N-CSR 1 a2166923zn-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. 811-05012 ----------------------------------------- CREDIT SUISSE ASSET MANAGEMENT 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) J. Kevin Gao, Esq. Credit Suisse Asset Management 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: December 31st Date of reporting period: January 1, 2005 to December 31, 2005 ITEM 1. REPORTS TO STOCKHOLDERS. CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. ANNUAL REPORT DECEMBER 31, 2005 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. ANNUAL INVESTMENT ADVISER'S REPORT December 31, 2005 (unaudited) Dear Shareholder: PERFORMANCE SUMMARY 1/1/05 - 12/31/05
FUND & BENCHMARKS PERFORMANCE Total Return (based on NAV)(1) 1.74% Total Return (based on market value)(1) -9.76% Citigroup High-Yield Market Index(2) (CHYMI) 2.07% Merrill Lynch US High Yield Master II Constrained Index(3) (MERRILL) 2.78%
MARKET OVERVIEW: RESILIENT ECONOMY RIDES THROUGH THE STORMS In a year of modest gains for most major markets, the high yield sector performed relatively well. Although economic growth was robust throughout the year, markets seemed vulnerable to the possibility of an impending soft patch, which, in fact, never materialized. The inflationary impact of higher energy prices was a concern for much of the year, sapping discretionary income and posing a risk to continued consumer spending. A series of summer storms in the refinery-heavy Gulf Coast exacerbated oil price pressures while causing a short-term spike in unemployment claims. Then, in the storms' aftermath, when the specter of higher oil prices faded due to warmer-than-expected winter weather, the likelihood of a cooling in the housing market edged to the center of the national radar screen. But despite the periodic risk of a slowdown, corporate profit growth remained resilient and the Fed resolute in its measured pace of policy tightening, lifting the fed funds rate 200 basis points over the course of the year, to 4.25%. The yield curve flattened and then, at year-end, inverted (the spread between 2 year and 10 year Treasuries narrowed from 115 to -1 basis points) as a global savings glut kept a lid on longer yields while the short end rose. In the Fund's fiscal year, the high yield market (as measured by MERRILL), outperformed the broad fixed income market (as measured by the Lehman Brothers Aggregate Bond Index, which returned 2.43%), although the magnitude of outperformance narrowed significantly from that of the last several years and might be considered small given the strong fundamental backdrop. In our view, this was due to the natural progress of the credit and business cycles. High Yield defaults (as measured by Moody's Investor Services) remained below 2% through the entire fiscal year period, well below historical averages. However, after intense focus on balance sheet repair prompted by strong earnings growth and low interest rates in the last few years, there is simply less "room for improvement" in credit fundamentals. In addition, corporations are increasingly turning to other means to address their lackluster share prices (through share repurchases, dividend increases and other measures) in an effort to boost shareholder value. From a technical perspective, the environment was mixed. High yield mutual funds reported a record $8.7 billion outflow through year-end, although this indicator does not account for the increasing role of hedge funds and other market participants. And while the fiscal year saw a decline in the number of high yield deals and a drop in new issue volume, this decrease in new supply was easily outweighed by the entrance of Ford, General Motors ("GM") and Delphi debt into the high yield arena (as of December 31, 2005, the holdings in Ford, GM, and Delphi debt respectively amounted to 0.67%, 2.18%, and 0.03% of the Fund's net assets.) In our view, this influx of fallen angel debt caused the greatest turbulence, and provided the greatest drag, on the high yield market in the period. High yield spreads remained below their historical averages for most of the period, but widened dramatically with the downgrade of GM and Ford to junk status. These fallen angels brought approximately $82 billion of debt (market value prior to downgrade) and raised concerns about the high yield market's ability to absorb that level of supply. Together they now account for about 12% of the Citigroup High Yield market index. In sum, we believe that all of these factors, along with the impact of the Gulf Coast hurricanes, persistently high energy costs, and uncertainty with respect to Federal Reserve policy weighed on the market, resulting in greater caution among investors. STRATEGIC REVIEW: SELECTIVE SECTOR POSITIONING Several factors accounted for the Fund's performance relative to the Citigroup High Yield Market Index during the fiscal year: - Our overweight to the Wireless sector relative to the Index, as well as stock selection within that sector, provided the greatest positive contribution to the Fund's performance in the period. - An overweight to the Gaming sector, our second largest overweight relative to the Index, also aided. - The major detractor was the Fund's overweight to the Building Products sector, which underperformed during the period under review. - Another hindrance to performance was our underweight allocation to the Diversified Telecom and Energy sectors, both of which outperformed for the period under review. BENCHMARK REVIEW Structural changes within the high yield universe have necessitated an evaluation of our benchmark. Specifically, as noted above, the downgrades of General Motors Corp and Ford Motor Company have created high issuer concentrations in the traditional high yield indices. After extensively studying the various benchmarks available, the fund will switch its reference index to the Merrill Lynch US High Yield Master II Constrained Index. This index caps issuer weights to a maximum of 2% and therefore addresses current and future concentration issues. OUTLOOK: MONETARY POLICY CHANGES AMID FAVORABLE CREDIT CONDITIONS We maintain a cautiously optimistic view for high yield heading into 2006. Strong fundamentals, still-robust economic growth and low default risk could be offset by the increase in shareholder-friendly actions, such as buybacks and LBO activity. Defaults are expected to remain below their historical average, but we are of the opinion that the trend of deteriorating new-issue quality may continue, planting the seeds of future failures. In spite of this, we expect spreads, which are near-historic lows, to remain range-bound going forward. Sincerely yours, /s/ Martha B. Metcalf /s/ Steven B. Plump Martha B. Metcalf Steven B. Plump Chief Investment Officer* Chief Executive Officer and President** HIGH YIELD BONDS ARE LOWER-QUALITY BONDS THAT ARE ALSO KNOWN AS "JUNK BONDS." SUCH BONDS ENTAIL GREATER RISKS THAN THOSE FOUND IN HIGHER-RATED SECURITIES. INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN ACCOUNTING METHODS; THESE RISKS ARE GENERALLY HEIGHTENED FOR EMERGING-MARKET INVESTMENTS. THE FUND MAY INCLUDE A GREATER DEGREE OF RISK THAN OTHER FUNDS THAT INVEST IN LARGER, MORE-DEVELOPED MARKETS. 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. * Martha B. Metcalf is a Managing Director of Credit Suisse Asset Management, LLC ("Credit Suisse") and head of the U.S. High Yield Management Team. She has served in these capacities since 2005. As of November 2005, she is primarily responsible for the management of the Fund's assets. From 2000 until 2005, she was a Managing Director and Portfolio Manager of Global High Yield bonds, and head of a global high yield business with responsibility for total return, as well as structured portfolios at Invesco. Prior to her tenure at Invesco, Ms. Metcalf served for over ten years at JP Morgan Investment Management, where she was Vice President and Portfolio Manager for High Yield Corporate bonds. ** Steven B. Plump is a Managing Director of Credit Suisse and CEO/President of the Fund. He joined Warburg Pincus Asset Management ("WPAM") in 1995 and came to Credit Suisse in 1999 when it acquired WPAM. ---------- (1) Based on NAV and assuming reinvestment of dividends of $0.40 per share. (2) The Citigroup High-Yield Market Index is a broad-based, unmanaged index of high yield securities that is compiled by Citigroup Global Markets Inc. It does not reflect the impact of taxes. Investors cannot invest directly in an index. (3) The Merrill Lynch US High Yield Master IT Index is an unmanaged index that tracks the performance of below-investment-grade, U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. It is a rules-based index that is compiled and distributed by Merrill Lynch & Co. Qualifying bonds must have at least one year remaining until maturity, a fixed coupon schedule and a minimum amount outstanding of US$100 million. Any individual issuer is capped at 2%. Investors cannot invest directly in an index. TOP TEN HOLDINGS (AS A % OF NET ASSETS AS OF 12/31/05) 1. General Motors Acceptance Corp., Global Notes 6.75%, 12/01/14 1.3% 2. Qwest Corp., Rule 144A, Senior Notes 7.625%, 6/15/15 1.1% 3. Newark Group, Inc., Global Senior Subordinated Notes 9.75%, 3/15/14 0.9% 4. Hard Rock Hotel, Inc., Global Notes 8.875%, 6/01/13 0.9% 5. Charter Communication Holdings LLC/Cap Corp., Global Senior Notes 8.75%, 11/15/13 0.8% 6. Chesapeake Energy Corp., Senior Notes 6.875%, 1/15/16 0.8% 7. Levi Strauss & Co., Global Senior Notes 9.75%, 1/15/15 0.8% 8. El Paso Production Holding Co., Global Company Guaranteed 7.75%, 6/01/13 0.7% 9. JSG Funding plc, Rule 144A, Senior Subordinated Notes 7.75%, 4/01/15 0.7% 10. WDAC Subsidiary Corp., Rule 144A, Senior Notes 8.375%, 12/01/14 0.7%
CREDIT QUALITY BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 12/31/05) A 0.1% BBB 0.7 BB 14.0 B 56.0 CCC 22.3 CC 0.7 C 0.2 D 0.4 N/R 1.0 ----- Subtotal 95.4 Time Deposit 3.9 Equities and Other 0.7 ----- Total 100.0% =====
1 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. SCHEDULE OF INVESTMENTS December 31, 2005
PAR RATINGS+ (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- DOMESTIC SECURITIES (86.8%) CORPORATE OBLIGATIONS (86.1%) AEROSPACE (0.7%) $ 300 BE Aerospace, Inc., Series B, Senior Subordinated Notes (B , Caa2) 03/01/08 8.000 $ 301,500 925 L-3 Communication Corp., Global Senior Subordinated Notes (Callable 1/15/10 @ $102.94) (BB+ , Ba3) 01/15/15 5.875 901,875 250 Sequa Corp., Senior Notes (BB- , B1) 08/01/09 9.000 266,875 -------------- 1,470,250 -------------- AIRLINES (0.4%) 900 American Airlines, Inc., Series 01-2, Pass Thru Certificates (B , B1) 10/01/06 7.800 888,887 -------------- AUTOMOBILE MANUFACTURING/VEHICLE PARTS (5.6%) 525 Accuride Corp., Global Company Guaranteed Notes (Callable 2/01/10 @ $104.25) (B- , B3) 02/01/15 8.500 519,750 800 American Tire Distributors Holdings, Inc., Global Senior Notes (Callable 4/01/09 @ $105.38) (CCC+ , Caa2) 04/01/13 10.750 728,000 395 ArvinMeritor, Inc. Notes (BB , Ba2) 03/01/12 8.750 380,187 775 Cambridge Industries, Inc., Senior Subordinated Notes ^ (NR , NR) 07/15/07 10.250 0 400 Cooper-Standard Automotive, Inc., Global Company Guaranteed Notes (Callable 12/15/09 @ $104.19) (B , B3) 12/15/14 8.375 306,000 125 Delphi Corp., Global Notes 0 (NR , NR) 06/15/06 6.550 63,750 350 Dura Operating Corp., Series D, Company Guaranteed (Callable 5/01/06 @ $101.50) (CCC+ , Caa2) 05/01/09 9.000 199,500 1,650 Ford Motor Credit Co., Global Notes (BB+ , Baa3) 10/01/13 7.000 1,411,857 550 General Motors Acceptance Corp., Bonds (BB , Ba1) 11/01/31 8.000 528,230 1,625 General Motors Acceptance Corp., Global Notes (BB , Ba1) 05/15/09 5.625 1,446,817 2,920 General Motors Acceptance Corp., Global Notes (BB , Ba1) 12/01/14 6.750 2,631,124 1,250 Goodyear Tire & Rubber Co., Rule 144A, Senior Notes (Callable 7/01/10 @ $104.50)++ (B- , B3) 07/01/51 9.000 1,237,500 450 Keystone Automotive Operations, Inc., Global Senior Subordinated Notes (Callable 11/1/08 @ $104.88) (B- , Caa1) 11/01/13 9.750 391,500 400 Stanadyne Corp., Global Senior Subordinated Notes (Callable 8/15/09 @ $105.00) (B- , Caa1) 08/15/14 10.000 386,000 575 Stoneridge, Inc., Global Company Guaranteed (Callable 5/01/07 @ $105.75) (B+ , B1) 05/01/12 11.500 587,937 350 Tenneco Automotive, Inc., Global Company Guaranteed Notes (Callable 11/15/09 @ $104.31) (B- , B3) 11/15/14 8.625 332,500 900 Visteon Corp. Global Senior Notes (B- , B3) 08/01/10 8.250 769,500 -------------- 11,920,152 -------------- BROADBAND (0.4%) 750 Level 3 Communications, Inc., Senior Notes (Callable 5/01/06 @ $100.00) (CC , Ca) 05/01/08 9.125 686,250 250 Level 3 Financing, Inc., Global Company Guaranteed Notes (Callable 10/15/07 @ $105.38) (CC , Caa1) 10/15/11 10.750 223,125 -------------- 909,375 -------------- BROADCAST/OUTDOOR (2.1%) 600 Allbritton Communication Co., Global Senior Subordinated Notes (Callable 12/15/07 @ $103.88) (B- , B3) 12/15/12 7.750 606,000 750 Emmis Communications Corp., Global Senior Notes (Callable 1/12/06 @ $100.00) # (B- , B3) 06/15/12 9.314 756,562 175 Nexstar Finance, Inc., Global Senior Subordinated Notes (Callable 1/15/09 @ $103.50) (CCC+ , B3) 01/15/14 7.000 161,219 475 Rainbow National Services LLC, Rule144A, Private Placement Senior Subordinated Notes (Callable 9/01/09 @ $105.19)++ (B , B3) 09/01/14 10.375 534,375 550 Sinclair Broadcast Group, Inc., Global Company Guaranteed Notes (Callable 12/15/06 @ $104.38) (B , B2) 12/15/11 8.750 581,625 750 Sirius Satellite Radio, Inc., Rule 144A, Senior Notes (Callable 9/01/09 @ $104.81)++ (CCC , Caa1) 08/01/13 9.625 742,500 811 WMG Holdings Corp., Global Senior Discount Notes (Callable 12/15/09 @ $104.75)+ (B- , B3) 12/15/14 0.000 571,755 575 Young Broadcasting, Inc., Global Company Guaranteed Notes (Callable 3/01/06 @ $105.00) (CCC , Caa2) 03/01/11 10.000 541,219 -------------- 4,495,255 -------------- BUILDING PRODUCTS (3.5%) 250 Ahern Rentals, Inc., Rule 144A, Secured Notes Notes (Callable 8/15/09 @ $104.63)++ (B- , B3) 08/15/13 9.250 264,375 750 Associated Materials, Inc., Global Senior Discount Notes (Callable 3/01/09 @ $105.63)+ (CCC+ , Caa2) 03/01/14 0.000 371,250 300 Building Materials Corp. of America, Global Secured Notes (Callable 8/01/09 @ $103.88) (B+ , B2) 08/01/14 7.750 291,000 750 Compression Polymers Holding Corp., Rule 144A, Senior Notes (Callable 7/01/09 @ $105.25)++ (B- , B2) 07/01/13 10.500 731,250 300 Dayton Superior Corp., Company Guaranteed Notes (Callable 6/15/07 @ $102.17) (CCC , Caa3) 06/15/09 13.000 228,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 2
PAR RATINGS+ (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- DOMESTIC SECURITIES CORPORATE OBLIGATIONS BUILDING PRODUCTS $ 500 Dayton Superior Corp., Global Secured Notes (Callable 6/15/06 @ $105.63) (B- , B3) 09/15/08 10.750 $ 485,000 1,250 Goodman Global Holdings Co., Inc., Rule 144A, Senior Subordinated Notes (Callable 12/15/08 @ $103.94)++ (B- , Caa1) 12/15/12 7,875 1,168,750 400 Interface, Inc., Global Senior Subordinated Notes (Callable 2/01/09 @ $104.75) (CCC , Caa3) 02/01/14 9.500 400,000 275 Norcraft Cos/Norcraft Finance Corp., Global Senior Subordinated Notes (Callable 11/01/07 @ $104.50) (B- , B3) 11/01/11 9.000 286,000 250 Norcraft Holdings L.P./Norcraft Capital, Global Senior Discount Notes (Callable 9/01/08 @ $104.88)+ (B- , Caa1) 09/01/12 0.000 178,750 750 NTK Holdings, Inc., Global Senior Discount Notes (Callable 9/01/09 @ $105.38) (CCC+ , Caa2) 03/01/14 10.750 472,500 900 Ply Gem Industries, Inc., Global Senior Subordinated Notes (Callable 2/15/08 @ $104.50) (B- , B3) 02/15/12 9.000 803,250 500 RMCC Acquisition Co., Rule144A, Senior Subordinated Notes (Callable 11/01/08 @ $104.75)++ (CCC+ , Caa1) 11/01/12 9.500 505,000 700 THL Buildco (Nortek), Inc., Global Senior Subordinated Notes (Callable 9/01/09 @ $104.25) (CCC+ , Caa1) 09/01/14 8.500 679,000 1,300 Werner Holdings Co., Inc., Series A, Company Guaranteed Notes (Callable 2/21/06 @ $100.00) (CCC+ , Caa3) 11/15/07 10.000 422,500 -------------- 7,286,625 -------------- CABLE (4.7%) 750 Atlantic Broadband Finance LLC, Rule 144A, Senior Subordinated Notes (Callable 1/15/09 @ $104.69)++ (CCC+, Caa1) 01/15/14 9.375 673,125 855 Cablevision SystemsCorp., Series B, Global Senior Notes (B , B3) 04/15/12 8.000 803,700 792 CCH I LLC, Rule 144A, Private Placement Secured Notes (Callable 10/1/10 @ $105.50)++ (CCC-, Caa3) 10/01/15 11.000 669,240 1,700 Charter Communication Holdings II, Senior Notes (Callable 9/15/08 @ $105.13) (CCC- , Caa1) 09/15/10 10.250 1,700,000 1,150 Charter Communication Holdings LLC/Cap Corp., Global Senior Notes (Callable 11/15/08 @ $104.38) (CCC- , B3) 11/15/13 8.750 1,101,125 750 Charter Communications Holdings LLC, Senior Notes (Callable 4/01/06 @ $101.44) (CCC- , Ca) 04/01/09 8.625 558,750 1,450 CSC Holdings, Inc., Rule 144A, Senior Notes++ (B+ , B2) 04/15/12 6.750 1,377,500 150 CSC Holdings, Inc., Series B, Debentures (B+ , B2) 08/15/09 8.125 152,250 530 CSC Holdings, Inc., Series B, Senior Notes (B+ , B2) 04/01/11 7.625 530,000 3,014 DIVA Systems Corp., Series B, Senior Discount Notes (Callable 3/01/06 @ $100.00)^^ (NR , NR) 03/01/08 12.625 75,355 250 Insight Communications Co., Inc., Senior Discount Notes (Callable 2/15/07 @ $104.08)+ (CCC+ , Caa1) 02/15/11 0.000 262,500 500 Insight Midwest/Insight Capital, Global Senior Notes (Callable 11/01/06 @ $103.50) (B , B2) 11/01/10 10.500 528,125 500 Insight Midwest/Insight Capital, Senior Notes (Callable 10/01/06 @ $101.63) (B , B2) 10/01/09 9.750 516,250 150 Mediacom Broadband LLC, Rule144A, Senior Notes (Callable 10/15/10 @ $104.25)++ (B , B2) 10/15/15 8.500 139,687 850 Mediacom LLC/Capital Corp., Senior Notes (Callable 2/15/06 @ $103.94) (B , B3) 02/15/11 7.875 796,875 -------------- 9,884,482 -------------- CAPITAL GOODS (0.6%) 250 Blount, Inc., Senior Subordinated Notes (Callable 8/01/08 @ $104.44) (B , Caa1) 08/01/12 8.875 265,000 350 Case New Holland, Inc., Global Company Guaranteed Notes (Callable 8/01/07 @ $104.62) (BB- , Ba3) 08/01/11 9.250 376,250 0 JII Holdings LLC, Global Secured Notes (Callable 1/01/06 @ $103.25)++ (CCC- , Caa2) 04/01/07 13.000 352 640 Motors& Gears, Inc., Series D, Senior Notes (Callable3/10/06@ $100.00) (CCC , Caa3) 11/15/06 10.750 617,600 -------------- 1,259,202 -------------- CHEMICALS (3.1%) 322 BCP Crystal Holdings Corp., Global Senior Subordinated Notes (Callable 6/15/09 @ $104.81) (B- , B3) 06/15/14 9.625 359,835 455 Crystal U.S. Holdings/U.S. Sub 3, Series B, Global Senior Discount Notes (Callable 10/01/09 @ $105.25)+ (B- , Caa2) 10/01/14 0.000 333,287 350 Equistar Chemicals LP/Equistar Funding Corp., Global Senior Notes (Callable 5/01/07 @ $105.31) (BB- , B2) 05/01/11 10.625 386,750 325 Huntsman Co. LLC, Global Company Guaranteed Notes (Callable 10/15/07 @ $105.81) (BB- , Ba3) 10/15/10 11.625 371,719 264 Huntsman Co. LLC, Global Company Guaranteed Notes (Callable 7/15/08 @ $105.75) (B , B2) 07/15/12 11.500 300,300 250 ISP Chemco, Inc., Series B, Global Company Guaranteed Notes (Callable 7/01/06 @ $105.13) (BB- , B1) 07/01/11 10.250 267,500 600 KI Holdings, Inc., Global Senior Discount Notes (Callable 11/15/09 @ $104.94) + (B- , Caa2) 11/15/14 0.000 396,000 1,100 Lyondell Chemical Co., Global Company Guaranteed (Callable 6/01/08 @ $105.25) (BB- , B1) 06/01/13 10.500 1,255,375 300 Millennium America, Inc., Global Company Guaranteed Notes (BB- , B1) 06/15/08 9.250 325,125 750 Nalco Co., Global Senior Notes (Callable 11/15/07 @ $103.88) (B- , B2) 11/15/11 7.750 774,375 400 Polyone Corp., Global Company Guaranteed Notes (Callable 5/15/07 @ $105.31) (B+ , B3) 05/15/10 10.625 431,000 500 Resolution Performance Products LLC, Global Senior Subordinated Notes (Callable 11/15/06 @ $104.5) (B- , Caa2) 11/15/10 13.500 531,250 357 Terra Capital, Inc., Global Secured Notes (Callable 6/01/07 @ $105.75) (B- , B2) 06/01/10 11.500 399,840
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 3
