UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number

811-21311

 

PIMCO High Income Fund

(Exact name of registrant as specified in charter)

 

1345 Avenue of the Americas, New York, NY

 

10105

(Address of principal executive offices)

 

(Zip code)

 

Lawrence G. Altadonna - 1345 Avenue of the Americas, New York, NY 10105

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

212-739-3371

 

 

Date of fiscal year end:

March 31, 2008

 

 

Date of reporting period:

March 31, 2008

 

 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

 

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 



 

ITEM 1 REPORT TO SHAREHOLDERS

 

 

 

Contents

 

 

 

Letter to Shareholders

1

 

 

Fund Insights/Performance & Statistics

2

 

 

Schedule of Investments

3-11

 

 

Statement of Assets and Liabilities

12

 

 

Statement of Operations

13

 

 

Statement of Changes in Net Assets

14

 

 

Notes to Financial Statements

15-25

 

 

Financial Highlights

26

 

 

Report of Independent Registered Public Accounting Firm

27

 

 

Tax Information/Annual Shareholder Meeting Results

28

 

 

Privacy Policy/Proxy Voting Policies & Procedures

29

 

 

Dividend Reinvestment Plan

30

 

 

Board of Trustees

31-32

 

 

Principal Officers

33

 

 

 


 

PIMCO High Income Fund Letter to Shareholders

 

May 1, 2008

 

 

Dear Shareholder:

 

We are pleased to provide you with the annual report for PIMCO High Income Fund (the “Fund”) for the fiscal year ended March 31, 2008.

 

During the reporting period, higher-income U.S. bonds underperformed the broad bond market. The Merrill Lynch High Yield Master II Index returned (3.53)% during the period, compared with the Lehman Brothers Aggregate Bond Index return of 7.67%.

 

Since February 2008, industry-wide developments in the auction-rate preferred markets have caused auctions for the Funds’ auction-rate preferred shares (“ARPS”) to fail, as described in Note 5 in the accompanying notes to Financial Statements. At the time this report is being prepared, it is not possible to predict how and when full or partial liquidity will return, if at all, to the closed-end fund ARPS market. Additional information regarding ARPS, failed auctions and potential solutions to address the unprecedented lack of liquidity of the ARPS due to recent failed auctions can be accessed on our Web site, www.allianzinvestors.com/arps.

 

For performance and specific information on the Fund please refer to the following pages. If you have any questions regarding the information provided, we encourage you to contact your financial advisor or call the Fund’s shareholder servicing agent at (800) 331-1710. In addition, a wide range of information and resources is available on our Web site, www.allianzinvestors.com/closedendfunds.

 

Together with Allianz Global Investors Fund Management LLC, the Fund’s investment manager, and Pacific Investment Management Company LLC, the Fund’s sub-adviser, we thank you for investing with us.

 

We remain dedicated to serving your financial needs.

 

Sincerely,

 

 

 

Hans W. Kertess

Brian S. Shlissel

 

 

Chairman

President & Chief Executive Officer

 

3.31.08 | PIMCO High Income Fund Annual Report 1

 


 

PIMCO High Income Fund Fund Insights/Performance & Statistics

March 31, 2008 (unaudited)

 

·

For the fiscal year ended March 31, 2008, the Fund had a net asset value (NAV) return of (9.87)% and a market price return of (10.55)%.

 

·

Both security selection and a strong emphasis on the healthcare sector, which was among the top-performing industry categories, added to performance.

 

·

As significant pressure weighed on the home construction and building products sectors, avoiding those industry categories almost entirely during the 12-month period contributed materially to returns.

 

·

Within the energy sector, a focus on pipeline companies, which outperformed all other sub-categories of the broader sector, was a positive for performance.

 

·

A relatively strong emphasis on the automotive sector, which fell lower as auto manufacturer and captive finance companies came under pressure, detracted from returns.

 

·

As metals and mining bonds outperformed the overall high-yield bond market, alongside the surge in commodity prices, a relatively small weighting to the sector hindered performance.

 

·

An emphasis on B-rated issues within the high-yield market was a negative, as these bonds underperformed BB-rated bonds by approximately 150 basis points.

 

·

Modest exposure to emerging market sovereign debt helped performance, as these bonds outperformed the BB/B-rated corporate market by approximately 600 basis points.

 

Total Return(1):

 

Market Price

 

Net Asset Value (“NAV”)

 

1 year

 

(10.55

)%

 

(9.87

)%

 

3 year

 

8.09

%

 

4.34

%

 

Commencement of Operations (4/30/03) to 3/31/08

 

8.17

%

 

8.07

%

 

 

Common Share Market Price/NAV Performance:

Market Price/NAV:

 

 

 

Commencement of Operations (4/30/03) to 3/31/08

Market Price

 

$11.72

 

 NAV

NAV

 

$11.28

 

 Market Price

Premium to NAV

 

3.90%

 

Market Price Yield(2)

 

12.48%

 

Moody‘s Rating

(as a % of total investments)

 

 

 

 

 

(1) Past performance is no guarantee of future results. Returns are calculated by determining the percentage change in net asset value or market share price (as applicable) in the period covered. The calculation assumes that all of the Fund’s income dividends and capital gain distributions have been reinvested. Total return does not reflect broker commissions or sales charges. Total return for a period of more than one year represents the average annual total return.

The Fund’s performance at market price will differ from its results at NAV. Although market price returns typically reflect investment results over time, during shorter periods returns at market price can also be influenced by factors such as changing views about the Fund, market conditions, supply and demand for the Fund’s shares, or changes in Fund distributions.

An investment in the Fund involves risk, including the loss of principal. Investment return, price, yield and net asset value will fluctuate with changes in market conditions. This data is provided for information only and is not intended for trading purposes. Closed-end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering and once issued, shares of closed-end funds are sold in the open market through a stock exchange. Net asset value is equal to total assets applicable to common shareholders less total liabilities divided by the number of common shares outstanding. Holdings are subject to change daily.

(2) Market Price Yield is determined by dividing the annualized current monthly per share dividend to common shareholders by the market price per common share at March 31, 2008.

