N-CSR 1 a2120971zn-csr.txt N-CSR 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 No. 811-08917 ----------------------------------------------------- CREDIT SUISSE INSTITUTIONAL FIXED INCOME FUND, INC. ---------------------------------------------- (Exact Name of Registrant as Specified in Charter) 466 Lexington Avenue, New York, New York 10017-3140 --------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Hal Liebes, Esq. Credit Suisse Institutional Fixed Income Fund, Inc. 466 Lexington Avenue New York, New York 10017-3140 Registrant's telephone number, including area code:(212) 875-3500 Date of fiscal year end: August 31, 2003 Date of reporting period: September 1, 2002 to August 31, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. CREDIT SUISSE INSTITUTIONAL FUNDS [CREDIT SUISSE ASSET MANAGEMENT LOGO] FIXED INCOME FUND HIGH YIELD FUND AUGUST 31, 2003 ANNUAL REPORT MORE COMPLETE INFORMATION ABOUT THE FUNDS, INCLUDING CHARGES AND EXPENSES, IS PROVIDED IN THE PROSPECTUS, WHICH MUST PRECEDE OR ACCOMPANY THIS DOCUMENT AND WHICH SHOULD BE READ CAREFULLY BEFORE INVESTING. INSTITUTIONAL SHAREHOLDERS MAY OBTAIN ADDITIONAL COPIES BY CALLING 800-222-8977 OR BY WRITING TO CREDIT SUISSE INSTITUTIONAL FUNDS, P.O. BOX 8500, BOSTON, MA 02266-8500. CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR, IS LOCATED AT 466 LEXINGTON AVE., NEW YORK, NY 10017-3140. CREDIT SUISSE INSTITUTIONAL FUNDS ARE ADVISED BY CREDIT SUISSE ASSET MANAGEMENT, LLC. THE FUNDS' INVESTMENT ADVISER AND CO-ADMINISTRATORS MAY WAIVE SOME FEES AND/OR REIMBURSE SOME EXPENSES, WITHOUT WHICH PERFORMANCE WOULD BE LOWER. WAIVERS AND/OR REIMBURSEMENTS ARE SUBJECT TO CHANGE. RETURNS INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE FUTURE RESULTS. RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION VALUE MAY BE MORE OR LESS THAN ORIGINAL COST. THE VIEWS OF THE FUNDS' MANAGEMENT ARE AS OF THE DATE OF THE LETTERS AND FUND HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF AUGUST 31, 2003; THESE VIEWS AND FUND HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES. FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET MANAGEMENT, LLC ("CSAM") OR ANY AFFILIATE, ARE NOT FDIC-INSURED AND ARE NOT GUARANTEED BY CSAM OR ANY AFFILIATE. CREDIT SUISSE INSTITUTIONAL FIXED INCOME FUND ANNUAL INVESTMENT ADVISER'S REPORT September 19, 2003 Dear Shareholder: We are writing to report on the results of the Credit Suisse Institutional Fixed Income Fund(1) (the "Fund") for the fiscal year ended August 31, 2003. At August 31, 2003, the net asset value ("NAV") per share of the Fund's shares was $14.27, compared to an NAV per share of $14.12 on August 31, 2002. Assuming the reinvestment of distributions totaling $0.87251 per share, the Fund's total return was 7.40%. By comparison, the Lehman Brothers U.S. Aggregate Bond Index(2) returned 4.36% during the same period. The investment environment for fixed income was favorable throughout most of the fiscal year, in two key ways. First, monetary policy was accommodative, so much so that perhaps the key influence on trading activity was the widespread perception that interest rates (which were already historically low) were likely to continue to decline. The Federal Reserve cut its benchmark fed funds rate twice in the period, by a total of 75 bps, to 1.00%, the lowest such level since 1958. The Fed additionally helped to fuel the perception that rates would fall further via highly publicized comments regarding its concerns about deflation. Second, falling rates helped to incentivize investors to look for comparatively higher yields. This, in turn, meant that riskier debt sectors performed best, whether in absolute or relative terms. Returns were thus highest among lower-quality corporate bonds -- both high yield and in the lower tiers of investment-grade credits -- and longer-maturity instruments more broadly. [Note: heartier risk appetite tended to work in favor of our general approach of emphasizing spread product (I.E., debt securities whose valuations are based on the difference, or "spread," between their yields and those of comparable-maturity Treasury debt) at the expense of Treasury securities.] The Fund meaningfully outperformed its Lehman benchmark as a result of the collective impact of several aspects of our strategy. The most successful of these included: - We maintained exposure to non-benchmark sectors that greatly outperformed investment-grade securities. Specifically, these were high yield corporates and, to a lesser extent, emerging market debt. Our risk management discipline prompted us to gradually reduce exposure to each of these sectors in the second half of the fiscal year, as we felt that their price gains would limit their potential for additional outperformance. - We enjoyed good security selection in securitized debt. This was especially true in mortgage-backed securities, in which we focused on the identification of areas of the mortgage market with pricing anomalies that we considered sizeable (E.G., newly issued mortgage pools and pools with low loan balances). - We enjoyed good relative performance in investment-grade corporates, in which the avoidance of poor-performing issues proved just as important as the ownership of strong performers. Our preferences were for comparatively lower-quality credits within sectors such as telecommunications and consumer durables, and we maintained wide diversification in terms of the number of individual issuers whose bonds we owned. - We briefly held a small allocation to inflation-linked Treasury bonds (known as TIPS, or Treasury Inflation-Protected Securities), which we felt offered attractive valuations as well as the potential for capital appreciation if perceived or actual inflation should rise. Our analysis at the time proved on target, as nominal inflation moved higher and TIPS prices gained accordingly. - In the second half of the fiscal year we held a small currency allocation to euros, which appreciated substantially versus the U.S. dollar. We also owned some German government bonds that outperformed their U.S. counterparts. The most negative contributions to the Fund's overall return were fairly modest and came from two underweightings. These were in government agency issues and, within our corporate allocation, banks and other financial companies, which significantly outperformed the benchmark as a whole. Sincerely yours, Credit Suisse Fixed Income Management Team Jo Ann Corkran, Managing Director and Co-Portfolio Manager Leland E. Crabbe, Director and Co-Portfolio Manager Suzanne E. Moran, Director and Co-Portfolio Manager David N. Fisher, Vice President and Co-Portfolio Manager IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND FOREIGN MARKET, INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT REGULATION AND THEIR POTENTIAL IMPACT ON THE FUND'S INVESTMENT PORTFOLIO. THESE STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS, DEVELOPMENTS AND REGULATIONS IN THE FUTURE, AND THEIR IMPACT ON THE FUND COULD BE MATERIALLY DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE FUND HAS NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS. 3 COMPARISON OF CHANGE IN VALUE OF $3 MILLION INVESTMENT IN THE CREDIT SUISSE INSTITUTIONAL FIXED INCOME FUND(1) AND THE LEHMAN BROTHERS U.S. AGGREGATE BOND INDEX(2) FROM INCEPTION (3/31/94). (UNAUDITED) [CHART]
CREDIT SUISSE INSTITUTIONAL FIXED INCOME FUND(1) $5,397,000 LEHMAN BROTHERS U.S. AGGREGATE BOND INDEX(2) $5,872,389 Mar-94 $ 3,000,000 $ 3,000,000 Apr-94 $ 2,966,000 $ 2,976,000 May-94 $ 2,974,000 $ 2,975,702 Jun-94 $ 2,946,000 $ 2,969,156 Jul-94 $ 2,992,794 $ 3,028,242 Aug-94 $ 3,005,001 $ 3,031,876 Sep-94 $ 2,961,948 $ 2,987,307 Oct-94 $ 2,949,590 $ 2,984,619 Nov-94 $ 2,943,410 $ 2,978,053 Dec-94 $ 2,951,958 $ 2,998,601 Jan-95 $ 2,998,181 $ 3,057,973 Feb-95 $ 3,061,212 $ 3,130,753 Mar-95 $ 3,088,700 $ 3,149,851 Apr-95 $ 3,131,303 $ 3,193,949 May-95 $ 3,259,111 $ 3,317,555 Jun-95 $ 3,282,568 $ 3,341,773 Jul-95 $ 3,280,413 $ 3,335,089 Aug-95 $ 3,323,519 $ 3,375,444 Sep-95 $ 3,354,806 $ 3,408,186 Oct-95 $ 3,396,413 $ 3,452,492 Nov-95 $ 3,442,399 $ 3,504,279 Dec-95 $ 3,490,679 $ 3,553,339 Jan-96 $ 3,526,851 $ 3,576,791 Feb-96 $ 3,477,114 $ 3,514,555 Mar-96 $ 3,450,670 $ 3,489,953 Apr-96 $ 3,439,236 $ 3,470,410 May-96 $ 3,439,236 $ 3,463,469 Jun-96 $ 3,478,678 $ 3,509,879 Jul-96 $ 3,494,934 $ 3,519,356 Aug-96 $ 3,497,256 $ 3,513,373 Sep-96 $ 3,559,041 $ 3,574,506 Oct-96 $ 3,634,664 $ 3,653,860 Nov-96 $ 3,698,472 $ 3,716,341 Dec-96 $ 3,680,026 $ 3,681,779 Jan-97 $ 3,699,433 $ 3,693,192 Feb-97 $ 3,726,117 $ 3,702,425 Mar-97 $ 3,688,958 $ 3,661,328 Apr-97 $ 3,728,280 $ 3,716,248 May-97 $ 3,770,061 $ 3,751,553 Jun-97 $ 3,820,619 $ 3,796,196 Jul-97 $ 3,920,309 $ 3,898,693 Aug-97 $ 3,900,371 $ 3,865,554 Sep-97 $ 3,955,277 $ 3,922,765 Oct-97 $ 3,978,052 $ 3,979,645 Nov-97 $ 3,998,297 $ 3,997,951 Dec-97 $ 4,035,589 $ 4,038,330 Jan-98 $ 4,090,441 $ 4,090,021 Feb-98 $ 4,100,890 $ 4,086,749 Mar-98 $ 4,127,243 $ 4,100,644 Apr-98 $ 4,143,086 $ 4,121,967 May-98 $ 4,169,492 $ 4,161,126 Jun-98 $ 4,195,336 $ 4,196,496 Jul-98 $ 4,214,054 $ 4,205,308 Aug-98 $ 4,203,358 $ 4,273,855 Sep-98 $ 4,265,481 $ 4,373,863 Oct-98 $ 4,249,222 $ 4,350,681 Nov-98 $ 4,314,261 $ 4,375,480 Dec-98 $ 4,333,528 $ 4,388,607 Jan-99 $ 4,367,013 $ 4,419,766 Feb-99 $ 4,305,624 $ 4,342,420 Mar-99 $ 4,349,517 $ 4,366,303 Apr-99 $ 4,394,648 $ 4,380,275 May-99 $ 4,346,696 $ 4,341,729 Jun-99 $ 4,331,583 $ 4,327,836 Jul-99 $ 4,314,383 $ 4,309,659 Aug-99 $ 4,302,916 $ 4,307,504 Sep-99 $ 4,347,613 $ 4,357,471 Oct-99 $ 4,368,011 $ 4,373,593 Nov-99 $ 4,391,322 $ 4,373,156 Dec-99 $ 4,381,702 $ 4,352,165 Jan-00 $ 4,369,787 $ 4,337,803 Feb-00 $ 4,426,383 $ 4,390,290 Mar-00 $ 4,464,629 $ 4,448,242 Apr-00 $ 4,404,297 $ 4,435,342 May-00 $ 4,392,230 $ 4,433,124 Jun-00 $ 4,496,817 $ 4,525,333 Jul-00 $ 4,527,449 $ 4,566,514 Aug-00 $ 4,579,524 $ 4,632,728 Sep-00 $ 4,607,461 $ 4,661,915 Oct-00 $ 4,610,568 $ 4,692,683 Nov-00 $ 4,647,850 $ 4,769,643 Dec-00 $ 4,761,083 $ 4,858,359 Jan-01 $ 4,922,315 $ 4,937,550 Feb-01 $ 4,941,284 $ 4,980,507 Mar-01 $ 4,955,257 $ 5,005,409 Apr-01 $ 4,955,257 $ 4,984,386 May-01 $ 5,009,887 $ 5,014,492 Jun-01 $ 5,015,350 $ 5,033,547 Jul-01 $ 5,113,690 $ 5,146,299 Aug-01 $ 5,175,972 $ 5,205,481 Sep-01 $ 5,155,878 $ 5,265,865 Oct-01 $ 5,232,237 $ 5,375,921 Nov-01 $ 5,182,438 $ 5,301,733 Dec-01 $ 5,142,779 $ 5,267,802 Jan-02 $ 5,163,572 $ 5,310,472 Feb-02 $ 5,170,503 $ 5,361,983 Mar-02 $ 5,115,679 $ 5,272,974 Apr-02 $ 5,168,310 $ 5,375,270 May-02 $ 5,182,344 $ 5,420,960 Jun-02 $ 5,046,382 $ 5,468,122 Jul-02 $ 4,928,942 $ 5,534,286 Aug-02 $ 5,025,030 $ 5,627,816 Sep-02 $ 5,044,987 $ 5,718,986 Oct-02 $ 5,041,371 $ 5,692,679 Nov-02 $ 5,113,700 $ 5,690,971 Dec-02 $ 5,233,572 $ 5,808,774 Jan-03 $ 5,266,931 $ 5,814,002 Feb-03 $ 5,348,474 $ 5,894,236 Mar-03 $ 5,365,753 $ 5,889,520 Apr-03 $ 5,436,650 $ 5,938,403 May-03 $ 5,533,666 $ 6,048,857 Jun-03 $ 5,529,319 $ 6,036,844 Jul-03 $ 5,347,782 $ 5,833,886 Aug-03 $ 5,397,000 $ 5,872,389
Past performance is not predictive of future performance. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than their original cost. The performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. AVERAGE ANNUAL RETURNS AS OF AUGUST 31, 2003(1)
ONE YEAR THREE YEAR FIVE YEAR SINCE INCEPTION -------- ---------- --------- --------------- 7.40% 5.63% 5.13% 6.43%
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2003(1)
ONE YEAR THREE YEAR FIVE YEAR SINCE INCEPTION -------- ---------- --------- --------------- 9.87% 6.36% 5.38% 6.67%
(1) Fee waivers and/or expense reimbursements reduced expenses for the Fund, without which performance would be lower. Waivers and/or reimbursements may be discontinued at any time. (2) The Lehman Brothers U.S. Aggregate Bond Index is composed of the Lehman Brothers Government/Corporate Bond Index and the Lehman Brothers Mortgage-Backed Securities Index. The Lehman Brothers U.S. Aggregate Bond Index includes U.S. Treasury and agency issues, corporate bond issues and mortgage-backed securities rated investment-grade or higher by Moody's Investors Service, Standard & Poor's Corporation, or Fitch Investors' Service. Investors cannot invest directly in an index. 4 SCHEDULE OF INVESTMENTS AUGUST 31, 2003
PAR RATINGS** (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ------- -------------- CORPORATE BONDS (37.9%) AEROSPACE & DEFENSE (1.0%) $ 585 Lockheed Martin Corp., Bonds (BBB , Baa2) 12/01/29 8.500 $ 745,017 120 Raytheon Co., Global Notes (BBB- , Baa3) 03/01/06 8.200 134,941 185 Raytheon Co., Notes (BBB- , Baa3) 08/15/07 6.750 205,323 121 Sequa Corp., Senior Notes (BB- , B1) 08/01/09 9.000 127,128 175 Sequa Corp., Series B, Senior Notes (BB- , B1) 04/01/08 8.875 182,875 -------------- 1,395,284 -------------- AGRICULTURE (0.4%) 475 Cargill, Inc., Rule 144A, Notes++ (A+ , A1) 05/01/06 6.250 517,210 -------------- APPAREL (0.1%) 240 Levi Strauss & Co., Notes (BB- , B3) 11/01/06 7.000 210,600 -------------- AUTOMOBILE MANUFACTURERS (0.2%) 250 Ford Motor Co., Global Notes (BBB , Baa1) 07/16/31 7.450 222,718 95 General Motors Corp., Global Debenture (BBB , Baa1) 07/15/33 8.375 94,153 -------------- 316,871 -------------- AUTOMOBILE PARTS & EQUIPMENT (0.1%) 30 Collins & Aikman Products Corp., Company Guaranteed Notes (Callable 04/15/04 @ $100.00)~ (B- , B3) 04/15/06 11.500 22,800 150 Metaldyne Corp., Global Company Guaranteed Notes (Callable 06/15/07 @ $105.50) (B , Caa1) 06/15/12 11.000 131,250 -------------- 154,050 -------------- BUILDING MATERIALS (0.4%) 195 American Standard Inc., Company Guaranteed Notes (BB+ , Ba2) 02/01/08 7.375 210,600 100 Dayton Superior Corp., Company Guaranteed Notes (Callable 06/15/07 @ $102.17) (B- , Caa2) 06/15/09 13.000 86,500 260 Nortek, Inc., Series B, Global Senior Subordinated Notes (Callable 06/15/06 @ $104.94) (B- , B3) 06/15/11 9.875 273,000 -------------- 570,100 -------------- CHEMICALS (0.1%) 155 Applied Extrusion Technologies, Inc., Series B, Company Guaranteed Notes (Callable 07/01/06 @ $105.38) (B , Caa1) 07/01/11 10.750 103,850 100 Scotts Co., Company Guaranteed Notes (Callable 01/15/04 @ $104.31) (B+ , Ba3) 01/15/09 8.625 105,250 -------------- 209,100 -------------- COMMERCIAL SERVICES (0.2%) 120 Iron Mountain, Inc., Company Guaranteed Notes (Callable 04/01/06 @ $104.31) (B , B2) 04/01/13 8.625 125,400 215 La Petite Academy, Inc./LPA Holdings, Series B, Company Guaranteed Notes (Callable 05/15/04 @ $103.33) (CC , Ca) 05/15/08 10.000 130,075 -------------- 255,475 --------------
See Accompanying Notes to Financial Statements. 5