PAR RATINGS+ (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- DOMESTIC SECURITIES CORPORATE OBLIGATIONS CHEMICALS $ 450 Tronox Worldwide LLC/ Tronox Finance Corp., Rule 144A, Private Placement Senior Notes (Callable 12/01/09 @ $104.75)++ (B+ , B1) 12/01/12) 9.500 $ 461,250 -------------- 6,593,606 -------------- COMPETITIVE LOCAL EXCHANGE CARRIER (0.5%) 750 GCI, Inc., Global Senior Notes (Callable 2/15/09 @ $103.63) (B+ , B2) 02/15/14 7.250 746,250 369 Madison River Capital/Madison River Finance, Senior Notes (Callable 3/01/06 @ $104.42) (B- , B3) 03/01/10 13.250 391,531 -------------- 1,137,781 -------------- CONSUMER PRODUCTS/TOBACCO (4.0%) 400 AAC Group Holding Corp., Global Senior Discount Notes (Callable 10/01/08 @ $105.13)+ (B- , Caa1) 10/01/12 0.000 291,000 650 ALH Finance LLC, Senior Subordinated Notes (Callable 1/15/09 @ $104.25) (CCC+ , B3) 01/15/13 8.500 615,875 400 Ames True Temper, Inc., Global Company Guaranteed Notes (Callable 1/15/07 @ $103.00) # (CCC+ , B3) 01/15/12 8.600 378,000 600 Ames True Temper, Inc., Senior Subordinated Notes (Callable 7/15/08 @ $105.00) (CCC- , Caa2) 07/15/12 10.000 474,000 950 Amscan Holdings, Inc., Global Senior Subordinated Notes (Callable 5/01/09 @ $104.38) (CCC+ , B3) 05/01/14 8.750 805,125 750 Del Laboratories, Inc., Global Company Guaranteed Notes (CCC+ , Caa2) 02/01/12 8.000 596,250 400 Interactive Health LLC, Rule 144A, Senior Notes (Callable 4/01/08 @ $105.69)++ (B- , Caa1) 04/01/11 7.250 326,000 1,100 Johnsondiversey Holdings, Inc., Global Discount Notes (Callable 5/15/07 @ $105.34) + (B-, Caa1) 05/15/13 0.000 880,000 650 PCA LLC/PCA Finance Corp., Global Senior Notes (C , Ca) 08/01/09 11.875 168,187 970 Playtex Products, Inc., Global Company Guaranteed Notes (Callable 6/01/06 @ $104.69) (CCC+ , Caa1) 06/01/11 9.375 1,020,925 299 Prestige Brands, Inc., Global Senior Subordinated Notes (Callable 4/15/08 @ $104.63) (B- , B3) 04/15/12 9.250 296,010 100 Remington Arms Co., Inc., Global Company Guaranteed Notes (Callable 2/01/07 @ $105.25) (CCC- , B3) 02/01/11 10.500 89,500 500 Revlon, Inc., Debentures (CCC , Caa2) 04/01/11 9.500 458,750 525 Samsonite Corp., Global Senior Subordinated Notes (Callable 6/01/08 @ $104.44) (B- , B3) 06/01/11 8.875 546,000 750 Sealy Mattress Co., Global Senior Subordinated Notes (Callable 6/15/09 @ $104.13) (B- , B2) 06/15/14 8.250 776,250 250 Spectrum Brands, Inc., Global Senior Subordinated Notes (Callable 10/01/08 @ $104.25) (B- , B3) 10/01/13 8.500 219,375 450 True Temper Sports, Inc., Company Guaranteed Notes (CCC+ , Caa1) 09/15/11 8.375 407,250 -------------- 8,348,497 -------------- CONTAINERS (2.6%) 600 Berry Plastics Corp., Global Company Guaranteed Notes (Callable 7/15/07 @ $105.38) (B- , B3) 07/15/12 10.750 648,000 500 Constar International Inc., Senior Subordinated Notes (Callable 12/01/07 @ $105.50) (CCC , Caa3) 12/01/12 11.000 367,500 485 Crown Americas LLC, Rule 144A, Private Placement Senior Notes (Callable 11/15/10 @ $103.88)++ (B , B1) 11/15/15 7.750 504,400 525 Graham Packaging Co.,Inc., Global Subordinated Notes (Callable 10/15/09 @ $104.94) (CCC+ , Caa2) 10/15/14 9.875 514,500 250 Graphic Packaging International Corp., Senior Subordinated Notes (Callable 8/15/08 @ $104.75) (B- , B3) 08/15/13 9.500 240,000 300 Intertape Polymer U.S., Inc., Global Senior Subordinated Notes (Callable 8/01/09 @ $104.25) (B- , B3) 08/01/14 8.500 297,610 680 Owens-Brockway Glass, Global Company Guaranteed Notes (Callable 5/15/08 @ $104.13) (B , B2) 05/15/13 8.250 705,500 850 Owens-Illinois, Inc., Senior Notes (B , B3) 05/15/07 8.100 873,375 850 Pliant Corp., Company Guaranteed (Callable 6/1/06 @ $106.50) (CCC+ , Caa2) 06/01/10 13.000 170,000 500 Solo Cup Co., Global Senior Subordinated Notes (Callable 2/15/09 @ $104.25) (B- , Caa1) 02/15/14 8.500 440,000 275 U.S. Can Corp., Global Company Guaranteed Notes (Callable 7/15/07 @ $105.44) (CCC+ , Caa3) 07/15/10 10.875 287,375 425 U.S. Can Corp., Series B, Global Company Guaranteed Notes (Callable 2/03/06 @ $106.19) (CCC+ , Caa3) 10/01/10 12.375 402,687 -------------- 5,450,947 -------------- DIVERSIFIED TELECOMMUNICATIONS (2.6%) 525 Cincinnati Bell, Inc., Global Senior Subordinated Notes (Callable 1/15/09 @ $104.19) (B- , B3) 01/15/14 8.375 519,094 550 Hawaiian Telecom Communications, Inc., Rule 144A, Senior Notes (Callable 5/01/09 @ $104.88)++ (CCC+ , B3) 05/01/13 9.750 540,375 300 LCI International, Inc., Senior Notes (NR , NR) 06/15/07 7.250 303,000 1,400 Qwest Capital Funding, Inc., Global Company Guaranteed Notes (B , B3) 02/15/11 7.250 1,424,500 300 Qwest Communications International, Inc., Global Company Guaranteed Notes (Callable 2/15/08 @ $103.62) (B , B2) 02/15/11 7.250 307,500 2,164 Qwest Corporation, Rule 144A, Senior Notes++ (BB , Ba3) 06/15/15 7,625 2,326,300 -------------- 5,420,769 --------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 4
PAR RATINGS+ (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- DOMESTIC SECURITIES CORPORATE OBLIGATIONS ENERGY-OTHER (2.3%) $ 1,050 Dynegy Holdings, Inc., Rule 144A, Secured Notes (Callable 7/15/08 @ $105.06)++ (B- ,B1) 07/15/13 10.125 $ 1,191,750 250 Dynegy Holdings, Inc., Senior Notes (CCC+ , B2) 04/01/11 6.875 247,500 500 El Paso Corp., Senior Notes (B- , Caa1) 05/15/11 7.000 498,750 250 El Paso Natural Gas, Series A, Global Senior Notes (Callable 8/01/07 @ $103.81) (B , B1) 08/01/10 7.625 264,145 200 Giant Industries, Inc., Company Guaranteed Notes (Callable 5/15/09 @ $104.00) (B- , B3) 05/15/14 8.000 207,500 162 Giant Industries, Inc., Global Company Guaranteed Notes (Callable 5/15/07 @ $105.50) (B- , B3) 05/15/12 11.000 181,035 250 Inergy LP/Inergy Finance Corp., Global Senior Notes (Callable 12/15/19 @ $103.44) (B , B1) 12/15/14 6.875 228,750 500 Reliant Energy, Inc., Global Secured Notes (Callable 7/15/08 @ $104.75) (B+ , B1) 07/15/13 9.500 503,750 250 Reliant Energy, Inc., Secured Notes (Callable 12/15/09 @ $103.38) (B+ , B1) 12/15/14 6.750 219,375 1,175 Williams Companies, Inc., Notes (B+ , B1) 03/15/12 8.125 1,286,625 -------------- 4,829,180 -------------- ENVIRONMENTAL SERVICES (0.7%) 1,100 Allied Waste North America, Inc., Series B, Senior Notes (Callable 4/15/09 @ $103.69) (B , Caa1) 04/15/14 7.375 1,075,250 400 Waste Services, Inc., Global Senior Subordinated Notes (Callable 4/15/09 @ $104.75) (CCC , Caa2) 04/15/14 9.500 402,000 -------------- 1,477,250 -------------- FINANCE - OTHER (0.6%) 250 E*Trade Financial Corp., Global Senior Notes (Callable 6/15/08 @ $104.00) (B+ , B3) 06/15/11 8.000 261,250 315 E*Trade Financial Corp., US Domestic Senior Notes (Callable 12/01/10 @ $103.94) (B+ , B1) 12/01/15 7.875 326,812 700 Insurance Auto Auctions, Inc. Global Company Guaranteed Notes (Callable 4/01/09 @ $105.50) (CCC+ , Caa1) 04/01/13 11.000 739,129 -------------- 1,327,191 -------------- FOOD PROCESSORS/BEVERAGE/BOTTLING (1.7%) 100 Agrilink Foods, Inc., Company Guaranteed Notes (Callable 11/01/06 @ $100.00) (B- , B3) 11/01/08 11.875 102,500 800 Bear Creek Corp., Rule 144A, Senior Notes (Callable 3/01/09 @ $104.50)++ (B- , B3) 03/01/13 9.000 808,000 471 Eagle Family Foods, Inc., Series B, Company Guaranteed Notes (Callable 1/15/06 @ $100.00) (CCC , Caa2) 01/15/08 8.750 357,580 250 Leiner Health Products, Inc., Global Senior Subordinated Notes (Callable 6/01/08 @ $105.50) (CCC+ , Caa1) 06/01/12 11.000 236,250 250 Le-Natures, Inc., Rule 144A, Senior Subordinated Notes (Callable 6/15/08 @ $104.25)++ (CCC+ , B3) 06/15/13 9.000 263,750 400 National Beef Packing Co. LLC, Global Senior Notes (Callable 8/01/07 @ $105.25) (B- , B3) 08/01/11 10.500 416,000 220 National Wine & Spirits, Inc., Company Guaranteed Notes (Callable 1/15/06 @ $100.00) (CCC+ , B3) 01/15/09 10.125 223,300 700 Pinnacle Foods Holding Corp., Global Senior Subordinated Notes (Callable 12/01/08 @ $104.13) (B- , B3) 12/01/13 8.250 670,250 250 Swift & Co., Global Company Guaranteed Notes (Callable 10/01/06 @ $105.06) (B+ , B2) 10/01/09 10.125 259,375 300 Swift & Co., Global Senior Subordinated Notes (Callable 10/01/06 @ 106.25) (B , B3) 01/01/10 12.500 317,250 -------------- 3,654,255 -------------- GAMING (5.9%) 850 155 ETropicana LLC, Global Secured Notes (Callable 4/01/09 @ $104.38) (B- , B3) 04/01/12 8.750 822,375 400 Aztar Corp., Global Senior Subordinated Notes (Callable 06/15/09 @ $103.94) (B+ , Ba3) 06/15/14 7.875 421,000 500 Circus & Eldorado/Silver Legacy Capital Corp., Global First Mortgage Notes (Callable 3/01/07 @ $105.06) (B , B1) 03/01/12 10.125 531,250 1,740 Hard Rock Hotel, Inc., Global Notes (Callable 6/01/08 @ $104.44) (B , B3) 06/01/13 8.875 1,883,550 300 Herbst Gaming, Inc., Global Senior Subordinated Notes (Callable 6/01/08 @ $104.06) (B- , B3) 06/01/12 8.125 313,500 400 Inn of the Mountain Gods, Global Senior Notes (Callable 11/15/07 @ $106.00) (B , B3) 11/15/10 12.000 398,000 400 Isle of Capri Casinos, Inc., Global Senior Subordinated Notes (Callable 3/01/09 @ $103.50) (B , B2) 03/01/14 7.000 392,000 750 Majestic Star Casino LLC, Company Guaranteed Notes (Callable 10/15/07 @ $104.75) (BB- , B2) 10/15/10 9.500 793,125 650 Majestic Star Casino LLC, Rule 144A, Private Placement Secured Notes (Callable 10/15/08 @ $104.88)++ (B- , B3) 01/15/11 9.750 658,125 750 MGM Mirage, Inc., Company Guaranteed Notes (BB , Ba2) 10/01/09 6.000 749,062 375 MGM Mirage, Inc., Company Guaranteed Notes (BB , Ba2) 09/15/10 8.500 408,281 450 MGM Mirage, Inc., Company Guaranteed Notes (B+ , Ba3) 02/01/11 8.375 483,750 250 MGM Mirage, Inc., Global Senior Notes (BB , Ba2) 09/01/12 6.750 254,687 350 Mohegan Tribal Gaming Authority, Global Senior Subordinated Notes (Callable 8/15/09 @ $103.56) (B+ , Ba3) 08/15/14 7.125 360,062
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 5
PAR RATINGS+ (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- DOMESTIC SECURITIES CORPORATE OBLIGATIONS GAMING $ 500 OED Corp., Global Company Guaranteed Notes (Callable 4/15/08 @ $104.38) (B , B2) 04/15/12 8.750 $ 490,000 600 Resorts International Hotel and Casino, Inc., Global Company Guaranteed Notes (Callable 3/15/07 @ $106.00) (B , B2) 03/15/09 11.500 667,500 400 River Rock Entertainment Authority, Senior Notes (Callable 11/01/07 @ $104.88) (B+ , B2) 11/01/11 9.750 433,000 550 Riviera Holdings Corp., Global Company Guaranteed Notes (Callable 6/15/06 @ $105.50) (B , B2) 06/15/10 11.000 594,687 100 Seneca Gaming, Corp., Global Senior Notes (Callable 5/01/08 @ $103.63) (BB- , B2) 05/01/12 7.250 101,125 500 Station Casinos, Inc., Global Senior Subordinated Notes (Callable 3/01/09 @ $102.58) (B+ , Ba3) 03/01/16 6.875 513,750 210 Waterford Gaming LLC, Rule 144A, Senior Notes++ (B+ , B1) 09/15/12 8.625 224,700 226 Windsor Woodmont Black Hawk, Series B, First Mortgage Notes ^^ (NR , NR) 03/15/05 13.000 0 900 WYNN Las Vegas LLC, Global 1st Mortgage (Callable 12/1/09 @ $103.31) (B+ , B2) 12/01/14 6.625 879,750 -------------- 12,373,279 -------------- HEALTHCARE FACILITIES/SUPPLIES (3.7%) 250 Beverly Enterprises, Inc., Global Senior Subordinated Notes (Callable 6/15/09 @ $103.94) (B , B2) 06/15/14 7.875 268,750 800 CDRV Investors, Inc., Global Senior Discount Notes (Callable 1/01/10 @ $104.81) + (B- , Caa2) 01/01/15 0.000 494,000 250 Concentra Operating Corp., Global Company Guaranteed Notes (Callable 8/15/07 @ $104.75) (B- , B3) 08/15/10 9.500 260,000 500 Fisher Scientific International Inc., Global Senior Subordinated Notes (Callable 8/15/09 @ $103.38) (BB+ , Ba2) 08/15/14 6.750 523,750 350 HCA Inc., US Domestic Notes (BB+ , Ba1) 10/01/12 6.300 353,498 650 Iasis Healthcare LLC/Iasis Capital Corp., Global Senior Subordinated Notes (Callable 6/15/09 @ $104.38) (B- , B3) 06/15/14 8.750 685,750 600 Medquest, Inc., Series B, Company Guaranteed Notes (Callable 8/15/07 @ $105.94) (CCC+ , Caa1) 08/15/12 11.875 582,000 1,000 MQ Associates, Inc., Senior Discount Notes (Callable 8/15/08 @ $109.00) + (CCC+ , Caa3) 08/15/12 0.000 575,000 735 Tenet Healthcare Corp., Global Senior Notes (B , B3) 07/01/14 9.875 747,862 500 Tenet Healthcare Corp., Rule 144A, Senior Notes ++ (B , B3) 02/01/15 9.250 498,750 1,000 Triad Hospitals, Inc., Senior Subordinated Notes (Callable 11/15/08 @ $103.50) (B+ , B3) 11/15/13 7.000 1,007,500 800 Universal Hospital Services, Inc., Global Senior Notes (Callable 11/01/07 @ $105.06) (B- , B3) 11/01/11 10.125 832,000 950 Vanguard Health Holding II, Global Senior Subordinated Notes (Callable 10/01/09 @ $104.50) (CCC+ , Caa1) 10/01/14 9.000 1,014,125 -------------- 7,842,985 -------------- HOME BUILDERS (1.8%) 550 Ashton Woods USA LLC/Finance Co., Rule 144A, Private Placement Senior Subordinated Notes (Callable 10/01/10 @ $104.75) ++ (B- , B3) 10/01/15 9.500 498,437 500 K Hovnanian Enterprises, Inc., Global Company Guaranteed Notes (BB , Ba1) 01/15/16 6.250 466,413 750 KB HOME, Senior Notes (BB+ , Ba1) 06/15/15 6.250 729,559 625 Standard Pacific Corp., Senior Notes (BB , Ba2) 08/15/15 7.000 579,687 750 Technical Olympic USA, Inc., Global Senior Subordinated Notes (B- , B2) 01/15/15 7.500 633,750 725 WCI Communities, Inc. Company Guaranteed Notes (Callable 5/01/07 @ $104.56) (B+ , Ba3) 05/01/12 9.125 725,000 250 William Lyon Homes, Inc., Global Senior Notes (Callable 2/15/09 @ $103.75) (B , B2) 02/15/14 7.500 217,500 -------------- 3,850,346 -------------- INDUSTRIAL (1.4%) 400 Altra Industrial Motion, Rule 144A, Secured Notes (Callable 12/01/08 @ $104.50) ++ (CCC+ , B3) 12/01/11 9.000 390,000 250 Amsted Industries, Inc., Rule 144A, Senior Notes (Callable 10/15/07 @ $105.13) ++ (B , B3) 10/15/11 10.250 268,750 600 Amtrol, Inc., Senior Subordinated Notes (CCC- , Caa3) 12/31/06 10.625 570,000 1,000 Coleman Cable, Inc., Global Company Guaranteed Notes (Callable 10/1/0/08 @ $104.94) (B- , B3) 10/01/12 9.875 815,000 400 Polypore, Inc., Global Senior Subordinated Notes (Callable 5/15/08 @ $104.38) (CCC+ , Caa2) 05/15/12 8.750 354,000 575 Sanmina- SCI Corp., Global Company Guaranteed Notes (Callable 3/01/09 @ $3/01/05) (B , B1) 03/01/13 6.750 549,844 -------------- 2,947,594 -------------- LEISURE (2.1%) 730 Affinity Group Holding, Global Senior Subordinated Notes (Callable 2/15/08 @ $105.44) (B- , Caa1) 02/15/12 10.875 712,482 250 Affinity Group, Inc., Global Senior Subordinated Notes (Callable 2/15/08 @ $104.50) (B- , B3) 02/15/12 9.000 250,938
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 6
PAR RATINGS+ (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- DOMESTIC SECURITIES CORPORATE OBLIGATIONS LEISURE $ 400 AMC Entertainment, Inc., Global Senior Subordinated Notes (Callable 3/01/09 @ $104.00) (CCC+ , B3) 03/01/14 8.000 $ 364,000 650 AMC Entertainment, Inc., Senior Subordinated Notes (Callable 2/01/07 @ $104.94) (CCC+ , B3) 02/01/12 9.875 640,250 350 Bally Total Fitness Holding Corp., Global Senior Notes (Callable 7/15/07 @ $105.25) (CCC- , Caa1) 07/15/11 10.500 362,250 500 Bluegreen Corp., Series B, Company Guaranteed Notes (Callable 4/01/06 @ $100.00) (B- , B3) 04/01/08 10.500 500,000 250 Cinemark USA, Inc., Global Senior Subordinated Notes (Callable 2/01/08 @ $104.50) (B- , B3) 02/01/13 9.000 265,625 400 Cinemark, Inc., Global Senior Discount Notes (Callable 3/15/09 @ $104.88) + (B- , Caa1) 03/15/14 0.000 298,000 350 Six Flags, Inc., Global Senior Notes (Callable 4/15/08 @ $104.88) (CCC , Caa1) 04/15/13 9.750 345,188 700 Six Flags, Inc., Global Senior Notes (Callable 6/01/09 @ $104.81) (CCC , Caa1) 06/01/14 9.625 684,250 ------------- 4,422,983 ------------- LODGING (0.6%) 425 Felcor Lodging LP, Global Company Guaranteed Notes (B- , B1) 06/01/11 9.000 467,500 600 Host Marriott LP, Global Company Guaranteed Notes (Callable 3/15/10 @ $103.19) (BB- , Ba2) 03/15/15 6.375 601,500 200 San Pasqual Casino, Rule 144A, Notes (Callable 9/15/09 @ $104.00)++ (B+ , B2) 09/15/13 8.000 204,000 ------------- 1,273,000 ------------- METALS & MINING (2.6%) 250 AK Steel Corp., Company Guaranteed Notes (Callable 2/15/06 @ $101.31) (B+ , B1) 02/15/09 7.875 238,750 450 AK Steel Corp., Global Company Guaranteed Notes (Callable 6/15/07 @ $103.88) (B+ , B1) 06/15/12 7.750 408,375 900 Aleris International, Inc., Global Company Guaranteed Notes (Callable 11/15/09 @ $104.50) (B , NR) 11/15/14 9.000 931,500 500 Alpha Natural Resources, Company Guaranteed Notes (Callable 6/01/08 @ $105.00) (B- , B3) 06/01/12 10.000 543,125 500 American Rock Salt Co. LLC, Global Secured Notes (Callable 3/15/09 @ $104.75) (B- , B3) 03/15/14 9.500 507,500 750 Egden Acquisition Corp., Global Secured Notes (Callable 2/01/08 @ $104.94) (B- , B3) 02/01/11 9.875 731,250 1,000 International Steel Group, Inc., Global Senior Notes (BB , Ba2) 04/15/14 6.500 1,005,000 675 Southern Peru Cooper Corp., Rule 144A, Notes++ (BBB- , Ba1) 07/27/35 7.500 674,250 250 WCI Steel, Inc., Series B, Senior Notes 0 (NR , NR) 12/01/04 10.000 163,750 500 Wise Metals Group LLC, Global Secured Notes (Callable 5/15/08 @ $105.13) (CCC+ , Caa1) 05/15/12 10.250 382,500 ------------- 5,586,000 ------------- PAPER & FOREST PRODUCTS (2.1%) 550 Appleton Papers, Inc., Global Senior Subordinated Notes (Callable 6/15/09 @ $104.88) (B+ , B3) 06/15/14 9.750 517,000 434 Caraustar Industries, Inc., Global Company Guaranteed Notes (Callable 4/01/06 @ $105.25) (B- , Caa1) 04/01/11 9.875 444,850 850 Cellu Tissue Holdings, Inc., Global Secured Notes (Callable 3/15/07 @ $107.31) (B , B2) 03/15/10 9.750 845,750 2,250 Newark Group, Inc., Global Senior Subordinated Notes (Callable 3/15/09 @ $104.88) (B- , Caa1) 03/15/14 9.750 1,991,250 600 Stone Container Corp., Global Senior Notes (Callable 7/01/07 @ $104.19) (CCC+ , B2) 07/01/12 8.375 583,500 ------------- 4,382,350 ------------- PHARMACEUTICALS (0.3%) 650 Athena Neuro Finance LLC, Company Guaranteed Notes (B , B3) 02/21/08 7.250 637,813 ------------- PUBLISHING (3.5%) 500 CBD Media Holdings/CBD Finance, Global Senior Notes (Callable 7/15/08 @ $104.63) (CCC+ , Caa2) 07/15/12 9.250 502,500 1,100 Cenveo Corp., Global Senior Subordinated Notes (Callable 12/01/08 @ $103.94) (B- , B3) 12/01/13 7.875 1,067,000 500 Dex Media, Inc., Global Discount Notes (Callable 11/15/08 @ $104.50)+ (B , B3) 11/15/13 0.000 400,000 1,100 Dex Media, Inc., Global Notes (Callable 11/15/08 @ $104.00) (B , B3) 11/15/13 8.000 1,127,500 750 Haights Cross Operating Co., Global Company Guaranteed Notes (Callable 8/15/08 @ $105.88) (CCC , Caa1) 08/15/11 11.750 797,813 800 Houghton Mifflin Co., Global Senior Subordinated Notes (Callable 2/01/08 @ $104.94) (B- , Caa1) 02/01/13 9.875 859,000 250 Houghton Mifflin Co., Global Senior Discount Notes (Callable 10/15/08 @ $105.75)+ (B- , Caa2) 10/15/13 0.000 197,500 2,000 Premier Graphics, Inc., Company Guaranteed Notes (Callable 7/15/05 @ $100.00)^^ (NR , NR) 12/01/05 11.500 0 350 PRIMEDIA, Inc., Global Senior Notes (Callable 5/15/08 @ $104.00) (B , B2) 05/15/13 8.000 297,938 150 Vertis, Inc., Global Secured Notes (Callable 4/01/06 @ $105.19) (CCC , B3) 04/01/09 9.750 156,188
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 7