 

2 PIMCO High Income Fund Annual Report | 3.31.08

 


 

PIMCO High Income Fund Schedule of Investments

March 31, 2008

Principal
Amount
(000)

 

 

 

Credit Rating  
(Moody’s/S&P)*

 

Value

 

CORPORATE BONDS & NOTES – 75.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

Airlines – 0.9%

 

 

 

 

 

$8,760

 

American Airlines, Inc., 8.608%, 4/1/11

 

Baa3/BB+

 

$8,409,600

 

 

 

Continental Airlines, Inc.,

 

 

 

 

 

11,604

 

6.92%, 4/2/13 (a) (b) (g)

 

NR/NR

 

11,613,661

 

3,732

 

7.373%, 12/15/15

 

Ba1/BB+

 

3,377,315

 

138

 

United Air Lines, Inc., 6.602%, 9/1/13

 

Ba2/BBB

 

137,555

 

 

 

 

 

 

 

23,538,131

 

Automotive – 3.6%

 

 

 

 

 

 

 

Allison Transmission (a) (d),

 

 

 

 

 

12,000

 

11.00%, 11/1/15

 

Caa1/B-

 

10,500,000

 

4,000

 

11.25%, 11/1/15, PIK

 

Caa1/B-

 

3,380,000

 

 

 

ArvinMeritor, Inc.,

 

 

 

 

 

1,500

 

8.125%, 9/15/15

 

B2/B

 

1,230,000

 

19,525

 

8.75%, 3/1/12

 

B2/B

 

17,963,000

 

1,000

 

Cooper-Standard Automotive, Inc., 8.375%, 12/15/14

 

Caa1/CCC+

 

762,500

 

 

 

Ford Motor Co.,

 

 

 

 

 

19,350

 

7.45%, 7/16/31

 

Caa1/CCC+

 

12,867,750

 

3,900

 

7.50%, 8/1/26

 

NR/NR

 

2,515,500

 

3,000

 

9.215%, 9/15/21

 

Caa1/CCC+

 

2,377,500

 

 

 

General Motors Corp.,

 

 

 

 

 

4,000

 

8.10%, 6/15/24

 

Caa1/B-

 

2,800,000

 

1,300

 

8.25%, 7/15/23

 

Caa1/B-

 

916,500

 

3,000

 

8.80%, 3/1/21

 

Caa1/B-

 

2,287,500

 

20,000

 

9.40%, 7/15/21

 

Caa1/B-

 

15,300,000

 

5,596

 

Goodyear Tire & Rubber Co., 9.00%, 7/1/15

 

Ba3/BB-

 

5,945,750

 

 

 

Tenneco Automotive, Inc.,

 

 

 

 

 

7,025

 

8.625%, 11/15/14

 

B3/B

 

6,937,188

 

7,214

 

10.25%, 7/15/13

 

Ba3/BB

 

7,682,910

 

 

 

 

 

 

 

93,466,098

 

Building/Construction – 0.5%

 

 

 

 

 

11,985

 

Ahern Rentals, Inc., 9.25%, 8/15/13

 

B3/B+

 

9,558,037

 

€2,000

 

Grohe Holding GmbH, 8.625%, 10/1/14

 

B3/CCC+

 

2,479,821

 

 

 

 

 

 

 

12,037,858

 

Chemicals – 1.7%

 

 

 

 

 

 

 

ARCO Chemical Co.,

 

 

 

 

 

$3,808

 

9.80%, 2/1/20

 

B3/B

 

3,217,760

 

2,000

 

10.25%, 11/1/10

 

B3/B

 

2,040,000

 

5,500

 

Great Lakes Chemical Corp., 7.00%, 7/15/09

 

Ba2/BB+

 

5,692,500

 

21,925

 

Ineos Group Holdings PLC, 8.50%, 2/15/16 (a) (d)

 

B3/B-

 

17,156,312

 

15,300

 

Nalco Co., 8.875%, 11/15/13

 

B3/B-

 

15,797,250

 

 

 

 

 

 

 

43,903,822

 

Commercial Products – 0.8%

 

 

 

 

 

21,200

 

Hertz Corp., 8.875%, 1/1/14

 

B1/BB-

 

20,193,000

 

Computer Services – 2.2%

 

 

 

 

 

20,870

 

First Data Corp., 9.875%, 9/24/15 (a) (d)

 

B3/B

 

17,191,662

 

 

 

SunGard Data Systems, Inc.,

 

 

 

 

 

21,556

 

9.125%, 8/15/13

 

Caa1/B+

 

21,879,340

 

17,000

 

10.25%, 8/15/15

 

Caa1/B-

 

17,170,000

 

 

 

 

 

 

 

56,241,002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.31.08 | PIMCO High Income Fund Annual Report 3


 

PIMCO High Income Fund Schedule of Investments

March 31, 2008 (continued)

Principal
Amount
(000)

 

 

 

Credit Rating  
(Moody’s/S&P)*

 

Value

 

 

 

 

 

 

 

 

 

Consumer Products – 0.9%

 

 

 

 

 

 

 

Buhrmann U.S., Inc.,

 

 

 

 

 

$500

 

7.875%, 3/1/15

 

B2/B

 

$470,000

 

6,875

 

8.25%, 7/1/14

 

B2/BB-

 

6,496,875

 

16,400

 

NPC International, Inc., 9.50%, 5/1/14

 

Caa1/B-

 

14,924,000

 

 

 

 

 

 

 

21,890,875

 

Containers & Packaging – 1.0%

 

 

 

 

 

 

 

Berry Plastics Holding Corp.,

 

 

 

 

 

10,750

 

8.875%, 9/15/14

 

Caa1/B

 

9,433,125

 

1,700

 

10.25%, 3/1/16

 

Caa2/CCC+

 

1,317,500

 

6,263

 

Jefferson Smurfit Corp., 8.25%, 10/1/12

 

B3/B-

 

5,675,844

 

 

 

Smurfit-Stone Container,

 

 

 

 

 

2,475

 

8.00%, 3/15/17

 

B3/B-

 

2,091,375

 

7,000

 

8.375%, 7/1/12

 

B3/B-

 

6,370,000

 

 

 

 

 

 

 

24,887,844

 

Electronics – 1.2%

 

 

 

 

 

14,150

 

Sanmina-SCI Corp., 8.125%, 3/1/16

 

B3/B-

 

12,593,500

 

20,375

 

Sensata Technologies BV, 8.00%, 5/1/14

 

B3/B-

 

18,031,875

 

 

 

 

 

 

 

30,625,375

 

Financial Services – 14.7%

 

 

 

 

 

29,370

 

AES Ironwood LLC, 8.857%, 11/30/25

 

B1/B+

 

32,012,900

 

7,672

 

AES Red Oak LLC, 8.54%, 11/30/19

 

B1/BB-

 

7,710,055

 

20,125

 

American Express Co., 7.00%, 3/19/18

 

NR/NR

 

