-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IEY+Au6q3bUG9dpx5Ca5958XgSg+/rfJD5UE5RSZU9AJPEYoQ6Mg3DM4gvVdUGBw avVnhQVkw6slUJbceTD8LQ== 0000897101-03-001133.txt : 20030919 0000897101-03-001133.hdr.sgml : 20030919 20030919164840 ACCESSION NUMBER: 0000897101-03-001133 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030731 FILED AS OF DATE: 20030919 EFFECTIVENESS DATE: 20030919 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VALUE LINE AGGRESSIVE INCOME TRUST CENTRAL INDEX KEY: 0000783316 IRS NUMBER: 136866048 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04471 FILM NUMBER: 03902981 BUSINESS ADDRESS: STREET 1: 220 E. 42ST CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2126873965 N-CSRS 1 agg-in034036_ncsrs.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file Number 811-4471 -------- Value Line Aggressive Income Trust - ------------------------------------------------ (Exact name of registrant as specified in charter) 220 East 42nd Street, New York, N.Y. 10017 - ------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 212-907-1500 ------------ Date of fiscal year end: January 31, 2004 ---------------- Date of reporting period: July 31, 2003 ------------- Item I. Reports to Stockholders. - ------ ------------------------ A copy of the Semi-Annual Report to Stockholders for the period ended is included with this Form. Item 2. Code of Ethics - ------- -------------- Not applicable. Item 3. Audit Committee Financial Expert. - ------- --------------------------------- Not applicable. Item 9. Controls and Procedures. - ------- ------------------------ (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in rule 30a-2(c) under the Act (17 CFR 270.30a-2(c) ) based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report, are appropriately designed to ensure that material information relating to the registrant is made known to such officers and are operating effectively. (b) The registrant's principal executive officer and principal financial officer have determined that there have been no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including corrective actions with regard to significant deficiencies and material weaknesses. Item 10. Exhibits. - -------- --------- (a) Not applicable. (b) (1) Certification pursuant to Rule 30a-2 under the Investment Company Act of 1940 (17 CFR 270.30a-2) attached hereto as Exhibit 99.CERT. (2) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.906.CERT. 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. By /s/ Jean B. Buttner ---------------------------- Jean B. Buttner, President Date: September 19, 2003 ---------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ Jean B. Buttner ---------------------------- Jean B. Buttner, President, Principal Executive Officer By /s/ David T. Henigson ---------------------------- David T. Henigson, Vice President, Treasurer, Principal Financial Officer Date: September 19, 2003 ---------------------------- - -------------------------------------------------------------------------------- SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- JULY 31, 2003 - -------------------------------------------------------------------------------- VALUE LINE AGGRESSIVE INCOME TRUST [VALUE LINE LOGO] - -------------------------------------------------------------------------------- INVESTMENT ADVISER Value Line, Inc. 220 East 42nd Street New York, NY 10017-5891 DISTRIBUTOR Value Line Securities, Inc. 220 East 42nd Street New York, NY 10017-5891 CUSTODIAN BANK State Street Bank and Trust Co. 225 Franklin Street Boston, MA 02110 SHAREHOLDER State Street Bank and Trust Co. SERVICING AGENT c/o NFDS P.O. Box 219729 Kansas City, MO 64121-9729 INDEPENDENT PricewaterhouseCoopers LLP ACCOUNTANTS 1177 Avenue of the Americas New York, NY 10036 LEGAL COUNSEL Peter D. Lowenstein, Esq. Two Sound View Drive, Suite 100 Greenwich, CT 06830 TRUSTEES Jean Bernhard Buttner John W. Chandler Frances T. Newton Francis C. Oakley David H. Porter Paul Craig Roberts Marion N. Ruth Nancy-Beth Sheerr OFFICERS Jean Bernhard Buttner Chairman and President Bradley T. Brooks Vice President David T. Henigson Vice President and Secretary/Treasurer Joseph Van Dyke Assistant Secretary/Treasurer Stephen La Rosa Assistant Secretary/Treasurer THE FINANCIAL STATEMENTS INCLUDED HEREIN HAVE BEEN TAKEN FROM THE RECORDS OF THE TRUST WITHOUT EXAMINATION BY THE INDEPENDENT ACCOUNTANTS, AND, ACCORDINGLY, THEY DO NOT EXPRESS AN OPINION THEREON. THIS UNAUDITED REPORT IS ISSUED FOR INFORMATION OF SHAREHOLDERS. IT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY A CURRENTLY EFFECTIVE PROSPECTUS OF THE TRUST (OBTAINABLE FROM THE DISTRIBUTOR). #527645 VALUE LINE AGGRESSIVE INCOME TRUST TO OUR VALUE LINE AGGRESSIVE - -------------------------------------------------------------------------------- TO OUR SHAREHOLDERS: During the six months ended July 31, 2003 the total return of the Value Line Aggressive Income Trust was 13.16%. This record closely matched the Lehman Brothers U.S. Corporate High Yield Index(1), a proxy for the overall high-yield market, which was up 13.41% over the same period. The last six-month period has been one of the strongest returns periods for the high yield sector in over a decade. In fact, the recent rally started last fall as the market began to factor in better economic times ahead. With economic stimulus from both fiscal and monetary policy, the economy is finally starting to perk up. We expect GDP for the third quarter to be up significantly from the first half of the year. With the economy improving, the U.S. Corporate default rate continues to decline to just over 5.0% in the trailing twelve-month period, according to Moody's, down from the low double digits last year. Much of this good news, however, has been factored into the high yield market as yields have dropped over 3% in the past year and returns have been in excess of 20%. Although yield spreads between high yield and U.S. Treasuries have tightened significantly, the ratio of U.S. Corporate ratings downgrades by Moody's continues to be at a relatively high level. Also, while many of the more distressed companies have been able to refinance some of their debt in 2003, very few have actually begun to de-leverage their balance sheets. Given this situation, and the fact that the current yield of the Value Line Aggressive Income Trust has fallen to roughly the 7.5% range, we look for more moderate returns over the next twelve month period, versus the strong showing of the past year. We continue to focus our investments in the more liquid and stronger credits available in the High Yield sector. Additionally, the portfolio is broadly diversified to lessen exposure to any one industry. No one sector accounts for more than 10% of the portfolio. Currently, Hotel and Gaming account for the largest sector weighting at 7.5%, followed by Energy related securities, Cable, Retailers and Packaging, which all account for between 4% and 7% sector weightings. Preserving capital in difficult