UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-08765 ---------- Managed High Yield Plus Fund Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 51 West 52nd Street, New York, New York 10019-6114 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Mark F. Kemper, Esq. UBS Global Asset Management (US) Inc. 51 West 52nd Street New York, NY 10019-6114 (Name and address of agent for service) Copy to: Jack W. Murphy, Esq. Dechert LLP 1775 I Street, N.W. Washington, DC 20006-2401 Registrant's telephone number, including area code: 212-882 5000 Date of fiscal year end: May 31 Date of reporting period: November 30, 2004 ITEM 1. REPORTS TO STOCKHOLDERS. [UBS GLOBAL ASSET MANAGEMENT LOGO] Managed High Yield Plus Fund Inc. Semiannual Report November 30, 2004 MANAGED HIGH YIELD PLUS FUND INC. January 14, 2005 DEAR SHAREHOLDER, ---------------------------- Managed High Yield Plus We present you with the semiannual report Fund Inc. for Managed High Yield Plus Fund Inc. for the six months ended November 30, 2004. INVESTMENT GOALS: Primarily, high income; PERFORMANCE secondarily, capital appreciation. Over the six months ended November 30, 2004, Managed High Yield Plus Fund Inc. (the "Fund") produced a net asset value PORTFOLIO MANAGER/ADVISOR: return of 12.87%, outperforming the 12.77% Marianne Rossi, net asset value return of its peers, as UBS Global Asset Management measured by the Lipper High Current Yield (US) Inc. Funds (Leveraged) median. On a market price basis, the Fund's 19.59% return outperformed the 14.48% return of its peer COMMENCEMENT: group. The Fund issued a press release in June 26, 1998 November regarding a potential rights offering. This may have influenced the Fund's market price returns for the NYSE SYMBOL: period. Shareholders will receive separate HYF materials providing further details of any rights offering. (For more on the Fund's performance, including market price DIVIDEND PAYMENTS: returns, please refer to "Performance At A Monthly Glance" on page 5.) ---------------------------- The Fund continued to use leverage during the period, which enhanced performance on an absolute basis. As of November 30, 2004, leverage was 29.0% of total assets. Leverage magnifies returns on the upside and on the downside, and may create wider dispersions of returns within the Fund's peer group, depending upon the degree of leverage. AN INTERVIEW WITH PORTFOLIO MANAGER MARIANNE ROSSI Q. HOW WOULD YOU DESCRIBE THE ECONOMIC ENVIRONMENT DURING THE SIX-MONTH REPORTING PERIOD? A. Although the economy lost some traction in the second quarter of 2004, it appeared to regain some strength as the reporting period progressed. After rising 4.5% in the first quarter of 2004, gross domestic product (GDP) came in at 3.3% in the second quarter of the year. Third quarter GDP then rose to 4.0%. 1 MANAGED HIGH YIELD PLUS FUND INC. Q. HOW DID THE FEDERAL RESERVE BOARD (THE "FED") REACT IN THIS ECONOMIC ENVIRONMENT? A. After many months of speculation, the Fed raised the federal funds rate (or "fed funds" rate)-the rate that banks charge one another for funds they borrow on an overnight basis-from 1.00% to 1.25% on June 30, 2004. The Fed raised rates again at its subsequent meetings on August 10, September 21, November 10 and December 14 (after period end), bringing the fed funds rate to 2.25%. Coinciding with the November 10 rate hike, the Fed's statement on the economy led market participants to believe that rate hikes would continue in the future. Q. HOW DID HIGH YIELD BONDS PERFORM DURING THE PERIOD? A. As the reporting period began, the high yield market was facing a number of uncertainties, including the magnitude and timing of the Federal Reserve Board's interest rate hikes, the impact of higher oil and gas prices on the economic recovery, and heightened geopolitical concerns. These issues negatively impacted the entire fixed income market during much of the second quarter of 2004, and high yield bonds were no exception. However, since bottoming in mid-May 2004, high yield bonds have rallied sharply. This rebound was driven by positive market fundamentals, better supply/demand trends and improving Treasury bond performance. The ongoing economic recovery has resulted in substantially lower high yield default rates, credit improvement as shown by the number of downgrades versus upgrades, higher recovery rates on problem bonds and enhanced operating performance for high yield issuers. The market also experienced an increasing number of positive events, including merger and acquisition activity and equity issuance. Q. HOW DID YOU POSITION THE FUND'S PORTFOLIO OVER THE SIX-MONTH PERIOD? A. We were overweight in B-rated and CCC-rated securities, and underweight in BB-rated issues, given our belief that, as the economy strengthens, these sectors should perform well. In terms of sector positioning, we focused on cyclical industry sectors that are tied to the expanding economy. In particular, we held overweight positions in chemicals, printing and paper. 2 MANAGED HIGH YIELD PLUS FUND INC. Q. WHICH STRATEGIES ENHANCED THE FUND'S PERFORMANCE? A. In general, the Fund's CCC-rated holdings and exposure to cyclical sectors enhanced results. As the economy continued to expand, these areas of the market performed well as the underlying fundamentals of the issuing companies improved. Q. WHICH STRATEGIES DID NOT MEET YOUR EXPECTATIONS? A. During the reporting period, the Fund's exposure to several wireless telecommunications companies detracted from results. In particular, American Cellular (0.7%), Dobson Communications (1.0%) and Triton PCS (0.9%) hurt performance as these companies experienced poor operating results.* Q. WHAT IS YOUR OUTLOOK FOR THE ECONOMY AND THE HIGH YIELD MARKET? A. At current levels, we believe the high yield market has priced in much of the positive economic news. However, we do not anticipate spreads to widen significantly. We anticipate that companies will access the equity markets to pay for capital expenditures, and that merger and acquisition activity will accelerate, which is typically a positive for the market. Also, we expect that the improved economic situation will enhance corporate operating results and that this, in turn, will lead to credit upgrades and lower default rates. We feel these positive fundamentals should bode well for the high yield market going into 2005. * Weightings represent percentages of net assets as of 11/30/04. The Fund's composition will differ over time. 3 MANAGED HIGH YIELD PLUS FUND INC. We thank you for your continued support and welcome any comments or questions you may have. For additional information on UBS Funds,* please contact your financial advisor, or visit us at www.ubs.com. Sincerely, /s/ Joseph A. Varnas Joseph A. Varnas President Managed High Yield Plus Fund Inc. Managing Director UBS Global Asset Management (US) Inc. /s/ Marianne Rossi Marianne Rossi Portfolio Manager Managed High Yield Plus Fund Inc. Managing Director UBS Global Asset Management (US) Inc. This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended November 30, 2004, and reflects our views at the time of its writing. Of course, these views may change in response to changing circumstances, and they do not guarantee the future performance of the markets or the Fund. We encourage you to consult your financial advisor regarding your personal investment program. * Mutual funds are sold by prospectus only. The prospectus for a fund contains more complete information regarding investment objectives, risks, charges and expenses, and should be read carefully before investing. 4 MANAGED HIGH YIELD PLUS FUND INC. PERFORMANCE AT A GLANCE (UNAUDITED) AVERAGE ANNUAL RETURNS FOR PERIODS ENDED 11/30/04 SINCE 6 MONTHS 1 YEAR 5 YEARS INCEPTION* - -------------------------------------------------------------------------------------------- NET ASSET VALUE RETURNS** - -------------------------------------------------------------------------------------------- Managed High Yield Plus Fund Inc. 12.87% 19.73% -1.16% -2.29% - -------------------------------------------------------------------------------------------- Lipper High Current Yield Funds (Leveraged) median*** 12.77 17.63 5.39 3.27 - -------------------------------------------------------------------------------------------- MARKET PRICE RETURNS** - -------------------------------------------------------------------------------------------- Managed High Yield Plus Fund Inc. 19.59% 28.20% 2.74% -0.62% - -------------------------------------------------------------------------------------------- Lipper High Current Yield Funds (Leveraged) median*** 14.48 13.56 8.78 2.64 - -------------------------------------------------------------------------------------------- SHARE PRICE AND DIVIDEND 11/30/2004 5/31/2004 11/30/2003 - -------------------------------------------------------------------------------- Net Asset Value $ 5.32 $ 5.02 $ 5.03 - -------------------------------------------------------------------------------- Market Price $ 6.11 $ 5.42 $ 5.33 - -------------------------------------------------------------------------------- 12-Month Dividend $ 0.6425 $ 0.6075 $ 0.5900 - -------------------------------------------------------------------------------- Dividend at Period-End $ 0.0550 $ 0.0525 $ 0.0500 - -------------------------------------------------------------------------------- * Since inception returns for the Fund are calculated from the date of the Fund's inception on June 26, 1998. Inception returns for the Lipper High Current Yield Funds (Leveraged) median are calculated from the month-end closest to the Fund's inception: June 30, 1998. ** Past performance is no guarantee of future results. The Fund's share price and investment return will vary so that an investor's shares, when sold, may be worth more or less than their original cost. NAV and market price returns for periods of one year or less are cumulative. NAV returns assume, for illustration only, that dividends were reinvested at the net asset value on the payable dates. Returns do not reflect any commissions and are not representative of the performance of an individual investment. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions. Generally, total investment return based on net asset value will be higher than total investment return based on market price in periods where there is an increase in the discount or a decrease in the premium of the market price to the net asset value from the beginning to the end of such periods. Conversely, total investment return based on net asset value will be lower than total investment return based on market value in years where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the end of such periods. *** Lipper fund peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of the peer group. 