Pages 1 - 5 |
Shareholder Letter |
Exhibit 1 |
Portfolio Transactions from July 1, 2001, through September 30, 2001 |
Exhibit 2 |
Quarter-to-Quarter Changes in Financial Data |
Pages F1-F13 |
Unaudited Financial Statements for the |
Nine Months Ended September 30, 2001 |
This report has been prepared for the information of the shareholders
of Bridges Investment Fund, Inc. and is under no circumstances to be
construed as an offering of shares of the Fund. Such offering is made
only by Prospectus, a copy of which may be obtained by inquiry to the
Fund's office.
----------------------------------------------------------------------------------------------------------
BRIDGES INVESTMENT FUND, INC.
Frederick N. Backer |
Edson L. Bridges II |
Edson L. Bridges III |
N. P. Dodge, Jr. |
John W. Estabrook |
Jon D. Hoffmaster |
John J. Koraleski |
Roger A. Kupka |
Gary L. Petersen |
John T. Reed |
Roy A. Smith |
Janice D. Stoney |
L.B. Thomas |
John K. Wilson |
Officers
Edson L. Bridges II |
Chairman and |
Chief Executive Officer |
|
Edson L. Bridges III |
President and |
Chief Investment Officer |
|
Brian M. Kirkpatrick |
Vice President |
Mary Ann Mason |
Secretary |
Kathleen J. Stranik |
Assistant Secretary |
Nancy K. Dodge |
Treasurer |
Linda J. Morris |
Assistant Treasurer |
Auditor
KPMG LLP |
Two Central Park Plaza |
Suite 1501 |
Omaha, Nebraska 68102-1617 |
Corporate Counsel |
Counsel to Independent Directors |
Baird, Holm |
Koley, Jessen, P.C. |
Attorneys at Law |
Attorneys at Law |
1500 Woodmen Tower |
One Pacific Place, Suite 800 |
Omaha, Nebraska 68102 |
1125 South 103 Street |
Omaha, Nebraska 68124 |
---------------------------------------------------------------------------------------------------------
BRIDGES INVESTMENT FUND, INC.
8401 West Dodge Road, Suite 256
Omaha, Nebraska 68114
October 22, 2001
Dear Shareholder:
Introduction
The net asset value per share for our Fund was $27.55 on September 30, 2001. This price was down 18.5% from June 30, 2001, off 28.6% from December 31, 2000, and 35.7% below the one year ago level. These conclusions are based upon the net asset values reported for the financial periods referenced. They are unadjusted for dividend payments and one capital gains distribution.
The net assets of the Fund were $53,311,385 at September 30, 2001. The twelve months earlier quarter carried $76,910,823 in net assets. In broad terms, the first bear market for the 21st century has carried net assets back down to levels that prevailed two to three years ago.
Needless to say, the management of the Fund feels very disappointed about these trends. Consequently, this letter will be varied from our usual format to cover a number of subjects to provide you with perspectives about the past, the present, and the future. Ted Bridges, our President, was in New York attending a security research conference on September 11, 2001, and he witnessed the World Trade Center building collapse from outside his hotel. It was a profoundly moving and agonizing experience. He was unable to participate in the formation of my September 12, 2001 letter to you because he was driving back to Omaha.
This week Ted is in Washington, D.C. attending briefings on Capital One Financial, one of the Fund's star quality companies. We are continuing our regular research efforts to be highly knowledgeable about the businesses in which your assets are invested. This commitment by the investment manager has always been the critical success factor for portfolios under our care.
This letter will be the 149th time that I have written or contributed portions thereof to our quarterly/annual shareholder reports. I always look forward to the opportunity to report our results and to share information that is significant to your investment in our Fund. Today, historical perspectives seem important to me as a shareholder because my mind wonders: How does the September 30, 2001 Quarter rank in terms of bad experiences and what are the realistic expectations for a recovery?
The Past
Each shareholder report of our Fund carries an Exhibit 2 entitled "Historical Financial Information". Every quarter's net assets, shares outstanding, net asset value per share, dividend per share, and capital gains distribution per share were reported on Exhibit 2. After 1999, this quarter to quarter version of Exhibit 2 was shortened and modified to remove excess data. However, for this report, the original format for Exhibit 2 has been reinstated so that you may find the reference points for the comments about historical price movements.
-------------------------------------------------------------------------------------------------------------------------------
Shareholder Letter 2 October 22, 2001
Table 1 set forth below summarizes the major Fund declines for Net Asset Value per share for our Fund over its 38 year history:
Table 1 - History of Major Trend Declines for Bridges Investment Fund, Inc.
High Quarter |
Low Quarter |
Monthly Duration |
High NAV |
Low NAV |
% Decline |
- - - Worst Quarterly Loss - - - NAV % Period
NAV % Period |
||
12-31-65 |
09-30-66 |
9 |
$12.04 |
$10.11 |
16.0 |
$1.05 |
9.4 |
09-30-66 |
12-31-68 |
06-30-70 |
18 |
14.81 |
9.54 |
35.6 |
2.61 |
21.5 |
06-30-70 |
03-31-72 |
09-30-74 |
30 |
13.73 |
6.59 |
52.0 |
1.91 |
22.5 |
09-30-74 |
12-31-80 |
06-30-82 |
18 |
13.65 |
10.92 |
20.0 |
1.37 |
10.9 |
03-31-82 |
04-30-87 |
12-31-87 |
3 |
18.70 |
15.24* |
19.5 |
3.46 |
19.5 |
12-31-87 |
03-31-00 |
09-30-01 |
18 |
46.99* |
27.55p |
41.4 |
6.27 |
18.5 |
09-30-01 |
*Capital Gains Distribution added back for payments made during the Quarter
p - preliminary conclusion
Although the September 30, 2001 quarter experienced the largest dollar per share drop, the Fund's price in terms of the percentage loss in net asset value per share against the prior quarter's ending price indicates that the results for the Third Period of 2001 were the fourth worst time for an investor to exercise patience. The market declines in June, 1970, September, 1974, and December, 1987 were considerably more painful experiences for our shareholders.
