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BRIDGES INVESTMENT FUND, INC.
8401 West Dodge Road
256 Durham Plaza
Omaha, Nebraska 68114
(402) 397-4700
FIRST QUARTER
SHAREHOLDER REPORT
2004
Contents of Report
Pages 1 - 4 |
Shareholder Letter |
|
|
Exhibit 1 |
Portfolio Transactions from January 1, 2004, through March 31, 2004 |
|
|
Exhibit 2 |
Selected Historical Financial Information |
Exhibit 3 |
Reports to Stockholders of Management Companies |
|
|
Pages F1 - F14 | Unaudited Financial Statements for the Three Months Ended March 31, 2004 |
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.
Edson L. Bridges II |
Edson L. Bridges III |
N. P. Dodge, Jr. |
John W. Estabrook |
Jon D. Hoffmaster |
John J. Koraleski |
Gary L. Petersen |
John T. Reed |
Roy A. Smith |
Janice D. Stoney |
L.B. Thomas |
John K. Wilson |
Edson L. Bridges II |
Chairman |
Edson L. Bridges III |
President and Chief Executive |
and Investment Officer |
|
Randall D. Greer |
Vice President |
Brian M. Kirkpatrick |
Vice President |
Mary Ann Mason |
Secretary |
Kathleen J. Stranik |
Assistant Secretary |
Nancy K. Dodge |
Treasurer |
Linda J. Morris |
Assistant Treasurer |
Trinh Wu |
Controller |
Deloitte & Touche LLP |
First National Tower |
1601 Dodge Street, Suite 3100 |
Omaha, Nebraska 68102 |
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 |
Special Counsel |
Ballard, Spahr, Andrews & Ingersoll, LLP |
1225 Seventeenth Street, Suite 2300 |
Denver, Colorado 80202 |
April 26, 2004
Dear Shareholder:
Investment Results
Bridges Investment Fund, Inc. had a total return of 2.80% during the first quarter of 2004 based on a year-end 2003 net asset value of $31.04 per share and a March 31, 2004, net asset value of $31.91 per share. On a trailing 12-month basis for the period ending March 31, Bridges Investment Fund, Inc. had a total return of 43.42%. By comparison, the S&P 500 had total returns of 1.69% for the first quarter and 35.10% for the trailing 12 months ended March 31, 2004.
The following table summarizes the 10 largest equity holdings in the Fund as of March 31, 2004:
03/31/04 |
% |
% of |
Price. |
Price |
EPS |
EPS |
EPS Lt. |
||||
No. of |
Market |
of |
Total |
% Chg. |
% Chg. |
5 Yr. Hist. |
% Chg. |
P/E |
P/E |
Future |
|
Shares |
Company |
Value |
Equities |
Assets |
QTD |
12 Mos. |
Gr. Rate |
04 Vs. 03 |
2004 |
2005 |
Gr. Rate |
53,500 |
Capital One |
4,035,505 |
6.6% |
6.1% |
23.1% |
151.3% |
31% |
14% |
13.4 |
11.7 |
15% |
45,000 |
Altria |
2,450,250 |
4.0% |
3.7% |
0.1% |
81.7% |
9% |
5% |
11.2 |
10.4 |
8% |
50,000 |
First Data |
2,108,000 |
3.5% |
3.2% |
2.6% |
13.9% |
20% |
14% |
19.7 |
17.1 |
15% |
30,000 |
Best Buy |
1,551,600 |
2.6% |
2.3% |
-1.0% |
91.8% |
22% |
27% |
21.4 |
18.4 |
15% |
50,000 |
MBNA |
1,381,500 |
2.3% |
2.1% |
11.2% |
83.6% |
21% |
16% |
13.3 |
11.8 |
13% |
22,000 |
Harrah's Entertainment |
1,207,580 |
2.0% |
1.8% |
10.3% |
53.8% |
23% |
6% |
17.9 |
16.4 |
14% |
30,000 |
Home Depot |
1,120,800 |
1.8% |
1.7% |
5.3% |
53.4% |
17% |
11% |
17.9 |
15.5 |
12% |
250 |
First Natl. of Nebraska |
1,093,750 |
1.8% |
1.6% |
11.3% |
44.2% |
8% |
7% |
10.5 |
9.8 |
7% |
350 |
Berkshire Hath. Cl. B |
1,088,853 |
1.8% |
1.6% |
10.5% |
45.6% |
60% |
7% |
24.6 |
22.6 |
|
20,000 |
PepsiCo |
1,077,000 |
1.8% |
1.6% |
15.5% |
34.6% |
13% |
14% |
23.4 |
21.0 |
12% |
17,114,838 |
28.2% |
25.8% |
|||||||||
Total Equities |
60,786,854 |
91.6% |
|||||||||
Total Assets |
66,345,989 |
The first quarter of 2004 was generally positive for equities; the Fund's common stocks had a total return of 3.20%, which was slightly ahead of the 1.69% total return for the S&P 500. The outperformance by the Fund's common stocks during the first quarter was driven primarily by strong gains during the quarter in Berkshire Hathaway (+10.52%), Capital One (+23.12%), Cardinal Health (+13.30%), First National of Nebraska (+11.32%), Flextronics (+17.87%), D. R. Horton (+23.16%), MBNA (+11.03%), PepsiCo (+15.64%), and Target (+17.48%).
We continue to expect 2004 to be a challenging year for both equities and bonds; however, we expect equities to provide materially better returns during the year than fixed income securities, given our expectation that interest rates will rise on balance throughout the year. Since March 16, the 10-year yield has gone from 3.68% to 4.44%; we believe the 10-year yield could rise to 4.75%-5.25% by year end.
While rising interest rates may lead to periods of difficulty for equities, we believe that underlying corporate profitability will continue to improve in 2004, although the rate of change of growth in earnings will slow as the year unfolds. In a 5% 10-year interest rate environment, a P/E of 18-20x earnings for the S&P 500 is appropriate; with $60-$64 of earnings likely for the S&P 500 in 2004, the Index should trade in a range of 1,080-1,280. At 1,130 currently, the Index offers reasonable upside potential during the rest of 2004. That said, we believe that the large run-up in equity prices over the past 12 months increases the odds of a significant correction (at least 5-10%) sometime in 2004.
