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: 811-604
Washington Mutual Investors Fund, Inc.
(Exact Name of Registrant as specified in charter)
1101 Vermont Avenue, NW
Washington, DC 20005
(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 842-5665
Date of fiscal year end: April 30, 2005
Date of reporting period: October 31, 2004
Howard L. Kitzmiller
Secretary
Washington Mutual Investors Fund, Inc.
1101 Vermont Avenue, NW
Washington, DC 20005
(name and address of agent for service)
Copies to:
JULIAN E. MARKHAM, Esq.
THOMPSON, O'DONNELL, MARKHAM, NORTON & HANNON
1212 New York Avenue, Suite 1000, N.W.
Washington, D.C. 20005
(Counsel for the Registrant)
ITEM 1 - Reports to Stockholders
(logo: American Funds(R))
The right choice for the long term(R)
Washington Mutual Investors Fund
(picture: The Birth of Old Glory)
Semi-annual report for the six months ended October 31, 2004
Washington Mutual Investors Fund(SM) seeks to provide income and growth of
principal through investments in quality common stocks.
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.
Figures shown 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. 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. 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.
Here are the average annual total returns on a $1,000 investment with all
distributions reinvested for periods ended September 30, 2004 (the most recent
calendar quarter):
Class A shares
1 year 5 years 10 years
Reflecting 5.75% maximum sales charge
Average annual total return -- +3.30% +12.09%
Cumulative total return +9.74% +17.61% +213.14%
The Fund's investment adviser and business manager are waiving 5% of their
management fees for the period September 1, 2004 through August 31, 2005. Over
that one-year period, the fee waivers will amount to approximately a two basis
point reduction in fund expenses. Without the waivers the returns of the Fund
shown in this report would have been slightly lower.
Results for other share classes can be found on page 24. Please see the inside
back cover for important information about other share classes.
Cover: The Birth of Old Glory (detail) by Edward Percy Moran (1917).
(picture: The Birth of Old Glory)
Fellow shareholders:
The U.S. economy continued to recover at a moderate pace during the six months
ended October 31, 2004. Washington Mutual Investors Fund participated in the
economic recovery with a modest increase of 3.0% a share, with dividends
reinvested. The Fund's result matched the 3.0% total return of the unmanaged
Standard & Poor's 500 Composite Index, a broad measure of the U.S. stock market.
For the past 12 months, your Fund's total return, with distributions reinvested,
was 10.9%, outpacing the S&P 500's total return of 9.4%. Over longer periods,
your Fund has produced even stronger relative returns, which are as follows:
Average annual total returns
1 year 5 years 10 years Lifetime/1/
Washington Mutual +10.9% +3.4% +12.6% +12.8%
S&P 500 +9.4% -2.2% +11.0% +11.3%
/1/ Since the Fund's inception on July 31, 1952.
Although the Fund's overall return was modest for the six months ended October
31, some industries showed strong gains during the period. Bolstered by sharply
rising oil and gas prices, energy stocks -- which made up 9.4% of the Fund's
assets at the end of the period -- made the greatest contribution. The Fund
benefited from its substantial holdings of ChevronTexaco and Exxon Mobil.
Defense stocks gained, reflecting increased government spending for the global
war on terrorism. Pharmaceutical stocks generally lagged the market during this
period because of adverse publicity involving specific drugs, which were
withdrawn from the market.
The Federal Reserve Board has signaled its intention to increase the federal
funds rate at a measured pace to what it terms a neutral level. Since June 30,
the Fed has raised the rate four times to its current level of 2.0%. In
contrast, long-term interest rates have generally declined; the rate on 10-year
government notes is around the four percent level. Equity prices are usually not
greatly affected until the final stages of a series of expected interest rate
increases.
Dividends have always been important to your Fund, so it is a pleasure to report
that in the six months under review, 45 companies in Washington Mutual's
portfolio -- 28% of total holdings -- declared dividend increases. As a result
of this trend, Fund Directors were able to increase the quarterly dividend on
the Fund's Class A shares paid on September 20, 2004, to 14 cents a share from
13.5 cents. The Fund's December dividend income will be favorably affected by
the receipt of a special dividend of $3.00 a share on its holdings of 27.9
million shares of Microsoft. As a result of the Microsoft special dividend, the
Fund also expects to pay a special dividend in December, in addition to its
regular quarterly dividend of 14 cents a share.
As of October 31, your Fund's total assets were $71.0 billion, the highest level
ever reported in the Fund's 52-year history. We believe that our investment
management approach -- the multiple portfolio counselor system -- is an
effective way to manage the Fund's sizable holdings. Under this system, the
Fund's assets are divided into portions. Each of the Fund's eight portfolio
counselors manages a portion independently; a ninth portion is managed by the
Fund's research analysts, who are specialists in specific industries. All
investment decisions are made within the standards established by Washington
Mutual's objective, policies and restrictions.
We cordially welcome our new shareholders and express appreciation for the
loyalty of our shareholder family, which now consists of more than 3.6 million
accounts.
We will be pleased to hear your comments and questions at any time.
Cordially,
(signature) (signature) (signature)
James H. Lemon, Jr., Harry J. Lister, Jeffrey L. Steele,
Chairman of the Board Vice Chairman of the Board President of the Fund
December 10, 2004
For current information about the Fund, visit americanfunds.com.
Summary investment portfolio October 31, 2004 unaudited
Beginning with this report, a summary portfolio, approved under rules adopted by
the Securities and Exchange Commission this year, will replace the complete
listing of portfolio holdings used in previous shareholder reports. This summary
portfolio is designed to streamline the report and help investors better focus
on a fund's principal holdings. The schedule includes each of the Fund's 50
largest holdings and investments of any issuer for which the total value of all
holdings in that issuer exceeds 1% of the Fund's net assets. A complete schedule
of portfolio holdings is available upon request, free of charge, by calling
American Funds Service Company at 800/421-0180, or accessing the U.S. Securities
and Exchange Commission website at www.sec.gov.