From a longer term perspective, it is too early to find that the Third Quarter of 2001 witnessed the end of the present price declines for common stocks, although the September 30, 2001 position seems to be on the statistical modal average for 18 months set by the 1970 and the1982 market declines. The top to bottom trend for 2000 - 2001 classifies our current stock price correction from the previous advance as second only to the 1972 - 1974 debacles. The 41.4% shrink in value over 18 months would seem to be sufficient under normal circumstances. Some analysis of what may constitute normal circumstances will be presented in our discussion of the present and the future.
Table 2 describes the major trend advances for the net asset value per share for our Fund over the last 38 years:
Table 2 - History of Major Trend Advances for Bridges Investment Fund, Inc.
Low Quarter |
High Quarter |
Monthly Duration |
Low NAV |
High NAV |
% Advance |
- - - - Best Quarterly Gain - - - - NAV % Period
NAV % Period |
||
07-01-63 |
12-31-65 |
30 |
$10.00 |
$12.04 |
20.4 |
$0.72 |
6.6 |
09-30-65 |
09-30-66 |
12-31-68 |
27 |
10.11 |
14.81 |
46.5 |
1.66 |
13.4 |
06-30-68 |
06-30-70 |
03-31-72 |
21 |
9.54 |
13.73 |
43.9 |
1.19 |
12.5 |
09-30-70 |
09-30-74 |
12-31-80 |
75 |
6.59 |
13.65 |
107.1 |
1.28 |
12.4 |
06-30-80 |
06-30-82 |
09-30-87 |
63 |
10.92 |
18.70 |
71.2 |
1.85 |
13.5 |
12-31-85 |
12-31-87 |
03-31-00 |
153 |
15.24* |
46.99* |
208.3 |
10.15 |
27.4 |
12-31-99 |
*Capital Gains Distribution added back for payments made during the Quarter
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Shareholder Letter 3 October 22, 2001
The price advance from the December, 1987 quarter to the March, 2000 quarter was the longest experience of the six cycle trends shown in Table 2, by lasting 153 months. The December, 1999 quarter achieved the greatest gain for any quarterly result by a factor of two over the other periods that showed significant price increases.
There are no central statistical tendencies in the Table 2 information that could truly guide a judgment or assessment for the usual recovery other than the likelihood that an advancing trend in the last quarter should produce a 12% - 13% improvement over the prior quarter. The best price gains in the recovery are spread throughout the cycle - - sometimes near the beginning, other times in the middle, and once near the end in 1999. The Table 2 information is clear that positive price trends followed prior declines at least six times in the last four decades.
Present
My letter to you dated September 12, 2001 adequately covered the implications and prospective near term developments in most respects, so I shall not repeat those thoughts here. However, there are additional insights one can gather from the six weeks following the main calamaties in New York and Washington that can be shared.
Within the broad context of the economy and the related financial markets, more activities are acting correctly than are performing erratically. The air travel, hotel, car rental, aircraft and parts manufacturers have been hardest hit by changes in lower standard volumes for operations than were in effect prior to September 11, 2001.
Substantial discounting, particularly for automobile sales through 0% financing, will be pervasive in our U.S. economy for at least several quarters. Thus, reported net income will be lower than would have been the case prior to September 11, 2001. Investors in common stocks know this phenomenon, and, to a significant degree, many poor earnings reports will be ignored -- provided a realistic scenario exists for an eventual restoration of prior profits followed by a new growth trend in earnings.
-----------------------------------------------------------------------------------------------------------------------------
Shareholder Letter 4 October 22, 2001
Future
Management presented the Board of Directors a definitive forecast for the future of the Fund's common stock portfolio on a company-by-company basis at the regular October 16, 2001, quarterly meeting. The basis for these studies was briefly described in my September 12, 2001, letter to you. Our research was keyed to the development of "fair value" prices for two forecast periods: first, for 12-24 months from the Summer of 2001, known as the 2002 values, and second, for five years from the Summer of 2001, known as the 2006 values. These determinations were based on subjective analysis and quantitative models. Fair value for these studies was defined to mean the most probable and usual trading price for the subject common stock that would be likely to occur under a restoration of normal economic and financial circumstances for the first and second forecast periods.
Our projections for the Board would carry the fair market value of the Fund's portfolio for 2001 to $57 million from $44 million on October 15, 2001 -- a possible recovery gain of close to 30%. The 2006 estimate on a stockholding by stockholding basis should lift the total common stock market values close to $100,000,000. Such an improvement would substantially exceed our former high point for common stock values of around $67 million.
The Fund's common stock portfolio is focused around long-term capital growth. The most recent estimate for 2002 versus 2001 for a 16.7% increase is the typical company's earnings per share progress. This prospect follows an average loss of 14% for 2001 comparable to the 2000 per share growth rate over the last five years. We expect average progress of 20% per year for the next five years for our array of companies in the portfolio.
The most recent rate of return on common stockholders' equity for the Fund's companies averages to be 21.8%.
During our worst investment experience in the mid-1970's, the Firm created some benchmark characteristics that would provide confidence to purchase and hold common stocks in troubled market environments: (1) average annual earnings growth of 15% per year; (2) this target earned consistently in four out of five years for an 80% stability factor; and (3) the ability to earn the 15% growth rate to be confirmed by a 15% net after tax return on common stockholders' equity. The measurements referenced in the paragraph above equal or exceed the criteria adopted many years ago.
The Fund's portfolio benefited from excess positive returns in technology related common stocks in the late 1990's and in early 2000. Exposure to the general aura became one-fourth to one-third of the total common stocks held. An expansion in capital spending supported the growth in earnings per share. The customer franchises for these companies are outstanding in most instances, but the revenue stream from capital spending has plummeted to a surprising degree in an uncertain economic environment. Recovery for these stocks will have to await a renewal of product cycles and many strong demands from general business activity.
Dividend
On October 16, 2001, the Board of Directors declared a $.06 per share dividend on the shares of capital stock outstanding on the October 16, 2001, record date. This income distribution is payable on or about October 22, 2001. The dividend was generated from the net investment income earned during the July to September, 2001, quarter.
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Shareholder Letter 5 October 22, 2001
Questions or Comments
Please contact me with your needs to have questions answered or comments made to amplify upon the subjects raised in this letter or matters that are of special interest to you.