PAR RATINGS+ (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- DOMESTIC SECURITIES CORPORATE OBLIGATIONS PUBLISHING $ 635 Vertis, Inc., Series B, Global Company Guaranteed Notes (Callable 6/15/06 @ $105.44) (CCC , Caa1) 06/15/09 10.875 $ 628,650 1,500 WDAC Subsidiary Corp., Rule 144A, Senior Notes++ (CCC+ , Caa1) 12/01/14 8.375 1,460,625 ------------- 7,494,714 ------------- RESTAURANTS (2.1%) 500 Buffets, Inc., Global Senior Subordinated Notes (Callable 7/15/06 @ $105.63) (CCC , B3) 07/15/10 11.250 512,500 150 Carrols Corp., Global Company Guaranteed Notes (Callable 1/15/09 @ $104.50) (B- , B3) 01/15/13 9.000 146,625 500 Denny's Corp./Denny's Holdings Corp., Global Guaranteed Notes (Callable 10/01/08 @ $105.00) (CCC+ , Caa1) 10/01/12 10.000 510,000 750 Friendly Ice Cream Corp., Global Senior Notes (Callable 6/15/08 @ $104.19) (B- , B2) 06/15/12 8.375 671,250 300 Morton's Restaurant Group, Inc., Global Secured Notes (Callable 7/01/07 @ $105.30) (B- , B2) 07/10/10 7.500 298,500 400 O'Charley's, Inc., Global Senior Subordinated Notes (Callable 11/01/08 @ $104.50) (B , Ba3) 11/01/13 9.000 408,000 1,247 Romacorp, Inc., Senior Notes>> (NR , NR) 12/31/08 10.500 349,272 850 Sbarro, Inc., Company Guaranteed Notes (Callable 9/15/06 @ $101.84) (CCC+ , Caa2) 09/15/09 11.000 850,000 850 Uno Restaurant Corp., Rule 144A, Senior Notes (Callable 2/15/08 @ $110.00)++ (B- , B3) 02/15/11 10.000 769,250 ------------- 4,515,397 ------------- RETAIL - FOOD & DRUG (1.3%) 350 Delhaize America, Inc., Global Company Guaranteed Notes (BB+ , Ba1) 04/15/11 8.125 383,273 500 Duane Reade, Inc., Global Senior Subordinated Notes (Callable 8/01/08 @ $104.88) (CCC- , Caa2) 08/01/11 9.750 337,500 400 General Nutrition Center, Global Company Guaranteed Notes (Callable 1/15/08 @ $104.31) (B- , B3) 01/15/11 8.625 388,000 700 Gregg Appliances Inc. Global Company Guaranteed Notes (Callable 2/01/09 @ $104.50) (B , B2) 02/01/13 9.000 637,000 750 Rite Aid Corp., Global Company Guaranteed Notes (Callable 1/15/10 @ $103.75) (B+ , B2) 01/15/15 7.500 712,500 375 Stater Brothers Holdings, Inc., Global Senior Notes (Callable 6/15/08 @ $104.06) (BB- , B1) 06/15/12 8.125 373,125 ------------- 2,831,398 ------------- RETAIL STORES (3.0%) 625 Asbury Automotive Group Co., Global Company Guaranteed Notes (Callable 6/15/07 @ $104.50) (B , B3) 06/15/12 9.000 628,125 750 Brookstone Company, Inc., Rule 144A, Secured Notes (Callable 10/15/09 @ $106.00)++ (B , B3) 10/15/12 12.000 705,000 500 CSK Auto, Inc., Global Company Guaranteed Notes (Callable 1/15/09 @ $103.50) (B- , B2) 10/15/14 7.000 455,000 500 Finlay Fine Jewelry Corp., Global Senior Notes (Callable 6/01/08 @ $104.19) (B , B3) 06/01/12 8.375 452,500 703 Flooring America, Inc., Series B, Company Guaranteed Notes (Callable 12/13/06 @ $100.00)^^ (NR , NR) 10/15/07 9.250 0 625 GSC Holdings Corp., Rule 144A, Company Guaranteed Notes (Callable 10/01/09 @ $104)++ (B+ , Ba3) 10/01/12 8.000 590,625 500 Intcomex, Inc., Rule 144A, Secured Notes (Callable 1/15/07 @ $106.00)++ (B- , Caa1) 01/15/11 11.750 493,750 550 JC PenneyCo., Inc., Series MTNA, Notes (BB+ , Ba1) 10/15/15 6.875 598,217 500 Nebraska Book Co., Inc., Global Senior Subordinated Notes (Callable 3/15/08 @ $104.31) (CCC+ , Caa1) 03/15/12 8.625 462,500 520 Neiman Marcus Group, Inc., Rule 144A, Senior Subordinated Notes (Callable 10/15/10 @ $105.19)++ (B- , B3) 10/15/15 10.375 531,050 1,000 Southern States Cooperative, Inc., Rule 144A, Senior Notes (Callable 11/01/07 @ $108.00)++ (B , B3) 11/01/10 10.500 1,055,000 250 United Auto Group, Inc., Global Company Guaranteed Notes (Callable 3/15/07 @ $104.81) (B , B3) 03/15/12 9.625 264,375 ------------- 6,236,142 ------------- SATELLITE (0.6%) 750 Echostar DBS Corp., Global Company Guaranteed Notes (BB- , Ba3) 10/01/14 6.625 722,813 545 PanAmSat Corp., Global Company Guaranteed Notes (Callable 8/15/09 @ $104.50) (B+ , B1) 08/15/14 9.000 573,613 ------------- 1,296,426 ------------- SECONDARY OIL & GAS PRODUCERS (2.9%) 250 Belden & Blake Corp., Global Secured Notes (Callable 7/15/08 @ $104.38) (CCC+ , B3) 07/15/12 8.750 256,250 1,627 Chesapeake Energy Corp., Senior Notes (Callable 1/15/09 @ $103.44) (BB , Ba2) 01/15/16 6.875 1,675,810 1,500 El Paso Production Holding Co., Global Company Guaranteed Notes (Callable 6/01/08 @ $103.88) (B , B3) 06/01/13 7.750 1,563,750
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 8
PAR RATINGS+ (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- DOMESTIC SECURITIES CORPORATE OBLIGATIONS SECONDARY OIL & GAS PRODUCERS $ 300 Fisher Communications, Inc., Global Senior Notes (Callable 9/15/09 @ $104.31) (B- , B2) 09/15/14 8.625 $ 318,000 900 Forest Oil Corp., Global Senior Notes (BB- , Ba3) 06/15/08 8.000 942,750 300 Plains E&P Co., Series B, Global Senior Subordinated Notes (Callable 7/01/07 @ $104.38) (B+ , Ba3) 07/01/12 8.750 324,750 500 Pogo Producing Co., Series B, Senior Subordinated Notes (Callable 4/15/06 @ $104.13) (B+ , Ba3) 04/15/11 8.250 525,000 200 Range Resources, Corp., Global Company Guaranteed Notes (Callable 3/15/10 @ $103.19) (B , B2) 03/15/15 6.375 197,000 80 Vintage Petroleum, Inc., Senior Subordinated Notes (B , B1) 05/15/11 7.875 84,000 300 Whiting Petroleum Corp., Senior Subordinated Notes (B- , B2) 05/01/12 7.250 305,250 ------------- 6,192,560 ------------- SERVICES (4.8%) 400 Allied Security Escrow Corp., Global Senior Subordinated Notes (Callable 7/15/08 @ $105.69) (CCC+ , Caa1) 07/15/11 11.375 387,617 600 Brand Services, Inc., Global Company Guaranteed (Callable 10/15/07 @ $106.00) (CCC+ , Caa1) 10/15/12 12.000 633,000 750 Di Finance/Dyncorp International, Series B, Global Senior Subordinated Notes (Callable 2/15/09 @ $104.75) (B- , Caa1) 02/15/13 9.500 783,750 300 Hertz Corp., Rule 144A, Private Placement Senior Notes (Callable 1/01/10 @ $104.44)++ (B , B3) 01/01/14 8.875 307,125 400 Hertz Corp., Rule144A, Private Placement Senior Subordinated Notes (Callable 1/01/11 @ $105.25)++ (B-, B3) 01/01/16 10.500 414,000 800 Hydrochem Industrial Services, Inc., Rule 144A, Senior Subordinated Notes (Callable 2/15/09 @ $104.63)++ (CCC+ , Caa1) 02/15/13 9.250 772,000 400 Integrated Alarm Services Group, Inc., Rule 144A, Secured Notes (Callable 11/15/08 @ $106.00)++ (B- , B3) 11/15/11 12.000 398,000 350 Iron Mountain, Inc., Company Guaranteed Notes (Callable 4/01/07 @ $102.88) (B , Caa1) 04/01/13 8.625 366,625 300 Iron Mountain, Inc., US Domestic Company Guaranteed Notes (Callable 7/01/08 @ $103.31) (B , Caa1) 01/01/16 6.625 280,500 500 Knowledge Learning Corp., Inc., Rule144A, Company Guaranteed Notes (Callable 2/01/10 @ $103.88)++ (B- , B3) 02/01/15 7.750 477,500 815 La Petite Academy, Inc., Series B, Company Guaranteed Notes (Callable 5/15/06 @ $100.00) (CC , Ca) 05/15/08 10.000 709,050 250 Language Line Holdings, Inc., Global Senior Subordinated Notes (Callable 6/15/08 @ $105.56) (CCC+ , Caa1) 06/15/12 11.125 233,750 250 Mac-Gray Corp., Global Senior Notes (Callable 8/15/10 @ $103.81) (BB- , B1) 08/15/15 7.625 253,125 300 Muzak LLC/Muzak Finance Corp., Global Senior Notes (Callable 2/15/06 @ $105.00) (CCC- , Caa2) 02/15/09 10.000 263,250 700 Rent-Way, Inc., Global Secured Notes (B- , B3) 06/15/10 11.875 748,125 400 SGSInternational, Inc., Rule 144A, Private Placement Senior Subordinated Notes (Callable 12/15/09 @ $106.00)++ (B- , Caa1) 12/15/13 12.000 402,657 450 Stewart Enterprises, Inc., Rule 144A, Private Placement Senior Notes (Callable 2/15/09 $103.13)++ (BB- , B1) 02/15/13 6.250 434,250 625 Stripes Acquisition LLC, Rule 144A, Private Placement Senior Notes (Callable 12/15/09 @ $105.31)++ (B , B2) 12/15/13 10.625 637,500 425 United Rentals North America, Inc., Global Company Guaranteed Notes (Callable 8/15/09 @ $103.25) (BB- , B3) 02/15/12 6.500 415,969 500 United Rentals North America, Inc., Global Senior Subordinated Notes (Callable 2/15/09 @ $103.50) (B+ , Caa1) 02/15/14 7.000 470,000 825 Williams Scotsman, Inc., Global Company Guaranteed Notes (Callable (Callable 2/15/09 @ $103.50) (B , B3) 10/01/15 8.500 858,000 ------------- 10,245,793 ------------- TECHNOLOGY (2.3%) 825 Amkor Technology, Inc., Global Senior Notes (CCC+ , Caa1) 05/15/13 7.750 721,875 159 Ampex Corp., Secured Notes^ (NR , NR) 08/15/08 12.000 159,481 350 Spansion, Inc., Rule 144A, Private Placement Senior Notes (Callable 1/15/11 @105.62)++ (B , Caa1) 01/15/16 11.250 334,250 500 SunGard Data Systems, Inc., Rule 144A, Private Placement Senior Unsecured Notes (Callable 8/15/09 @ $104.56)++ (B- , B3) 08/15/13 9.125 520,000 1,000 SunGard Data Systems, Inc., Rule 144A, Senior Subordinated Notes (Callable 8/15/10 @ $105.13)++ (B- , Caa1) 08/15/15 10,250 1,005,000 600 Viasystems, Inc., Senior Subordinated Notes (CCC+ , Caa2) 01/15/11 10.500 580,500 500 Worldspan LP., Global Company Guaranteed Notes (Callable 8/15/06 @ $103.00)# (CCC+ , B3) 02/15/11 10.590 437,500 950 Xerox Corp., Senior Notes (Callable 6/15/08 @ $103.81) (BB- , Ba2) 06/15/13 7.625 1,007,000 ------------- 4,765,606 ------------- TEXTILE/APPAREL/SHOE MANUFACTURING (1.9%) 250 BGF Industries, Inc., Series B, Senior Subordinated Notes (Callable 1/15/06 @ $101.25) (CCC- , Ca) 01/15/09 10.250 254,375 1,600 Levi Strauss& Co., Global Senior Notes (Callable 1/15/10 @ $104.88) (B- , Caa2) 01/15/15 9.750 1,672,000 735 Levi Strauss& Co., Global Senior Notes (Callable 12/15/07 @ $106.13) (B- , Caa2) 12/15/12 12.250 823,200
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 9
PAR RATINGS+ (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- DOMESTIC SECURITIES CORPORATE OBLIGATIONS TEXTILE/APPAREL/SHOE MANUFACTURING $ 500 Levi Strauss & Co., Global Senior Unsubordinated Notes (Callable 4/01/07 @ $102.00)# (B- , Caa2) 04/01/12 9.280 $ 506,250 400 Phillips Van-Heusen Corp., Global Senior Notes (Callable 2/15/08 @ $103.63) (BB , B1) 02/15/11 7.250 408,000 500 Propex Fabrics, Inc., Global Company Guaranteed Notes (Callable 12/01/08 @ $105.00) (B- , Caa1) 12/01/12 10.000 448,750 ------------- 4,112,575 ------------- TOWER (0.3%) 525 American Tower Corp., Global Senior Notes (Callable 10/15/08 @ $103.56) (BB- , B1) 10/15/12 7.125 542,063 ------------- TRANSPORTATION/OTHER (0.2%) 195 H-Line Finance Holding Corp., Global Senior Discount Notes (Callable 4/01/08 @ $105.50)+ (CCC+ , Caa2) 04/01/13 0.000 162,338 237 Horizon Lines LLC, Global Company Guaranteed Notes (Callable 11/01/08 @ $104.50) (CCC+ , B3) 11/01/12 9.000 250,628 ------------- 412,966 ------------- UTILITIES (3.0%) 37 AES Corp., Senior Notes (B- , B1) 06/01/09 9.500 39,603 400 AES Corp., Senior Notes (B- , B1) 03/01/14 7.750 421,500 400 Allegheny Energy Supply Company LLC, Global Notes (B , Ba3) 03/15/11 7.800 438,000 400 Aquila, Inc., Senior Notes (B- , B2) 11/15/09 7.625 410,000 800 Calpine Generating Co., Global Secured Notes (Callable 4/01/08 @ $103.50)# (D , Caa1) 04/01/10 10.041 836,000 250 CMS Energy Corp., Global Senior Notes (B+ , B1) 08/01/10 7.750 263,438 700 CMS Energy Corp., Senior Notes (B+ , B1) 01/15/09 7.500 724,500 500 Edison Mission Energy, Global Senior Notes (B+ , B1) 08/15/08 10.000 550,000 500 Edison Mission Energy, Senior Notes (B+ , B1) 06/15/09 7.730 518,750 400 Midwest Generation LLC, Global Secured Notes (Callable 5/01/09 @ $104.38) (B , B1) 05/01/34 8.750 442,500 500 Mirant Americas Generation LLC, Senior Notes^^ (NR , NR) 05/01/06 7.625 612,500 300 Mirant Corp., Rule 144A, Senior Notes ++^^ (NR , NR) 07/15/04 7.400 373.500 248 NRG Energy, Inc., Global Company Guaranteed Notes (Callable 12/15/08 @ $104.00) (B , B1) 12/15/13 8.000 277,760 300 Sierra Pacific Resources, Global Senior Notes (Callable 3/15/09 @ $104.31) (B- , B1) 03/15/14 8.625 326,097 ------------- 6,234,148 ------------- WIRELESS (3.6%) 50 Airgate PCS, Inc., Rule 144A, Secured Notes (Callable 1/01/06 @ $104.69)++ (CCC , Caa1) 09/01/09 9.375 52,500 350 Airgate PCS, Inc., Secured Notes (Callable 1/12/06 @ $104.69) (CCC , Caa1) 09/01/09 9.375 367,500 500 American Cellular Corp., Series B, Global Senior Notes (Callable 8/01/07 @ $105.00) (B- , B3) 08/01/11 10.000 545,000 450 Centennial Cellular Operating Co./Centennial Communications Corp., Global Company Guaranteed Notes (Callable 6/15/08 @ $106.00) (CCC , B3) 06/15/13 10.125 491,625 455 Dobson Cellular Systems, Global Secured Notes (Callable 11/1/08 @ $104.94) (CCC , B2) 11/01/12 9.875 503,913 600 Dobson Communications Corp., Global Senior Notes (Callable 10/01/08 @ $104.44) (CCC , Caa2) 10/01/13 8.875 601,500 350 Horizon PCS, Inc., Global Company Guaranteed Notes (Callable 7/15/08 @ $105.69) (CCC , B3) 07/15/12 11.375 403,375 250 IPCS, Inc., Global Senior Notes (Callable 5/01/08 @ $105.75) (CCC , B3) 05/01/12 11.500 288,125 250 IWO Holdings, Inc., Global Company Guaranteed Notes (Callable 1/15/10 @ $105.38)+ (BB+ , Caa2) 01/15/15 0.000 181,875 100 Nextel Communications, Inc., Series B, Senior Notes (Callable 8/01/08 @ $103.69)+ (A- , Baa2) 08/01/15 7.375 105,614 100 Rural Cellular Corp., Global Senior Notes (Callable 8/01/07 @ $104.94) (CCC , Caa1) 02/01/10 9.875 106,000 1,025 Rural Cellular Corp., Global Senior Subordinated Notes (Callable 1/15/06 @ $104.88) (CCC , Caa2) 01/15/10 9.750 1,040,375 505 Rural Cellular Corp., Rule 144A,Private Placement Senior Subordinated Notes (Callable 11/01/07 @ $102.00)++# (CCC, Caa2) 11/01/12 10.041 511,313 1,510 Triton PCS, Inc., Company Guaranteed Notes (CCC- , Caa1) 06/01/13 8.500 1,411,850 400 U.S. Unwired, Inc., Series B, Global Secured Notes (Callable 6/15/08 @ $105.00) (BBB- , Caa1) 06/15/12 10.000 452,000 450 Ubiquitel Operating Co., Global Senior Notes (Callable 3/01/07 @ $107.41) (B- , Caa1) 03/01/11 9.875 500,625 ------------- 7,563,190 ------------- TOTAL CORPORATE OBLIGATIONS (Cost $189,567,023) 182,113,032 -------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 10
NUMBER OF SHARES VALUE --------- ----- DOMESTIC SECURITIES COMMON STOCKS (0.7%) BROADCAST/OUTDOOR (0.1%) 5,567 Equinix, Inc.* $ 226,911 -------------- CABLE (0.0%) 69,987 Digitalglobe, Inc. ^* 69,987 -------------- CHEMICALS (0.1%) 4,893 Huntsman Corp.* 84,257 -------------- CONTAINERS (0.0%) 20,689 Continental AFA Dispensing Co. ^* 0 -------------- FOOD PROCESSORS/BEVERAGE/BOTTLING (0.3%) 590 Crunch Equity Holdings LLC* 634,685 -------------- HEALTHCARE FACILITIES/SUPPLIES (0.0%) 232 Magellan Health Services, Inc.* 7,296 -------------- RETAIL STORES (0.0%) 18,064 Safelite Glass Corp., Class B ^* 15,354 1,219 Safelite Realty Corp. ^* 9,752 -------------- 25,106 -------------- SERVICES (0.2%) 21,306 Cenveo, Inc.* 280,387 10,652 Cenveo, Inc., Rule 144A++* 140,180 -------------- 420,567 -------------- TOTAL COMMON STOCKS (Cost $894,635) 1,468,809 -------------- PREFERRED STOCKS (0.0%) CABLE (0.0%) 7,500 Adelphia Communications Corp., 13% cumulative exchangeable Series B (Callable 7/15/06 @ $102.17)* (Cost $750,000) 3,750 -------------- WARRANTS (0.0%) AEROSPACE (0.0%) 800 Decrane Aircraft Holdings, strike price $35.65, Rule 144A, expires 9/30/08++^* 0 -------------- BROADBAND (0.0%) 400 Colt Telecom Group Plc, strike price $75.63, expires 12/31/06* 6,898 -------------- BUILDING PRODUCTS (0.0%) 1,250 Dayton Superior Corp., strike price $0.01, Rule 144A, expires 6/15/09 ++* 13 -------------- CABLE (0.0%) 4 NTL, Inc., strike price $262.93, Series A, expires 1/13/11* 2 -------------- COMPETITIVE LOCAL EXCHANGE CARRIER (0.0%) 6,290 Loral Space & Communications, strike price $23.70, expires 12/27/06* 0 -------------- CONTAINERS (0.0%) 747 Pliant Corp., strike price $0.01, Rule 144A, expires 6/01/10 ++^* 0 --------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 11
NUMBER OF SHARES VALUE --------- ----- DOMESTIC SECURITIES WARRANTS GAMING (0.0%) 3,000 Mikohn Gaming Corp., strike price $7.70, expires 8/15/08* $ 90 100 Windsor Woodmont Black Hawk, strike price $0.01, expires 3/15/10++*^ 0 -------------- 90 -------------- RETAIL STORES (0.0%) 44,271 Safelite Glass Corp., strike price $0.01, Class A, expires 09/29/06*^ 0 29,514 Safelite Glass Corp., strike price $0.01, Class B, expires 09/29/07*^ 0 -------------- 0 -------------- SATELLITE (0.0%) 250 Pegasus Communications Corp., strike price $75.00, expires 1/01/07*^ 0 -------------- TEXTILE/APPAREL/SHOE MANUFACTURING (0.0%) 117 AGY Holding Corp., strike price $0.01, expires 1/01/10*^ 1 -------------- TOTAL WARRANTS (Cost $86,124) 7,004 -------------- TOTAL DOMESTIC SECURITIES (Cost $191,297,782) 183,592,595 -------------- PAR RATINGS (000) (S&P/MOODY'S) MATURITY RATE% ----- ------------- -------- ----- FOREIGN SECURITIES (7.8%) CORPORATE OBLIGATIONS (7.6%) BROADBAND (0.3%) $ 750 Global Crossing Finance Plc., Global Company Guaranteed Notes (Callable 12/15/09 @ $105.38) (United Kingdom) (B- , Caa1) 12/15/14 10.750 693,750 -------------- BROADCAST/OUTDOOR (0.1%) 150 Corus Entertainment, Inc., Global Senior Subordinated Notes (Callable 3/01/07 @ $104.38) (Canada) (B+ , B1) 03/01/12 8.750 163,125 -------------- BUILDING PRODUCTS (0.4%) 750 MAAX Corp., Global Senior Subordinated Notes (Callable 6/15/08 @ $104.88) (Canada) (CCC , B3) 06/15/12 9.750 596,250 500 Maax Holdings, Inc., Global Senior Discount Notes (Callable 12/15/08 @ $105.62) (Canada) + (CCC, Caa1) 12/15/12 0.000 158,125 -------------- 754,375 -------------- CABLE (0.4%) 4,600 Australis Holdings Pty. Ltd., Yankee Senior Discount Notes (Australia) ^^ (D , NR) 11/01/02 15.000 0 500 Kabel Deutschland GmbH, Rule 144A, Company Guaranteed Notes (Callable 7/01/09 @ $105.31) (Germany)++ (B- , B2) 07/01/14 10.625 528,750 393 Telenet Group Holding NV, Rule 144A, Discount Notes (Callable 12/15/08 @ $105.75) (Belgium)+++ (CCC+ , Caa1) 06/15/14 0.000 324,225 -------------- 852,975 -------------- CHEMICALS (0.3%) 575 Rhodia SA, Global Senior Notes (France) (CCC+ , B3) 06/01/10 10.250 632,500 -------------- CONSUMER PRODUCTS/TOBACCO (0.1%) 250 Bombardier Recreational Products, Inc., Global Senior Subordinated Notes (Callable 12/15/08 @ $104.19) (Canada) (B , B3) 12/15/13 8.375 251,563 --------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 12
PAR RATINGS (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- FOREIGN SECURITIES CORPORATE OBLIGATIONS INDUSTRIAL (0.1%) $ 250 Ashtead Holdings Plc., Rule 144A, Private Placement Secured Notes (Callable 8/01/10 @ $104.31) (United Kingdom)++ (B , B2) 08/01/15 8.625 $ 264,375 924 International Utility Structures, Inc., Subordinated Notes (Canada) ^^ (NR , NR) 02/01/08 13.000 0 800 International Utility Structures, Inc., Yankee Senior Subordinated Notes (Canada) ^^ (NR , NR) 02/01/08 10.750 0 -------------- 264,375 -------------- LEISURE (0.5%) 250 Intrawest Corp., Global Senior Notes (Callable 10/15/08 @ $103.75) (Canada) (B+ , B1) 10/15/13 7.500 254,375 750 NCL Corp., Global Senior Notes (Callable 7/15/09 @ $105.31) (Bermuda) (B+ , B2) 07/15/14 10.625 778,125 -------------- 1,032,500 -------------- METALS & MINING (0.3%) 250 Gerdau Ameristeel Corp., Global Senior Notes (Callable 7/15/07 @ $105.38) (Canada) (BB- , Ba3) 07/15/11 10.375 276,875 259 Ispat Inland ULC, Global Secured Notes (Callable 4/01/09 @ $104.88) (Canada) (BBB+ , Ba1) 04/01/14 9.750 294,613 -------------- 571,488 -------------- PAPER & FOREST PRODUCTS (1.9%) 100 Abitibi-Consolidated, Inc., Yankee Senior Notes (Canada) (B+ , B1) 04/01/15 8.375 96,250 150 Abitibi-Consolidated, Inc., Global Notes (Canada) (B+ , B1) 06/15/11 7.750 143,625 250 Ainsworth Lumber Co. Ltd., Global Company Guaranteed Notes (Callable 10/01/08 @ 103.63) (Canada) (B+ , B2) 10/01/12 7.250 226,250 750 Fraser Papers, Inc., Rule 144A, Company Guaranteed Notes (Callable 3/15/10 @ $104.38) (Canada)++ (B , B3) 03/15/15 8.750 656,250 500 JSG Funding Plc., Global Senior Notes (Callable 10/01/07 @ $104.81) (Ireland) (B- , B3) 10/01/12 9.625 502,500 1,750 JSG Funding Plc., Senior Subordinated Notes (Callable 1/31/10 @ $103.88) (Ireland) (B- , Caa1) 04/01/15 7.750 1,461,250 250 Norske Skog Ltd., Global Senior Notes (Callable 3/01/09 @ $103.69) (Canada) (B+ , B1) 03/01/14 7.375 220,000 450 Quebecor World Capital Corp., Global Company Guaranteed Notes (Canada) (BB , Ba2) 11/15/13 6.125 403,751 250 Tembec Industries, Inc., Global Company Guaranteed Notes (Canada) (CCC+ , B3) 03/15/12 7.750 135,000 400 Tembec Industries, Inc., Yankee Company Guaranteed (Callable 6/30/06 @ $101.44) (Canada) (CCC+ , B3) 06/30/09 8.625 230,000 -------------- 4,074,876 -------------- PHARMACEUTICALS (0.2%) 400 Biovail Corp. Yankee Senior Subordinated Notes (Callable 4/01/06 @ $103.94) (Canada) (BB- , B2) 04/01/10 7.875 416,500 -------------- RETAIL - FOOD & DRUG (0.3%) 700 Jean Coutu Group (PJC), Inc., Global Senior Subordinated Notes (Callable 8/01/09 @ $104.25) (Canada) (B- , Caa1) 08/01/14 8.500 644,000 -------------- SATELLITE (0.5%) 600 Intelsat Bermuda Ltd., Rule 144A, Senior Notes (Callable 1/15/09 @ $104.13) (Bermuda)++ (B+ , B2) 01/15/13 8.250 609,000 450 Intelsat Ltd., Global Senior Notes (Bermuda) (B , Caa1) 11/01/08 5.250 412,313 -------------- 1,021,313 -------------- TECHNOLOGY (0.9%) 750 Celestica, Inc., Senior Subordinated Notes (Callable 7/01/08 @ $103.94) (Canada) (B , B2) 07/01/11 7.875 759,375 425 Flextronics International Ltd., Global Senior Subordinated Notes (Callable 11/15/09 @ $103.13) (Singapore) (BB- , Ba2) 11/15/14 6.250 421,281 650 Magnachip Semiconductor, Senior Subordinated Notes (Callable 12/15/09 @ $104.00) (South Korea) (B- , B2) 12/15/14 8.000 624,000 -------------- 1,804,656 --------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 13
