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
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FIRST TRUST/FOUR CORNERS SENIOR FLOATING RATE INCOME FUND II
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(Exact name of registrant as specified in charter)
1001 Warrenville Road
Suite 300
LISLE, IL 60532
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(Address of principal executive offices) (Zip code)
W. Scott Jardine
First Trust Portfolios, LP
1001 Warrenville Road
Suite 300
LISLE, IL 60532
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(Name and address of agent for service)
Registrant's telephone number, including area code: 630-241-4141
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Date of fiscal year end: MAY 31, 2004
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Date of reporting period: AUGUST 31, 2004
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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 of Investments is attached herewith.
First Trust/Four Corners Senior Floating Rate Income Fund II
Portfolio of Investments
August 31, 2004 (Unaudited)
PRINCIPAL MARKET
VALUE DESCRIPTION** VALUE
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SENIOR FLOATING RATE INTERESTS - 153.7%
ADVERTISING - 1.3%
$ 6,000,000 Adams Outdoor Advertising, LP,
Term Loan, 10/15/11 $ 6,060,000
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AEROSPACE/DEFENSE - 3.0%
3,990,000 CACI International, Inc., Term Loan B, 5/03/11 4,002,469
3,250,000 MRO Acquisition Corp., Term Loan, 8/27/10 3,266,250
4,000,000 Standard Aero Holdings, Inc.,
Term Loan B, 8/24/12 4,040,000
3,000,000 United Air Lines, Inc., Term Loan, 6/30/05 3,026,250
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14,334,969
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BROADCAST MEDIA - 3.7%
4,000,000 Bragg Communications, Inc., Term Loan, 8/31/11 4,030,000
Cablecom
3,000,000 Term Loan B, 4/15/12 2,992,500
3,000,000 Term Loan C, 4/15/13 2,992,500
4,000,000 NEP Supershooters, LP, Term Loan, 2/03/11 4,035,000
3,750,000 Salem Communications Holding Corp.,
Term Loan B, 3/31/10 3,782,812
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17,832,812
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CABLE TELEVISION - 6.2%
10,530,000 Century Cable Holdings, LLC,
Term Loan, 6/30/09 10,251,703
14,000,000 Charter Communications Operating, LLC,
Term Loan A, 4/27/10 13,648,404
6,000,000 PanAmSat Corp., Term Loan B, 8/20/11 6,004,128
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29,904,235
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CASINOS & GAMING - 6.0%
6,000,000 Boyd Gaming Corp., Term Loan B, 6/30/11 6,056,250
3,800,000 Pinnacle Entertainment, Inc.,
Term Loan DD, 8/27/10 3,781,000
12,000,000 Venetian Casino Resort, Term Loan B, 6/15/11+ 12,135,000
Wynn Las Vegas, LLC
5,000,000 Revolving Credit, 10/30/08+ 4,900,000
2,150,000 Term Loan DD, 9/30/09+ 2,169,709
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29,041,959
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CHEMICALS - 6.6%
6,000,000 Brenntag, Term Loan B, 3/05/11 6,067,500
Celanese AG
6,000,000 Term Loan, 5/17/11+ 6,063,750
3,000,000 Term Loan C, 12/08/11 3,054,999
2,000,000 Innophos, Inc., Term Loan B, 8/13/10+ 2,012,500
1,000,000 Ripplewood Phosphorous LLC,
Term Loan, 7/20/11 1,007,500
Rockwood Specialties, Inc.
4,000,000 Term Loan, 12/15/05 3,990,000
9,500,000 Term Loan B, 7/30/12 9,562,767
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31,759,016
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1
First Trust/Four Corners Senior Floating Rate Income Fund II - (Continued)
Portfolio of Investments
August 31, 2004 (Unaudited)
PRINCIPAL MARKET
VALUE DESCRIPTION** VALUE
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SENIOR FLOATING RATE INTERESTS - CONTINUED
COAL - 0.4%
$ 2,000,000 Foundation PA Coal Company,
Term Loan B, 7/30/11 $ 2,018,500
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COMMERCIAL SERVICES - 7.6%
3,000,000 Acosta Sales Company, Term Loan B, 8/06/10 3,022,500
3,000,000 Alion Science and Technology Corp.,
Term Loan DD, 8/02/09+ 3,000,000
5,000,000 Allied Security Holdings LLC,
Term Loan, 6/30/10 5,037,500
3,272,961 Infrasource, Inc., Term Loan, 9/30/10 3,289,325
4,000,000 Language Line Acquisitions, Inc.,
Term Loan B, 5/31/11 4,035,000
3,989,950 Monitronics International, Inc.,
Term Loan B, 8/26/09 4,017,381
5,000,000 Quanta Services, Inc., Term Loan, 6/19/08 5,012,500
United Rentals, Inc.