Sincerely,
Edson L. Bridges II, CFA
Chairman
ELBII:elc:kjs
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Exhibit 1
BRIDGES INVESTMENT FUND, INC.
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
JULY 1, 2001, THROUGH SEPTEMBER 30, 2001
Securities Common Stocks Unless Described Otherwise |
Bought or Received $1,000 Par Value (M) or Shares |
Held After Transaction $1,000 Par Value (M) or Shares |
|
||
(1) Exxon Mobil Corporation |
13,000 |
26,000 |
Goldman Sachs Group, Inc. |
1,000 |
10,000 |
Omnicom Group, Inc. |
5,000 |
5,000 |
(2) Zimmer Holdings, Inc. |
800 |
800 |
Various Issues of Commercial Paper Notes Purchased during 3rd Quarter, 2001 |
93,939M |
7,121M |
Securities Common Stocks Unless Described Otherwise |
Sold or Exchanged $1,000 Par Value (M) or Shares |
Held After Transacion $1,000 Par Value (M) or Shares |
Juniper Networks |
10,000 |
-- |
Providian Financial |
10,000 |
-- |
Veritas Software Company |
7,550 |
-- |
WorldCom, Inc. - MCI Group |
1,000 |
-- |
Zimmer Holdings, Inc. |
800 |
-- |
Various Issues of Commercial Paper Notes maturing during 3rd Quarter, 2001 |
93,069M |
-- |
(1) Received 13,000 shares in a 2-for-1 stock split on July 19, 2001
(2) Received 800 shares from a 1-for-10 spin off from Bristol-Myers Squibb
Co. on August 13, 2001.
---------------------------------------------------------------------------------------------------------
Exhibit 2
BRIDGES INVESTMENT FUND, INC.
HISTORICAL FINANCIAL INFORMATION
Valuation Date |
Net Assets |
Shares Outstanding |
Net Asset Value/Share |
Dividend/ Share |
Capital Gains/Share |
07-01-63 |
$ 109,000 |
10,900 |
$10.00 |
$ - |
$ - |
09-30-63 |
109,764 |
10,900 |
10.07 |
- |
- |
12-31-63 |
159,187 |
15,510 |
10.13 |
.07 |
- |
03-31-64 |
202,354 |
19,105 |
10.59 |
.07 |
- |
06-30-64 |
253,932 |
23,438 |
10.83 |
.07 |
- |
09-30-64 |
310,307 |
28,286 |
10.97 |
.07 |
- |
12-31-64 |
369,149 |
33,643 |
10.97 |
.07 |
- |
03-31-65 |
434,523 |
38,531 |
11.28 |
.075 |
.028 |
06-30-65 |
491,068 |
44,667 |
10.99 |
.07 |
- |
09-30-65 |
558,913 |
47,710 |
11.71 |
.07 |
- |
12-31-65 |
621,241 |
51,607 |
12.04 |
.07 |
- |
03-31-66 |
661,711 |
55,652 |
11.89 |
.085 |
- |
06-30-66 |
643,920 |
57,716 |
11.16 |
.07 |
- |
09-30-66 |
592,628 |
58,610 |
10.11 |
.07 |
- |
12-31-66 |
651,282 |
59,365 |
10.97 |
.07 |
- |
03-31-67 |
728,115 |
60,181 |
12.10 |
.085 |
- |
06-30-67 |
753,075 |
61,364 |
12.27 |
.07 |
- |
09-30-67 |
823,967 |
62,810 |
13.12 |
.07 |
- |
12-31-67 |
850,119 |
64,427 |
13.20 |
.07 |
- |
03-31-68 |
812,416 |
65,607 |
12.38 |
.105 |
- |
06-30-68 |
1,013,629 |
72,214 |
14.04 |
.07 |
- |
09-30-68 |
1,046,852 |
72,633 |
14.41 |
.07 |
- |
12-31-68 |
1,103,734 |
74,502 |
14.81 |
.07 |
- |
03-31-69 |
1,083,278 |
77,393 |
14.00 |
.15 |
- |
06-30-69 |
1,030,784 |
79,169 |
13.02 |
.07 |
- |
09-30-69 |
1,063,290 |
83,291 |
12.77 |
.07 |
- |
12-31-69 |
1,085,186 |
84,807 |
12.80 |
.07 |
- |
03-31-70 |
1,061,534 |
87,349 |
12.15 |
.16 |
- |
06-30-70 |
843,133 |
88,367 |
9.54 |
.07 |
- |
09-30-70 |
959,114 |
89,417 |
10.73 |
.07 |
- |
12-31-70 |
1,054,162 |
90,941 |
11.59 |
.07 |
- |
03-31-71 |
1,168,919 |
91,819 |
12.73 |
.16 |
- |
06-30-71 |
1,198,777 |
92,573 |
12.94 |
.07 |
- |
09-30-71 |
1,200,753 |
92,723 |
12.95 |
.07 |
- |
12-31-71 |
1,236,601 |
93,285 |
13.26 |
.07 |
- |
03-31-72 |
1,285,684 |
93,661 |
13.73 |
.14 |
.08 |
06-30-72 |
1,228,951 |
93,834 |
13.10 |
.07 |
- |
09-30-72 |
1,208,454 |
92,258 |
13.10 |
.07 |
- |
12-31-72 |
1,272,570 |
93,673 |
13.59 |
.07 |
- |
03-31-73 |
1,152,089 |
96,695 |
11.91 |
.13 |
.07 |
06-30-73 |
1,073,939 |
97,943 |
10.96 |
.07 |
- |
09-30-73 |
1,131,789 |
99,353 |
11.39 |
.07 |
- |
12-31-73 |
1,025,521 |
100,282 |
10.23 |
.07 |
- |
03-31-74 |
988,697 |
101,763 |
9.72 |
.14 |
- |
06-30-74 |
863,820 |
101,578 |
8.50 |
.07 |
- |
09-30-74 |
667,051 |
101,292 |
6.59 |
.07 |
- |
12-31-74 |
757,545 |
106,909 |
7.09 |
.07 |
- |
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EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION
Valuation Date |
Net Assets |
Shares Outstanding |
Net Asset Value/Share |
Dividend/ Share |