As earnings growth slows in the second half of the year, we expect to gradually transition the portfolio from a more offensive stance (reducing holdings in economically sensitive stocks) toward a more defensive posture (increasing holdings in companies that are less economically sensitive). Since the market's bottom on March 11, 2003, the Morgan Stanley Cyclical Index is up 86% versus a 33% advance for the Morgan Stanley Consumer Index (and advances of 46% for the S&P 500 and 63% for the NASDAQ Composite). We think a combination of valuation disparities and earnings stability differential skews the odds in favor of stable, consistently growing companies outperforming cyclical, economically sensitive companies over the next 12 months.
Despite the strong overall advance in stock prices since March of 2003, we believe that the Fund's equities remain attractively valued looking out over the next three-to-five years. In general, the Fund's equities have posted good earnings results in the difficult economic environment over the past 24 months; thus far during the first quarter earnings reporting season, earnings results have continued to be strong, and we expect that our companies will continue to generate strong financial performance for the foreseeable future. Consequently, we remain constructive about the longer-term appreciation potential for the portfolio's equities.
Financial Statements
The Fund's unaudited financial statements that appear on pages F-1 through F-14 provide the Schedule of Portfolio Investments, the Statement of Assets and Liabilities, the Statement of Operations, the Statement of Changes in Net Assets, and the Notes to Financial Statements as of March 31, 2004. These presentations comprise our basic report to you. Please refer to Exhibits 1 and 2 for statements about the Fund's portfolio transactions for the First Quarter of 2004 and for the Fund's historical information with respect to net assets, shares outstanding, net asset value per share, dividends, and capital gains distributions from 1963 through 2003. Exhibit 2 also records quarterly information for the March 31, 2004, period compared to the March 31, 2003, results.
Required Reports
Rule 30d-1(6) of the General Rules and Regulations as promulgated under the Investment Company Act of 1940 by the Securities and Exchange Commission requires certain reports to stockholders with respect to any matter that was submitted to a shareholder vote during the period covered by this financial report. The 2004 Annual Meeting of Shareholders of the Fund was held on February 17, 2004. The information that is required to be reported to you with respect to this meeting appears in Exhibit 3. A similar presentation will be made each time an annual or special meeting is held by the Fund, and in the case of this report, the same information will be published again in January, 2005, within the Annual Shareholder Report for 2004 to fulfill certain requirements in connection with the solicitation of proxies for the next Annual Meeting of Shareholders.
Cash Distributions
On April 13, 2004, the Board of Directors declared a $0.055 per share dividend on shares of capital stock that were outstanding on April 13, 2004 -- the record date for this income distribution. This dividend amount will be payable on or about April 26, 2004. This dividend is payable from the $114,040 net investment income earned during the January-March, 2004, Quarter and $6,724 earned during 2003.
Privacy Policy
The 2004 edition of the Privacy Policy for Bridges Investment Fund, Inc. is enclosed with this letter. The policy is unchanged from the one that we delivered or mailed to you last year.
Prospectus
Your personal copy of our Fund's new Prospectus that became effective on April 19, 2004, is included with the other items mailed to you at this time.
Restated Information
The Annual Shareholder Report for 2003 dated January 21, 2004, as originally issued to you carried net asset values per share on the first page of the cover letter that did not agree with the audited figures as recorded in Exhibit 2 on page 11 and in Footnote 7 on page 29. The correct net asset values per share were $31.04 for December 31, 2003, and $23.05 for December 31, 2002. The incorrect numbers as originally reported were $31.10 and $23.10 for the respective dates shown above. Corrected copies of the 2003 Annual Report that record the audited numbers in the text of the cover letter are available upon request to the Fund's Secretary, Mary Ann Mason.
Smooth Transition
The Board of Directors elected Edson L. Bridges III as the Fund's President and Chief Executive and Investment Officer on April 13, 2004. Bridges Investment Management, Inc. succeeded Bridges Investment Counsel, Inc. as manager of the Fund on April 17, 2004, in accordance with the shareholder vote at the February 17, 2004, Annual Meeting. There were 1,646,128 shares represented at that meeting from a total of 2,040,581 shares eligible to vote, to create an 80.55% participation by the Fund's owners of capital stock. This is an excellent turnout of shares for the Annual Meeting, and the Fund's directors and officers thank you for that assistance in conducting our corporate affairs. We feel greatly affirmed that 98.2% of proxy ballots cast voted for the change in investment managers.
Off to a Good Start
There was a 62,530 net gain in total shares outstanding for the Fund during the First Quarter of 2004, representing $1,981,555 in fresh capital for the Fund. One of our long-term goals is to raise net assets to over $100 million over a period of years. Many thanks for being our shareholder and an integral part of this enterprise.
Sincerely yours,
Edson L. Bridges II, CFA
Chairman
Edson L. Bridges III, CFA
President
ELBII:ELBIII:kjs
enc.
Exhibit 1
BRIDGES INVESTMENT FUND, INC.
