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: 811-572
American Mutual Fund, Inc.
(Exact Name of Registrant as specified in charter)
333 South Hope Street
Los Angeles, California 90071
(Address of principal executive offices)
Registrant's telephone number, including area code: (213) 486-9200
Date of fiscal year end: October 31, 2003
Date of reporting period: April 30, 2003
Julie F. Williams
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071
(name and address of agent for service)
Copies to:
Eric A.S. Richards, Esq.
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071
(Counsel for the Registrant)
ITEM 1 - Reports to Stockholders
[logo - American Funds(R)]
The right choice for the long term(R)
AMERICAN MUTUAL FUND
[Large tree near curved unpaved road]
Semi-annual report for the six months ended April 30, 2003
American Mutual Fund(R) strives for the balanced accomplishment of three
objectives -- current income, growth of capital and conservation of principal --
through investments in companies that participate in the growth of the American
economy.
This fund is one of the 29 American Funds, the nation's third-largest mutual
fund family. For more than seven decades, Capital Research and Management
Company,SM the American Funds adviser, has invested with a long-term focus based
on thorough research and attention to risk.
Fund results in this report were calculated for Class A shares at net asset
value (without a sales charge) unless otherwise indicated. Here are returns on a
$1,000 investment with all distributions reinvested for periods ended March 31,
2003 (the most recent calendar quarter):
1 year 5 years 10 years
CLASS A SHARES
Reflecting 5.75% maximum sales charge
Average annual compound return -- -0.55% +8.25%
Total return -23.07% -2.71% +121.02%
The fund's 30-day yield for Class A shares as of May 31, 2003, reflecting the
5.75% maximum sales charge and calculated in accordance with the Securities and
Exchange Commission formula, was 1.91%.
Results for other share classes can be found on page 4. For the most current
investment results, please refer to americanfunds.com. Please see the back cover
for important information about other share classes.
FIGURES SHOWN ARE PAST RESULTS AND ARE NOT PREDICTIVE OF FUTURE RESULTS. SHARE
PRICE AND RETURN WILL VARY, SO YOU MAY LOSE MONEY. INVESTING FOR SHORT PERIODS
MAKES LOSSES MORE LIKELY. INVESTMENTS ARE NOT FDIC-INSURED, NOR ARE THEY
DEPOSITS OF OR GUARANTEED BY A BANK OR ANY OTHER ENTITY.
[Large tree near curved unpaved road]
FELLOW SHAREHOLDERS:
American Mutual Fund's fiscal 2003 is off to a promising start. For the six
months ended April 30, the fund posted a total return of 5.4%. This was about
one percentage point better than the 4.5% return of its benchmark, the unmanaged
Standard & Poor's 500 Composite Index. In the six-month period, the income
return was 1.3%, compared with the S&P's 0.9%. Investors received quarterly
income dividends totaling 26 cents per share and 31 cents per share in capital
gain dividends. For the past 12 months, AMF's total return was -11.5%. While
such a loss is regrettable, it was a bit less than the S&P 500's return of
- -13.3%.
THE SIX MONTHS IN REVIEW
The six-month period began with the United States threatening to go to war with
Iraq, and ended with the collapse of the Iraqi government. Fears of terrorism
rose, oil prices surged and the economy sputtered.
Thankfully, the war ended relatively quickly, removing some of the political and
economic uncertainty that had been clouding the stock market. Although the
economic recovery is slow, we see reasons for optimism. Consumer spending --
two-thirds of economic activity in the U.S. -- has generally held up, thanks to
low interest rates and a wave of mortgage refinancing. Congress has approved,
and President Bush has signed, a tax cut law that should pump billions of
dollars into the economy. The series of corporate scandals that dominated the
headlines a year ago has subsided and there are tough new regulations on
corporate accountability in place. Furthermore, corporate profits are once again
on the rise after their severe decline. Rising quite sharply from its March low,
the stock market has already responded favorably to many of these developments.
PORTFOLIO REVIEW
The new tax law also lowers taxes on most dividends. This may favor the
established, dividend-paying companies that we invest in; in fact, to be
eligible for American Mutual Fund's portfolio in the first place, every company
must pay a dividend. Even without any change in the way they are taxed, however,
we think dividends are regaining the luster that vanished during the heady days
of the bull market. Dividends generally reflect a company's stability, fiscal
discipline and ability to generate a steady stream of cash for its shareholders
- -- very important things indeed.
In terms of asset allocation, 81% of the fund's portfolio is concentrated in
stocks, virtually unchanged from six months ago. As you can tell from the pie
chart on page 5, our largest holdings are traditional industries such as oil and
gas, pharmaceuticals, and banks. We think the companies we own within these
industries can grow their revenues and profits going forward. They also have
broad exposure to the U.S. economy and thus stand to benefit from its recovery
- -- though the strength of that recovery is uncertain. The remaining 19% of the
fund's assets are held in intermediate-term bonds and cash.
THREE OBJECTIVES
Since its inception more than 53 years ago, American Mutual Fund has sought the
balanced accomplishment of three objectives: current income, growth of capital
and conservation of principal. This philosophy has helped the fund hold up well
during the last three, difficult years. But as we have noted in the past, this
philosophy can also cause it to lag during very strong, speculative stock market
environments.
Thank you for your continued support. We will report to you again in six months.
Cordially,
/s/ James K. Dunton
James K. Dunton
Chairman of the Board
/s/Robert G. O'Donnell
Robert G. O'Donnell
President
June 16, 2003
OTHER SHARE CLASS RESULTS unaudited
CLASS B, CLASS C, CLASS F AND CLASS 529
Returns for periods ended March 31, 2003 (the most recent calendar quarter):
1 year Life of class
CLASS B SHARES
Reflecting applicable contingent deferred sales charge (CDSC), maximum of 5%,
payable only if shares are sold within six years of purchase
Average annual compound return -- +0.51%(1)
Total return -22.95% +1.57%(1)
Not reflecting CDSC
Average annual compound return -- +1.37%(1)
Total return -19.03% +4.23%(1)
CLASS C SHARES
Reflecting CDSC, maximum of 1%, payable only if shares are sold
within one year of purchase
Average annual compound return -- -5.51%(2)
Total return -19.87% -10.94%(2)
Not reflecting CDSC
Average annual compound return -- -5.51%(2)
Total return -19.09% -10.94%(2)
CLASS F SHARES(3)
Not reflecting annual asset-based fee charged by sponsoring firm
Average annual compound return -- -4.83%(2)
Total return -18.48% -9.62%(2)
CLASS 529-A SHARES
Reflecting 5.75% maximum sales charge
Average annual compound return -- -16.23%(4)
Total return -23.11% -17.84%(4)
Not reflecting maximum sales charge
Average annual compound return -- -11.65%(4)
Total return -18.43% -12.84%(4)
CLASS 529-B SHARES
Reflecting applicable CDSC, maximum of 5%, payable only if shares are sold
within six years of purchase
Average annual compound return -- -15.50%(4)
Total return -23.11% -17.04%(4)
Not reflecting CDSC
Average annual compound return -- -12.45%(4)
Total return -19.19% -13.71%(4)
CLASS 529-C SHARES
Reflecting CDSC, maximum of 1%, payable only if shares are sold
within one year of purchase
Average annual compound return -- -13.23%(5)
Total return -19.96% -14.54%(5)
Not reflecting CDSC
Average annual compound return -- -13.23%(5)
Total return -19.18% -14.54%(5)
CLASS 529-E SHARES(3)
Average annual compound return -- -17.76%(6)
Total return -18.73% -18.81%(6)
CLASS 529-F SHARES(3)
Total return -- -2.52%(7)
(1)From March 15, 2000, when Class B shares were first sold.