Capital Gains/Share |
03-31-75 |
909,125 |
106,162 |
8.56 |
.14 |
- |
06-30-75 |
1,028,687 |
106,517 |
9.66 |
.07 |
- |
09-30-75 |
954,187 |
107,651 |
8.86 |
.07 |
- |
12-31-75 |
1,056,439 |
111,619 |
9.46 |
.07 |
- |
03-31-76 |
1,230,953 |
115,167 |
10.69 |
.16 |
- |
06-30-76 |
1,265,767 |
117,506 |
10.77 |
.07 |
- |
09-30-76 |
1,313,363 |
121,229 |
10.83 |
.07 |
- |
12-31-76 |
1,402,661 |
124,264 |
11.29 |
.08 |
- |
03-31-77 |
1,335,592 |
126,714 |
10.54 |
.188 |
.062 |
06-30-77 |
1,456,451 |
134,575 |
10.82 |
.08 |
- |
09-30-77 |
1,450,573 |
139,402 |
10.41 |
.08 |
- |
12-31-77 |
1,505,147 |
145,252 |
10.36 |
.08 |
- |
03-31-78 |
1,418,417 |
146,380 |
9.69 |
.211 |
.049 |
06-30-78 |
1,523,758 |
145,470 |
10.47 |
.09 |
- |
09-30-78 |
1,672,364 |
150,729 |
11.10 |
.09 |
- |
12-31-78 |
1,574,097 |
153,728 |
10.24 |
.09 |
- |
03-31-79 |
1,724,695 |
162,627 |
10.61 |
.204 |
.051 |
06-30-79 |
1,773,427 |
163,640 |
10.84 |
.09 |
- |
09-30-79 |
1,913,242 |
167,426 |
11.43 |
.09 |
- |
12-31-79 |
1,872,059 |
165,806 |
11.29 |
.09 |
- |
03-31-80 |
1,769,935 |
170,882 |
10.36 |
.25 |
.0525 |
06-30-80 |
1,974,288 |
169,675 |
11.64 |
.10 |
- |
09-30-80 |
2,204,689 |
173,549 |
12.70 |
.10 |
- |
12-31-80 |
2,416,997 |
177,025 |
13.65 |
.10 |
- |
03-31-81 |
2,424,976 |
184,148 |
13.17 |
.29 |
.0868 |
06-30-81 |
2,356,007 |
186,307 |
12.65 |
.11 |
- |
09-30-81 |
2,128,956 |
183,447 |
11.61 |
.11 |
- |
12-31-81 |
2,315,441 |
185,009 |
12.52 |
.12 |
- |
03-31-82 |
2,165,531 |
194,140 |
11.15 |
.39 |
.19123 |
06-30-82 |
2,074,816 |
190,067 |
10.92 |
.13 |
- |
09-30-82 |
2,262,073 |
189,837 |
11.92 |
.13 |
- |
12-31-82 |
2,593,411 |
195,469 |
13.27 |
.13 |
- |
03-31-83 |
2,815,081 |
209,390 |
13.44 |
.40 |
.2500 |
06-30-83 |
3,030,744 |
212,068 |
14.29 |
.15 |
- |
09-30-83 |
3,210,564 |
223,059 |
14.39 |
.15 |
- |
12-31-83 |
3,345,988 |
229,238 |
14.60 |
.15 |
- |
03-31-84 |
3,279,542 |
247,700 |
13.24 |
.32 |
.5000 |
06-30-84 |
3,322,155 |
262,695 |
12.65 |
.16 |
- |
09-30-84 |
3,554,876 |
263,783 |
13.48 |
.16 |
- |
12-31-84 |
3,727,899 |
278,241 |
13.40 |
.16 |
- |
03-31-85 |
4,058,327 |
300,068 |
13.52 |
.22 |
.6800 |
06-30-85 |
4,351,707 |
305,496 |
14.24 |
.16 |
- |
09-30-85 |
4,260,686 |
310,379 |
13.73 |
.16 |
- |
12-31-85 |
4,962,325 |
318,589 |
15.58 |
.16 |
- |
03-31-86 |
5,663,449 |
347,479 |
16.30 |
.208 |
.86227 |
06-30-86 |
6,174,120 |
365,531 |
16.89 |
.16 |
- |
09-30-86 |
6,392,215 |
399,871 |
15.99 |
,16 |
- |
12-31-86 |
6,701,786 |
407,265 |
16.46 |
.16 |
- |
--------------------------------------------------------------------------------
EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION
Valuation Date |
Net Assets |
Shares Outstanding |
Net Asset Value/Share |
Dividend/ Share |
Capital Gains/Share |
03-31-87 |
8,766,205 |
491,228 |
17.85 |
.196 |
.79447 |
06-30-87 |
9,214,305 |
509,569 |
18.08 |
.16 |
- |
09-30-87 |
9,921,139 |
530,566 |
18.70 |
.16 |
- |
12-31-87 |
7,876,275 |
525,238 |
15.00 |
.14 |
.24513 |
03-31-88 |
8,649,901 |
565,608 |
15.29 |
.16 |
- |
06-30-88 |
9,027,829 |
574,563 |
15.71 |
.15 |
- |
09-30-88 |
8,986,977 |
575,956 |
15.60 |
.16 |
- |
12-31-88 |
8,592,807 |
610,504 |
14.07 |
.38 |
1.10967 |
03-31-89 |
9,103,009 |
618,331 |
14.72 |
- |
- |
06-30-89 |
9,531,124 |
614,861 |
15.50 |
.16 |
- |
09-30-89 |
10,815,006 |
652,207 |
16.58 |
.16 |
- |
12-31-89 |
10,895,182 |
682,321 |
15.97 |
.35 |
0.53769 |
03-31-90 |
11,000,740 |
695,558 |
15.82 |
- |
- |
06-30-90 |
11,521,748 |
696,414 |
16.54 |
.16 |
0.02646 |
09-30-90 |
10,534,037 |
706,268 |
14.92 |
.16 |
- |
12-31-90 |
11,283,448 |
744,734 |
15.15 |
.35 |
0.40297 |
03-31-91 |
12,685,391 |
759,477 |
16.70 |
- |
- |
06-30-91 |
12,485,281 |
766,387 |
16.29 |
.16 |
- |
09-30-91 |
13,225,379 |
780,213 |
16.95 |
.16 |
- |
12-31-91 |
14,374,679 |
831,027 |
17.30 |
.34 |
0.29292 |
03-31-92 |
14,428,305 |
851,349 |
16.95 |
- |
- |
06-30-92 |
14,691,191 |
863,019 |
17.02 |
.15 |
- |
09-30-92 |
15,940,013 |
910,936 |
17.50 |
.16 |
- |
12-31-92 |
17,006,789 |
971,502 |
17.51 |
.325 |
0.15944 |
03-31-93 |
18,071,613 |
1,008,275 |
17.92 |
- |
- |
06-30-93 |
17,621,101 |