PAR RATINGS** (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ------ -------------- COMPUTERS (0.0%) $ 238 DIVA Systems Corp., Series B, Senior Discount Notes (Callable 03/01/04 @ $104.20)@@ (NR , NR) 03/01/08 12.625% $ 17,850 -------------- COSMETICS/PERSONAL CARE (0.3%) 325 Armkel LLC, Global Senior Subordinated Notes (Callable 08/15/05 @ $104.75) (B , B2) 08/15/09 9.500 357,500 -------------- DIVERSIFIED FINANCIALS (10.2%) 1,515 American International Group, Inc., Rule 144A, Notes++ (AAA , Aaa) 05/15/13 4.250 1,409,271 775 Bear Stearns Companies, Inc., Global Notes (A , A2) 07/02/08 2.875 733,474 255 Chukchansi Economic Development Authority, Rule 144A, Senior Notes (Callable 10/01/06 @ $113.00)++ (NR , NR) 06/15/09 14.500 314,287 245 Countrywide Home Loan, Inc., Global Company Guaranteed Notes (A , A3) 06/15/04 6.850 255,258 435 Countrywide Home Loan, Inc., Global Notes (A , A3) 12/19/07 4.250 439,550 390 Countrywide Home Loan, Inc., Global Notes (A , A3) 05/21/08 3.250 372,753 255 Erac USA Finance Co., Rule 144A, Notes++ (BBB+ , Baa1) 05/15/06 6.625 275,653 525 FMR Corp., Rule 144A, Notes++ (AA , Aa3) 03/01/13 4.750 510,058 1,295 Ford Motor Credit Co., Global Bonds (BBB , A3) 02/01/11 7.375 1,320,067 1,020 Ford Motor Credit Co., Global Notes (BBB , A3) 02/01/06 6.875 1,071,886 945 General Electric Capital Corp., Series MTNA, Global Notes (AAA , Aaa) 06/15/12 6.000 999,415 925 General Motors Acceptance Corp., Global Bonds (BBB , A3) 11/01/31 8.000 892,358 485 Goldman Sachs Group, Inc., Global Notes (A+ , Aa3) 01/15/08 4.125 488,293 855 Goldman Sachs Group, Inc., Global Notes (A+ , Aa3) 04/01/13 5.250 844,331 545 Household Finance Corp., Global Notes (A , A1) 01/30/07 5.750 583,794 345 Household Finance Corp., Global Notes (A , A1) 07/15/10 8.000 404,544 530 Merrill Lynch & Company, Inc., Series MTNB, Notes (A+ , Aa3) 07/15/08 3.125 509,776 825 Morgan Stanley, Global Notes (A+ , Aa3) 03/01/13 5.300 815,590 200 PCA LLC/PCA Finance Corp., Global Senior Notes (B- , B3) 08/01/09 11.875 218,000 565 Textron, Inc., Senior Notes (A- , A3) 08/01/10 4.500 550,660 380 Verizon Global Funding Corp., Global Notes (A+ , A2) 06/15/12 6.875 419,468 830 Verizon Global Funding Corp., Global Notes (A+ , A2) 12/01/30 7.750 956,010 -------------- 14,384,496 -------------- ELECTRIC (4.9%) 100 AES Corp., Rule 144A, Secured Notes (Callable 5/15/08 @ $104.50)++ (B+ , B2) 05/15/15 9.000 102,000 510 American Electric Power Company, Inc., Series A, Global Notes (BBB , Baa3) 05/15/06 6.125 547,297 820 Cilcorp, Inc., Bonds (BBB+ , Baa2) 10/15/29 9.375 1,052,315 510 Cincinnati Gas & Electric Co., Notes (BBB , Baa1) 09/15/12 5.700 523,156 115 CMS Energy Corp., Senior Notes~ (B+ , B3) 01/15/09 7.500 110,544 785 Consolidated Edison Company of New York, Debentures (A , A1) 02/01/13 4.875 769,944 200 Constellation Energy Group Inc., Notes (BBB+ , Baa1) 04/01/07 6.350 215,504 240 Constellation Energy Group Inc., Notes (BBB+ , Baa1) 04/01/12 7.000 263,048 415 Dominion Resources, Inc., Series B, Global Senior Notes (BBB+ , Baa1) 07/15/05 7.625 453,009 185 Energy East Corp., Notes (BBB , Baa2) 06/15/12 6.750 199,167
See Accompanying Notes to Financial Statements. 6
PAR RATINGS** (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ------ -------------- ELECTRIC -- (CONTINUED) $ 319 FPL Group Capital, Inc., Company Guaranteed Notes (A- , A2) 09/15/06 7.625 $ 360,620 380 FPL Group Capital, Inc., Notes (A- , A2) 04/11/06 3.250 382,373 210 Ohio Edison Co., Rule 144A, Senior Notes++ (BBB- , Baa2) 05/01/08 4.000 200,364 490 Oncor Electric Delivery Co., Global Secured Notes (BBB , Baa1) 05/01/32 7.000 521,273 380 Progress Energy, Inc., Senior Notes (BBB- , Baa2) 03/01/06 6.750 412,326 320 PSE&G Power LLC, Global Company Guaranteed Notes (BBB , Baa1) 06/01/12 6.950 346,194 345 Public Service Company of Colorado, Global Collateral Trust (BBB+ , Baa1) 10/01/12 7.875 405,769 -------------- 6,864,903 -------------- ELECTRICAL COMPONENTS & EQUIPMENT (0.1%) 100 Motors & Gears, Inc., Series D, Senior Notes (Callable 11/15/03 @ $101.79) (CCC+ , Caa1) 11/15/06 10.750 87,000 -------------- ELECTRONICS (0.1%) 155 Sanmina-SCI Corp., Global Company Guaranteed Notes (Callable 01/15/07 @ $105.19) (BB- , Ba2) 01/15/10 10.375 177,475 -------------- ENTERTAINMENT (0.8%) 100 Argosy Gaming Co., Company Guaranteed Notes (Callable 06/01/04 @ $105.38) (B+ , B2) 06/01/09 10.750 109,750 285 Horseshoe Gaming Holdings Corp., Series B, Company Guaranteed Notes (Callable 05/15/04 @ $104.31) (B+ , B2) 05/15/09 8.625 301,387 155 Intrawest Corp., Global Company Guaranteed Notes (Callable 02/01/05 @ $105.25) (B+ , B1) 02/01/10 10.500 167,400 100 Isle of Capri Casinos, Inc., Company Guaranteed Notes (Callable 04/15/04 @ $104.38) (B , B2) 04/15/09 8.750 106,500 145 Kerzner International, Ltd., Global Company Guaranteed Notes (Callable 08/15/06 @ $104.44) (B+ , B2) 08/15/11 8.875 156,962 85 Mohegan Tribal Gaming, Global Senior Subordinated Notes (Callable 07/01/06 @ $104.19) (BB- , Ba3) 07/01/11 8.375 92,013 185 Penn National Gaming, Inc., Company Guaranteed Notes (Callable 03/15/06 @ $104.44) (B- , B3) 03/15/10 8.875 199,800 -------------- 1,133,812 -------------- ENVIRONMENTAL CONTROL (0.7%) 100 Allied Waste North America, Series B, Company Guaranteed Notes (Callable 01/01/04 @ $103.94) (BB- , Ba3) 01/01/09 7.875 102,875 350 Waste Management, Inc., Global Company Guaranteed Notes (BBB , Baa3) 05/15/32 7.750 396,276
See Accompanying Notes to Financial Statements. 7
PAR RATINGS** (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ------ -------------- ENVIRONMENTAL CONTROL -- (CONTINUED) $ 125 Waste Management, Inc., Notes (BBB , Baa3) 04/30/04 8.000 $ 129,673 375 Waste Management, Inc., Senior Notes (BBB , Baa3) 08/01/10 7.375 421,702 -------------- 1,050,526 -------------- FOOD (2.3%) 390 ConAgra Foods, Inc., Notes (BBB+ , Baa1) 09/15/11 6.750 431,285 335 ConAgra Foods, Inc., Notes (BBB+ , Baa1) 09/15/30 8.250 411,417 5 Fleming Companies, Inc., Global Company Guaranteed Notes (Callable 04/01/05 @ $105.06)@@ (NR , NR) 04/01/08 10.125 625 575 General Mills, Inc., Global Notes (BBB+ , Baa2) 02/15/12 6.000 608,320 310 Kellogg Co., Global Senior Notes (BBB , Baa2) 06/01/08 2.875 296,161 555 Kellogg Co., Series B, Global Notes (BBB , Baa2) 04/01/11 6.600 616,078 280 Land O' Lakes, Inc., Global Senior Notes (Callable 11/15/06 @ $104.38) (B+ , B2) 11/15/11 8.750 226,100 70 Premier International Foods PLC, Yankee Senior Notes (Callable 09/01/04 @ $106.00) (B- , B3) 09/01/09 12.000 77,000 550 Sara Lee Corp., Notes (A+ , A3) 06/15/13 3.875 497,195 120 Stater Brothers Holdings, Inc., Senior Notes (Callable 8/15/04 @ $102.6875) (B- , B2) 08/15/06 10.750 126,900 -------------- 3,291,081 -------------- FOREST PRODUCTS, PAPER (0.1%) 105 Appleton Papers, Inc., Series B, Global Company Guaranteed Notes (Callable 12/15/05 @ $106.25) (B+ , B3) 12/15/08 12.500 114,450 -------------- HEALTHCARE PRODUCTS (0.4%) 550 Baxter International, Inc., Notes (A , A3) 05/01/07 5.250 581,495 -------------- HEALTHCARE SERVICES (0.2%) 100 Extendicare Health Services, Inc., Company Guaranteed Notes (Callable 12/15/03 @ $103.12) (CCC+ , B3) 12/15/07 9.350 103,000 248 Genesis Health Ventures Inc., Secured Notes# (B , B1) 04/02/07 6.114 246,262 -------------- 349,262 -------------- HOLDING COMPANIES - DIVERSIFIED (0.1%) 100 Werner Holding Company, Inc., Series A, Company Guaranteed Notes (Callable 11/15/03 @ $103.33) (B- , B2) 11/15/07 10.000 102,000 -------------- HOME BUILDERS (0.3%) 175 KB Home, Senior Subordinated Notes (Callable 02/15/06 @ $104.75) (BB- , Ba3) 02/15/11 9.500 188,125 170 Ryland Group, Senior Notes (Callable 09/01/05 @ $104.88) (BB+ , Ba1) 09/01/10 9.750 189,550 -------------- 377,675 -------------- INSURANCE (0.4%) 595 MetLife Inc., Debentures (A , A2) 05/15/05 3.911 613,026 -------------- INTERNET SOFTWARE & SERVICES (0.2%) 300 Thomson Corp., Global Notes (A- , A3) 01/05/12 6.200 322,706 --------------
See Accompanying Notes to Financial Statements. 8
PAR RATINGS** (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ------ -------------- IRON & STEEL (0.1%) $ 220 AK Steel Corp., Company Guaranteed Notes (Callable 02/15/04 @ $103.94)~ (B+ , B2) 02/15/09 7.875 $ 174,900 -------------- LEISURE TIME (0.2%) 100 Hard Rock Hotel, Inc., Rule 144A, Notes (Callable 06/01/08 @ 104.44)++ (B , B3) 06/01/13 8.875 103,500 100 Hockey Co./Sports Maska, Inc., Global Units (Callable 04/15/06 @ $105.63) (B , B2) 04/15/09 11.250 113,500 -------------- 217,000 -------------- LODGING (1.3%) 60 Ameristar Casinos, Inc., Global Company Guaranteed Notes (Callable 02/15/06 @ $105.38) (B , B3) 02/15/09 10.750 67,200 110 Aztar Corp., Senior Subordinated Notes (Callable 05/15/04 @ $102.96) (B+ , Ba3) 05/15/07 8.875 115,775 270 Majestic Investor Holdings, Company Guaranteed Notes (Callable 11/30/05 @ $105.83) (B , B2) 11/30/07 11.653 284,850 155 MGM Mirage, Inc., Company Guaranteed Notes (BB+ , Ba2) 06/01/07 9.750 173,600 250 Prime Hospitality Corp., Series B, Global Senior Subordinated Notes (Callable 05/01/07 @ $104.19) (B , B2) 05/01/12 8.375 242,500 255 Riviera Holdings Corp., Global Company Guaranteed Notes (Callable 06/15/06 @ $105.50) (B , B2) 06/15/10 11.000 249,900 150 Station Casinos, Inc., Senior Subordinated Notes (Callable 07/01/05 @ $103.70) (B+ , B2) 07/01/10 9.875 165,750 780 Windsor Woodmont Black Hawk, Series B, First Mortgage (Callable 03/15/04 @ $104.33)@@ (NR , NR) 03/15/05 13.000 511,875 -------------- 1,811,450 -------------- MEDIA (2.1%) 470 AOL Time Warner, Inc., Global Company Guaranteed Notes (BBB+ , Baa1) 04/15/31 7.625 510,697 100 Clear Channel Communications, Company Guaranteed Notes (BBB- , Ba1) 11/01/08 8.000 114,000 135 Coaxial Communications/Phoenix, Company Guaranteed Notes (Callable 08/15/04 @ $101.667) (B , B3) 08/15/06 10.000 141,244 710 Comcast Cable Communications, Inc., Senior Notes~ (BBB , Baa3) 01/30/11 6.750 772,610 250 CSC Holdings, Inc., Series B, Senior Notes (BB- , B1) 04/01/11 7.625 251,250 100 Mediacom LLC/Capital Corp., Senior Notes (Callable 01/15/06 @ $104.75) (B+ , B2) 01/15/13 9.500 101,500 280 News America Holdings, Inc., Company Guaranteed Notes (BBB- , Baa3) 02/01/13 9.250 353,612 515 News America Holdings, Inc., Debentures (BBB- , Baa3) 08/10/18 8.250 612,201 100 Northland Cable Television, Company Guaranteed Notes (Callable 11/15/03 @ $103.42) (CC , Caa3) 11/15/07 10.250 96,500 50 Rogers Cable, Inc., Rule 144A, Notes++ (BBB- , Ba2) 06/15/13 6.250 47,187 20 Young Broadcasting, Inc., Global Company Guaranteed Notes (Callable 03/01/06 @ $105.00) (CCC+ , Caa1) 03/01/11 10.000 21,600 -------------- 3,022,401 --------------
See Accompanying Notes to Financial Statements. 9
PAR RATINGS** (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ------ -------------- METAL FABRICATE/HARDWARE (0.1%) $ 100 Jarden Corp., Global Company Guaranteed Notes (Callable 05/01/07 @ $104.88) (B- , B2) 05/01/12 9.750 $ 104,000 -------------- MISCELLANEOUS MANUFACTURING (0.5%) 100 Building Materials Corp., Company Guaranteed Notes (B , B2) 12/01/08 8.000 94,750 535 Norsk Hydro A/S, Yankee Debentures (A , A2) 06/15/23 7.750 632,316 -------------- 727,066 -------------- OIL & GAS (1.8%) 100 Chesapeake Energy Corp., Global Company Guaranteed Notes (Callable 04/01/06 @ $104.06) (BB- , Ba3) 04/01/11 8.125 105,000 385 Enterprise Products Partners LP, Company Guaranteed Notes (BBB , Baa2) 02/01/11 7.500 436,269 270 Forest Oil Corp., Global Company Guaranteed Notes (Callable 05/01/07 @ $103.88) (BB , Ba3) 05/01/14 7.750 266,625 515 KeySpan Corp., Senior Notes (A , A3) 11/15/30 8.000 646,717 85 Magnum Hunter Resources, Inc., Company Guaranteed Notes (Callable 06/01/04 @ $101.67) (B+ , B2) 06/01/07 10.000 88,188 100 Parker Drilling Co., Series B, Company Guaranteed Notes (Callable 11/15/04 @ $105.06)~ (B+ , B2) 11/15/09 10.125 98,750 520 Sempra Energy, Notes (A- , Baa1) 12/01/05 6.950 565,832 270 Southwest Royalties, Inc., Company Guaranteed, Notes (Callable 10/8/03 @ $100.00)# (NR , NR) 06/30/04 11.500 270,675 -------------- 2,478,056 -------------- PACKAGING & CONTAINERS (0.8%) 550 Crown Packaging, Ltd., Yankee Senior Discount Notes (Callable 8/1/04 @ $101.00)@@ (NR , NR) 08/01/06 14.000 55 160 Four M Corp., Series B, Senior Notes (Callable 06/01/04 @ $100.00) (B , B3) 06/01/06 12.000 160,800 100 Owens-Brockway Glass Containers, Global Company Guaranteed Notes (Callable 02/15/06 @ $104.44) (BB , B1) 02/15/09 8.875 105,500 100 Owens-Illinois, Inc., Senior Notes~ (B+ , B3) 05/15/08 7.350 97,000 155 Sealed Air Corp., Rule 144A, Notes++ (BBB , Baa3) 05/15/09 6.950 165,683 255 Sealed Air Corp., Rule 144A, Senior Notes++ (BBB , Baa3) 04/15/08 5.375 258,515 330 Stone Container Corp., Global Senior Notes (Callable 07/01/07 @ $104.19) (B , B2) 07/01/12 8.375 341,550 -------------- 1,129,103 -------------- PHARMACEUTICALS (0.0%) 30 NBTY, Inc., Series B, Senior Subordinated Notes (Callable 09/15/03 @ $102.88) (B+ , B1) 09/15/07 8.625 30,750 -------------- PIPELINES (0.7%) 330 Duke Capital Corp., Global Senior Notes (BBB , Baa3) 10/01/19 8.000 353,670 320 Equitable Resources, Inc., Global Bonds (A , A2) 11/15/12 5.150 321,154 --------------
See Accompanying Notes to Financial Statements. 10
PAR RATINGS** (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ---------- -------------- PIPELINES -- (CONTINUED) $ 240 Western Gas Resources, Inc., Company Guaranteed Notes (Callable 06/15/04 @ $105.00) (BB- , Ba3) 06/15/09 10.000 $ 256,800 -------------- 931,624 -------------- REAL ESTATE (0.4%) 495 EOP Operating LP, Senior Notes (BBB+ , Baa1) 02/15/05 6.625 524,321 -------------- RETAIL (0.9%) 175 Leslie's Poolmart, Rule 144A, Senior Notes (Callable 07/15/05 @ 102.59)++ (B- , B2) 07/15/08 10.375 175,875 100 Sbarro, Inc., Company Guaranteed Notes (Callable 09/15/04 @ $105.50)~ (B- , B3) 09/15/09 11.000 85,500 605 Target Corp., Notes (A+ , A2) 08/15/10 7.500 703,817 290 Yum! Brands, Inc., Senior Notes (BB+ , Ba1) 07/01/12 7.700 311,025 -------------- 1,276,217 -------------- SAVINGS & LOANS (0.6%) 100 Sovereign Bancorp, Inc., Senior Notes (BBB- , Ba1) 11/15/06 10.500 117,499 620 Washington Mutual, Inc., Global Senior Notes (BBB+ , A3) 01/15/07 5.625 664,255 -------------- 781,754 -------------- SOVEREIGN (1.5%) 290 Government of Malaysia, Global Bonds (BBB+ , Baa1) 07/15/11 7.500 334,515 1,055 Republic of Philippines, Series B, Restructured Debt, Foreign Government Guaranteed (Callable 12/01/03 @ $100.00)(Philippines) (BB , Ba1) 12/01/17 6.500 1,022,717 245 Russian Federation, Unsubordinated Notes (BB , Ba2) 03/31/10 8.250 271,788 475 United Mexican States, MTN Global Notes (BBB- , Baa2) 01/16/13 6.375 480,938 -------------- 2,109,958 -------------- TELECOMMUNICATIONS (3.3%) 250 Alamosa PCS Holdings, Inc., Company Guaranteed Notes (Callable 02/15/05 @ $106.44)+ (CCC- , Caa3) 02/15/10 12.875 185,000 455 AT&T Broadband Corp., Global Company Guaranteed Notes (BBB , Baa3) 03/15/13 8.375 541,541 705 AT&T Corp., Global Senior Notes~,# (BBB , Baa2) 11/15/31 8.500 798,133 505 AT&T Wireless Services, Inc., Global Senior Notes (BBB , Baa2) 03/01/11 7.875 571,412 255 AT&T Wireless Services, Inc., Global Senior Notes (BBB , Baa2) 03/01/31 8.750 303,192 235 Citizens Communications Co., Global Senior Notes (BBB , Baa2) 08/15/31 9.000 294,824 130 Citizens Communications Co., Notes (BBB , Baa2) 05/15/06 8.500 147,327 240 Cox Communications, Inc., Notes (BBB , Baa2) 06/15/05 6.875 257,856 155 Insight Midwest/Insight Capital Corp., Global Senior Notes (Callable 11/01/05 @ $105.25) (B+ , B2) 11/01/10 10.500 163,913 100 Insight Midwest/Insight Capital Corp., Senior Notes (Callable 10/01/04 @ $104.88) (B+ , B2) 10/01/09 9.750 103,000 178 Level 3 Communications, Inc., Senior Notes (Callable 05/01/04 @ $103.04)~ (CC , Caa3) 05/01/08 9.125 145,960 80 Rogers Wireless Communications, Inc., Global Secured (BB+ , Ba3) 05/01/11 9.625 88,500 555 Sprint Capital Corp., Global Company Guaranteed Notes (BBB- , Baa3) 03/15/32 8.750 632,754 420 Verizon Wireless Capital, Inc., Global Notes (A+ , A3) 12/15/06 5.375 445,911 -------------- 4,679,323 --------------
See Accompanying Notes to Financial Statements. 11