Percent of
Five largest industry sectors net assets
Financials 22.00%
Industrials 11.44
Health care 10.46
Energy 9.43
Consumer staples 9.13
Percent of
Ten largest holdings net assets
JPMorgan Chase 3.21%
Exxon Mobil 2.81
ChevronTexaco 2.76
General Electric 2.67
Bank of America 2.40
Fannie Mae 2.20
Bristol-Myers Squibb 2.14
SBC Communications 1.98
Wells Fargo 1.94
BellSouth 1.63
Market Value Percent of
Common stocks -- 96.51% Shares (000) net assets
Energy -- 9.43%
ChevronTexaco Corp. 36,881,000 $ 1,956,906 2.76%
ConocoPhillips 8,307,750 700,426 .99
Exxon Mobil Corp. 40,576,600 1,997,180 2.81
Marathon Oil Corp. 13,450,000 512,580 .72
Other securities 1,524,592 2.15
6,691,684 9.43
Materials -- 4.52%
Alcoa Inc. 15,250,000 495,625 .70
International Paper Co. 20,700,000 797,157 1.12
Weyerhaeuser Co. 10,350,000 648,324 .91
Other securities 1,269,060 1.79
3,210,166 4.52
Industrials -- 11.44%
Boeing Co. 10,700,000 533,930 .75
General Electric Co. 55,600,000 1,897,072 2.67
Northrop Grumman Corp. 11,050,000 571,838 .81
United Technologies Corp. 6,800,000 631,176 .89
Other securities 4,486,739 6.32
8,120,755 11.44
Consumer discretionary -- 8.32%
General Motors Corp. 26,313,400 1,014,382 1.43
Limited Brands, Inc. 22,000,000 545,160 .77
Lowe's Companies, Inc. 17,500,000 984,900 1.39
Target Corp. 12,900,000 645,258 .91
TJX Companies, Inc. 21,000,000 503,580 .71
Other securities 2,209,061 3.11
5,902,341 8.32
Consumer staples -- 9.13%
Avon Products, Inc. 12,700,000 502,285 .71
H.J. Heinz Co. 17,450,000 634,308 .89
Kimberly-Clark Corp. 13,003,100 775,895 1.09
Sara Lee Corp. 25,300,000 588,984 .83
Walgreen Co. 18,877,700 677,521 .96
Wal-Mart Stores, Inc. 11,350,000 611,992 .86
Other securities 2,687,419 3.79
6,478,404 9.13
Health care -- 10.46%
Abbott Laboratories 18,050,000 769,471 1.08
Bristol-Myers Squibb Co. 64,935,000 1,521,427 2.14
Cardinal Health, Inc. 11,325,000 529,444 .75
Eli Lilly and Co. 20,400,000 1,120,164 1.58
Pfizer Inc 35,475,000 1,027,001 1.45
Wyeth 15,100,000 598,715 .84
Other securities 1,856,725 2.62
7,422,947 10.46
Financials -- 22.00%
American International Group, Inc. 14,250,000 865,117 1.22
Bank of America Corp. 37,950,000 1,699,780 2.40
Bank of New York Co., Inc. 25,750,000 835,845 1.18
Citigroup Inc. 11,806,000 523,832 .74
Fannie Mae 22,200,000 1,557,330 2.20
Freddie Mac 10,890,000 725,274 1.02
HSBC Holdings PLC (ADR) 10,272,000 832,340 1.17
J.P. Morgan Chase & Co. 58,986,560 2,276,881 3.21
St. Paul Travelers Companies, Inc. 15,220,000 516,871 .73
Washington Mutual, Inc. 20,350,000 787,749 1.11
Wells Fargo & Co. 23,100,000 1,379,532 1.94
Other securities 3,607,530 5.08
15,608,081 22.00
Information technology -- 6.05%
Hewlett-Packard Co. 41,288,900 770,451 1.08
International Business Machines Corp. 7,795,000 699,601 .99
Microsoft Corp. 27,850,000 779,522 1.10
Texas Instruments Inc. 21,085,300 515,536 .73
Other securities 1,525,423 2.15
4,290,533 6.05
Telecommunication services -- 7.64%
AT&T Corp. 33,325,999 570,208 .80
BellSouth Corp. 43,250,000 1,153,477 1.63
SBC Communications Inc. 55,700,000 1,406,982 1.98
Sprint Corp. - FON Group 41,283,400 864,887 1.22
Verizon Communications Inc. 28,070,000 1,097,537 1.55
Other securities 324,862 .46
5,417,953 7.64
Utilities -- 7.52%
American Electric Power Co., Inc. 16,880,800 555,885 .78
Dominion Resources, Inc. 9,785,000 629,371 .89
Other securities 4,152,047 5.85
5,337,303 7.52
Total common stocks (cost: $56,729,682,000) 68,480,167 96.51
Consumer discretionary -- 0.16%
General Motors Corp., Series B,
5.25% convertible debentures 2032 $61,050 56,923 .08
Other securities 56,960 .08
113,883 .16
Other -- 0.20%
Other 142,239 .20
Total convertible securities (cost: $257,896,000) 256,122 .36
Principal Amount Market Value Percent of
Short-term securities -- 2.94% (000) (000) net assets
Abbott Laboratories Inc. 1.76% - 1.91%
due 11/23/2004 - 12/21/2004 /1/ $ 68,100 $ 67,943 .09%
American General Finance Corp. 1.74%
due 11/15/2004 20,000 19,985 .03
Bank of America Corp. 1.95% due 12/27/2004 35,000 34,891 .05
Eli Lilly and Co. 1.73% due 11/4/2004 /1/ 41,400 41,392 .06
General Electric Capital Services, Inc.
1.72% due 11/8/2004 50,000 49,981 .07
Pfizer Inc 1.79% - 1.93%
due 12/16/2004 - 1/3/2005 /1/ 125,200 124,837 .18
SBC Communications Inc. 1.90%
due 12/2/2004 /1/ 50,000 49,916 .07
Wal-Mart Stores Inc. 1.82% - 1.85%
due 11/23/2004 - 12/7/2004 /1/ 154,762 154,516 .22
Other securities 1,538,988 2.17
Total short-term securities
(cost: $2,082,504,000) 2,082,449 2.94
Total investment securities
(cost: $59,070,082,000) 70,818,738 99.81
Other assets less liabilities 134,531 .19
Net assets $70,953,269 100.00%
"Other securities" includes all issues that are not required to be disclosed in
the summary investment portfolio.
Investments in affiliates:
A company is considered to be an affiliate of the Fund under the Investment
Company Act of 1940 if the Fund's holdings in that company represent 5% or more
of the outstanding voting shares of that company. The market value of the Fund's
holdings in affiliated companies is included in "Other securities" under their
respective industry sectors in the preceding summary investment portfolio.
Further details on these holdings and related transactions during the six months
ended October 31, 2004, appear below.
Dividend
Beginning Ending income Market value
Company shares Purchases Sales shares (000) (000)
Ashland Inc. 3,680,000 -- -- 3,680,000 $2,024 $212,042
/1/ Restricted security that can be resold only to institutional investors. In
practice, these securities are typically as liquid as unrestricted securities in
the portfolio. The total value of all such restricted securities, including
those included in "Other securities" in the summary investment portfolio, was
$796,221,000, which represented 1.12% of the net assets of the Fund.
ADR = American Depositary Receipts
See Notes to Financial Statements
Financial statements
Statement of assets and liabilities at October 31, 2004 unaudited
(dollars and shares in thousands, except per-share amounts)
Assets:
Investment securities at market:
Unaffiliated issuers (cost: $58,892,810) $70,606,696
Affiliated issuers (cost: $177,272) 212,042 $70,818,738
Cash 463
Receivables for:
Sales of investments 61,372
Sales of Fund's shares 95,120
Dividends and interest 180,030 336,522
71,155,723
Liabilities:
Payables for:
Purchases of investments 84,536
Repurchases of Fund's shares 58,877
Management services 15,346
Services provided by affiliates 42,509
Deferred Directors' and
Advisory Board compensation 1,039
Other fees and expenses 147 202,454
Net assets at October 31, 2004 $70,953,269
Net assets consist of:
Capital paid in on shares of capital stock $58,575,069
Undistributed net investment income 295,094
Undistributed net realized gain 334,450
Net unrealized appreciation 11,748,656
Net assets at October 31, 2004 $70,953,269
Total authorized capital stock -- 4,000,000 shares, $.001 par value (2,416,756
total shares outstanding)
Net assets Shares outstanding Net asset value per share /1/
Class A $59,344,120 2,019,846 $29.38
Class B 2,765,191 94,638 29.22
Class C 2,773,718 95,090 29.17
Class F 2,273,209 77,518 29.32
Class 529-A 516,041 17,579 29.36
Class 529-B 130,016 4,445 29.25
Class 529-C 188,469 6,444 29.25
Class 529-E 28,670 979 29.27
Class 529-F 16,568 565 29.32
Class R-1 23,401 800 29.25
Class R-2 487,863 16,722 29.18
Class R-3 1,365,696 46,679 29.26
Class R-4 524,298 17,885 29.32
Class R-5 516,009 17,566 29.38
/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 $31.17 and $31.15,
respectively.
