-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KCZMI7Fq94F7WIZ+tFV8wkESHx7QPof1tmNysitCoGOACxl3584tPjH3zWnnSJq7 7D+72l1SFdF8oKIWUZ638w== 0000891092-05-001541.txt : 20050808 0000891092-05-001541.hdr.sgml : 20050808 20050808154227 ACCESSION NUMBER: 0000891092-05-001541 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050808 DATE AS OF CHANGE: 20050808 EFFECTIVENESS DATE: 20050808 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL SECURITIES CORP CENTRAL INDEX KEY: 0000018748 IRS NUMBER: 131875970 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-00179 FILM NUMBER: 051005887 BUSINESS ADDRESS: STREET 1: 630 FIFTH AVENUE STREET 2: SUITE 820 CITY: NEW YORK STATE: NY ZIP: 10111 BUSINESS PHONE: 212-698-2020 MAIL ADDRESS: STREET 1: 630 FIFTH AVENUE STREET 2: SUITE 820 CITY: NEW YORK STATE: NY ZIP: 10111 FORMER COMPANY: FORMER CONFORMED NAME: TRANS CENTRAL SECURITIES CORP DATE OF NAME CHANGE: 19700722 FORMER COMPANY: FORMER CONFORMED NAME: BUERGER LADET & RADINSKY INC DATE OF NAME CHANGE: 19671026 N-CSRS 1 e22152_ncsrs.txt FORM N-CSRS 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 811-179 Name of registrant as specified in charter: Central Securities Corporation Address of principal executive offices: 630 Fifth Avenue Suite 820 New York, New York 10111 Name and address of agent for service: Central Securities Corporation, Wilmot H. Kidd, President 630 Fifth Avenue Suite 820 New York, New York 10111 Registrant's telephone number, including area code: 212-698-2020 Date of fiscal year end: December 31, 2005 Date of reporting period: June 30, 2005 Item 1. Reports to Stockholders. ================================================================================ CENTRAL SECURITIES CORPORATION ---------- SEMI-ANNUAL REPORT JUNE 30, 2005 ================================================================================ CENTRAL SECURITIES CORPORATION (Organized on October 1, 1929 as an investment company, registered as such with the Securities and Exchange Commission under the provisions of the Investment Company Act of 1940.) TEN YEAR HISTORICAL DATA
Per Share of Common Stock ------------------------------------------- Total Convertible Net Net Net realized Unrealized net Preference asset investment Divi- Distribu- investment appreciation Year assets Stock(A) value income(B) dends(C) tions(C) gain of investments ---- ------ -------- ----- --------- -------- -------- ------------ -------------- 1994 $226,639,144 $9,687,575 $17.60 $109,278,788 1995 292,547,559 9,488,350 21.74 $ .31 $.33 $1.60 $ 20,112,563 162,016,798 1996 356,685,785 9,102,050 25.64 .27 .28 1.37 18,154,136 214,721,981 1997 434,423,053 9,040,850 29.97 .24 .34 2.08 30,133,125 273,760,444 1998 476,463,575 8,986,125 31.43 .29 .29 1.65 22,908,091 301,750,135 1999 590,655,679 -- 35.05 .26 .26 2.34 43,205,449 394,282,360 2000 596,289,086 -- 32.94 .32 .32 4.03 65,921,671 363,263,634 2001 539,839,060 -- 28.54 .18 .22 1.58* 13,662,612 304,887,640 2002 361,942,568 -- 18.72 .14 .14 1.11 22,869,274 119,501,484 2003 478,959,218 -- 24.32 .09 .11 1.29 24,761,313 229,388,141 2004 529,468,675 -- 26.44 .11 .11 1.21 25,103,157 271,710,179 Six mos. to June 30, 2005** 567,123,767 -- 28.40 .22 .03 .17 33,035,041 277,250,073
A - At liquidation preference. B - Excluding gains or losses realized on sale of investments and the dividend requirement on the Convertible Preference Stock which was redeemed on August 1, 1999. C - Computed on the basis of the Corporation's status as a "regulated investment company" for Federal income tax purposes. Dividends are from undistributed net investment income. Distributions are from long-term investment gains. * Includes a non-taxable return of capital of $.55. ** Unaudited. The Common Stock is listed on the American Stock Exchange. On June 30, 2005 the market quotations were as follows: Common Stock............................. $24.15 low, $24.33 high and $24.19 last sale [2] To the Stockholders of CENTRAL SECURITIES CORPORATION: Financial statements for the six months ended June 30, 2005 reviewed by our independent accountants and other pertinent information are submitted herewith. Comparative net assets are as follows:
June 30, 2005 December 31, (Unaudited) 2004 ----------- ---- Net assets.......................................................... $567,123,767 $529,468,675 Net assets per share of Common Stock................................ 28.40 26.44 Shares of Common Stock outstanding.............................. 19,966,909 20,023,209
