UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-21539
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
(Exact name of registrant as specified in charter)
1001 Warrenville Road
Suite 300
LISLE, IL 60532
(Address of principal executive offices) (Zip code)
W. Scott Jardine
First Trust Portfolios L.P.
1001 Warrenville Road
Suite 300
LISLE, IL 60532
(Name and address of agent for service)
Registrant's telephone number, including area code: 630-241-4141
Date of fiscal year end: MAY 31, 2005
Date of reporting period: FEBRUARY 28, 2005
Form N-Q is to be used by management investment companies, other than small
business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of
this chapter), to file reports with the Commission, not later than 60 days after
the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under
the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use
the information provided on Form N-Q in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-Q unless the
Form displays a currently valid Office of Management and Budget ("OMB") control
number. Please direct comments concerning the accuracy of the information
collection burden estimate and any suggestions for reducing the burden to the
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington,
DC 20549-0609. The OMB has reviewed this collection of information under the
clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. SCHEDULE OF INVESTMENTS.
The Schedule(s) of Investments is attached herewith.
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 2005 (UNAUDITED)
PRINCIPAL RATINGS + STATED MARKET
VALUE DESCRIPTION O MOODY'S S&P COUPON MATURITY * VALUE
---------- --------------------------------- ------------------ ----------- -------------- --------------
SENIOR FLOATING RATE TERM LOAN INTERESTS ** - 154.5%
AEROSPACE & DEFENSE - 3.2%
AEROSPACE & DEFENSE - 3.2%
$ 4,000,000 Hexcel Corp. .................... B2 B+ 0.38%-6.25% 3/31/12 $ 4,056,668
2,059,977 K&F Industries, Inc. ............ B2 B+ 5.12%-7.00% 11/18/12 2,093,452
2,732,484 MRO Acquisition Corp. ........... B1 B+ 4.92% 8/27/10 2,759,809
3,323,077 Standard Aero Holdings, Inc. .... B2 B+ 5.17%-5.28% 8/24/12 3,368,769
3,100,000 Vought Aircraft Industries, Inc.,
(Letter of Credit) ........... Ba3 B+ 5.02% 12/22/10 3,142,625
--------------
TOTAL AEROSPACE & DEFENSE 15,421,323
--------------
AIR FREIGHT & LOGISTICS - 1.2%
AIR FREIGHT & LOGISTICS - 1.2%
5,977,050 United Air Lines, Inc. (g) ...... NR(a) NR(a) 7.50% 6/30/05 6,026,857
--------------
TOTAL AIR FREIGHT & LOGISTICS 6,026,857
--------------
AUTO COMPONENTS - 1.7%
AUTO PARTS & EQUIPMENT - 1.7%
1,500,000 Environmental Systems Products
Holdings Inc. (d) ............ Caa1 NR(a) 12.56%-12.89% 12/12/10 1,545,000
6,500,000 TRW Automotive Inc. ............. Ba2 BB+ 4.38% 6/30/12 6,525,727
--------------
TOTAL AUTO COMPONENTS 8,070,727
--------------
BEVERAGES - 0.8%
DISTILLERS & VINTNERS - 0.4%
1,883,889 Constellation Brands, Inc. ...... Ba2 BB 4.31%-4.75% 11/30/11 1,910,970
--------------
SOFT DRINKS - 0.4%
2,000,000 Culligan Corp. .................. B1 B+ 5.09% 9/30/11 2,028,334
--------------
TOTAL BEVERAGES 3,939,304
--------------
BUILDING PRODUCTS - 3.4%
BUILDING PRODUCTS - 3.4%
3,226,563 Headwaters Inc. ................. B1 B+ 5.92%-7.75% 4/30/11 3,268,240
5,000,000 Headwaters Inc. (d) ............. B1 B+ 8.17%-10.00% 9/01/12 5,179,165
970,000 NCI Building Systems, Inc. ...... Ba2 BB 4.75% 6/18/10 982,125
5,792,133 PGT Industries, Inc. ............ NR(a) NR(a) 5.71%-5.93% 1/29/10 5,871,775
1,000,000 South Edge, LLC ................. NR(a) NR(a) 4.69% 10/31/09 1,008,125
--------------
TOTAL BUILDING PRODUCTS 16,309,430
--------------
CHEMICALS - 4.8%
DIVERSIFIED CHEMICALS - 4.8%
4,484,754 BCP Crystal US
Holdings Corp. (b) ........... B1 B+ 0.75% 1/26/12 4,552,025
985,000 BCP Crystal US Holdings Corp. ... B1 B+ 5.06%-5.13% 5/17/11 1,003,007
5,000,000 BCP Crystal US Holdings Corp. ... B1 B+ 5.06%-5.13% 4/06/09 5,075,000
1,616,786 BCP Crystal US Holdings Corp. ... B1 B+ 5.06%-5.13% 1/26/12 1,648,869
6,000,000 Brenntag Holding GmbH
& Company KG ................. B1 BB- 5.88% 12/09/11 6,090,000
5,000,000 Rockwood Specialties
Group, Inc. .................. B1 B+ 4.95% 12/10/12 5,078,570
--------------
TOTAL CHEMICALS 23,447,471
--------------