See Notes to Financial Statements
Financial statements
Statement of operations for the six months ended October 31, 2004 unaudited
(dollars in thousands)
Investment income:
Income:
Dividends (net of non-U.S. withholding
tax of $1,048; also includes $2,024
from affiliates) $927,461
Interest 26,773 $ 954,234
Fees and expenses:
Investment advisory services 67,533
Business management services 26,366
Distribution services 103,618
Transfer agent services 25,686
Administrative services 8,395
Reports to shareholders 1,332
Registration statement and prospectus 1,702
Postage, stationery and supplies 3,295
Directors' and Advisory Board compensation 360
Auditing and legal 159
Custodian 215
Other 77
Total expenses before reimbursement/waiver 238,738
Reimbursement/waiver of expenses 1,930 236,808
Net investment income 717,426
Net realized loss and unrealized appreciation on investments:
Net realized loss on investments (30,425)
Net unrealized appreciation on investments 1,323,056
Net realized loss and unrealized appreciation
on investments 1,292,631
Net increase in net assets resulting from operations $2,010,057
See Notes to Financial Statements
Statement of changes in net assets
(dollars in thousands)
Six months Year ended
ended October April 30,
31, 2004 /1/ 2004
Operations:
Net investment income $ 717,426 $ 1,221,227
Net realized (loss) gain on investments (30,425) 1,391,805
Net unrealized appreciation on investments 1,323,056 9,001,008
Net increase in net assets resulting
from operations 2,010,057 11,614,040
Dividends and distributions paid to shareholders:
Dividends from net investment income (623,997) (1,130,674)
Distributions from net realized gain
on investments -- (405,371)
Total dividends and distributions paid to
shareholders (623,997) (1,536,045)
Capital share transactions 2,766,776 8,507,821
Total increase in net assets 4,152,836 18,585,816
Net assets:
Beginning of period 66,800,433 48,214,617
End of period (including undistributed net
investment income: $295,094 and $201,665,
respectively) $70,953,269 $66,800,433
/1/ Unaudited
See Notes to Financial Statements
Notes to financial statements unaudited
1. Organization and significant accounting policies
Organization -- Washington Mutual Investors Fund (the "Fund") is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company. The Fund's investment objective is to produce current income
and to provide an opportunity for growth of principal consistent with sound
common stock investing.
The Fund offers 14 share classes consisting of four retail share classes, five
CollegeAmerica(R) 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:
CollegeAmerica is a registered trademark of the Virginia College Savings
Plan(SM).
Initial Contingent deferred sales
Share class sales charge charge upon redemption Conversion feature
Classes A and 529-A Up to 5.75% None (except 1% for certain None
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
for redemptions within to 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, None None None
R-3, R-4 and R-5
Holders of all share classes have equal pro rata rights to assets, dividends and
liquidation proceeds. 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 purchased within 60 days to
maturity are valued at amortized cost, which approximates market value. The
value of short-term securities purchased with greater than 60 days to maturity
with 60 days or less remaining to maturity is determined based on the market
value on the 61st day. 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 under procedures adopted 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.
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 certain
securities within 30 days of purchase; deferred expenses; cost of investments
sold; and amortization of premiums. 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 October 31, 2004, the cost of
investment securities for federal income tax purposes was $59,083,358,000.
As of October 31, 2004, the components of distributable earnings on a tax basis
were as follows (dollars in thousands):
Undistributed net investment income $ 296,565
Accumulated short-term capital losses (96,819)
Undistributed long-term capital gains 444,113
Gross unrealized appreciation on investment securities 14,228,234
Gross unrealized depreciation on investment securities (2,492,854)
Net unrealized appreciation on investment securities 11,735,380
During the six months ended October 31, 2004, the Fund realized, on a tax basis,
a net capital loss of $29,839,000.
The tax character of distributions paid to shareholders was as follows (dollars
in thousands):
Six months ended October 31, 2004
Distributions from Distributions from Total distributions
Share class ordinary income long-term capital gains paid
Class A $549,726 -- $549,726
Class B 15,307 -- 15,307
Class C 14,176 -- 14,176
Class F 19,019 -- 19,019
Class 529-A 4,179 -- 4,179
Class 529-B 582 -- 582
Class 529-C 846 -- 846
Class 529-E 193 -- 193
Class 529-F 122 -- 122
Class R-1 113 -- 113
Class R-2 2,395 -- 2,395
Class R-3 8,781 -- 8,781
Class R-4 3,746 -- 3,746
Class R-5 4,812 -- 4,812
Total $623,997 -- $623,997
Year ended April 30, 2004
Distributions from Distributions from Total distributions
Share class ordinary income long-term capital gains paid
Class A $1,023,435 $353,523 $1,376,958
Class B 26,631 14,964 41,595
Class C 22,527 13,551 36,078
Class F 27,287 10,227 37,514
Class 529-A 6,006 2,219 8,225
Class 529-B 904 592 1,496
Class 529-C 1,240 804 2,044
Class 529-E 262 117 379
Class 529-F 127 54 181
Class R-1 152 94 246
Class R-2 2,866 1,661 4,527
Class R-3 8,967 4,233 13,200
Class R-4 3,296 1,130 4,426
Class R-5 6,974 2,202 9,176
Total $1,130,674 $405,371 $1,536,045
3. Fees and transactions with related parties
Business management services -- The Fund has a business management agreement
with Washington Management Corporation (WMC). Under this agreement, WMC provides
services necessary to carry on the Fund's general administrative and corporate
affairs. These services encompass matters relating to general corporate
governance, regulatory compliance and monitoring of the Fund's contractual
service providers, including custodian operations, shareholder services and Fund
share distribution functions. Under the agreement, all expenses chargeable to
the Class A shares of the Fund, including compensation to the business manager,
shall not exceed 1% of the average net assets of the Fund on an annual basis.
The agreement provides for monthly fees, accrued daily, based on a declining
series of annual rates beginning with 0.175% on the first $3 billion of daily
net assets and decreasing to 0.035% of such assets in excess of $67 billion.
During the six months ended October 31, 2004, WMC reduced business management
services fees by $442,000. As a result, the fee shown in the accompanying
financial statements of $26,366,000, which was equivalent to an annualized rate
of 0.076%, was reduced to $25,924,000, or 0.075% of average daily net assets.
Johnston, Lemon & Co. Incorporated (JLC), a wholly owned subsidiary of The
Johnston-Lemon Group, Incorporated (JLG), earned $323,000 on its retail sales of
shares and distribution plans of the Fund and received no brokerage commissions
resulting from the purchases and sales of securities for the investment account
of the Fund.
Investment advisory services -- 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. The Investment Advisory
Agreement with CRMC provides for monthly fees accrued daily. These fees are
based on a declining series of annual rates beginning with 0.225% on the first
$3 billion of daily net assets and decreasing to 0.185% on such assets in excess
of $55 billion. The Board of Directors approved an amended agreement, effective
June 17, 2004, continuing the series of rates to include an additional annual
rate of 0.180% on daily net assets in excess of $71 billion. During the six
months ended October 31, 2004, CRMC reduced investment advisory services fees by
$1,148,000. As a result, the fee shown on the accompanying financial statements
of $67,533,000, which was equivalent to an annualized rate of 0.195%, was
reduced to $66,385,000, or 0.192% of average daily 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. 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 October 31, 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 six months ended October 31, 2004, CRMC agreed to pay
a portion of these fees for classes R-1 and R-2. 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
October 31, 2004, were as follows (dollars in thousands):
Administrative services
Commonwealth
CRMC of Virginia
Distribution Transfer agent administrative Transfer agent administrative
Share class services services services services services
Class A $67,252 $24,490 Not applicable Not applicable Not applicable
Class B 13,394 1,196 Not applicable Not applicable Not applicable
Class C 13,194 | $1,979 $ 275 Not applicable
Class F 2,640 | 1,584 107 Not applicable
Class 529-A 361 | 356 34 $237
Class 529-B 605 | 91 25 61
Class 529-C 867 | 130 29 87
Class 529-E 66 Included in 20 2 13
Class 529-F 17 administrative 11 1 7
Class R-1 102 services 15 8 Not applicable
Class R-2 1,620 | 324 914 Not applicable
Class R-3 2,987 | 896 643 Not applicable
Class R-4 513 | 308 2 Not applicable
Class R-5 Not applicable | 231 5 Not applicable
Total $103,618 $25,686 $5,945 $2,045 $405
Deferred Directors' and Advisory Board compensation -- Since the adoption of the
deferred compensation plan in 1994, Independent Directors and Advisory Board
members 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' and Advisory Board
compensation in the accompanying financial statements includes $343,000 in
current fees (either paid in cash or deferred) and a net increase of $17,000 in
the value of the deferred amounts.
