<PAGE> 1
Transamerica Income Shares, Inc.
ANNUAL REPORT
MARCH 31, 1996
[LOGO]
<PAGE> 2
THE ECONOMY . . .
The economy seems to be experiencing a growth spurt. The first quarter GDP
number will probably come in strong despite the bad weather, government
shutdowns and striking autoworkers. Growth in March seems to have picked up
dramatically. Housing and auto sales were very strong and job growth showed
impressive gains. This strength should continue for at least another quarter and
economic growth for the year should be in the 2.5% to 3.0% range.
The strength of the economy caught the bond market by surprise early in
1996. Bond prices reflected market participants' anticipations of continued slow
growth and easy monetary policy from the Federal Reserve. As expectations
changed, bond prices fell and long-term Treasury interest rates rose from 5.94%
at year end 1995 to 6.80% presently. The bond market still links economic growth
with higher inflation. Therefore, long-term Treasury interest rates may stay in
a 6.50% to 7.25% trading range for a while. We expect interest rates to return
to lower levels later in the year when economic growth returns to the Federal
Reserve's targeted rate of 2.0% to 2.5%.
THE YEAR IN REVIEW . . .
The Company's net asset value decreased from $24.88 per share on September
30, 1995 to $24.58 at March 31, 1996. Net asset value on March 31, 1995 was
$23.37 per share. Net investment income for the fiscal year ended March 31, 1996
was $12,239,442 or $1.94 per share compared to $1.93 per share for the prior
fiscal year. The current annual dividend rate is $1.92, payable in monthly
dividends of 16 cents per share. The 16 cent monthly rate was first paid in June
1993 and dividends in that amount have been paid each month since except for
January 1996 when a 17 cent per share dividend from income was paid, and for
December 1993 and 1994 when dividends of 24 and 23 cents per share, including
7 1/4 and 5.88235 cents from realized capital gains, respectively, were paid to
shareholders.
PORTFOLIO MANAGEMENT . . .
Management of the Company's portfolio and portfolio decisions on a
day-to-day basis are made by the senior portfolio managers of Transamerica
Investment Services, Inc., the Company's investment adviser (the "Adviser").
They are: Richard N. Latzer, President of the Adviser and Senior Vice President
and Chief Investment Officer of Transamerica Corporation, the Adviser's parent;
Gary U. Rolle, Executive Vice President
<PAGE> 3
and Chief Investment Officer of the Adviser; Susan A. Silbert, Senior Vice
President and Director of Fixed Income of the Adviser; and Sharon K. Kilmer,
Vice President of the Adviser. All of the above senior portfolio managers have
held the same or similar positions with the Adviser for more than five years.
Each also serves the Company as a director or officer.
Highlights: For the fiscal years ended March 31:
<TABLE>
<CAPTION>
Per Share: 1996 1995
<S> <C> <C>
Net investment income............. $ 1.94 $ 1.93
Income dividends paid............. 1.93 1.93
Capital gain distribution......... -- 0.06
Net asset value at year end....... 24.58 23.37
</TABLE>
Distributions: For the fiscal years ended March 31:
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C>
$1.93 $1.99* $2.01* $2.01 $2.16
</TABLE>
* Includes a distribution of 5.88235 and 7-1/4 cents from realized capital gains
in 1995 and 1994, respectively.
Quality: Ratings used are the highest by Moody's or Standard & Poor's for bonds
owned on March 31, 1996:
<TABLE>
<CAPTION>
LOWER OR
AAA AA A BBB NON-RATED
<S> <C> <C> <C> <C>
1.3% 7.6% 29.3% 49.6% 12.2%
</TABLE>
STATEMENT OF FUNDAMENTAL INVESTMENT POLICY . . .
Transamerica Income Shares has designated, since its inception in 1972, a
number of fundamental investment policies which cannot be changed without
approval by a majority vote of the Company's shareholders. These policies are
summarized below.
The Company will not:
(a) Issue senior securities or borrow money, except that as a temporary
measure for extraordinary or emergency purposes, the Company may borrow up to
5% of its total assets.
(b) Knowingly purchase securities subject to legal or contractual
restrictions on resale.
(c) Act as an underwriter.
(d) Purchase real estate or interests in real estate, except that the
Company may invest in marketable securities secured by real estate or issued
by companies, including real estate investment trusts, which deal in real
estate.