PAR RATINGS** (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ------ -------------- TEXTILES (0.0%) $ 35 Simmons Co., Series B, Senior Subordinated Notes (Callable 03/15/04 @ $105.13) (B , B2) 03/15/09 10.250 $ 37,538 -------------- TOTAL CORPORATE BONDS (Cost $52,326,775) 53,489,408 -------------- ASSET BACKED SECURITIES (16.1%) 2,500 Aesop Funding II LLC, Series 2003-2A Class A2# (AAA , Aaa) 06/20/07 1.360 2,511,285 1,951 Ameriquest Mortgage Services, Inc., Series 2003-AR2, Class A4# (AAA , Aaa) 05/25/33 1.460 1,952,206 1,150 Citibank Credit Card Issuance Trust, Series 2000-A3, Class A3# (AAA , Aaa) 11/16/09 6.875 1,297,797 1,135 Citibank Credit Card Issuance Trust, Series 2002-A1, Class A1 (AAA , Aaa) 02/09/09 4.950 1,197,874 1,610 Citibank Credit Card Issuance Trust, Series 2002-A9, Class A9# (AAA , Aaa) 12/17/07 1.159 1,611,358 1,090 Citibank Credit Card Issuance Trust, Series 2003-A7, Class A7# (AAA , Aaa) 07/07/17 4.150 975,685 1,784 Conseco Finance, Series 2000-D, Class A4 (AAA , Aaa) 12/15/25 8.170 1,861,868 763 Contimortgage Home Equity Loan Trust, Series 1996-4, Class A8 (AAA , Aaa) 01/15/28 7.220 766,041 1,531 Countrywide Home Equity Loan Trust, Series 2002-C, Class A# (AAA , Aaa) 05/15/28 1.350 1,528,548 1,610 First USA Credit Card Master Trust, Series 2001-1, Class A# (AAA , Aaa) 09/19/08 1.260 1,615,456 177 Green Tree Recreational, Equipment & Consumer Trust, Series 1997-C, Class A1 (AAA , NR) 02/15/18 6.490 177,603 1,199 Greenpoint Home Equity Loan Trust, Series 2003-1, Class A# (AAA , Aaa) 04/15/29 1.380 1,197,420 1,610 MBNA Credit Card Master Note Trust, Series 2002-A4, Class A4# (AAA , Aaa) 08/17/09 1.220 1,611,916 2,000 MBNA Master Credit Card Trust, Series 1998-G, Class A# (AAA , Aaa) 02/17/09 1.240 2,006,442 1,610 SLM Student Loan Trust, Series 2003-1, Class A2# (AAA , Aaa) 06/17/13 1.159 1,611,355 820 UCFC Home Equity Loan Trust, Series 1998-A, Class A7 (AAA , Aaa) 07/15/29 6.870 852,348 -------------- TOTAL ASSET BACKED SECURITIES (Cost $22,693,448) 22,775,202 -------------- MORTGAGE-BACKED SECURITIES (52.7%) MORTGAGE BACKED SECURITIES (52.7%) 855 Fannie Mae Global Bonds (AAA , Aaa) 11/15/30 6.625 942,702 3,050 Fannie Mae Global Notes^^ (AAA , Aaa) 03/15/12 6.125 3,329,563 187 Fannie Mae Pool #077774 (AAA , Aaa) 01/01/10 10.000 206,750 7 Fannie Mae Pool #124032 (AAA , Aaa) 02/01/05 10.000 7,098 638 Fannie Mae Pool #254702 (AAA , Aaa) 03/01/33 7.000 673,328 12 Fannie Mae Pool #531072 (AAA , Aaa) 01/01/30 6.000 11,957 193 Fannie Mae Pool #588970 (AAA , Aaa) 06/01/31 7.000 203,411 367 Fannie Mae Pool #589625 (AAA , Aaa) 11/01/24 6.500 382,598 772 Fannie Mae Pool #652310 (AAA , Aaa) 09/01/32 6.500 799,966 305 Fannie Mae Pool #656862 (AAA , Aaa) 04/01/33 6.000 310,314 331 Fannie Mae Pool #662830 (AAA , Aaa) 10/01/32 7.500 354,353 2,047 Fannie Mae Pool #667742 (AAA , Aaa) 04/01/33 6.000 2,081,564 1,474 Fannie Mae Pool #674585 (AAA , Aaa) 12/01/32 6.500 1,527,593 424 Fannie Mae Pool #678886 (AAA , Aaa) 01/01/33 7.000 448,074 712 Fannie Mae Pool #685447 (AAA , Aaa) 02/01/33 7.000 751,522
See Accompanying Notes to Financial Statements. 12
PAR RATINGS** (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ---------- -------------- MORTGAGE BACKED SECURITIES -- (CONTINUED) $ 1,023 Fannie Mae Pool #695851 (AAA , Aaa) 05/01/18 5.500 $ 1,045,205 452 Fannie Mae Pool #696915 (AAA , Aaa) 04/01/33 6.000 459,375 1,578 Fannie Mae Pool #702129 (AAA , Aaa) 03/01/33 6.500 1,635,029 2,358 Fannie Mae Pool #702130^^ (AAA , Aaa) 03/01/33 7.000 2,488,896 1,632 Fannie Mae Pool #703443 (AAA , Aaa) 05/01/18 5.000 1,640,791 1,621 Fannie Mae Pool #703444^^ (AAA , Aaa) 05/01/18 5.000 1,628,804 287 Fannie Mae Pool #703598 (AAA , Aaa) 05/01/18 5.500 293,007 394 Fannie Mae Pool #704142 (AAA , Aaa) 05/01/18 5.500 403,067 269 Fannie Mae Pool #705651 (AAA , Aaa) 06/01/18 5.500 275,012 1,811 Fannie Mae Pool #708487^^ (AAA , Aaa) 04/01/33 6.000 1,842,068 1,092 Fannie Mae Pool #708704 (AAA , Aaa) 06/01/33 6.000 1,110,622 319 Fannie Mae Pool #709515 (AAA , Aaa) 05/01/18 5.500 326,499 488 Fannie Mae Pool #712118 (AAA , Aaa) 05/01/33 6.000 496,061 456 Fannie Mae Pool #712119 (AAA , Aaa) 05/01/33 6.000 464,185 2 Fannie Mae Series 1991-165 Class M (AAA , Aaa) 12/25/21 8.250 2,164 2,160 Fannie Mae TBA (AAA , Aaa) 09/02/18 4.500 2,122,200 315 Fannie Mae TBA (AAA , Aaa) 09/02/18 5.500 321,792 2,180 Fannie Mae TBA (AAA , Aaa) 09/02/33 5.000 2,109,830 6,660 Fannie Mae TBA (AAA , Aaa) 09/02/33 5.500 6,632,947 2,720 Fannie Mae TBA (AAA , Aaa) 09/02/33 6.000 2,818,600 1,405 Fannie Mae TBA (AAA , Aaa) 09/02/33 6.000 1,428,709 2,345 Fannie Mae TBA (AAA , Aaa) 09/02/33 6.500 2,424,876 6,945 Freddie Mac^^ (AAA , Aaa) 07/15/08 2.625 6,596,910 4,760 Freddie Mac~ (AAA , Aaa) 07/15/13 4.500 4,563,431 4,295 Freddie Mac, Global Notes~ (AAA , Aaa) 01/15/13 4.500 4,155,576 38 Freddie Mac, Series Gold (AAA , Aaa) 12/01/09 7.000 40,342 4,000 Freddie Mac Discount Notes^^ (AAA , Aaa) 09/02/03 0.850 3,999,906 1,600 Freddie Mac TBA (AAA , Aaa) 09/02/18 5.000 1,606,000 1,870 Ginnie Mae (AAA , Aaa) 09/15/33 6.500 1,945,383 0 Ginnie Mae Pool #003322(1) (AAA , Aaa) 11/15/04 9.000 39 0 Ginnie Mae Pool #003766(1) (AAA , Aaa) 08/15/04 8.250 10 0 Ginnie Mae Pool #004923(1) (AAA , Aaa) 12/15/04 9.000 62 0 Ginnie Mae Pool #009827(1) (AAA , Aaa) 04/15/06 8.250 122 1 Ginnie Mae Pool #112986 (AAA , Aaa) 07/15/14 13.500 830 8 Ginnie Mae Pool #186563 (AAA , Aaa) 12/15/16 9.000 9,009 16 Ginnie Mae Pool #210216 (AAA , Aaa) 04/15/17 8.000 16,935 137 Ginnie Mae Pool #312635 (AAA , Aaa) 08/15/21 9.000 152,878 479 Ginnie Mae Pool #598105 (AAA , Aaa) 03/15/33 6.000 489,165 427 Ginnie Mae Pool #598128 (AAA , Aaa) 03/15/33 6.000 436,206 448 Ginnie Mae Pool #598145 (AAA , Aaa) 03/15/33 6.000 457,531 250 Ginnie Mae Pool #600025 (AAA , Aaa) 03/15/33 6.000 255,385 183 Ginnie Mae Pool #604170 (AAA , Aaa) 04/15/33 6.500 190,157 521 Ginnie Mae Pool #604205 (AAA , Aaa) 04/15/33 6.500 542,297 1,460 Ginnie Mae TBA (AAA , Aaa) 09/02/33 5.500 1,459,088 2 GMAC Commercial Mortgage Securities, Inc., Series 1996-C1, Class A2B (AAA , Aaa) 02/15/06 7.220 2,419 1,420 Morgan Stanley Capital I, Series 2003-T11, Class A4# (AAA , Aaa) 06/13/41 5.150 1,407,131 1,050 Salomon Brothers Mortgage Securities VII, Series 1997-TZH, Class B (AAA , Aa1) 03/25/25 7.491 1,130,832 950 Vanderbilt Mortgage Finance, Series 1998-C, Class 1B1 (BBB , NR) 02/07/15 6.970 974,293 -------------- TOTAL MORTGAGE-BACKED SECURITIES (Cost $75,002,203) 74,432,469 --------------
See Accompanying Notes to Financial Statements. 13
PAR RATINGS** (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ---------- -------------- FOREIGN BONDS (1.4%) BANKS (0.8%) $ 940 Royal Bank of Scotland Group PLC, Series 3, Perpetual Global Bonds (Callable 12/31/05 @ $100.00) (United Kingdom) (A- , A1) 11/29/49 7.816 $ 1,045,223 -------------- OIL & GAS (0.3%) 385 Petroleos Mexicano, Bonds (BB , Ba1) 06/01/07 9.000 444,906 -------------- TELECOMMUNICATIONS (0.3%) 385 Deutsche Telekom International Finance BV, Global Company Guaranteed Notes# (BBB+ , Baa3) 06/15/05 8.250 422,309 -------------- TOTAL FOREIGN BONDS (Cost $1,804,819) 1,912,438 -------------- UNITED STATES TREASURY OBLIGATIONS (0.2%) 330 United States Treasury Bills## (Cost $329,350) (AAA , Aaa) 11/06/03 0.855 329,445 -------------- NUMBER OF SHARES --------- COMMON STOCKS (0.1%) FOOD (0.0%) 836 Archibald Candy Corp.*, ^ 20,900 -------------- OIL & GAS SERVICES (0.1%) 5,252 Southwest Royalties, Inc.*, ^ 79,463 -------------- PACKAGING & CONTAINERS (0.0%) 45,544 Crown Packaging Enterprises, Ltd.* 455 -------------- TOTAL COMMON STOCKS (Cost $244,293) 100,818 -------------- PREFERRED STOCK (0.3%) TELECOMMUNICATIONS (0.3%) 350 Centaur Funding Corp., Rule 144A++(Cost $371,652) 401,844 -------------- WARRANTS (0.0%) BUILDING MATERIALS (0.0%) 240 Dayton Superior Corp., Rule 144A, strike $0.01, expires June 2009*,++ 2 -------------- TELECOMMUNICATIONS (0.0%) 130 GT Group Telecom, Inc., Rule 144A, strike $0.00 expires Feburary 2010*,++ 97 50 IWO Holdings, Inc., Rule 144A, strike $7.00, expires January 2011*,++ 1 9,343 XO Communications Inc., Series A Wts., strike $6.25, expires January 2010* 25,226 7,008 XO Communications Inc., Series B Wts., strike $7.50, expires January 2010* 14,016 7,008 XO Communications Inc., Series C Wts., strike $10.00, expires January 2010* 10,512 -------------- 49,852 -------------- TOTAL WARRANTS (Cost $21,326) 49,854 --------------
See Accompanying Notes to Financial Statements. 14
NUMBER OF SHARES VALUE ------------- -------------- SHORT-TERM INVESTMENTS (10.7%) AIM Institutional Fund - Liquid Asset Portfolio~~ (Cost $10,564,305) 10,564,305 $ 10,564,305 PAR (000) ------------- State Street Bank and Trust Co. Euro Time Deposit, 0.750%, 09/02/03^^ (Cost $4,515,000) $ 4,515 4,515,000 -------------- TOTAL SHORT-TERM INVESTMENTS (Cost $15,079,305) 15,079,305 -------------- TOTAL INVESTMENTS AT VALUE (119.4%) (Cost $167,873,171) 168,570,783 LIABILITIES IN EXCESS OF OTHER ASSETS (-19.4%) (27,330,528) -------------- NET ASSETS (100.0%) $ 141,240,255 ==============
** Credit ratings given by the Standard & Poor's Division of The McGraw-Hill Companies, Inc. ("S&P") and Moody's Investors Service, Inc. ("Moody's") are unaudited. # Variable rate obligations -- The interest rate shown is the rate as of August 31, 2003. + Step Bond -- The interest stated is as of August 31, 2003 and will reset at a future date. ++ Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2003, these securities amounted to a value of $4,481,547 or 3.2% of net assets. @@ Security in default. * Non-income producing security. ~ Security or portion thereof is out on loan. ~~ Represents security purchased with cash collateral received for securities on loan. ## Collateral segregated for futures contracts. ^^ Collateral segregated for TBA securities. ^ Not readily marketable security; security is valued at fair value as determined in good faith by the Board of Directors. (1) Par value of security held is less than $1,000. INVESTMENT ABBREVIATIONS TBA To Be Announced
See Accompanying Notes to Financial Statements. 15 CREDIT SUISSE INSTITUTIONAL HIGH YIELD FUND ANNUAL INVESTMENT ADVISER'S REPORT September 19, 2003 Dear Shareholder: We are writing to report on the results of the Credit Suisse Institutional High Yield Fund(1) (the "Fund") for the fiscal year ended August 31, 2003. At August 31, 2003, the net asset value ("NAV") per share of the Fund was $10.26, compared to an NAV per share of $9.90 on August 31, 2002. Assuming the reinvestment of distributions totalling $1.19091 per share, the Fund's total return was 16.96%. By comparison, the Citigroup High-Yield Market Index(2) (CHYMI) and the Credit Suisse First Boston High Yield Index, Developed Countries Only(2) gained 26.89% and 22.95%, respectively, during the same period. The Fund's performance was more in line with that of its peers, while still underperforming them. As represented by the Lipper High Yield Bond Funds Index,(3) the broad universe of high yield funds returned 21.79%. The high yield market's buoyancy throughout most of the fiscal year was due to a combination of several favorable factors. Investors' appetite for relatively risky financial assets revived in late 2002, for example. There was a generalized sense that the long string of accounting-based irregularities and corporate governance issues that had plagued high yield in 2001 and 2002 may have finally run its course. In addition, there was a widespread search for yield at a time when interest rates -- and, therefore, the returns available from money market funds -- were historically low. The Federal Reserve cut its benchmark fed funds rate twice in the period, by a total of 75 bps, to 1.00% (I.E., the lowest such level since 1958). Investors thus poured fresh cash into high yield mutual funds, which acted aggressively to put the cash to work. Other factors that helped to enhance high yield's popularity included valuations that, early in the period, remained near historically low levels by certain measures; a default rate that continued to decline, suggesting that overall credit quality was improving; and vigorous buying of the bonds of "fallen angels" (I.E., investment-grade companies whose debt had been downgraded to high yield status), which had lost substantial value during much of 2002. We attribute the Fund's underperformance primarily to our positioning of the portfolio in certain industry sectors: - Our relative results in utilities and energy trading companies each suffered from the combined impact of our underweight allocation and security selection. - As represented by CHYMI, the strongest sectors in the broad high yield market during the period tended to be those that had absorbed harsh punishment in most of 2002 and had sold off in line with their equity-market counterparts. These notably included many telecommunications and technology subcategories, whose sharp gains reflected the period's revival of risk tolerance. We maintained a decidedly underweight stance in most of these as a defensive measure, which detracted from our performance accordingly. A big-picture factor that dampened performance in the fiscal year's first half was that, at the time, we chose not to own the securities of many of the most prominent fallen angels. Our avoidance of such companies was based on our belief that their underlying fundamentals remained problematic. As we mentioned earlier, however, the bonds of fallen angels enjoyed momentum-fuelled rallies in late 2002 and well into 2003. 16 The most positive contributions to the Fund's overall return came from our overweight exposure and security selection in cable television, which proved particularly effective. To a lesser degree, performance additionally benefited from our overweight and security selection in health care facilities/supplies; and our overweights in consumer products/tobacco, gaming and competitive local-exchange telecom service providers. Sincerely yours, Credit Suisse High Yield Management Team Richard J. Lindquist, CFA, Managing Director Misia K. Dudley, Director Philip L. Schantz, Director Mary Ann Thomas, CFA, Director John M. Tobin, CFA, Director John F. Dessauer, CFA, Vice President Michael J. Dugan, Vice President NOTE: HIGH YIELD BONDS ARE LOWER-QUALITY BONDS ALSO KNOWN AS "JUNK BONDS." SUCH BONDS ENTAIL GREATER RISKS THAN THOSE FOUND IN HIGHER-RATED SECURITIES. IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND FOREIGN MARKET, INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT REGULATION AND THEIR POTENTIAL IMPACT ON THE FUND'S INVESTMENT PORTFOLIO. THESE STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS, DEVELOPMENTS AND REGULATIONS IN THE FUTURE, AND THEIR IMPACT ON THE FUND COULD BE MATERIALLY DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE FUND HAS NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS. 17 [CHART] COMPARISON OF CHANGE IN VALUE OF $3 MILLION INVESTMENT IN THE CREDIT SUISSE INSTITUTIONAL HIGH YIELD FUND(1), THE CITIGROUP HIGH-YIELD MARKET INDEX(2),(4) AND THE CREDIT SUISSE FIRST BOSTON HIGH YIELD INDEX, DEVELOPED COUNTRIES ONLY(2),(4) FROM INCEPTION (2/26/93). (UNAUDITED)
CREDIT SUISSE FIRST BOSTON CREDIT SUISSE INSTITUTIONAL CITIGROUP HIGH-YIELD HIGH YIELD INDEX, DEVELOPED HIGH YIELD FUND(1) $5,379,300 MARKET INDEX(2),(4) $6,181,046 COUNTRIES ONLY(2),(4) $6,223,429 2/28/1993 $ 3,000,000 $ 3,000,000 $ 3,000,000 3/31/1993 $ 3,094,000 $ 3,046,500 $ 3,063,330 4/30/1993 $ 3,122,000 $ 3,069,958 $ 3,080,852 5/31/1993 $ 3,182,000 $ 3,112,323 $ 3,125,740 6/30/1993 $ 3,276,000 $ 3,181,728 $ 3,182,316 7/31/1993 $ 3,344,000 $ 3,212,909 $ 3,215,412 8/31/1993 $ 3,388,000 $ 3,247,609 $ 3,242,808 9/30/1993 $ 3,402,000 $ 3,255,403 $ 3,261,227 10/31/1993 $ 3,550,000 $ 3,318,558 $ 3,320,907 11/30/1993 $ 3,564,000 $ 3,336,478 $ 3,362,684 12/31/1993 $ 3,486,000 $ 3,373,179 $ 3,405,121 1/31/1994 $ 3,746,010 $ 3,446,377 $ 3,465,732 2/28/1994 $ 3,640,962 $ 3,430,524 $ 3,470,931 3/31/1994 $ 3,404,814 $ 3,302,908 $ 3,368,920 4/30/1994 $ 3,364,179 $ 3,272,852 $ 3,323,743 5/31/1994 $ 3,447,588 $ 3,284,307 $ 3,342,688 6/30/1994 $ 3,377,011 $ 3,287,920 $ 3,320,226 7/31/1994 $ 3,374,838 $ 3,320,141 $ 3,335,930 8/31/1994 $ 3,463,935 $ 3,338,734 $ 3,359,949 9/30/1994 $ 3,505,472 $ 3,330,053 $ 3,373,322 10/31/1994 $ 3,467,827 $ 3,330,719 $ 3,375,649 11/30/1994 $ 3,436,824 $ 3,294,081 $ 3,336,593 12/31/1994 $ 3,370,391 $ 3,330,975 $ 3,371,894 1/31/1995 $ 3,281,396 $ 3,378,941 $ 3,407,333 2/28/1995 $ 3,290,524 $ 3,491,460 $ 3,491,153 3/31/1995 $ 3,312,297 $ 3,527,771 $ 3,530,603 4/30/1995 $ 3,458,838 $ 3,610,674 $ 3,608,982 5/31/1995 $ 3,605,379 $ 3,718,272 $ 3,710,720 6/30/1995 $ 3,624,627 $ 3,744,672 $ 3,735,248 7/31/1995 $ 3,679,258 $ 3,789,608 $ 3,793,144 8/31/1995 $ 3,733,889 $ 3,813,103 $ 3,803,803 9/30/1995 $ 3,800,734 $ 3,857,335 $ 3,847,546 10/31/1995 $ 3,820,188 $ 3,889,737 $ 3,890,254 11/30/1995 $ 3,837,209 $ 3,925,133 $ 3,908,538 12/31/1995 $ 3,916,355 $ 3,987,543 $ 3,958,099 1/31/1996 $ 4,021,458 $ 4,046,160 $ 4,033,382 2/29/1996 $ 4,101,537 $ 4,071,246 $ 4,054,799 3/31/1996 $ 4,089,815 $ 4,050,890 $ 4,043,770 4/30/1996 $ 4,120,317 $ 4,049,675 $ 4,065,687 5/31/1996 $ 4,199,114 $ 4,072,353 $ 4,098,538 6/30/1996 $ 4,184,330 $ 4,103,710 $ 4,107,637 7/31/1996 $ 4,158,244 $ 4,130,384 $ 4,144,605 8/31/1996 $ 4,197,374 $ 4,173,340 $ 4,189,781 9/30/1996 $ 4,320,463 $ 4,270,996 $ 4,261,804 10/31/1996 $ 4,323,133 $ 4,320,113 $ 4,297,603 11/30/1996 $ 4,373,868 $ 4,403,059 $ 4,364,560 12/31/1996 $ 4,415,130 $ 4,437,843 $ 4,449,712 1/31/1997 $ 4,480,661 $ 4,471,127 $ 4,482,284 2/28/1997 $ 4,559,844 $ 4,547,136 $ 4,566,506 3/31/1997 $ 