<Page>
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 811-21311
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PIMCO HIGH INCOME FUND
----------------------
(Exact name of registrant as specified in charter)
1345 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10105
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(Address of principal executive offices) (Zip code)
BRIAN S. SHLISSEL - 1345 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10105
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(Name and address of agent for service)
Registrant's telephone number, including area code: 212-739-3369
Date of fiscal year end: March 31
--------
Date of reporting period: September 30
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
<Page>
SEMI-ANNUAL REPORT
9.30.03
PIMCO HIGH INCOME FUND
[PHK LISTED NYSE THE NEW YORK STOCK EXCHANGE LOGO]
CONTENTS
<Table>
Letter to Shareholders 1
Performance Summary and Statistics 2
Schedule of Investments 3-11
Statement of Assets and Liabilities 12
Statement of Operations 13
Statement of Changes in Net Assets 14
Statement of Cash Flows 15
Notes to Financial Statements 16-21
Financial Highlights 22
Privacy Policy 23
</Table>
[PIMCO ADVISORS LOGO]
<Page>
PIMCO HIGH INCOME FUND LETTER TO SHAREHOLDERS
November 10, 2003
Dear Shareholder:
We are pleased to provide you with the initial financial report of the PIMCO
High Income Fund (the "Fund") for the period April 30, 2003 (commencement of
operations) through September 30, 2003.
Please refer to the following pages for specific Fund information. If you have
any questions regarding the information provided, please contact your financial
advisor or call our shareholder services area at 1-800-331-1710. Please note
that a wide range of information and resources can be accessed through our Web
site, www.pimcoadvisors.com.
We at the Fund, together with PIMCO Advisors Fund Management LLC, the Fund's
investment manager and Pacific Investment Management Company LLC, the Fund's
sub-adviser, thank you for investing with us. We remain dedicated to serving
your investment needs.
Sincerely,
/s/ Stephen Treadway /s/ Brian S. Shlissel
Stephen Treadway Brian S. Shlissel
CHAIRMAN PRESIDENT, CHIEF EXECUTIVE OFFICER
1
<Page>
PIMCO HIGH INCOME FUND PERFORMANCE SUMMARY AND STATISTICS
September 30, 2003 (unaudited)
<Table>
SYMBOL: PRIMARY INVESTMENTS: INCEPTION DATE:
PHK U.S. dollar-denominated corporate 4/30/03
debt obligations of varying
OBJECTIVE: maturities and other corporate TOTAL NET ASSETS(1):
Seeks to provide high current income-producing securities. $2,585 million
income. Capital appreciation is a
secondary objective. PORTFOLIO MANAGERS:
David C. Hinman
Raymond Kennedy
Charles Wyman
</Table>
<Table>
<Caption>
TOTAL RETURN(2): MARKET PRICE NAV
- -------------------------------------------------------------------------------------
4/30/03 (commencement of operations) to 9/30/03 (3.55)% 6.48%
</Table>
[CHART]
WEEKLY COMMON SHARE PRICE PERFORMANCE:
4/30/03 (commencement of operations) to 9/30/03
<Table>
4/30/2003 $ 14.31 $ 15.00
$ 14.36 $ 15.19
$ 14.36 $ 15.13
$ 14.40 $ 15.15
$ 14.36 $ 15.17
$ 14.43 $ 15.01
$ 14.71 $ 15.02
$ 14.87 $ 15.18
$ 14.78 $ 14.95
$ 14.58 $ 14.83
$ 14.54 $ 14.98
$ 14.50 $ 14.94
$ 14.47 $ 14.65
$ 14.35 $ 14.08
$ 13.76 $ 13.84
$ 13.74 $ 13.83
$ 13.43 $ 13.44
$ 14.03 $ 13.67
$ 14.33 $ 13.77
$ 14.48 $ 14.17
$ 14.48 $ 14.02
$ 14.68 $ 14.03
$ 14.67 $ 13.99
9/30/2003 $ 14.75 $ 13.98
</Table>
PORTFOLIO STATISTICS:
<Table>
Market Price $ 13.98
- ---------------------------------------
Net Asset Value $ 14.75
- ---------------------------------------
Market Price Yield(3) 10.46%
- ---------------------------------------
</Table>
(1) Inclusive of net assets attributable to Preferred Shares outstanding.
(2) PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Total return is
determined by subtracting the initial investment from the redeemable value at
the end of the period and dividing the remainder by the initial investment and
expressing the result as a percentage. The calculation assumes that all income
dividends have been reinvested at prices obtained under the Fund's dividend
reinvestment plan. Total investment return does not reflect broker commissions
or sales charges. Total return for a period of less than one year is not
annualized.
An investment in the Fund involves risk, including the loss of principal.
Investment return, price, yield and net asset value will fluctuate with changes
in market conditions. This data is provided for information only and is not
intended for trading purposes. Closed-end funds, unlike open-end funds, are not
continuously offered. There is a one-time public offering and once issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets applicable to common shareholders less total
liabilities divided by the number of common shares outstanding. Holdings are
subject to change daily.
(3) Market Price Yield is determined by dividing the annualized current monthly
per share dividend to common shareholders by the market price per common share
at September 30, 2003.
2
<Page>
PIMCO HIGH INCOME FUND SCHEDULE OF INVESTMENTS
September 30, 2003 (unaudited)
<Table>
<Caption>
PRINCIPAL
AMOUNT CREDIT RATING
(000) (MOODY'S/S&P) VALUE*
- -----------------------------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES - 86.5%
ADVERTISING - 0.5%
$ 3,600 American Color Graphics, Inc., 10.00%, 6/15/10 (a) (d)
(acquired 7/8/03-7/15/03; cost-$3,677,500) B3/B $ 3,825,000
6,900 RH Donnelley Finance Corp., 8.875%, 12/15/10 (a) (d)
(acquired 5/14/03-7/30/03, cost-$7,599,191) B1/B+ 7,762,500
----------------
11,587,500
================
AEROSPACE - 0.2%
5,600 Armor Holdings, Inc., 8.25%, 8/15/13 (a) (d)
(acquired 8/6/03; cost-$5,507,639) B1/B+ 5,950,000
----------------
AIRLINES - 1.3%
Continental Airlines, Inc., pass thru certificates,
20,000 6.92%, 4/2/13, 97-5A (b) (c) (d) (e)
(acquired 7/1/03; cost $17,807,138) NR/NR 18,405,468
6,500 7.373%, 12/15/15, Ser. 01-1 Ba1/BBB 4,943,200
10,000 Delta Air Lines, Inc., pass thru cerficates,
Ser. 00-1, 7.92%, 5/18/12 Baa3/BBB 8,586,179
982 United Air Lines, Inc., pass thru cerficates,
Ser. 00-2, 7.19%, 10/1/12 NR/NR 835,317
3,780 US Airways, Inc., Ser. 93-A2, 9.625%, 9/1/03 (e) NR/D 1,304,182
----------------
34,074,346
================
AUTOMOTIVE - 2.0%
10,450 Arvin Capital I, 9.50%, 2/1/27 Ba2/B+ 10,188,750
11,851 Dura Operating Corp., Ser. B, 8.625%, 4/15/12 B1/B+ 12,354,668
15,000 General Motors Corp., 8.25%, 7/15/23 Baa1/BBB 15,725,550
9,800 TRW Automotive, Inc., 9.375%, 2/15/13 (a) (d)
(acquired 5/8/03-8/8/03; cost - $10,455,610) B1/B+ 11,074,000
----------------
49,342,968
================
BUILDING/CONSTRUCTION - 0.5%
13,000 Building Materials Corp. of America, Ser. B,
7.75%-8.625%, 7/15/05-12/15/06 B2/B 13,215,000
----------------
CHEMICALS - 2.3%
12,500 ARCO Chemical Co., 9.375%, 12/15/05 Ba3/BB- 12,625,000
4,900 Avecia Group plc, 11.00%, 7/1/09 Caa1/CCC+ 4,312,000
5,000 Compass Minerals Group, Inc., 10.00%, 8/15/11 B3/B- 5,575,000
6,000 Equistar Chemical L.P., 10.125%, 9/1/08 B1/BB- 5,970,000
8,925 International Specialty Holdings, Inc.,
Ser. B, 10.625%, 12/15/09 B2/B+ 9,772,875
2,030 Lyondell Chemical Co., 9.625%, 5/1/07 Ser. A Ba3/BB- 1,938,650
Millennium America Inc.,
5,350 9.25%, 6/15/08 Ba3/BB- 5,577,375
1,000 9.25%, 6/15/08 (a) (d)
(acquired 5/3/03; cost-$1,085,281) NR/BB 1,042,500
10,000 Westlake Chemical Corp., 8.75%, 7/15/11 (a) (d)
(acquired 7/21/03; cost $10,000,000) Ba3/B+ 10,425,000
----------------
57,238,400
================
CONSUMER PRODUCTS - 0.3%
8,000 Rayovac Corp., 8.50%, 10/1/13 (a) (b) (d)
(acquired 9/26/03; cost-$8,094,500) B3/B- 8,280,000
----------------
</Table>
3
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT CREDIT RATING
(000) (MOODY'S/S&P) VALUE*
- -----------------------------------------------------------------------------------------------------------
CONTAINERS & PACKING - 3.1%
Crown Euro Holdings SA
$ 22,250 9.50%, 3/1/11 (a) (d)
(acquired 5/6/03-6/30/03; cost-$23,547,608) B1/B+ $ 24,030,000
2,100 10.875%, 3/1/13 (a) (d)
(acquired 7/14/03; cost-$2,296,378) B2/B 2,325,750
9,650 Graphic Packaging International Corp., 8.50%, 8/15/11 (a) (d)
(acquired 8/1/03; cost-$9,650,000) B2/B- 10,494,375
12,700 Jefferson Smurfit Corp., 7.50%, 6/1/13 B2/B 12,954,000
25,950 Owens-Brockway Glass Containers 7.75%-8.75%, 5/15/11-5/15/13 B1/BB 27,259,875
900 Stone Container Corp., 9.75%, 2/1/11 B2/B 985,500
----------------
78,049,500
================
DIVERSIFIED MANUFACTURING - 2.7%
7,295 Dresser, Inc., 9.375%, 4/15/11 B2/B 7,696,225
7,175 Flender Holding 11.00%, 8/1/10 (a) (d)
(acquired 7/31/03, cost-$8,075,817) B2/B- 9,024,096
12,675 Transdigm, Inc., 8.375%, 7/15/11 (a) (d)
(acquired 7/15/03-7/25/03; cost-$12,829,875) B3/B- 13,689,000
37,210 Tyco International Group SA,
6.75%-6.875%, 2/15/11-1/15/29 Ba2/BBB- 37,290,352
----------------
67,699,673
================
ENERGY - 0.8%
1,042 Calpine Canada Energy Finance ulc, 8.50%, 5/1/08 B1/CCC+ 755,450
5,450 Calpine Corp. 8.50%, 7/15/10 (a) (d)
(acquired 7/14/03-9/25/03; cost-$5,331,805) NR/B 5,041,250
16,489 South Point Energy Center LLC, 8.40%, 5/30/12 (a) (d)
(acquired 5/1/03-8/4/03; cost-$15,119,855) B1/B 15,509,944
----------------
21,306,644
================
FINANCIAL SERVICES - 1.4%
68,990 FINOVA Group, Inc., 7.50%, 11/15/09 NR/NR 34,495,000
----------------
FINANCING - 5.4%
32,849 AES Ironwood LLC, 8.857%, 11/30/25 B2/BB- 33,916,943
8,759 AES Red Oak LLC, Ser A, 8.54%, 11/30/19 B2/BB- 9,043,801
Bluewater Finance Ltd.
