22,406 13,897
1998 28,841 27,202 25,668 24,975 14,103
1999 29,979 29,409 27,037 24,908 14,474
</TABLE>
[end chart]
/1/All results calculated with dividends reinvested or interest compounded. The
Credit Suisse First Boston and Salomon Smith Barney indexes are unmanaged and
do not reflect sales charges, commissions or expenses. The Lipper index is at
net asset value.
/2/This figure, unlike those shown earlier in this report, reflects payment of
the maximum sales charge of 4.75% on the $10,000 investment. Thus, the net
amount invested was $9,525. As outlined in the prospectus, the sales charge is
reduced for larger investments. No adjustment has been made for income or
capital gain taxes.
/3/Includes reinvested dividends of $20,185 and reinvested capital gain
distributions of $1,292.
/4/Computed from data supplied by the U.S. Department of Labor, Bureau of Labor
Statistics.
/5/For the period February 19 through September 30, 1988.
Past results are not predictive of future results.
AVERAGE ANNUAL COMPOUND RETURNS* (for periods ended September 30, 1999)
Ten Years +9.73%
Five Years +8.22
One Year +2.94
*Assuming reinvestment of all distributions and payment of the 4.75% maximum
sales charge at the beginning of the stated periods.
GLOBAL RESEARCH: THE KEY TO FINDING VALUE IN THE UNITED STATES
[watermark: the word "global"]
[Begin sidebar]
"YOU HAVE TO KNOW WHO YOUR COMPETITION IS, NOT JUST IN THE UNITED STATES BUT
AROUND THE WORLD."
ANALYST ROB NEITHART
[End sidebar]
The world's financial markets have undergone tremendous change since American
High-Income Trust began operations in February 1988. Global trade has nearly
doubled to almost $10 trillion a year, most of Europe has agreed to adopt a
single currency, and American companies have more than tripled their annual
investments abroad - almost $1 trillion in 1998 alone.
While change seems to be accelerating, American High-Income Trust's investment
professionals still follow the same philosophy they did on the fund's first
day: They rely on fundamental research to find the bonds of solid companies
that offer shareholders a high current yield and the opportunity for capital
appreciation. One big difference, though, is that today the fund's analysts
must look beyond America's borders to fully understand companies based in the
United States.
Few investment management firms are as well-positioned to conduct global
research as Capital Research and Management Company, investment adviser to
American High-Income Trust and the other 28 funds in The American Funds Group.
Capital Research and its affiliates have five research offices outside the
United States and more than 45 years of international investing experience.
Capital Research has more than 100 investment professionals, who made over
4,000 research visits to companies outside the U.S. in 1998.
While only 22% of the fund's holdings are in bonds of issuers outside the
United States, even investing in U.S. companies requires a global outlook.
"The economy is truly global now," says Rob Neithart, a fund analyst who
follows companies in developing markets. "You have to know who your competition
is, not just in the United States but around the world. When I'm researching a
company, I have to know if it is overvalued or undervalued compared with
similar companies around the world, because over time those values should
converge."
[photo: close-up of twenty-dollar coin]
In the next few pages we'll look at four industries - amusement parks,
telecommunications, paper, and consumer products - and how American High-Income
Trust's analysts rely on worldwide research to understand the value of American
companies and make judgments about their bonds. We'll also explain how
firsthand research is crucial to avoiding pitfalls. Of course, sometimes bonds
in the fund's portfolio lose value. But thoroughly researching each bond issue
before investing gives us confidence we've made a well-informed decision.
REGIONAL PARKS AND GLOBAL RESEARCH
When American High-Income Trust analyst Jennifer Hinman, who focuses on
amusement parks and casinos, began researching Premier Parks, an Oklahoma
City-based company that operates 35 amusement parks including the Six Flags
sites, she knew her research would take her outside the United States.
[photo: close-up of two coins]
"Premier Parks is expanding abroad. The company has made a real commitment to
Europe and recently bought a small chain of parks in France and Belgium. I went
to Belgium because I wanted to see one firsthand," Hinman says.
"You can't look at a small park the same way you look at a big, internationally
known park such as Disneyland, Sea World or Universal Studios. Those parks
attract millions of tourists from around the world every year. Premier Parks'
business is local. Its parks are not destinations in themselves. Two-thirds of
their customers live within driving distance and many buy season passes. So
when you look at a small park, you look at things differently."
For Hinman, the important question was: Could Premier Parks improve the park
and get its visitors to spend more money? "As I walked through the park, I put
my customer hat on and tried to look at things the way a customer would. I
looked at the quality of the equipment and what rides were working and which
weren't. I looked at the restaurants and the landscaping, and even the
restrooms. I tried to look at it like a visitor and asked, $Is this place fun?
Would I want to come back here a second time?'"
[Begin sidebar]
"I TRIED TO LOOK AT IT LIKE A VISITOR AND ASKED, $IS THIS PLACE FUN? WOULD I
WANT TO COME BACK HERE A SECOND TIME?'"
ANALYST JENNIFER HINMAN
[End sidebar]
[photo: ferris wheel]
She also talked at length with the managers about their experience and plans
for the park. Hinman left Belgium convinced that the park had good growth
potential. "I was very impressed with the general manager, who had come from
California. He had a lot of experience in making other parks successful and was
very sensitive to the cultural differences in Europe. He wasn't trying to make
this into an American park." When Premier Parks later sold more high-yield
bonds to help finance its operations, American High-Income Trust invested and
the bonds have done well.
[watermark: the words "research: the key"]
NEW TECHNOLOGIES AND ANCIENT PRODUCTS
Analyst Marc Linden sees worldwide competition in two very different
industries, one on the cutting edge of technology and another with centuries of
history. He follows diversified telecommunications companies and paper
manufacturers.
"Markets outside the U.S. present many American companies with both opportunity
and competitive threats. Many of the U.S. telecommunications companies I follow
are moving into Europe because of the opportunities created by deregulation. I
have to look at those markets to understand the growth of these U.S.
companies," says Linden.
Diversified telecommunication services is the third-largest industry in the
fund's portfolio, representing 10% of assets. "There are a lot of opportunities
for both U.S. and non-U.S. companies in the newly opened markets," Linden says.
"To understand what's happening, to be able to separate the winners from the
losers, I have to know what's going on in all markets. I've been to the United
Kingdom three times in the past year, and to France, Spain, the Netherlands and
Poland, to talk with management and learn how their companies are approaching
the markets. Each country requires a different plan because of cultural,
regulatory and competitive differences. U.S. companies can't just take what
works here and move it to Europe. I really have to be aware of what's going on
over there to make the best investment decisions."
[Begin sidebar]
"MANY OF THE U.S. TELECOMMUNICATIONS COMPANIES I FOLLOW ARE MOVING INTO EUROPE
BECAUSE OF THE OPPORTUNITIES CREATED BY DEREGULATION."
ANALYST MARC LINDEN
[End sidebar]
[photo: close-up of telephone console]
[Begin sidebar]
"COMMODITIES LIKE PAPER HAVE BECOME GLOBAL INDUSTRIES. OUR OVERSEAS RESEARCH
HELPS US UNDERSTAND THE COMPETITIVE EDGE ONE COMPANY MIGHT HAVE AND GIVES US AN
ADVANTAGE WHEN WE'RE INVESTING."
ANALYST MARC LINDEN
[End sidebar]
[photo: close-up of rolls of paper]
[photo: close-up of coin]
For some industries, though, the globalization of business and the emergence of
new competitors is a threat. Until recently, U.S. and Canadian paper producers
faced little overseas competition. Last year's Asian economic crisis changed
that.
Asian paper producers had invested in state-of-the art equipment and geared up
as the region's economies grew. When the economic crisis hit and demand
evaporated, the paper producers looked overseas for new customers and began
challenging North American companies.
"I was in Asia earlier this year visiting paper producers in China, Thailand
and Singapore. You really can't understand this business well and know the
impact an Asian competitor is going to have on a North American company unless
you visit the operating facilities and talk to people," says Linden.
"Commodities like paper have become global industries. Our overseas research
helps us understand the competitive edge one company might have and gives us an
advantage when we're investing."