21,180,798

 

13,000

 

Bank of America Corp., 8.00%, 1/30/18, FRN (i)

 

Aa3/A+

 

13,041,860

 

5,000

 

Buffalo Thunder Development Authority, 9.375%, 12/15/14 (a) (d)

 

B2/B

 

3,775,000

 

7,700

 

Chukchansi Economic Development Authority, 8.00%, 11/15/13 (a) (d)

 

B2/BB-

 

6,968,500

 

9,977

 

Consolidated Communications Holdings, Inc., 9.75%, 4/1/12

 

B1/BB-

 

10,513,264

 

 

 

Ford Motor Credit Co. LCC,

 

 

 

 

 

10,000

 

7.127%, 1/13/12, FRN

 

B1/B

 

7,403,430

 

85,950

 

8.00%, 12/15/16

 

B1/B

 

67,417,633

 

37,305

 

General Motors Acceptance Corp. LLC, 8.00%, 11/1/31

 

B1/B+

 

26,793,160

 

15,800

 

Hexion U.S. Finance Corp., 9.75%, 11/15/14

 

B3/B

 

17,024,500

 

 

 

JET Equipment Trust (a) (d) (f) (g),

 

 

 

 

 

91

 

7.63%, 8/15/12

 

NR/NR

 

30,431

 

259

 

10.00%, 6/15/12

 

NR/NR

 

225,645

 

18,445

 

KRATON Polymers LLC, 8.125%, 1/15/14

 

B3/CCC+

 

15,401,575

 

 

 

LVB Acquisition Merger Sub., Inc. (a) (d),

 

 

 

 

 

13,375

 

10.375%, 10/15/17, PIK

 

B3/B-

 

13,943,438

 

37,625

 

11.625%, 10/15/17

 

Caa1/B-

 

37,813,125

 

10,025

 

Nuveen Investments, Inc., 10.50%, 11/15/15 (a) (d)

 

B3/B-

 

8,646,562

 

£2,852

 

Royal Bank of Scotland PLC, 9.37%, 4/6/11, FRN (g)

 

NR/NR

 

4,535,386

 

$21,203

 

Universal City Development Partners Ltd., 11.75%, 4/1/10

 

B1/B+

 

21,839,090

 

8,030

 

Universal City Florida Holding Co., 8.375%, 5/1/10

 

B3/B-

 

7,909,550

 

 

 

UPC Holding BV,

 

 

 

 

 

€1,200

 

7.75%, 1/15/14

 

B3/B-

 

1,694,676

 

€10,200

 

8.625%, 1/15/14

 

B3/B-

 

14,687,590

 

$36,100

 

Wachovia Corp., 7.98%, 3/15/18, FRN (i)

 

A2/A

 

35,577,741

 

6,100

 

Yankee Acquisition Corp., 9.75%, 2/15/17

 

Caa1/CCC+

 

4,880,000

 

 

 

 

 

 

 

381,025,909

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4 PIMCO High Income Fund Annual Report | 3.31.08

 


 

PIMCO High Income Fund Schedule of Investments

March 31, 2008 (continued)

Principal
Amount
(000)

 

 

 

Credit Rating  
(Moody’s/S&P)*

 

Value

 

 

 

 

 

 

 

 

 

Food – 1.7%

 

 

 

 

 

$5,500

 

American Stores Co., 8.00%, 6/1/26

 

NR/NR

 

$5,594,528

 

1

 

Dole Foods Co., Inc., 8.875%, 3/15/11

 

Caa1/CCC+

 

663

 

24,925

 

Ingles Markets, Inc., 8.875%, 12/1/11

 

B3/B+

 

25,298,875

 

15,145

 

Pilgrim’s Pride Corp., 8.375%, 5/1/17

 

B2/B

 

13,403,325

 

 

 

 

 

 

 

44,297,391

 

Food Services – 0.7%

 

 

 

 

 

16,850

 

ARAMARK Corp., 8.50%, 2/1/15

 

B3/B

 

16,976,375

 

Healthcare & Hospitals – 5.9%

 

 

 

 

 

34,950

 

Community Health Systems, Inc., 8.875%, 7/15/15

 

B3/B-

 

35,255,812

 

 

 

HCA, Inc.,

 

 

 

 

 

19,631

 

7.19%, 11/15/15

 

Caa1/B-

 

16,749,837

 

14,124

 

7.50%, 12/15/23

 

Caa1/B-

 

11,162,564

 

4,130

 

7.58%, 9/15/25

 

Caa1/B-

 

3,253,928

 

2,000

 

7.69%, 6/15/25

 

Caa1/B-

 

1,595,362

 

7,900

 

8.36%, 4/15/24

 

Caa1/B-

 

6,598,191

 

3,994

 

8.75%, 9/1/10

 

Caa1/B-

 

4,013,970

 

22,052

 

9.00%, 12/15/14

 

Caa1/B-

 

20,533,786

 

13,000

 

9.25%, 11/15/16

 

B2/BB-

 

13,520,000

 

14,450

 

9.625%, 11/15/16, PIK

 

B2/BB-

 

15,028,000

 

 

 

Tenet Healthcare Corp.,

 

 

 

 

 

4,300

 

9.25%, 2/1/15

 

Caa1/B

 

4,042,000

 

20,575

 

9.875%, 7/1/14

 

Caa1/B

 

20,009,188

 

 

 

 

 

 

 

151,762,638

 

Hotels/Gaming – 1.3%

 

 

 

 

 

16,179

 

Harrah’s Operating Co., Inc., 10.75%, 2/1/16 (a) (d)

 

B3/B-

 

13,711,702

 

3,325

 

Herbst Gaming, Inc., 8.125%, 6/1/12

 

Caa2/CC

 

623,438

 

13,779

 

Mandalay Resort Group, 9.375%, 2/15/10

 

B1/B+

 

14,261,265

 

6,525

 

Station Casinos, Inc., 7.75%, 8/15/16

 

B2/B+

 

5,285,250

 

 

 

 

 

 

 

33,881,655

 

Machinery – 0.3%

 

 

 

 

 

2,600

 

Chart Industries, Inc., 9.125%, 10/15/15

 

B3/B

 

2,561,000

 

4,025

 

Terex Corp., 8.00%, 11/15/17

 

Ba3/B+

 

4,025,000

 

 

 

 

 

 

 

6,586,000

 

Metals & Mining – 0.3%

 

 

 

 

 

8,305

 

Freeport-McMoRan Copper & Gold, Inc., 8.375%, 4/1/17

 

