Edgar Filing: CREDIT SUISSE ASSET MANAGEMENT INCOME FUND INC

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)

Hal Liebes, 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 31, 2003

Date of reporting period: January 1, 2003 to December 31, 2003

ITEM 1. REPORTS TO STOCKHOLDERS.

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

ANNUAL REPORT
DECEMBER 31, 2003

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.
ANNUAL REPORT - DECEMBER 31, 2003

Dear Shareholders: January 26, 2004

We are writing to report on Credit Suisse Asset Management Income Fund, Inc.
("the Fund") for the fiscal year ended December 31, 2003 and to discuss our
investment strategy.

At December 31, 2003, the Fund's net asset value ("NAV") was $4.41,
compared to an NAV of $3.91 at December 31, 2002. The Fund's total return for
the period (based on NAV and assuming reinvestment of dividends of $0.45 per
share) was 24.6%.

At December 31, 2003, $175.6 million of the Fund's assets was invested in
high yield debt securities; $29.5 million in emerging-market debt securities;
$4.4 million in investment-grade debt securities; $3.2 million in equity
securities; and the balance of $2.8 million in cash equivalents. Of the debt
securities, the largest concentration (66.7%) was invested in issues rated B
through BBB.

THE MARKET: 2003 WAS A BUOYANT YEAR

2003 was a truly buoyant year for the U.S. high yield and emerging debt markets.
Each continued to rally after starting to do so in 2002 and, in the process,
significantly outperformed investment-grade securities. As measured by the
Citigroup High-Yield Market Index (CHYMI)*, the broad U.S. high yield market
rose 30.6%. Aggregate emerging debt markets (as measured by J.P. Morgan's
Emerging Markets Bond Index Global**) gained 25.7%.

HIGH YIELD. Several factors were most directly responsible for the jump in
high yield prices, in our view.

- The interest-rate environment was supportive. Nominal short-term
interest rates started 2003 at 1.25% and were cut to 1.00% (the lowest
such level since 1958) in June. Not only did this provide a desirable
backdrop for fixed income instruments as a whole, but it also
compelled yield-hungry investors to withdraw significant assets from
low-yielding money market funds and place substantial sums into high
yield mutual funds, which acted aggressively to put the cash to work.
The Federal Reserve additionally helped with frequent public
statements reiterating its belief that an accommodative monetary
stance was both appropriate and sustainable.

- The U.S. economic recovery strengthened and gained momentum as the
year progressed. This worked in high yield's favor, as perceptions
about high yield issuers' ability to generate the revenues and cash
flow needed to service their debt--and, therefore, perceptions about
their creditworthiness and debt valuations--improved accordingly.

- The balance of supply and demand was favorable. Although new issuance
(I.E., supply) nearly reached an all-time annual record, demand also
surged as many investors sought out higher-yielding instruments and
became more comfortable with comparatively risky financial assets.

- The bonds of "fallen angels" (I.E., investment-grade companies whose
debt had been downgraded to high yield status), which had been savaged
during much of 2002, enjoyed vigorous buying as investors appeared to
conclude that their battered valuations had become unreasonably low.

EMERGING MARKETS. To a meaningful extent, emerging market debt (EMD)
benefited from influences--I.E., attraction to higher-yielding instruments, as
well as healthy inflows into mutual funds--similar to those that boosted high
yield. As we see it, inflows into dedicated EMD funds reflected a combination of
excitement about the asset class's robust performance, yields that remained
compellingly high, and valuations in certain countries that were considered
especially attractive.

Among the leading individual country markets, Brazil dominated headlines
and returns. Brazilian debt prices enjoyed active buying based on a variety of
encouraging developments that included a series of aggressive interest-rate cuts
by the nation's central bank, the passage of key legislative initiatives that
were considered auspicious for sovereign creditworthiness, and speculation that
the credit ratings of Brazilian government debt might be upgraded.

PERFORMANCE: SOLIDLY POSITIVE, BUT DAMPENED BY POSITIONING IN HIGH YIELD AND EMD

The Fund's solidly positive return in 2003 was mainly due to our security
selection and/or industry exposure in the high yield portion of the portfolio.
High yield industries in which we fared best included financial companies, cable
television, wireless telecommunications and competitive local-exchange telecom
providers.

Relative to broad indices like CHYMI, however, performance was dampened by
our decision to maintain below-market allocations to several sectors whose
fundamentals had significantly weakened in 2002 and, we felt, remained
questionable. These notably included utilities, energy trading companies and
diversified telecom. Unfortunately for the Fund, momentum-fuelled buying pushed
bond prices in these beaten-down sectors higher, a pattern that was exacerbated
by the persistent strength of cash inflows into high yield funds.

The most negative contributor to our EMD performance was our below-market
weighting in Brazil, whose securities excelled. Our low degree of confidence in
the Brazilian government's ability to overcome the nation's huge economic and
financial difficulties was not widely shared. We achieved better results with
our above-market weightings in Russia and Ukraine, as well as our opportunistic
positioning in the securities of Venezuela, Ecuador and South Africa.

OUTLOOK: STILL UPBEAT ON HIGH YIELD, MORE OPTIMISTIC

ABOUT EMD

HIGH YIELD. While we do not expect the high yield market to soar in 2004
like it did in 2003, our outlook is still upbeat. We believe that economic
activity will most likely continue to advance, which should prove to be an
important driver of further gains in high yield creditworthiness. The
persistence of interest rates at historically low levels, in our view, should
keep buyers drawn to higher-yielding assets, and also keep companies eager to
issue new or refinanced paper at attractive yields.

Going forward, we anticipate that the high yield market will resemble the
1992-96 period, which was characterized by relatively stable yield spreads and
the outperformance of single-B issues. We correspondingly believe that CCC
issues, whose yield spreads narrowed dramatically in 2003, are vulnerable to
underperformance versus single-Bs in 2004.

Our sector allocations are unchanged. Relative to broad high yield indices
like CHYMI, we continue to overweight gaming, energy, food/beverage/bottling,
health care, wireless telecom and selected industrials. We are underweighting
utilities, energy traders and diversified telecom providers, and avoiding
airlines and financial names.

We are selectively adding exposure to utilities, although our overall
allocation remains underweight. Our analysis concludes that several utilities
have successfully resolved capital-structure issues that had formerly hurt their
respective credit profiles, but such improvement does not yet seem to be
adequately reflected in their debt valuations.

EMERGING MARKETS. Our view on the near-term prospects for emerging market
debt has become more optimistic. We expect cash inflows to stay strong, which
could help to provide an ongoing source of buying power. An additional aspect of
the inflows that we find especially encouraging is that they are coming from
large institutional investors that are committing meaningful funds to the asset
class on a long-term basis. As for valuations (which we had considered
unreasonably high in the closing months of 2003), we now feel that they are
somewhat less overstated and are better supported by underlying fundamentals
than previously.

Compared to broad EMD indices, our largest country overweights are in
Russia and Ukraine. Our largest country underweights are in Brazil and Turkey.
Regional allocations include a slightly overweight stance in Latin America, a
benchmark-neutral position in Eastern/Central Europe, and a slight underweight
in Asia.

We appreciate your investment in the Fund and would be pleased to respond
to your questions or comments. Any questions regarding net asset value,
performance, dividends, portfolio management or allocations should be directed
to Credit Suisse Asset Management, LLC at (800) 293-1232. All other inquiries
regarding account information, requests for the latest financial information or
other reports should be directed to the Fund's Shareholder Servicing Agent at
(800) 730-6001.

Sincerely yours,

/s/ Richard J. Lindquist

Richard J. Lindquist
PRESIDENT AND CHIEF INVESTMENT OFFICER ***

/s/ Joseph D. Gallagher

Joseph D. Gallagher
DIRECTOR AND CHAIRMAN OF THE BOARD ****

HIGH YIELD BONDS ARE LOWER-QUALITY INSTRUMENTS 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.

The information presented is for informational purposes only. This report
is not a recommendation to buy or sell or a solicitation of an offer to buy or
sell any securities or adopt any investment strategy. Readers are advised not to
infer or assume that any securities, companies, sectors or markets described
will be profitable. All opinions and views constitute judgments as of the date
of writing, and are subject to change at any time without notice.

*The Citigroup High-Yield Market Index is a broad-based, unmanaged index
of high yield securities that is compiled by Citigroup Global Markets Inc. Its
name was changed from the Salomon Smith Barney High-Yield Market Index effective
April 7, 2003. Investors cannot invest directly in an index.

**The J.P. Morgan Emerging Markets Bond Index Global is a comprehensive
index of emerging market debt securities. Launched in August 1999, it tracks the
total returns of U.S. dollar-denominated debt instruments for 27 emerging market
countries. Investors cannot invest directly in an index.

***Richard J. Lindquist, who is a Managing Director of Credit Suisse Asset
Management, LLC ("CSAM"), is primarily responsible for management of the Fund's
assets. He has served in such capacity since November 21, 1996. Prior to that
date, he served as Vice President to the Fund, a position he assumed on August
15, 1989. Mr. Lindquist joined CSAM on May 1, 1995 as a result of CSAM's
acquisition of CS First Boston Investment Management Corporation ("CSFBIM").
Prior to joining CSAM and beginning in July, 1989, he held various offices at
CSFBIM. Mr. Lindquist also is President and Chief Investment Officer of Credit
Suisse High Yield Bond Fund (NYSE: DHY).

****Joseph D. Gallagher, Managing Director, is Chief Executive Officer of
CSAM Americas and the firm's global Chief Operating Officer. He has served as
the Fund's Chief Executive Officer since March 1, 2003. Prior to assuming his
current role at CSAM in 2003, he was the Firm's global CFO and Chief Executive
Officer, Europe. Mr. Gallagher joined Credit Suisse Group in 1985 as an
investment banker with Credit Suisse First Boston, where he worked for 14 years
in New York, Singapore and Hong Kong in financial services and mergers and
acquisitions. He is also Director and/or Chairman of other investment companies
advised by CSAM.