Global research not only helps analysts find opportunities, it also helps them
avoid problems. After visiting several paper companies on one recent trip to
Asia, Linden decided against investing in some bonds issued by a North American
firm facing stiff competition. The bonds have subsequently lost value.
[watermark: the words "to finding value"]
LOCAL CONSUMERS AND INTERNATIONAL MARKETS
Few things demonstrate the globalization of industry as well as consumer
products. Every day, hundreds of millions of people around the world consume
American soft drinks, use American shampoo and soap, and feed their babies
American baby food. American High-Income Trust has several holdings in U.S.
companies that supply plastic bottles, jars and cans to American consumer
product companies in Europe.
[Begin sidebar]
"IN THE PAST, COMPANIES MIGHT HAVE HAD A PACKAGING PLANT IN EVERY COUNTRY, BUT
NOW THEY USE FEWER PLANTS TO SUPPLY ALL OF EUROPE, NOT JUST ONE COUNTRY."
ANALYST MICHELLE FREITAG
[End sidebar]
[photo: interior of warehouse]
But Europe is in transition as the adoption of a single currency alters the way
companies do business. "In the past, companies might have had a packaging plant
in every country, but now they use fewer plants to supply all of Europe, not
just one country," says Michelle Freitag, an analyst who follows consumer
products and manufacturing for American High-Income Trust.
[photo: close-up of two coins]
"If these firms aren't nimble, their business is going to be taken away from
them by others that are bigger and more efficient," Freitag says. "I've been
following these companies very closely. I've met with the managers of several
companies and toured the facilities of some. During a recent trip to Europe, I
spent time talking with suppliers and competitors. My goal was to understand
the market and try to get a second opinion on the companies I follow," she
said.
When Graham Packaging, a U.S.-based company, recently bought some European
assets from another company, Freitag's firsthand research helped her judge the
potential impact. She recommended the fund add to its holdings in Graham. They
have since risen in value.
Today, suppliers to the consumer products industry must look beyond their own
borders to be successful. "I have to do the same thing," Freitag says. "To
thoroughly research these companies, I have to look at the whole industry. I
can't focus just on what is happening in the United States. It's a long-term
process, but this type of research will help me make better investment
decisions, not just today, but in the future too."
As business expands around the world, U.S.-based companies will have new
opportunities - and new competition. Whatever the industry, from old-line to
high-tech, and wherever the business, from Oklahoma City to Osaka, American
High-Income Trust's investment professionals will rely on fundamental research
to find good opportunities for high current income and solid, long-term growth.
[waermark: the words "American Funds"]
WHAT MAKES THE AMERICAN FUNDS DIFFERENT?
As a shareholder in American High-Income Trust, you are also a member of The
American Funds Group, the nation's third-largest mutual fund family. You won't
find us advertised, yet thousands of financial advisers recommend the American
Funds for their clients' serious money - money set aside for education, a home,
retirement and other important dreams.
What the 29 funds in our group have in common is a commitment to your best
interests and the proven approach of our investment adviser, Capital Research
and Management Company. In business since 1931, Capital's calling cards
include:
* A LONG-TERM, VALUE-ORIENTED APPROACH: Rather than follow short-term fads, we
rely on our own intensive research to find well-managed companies with
reasonably priced shares and solid, long-term potential. Despite our size, we
offer relatively few funds compared with many large fund families, allowing us
to maintain a careful focus on our objectives and benefit from economies of
scale.
* A GLOBAL PERSPECTIVE: We opened our first overseas office in 1962, well
before most mutual funds began investing internationally. Today, the American
Funds draw on one of the industry's most globally integrated research networks.
Capital Research spends substantial resources getting to know companies and
industries around the world.
* A MULTIPLE PORTFOLIO COUNSELOR SYSTEM: More than 40 years ago, we developed
a unique strategy for managing investments that blends teamwork with individual
accountability. Every American Fund is divided among a number of portfolio
counselors, each of whom manages his or her portion independently, within each
fund's objectives; in most cases, research analysts manage a portion as well.
Over time, this method has contributed to consistency of results and continuity
of management.
* EXPERIENCED INVESTMENT PROFESSIONALS: Nearly 90% of the portfolio counselors
who serve the American Funds were in the investment business before the stock
market decline of October 1987. Long tenure and experience through a variety of
market conditions mean we aren't "practicing" with your money.
* A COMMITMENT TO LOW OPERATING EXPENSES: You can't control market returns,
but you can control what you invest in and how much you pay to own it. American
Funds provide exceptional value for shareholders, with operating expenses that
are among the lowest in the mutual fund industry. Our portfolio turnover rates
are low as well, keeping transaction costs and tax consequences contained.
[Begin sidebar]
For more complete information about any of the American Funds, including
charges and expenses, please obtain a prospectus from your financial adviser,
download one from our Web site at www.americanfunds.com, or phone the funds'
transfer agent, American Funds Service Company, at 800/421-0180.
Please read the prospectus carefully before you invest or send money. For more
information, ask your financial adviser for a copy of our brochure A Portfolio
for Every Investor.
[End sidebar]
A PORTFOLIO FOR EVERY INVESTOR
Most financial advisers suggest that investors balance their portfolios by