4,477,208 $ 4,500,300 $ 4,515,361 4/30/1997 $ 4,493,883 $ 4,532,252 $ 4,555,593 5/31/1997 $ 4,607,828 $ 4,623,804 $ 4,647,069 6/30/1997 $ 4,701,436 $ 4,701,946 $ 4,710,270 7/31/1997 $ 4,817,486 $ 4,809,621 $ 4,810,174 8/31/1997 $ 4,834,469 $ 4,821,645 $ 4,836,149 9/30/1997 $ 4,958,410 $ 4,906,024 $ 4,931,905 10/31/1997 $ 4,993,104 $ 4,945,272 $ 4,931,363 11/30/1997 $ 4,998,886 $ 4,970,493 $ 4,966,425 12/31/1997 $ 5,070,574 $ 5,022,683 $ 5,011,569 1/31/1998 $ 5,180,224 $ 5,135,693 $ 5,096,716 2/28/1998 $ 5,257,275 $ 5,170,616 $ 5,136,572 3/31/1998 $ 5,332,451 $ 5,226,459 $ 5,162,255 4/30/1998 $ 5,335,460 $ 5,254,682 $ 5,200,920 5/31/1998 $ 5,356,525 $ 5,268,869 $ 5,216,471 6/30/1998 $ 5,369,774 $ 5,280,461 $ 5,227,478 7/31/1998 $ 5,357,486 $ 5,322,704 $ 5,264,070 8/31/1998 $ 5,099,442 $ 4,966,083 $ 4,906,535 9/30/1998 $ 4,995,678 $ 5,027,166 $ 4,905,995 10/31/1998 $ 4,872,988 $ 4,957,791 $ 4,808,415 11/30/1998 $ 5,001,970 $ 5,206,672 $ 5,052,249 12/31/1998 $ 5,005,871 $ 5,203,028 $ 5,040,579 1/31/1999 $ 5,070,172 $ 5,281,073 $ 5,104,796 2/28/1999 $ 5,060,527 $ 5,236,712 $ 5,085,448 3/31/1999 $ 5,134,520 $ 5,281,224 $ 5,119,979 4/30/1999 $ 5,262,229 $ 5,391,602 $ 5,218,845 5/31/1999 $ 5,186,914 $ 5,306,953 $ 5,166,657 6/30/1999 $ 5,186,978 $ 5,295,278 $ 5,159,372 7/31/1999 $ 5,200,381 $ 5,306,928 $ 5,164,583 8/31/1999 $ 5,133,366 $ 5,243,775 $ 5,115,003 9/30/1999 $ 5,081,169 $ 5,203,923 $ 5,068,917 10/31/1999 $ 5,046,837 $ 5,168,536 $ 5,033,891 11/30/1999 $ 5,125,801 $ 5,249,682 $ 5,095,405 12/31/1999 $ 5,230,720 $ 5,293,779 $ 5,154,460 1/31/2000 $ 5,276,634 $ 5,249,841 $ 5,123,070 2/29/2000 $ 5,460,292 $ 5,262,441 $ 5,142,537 3/31/2000 $ 5,386,440 $ 5,155,613 $ 5,049,509 4/30/2000 $ 5,285,151 $ 5,176,235 $ 5,048,449 5/31/2000 $ 5,209,183 $ 5,104,286 $ 4,977,720 6/30/2000 $ 5,261,311 $ 5,219,132 $ 5,083,247 7/31/2000 $ 5,253,901 $ 5,276,021 $ 5,123,354 8/31/2000 $ 5,227,965 $ 5,315,063 $ 5,153,582 9/30/2000 $ 5,157,678 $ 5,258,192 $ 5,105,654 10/31/2000 $ 5,005,535 $ 5,102,550 $ 4,948,451 11/30/2000 $ 4,743,086 $ 4,893,855 $ 4,738,092 12/31/2000 $ 4,810,749 $ 4,993,690 $ 4,835,176 1/31/2001 $ 5,061,472 $ 5,330,115 $ 5,135,972 2/28/2001 $ 5,057,555 $ 5,393,756 $ 5,193,032 3/31/2001 $ 4,968,039 $ 5,295,757 $ 5,091,716 4/30/2001 $ 4,899,653 $ 5,217,920 $ 5,041,869 5/31/2001 $ 4,972,061 $ 5,301,553 $ 5,134,588 6/30/2001 $ 4,850,214 $ 5,155,750 $ 5,044,733 7/31/2001 $ 4,871,030 $ 5,252,910 $ 5,114,905 8/31/2001 $ 4,929,316 $ 5,324,586 $ 5,182,883 9/30/2001 $ 4,582,057 $ 4,941,210 $ 4,845,995 10/31/2001 $ 4,701,849 $ 5,105,387 $ 4,970,053 11/30/2001 $ 4,830,198 $ 5,299,463 $ 5,136,549 12/31/2001 $ 4,853,545 $ 5,265,414 $ 5,137,577 1/31/2002 $ 4,889,037 $ 5,287,955 $ 5,184,175 2/28/2002 $ 4,826,926 $ 5,230,438 $ 5,141,509 3/31/2002 $ 4,913,970 $ 5,369,667 $ 5,263,877 4/30/2002 $ 4,959,135 $ 5,457,537 $ 5,347,309 5/31/2002 $ 4,913,970 $ 5,389,847 $ 5,327,310 6/30/2002 $ 4,692,209 $ 4,915,152 $ 5,145,063 7/31/2002 $ 4,553,112 $ 4,692,938 $ 4,997,760 8/31/2002 $ 4,590,205 $ 4,871,537 $ 5,061,781 9/30/2002 $ 4,512,551 $ 4,775,729 $ 4,994,520 10/31/2002 $ 4,455,189 $ 4,759,453 $ 4,962,151 11/30/2002 $ 4,675,080 $ 5,122,633 $ 5,231,853 12/31/2002 $ 4,713,174 $ 5,184,975 $ 5,293,359 1/31/2003 $ 4,788,224 $ 5,377,447 $ 5,442,394 2/28/2003 $ 4,878,285 $ 5,449,563 $ 5,522,914 3/31/2003 $ 4,978,998 $ 5,632,996 $ 5,664,908 4/30/2003 $ 5,182,430 $ 5,983,064 $ 5,953,745 5/31/2003 $ 5,243,459 $ 6,022,768 $ 6,033,632 6/30/2003 $ 5,384,544 $ 6,210,052 $ 6,207,220 7/31/2003 $ 5,374,079 $ 6,118,255 $ 6,154,651 8/31/2003 $ 5,379,300 $ 6,181,046 $ 6,223,429
Past performance is not predictive of future performance. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than their original cost. The performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. AVERAGE ANNUAL RETURNS AS OF AUGUST 31, 2003(1)
SINCE ONE YEAR THREE YEARS FIVE YEARS TEN YEARS INCEPTION -------- ----------- ---------- --------- --------- 16.96% 0.89% 1.03% 4.71% 5.69%
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2003(1)
SINCE ONE YEAR THREE YEARS FIVE YEARS TEN YEARS INCEPTION -------- ----------- ---------- --------- --------- 21.69% 2.11% 1.91% 4.90% 5.87%
(1) Fee waivers and/or expense reimbursements reduced expenses for the Fund, without which performance would be lower. Waivers and/or reimbursements may be discontinued at any time. (2) Effective December 12, 2002, the Fund changed its performance benchmark from the CSFB High Yield Index, Developed Countries Only to the Citigroup High-Yield Market Index because the construction methodology and sector codes of the latter index more closely resemble those of the Fund's portfolio. The Citigroup High-Yield Market Index is a broad-based, unmanaged index of high yield securities that is compiled by Citigroup Global Markets Inc. Its name was changed from the Salomon Smith Barney High-Yield Market Index effective April 7, 2003. The Credit Suisse First Boston High Yield Index, Developed Countries Only is an unmanaged index (with no defined investment objective) of domestic high yield bonds and is compiled by Credit Suisse First Boston, an affiliate of the Fund's advisor. Its name changed from The Credit Suisse First Boston Domestic+ High Yield Index effective May 31, 2001. Investors cannot invest directly in an index. (3) The Lipper High Yield Bond Funds Index is an equal-weighted performance index, adjusted for capital-gain distributions and income dividends, of the largest qualifying funds classified by Lipper Inc. as investing primarily in high yield debt securities. It is compiled by Lipper Inc. Investors cannot invest directly in an index. (4) Performance for both indices are shown from March 1, 1993 to August 31, 2003. 18 SCHEDULE OF INVESTMENTS AUGUST 31, 2003
PAR RATINGS# (000) (S&P / MOODY'S) MATURITY RATE% VALUE ----- --------------- -------- ----- ----------- CORPORATE BONDS (101.0%) AEROSPACE (0.4%) $ 100 L-3 Communications Corp., Global Company Guaranteed Notes (Callable 07/15/08 @ $103.06) (BB- , Ba3) 07/15/13 6.125 $ 95,000 ----------- AUTOMOBILE MANUFACTURING/VEHICLE PARTS (4.8%) 100 Collins & Aikman Products Corp., Company Guaranteed Notes (Callable 04/15/04 @ $100.00)~ (B- , B3) 04/15/06 11.500 76,000 100 Cummins, Inc., Rule 144A, Senior Notes (Callable 12/01/06 @ $104.75)++ (BB+ , Ba2) 12/01/10 9.500 112,000 200 Delco Remy International, Inc., Company Guaranteed Notes (Callable 08/01/04 @ $100.00)~ (CCC+ , B3) 08/01/06 10.625 179,000 100 Holley Performance Products, Series B, Company Guaranteed Notes (Callable 09/15/03 @ $106.12) (CCC- , Caa3) 09/15/07 12.250 38,500 450 Motor Coach Industries International, Inc., Company Guaranteed Notes (Callable 05/01/04 @ $105.62) (CCC+ , Caa1) 05/01/09 11.250 227,812 200 Stanadyne Automotive Corp., Series B, Company Guaranteed Notes (Callable 12/15/03 @ $103.42) (B , Caa1) 12/15/07 10.250 175,000 150 Tenneco Automotive, Inc., Rule 144A, Secured Notes (Callable 07/15/08 @ $105.12)++ (CCC+ , B2) 07/15/13 10.250 156,000 350 Titan International, Inc., Senior Subordinated Notes (Callable 04/01/04 @ $101.46) (CCC , Caa3) 04/01/07 8.750 204,750 100 TRW Automotive, Rule 144A, Senior Subordinated Notes (Callable 02/15/08 @ $105.50)++, ~ (B+ , B2) 02/15/13 11.000 115,000 ----------- 1,284,062 ----------- BROADCAST/OUTDOOR (1.8%) 100 Entravision Communications Corp., Global Company Guaranteed Notes (Callable 03/15/06 @ $104.06) (B- , B3) 03/15/09 8.125 103,750 100 Interep National Radio Sales, Inc., Series B, Company Guaranteed Notes (Callable 07/01/04 @ $103.33) (CCC- , Caa2) 07/01/08 10.000 87,500 100 Paxson Communications Corp., Global Company Guaranteed Notes (Callable 01/15/06 @ $106.12)+ (CCC+ , Caa1) 01/15/09 12.250 80,500 100 Radio One, Inc., Series B, Global Company Guaranteed Notes (Callable 07/01/06 @ $104.44) (B- , B2) 07/01/11 8.875 109,750 100 Sinclair Broadcast Group, Inc., Global Company Guaranteed Notes (B , B2) 12/15/11 8.750 108,250 ----------- 489,750 ----------- BUILDING PRODUCTS (1.6%) 100 Associated Materials, Inc., Global Company Guaranteed Notes (Callable 04/15/07 @ $104.88) (B- , B3) 04/15/12 9.750 105,500 250 Building Materials Corp., Company Guaranteed Notes (B , B2) 12/01/08 8.000 236,875 100 Dayton Superior Corp., Company Guaranteed Notes (Callable 06/15/07 @ $102.17) (B- , Caa2) 06/15/09 13.000 86,500 ----------- 428,875 ----------- CABLE (10.1%) 250 Adelphia Communications Corp., Series B, Senior Notes@@ (NR , NR) 07/15/04 10.500 167,500 250 Century Communications Corp., Senior Discount Notes@@ (NR , NR) 03/15/49 0.00 151,250 200 Charter Communications Holdings LLC, Senior Discount Notes (Callable 04/01/04 @ $104.96)+ (CCC- , Ca) 04/01/11 9.920 135,000
See Accompanying Notes to Financial Statements. 19
PAR RATINGS# (000) (S&P / MOODY'S) MATURITY RATE% VALUE ----- --------------- -------- ----- ------------- CABLE -- (CONTINUED) $ 100 Charter Communications Holdings LLC, Senior Notes (Callable 01/15/05 @ $105.12) (CCC- , Ca) 01/15/10 10.250 $ 77,000 400 Coaxial LLC, Company Guaranteed Notes (Callable 08/15/04 @ $104.29)+ (CCC+ , NR) 08/15/08 12.875 423,000 100 Comcast UK Cable Partners, Ltd., Yankee Debentures (Callable 11/15/03 @ $100.00) (C , Caa2) 11/15/07 11.200 99,750 100 CSC Holdings, Inc., Senior Subordinated Debentures (Callable 02/15/04 @ $103.60) (B+ , B2) 02/15/13 9.875 105,000 250 Frontiervision Holdings LP, Senior Discount Notes (Callable 09/15/03 @ $103.96)@@ (NR , NR) 09/15/07 11.875 225,000 250 Insight Communications Company, Inc., Senior Discount Notes (Callable 02/15/06 @ $106.12)+ (B- , Caa1) 02/15/11 12.250 190,625 150 Insight Midwest, Senior Notes (Callable 10/01/04 @ $104.88) (B+ , B2) 10/01/09 9.750 154,500 410 James Cable Partners LP, Series B, Senior Notes@@ (NR , Ca) 08/15/04 10.750 231,650 100 LodgeNet Entertainment Corp., Senior Subordinated Debentures (Callable 06/15/08 $104.75) (B- , B3) 06/15/13 9.500 104,500 100 Mediacom LLC Capital Corp., Senior Notes (Callable 01/15/06 @ $104.75) (B+ , B2) 01/15/13 9.500 101,500 150 Mediacom LLC Capital Corp., Senior Notes (Callable 02/15/06 @ $103.94) (B+ , B2) 02/15/11 7.875 140,250 150 Northland Cable Television, Inc., Company Guaranteed Notes (Callable 11/15/03 @ $103.42) (CC , Caa3) 11/15/07 10.250 144,750 250 Olympus Communications LP, Series B, Senior Notes (Callable 11/15/03 @ $101.77)@@ (NR , NR) 11/15/06 10.625 251,562 ----------- 2,702,837 ----------- CAPITAL GOODS (0.7%) 100 Intermet Corp., Global Company Guaranteed Notes (Callable 06/15/06 @ $104.88) (B+ , B2) 06/15/09 9.750 95,500 100 SPX Corp., Senior Notes (Callable 01/01/08 @ $103.75) (BB+ , Ba3) 01/01/13 7.500 104,500 ----------- 200,000 ----------- CHEMICALS (2.7%) 100 Acetex Corp., Global Senior Notes (Callable 08/01/05 @ $105.44) (B+ , B2) 08/01/09 10.875 109,500 150 Applied Extrusion Technologies, Inc., Series B, Company Guaranteed Notes (Callable 07/01/06 @ $105.38) (B , Caa1) 07/01/11 10.750 100,500 100 Equistar Chemicals LP/ Equistar Funding Corp., Global Company Guaranteed Notes (BB- , B1) 09/01/08 10.125 100,500 110 Lyondell Chemical Co., Series B, Senior Secured Notes (Callable 05/01/04 @ $104.94) (BB- , Ba3) 05/01/07 9.875 109,450 100 Radnor Holdings Corp., Rule 144A, Senior Notes (Callable 03/15/07 @ $105.50)++ (B , B2) 03/15/10 11.000 80,500 250 Terra Capital, Inc., Global Secured Notes (Callable 06/01/07 @ $105.75) (B- , Caa1) 06/01/10 11.500 213,750 ----------- 714,200 ----------- COMPETITIVE LOCAL EXCHANGE CARRIER (CLEC) (3.1%) 100 Block Communications, Inc., Global Company Guaranteed Notes (Callable 04/15/06 @ $104.62) (B- , B2) 04/15/09 9.250 106,500 250 FairPoint Communications, Inc., Series B, Senior Subordinated Notes (Callable 05/01/04 @ $103.17) (B- , Caa1) 05/01/08 9.500 238,750
See Accompanying Notes to Financial Statements. 20
PAR RATINGS# (000) (S&P / MOODY'S) MATURITY RATE% VALUE ----- --------------- -------- ----- ------------- COMPETITIVE LOCAL EXCHANGE CARRIER (CLEC) -- (CONTINUED) $ 400 RCN Corp., Senior Notes (Callable 10/15/03 @ $103.33) (NR , Ca) 10/15/07 10.000 $ 160,000 232 RCN Corp., Series B, Senior Unsecured Discount Notes (Callable 02/15/04 @ $103.27)+ (CCC- , Ca) 02/15/08 9.800 92,800 250 Time Warner Telecom LLC, Senior Notes (Callable 07/15/04 @ $103.25) (CCC+ , B3) 07/15/08 9.750 236,250 ----------- 834,300 ----------- COMPUTERS (0.7%) 2,427 DIVA Systems Corp., Series B, Senior Discount Notes (Callable 03/01/04 @ $104.20)@@ (NR , NR) 03/01/08 12.625 182,025 ----------- CONGLOMERATE/DIVERSIFIED MANUFACTURING (0.8%) 150 Jordan Industries, Inc., Series D, Senior Notes (Callable 08/01/04 @ $100.00) (CCC- , Caa3) 08/01/07 10.375 68,250 150 TriMas Corp., Global Company Guaranteed Notes (Callable 06/15/07 @ $104.94) (B , B3) 06/15/12 9.875 147,750 ----------- 216,000 ----------- CONSUMER PRODUCTS/TOBACCO (6.0%) 125 Central Garden & Pet Co., Global Company Guaranteed Notes (Callable 02/01/08 @ $104.56) (B+ , B2) 02/01/13 9.125 132,500 715 Diamond Brands Operating, Company Guaranteed Notes (Callable 04/15/04 @ $103.38)@@ (D , NR) 04/15/08 10.125 8,937 100 DIMON, Inc., Series B, Global Company Guaranteed Notes (Callable 10/15/06 @ $104.81) (BB , Ba3) 10/15/11 9.625 110,500 250 General Binding Corp., Company Guaranteed Notes (Callable 06/01/04 @ $103.13) (B- , Caa1) 06/01/08 9.375 242,500 100 Hockey Co./Sports Maska, Inc., Senior Secured, Global Notes, Units (Callable 04/15/06 @ $105.62) (B , B2) 04/15/09 11.250 113,500 250 Holmes Products Corp., Series D, Senior Subordinated Notes (Callable 11/15/03 @ $103.29) (B- , Caa2) 11/15/07 9.875 218,750 100 Jafra Cosmetics/Distribution, Rule 144A, Senior Subordinated Notes (Callable 05/15/07 @ $105.38)++ (B- , B3) 05/15/11 10.750 105,500 100 Johnsondiversey, Inc., Series B, Global Company Guaranteed Notes (Callable 05/15/07 @ $104.81) (B , B2) 05/15/12 9.625 106,250 150 Playtex Products, Inc., Global Company Guaranteed Notes (Callable 06/01/06 @ $104.69) (B- , B3) 06/01/11 9.375 148,500 150 Revlon Consumer Products Corp., Global Company Guaranteed Notes (CCC+ , Caa1) 12/01/05 12.000 144,750 100 Scotts Co., Company Guaranteed Notes (Callable 01/15/04 @ $104.31) (B+ , Ba3) 01/15/09 8.625 105,250 151 Werner Holding Company, Inc., Series A, Company Guaranteed Notes (Callable 11/15/03 @ $103.33) (B- , B2) 11/15/07 10.000 153,510 ----------- 1,590,447 ----------- CONTAINERS (2.1%) 150 Berry Plastics Corp., Global Company Guaranteed Notes (Callable 07/15/07 @ $105.38) (B- , B3) 07/15/12 10.750 165,375 100 Constar International, Inc., Senior Subordinated Notes (Callable 12/01/07 @ $105.50) (B , B3) 12/01/12 11.000 90,750 100 Crown European Holdings SA, Rule 144A, Secured Notes (Callable 03/01/08 @ $105.44)++ (B , B2) 03/01/13 10.875 111,000 100 Owens-Illinois, Inc., Senior Notes~ (B+ , B3) 05/15/08 7.350 97,000 100 Tekni-Plex, Inc., Series B, Company Guaranteed Notes (Callable 06/15/05 @ $106.38) (B- , B3) 06/15/10 12.750 97,000 ----------- 561,125 -----------
See Accompanying Notes to Financial Statements. 21