Ba2/BB

 

8,834,444

 

Miscellaneous – 2.9%

 

 

 

 

 

73,824

 

Dow Jones CDX U.S. High Yield, 8.375%, 12/29/11 (a) (d) (h)

 

B3/NR

 

73,362,898

 

Multi-Media – 4.3%

 

 

 

 

 

3,000

 

Cablemas S.A. de C.V., 9.375%, 11/15/15 (a) (d)

 

B1/BB-

 

3,270,000

 

5,600

 

Cablevision Systems Corp., 8.00%, 4/15/12

 

B2/B+

 

5,474,000

 

7,700

 

CanWest MediaWorks L.P., 9.25%, 8/1/15 (a) (d)

 

B2/CCC+

 

7,122,500

 

5,925

 

CCH I Holdings LLC, 9.92%, 4/1/14

 

Caa3/CCC

 

2,844,000

 

42,850

 

CCO Holdings LLC, 8.75%, 11/15/13

 

Caa1/CCC

 

36,851,000

 

10,000

 

Charter Communications Holdings I LLC, 11.00%, 10/1/15

 

Caa3/CCC

 

7,000,000

 

11,325

 

Charter Communications Operating LLC,
8.375%, 4/30/14 (a) (d)

 

B3/B-

 

10,249,125

 

 

 

CSC Holdings, Inc.,

 

 

 

 

 

4,800

 

7.625%, 7/15/18

 

B1/BB

 

4,404,000

 

4,485

 

7.875%, 2/15/18

 

B1/BB

 

4,171,050

 

2,000

 

8.125%, 7/15/09

 

B1/BB

 

2,025,000

 

€6,045

 

Lighthouse International Co. S.A., 8.00%, 4/30/14 (a) (d)

 

B2/BB-

 

7,519,205

 

$7,000

 

Nielsen Finance LLC, 10.00%, 8/1/14

 

Caa1/B-

 

7,000,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.31.08 | PIMCO High Income Fund Annual Report 5


 

PIMCO High Income Fund Schedule of Investments

March 31, 2008 (continued)

Principal
Amount
(000)

 

 

 

Credit Rating  
(Moody’s/S&P)*

 

Value

 

 

 

 

 

 

 

 

 

Multi-Media (continued)

 

 

 

 

 

$7,895

 

Rogers Cable, Inc., 8.75%, 5/1/32

 

Baa3/BBB-

 

$8,771,874

 

4,750

 

Unity Media GmbH, 10.375%, 2/15/15 (a) (d)

 

Caa2/B-

 

4,298,750

 

 

 

 

 

 

 

111,000,504

 

Oil & Gas – 5.7%

 

 

 

 

 

17,000

 

Dynegy Holdings, Inc., 8.375%, 5/1/16

 

B2/B

 

16,915,000

 

10,325

 

Dynergy-Roseton Danskammer, Inc., 7.67%, 11/8/16

 

Ba3/B

 

10,344,411

 

 

 

El Paso Corp.,

 

 

 

 

 

26,000

 

7.80%, 8/1/31

 

Ba3/BB-

 

26,830,986

 

27,850

 

8.05%, 10/15/30

 

Ba3/BB-

 

29,234,257

 

3,000

 

Enbridge Energy Partners L.P., 8.05%, 10/1/37, FRN

 

Baa3/BB+

 

2,766,852

 

 

 

Ferrellgas L.P.,

 

 

 

 

 

14,325

 

8.75%, 6/15/12

 

B2/B-

 

14,629,406

 

20,000

 

8.87%, 8/1/09 (a) (b) (g)

 

NR/NR

 

21,364,154

 

7,000

 

OPTI Canada, Inc., 8.25%, 12/15/14

 

NR/NR

 

6,965,000

 

17,125

 

SemGroup L.P., 8.75%, 11/15/15 (a) (d)

 

B1/NR

 

15,755,000

 

1,099

 

Williams Cos., Inc., 7.875%, 9/1/21

 

Baa3/BB+

 

1,196,536

 

 

 

 

 

 

 

146,001,602

 

Paper/Paper Products – 2.7%

 

 

 

 

 

8,750

 

Cascades, Inc., 7.25%, 2/15/13

 

Ba3/BB-

 

7,765,625

 

 

 

Georgia-Pacific Corp.,

 

 

 

 

 

27,775

 

8.00%, 1/15/24

 

B2/B+

 

24,580,875

 

16,585

 

8.875%, 5/15/31

 

B2/B+

 

14,843,575

 

 

 

Verso Paper Holdings LLC,

 

 

 

 

 

11,800

 

9.125%, 8/1/14

 

B2/B+

 

11,446,000

 

12,500

 

11.375%, 8/1/16

 

B3/CCC+

 

11,531,250

 

 

 

 

 

 

 

70,167,325

 

Printing/Publishing – 1.6%

 

 

 

 

 

1,131

 

Dex Media West LLC, 9.875%, 8/15/13

 

B1/BB-

 

986,797

 

1,000

 

Hollinger, Inc., 11.875%, 3/1/11 (a) (b) (d) (f) (g)

 

NR/NR

 

202,180

 

54,925

 

RH Donnelley Corp., 8.875%, 1/15/16

 

B3/B

 

35,014,688

 

6,100

 

TL Acquisitions, Inc., 10.50%, 1/15/15 (a) (d)

 

Caa1/CCC+

 

5,276,500

 

 

 

 

 

 

 

41,480,165

 

Real Estate – 0.3%

 

 

 

 

 

6,696

 

Delhaize America, Inc., 9.00%, 4/15/31

 

Baa3/BBB-

 

8,080,351

 

Retail – 0.8%

 

 

 

 

 

27,875

 

Bon-Ton Stores, Inc., 10.25%, 3/15/14

 

Caa1/CCC+

 

18,745,937

 

€2,775

 

Edcon Proprietary Ltd., 7.856%, 6/15/14, FRN (a) (d)

 

B2/BB-

 

2,924,089

 

 

 

 

 

 

 

21,670,026

 

Semi-conductors – 1.0%

 

 

 

 

 

 

 

Freescale Semiconductor, Inc.,

 

 

 

 

 

$31,675

 

8.875%, 12/15/14

 

B2/B-

 

24,944,063

 

550

 

9.125%, 12/15/14, PIK

 

B2/B-

 

404,250

 

1,490

 

10.125%, 12/15/16

 

B3/B-

 

1,013,200

 

 

 

 

 

 

 

26,361,513

 

Telecommunications – 14.8%

 

 

 

 

