N-CSRS 1 t306390.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-21597 PRIMECAP ODYSSEY FUNDS (Exact name of registrant as specified in charter) 225 SOUTH LAKE AVENUE, SUITE 400 PASADENA, CA 91101 (Address of principal executive offices) (Zip code) MICHAEL J. RICKS 225 SOUTH LAKE AVENUE, SUITE 400 PASADENA, CA 91101 (Name and address of agent for service) (626) 304-9222 Registrant's telephone number, including area code Date of fiscal year end: OCTOBER 31 Date of reporting period: APRIL 30, 2011 ITEM 1. REPORTS TO STOCKHOLDERS. SEMIANNUAL REPORT For the Six Months Ended April 30, 2011 LOGO PRIMECAP(R) ------------ ODYSSEY FUNDS PRIMECAP ODYSSEY STOCK (POSKX) PRIMECAP ODYSSEY GROWTH (POGRX) PRIMECAP ODYSSEY AGGRESSIVE GROWTH (POAGX) TABLE OF CONTENTS PRIMECAP ODYSSEY FUNDS ---------------------------------------------------------------- Letter to Shareholders ................................... 2 Performance Graphs PRIMECAP Odyssey Stock Fund ....................... 9 PRIMECAP Odyssey Growth Fund ...................... 10 PRIMECAP Odyssey Aggressive Growth Fund 11 Expense Example .......................................... 12 Sector Breakdown ......................................... 14 Schedule of Investments PRIMECAP Odyssey Stock Fund ....................... 16 PRIMECAP Odyssey Growth Fund ...................... 20 PRIMECAP Odyssey Aggressive Growth Fund ........... 25 Statements of Assets and Liabilities ..................... 29 Statements of Operations ................................. 30 Statement of Changes in Net Assets PRIMECAP Odyssey Stock Fund ....................... 31 PRIMECAP Odyssey Growth Fund ...................... 32 PRIMECAP Odyssey Aggressive Growth Fund ........... 33 Financial Highlights PRIMECAP Odyssey Stock Fund ....................... 34 PRIMECAP Odyssey Growth Fund ...................... 35 PRIMECAP Odyssey Aggressive Growth Fund ........... 36 Notes to Financial Statements ............................ 37 LETTER TO SHAREHOLDERS PRIMECAP ODYSSEY FUNDS ---------------------------------------------------------------- DEAR FELLOW SHAREHOLDERS, For the six months ending April 30, 2011, the PRIMECAP Odyssey Stock Fund, PRIMECAP Odyssey Growth Fund, and PRIMECAP Odyssey Aggressive Growth Fund produced total returns of +15.72%, +17.39%, and +20.00%, respectively. By comparison, the unmanaged S&P 500 Index (S&P 500) produced a total return of +16.36% for the period. The U.S. stock market provided strong returns during the six months ending April 30, 2011, extending the rally that began last summer as the economy continued its recovery from the recession. Gross domestic product (GDP) has increased for the past seven quarters. Both consumer spending and industrial production have increased as consumer confidence has improved and companies have rebuilt inventories and returned to growth mode. However, there are reasons for caution regarding the sustainability of this recovery. Unemployment remains stubbornly high, housing markets show minimal improvement, the U.S. dollar has weakened relative to other major currencies, and balancing budgets at the federal, state, and local government levels poses daunting challenges. More recently, unrest in the Middle East and North Africa has added risk to an already elevated oil price, and the tragic earthquakes in Japan have disrupted the supply chains of many companies. As always, the PRIMECAP Odyssey Funds remain focused on investing in companies that, in our judgment, offer better growth prospects than are currently anticipated by the market. We continue to be overweight in the health care and information technology sectors and underweight in the energy sector in each of the three PRIMECAP Odyssey Funds. This sector allocation generally hurt the funds' results during the first six months of the fiscal year, as returns in both the health care and information technology sectors trailed the overall S&P 500 while the energy sector, fueled by rising commodity prices, enjoyed the highest returns of any sector. However, positive stock selection more than offset an overweight position in the information technology sector in each of the PRIMECAP Odyssey Funds. Each fund also benefited from underweight positions in the consumer staples, financials, and utilities sectors. Favorable stock selection in the health care sector also helped results in the PRIMECAP Odyssey Growth and PRIMECAP Odyssey Aggressive Growth Funds. A more detailed discussion of the results of each PRIMECAP Odyssey Fund follows. 2 LETTER TO SHAREHOLDERS PRIMECAP ODYSSEY STOCK FUND -------------------------------------------------------------------------------- From November 1, 2010 to April 30, 2011, the Stock Fund's total return of +15.72% trailed the S&P 500's total return of +16.36%. On a relative basis, poor stock selection in the energy and materials sectors, along with an underweight position in the energy sector, detracted from the fund's returns. The fund's results were also hurt by its sizeable cash position during the period. This was partially offset by positive stock selection in the information technology sector. L.M. Ericsson, Altera Corp., and Biogen Idec Inc. were among the top contributors to the fund's relative returns. L.M. Ericsson (+41.3%) and Altera Corp. (+56.4%) both benefited from increased investment in wireless network infrastructure. Biogen Idec (+55.7%) rose as investors reacted favorably to positive data for its potential oral therapy for multiple sclerosis. Other top contributors included Texas Instruments (+21.0%), Marsh & McLennan (+23.0%), and Range Resources (+51.2%). On the negative side, major detractors included Schweitzer-Mauduit International, Southwest Airlines, and Research in Motion. Schweitzer-Mauduit International (-18.8%), a supplier of reconstituted tobacco and paper used in cigarettes, declined as European competitors challenged its patents for its proprietary low ignition tobacco paper. We believe demand for low ignition paper will expand rapidly as cigarette manufacturers around the world seek to meet emerging safety regulations. Southwest Airlines (-14.5%), along with other airlines, faced higher fuel costs as a consequence of political unrest in the Middle East. Yet, Southwest has continued to expand its market share, especially in new markets such as Denver and Boston, while maintaining its position as one of the lowest cost airlines in the U.S. We view Southwest's recent acquisition of AirTran Airways as a unique opportunity to accelerate the growth of its network into many new markets including Atlanta, the world's busiest airport. Research in Motion (-14.5%), maker of Blackberry smartphones and the new Blackberry Playbook tablet computer, has struggled as investors focus on its declining market share in North America relative to Apple's iPhone and phones based on the Android operating system. However, the company has continued to enjoy rapid growth in international markets, which now contribute the majority of the company's revenues. Additionally, we expect the company's aging product portfolio to be significantly refreshed over the coming months. 3 LETTER TO SHAREHOLDERS PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- CONTINUED The top 10 holdings, which collectively represent 34.4% of the portfolio at the period end, are listed below: -------------------------------------------------------------------------------- PRIMECAP ODYSSEY STOCK FUND ENDING % OF TOP 10 HOLDINGS AS OF 4/30/11 TOTAL PORTFOLIO* -------------------------------------------------------------------------------- Roche Holding AG 4.9 Amgen Inc. 4.2 Johnson & Johnson 3.7 Texas Instruments Inc. 3.5 Medtronic Inc. 3.5 L.M. Ericsson (ADR) 3.2 Marsh & McLennan Cos. 3.0 Eli Lilly & Co. 2.8 Novartis AG (ADR) 2.8 Microsoft Corp. 2.8 -------------------------------------------------------------------------------- TOTAL % OF PORTFOLIO 34.4% -------------------------------------------------------------------------------- * The percentage is calculated by using the ending market value of the security divided by the total investments of the Fund. PRIMECAP Odyssey Growth Fund From November 1, 2010 to April 30, 2011, the Growth Fund's total return was +17.39%, which exceeded both the S&P 500's total return of +16.36% and the Russell 1000 Growth Index's total return of +16.96%. Positive stock selection in the health care and information technology sectors was a major contributor to the fund's results. The fund also benefited from underweight positions in the consumer staples, financials, and utilities sectors. This was offset by an underweight position in the energy sector. ImmunoGen (+62.5%), Cepheid (+53.6%), and Biogen Idec (+55.7%) were three health care stocks that helped the fund's relative results. ImmunoGen, the fund's largest holding, is a biotechnology company focused on developing targeted anti-cancer therapies using its expertise in conjugated monoclonal antibodies. Its stock rose on the release of positive clinical data for TDM-1, an antibody drug conjugate that is being developed by a partner as a possible treatment for some forms of metastatic breast cancer. Cepheid benefited from increasing market acceptance of its molecular diagnostic systems. For example, the World Health Organization recently endorsed the company's point of care tuberculosis test. 4 LETTER TO SHAREHOLDERS PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- CONTINUED Among information technology stocks, Altera (+56.4%) and Stratasys (+71.9%) were large contributors to the fund's returns. Stratasys, a maker of 3-D printers used for rapid prototyping and manufacturing of plastic parts, has continued to see strong growth in sales as Hewlett-Packard (HP) has ramped up its efforts to resell Stratasys' products under the HP brand. Nektar Therapeutics (-28.8%) was one of the largest detractors from the fund's results due to a dilutive equity offering following management's failure to find a partner for its lead oncology drug candidate. As a result, the company will now take on greater financial risk to fund trials for the drug, but it also stands to potentially gain greater rewards if the drug is successful. Google (-11.3%), AMR Corp (-25.6%), and Southwest Airlines (-14.5%) also hurt the fund's returns. The top 10 holdings, which collectively represent 27.9% of the portfolio at the period end, are listed below: -------------------------------------------------------------------------------- PRIMECAP ODYSSEY GROWTH FUND ENDING % OF TOP 10 HOLDINGS AS OF 4/30/11 TOTAL PORTFOLIO* -------------------------------------------------------------------------------- ImmunoGen Inc. 3.8 Roche Holding AG 3.7 Seattle Genetics Inc. 3.5 Amgen Inc. 3.4 Dendreon Corp. 2.8 Altera Corp. 2.6 Biogen Idec Inc. 2.2 Cepheid Inc. 2.2 Stratasys Inc. 1.9 Medtronic Inc. 1.8 -------------------------------------------------------------------------------- TOTAL % OF PORTFOLIO 27.9% -------------------------------------------------------------------------------- * The percentage is calculated by using the ending market value of the security divided by the total investments of the Fund. 5 LETTER TO SHAREHOLDERS PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- CONTINUED PRIMECAP ODYSSEY AGGRESSIVE GROWTH FUND From November 1, 2010 to April 30, 2011, the Aggressive Growth Fund's total return was +20.00%, ahead of the S&P 500's total return of +16.36% but behind the Russell Midcap Growth Index's total return of +22.62%. Positive stock selection in the information technology and health care sectors was the largest contributor to relative returns, partially offset by the fund's underweight position in the energy sector and poor stock selection in the consumer discretionary and industrials sectors. ImmunoGen (+62.5%), Cepheid (+53.6%), and InterMune (+239.2%) were among the health care stocks with the highest returns in the portfolio. InterMune stock rose on the news that its drug to treat idiopathic pulmonary fibrosis (IPF) had received regulatory approval in Europe. This is the same drug that had been rejected in the U.S. by the FDA in 2010. Stratasys (+71.9%), Altera Corp (+56.4%), and GSI Commerce (+56.8%) were among the information technology stocks with the highest returns. GSI Commerce, an e-commerce company specializing in creating, developing, and running online shopping sites for retailers, announced in March that it was being acquired for a substantial premium. On the negative side, Nektar Therapeutics (-28.8%), DreamWorks Animation (-25.0%), and AMR Corp (-25.6%) were among the biggest detractors from the fund's returns. DreamWorks Animation struggled with weaker than expected box office and home video sales. However, as a leading creator of animated films, DreamWorks appears well-positioned to capitalize on its ability to create new animated film franchises as well as to build upon existing ones. 6 LETTER TO SHAREHOLDERS PRIMECAP Odyssey Funds -------------------------------------------------------------------------------- CONTINUED The top 10 holdings, which collectively represent 31.6% of the portfolio at the period end, are listed below: -------------------------------------------------------------------------------- PRIMECAP ODYSSEY AGGRESSIVE GROWTH FUND ENDING % OF TOP 10 HOLDINGS AS OF 4/30/11 TOTAL PORTFOLIO* -------------------------------------------------------------------------------- Roche Holding AG 4.4 Seattle Genetics Inc. 3.9 Dendreon Corp. 3.9 ImmunoGen 3.8 Cepheid Inc. 3.3 Stratasys Inc. 3.0 Websense Inc. 2.4 Altera Corp. 2.4 Abiomed Inc. 2.3 Conceptus Inc. 2.2 -------------------------------------------------------------------------------- Total % of Portfolio 31.6% -------------------------------------------------------------------------------- * The percentage is calculated by using the ending market value of the security divided by the total investments of the Fund. OUTLOOK After seven consecutive quarters of increasing GDP and industrial production, it is fair to say that the economic recovery is well underway. Stocks have responded accordingly. The S&P 500 has roughly doubled from the lowest level reached in March 2009 at the depths of the financial crisis. Smaller capitalization stock indexes like the Russell 2000 have achieved even greater returns. Although the economic recovery has continued, its sustainability, in our judgment, is not without risk. Labor and housing markets remain weak, the dollar has depreciated relative to many major currencies, and surging commodity prices fan fears of inflation and reduce consumer purchasing power. Additionally, balancing budgets at the federal, state, and local government levels will require austerity measures that may depress economic growth. 