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: 811-5364
American High-Income Trust
(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: September 30, 2005
Date of reporting period: March 31, 2005
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:
Michael Glazer
Paul, Hastings, Janofsky & Walker LLP
515 South Flower 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 HIGH-INCOME TRUST
[cover photo - a hand resting on a computer mouse]
Semi-annual report for the six months ended March 31, 2005
AMERICAN HIGH-INCOME TRUST (SM) seeks a high level of current income and,
secondarily, capital appreciation through a diversified, carefully supervised
portfolio consisting primarily of lower rated, higher risk corporate bonds.
This fund is one of the 29 American Funds. The organization ranks among the
nation's three largest mutual fund families. 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 3.75%) 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 March 31, 2005:
Class A shares 1 year 5 years 10 years
Reflecting 3.75% maximum sales charge +2.15% +6.48% +7.98%
The fund's investment adviser is waiving a portion of its management fees.
Results shown reflect the waiver, without which they would have been lower.
Please see the Financial Highlights table on page 24 for details.
The fund's 30-day yield for Class A shares as of April 30, 2005, calculated in
accordance with the Securities and Exchange Commission formula, was 6.72%, which
reflects a fee waiver (6.69% without the fee waiver). The fund's distribution
rate for Class A shares as of that date was 6.89%. Both reflect the 3.75%
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 28. Please see the inside
back cover for important information about other share classes.
The return of principal in bond funds is not guaranteed. Bond funds have the
same interest rate, inflation and credit risks that are associated with the
underlying bonds owned by the fund.
High-yield bonds are subject to greater fluctuations in value and risk of loss
of income and principal. Investing outside the United States involves additional
risks, such as currency fluctuations, political instability, differing
securities regulations and periods of illiquidity, which are detailed in the
fund's prospectus.
[photo - a hand resting on a computer mouse]
FELLOW SHAREHOLDERS:
After more than two years of strong returns in the high-yield bond market,
American High-Income Trust continued to provide solid gains in the first half of
its 2005 fiscal year, but showed signs of a slowdown toward the end of the
period.
For the six months ended March 31, 2005, shareholders who reinvested monthly
dividends totaling 45 cents a share earned an income return of 3.7% (7.4%
annualized). The fund's total return was slightly lower at 3.1%, reflecting a
decline in net asset value. That compares with a 3.3% total return for the
Lipper High Current Yield Bond Funds Index, a benchmark of similar funds, and a
3.4% return for the Credit Suisse First Boston High Yield Bond Index, which
attempts to mirror the high-yield debt markets. The Citigroup Broad
Investment-Grade (BIG) Bond Index, which measures high-quality bond markets
including Treasuries, posted a 0.5% return for the same period. The latter two
indexes are unmanaged and do not include expenses.
[Begin Sidebar]
RESULTS AT A GLANCE
Class A share total returns(1) (for periods ended March 31, 2005)
SIX MONTHS 1 YEAR LIFETIME(2)
American High-Income Trust +3.1% +6.1% +9.2%
Credit Suisse First Boston High Yield Bond Index +3.4 +7.8 +9.2
Citigroup Broad Investment-Grade (BIG)
Bond Index +0.5 +1.2 +7.8
Lipper High Current Yield Bond Funds Index +3.3 +6.9 +7.3
(1) Change in value of investment with dividends and capital gain distributions
reinvested. Market indexes are unmanaged.
(2) Average annual total return since February 19, 1988.
[End Sidebar]
Shareholders who elected to take their dividends in cash had an income return of
3.7%, while the value of their holdings declined by 0.5%.
PUTTING THE SIX MONTHS IN PERSPECTIVE
For much of the period, demand for high-yield bonds remained strong, due to
solid economic growth, improving corporate profits and low default rates. By
late March, however, concerns about rising interest rates, increased leveraged
buyout activity and weakness in the auto sector put pressure on corporate bond
markets.
A closer look at American High-Income Trust's results illustrates this broader
trend: During the first five months of the period, the fund enjoyed a 6.0% total
return; in March, the last month of the period, the fund declined by 2.7%.
One reason for the recent weakness was the continued rise in interest rates. The
Federal Reserve Board raised the federal funds rate four times during the
period, from 1.75% to 2.75%. Those were followed by another quarter-percentage
point increase in May, after the close of the fiscal period. Although the
increases did not have much effect on long-term rates, they pushed short-term
rates higher and put pressure on some bond prices. We expect the Fed to continue
to raise short-term rates throughout the rest of the year.
Weakness in the auto sector also hurt the corporate bond market. In March,
General Motors issued a profit warning, which led to concerns that the company's
bonds would be downgraded. Those fears were realized when the company's ratings
were cut to below investment grade in May. As one of the largest issuers of
corporate debt, General Motors is considered a market bellwether and a dominant
force in U.S. corporate bond markets. The news rattled investors, resulting in
price declines in other sectors, including the high-yield market.
Also putting pressure on corporate bond markets has been the trend toward larger
and more aggressive leveraged buyout deals. Leveraged buyouts pose a risk for
current bondholders because they are funded by the issuance of new debt.
A FOCUS ON FUNDAMENTALS
Despite the earnings shortfalls in the auto sector and leveraged buyout activity
generally, credit conditions remain favorable, default rates are still at low
levels and corporate fundamentals are strong. At the same time, the current
market pressures are occurring during a period of historically tight spreads,
which makes investors question whether they are being sufficiently rewarded for
the risk they are taking. (Spreads reflect the yield differences between U.S.
Treasury securities, which carry no credit risk, and all other types of bonds.)
While we study such macroeconomic factors as interest rates, our main emphasis
is on fundamental research to identify companies we believe can withstand these
pressures, build their businesses and achieve the financial success that leads
to upgraded credit standings. Our research-oriented investment philosophy has
created solid returns for shareholders with a long-term perspective. For the
past 10-year period ended March 31, 2005, American High-Income Trust earned an
average annual total return of 8.4%, compared with a 6.0% return for the Lipper
High Current Yield Bond Funds Index and an 8.0% return for the Credit Suisse
First Boston High Yield Bond Index.
Going forward, we will keep looking for companies that offer the best
combination of risk and reward. We thank you for your continued support.
Cordially,
/s/ Paul G. Haaga, Jr. /s/ David C. Barclay
Paul G. Haaga, Jr. David C. Barclay
Chairman of the Board President
May 11, 2005
For current information about the fund, visit americanfunds.com.
SUMMARY INVESTMENT PORTFOLIO, MARCH 31, 2005 unaudited
The following summary investment portfolio is designed to streamline the report
and help investors better focus on a fund's principal holdings. For details on
how to obtain a complete schedule of portfolio holdings, please see the inside
back cover.
[begin pie chart]
% of Net Assets
U.S. corporate bonds & notes 70.2%
Non-U.S. corporate bonds & notes 13.4
Non-U.S. government bonds & notes 4.4
Convertible securities 2.9
Preferred stocks 2.7
Common stocks & warrants 1.1
Other 1.4
Cash & equivalents 3.9
[end pie chart]
Principal Market Percent
amount value of net
Bonds & notes - 89.39% (000) (000) assets
Corporate bonds & notes - 83.57%
Consumer discretionary - 25.17%
General Motors Corp. 7.20% 2011 $ 9,250 $8,360
General Motors Acceptance Corp. 5.11%-7.25% 2006-2014 (1) 89,000 83,103 0.94%
Cinemark USA, Inc. 9.00% 2013 56,718 61,823 .64
CanWest Media Inc. 8.00% 2012 (2) 57,733 61,052 .63
Young Broadcasting Inc. 10.00% 2011 50,560 51,950 .53
Kabel Deutschland GmbH 10.625% 2014 (2) 43,330 48,096 .49
Mohegan Tribal Gaming Authority 6.375% 2009 43,500 43,391 .45
Telenet Group Holding NV 0%/11.50% 2014 (2) (3) 54,330 41,359 .42
Quebecor Media Inc. 11.125% 2011 35,178 39,048 .40
Ford Motor Credit Co. 7.375% 2009 38,000 38,203 .39
Blockbuster Inc. 9.00% 2012 (2) 37,625 36,684 .38
Other securities 1,936,022 19.90
2,449,091 25.17
Materials - 12.22%
Lyondell Chemical Co. 9.50% 2008 10,000 10,750
Equistar Chemicals, LP 10.125% 2008 16,950 18,814
Equistar Chemicals, LP and Equistar Funding Corp.:
8.75% 2009 9,315 10,037
10.625% 2011 44,875 50,597
Millennium America Inc. 7.625%-9.25% 2008-2026 32,825 35,164 1.29
Abitibi-Consolidated Finance LP 7.875% 2009 14,500 14,536
Abitibi-Consolidated Inc. 8.55% 2010 18,045 18,406
Abitibi-Consolidated Co. of Canada 5.25%-8.375% 2006-2015 (1) 79,690 75,323 1.11
Freeport-McMoRan Copper & Gold Inc. 10.125% 2010 71,425 79,639 .82
JSG Holdings PLC 11.50% 2015 (4) (euro) 34,350 41,408 .43
AMH Holdings, Inc. 0%/11.25% 2014 (3) $ 54,450 38,115 .39
Other securities 796,268 8.18
1,189,057 12.22
Telecommunication services - 11.67%
Qwest Corp. 9.125% 2012 (2) 3,600 3,933
U S WEST Capital Funding, Inc. 6.875% 2028 9,989 7,791
Qwest Capital Funding, Inc. 7.00%-7.90% 2006-2031 65,170 62,650
Qwest Services Corp. 13.50%-14.00% 2010-2014 (2) 51,610 61,326 1.40
Crown Castle International Corp.:
7.50% 2013 42,000 46,305
Series B, 7.50% 2013 33,300 36,713
9.375%-10.75% 2011 35,750 38,657 1.25
American Cellular Corp., Series B, 10.00% 2011 57,575 53,257
Dobson Communications Corp. 8.875%-10.875% 2010-2013 47,800 40,564
Dobson Cellular Systems, Inc. 7.493%-9.875% 2011-2012 (1) (2) 25,375 26,034 1.23
Nextel Communications, Inc.:
6.875% 2013 14,500 15,189
7.375% 2015 74,675 79,249 .97
American Tower Corp.:
7.125% 2012 62,860 62,860
7.25%-9.375% 2009-2012 30,577 31,523 .97
Triton PCS, Inc.:
9.375% 2011 48,010 34,207
8.50% 2013 38,650 35,751 .72
Nextel Partners, Inc. 8.125% 2011 45,860 48,956 .50
NTELOS Inc. 7.85% 2012 (1) 38,500 39,077 .40
Cincinnati Bell Inc. 7.25% 2013 37,425 37,425 .38
Centennial Communications Corp. and Centennial Cellular Operating Co. LLC 10.125% 2013 32,555 36,136 .37
Other securities 338,184 3.48
1,135,787 11.67
Industrials - 7.47%
Horizon Lines, LLC and Horizon Lines Holding Corp. 9.00% 2012 (2) 35,820 38,327 .39
Jacuzzi Brands, Inc. 9.625% 2010 31,255 34,537 .36
Other securities 653,407 6.72
726,271 7.47
Utilities - 6.37%
Southern California Edison, First and Refunding Mortgage Bonds 8.00% 2007 1,216 1,295
Edison Mission Energy:
10.00% 2008 26,300 29,357
7.73% 2009 42,500 44,519
9.875% 2011 37,975 44,051
Mission Energy Holding Co. 13.50% 2008 36,850 44,404
Midwest Generation, LLC, Series B, 8.56% 2016 (5) 25,350 28,344
Homer City Funding LLC 8.734% 2026 (5) 9,490 11,032
Midwest Generation, LLC and Midwest Finance Corp. 8.75% 2034 19,250 21,560 2.31
AES Corp. 8.75% 2013 (2) 43,985 48,164
AES Gener SA 7.50% 2014 28,850 28,506
AES Red Oak, LLC, Series B, 9.20% 2029 (5) 7,000 7,945
AES Corp. 9.00%-9.50% 2009-2015 (2) 55,126 60,765 1.49
Dynegy Holdings Inc. 10.125% 2013 (2) 37,315 40,860 .42
Other securities 208,970 2.15
619,772 6.37
Consumer staples - 5.64%
Burns Philp Capital Pty Ltd., Series B, 9.75% 2012 59,022 64,629
Burns Philp Capital Pty Ltd. and Burns Philp Capital (U.S.) Inc., Series B, 9.50%-10.75% 2010-2011 34,575 38,216 1.06
Jean Coutu Group (PJC) Inc. 8.50% 2014 60,025 58,599 .60
Ahold Finance U.S.A., Inc. 6.25% 2009 37,070 37,904 .39
Other securities 349,053 3.59
548,401 5.64
Information technology - 4.19%
Sanmina-SCI Corp. 10.375% 2010 51,750 58,219 .60
Electronic Data Systems Corp., Series B, 6.50% 2013 (1) 41,040 42,038 .43
Solectron Corp. 9.625% 2009 38,400 41,568 .43
Micron Technology, Inc. 6.50% 2005 (2) 40,714 40,511 .42
Other securities 224,913 2.31
407,249 4.19
Energy - 4.17%
Port Arthur Finance Corp. 12.50% 2009 (5) 1,574 1,834
Premcor Refining Group Inc.:
7.75% 2012 33,650 34,912
6.125%-9.50% 2010-2015 95,600 101,247 1.42
General Maritime Corp. 10.00% 2013 40,700 45,482 .46
Petrozuata Finance, Inc., Series B, 8.22% 2017 (2) (5) 45,190 42,705 .44
Other securities 179,907 1.85
406,087 4.17
Health care - 3.88%
Quintiles Transnational Corp. 10.00% 2013 47,775 53,986 .55
Tenet Healthcare Corp. 9.875% 2014 38,700 40,442 .42
Other securities 282,850 2.91
377,278 3.88
Financials - 2.79% 271,852 2.79
Non-U.S. government bonds & notes - 4.41% 429,045 4.41
Other - 1.41% 137,383 1.41
TOTAL BONDS & NOTES (COST: $8,470,915,000) 8,697,273 89.39
Shares or principal Market Percent
amount value of net
Convertible securities - 2.93% (000) assets
Consumer discretionary - 1.08%
Amazon.com, Inc. 6.875% PEACS convertible subordinated notes 2010 (euro) 42,233,000 55,700 .57
General Motors Corp., Series B, 5.25% convertible senior debentures 2032 $ 12,500,000 9,340 .10
Other securities 39,760 .41
104,800 1.08
Other - 1.85%
American Tower Corp. 5.00% convertible debentures 2010 $ 25,925,000 25,763 .26
AES Trust VII 6.00% convertible preferred 2008 439,925 21,556 .22
Dobson Communications Corp., Series F, 6.00% convertible preferred (2) 57,760 4,447 .05
Other securities 128,247 1.32
180,013 1.85
TOTAL CONVERTIBLE SECURITIES (COST: $240,625,000) 284,813 2.93
Shares Market Percent
value of net
Warrants - 0.09% (000) assets
Other - 0.09%
American Tower Corp., warrants, expire 2008 (2) (6) 38,250 8,721 .09
Other securities 25 .00
TOTAL WARRANTS (COST: $1,233,000) 8,746 .09
Shares Market Percent
value of net
Preferred stocks - 2.67% (000) assets
Financials - 2.35%
Fuji JGB Investment LLC, Series A, 9.87% noncumulative preferred (1) (2) 61,565,000 70,203
IBJ Preferred Capital Co. LLC, Series A, 8.79% noncumulative preferred (1) (2) 51,675,000 57,444 1.31
Tokai Preferred Capital Co. LLC, Series A, 9.98% noncumulative preferred (1) (2) 29,963,000 34,216 .35
Other securities 66,502 .69
228,365 2.35
Other - 0.26%
Dobson Communications Corp.:
13.00% senior exchangeable preferred 2009 35,187 23,927
12.25% senior exchangeable preferred 2008 (4) 2,000 1,360 .26
Other securities 557 .00
25,844 .26
Miscellaneous - 0.06%
Other preferred stocks in initial period of acquisition 5,364 .06
TOTAL PREFERRED STOCKS (COST: $224,594,000) 259,573 2.67
Shares Market Percent
value of net
Common stocks - 0.98% (000) assets
Other - 0.98%
Nextel Communications, Inc., Class A (6) 613,418 17,433 .18
Dobson Communications Corp., Class A (2) (6) 5,754,785 11,625 .12
Other securities 66,982 .68
TOTAL COMMON STOCKS (COST: $131,815,000) 96,040 .98
Principal Market Percent
amount value of net
Short-term securities - 2.50% (000) (000) assets
Variable Funding Capital Corp. 2.58%-2.75% due 4/4-4/22/2005 (2) (7) $75,000 74,944 .77
Preferred Receivables Funding Corp. 2.79% due 4/26/2005 (2) (7) 36,800 36,726
Park Avenue Receivables Co., LLC 2.74% due 4/14/2005 (2) 31,400 31,367 .70
Gannett Co. 2.57%-2.64% due 4/19-5/6/2005 (2) (7) 62,000 61,904 .64
Other securities 38,354 .39
TOTAL SHORT-TERM SECURITIES (COST: $243,295,000) 243,295 2.50
TOTAL INVESTMENT SECURITIES (COST: $9,312,477,000) 9,589,740 98.56
Other assets less liabilities 139,884 1.44
NET ASSETS $9,729,624 100.00%
"Miscellaneous" securities include holdings in their initial period of
acquisition that have not previously been publicly disclosed.