(2)From March 15, 2001, when Class C and Class F shares were first sold.
(3)These shares are sold without any initial or contingent deferred sales
charge.
(4)From February 19, 2002, when Class 529-A and Class 529-B shares were first
sold.
(5)From February 20, 2002, when Class 529-C shares were first sold.
(6)From March 7, 2002, when Class 529-E shares were first sold.
(7)From September 17, 2002, when Class 529-F shares were first sold.
INVESTMENT PORTFOLIO, April 30, 2003
unaudited
Percent of
Net Assets
INDUSTRY DIVERSIFICATION
[begin pie chart]
Oil & gas 7.17%
Pharmaceuticals 6.23
Banks 6.17
Diversified telecommunication services 5.43
Electric utilities 5.20
Other industries 59.23
Cash & equivalents 10.57
[end pie chart]
Percent
of net
LARGEST EQUITY HOLDINGS assets
J.P. Morgan Chase 3.17%
IBM 2.87
General Electric 2.00
General Motors 1.69
Norfolk Southern 1.62
Eli Lilly 1.59
Pfizer 1.34
Sprint - FON Group 1.34
Bristol-Myers Squibb 1.32
Duke Energy 1.31
Market
value
Equity securities (common and convertible preferred stocks) Shares (000)
ENERGY
ENERGY EQUIPMENT & SERVICES - 0.33%
Schlumberger Ltd. 700,000 $ 29,351
OIL & GAS - 7.17%
Ashland Inc. 1,400,000 41,510
ChevronTexaco Corp. 1,669,950 104,890
ConocoPhillips 1,966,589 98,919
Devon Energy Corp. 2,000,000 94,500
Exxon Mobil Corp. 1,050,000 36,960
Kerr-McGee Corp. 1,115,000 46,953
Marathon Oil Corp. 3,950,000 89,942
Sunoco, Inc. 1,300,000 48,373
Unocal Corp. 2,580,400 71,477
662,875
MATERIALS
CHEMICALS - 1.34%
Air Products and Chemicals, Inc. 600,000 25,842
Dow Chemical Co. 1,600,000 52,224
Praxair, Inc. 700,000 40,656
CONTAINERS & PACKAGING - 0.37%
Sonoco Products Co. 1,500,000 32,775
PAPER & FOREST PRODUCTS - 2.00%
Georgia-Pacific Corp., Georgia-Pacific Group 1,900,000 29,336
International Paper Co. 1,000,000 35,750
MeadWestvaco Corp. 4,729,000 111,557
328,140
CAPITAL GOODS
AEROSPACE & DEFENSE - 1.93%
Boeing Co. 200,000 5,456
Honeywell International Inc. 2,350,000 55,460
Lockheed Martin Corp. 174,100 8,714
Northrop Grumman Corp. 400,000 35,180
Raytheon Co. 1,150,000 34,419
United Technologies Corp. 500,000 30,905
CONSTRUCTION & ENGINEERING - 0.53%
Fluor Corp. 1,350,000 46,669
ELECTRICAL EQUIPMENT - 0.29%
Emerson Electric Co. 500,000 25,350
INDUSTRIAL CONGLOMERATES - 2.46%
General Electric Co. 6,000,000 176,700
Tyco International Ltd. 2,600,000 40,560
MACHINERY - 0.52%
Caterpillar Inc. 868,700 45,694
505,107
COMMERCIAL SERVICES & SUPPLIES
COMMERCIAL SERVICES & SUPPLIES - 1.58%
Automatic Data Processing, Inc. 800,000 26,904
Pitney Bowes Inc. 1,900,000 66,709
ServiceMaster Co. 5,100,000 46,155
139,768
TRANSPORTATION
ROAD & RAIL - 2.35%
Burlington Northern Santa Fe Corp. 1,200,000 33,792
CSX Corp. 500,000 15,990
Norfolk Southern Corp. 6,731,600 142,777
Union Pacific Corp. 250,000 14,880
207,439
AUTOMOBILES & COMPONENTS
AUTO COMPONENTS - 0.17%
Dana Corp. 700,000 6,503
Goodyear Tire & Rubber Co. 1,500,000 8,580
AUTOMOBILES - 1.69%
General Motors Corp. 4,140,000 149,247
164,330
CONSUMER DURABLES & APPAREL
HOUSEHOLD DURABLES - 0.33%
Leggett & Platt, Inc. 1,400,000 28,910
TEXTILES, APPAREL & LUXURY GOODS - 0.94%
NIKE, Inc., Class B 700,000 37,471
VF Corp. 1,150,000 45,241
111,622
HOTELS, RESTAURANTS & LEISURE
HOTELS, RESTAURANTS & LEISURE - 0.68%
McDonald's Corp. 3,500,000 59,850
MEDIA
MEDIA - 0.69%
Dow Jones & Co., Inc. 250,000 9,900
Interpublic Group of Companies, Inc. 1,675,000 19,095
Knight-Ridder, Inc. 500,000 32,275
61,270
RETAILING
DISTRIBUTORS - 0.77%
Genuine Parts Co. 2,125,000 67,936
MULTILINE RETAIL - 1.92%
J.C. Penney Co., Inc. 1,900,000 32,414
May Department Stores Co. 2,800,000 60,536
Target Corp. 2,300,000 76,912
SPECIALTY RETAIL - 1.48%
Gap, Inc. 1,200,000 19,956
Lowe's Companies, Inc. 810,000 35,551
TJX Companies, Inc. 3,900,000 75,075
368,380
FOOD & DRUG RETAILING
FOOD & DRUG RETAILING - 0.84%
Albertson's, Inc. 2,977,200 59,127
Walgreen Co. 500,000 15,430
74,557
FOOD & BEVERAGE
BEVERAGES - 0.41%
Coca-Cola Co. 900,000 36,360
FOOD PRODUCTS - 1.92%
ConAgra Foods, Inc. 1,800,000 37,800
General Mills, Inc. 1,130,000 50,974
H.J. Heinz Co. 2,700,000 80,676
205,810
HOUSEHOLD & PERSONAL PRODUCTS
HOUSEHOLD PRODUCTS - 0.62%
Kimberly-Clark Corp. 1,110,000 55,245
PERSONAL PRODUCTS - 0.69%
Avon Products, Inc. 1,042,500 60,642
115,887
HEALTH CARE EQUIPMENT & SERVICES
HEALTH CARE EQUIPMENT & SUPPLIES - 0.71%
Applera Corp. - Applied Biosystems Group 1,176,700 20,628
Becton, Dickinson and Co. 1,200,000 42,480
HEALTH CARE PROVIDERS & SERVICES - 0.94%
Aetna Inc. 745,000 37,101
CIGNA Corp. 875,000 45,762
145,971
PHARMACEUTICALS & BIOTECHNOLOGY
PHARMACEUTICALS - 6.23%
Abbott Laboratories 600,000 24,378
Bristol-Myers Squibb Co. 4,557,200 116,391
Eli Lilly and Co. 2,205,000 140,723
Johnson & Johnson 1,225,000 69,041
Merck & Co., Inc. 750,000 43,635
Pfizer Inc (acquired Pharmacia Corp.) 3,878,100 119,252