14,000 10.25%, 2/15/12 B1/B 14,280,000
10,000 Bombardier Capital, Inc., 7.09%, 3/30/07 (b) (c) (d)
(acquired 8/12/03; cost-$10,097,496) NR/NR 10,777,538
5,500 Eircom Funding, 8.25%, 8/15/13 (a) (d)
(acquired 7/29/03; cost-$5,523,625) B1/BB+ 5,940,000
10,250 Fiat Finance Lux SA, 3.25%, 1/9/07 (a) (d)
(acquired 7/17/03-9/10/03; cost-$9,885,662) Ba3/NR 10,134,688
7,450 Fuji JGB Investment LLC, 9.87%, 6/30/08 (a) (d)
(acquired 5/16/03-7/1/03; cost-$7,833,289) Baa3/B+ 8,037,053
13,200 Gemstone Investors Ltd., 7.71%, 10/31/04 (a) (d)
(acquired 6/13/03-9/9/03; cost-$12,988,019) Caa1/B 13,101,000
3,000 IBJ Preferred Capital Co. LLC, 8.79%, 6/30/08 (a) (d)
(acquired 9/10/03; cost-$3,096,000) Baa2/B+ 3,097,500
9,590 MPD Acquistitions plc, 9.625%, 10/1/12 B2/B 10,549,000
4,000 Sheridan Group, Inc., 10.25%, 8/15/11 (a) (d)
(acquired 8/14/03; cost-$3,947,174) B1/B 4,185,000
12,500 Tokai Pfd Capital Co., LLC, 9.98%, 6/30/08, VRN (a) (d)
(acquired 5/15/03-7/1/03; cost-$13,195,692) Baa3/B+ 13,589,950
----------------
136,652,473
================
</Table>
4
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT CREDIT RATING
(000) (MOODY'S/S&P) VALUE*
- -----------------------------------------------------------------------------------------------------------
FOOD-RETAIL - 0.4%
Ingles Markets, Inc.
$ 2,000 8.875%, 12/1/11 Ba3/B+ $ 2,030,000
8,600 8.875%, 12/1/11 (a) (d)
(acquired 5/20/03; cost-$8,686,000) Ba3/B+ 8,729,000
----------------
10,759,000
================
FOOD SERVICES - 0.2%
5,000 Domino's, Inc., 8.25%, 7/1/11 (a) (d)
(acquired 6/18/03; cost-$5,076,120) B3/B- 5,306,250
----------------
HEALTHCARE & HOSPITALS - 2.8%
10,150 Beverly Enterprises, Inc., 9.00%-9.625%, 2/15/06-4/15/09 B1/B+ 10,756,750
Healthsouth Corp.,
19,730 7.625%-8.50%, 2/1/08-6/1/12 Caa2/D 17,142,650
7,000 10.75%, 10/1/08 C/D 6,160,000
16,690 Rotech Healthcare, Inc., 9.50%, 4/1/12 B2/B+ 17,691,400
19,070 Tenet Healthcare Corp., 6.375%-7.375%, 12/1/11-2/1/13 Ba3/BB 19,075,875
----------------
70,826,675
================
HOTELS/GAMING - 3.6%
3,500 Extended Stay America, Inc., 9.875%, 6/15/11 B2/B 3,880,625
4,615 Hilton Hotels Corp., 7.50%, 12/15/17 Ba1/BBB- 4,707,300
7,000 Host Marriott Hotels Properties, Inc., 8.45%, 12/1/08, Ser. C Ba3/B+ 7,323,750
Host Marriott LP,
6,249 9.25%, 10/1/07 Ser. G Ba3/B+ 6,850,466
7,525 9.50%, 1/15/07, Ser. I Ba3/B+ 8,277,500
26,446 ITT Corp., 7.375%-7.75%, 11/15/15-11/15/25 Ba1/BB+ 26,677,580
Mandalay Resort Group,
12,500 9.375%, 2/15/10 Ba3/BB- 14,406,250
2,000 9.50%, 8/1/08 Ba2/BB+ 2,305,000
1,000 MGM Mirage, Inc., 8.375%, 2/1/11 Ba2/BB+ 1,105,000
Park Place Entertainment Corp.,
14,153 8.875%-9.375%, 2/15/07-9/15/08 Ba2/BB+ 15,685,448
----------------
91,218,919
================
LEISURE - 1.6%
16,850 Royal Caribbean Cruises, Ltd., 8.00%-8.75%, 5/15/10-2/2/11 Ba2/BB+ 17,913,500
Six Flags, Inc.,
15,000 9.50%, 2/1/09 B2/B 14,362,500
8,000 9.75%, 4/15/13 (a) (d)
(acquired 6/23/03-6/30/03; cost-$7,970,489) B2/B 7,560,000
----------------
39,836,000
================
MISCELLANEOUS - 14.2%
HYDI 100,
92,070 8.00%, 6/20/08 (a) (d) (h)
(acquired 5/14/03-8/6/03; cost-$91,743,398) B2/NR 93,911,400
145,259 9.00%, 6/20/08 (a) (d) (h)
(acquired 5/14/03-8/1/03; cost-$149,218,173) B3/NR 148,164,444
109,286 Targeted Return Index Securities Trust,
2.72%, 5/15/13 (a) (d) (h)
(acquired 5/7/03-8/6/03; cost-$115,987,381) B1/NR 117,303,571
----------------
359,379,415
================
MULTI-MEDIA - 4.0%
7,000 Allbritton Communications Co., 7.75%, 12/15/12 B3/B- 7,175,000
</Table>
5
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT CREDIT RATING
(000) (MOODY'S/S&P) VALUE*
- ----------------------------------------------------------------------------------------------------------
MULTI-MEDIA (CONTINUED)
$ 13,700 CF Cable TV, Inc., 9.125%, 7/15/07 B1/B+ $ 14,385,000
CSC Holdings, Inc.,
15,500 7.625%-8.125%, 7/15/09-4/1/11 Ser. B B1/BB- 15,798,750
10,000 7.875%, 2/15/18 B1/BB- 9,800,000
31,510 EchoStar DBS Corp., 9.375%, 2/1/09 Ba3/BB- 33,755,088
Young Broadcasting, Inc.,
10,256 8.75%-9.00%, 1/15/06-6/15/07, Ser. B Caa1/CCC+ 10,412,880
9,512 10.00%, 3/1/11 Caa1/CCC+ 10,130,280
----------------
101,456,998
================
OFFICE EQUIPMENT - 0.4%
9,700 Danka Business Systems plc, 11.00%, 6/15/10 (a) (d)
(acquired 7/8/03-8/25/03; cost-$9,437,192) B2/B+ 8,972,500
----------------
OIL & GAS - 8.7%
22,000 Chesapeake Energy Corp., 9.00%, 8/15/12 Ba3/BB- 24,860,000
2,200 Dynegy Holding Inc., 9.875%-10.125%,
7/15/10-7/15/13 (a) (b) (d)
(acquired 5/2/03-5/19/03; cost-$20,345,249) B3/B- 2,200,000
25,000 Dynegy-Roseton Danskammer, Ser. B, 7.67%, 11/8/16 Caa2/B 21,265,625
600 El Paso Corp., 7.875%, 6/15/12 Caa1/B 507,000
El Paso Energy Corp.,
36,950 7.375%-7.80%, 12/15/12-1/15/32 Caa1/B 27,965,625
8,500 8.05%, 10/15/30 Caa1/NR 6,481,250
5,100 El Paso Energy Partners Corp. Ser. B, 8.50%, 6/1/10-6/1/11 B1/BB- 5,520,750
17,500 El Paso Production Holding Co., 7.75%, 6/1/13 (a) (d)
(acquired 5/20/03-7/30/03; cost-$17,308,250) B2/B+ 16,712,500
13,400 Hanover Equipment Trust, Ser. A, 8.50%, 9/1/08 B2/B+ 13,869,000
5,000 Leviathan Gas Pipeline Corp., Ser. B, 10.375%, 6/1/09 B1/BB- 5,700,000
3,200 Newpark Resources, Inc., Ser. B, 8.625%, 12/15/07 B2/B+ 3,312,000
5,000 Pemex Project Funding Master Trust, 8.625%, 2/1/22 Baa1/BBB- 5,600,000
Petroleos Mexicanos
2,500 8.625%, 12/1/23 (a) (d)
(acquired 5/1/03; cost-$2,815,980) Baa1/BBB- 2,768,750
5,000 9.25%, 3/30/18 Baa1/BBB- 5,887,500
8,000 Sonat, Inc., 7.625%, 7/15/11 Caa1/B 6,640,000
Tesoro Petroleum Corp.