PAR RATINGS (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- FOREIGN SECURITIES CORPORATE OBLIGATIONS TRANSPORTATION - OTHER (1.1%) $ 700 Sea Containers Ltd., Series B, Yankee Senior Notes (Callable 2/21/06 @ $100.00) (Bermuda) (B , B3) 02/15/08 7.875 $ 674,625 1,350 Ship Finance International Ltd., Global Senior Notes (Callable 12/15/08 @ $104.25) (Bermuda) (B , B1) 12/15/13 8.500 1,269,000 250 Stena AB, Global Senior Notes (Callable 12/01/09 @ $103.50) (Sweden) (BB- , Ba3) 12/01/16 7.000 230,000 150 Titan Petrochemicals Group Ltd., Rule 144A, Company Guaranteed Notes (Bermuda) ++ (B+ , B1) 03/18/12 8.500 144,750 -------------- 2,318,375 -------------- WIRELESS (0.2%) 500 Millicom International Cellular S.A., Global Senior Notes (Callable 12/01/08 @ $105.00) (Luxembourg) (B- , B3) 12/01/13 10.000 518,750 -------------- TOTAL CORPORATE OBLIGATIONS (Cost $20,342,818) 16,015,121 -------------- GOVERNMENT OBLIGATION (0.2%) ARGENTINA (0.2%) 1,193 (ARP) Republic of Argentina, Notes (B- , NR) 12/31/33 5.830 461,848 82,494 (ARP) Republic of Argentina, Notes (NR , NR) 12/15/35 0.000 49,930 -------------- TOTAL GOVERNMENT OBLIGATIONS (Cost $511,778) 511,778 -------------- TOTAL FOREIGN SECURITIES (Cost $20,859,106) 16,526,899 -------------- SHORT-TERM INVESTMENTS (3.8%) 4,990 HSBC Bank (Grand Cayman) overnight deposit 01/03/06 3.300 4,990,000 3,055 Bank of America (London) overnight deposit 01/03/06 3.300 3,055,000 -------------- TOTAL SHORT-TERM INVESTMENTS (Cost $8,045,000) 8,045,000 -------------- TOTAL INVESTMENTS (98.4%) (Cost $220,201,888) 208,164,494 -------------- OTHER ASSETS IN EXCESS OF LIABILITIES (1.6%) 3,371,759 -------------- NET ASSETS (100%) Applicable to 49,895,588 issued and outstanding $.001 par value shares (authorized 100,000,000 shares) $ 211,536,253 ==============
INVESTMENT ABBREVIATIONS ARP = Argentine Peso MTNA = Medium Term Note Series A NR= Not Rated + 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. ++ Security exempt from registration under Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2005, these securities amounted to a value of $32,794,577 or 15.5% of net assests. ^ Not readily marketable security; security is valued at fair value as determined in good faith by, or under the direction of, the Board of Directors. # Floating Rate -- The interest rate changes on these instruments based upon a designated base rate. The rates shown are those in effect at December 31, 2005. + Step Bond-- The interest rate stated is the rate as of December 31, 2005. ^^ Security in default. * Non-income producing security. >> Payment-in-kind. ++ Less than 1,000 par. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 14 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. STATEMENT OF ASSETS AND LIABILITIES December 31, 2005 ASSETS Investments at value (Cost $220,201,888) (Note 2) $ 208,164,494 Cash 780 Receivable for investments sold 289,810 Interest receivable (Note 2) 4,406,299 Other assets 1,710 --------------- Total assets 212,863,093 --------------- LIABILITIES Payable for investments purchased 921,513 Investment advisory fees (Note 3) 239,847 Shareholders' reports 87,528 Administrative fees (Note 3) 22,305 Custodian fees 20,700 Legal fees 14,000 Audit and tax fees 11,986 Shareholders' servicing fees 6,774 Accrued expenses 2,187 --------------- Total Liabilities 1,326,840 --------------- NET ASSETS $ 211,536,253 =============== NET ASSETS CONSIST OF Capital shares at $.001 par value $ 49,897 Capital paid in excess of par value 390,325,867 Distributions in excess of net investment income (2,344,015) Accumulated net realized loss on investments and foreign currency transactions (164,457,666) Unrealized depreciation on investments and foreign currency translations (12,037,830) --------------- Net Assets applicable to 49,895,588 issued and outstanding shares (authorized 100,000,000 shares) $ 211,536,253 =============== NET ASSET VALUE PER SHARE $ 4.24 =============== MARKET PRICE PER SHARE $ 3.67 ===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 15 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. STATEMENT OF OPERATIONS For the Year Ended December 31, 2005 INVESTMENT INCOME Interest (Net of foreign taxes withheld of $2,271) (Note 2) $ 19,577,164 --------------- EXPENSES Investment advisory fees (Note 3) 1,053,905 Shareholders' reports 177,841 Custodian fees 118,402 Administrative fees (Note 3) 105,390 Directors' fees and expenses 88,761 Legal fees 65,024 Shareholder servicing fees 62,461 Audit and tax fees 44,830 New York Stock Exchange fees 43,646 Miscellaneous 23,579 --------------- Total expenses 1,783,839 --------------- Net investment income 17,793,325 --------------- NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY RELATED ITEMS Net realized loss from investments (3,591,779) Net realized gain on foreign currency transactions (Note 2) 71,037 Net change in unrealized appreciation (depreciation) from investments (10,423,902) Net change in unrealized appreciation (depreciation) from foreign currency translations (Note 2) 22,419 --------------- Net realized and unrealized loss from investments and foreign currency related items (13,922,225) --------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,871,100 ===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 16 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR FOR THE YEAR ENDED ENDED DECEMBER 31, 2005 DECEMBER 31, 2004 -------------------- -------------------- FROM OPERATIONS Net investment income $ 17,793,325 $ 17,700,572 Net realized gain (loss) on investments and foreign currency transactions (3,520,742) 3,019,985 Net change in unrealized appreciation (depreciation) of investments and foreign currency translations (10,401,483) 7,746,019 -------------------- -------------------- Net increase in net assets resulting from operations 3,871,100 28,466,576 -------------------- -------------------- FROM DISTRIBUTIONS Net investment income (19,491,595) (20,005,808) Return of capital (217,186) (950,339) -------------------- -------------------- Total distributions (19,708,781) (20,956,147) -------------------- -------------------- Total increase (decrease) in net assets (15,837,681) 7,510,429 -------------------- -------------------- NET ASSETS Beginning of year 227,373,934 219,863,505 -------------------- -------------------- End of year $ 211,536,253 $ 227,373,934 ==================== ==================== Distributions in excess of net investment income $ (2,344,015) $ (3,889,740) ==================== ====================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 17 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, ---------------------------------------------- 2005 2004 2003 ------------ ------------ ------------ PER SHARE OPERATING PERFORMANCE Net asset value, beginning of year $ 4.56 $ 4.41 $ 3.91 ------------ ------------ ------------ Offering Costs -- -- -- ------------ ------------ ------------ INVESTMENT ACTIVITIES Net investment income 0.36 0.35 0.37 Net realized and unrealized gain (loss) on investments and futures contracts (0.28) 0.22 0.58 ------------ ------------ ------------ Total from investment activities 0.08 0.57 0.95 ------------ ------------ ------------ DISTRIBUTIONS Net investment income (0.40) (0.40) (0.43) Return of capital (0.00)(2) (0.02) (0.02) ------------ ------------ ------------ Total distributions (0.40) (0.42) (0.45) ------------ ------------ ------------ Decrease in net asset value due to shares issued through rights offering -- -- -- ------------ ------------ ------------ NET ASSET VALUE, END OF YEAR $ 4.24 $ 4.56 $ 4.41 ============ ============ ============ PER SHARE MARKET VALUE, END OF YEAR $ 3.67 $ 4.45 $ 4.50 ============ ============ ============ TOTAL INVESTMENT RETURN Net asset value(1) 1.74% 13.55% 24.59% Market value (9.76)% 8.60% 28.11% RATIOS AND SUPPLEMENTAL DATA Net assets, end of year (000s omitted) $ 211,536 $ 227,374 $ 219,864 Ratio of expenses to average net assets including expense offsets 0.82% 0.78% 0.78% Ratio of expenses to average net assets 0.82% 0.78% 0.78% Ratio of net investment income to average net assets 8.20% 8.08% 8.83% Portfolio turnover rate 61.5% 57.8% 77.8%
* Adjusted for Rights Offering. + Calculated using the average share method. (1) Total investment return based on per share net asset value reflects the effects of change in net asset value on the performance of the Fund during each year, and assumes dividends and capital gains distributions, if any, were reinvested. These percentages are not an indication of the performance of a shareholder's investment in the Fund based on market value, due to differences between the market price of the stock and the net asset value of the Fund. (2) This amount represents less than $(0.01) per share. (3) As required, effective January 1, 2001 the Fund has adopted provisions of AICPA Audit and Accounting Guide for Investment Companies and has begun amortizing premium on debt securities. The effect of this change for the year ended December 31, 2001 was a decrease to net investment income per share by $0.004 and an increase to net realized and unrealized gains and losses per share by $0.004 and a decrease to the net ratio of net investment income to average net assets from 11.73% to 11.66%. Per share ratios and supplemental data for prior periods have not been restated to reflect this change. (4) Due to the realignment of the Fund's portfolio in connection with the combination with Credit Suisse Strategic Global Income Fund, Inc., the cost of purchases of $30,040,944 and proceeds from sales of $37,801,151 have been excluded from the Portfolio Turnover calculation. Note: Current Year permanent book-tax differences, if any, are not included in the calculation of net investment income per share. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 18
YEAR ENDED DECEMBER 31, ----------------------------------- 2002 2001(3) 2000 --------- --------- --------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of year $ 4.74 $ 5.70 $ 7.34 --------- --------- --------- Offering Costs -- -- -- --------- --------- --------- INVESTMENT ACTIVITIES Net investment income 0.42 0.61+ 0.67 Net realized and unrealized gain (loss) on investments and futures contracts (0.55) (0.85) (1.55) --------- --------- --------- Total from investment activities (0.13) (0.24) (0.88) --------- --------- --------- DISTRIBUTIONS Net investment income (0.62) (0.72) (0.76) Return of capital (0.08) -- -- --------- --------- --------- Total distributions (0.70) (0.72) (0.76) --------- --------- --------- Decrease in net asset value due to shares issued through rights offering -- -- -- --------- --------- --------- NET ASSET VALUE, END OF YEAR $ 3.91 $ 4.74 $ 5.70 ========= ========= ========= PER SHARE MARKET VALUE, END OF YEAR $ 3.88 $ 4.98 $ 5.56 ========= ========= ========= TOTAL INVESTMENT RETURN Net asset value(1) (5.26)% (6.04)% (12.37)% Market value (10.52)% 1.15% 3.55% RATIOS AND SUPPLEMENTAL DATA Net assets, end of year (000s omitted) $ 195,089 $ 236,652 $ 197,817 Ratio of expenses to average net assets including expense offsets 0.79% 1.07% 0.78% Ratio of expenses to average net assets 0.79% 1.07% 0.78% Ratio of net investment income to average net assets 9.93% 11.66% 10.10% Portfolio turnover rate 61.1% 50.1%(4) 39.1% YEAR ENDED DECEMBER 31, ------------------------------------------------ 1999 1998 1997 1996 --------- --------- --------- --------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of year $ 7.77 $ 8.44 $ 8.12 $ 8.63 --------- --------- --------- --------- Offering Costs -- -- -- (0.02) --------- --------- --------- --------- INVESTMENT ACTIVITIES Net investment income 0.75 0.71 0.69 0.75 Net realized and unrealized gain (loss) on investments and futures contracts (0.46) (0.66) 0.39 0.18 --------- --------- --------- --------- Total from investment activities 0.29 0.05 1.08 0.93 --------- --------- --------- --------- DISTRIBUTIONS Net investment income (0.72) (0.72) (0.76) (0.90) Return of capital -- -- -- -- --------- --------- --------- --------- Total distributions (0.72) (0.72) (0.76) (0.90) --------- --------- --------- --------- Decrease in net asset value due to shares issued through rights offering -- -- -- (0.52) --------- --------- --------- --------- NET ASSET VALUE, END OF YEAR $ 7.34 $ 7.77 $ 8.44 $ 8.12 ========= ========= ========= ========= PER SHARE MARKET VALUE, END OF YEAR $ 6.06 $ 7.56 $ 8.75 $ 7.63 ========= ========= ========= ========= TOTAL INVESTMENT RETURN Net asset value(1) 4.50% 0.47% 14.03% 10.59%* Market value (11.32)% (5.68)% 25.90% 10.05%* RATIOS AND SUPPLEMENTAL DATA Net assets, end of year (000s omitted) $ 254,857 $ 269,507 $ 291,959 $ 280,634 Ratio of expenses to average net assets including expense offsets 0.78% 0.81% 0.84% 0.94% Ratio of expenses to average net assets 0.78% 0.81% 0.84% 0.95% Ratio of net investment income to average net assets 9.90% 8.59% 8.47% 9.23% Portfolio turnover rate 43.5% 84.7% 97.7% 81.0%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 19 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2005 NOTE 1. ORGANIZATION Credit Suisse Asset Management Income Fund, Inc. (the "Fund") was incorporated on February 11, 1987 and is registered as a diversified, closed-end investment company under the Investment Company Act of 1940, as amended. The Fund's investment objective is to seek current income through investment primarily in debt securities. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES A) SECURITY VALUATION -- The net asset value of the 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. 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 using this method would not represent fair value. The 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 ("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, or whose values have been materially affected by events occurring before the Fund's Valuation Time but after the close of the securities' primary markets, are valued at fair value as determined in good faith by, or under the direction of, the Board of Directors under procedures established by the Board of Directors. The Fund may invest up to 10% of its total assets in securities which are not readily marketable, including those which are restricted as to disposition under securities law ("restricted securities") (excludes 144A securities that have been determined to be liquid under procedures established by the Board of Directors). These securities are valued pursuant to the valuation procedures noted above. B) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on a trade date basis. Interest income is accrued as earned. The Fund amortizes premium and accretes discount using the effective yield method. 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. Discount or premium on mortgage backed securities is recorded upon receipt of principal payments on the underlying mortgage pools. C) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared and paid monthly. 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 carryover, such gain will not be distributed. Income and capital gains distributions are determined in accordance with federal income tax regulations, which may differ from generally accepted accounting principles in the United States of America ("GAAP"). D) FEDERAL INCOME TAXES -- No provision is made for federal taxes as it is the 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 to make the requisite distributions to its shareholders, which will be sufficient to relieve it from federal income and excise taxes. 20 E) 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 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. F) SHORT-TERM INVESTMENTS -- The Fund, together with other funds/portfolios advised by Credit Suisse Asset Management, LLC ("Credit Suisse"), an indirect wholly-owned subsidiary of Credit Suisse Group, sweeps available cash into either a short-term variable rate time deposit issued by Brown Brothers Harriman & Co. ("BBH&Co."), the Fund's custodian, Grand Cayman branch, or with other highly rated banks. The short-term time deposit is a variable rate account classified as a short-term investment. G) DELAYED DELIVERY COMMITMENTS -- The Fund may purchase or sell securities on a when-issued or forward commitment basis. Payment and delivery may take place a month or more after the date of the transaction. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. H) FUTURES CONTRACTS -- The Fund may enter into futures contracts to the extent permitted by its investment policies and objectives. Upon entering into a futures contract, the 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 contracts. Risks of entering into futures contracts for hedging purposes include the possibility that a change in the value of the contracts may not correlate with the changes in the value of the underlying instruments. In addition, the purchase of futures contracts involves the risk that the Fund could lose more than the original margin deposit and subsequent payments required for a futures transaction. At December 31, 2005, the Fund had no open futures contracts. I) FORWARD FOREIGN CURRENCY CONTRACTS -- The 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. The 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 December 31, 2005, the Fund had no open forward foreign currency contracts. J) OTHER -- The Fund 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. The Fund may be subject to taxes imposed by countries in which it invests with respect to its 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 Fund accrues such taxes when the related income or gains are earned. 21 The Fund's investments in securities of issuers located in less developed countries considered to be "emerging markets" involve risks in addition to those generally applicable to foreign securities. Focusing on emerging (less developed) markets involves higher levels of risk, including increased currency, information, liquidity, market, political and valuation risks. Deficiencies in regulatory oversight, market infrastructure, shareholder protections and company laws could expose the Fund to operational and other risks as well. Some countries may have restrictions that could limit the Fund's access to attractive investment opportunities. Additionally, emerging markets often face serious economic problems (such as high external debt, inflation and unemployment) that could subject the portfolio to increased volatility or substantial declines in value. 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 effect 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 the Fund invests in junk bonds) the Fund's net asset value. NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Credit Suisse serves as investment adviser for the Fund. For its investment advisory services, Credit Suisse is entitled to receive a fee from the Fund at a rate per annum, computed weekly and paid quarterly, as follows: 0.50% of the lower of the weekly stock price (market value) of the Fund's outstanding shares or its average weekly net assets. For the year ended December 31, 2005, investment advisory fees earned were $1,053,905. Credit Suisse Asset Management Limited (Credit Suisse U.K.) ("Credit Suisse U.K."), an affiliate of Credit Suisse, is sub-investment adviser to the Fund. Credit Suisse U.K.'s sub-investment advisory fees are paid by Credit Suisse out of Credit Suisse's net investment advisory fee and are not paid by the Fund. BBH&Co. provides administrative and custodial services to the Fund. Under the Administration and Custody Agreements, BBH&Co. is paid a fee based on average net assets. For the year ended December 31, 2005, BBH&Co. earned administrative service fees (including out-of-pocket expenses) of $105,390. Merrill Corporation ("Merrill"), an affiliate of Credit Suisse, has been engaged by the Fund to provide certain financial printing services. For the year ended December 31, 2005, Merrill was paid $40,633 for its services to the Fund. NOTE 4. LINE OF CREDIT The Fund, together with other funds/portfolios advised by Credit Suisse (collectively, the "Participating Funds"), participates in a $75 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 State Street Bank and Trust Company 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 22 Participating Funds. In addition, the Participating Funds pay interest on borrowings at the Federal Funds rate plus 0.50%. At December 31, 2005 and during the year ended December 31, 2005, the Fund had no borrowings under the Credit Facility. NOTE 5. PURCHASES AND SALES OF SECURITIES For the year ended December 31, 2005, the Fund had no investments in U.S. Government and Agency Obligations. Purchases and sales of investment securities (excluding short-term investments) were $135,185,708 and $129,721,831, respectively. NOTE 6. FEDERAL INCOME TAXES Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. The tax characteristics of dividends paid during the year ended December 31, 2005 and the year ended December 31, 2004, respectively, for the Fund were as follows:
ORDINARY INCOME RETURN OF CAPITAL ------------------------------ ------------------------ 2005 2004 2005 2004 ------------ ------------ --------- --------- $ 19,491,595 $ 20,005,808 $ 217,186 $ 950,339
The tax basis of components of distributable earnings differ from the amounts reflected in the Statement of Assets and Liabilities by temporary book/tax differences. These differences are primarily due to differing treatments of foreign currency transactions, interest accrual from defaulted bonds, losses deferred due to wash sales and deferral of Post-October losses. At December 31, 2005, the components of distributable earnings on a tax basis for the Fund were as follows: Accumulated Ordinary Losses -- Other $ (2,344,015) Accumulated Capital Losses (160,492,900) Deferral of Post-October Losses (3,781,910) Unrealized appreciation (depreciation) (12,220,686) -------------- $ (178,839,511) ==============
At December 31, 2005, the Fund had capital loss carryforwards available to offset possible future capital gains as follows:
EXPIRES DECEMBER 31, -------------------------------------------------------------------------------------------------------------- 2006 2007 2008 2009 2010 2011 2012 2013 ----------- ----------- ----------- ------------ ------------ ------------ ----------- ----------- $ 3,565,110 $ 9,512,339 $ 2,335,946 $ 50,358,903 $ 72,148,258 $ 18,379,472 $ 1,091,025 $ 3,101,847
It is uncertain that the Fund will realize the full benefit of these losses prior to expiration. At December 31, 2005, 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 depreciation from investments were $220,384,744, $5,312,138, $(17,532,388) and $(12,220,250), respectively. At December 31, 2005, the Fund reclassified $3,461,181 from accumulated undistributed net investment income and $(3,356,059) from accumulated net realized loss to paid in capital, to adjust for permanent book/tax treatments 23 of foreign currency transactions, interest accrual from defaulted bonds sold and return of capital. Net assets were not affected by these reclassifications. NOTE 7. OTHER The Fund issued to its shareholders of record as of the close of business on September 27, 1996 transferable Rights to subscribe for up to an aggregate of 10,160,570 shares of Common Stock of the Fund at a rate of one share of Common Stock for three Rights held at the subscription price of $7.15 per share. During October 1996, the Fund issued a total of 10,160,570 shares of Common Stock on exercise of such Rights. Rights offering costs of $550,000 were charged directly against the proceeds of the offering. NOTE 8. CONTINGENCIES In the normal course of business, the Fund may provide general indemnifications pursuant to certain contracts and organizational documents. The Fund's maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated; however, based on experience, the risk of loss from such claims is considered remote. 24 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Credit Suisse Asset Management Income Fund, Inc.: In our opinion, the accompanying statement of assets and liabilities, including the schedule 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 Asset Management Income Fund, Inc. (the "Fund") at December 31, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the ten 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 Fund's 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 December 31, 2005 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Philadelphia, Pennsylvania February 17, 2006 25 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. ADDITIONAL INFORMATION (UNAUDITED) DESCRIPTION OF INVESTLINK(SM) PROGRAM The InvestLink(SM) Program is sponsored and administered by Computershare Shareholder Services, Inc., not by Credit Suisse Asset Management Income Fund, Inc. (the "Fund"). Computershare Shareholder Services, Inc. will act as program administrator (the "Program Administrator") of the InvestLink(SM) Program (the "Program"). The purpose of the Program is to provide interested investors with a simple and convenient way to invest funds and reinvest dividends in shares of the Fund's common stock ("Shares") at prevailing prices, with reduced brokerage commissions and fees. An interested investor may join the Program at any time. Purchases of Shares with funds from a participant's cash payment or automatic account deduction will begin on the next day on which funds are invested. If a participant selects the dividend reinvestment option, automatic investment of dividends generally will begin with the next dividend payable after the Program Administrator receives his enrollment form. Once in the Program, a person will remain a participant until he terminates his participation or sells all Shares held in his Program account, or his account is terminated by the Program Administrator. A participant may change his investment options at any time by requesting a new enrollment form and returning it to the Program Administrator. A participant will be assessed certain charges in connection with his participation in the Program. First-time investors will be subject to an initial service charge which will be deducted from their initial cash deposit. All optional cash deposit investments will be subject to a service charge. Sales processed through the Program will have a service fee deducted from the net proceeds, after brokerage commissions. In addition to the transaction charges outlined above, participants will be assessed per share processing fees (which include brokerage commissions.) Participants will not be charged any fee for reinvesting dividends. The number of Shares to be purchased for a participant depends on the amount of his dividends, cash payments or bank account or payroll deductions, less applicable fees and commissions, and the purchase price of the Shares. The Program Administrator uses dividends and funds of participants to purchase Shares of the Fund's common stock in the open market. Such purchases will be made by participating brokers as agent for the participants using normal cash settlement practices. All Shares purchased through the Program will be allocated to participants as of the settlement date, which is usually three business days from the purchase date. In all cases, transaction processing will occur within 30 days of the receipt of funds, except where temporary curtailment or suspension of purchases is necessary to comply with applicable provisions of the Federal Securities laws or when unusual market conditions make prudent investment impracticable. In the event the Program Administrator is unable to purchase Shares within 30 days of the receipt of funds, such funds will be returned to the participants. The average price of all Shares purchased by the Program Administrator with all funds received during the time period from two business days preceding any investment date up to the second business day preceding the next investment date shall be the price per share allocable to a participant in connection with the Shares purchased for his account with his funds or dividends received by the Program Administrator during such time period. The average price of all Shares sold by the Program Administrator pursuant to sell orders received during such time period shall be the price per share allocable to a participant in connection with the Shares sold for his account pursuant to his sell orders received by the Program Administrator during such time period. Computershare Shareholder Services, Inc., as Program Administrator administers the Program for participants, keeps records, sends statements of account to participants and performs other duties relating to the Program. Each participant in the Program will receive a statement of his account following each purchase of Shares. The statements will also show the amount of dividends credited to such participant's account (if applicable), as well as fees paid by 26 the participant. In addition, each participant will receive copies of the Fund's annual and semi-annual reports to shareholders, proxy statements and, if applicable, dividend income information for tax reporting purposes. If the Fund is paying dividends on the Shares, a participant will receive dividends through the Program for all Shares held on the dividend record date on the basis of full and fractional Shares held in his account, and for all other Shares of the Fund registered in his name. The Program Administrator will send checks to the participants for the amounts of their dividends that are not to be automatically reinvested at no cost to the participants. Shares of the Fund purchased under the Program will be registered in the name of the accounts of the respective participants. Unless requested, the Fund will not issue to participants certificates for Shares of the Fund purchased under the Program. The Program Administrator will hold the Shares in book-entry form until a Program participant chooses to withdraw his Shares or terminate his participation in the Program. The number of Shares purchased for a participant's account under the Program will be shown on his statement of account. This feature protects against loss, theft or destruction of stock certificates. A participant may withdraw all or a portion of the Shares from his Program account by notifying the Program Administrator. After receipt of a participant's request, the Program Administrator will issue to such participant certificates for the whole Shares of the Fund so withdrawn or, if requested by the participant, sell the Shares for him and send him the proceeds, less applicable brokerage commissions, fees, and transfer taxes, if any. If a participant withdraws all full and fractional Shares in his Program account, his participation in the Program will be terminated by the Program Administrator. In no case will certificates for fractional Shares be issued. The Program Administrator will convert any fractional Shares held by a participant at the time of his withdrawal to cash. Participation in any rights offering, dividend distribution or stock split will be based upon both the Shares of the Fund registered in participants' names and the Shares (including fractional Shares) credited to participants' Program accounts. Any stock dividend or Shares resulting from stock splits with respect to Shares of the Fund, both full and fractional, which participants hold in their Program accounts and with respect to all Shares registered in their names will be automatically credited to their accounts. All Shares of the Fund (including any fractional share) credited to his account under the Program will be voted as the participant directs. The participants will be sent the proxy materials for the annual meetings of shareholders. When a participant returns an executed proxy, all of such shares will be voted as indicated. A participant may also elect to vote his Shares in person at the Shareholders' meeting. A participant will receive tax information annually for his personal records and to help him prepare his U.S. federal income tax return. The automatic reinvestment of dividends does not relieve him of any income tax which may be payable on dividends. For further information as to tax consequences of participation in the Program, participants should consult with their own tax advisors. The Program Administrator in administering the Program will not be liable for any act done in good faith or for any good faith omission to act. However, the Program Administrator will be liable for loss or damage due to error caused by its negligence, bad faith or willful misconduct. Shares held in custody by the Program Administrator are not subject to protection under the Securities Investors Protection Act of 1970. The participant should recognize that neither the Fund nor the Program Administrator can provide any assurance of a profit or protection against loss on any Shares purchased under the program. A participant's investment in Shares held in his Program account is no different than his investment in directly held Shares in this regard. The participant bears the risk of loss and the benefits of gain from market price changes with respect to all his Shares. Neither the Fund nor the Program Administrator can guarantee that Shares purchased under the 27 Program will, at any particular time, be worth more or less than their purchase price. Each participant must make an independent investment decision based on his own judgment and research. While the Program Administrator hopes to continue the Program indefinitely, the Program Administrator reserves the right to suspend or terminate the Program at any time. It also reserves the right to make modifications to the Program. Participants will be notified of any such suspension, termination or modification in accordance with the terms and conditions of the Program. The Program Administrator also reserves the right to terminate any participant's participation in the Program at any time. Any question of interpretation arising under the Program will be determined in good faith by the Program Administrator and any such good faith determination will be final. Any interested investor may participate in the Program. To participate in the Program, an investor who is not already a registered owner of the Shares must make an initial investment of at least $250.00. All other cash payments or bank account deductions must be at least $100.00, up to a maximum of $100,000.00 annually. An interested investor may join the Program by reading the Program description, completing and signing the enrollment form and returning it to the Program Administrator. The enrollment form and information relating to the Program (including terms and conditions) may be obtained by calling the Program Administrator at (800) 730-6001. All correspondence regarding the Program should be directed to: Computershare Trust Company N.A., InvestLink Program, P.O. 43010, Providence, RI 02940-3010. 28 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. BOARD CONSIDERATION AND RE-APPROVAL OF INVESTMENT ADVISORY AGREEMENT (UNAUDITED) Section 15(c) of the Investment Company Act of 1940 (the "1940 Act") contemplates that the Board of Directors (the "Board") of Credit Suisse Asset Management Income Fund, Inc. (the "Fund"), including a majority of the Directors who have no direct or indirect interest in the investment advisory agreement and are not "interested persons" of the Fund, as defined in the 1940 Act (the "Independent Directors"), will annually review and re-approve the terms of the Fund's existing investment advisory agreement. In this regard, the Board reviewed and re-approved, during the most recent six months covered by this report, (i) an investment advisory agreement with Credit Suisse Asset Management, LLC ("Credit Suisse") for the Fund, and (ii) a sub-advisory agreement with Credit Suisse Asset Management Limited ("Credit Suisse U.K." or the "Sub-Adviser") for the Fund (collectively, the "Advisory Agreements"). More specifically, at a meeting held on November 16-17, 2005, the Board, including the Independent Directors advised by their independent legal counsel, considered the factors and reached the conclusions described below relating to the selection of Credit Suisse and Credit Suisse U.K. and the re-approval of the Advisory Agreements. NATURE, EXTENT AND QUALITY OF SERVICES The Board received and considered various data and information regarding the nature, extent and quality of services provided to the Fund by Credit Suisse and Credit Suisse U.K. under the Advisory Agreements. The most recent investment adviser registration forms ("Forms ADV") for Credit Suisse and Credit Suisse U.K. were provided to the Board, as were responses of Credit Suisse and Credit Suisse U.K. to a detailed series of requests submitted by the Independent Directors' independent legal counsel on behalf of such Directors. The Board reviewed and analyzed these materials, which included, among other things, information about the background and experience of the senior management and the expertise of, and amount of attention devoted to the Fund by, investment personnel of Credit Suisse and Credit Suisse U.K. In this regard, the Board specifically reviewed the qualifications, background and responsibilities of the chief investment officer who is primarily responsible for day-to-day portfolio management services for the Fund. In addition, the Board received and reviewed information on Securities and Exchange Commission ("SEC") and other regulatory inquiries and examinations relating to the Fund, Credit Suisse and Credit Suisse U.K. The Board considered the investment and legal compliance programs of each of these entities, including their implementation of enhanced compliance policies and procedures in response to SEC rule changes and other regulatory initiatives. The Board also considered the Fund's Chief Compliance Officer's report and recommendations. The Board evaluated the ability of Credit Suisse and Credit Suisse U.K., including their resources, reputation and other attributes, to attract and retain highly qualified investment professionals, including research, advisory, and supervisory personnel. In this regard, the Board considered information regarding Credit Suisse's compensation arrangements for its personnel involved in the management of the Fund. Based on the above factors, together with those referenced below, the Board concluded that it was generally satisfied with the nature, extent and quality of the investment advisory services provided to the Fund by Credit Suisse and Credit Suisse U.K. FUND PERFORMANCE AND EXPENSES The Board considered the performance results for the Fund over a number of years, as well as for recent periods. It also considered these results in comparison to the group of funds consisting of all closed-end flexible income funds and closed-end high current yield funds (the "Performance Universe"), as well as to the Fund's benchmark index, the Citigroup High Yield Market Index. Lipper Inc. ("Lipper"), an independent provider of investment company data, determined the Performance Universe for the Fund and provided the comparative data. The Board 29 was provided with a description of the methodology used by Lipper to select the closed-end mutual funds in the Fund's Performance Universe. The Board also noted that the Fund performed better than the median in its Performance Universe for the most recent periods. The Board received and considered statistical information regarding the Fund's total expense ratio and its various components, including management fees, non-management fees, fee waivers/caps and/or expense reimbursements and actual total expenses of the Fund, including and excluding investment-related expenses and taxes. It also considered comparisons of these fees to the expense information of the group of funds that was determined to be the most similar to the Fund (the "Peer Group") and to the median expenses of a broader universe of relevant funds (the "Expense Universe"), which comparative data was provided by Lipper. The Board was provided with a description of the methodology used by Lipper to select the closed-end mutual funds in the Fund's Peer Group and Expense Universe. The Board noted that the overall expense ratio of the Fund was lower than the Peer Group's median overall expense ratio. Based on the above-referenced considerations and other factors, the Board concluded that the overall performance and expense results supported the re-approval of the Advisory Agreements for the Fund. INVESTMENT ADVISORY FEE RATE The Board reviewed and considered the proposed contractual investment advisory fee rate (the "Advisory Agreement Rate") payable by the Fund to Credit Suisse for investment advisory services. The Board also reviewed and considered the proposed contractual investment sub-advisory fee rate (the "Sub-Advisory Agreement Rate") payable by Credit Suisse to the Sub-Adviser for investment sub-advisory services. In addition, the Board reviewed and considered the proposed fee waiver/cap arrangements applicable to the Advisory Agreement Rate and considered the Advisory Agreement Rate after taking the waivers into account (the "Net Advisory Rate"). The Board noted that Credit Suisse had voluntary fee waivers in effect to base its current investment advisory fee upon the lower of the average weekly stock price or its average weekly net assets. Additionally, the Board received and considered information comparing the Advisory Agreement Rate (both on a stand-alone basis and on a combined basis with the Fund's administration fee rate) with those of the other funds in its Peer Group. The Board noted that the Fund's administrator is not affiliated with Credit Suisse and that the Fund's administration agreement and corresponding fees were negotiated at arm's-length. The Board noted that the combined rate of investment advisory and administration fees for the Fund was lower than the median rate of the Fund's Peer Group. The Board also noted that the Fund's non-management expense rate was lower than the median rate of the Fund's Peer Group. The Board concluded that these factors supported the Advisory Agreement Rate and the Net Advisory Rate. The Board also reviewed the Sub-Advisory Agreement Rate charged by Credit Suisse U.K. which serves as Sub-Adviser to the Fund. The Board concluded that the Sub-Advisory Agreement Rate was fair and equitable, based on its consideration of the factors described here. PROFITABILITY The Board received and considered a detailed estimated profitability analysis of Credit Suisse based on the Advisory Agreement Rate, as well as on any other relationships between the Fund and Credit Suisse and its affiliates, including Credit Suisse U.K. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits that Credit Suisse and its affiliates received with regard to providing these services to the Fund were not unreasonable. 30 The Board received and considered financial statements and an estimated profitability analysis of Credit Suisse U.K. based on the Sub-Advisory Agreement Rate, as well as on other relationships between the Fund and Credit Suisse U.K. and its affiliates. The Board noted the costs of providing portfolio management and other services to the Fund. The Board also noted that the sub-advisory fees are paid to the Sub-Adviser by Credit Suisse and not directly by the Fund, and that the Board separately determined that the Advisory Agreement Rate for the Fund was fair and equitable. Based on these factors, the Board concluded that the profits and other ancillary benefits that the Sub-Adviser and its affiliates received with regard to providing these services to the Fund were not unreasonable. ECONOMIES OF SCALE The Board received and considered information regarding whether there have been economies of scale with respect to the management of the Fund, whether the Fund has appropriately benefited from any economies of scale, and whether there is potential for realization of any further economies of scale. The Board observed that the Advisory Agreements do not offer breakpoints. However, the Board considered the diminished impact of economies of scale in the context of a closed-end fund and concluded that the fees were fair and equitable based on relevant factors. INFORMATION ABOUT SERVICES TO OTHER CLIENTS The Board also received and considered information about the nature and extent of services and fee rates offered by Credit Suisse to its other clients, including other registered investment companies and institutional investors and investment companies to which Credit Suisse serves as an unaffiliated sub-adviser. The Board also received and considered information about the nature and extent of services, and general information about the fees, offered by Credit Suisse U.K. to other clients. The Board concluded that the Advisory Agreement Rate and Sub-Advisory Agreement Rate were reasonable, given the nature and extent of services provided and comparison with rates offered to other clients. Where rates offered to other clients were relatively lower, the Board considered that Credit Suisse's voluntary fee waivers would potentially decrease the Advisory Agreement Rate. The Board concluded, based on information provided by Credit Suisse, that the costs associated with managing and operating a registered, closed-end bond fund, compared with other clients and other funds, provided a justification for the higher fee rates charged to the Fund. OTHER FACTORS AND BROADER REVIEW As discussed above, the Board reviews detailed materials received from Credit Suisse annually as part of the re-approval process under Section 15(c) of the 1940 Act. The Board also reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of Credit Suisse at least in each of its quarterly meetings, which include, among other things, a detailed portfolio review, and detailed fund performance reports, and confers with the chief investment officer of the Fund at various times throughout the year. After considering the above-described factors and based on its deliberations and its evaluation of the information provided to it, the Board concluded that re-approval of the Advisory Agreements for the Fund was in the best interest of the Fund and its remaining shareholders. Accordingly, the Board unanimously re-approved the Advisory Agreements. 31 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. INFORMATION CONCERNING DIRECTORS AND OFFICERS (UNAUDITED)
TERM NUMBER OF OF OFFICE PORTFOLIOS IN AND FUND LENGTH PRINCIPAL COMPLEX OTHER NAME, ADDRESS POSITION(S) OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS AND DATE OF BIRTH HELD WITH FUND SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE ----------------- -------------- --------- -------------------- ------------- --------------- INDEPENDENT DIRECTORS Enrique R. Arzac Chairman of the Board of Chairman since Professor of Finance 47 Director of The Adams c/o Credit Suisse Asset Directors, Nominating 2005 and and Economics, Express Company (a Management, LLC Committee Chairman and Director since Graduate School of closed-end investment Attn: General Counsel Audit Committee Member 1990; current Business, Columbia company); Director of 466 Lexington Avenue term ends at University since 1971 Petroleum and New York, New York the 2007 Resources Corporation 10017-3140 annual meeting (a closed-end investment company) Date of Birth: 10/02/41 Lawrence J. Fox Director, Audit Committee Since 1990; Partner of Drinker 3 Director, Winthrop One Logan Square Chairman and Nominating current term Biddle & Reath (law Trust Company 18th & Cherry Streets Committee Member ends at the firm) since 1972 Philadelphia, 2006 annual Pennsylvania 19103 meeting Date of Birth: 07/17/43 James S. Pasman, Jr Director,Audit and Since Fund Currently retired 42 Director of Education c/o Credit Suisse Asset Nominating Committee inception; Management Corp. Management, LLC Member current term Attn: General Counsel ends at the 466 Lexington Avenue 2008 annual New York, New York meeting 10017-3140 Date of Birth: 12/20/30 Steven N. Rappaport Director,Audit and Since 2005; Partner of Lehigh 46 Director of Presstek, Lehigh Court, LLC Nominating Committee current term Court, LLC and RZ Inc. (digital imaging 40 East 52nd Street Member ends at the Capital (private technologies New York, New York 2008 annual investment firms) from company); Director of 10022 meeting July 2002 to present; Wood Resources, LLC. Transition Adviser to (plywood Date of Birth: 07/10/48 SunGard Securities manufacturing company) Finance, Inc. 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
32
TERM OF OFFICE AND LENGTH NAME, ADDRESS POSITION(S) OF TIME AND DATE OF BIRTH HELD WITH FUND SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS ----------------- -------------- --------- ---------------------------------------------- OFFICERS* Martha B. Metcalf Chief Investment Officer Since 2005 Managing Director; Associated with Credit Credit Suisse Asset Suisse since 2005; Managing Director and Management, LLC Portfolio Manager of Invesco from 2000 to 466 Lexington Avenue 2005; Officer of other Credit Suisse Funds New York, New York 10017-3140 Date of Birth: 04/09/65 Steven B. Plump Chief Executive Officer Since 2005 Managing Director; Associated with Credit Credit Suisse Asset and President Suisse or its predecessor since 1995; Officer Management, LLC of other Credit Suisse Funds 466 Lexington Avenue New York, New York 10017-3140 Date of Birth: 02/08/59 Michael E. Gray Investment Officer Since 2005 Managing Director; Associated with Credit Credit Suisse Asset Suisse since 2004; Managing Director of Management, LLC Deutsche Asset Management from 2002 until 466 Lexington Avenue 2004; Executive Director of UBS (London) from New York, New York 1999 until 2002; Officer of other Credit 10017-3140 Suisse Funds Date of Birth: 07/08/68 Michael A. Pignataro Chief Financial Officer, Since 1995 Director and Director of Fund Administration Credit Suisse Asset Vice President and of Credit Suisse; Associated with Credit Management, LLC Secretary Suisse or its predecessor since 1984; Officer 466 Lexington Avenue of other Credit Suisse Funds New York, New York 10017-3140 Date of Birth: 11/15/59 Emidio Morizio Chief Compliance Officer Since 2004 Director and Global Head of Compliance of Credit Suisse Asset Credit Suisse; Associated with Credit Suisse Management, LLC since July 2000; Vice President and Director 466 Lexington Avenue of Compliance of Forstmann-Leff Associates New York, New York from 1998 to June 2000; Officer of other 10017-3140 Credit Suisse Funds Date of Birth: 09/21/66
33
TERM OF OFFICE AND LENGTH NAME, ADDRESS POSITION(S) OF TIME AND DATE OF BIRTH HELD WITH FUND SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS ----------------- -------------- --------- ---------------------------------------------- OFFICERS* Ajay Mehra Chief Legal Officer Since 2004 Director and Head of Legal Americas Credit Suisse Asset Traditional Asset Management and Hedge Funds; Management, LLC Associated with Credit Suisse since September 466 Lexington Avenue 2004; Senior Associate of Shearman & Sterling New York, New York LLP from September 2000 to September 2004; 10017-3140 Senior Counsel of the SEC Division of Investment Management from June 1997 to Date of Birth: 08/14/70 September 2000; Officer of other Credit Suisse Funds J. Kevin Gao Senior Vice President Since 2004 Director and Legal Counsel of Credit Suisse; Credit Suisse Asset Associated with Credit Suisse since July 2003; Management, LLC Associated with the law firm of Willkie Farr & 466 Lexington Avenue Gallagher LLP from 1998 to 2003; Officer of New York, New York other Credit Suisse Funds 10017-3140 Date of Birth: 10/13/67 Robert Rizza Treasurer Since 1999 Vice President of Credit Suisse; Associated Credit Suisse Asset with Credit Suisse since 1998; Officer of Management, LLC other Credit Suisse Funds 466 Lexington Avenue New York, New York 10017-3140 Date of Birth: 12/09/65
---------- * The officers of the Fund shown are officers that make policy decisions. ANNUAL CERTIFICATIONS (UNAUDITED) The Fund's Chief Executive Officer has filed an annual certification with the NYSE that, as of the date of the certification, he was unaware of any violation by the Fund of the NYSE's corporate governance listing standards. The Fund's Chief Executive Officer and Chief Financial Officer have also filed certifications with the SEC as part of the Fund's Form N-CSR filings that cover certain public disclosure documents of the Fund, including its annual and semi-annual reports to stockholders. 34 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. ADDITIONAL FEDERAL TAX INFORMATION (UNAUDITED) The percentage of ordinary income dividends paid by the Fund during the year ended December 31, 2005, which qualify for the Dividends Received Deduction available to corporate shareholders was 0.00%. In January, 2006, the Fund will report on Form 1099 the tax status of all distributions made during the calendar year 2005. Shareholders should use the information on Form 1099 for their income tax returns. Please consult your Tax Advisor if you have any questions concerning the above information. 35 PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION Information regarding how the Credit Suisse Asset Management Income Fund, Inc. (the "Fund") voted proxies related to its portfolio securities during the 12-month period ended June 30 of each year, as well as policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities are available: - By calling 1-800-293-1232 - On the Fund's website, www.credit-suisse.com/us - On the website of the Securities and Exchange Commission, http://www.sec.gov The Fund files a complete schedule of its portfolio holdings for the first and third quarters of its fiscal year with the SEC on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. 36 OTHER FUNDS MANAGED BY CREDIT SUISSE ASSET MANAGEMENT, LLC Credit Suisse Capital Appreciation Fund Credit Suisse Cash Reserve Fund Credit Suisse Commodity Return Strategy Fund Credit Suisse Emerging Markets Fund Credit Suisse Fixed Income Fund Credit Suisse Global Fixed Income Fund Credit Suisse Global Small Cap Fund Credit Suisse High Income Fund Credit Suisse International Focus Fund Credit Suisse Japan Equity Fund Credit Suisse Large Cap Blend Fund Credit Suisse Large Cap Value Fund Credit Suisse Mid-Cap Growth Fund Credit Suisse New York Municipal Fund Credit Suisse Short Duration Bond Fund Credit Suisse Small Cap Growth Fund Credit Suisse Small Cap Value Fund Credit Suisse Strategic Allocation Fund Fund shares are not deposits or other obligations of Credit Suisse Asset Management, LLC or any affiliate, are not FDIC-insured and are not guaranteed by Credit Suisse Asset Management, LLC or any affiliate. Fund investments are subject to investment risks, including loss of your investment. There are special risk considerations associated with international, global, emerging-market, small-company, private equity, high-yield debt, single-industry, single-country and other special, aggressive or concentrated investment strategies. Past performance cannot guarantee future results. More complete information about a fund, including charges and expenses, is provided in the Prospectus, which should be read carefully before investing. You may obtain copies by calling Credit Suisse Funds at 800-927-2874. For up-to-date performance, please look in the mutual fund section of your newspaper under Credit Suisse. Credit Suisse Asset Management Securities, Inc., Distributor. 37 SUMMARY OF GENERAL INFORMATION (UNAUDITED) Credit Suisse Asset Management Income Fund is a closed-end, non-diversified management investment company whose shares trade on the New York Stock Exchange, Inc. Its investment objective is to seek current income. Credit Suisse Asset Management, LLC, the Fund's investment adviser, is part of the Asset Management business of Credit Suisse, a leading global financial services organization headquartered in Zurich, with offices focused on asset management in 18 countries. SHAREHOLDER INFORMATION The market price is published in: THE NEW YORK TIMES (DAILY) under the designation "CrSuisinco" and THE WALL STREET JOURNAL (DAILY), and BARRON'S (EACH MONDAY) under the designation "CSAM Income Fd". The Fund's New York Stock Exchange, Inc. trading symbol is CIK. Weekly comparative net asset value (NAV) and market price information about The Credit Suisse Asset Management Income Fund, Inc.'s shares are published each Sunday in THE NEW YORK TIMES and each Monday in THE WALL STREET JOURNAL and BARRON'S, as well as other newspapers, in a table called "Closed-End Funds." THE CREDIT SUISSE GROUP OF FUNDS LITERATURE REQUEST -- Call today for free descriptive information on the closed-end funds listed below at 1-800-293-1232 or visit our website on the Internet: http://www.credit-suisse.com/us. CLOSED-END FUNDS SINGLE COUNTRY The Chile Fund, Inc. (CH) The First Israel Fund, Inc. (ISL) The Indonesia Fund, Inc. (IF) MULTIPLE COUNTRY The Emerging Markets Telecommunications Fund, Inc. (ETF) The Latin America Equity Fund, Inc. (LAQ) FIXED INCOME Credit Suisse High Yield Bond Fund (DHY) Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that the Credit Suisse Asset Management Income Fund, Inc. may from time to time purchase shares of its capital stock in the open market. 38 800-293-1232 - www.credit-suisse.com/us CIK-AR-1205 CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC. 466 LEXINGTON AVENUE NEW YORK, NY 10017 DIRECTORS Enrique R. Arzac CHAIRMAN OF THE BOARD Lawrence J. Fox James S. Pasman, Jr. Steven Rappaport OFFICERS Steven B. Plump CHIEF EXECUTIVE OFFICER AND PRESIDENT Martha B. Metcalf CHIEF INVESTMENT OFFICER Michael E. Gray INVESTMENT OFFICER J. Kevin Gao SENIOR VICE PRESIDENT Ajay Mehra CHIEF LEGAL OFFICER Emidio Morizio CHIEF COMPLIANCE OFFICER Michael A. Pignataro CHIEF FINANCIAL OFFICER, VICE PRESIDENT AND SECRETARY Robert Rizza TREASURER INVESTMENT ADVISER Credit Suisse Asset Management, LLC 466 Lexington Avenue New York, New York 10017 INVESTMENT SUB-ADVISER Credit Suisse Asset Management Limited Beaufort House 15 St. Botolph Street London EC3A 7JJ, England ADMINISTRATOR AND CUSTODIAN Brown Brothers Harriman & Co. 40 Water Street Boston, Massachusetts 02109 SHAREHOLDER SERVICING AGENT Computershare Trust Company, N.A. P.O. Box 43010 Providence, RI 02940-3010 LEGAL COUNSEL Willkie Farr & Gallagher 787 7th Avenue New York, New York 10019 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Two Commerce Square Philadelphia, Pennsylvania 19103 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 12(a)(1) to this Form. There were no amendments to the code during the fiscal year ended December 31, 2005. There were no waivers or implicit waivers from the code granted by the registrant during the fiscal year ended December 31, 2005. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's governing board has determined that it has two audit committee financial experts serving on its audit committee: Enrique R. Arzac, and Steven N. Rappaport. Each audit committee financial expert is "independent" for purposes of this item. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) through (d). The information in the table below is provided for services rendered to the registrant by its independent registered public accounting firm, PricewaterhouseCoopers LLP ("PwC"), for its fiscal years ended December 31, 2004 and December 31, 2005.
2004 2005 -------- -------- Audit Fees $ 37,410 $ 39,280 Audit-Related Fees(1) $ 4,500 $ 3,150 Tax Fees(2) $ 2,284 $ 2,400 All Other Fees -- -- Total $ 44,194 $ 44,830
(1) Services include agreed-upon procedures in connection with the registrant's semi-annual financial statements ($3,000 in 2004 and $3,150 in 2005) and the registrant's third quarter 2004 Form N-Q filing ($1,500) in 2004. (2) Tax services in connection with the registrant's excise tax calculations and review of the registrant's applicable tax returns. The information in the table below is provided with respect to non-audit services that directly relate to the registrant's operations and financial reporting and that were rendered by PwC to the registrant's investment adviser, Credit Suisse Asset Management, LLC ("Credit Suisse"), and any service provider to the registrant controlling, controlled by or under common control with Credit Suisse that provided ongoing services to the registrant ("Covered Services Provider"), for the registrant's fiscal years ended December 31, 2004 and December 31, 2005.