TOP TEN HOLDINGS (UNAUDITED)
(as a % of net assets as of 12/31/03)

1. Russian Federation Series REGS,
Unsubordinated 5.00%, 3/31/30 1.5%
2. Westfed Holdings
Sr. Debentures 15.50%, 9/15/99 1.5%
3. Ministry Finance of Russia Series V,
Debentures 3.00%, 5/14/08 1.4%
4. Pemex Project Funding Master Trust
Series REGS, Gtd. 7.75%, 8/2/07 1.1%
5. Federal Republic of Brazil Series 30yr,
Collateralized 2.125%, 4/15/24 1.0%
6. Hard Rock Hotel, Inc.
Notes 8.875%, 6/1/13 0.9%
7. Republic of South Africa
Global Notes 9.125%, 5/19/09 0.9%
8. Ukraine Government Series REGS,
Bonds 7.65%, 6/11/13 0.8%
9. Federal Republic of Brazil
Bonds 9.625%, 7/15/05 0.7%
10. Republic of Venezuela Series REGS,
Notes 10.75%, 9/19/13 0.7%

CREDIT QUALITY BREAKDOWN (UNAUDITED)
(as a % of total investments as of 12/31/03)

BBB/Baa 6.5%
BB/Ba 12.7
B/B 47.5
CCC/Caa 17.6
CC/Ca 3.8
C/C 0.3
NR 8.8
------
Subtotal 97.2
Time Deposit 1.3
Equities and Other 1.5
------
Total 100.0%
======

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2003

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

DOMESTIC SECURITIES (83.3%)
CORPORATE OBLIGATIONS (81.9%)
AEROSPACE (0.3%)
BE Aerospace, Inc.
Series B, Sr. Sub. Notes
8.00%, 3/1/08 Caa3 $ 100 $ 94,250
(1) Condor Systems, Inc.
Series B, Gtd.
11.875%, 5/1/09 N/R 900 225,000
Sequa Corp.
Sr. Notes
9.00%, 8/1/09 B1 250 276,875
---------------
GROUP TOTAL 596,125
---------------

AIRLINES (0.3%)
American Airlines, Inc.
Series 01-2,
Pass thru Certs
7.80%, 10/1/06 B1 550 497,459
Continental Airlines, Inc.
Series 991C,
Pass thru Certs
6.954%, 8/2/09 B2 206 179,221
---------------
GROUP TOTAL 676,680
---------------

AUTOMOBILE MANUFACTURING/VEHICLE PARTS (2.0%)
(1) Aetna Industries, Inc.
Sr. Notes
11.875%, 10/1/06 N/R 1 30
Cambridge Industries, Inc.
Sr. Sub. Notes
10.25%, 7/15/07 N/R 775 7,746
Collins & Aikman
Products Corp.
Gtd.
11.50%, 4/15/06 B3 1,250 1,156,250
Delco Remy
International, Inc.
Gtd.
10.625%, 8/1/06 B3 950 959,500
Holley Performance
Products, Inc.
Series B, Gtd.
12.25%, 9/15/07 Caa3 365 208,506
Metaldyne Corp.
Gtd.
11.00%, 6/15/12 Caa1 800 740,000
Motor Coach Industries
International, Inc.
Gtd.
11.25%, 5/1/09 Ca 1,121 320,743
Stanadyne Automotive
Series B, Gtd.
10.25%, 12/15/07 Caa1 700 689,500
Tenneco Automotive, Inc.:
(2) Secured
10.25%, 7/15/13 B2 100 114,250
Series B, Secured
10.25%, 7/15/13 B2 250 285,625
---------------
GROUP TOTAL 4,482,150
---------------

BANKING (0.2%)
Sovereign Bancorp, Inc.
Sr. Notes
10.50%, 11/15/06 Ba1 $ 365 $ 431,975

BROADBAND (1.2%)
Call-Net Enterprises, Inc.
Yankee Gtd.
10.625%, 12/31/08 Caa3 400 400,500
Level 3
Communications, Inc.:
Sr. Discount Notes
10.50%, 12/1/08 Caa2 650 615,875
Sr. Notes
9.125%, 5/1/08 Caa2 500 457,500
(2) Level 3 Financing, Inc.
Sr. Notes
10.75%, 10/15/11 Caa2 250 265,625
Primus Telecommunications
Group, Inc.:
Series B, Sr. Notes
9.875%, 5/15/08 Caa3 500 520,000
Sr. Notes
11.25%, 1/15/09 Caa3 250 266,250
---------------
GROUP TOTAL 2,525,750
---------------

BROADCAST/OUTDOOR (1.4%)
Alliance Atlantis
Communications, Inc.
Yankee Sr. Sub. Notes
13.00%, 12/15/09 B1 500 572,500
Corus Entertainment, Inc.
Global Sr. Sub. Notes
8.75%, 3/1/12 B1 150 165,750
Interep National Radio
Sales, Inc.
Series B, Gtd.
10.00%, 7/1/08 Caa2 250 222,500
(3) Paxson Communications
Corp.
Gtd.
0.00%, 1/15/09 Caa1 600 529,500
Sinclair Broadcast
Group, Inc.
Gtd.
8.75%, 12/15/11 B2 450 501,750
Susquehanna Media Co.
Sr. Sub. Notes
8.50%, 5/15/09 B1 150 158,250
Young Broadcasting, Inc.
Series B, Gtd
8.75%, 6/15/07 N/R 824 848,720
---------------
GROUP TOTAL 2,998,970
---------------

BUILDING PRODUCTS (1.4%)
Atrium Companies, Inc.
Series B, Gtd.
10.50%, 5/1/09 B3 500 537,500

The accompanying notes are an integral part of the financial statements.

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

Building Materials Corp.:
Series B, Sr. Notes
7.75%, 7/15/05 B2 $ 250 $ 256,875
8.625%, 12/15/06 B2 900 920,250
Dayton Superior Corp.:
Gtd.
13.00%, 6/15/09 Caa2 990 866,250
(2) Secured
10.75%, 9/15/08 B3 250 257,500
Texas Industries, Inc.
Sr. Notes
10.25%, 6/15/11 B1 250 283,750
---------------
GROUP TOTAL 3,122,125
---------------

CABLE (6.7%)
(1) Adelphia
Communications Corp.
Series B, Sr. Notes
8.375%, 2/1/08 N/R 800 750,000
(1) Australis Holdings Pty. Ltd.
Yankee Sr. Secured
Discount Notes
15.00%, 11/1/02 N/R 4,600 115,000
CSC Holdings, Inc.:
Series B, Debentures
8.125%, 8/15/09 B1 150 162,000
Series B, Sr. Notes
7.625%, 4/1/11 B1 200 211,500
Sr. Sub. Debentures
9.875%, 2/15/13 B2 1,050 1,102,500
Century Communications
Corp.:
(3) Series B, Sr. Discount
Notes
0.00%, 1/15/08 N/R 500 307,500
(3) Sr. Discount Notes
0.00%, 3/15/03 N/R 500 445,000
Sr. Notes
8.75%, 10/1/07 N/R 450 438,750
Charter Communications
Holdings LLC:
(3) Sr. Discount Notes
0.00%, 4/1/11 Ca 1,200 1,032,000
Sr. Notes
8.625%, 4/1/09 Ca 750 658,125
(2) 8.75%, 11/15/13 B3 250 255,625
10.25%, 1/15/10 Ca 1,050 945,000
Comcast UK Cable
Partners Ltd.
Yankee Debentures
11.20%, 11/15/07 Caa2 500 507,500
(1) DIVA Systems Corp.
Series B, Sr. Discount
Notes
12.625%, 3/1/08 N/R 3,778 245,570
(1) Frontiervision Holdings LP
Series B, Sr. Discount
Notes
11.875%, 9/15/07 N/R 500 532,500
(3) Insight Communications
Co., Inc.
Sr. Discount Notes
0.00%, 2/15/11 Caa2 250 215,000
Insight Midwest/Insight
Capital:
Sr. Notes
9.75%, 10/1/09 B2 $ 900 $ 956,250
10.50%, 11/1/10 B2 500 546,250
Jones Intercable, Inc.
Sr. Notes
7.625%, 4/15/08 Baa3 450 516,429
Mediacom LLC/Capital
Corp.:
Series B, Sr. Notes
8.50%, 4/15/08 B2 371 380,275
Sr. Notes
7.875%, 2/15/11 B2 850 854,250
Northland Cable
Television, Inc.
Gtd.
10.25%, 11/15/07 Caa3 750 750,937
(1) Olympus Communications,
L.P./Olympus Capital
Corp.
Series B, Sr. Notes
10.625%, 11/15/06 N/R 1,042 1,112,335
Renaissance Media Group
LLC
Gtd.
10.00%, 4/15/08 B3 953 989,929
Rogers Cablesystems, Inc.
Series B, Yankee Sr. Notes
10.00%, 3/15/05 Ba2 250 269,375
(2)(3) Telenet Group Holding NV
Sr. Notes
0.00%, 6/15/14 Caa2 600 381,000
---------------
GROUP TOTAL 14,680,600
---------------

CAPITAL GOODS (1.3%)
(2) Case New Holland, Inc.
Sr. Notes
9.25%, 8/1/11 Ba3 350 393,750
Jordan Industries, Inc.
Series B, Sr. Notes
10.375%, 8/1/07 Caa3 1,122 600,270
Motors & Gears, Inc.
Series D, Sr. Notes
10.75%, 11/15/06 Caa1 1,150 983,250
Park-Ohio Industries, Inc.
Sr. Sub. Notes
9.25%, 12/1/07 Caa1 500 500,000
SPX Corp.
Sr. Notes
6.25%, 6/15/11 Ba3 350 361,375
---------------
GROUP TOTAL 2,838,645
---------------

CHEMICALS (3.4%)
Acetex Corp.
Global Sr. Notes
10.875%, 8/1/09 B2 400 446,000
Applied Extrusion
Technologies, Inc.
Series B, Gtd.
10.75%, 7/1/11 Caa1 300 250,500

The accompanying notes are an integral part of the financial statements.

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

Avecia Group plc
Global Gtd.
11.00%, 7/1/09 Caa3 $ 700 $ 633,500
Equistar Chemicals L.P./
Equistar
Funding Corp.
Sr. Notes
10.625%, 5/1/11 B2 350 388,500
(2)(3) HMP Equity Holdings
Corp.
Units
0.00%, 5/15/08 N/R 250 153,750
(3) Huntsman International
Holdings LLC
Sr. Discount Notes
0.00%, 12/31/09 Caa2 250 121,875
(2) Huntsman LLC
Gtd.
11.625%, 10/15/10 B2 500 512,500
(2) IMC Global, Inc.
Sr. Notes
10.875%, 8/1/13 B1 400 440,000
ISP Chemco, Inc.
Series B, Gtd.
10.25%, 7/1/11 B2 250 282,500
Lyondell Chemical Co.:
Gtd.
10.50%, 6/1/13 B1 850 930,750
Series B, Secured Notes
9.875%, 5/1/07 B1 750 795,000
Millennium America, Inc.
Gtd.
9.25%, 6/15/08 B1 500 547,500
(2) Nalco Co.
Sr. Sub. Notes
8.875%, 11/15/13 Caa1 400 426,000
Polyone Corp.
Gtd.
10.625%, 5/15/10 B3 400 402,000
Radnor Holdings Corp.
Sr. Notes
11.00%, 3/15/10 B2 250 229,375
Resolution Performance
Products LLC
Sr. Sub. Notes
13.50%, 11/15/10 Caa2 500 437,500
Terra Capital, Inc.
Secured
11.50%, 6/1/10 Caa1 550 577,500
---------------
GROUP TOTAL 7,574,750
---------------

COMPETITIVE LOCAL EXCHANGE CARRIER (1.7%)
Madison River Capital/
Madison River Finance
Sr. Notes
13.25%, 3/1/10 Caa2 871 959,726
(2) Millicom International
Cellular SA
Convertible Bond
2.00%, 6/1/06 N/R 93 605,895
Qwest Corp.
Notes
6.625%, 9/15/05 Ba3 500 521,250
RCN Corp.:
Series B, Sr. Discount
Notes
9.80%, 2/15/08 Ca $ 736 $ 349,600
Sr. Notes
10.00%, 10/15/07 Ca 400 196,000
10.125%, 1/15/10 Ca 250 116,250
Time Warner Telecom, LLC
Sr. Notes
9.75%, 7/15/08 B3 850 879,750
---------------
GROUP TOTAL 3,628,471
---------------

CONSUMER PRODUCTS/TOBACCO (4.0%)
Buhrmann U.S., Inc.
Gtd.
12.25%, 11/1/09 B2 500 562,500
(2) DIMON, Inc.
Sr. Notes
7.75%, 6/1/13 Ba3 500 517,500
(1) Diamond Brands
Operating Corp.
Gtd.
10.125%, 4/15/08 N/R 2,000 20,000
General Binding Corp.
Gtd.
Sr. Sub. Notes
9.375%, 6/1/08 Caa1 700 710,500
Hockey Co./
Sport Maska, Inc.
Global Units
11.25%, 4/15/09 B2 300 343,875
Holmes Group, Inc.
Series B, Gtd.
Sr. Sub. Notes
9.875%, 11/15/07 Caa1 1,000 1,037,500
(2)(3) Johnsondiversey Holdings,
Inc.
Discount Notes
0.00%, 5/15/13 B3 600 462,000
Jostens, Inc.
Sr. Sub. Notes
12.75%, 5/1/10 B3 900 1,027,125
PCA LLC/PCA Finance
Corp.
Sr. Notes
11.875%, 8/1/09 B3 650 715,000
Playtex Products, Inc.
Gtd.
9.375%, 6/1/11 Caa1 500 507,500
Rayovac Corp.
Sr. Sub. Notes
8.50%, 10/1/13 B3 250 266,250
Remington Arms Co., Inc.
Gtd.
10.50%, 2/1/11 B2 115 123,050
Revlon Consumer
Products Corp.
Gtd.
12.00%, 12/1/05 Caa1 775 778,875
Samsonite Corp.
Sr. Sub. Notes
10.75%, 6/15/08 Caa1 400 416,000

The accompanying notes are an integral part of the financial statements.