6,000 9.00%, 7/1/08 Ser. B B3/B 5,880,000
3,900 9.625%, 4/1/12 B3/B 3,900,000
4,300 Vintage Petroleum, Inc., 7.875%, 5/15/11 B1/B 4,482,750
58,500 Williams Cos., Inc., 7.875%-8.625%, 6/1/10-9/1/21 B3/B+ 57,102,500
----------------
220,655,250
================
PAPER & PAPER PRODUCTS - 2.5%
12,075 Abitibi-Consolidated, Inc., 8.55%-8.85%, 8/1/10-8/1/30 Ba1/BB+ 12,765,573
10,500 Buckeye Technologies, Inc., 8.50%, 10/1/13 (a) (d)
(acquired 9/15/03; cost-$10,500,000) B3/B+ 10,867,500
39,930 Georgia-Pacific Corp., 8.875%-9.875%, 11/1/21-5/15/31 Ba3/BB+ 40,480,450
----------------
64,113,523
================
PUBLISHING - 2.8%
11,536 American Media Operations, Inc., Ser. B,
10.25%, 5/1/09, Ser. B B2/B- 12,386,780
8,000 CanWest Media, Inc., 10.625%, 5/15/11 B2/B- 9,120,000
</Table>
6
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT CREDIT RATING
(000) (MOODY'S/S&P) VALUE*
- ----------------------------------------------------------------------------------------------------------
PUBLISHING (CONTINUED)
Dex Media East LLC
$ 3,500 8.50%, 8/15/10 (a) (d)
(acquired 8/18/03; cost-$3,605,000) B2/B $ 3,823,750
11,000 9.875%, 11/15/09 B2/B 12,512,500
7,000 9.875%, 8/15/13 (a) (d)
(acquired 8/15/03; cost-$7,000,000) B3/B 7,945,000
6,125 12.125%, 11/15/12 B3/B 7,426,563
5,000 Houghton Mifflin Co., 8.25%, 2/1/11 B2/B 5,262,500
13,000 PRIMEDIA, Inc., 8.00%, 5/15/13 (a) (d)
(acquired 5/8/03; cost-$13,000,000) B3/B 13,195,000
----------------
71,672,093
================
RETAIL - 0.9%
5,000 Amerigas Partners LP, Ser. D, 10.00%, 4/15/06 B2/BB- 5,387,500
18,315 J.C. Penney Co., Inc., 7.125%, 11/15/23 Ba3/BB+ 17,399,250
----------------
22,786,750
================
TELECOMMUNICATIONS - 15.3%
20,000 ACC Escrow Corp., 10.00%, 8/1/11 (a) (d)
(acquired 7/25/03; cost-$20,000,000) B2/B- 21,600,000
13,800 AT&T Corp., 8.00%, 11/15/31 Baa2/BBB 16,395,904
8,586 Calpoint Receivable Structured Trust, 7.44%, 12/10/06 (a) (d)
(acquired 9/18/03; cost-$8,266,336) Caa1/CCC+ 8,328,785
25,500 Crown Castle International Corp., 9.375%-9.50%, 8/1/11 B3/CCC 27,288,750
7,300 Dobson Communications Corp., 8.875%, 10/1/13 (a) (d)
(acquired 9/12/03, cost-$7,300,000) B3/CCC+ 7,418,625
22,000 Insight Midwest LP, 10.50%, 11/1/10 B2/B+ 23,100,000
5,000 Level 3 Financing Inc., 10.75%. 10/15/11 (a) (b) (d)
(acquired 9/26/03; cost-$5,000,000) Caa2/CCC- 5,000,000
22,725 MCI Communications Corp., 6.50%-7.125%, 4/15/10-6/15/27 (e) NR/NR 18,009,560
13,000 Nextel Communications, Inc., 7.375%, 8/1/15 B2/B+ 13,195,000
PanAmSat Corp.,
15,595 6.875%, 1/15/28 Ba2/BB- 15,400,063
20,550 8.50%, 2/1/12 Ba3/B- 21,628,875
51,900 Qwest Capital Funding, 7.25%-7.90%, 8/15/10-2/15/11 Caa2/CCC+ 47,111,500
9,075 Qwest Communications International, Inc., Ser. B,
7.50%, 11/1/08 Caa1/CCC+ 8,757,375
12,865 Qwest Services Corp., 13.00%-13.50%, 12/15/07-12/15/10 (a) (d)
(acquired 5/2/03-9/3/03; cost-$14,036,083) NR/CCC+ 14,554,800
11,000 SpectraSite, Inc., 8.25%, 5/15/10 (a) (d)
(acquired 5/16/03-7/23/03; cost-$11,160,239) B3/CCC+ 11,660,000
17,800 Sprint Capital Corp. (FON Group), 8.75%, 3/15/32 Baa3/BBB- 21,224,809
18,864 TeleCorp PCS, Inc., 10.625%, 7/15/10 Baa2/BBB 22,350,067
13,200 Time Warner Telecom, Inc., 9.75%-10.125%, 7/15/08-2/1/11 B3/CCC+ 13,076,125
10,000 Tritel PCS, Inc., 10.375%, 1/15/11 Baa2/BBB 12,077,220
Triton PCS, Inc.
7,000 8.50%, 6/1/13 B2/B+ 7,542,500
11,345 8.75%, 11/15/11 B3/B- 11,373,362
2,000 US West Communications, Inc., 7.20%, 11/1/04 B2/B+ 2,065,000
WorldCom, Inc., NR/NR
73,941 6.95%-8.25%, 5/15/06-5/15/31 (e) NR/NR 24,585,383
42,250 7.375%, 11/15/49 (a) (d) (e)
(acquired 5/1/03; cost-$11,988,860) NR/NR 14,048,125
----------------
387,791,828
================
</Table>
7
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT CREDIT RATING
(000) (MOODY'S/S&P) VALUE*
- ----------------------------------------------------------------------------------------------------------
TOBACCO - 0.8%
Commonwealth Brands, Inc.
$ 10,000 9.75%, 4/15/08 (a) (d)
(acquired 4/30/03; cost-$9,649,633) NR/B- $ 10,800,000
2,100 10.625%, 9/1/08 (a) (b) (d)
(acquired 7/30/03; cost-$2,079,973) B3/B- 2,257,500
8,500 Dimon, Inc., 6.25%, 3/31/07 (c) NR/NR 8,210,150
----------------
21,267,650
================
UTILITIES - 6.3%
25,380 AES Corp., 8.75%, 5/15/13 (a) (d)
(acquired 5/1/03-8/7/03; cost-$25,360,224) B2/B+ 26,775,900
CMS Energy Corp.,
8,650 7.50%-9.875%, 10/15/07-1/15/09 B3/B+ 9,098,750
13,800 7.75%, 8/1/10 (a) (d)
(acquired 7/9/03-8/13/03; cost-$13,448,201) B3/B+ 13,731,000
5,700 CMS Energy Corp., X-tra Trust, 7.00%, 1/15/05 B3/B+ 5,685,750
12,000 IPALCO Enterprises, Inc., 7.625%, 11/14/11 Ba1/BB- 13,080,000
23,000 Legrand S.A., 8.50%, 2/15/25 Ba3/B+ 23,460,000
Midwest Generation LLC., pass thru certificates,
16,100 8.30%, 7/2/09 Ser. A B2/BB- 15,375,500
22,250 8.56%, 1/2/16 Ser. B B2/BB- 20,581,250
PSE&G Energy Holdings LLC,
11,750 8.50%, 6/15/11 Baa3/BB- 11,838,125
9,650 8.625%-10.00%, 2/15/08-10/1/09 Ba3/BB- 10,054,625
9,200 TECO Energy, Inc., 7.50%, 6/15/10 Ba1/BB+ 9,372,500
----------------
159,053,400
================
WASTE MANAGEMENT - 1.5%
Allied Waste North America
19,450 9.25%, 9/1/12 Ba3/BB- 21,589,500
14,925 10.00%, 8/1/09, Ser. B B2/B+ 16,249,594
----------------
37,839,094
================
Total Corporate Bonds & Notes (cost-$2,131,045,721) 2,190,826,849
================
SOVEREIGN DEBT OBLIGATIONS - 6.8%
BRAZIL - 3.0%
Federal Republic of Brazil,
28,416 2.125%, 10/15/03, Ser. EI, (f) B2/B+ 27,776,640
52,558 8.00%-11.00%, 8/7/11-8/17/40 B2/B+ 48,197,255
----------------
75,973,895
================
PANAMA - 1.5%
Republic of Panama,
19,474 1.9375%, 1/20/04, VRN Ba1/NR 18,207,928
18,130 9.375%-10.75%, 2/8/11- 4/1/29 Ba1/BB 21,026,050
----------------
39,233,978
================
PERU - 1.7%
Republic of Peru,
5,928 5.00%, 3/7/07, VRN Ba3/BB- 5,446,646
10,200 9.125%, 1/15/08 Ba3/BB- 11,934,000
22,150 9.125%, 2/21/12 Baa3/BB- 24,752,625
----------------
42,133,271
================
</Table>
8
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT CREDIT RATING
(000) (MOODY'S/S&P) VALUE*
- -----------------------------------------------------------------------------------------------------------
RUSSIA - 0.6%
Russian Federation
$ 15,500 5.00%, 3/31/07, VRN Baa3/BB $ 14,670,750
----------------
Total Sovereign Debt Obligations (cost-$167,368,144) 172,011,894
================
LOAN PARTICIPATIONS (b) (g) - 1.6%
AUTOMOTIVE - 0.1%
4,928 Federal Mogul, 2.85%, 8/4/04
(J.P.Morgan Chase & Co.)