market environments, while allowing for an attractive dividend yield, remains our goal. Thank you for your continued investment. Sincerely, /s/ Jean Bernhard Buttner Jean Bernhard Buttner Chairman and President September 16, 2003 - -------------------------------------------------------------------------------- (1) THE LEHMAN BROTHERS U.S. CORPORATE HIGH YIELD INDEX IS REPRESENTATIVE OF THE BROAD BASED FIXED-INCOME MARKET. IT INCLUDES NON-INVESTMENT GRADE CORPORATE BONDS. THE RETURNS FOR THE INDEX DO NOT REFLECT CHARGES, EXPENSES, OR TAXES, AND IT IS NOT POSSIBLE TO DIRECTLY INVEST IN THIS UNMANAGED INDEX. - -------------------------------------------------------------------------------- 2 VALUE LINE AGGRESSIVE INCOME TRUST INCOME TRUST SHAREHOLDERS - -------------------------------------------------------------------------------- ECONOMIC OBSERVATIONS The U.S. economic recovery, which had been proceeding at an uninspiring pace for the better part of two years, showed a bit more spirit in the second quarter of this year, as the nation's gross domestic product increased at a 3.1% rate, pushed forward by a selective recovery in manufacturing, by strong housing demand, and by improving retail sales. True, there were still pockets of weakness around, most notably in the employment area, where non-farm payrolls declined further and the unemployment rate climbed above 6%. Overall, though, the economic picture at the end of the opening half was a lot brighter than it had been at the start of the year, when talk of a possible double-dip recession was still being heard. Now, as we make our way through the second half of 2003, we are starting to see evidence of a further improvement in business activity, with both the retail and manufacturing sectors strengthening even more, albeit still selectively, while housing remains resilient. The weak link in the recovery chain is still the employment situation, which, at best, is starting to show signs of stability following months of steady erosion. The ongoing support of the Federal Reserve, which continues to maintain its low-interest-rate policies, along with the earlier passage of a tax cut and fiscal stimulus package, should provide the additional help needed by the economy to push GDP growth up into the 3.5% to 4% range during the second half of the year. Inflation, meantime, remains muted, thanks, in part, to subdued labor costs. Adequate supplies of raw materials are also helping to keep the costs of production low. We caution, though, that as the U.S. economy moves further along the recovery trail over the next several years, some increase in pricing pressures may emerge. Absent a stronger long-term business recovery than we now envision, or a resumption of the earlier sharp rise in oil and gas prices stemming from a surprisingly long conflict in the Middle East, inflation should remain in check through the latter years of this decade. Long-term interest rates, which have moved higher recently, as the economy has perked up, should stabilize at modestly higher levels over the next several years. PERFORMANCE DATA:*
1 YEAR ENDED 5 YEARS ENDED 10 YEARS ENDED 6/30/03 6/30/03 6/30/03 -------------- --------------- --------------- Average Annual Total Return* ......... 16.08% -1.53% 4.95% 1 YEAR ENDED 5 YEARS ENDED 10 YEARS ENDED 7/31/03 7/31/03 7/31/03 -------------- --------------- --------------- Average Annual Total Return* ......... 21.26% -1.91% 4.79%
- -------------------------------------------------------------------------------- * THE PERFORMANCE DATA QUOTED REPRESENT PAST PERFORMANCE AND ARE NO GUARANTEE OF FUTURE PERFORMANCE. THE AVERAGE ANNUAL TOTAL RETURNS INCLUDE DIVIDENDS REINVESTED AND CAPITAL GAINS DISTRIBUTIONS ACCEPTED IN SHARES. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTMENT, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN ITS ORIGINAL COST. - -------------------------------------------------------------------------------- 3 VALUE LINE AGGRESSIVE INCOME TRUST SCHEDULE OF INVESTMENTS (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - ------------------------------------------------------------------------------------------------------------------------------ CONVERTIBLE BONDS & NOTES (7.7%) AIR TRANSPORT (0.4%) $500,000 Mesa Air Group, Inc. Senior Subordinated Notes, 2.48%, (each note is convertible to 39.727 shares of Common Stock at any time) 6/16/23(1) ................................................... $ 271,250 ---------- BIOTECHNOLOGY (0.7%) 500,000 Human Genome Sciences, Inc., Subordinated Notes, 33|M/4%, (each note is convertible to 9.1324 shares of Common Stock at any time) 3/15/07 ...................................................... 427,500 ---------- COMPUTER SOFTWARE & SERVICES (0.9%) 500,000 Mentor Graphics Corp. Subordinated Notes, 67|M/8%, (each note is convertible to 42.970 shares of Common Stock at any time) 6/15/07 ................................................................ 559,375 ---------- DRUG (3.3%) 500,000 Enzon, Inc., Subordinated Notes, 41|M/2% (each note is convertible to 14.0884 shares of Common Stock at anytime) 7/1/08 ......................................................................... 423,125 500,000 Inhale Therapeutic Systems, Inc., Subordinated Notes, 31|M/2% (each note is convertible to 19.8177 shares of Common Stock at anytime) 10/17/07 ...................................................... 385,625 500,000 IVAX Corp., Senior Subordinated Notes, 41|M/2% (each note is convertible to 24.9688 shares of Common Stock at anytime) 5/15/08 ................................................................. 494,375 500,000 Medarex, Inc Subordinated Notes, 41|M/2% (each note is convertible to 34.6789 shares of Common Stock at anytime) 7/1/06 ......................................................................... 420,000 250,000 Protein Design Labs, Inc. Subordinated Notes, 23|M/4% (each note is convertible to 49.6618 shares of Common Stock at anytime) 8/16/23(1) .............................................................. 224,688 ---------- 1,947,813 ---------- E-COMMERCE (0.6%) 500,000 Manugistics Group, Inc., Subordinated Notes, 5% (each note is convertible to 22.695 shares of Common Stock at anytime) 11/1/07 ................................................................. 382,500 ---------- FOOD WHOLESALERS (0.0%) 500,000 Fleming Cos., Inc., Senior Subordinated Notes, 51|M/4% (each note is convertible to 33.036 shares of Common Stock at anytime) 3/15/09 ................................................................. 8,750 ---------- MEDIA (0.6%) 500,000 Liberty Media Corp., Senior Subordinated Notes, 31|M/2%, (each note is convertible to 36.8189 shares of Common Stock at any time) 1/15/31 ...................................................... 337,500 ---------- RETAIL STORE (0.4%) 250,000 Penney (J.C.) Co., Inc. Subordinated Notes, 5% (each note is convertible to 35.0877 shares of Common Stock at anytime) 10/15/08 ................................................................ 249,062 ---------- TELECOMMUNICATION SERVICES (0.1%) 118,934 Gilat Satellite Network, Ltd., Subordinated Notes, 41|M/4%, (each note is convertible to 5.371 shares of Common Stock at anytime) 3/15/05 ....................................................... 32,707 ----------
