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, 2004
Date of reporting period: April 30, 2004
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
[front cover: Mt. Rainier National Park in Washington state with mountains in
background]
Semi-annual report for the six months ended April 30, 2004
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.
Here are the average annual total returns on a $1,000 investment with all
distributions reinvested for periods ended March 31, 2004 (the most recent
calendar quarter):
Class A shares 1 year 5 years 10 years
Reflecting 5.75% maximum sales charge +22.50% +3.84% +10.71%
The fund's 30-day yield for Class A shares as of May 31, 2004, calculated in
accordance with the Securities and Exchange Commission formula, was 1.76%. The
fund's distribution rate for Class A shares as of that date was 1.91%. Both
reflect the 5.75% maximum sales charge. The SEC yield reflects the rate at which
the fund is earning income on its current portfolio of securities while the
distribution rate reflects the fund's past dividends paid to shareholders.
Accordingly, the fund's SEC yield and distribution rate may differ.
Results for other share classes can be found on page 3. Please see the inside
back cover for important information about other share classes.
FIGURES SHOWN ON THESE TWO PAGES ARE PAST RESULTS FOR CLASS A SHARES AND ARE NOT
PREDICTIVE OF RESULTS IN FUTURE PERIODS. CURRENT AND FUTURE RESULTS MAY BE LOWER
OR HIGHER THAN THOSE SHOWN. SHARE PRICES AND RETURNS WILL VARY, SO INVESTORS MAY
LOSE MONEY. FOR THE MOST CURRENT INFORMATION AND MONTH-END RESULTS, VISIT
AMERICANFUNDS.COM. FUND RESULTS SHOWN, UNLESS OTHERWISE INDICATED, ARE AT NET
ASSET VALUE. IF A SALES CHARGE (MAXIMUM 5.75%) HAD BEEN DEDUCTED, THE RESULTS
WOULD HAVE BEEN LOWER.
Investing for short periods makes losses more likely. Investments are not
FDIC-insured, nor are they deposits of or guaranteed by a bank or other entity.
[small photo Mt. Rainier National Park in Washington state with mountains in
background]
FELLOW SHAREHOLDERS:
American Mutual Fund posted solid results for the six months ended April 30,
2004, with a total return of 6.7% versus 6.3% for its benchmark, the unmanaged
Standard & Poor's 500 Composite Index. For the past 12 months, AMF's total
return was 20.8% compared with 22.9% for the S&P 500.
For the 12 months ended April 30, the fund's income return with dividends
reinvested was 2.4%, compared with the S&P 500's 2.0%. For the past six months,
investors received income dividends totaling 24 cents a share and 9 cents per
share in capital gain distributions.
It is, of course, over longer periods that the fund's results are most relevant.
During the difficult market period of the five years ended April 30, AMF has
produced an average annual total return of 3.4%, outpacing the -2.3% return of
the S&P 500.
ECONOMIC REVIEW
After two-and-a-half years of growth, the U.S. economy continues to move forward
at a vigorous rate. Gross domestic product rose at a 4.4% annual rate in the
first quarter of 2004, compared with the 4.1% pace in the fourth quarter of
2003. Corporate earnings have rebounded strongly, and have now fueled a recovery
in capital spending and employment. Consumer spending has also remained strong
- -- fueled by the lowest interest rates in nearly half a century, mortgage
refinancing and reduced taxes. As a reflection of the low interest rates and low
yields on stocks, the AMF board was compelled to reduce the fund's quarterly
dividend in March to 11 cents from 13 cents.
As a result of all the good economic news, the Federal Reserve Board has
signaled its intent to raise the federal funds rate to counter an expected rise
in inflation. Unfortunately, higher interest rates and tighter credit will
likely cause problems for U.S. consumers who carry high credit card balances and
variable rate mortgages.
PORTFOLIO REVIEW
With a potentially changing interest rate environment and an unsettled situation
in Iraq, we feel it appropriate to hold a reasonable amount of defensive buying
reserves in cash, short-term securities and bonds. As of April 30, the fund had
83% of its portfolio in stocks, 14% in cash and 3% in bonds. The portfolio is
conservatively structured with our largest industry holdings concentrated in
traditional sectors like oil and gas, pharmaceuticals, telecommunications,
commercial banks and insurance. These industries have broad exposure to the U.S.
economy and have benefited from its recovery.
Since its inception more than 54 years ago, American Mutual Fund has sought 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 seeks to invest in
established, well-managed companies that are reasonably priced and have a
history of growing revenues and profits. To be eligible for the portfolio, they
also must pay a dividend.
GOING FORWARD
With the prospect of rising interest rates in the near future, we are likely to
see corporate earnings growth return to a more normal trend over the next two or
three years. Therefore, we believe it is important for shareholders to maintain
realistic expectations of their mutual fund returns. This may well be a period
where the overall growth in equity markets will be much more subdued than what
we have experienced for the past year or so.
American Mutual Fund has continued to attract new investors. In the past six
months, the number of shareholder accounts has risen about 17%. We welcome our
new shareholders and thank our long-term investors for their faith in the fund.
Cordially,
/s/ James K. Dunton /s/ Robert G. O'Donnell
James K. Dunton Robert G. O'Donnell
Chairman of the Board President
June 9, 2004
Past results are not predictive of results in future periods. Current and future
results may be lower or higher than past results. Share prices and returns will
vary, so investors may lose money.
For current information about the fund, visit americanfunds.com.
OTHER SHARE CLASS RESULTS unaudited
CLASS B, CLASS C, CLASS F AND CLASS 529
Returns for periods ended March 31, 2004 (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 +24.03% +7.20%(1)
Not reflecting CDSC +29.03% +7.60%(1)
CLASS C SHARES
Reflecting CDSC, maximum of 1%, payable only if shares
are sold within one year of purchase +27.88% +4.63%(2)
Not reflecting CDSC +28.88% +4.63%(2)
CLASS F SHARES(3)
Not reflecting annual asset-based fee charged by
sponsoring firm +29.84% +5.40%(2)
CLASS 529-A SHARES
Reflecting 5.75% maximum sales charge +22.40% +3.13%(4)
Not reflecting maximum sales charge +29.89% +6.06%(4)
CLASS 529-B SHARES
Reflecting applicable CDSC, maximum of 5%, payable only
if shares are sold within six years of purchase +23.71% +3.29%(4)
Not reflecting CDSC +28.71% +5.10%(4)
CLASS 529-C SHARES
Reflecting CDSC, maximum of 1%, payable only if shares
are sold within one year of purchase +27.73% +4.63%(5)
Not reflecting CDSC +28.73% +4.63%(5)
CLASS 529-E SHARES(3) +29.41% +2.42%(6)
CLASS 529-F SHARES(3)
Not reflecting annual asset-based fee charged by
sponsoring firm +29.73% +16.53%(7)
Figures shown on this page are past results and not predictive of results in
future periods. Current and future results may be lower or higher than those
shown. Share prices and returns will vary, so investors may lose money. For the
most current information and month-end results, visit americanfunds.com.
(1) Average annual total return from March 15, 2000, when Class B shares were
first sold.