See Notes to Quarterly Portfolio of Investments Page 1
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS - (CONTINUED)
FEBRUARY 28, 2005 (UNAUDITED)
PRINCIPAL RATINGS + STATED MARKET
VALUE DESCRIPTION O MOODY'S S&P COUPON MATURITY * VALUE
---------- --------------------------------- ------------------ ----------- -------------- --------------
SENIOR FLOATING RATE TERM LOAN INTERESTS** - CONTINUED
COMMERCIAL SERVICES & SUPPLIES - 9.3%
DIVERSIFIED COMMERCIAL SERVICES - 2.7%
$ 2,942,857 Allied Security Holdings LLC .... B2 B+ 6.81% 6/30/10 $ 2,987,000
3,000,000 N.E.W. Customer Service
Companies, Inc. .............. NR(a) NR(a) 6.00%-6.25% 8/17/09 3,022,500
3,979,987 SecurityCo, Inc. ................ NR(a) B 6.44% 6/28/10 4,019,788
2,481,250 United Rentals, Inc. ............ Ba3 BB 4.92% 2/14/11 2,521,570
500,000 United Rentals, Inc.,
(Letter of Credit) ........... Ba3 BB 4.65% 2/14/11 508,125
--------------
13,058,983
--------------
ENVIRONMENTAL SERVICES - 2.2%
2,956,522 Duratek, Inc. ................... B1 BB- 5.38%-6.00% 12/16/09 2,952,826
2,000,000 Envirocare of Utah, LLC ......... NR(a) NR(a) 5.79% 1/31/10 2,032,500
331,493 EnviroSolutions Holdings,
Inc. (b) ..................... NR(a) NR(a) 2.00%-7.06% 3/01/09 330,664
5,362,153 EnviroSolutions Holdings, Inc. .. NR(a) NR(a) 7.06% 3/01/09 5,348,748
--------------
10,664,738
--------------
OFFICE SERVICES & SUPPLIES - 4.4%
3,256,555 Infrasource Inc. ................ Ba3 BB- 5.56% 9/30/10 3,272,837
5,952,311 Monitronics International, Inc. . B1 B+ 7.04%-7.09% 8/26/09 6,011,835
5,966,667 Pike Electric, Inc. ............. NR(a) NR(a) 4.88% 7/01/12 6,055,208
4,950,000 Quanta Services Inc. ............ Ba3 BB- 5.51% 6/19/08 5,011,875
1,000,000 TRM Corp. ....................... B2 B+ 6.46% 11/19/10 1,008,750
--------------
21,360,505
--------------
TOTAL COMMERCIAL SERVICES & SUPPLIES 45,084,226
--------------
CONTAINERS & PACKAGING - 4.9%
METAL & GLASS CONTAINERS - 1.9%
868,000 BWAY Corp. ...................... B1 B+ 4.88%-5.00% 6/30/11 880,658
1,250,000 International Mill Service Inc. . B1 B+ 5.17% 12/31/10 1,268,750
4,906,925 Owens-Illinois Group, Inc. ...... B1 BB- 5.53% 4/01/07 4,984,209
2,138,940 Owens-Illinois Group, Inc. ...... B1 BB- 5.37%-5.45% 4/01/08 2,175,440
--------------
9,309,057
--------------
PAPER PACKAGING - 3.0%
4,155,773 Boise Cascade, LLC .............. Ba3 BB 4.94% 10/28/11 4,230,057
4,000,000 Graham Packaging Holdings
Company ...................... B2 B 5.00%-5.13% 10/07/11 4,070,000
6,000,000 Graham Packaging Holdings
Company (d) .................. B3 CCC+ 6.81% 4/07/12 6,184,998
--------------
14,485,055
--------------
TOTAL CONTINERS & PACKAGING 23,794,112
--------------
DIVERSIFIED CONSUMER SERVICES - 0.3%
SPECIALIZED CONSUMER SERVICES - 0.3%
1,662,822 Coinstar, Inc. .................. Ba3 BB- 4.59% 7/01/11 1,687,764
--------------
TOTAL DIVERSIFIED CONSUMER SERVICES 1,687,764
--------------
Page 2 See Notes to Quarterly Portfolio of Investments
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS - (CONTINUED)
FEBRUARY 28, 2005 (UNAUDITED)
PRINCIPAL RATINGS + STATED MARKET
VALUE DESCRIPTION O MOODY'S S&P COUPON MATURITY * VALUE
---------- --------------------------------- ------------------ ----------- -------------- --------------
SENIOR FLOATING RATE TERM LOAN INTERESTS** - CONTINUED
DIVERSIFIED FINANCIAL SERVICES - 1.9%
SPECIALIZED FINANCE - 1.9%
$ 8,882,500 Refco Finance Holdings LLC ...... B1 BB- 5.37% 8/05/11 $ 8,991,311
--------------
TOTAL DIVERSIFIED FINANCIAL SERVICES 8,991,311
--------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 1.7%
INTEGRATED TELECOMMUNICATION SERVICES - 1.7%
8,000,000 NTL Investment Holdings Ltd. .... B1 BB- 5.20% 5/10/12 8,120,000
--------------
TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 8,120,000
--------------
ELECTRIC UTILITIES - 9.3%
ELECTRIC UTILITIES - 9.3%
7,923,697 Allegheny Energy Supply Inc. .... Ba3 BB- 4.76%-5.15% 3/08/11 8,080,190
6,000,000 Astoria Energy LLC .............. Ba3 B+ 6.86%-7.81% 4/16/12 6,120,000
992,500 Cogentrix Delaware
Holdings, Inc. ............... Ba2 BB+ 4.92% 2/25/09 992,500
13,074,478 Midwest Generation, LLC ......... Ba3 B+ 5.47%-5.92% 4/27/11 13,248,800
4,500,000 NRG Energy, Inc. ................ Ba3 BB 4.52% 12/24/11 4,556,250
3,500,000 NRG Energy, Inc.,