- -------------------------------------------------------------------------------- 4 VALUE LINE AGGRESSIVE INCOME TRUST JULY 31, 2003 - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - ------------------------------------------------------------------------------------------------------------------------------- TOBACCO (0.7%) $ 500,000 Vector Group, Ltd., Subordinated Notes, 61|M/4%, (each note is convertible to 29.7089 shares of Common Stock at anytime) 7/15/08 ................................................................ $ 397,500 ---------- TOTAL CONVERTIBLE BONDS & NOTES (Cost $4,724,086) ............................................................................... 4,613,957 ---------- CORPORATE BONDS & NOTES (77.5%) AUTO PARTS (2.2%) 750,000 Cummins Engine, Inc., Notes, 6.45%, 3/1/05 ........................................................ 763,125 500,000 Dana Corp. Notes, 9%, 8/15/11 ..................................................................... 535,000 ---------- 1,298,125 ---------- CABLE TV (6.8%) 1,000,000 Adelphia Communications Corp. Senior Notes, 101|M/4%, 11/1/06(3) .................................. 650,000 1,250,000 Charter Communications Holdings, Senior Notes, 95|M/8%, 11/15/09 .................................. 943,750 1,000,000 Insight Communications, Inc., Senior Discount Notes, (zero coupon until 2/15/06, 121|M/4% thereafter) 2/15/11 ............................................................................. 812,500 1,000,000 MediaCom LLC, Senior Notes, 91|M/2%, 1/15/13 ...................................................... 990,000 1,500,000 RCN Corp., Senior Discount Notes, (zero coupon until 10/15/02, 111|M/8% thereafter) 10/15/07 ...... 622,500 ---------- 4,018,750 ---------- CHEMICAL -- DIVERSIFIED (0.8%) 500,000 Equistar Chemicals, LP, Senior Notes, 101|M/8%, 9/1/08 ............................................ 495,000 ---------- CHEMICAL -- SPECIALTY (2.1%) 600,000 Arco Chemical Co., Debentures, 9.80%, 2/1/20 ...................................................... 516,000 750,000 OM Group, Inc., Senior Subordinated Notes, 91|M/4%, 12/15/11 ...................................... 735,000 ---------- 1,251,000 ---------- COAL -- ALTERNATE ENERGY (1.0%) 650,000 Massey Energy Co., Notes, 6.95%, 3/1/07 ........................................................... 622,375 ---------- DIVERSIFIED COMPANIES (1.8%) 600,000 American Standard, Inc., Senior Notes, 81|M/4%, 6/1/09 ............................................ 681,000 500,000 Holmes Products Corp., Senior Subordinated Notes, Series 97|M/8%, 11/15/07 ........................ 443,125 ---------- 1,124,125 ---------- ELECTRICAL EQUIPMENT (1.2%) 750,000 Thomas & Betts Corp., Notes, 6.39%, 2/10/09 ....................................................... 727,500 ---------- ELECTRIC UTILITY -- EAST (1.1%) 600,000 Sithe Independent Funding Corp. Guaranteed Secured Notes, Series "A", 9%, 12/30/13 ................ 648,000 ----------
- -------------------------------------------------------------------------------- 5 VALUE LINE AGGRESSIVE INCOME TRUST SCHEDULE OF INVESTMENTS (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - --------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITY -- WEST (1.1%) $ 400,000 Allegheny Generating Co., Debentures, 55|M/8%, 9/11/03 ............................ $ 394,000 500,000 PG&E National Energy Group, Inc., Senior Notes, 103|M/8%, 5/16/11(3) .............. 282,500 ---------- 676,500 ---------- ELECTRONICS (1.3%) 750,000 Avnet, Inc. Notes, 77|M/8%, 2/15/05 ............................................... 780,000 ---------- ENTERTAINMENT (1.8%) 500,000 Royal Caribbean Cruises Ltd., Senior Notes, 71|M/4%, 8/15/06 ...................... 513,750 750,000 XM Satellite Radio, Inc. Senior Secured Notes, (zero coupon until 12/31/05, 14% thereafter) 12/31/09 .............................................................. 543,750 ---------- 1,057,500 ---------- FINANCIAL SERVICES (1.5%) 600,000 IOS Capital LLC, Senior Notes, 71|M/4%, 6/30/08 ................................... 552,000 500,000 Vesta Insurance Group, Inc., Senior Debentures, 83|M/4%, 7/15/25 .................. 320,000 ---------- 872,000 ---------- FOOD PROCESSING (1.7%) 500,000 Land O Lakes Inc., Senior Notes, 83|M/4%, 11/15/11 ................................ 417,500 600,000 Smithfield Foods, Inc., Senior Subordinated Notes, 75|M/8%, 2/15/08 ............... 600,000 ---------- 1,017,500 ---------- FOOD WHOLESALERS (0.9%) 500,000 Herbalife International, Inc. Senior Subordinated Notes, 113|M/4%, 7/15/10 ........ 557,500 ---------- FOREIGN TELECOMMUNICATIONS (0.0%) 500,000 World Access, Inc., Senior Notes, 131|M/4%, 1/15/08(2)(3) ......................... 25,000 ---------- GROCERY (2.6%) 500,000 Delhaize America, Inc. Guranteed Notes, 73|M/8%, 4/15/06 .......................... 512,500 1,000,000 Winn Dixie Stores, Inc., Senior Notes, 87|M/8%, 4/1/08 ............................ 1,057,500 ---------- 1,570,000 ---------- HEALTHCARE INFORMATION SYSTEMS (4.6%) 1,000,000 AdvancePCS, Senior Notes, 81|M/2%, 4/1/08 ......................................... 1,070,000 500,000 Iasis Healthcare Corp., Senior Subordinated Notes, 13%, 10/15/09 .................. 555,000 500,000 Matria Healthcare Inc., Senior Notes, 11%, 5/1/08 ................................. 515,000 500,000 Rotech Healthcare Inc., Senior Subordinated Notes, 91|M/2%, 4/1/12 ................ 520,000 ---------- 2,660,000 ---------- HOME BUILDING (4.4%) 500,000 Senior Housing Properties Trust, Senior Notes, 85|M/8%, 1/15/12 ................... 527,500 500,000 Technical Olympic USA, Inc., Senior Subordinated Notes, 103|M/8%, 7/1/12 .......... 535,000
- -------------------------------------------------------------------------------- 6 VALUE LINE AGGRESSIVE INCOME TRUST JULY 31, 2003 - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - ------------------------------------------------------------------------------------------------------------------------- $1,000,000 Toll Corp., Senior Subordinated Notes, 81|M/8%, 2/1/09 ..................................... $1,040,000 500,000 William Lyon Homes Inc., Senior Subordinated Notes, 103|M/4%, 4/1/13 ....................... 537,500 ---------- 2,640,000 ---------- HOTEL/GAMING (7.7%) 1,000,000 Eldorado Resorts LLC, Senior Subordinated Notes, 101|M/2%, 8/15/06 ......................... 1,020,000 1,000,000 Hilton Hotels Corp., Senior Notes, 71|M/2%, 12/15/17 ....................................... 985,000 1,000,000 Isle of Capri Casinos, Inc., Senior Subordinated Notes, 83|M/4%, 4/15/09 ................... 1,037,500 500,000 Meristar Hospitality Corp., Senior Notes, 9%, 1/15/08 ...................................... 490,000 1,000,000 Meritage Corp., Senior Notes, 93|M/4%, 6/1/11 .............................................. 