7 LETTER TO SHAREHOLDERS PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- CONTINUED Given the very strong recent gains posted by stocks and our more tempered economic outlook, we are at the margin more cautious on stocks than we were at the beginning of the year. We still find valuations reasonably attractive, particularly relative to bonds and cash. Many companies in which the funds are invested have been experiencing rapid growth in revenues and earnings, having recovered from the recession with more efficient operations and stronger balance sheets. We remain optimistic that innovation and global expansion should fuel growth, especially for information technology and health care companies, two sectors in which the funds have substantial investment and the United States has a strong competitive advantage. Sincerely, PRIMECAP Management Company May 19, 2011 -------------------------------------------------------------------------------- PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. THE FUNDS INVEST IN SMALLER COMPANIES, WHICH INVOLVE ADDITIONAL RISKS SUCH AS LIMITED LIQUIDITY AND GREATER VOLATILITY. ALL FUNDS MAY INVEST IN FOREIGN SECURITIES, WHICH INVOLVES GREATER VOLATILITY AND POLITICAL, ECONOMIC AND CURRENCY RISKS AND DIFFERENCES IN ACCOUNTING METHODS. MUTUAL FUND INVESTING INVOLVES RISK, AND LOSS OF PRINCIPAL IS POSSIBLE. GROWTH STOCKS TYPICALLY ARE MORE VOLATILE THAN VALUE STOCKS; HOWEVER, VALUE STOCKS HAVE A LOWER EXPECTED GROWTH RATE IN EARNINGS AND SALES. Please refer to the Schedule of Investments for details of fund holdings. Fund holdings and sector allocations are subject to change at any time and are not recommendations to buy or sell any security. The S&P 500 INDEX is a broad based index of 500 stocks, which is widely recognized as representative of the market in general. THE RUSSELL 1000 GROWTH INDEX is an index that measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. THE RUSSELL MID CAP GROWTH INDEX measures the performance of those Russell Mid Cap companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Index consists of the smallest 2,000 companies in a group of 3,000 U.S. companies in the Russell 3000 Index, as ranked by market capitalization. These indices do not incur expenses and are not available for investment. Earnings growth is an indicator for measuring a company's success and can be the driving force behind stock price appreciation. THE INFORMATION PROVIDED HEREIN REPRESENTS THE OPINIONS OF PRIMECAP MANAGEMENT COMPANY AND IS NOT INTENDED TO BE A FORECAST OF FUTURE EVENTS, A GUARANTEE OF FUTURE RESULTS, OR INVESTMENT ADVICE. 8 PERFORMANCE GRAPHS PRIMECAP ODYSSEY STOCK FUND ---------------------------------------------------------------- The following chart compares the value of a hypothetical $10,000 investment in the PRIMECAP Odyssey Stock Fund from November 1, 2004 (inception) to April 30, 2011, compared to the S&P 500 Index. This chart illustrates the performance of a hypothetical $10,000 investment made on the fund's inception date and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The chart assumes reinvestment of capital gains and dividends. CHART OMITTED PRIMECAP ODYSSEY S&P 500 STOCK FUND INDEX -------------------------------------------------------------------------------- 11/1/04 $10,000 $10,000 4/30/05 10,490 10,324 10/31/05 11,480 10,868 4/30/06 13,047 11,914 10/31/06 13,487 12,643 1/31/07 14,632 13,729 10/31/07 15,359 14,483 4/30/08 13,799 13,088 10/31/08 10,332 9,256 4/30/09 10,095 8,465 10/31/09 12,042 10,161 4/30/10 14,110 11,752 10/31/10 13,986 11,839 4/30/11 16,185 13,775 TOTAL RETURN PERIOD ENDED APRIL 30, 2011 --------------------------- ANNUALIZED SINCE INCEPTION 1 YEAR 5 YEAR (11/01/04) ------ ------ --------------- PRIMECAP Odyssey Stock Fund 14.70% 4.40% 7.70% S&P 500 Index* 17.22% 2.95% 5.06% -------- * The S&P 500 Index is an unmanaged index composed of 500 common stocks weighted by market value; its total return includes reinvestment of dividends and is considered representative of the stock market return as a whole. 9 PERFORMANCE GRAPHS PRIMECAP ODYSSEY GROWTH FUND ---------------------------------------------------------------- The following chart compares the value of a hypothetical $10,000 investment in the PRIMECAP Odyssey Growth Fund from November 1, 2004 (inception) to April 30, 2011, compared to the S&P 500 Index. This chart illustrates the performance of a hypothetical $10,000 investment made on the fund's inception date and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The chart assumes reinvestment of capital gains and dividends. CHART OMITTED PRIMECAP ODYSSEY S&P 500 GROWTH FUND INDEX -------------------------------------------------------------------------------- 11/1/04 $10,000 $10,000 4/30/05 10,450 10,324 10/31/05 11,620 10,868 4/30/06 13,208 11,914 10/31/06 13,769 12,643 1/31/07 14,845 13,729 10/31/07 15,898 14,483 4/30/08 13,919 13,088 10/31/08 10,246 9,256 4/30/09 10,262 8,465 10/31/09 12,437 10,161 4/30/10 14,901 11,752 10/31/10 15,044 11,839 4/30/11 17,659 13,775 TOTAL RETURN PERIOD ENDED APRIL 30, 2011 --------------------------- ANNUALIZED SINCE INCEPTION 1 YEAR 5 YEAR (11/01/04) ------ ------ --------------- PRIMECAP Odyssey Growth Fund 18.51% 5.98% 9.15% S&P 500 Index* 17.22% 2.95% 5.06% PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY CALLING 1-800-729-2307. THE FUND IMPOSES A 2% REDEMPTION FEE ON SHARES HELD LESS THAN 60 DAYS. -------- * The S&P 500 Index is an unmanaged index composed of 500 common stocks weighted by market value; its total return includes reinvestment of dividends and is considered representative of the stock market return as a whole. 10 PERFORMANCE GRAPHS PRIMECAP ODYSSEY AGGRESSIVE GROWTH FUND ---------------------------------------------------------------- The following chart compares the value of a hypothetical $10,000 investment in the PRIMECAP Odyssey Aggressive Growth Fund from November 1, 2004 (inception) to April 30, 2011, compared to the S&P 500 Index. This chart illustrates the performance of a hypothetical $10,000 investment made on the fund's inception date and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The chart assumes reinvestment of capital gains and dividends. CHART OMITTED PRIMECAP ODYSSEY S&P 500 GROWTH FUND INDEX -------------------------------------------------------------------------------- 11/1/04 $10,000 $10,000 4/30/05 9,890 10,324 10/31/05 11,240 10,868 4/30/06 13,110 11,914 10/31/06 13,920 12,643 1/31/07 15,280 13,729 10/31/07 16,253 14,483 4/30/08 13,134 13,088 10/31/08 9,654 9,256 4/30/09 10,113 8,465 10/31/09 12,583 10,161 4/30/10 16,185 11,752 10/31/10 16,501 11,839 4/30/11 19,801 13,775 TOTAL RETURN PERIOD ENDED APRIL 30, 2011 --------------------------- ANNUALIZED SINCE INCEPTION 1 YEAR 5 YEAR (11/01/04) ------ ------ --------------- PRIMECAP Odyssey Aggressive Growth Fund 22.34% 8.60% 11.09% S&P 500 Index* 17.22% 2.95% 5.06% PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY CALLING 1-800-729-2307. THE FUND IMPOSES A 2% REDEMPTION FEE ON SHARES HELD LESS THAN 60 DAYS. -------- * The S&P 500 Index is an unmanaged index composed of 500 common stocks weighted by market value; its total return includes reinvestment of dividends and is considered representative of the stock market return as a whole. 11 EXPENSE EXAMPLE PRIMECAP ODYSSEY FUNDS ---------------------------------------------------------------- (UNAUDITED) As a shareholder of one or more of the funds, you incur ongoing costs, including management fees and other fund expenses. This expense example is intended to help you understand your ongoing costs (in dollars) of investing in the funds and to compare these costs with the ongoing costs of investing in other mutual funds. The expense example is based on an investment of $1,000 invested for a six month period beginning November 1, 2010 and held through April 30, 2011. ACTUAL EXPENSES The information in the table adjacent to the heading "Actual Performance" provides actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the column entitled "Expenses Paid during Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The information in the table adjacent to the heading "Hypothetical Performance (5% return before expenses)" provides hypothetical account values and hypothetical expenses based on the funds' actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the funds' actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the funds and other mutual funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the information adjacent to the heading "Hypothetical Performance (5% return before expenses)" is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different mutual funds. In addition, if transactional costs were included, your costs would have been higher. 12 EXPENSE EXAMPLE PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- (UNAUDITED) - CONTINUED BEGINNING ENDING EXPENSES PAID EXPENSE RATIO ACCOUNT ACCOUNT DURING PERIOD* DURING PERIOD* VALUE VALUE (11/1/10 TO (11/1/10 TO (11/1/10) (04/30/11) 04/30/11) 04/30/11) -------------------------------------------------------------------------------- PRIMECAP ODYSSEY STOCK FUND Actual Performance $1,000.00 $1,157.20 $3.50 0.65% Hypothetical Performance (5% return before expenses) $1,000.00 $1,021.55 $3.28 0.65% -------------------------------------------------------------------------------- PRIMECAP ODYSSEY GROWTH FUND Actual Performance $1,000.00 $1,173.90 $3.54 0.66% Hypothetical Performance (5% return before expenses) $1,000.00 $1,021.54 $3.29 0.66% -------------------------------------------------------------------------------- PRIMECAP ODYSSEY AGGRESSIVE GROWTH FUND Actual Performance $1,000.00 $1,200.00 $3.69 0.68% Hypothetical Performance (5% return before expenses) $1,000.00 $1,021.44 $3.39 0.68% -------------------------------------------------------------------------------- -------- * Expenses are equal to a fund's annualized expense ratio as indicated, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year period (181), then divided by the number of days in the fiscal year (365) to reflect the one-half year period. 13 SECTOR BREAKDOWN PRIMECAP ODYSSEY FUNDS ---------------------------------------------------------------- PRIMECAP ODYSSEY STOCK FUND ---------------------------------------------------------------- Consumer Discretionary 8.6% Consumer Staples 2.5% Energy 9.7% Financials 4.9% Health Care 26.8% Industrials 14.4% Information Technology 23.2% Materials 6.5% Telecommunication Services 0.0% Utilities 1.4% Short Term Investments and Other Net Assets 2.0% ================================================================ TOTAL 100.0% ---------------------------------------------------------------- PRIMECAP ODYSSEY GROWTH FUND ---------------------------------------------------------------- Consumer Discretionary 7.0% Consumer Staples 0.3% Energy 6.7% Financials 3.3% Health Care 36.8% Industrials 9.4% Information Technology 29.2% Materials 2.9% Telecommunication Services 0.1% Short Term Investments and Other Net Assets 4.3% ================================================================ TOTAL 100.0% ---------------------------------------------------------------- The tables above list sector allocations as a percentage of each fund's total net assets as of April 30, 2011. The management report makes reference to average allocations during the period. As a result, the sector allocations above may differ from those discussed in the management report. 14 SECTOR BREAKDOWN PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- CONTINUED PRIMECAP ODYSSEY AGGRESSIVE GROWTH FUND ---------------------------------------------------------------- Consumer Discretionary 4.7% Consumer Staples 1.4% Energy 4.4% Financials 1.3% Health Care 38.8% Industrials 9.1% Information Technology 33.1% Materials 2.6% Telecommunication Services 0.1% Short Term Investments and Other Net Assets 4.5% ================================================================ TOTAL 100.0% ---------------------------------------------------------------- The table above lists sector allocations as a percentage of the fund's total net assets as of April 30, 2011. The management report makes reference to average allocations during the period. As a result, the sector allocations above may differ from those discussed in the management report. 15
SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY STOCK FUND ---------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED) Shares Value -------------------------------------------------------------------------------- COMMON STOCKS - 98.0% CONSUMER DISCRETIONARY - 8.6% 21,000 Amazon.com, Inc. (a) ....................... $ 4,126,500 188,700 Ascena Retail Group, Inc. (a) .............. 5,904,423 102,600 Bed Bath & Beyond, Inc. (a) ................ 5,757,912 200,900 CarMax, Inc. (a) ........................... 6,971,230 170,400 Collective Brands, Inc. (a) ................ 3,578,400 64,500 DIRECTV Group, Inc. (The) (a) .............. 3,134,055 32,200 Kohl's Corp. ............................... 1,697,262 50,000 Limited Brands, Inc. ....................... 2,058,000 200,000 Mattel, Inc. ............................... 5,344,000 8,100 Men's Wearhouse, Inc. ...................... 225,909 59,900 Sony Corp.- ADR ............................ 1,695,769 96,700 TJX Cos, Inc. .............................. 5,185,054 105,000 Walt Disney Co. (The) ...................... 4,525,500 212,500 Whirlpool Corp. ............................ 18,313,250 ----------- 68,517,264 ----------- CONSUMER STAPLES - 2.5% 190,000 Kellogg Co. ................................ 10,881,300 60,000 PepsiCo, Inc. .............................. 4,133,400 80,000 Procter & Gamble Co. ....................... 5,192,000 ----------- 20,206,700 ----------- ENERGY - 9.7% 100,000 Cameco Corp. ............................... 2,948,000 85,200 Cameron International Corp. (a) ............ 4,491,744 120,000 Cenovus Energy, Inc. ....................... 4,608,000 67,900 EOG Resources, Inc. ........................ 7,666,589 56,800 Hess Corp. ................................. 4,882,528 302,900 McDermott International, Inc. (a) .......... 6,993,961 94,700 National Oilwell Varco, Inc. ............... 7,262,543 50,000 Noble Energy, Inc. ......................... 4,813,500 304,000 Petroleo Brasileiro SA - ADR ............... 10,144,480 208,300 Range Resources Corp. ...................... 11,758,535 91,034 Schlumberger Ltd. .......................... 8,170,302 53,000 Transocean Ltd. (a) ........................ 3,855,750 ----------- 77,595,932 ----------- The accompanying notes are an integral part of these financial statements. 16 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY STOCK FUND -------------------------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED)--(CONTINUED) Shares Value -------------------------------------------------------------------------------- FINANCIALS - 4.9% 79,000 Charles Schwab Corp. (The) ................. $ 1,446,490 80,000 Chubb Corp. ................................ 5,215,200 111,100 Discover Financial Services ................ 2,759,724 799,600 Marsh & McLennan Cos., Inc. ................ 24,211,888 135,600 Mercury General Corp. ...................... 5,388,744 ----------- 39,022,046 ----------- HEALTH CARE - 26.8% 8,000 Abbott Laboratories ........................ 416,320 75,000 Affymetrix, Inc. (a) ....................... 405,000 592,400 Amgen, Inc. (a) ............................ 33,677,940 158,500 Biogen Idec, Inc. (a) ...................... 15,429,975 227,900 Boston Scientific Corp. (a) ................ 1,706,971 611,000 Eli Lilly & Co. ............................ 22,613,110 473,935 GlaxoSmithKline PLC - ADR .................. 20,692,002 447,700 Johnson & Johnson .......................... 29,422,844 668,000 Medtronic, Inc. ............................ 27,889,000 378,950 Novartis AG - ADR .......................... 22,422,471 237,716 Roche Holding AG - CHF ..................... 38,556,711 ----------- 213,232,344 ----------- INDUSTRIALS - 14.4% 23,800 Alaska Air Group, Inc. (a) ................. 1,567,706 10,000 Alexander & Baldwin, Inc. .................. 527,000 160,100 AMR Corp. (a) .............................. 939,787 244,900 Arkansas Best Corp. ........................ 5,635,149 459,700 Babcock & Wilcox Co. (a) ................... 14,439,177 201,400 Boeing Co. ................................. 16,067,692 50,000 Canadian Pacific Railway Ltd. .............. 3,312,000 8,300 Caterpillar, Inc. .......................... 957,903 10,000 Deere & Co. ................................ 975,000 26,200 FedEx Corp. ................................ 2,506,554 201,900 Honeywell International, Inc. .............. 12,362,337 23,500 JetBlue Airways Corp. (a) .................. 133,010 140,000 Norfolk Southern Corp. ..................... 10,455,200 64,300 Pall Corp. ................................. 3,757,692 179,400 Ritchie Bros. Auctioneers, Inc. ............ 5,609,838 100,700 Rockwell Automation, Inc. .................. 8,773,991 1,039,200 Southwest Airlines Co. ..................... 12,210,600 1,900 Thomas & Betts Corp. (a) ................... 110,143 The accompanying notes are an integral part of these financial statements. 17 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY STOCK FUND -------------------------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED)--(CONTINUED) Shares Value -------------------------------------------------------------------------------- INDUSTRIALS (CONTINUED) 36,000 Union Pacific Corp. ........................ $ 3,724,920 140,000 United Parcel Service, Inc. - Class B ...... 10,495,800 ----------- 114,561,499 ----------- INFORMATION TECHNOLOGY - 23.2% 45,650 Accenture Ltd. - Class A ................... 2,607,984 237,200 Altera Corp. ............................... 11,551,640 268,700 Applied Materials, Inc. .................... 4,215,903 24,577 ASML Holding N.V. - ADR .................... 1,026,336 200,000 Corning, Inc. .............................. 4,188,000 100,000 Diebold, Inc. .............................. 3,380,000 416,400 Electronic Arts, Inc. (a) .................. 8,402,952 204,600 EMC Corp. (a) .............................. 5,798,364 4,900 Google, Inc. - Class A (a) ................. 2,666,090 46,000 Hewlett-Packard Co. ........................ 1,857,020 260,000 Intel Corp. ................................ 6,029,400 94,700 Intuit, Inc. (a) ........................... 5,261,532 302,600 KLA-Tencor Corp. ........................... 13,284,140 1,664,700 L.M. Ericsson Telephone Co. - ADR .......... 25,303,440 838,700 Microsoft Corp. ............................ 21,822,974 14,112 Motorola Mobility Holdings, Inc. (a) ....... 367,759 16,128 Motorola Solutions, Inc. (a) ............... 739,952 81,400 NeuStar, Inc. - Class A (a) ................ 2,188,846 284,000 NVIDIA Corp. (a) ........................... 5,680,000 50,700 Oracle Corp. ............................... 1,827,735 45,900 QUALCOMM, Inc. ............................. 2,608,956 212,600 Research In Motion Ltd. (a) ................ 10,342,990 225,800 Symantec Corp. (a) ......................... 4,436,970 787,800 Texas Instruments, Inc. .................... 27,990,534 90,000 Visa, Inc. - Class A ....................... 7,030,800 100,000 Xilinx, Inc. ............................... 3,486,000 24,800 Yahoo!, Inc. (a) ........................... 440,200 ----------- 184,536,517 ----------- MATERIALS - 6.5% 113,600 Freeport-McMoRan Copper & Gold, Inc. ....... 6,251,408 71,900 Monsanto Co. ............................... 4,892,076 44,100 Newmont Mining Corp. ....................... 2,584,701 The accompanying notes are an integral part of these financial statements. 18 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY STOCK FUND -------------------------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED)--(CONTINUED) Shares Value -------------------------------------------------------------------------------- MATERIALS (CONTINUED) 159,500 Potash Corp. of Saskatchewan, Inc. ......... $ 8,992,610 298,500 Schweitzer-Mauduit International, Inc. ..... 15,474,240 309,293 Vulcan Materials Co. ....................... 13,980,044 ----------- 52,175,079 ----------- TELECOMMUNICATION SERVICES - 0.0% 56,600 Sprint Nextel Corp. (a) .................... 293,188 ----------- UTILITIES -1.4% 80,000 Edison International ....................... 3,141,600 50,000 NextEra Energy, Inc. ....................... 2,828,500 152,600 Public Service Enterprise Group, Inc. ...... 4,909,142 ----------- 10,879,242 ----------- TOTAL COMMON STOCKS (Cost $627,809,331) .................................... $ 781,019,811 ------------- SHORT TERM INVESTMENTS - 1.8% 14,606,275 Dreyfus Treasury Prime Cash Management Fund $ 14,606,275 ------------ TOTAL SHORT TERM INVESTMENTS (Cost $14,606,275) ..................................... 14,606,275 ------------ TOTAL INVESTMENTS - 99.8% (Cost $642,415,606) .................................... 795,626,086 Other Assets in Excess of Liabilities - 0.2% ............ 1,525,370 ------------ TOTAL NET ASSETS - 100.0% ............................... $797,151,456 ============ -------- Percentages are stated as a percent of net assets. ADR - American Depository Receipt. CHF - Swiss Franc. (a) Non-Income Producing. The Global Industry Classification Standard (GICS (R)) was developed by and is the exclusive property of MSCI Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by PRIMECAP Management Company. The accompanying notes are an integral part of these financial statements. 19 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY GROWTH FUND ---------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED) Shares Value -------------------------------------------------------------------------------- COMMON STOCKS - 95.7% CONSUMER DISCRETIONARY - 7.0% 250,000 99 Cents Only Stores (a) ................... $ 5,040,000 77,900 Amazon.com, Inc. (a) ....................... 15,307,350 357,900 Ascena Retail Group, Inc. (a) .............. 11,198,691 275,600 Bed Bath & Beyond, Inc. (a) ................ 15,466,672 717,000 CarMax, Inc. (a) ........................... 24,879,900 80,000 Carnival Corp. ............................. 3,045,600 166,200 DIRECTV Group, Inc. (The) (a) .............. 8,075,658 752,000 DreamWorks Animation SKG, Inc. (a) ......... 19,920,480 228,500 Gentex Corp. . ............................. 7,163,475 55,850 Kohl's Corp................................. 2,943,854 100,000 Limited Brands, Inc......................... 4,116,000 400,000 Mattel, Inc................................. 10,688,000 182,300 Quiksilver, Inc. (a) ....................... 793,005 252,100 Sony Corp. - ADR ........................... 7,136,951 63,000 TJX Cos, Inc................................ 3,378,060 -------------- 139,153,696 -------------- CONSUMER STAPLES - 0.3% 100,000 Procter & Gamble Co. ....................... 6,490,000 -------------- ENERGY - 6.7% 140,000 Cenovus Energy, Inc. ....................... 5,376,000 104,400 EnCana Corp. ............................... 3,499,488 140,000 EOG Resources, Inc. ........................ 15,807,400 120,000 Hess Corp. ................................. 10,315,200 300,000 McDermott International, Inc. (a) .......... 6,927,000 180,000 National Oilwell Varco, Inc. ............... 13,804,200 80,000 Noble Energy, Inc. ......................... 7,701,600 170,000 Oceaneering International, Inc. (a) ........ 14,861,400 187,900 Petroleo Brasileiro SA - ADR ............... 6,270,223 340,000 Range Resources Corp. ...................... 19,193,000 173,100 Schlumberger Ltd. .......................... 15,535,725 300,000 Southwestern Energy Co. (a) ................ 13,158,000 -------------- 132,449,236 -------------- The accompanying notes are an integral part of these financial statements. 