investing across several types of investments. Which mix is right for you? That
depends on a number of things - including your risk tolerance, investment time
horizon and financial goals. The American Funds Group offers 29 funds with an
array of investment objectives to help you and your financial adviser build a
portfolio specifically tailored to your needs.
GROWTH FUNDS
Emphasis on long-term growth through stocks
* AMCAP Fund(r)
* EuroPacific Growth Fund(r)
* The Growth Fund of America(r)
* The New Economy Fund(r)
* New Perspective Fund(r)
* New World Fund(SM)
* SMALLCAP World Fund(r)
GROWTH-AND-INCOME FUNDS
Emphasis on long-term growth and dividends through stocks
* American Mutual Fund(r)
* Capital World Growth and Income Fund(SM)
* Fundamental Investors(SM)
* The Investment Company Of America(r)
* Washington Mutual Investors Fund(SM)
EQUITY-INCOME FUNDS
Emphasis on above-average income and growth through stocks and/or bonds
* Capital Income Builder(r)
* The Income Fund of America(r)
BALANCED FUND
Emphasis on long-term growth and current income through stocks and bonds
* American Balanced Fund(r)
INCOME FUNDS
Emphasis on current income through bonds
* American High-Income Trust(SM)
* The Bond Fund of America(SM)
* Capital World Bond Fund(r)
* Intermediate Bond Fund of America(r)
* U.S. Government Securities Fund(SM)
TAX-EXEMPT INCOME FUNDS
Emphasis on tax-free current income through municipal bonds
* American High-Income Municipal Bond Fund(r)
* Limited Term Tax-Exempt Bond Fund of America(SM)
* The Tax-Exempt Bond Fund Of America(r)
State-specific tax-exempt funds:
* The Tax-Exempt Fund of California(r)
* The Tax-Exempt Fund of Maryland(r)
* The Tax-Exempt Fund of Virginia(r)
MONEY MARKET FUNDS
Seeking stable monthly income through money market instruments
* The Cash Management Trust of America(r)
* The Tax-Exempt Money Fund of America(SM)
* The U.S. Treasury Money Fund of America(SM)
<TABLE>
[begin pie chart]
American High-Income Trust
Piechart Breakdown
September 30, 1999
<S> <C>
U.S. Corporate Bonds 67%
Non-U.S. Corporate Bonds 20%
Non-U.S. Government Bonds 2%
Stocks 4%
U.S. Treasuries 1%
Cash & Equivalents 6%
[end pie chart]
</TABLE>
<TABLE>
<S> <C> <C>
American High-Income Trust
September 30, 1999
Ten Largest Holdings by Issuer
Nextel Communications 5.03 %
Omnipoint 4.55
NTL 2.52
Crown Castle International 1.85
COLT Telecom Group 1.85
Fox/Liberty Networks 1.79
Clearnet Communications 1.62
Viatel 1.61
Fuji JGB Investment 1.41
Dobson Communications 1.37
</TABLE>
<TABLE>
American High-Income Trust
Investment Portfolio, September 30, 1999
<S> <C> <C> <C> <C>
Shares
or Principal Market Percent
Amount Value of Net
Bonds, Notes & Equity Securities (000) (000) Assets
- -------------------------------------------- ------------ ---------- --------
Wireless Telecommunication Services - 19.67%
Nextel Communications, Inc.:
0%/9.75% 2007(1) $15,250 $10,789
0%/10.65% 2007(1) 21,500 15,856
0%/9.95% 2008(1) 43,625 30,428
12.00% 2008 7,500 8,400
Series D, 13.00% exchangeable preferred, 16share 17,173
redeemable 2009 (2),(3)
Series E, 11.25% exchangeable preferred, 32share 31,482
redeemable 2010(2),(3)
Nextel International, Inc. 0%/12.125% 2008(1) $29,250 14,698 5.03%
McCaw International, Ltd. (owned by Nextel 18,125 10,875
Communications, Inc.) 0%/13.00% 2007(1)
Omnipoint Corp.:
12.00% 2000(4),(5) 12,500 12,500
14.00% 2003(2),(4),(5) 31,496 32,756
11.625% 2006 27,000 27,810
11.625% Series A, 2006 9,000 9,270
11.50% 2009(4) 7,000 7,228
7.00% convertible preferred 185share 18,407 3.89
Crown Castle International Corp.:
0%/10.625% 2007(1) $19,000 13,442
0%/10.375% 2011(1) 21,500 12,416
0%/11.25% 2011(1),(4) 14,000 8,050
12.75% senior exchangeable preferred 2010(2),(3) 17share 17,477 1.85
Clearnet Communications Inc.:
0%/11.75% 2007(1) C$52,375 24,268
0%/10.40% 2008(1) 50,325 20,746 1.62
Dobson Communications Corp.:
11.75% 2007 $13,325 14,058
12.25% exchangeable preferred, redeemable 2008(2),(3) 16share 13,825
12.25% senior exchangeable preferred, redeemable 12share 10,293 1.37
2008(2),(3),(4)
American Cellular Corp. 10.50% 2008 $31,125 31,981 1.15
Esat Telecom Group PLC:
0%/12.50% 2007(1) 20,250 14,479
11.875% 2008 12,000 12,330 .97
PageMart Wireless, Inc.:
0%/15.00% 2005(1) 12,750 10,965
0%/11.25% 2008(1) 51,760 15,528 .95
Centennial Cellular Corp. 10.75% 2008 21,250 22,100 .80
SpectraSite Holdings, Inc.:
0%/12.00% 2008(1),(4) 8,500 4,675
0%/11.25% 2009(1),(4) 25,875 12,938 .63
Mobile Telecommunication Technologies Corp. 13.50% 2002 7,755 8,705
SkyTel Communications, Inc. $2.25 convertible preferred 100share 3,875 .45
Comunicacion Celular SA 0%/14.125% 2005(1),(4) 16,000 8,520 .31
CellNet Data Systems, Inc. 0%/14.00% 2007(1) 15,770 5,677 .20
Western Wireless Corp. 10.50% 2006 3,000 3,158 .11
Occidente y Caribe Celular SA 0%/14.00% 2004(1) 5,000 2,863 .10
Teletrac Inc. senior note 10.00% 2000 385 385
Teletrac Holdings, Inc. 14.00% 2007 (5) 13,550 1,355 .06
GLOBE TELECOM, Inc. 13.00% 2009(4) 1,650 1,724 .06
Cellco Finance NV:
15.00% 2005(4) 1,215 1,267
15.00% 2005 375 391 .06
Netia Holdings BV 0%/11.25% 2007(1) 1,000 630 .03
Conecel Holdings Ltd., Series A, 14.00% 2000(4),(5),(6) 5,500 550 .03
--------------------
546,34 19.67
Diversified Media & Cable Television - 10.16%
Comcast UK Cable Partners Ltd.(owned by NTL Inc.) 32,000 28,960
0%/11.20% 2007(1)
NTL Inc.:
0%/12.75% 2005(1) 1,000 968
Series B, 10.00% 2007 5,750 5,865
0%/9.75% 2008(1) 12,500 8,250
0%/10.75% 2008(1) pounds17,750 18,993
11.50% 2008 $6,000 6,420 2.50
Fox/Liberty Networks, LLC, FLN Finance, Inc.:
8.875% 2007 22,875 23,218
0%/9.75% 2007(1) 34,000 26,520 1.79
Charter Communications Holdings, LLC:
8.25% 2007(4) 6,000 5,565
0%/9.92% 2011(1),(4) 49,000 28,910 1.24
Adelphia Communications Corp.:
9.25% 2002 6,000 6,030
10.50% 2004 8,500 8,776
Series B, 13.00% preferred 2009(3) 20share 2,200 .61
Lenfest Communications, Inc.:
8.375% 2005 $6,000 6,180
7.625% 2008 6,750 6,722
8.25% 2008 3,250 3,299 .58
Century Communications Corp.:
0% 2003 1,500 1,054
8.75% 2007 4,000 3,830
0% 2008 19,750 8,295 .47
Telemundo Holdings, Inc., Series A, 0%/11.50% 22,700 12,939 .47
2008(1)
Globo Comunicacoes e Participacoes SA:
10.50% 2006(4) 10,280 7,756
10.625% 2008(4) 7,000 5,155 .46
Falcon Holding Group, LP, Falcon Funding Corp. 10,750 10,562 .38
8.375% 2010
Avalon Cable of Michigan LLC:
9.375% 2008 4,250 4,261
0%/11.875% 2008(1) 8,625 5,477 .35
TeleWest PLC 9.625% 2006 9,000 9,068 .33
Cablevision Industries Corp. 9.875% 2013 6,000 6,315 .23
Multicanal Participacoes SA, Series B, 12.625% 2004 4,900 4,790 .17
TVN Entertainment Corp. 14.00% 2008(4) 13,250 4,638 .17
V2 Music Holdings PLC:
0%/14.00% 2008(1),(4) 10,905 3,272
0%/14.00% 2008(1),(4) pounds2,250 1,111 .16
FrontierVision 11.00% 2006 $3,500 3,727 .13
Coaxial Communications of Central Ohio, Inc. 2,250 2,205 .08
10.00% 2006
Grupo Televisa, SA 0%/13.25% 2008(1) 1,000 842 .04
--------------------
282,173 10.16
--------------------
Diversified Telecommunication Services - 9.98%
Viatel, Inc.:
11.50% 2009 2,500 $2,400 1.38
11.15% 2008 DM5,000 2,576
11.25% 2008 $10,000 9,400
0%/12.40% 2008(1) DM22,500 6,991
0%/12.50% 2008(1) $29,500 17,110
COLT Telecom Group PLC:
0%/12.00% 2006(1) 26,250 21,459
8.875% 2007 DM20,250 11,342
7.625% 2008 9,250 4,891 1.36
NEXTLINK Communications, Inc.:
12.50% 2006 $1,750 1,851
9.625% 2007 13,000 12,448
9.00% 2008 9,500 8,835
0%/12.25% 2009(1) 19,750 11,455
14.00% preferred 2009(2),(3) 35share 1,810 1.31
Time Warner Telecom Inc. 9.75% 2008 $27,225 27,429 .99
US Xchange, LLC 15.00% 2008 21,875 21,438 .77
Global TeleSystems Group, Inc.:
8.75% convertible debentures 2000(4) 7,500 15,000
9.875% 2005 6,000 5,730 .75
Allegiance Telecom, Inc.:
0%/11.75% 2008(1) 22,000 14,300
12.875% 2008 2,625 2,848 .62
PTC International Finance BV 0%/10.75% 2007(1) 18,500 12,626 .45
KMC Telecom Holdings Inc. 0%/12.50% 2008(1) 22,500 11,700 .42
Loral Orion Network Systems, Inc. 11.25% 2007 15,425 10,798 .39
GST Equipment Funding, Inc. 13.25% 2007 9,000 9,090 .33
IXC Communications, Inc., exchangeable preferred, 6share 5,983 .22
redeemable 2009(2),(3)
VersaTel Telecom International NV 11.875% 2009 $5,000 5,051 .18
Qwest Communications International Inc. 0%/9.47% 2007(1) 6,000 4,756 .17
Level 3 Communications, Inc. 9.125% 2008 5,000 4,525 .16
IMPSAT Corp. 12.375% 2008 5,750 4,384 .16
Teligent, Inc. 11.50% 2007 $4,000 3,660 .13
Piltel International Holding Corp. 1.75% convertible 2006 5,875 3,290 .12
Telesystem International Wireless Inc. 0%/13.25% 2007(1) 3,600 1,755 .05
CEI Citicorp Holdings SA 11.25% 2007(4) ARP500 371 .01
--------------------
277,302 9.98
--------------------
--------------------
Leisure & Tourism - 8.28%
William Hill Finance 10.625% 2008 pounds22,200 36,911 1.33
Horseshoe Gaming Holding Corp. 8.625% 2009(4) $26,000 24,635 .89
Boyd Gaming Corp.:
9.25% 2003 15,250 15,250
9.50% 2007 7,860 7,624 .82
AMF Bowling Worldwide, Inc.:
10.875% 2006 19,750 14,417
0%/12.25% 2006(1) 11,293 6,550
0% convertible debentures 2018(4) 10,508 972 .79
Jupiters Ltd. 8.50% 2006(4) 19,180 18,509 .67
International Game Technology:
7.875% 2004 11,000 10,505
8.375% 2009 4,000 3,810 .52
Premier Parks Inc.:
9.25% 2006 4,000 3,760
9.75% 2007 10,000 9,500 .48
Harrah's Operating Co., Inc. 7.875% 2005 13,725 13,107 .47
Regal Cinemas, Inc.:
9.50% 2008 2,000 1,360
8.875% 2010 17,800 11,570 .47
Sun International Hotels Ltd.,
Sun International North America, Inc.:
8.625% 2007 3,750 3,488
9.00% 2007 9,000 8,550 .43
Carmike Cinemas, Inc., Series B, 9.375% 2009 11,500 10,580 .38
Florida Panthers Holdings, Inc. 9.875% 2009 11,000 10,230 .37
Friendly Ice Cream Corp. 10.50% 2007 7,375 6,674 .24
KSL Recreation Group, Inc. 10.25% 2007 6,250 6,125 .22
Loews Cineplex Entertainment Corp. 8.875% 2008 4,000 3,620 .13
Mirage Resorts, Inc. 6.625% 2005 2,000 1,843 .06
Six Flags Entertainment Corp. 8.875% 2006 500 470 .01
--------------------
230,060 8.28
--------------------
Broadcasting & Publishing - 6.16%
Chancellor Media Corp. of Los Angeles:
9.375% 2004 14,500 14,826
8.125% 2007 9,500 9,120
Series B, 8.75% 2007 6,450 6,385
8.00% 2008 2,000 1,940
9.00% 2008 1,000 1,010 1.20
American Media Operation 10.25% 2009 18,000 17,505 .63
Ziff-Davis Inc. 8.50% 2008 16,500 15,840 .57
TransWestern Publishing Co. LLC 9.625% 2007 16,050 15,528 .56
Sun Media Corp.:
9.50% 2007 11,078 11,161
9.50% 2007 3,947 3,977 .55
Gray Communications Systems, Inc. 10.625% 2006 12,120 12,544 .45
Antenna TV SA 9.00% 2007 12,450 11,516 .41
Big City Radio, Inc. 0%/11.25% 2005(1) 14,000 9,660 .35
ACME Intermediate Holdings, LLC, Series B, 12,689 8,882 .32
0%/12.00% 2005(1)
Muzak LLC 9.875% 2009(4) 3,000 2,895
Muzak Holdings LLC 0%/13.00% 2010(1),(4) 6,500 3,575 .23
Young Broadcasting Inc.:
10.125% 2005 3,500 3,596
Series B, 8.75% 2007 2,000 1,950 .20
Radio One, Inc. 7.00%/12.00% 2004(1) 4,750 4,976 .18
Cumulus Media Inc. 13.75% preferred 2009(2),(3) 4share 4,867 .18
RBS Participacoes SA 11.00% 2007(4) $4,500 3,251 .12
STC Broadcasting, Inc. 11.00% 2007 3,000 2,993 .11
Capstar Broadcasting Corp. 12.00% preferred 2009(2) 25share 2,966 .10
--------------------
170,96 6.16
--------------------
Manufacturing - 5.12%
Graham Packaging Co.:
8.75% 2008 $17,750 16,685
0%/10.75% 2009(1) 16,500 10,436 .98
Printpack, Inc.:
Series B, 9.875% 2004 5,750 5,563
10.625% 2006 18,930 17,747 .84
Federal-Mogul Corp.:
7.50% 2004 4,500 4,305
7.375% 2006 5,000 4,632
7.75% 2006 2,000 1,882
7.50% 2009 8,000 7,221 .65
Anchor Glass Container Corp. 11.25% 2005 13,250 13,117 .47
First Pacific Capital Ltd. 2% convertible 2002 12,000 11,760 .42
Hayes Wheels International, Inc. 9.125% 2007 2,500 2,337
Hayes Lemmerz International, Inc., Series B, 8.25% 2008 8,750 7,700 .36
Key Plastics Holdings, Inc. 10.25% 2007 9,650 7,913 .28
American Standard Inc.:
7.125% 2006 5,500 5,688
8.25% 2009(4) 1,750 1,689 .27
Ingram Micro Inc. 0% convertible debentures 2018 22,500 7,200 .26
Impress Metal Packaging Holdings BV 9.875% 2007 DM10,600 6,125 .22
Tekni-Plex, Inc. 9.25% 2008 $5,995 5,710 .21
Westinghouse Air Brake Co.:
9.375% 2005 1,500 1,485
Series B2, 9.375% 2005 1,500 1,485 .11
BREED Technologies, Inc. 9.25% 2008(6) 30,000 1,200 .04
Reliance Industries Ltd. 10.50% 2046(4) 500 416 .01
--------------------
142,29 5.12
--------------------
Banking & Financial Services - 4.99%
Fuji JGB Investment LLC, Series A, 9.87% 38,455 39,032 1.41