Comparative operating results are as follows:
Six months ended June 30, ----------------------------- 2005 2004 (Unaudited) (Unaudited) ----------- ---------- Net investment income............................................... $ 4,385,014 $ 1,648,747 Per share of Common Stock....................................... .22* .08* Net realized gain on sale of investments............................ 33,035,041 23,778,997 Increase in net unrealized appreciation of investments.............. 5,539,894 27,197,470 Increase in net assets resulting from operations.................... 42,959,949 52,625,214
- ---------- * Per-share data are based on the average number of Common shares outstanding. A dividend of $.20 per share of Common Stock was paid on June 24, 2005. Stockholders will be sent a notice concerning the taxability of all 2005 distributions in January 2006. During the first six months of 2005 the Corporation repurchased 56,300 shares of its Common Stock at an average price per share of $23.28. The Corporation may from time to time purchase Common Stock in such amounts and at such prices as the Board of Directors may deem advisable in the best interests of stockholders. Purchases may be made on the American Stock Exchange or in transactions directly with stockholders. We are pleased to report that on June 22, 2005, Mr. Simms C. Browning was elected to the Board of Directors. He retired from Neuberger Berman, LLC after a long career in institutional sales and money management including a number of years as research director. Stockholders' inquiries are welcome. CENTRAL SECURITIES CORPORATION WILMOT H. KIDD, President 630 Fifth Avenue New York, NY 10111 July 27, 2005 [3] TEN LARGEST INVESTMENTS June 30, 2005 (Unaudited)
% of Year First Cost Value Net Assets Acquired ----- ----- --------- -------- (millions) The Plymouth Rock Company, Inc................. $ 2.2 $108.5 19.1% 1982 Murphy Oil Corporation......................... 3.7 31.3 5.5 1974 Brady Corporation.............................. 1.9 27.0 4.8 1984 Unocal Corporation............................. 14.7 26.0 4.6 2004 Intel Corporation.............................. 0.4 25.5 4.5 1986 Capital One Financial Corporation.............. 1.5 24.8 4.4 1994 Convergys Corporation.......................... 28.6 24.6 4.3 1998 TransMontaigne Inc............................. 14.4 20.2 3.6 2005 The TriZetto Group, Inc........................ 6.9 17.4 3.1 2002 Analog Devices, Inc............................ 0.5 16.0 2.8 1987
DIVERSIFICATION OF INVESTMENTS June 30, 2005 (Unaudited)
Percent of Net Assets ----------------------- June 30, December 31, Issues Value Cost 2005 2004 ----- ----- ---- ---- ---- Common Stocks: Insurance............................ 2 $109,042,500 $ 2,610,297 19.2% 20.3% Energy............................... 6 98,697,975 47,071,096 17.4 13.1 Electronics.......................... 7 82,314,900 34,296,240 14.5 12.2 Information Technology Services...... 5 65,421,158 62,868,404 11.5 15.7 Banking and Finance.................. 3 51,544,100 20,671,157 9.1 11.5 Manufacturing........................ 3 51,059,650 18,390,858 9.0 9.7 Health Care.......................... 5 20,048,000 20,027,285 3.5 3.9 Chemicals............................ 3 19,844,500 16,188,926 3.5 3.5 Other................................ 5 11,385,551 9,983,998 2.1 1.6 Short-Term Investments.................. 8 57,389,473 57,389,473 10.1 8.3
[4] PRINCIPAL PORTFOLIO CHANGES April 1 to June 30, 2005 (Unaudited) (Common Stock unless specified otherwise)
Number of Shares ---------------------------------------- Held June 30, Purchased Sold 2005 --------- ---- ---- Agilent Technologies, Inc......................... 50,000 600,000 Aerogroup International, Inc...................... 28,751(a) 28,751 aQuantive, Inc.................................... 10,000 10,000 Arbinet-thexchange, Inc........................... 500,000 500,000 Arch Capital Group Ltd............................ 100,000 -- Brady Corporation................................. 505,000(b) 140,000 870,000 Ceridian Corporation.............................. 21,400 378,600 Convergys Corporation............................. 40,000 1,730,000 Cypress Semiconductor Corporation................. 200,000 200,000 Dover Corporation................................. 70,000 260,000 The Dow Chemical Company.......................... 100,000 100,000 Fifth Third Bancorp............................... 15,000 300,000 Flextronics International Ltd..................... 210,000 1,000,000 Kerr-McGee Corporation............................ 80,649 139,351 Murphy Oil Corporation............................ 300,000(b) 600,000 Nexen Inc......................................... 70,000(b) 140,000 Solectron Corporation............................. 1,000,000 2,000,000 TransMontaigne Inc................................ 925,000 1,925,000