20 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY GROWTH FUND -------------------------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED)--CONTINUED Shares Value -------------------------------------------------------------------------------- FINANCIALS - 3.3% 533,900 Charles Schwab Corp. (The) ................. $ 9,775,709 100,000 Berkshire Hathaway, Inc. - Class B (a) ..... 8,330,000 180,000 Chubb Corp. ................................ 11,734,200 1,045,700 Marsh & McLennan Cos., Inc. ................ 31,663,796 140,000 Progressive Corp. (The) .................... 3,071,600 -------------- 64,575,305 -------------- HEALTH CARE - 36.8% 850,000 Abiomed, Inc. (a) .......................... 14,773,000 2,705,000 Accuray, Inc. (a) .......................... 24,047,450 199,400 Affymetrix, Inc. (a) ....................... 1,076,760 1,193,300 Amgen, Inc. (a) ............................ 67,839,105 451,500 Biogen Idec, Inc. (a) ...................... 43,953,525 298,200 BioMarin Pharmaceutical, Inc. (a) .......... 8,018,598 672,500 Boston Scientific Corp. (a) ................ 5,037,025 1,340,100 Cepheid, Inc. (a) .......................... 43,298,631 40,000 Cerner Corp. (a) ........................... 4,807,200 2,253,728 Conceptus, Inc. (a) (b) .................... 34,775,023 1,271,500 Dendreon Corp. (a) ......................... 55,221,245 787,200 Eli Lilly & Co. ............................ 29,134,272 88,800 GlaxoSmithKline PLC - ADR .................. 3,877,008 270,000 Illumina, Inc. (a) ......................... 19,164,600 5,620,000 ImmunoGen, Inc. (a) (b) .................... 75,083,200 270,000 Johnson & Johnson .......................... 17,744,400 200,000 Kinetic Concepts, Inc. (a) ................. 11,806,000 120,000 Life Technologies Corp. (a) ................ 6,624,000 872,300 Medtronic, Inc. ............................ 36,418,525 300,000 Momenta Pharmaceuticals, Inc. (a) .......... 5,661,000 2,930,600 Nektar Therapeutics (a) .................... 30,419,628 344,750 Novartis AG - ADR .......................... 20,398,858 145,000 NuVasive, Inc. (a) ......................... 4,479,050 260,000 OraSure Technologies, Inc. (a) ............. 2,290,600 457,632 Roche Holding AG - CHF ..................... 74,226,323 4,179,600 Seattle Genetics, Inc. (a) ................. 69,423,156 136,200 SurModics, Inc. (a) ........................ 2,092,032 168,500 Waters Corp. (a) ........................... 16,513,000 -------------- 728,203,214 -------------- The accompanying notes are an integral part of these financial statements. 21 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY GROWTH FUND -------------------------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED)--CONTINUED Shares Value -------------------------------------------------------------------------------- INDUSTRIALS - 9.4% 637,000 AECOM Technology Corp. (a) ................. $ 17,364,620 2,317,300 AMR Corp. (a) .............................. 13,602,551 680,000 Babcock & Wilcox Co. (a) ................... 21,358,800 300,000 C. H. Robinson Worldwide, Inc. ............. 24,054,000 133,600 Caterpillar, Inc. .......................... 15,418,776 187,565 Colfax Corp. (a) ........................... 4,098,295 320,000 Expeditors International Washington, Inc. .. 17,366,400 50,600 FedEx Corp. ................................ 4,840,902 850,150 JetBlue Airways Corp. (a) .................. 4,811,849 107,800 Pall Corp. ................................. 6,299,832 389,000 Ritchie Bros. Auctioneers, Inc. ............ 12,164,030 50,000 Rockwell Automation, Inc. .................. 4,356,500 2,376,600 Southwest Airlines Co. ..................... 27,925,050 182,100 United Parcel Service, Inc. - Class B ...... 13,652,037 -------------- 187,313,642 -------------- INFORMATION TECHNOLOGY - 29.2% 57,850 Accenture Ltd. - Class A ................... 3,304,970 702,500 Adobe Systems, Inc. (a) .................... 23,568,875 200,000 Akamai Technologies, Inc. (a) .............. 6,888,000 1,040,000 Altera Corp. ............................... 50,648,000 389,300 Applied Materials, Inc. .................... 6,108,117 116,000 ASML Holding N.V. - ADR .................... 4,844,160 138,000 Avid Technology, Inc. (a) .................. 2,564,040 30,000 Cisco Systems, Inc. (a) .................... 526,800 198,800 Corning, Inc. .............................. 4,162,872 350,100 Cree, Inc. (a) ............................. 14,263,074 37,000 Cymer, Inc. (a) ............................ 1,780,070 1,752,000 Electronic Arts, Inc. (a) .................. 35,355,360 783,700 EMC Corp. (a) .............................. 22,210,058 2,160,000 Flextronics International Ltd. (a) ......... 15,055,200 833,450 FormFactor, Inc. (a) ....................... 8,642,877 62,580 Google, Inc. - Class A (a) ................. 34,049,778 530,000 GSI Commerce, Inc. (a) ..................... 15,513,100 90,000 Hewlett-Packard Co. ........................ 3,633,300 250,700 Intel Corp. ................................ 5,813,733 390,400 Intuit, Inc. (a) ........................... 21,690,624 331,300 KLA-Tencor Corp. ........................... 14,544,070 2,362,800 L.M. Ericsson Telephone Co. - ADR .......... 35,914,560 5,500 MasterCard, Inc. - Class A .................. 1,517,395 The accompanying notes are an integral part of these financial statements. 22 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY GROWTH FUND -------------------------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED)--CONTINUED Shares Value -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY (CONTINUED) 525,000 Micron Technology, Inc. (a) ................ $ 5,927,250 676,300 Microsoft Corp. ............................ 17,597,326 30,737 Motorola Mobility Holdings, Inc. (a) ....... 801,006 35,128 Motorola Solutions, Inc. (a) ............... 1,611,673 195,900 NeuStar, Inc. - Class A (a) ................ 5,267,751 1,530,000 Nuance Communications, Inc. (a) ............ 31,671,000 540,000 NVIDIA Corp. (a) ........................... 10,800,000 231,100 Oracle Corp. ............................... 8,331,155 90,000 QUALCOMM, Inc. ............................. 5,115,600 409,800 Rambus, Inc. (a) ........................... 8,155,020 598,850 Research In Motion Ltd. (a) ................ 29,134,052 151,800 SanDisk Corp. (a) .......................... 7,459,452 680,000 Stratasys, Inc. (a) ........................ 36,618,000 536,400 Symantec Corp. (a) ......................... 10,540,260 884,000 Texas Instruments, Inc. .................... 31,408,520 200,000 Trimble Navigation Ltd. (a) ................ 9,368,000 265,000 Visa, Inc. - Class A ....................... 20,701,800 120,000 Xilinx, Inc. ............................... 4,183,200 -------------- 577,290,098 -------------- MATERIALS - 2.9% 470,900 Monsanto Co. ............................... 32,040,036 117,600 Potash Corp. of Saskatchewan, Inc. ......... 6,630,288 17,250 Praxair, Inc. .............................. 1,835,745 378,200 Vulcan Materials Co. ....................... 17,094,640 -------------- 57,600,709 -------------- TELECOMMUNICATION SERVICES - 0.1% 292,450 Sprint Nextel Corp. (a) .................... 1,514,891 -------------- TOTAL COMMON STOCKS (Cost $1,492,157,673) ................................. $1,894,590,791 -------------- The accompanying notes are an integral part of these financial statements. 23 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY GROWTH FUND -------------------------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED)--CONTINUED Shares Value -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS - 4.2% 83,064,411 Dreyfus Treasury Prime Cash Management Fund $ 83,064,411 -------------- TOTAL SHORT TERM INVESTMENTS (Cost $83,064,411) ..................................... 83,064,411 -------------- TOTAL INVESTMENTS - 99.9% (Cost $1,575,222,084) .................................. 1,977,655,202 Other Assets in Excess of Liabilities - 0.1% ............ 1,237,973 -------------- TOTAL NET ASSETS - 100.0% ............................... $1,978,893,175 ============== ------ Percentages are stated as a percent of net assets. ADR - American Depository Receipt. CHF - Swiss Franc. (a) Non-Income Producing. (b) Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities of such company. The Global Industry Classification Standard (GICS (R)) was developed by and is the exclusive property of MSCI Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by PRIMECAP Management Company. The accompanying notes are an integral part of these financial statements. 24 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY AGGRESSIVE GROWTH FUND ---------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED)--CONTINUED Shares Value -------------------------------------------------------------------------------- COMMON STOCKS - 95.5% CONSUMER DISCRETIONARY - 4.7% 63,000 Amazon.com, Inc. (a) ....................... $ 12,379,500 2,000 Bravo Brio Restaurant Group, Inc. (a) ...... 41,280 333,400 CarMax, Inc. (a) ........................... 11,568,980 74,700 DIRECTV Group, Inc. (The) (a) .............. 3,629,673 828,300 DreamWorks Animation SKG, Inc. (a) ......... 21,941,667 140,000 Gentex Corp. ............................... 4,389,000 229,000 Quiksilver, Inc. (a) ....................... 996,150 -------------- 54,946,250 -------------- CONSUMER STAPLES - 1.4% 3,413,405 Smart Balance, Inc. (a) (b) ................ 16,316,076 -------------- ENERGY - 4.4% 200,000 Cabot Oil & Gas Corp. ...................... 11,256,000 50,000 EOG Resources, Inc. ........................ 5,645,500 120,000 National Oilwell Varco, Inc. ............... 9,202,800 84,000 Oceaneering International, Inc. (a) ........ 7,343,280 200,000 Range Resources Corp. ...................... 11,290,000 520,000 Rex Energy Corp. (a) ....................... 6,671,600 -------------- 51,409,180 -------------- FINANCIALS - 1.3% 605,820 MarketAxess Holdings, Inc. ................. 14,751,717 -------------- HEALTH CARE - 38.8% 1,533,373 Abiomed, Inc. (a) .......................... 26,650,023 2,330,000 Accuray, Inc. (a) .......................... 20,713,700 172,000 Affymetrix, Inc. (a) ....................... 928,800 205,000 Biogen Idec, Inc. (a) ...................... 19,956,750 590,300 BioMarin Pharmaceutical, Inc. (a) .......... 15,873,167 791,700 Boston Scientific Corp. (a) ................ 5,929,833 591,600 Cardica, Inc. (a) .......................... 2,342,736 1,172,800 Cepheid, Inc. (a) .......................... 37,893,168 1,669,750 Conceptus, Inc. (a) (b) .................... 25,764,242 1,031,800 Dendreon Corp. (a) ......................... 44,811,074 5,625,000 Dyax Corp. (a) (b) ......................... 11,250,000 3,330,250 ImmunoGen, Inc. (a) ........................ 44,492,140 360,000 InterMune, Inc. (a) ........................ 16,070,400 198,500 Kinetic Concepts, Inc. (a) ................. 11,717,455 706,200 Luminex Corp. (a) .......................... 13,693,218 The accompanying notes are an integral part of these financial statements. 25 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY AGGRESSIVE GROWTH FUND -------------------------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED)--CONTINUED Shares Value -------------------------------------------------------------------------------- HEALTH CARE (CONTINUED) 80,000 Momenta Pharmaceuticals, Inc. (a) .......... $ 1,509,600 1,932,000 Nektar Therapeutics (a) ................... 20,054,160 155,000 NuVasive, Inc. (a) ......................... 4,787,950 1,742,600 OraSure Technologies, Inc. (a) ............. 15,352,306 1,768,339 Pharmacyclics, Inc. (a) .................... 11,724,088 317,200 Roche Holding AG - CHF ..................... 51,448,740 2,747,300 Seattle Genetics, Inc. (a) ................. 45,632,653 116,000 SurModics, Inc. (a) ........................ 1,781,760 -------------- 450,377,963 -------------- INDUSTRIALS - 9.1% 201,900 AECOM Technology Corp. (a) ................. 5,503,794 195,000 Alaska Air Group, Inc. (a) ................. 12,844,650 2,130,000 AMR Corp. (a) .............................. 12,503,100 433,700 Arkansas Best Corp. ........................ 9,979,437 140,000 C. H. Robinson Worldwide, Inc. ............. 11,225,200 441,210 Colfax Corp. (a) ........................... 9,640,438 2,224,525 JetBlue Airways Corp. (a) .................. 12,590,812 82,600 Pall Corp. ................................. 4,827,144 293,100 Ritchie Bros. Auctioneers, Inc. ............ 9,165,237 582,100 Southwest Airlines Co. ..................... 6,839,675 234,000 US Airways Group, Inc. (a) ................. 2,127,060 45,000 USA Truck, Inc. (a) ........................ 560,250 470,000 Vitran Corp, Inc. (a) ...................... 7,327,300 2,600 Zipcar, Inc. (a) ........................... 67,054 -------------- 105,201,151 -------------- INFORMATION TECHNOLOGY - 33.1% 615,000 Adobe Systems, Inc. (a) .................... 