Affiliated officers and Directors -- WMC and JLC are both wholly owned
subsidiaries of JLG. All officers of the Fund and all of its Directors who are
affiliated with JLG receive no compensation directly from the Fund in such
capacities.
4. Capital share transactions
Capital share transactions in the Fund were as follows (dollars and shares in
thousands):
Six months ended October 31, 2004
Reinvestments
of dividends
Sales<F1> and distributions Repurchases<F1> Net increase
Share class Amount Shares Amount Shares Amount Shares Amount Shares
Class A $3,580,577 123,400 $515,695 17,456 $(2,950,343) (101,676) $1,145,929 39,180
Class B 254,518 8,822 14,622 497 (106,468) (3,692) 162,672 5,627
Class C 389,313 13,513 13,356 454 (140,812) (4,893) 261,857 9,074
Class F 458,193 15,813 16,867 572 (161,864) (5,584) 313,196 10,801
Class 529-A 86,369 2,980 4,179 142 (10,123) (350) 80,425 2,772
Class 529-B 18,238 631 582 20 (1,598) (55) 17,222 596
Class 529-C 32,215 1,115 846 28 (4,249) (147) 28,812 996
Class 529-E 5,280 183 193 6 (677) (24) 4,796 165
Class 529-F 5,046 174 122 4 (343) (12) 4,825 166
Class R-1 9,582 333 113 4 (3,086) (108) 6,609 229
Class R-2 146,299 5,074 2,395 82 (40,176) (1,394) 108,518 3,762
Class R-3 398,346 13,766 8,761 298 (74,232) (2,566) 332,875 11,498
Class R-4 212,821 7,317 3,746 127 (29,855) (1,030) 186,712 6,414
Class R-5 139,232 4,786 4,621 156 (31,525) (1,089) 112,328 3,853
Total net
increase
(decrease) $5,736,029 197,907 $586,098 19,846 $(3,555,351) (122,620) $2,766,776 95,133
Year ended April 30, 2004
Reinvestments
of dividends
Sales<F1> and distributions Repurchases<F1> Net increase
Share class Amount Shares Amount Shares Amount Shares Amount Shares
Class A $ 8,658,906 316,038 $1,297,927 46,995 $(5,596,587) (204,091) $4,360,246 158,942
Class B 784,093 28,982 39,955 1,448 (160,096) (5,858) 663,952 24,572
Class C 1,132,018 41,659 34,320 1,244 (212,342) (7,789) 953,996 35,114
Class F 1,021,066 37,267 33,743 1,219 (256,599) (9,291) 798,210 29,195
Class 529-A 183,817 6,679 8,223 297 (12,711) (458) 179,329 6,518
Class 529-B 45,906 1,683 1,496 54 (2,506) (91) 44,896 1,646
Class 529-C 73,740 2,685 2,044 74 (5,645) (204) 70,139 2,555
Class 529-E 11,711 426 379 14 (728) (26) 11,362 414
Class 529-F 7,909 288 181 6 (387) (13) 7,703 281
Class R-1 11,914 436 246 9 (5,604) (203) 6,556 242
Class R-2 293,230 10,725 4,527 163 (53,205) (1,943) 244,552 8,945
Class R-3 911,148 33,444 13,186 474 (108,485) (3,956) 815,849 29,962
Class R-4 275,613 9,872 4,426 159 (42,240) (1,520) 237,799 8,511
Class R-5 139,624 5,078 8,914 322 (35,306) (1,292) 113,232 4,108
Total net
increase
(decrease) $13,550,695 495,262 $1,449,567 52,478 $(6,492,441) (236,735) $8,507,821 311,005
<FN>
<F1>Includes exchanges between share classes of the Fund.
</FN>
5. Investment transactions and other disclosures
The Fund made purchases and sales of investment securities, excluding short-term
securities, of $6,933,557,000 and $4,963,762,000, respectively, during the six
months ended October 31, 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 October 31, 2004, the custodian fee of $215,000 included
$12,000 that was offset by this reduction, rather than paid in cash.
Financial highlights<F1>
Income (loss) from Dividends and
investment operations<F2> distributions
Ratio
Ratio of ex-
of ex- penses
Net penses to aver- Ratio
gains to aver- age net of net
(losses) Divi- age net assets income
Net on secur Total dends Total Net assets after (loss)
Asset Net ities from (from Distri- divi- Net assets before reim to
value invest- (both invest- net butions dends asset end of reim- burse- aver-
begin- ment realized ment invest- (from and value, Total period burse- ment/ age
ning of income and un- oper- ment capital distri- end of return (in ment/ waiver net
period (loss) realized) ations income) gains) butions period <F3> millions) waiver <F4> assets
Class A:
Six months
ended 10/31/
2004<F5> $28.79 $ .32 $ .55 $ .87 $(.28) $ -- $(.28) $29.38 3.00% $59,344 .61%<F6> .60%<F6> 2.15%<F6>
Year ended
4/30/2004 23.99 .59 4.94 5.53 (.54) (.19) (.73) 28.79 23.19 57,027 .64 .64 2.14
Year ended
4/30/2003 28.37 .55 (4.35) (3.80) (.54) (.04) (.58) 23.99 (13.36) 43,701 .67 .67 2.28
Year ended
4/30/2002 29.80 .50 (.75) (.25) (.54) (.64) (1.18) 28.37 (.73) 50,669 .65 .65 1.72
Year ended
4/30/2001 29.14 .57 3.17 3.74 (.58) (2.50) (3.08) 29.80 13.54 48,700 .65 .65 1.95
Year ended
4/30/2000 35.31 .61 (3.09) (2.48) (.58) (3.11) (3.69) 29.14 (6.96) 47,319 .63 .63 1.91
Class B:
Six months
ended 10/31/
2004<F5> 28.64 .20 .55 .75 (.17) -- (.17) 29.22 2.60 2,765 1.38<F6> 1.38<F6> 1.37<F6>
Year ended
4/30/2004 23.88 .37 4.92 5.29 (.34) (.19) (.53) 28.64 22.25 2,549 1.40 1.40 1.36
Year ended
4/30/2003 28.25 .36 (4.32) (3.96) (.37) (.04) (.41) 23.88 (14.01) 1,538 1.45 1.45 1.52
Year ended
4/30/2002 29.71 .25 (.72) (.47) (.35) (.64) (.99) 28.25 (1.50) 1,097 1.41 1.41 .88
Year ended
4/30/2001 29.11 .29 3.22 3.51 (.41) (2.50) (2.91) 29.71 12.67 289 1.42 1.42 .99
Period from
3/15/2000 to
4/30/2000 26.93 .02 2.16 2.18 -- -- -- 29.11 8.09 34 .17 .17 .08
Class C:
Six months
ended 10/31/
2004<F5> 28.59 .19 .55 .74 (.16) -- (.16) 29.17 2.57 2,774 1.46<F6> 1.46<F6> 1.29<F6>
Year ended
4/30/2004 23.84 .35 4.92 5.27 (.33) (.19) (.52) 28.59 22.19 2,460 1.48 1.48 1.27
Year ended
4/30/2003 28.22 .35 (4.33) (3.98) (.36) (.04) (.40) 23.84 (14.10) 1,214 1.51 1.51 1.46
Year ended
4/30/2002 29.70 .21 (.73) (.52) (.32) (.64) (.96) 28.22 (1.68) 678 1.51 1.51 .72
Period from
3/15/2001 to
4/30/2001 28.32 (.02) 1.40 1.38 -- -- -- 29.70 4.87 36 .23 .23 (.07)
Class F:
Six months
ended 10/31/
2004<F5> 28.74 .30 .54 .84 (.26) -- (.26) 29.32 2.93 2,273 .70<F6> .69<F6> 2.05<F6>
Year ended
4/30/2004 23.95 .56 4.94 5.50 (.52) (.19) (.71) 28.74 23.13 1,917 .71 .71 2.04
Year ended
4/30/2003 28.33 .53 (4.34) (3.81) (.53) (.04) (.57) 23.95 (13.42) 899 .74 .74 2.24
Year ended
4/30/2002 29.79 .42 (.72) (.30) (.52) (.64) (1.16) 28.33 (.89) 444 .78 .78 1.46
Period from
3/15/2001 to
4/30/2001 28.37 .01 1.41 1.42 -- -- -- 29.79 5.01 16 .12 .12 .04
Class 529-A:
Six months
ended 10/31/
2004<F5> 28.76 .30 .56 .86 (.26) -- (.26) 29.36 2.97 516 .71<F6> .70<F6> 2.04<F6>
Year ended
4/30/2004 23.97 .56 4.95 5.51 (.53) (.19) (.72) 28.76 23.07 426 .71 .71 2.03
Year ended
4/30/2003 28.36 .54 (4.35) (3.81) (.54) (.04) (.58) 23.97 (13.38) 199 .70 .70 2.29
Period from
2/15/2002 to
4/30/2002 27.71 .04 .75 .79 (.14) -- (.14) 28.36 2.82 49 .16 .16 .14
Class 529-B:
Six months
ended 10/31/
2004<F5> 28.68 .17 .54 .71 (.14) -- (.14) 29.25 2.47 130 1.58<F6> 1.58<F6> 1.17<F6>
Year ended
4/30/2004 23.91 .32 4.96 5.28 (.32) (.19) (.51) 28.68 22.08 110 1.59 1.59 1.15
Year ended
4/30/2003 28.34 .32 (4.35) (4.03) (.36) (.04) (.40) 23.91 (14.18) 53 1.62 1.62 1.36
Period from
2/19/2002 to
4/30/2002 27.25 (.01) 1.22 1.21 (.12) -- (.12) 28.34 4.38 11 .30 .30 (.02)
Class 529-C:
Six months
ended 10/31/
2004<F5> 28.67 .17 .55 .72 (.14) -- (.14) 29.25 2.52 188 1.58<F6> 1.57<F6> 1.17<F6>
Year ended
4/30/2004 23.91 .32 4.93 5.25 (.30) (.19) (.49) 28.67 22.06 156 1.58 1.58 1.15
Year ended
4/30/2003 28.33 .32 (4.34) (4.02) (.36) (.04) (.40) 23.91 (14.18) 69 1.61 1.61 1.38
Period from
2/15/2002 to
4/30/2002 27.71 (.01) .75 .74 (.12) -- (.12) 28.33 2.65 15 .32 .32 (.03)
Class 529-E:
Six months
ended 10/31/
2004<F5> 28.69 .25 .54 .79 (.21) -- (.21) 29.27 2.76 29 1.06<F6> 1.05<F6> 1.69<F6>
Year ended
4/30/2004 23.92 .46 4.94 5.40 (.44) (.19) (.63) 28.69 22.68 23 1.06 1.06 1.68
Year ended
4/30/2003 28.34 .45 (4.35) (3.90) (.48) (.04) (.52) 23.92 (13.73) 9 1.08 1.08 1.92
Period from
3/1/2002 to
4/30/2002 28.59 .01 (.13) (.12) (.13) -- (.13) 28.34 (.44) 1 .17 .17 .04
Class 529-F:
Six months
ended 10/31/
2004<F5> 28.74 .28 .55 .83 (.25) -- (.25) 29.32 2.89 17 .80<F6> .80<F6> 1.93<F6>
Year ended
4/30/2004 23.96 .53 4.95 5.48 (.51) (.19) (.70) 28.74 23.00 11 .81 .81 1.90
Period from
9/16/2002 to
4/30/2003 23.98 .32 .10 .42 (.40) (.04) (.44) 23.96 1.85 3 .82<F6> .82<F6> 2.25<F6>
Class R-1:
Six months
ended 10/31/
2004<F5> 28.68 .18 .55 .73 (.16) -- (.16) 29.25 2.55 23 1.51<F6> 1.48<F6> 1.25<F6>
Year ended
4/30/2004 23.92 .35 4.93 5.28 (.33) (.19) (.52) 28.68 22.16 16 1.52 1.49 1.25
Period from
5/29/2002 to
4/30/2003 28.52 .32 (4.46) (4.14) (.42) (.04) (.46) 23.92 (14.50) 8 1.71<F6> 1.51<F6> 1.50<F6>
Class R-2:
Six months
ended 10/31/
2004<F5> 28.60 .19 .55 .74 (.16) -- (.16) 29.18 2.59 488 1.61<F6> 1.45<F6> 1.29<F6>
Year ended
4/30/2004 23.88 .35 4.91 5.26 (.35) (.19) (.54) 28.60 22.12 371 1.69 1.45 1.26
Period from
5/31/2002 to
4/30/2003 28.46 .33 (4.40) (4.07) (.47) (.04) (.51) 23.88 (14.29) 96 1.78<F6> 1.47<F6> 1.58<F6>
Class R-3:
Six months
ended 10/31/
2004<F5> 28.68 .25 .54 .79 (.21) -- (.21) 29.26 2.77 1,366 1.04<F6> 1.04<F6> 1.69<F6>
Year ended
4/30/2004 23.93 .46 4.94 5.40 (.46) (.19) (.65) 28.68 22.68 1,009 1.07 1.07 1.63
Period from
6/4/2002 to
4/30/2003 27.81 .41 (3.74) (3.33) (.51) (.04) (.55) 23.93 (11.94) 125 1.11<F6> 1.09<F6> 1.95<F6>
Class R-4:
Six months
ended 10/31/
2004<F5> 28.73 .30 .56 .86 (.27) -- (.27) 29.32 2.97 524 .69<F6> .68<F6> 2.04<F6>
Year ended
4/30/2004 23.95 .56 4.94 5.50 (.53) (.19) (.72) 28.73 23.11 330 .70 .70 2.01
Period from
5/20/2002 to
4/30/2003 28.78 .51 (4.74) (4.23) (.56) (.04) (.60) 23.95 (14.66) 71 .74<F6> .73<F6> 2.32<F6>
Class R-5:
Six months
ended 10/31/
2004<F5> 28.79 .34 .56 .90 (.31) -- (.31) 29.38 3.11 516 .39<F6> .38<F6> 2.35<F6>
Year ended
4/30/2004 23.99 .65 4.94 5.59 (.60) (.19) (.79) 28.79 23.49 395 .39 .39 2.36
Period from
5/15/2002 to
4/30/2003 28.84 .57 (4.78) (4.21) (.60) (.04) (.64) 23.99 (14.57) 230 .41<F6> .41<F6> 2.51<F6>
Six months Year ended April 30
ended October 31,
2004<F5> 2004 2003 2002 2001 2000
Portfolio turnover rate
for all classes of shares 7% 12% 21% 22% 25% 26%
<FN>
<F1> Based on operations for the period shown (unless otherwise noted) and,
accordingly, may not be representative of a full year.
<F2> Based on average shares outstanding.
<F3> Total returns exclude all sales charges, including contingent deferred
sales charges.
<F4> The ratios in this column reflect the impact, if any, of certain
reimbursements/waivers from CRMC and WMC. During the six months ended
10/31/2004, CRMC and WMC reduced fees for investment advisory services and
business management services for all share classes. In addition, during the
start-up period for the retirement plan share classes (except Class R-5), CRMC
agreed to pay a portion of the fees related to transfer agent services.
<F5> Unaudited.
<F6> Annualized.
</FN>
See Notes to Financial Statements
Expense example unaudited
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs such as initial sales charges on purchase payments and contingent deferred
sales charges on redemptions (loads); and (2) ongoing costs, including
management fees; distribution and service (12b-1) fees; and other expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund so you can compare these costs with the ongoing costs of
investing in other mutual funds. The example is based on an investment of $1,000
invested at the beginning of the period and held for the entire period (May 1,
2004 through October 31, 2004).