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

Sealy Mattress Co.
Series B, Sr. Sub. Notes
9.875%, 12/15/07 B3 $ 500 $ 520,000
United Industries Corp.
Series D, Gtd.
9.875%, 4/1/09 B3 400 421,000
Werner Holdings Co., Inc.
Series A, Gtd.
10.00%, 11/15/07 B3 800 468,000
---------------
GROUP TOTAL 8,896,675
---------------

CONTAINERS (2.3%)
AEP Industries, Inc.
Sr. Sub. Notes
9.875%, 11/15/07 B3 650 656,500
Berry Plastics Corp.
Gtd.
10.75%, 7/15/12 B3 600 693,750
Crown Cork & Seal
Finance plc
Yankee Gtd.
7.00%, 12/15/06 B3 300 308,250
Crown Euro Holdings SA
Secured
9.50%, 3/1/11 B1 895 1,018,062
(2) Graphic Packaging
International Corp.
Sr. Sub. Notes
9.50%, 8/15/13 B3 250 277,500
Owens-Illinois, Inc.
Sr. Notes
8.10%, 5/15/07 B3 950 1,005,812
Pliant Corp.
Gtd.
13.00%, 6/1/10 Caa1 900 828,000
(2) U.S. Can Corp.
Secured
10.875%, 7/15/10 B3 250 262,812
---------------
GROUP TOTAL 5,050,686
---------------

ENERGY/OTHER (3.0%)
Dynegy Holdings, Inc.:
(2) Secured
10.125%, 7/15/13 B3 350 404,250
Sr. Notes
8.75%, 2/15/12 Caa2 600 608,250
El Paso CGP Co.:
Notes
6.375%, 2/1/09 Caa1 250 224,375
7.75%, 6/15/10 Caa1 250 237,187
El Paso Corp.
Sr. Notes
7.00%, 5/15/11 Caa1 500 463,750
El Paso Natural Gas
Series A, Sr. Notes
7.625%, 8/1/10 B1 250 258,125
(2) El Paso Production
Holding Co.
Gtd.
7.75%, 6/1/13 B2 750 742,500
Frontier Oil Corp.
Sr. Notes
11.75%, 11/15/09 B2 1,000 1,135,000
(2) Gemstone Investors Ltd.
Gtd.
7.71%, 10/31/04 Caa1 $ 450 $ 456,750
Giant Industries, Inc.
Gtd.
11.00%, 5/15/12 B3 250 271,250
Gulfterra Energy Partner
Gtd.
10.625%, 12/1/12 B1 100 124,500
(2) Reliant Resources, Inc.
Secured
9.50%, 7/15/13 B1 500 537,500
Trico Marine Services, Inc.
Gtd.
8.875%, 5/15/12 Caa1 500 367,500
Williams Cos., Inc.
Notes
6.50%, 8/1/06 B3 750 780,000
---------------
GROUP TOTAL 6,610,937
---------------

ENVIRONMENTAL SERVICES (0.2%)
Allied Waste North
America, Inc.
Series B, Gtd.
7.875%, 1/1/09 Ba3 490 513,275

FINANCE (1.5%)
Westfed Holdings:
Sr. Debentures
(1) 15.50%, 9/15/99 N/R 2,000 3,200,000
(4) 25.00%, 8/22/09 N/R 80 80,000
---------------
GROUP TOTAL 3,280,000
---------------

FOOD PROCESSORS/BEVERAGE/BOTTLING (2.4%)
(1) Archibald Candy Corp.
Gtd.
10.00%, 11/1/07 N/R 455 175,274
(1) Aurora Foods, Inc.
Series B, Sr. Sub. Notes
9.875%, 2/15/07 N/R 1,250 993,750
B&G Foods, Inc.
Series D, Gtd.
9.625%, 8/1/07 B3 700 725,375
Birds Eye Foods, Inc.
Gtd.
11.875%, 11/1/08 B3 124 132,370
Eagle Family Foods
Series B, Gtd.
8.75%, 1/15/08 Caa2 471 345,817
Land O'Lakes, Inc.
Sr. Notes
8.75%, 11/15/11 B3 800 704,000
(2) Le-Natures, Inc.
Sr. Sub. Notes
9.00%, 6/15/13 B3 200 212,000
National Wine & Spirits,
Inc.
Gtd.
10.125%, 1/15/09 B3 220 199,100
Premier International
Foods plc
Yankee Sr. Notes
12.00%, 9/1/09 B3 1,100 1,210,000

The accompanying notes are an integral part of the financial statements.

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

Swift & Co.:
Gtd.
10.125%, 10/1/09 B1 $ 250 $ 266,250
(2) Sr. Sub. Notes
12.50%, 1/1/10 B2 300 322,500
---------------
GROUP TOTAL 5,286,436
---------------

GAMING (7.9%)
Ameristar Casinos, Inc.
Gtd.
10.75%, 2/15/09 B2 970 1,120,350
Argosy Gaming Co.:
Gtd.
10.75%, 6/1/09 B2 250 271,250
Sr. Sub. Notes
9.00%, 9/1/11 B2 250 278,125
Aztar Corp.
Sr. Sub. Notes
8.875%, 5/15/07 Ba3 750 786,562
Boyd Gaming Corp.
Gtd.
9.25%, 8/1/09 Ba3 600 673,500
(2) Chukchansi Economic
Development Authority
Sr. Notes
14.50%, 6/15/09 N/R 1,000 1,220,000
Circus & Eldorado/Silver
Legacy Capital Corp.
First Mortgage Notes
10.125%, 3/1/12 B1 500 521,250
Coast Hotels &
Casinos, Inc.
Gtd.
9.50%, 4/1/09 B2 700 743,750
(2) Hard Rock Hotel, Inc.
Notes
8.875%, 6/1/13 B3 1,800 1,926,000
Horseshoe Gaming
Holdings Corp.
Series B, Gtd.
8.625%, 5/15/09 B2 1,000 1,061,250
Isle of Capri Casinos, Inc.
Gtd.
8.75%, 4/15/09 B2 650 685,750
MGM Mirage, Inc.
Gtd.
9.75%, 6/1/07 Ba2 100 114,500
(2) Majestic Star Casino LLC
Gtd.
9.50%, 10/15/10 B2 900 927,000
Mikohn Gaming Corp.
Series B, Gtd.
11.875%, 8/15/08 B3 800 812,000
Mohegan Tribal Gaming
Authority
Sr. Notes
8.125%, 1/1/06 Ba2 950 1,028,375
Old Evangeline Downs
LLC
Gtd.
13.00%, 3/1/10 N/R 500 540,000
Park Place Entertainment
Corp.:
Sr. Sub. Notes
7.875%, 12/15/05 Ba2 $ 250 $ 268,437
9.375%, 2/15/07 Ba2 500 567,500
Penn National Gaming, Inc.
Series B, Gtd.
11.125%, 3/1/08 B3 850 958,375
Riviera Holdings Corp.
Gtd.
11.00%, 6/15/10 B2 700 729,750
Six Flags, Inc.
Sr. Notes
9.75%, 6/15/07 B2 150 157,312
Venetian Casino
Resort LLC
Gtd.
11.00%, 6/15/10 B3 180 209,700
(2) Waterford Gaming LLC
Sr. Notes
8.625%, 9/15/12 B1 248 264,120
(1) Windsor Woodmont
Black Hawk
Series B, First Mortgage
Notes
13.00%, 3/15/05 N/R 1,450 953,375
Wynn Las Vegas LLC/
Wynn Las Vegas
Capital Corp.
Second Mortgage
12.00%, 11/1/10 B3 400 473,000
---------------
GROUP TOTAL 17,291,231
---------------

HEALTHCARE FACILITIES/SUPPLIES (2.3%)
(2) Ardent Health Services
Sr. Sub. Notes
10.00%, 8/15/13 B3 250 273,750
Beverly Enterprises, Inc.
Sr. Notes
9.625%, 4/15/09 B1 485 537,137
Concentra Operating Corp.
Gtd.
9.50%, 8/15/10 B3 250 271,250
Extendicare Health
Services, Inc.
Gtd.
9.35%, 12/15/07 B3 710 734,850
Fisher Scientific
International, Inc.
Sr. Sub. Notes
8.125%, 5/1/12 B2 260 280,150
Healthsouth Corp.
Notes
7.625%, 6/1/12 N/R 300 282,000
IASIS Healthcare Corp.
Gtd.
8.50%, 10/15/09 B3 250 261,875
(1) Magellan Health
Services, Inc.
Sr. Sub. Notes
9.00%, 2/15/08 N/R 500 372,500

The accompanying notes are an integral part of the financial statements.