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
JANUARY 1, 2004, THROUGH MARCH 31, 2004
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 |
|
||
Allergan, Inc. |
3,000 |
3,000 |
Altria Group, Inc. |
5,000 |
45,000 |
Anadarko Petroleum Corp. |
10,000 |
10,000 |
Bank of America Corp. |
7,000 |
10,000 |
Cardinal Health, Inc. |
5,000 |
15,000 |
(1) Centex Corp. |
5,000 |
10,000 |
Citigroup |
2,001 |
12,000 |
Colgate Palmolive Co. |
2,000 |
12,000 |
Comcast Corp. Class A Special |
3,000 |
15,000 |
ConAgra Foods, Inc. |
10,000 |
10,000 |
(2) Eagle Materials, Inc. |
221 |
221 |
(3) Eagle Materials, Inc. Class B |
745 |
745 |
Equity Office Property Trust 7.75% Series G Preferred |
5,000 |
10,000 |
(4) Fair Isaac Corp. |
6,000 |
18,000 |
(5) First Data Corp. |
25,000 |
50,000 |
General Mills, Inc. |
3,000 |
10,000 |
(6) Horton (D.R.), Inc. |
10,000 |
30,000 |
(7) Johnson Controls, Inc. |
5,000 |
10,000 |
Johnson & Johnson |
5,000 |
20,000 |
Level 3 Communications 9.125% due 5/1/08 |
100M |
700M |
Lowes Companies |
5,000 |
10,000 |
Marsh & McLennan |
3,000 |
15,000 |
MBNA Corp. |
5,000 |
50,000 |
Omnicare, Inc. |
7,000 |
7,000 |
Paychex, Inc. |
5,000 |
15,000 |
PepsiCo, Inc. |
5,000 |
20,000 |
Public Storage 8.00% Series R Preferred |
5,000 |
10,000 |
Tyco International |
10,000 |
10,000 |
United Online, Inc. |
7,500 |
30,000 |
Various Issues of Commercial Paper Notes purchased during 1st Quarter, 2004 |
25,024M |
520M |
(1) Received 5,000 shares in a 2-for-1 stock split on March 15, 2004.
(2) Received 221 shares in a spin-off of Centex Corp. on February 2, 2004.
(3) Received 745 shares in a spin-off of Centex Corp. on February 2, 2004.
(4) Received 6,000 shares in a 3-for-2 stock split on March 11, 2004.
(5) Received 18,250 shares in exchange for 50,000 shares of Concord EFS on
February 27, 2004.
(6) Received 10,000 shares in a 3-for-2 stock split on January 13, 2004.
(7) Received 5,000 shares in a 2-for-1 stock split on January 5, 2004.
Exhibit 1
(Continued)
BRIDGES INVESTMENT FUND, INC.
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
JANUARY 1, 2004, THROUGH MARCH 31, 2004
Securities Common Stocks Unless Described Otherwise
|
Sold or Exchanged $1,000 Par Value (M) or Shares |
Held After Transaction $1,000 Par Value (M) or Shares |
AES Corporation |
10,000 |
60,000 |
Alcoa, Inc. |
10,000 |
30,000 |
Altera Corp. |
5,000 |
20,000 |
Cavco Industries, Inc. |
250 |
-- |
(8) Concord EFS |
50,000 |
-- |
Flextronics International Ltd. |
10,000 |
50,000 |
Gap, Inc. |
15,000 |
35,000 |
Level 3 Communications |
8,000 |
157,000 |
MDU Resources Group, Inc. |
22,500 |
-- |
Morgan Stanley |
5,000 |
15,000 |
(9) Nexen, Inc. 9.375% Preferred Series 1 |
5,000 |
-- |
Retek, Inc. |
5,000 |
20,000 |
Solectron Corp. |
13,600 |
36,400 |
Sprint PCS Corp. |
30,000 |
-- |
Sun Microsystems, Inc. |
30,000 |
-- |
U.S. Treasury Bonds 9.125% due 05/15/2009 |
200M |
-- |
Various Issues of Commercial Paper Notes Maturing during 1st Quarter, 2004 |
24,504M |
-- |
(8) Delivered out in exchange for 18,250 shares of First Data Corp. on
February 27, 2004.
(9) Entire issue called at par on February 9, 2004.
Exhibit 2
BRIDGES INVESTMENT FUND, INC.
SELECTED HISTORICAL FINANCIAL INFORMATION
- - - - - - - - - - - - -Year End Statistics - - - - - - - - -
- - - - -
Valuation |
Net |
Shares |
Net Asset |
Dividend/ |
Capital |
07-01-63 |
$ 109,000 |
10,900 |
$10.00 |
$ - |
$ - |
12-31-63 |
159,187 |
15,510 |
10.13 |
.07 |
- |
12-31-64 |
369,149 |
33,643 |
10.97 |
.28 |
- |
12-31-65 |
621,241 |
51,607 |
12.04 |
.285 |
.028 |
12-31-66 |
651,282 |
59,365 |
10.97 |
.295 |
- |
12-31-67 |
850,119 |
64,427 |
13.20 |
.295 |
- |
12-31-68 |
1,103,734 |
74,502 |
14.81 |
.315 |
- |
12-31-69 |
1,085,186 |
84,807 |
12.80 |
.36 |
- |
12-31-70 |
1,054,162 |
90,941 |
11.59 |
.37 |
- |
12-31-71 |
1,236,601 |
93,285 |
13.26 |
.37 |
- |
12-31-72 |
1,272,570 |
93,673 |
13.59 |
.35 |
.08 |
12-31-73 |
1,025,521 |
100,282 |
10.23 |
.34 |
.07 |
12-31-74 |
757,545 |
106,909 |
7.09 |
.35 |
- |
12-31-75 |
1,056,439 |
111,619 |
9.46 |
.35 |
- |
12-31-76 |
1,402,661 |
124,264 |
11.29 |