 

14,555

 

Centennial Communications Corp., 8.125%, 2/1/14

 

B2/B

 

13,827,250

 

30,550

 

Cincinnati Bell, Inc., 8.375%, 1/15/14

 

B2/B-

 

28,793,375

 

24,425

 

Citizens Communications Co., 9.00%, 8/15/31

 

Ba2/BB+

 

21,494,000

 

16,550

 

Cricket Communications, Inc., 9.375%, 11/1/14

 

Caa1/B-

 

15,763,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6 PIMCO High Income Fund Annual Report | 3.31.08

 


 

PIMCO High Income Fund Schedule of Investments

March 31, 2008 (continued)

Principal
Amount
(000)

 

 

 

Credit Rating  
(Moody’s/S&P)*

 

Value

 

 

 

 

 

 

 

 

 

Telecommunications (continued)

 

 

 

 

 

 

 

Digicel Group Ltd. (a) (d),

 

 

 

 

 

$18,175

 

8.875%, 1/15/15

 

Caa2/NR

 

$15,221,562

 

2,717

 

9.125%, 1/15/15, PIK

 

Caa2/NR

 

2,248,318

 

 

 

Hawaiian Telcom Communications, Inc.,

 

 

 

 

 

12,225

 

9.75%, 5/1/13

 

B3/CCC

 

6,662,625

 

1,250

 

10.318%, 5/1/13, FRN

 

B3/CCC

 

656,250

 

 

 

Intelsat Bermuda Ltd.,

 

 

 

 

 

20,000

 

9.25%, 6/15/16

 

B3/BB-

 

20,250,000

 

10,000

 

11.25%, 6/15/16

 

Caa2/CCC+

 

10,187,500

 

16,850

 

Intelsat Subsidiary Holding Co., Ltd., 8.625%, 1/15/15

 

B3/BB-

 

17,060,625

 

25,500

 

MetroPCS Wireless, Inc., 9.25%, 11/1/14

 

Caa1/B-

 

23,587,500

 

 

 

Nordic Telephone Co. Holdings ApS,

 

 

 

 

 

€2,300

 

8.25%, 5/1/16 (a) (d)

 

B2/B

 

3,462,242

 

€5,000

 

8.25%, 5/1/16

 

B2/B

 

7,526,613

 

$12,425

 

8.875%, 5/1/16 (a) (d)

 

B2/B

 

12,114,375

 

 

 

Nortel Networks Ltd.,

 

 

 

 

 

21,400

 

10.125%, 7/15/13

 

B3/B-

 

19,688,000

 

16,875

 

10.75%, 7/15/16

 

NR/NR

 

15,503,906

 

14,625

 

PanAmSat Corp., 6.875%, 1/15/28

 

B1/BB-

 

11,626,875

 

31,000

 

Qwest Capital Funding, Inc., 7.90%, 8/15/10

 

B1/B+

 

31,155,000

 

2,079

 

Qwest Communications International, Inc., 7.50%, 2/15/14

 

Ba3/B+

 

1,964,655

 

10,450

 

Qwest Corp., 8.875%, 3/15/12

 

Ba1/BBB-

 

10,711,250

 

18,020

 

Rural Cellular Corp., 9.875%, 2/1/10

 

B3/CCC

 

18,605,650

 

4,000

 

Sprint Capital Corp., 8.75%, 3/15/32

 

Baa3/BBB-

 

3,387,556

 

12,100

 

Superior Essex Communications LLC, 9.00%, 4/15/12

 

B3/B+

 

11,706,750

 

4,000

 

TelCordia Technologies, Inc., 8.008%, 7/15/12, FRN (a) (d)

 

B2/B

 

3,060,000

 

24,975

 

Time Warner Telecom Holdings, Inc., 9.25%, 2/15/14

 

B3/CCC+

 

25,349,625

 

 

 

West Corp.,

 

 

 

 

 

8,280

 

9.50%, 10/15/14

 

Caa1/B-

 

7,452,000

 

6,500

 

11.00%, 10/15/16

 

Caa1/B-

 

5,525,000

 

13,000

 

Wind Acquisition Finance S.A., 10.75%, 12/1/15 (a) (d)

 

B2/B

 

13,325,000

 

2,000

 

Windstream Corp., 8.625%, 8/1/16

 

Ba3/BB

 

1,975,000

 

3,075

 

Windstream Regatta Holdings, Inc., 11.00%, 12/1/17 (a) (d)

 

B2/B

 

1,891,125

 

 

 

 

 

 

 

381,783,502

 

Transportation – 0.1%

 

 

 

 

 

2,400

 

Grupo Transportacion Ferroviaria Mexicana S.A. de C.V.,
9.375%, 5/1/12

 

B2/NR

 

2,490,000

 

Utilities – 3.8%

 

 

 

 

 

2,000

 

Empresa Energetica de Sergipe and Sociedade Anonima de Eletrificaao da Paraiba, 10.50%, 7/19/13 (a) (d)

 

Ba3/B+

 

2,357,046

 

16,365

 

Energy Future Holdings Corp., 10.875%, 11/1/17 (a) (d)

 

B3/B-

 

16,610,475

 

19,450

 

Legrand Holding S.A., 8.50%, 2/15/25

 

Baa3/BBB

 

21,984,257

 

19,534

 

Midwest Generation LLC, 8.56%, 1/2/16

 

Baa3/BB+

 

21,194,744

 

21,500

 

PSE&G Energy Holdings LLC, 8.50%, 6/15/11

 

Ba3/BB-

 

22,855,166

 

12,000

 

Texas Competitive Electric Holdings Co. LLC,
10.25%, 11/1/15 (a) (d)

 

B3/CCC

 

12,015,000

 

 

 

 

 

 

 

97,016,688

 

Total Corporate Bonds & Notes (cost-$2,097,007,459)

 

 

 

1,949,562,991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.31.08 | PIMCO High Income Fund Annual Report 7

 


 

PIMCO High Income Fund Schedule of Investments

March 31, 2008 (continued)

Principal
Amount
(000)

 

 

 

Credit Rating  
(Moody’s/S&P)*

 

Value

 

 

 

 

 

 

 

 

 

U.S. GOVERNMENT AGENCY SECURITIES – 14.2%

 

 

 

 

 

 

 

Fannie Mae, MBS, TBA (e),

 

 

 

 

 

$37,000

 

5.00%

 

Aaa/AAA

 

$36,543,272

 

133,600

 

5.50%

 

Aaa/AAA

 

134,873,342

 

184,300

 