Actual expenses -- The first line of each share class in the table on the next
page provides information about actual account values and actual expenses. You
may use the information in this line, together with the amount you invested, to
estimate the expenses that you paid over the period. Simply divide your account
value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6),
then multiply the result by the number in the first line under the heading
entitled "Expenses paid during period" to estimate the expenses you paid on your
account during this period. There are some account fees that are charged to
certain types of accounts, such as Individual Retirement Accounts and
CollegeAmerica accounts (generally, a $10 fee is charged to set up the account
and an additional $10 fee is charged to the account annually) that would
increase the amount of expenses paid on your account. In addition, retirement
plan participants may be subject to certain fees charged by the plan sponsor,
and Class F and Class 529-F shareholders may be subject to fees charged by
financial intermediaries, typically ranging from 0.50% to 3.00% of assets
annually depending on services offered. You may use the information in the table
on the next page to estimate the impact of these fees by adding the amount of
the fees to the number in the first line for your share class under the heading
entitled "Expenses paid during period", and subtracting the amount of the fees
from the number in the first line under the heading entitled "Ending account
value".
Hypothetical example for comparison purposes -- The second line of each share
class in the table on the next page provides information about hypothetical
account values and hypothetical expenses based on the actual expense ratio for
the share class and an assumed rate of return of 5.00% per year before expenses,
which is not the actual return of the share class. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expenses you paid for the period. You may use this information to
compare the ongoing costs of investing in the Fund and other funds. To do so,
compare this 5.00% hypothetical example with the 5.00% hypothetical examples
that appear in the shareholder reports of the other funds. There are some
account fees that are charged to certain shareholders, such as Individual
Retirement Accounts and CollegeAmerica accounts (generally, a $10 fee is charged
to set up the account and an additional $10 fee is charged to the account
annually) that would increase the amount of expenses paid on your account. In
addition, retirement plan participants may be subject to certain fees charged by
the plan sponsor, and Class F and Class 529-F shareholders may be subject to
fees charged by financial intermediaries, typically ranging from 0.50% to 3.00%
of assets annually depending on services offered. You may use the information in
the table below to estimate the impact of these fees by adding the amount of the
fees to the number in the second line for your share class under the heading
entitled "Expenses paid during period", and subtracting the amount of the fees
from the number in the second line under the heading entitled "Ending account
value".
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of each share class in the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning Ending
account value account value Expenses paid Annualized
5/1/2004 10/31/2004 during period<F1> expense ratio
Class A -- actual return $1,000.00 $1,030.00 $3.07 .60%
Class A -- assumed 5% return 1,000.00 1,022.18 3.06 .60
Class B -- actual return 1,000.00 1,026.03 7.05 1.38
Class B -- assumed 5% return 1,000.00 1,018.25 7.02 1.38
Class C -- actual return 1,000.00 1,025.70 7.45 1.46
Class C -- assumed 5% return 1,000.00 1,017.85 7.43 1.46
Class F -- actual return 1,000.00 1,029.31 3.53 .69
Class F -- assumed 5% return 1,000.00 1,021.73 3.52 .69
Class 529-A -- actual return 1,000.00 1,029.74 3.58 .70
Class 529-A -- assumed 5% return 1,000.00 1,021.68 3.57 .70
Class 529-B -- actual return 1,000.00 1,024.74 8.06 1.58
Class 529-B -- assumed 5% return 1,000.00 1,017.24 8.03 1.58
Class 529-C -- actual return 1,000.00 1,025.18 8.01 1.57
Class 529-C -- assumed 5% return 1,000.00 1,017.29 7.98 1.57
Class 529-E -- actual return 1,000.00 1,027.64 5.37 1.05
Class 529-E -- assumed 5% return 1,000.00 1,019.91 5.35 1.05
Class 529-F -- actual return 1,000.00 1,028.93 4.09 .80
Class 529-F -- assumed 5% return 1,000.00 1,021.17 4.08 .80
Class R-1 -- actual return 1,000.00 1,025.48 7.56 1.48
Class R-1 -- assumed 5% return 1,000.00 1,017.74 7.53 1.48
Class R-2 -- actual return 1,000.00 1,025.85 7.40 1.45
Class R-2 -- assumed 5% return 1,000.00 1,017.90 7.38 1.45
Class R-3 -- actual return 1,000.00 1,027.67 5.32 1.04
Class R-3 -- assumed 5% return 1,000.00 1,019.96 5.30 1.04
Class R-4 -- actual return 1,000.00 1,029.75 3.48 .68
Class R-4 -- assumed 5% return 1,000.00 1,021.78 3.47 .68
Class R-5 -- actual return 1,000.00 1,031.09 1.95 .38
Class R-5 -- assumed 5% return 1,000.00 1,023.29 1.94 .38
<FN>
<F1>Expenses are equal to the annualized expense ratio, multiplied by the
average account value over the period, multiplied by the number of days in the
period (184), and divided by 365 (to reflect the one-half-year period).
</FN>
Other share class results unaudited
Returns for periods ended September 30, 2004 (the most recent calendar quarter):
Class B, Class C, Class F and Class 529
Figures shown are past results 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.
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 +10.57% +5.44% /1/
Not reflecting CDSC +15.57% +5.80% /1/
Class C shares
Reflecting CDSC, maximum of 1%, payable only if shares are
sold within one year of purchase +14.48% +2.95% /2/
Not reflecting CDSC +15.48% +2.95% /2/
Class F shares /3/
Not reflecting annual asset-based fee charged by sponsoring firm +16.37% +3.76% /2/
Class 529-A shares
Reflecting 5.75% maximum sales charge +9.65% +2.31%/4/
Not reflecting maximum sales charge +16.32% +4.64% /4/
Class 529-B shares
Reflecting applicable CDSC, maximum of 5%, payable only if
shares are sold within six years of purchase +10.30% +2.96% /5/
Not reflecting CDSC +15.30% +4.40% /5/
Class 529-C shares
Reflecting applicable CDSC, maximum of 1%, payable only if
shares are sold within one year of purchase +14.33% +3.73% /4/
Not reflecting CDSC +15.33% +3.73% /4/
Class 529-E shares /3/ +15.93% +3.06% /6/
Class 529-F shares /3/
Not reflecting annual asset-based fee charged by sponsoring firm +16.24% +13.17% /7/
The Fund's investment adviser and business manager are waiving 5% of their
management fees for the period September 1, 2004 through August 31, 2005. Over
that one-year period, the fee waivers will amount to approximately a two basis
point reduction in fund expenses. Without the waivers the returns of the Fund
shown in this report would have been slightly lower.
/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 15, 2002, when Class 529-A and
Class 529-C shares were first sold.
/5/ Average annual total return from February 19, 2002, when Class 529-B shares
were first sold.
/6/ Average annual total return from March 1, 2002, when Class 529-E shares were
first sold.
/7/ Average annual total return from September 16, 2002, when Class 529-F shares
were first sold.
There are several ways to invest in Washington Mutual Investors 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 and is eliminated for
purchases of $1 million 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(C)) 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 and the CollegeAmerica program
description, which can be obtained from your financial adviser and should be
read carefully before investing. You may also call American Funds Service
Company (AFS) 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 free of charge on the U.S.
Securities and Exchange Commission (SEC) website at www.sec.gov, on the American
Funds website or upon request by calling AFS. The Fund's proxy voting record for
the 12 months ended June 30, 2004, is also available on the SEC and American
Funds websites.
A complete portfolio of Washington Mutual Investors Fund's investments is
available free of charge on the SEC website or upon request by calling AFS.
Washington Mutual Investors Fund files a complete list of its portfolio holdings
with the SEC for the first and third quarters of each fiscal year on Form N-Q.
Forms N-Q are available free of charge on the SEC website or upon request by
calling AFS. You may also review or, for a fee, copy the forms at the SEC's
Public Reference Room in Washington, DC (800/SEC-0330).
This report is for the information of shareholders of Washington Mutual
Investors 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 December 31, 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)
(logo Washington Mutal Investors Fund)
Washington Mutual Investors Fund, Inc.
