Fixed Income Shares — Series C, H, M, R Notes to Financial
April 30, 2009 (unaudited)
1. Organization and Significant Accounting Policies (continued)
Realized gain (loss) and change in unrealized appreciation/depreciation is recorded on the
Statements of Operations.
In April 2009, the FASB issued FASB Staff Position No. 157-4. “Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly” (“FSP 157-4”). FSP 157-4 provides additional
guidance for estimating fair value in accordance with SFAS 157, when the volume and level of
activity for the asset or liability have significantly decreased as well as guidance on identifying
circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for fiscal years
and interim periods ending after June 15, 2009. The Portfolios’ management is currently evaluating
the impact the adoption of FSP 157-4 will have on the Portfolios’ financial statements disclosures.
(c) Disclosures about Credit Derivatives
The Portfolios have adopted FASB Staff Positions No. 133-1 and FIN 45-4 “Disclosures about
Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and
FAS Interpretation No. 45; and Clarification of the Effective Date of FASB Statement
No. 161” (“FSP”), which required enhanced transparency of the effect of credit derivatives and
guarantees on an issuer’s financial position, financial performance and cash flows. FSP is
effective for reporting periods after November 15, 2008. FSP applies to certain credit derivatives,
hybrid instruments that have embedded credit derivatives (for example, credit-linked notes), and
certain guarantees and it requires additional disclosures regarding credit derivatives with sold
protection. Portfolios’ management has determined that FSP has no material impact on the
Portfolios’ financial statements.