6.00%

 

Aaa/AAA

 

188,821,063

 

5,000

 

Freddie Mac, 5.50%, MBS, TBA (e)

 

Aaa/AAA

 

5,049,220

 

Total U.S. Government Agency Securities (cost-$359,087,375)

 

 

 

365,286,897

 

 

 

 

 

 

 

SENIOR LOANS (a) (c) – 3.7%

 

 

 

 

 

 

 

 

 

 

 

Chemicals – 0.0%

 

 

 

 

 

 

 

INEOS Group Ltd., Term A (b),

 

 

 

 

 

386

 

4.655%, 5/28/08

 

 

 

340,126

 

1,148

 

4.635%, 9/28/08

 

 

 

1,006,569

 

 

 

 

 

 

 

1,346,695

 

Commercial Products – 0.2%

 

 

 

 

 

7,300

 

Berry Plastics, 11.646%, 6/5/14 (b)

 

 

 

6,238,764

 

Entertainment – 0.5%

 

 

 

 

 

 

 

Tribune Co.,

 

 

 

 

 

13,482

 

5.542%, 5/30/14, Term B

 

 

 

9,069,227

 

3,034

 

7.396%, 5/30/09, Term X

 

 

 

2,728,374

 

 

 

 

 

 

 

11,797,601

 

Financial Services – 0.6%

 

 

 

 

 

19,900

 

Chrysler Financial Corp., 6.80%, 8/3/12

 

 

 

16,552,939

 

Healthcare & Hospitals – 0.1%

 

 

 

 

 

 

 

HealthSouth Corp.,

 

 

 

 

 

19

 

5.21%, 2/2/13

 

 

 

17,808

 

3,979

 

5.50%, 2/2/13

 

 

 

3,686,649

 

 

 

 

 

 

 

3,704,457

 

Recreation – 0.4%

 

 

 

 

 

 

 

Amadeus Global Travel (b),

 

 

 

 

 

€809

 

6.752%, 7/1/14, Term A

 

 

 

1,122,292

 

$1,250

 

6.846%, 7/1/13, Term B

 

 

 

1,061,111

 

1,250

 

7.096%, 6/29/12, Term C

 

 

 

1,078,541

 

6,948

 

Travelport, 4.954%, 8/23/13, Term DD

 

 

 

6,079,063

 

 

 

 

 

 

 

9,341,007

 

Semi-conductors – 0.6%

 

 

 

 

 

10,700

 

Sensata Technologies Inc., 9.883%, 10/27/13

 

 

 

14,496,256

 

Telecommunications – 0.7%

 

 

 

 

 

 

 

Integra Telecom, Inc., Term T (b),

 

 

 

 

 

1,627

 

6.946%, 8/31/13

 

 

 

1,496,894

 

1,345

 

7.335%, 8/31/13

 

 

 

1,236,975

 

1,008

 

7.438%, 8/31/13

 

 

 

927,731

 

 

 

Nordic Telephone Co. Holdings ApS,

 

 

 

 

 

€1,434

 

6.05%, 11/30/14, Term B

 

 

 

2,139,883

 

€1,485

 

6.30%, 11/30/14, Term C

 

 

 

2,231,979

 

$1,888

 

NTL Investment, 6.055%, 9/3/12, Term B

 

 

 

1,669,496

 

 

 

Telesat,

 

 

 

 

 

4,200

 

11.50%, 10/31/08

 

 

 

4,011,000

 

1,000

 

10.00%, 10/31/08

 

 

 

955,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8 PIMCO High Income Fund Annual Report | 3.31.08


 

PIMCO High Income Fund Schedule of Investments

March 31, 2008 (continued)

Principal
Amount
(000)

 

 

 

Credit Rating  
(Moody’s/S&P)*

 

Value

 

 

 

 

 

 

 

 

 

Telecommunications (continued)

 

 

 

 

 

$3,000

 

West Corp., 7.00%, 10/24/13, Term B (b)

 

 

 

$2,607,501

 

 

 

 

 

 

 

17,276,459

 

Utilities – 0.4%

 

 

 

 

 

10,600

 

Sandridge Energy, Inc., 8.625%, 4/1/15, Term CD

 

 

 

10,480,750

 

Wholesale – 0.2%

 

 

 

 

 

4,888

 

Roundy’s, Inc., 5.69%, 11/3/11, Term B

 

 

 

4,582,617

 

Total Senior Loans (cost-$106,156,005)

 

 

 

95,817,545

 

 

 

 

 

 

 

 

 

MUNICIPAL BONDS & NOTES – 0.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

California – 0.6%

 

 

 

 

 

 

 

Los Angeles Community Redev. Agcy. Rev., Ser. H,

 

 

 

 

 

725

 

9.00%, 9/1/12

 

NR/NR

 

778,578

 

1,160

 

9.75%, 9/1/17

 

NR/NR

 

1,254,343

 

1,375

 

9.75%, 9/1/22

 

NR/NR

 

1,464,636

 

2,170

 

9.75%, 9/1/27

 

NR/NR

 

2,293,386

 

3,480

 

9.75%, 9/1/32

 

NR/NR

 

3,672,618

 

 

 

San Diego Redev. Agcy., Tax Allocation,

 

 

 

 

 

1,785

 

6.59%, 11/1/13

 

Baa3/NR

 

1,899,276

 

1,435

 

7.49%, 11/1/18

 

Baa3/NR

 

1,539,898

 

1,885

 

7.74%, 11/1/21

 

Baa3/NR

 

2,004,509

 

 

 

 

 

 

 

14,907,244

 

Pennsylvania – 0.2%

 

 

 

 

 

 

 

Economic Dev. Financing Auth. Rev., VRN (l),

 

 

 

 

 

5,300

 

6.75%, 12/1/36, Ser. A

 

NR/NR

 

5,286,697

 

1,000

 

6.75%, 12/1/36

 

NR/NR

 

997,490

 

 

 

 

 

 

 

6,284,187

 

Total Municipal Bonds & Notes (cost-$20,616,961)

 

 

 

21,191,431

 

 

 

 

 

 

 

 

 

ASSET-BACKED SECURITIES – 0.0%

 

 

 

 

 

688

 

Reliant Energy Mid-Atlantic Power Holdings LLC,
9.237%, 7/2/17 (cost-$723,605)

 

Ba2/B+

 

718,980

 

 

 

 

 

 

 

 

 

PREFERRED STOCK – 0.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecommunications – 0.0%

 

 

 

 

 

155,565

 