20,633,250 180,000 Akamai Technologies, Inc. (a) .............. 6,199,200 570,000 Altera Corp. ............................... 27,759,000 247,777 ASML Holding N.V. - ADR .................... 10,347,167 115,000 Avid Technology, Inc. (a) .................. 2,136,700 273,500 Cree, Inc. (a) ............................. 11,142,390 96,500 Cymer, Inc. (a) ............................ 4,642,615 1,083,400 Electronic Arts, Inc. (a) .................. 21,863,012 200,000 EMC Corp. (a) .............................. 5,668,000 270,000 FARO Technologies, Inc. (a) ................ 11,655,900 240,000 FEI Co. (a) ................................ 7,790,400 716,300 FormFactor, Inc. (a) ....................... 7,428,031 The accompanying notes are an integral part of these financial statements. 26 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY AGGRESSIVE GROWTH FUND -------------------------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED)--CONTINUED Shares Value -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY (CONTINUED) 36,600 Google, Inc. - Class A (a) ................. $ 19,914,060 812,000 GSI Commerce, Inc. (a) ..................... 23,767,240 1,087,100 Guidance Software, Inc. (a) ................ 8,685,929 275,000 Intuit, Inc. (a) ........................... 15,279,000 365,300 KLA-Tencor Corp. ........................... 16,036,670 800,000 Micron Technology, Inc. (a) ................ 9,032,000 420,000 Monster Worldwide, Inc. (a) ................ 6,892,200 149,200 NeuStar, Inc. - Class A (a) ................ 4,011,988 570,000 Nuance Communications, Inc. (a) ............ 11,799,000 326,550 NVIDIA Corp. (a) ........................... 6,531,000 311,800 Rambus, Inc. (a) ........................... 6,204,820 481,200 Research In Motion Ltd. (a) ................ 23,410,380 5,400 Responsys, Inc. (a) ........................ 86,292 260,000 RightNow Technologies, Inc. (a) ............ 9,406,800 83,100 SanDisk Corp. (a) .......................... 4,083,534 733,500 SMART Technologies, Inc. - Class A (a) ..... 7,305,660 637,700 Stratasys, Inc. (a) ........................ 34,340,145 230,100 Symantec Corp. (a) ......................... 4,521,465 120,000 Trimble Navigation Ltd. (a) ................ 5,620,800 1,104,600 Websense, Inc. (a) ......................... 28,487,634 60,000 Yahoo!, Inc. (a) ........................... 1,065,000 -------------- 383,747,282 -------------- MATERIALS - 2.6% 306,800 Monsanto Co. . ............................. 20,874,672 63,200 Potash Corp. of Saskatchewan, Inc. ......... 9,201,216 -------------- 30,075,888 -------------- TELECOMMUNICATION SERVICES - 0.1% 296,700 Sprint Nextel Corp. (a) .................... 1,536,906 -------------- TOTAL COMMON STOCKS (Cost $852,312,143) .................................... $1,108,362,413 -------------- The accompanying notes are an integral part of these financial statements. 27 SCHEDULE OF INVESTMENTS PRIMECAP ODYSSEY AGGRESSIVE GROWTH FUND -------------------------------------------------------------------------------- APRIL 30, 2011 (UNAUDITED)--CONTINUED Shares Value -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS - 4.7% 54,159,249 Dreyfus Treasury Prime Cash Management Fund $ 54,159,249 -------------- TOTAL SHORT TERM INVESTMENTS (Cost $54,159,249) ..................................... 54,159,249 -------------- TOTAL INVESTMENTS - 100.2% (Cost $906,471,392) .................................... 1,162,521,662 Liabilities in Excess of Other Assets - (0.2)% .......... (2,504,522) -------------- TOTAL NET ASSETS - 100.0% ............................... $1,160,017,140 ============== ------ Percentages are stated as a percent of net assets. ADR - American Depository Receipt. CHF - Swiss Franc. (a) Non-Income Producing. (b) Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities of such company. The Global Industry Classification Standard (GICS (R)) was developed by and is the exclusive property of MSCI Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by PRIMECAP Management Company. The accompanying notes are an integral part of these financial statements.
28
STATEMENTS OF ASSETS AND LIABILITIES PRIMECAP ODYSSEY FUNDS APRIL 30, 2011 (UNAUDITED) ------------------------------------------------------------------------- PRIMECAP PRIMECAP PRIMECAP ODYSSEY ODYSSEY ODYSSEY AGGRESSIVE STOCK FUND GROWTH FUND GROWTH FUND ---------- ----------- ------------------ ASSETS Investments, at cost ............... $642,415,606 $1,575,222,084 $ 906,471,392 ============ ============== ============== Investments, at value (unaffiliated) $795,626,086 $1,867,796,979 $1,109,191,344 Investments, at value (affiliated) -- 109,858,223 53,330,318 Receivables: Securities sold ................... 1,530,067 5,606,545 1,280,723 Dividends and interest ............ 1,453,117 2,259,133 717,842 Fund shares sold .................. 964,781 3,704,574 3,098,456 Prepaid expenses and other assets 29,874 68,166 48,980 ------------ -------------- -------------- Total assets ..................... 799,603,925 1,989,293,620 1,167,667,663 ------------ -------------- -------------- LIABILITIES Payable for securities purchased ... 878,187 7,035,137 5,333,245 Payable for fund shares repurchased 245,755 644,821 665,123 Payable to advisor (Note 6) ........ 1,172,663 2,455,013 1,430,031 Other accrued expenses & liabilities 155,864 265,474 222,124 ------------ -------------- -------------- Total liabilities ................ 2,452,469 10,400,445 7,650,523 ------------ -------------- -------------- NET ASSETS ........................... $797,151,456 $1,978,893,175 $1,160,017,140 ============ ============== ============== Number of shares issued and outstanding (unlimited shares authorized, $0.01 par value) ....... 51,508,727 114,756,407 61,741,037 ============ ============== ============== Net asset value, offering and redemption price per share ......... $ 15.48 $ 17.24 $ 18.79 ============ ============== ============== COMPONENTS OF NET ASSETS Paid-in capital .................... $666,524,804 $ 1,558,857,061 $ 888,885,988 Undistributed net investment income ................. 4,692,079 3,360,021 -- Accumulated net realized gain (loss) on investments ....................... (27,329,387) 14,131,293 15,020,094 Accumulated net unrealized appreciation on investments ........ 153,263,960 402,544,800 256,111,058 ------------ -------------- -------------- Net assets ....................... $797,151,456 $1,978,893,175 $1,160,017,140 ============ ============== ============== The accompanying notes are an integral part of these financial statements.
29
STATEMENTS OF OPERATIONS PRIMECAP ODYSSEY FUNDS ---------------------------------------------------------------- FOR THE SIX MONTHS ENDED APRIL 30, 2011 (UNAUDITED) PRIMECAP PRIMECAP PRIMECAP ODYSSEY ODYSSEY ODYSSEY AGGRESSIVE STOCK FUND GROWTH FUND GROWTH FUND ---------- ----------- ----------- INVESTMENT INCOME Income Dividends (net of foreign taxes withheld of $527,635, $756,505, and $344,207, respectively) ... $ 8,198,292 $ 9,239,844 $ 2,643,575 Interest income ................ 232 332 221 ------------ ------------ ------------ Total income .................. 8,198,524 9,240,176 2,643,796 ------------ ------------ ------------ Expenses Advisory fees .................. 2,175,202 4,659,976 2,680,913 Fund administration and accounting fees ............... 163,775 356,308 201,042 Professional fees .............. 27,349 27,738 27,388 Shareholder servicing fees ..... 81,440 276,725 200,050 Registration fees .............. 15,168 33,295 29,395 Custody fees ................... 36,550 68,100 44,660 Trustee fees ................... 14,430 14,599 14,399 Printing and mailing ........... 9,444 36,290 30,565 Other .......................... 33,859 56,906 36,825 ------------ ------------ ------------ Total expenses ................ 2,557,217 5,529,937 3,265,237 ------------ ------------ ------------ Net investment income (loss) 5,641,307 3,710,239 (621,441) ------------ ------------ ------------ REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on investments 5,469,786 28,600,036 15,097,101 ------------ ------------ ------------ Change in net unrealized appreciation on investments .... 99,906,734 244,879,598 167,701,156 ------------ ------------ ------------ Net realized and unrealized gain on investments ................. 105,376,520 273,479,634 182,798,257 ------------ ------------ ------------ Net increase in net assets resulting from operations .... $111,017,827 $277,189,873 $182,176,816 ============ ============ ============ The accompanying notes are an integral part of these financial statements.
30
STATEMENT OF CHANGES IN NET ASSETS PRIMECAP ODYSSEY STOCK FUND ---------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED APRIL 30, 2011(1) OCTOBER 31, 2010 -------------- ---------------- INCREASE IN NET ASSETS FROM: OPERATIONS Net investment income ................. $ 5,641,307 $ 4,596,688 Net realized gain on investments ...... 5,469,786 1,276,438 Change in net unrealized appreciation on investments ....................... 99,906,734 52,908,147 ------------- ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........... 111,017,827 58,781,273 ------------- ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME .............. (5,099,941) (1,831,079) ------------- ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold ............. 286,834,925 403,570,379 Proceeds from reinvestment of distribution. ..................... 4,774,772 1,822,043 Cost of shares redeemed ............... (207,442,119) (34,962,948) Redemption fee proceeds ............... 6,436 7,738 ------------- ------------ NET INCREASE FROM CAPITAL SHARE TRANSACTIONS ................... 84,174,014 370,437,212 ------------- ------------ TOTAL INCREASE IN NET ASSETS .......... 190,091,900 427,387,406 NET ASSETS Beginning of period ................... 607,059,556 179,672,150 ------------- ------------ End of period (includes undistributed net investment income of $4,692,079 and $4,150,713, respectively) ............ $ 797,151,456 $607,059,556 ============= ============ CHANGE IN CAPITAL SHARES Shares outstanding, beginning of period ............................ 45,027,268 15,370,380 ------------- ------------ Shares sold ........................... 20,128,907 32,259,418 Shares issued on reinvestment of distributions ..................... 341,543 144,721 Shares repurchased .................... (13,988,991) (2,747,251) ------------- ------------ Net increase in capital shares ....... 6,481,459 29,656,888 ------------- ------------ Shares outstanding, end of period .... 51,508,727 45,027,268 ============= ============ ------ (1) Unaudited. The accompanying notes are an integral part of these financial statements.
31
STATEMENT OF CHANGES IN NET ASSETS PRIMECAP ODYSSEY GROWTH FUND ---------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED APRIL 30, 2011(1) OCTOBER 31, 2010 -------------- ---------------- INCREASE IN NET ASSETS FROM: OPERATIONS Net investment income .................. $ 3,710,239 $ 1,633,753 Net realized gain on investments ....... 28,600,036 999,154 Change in net unrealized appreciation on investments ........... 244,879,598 189,779,096 -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ 277,189,873 192,412,003 -------------- -------------- DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME ............... (1,416,348) (1,825,837) -------------- -------------- CAPITAL SHARE TRANSACTIONS Proceeds from shares sold .............. 402,281,006 745,167,382 Proceeds from reinvestment of distribution ....................... 1,337,875 1,740,542 Cost of shares redeemed ................ (151,707,813) (192,905,219) Redemption fee proceeds ................ 42,676 87,258 -------------- -------------- NET INCREASE FROM CAPITAL SHARE TRANSACTIONS ......................... 251,953,744 554,089,963 -------------- -------------- TOTAL INCREASE IN NET ASSETS .......... 527,727,269 744,676,129 NET ASSETS Beginning of period .................... 1,451,165,906 706,489,777 -------------- -------------- End of period (including undistributed net investment income of $3,360,021 and $1,066,130, respectively) ............. $1,978,893,175 $1,451,165,906 ============== ============== CHANGE IN CAPITAL SHARES Shares outstanding, beginning of period 98,706,971 57,986,448 -------------- -------------- Shares sold ........................... 25,611,553 54,837,387 Shares issued on reinvestment of distributions ..................... 87,787 132,764 Shares repurchased .................... (9,649,904) (14,249,628) -------------- -------------- Net increase in capital shares ....... 16,049,436 40,720,523 -------------- -------------- Shares outstanding, end of period ...... 114,756,407 98,706,971 ============== ============== ------ (1) Unaudited. The accompanying notes are an integral part of these financial statements.