PAR RATINGS# (000) (S&P / MOODY'S) MATURITY RATE% VALUE ----- --------------- -------- ----- ------------- DIVERSIFIED TELECOMMUNICATIONS (1.1%) $ 125 Gray Television, Inc., Global Company Guaranteed Notes (Callable (12/15/06 @ $104.62) (B- , B3) 12/15/11 9.250 $ 136,563 150 Primus Telecommunications Group, Inc., Senior Notes (Callable 01/15/04 @ $105.62) (CCC- , Caa3) 01/15/09 11.250 147,750 ----------- 284,313 ----------- ELECTRIC UTILITIES (0.5%) 150 Sierra Pacific Resources, Notes (B- , B2) 05/15/05 8.750 146,250 ----------- ELECTRONICS/INFORMATION/DATA TECHNOLOGY (1.0%) 332 Ampex Corp., Secured Notes (NR , NR) 08/15/08 12.000 49,755 100 Seagate Technology HDD Holdings, Global Company Guaranteed Notes (Callable 05/15/06 @ $104.00) (BB+ , Ba2) 05/15/09 8.000 108,250 100 Solectron Corp., Senior Notes (Callable 02/15/06 @ $104.81)~ (BB- , Ba3) 02/15/09 9.625 108,250 ----------- 266,255 ----------- ENERGY - OTHER (2.4%) 100 Amerigas Partners LP Eagle Finance Corp., Series B, Global Senior Notes (Callable 05/20/06 @ $104.44) (BB- , B2) 05/20/11 8.875 107,500 115 Chesapeake Energy Corp., Global Company Guaranteed Notes (Callable 04/01/06 @ $104.06) (BB- , Ba3) 04/01/11 8.125 120,750 500 Eagle Geophysical, Inc., Senior Notes^ (NR , NR) 07/15/08 10.750 50 100 Giant Industries, Inc., Global Company Guaranteed Notes (Callable 05/15/07 @ $105.50) (B- , B3) 05/15/12 11.000 97,500 100 Swift Energy Co., Senior Subordinated Notes (Callable 05/01/07 @ $104.69) (B , B3) 05/01/12 9.375 106,500 150 Trico Marine Services, Inc., Global Company Guaranteed Notes (Callable 05/15/07 @ $104.44) (CCC+ , Caa1) 05/15/12 8.875 110,250 100 Williams Companies, Inc., Notes (B+ , B3) 12/01/08 6.500 95,500 ----------- 638,050 ----------- ENVIRONMENTAL SERVICES (0.8%) 100 Allied Waste North America, Inc., Series B, Company Guaranteed Notes (Callable 01/01/04 @ $103.94) (BB- , Ba3) 01/01/09 7.875 102,875 100 IMC Global, Inc., Series B, Global Company Guaranteed Notes (Callable 06/01/06 @ $105.62) (B+ , B1) 06/01/11 11.250 104,000 ----------- 206,875 ----------- FOOD PROCESSORS/BEVERAGE/BOTTLING (5.1%) 125 Aurora Foods, Inc., Series B, Senior Subordinated Notes (Callable 02/15/04 @ $103.65) (D , Ca) 02/15/07 9.875 63,125 100 B&G Foods, Inc., Series D, Global Company Guaranteed Notes (Callable 08/01/04 @ $101.60) (B- , B3) 08/01/07 9.625 102,000 100 Curtice Burns Food, Inc., Company Guaranteed Notes (Callable 11/01/03 @ $105.94) (B- , B3) 11/01/08 11.875 107,250 350 Eagle Family Foods, Inc., Series B, Company Guaranteed Notes (Callable 01/15/04 @ $102.92) (CCC+ , Caa2) 01/15/08 8.750 239,750 150 Land O' Lakes, Inc., Global Senior Notes (Callable 11/15/06 @ $104.38) (B+ , B2) 11/15/11 8.750 121,125 100 Luigino's, Inc., Senior Subordinated Notes (Callable 02/01/04 @ $102.50) (B- , B3) 02/01/06 10.000 103,000
See Accompanying Notes to Financial Statements. 22
PAR RATINGS# (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ----- -------------- FOOD PROCESSORS/BEVERAGE/BOTTLING -- (CONTINUED) $ 200 National Wine & Spirits, Inc., Company Guaranteed Notes (Callable 01/15/04 @ $105.06) (CCC+ , B3) 01/15/09 10.125 $ 176,000 250 New World Pasta Co., Company Guaranteed Notes (Callable 02/15/04 @ $104.62) (NR , Caa3) 02/15/09 9.250 67,500 100 Pilgrim's Pride Corp., Company Guaranteed Notes (Callable 09/15/06 @ $104.81) (BB- , B1) 09/15/11 9.625 106,500 150 Premier International Foods PLC, Yankee Senior Notes (Callable 09/01/04 @ $106.00) (B- , B3) 09/01/09 12.000 165,000 100 Roundy's, Inc., Series B, Global Company Guaranteed Notes (Callable 06/15/07 @ $104.44) (B , B2) 06/15/12 8.875 104,750 -------------- 1,356,000 -------------- GAMING (9.9%) 100 Ameristar Casinos, Inc., Global Company Guaranteed Notes (Callable 02/15/06 @ $105.38) (B , B3) 02/15/09 10.750 112,000 100 Argosy Gaming Co., Senior Subordinated Notes (Callable 09/01/06 @ $104.50) (B+ , B2) 09/01/11 9.000 108,250 100 Aztar Corp., Global Senior Subordinated Notes (Callable 08/15/06 @ $104.50) (B+ , Ba3) 08/15/11 9.000 107,250 100 Coast Hotels & Casinos, Inc., Company Guaranteed Notes (Callable 04/01/04 @ 104.75) (B , B2) 04/01/09 9.500 107,000 150 Hard Rock Hotel, Inc., Rule 144A, Notes (Callable 06/01/08 @ $104.44)++ (B , B3) 06/01/13 8.875 155,250 150 Herbst Gaming, Inc., Series B, Global Secured Notes (Callable 09/01/05 @ $105.38) (B , B2) 09/01/08 10.750 165,750 100 Isle of Capri Casinos, Inc., Company Guaranteed Notes (Callable 04/15/04 @ $104.38) (B , B2) 04/15/09 8.750 106,500 100 Kerzner International, Ltd., Global Company Guaranteed Notes (Callable 08/15/06 @ $104.44) (B+ , B2) 08/15/11 8.875 108,250 250 Majestic Investor Holdings, Company Guaranteed Notes (Callable 11/30/05 @ $105.83) (B , B2) 11/30/07 11.653 263,750 250 Majestic Star Casino LLC, Series B, Company Guaranteed Notes (Callable 07/01/04 @ $102.72) (B , B2) 07/01/06 10.875 264,845 250 Old Evangeline Downs, Rule 144A, Secured Notes (Callable 03/01/07 @ $106.50)++ (B- , Caa1) 03/01/10 13.000 255,938 250 Peninsula Gaming LLC, Series B, Company Guaranteed Notes (Callable 07/01/04 @ $105.33) (B , B2) 07/01/06 12.250 260,312 100 Penn National Gaming, Inc., Series B, Global Company Guaranteed Notes (Callable 03/01/05 @ $105.56) (B- , B3) 03/01/08 11.125 112,000 200 Waterford Gaming LLC, Rule 144A, Senior Notes (Callable 09/15/08 @ $103.55)++ (B+ , B1) 09/15/12 8.625 208,000 300 Windsor Woodmont Black Hawk, Series B, First Mortgage (Callable 03/15/04 @ $104.33)@@ (NR , NR) 03/15/05 13.000 196,875 100 Wynn Las Vegas LLC, Second Mortgage Note (Callable 11/01/06 @ $112.00) (CCC+ , B3) 11/01/10 12.000 114,000 -------------- 2,645,970 -------------- GAS PIPELINES (1.9%) 100 El Paso CGP Co., Notes (B , Caa1) 02/01/09 6.375 83,750 100 El Paso Corp., Senior Notes~ (B , Caa1) 05/15/11 7.000 86,750 100 El Paso Production Holdings Co., Rule 144A, Company Guaranteed Notes (Callable 06/01/08 @ $103.88)++ (B+ , B2) 06/01/13 7.750 97,500
See Accompanying Notes to Financial Statements. 23
PAR RATINGS# (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ----- -------------- GAS PIPELINES -- (CONTINUED) $ 150 Gemstone Investors, Ltd., Rule 144A, Company Guaranteed Notes++ (B , Caa1) 10/31/04 7.710 $ 148,875 100 Reliant Resources, Inc., Rule 144A, Secured Notes (Callable 07/15/08 @ $104.75)++ (B , B1) 07/15/13 9.500 92,500 -------------- 509,375 -------------- HEALTHCARE FACILITIES/SUPPLIES (4.0%) 100 Alpharma, Inc., Rule 144A, Senior Notes (Callable 05/01/07 @ $104.31)++ (B+ , B3) 05/01/11 8.625 101,500 100 Extendicare Health Services, Inc., Company Guaranteed Notes (Callable 12/15/03 @ $103.12) (CCC+ , B3) 12/15/07 9.350 103,000 100 HEALTHSOUTH Corp., Global Notes@@,~ (D , Caa2) 06/01/12 7.625 82,000 300 Magellan Health Services, Inc., Rule 144A, Senior Notes (Callable 11/15/05 @ $104.69)++, @@ (D , NR) 11/15/07 9.375 315,000 100 Magellan Health Services, Inc., Senior Subordinated Notes (Callable 02/15/04 @ $103.00)@@ (D , NR) 02/15/08 9.000 49,500 50 Rotech Healthcare, Inc., Global Company Guaranteed Notes (Callable 04/01/07 @ $104.75) (B+ , B2) 04/01/12 9.500 52,250 100 Vanguard Health Systems, Inc., Global Company Guaranteed Notes (Callable 08/01/06 @ $104.88) (CCC+ , B3) 08/01/11 9.750 102,500 150 Ventas Realty LP, Global Company Guaranteed Notes (BB- , Ba3) 05/01/12 9.000 160,875 100 Vicar Operating, Inc., Company Guaranteed Notes (Callable 12/01/05 @ $104.94) (B- , B3) 12/01/09 9.875 108,500 -------------- 1,075,125 -------------- HOME BUILDERS (1.0%) 100 Beazer Homes USA, Inc., Global Company Guaranteed Notes (Callable 04/15/07 @ $104.19) (BB , Ba2) 04/15/12 8.375 106,000 150 Toll Corp., Senior Subordinated Notes (Callable 12/01/06 @ $104.12) (BB+ , Ba2) 12/01/11 8.250 159,750 -------------- 265,750 -------------- INDUSTRIAL - OTHER (0.9%) 100 Day International Group, Inc., Series B, Senior Notes (Callable 06/01/04 @ $100.00) (B- , B2) 06/01/05 11.125 101,625 504 International Utility Structures, Inc., Subordinated Notes (Callable 02/01/04 @ $104.33)@@ (NR , NR) 02/01/08 13.000 25,200 100 Wolverine Tube, Inc., Global Company Guaranteed Notes (Callable 04/01/06 @ $105.25) (BB- , B1) 04/01/09 10.500 104,000 -------------- 230,825 -------------- LEISURE (3.7%) 100 AMC Entertainment, Inc., Senior Subordinated Notes (Callable 02/01/04 @ $104.75) (CCC+ , Caa1) 02/01/11 9.500 105,500 200 Booth Creek Ski Holdings, Inc., Series B, Company Guaranteed Notes (Callable 03/15/04 @ $102.08) (CCC+ , Caa1) 03/15/07 12.500 191,750 100 Cinemark USA, Inc., Global Senior Subordinated Notes (Callable 02/01/08 @ $104.50) (B- , B3) 02/01/13 9.000 107,000 250 Icon Health & Fitness, Inc., Global Company Guaranteed Notes (Callable 04/01/07 @ 105.62) (B- , B3) 04/01/12 11.250 263,750 121 Imax Corp., Yankee Senior Unsecured Notes (Callable 12/01/03 @ $101.97) (CCC , Caa2) 12/01/05 7.875 118,693 100 Intrawest Corp., Yankee Senior Notes (Callable 08/15/04 @ $103.25) (B+ , B1) 08/15/08 9.750 104,500
See Accompanying Notes to Financial Statements. 24
PAR RATINGS# (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ----- -------------- LEISURE -- (CONTINUED) $ 100 Speedway Motorsports, Inc., Rule 144A, Senior Subordinated Notes (Callable 06/01/08 @ $103.38)++ (B+ , Ba2) 06/01/13 6.750 $ 99,500 -------------- 990,693 -------------- LODGING (0.4%) 100 HMH Properties, Inc., Series C, Senior Notes (Callable 12/01/03 @ $104.22) (B+ , Ba3) 12/01/08 8.450 102,625 -------------- MACHINERY (0.5%) 160 Motors & Gears, Inc., Series D, Senior Notes (Callable 11/15/03 @ $101.79) (CCC+ , Caa1) 11/15/06 10.750 139,200 -------------- METALS & MINING (1.4%) 100 Earle M. Jorgensen Co., Global Secured Notes (Callable 06/01/07 @ $104.88) (B- , B2) 06/01/12 9.750 106,000 100 Jarden Corp., Global Company Guaranteed Notes (Callable 05/01/07 @ $104.88) (B- , B2) 05/01/12 9.750 104,000 150 Metallurg, Inc., Series B, Company Guaranteed Notes (Callable 12/01/03 @ $103.67) (CCC , Caa2) 12/01/07 11.000 72,750 100 UCAR Finance, Inc., Global Company Guaranteed Notes (Callable 02/15/07 @ $105.12) (B , B3) 02/15/12 10.250 104,125 -------------- 386,875 -------------- OIL EQUIPMENT (0.9%) 115 Parker Drilling Co., Series B, Company Guaranteed Notes (Callable 11/15/04 @ $105.06)~ (B+ , B2) 11/15/09 10.125 113,563 135 Pride International, Inc., Senior Notes (Callable 05/01/04 @ $101.56) (BB , Ba2) 05/01/07 9.375 139,725 -------------- 253,288 -------------- PAPER & FOREST PRODUCTS (2.6%) 100 Ainsworth Lumber Company, Ltd., Yankee Senior Notes (B- , B3) 07/15/07 12.500 112,500 150 Box USA Holdings, Series B, Senior Notes (Callable 06/01/04 @ $100.00) (B , B3) 06/01/06 12.000 150,750 100 Buckeye Technologies, Inc., Senior Subordinated Notes (Callable 12/15/03 @ $100.00) (B , Caa1) 12/15/05 8.500 99,000 100 Caraustar Industries, Inc., Global Company Guaranteed Notes (Callable 04/01/06 @ $105.25) (B+ , B2) 04/01/11 9.875 96,500 118 Doman Industries, Ltd., Yankee Company Guaranteed Notes@@ (D , Caa2) 07/01/04 12.000 121,025 100 Georgia-Pacific Corp., Notes (BB+ , Ba3) 05/15/06 7.500 101,750 -------------- 681,525 -------------- PHARMACEUTICALS (0.7%) 100 aaiPharma, Inc., Global Company Guaranteed Notes (Callable 04/01/06 @ 105.50) (B- , Caa1) 04/01/10 11.000 110,000 82 Biovail Corp., Yankee Senior Subordinated Notes (Callable 04/01/06 @ 103.94) (BB- , B2) 04/01/10 7.875 82,820 -------------- 192,820 -------------- POWER (1.2%) 150 AES Corp., Rule 144A, Secured Notes (Callable 05/15/08 @ $104.50)++ (B+ , B2) 05/15/15 9.000 153,000
See Accompanying Notes to Financial Statements. 25
PAR RATINGS# (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ----- -------------- POWER -- (CONTINUED) $ 48 AES Corp., Senior Unsecured Notes (B- , B3) 06/01/09 9.500 $ 46,440 150 Edison Mission Energy, Senior Notes (BB- , B2) 06/15/09 7.730 117,000 -------------- 316,440 -------------- PUBLISHING (2.9%) 250 Dex Media East LLC, Global Company Guaranteed Notes (Callable 11/15/06 @ $104.94) (B , B2) 11/15/09 9.875 284,375 100 Hollinger, Inc., Rule 144A, Secured Notes (Callable 03/01/07 @ $105.94)++ (B , B3) 03/01/11 11.875 109,750 300 Liberty Group Publishing, Inc., Debentures (Callable 02/01/04 @ $103.88)+ (CCC+ , Caa2) 02/01/09 11.625 276,000 100 Phoenix Color Corp., Company Guaranteed Notes (Callable 02/01/04 @ 105.19) (CCC+ , Caa2) 02/01/09 10.375 94,750 500 Premier Graphics, Inc., Company Guaranteed Notes (Callable 12/01/03 @ $102.88)**, @@ (NR , NR) 12/01/05 11.500 0 -------------- 764,875 -------------- RESTAURANTS (1.1%) 100 American Restaurant Group, Inc., Series D, Company Guaranteed Notes (Callable 11/01/04 @ $105.75) (CCC+ , Caa2) 11/01/06 11.500 70,500 215 AmeriKing, Inc., Senior Notes (Callable 12/01/03 @ $100.00)@@ (NR , NR) 11/15/07 10.750 21,500 229 AmeriKing, Inc., Unit, Senior Notes (Callable 12/01/03 @ $100.00)@@ (NR , NR) 05/15/08 13.000 22,945 100 Carrols Corp., Company Guaranteed Notes (Callable 12/01/03 @ $104.75) (B- , B3) 12/01/08 9.500 96,500 100 Sbarro, Inc., Company Guaranteed Notes (Callable 09/15/04 @ $105.50)~ (B- , B3) 09/15/09 11.000 85,500 -------------- 296,945 -------------- RETAIL-FOOD & DRUG (1.4%) 100 Great Atlantic & Pacific Tea Company, Inc., Notes (B , B3) 04/15/07 7.750 91,500 95 Nutritional Sourcing Corp., Notes (Callable 06/05/04 @ $102.00) (NR , NR) 08/01/09 10.125 70,560 110 Pantry, Inc., Company Guaranteed Notes (Callable 10/15/03 @ $103.42) (B- , B3) 10/15/07 10.250 113,300 100 Rite Aid Corp., Rule 144A, Secured Notes (Callable 05/01/07 @ $104.06)++ (B+ , B2) 05/01/10 8.125 103,500 -------------- 378,860 -------------- RETAIL STORES (4.1%) 100 AutoNation, Inc., Global Company Guaranteed Notes (BB+ , Ba2) 08/01/08 9.000 110,750 370 Flooring America, Inc., Series B, Company Guaranteed Notes (Callable 10/15/03 @ $102.31)@@ (NR , NR) 10/15/07 9.250 37 250 Jostens, Inc., Senior Subordinated Notes (Callable 05/01/05 @ $106.38) (B , B3) 05/01/10 12.750 288,750 150 Leslie's Poolmart, Rule 144A, Senior Notes (Callable 07/15/05 @ $102.59)++ (B- , B2) 07/15/08 10.375 150,750 100 Michaels Stores, Inc., Senior Notes (Callable 07/01/05 @ $104.62) (BB+ , Ba1) 07/01/09 9.250 108,750 100 Pep Boys - Manny, Moe & Jack, Notes (BB- , B2) 06/01/05 7.000 101,500 125 Pep Boys - Manny, Moe & Jack, Series MTNB, Notes (BB- , B2) 07/07/06 6.920 125,937
See Accompanying Notes to Financial Statements. 26
PAR RATINGS# (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ----- -------------- RETAIL STORES -- (CONTINUED) $ 100 Petco Animal Supplies, Inc., Global Senior Subordinated Notes (Callable 11/01/06 @ $105.38) (B , B2) 11/01/11 10.750 $ 113,500 100 United Auto Group, Inc., Global Company Guaranteed Notes (Callable 03/15/07 @ $104.81) (B , B3) 03/15/12 9.625 107,625 -------------- 1,107,599 -------------- SATELLITE (1.3%) 100 EchoStar DBS Corp., Senior Notes (Callable 02/01/04 @ $104.69) (BB- , Ba3) 02/01/09 9.375 106,875 100 Pegasus Communications Corp., Series B, Senior Notes (Callable 12/01/03 @ $103.25) (CCC- , Ca) 12/01/06 9.750 81,500 250 Pegasus Satellite Communication, Global Senior Discount Notes (Callable 03/01/04 @ $106.75)+ (CCC- , C) 03/01/07 13.500 162,500 -------------- 350,875 -------------- SECONDARY OIL & GAS PRODUCERS (3.4%) 100 Compton Petroleum Corp., Global Senior Notes (Callable 05/15/06 @ $104.95) (B , B2) 05/15/09 9.900 107,500 100 Continental Resources, Inc., Company Guaranteed Notes (Callable 08/01/04 @ $103.42) (CCC+ , Caa1) 08/01/08 10.250 98,750 86 Magnum Hunter Resources, Inc., Company Guaranteed Notes (Callable 06/01/04 @ $101.67) (B+ , B2) 06/01/07 10.000 89,225 100 Magnum Hunter Resources, Inc., Global Company Guaranteed Notes (Callable 03/15/07 @ $104.80) (B+ , B2) 03/15/12 9.600 106,500 100 Plains Exploration & Production Co., Series B, Global Company Guaranteed Notes (Callable 07/01/07 @ $104.38) (B , B2) 07/01/12 8.750 104,000 209 Southwest Royalties, Inc., Company Guaranteed Notes+ (NR , NR) 06/30/04 11.500 209,523 100 Vintage Petroleum, Inc., Global Senior Subordinated Notes (Callable 05/15/06 @ $ 103.94) (B , B1) 05/15/11 7.875 101,500 100 Wiser Oil Co., Company Guaranteed Notes (Callable 05/15/04 @ $101.58) (CCC+ , Caa3) 05/15/07 9.500 90,000 -------------- 906,998 -------------- SERVICES (4.7%) 250 Ameriserve Finance Trust, Rule 144A, Senior Secured Notes (Callable 09/15/03 @ $106.00)@@,++ (NR , NR) 09/15/06 12.000 13,750 250 Brand Services, Inc., Global Company Guaranteed Notes (Callable 10/15/07 @ $106.00) (B- , B3) 10/15/12 12.000 281,563 100 IESI Corp., Global Company Guaranteed Notes (Callable 06/15/07 @ $105.12) (B- , B3) 06/15/12 10.250 106,500 150 Iron Mountain, Inc., Company Guaranteed Notes (Callable 01/15/08 @ $103.88) (B , B2) 01/15/15 7.750 153,750 350 La Petite Academy, Inc., Series B, Company Guaranteed Notes (Callable 05/15/04 @ $103.33) (CC , Ca) 05/15/08 10.000 211,750 150 Mail-Well, Inc., Series B, Company Guaranteed Notes (Callable 12/15/03 @ $104.38) (B , B3) 12/15/08 8.750 144,000 100 Morton's Restaurant Group, Inc., Rule 144A, Secured Notes (Callable 07/01/07 @ $105.30)++ (B , B2) 07/01/10 7.500 88,000 100 Muzak LLC/Muzak Finance Corp., Rule 144A, Senior Notes (Callable 02/15/06 @ $105.00)++ (B , B3) 02/15/09 10.000 106,000 150 United Rentals, Inc., Series B, Company Guaranteed Notes (Callable 01/15/04 @ $104.62)~ (B+ , B2) 01/15/09 9.250 150,000 -------------- 1,255,313 --------------
See Accompanying Notes to Financial Statements. 27