(2) Average annual total return 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) Average annual total return from February 19, 2002, when Class 529-A and
Class 529-B shares were first sold.
(5) Average annual total return from February 20, 2002, when Class 529-C shares
were first sold.
(6) Average annual total return from March 7, 2002, when Class 529-E shares
were first sold.
(7) Average annual total return from September 17, 2002, when Class 529-F
shares were first sold.
INVESTMENT PORTFOLIO, April 30, 2004 unaudited
[begin pie chart]
Percent
of net
INDUSTRY DIVERSIFICATION assets
Oil & gas 7.95 %
Pharmaceuticals 7.39
Diversified telecommunication services 6.47
Commercial banks 5.09
Insurance 4.80
Other industries 51.29
Bonds & notes 3.01
Cash & equivalents 14.00
100.00
[end pie chart]
Percent
of net
Ten Largest Equity Holdings assets
IBM 1.88 %
General Motors 1.77
Bank of America 1.72
Eli Lilly 1.66
J.P. Morgan Chase 1.62
BellSouth 1.53
Sprint 1.52
General Electric 1.47
Fannie Mae 1.42
Bristol-Myers Squibb 1.30
Market
value
EQUITY SECURITIES - 82.99% Shares (000)
(common and convertible preferred stocks)
ENERGY
ENERGY EQUIPMENT & SERVICES - 0.21%
Schlumberger Ltd. 440,200 $ 25,765
OIL & GAS - 7.95%
Ashland Inc. 1,700,000 81,430
ChevronTexaco Corp. 1,669,950 152,800
ConocoPhillips 2,066,589 147,348
Devon Energy Corp. 2,000,000 122,400
Exxon Mobil Corp. 3,385,000 144,032
Marathon Oil Corp. 4,400,000 147,664
Sunoco, Inc. 1,503,400 94,564
Unocal Corp. 2,580,400 92,998
1,009,001
MATERIALS
CHEMICALS - 1.78%
Air Products and Chemicals, Inc. 1,550,000 77,205
Dow Chemical Co. 1,553,000 61,639
PPG Industries, Inc. 500,000 29,655
Praxair, Inc. 1,400,000 51,170
CONTAINERS & PACKAGING - 0.30%
Sonoco Products Co. 1,500,000 37,290
PAPER & FOREST PRODUCTS - 1.95%
Georgia-Pacific Corp., Georgia-Pacific Group 1,900,000 66,690
International Paper Co. 2,250,000 90,720
MeadWestvaco Corp. 3,188,000 83,366
497,735
CAPITAL GOODS
AEROSPACE & DEFENSE - 2.18%
Boeing Co. 650,000 27,748
General Dynamics Corp. 450,000 42,129
Northrop Grumman Corp. 1,200,000 119,100
Raytheon Co. 1,150,000 37,099
United Technologies Corp. 500,000 43,130
ELECTRICAL EQUIPMENT - 0.58%
Emerson Electric Co. 1,200,000 72,264
INDUSTRIAL CONGLOMERATES - 1.93%
General Electric Co. 6,050,000 181,197
Tyco International Ltd. 2,100,000 57,645
MACHINERY - 0.16%
Caterpillar Inc. 250,000 19,432
599,744
COMMERCIAL SERVICES & SUPPLIES
COMMERCIAL SERVICES & SUPPLIES - 1.11%
Pitney Bowes Inc. 1,600,000 70,000
ServiceMaster Co. 5,600,000 67,928
137,928
TRANSPORTATION
ROAD & RAIL - 1.74%
Burlington Northern Santa Fe Corp. 1,300,000 42,510
Norfolk Southern Corp. 6,406,500 152,603
Union Pacific Corp. 350,000 20,625
215,738
AUTOMOBILES & COMPONENTS
AUTO COMPONENTS - 1.89%
Delphi Corp. 9,550,000 97,410
Magna International Inc., Class A 1,720,000 135,708
AUTOMOBILES - 1.77%
General Motors Corp. 4,614,800 218,834
451,952
CONSUMER DURABLES & APPAREL
HOUSEHOLD DURABLES - 0.49%
Leggett & Platt, Inc. 2,700,000 61,020
TEXTILES, APPAREL & LUXURY GOODS - 0.52%
NIKE, Inc., Class B 150,000 10,792
VF Corp. 1,150,000 53,084
124,896
HOTELS, RESTAURANTS & LEISURE
HOTELS, RESTAURANTS & LEISURE - 0.93%
Carnival Corp., units 2,050,000 87,473
McDonald's Corp. 1,000,000 27,230
114,703
MEDIA
MEDIA - 0.50%
Dow Jones & Co., Inc. 96,800 4,462
Knight-Ridder, Inc. 500,000 38,720
Walt Disney Co. 800,000 18,424
61,606
RETAILING
DISTRIBUTORS - 0.52%
Genuine Parts Co. 1,800,000 64,440
MULTILINE RETAIL - 1.78%
J.C. Penney Co., Inc. 2,150,000 72,799
May Department Stores Co. 1,350,000 41,580
Target Corp. 2,450,000 106,256
SPECIALTY RETAIL - 1.42%
Gap, Inc. 800,000 17,608
Lowe's Companies, Inc. 810,000 42,169
TJX Companies, Inc. 4,700,000 115,479
460,331
FOOD & STAPLES RETAILING
FOOD & STAPLES RETAILING - 1.59%
Albertson's, Inc. 2,700,000 63,072
Walgreen Co. 1,900,000 65,512
Wal-Mart Stores, Inc. 1,200,000 68,400
196,984
FOOD & BEVERAGE
BEVERAGES - 0.39%
Coca-Cola Co. 950,000 48,041
FOOD PRODUCTS - 2.57%
ConAgra Foods, Inc. 2,250,000 65,002
General Mills, Inc. 1,345,000 65,569
H.J. Heinz Co. 3,500,000 133,665
Kraft Foods Inc., Class A 700,000 23,037
Sara Lee Corp. 1,300,000 30,004
365,318
HOUSEHOLD & PERSONAL PRODUCTS
HOUSEHOLD PRODUCTS - 0.93%
Kimberly-Clark Corp. 1,110,000 72,649
Procter & Gamble Co. 400,000 42,300
PERSONAL PRODUCTS - 0.79%
Avon Products, Inc. 1,167,500 98,070
213,019
HEALTH CARE EQUIPMENT & SERVICES
HEALTH CARE EQUIPMENT & SUPPLIES - 0.67%
Applera Corp. - Applied Biosystems Group 1,176,700 21,851
Becton, Dickinson and Co. 1,200,000 60,660
HEALTH CARE PROVIDERS & SERVICES - 1.07%
Aetna Inc. 295,000 24,411
CIGNA Corp. 400,000 25,804
McKesson Corp. 2,500,000 82,150
214,876
PHARMACEUTICALS & BIOTECHNOLOGY
PHARMACEUTICALS - 7.39%
Abbott Laboratories 925,000 40,718
Abbott Laboratories when-issued (1) 1,500,000 61,905
Bristol-Myers Squibb Co. 6,407,200 160,821
Eli Lilly and Co. 2,780,000 205,192
Johnson & Johnson 1,775,000 95,903
Merck & Co., Inc. 2,050,000 96,350
Pfizer Inc 2,958,100 105,782
Schering-Plough Corp. 1,471,700 24,622
Wyeth 3,223,000 122,700
913,993
BANKS
COMMERCIAL BANKS - 5.09%
Bank of America Corp. (acquired FleetBoston Financial Corp.) 2,638,066 212,338
BANK ONE CORP. 200,000 9,874
Comerica Inc. 1,400,000 72,282
National City Corp. 1,050,000 36,404
PNC Financial Services Group, Inc. 1,840,000 97,704
SunTrust Banks, Inc. 500,000 34,025
U.S. Bancorp 1,350,000 34,614