noncumulative preferred(4)
Advanta Corp.:
7.50% 2000 9,700 9,579
Series B, 7.00% 2001 5,500 5,127
Series D, 6.814% 2002 10,000 9,034
Series D, 6.98% 2002 2,000 1,816 .92
Chevy Chase Bank, FSB 9.25% 2008 2,000 2,010
Chevy Chase Preferred Capital Corp. 10.375% 214share 11,449 .48
Providian Financial Corp. 9.525% 2027(4) $15,000 13,169 .47
Sakura Capital Funding 6.446% (undated)(4),(7) 14,000 12,250 .44
Komercni Finance BV 9.00%/10.75% 2008(1),(4) 9,950 9,079 .33
IBJ Preferred Capital Co. LLC, Series A, 8.79% 6,750 6,446 .23
noncumulative preferred(4)
Superior Financial Corp. 8.65% 2003(4) 6,000 5,790 .21
SocGen Real Estate Co. LLC, Series A, 6,300 5,722 .21
7.64%/8.406% 2049(1),(4)
BNP U.S. Funding LLC, Series A, 7.738% 4,750 4,439 .16
noncumulative preferred(4)
GS Escrow Corp. 7.125% 2005 4,000 3,732 .13
--------------------
138,674 4.99
--------------------
Forest Products & Paper - 4.12%
Kappa Beheer BV:
0%/12.50% 2009(1),(4) 26,250 15,532
10.625% 2009(1),(4) 17,750 19,018 1.24
Container Corp. of America:
10.75% 2002 5,250 5,421
9.75% 2003 21,500 21,984
Series A, 11.25% 2004 5,500 5,720 1.19
Pacifica Papers Inc. 10.00% 2009 15,750 15,947 .57
Packaging Corp. of America:
9.625% 2009(4) 1,250 1,263
12.375% preferred 2010(2),(3),(4) 63share 7,023 .30
Advance Agro Capital BV 13.00% 2007 $10,125 7,417 .27
Indah Kiat Finance Mauritius Ltd.:
11.875% 2002 4,400 3,311
10.00% 2007 5,200 2,795 .22
Pindo Deli Finance Mauritius Ltd.:
10.25% 2002 5,000 3,088
10.75% 2007 2,925 1,587 .17
Copamex Industrias, SA de CV, Series B, 11.375% 2004 4,625 4,024 .14
APP International Finance Co. BV 11.75% 2005 275 182 .02
--------------------
114,312 4.12
--------------------
Technology & Electronics - 3.62%
Advanced Micro Devices, Inc.:
11.00% 2003 11,000 9,900
6.00% convertible subordinated notes 2005 12,000 8,880 .68
Zilog, Inc. 9.50% 2005 18,800 17,390 .63
Micron Technology, Inc. 6.50% 2005(4) 20,000 15,600 .56
Flextronics International Ltd. 8.75% 2007 13,750 13,612 .49
Therma-Wave, Inc. 10.625% 2004 13,250 9,673 .35
EarthWatch Inc.:
0%/12.50% 2005(1),(4),(5) 8,640 5,599
Series B, 7.00% convertible preferred 2009(2),(3),(4),(5) 725 2,500
Series C, 8.50% convertible preferred 2009(2),(3),(4),(5) 343 590 .31
SCG Holding Corp., Semiconductor Components 7,000 7,140 .26
Industries, LLC 12.00% 2009(4)
Samsung Electronics Co., Ltd. 7.45% 2002(4) 6,000 5,815 .21
Fairchild Semiconductor Corp. 10.375% 2007(4) 4,000 3,960 .13
--------------------
100,659 3.62
--------------------
Energy-Related - 3.32%
Cross Timbers Oil Co.:
Series B, 9.25% 2007 10,775 10,667
8.75% 2009 17,620 16,827 .99
Pogo Producing Co.:
8.75% 2007 16,500 15,758
10.375% 2009 6,500 6,760 .81
Petro Stopping Centers, LP 10.50% 2007 10,250 9,994 .36
Petrozuata Finance, Inc.:
Series A, 7.63% 2009(4) 3,500 2,625
Series B, 8.22% 2017(4) 6,000 4,080 .24
HS Resources, Inc. 9.25% 2006 6,250 6,156 .22
Clark Refining & Marketing, Inc.:
8.375% 2007 1,500 1,312
8.875% 2007 4,500 3,757 .18
McDermott Inc. 9.375% 2002 3,275 3,397 .12
Casecnan Water and Energy Co., Inc., Series B, 11.95% 2010 3,500 3,264 .12
Kelley Oil & Gas Corp.:
10.375% senior subordinated notes 2006 2,975 1,398
10.375% 2006 2,200 1,034 .09
PDVSA Finance Ltd. 9.375% 2007(4) 2,500 2,390 .09
Newfield Exploration Co., Series B, 7.45% 2007 1,750 1,641 .06
Pemex Finance Ltd. 10.61% 2017(4) 1,000 1,015 .04
--------------------
92,075 3.32
--------------------
Miscellaneous Service Companies - 2.70%
Safety-Kleen Services, Inc. 9.25% 2008 19,375 19,472
Safety-Kleen Corp. 9.25% 20009 4,750 4,774 .87
Allied Waste North America, Inc.:
7.625% 2006 500 451
10.00% 2009(4) 24,750 23,079 .85
USA Waste Services, Inc. 4.00% 2002 9,500 8,265
WMX Technologies, Inc. 6.375% 2003 1,000 920
Waste Management, Inc. 6.875% 2009 (4) 1,500 1,307 .38
Iron Mountain Inc.:
8.75% 2009 5,370 5,048
10.125% 2009 3,000 3,105 .29
Protection One Alarm Monitoring, Inc. 13.625% 2005 6,166 5,611 .20
Concentra Operating Corp., Series A, 13.00% 2009(4) 3,000 3,000 .11
--------------------
75,032 2.70
--------------------
Consumer Products - 2.28%
Canandaigua Wine Co., Inc.:
Series C, 8.75% 2003 9,750 9,555
8.75% 2003 8,900 8,677 .66
Delta Beverage Group, Inc. 9.75% 2003 15,735 15,853 .57
Fage Dairy Industry SA 9.00% 2007 9,250 8,371 .30
Salton/Maxim Housewares, Inc. 10.75% 2005 7,050 7,209 .26
DGS International Finance Co.:
10.00% 2007(4) 6,250 4,141
10.00% 2007 275 182 .16
Home Products International, Inc. 9.625% 2008 3,250 2,892 .10
New World Pasta Co. 9.25% 2009 3,000 2,790 .10
AKI, Inc. 10.50% 2008 1,250 1,112
AKI Holding Corp. 0%/13.50% 2009(1) 3,750 1,575 .10
WestPoint Stevens Inc. 7.875% 2005 1,000 935 .03
--------------------
63,292 2.28
--------------------
Health & Personal Care - 1.80%
Paracelsus Healthcare Corp. 10.00% 2006 35,825 24,361 .87
Integrated Health Services, Inc.:
5.75% convertible debentures 2001 11,000 1,430
10.25% 2006 11,250 1,800
Series A, 9.50% 2007 37,500 6,000
Series A, 9.25% 2008 46,250 7,400 .60
Sun Healthcare Group, Inc.:
Series B, 9.50% 2007(6) 24,875 2,488
9.375% 2008(4),(6) 19,110 1,911 .16
Tenet Healthcare Corp. 8.00% 2005 3,750 3,563 .13
Mariner Post-Acute Network, Inc.:
9.50% 2007(6) 750 45
0%/10.50% 2007(1),(6) 5,900 295
Mariner Health Group, Inc. 9.50% 2006(6) 13,625 273 .02
RainTree Healthcare Corp. 11.00% 2003(5),(6) 2,207 552 .02
--------------------
50,118 1.80
--------------------
Merchandising - 1.73%
Randall's Food Markets, Inc. 9.375% 2007 11,500 12,535 .45
Kmart Corp. 9.78% 2020 10,500 10,762 .39
DR Securitized Lease Trust, pass-through 9,855 9,855 .35
certificates, Series 1994 K-2, 9.35% 2019(8)
Boyds Collection, Ltd., Series B, 9.00% 2008 8,803 8,627 .31
Sunglass Hut International, Inc 5.25% convertible 5,500 4,249 .16
debentures 2003
Fred Meyer, Inc.:
7.375% 2005 1,000 986
7.45% 2008 1,000 988 .07
--------------------
48,002 1.73
--------------------
Metals & Materials - 0.59%
Doe Run Resources Corp., Series B, 11.25% 2005 9,500 8,930 .32
Kaiser Aluminum & Chemical Corp. 12.75% 2003 4,500 4,545 .16
Freeport-McMoRan Copper & Gold Inc.:
7.50% 2006 100 75
7.20% 2026 3,825 2,875 .11
--------------------
16,425 .59