5 MANAGED HIGH YIELD PLUS FUND INC. PORTFOLIO STATISTICS (UNAUDITED) CHARACTERISTICS 11/30/04 05/31/04 11/30/03 - ------------------------------------------------------------------------------------------------------------------ Net Assets (mm) $ 228.8 $ 214.4 $ 212.2 - ------------------------------------------------------------------------------------------------------------------ Weighted Average Maturity 6.2 yrs. 6.0 yrs. 6.3 yrs. - ------------------------------------------------------------------------------------------------------------------ Leverage** 29.0% 28.6% 28.8% - ------------------------------------------------------------------------------------------------------------------ PORTFOLIO COMPOSITION* 11/30/04 05/31/04 11/30/03 - ------------------------------------------------------------------------------------------------------------------ Corporate Bonds 96.9% 96.3% 97.0% - ------------------------------------------------------------------------------------------------------------------ Stocks (common and preferred) 2.0 1.5 2.2 - ------------------------------------------------------------------------------------------------------------------ Warrants 0.2 0.1 0.1 - ------------------------------------------------------------------------------------------------------------------ Cash Equivalents 0.9 2.1 0.7 - ------------------------------------------------------------------------------------------------------------------ TOTAL 100.0% 100.0% 100.0% - ------------------------------------------------------------------------------------------------------------------ CREDIT QUALITY* 11/30/04 05/31/04 11/30/03 - ------------------------------------------------------------------------------------------------------------------ Cash Equivalents 0.9% 2.1% 0.7% - ------------------------------------------------------------------------------------------------------------------ BB/Ba & Higher 3.1 4.3 6.3 - ------------------------------------------------------------------------------------------------------------------ B/B 64.7 68.4 66.4 - ------------------------------------------------------------------------------------------------------------------ CCC/Caa & Lower 26.9 22.1 24.3 - ------------------------------------------------------------------------------------------------------------------ Not Rated 2.2 1.6 - - ------------------------------------------------------------------------------------------------------------------ Equity/Preferred 2.2 1.5 2.3 - ------------------------------------------------------------------------------------------------------------------ TOTAL 100.0% 100.0% 100.0% - ------------------------------------------------------------------------------------------------------------------ TOP 5 HOLDINGS*** 11/30/04 05/31/04 11/30/03 - ------------------------------------------------------------------------------------------------------------------ Allied Waste North Rhodia 2.4% Giant Industries 2.5% America 2.3% - ------------------------------------------------------------------------------------------------------------------ Qwest Services 2.3 Box USA 2.0 Ainsworth Lumber 2.2 - ------------------------------------------------------------------------------------------------------------------ Collins & Aikman Products 2.0 Rhodia 2.0 Luigino's 1.9 - ------------------------------------------------------------------------------------------------------------------ Alamosa Holdings 1.7 Terra Capital 1.9 Nexstar Finance 1.9 - ------------------------------------------------------------------------------------------------------------------ Terra Capital 1.7 Nexstar Finance 1.9 Mediacom Broadband 1.8 - ------------------------------------------------------------------------------------------------------------------ TOTAL 10.1% 10.3% 10.1% - ------------------------------------------------------------------------------------------------------------------ TOP FIVE SECTORS*** 11/30/04 05/31/04 11/30/03 - ------------------------------------------------------------------------------------------------------------------ Wireless Chemicals 13.4% Gaming 12.3% Telecommunications 12.0% - ------------------------------------------------------------------------------------------------------------------ Wireless Telecommunications 12.5 Chemicals 11.7 Chemicals 11.0 - ------------------------------------------------------------------------------------------------------------------ Wireless Gaming 11.5 Telecommunications 10.0 Gaming 9.2 - ------------------------------------------------------------------------------------------------------------------ Containers & Packaging 10.2 Containers & Packaging 9.2 Publishing 8.7 - ------------------------------------------------------------------------------------------------------------------ Cable 6.3 Broadcast 6.7 Cable 7.8 - ------------------------------------------------------------------------------------------------------------------ TOTAL 53.9% 49.9% 48.7% - ------------------------------------------------------------------------------------------------------------------ * Weightings represent percentages of total portfolio assets as of the dates indicated. Credit quality ratings shown are designated by Standard & Poor's Ratings Group and Moody's Investors Services, Inc. Both are independent ratings agencies. ** As a percentage of total assets. *** Weightings represent percentages of net assets as of the dates indicated. The Fund's portfolio is actively managed and its composition will vary over time. 6 MANAGED HIGH YIELD PLUS FUND INC. PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2004 (UNAUDITED) PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------------------------------------------------------------------------------------------- CORPORATE BONDS - 134.77% - --------------------------------------------------------------------------------------------- AEROSPACE & Defense - 1.18% $ 1,500 BE Aerospace, Inc., Series B* 05/01/11 8.875% $1,575,000 - --------------------------------------------------------------------------------------------- 1,000 Sequa Corp.* 08/01/09 9.000 1,120,000 - --------------------------------------------------------------------------------------------- 2,695,000 - --------------------------------------------------------------------------------------------- AGRICULTURE - 5.17% 3,000 American Rock Salt Co. LLC 03/15/14 9.500 3,127,500 - --------------------------------------------------------------------------------------------- 1,000 IMC Global, Inc.* 08/01/13 10.875 1,260,000 - --------------------------------------------------------------------------------------------- 2,000 IMC Global, Inc., Series B* 06/01/11 11.250 2,320,000 - --------------------------------------------------------------------------------------------- 2,750 Seminis Vegetable Seeds, Inc.* 10/01/13 10.250 3,107,500 - --------------------------------------------------------------------------------------------- 2,000 Southern States Cooperative, Inc. +* 11/01/10 10.500 2,010,000 - --------------------------------------------------------------------------------------------- 11,825,000 - --------------------------------------------------------------------------------------------- AIRLINE - 1.14% 3,000 American Airlines, Inc.* 04/01/11 8.608 2,618,841 - --------------------------------------------------------------------------------------------- APPAREL/TEXTILES - 2.01% 3,125 Levi Strauss & Co.* 12/15/12 12.250 3,296,875 - --------------------------------------------------------------------------------------------- 1,250 Perry Ellis International, Inc., Series B 03/15/09 9.500 1,309,375 - --------------------------------------------------------------------------------------------- 4,606,250 - --------------------------------------------------------------------------------------------- AUTO MANUFACTURING/SUPPLIERS - 4.82% 2,000 Autocam Corp. 06/15/14 10.875 1,990,000 - --------------------------------------------------------------------------------------------- 2,500 Collins & Aikman Products Co.* 12/31/11 10.750 2,531,250 - --------------------------------------------------------------------------------------------- 2,500 Collins & Aikman Products Co. +* 08/15/12 12.875 2,150,000 - --------------------------------------------------------------------------------------------- 2,500 Delco Remy International, Inc.* 04/15/12 9.375 2,562,500 - --------------------------------------------------------------------------------------------- 1,875 Dura Operating Corp., Series D* 05/01/09 9.000 1,795,313 - --------------------------------------------------------------------------------------------- 11,029,063 - --------------------------------------------------------------------------------------------- AUTOMOTIVE PARTS - 3.40% 2,000 Advanced Accessory Systems LLC* 06/15/11 10.750 1,900,000 - --------------------------------------------------------------------------------------------- 3,000 Stanadyne Corp. +* 08/15/14 10.000 3,225,000 - --------------------------------------------------------------------------------------------- 2,500 Tenneco Automotive, Inc., Series B* 10/15/09 11.625 2,654,000 - --------------------------------------------------------------------------------------------- 7,779,000 - --------------------------------------------------------------------------------------------- BROADBAND - 0.83% 4,750 GT Group Telecom, Inc. #(b) 02/01/10 13.250(d) 475 - --------------------------------------------------------------------------------------------- 2,000 Level 3 Communications, Inc.* 03/15/08 11.000 1,820,000 - --------------------------------------------------------------------------------------------- 2,000 World Access, Inc. #(b) 01/15/08 13.250 85,000 - --------------------------------------------------------------------------------------------- 1,905,475 - --------------------------------------------------------------------------------------------- BROADCAST - 5.97% 1,750 Advanstar Communications, Inc.* 08/15/10 10.750 1,973,125 - --------------------------------------------------------------------------------------------- 3,250 Granite Broadcasting Corp.* 12/01/10 9.750 3,055,000 - --------------------------------------------------------------------------------------------- 3,600 Nexstar Finance LLC, Inc.* 04/01/08 12.000 3,897,000 - --------------------------------------------------------------------------------------------- 2,000 NextMedia Operating, Inc.* 07/01/11 10.750 2,237,500 - --------------------------------------------------------------------------------------------- 1,000 Rainbow National Services LLC +* 09/01/14 10.375 1,060,000 - --------------------------------------------------------------------------------------------- 1,358 Young Broadcasting, Inc.* 03/01/11 10.000 1,442,875 - --------------------------------------------------------------------------------------------- 13,665,500 - --------------------------------------------------------------------------------------------- 7 MANAGED HIGH YIELD PLUS FUND INC. PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2004 (UNAUDITED) PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------------------------------------------------------------------------------------------- CORPORATE BONDS - (CONTINUED) - --------------------------------------------------------------------------------------------- BUILDING MATERIALS - 4.30% $ 2,000 Atrium Cos., Inc., Series B* 05/01/09 10.500% $2,100,000 - --------------------------------------------------------------------------------------------- 2,000 Coleman Cable, Inc. +* 10/01/12 9.875 2,105,000 - --------------------------------------------------------------------------------------------- 1,250 Interface, Inc.* 02/01/10 10.375 1,437,500 - --------------------------------------------------------------------------------------------- 1,000 Interface, Inc.* 02/01/14 9.500 1,080,000 - --------------------------------------------------------------------------------------------- 1,000 Maax Corp. +* 06/15/12 9.750 1,090,000 - --------------------------------------------------------------------------------------------- 2,000 Propex Fabrics, Inc. + 12/01/12 10.000 2,030,000 - --------------------------------------------------------------------------------------------- 9,842,500 - --------------------------------------------------------------------------------------------- CABLE - 5.40% 2,250 Block Communications, Inc.* 04/15/09 9.250 2,407,500 - --------------------------------------------------------------------------------------------- 3,000 Charter Communications Holdings* 05/15/11 10.000 2,467,500 - --------------------------------------------------------------------------------------------- 3,295 Insight Midwest LP/Insight Capital, Inc.