Schering-Plough Corp. 2,047,400 37,058
550,478
BANKS
BANKS - 6.17%
Bank of America Corp. 850,000 62,942
Bank of New York Co., Inc. 1,300,000 34,385
BANK ONE CORP. 1,200,000 43,260
Comerica Inc. 900,000 39,159
FleetBoston Financial Corp. 4,230,000 112,180
HSBC Holdings PLC (ADR) (formerly Household International, Inc.1,337,500 73,148
National City Corp. 1,450,000 43,442
SunTrust Banks, Inc. 200,000 11,444
Wachovia Corp. 813,600 31,088
Washington Mutual, Inc. 1,075,000 42,462
Wells Fargo & Co. 1,068,750 51,578
545,088
DIVERSIFIED FINANCIALS
DIVERSIFIED FINANCIALS - 4.43%
American Express Co. 850,000 32,181
Citigroup Inc. 455,441 17,876
Fannie Mae 850,000 61,531
J.P. Morgan Chase & Co. 9,530,000 279,706
391,294
INSURANCE
INSURANCE - 4.46%
Allstate Corp. 2,450,000 92,586
American International Group, Inc. 1,710,600 99,129
Aon Corp. 1,950,000 43,212
Chubb Corp. 750,000 39,668
Chubb Corp. 7.00% convertible preferred 2005 313,600 units 7,558
Jefferson-Pilot Corp. 1,700,000 68,153
Lincoln National Corp. 1,367,900 43,718
394,024
REAL ESTATE
REAL ESTATE - 0.79%
Equity Office Properties Trust 1,100,000 28,567
Equity Residential 1,600,000 41,456
70,023
SOFTWARE & SERVICES
IT CONSULTING & SERVICES - 0.82%
Electronic Data Systems Corp. 2,860,000 51,909
Electronic Data Systems Corp. 7.625% FELINE PRIDES 2004 1,030,000 units 20,394
SOFTWARE - 0.26%
Microsoft Corp. 900,000 23,013
95,316
TECHNOLOGY HARDWARE & EQUIPMENT
COMMUNICATIONS EQUIPMENT - 0.28%
Harris Corp. 600,000 17,136
Motorola, Inc. 1,000,000 7,910
COMPUTERS & PERIPHERALS - 3.83%
Hewlett-Packard Co. 5,200,000 84,760
International Business Machines Corp. 2,990,000 253,851
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 1.20%
Intel Corp. 2,300,000 42,320
Linear Technology Corp. 1,000,000 34,470
Texas Instruments Inc. 1,600,000 29,584
470,031
TELECOMMUNICATION SERVICES
DIVERSIFIED TELECOMMUNICATION SERVICES - 4.88%
ALLTEL Corp. 1,909,600 89,484
ALLTEL Corp. 7.75% 2005 300,000 units 14,490
AT&T Corp. 6,184,600 105,447
SBC Communications Inc. 1,150,000 26,864
Sprint Corp. - FON Group, Series 1 10,300,000 118,553
Verizon Communications Inc. 2,050,000 76,629
431,467
UTILITIES
ELECTRIC UTILITIES - 5.08%
Ameren Corp. 300,000 12,294
Ameren Corp. 9.75% ACES convertible preferred 2005 1,200,000 units 32,832
American Electric Power Co., Inc. 3,338,100 88,059
Dominion Resources, Inc. 650,000 38,467
Exelon Corp. 1,200,000 63,648
Progress Energy, Inc. 600,000 25,068
Southern Co. 2,200,000 63,998
TECO Energy, Inc. 1,600,000 17,264
TXU Corp. 1,100,000 21,912
Xcel Energy Inc. 6,295,000 85,108
MULTI-UTILITIES & UNREGULATED POWER - 1.83%
Duke Energy Corp. 6,600,000 116,094
Questar Corp. 1,500,000 45,300
610,044
MISCELLANEOUS
Miscellaneous - 4.75%
Other equity securities in initial period of acquisition 419,305
Total equity securities (cost: $7,110,049,000) 7,128,076
Principal Market
amount value
Bonds and notes (000) (000)
DIVERSIFIED FINANCIALS - 0.31%
Household Finance Corp. 5.75% 2007 $ 25,000 $ 27,189
TECHNOLOGY HARDWARE & EQUIPMENT - 0.30%
Motorola, Inc. 6.75% 2006 25,000 27,000
TELECOMMUNICATION SERVICES - 0.55%
AT&T Corp. 7.00% 2006 (1) 45,000 48,301
UTILITIES - 0.12%
Virginia Electric and Power Co., Series 2002-A, 5.375% 2007 9,960 10,721
AGENCY PASS-THROUGH SECURITIES - 0.24%
Fannie Mae 6.00% 2017 (2) 20,518 21,550
U.S. TREASURY NOTES & BONDS - 1.42%
3.875% January 2009 (3) 111,618 125,220
U.S. AGENCY SECURITIES, NON PASS-THROUGH - 5.81%
Fannie Mae:
4.75% 2004 300,000 309,279
6.00% 2005 160,000 176,589
5.00% 2007 25,000 27,181
513,049
Total bonds and notes (cost: $728,898,000) 773,030
Principal Market
amount value
Short-term securities (000) (000)
Corporate short-term notes - 5.20%
3M Co. 1.225% due 5/22/2003 $ 37,200 $ 37,172
Bank of America Corp. 1.24%-1.25% due 5/7-5/20/2003 45,000 44,978
Citicorp 1.23%-1.255% due 6/16/2003 50,000 49,919
Coca-Cola Co. 1.23%-1.25% due 5/2-5/19/2003 70,000 69,984
E.I. du Pont de Nemours & Co. 1.18%-1.205% due 5/8-7/22/2003 50,000 49,922
General Electric Capital Corp. 1.22%-1.23% due 6/3/2003 30,000 29,965
Kraft Foods Inc. 1.22%-1.25% due 5/15-6/5/2003 (4) 36,900 36,855
Merck & Co., Inc. 1.20%-1.21% due 5/21-6/25/2003 50,000 49,937
Pfizer Inc 1.21%-1.22% due 5/16-6/10/2003 (5) 50,000 49,953
Wells Fargo & Co. 1.23%-1.24% due 6/6-6/10/2003 41,000 40,947
Federal agency discount notes - 4.41%
Fannie Mae 1.11%-1.23% due 5/14-7/30/2003 145,885 145,692
Federal Home Loan Bank 1.125%-1.23% due 5/9-7/7/2003 101,200 101,068
Freddie Mac 1.16%-1.23% due 5/8-7/17/2003 143,165 142,933
U.S. Treasuries - 0.40%
U.S. Treasury Bills 1.14% due 5/1/2003 35,200 35,199
Total short-term securities (cost: $884,542,000) 884,524
Total investment securities (cost: $8,723,489,000) 8,785,630
Other assets less liabilities 49,722
Net assets $8,835,352
(1) Coupon rate may change periodically.