--------------------
Transportation - 0.51%
Teekay Shipping Corp. 8.32% 2008 12,500 11,625 .41
USAir, Inc., pass-through trust, Series 1993-A3, 2,650 2,647 .10
10.375% 2013(8)
--------------------
14,272 .51
--------------------
Other - 1.09%
Wharf International Finance Ltd., Series A, 10,000 8,922 .32
7.625% 2007
M.D.C. Holdings, Inc. 8.375% 2008 9,250 8,325 .30
Swire Pacific Offshore Financing Ltd. 9.33% 352share 7,560 .27
cumulative guaranteed perpetual capital securities(4)
Mosaic Re Ltd. 9.062% 2000(4),(7) $5,500 5,431 .20
--------------------
30,238 1.09
--------------------
Private Issue Collateralized Mortgage Obligations/
Asset-Backed Sercurities - 0.68%
Gramercy Place Insurance Ltd., Series 1998-A, 12,500 12,441 .45
Class C-2, 8.95% 2002(4)
Chase Commercial Mortgage Securities Corp., 5,000 4,221 .15
Series 1998-2, Class E, 6.39% 2030(8)
GMAC Commercial Mortgage Securities, Inc., 2,500 2,156 .08
Series 1997-C2, Class E, 7.624% 2011
Resolution Trust Corp., Series 1993-C1, Class E, 13 13 .00
9.50% 2024(8)
--------------------
18,831 .68
--------------------
U.S. Treasury Obligations - 0.98%
7.50% November 2001 20,000 20,716 .75
7.50% February 2005 6,000 6,413 .23
--------------------
27,129 .98
--------------------
Governments(Excluding U.S.) - 1.82%
United Mexican States Government:
0% 2003(5) $768 0
Eurobonds:
Global 11.375% 2016 7,695 8,137
Series A, units, 5.875% 2019(7) 500 428
Global 11.50% 2026 2,625 2,897 .41
Panama (Republic of):
Interest Reduction Bond 4.25% 2014(4),(7) 11,400 8,266
Past Due Interest Eurobond 6.50% 2016(7) 540 388
8.875% 2027 1,250 1,003 .35
Argentina (Republic of):
Series L, 5.938% Eurobonds, 2005(7) 930 817
11.75% 2007(4) ARP4,130 3,532
11.75% 2009 $270 261
11.375% 2017 2,750 2,592
9.75% 2027 1,575 1,319 .31
Philippines (Republic of):
8.875% 2008 4,500 4,410
9.875% 2019 3,000 2,850 .26
Brazil (Federal Republic of):
Debt Conversion Bonds, Series L:
5.938% 2012(7) 2,750 1,657
Bearer, 5.938% 2012(7) 4,500 2,711
Bearer 8.00% 2014(2) 1,942 1,217 .20
Venezuela (Republic of):
Eurobond 6.313% 2007(7) 1,619 1,257
Front Loaded Interest Reduction Bond, Series A, 762 577
6.00% 2007(6)
9.25% 2027 1,510 997 .10
Turkey (Republic of) 12.375% 2009 2,675 2,662 .10
Bulgaria (Republic of), Front Loaded Interest 1,770 1,112 .04
Reduction Bond 2.75% 2012(7)
South Africa (Republic of) 13.00% 2010 6,900 1,027 .04
Mendoza (Province of) 10.00% 2007(4) 500 351 .01
--------------------
50,468 1.82
Number of --------------------
Shares
Common Stocks & Warrants - 4.06%
Price Communications Corp.(3) 879,382 22,040 .79
Omnipoint Corp.(3),(4) 328,211 18,339 .66
COLT Telecom Group PLC, warrants, expire 2006 18,250 13,549 .49
(United Kingdom)(3),(4),(5)
Nortel Inversora SA, preferred, Class A (American 939,685 11,953 .43
Depository Receipts) (Argentina)(4),(5)
ACME Communications, Inc.(3) 269,104 8,342 .30
Clear Channel Communications, Inc.(3) 81,012 6,471 .23
Viatel, Inc.(3) 205,099 6,063 .22
Cross Timbers Oil Co. 350,000 4,725 .17
FelCor Lodging Trust Inc. 225,000 3,938 .14
Cumulus Media Inc., Class A (3) 100,000 3,269 .12
Infinity Broadcasting Corp.(3) 106,800 3,131 .11
Verio Inc., warrants, expire 2004(3),(4) 18,450 2,005 .07
Time Warner Telecom Inc.(3) 81,900 1,710 .06
Integrated Health Services, Inc.(3) 1,000,407 1,563 .06
MCI WorldCom, Inc.(3) 21,000 1,509 .05
Esat Telecom Group PLC, warrants, expire 2007 11,250 1,060 .04
(formerly Esat Holdings Ltd.) (Ireland)(3),(4),(5)
Radio One Inc., Class A(3) 22,900 950 .03
Comunicacion Celular SA, Class B, warrants, 15,000 937 .03
expire 2003 (Colombia)(3),(4)
NTL Inc., warrants, expire 2008(United Kingdom - 6,412 466 .02
Incorporated in USA)(3),(4),(5)
Allegiance Telecom, Inc., warrants, 5,000 303 .01
expire 2008(3),(4),(5)
Globalstar Telecommunications Ltd., warrants, 2,000 134 .01
expire 2004(3)
CellNet Data Systems, Inc., warrants, 47,786 58 .01
expire 2007(3),(4),(5)
KMC Telecom Holdings Inc., warrants, 22,500 56 .01
expire 2008(3),(4)
Protection One Alarm Monitoring, Inc., warrants, 30,400 49 .00
expire 2005(3),(4),(5)
RainTree Healthcare Corp.(3),(5) 610,551 31 .00
McCaw International, Ltd., warrants, 8,500 21 .00
expire 2007(3),(4),(5)
Conecel Holdings Ltd., Class B, warrants, 142,450 14 .00
expire 2000 (Ecuador)(3),(4),(5)
Tultex Corp.:
Warrants, expire 2007(3),(5) 81,220 1 .00
Warrants, expire 2007(3),(5) 40,610 0 .00
Loral Space & Communications Ltd.(Bermuda)(3) 1 0 .00
Teletrac Holdings, Inc.:
Warrants(3),(4) 13,550 0 .00
Class A, warrants 384,986 0 .00
TVN Entertainment Corp., warrants, expire 2008(3),(4),(5) 13,250 0 .00
V2 Music Holdings PLC(United Kingdom):,
Warrants, expire 2000(3),(4) 2,250 0 .00
Warrants, expire 2008(3),(4) 10,905 0 .00
--------------------
112,687 4.06
--------------------
Total Bonds, Notes & Equity Securities 2,601,35 93.66
(cost: $2,815,769,000)
Principal --------------------
Amount
Short-Term Securities - 4.40%
General Electric Capital Corp. 5.50% due 10/1/99 $32,170 32,164 1.16
Alcoa of Australia Ltd.:
5.10% due 10/14/99 800 798
5.10% due 10/22/99 24,700 24,621 .92
CIT Group, Inc.:
5.28% due 10/27/99 7,700 7,670
5.30% due 10/29/99 17,300 17,226 .90
Motiva Enterprises LLC, 5.16% due 10/13/99 20,000 19,962 .72
Eastman Kodak Co.:
5.24% due 10/5/99 14,700 14,689
5.30% due 11/10/99 5,000 4,970 .70
--------------------
Total Short-Term Securities (cost: $122,103,000) 122,100 4.40
--------------------
Total Investment Securities (cost: $2,937,872,000) 2,723,45 98.06
Excess of cash and receivables over payables 53,938 1.94
----------------------
Net Assets $2,777,38 100.00%
========= =======
(1)Step bond; coupon rate will increase at a later date.
(2)Payment in kind. The issuer has the option of
paying additional securities in lieu of cash.
(3)Non-income-producing security.
(4)Purchased in a private placement transaction;
resale may be limited to qualified institutional buyers;
resale to the public may require registration.
(5)Valued under procedures established by the
Board of Trustees.
(6)Company not making interest payments,
bankruptcy proceedings pending.
(7)Coupon rate may change periodically.
(8)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 maturity.