* 11/01/10 10.500 3,608,025 - --------------------------------------------------------------------------------------------- 3,650 Mediacom Broadband LLC* 07/15/13 11.000 3,859,875 - --------------------------------------------------------------------------------------------- 12,342,900 - --------------------------------------------------------------------------------------------- CHEMICALS - 13.44% 2,000 Acetex Corp.* 08/01/09 10.875 2,180,000 - --------------------------------------------------------------------------------------------- 1,500 BCP Caylux Holdings Luxembourg SCA +* 06/15/14 9.625 1,683,750 - --------------------------------------------------------------------------------------------- 3,000 Equistar Chemicals LP* 09/01/08 10.125 3,442,500 - --------------------------------------------------------------------------------------------- 2,695 Huntsman International LLC* 07/01/09 10.125 2,843,225 - --------------------------------------------------------------------------------------------- 1,080 Lyondell Chemical Co., Series B* 05/01/07 9.875 1,136,700 - --------------------------------------------------------------------------------------------- 1,000 Millennium America, Inc.* 06/15/08 9.250 1,127,500 - --------------------------------------------------------------------------------------------- 2,000 Omnova Solutions, Inc.* 06/01/10 11.250 2,250,000 - --------------------------------------------------------------------------------------------- 3,035 Resolution Performance Products LLC* 11/15/10 13.500 3,315,737 - --------------------------------------------------------------------------------------------- 2,000 Rhodia SA* 06/01/10 10.250 2,220,000 - --------------------------------------------------------------------------------------------- 3,250 Rhodia SA* 06/01/11 8.875 3,185,000 - --------------------------------------------------------------------------------------------- 3,000 Rockwood Specialties Group, Inc.* 05/15/11 10.625 3,412,500 - --------------------------------------------------------------------------------------------- 1,985 Terra Capital, Inc.* 10/15/08 12.875 2,481,250 - --------------------------------------------------------------------------------------------- 1,300 Terra Capital, Inc. 06/01/10 11.500 1,475,500 - --------------------------------------------------------------------------------------------- 30,753,662 - --------------------------------------------------------------------------------------------- COMMERCIAL SERVICES - 0.51% 1,000 Brickman Group Ltd., Series B* 12/15/09 11.750 1,155,000 - --------------------------------------------------------------------------------------------- CONSUMER PRODUCTS - 3.60% 1,000 Amscan Holdings, Inc.* 05/01/14 8.750 1,002,500 - --------------------------------------------------------------------------------------------- 2,825 Da-Lite Screen Co., Inc.* 05/15/11 9.500 3,036,875 - --------------------------------------------------------------------------------------------- 1,250 Doane Pet Care Co.* 05/15/07 9.750 1,240,625 - --------------------------------------------------------------------------------------------- 1,550 Fedders North America, Inc.* 03/01/14 9.875 1,263,250 - --------------------------------------------------------------------------------------------- 1,500 Jafra Cosmetics International, Inc.* 05/15/11 10.750 1,695,000 - --------------------------------------------------------------------------------------------- 8,238,250 - --------------------------------------------------------------------------------------------- CONTAINERS & Packaging - 10.24% 2,000 Anchor Glass Container Corp.* 02/15/13 11.000 2,140,000 - --------------------------------------------------------------------------------------------- 2,000 Berry Plastics Corp.* 07/15/12 10.750 2,290,000 - --------------------------------------------------------------------------------------------- 3,000 Constar International, Inc.* 12/01/12 11.000 3,097,500 - --------------------------------------------------------------------------------------------- 8 MANAGED HIGH YIELD PLUS FUND INC. PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2004 (UNAUDITED) PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------------------------------------------------------------------------------------------- CORPORATE BONDS - (CONTINUED) - --------------------------------------------------------------------------------------------- CONTAINERS & Packaging - (concluded) $ 3,000 Crown European Holdings SA* 03/01/13 10.875% $3,547,500 - --------------------------------------------------------------------------------------------- 2,000 Graham Packaging Co. +* 10/15/14 9.875 2,090,000 - --------------------------------------------------------------------------------------------- 2,625 Pliant Corp.* 09/01/09 11.125 2,874,375 - --------------------------------------------------------------------------------------------- 2,250 Port Townsend Paper Corp. +* 04/15/11 11.000 2,385,000 - --------------------------------------------------------------------------------------------- 2,250 Solo Cup Company* 02/15/14 8.500 2,340,000 - --------------------------------------------------------------------------------------------- 3,000 Tekni-Plex, Inc., Series B* 06/15/10 12.750 2,655,000 - --------------------------------------------------------------------------------------------- 23,419,375 - --------------------------------------------------------------------------------------------- ELECTRIC UTILITIES - 1.84% 1,500 Midwest Generation LLC* 05/01/34 8.750 1,700,625 - --------------------------------------------------------------------------------------------- 2,250 Reliant Energy, Inc.* 07/15/10 9.250 2,520,000 - --------------------------------------------------------------------------------------------- 4,220,625 - --------------------------------------------------------------------------------------------- ENERGY - 1.23% 2,250 Mission Energy Holding Co.* 07/15/08 13.500 2,820,938 - --------------------------------------------------------------------------------------------- FOOD PROCESSORS/BEVERAGE/BOTTLING - 4.31% 2,500 Land O' Lakes, Inc.* 11/15/11 8.750 2,425,000 - --------------------------------------------------------------------------------------------- 3,250 Le-Natures, Inc. +* 06/15/13 10.000 3,591,250 - --------------------------------------------------------------------------------------------- 2,750 Merisant Co. +* 07/15/13 9.500 2,475,000 - --------------------------------------------------------------------------------------------- 1,400 National Wine & Spirits, Inc.* 01/15/09 10.125 1,372,000 - --------------------------------------------------------------------------------------------- 9,863,250 - --------------------------------------------------------------------------------------------- GAMING - 11.50% 1,500 Ameristar Casinos, Inc.* 02/15/09 10.750 1,665,000 - --------------------------------------------------------------------------------------------- 2,000 Chukchansi Economic Development Authority +* 06/15/09 14.500 2,540,000 - --------------------------------------------------------------------------------------------- 2,500 Circus & Eldorado Joint Venture 03/01/12 10.125 2,737,500 - --------------------------------------------------------------------------------------------- 2,000 Inn Of The Mountain Gods Resort & Casino* 11/15/10 12.000 2,330,000 - --------------------------------------------------------------------------------------------- 3,250 Jacobs Entertainment, Inc.* 02/01/09 11.875 3,664,375 - --------------------------------------------------------------------------------------------- 1,575 MTR Gaming Group, Inc., Series B* 04/01/10 9.750 1,716,750 - --------------------------------------------------------------------------------------------- 1,590 Penn National Gaming, Inc., Series B* 03/01/08 11.125 1,699,312 - --------------------------------------------------------------------------------------------- 2,500 River Rock Entertainment Authority* 11/01/11 9.750 2,762,500 - --------------------------------------------------------------------------------------------- 2,000 Venetian Casino Resort LLC* 06/15/10 11.000 2,280,000 - --------------------------------------------------------------------------------------------- 3,000 Wheeling Island Gaming, Inc.* 12/15/09 10.125 3,217,500 - --------------------------------------------------------------------------------------------- 1,338 Wynn Las Vegas LLC 11/01/10 12.000 1,685,880 - --------------------------------------------------------------------------------------------- 26,298,817 - --------------------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & Services - 2.41% 2,000 Ameripath, Inc.* 04/01/13 10.500 2,060,000 - --------------------------------------------------------------------------------------------- 1,250 National Mentor, Inc. +* 12/01/12 9.625 1,318,750 - --------------------------------------------------------------------------------------------- 2,000 Vanguard Health Holding Co. II LLC +* 10/01/14 9.000 2,125,000 - --------------------------------------------------------------------------------------------- 5,503,750 - --------------------------------------------------------------------------------------------- INDUSTRIAL - OTHER - 2.08% 1,250 Altra Industrial Motion, Inc. + 12/01/11 9.000 1,268,750 - --------------------------------------------------------------------------------------------- 2,300 Better Minerals & Aggregates Co.* 09/15/09 13.000 1,817,000 - --------------------------------------------------------------------------------------------- 1,450 FastenTech, Inc. +* 05/01/11 11.500 1,660,250 - --------------------------------------------------------------------------------------------- 4,746,000 - --------------------------------------------------------------------------------------------- 9 MANAGED HIGH YIELD PLUS FUND INC. PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2004 (UNAUDITED) PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------------------------------------------------------------------------------------------- CORPORATE BONDS - (CONTINUED) - --------------------------------------------------------------------------------------------- LEISURE - 0.93% $ 1,000 Equinox Holdings, Inc.* 12/15/09 9.000% $1,060,000 - --------------------------------------------------------------------------------------------- 1,000 Imax Corp. 12/01/10 9.625 1,070,000 - --------------------------------------------------------------------------------------------- 2,130,000 - --------------------------------------------------------------------------------------------- LODGING - 1.10% 82 FelCor Lodging LP* 09/15/08 10.000 86,100 - --------------------------------------------------------------------------------------------- 2,250 MeriStar Hospitality Corp.* 01/15/11 9.125 2,424,375 - --------------------------------------------------------------------------------------------- 2,510,475 - --------------------------------------------------------------------------------------------- MEDICAL PRODUCTS - 2.92% 2,900 Alliance Imaging, Inc. * 04/15/11 10.375 3,233,500 - --------------------------------------------------------------------------------------------- 1,000 Medical Device Manufacturing, Inc. +* 07/15/12 10.000 1,075,000 - --------------------------------------------------------------------------------------------- 2,250 Universal Hospital Services, Inc.* 11/01/11 10.125 2,373,750 - --------------------------------------------------------------------------------------------- 6,682,250 - --------------------------------------------------------------------------------------------- METALS - 0.67% 1,500 AK Steel Corp.* 06/15/12 7.750 1,530,000 - --------------------------------------------------------------------------------------------- MISCELLANEOUS - 2.01% 2,000 Invensys PLC +* 03/15/11 9.875 2,155,000 - --------------------------------------------------------------------------------------------- 2,250 Telex Communications, Inc.