Investment Commentary and Annual Report to ... - Western Asset

Annual Report to ShareholdersStatement of OperationsFor the Year Ended December 31, 2008Western Asset Premier Bond FundInvestment Income:Interest $ 18,538,100Dividends 1,006,597Total income $ 19,544,697Expenses:Management fees 1,150,363Audit and legal fees 620,127Custodian fees 71,059Trustees’ fees and expenses 21,102Registration fees 24,122Excise tax 167,000Reports to shareholders 85,208Transfer agent and shareholder servicing expense 28,354Other expenses 102,946Preferred shares rating agency fees 35,500Preferred shares auction agent fee expense 183,0862,488,867Less: Compensating balance credits (7,543)Interest expense 311,942Net expenses 2,793,266Net Investment Income 16,751,431Net Realized and Unrealized Gain/(Loss) on Investments:Net realized gain/(loss) on:Investments 1,567,396Futures 74,857Swaps (3,482,717)Foreign currency transactions 20,323Change in unrealized appreciation/(depreciation) of:Investments, swaps and foreign currency translations (62,747,970)Assets and liabilities denominated in foreign currency 62(1,820,141)(62,747,908)Net realized and unrealized loss on investments (64,568,049)Change in net assets resulting from operations (47,816,618)Dividends to Preferred Shareholders from:Net investment income (2,236,599)Net realized gain on investments (238,432)(2,475,031)Change in Net Assets Applicable to Common Shareholders Resulting from Operations $(50,291,649)See notes to financial statements.26