1,085,000 ---------- 4,617,500 ---------- INSURANCE -- LIFE (1.7%) 500,000 Liberty Mutual Insurance Co., Surplus Notes, 8.20%, 5/4/07(1) .............................. 505,634 500,000 MONY Group Inc., Senior Notes, 8.35%, 3/15/10 .............................................. 527,278 ---------- 1,032,912 ---------- MACHINERY (1.7%) 500,000 Briggs & Stratton Corp., Senior Notes, 87|M/8%, 3/15/11 .................................... 570,000 500,000 JLG Industries, Inc., Senior Subordinated Notes, 83|M/8%, 6/15/12 .......................... 460,000 ---------- 1,030,000 ---------- MARITIME (0.9%) 500,000 General Maritime Corp., Senior Subordinated Notes, 10%, 3/15/13(1) ......................... 547,500 ---------- MEDICAL SERVICES (1.7%) 500,000 Res-Care, Inc., Senior Notes, 105|M/8%, 11/15/08 ........................................... 475,000 500,000 U.S. Oncology Inc., Senior Notes, 95|M/8%, 2/1/12 .......................................... 525,000 ---------- 1,000,000 ---------- METALS & MINING (0.9%) 500,000 Wolverine Tube, Inc., Senior Subordinated Notes, Series "B", 101|M/2%, 4/1/09 .............. 527,500 ---------- NATURAL GAS -- DIVERSIFIED (0.9%) 750,000 Energy Corp., of America, Senior Subordinated Notes, Series "A", 91|M/2%, 5/15/07 .......... 528,750 ---------- OILFIELD SERVICES/EQUIPMENT (5.1%) 500,000 Bluewater Finance Ltd., Senior Subordinated Notes, 101|M/4%, 2/15/12 ....................... 495,000 250,000 Compagnie Generale de Geophysics, Inc., Senior Subordinated. Notes, 105|M/8%, 11/15/07 ..... 258,750 1,000,000 Lone Star Technologies, Inc., Senior Subordinated Notes, 9%, 6/1/11 ........................ 960,000 316,000 Newpark Resources, Inc. Senior Subordinated Notes, Series "B", 85|M/8%, 12/15/07 ........... 319,160 610,000 Sonat, Inc., Notes, 75|M/8%, 7/15/11 ....................................................... 484,950 500,000 Transmontaigne, Inc., Senior Subordinated Notes, 91|M/8%, 6/1/10(1) ........................ 515,000 ---------- 3,032,860 ----------
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PRINCIPAL AMOUNT VALUE - --------------------------------------------------------------------------------------------------------------- PACKAGING & CONTAINER (4.5%) $ 600,000 Caraustar Industries, Inc., Senior Subordinated Notes, 97|M/8%, 4/1/11 ............ $ 600,000 690,000 Four M Corp., Senior Secured Notes, Series "B", 12%, 6/1/06 ....................... 690,000 500,000 Pliant Corp., Senior Subordinated Notes, 13%, 6/1/10 .............................. 435,000 1,000,000 Tekni-Plex, Inc., Senior Subordinated Notes, 123|M/4%, Series "B", 6/10/10 ........ 965,000 ---------- 2,690,000 ---------- PAPER & FOREST PRODUCTS (0.3%) 181,000 Georgia-Pacific Corp., Debentures, 91|M/2%, 12/1/11 ............................... 189,145 ---------- PETROLEUM -- INTEGRATED (0.8%) 500,000 Clark Refining & Marketing Inc., Senior Subordinated Notes, 87|M/8%, 11/15/07 ..... 502,500 ---------- PETROLEUM -- PRODUCING (2.8%) 1,000,000 Belden & Blake Corp., Senior Subordinated Notes, Series "B", 97|M/8%, 6/15/07 ..... 930,000 500,000 Giant Industries, Inc., Senior Subordinated Noted, 9%, 9/1/07 ..................... 470,000 250,000 Petroleum Helicopters, Inc., Senior Notes, Series "B", 93|M/8%, 5/1/09 ............ 273,750 ---------- 1,673,750 ---------- R.E.I.T. (1.8%) 1,000,000 LNR Property Corp., Senior Subordinated Notes, 101|M/2%, 1/15/09 .................. 1,075,000 ---------- RECREATION (0.9%) 500,000 P & O Princess Cruises Plc Guaranteed Debentures, 77|M/8%, 6/1/27 ................. 508,850 ---------- RESTAURANT (0.6%) 500,000 Advantica Restaurant Group, Inc., Senior Notes, 111|M/4%, 1/15/08 ................. 335,000 ---------- RETAIL -- BUILDING SUPPLY (0.4%) 250,000 Crescent Real Estate Equities, Senior Notes, 91|M/4%, 4/15/09 ..................... 259,300 ---------- RETAIL STORE (4.7%) 500,000 Dillard Department Stores, Inc., Notes, 7.85%, 10/11/12 ........................... 480,000 500,000 Dillards, Inc., Notes, 6.43%, 8/1/04 .............................................. 502,500 500,000 Dollar General Corp., Guaranteed Notes, 85|M/8%, 6/15/10 .......................... 556,875 757,000 J.C. Penney Co., Inc., Notes, 93|M/4%, 6/15/21 .................................... 760,785 496,000 J.C. Penney Co., Inc. Debentures, 81|M/4%, 8/15/22 ................................ 473,680 ---------- 2,773,840 ---------- STEEL (1.2%) 750,000 United States Steel Corp., Senior Notes, 93|M/4%, 5/15/10 ......................... 720,000 ----------
- -------------------------------------------------------------------------------- 8 VALUE LINE AGGRESSIVE INCOME TRUST JULY 31, 2003 - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT OR NUMBER OF SHARES VALUE - --------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES (2.0%) $1,000,000 Global Crossing Holdings Ltd., Senior Notes, 91|M/8%, 11/15/06(3) ............................. $ 35,000 1,000,000 Global Crossing Holdings Ltd., Senior Notes, 8.70%, 8/1/07(3) ................................. 35,000 320,000 Qwest Services Corp., Senior Subordinated Securied Notes, 131|M/2%, 12/15/10(1) ............... 344,000 500,000 TSI Telecommunication Services Inc., Senior Subordinated Notes, 123|M/4%, 2/1/09 .............. 497,500 1,000,000 WorldCom Inc., Notes, 71|M/2%, 5/1/11(3) ...................................................... 263,750 ----------- 1,175,250 ----------- TOTAL CORPORATE BONDS & NOTES (Cost $45,157,258) .......................................................................... 46,260,532 ----------- MUNICIPAL SECURITIES (0.4%) 250,000 Tobacco Settlement Funding Corporation New Jersey, Asset Backed Revenue, 5.75%, 6/1/32 ........ 214,200 ----------- TOTAL MUNICIPAL SECURITIES (Cost $210,590) ............................................................................. 214,200 ----------- CONVERTIBLE PREFERRED STOCKS (1.1%) BEVERAGE (0.8%) 17,000 Constellation Brands, Inc., Par $25 (each share is convertible to .7319 shares of Common Stock @ $26.10) 53|M/4%, 9/1/06 ............................................................. 447,100 ----------- MEDICAL (0.3%) 3,000 Baxter International, Inc., Par $50 (each share is convertible to 1.4011 shares of Common Stock @ $28.00) 7%, 6/16/06 ................................................................. 152,670 ----------- TELECOMMUNICATION SERVICES (0.0%) 2,500 Sprint Corp., Par $25 (each share is convertible to .8364 shares of Common Stock @ $6.10) 71|M/8%, 8/17/04 ............................................................................ 19,750 ----------- TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $603,508) ............................................................................. 619,520 ----------- PREFERRED STOCKS (0.1%) CABLE (0.0%) 10,000 Adelphia Communications Corp., Series "B", 13%, each share is exchangeable one for one into Debentures, Par $100, 7/15/09(3) ............................................................ 50,000 ----------- TOTAL PREFERRED STOCKS (Cost $244,875) ............................................................................. 50,000 -----------