(acquired 8/4/03: cost-$3,968,316) NR/NR 3,764,142
----------------
BUILDING/CONSTRUCTION - 0.1%
2,500 Calpine Construction Finance Co., L.P., 7.50%, 8/13/09
(Goldman Sachs Credit Partners L.P.)
(acquired 8/7/03; cost-$2,450,962) NR/NR 2,575,000
----------------
CONTAINERS & PACKING - 0.1%
3,500 Graphic Packing International, Inc., 3.86%, 8/8/10 Term B
(J.P.Morgan Chase & Co.)
(acquired 8/6/03; cost-$3,500,000) NR/NR 3,523,188
----------------
DIVERSIFIED MANUFACTURING - 0.1%
1,753 SPX Corp., 3.375% 9/30/09, Term B
(J.P.Morgan Chase & Co.)
(acquired 8/14/03; cost-$1,752,591) NR/NR 1,765,736
----------------
MEDICAL PRODUCTS - 0.0%
998 Fresenius Corp., 3.362%, 3/1/10 Term B
(Bank of America, N.A.)
(acquired 8/20/03; cost-$997,500) NR/NR 1,004,981
----------------
MULTI-MEDIA - 0.1%
2,972 Charter Communications Holdings, LLC, 3.57%, 3/18/08 Term B
(Bank of America, N.A.)
(acquired 5/14/03; cost-$2,785,070) NR/NR 2,822,251
----------------
OIL & GAS - 0.3%
3,413 Aquila, Inc., 8.75%, 4/15/06 Term 2
(Credit Suisse First Boston)
(acquired 5/9/03; cost-$3,426,520) NR/NR 3,472,647
2,730 Aquila, Inc., 8.75%, 4/15/06 Term 2
(Credit Suisse First Boston)
(acquired 8/6/03; cost-$2,740,813) NR/NR 2,777,710
----------------
6,250,357
================
TELECOMMUNICATIONS - 0.6%
5,700 Qwest Corp., 6.50%, 6/5/07, Term A
(Credit Suisse First Boston)
(acquired 6/5/03; cost-$5,724,501) NR/NR 5,833,950
2,500 Qwest Corp., 6.50%, 6/5/07, Term A
(Merrill Lynch, Pierce, Fenner & Smith, Inc.)
(acquired 6/24/03; cost-$2,510,746) NR/NR 2,558,750
2,500 Qwest Corp., 6.50%, 6/5/07, Term A
(Morgan Stanley Senior Funding, Inc.)
(acquired 6/24/03; cost-$2,510,746) NR/NR 2,558,750
3,000 Qwest Corp., 6.50%, 6/5/07, Term A
(Morgan Stanley Senior Funding, Inc.)
(acquired 6/25/03; cost-$3,012,895) NR/NR 3,070,500
----------------
14,021,950
================
</Table>
9
<Page>
<Table>
<Caption>
PRINCIPAL AMOUNT
000/ CREDIT RATING
SHARES (MOODY'S/S&P) VALUE*
- -----------------------------------------------------------------------------------------------------------
UTILITIES - 0.2%
$ 4,000 AES Corp. 1.00% 7/25/07 (c)
(UBS AG)
(acquired 8/7/03; cost-$3,760,000) NR/NR $ 3,748,749
================
Total Loan Participations (cost-$39,140,660) 39,476,354
================
PREFERRED STOCK - 1.0%
MEDICAL PRODUCTS - 1.0%
24,900 Fresenius Care Capital Trust II,
7.875%, 2/1/08 (cost-$26,221,754) Ba2/BB- 25,958,250
----------------
CALIFORNIA MUNICIPAL BONDS & NOTES - 0.6%
$ 9,615 Los Angeles Community Redevelopement Agency,
Community Redevelopment Financing Auth.,
Rev., Ser H, 8.25%-9.75%, 9/1/07-9/1/32 NR/NR 10,394,041
5,105 San Diego Redevelopment Agency,
Tax Allocation, 6.59%-7.74%, 11/1/13-11/1/21 Baa3/NR 4,927,250
----------------
Total California Municipal Bonds & Notes (cost-$15,300,459) 15,321,291
================
SHORT-TERM INVESTMENTS--3.5%
CORPORATE BONDS & NOTES - 1.7%
AIRLINES - 0.0%
427 United Air Lines, Inc. pass thru certificates, Ser. 97-A,
1.36%, 12/2/03 (f) NR/B 334,948
----------------
OFFICE EQUIPMENT - 0.7%
14,600 Xerox Capital Europe plc, 5.875%, 5/15/04 B1/B+ 14,746,000
----------------
UTILITIES - 1.0%
5,000 Edison International, Inc., 6.875%, 9/15/04 B3/B- 5,112,500
1,950 Illinova Corp., 7.125%, 2/1/04 Caa2/CCC+ 1,940,250
18,655 Pinnacle One Partners LP, 8.83%, 8/15/04 (a) (d)
(acquired 5/15/03-7/25/03; cost-$19,274,950) Ba2/BB+ 19,494,475
----------------
26,547,225
================
Total Corporate Bonds & Notes (cost-$41,145,497) 41,628,173
================
COMMERCIAL PAPER - 1.0%
FINANCE - 1.0%
14,700 General Electric Capital Corp., 1.02%-1.06%,
12/17/03-12/18/03 A-1+/P-1 14,665,797
10,500 UBS Finance LLC, 1.11%, 10/1/03 A-1+/P-1 10,500,000
----------------
Total Commercial Paper (cost-$25,167,550) 25,165,797
================
REPURCHASE AGREEMENT - 0.8%
21,289 State Street Bank & Trust Co.,
dated 9/30/03, 0.80%, due 10/1/03
proceeds:$21,289,473; collateralized by
Freddie Mac, 2/15/05, valued at $21,715,069 (cost-$21,289,000) 21,289,000
----------------
Total Short-Term Investments (cost-$87,602,047) 88,082,970
================
TOTAL INVESTMENTS (cost-$2,466,678,785+) - 100.0% . $ 2,531,677,608
================
</Table>
10
<Page>
NOTES TO SCHEDULE OF INVESTMENTS:
* Long-term debt securities are valued by an independent pricing service
authorized by the Board of Trustees.
(a) Security exempt from registration, under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, typically to qualified institutional investors. At September
30, 2003, these securities amounted to $789,687,481 or 31.2% of investments.
(b) llliquid security.
(c) Fair-valued security.
(d) Private Placement. Restricted as to resale and does not have a readily
available market; the aggregate cost and value of such securities is
$818,870,487 or 32.3% of investments.
(e) Security in default.
(f) Floating Rate Security. Interest rate shown is the rate in effect at
September 30, 2003. Maturity date shown is the date of the next change.
(g) Participation interests were acquired through the financial institution
indicated parenthetically.
(h) Credit-Linked Trust Certificate.
+ The cost basis of portfolio securities for federal income tax purposes is
$2,466,678,785. Aggregate gross unrealized appreciation for securities in
which there is an excess of value over tax cost is $77,756,379; aggregate
gross unrealized depreciation for securites in which there is an excess of
tax cost over value is $12,757,556; net unrealized appreciation for federal
income tax purposes is $64,998,823.