(Letter of Credit) ........... Ba3 BB 4.33% 12/24/11 3,543,750
2,177,077 Riverside Energy Center, LLC .... Ba3 BB- 6.98% 6/24/11 2,220,618
1,546,605 Rocky Mountain Energy
Center, LLC .................. Ba3 BB- 6.98% 6/24/11 1,577,537
169,917 Rocky Mountain Energy Center,
LLC, (Letter of Credit) ...... Ba3 BB- 6.98% 6/24/11 173,315
1,000,000 Texas Genco, LLC (b) ............ Ba2 BB 4.48% 12/14/11 1,015,694
3,500,000 Tucson Electric Power Company ... Ba2 BB+ 4.80% 6/30/09 3,529,166
--------------
TOTAL ELECTRIC UTILITIES 45,057,820
--------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.0%
ELECTRONIC EQUIPMENT MANUFACTURERS - 0.4%
1,990,000 VeriFone, Inc. .................. B1 B+ 5.23% 6/30/11 2,014,875
--------------
ELECTRONIC MANUFACTURING SERVICES - 0.6%
2,777,266 Cinram International Inc. ....... Ba3 BB 5.40% 9/30/09 2,832,812
--------------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 4,847,687
--------------
ENERGY EQUIPMENT & SERVICES - 2.1%
OIL & GAS EQUIPMENT & SERVICES - 2.1%
3,000,000 Complete Energy Services, Inc. .. NR NR 6.00% 2/08/12 3,022,500
7,000,000 Ferrell Companies, Inc. ......... NR NR 6.09%-8.00% 12/17/11 7,105,000
--------------
TOTAL ENERGY EQUIPMENT & SERVICES 10,127,500
--------------
FOOD & STAPLES RETAILING - 3.3%
DRUG RETAIL - 1.9%
8,955,000 The Jean Coutu Group (PJC) Inc. . Ba3 BB- 5.00% 7/30/11 9,111,713
--------------
FOOD DISTRIBUTORS - 1.4%
2,000,000 Dean Foods Company .............. Ba1 BBB- 3.81% 8/13/09 2,015,000
1,985,000 Golden State Foods Corp. ........ NR(a) NR(a) 5.23% 2/25/11 2,017,256
3,000,000 Nash Finch Company .............. B1 B+ 4.88% 11/12/10 3,037,500
--------------
7,069,756
--------------
TOTAL FOOD & STAPLES RETAILING 16,181,469
--------------
See Notes to Quarterly Portfolio of Investments Page 3
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS - (CONTINUED)
FEBRUARY 28, 2005 (UNAUDITED)
PRINCIPAL RATINGS + STATED MARKET
VALUE DESCRIPTION O MOODY'S S&P COUPON MATURITY * VALUE
---------- --------------------------------- ------------------ ----------- -------------- --------------
SENIOR FLOATING RATE TERM LOAN INTERESTS** - CONTINUED
FOOD PRODUCTS - 6.8%
AGRICULTURAL PRODUCTS - 1.5%
$ 7,000,000 Dole Food Company, Inc. (d) ..... B3 B 8.00% 7/22/10 $ 7,183,750
--------------
PACKAGED FOODS & MEATS - 5.3%
1,005,000 Atkins Nutritionals Inc. (d) .... NR(a) NR(a) 14.25% 11/26/09 639,850
9,344,982 Keystone Foods Holdings LLC ..... NR(a) NR(a) 4.44%-4.88% 6/16/11 9,420,911
3,400,493 Nellson Nutraceutical Inc. ...... NR(a) NR(a) 9.50% 10/04/09 3,374,989
8,985,000 OSI Group, LLC .................. NR(a) NR(a) 4.81% 9/02/11 9,104,797
3,000,000 THL Food Products Company (e) ... B2 B- 6.59% 11/21/11 3,082,500
--------------
25,623,047
--------------
TOTAL FOOD PRODUCTS 32,806,797
--------------
HEALTH CARE EQUIPMENT & SUPPLIES - 1.6%
HEALTH CARE SUPPLIES - 1.6%
4,655,821 Advanced Medical Optics, Inc. ... B1 BB- 4.59% 6/25/09 4,699,469
3,000,000 HealthCare Partners, LLC ........ B1 BB 6.50% 2/28/11 3,041,250
--------------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 7,740,719
--------------
HEALTH CARE PROVIDERS & SERVICES - 12.8%
HEALTH CARE FACILITIES - 0.6%
3,000,000 Select Medical Corp. ............ B1 BB- 4.63% 1/26/12 3,033,750
--------------
HEALTH CARE SERVICES - 9.5%
4,239,375 Ardent Health Services, Inc. .... B1 B+ 4.80% 8/12/11 4,289,718
9,975,000 CHS/Community Health
Systems, Inc. ................ Ba3 BB- 4.42%-4.64% 8/19/11 10,082,541
3,478,041 Connecticare Capital LLC ........ B1 NR 8.25% 10/30/09 3,478,040
997,500 DaVita Inc. ..................... Ba2 BB 4.39%-4.62% 6/30/10 999,495
4,000,000 Diagnostic Imaging Holdings, Inc. B2 B+ 6.18% 12/31/10 4,030,000
1,500,000 Sheridan Healthcare, Inc. (d) ... B2 B- 10.29% 5/09/11 1,545,000
3,000,000 Spheris Holding Inc. ............ B2 B+ 6.59% 11/05/10 3,000,000
4,742,500 Team Health, Inc. ............... B1 B+ 5.81% 3/23/11 4,754,356
8,517,820 US Oncology Holdings, Inc. ...... Ba3 B+ 4.88%-5.63% 8/20/11 8,624,292
5,080,100 VWR International, Inc. ......... B2 B+ 5.17% 4/07/11 5,165,192
--------------
45,968,634
--------------
MANAGED HEALTH CARE - 2.7%
3,668,026 Genesis Healthcare Corp. ........ Ba3 BB- 6.75% 12/01/10 3,668,026
4,472,513 IASIS Healthcare Corp. .......... B1 B+ 4.81% 6/22/11 4,534,010