992,755 |
17.75 |
.15 |
- |
09-30-93 |
17,949,559 |
999,163 |
17.96 |
.15 |
- |
12-31-93 |
17,990,556 |
1,010,692 |
17.80 |
.3125 |
0.17075 |
03-31-94 |
17,777,177 |
1,021,219 |
17.41 |
- |
- |
06-30-94 |
17,953,364 |
1,033,984 |
17.36 |
.14 |
- |
09-30-94 |
18,472,176 |
1,036,473 |
17.82 |
.15 |
- |
12-31-94 |
18,096,297 |
1,058,427 |
17.10 |
.30 |
0.17874 |
03-31-95 |
19,835,494 |
1,072,309 |
18.50 |
- |
- |
06-30-95 |
21,416,325 |
1,076,463 |
19.90 |
.14 |
- |
09-30-95 |
22,527,409 |
1,082,829 |
20.80 |
.14 |
- |
12-31-95 |
24,052,746 |
1,116,620 |
21.54 |
.295 |
0.19289 |
03-31-96 |
26,025,304 |
1,148,429 |
22.66 |
- |
- |
06-30-96 |
27,108,210 |
1,157,425 |
23.42 |
.1325 |
- |
09-30-96 |
27,451,784 |
1,165,788 |
23.55 |
.1325 |
- |
12-31-96 |
29,249,488 |
1,190,831 |
24.56 |
.285 |
0.25730 |
03-31-97 |
30,255,441 |
1,210,627 |
24.99 |
- |
- |
06-30-97 |
34,567,391 |
1,229,643 |
28.11 |
.1325 |
- |
09-30-97 |
36,500,979 |
1,242,731 |
29.37 |
.135 |
- |
12-31-97 |
36,647,535 |
1,262,818 |
29.02 |
.24 |
0.30571 |
03-31-98 |
41,413,655 |
1,283,322 |
32.27 |
- |
- |
06-30-98 |
43,600,764 |
1,298,420 |
33.58 |
.135 |
- |
09-30-98 |
40,423,166 |
1,308,173 |
30.90 |
.09 |
- |
12-31-98 |
48,433,113 |
1,413,731 |
34.26 |
.215 |
2.11648 |
-----------------------------------------------------------------------------------------------------------------------------
EXHIBIT 2 - HISTORICAL FINANCIAL INFORMATION
Valuation Date |
Net Assets |
Shares Outstanding |
Net Asset Value/Share |
Dividend/ Share |
Capital Gains/Share |
03-31-99 |
52,835,162 |
1,442,077 |
36.64 |
- |
- |
06-30-99 |
56,490,020 |
1,463,133 |
38.61 |
.075 |
- |
09-30-99 |
54,199,232 |
1,464,952 |
37.00 |
.066 |
- |
12-31-99 |
69,735,684 |
1,508,154 |
46.24 |
.159 |
.91088 |
03-31-00 |
77,180,256 |
1,667,111 |
46.30 |
- |
.6910571 |
06-30-00 |
75,423,592 |
1,769,126 |
42.63 |
.085 |
- |
09-30-00 |
76,910,823 |
1,796,215 |
42.82 |
.105 |
- |
12-31-00 |
71,411,520 |
1,850,301 |
38.59 |
.40 |
.80880716 |
03-31-01 |
62,441,675 |
1,902,146 |
32.83 |
- |
- |
06-30-01 |
65,168,878 |
1,927,078 |
33.82 |
.085 |
- |
09-30-01 |
53,311,385 |
1,934,912 |
27.55 |
.065 |
- |
-----------------------------------------------------------------------------------------------------------
|
Number |
|
Market |
COMMON STOCKS - (77.5%) |
|||
Advertising - 1.0% |
|||
Interpublic Group of Companies, Inc. (The) |
10,000 |
$ 333,898 |
$ 204,000 |
Omnicom Group, Inc. |
5,000 |
317,770 |
324,500 |
$ 651,668 |
$ 528,500 |
||
Banking and Finance - 3.8% |
|||
Fifth Third Bancorp |
5,000 |
$ 232,812 |
$ 307,400 |
First National of Nebraska, Inc. |
230 |
346,835 |
557,750 |
State Street Corporation |
16,000 |
66,525 |
728,000 |
Wells Fargo & Co. |
10,000 |
138,173 |
444,500 |
$ 784,345 |
$ 2,037,650 |
||
Beverages Soft Drinks - 1.8% |
|||
PepsiCo, Inc. |
20,000 |
$ 256,225 |
$ 970,000 |
Building - Residential/Commercial - 0.6% |
|||
Centex Corporation |
10,000 |
$ 376,939 |
$ 337,300 |
Casino Hotels - 0.5% |
|||
Harrah's Entertainment, Inc.* |
10,000 |
$ 369,083 |
$ 270,100 |
Communications - Radio and Television - 0.9% |
|||
Clear Channel Communications, Inc.* |
12,000 |
$ 464,114 |
$ 477,000 |
Computers - Hardware and Software - 4.1% |
|||
Cisco Systems, Inc.* |
40,000 |
$ 361,395 |
$ 487,200 |
HNC Software, Inc.* |
18,000 |
125,257 |
336,600 |
I2 Technologies, Inc.* |
15,000 |
733,173 |
51,600 |
Microsoft Corporation* |
20,000 |
93,361 |
1,023,400 |
Retek, Inc.* |
20,000 |
435,690 |
243,400 |
Tibco Software, Inc.* |
6,000 |
153,194 |
44,040 |
$ 1,902,070 |
$ 2,186,240 |
||
Computers - Memory Devices - 0.8% |
|||
EMC Corporation/MASS* |
35,000 |
$ 494,601 |
$ 411,250 |
Computers - Micro - 0.5% |
|||
Sun Microsystems, Inc.* |
30,000 |
$ 592,753 |
$ 248,100 |
Data Processing and ManagemenT - 2.0% |
|||
CSG Systems International, Inc.* |
26,000 |
$ 916,526 |
$ 1,066,000 |
Diversified Operations - 2.2% |
|||
Berkshire Hathaway Inc., Class B * |
500 |
$ 600,020 |
$ 1,165,000 |
Drugs - Medicines - Cosmetics - 9.8% |
|||
Abbott Laboratories |
15,000 |
$ 169,395 |
$ 777,750 |
Amgen, Inc.* |
15,000 |
463,500 |