Superior Essex Holding Corp., 9.50%, Ser. A (cost-$129,313)

 

NR/NR

 

186,678

 

 

 

 

 

 

 

 

 

SHORT-TERM INVESTMENTS – 5.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury Bills (j) – 2.8%

 

 

 

 

 

$71,500

 

1.29%-2.13%, 5/29/08-6/26/08 (cost-$71,327,078)

 

 

 

71,140,278

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.31.08 | PIMCO High Income Fund Annual Report 9


 

PIMCO High Income Fund Schedule of Investments

March 31, 2008 (continued)

Principal
Amount
(000)

 

 

 

 

Value

 

 

 

 

 

Repurchase Agreements – 2.8%

 

 

 

$15,258

 

State Street Bank & Trust Co.,
dated 3/31/08, 1.90%, due
4/1/08, proceeds $15,258,805;
collateralized by Federal Home
Loan Bank, 5.00%, due 4/25/08,
valued at $15,566,119 including
accrued interest

 

$15,258,000

 

57,100

 

Deutsche Bank AG,
dated 3/31/08, 1.20%, due
4/1/08, proceeds $57,101,903;
collateralized by U.S. Treasury
Inflation Index Bond, 3.00%,
due 7/15/12, valued at $58,243,764
including accrued interest

 

57,100,000

 

Total Repurchase Agreements (cost-$72,358,000)

 

72,358,000

 

Total Short-Term Investments (cost-$143,685,078)

 

143,498,278

 

 

 

 

 

 

 

OPTIONS PURCHASED (k) – 0.0%

 

 

 

 

 

 

 

 

 

Contracts/
Notional
Amount

 

 

 

 

 

 

 

 

 

Put Options – 0.0%

 

 

 

 

 

Financial Future Euro–90 day (CME),

 

 

 

969

 

strike price $94.63, expires 9/15/08 (cost-$14,535)

 

2

 

Total Investments before options written (cost-$2,727,420,331) – 100.0%

 

2,576,262,802

 

 

 

 

 

 

 

OPTIONS WRITTEN (k) – (0.0)%

 

 

 

 

 

 

 

Call Options – (0.0)%

 

 

 

 

 

2-Year Interest Rate Swap (OTC),

 

 

 

 

 

Pay 3-Month USD-LIBOR Floating Rate Index,

 

 

 

5,300,000

 

strike rate 1.50%, expires 9/20/08

 

(81,355

)

 

 

2-Year Interest Rate Swap (OTC),

 

 

 

 

 

Pay 3-Month USD-LIBOR Floating Rate Index,

 

 

 

1,100,000

 

strike rate 1.50%, expires 9/22/08

 

(16,885

)

 

 

 

 

(98,240

)

Put Options – (0.0)%

 

 

 

 

 

2-Year Interest Rate Swap (OTC),

 

 

 

 

 

Pay 3-Month USD-LIBOR Floating Rate Index,

 

 

 

5,300,000

 

strike rate 1.50%, expires 9/20/08

 

(20,900

)

 

 

2-Year Interest Rate Swap (OTC),

 

 

 

 

 

Pay 3-Month USD-LIBOR Floating Rate Index,

 

 

 

1,100,000

 

strike rate 1.50%, expires 9/22/08

 

(101,495

)

 

 

 

 

(122,395

)

Total Options Written (premiums received-$242,140)

 

(220,635

)

Total Investments net of options written (cost-$2,727,178,191) – 100.0%

 

$2,576,042,167

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes to Schedule of Investments:

 

 

 

*

Unaudited

 

(a)

Private Placement–Restricted as to resale and may not have a readily available market. Securities with an aggregate value of $474,423,129, representing 18.42% of total investments.

 

 

10 PIMCO High Income Fund Annual Report | 3.31.08


 

PIMCO High Income Fund Schedule of Investments

March 31, 2008 (continued)

 

 

 

 

 

(b)

Illiquid security.

 

(c)

These securities generally pay interest at rates which are periodically pre-determined by reference to a base lending rate plus a premium. These base lending rates are generally either the lending rate offered by one or more major European banks, such as the “LIBOR” or the prime rate offered by one or more major United States banks, or the certificate of deposit rate. These securities are generally considered to be restricted as the Fund is ordinarily contractually obligated to receive approval from the agent bank and/or borrower prior to disposition. Remaining maturities of senior loans may be less than the stated maturities shown as a result of contractual or optional payments by the borrower. Such prepayments cannot be predicted with certainty. The interest rate disclosed reflects the rate in effect on March 31, 2008.

 

(d)

144A Security–Security exempt from registration, under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, typically only to qualified institutional buyers. Unless otherwise indicated, these securities are not considered to be illiquid.

 

(e)

Delayed-delivery security. To be delivered after March 31, 2008.

 

(f)

Security in default.

 

(g)

Securities with an aggregate value of $37,971,457, representing 1.47% of total investments, have been fair-valued using modeling tools or methods as described in Note 1(a) in the Notes to Financial Statements.

 

(h)

Credit-linked trust certificate.

 

(i)

Perpetual maturity security. Maturity date shown is the first call date. Interest rate is fixed until the first call date and variable thereafter.

 

(j)

All or partial amount segregated as collateral for options written, delayed-delivery securities and swaps.

 

(k)

Non-income producing.

 

(l)

Subject to Alternative Minimum Tax.

 

 

 

 

Glossary:

 

£

-

British Pound

 

-

Euro

 

CME

-

Chicago Mercantile Exchange

 

FRN

-

Floating Rate Note. The interest rate disclosed reflects the rate in effect on March 31, 2008.

 

LIBOR

-

London Inter-Bank Offered Rate

 

MBS

-

Mortgage-Backed Securities

 

NR

-

Not Rated

 

OTC

-

Over-the-Counter

 

PIK

-

Payment-in-Kind

 

TBA

-

To Be Announced

 

VRN

-

Variable Rate Note. Instruments whose interest rates change on specified date (such as a coupon date or interest payment date) and/or whose interest rates vary with changes in a designated base rate (such as the prime interest rate). The interest rate disclosed reflects the rate in effect on March 31, 2008.