2,985,000 Medcath Holdings Corp. .......... B2 B+ 5.11%-6.75% 6/30/11 3,022,312
1,995,000 Vanguard Health Systems, Inc. ... B2 B 5.79% 9/23/11 2,031,784
--------------
13,256,132
--------------
TOTAL HEALTH CARE PROVIDERS & SERVICES 62,258,516
--------------
Page 4 See Notes to Quarterly Portfolio of Investments
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS - (CONTINUED)
FEBRUARY 28, 2005 (UNAUDITED)
PRINCIPAL RATINGS + STATED MARKET
VALUE DESCRIPTION O MOODY'S S&P COUPON MATURITY * VALUE
---------- --------------------------------- ------------------ ----------- -------------- --------------
SENIOR FLOATING RATE TERM LOAN INTERESTS** - CONTINUED
HOTELS, RESTAURANTS & LEISURE - 7.6%
CASINOS & GAMING - 5.1%
$ 5,970,000 Boyd Gaming Corp. ............... Ba2 BB 3.92%-4.53% 6/30/11 $ 6,044,625
4,677,885 Global Cash Access, Inc. ........ B2 B+ 5.42% 3/10/10 4,701,274
8,000,000 Marina District Finance
Company, Inc. ................ NR NR 3.93% 10/20/11 8,076,664
2,000,000 Pinnacle Entertainment, Inc. (b) B1 BB- 1.00% 8/27/10 1,997,500
2,000,000 Seminole Tribe of Florida ....... NR(a) NR(a) 4.88% 9/30/11 2,015,000
2,000,000 Wynn Las Vegas, LLC (b) ......... B2 B+ 1.00%-4.81% 12/14/11 2,031,250
--------------
24,866,313
--------------
HOTELS, RESORTS & CRUISE LINES - 1.4%
1,000,000 CNL Hospitality Partners, LP .... NR(a) NR(a) 5.09% 10/13/06 1,018,750
6,000,000 OpBiz, LLC ...................... B3 B- 5.56%-6.56% 8/31/10 5,953,128
--------------
6,971,878
--------------
LEISURE FACILITIES - 1.1%
4,987,500 American Skiing Company ......... NR NR 7.20%-7.29% 11/24/10 5,031,141
--------------
TOTAL HOTELS, RESTAURANTS & LEISURE 36,869,332
--------------
HOUSEHOLD DURABLES - 4.7%
HOME FURNISHINGS - 1.0%
2,000,000 Associated Materials Inc. ....... B2 B+ 5.00%-5.17% 8/29/10 2,027,500
3,000,000 Atrium Companies, Inc. .......... B1 B 5.20%-5.30% 12/28/11 3,039,999
--------------
5,067,499
--------------
HOMEBUILDING - 1.9%
1,723,333 Lake at Las Vegas Joint Venture . B1 B+ 5.17%-5.28% 11/01/09 1,747,029
7,069,167 Lake at Las Vegas
Joint Venture (d) ............ B2 B- 8.06% 11/01/10 7,204,662
--------------
8,951,691
--------------
HOUSEWARES & SPECIALTIES - 1.8%
4,365,000 Jostens IH Corp. ................ B1 B+ 4.81% 10/04/11 4,428,655
216,325 Prestige Brands, Inc. ........... B1 B 5.18%-6.75% 4/06/12 219,209
3,970,000 Prestige Brands, Inc. ........... B1 B 5.38%-6.75% 4/06/11 4,022,932
--------------
8,670,796
--------------
TOTAL HOUSEHOLD DURABLES 22,689,986
--------------
INDUSTRIAL CONGLOMERATES- 1.2%
INDUSTRIAL CONGLOMERATES - 1.2%
3,000,000 Goodman Global Holdings, Inc. ... B2 B+ 4.81% 12/23/11 3,048,750
2,985,000 Roller Bearing Corp. ............ NR(a) NR(a) 6.39%-8.00% 12/17/10 2,985,000
--------------
TOTAL INDUSTRIAL CONGLOMERATES 6,033,750
--------------
INSURANCE - 1.8%
LIFE & HEALTH INSURANCE - 1.8%
7,699,248 Conseco, Inc. ................... B2 BB- 6.17% 6/22/10 7,833,985
1,000,000 Pacificare Health Systems, Inc. . Ba2 BBB- 4.06%-4.25% 12/13/10 1,006,875
--------------
TOTAL INSURANCE 8,840,860
--------------
See Notes to Quarterly Portfolio of Investments Page 5
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS - (CONTINUED)
FEBRUARY 28, 2005 (UNAUDITED)
PRINCIPAL RATINGS + STATED MARKET
VALUE DESCRIPTION O MOODY'S S&P COUPON MATURITY * VALUE
---------- --------------------------------- ------------------ ----------- -------------- --------------
SENIOR FLOATING RATE TERM LOAN INTERESTS** - CONTINUED
IT SERVICES - 4.9%
IT CONSULTING & OTHER SERVICES - 4.9%
$ 2,154,600 Alion Science and Technology
Corp. ........................ B1 B+ 4.92%-5.22% 8/02/09 $ 2,165,373
7,000,000 DynCorp International LLC ....... B2 B+ 7.25% 2/11/11 7,102,081
7,141,093 The Titan Corp. ................. Ba3 BB- 5.37%-7.00% 6/30/09 7,228,129
5,000,000 The Titan Corp.,
(Revolving Credit) (b) ....... Ba3 BB- 1.00%-5.42% 5/23/10 4,975,000
2,125,000 Wyle Laboratories, Inc. (d) ..... NR(a) B- 9.25% 7/28/11 2,170,156
--------------
TOTAL IT SERVICES 23,640,739
--------------
LEISURE EQUIPMENT & PRODUCTS - 0.8%
LEISURE PRODUCTS - 0.8%
4,000,000 Brooklyn Basketball, LLC (e) .... NR NR 6.13% 6/16/08 3,990,000
--------------
TOTAL LEISURE EQUIPMENT & PRODUCTS 3,990,000
--------------
MACHINERY - 2.1%
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS - 0.8%