881,400 |
Bristol-Myers Squibb Co. |
8,000 |
134,842 |
444,480 |
Elan Corporation PLC ADR* |
20,000 |
419,005 |
969,000 |
Johnson & Johnson |
20,000 |
109,396 |
1,108,000 |
Merck & Co., Inc. |
16,000 |
274,266 |
1,065,600 |
$ 1,570,404 |
$ 5,246,230 |
||
*Nonincome-producing security
---------------------------------------------------------------------------------
F-2
|
Number |
|
Market |
COMMON STOCKS (Continued) |
Electrical Equipment and Supplies - 1.7% |
|||
General Electric Co. |
24,000 |
$ 147,473 |
$ 892,800 |
Electric - Generation - 1.5% |
|||
AES Corporation* |
25,000 |
$ 888,405 |
$ 320,500 |
Calpine Corporation* |
17,000 |
757,529 |
387,770 |
Enron Corp. |
4,000 |
346,467 |
108,920 |
$ 1,992,401 |
$ 817,190 |
||
Electronic Components - Conductors - 4.2% |
|||
Altera Corporation* |
30,000 |
$ 847,102 |
$ 494,700 |
Analog Devices, Inc.* |
15,000 |
718,040 |
490,500 |
Applied Materials, Inc.* |
15,000 |
704,837 |
426,600 |
Intel Corporation |
40,000 |
334,735 |
815,600 |
$ 2,604,714 |
$ 2,227,400 |
||
Electronics - 1.8% |
|||
Flextronics International Ltd.* |
35,000 |
$ 1,042,878 |
$ 578,900 |
Solectron Corporation * |
35,000 |
555,577 |
407,750 |
$ 1,598,455 |
$ 986,650 |
||
Finance - Credit Cards - 1.1% |
|||
American Express Company |
20,000 |
$ 837,772 |
$ 581,200 |
Finance - Diversified - 2.5% |
|||
Citigroup, Inc. |
9,999 |
$ 514,720 |
$ 404,960 |
Morgan Stanley Dean Witter & Co. |
20,000 |
1,127,600 |
927,000 |
$ 1,642,320 |
$ 1,331,960 |
||
Finance - Investment Banks - 1.8% |
|||
Merrill Lynch & Co., Inc. |
6,000 |
$ 168,586 |
$ 243,600 |
Goldman Sachs Group, Inc. (The) |
10,000 |
1,039,130 |
713,500 |
$ 1,207,716 |
$ 957,100 |
||
Finance - Real Estate - 3.0% |
|||
Freddie Mac |
25,000 |
$ 416,462 |
$ 1,625,000 |
Finance - Services - 4.5% |
|||
Capital One Financial Corporation |
47,000 |
$ 1,229,953 |
$ 2,163,410 |
Paychex, Inc. |
7,500 |
154,125 |
236,325 |
$ 1,384,078 |
$ 2,399,735 |
||
Insurance - Multiline - 1.5% |
|||
American International Group, Inc. |
10,000 |
$ 566,397 |
$ 780,000 |
Internet Brokers - 0.4% |
|||
Charles Schwab Corporation (The) |
20,000 |
$ 529,151 |
$ 230,000 |
*Nonincome-producing security
--------------------------------------------------------------------------------
F-3
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
|
Number |
|
Market |
COMMON STOCKS (Continued) |
|||
Linen Supply and Related Products - 0.4% |
|||
Cintas Corporation |
6,000 |
$ 166,578 |
$ 241,800 |
Medical Instruments - 0.8% |
|||
Medtronic, Inc. |
10,000 |
$ 504,734 |
$ 435,000 |
Metal - Aluminum - 0.6% |
|||
Alcoa Inc. |
10,000 |
$ 433,710 |
$ 310,100 |
Motion Pictures and Theatres - 0.8% |
|||
The Walt Disney Company |
22,000 |
$ 236,300 |
$ 409,640 |
Petroleum Producing - 5.3% |
|||
BP PLC-Sponsored ADR |
19,000 |
$ 443,238 |
$ 934,230 |
Chevron Corporation |
10,000 |
340,535 |
847,500 |
Exxon Mobil Corporation |
26,000 |
318,735 |
1,024,400 |
$ 1,102,508 |
$ 2,806,130 |
||
Retail Stores - Apparel and Clothing - 1.1% |
|||
Gap, Inc. |
50,000 |
$ 521,360 |
$ 597,500 |
Retail Stores - Building Materials and Home Improvement - 2.2% |
|||
The Home Depot, Inc. |
30,000 |
$ 587,115 |
$ 1,151,100 |
Retail Stores - Department - 1.8% |
|||
Target Corporation |
30,000 |
$ 146,129 |
$ 952,500 |
Telecommunications - 7.5% |
|||
Level 3 Communications * |
90,000 |
$ 1,954,527 |
$ 340,200 |
Nextel Communications, Inc. Class A* |
25,000 |
393,583 |
216,500 |
Sprint PCS Corporation * |
20,000 |
581,333 |
525,800 |
Vodafone Group PLC |
40,000 |
915,541 |
878,400 |
West Corporation* |
85,000 |
1,374,072 |
1,683,000 |
WorldCom, Inc. * |
25,000 |
565,757 |
376,000 |
$ 5,784,813 |
$ 4,019,900 |
||
Telecommunications - Equipment - 3.7% |
|||
Nokia Corporation Sponsored ADR |
50,000 |
$ 585,643 |
$ 782,500 |
Qualcomm Incorporated * |
25,000 |
455,060 |
1,188,500 |
$ 1,040,703 |
$ 1,971,000 |
||
Television - Cable - 0.7% |
|||
Comcast Corporation - Special Class A * |
10,000 |
$ 309,375 |
$ 358,700 |
Transportation - Airfreight - 0.6% |
|||
EGL, Inc. * |
35,000 |
$ 466,542 |
$ 310,450 |
TOTAL COMMON STOCKS |
$33,205,554 |