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Financial Statements. | 3.31.08 | PIMCO High Income Fund Annual Report 11


 

PIMCO High Income Fund Statement of Assets and Liabilities

March 31, 2008

 

 

 

 

 

 

 

 

Assets:

 

 

 

Investments, at value (cost-$2,727,420,331)

 

$2,576,262,802

 

Cash (including foreign currency of $725,402 with a cost of $720,876)

 

811,246

 

Interest receivable

 

52,930,281

 

Premium for swaps purchased

 

39,903,284

 

Receivable for investments sold

 

37,333,556

 

Unrealized appreciation of swaps

 

31,242,431

 

Unrealized appreciation on forward foreign currency contracts

 

5,521,940

 

Deposits with brokers for futures contracts collateral

 

2,110,000

 

Receivable for variation margin on futures contracts

 

321,525

 

Receivable for terminated swaps

 

107,930

 

Prepaid expenses

 

97,558

 

Total Assets

 

2,746,642,553

 

 

 

 

 

Liabilities:

 

 

 

Payable for investments purchased

 

399,396,793

 

Unrealized depreciation of swaps

 

95,644,456

 

Dividends payable to common and preferred shareholders

 

14,633,471

 

Unrealized depreciation of forward foreign currency contracts

 

5,488,990

 

Premium for swaps sold

 

4,961,442

 

Payable for terminated swaps

 

4,902,529

 

Investment management fees payable

 

1,311,597

 

Options written, at value (premiums received—$242,140)

 

220,635

 

Accrued expenses

 

356,912

 

Total Liabilities

 

526,916,825

 

Preferred shares ($25,000 net asset and liquidation value per share applicable
to an aggregate of 36,000 shares issued and outstanding)

 

900,000,000

 

Net Assets Applicable to Common Shareholders

 

$1,319,725,728

 

 

 

 

 

Composition of Net Assets Applicable to Common Shareholders:

 

 

 

Common Stock:

 

 

 

Par value ($0.00001 per share, applicable to 117,007,308 shares issued and outstanding)

 

$1,170

 

Paid-in-capital in excess of par

 

1,663,749,872

 

Dividends in excess of net investment income

 

(7,940,667

)

Accumulated net realized loss

 

(132,696,454

)

Net unrealized depreciation of investments, futures contracts, options written, swaps and
foreign currency transactions

 

(203,388,193

)

Net Assets Applicable to Common Shareholders

 

$1,319,725,728

 

Net Asset Value Per Common Share

 

$11.28

 

 

12 PIMCO High Income Fund Annual Report | 3.31.08 | See accompanying Notes to Financial Statements.


 

PIMCO High Income Fund Statement of Operations

For the Year ended March 31, 2008

 

 

 

 

 

 

 

 

Investment Income:

 

 

 

Interest

 

$215,510,851

 

Facility and other fee income

 

4,916,584

 

Dividends

 

1,959,904

 

Total Investment Income

 

222,387,339

 

 

 

 

 

Expenses:

 

 

 

Investment management fees

 

17,405,905

 

Interest expense

 

3,355,825

 

Auction agent fees and commissions

 

2,263,418

 

Custodian and accounting agent fees

 

443,245

 

Shareholder communications

 

324,748

 

Trustees’ fees and expenses

 

165,472

 

Audit and tax services

 

91,800

 

New York Stock Exchange listing fees

 

89,856

 

Insurance expense

 

45,334

 

Legal fees

 

40,762

 

Transfer agent fees

 

34,260

 

Miscellaneous

 

33,228

 

Total expenses

 

24,293,853

 

Less: custody credits earned on cash balances

 

(118,767

)

Net expenses

 

24,175,086

 

 

 

 

 

Net Investment Income

 

198,212,253

 

 

 

 

 

Realized and Change in Unrealized Gain (Loss):

 

 

 

Net realized gain (loss) on:

 

 

 

Investments

 

(6,942,967

)

Futures contracts

 

(957,984

)

Options written

 

252,000

 

Swaps

 

36,899,574

 

Foreign currency transactions

 

(7,728,840

)

Net change in unrealized appreciation/depreciation of:

 

 

 

Investments

 

(265,233,113

)

Futures contracts

 

13,183,512

 

Options written

 

21,505

 

Swaps

 

(76,968,453

)

Foreign currency transactions

 

274,313

 

Net realized and change in unrealized loss on investments, futures contracts, options written,
swaps and foreign currency transactions

 

(307,200,453

)

Net Decrease in Net Assets Resulting from Investment Operations

 

(108,988,200

)

 

 

 

 

Dividends and Distributions on Preferred Shares from:

 

 

 

Net investment income

 

(41,838,277

)

Net realized gains

 

(4,379,378

)

Total dividends and distributions on preferred shares

 

(46,217,655

)

Net Decrease in Net Assets Applicable to Common Shareholders
Resulting from Investment Operations

 

$(155,205,855

)

 

See accompanying Notes to Financial Statements. | 3.31.08 | PIMCO High Income Fund Annual Report 13


 

PIMCO High Income Fund Statement of Changes in Net Assets
Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

Year ended
March 31, 2008

 

 

Year ended
March 31, 2007

 

Investment Operations:

 

 

 

 

 

 

Net investment income

 

$198,212,253

 

 

$193,219,352

 

Net realized gain on investments, futures contracts, options written,
swaps and foreign currency transactions

 

21,521,783

 

 

17,630,470

 

Net change in unrealized appreciation/depreciation of investments,
futures contracts, options written, swaps and foreign currency
transactions

 

(328,722,236

)

 

59,953,003

 

Net increase (decrease) in net assets resulting from investment operations

 

(108,988,200

)

 

270,802,825

 

 

 

 

 

 

 

 

Dividends and Distributions on Preferred Shares from:

 

 

 

 

 

 

Net investment income

 

(41,838,277

)

 

(41,072,292

)

Net realized gains

 

(4,379,378

)

 

(3,925,740

)

Total dividends and distributions to preferred shareholders

 

(46,217,655

)

 

(44,998,032

)

Net increase (decrease) in net assets applicable to common
shareholders resulting from investment operations

 

(155,205,855

)

 

225,804,793

 

 

 

 

 

 

 

 

Dividends and Distributions to Common Shareholders from:

 

 

 

 

 

 

Net investment income

 

(169,914,803

)

 

(168,270,342

)

Net realized gains

 

(129,803,096

)

 

(37,751,236

)

Total dividends and distributions to common shareholders

 

(299,717,899

)

 

(206,021,578

)

 

 

 

 

 

 

 

Capital Share Transactions:

 

 

 

 

 

 

Reinvestment of dividends and distributions

 

18,376,680

 

 

16,386,960

 

Total increase (decrease) in net assets applicable to common shareholders

 

(436,547,074

)

 

36,170,175

 

 

 

 

 

 

 

 

Net Assets Applicable to Common Shareholders:

 

 

 

 

 

 

Beginning of year