N-Q 1 fhitnqform.txt FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number 811-01608 FRANKLIN HIGH INCOME TRUST (Exact name of registrant as specified in charter) ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906 (Address of principal executive offices) (Zip code) MURRAY L. SIMPSON, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906 (Name and address of agent for service) Registrant's telephone number, including area code: 650 312-2000 Date of fiscal year end: 5/31 Date of reporting period: 2/28/05 Item 1. Schedule of Investments. Franklin High Income Trust QUARTERLY STATEMENT OF INVESTMENTS FEBRUARY 28, 2005 -------------------------------------------------------------------------------- CONTENTS AGE High Income Fund ...................................................... 3 Notes to Statement of Investments ......................................... 11 [LOGO] FRANKLIN(R) TEMPLETON(R) INVESTMENTS FRANKLIN o Templeton o Mutual Series Quarterly Statement of Investments | 1 This page intentionally left blank. 2 | Quarterly Statement of Investments Franklin High Income Trust STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------------ AGE HIGH INCOME FUND COUNTRY PRINCIPAL AMOUNT(H) VALUE ------------------------------------------------------------------------------------------------------------------------------------ BONDS 89.5% COMMERCIAL SERVICES 1.0% JohnsonDiversey Holdings Inc., senior disc. note, zero cpn. to 5/17/07, 10.67% thereafter, 5/15/13 ............................... United States $35,000,000 $ 30,975,000 -------------- COMMUNICATIONS 11.2% (a)Asia Global Crossing Ltd., senior note, 13.375%, 10/15/10 ........... Bermuda 11,000,000 605,000 AT&T Wireless Services Inc., senior note, 7.875%, 3/01/11 ........... United States 22,000,000 25,557,444 Crown Castle International Corp., senior note, 7.50%, 12/01/13 ...... United States 15,000,000 16,350,000 Dobson Cellular Systems Inc., secured note, 144A, 9.875%, 11/01/12 .......................................................... United States 18,000,000 19,170,000 InMarSat Finance PLC, zero cpn. to 11/15/08, 10.375% thereafter, 11/15/12 .......................................................... United Kingdom 37,200,000 28,318,500 Intelsat Bermuda Ltd., senior note, 144A, 8.25%, 1/15/13 ............ Bermuda 12,200,000 12,840,500 Intelsat Bermuda Ltd., senior note, 144A, 8.625%, 1/15/15 ........... Bermuda 17,500,000 18,768,750 (a)Iridium LLC/Capital Corp., senior note, D, 10.875%, 7/15/05 ......... Bermuda 17,000,000 2,975,000 MCI Inc., senior note, 6.908%, 5/01/07 .............................. United States 5,542,000 5,680,550 MCI Inc., senior note, 7.688%, 5/01/09 .............................. United States 5,542,000 5,853,737 MCI Inc., senior note, 8.735%, 5/01/14 .............................. United States 4,750,000 5,349,687 Millicom International Cellular SA, senior note, 144A, 11.00%, 12/01/13 .......................................................... Luxembourg 10,000,000 10,650,000 Nextel Communications Inc., senior note, 7.375%, 8/01/15 ............ United States 33,300,000 36,630,000 Nextel Partners Inc., senior note, 8.125%, 7/01/11 .................. United States 26,100,000 28,971,000 NTL Cable PLC, senior note, 144A, 8.75%, 4/15/14 .................... United Kingdom 8,900,000 10,168,250 Panamsat Corp., senior note, 9.00%, 8/15/14 ......................... United States 20,500,000 22,652,500 (a)Poland Telecom Finance BV, B, 14.00%, 12/01/07 ...................... Poland 30,000,000 3,000 Qwest Communications International Inc., senior note, 144A, 7.75%, 2/15/14 ........................................................... United States 20,000,000 20,700,000 Qwest Corp., 6.875%, 9/15/33 ........................................ United States 28,300,000 26,319,000 Rogers Wireless Communications Inc., senior secured note, 7.25%, 12/15/12 .......................................................... Canada 12,580,000 13,680,750 Rogers Wireless Communications Inc., senior secured note, 7.50%, 3/15/15 ........................................................... Canada 15,500,000 17,050,000 (a)RSL Communications PLC, senior disc. note, 10.125%, 3/01/08 ......... United Kingdom 44,500,000 333,750 (a)RSL Communications PLC, senior note, 12.00%, 11/01/08 ............... United Kingdom 6,250,000 46,875 Time Warner Telecom Holdings Inc., senior note, 9.25%, 2/15/14 ...... United States 20,000,000 20,700,000 -------------- 349,374,293 -------------- CONSUMER DURABLES 3.4% D.R. Horton Inc., senior note, 8.50%, 4/15/12 ....................... United States 25,000,000 27,863,000 Sealy Mattress Co., senior sub. note, 8.25%, 6/15/14 ................ United States 30,000,000 31,575,000 Simmons Co., senior sub. note, 7.875%, 1/15/14 ...................... United States 16,400,000 17,179,000 William Lyon Homes Inc., senior note, 7.625%, 12/15/12 .............. United States 10,000,000 10,150,000 William Lyon Homes Inc., senior note, 7.50%, 2/15/14 ................ United States 18,500,000 18,407,500 -------------- 105,174,500 -------------- CONSUMER NON-DURABLES 1.9% Rayovac Corp., senior sub. note, 144A, 7.375%, 2/01/15 .............. United States 27,800,000 28,564,500 Smithfield Foods Inc., senior note, 7.00%, 8/01/11 .................. United States 18,900,000 20,412,000 Smithfield Foods Inc., senior note, 7.75%, 5/15/13 .................. United States 9,600,000 10,812,000 -------------- 59,788,500 --------------
Quarterly Statement of Investments | 3 Franklin High Income Trust STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------ AGE HIGH INCOME FUND COUNTRY PRINCIPAL AMOUNT(H) VALUE ------------------------------------------------------------------------------------------------------------------------------------ BONDS (CONT.) CONSUMER SERVICES 20.0% (a)Adelphia Communications Corp., senior note, 10.875%, 10/01/10 ....... United States $25,000,000 $ 22,750,000 Aztar Corp., senior sub. note, 7.875%, 6/15/14 ...................... United States 13,700,000 15,275,500 Boyd Gaming Corp., senior sub. note, 6.75%, 4/15/14 ................. United States 21,600,000 22,653,000 Cablevision Systems Corp., senior note, 144A, 8.00%, 4/15/12 ........ United States 19,200,000 21,696,000 (a)Callahan NordRhein-Westfalen, senior disc. note, zero cpn. to 7/15/05, 16.00% thereafter, 7/15/10 ............................... Germany 38,000,000 2,375,000 CanWest Media Inc., senior note, B, 7.625%, 4/15/13 ................. Canada 3,500,000 3,841,250 CanWest Media Inc., senior sub. note, 10.625%, 5/15/11 .............. Canada 15,600,000 17,413,500 CanWest Media Inc., senior sub. note, 144A, 8.00%, 9/15/12 .......... Canada 6,000,000 6,495,000 Charter Communications Holdings II, senior note, 10.25%, 9/15/10 United States 33,800,000 35,870,250 Charter Communications Holdings LLC, senior disc. note, zero cpn. to 1/15/06, 13.50% thereafter, 1/15/11 ............................ United States 15,500,000 12,671,250 CSC Holdings Inc., senior deb., 7.625%, 7/15/18 ..................... United States 20,000,000 23,400,000 Dex Media East LLC, senior sub. note, B, 12.125%, 11/15/12 .......... United States 12,865,000 15,630,975 Dex Media Inc., B, 8.00%, 11/15/13 .................................. United States 7,500,000 8,175,000 Dex Media Inc., senior disc. note, zero cpn. to 11/15/08, 9.00% thereafter, 11/15/13 .............................................. United States 12,600,000 9,985,500 DIRECTV Holdings LLC, senior note, 8.375%, 3/15/13 .................. United States 29,200,000 33,142,000 EchoStar DBS Corp., senior note, 6.375%, 10/01/11 ................... United States 20,000,000 20,700,000 Emmis Operating Co., senior sub. note, 6.875%, 5/15/12 .............. United States 26,500,000 27,228,750 LIN Television Corp., senior sub. note, 6.50%, 5/15/13 .............. United States 19,600,000 20,090,000 LIN Television Corp., senior sub. note, 144A, 6.50%, 5/15/13 ........ United States 10,400,000 10,660,000 Mandalay Resort Group, senior note, 9.50%, 8/01/08 .................. United States 5,900,000 6,711,250 Mandalay Resort Group, senior sub. note, 10.25%, 8/01/07 ............ United States 14,600,000 16,498,000 Marquee Holdings Inc., senior disc. note, 144A, zero cpn. to 8/15/09, 12.00% thereafter, 8/15/14 ............................... United States 17,700,000 12,301,500 Marquee Inc., senior note, 144A, 8.625%, 8/15/12 .................... United States 9,400,000 10,363,500 Park Place Entertainment Corp., senior sub. note, 7.875%, 3/15/10 ... United States 25,000,000 28,250,000 Pinnacle Entertainment Inc., senior sub. note, 8.75%, 10/01/13 ...... United States 6,300,000 6,961,500 Quebecor Media Inc., senior disc. note, zero cpn. to 7/15/06, 13.75% thereafter, 7/15/11 ........................................ Canada 31,500,000 31,539,375 Rainbow National Services LLC, senior sub. deb., 144A, 10.375%, 9/01/14 ........................................................... United States 29,000,000 34,655,000 Rogers Cable Inc., senior secured note, 6.75%, 3/15/15 .............. Canada 9,000,000 9,427,500 Royal Caribbean Cruises Ltd., senior deb., 7.25%, 3/15/18 ........... United States 14,400,000 16,200,000 Royal Caribbean Cruises Ltd., senior note, 8.00%, 5/15/10 ........... United States 4,200,000 4,772,250 Royal Caribbean Cruises Ltd., senior note, 6.875%, 12/01/13 ......... United States 13,800,000 15,111,000 Station Casinos Inc., senior note, 6.00%, 4/01/12 ................... United States 9,300,000 9,683,625 Station Casinos Inc., senior sub. note, 6.50%, 2/01/14 .............. United States 7,000,000 7,350,000 Station Casinos Inc., senior sub. note, 6.875%, 3/01/16 ............. United States 15,000,000 15,881,250 Universal City Development, senior note, 11.75%, 4/01/10 ............ United States 15,000,000 17,700,000 Universal City Florida, senior note, 144A, 8.375%, 5/01/10 .......... United States 7,000,000 7,402,500 Yell Finance BV, senior disc. note, zero cpn. to 8/01/06, 13.50% thereafter, 8/01/11 ............................................... United Kingdom 12,325,000 12,294,188 Yell Finance BV, senior note, 10.75%, 8/01/11 ....................... United Kingdom 6,485,000 7,401,006 Young Broadcasting Inc., senior sub. note, 10.00%, 3/01/11 .......... United States 5,000,000 5,300,000 Young Broadcasting Inc., senior sub. note, 8.75%, 1/15/14 ........... United States 17,900,000 17,810,500 -------------- 623,666,919 --------------
4 | Quarterly Statement of Investments Franklin High Income Trust STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------ AGE HIGH INCOME FUND COUNTRY PRINCIPAL AMOUNT(H) VALUE ------------------------------------------------------------------------------------------------------------------------------------ BONDS (CONT.) ELECTRONIC TECHNOLOGY 3.2% Flextronics International Ltd., senior sub. note, 6.50%, 5/15/13 .... Singapore $13,600,000 $ 14,212,000 L-3 Communications Corp., senior sub. note, 6.125%, 1/15/14 ......... United States 26,500,000 27,361,250 L-3 Communications Corp., senior sub. note, 144A, 5.875%, 1/15/15 ............................................................ United States 3,700,000 3,774,000 Sanmina-SCI Corp., sub. note, 144A, 6.75%, 3/01/13 .................. United States 9,600,000 9,684,000 SCG Holding Corp., 144A, zero cpn., 8/04/11 ......................... United States 7,300,000 10,329,500 Solectron Corp., senior note, 9.625%, 2/15/09 ....................... United States 9,100,000 10,032,750 Xerox Corp., senior note, 7.125%, 6/15/10 ........................... United States 8,000,000 8,680,000 Xerox Corp., senior note, 6.875%, 8/15/11 ........................... United States 15,600,000 16,770,000 -------------- 100,843,500 -------------- ENERGY MINERALS 1.9% Arch Western Finance, senior note, 6.75%, 7/01/13 ................... United States 19,100,000 19,959,500 Arch Western Finance, senior note, 144A, 6.75%, 7/01/13 ............. United States 10,900,000 11,390,500 Chesapeake Energy Corp., senior note, 144A, 6.375%, 6/15/15 ......... United States 10,600,000 11,262,500 Peabody Energy Corp., senior note, B, 6.875%, 3/15/13 ............... United States 15,900,000 17,291,250 -------------- 59,903,750 -------------- FINANCE 1.0% AmeriCredit Corp., senior note, 9.25%, 5/01/09 ...................... United States 15,000,000 16,237,500 Western Financial Bank-FSB, sub. deb., 9.625%, 5/15/12 .............. United States 12,400,000 14,074,000 -------------- 30,311,500 -------------- GOVERNMENT BONDS 0.3% Eskom, E168, 11.00%, 6/01/08 ........................................ South Africa 51,800,000 ZAR 9,736,675 -------------- HEALTH SERVICES 5.2% HCA Inc., senior note, 8.75%, 9/01/10 ............................... United States 30,000,000 34,464,690 HealthSouth Corp., senior note, 7.625%, 6/01/12 ..................... United States 27,000,000 27,472,500 Pacificare Health Systems Inc., senior note, 10.75%, 6/01/09 ........ United States 15,792,000 17,844,960 Tenet Healthcare Corp., senior note, 7.375%, 2/01/13 ................ United States 18,000,000 17,145,000 Tenet Healthcare Corp., senior note, 144A, 9.875%, 7/01/14 .......... United States 14,000,000 14,980,000 United Surgical Partners International Inc., senior sub. note, 10.00%, 12/15/11 ................................................... United States 27,000,000 30,375,000 Vanguard Health Holding Co. II LLC, senior sub. note, 9.00%, 10/01/14 ........................................................... United States 17,300,000 19,116,500 -------------- 161,398,650 -------------- INDUSTRIAL SERVICES 3.2% Allied Waste North America Inc., senior note, 7.875%, 4/15/13 ....... United States 21,600,000 22,680,000 Allied Waste North America Inc., senior secured note, 6.50%, 11/15/10 ........................................................... United States 10,000,000 9,925,000 Allied Waste North America Inc., senior secured note, 6.125%, 2/15/14 ............................................................ United States 5,000,000 4,750,000 Hanover Equipment Trust 01, senior secured note, A, 8.50%, 9/01/08 ............................................................ United States 18,000,000 19,215,000 Hanover Equipment Trust 01, senior secured note, B, 8.75%, 9/01/11 ............................................................ United States 12,000,000 13,080,000
Quarterly Statement of Investments | 5 Franklin High Income Trust STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------ AGE HIGH INCOME FUND COUNTRY PRINCIPAL AMOUNT(H) VALUE ------------------------------------------------------------------------------------------------------------------------------------ BONDS (CONT.) INDUSTRIAL SERVICES (CONT.) Pride International Inc., senior note, 7.35%, 7/15/14 ............... United States $20,700,000 $ 23,132,250 (a)Safety Kleen Services, senior sub. note, 9.25%, 6/01/08 ............. United States 10,000,000 5,000 Universal Compression Inc., senior note, 7.25%, 5/15/10 ............. United States 7,100,000 7,561,500 -------------- 100,348,750 -------------- NON-ENERGY MINERALS 2.0% Glencore Funding LLC, 144A, 6.00%, 4/15/14 .......................... United States 21,100,000 20,601,871 Ispat Inland ULC, senior secured note, 9.75%, 4/01/14 ............... United States 18,917,000 23,305,745 Novelis Inc., senior note, 144A, 7.25%, 2/15/15 ..................... Canada 17,600,000 18,304,000 -------------- 62,211,616 -------------- PROCESS INDUSTRIES 11.6% BCP Caylux Holding, senior sub. note, 144A, 9.625%, 6/15/14 ......... United States 22,455,000 26,047,800 Buckeye Technologies Inc., senior note, 8.50%, 10/01/13 ............. United States 11,700,000 12,840,750 Equistar Chemicals LP, senior note, 8.75%, 2/15/09 .................. United States 20,000,000 22,450,000 Equistar Chemicals LP, senior note, 10.625%, 5/01/11 ................ United States 4,400,000 5,104,000 Georgia-Pacific Corp., 7.25%, 6/01/28 ............................... United States 3,000,000 3,367,500 Georgia-Pacific Corp., senior note, 9.375%, 2/01/13 ................. United States 14,800,000 17,186,500 Georgia Pacific Corp., senior note, 8.00%, 1/15/14 .................. United States 8,000,000 9,100,000 Georgia-Pacific Corp., senior note, 8.00%, 1/15/24 .................. United States 15,000,000 18,000,000 Huntsman International Holdings LLC, senior disc. note, zero cpn., 12/31/09 .................................................... United States 5,868,000 3,374,100 Huntsman International LLC, senior sub. note, 144A, 7.375%, 1/01/15 ........................................................... United States 10,000,000 10,675,000 IMC Global Inc., senior note, 10.875%, 8/01/13 ...................... United States 28,000,000 34,300,000 Jefferson Smurfit Corp., senior note, 7.50%, 6/01/13 ................ United States 15,800,000 16,728,250 JSG Funding PLC, senior sub. note, 144A, 7.75%, 4/01/15 ............. Ireland 11,000,000 11,055,000 Lyondell Chemical Co., senior secured note, 10.50%, 6/01/13 ......... United States 17,400,000 20,662,500 MDP Acquisitions PLC, senior note, 9.625%, 10/01/12 ................. Ireland 18,600,000 20,692,500 Nalco Co., senior note, 7.75%, 11/15/11 ............................. United States 2,700,000 2,902,500 Nalco Co., senior sub. note, 8.875%, 11/15/13 ....................... United States 27,200,000 30,192,000 Owens-Brockway Glass Container Inc., senior note, 144A, 6.75%, 12/01/14 .......................................................... United States 6,700,000 6,901,000 Owens-Illinois Inc., senior note, 7.80%, 5/15/18 .................... United States 29,000,000 31,247,500 (a),(b),(c)Pindo Deli Finance Mauritius Ltd., senior note, 11.75%, 10/01/17 .... Singapore 28,800,000 4,257,504 (a)Polysindo International Finance Co. BV, secured note, 9.375%, 7/30/07 ........................................................... Indonesia 27,750,000 2,636,250 Rhodia SA, senior note, 10.25%, 6/01/10 ............................. France 30,000,000 34,650,000 Stone Container Corp., senior note, 8.375%, 7/01/12 ................. United States 15,400,000 16,747,500 (a),(b),(c)Tjiwi Kimia Finance Mauritius, senior note, 10.00%, 8/01/04 ......... Indonesia 11,000,000 2,142,360 -------------- 363,260,514 -------------- PRODUCER MANUFACTURING 6.7% Case New Holland Inc., senior note, 144A, 9.25%, 8/01/11 ............ United States 32,000,000 35,360,000 Cooper Standard Auto, senior note, 144A, 7.00%, 12/15/12 ............ United States 7,500,000 7,425,000 Cooper Standard Auto, senior sub. note, 144A, 8.375%, 12/15/14 ...... United States 17,500,000 16,625,000 Fimep SA, senior note, 10.50%, 2/15/13 .............................. France 20,700,000 24,426,000 (a)Goss Graphic Systems Inc., senior sub. note, 12.25%, 11/19/05 ....... United States 9,053,899 -- HLI Operating Co. Inc., senior sub. note, 10.50%, 6/15/10 ........... United States 16,262,000 16,831,170
6 | Quarterly Statement of Investments Franklin High Income Trust STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------ AGE HIGH INCOME FUND COUNTRY PRINCIPAL AMOUNT(H) VALUE ------------------------------------------------------------------------------------------------------------------------------------ BONDS (CONT.) PRODUCER MANUFACTURING (CONT.) Invensys PLC, senior note, 144A, 9.875%, 3/15/11 .................... United Kingdom $18,000,000 $ 19,530,000 Milacron Escrow Corp., senior secured note, 11.50%, 5/15/11 ......... United States 30,000,000 33,150,000 Nortek Inc., senior sub. note, 8.50%, 9/01/14 ....................... United States 21,000,000 21,525,000 Russel Metals Inc., senior note, 6.375%, 3/01/14 .................... United States 17,000,000 17,255,000 TRW Automotive Inc., senior note, 9.375%, 2/15/13 ................... United States 15,203,000 17,255,405 -------------- 209,382,575 -------------- REAL ESTATE INVESTMENT TRUSTS 2.1% Host Marriott LP, senior note, 7.125%, 11/01/13 ..................... United States 20,000,000 21,350,000 Host Marriott LP, senior note, 144A, 7.00%, 8/15/12 ................. United States 7,100,000 7,490,500 Host Marriott LP, senior note, I, 9.50%, 1/15/07 .................... United States 7,000,000 7,595,000 Meristar Hospitality Corp., senior note, 9.00%, 1/15/08 ............. United States 16,500,000 17,655,000 Meristar Hospitality Corp., senior note, 10.50%, 6/15/09 ............ United States 10,700,000 11,663,000 -------------- 65,753,500 -------------- RETAIL TRADE 1.9% Rite Aid Corp., senior deb., 7.70%, 2/15/27 ......................... United States 10,000,000 8,200,000 Rite Aid Corp., senior note, 144A, 6.125%, 12/15/08 ................. United States 26,900,000 25,555,000 Stater Brothers Holdings, senior note, 8.125%, 6/15/12 .............. United States 25,800,000 26,961,000 -------------- 60,716,000 -------------- TECHNOLOGY SERVICES 0.9% (a)PSINet Inc., senior note, 11.00%, 8/01/09 ........................... United States 18,750,000 11,719 UGS Corp., senior sub. note, 144A, 10.00%, 6/01/12 .................. United States 25,000,000 28,375,000 -------------- 28,386,719 -------------- TRANSPORTATION 1.9% CP Ships Ltd., senior note, 10.375%, 7/15/12 ........................ Canada 20,000,000 23,125,000 Great Lakes Dredge & Dock Corp., senior sub. note, 7.75%, 12/15/13 .......................................................... United States 16,400,000 14,842,000 Laidlaw International Inc., senior note, 10.75%, 6/15/11 ............ United States 19,800,000 22,794,750 -------------- 60,761,750 -------------- UTILITIES 10.1% AES Corp., senior secured note, 144A, 9.00%, 5/15/15 ................ United States 31,700,000 36,494,625 Allegheny Energy Supply Co. LLC, 144A, 8.25%, 4/15/12 ............... United States 35,000,000 40,075,000 Aquila Inc., senior note, 14.875%, 7/01/12 .......................... United States 30,000,000 42,600,000 Calpine Corp., senior secured note, 144A, 8.75%, 7/15/13 ............ United States 48,000,000 38,760,000 Dynegy Holdings Inc., senior note, 8.75%, 2/15/12 ................... United States 19,000,000 19,380,000 Dynegy Holdings Inc., senior secured note, 144A, 10.125%, 7/15/13 ........................................................... United States 20,000,000 22,900,000 El Paso Corp., senior note, 7.75%, 1/15/32 .......................... United States 35,000,000 35,437,500 ESI Tractebel Acquisition Corp., secured note, 7.99%, 12/30/11 ...... United States 6,995,000 7,444,876 Midland Funding II, sub. secured lease obligation, A, 11.75%, 7/23/05 ........................................................... United States 1,548,676 1,596,642 Midland Funding II, sub. secured lease obligation, B, 13.25%, 7/23/06 ........................................................... United States 11,500,000 12,535,943 Midwest Generation LLC, senior secured note, 8.75%, 5/01/34 ......... United States 31,600,000 36,419,000
Quarterly Statement of Investments | 7 Franklin High Income Trust STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------ AGE HIGH INCOME FUND COUNTRY PRINCIPAL AMOUNT(H) VALUE ------------------------------------------------------------------------------------------------------------------------------------ BONDS (CONT.) UTILITIES (CONT.) NRG Energy Inc., senior secured note, 144A, 8.00%, 12/15/13 ......... United States $ 7,418,000 $ 8,233,980 Texas Genco LLC, senior note, 144A, 6.875%, 12/15/14 ................ United States 11,700,000 12,548,250 -------------- 314,425,816 -------------- TOTAL BONDS (COST $2,740,726,472) 2,796,420,527 -------------- ----------------- SHARES/WARRANTS ----------------- COMMON STOCKS AND WARRANTS 2.5% COMMUNICATIONS 1.7% (d)Call-Net Enterprises Inc., B ........................................ Canada 254,140 1,171,586 (d)Dobson Communications Corp. ......................................... United States 1,335,237 3,030,988 (d)ICO Global Communications Holdings Ltd. ............................. United States 2,105,368 4,316,004 (d),(e)International Wireless Communications Holdings Inc. ................. United States 1,759,743 211,169 (d)Nextel Communications Inc., A ....................................... United States 128,674 3,786,876 (d)NII Holdings Inc., B ................................................ United States 223,719 12,801,201 (d)NTL Inc. ............................................................ United Kingdom 25,000 1,622,250 (b),(d)Poland Telecom Finance, wts., 144A, 12/01/07 ........................ Poland 30,000 -- (d)Telewest Global Inc. ................................................ United Kingdom 951,951 15,888,062 (d)USA Mobility Inc. ................................................... United States 212,034 8,320,214 -------------- 51,148,350 -------------- CONSUMER SERVICES 0.0%(g) (d)Jack In the Box Inc. ................................................ United States 24,090 864,831 -------------- ELECTRONIC TECHNOLOGY 0.0%(g) (d)Loral Space & Communications Ltd., wts., 12/27/06 ................... United States 155,654 1,557 (d)Loral Space & Communications Ltd., wts., 1/15/07 .................... United States 35,300 3 -------------- 1,560 -------------- ENERGY MINERALS 0.0%(g) (d)Horizon Natural Resources Co. ....................................... United States 533,333 -- (d)McMoRan Exploration Co. ............................................. United States 25,937 537,933 -------------- 537,933 -------------- HEALTH SERVICES 0.4% (d)Kindred Healthcare Inc. ............................................. United States 72 2,354 (d)Kindred Healthcare Inc., wts., B, 4/20/06 ........................... United States 335,658 10,680,638 -------------- 10,682,992 -------------- INDUSTRIAL SERVICES 0.2% (d)Transocean Inc., wts., 144A, 5/01/09 ................................ United States 11,750 6,427,250 -------------- PRODUCER MANUFACTURING 0.2% (d)Cambridge Industries Liquidating Trust Interest ..................... United States 4,853,892 24,270 (d)Goss Holdings Inc., B ............................................... United States 211,174 -- (d),(e)Harvard Industries Inc. ............................................. United States 793,966 19,849