$41,336,225 |
|
*Nonincome-producing security
--------------------------------------------------------------------------------
F-4
|
Number |
|
Market |
PREFERRED STOCKS (1.9%) |
|||
Banking and Finance - 1.2% |
|||
CFB Capital II 8.20% Cumulative Preferred |
5,000 |
$ 125,000 |
$ 125,250 |
CFC Capital Trust 9.375% Preferred, Series B |
5,000 |
125,000 |
124,000 |
Harris Preferred Capital Corp., |
10,000 |
250,000 |
248,500 |
Silicon Valley Bancshares |
5,000 |
125,000 |
115,000 |
$ 625,000 |
$ 612,750 |
||
Oil Comp. - Exploration and Production - 0.2% |
|||
Nexen, Inc. 9.275% Preferred - Series I |
5,000 |
$ 125,000 |
$ 124,000 |
Utilities - Electric - 0.5% |
|||
Tennessee Valley Authority 6.75% |
10,000 |
$ 250,000 |
$ 258,000 |
Total Preferred Stocks |
$ 1,000,000 |
$ 994,750 |
|
Total Stocks |
$34,205,554 |
$42,330,975 |
|
DEBT SECURITIES (20.2%) |
|||
Auto-Cars/Light Trucks - 0.5% |
|||
General Motors Corporation 7.700% Debentures |
|
|
|
Energy - Alternate Sources - 0.4% |
|||
CalEnergy Co., Inc., 7.630% Notes |
|
|
|
Hotels and Motels - 0.5% |
|||
Marriot International 7.875% Notes Series C |
|
|
|
Household Appliances and Utensils - 0.2% |
|||
Maytag Corp., 9.750% Notes, |
|
|
|
Retail Stores - Department - 0.4% |
|||
Dillard Department Stores, Inc., 7.850% |
|
|
|
Sears Roebuck & Co., 9.375% Debentures |
|
|
|
$ 257,746 |
$ 243,624 |
||
Telecommunications - 0.2% |
|||
Level 3 Communications, Inc., 9.125% Senior |
$250,000 |
$ 241,938 |
$ 104,242 |
*Nonincome-producing security
---------------------------------------------------------------------------------
F-5
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
SEPTEMBER 30, 2001
(Unaudited)
|
Number |
|
Market |
U.S. Government - 4.6% |
|||
U.S. Treasury, 7.500% Notes, |
|
$ 214,098 |
|
U.S. Treasury, 10.750% Bonds |
|
|
|
U.S. Treasury, 7.250% Notes, |
|
|
|
U.S. Treasury, 7.500% Notes, |
|
|
|
U.S. Treasury, 9.375% Bonds, |
|
|
|
U.S. Treasury, 7.625% Bonds, |
|
|
|
U.S. Treasury, 8.750% Bonds, |
|
|
|
U.S. Treasury, 9.125% Bonds, |
|
|
|
U.S. Treasury, 7.500% Bonds, |
|
|
|
$ 2,387,792 |
$ 2,466,388 |
||
Commercial Paper - Short Term - 13.4% |
|||
American Express Credit Corporation |
|
|
|
Ford Motor Credit Corporation |
|
|
|
General Electric Credit Corporation |
|
|
|
---------------------------------------------------------------------------------------------------------------------------------
|
Number |
|
Market |
Commercial Paper - Short Term - (Continued) |
|||
Prudential Funding Corporation |
|
|
|
$ 7,120,993 |
$ 7,120,993 |
||
TOTAL DEBT SECURITIES |
$10,813,057 |
$10,766,632 |
|
TOTAL INVESTMENTS IN SECURITIES - (99.6%) |
|
$45,018,611 |
$53,097,607 |
CASH AND RECEIVABLES |
|
|
|
NET ASSETS, September 30, 2001 (100.0%) |
|
$53,311,385 |
|
The accompanying notes to financial statements
are an integral part of this schedule.
--------------------------------------------------------------------------------
ASSETS |
|
Investments, at market value |
|
Common and preferred stocks (cost $34,205,554) |
$42,330,975 |
Debt securities (cost $10,813,057) |
10,766,632 |
Total investments |
$53,097,607 |
Cash |
192,694 |
Receivables |
|
Dividends and interest |
116,784 |
Subscriptions to capital stock |
15,892 |
TOTAL ASSETS |
$53,422,977 |
=========== |
|
LIABILITIES |
|
Redemption of capital stock |
$ 300 |
Investment advisor, management and |
|
service fees payable |
73,959 |
Accrued operating expenses |
37,333 |
TOTAL LIABILITIES |
$ 111,592 |
NET ASSETS |
|
Capital stock, $1 par value - Authorized 6,000,000 shares, 1,934,912 shares |
|
Paid-in surplus - |
45,298,816 |
Net capital paid in on shares |
$47,233,728 |
Net unrealized appreciation on investments |
8,078,995 |
Accumulated undistributed net realized gain |
(2,131,293) |
Accumulated undistributed net investment income |
129,955 |
TOTAL NET ASSETS |
$53,311,385 |
=========== |
|
NET ASSET VALUE PER SHARE |
$27.55 |
====== |
|
OFFERING PRICE PER SHARE |
$27.55 |
====== |
|
REDEMPTION PRICE PER SHARE |
$27.55 |
====== |
The accompanying notes to financial statements
are an integral part of this statement.