(e) Make loans, except through the purchase of debt securities or other debt
instruments, through
<PAGE> 4
lending its portfolio securities, and by entering into repurchase agreements
to the extent permitted by the Company's investment objectives and policies.
(f) Investment in companies for the purpose of exercising control or
management.
(g) Purchase securities on margin or make short sales of securities.
(h) Purchase securities issued by Transamerica or by any of its
majority-owned subsidiaries.
(i) Participate on a joint, or a joint and several, basis in any securities
trading account, except that the Company may, to the extent permitted by the
Securities and Exchange Commission, combine orders with others for the
purchases and sales of securities in order to achieve the best overall
execution.
(j) Purchase or retain the securities of any issuer if those officers and
directors of the Company or its investment adviser owning individually more
than 1/2 of 1% of the securities of that issuer together own beneficially more
than 5% of the issuer's securities.
(k) Invest in commodities or commodity contracts, or write or purchase puts,
calls, or combinations of both.
(l) Purchase the securities of any other investment company.
(m) Concentrate its investments in any one industry, except that the Company
may invest up to 25% of its assets in securities issued by companies
principally engaged in any one industry. Neither all utility companies, as a
group, nor all finance companies, as a group, will be considered a single
industry for purposes of this limitation.
(n) Invest more than 5% of its total assets in the securities of any one
issuer other than the United States Government or its instrumentalities or in
the securities of companies which (together with predecessors) have a record
of less than three years continuous operation; or purchase more than 10% of
the outstanding voting securities of any one issuer.
<PAGE> 5
INVESTMENT PORTFOLIO
MARCH 31, 1996
<TABLE>
<CAPTION>
Coupon % Par Market
& Maturity Value Value
----------- ---------- ------------
<S> <C> <C> <C>
BONDS &
DEBENTURES (98.2%)
DOMESTIC & FOREIGN
GOVERNMENTS (4.3%)
Commonwealth of
Australia............ 9-5/8s, '06 $4,000,000 $ 4,744,840
U.S. Treasury Bond...10-3/4s, '05 1,500,000 1,950,000
ELECTRIC & GAS UTILITIES
(18.3%)
Arizona Public
Service..............10-1/4s, '20 2,250,000 2,550,848
Arkansas Power &
Light................ 10s, '20 3,250,000 3,487,575
Boston Edison......... 9-3/8s, '21 2,200,000 2,394,414
CTC Mansfield.........11-1/8s, '16 1,000,000 1,041,980
Columbus Southern
Power................ 8.40s, '22 2,000,000 2,132,780
Commonwealth Edison... 9-7/8s, '20 2,000,000 2,430,840
8s, '23 900,000 867,663
Detroit Edison........ 8.21s, '22 1,000,000 1,063,550
8.24s, '23 2,000,000 2,144,080
Gulf States
Utilities........... 8.94s, '22 2,500,000 2,705,925
Hydro-Quebec.......... 8s, '13 3,000,000 3,122,700
Long Island
Lighting............ 8.90s, '19 1,200,000 1,120,524
9-5/8s, '24 2,300,000 2,344,643
Virginia Electric
& Power.............. 8-5/8s, '24 1,000,000 1,078,550
FINANCIAL (8.3%)
Barclays North
American.............10-1/2s, '17 3,000,000 3,283,920
Citicorp.............. 8s, '03 1,000,000 1,061,360
Fleet Financial
Group............... 8-1/8s, '04 2,000,000 2,139,980
Ford Motor Credit..... 8.20s, '02 2,000,000 2,132,520
General Motors
Acceptance........... 8-1/2s, '03 3,000,000 3,242,010