(2) Pass-through security backed by a pool of
mortgages or other loans on which principal payments are
periodically made. Therefore, the effective maturity
is shorter than the stated maturity.
(3) Index-linked bond whose principal amount moves with a government
retail price index.
(4) Valued under fair value procedures adopted by authority of the Board of
Directors.
(5) Restricted security that can be resold only to institutional investors.
In practice, this security is as liquid as unrestricted securities
in the portfolio.
ADR = American Depositary Receipts
See Notes to Financial Statements
Equity securities appearing in the portfolio since October 31, 2002
Automatic Data Processing
Chubb
Comerica
Devon Energy
Dow Chemical
Fluor
Microsoft
Questar
Sunoco
Target
Tyco International
Equity securities eliminated from the portfolio since October 31, 2002
Circuit City
Royal Dutch Petroleum
Stanley Works
FINANCIAL STATEMENTS
Statement of assets and liabilities unaudited
at April 30, 2003
(dollars and shares in thousands, except per-share amounts)
Assets:
Investment securities at market (cost: $8,723,489) $8,785,630
Cash 88
Receivables for:
Sales of investments $55,255
Sales of fund's shares 20,303
Dividends and interest 26,812 102,370
8,888,088
Liabilities:
Payables for:
Purchases of investments 40,461
Repurchases of fund's shares 6,078
Investment advisory services 2,087
Services provided by affiliates 3,179
Deferred Directors' compensation 916
Other fees and expenses 15 52,736
Net assets at April 30, 2003 $8,835,352
Net assets consist of:
Capital paid in on shares of capital stock $8,781,115
Undistributed net investment income 31,725
Accumulated net realized loss (39,629)
Net unrealized appreciation 62,141
Net assets at April 30, 2003 $8,835,352
Total authorized capital stock - 750,000 shares, $0.001 par value
Net assets Shares outstanding Net asset value per share(1)
Class A $8,256,624 398,716 $20.71
Class B 212,514 10,314 20.60
Class C 154,213 7,494 20.58
Class F 85,102 4,116 20.67
Class 529-A 32,340 1,563 20.70
Class 529-B 8,709 422 20.65
Class 529-C 9,937 481 20.65
Class 529-E 1,857 90 20.66
Class 529-F 248 12 20.71
Class R-1 500 24 20.66
Class R-2 14,043 681 20.62
Class R-3 13,351 646 20.66
Class R-4 2,250 109 20.69
Class R-5 43,664 2,108 20.71
(1) Maximum offering price and redemption price per share were
equal to the net asset value per share for all share classes, except for
classes A and 529-A, for which the maximum offering prices per share
were $21.97 and $21.96, respectively.
See Notes to Financial Statements
Statement of operations unaudited
for the six months ended April 30, 2003 (dollars in thousands)
Investment income:
Income:
Dividends (net of non-U.S. withholding tax of $37) $106,788
Interest 24,098 $130,886
Fees and expenses:
Investment advisory services 12,037
Distribution services 10,626
Transfer agent services 3,503
Administrative services 298
Reports to shareholders 176
Registration statement and prospectus 248
Postage, stationery and supplies 496
Directors' compensation 114
Auditing and legal 66
Custodian 67
State and local taxes 90
Other 57
Total expenses before reimbursement 27,778
Reimbursement of expenses 24 27,754
Net investment income 103,132
Net realized loss and unrealized
appreciation on investments:
Net realized loss on investments (15,035)
Net unrealized appreciation on investments 354,640
Net realized loss and unrealized appreciation
on investments 339,605
Net increase in net assets resulting from operations $442,737
See Notes to Financial Statements
Statement of changes in net assets (dollars in thousands)
Six months Year ended
ended April 30, October 31,
2003* 2002
Operations:
Net investment income $103,132 $191,688
Net realized (loss) gain on investments (15,035) 141,613
Net unrealized appreciation (depreciation) on investments 354,640 (1,129,159)
Net increase (decrease) in net assets
resulting from operations 442,737 (795,858)
Dividends and distributions paid to
shareholders:
Dividends from net investment income (106,022) (219,240)
Distributions from net realized gain
on investments (126,094) (238,166)
Total dividends and distributions paid
to shareholders (232,116) (457,406)
Capital share transactions 449,436 931,720
Total increase (decrease) in net assets 660,057 (321,544)
Net assets:
Beginning of period 8,175,295 8,496,839
End of period (including undistributed
net investment income: $31,725 and $34,615,
respectively) $8,835,352 $8,175,295
*Unaudited
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS unaudited
1. Organization and significant accounting policies
Organization - American Mutual Fund, Inc. (the "fund") is registered under the
Investment Company Act of 1940 as an open-end, diversified management investment
company. The fund strives for the balanced accomplishment of three objectives -
current income, growth of capital and conservation of principal - through
investments in companies that participate in the growth of the American economy.
The fund offers 14 share classes consisting of four retail share classes, five
CollegeAmerica savings plan share classes and five retirement plan share
classes. The CollegeAmerica savings plan share classes (529-A, 529-B, 529-C,
529-E and 529-F) are sponsored by the Commonwealth of Virginia and can be
utilized to save for college education. The five retirement plan share classes
(R-1, R-2, R-3, R-4 and R-5) are sold without any sales charges and do not carry
any conversion rights. The fund's share classes are described below:
- ---------------------------------------------------------------------------------------------------------
Share class Initial sales charge Contingent deferred sales Conversion feature
charge upon redemption
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Classes A and 529-A Up to 5.75% None (except 1% for None
certain redemptions
within one year of
purchase without an
initial sales charge)
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Classes B and 529-B None Declines from 5% to zero Classes B and 529-B
to zero for redemptions convert to classes A
within six years of and 529-A, respectively,
purchase after eight years
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Class C None 1% for redemptions within Class C converts to
one year of purchase Class F after 10 years
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Class 529-C None 1% for redemptions within None
one year of purchase
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Class 529-E None None None
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Classes F and 529-F None None None
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Classes R-1, R-2, R-3, None None None
R-4 and R-5
- ---------------------------------------------------------------------------------------------------------
Holders of all share classes have equal pro rata rights to assets, dividends and
liquidation. Each share class has identical voting rights, except for the
exclusive right to vote on matters affecting only its class. Share classes have
different fees and expenses ("class-specific fees and expenses"), primarily due
to different arrangements for distribution, administrative and shareholder
services. Differences in class-specific fees and expenses will result in
differences in net investment income and, therefore, the payment of different
per-share dividends by each class.