"Other securities" includes all issues that are not disclosed separately 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 March 31, 2005, appear below.
BEGINNING ENDING
SHARES OR SHARES OR INTEREST MARKET
COMPANY PRINCIPAL PURCHASES SALES PRINCIPAL INCOME VALUE
AMOUNT AMOUNT (000) (000)
ZiLOG, Inc. (6) 1,140,500 - - 1,140,500 $ - $ 5,874
ZiLOG, Inc. - MOD III Inc., units (8) 1,868 - - 1,868 - -
Clarent Hospital Corp. (6) (8) 576,849 - - 576,849 - 288
AirGate PCS, Inc. 671,293 - 671,293 - - -
AirGate PCS, Inc. 9.375% 2009 (2) (9) $ 16,253,200 $ - $ 2,800,000 $ 13,453,200 733 -
AirGate PCS, Inc. 9.375% 2009 (9) $ 6,000,000 $ - $ 1,500,000 $ 4,500,000 249 -
NTELOS Inc. (2) (6) (8) (9) 1,983,310 - 1,584,156 399,154 - -
NTELOS Inc. 7.85% 2012 (1) (9) $ - $ 38,500,000 $ - $ 38,500,000 287 -
$ 1,269 $ 6,162
The following footnotes to the portfolio apply to either the individual
securities noted or one or more of the securities aggregated and listed as a
single line item.
(1) Coupon rate may change periodically.
(2) Purchased in a private placement transaction; resale may be limited to
qualified institutional buyers; resale to the public may require
registration. The total value of all such restricted securities, including
those included in "Other securities" in the summary investment portfolio,
was $2,104,806,000, which represented 21.63% of the net assets of the fund.
(3) Step bond; coupon rate will increase at a later date.
(4) Payment in kind; the issuer has the option of paying additional securities
in lieu of cash.
(5) Pass-through securities backed by a pool of mortgages or other loans on
which principal payments are periodically made. Therefore, the effective
maturities are shorter than the stated maturities.
(6) Security did not produce income during the last 12 months.
(7) This security, or a portion of this security, has been segregated to cover
funding requirements on investment transactions settling in the future.
(8) Valued under fair value procedures adopted by authority of the Board of
Trustees.
(9) Unaffiliated issuer at 3/31/05.
See Notes to Financial Statements
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES unaudited
AT MARCH 31, 2005 (DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
ASSETS:
Investment securities at market:
Unaffiliated issuers (cost: $9,290,024) $9,583,578
Affiliated issuers (cost: $22,453) 6,162 $9,589,740
Cash 20,510
Receivables for:
Sales of investments 110,394
Sales of fund's shares 21,473
Open forward currency contracts 1,515
Closed forward currency contracts 19
Dividends and interest 181,282 314,683
9,924,933
LIABILITIES:
Payables for:
Purchases of investments 148,502
Repurchases of fund's shares 35,301
Dividends on fund's shares 3,776
Open forward currency contracts 136
Closed forward currency contracts 13
Investment advisory services 2,643
Services provided by affiliates 3,567
Deferred Trustees' compensation 101
Other fees and expenses 1,270 195,309
NET ASSETS AT MARCH 31, 2005 $9,729,624
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $9,737,660
Undistributed net investment income 12,022
Accumulated net realized loss (297,680)
Net unrealized appreciation 277,622
Net assets at March 31, 2005 $9,729,624
SHARES OF BENEFICIAL INTEREST ISSUED AND OUTSTANDING - UNLIMITED SHARES
AUTHORIZED, 797,795 TOTAL SHARES OUTSTANDING
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $7,200,615 590,425 $ 12.20
Class B 785,560 64,413 12.20
Class C 813,710 66,721 12.20
Class F 576,671 47,285 12.20
Class 529-A 58,253 4,777 12.20
Class 529-B 13,970 1,146 12.20
Class 529-C 29,138 2,389 12.20
Class 529-E 3,529 289 12.20
Class 529-F 2,473 203 12.20
Class R-1 5,065 415 12.20
Class R-2 62,889 5,157 12.20
Class R-3 68,246 5,596 12.20
Class R-4 37,523 3,077 12.20
Class R-5 71,982 5,902 12.20
(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 $12.68 for
each.
See Notes to Financial Statements
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2005
INVESTMENT INCOME: unaudited
Income: (DOLLARS IN THOUSANDS)
Interest (net of non-U.S. withholding
tax of $638; also includes $1,269 from affiliates) $368,639
Dividends 5,865 $374,504
Fees and expenses:
Investment advisory services 16,283
Distribution services 18,058
Transfer agent services 3,314
Administrative services 1,800
Reports to shareholders 235
Registration statement and prospectus 306
Postage, stationery and supplies 478
Trustees' compensation 37
Auditing and legal 52
Custodian 138
State and local taxes 118
Other 67
Total expenses before reimbursements/waivers 40,886
Reimbursement/waiver of expenses 930 39,956
Net investment income 334,548
NET REALIZED GAIN AND UNREALIZED DEPRECIATION
ON INVESTMENTS AND NON-U.S. CURRENCY:
Net realized gain (loss) on:
Investments (including $35,419 net gain from affiliates) 167,363
Non-U.S. currency transactions (1,929) 165,434
Net unrealized (depreciation) appreciation on:
Investments (210,519)
Non-U.S. currency translations 1,467 (209,052)
Net realized gain and unrealized depreciation
on investments and non-U.S. currency (43,618)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $290,930
STATEMENT OF CHANGES IN NET ASSETS (DOLLARS IN THOUSANDS)
SIX MONTHS YEAR ENDED
ENDED MARCH 31, SEPTEMBER 30,
2005* 2004
OPERATIONS:
Net investment income $334,548 $638,825
Net realized gain on investments and
non-U.S. currency transactions 165,434 75,234
Net unrealized (depreciation) appreciation
on investments and non-U.S. currency translations (209,052) 164,287
Net increase in net assets
resulting from operations 290,930 878,346
DIVIDENDS PAID OR ACCRUED TO SHAREHOLDERS FROM NET INVESTMENT INCOME (348,074) (614,168)
CAPITAL SHARE TRANSACTIONS 389,922 751,870
TOTAL INCREASE IN NET ASSETS 332,778 1,016,048
NET ASSETS:
Beginning of period 9,396,846 8,380,798
End of period (including undistributed
net investment income: $12,022 and $25,548,
respectively) $9,729,624 $9,396,846
*Unaudited
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS unaudited
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - American High-Income Trust (the "fund") is registered under the
Investment Company Act of 1940 as an open-end, diversified management investment
company. The fund seeks a high level of current income and, secondarily, capital
appreciation through a diversified, carefully supervised portfolio consisting
primarily of lower rated, higher risk corporate bonds.
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:
SHARE CLASS INITIAL SALES CHARGE CONTINGENT DEFERRED SALES CONVERSION FEATURE
CHARGE UPON REDEMPTION
Classes A and 529-A Up to 3.75% 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
for redemptions within convert to classes A and
six years of purchase 529-A, respectively,
after eight years
Class C None 1% for redemptions within Class C converts to
one year of purchase Class F after 10 years
Class 529-C None 1% for redemptions within None
one year of purchase
Class 529-E None None None
Classes F and 529-F None None None
Classes R-1, R-2, R-3, None None None
R-4 and R-5
CollegeAmerica is a registered trademark of the Virginia College Savings Plan.
(SM)
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 bid prices, if
asked prices are not available) or at prices for securities of
comparable maturity, quality and type. Securities with both
fixed-income and equity characteristics, or equity securities traded
principally among fixed-income dealers, are valued in the manner
described above for either equity or fixed-income securities, depending
on which method is deemed most appropriate by the investment adviser.
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.
Forward currency contracts are valued at the mean of representative
quoted bid and asked prices. 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 Trustees. 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. In the event a security is purchased with a delayed
payment date, the fund will segregate liquid assets sufficient to meet
its payment obligations. 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) are allocated daily among the various
share classes based on the relative value of their settled shares.
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 paid to
shareholders are declared daily from net investment income and are paid
to shareholders monthly. Distributions paid to shareholders are
recorded on the ex-dividend date.
NON-U.S. CURRENCY TRANSLATION - Assets and liabilities, including
investment securities, denominated in non-U.S. currencies are
translated into U.S. dollars at the exchange rates in effect at the end
of the reporting period. Purchases and sales of investment securities
and income and expenses are translated into U.S. dollars at the
exchange rates on the dates of such transactions. In the accompanying
financial statements, the effects of changes in non-U.S. exchange rates
on investment securities are included with the net realized gain or
loss and net unrealized appreciation or depreciation on investments.
The realized gain or loss and unrealized appreciation or depreciation
resulting from all other transactions denominated in non-U.S.
currencies are disclosed separately.
FORWARD CURRENCY CONTRACTS - The fund may enter into forward currency
contracts, which represent agreements to exchange non-U.S. currencies
on specific future dates at predetermined rates. The fund enters into
these contracts to manage its exposure to changes in non-U.S. exchange
rates arising from investments denominated in non-U.S. currencies. Upon
entering into these contracts, risks may arise from the potential
inability of counterparties to meet the terms of their contracts and
from possible movements in non-U.S. exchange rates. Due to these risks,
the fund could incur losses up to the entire contract amount, which may
exceed the net unrealized value shown in the accompanying financial
statements. On a daily basis, the fund values forward currency
contracts based on the applicable exchange rates and records unrealized
gains or losses. The fund records realized gains or losses at the time
the forward contract is closed or offset by another contract with the
same broker for the same settlement date and currency.
2. NON-U.S. INVESTMENTS
INVESTMENT RISK - The risks of investing in securities of non-U.S. issuers may
include, but are not limited to, investment and repatriation restrictions;
revaluation of currencies; adverse political, social and economic developments;
government involvement in the private sector; limited and less reliable investor
information; lack of liquidity; certain local tax law considerations; and
limited regulation of the securities markets.
TAXATION - Dividend and interest income is recorded net of non-U.S. taxes paid.
Realized and unrealized gains on securities in certain countries are subject to
non-U.S. taxes. The fund records a liability based on realized and unrealized
gains to provide for potential non-U.S. taxes payable on these securities. As of
March 31, 2005, the liability for non-U.S. taxes recorded based on realized and
unrealized gains was $500,000.
3. 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
non-U.S. currency gains and losses; short-term capital gains and losses; capital
losses related to sales of certain securities within 30 days of purchase;
unrealized appreciation of certain investments in non-U.S. securities; deferred
expenses; cost of investments sold; paydowns on investments and net capital
losses. 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 March 31, 2005, the cost of investment securities, excluding
forward currency contracts, for federal income tax purposes was $9,320,147,000.
As of March 31, 2005, the components of distributable earnings on a tax basis
were as follows (dollars in thousands):
Undistributed net investment income and currency gains $39,237
Accumulated short-term capital losses (445,799)
Undistributed long-term capital gains 134,354
Gross unrealized appreciation on investment securities 526,860
Gross unrealized depreciation on investment securities (257,267)
Net unrealized appreciation on investment securities 269,593
Undistributed net investment income and currency gains above include currency
losses of $874,000 that were realized during the period November 1, 2003 through
September 30, 2004. Short-term capital loss deferrals above include capital loss
carryforwards of $161,067,000 and $300,191,000 expiring in 2010 and 2011,
respectively. The capital loss carryforwards will be used to offset any capital
gains realized by the fund in the current year or in subsequent years through
the expiration dates. The fund will not make distributions from capital gains
while capital loss carryforwards remain. During the six months ended March 31,
2005, the fund realized, on a tax basis, a net capital gain of $149,813,000.
Ordinary income distributions paid or accrued to shareholders from net
investment income and currency gains were as follows (dollars in thousands):
Share class Six months ended March 31, 2005 Year ended September 30, 2004
Class A $ 261,892 $ 464,208
Class B 26,194 48,283
Class C 26,750 50,116
Class F 21,777 36,395
Class 529-A 1,913 2,700
Class 529-B 418 603
Class 529-C 856 1,260
Class 529-E 110 150
Class 529-F 79 106
Class R-1 125 146
Class R-2 1,764 1,818
Class R-3 2,343 2,365
Class R-4 1,057 1,061
Class R-5 2,796 4,957
Total $ 348,074 $ 614,168
4. 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 provided for monthly fees accrued daily. These fees are based on a
declining series of annual rates beginning with 0.30% on the first $60 million
of daily net assets and decreasing to 0.14% on such assets in excess of $10
billion. The agreement also provides for monthly fees, accrued daily, based on a
declining series of rates beginning with 3.00% on the first $8,333,333 of the
fund's monthly gross income and decreasing to 1.50% on such income in excess of
$50,000,000. During the six months ended March 31, 2005, CRMC reduced investment
advisory services fees by $814,000. As a result, the fee shown on the
accompanying financial statements of $16,283,000, which was equivalent to an
annualized rate of 0.330%, was reduced to $15,469,000, or 0.313% 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
Trustees 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 0.30% to 1.00% as noted on the following page. In
some cases, the Board of Trustees 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 distribution expenses.
For classes A and 529-A, the Board of Trustees 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 0.30% is not exceeded. As of
March 31, 2005, there were no unreimbursed expenses subject to
reimbursement for classes A or 529-A.
SHARE CLASS CURRENTLY APPROVED LIMITS PLAN LIMITS
Class A 0.30% 0.30%
Class 529-A 0.30 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 March 31,
2005, CRMC agreed to pay a portion of these fees for classes R-1, R-2
and R-3. For the six months ended March 31, 2005, the total fees paid
by CRMC were $1,000, $113,000 and $2,000 for classes R-1, R-2 and R-3,
respectively. Administrative services fees are presented gross of any
payments made by CRMC. 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.