2004 2005 -------- --------- Audit-Related Fees N/A N/A
Tax Fees N/A N/A All Other Fees N/A $ 394,000 Total N/A $ 394,000
(e)(1) Pre-Approval Policies and Procedures. The Audit Committee ("Committee") of the registrant is responsible for pre-approving (i) all audit and permissible non-audit services to be provided by the independent registered public accounting firm to the registrant and (ii) all permissible non-audit services to be provided by the independent registered public accounting firm to Credit Suisse and any Covered Services Provider if the engagement relates directly to the operations and financial reporting of the registrant. The Committee may delegate its responsibility to pre-approve any such audit and permissible non-audit services to the Chairperson of the Committee, and the Chairperson shall report to the Committee, at its next regularly scheduled meeting after the Chairperson's pre-approval of such services, his or her decision(s). The Committee may also establish detailed pre-approval policies and procedures for pre-approval of such services in accordance with applicable laws, including the delegation of some or all of the Committee's pre-approval responsibilities to other persons (other than Credit Suisse or the registrant's officers). Pre-approval by the Committee of any permissible non-audit services shall not be required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the registrant, Credit Suisse and any Covered Services Provider constitutes not more than 5% of the total amount of revenues paid by the registrant to its independent registered public accounting firm during the fiscal year in which the permissible non-audit services are provided; (ii) the permissible non-audit services were not recognized by the registrant at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee (or its delegate(s)) prior to the completion of the audit. (e)(2) The information in the table below sets forth the percentages of fees for services (other than audit, review or attest services) rendered by PwC to the registrant for which the pre-approval requirement was waived pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X:
2004 2005 -------- -------- Audit-Related Fees N/A N/A Tax Fees N/A N/A All Other Fees N/A N/A Total N/A N/A
The information in the table below sets forth the percentages of fees for services (other than audit, review or attest services) rendered by PwC to Credit Suisse and any Covered Services Provider required to be approved pursuant to Rule 2-01(c)(7)(ii)of Regulation S-X, for the registrant's fiscal years ended December 31, 2004 and December 31, 2005:
2004 2005 -------- -------- Audit-Related Fees N/A N/A Tax Fees N/A N/A All Other Fees N/A N/A Total N/A N/A
(f) Not Applicable. (g) The aggregate fees billed by PwC for non-audit services rendered to the registrant, Credit Suisse and Covered Service Providers for the fiscal years ended December 31, 2004 and December 31, 2005 were $6,784 and $5,550, respectively. (h) Not Applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The registrant has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The members of the committee are Enrique R. Arzac, Lawrence Fox and Steven N. Rappaport. ITEM 6. SCHEDULE OF INVESTMENTS. Included as part of the report to shareholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. CREDIT SUISSE ASSET MANAGEMENT, LLC CREDIT SUISSE FUNDS CREDIT SUISSE INSTITUTIONAL FUNDS CSAM CLOSED-END FUNDS PROXY VOTING POLICY AND PROCEDURES Introduction Credit Suisse Asset Management, LLC ("CSAM") is a fiduciary that owes each of its clients duties of care and loyalty with respect to proxy voting. The duty of care requires CSAM to monitor corporate events and to vote proxies. To satisfy its duty of loyalty, CSAM must cast proxy votes in the best interests of each of its clients. The Credit Suisse Funds, Credit Suisse Institutional Funds, and CSAM Closed-End Funds (the "Funds"), which have engaged Credit Suisse Asset Management, LLC as their investment adviser, are of the belief that the proxy voting process is a means of addressing corporate governance issues and encouraging corporate actions both of which can enhance shareholder value. Policy The Proxy Voting Policy (the "Policy") set forth below is designed to ensure that proxies are voted in the best interests of CSAM's clients. The Policy addresses particular issues and gives a general indication of how CSAM will vote proxies. The Policy is not exhaustive and does not include all potential issues. Proxy Voting Committee The Proxy Voting Committee will consist of a member of the Portfolio Management Department, a member of the Legal and Compliance Department, and a member of the Operations Department (or their designees). The purpose of the Proxy Voting Committee is to administer the voting of all clients' proxies in accordance with the Policy. The Proxy Voting Committee will review the Policy annually to ensure that it is designed to promote the best interests of CSAM's clients. For the reasons disclosed below under "Conflicts," the Proxy Voting Committee has engaged the services of an independent third party (initially, Institutional Shareholder Services ("ISS")) to assist in issue analysis and vote recommendation for proxy proposals. Proxy proposals addressed by the Policy will be voted in accordance with the Policy. Proxy proposals addressed by the Policy that require a case-by-case analysis will be voted in accordance with the vote recommendation of ISS. Proxy proposals not addressed by the Policy will also be voted in accordance with the vote recommendation of ISS. To the extent that the Proxy Voting Committee proposes to deviate from the Policy or the ISS vote recommendation, the Committee shall obtain client consent as described below. CSAM investment professionals may submit a written recommendation to the Proxy Voting Committee to vote in a manner inconsistent with the Policy and/or the recommendation of ISS. Such recommendation will set forth its basis and rationale. In addition, the investment professional must confirm in writing that he/she is not aware of any conflicts of interest concerning the proxy matter or provide a full and complete description of the conflict. Conflicts CSAM is the institutional and mutual fund asset management arm of Credit Suisse First Boston, which is part of Credit Suisse Group, one of the world's largest financial organizations. As part of a global, full service investment-bank, broker-dealer, and asset-management organization, CSAM and its affiliates and personnel may have multiple advisory, transactional, financial, and other interests in securities, instruments, and companies that may be purchased or sold by CSAM for its clients' accounts. The interests of CSAM and/or its affiliates and personnel may conflict with the interests of CSAM's clients in connection with any proxy issue. In addition, CSAM may not be able to identify all of the conflicts of interest relating to any proxy matter. Consent In each and every instance in which the Proxy Voting Committee favors voting in a manner that is inconsistent with the Policy or the vote recommendation of ISS (including proxy proposals addressed and not addressed by the Policy), it shall disclose to the client conflicts of interest information and obtain client consent to vote. Where the client is a Fund, disclosure shall be made to any one director who is not an "interested person," as that term is defined under the Investment Company Act of 1940, as amended, of the Fund. Recordkeeping CSAM is required to maintain in an easily accessible place for five years all records relating to proxy voting. These records include the following: - a copy of the Policy; - a copy of each proxy statement received on behalf of CSAM clients; - a record of each vote cast on behalf of CSAM clients; - a copy of all documents created by CSAM personnel that were material to making a decision on a vote or that memorializes the basis for the decision; and - a copy of each written request by a client for information on how CSAM voted proxies, as well as a copy of any written response. CSAM reserves the right to maintain certain required proxy records with ISS in accordance with all applicable regulations. Disclosure CSAM will describe the Policy to each client. Upon request, CSAM will provide any client with a copy of the Policy. CSAM will also disclose to its clients how they can obtain information on their proxy votes. ISS will capture data necessary for Funds to file Form N-PX on an annual basis concerning their proxy voting record in accordance with applicable law. Procedures The Proxy Voting Committee will administer the voting of all client proxies. CSAM has engaged ISS as an independent third party proxy voting service to assist in the voting of client proxies. ISS will coordinate with each client's custodian to ensure that proxy materials reviewed by the custodians are processed in a timely fashion. ISS will provide CSAM with an analysis of proxy issues and a vote recommendation for proxy proposals. ISS will refer proxies to the Proxy Voting Committee for instructions when the application of the Policy is not clear. The Proxy Voting Committee will notify ISS of any changes to the Policy or deviating thereof. PROXY VOTING POLICY Operational Items Adjourn Meeting Proposals to provide management with the authority to adjourn an annual or special meeting will be determined on a case-by-case basis. Amend Quorum Requirements Proposals to reduce quorum requirements for shareholder meetings below a majority of the shares outstanding will be determined on a case-by-case basis. Amend Minor Bylaws Generally vote for bylaw or charter changes that are of a housekeeping nature. Change Date, Time, or Location of Annual Meeting Generally vote for management proposals to change the date/time/location of the annual meeting unless the proposed change is unreasonable. Generally vote against shareholder proposals to change the date/time/location of the annual meeting unless the current scheduling or location is unreasonable. Ratify Auditors Generally vote for proposals to ratify auditors unless: (1) an auditor has a financial interest in or association with the company, and is therefore not independent; (2) fees for non-audit services are excessive, or (3) there is reason to believe that the independent auditor has rendered an opinion, which is neither accurate nor indicative of the company's financial position. Generally vote on a case-by-case basis on shareholder proposals asking companies to prohibit their auditors from engaging in non-audit services (or capping the level of non-audit services). Generally vote on a case-by-case basis on auditor rotation proposals taking into consideration: (1) tenure of audit firm; (2) establishment and disclosure of a renewal process whereby the auditor is regularly evaluated for both audit quality and competitive price; (3) length of the rotation period advocated in the proposal, and (4) significant audit related issues. Board of Directors Voting on Director Nominees in Uncontested Elections Generally votes on director nominees on a case-by-case basis. Votes may be withheld: (1) from directors who attended less than 75% of the board and committee meetings without a valid reason for the absences; (2) implemented or renewed a dead-hand poison pill; (3) ignored a shareholder proposal that was approved by a majority of the votes cast for two consecutive years; (4) ignored a shareholder proposal approved by a majority of the shares outstanding; (5) have failed to act on takeover offers where the majority of the shareholders have tendered their shares; (6) are inside directors or affiliated outside directors and sit on the audit, compensation, or nominating committee; (7) are inside directors or affiliated outside directors and the full board serves as the audit, compensation, or nominating committee or the company does not have one of these committees; or (8) are audit committee members and the non-audit fees paid to the auditor are excessive Cumulative Voting Proposals to eliminate cumulative voting will be determined on a case-by-case basis. Proposals to restore or provide for cumulative voting in the absence of sufficient good governance provisions and/or poor relative shareholder returns will be determined on a case-by-case basis. Director and Officer Indemnification and Liability Protection Proposals on director and officer indemnification and liability protection generally evaluated on a case-by-case basis. Generally vote against proposals that would: (1) eliminate entirely directors' and officers' liability for monetary damages for violating the duty of care; or (2) expand coverage beyond just legal expenses to acts, such as negligence, that are more serious violations of fiduciary obligation than mere carelessness. Generally vote for only those proposals providing such expanded coverage in cases when a director's or officer's legal defense was unsuccessful if: (1) the director was found to have acted in good faith and in a manner that he reasonably believed was in the best interests of the company, and (2) only if the director's legal expenses would be covered. Filling Vacancies/Removal of Directors Generally vote against proposals that provide that directors may be removed only for cause. Generally vote for proposals to restore shareholder ability to remove directors with or without cause. Proposals that provide that only continuing directors may elect replacements to fill board vacancies will be determined on a case-by-case basis. Generally vote for proposals that permit shareholders to elect directors to fill board vacancies. Independent Chairman (Separate Chairman/CEO) Generally vote for shareholder proposals requiring the position of chairman be filled by an independent director unless there are compelling reasons to recommend against the proposal, including: (1) designated lead director, elected by and from the independent board members with clearly delineated duties; (2) 2/3 independent board; (3) all independent key committees; or (4) established governance guidelines. Majority of Independent Directors Generally vote for shareholder proposals requiring that the board consist of a majority or substantial majority (two-thirds) of independent directors unless the board composition already meets the adequate threshold. Generally vote for shareholder proposals requiring the board audit, compensation, and/or nominating committees be composed exclusively of independent directors if they currently do not meet that standard. Generally withhold votes from insiders and affiliated outsiders sitting on the audit, compensation, or nominating committees. Generally withhold votes from insiders and affiliated outsiders on boards that are lacking any of these three panels. Generally withhold votes from insiders and affiliated outsiders on boards that are not at least majority independent. Term Limits Generally vote against shareholder proposals to limit the tenure of outside directors. Proxy Contests Voting on Director Nominees in Contested Elections Votes in a contested election of directors should be decided on a case-by-case basis, with shareholders determining which directors are best suited to add value for shareholders. The major decision factors are: (1) company performance relative to its peers; (2) strategy of the incumbents versus the dissidents; (3) independence of directors/nominees; (4) experience and skills of board candidates; (5) governance profile of the company; (6) evidence of management entrenchment; (7) responsiveness to shareholders; or (8) whether takeover offer has been rebuffed. Amend Bylaws without Shareholder Consent Proposals giving the board exclusive authority to amend the bylaws will be determined on a case-by-case basis. Proposals giving the board the ability to amend the bylaws in addition to shareholders will be determined on a case-by-case basis. Confidential Voting Generally vote for shareholder proposals requesting that corporations adopt confidential voting, use independent vote tabulators and use independent inspectors of election, as long as the proposal includes a provision for proxy contests as follows: In the case of a contested election, management should be permitted to request that the dissident group honor its confidential voting policy. If the dissidents agree, the policy may remain in place. If the dissidents will not agree, the confidential voting policy may be waived. Generally vote for management proposals to adopt confidential voting. Cumulative Voting Proposals to eliminate cumulative voting will be determined on a case-by-case basis. Proposals to restore or provide for cumulative voting in the absence of sufficient good governance provisions and/or poor relative shareholder returns will be determined on a case-by-case basis. Antitakeover Defenses and Voting Related Issues Advance Notice Requirements for Shareholder Proposals/Nominations Votes on advance notice proposals are determined on a case-by-case basis. Amend Bylaws without Shareholder Consent Proposals giving the board exclusive authority to amend the bylaws will be determined on a case-by-case basis. Generally vote for proposals giving the board the ability to amend the bylaws in addition to shareholders. Poison Pills (Shareholder Rights Plans) Generally vote for shareholder proposals requesting that the company submit its poison pill to a shareholder vote or redeem it. Votes regarding management proposals to ratify a poison pill should be determined on a case-by-case basis. Plans should embody the following attributes: (1) 20% or higher flip-in or flip-over; (2) two to three year sunset provision; (3) no dead-hand or no-hand features; or (4) shareholder redemption feature Shareholders' Ability to Act by Written Consent Generally vote against proposals to restrict or prohibit shareholders' ability to take action by written consent. Generally vote for proposals to allow or make easier shareholder action by written consent. Shareholders' Ability to Call Special Meetings Proposals to restrict or prohibit shareholders' ability to call special meetings or that remove restrictions on the right of shareholders to act independently of management will be determined on a case-by-case basis. Supermajority Vote Requirements Proposals to require a supermajority shareholder vote will be determined on a case-by-case basis Proposals to lower supermajority vote requirements will be determined on a case-by-case basis. Merger and Corporate Restructuring Appraisal Rights Generally vote for proposals to restore, or provide shareholders with, rights of appraisal. Asset Purchases Generally vote case-by-case on asset purchase proposals, taking into account: (1) purchase price, including earnout and contingent payments; (2) fairness opinion; (3) financial and strategic benefits; (4) how the deal was negotiated; (5) conflicts of interest; (6) other alternatives for the business; or (7) noncompletion risk (company's going concern prospects, possible bankruptcy). Asset Sales Votes on asset sales should be determined on a case-by-case basis after considering: (1) impact on the balance sheet/working capital; (2) potential elimination of diseconomies; (3) anticipated financial and operating benefits; (4) anticipated use of funds; (5) value received for the asset; fairness opinion (if any); (6) how the deal was negotiated; or (6) Conflicts of interest Conversion of Securities Votes on proposals regarding conversion of securities are determined on a case-by-case basis. When evaluating these proposals, should review (1) dilution to existing shareholders' position; (2) conversion price relative to market value; (3) financial issues: company's financial situation and degree of need for capital; effect of the transaction on the company's cost of capital; (4) control issues: change in management; change in control; standstill provisions and voting agreements; guaranteed contractual board and committee seats for investor; veto power over certain corporate actions; (5) termination penalties; (6) conflict of