Wachovia Corp. 813,600 37,222
Wells Fargo & Co. 1,668,750 94,218
THRIFTS & MORTGAGE FINANCE - 3.56%
Fannie Mae 2,550,000 175,236
Freddie Mac 2,660,000 155,344
Washington Mutual, Inc. 2,770,000 109,110
1,068,371
DIVERSIFIED FINANCIALS
CAPITAL MARKETS - 1.93%
Bank of New York Co., Inc. 1,300,000 37,882
J.P. Morgan Chase & Co. 5,330,000 200,408
CONSUMER FINANCE - 0.28%
American Express Co. 700,000 34,265
DIVERSIFIED FINANCIAL SERVICES - 0.84%
Citigroup Inc. 2,165,441 104,136
376,691
INSURANCE
INSURANCE - 4.80%
Allstate Corp. 1,200,000 55,080
American International Group, Inc. 1,960,600 140,477
Aon Corp. 2,250,000 58,635
Chubb Corp. 7.00% convertible preferred 2005 400,000 units 11,200
Jefferson-Pilot Corp. 2,150,000 106,619
Lincoln National Corp. 1,167,900 52,415
Marsh & McLennan Companies, Inc. 1,050,000 47,355
UnumProvident Corp. 7,800,000 121,290
593,071
REAL ESTATE
REAL ESTATE - 0.35%
Equity Office Properties Trust 900,000 22,653
Equity Residential 748,100 20,543
43,196
SOFTWARE & SERVICES
IT SERVICES - 1.13%
Automatic Data Processing, Inc. 950,000 41,620
Electronic Data Systems Corp. 4,406,000 80,586
Electronic Data Systems Corp. 7.625% FELINE PRIDES 2004 1,030,000 units 17,386
SOFTWARE - 0.29%
Microsoft Corp. 1,400,000 36,358
175,950
TECHNOLOGY HARDWARE & EQUIPMENT
COMMUNICATIONS EQUIPMENT - 0.15%
Motorola, Inc. 1,000,000 18,250
COMPUTERS & PERIPHERALS - 2.96%
Hewlett-Packard Co. 6,800,000 133,960
International Business Machines Corp. 2,635,000 232,328
384,538
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 1.61%
Intel Corp. 1,200,000 30,876
Linear Technology Corp. 650,000 23,160
Microchip Technology Inc. 3,400,000 95,268
Texas Instruments Inc. 2,000,000 50,200
199,504
TELECOMMUNICATION SERVICES
DIVERSIFIED TELECOMMUNICATION SERVICES - 6.47%
ALLTEL Corp. 1,000,000 50,340
ALLTEL Corp. 7.75% convertible preferred 2005 500,000 units 24,925
AT&T Corp. 8,834,600 151,513
BellSouth Corp. 7,350,000 189,704
SBC Communications Inc. 4,200,000 104,580
Sprint Corp. - FON Group 10,507,000 187,970
Verizon Communications Inc. 2,393,000 90,312
799,344
UTILITIES
ELECTRIC UTILITIES - 4.69%
Ameren Corp. 300,000 13,116
Ameren Corp. 9.75% ACES convertible preferred 2005 1,200,000 units 32,580
American Electric Power Co., Inc. 3,700,000 112,628
Dominion Resources, Inc. 850,000 54,239
Exelon Corp. 750,000 50,205
FPL Group, Inc. 500,000 31,810
Progress Energy, Inc. 1,650,000 70,571
Southern Co. 2,700,000 77,652
TECO Energy, Inc. 4,244,100 54,027
Xcel Energy Inc. 4,945,000 82,730
MULTI-UTILITIES & UNREGULATED POWER - 1.25%
Duke Energy Corp. 4,800,000 101,088
Questar Corp. 1,500,000 53,205
733,851
MISCELLANEOUS - 2.48%
Other equity securities in initial period of acquisition 307,175
TOTAL EQUITY SECURITIES (cost: $8,524,340,000) 10,259,515
Principal Market
amount value
BONDS AND NOTES - 3.01% (000) (000)
TECHNOLOGY HARDWARE & EQUIPMENT - 0.22%
Motorola, Inc. 6.75% 2006 $ 25,000 26,564
UTILITIES - 0.09%
Virginia Electric and Power Co., Series 2002-A, 5.375% 2007 9,960 10,488
AGENCY PASS-THROUGH SECURITIES - 0.09%
Fannie Mae 6.00% 2017 (2) 10,970 11,459
U.S. TREASURY NOTES & BONDS - 1.03%
3.875% January 2009 (3) 113,516 127,310
U.S. AGENCY SECURITIES, NON PASS-THROUGH - 1.58%
Fannie Mae:
6.00% 2005 160,000 169,491
5.00% 2007 25,000 26,295
195,786
TOTAL BONDS AND NOTES (cost: $347,858,000) 371,607
Principal Market
amount value
SHORT-TERM SECURITIES - 14.05% (000) (000)
CORPORATE SHORT-TERM NOTES - 10.34%
American Express Credit Corp. 1.00%-1.02% due 5/3-6/14/2004 $ 45,000 44,961
Bank of America Corp. 1.03%-1.04% due 5/3-7/7/2004 105,000 104,856
ChevronTexaco Corp. 0.98%-0.99% due 6/9-6/28/2004 35,000 34,954
Citicorp 1.00%-1.04% due 5/4-6/25/2004 120,000 119,940
Clorox Co. 0.99% due 5/13/2004 20,000 19,993
Coca-Cola Co. 1.00% due 5/11-6/18/2004 140,700 140,595
DuPont (E.I.) de Nemours & Co. 0.99%-1.01% due 5/11-6/7/2004 121,600 121,546
Eli Lilly and Co. 0.98% due 5/7/2004 (4) 25,000 24,995
Gannett Co. 0.98%-1.00% due 5/6-5/21/2004 (4) 102,500 102,462
General Electric Capital Corp. 1.02% due 5/3/2004 3,200 3,200
General Electric Capital Services, Inc. 1.02%-1.03% due 5/19-6/21/2004 80,000 79,919
IBM Credit Corp. 1.01% due 6/10/2004 (4) 25,000 24,971
J.P. Morgan Chase & Co. 1.02%-1.03% due 5/7-6/21/2004 90,000 89,909
Kimberly-Clark Worldwide Inc. 0.98%-0.99% due 5/21-5/27/2004 (4) 35,000 34,979
Pfizer Inc 1.00%-1.01% due 5/10-6/28/2004 (4) 119,400 119,284
Procter & Gamble Co. 0.99%-1.00% due 5/13-6/7/2004 (4) 56,400 56,362
United Parcel Service Inc. 0.97% due 6/2/2004 25,000 24,977
Wal-Mart Stores Inc. 0.98%-1.01% due 5/25-6/22/2004 (4) 130,800 130,654
CERTIFICATES OF DEPOSIT - 1.85%
State Street Bank & Trust 1.04% due 6/21-7/12/2004 100,000 99,990
Wells Fargo & Co. 1.02% due 5/24-7/13/2004 128,800 128,796
FEDERAL AGENCY DISCOUNT NOTES - 1.05%
Fannie Mae 1.005%-1.01% due 6/2-6/30/2004 37,000 36,955
Federal Farm Credit Banks 0.97%-1.00% due 6/28-6/30/2004 50,000 49,922
Federal Home Loan Bank 0.98%-1.01% due 5/19-6/23/2004 43,300 43,264
U.S. TREASURIES - 0.81%
U.S. Treasury Bills 0.908%-0.94% due 5/13-6/17/2004 100,000 99,933
TOTAL SHORT-TERM SECURITIES (cost: $1,737,421,000) 1,737,417
TOTAL INVESTMENT SECURITIES (cost: $10,609,619,000) 12,368,539
Other assets less liabilities (5,852)
NET ASSETS $12,362,687
(1) This security has been authorized but has not yet been issued and does not
include the when-issued shares of Hospira.