Expenses under the agreements described on the previous page for the
six months ended March 31, 2005, were as follows (dollars in
thousands):
SHARE CLASS DISTRIBUTION TRANSFER AGENT ADMINISTRATIVE SERVICES
SERVICES SERVICES
CRMC TRANSFER AGENT COMMONWEALTH OF
ADMINISTRATIVE SERVICES VIRGINIA
SERVICES ADMINISTRATIVE
SERVICES
Class A $8,315 $2,947 Not applicable Not applicable Not applicable
Class B 4,069 367 Not applicable Not applicable Not applicable
Class C 4,210 Included
in
administrative
services $631 $98 Not applicable
Class F 767 Included
in
administrative
services 460 73 Not applicable
Class 529-A 43 Included
in
administrative
services 40 5 $27
Class 529-B 67 Included
in
administrative
services 10 4 7
Class 529-C 137 Included
in
administrative
services 21 6 14
Class 529-E 8 Included
in
administrative
services 2 -* 1
Class 529-F 3 Included
in
administrative
services 2 -* 1
Class R-1 20 Included
in
administrative
services 3 2 Not applicable
Class R-2 208 Included
in
administrative
services 42 187 Not applicable
Class R-3 174 Included
in
administrative
services 52 48 Not applicable
Class R-4 37 Included
in
administrative
services 22 3 Not applicable
Class R-5 Not applicable Included
in
administrative
services 38 1 Not applicable
Total $18,058 $3,314 $1,323 $427 $50
* Amount less than one thousand.
DEFERRED TRUSTEES' COMPENSATION - Since the adoption of the deferred
compensation plan in 1993, Trustees 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. Trustees' compensation of $37,000, shown on the accompanying
financial statements, includes $24,000 in current fees (either paid in cash or
deferred) and a net increase of $13,000 in the value of the deferred amounts.
Affiliated officers and Trustees - Officers and certain Trustees of the fund are
or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated
officers or Trustees received any compensation directly from the fund.
5. CAPITAL SHARE TRANSACTIONS
Capital share transactions in the fund were as follows (dollars and shares in
thousands):
Share class Sales(1) Reinvestments of dividends
Amount Shares Amount Shares
Six months ended March 31, 2005
Class A $ 941,753 75,335 $ 202,709 16,222
Class B 53,508 4,284 17,904 1,433
Class C 105,676 8,454 18,598 1,488
Class F 148,873 11,912 16,164 1,293
Class 529-A 12,421 993 1,903 152
Class 529-B 1,756 141 417 34
Class 529-C 5,420 433 852 68
Class 529-E 730 58 110 9
Class 529-F 588 47 78 6
Class R-1 2,063 164 124 10
Class R-2 25,563 2,046 1,751 140
Class R-3 36,409 2,912 2,316 185
Class R-4 22,243 1,771 1,045 84
Class R-5 10,081 806 2,132 171
Total net increase
(decrease) $1,367,084 109,356 $ 266,103 21,295
Year ended September 30, 2004
Class A $1,862,662 152,602 $ 359,214 29,474
Class B 167,188 13,713 33,715 2,766
Class C 272,859 22,356 35,669 2,926
Class F 376,997 30,929 26,986 2,214
Class 529-A 20,309 1,663 2,696 221
Class 529-B 4,872 399 601 49
Class 529-C 10,770 882 1,253 103
Class 529-E 1,398 115 149 12
Class 529-F 1,069 88 105 9
Class R-1 2,961 244 144 12
Class R-2 37,305 3,059 1,799 148
Class R-3 53,552 4,384 2,343 193
Class R-4 18,450 1,510 1,056 87
Class R-5 30,926 2,547 3,159 259
Total net increase
(decrease) $2,861,318 234,491 $ 468,889 38,473
Share class Repurchases(1) Net increase (decrease)
Amount Shares Amount Shares
Six months ended March 31, 2005
Class A $ (821,552) (65,779) $ 322,910 25,778
Class B (76,374) (6,116) (4,962) (399)
Class C (118,006) (9,448) 6,268 494
Class F (162,816) (13,065) 2,221 140
Class 529-A (3,088) (246) 11,236 899
Class 529-B (409) (33) 1,764 142
Class 529-C (1,853) (148) 4,419 353
Class 529-E (147) (12) 693 55
Class 529-F (231) (18) 435 35
Class R-1 (417) (33) 1,770 141
Class R-2 (7,488) (602) 19,826 1,584
Class R-3 (28,299) (2,254) 10,426 843
Class R-4 (8,690) (693) 14,598 1,162
Class R-5 (13,895) (1,110) (1,682) (133)
Total net increase
(decrease) $ (1,243,265) (99,557) $ 389,922 31,094
Year ended September 30, 2004
Class A $ (1,731,964) (142,224) $ 489,912 39,852
Class B (165,278) (13,595) 35,625 2,884
Class C (292,482) (24,036) 16,046 1,246
Class F (312,222) (25,587) 91,761 7,556
Class 529-A (4,860) (398) 18,145 1,486
Class 529-B (630) (52) 4,843 396
Class 529-C (3,804) (312) 8,219 673
Class 529-E (274) (23) 1,273 104
Class 529-F (168) (14) 1,006 83
Class R-1 (901) (74) 2,204 182
Class R-2 (10,667) (875) 28,437 2,332
Class R-3 (12,081) (993) 43,814 3,584
Class R-4 (5,080) (418) 14,426 1,179
Class R-5 (37,926) (3,102) (3,841) (296)
Total net increase
(decrease) $ (2,578,337) (211,703) $ 751,870 61,261
(1) Includes exchanges between share classes of the fund.
6. FORWARD CURRENCY CONTRACTS
As of March 31, 2005, the fund had open forward currency contracts to sell
non-U.S. currencies as follows:
NON-U.S. CURRENCY CONTRACTS CONTRACT AMOUNT U.S. VALUATIONS AT MARCH 31, 2005
UNREALIZED
NON-U.S. U.S. AMOUNT APPRECIATION
(000) (000) (000) (000)
Sales:
Euros
expiring 4/29/2005 to 2/24/2006 (euro) 77,050 $101,477 $100,098 $1,379
7. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, excluding short-term
securities, of $2,067,989,000 and $1,670,515,000, respectively, during the six
months ended March 31, 2005.
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 March 31, 2005, the custodian fee of $138,000, shown on the
accompanying financial statements, includes $125,000 that was offset by this
reduction, rather than paid in cash.
FINANCIAL HIGHLIGHTS (1)
Income (loss) from investment operations(2)
Net
Net asset (losses) gains
value, Net on securities Total from
beginning investment (both realized investment
of period income and unrealized) operations
Class A:
Six months ended 3/31/2005 (5) $12.26 $.43 $(.04) $.39
Year ended 9/30/2004 11.88 .87 .35 1.22
Year ended 9/30/2003 9.62 .93 2.25 3.18
Year ended 9/30/2002 11.27 1.08 (1.65) (.57)
Year ended 9/30/2001 12.93 1.20 (1.61) (.41)
Year ended 9/30/2000 13.52 1.18 (.48) .70
Class B:
Six months ended 3/31/2005 (5) 12.26 .38 (.04) .34
Year ended 9/30/2004 11.88 .78 .35 1.13
Year ended 9/30/2003 9.62 .84 2.25 3.09
Year ended 9/30/2002 11.27 1.00 (1.65) (.65)
Year ended 9/30/2001 12.93 1.10 (1.61) (.51)
Period from 3/15/2000 to 9/30/2000 13.57 .52 (.53) (.01)
Class C:
Six months ended 3/31/2005 (5) 12.26 .38 (.04) .34
Year ended 9/30/2004 11.88 .77 .35 1.12
Year ended 9/30/2003 9.62 .83 2.25 3.08
Year ended 9/30/2002 11.27 .99 (1.65) (.66)
Period from 3/15/2001 to 9/30/2001 12.48 .53 (1.15) (.62)
Class F:
Six months ended 3/31/2005 (5) 12.26 .43 (.04) .39
Year ended 9/30/2004 11.88 .86 .35 1.21
Year ended 9/30/2003 9.62 .92 2.25 3.17
Year ended 9/30/2002 11.27 1.07 (1.65) (.58)
Period from 3/15/2001 to 9/30/2001 12.48 .57 (1.15) (.58)
Class 529-A:
Six months ended 3/31/2005 (5) 12.26 .43 (.04) .39
Year ended 9/30/2004 11.88 .86 .35 1.21
Year ended 9/30/2003 9.62 .92 2.25 3.17
Period from 2/19/2002 to 9/30/2002 11.37 .65 (1.76) (1.11)
Class 529-B:
Six months ended 3/31/2005 (5) 12.26 .37 (.04) .33
Year ended 9/30/2004 11.88 .75 .35 1.10
Year ended 9/30/2003 9.62 .82 2.25 3.07
Period from 2/25/2002 to 9/30/2002 11.23 .59 (1.63) (1.04)
Class 529-C:
Six months ended 3/31/2005 (5) 12.26 .37 (.04) .33
Year ended 9/30/2004 11.88 .75 .35 1.10
Year ended 9/30/2003 9.62 .82 2.25 3.07
Period from 2/19/2002 to 9/30/2002 11.37 .60 (1.76) (1.16)
Class 529-E:
Six months ended 3/31/2005 (5) 12.26 .40 (.04) .36
Year ended 9/30/2004 11.88 .82 .35 1.17
Year ended 9/30/2003 9.62 .88 2.25 3.13
Period from 3/15/2002 to 9/30/2002 11.57 .57 (1.96) (1.39)
Class 529-F:
Six months ended 3/31/2005 (5) 12.26 .42 (.04) .38
Year ended 9/30/2004 11.88 .85 .35 1.20
Year ended 9/30/2003 9.62 .91 2.25 3.16
Period from 9/16/2002 to 9/30/2002 9.88 .08 (.30) (.22)
Class R-1:
Six months ended 3/31/2005 (5) 12.26 .38 (.04) .34
Year ended 9/30/2004 11.88 .76 .35 1.11
Year ended 9/30/2003 9.62 .83 2.25 3.08
Period from 7/11/2002 to 9/30/2002 10.00 .23 (.40) (.17)
Class R-2:
Six months ended 3/31/2005 (5) 12.26 .38 (.04) .34
Year ended 9/30/2004 11.88 .77 .35 1.12
Year ended 9/30/2003 9.62 .84 2.25 3.09
Period from 6/18/2002 to 9/30/2002 10.76 .31 (1.18) (.87)
Class R-3:
Six months ended 3/31/2005 (5) 12.26 .40 (.04) .36
Year ended 9/30/2004 11.88 .82 .35 1.17
Year ended 9/30/2003 9.62 .88 2.25 3.13
Period from 6/21/2002 to 9/30/2002 10.60 .31 (1.01) (.70)
Class R-4:
Six months ended 3/31/2005 (5) 12.26 .43 (.04) .39
Year ended 9/30/2004 11.88 .86 .35 1.21
Year ended 9/30/2003 9.62 .92 2.25 3.17
Period from 7/19/2002 to 9/30/2002 9.97 .22 (.38) (.16)
Class R-5:
Six months ended 3/31/2005 (5) 12.26 .45 (.04) .41
Year ended 9/30/2004 11.88 .90 .35 1.25
Year ended 9/30/2003 9.62 .95 2.25 3.20
Period from 5/15/2002 to 9/30/2002 11.30 .42 (1.70) (1.28)
Dividends
(from net Net asset Net assets,
investment value, end Total end of period
income) of period return (3) (in millions)
Class A:
Six months ended 3/31/2005 (5) $(.45) $12.20 3.15% $7,201
Year ended 9/30/2004 (.84) 12.26 10.57 6,920
Year ended 9/30/2003 (.92) 11.88 34.30 6,235
Year ended 9/30/2002 (1.08) 9.62 (5.88) 3,327
Year ended 9/30/2001 (1.25) 11.27 (3.44) 2,936
Year ended 9/30/2000 (1.29) 12.93 5.29 2,788
Class B:
Six months ended 3/31/2005 (5) (.40) 12.20 2.75 786
Year ended 9/30/2004 (.75) 12.26 9.71 794
Year ended 9/30/2003 (.83) 11.88 33.28 736
Year ended 9/30/2002 (1.00) 9.62 (6.57) 294
Year ended 9/30/2001 (1.15) 11.27 (4.17) 123
Period from 3/15/2000 to 9/30/2000 (.63) 12.93 (.05) 27
Class C:
Six months ended 3/31/2005 (5) (.40) 12.20 2.71 814
Year ended 9/30/2004 (.74) 12.26 9.62 812
Year ended 9/30/2003 (.82) 11.88 33.17 772
Year ended 9/30/2002 (.99) 9.62 (6.65) 262
Period from 3/15/2001 to 9/30/2001 (.59) 11.27 (5.11) 44
Class F:
Six months ended 3/31/2005 (5) (.45) 12.20 3.09 577
Year ended 9/30/2004 (.83) 12.26 10.44 578
Year ended 9/30/2003 (.91) 11.88 34.17 470
Year ended 9/30/2002 (1.07) 9.62 (5.95) 156
Period from 3/15/2001 to 9/30/2001 (.63) 11.27 (4.86) 32
Class 529-A:
Six months ended 3/31/2005 (5) (.45) 12.20 3.09 58
Year ended 9/30/2004 (.83) 12.26 10.48 48
Year ended 9/30/2003 (.91) 11.88 34.17 28
Period from 2/19/2002 to 9/30/2002 (.64) 9.62 (10.11) 7
Class 529-B:
Six months ended 3/31/2005 (5) (.39) 12.20 2.64 14
Year ended 9/30/2004 (.72) 12.26 9.47 12
Year ended 9/30/2003 (.81) 11.88 33.01 7
Period from 2/25/2002 to 9/30/2002 (.57) 9.62 (9.54) 2
Class 529-C:
Six months ended 3/31/2005 (5) (.39) 12.20 2.65 29
Year ended 9/30/2004 (.72) 12.26 9.49 25
Year ended 9/30/2003 (.81) 11.88 33.03 16
Period from 2/19/2002 to 9/30/2002 (.59) 9.62 (10.52) 4
Class 529-E:
Six months ended 3/31/2005 (5) (.42) 12.20 2.92 4
Year ended 9/30/2004 (.79) 12.26 10.06 3
Year ended 9/30/2003 (.87) 11.88 33.73 2
Period from 3/15/2002 to 9/30/2002 (.56) 9.62 (12.29) - (7)
Class 529-F:
Six months ended 3/31/2005 (5) (.44) 12.20 3.04 2
Year ended 9/30/2004 (.82) 12.26 10.34 2
Year ended 9/30/2003 (.90) 11.88 34.06 1