Significant accounting policies - The financial statements have been prepared to
comply with accounting principles generally accepted in the United States of
America. These principles require management to make estimates and assumptions
that affect reported amounts and disclosures. Actual results could differ from
those estimates. The following is a summary of the significant accounting
policies followed by the fund:
Security valuation - Equity securities are valued at the official
closing price of, or the last reported sale price on, the exchange or
market on which such securities are traded, as of the close of business
or, lacking any sales, at the last available bid price. Prices for each
security are taken from the principal exchange or market in which the
security trades. Fixed-income securities are valued at prices obtained
from a pricing service. However, where the investment adviser deems it
appropriate, they will be valued at the mean quoted bid and asked
prices or at prices for securities of comparable maturity, quality and
type. Short-term securities maturing within 60 days are valued at
amortized cost, which approximates market value. The ability of the
issuers of the debt securities held by the fund to meet their
obligations may be affected by economic developments in a specific
industry, state or region. Securities and other assets for which
representative market quotations are not readily available are valued
at fair value as determined in good faith by authority of the fund's
Board of Directors.
Security transactions and related investment income - Security
transactions are recorded by the fund as of the date the trades are
executed with brokers. Realized gains and losses from security
transactions are determined based on the specific identified cost of
the securities. Dividend income is recognized on the ex-dividend date
and interest income is recognized on an accrual basis. Market
discounts, premiums and original issue discounts on fixed-income
securities are amortized daily over the expected life of the security.
Class allocations - Income, fees and expenses (other than
class-specific fees and expenses) and realized and unrealized gains and
losses are allocated daily among the various share classes based on
their relative net assets. Class-specific fees and expenses, such as
distribution, administrative and shareholder services, are charged
directly to the respective share class.
Dividends and distributions to shareholders - Dividends and
distributions paid to shareholders are recorded on the ex-dividend
date.
Taxation - Dividend income is recorded net of non-U.S. taxes paid.
2. Federal income taxation and distributions
The fund complies with the requirements under Subchapter M of the Internal
Revenue Code applicable to mutual funds and intends to distribute substantially
all of its net taxable income and net capital gains each year. The fund is not
subject to income taxes to the extent such distributions are made.
Distributions - Distributions paid to shareholders are based on net investment
income and net realized gains determined on a tax basis, which may differ from
net investment income and net realized gains for financial reporting purposes.
These differences are due primarily to differing treatment for items such as
short-term capital gains and losses; capital losses related to sales of
securities within 30 days of purchase; expenses deferred for tax purposes; and
cost of investments sold. The fiscal year in which amounts are distributed may
differ from the year in which the net investment income and net realized gains
are recorded by the fund. As of April 30, 2003, the cost of investment
securities for federal income tax purposes was $8,733,532,000.
As of April 30, 2003, the components of distributable earnings on a tax basis
were as follows:
(dollars in thousands)
Undistributed net investment income $32,641
Accumulated short-term capital losses
(52,056)
Undistributed long-term capital gains 23,226
Gross unrealized appreciation on investment securities
981,523
Gross unrealized depreciation on investment securities (929,425)
The tax character of distributions paid to shareholders was as follows (dollars
in thousands):
Distributions from ordinary income Distributions from Total
Net Short-term long-term distributions
Share class(1) investment income capital gains capital gains paid
Six months ended April 30, 2003
Class A $ 101,303 - $ 119,662 $ 220,965
Class B 1,603 - 2,525 4,128
Class C 1,092 - 1,735 2,827
Class F 833 - 914 1,747
Class 529-A 323 - 329 652
Class 529-B 54 - 84 138
Class 529-C 63 - 96 159
Class 529-E 14 - 14 28
Class 529-F 1 - 1 2
Class R-1 3 - 3 6
Class R-2 68 - 52 120
Class R-3 71 - 43 114
Class R-4 15 - 4 19
Class R-5 579 - 632 1,211
Total $ 106,022 - $ 126,094 $ 232,116
Year ended October 31, 2002
Class A $ 214,554 - $ 234,944 $ 449,498
Class B 2,023 - 1,867 3,890
Class C 1,216 - 949 2,165
Class F 786 - 406 1,192
Class 529-A 190 - - 190
Class 529-B 33 - - 33
Class 529-C 40 - - 40
Class 529-E 6 - - 6
Class 529-F -* - - -*
Class R-1 -* - - -*
Class R-2 6 - - 6
Class R-3 6 - - 6
Class R-4 -* - - -*
Class R-5 380 - - 380
Total $ 219,240 - $ 238,166 $ 457,406
* Amount less than one thousand.
(1) Class 529-A, 529-B, 529-C, 529-E and 529-F shares were offered
beginning February 15, 2002. Class R-1, R-2, R-3, R-4 and R-5 shares were offered
beginning May 15, 2002.
3. Fees and transactions with related parties
Capital Research and Management Company ("CRMC"), the fund's investment adviser,
is the parent company of American Funds Service Company ("AFS"), the fund's
transfer agent, and American Funds Distributors, Inc. ("AFD"), the principal
underwriter of the fund's shares.
Investment advisory services - The Investment Advisory and Service Agreement
with CRMC provides for monthly fees accrued daily. These fees are based on a
declining series of annual rates beginning with 0.384% on the first $1 billion
of month-end net assets and decreasing to 0.240% on such assets in excess of $8
billion. For the six months ended April 30, 2003, the investment advisory
services fee was equivalent to an annualized rate of 0.288% of average month-end
net assets.
Class-specific fees and expenses - Expenses that are specific to individual
share classes are accrued directly to the respective share class. The principal
class-specific fees and expenses are described below:
Distribution services - The fund has adopted plans of distribution for all
share classes, except Class R-5. Under the plans, the Board of Directors
approves certain categories of expenses that are used to finance activities
primarily intended to sell fund shares. The plans provide for annual
expenses, based on a percentage of average daily net assets, ranging from
0.25% to 1.00% as noted below. In some cases, the Board of Directors has
approved expense amounts lower than plan limits.
- ------------------------------------------------ ----------------------------- -----------------------------
Share class Currently approved limits Plan limits
- ------------------------------------------------ ----------------------------- -----------------------------
- ------------------------------------------------ ----------------------------- -----------------------------
Class A 0.25% 0.25%
- ------------------------------------------------ ----------------------------- -----------------------------
- ------------------------------------------------ ----------------------------- -----------------------------
Class 529-A 0.25 0.50
- ------------------------------------------------ ----------------------------- -----------------------------
- ------------------------------------------------ ----------------------------- -----------------------------
Classes B and 529-B 1.00 1.00
- ------------------------------------------------ ----------------------------- -----------------------------
- ------------------------------------------------ ----------------------------- -----------------------------
Classes C, 529-C and R-1 1.00 1.00
- ------------------------------------------------ ----------------------------- -----------------------------
- ------------------------------------------------ ----------------------------- -----------------------------
Class R-2 0.75 1.00
- ------------------------------------------------ ----------------------------- -----------------------------
- ------------------------------------------------ ----------------------------- -----------------------------
Classes 529-E and R-3 0.50 0.75
- ------------------------------------------------ ----------------------------- -----------------------------
- ------------------------------------------------ ----------------------------- -----------------------------
Classes F, 529-F and R-4 0.25 0.50
- ------------------------------------------------ ----------------------------- -----------------------------
All share classes may use up to 0.25% of average daily net assets to
pay service fees, or to compensate AFD for paying service fees, to
firms that have entered into agreements with AFD for providing certain
shareholder services. Expenses in excess of these amounts, up to
approved limits, may be used to compensate dealers and wholesalers for
shares sold.