- ---------- (a) Received from Grumman Hill Investments, L.P. (b) Stock split. [5] STATEMENT OF INVESTMENTS June 30, 2005 (Unaudited) PORTFOLIO SECURITIES 89.8% STOCKS (COMMON UNLESS SPECIFIED OTHERWISE)
Prin. Amt. or Shares Value -------- ----- Banking and Finance 9.1% 500,000 The Bank of New York Company, Inc.............. $ 14,390,000 310,000 Capital One Financial Corporation.............. 24,803,100 300,000 Fifth Third Bancorp............................ 12,351,000 ----------- 51,544,100 ----------- Business Services 0.6% 10,000 aQuantive, Inc.(a)............................. 177,200 500,000 Arbinet-thexhange, Inc.(a)..................... 3,350,000 ----------- 3,527,200 ----------- Chemicals 3.5% 100,000 The Dow Chemical Company....................... 4,453,000 1,275,000 PolyOne Corporation(a)......................... 8,440,500 150,000 Rohm and Haas Company.......................... 6,951,000 ----------- 19,844,500 ----------- Communications 0.7% 900,000 Cincinnati Bell Inc.(a)........................ 3,870,000 ----------- Electronics 14.5% 600,000 Agilent Technologies, Inc.(a).................. 13,812,000 430,000 Analog Devices, Inc............................ 16,043,300 200,000 Cypress Semiconductor Corporation(a)........... 2,518,000 1,000,000 Flextronics International Ltd.(a).............. 13,210,000 980,000 Intel Corporation.............................. 25,499,600 200,000 Motorola, Inc.................................. 3,652,000 2,000,000 Solectron Corporation(a)....................... 7,580,000 ----------- 82,314,900 ----------- Energy 17.4% 139,351 Kerr-McGee Corporation......................... 10,633,875 320,000 McMoRan Exploration Co.(a)..................... 6,243,200 600,000 Murphy Oil Corporation......................... 31,338,000 140,000 Nexen Inc.(a).................................. 4,250,400 1,925,000 TransMontaigne Inc.(a)......................... 20,212,500 400,000 Unocal Corporation............................. 26,020,000 ----------- 98,697,975 ----------- Health Care 3.5% 100,000 Abbott Laboratories............................ 4,901,000 100,000 Merck & Co. Inc................................ 3,080,000 100,000 Pfizer Inc..................................... 2,758,000 450,000 Schering-Plough Corporation.................... 8,577,000 150,000 Vical Inc.(a).................................. 732,000 ----------- 20,048,000 -----------
[6]
Prin. Amt. or Shares Value -------- ----- Information Technology Services 11.5% 400,000 Accenture Ltd.(a).............................. $ 9,068,000 378,600 Ceridian Corporation(a)........................ 7,375,128 1,730,000 Convergys Corporation(a)....................... 24,600,600 1,243,000 The TriZetto Group, Inc.(a).................... 17,414,430 1,100,000 Unisys Corporation(a).......................... 6,963,000 ------------ 65,421,158 ------------ Insurance 19.2% 10,000 Erie Indemnity Co. Class A..................... 542,500 70,000 The Plymouth Rock Company, Inc. Class A(b)(c).. 108,500,000 ------------ 109,042,500 ------------ Manufacturing 9.0% 870,000 Brady Corporation Class A...................... 26,970,000 260,000 Dover Corporation.............................. 9,458,800 205,000 Roper Industries, Inc.......................... 14,630,850 ------------ 51,059,650 ------------ Retail Trade 0.1% 28,751 Aerogroup International, Inc. (a)(c)........... 373,763 ------------ Transportation 0.7% 531,557 Transport Corporation of America, Inc. Class B(a)(b)................................. 3,614,588 ------------ Miscellaneous 0.0% Grumman Hill Investments, L.P.(a)(c)........... 0 ------------ Total Portfolio Securities (cost $232,108,261)....................... 509,358,334 ------------ SHORT-TERM INVESTMENTS 10.1% Commercial Paper 4.6% $17,457,000 American Express Credit Corporation 2.8807% - 3.0828% due 7/6/05 - 8/10/05........ 17,427,991 8,958,000 General Electric Capital Corporation 2.9333% - 3.0123% due 7/27/05 - 8/3/05........ 8,935,460 ------------ 26,363,451 ------------ 31,164,000 U.S. Treasury Bills 5.5% 31,164,000 U.S. Treasury Bills 2.7024% - 3.0046% due 7/21/05 - 9/29/05..................................... 31,026,022 ------------ Total Short-Term Investments (cost $57,389,473)........................ 57,389,473 ------------ Total Investments (cost $289,497,734) (99.9%)............... 566,747,807 Cash, receivables and other assets less liabilities (0.1%)................... 375,960 ------------ Net Assets (100%)........................... $567,123,767 ============