.38 |
- |
12-31-77 |
1,505,147 |
145,252 |
10.36 |
.428 |
.862 |
12-31-78 |
1,574,097 |
153,728 |
10.24 |
.481 |
.049 |
12-31-79 |
1,872,059 |
165,806 |
11.29 |
.474 |
.051 |
12-31-80 |
2,416,997 |
177,025 |
13.65 |
.55 |
.0525 |
12-31-81 |
2,315,441 |
185,009 |
12.52 |
.63 |
.0868 |
12-31-82 |
2,593,411 |
195,469 |
13.27 |
.78 |
.19123 |
12-31-83 |
3,345,988 |
229,238 |
14.60 |
.85 |
.25 |
12-31-84 |
3,727,899 |
278,241 |
13.40 |
.80 |
.50 |
12-31-85 |
4,962,325 |
318,589 |
15.58 |
.70 |
.68 |
12-31-86 |
6,701,786 |
407,265 |
16.46 |
.688 |
.86227 |
12-31-87 |
7,876,275 |
525,238 |
15.00 |
.656 |
1.03960 |
12-31-88 |
8,592,807 |
610,504 |
14.07 |
.85 |
1.10967 |
12-31-89 |
10,895,182 |
682,321 |
15.97 |
.67 |
.53769 |
12-31-90 |
11,283,448 |
744,734 |
15.15 |
.67 |
.40297 |
12-31-91 |
14,374,679 |
831,027 |
17.30 |
.66 |
.29292 |
12-31-92 |
17,006,789 |
971,502 |
17.51 |
.635 |
.15944 |
12-31-93 |
17,990,556 |
1,010,692 |
17.80 |
.6225 |
.17075 |
12-31-94 |
18,096,297 |
1,058,427 |
17.10 |
.59 |
.17874 |
12-31-95 |
24,052,746 |
1,116,620 |
21.54 |
.575 |
.19289 |
12-31-96 |
29,249,488 |
1,190,831 |
24.56 |
.55 |
.25730 |
12-31-97 |
36,647,535 |
1,262,818 |
29.02 |
.5075 |
.30571 |
12-31-98 |
48,433,113 |
1,413,731 |
34.26 |
.44 |
2.11648 |
12-31-99 |
69,735,684 |
1,508,154 |
46.24 |
.30 |
.91088 |
12-31-00 |
71,411,520 |
1,850,301 |
38.59 |
.40 |
.80880716 |
12-31-01 |
60,244,912 |
1,940,494 |
31.05 |
.26 |
- |
12-31-02 |
45,854,541 |
1,989,769 |
23.05 |
.20 |
- |
12-31-03 |
62,586,435 |
2,016,560 |
31.04 |
.24 |
- |
- - - - Current Quarter Compared to Same Quarter in Prior Year
- - - - -
Valuation |
Net |
Shares |
Net Asset |
Dividend/ |
Capital |
03-31-03 |
45,294,001 |
2,018,489 |
22.44 |
- |
- |
03-31-04 |
66,345,989 |
2,079,090 |
31.91 |
- |
- |
Exhibit 3
BRIDGES INVESTMENT FUND, INC.
REPORTS TO STOCKHOLDERS OF MANAGEMENT COMPANIES
In Accordance With
Rule 30e-1(b) of the General Rules and Regulations Promulgated Under
The Investment Company Act of 1940 as Amended
"If any matter was submitted during the period covered by the shareholder report to a vote of the shareholders, through the solicitation of proxies or otherwise, furnish the following information:"
(1) Annual Meeting held on February 24, 2004, at 11:00 a.m.
(2) Election of Directors for one year terms (All Directors Stand for
Annual Election):
- - - - - - Votes Cast - - - - - - |
|||
Names of Directors Elected at Meeting |
For |
For All Nominees Except |
Withhold Authority To Vote For All Nominees |
Edson L. Bridges II |
1,643,708 |
- |
2,420 |
Edson L. Bridges III |
1,643,666 |
42 |
2,420 |
N. P. Dodge, Jr. |
1,643,708 |
- |
2,420 |
John W. Estabrook |
1,643,708 |
- |
2,420 |
Jon D. Hoffmaster |
1,643,708 |
- |
2,420 |
John J. Koraleski |
1,643,708 |
- |
2,420 |
Gary L. Petersen |
1,643,708 |
- |
2,420 |
John T. Reed |
1,643,708 |
- |
2,420 |
Roy A. Smith |
1,643,708 |
- |
2,420 |
Janice D. Stoney |
1,643,708 |
- |
2,420 |
L.B. Thomas |
1,643,708 |
- |
2,420 |
John K. Wilson |
1,643,708 |
- |
2,420 |
(3) A brief description for each matter voted upon at the meeting:
Matters Voted Upon |
For |
Against |
Abstain |
(a) For a new investment advisory contract with Bridges Investment Management, Inc. as investment adviser to the Fund for the period from April 17, 2004 through April 17, 2005 |
1,616,850 |
12,601 |
16,677 |
(b) For the ratification of the selection of Deloitte & Touche LLP as independent auditors of the Fund for the Fiscal Year ending December 31, 2004 |
1,622,926 |
- |
23,202 |
F-1
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2004
(unaudited)
|
Number |
|
Fair |
COMMON STOCKS - (91.6%) |
|||
Advertising - 1.2% |
|||
Omnicom Group, Inc. |
10,000 |
$ 654,802 |
$ 802,500 |
Airfreight & Logistics - 2.0% |
|||
Expeditors International Washington |
15,000 |
$ 553,554 |
$ 590,400 |
Fedex Corporation |
10,000 |
688,396 |
751,600 |
$ 1,241,950 |
$ 1,342,000 |
||
Auto Parts & Equipment - 0.9% |
|||
Johnson Controls |
10,000 |
$ 385,750 |
$ 591,500 |
Banking and Finance - 6.2% |
|||
Bank of America Corporation |
10,000 |
$ 791,024 |
$ 809,800 |