Period from 9/16/2002 to 9/30/2002 (.04) 9.62 (2.23) - (7)
Class R-1:
Six months ended 3/31/2005 (5) (.40) 12.20 2.70 5
Year ended 9/30/2004 (.73) 12.26 9.59 3
Year ended 9/30/2003 (.82) 11.88 33.16 1
Period from 7/11/2002 to 9/30/2002 (.21) 9.62 (1.70) - (7)
Class R-2:
Six months ended 3/31/2005 (5) (.40) 12.20 2.71 63
Year ended 9/30/2004 (.74) 12.26 9.63 44
Year ended 9/30/2003 (.83) 11.88 33.21 15
Period from 6/18/2002 to 9/30/2002 (.27) 9.62 (8.05) - (7)
Class R-3:
Six months ended 3/31/2005 (5) (.42) 12.20 2.91 68
Year ended 9/30/2004 (.79) 12.26 10.05 58
Year ended 9/30/2003 (.87) 11.88 33.71 14
Period from 6/21/2002 to 9/30/2002 (.28) 9.62 (6.63) 1
Class R-4:
Six months ended 3/31/2005 (5) (.45) 12.20 3.10 37
Year ended 9/30/2004 (.83) 12.26 10.45 24
Year ended 9/30/2003 (.91) 11.88 34.17 9
Period from 7/19/2002 to 9/30/2002 (.19) 9.62 (1.58) - (7)
Class R-5:
Six months ended 3/31/2005 (5) (.47) 12.20 3.26 72
Year ended 9/30/2004 (.87) 12.26 10.80 74
Year ended 9/30/2003 (.94) 11.88 34.61 75
Period from 5/15/2002 to 9/30/2002 (.40) 9.62 (11.41) 42
Ratio of expenses Ratio of expenses
to average net to average net Ratio of
assets before assets after net income
reimbursements/ reimbursements/ to average
waivers waivers(4) net assets
Class A:
Six months ended 3/31/2005 (5) .67% (6) .65% (6) 6.92% (6)
Year ended 9/30/2004 .67 .67 7.19
Year ended 9/30/2003 .75 .75 8.49
Year ended 9/30/2002 .88 .88 9.99
Year ended 9/30/2001 .83 .83 9.75
Year ended 9/30/2000 .82 .82 8.87
Class B:
Six months ended 3/31/2005 (5) 1.45 (6) 1.43 (6) 6.15 (6)
Year ended 9/30/2004 1.46 1.46 6.40
Year ended 9/30/2003 1.51 1.51 7.63
Year ended 9/30/2002 1.59 1.59 9.28
Year ended 9/30/2001 1.57 1.57 8.75
Period from 3/15/2000 to 9/30/2000 1.52 (6) 1.52 (6) 8.18 (6)
Class C:
Six months ended 3/31/2005 (5) 1.53 (6) 1.52 (6) 6.06 (6)
Year ended 9/30/2004 1.54 1.54 6.31
Year ended 9/30/2003 1.60 1.60 7.49
Year ended 9/30/2002 1.67 1.67 9.21
Period from 3/15/2001 to 9/30/2001 1.70 (6) 1.70 (6) 8.54 (6)
Class F:
Six months ended 3/31/2005 (5) .78 (6) .76 (6) 6.81 (6)
Year ended 9/30/2004 .79 .78 7.05
Year ended 9/30/2003 .84 .84 8.26
Year ended 9/30/2002 .93 .93 9.95
Period from 3/15/2001 to 9/30/2001 .93 (6) .93 (6) 9.32 (6)
Class 529-A:
Six months ended 3/31/2005 (5) .77 (6) .75 (6) 6.82 (6)
Year ended 9/30/2004 .76 .76 7.12
Year ended 9/30/2003 .77 .77 8.36
Period from 2/19/2002 to 9/30/2002 1.07 (6) 1.07 (6) 10.40 (6)
Class 529-B:
Six months ended 3/31/2005 (5) 1.66 (6) 1.65 (6) 5.94 (6)
Year ended 9/30/2004 1.67 1.67 6.20
Year ended 9/30/2003 1.73 1.73 7.36
Period from 2/25/2002 to 9/30/2002 1.82 (6) 1.82 (6) 9.67 (6)
Class 529-C:
Six months ended 3/31/2005 (5) 1.65 (6) 1.64 (6) 5.95 (6)
Year ended 9/30/2004 1.66 1.66 6.21
Year ended 9/30/2003 1.71 1.71 7.43
Period from 2/19/2002 to 9/30/2002 1.80 (6) 1.80 (6) 9.65 (6)
Class 529-E:
Six months ended 3/31/2005 (5) 1.13 (6) 1.11 (6) 6.48 (6)
Year ended 9/30/2004 1.13 1.13 6.75
Year ended 9/30/2003 1.18 1.18 7.94
Period from 3/15/2002 to 9/30/2002 1.27 (6) 1.27 (6) 10.45 (6)
Class 529-F:
Six months ended 3/31/2005 (5) .88 (6) .86 (6) 6.73 (6)
Year ended 9/30/2004 .88 .88 6.99
Year ended 9/30/2003 .92 .92 7.96
Period from 9/16/2002 to 9/30/2002 .05 .05 .77
Class R-1:
Six months ended 3/31/2005 (5) 1.62 (6) 1.54 (6) 6.06 (6)
Year ended 9/30/2004 1.68 1.56 6.32
Year ended 9/30/2003 2.01 1.60 7.20
Period from 7/11/2002 to 9/30/2002 2.07 .38 2.32
Class R-2:
Six months ended 3/31/2005 (5) 1.93 (6) 1.50 (6) 6.09 (6)
Year ended 9/30/2004 2.10 1.53 6.36
Year ended 9/30/2003 2.31 1.57 7.34
Period from 6/18/2002 to 9/30/2002 .85 .48 3.17
Class R-3:
Six months ended 3/31/2005 (5) 1.14 (6) 1.12 (6) 6.46 (6)
Year ended 9/30/2004 1.15 1.14 6.76
Year ended 9/30/2003 1.28 1.18 7.74
Period from 6/21/2002 to 9/30/2002 .51 .36 3.21
Class R-4:
Six months ended 3/31/2005 (5) .77 (6) .76 (6) 6.85 (6)
Year ended 9/30/2004 .79 .78 7.11
Year ended 9/30/2003 .86 .83 8.13
Period from 7/19/2002 to 9/30/2002 9.55 .14 2.25
Class R-5:
Six months ended 3/31/2005 (5) .46 (6) .44 (6) 7.14 (6)
Year ended 9/30/2004 .47 .47 7.39
Year ended 9/30/2003 .52 .52 8.77
Period from 5/15/2002 to 9/30/2002 .23 .23 4.25
SIX MONTHS ENDED
MARCH 31, YEAR ENDED SEPTEMBER 30
2005(5) 2004 2003 2002 2001 2000
Portfolio turnover rate for all classes of shares 18% 39% 41% 34% 44% 46%
(1) Based on operations for the period shown (unless otherwise noted) and,
accordingly, may not be representative of a full year.
(2) 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/waivers from CRMC. During some of the periods shown, CRMC
reduced fees for investment advisory 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.
(5) Unaudited.
(6) Annualized.
(7) Amount less than $1 million.
See Notes to Financial Statements
OTHER SHARE CLASS RESULTS Class B, Class C, Class F and Class 529 unaudited
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.
AVERAGE ANNUAL TOTAL RETURNS FOR
PERIODS ENDED MARCH 31, 2005: 1 year 5 years 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 +0.37% +6.20% +5.91%(1)
Not reflecting CDSC +5.31% +6.48% +6.05%(1)
CLASS C SHARES
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase +4.23% -- +7.27%(2)
Not reflecting CDSC +5.22% -- +7.27%(2)
CLASS F SHARES(3)
Not reflecting annual asset-based fee charged
by sponsoring firm +6.02% -- +8.04%(2)
CLASS 529-A SHARES
Reflecting 3.75% maximum sales charge +2.05% -- +9.40%(4)
Not reflecting maximum sales charge +6.02% -- +10.74%(4)
class 529-b shares
Reflecting applicable CDSC, maximum of 5%,
payable only if shares are sold within six
years of purchase +0.14% -- +9.44%(5)
Not reflecting CDSC +5.09% -- +10.24%(5)
CLASS 529-C SHARES
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase +4.11% -- +9.81%(4)
Not reflecting CDSC +5.09% -- +9.81%(4)
CLASS 529-E SHARES(3) +5.65% -- +9.78%(6)
CLASS 529-F SHARES(3)
Not reflecting annual asset-based fee charged
by sponsoring firm +5.91% -- +17.03%(7)
The fund's investment adviser is waiving a portion of its management fees.
Results shown reflect the waiver, without which they would have been lower.
Please see the Financial Highlights table on page 24 for details.
(1) From March 15, 2000, when Class B shares were first sold.
(2) From March 15, 2001, when Class C and Class F shares were first sold.
(3) These shares are sold without any initial or contingent deferred sales
charge.
(4) From February 19, 2002, when Class 529-A and Class 529-C shares were first
sold.
(5) From February 25, 2002, when Class 529-B shares were first sold.
(6) From March 15, 2002, when Class 529-E shares were first sold.
(7) From September 16, 2002, when Class 529-F shares were first sold.
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 (October
1, 2004 through March 31, 2005).
ACTUAL EXPENSES:
The first line of each share class in the table on page 31 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 0.75% to 1.50% of assets annually depending on services
offered. You can estimate the impact of these fees by adding the amount of the
fees to the total estimated expenses you paid on your account during the period
as calculated above. In addition, your ending account value would also be lower
by the amount of these fees.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES:
The second line of each share class in the table on page 31 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
0.75% to 1.50% of assets annually depending on services offered. You can
estimate the impact of these fees by adding the amount of the fees to the total
estimated expenses you paid on your account during the period as calculated on
the previous page. In addition, your ending account value would also be lower by
the amount of these fees.
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 EXPENSES ANNUALIZED
ACCOUNT ACCOUNT AID DURING EXPENSE RATIO
VALUE VALUE PERIOD(1)
10/1/2004 3/31/2005
Class A -- actual return $1,000.00 $1,031.48 $3.29 .65%
Class A -- assumed 5% return 1,000.00 1,021.69 3.28 .65
Class B -- actual return 1,000.00 1,027.50 7.23 1.43
Class B -- assumed 5% return 1,000.00 1,017.80 7.19 1.43
Class C -- actual return 1,000.00 1,027.07 7.68 1.52
Class C -- assumed 5% return 1,000.00 1,017.35 7.64 1.52
Class F -- actual return 1,000.00 1,030.92 3.85 .76
Class F -- assumed 5% return 1,000.00 1,021.14 3.83 .76
Class 529-A -- actual return 1,000.00 1,030.94 3.80 .75
Class 529-A -- assumed 5% return 1,000.00 1,021.19 3.78 .75
Class 529-B -- actual return 1,000.00 1,026.43 8.34 1.65
Class 529-B -- assumed 5% return 1,000.00 1,016.70 8.30 1.65
Class 529-C -- actual return 1,000.00 1,026.48 8.29 1.64
Class 529-C -- assumed 5% return 1,000.00 1,016.75 8.25 1.64
Class 529-E -- actual return 1,000.00 1,029.18 5.62 1.11
Class 529-E -- assumed 5% return 1,000.00 1,019.40 5.59 1.11
Class 529-F -- actual return 1,000.00 1,030.43 4.35 .86
Class 529-F -- assumed 5% return 1,000.00 1,020.64 4.33 .86
Class R-1 -- actual return 1,000.00 1,026.96 7.78 1.54
Class R-1 -- assumed 5% return 1,000.00 1,017.25 7.75 1.54
Class R-2 -- actual return 1,000.00 1,027.15 7.58 1.50
Class R-2 -- assumed 5% return 1,000.00 1,017.45 7.54 1.50
Class R-3 -- actual return 1,000.00 1,029.12 5.67 1.12
Class R-3 -- assumed 5% return 1,000.00 1,019.35 5.64 1.12
Class R-4 -- actual return 1,000.00 1,030.97 3.85 .76
Class R-4 -- assumed 5% return 1,000.00 1,021.14 3.83 .76
Class R-5 -- actual return 1,000.00 1,032.58 2.23 .44
Class R-5 -- assumed 5% return 1,000.00 1,022.74 2.22 .44
(1) 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 (182), and divided by 365 (to reflect the one-half year period).
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
Paul, Hastings, Janofsky & Walker LLP
515 South Flower Street
Los Angeles, CA 90071-2228
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
695 Town Center Drive
Suite 1200
Costa Mesa, CA 92626-7188
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
There are several ways to invest in American High-Income Trust. Class A shares
are subject to a 3.75% maximum up-front sales charge that declines for accounts
(and aggregated investments) of $100,000 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") of up to 5% that declines over time. Class C shares were
subject to annualized expenses 0.87 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
0.11 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 March 31, 2005, portfolio of American High-Income Trust's investments
is available free of charge on the SEC website or upon request by calling AFS.
American High-Income Trust 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. This
form is available free of charge on the SEC website or upon request by calling
AFS. You may also review or, for a fee, copy the form at the SEC's Public
Reference Room in Washington, D.C. (800/SEC-0330).