For classes A and 529-A, the Board of Directors has also approved the
reimbursement of dealer and wholesaler commissions paid by AFD for certain
shares sold without a sales charge. Each class reimburses AFD for amounts billed
within the prior 15 months but only to the extent that the overall annual
expense limit of 0.25% is not exceeded. As of April 30, 2003, there were no
unreimbursed expenses subject to reimbursement for classes A or 529-A.
Transfer agent services - The fund has a transfer agent agreement with AFS for
classes A and B. Under this agreement, these share classes compensate AFS for
transfer agent services including shareholder recordkeeping, communications and
transaction processing. AFS is also compensated for certain transfer agent
services provided to all other share classes from the administrative services
fees paid to CRMC described below.
Administrative services - The fund has an administrative services agreement with
CRMC to provide transfer agent and other related shareholder services for all
classes of shares other than classes A and B. Each relevant class pays CRMC
annual fees of 0.15% (0.10% for Class R-5) based on its respective average daily
net assets. Each relevant class also pays AFS additional amounts for certain
transfer agent services. CRMC and AFS may use these fees to compensate third
parties for performing these services. During the start-up period for classes
R-1, R-2, R-3 and R-4, CRMC has voluntarily agreed to pay a portion of these
fees. Each 529 share class is subject to an additional annual administrative
services fee of 0.10% of its respective average daily net assets; this fee is
payable to the Commonwealth of Virginia for the maintenance of the
CollegeAmerica plan. Although these amounts are included with administrative
services fees in the accompanying financial statements, the Commonwealth of
Virginia is not considered a related party. Administrative services fees are
presented gross of any payments made by CRMC.
Expenses under the agreements described above for the six months ended April 30,
2003, were as follows (dollars in thousands):
- ---------------------------------------------------------------------------------------------------------------
Share class Distribution Transfer agent Administrative services
services services
-------------------------------------------------------------
CRMC Transfer agent Commonwealth of
administrative services Virginia
services administrative
services
- ---------------------------------------------------------------------------------------------------------------
Class A $8,912 $3,406 Not applicable Not applicable Not applicable
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class B 884 97 Not applicable Not applicable Not applicable
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class C 620 Included in $93 $20 Not applicable
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class F 85 Included in 51 9 Not applicable
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class 529-A 8 Included in 19 2 $12
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class 529-B 33 Included in 5 2 3
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class 529-C 38 Included in 6 2 4
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class 529-E 3 Included in 1 -* 1
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class 529-F -* Included in -* -* -*
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class R-1 1 Included in -* 1 Not applicable
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class R-2 25 Included in 5 26 Not applicable
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class R-3 15 Included in 5 8 Not applicable
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class R-4 2 Included in 1 1 Not applicable
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Class R-5 Not applicable Included in 20 1 Not applicable
Administrative
services
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Total $10,626 $3,503 $206 $72 $20
- ----------------===============================================================================================
* Amount less than one thousand.
Deferred Directors' compensation - Since the adoption of the deferred
compensation plan in 1993, Directors who are unaffiliated with CRMC may elect to
defer the cash payment of part or all of their compensation. These deferred
amounts, which remain as liabilities of the fund, are treated as if invested in
shares of the fund or other American Funds. These amounts represent general,
unsecured liabilities of the fund and vary according to the total returns of the
selected funds. Directors' fees in the accompanying financial statements include
the current fees (either paid in cash or deferred) and the net increase or
decrease in the value of the deferred amounts.
Affiliated officers and Directors - Officers and certain Directors of the fund
are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated
officers or Directors received any compensation directly from the fund.
4. Capital share transactions
Capital share transactions in the fund were as follows (dollars and shares in
thousands):
Reinvestments of
Share class(1) Sales(2) dividends and distributions Repurchases(2) Net increase
Amount Shares Amount Shares Amount Shares Amount Shares
Six months ended April 30, 2003
Class A $ 635,240 31,475 $ 202,517 9,994 $ (559,479) (27,922)$ 278,278 13,547
Class B 61,483 3,071 3,973 197 (13,716) (693) 51,740 2,575
Class C 54,235 2,716 2,706 134 (13,180) (665) 43,761 2,185
Class F 41,483 2,060 1,589 78 (14,304) (712) 28,768 1,426
Class 529-A 12,288 609 652 33 (727) (36) 12,213 606
Class 529-B 3,551 176 138 7 (144) (7) 3,545 176
Class 529-C 3,954 197 159 8 (235) (12) 3,878 193
Class 529-E 1,019 51 27 1 (24) (1) 1,022 51
Class 529-F 227 11 2 -* -* -* 229 11
Class R-1 357 18 6 -* (8) -* 355 18
Class R-2 12,262 616 120 6 (1,294) (66) 11,088 556
Class R-3 12,721 641 113 6 (1,490) (76) 11,344 571
Class R-4 2,193 107 19 1 (198) (10) 2,014 98
Class R-5 2,561 131 654 32 (2,014) (100) 1,201 63
Total net increase
(decrease) $ 843,574 41,879 $ 212,675 10,497 $ (606,813) (30,300)$ 449,436 22,076
Year ended October 31, 2002
Class A $ 1,319,714 57,361 $ 407,040 17,365 $ (1,147,364)(51,276)$ 579,390 23,450
Class B 138,423 6,009 3,709 161 (20,602) (961) 121,530 5,209
Class C 110,530 4,824 2,023 89 (17,033) (794) 95,520 4,119
Class F 59,909 2,642 1,070 47 (11,511) (526) 49,468 2,163
Class 529-A 22,249 966 190 9 (372) (18) 22,067 957
Class 529-B 5,709 251 33 2 (141) (7) 5,601 246
Class 529-C 6,709 292 40 2 (127) (6) 6,622 288
Class 529-E 871 40 6 -* (18) (1) 859 39
Class 529-F 11 1 -* -* - - 11 1
Class R-1 176 9 -* -* (50) (3) 126 6
Class R-2 2,574 129 6 -* (81) (4) 2,499 125
Class R-3 1,755 86 5 -* (209) (11) 1,551 75
Class R-4 386 21 -* -* (178) (10) 208 11
Class R-5 48,038 2,127 204 10 (1,974) (92) 46,268 2,045
Total net increase
(decrease) $ 1,717,054 74,758 $ 414,326 17,685 $ (1,199,660)(53,709)$ 931,720 38,734
* Amount less than one thousand.
(1) Class 529-A, 529-B, 529-C, 529-E and 529-F shares were offered
beginning February 15, 2002. Class R-1, R-2, R-3, R-4 and R-5 shares
were offered beginning May 15, 2002.
(2) Includes exchanges between share classes of the fund.
5. Restricted securities
The fund has invested in certain securities for which resale may be limited to
qualified buyers or which are otherwise restricted. These securities are
identified in the investment portfolio. As of April 30, 2003, the total value of
restricted securities was $49,953,000, which represents 0.565% of the net assets
of the fund.