See Notes to Financial Statements
</TABLE>
<TABLE>
American High-Income Trust
Financial Statements
Statement of Assets and Liabilities
at September 30, 1999 (dollars in thousands)
<S> <C> <C>
Assets:
Investment securities
(cost: $2,937,872) $ 2,723,451
Cash 1,148
Receivables for--
Sales of investments $ 6,851
Sales of fund's shares 5,722
Forward currency contracts - net 24
Accrued dividends and interest 54,882 67,479
------------ ------------
2,792,078
Liabilities:
Payables for--
Purchases of investments 4,777
Repurchases of fund's shares 5,223
Dividends on fund's shares 1,392
Forward currency contracts - net 1,729
Management services 1,068
Accrued expenses 500 14,689
------------ ------------
Net Assets at September 30, 1999 --
Equivalent to $13.52 per share on
205,378,936 shares of beneficial
interest issued and outstanding;
unlimited shares authorized $ 2,777,389
============
Statement of Operations
for the year ended September 30, 1999
(dollars in thousands)
Investment Income:
Income:
Dividends $ 4,347
Interest 263,815 $ 268,162
------------
Expenses:
Management services fee 12,363
Distribution expenses 6,614
Transfer agent fee 1,803
Reports to shareholders 133
Registration statement and prospectus 290
Postage, stationery and supplies 358
Trustees' fees 29
Auditing and legal fees 55
Custodian fee 71
Taxes other than federal income tax 40
Other expenses 50 21,806
------------ ------------
Net investment income 246,356
------------
Realized Loss and Unrealized
Depreciation on Investments:
Net realized loss (23,484)
Net change in unrealized depreciation on:
Investments (28,268)
Open forward currency contracts 972 (27,296)
------------ ------------
Net realized loss and change in unrealized
depreciation on investments (50,780)
------------
Net Increase in Net Assets
Resulting from Operations $ 195,576
============
Statement of Changes in Net Assets
(dollars in thousands)
Year ended Year ended
September 30, 1999 September 30, 1998
Operations: ------------ ------------
Net investment income $ 246,356 $ 206,542
Net realized (loss) gain on investments (23,484) 16,864
Net change in unrealized depreciation
on investments (27,296) (298,852)
------------ ------------
Net increase (decrease) in net assets
resulting from operations 195,576 (75,446)
------------ ------------
Dividends and Distributions
Paid to Shareholders:
Dividends from net investment income (244,894) (200,841)
Distributions from net realized
gain on investments (8,119) (47,160)
------------ ------------
Total dividends and distributions (253,013) (248,001)
------------ ------------
Capital Share Transactions:
Proceeds from shares sold:
75,509,296 and 64,577,666
shares, respectively 1,060,634 986,681
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on
investments: 12,742,880 and
11,414,562 shares, respectively 178,581 172,376
Cost of shares repurchased:
54,497,988 and 38,731,190
shares, respectively (764,282) (583,545)
------------ ------------
Net increase in net assets
resulting from capital share
transactions 474,933 575,512
------------ ------------
Total Increase in Net Assets 417,496 252,065
Net Assets:
Beginning of year 2,359,893 2,107,828
------------ ------------
End of year (including undistributed
net investment income: $18,569
and $14,347, respectively) $ 2,777,389 $ 2,359,893
============ ============
See Notes to Financial Statements
</TABLE>
Notes to Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - American High-Income Trust (the "fund") is registered under
the Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks a high level of current income and,
secondarily, capital appreciation through a diversified, carefully supervised
portfolio consisting primarily of lower rated, higher risk corporate bonds.
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. Forward currency
contracts are valued at the mean of their representative quoted bid and asked
prices. 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 Trustees.
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.
In the event securities are purchased on a delayed delivery or when-issued
basis, the fund will instruct the custodian to segregate liquid assets
sufficient to meet its payment obligations in these transactions. Interest
income is recognized on an accrual basis. Market discounts, premiums, and
original issue discounts on securities purchased are amortized daily over the
expected life of the security.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends to shareholders
are declared daily after the determination of the fund's net investment income
and are paid to shareholders monthly.
FORWARD CURRENCY CONTRACTS - The fund may enter into forward currency
contracts, which represent agreements to exchange currencies of different
countries at specified future dates at specified rates. The fund enters into
these contracts to reduce its exposure to fluctuations in foreign exchange
rates arising from investments denominated in non-U.S. currencies. The fund's
use of forward currency contracts involves market risk in excess of the amount
recognized in the statement of assets and liabilities. The contracts are
recorded in the statement of assets and liabilities at their net unrealized
value. The fund records realized gains or losses at the time the forward
contract is closed or offset by a matching contract. The face or contract
amount in U.S. dollars reflects the total exposure the fund has in that
particular contract. Risks may arise upon entering these contracts from the
potential inability of counterparties to meet the terms of their contracts and
from possible movements in non-U.S. exchange rates and securities values
underlying these instruments. Purchases and sales of forward currency exchange
contracts (having the same settlement date and broker) are offset and presented
net in the statement of assets and liabilities.
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.
CURRENCY GAINS AND LOSSES - Net realized currency losses on dividends,
interest, sales of non-U.S. bonds and notes, and other receivables and
payables, on a book basis, were $51,000 for the year ended September 30, 1999.
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 September 30, 1999, net unrealized depreciation on investments,
excluding forward currency contracts, for book and federal income tax purposes
aggregated $214,355,000, of which $146,302,000 related to appreciated
securities and $360,657,000 related to depreciated securities. During the year
ended September 30, 1999, the fund realized, on a tax basis, a net capital loss
of $26,403,000 on securities transactions. The fund has deffered, for tax
purposes, to fiscal year ending September 30, 2000, the recognition of capital
losses totaling $21,885,000 which were realized during the period November 1,
1998 through September 30, 1999. The fund had available at September 30, 1999 a
net capital loss carryforward totaling $4,518,000 which may be used to offset
capital gains realized during subsequent years through 2007 and thereby relieve
the fund and its shareholders of any federal income tax liability with respect
to the capital gains that are so offset. The fund will not make distributions
from capital gains while a capital loss carryforward remains. The fund has
recognized, for tax purposes, losses relating to non-U.S. currency transactions
totaling $3,668,000 which were realized during the period November 1, 1997
through September 30, 1998. Net gains related to non-U.S. currency transactions
of $2,918,000 were treated as an adjustment to ordinary income for federal
income tax purposes. The cost of portfolio securities, excluding forward
currency contracts, for book and federal income tax purposes was $2,937,872 at
September 30, 1999.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $12,363,000 for management services
was incurred pursuant to an agreement with Capital Research and Management
Company (CRMC), with which certain officers and Trustees of the fund are
affiliated. The Investment Advisory and Service Agreement provides for monthly
fees, accrued daily, based on an annual rate of 0.30% of the first $60 million
of average net assets; 0.21% of such assets in excess of $60 million but not
exceeding $1 billion; and 0.18% of such assets in excess of $1 billion
("asset-based fee"); plus 3.00% on the first $100 million of the fund's annual
gross investment income; and 2.50% of such income in excess of $100 million
("income-based fee").
DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution, the fund may
expend up to 0.30% of its average net assets annually for any activities
primarily intended to result in sales of fund shares, provided the categories
of expenses for which reimbursement is made are approved by the fund's Board of
Trustees. Fund expenses under the Plan include payments to dealers to
compensate them for their selling and servicing efforts. During the year ended
September 30, 1999, distribution expenses under the Plan were $6,614,000. As of
September 30, 1999, accrued and unpaid distribution expenses were $434,000.
American Funds Distributors, Inc. (AFD), the principal underwriter of the
fund's shares, received $2,990,000 (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 $1,803,000.
DEFERRED TRUSTEES' FEES - Trustees 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 September 30, 1999, aggregate deferred amounts and earnings
thereon since the deferred compensation plan's adoption (1993), net of any
payments to Trustees, were $56,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Trustees 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 $1,144,912,000 and $754,653,000, respectively, during
the year ended September 30, 1999.
As of September 30, 1999, accumulated net realized loss on investments was
$26,403,000 and paid-in capital was $3,001,283,000. The fund reclassified
$2,088,000 and $30,000 from undistributed net realized gains and net investment
income, respectively, to additional paid-in capital. Additionally, the fund
reclassified $2,841,000 and $51,000 from undistributed net realized gains and
realized currency losses, respectively, to net investment income for the year
ended September 30, 1999 as a result of permanent differences between book and
tax.
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 $71,000 was paid by these credits rather than in cash.
At September 30, 1999, the fund had outstanding forward currency contracts
to sell non-U.S. currencies as follows:
<TABLE>
<S> <C> <C> <C> <C>
Contract Amount U.S. Valuation at 9/30/99
-------------- ------------ ------------ ------------
Unrealized
Non-U.S. Currency Sales Contracts Non-U.S. U.S. Amount Depreciation
- ------------------------------------ ------------ ------------ ------------ ------------
Euros
expiring 10/21/99 to 1/31/00 E40,135,000 $42,364,000 $42,992,000 $(628,000)
British pounds
expiring 12/1/99 to 2/10/00 L28,295,000 45,531,000 46,608,000 (1,077,000)
------------ ------------ ------------
$87,895,000 $89,600,000 $(1,705,000)
============ ============ ============
</TABLE>
<TABLE>
Per-Share
Data and Ratios
<S> <C> <C> <C> <C> <C>
Year endSeptembe 30
1999 1998 1997 1996 1995
-------- -------------------------------
Net Asset Value, Beginning
of Year $13.75 $15.69 $14.86 $14.30 $13.97
-------- -------------------------------
Income from Investment
Operations:
Net investment income 1.28 1.30 1.26 1.29 1.33
Net gains or losses on
securities (both realized
and unrealized) (.17) (1.60) .83 .59 .39
-------- -------------------------------
Total from investment operations 1.11 (.30) 2.09 1.88 1.72
-------- -------------------------------
Less Distributions:
Dividends (from net
investment income) (1.29) (1.30) (1.24) (1.32) (1.32)
Distributions (from
capital gains) (.05) (.34) (.02) - (.07)
-------- -------------------------------
Total distributions (1.34) (1.64) (1.26) (1.32) (1.39)
-------- -------------------------------
Net Asset Value, End of Year $13.52 $13.75 $15.69 $14.86 $14.30
======== ===============================
Total Return* 8.11% (2.40)% 14.66%13.68% 13.34%
Ratios/Supplemental Data:
Net assets, end of year
(in millions) $2,777 $2,360 $2,108 $1,547 $1,111
Ratio of expenses to average
net assets .82% .81% .82% .87% .89%
Ratio of net income to
average net assets 9.21% 8.76% 8.35% 8.90% 9.72%
Portfolio turnover rate 29.79 % 54.63% 53.55% 39.74% 29.56%
*Excludes maximum sales charge of 4.75%.