GLOSSARY:
HYDI - JPMorgan High Yield Debt Index
NR - Not Rated
VRN- Variable Rate Note
11
<Page>
PIMCO HIGH INCOME FUND STATEMENT OF ASSETS AND LIABILITIES
September 30, 2003 (unaudited)
<Table>
ASSETS:
Investments, at value (cost-$2,466,678,785) $ 2,531,677,608
- ------------------------------------------------------------------------------------------ ----------------
Cash 592
- ------------------------------------------------------------------------------------------ ----------------
Interest receivable 49,633,802
- ------------------------------------------------------------------------------------------ ----------------
Receivable for investments sold 43,588,290
- ------------------------------------------------------------------------------------------ ----------------
Unrealized appreciation on credit default swaps 457,406
- ------------------------------------------------------------------------------------------ ----------------
Interest receivable from swaps 31,708
- ------------------------------------------------------------------------------------------ ----------------
Prepaid expenses 47,250
- ------------------------------------------------------------------------------------------ ----------------
Total Assets 2,625,436,656
========================================================================================== ================
LIABILITIES:
Payable for investments purchased 24,319,096
- ------------------------------------------------------------------------------------------ ----------------
Dividends payable to common and preferred shareholders 14,050,404
- ------------------------------------------------------------------------------------------ ----------------
Investment management fee payable 1,473,732
- ------------------------------------------------------------------------------------------ ----------------
Payable for premiums received on credit default swaps 296,471
- ------------------------------------------------------------------------------------------ ----------------
Unrealized depreciation on forward foreign currency contracts 113,296
- ------------------------------------------------------------------------------------------ ----------------
Common stock and preferred shares offering costs payable 48,777
- ------------------------------------------------------------------------------------------ ----------------
Accrued expenses 230,704
- ------------------------------------------------------------------------------------------ ----------------
Total Liabilities 40,532,480
- ------------------------------------------------------------------------------------------ ----------------
PREFERRED SHARES ($25,000 NET ASSET AND LIQUIDATION VALUE PER SHARE APPLICABLE
TO AN AGGREGATE OF 36,000 SHARES ISSUED AND OUTSTANDING) 900,000,000
- ------------------------------------------------------------------------------------------ ----------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS $ 1,684,904,176
========================================================================================== ================
COMPOSITION OF NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Common stock:
Par value ($0.00001 per share, applicable to 114,263,164 shares issued and outstanding) $ 1,143
- ------------------------------------------------------------------------------------------ ----------------
Paid-in-capital in excess of par 1,625,483,945
- ------------------------------------------------------------------------------------------ ----------------
Dividends in excess of net investment income (1,028,239)
- ------------------------------------------------------------------------------------------ ----------------
Net realized loss on investments, futures, options written and foreign currency
transactions (4,901,069)
- ------------------------------------------------------------------------------------------ ----------------
Net unrealized appreciation of investments, swaps, and foreign currency transactions 65,348,396
- ------------------------------------------------------------------------------------------ ----------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS $ 1,684,904,176
- ------------------------------------------------------------------------------------------ ----------------
NET ASSET VALUE PER COMMON SHARE $ 14.75
========================================================================================== ================
</Table>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12
<Page>
PIMCO HIGH INCOME FUND STATEMENT OF OPERATIONS
For the period April 30, 2003* through September 30, 2003 (unaudited)
<Table>
INVESTMENT INCOME:
Interest $ 64,143,313
- ------------------------------------------------------------------------------------------ ----------------
Dividends 492,188
- ------------------------------------------------------------------------------------------ ----------------
Total Investment Income 64,635,501
========================================================================================== ================
EXPENSES:
Investment management fees 6,428,719
- ------------------------------------------------------------------------------------------ ----------------
Auction agent fees and commissions 602,488
- ------------------------------------------------------------------------------------------ ----------------
Custodian and accounting agent fees 170,011
- ------------------------------------------------------------------------------------------ ----------------
Audit and tax services fees 33,513
- ------------------------------------------------------------------------------------------ ----------------
New York Stock Exchange listing fees 32,750
- ------------------------------------------------------------------------------------------ ----------------
Trustees' fees and expenses 31,665
- ------------------------------------------------------------------------------------------ ----------------
Reports to shareholders 23,879
- ------------------------------------------------------------------------------------------ ----------------
Investor relations 17,330
- ------------------------------------------------------------------------------------------ ----------------
Legal fees 16,590
- ------------------------------------------------------------------------------------------ ----------------
Organizational expenses 15,000
- ------------------------------------------------------------------------------------------ ----------------
Transfer agent fees 13,524
- ------------------------------------------------------------------------------------------ ----------------
Insurance expense 2,141
- ------------------------------------------------------------------------------------------ ----------------
Miscellaneous 16,554
- ------------------------------------------------------------------------------------------ ----------------
Total expenses 7,404,164
- ------------------------------------------------------------------------------------------ ----------------
Less: custody credits earned on cash balances (69,316)
- ------------------------------------------------------------------------------------------ ----------------
Net expenses 7,334,848
- ------------------------------------------------------------------------------------------ ----------------
NET INVESTMENT INCOME $ 57,300,653
========================================================================================== ================
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
- ------------------------------------------------------------------------------------------
Investments (806,444)
- ------------------------------------------------------------------------------------------ ----------------
Futures contracts (4,574,240)
- ------------------------------------------------------------------------------------------ ----------------
Options written 658,872
- ------------------------------------------------------------------------------------------ ----------------
Foreign currency transactions (179,257)
- ------------------------------------------------------------------------------------------ ----------------
Net unrealized appreciation of investments, swaps and foreign currency transactions 65,348,396
- ------------------------------------------------------------------------------------------ ----------------
Net realized and unrealized gain on investments, swaps, options written and foreign
currency transactions 60,447,327
- ------------------------------------------------------------------------------------------ ----------------
NET INCREASE IN NET ASSETS RESULTING FROM INVESTMENT OPERATIONS 117,747,980
========================================================================================== ================
DIVIDENDS ON PREFERRED SHARES FROM NET INVESTMENT INCOME (2,690,589)
- ------------------------------------------------------------------------------------------ ----------------
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS
RESULTING FROM INVESTMENT OPERATIONS $ 115,057,391
========================================================================================== ================
</Table>
* Commencement of operations.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13
<Page>
PIMCO HIGH INCOME FUND STATEMENT OF CHANGES IN NET ASSETS
APPLICABLE TO COMMON SHAREHOLDERS
For the period April 30, 2003* through September 30, 2003 (unaudited)
<Table>
INVESTMENT OPERATIONS:
Net investment income $ 57,300,653
- ------------------------------------------------------------------------------------------ ----------------
Net realized loss on investments, futures contracts, options written and foreign
currency transactions (4,901,069)
- ------------------------------------------------------------------------------------------ ----------------
Net unrealized appreciation of investments, swaps, and foreign currency transactions 65,348,396
- ------------------------------------------------------------------------------------------ ----------------
Net increase in net assets resulting from investment operations 117,747,980
========================================================================================== ================
DIVIDENDS ON PREFERRED SHARES FROM NET INVESTMENT INCOME (2,690,589)
- ------------------------------------------------------------------------------------------ ----------------
Net increase in net assets applicable to common shareholders
resulting from investment operations 115,057,391
- ------------------------------------------------------------------------------------------ ----------------
DIVIDENDS TO COMMON SHAREHOLDERS FROM NET INVESTMENT INCOME (55,638,303)
- ------------------------------------------------------------------------------------------ ----------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from the sale of common stock 1,631,617,500
- ------------------------------------------------------------------------------------------ ----------------
Preferred shares underwriting discount charged to paid-in capital in excess of par (9,000,000)
- ------------------------------------------------------------------------------------------ ----------------
Common stock and preferred shares offering costs charged to paid-in capital
in excess of par (2,275,000)
- ------------------------------------------------------------------------------------------ ----------------
Reinvestment of dividends 5,042,585
- ------------------------------------------------------------------------------------------ ----------------
Net increase from capital share transactions 1,625,385,085
- ------------------------------------------------------------------------------------------ ----------------
Total increase in net assets applicable to common shareholders 1,684,804,173
========================================================================================== ================
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period 100,003
- ------------------------------------------------------------------------------------------ ----------------
End of period (including dividends in excess of net investment income of $1,028,239) $ 1,684,904,176
========================================================================================== ================
COMMON SHARES ISSUED AND REINVESTED:
Issued 113,900,000
- ------------------------------------------------------------------------------------------ ----------------
Issued in reinvestment of dividends 356,183
- ------------------------------------------------------------------------------------------ ----------------
NET INCREASE 114,256,183
========================================================================================== ================
</Table>
* Commencement of operations
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14
<Page>
PIMCO HIGH INCOME FUND STATEMENT OF CASH FLOWS
For the period April 30, 2003* through September 30, 2003 (unaudited)
<Table>
CASH FLOWS USED FOR OPERATING ACTIVITIES
- ------------------------------------------------------------------------------------------ ----------------
Purchases of long-term investments $ (2,859,756,774)
- ------------------------------------------------------------------------------------------ ----------------