This report is for the information of shareholders of American High-Income
Trust, 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, 2005, 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 30 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. More than half 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-921-0505P
Litho in USA RCG/AL/8076-S1928
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 - Schedule of Investments
[logo - AMERICAN FUNDS (R)]
AMERICAN HIGH-INCOME TRUST
INVESTMENT PORTFOLIO
March 31, 2005 unaudited
Principal amount Market value
Bonds & notes -- 89.39% (000) (000)
CORPORATE BONDS & NOTES -- 83.57%
CONSUMER DISCRETIONARY -- 25.17%
General Motors Acceptance Corp. 6.125% 2006 $ 5,000 $ 4,979
General Motors Acceptance Corp. 6.125% 2007 20,500 20,001
General Motors Acceptance Corp. 6.15% 2007 10,000 9,814
General Motors Acceptance Corp. 6.875% 2011 12,000 10,872
General Motors Corp. 7.20% 2011 9,250 8,360
General Motors Acceptance Corp. 7.25% 2011 16,000 14,872
General Motors Acceptance Corp. 6.875% 2012 19,500 17,399
General Motors Acceptance Corp. 5.11% 2014(1) 6,000 5,166
Ford Motor Credit Co. 6.875% 2006 6,000 6,083
Ford Motor Credit Co. 6.50% 2007 3,000 3,032
Ford Motor Credit Co. 7.375% 2009 38,000 38,203
Ford Motor Credit Co. 7.25% 2011 16,000 15,809
Ford Motor Credit Co. 7.375% 2011 24,000 23,873
Cinemark USA, Inc. 9.00% 2013 56,718 61,823
Cinemark, Inc. 0%/9.75% 2014(2) 33,050 23,631
CanWest Media Inc., Series B, 10.625% 2011 16,100 17,629
CanWest Media Inc. 8.00% 2012(3) 57,733 61,052
CanWest Media Inc., Series B, 7.625% 2013 3,625 3,842
CCH II, LLC and CCH II Capital Corp. 10.25% 2010 30,125 30,878
Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corp. 0%/13.50% 2011(2) 5,525 4,448
Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corp. 0%/11.75% 2011(2) 6,000 4,170
Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corp. 0%/12.125% 2012(2) 2,850 1,795
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.00% 2012(3) 17,175 17,175
CCO Holdings, LLC and CCO Holdings Capital Corp. 8.75% 2013 21,825 21,934
Young Broadcasting Inc. 8.50% 2008 12,350 12,998
Young Broadcasting Inc. 10.00% 2011 50,560 51,950
Young Broadcasting Inc. 8.75% 2014 1,575 1,500
Technical Olympic USA, Inc. 9.00% 2010 24,861 25,980
Technical Olympic USA, Inc. 9.00% 2010 5,930 6,167
Technical Olympic USA, Inc. 7.50% 2011 10,000 9,650
Technical Olympic USA, Inc. 10.375% 2012 22,180 24,398
Royal Caribbean Cruises Ltd. 7.00% 2007 18,168 19,054
Royal Caribbean Cruises Ltd. 6.75% 2008 6,840 7,139
Royal Caribbean Cruises Ltd. 8.00% 2010 12,850 14,183
Royal Caribbean Cruises Ltd. 8.75% 2011 15,350 17,518
Royal Caribbean Cruises Ltd. 6.875% 2013 7,500 7,856
Telenet Communications NV 9.00% 2013 (euro)16,575 24,116
Telenet Group Holding NV 0%/11.50% 2014(2,3) $54,330 41,359
Six Flags, Inc. 8.875% 2010 34,625 32,721
Six Flags, Inc. 9.75% 2013 16,125 15,117
Six Flags, Inc. 9.625% 2014 16,625 15,420
Mohegan Tribal Gaming Authority 6.375% 2009 43,500 43,391
Mohegan Tribal Gaming Authority 8.00% 2012 7,775 8,280
Mohegan Tribal Gaming Authority 7.125% 2014 4,850 4,886
AMC Entertainment Inc. 9.50% 2011 7,307 7,526
AMC Entertainment Inc. 8.625% 2012(3) 11,250 12,037
AMC Entertainment Inc. 9.875% 2012 18,150 19,239
AMC Entertainment Inc. 8.00% 2014 16,340 15,686
Tenneco Automotive Inc., Series B, 10.25% 2013 19,725 22,092
Tenneco Automotive Inc. 8.625% 2014(3) 30,500 29,814
William Lyon Homes, Inc. 7.625% 2012 9,250 8,695
William Lyon Homes, Inc. 10.75% 2013 20,395 22,536
William Lyon Homes, Inc. 7.50% 2014 19,935 18,340
J.C. Penney Co., Inc. 8.00% 2010 25,995 26,125
J.C. Penney Co., Inc. 9.00% 2012 3,005 3,140
J.C. Penney Co., Inc. 6.875% 2015 7,920 7,247
J.C. Penney Co., Inc. 7.95% 2017 7,200 6,876
J.C. Penney Co., Inc. 8.125% 2027 6,100 5,947
Kabel Deutschland GmbH 10.625% 2014(3) 43,330 48,096
Delphi Automotive Systems Corp. 6.50% 2009 32,500 29,262
Delphi Corp. 6.50% 2013 17,190 14,149
Delphi Automotive Systems Corp. 7.125% 2029 3,000 2,390
Delphi Trust II, trust preferred securities, 6.197% 2033(1) 4,500 2,280
Grupo Posadas, SA de CV 8.75% 2011(3) 22,050 23,593
Grupo Posadas, SA de CV 8.75% 2011(3) 21,795 23,321
D.R. Horton, Inc. 5.00% 2009 4,000 3,916
D.R. Horton, Inc. 8.00% 2009 18,270 19,734
D.R. Horton, Inc. 9.75% 2010 3,000 3,497
D.R. Horton, Inc. 7.875% 2011 2,030 2,228
Schuler Homes, Inc. 10.50% 2011 4,280 4,755
D.R. Horton, Inc. 6.875% 2013 4,075 4,248
D.R. Horton, Inc. 5.625% 2014 8,000 7,635
Quebecor Media Inc. 0%/13.75% 2011(2) 1,520 1,497
Quebecor Media Inc. 11.125% 2011 35,178 39,048
Sun Media Corp. 7.625% 2013 4,250 4,537
Boyd Gaming Corp. 9.25% 2009 6,595 7,015
Boyd Gaming Corp. 7.75% 2012 27,150 28,575
Boyd Gaming Corp. 8.75% 2012 4,500 4,894
Boyd Gaming Corp. 6.75% 2014 3,000 2,977
K. Hovnanian Enterprises, Inc. 10.50% 2007 12,480 14,040
K. Hovnanian Enterprises, Inc. 6.00% 2010(3) 4,500 4,419
K. Hovnanian Enterprises, Inc. 8.875% 2012 13,475 14,486
K. Hovnanian Enterprises, Inc. 7.75% 2013 5,000 5,137
K. Hovnanian Enterprises, Inc. 6.375% 2014 3,000 2,910
Blockbuster Inc. 9.00% 2012(3) 37,625 36,684
Toys "R" Us, Inc. 7.625% 2011 480 454
Toys "R" Us, Inc. 7.875% 2013 34,095 30,600
Toys "R" Us, Inc. 7.375% 2018 5,300 4,452
Mirage Resorts, Inc. 6.75% 2007 5,700 5,828
Mirage Resorts, Inc. 6.75% 2008 4,800 4,926
MGM MIRAGE 6.00% 2009 18,500 18,338
MGM MIRAGE 8.50% 2010 3,100 3,410
MGM MIRAGE 6.75% 2012 1,700 1,721
NTL Cable PLC 8.75% 2014(1,3) 19,500 21,109
NTL Cable PLC 8.75% 2014 (euro)4,500 6,241
NTL Cable PLC 9.75% 2014(3) (pound)3,000 5,847
WCI Communities, Inc. 10.625% 2011 $21,925 23,871
WCI Communities, Inc. 9.125% 2012 8,450 9,084
Saks Inc. 7.50% 2010 9,975 9,726
Saks Inc. 9.875% 2011 11,992 13,011
Saks Inc. 7.375% 2019 11,075 9,967
ITT Corp. 6.75% 2005 10,500 10,631
Starwood Hotels & Resorts Worldwide, Inc. 7.375% 2007 3,875 4,020
Starwood Hotels & Resorts Worldwide, Inc. 7.875% 2012 15,325 16,819
DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. 8.375% 2013 28,900 31,429
Circus and Eldorado Joint Venture and Silver Legacy Resort Casino 10.125% 2012 28,180 30,364
Gaylord Entertainment Co. 8.00% 2013 16,315 16,968
Gaylord Entertainment Co. 6.75% 2014(3) 13,600 12,954
Carmike Cinemas, Inc. 7.50% 2014 30,025 29,612
Visteon Corp. 8.25% 2010 27,250 26,024
Visteon Corp. 7.00% 2014 2,615 2,236
Dillard's, Inc. 6.69% 2007 8,000 8,300
Dillard's, Inc. 6.30% 2008 2,950 2,943
Dillard's, Inc. 6.625% 2008 5,115 5,128
Dillard Department Stores, Inc. 7.85% 2012 5,650 5,763
Dillard's, Inc. 6.625% 2018 3,000 2,685
Dillard's, Inc. 7.00% 2028 3,000 2,640
Liberty Media Corp. 7.75% 2009 4,750 5,124
Liberty Media Corp. 7.875% 2009 5,500 5,958
Liberty Media Corp. 8.25% 2030 15,200 15,454
Dex Media East LLC, Dex Media East Finance Co., Series B, 9.875% 2009 5,000 5,525
Dex Media West LLC and Dex Media West Finance Co., Series B, 5.875% 2011 11,500 11,097
Dex Media, Inc., Series B, 0%/9.00% 2013(2) 9,000 6,885
Dex Media, Inc., Series B, 8.00% 2013 2,125 2,210
Warnaco, Inc. 8.875% 2013 22,375 24,109
Payless ShoeSource, Inc. 8.25% 2013 23,400 24,102
Argosy Gaming Co. 7.00% 2014 22,030 23,930
Gray Communications Systems, Inc. 9.25% 2011 20,800 22,568
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. 6.625% 2014(3) 23,600 22,538
Stoneridge, Inc. 11.50% 2012 18,690 20,793
AOL Time Warner Inc. 6.15% 2007 20,000 20,654
Lenfest Communications, Inc. 7.625% 2008 6,750 7,218
Comcast Corp. 10.625% 2012 2,245 2,871
TCI Communications, Inc. 8.75% 2015 7,500 9,396
Century Communications Corp. 0% 2003(4) 4,565 4,177
Adelphia Communications Corp. 10.25% 2006(5) 9,955 8,711
Adelphia Communications Corp. 10.25% 2011(5) 6,850 6,353
Buffets, Inc. 11.25% 2010 17,900 18,974
Harrah's Operating Co., Inc. 7.875% 2005 10,875 11,120
Harrah's Operating Co., Inc. 7.125% 2007 3,850 4,047
Harrah's Operating Co., Inc. 8.00% 2011 3,189 3,623
PETCO Animal Supplies, Inc. 10.75% 2011 14,685 16,521
NextMedia Operating, Inc. 10.75% 2011 15,000 16,444
Aztar Corp. 7.875% 2014 14,750 15,746
RH Donnelley Inc. 8.875% 2010(3) 10,605 11,612
RH Donnelley Inc. 10.875% 2012(3) 3,000 3,472
MDC Holdings, Inc. 7.00% 2012 10,000 10,881
MDC Holdings, Inc. 5.50% 2013 4,000 3,955
Regal Cinemas Corp., Series B, 9.375% 2012(6) 13,300 14,487
Hilton Hotels Corp. 7.625% 2008 4,700 5,081
Hilton Hotels Corp. 7.20% 2009 5,885 6,419
Hilton Hotels Corp. 8.25% 2011 115 133
Hilton Hotels Corp. 7.625% 2012 2,050 2,344
EchoStar DBS Corp. 9.125% 2009 12,749 13,673
Atlantic Broadband Finance, LLC and Atlantic Broadband Finance, Inc. 9.375% 2014(3) 14,075 13,582
Dana Corp. 5.85% 2015(3) 15,150 13,421
LBI Media, Inc. 10.125% 2012 12,140 13,415
Cablevision Systems Corp. 8.00% 2012(3) 12,770 13,185
Sealy Mattress Co. 8.25% 2014 12,000 12,570
Radio One, Inc., Series B, 8.875% 2011 11,100 11,932
Bombardier Recreational Products Inc. 8.375% 2013 11,100 11,821
Ryland Group, Inc. 5.375% 2008 11,000 11,140
La Quinta Properties, Inc. 8.875% 2011 2,000 2,170
La Quinta Properties, Inc. 7.00% 2012 8,500 8,649
Cooper Standard Automotive Group 7.00% 2012(3) 2,050 1,917
Cooper Standard Automotive Group 8.375% 2014(3) 10,565 8,637
Reader's Digest Association, Inc. 6.50% 2011 10,500 10,526
Perkins Family Restaurants, LP, Perkins Finance Corp., Series B, 10.125% 2007 10,250 10,468
Beazer Homes USA, Inc. 8.375% 2012 9,250 9,851
Lighthouse International Co. SA 8.00% 2014 (euro)7,300 9,592
Standard Pacific Corp. 5.125% 2009 $6,750 6,463
Standard Pacific Corp. 6.25% 2014 3,000 2,865
Jostens IH Corp. 7.625% 2012 9,325 9,278
Fisher Communications, Inc. 8.625% 2014 8,315 8,939
British Sky Broadcasting Group PLC 8.20% 2009 7,500 8,465
Boyds Collection, Ltd., Series B, 9.00% 2008 8,122 7,757
American Media Operations, Inc., Series B, 10.25% 2009 510 528
American Media Operations, Inc. 8.875% 2011 6,790 7,028
TRW Automotive Acquisition Corp. 9.375% 2013 6,697 7,233
Entercom Radio, LLC 7.625% 2014 6,500 6,792
Videotron Ltee 6.875% 2014 6,500 6,565
Entravision Communications Corp. 8.125% 2009 6,000 6,285
Warner Music Group 7.375% 2014 5,750 5,951
Toll Corp. 8.25% 2011 5,500 5,926
Mandalay Resort Group, Series B, 10.25% 2007 5,000 5,462
Globo Comunicacoes e Participacoes Ltda., Series B, 10.50% 2006(3,5) 2,600 2,613
Globo Comunicacoes e Participacoes SA 10.625% 2008(3,5) 2,485 2,497
Clear Channel Communications, Inc. 5.50% 2014 4,940 4,726
Riddell Bell Holdings, Inc. 8.375% 2012(3) 3,450 3,553
Mediacom LLC and Mediacom Capital Corp. 9.50% 2013 3,525 3,534
RBS-Zero Editora Jornalistica SA 11.00% 2010(3) 3,410 3,461
News America Inc. 6.75% 2038 2,990 3,298
Lennar Corp., Series B, 9.95% 2010 2,500 2,624
Seneca Gaming Corp. 7.25% 2012 2,440 2,440
Ameristar Casinos, Inc. 10.75% 2009 2,000 2,195
Meritor Automotive, Inc. 6.80% 2009 2,200 2,189
Loews Cineplex Entertainment Corp. 9.00% 2014(3) 975 975
Key Plastics Holdings, Inc., Series B, 10.25% 2007(5,6) 9,650 121
2,449,091
MATERIALS -- 12.22%
Millennium America Inc. 9.25% 2008 30,825 33,214
Lyondell Chemical Co. 9.50% 2008 10,000 10,750
Equistar Chemicals, LP 10.125% 2008 16,950 18,814
Equistar Chemicals, LP and Equistar Funding Corp. 8.75% 2009 9,315 10,037
Equistar Chemicals, LP and Equistar Funding Corp. 10.625% 2011 44,875 50,597
Millennium America Inc. 7.625% 2026 2,000 1,950
Abitibi-Consolidated Co. of Canada 6.95% 2006 1,000 1,010
Abitibi-Consolidated Co. of Canada 5.25% 2008 6,250 5,875
Abitibi-Consolidated Finance LP 7.875% 2009 14,500 14,536
Abitibi-Consolidated Inc. 8.55% 2010 18,045 18,406
Abitibi-Consolidated Co. of Canada 6.51% 2011(1) 25,000 25,187
Abitibi-Consolidated Co. of Canada 6.00% 2013 26,565 22,846
Abitibi-Consolidated Co. of Canada 8.375% 2015 20,875 20,405
Freeport-McMoRan Copper & Gold Inc. 10.125% 2010 71,425 79,639
Georgia-Pacific Corp. 7.50% 2006 11,625 11,916
Georgia-Pacific Corp. 7.375% 2008 25,200 26,523