6. Investment transactions and other disclosures
The fund made purchases and sales of investment securities, excluding short-term
securities, of $1,190,013,000 and $853,918,000, respectively, during the six
months ended April 30, 2003.
The fund receives a reduction in its custodian fee equal to the amount of
interest calculated on certain cash balances held at the custodian bank. For the
six months ended April 30, 2003, the custodian fee of $67,000 includes $7,000
that was offset by this reduction, rather than paid in cash.
FINANCIAL HIGHLIGHTS(1)
Income (loss)
from investment operations (3) Dividends and distributions
Net
Net asset gains(losses) Dividends
value, Net on securities Total from (from net Distributions Total
beginning investment (both realized investment investment (from capital dividends and
of period income and unrealized) operations income) gains) distributions
Class A:
Six months ended 4/30/2003 (2) $20.20 $.25 $.83 $1.08 $(.26) $(.31) $(.57)
Year ended 10/31/2002 23.22 .49 (2.29) (1.80) (.57) (.65) (1.22)
Year ended 10/31/2001 24.36 .65 .19 .84 (.72) (1.26) (1.98)
Year ended 10/31/2000 30.09 .80 (.74) .06 (.74) (5.05) (5.79)
Year ended 10/31/1999 31.18 .82 1.78 2.60 (.76) (2.93) (3.69)
Year ended 10/31/1998 30.14 .84 3.48 4.32 (.80) (2.48) (3.28)
Class B:
Six months ended 4/30/2003 (2) 20.11 .17 .81 .98 (.18) (.31) (.49)
Year ended 10/31/2002 23.13 .32 (2.28) (1.96) (.41) (.65) (1.06)
Year ended 10/31/2001 24.30 .44 .21 .65 (.56) (1.26) (1.82)
Period from 3/15/2000 to 10/31/2000 21.78 .37 2.46 2.83 (.31) - (.31)
Class C:
Six months ended 4/30/2003 (2) 20.09 .16 .82 .98 (.18) (.31) (.49)
Year ended 10/31/2002 23.12 .30 (2.28) (1.98) (.40) (.65) (1.05)
Period from 3/15/2001 to 10/31/2001 23.48 .24 (.35) (.11) (.25) - (.25)
Class F:
Six months ended 4/30/2003 (2) 20.17 .24 .82 1.06 (.25) (.31) (.56)
Year ended 10/31/2002 23.20 .47 (2.30) (1.83) (.55) (.65) (1.20)
Period from 3/15/2001 to 10/31/2001 23.54 .34 (.35) (.01) (.33) - (.33)
Class 529-A:
Six months ended 4/30/2003 (2) 20.20 .25 .82 1.07 (.26) (.31) (.57)
Period from 2/19/2002 to 10/31/2002 23.31 .34 (3.07) (2.73) (.38) - (.38)
Class 529-B:
Six months ended 4/30/2003 (2) 20.16 .15 .82 .97 (.17) (.31) (.48)
Period from 2/19/2002 to 10/31/2002 23.31 .20 (3.06) (2.86) (.29) - (.29)
Class 529-C:
Six months ended 4/30/2003 (2) 20.16 .15 .82 .97 (.17) (.31) (.48)
Period from 2/20/2002 to 10/31/2002 23.54 .21 (3.30) (3.09) (.29) - (.29)
Class 529-E:
Six months ended 4/30/2003 (2) 20.16 .20 .83 1.03 (.22) (.31) (.53)
Period from 3/7/2002 to 10/31/2002 24.93 .27 (4.67) (4.40) (.37) - (.37)
Class 529-F:
Six months ended 4/30/2003 (2) 20.22 .23 .82 1.05 (.25) (.31) (.56)
Period from 9/17/2002 to 10/31/2002 20.63 .05 (.34) (.29) (.12) - (.12)
Class R-1:
Six months ended 4/30/2003 (2) 20.17 .16 .83 .99 (.19) (.31) (.50)
Period from 6/11/2002 to 10/31/2002 23.56 .12 (3.29) (3.17) (.22) - (.22)
Class R-2:
Six months ended 4/30/2003 (2) 20.17 .16 .80 .96 (.20) (.31) (.51)
Period from 5/31/2002 to 10/31/2002 24.35 .14 (4.10) (3.96) (.22) - (.22)
Class R-3:
Six months ended 4/30/2003 (2) 20.18 .20 .82 1.02 (.23) (.31) (.54)
Period from 6/6/2002 to 10/31/2002 23.70 .17 (3.44) (3.27) (.25) - (.25)
Class R-4:
Six months ended 4/30/2003 (2) 20.19 .23 .84 1.07 (.26) (.31) (.57)
Period from 6/27/2002 to 10/31/2002 22.95 .17 (2.79) (2.62) (.14) - (.14)
Class R-5:
Six months ended 4/30/2003 (2) 20.21 .27 .82 1.09 (.28) (.31) (.59)
Period from 5/15/2002 to 10/31/2002 24.66 .26 (4.43) (4.17) (.28) - (.28)
Ratio of Ratio of
Net asset Net assets, expenses net income
value, end Total end of period to average to average
of period return(4) (in millions) net assets net assets
Class A:
Six months ended 4/30/2003 $20.71 5.42% $8,257 .64% (6) 2.51% (6)
Year ended 10/31/2002 20.20 (8.42) 7,782 .60 2.15
Year ended 10/31/2001 23.22 3.71 8,399 .59 2.68
Year ended 10/31/2000 24.36 1.21 8,343 .59 3.29
Year ended 10/31/1999 30.09 9.00 10,421 .57 2.67
Year ended 10/31/1998 31.18 15.15 10,215 .56 2.75
Class B:
Six months ended 4/30/2003 20.60 4.95 213 1.43 (6) 1.71 (6)
Year ended 10/31/2002 20.11 (9.11) 156 1.40 1.40
Year ended 10/31/2001 23.13 2.88 59 1.38 1.80
Period from 3/15/2000 to 10/31/2000 24.30 13.07 10 1.38 (6) 2.33 (6)
Class C:
Six months ended 4/30/2003 20.58 4.92 154 1.50 (6) 1.64 (6)
Year ended 10/31/2002 20.09 (9.20) 107 1.48 1.34
Period from 3/15/2001 to 10/31/2001 23.12 (.48) 28 1.48 (6) 1.64 (6)
Class F:
Six months ended 4/30/2003 20.67 5.33 85 .74 (6) 2.39 (6)
Year ended 10/31/2002 20.17 (8.57) 54 .75 2.08
Period from 3/15/2001 to 10/31/2001 23.20 (.05) 12 .76 (6) 2.30 (6)
Class 529-A:
Six months ended 4/30/2003 20.70 5.38 32 .65 (6) 2.49 (6)
Period from 2/19/2002 to 10/31/2002 20.20 (11.88) 19 .70 (6) 2.25 (6)
Class 529-B:
Six months ended 4/30/2003 20.65 4.85 9 1.63 (6) 1.50 (6)
Period from 2/19/2002 to 10/31/2002 20.16 (12.40) 5 1.60 (6) 1.36 (6)
Class 529-C:
Six months ended 4/30/2003 20.65 4.86 10 1.62 (6) 1.52 (6)
Period from 2/20/2002 to 10/31/2002 20.16 (13.25) 6 1.59 (6) 1.38 (6)
Class 529-E:
Six months ended 4/30/2003 20.66 5.17 2 1.08 (6) 2.04 (6)
Period from 3/7/2002 to 10/31/2002 20.16 (17.78) 1 1.05 (6) 1.95 (6)
Class 529-F:
Six months ended 4/30/2003 20.71 5.29 - (5) .83 (6) 2.29 (6)
Period from 9/17/2002 to 10/31/2002 20.22 (1.42) - (5) .09 .26
Class R-1:
Six months ended 4/30/2003 20.66 4.95 1 1.52 (6,7) 1.59 (6)
Period from 6/11/2002 to 10/31/2002 20.17 (13.50) - (5) .58 (7) .60
Class R-2:
Six months ended 4/30/2003 20.62 4.81 14 1.48 (6,7) 1.65 (6)
Period from 5/31/2002 to 10/31/2002 20.17 (16.31) 3 .61 (7) .67
Class R-3:
Six months ended 4/30/2003 20.66 5.14 13 1.10 (6,7) 2.02 (6)
Period from 6/6/2002 to 10/31/2002 20.18 (13.87) 2 .43 (7) .83
Class R-4:
Six months ended 4/30/2003 20.69 5.35 2 .75 (6,7) 2.33 (6)
Period from 6/27/2002 to 10/31/2002 20.19 (11.43) - (5) .25 (7) .84
Class R-5:
Six months ended 4/30/2003 20.71 5.48 44 .42 (6) 2.73 (6)