(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) Restricted securities that can be resold only to institutional investors.
In practice, these securities are as liquid as unrestricted securities
in the portfolio.
See Notes to Financial Statements
EQUITY SECURITIES APPEARING IN THE PORTFOLIO SINCE OCTOBER 31, 2003
Kraft Foods
Marsh & McLennan Companies
McKesson
Sara Lee
U.S. Bancorp
Wal-Mart Stores
Walt Disney
Wyeth
EQUITY SECURITIES ELIMINATED FROM THE PORTFOLIO SINCE OCTOBER 31, 2003
Fluor
Honeywell International
TXU
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES unaudited
at April 30, 2004 (dollars and shares in thousands,
except per-share amounts)
ASSETS:
Investment securities at market (cost: $10,609,619) $12,368,539
Cash 308
Receivables for:
Sales of investments $27,997
Sales of fund's shares 38,352
Dividends and interest 27,217 93,566
12,462,413
LIABILITIES:
Payables for:
Purchases of investments 83,553
Repurchases of fund's shares 7,028
Investment advisory services 2,792
Services provided by affiliates 4,978
Deferred Directors' compensation 1,358
Other fees and expenses 17 99,726
NET ASSETS AT APRIL 30, 2004 $12,362,687
NET ASSETS CONSIST OF:
Capital paid in on shares of capital stock $10,661,695
Undistributed net investment income 17,997
Accumulated net realized loss (75,925)
Net unrealized appreciation 1,758,920
NET ASSETS AT APRIL 30, 2004 $12,362,687
TOTAL AUTHORIZED CAPITAL STOCK - 750,000 shares, $0.001 par value
SHARES NET ASSET
NET ASSETS OUTSTANDING VALUE PER SHARE
Class A $10,985,411 450,472 $24.39
Class B 412,264 17,015 24.23
Class C 387,667 16,024 24.19
Class F 252,624 10,389 24.32
Class 529-A 76,516 3,143 24.35
Class 529-B 19,821 816 24.28
Class 529-C 26,095 1,074 24.28
Class 529-E 4,471 184 24.29
Class 529-F 1,230 51 24.36
Class R-1 5,376 222 24.25
Class R-2 49,241 2,032 24.24
Class R-3 62,628 2,579 24.28
Class R-4 21,270 874 24.34
Class R-5 58,073 2,383 24.37
(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 $25.88 and $25.84,
respectively.
See Notes to Financial Statements
STATEMENT OF OPERATIONS unaudited
for the six months ended April 30, 2004 (dollars in thousands)
INVESTMENT INCOME:
Income:
Dividends (net of non-U.S. withholding tax of $175) $125,490
Interest 22,226 $147,716
Fees and expenses:
Investment advisory services 16,135
Distribution services 16,691
Transfer agent services 4,280
Administrative services 864
Reports to shareholders 120
Registration statement and prospectus 368
Postage, stationery and supplies 545
Directors' compensation 267
Auditing and legal 67
Custodian 56
State and local taxes 96
Other 62
Total expenses before reimbursement 39,551
Reimbursement of expenses 58 39,493
Net investment income 108,223
NET REALIZED LOSS AND UNREALIZED APPRECIATION ON INVESTMENTS:
Net realized loss on investments (66,894)
Net unrealized appreciation on investments 677,239
Net realized loss and unrealized appreciation on investments 610,345
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $718,568
See Notes to Financial Statements
STATEMENT OF CHANGES IN NET ASSETS (dollars in thousands)
SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
2004* 2003
OPERATIONS:
Net investment income $108,223 $207,510
Net realized (loss) gain on investments (66,894) 58,818
Net unrealized appreciation on investments 677,239 1,374,180
Net increase in net assets
resulting from operations 718,568 1,640,508
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS:
Dividends from net investment income (112,734) (219,640)
Distributions from net realized gain
on investments (42,042) (126,094)
Total dividends and distributions paid
to shareholders (154,776) (345,734)
CAPITAL SHARE TRANSACTIONS 1,107,722 1,221,104
TOTAL INCREASE IN NET ASSETS 1,671,514 2,515,878
NET ASSETS:
Beginning of period 10,691,173 8,175,295
End of period (including undistributed
net investment income: $17,997 and $22,508,
respectively) $12,362,687 $10,691,173
*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 convert to
for redemptions within classes A and 529-A,
six years of purchase respectively, after eight years
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Class C None 1% for redemptions within Class C converts to Class F
one year of purchase 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 on the day the securities are being valued 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 an
independent pricing service, when such prices are available. However,
where the investment adviser deems it appropriate, such securities
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 fair valued as determined in good faith
by authority of the fund's Board of Directors. Various factors may be
reviewed in order to make a good faith determination of a security's
fair value. These factors include, but are not limited to, the type
and cost of the security; contractual or legal restrictions on resale
of the security; relevant financial or business developments of the
issuer; actively traded similar or related securities; conversion or
exchange rights on the security; related corporate actions;
significant events occurring after the close of trading in the
security; and changes in overall market conditions.
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; deferred expenses; cost of investments
sold; and paydowns on investments. 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, 2004, the cost of
investment securities for federal income tax purposes was $10,616,974,000.