Mellon Bank........... 7s, '06 1,000,000 998,800
FOREST & PAPER PRODUCTS
(4.6%)
Georgia-Pacific....... 9-5/8s, '22 3,000,000 3,165,840
8-1/4s, '23 3,000,000 2,908,440
James River........... 9-1/4s, '21 1,000,000 1,121,520
</TABLE>
<PAGE> 6
INVESTMENT PORTFOLIO (CONTINUED)
MARCH 31, 1996
<TABLE>
<CAPTION>
Coupon % Par Market
& Maturity Value Value
----------- ---------- ------------
<S> <C> <C> <C>
HEALTHCARE (1.3%)
Tenet Healthcare...... 8-5/8s, '03 $2,000,000 $ 2,050,000
INDUSTRIALS (14.0%)
Anheuser-Busch........ 10s, '18 358,000 381,628
Carpenter Technology.. 9s, '22 1,000,000 1,073,460
Caterpillar........... 9-3/4s, '19 2,500,000 2,832,800
9-3/8s, '21 1,000,000 1,210,330
Cincinnati Milacron... 8-3/8s, '04 2,000,000 2,018,180
Conagra............... 9-3/4s, '21 3,000,000 3,600,840
General Motors Ser A.. 9.40s, '21 3,750,000 4,460,737
McDonnell Douglas..... 9-1/4s, '02 4,000,000 4,484,600
National Steel........ 8-3/8s, '06 575,000 559,906
Textron............... 8-3/4s, '22 1,000,000 1,054,960
MEDIA (9.0%)
Continental
Cablevision.......... 9-1/2s, '13 1,000,000 1,120,000
News America
Holdings............. 9-1/4s, '13 2,500,000 2,787,050
Tele-Communications... 9.80s, '12 2,500,000 2,870,625
9-1/4s, '23 3,000,000 3,116,850
Time Warner
Entertainment........ 8-3/8s, '33 4,000,000 4,011,840
PETROLEUM (4.4%)
Occidental Petroleum.. 10-1/8s '09 500,000 609,410
Phillips Petroleum.... 8.49s, '23 4,000,000 4,128,080
7.92s, '23 1,000,000 970,500
Union Oil of
California........... 8-3/4s, '01 1,000,000 1,083,220
PIPELINES (8.9%)
Colorado Interstate
Gas.................. 10s, '05 2,000,000 2,395,080
NorAm Energy.......... 8.90s, '06 3,000,000 3,237,450
Northwest Pipeline.... 9s, '22 2,000,000 2,131,140
Texas Gas
Transmission......... 8-5/8s, '04 1,000,000 1,139,670
Transcanada
Pipelines........... 8-1/2s, '23 2,000,000 2,146,980
Transco Energy........ 9-3/8s, '01 2,500,000 2,794,975
</TABLE>
<PAGE> 7
INVESTMENT PORTFOLIO (CONTINUED)
MARCH 31, 1996
<TABLE>
<CAPTION>
Coupon % Par Market
& Maturity Value Value
----------- ---------- ------------
<S> <C> <C> <C>
RETAIL (7.1%)
Dayton Hudson......... 10s, '11 $1,000,000 $ 1,183,160
9-1/4s, '11 2,800,000 3,117,884
8-1/2s, '22 1,000,000 1,002,450
May Department
Stores............... 9-3/4s, '21 750,000 900,390
8-3/8s, '22 2,000,000 2,050,520
Pathmark Stores....... 9-5/8s, '03 3,000,000 2,820,000
TELECOMMUNICATIONS (4.1%)
General Telephone &
Electronics..........10-3/4s '17 3,000,000 3,307,680
Pacific Bell.......... 8-1/2s, '31 3,000,000 3,133,890
TRANSPORTATION (13.9%)
Burlington Northern... 9-1/4s, '06 1,000,000 1,126,110
CSX................... 9s, '06 3,000,000 3,402,660
Delta Air Lines.......10-3/8s, '11 2,000,000 2,375,000
9-3/4s, '21 2,000,000 2,315,980
Federal Express....... 9-5/8s, '19 2,500,000 2,634,300
Kansas City Southern
Industries........... 6-5/8s, '05 2,800,000 2,688,728
8.80s, '22 2,250,000 2,387,655
United Air Lines...... 9-3/4s, '21 4,000,000 4,605,800
------------
TOTAL SECURITIES (98.2%)........................ 152,557,820
SHORT-TERM
INVESTMENT (1.4%)
State Street Bank Eurodollar
Time Deposit... 4-1/2s, 04-01-96
2,131,252
------------
TOTAL INVESTMENT PORTFOLIO (99.6%).............. 154,689,072
Receivables and other assets,
less liabilities (0.4%)....................... 605,262
------------
TOTAL NET ASSETS (100.0%)....................... $155,294,334
============
</TABLE>
See notes to financial statements.