Georgia-Pacific Corp. 8.875% 2010 9,925 11,128
Georgia-Pacific Corp. 8.125% 2011 8,475 9,386
Georgia-Pacific Corp. 9.50% 2011 2,525 2,992
Georgia-Pacific Corp. 7.70% 2015 600 661
Georgia-Pacific Corp. 8.875% 2031 7,000 8,470
Stone Container Corp. 9.25% 2008 6,425 6,875
Stone Container Corp. 9.75% 2011 10,175 10,938
Jefferson Smurfit Corp. (U.S.) 8.25% 2012 27,745 28,647
Stone Container Corp. 8.375% 2012 3,450 3,579
Jefferson Smurfit Corp. (U.S.) 7.50% 2013 19,875 19,875
Smurfit Capital Funding PLC 6.75% 2005 3,175 3,199
JSG Funding PLC 9.625% 2012 4,400 4,752
JSG Funding PLC 7.75% 2015 (euro)9,250 11,211
JSG Funding PLC 7.75% 2015(3) $5,500 5,142
JSG Holdings PLC 11.50% 2015(7) (euro)34,350 41,408
Owens-Illinois, Inc. 8.10% 2007 $ 5,250 5,460
Owens-Illinois, Inc. 7.35% 2008 4,440 4,584
Owens-Brockway Glass Container Inc. 8.875% 2009 9,425 10,108
Owens-Illinois, Inc. 7.50% 2010 2,000 2,070
Owens-Brockway Glass Container Inc. 7.75% 2011 15,985 16,824
Owens-Brockway Glass Container Inc. 8.75% 2012 22,225 24,392
Owens-Brockway Glass Container Inc. 8.25% 2013 900 956
Owens-Brockway Glass Container Inc. 6.75% 2014 (euro)375 496
Associated Materials Inc. 9.75% 2012 $15,940 17,215
AMH Holdings, Inc. 0%/11.25% 2014(2) 54,450 38,115
Building Materials Corp. of America, Series B, 8.00% 2007 3,150 3,244
Building Materials Corp. of America 8.00% 2008 9,195 9,448
Building Materials Corp. of America 7.75% 2014 32,735 32,899
Rhodia SA 8.00% 2010 (euro)10,575 13,776
Rhodia SA 8.00% 2010 2,000 2,605
Rhodia 10.25% 2010 $25,365 27,775
Rhodia 8.875% 2011 500 489
Graphic Packaging International, Inc. 8.50% 2011 27,550 29,065
Graphic Packaging International, Inc. 9.50% 2013 11,250 11,981
Gerdau Ameristeel Corp. and GUSAP Partners 10.375% 2011 29,875 33,460
Kappa Beheer BV 10.625% 2009 (euro)16,250 22,222
Kappa Beheer BV 12.50% 2009 6,150 8,569
Ainsworth Lumber Co. Ltd. 7.25% 2012(3) $12,675 12,485
Ainsworth Lumber Co. Ltd. 6.75% 2014 12,555 11,990
Ainsworth Lumber Co. Ltd. 6.75% 2014 4,400 4,202
United States Steel Corp. 10.75% 2008 4,571 5,280
United States Steel Corp. 9.75% 2010 20,923 23,277
Boise Cascade, LLC and Boise Cascade Finance Corp. 5.535% 2012(1,3) 4,665 4,782
Boise Cascade, LLC and Boise Cascade Finance Corp. 7.125% 2014(3) 21,875 22,258
Nalco Co. 7.75% 2011 21,640 22,614
Nalco Co. 8.875% 2013 925 994
Koppers Inc. 9.875% 2013 19,775 22,148
Oregon Steel Mills, Inc. 10.00% 2009 19,274 20,960
Longview Fibre Co. 10.00% 2009 17,950 19,386
Earle M. Jorgensen Co. 9.75% 2012 17,840 19,356
Sino-Forest Corp. 9.125% 2011(3) 16,810 17,924
Sino-Forest Corp. 9.125% 2011 825 880
Luscar Coal Ltd. 9.75% 2011 12,715 14,050
Crompton Corp. 8.71% 2010(1) 8,325 9,324
Crompton Corp. 9.875% 2012 2,550 2,932
Ispat Inland ULC 9.75% 2014 9,623 11,307
Peabody Energy Corp., Series B, 6.875% 2013 7,000 7,245
Peabody Energy Corp. 5.875% 2016 4,000 3,880
Steel Dynamics, Inc. 9.50% 2009 9,800 10,608
Graham Packaging Co., LP 9.875% 2014(3) 9,000 9,045
Tekni-Plex, Inc., Series B, 12.75% 2010 10,575 8,883
Crystal US Holdings 3 LLC and Crystal US Sub 3 Corp., Series B, 0%/10.50% 2014(2,3,8) 1,627 1,147
BCP Caylux Holdings Luxembourg SCA 9.625% 2014(3,8) 6,743 7,721
Rockwood Specialties Group, Inc. 7.50% 2014(3) 700 703
Rockwood Specialties Group, Inc. 7.625% 2014 (euro)5,700 7,499
Ball Corp. 6.875% 2012 $ 7,500 7,772
Neenah Paper, Inc. 7.375% 2014(3) 7,000 6,755
Georgia Gulf Corp. 7.125% 2013 6,000 6,255
Allegheny Technologies, Inc. 8.375% 2011 5,000 5,375
Huntsman LLC 9.91% 2011(1,3) 825 887
Huntsman LLC 11.50% 2012(3) 3,264 3,835
AK Steel Corp. 7.75% 2012 4,350 4,209
Norampac Inc. 6.75% 2013 3,500 3,579
PQ Corp. 7.50% 2013(3) 3,225 3,193
Airgas, Inc. 6.25% 2014 2,500 2,506
Indah Kiat International Finance Co. BV 11.875% 2002(4) 2,250 1,575
Indah Kiat Finance Mauritius Ltd. 10.00% 2007(5) 125 68
Nalco Finance Holdings LLC and Nalco Finance Holdings Inc. 0%/9.00% 2014(2) 1,800 1,368
AEP Industries Inc. 7.875% 2013(3) 1,000 1,009
Novelis, Inc. 7.25% 2015(3) 1,000 985
Pindo Deli Finance Mauritius Ltd. 10.25% 2002(4) 2,500 762
Pindo Deli Finance Mauritius Ltd. 10.75% 2007(5) 550 168
APP International Finance Co. BV 11.75% 2005(5) 275 155
1,189,057
TELECOMMUNICATION SERVICES -- 11.67%
Qwest Capital Funding, Inc. 7.75% 2006 17,250 17,530
Qwest Capital Funding, Inc. 7.00% 2009 18,625 17,554
Qwest Capital Funding, Inc. 7.90% 2010 16,835 16,204
Qwest Services Corp. 13.50% 2010(3) 25,010 29,074
Qwest Capital Funding, Inc. 7.25% 2011 8,805 8,255
Qwest Corp. 9.125% 2012(3) 3,600 3,933
Qwest Services Corp. 14.00% 2014(3) 26,600 32,252
U S WEST Capital Funding, Inc. 6.875% 2028 9,989 7,791
Qwest Capital Funding, Inc. 7.75% 2031 3,655 3,107
Crown Castle International Corp. 9.375% 2011 15,750 17,207
Crown Castle International Corp. 10.75% 2011 20,000 21,450
Crown Castle International Corp. 7.50% 2013 42,000 46,305
Crown Castle International Corp., Series B, 7.50% 2013 33,300 36,713
Dobson Communications Corp. 10.875% 2010 28,025 24,942
Dobson Cellular Systems, Inc. 7.493% 2011(1,3) 5,000 5,150
American Cellular Corp., Series B, 10.00% 2011 57,575 53,257
Dobson Cellular Systems, Inc. 9.875% 2012(3) 20,375 20,884
Dobson Communications Corp. 8.875% 2013 19,775 15,622
Nextel Communications, Inc. 6.875% 2013 14,500 15,189
Nextel Communications, Inc. 7.375% 2015 74,675 79,249
American Tower Corp. 9.375% 2009 6,852 7,229
American Tower Corp. 7.25% 2011 5,425 5,628
American Tower Corp. 7.125% 2012 62,860 62,860
American Tower Corp. 7.50% 2012 18,300 18,666
Triton PCS, Inc. 8.75% 2011 32,125 22,568
Triton PCS, Inc. 9.375% 2011 48,010 34,207
Triton PCS, Inc. 8.50% 2013 38,650 35,751
Nextel Partners, Inc. 12.50% 2009 3,587 3,964
Nextel Partners, Inc. 8.125% 2011 45,860 48,956
Nextel Partners, Inc. 8.125% 2011 16,000 17,080
Centennial Communications Corp. and Centennial Cellular Operating Co. LLC 10.125% 2013 32,555 36,136
Centennial Communications Corp. and Centennial Cellular Operating Co. LLC and
Centennial Puerto Rico Operations Corp. 8.125% 2014(1) 18,175 18,720
Rogers Wireless Inc. 7.25% 2012 15,925 16,323
Rogers Wireless Inc. 7.50% 2015 22,325 23,162
Rogers Cantel Inc. 9.75% 2016 1,625 1,926
NTELOS Inc. 7.85% 2012(1) 38,500 39,077
Cincinnati Bell Inc. 7.25% 2013 37,425 37,425
AT&T Corp. 9.05% 2011(1) 29,275 33,410
SBA Communications Corp. 8.50% 2012(3) 27,515 28,616
Intelsat, Ltd. 7.805% 2012(1,3) 8,150 8,313
Intelsat, Ltd. 8.25% 2013(3) 19,280 19,569
US Unwired Inc., Series B, 10.00% 2012 18,050 20,081
AirGate PCS, Inc. 9.375% 2009(3) 13,453 14,328
AirGate PCS, Inc. 9.375% 2009 4,500 4,792
France Telecom 8.50% 2011(1) 14,250 16,325
Western Wireless Corp. 9.25% 2013 12,750 14,599
Sprint Capital Corp. 6.375% 2009 9,320 9,853
Sprint Capital Corp. 6.90% 2019 2,500 2,714
AT&T Wireless Services, Inc. 8.125% 2012 10,000 11,698
Valor Communications Group Inc. 7.75% 2015(3) 11,090 11,090
UbiquiTel Operating Co. 9.875% 2011 7,375 8,168
UbiquiTel Operating Co. 9.875% 2011(3) 1,850 2,049
SpectraSite, Inc. 8.25% 2010 7,250 7,594
Millicom International Cellular SA 10.00% 2013(3) 6,500 6,662
iPCS, Inc. 11.50% 2012 5,875 6,639
PCCW-HKT Capital Ltd. 8.00% 2011(1,3) 4,750 5,379
Cellco Finance NV 12.75% 2005 1,500 1,537
MetroPCS, Inc. 10.75% 2011 1,000 1,025
GT Group Telecom Inc. 13.25% 2010(5,6) 11,000 --
1,135,787
INDUSTRIALS -- 7.47%
Allied Waste North America, Inc. 8.50% 2008 16,500 16,995
Allied Waste North America, Inc., Series B, 8.875% 2008 16,750 17,399
Allied Waste North America, Inc., Series B, 6.50% 2010 14,500 14,137
Allied Waste North America, Inc., Series B, 5.75% 2011 13,700 12,535
Allied Waste North America, Inc., Series B, 6.125% 2014 10,000 8,975
Allied Waste North America, Inc., Series B, 7.375% 2014 16,950 15,425
Northwest Airlines, Inc. 8.875% 2006 20,090 17,077
Northwest Airlines, Inc. 8.70% 2007 1,600 1,168
Northwest Airlines, Inc. 9.875% 2007 20,425 15,319
Northwest Airlines, Inc. 7.875% 2008 19,750 12,344
Northwest Airlines, Inc. 10.00% 2009 23,205 14,619
Horizon Lines, LLC and Horizon Lines Holding Corp. 9.00% 2012(3) 35,820 38,327
H-Lines Finance Holding Corp. 0%/11.00% 2013(2,3) 19,285 15,139
NTK Holdings, Inc. 0%/10.75% 2014(2,3) 33,610 18,065
THL Buildco, Inc. 8.50% 2014 28,370 27,519
Terex Corp. 9.25% 2011 22,150 24,254
Terex Corp., Class B, 10.375% 2011 7,700 8,412
Terex Corp. 7.375% 2014 11,750 12,044
United Rentals (North America), Inc., Series B, 6.50% 2012 28,925 28,274
United Rentals (North America), Inc. 7.75% 2013 7,500 7,313
United Rentals (North America), Inc., Series B, 7.00% 2014 3,000 2,760
Continental Airlines, Inc. 8.00% 2005 17,815 17,637
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.487% 2012 5,000 4,965
Continental Airlines, Inc., Series 2000-2, Class C, 8.312% 2012(8) 5,059 4,106
Continental Airlines, Inc., Series 2001-1, Class B, 7.373% 2017(8) 3,119 2,610
Continental Airlines, Inc., Series 2000-1, Class A-1, 8.048% 2022(8) 2,947 2,908
Continental Airlines, Inc., Series 2000-1, Class B, 8.388% 2022(8) 4,915 4,081
DRS Technologies, Inc. 6.875% 2013(3) 23,025 23,140
DRS Technologies, Inc. 6.875% 2013 12,880 12,944
Jacuzzi Brands, Inc. 9.625% 2010 31,255 34,537
Bombardier Capital Inc., Series A, 6.125% 2006(3) 10,370 10,396
Bombardier Inc. 6.75% 2012(3) 11,600 10,353
Bombardier Inc. 6.30% 2014(3) 2,000 1,690
Bombardier Inc. 7.45% 2034(3) 5,000 4,100
Delta Air Lines, Inc. 7.70% 2005 3,000 2,445
Delta Air Lines, Inc. 8.00% 2007(3) 15,525 7,180
Delta Air Lines, Inc. 10.00% 2008 12,250 5,451
Delta Air Lines, Inc., Series 2000-1, Class B, 7.92% 2010(8) 2,500 1,408
Delta Air Lines, Inc., Series 2001-1, Class A-1, 6.619% 2011(8) 2,793 2,685
Delta Air Lines, Inc. 9.75% 2021 2,200 737
Delta Air Lines, Inc. 10.375% 2022 3,000 1,020
Delta Air Lines, Inc. 8.30% 2029 11,500 3,680
Dyncorp International LLC 9.50% 2013(3) 24,710 24,123
ACIH, Inc. 0%/11.50% 2012(2,3) 33,685 23,916
Goodman Global Holdings 5.76% 2012(1,3) 10,325 10,273
Goodman Global Holdings 7.875% 2012(3) 12,580 11,574
Argo-Tech Corp. 9.25% 2011 16,850 18,198
Standard Aero Holdings, Inc. 8.25% 2014(3) 16,750 17,420
American Standard Inc. 8.25% 2009 10,190 11,497
American Standard Inc. 7.625% 2010 4,300 4,792
Accuride Corp. 8.50% 2015(3) 15,215 14,987
TFM, SA de CV 10.25% 2007 2,295 2,444
TFM, SA de CV 11.75% 2009 9,600 9,648
TFM, SA de CV 12.50% 2012 2,310 2,691
AGCO Corp. 9.50% 2008 5,250 5,526
AGCO Corp. 6.875% 2014 (euro)3,750 5,128
Kansas City Southern Railway Co. 9.50% 2008 $ 4,275 4,681
Kansas City Southern Railway Co. 7.50% 2009 5,615 5,755
K&F Acquisition, Inc. 7.75% 2014(3) 10,665 10,398
Synagro Technologies, Inc. 9.50% 2009 8,440 9,221
American Airlines, Inc. 10.15% 2006 3,000 2,880
American Airlines, Inc., Series 2001-2, Class B, 8.608% 2012 2,500 2,306
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 2013 2,500 2,556
Esterline Technologies Corp. 7.75% 2013 7,000 7,315
Cummins Inc. 9.50% 2010 5,550 6,147
UCAR Finance Inc. 10.25% 2012 5,551 5,967
Tyco International Group SA 6.125% 2008 5,500 5,776
Builders FirstSource, Inc. 7.024% 2012(1,3) 5,400 5,346
WMX Technologies, Inc. 7.10% 2026 2,150 2,440
NMHG Holding Co. 10.00% 2009 2,000 2,165
International Shipholding Corp., Series B, 7.75% 2007 1,950 2,009
Park-Ohio Industries, Inc. 8.375% 2014(3) 2,075 1,945
United Air Lines, Inc. 9.00% 2003(4) 3,000 259
United Air Lines, Inc., 1991 Equipment Trust Certificates, Series A, 10.11% 2006(5,8) 1,907 715
726,271
UTILITIES -- 6.37%
Southern California Edison, First and Refunding Mortgage Bonds, 8.00% 2007 1,216 1,295
Edison Mission Energy 10.00% 2008 26,300 29,357
Mission Energy Holding Co. 13.50% 2008 36,850 44,404
Edison Mission Energy 7.73% 2009 42,500 44,519
Edison Mission Energy 9.875% 2011 37,975 44,051
Midwest Generation, LLC, Series B, 8.56% 2016(8) 25,350 28,344
Homer City Funding LLC 8.734% 2026(8) 9,490 11,032
Midwest Generation, LLC and Midwest Finance Corp. 8.75% 2034 19,250 21,560