4,007,500 Ashtead Group PLC ............... B1 BB- 5.06% 11/12/09 4,064,274
--------------
INDUSTRIAL MACHINERY - 1.3%
5,931,472 Invensys International
Holdings Ltd. ................ Ba3 B+ 6.09% 9/05/09 6,027,858
--------------
TOTAL MACHINERY 10,092,132
--------------
MEDIA - 30.9%
ADVERTISING - 1.3%
5,970,000 Adams Outdoor Advertising, LP ... B1 B+ 4.92% 10/15/11 6,062,039
--------------
BROADCASTING & CABLE TV - 14.7%
3,980,000 Bragg Communications, Inc. ...... NR(a) NR 5.39% 8/31/11 4,039,700
3,000,000 Cablecom GmbH ................... NR(a) NR(a) 5.74% 4/15/12 3,022,500
3,000,000 Cablecom GmbH ................... NR(a) NR(a) 6.09% 4/15/13 3,022,500
13,380,000 Century Cable Holdings, LLC ..... NR NR 7.50% 6/30/09 13,301,152
11,000,000 Charter Communications
Operating, LLC ............... B2 B 5.73% 9/18/07 10,971,642
3,000,000 Mediacom Illinois, LLC,
(Revolving Credit) (b) ....... Ba3 BB- 0.50%-5.75% 10/12/12 2,865,000
3,266,667 MMC Georgia LLC,
(Revolving Credit) (b) ....... Ba3 BB- 0.50%-6.00% 3/31/10 3,144,167
2,997,500 NEP Supershooters, L.P. ......... B1 B 6.29% 2/03/11 3,051,830
6,008,886 PanAmSat Corp. .................. B1 BB+ 5.34% 8/20/11 6,100,173
4,500,000 Rainbow Media Holdings LLC ...... B1 B+ 5.69% 3/31/12 4,552,501
6,500,000 Raycom Media, Inc. .............. NR NR 4.56% 4/06/12 6,573,125
3,000,000 Raycom Media, Inc. .............. NR NR 4.38% 10/06/11 3,003,750
3,731,250 Salem Communications
Holding Corp. ................ NR NR 4.13% 3/31/10 3,768,562
4,000,000 UPC Distribution Holding B.V. ... B1 B 5.98% 12/31/11 4,048,572
--------------
71,465,174
--------------
Page 6 See Notes to Quarterly Portfolio of Investments
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS - (CONTINUED)
FEBRUARY 28, 2005 (UNAUDITED)
PRINCIPAL RATINGS + STATED MARKET
VALUE DESCRIPTION O MOODY'S S&P COUPON MATURITY * VALUE
---------- --------------------------------- ------------------ ----------- -------------- --------------
SENIOR FLOATING RATE TERM LOAN INTERESTS** - CONTINUED
MEDIA - (CONTINUED)
MOVIES & ENTERTAINMENT - 5.0%
$ 6,982,500 Loews Cineplex
Entertainment Corp. .......... B1 B 4.81%-5.00% 6/30/11 $ 7,091,601
5,985,000 Metro-Goldwyn-Mayer
Studios Inc. ................. NR(a) NR(a) 5.06% 4/30/11 5,983,133
3,849,395 Regal Cinemas Corp. ............. Ba3 BB- 4.56% 11/10/10 3,902,325
6,942,406 WMG Acquisition Corp. ........... B1 B+ 4.72%-5.37% 3/01/11 7,046,542
--------------
24,023,601
--------------
PUBLISHING - 9.9%
1,000,000 Advertising Directory
Solutions, Inc. .............. B3 B- 4.72% 11/09/11 1,013,125
4,000,000 Advertising Directory
Solutions, Inc. (d) .......... B3 B- 6.47% 5/09/12 4,110,000
6,000,000 CBD Media, LLC .................. B1 NR 5.09% 12/31/09 6,075,000
5,250,000 Freedom Communications, Inc. .... Ba3 BB 4.15%-4.59% 5/18/12 5,326,125
1,990,000 Herald Media, Inc. .............. NR(a) NR(a) 5.03% 6/29/11 2,022,338
2,000,000 Media News Group, Inc. .......... NR NR 4.17% 12/30/10 2,010,000
4,000,000 Newspaper Holdings, Inc. ........ NR NR 4.31% 8/24/11 3,995,000
1,990,000 Nexstar Broadcasting, Inc. ...... Ba3 B+ 4.31% 12/31/10 1,996,732
7,861,641 RH Donnelley Inc. ............... Ba3 BB 4.19%-4.36% 6/30/11 7,973,315
7,239,685 Transwestern Publishing
Company ...................... B1 B+ 3.94%-4.94% 2/25/11 7,257,784
6,201,292 Transwestern Publishing
Company (d) .................. B3 B- 6.67%-7.17% 2/25/12 6,258,139
--------------
48,037,558
--------------
TOTAL MEDIA 149,588,372
--------------
METALS & MINING - 2.3%
ALUMINUM - 1.7%
8,000,000 Novelis Corp. ................... Ba2 BB- 4.50% 1/07/12 8,119,000
--------------
DIVERSIFIED METALS & MINING - 0.6%
3,000,000 Murray Energy Corp. and
Coal Resoruces, Inc. ......... NR(a) NR(a) 5.94% 1/28/10 3,037,500
--------------
TOTAL METALS & MINING 11,156,500
--------------
MULTILINE RETAIL - 1.2%
GENERAL MERCHANDISE STORES - 1.2%
5,597,602 Savers, Inc. .................... NR(a) NR(a) 6.73%-6.81% 8/04/09 5,632,587
--------------
TOTAL MULTILINE RETAIL 5,632,587
--------------
OIL & GAS - 4.6%
OIL & GAS EXPLORATION & PRODUCTION - 1.7%
2,000,000 Mainline L.P. ................... Ba3 NR(a) 4.90% 12/01/11 2,027,500
3,611,429 Plains Resources Inc. ........... B1 BB 4.59% 7/23/10 3,654,314
2,500,000 SemCrude, L.P. .................. Ba3 NR 6.50% 1/02/11 2,532,813
--------------