- ---------- (a) Non-dividend paying. (b) Affiliate as defined in the Investment Company Act of 1940. (c) Valued at estimated fair value. See accompanying notes to financial statements and independent accountants' review report. [7] STATEMENT OF ASSETS AND LIABILITIES June 30, 2005 (Unaudited) ASSETS: Investments: General portfolio securities at market value (cost $228,652,129) (Note 1).............................. $397,243,746 Securities of affiliated companies (cost $3,456,132) (Notes 1, 5 and 6)........................................ 112,114,588 Short-term investments (cost $57,389,473)................... 57,389,473 $566,747,807 ------------ Cash, receivables and other assets: Cash........................................................ 872,784 Dividends and interest receivable........................... 204,683 Office equipment and leasehold improvements, net............ 503,186 Other assets................................................ 164,775 1,745,428 ------------ ------------ Total Assets............................................ 568,493,235 LIABILITIES: Payable for securities purchased................................ 1,187,680 Accrued expenses and reserves................................... 181,788 ------------ Total Liabilities....................................... 1,369,468 ------------ NET ASSETS.......................................................... $567,123,767 ============ NET ASSETS are represented by: Common Stock $1 par value: authorized 30,000,000 shares; issued 20,023,209 (Note 2)................. $20,023,209 Surplus: Paid-in..................................................... $234,314,820 Undistributed net gain on sales of investments.............. 33,033,265 Undistributed net investment income......................... 3,812,795 271,160,880 ------------ Net unrealized appreciation of investments...................... 277,250,073 Treasury stock, at cost (56,300 shares of Common Stock) (Note 2)...................................................... (1,310,395) ------------ NET ASSETS.......................................................... $567,123,767 ============ NET ASSET VALUE PER COMMON SHARE (19,966,909 shares outstanding)................................... $28.40 ======
See accompanying notes to financial statements and independent accountants' review report. [8] STATEMENT OF OPERATIONS For the six months ended June 30, 2005 (Unaudited) INVESTMENT INCOME Income: Dividends (net of foreign withholding taxes of $1,707).......... $ 4,840,435 Interest........................................................ 719,960 $ 5,560,395 ----------- Expenses: Administration and operations................................... 284,250 Investment research............................................. 248,250 Occupancy costs................................................. 228,297 Franchise and miscellaneous taxes............................... 81,750 Listing, software and sundry fees............................... 63,069 Insurance....................................................... 56,221 Directors' fees................................................. 52,750 Stationery, supplies, printing and postage...................... 30,731 Legal, auditing and tax fees.................................... 24,000 Publications.................................................... 22,955 Travel and telephone............................................ 20,340 Transfer agent and registrar fees and expenses.................. 16,541 Custodian fees.................................................. 15,451 Employees' retirement plans..................................... 7,250 Miscellaneous................................................... 23,526 1,175,381 ----------- ----------- Net investment income............................................... 4,385,014 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from security transactions........................ 33,035,041 Net increase in unrealized appreciation of investments.............. 5,539,894 ----------- Net gain on investments......................................... 38,574,935 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................................................ $42,959,949 ===========