PAR RATINGS# (000) (S&P / MOODY'S) MATURITY RATE% VALUE --------- --------------- -------- ----- -------------- TECHNOLOGY (0.7%) $ 100 Lucent Technologies, Inc., Notes~ (B- , Caa1) 07/15/06 7.250 $ 95,500 100 Lucent Technologies, Inc., Notes (B- , Caa1) 11/15/08 5.500 83,750 -------------- 179,250 -------------- TEXTILE/APPAREL/SHOE MANUFACTURING (0.8%) 700 Advanced Glassfiber Yarns LLC, Senior Subordinated Notes (Callable 01/15/04 @ $105.06)@@ (NR , C) 01/15/09 9.875 39,375 100 BGF Industries, Inc., Series B, Senior Subordinated Notes (Callable 01/15/04 @ $105.25) (CC , Ca) 01/15/09 10.250 71,500 100 Levi Strauss & Co., Global Senior Notes (Callable 12/15/07 @ $106.12) (BB- , B3) 12/15/12 12.250 92,000 -------------- 202,875 -------------- TRANSPORTATION/OTHER (0.4%) 100 Overseas Shipholding Group, Inc., Rule 144A, Senior Notes (Callable 03/15/08 @ $104.12)++ (BB+ , Ba1) 03/15/13 8.250 103,500 -------------- UTILITIES (1.9%) 100 Calpine Corp., Senior Notes (CCC+ , B1) 04/15/09 7.750 73,500 100 CMS Energy Corp., Senior Notes (B+ , B3) 01/15/09 7.500 96,125 150 Cogentrix Energy, Inc., Series B, Company Guaranteed Notes (BB , B1) 10/15/08 8.750 129,750 100 Mirant Americas Generation LLC, Senior Notes@@ (D , Caa3) 05/01/06 7.625 74,000 100 Mirant Corp., Rule 144A, Senior Notes++, @@, ~ (B , Ca) 07/15/04 7.400 45,500 100 PG&E Corp., Rule 144A, Secured Notes (Callable 07/15/06 @ $103.44)++ (NR , NR) 07/15/08 6.875 102,000 -------------- 520,875 -------------- WIRELESS (3.5%) 250 AirGate PCS, Inc., Senior Subordinated Notes (Callable 10/01/04 @ $106.75)+ (CC , Caa2) 10/01/09 13.500 151,250 100 Centennial Cellular Corp., Senior Subordinated Notes (Callable 12/15/03 @ $105.38) (CCC , Caa2) 12/15/08 10.750 96,000 600 iPCS, Inc., Senior Discount Notes (Callable 07/15/05 @ $107.00)@@, + (D , Ca) 07/15/10 14.000 39,000 200 Nextel Communications, Inc., Senior Discount Notes (Callable 02/15/04 @ $103.32) (B+ , B2) 02/15/08 9.950 210,500 150 Nextel Partners, Inc., Rule 144A, Senior Notes (Callable 07/01/07 @ $104.06)++, ~ (CCC+ , Caa1) 07/01/11 8.125 145,500 200 Triton PCS, Inc., Global Company Guaranteed Notes (Callable 11/15/06 @ $104.38)~ (B- , B3) 11/15/11 8.750 203,000 150 U.S. Unwired, Inc., Series B, Company Guaranteed Notes (Callable 11/01/04 @ $106.69)+ (C , Caa2) 11/01/09 13.375 84,000 -------------- 929,250 -------------- TOTAL CORPORATE BONDS (Cost $32,427,053) 26,984,090 -------------- NUMBER OF SHARES --------- COMMON STOCKS (2.1%) AUTOMOBILE MANUFACTURING/VEHICLE PARTS (0.0%) 413,097 Cambridge Industries Liquidating Trust* 2,065 -------------- CABLE (0.6%) 4,126 NTL, Inc.* 166,030 -------------- ENERGY - OTHER (0.0%) 3,914 Eagle Geophysical, Inc.*, ^ 9,785 --------------
See Accompanying Notes to Financial Statements. 28
NUMBER OF SHARES VALUE --------- -------------- INDUSTRIAL - OTHER (0.0%) 287 First Wave Marine, Inc.*, ^ $ 1,794 -------------- RETAIL-FOOD & DRUG (0.1%) 682 Archibald Candy Corp.*, ^ 17,050 -------------- RETAIL STORES (0.0%) 8,710 Safelite Glass Corp., Class B*, ^ 435 588 Safelite Realty Corp.*, ^ 6 -------------- 441 -------------- SECONDARY OIL & GAS PRODUCERS (0.2%) 3,135 Southwest Royalties, Inc.*, ^ 47,433 -------------- TEXTILE/APPAREL/SHOE MANUFACTURING (0.5%) 24,285 HCI Direct, Inc.*, ^ 121,425 2,800 Worldtex, Inc*, ^ 5,600 -------------- 127,025 -------------- WIRELESS (0.7%) 19,309 Dobson Communications Corp., Class A* 177,643 -------------- TOTAL COMMON STOCKS (Cost $1,921,441) 549,266 -------------- PREFERRED STOCKS (1.5%) BROADCAST/OUTDOOR (0.9%) 2,600 Paxson Communications Corp. 232,050 -------------- CABLE (0.0%) 8 Adelphia Business Solutions, Inc., Series B*, @@ 0 11,890 DIVA Systems Corp., Series C* 119 4 NTL Europe, Inc.* 12 -------------- 131 -------------- ENERGY - OTHER (0.1%) 150 Metretek Technologies, Inc., Series B*, ^ 30,000 -------------- GAMING (0.0%) 1,145 Peninsula Gaming LLC* 6,871 -------------- RESTAURANTS (0.0%) 10,084 AmeriKing, Inc.* 101 -------------- SERVICES (0.0%) 14,036 Source Media, Inc.* 14 -------------- TEXTILE/APPAREL/SHOE MANUFACTURING (0.1%) 857 Worldtex, Inc*, ^ 25,710 -------------- WIRELESS (0.4%) 300 Dobson Communications Corp., Rule 144A*, ++ 51,300 880 Rural Cellular Corp., Series B 63,360 -------------- 114,660 -------------- TOTAL PREFERRED STOCKS (Cost $1,130,923) 409,537 -------------- WARRANTS (0.0%) CABLE (0.0%) 7,581 DIVA Systems Corp., Rule 144A, strike $0.01 expires March 2008*, ++, ^ 76 --------------
See Accompanying Notes to Financial Statements. 29
NUMBER OF SHARES VALUE --------- -------------- COMPETITIVE LOCAL EXCHANGE CARRIER (CLEC) (0.0%) 500 Carrier1 International, Rule 144A, strike $6.71 expires February 2009* $ 5 2,960 Loral Space & Communications, Ltd., strike $2.37 expires December 2006* 29 -------------- 34 -------------- ELECTRONICS/INFORMATION/DATA TECHNOLOGY (0.0%) 500 Orbital Imaging Corp., Rule 144A, strike $1.00 expires March 2005*,++ 250 -------------- ENERGY - OTHER (0.0%) 15,000 Metretek Technologies, Inc., strike $4.00 expires September 2003*, ^ 150 -------------- RESTAURANTS (0.0%) 175 New World Restaurant Group, Inc., strike $13.00 expires June 2006* 2 -------------- RETAIL STORES (0.0%) 21,345 Safelite Glass Corp., Class A, strike $6.50 expires January 2010*, ^ 214 14,230 Safelite Glass Corp., Class B, strike $6.50 expires January 2010*, ^ 142 -------------- 356 -------------- WIRELESS (0.0%) 500 AirGate PCS, Inc., strike $0.01 expires October 2009* 1,875 500 iPCS, Inc., Rule 144A, strike $5.50 expires July 2010*,++ 5 300 Metricom, Inc., strike $87.00 expires February 2010* 3 -------------- 1,883 -------------- TOTAL WARRANTS (Cost $101,765) 2,751 -------------- SHORT-TERM INVESTMENT (5.8%) 1,562,940 AIM Institutional Fund - Liquid Asset Portfolio~~ (Cost $1,562,940) 1,562,940 -------------- TOTAL INVESTMENTS AT VALUE (110.4%) (Cost $37,144,122) 29,508,584 -------------- LIABILITIES IN EXCESS OF OTHER ASSETS (-10.4%) (2,779,373) -------------- NET ASSETS (100.0%) $ 26,729,211 ==============
# Credit ratings given by the Standard & Poor's Division of The McGraw-Hill Companies, Inc. ("S&P") and Moody's Investors Service, Inc. ("Moody's") are unaudited. + Step Bond -- The interest stated is as of August 31, 2003 and will reset at a future date. ++ Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2003 these securities amounted to a value of $3,326,949 or 12.4% of net assets. @@ Security in default. * Non-income producing security. ~ Security or portion thereof is out on loan. ~~ Represents security purchased with cash collateral received for securities on loan. ^ Not readily marketable security; security is valued at fair value as determined in good faith by the Board of Directors. ** Company filed for bankruptcy on 12/3/02. See Accompanying Notes to Financial Statements. 30 CREDIT SUISSE INSTITUTIONAL FUNDS STATEMENTS OF ASSETS AND LIABILITIES AUGUST 31, 2003
FIXED HIGH INCOME FUND YIELD FUND ------------- ------------- ASSETS Investments at value, including collateral for securities on loan of $10,564,305 and $1,562,940, respectively (cost $167,873,171 and $37,144,122, respectively)(Note 1) $ 168,570,783(1) $ 29,508,584(2) Cash 109 8,053 Receivable for investments sold 8,427,463 103,257 Dividend and interest receivable 1,343,808 665,852 Receivable from investment adviser -- 18,234 Prepaid expenses and other assets 56,825 16,356 ------------- ------------- Total Assets 178,398,988 30,320,336 ------------- ------------- LIABILITIES Advisory fee payable (Note 2) 31,277 -- Administrative services fee payable (Note 2) 17,574 7,346 Payable for investments purchased 26,225,821 18,775 Payable upon return of securities loaned (Note 1) 10,564,305 1,562,940 Unrealized depreciation on forward currency contracts (Note 1) 152,714 -- Payable for fund shares redeemed 93,213 91,144 Variation margin payable (Note 1) 12,890 -- Interest payable -- 7,445 Loan payable (Note 3) -- 1,872,000 Other accrued expenses payable 60,939 31,475 ------------- ------------- Total Liabilities 37,158,733 3,591,125 ------------- ------------- NET ASSETS Capital stock, $0.001 par value (Note 5) 9,895 2,604 Paid-in capital (Note 5) 174,639,676 78,302,509 Undistributed net investment income 1,753,149 1,231,598 Accumulated net realized loss from investments, futures transactions and foreign currency transactions (35,736,018) (45,171,962) Net unrealized appreciation (depreciation) from investments, futures transactions and foreign currency translations 573,553 (7,635,538) ------------- ------------- Net Assets $ 141,240,255 $ 26,729,211 ============= ============= Shares outstanding 9,895,369 2,604,020 ------------- ------------- Net asset value, offering price, and redemption price per share $ 14.27 $ 10.26 ============= =============
(1) Including $10,262,047 of securities on loan. (2) Including $1,511,263 of securities on loan. See Accompanying Notes to Financial Statements. 31 STATEMENTS OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 2003
FIXED HIGH INCOME FUND YIELD FUND ------------- ------------- INVESTMENT INCOME (Note 1) Dividends $ 85,587 $ 45,322 Interest 9,924,969 8,038,282 Securities lending 56,072 18,997 ------------- ------------- Total investment income 10,066,628 8,102,601 ------------- ------------- EXPENSES Investment advisory fees (Note 2) 814,838 522,534 Administrative services fees (Note 2) 179,575 99,291 Custodian fees 70,083 23,979 Legal fees 50,829 45,898 Printing fees (Note 2) 41,001 23,084 Audit fees 32,774 23,478 Registration fees 23,785 26,466 Insurance expense 17,921 9,924 Transfer agent fees 14,178 9,885 Directors' fees 11,537 11,515 Interest expense 8,840 19,199 Miscellaneous expense 11,827 6,272 ------------- ------------- Total expenses 1,277,188 821,525 Less: fees waived (Note 2) (299,383) (299,045) ------------- ------------- Net expenses 977,805 522,480 ------------- ------------- Net investment income 9,088,823 7,580,121 ------------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS, FUTURES CONTRACTS AND FOREIGN CURRENCY RELATED ITEMS Net realized loss from investments (5,819,574) (6,051,826) Net realized gain from futures contracts 1,276,230 -- Net realized gain from foreign currency transactions 423,714 -- Net change in unrealized appreciation (depreciation) from investments 14,090,439 11,745,307 Net change in unrealized appreciation (depreciation) from futures contracts 57,254 -- Net change in unrealized appreciation (depreciation) from foreign currency translations (152,715) -- ------------- ------------- Net realized and unrealized gain from investments, futures contracts and foreign currency related items 9,875,348 5,693,481 ------------- ------------- Net increase in net assets resulting from operations $ 18,964,171 $ 13,273,602 ============= =============
See Accompanying Notes to Financial Statements. 32 STATEMENTS OF CHANGES IN NET ASSETS
FIXED INCOME FUND HIGH YIELD FUND -------------------------------- ------------------------------- FOR THE YEAR ENDED AUGUST 31, FOR THE YEAR ENDED AUGUST 31, 2003 2002 2003 2002 -------------- -------------- ------------- ------------- FROM OPERATIONS Net investment income $ 9,088,823 $ 25,104,303 $ 7,580,121 $ 10,667,959 Net realized loss from investments, futures contracts and foreign currency transactions (4,119,630) (19,914,987) (6,051,826) (23,260,912) Net change in unrealized appreciation (depreciation) from investments, futures contracts and foreign currency translations 13,994,978 (20,405,640) 11,745,307 5,900,085 -------------- -------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations 18,964,171 (15,216,324) 13,273,602 (6,692,868) -------------- -------------- ------------- ------------- FROM DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income (13,658,022) (26,229,334) (9,351,559) (10,578,107) Distributions from net realized gains -- (13,093,545) -- -- -------------- -------------- ------------- ------------- Net decrease in net assets from dividends and distributions (13,658,022) (39,322,879) (9,351,559) (10,578,107) -------------- -------------- ------------- ------------- FROM CAPITAL SHARE TRANSACTIONS (Note 5) Proceeds from sale of shares 18,386,288 52,659,591 23,594,172 51,739,931 Reinvestment of dividends and distributions 13,267,833 38,737,562 3,822,498 8,243,070 Net asset value of shares redeemed (171,583,121) (293,621,793) (91,455,967) (53,873,881) -------------- -------------- ------------- ------------- Net increase (decrease) in net assets from capital share transactions (139,929,000) (202,224,640) (64,039,297) 6,109,120 -------------- -------------- ------------- ------------- Net decrease in net assets (134,622,851) (256,763,843) (60,117,254) (11,161,855) NET ASSETS Beginning of year 275,863,106 532,626,949 86,846,465 98,008,320 -------------- -------------- ------------- ------------- End of year $ 141,240,255 $ 275,863,106 $ 26,729,211 $ 86,846,465 ============== ============== ============= ============= UNDISTRIBUTED NET INVESTMENT INCOME $ 1,753,149 $ 5,128,511 $ 1,231,598 $ 2,345,554 ============== ============== ============= =============
See Accompanying Notes to Financial Statements. 33 CREDIT SUISSE INSTITUTIONAL FIXED INCOME FUND FINANCIAL HIGHLIGHTS (FOR AN INSTITUTIONAL CLASS SHARE OF THE FUND OUTSTANDING THROUGHOUT EACH YEAR)
FOR THE YEAR ENDED AUGUST 31, ----------------------------------------------------------------- 2003 2002(1) 2001 2000 1999 --------- --------- --------- --------- --------- PER SHARE DATA Net asset value, beginning of period $ 14.12 $ 15.79 $ 14.95 $ 15.01 $ 15.72 --------- --------- --------- --------- --------- INVESTMENT OPERATIONS Net investment income 0.67 0.83 1.02 0.94 0.93 Net gain (loss) on investments, future contracts and foreign currency related items (both realized and unrealized) 0.35 (1.27) 0.85 (0.01) (0.56) --------- --------- --------- --------- --------- Total from investment operations 1.02 (0.44) 1.87 0.93 0.37 --------- --------- --------- --------- --------- LESS DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income (0.87) (0.83) (1.03) (0.97) (0.91) Distributions from net realized gains -- (0.40) -- (0.02) (0.17) --------- --------- --------- --------- --------- Total dividends and distributions (0.87) (1.23) (1.03) (0.99) (1.08) --------- --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 14.27 $ 14.12 $ 15.79 $ 14.95 $ 15.01 ========= ========= ========= ========= ========= Total return(2) 7.40% (2.92)% 13.02% 6.43% 2.37% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 141,240 $ 275,863 $ 532,627 $ 440,345 $ 350,844 Ratio of expenses to average net assets 0.45%(3) 0.45%(3) 0.45%(3) 0.45%(3) 0.44% Ratio of net investment income to average net assets 4.18% 5.41% 6.71% 6.51% 5.90% Decrease reflected in above operating expense ratios due to waivers/reimbursements 0.14% 0.05% 0.06% 0.11% 0.18% Portfolio turnover rate 519% 526% 449% 520% 569%
---------- (1) As required, effective September 1, 2001, the Fund adopted the provisions of AICPA Audit and Accounting Guide for Investment Companies and began including paydown gains and losses in interest income. The effect of this change for the year ended August 31, 2002 was to increase net investment income per share by $0.01, decrease net realized and unrealized gains and losses per share by $0.01 and increase the ratio of net investment income to average net assets from 5.37% to 5.41%. Per share ratios and supplemental data for prior periods have not been restated to reflect this change. (2) Total returns are historical and assume changes in share price and reinvestment of all dividends and distributions. Had certain expenses not been reduced during the periods shown, total returns would have been lower. (3) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expense. These arrangements had no effect on the Fund's expense ratio. For the year ended August 31, 2003, there were no transfer agent credits. See Accompanying Notes to Financial Statements. 34 CREDIT SUISSE INSTITUTIONAL HIGH YIELD FUND FINANCIAL HIGHLIGHTS (FOR AN INSTITUTIONAL CLASS SHARE OF THE FUND OUTSTANDING THROUGHOUT EACH YEAR)