8,214,627
--------------
See Notes to Quarterly Portfolio of Investments Page 7
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS - (CONTINUED)
FEBRUARY 28, 2005 (UNAUDITED)
PRINCIPAL RATINGS + STATED MARKET
VALUE DESCRIPTION O MOODY'S S&P COUPON MATURITY * VALUE
---------- --------------------------------- ------------------ ----------- -------------- --------------
SENIOR FLOATING RATE TERM LOAN INTERESTS** - CONTINUED
OIL & GAS - (CONTINUED)
OIL & GAS REFINING, MARKETING & TRANSPORTATION - 2.9%
$ 1,000,000 Alon USA, Inc. .................. B2 B 10.00% 12/16/08 $ 1,020,000
8,982,775 El Paso Corp., (Letter of Credit) B3 B- 5.15% 11/23/09 9,121,729
3,000,000 Hawkeye Renewables, LLC ......... B2 B 6.01% 1/31/12 3,015,000
1,000,000 Regency Gas Service LLC ......... B1 B+ 5.31%-5.53% 6/01/10 1,017,500
--------------
14,174,229
--------------
TOTAL OIL & GAS 22,388,856
--------------
PAPER & FOREST PRODUCTS - 1.6%
FOREST PRODUCTS - 1.2%
4,000,000 Georgia-Pacific Corp. ........... Ba3 BB+ 3.55%-3.89% 7/02/09 4,003,332
1,573,428 Koch Cellulose, LLC ............. B1 BB 4.55% 5/07/11 1,597,029
395,773 Koch Cellulose, LLC,
(Letter of Credit) ........... B1 BB 4.59% 5/07/11 401,710
--------------
6,002,071
--------------
PAPER PRODUCTS - 0.4%
1,954,963 Solo Cup Company ................ B1 B+ 5.05%-5.09% 2/27/11 1,996,139
--------------
TOTAL PAPER & FOREST PRODUCTS 7,998,210
--------------
PHARMACEUTICALS - 4.0%
PHARMACEUTICALS - 4.0%
8,959,987 Accredo Health, Inc. ............ Ba2 BB 4.42% 6/30/11 8,976,787
10,602,524 Warner Chilcott Corp. ........... B2 B 5.34% 1/18/12 10,689,995
--------------
TOTAL PHARMACEUTICALS 19,666,782
--------------
REAL ESTATE - 5.6%
REAL ESTATE MANAGEMENT & DEVELOPMENT - 5.6%
1,943,318 CB Richard Ellis Services, Inc. . B1 B+ 4.06%-6.50% 3/31/10 1,955,464
7,978,379 General Growth Properties, Inc. . Ba2 BB+ 4.84% 11/12/07 8,048,189
3,000,000 General Growth Properties, Inc. . Ba2 BB+ 4.84% 11/12/08 3,045,681
7,000,000 LNR Property Corp. .............. B2 B+ 5.59% 2/03/08 7,099,169
7,000,000 LNR Property Corp.,
(Mezzanine Debt) (f) ......... NR NR 7.09% 2/03/08 7,052,500
--------------
TOTAL REAL ESTATE 27,201,003
--------------
SEMICONDUCTORS &
SEMICONDUCTOR EQUIPMENT - 1.4%
SEMICONDUCTORS - 1.4%
4,000,000 Memec Group Holdings Ltd. (d) ... B2 B 10.50% 5/05/10 4,010,000
3,000,000 Memec Group Holdings Ltd. ....... B1 BB- 5.06% 5/05/09 2,979,000
--------------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 6,989,000
--------------
SPECIALTY RETAIL - 3.6%
SPECIALTY STORES - 3.6%
2,000,000 Dollarama Group L.P. ............ NR(a) NR(a) 5.02% 11/18/11 2,028,750
1,000,000 Eye Care Centers of
America, Inc. ................ B2 B 7.50% 1/27/12 1,016,250
Page 8 See Notes to Quarterly Portfolio of Investments
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS - (CONTINUED)
FEBRUARY 28, 2005 (UNAUDITED)
PRINCIPAL RATINGS + STATED MARKET
VALUE DESCRIPTION O MOODY'S S&P COUPON MATURITY * VALUE
---------- --------------------------------- ------------------ ----------- -------------- --------------
SENIOR FLOATING RATE TERM LOAN INTERESTS** - CONTINUED
SPECIALTY RETAIL - (CONTINUED)
SPECIALTY STORES - (CONTINUED)
$ 11,471,250 Harbor Freight Tools USA, Inc. .. NR(a) NR(a) 4.75%-4.91% 7/15/10 $ 11,534,342
3,000,000 TravelCenters of America, Inc. .. Ba3 BB 4.15%-4.38% 12/01/11 3,022,500
--------------
TOTAL SPECIALTY RETAIL 17,601,842
--------------
TRANSPORTATION INFRASTRUCTURE - 2.4%
MARINE PORTS & SERVICES - 2.4%
7,960,000 Horizon Lines Holding LLC ....... B2 B+ 5.39% 7/07/11 8,039,600
3,500,000 Sirva Worldwide, Inc. ........... Ba3 BB 4.67% 12/08/10 3,438,750
--------------
TOTAL TRANSPORTATION INFRASTRUCTURE 11,478,350
--------------
WIRELESS TELECOMMUNICATIONS SERVICES- 3.7%
WIRELESS TELECOMMUNICATION SERVICES - 3.7%
4,000,000 AAT Communications Corp. ........ B1 B- 5.25%-5.26% 1/16/12 4,062,500
7,960,000 American Tower, L.P. ............ Ba3 B 4.19%-4.23% 8/31/11 8,058,258
5,000,000 Nextel Partners, Inc. ........... Ba3 B+ 4.94% 5/31/11 5,060,715
1,000,000 Spectrasite Communications, Inc. Ba3 BB- 4.03% 5/19/12 1,009,167
--------------
TOTAL WIRELESS TELECOMMUNICATIONS SERVICES 18,190,640
--------------
TOTAL SENIOR FLOATING RATE TERM LOAN INTERESTS .................................. 749,961,974
--------------
