13F-HR 1 hc1q6.txt HIGHLAND FORM 13F REPORT 03/31/06 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 13F Form 13F COVER PAGE Report for the Calendar Year or Quarter Ended: March 31, 2006 Check here if Amendment [ ]; Amendment Number: This Amendment (Check only one.): [ ] is a restatement. [ ] adds new holdings entries. Institutional Investment Manager Filing this Report: Name: Highland Capital Management Address: 13455 Noel Road Suite 800 Dallas, Texas 75240 13F File Number: 28-10659 The institutional investment manager filing this report and the person by whom it is signed hereby represent that the person signing the report is authorized to submit it, that all information contained herein is true, correct and complete, and that it is understood that all required items, statements, schedules, lists, and tables, are considered integral parts of this form. Person Signing this Report on Behalf of Reporting Manager: Name: James D. Dondero Title: Principal Phone: 972.628.4100 Signature, Place, and Date of Signing: James D. Dondero Dallas, Texas May 12, 2006 Report Type (Check only one.): [ X] 13F HOLDINGS REPORT. [ ] 13F NOTICE. [ ] 13F COMBINATION REPORT. FORM 13F SUMMARY PAGE Report Summary: Number of Other Included Managers: 0 Form13F Information Table Entry Total: 58 Form13F Information Table Value Total: $505,608 (thousands) List of Other Included Managers: Provide a numbered list of the name(s) and Form 13F file number(s) of all institutional managers with respect to which this report is filed, other than the manager filing this report. NONE FORM 13F INFORMATION TABLE VALUE SHARES/ SH/ PUT/ INVSTMT OTHER VOTING AUTHORITY NAME OF ISSUER TITLE OF CLASS CUSIP (x$1000) PRN AMT PRN CALL DSCRETN MANAGERS SOLE SHARED NONE ------------------------------ ---------------- --------- -------- -------- --- ---- ------- ------------ -------- -------- -------- 40 / 86 STRATEGIC INCOME FD SH BEN INT 349739102 1064 111800 sh sole 111800 AMERADA HESS CORP COM 023551104 1495 10500 sh sole 10500 ANADARKO PETE CORP COM 032511107 758 7500 sh sole 7500 APACHE CORP COM 037411105 753 11500 sh sole 11500 BANCROFT CONV FD INC COM 059695106 612 32550 sh sole 32550 BIOLASE TECHNOLOGY INC COM 090911108 532 55671 sh sole 55671 CABOT OIL & GAS CORP COM 127097103 767 16000 sh sole 16000 CAREMARK RX INC COM 141705103 1230 25000 sh sole 25000 CBS CORP NEW CL B 124857202 2498 100000 sh sole 100000 CENTENNIAL BK HLDGS INC DEL COM 151345303 1170 100000 sh sole 100000 CHESAPEAKE ENERGY CORP COM 165167107 785 25000 sh sole 25000 COMMUNITY HEALTH SYS INC NEW COM 203668108 289 8000 sh sole 8000 COVAD COMMUNICATIONS GROUP I COM 222814204 4120 2135000 sh sole 2135000 DEVON ENERGY CORP NEW COM 25179m103 385 6300 sh sole 6300 DREYFUS HIGH YIELD STRATEGIE SH BEN INT 26200s101 611 151250 sh sole 151250 ELLSWORTH FUND LTD COM 289074106 638 78400 sh sole 78400 ENCORE MED CORP COM 29256e109 512 100000 sh sole 100000 EOG RES INC COM 26875p101 770 10700 sh sole 10700 EXCO RESOURCES INC COM 269279402 13614 1086500 sh sole 1086500 FIRST DATA CORP COM 319963104 1873 40000 sh sole 40000 FOREST OIL CORP COM PAR $0.01 346091705 5242 141000 sh sole 141000 GRAY TELEVISION INC COM 389375106 2824 336200 sh sole 336200 HOME DEPOT INC COM 437076102 5500 130000 sh sole 130000 JAMES RIVER COAL CO COM NEW 470355207 2487 73208 sh sole 73208 KINDRED HEALTHCARE INC COM 494580103 1081 43000 sh sole 43000 LEAP WIRELESS INTL INC COM NEW 521863308 222854 5104229 sh sole 5104229 LORAL SPACE & COMMUNICATNS L COM 543881106 13437 467372 sh sole 467372 MANOR CARE INC NEW COM 564055101 3681 8300 sh sole 8300 MARATHON OIL CORP COM 565849106 1470 19300 sh sole 19300 MARINER ENERGY INC COM 56845t305 1436 70000 sh sole 70000 MASSEY ENERGY CORP COM 576206106 757 21000 sh sole 21000 MIRANT CORP NEW COM 60467r100 103456 4138200 sh sole 4138200 MOVIE GALLERY INC COM 624581104 1827 605000 sh sole 605000 MURPHY OIL CORP COM 626717102 787 15800 sh sole 15800 NRG ENERGY INC COM NEW 629377508 10034 221900 sh sole 221900 PATHMARK STORES INC NEW *W EXP 09/10/201 70322a119 5 17481 sh sole 17481 PATTERSON COMPANIES INC COM 703395103 750 21300 sh sole 21300 PATTERSON UTI ENERGY INC COM 703481101 959 30000 sh sole 30000 PROSPECT STR HIGH INCOME PTF COM NEW 743586406 1054 323339 sh sole 323399 PROSPECT STREET INCOME SHS I COM 743590101 834 142800 sh sole 142800 RADIO ONE INC CL D NON VTG 75040p405 1119 150000 sh sole 150000 RELIANT ENERGY INC COM 75952b105 744 70295 sh sole 70295 ROTECH HEALTHCARE INC COM 778669101 3149 217000 sh sole 217000 SAKS INC COM 79377w108 110 57500 sh sole 57500 SALOMON BROS HIGH INCOME FD COM 794907105 853 86000 sh sole 86000 SCHEIN HENRY INC COM 806407102 756 15800 sh sole 15800 SFBC INTL INC COM 784121105 244 10000 sh sole 10000 SHAW GROUP INC COM 820280105 1617 53191 sh sole 53191 SHILOH INDS INC COM 824543102 2709 140750 sh sole 140750 SINCLAIR BROADCAST GROUP INC CL A 829226109 2242 275000 sh sole 275000 SOUTHWESTERN ENERGY CO COM 845467109 773 24000 sh sole 24000 SPRINT NEXTEL CORP COM FON 852061100 2067 80000 sh sole 80000 TRIAD HOSPITALS INC COM 89579k109 335 8000 sh sole 8000 TRICO MARINE SERVICES INC COM NEW 896106200 13608 421300 sh sole 421300 TRUMP ENTMT RESORTS INC COM 89816t103 17692 955299 sh sole 955299 UNISOURCE ENERGY CORP COM 909205106 2288 75000 sh sole 75000 WALGREEN CO COM 931422109 38817 900000 sh sole 900000 WILLIAMS COS INC DEL COM 969457100 1534 71700 sh sole 71700