8 | Quarterly Statement of Investments Franklin High Income Trust STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------ AGE HIGH INCOME FUND COUNTRY SHARES/WARRANTS VALUE ------------------------------------------------------------------------------------------------------------------------------------ COMMON STOCKS AND WARRANTS (CONT.) PRODUCER MANUFACTURING (CONT.) (d),(e)VS Holdings ......................................................... United States 1,685,375 $ -- Walter Industries Inc. .............................................. United States 189,505 7,271,307 -------------- 7,315,426 -------------- TOTAL COMMON STOCKS AND WARRANTS (COST $155,577,892) 76,978,342 -------------- PREFERRED STOCKS 1.0% COMMUNICATIONS 0.0%(g) PTV Inc., 10.00%, pfd., A ........................................... United Kingdom 378 1,210 -------------- HEALTH SERVICES 1.0% Fresenius Medical Care Capital Trust II, 7.875%, 2/01/08, pfd. ...... Germany 30,600 32,818,500 -------------- PROCESS INDUSTRIES 0.0%(g) (a),(b),(c)Asia Pulp & Paper Co. Ltd., 12.00%, pfd., Perpetual ................. Indonesia 24,700,000 173,888 -------------- TOTAL PREFERRED STOCKS (COST $55,292,249) 32,993,598 -------------- CONVERTIBLE PREFERRED STOCKS 1.8% COMMUNICATIONS 0.1% (d)Dobson Communications Corp., 6.00%, cvt. pfd. ....................... United States 28,400 2,357,200 -------------- CONSUMER DURABLES 0.9% Ford Motor Co. Capital Trust II, 6.50%, cvt. pfd. ................... United States 560,000 27,832,000 -------------- UTILITIES 0.8% CMS Energy Trust I, 7.75%, cvt. pfd. ................................ United States 530,000 26,124,601 -------------- TOTAL CONVERTIBLE PREFERRED STOCKS (COST $56,582,961) ............... 56,313,801 -------------- TOTAL LONG TERM INVESTMENTS (COST $3,008,179,574) ................... 2,962,706,268 -------------- SHORT TERM INVESTMENT (COST $95,567,314) 3.1% MONEY FUND (f)Franklin Institutional Fiduciary Trust Money Market Portfolio ....... United States 95,567,314 95,567,314 -------------- TOTAL INVESTMENTS (COST $3,103,746,888) 97.9% ....................... 3,058,273,582 OTHER ASSETS, LESS LIABILITIES 2.1% ................................. 64,527,312 -------------- NET ASSETS 100.0% ................................................... $3,122,800,894 ==============
CURRENCY ABBREVIATIONS: ZAR - South African Rand PORTFOLIO ABBREVIATIONS: PLC - Public Limited Co. (a) Defaulted security. (b) See Note 2 regarding restricted securities. (c) Subject to certain terms and conditions, the Fund has agreed to sell its holdings in Asia Pulp & Paper Co. Ltd. and its subsidiaries in November 2006. (d) Non-income producing. (e) See Note 3 regarding holdings of 5% voting securities. (f) The Franklin Institutional Fiduciary Trust Money Market Portfolio is managed by the Fund's investment manager. (g) Rounds to less than 0.05% of net assets. (h) The principal amount is stated in U.S. dollars unless otherwise indicated. Quarterly Statement of Investments | See Notes to Statement of Investments. | 9 This page intentionally left blank. 10 | Quarterly Statement of Investments Franklin High Income Trust NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) AGE HIGH INCOME FUND Franklin High Income Trust is registered under the Investment Company Act of 1940 as a diversified, open-end investment company, consisting of one Fund, the Franklin AGE High Income Fund (the Fund). 1. INCOME TAXES At February 28, 2005, the net unrealized appreciation (depreciation) based on the cost of investments for income tax purposes were as follows: Costs of investments ........................................ $ 3,105,552,446 =============== Unrealized appreciation ..................................... $ 299,301,910 Unrealized depreciation ..................................... (346,580,774) --------------- Net unrealized appreciation (depreciation) .................. $ (47,278,864) =============== 2. RESTRICTED SECURITIES At February 28, 2005, the Fund held investments in restricted and illiquid securities, as follows:
------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT/ ACQUISITION SHARES/WARRANTS ISSUER DATE COST VALUE ------------------------------------------------------------------------------------------------------------------- 24,700,000 Asia Pulp & Paper Co. Ltd., 12.00%, pfd. Perpetual ......................................... 2/14/97 $24,700,000 $ 173,888 $28,800,000 Pindo Deli Finance Mauritius Ltd., senior note, 11.75%, 10/01/17 ..................... 9/25/97 28,581,120 4,257,504 30,000 Poland Telecom Finance, wts., 144A, 12/1/07 ........................................... 11/24/97 180,000 -- $11,000,000 Tjiwi Kimia Finance Mauritius, senior note, 10.00%, 8/01/04 ................................... 7/29/97 10,940,050 2,142,360 ---------- TOTAL RESTRICTED SECURITIES (0.21% OF NET ASSETS) ............................... $6,573,752 ==========
Quarterly Statement of Investments | 11 Franklin High Income Trust NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED) AGE HIGH INCOME FUND 3. HOLDING OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES Investments in "affiliated companies" for the Fund at February 28, 2005 were as shown below.
----------------------------------------------------------------------------------------------------------------------------------- NUMBER OF NUMBER OF SHARES HELD SHARES HELD VALUE REALIZED AT BEGINNING GROSS GROSS AT END AT END DIVIDEND CAPITAL NAME OF ISSUER OF YEAR ADDITIONS REDUCTIONS OF PERIOD OF PERIOD INCOME GAIN (LOSS) ----------------------------------------------------------------------------------------------------------------------------------- Harvard Industries Inc. ............... 793,966 -- -- 793,966 $ 19,849 $ -- $ -- International Wireless Communications Holdings Inc. ......................... 1,759,743 -- -- 1,759,743 211,169 -- -- VS Holdings ........................... 1,685,375 -- -- 1,685,375 -- -- -- ----------------------------------- TOTAL AFFILIATED SECURITIES (0.01% OF NET ASSETS) ................ $231,018 $ -- $ -- ===================================
For information on the Fund's policy regarding valuation of investments and other significant accounting policies, please refer to the Fund's most recent semiannual or annual shareholder report. 12 | Quarterly Statement of Investments Item 2. Controls and Procedures. (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant's management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio Holdings on Form N-Q, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant's management, including the Registrant's principal executive officer and the Registrant's principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on such evaluation, the Registrant's principal executive officer and principal financial officer concluded that the Registrant's disclosure controls and procedures are effective. (b) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this Quarterly Schedule of Portfolio Holdings on Form N-Q. Item 3. Exhibits. (A) Certification pursuant to Section 30a-2 under the Investment Company Act of 1940 of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and Galen G. Vetter, Chief Financial Officer. 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. (Registrant) FRANKLIN HIGH INCOME TRUST By /s/ Jimmy D. Gambill ------------------------------ Chief Executive Officer - Finance and Administration Date April 25, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ Jimmy D. Gambill ------------------------------ Chief Executive Officer - Finance and Administration Date April 25, 2005 By /s/ Galen G. Vetter ------------------------------ Chief Financial Officer Date April 25, 2005 Exhibit (A) I, Jimmy D. Gambill, certify that: 1. I have reviewed this report on Form N-Q of Franklin High Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. April 25, 2005 /s/JIMMY D. GAMBILL Chief Executive Officer - Finance and Administration I, Galen G. Vetter, certify that: 1. I have reviewed this report on Form N-Q of Franklin High Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. April 25, 2005 /s/GALEN G. VETTER Chief Financial Officer