1101 Vermont Avenue, NW
Washington, DC 20005
202/842-5665
Offices of the Fund and of the business manager
Washington Management Corporation
1101 Vermont Avenue, NW
Washington, DC 20005-3521
202/842-5665
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
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
Thompson, O'Donnell, Markham,
Norton & Hannon
1212 New York Avenue, NW
Washington, DC 20005-3987
Independent registered public accounting firm
PricewaterhouseCoopers LLP
350 South Grand Avenue
Los Angeles, CA 90071-2889
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
The Capital Group Companies
American Funds
Capital Research and Management
Capital International
Capital Guardian
Capital Bank and Trust
Lit. No. MFGESR-901-1204P (S1952) (recylce logo) Printed on recycled paper
ITEM 2 - Code of Ethics
Not applicable to this filing.
Item 3 - Audit Committee Financial Expert
Not applicable to this filing.
Item 4 - Principal Accountant Fees and Services
Not applicable to this filing.
Item 5 - Audit Committee Disclosure for Listed Companies
Not applicable to this Registrant
Item 6 - Schedule of Investments
American Funds
Washington Mutual Investors Fund
Investment portfolio
October 31, 2004 unaudited
Market value
Common stocks-- 96.51% Shares (000)
- -------------------------------------------------------------------------------------------------------------
ENERGY -- 9.43%
Apache Corp. 4,000,000 $ 202,800
Ashland Inc.1 3,680,000 212,042
ChevronTexaco Corp. 36,881,000 1,956,906
ConocoPhillips 8,307,750 700,426
EOG Resources, Inc. 2,325,000 154,752
Exxon Mobil Corp. 40,576,600 1,997,180
Halliburton Co. 4,300,000 159,272
Marathon Oil Corp. 13,450,000 512,580
Schlumberger Ltd. 3,625,000 228,157
Sunoco, Inc. 2,750,000 204,490
Unocal Corp. 8,696,500 363,079
6,691,684
MATERIALS -- 4.52%
Air Products and Chemicals, Inc. 7,061,000 375,504
Alcoa Inc. 15,250,000 495,625
Crompton Corp. 990,001 9,207
E.I. du Pont de Nemours and Co. 9,900,000 424,413
International Paper Co. 20,700,000 797,157
MeadWestvaco Corp. 3,391,200 106,925
PPG Industries, Inc. 4,100,000 261,375
Temple-Inland Inc. 1,550,000 91,636
Weyerhaeuser Co. 10,350,000 648,324
3,210,166
INDUSTRIALS -- 11.44%
3M Co. 3,875,000 300,584
Avery Dennison Corp. 2,000,000 121,680
Boeing Co. 10,700,000 533,930
Burlington Northern Santa Fe Corp. 3,450,000 144,244
Caterpillar Inc. 1,225,000 98,661
Deere & Co. 4,638,100 277,266
Deluxe Corp. 2,200,000 83,798
Dover Corp. 2,000,000 78,540
Eaton Corp. 1,200,000 76,740
Emerson Electric Co. 5,900,000 377,895
Fluor Corp. 4,036,500 187,455
General Dynamics Corp. 2,125,000 217,005
General Electric Co. 55,600,000 1,897,072
Honeywell International Inc. 2,500,000 84,200
IKON Office Solutions, Inc. 4,681,700 49,158
unaudited
Market value
Common stocks Shares (000)
- ------------------------------------------------------------------------------------------------------------
INDUSTRIALS (continued)
Illinois Tool Works Inc. 2,603,900 $ 240,288
Ingersoll-Rand Co. Ltd., Class A 1,700,000 116,348
Lockheed Martin Corp. 6,450,000 355,330
Northrop Grumman Corp. 11,050,000 571,838
Pitney Bowes Inc. 8,514,900 372,527
Raytheon Co. 7,400,000 269,952
ServiceMaster Co. 8,750,000 112,350
Southwest Airlines Co. 7,500,000 118,275
Tyco International Ltd. 13,589,700 423,319
Union Pacific Corp. 1,400,000 88,158
United Parcel Service, Inc., Class B 3,700,000 292,966
United Technologies Corp. 6,800,000 631,176
8,120,755
CONSUMER DISCRETIONARY -- 8.00%
Best Buy Co., Inc. 4,000,000 236,880
Carnival Corp., units 8,050,000 407,008
Dana Corp. 3,200,000 47,712
Dow Jones & Co., Inc. 1,287,600 56,976
Gannett Co., Inc. 800,000 66,360
General Motors Corp. 26,313,400 1,014,382
Genuine Parts Co. 5,375,000 214,409
Knight-Ridder, Inc. 1,100,000 75,383
Limited Brands, Inc. 22,000,000 545,160
Lowe's Companies, Inc. 17,500,000 984,900
May Department Stores Co. 6,200,000 161,572
McDonald's Corp. 7,000,000 204,050
Newell Rubbermaid Inc. 8,000,000 172,480
NIKE, Inc., Class B 1,150,000 93,506
Stanley Works 1,000,000 44,520
Target Corp. 12,900,000 645,258
TJX Companies, Inc. 21,000,000 503,580
VF Corp. 3,800,000 204,554
5,678,690
CONSUMER STAPLES -- 9.03%
Albertson's, Inc. 16,956,750 386,783
Avon Products, Inc. 12,700,000 502,285
Coca-Cola Co. 8,645,800 351,538
ConAgra Foods, Inc. 10,930,000 288,552
General Mills, Inc. 10,400,000 460,200
H.J. Heinz Co. 17,450,000 634,308
Kellogg Co. 7,200,000 309,600
Kimberly-Clark Corp. 13,003,100 775,895
PepsiCo, Inc. 8,400,000 416,472
Procter & Gamble Co. 4,700,000 240,546
Sara Lee Corp. 25,300,000 588,984
Unilever NV (New York registered) 2,800,000 163,212
Walgreen Co. 18,877,700 677,521
Wal-Mart Stores, Inc. 11,350,000 611,992
6,407,888
unaudited
Market value
Common stocks Shares (000)
- ------------------------------------------------------------------------------------------------------------
HEALTH CARE -- 9.64%
Abbott Laboratories 18,050,000 $ 769,471
Aetna Inc. 1,850,000 175,750
Applera Corp. - Applied Biosystems Group 8,733,000 166,626
Becton, Dickinson and Co. 2,250,000 118,125
Bristol-Myers Squibb Co. 64,935,000 1,521,427
Cardinal Health, Inc. 11,325,000 529,444
CIGNA Corp. 1,519,800 96,447
Eli Lilly and Co. 20,400,000 1,120,164
Johnson & Johnson 3,700,000 216,006
Merck & Co., Inc. 13,250,000 414,858
Pfizer Inc 35,475,000 1,027,001
Schering-Plough Corp. 4,560,800 82,596
Wyeth 15,100,000 598,715
6,836,630
FINANCIALS -- 22.00%
AFLAC Inc. 2,750,000 98,670
Allstate Corp. 8,618,300 414,454
American Express Co. 3,450,000 183,092
American International Group, Inc. 14,250,000 865,117
Aon Corp. 9,900,000 202,059
Bank of America Corp. 37,950,000 1,699,780
Bank of New York Co., Inc. 25,750,000 835,845
Citigroup Inc. 11,806,000 523,832
Comerica Inc. 3,500,000 215,285
Fannie Mae 22,200,000 1,557,330
Freddie Mac 10,890,000 725,274
Hartford Financial Services Group, Inc. 3,275,000 191,522
HSBC Holdings PLC (ADR) 10,272,000 832,340
J.P. Morgan Chase & Co. 58,986,560 2,276,881
Jefferson-Pilot Corp. 5,925,000 286,118
Lincoln National Corp. 6,950,000 304,410
Marsh & McLennan Companies, Inc. 11,684,900 323,204
National City Corp. 2,800,000 109,116
PNC Financial Services Group, Inc. 1,520,000 79,496
SLM Corp. 2,100,000 95,046
St. Paul Travelers Companies, Inc. 15,220,000 516,871
SunTrust Banks, Inc. 2,200,000 154,836
U.S. Bancorp 11,775,000 336,883
Wachovia Corp. 8,670,000 426,651
Washington Mutual, Inc. 20,350,000 787,749
Wells Fargo & Co. 23,100,000 1,379,532
XL Capital Ltd., Class A 2,575,000 186,688
15,608,081
INFORMATION TECHNOLOGY -- 6.05%
Applied Materials, Inc.2 9,500,000 152,950