Fifth Third Bancorp |
10,000 |
486,523 |
553,700 |
First National of Nebraska, Inc. |
250 |
401,835 |
1,093,750 |
State Street Corporation |
15,000 |
62,367 |
781,950 |
Wells Fargo & Co. |
15,000 |
515,731 |
850,050 |
$ 2,257,480 |
$ 4,089,250 |
||
Beverages - Soft Drinks - 1.6% |
|||
PepsiCo, Inc. |
20,000 |
$ 454,058 |
$ 1,077,000 |
Building - Cement/Concrete/Aggregates - 0.1% |
|||
Eagle Materials, Inc. |
221 |
$ 6,245 |
$ 13,006 |
Eagle Materials, Inc. Class B |
745 |
20,556 |
43,508 |
$ 26,801 |
$ 56,514 |
||
Building - Residential/Commercial - 2.4% |
|||
Centex Corporation |
10,000 |
$ 238,696 |
$ 540,600 |
D. R. Horton, Inc. |
30,000 |
407,704 |
1,062,900 |
$ 646,400 |
$ 1,603,500 |
||
Casino Hotels - 1.8% |
|||
Harrah's Entertainment, Inc.* |
22,000 |
$ 729,839 |
$ 1,207,580 |
Computers - Hardware and Software - 2.8% |
|||
Cisco Systems, Inc.* |
40,000 |
$ 361,396 |
$ 942,800 |
Microsoft Corporation* |
30,000 |
266,000 |
747,900 |
Retek, Inc.* |
20,000 |
260,702 |
151,200 |
$ 888,098 |
$ 1,841,900 |
||
Computers - Memory Devices - 0.7% |
|||
EMC Corporation/MASS* |
35,000 |
$ 494,601 |
$ 476,000 |
Conglomerates - Industrial - 0.5% |
|||
General Electric |
10,000 |
$ 270,842 |
$ 305,200 |
*Nonincome-producing security
F-2
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 2004
(unaudited)
|
Number |
|
Fair |
COMMON STOCKS (Continued) |
|||
Data Processing and Management - 5.9% |
|||
Automatic Data Processing |
10,000 |
$ 398,716 |
$ 420,000 |
Fair Isaac and Company, Incorporated |
18,000 |
234,627 |
649,440 |
First Data Corporation |
50,000 |
1,952,060 |
2,108,000 |
Fiserv, Inc.* |
20,000 |
664,527 |
715,400 |
$ 3,249,930 |
$ 3,892,840 |
||
Diversified Operations - 2.1% |
|||
Berkshire Hathaway Inc., Class B * |
350 |
$ 492,609 |
$ 1,088,853 |
Tyco International LTD |
10,000 |
300,500 |
286,500 |
$ 793,109 |
1,375,353 |
||
Drugs - Medicines - Cosmetics - 4.4% |
|||
Abbott Laboratories |
15,000 |
$ 169,395 |
$ 616,500 |
Amgen, Inc.* |
15,000 |
463,500 |
872,250 |
Johnson & Johnson |
20,000 |
603,498 |
1,014,400 |
Merck & Co., Inc. |
10,000 |
197,534 |
441,900 |
$ 1,433,927 |
$ 2,945,050 |
||
E-Commerce - 1.5% |
|||
Ebay, Inc.* |
14,000 |
$ 453,620 |
$ 969,920 |
Education - Higher - 0.4% |
|||
Apollo Group, Inc. |
3,000 |
$ 193,740 |
$ 258,480 |
Electric - Generation - 0.8% |
|||
AES Corporation* |
60,000 |
$ 522,044 |
$ 511,800 |
Electronic Components - Conductors - 4.0% |
|||
Altera Corporation* |
20,000 |
$ 460,228 |
$ 409,600 |
Analog Devices, Inc.* |
15,000 |
539,290 |
720,150 |
Applied Materials, Inc.* |
40,000 |
662,576 |
853,200 |
Intel Corporation |
25,000 |
483,548 |
680,000 |
$ 2,145,642 |
$ 2,662,950 |
||
Electronics - 1.6% |
|||
Flextronics International Ltd.* |
50,000 |
$ 865,950 |
$ 854,500 |
Solectron Corporation * |
36,400 |
295,523 |
201,292 |
$ 1,161,473 |
$ 1,055,792 |
||
Energy - Oil & Gas - Exploration and Production - 0.8% |
|||
Anadarko Petroleum Corporation |
10,000 |
$ 526,200 |
$ 518,600 |
*Nonincome-producing security
F-3
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 2004
(unaudited)
|
Number |
|
Fair |
COMMON STOCKS (Continued) |
|||
Finance - Diversified - 2.2% |
|||
Citigroup, Inc. |
12,000 |
$ 581,682 |
$ 620,400 |
Morgan Stanley Dean Witter & Co. |
15,000 |
750,012 |
859,500 |
$ 1,331,694 |
$ 1,479,900 |
||
Finance - Investment Banks - 1.3% |
|||
Goldman Sachs Group, Inc. |
8,000 |
$ 694,445 |
$ 834,800 |
Finance - Real Estate - 1.3% |
|||
Freddie Mac |
15,000 |
$ 461,417 |
$ 885,900 |
Finance - Services - 9.5% |
|||
Capital One Financial Corporation |
53,500 |
$ 1,935,422 |
$ 4,035,505 |
MBNA Corporation |
50,000 |
1,061,832 |
1,381,500 |
Nelnet, Inc., Class A* |
15,000 |
327,147 |
381,000 |
Paychex, Inc. |
15,000 |
536,898 |
534,000 |
$ 3,861,299 |
$ 6,332,005 |
||
Food Processing - 0.7% |
|||
General Mills, Inc. |
10,000 |
$ 449,708 |
$ 466,800 |
Foods/Meats - Packaged - 0.4% |
|||
ConAgra Foods, Inc. |
10,000 |
$ 276,407 |
$ 269,400 |
Hotels/Resorts/Cruise Lines - 0.7% |
|||
Carnival Corporation, Class A |
10,000 |
$ 253,072 |
$ 449,100 |
Insurance - Brokers - 1.0% |
|||