- -------------------------------------------------------------------------------- 9 VALUE LINE AGGRESSIVE INCOME TRUST SCHEDULE OF INVESTMENTS (UNAUDITED) - --------------------------------------------------------------------------------
NUMBER OF SHARES VALUE - -------------------------------------------------------------------------------------------- WARRANTS (0.0%) TELECOMMUNICATION SERVICES (0.0%) 2,490 XO Communications, Inc., Series "A", Expiring 1/16/10(2) .......... $ 6,972 1,868 XO Communications, Inc. Series "B", Expiring 1/16/10(2) ........... 5,417 1,868 XO Communications, Inc. Series "C", Expiring 1/16/10(2) ........... 3,176 -------- TOTAL WARRANTS (Cost $0) ......................................................... 15,565 -------- COMMON STOCKS (3.4%) BANK (0.2%) 5,000 KeyCorp ........................................................... 134,550 -------- COMPUTER PERIPHERALS (0.1%) 6,000 Identix, Inc.(2) .................................................. 42,660 -------- COMPUTER SOFTWARE & SERVICES (0.2%) 5,000 Electronic Data Systems Corp ...................................... 111,350 7,000 Novell Inc.(2) .................................................... 24,850 -------- 136,200 -------- ELECTRICAL UTILITY -- CENTRAL (0.2%) 5,000 Alliant Energy Corp ............................................... 101,550 5,000 Centerpoint Energy Inc. ........................................... 40,350 -------- 141,900 -------- ELECTRICAL UTILITY -- EAST (0.7%) 5,000 PPL Corp .......................................................... 197,950 8,000 Pepco Holdings, Inc. .............................................. 138,560 4,500 Teco Energy Inc. .................................................. 55,800 -------- 392,310 -------- ELECTRICAL UTILITY (WEST) (0.1%) 5,000 XCEL Energy Inc. .................................................. 72,400 -------- ELECTRONICS (0.1%) 5,000 Titan Corp.(2) .................................................... 76,700 -------- FOOD PROCESSING (0.5%) 5,000 ConAgra, Inc ...................................................... 112,650 5,000 Unilever Plc. ..................................................... 164,950 -------- 277,600 --------
- -------------------------------------------------------------------------------- 10 VALUE LINE AGGRESSIVE INCOME TRUST JULY 31, 2003 - --------------------------------------------------------------------------------
NUMBER OF SHARES VALUE - ----------------------------------------------------------------------------------------------- GROCERY (0.2%) 5,000 Albertsons, Inc.(2) ................................................ $ 94,300 ----------- METALS & MINING (DIVERSIFIED) (0.2%) 4,000 Apex Silver Mines Ltd.(2) .......................................... 67,400 5,000 Gold Fields Ltd. ................................................... 59,900 ----------- 127,300 ----------- PETROLEUM - INTEGRATED (0.2%) 4,000 PetroChina Co., Ltd ................................................ 120,320 ----------- PETROLEUM PRODUCING (0.1%) 17,000 Abraxas Petroleum Corp.(2) ......................................... 15,300 6,000 Methanex Corp. ..................................................... 55,560 ----------- 70,860 ----------- R.E.I.T. (0.3%) 10,000 Nationwide Health Properties, Inc .................................. 171,200 ----------- TELECOMMUNICATION SERVICES (0.3%) 14,434 Gilat Satellite Networks Ltd.(2) ................................... 69,427 6,000 Western Wireless Corp. Class "A" (2) ............................... 87,900 1,245 XO Communications Inc.(2) .......................................... 7,968 ----------- 165,295 ----------- TOTAL COMMON STOCKS (Cost $2,627,128) ................................................ 2,023,595 ----------- TOTAL INVESTMENT SECURITIES (90.2%) (Cost $53,567,445) ............................................... 53,797,369 -----------
- -------------------------------------------------------------------------------- 11 VALUE LINE AGGRESSIVE INCOME TRUST SCHEDULE OF INVESTMENTS (UNAUDITED) JULY 31, 2003 - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT (7.7%) (INCLUDING ACCRUED INTEREST) $3,000,000 Collateralized by $2,983,000 U.S. Treasury Bonds 5.25% due 2/15/29, with a value of $2,972,782 (with UBS Warburg LLC., 1.06%, dated 7/31/03, due 8/1/03 delivery value $3,000,088) ............................................................................ $ 3,000,088 1,600,000 Collateralized by $1,355,000 U.S. Treasury Notes 113|M/4% due 2/15/10, with a value of $1,635,070 (with Morgan Stanley Dean Witter & Co., Inc., 0.99%, dated 7/31/03, due 8/1/03 delivery value $1,600,044) ...................................................... 1,600,044 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $4,600,132) ...................................................................... 4,600,132 ------------ CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES (2.1%) .................................... 1,236,296 ------------ NET ASSETS (100.0%) ...................................................................... $ 59,633,797 ============ NET ASSET VALUE, OFFERING AND REDEMPTION PRICE, PER OUTSTANDING SHARE $(59,633,797 divided by 12,578,351 shares of beneficial interest outstanding) .......... $ 4.74 ============
(1) 144A SECURITY WHERE CERTAIN CONDITIONS FOR PUBLIC SALE MAY EXIST. (2) NON-INCOME PRODUCING SECURITY. (3) DEFAULTED SECURITY. SEE NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 12 VALUE LINE AGGRESSIVE INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES STATEMENT OF OPERATIONS FOR THE AT JULY 31, 2003 (UNAUDITED) SIX MONTHS ENDED JULY 31, 2003 (UNAUDITED) - ---------------------------------------------------------------------------------------------------------------------------------- DOLLARS (IN THOUSANDS EXCEPT PER SHARE DOLLARS AMOUNT) (IN THOUSANDS) ---------------- -------------- ASSETS: INVESTMENT INCOME: Investment securities, at value Interest (Net of foreign withholding taxes (Cost - $53,567) .......................... $53,797 of $1) ................................... $2,520 Repurchase agreements Dividends ................................... 70 (Cost - $4,600) ........................... 4,600 Other ....................................... 4 Cash ......................................... 38 ------ Receivable for securities sold ............... 1,902 Total Income ........................... 2,594 Interest receivable .......................... 1,135 ------ Receivable for trust shares sold ............. 17 EXPENSES: Dividend receivable .......................... 8 Advisory fee ................................ 238 ------- Service and distribution plan fee ........... 75 TOTAL ASSETS ............................ 61,497 Transfer agent fees ......................... 28 ------- Audit and legal fees ........................ 26 LIABILITIES: Custodian fees .............................. 