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

Medquest, Inc.
Series B, Gtd.
11.875%, 8/15/12 B3 $ 600 $ 658,500
(2) Triad Hospitals, Inc.
Sr. Sub. Notes
7.00%, 11/15/13 B3 1,000 1,012,500
(2) Universal Hospital
Services, Inc.
Sr. Notes
10.125%, 11/1/11 B3 250 263,750
---------------
GROUP TOTAL 4,948,262
---------------

HOME BUILDERS (0.7%)
Tech Olympic USA, Inc.
Gtd.
9.00%, 7/1/10 Ba3 500 540,000
Toll Corp.
Sr. Sub. Notes
8.25%, 12/1/11 Ba2 250 277,187
WCI Communities, Inc.
Gtd.
10.625%, 2/15/11 Ba3 650 737,750
---------------
GROUP TOTAL 1,554,937
---------------

INDUSTRIAL (0.8%)
(2) Amsted Industries, Inc.
Sr. Notes
10.25%, 10/15/11 B3 250 277,500
Amtrol, Inc.
Sr. Sub. Notes
10.625%, 12/31/06 Caa3 600 414,000
GSI Group, Inc.
Gtd.
10.25%, 11/1/07 Caa1 518 365,484
International Utility
Structures, Inc.:
Sub. Notes
13.00%, 2/1/08 N/R 924 9,240
(1) Yankee Sr. Sub. Notes
10.75%, 2/1/08 N/R 800 188,000
Wolverine Tube, Inc.
Gtd.
10.50%, 4/1/09 B3 550 563,750
---------------
GROUP TOTAL 1,817,974
---------------

LEISURE (2.7%)
AMC Entertainment, Inc.:
Sr. Sub. Notes
9.50%, 3/15/09 Caa1 250 258,750
9.875%, 2/1/12 Caa1 800 894,000
Bluegreen Corp.
Series B, Gtd.
10.50%, 4/1/08 B3 1,000 1,020,000
Booth Creek Ski
Holdings, Inc.
Series B, Gtd.
12.50%, 3/15/07 Caa1 1,147 1,152,735
Cinemark USA, Inc.
Sr. Sub. Notes
9.00%, 2/1/13 B3 250 282,500
Intrawest Corp.:
Gtd.
10.50%, 2/1/10 B1 $ 250 $ 277,500
(2) Sr. Notes
7.50%, 10/15/13 B1 250 261,250
Scientific Games Corp.
Series B, Gtd.
12.50%, 8/15/10 B2 691 820,562
Six Flags, Inc.:
Sr. Notes
9.75%, 4/15/13 B2 400 423,000
(2) 9.625%, 6/1/14 B2 500 525,000
---------------
GROUP TOTAL 5,915,297
---------------

LODGING (1.2%)
CapStar Hotel Co.
Sr. Sub. Notes
8.75%, 8/15/07 Caa1 250 254,375
Felcor Lodging LP
Gtd.
8.50%, 6/1/11 B1 425 463,250
HMH Properties, Inc.
Series B, Gtd.
7.875%, 8/1/08 Ba3 500 522,500
Host Marriot LP
Series I, Gtd.
9.50%, 1/15/07 Ba3 600 670,500
(2) Inn of the Mountain Gods
Sr. Notes
12.00%, 11/15/10 Caa1 400 427,000
John Q. Hammons Hotel LP
Series B, First
Mortgage Notes
8.875%, 5/15/12 B2 300 332,250
---------------
GROUP TOTAL 2,669,875
---------------

METALS & MINING (0.7%)
AK Steel Corp.
Gtd.
7.875%, 2/15/09 B3 250 220,625
Earle M. Jorgensen Co.
Secured
9.75%, 6/1/12 B2 500 557,500
(2) Gerdau Ameristeel Corp.
Sr. Notes
10.375%, 7/15/11 B2 250 277,500
Metallurg, Inc.
Series B, Gtd.
11.00%, 12/1/07 Ca 571 322,332
(1)(2) Ormet Corp.
Gtd.
11.00%, 8/15/08 N/R 750 198,750
---------------
GROUP TOTAL 1,576,707
---------------

OIL EQUIPMENT (0.9%)
Key Energy Services, Inc.
Series B, Gtd. Sr. Sub. Notes
14.00%, 1/15/09 Ba3 1,024 1,103,360

The accompanying notes are an integral part of the financial statements.

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

Parker Drilling Co.
Series B, Gtd.
10.125%, 11/15/09 B2 $ 900 $ 958,500
---------------
GROUP TOTAL 2,061,860
---------------

PAPER & FOREST PRODUCTS (3.8%)
Ainsworth Lumber Co., Ltd.
Yankee Sr. Notes
12.50%, 7/15/07 B3 1,250 1,475,000
Appleton Papers, Inc.
Series B, Gtd.
12.50%, 12/15/08 B3 700 794,500
Caraustar Industries, Inc.
Gtd.
9.875%, 4/1/11 B2 400 434,000
(1) Doman Industries Ltd.
Yankee Gtd.
12.00%, 7/1/04 N/R 300 316,500
Fonda Group, Inc.
Series B, Sr. Sub. Notes
9.50%, 3/1/07 Caa2 1,000 997,500
Four M Corp.
Series B, Sr. Notes
12.00%, 6/1/06 B3 900 900,000
Georgia-Pacific Corp.
Gtd.
9.375%, 2/1/13 Ba2 1,000 1,155,000
JSG Funding plc
Global Sr. Notes
9.625%, 10/1/12 B2 500 562,500
Stone Container Corp.
Sr. Notes
8.375%, 7/1/12 B2 600 654,000
(2) Stone Container Finance Co.
Yankee Gtd. Sr. Notes
11.50%, 8/15/06 B2 780 822,900
Tembec Industries, Inc.
Yankee Gtd.
8.625%, 6/30/09 Ba3 250 258,750
---------------
GROUP TOTAL 8,370,650
---------------

PHARMACEUTICALS (0.1%)
(2) Quintiles Transnational
Corp.
Sr. Sub. Notes
10.00%, 10/1/13 B3 250 271,250

PUBLISHING (1.7%)
Dex Media East LLC:
Gtd.
12.125%, 11/15/12 B3 350 432,250
(2) Notes
8.00%, 11/15/13 Caa1 250 263,750
(2) Haights Cross
Operating Co.
Sr. Notes
11.75%, 8/15/11 Caa1 350 362,250
(2) Hollinger, Inc.
Secured
11.875%, 3/1/11 B3 500 545,625
Houghton Mifflin Co.:
(2)(3) Sr. Discount Notes
0.00%, 10/15/13 Caa1 $ 250 $ 159,375
Sr. Notes
8.25%, 2/1/11 B2 300 322,500
Liberty Group Publishing,
Inc.
Debentures
11.625%, 2/1/09 Caa2 900 905,625
(2) PRIMEDIA, Inc.
Sr. Notes
8.00%, 5/15/13 B3 400 410,000
(1) Premier Graphics, Inc.
Gtd.
11.50%, 12/1/05 N/R 2,000 0
(2) Sheridan Acquisition CRP
Secured
10.25%, 8/15/11 B1 300 319,875
---------------
GROUP TOTAL 3,721,250
---------------

RESTAURANTS (2.1%)
American Restaurant
Group, Inc.
Series D, Gtd.
11.50%, 11/1/06 Caa2 1,143 577,215
Buffets, Inc.
Sr. Sub. Notes
11.25%, 7/15/10 B3 500 538,750
CKE Restaurants, Inc.
Gtd.
9.125%, 5/1/09 B3 350 360,500
Carrols Corp.
Gtd.
9.50%, 12/1/08 B3 150 153,000
Denny's Corp.
Sr. Notes
11.25%, 1/15/08 Ca 500 347,500
(2) El Pollo Loco, Inc.
Secured
9.25%, 12/15/09 B2 250 254,375
Friendly Ice Cream Corp.
Gtd.
10.50%, 12/1/07 B3 950 989,187
(2) Morton's Restaurant
Group, Inc.
Secured
7.50%, 7/1/10 B2 250 236,250
(2) O' Charley's, Inc.
Sr. Sub. Notes
9.00%, 11/1/13 Ba3 400 404,000
Romacorp, Inc.
Sr. Notes
10.50%, 12/31/08 Ca 1,102 722,072
Sbarro, Inc.
Gtd.
11.00%, 9/15/09 Caa2 125 99,375
---------------
GROUP TOTAL 4,682,224
---------------

RETAIL - FOOD & DRUG (1.1%)
Herbalife
International, Inc.
Gtd.
11.75%, 7/15/10 B3 500 585,000

The accompanying notes are an integral part of the financial statements.

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

Pantry, Inc.
Gtd. Sr. Sub. Notes
10.25%, 10/15/07 B3 $ 750 $ 780,000
Roundy's, Inc.
Series B, Gtd.
8.875%, 6/15/12 B2 200 214,500
Stater Brothers
Holdings, Inc.
Sr. Notes
10.75%, 8/15/06 B2 750 794,063
---------------
GROUP TOTAL 2,373,563
---------------

RETAIL STORES (1.6%)
Asbury Automotive
Group Co.
Gtd.
9.00%, 6/15/12 B3 250 265,625
Finlay Fine Jewelry Corp.
Gtd. Sr. Notes
8.375%, 5/1/08 B1 600 624,000
(1) Flooring America, Inc.
Series B, Gtd.
9.25%, 10/15/07 N/R 703 70
Michaels Stores, Inc.
Sr. Notes
9.25%, 7/1/09 Ba1 400 443,500
NBTY, Inc.
Series B, Sr. Sub. Notes
8.625%, 9/15/07 B1 400 412,000
PEP Boys-Manny
Moe & Jack
Notes
7.00%, 6/1/05 B2 800 820,000
PETCO Animal Supplies,
Inc.
Sr. Sub. Notes
10.75%, 11/1/11 B2 300 352,500
(2) Perry Ellis International,
Inc.
Sr. Sub. Notes
8.875%, 9/15/13 B3 250 264,375
United Auto Group, Inc.
Gtd.
9.625%, 3/15/12 B3 250 281,250
---------------
GROUP TOTAL 3,463,320
---------------

SATELLITE (1.2%)
Echostar DBS Corp.:
Sr. Notes
9.125%, 1/15/09 Ba3 195 219,131
9.375%, 2/1/09 Ba3 750 788,438
PanAmSat Corp.
Gtd.
8.50%, 2/1/12 Ba3 500 557,500
Pegasus Communications
Corp.
Series B, Sr. Notes
12.50%, 8/1/07 Ca 1,000 950,000
(3) Pegasus Satellite
Communications, Inc.
Sr. Discount Notes
0.00%, 3/1/07 C 250 212,813
---------------
GROUP TOTAL 2,727,882
---------------

SECONDARY OIL & GAS PRODUCERS (4.4%)
Chesapeake Energy Corp.
Gtd.
8.125%, 4/1/11 Ba3 $ 850 $ 947,750
Continental Resources, Inc.
Gtd. Sr. Sub. Notes
10.25%, 8/1/08 Caa1 925 934,250
Forest Oil Corp.
Sr. Notes
8.00%, 6/15/08 Ba3 900 985,500
Pemex Project Funding
Master Trust:
Gtd.
8.50%, 2/15/08 Baa1 45 51,525
Series REGS, Gtd.
7.75%, 8/2/07 Baa1 1,825 2,496,079
6.625%, 4/4/10 Baa1 1,065 1,390,824
Plains E&P Co.
Series B, Gtd.
8.75%, 7/1/12 B2 300 331,125
Pogo Producing Co.:
Series B, Sr. Sub. Notes
10.375%, 2/15/09 Ba3 250 266,250
8.25%, 4/15/11 Ba3 550 616,000
Vintage Petroleum, Inc.
Sr. Sub. Notes
7.875%, 5/15/11 B1 700 742,000
Wiser Oil Co.
Gtd.
Sr. Sub. Notes
9.50%, 5/15/07 Caa3 800 796,000
---------------
GROUP TOTAL 9,557,303
---------------

SERVICES (4.2%)
APCOA, Inc.
Gtd. Sr. Sub. Notes
9.25%, 3/15/08 Caa3 377 137,605
(2) Advanstar
Communications, Inc.
Secured
10.75%, 8/15/10 B3 400 435,000
(2) American Color Graphics
Notes
10.00%, 6/15/10 B3 800 824,000
Brand Services, Inc.
Gtd.
12.00%, 10/15/12 B3 600 696,750
Diamond Triumph Auto
Glass, Inc.
Gtd.
9.25%, 4/1/08 B3 500 452,500
IESI Corp.
Gtd.
10.25%, 6/15/12 B3 500 558,125
Integrated Electrical
Services, Inc.
Series C, Gtd.
9.375%, 2/1/09 B2 625 659,375
Iron Mountain, Inc.:
Gtd.
8.625%, 4/1/13 B2 500 542,500
7.75%, 1/15/15 B2 250 263,125
La Petite Academy, Inc.
Series B, Gtd.
10.00%, 5/15/08 Ca 1,300 786,500

The accompanying notes are an integral part of the financial statements.