Proceeds from sales of long-term investments 417,173,412
- ------------------------------------------------------------------------------------------ ----------------
Interest and dividend income received 13,532,105
- ------------------------------------------------------------------------------------------ ----------------
Prepaid expenses (47,250)
- ------------------------------------------------------------------------------------------ ----------------
Operating expenses paid (5,699,728)
- ------------------------------------------------------------------------------------------ ----------------
Net increase in short-term investments (46,456,550)
========================================================================================== ================
NET CASH USED FOR OPERATING ACTIVITIES (2,481,254,785)
- ------------------------------------------------------------------------------------------ ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------------------------------------------------------------
Proceeds from common shares sold 1,631,617,500
- ------------------------------------------------------------------------------------------ ----------------
Issuance of preferred shares 900,000,000
- ------------------------------------------------------------------------------------------ ----------------
Common and preferred shares offering costs and underwriting discount paid (11,226,223)
- ------------------------------------------------------------------------------------------ ----------------
Cash dividends paid (excluding reinvestment of $5,042,585) (39,235,903)
- ------------------------------------------------------------------------------------------ ----------------
NET CASH FROM FINANCING ACTIVITIES 2,481,155,374
- ------------------------------------------------------------------------------------------ ----------------
NET DECREASE IN CASH (99,411)
- ------------------------------------------------------------------------------------------ ----------------
CASH AT BEGINNING OF PERIOD 100,003
========================================================================================== ================
CASH AT END OF PERIOD $ 592
========================================================================================== ================
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS TO
NET CASH USED FOR OPERATING ACTIVITIES
- ------------------------------------------------------------------------------------------
Net increase in net assets from operations $ 117,747,980
- ------------------------------------------------------------------------------------------ ----------------
Increase in receivable for investments sold (43,588,290)
- ------------------------------------------------------------------------------------------ ----------------
Increase in interest and swap income receivable (49,369,039)
- ------------------------------------------------------------------------------------------ ----------------
Increase in prepaid expenses (47,250)
- ------------------------------------------------------------------------------------------ ----------------
Increase in payable to Investment Manager 1,473,732
- ------------------------------------------------------------------------------------------ ----------------
Increased in unrealized depreciation on forward foreign currency contracts 113,296
- ------------------------------------------------------------------------------------------ ----------------
Increased in unrealized appreciation on swaps (457,406)
- ------------------------------------------------------------------------------------------ ----------------
Increase in accrued expenses 230,704
- ------------------------------------------------------------------------------------------ ----------------
Increase in payable for investments purchased 24,319,096
- ------------------------------------------------------------------------------------------ ----------------
Net increase in investments (2,531,677,608)
- ------------------------------------------------------------------------------------------ ----------------
NET CASH USED FOR OPERATING ACTIVITIES $ (2,481,254,785)
========================================================================================== ================
</Table>
* Commencement of operations
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15
<Page>
PIMCO HIGH INCOME FUND NOTES TO FINANCIAL STATEMENTS
September 30, 2003 (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PIMCO High Income Fund (the "Fund"), was organized as a Massachusetts business
trust on February 18, 2003. Prior to commencing operations on April 30, 2003,
the Fund had no operations other than matters relating to its organization and
registration as a diversified, closed-end management investment company
registered under the Investment Company Act of 1940 and the rules and
regulations thereunder, as amended, and the sale and issuance of 6,981 shares of
beneficial interest at an aggregate purchase price of $100,003 to Allianz
Dresdner Asset Management of America L.P. ("ADAM"). PIMCO Advisors Fund
Management LLC (the "Investment Manager"), serves as the Fund's Investment
Manager and is an indirect wholly-owned subsidiary of ADAM. ADAM is an indirect,
majority-owned subsidiary of Allianz AG. The Fund has an unlimited amount of
$0.00001 par value common stock authorized.
The Fund's investment objective is to seek high current income. Capital
appreciation is a secondary objective. The Fund attempts to achieve these
objectives by investing in a diversified portfolio of U.S. dollar-denominated
debt obligations and other income-producing securities that are primarily rated
below investment grade.
The Fund issued 105,000,000 shares of common stock in its initial public
offering. An additional 8,900,000 shares were issued in connection with the
exercise of the underwriters' over-allotment option. These shares were all
issued at $15.00 per share before an underwriting discount of $0.675 per share.
Common offering costs of $1,650,000 (representing $0.014 per share) were offset
against the proceeds of the offering and have been charged to paid-in capital in
excess of par. The Investment Manager agreed to pay all common offering costs
(other than the sales load) and organizational expenses exceeding $0.03 per
share. Since aggregate offering costs and organizational expenses were less than
$0.03 per share, common share, organizational expenses of $15,000 were expensed
in the current period. In addition, the underwriters commission and offering
costs associated with the issuance of Preferred Shares in the amounts of
$9,000,000 and $625,000, respectively, have been charged to paid-in capital in
excess of par.
The preparation of the financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
these estimates.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations which provide general indemnifications. The Fund's
maximum exposure under these arrangements is unknown as would involve future
claims that may be made against the Fund that have not yet been asserted.
However, the Fund expects the risk of any loss to be remote.
The following is a summary of significant accounting policies followed by the
Fund:
(a) VALUATION OF INVESTMENTS
The Fund determines its net asset value at the close of regular trading
(normally 4:00 p.m. Eastern time) on the New York Stock Exchange ("NYSE") on
each day the NYSE is open. Debt securities are valued by an independent pricing
service approved by the Board of Trustees. Certain fixed income securities,
including those to be purchased under firm commitment agreements, are normally
valued on the basis of quotes obtained from brokers and dealers or independent
pricing services. Any security or financial instrument for which market
quotations are not readily available is valued at fair value as determined in
good faith under procedures established by the Board of Trustees. Short-term
investments having a remaining maturity of sixty days or less are valued at
amortized cost, which approximates market value.
(b) INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on the trade date. Realized gains and
losses on investments are determined on the identified cost basis. Interest
income is recorded on an accrual basis. Discounts or premiums on debt securities
purchased are accreted or amortized to interest income over the lives of the
respective securities using the effective interest method.
(c) FEDERAL INCOME TAXES
The Fund intends to distribute all of its taxable income and to comply with the
other requirements of the U.S. Internal Revenue Code of 1986, as amended,
applicable to regulated investment companies. Accordingly, no provision for U.S.
federal income taxes is required. In addition, by distributing substantially all
of its ordinary income and long-term capital gains, if any, during each calendar
year the Fund intends not to be subject to U.S. federal excise tax.
16
<Page>
(d) DIVIDENDS AND DISTRIBUTIONS -- COMMON STOCK
The Fund declares dividends from net investment income monthly to common
shareholders. Distributions of net realized capital gains, if any, are paid at
least annually. The Fund records dividends and distributions to its shareholders
on the ex-dividend date. The amount of dividends and distributions from net
investment income and net realized capital gains are determined in accordance
with federal income tax regulations, which may differ from generally accepted
accounting principles. These "book-tax" differences are considered either
temporary or permanent in nature. To the extent these differences are permanent
in nature, such amounts are reclassified within the capital accounts based on
their income tax treatment; temporary differences do not require
reclassification. To the extent dividends and/or distributions exceed current
and accumulated earnings and profits for federal income tax purposes, they are
reported as dividends and/or distributions of paid-in capital in excess of par.
(e) CREDIT DEFAULT SWAPS
The Fund enters into credit default swap contracts ("swaps") for hedging
purposes or to add leverage.
As a seller in the credit default swap contract, the Fund would be required to
pay the par or other agreed-upon value of a referenced debt obligation to the
counterparty in the event of a default by a third party, such as a U.S. or
foreign corporate issuer, on the referenced debt obligation. In return, the Fund
would receive from the counterparty a periodic stream of payments over the term
of the contract provided that no event of default has occurred. If no default
occurs, the Fund would keep the stream of payments and would have no payment
obligations. Such periodic payments are accrued daily and recorded as interest
income.
The Fund may also purchase credit default swap contracts in order to hedge
against the risk of default of debt securities held in the portfolio, in which
case the Fund would function as the counterparty referenced in the preceding
paragraph. As a purchaser of credit default swap contract, the Fund would
receive the par or other agreed upon value of a referenced debt obligation from
the counterparty in the event of default by a third party, such as a U.S. or
foreign corporate issuer on the referenced debt obligation. In return, the Fund
would make periodic payments to the counterparty over the term of the contract
provided no event of default has occurred. Such periodic payments are accrued
daily and charged to interest income by the Fund.
Swaps are marked to market daily by the Fund's Investment Manager based upon
quotations from market makers and the change in value, if any, is recorded as
unrealized appreciation or depreciation in the Statement of Operations by the
Fund. For a credit default swap sold by the Fund, payment of the agreed upon
amount made by the Fund in the event of default of the referenced debt
obligation is recorded as the cost of the referenced debt obligation
purchased/received. For a credit default swap purchased by the Fund, the agreed
upon amount received by the Fund in the event of default of the referenced debt
obligation is recorded as proceeds from sale/delivery of the referenced debt
obligation and the resulting gain or loss realized on the referenced debt
obligation is recorded as such by the Fund.
Entering into swaps involves, to varying degrees, elements of credit, market and
documentation risk in excess of the amounts recognized on the Statement of
Assets and Liabilities. Such risks involve the possibility that there will be no
liquid market for these agreements, that the counterparty to the agreements may
default on its obligation to perform or disagree as to the meaning of the
contractual terms in the agreements.
17
<Page>
Credit default swap contracts outstanding at September 30, 2003 were:
<Table>
<Caption>
NOTIONAL
SWAP AMOUNT FIXED
COUNTERPARTY/ PAYABLE ON PAYMENTS
REFERENCED DEBT DEFAULT TERMINATION RECEIVED BY UNREALIZED
OBLIGATION (000) DATE THE FUND APPRECIATION
- ----------------------------------------------------------------------------------------------------------
Bear Stearns Co., Inc
Allied Waste North America
7.875%, 1/1/09 $ 1,250 9/20/04 5.50% --
Bombardier Capital, Inc.
6.125%, 6/29/06 5,000 9/20/04 2.70% $ 39,000
Nextel Communication, Inc.