32
STATEMENT OF CHANGES IN NET ASSETS PRIMECAP ODYSSEY AGGRESSIVE GROWTH FUND ---------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED APRIL 30, 2011(1) OCTOBER 31, 2010 -------------- ---------------- INCREASE (DECREASE) IN NET ASSETS FROM: OPERATIONS Net investment loss ................ $ (621,441) $ (2,543,607) Net realized gain on investments ... 15,097,101 41,684,298 Change in net unrealized appreciation on investments ....... 167,701,156 102,743,903 -------------- ------------ Net increase in net assets resulting from operations ........ 182,176,816 141,884,594 -------------- ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM REALIZED GAIN ON INVESTMENTS .... (27,881,437) -- -------------- ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold .......... 248,488,498 402,604,235 Proceeds from reinvestment of distribution ................... 27,335,474 -- Cost of shares redeemed ............ (80,084,741) (98,500,526) Redemption fee proceeds ............ 34,155 129,280 -------------- ------------ NET INCREASE FROM CAPITAL SHARE TRANSACTIONS ............... 195,773,386 304,232,989 -------------- ------------ TOTAL INCREASE IN NET ASSETS ...... 350,068,765 446,117,583 NET ASSETS Beginning of period ................ 809,948,375 363,830,792 -------------- ------------ End of period ...................... $1,160,017,140 $809,948,375 ============== ============ CHANGE IN CAPITAL SHARES Shares outstanding, beginning of period ............... 50,097,938 29,505,941 -------------- ------------ Shares sold ........................ 14,649,646 27,379,055 Shares issued on reinvestment of distributions ..... 1,689,461 -- Shares repurchased ................. (4,696,008) (6,787,058) -------------- ------------ Net increase in capital shares .... 11,643,099 20,591,997 -------------- ------------ Shares outstanding, end of period 61,741,037 50,097,938 ============== ============ ------ (1) Unaudited. The accompanying notes are an integral part of these financial statements.
33
Financial Highlights PRIMECAP Odyssey Stock Fund ---------------------------------------------------------------- FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT THE PERIOD THE FOLLOWING INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS SEMIANNUAL REPORT. SIX MONTHS YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED APR. 30, OCT. 31, OCT. 31, OCT. 31, OCT. 31, OCT. 31, 2011(1) 2010 2009 2008 2007 2006 --------- -------- -------- -------- -------- -------- Net asset value, beginning of period $13.48 $11.69 $10.10 $15.22 $13.48 $11.48 INCOME FROM INVESTMENT OPERATIONS: Net investment income .............. 0.11 0.095 0.10 0.06 0.07 0.03 Net realized and unrealized gain (loss) on investments ........ 2.00 1.79 1.55 (4.99) 1.79 1.97 ------ ------ ------ ------ ------ ------ Total from investment operations ..... 2.11 1.88 1.65 (4.93) 1.86 2.00 ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Dividends from net investment income (0.11) (0.09) (0.06) (0.07) (0.04) (0.00)(4) Distributions from realized gain ... -- -- -- (0.12) (0.08) (0.00)(4) ------ ------ ------ ------ ------ ------ Total distributions .................. (0.11) (0.09) (0.06) (0.19) (0.12) (0.00) ------ ------ ------ ------ ------ ------ Redemption fee proceeds .............. 0.00(4) 0.00(4) 0.00(4) 0.00(4) 0.00(4) 0.00(4) ------ ------ ------ ------ ------ ------ Net asset value, end of period ....... $15.48 $13.48 $11.69 $10.10 $15.22 $13.48 ====== ====== ====== ====== ====== ====== Total return ......................... 15.72%(3) 16.14% 16.55% (32.73%) 13.88% 17.48% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period .......... $797.2 $607.1 $179.7 $187.0 $ 216.4 $ 88.4 (millions) RATIO OF EXPENSES TO AVERAGE NET ASSETS ......................... 0.65%(2) 0.71% 0.80% 0.79% 0.81% 0.99% RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .............. 1.44%(2) 1.37%(5) 0.96% 0.51% 0.59% 0.41% Portfolio turnover rate .............. 21.59%(3) 3.35% 33.55% 9.66% 5.87% 4.09% ------ (1) Unaudited. (2) Annualized. (3) Not Annualized. (4) Amount represents less than $0.01 per share. (5) Investment income per share reflects a special dividend of $0.05. Excluding the special dividend, the ratio of net investment income to average net assets would have been 0.74%. The accompanying notes are an integral part of these financial statements.
34
FINANCIAL HIGHLIGHTS PRIMECAP ODYSSEY GROWTH FUND ---------------------------------------------------------------- FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT THE PERIOD THE FOLLOWING INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS SEMIANNUAL REPORT. SIX MONTHS YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED APR. 30, OCT. 31, OCT. 31, OCT. 31, OCT. 31, OCT. 31, 2011(1) 2010 2009 2008 2007 2006 --------- -------- -------- -------- -------- -------- Net asset value, beginning of period ................ $ 14.70 $ 12.18 $10.07 $15.71 $13.76 $11.62 -------- -------- ------ ------ ------ ------ Income from investment operations: Net investment income .............. 0.03 0.02 0.03 0.03 0.04 0.01 Net realized and unrealized gain (loss) on investments ........ 2.52 2.53 2.11 (5.59) 2.07 2.14 -------- -------- ------ ------ ------ ------ Total from investment operations ..... 2.55 2.55 2.14 (5.56) 2.11 2.15 -------- -------- ------ ------ ------ ------ LESS DISTRIBUTIONS: Dividends from net investment income (0.01) (0.03) (0.03) (0.04) (0.02) (0.00)(4) Distributions from realized gain ... -- -- -- (0.04) (0.14) (0.01) -------- -------- ------ ------ ------ ------ Total distributions ................. (0.01) (0.03) (0.03) (0.08) (0.16) (0.01) -------- -------- ------ ------ ------ ------ Redemption fee proceeds ............. 0.00(4) 0.00(4) 0.00(4) 0.00(4) 0.00(4) 0.00(4) -------- -------- ------ ------ ------ ------ Net asset value, end of period ....... $ 17.24 $ 14.70 $12.18 $10.07 $15.71 $13.76 ======== ======== ====== ====== ====== ====== Total return ......................... 17.39%(3) 20.96% 21.39% (35.55%) 15.46% 18.49% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period ............ $1,978.9 $1,451.2 $706.5 $412.4 $512.0 $202.2 (millions) Ratio of expenses to average net ..... 0.66%(2) 0.68% 0.71% 0.71% 0.75% 0.89% assets Ratio of net investment income to average net assets ................ 0.44%(2) 0.15% 0.35% 0.26% 0.30% 0.19% Portfolio turnover rate .............. 6.10%(3) 4.93% 12.49% 12.72% 4.83% 6.87% ------ (1) Unaudited. (2) Annualized. (3) Not Annualized. (4) Amount represents less than $0.01 per share. The accompanying notes are an integral part of these financial statements.
35
FINANCIAL HIGHLIGHTS PRIMECAP ODYSSEY AGGRESSIVE GROWTH FUND ---------------------------------------------------------------- FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT THE PERIOD THE FOLLOWING INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS SEMIANNUAL REPORT. SIX MONTHS YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED APR. 30, OCT. 31, OCT. 31, OCT. 31, OCT. 31, OCT. 31, 2011(1) 2010 2009 2008 2007 2006 --------- -------- -------- -------- -------- -------- Net asset value, beginning of period $ 16.17 $12.33 $ 9.46 $16.03 $13.92 $11.24 -------- ------ ------ ------ ------ ------ Income from investment operations: Net investment loss .............. (0.01) (0.05) (0.05) (0.06) (0.03) (0.02) Net realized and unrealized gain (loss) on investments ...... 3.16 3.89 2.92 (6.42) 2.34 2.70 -------- ------ ------ ------ ------ ------ Total from investment operations ... 3.15 3.84 2.87 (6.48) 2.31 2.68 -------- ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Distributions from realized gain ... (0.53) -- -- (0.09) (0.20) -- -------- ------ ------ ------ ------ ------ Redemption fee proceeds ............ 0.00(4) 0.00(4) 0.00(4) 0.00(4) 0.00(4) 0.00(4) -------- ------ ------ ------ ------ ------ Net asset value, end of period ..... $ 18.79 $16.17 $12.33 $ 9.46 $16.03 $13.92 ======== ====== ====== ====== ====== ====== Total return ....................... 20.00%(3) 31.14% 30.34% (40.60%) 16.76% 23.84% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period .......... $1,160.0 $809.9 $363.8 $225.4 $375.2 $119.9 (millions) Ratio of expenses to average net ... 0.68%(2) 0.71% 0.77% 0.78% 0.78% 0.99% assets Ratio of net investment loss to average net assets ............ (0.13%)(2) (0.45%) (0.54%) (0.46%) (0.25%) (0.33%) Portfolio turnover rate ............ 6.00%(3) 15.34% 19.70% 24.32% 6.02% 12.30% (1) Unaudited. (2) Annualized. (3) Not Annualized. (4) Amount represents less than $0.01 per share. The accompanying notes are an integral part of these financial statements.