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

Muzak LLC/Muzak
Finance Corp.:
Gtd.
9.875%, 3/15/09 Caa1 $ 650 $ 631,313
Sr. Notes
10.00%, 2/15/09 B3 300 321,000
(2) Rent-Way, Inc.
Secured
11.875%, 6/15/10 B3 500 560,000
Salton, Inc.
Sr. Sub. Notes
12.25%, 4/15/08 B3 750 802,500
United Rentals, Inc.
Series B, Gtd.
9.25%, 1/15/09 B2 600 633,000
(2) United Rentals NA, Inc.
Sr. Sub. Notes
7.75%, 11/15/13 B2 800 821,000
---------------
GROUP TOTAL 9,124,293
---------------

TECHNOLOGY (2.3%)
AMI Semiconductor, Inc.
Gtd.
10.75%, 2/1/13 B3 163 195,193
Amkor Technology, Inc.:
Global Sr. Notes
9.25%, 2/15/08 B1 350 399,000
Sr. Notes
7.75%, 5/15/13 B1 500 538,750
Ampex Corp.
Secured
12.00%, 8/15/08 N/R 1,658 248,774
Avaya, Inc.
Secured
11.125%, 4/1/09 B2 250 293,750
DigitalNet Holdings, Inc.
Sr. Notes
9.00%, 7/15/10 B2 162 176,175
Lucent Technologies, Inc.:
Notes
7.25%, 7/15/06 Caa1 340 346,800
5.50%, 11/15/08 Caa1 550 514,250
Nortel Network Corp.
Convertible
4.25%, 9/1/08 B3 250 237,813
Sanmina-SCI Corp.
Gtd.
10.375%, 1/15/10 Ba2 900 1,057,500
Unisys Corp.
Sr. Notes
7.875%, 4/1/08 Ba1 250 260,313
(2) Viasystems, Inc.
Sr. Sub. Notes
10.50%, 1/15/11 Caa2 200 214,500
Xerox Corp.
Sr. Notes
7.625%, 6/15/13 B1 550 596,750
---------------
GROUP TOTAL 5,079,568
---------------

TEXTILE/APPAREL/SHOE MANUFACTURING (1.1%)
(1) Advanced Glassfiber
Yarns LLC
Sr. Sub. Notes
9.875%, 1/15/09 N/R $ 150 $ 7,500
BGF Industries, Inc.
Series B, Sr. Sub. Notes
10.25%, 1/15/09 Ca 250 190,625
Levi Strauss & Co.:
Notes
7.00%, 11/1/06 Ca 515 333,463
Sr. Notes
12.25%, 12/15/12 Ca 735 481,425
Phillips-Van Heusen Corp.
Sr. Sub. Notes
9.50%, 5/1/08 B3 760 794,200
Tropical Sportswear
International Corp.
Series A, Gtd.
11.00%, 6/15/08 Caa1 700 570,500
---------------
GROUP TOTAL 2,377,713
---------------

TOWER (0.5%)
(2) American Towers, Inc.
Gtd.
7.25%, 12/1/11 B3 500 511,250
(2) Crown Castle International
Corp.
Sr. Notes
7.50%, 12/1/13 B3 400 404,000
(2)(3) SBA Telecomm/SBA Comm.
Sr. Discount Notes
0.00%, 12/15/11 N/R 300 213,000
---------------
GROUP TOTAL 1,128,250
---------------

TRANSPORTATION (0.7%)
Sea Containers Ltd.
Series B, Yankee Sr. Notes
10.75%, 10/15/06 B3 700 721,000
(2) Ship Finance
International Ltd.
Sr. Notes
8.50%, 12/15/13 B2 750 746,250
---------------
GROUP TOTAL 1,467,250
---------------

UTILITIES (2.7%)
AES Corp.:
Sr. Notes
8.00%, 12/31/08 B3 250 251,250
9.50%, 6/1/09 B3 48 53,460
Aquila, Inc.
Sr. Notes
7.625%, 11/15/09 Caa1 250 246,875
Calpine Canada Energy
Finance LLC
Gtd.
8.50%, 5/1/08 Caa1 317 254,393

The accompanying notes are an integral part of the financial statements.

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

Calpine Corp.:
(2) Secured
8.50%, 7/15/10 B2 $ 850 $ 833,000
Sr. Notes
7.75%, 4/15/09 Caa1 800 620,000
CMS Energy Corp.:
Sr. Notes
7.50%, 1/15/09 B3 700 724,500
(2) 7.75%, 8/1/10 B3 250 264,063
Cogentrix Energy, Inc.
Series B, Gtd.
8.75%, 10/15/08 B1 900 911,250
Edison Mission Energy
Sr. Notes
7.73%, 6/15/09 B2 400 383,000
Mirant Americas
Generation LLC
Sr. Notes
7.625%, 5/1/06 N/R 600 510,000
(1)(2) Mirant Corp.
Sr. Notes
7.40%, 7/15/04 N/R 300 195,000
Sierra Pacific Resources
Notes
8.75%, 5/15/05 B2 500 518,125
TNP Enterprises, Inc.
Series B, Sr. Sub. Notes
10.25%, 4/1/10 Ba3 250 273,750
---------------
GROUP TOTAL 6,038,666
---------------

WIRELESS (3.9%)
ACC Escrow Corp.
Sr. Notes
10.00%, 8/1/11 B2 300 336,000
(3) Alamosa Holdings, Inc.
Gtd.
0.00%, 2/15/10 N/R 800 640,000
Centennial Cellular
Operating Co./
Centennial
Communications Corp.
Gtd.
10.125%, 6/15/13 Caa1 400 441,000
Dobson Communications
Corp.
Sr. Notes
8.875%, 10/1/13 B3 300 305,250
iPCS, Inc.
Sr. Discount Notes
14.00%, 7/15/10 N/R 250 35,000
IWO Holdings, Inc.
Gtd.
14.00%, 1/15/11 Ca 550 85,250
(2) Millicom International
Cellular S.A.
Sr. Notes
10.00%, 12/1/13 B3 500 530,000
Nextel
Communications, Inc.
Sr. Notes
7.375%, 8/1/15 B2 250 270,000
Nextel Partners, Inc.:
Sr. Notes
11.00%, 3/15/10 Caa1 $ 400 $ 444,000
8.125%, 7/1/11 Caa1 750 802,500
PTC International
Finance II SA
Yankee Gtd.
11.25%, 12/1/09 Ba3 500 552,500
Rogers Cantel, Inc.
Yankee Sr. Secured
Debentures
9.375%, 6/1/08 Ba3 350 367,938
Rural Cellular Corp.
Sr. Sub. Notes
9.75%, 1/15/10 Caa2 1,450 1,424,625
Triton PCS, Inc.
Gtd.
8.50%, 6/1/13 B2 750 810,000
(3) U.S. Unwired, Inc.
Series B, Gtd.
0.00%, 11/1/09 Caa2 1,000 730,000
(3) Ubiquitel Operating Co.
Gtd.
0.00%, 4/15/10 C 500 352,500
Western Wireless Corp.
Sr. Notes
9.25%, 7/15/13 Caa1 500 530,000
---------------
GROUP TOTAL 8,656,563
---------------

TOTAL CORPORATE OBLIGATIONS
(Cost $181,437,620) 180,070,138
---------------

SHARES/
UNITS
---------------------------------------------------------------------------------------------------------

COMMON STOCKS (1.1%)

BROADCAST/OUTDOOR (0.1%)
(5) Equinix, Inc. 5,567 156,989

CABLE (0.3%)
(5) NTL Europe, Inc. 3 0
(5) NTL, Inc. 10,155 708,311
---------------
GROUP TOTAL 708,311
---------------

CAPITAL GOODS (0.0%)
(5) Motels of America LLC 750 3,000

CONTAINERS (0.0%)
(4)(5) Continental AFA
Dispensing Co. 20,689 98,273

FINANCE (0.0%)
(4)(5)(6) Westfed Holdings, Inc.
Class B (acquired 9/20/88,
cost $510) 16,893 169

FOOD PROCESSORS/BEVERAGE/BOTTLING (0.0%)
(2)(5) Specialty Foods Corp. 52,500 525

The accompanying notes are an integral part of the financial statements.

SHARES/ VALUE
UNITS (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

INDUSTRIAL (0.1%)
(4)(5) Doskocil Manufacturing Co. 36,000 $ 126,000
(4)(5) First Wave Marine, Inc. 2,105 13,156
---------------
GROUP TOTAL 139,156
---------------

METALS & MINING (0.0%)
(5) Sheffield Steel Corp. 8,750 88

PAPER & FOREST PRODUCTS (0.0%)
(5) Digitalglobe, Inc. 69,987 69,987

RETAIL- FOOD & DRUG (0.0%)
(4)(5) Archibald Candy Corp. 2,030 50,750

RETAIL STORES (0.0%)
(4)(5) Safelite Glass Corp.
Class B 12,903 64,515
(4)(5) Safelite Realty Corp. 871 8,710
---------------
GROUP TOTAL 73,225
---------------

SECONDARY OIL & GAS PRODUCERS (0.1%)
(4)(5) Southwest Royalties, Inc.
Class A 16,736 253,210

SERVICES (0.1%)
(2)(5) Mail Well, Inc. 31,958 147,327

TEXTILE/APPAREL/SHOE MANUFACTURING (0.2%)
(4)(5) HCI Direct, Inc.
Class A 18,578 92,890
(5) Safety Components
International, Inc. 26,759 324,453
---------------
GROUP TOTAL 417,343
---------------

WIRELESS (0.2%)
(5) Dobson Communications Corp.
Class A 57,927 380,580
(2)(5) OpTel, Inc. 750 8
---------------
GROUP TOTAL 380,588
---------------

TOTAL COMMON STOCKS
(Cost $4,884,935) 2,498,941
---------------

PREFERRED STOCKS (0.3%)

CABLE (0.1%)
(5) Adelphia
Communications Corp.
13% Cum. Exchangeable
Series B 7,500 114,375
(5) DIVA Systems Corp.
Series D 56,913 0
---------------
GROUP TOTAL 114,375
---------------

FINANCE (0.0%)
(4)(5)(6) Westfed Holdings, Inc.
Class A (acquired 9/20/88-
6/18/93, cost $4,815,472) 57,005 $ 14,251
---------------

RESTAURANTS (0.0%)
(5)(7) AmeriKing, Inc.
13% Cum. Exchangeable 40,375 404
---------------

WIRELESS (0.2%)
(2) Dobson Communications
Corp.
6% Conv. preferred 900 154,350
(5)(7) Rural Cellular Corp.
11.375% Sr. Exchangeable 426 333,345
---------------
GROUP TOTAL 487,695
---------------

TOTAL PREFERRED STOCKS
(Cost $7,262,984) 616,725
---------------

WARRANTS (0.0%)
(4)(5) Carrier1 International S.A.
expiring 2/19/09 300 0
(5) Colt Telecom Group plc
expiring 12/31/06 400 9,786
(5) DIVA Systems Corp.:
expiring 5/15/06 2,315 0
expiring 3/1/08 11,655 0
(2)(5) Dayton Superior Corp.
expiring 6/15/09 1,250 13
(2)(5) Decrane Aircraft Holdings
expiring 9/30/08 800 8
(5) Loral Space &
Communications
expiring 12/27/06 6,290 63
(5) Mikohn Gaming Corp.
expiring 8/15/08 3,000 23
(5) NTL, Inc.
expiring 1/13/11 4 39
(5) Pegasus Communications Corp.
expiring 1/1/07 250 3
(2)(5) Pliant Corp.
expiring 6/1/10 747 37
(4)(5) Safelite Glass Corp.:
Class A
expiring 9/29/06 31,622 316
Class B
expiring 9/29/07 21,081 211
(5) Star Choice Communications, Inc.
expiring 12/5/05 16,212 50,167
(4)(5) Windsor Woodmont
Black Hawk
expiring 3/15/10 100 0

TOTAL WARRANTS
(Cost $85,923) 60,666
---------------

TOTAL DOMESTIC SECURITIES
(Cost $193,671,462) 183,246,470
---------------

The accompanying notes are an integral part of the financial statements.