As of April 30, 2004, the components of distributable earnings on a tax basis
were as follows:
(dollars in thousands)
Undistributed net investment income $ 19,356
Undistributed short-term gains 5,983
Accumulated long-term capital losses (73,807)
Gross unrealized appreciation on investment securities 2,053,528
Gross unrealized depreciation on investment securities (301,963)
The tax character of distributions paid to shareholders was as follows (dollars
in thousands):
Six months ended April 30, 2004 Year ended October 31, 2003
Long-term Total Long-term Total
Ordinary income capital gains distributions paid Ordinary income capital gains distributions paid
Share class
Class A $ 103,400 $ 38,063 $ 141,463 $ 207,630 $ 119,662 $ 327,292
Class B 2,531 1,279 3,810 3,782 2,525 6,307
Class C 2,178 1,110 3,288 2,785 1,735 4,520
Class F 2,133 683 2,816 2,439 914 3,353
Class 529-A 662 212 874 808 329 1,137
Class 529-B 103 57 160 136 84 220
Class 529-C 129 69 198 158 96 254
Class 529-E 32 12 44 38 14 52
Class 529-F 9 3 12 7 1 8
Class R-1 30 16 46 25 3 28
Class R-2 276 133 409 247 52 299
Class R-3 408 142 550 293 43 336
Class R-4 189 63 252 101 4 105
Class R-5 654 200 854 1,191 632 1,823
Total $ 112,734 $ 42,042 $ 154,776 $ 219,640 $ 126,094 $ 345,734
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. At the beginning of the
period, these fees were 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. The Board of Directors approved
an amended agreement effective April 1, 2004, continuing the series of rates to
include an additional annual rate of 0.230% on month-end net assets in excess of
$13 billion. For the six months ended April 30, 2004, the investment advisory
services fee was $16,135,000, which was equivalent to an annualized rate of
0.274% 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 on the following
page. In some cases, the Board of Directors has approved expense
amounts lower than plan limits. 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, 2004, there were no unreimbursed expenses subject to
reimbursement for classes A or 529-A.
------------------------------------------------ ----------------------------- -----------------------------
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
------------------------------------------------ ----------------------------- -----------------------------
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 and R-3, 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 on the previous page for the
six months ended April 30, 2004, 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 $12,393 $4,109 Not applicable Not applicable Not applicable
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class B 1,825 171 Not applicable Not applicable Not applicable
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class C 1,641 Included $246 $39 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class F 263 Included 158 15 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class 529-A 47 Included 48 4 $ 32
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class 529-B 86 Included 13 4 9
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class 529-C 107 Included 16 4 11
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class 529-E 9 Included 3 -* 2
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class 529-F 1 Included 1 -* -*
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class R-1 24 Included 4 2 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class R-2 154 Included 31 112 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class R-3 118 Included 35 32 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class R-4 23 Included 14 1 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class R-5 Not applicable Included 27 1 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Total $16,691 $4,280 $596 $214 $54
--------------------------------------------------------------------------------------------------------------
* 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' compensation in the accompanying financial statements
includes $135,000 in current fees (either paid in cash or deferred) and a net
increase of $132,000 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 SALES(1) DIVIDENDS AND DISTRIBUTIONS
AMOUNT SHARES AMOUNT SHARES
SIX MONTHS ENDED APRIL 30, 2004
Class A $ 1,133,480 46,492 $ 129,362 5,430
Class B 92,416 3,819 3,664 155
Class C 122,895 5,082 3,124 132
Class F 96,054 3,950 2,578 108
Class 529-A 23,227 955 874 37
Class 529-B 5,337 220 160 7
Class 529-C 9,209 379 198 8
Class 529-E 1,356 56 44 2
Class 529-F 530 22 12 1
Class R-1 1,839 76 46 2
Class R-2 18,702 770 409 17
Class R-3 35,003 1,439 536 22
Class R-4 7,064 291 251 10
Class R-5 8,687 356 479 20
Total net increase
(decrease) $ 1,555,799 63,907 $ 141,737 5,951
YEAR ENDED OCTOBER 31, 2003
Class A $ 1,409,403 66,442 $ 299,136 14,284
Class B 144,921 6,868 6,063 290
Class C 156,020 7,345 4,306 205
Class F 128,330 6,048 3,041 143
Class 529-A 27,278 1,286 1,137 54
Class 529-B 7,597 360 220 10
Class 529-C 9,213 435 255 12
Class 529-E 1,967 94 52 2
Class 529-F 611 28 7 -*
Class R-1 4,054 187 28 1
Class R-2 30,736 1,453 299 14
Class R-3 31,866 1,504 334 15
Class R-4 15,321 700 105 5
Class R-5 6,922 329 955 46
Total net increase
(decrease) $ 1,974,239 93,079 $ 315,938 15,081
REPURCHASES(1) NET INCREASE
AMOUNT SHARES AMOUNT SHARES
SHARE CLASS
$ (507,222) (20,871) $ 755,620 31,051
SIX MONTHS ENDED APRIL 30, 2004 (15,104) (625) 80,976 3,349
Class A (19,254) (796) 106,765 4,418
Class B (27,184) (1,132) 71,448 2,926
Class C (1,667) (68) 22,434 924
Class F (307) (13) 5,190 214
Class 529-A (639) (26) 8,768 361
Class 529-B (104) (5) 1,296 53
Class 529-C (33) (1) 509 22
Class 529-E (611) (25) 1,274 53
Class 529-F (3,808) (156) 15,303 631
Class R-1 (6,136) (253) 29,403 1,208
Class R-2 (2,416) (99) 4,899 202
Class R-3 (5,329) (223) 3,837 153
Class R-4
Class R-5 $ (589,814) (24,293) $ 1,107,722 45,565
Total net increase
(decrease)
$ (970,485) (46,474) $ 738,054 34,252
YEAR ENDED OCTOBER 31, 2003 (25,604) (1,231) 125,380 5,927
Class A (26,105) (1,253) 134,221 6,297
Class B (30,043) (1,418) 101,328 4,773
Class C (1,654) (78) 26,761 1,262
Class F (296) (14) 7,521 356
Class 529-A (453) (22) 9,015 425
Class 529-B (98) (4) 1,921 92
Class 529-C (4) -* 614 28
Class 529-E (575) (25) 3,507 163
Class 529-F (4,041) (191) 26,994 1,276
Class R-1 (4,763) (223) 27,437 1,296
Class R-2 (955) (44) 14,471 661
Class R-3 (3,997) (190) 3,880 185
Class R-4
Class R-5 $ (1,069,073) (51,167) $ 1,221,104 56,993
Total net increase
(decrease)
* Amount less than one thousand.
(1) 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, 2004, the total value of
restricted securities was $493,707,000, which represented 3.99% 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 $1,801,026,000 and $1,035,008,000, respectively, during the six
months ended April 30, 2004.
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, 2004, the custodian fee of $56,000 included $3,000
that was offset by this reduction, rather than paid in cash.