AES Corp. 9.50% 2009 28,507 31,322
AES Corp. 9.375% 2010 11,469 12,702
AES Corp. 8.75% 2013(3) 43,985 48,164
AES Gener SA 7.50% 2014 28,850 28,506
AES Corp. 9.00% 2015(3) 15,150 16,741
AES Red Oak, LLC, Series B, 9.20% 2029(8) 7,000 7,945
Nevada Power Co., General and Refunding Mortgage Bonds, Series A, 8.25% 2011 6,200 6,913
Sierra Pacific Power Co., General and Refunding Mortgage Notes, Series H, 6.25% 2012 3,000 3,060
Nevada Power Co., General and Refunding Mortgage Notes, Series I, 6.50% 2012 3,375 3,502
Nevada Power Co., General and Refunding Mortgage Notes, Series G, 9.00% 2013 29,605 33,380
Sierra Pacific Resources 8.625% 2014 15,500 16,585
Nevada Power Co., Series L, 5.875% 2015(3) 3,300 3,234
Dynegy Holdings Inc. 9.875% 2010(3) 18,950 20,395
Dynegy Holdings Inc. 10.125% 2013(3) 37,315 40,860
Drax Holdings Ltd., Series A-1, 7.418% 2015(1,3) (pound)4,127 7,830
Drax Holdings Ltd., Series A-2, unit, 8.918% 2015(1,3,9) 4,746 21,324
Drax Holdings Ltd., Series B, 6.918% 2025(1,3,5) 3,491 7,315
Texas Genco LLC and Texas Genco Financing Corp. 6.875% 2014(3) $18,250 18,387
PSEG Energy Holdings Inc. 8.625% 2008 15,999 16,959
Enersis SA 7.375% 2014 11,800 12,308
Duke Capital Corp. 4.37% 2009 2,000 1,968
Duke Capital Corp. 7.50% 2009 7,500 8,271
FPL Energy American Wind, LLC 6.639% 2023(3,8) 8,170 8,730
Electricidad de Caracas Finance BV 10.25% 2014(3) 7,480 7,667
NRG Energy, Inc. 8.00% 2013(3) 6,257 6,648
TNP Enterprises, Inc., Series B, 10.25% 2010 4,250 4,494
619,772
Principal amount Market value
Bonds & notes (000) (000)
CONSUMER STAPLES -- 5.64%
Burns Philp Capital Pty Ltd. and Burns Philp Capital (U.S.) Inc., Series B, 9.50% 2010 $16,750 $ 18,341
Burns Philp Capital Pty Ltd. and Burns Philp Capital (U.S.) Inc., Series B, 10.75% 2011 17,825 19,875
Burns Philp Capital Pty Ltd., Series B, 9.75% 2012 59,022 64,629
Koninklijke Ahold NV 5.875% 2008 (euro)5,750 7,882
Ahold Finance U.S.A., Inc. 6.25% 2009 $37,070 37,904
Ahold Finance U.S.A., Inc. 8.25% 2010 18,220 20,088
Ahold Finance U.S.A., Inc. 6.50% 2017 (pound)1,375 2,521
Ahold Lease Pass Through Trust, Series 2001-A-1, 7.82% 2020(8) $ 1,864 1,938
Ahold Lease Pass Through Trust, Series 2001-A-2, 8.62% 2025(8) 7,500 8,175
Rite Aid Corp. 9.50% 2011 475 506
Rite Aid Corp. 6.875% 2013 30,300 28,331
Rite Aid Corp. 9.25% 2013 11,750 11,750
Rite Aid Corp. 7.50% 2015(3) 7,000 6,755
Rite Aid Corp. 7.70% 2027 11,780 9,777
Rite Aid Corp. 6.875% 2028 8,000 6,240
Jean Coutu Group (PJC) Inc. 7.625% 2012 2,375 2,434
Jean Coutu Group (PJC) Inc. 8.50% 2014 60,025 58,599
Delhaize America, Inc. 8.125% 2011 23,645 26,400
Delhaize America, Inc. 9.00% 2031 10,000 12,199
Pathmark Stores, Inc. 8.75% 2012 29,810 29,139
Rayovac Corp. 7.375% 2015(3) 28,335 27,272
Playtex Products, Inc. 8.00% 2011 14,625 15,832
Playtex Products, Inc. 9.375% 2011 9,750 10,189
Gold Kist Inc. 10.25% 2014 21,141 24,206
Stater Bros. Holdings Inc. 6.51% 2010(1) 5,450 5,423
Stater Bros. Holdings Inc. 8.125% 2012 14,150 13,726
Petro Stopping Centers, LP and Petro Financial Corp. 9.00% 2012 18,450 19,096
Constellation Brands, Inc. 8.125% 2012 16,000 17,200
Winn-Dixie Stores, Inc. 8.875% 2008(5) 18,675 10,458
Winn-Dixie Pass Through Trust, Series 1999-1, Class A-1, 7.803% 2017(3,8,10) 3,045 2,301
Del Monte Corp., Series B, 8.625% 2012 10,550 11,473
Duane Reade Inc. 7.51% 2010(1,3) 6,000 6,090
WH Holdings (Cayman Islands) Ltd. and WH Capital Corp. 9.50% 2011 5,280 5,729
Dole Food Co., Inc. 8.875% 2011 5,210 5,627
Great Atlantic & Pacific Tea Co., Inc. 9.125% 2011 300 296
548,401
INFORMATION TECHNOLOGY -- 4.19%
Sanmina-SCI Corp. 10.375% 2010 51,750 58,219
Sanmina-SCI Corp. 6.75% 2013(3) 11,500 10,839
Electronic Data Systems Corp. 7.125% 2009 16,800 18,075
Electronic Data Systems Corp., Series B, 6.50% 2013(1) 41,040 42,038
Solectron Corp., Series B, 7.375% 2006 8,895 9,117
Solectron Corp. 9.625% 2009 38,400 41,568
Micron Technology, Inc. 6.50% 2005(3) 40,714 40,511
Xerox Corp. 9.75% 2009 2,000 2,265
Xerox Corp. 7.125% 2010 22,750 23,632
Xerox Corp. 7.625% 2013 5,000 5,250
Nortel Networks Ltd. 6.125% 2006 24,575 24,759
Semiconductor Note Participation Trust 10.00% 2011(3) 14,418 23,899
Lucent Technologies Inc. 7.25% 2006 15,000 15,413
Lucent Technologies Inc. 5.50% 2008 8,500 8,351
Motorola, Inc. 8.00% 2011 8,025 9,300
Motorola, Inc. 7.50% 2025 2,000 2,299
Motorola, Inc. 5.22% 2097 4,550 3,661
Jabil Circuit, Inc. 5.875% 2010 14,750 15,248
Viasystems, Inc. 10.50% 2011 14,040 13,970
MagnaChip Semiconductor SA and MagnaChip Semiconductor Finance Co. 6.26% 2011(1,3) 5,425 5,588
MagnaChip Semiconductor SA and MagnaChip Semiconductor Finance Co. 6.875% 2011(3) 5,450 5,532
MagnaChip Semiconductor SA and MagnaChip Semiconductor Finance Co. 8.00% 2014(3) 2,500 2,569
Freescale Semiconductor, Inc. 6.875% 2011 9,875 10,208
Amkor Technology, Inc. 9.25% 2008 2,975 2,856
Amkor Technology, Inc. 7.75% 2013 5,250 4,436
Iron Mountain Inc. 7.75% 2015 5,000 4,963
Hyundai Semiconductor America, Inc. 8.625% 2007(3) 2,600 2,683
Exodus Communications, Inc. 11.625% 2010(5,6) 3,824 0
407,249
ENERGY -- 4.17%
Port Arthur Finance Corp. 12.50% 2009(8) 1,574 1,834
Premcor Refining Group Inc. 9.25% 2010 12,675 14,006
Premcor Refining Group Inc. 6.125% 2011 4,000 4,000
Premcor Refining Group Inc. 6.75% 2011 24,675 25,354
Premcor Refining Group Inc. 7.75% 2012 33,650 34,912
Premcor Refining Group Inc. 9.50% 2013 22,350 25,088
Premcor Refining Group Inc. 6.75% 2014 5,000 5,025
Premcor Refining Group Inc. 7.50% 2015 26,900 27,774
Petrozuata Finance, Inc., Series B, 8.22% 2017(3,8) 45,190 42,705
Petrozuata Finance, Inc., Series B, 8.22% 2017(8) 6,185 5,845
Newfield Exploration Co., Series B, 7.45% 2007 1,750 1,829
Newfield Exploration Co. 7.625% 2011 3,500 3,780
Newfield Exploration Co. 8.375% 2012 23,500 25,498
Newfield Exploration Co. 6.625% 2014 14,575 14,830
General Maritime Corp. 10.00% 2013 40,700 45,482
Williams Companies, Inc. 6.75% 2009(3) 2,000 2,045
Williams Companies, Inc. 8.125% 2012 3,000 3,300
Williams Companies, Inc. 8.75% 2032 19,850 23,671
Ultrapetrol Ltd., First Preferred Ship Mortgage Notes, 9.00% 2014(3) 30,130 28,172
Overseas Shipholding Group, Inc. 8.25% 2013 15,010 16,136
Overseas Shipholding Group, Inc. 8.75% 2013 8,055 9,062
Teekay Shipping Corp. 8.875% 2011 19,945 22,338
American Commercial Lines Inc. 9.50% 2015(3) 19,090 19,806
Pemex Project Funding Master Trust 7.875% 2009 1,400 1,517
Pemex Project Funding Master Trust 8.625% 2022 1,170 1,332
Tengizchevroil Finance Co. S.ar.l., Series A, 6.124% 2014(3,8) 750 746
406,087
HEALTH CARE -- 3.88%
Tenet Healthcare Corp. 6.375% 2011 30,260 28,066
Tenet Healthcare Corp. 7.375% 2013 12,590 11,929
Tenet Healthcare Corp. 9.875% 2014 38,700 40,442
Tenet Healthcare Corp. 9.25% 2015(3) 10,500 10,526
Quintiles Transnational Corp. 10.00% 2013 47,775 53,986
Pharma Services Intermediate Holding Corp. 0%/11.50% 2014(2,3) 22,600 16,046
Columbia/HCA Healthcare Corp. 6.91% 2005 3,250 3,287
Columbia/HCA Healthcare Corp. 7.00% 2007 7,755 8,075
HCA Inc. 5.50% 2009 28,250 28,075
HCA -- The Healthcare Co. 8.75% 2010 6,660 7,523
HCA -- The Healthcare Co. 7.875% 2011 1,250 1,359
Concentra Operating Corp. 9.50% 2010 24,600 26,445
Concentra Operating Corp. 9.125% 2012 9,025 9,612
Warner Chilcott Corp. 8.75% 2015(3) 29,075 29,366
Health Net, Inc. 9.875% 2011(1) 20,845 24,847
Team Health, Inc. 9.00% 2012 23,175 22,769
MedCath Holdings Corp. 9.875% 2012 13,950 15,066
Triad Hospitals, Inc. 7.00% 2012 11,750 11,926
American Medical Response, Inc. and EmCare Holdings, Inc. 10.00% 2015(3) 7,600 7,942
Medical Device Manufacturing, Inc. 10.00% 2012 7,250 7,794
Universal Hospital Services, Inc., Series B, 10.125% 2011 5,000 5,150
HealthSouth Corp. 7.375% 2006 5,000 4,963
Cardinal Health, Inc. 6.25% 2008 2,000 2,084
377,278
FINANCIALS -- 2.79%
Host Marriott, LP, Series G, 9.25% 2007 1,725 1,854
Host Marriott, LP, Series I, 9.50% 2007 2,050 2,173
Host Marriott, LP, Series M, 7.00% 2012 16,450 16,368
Host Marriott, LP, Series K, 7.125% 2013 17,200 17,157
Host Marriott Corp., Series N, 6.375% 2015(3) 1,750 1,680
LaBranche & Co Inc. 9.50% 2009 29,200 29,492
LaBranche & Co Inc. 11.00% 2012 6,000 6,390
Rouse Co. 3.625% 2009 12,415 11,626
Rouse Co. 7.20% 2012 12,370 13,301
Rouse Co. 5.375% 2013 3,715 3,561
iStar Financial, Inc. 7.00% 2008 2,375 2,518
iStar Financial, Inc. 8.75% 2008 1,714 1,919
iStar Financial, Inc., Series B, 4.875% 2009 2,000 1,976
iStar Financial, Inc. 6.00% 2010 9,600 9,908
iStar Financial, Inc., Series B, 5.70% 2014 2,500 2,471
MBNA Corp. 5.625% 2007 10,000 10,256
MBNA Capital A, Series A, 8.278% 2026 7,500 8,178
Kazkommerts International BV 8.50% 2013(3) 7,000 7,105
Kazkommerts International BV 8.50% 2013 1,500 1,523
Kazkommerts International BV 7.875% 2014(3) 10,000 9,775
Providian Financial Corp., Series A, 9.525% 2027(3) 15,000 15,900
Crescent Real Estate LP 7.50% 2007 12,320 12,782
Capital One Financial Corp. 8.75% 2007 6,400 6,887
Capital One Financial Corp. 7.125% 2008 5,000 5,336
TuranAlem Finance BV 7.875% 2010 10,000 9,925
TuranAlem Finance BV 8.50% 2015(3) 2,280 2,252
Advanta Capital Trust I, Series B, 8.99% 2026 12,000 11,730
FelCor Lodging LP 9.00% 2011(1) 9,155 9,887
Fairfax Financial Holdings Ltd. 7.75% 2012 8,725 8,463
UFJ Finance Aruba AEC 6.75% 2013 6,745 7,273
Chevy Chase Bank, FSB 6.875% 2013 5,500 5,720
Sovereign Capital Trust I 9.00% 2027 5,000 5,530
Mangrove Bay Pass Through Trust 6.102% 2033(1,3,8) 5,000 4,975
BankUnited Capital Trust, BankUnited Financial Corp. 10.25% 2026 4,500 4,973
Korea First Bank 7.267% 2034(1,3) 870 988
271,852
NON-U.S. GOVERNMENT BONDS & NOTES -- 4.41%
Brazil (Federal Republic of), Debt Conversion Bond, Series L, Bearer, 3.125% 2012(1) 5,735 5,406
Brazil (Federal Republic of) Global 10.25% 2013 26,500 28,951
Brazil (Federal Republic of) Bearer 8.00% 2014(7) 7,200 7,150
Brazil (Federal Republic of) Global 10.50% 2014 3,000 3,308
Brazil (Federal Republic of) Global 8.875% 2024 1,895 1,807
Brazil (Federal Republic of) Global 11.00% 2040 27,610 30,764
Russian Federation 8.25% 2010 6,000 6,478
Russian Federation 8.25% 2010(3) 5,000 5,398
Russian Federation 12.75% 2028 8,000 13,115
Russian Federation 5.00% 2030(1) 32,365 33,417
Argentina (Republic of) 3.01% 2012(1) 36,580 30,869
Argentina (Republic of) 5.83% 2033(7,11) ARP 21,680 6,678
Argentina (Republic of) 0.63% 2038(1,11) 103,914 12,388
Turkey (Republic of) Treasury Bill 0% 2005 TRY 15,000 9,958
Turkey (Republic of) Treasury Bill 0% 2005 11,000 7,670
Turkey (Republic of) Treasury Bill 0% 2006 10,000 6,019
Turkey (Republic of) 20.00% 2007 23,983 18,658
Turkey (Republic of) 15.00% 2010 10,262 7,455
United Mexican States Government, Series M10, 10.50% 2011 MXP 12,320 1,140
United Mexican States Government Eurobonds, Global 7.50% 2012 $1,450 1,604
United Mexican States Government Global 6.375% 2013 6,000 6,240
United Mexican States Government, Series MI10, 8.00% 2013 MXP 75,300 5,870
United Mexican States Government Global 11.375% 2016 $6,751 9,654
United Mexican States Government Global 8.125% 2019 1,663 1,910
United Mexican States Government, Series M20, 8.00% 2023 MXP 149,736 10,486
United Mexican States Government Global 8.30% 2031 $3,020 3,465
United Mexican States Government Global 7.50% 2033 2,285 2,428
Columbia (Republic of) Global 11.75% 2010 COP 24,923,000 10,546
Colombia (Republic of) Global 10.00% 2012 $1,500 1,628
Colombia (Republic of) Global 10.75% 2013 8,550 9,597
Colombia (Republic of) Global 12.00% 2015 COP 8,770,000 3,543
Colombia (Republic of) Global 11.75% 2020 $ 4,000 4,780
Colombia (Republic of) Global 10.375% 2033 700 746
Panama (Republic of) Global 10.75% 2020 415 517
Panama (Republic of) Global 9.375% 2023 18,708 21,047
Panama (Republic of) Global 8.875% 2027 6,500 7,020
Peru (Republic of) 9.125% 2012 4,909 5,547
Peru (Republic of) 9.875% 2015 7,500 8,700