</TABLE>
Independent Auditors' Report
To the Board of Trustees and Shareholders of
American High-Income Trust:
We have audited the accompanying statement of assets and liabilities of
American High-Income Trust (the "fund"), including the investment portfolio, as
of September 30, 1999, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two years in
the period then ended, and the per-share data and ratios for each of the five
years in the period then ended. These financial statements and per-share data
and ratios are the responsibility of the fund's management. Our responsibility
is to express an opinion on these financial statements and per-share data and
ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
per-share data and ratios are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned at September 30, 1999, by correspondence with the custodian and brokers;
where replies were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and per-share data and ratios
referred to above present fairly, in all material respects, the financial
position of American High-Income Trust as of September 30, 1999, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the per-share data and ratios
for each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
/s/Deloitte & Touche LLP
Los Angeles, California
October 29, 1999
1999 TAX INFORMATION (unaudited)
We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions.
Corporate shareholders may exclude up to 70% of qualifying dividends
received during the year. For purposes of computing this exclusion, 1% of the
dividends paid by the fund from net investment income represent qualifying
dividends.
Certain states may exempt from income taxation a portion of the dividends
paid from net investment income that was derived from direct U.S. Treasury
obligations. For purposes of computing this exclusion, 0.9% of the dividends
paid by the fund from net investment income were derived from interest on
direct U.S. Treasury obligations.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans, and 403(b) plans need not be reported as taxable income.
However, many retirement plan trusts may need this information for their annual
information reporting.
SINCE THE AMOUNTS ABOVE ARE REPORTED FOR THE FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099-DIV WHICH WILL BE
MAILED IN JANUARY 2000 TO DETERMINE THE CALENDAR YEAR AMOUNTS TO BE INCLUDED ON
THEIR 1999 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISERS.
AMERICAN FUNDS SHAREHOLDER SERVICES
AMERICAN FUNDSLINE(R)
Use our 24-hour automated phone system for fund information and transactions.
FUNDSLINE ONLINE(R)
Visit our Web site when you want to access your account, download a prospectus,
or find fund information.
REDUCED SALES CHARGE
Larger purchases may qualify for a reduced sales charge. To help reach a
breakpoint, you may -
* Add your present purchase to the value of all eligible household accounts
and/or
* Add your present purchase to purchases you intend to make over 13 months
Assets in money market funds generally do not apply when determining sales
charges.
RETIREMENT PLANS
A wide range of fund choices for individual and company-sponsored retirement
plans.
AMERICAN FUNDSLINK(SM)
Link your fund account to your bank account for direct transfers between the
two and to purchase shares using American FundsLine or FundsLine OnLine.
AUTOMATIC TRANSACTIONS
Use this service when you want to purchase, sell and exchange shares on a
regular basis.
FLEXIBLE DIVIDEND OPTIONS
Use your dividend and capital gain distributions to meet your changing needs.
You may -
* Invest dividends and capital gain distributions back into the fund
* Diversify by investing dividends and capital gain distributions into another
American Fund
* Take dividends in cash
* Have dividends paid directly to someone else
Because certain transactions have restrictions or tax consequences, please
consult your financial adviser before requesting changes.
WOULD YOU LIKE MORE INFORMATION?
Your financial adviser will be happy to explain these services in greater
detail, or you may contact American Funds Service Company.
To contact American Funds Service Company:
SHAREHOLDER SERVICES REPRESENTATIVE - 8 a.m. to 8 p.m. Eastern time -
800/421-0180
AMERICAN FUNDSLINE - 24-hour automated telephone system - 800/325-3590
FUNDSLINE ONLINE - Web site - www.americanfunds.com
BY MAIL - Write to the service center nearest you.
(If you live outside the United States, please write to the Western service
center.)
[map of United States separated into regions]
WESTERN
American Funds
Service Company
P.O. Box 2205
Brea, CA 92822-2205
WEST CENTRAL
American Funds
Service Company
P.O. Box 659522
San Antonio, TX 78265-9522
EAST CENTRAL
American Funds
Service Company
P.O. Box 6007
Indianapolis, IN 46206-6007
EASTERN
American Funds
Service Company
P.O. Box 2280
Norfolk, VA 23501-2280
Please obtain the applicable prospectuses from your financial adviser or our
Web site and read them carefully before investing or sending money. American
Funds reserves the right to terminate or modify these services.
AMERICAN HIGH-INCOME TRUST
BOARD OF TRUSTEES
H. FREDERICK CHRISTIE - Rolling Hills Estates, California
Private investor; former President and Chief Executive
Officer, The Mission Group; former President,
Southern California Edison Company
DON R. CONLAN - South Pasadena, California
President (retired), The Capital Group Companies, Inc.
DIANE C. CREEL - Long Beach, California
President and Chief Executive Officer,
The Earth Technology Corporation (international
consulting engineering)
MARTIN FENTON - San Diego, California
Managing Director, Senior Resource Group, LLC
(development and management of senior living
communities)
LEONARD R. FULLER - Marina del Rey, California
President, Fuller Consulting (financial management
consulting firm)
ABNER D. GOLDSTINE - Los Angeles, California
Vice Chairman of the Board of the fund
Senior Vice President and Director, Capital Research
and Management Company
PAUL G. HAAGA, JR. - Los Angeles, California
Chairman of the Board of the fund
Executive Vice President and Director, Capital Research
and Management Company
RICHARD G. NEWMAN - Los Angeles, California
Chairman of the Board, President and Chief Executive
Officer, AECOM Technology Corporation (architectural
engineering)
HERBERT HOOVER III, a Trustee since 1988, has retired from the Board. The
Trustees thank him for his many contributions to the fund.
OTHER OFFICERS
DAVID C. BARCLAY - Los Angeles, California
President of the fund
Vice President, Capital Research and Management
Company
MICHAEL J. DOWNER - Los Angeles, California
Vice President of the fund
Senior Vice President - Fund Business Management
Group, Capital Research and Management Company
SUSAN M. TOLSON - Los Angeles, California
Vice President of the fund
Senior Vice President and Director, Capital Research
Company
JULIE F. WILLIAMS - Los Angeles, California
Secretary of the fund
Vice President - Fund Business Management Group,
Capital Research and Management Company
ANTHONY W. HYNES, JR. - Brea, California
Treasurer of the fund
Vice President - Fund Business Management Group,
Capital Research and Management Company
KIMBERLY S. VERDICK - Los Angeles, California
Assistant Secretary of the fund
Assistant Vice President - Fund Business Management
Group, Capital Research and Management Company
TODD L. MILLER - Brea, California
Assistant Treasurer of the fund
Assistant Vice President - Fund Business Management
Group, Capital Research and Management Company
[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
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, California 90071-2371
INDEPENDENT AUDITORS
Deloitte & Touche LLP
1000 Wilshire Boulevard
Los Angeles, California 90017-2472
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
This report is for the information of shareholders of American High-Income
Trust, 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 December 31, 1999, 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, 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.
Printed on recycled paper
Litho in USA SG/INS/4452
Lit. No. AHIT-011-1199