(Cost $728,065,174)
SENIOR FLOATING RATE NOTES ** - 3.8%
CONTAINERS & PACKAGING - 0.1%
PAPER PACKAGING - 0.1%
500,000 Constar International Inc.(e) ... B2 B 6.38% 2/15/12 507,500
--------------
TOTAL CONTAINERS & PACKAGING 507,500
--------------
HOUSEHOLD DURABLES - 0.6%
HOMEBUILDING - 0.6%
3,000,000 Builders Firstsource, Inc.(e) ... NR(a) NR(a) 7.02% 2/15/12 3,003,750
--------------
TOTAL HOUSEHOLD DURABLES 3,003,750
--------------
MEDIA - 3.0%
BROADCASTING & CABLE TV - 1.9%
3,000,000 Intelsat, Ltd.(e) ............... B2 B+ 7.79% 1/15/12 3,082,500
6,000,000 Paxson Communications Corp. ..... B1 B 5.41% 1/15/10 6,090,000
--------------
9,172,500
--------------
MOVIES & ENTERTAINMENT - 1.1%
5,500,000 WMG Acquisition Corp.(e) ........ B1 B+ 6.91% 12/16/11 5,527,500
--------------
TOTAL MEDIA 14,700,000
--------------
WIRELESS TELECOMMUNICATION SERVICES - 0.1%
WIRELESS TELECOMMUNICATION SERVICES - 0.1%
500,000 New Skies Satellites B.V.(e) .... B1 B+ 7.84% 10/21/11 510,000
--------------
TOTAL WIRELESS TELECOMMUNICATION SERVICES 510,000
--------------
TOTAL SENIOR FLOATING RATE NOTES ................................................ 18,721,250
--------------
(Cost $18,628,943)
See Notes to Quarterly Portfolio of Investments Page 9
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
PORTFOLIO OF INVESTMENTS - (CONTINUED)
FEBRUARY 28, 2005 (UNAUDITED)
PRINCIPAL MARKET
VALUE DESCRIPTION O VALUE
---------- --------------------------------- --------------
REPURCHASE AGREEMENT - 2.7%
(Cost $13,000,000)
$ 13,000,000 Agreement with Wachovia Capital Markets, LLC, 2.51%
dated 2/28/05, to be repurchased at $13,000,906 on 3/01/05,
collateralized by $12,880,000
Federal Home Loan Bank, 6.00% due 9/03/24 (Value $13,635,665) ................ $ 13,000,000
--------------
UNFUNDED LOAN COMMITMENTS - (3.7)% .............................................. (17,952,015)
--------------
TOTAL INVESTMENTS - 157.3% ...................................................... 763,731,209
(Cost $759,694,117) (c)
NET OTHER ASSETS AND LIABILITIES - (11.6)% ...................................... (56,313,294)
--------------
LOAN OUTSTANDING - (25.1)% ...................................................... (122,000,000)
--------------
PREFERRED SHARES, AT LIQUIDATION VALUE - (20.6)% ................................ (100,000,000)
--------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS - 100.0% ........................... $ 485,417,915
==============
-------------------------------------------------------------------
o All percentages shown in the Portfolio of Investments are based on
net assets applicable to Common Shareholders.
(a) This Senior Loan Interest was
privately rated upon issuance. The rating agency does not provide ongoing
surveillance on the rating.
(b) All or a portion of this issue is designated in connection with
unfunded loan commitments.
(c) Aggregate cost for federal tax purposes.
(d) This issue is secured by a second lien on the issuer's assets. The
second lien security interest is subordinated to other debt holders.
(e) This issue is unsecured.
(f) This issue's security interest is subordinated to other debt holders.
(g) This borrower has filed for protection in a federal bankruptcy court.
+ Ratings below Baa3 by Moody's Investors Service, Inc. or BBB- by
Standard & Poor's Ratings Group are considered to be below investment grade.
NR Not Rated
* Senior Loans in the Fund's portfolio generally are subject to
mandatory and/or optional prepayment. Because of the mandatory prepayment
conditions and because there may be significant economic incentives for a
Borrower to prepay, prepayments of Senior Loans in the Fund's portfolio may
occur. As a result, the actual remaining maturity of Senior Loans held in the
Fund's portfolio might be substantially less than the stated maturities shown in
the listing of the Portfolio of Investments. Although the Fund is unable to
accurately estimate the actual remaining maturity of individual Senior Loans,
the Fund estimates that the actual average maturity of the Senior Loans held in
its portfolio will be approximately 18-30 months.
** Senior Loans may be considered to be restricted in that the Fund
ordinarily is contractually obligated to receive approval from the Agent Bank
and/or Borrower prior to the disposition of a Senior Loan.