FINANCIAL HIGHLIGHTS (1)
Income (loss) from investment operations(2)
Net
Net asset gains (losses)
value, Net on securities Total from
beginning investment (both realized investment
of period income and unrealized) operations
CLASS A:
Six months ended 4/30/2004 (5) $23.17 $.23 $1.32 $1.55
Year ended 10/31/2003 20.20 .49 3.31 3.80
Year ended 10/31/2002 23.22 .49 (2.29) (1.80)
Year ended 10/31/2001 24.36 .65 .19 .84
Year ended 10/31/2000 30.09 .80 (.74) .06
Year ended 10/31/1999 31.18 .82 1.78 2.60
CLASS B:
Six months ended 4/30/2004 (5) 23.04 .14 1.31 1.45
Year ended 10/31/2003 20.11 .32 3.28 3.60
Year ended 10/31/2002 23.13 .32 (2.28) (1.96)
Year ended 10/31/2001 24.30 .44 .21 .65
Period from 3/15/2000 to 10/31/2000 21.78 .37 2.46 2.83
CLASS C:
Six months ended 4/30/2004 (5) 23.01 .12 1.31 1.43
Year ended 10/31/2003 20.09 .30 3.28 3.58
Year ended 10/31/2002 23.12 .30 (2.28) (1.98)
Period from 3/15/2001 to 10/31/2001 23.48 .24 (.35) (.11)
CLASS F:
Six months ended 4/30/2004 (5) 23.12 .22 1.32 1.54
Year ended 10/31/2003 20.17 .46 3.30 3.76
Year ended 10/31/2002 23.20 .47 (2.30) (1.83)
Period from 3/15/2001 to 10/31/2001 23.54 .34 (.35) (.01)
CLASS 529-A:
Six months ended 4/30/2004 (5) 23.15 .22 1.32 1.54
Year ended 10/31/2003 20.20 .47 3.31 3.78
Period from 2/19/2002 to 10/31/2002 23.31 .34 (3.07) (2.73)
CLASS 529-B:
Six months ended 4/30/2004 (5) 23.09 .11 1.32 1.43
Year ended 10/31/2003 20.16 .27 3.30 3.57
Period from 2/19/2002 to 10/31/2002 23.31 .20 (3.06) (2.86)
CLASS 529-C:
Six months ended 4/30/2004 (5) 23.09 .11 1.32 1.43
Year ended 10/31/2003 20.16 .27 3.30 3.57
Period from 2/20/2002 to 10/31/2002 23.54 .21 (3.30) (3.09)
CLASS 529-E:
Six months ended 4/30/2004 (5) 23.10 .18 1.31 1.49
Year ended 10/31/2003 20.16 .38 3.30 3.68
Period from 3/7/2002 to 10/31/2002 24.93 .27 (4.67) (4.40)
CLASS 529-F:
Six months ended 4/30/2004 (5) 23.16 .21 1.32 1.53
Year ended 10/31/2003 20.22 .43 3.32 3.75
Period from 9/17/2002 to 10/31/2002 20.63 .05 (.34) (.29)
FINANCIAL HIGHLIGHTS (1) (continued)
Income (loss) from investment operations
Net
Net asset gains(losses)
value, Net on securities Total from
beginning investment (both realized investment
of period income and unrealized) operations
CLASS R-1:
Six months ended 4/30/2004 (5) $23.06 $.12 $1.32 $1.44
Year ended 10/31/2003 20.17 .26 3.33 3.59
Period from 6/11/2002 to 10/31/2002 23.56 .12 (3.29) (3.17)
CLASS R-2:
Six months ended 4/30/2004 (5) 23.05 .13 1.31 1.44
Year ended 10/31/2003 20.17 .29 3.28 3.57
Period from 5/31/2002 to 10/31/2002 24.35 .14 (4.10) (3.96)
CLASS R-3:
Six months ended 4/30/2004 (5) 23.09 .17 1.32 1.49
Year ended 10/31/2003 20.18 .37 3.30 3.67
Period from 6/6/2002 to 10/31/2002 23.70 .17 (3.44) (3.27)
CLASS R-4:
Six months ended 4/30/2004 (5) 23.14 .22 1.32 1.54
Year ended 10/31/2003 20.19 .44 3.32 3.76
Period from 6/27/2002 to 10/31/2002 22.95 .17 (2.79) (2.62)
CLASS R-5:
Six months ended 4/30/2004 (5) 23.17 .26 1.32 1.58
Year ended 10/31/2003 20.21 .54 3.29 3.83
Period from 5/15/2002 to 10/31/2002 24.66 .26 (4.43) (4.17)
FINANCIAL HIGHLIGHTS (1)
Dividends and distributions
Dividends
(from net Distributions Total Net asset
investment (from capital dividends and value, end
income) gains) distributions of period
CLASS A:
Six months ended 4/30/2004 (5) $(.24) $(.09) $(.33) $24.39
Year ended 10/31/2003 (.52) (.31) (.83) 23.17
Year ended 10/31/2002 (.57) (.65) (1.22) 20.20
Year ended 10/31/2001 (.72) (1.26) (1.98) 23.22
Year ended 10/31/2000 (.74) (5.05) (5.79) 24.36
Year ended 10/31/1999 (.76) (2.93) (3.69) 30.09
CLASS B:
Six months ended 4/30/2004 (5) (.17) (.09) (.26) 24.23
Year ended 10/31/2003 (.36) (.31) (.67) 23.04
Year ended 10/31/2002 (.41) (.65) (1.06) 20.11
Year ended 10/31/2001 (.56) (1.26) (1.82) 23.13
Period from 3/15/2000 to 10/31/2000 (.31) - (.31) 24.30
CLASS C:
Six months ended 4/30/2004 (5) (.16) (.09) (.25) 24.19
Year ended 10/31/2003 (.35) (.31) (.66) 23.01
Year ended 10/31/2002 (.40) (.65) (1.05) 20.09
Period from 3/15/2001 to 10/31/2001 (.25) - (.25) 23.12
CLASS F:
Six months ended 4/30/2004 (5) (.25) (.09) (.34) 24.32
Year ended 10/31/2003 (.50) (.31) (.81) 23.12
Year ended 10/31/2002 (.55) (.65) (1.20) 20.17
Period from 3/15/2001 to 10/31/2001 (.33) - (.33) 23.20
CLASS 529-A:
Six months ended 4/30/2004 (5) (.25) (.09) (.34) 24.35
Year ended 10/31/2003 (.52) (.31) (.83) 23.15
Period from 2/19/2002 to 10/31/2002 (.38) - (.38) 20.20
CLASS 529-B:
Six months ended 4/30/2004 (5) (.15) (.09) (.24) 24.28
Year ended 10/31/2003 (.33) (.31) (.64) 23.09
Period from 2/19/2002 to 10/31/2002 (.29) - (.29) 20.16
CLASS 529-C:
Six months ended 4/30/2004 (5) (.15) (.09) (.24) 24.28
Year ended 10/31/2003 (.33) (.31) (.64) 23.09
Period from 2/20/2002 to 10/31/2002 (.29) - (.29) 20.16
CLASS 529-E:
Six months ended 4/30/2004 (5) (.21) (.09) (.30) 24.29
Year ended 10/31/2003 (.43) (.31) (.74) 23.10
Period from 3/7/2002 to 10/31/2002 (.37) - (.37) 20.16
CLASS 529-F:
Six months ended 4/30/2004 (5) (.24) (.09) (.33) 24.36
Year ended 10/31/2003 (.50) (.31) (.81) 23.16
Period from 9/17/2002 to 10/31/2002 (.12) - (.12) 20.22
FINANCIAL HIGHLIGHTS (1) (continued)
Dividends and distributions
Dividends
(from net Distributions Total Net asset
investment (from capital dividends and value, end
income) gains) distributions of period
CLASS R-1:
Six months ended 4/30/2004 (5) $(.16) $(.09) $(.25) $24.25
Year ended 10/31/2003 (.39) (.31) (.70) 23.06
Period from 6/11/2002 to 10/31/2002 (.22) - (.22) 20.17
CLASS R-2:
Six months ended 4/30/2004 (5) (.16) (.09) (.25) 24.24
Year ended 10/31/2003 (.38) (.31) (.69) 23.05
Period from 5/31/2002 to 10/31/2002 (.22) - (.22) 20.17
CLASS R-3:
Six months ended 4/30/2004 (5) (.21) (.09) (.30) 24.28
Year ended 10/31/2003 (.45) (.31) (.76) 23.09
Period from 6/6/2002 to 10/31/2002 (.25) - (.25) 20.18
CLASS R-4:
Six months ended 4/30/2004 (5) (.25) (.09) (.34) 24.34
Year ended 10/31/2003 (.50) (.31) (.81) 23.14
Period from 6/27/2002 to 10/31/2002 (.14) - (.14) 20.19
CLASS R-5:
Six months ended 4/30/2004 (5) (.29) (.09) (.38) 24.37
Year ended 10/31/2003 (.56) (.31) (.87) 23.17
Period from 5/15/2002 to 10/31/2002 (.28) - (.28) 20.21
FINANCIAL HIGHLIGHTS (1)
Ratio of expenses Ratio of expenses Ratio of
Net assets, to average net to average net net income
Total end of period assets before assets after to average
return (3) (in millions) reimbursement reimbursement(4) net assets
CLASS A:
Six months ended 4/30/2004 (5) 6.73% $10,986 .62% (6) .62% (6) 1.92% (6)
Year ended 10/31/2003 19.31 9,716 .62 .62 2.32
Year ended 10/31/2002 (8.42) 7,782 .60 .60 2.15
Year ended 10/31/2001 3.71 8,399 .59 .59 2.68
Year ended 10/31/2000 1.21 8,343 .59 .59 3.29
Year ended 10/31/1999 9.00 10,421 .57 .57 2.67
CLASS B:
Six months ended 4/30/2004 (5) 6.32 412 1.40 (6) 1.40 (6) 1.13 (6)
Year ended 10/31/2003 18.32 315 1.41 1.41 1.49
Year ended 10/31/2002 (9.11) 156 1.40 1.40 1.40
Year ended 10/31/2001 2.88 59 1.38 1.38 1.80
Period from 3/15/2000 to 10/31/2000 13.07 10 1.38 (6) 1.38 (6) 2.33 (6)
CLASS C:
Six months ended 4/30/2004 (5) 6.25 388 1.48 (6) 1.48 (6) 1.04 (6)
Year ended 10/31/2003 18.23 267 1.49 1.49 1.39
Year ended 10/31/2002 (9.20) 107 1.48 1.48 1.34
Period from 3/15/2001 to 10/31/2001 (.48) 28 1.48 (6) 1.48 (6) 1.64 (6)
CLASS F:
Six months ended 4/30/2004 (5) 6.69 253 .71 (6) .71 (6) 1.80 (6)
Year ended 10/31/2003 19.14 172 .72 .72 2.14
Year ended 10/31/2002 (8.57) 54 .75 .75 2.08
Period from 3/15/2001 to 10/31/2001 (.05) 12 .76 (6) .76 (6) 2.30 (6)
CLASS 529-A:
Six months ended 4/30/2004 (5) 6.70 77 .71 (6) .71 (6) 1.80 (6)
Year ended 10/31/2003 19.19 51 .67 .67 2.22
Period from 2/19/2002 to 10/31/2002 (11.88) 19 .70 (6) .70 (6) 2.25 (6)
CLASS 529-B:
Six months ended 4/30/2004 (5) 6.20 20 1.60 (6) 1.60 (6) .92 (6)
Year ended 10/31/2003 18.07 14 1.61 1.61 1.27
Period from 2/19/2002 to 10/31/2002 (12.40) 5 1.60 (6) 1.60 (6) 1.36 (6)
CLASS 529-C:
Six months ended 4/30/2004 (5) 6.21 26 1.59 (6) 1.59 (6) .92 (6)
Year ended 10/31/2003 18.09 16 1.60 1.60 1.28
Period from 2/20/2002 to 10/31/2002 (13.25) 6 1.59 (6) 1.59 (6) 1.38 (6)
CLASS 529-E:
Six months ended 4/30/2004 (5) 6.47 4 1.07 (6) 1.07 (6) 1.45 (6)
Year ended 10/31/2003 18.72 3 1.07 1.07 1.80
Period from 3/7/2002 to 10/31/2002 (17.78) 1 1.05 (6) 1.05 (6) 1.95 (6)
CLASS 529-F:
Six months ended 4/30/2004 (5) 6.64 1 .82 (6) .82 (6) 1.69 (6)
Year ended 10/31/2003 19.03 1 .82 .82 1.99
Period from 9/17/2002 to 10/31/2002 (1.42) - (7) .09 .09 .26
FINANCIAL HIGHLIGHTS (1) (continued)
Ratio of expenses Ratio of expenses Ratio of
Net assets, to average net to average net net income
Total end of period asets before asets after to average
return (in millions) reimbursements reimbursements(4) net assets
CLASS R-1:
Six months ended 4/30/2004 (5) 6.26% $5 1.52% (6) 1.50% (6) 1.02% (6)
Year ended 10/31/2003 18.19 4 1.65 1.50 1.18
Period from 6/11/2002 to 10/31/2002 (13.50) - (7) 1.24 .58 .60
CLASS R-2:
Six months ended 4/30/2004 (5) 6.29 49 1.74 (6) 1.47 (6) 1.04 (6)
Year ended 10/31/2003 18.10 32 1.86 1.47 1.35
Period from 5/31/2002 to 10/31/2002 (16.31) 3 .75 .61 .67
CLASS R-3:
Six months ended 4/30/2004 (5) 6.48 63 1.08 (6) 1.08 (6) 1.41 (6)
Year ended 10/31/2003 18.64 32 1.14 1.08 1.72
Period from 6/6/2002 to 10/31/2002 (13.87) 2 .53 .43 .83
CLASS R-4:
Six months ended 4/30/2004 (5) 6.69 21 .71 (6) .71 (6) 1.81 (6)
Year ended 10/31/2003 19.14 16 .73 .72 2.03
Period from 6/27/2002 to 10/31/2002 (11.43) - (7) .53 .25 .84
CLASS R-5:
Six months ended 4/30/2004 (5) 6.84 58 .40 (6) .40 (6) 2.14 (6)
Year ended 10/31/2003 19.50 52 .41 .41 2.53
Period from 5/15/2002 to 10/31/2002 (16.98) 41 .18 .18 1.22
Six months ended
April 30, Year ended October 31
2004(5) 2003 2002 2001 2000 1999
Portfolio turnover rate for all classes of shares 10% 24% 31% 45% 29% 42%
(1) Based on operations for the period shown (unless otherwise noted) and,
accordingly, may not be representative of a full year.