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

FOREIGN SECURITIES (13.4%)
CORPORATE OBLIGATIONS (0.3%)
BRAZIL (0.3%)

(2) Embratel
Gtd.
11.00%, 12/15/08 B2 USD $ 500 $ 515,000
---------------

MALAYSIA (0.0%)
(2) Petronas Capital, Ltd.
Gtd.
7.00%, 5/22/12 Baa1 USD 50 57,067
---------------

TOTAL CORPORATE OBLIGATIONS
(Cost $553,653) 572,067
---------------

GOVERNMENT OBLIGATIONS (13.1%)

ARGENTINA (0.1%)
(8) Bocon PRO1
Bonds
2.67%, 4/1/07 Ca ARP 152 3,443
Republic of Argentina
Series 2031,
Unsubordinated
12.00%, 6/19/31 Ca USD 1,060 268,975
---------------
GROUP TOTAL 272,418
---------------

BELIZE (0.4%)
Government of Belize
Global Bonds
9.50%, 8/15/12 Ba3 USD 815 818,099
---------------

BRAZIL (2.0%)
Federal Republic of Brazil:
Bonds
9.625%, 7/15/05 B2 USD 1,475 1,615,125
Series 20YR, Bonds
8.00%, 4/15/14 B2 USD 616 607,560
Series 30YR,
Collateralized
2.125%, 4/15/24 B2 USD 2,520 2,196,200
---------------
GROUP TOTAL 4,418,885
---------------

BULGARIA (0.3%)
Republic of Bulgaria
Series A, Collaterlized
1.9375%, 7/28/12 Ba2 USD 699 692,548
---------------

COLOMBIA (0.4%)
Republic of Colombia
Global Notes
10.50%, 7/9/10 Ba2 USD 755 850,130
---------------

DOMINICAN REPUBLIC (0.2%)
Dominican Republic
Series REGS, Notes
9.04%, 1/23/13 B2 USD 600 458,540
---------------

ECUADOR (0.5%)
Republic of Ecuador
Series REGS, Bonds
7.00%, 8/15/30 Caa2 USD $ 1,385 $ 1,075,315
---------------

GRENADA (0.3%)
Government of Grenada
Series REGS,
Unsubordinated
9.375%, 6/30/12 N/R USD 660 683,770
---------------

MEXICO (1.5%)
United Mexican States:
Bonds
8.25%, 2/24/09 Baa2 USD 1,046 1,500,098
8.25%, 2/24/09 Baa2 DEM 1,540 1,129,658
8.625%, 3/12/08 Baa2 USD 520 613,600
---------------
GROUP TOTAL 3,243,356
---------------

MOROCCO (0.2%)
Kingdom of Morocco
Series A, Foreign
Government Gtd.
2.5625%, 1/1/09 Ba1 USD 406 400,062
---------------

PANAMA (0.2%)
Republic of Panama
Bonds
10.75%, 5/15/20 Ba1 USD 370 445,850
---------------

PERU (0.4%)
Republic of Peru
Notes
9.125%, 2/21/12 Ba3 USD 790 884,800
---------------

RUSSIA (3.7%)
Ministry Finance of Russia:
Series V, Debentures
3.00%, 5/14/08 Ba2 USD 3,555 3,187,960
Series VI, Debentures
3.00%, 5/14/06 Ba1 USD 630 613,040
Russian Federation:
Series REGS,
Unsubordinated
5.00%, 3/31/30 Baa3 USD 3,475 3,340,344
(2) Unsubordinated
11.00%, 7/24/18 Baa3 USD 785 1,061,713
---------------
GROUP TOTAL 8,203,057
---------------

SOUTH AFRICA (0.9%)
Republic of South Africa
Global Notes
9.125%, 5/19/09 Baa2 USD 1,570 1,895,775
---------------

UKRAINE (0.7%)
Ukraine Government
Series REGS, Bonds
7.65%, 6/11/13 B1 USD 1,600 1,673,610
---------------

The accompanying notes are an integral part of the financial statements.

MOODY'S FACE
RATINGS AMOUNT VALUE
(UNAUDITED) (000) (NOTE 1-A)
---------------------------------------------------------------------------------------------------------

URUGUAY (0.3%)
Republic of Uruguay:
Bonds
7.25%, 2/15/11 B3 USD $ 510 $ 442,425
7.50%, 3/15/15 B3 USD 340 273,700
---------------
GROUP TOTAL 716,125
---------------

VENEZUELA (1.0%)
Republic of Venezuela:
Series DL, Bonds
2.125%, 12/18/07 N/R USD 667 634,014
Series REGS, Notes
10.75%, 9/19/13 N/R USD 1,430 1,528,646
---------------
GROUP TOTAL 2,162,660
---------------

TOTAL GOVERNMENT OBLIGATIONS
(Cost $27,663,900) 28,895,000
---------------

TOTAL FOREIGN SECURITIES
(Cost $28,217,553) 29,467,067
---------------

TIME DEPOSIT (1.3%)
Wachovia Bank
(Grand Cayman)
0.10%, 1/2/04
(Cost $2,820,000) 2,820,000
---------------

TOTAL INVESTMENTS (98.0%)
(Cost $224,709,015) 215,533,537
---------------

OTHER ASSETS IN EXCESS OF LIABILITIES (2.0%)
4,329,968
---------------

NET ASSETS (100%)
Applicable to 49,895,588 issued and outstanding
$.001 par value shares (authorized 100,000,000
shares) $ 219,863,505
===============

N/R--Not Rated
ARP--Argenine Peso
(1) Defaulted security.
(2) 144A Security. Certain conditions for public sale may exist. Total market
value of 144A securities owned at December 31, 2003 was $28,558,240 or
12.99% of net assets.
(3) Step Bond--Coupon rate is low or zero for an initial period and then
increases to a higher coupon rate thereafter. Maturity date disclosed is the
ultimate maturity.
(4) Not readily marketable security; security is valued at fair value as
determined in good faith by the Board of Directors.
(5) Non-income producing security.
(6) Restricted as to private and public resale. Total cost of restricted
securities at December 31, 2003 aggregated $4,815,982. Total market value of
restricted securities owned at December 31, 2003 was $14,420 or 0.01% of net
assets.
(7) Payment-in-kind preferred stocks. Market value includes accrued dividend.
(8) 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,
2003.

The accompanying notes are an integral part of the financial statements.

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2003
-------------------------------------------------------------------------------

ASSETS:
Investments at Value
(Cost $224,709,015) (Note 1-A) $ 215,533,537
Receivables:
Receivable due from Advisor 34,958
Interest Receivable (Note 1-B) 4,753,555
Other Assets 27,581
-------------------------------------------------------------------------------
Total Assets 220,349,631
-------------------------------------------------------------------------------
LIABILITIES:
Unrealized Depreciation on Forward
Foreign Currency Exchange Contracts
(Note 1-H) 88,455
Investment Advisory Fees (Note 2) 272,028
Shareholders' Reports 75,945
Shareholders' Servicing Fees 10,622
Administrative Fees (Note 2) 9,733
Audit Fees 9,694
Legal Fees 8,648
Custodian Fees 8,067
Other Liabilities 1,789
Directors' Fees 1,145
-------------------------------------------------------------------------------
Total Liabilities 486,126
-------------------------------------------------------------------------------
NET ASSETS $ 219,863,505
===============
NET ASSETS CONSIST OF:
Capital Shares at $.001 Par Value $ 49,896
Capital Paid in Excess of Par Value 391,475,870
Distributions in Excess of Net
Investment Income (4,068,815)
Accumulated Net Realized Loss on
Investments (158,211,080)
Unrealized Depreciation on
Investments, Foreign Currency
Contracts and Translations (9,382,366)
-------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO 49,895,588 ISSUED
AND OUTSTANDING SHARES (AUTHORIZED
100,000,000 SHARES) $ 219,863,505
===============
NET ASSET VALUE PER SHARE $ 4.41
MARKET PRICE PER SHARE $ 4.50
===============================================================================

STATEMENT OF OPERATIONS

YEAR ENDED
DECEMBER 31, 2003
-------------------------------------------------------------------------------

INVESTMENT INCOME:
Interest (Net of foreign taxes withheld
of $3,313) (Note 1-B) $ 19,950,025
Dividends (Note 1-B) 30,926
-------------------------------------------------------------------------------
Total Income 19,980,951
-------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees (Note 2) 1,038,753
Custodian Fees 100,434
Administrative Fees (Note 2) 98,258
Shareholders' Reports 78,835
Directors' Fees and Expenses 68,077
Shareholders' Servicing Fees 64,277
Legal Fees 61,715
Audit Fees 45,532
NYSE Fees 40,900
Miscellaneous 31,403
-------------------------------------------------------------------------------
Total Expenses 1,628,184
-------------------------------------------------------------------------------
Net Investment Income 18,352,767
-------------------------------------------------------------------------------
Net Realized Loss on Investments and
Foreign Currency (Note 1-B) (5,436,579)
-------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION
ON INVESTMENTS, FOREIGN CURRENCY
CONTRACTS AND TRANSLATIONS 34,311,753
-------------------------------------------------------------------------------
Net Realized Loss and Change in
Unrealized Appreciation 28,875,174
-------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 47,227,941
===============================================================================

The accompanying notes are an integral part of the financial statements.