FOR THE YEAR ENDED AUGUST 31, ----------------------------------------------------------------- 2003 2002 2001 2000 1999 --------- --------- --------- --------- --------- PER SHARE DATA Net asset value, beginning of period $ 9.90 $ 11.84 $ 14.11 $ 15.32 $ 16.60 --------- --------- --------- --------- --------- INVESTMENT OPERATIONS Net investment income 1.14 1.17 1.40 1.41 1.42 Net gain (loss) on investments (both realized and unrealized) 0.41 (1.94) (2.21) (1.13) (1.33) --------- --------- --------- --------- --------- Total from investment operations 1.55 (0.77) (0.81) 0.28 0.09 --------- --------- --------- --------- --------- LESS DIVIDENDS Dividends from net investment income (1.19) (1.17) (1.46) (1.49) (1.37) --------- --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 10.26 $ 9.90 $ 11.84 $ 14.11 $ 15.32 ========= ========= ========= ========= ========= Total return(1) 16.96% (6.88)% (5.71)% 1.84% 0.67% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 26,729 $ 86,846 $ 98,008 $ 94,333 $ 95,129 Ratio of expenses to average net assets 0.70%(2) 0.70%(2) 0.70%(2) 0.70%(2) 0.69% Ratio of net investment income to average net assets 10.15% 10.15%(3) 11.06% 9.59% 9.10% Decrease reflected in above operating expense ratios due to waivers/reimbursements 0.40% 0.27% 0.30% 0.45% 0.35% Portfolio turnover rate 56% 52% 20% 31% 40%
---------- (1) Total returns are historical and assume changes in share price and reinvestment of all dividends and distributions. Had certain expenses not been reduced during the periods shown, total returns would have been lower. (2) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expense. These arrangements had no effect on the Fund's expense ratio. For the year ended August 31, 2003, there were no transfer agent credits. (3) During the year ended August 31, 2002, the Fund experienced an increase in its interest income of 0.67% as a result of additional accretion income not accrued for in prior periods. The Fund's net investment income ratio disclosed above excludes the effect of the increase. See Accompanying Notes to Financial Statements. 35 CREDIT SUISSE INSTITUTIONAL FUNDS NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Credit Suisse Institutional Funds are non-diversified, open-end management investment companies registered under the Investment Company Act of 1940, as amended, and are currently comprised of Credit Suisse Institutional Fixed Income Fund ("Fixed Income"), and Credit Suisse Institutional High Yield Fund ("High Yield") (each, a "Fund" and collectively, the "Funds"). Each Fund was incorporated under the laws of the State of Maryland on July 31, 1998. Fixed Income and High Yield seek high total return as their investment objective. Fixed Income and High Yield are each authorized to offer three classes of shares, Common Class, Advisor Class and Institutional Class shares, although each Fund currently offers only Institutional Class shares. A) SECURITY VALUATION -- The net asset value of each Fund is determined daily as of the close of regular trading on the New York Stock Exchange, Inc. (the "Exchange") on each day the Exchange is open for business. Debt securities with a remaining maturity greater than 60 days are valued in accordance with the price supplied by a pricing service, which may use a matrix, formula or other objective method that takes into consideration market indices, yield curves and other specific adjustments. Each Fund's equity investments are valued at market value, which is generally determined using the closing price on the exchange or market on which the security is primarily traded at the time of valuation (the "Valuation Time"). If no sales are reported, equity investments are generally valued at the most recent bid quotation as of the Valuation Time or at the lowest asked quotation in the case of a short sale of securities. Securities and other assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Board of Directors under procedures established by the Board of Directors in the absence of readily ascertainable market values. Debt obligations that will mature in 60 days or less are valued on the basis of amortized cost, which approximates market value, unless it is determined that this method would not represent fair value. B) FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Funds are maintained in U.S. dollars. Transactions denominated in foreign currencies are recorded at the current prevailing exchange rates. All assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the current exchange rate at the end of the period. Translation gains or losses resulting from changes in the exchange rate during the reporting period and realized gains and losses on the settlement of foreign currency transactions are reported in the results of operations for the current period. The Funds do not isolate that portion of realized gains and losses on investments in equity securities which is due to changes in the foreign exchange rate from that which is due to changes in market prices of equity securities. The Funds isolate that portion of realized gains and losses on investments in debt securities which is due to changes in the foreign exchange rate from that which is due to changes in market prices of debt securities. C) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on a trade date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared and paid quarterly. Distributions of net realized capital gains, if any, are declared and paid at least annually. However, to the extent that a net realized capital gain can be reduced by a capital loss carryforward, such gain will not be distributed. Income and capital gain distributions are determined in accordance with federal income tax regulations which may differ from accounting principles generally accepted in the United States of America ("GAAP"). E) FEDERAL INCOME TAXES -- No provision is made for federal taxes as it is each Fund's intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders, which will be sufficient to relieve it from federal income and excise taxes. 36 F) USE OF ESTIMATES -- The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. G) SHORT-TERM INVESTMENTS -- The Funds, together with other funds/portfolios advised by Credit Suisse Asset Management, LLC ("CSAM"), an indirect, wholly-owned subsidiary of Credit Suisse Group, pool available cash into either a short-term variable rate time deposit issued by State Street Bank and Trust Company ("SSB"), the Funds' custodian, or a money market fund advised by CSAM. The short-term time deposit issued by SSB is a variable rate account classified as a short-term investment. H) FORWARD FOREIGN CURRENCY CONTRACTS -- Each Fund may enter into forward foreign currency contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. Risks may arise upon entering into 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. Each Fund will enter into forward foreign currency contracts primarily for hedging purposes. Forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until the contract settlement date or an offsetting position is entered into. At August 31, 2003, Fixed Income had the following open forward foreign currency contracts:
FOREIGN EXPIRATION CURRENCY TO BE CONTRACT CONTRACT UNREALIZED FORWARD FOREIGN CURRENCY CONTRACT DATE PURCHASED/(SOLD) AMOUNT VALUE GAIN (LOSS) --------------------------------- ---------- ---------------- ------------- ------------ ----------- Canadian Dollar 9/5/03 C$ 4,300,000 $ 3,123,684 $ 3,103,892 $ (19,792) Canadian Dollar 9/5/03 C$ (1,900,000) (1,347,231) (1,371,487) (24,256) Canadian Dollar 9/5/03 C$ (2,400,000) (1,729,493) (1,732,405) (2,912) European Economic Unit 9/5/03 EURO 1,300,000 1,524,666 1,428,877 (95,789) European Economic Unit 9/5/03 EURO 230,000 263,833 252,801 (11,032) European Economic Unit 9/5/03 EURO 608,000 697,437 668,275 (29,162) European Economic Unit 9/5/03 EURO 246,000 279,948 270,388 (9,560) European Economic Unit 9/5/03 EURO (661,000) (748,219) (726,529) 21,690 European Economic Unit 9/5/03 EURO (639,000) (722,358) (702,348) 20,010 European Economic Unit 9/5/03 EURO (230,000) (261,280) (252,801) 8,479 European Economic Unit 9/5/03 EURO (854,000) (928,272) (938,663) (10,391) ------------- ------------ ---------- $ 152,715 $ -- $ (152,715) ============= ============ ==========
I) TBA PURCHASE COMMITMENTS -- Each Fund may enter into "TBA" (to be announced) purchase commitments to purchase securities for a fixed price at a future date, typically not exceeding 45 days. TBA purchase commitments may be considered securities in themselves, and involve a risk of loss if the value of the security to be purchased declines prior to settlement date. This risk is in addition to the risk of decline in the Fund's other assets. Unsettled TBA purchase commitments are valued at the current market value of the underlying securities, according to the procedures described under "Security Valuation" above. J) FUTURES -- Each Fund may enter into futures contracts to the extent permitted by its investment policies and objectives. Upon entering into a futures contract, each Fund is required to deposit cash or pledge U.S. Government securities as initial margin. Subsequent payments, which are dependent on the daily fluctuations in the value of the underlying instrument, are made or received by the Fund each day (daily variation margin) and are recorded as unrealized gains or losses until the contracts are closed. When the contracts are closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transactions and the Fund's basis in the contract. Risks of entering into futures contracts for hedging purposes include the possibility that a change in the value of the contract may not correlate with the changes in the value of the underlying instruments. 37 In addition, the purchase of a futures contract involves the risk that the Fund could lose more than the original margin deposit and subsequent payments required for a futures transaction. At August 31, 2003, Fixed Income had the following open futures contracts:
UNREALIZED FUTURES NUMBER OF EXPIRATION CONTRACT CONTRACT APPRECIATION/ CONTRACTS CONTRACTS DATE AMOUNT VALUE (DEPRECIATION) ---------- --------- ---------- --------------- --------------- --------------- US Treasury Bond Futures 37 12/19/03 $ 3,881,753 $ 3,922,000 $ 40,247 US Treasury 2 Year Notes Futures 75 12/29/03 15,962,466 15,978,516 16,050 --------------- --------------- --------------- 19,844,219 19,900,516 56,297 --------------- --------------- --------------- US Treasury 10 Year Notes Futures (25) 12/19/03 (2,722,897) (2,742,969) (20,072) US Treasury 5 Year Notes Futures (14) 12/19/03 (1,530,400) (1,538,031) (7,631) --------------- --------------- --------------- (4,253,297) (4,281,000) (27,703) --------------- --------------- --------------- $ 15,590,922 $ 15,619,516 $ 28,594 =============== =============== ===============
K) SECURITIES LENDING -- Loans of securities are required at all times to be secured by collateral at least equal to 102% of the market value of domestic securities on loan including any accrued interest thereon and 105% of the market value of foreign securities on loan including any accrued interest thereon. Cash collateral received by each Fund in connection with securities lending activity may be invested in a variety of investments, including certain CSAM-advised funds or the AIM Institutional Funds-Liquid Asset Portfolio. However, in the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. The market value of securities on loan to brokers and the value of collateral held by each Fund with respect to such loans at August 31, 2003 are as follows:
MARKET VALUE OF VALUE OF FUND SECURITIES LOANED COLLATERAL RECEIVED ---- ----------------- -------------------- Fixed Income $ 10,262,047 $ 10,564,305 High Yield 1,511,263 1,562,940
Credit Suisse First Boston ("CSFB"), an affiliate of CSAM, has been engaged by the Funds to act as each Fund's securities lending agent. Prior to April 1, 2003, CSFB had agreed to charge the Funds fees for its securities lending activities equal to its costs in providing services as securities lending agent and had voluntarily waived such fees through March 31, 2003. Effective April 1, 2003, the Funds and CSFB entered into an arrangement to share the income earned from securities lending activities, whereby, generally, the Funds will receive 75% and CSFB will receive 25% of the income, in accordance with the provisions of the securities lending agency agreement. If CSFB should enter into a securities lending agency agreement with another comparable investment company client under which it will receive a smaller proportion of the fees, its fee agreement with the Funds shall be reduced to such lower fee amount. L) OTHER -- Lower-rated debt securities (commonly known as "junk bonds") possess speculative characteristics and are subject to greater market fluctuations and risk of lost income and principal than higher-rated debt securities for a variety of reasons. Also, during an economic downturn or substantial period of rising interest rates, highly leveraged issuers may experience financial stress which would adversely affect their ability to service their principal and interest payment obligations, to meet projected business goals and to obtain additional financing. In addition, periods of economic uncertainty and changes can be expected to result in increased volatility of market prices of lower-rated debt securities and (to the extent a Fund invests in junk bonds) each Fund's net asset value. The Funds may invest in securities of foreign countries and governments which involve certain risks in addition to those inherent in domestic investments. Such risks generally include, among others, currency risks (fluctuations in currency exchange rates), information risk (key information may be inaccurate or unavailable) and political risk (expropriation, nationalization or the imposition of capital or currency controls or punitive taxes). Other risks of investing in foreign securities include liquidity and valuation risks. 38 The Funds may be subject to taxes imposed by countries in which they invest, with respect to their investments in issuers existing or operating in such countries. Such taxes are generally based on income earned or repatriated and capital gains realized on the sale of such investments. The Funds accrue such taxes when the related income or gains are earned. NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES CSAM serves as investment adviser for each Fund. For its investment advisory services, CSAM is entitled to receive a fee from each Fund based on the following fee schedule:
FUND ANNUAL RATE ---------------------------- ---------------------------------- Fixed Income 0.375% of average daily net assets High Yield 0.70% of average daily net assets
For the year ended August 31, 2003, investment advisory fees earned and voluntarily waived for each Fund were as follows:
GROSS NET ADVISORY ADVISORY FUND FEE WAIVER FEE ---------------------------- --------- ----------- ---------- Fixed Income $ 814,838 $ (299,383) $ 515,455 High Yield 522,534 (299,045) 223,489
During the period covered by this report, CSAM determined that the Funds' advisory contract had lapsed due to an administrative error. CSAM has taken all necessary steps to remedy this error, including obtaining Board of Directors and shareholder approval of retention or payment of fees paid or payable to CSAM during the period the contract had lapsed and approval of a new contract on the same terms as in the lapsed contract. Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate of CSAM, and SSB serve as co-administrators to the Funds. No compensation is payable by the Funds to CSAMSI for co-administrative services. For its co-administrative services, SSB receives a fee, exclusive of out-of-pocket expenses, based upon the following fee schedule calculated in total for all the Credit Suisse funds/portfolios co-administered by SSB and allocated based upon relative average net assets of each fund/portfolio, subject to an annual minimum fee.