--------------------------------------------------------------------------------
F-8
INVESTMENT INCOME |
||
Interest |
$ 488,635 |
|
Dividends (Net of foreign withholding taxes |
||
of $4,652) |
298,874 |
|
Total Investment Income |
$ 787,509 |
|
EXPENSES |
||
Management fees |
242,250 |
|
Custodian fees |
31,725 |
|
Insurance and Other Administrative Fees |
19,046 |
|
Bookkeeping services |
18,879 |
|
Printing and supplies |
14,922 |
|
Professional services |
14,126 |
|
Dividend disbursing and transfer |
||
agent fees |
21,140 |
|
Computer programming |
6,459 |
|
Taxes and licenses |
799 |
|
Independent Directors Expense & Fees |
7,554 |
|
|
||
|
||
Total Expenses |
$ 376,900 |
|
NET INVESTMENT INCOME |
$ 410,609 |
|
NET REALIZED AND UNREALIZED |
||
GAIN ON INVESTMENTS |
||
Net realized loss on transactions in |
||
investment securities |
$(2,095,678) |
|
Net decrease in unrealized |
||
appreciation of investments |
(19,246,887) |
|
NET REALIZED AND UNREALIZED LOSS |
||
ON INVESTMENTS |
$(21,342,565) |
|
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$(20,931,956) |
|
============= |
The accompanying notes to financial statements
are an integral part of this statement.
----------------------------------------------------------------------------------
F-9
BRIDGES INVESTMENT FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(Unaudited)
2001 |
2000 |
|
INCREASE IN NET ASSETS |
||
Operations - |
||
Net investment income |
$ 410,609 |
$ 535,608 |
Net realized (loss)/gain on |
||
transactions in investment securities |
(2,095,678) |
1,262,957 |
Net decrease in unrealized |
||
appreciation of investments |
(19,246,887) |
(5,842,417) |
Net decrease in net assets |
||
resulting from operations |
$(20,931,956) |
$ (4,043,852) |
Net equalization credits |
1,923 |
11,374 |
|
||
Distributions to shareholders from - |
||
Net investment income |
(287,222) |
(330,181) |
Net realized gain/(loss) from investment |
||
transactions |
-- |
(1,058,779) |
Return of capital |
-- |
-- |
Net capital share transactions |
3,117,120 |
12,596,577 |
Total (decrease)/increase in Net Assets |
$(18,100,135) |
$ 7,175,139 |
NET ASSETS: |
||
Beginning of year |
$ 71,411,520 |
$69,735,684 |
End of nine months |
$ 53,311,385 |
$76,910,823 |
============ |
============ |
The accompanying notes to financial statements
are an integral part of these statements.
-----------------------------------------------------------------------------------------------------------
F-10
BRIDGES INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Bridges Investment Fund, Inc. (Fund) is registered under the Investment Company
Act of 1940 as a diversified, open-end management investment company. The primary
investment objective of the Fund is long-term capital appreciation. In pursuit of
that objective, the Fund invests primarily in common stocks. The following is a
summary of significant accounting policies consistently followed by the Fund in
the preparation of its financial statements. The policies are in conformity
with generally accepted accounting principles.
A. Investments -
Security transactions are recorded on the trade date at purchase
cost or sales proceeds. Dividend income is recognized on the ex-dividend
date, and interest income is recognized on an accrual basis.
Securities owned are reflected in the accompanying statement of
assets and liabilities and the schedule of portfolio investments at
quoted market value. Quoted market value represents the last recorded
sales price on the last business day of the calendar year for securities
traded on a national securities exchange. If no sales were reported
on that day, quoted market value represents the closing bid price.
The cost of investments reflected in the statement of assets and
liabilities and the schedule of portfolio investments is the same as
the basis used for Federal income tax purposes. The difference between
cost and quoted market value of securities is reflected separately as
unrealized appreciation (depreciation) as applicable.
Net unrealized appreciation |
2001 |
2000 |
Net Change |
Aggregate gross unrealized |
|
$34,782,786 |
|
Aggregate gross unrealized |
|
|
|
Net |
$ 8,078,995 |
$33,508,559 |
$(25,429,564) |
============ |
============ |
============ |
The net realized gain (loss) from the sales of securities is determined for
income tax and accounting purposes on the basis of the cost of specific securities.
The gain computed on the basis of average cost would have been substantially the
same as that reflected in the accompanying statement of operations.
---------------------------------------------------------------------------------
F-11
--------------------------------------------------------------------------------
F-12
|
2001 |
2000 |
United States government obligations |
$ -- |
$ -- |
Other Securities |
6,218,944 |
17,293,080 |
Total Cost |
$6,218,944 |
$17,293,080 |
=========== |
========== |
Net proceeds from sales of long-term investments during the nine months
ended September 30, were:
2001 |
2000 |
|
United States government obligations |
$ 200,000 |
$ 200,000 |
Other Securities |
2,972,521 |
8,696,914 |
Total Net Proceeds |
$ 3,172,521 |
$8,896,914 |
=========== |
========== |
|
Total Cost Basis of |
||
Securities Sold |
$ 5,017,507 |
$7,633,957 |
=========== |
========== |
(5) NET ASSET VALUE
The net asset value per share represents the effective price for all
subscriptions and redemptions.
---------------------------------------------------------------------------------
F-13
2001 |
2000 |
|
Shares sold |
152,471 |
302,577 |
Shares issued to shareholders in |
||
reinvestment of net investment |
||
income and realized gain from |
||
security transactions |
10,335 |
28,767 |
162,806 |
331,344 |
|
Shares redeemed |
78,196 |
43,283 |
Net increase |
84,610 |
288,061 |
======= |
======= |
Value of capital stock issued and redeemed is as follows:
2001 |
2000 |
|
Shares sold |
$ 5,290,058 |
$13,264,216 |
Shares issued to shareholders in |
||
reinvestment of net investment |
||
income and realized gain from |
||
security transactions |
371,053 |
1,218,275 |
$ 5,661,111 |
$14,482,491 |
|
Shares redeemed |
2,543,991 |
1,885,914 |
Net increase |
$ 3,117,120 |
$12,596,577 |
=========== |
========== |