<PAGE> 8
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996
<TABLE>
<S> <C>
ASSETS
Investment portfolio:
Securities at market value
(Identified cost $141,920,232)..... $152,557,820
Short-term investments (at cost plus
interest earned)................... 2,131,252
------------
154,689,072
Interest receivable................... 2,880,965
Other assets.......................... 50,935
------------
157,620,972
------------
LIABILITIES
Payable for:
Securities purchased................ 1,128,597
Income dividends declared........... 1,011,003
Management fee...................... 65,972
Accrued expenses and other
liabilities......................... 121,066
------------
2,326,638
------------
Total Net Assets -- equivalent to
$24.58 per share.................... $155,294,334
============
SUMMARY OF SHAREHOLDERS' EQUITY
Common Stock -- 6,318,771 shares of $1
par value outstanding, 20,000,000
shares authorized................... $ 6,318,771
Additional capital.................... 137,464,657
------------
Capital paid in....................... 143,783,428
Capital gains retained................ 405,455
Undistributed net investment income... 251,537
Undistributed net realized gains...... 216,326
Net unrealized appreciation of
securities.......................... 10,637,588
------------
Total Net Assets...................... $155,294,334
============
</TABLE>
See notes to financial statements.
<PAGE> 9
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
<TABLE>
<S> <C> <C>
Investment Income:
Income:
Interest................ $13,212,024
Expenses:
Management fee (Note
2).................... $ 786,809
Transfer agent fee and
expenses.............. 43,624
Auditing fee............ 33,908
Postage................. 24,381
Insurance............... 24,159
Custodian fee........... 16,448
NYSE annual fee......... 16,214
Directors fees and
expenses.............. 9,857
Other................... 17,182 972,582
----------- -----------
Net investment income....... 12,239,442
Net Realized and
Unrealized Gain on
Securities:
Net realized gain from
security transactions
(excluding short-term
investments):
Proceeds from securities
sold................... 21,983,622
Cost of securities
sold................... 21,712,842
-----------
Net realized gain on
security transactions
(Notes 3 and 4).......... 270,780
-----------
Unrealized appreciation of
securities:
Beginning of year....... 3,327,820
End of year............. 10,637,588
-----------
Increase in unrealized
appreciation of
securities............... 7,309,768
-----------
Net realized and unrealized
gain on securities......... 7,580,548
-----------
Net increase in net assets
resulting from
operations................. $19,819,990
===========
</TABLE>
See notes to financial statements.
<PAGE> 10
STATEMENT OF CHANGES IN TOTAL
NET ASSETS
FOR THE YEARS ENDED MARCH 31
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Increase (Decrease) In
Total Net Assets:
Operations:
Net investment income... $ 12,239,442 $ 12,231,721
Net realized gain (loss)
on security
transactions........... 270,780 (54,454)
Net unrealized gain
(loss) on securities... 7,309,768 (4,632,231)
------------ ------------
Increase in total net
assets resulting from
operations............. 19,819,990 7,545,036
Dividends to shareholders
from net investment
income ($1.93 per share
each year)............... (12,195,228) (12,202,662)
Capital gain distribution
($0.06 per share)........ -- (371,693)
------------ ------------
Increase (decrease) in
total net assets......... 7,624,762 (5,029,319)
Total Net Assets:
Beginning of year
(includes undistributed
net investment income
of $207,323 and
$178,264,
respectively).......... 147,669,572 152,698,891
------------ ------------
End of year (includes
undistributed net
investment income of
$251,537 and $207,323,
respectively).......... $155,294,334 $147,669,572
============ ============
</TABLE>
See notes to financial statements.
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- The Company is registered under the Investment Company Act of 1940 as
a diversified, closed-end management investment company. The primary investment
objective of the Company is to seek as high a level of current income as is
consistent with prudent investment through a diversified portfolio primarily of
marketable debt securities. The Company consistently follows the following
accounting policies:
A -- The Company primarily invests in debt securities such as bonds and
debentures. These securities, even though sometimes listed on a national
securities exchange, primarily trade in the over-the-counter market.
Accordingly, prices used are the current bid or similar ascertainable market
value when the over-the-counter market more accurately reflects value. U.S.