20 Payable for trust shares repurchased ......... 1,687 Printing, checks and stationary ............. 16 Dividends payable to shareholders ............ 78 Registration and filing fees ................ 16 Accured expenses: ............................ Trustees' fees and expenses ................. 10 Advisory fee .............................. 41 Other ....................................... 9 Service and distribution plan fees ------ payable ................................ 15 Total expenses before Other ..................................... 42 custody credits ..................... 438 ------- Less: custody credits .................. (1) TOTAL LIABILITIES ....................... 1,863 ------ ------- Net Expenses ........................... 437 NET ASSETS ................................... $59,634 ------ ======= NET INVESTMENT INCOME ....................... 2,157 NET ASSETS ------ Shares of beneficial interest, at $.01 REALIZED AND UNREALIZED LOSS ON par value (authorized unlimited, INVESTMENTS outstanding 12,578,351) ................... $ 126 Net realized Gain ...................... 452 Additional paid-in capital ................... 129,261 Net Change in Net Unrealized Accumulated net realized loss Appreciation (Depreciation) ......... 4,715 on investments ............................ (69,983) ------ Unrealized net appreciation NET REALIZED GAIN AND CHANGE IN of investments ............................ 230 NET UNREALIZED APPRECIATION ------- (DEPRECIATION) ON INVESTMENTS ............ 5,167 NET ASSETS ................................... $59,634 ------ ======= NET INCREASE IN NET ASSETS FROM NET ASSET VALUE, OFFERING AND OPERATIONS ............................... $7,324 REDEMPTION PRICE, PER ====== OUTSTANDING SHARE ($59,633,797 DIVIDED BY 12,578,351 SHARES OF BENEFICAL INTEREST OUTSTANDING) .............................. $ 4.74 =======
SEE NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 13 VALUE LINE AGGRESSIVE INCOME TRUST
STATEMENT OF CHANGES IN NET ASSETS FOR THE SIX MONTHS ENDED JULY 31, 2003 (UNAUDITED) AND FOR THE YEAR ENDED JANUARY 31, 2003 - ------------------------------------------------------------------------------------------------------------ SIX MONTHS ENDED YEAR ENDED JULY 31, 2003 JANUARY 31, (UNAUDITED) 2003 --------------- ------------ DOLLARS (IN THOUSANDS) OPERATIONS: Net investment income ................................................... $ 2,157 $ 5,295 Net realized gain (loss) on investments ................................. 452 (4,038) Change in net unrealized (depreciation) appreciation .................... 4,715 (1,566) --------- --------- Net increase (decrease) in net assets from operations ................... 7,324 (309) --------- --------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income ................................................... (2,157) (5,325) TRUST SHARE TRANSACTIONS: Net proceeds from sale of shares ........................................ 19,541 26,376 Net proceeds from reinvestment of distributions to shareholders ......... 1,684 4,167 --------- --------- 21,225 30,543 Cost of shares repurchased .............................................. (19,764) (67,824) --------- --------- Net increase (decrease) in net assets from share transactions ........... 1,461 (37,281) --------- --------- TOTAL INCREASE (DECREASE) IN NET ASSETS .................................. 6,628 (42,915) NET ASSETS: Beginning of period ..................................................... 53,006 95,921 --------- --------- End of period ........................................................... $ 59,634 $ 53,006 ========= ========= DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME ......................... $ -- $ (30) ========= =========
SEE NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 14 VALUE LINE AGGRESSIVE INCOME TRUST NOTES TO FINANCIAL STATEMENTS (UNAUDITED) JULY 31, 2003 - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Value Line Aggressive Income Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The primary investment objective of the Trust is to maximize current income through investment in a diversified portfolio of high-yield fixed-income securities. As a secondary investment objective, the Trust will seek capital appreciation but only when consistent with its primary objective. Lower rated or unrated (i.e., high-yield) securities are more likely to react to developments affecting market risk (general market liquidity) and credit risk (issuers' inability to meet principal and interest payments on their obligations) than are more highly rated securities, which react primarily to movements in the general level of interest rates. The ability of issuers of debt securities held by the Trust to meet their obligations may be affected by economic developments in a specific industry. The following significant accounting policies are in conformity with generally accepted accounting principles for investment companies. Such policies are consistently followed by the Trust in the preparation of its financial statements. Generally accepted accounting principles may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates. (A) SECURITY VALUATION. The Trustees have determined that the value of bonds and other fixed income corporate securities be calculated on the valuation date by reference to valuations obtained from an independent pricing service that determines valuations for normal institutional-size trading units of debt securities, without exclusive reliance upon quoted prices. This service takes into account appropriate factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data in determining valuations. Securities, other than bonds and other fixed income securities, not priced in this manner are valued at the midpoint between the latest available and representative bid and asked prices or, when stock exchange valuations are used, at the latest quoted sale price as of the regular close of business of the New York Stock Exchange on the valuation date. Other assets and securities for which market valuations are not readily available are valued at their fair value as the Trustees may determine. Short term instruments with maturities of 60 days or less, at the date of purchase, are valued at amortized cost which approximates market value. (B) REPURCHASE AGREEMENTS. In connection with repurchase agreements, the Trust's custodian takes possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to ensure the adequacy of the collateral. In the event of default of the obligation to repurchase, the Trust has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, in the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings. (C) DISTRIBUTIONS. It is the policy of the Trust to distribute all of its net investment income to shareholders. Dividends from net investment income will be declared daily and paid monthly. Net realized capital gains, if any, are distributed to shareholders annually or more frequently if necessary to comply with the Internal Revenue Code. Income dividends and capital gains distributions are automatically reinvested in additional shares of the Trust unless the shareholder has requested otherwise. Income earned by the Trust on weekends, holidays and other days on which the Trust is closed for business is declared as a dividend on the next day on which the Trust is open for business. (D) FEDERAL INCOME TAXES. It is the Trust's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies, including the distribution requirements of the Tax Reform - -------------------------------------------------------------------------------- 15 VALUE LINE AGGRESSIVE INCOME TRUST NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- Act of 1986, and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax or excise tax provision is required. (E) INVESTMENTS. Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified-cost basis. Interest income, adjusted for amortization of discount, including original-issue discount required for federal income tax purposes on investments, is earned from settlement date and recognized on the accrual basis. (F) The Trust charges a 1% redemption fee on shares held for less than 120 days. Such fees are retained by the Trust and accounted for as paid in capital. 2. TRUST SHARE TRANSACTIONS Transactions in shares of beneficial interest in the Trust were as follows: SIX MONTHS YEAR ENDED ENDED JULY 31, 2003 JANUARY 31, (UNAUDITED) 2003 --------------- ------------ Shares sold ............................... 4,285 5,944 Shares issued to shareholders in reinvestment of dividends .............................. 365 941 ----- ----- 4,650 6,885 Shares repurchased ........................ (4,260) (14,928) ------ ------- Net increase (decrease) ................... 390 (8,043) ====== ======= Redemption fees of $69,000 were retained by the Trust for the six months ended July 31, 2003. 3. PURCHASES AND SALES OF SECURITIES Purchases and sales of investment securities, excluding short-term securities, were as follows: SIX MONTHS ENDED JULY 31, 2003 (UNAUDITED) ----------------- (IN THOUSANDS) PURCHASES: Investment Securities .............................. $24,696 ======= SALES: Investment Securities .............................. $17,056 ======= 4. INCOME TAXES At July 31, 2003, information on the tax components of capital is as follows: (UNAUDITED) (IN THOUSANDS) -------------- Cost of investments for tax purposes ................... $58,224 ======= Gross tax unrealized appreciation ...................... $ 3,743 Gross tax unrealized depreciation ...................... $(3,570) ------- Net tax unrealized depreciation on investments ......................................... $ (173) ======= Net realized gain (loss) differ for financial statement and tax purposes primarily due to differing treatments of bond premiums and wash sales. - -------------------------------------------------------------------------------- 16 VALUE LINE AGGRESSIVE INCOME TRUST JULY 31, 2003 - -------------------------------------------------------------------------------- 5. INVESTMENT ADVISORY CONTRACT, MANAGEMENT FEES AND TRANSACTIONS WITH AFFILIATES An advisory fee of $237,643 was paid or payable to Value Line, Inc., the Trust's investment adviser, (the "Adviser"), for the six months ended July 31, 2003. This was computed at an annual rate of .75 of 1% per year on the first $100 million of the Trust's average daily net assets for the period, and .50 of 1% on the average daily net assets in excess thereof. The Adviser provides research, investment programs and supervision of the investment portfolio and pays costs of administrative services and office space. The Adviser also provides persons, satisfactory to the Trust's Trustees, to act as officers of the Trust and pays their salaries and wages. The Trust bears all other costs and expenses. The Trust has a Service and Distribution Plan (the "Plan"). The Plan, adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, compensates Value Line Securities, Inc., a subsidiary of the Adviser (the "Distributor") for advertising, marketing and distributing the Trust's shares and for servicing the Trust's shareholders at an annual rate of 0.25% of the Trust's average daily net assets. Fees amounting to $75,244 were paid or payable to the Distributor under this Plan for the six months ended July 31, 2003. Certain officers and directors of the Adviser and its subsidiary, Value Line Securities, Inc. (the Trust's distributor and a registered broker/dealer), are also officers and a Trustee of the Trust. At July 31, 2003, the Adviser and certain officers and Trustees owned 2,283 shares of beneficial interest in the Trust, representing .02% of the outstanding shares. - -------------------------------------------------------------------------------- 17 VALUE LINE AGGRESSIVE INCOME TRUST FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of capital stock outstanding throughout each period:
SIX MONTHS ENDED YEARS ENDED JANUARY 31, JULY 31, 2003 --------------------------------------------------------------------- (UNAUDITED) 2003 2002 2001 2000 1999 ------------- ------- ------- -------- -------- -------- NET ASSET VALUE, BEGINNING OF PERIOD ........................... $ 4.35 $ 4.74 $ 5.24 $ 7.22 $ 7.45 $ 8.66 ------- ------- ------- -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income ........... 0.16 0.41 0.49 (1) 0.66 0.73 0.78 Net gains or losses on securities (both realized and unrealized) ............... 0.38 (0.40) (0.50)(1) ( 1.98) (0.23) (1.21) ------- ------- ------- -------- -------- -------- Total from investment operations ....................... 0.54 0.01 (0.01) ( 1.32) 0.50 (0.43) ------- ------- ------- -------- -------- -------- Redemption fees ................... 0.01 0.01 -- -- -- -- ------- ------- ------- -------- -------- -------- LESS DISTRIBUTIONS: Dividends from net investment income ................ (0.16) (0.41) (0.49) ( 0.66) (0.73) (0.78) ------- ------- ------- -------- -------- -------- NET ASSET VALUE, END OF PERIOD .... $ 4.74 $ 4.35 $ 4.74 $ 5.24 $ 7.22 $ 7.45 ======= ======= ======= ======== ======== ======== TOTAL RETURN ...................... 13.16%+ 0.40% (0.12)% (19.14)% 7.16% (5.13)% ======= ======= ======= ======== ======== ======== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) ................... $59,634 $53,006 $95,921 $116,924 $169,586 $174,805 Ratio of expenses to average net assets ....................... 1.45%(3)* 1.37%(3) 1.23%(3) 1.04%(3) 0.82%(3) 0.81%(2) Ratio of net investment income to average net assets ............ 7.16%* 9.12% 9.72%(1) 10.61% 10.04% 9.81% Portfolio turnover rate ........... 36% 59% 140% 184% 154% 140%