(2) Year ended 1999 is based on shares outstanding on the last day of the year;
all other periods are based on average shares outstanding.
(3) Total returns exclude all sales charges, including contingent deferred
sales charges.
(4) The ratios in this column reflect the impact, if any, of certain
reimbursements and payments from CRMC. During the start-up period for the
retirement plan share classes (except Class R-5), CRMC voluntarily agreed
to pay a portion of the fees related to transfer agent services.
(5) Unaudited.
(6) Annualized.
(7) Amount less than $1 million.
See Notes to Financial Statements
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 (and
aggregated investments) of $25,000 or more. Other share classes, which are
generally not available for certain employer-sponsored retirement plans, have no
up-front sales charges but are subject to additional annual expenses and fees.
Annualized expenses for Class B shares were 0.78 percentage points 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 annualized expenses 0.86 percentage points
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
annualized expenses (by 0.09 percentage points) 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.
INVESTORS SHOULD CAREFULLY CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES
AND EXPENSES OF THE AMERICAN FUNDS AND COLLEGEAMERICA. THIS AND OTHER IMPORTANT
INFORMATION IS CONTAINED IN THE FUND'S PROSPECTUS, WHICH CAN BE OBTAINED FROM
YOUR FINANCIAL ADVISER AND SHOULD BE READ CAREFULLY BEFORE INVESTING. YOU MAY
ALSO CALL AMERICAN FUNDS SERVICE COMPANY AT 800/421-0180 OR VISIT THE AMERICAN
FUNDS WEBSITE AT AMERICANFUNDS.COM.
"AMERICAN FUNDS PROXY VOTING GUIDELINES" -- WHICH DESCRIBES HOW WE VOTE PROXIES
RELATING TO PORTFOLIO SECURITIES -- IS AVAILABLE UPON REQUEST, FREE OF CHARGE,
BY CALLING AMERICAN FUNDS SERVICE COMPANY, VISITING THE AMERICAN FUNDS WEBSITE
OR ACCESSING THE U.S. SECURITIES AND EXCHANGE COMMISSION WEBSITE AT WWW.SEC.GOV.
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, 2004, this report must be accompanied by an American Funds statistical
update for the most recently completed calendar quarter.
[logo - American Funds(R)]
The right choice for the long term(R)
WHAT MAKES AMERICAN FUNDS DIFFERENT?
For more than 70 years, we have followed a consistent philosophy that we firmly
believe is in our investors' best interests. The range of opportunities offered
by our family of just 29 carefully conceived, broadly diversified funds has
attracted over 25 million shareholder accounts.
OUR UNIQUE COMBINATION OF STRENGTHS INCLUDES THESE FIVE FACTORS:
o A LONG-TERM, VALUE-ORIENTED APPROACH
Rather than follow fads, we pursue a consistent strategy, focusing on each
investment's long-term potential.
o AN UNPARALLELED GLOBAL RESEARCH EFFORT
American Funds draws on one of the industry's most globally integrated
research networks.
o THE MULTIPLE PORTFOLIO COUNSELOR SYSTEM
Every American Fund is divided among a number of portfolio counselors. Each
takes responsibility for a portion independently, within each fund's
objectives; in most cases, research analysts manage a portion as well. Over
time this method has contributed to a consistency of results and continuity
of management.
o EXPERIENCED INVESTMENT PROFESSIONALS
The recent market decline was not the first for most of the portfolio
counselors who serve the American Funds. Nearly 70% of them were in the
investment business before the sharp market decline of 1987.
o A COMMITMENT TO LOW OPERATING EXPENSES
American Funds' operating expenses are among the lowest in the mutual fund
industry. Our portfolio turnover rates are low as well, keeping transaction
costs and tax consequences contained.
29 MUTUAL FUNDS, CONSISTENT PHILOSOPHY, CONSISTENT RESULTS
o GROWTH FUNDS
AMCAP Fund(R)
EuroPacific Growth Fund(R)
The Growth Fund of America(R)
The New Economy Fund(R)
New Perspective Fund(R)
New World Fund(SM)
SMALLCAP World Fund(R)
o GROWTH-AND-INCOME FUNDS
> American Mutual Fund(R)
Capital World Growth and Income Fund(SM)
Fundamental Investors(SM)
The Investment Company of America(R)
Washington Mutual Investors Fund(SM)
o EQUITY-INCOME FUNDS
Capital Income Builder(R)
The Income Fund of America(R)
o BALANCED FUND
American Balanced Fund(R)
o BOND FUNDS
American High-Income Trust(SM)
The Bond Fund of America(SM)
Capital World Bond Fund(R)
Intermediate Bond Fund of America(R)
U.S. Government Securities Fund(SM)
o TAX-EXEMPT BOND FUNDS
American High-Income Municipal Bond Fund(R)
Limited Term Tax-Exempt Bond Fund of America(SM)
The Tax-Exempt Bond Fund of America(R)
STATE-SPECIFIC TAX-EXEMPT FUNDS
The Tax-Exempt Fund of California(R)
The Tax-Exempt Fund of Maryland(R)
The Tax-Exempt Fund of Virginia(R)
o MONEY MARKET FUNDS
The Cash Management Trust of America(R)
The Tax-Exempt Money Fund of America(SM)
The U.S. Treasury Money Fund of America(SM)
THE CAPITAL GROUP COMPANIES
American Funds
Capital Research and Management
Capital International
Capital Guardian
Capital Bank and Trust
Lit. No. MFGESR-903-0604P
Litho in USA BC/L/8079-S79
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
Not applicable for filing of Semiannual Reports to Shareholders.
ITEM 5 - Audit Committee of Listed Registrants
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 - Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board of Directors since the registrant
last submitted a proxy statement to its shareholders. The procedures are as
follows. The registrant has a nominating committee comprised solely of persons
who are not considered "interested persons" of the registrant within the meaning
of the Investment Company Act of 1940. The committee periodically reviews such
issues as the Board's composition, responsibilities, committees, compensation
and other relevant issues, and recommends any appropriate changes to the full
Board of Directors. While the committee normally is able to identify from its
own resources an ample number of qualified candidates, it will consider
shareholder suggestions of persons to be considered as nominees to fill future
vacancies on the Board. Such suggestions must be sent in writing to the
nominating committee of the registrant, c/o the registrant's Secretary, and must
be accompanied by complete biographical and occupational data on the prospective
nominee, along with a written consent of the prospective nominee for
consideration of his or her name by the nominating committee.
ITEM 10 - 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 changes in the Registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of
1940) that occurred during the Registrant's last fiscal half-year (the
Registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
ITEM 11 - Exhibits
(a) The 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 8, 2004
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 8, 2004
By /s/ Jeffrey P. Regal
----------------------------------------------------
Jeffrey P. Regal, Treasurer
Date: July 8, 2004