9.375%, 11/15/02 1,250 9/20/04 5.50% --
Starwood Hotels & Resorts Worldwide, Inc.
7.875%, 5/1/12 1,250 9/20/04 5.50% --
Tyco International Group SA
2.75%, 1/15/18 1,250 9/20/04 5.50% --
Goldman Sachs & Co.
Bombardier, Inc.
6.75%, 5/1/12 10,000 9/20/04 2.80% 89,000
JPMorgan Chase & Co.
High Yield Debt Index
3.15%, 11/15/07 13,235 6/20/08 3.20% 329,406
Morgan Stanley Capital Services, Inc
Tyco International Group SA
2.75%, 1/15/18 6,500 9/20/04 1.40% --
------------
$ 457,406
============
</Table>
(f) REPURCHASE AGREEMENTS
The Fund may enter into transactions with its custodian bank or securities
brokerage firms approved by the Board of Trustees whereby it purchases
securities under agreements to resell at an agreed upon price and date
("repurchase agreements"). Such agreements are carried at the contract amount in
the financial statements. Collateral pledged (the securities received), which
consists primarily of U.S. government obligations and asset backed securities,
are held by the custodian bank until maturity of the repurchase agreement.
Provisions of the repurchase agreements and the procedures adopted by the Fund
require that the market value of the collateral, including accrued interest
thereon, is sufficient in the event of default by the counterparty. If the
counterparty defaults and the value of the collateral declines or if the
counterparty enters an insolvency proceeding, realization of the collateral by
the Fund may be delayed or limited.
18
<Page>
(g) REVERSE REPURCHASE AGREEMENTS
The Fund engages in reverse repurchase agreements in order to add leverage to
the Fund's portfolio. In a reverse repurchase agreement, the Fund sells
securities to a bank or broker-dealer and agrees to repurchase the securities at
a mutually agreed date and price. Generally, the effect of such a transaction is
that the Fund can recover and reinvest all or most of the cash invested in the
portfolio securities involved during the term of the reverse repurchase
agreement and still be entitled to the returns associated with those portfolio
securities. Such transactions are advantageous if the interest cost to the Fund
of the reverse repurchase transaction is less than the returns it obtains on
investments purchased with the cash. Unless the Fund covers its positions in
reverse repurchase agreements (by segregating liquid assets at least equal in
amount to the forward purchase commitment), its obligations under the agreements
will be subject to the Fund's limitations on borrowings. Reverse repurchase
agreements involve leverage risk and also the risk that the market value of the
securities that the Fund is obligated to repurchase under the agreement may
decline below the repurchase price. In the event the buyer of securities under a
reverse repurchase agreement files for bankruptcy or becomes insolvent, the
Fund's use of the proceeds of the agreement may be restricted pending a
determination by the other party, or its trustee or receiver, whether to enforce
the Fund's obligation to repurchase the securities. The weighted average daily
balance of reverse repurchase agreements outstanding during the period ended
September 30, 2003 was $9,540,000 at a weighted average interest rate of 0.25%.
(h) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract is an agreement between two parties to buy
and sell a currency at a set exchange rate on a future date. The Fund may enter
into forward foreign currency contracts for the purpose of hedging against
foreign currency risk arising from the investment or anticipated investment in
securities denominated in foreign currencies. The Fund may also enter these
contracts for purposes of increasing exposure to a foreign currency or to shift
exposure to foreign currency fluctuations from one country to another. The
market value of a forward foreign currency contract fluctuates with changes in
forward currency exchange rates. All commitments are marked to market daily at
the applicable exchange rates and any resulting unrealized gains and losses are
recorded. Realized gains or losses are recorded at the time the forward contract
matures or by delivery of the currency. Risks may arise upon entering these
contracts from the potential inability of counterparties to meet the terms of
their contracts and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
Forward foreign currency contracts outstanding at September 30, 2003 were:
<Table>
<Caption>
U.S.$ VALUE ON U.S.$ VALUE UNREALIZED
SOLD: ORIGINATION DATE SEPTEMBER 30, 2003 DEPRECIATION
- ---------------------------------------------------------------------------------------------
Euros, settling 11/05/03 $ 8,233,779 $ 8,347,075 $ 113,296
=========
</Table>
(i) OPTION TRANSACTIONS
The Fund may purchase and write (sell) put and call options for hedging
purposes, risk management purposes or as part of its investment strategy. The
risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk of
loss of premium and change in market value should the counterparty not perform
under the contract. Put and call options purchased are accounted for in the same
manner as portfolio securities. The cost of securities acquired through the
exercise of call options is increased by the premiums paid. The proceeds from
the securities sold through the exercise of put options is decreased by the
premiums paid.
When an option is written, the premium received is recorded as an asset with an
equal liability which is subsequently adjusted to the current market value of
the option written. Premiums received from writing options which expire
unexercised are recorded on the expiration date as a realized gain. The
difference between the premium received and the amount paid on effecting a
closing purchase transaction, including brokerage commissions, is also treated
as a realized gain, or if the premium is less than the amount paid for the
closing purchase transactions, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security in determining whether there has been a realized gain or loss. If a put
option is exercised, the premium reduces the cost basis of the security. In
writing an option, the Fund bears the market risk of an unfavorable change in
the price of the security underlying the written option. Exercise of an written
option could result in the Fund purchasing a security at a price different from
the current market.
19
<Page>
Transactions in options written for the period ended September 30, 2003 were:
<Table>
<Caption>
CONTRACTS PREMIUMS
- ------------------------------------------------------------------------------
Options outstanding, beginning of period - -
Options written 1,495 $ 1,224,918
Option expired (979) (658,872)
Options terminated in closing purchase transactions (516) (566,046)
----- -----------
Options outstanding, September 30, 2003 - -
----- -----------
</Table>
(j) CREDIT-LINKED TRUST CERTIFICATES
Credit-linked trust certificates are investments in a limited purpose trust or
other vehicle formed under state law which, in turn, invests in a basket of
derivative instruments, such as credit default swaps, interest rate swaps and
other securities, in order to provide exposure to the high yield or another
fixed income market.
Like an investment in a bond, investments in these credit-linked trust
certificates represent the right to receive periodic income payments (in the
form of distributions) and payment of principal at the end of the term of the
certificate. However, these payments are conditioned on the trust's receipt of
payments from, and the trust's potential obligations to, the counterparties to
the derivative instruments and other securities in which the trust invests.
(k) LOAN PARTICIPATIONS
When the Fund purchases a loan participation, the Fund typically enters into a
contractual relationship with the lender or third party selling such
participations ("Selling Participant"), but not the borrower. When investing in
a loan participation, the Fund has the right to receive payments of principal,
interest and any fees to which it is entitled only from the lender selling the
loan agreement and only upon receipt by the lender of payments from the
borrower. The Fund generally has no right to enforce compliance with the terms
of the loan agreement with the borrower. As a result, the Fund assumes the
credit risk of the borrower, the Selling Participant and any other persons
interpositioned between the Fund and the borrower. The Fund may not directly
benefit from the collateral supporting the senior loan in which it has purchased
the loan participation.
(l) CUSTODY CREDITS ON CASH BALANCES
The Fund benefits from an expense offset arrangement with its custodian bank
whereby uninvested cash balances earn credits which reduce monthly custodian and
accounting agent fees. Had these cash balances been invested in income producing
securities, they would have generated income for the Fund.
2. INVESTMENT MANAGER AND SUB-ADVISER
The Fund has entered into an Investment Management Agreement (the "Agreement")
with the Investment Manager to serve as Investment Manager of the Fund. Subject
to the supervision of the Fund's Board of Trustees, the Investment Manager is
responsible for managing, either directly or through others selected by it, the
investment activities of the Fund and the Fund's business affairs and other
administrative matters. Pursuant to the Agreement, the Investment Manager
receives an annual fee, payable monthly, at an annual rate of 0.70% of the
Fund's average daily net assets, inclusive of net assets attributable to any
preferred shares that may be outstanding.
The Investment Manager has retained its affiliate, Pacific Investment Management
Company LLC (the "Sub-Adviser") to manage the Fund's investments. Subject to the
supervision of the Investment Manager, the Sub-Adviser makes all investment
decisions for the Fund. The Investment Manager (not the Fund) pays a portion of
the fees it receives as Investment Manager to the Sub-Adviser in return for its
services, at the maximum annual rate of 0.3575% of the Fund's average daily net
assets, inclusive of net assets attributable to any preferred shares that may be
outstanding, for the period from commencement of operations through April 30,
2008 and at the maximum annual rate of 0.50% of average daily net assets,
inclusive of net assets attributable to any preferred shares that may be
outstanding, thereafter. The Investment Manager informed the Fund that it paid
the Sub-Adviser $3,283,238 in connection with its sub-advisory services for the
period ended September 30, 2003.
3. INVESTMENTS IN SECURITIES
For the period ended September 30, 2003, purchases and sales of investments,
other than short-term securities, were $2,884,075,870 and $430,782,148,
respectively.
20
<Page>
4. AUCTION PREFERRED SHARES
The Fund has issued 7,200 shares of Preferred Shares Series M, 7,200 shares of
Preferred Shares Series T, 7,200 shares of Preferred Shares Series W, 7,200
shares of Preferred Shares Series TH, and 7,200 shares of Preferred Shares
Series F each with a net asset and liquidation value of $25,000 per share plus
accrued dividends.