Period from 5/15/2002 to 10/31/2002 20.21 (16.98) 41 .18 1.22
Six months ended
April 30, Year ended October 31
2003(2) 2002 2001 2000 1999 1998
Portfolio turnover rate for all classes of shares 11% 31% 45% 29% 42% 29%
(1) Based on operations for the period shown (unless otherwise
noted) and, accordingly, may not be representative of a full year.
(2) Unaudited.
(3) Years ended 1999 and 1998 are based on shares outstanding
on the last day of the year; all other periods are based on
average shares outstanding.
(4) Total returns exclude all sales charges, including contingent
deferred sales charges.
(5) Amount less than 1 million.
(6) Annualized.
(7) During the start-up period for this class, CRMC voluntarily
agreed to pay a portion of the fees relating to transfer agent
services. Had CRMC not paid such fees, expense ratios would have
been 2.53%, 2.01%,1.23% and .82% for classes R-1, R-2, R-3 and R-4,
respectively, during the six months ended April 30, 2003, and 1.24%,
..75%, .53% and .53% for classes R-1, R-2, R-3 and R-4, respectively,
during the period ended October 31, 2002.
[logo - American Funds(R)]
The right choice for the long term(R)
OFFICES OF THE FUND AND OF THE
INVESTMENT ADVISER
Capital Research and
Management Company
333 South Hope Street
Los Angeles, CA 90071-1406
135 South State College Boulevard
Brea, CA 92821-5823
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
(Please write to the address nearest you.)
P.O. Box 25065
Santa Ana, CA 92799-5065
P.O. Box 659522
San Antonio, TX 78265-9522
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
CUSTODIAN OF ASSETS
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070
COUNSEL
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, CA 90071-2899
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two California Plaza
350 South Grand Avenue
Los Angeles, CA 90071-3462
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
There are several ways to invest in American Mutual Fund. Class A shares are
subject to a 5.75% maximum up-front sales charge that declines for accounts of
$25,000 or more. Other share classes, which are generally not available for
certain employee-sponsored retirement plans, have no up-front sales charges but
are subject to additional annual expenses and fees. Annual expenses for Class B
shares were 0.80% higher than for Class A shares; Class B shares convert to
Class A shares after eight years of ownership. If redeemed within six years,
Class B shares may also be subject to a contingent deferred sales charge (CDSC)
of up to 5% that declines over time. Class C shares were subject to annual
expenses 0.88% higher than those for Class A shares and a 1% CDSC if redeemed
within the first year after purchase. Class C shares convert to Class F shares
after 10 years. Class F shares, which are available only through certain
fee-based programs offered by broker-dealer firms and registered investment
advisers, had higher annual expenses (by 0.15%) than did Class A shares, and an
annual asset-based fee charged by the sponsoring firm. Expenses are deducted
from income earned by the fund. As a result, dividends and investment results
will differ for each share class.
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, OR FOR A
PROSPECTUS FOR ANY OF THE AMERICAN FUNDS, PLEASE CONTACT YOUR FINANCIAL ADVISER.
YOU MAY ALSO CALL AMERICAN FUNDS SERVICE COMPANY AT 800/421-0180 OR VISIT US AT
AMERICANFUNDS.COM. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR
SEND MONEY.
This report is for the information of shareholders of American Mutual Fund, but
it may also be used as sales literature when preceded or accompanied by the
current prospectus, which gives details about charges, expenses, investment
objectives and operating policies of the fund. If used as sales material after
June 30, 2003, this report must be accompanied by an American Funds statistical
update for the most recently completed calendar quarter.
THE CAPITAL GROUP COMPANIES
American Funds
Capital Research and Management
Capital International
Capital Guardian
Capital Bank and Trust
Lit. No. AMF-013-0603
Litho in USA CD/AL/6270
Printed on recycled paper
ITEM 2 - Code of Ethics
Not applicable for filing of Semiannual Reports to Shareholders.
ITEM 3 - Audit Committee Financial Expert
Not applicable for filing of Semiannual Reports to Shareholders.
ITEM 4 - Principal Accountant Fees and Services
Form N-CSR disclosure requirement not yet effective with respect to Registrant.
ITEM 5 - Audit Committee Disclosure for Listed Companies
Not applicable.
ITEM 6 - Reserved
ITEM 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end
management investment company.
ITEM 8 - Reserved
ITEM 9 - Controls and Procedures
(a) The officers providing the certifications in this report
in accordance with rule 30a-2 under the
Investment Company Act of 1940 have concluded, based on their evaluation of
the Registrant's disclosure controls and procedures (as such term is
defined in such rule), that such controls and procedures are adequate and
reasonably designed to achieve the purposes described in paragraph (c) of
such rule.
(b) There were no significant changes in the Registrant's
internal controls or other factors that
could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 10 - Exhibits
(a) Code of Ethics - not applicable for filing of Semiannual
Reports to Shareholders.
(b) The certifications required by Rule 30a-2 of the
Investment Company Act of 1940, as
amended, and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are
attached as exhibits hereto.
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.
AMERICAN MUTUAL FUND, INC.
By /s/ James K. Dunton
James K. Dunton, Chairman and PEO
Date: July 7, 2003
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/ James K. Dunton
James K. Dunton, Chairman and PEO
Date: July 7, 2003
By /s/ Sheryl F. Johnson
Sheryl F. Johnson, Treasurer
Date: July 7, 2003