STATEMENT OF CHANGES IN NET ASSETS

YEAR ENDED DECEMBER 31,
----------------------------------
2003 2002
---------------------------------------------------------------------------------------------------------------------

INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net Investment Income $ 18,352,767 $ 21,151,823
Net Realized Loss on Investments and Foreign Currency (5,436,579) (56,450,987)
Change in Unrealized Appreciation of Investments, Foreign
Currency Contract and Translations 34,311,753 28,662,276
---------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 47,227,941 (6,636,888)
---------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income (21,280,026) (30,897,405)
Return of Capital (1,173,023) (4,029,507)
---------------------------------------------------------------------------------------------------------------------
Total Distributions (22,453,049) (34,926,912)
---------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 24,774,892 (41,563,800)
---------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 195,088,613 236,652,413
---------------------------------------------------------------------------------------------------------------------
End of Period (Including distributions in excess of net investment income of
($4,068,815) and ($3,967,559), respectively.) $ 219,863,505 $ 195,088,613
=====================================================================================================================

The accompanying notes are an integral part of the financial statements.

FINANCIAL HIGHLIGHTS

YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 2003 2002 2001(2) 2000 1999 1998
-------------------------------------------------------------------------------------------------------------------------

NET ASSET VALUE, BEGINNING OF YEAR $ 3.91 $ 4.74 $ 5.70 $ 7.34 $ 7.77 $ 8.44
-------------------------------------------------------------------------------------------------------------------------
Offering Costs -- -- -- -- -- --
-------------------------------------------------------------------------------------------------------------------------
Investment Activities:
Net Investment Income 0.37 0.42 0.61+ 0.67 0.75 0.71
Net Realized and Unrealized Gain (Loss)
on Investments and Futures Contracts 0.58 (0.55) (0.85) (1.55) (0.46) (0.66)
-------------------------------------------------------------------------------------------------------------------------
Total from Investment Activities 0.95 (0.13) (0.24) (0.88) 0.29 0.05
-------------------------------------------------------------------------------------------------------------------------
Distributions:
Net Investment Income (0.43) (0.62) (0.72) (0.76) (0.72) (0.72)
Return of Capital (0.02) (0.08) -- -- -- --
-------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.45) (0.70) (0.72) (0.76) (0.72) (0.72)
-------------------------------------------------------------------------------------------------------------------------
Decrease in Net Asset Value due to Shares
Issued through Rights Offering -- -- -- -- -- --
-------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 4.41 $ 3.91 $ 4.74 $ 5.70 $ 7.34 $ 7.77
=========================================================================================================================
PER SHARE MARKET VALUE, END OF YEAR $ 4.50 $ 3.88 $ 4.98 $ 5.56 $ 6.06 $ 7.56
=========================================================================================================================
TOTAL INVETMENT RETURN:
Net Asset Value (1) 24.59% (5.26)% (6.04)% (12.37)% 4.50% 0.47%
Market Value 28.11% (10.52)% 1.15% 3.55% (11.32)% (5.68)%
=========================================================================================================================
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Year (Thousands) $ 219,864 $ 195,089 $ 236,652 $ 197,817 $ 254,857 $ 269,507
Ratio of Expenses to Average Net Assets
Including Expense Offsets 0.78% 0.79% 1.07% 0.78% 0.78% 0.81%
Ratio of Expenses to Average Net Assets 0.78% 0.79% 1.07% 0.78% 0.78% 0.81%
Ratio of Net Investment Income to Average
Net Assets 8.83% 9.93% 11.66% 10.10% 9.90% 8.59%
Portfolio Turnover Rate 77.8% 61.1% 50.1%(3) 39.1% 43.5% 84.7%
-------------------------------------------------------------------------------------------------------------------------

YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995# 1994
-----------------------------------------------------------------------------------------------

NET ASSET VALUE, BEGINNING OF YEAR $ 8.12 $ 8.63 $ 8.05 $ 9.00
-----------------------------------------------------------------------------------------------
Offering Costs -- (0.02) -- --
-----------------------------------------------------------------------------------------------
Investment Activities:
Net Investment Income 0.69 0.75 0.86 0.83
Net Realized and Unrealized Gain (Loss)
on Investments and Futures Contracts 0.39 0.18 0.48 (1.06)
-----------------------------------------------------------------------------------------------
Total from Investment Activities 1.08 0.93 1.34 (0.23)
-----------------------------------------------------------------------------------------------
Distributions:
Net Investment Income (0.76) (0.90) (0.76) (0.72)
Return of Capital -- -- -- --
-----------------------------------------------------------------------------------------------
Total Distributions (0.76) (0.90) (0.76) (0.72)
-----------------------------------------------------------------------------------------------
Decrease in Net Asset Value due to Shares
Issued through Rights Offering -- (0.52) -- --
-----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 8.44 $ 8.12 $ 8.63 $ 8.05
===============================================================================================
PER SHARE MARKET VALUE, END OF YEAR $ 8.75 $ 7.63 $ 7.88 $ 7.00
===============================================================================================
TOTAL INVETMENT RETURN:
Net Asset Value (1) 14.03% 10.59%* 17.41% (2.67)%
Market Value 25.90% 10.05%* 24.34% (9.48)%
===============================================================================================
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Year (Thousands) $ 291,959 $ 280,634 $ 210,441 $ 196,379
Ratio of Expenses to Average Net Assets
Including Expense Offsets 0.84% 0.94% -- --
Ratio of Expenses to Average Net Assets 0.84% 0.95% 0.92% 0.83%
Ratio of Net Investment Income to Average
Net Assets 8.47% 9.23% 10.22% 9.75%
Portfolio Turnover Rate 97.7% 81.0% 44.1% 70.6%
-----------------------------------------------------------------------------------------------

# Credit Suisse Asset Management, LLC, formerly known as BEA Associates
replaced CS First Boston Investment Management as the Fund's investment
adviser effective June 13, 1995.
* 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) 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.
(3) 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.

The accompanying notes are an integral part of the financial statements.

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

On May 14, 2001, the Fund acquired substantially all of the assets and assumed
the liabilities of Credit Suisse Asset Management Strategic Global Income Fund,
Inc. ("CGF"). Pursuant to the terms of the agreement governing the acquisition,
the CGF shareholders, for each share of common stock of CGF held, became
entitled to receive an equivalent dollar amount of full shares of common stock
of the Fund. Based on the net asset values of the Fund and CGF as of May 11,
2001 ($5.49 and $6.96, respectively), the conversion ratio was 1.2681 shares of
the Fund for each share of CGF. Cash was paid in lieu of fractional shares. Net
assets of the Fund and CGF as of the acquisition date were $190,522,544 and
$83,383,448, including unrealized depreciation of $71,252,968 and $16,668,823,
respectively. Total net assets immediately after the acquisition were
$273,905,992. Based upon the opinion of Fund counsel, the acquisition qualified
as a tax-free reorganization for Federal income tax purposes, with no gain or
loss recognized by the Fund, CGF or their shareholders.

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 then 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 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). 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 costs 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 are 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 make the requisite distributions to its shareholders which
will be sufficient to relieve it from federal income and excise taxes.

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 and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from these estimates.

F) SHORT-TERM INVESTMENTS--The Fund, together with other funds/portfolios
advised by Credit Suisse Asset Management, LLC ("CSAM"), 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.") Grand Cayman branch, the Fund's custodian, or with other

client approved, and highly rated banks. The short-term time deposit issued by
BBH&Co. 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, 2003, 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, 2003, the Fund
had the following open forward foreign currency contracts:

FOREIGN
FORWARD CURRENCY
FOREIGN TO BE UNREALIZED
CURRENCY EXPIRATION PURCHASED/ CONTRACT CONTRACT GAIN/
CONTRACTS DATE (SOLD) AMOUNT VALUE (LOSS)
----------------- ---------- ----------- ------------ ------------ -------------

Mexican Peso 2/27/04 7,400,000 $ 644,599 $ 653,517 $ 8,918
Mexican Peso 2/27/04 (7,400,000) (645,555) (654,037) (8,482)
European Economic
Unit 3/30/04 (5,425,000) (6,724,288) (6,813,179) (88,891)
------------ ------------ -------------
$ (6,725,244) $ (6,813,699) $ (88,455)
============ ============ =============

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.

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 a Fund invests in junk bonds) the Fund's net asset value.

NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

CSAM serves as investment adviser for the Fund. For its investment advisory
services, CSAM is entitled to receive a fee from the Fund at a computed weekly
and paid quarterly rate 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, 2003, investment advisory fees earned were
$1,038,753.

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, 2003, BBH&Co. earned administrative service fees
(including out-of-pocket expenses) of $98,258.

Fleet National Bank provides transfer agent services to the Fund. Under the
Transfer Agent Agreement, Fleet National Bank is paid a fee based on the number
of accounts in the Fund per year. In addition, the Fund is charged certain
out-of-pocket expenses by Fleet National Bank.

Merrill Corporation ("Merrill"), an affiliate of CSAM, has been engaged by the
Fund to provide certain financial printing services. For the year ended December
31, 2003, Merrill was paid $35,865 for its services to the Fund.

NOTE 3. LINE OF CREDIT

The Fund, together with other funds/portfolios advised by CSAM (collectively,
the "Participating Funds"), participates in a $100 million committed, unsecured
line of credit facility ("Credit Facility") with Deutsche Bank, A.G. as
administrative agent and syndication agent and State Street Bank and Trust
Company as operations agent for temporary or emergency purposes. Under the terms
of the Credit Facility, the Participating Funds pay an aggregate commitment fee
at a rate of 0.10% per annum on the average unused amount of the Credit
Facility, which is allocated among the Participating Funds in such manner as is
determined by the governing Boards of the Participating Funds. In addition, the
Participating Funds pay interest on borrowings at the Federal Funds rate plus
0.50%. At December 31, 2003 and during the year ended December 31, 2003, the
Fund had no borrowings under the Credit Facility.

NOTE 4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2003, there were no U.S. Government and Agency
Obligations, purchases and sales of investment securities (excluding short-term
investments) were as follows:

INVESTMENT SECURITIES
---------------------

Purchases $ 156,245,015
Sales 158,390,173

NOTE 5. FEDERAL INCOME TAXES

Income and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP. These differences are
primarily due to differing treatments of Foreign currency transactions,
defaulted bonds, capital loss carryforwards, losses deferred due to wash sales,
Post-October losses, and excise tax regulations.

The tax characteristics of dividends paid during the year ended December 31,
2003, and the year ended December 31, 2002, respectively, for the Fund were as
follows:

ORDINARY INCOME
---------------
2003 2002
---- ----

$ 21,280,026 $ 30,897,405

At December 31, 2003, the components of distributable earnings on a tax basis
for the Fund were as follows:

Accumulated net realized loss $ (156,300,028)
Unrealized depreciation (10,024,326)
Undistributed capital-other (4,792,619)
Undistributed ordinary loss-other (545,288)
--------------
$ (171,662,261)
==============

At December 31, 2003, the Fund had capital loss carryforwards available to
offset possible future capital gains as follows:

EXPIRES DECEMBER 31,
--------------------
2006 2007 2008 2009 2010 2011
----------- ----------- ----------- ------------ ------------ ------------

$ 3,565,110 $ 9,512,339 $ 2,335,946 $ 50,358,903 $ 72,148,258 $ 18,379,472

At December 31, 2003, the identified cost for federal income tax purposes, as
well as the gross unrealized appreciation from investments for those securities
having an excess of value over cost, gross unrealized depreciation from
investments for those securities having an excess of cost over value and the net
unrealized appreciation (depreciation) from investments were as follows;
$225,439,430, $17,463,931, $(27,369,824) and $(9,905,893), respectively.