Dividends are accumulated daily at an annual rate set through auction
procedures. Distributions of net realized capital gains, if any, are paid
annually.
For the period ended September 30, 2003, the annualized dividend rate ranged
from:
<Table>
<Caption>
HIGH LOW AT SEPTEMBER 30, 2003
- ----------------------------------------------------------------------------------
Series M 1.32% 1.05% 1.32%
Series T 1.20% 1.05% 1.15%
Series W 1.20% 1.05% 1.15%
Series TH 1.28% 1.05% 1.28%
Series F 1.30% 1.07% 1.30%
</Table>
The Fund is subject to certain limitations and restrictions while Preferred
Shares are outstanding. Failure to comply with these limitations and
restrictions could preclude the Fund from declaring any dividends or
distributions to common shareholders or repurchasing common shares and/or could
trigger the mandatory redemption of Preferred Shares at their liquidation value.
Preferred Shares, which are entitled to one vote per share, generally vote with
the common stock but vote separately as a class to elect two Trustees and on any
matters affecting the rights of the Preferred Shares.
5. SUBSEQUENT COMMON DIVIDEND DECLARATIONS
On October 1, 2003, a dividend of $0.121875 per share was declared to common
shareholders payable November 3, 2003 to shareholders of record on October 10,
2003.
On November 3, 2003, a dividend of $0.121875 per share was declared to common
shareholders payable December 1, 2003 to shareholders of record on November 14,
2003.
21
<Page>
PIMCO HIGH INCOME FUND FINANCIAL HIGHLIGHTS
For a share of common stock outstanding for the period April 30, 2003* through
September 30, 2003: (unaudited)
<Table>
Net asset value, beginning of period $ 14.33**
- -------------------------------------------------------------------------------------- -----------
INVESTMENT OPERATIONS:
Net investment income 0.50
- -------------------------------------------------------------------------------------- -----------
Net realized and unrealized gain on investments, futures, options written, swaps
and foreign currency transactions 0.53
- -------------------------------------------------------------------------------------- -----------
Total from investment operations 1.03
- -------------------------------------------------------------------------------------- -----------
DIVIDENDS ON PREFERRED SHARES FROM NET INVESTMENT INCOME (0.02)
- -------------------------------------------------------------------------------------- -----------
Net increase in net assets applicable to common shares resulting from
investment operations 1.01
- -------------------------------------------------------------------------------------- -----------
DIVIDENDS TO COMMON SHAREHOLDERS FROM NET INVESTMENT INCOME: (0.49)
- -------------------------------------------------------------------------------------- -----------
CAPITAL SHARE TRANSACTIONS:
Common stock offering costs charged to paid-in capital in excess of par (0.01)
- -------------------------------------------------------------------------------------- -----------
Preferred shares offering costs/underwriting discount charged to paid-in capital
in excess of par (0.09)
- -------------------------------------------------------------------------------------- -----------
Total capital share transactions (0.10)
- -------------------------------------------------------------------------------------- -----------
Net asset value, end of period $ 14.75
- -------------------------------------------------------------------------------------- -----------
Market price, end of period $ 13.98
- -------------------------------------------------------------------------------------- -----------
TOTAL INVESTMENT RETURN (1) (3.55)%
- -------------------------------------------------------------------------------------- -----------
RATIOS/SUPPLEMENTAL DATA:
Net assets applicable to common shareholders, end of period (000) $ 1,684,904
- -------------------------------------------------------------------------------------- -----------
Ratio of expenses to average net assets (2)(3)(4) 1.09%
- -------------------------------------------------------------------------------------- -----------
Ratio of net investment income to average net assets (2)(4) 8.41%
- -------------------------------------------------------------------------------------- -----------
Preferred shares asset coverage per share $ 71,796
- -------------------------------------------------------------------------------------- -----------
Portfolio turnover 25%
- -------------------------------------------------------------------------------------- -----------
</Table>
* Commencement of operations.
** Initial public offering price of $15.00 per share less underwriting
discount of $0.675 per share.
(1) Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of the period reported. Dividends are assumed,
for purposes of this calculation, to be reinvested at prices obtained under
the Fund's dividend reinvestment plan. Total investment return does not
reflect brokerage commissions or sales charges. Total investment return for
a period of less than one year is not annualized.
(2) Calculated on the basis of income and expenses applicable to both common
and preferred shares relative to the average net assets of common
shareholders.
(3) Inclusive of expenses offset by custody credits on cash balances at the
custodian bank. (See note (1)(l) in Notes to Financial Statements).
(4) Annualized
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
22
<Page>
PIMCO HIGH INCOME FUND PRIVACY POLICY
OUR COMMITMENT TO YOU
We consider customer privacy to be a fundamental aspect of our relationship with
clients. We are committed to maintaining the confidentiality, integrity, and
security of our current, prospective and former clients' personal information.
We have developed policies designed to protect this confidentiality, while
allowing client needs to be served.
OBTAINING PERSONAL INFORMATION
In the course of providing you with products and services, we may obtain
non-public personal information about you. This information may come from
sources such as account applications and other forms, from other written,
electronic or verbal correspondence, from your transactions, from your brokerage
or financial advisory firm, financial adviser or consultant, and/or from
information captured on our internet web sites.
RESPECTING YOUR PRIVACY
We do not disclose any personal or account information provided by you or
gathered by us to non-affiliated third parties, except as required or permitted
by law. As is common in the industry, non-affiliated companies may from time to
time be used to provide certain services, such as preparing and mailing
prospectuses, reports, account statements and other information, conducting
research on client satisfaction, and gathering shareholder proxies. We may also
retain non-affiliated companies to market our products and enter in joint
marketing agreements with other companies. These companies may have access to
your personal and account information, but are permitted to use the information
solely to provide the specific service or as otherwise permitted by law. We may
also provide your personal and account information to your brokerage or
financial advisory firm and/or to your financial adviser or consultant.
SHARING INFORMATION WITH THIRD PARTIES
We do reserve the right to disclose or report personal information to
non-affiliated third parties in limited circumstances where we believe in good
faith that disclosure is required under law, to cooperate with regulators or law
enforcement authorities, to protect our rights or property, or upon reasonable
request by any mutual fund in which you have chosen to invest. In addition, we
may disclose information about you or your accounts to a non-affiliated third
party at your request or if you consent in writing to the disclosure.
SHARING INFORMATION WITH AFFILIATES
We may share client information with our affiliates in connection with servicing
your account or to provide you with information about products and services that
we believe may be of interest to you. The information we share may include, for
example, your participation in our mutual funds or other investment programs,
your ownership of certain types of accounts (such as IRAs), or other data about
your accounts. Our affiliates, in turn, are not permitted to share your
information with non-affiliated entities, except as required or permitted by
law.
IMPLEMENTATION OF PROCEDURES
We take seriously the obligation to safeguard your non-public personal
information. We have implemented procedures designed to restrict access to your
non-public personal information to our personnel who need to know that
information to provide products or services to you. To guard your non-public
personal information, physical, electronic, and procedural safeguards are in
place.
23
<Page>
TRUSTEES AND PRINCIPAL OFFICERS
Stephen Treadway
Chairman
Robert E. Connor
Trustee
John J. Dalessandro II
Trustee
Hans W. Kertess
Trustee
Brian S. Shlissel
President & Chief Executive Officer
Newton B. Schott, Jr.
Executive Vice President & Secretary
David C. Hinman
Vice President
Raymond G. Kennedy
Vice President
Charles Wyman
Vice President
Lawrence G. Altadonna
Treasurer, Principal Financial & Accounting Officer
INVESTMENT MANAGER
PIMCO Advisors Fund Management LLC
1345 Avenue of the Americas
New York, NY 10105
SUB-ADVISER
Pacific Investment Management Company LLC
840 Newport Center Drive
Newport Beach, CA 92660
TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR
PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA. 02210-2624
This report, including the financial information herein, is transmitted to the
shareholders of PIMCO High Income Fund for their information. It is not a
prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in this report.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that from time to time the Fund may purchase
shares of its common stock in the open market.
The financial information included herein is taken from the records of the Fund
without examination by independent auditors, who did not express an opinion
hereon.
Daily information on the Fund is available at www.pimcoadvisors.com or by
calling 1-800-331-1710
<Page>
[PIMCO ADVISORS LOGO]
<Page>
ITEM 2. Not required in this filing
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT Not required in this filing
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES Disclosure request not
currently effective
ITEM 5. [RESERVED]
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES Not required in this filing
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES
(a) The registrant's President and Chief Executive Officer and Principal
Financial Officer have concluded that the registrant's disclosure controls
and procedures (as defined in Rule 30a-2(c) under the Investment Company
Act of 1940, as amended are effective based on their evaluation of these
controls and procedures as of a date within 90 days of the filing date of
this document.
(b) There were no significant changes in the registrant's internal controls or
in factors that could affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 10. EXHIBITS
(a) Exhibit 99 Cert - Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
(b) Exhibit 99.906 Cert - Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
<Page>
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.
PIMCO High Income Fund
By /s/ Brian S. Shlissel
- ------------------------
Brian S. Shlissel, President & Chief Executive
Officer
Date: December 3, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ Brian S. Shlissel
- ------------------------
Brian S. Shlissel, President & Chief Executive Officer
Date: December 3, 2003
By /s/ Lawrence G. Altadonna
- ----------------------------
Lawrence G. Altadonna, Treasurer
Date: December 3, 2003