* 10/15/08 11.500 2,452,500 - --------------------------------------------------------------------------------------------- 4,607,500 - --------------------------------------------------------------------------------------------- OIL & Gas - 1.84% 1,000 Parker Drilling Co.* 10/01/13 9.625 1,122,500 - --------------------------------------------------------------------------------------------- 500 Parker Drilling Co., Series B* 11/15/09 10.125 522,500 - --------------------------------------------------------------------------------------------- 2,250 Petroleum Geo-Services ASA* 11/05/10 10.000 2,565,000 - --------------------------------------------------------------------------------------------- 4,210,000 - --------------------------------------------------------------------------------------------- OIL REFINING - 2.71% 2,977 Giant Industries, Inc.* 05/15/12 11.000 3,468,205 - --------------------------------------------------------------------------------------------- 2,500 Tesoro Petroleum Corp., Series B* 11/01/08 9.625 2,737,500 - --------------------------------------------------------------------------------------------- 6,205,705 - --------------------------------------------------------------------------------------------- PAPER & Forest Products - 4.06% 2,050 Bear Island Paper Co. LLC, Series B* 12/01/07 10.000 1,947,500 - --------------------------------------------------------------------------------------------- 1,450 Buckeye Technologies, Inc.* 09/15/08 9.250 1,450,000 - --------------------------------------------------------------------------------------------- 3,500 Cellu Tissue Holdings, Inc. 03/15/10 9.750 3,640,000 - --------------------------------------------------------------------------------------------- 2,250 Tembec Industries, Inc.* 06/30/09 8.625 2,244,375 - --------------------------------------------------------------------------------------------- 9,281,875 - --------------------------------------------------------------------------------------------- PUBLISHING - 5.63% 2,250 American Color Graphics, Inc.* 06/15/10 10.000 1,935,000 - --------------------------------------------------------------------------------------------- 975 Hollinger, Inc. +* 03/01/11 12.875 1,062,750 - --------------------------------------------------------------------------------------------- 6,000 Premier Graphics, Inc. #(b) (c) 12/01/05 11.500 0 - --------------------------------------------------------------------------------------------- 2,750 Sheridan Acquisition Corp. 08/15/11 10.250 3,004,375 - --------------------------------------------------------------------------------------------- 1,500 Vertis, Inc. +* 12/07/09 13.500 1,590,000 - --------------------------------------------------------------------------------------------- 10 MANAGED HIGH YIELD PLUS FUND INC. PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2004 (UNAUDITED) PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------------------------------------------------------------------------------------------- CORPORATE BONDS - (CONTINUED) - --------------------------------------------------------------------------------------------- PUBLISHING - (CONCLUDED) $ 1,350 Vertis, Inc., Series B* 06/15/09 10.875% $1,471,500 - --------------------------------------------------------------------------------------------- 1,000 WDAC Subsidiary Corp. + 12/01/14 8.375 1,000,000 - --------------------------------------------------------------------------------------------- 3,000 WRC Media, Inc.* 11/15/09 12.750 2,823,750 - --------------------------------------------------------------------------------------------- 12,887,375 - --------------------------------------------------------------------------------------------- RESTAURANTS - 3.90% 2,950 Buffets, Inc.* 07/15/10 11.250 3,141,750 - --------------------------------------------------------------------------------------------- 2,400 El Pollo Loco, Inc.* 12/15/09 9.250 2,544,000 - --------------------------------------------------------------------------------------------- 1,735 Sbarro, Inc.* 09/15/09 11.000 1,735,000 - --------------------------------------------------------------------------------------------- 1,500 VICORP Restaurants, Inc.* 04/15/11 10.500 1,492,500 - --------------------------------------------------------------------------------------------- 8,913,250 - --------------------------------------------------------------------------------------------- RETAIL - 2.63% 2,500 Jean Coutu Group PLC +* 08/01/14 8.500 2,537,500 - --------------------------------------------------------------------------------------------- 1,250 Mothers Work, Inc.* 08/01/10 11.250 1,225,000 - --------------------------------------------------------------------------------------------- 1,935 PETCO Animal Supplies, Inc.* 11/01/11 10.750 2,263,950 - --------------------------------------------------------------------------------------------- 6,026,450 - --------------------------------------------------------------------------------------------- RETAIL (FOOD) - 0.42% 1,000 Pathmark Stores, Inc.* 02/01/12 8.750 955,000 - --------------------------------------------------------------------------------------------- SATELLITE - 0.51% 979 XM Satellite Radio, Inc.* 06/15/10 12.000 1,160,115 - --------------------------------------------------------------------------------------------- SERVICE - 0.48% 6,995 American Eco Corp., Series B #(b) 05/15/08 9.625 0 - --------------------------------------------------------------------------------------------- 1,000 Monitronics International, Inc. +* 09/01/10 11.750 1,090,000 - --------------------------------------------------------------------------------------------- 1,090,000 - --------------------------------------------------------------------------------------------- TECHNOLOGY - 4.06% 2,250 Activant Solutions, Inc.* 06/15/11 10.500 2,396,250 - --------------------------------------------------------------------------------------------- 2,000 ChipPAC International Co. Ltd., Series B* 08/01/09 12.750 2,138,400 - --------------------------------------------------------------------------------------------- 2,250 IPC Acquisition Corp.* 12/15/09 11.500 2,463,750 - --------------------------------------------------------------------------------------------- 2,000 Sanmina-SCI Corp.* 01/15/10 10.375 2,300,000 - --------------------------------------------------------------------------------------------- 9,298,400 - --------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 4.05% 2,000 American Cellular Corp., Series B* 08/01/11 10.000 1,690,000 - --------------------------------------------------------------------------------------------- 2,250 Cincinnati Bell, Inc.* 01/15/14 8.375 2,244,375 - --------------------------------------------------------------------------------------------- 4,500 Qwest Services Corp. +* 12/15/10 13.500 5,332,500 - --------------------------------------------------------------------------------------------- 9,266,875 - --------------------------------------------------------------------------------------------- UTILITY - ELECTRICITY, GAS & Other - 0.71% 2,275 Calpine Canada Energy Finance ULC* 05/01/08 8.500 1,626,625 - --------------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATIONS - 10.76% 2,608 Alamosa Delaware, Inc.* 07/31/10 11.000 3,044,840 - --------------------------------------------------------------------------------------------- 1,344 Centennial Cellular Operating Co. LLC* 12/15/08 10.750 1,397,760 - --------------------------------------------------------------------------------------------- 1,000 Centennial Communications Corp.* 06/15/13 10.125 1,090,000 - --------------------------------------------------------------------------------------------- 1,175 Crown Castle International Corp.* 08/01/11 9.375 1,316,000 - --------------------------------------------------------------------------------------------- 1,600 Crown Castle International Corp.* 08/01/11 10.750 1,744,000 - --------------------------------------------------------------------------------------------- 11 MANAGED HIGH YIELD PLUS FUND INC. PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2004 (UNAUDITED) PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------------------------------------------------------------------------------------------- CORPORATE BONDS - (CONCLUDED) - --------------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATIONS - (CONCLUDED) $ 1,250 Dobson Cellular Systems, Inc. + 11/01/12 9.875% $ 1,225,000 - --------------------------------------------------------------------------------------------- 3,000 Dobson Communications Corp.* 07/01/10 10.875 2,265,000 - --------------------------------------------------------------------------------------------- 2,000 Horizon PCS, Inc. + 07/15/12 11.375 2,165,000 - --------------------------------------------------------------------------------------------- 684 Nextel Partners, Inc.* 11/15/09 12.500 778,050 - --------------------------------------------------------------------------------------------- 2,500 PTC International Finance II SA* 12/01/09 11.250 2,650,000 - --------------------------------------------------------------------------------------------- 2,500 Triton PCS, Inc. 02/01/11 9.375 1,981,250 - --------------------------------------------------------------------------------------------- 1,500 Ubiquitel Operating Co. +* 03/01/11 9.875 1,646,250 - --------------------------------------------------------------------------------------------- 3,000 US Unwired, Inc., Series B* 06/15/12 10.000 3,307,500 - --------------------------------------------------------------------------------------------- 24,610,650 - --------------------------------------------------------------------------------------------- Total Corporate Bonds (cost-$308,538,835) 308,321,741 - --------------------------------------------------------------------------------------------- NUMBER OF SHARES - ---------------------------------------------------------------------------------------------------- COMMON STOCKS (a) - 1.02% - ---------------------------------------------------------------------------------------------------- CLEC (COMPETITIVE LOCAL EXCHANGE CARRIER) - 0.00% 3,100 XO Communications, Inc.* 8,463 - ---------------------------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES - 0.01% 172,051 RCN Corp.* 12,044 - ---------------------------------------------------------------------------------------------------- 48,600 Viatel, Inc. #(c) 0 - ---------------------------------------------------------------------------------------------------- 12,044 - ---------------------------------------------------------------------------------------------------- ENERGY - 0.00% 1,253 Orion Refining Corp. #(c) 0 - ---------------------------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES - 0.55% 47,490 Metal Management, Inc.* 1,248,037 - ---------------------------------------------------------------------------------------------------- MISCELLANEOUS - 0.00% 3 Dark Dynamite, Inc. 0 - ---------------------------------------------------------------------------------------------------- RESTAURANTS - 0.00% 129 American Restaurant Group, Inc. #(c) 0 - ---------------------------------------------------------------------------------------------------- SERVICE - 0.00% 98,094 PNV, Inc. # 30 - ---------------------------------------------------------------------------------------------------- SPECIALTY RETAIL - 0.00% 44,600 Samuels Jewelers, Inc. #(c) 401 - ---------------------------------------------------------------------------------------------------- TRANSPORTATION SERVICES - 0.46% 56,020 Laidlaw International, Inc. 1,058,778 - ---------------------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES - 0.00% 178 SpectraSite, Inc.