2,493,750 Term Loan, 2/14/11 2,514,323
500,000 Term Loan B, 2/14/11 504,125
6,000,000 VUTEk, Inc., Term Loan B, 6/25/10 5,955,000
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36,387,654
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CONSTRUCTION MATERIALS - 5.3%
1,000,000 Ames True Temper, Inc., Term Loan, 7/02/11 1,011,667
Builders FirstSource, Inc.
2,992,500 Term Loan, 2/25/10 3,011,203
3,000,000 Term Loan, 8/25/10 2,992,500
1,000,000 NCI Building Systems, Inc.,
Term Loan B, 6/18/10 1,010,625
7,000,000 Nortek, Inc., Term Loan, 7/29/11 7,063,000
6,960,013 PGT Industries, Inc., Term Loan, 2/07/10 7,047,013
3,500,000 Ply Gem Industries, Inc., Term Loan, 2/12/11 3,513,125
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25,649,133
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CONTAINERS, PACKAGING & GLASS - 6.0%
1,000,000 BWAY Corp., Term Loan B, 6/30/11 1,012,500
8,000,000 Horizon Lines Holding LLC, Term Loan, 7/07/11 8,120,000
1,500,000 Kranson Industries, Inc., Term Loan, 7/30/11 1,513,125
Owens Illinois Group, Inc.
7,164,339 Term Loan A, 4/01/07 7,234,492
4,000,000 Term Loan B, 4/01/08 4,055,000
2,000,000 Term Loan C, 4/01/08 2,000,000
4,984,975 Solo Cup Company, Term Loan, 2/27/11 5,030,672
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28,965,789
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DIVERSIFIED/CONGLOMERATE SERVICES - 0.6%
3,000,000 Roller Bearing Corp., Term Loan, 12/17/10 3,015,000
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ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.3%
2,000,000 Coinstar, Inc., Term Loan, 7/01/11 2,032,500
4,937,501 Global Cash Access, LLC, Term Loan B, 3/10/10 4,999,220
Memec Group Holdings Ltd.
3,000,000 Term Loan A, 5/28/09 2,970,000
4,000,000 Term Loan B, 6/15/10 3,990,000
2
First Trust/Four Corners Senior Floating Rate Income Fund II - (Continued)
Portfolio of Investments
August 31, 2004 (Unaudited)
PRINCIPAL MARKET
VALUE DESCRIPTION** VALUE
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SENIOR FLOATING RATE INTERESTS - CONTINUED
ELECTRONIC EQUIPMENT & INSTRUMENTS - CONTINUED
$ 2,000,000 VeriFone, Inc., Term Loan B, 6/30/11 $ 2,025,000
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16,016,720
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ENTERTAINMENT - 8.9%
6,000,000 Metro-Goldwyn-Mayer Studios, Inc.,
Term Loan B, 4/30/11 6,018,000
2,000,000 Nexstar Broadcasting Group, Inc.,
Term Loan D, 12/31/10 1,998,383
10,000,000 NTL Investment Holdings Ltd.,
Term Loan, 5/10/12 9,866,670
8,000,000 Paxson Communications Corp.,
Floating Rate, 1/15/10 8,040,000
6,500,000 Rainbow Media Holdings LLC,
Term Loan B, 3/31/12 6,571,500
3,000,000 Wallace Theater Corp., Term Loan, 7/31/09 3,022,500
6,995,000 WMG Acquisition Corp., Term Loan, 2/28/11 7,079,940
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42,596,993
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ENVIRONMENTAL SERVICES - 3.5%
3,478,261 Duratek, Inc., Term Loan, 12/16/09 3,467,391
1,500,000 Environmental Systems Products Holdings, Inc.,
Term Loan, 12/12/10 1,537,500
EnviroSolutions Holdings, Inc.
7,507,895 Term Loan, 3/01/09 7,489,125
1,200,203 Term Loan DD, 3/01/09+ 1,197,203
3,000,000 Waste Connections, Inc., Term Loan, 10/22/10 3,022,500
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16,713,719
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FARMING AND AGRICULTURE - 2.0%
United Industries Corp.