(1) AS REQUIRED, EFFECTIVE FEBRUARY 1, 2001, THE TRUST HAS ADOPTED THE PROVISIONS OF THE AICPA AUDIT AND ACCOUNTING GUIDE FOR INVESTMENT COMPANIES AND BEGAN AMORTIZING PREMIUM ON DEBT SECURITIES. THE EFFECT OF THIS CHANGE FOR THE YEAR ENDED JANUARY 31, 2002 ON NET INVESTMENT AND NET REALIZED AND UNREALIZED GAINS AND LOSSES WAS LESS THAN $.01 PER SHARE. THE EFFECT OF THIS CHANGE WAS TO DECREASE THE RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS FROM 9.79% TO 9.72%. PER SHARE AND RATIOS FOR THE PERIOD PRIOR TO FEBRUARY 1, 2001 HAVE NOT BEEN RESTATED TO REFLECT THIS CHANGE IN ACCOUNTING POLICY. (2) BEFORE OFFSET OF CUSTODY CREDITS. (3) RATIO REFLECTS EXPENSES GROSSED UP FOR CUSTODY CREDIT ARRANGEMENT. THE RATIO OF EXPENSES TO AVERAGE NET ASSETS NET OF CUSTODY CREDITS WOULD HAVE BEEN 1.24% AS OF JANUARY 31, 2002 AND WOULD NOT HAVE CHANGED AS OF JULY 31, 2003, JANUARY 31, 2003, JANUARY 31, 2001 AND JANUARY 31, 2000. + NOT ANNUALIZED * ANNUALIZED SEE NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 18 VALUE LINE AGGRESSIVE INCOME TRUST - -------------------------------------------------------------------------------- (This page has been left blank intentionally.) - -------------------------------------------------------------------------------- 19 VALUE LINE AGGRESSIVE INCOME TRUST THE VALUE LINE FAMILY OF FUNDS - -------------------------------------------------------------------------------- 1950 -- THE VALUE LINE FUND seeks long-term growth of capital. Current income is a secondary objective. 1952 -- VALUE LINE INCOME AND GROWTH FUND'S primary investment objective is income, as high and dependable as is consistent with reasonable risk. Capital growth to increase total return is a secondary objective. 1956 -- THE VALUE LINE SPECIAL SITUATIONS FUND seeks long-term growth of capital. No consideration is given to current income in the choice of investments. 1972 -- VALUE LINE LEVERAGED GROWTH INVESTORS' sole investment objective is to realize capital growth. 1979 -- THE VALUE LINE CASH FUND, a money market fund, seeks to secure as high a level of current income as is consistent with maintaining liquidity and preserving capital. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. 1981 -- VALUE LINE U.S. GOVERNMENT SECURITIES FUND seeks maximum income without undue risk to capital. Under normal conditions, at least 80% of the value of its net assets will be invested in securities issued or guaranteed by the U.S. Government and its agencies and instrumentalities. 1983 -- VALUE LINE CENTURION FUND* seeks long-term growth of capital. 1984 -- THE VALUE LINE TAX EXEMPT FUND seeks to provide investors with the maximum income exempt from federal income taxes while avoiding undue risk to principal. The Fund offers investors a choice of two portfolios: The Money Market Portfolio and The National Bond Portfolio. The Trust may be subject to state and local taxes and the Alternative Minimum Tax (if applicable). 1985 -- VALUE LINE CONVERTIBLE FUND seeks high current income together with capital appreciation primarily from convertible securities ranked 1 or 2 for year-ahead performance by the Value Line Convertible Ranking System. 1986 -- VALUE LINE AGGRESSIVE INCOME TRUST seeks to maximize current income. 1987 -- VALUE LINE NEW YORK TAX EXEMPT TRUST seeks to provide New York taxpayers with the maximum income exempt from New York State, New York City and federal income taxes while avoiding undue risk to principal. The Trust may be subject to state and local taxes and the Alternative Minimum Tax (if applicable). 1987 -- VALUE LINE STRATEGIC ASSET MANAGEMENT TRUST* seeks to achieve a high total investment return consistent with reasonable risk. 1993 -- VALUE LINE EMERGING OPPORTUNITIES FUND invests primarily in common stocks or securities convertible into common stock, with its primary objective being long-term growth of capital. 1993 -- VALUE LINE ASSET ALLOCATION FUND seeks high total investment return, consistent with reasonable risk. The Fund invests in stocks, bonds and money market instruments utilizing quantitative modeling to determine the asset mix. * ONLY AVAILABLE THROUGH THE PURCHASE OF GUARDIAN INVESTOR, A TAX DEFERRED VARIABLE ANNUITY, OR VALUEPLUS, A VARIABLE LIFE INSURANCE POLICY. FOR MORE COMPLETE INFORMATION ABOUT ANY OF THE VALUE LINE FUNDS, INCLUDING CHARGES AND EXPENSES, SEND FOR A PROSPECTUS FROM VALUE LINE SECURITIES, INC., 220 EAST 42ND STREET, NEW YORK, NEW YORK 10017-5891 OR CALL 1-800-223-0818, 24 HOURS A DAY, 7 DAYS A WEEK, OR VISIT US AT WWW.VALUELINE.COM. READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. - -------------------------------------------------------------------------------- 20 EX-99.CERT 3 agg034036_ex99cert.txt Exhibit 99.CERT --------------- CERTIFICATION PURSUANT TO RULE 30A-2 UNDER THE INVESTMENT COMPANY ACT OF 1940 (17 CFR 270.30A-2) I, Jean Bernhard Buttner, Chairman and President of theValue Line Aggressive Income Trust, certify that: 1. I have reviewed this report on Form N-CSR of the Value Line Aggressive Income Trust.: 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial information included in this report, and the financial statements on which the financial information is based, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal control; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: September 19, 2003 ------------------ By: /s/ Jean Bernhard Buttner ------------------------- Jean Bernhard Buttner Chairman and President Value Line Aggressive Income Trust CERTIFICATION PURSUANT TO RULE 30A-2 UNDER THE INVESTMENT COMPANY ACT OF 1940 (17 CFR 270.30A-2) I, David T. Henigson, Vice President and Secretary/Treasurer of theValue Line Aggressive Income Trust, certify that: 1. I have reviewed this report on Form N-CSR of the Value Line Aggressive Income Trust.: 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial information included in this report, and the financial statements on which the financial information is based, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal control; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: September 19, 2003 ------------------ By: /s/ David T. Henigson --------------------- David T. Henigson Vice President and Secretary/Treasurer Value Line Aggressive Income Trust EX-99.906 4 agg034036_ex99-906.txt Exhibit 99.906.CERT ------------------- CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Jean Bernhard Buttner, Chairman and President of the Value Line Aggressive Income Trust (the "Registrant"), certify that: 1. The periodic report on Form N-CSR of the Registrant for the period ended 6/30/03 (the "Form N-CSR") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: September 19, 2003 ------------------ By: /s/ Jean Bernhard Buttner ------------------------- Jean Bernhard Buttner Chairman and President Value Line Aggressive Income Trust CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, David T. Henigson, Vice President and Secretary/Treasurer of the Value Aggressive Income Trust(the "Registrant"), certify that: 1. The periodic report on Form N-CSR of the Registrant for the period ended 6/30/03 (the "Form N-CSR") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: September 19, 2003 ------------------ By: /s/ David T. Henigson --------------------- David T. Henigson Vice President and Secretary/Treasurer Value Line Aggressive Income Trust -----END PRIVACY-ENHANCED MESSAGE-----