* 10,317 - ---------------------------------------------------------------------------------------------------- Total Common Stocks (cost-$12,534,212) 2,338,070 - ---------------------------------------------------------------------------------------------------- 12 MANAGED HIGH YIELD PLUS FUND INC. PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2004 (UNAUDITED) NUMBER OF SHARES VALUE - ---------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 1.76% - ---------------------------------------------------------------------------------------------------- CABLE - 0.02% 20,000 Adelphia Communications Corp., Series B (a) $ 40,000 - ---------------------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATIONS - 1.74% 4,750 Alamosa Holdings, Inc., Series B 3,975,750 - ---------------------------------------------------------------------------------------------------- Total Preferred Stocks (cost-$3,515,000) 4,015,750 - ---------------------------------------------------------------------------------------------------- NUMBER OF WARRANTS - -------------------------------------------------------------------------------------------------------------------------------- WARRANTS (A) - 0.22% - -------------------------------------------------------------------------------------------------------------------------------- AUTOMOTIVE PARTS - 0.00% 3,945 Hayes Lemmerz International, Inc., strike @ $25.83, expires 06/03/06 2,170 - -------------------------------------------------------------------------------------------------------------------------------- BROADBAND - 0.00% 4,750 GT Group Telecom, Inc., strike @ $0, expires 02/01/10 #(c)(1) 0 - -------------------------------------------------------------------------------------------------------------------------------- 4,950 Pathnet, Inc., strike @ $0.01, expires 04/15/08 (c)(1) 0 - -------------------------------------------------------------------------------------------------------------------------------- 0 - -------------------------------------------------------------------------------------------------------------------------------- BUILDING PRODUCTS - 0.00% 2,500 Dayton Superior Corp., strike @ $0.01, expires 06/15/09 #(1) 25 - -------------------------------------------------------------------------------------------------------------------------------- CLEC (COMPETITIVE LOCAL EXCHANGE CARRIER) - 0.00% 3,000 Knology Holdings, Inc., strike @ $0.10, expires 10/22/07 (c)(1) 0 - -------------------------------------------------------------------------------------------------------------------------------- 4,651 XO Communications, Inc., strike @ $10, expires 01/16/10 1,116 - -------------------------------------------------------------------------------------------------------------------------------- 6,201 XO Communications, Inc., strike @ $6.25, expires 01/16/10 3,101 - -------------------------------------------------------------------------------------------------------------------------------- 4,651 XO Communications, Inc., strike @ $7.50, expires 01/16/10 1,814 - -------------------------------------------------------------------------------------------------------------------------------- 6,031 - -------------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES - 0.00% 750 Arcadia Financial Ltd., strike @ $11, expires 03/15/07 #(c) 7 - -------------------------------------------------------------------------------------------------------------------------------- OIL EQUIPMENT - 0.22% 4,500 Key Energy Services, Inc., strike @ $4.88, expires 01/15/09 504,562 - -------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 0.00% 6,500 Inter Act Electronic Marketing, Inc., strike @ $0.01, expires 12/15/09 #(c) 0 - -------------------------------------------------------------------------------------------------------------------------------- Total Warrants (cost-$341,065) 512,795 - -------------------------------------------------------------------------------------------------------------------------------- 13 MANAGED HIGH YIELD PLUS FUND INC. PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2004 (UNAUDITED) PRINCIPAL AMOUNT (000) - ------------------------------------------------------------------------------------------------------ REPURCHASE AGREEMENT - 1.28% - ------------------------------------------------------------------------------------------------------ $ 2,932 Repurchase Agreement dated 11/30/04 with State Street Bank & Trust Co., collateralized by $2,892,677 U.S. Treasury Bills, zero coupon due 04/14/05 and $76,959 U.S. Treasury Bonds, 11.250% due 02/15/15; (value-$2,990,839); proceeds: $2,932,150 (cost-$2,932,000) 12/01/04 1.840% $ 2,932,000 - ------------------------------------------------------------------------------------------------------ Total Investments (cost-$327,861,112)-139.05% 318,120,356 - ------------------------------------------------------------------------------------------------------ Liabilities in excess of other assets-(39.05)% (89,336,889) - ------------------------------------------------------------------------------------------------------ Net Assets-100.00% $228,783,467 - ------------------------------------------------------------------------------------------------------ * Entire amount pledged as collateral for bank loan. # Illiquid securities representing 0.04% of net assets. + Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities, which represent 24.34% of net assets as of November 30, 2004, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers. (a) Non-income producing securities. (b) Bond interest in default. (c) Security is being fair valued by a valuation committee under the direction of the Board of Directors. (d) Denotes a step-up bond or zero coupon bond that converts to the noted fixed rate at a designated future date. (1) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities, which represent 0.00% of net assets as of November 30, 2004, are considered illiquid and restricted. (See table below for more information.) ACQUISITION COST MARKET VALUE AS A AS A ACQUISITION ACQUISITION PERCENTAGE OF MARKET PERCENTAGE OF RESTRICTED SECURITIES DATE(S) COST NET ASSETS VALUE NET ASSETS - ------------------------------------------------------------------------------------------------------------------- Dayton Superior Corp., warrants, expiring 06/15/09 06/09/00 $ 46,550 0.02% $25 0.00% - ------------------------------------------------------------------------------------------------------------------- GT Group Telecom, Inc., warrants, expiring 02/01/10 01/27/00 246,405 0.11 0 0.00 - ------------------------------------------------------------------------------------------------------------------- Knology Holdings, Inc., warrants, expiring 10/22/07 06/08/98, 04/26/00 5,000 0.00 0 0.00 - ------------------------------------------------------------------------------------------------------------------- Pathnet, Inc., warrants, expiring 06/30/98, 07/16/98, 04/15/08 11/25/98 10 0.00 0 0.00 - ------------------------------------------------------------------------------------------------------------------- $297,965 0.13% $25 0.00% - ------------------------------------------------------------------------------------------------------------------- See accompanying notes to financial statements 14 MANAGED HIGH YIELD PLUS FUND INC. STATEMENT OF ASSETS AND LIABILITIES - NOVEMBER 30, 2004 (UNAUDITED) ASSETS: Investment in securities, at value (cost-$327,861,112) $318,120,356 - -------------------------------------------------------------------------------- Receivable for investments sold 264,667 - -------------------------------------------------------------------------------- Interest receivable 8,585,857 - -------------------------------------------------------------------------------- Other assets 5,688 - -------------------------------------------------------------------------------- TOTAL ASSETS 326,976,568 - -------------------------------------------------------------------------------- LIABILITIES: Bank loan payable 94,750,000 - -------------------------------------------------------------------------------- Payable for investments purchased 3,000,000 - -------------------------------------------------------------------------------- Payable for interest on bank loan 187,269 - -------------------------------------------------------------------------------- Payable to investment manager and administrator 179,594 - -------------------------------------------------------------------------------- Payable to custodian 5,546 - -------------------------------------------------------------------------------- Accrued expenses and other liabilities 70,692 - -------------------------------------------------------------------------------- TOTAL LIABILITIES 98,193,101 - -------------------------------------------------------------------------------- NET ASSETS: Capital stock - $0.001 par value; 200,000,000 shares authorized; 43,020,674 shares issued and outstanding 592,246,503 - -------------------------------------------------------------------------------- Accumulated undistributed net investment income 1,523,857 - -------------------------------------------------------------------------------- Accumulated net realized loss from investment activities (355,246,137) - -------------------------------------------------------------------------------- Net unrealized depreciation of investments (9,740,756) - -------------------------------------------------------------------------------- NET ASSETS $228,783,467 - -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE $ 5.32 - -------------------------------------------------------------------------------- See accompanying notes to financial statements 15 MANAGED HIGH YIELD PLUS FUND INC. STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED NOVEMBER 30, 2004 (UNAUDITED) - ----------------------------------------------------------------------------------------- Investment income: Interest $ 15,892,633 - ----------------------------------------------------------------------------------------- Dividends 44,779 - ----------------------------------------------------------------------------------------- 15,937,412 - ----------------------------------------------------------------------------------------- Expenses: Investment management and administration fees 1,088,849 - ----------------------------------------------------------------------------------------- Interest expense, loan commitment and other fees 935,784 - ----------------------------------------------------------------------------------------- Custody and accounting 66,451 - ----------------------------------------------------------------------------------------- Reports and notices to shareholders 54,706 - ----------------------------------------------------------------------------------------- Professional fees 44,583 - ----------------------------------------------------------------------------------------- Transfer agency fees 7,890 - ----------------------------------------------------------------------------------------- Directors' fees 6,623 - ----------------------------------------------------------------------------------------- Other expenses 33,101 - ----------------------------------------------------------------------------------------- 2,237,987 - ----------------------------------------------------------------------------------------- Net investment income 13,699,425 - ----------------------------------------------------------------------------------------- Realized and unrealized gains (losses) from investment activities: Net realized loss from investment activities (16,199,188) - ----------------------------------------------------------------------------------------- Net change in unrealized appreciation/depreciation of investments 29,073,296 - ----------------------------------------------------------------------------------------- Net realized and unrealized gain from investment activities 12,874,108 - ----------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $ 26,573,533 - ----------------------------------------------------------------------------------------- See accompanying notes to financial statements 16 MANAGED HIGH YIELD PLUS FUND INC. STATEMENT OF CHANGES IN NET ASSETS FOR THE SIX MONTHS ENDED FOR THE YEAR NOVEMBER 30, 2004 ENDED (UNAUDITED) MAY 31,2004 - ---------------------------------------------------------------------------------------------- FROM OPERATIONS: Net investment income $ 13,699,425 $ 27,468,669 - ---------------------------------------------------------------------------------------------- Net realized losses from investment activities (16,199,188) (13,697,026) - ---------------------------------------------------------------------------------------------- Net change in unrealized appreciation/depreciation of investments 29,073,296 22,961,236 - ---------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 26,573,533 36,732,879 - ---------------------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS FROM: Net investment income (14,036,353) (25,645,510) - ---------------------------------------------------------------------------------------------- CAPITAL STOCK TRANSACTIONS: Proceeds from shares issued for dividends reinvested 1,821,554 5,108,272 - ---------------------------------------------------------------------------------------------- Net increase in net assets 14,358,734 16,195,641 - ---------------------------------------------------------------------------------------------- NET ASSETS: Beginning of period 214,424,733 198,229,092 - ---------------------------------------------------------------------------------------------- End of period $228,783,467 $214,424,733 - ---------------------------------------------------------------------------------------------- Accumulated undistributed net income income $ 1,523,857 $ 1,860,785 - ---------------------------------------------------------------------------------------------- See accompanying notes to financial statements 17 MANAGED HIGH YIELD PLUS FUND INC. STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED NOVEMBER 30, 2004 (UNAUDITED) - -------------------------------------------------------------------------------- CASH FLOWS PROVIDED FROM (USED FOR) OPERATING ACTIVITIES: Interest and dividends received $ 15,619,394 - -------------------------------------------------------------------------------- Operating expenses paid (1,307,200) - -------------------------------------------------------------------------------- Interest paid (851,511) - -------------------------------------------------------------------------------- Sale of short-term portfolio investments, net 3,405,000 - -------------------------------------------------------------------------------- Purchase of long-term portfolio investments (69,610,794) - -------------------------------------------------------------------------------- Sale of long-term portfolio investments 58,096,078 - -------------------------------------------------------------------------------- Net cash provided from operating activities 5,350,967 - -------------------------------------------------------------------------------- CASH FLOWS PROVIDED FROM (USED FOR) FINANCING ACTIVITIES: Dividends paid to shareholders (12,214,799) - -------------------------------------------------------------------------------- Increase in bank loan 6,500,000 - -------------------------------------------------------------------------------- Net cash used for financing activities (5,714,799) - -------------------------------------------------------------------------------- Net decrease in cash (363,832) - -------------------------------------------------------------------------------- Cash at beginning of period 363,832 - -------------------------------------------------------------------------------- Cash at end of period - - -------------------------------------------------------------------------------- RECONCILIATION OF NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS TO NET CASH PROVIDED FROM OPERATING ACTIVITIES: Net increase in net assets resulting from operations $ 26,573,533 - -------------------------------------------------------------------------------- Increase in investments, at value (18,665,542) - -------------------------------------------------------------------------------- Increase in receivable for investments sold (264,667) - -------------------------------------------------------------------------------- Increase in interest receivable (125,232) - -------------------------------------------------------------------------------- Decrease in other assets 35,228 - -------------------------------------------------------------------------------- Decrease in payable for investments purchased (2,246,401) - -------------------------------------------------------------------------------- Increase in payable to investment advisor and administrator 1,329 - -------------------------------------------------------------------------------- Increase in payable for interest on bank loan 72,656 - -------------------------------------------------------------------------------- Increase in payable to custodian 5,546 - -------------------------------------------------------------------------------- Decrease in accrued expenses and other liabilities (35,483) - -------------------------------------------------------------------------------- Net cash provided from operating activities $ 5,350,967 - -------------------------------------------------------------------------------- See accompanying notes to financial statements 18 MANAGED HIGH YIELD PLUS FUND INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Managed High Yield Plus Fund Inc. (the "Fund") was incorporated in Maryland on April 24, 1998, and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended ("1940 Act"), as a closed-end diversified management investment company. The Fund's primary investment objective is to seek high income. Its secondary objective is to seek capital appreciation. In the normal course of business the Fund may enter into contracts that contain a variety of representations or that provide indemnification for certain liabilities. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires the Fund's 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 significant accounting policies: VALUATION OF INVESTMENTS-The Fund calculates its net asset value based on the current market value, where available, for its portfolio securities. The Fund normally obtains market values for its securities from independent pricing sources and broker-dealers. Independent pricing sources may use reported last sale prices, current market quotations or valuations from computerized "matrix" systems that derive values based on comparable securities. A matrix system incorporates parameters such as security quality, maturity and coupon, and/or research and evaluations by its staff, including review of broker-dealer market price quotations, if available, in determining the valuation of the portfolio securities. Securities traded in the over-the-counter ("OTC") market and listed on The Nasdaq Stock Market, Inc. ("Nasdaq") normally are valued at the NASDAQ Official Closing Price. Other OTC securities are valued at the last bid price available on the valuation date prior to valuation. Securities which are listed on U.S. and foreign stock exchanges normally are valued at the last sale price on the day the securities are valued or, lacking any sales on such day, at the last available bid price. In cases where securities are traded on more than one exchange, the securities are valued on the exchange designated as the primary market by UBS Global Asset Management (US) Inc. ("UBS Global AM"), the investment manager and administrator of the Fund. UBS Global AM is an indirect wholly owned asset management subsidiary of UBS AG, an internationally diversified organization with headquarters in Zurich, Switzerland and operations in many areas of the financial services industry. If a market value is not available from an 19 MANAGED HIGH YIELD PLUS FUND INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) independent pricing source for a particular security, that security is valued at fair value as determined in good faith by or under the direction of the Fund's Board of Directors (the "Board"). The amortized cost method of valuation, which approximates market value, generally is used to value short-term debt instruments with sixty days or less remaining to maturity, unless the Board determines that this does not represent fair value. All investments quoted in foreign currencies will be valued daily in U.S. dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined by the Fund's custodian. REPURCHASE AGREEMENTS-The Fund may purchase securities or other obligations from a bank or securities dealer (or its affiliate), subject to the seller's agreement to repurchase them at an agreed upon date (or upon demand) and price. The Fund maintains custody of the underlying obligations prior to their repurchase, either through its regular custodian or through a special "tri-party" custodian or sub-custodian that maintains a separate account for both the Fund and its counterparty. The underlying collateral is valued daily on a mark-to-market basis to ensure that the value, including accrued interest, is at least equal to the repurchase price. In the event of default of the obligation to repurchase, the Fund generally has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Repurchase agreements involving obligations other than U.S. government securities (such as commercial paper, corporate bonds and mortgage loans) may be subject to special risks and may not have the benefit of certain protections in the event of counterparty insolvency. If the seller (or seller's guarantor, if any) becomes insolvent, the Fund may suffer delays, costs and possible losses in connection with the disposition or retention of the collateral. Under certain circumstances, in the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. The Fund may participate in joint repurchase agreement transactions with other funds managed, advised or sub-advised by UBS Global AM. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME-Investment transactions are recorded on the trade date. Realized gains and losses from investment transactions are calculated using the identified cost method. Interest income is recorded on an accrual basis. Dividend income is recorded on the ex-dividend date ("ex-date"). Discounts are accreted and premiums are amortized as adjustments to interest income and the identified cost of investments. DIVIDENDS AND DISTRIBUTIONS-Dividends and distributions to shareholders are recorded on the ex-date. The amount of dividends and distributions is determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences 20 MANAGED HIGH YIELD PLUS FUND INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. CONCENTRATION OF RISK The ability of the issuers of the debt securities held by the Fund to meet their obligations may be affected by economic developments, including those particular to a specific industry, country or region. In addition, the Fund's use of leverage creates greater volatility in the Fund's net asset value and market price of its shares. INVESTMENT MANAGER AND ADMINISTRATOR The Board has approved an investment management and administration contract ("Management Contract") under which UBS Global AM serves as investment manager and administrator of the Fund. In accordance with the Management Contract, the Fund pays UBS Global AM an investment management and administration fee, which is accrued weekly and paid monthly, at the annual rate of 0.70% of the Fund's average weekly total assets minus liabilities other than the aggregate indebtedness constituting leverage. BORROWINGS The Fund has a $150 million committed credit facility (the "Facility"). Under the terms of the Facility, the Fund borrows at the London Interbank Offered Rate ("LIBOR") plus facility and administrative fees. In addition, the Fund pays a liquidity fee on the entire amount of the Facility. The Fund may borrow up to 33 1/3% of its total assets up to the committed amount. In accordance with the terms of the Facility, the Fund has pledged assets in the amount of $287,458,748 on November 30, 2004 as collateral for the bank loan. For the six months ended November 30, 2004, the Fund borrowed a daily average balance of $90,198,087 at a weighted average borrowing cost of approximately 2.04%. PURCHASES AND SALES OF SECURITIES For the six months ended November 30, 2004, aggregate purchases and sales of portfolio securities, excluding short-term securities, were $67,364,393 and $58,352,836, respectively. FEDERAL TAX STATUS The Fund intends to distribute substantially all of its income and to comply with the other requirements of the Internal Revenue Code applicable to regulated investment companies. Accordingly, no provision for federal income taxes is required. In addition, 21 MANAGED HIGH YIELD PLUS FUND INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) by distributing during each calendar year substantially all of its net investment income, realized capital gains and certain other amounts, if any, the Fund intends not to be subject to federal excise tax. The tax character of distributions paid during the fiscal year ended May 31, 2004, was ordinary income as follows: DISTRIBUTIONS PAID FROM: - -------------------------------------------------------------------------------- Ordinary Income $25,645,510 - -------------------------------------------------------------------------------- The tax character of distributions paid and the components of accumulated earnings (deficit) on a tax basis for the current fiscal year will be calculated after the Fund's fiscal year ending May 31, 2005. At May 31, 2004, the Fund had a net capital loss carryforward of $330,437,470. This loss carryforward is available as a reduction, to the extent provided in the regulations, of future net realized capital gains, and will expire as follows: $1,037,133 in 2005; $13,100,516 in 2007; $50,099,935 in 2008; $71,221,921 in 2009; $71,854,329 in 2010; $95,911,016 in 2011; and $27,212,620 in 2012. The capital loss carryforward includes $16,536,037 of capital losses from the acquisition of Managed High Yield Fund Inc. on June 2, 2000. These losses may be subject to annual limitations pursuant to section 382(b)(1) of the Internal Revenue Code. To the extent that such losses are used to offset future net realized capital gains, it is probable these gains will not be distributed. During the year ended May 31, 2004, $531,918 of capital loss carryforwards expired unutilized. Also, in accordance with U.S. Treasury regulations, the Fund has elected to defer $8,356,021 of net realized capital losses arising after October 31, 2003. Such losses are treated for tax purposes as arising on June 1, 2004. For federal income tax purposes, which is substantially the same for book purposes, the tax cost of investments and the components of net unrealized depreciation of investments at November 30, 2004 were as follows: Tax cost of investments $327,861,112 - -------------------------------------------------------------------------------- Gross unrealized appreciation $25,639,677 - -------------------------------------------------------------------------------- Gross unrealized depreciation (35,380,433) - -------------------------------------------------------------------------------- Net unrealized depreciation $(9,740,756) - -------------------------------------------------------------------------------- 22 MANAGED HIGH YIELD PLUS FUND INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CAPITAL STOCK There are 200,000,000 shares of $0.001 par value capital stock authorized and 43,020,674 shares outstanding at November 30, 2004. Transactions in shares of common stock were as follows: SHARES AMOUNT - -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED NOVEMBER 30, 2004: Shares issued through Dividend Reinvestment Plan 333,713 $1,821,554 - -------------------------------------------------------------------------------- FOR THE YEAR ENDED MAY 31, 2004: Shares issued through Dividend Reinvestment Plan 997,893 $5,108,272 - -------------------------------------------------------------------------------- SUBSEQUENT EVENT On November 10, 2004, the Fund announced that its Board authorized the filing of a preliminary registration statement for a "three-for-one" non-transferable rights offering to the Fund's shareholders. The rights offering would only commence upon the SEC's determination to make the Fund's registration statement effective. The final terms of the offer would depend on market conditions at the time the rights offering commences. The offer would be made only by means of a prospectus. The commencement of the offer would be announced through the public media and the definitive terms of the offer, including the subscription price, would be included in the prospectus. 23 MANAGED HIGH YIELD PLUS FUND INC. FINANCIAL HIGHLIGHTS Selected data for a share of common stock outstanding throughout each period is presented below: FOR THE SIX MONTHS ENDED NOVEMBER 30, FOR THE YEARS ENDED MAY 31, 2004 ----------------------------------------------------------------- (UNAUDITED) 2004 2003 2002 2001 2000 - ------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 5.02 $ 4.75 $ 4.98 $ 6.99 $ 9.73 $ 12.35 - ------------------------------------------------------------------------------------------------------------------- Net investment income 0.32 0.65 0.66 0.96 1.07 1.48 - ------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gains (losses) from investment activities 0.31 0.23 (0.23) ( 1.99) (2.58) ( 2.60) - ------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from operations 0.63 0.88 0.43 ( 1.03) (1.51) ( 1.12) - ------------------------------------------------------------------------------------------------------------------- Dividends from net investment income (0.33) (0.61) (0.66) ( 0.98) (1.23) ( 1.50) - ------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 5.32 $ 5.02 $ 4.75 $ 4.98 $ 6.99 $ 9.73 - ------------------------------------------------------------------------------------------------------------------- MARKET VALUE, END OF PERIOD $ 6.11 $ 5.42 $ 5.04 $ 5.64 $ 7.65 $ 9.44 - ------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT RETURN(1) 19.59% 20.92% 3.85% (13.22)% (5.55)% (12.14)% - ------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $228,783 $214,425 $198,229 $200,844 $270,823 $310,015 - ------------------------------------------------------------------------------------------------------------------- Expenses to average net assets, including interest expense 2.02%* 1.82% 2.20% 2.58% 3.11% 3.59% - ------------------------------------------------------------------------------------------------------------------- Expenses to average net assets, excluding interest expense 1.18%* 1.16% 1.23% 1.18% 1.07% 1.17% - ------------------------------------------------------------------------------------------------------------------- Net investment income to average net assets 12.37%* 12.92% 15.03% 17.22% 13.00% 12.74% - ------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 19% 53% 37% 40% 54% 66% - ------------------------------------------------------------------------------------------------------------------- Asset coverage++ $ 3,415 $ 3,430 $ 3,550 $ 3,131 $ 3,736 $ 3,844 - ------------------------------------------------------------------------------------------------------------------- ++ Per $1,000 of bank loans outstanding. * Annualized. (1) Total investment return is calculated assuming a $10,000 purchase of common stock at the market price on the first day of each period reported and a sale at the market price on the last day of each period reported, and assuming reinvestment of dividends at prices obtained under the Fund's Dividend Reinvestment Plan. Total investment return does not reflect brokerage commissions and has not been annualized for a period of less than one year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions. 24 MANAGED HIGH YIELD PLUS FUND INC. GENERAL INFORMATION (UNAUDITED) THE FUND Managed High Yield Plus Fund Inc. (the "Fund") is a diversified, closed-end management investment company whose shares trade on the New York Stock Exchange ("NYSE"). The Fund's primary investment objective is to seek high income. Its secondary objective is to seek capital appreciation. The Fund's investment manager and administrator is UBS Global Asset Management (US) Inc. ("UBS Global AM"), an indirect wholly-owned asset management subsidiary of UBS AG, which had over $49.5 billion in assets under management as of September 30, 2004. PROXY VOTING POLICIES AND PROCEDURES You may obtain a description of the Fund's proxy voting policies, procedures and voting records, without charge, upon request by contacting the Fund directly at 1-800-647-1568, online on the Fund's Web site www.ubs.com/ubsglobalam-proxy, or on the EDGAR Database on the SEC's Web site (http://www.sec.gov). QUARTERLY FORM N-Q PORTFOLIO SCHEDULE The Fund will file its complete schedule of portfolio holdings with the Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at http://www.sec.gov. The Fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. Additionally, you may obtain copies of Forms N-Q from the Fund upon request by calling 1-800-647-1568. SHAREHOLDER INFORMATION The Fund's NYSE trading symbol is "HYF." Comparative net asset value and market price information about the Fund is published weekly in The Wall Street Journal, The New York Times and Barron's, as well as in numerous other publications. An annual meeting of shareholders of the Fund was held on September 16, 2004. At the meeting, Margo N. Alexander, Richard Q. Armstrong, David J. Beaubien, Richard R. Burt, Meyer Feldberg, Carl W. Schafer and William D. White were elected to serve as directors until the next annual meeting of shareholders or until his or her successor is elected and qualified or until he or she resigns or is otherwise removed. The shares were voted as indicated below: 25 MANAGED HIGH YIELD PLUS FUND INC. GENERAL INFORMATION (UNAUDITED) SHARES SHARES VOTED WITHHOLD TO VOTE FOR OR AGAINST THE ELECTION OF: FOR AUTHORITY - -------------------------------------------------------------------------------- Margo N. Alexander 40,255,488.932 676,780.663 - -------------------------------------------------------------------------------- Richard Q. Armstrong 40,233,288.932 698,980.663 - -------------------------------------------------------------------------------- David J. Beaubien 40,235,026.932 697,242.663 - -------------------------------------------------------------------------------- Richard R. Burt 40,208,807.932 723,461.663 - -------------------------------------------------------------------------------- Meyer Feldberg 40,222,894.932 709,374.663 - -------------------------------------------------------------------------------- Carl W. Schafer 40,229,964.932 702,304.663 - -------------------------------------------------------------------------------- William D. White 40,239,385.932 692,883.663 - -------------------------------------------------------------------------------- The Fund is unaware of any broker non-votes. (Broker non-votes are shares held in street name for which the broker indicates that instructions have not been received from the beneficial owners or other persons entitled to vote and for which the broker does not have discretionary voting authority.) DIVIDEND REINVESTMENT PLAN The Fund's Board has established a Dividend Reinvestment Plan (the "Plan") under which all shareholders whose shares