Page 10 See Notes to Quarterly Portfolio of Investments
--------------------------------------------------------------------------------
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS (UNAUDITED)
--------------------------------------------------------------------------------
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
FEBRUARY 28, 2005
1. VALUATION AND INVESTMENT PRACTICES
PORTFOLIO VALUATION:
The net asset value ("NAV") of the Common Shares of the Fund is computed based
upon the value of the Fund's portfolio and other assets. The NAV is determined
as of the close of regular trading on the New York Stock Exchange ("NYSE"),
normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading.
Domestic debt securities and foreign securities are priced using data reflecting
the earlier closing of the principal markets for those securities. The Fund
calculates NAV per Common Share by subtracting the Fund's liabilities and the
liquidation value of any outstanding Preferred Shares from the Fund's Managed
Assets and dividing the result by the total number of Common Shares outstanding.
The Fund's investments are valued daily at market value, or in the absence of
market value with respect to any portfolio securities, at fair value according
to procedures adopted by the Fund's Board of Trustees. A majority of the Fund's
assets are valued using market information supplied by third parties. In the
event that market quotations are not readily available, the pricing service does
not provide a valuation for a particular asset, or the valuations are deemed
unreliable, or if events occurring after the close of the principal markets for
particular securities (e.g., domestic debt and foreign securities), but before
the Fund values its assets, would materially affect NAV, First Trust Advisors
L.P. ("First Trust") may use a fair value method to value the Fund's securities
and investments. The use of fair value pricing by the Fund is governed by
valuation procedures adopted by the Fund's Board of Trustees, and in accordance
with the provisions of the 1940 Act.
Portfolio securities listed on any exchange other than the NASDAQ National
Market ("NASDAQ") are valued at the last sale price on the business day as of
which such value is being determined. If there has been no sale on such day, the
securities are valued at the mean of the most recent bid and asked prices on
such day. Securities traded on the NASDAQ are valued at the NASDAQ Official
Closing Price as determined by NASDAQ. Portfolio securities traded on more than
one securities exchange are valued at the last sale price on the business day as
of which such value is being determined at the close of the exchange
representing the principal market for such securities. Portfolio securities
traded in the over-the-counter market, but excluding securities traded on the
NASDAQ, are valued at the closing bid prices. Short-term investments that mature
in 60 days or less are valued at amortized cost.
The (Senior Floating Rate Term Loan Interests) ("Senior Loans") in which the
Fund invests are not listed on any securities exchange or board of trade. Senior
Loans are typically bought and sold by institutional investors in individually
negotiated private transactions that function in many respects like an
over-the-counter secondary market, although typically no formal market-makers
exist. This market, while having grown substantially in the past several years,
generally has fewer trades and less liquidity than the secondary market for
other types of securities. Some Senior Loans have few or no trades, or trade
infrequently, and information regarding a specific Senior Loan may not be widely
available or may be incomplete. Accordingly, determinations of the market value
of Senior Loans may be based on infrequent and dated information. Because there
is less reliable, objective data available, elements of judgment may play a
greater role in valuation of Senior Loans than for other types of securities.
Typically Senior Loans are valued using information provided by an independent
third party pricing service. If the pricing service cannot or does not provide a
valuation for a particular Senior Loan or such valuation is deemed unreliable,
First Trust may value such Senior Loan at a fair value as determined in
accordance with procedures adopted by the Fund's Board of Trustees.
REPURCHASE AGREEMENT:
The Fund engages in repurchase agreement transactions. Under the terms of a
typical repurchase agreement, the Fund takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and the Fund to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield during the Fund's holding period. This arrangement results in a fixed rate
of return that is not subject to market fluctuations during the Fund's holding
period. The value of the collateral is at all times at least equal to the total
amount of the repurchase obligations, including interest. In the event of
counterparty default, the Fund has the right to use the collateral to offset
losses incurred. There is potential loss to the Fund in the event the Fund is
delayed or prevented from exercising its rights to dispose of the collateral
securities, including the risk of a possible decline in the value of the
underlying securities during the period while the Fund seeks to assert its
rights. The Fund reviews the value of the collateral and the creditworthiness of
those banks and dealers with which the Fund enters into repurchase agreements to
evaluate potential risks.
Page 11
--------------------------------------------------------------------------------
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS - (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
FEBRUARY 28, 2005
SECURITIES TRANSACTIONS:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
UNFUNDED LOAN COMMITMENTS:
The Fund may enter into certain credit agreements, all or a portion of which may
be unfunded. The Fund is obligated to fund these loan commitments at the
borrower's discretion. These commitments are disclosed in the accompanying
Portfolio of Investments.
2. UNREALIZED APPRECIATION/(DEPRECIATION)
As of February 28, 2005, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was $5,061,700
and the aggregate gross unrealized depreciation for all securities in which
there was an excess of tax cost over value was $1,024,608.
Page 12
ITEM 2. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial
officers, or persons performing similar functions, have concluded
that the registrant's disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940, as
amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of
a date within 90 days of the filing date of the report that includes
the disclosure required by this paragraph, based on their evaluation
of these controls and procedures required by Rule 30a-3(b) under the
1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b)
under the Securities Exchange Act of 1934, as amended (17 CFR
240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's last
fiscal quarter that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 3. EXHIBITS.
Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of
the Sarbanes-Oxley Act of 2002 are attached hereto.
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) FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
By (Signature and Title)* /S/ JAMES A. BOWEN
---------------------------------------
James A. Bowen, Chief Executive Officer
(principal executive officer)
Date APRIL 28, 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 (Signature and Title)* /S/ JAMES A. BOWEN
---------------------------------------
James A. Bowen, Chief Executive Officer
(principal executive officer)
Date APRIL 28, 2005
--------------
By (Signature and Title)* /S/ MARK R. BRADLEY
----------------------------------------
Mark R. Bradley, Chief Financial Officer
(principal financial officer)
Date APRIL 28, 2005
--------------
* Print the name and title of each signing officer under his or her
signature.