Government securities are valued at the bid price. In instances where securities
are listed and primarily trade on a national securities exchange, they are
valued at the sale price on the last business day of the period. Prices are
provided by Merrill Lynch Securities Pricing Service, a non-affiliated
securities pricing service. Short-term investments with maturities of 60 days or
less are valued at cost plus interest earned, which approximates market value.
B -- It is the Company's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net investment income and net realized capital gains to
its shareholders in accordance with the minimum distribution requirements of the
Code.
C -- Security transactions are accounted for on the transaction date and
distributions to shareholders are recorded on the ex-dividend date.
NOTE 2 -- The management fee, computed on weekly net assets at the annual rate
of 1/2 of 1%, was paid to Transamerica Investment Services, Inc.
NOTE 3 -- The cost of securities purchased and the proceeds of securities sold
(excluding short-term investments) were $21,613,382 and $21,983,622,
respectively, for the year ended March 31, 1996. Realized gains or losses are
based on the specific-certificate identification method. At March 31, 1996, the
gross unrealized gain on securities held in the investment portfolio was
$11,385,196 and the gross unrealized loss was $747,608. The cost of securities
held at March 31, 1996 was the same for federal income tax and financial
reporting purposes.
NOTE 4 -- During the year ended March 31, 1996, the Company utilized $54,454 of
capital losses carried forward from the prior year. As of March 31, 1996, the
Company has no capital loss carryforwards.
<PAGE> 12
NOTE 5 -- Financial highlights for each share of Common Stock outstanding
throughout each period:
<TABLE>
<CAPTION>
Year ended March 31
----------------------------------------------------
1996 1995 1994 1993+ 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Per share operating
performance:
Net asset value,
beginning of year..... $23.37 $24.17 $25.15 $24.00 $23.13
-------- -------- -------- -------- --------
Net investment income.. 1.94 1.93 1.95 2.03 2.13
Net realized and
unrealized gain (loss)
on securities......... 1.20 (0.74) (0.92) 1.61 0.90
-------- -------- -------- -------- --------
Total from investment
operations............ 3.14 1.19 1.03 3.64 3.03
-------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income..... (1.93) (1.93) (1.94) (2.01) (2.16)
Distribution from net
realized capital
gains................. -- (0.06) (0.07) -- --
-------- -------- -------- -------- --------
Total distributions.... (1.93) (1.99) (2.01) (2.01) (2.16)
-------- -------- -------- -------- --------
Dilution resulting from
rights offering....... -- -- -- (0.48) --
-------- -------- -------- -------- --------
Net asset value, end of
year.................. $24.58 $23.37 $24.17 $25.15 $24.00
======== ======== ======== ======== ========
Per share market value,
end of year........... $24.375 $22.50 $23.375 $26.375 $25.50
Total investment
return*............... 17.08% 5.07% -4.27% 11.81% 18.78%
Ratios/supplemental
data:
Net assets, end of year
(000s)................ $155,294 $147,670 $152,699 $158,912 $126,361
Ratio of expenses to
average net assets.... 0.62% 0.68% 0.69% 0.60% 0.68%
Ratio of net investment
income to average net
assets................ 7.83% 8.35% 7.60% 8.27% 8.98%
Portfolio turnover
rate.................. 14% 15% 15% 32% 30%
</TABLE>
The number of shares outstanding at the end of each fiscal year was 6,318,771
except for the fiscal year ending in 1992 when the number outstanding was
5,265,643 shares.
- ---------------------------
+ Based on monthly average shares outstanding during the year.
* Based on the market price of the Company's shares.
<PAGE> 13
NOTE 6 -- The following is a summary of unaudited results of operations for the
quarters ended:
<TABLE>
<CAPTION>
3-31-96 12-31-95 9-30-95 6-30-95
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Investment income.. $ 3,315,150 $3,320,838 $3,276,936 $3,299,100
Expenses........... 233,853 250,536 239,774 248,419
----------- ---------- ---------- ----------
Net investment
income............ $ 3,081,297 $3,070,302 $3,037,162 $3,050,681
=========== ========== ========== ==========
Net realized and
unrealized gain
(loss) on
securities........ $(7,471,027) $5,521,925 $1,330,517 $8,199,133
=========== ========== ========== ==========
Per Common Share:
Net investment
income.......... $ 0.49 $ 0.49 $ 0.48 $ 0.48
=========== ========== ========== ==========
Net asset value.... $ 24.58 $ 25.75 $ 24.88 $ 24.67
=========== ========== ========== ==========
</TABLE>
FEDERAL TAX INFORMATION ON DIVIDENDS PAID:
All of the Company's income was derived from interest and gains realized
from the sale of investment securities, and, therefore, no portion of
shareholder distributions paid during the fiscal year ended March 31, 1996
qualified for the 70% dividend deduction for corporations.