are registered in their own names, or in the name of UBS Financial Services Inc., or its nominee, will have all dividends and other distributions on their shares automatically reinvested in additional shares, unless such shareholders elect to receive cash. Shareholders who elect to hold their shares in the name of another broker or nominee should contact such broker or nominee to determine whether, or how, they may participate in the Plan. The ability of such shareholders to participate in the Plan may change if their shares are transferred into the name of another broker or nominee. A shareholder may elect not to participate in the Plan or may terminate participation in the Plan at any time without penalty, and shareholders who have previously terminated participation in the Plan may rejoin it at any time. Changes in elections must be made in writing to the Fund's transfer agent and should include the shareholder's name and address as they appear on that share certificate or in the transfer agent's records. An election to terminate participation in the Plan, until such election is changed, will be deemed an election by a shareholder to take all subsequent distributions in cash. An election will be effective only for distributions declared and having a record date at least ten days after the date on which the election is received. The transfer agent will serve as agent for the shareholders in administering the Plan. After the Fund declares a dividend or determines to make any other distribution, the transfer agent, as agent for the participants, receives the cash payment. Whenever the Fund declares an income dividend or a capital gain distribution (collectively 26 MANAGED HIGH YIELD PLUS FUND INC. GENERAL INFORMATION (UNAUDITED) referred to in this section as "dividends") payable either in shares or in cash, non-participants in the Plan will receive cash and participants in the Plan will receive the equivalent in shares. The transfer agent will acquire shares for the participants' accounts, depending upon the circumstances described below, either (i) through receipt of unissued but authorized shares from the Fund ("newly issued shares") or (ii) by purchase of outstanding shares on the open market, on the NYSE or elsewhere ("open-market purchases"). If, on the dividend payment date, the net asset value per share is equal to or less than the market price per share, plus estimated brokerage commissions (such condition being referred to herein as "market premium"), the transfer agent will invest the dividend amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant's account will be determined by dividing the dollar amount of the dividend by the net asset value per share (but in no event less than 95% of the then current market price per share) on the date the shares were issued. If, on the dividend payment date, the net asset value per share is greater than the market value per share, plus estimated brokerage commissions (such condition being referred to herein as "market discount"), the transfer agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases. The number of outstanding shares purchased with each distribution for a particular shareholder equals the result obtained by dividing the amount of the distribution payable to that shareholder by the average price per share (including applicable brokerage commissions) that the transfer agent was able to obtain in the open market. In the event of a market discount on the dividend payment date, the transfer agent will have until the last business day before the next date on which the shares trade on an "ex-dividend" basis, but in no event more than 30 days after the dividend payment date (the "last purchase date"), to invest the dividend amount in shares acquired in open-market purchases. It is contemplated that the Fund will pay monthly income dividends. Therefore, the period during which open-market purchases can be made will exist only from the payment date of the dividend through the date before the next "ex-dividend" date, which typically will be approximately ten business days. If, before the transfer agent has completed its open-market purchases, the market price of a share, plus estimated brokerage commissions, exceeds the net asset value per share, the average per share purchase price paid by the transfer agent may exceed the Fund's net asset value per share, resulting in the acquisition of fewer shares than if the dividend had been paid in newly issued shares on the dividend payment date. Because of the foregoing difficulty with respect to open-market purchases, the Plan provides that, if the transfer agent is unable to invest the full dividend amount in open-market purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the transfer agent will cease making open-market purchases and will invest 27 MANAGED HIGH YIELD PLUS FUND INC. GENERAL INFORMATION (UNAUDITED) the uninvested portion of the dividend amount in newly issued shares at the close of business on the earlier of the last purchase date or the first day during the purchase period on which the net asset value per share equals or is less than the market price per share, plus estimated brokerage commissions. The transfer agent will maintain all shareholder accounts in the Plan and will furnish written confirmations of all transactions in the accounts, including information needed by shareholders for personal and tax records. Shares in the account of each Plan participant will be held by the transfer agent in non-certificated form in the name of the participant, and each shareholder's proxy will include those shares purchased pursuant to the Plan. There will be no charge to participants for reinvesting dividends. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the transfer agent's open market purchases of shares in connection with the reinvestment of dividends. The automatic reinvestment of dividends in shares does not relieve participants of any income tax that may be payable on such dividends. Shareholders who participate in the Plan may receive benefits not available to shareholders who do not participate in the Plan. If the market price (plus commissions) of the shares is above their net asset value, participants in the Plan will receive shares at less than they could otherwise purchase them and will have shares with a cash value greater than the value of any cash dividends they would have received on their shares. If the market price plus commissions is below the net asset value, participants will receive dividends in shares with a net asset value greater than the value of any cash dividends they would have received on their shares. However, there may be insufficient shares available in the market to distribute dividends in shares at prices below the net asset value. Also, since the Fund does not redeem its shares, the price on resale may be more or less than the net asset value. Experience under the Plan may indicate that changes are desirable. Accordingly, the Fund reserves the right to amend or terminate the Plan with respect to any dividend or other distribution if notice of the change is sent to Plan participants at least 30 days before the record date for such distribution. The Plan also may be amended or terminated by the transfer agent by at least 30 days written notice to all Plan participants. Additional information regarding the Plan may be obtained from, and all correspondence concerning the Plan should be directed to, the transfer agent at PFPC Inc., P.O. Box 8030, Boston, Massachusetts 02266-8030. For further information regarding the Plan, you may also contact the transfer agent directly at 1-800-331-1710. 28 (This page has been left blank intentionally) (This page has been left blank intentionally) DIRECTORS Richard Q. Armstrong Meyer Feldberg Chairman Carl W. Schafer Margo N. Alexander William D. White David J. Beaubien Richard R. Burt PRINCIPAL OFFICERS Joseph A. Varnas Thomas Disbrow President Vice President and Treasurer Mark F. Kemper Marianne Rossi Vice President and Secretary Vice President W. Douglas Beck Vice President INVESTMENT MANAGER AND ADMINISTRATOR UBS Global Asset Management (US) Inc. 51 West 52nd Street New York, New York 10019-6114 This report is sent to the shareholders of the Fund for their information. It is not a prospectus, circular or representation intended for the use in the purchase or sale of shares of the Fund or of any securities mentioned in this report. The financial information included herein is taken from the records of the Fund without examination by independent auditors who do not express an opinion thereon. Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that from time to time the Fund may purchase shares of its common stock in the open market at market prices. (C) 2005 UBS Global Asset Management (US) Inc. All rights reserved. [UBS LOGO] ------------- Presorted UBS Global Asset Management (US) Inc. Standard 51 West 52nd Street US Postage New York, NY 10019 PAID Smithtown, NY Permit 700 ------------- ITEM 2. CODE OF ETHICS. Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. ITEM 6. SCHEDULE OF INVESTMENTS. Included as part of the report to shareholders filed under Item 1 of this form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Form N-CSR disclosure requirement not yet effective with respect to the registrant. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. There were no purchases made by or on behalf of the registrant or any "affiliated purchaser," as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended, of shares of the registrant's equity securities made in the period covered by this report. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The registrant's Board has established a Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will consider nominees recommended by shareholders if a vacancy occurs among those board members who are not "interested persons" as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended. In order to recommend a nominee, a shareholder should send a letter to the chairperson of the Nominating and Corporate Governance Committee, Professor Meyer Feldberg, care of the Secretary of the registrant at UBS Global Asset Management (US) Inc., 51 West 52nd Street, New York, New York 10019-6114, and indicate on the envelope "Nominating and Corporate Governance Committee." The shareholder's letter should state the nominee's name and should include the nominee's resume or curriculum vitae, and must be accompanied by a written consent of the individual to stand for election if nominated for the Board and to serve if elected by shareholders. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document. (b) The registrant's principal executive officer and principal financial officer are aware of no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Code of Ethics - Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report. (a) (2) Certifications of principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit EX-99.CERT. (a) (3) Written solicitation to purchase securities under Rule 23c-1 under the Investment Company Act of 1940 sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons - not applicable to the registrant. (b) Certifications of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit EX-99.906CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Managed High Yield Plus Fund Inc. By: /s/ Joseph A. Varnas --------------------- Joseph A. Varnas President Date: January 25, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Joseph A. Varnas --------------------- Joseph A. Varnas President Date: January 25, 2005 By: /s/ Thomas Disbrow Thomas Disbrow Treasurer Date: January 25, 2005
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N-CSRS Filing
Managed High Yield Plus Fund (HYF) Inactive N-CSRSCertified semi-annual shareholder report (management investment company)
Filed: 25 Jan 05, 12:00am