36 NOTES TO FINANCIAL STATEMENTS PRIMECAP ODYSSEY FUNDS ---------------------------------------------------------------- FOR THE SIX MONTHS ENDED APRIL 30, 2011 (UNAUDITED) (1) ORGANIZATION PRIMECAP Odyssey Funds (the "Trust") was organized on June 8, 2004 as a Delaware statutory trust and is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). The Trust is comprised of three series: PRIMECAP Odyssey Stock Fund, PRIMECAP Odyssey Growth Fund, and PRIMECAP Odyssey Aggressive Growth Fund (the "Funds"), each of which is diversified within the meaning of the 1940 Act. PRIMECAP Management Company (the "Investment Advisor") serves as investment advisor to the Funds. Each Fund commenced operations on November 1, 2004. Each Fund's investment objective is to provide long-term capital appreciation. Each Fund is authorized to issue unlimited shares of beneficial interest. All shares within each Fund have equal rights with respect to voting. (2) SIGNIFICANT ACCOUNTING POLICIES The Funds consistently follow the accounting policies set forth below which are in conformity with accounting principles generally accepted in the United States of America. A. SECURITY VALUATION. Securities traded on a national securities exchange are valued at the last reported sales price at the close of regular trading on each day the exchanges are open for trading. Securities listed on the NASDAQ Global Market, the NASDAQ Global Select Market, and the NASDAQ Capital Market are valued using the NASDAQ Official Closing Price, which may not necessarily represent the last sale price. Quotations of foreign securities in a foreign currency are valued daily in U.S. dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined. Foreign currency exchange rates generally are determined prior to the close of the New York Stock Exchange (the "NYSE"). Securities traded on an exchange for which there have been no sales are valued at the mean between the bid and asked price. Securities for which quotations are not readily available are stated at their respective fair values as determined in good faith by a valuation committee of the Investment Advisor in accordance with procedures approved by the Trust's board of trustees. In determining fair value, the Funds take into account all relevant factors and available information. Consequently, the price of a security used by a Fund to calculate its net asset value per share ("NAV") may differ from quoted or published prices for the same security. Fair value pricing involves subjective judgments, and there is no single standard for determining a security's fair value. As a result, different mutual funds could reasonably arrive at a different fair value for the same security. It is possible that the fair value determined for a security is materially different from the value that could be realized upon the sale of that security or from the values that other mutual funds may determine. Investments in other funds are valued at their respective net asset values as determined by those funds, in accordance with the 1940 Act. 37 NOTES TO FINANCIAL STATEMENTS PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED APRIL 30, 2011 (UNAUDITED) - CONTINUED Foreign securities are recorded in the financial statements after their prices are converted to U.S. dollars based on the applicable exchange rate at the end of the period. The Funds do not isolate that portion of the results of operations arising as a result of changes in the currency exchange rate from the fluctuations arising as a result of changes in the market prices of investments during the period. B. SHARE VALUATION. The net asset value per share ("NAV") of a Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash or other assets, minus all liabilities (including estimated accrued expenses), by the total number of shares outstanding of the Fund. The result is rounded to the nearest cent. The Funds' shares will not be priced on the days on which the NYSE is closed for trading. C. FOREIGN CURRENCY. Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and dividend and interest income are converted into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such translations. The gain or loss resulting from changes in foreign exchange rates is included with net realized and unrealized gain or loss from investments, as appropriate. Foreign securities and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin. D. FEDERAL INCOME TAXES. Each Fund has elected to be treated as a "regulated investment company" under Subchapter M of the Internal Revenue Code (the "IRC"). The Funds intend to distribute substan- tially all of their taxable income and any capital gains in excess of applicable capital loss carryforwards. Accordingly, no provision for Federal income taxes has been made in the accompanying financial statements. The Funds may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Funds will accrue such taxes and recoveries as applicable based upon their current interpretations of the tax rules and regulations that exist in the markets in which they invest. Each Fund has adopted accounting standards regarding recognition and measurement of tax positions taken on a tax return. No material uncertain tax positions existed in any Fund as of April 30, 2011. As of April 30, 2011, open tax years include the tax years ended October 31, 2007 through 2010. The Funds are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next six months. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period, the Funds did not incur any interest or penalties. 38 NOTES TO FINANCIAL STATEMENTS PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED APRIL 30, 2011 (UNAUDITED) - CONTINUED E. ALLOCATION OF EXPENSES. Each Fund is charged for those expenses directly attributable to it. Expenses that are not directly attributable to a Fund are allocated among the Funds by an appropriate method based on the nature of the expense. F. SECURITY TRANSACTIONS, INVESTMENT INCOME, AND DISTRIBUTIONS. Security transactions are accounted for on the trade date. Dividend income and distributions to shareholders are recorded on the ex-dividend date, and interest income is recognized on the accrual basis. Realized gains and losses are evaluated on the basis of identified costs. Premiums and discounts on the purchase of securities are amortized/ accreted using the effective interest method. Accounting principles generally accepted in the United States of America require that permanent financial reporting and tax differences be reclassified in the capital accounts. G. USE OF ESTIMATES. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 these estimates. H. INDEMNIFICATION OBLIGATIONS. Under the Trust's organizational documents, its current and former officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. Based on experience, the Funds would expect the risk of loss to be remote. (3) INVESTMENT TRANSACTIONS The cost of purchases and the proceeds from sales of securities, excluding short-term investments, for the six months ended April 30, 2011 were as follows: FUND PURCHASES SALES ---- ------------ ------------ PRIMECAP Odyssey Stock Fund ............... $273,364,665 $151,875,851 PRIMECAP Odyssey Growth Fund .............. $333,401,133 $ 97,992,279 PRIMECAP Odyssey Aggressive Growth Fund ... $216,927,173 $ 54,691,138 39 NOTES TO FINANCIAL STATEMENTS PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED APRIL 30, 2011 (UNAUDITED) - CONTINUED (4) FAIR VALUE OF THE FINANCIAL INSTRUMENTS The Funds have adopted fair valuation accounting standards which establish an authoritative definition of fair value and set forth a hierarchy for measuring fair value. These standards require additional disclosure about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion of changes in valuation techniques and related inputs during the period. These standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy is organized into three levels based upon the assumptions (referred to as "inputs") used to value the asset or liability. These standards state that "observable inputs" reflect the assumptions that market participants would use in valuing an asset or liability based on market data obtained from independent sources. "Unobservable inputs" reflect the entity's own assumptions about the inputs market participants would use to value the asset or liability. Various inputs are used in determining the value of each Fund's investments. These inputs are summarized in the three broad levels below: Level 1 - Unadjusted quoted prices in active markets for identical securities to which the trust has access at the date of measurement. Level 2 - Other significant observable inputs (including quoted prices for similar or related securities in both active and inactive markets, interest rates, foreign exchange rates, and fair value estimates for foreign securities indices). Level 3 - Significant unobservable inputs to the extent observable inputs are unavailable (including the Funds' own assumptions in determining fair value of investments based on the best available information). 40 NOTES TO FINANCIAL STATEMENTS PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED APRIL 30, 2011 (UNAUDITED) - CONTINUED The following table provides the fair value measurements of applicable Fund assets by level within the fair value hierarchy for each Fund as of April 30, 2011. There were no significant transfers into or out of Level 1 and Level 2 during the reporting period. These assets are measured on a recurring basis.
QUOTED PRICES IN ACTIVE SIGNIFICANT MARKETS FOR OTHER SIGNIFICANT IDENTICAL OBSERVABLE UNOBSERVABLE ASSETS INPUTS INPUTS FUND DESCRIPTION (LEVEL 1) (LEVEL 2) (LEVEL 3) TOTAL ------------- ------------- -------------- ----------- ------------- ------- PRIMECAP Equity ODYSSEY STOCK Common Stock $ 781,019,811 $ -- $ -- $ 781,019,811 FUND -------------- ----- ----- -------------- Total Equity $ 781,019,811 $ -- $ -- $ 781,019,811 -------------- ----- ----- -------------- Short-Term $ 14,606,275 $ -- $ -- $ 14,606,275 -------------- ----- ----- -------------- Investments Total Investments in Securities $ 795,626,086 $ -- $ -- $ 795,626,086 ============== ===== ===== ============== PRIMECAP Equity ODYSSEY GROWTH Common Stock $1,894,590,791 $ -- $ -- $1,894,590,791 FUND -------------- ----- ----- -------------- Total Equity $1,894,590,791 $ -- $ -- $1,894,590,791 -------------- ----- ----- -------------- Short-Term $ 83,064,411 $ -- $ -- $ 83,064,411 -------------- ----- ----- -------------- Investments Total Investments in Securities $1,977,655,202 $ -- $ -- $1,977,655,202 ============== ===== ===== ============== PRIMECAP Equity ODYSSEY Common Stock $1,108,362,413 $ -- $ -- $1,108,362,413 AGGRESSIVE -------------- ----- ----- -------------- GROWTH FUND Total Equity $1,108,362,413 $ -- $ -- $1,108,362,413 -------------- ----- ----- -------------- Short-Term $ 54,159,249 $ -- $ -- $ 54,159,249 -------------- ----- ----- -------------- Investments Total Investments in Securities $1,162,521,662 $ -- $ -- $1,162,521,662 ============== ===== ===== ===============
------ Refer to each Fund's respective Schedule of Investments for the breakdown of major categories. (5) DISTRIBUTION TO SHAREHOLDERS Net investment income and net realized gains differ for financial statement and tax purposes due to differing treatments of deferred wash sale losses. 41 NOTES TO FINANCIAL STATEMENTS PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED APRIL 30, 2011 (UNAUDITED) - CONTINUED As of October 31, 2010, the components of capital on a tax basis were as follows: PRIMECAP PRIMECAP PRIMECAP Odyssey ODYSSEY ODYSSEY AGGRESSIVE STOCK FUND GROWTH FUND GROWTH FUND ------------- -------------- ------------ Cost of investments for tax purposes(1) ......... $ 562,380,581 $1,297,133,832 $722,523,447 ============= ============== ============ Gross tax unrealized appreciation ................ 79,683,082 260,985,245 164,880,361 Gross tax unrealized depreciation ................ (29,846,067) (107,360,252) (76,515,282) ------------- -------------- ------------ Net tax unrealized appreciation $ 49,837,015 $ 153,624,993 $ 88,365,079 ============= ============== ============ Undistributed ordinary income $ 4,150,713 $ 1,066,130 $ -- Undistributed long-term capital gain ................ -- -- 27,849,253 ------------- -------------- ------------ Total distributable earnings $ 4,150,713 $ 1,066,130 $ 27,849,253 ------------- -------------- ------------ Other accumulated loss......... $ (29,278,962) $ (10,428,534) $ -- ------------- -------------- ------------ Total accumulated gain ........ $ 24,708,766 $ 144,262,589 $116,214,332 ============= ============== ============ ------ (1) At October 31, 2010, the basis of investments for federal income tax purposes differs from the cost for financial reporting purposes due to the tax deferral of losses on wash sales. At October 31, 2010, the PRIMECAP Odyssey Stock Fund and PRIMECAP Odyssey Growth Fund had capital loss carryovers of $29,278,962 an$10,428,534, respectively, of which $3,593,931 and $689,857 expire on October 31, 2016, and $25,685,031 and $9,738,677 expire on October 31, 2017, respectively. Tax components of dividends paid during the six months ended April 30, 2011 and the year ended October 31, 2010 were as follows: APRIL 30, 2011 ----------------------------- ORDINARY LONG-TERM INCOME CAPITAL GAIN DISTRIBUTIONS DISTRIBUTIONS ------------- ------------- PRIMECAP Odyssey Stock Fund ................ $5,099,941 $ -- PRIMECAP Odyssey Growth Fund ............... $1,416,348 $ -- PRIMECAP Odyssey Aggressive Growth Fund .... $ -- $27,881,437 42 NOTES TO FINANCIAL STATEMENTS PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED APRIL 30, 2011 (UNAUDITED) - CONTINUED October 31, 2010 ------------------------------ Ordinary Long-Term Income Capital Gain Distributions Distributions ------------- ------------- PRIMECAP Odyssey Stock Fund ............... $1,831,079 $ -- PRIMECAP Odyssey Growth Fund .............. $1,825,837 $ -- PRIMECAP Odyssey Aggressive Growth Fund ... $ -- $ -- The Funds designated as long-term capital gain dividends, pursuant to Internal Revenue Code Section 852(b)(3), the amounts necessary to reduce the earnings and profits of the Funds related to net capital gains to zero for the tax year ended October 31, 2010. In December 2010, the Regulated Investment Company Modernization Act (the "RIC Act") was enacted by Congress and signed into law. Under the RIC Act, new capital losses may be carried forward indefinitely and retain the character of the original loss. The RIC Act, among other things, also contains provisions aimed at preventing disqualification under the IRC for inadvertent failures to comply with the asset diversification and qualifying income tests, exempts RICs from the preferential dividend rule, and repeals the 60-day designation requirement for certain pay-through income and gains. Most of the provisions of the RIC Act will apply to the Funds beginning in the 2013 fiscal year. Management is evaluating the implications of the RIC Act, if any, and the impact on the Funds' financial statements is being assessed. (6) INVESTMENT ADVISORY AND OTHER AGREEMENTS The Trust has entered into an investment management agreement with the Investment Advisor on behalf of each Fund. Under the terms of the agreement, each of the Funds will pay a fee equal to the following annual percentages of average net assets: FOR THE FIRST ASSETS IN EXCESS OF $100,000,000 $100,000,000 PER FUND PER FUND ------------- ------------------- PRIMECAP Odyssey Stock Fund ................... 0.60% 0.55% PRIMECAP Odyssey Growth Fund .................. 0.60% 0.55% PRIMECAP Odyssey Aggressive Growth Fund ....... 0.60% 0.55% The Bank of New York Mellon Corporation serves as the Funds' custodian. U.S. Bancorp Fund Services, LLC ("USBFS") serves as the administrator, fund accountant, and transfer agent to the Funds. Quasar Distributors, LLC, an affiliate of USBFS, serves as the Funds' distributor. 43 NOTES TO FINANCIAL STATEMENTS PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED APRIL 30, 2011 (UNAUDITED) - CONTINUED (7) OTHER AFFILIATES Certain of the Funds' investments are in companies that are considered to be affiliated companies of a Fund because the Fund owns more than 5% of the outstanding voting securities of the company. Transactions during the period in securities of these companies were as follows:
PRIMECAP Odyssey Growth Fund CURRENT PERIOD TRANSACTIONS -------------------------------------------------- MARKET PROCEEDS MARKET VALUE AS OF FROM REALIZED VALUE AT OCTOBER 31, PURCHASES SECURITIES DIVIDEND GAIN APRIL 30, COMMON STOCK 2010 AT COST SOLD INCOME (LOSS) 2011 ------------ ----------- --------- ---------- -------- ------- --------- Conceptus, Inc. 31,457,075 591,600 -- -- -- 34,775,023 ImmunoGen, Inc. 46,196,400 -- -- -- -- 75,083,200 ----------- ---------- ---------- -------- ----- ------------ Total $77,653,475 $ 591,600 -- -- -- $109,858,223 =========== ========== ========== ======== ===== ============ PRIMECAP Odyssey Aggressive Growth Fund CURRENT PERIOD TRANSACTIONS -------------------------------------------------- MARKET PROCEEDS MARKET VALUE AS OF FROM REALIZED VALUE AT OCTOBER 31, PURCHASES SECURITIES DIVIDEND GAIN APRIL 30, COMMON STOCK 2010 AT COST SOLD INCOME (LOSS) 2011 ------------ ----------- --------- ---------- -------- ------- --------- Conceptus, Inc. 21,382,497 2,269,604 -- -- -- 25,764,242 Dyax, Corp 11,223,647 2,036,300 -- -- -- 11,250,000 Smart Balance, Inc. 11,433,670 729,968 -- -- -- 16,316,076 ----------- ---------- ---------- -------- ----- ------------ Total $44,039,814 $5,035,872 -- -- -- $ 53,330,318 =========== ========== ========== ======== ===== ============
(8) SUBSEQUENT EVENTS The funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure. 44 ADDITIONAL INFORMATION PRIMECAP ODYSSEY FUNDS ------------------------------------------------------------- (UNAUDITED) PROXY VOTING PROCEDURES The Investment Advisor votes proxies relating to portfolio securities in accordance with procedures that have been approved by the Trust's board of trustees. You may obtain a description of these procedures, free of charge, by calling toll-free 1-800-729-2307. This information is also available through the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. PROXY VOTING RECORD Information regarding how the Funds voted proxies relating to the portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling toll-free 1-800-729-2307. This information is also available through the SEC's website at http://www.sec.gov. FORM N-Q DISCLOSURE The Trust files its complete schedules of each Fund's portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Trust's Forms N-Q are available on the SEC's website at http://www.sec.gov. The Trust's Forms N-Q may be reviewed and copied at the Commission's Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. This information is also available, without charge, by calling toll-free 1-800-729-2307. 45 MANAGEMENT PRIMECAP ODYSSEY FUNDS ------------------------------------------------------------- (UNAUDITED) PORTFOLIO MANAGERS PRIMECAP Management Company has five portfolio managers who together have more than 180 years of investment experience. Each of these five individuals manages a portion of the PRIMECAP Odyssey Stock Fund and the PRIMECAP Odyssey Growth Fund. The PRIMECAP Odyssey Aggressive Growth Fund is primarily managed by Messrs. Schow, Kolokotrones, Fried, and Mordecai. A small portion of each Fund's assets may be managed by individuals in the Investment Advisor's research department. The portfolio managers primarily responsible for overseeing the Funds' investments are: NAME YEARS OF EXPERIENCE -------------------------------------------------- Howard B. Schow 55 Mitchell J. Milias 47 Theo A. Kolokotrones 41 Joel P. Fried 26 Alfred W. Mordecai 14 OFFICERS AND TRUSTEES The Trust's officers, who administer the Funds' daily operations, are appointed by the board of trustees. The trustees are responsible for the overall management of the Trust, including establishing the Funds' policies and general supervision and review of their investment activities. The Statement of Additional Information includes additional information about the Trust's trustees and is available, without charge, by calling 1-800-729-2307 or at the Funds' website at http://www.odysseyfunds.com. Executive Officers. The table below sets forth certain information about each of the Trust's executive officers.