Marsh & McLennan Cos., Inc. |
15,000 |
$ 743,196 |
$ 694,500 |
Insurance - Multiline - 1.1% |
|||
American International Group, Inc. |
10,000 |
$ 566,397 |
$ 713,500 |
Insurance - Property/Casualty - 0.7% |
|||
Progressive Corporation |
5,000 |
$ 368,147 |
$ 438,000 |
Internet Software & Services - 0.8% |
|||
United Online, Inc.* |
30,000 |
$ 407,509 |
$ 504,600 |
Machinery - Construction/Farming - 0.8% |
|||
Trinity Industries, Inc. |
20,000 |
$ 386,383 |
$ 556,000 |
Medical - Dental - Services - 0.5% |
|||
Omnicare, Inc. |
7,000 |
$ 320,458 |
$ 310,310 |
Medical - Drugs - 1.3% |
|||
Pfizer, Inc. |
25,000 |
$ 787,050 |
$ 876,250 |
*Nonincome-producing security
F-4
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 2004
(unaudited)
|
Number |
|
Fair |
COMMON STOCKS (Continued) |
|||
Medical Products - 0.4% |
|||
Stryker Corporation |
3,000 |
$ 230,903 |
$ 265,590 |
Medical - Wholesale Drug Distribution - 1.9% |
|||
Allergan, Inc. |
3,000 |
$ 262,676 |
$ 252,480 |
Cardinal Health, Inc. |
15,000 |
931,176 |
1,033,500 |
$ 1,193,852 |
1,285,980 |
Metal - Aluminum - 1.6% |
|||
Alcoa, Inc. |
30,000 |
$ 685,675 |
$ 1,040,700 |
Movies & Entertainment - 0.9% |
|||
Viacom, Inc., Class B |
15,000 |
$ 593,509 |
$ 588,150 |
Personal & Household Products - 1.0% |
|||
Colgate Palmolive Company |
12,000 |
$ 621,658 |
$ 661,200 |
Petroleum Producing - 2.5% |
|||
BP PLC-Sponsored ADR |
15,000 |
$ 368,832 |
$ 768,000 |
ChevronTexaco Corporation |
10,000 |
340,535 |
877,800 |
$ 709,367 |
$ 1,645,800 |
||
Publishing - 1.3% |
|||
Gannett, Inc. |
10,000 |
$ 799,707 |
$ 881,400 |
Retail - Restaurants - 1.1% |
|||
Outback Steakhouse, Inc.* |
15,000 |
$ 509,594 |
$ 730,500 |
Retail Stores - Apparel and Clothing - 1.2% |
|||
Gap, Inc. |
35,000 |
$ 172,516 |
$ 767,200 |
Retail Stores - Building Materials and Home Improvement - 2.5% |
|||
The Home Depot, Inc. |
30,000 |
$ 672,737 |
$ 1,120,800 |
Lowes Companies |
10,000 |
550,243 |
561,300 |
$ 1,222,980 |
$ 1,682,100 |
||
Retail Stores - Consumer Electronics - 2.3% |
|||
Best Buy Company, Inc.* |
30,000 |
$ 687,851 |
$ 1,551,600 |
Retail Stores - Department - 1.4% |
|||
Target Corporation |
20,000 |
$ 316,811 |
$ 900,800 |
Steel - 0.7% |
|||
Nucor Corporation |
8,000 |
$ 392,304 |
$ 491,840 |
*Nonincome-producing security
F-5
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 2004
(unaudited)
|
Number |
|
Fair |
COMMON STOCKS (Continued) |
|||
Telecommunications - 3.3% |
|||
Level 3 Communications * |
157,000 |
$ 1,119,225 |
$ 628,000 |
Vodafone Group PLC |
30,000 |
772,993 |
717,000 |
West Corporation * |
35,000 |
687,401 |
875,000 |
$ 2,579,619 |
$ 2,220,000 |
||
Telecommunications - Equipment - 1.2% |
|||
Nokia Corporation Sponsored ADR |
40,000 |
$ 421,175 |
$ 811,200 |
Television - Cable - 0.6% |
|||
Comcast Corporation - Special Class A * |
15,000 |
$ 458,675 |
$ 417,750 |
Tobacco - 3.7% |
|||
Altria Group, Inc. |
45,000 |
$ 1,913,031 |
$ 2,450,250 |
TOTAL COMMON STOCKS (Cost - $42,946,715) |
$42,946,715 |
$60,786,854 |
|
PREFERRED STOCKS - (1.2%) |
|||
Banking and Finance - 0.4% |
|||
Harris Preferred Capital Corp., |
10,000 |
$ 250,000 |
$ 255,500 |
Financial - REITS - 0.8% |
|||
Equity Office Properties Trust, 7.75% Series G |
10,000 |
$ 272,179 |
$ 275,000 |
Public Storage, 8.00% Series R |
10,000 |
270,038 |
272,000 |
$ 542,217 |
$ 547,000 |
||
TOTAL PREFERRED STOCKS (Cost - $792,217) |
$ 792,217 |
$ 802,500 |
|
TOTAL PREFERRED AND COMMON STOCKS |
$43,738,932 |
$61,589,354 |
|
*Nonincome-producing security
F-6
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 2004
(unaudited)
|
Principal |
|
Fair |
DEBT SECURITIES (7.0%) |
|||
Electronic Components - Conductors - 0.4% |
|||
Applied Materials, Inc. 7.125% Senior Notes due October 15, 2017 |
$250,000 |
$ 256,365 |
$ 290,425 |
Energy - Alternate Sources - 0.4% |
|||
CalEnergy Co., Inc., 7.630% Notes |
|
|
|
Finance - Services - 1.7% |
|||
American Express Credit Corporation .850% Commercial Paper due April 06, 2004** |
$260,000 |
$ 259,957 |
$ 259,957 |
American Express Credit Corporation .852% Commercial Paper due April 09, 2004** |