Subsequent to March 31, 1996, the 16 cent distribution payable on May 15,
1996, was comprised of 12.58 cents from net investment income and 3.42 cents
from net realized long-term capital gains. Information regarding the tax status
of all dividends and distributions paid during the calendar year will be
provided to shareholders on Form 1099 in January, 1997.
<PAGE> 14
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders
Transamerica Income Shares, Inc.
We have audited the accompanying statement of assets and liabilities of
Transamerica Income Shares, Inc., including the investment portfolio, as of
March 31, 1996, and the related statement of operations for the year then ended
and the statement of changes in total net assets for each of the two years in
the period then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements 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 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 on March 31, 1996, by correspondence with the
custodian. 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 referred to above present fairly, in
all material respects, the financial position of Transamerica Income Shares,
Inc. at March 31, 1996, the results of its operations for the year then ended,
and the changes in its total net assets for each of the two years in the period
then ended in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Los Angeles, California
April 24, 1996
<PAGE> 15
AUTOMATIC REINVESTMENT PLAN
Holders of 50 or more shares of the Company's Common Stock are offered the
opportunity to reinvest dividends and other distributions in shares of the
Common Stock of the Company through participation in the Plan.
Under the Plan, Chemical Mellon Shareholder Services, L.L.C., as administrator
(the "Administrator"), automatically invests dividends and other distributions
in shares of the Company's Common Stock by making purchases in the open market.
Plan participants may also deposit cash in amounts between $25 and $2,500 with
the Administrator for the purchase of additional shares. Dividends,
distributions and cash deposits are invested in, and each participant's account
credited with, full and fractional shares.
The price at which the Administrator is deemed to have acquired shares for a
participant's account is the average price (including brokerage commissions and
any other costs of purchase) of all shares purchased by it for all participants
in the Plan.
Your dividends and distributions, even though automatically reinvested, continue
to be taxable as though received in cash.
THE PLAN HAS A NEW FEATURE -- OPTIONAL CASH ONLY. You can now send in additional
cash investments only, without reinvesting your monthly dividend. If you own 50
or more shares, both registered in your name and currently in your Plan account,
and want to periodically send additional cash between $25 and $2,500 for
investment, you may do so. The shares you own and the new shares acquired by the
optional cash you send in will not participate in automatic reinvestment of
dividends and distributions. Rather, the shares you acquire if you participate
in the "optional cash only" portion of the Plan will be held for safekeeping in
your Plan account. Each investment will be made on or near the next dividend
payment date. All other procedures for the purchase and sale of shares described
above will apply.
The Administrator charges only one $1.75 service fee for each investment,
including both automatic dividend reinvestment and optional cash.
Shareholders interested in obtaining a copy of the Plan should contact the Plan
Administrator:
Chemical Mellon Shareholder Services, L.L.C.
Shareholder Investment Services
P.O. Box 750
Pittsburgh, PA 15230-0750
1-800-288-9541
<PAGE> 16
OFFICERS AND DIRECTORS
THOMAS M. ADAMS, Secretary
J. RICHARD ATWOOD, Treasurer
DONALD E. CANTLAY, Director
SHARON K. KILMER, Vice President
RICHARD N. LATZER, Director
DeWAYNE W. MOORE, Director
GARY U. ROLLE, President & Chairman
SUSAN A. SILBERT, Vice President
PETER J. SODINI, Director
- ----------------------------------------------------------
Manager
Transamerica Investment Services, Inc.
Box 2438, Los Angeles, CA 90051
Transfer Agent
Chemical Mellon Shareholder Services, L.L.C.
111 Founders Plaza, Suite 1100
East Hartford, CT 06108
1-800-288-9541
For hearing and speech impaired (TDD)
1-800-231-5469
Listed
New York Stock Exchange
Symbol: TAI
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Transamerica Income Shares is a closed-end investment company which invests
primarily in debt securities. Its objective is to provide a high level of
current income.