POSITION(S) TERM OF OFFICE; NAME, ADDRESS HELD LENGTH OF PRINCIPAL OCCUPATION(S) (YEAR OF BIRTH) WITH TRUST TIME SERVED DURING PAST 5 YEARS ----------------------------------------------------------------------------------- Howard B. Schow Co-Chief Indefinite; Chairman Emeritus, Director, Portfolio 225 South Lake Ave. Executive Since 09/04 Manager, and Principal Pasadena, CA 91101-3005 Officer PRIMECAP Management Company (1927) Theo A. Kolokotrones Co-Chief Indefinite; Vice-Chairman, Director, Portfolio 225 South Lake Ave. Executive Since 09/04 Manager, and Principal Pasadena, CA 91101-3005 Officer PRIMECAP Management Company (1946)
46
MANAGEMENT PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- (UNAUDITED) - CONTINUED POSITION(S) TERM OF OFFICE; NAME, ADDRESS HELD LENGTH OF PRINCIPAL OCCUPATION(S) (YEAR OF BIRTH) WITH TRUST TIME SERVED DURING PAST 5 YEARS ----------------------------------------------------------------------------------------------- Joel P. Fried Co-Chief Indefinite; President, Director, Portfolio Manager, 225 South Lake Ave. Executive Since 09/04 and Principal Pasadena, CA 91101-3005 Officer PRIMECAP Management Company (1962) and Trustee ----------------------------------------------------------------------------------------------- Michael J. Ricks Chief Indefinite; Director of Fund Administration, 225 South Lake Ave. Financial Since 03/11 PRIMECAP Management Company Pasadena, CA 91101-3005 Officer, (Since 2011); Vice President, Fund (1977) Chief Administration and Compliance, Administrative U.S. Bancorp Fund Services, LLC Officer, and (2001-2011) Secretary ----------------------------------------------------------------------------------------------- Karen Chen Vice Indefinite; Chief Compliance Officer, Director of 225 South Lake Ave. President Since 10/04 Compliance and Reporting Pasadena, CA 91101-3005 of PRIMECAP Management Company (1973) Compliance and Chief Compliance Officer and AML Officer ----------------------------------------------------------------------------------------------- "INDEPENDENT" TRUSTEES. The table below sets forth certain each of the information about trustees of the Trust who is not an "interested person" of the Trust as defined in the 1940 Act ("Independent Trustees"). NUMBER OF TERM OF PORTFOLIOS OTHER POSITION(S) OFFICE; IN FUND DIRECTORSHIPS NAME, ADDRESS HELD LENGTH OF PRINCIPAL OCCUPATION(S) COMPLEX BY HELD BY (YEAR OF BIRTH) WITH TRUST TIME SERVED DURING PAST 5 YEARS TRUSTEE(1) TRUSTEE ------------------------------------------------------------------------------------------------- Benjamin F. Hammon Chairman Indefinite; Retired; Director, 3 None 225 South Lake Ave. of the Since 09/04 Institutional Equity Pasadena, CA Board and Sales, Salomon Smith 91101-3005 Trustee Barney Inc. (1963-1998) (1935) ------------------------------------------------------------------------------------------------- Wayne H. Smith Chairman Indefinite; Retired; President, 3 None 225 South Lake Ave. of the Audit Since 09/04 Wayne H. Smith Pasadena, CA Committee Consulting, Inc. (2002- 91101-3005 and Trustee 2007); Vice President, (1941) Financial Services, Avery Dennison Corporation (2001-2002); Vice President, Financial Services, and Treasurer, Avery Dennison Corporation (1999- 2001) -------------------------------------------------------------------------------------------------
47
MANAGEMENT PRIMECAP ODYSSEY FUNDS -------------------------------------------------------------------------------- (UNAUDITED) - CONTINUED NUMBER OF TERM OF PORTFOLIOS OTHER POSITION(S) OFFICE; IN FUND DIRECTORSHIPS NAME, ADDRESS HELD LENGTH OF PRINCIPAL OCCUPATION(S) COMPLEX BY HELD BY (YEAR OF BIRTH) WITH TRUST TIME SERVED DURING PAST 5 YEARS TRUSTEE(1) TRUSTEE ------------------------------------------------------------------------------------------------- Joseph G. Uzelac Trustee Indefinite; Retired; Managing 3 None 225 South Lake Ave. Since 10/07 Director, Lehman Pasadena, CA Brothers Global 91101-3005 Investment Bank (1944) (1988-2007) ------------------------------------------------------------------------------------------------- Elizabeth D. Obershaw Trustee Indefinite; Managing Director, 3 None 225 South Lake Ave. Since 06/08 Horsley Bridge Pasadena, CA Partners, a California- 91101-3005 based investment advisor (1960) (2007-present); Vice President and Chief Investment Officer, Hewlett-Packard Company (1991-2007); Hewlett-Packard Company (1983-1991) ------------------------------------------------------------------------------------------------- (1) Fund Complex includes any funds, series of funds, or trusts that share the same advisor or that hold themselves out to investors as related companies. "INTERESTED" TRUSTEES. The table below sets forth certain information about each of the trustees of the Trust who is an "interested person" of the Trust as defined by the 1940 Act. NUMBER OF TERM OF PORTFOLIOS OTHER POSITION(S) OFFICE; IN FUND DIRECTORSHIPS NAME, ADDRESS HELD LENGTH OF PRINCIPAL OCCUPATION(S) COMPLEX BY HELD BY (YEAR OF BIRTH) WITH TRUST TIME SERVED DURING PAST 5 YEARS TRUSTEE(1) TRUSTEE ------------------------------------------------------------------------------------------------- Joel P. Fried (2) Co-Chief Indefinite; President, Director, 3 None 225 South Lake Ave. Executive Since 09/04 Portfolio Manager, Pasadena, CA Officer and and Principal 91101-3005 Trustee PRIMECAP (1962) Management Company ------------------------------------------------------------------------------------------------- (1) Fund Complex includes any funds, series of funds, or trusts that share the same advisor or that hold themselves out to investors as related companies. (2) Mr. Fried is an "interested person" of the Trust, as defined by the 1940 Act, because of his employment with PRIMECAP Management Company, the investment advisor to the Trust.
Investment Advisor PRIMECAP MANAGEMENT COMPANY 225 South Lake Avenue, Suite 400 Pasadena, California 91101 o Distributor QUASAR DISTRIBUTORS, LLC 615 East Michigan Street, 4th Floor Milwaukee, Wisconsin 53202 o Custodian THE BANK OF NEW YORK MELLON CORPORATION One Wall Street New York, New York 10286 o Transfer Agent U.S. BANCORP FUND SERVICES, LLC 615 East Michigan Street, 3rd Floor Milwaukee, Wisconsin 53202 o Administrator U.S. BANCORP FUND SERVICES, LLC 2020 East Financial Way, Suite 100 Glendora, California 91741 o Legal Counsel BINGHAM McCUTCHEN LLP 355 South Grand Avenue, Suite 4400 Los Angeles, California 90071 o Independent Registered Public Accounting Firm PRICEWATERHOUSECOOPERS LLP Three Embarcadero Center San Francisco, California 94111 THIS REPORT IS INTENDED FOR THE SHAREHOLDERS OF THE PRIMECAP ODYSSEY FUNDS AND MAY NOT BE USED AS SALES LITERATURE UNLESS PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. PAST PERFORMANCE RESULTS SHOWN IN THIS REPORT SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE PERFORMANCE. SHARE PRICE AND RETURNS WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. STATEMENTS AND OTHER INFORMATION HEREIN ARE DATED AND ARE SUBJECT TO CHANGE. PRIMECAP, PRIMECAP ODYSSEY, AND THE PRIMECAP ODYSSEY LOGO ARE TRADEMARKS OF PRIMECAP MANAGEMENT COMPANY. ITEM 2. CODE OF ETHICS. Not applicable for semi-annual reports. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable for semi-annual reports. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable for semi-annual reports. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934). ITEM 6. INVESTMENTS. Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to open-end investment companies. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to open-end investment companies. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable to open-end investment companies. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 11. CONTROLS AND PROCEDURES. (a) The Registrant's Co-Chief Executive Officers and Chief Financial Officer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant's service provider. (b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. (a) Not applicable. (2) A separate certification for each principal executive and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith. (3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies. (b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. 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. PRIMECAP Odyssey Funds By /s/ JOEL P. FRIED ----------------------------------------- Joel P. Fried, Co-Chief Executive Officer Date June 22, 2011 By /S/ HOWARD B. SCHOW ------------------------------------------- Howard B. Schow, Co-Chief Executive Officer Date June 22, 2011 By /S/ THEO A. KOLOKOTRONES ------------------------------------------------ Theo A. Kolokotrones, Co-Chief Executive Officer Date June 22, 2011 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 /s/ JOEL P. FRIED ----------------------------------------- Joel P. Fried, Co-Chief Executive Officer Date June 22, 2011 By /S/ HOWARD B. SCHOW ------------------------------------------- Howard B. Schow, Co-Chief Executive Officer Date June 22, 2011 By /S/ THEO A. KOLOKOTRONES ------------------------------------------------ Theo A. Kolokotrones, Co-Chief Executive Officer Date June 22, 2011 By /S/ MICHAEL J. RICKS ------------------------------------------------ Michael J. Ricks, Chief Financial Officer Date June 22, 2011