Peru (Republic of) 8.375% 2016 2,500 2,613
Peru (Republic of) Past Due Interest Eurobond 5.00% 2017(1) 370 351
Venezuela (Republic of) 10.75% 2013 6,000 6,690
Venezuela (Republic of) 9.25% 2027 4,630 4,609
Venezuela (Republic of) 9.375% 2034 3,000 2,978
Indonesia (Republic of) 13.15% 2010 IDR 57,225,000 6,796
Indonesia (Republic of) 10.00% 2011 15,000,000 1,591
Indonesia (Republic of) 13.45% 2011 24,105,000 2,925
Indonesia (Republic of) 6.75% 2014(3) $1,250 1,241
Ukraine Government 7.65% 2013(3) 7,400 7,955
Ukraine Government 7.65% 2013 3,000 3,225
Dominican Republic 9.50% 2006(3) 3,130 2,911
Dominican Republic 9.50% 2006 1,250 1,163
Dominican Republic 9.04% 2013(3) 6,095 5,592
Dominican Republic 3.50% 2024(1) 500 424
State of Qatar 9.75% 2030 3,500 5,053
Ecuador (Republic of) 8.00% 2030(1) 5,550 4,967
Aries Vermogensverwaltungs GmbH, Series C, 9.60% 2014(3) 4,000 4,830
Guatemala (Republic of) 10.25% 2011(3) 1,000 1,166
Guatemala (Republic of) 10.25% 2011 1,000 1,166
Guatemala (Republic of) 9.25% 2013(3) 1,500 1,703
Banque Centrale de Tunisie 7.375% 2012 3,500 3,894
El Salvador (Republic of) 7.75% 2023(3) 2,775 3,025
Lebanon (Republic of) 11.625% 2016 195 220
429,045
U.S. GOVERNMENT & GOVERNMENT AGENCY BONDS & NOTES -- 0.78%
U.S. Treasury 5.75% 2005 14,000 14,214
U.S. Treasury 3.25% 2007 5,000 4,933
U.S. Treasury 6.625% 2007 25,000 26,418
U.S. Treasury 4.75% 2008 10,000 10,241
Freddie Mac 4.25% 2005 20,000 20,049
75,855
MUNICIPALS -- 0.40%
State of Wisconsin, Badger Tobacco Asset Securitization Corp., Tobacco Settlement
Asset-backed Bonds, 6.125% 2027 25,500 25,911
State of New Jersey, Tobacco Settlement Financing Corp., Tobacco Settlement Asset-backed Bonds,
Series 2003, 4.375% 2019 4,000 4,003
State of New Jersey, Tobacco Settlement Financing Corp., Tobacco Settlement Asset-backed Bonds,
Series 2003, 6.125% 2024 5,000 5,080
State of Louisiana, Tobacco Settlement Authority, Asset-backed Bonds, Series 2001-B, 5.50% 2030 4,500 4,401
39,395
ASSET-BACKED OBLIGATIONS -- 0.23%(8)
Consumer Credit Reference Index Securities Program Trust, Series 2002-2A, Class FX, 10.421% 2007(3) 16,500 17,043
Mediterranean Re PLC, Class B, 8.67% 2005(1,3) 5,000 5,090
22,133
TOTAL BONDS & NOTES (COST: $8,470,915,000) 8,697,273
Shares or Market value
Convertible securities -- 2.93% principal amount (000)
CONSUMER DISCRETIONARY -- 1.08%
Amazon.com, Inc. 6.875% PEACS convertible subordinated notes 2010 (euro)42,233,000 $ 55,700
Amazon.com, Inc. 4.75% convertible subordinated debentures 2009 $ 8,825,000 8,781
Six Flags, Inc. 7.25% PIERS convertible preferred 2009 1,000,000 20,250
General Motors Corp., Series B, 5.25% convertible senior debentures 2032 $12,500,000 9,340
Ford Motor Co. Capital Trust II 6.50% cumulative convertible trust preferred 2032 160,600 7,282
Gray Communications Systems, Inc., Series C, 8.00% convertible preferred 2012(3,6,7) 300 3,447
104,800
INFORMATION TECHNOLOGY -- 0.87%
Celestica Inc. 0% convertible debentures 2020 $ 32,625,000 18,474
Fairchild Semiconductor Corp. 5.00% convertible notes 2008 $ 17,850,000 18,118
Micron Technology, Inc. 2.50% convertible note 2010 $ 5,000,000 5,194
Micron Technology, Inc. 2.50% convertible notes 2010(3) $ 8,000,000 8,310
Conexant Systems, Inc. 4.00% convertible subordinated notes 2007 $ 14,700,000 12,991
SCI Systems, Inc. 3.00% convertible subordinated debentures 2007 $ 12,000,000 11,625
Amkor Technology, Inc. 5.75% convertible notes 2006 $ 6,800,000 6,477
LSI Logic Corp. 4.00% convertible notes 2006 $ 3,000,000 2,974
84,163
FINANCIALS -- 0.31%
Providian Financial Corp. 3.25% convertible debentures 2005 20,000,000 20,075
Equity Office Properties Trust, Series B, 5.25% convertible preferred 2008 200,000 10,174
30,249
TELECOMMUNICATION SERVICES -- 0.31%
American Tower Corp. 5.00% convertible debentures 2010 $25,925,000 25,763
Dobson Communications Corp., Series F, 6.00% convertible preferred(3) 57,760 4,447
30,210
UTILITIES -- 0.22%
AES Trust VII 6.00% convertible preferred 2008 439,925 21,556
INDUSTRIALS -- 0.14%
Cummins Capital Trust I 7.00% QUIPS convertible preferred 2031(3) 180,000 13,835
TOTAL CONVERTIBLE SECURITIES (COST: $240,625,000) 284,813
Warrants -- 0.09% Shares
TELECOMMUNICATION SERVICES -- 0.09%
American Tower Corp., warrants, expire 2008(3,12) 38,250 8,721
XO Communications, Inc., Series A, warrants, expire 2010(12) 37,767 13
XO Communications, Inc., Series B, warrants, expire 2010(12) 28,325 7
XO Communications, Inc., Series C, warrants, expire 2010(12) 28,325 5
KMC Telecom Holdings, Inc., warrants, expire 2008(3,6,12) 22,500 0
GT Group Telecom Inc., warrants, expire 2010(3,6,12) 11,000 0
Allegiance Telecom, Inc., warrants, expire 2008(3,6,12) 5,000 0
8,746
INDUSTRIALS -- 0.00%
Protection One, Inc., warrants, expire 2005(3,6,12) 30,400 --
Total warrants (cost: $1,233,000) 8,746
Preferred stocks -- 2.67%
FINANCIALS -- 2.35%
Fuji JGB Investment LLC, Series A, 9.87% noncumulative preferred(1,3) 61,565,000 70,203
IBJ Preferred Capital Co. LLC, Series A, 8.79% noncumulative preferred(1,3) 51,675,000 57,444
Swire Pacific Capital Ltd. 8.84% cumulative guaranteed perpetual capital securities(3) 1,125,000 30,586
Swire Pacific Offshore Financing Ltd. 9.33% cumulative guaranteed perpetual preferred
capital securities(3) 546,648 14,759
Tokai Preferred Capital Co. LLC, Series A, 9.98% noncumulative preferred(1,3) 29,963,000 34,216
SB Treasury Co. LLC, Series A, 9.40% noncumulative preferred(1,3) 8,480,000 9,553
Fannie Mae, Series O, 7.00% preferred 2007(3) 150,000 8,334
Chevy Chase Preferred Capital Corp., Series A, 10.375% exchangeable preferred 55,994 3,270
228,365
TELECOMMUNICATION SERVICES -- 0.26%
Dobson Communications Corp. 13.00% senior exchangeable preferred 2009 35,187 23,927
Dobson Communications Corp. 12.25% senior exchangeable preferred 2008(7) 2,000 1,360
XO Communications, Inc. 14.00% preferred 2009(6,7,12) 40 0
25,287
CONSUMER DISCRETIONARY -- 0.00%
Adelphia Communications Corp., Series B, 13.00% preferred 2009(12) 36,196 118
CONSUMER STAPLES -- 0.00%
Great Atlantic & Pacific Tea Co., Inc. 9.375% QUIBS preferred 2039 18,500 439
INFORMATION TECHNOLOGY -- 0.00%
ZiLOG, Inc. -- MOD III Inc., units(6,13) 1,868 0
MISCELLANEOUS -- 0.06%
Other preferred stocks in initial period of acquisition 5,364
TOTAL PREFERRED STOCKS (COST: $224,594,000) 259,573
Common stocks-- 0.98%
TELECOMMUNICATION SERVICES -- 0.48%
Nextel Communications, Inc., Class A(12) 613,418 17,433
NTELOS Inc.(3,6,12) 399,154 15,767
Dobson Communications Corp., Class A(3,12) 5,754,785 11,625
VersaTel Telecom International NV(12) 779,280 1,747
Cincinnati Bell Inc.(12) 70,740 301
XO Communications, Inc.(12) 18,882 47
46,920
FINANCIALS -- 0.21%
Federal Realty Investment Trust 327,000 15,811
Equity Office Properties Trust 150,000 4,519
20,330
INFORMATION TECHNOLOGY -- 0.14%
Fairchild Semiconductor International, Inc.(12) 500,000 7,665
ZiLOG, Inc.(12,13) 1,140,500 5,874
13,539
CONSUMER DISCRETIONARY -- 0.09%
Emmis Communications Corp., Class A(12) 201,000 3,863
Viacom Inc., Class B, nonvoting 63,225 2,202
Clear Channel Communications, Inc. 51,012 1,758
Radio One, Inc., Class D, nonvoting(12) 44,000 649
Radio One, Inc., Class A(12) 22,000 323
8,795
INDUSTRIALS -- 0.06%
Delta Air Lines, Inc.(3,12) 766,165 3,103
DigitalGlobe Inc.(3,6,12) 3,064,647 3,065
6,168
HEALTH CARE -- 0.00%
Clarent Hospital Corp.(6,12,13) 576,849 288
TOTAL COMMON STOCKS (COST: $131,815,000) 96,040
Principal amount Market value
Short-term securities -- 2.50% (000) (000)
Variable Funding Capital Corp. 2.58%-2.75% due 4/4-4/22/2005(3,14) $75,000 $ 74,944
Preferred Receivables Funding Corp. 2.79% due 4/26/2005(3,14) 36,800 36,726
Park Avenue Receivables Co., LLC 2.74% due 4/14/2005(3) 31,400 31,367
Gannett Co. 2.57%-2.64% due 4/19-5/6/2005(3,14) 62,000 61,904
BellSouth Corp. 2.60% due 4/8/2005(3) 13,500 13,492
Ranger Funding Co. LLC 2.66% due 4/5/2005(3) 12,000 11,996
Freddie Mac 2.66% due 5/2/2005(14) 5,700 5,686
Clipper Receivables Co., LLC 2.82% due 5/16/2005(3,14) 5,200 5,181
Triple-A One Funding Corp. 2.59% due 4/8/2005(3) 2,000 1,999
TOTAL SHORT-TERM SECURITIES (COST: $243,295,000) 243,295
TOTAL INVESTMENT SECURITIES (COST: $9,312,477,000) 9,589,740
OTHER ASSETS LESS LIABILITIES 139,884
NET ASSETS $9,729,624
"Miscellaneous" securities include holdings in their initial period of
acquisition that have not previously been publicly disclosed.
(1) Coupon rate may change periodically.
(2) Step bond; coupon rate will increase at a later date.
(3) Purchased in a private placement transaction; resale may be limited to
qualified institutional buyers; resale to the public may require
registration. The total value of all such restricted securities was
$2,104,806,000, which represented 21.63% of the net assets of the fund.
(4) Company did not make principal payment upon scheduled maturity date;
reorganization pending.
(5) Company not making scheduled interest payments; bankruptcy proceedings
pending.
(6) Valued under fair value procedures adopted by authority of the Board of
Trustees.
(7) Payment in kind; the issuer has the option of paying additional securities
in lieu of cash.
(8) Pass-through securities backed by a pool of mortgages or other loans on
which principal payments are periodically made. Therefore, the effective
maturities are shorter than the stated maturities.
(9) This unit also contains 895,000 par of Drax Holdings Ltd., Class A-3,
9.918% 2020 and 895,000 shares of Drax Holdings Ltd. common stock.
(10) Scheduled interest payments not made; reorganization pending. (11) This
security has been authorized but has not yet been issued. (12) Security did
not produce income during the last 12 months.
(13) Represents an affiliated company as defined under the Investment Company
Act of 1940.
(14) This security, or a portion of this security, has been segregated to cover
funding requirements on investment transactions settling in the future.
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 - Portfolio Managers of Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end
management investment company.
ITEM 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers
Not applicable to this Registrant, insofar as the Registrant is not a closed-end
management investment company.
ITEM 10 - 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 Trustees since the Registrant
last submitted a proxy statement to its shareholders. The procedures are as
follows. The Registrant has a Nominating and 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, as amended. 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 Trustees. 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 and Governance 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 and Governance Committee.
ITEM 11 - Controls and Procedures
(a) The Registrant's Principal Executive Officer and Principal Financial
Officer have concluded, based on their evaluation of the Registrant's
disclosure controls and procedures (as such term is defined in Rule 30a-3
under the Investment Company Act of 1940), 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 second fiscal quarter of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the Registrant's internal control
over financial reporting.
ITEM 12 - Exhibits
(a) (1) The Code of Ethics - not applicable for filing of Semiannual Reports to
Shareholders.
(a) (2) 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 HIGH-INCOME TRUST
By /s/ David C. Barclay
- -----------------------------------
David C. Barclay, President and PEO
Date: June 8, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By /s/ David C. Barclay
- -----------------------------------
David C. Barclay, President and PEO
Date: June 8, 2005
By /s/ Susi M. Silverman
- ------------------------------------
Susi M. Silverman, Treasurer and PFO
Date: June 8, 2005