$260,000 |
259,939 |
259,939 |
Duke Capital Corporation 8% Senior Notes due October 1, 2019 |
$250,000 |
276,716 |
300,175 |
MBNA Corporation 7.50% Senior Notes due March 15, 2012 |
$250,000 |
267,672 |
297,675 |
$ 1,064,284 |
$ 1,117,746 |
||
Food - Packaged - 0.4% |
|||
Kraft Foods, Inc. 6.250% Notes due June 1, 2012 |
$250,000 |
$ 263,487 |
$ 280,700 |
Hotels and Motels - 0.5% |
|||
Marriott International 7.875% Notes Series C |
$250,000 |
$ 250,066 |
$ 299,975 |
Medical - Wholesale Drug Distribution - 0.4% |
|||
Cardinal Health, Inc. 6.75% Notes due February 15, 2011 |
$250,000 |
|
|
Retail Stores - Department - 0.7% |
|||
Dillard Department Stores, Inc., 7.850% |
|
|
|
Penney (J.C.) Co., Inc. 7.40% Notes due April 1, 2037 |
|
|
|
$ 414,979 |
$ 430,065 |
||
Services - Data Processing - 0.4% |
|||
Electronic Data Systems 7.125% Notes due October 15, 2009 |
$ 250,000 |
$ 263,177 |
$ 265,500 |
** Commercial Paper is purchased at a discount and redeemed at par.
F-7
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
MARCH 31, 2004
(unaudited)
|
Principal |
|
Fair |
DEBT SECURITIES (Continued) |
|||
Telecommunications - 0.8% |
|||
Level 3 Communications, Inc., 9.125% Senior |
$ 700,000 |
$ 530,819 |
$ 560,000 |
Tobacco - 0.4% |
|||
R.J. Reynolds Holding 7.250% Notes due June 1, 2012 |
$ 250,000 |
$ 260,700 |
$ 251,575 |
DEBT SECURITIES (Continued) |
|||
U.S. Government - 0.9% |
|||
U.S. Treasury, 9.375% Bonds, |
|
|
|
U.S. Treasury, 7.500% Bonds, |
|
|
|
$ 563,253 |
$ 624,719 |
||
TOTAL DEBT SECURITIES (Cost - $4,327,522) |
$ 4,327,522 |
$ 4,641,120 |
|
TOTAL INVESTMENTS IN SECURITIES - (99.8%) (Cost - $48,066,454) |
|
$48,066,454 |
$66,230,474 |
CASH AND RECEIVABLES |
|
|
|
NET ASSETS, March 31, 2004 - (100.0%) |
|
$66,345,989 |
|
The accompanying notes to financial statements
are an integral part of this schedule.
F-8
ASSETS |
|
Investments, at fair value |
|
Common and preferred stocks (cost $43,738,932) |
$61,589,354 |
Debt securities (cost $4,327,522) |
4,641,120 |
Total investments |
$66,230,474 |
Cash |
105,338 |
Receivables |
|
Dividends and interest |
170,511 |
Subscriptions to capital stock |
8,811 |
TOTAL ASSETS |
$66,515,134 |
LIABILITIES |
|
Redemption of capital stock |
$ 23,650 |
Investment advisor, management and |
|
service fees payable |
82,533 |
Accrued operating expenses |
62,962 |
TOTAL LIABILITIES |
$ 169,145 |
NET ASSETS |
|
Capital stock, $1 par value - Authorized 6,000,000 shares, 2,079,090 shares |
|
Paid-in surplus - |
49,492,172 |
Net capital |
$51,571,262 |
Net unrealized appreciation on investments |
18,164,019 |
Accumulated undistributed net realized loss |
( 3,510,056) |
Accumulated undistributed net investment income |
120,764 |
TOTAL NET ASSETS |
$66,345,989 |
=========== |
|
NET ASSET VALUE PER SHARE |
$31.91 |
====== |
|
OFFERING PRICE PER SHARE |
$31.91 |
====== |
|
REDEMPTION PRICE PER SHARE |
$31.91 |
====== |
The accompanying notes are an integral
part of these financial statements.
F-9
INVESTMENT INCOME |
||
Interest |
$ 82,721 |
|
Dividends (Net of foreign withholding taxes |
||
of $675) |
182,219 |
|
Total Investment Income |
$ 264,940 |
|
EXPENSES |
||
Management fees |
82,533 |
|
Custodian fees |
11,003 |
|
Insurance and other administrative fees |
7,835 |
|
Bookkeeping services |
7,122 |
|
Printing and supplies |
10,964 |
|
Professional services |
13,947 |
|
Dividend disbursing and transfer |
||
agent fees |
9,759 |
|
Computer programming |
2,250 |
|
Taxes and licenses |
366 |
|
Independent directors expense and fees |
5,121 |
|
|
||
|
||
Total Expenses |
$ 150,900 |
|
NET INVESTMENT INCOME |
$ 114,040 |
|
NET REALIZED AND UNREALIZED |
||
LOSS ON INVESTMENTS |
||
Net realized loss on transactions in |
||
investments |
$(1,564,823) |
|
Net increase in unrealized appreciation |
||
of investments |
3,227,524 |
|
NET REALIZED AND UNREALIZED GAIN |
||
ON INVESTMENTS |
$ 1,662,701 |
|
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ 1,776,741 |
|
=========== |
The accompanying notes are an integral
part of these financial statements.
F-10
BRIDGES INVESTMENT FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE THREE
MONTHS ENDED MARCH 31, 2004 AND 2003
(Unaudited)
2004 |
2003 |
|
INCREASE IN NET ASSETS |
||
Operations - |
||
Net investment income |
$ 114,040 |
$ 119,774 |
Net realized loss on |
||
transactions in investments |
(1,564,823) |
(111,613) |
Net increase/(decrease) in unrealized |
||
appreciation of investments |
3,227,524 |
(1,207,449) |
Net decrease in net assets |
||
resulting from operations |
$ 1,776,741 |
$ (1,199,288) |
Net equalization debits/credits |
1,258 |
857 |
|
||
Distributions to shareholders from - |
||
Net investment income |
-- |
-- |
Net realized gain from investments |
-- |
-- |
Return of capital |
-- |
-- |
Net capital share transactions |
1,981,555 |
637,891 |
Total increase/(decrease) in net assets |
$ 3,759,554 |
$ (560,540) |
NET ASSETS: |
||
Beginning of year |
$ 62,586,435 |
$ 45,854,541 |
End of three months (including $6,724 of undistributed net investment income in 2003) |
$ 66,345,989 ============ |
$ 45,294,001 ============ |
The accompanying notes are an integral
part of these financial statements.
F-11
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2004
(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 accounting principles generally accepted in the United States of America.
A. Investments
Security transactions are recorded on trade date. Dividend income
is recognized on the ex-divided 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 fair
value based on quoted market prices. Quoted market prices represent
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 price represents the closing bid
price. The cost of investments reflected in the statement of assets and
liabilities and the schedule of portfolio investments is approximately
the same as the basis used for Federal income tax purposes. The difference
between cost and fair value of securities is reflected separately as
unrealized appreciation (depreciation) as applicable.