At December 31, 2003, the Fund reclassified $3,999,026 from accumulated
undistributed net investment income and $(842,729) from accumulated net realized
loss to paid-in capital, to adjust for current period permanent book/tax
differences which arose principally from differing book/tax treatments of
realized currency gain/loss and defaulted bonds sold. Net assets were not
affected by these reclassifications.

NOTE 6. 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 7. 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.

REPORT OF INDEPENDENT AUDITORS

To the Shareholders and Board of Directors 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, 2003, 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 periods indicated, 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 auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 2003 by correspondence with the custodian and brokers, provide a
reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Two Commerce Square
Philadelphia, Pennsylvania
February 17, 2004

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.
DECEMBER 31, 2003 (UNAUDITED)
ADDITIONAL INFORMATION

ADDITIONAL FEDERAL TAX INFORMATION

The percentage of ordinary income dividends paid by the Fund during the year
ended December 31, 2003, which qualify for the Dividends Received Deduction
available to corporate shareholders was 0.12%.

In January, 2004, the Fund will report on Form 1099 the tax status of all
distributions made during the calendar year 2003. 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.

DESCRIPTION OF INVESTLINK(SM) PROGRAM

The InvestLink(SM) Program is sponsored and administered by Fleet National Bank,
not by Credit Suisse Asset Management Income Fund, Inc., (the "Fund"). Fleet
National Bank 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.

Fleet National Bank, 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 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
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 judgement 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 one of the following telephone numbers: First Time Investors
(888) 697-8026. Current Shareholders (800) 730-6001. All correspondence
regarding the Program should be directed to: Fleet National Bank, InvestLink
Program, P.O. 43010, Providence, RI 02940-3010.

INFORMATION CONCERNING DIRECTORS AND OFFICERS (UNAUDITED)

NUMBER OF
PORTFOLIOS IN
POSITION(S) TERM OF OFFICE FUND COMPLEX
NAME, ADDRESS HELD AND LENGTH PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER DIRECTORSHIPS
AND DATE OF BIRTH WITH FUND OF TIME SERVED DURING PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------------

INDEPENDENT DIRECTORS

Enrique R. Arzac Director, Since 1990; Professor of Finance and 8 Director of The Adams
Columbia University Nominating current term Economics, Graduate Express Company (a
Graduate School of Committee ends at the 2004 School of Business, closed-end investment
Business Chairman annual meeting Columbia University company); Director of
New York, NY 10027 and Audit since 1971. Petroleum and Resources
Date of Birth: 10/02/41 Committee Corporation (a closed-end
Member investment company.)

Lawrence J. Fox Director, Since 1990; Partner, Drinker Biddle & 3 Director, Winthrop Trust
One Logan Square Nominating current term Reath (law firm) since Company.
18th & Cherry Streets Committee ends at the 2006 1972.
Philadelphia, PA19103 Member annual meeting
Date of Birth: 07/17/43 and Audit
Committee
Chairman

James S. Pasman, Jr. Director, Since Fund Currently retired 44 Director of Education
c/o Credit Suisse Asset Nominating Inception; Management Corp.
Management, LLC and Audit current term
466 Lexington Avenue Committee ends at the 2005
New York, Member annual meeting
NY 10017-3140
Date of Birth: 12/20/30

INTERESTED DIRECTORS

Joseph D. Gallagher(1) Director, Since 2003; Managing Director, Chief 45 None
Credit Suisse Asset Chairman and current term Executive Officer and
Management, LLC Chief ends at the 2006 Global Chief Operating
466 Lexington Avenue Executive annual meeting of CSAM since 2003;
New York, Officer Global Chief
NY 10017-3140 Financial Officer,
Date of Birth: 12/14/62 Credit Suisse Asset
Management from 1999
to 2003; Chief
Executive Officer
and Director of
Credit Suisse Asset
Management Limited,
London, England,
from June 2000 to
2003; Director of
Credit Suisse Asset
Management Funds
(UK) Limited,
London, England from
June 2000 to 2003;
Managing Director,
Head- Asian
Corporate Finance
and M&A, Credit
Suisse First Boston,
Hong Kong, China,
from January 1998 to
May 1999; Officer of
other Credit Suisse
Funds.

William W. Priest. Jr.(1) Director Since 1997; Co-Managing Partner, 49 Director of Globe
Steinberg Priest & Sloane current term Steinberg Priest & Sloane Wireless, LLC (maritime
Capital Management, LLC ends at the 2005 Capital Management, communications
12 East 49th Street annual meeting LLC since March 2001; company); Director of
12th Floor Chairman and Managing InfraRedX (medical
New York, Director of CSAM from device company).
NY 10017 2000 to February 2001;
Date of Birth: 09/24/41 Chief Executive Officer
and Managing Director of
CSAM from 1990 to 2000.

POSITION(S) TERM OF OFFICE
NAME, ADDRESS HELD AND LENGTH PRINCIPAL OCCUPATION(S)
AND DATE OF BIRTH WITH FUND OF TIME SERVED DURING PAST FIVE YEARS
------------------------------------------------------------------------------------------------------------------------------------

OFFICERS(2)

Richard J. Lindquist President and Since 1996 Managing Director of CSAM; Associated with CSAM since 1995; Officer
Credit Suisse Asset Chief of other Credit Suisse Funds.
Management, LLC Investment
466 Lexington Avenue Officer
New York,
NY 10017-3140
Date of Birth: 06/22/60

Hal Liebes Senior Vice Since 1996 Managing Director and Global General Counsel of CSAM; Associated
Credit Suisse Asset President with CSAM since 1997; Officer of other Credit Suisse Funds.
Management, LLC
466 Lexington Avenue

New York,
NY 10017-3140
Date of Birth: 07/06/64

Michael A. Pignataro Chief Financial Since 1995 Director and Director of Fund Administration of CSAM; Associated
Credit Suisse Asset Officer, Vice with CSAM since 1984; Officer of other Credit Suisse Funds.
Management, LLC President and
466 Lexington Avenue Secretary
New York,
NY 10017-3140
Date of Birth: 11/15/59

(1) Mr. Priest is an interested person of the Fund, as defined in the 1940 Act,
because up to December 31, 2002 he was retained by CSAM to provide
consulting services. Mr. Gallagher is an interested person of the Fund by
virtue of his current positions as director and/or officer of CSAM.

(2) The officers of the Fund shown are officers that make policy decisions.
4946-AR-03

4946-AR-03
Credit Suisse Asset Management, LLC
Phone: 1-800-293-1232
www.CSAM.com

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.
466 LEXINGTON AVENUE
NEW YORK, NY 10017

OFFICERS AND DIRECTORS

Joseph D. Gallagher
DIRECTOR, CHAIRMAN OF THE
BOARD AND CHIEF EXECUTIVE OFFICER

Enrique R. Arzac
DIRECTOR

Lawrence J. Fox
DIRECTOR

James S. Pasman, Jr.
DIRECTOR

William W. Priest, Jr.
DIRECTOR

Richard J. Lindquist
PRESIDENT AND CHIEF INVESTMENT
OFFICER

Hal Liebes
SENIOR VICE PRESIDENT

Michael A. Pignataro
CHIEF FINANCIAL OFFICER,
VICE PRESIDENT AND
SECRETARY

Maxine C. Evertz
ASSISTANT SECRETARY

Robert M. Rizza
VICE PRESIDENT AND
TREASURER

Rocco A. Del Guercio
ASSISTANT TREASURER

INVESTMENT ADVISER
Credit Suisse Asset Management, LLC
466 Lexington Avenue
New York, New York 10017
Phone 1-800-293-1232

ADMINISTRATOR AND CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109

SHAREHOLDER SERVICING AGENT
Fleet National Bank
(c/o EquiServe)
P.O. Box 43010
Providence, Rhode Island 02940-3010
Phone 1-800-730-6001

LEGAL COUNSEL
Willkie Farr & Gallagher LLP
787 7th Avenue
New York, New York 10019

INDEPENDENT AUDITORS
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 11(a)(1) to this Form. There were no amendments to the code during the
fiscal year ended December 31, 2003. There were no waivers or implicit waivers
from the code granted by the registrant during the fiscal year ended December
31, 2003.

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
James S. Pasman, Jr. The audit committee financial experts are "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 principal auditors, PricewaterhouseCoopers LLP
("PwC"), for its fiscal years ended December 31, 2002 and December 31, 2003.

2002 2003
--------------------------------------------------------------------------------

Audit Fees $ 41,000 $ 37,410
Audit-Related Fees(1) -- 3,000
Tax Fees(2) 2,500 2,175
All Other Fees -- --
Total $ 43,500 $ 42,585

(1) Services include agreed-upon procedures in connection with the registrant's
semi-annual financial statements.

(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 ("CSAM"), and any service provider to the
registrant controlling, controlled by or under common control with CSAM that
provided ongoing services to the registrant ("Covered Services Provider"), for
the registrant's fiscal years ended December 31, 2002 and December 31, 2003.

2002 2003
--------------------------------------------------------------------------------

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

(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 auditors to the registrant
and (ii) all permissible non-audit services to be provided by the independent
auditors to CSAM 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 CSAM 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, CSAM and any Covered
Services Provider constitutes not more than 5% of the total amount of revenues
paid by the registrant to its independent auditors 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:

2002 2003
--------------------------------------------------------------------------------

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 CSAM
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, 2002 and December 31, 2003:

2002 2003
--------------------------------------------------------------------------------

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, CSAM and Covered Service Providers for the fiscal years ended
December 31, 2002 and December 31, 2003 were $2,500 and $5,175, 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 J. Fox
and James S. Pasman, Jr.

ITEM 6. [RESERVED]

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.

CREDIT SUISSE ASSET MANAGEMENT, LLC

CSAM CAPITAL INC.

CREDIT SUISSE FUNDS
CREDIT SUISSE INSTITUTIONAL FUNDS

CSAM CLOSED-END FUNDS

PROXY VOTING POLICY AND PROCEDURES

Introduction

Credit Suisse Asset Management, LLC and CSAM Capital Inc.
(collectively, "CSAM") are fiduciaries that owe 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

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

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

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

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

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.

January 13, 2004

ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Form N-CSR disclosure requirement not yet effective with respect to the
registrant.

ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Form N-CSR disclosure requirement not yet effective with respect to the
registrant.

ITEM 10. CONTROLS AND PROCEDURES.

(a) As of a date within 90 days from the filing date of this report, the
principal executive officer and principal financial officer concluded that the
registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (the "Act")) were effective based on
their evaluation of the disclosure controls and procedures required by Rule
30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934.

(b) There were no changes in registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the
registrant's second fiscal half-year that have materially affected, or are
reasonably likely to materially affect, the registrant's internal control over
financial reporting.

ITEM 11. EXHIBITS.

(a)(1) The registrant's code of ethics is an exhibit to this report.

(a)(2) The certifications of the registrant as required by Rule 30a-2(a) under
the Act are exhibits to this report.

(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/ Joseph D. Gallagher
-----------------------
Name: Joseph D. Gallagher
Title: Chief Executive Officer
Date: March 5, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

/s/ Joseph D. Gallagher
-----------------------
Name: Joseph D. Gallagher
Title: Chief Executive Officer
Date: March 5, 2004

/s/ Michael A. Pignataro
------------------------
Name: Michael A. Pignataro
Title: Chief Financial Officer
Date: March 5, 2004