4,000,000 Term Loan, 9/30/11 4,055,000
3,990,000 Term Loan, 4/30/11 4,029,900
1,500,000 Term Loan B, 3/31/11 1,515,000
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9,599,900
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FINANCE - 3.1%
15,000,000 Refco Finance Holdings LLC,
Term Loan, 8/05/11 14,943,750
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FOOD, BEVERAGES, & TOBACCO - 8.1%
4,000,000 Atkins Nutritionals Inc., Term Loan, 10/29/09 3,520,000
1,995,000 Golden State Foods Corp., Term Loan B, 2/25/11 2,017,444
12,000,000 Keystone Foods Holdings LLC,
Term Loan, 6/16/11 12,075,000
3,000,000 N.E.W. Customer Service Companies, Inc.,
Term Loan B, 8/17/09 3,015,000
8,000,000 OSI Group, Term Loan B, 9/02/11 8,070,000
Pinnacle Foods Holding Corp.
1,537,431 Term Loan, 11/25/10 1,552,805
5,445,069 Term Loan DD, 11/25/10 5,499,520
3,000,000 THL Food Products Company,
Term Loan, 11/21/11 3,080,625
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38,830,394
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3
First Trust/Four Corners Senior Floating Rate Income Fund II - (Continued)
Portfolio of Investments
August 31, 2004 (Unaudited)
PRINCIPAL MARKET
VALUE DESCRIPTION** VALUE
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SENIOR FLOATING RATE INTERESTS - CONTINUED
HEALTHCARE (EQUIPMENT & SUPPLIES) - 3.9%
$ 5,400,000 Advanced Medical Optics, Inc.,
Term Loan, 6/25/09 $ 5,460,750
6,000,000 Arizant, Inc., Term Loan, 7/31/10 6,022,500
2,000,000 Medical Device Manufacturing,
Term Loan B, 6/30/10 2,010,000
5,080,100 VWR International, Term Loan B, 4/07/11 5,144,871
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18,638,121
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HEALTHCARE (PROVIDERS & SERVICES) - 13.5%
7,000,000 Accredo Health, Inc., Term Loan B, 6/30/11 7,026,250
3,000,000 Ardent Health Services LLC,
Term Loan B, 8/12/11 3,000,000
7,000,000 Community Health Systems, Inc.,
Term Loan, 8/19/11 6,997,501
3,576,014 Connecticare Capital LLC, Term Loan, 10/30/09 3,589,424
1,000,000 DaVita, Inc., Term Loan C, 6/30/10 1,005,833
4,381,500 Genesis Healthcare Corp.,
Term Loan B, 12/01/10 4,434,442
6,500,000 Iasis Healthcare Corp., Term Loan B, 6/22/11 6,571,097
3,000,000 MedCath Holdings Corp., Term Loan, 6/30/11 3,035,625
Skilled Healthcare Group, Inc.
2,000,000 Term Loan, 1/31/11 2,040,000
4,000,000 Term Loan, 7/31/10 4,025,000
4,987,500 Team Health, Inc., Term Loan B, 3/23/11 4,993,734
14,000,000 U.S. Oncology Holding, Term Loan B, 8/20/11 14,070,000
4,000,000 Vanguard Health Systems, Inc.,
Term Loan, 5/18/11 3,995,000
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64,783,906
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INSURANCE - 2.7%
13,000,000 Conseco, Inc., Term Loan, 6/22/10 13,162,500
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LEISURE - 3.8%
1,000,000 Blockbuster, Inc., Term Loan B, 8/20/11 998,750
4,000,000 Brooklyn Basketball, LLC, Term Loan B, 6/16/08 3,990,000
7,000,000 Loews Cineplex Entertainment,
Term Loan, 7/30/11 7,048,125
6,165,307 The Titan Corp., Term Loan B, 6/30/09 6,182,003
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18,218,878
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MANUFACTURING - 3.1%
8,844,279 Cinram International, Inc.,
Term Loan D, 9/30/09 8,852,575
5,987,536 Invensys PLC, Term Loan B, 9/05/09 6,062,381
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14,914,956
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MISCELLANEOUS - 1.5%
6,982,368 Moran Transportation Company,
Term Loan, 8/08/09 7,026,008
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OIL & GAS - 3.5%
1,000,000 Alon USA, Inc., Term Loan B, 12/16/08 1,020,000
2,000,000 BPL Acquisition (Buckeye Pipeline),
Term Loan, 6/10/10 2,020,000
4
First Trust/Four Corners Senior Floating Rate Income Fund II - (Continued)
Portfolio of Investments