Automatic Data Processing, Inc. 7,200,000 312,408
Dell Inc.2 1,600,000 56,096
Electronic Data Systems Corp. 14,098,800 299,881
First Data Corp. 3,850,000 158,928
Hewlett-Packard Co. 41,288,900 770,451
unaudited
Market value
Common stocks Shares (000)
- -------------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY (continued)
Intel Corp. 5,300,000 $ 117,978
International Business Machines Corp. 7,795,000 699,601
Linear Technology Corp. 5,400,000 204,552
Microsoft Corp. 27,850,000 779,522
Oracle Corp.2 5,500,000 69,630
Texas Instruments Inc. 21,085,300 515,536
Xilinx, Inc. 5,000,000 153,000
4,290,533
TELECOMMUNICATION SERVICES -- 7.64%
ALLTEL Corp. 5,914,100 324,862
AT&T Corp. 33,325,999 570,208
BellSouth Corp. 43,250,000 1,153,477
SBC Communications Inc. 55,700,000 1,406,982
Sprint Corp. - FON Group 41,283,400 864,887
Verizon Communications Inc. 28,070,000 1,097,537
5,417,953
UTILITIES -- 7.52%
Ameren Corp. 2,300,000 110,400
American Electric Power Co., Inc. 16,880,800 555,885
Cinergy Corp. 875,000 34,580
Consolidated Edison, Inc. 6,800,000 295,460
Constellation Energy Group, Inc. 1,600,000 64,992
Dominion Resources, Inc. 9,785,000 629,371
DTE Energy Co. 4,150,000 177,247
Duke Energy Corp. 17,940,000 440,068
Exelon Corp. 10,791,000 427,539
FirstEnergy Corp. 9,133,635 377,493
FPL Group, Inc. 6,129,000 422,288
NiSource Inc. 4,900,000 105,105
Pinnacle West Capital Corp. 3,555,000 151,514
PPL Corp. 2,000,000 104,000
Progress Energy, Inc. 11,225,418 463,610
Public Service Enterprise Group Inc. 7,600,000 323,684
Puget Sound Energy, Inc. 3,200,000 74,432
Southern Co. 13,000,000 410,670
Xcel Energy Inc. 9,881,000 168,965
5,337,303
MISCELLANEOUS -- 1.24%
Other common stocks in initial period of acquisition 880,484
Total common stocks (cost: $56,729,682,000) 68,480,167
Shares or principal
Convertible securities-- 0.36% amount
- --------------------------------------------------------------------------------------------
INDUSTRIALS -- 0.02%
Northrop Grumman Corp. 7.25% convertible preferred 2004 140,000 units 14,338
unaudited
Shares or principal Market value
Convertible securities amount (000)
- --------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 0.16%
Gap, Inc. 5.75% convertible notes 2009 $44,500,000 $ 56,960
General Motors Corp., Series B, 5.25% convertible debentures 2032 $61,050,000 56,923
113,883
HEALTH CARE -- 0.02%
Baxter International Inc. 7.00% convertible preferred 2006 300,000 units 15,426
TELECOMMUNICATION SERVICES -- 0.13%
ALLTEL Corp. 7.75% convertible preferred 2005 1,500,000 units 76,050
CenturyTel, Inc. 6.875% ACES 2005 575,000 units 14,461
90,511
UTILITIES -- 0.03%
Ameren Corp. 9.75% ACES convertible preferred 2005 760,000 units 21,964
Total convertible securities (cost: $257,896,000) 256,122
Principal amount
Short-term securities-- 2.94% (000)
- --------------------------------------------------------------------------------------------
Abbott Laboratories Inc. 1.76%-1.91% due 11/23-12/21/20043 $ 68,100 67,943
American General Finance Corp. 1.74% due 11/15/2004 20,000 19,985
Bank of America Corp. 1.95% due 12/27/2004 35,000 34,891
Caterpillar Financial Services Corp. 1.52%-1.80% due 11/3-12/3/2004 49,200 49,163
Ciesco LLC 1.80% due 11/23/2004 32,500 32,463
Citicorp 1.88%-1.90% due 12/6-12/8/2004 65,000 64,875
Clipper Receivables Co., LLC 1.88%-1.94% due 11/22-12/10/20043 59,000 58,892
Coca-Cola Co. 1.62%-1.74% due 11/5-11/15/2004 74,600 74,565
Colgate-Palmolive Co. 1.74% due 11/1-11/3/20043 25,800 25,797
DuPont (E.I.) de Nemours & Co. 1.80%-1.85% due 12/3-12/9/2004 94,900 94,719
Eli Lilly and Co. 1.73% due 11/4/20043 41,400 41,392
FCAR Owner Trust I 2.03% due 1/11/2005 50,000 49,784
Federal Farm Credit Banks 1.71%-1.98% due 11/1/2004-2/9/2005 94,000 93,677
Federal Home Loan Bank 1.59%-1.80% due 11/1-12/17/2004 295,900 295,582
Gannett Co. 1.74% due 11/5/20043 8,900 8,898
General Electric Capital Services, Inc. 1.72% due 11/8/2004 50,000 49,981
Hershey Foods Corp. 1.83% due 11/19/20043 38,000 37,959
International Bank for Reconstruction and Development 1.75%-1.88%
due 12/2-12/28/2004 66,300 66,112
Pfizer Inc 1.79%-1.93% due 12/16/2004-1/3/20053 125,200 124,837
Procter & Gamble Co. 1.71%-1.88% due 11/5-12/3/20043 183,900 183,752
SBC Communications Inc. 1.90% due 12/2/20043 50,000 49,916
Tenessee Valley Authority 1.74%-1.84% due 12/2-12/9/2004 61,000 60,894
Three Pillars Funding, LLC 1.78% due 11/1/20043 22,700 22,699
Triple-A One Funding Corp. 1.84% due 11/17/20043 19,637 19,620
U.S. Treasury Bills 1.47%-1.96% due 11/4/2004-2/24/2005 300,350 299,537
Wal-Mart Stores Inc. 1.82%-1.85% due 11/23-12/7/20043 154,762 154,516
unaudited
Market value
Short-term securities (000)
- --------------------------------------------------------------------------------------------
Total short-term securities (cost: $2,082,504,000) $ 2,082,449
Total investment securities (cost: $59,070,082,000) 70,818,738
Other assets less liabilities 134,531
Net assets $70,953,269
Miscellaneous securities include holdings in their initial period of acquisition
that have not previously been publicly disclosed.
/1/ Represents an affiliated company as defined under the Investment Company Act
of 1940.
/2/ Security did not produce income during the last 12 months.
/3/ Restricted securities that can be resold only to institutional investors. In
practice, these securities are typically as liquid as unrestricted securities in
the portfolio. The total value of all restricted securities was $796,221,000
which represented 1.12% of the net assets of the fund.
ADR = American Depositary Receipts
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 - Purchase of Equity Securities by Closed End Management Investment
Company and Affiliated Procedures
Not applicable to this Registrant, insofar as the Registrant is not a closed-end
management investment company.
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 Governance 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
Governance Committee of the registrant, c/o the registrant's Secretary, and
should 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 Governance 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) Not applicable to this filing.
(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. (a)
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.
Washington Mutual Investors Fund, Inc.
By Jeffrey L. Steele, President and PEO
Date: December 29, 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 Jeffrey L. Steele, President and PEO
Date: December 29, 2004
By Howard L. Kitzmiller, Senior Vice President, Secretary, and Treasurer
Date: December 29, 2004