NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
1. SIGNIFICANT ACCOUNTING POLICIES Fort Dearborn Income Securities, Inc. ("the Company") is
registered under the Investment Company Act of 1940, as amended, as a diversified closed-end management
company. The Company invests principally in investment grade long-term fixed income debt securities with the
primary objective of providing its shareholders with:
- a stable stream of current income consistent with external interest rate conditions, and
- a total return over time that is above what they could receive by investing individually in the investment grade
and long-term maturity sectors of the bond market.
The following is a summary of the significant accounting policies followed by the Company in the preparation of
its financial statements. The preparation of financial statements in conformity with generally accepted accounting
principles 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 those estimates.
A. SECURITY VALUATIONS -- Investments are valued based on available quoted bid prices on the valuation
date. Short-term securities are valued at amortized cost which approximates value.
B. INVESTMENT INCOME AND SECURITY TRANSACTIONS -- Interest income is recorded on the
accrual basis. Dividend income is recorded on ex-dividend date. Security transactions are accounted for on the
trade date. The Company has elected to amortize market discount and premium on all issues purchased after
September 30, 1994. Realized gains and losses from security transactions and unrealized appreciation and
depreciation of investments are reported on a first-in first-out basis.
C. FEDERAL INCOME TAXES -- It is the Company's policy to comply with the requirements of the Internal