August 31, 2004 (Unaudited)
PRINCIPAL MARKET
VALUE DESCRIPTION** VALUE
----------- ------------------------------------------ ------------
SENIOR FLOATING RATE INTERESTS - CONTINUED
OIL & GAS - CONTINUED
Quest Cherokee, LLC
$ 604,444 L of C, 12/31/08*** $ 607,467
4,835,556 Term Loan, 7/22/10 4,859,733
2,500,000 SemCrude, L.P., Term Loan, 8/27/10 2,521,875
2,000,000 Transport Industries, L.P.,
Term Loan B, 6/13/10 2,000,000
4,000,000 Vulcan Energy Corp., Term Loan, 7/23/10 4,050,000
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17,079,075
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PAPER & FOREST PRODUCTS - 1.7%
6,000,000 Georgia Pacific Corp., Term Loan, 7/02/09 5,970,000
Koch Cellulose, LLC
395,773 L of C, 5/07/11*** 398,742
1,600,216 Term Loan B, 5/07/11 1,612,217
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7,980,959
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PERSONAL PRODUCTS - 1.3%
2,422,500 American Safety Razor Company,
Term Loan B, 4/29/11 2,446,725
3,990,000 Prestige Brands, Inc., Term Loan B, 4/06/11 3,990,000
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6,436,725
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PRINTING & PUBLISHING - 5.5%
5,250,000 Freedom Communications, Inc.,
Term Loan B, 5/18/12 5,322,187
2,000,000 Herald Media, Inc., Term Loan, 6/29/11 2,020,000
9,000,000 RH Donnelley Inc., Term Loan B, 6/30/11 9,100,125
Transwestern Publishing Company
4,227,500 Term Loan, 2/25/12 4,249,961
5,802,532 Term Loan B, 2/25/12 5,842,424
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26,534,697
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REAL ESTATE - 0.4%
1,964,010 CB Richard Ellis Services, Inc.,
Term Loan, 3/31/10 1,972,603
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RETAIL - 6.8%
13,500,000 Harbor Freight Tools, Term Loan, 7/15/10 13,542,187
11,000,000 Jean Coutu Group (PJC), Inc.,
Term Loan B, 7/30/11
1,804,769 Oriental Trading Company, Inc.,
Term Loan B, 8/04/10 111,088,748
6,000,000 Savers, Inc., Term Loan, 8/04/09 6,030,000
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32,487,511
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TELECOMMUNICATIONS (WIRELESS) - 8.0%
4,000,000 AAT Communications Corp.,
Term Loan B, 1/16/12 4,038,332
8,000,000 American Tower Corp., Term Loan B, 8/31/11 8,102,504
4,000,000 Fairpoint Communications, Inc.,
Term Loan, 9/30/08 4,022,500
3,000,000 MC Communications, LLC, Term Loan, 12/31/10 2,955,000
5,984,962 Nextel Communications, Inc.,
Term Loan E, 12/15/10 6,015,157
5,000,000 Nextel Partners, Inc., Term Loan C, 5/31/11 5,060,000
5
First Trust/Four Corners Senior Floating Rate Income Fund II - (Continued)
Portfolio of Investments
August 31, 2004 (Unaudited)
PRINCIPAL MARKET
VALUE DESCRIPTION** VALUE
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SENIOR FLOATING RATE INTERESTS - CONTINUED
TELECOMMUNICATIONS (WIRELESS) - CONTINUED
$ 8,000,000 Valor Telecommunications, LLC,
Term Loan, 6/30/09 $ 8,085,000
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38,278,493
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THEATRES - 0.8%
3,868,788 Regal Cinemas Corp., Term Loan B, 11/10/10 3,908,443
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UTILITY (ELECTRIC) - 21.6%
Allegheny Energy Supply Company, LLC
4,488,750 Term Loan B, 3/08/11 4,548,226
8,488,750 Term Loan C, 6/08/11 8,614,316
6,000,000 Astoria Energy LLC, Term Loan, 4/16/12 6,070,002
8,975,544 CenterPoint Energy, Inc., Term Loan, 10/07/06 8,997,982
997,500 Cogentrix Delaware Holdings, Inc.,
Term Loan, 2/25/09 1,011,839
13,965,000 Midwest Generation, LLC, Term Loan, 4/27/11 14,113,378
8,000,000 Mission Energy Holdings International, LLC, Term
Loan, 12/11/06 8,015,000
2,000,000 Nevada Power Company, L of C, 5/4/09*** 2,010,000
3,936,667 Pike Electric, Inc., Term Loan, 7/01/12 4,003,917
Reliant Resources, Inc.