2004 |
2003 |
Net Change |
|
Net unrealized appreciation |
|
|
|
Aggregate gross unrealized |
$ 19,187,569 |
$ 7,075,828 |
|
Aggregate gross unrealized |
(1,023,550) |
(10,912,605) |
|
Net |
$ 18,164,019 |
$( 3,836,777) |
$ 22,000,796 |
=========== |
=========== |
=========== |
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.
B. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no Federal income tax provision is required. Under the applicable foreign tax law, a withholding tax may be imposed on interest, dividends, and capital gains at various rates.
F-12
C. Distributions to Shareholders
The Fund accrues income dividends to shareholders on a quarterly basis as of ex-dividend date. Distributions of net realized gains are made on an annual basis to shareholders as of the ex-dividend date.
D. Equalization
The Fund uses the accounting practice of equalization by which a portion of the proceeds from sales and costs of redemption of capital shares, equivalent on a per share basis to the amount of undistributed net investment income on the date of the transactions, is credited or charged to undistributed income. As a result, undistributed net investment income per share is unaffected by sales or redemption of capital shares.
E. 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
(2) INVESTMENT ADVISORY CONTRACT
Under an Investment Advisory Contract, Bridges Investment Counsel, Inc. (Investment Adviser) furnishes investment advisory services and performs certain administrative functions for the Fund. In return, the Fund has agreed to pay the Investment Adviser a management fee computed on a quarterly basis at the rate of 1/8 of 1% of the average net asset value of the Fund during the quarter, equivalent to 1/2 of 1% per annum. Certain officers and directors of the Fund are also officers and directors of the Investment Adviser. These officers do not receive any compensation from the Fund other than that which is received indirectly through the Investment Adviser.
The contract between the Fund and the Investment Adviser provides that total expenses of the Fund in any year, exclusive of stamp and other taxes, but including fees paid to the Investment Adviser, shall not exceed, in total, a maximum of 1 and 1/2% of the average month end net asset value of the Fund for the year. Amounts, if any, expended in excess of this limitation are reimbursed by the Investment Adviser as specifically identified in the Investment Advisory Contract. There were no amounts reimbursed during the year ended December 31, 2003.
(3)
DIVIDEND DISBURSING AND TRANSFER AGENTDividend disbursing and transfer agent services are provided by Bridges Investor Services, Inc. (Transfer Agent). The fees paid to the Transfer Agent are intended to approximate the cost to the Transfer Agent for providing such services. Certain officers and directors of the Fund are also officers and directors of the Transfer Agent.
F-13
(4) SECURITY TRANSACTIONS
The cost of long-term investment purchases during the three
months ended
March 31, was:
|
2004 |
2003 |
Other Securities |
$ 5,321,047 |
$ 90,179 |
=========== |
=========== |
Net proceeds from sales of long-term investments during the three
months
ended March 31, were:
2004 |
2003 |
|
United States government obligations |
$ 202,875 |
$ 161,344 |
Other Securities |
2,648,912 |
904,403 |
Total Net Proceeds |
$ 2,851,787 |
$ 1,065,747 |
=========== |
=========== |
|
Total Cost Basis of Securities Sold |
$ 4,416,610 |
$ 1,177,374 |
=========== |
=========== |
(5) NET ASSET VALUE
The net asset value per share represents the effective price for all
subscriptions and redemptions.
2004 |
2003 |
|
Shares sold |
75,068 |
48,260 |
Shares issued to shareholders in |
||
reinvestment of net investment |
||
income and realized gain from |
||
security transactions |
3,308 |
3,949 |
78,376 |
52,209 |
|
Shares redeemed |
15,845 |
23,489 |
Net increase |
62,531 |
28,720 |
======= |
======= |
Value of capital stock issued and redeemed is as follows:
2004 |
2003 |
|
Shares sold |
$ 2,380,393 |
$ 1,088,852 |
Shares issued to shareholders in |
||
reinvestment of net investment |
||
income and realized gain from |
||
security transactions |
106,394 |
91,882 |
$ 2,486,787 |
$ 1,180,734 |
|
Shares redeemed |
505,232 |
542,843 |
Net increase |
$ 1,981,555 |
$ 637,891 |
=========== |
============ |
F-14
(7) DISTRIBUTIONS TO SHAREHOLDERS
On April 13, 2004, a cash distribution was declared from net investment
income accrued through March 31, 2004. This distribution was calculated
as $.0550 per share. The dividend will be paid on April 26, 2004, to
shareholders of record on April 13, 2004.
(8) FEDERAL INCOME TAX INFORMATION
Distributions paid during the years ended December 31, 2003 and 2002, totaled $477,290 and $409,023 and were characterized as ordinary income for tax purposes.
The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the dissimilar character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of December 31, 2003 (date of the latest tax return filed), the components of the tax basis cost of investments and net unrealized appreciation were as follows:
Federal tax cost of investments |
$ 47,614,095 |
Unrealized appreciation |
$ 17,568,249 |
Unrealized depreciation |
$( 2,631,754 ) |
Net unrealized appreciation |
$ 14,936,495 |
As of December 31, 2003 (date of the latest tax return filed), the components of distributable earnings on a tax basis were as follows:
Net unrealized appreciation |
$ 14,936,495 |
Undistributed ordinary income |
$ 6,274 |
Accumulated capital losses |
$( 1,928,636 ) |
The difference between accumulated net realized capital losses and
accumulated capital losses for tax purposes is attributable to the deferral
of capital losses occurring subsequent to October 31, 2003, of $16,598 for
tax purposes. For tax purposes, such losses will be realized in the year
ending December 31, 2004. The accumulated capital losses of $1,928,636
represent net capital loss carryovers that may be used to offset future
realized capital gains for federal income tax purposes. The capital loss
carryovers expire as follows: $1,600 in 2008, $353,438 in 2009, and
$1,573,598 in 2010.