interest: arm's length transactions, managerial incentives. Generally vote for the conversion if it is expected that the company will be subject to onerous penalties or will be forced to file for bankruptcy if the transaction is not approved. Corporate Reorganization Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a case-by-case basis, after evaluating: (1) dilution to existing shareholders' position; (2) terms of the offer; (3) financial issues; (4) management's efforts to pursue other alternatives; (5) control issues; (6) conflict of interest. Generally vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved. Reverse Leveraged Buyouts Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a case-by-case basis, after evaluating: (1) dilution to existing shareholders' position; (2) terms of the offer; (3) financial issues; (4) management's efforts to pursue other alternatives; (5) control issues; (6) conflict of interest. Generally vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved. Formation of Holding Company Votes on proposals regarding the formation of a holding company should be determined on a case-by-case basis taking into consideration: (1) the reasons for the change; (2) any financial or tax benefits; (3) regulatory benefits; (4) increases in capital structure; (5) changes to the articles of incorporation or bylaws of the company. Absent compelling financial reasons to recommend the transaction, generally vote against the formation of a holding company if the transaction would include either of the following: (1) increases in common or preferred stock in excess of the allowable maximum as calculated a model capital structure; (2) adverse changes in shareholder rights; (3) going private transactions; (4) votes going private transactions on a case-by-case basis, taking into account: (a) offer price/premium; (b) fairness opinion; (c) how the deal was negotiated; (d) conflicts of interest; (e) other alternatives/offers considered; (f) noncompletion risk. Joint Ventures Vote on a case-by-case basis on proposals to form joint ventures, taking into account: (1) percentage of assets/business contributed; (2) percentage ownership; (3) financial and strategic benefits; (4) governance structure; (5) conflicts of interest; (6) other alternatives; (7) noncompletion risk; (8) liquidations. Votes on liquidations should be determined on a case-by-case basis after reviewing: (1) management's efforts to pursue other alternatives such as mergers; (2) appraisal value of the assets (including any fairness opinions); (3) compensation plan for executives managing the liquidation. Generally vote for the liquidation if the company will file for bankruptcy if the proposal is not approved. Mergers and Acquisitions Votes on mergers and acquisitions should be considered on a case-by-case basis, determining whether the transaction enhances shareholder value by giving consideration to: (1) prospects of the combined companies; (2) anticipated financial and operating benefits; (3) offer price; (4) fairness opinion; (5) how the deal was negotiated; (6) changes in corporate governance and their impact on shareholder rights; (7) change in the capital structure; (8) conflicts of interest. Private Placements Votes on proposals regarding private placements should be determined on a case-by-case basis. When evaluating these proposals, should review: (1) dilution to existing shareholders' position; (2) terms of the offer; (3) financial issues; (4) management's efforts to pursue alternatives such as mergers; (5) control issues; (6) conflict of interest. Generally vote for the private placement if it is expected that the company will file for bankruptcy if the transaction is not approved. Prepackaged Bankruptcy Plans Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a case-by-case basis, after evaluating: (1) dilution to existing shareholders' position; (2) terms of the offer; (3) financial issues; (4) management's efforts to pursue other alternatives; (5) control issues; (6) conflict of interest. Generally vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved. Recapitalization Votes case-by-case on recapitalizations (reclassifications of securities), taking into account: (1) more simplified capital structure; (2) enhanced liquidity; (3) fairness of conversion terms, including fairness opinion; (4) impact on voting power and dividends; (5) reasons for the reclassification; (6) conflicts of interest; (7) other alternatives considered. Reverse Stock Splits Generally vote for management proposals to implement a reverse stock split when the number of authorized shares will be proportionately reduced. Generally vote for management proposals to implement a reverse stock split to avoid delisting. Votes on proposals to implement a reverse stock split that do not proportionately reduce the number of shares authorized for issue should be determined on a case-by-case basis. Spinoffs Votes on spinoffs should be considered on a case-by-case basis depending on: (1) tax and regulatory advantages; (2) planned use of the sale proceeds; (3) valuation of spinoff; fairness opinion; (3) benefits that the spinoff may have on the parent company including improved market focus; (4) conflicts of interest; managerial incentives; (5) any changes in corporate governance and their impact on shareholder rights; (6) change in the capital structure Value Maximization Proposals Vote case-by-case on shareholder proposals seeking to maximize shareholder value. Capital Structure Adjustments to Par Value of Common Stock Generally vote for management proposals to reduce the par value of common stock unless the action is being taken to facilitate an antitakeover device or some other negative corporate governance action. Generally vote for management proposals to eliminate par value. Common Stock Authorization Votes on proposals to increase the number of shares of common stock authorized for issuance are determined on a case-by-case basis. Generally vote against proposals at companies with dual-class capital structures to increase the number of authorized shares of the class of stock that has superior voting rights. Generally vote for proposals to approve increases beyond the allowable increase when a company's shares are in danger of being delisted or if a company's ability to continue to operate as a going concern is uncertain. Dual-class Stock Generally vote against proposals to create a new class of common stock with superior voting rights. Generally vote for proposals to create a new class of nonvoting or subvoting common stock if: (1) it is intended for financing purposes with minimal or no dilution to current shareholders; (2) it is not designed to preserve the voting power of an insider or significant shareholder. Issue Stock for Use with Rights Plan Generally vote against proposals that increase authorized common stock for the explicit purpose of implementing a shareholder rights plan. Preemptive Rights Votes regarding shareholder proposals seeking preemptive rights should be determined on a case-by-case basis after evaluating: (1) the size of the company; (2) the shareholder base; (3) the liquidity of the stock Preferred Stock Generally vote against proposals authorizing the creation of new classes of preferred stock with unspecified voting, conversion, dividend distribution, and other rights ("blank check" preferred stock). Generally vote for proposals to create "declawed" blank check preferred stock (stock that cannot be used as a takeover defense). Generally vote for proposals to authorize preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable. Generally vote against proposals to increase the number of blank check preferred stock authorized for issuance when no shares have been issued or reserved for a specific purpose. Generally vote case-by-case on proposals to increase the number of blank check preferred shares after analyzing the number of preferred shares available for issue given a company's industry and performance in terms of shareholder returns. Recapitalization Vote case-by-case on recapitalizations (reclassifications of securities), taking into account: (1) more simplified capital structure; (2) enhanced liquidity; (3) fairness of conversion terms, including fairness opinion; (4) impact on voting power and dividends; (5) reasons for the reclassification; (6) conflicts of interest; (7) other alternatives considered. Reverse Stock Splits Generally vote for management proposals to implement a reverse stock split when the number of authorized shares will be proportionately reduced. Generally vote for management proposals to implement a reverse stock split to avoid delisting. Votes on proposals to implement a reverse stock split that do not proportionately reduce the number of shares authorized for issue should be determined on a case-by-case basis. Share Repurchase Programs Generally vote for management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms. Stock Distributions: Splits and Dividends Generally vote for management proposals to increase the common share authorization for a stock split or share dividend, provided that the increase in authorized shares would not result in an excessive number of shares available for issuance. Tracking Stock Votes on the creation of tracking stock are determined on a case-by-case basis, weighing the strategic value of the transaction against such factors as: (1) adverse governance changes; (2) excessive increases in authorized capital stock; (3) unfair method of distribution; (4) diminution of voting rights; (5) adverse conversion features; (6) negative impact on stock option plans; (7) other alternatives such as a spinoff. Executive and Director Compensation Executive and Director Compensation Votes on compensation plans for directors are determined on a case-by-case basis. Stock Plans in Lieu of Cash Votes for plans which provide participants with the option of taking all or a portion of their cash compensation in the form of stock are determined on a case-by-case basis. Generally vote for plans which provide a dollar-for-dollar cash for stock exchange. Votes for plans which do not provide a dollar-for-dollar cash for stock exchange should be determined on a case-by-case basis. Director Retirement Plans Generally vote against retirement plans for nonemployee directors. Generally vote for shareholder proposals to eliminate retirement plans for nonemployee directors. Management Proposals Seeking Approval to Reprice Options Votes on management proposals seeking approval to reprice options are evaluated on a case-by-case basis giving consideration to the following: (1) historic trading patterns; (2) rationale for the repricing; (3) value-for-value exchange; (4) option vesting; (5) term of the option; (6) exercise price; (7) participants; (8) employee stock purchase plans. Votes on employee stock purchase plans should be determined on a case-by-case basis. Generally vote for employee stock purchase plans where: (1) purchase price is at least 85 percent of fair market value; (2) offering period is 27 months or less, and (3) potential voting power dilution (VPD) is ten percent or less. Generally vote against employee stock purchase plans where either: (1) purchase price is less than 85 percent of fair market value; (2) Offering period is greater than 27 months, or (3) VPD is greater than ten percent Incentive Bonus Plans and Tax Deductibility Proposals Generally vote for proposals that simply amend shareholder-approved compensation plans to include administrative features or place a cap on the annual grants any one participant may receive. Generally vote for proposals to add performance goals to existing compensation plans. Votes to amend existing plans to increase shares reserved and to qualify for favorable tax treatment considered on a case-by-case basis. Generally vote for cash or cash and stock bonus plans that are submitted to shareholders for the purpose of exempting compensation from taxes if no increase in shares is requested. Employee Stock Ownership Plans (ESOPs) Generally vote for proposals to implement an ESOP or increase authorized shares for existing ESOPs, unless the number of shares allocated to the ESOP is excessive (more than five percent of outstanding shares.) 401(k) Employee Benefit Plans Generally vote for proposals to implement a 401(k) savings plan for employees. Shareholder Proposals Regarding Executive and Director Pay Generally vote for shareholder proposals seeking additional disclosure of executive and director pay information, provided the information requested is relevant to shareholders' needs, would not put the company at a competitive disadvantage relative to its industry, and is not unduly burdensome to the company. Generally vote against shareholder proposals seeking to set absolute levels on compensation or otherwise dictate the amount or form of compensation. Generally vote against shareholder proposals requiring director fees be paid in stock only. Generally vote for shareholder proposals to put option repricings to a shareholder vote. Vote for shareholders proposals to exclude pension fund income in the calculation of earnings used in determining executive bonuses/compensation. Vote on a case-by-case basis for all other shareholder proposals regarding executive and director pay, taking into account company performance, pay level versus peers, pay level versus industry, and long term corporate outlook. Performance-Based Option Proposals Generally vote for shareholder proposals advocating the use of performance-based equity awards (indexed, premium-priced, and performance-vested options), unless: (1) the proposal is overly restrictive; or (2) the company demonstrates that it is using a substantial portion of performance-based awards for its top executives. Stock Option Expensing Generally vote for shareholder proposals asking the company to expense stock options unless the company has already publicly committed to start expensing by a specific date. Golden and Tin Parachutes Generally vote for shareholder proposals to require golden and tin parachutes to be submitted for shareholder ratification, unless the proposal requires shareholder approval prior to entering into employment contracts. Vote on a case-by-case basis on proposals to ratify or cancel golden or tin parachutes. May 17, 2005 ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Information pertaining to the Chief Investment Officer and Investment Officer of the Credit Suisse Asset Management Income Fund, Inc., as of December 31, 2005, is set forth below. Martha B. Metcalf Managing Director; Associated with Credit Suisse Chief Investment Officer since 2005; Managing Director and Portfolio Manager of Since 2005 Invesco from 2000 to 2005; Officer of other Credit Suisse Funds Date of Birth: 04/09/65 Michael E. Gray Managing Director; Associated with Credit Suisse Investment Officer since 2004; Managing Director of Deutsche Asset Since 2005 Management from 2002 until 2004; Executive Director of UBS (London) from 1999 until 2002; Officer of other Credit Suisse Funds Date of Birth: 07/08/68
Registered Investment Companies, Pooled Investment Vehicles and Other Accounts Managed As reported to the Registrant, the information in the following table reflects the number of registered investment companies, pooled investment vehicles and other accounts managed by Ms. Metcalf and Mr. Gray and the total assets managed within each category as of December 31, 2005.
REGISTERED INVESTMENT OTHER POOLED INVESTMENT COMPANIES VEHICLES OTHER ACCOUNTS ----------------------------------------------------------------------------------------- Martha Metcalf 4 $721 million 3 $144 million 4 $99 million Michael Gray 9 $1,149 million 8 $327 million 36 $3,566 million
No advisory fee is paid based on performance for any of the accounts listed above. Potential Conflicts of Interest It is possible that conflicts of interest may arise in connection with the portfolio managers' management of the Portfolio's investments on the one hand and the investments of other accounts on the other. For example, the portfolio managers may have conflicts of interest in allocating management time, resources and investment opportunities among the Portfolio and other accounts they advise. In addition due to differences in the investment strategies or restrictions between the Portfolio and the other accounts, the portfolio managers may take action with respect to another account that differs from the action taken with respect to the Portfolio. Credit Suisse has adopted policies and procedures that are designed to minimize the effects of these conflicts. If Credit Suisse believes that the purchase or sale of a security is in the best interest of more than one client, it may (but is not obligated to) aggregate the orders to be sold or purchased to seek favorable execution or lower brokerage commissions, to the extent permitted by applicable laws and regulations. Credit Suisse may aggregate orders if all participating client accounts benefit equally (i.e., all receive an average price of the aggregated orders). In the event Credit Suisse aggregates an order for participating accounts, the method of allocation will generally be determined prior to the trade execution. Although no specific method of allocation of transactions (as well as expenses incurred in the transactions) is expected to be used, allocations will be designed to ensure that over time all clients receive fair treatment consistent with Credit Suisse's fiduciary duty to its clients (including its duty to seek to obtain best execution of client trades). The accounts aggregated may include registered and unregistered investment companies managed by Credit Suisse's affiliates and accounts in which Credit Suisse's officers, directors, agents, employees or affiliates own interests. Applicant may not be able to aggregate securities transactions for clients who direct the use of a particular broker-dealer, and the client also may not benefit from any improved execution or lower commissions that may be available for such transactions. Compensation Each portfolio manager is compensated for his or her services by Credit Suisse. The portfolio managers' compensation consists of a fixed base salary and a discretionary bonus that is not tied by formula to the performance of any Fund or account. The factors taken into account in determining a portfolio manager's bonus include the Fund's absolute performance, assets held in the Fund and other accounts managed by the portfolio managers, business growth, team work, management, corporate citizenship, etc. A portion of the bonus may be paid in phantom shares of Credit Suisse Group stock as deferred compensation. Phantom shares are shares representing an unsecured right to receive on a particular date a specified number of registered shares subject to certain terms and conditions. Like all employees of Credit Suisse, portfolio managers participate in Credit Suisse's profit sharing and 401(k) plans. Securities Ownership. As of December 31, 2005, Ms. Metcalf and Mr. Gray did not own any shares of the registrant. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. None. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors since the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(g) of Schedule 14A in its definitive proxy statement dated March 21, 2005. ITEM 11. 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 second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) 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. (a)(3) Not applicable. (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 ASSET MANAGEMENT INCOME FUND, INC. /s/ Steven B. Plump -------------------------------- Name: Steven B. Plump Title: Chief Executive Officer Date: March 9, 2006 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/ Steven B. Plump -------------------------------- Name: Steven B. Plump Title: Chief Executive Officer Date: March 9, 2006 /s/ Michael A. Pignataro -------------------------------- Name: Michael A. Pignataro Title: Chief Financial Officer Date: March 9, 2006