AVERAGE DAILY NET ASSETS ANNUAL RATE ---------------------------- ---------------------------------- First $5 billion 0.050% of average daily net assets Next $5 billion 0.035% of average daily net assets Over $10 billion 0.020% of average daily net assets
For the year ended August 31, 2003, co-administrative service fees earned by SSB (including out-of-pocket expenses) were as follows:
FUND CO-ADMINISTRATION FEE ---------------------------- --------------------- Fixed Income $ 179,575 High Yield 99,291
In addition to serving as each Fund's co-administrator, CSAMSI currently serves as distributor of each Fund's shares without compensation. For the year ended August 31, 2003, CSFB received fees for its securities lending activities as follows:
FUND AMOUNT ---------------------------- ------- Fixed Income $ 9,155 High Yield 2,230
39 Merrill Corporation ("Merrill"), an affiliate of CSAM, has been engaged by the Funds to provide certain financial printing and fulfillment services. For the year ended August 31, 2003, Merrill was paid for its services to the Funds as follows:
FUND AMOUNT ---------------------------- -------- Fixed Income $ 13,212 High Yield 13,212
NOTE 3. LINE OF CREDIT The Funds, together with other funds/portfolios advised by CSAM (collectively, the "Participating Funds"), participate in a $100 million committed, unsecured line of credit facility ("Credit Facility") for temporary or emergency purposes with Deutsche Bank, A.G. as administrative agent and syndication agent and SSB as operations agent. Under the terms of the Credit Facility, the Participating Funds pay an aggregate commitment fee at a rate of 0.10% per annum on the average unused amount of the Credit Facility, which is allocated among the Participating Funds in such manner as is determined by the governing Boards of the Participating Funds. In addition, the Participating Funds pay interest on borrowings at the Federal Funds rate plus 0.50%. At August 31, 2003, High Yield had a loan outstanding under the Credit Facility of $1,852,000. During the year ended August 31, 2003, the Funds had borrowings under the Credit Facility as follows:
WEIGHTED AVERAGE MAXIMUM AVERAGE DAILY INTEREST DAILY LOAN FUND LOAN BALANCE RATE % OUTSTANDING ---------------- ------------- --------- ------------ Fixed Income $ 1,735,000 1.624% $ 1,770,000 High Yield 3,054,793 1.712% 9,162,000
NOTE 4. PURCHASES AND SALES OF SECURITIES For the year ended August 31, 2003, purchases and sales of investment securities (excluding short-term investments) and U.S. Government and Agency Obligations were as follows:
INVESTMENTS U.S. GOVERNMENT AND AGENCY OBLIGATIONS --------------------------------------- --------------------------------------- FUND PURCHASES SALES PURCHASES SALES ------------- ------------------ ------------------ ------------------ ------------------ Fixed Income $ 1,118,245,742 $ 1,231,866,053 $ 926,028,025 $ 1,112,023,491 High Yield 39,573,633 101,700,938 -- --
In connection with a review of the Funds, CSAM has become aware of certain portfolio transactions that CSAM has determined to examine further. Presently, CSAM does not believe that any improprieties occurred in connection with these transactions. If CSAM's further examination reveals that amounts should be paid to the Funds, CSAM will make the appropriate payments with interest. Presently, CSAM does not anticipate that any such payments will have a material effect on either Fund's net asset value per share as of August 31, 2003. 40 NOTE 5. CAPITAL SHARE TRANSACTIONS Fixed Income and High Yield are each authorized to issue three billion full and fractional shares of capital stock, $.001 par value per share. Transactions in capital shares for each Fund were as follows:
FIXED INCOME HIGH YIELD ---------------------------------------- ----------------------------------------- INSTITUTIONAL CLASS INSTITUTIONAL CLASS ---------------------------------------- ----------------------------------------- FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED AUGUST 31, 2003 AUGUST 31, 2002 AUGUST 31, 2003 AUGUST 31, 2002 ------------------ ------------------ ------------------ ------------------ Shares sold 1,281,297 3,512,892 2,400,294 4,709,817 Shares issued in reinvestment of dividends and distributions 936,435 2,624,602 396,530 766,978 Shares redeemed (11,864,210) (20,325,988) (8,965,487) (4,982,604) ----------- ----------- ---------- ---------- Net increase (decrease) (9,646,478) (14,188,494) (6,168,663) 494,191 =========== =========== ========== ==========
On August 31, 2003, the number of shareholders that held 5% or more of the outstanding shares of each Fund was as follows:
NUMBER OF APPROXIMATE PERCENTAGE FUND SHAREHOLDERS OF OUTSTANDING SHARES ------------ ------------ ---------------------- Fixed Income 3 85% High Yield 3 71%
Some of the shareholders are omnibus accounts, which hold shares on behalf of several individual shareholders. NOTE 6. FEDERAL INCOME TAXES Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments of foreign currency transactions, losses deferred due to wash sales, Post-October losses and paydowns. The tax character of dividends and distributions paid during the year ended August 31, 2003 and 2002 were as follows:
ORDINARY INCOME LONG-TERM CAPITAL GAIN ---------------------------------- ---------------------------------- FUND 2003 2002 2003 2002 ---- --------------- --------------- --------------- --------------- Fixed Income $ 13,658,022 $ 37,144,329 $ -- $ 2,178,550 High Yield 9,351,559 10,578,107 -- --
At August 31, 2003, the components of distributable earnings on a tax basis were as follows:
FIXED INCOME HIGH YIELD ---------------- --------------- Undistributed ordinary income $ 1,869,486 $ 1,987,202 Accumulated net realized loss (35,788,313) (40,058,979) Unrealized appreciation/(depreciation) 563,548 (8,398,323) Undistributed Capital-Other (54,037) (5,105,802) ---------------- --------------- $ (33,409,316) $ (51,575,902) ================ ===============
At August 31, 2003, the Funds had capital loss carryforwards available to offset possible future capital gains as follows:
EXPIRES AUGUST 31, -------------------------------------------------------------------------------------------- FUND 2005 2007 2008 2010 2011 ---- --------------- --------------- --------------- --------------- ---------------- Fixed Income $ -- $ -- $ -- $ -- $ 35,788,313 High Yield 3,354,749 341,638 1,857,162 9,989,083 24,516,347
41 Under current tax law, certain capital losses realized after October 31 within a taxable year may be deferred and treated as occurring on the first day of the following tax year. The Fund will be unable to realize the benefit from these losses if it cannot realize gains on investments prior to the expiration of the loss carryforwards. For the tax year ended August 31, 2003, the Funds elected to defer net losses arising between November 1, 2002 and August 31, 2003 as follows:
FUND AMOUNT ------------------- -------------- Fixed Income $ 54,037 High Yield 5,105,802
As of August 31, 2003, the identified cost for federal income tax purposes, as well as the gross unrealized appreciation from investments for those securities having an excess of value over cost, gross unrealized depreciation from investments for those securities having an excess of cost over value and the net unrealized appreciation (depreciation) from investments were as follows:
NET UNREALIZED GROSS UNREALIZED GROSS UNREALIZED APPRECIATION/ FUND IDENTIFIED COST APPRECIATION (DEPRECIATION) (DEPRECIATION) ----------------- --------------- ---------------- ---------------- --------------- Fixed Income $ 168,007,296 $ 2,869,391 $ (2,305,903) $ 563,488 High Yield 37,906,907 1,347,184 (9,745,507) (8,398,323)
At August 31, 2003, accumulated undistributed net investment income, accumulated net realized gain (loss) from investments and paid-in capital have been adjusted for current period permanent book/tax differences, which arose principally from differing book/tax treatments of paydowns, defaulted bonds and forward foreign currency contracts. Net assets were not affected by these reclassifications:
INCREASE (DECREASE) ----------------------------------------------------- ACCUMULATED NET REALIZED GAIN PAID-IN UNDISTRIBUTED NET (LOSS) ON FUND CAPITAL INVESTMENT INCOME INVESTMENTS ------------ --------------- ----------------- --------------- Fixed Income $ -- $ 1,193,837 $ (1,193,837) High Yield (4,986,021) 657,482 4,328,539
42 CREDIT SUISSE INSTITUTIONAL FUNDS REPORT OF INDEPENDENT AUDITORS To the Board of Directors and Shareholders of Credit Suisse Institutional Fixed Income Fund, Inc.; Credit Suisse Institutional High Yield Fund, Inc. In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Credit Suisse Institutional Fixed Income Fund, Inc. and Credit Suisse Institutional High Yield Fund, Inc., (collectively referred to as the "Funds") at August 31, 2003, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Philadelphia, Pennsylvania October 30, 2003 43 CREDIT SUISSE INSTITUTIONAL FIXED INCOME FUND SHAREHOLDER MEETING RESULTS (UNAUDITED) A special meeting of shareholders of the Credit Suisse Institutional Fixed Income Fund (the "Fund") was held at 466 Lexington Avenue, 16th Floor, New York, NY 10017 on April 11, 2003 adjourned to May 2, 2003 and May 16, 2003. The following matters were voted upon by the shareholders of the Fund and the results are presented below. Shares delivered not voted are included in the total for the proposals. Shareholders approved proposals 1, 2-A and 2-B but did not approve the remaining proposals. 1. To Elect the Following Nominees as Directors:
FOR WITHHELD --------------- --------------- Richard H. Francis 9,706,633 1,082,660 Jack W. Fritz 9,705,977 1,083,316 Joseph D. Gallagher 9,705,589 1,083,704 Jeffrey E. Garten 9,712,952 1,076,341 Peter F. Krogh 9,712,952 1,076,341 James S. Pasman, Jr. 9,705,977 1,083,316 Steven N. Rappaport 9,706,633 1,082,660 William W. Priest 9,706,633 1,082,660 Total Eligible Shares 15,839,480 Total Shares Voted 10,789,293 % of Shares Voted 68.12%
2-A. To Approve a New Investment Advisory Agreement:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 9,520,745 60.11% 88.24% Against 30,480 0.19% 0.28% Abstain 1,238,068 7.82% 11.48%
2-B. To Approve the Retention or payment of Fees Paid or payable to CSAM:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 9,490,017 59.91% 87.96% Against 126,042 0.80% 1.17% Abstain 1,173,234 7.41% 10.87%
3-A. To Modify the Fundamental Investment Restriction on Borrowing Money:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 4,801,563 30.31% 39.85% Against 6,036,222 38.11% 50.09% Abstain 1,207,235 7.62% 10.02% Broker Non-votes 4,565 0.03% 0.04%
3-B. To Modify the Fundamental Investment Restriction on Lending:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 4,915,343 31.03% 40.79% Against 5,998,760 37.87% 49.78% Abstain 1,130,917 7.14% 9.39% Broker Non-votes 4,565 0.03% 0.04%
44 3-C. To Modify the Fundamental Investment Restriction on Real Estate Investments:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 4,914,334 31.03% 40.78% Against 5,928,622 37.43% 49.20% Abstain 1,202,064 7.59% 9.98% Broker Non-votes 4,565 0.03% 0.04%
3-D To Remove the Fundamental Investment Restriction on Pledging Assets:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 4,908,728 30.99% 40.74% Against 5,926,843 37.42% 49.19% Abstain 1,209,449 7.64% 10.03% Broker Non-votes 4,565 0.03% 0.04%
4. To Change the Fund's Investment Objective from Fundamental to Non-Fundamental:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 4,898,334 30.93% 40.65% Against 5,940,771 37.51% 49.30% Abstain 1,205,915 7.61% 10.01% Broker Non-votes 4,565 0.03% 0.04%
5. To Amend the Charter Document to Allow Involuntary Redemptions:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 4,921,431 31.07% 40.84% Against 5,903,738 37.27% 49.00% Abstain 1,219,851 7.70% 10.12% Broker Non-votes 4,565 0.03% 0.04%
45 CREDIT SUISSE INSTITUTIONAL HIGH YIELD FUND SHAREHOLDER MEETING RESULTS (UNAUDITED) A special meeting of shareholders of the Credit Suisse Institutional High Yield Fund (the "Fund") was held at 466 Lexington Avenue, 16th Floor, New York, NY 10017 on April 11, 2003. The following matters were voted upon by the shareholders of the Fund and the results are presented below. Shares delivered not voted are included in the total for the proposals. All proposals were approved. 1. To Elect the Following Nominees as Directors:
FOR WITHHELD --------------- ------------ Richard H. Francis 6,755,244 6,894 Jack W. Fritz 6,755,244 6,894 Joseph D. Gallagher 6,740,564 21,574 Jeffrey E. Garten 6,754,920 7,218 Peter F. Krogh 6,755,500 6,638 James S. Pasman, Jr. 6,755,133 7,005 Steven N. Rappaport 6,753,394 8,744 William W. Priest 6,733,401 28,737 Total Eligible Shares 8,322,032 Total Shares Voted 6,762,137 % of Shares Voted 81.26%
2-A. To Approve a New Investment Advisory Agreement:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 6,739,691 80.99% 99.67% Against 14,789 0.18% 0.22% Abstain 7,657 0.09% 0.11%
2-B. To Approve the Retention or payment of Fees Paid or payable to CSAM:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 6,688,716 80.37% 98.91% Against 64,892 0.78% 0.96% Abstain 8,529 0.10% 0.13%
3-A. To Modify the Fundamental Investment Restriction on Borrowing Money:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 6,029,198 72.45% 89.16% Against 31,200 0.38% 0.46% Abstain 17,523 0.21% 0.26% Broker Non-votes 684,216 8.22% 10.12%
3-B. To Modify the Fundamental Investment Restriction on Lending:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 6,030,426 72.46% 89.18% Against 29,972 0.36% 0.44% Abstain 17,523 0.21% 0.26% Broker Non-votes 684,216 8.22% 10.12%
46 3-C. To Modify the Fundamental Investment Restriction on Real Estate Investments:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 6,045,446 72.64% 89.40% Against 25,485 0.31% 0.38% Abstain 6,990 0.08% 0.10% Broker Non-votes 684,216 8.22% 10.12%
3-D. To Remove the Fundamental Investment Restriction on Pledging Assets:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 6,047,182 72.67% 89.42% Against 23,527 0.28% 0.35% Abstain 7,212 0.09% 0.11% Broker Non-votes 684,216 8.22% 10.12%
4. To Change the Fund's Investment Objective from Fundamental to Non-Fundamental:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 5,286,829 63.53% 78.18% Against 778,404 9.35% 11.51% Abstain 12,689 0.15% 0.19% Broker Non-votes 684,216 8.22% 10.12%
5. To Amend the Charter Document on Involuntary Redemptions:
% OF TOTAL SHARES % OF TOTAL SHARES OUTSTANDING SHARES VOTED ------------- ----------------- --------------- For 5,315,605 63.87% 78.61% Against 749,240 9.00% 11.08% Abstain 13,076 0.16% 0.19% Broker Non-votes 684,216 8.22% 10.12%
47 CREDIT SUISSE INSTITUTIONAL FUNDS INFORMATION CONCERNING DIRECTORS AND OFFICERS (UNAUDITED)
TERM NUMBER OF OF OFFICE(1) PORTFOLIOS IN AND FUND POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS DATE OF BIRTH FUND SERVED PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR ----------------- ----------- ------------ -------------------- ------------- ---------------- INDEPENDENT DIRECTORS Richard H. Francis Director, Since Currently retired 44 None c/o Credit Suisse Asset Nominating and 1999 Management, LLC Audit 466 Lexington Avenue Committee New York, New York Member 10017-3140 Date of Birth: 04/23/32 Jack W. Fritz Director, Since Private investor; 43 Director of 2425 North Fish Creek Road Nominating and 1998 Consultant and Advo, Inc. P.O. Box 1287 Audit Director of Fritz (direct mail Wilson, Wyoming 83014 Committee Broadcasting, Inc. advertising) Member and Fritz Date of Birth: 04/22/27 Communications (developers and operators of radio stations) (1987 - present) Jeffrey E. Garten Director, Since Dean of Yale 43 Director of Box 208200 Nominating and 1998 School of Aetna, Inc.; New Haven, Connecticut Audit Management and Director of 06520-8200 Committee William S. Beinecke Calpine Member Professor in the Corporation; Date of Birth: 10/29/46 Practice of Director of International CarMax Group Trade and Finance (used car (11/95 - present) dealers)
---------- (1) Each Director and Officer serves until his or her respective successor has been duly elected and qualified. 48
TERM NUMBER OF OF OFFICE(1) PORTFOLIOS IN AND FUND POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS DATE OF BIRTH FUND SERVED PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR ----------------- ----------- ------------ -------------------- ------------- ---------------- INDEPENDENT DIRECTORS--(CONTINUED) Peter F. Krogh Director, Since Dean Emeritus and 43 Director 301 ICC Nominating 2001 Distinguished of Carlisle Georgetown University and Audit Professor of Companies Washington, DC 20057 Committee International Affairs Incorporated Member at the Edmund A. (diversified Date of Birth: 02/11/37 Walsh School of manufacturing Foreign Service, company); Georgetown Member of University (6/95 - Selection present); Moderator Committee of PBS foreign affairs for Truman television series Scholars and (1988 - 2000) Henry Luce Scholars; Senior Associate of Center for Strategic and International Studies; Trustee of numerous world affairs organizations James S. Pasman, Jr. Director, Since Currently retired 45 Director of c/o Credit Suisse Asset Nominating 1999 Education Management, LLC and Audit Management 466 Lexington Avenue Committee Corp. New York, New York Member 10017-3140 Date of Birth: 12/20/30
49
TERM NUMBER OF OF OFFICE(1) PORTFOLIOS IN AND FUND POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS DATE OF BIRTH FUND SERVED PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR ----------------- ----------- ------------ -------------------- ------------- ---------------- INDEPENDENT DIRECTORS--(CONTINUED) Steven N. Rappaport Director, Since Partner of Lehigh Court, 45 None Lehigh Court, LLC Nominating 1999 LLC and RZ Capital 40 East 52nd Street Committee (private investment New York, New York Member and firms) (7/02 - present); 10022 Audit Consultant to SunGard Committee Securities Finance, Inc. Date of Birth: 07/10/48 Chairman from February 2002 to July 2002; President of SunGard Securities Finance, Inc. from 2001 to February 2002; President of Loanet, Inc. (on-line accounting service) from 1997 to 2001 INTERESTED DIRECTORS Joseph D. Gallagher(2) Director, Since Managing Director 46 None Credit Suisse Asset Chairman of 2003 and Chief Executive Management, LLC the Board and Officer of CSAM 466 Lexington Avenue Chief Executive since 2003; New York, New York Officer Chief Executive 10017-3140 Officer and Director of Credit Suisse Date of Birth: 12/14/62 Asset Management Limited, London, England, from June 2000 to 2003; Director of Credit Suisse Asset Management Funds (UK) Limited, London, England, from June 2000 to 2003; Managing Director, Head -- Asian Corporate Finance and M&A's, Credit Suisse First Boston, Hong Kong, China, from January 1998 to May 1999
---------- (2) Mr. Gallagher is a Director who is an "interested person" of the Fund as defined in the 1940 Act, because he is an officer of CSAM. 50
TERM NUMBER OF OF OFFICE(1) PORTFOLIOS IN AND FUND POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS DATE OF BIRTH FUND SERVED PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR ----------------- ----------- ------------ -------------------- ------------- ---------------- INTERESTED DIRECTORS--(CONTINUED) William W. Priest(3) Director Since Co-managing Partner, 50 None Steinberg Priest & Sloane 1999 Steinberg Priest & Capital Management Sloane Capital 12 East 49th Street Management since 12th Floor March 2001; New York, New York Chairman and Managing 10017 Director of CSAM from 2000 to Date of Birth: 09/24/41 February 2001, Chief Executive Officer and Managing Director of CSAM from 1990 to 2000
---------- (3) Mr. Priest is a Director who is an "interested person" of the Fund as defined in the 1940 Act, because he provided consulting services to CSAM within the last two years (ended 12/31/02). 51
TERM OF OFFICE(1) AND POSITION(S) LENGTH NAME, ADDRESS AND HELD WITH OF TIME DATE OF BIRTH FUND SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS ----------------- ----------- ------------ ---------------------------------------------- OFFICERS Hal Liebes Vice President Since Managing Director and Global General Counsel Credit Suisse Asset and Secretary 1999 of CSAM; Associated with CSAM since 1997; Management, LLC Officer of other Credit Suisse Funds 466 Lexington Avenue New York, New York 10017-3140 Date of Birth: 07/06/64 Michael A. Pignataro Chief Financial Since Director and Director of Fund Administration Credit Suisse Asset Officer and 1999 of CSAM; Associated with CSAM since 1984; Management, LLC Treasurer Officer of other Credit Suisse Funds 466 Lexington Avenue New York, New York 10017-3140 Date of Birth: 11/15/59 Gregory N. Bressler Assistant Since Director and Deputy General Counsel of CSAM; Credit Suisse Asset Secretary 2000 Associated with CSAM since January 2000; Management, LLC Associated with the law firm of Swidler Berlin 466 Lexington Avenue Shereff Friedman LLP from 1996 to 2000; New York, New York Officer of other Credit Suisse Funds 10017-3140 Date of Birth: 11/17/66
52
TERM OF OFFICE(1) AND POSITION(S) LENGTH NAME, ADDRESS AND HELD WITH OF TIME DATE OF BIRTH FUND SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS ----------------- ----------- ------------ ---------------------------------------------- OFFICERS--(CONTINUED) Rocco A. Del Guercio Assistant Since Vice President and Administrative Officer of CSAM; Credit Suisse Asset Treasurer 1999 Associated with CSAM since June 1996; Management, LLC Officer of other Credit Suisse Funds 466 Lexington Avenue New York, New York 10017-3140 Date of Birth: 04/28/63 Joseph Parascondola Assistant Since Assistant Vice President of CSAM; Associated with Credit Suisse Asset Treasurer 2000 CSAM since April 2000; Assistant Vice President, Management, LLC Deutsche Asset Management from January 1999 to 466 Lexington Avenue April 2000; Assistant Vice President, New York, New York Weiss, Peck & Greer LLC from November 1995 to 10017-3140 December 1998; Officer of other Credit Suisse Funds Date of Birth: 06/05/63 Robert M. Rizza Assistant Since Assistant Vice President of CSAM since January 2001; Credit Suisse Asset Treasurer 2002 Associated with CSAM since 1998; Management, LLC Officer of other Credit Suisse Funds 466 Lexington Avenue New York, New York 10017-3140 Date of Birth: 12/09/65
The Statement of Additional Information includes additional information about the Directors and is available, without charge, upon request, by calling 800-222-8977. 53 CREDIT SUISSE INSTITUTIONAL FUNDS TAX INFORMATION LETTER (UNAUDITED) AUGUST 31, 2003 IMPORTANT TAX INFORMATION FOR CORPORATE SHAREHOLDERS Corporate shareholders should note for the year ended August 31, 2003, the percentage of the Fixed Income Fund's investment income (I.E., net investment income plus short-term capital gains) that qualified for the intercorporate dividends received deduction are as follows:
FUND PERCENTAGE ----------------------- ---------- Fixed Income 0.79% High Yield 0.37%
For the fiscal year ended August 31, 2003 certain dividends paid by each Fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Complete information will be reported in conjunction with your 2003 Form 1099-DIV. 54 (This page has been left blank intentionally.) P.O. Box 8500, Boston, MA 02266-8500 800-222-8977 CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. CSIUS-2-0803 ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics applicable to its Chief Executive Officer, President, Chief Financial Officer and Chief Accounting Officer, or persons performing similar functions. A copy of the code is filed as Exhibit 10(a)(1) to this Form. There were no amendments to the code during the fiscal year ended August 31, 2003. There were no waivers or implicit waivers from the code granted by the registrant during the fiscal year ended August 31, 2003. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's governing board has determined that it has three audit committee financial experts serving on its audit committee: Richard H. Francis, James S. Pasman, Jr., and Steven N. Rappaport. Each audit committee financial expert is "independent" for purposes of this item. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Form N-CSR disclosure requirement is not yet effective with respect to the Registrant. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to the Registrant. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to the Registrant. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) As of a date within 90 days from the filing date of this report, the principal executive officer and principal financial officer concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) were effective based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. (b) There were no changes in registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the registrant's second fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 10. EXHIBITS. (a)(1) The registrant's code of ethics is an exhibit to this report. (a)(2) The certifications of the registrant as required by Rule 30a-2(a) under the Act are exhibits to this report. (b) The certifications of the registrant as required by Rule 30a-2(b) under the Act are an exhibit to this report. 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. CREDIT SUISSE INSTITUTIONAL FIXED INCOME FUND, INC. /s/ Joseph D. Gallagher ----------------------- Name: Joseph D. Gallagher Title: Chief Executive Officer Date: November 10, 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. /s/ Joseph D. Gallagher ----------------------- Name: Joseph D. Gallagher Title: Chief Executive Officer Date: November 10, 2003 /s/ Michael A. Pignataro ------------------------ Name: Michael A. Pignataro Title: Chief Financial Officer Date: November 10, 2003