7,500,000 Revolving Credit, 3/15/07+ 7,306,252
2,923,908 Term Loan, 3/15/07 2,920,253
4,873,179 Term Loan A, 3/15/07 4,860,996
7,798,942 Riverside Energy Center, LLC,
Term Loan, 6/24/11 7,857,434
Rocky Mountain Energy Center, LLC,
594,709 L of C, 6/24/11*** 599,169
5,606,349 Term Loan, 6/24/11 5,648,397
13,000,000 Saguaro Utility Group I Corp. (Unisource),
Term Loan DD, 3/25/11+ 12,829,375
1,000,000 Sierra Pacific Power Company,
L of C, 5/04/08*** 1,005,000
3,500,000 Tucson Electric Power Company,
Term Loan, 6/30/09 3,523,334
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103,934,870
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TOTAL SENIOR FLOATING RATE INTERESTS 739,028,288
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(Cost $709,096,692)
6
First Trust/Four Corners Senior Floating Rate Income Fund II - (Continued)
Portfolio of Investments
August 31, 2004 (Unaudited)
PRINCIPAL MARKET
VALUE DESCRIPTION** VALUE
----------- ------------------------------------------ ------------
REPURCHASE AGREEMENT - 21.4%
(Cost $103,000,000)
$103,000,000 Agreement with Wachovia Capital Markets, LLC
1.470% dated 8/31/04, to be repurchased at
$103,004,206 on 9/01/04, collateralized by
$89,388,000 U.S. Treasury Note, 7.000% due
7/15/06 and $7,397,000 U.S. Treasury Note,
1.625% due 1/31/05 (Value $105,060,977) $ 103,000,000
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UNFUNDED LOAN COMMITMENT - (6.3)% (30,535,512)
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TOTAL INVESTMENTS - 168.8% 811,492,776
(Cost $812,096,692)*
NET OTHER ASSETS AND LIABILITIES - (48.0)% (230,804,483)
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PREFERRED SHARES,
AT LIQUIDATION VALUE - (20.8)% (100,000,000)
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NET ASSETS - 100.0% $ 480,688,293
==================
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+ Unfunded Loan Commitment.
* Aggregate cost for federal tax purposes.
** All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common Shares.
*** L of C - Letter of Credit
7
Notes to Quarterly Portfolio of Investments
August 31, 2004 (Unaudited)
8
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 in
accordance with valuation procedures adopted by the 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 net
asset value, First Trust Advisors L.P. ("First Trust") may use a fair value
method in good faith 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 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 trading on the NASDAQ are valued at the NASDAQ Official
Closing Price as determined by NASDAQ. Portfolio securities traded in the
over-the-counter market, but excluding securities trading 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 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 substantially grown 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 good faith under
procedures adopted by the Fund's Board of Trustees, and in accordance with the
provisions of the 1940 Act.
8
Notes to Quarterly Portfolio of Investments
August 31, 2004 (Continued) (Unaudited)
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.
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.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income is not accrued
until settlement date. The Fund instructs the custodian to segregate assets of
the Fund with a current value at least equal to the amount of its when-issued
purchase commitments.
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)
On August 31, 2004, net unrealized depreciation for Federal tax purposes was
($603,916), consisting of $1,994,013 aggregate gross unrealized appreciation
for all securities in which there is an excess of value over tax cost and
$2,597,929 aggregate gross unrealized depreciation for all securities in which
there is an excess of tax cost over value.
9
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 has materially affected, or is 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
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By (Signature and Title)* /S/ JAMES A. BOWEN
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James A. Bowen, Chief Executive Officer
(principal executive officer)
Date OCTOBER 28, 2004
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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
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James A. Bowen, Chief Executive Officer
(principal executive officer)
Date OCTOBER 28, 2004
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By (Signature and Title)* /S/ MARK R. BRADLEY
-------------------------------------------------------
Mark R. Bradley, Chief Financial Officer
(principal financial officer)
Date OCTOBER 28, 2004
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* Print the name and title of each signing officer under his or her signature.