See accompanying notes to financial statements and independent accountants' review report. [9] STATEMENTS OF CHANGES IN NET ASSETS For the six months ended June 30, 2005 and the year ended December 31, 2004
Six months ended June 30, Year ended 2005 December 31, (Unaudited) 2004 --------- ---- FROM OPERATIONS: Net investment income........................................... $ 4,385,014 $ 2,073,746 Net realized gain on investments................................ 33,035,041 25,103,157 Net increase in unrealized appreciation of investments.......... 5,539,894 42,322,038 ------------ ------------ Increase in net assets resulting from operations............ 42,959,949 69,498,941 ------------ ------------ DISTRIBUTIONS TO STOCKHOLDERS FROM: Net investment income........................................... (669,903) (2,177,537) Net realized gain from investment transactions.................. (3,324,559) (23,622,634) ------------ ------------ Decrease in net assets from distributions................... (3,994,462) (25,800,171) ------------ ------------ FROM CAPITAL SHARE TRANSACTIONS: (Note 2) Distribution to stockholders reinvested in Common Stock......... -- 10,682,306 Cost of shares of Common Stock repurchased...................... (1,310,395) (3,871,619) ------------ ------------ Increase (decrease) in net assets from capital share transactions........................................ (1,310,395) 6,810,687 ------------ ------------ Total increase in net assets............................ 37,655,092 50,509,457 NET ASSETS: Beginning of period............................................. 529,468,675 478,959,218 ------------ ------------ End of period (including undistributed net investment income of $3,812,795 and $97,684, respectively)...................... $567,123,767 $529,468,675 ============ ============
See accompanying notes to financial statements and independent accountants' review report. [10] NOTES TO FINANCIAL STATEMENTS -- (unaudited) 1. Significant Accounting Policies -- The Corporation is registered under the Investment Company Act of 1940, as amended, as a non-diversified, closed-end management investment company. The following is a summary of the significant accounting policies consistently followed by the Corporation in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America. Security Valuation -- Securities are valued at the last sale price or, if unavailable, at the closing bid price. Corporate discount notes are valued at amortized cost, which approximates market value. Securities for which no ready market exists, including The Plymouth Rock Company, Inc. Class A Common Stock, are valued at estimated fair value by the Board of Directors. Federal Income Taxes -- It is the Corporation's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its stockholders. Therefore, no Federal income taxes have been accrued. Use of Estimates -- The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates. Other -- Security transactions are accounted for on the date the securities are purchased or sold, and cost of securities sold is determined by specific identification. Dividend income and distributions to stockholders are recorded on the ex-dividend date. 2. Common Stock -- The Corporation repurchased 56,300 shares of its Common Stock in the first six months of 2005 at an average price of $23.28 per share, representing an average discount from net asset value of 14.34%. It may from time to time purchase Common Stock in such amounts and at such prices as the Board of Directors may deem advisable in the best interests of the stockholders. Purchases will only be made at less than net asset value per share, thereby increasing the net asset value of shares held by the remaining stockholders. Shares so acquired may be held as treasury stock, used in optional stock distributions, or retired. 3. Investment Transactions -- The aggregate cost of securities purchased and the aggregate proceeds of securities sold during the six months ended June 30, 2005 (excluding short-term investments), were $49,000,916 and $62,870,467, respectively. As of June 30, 2005, based on cost for Federal income tax purposes, the aggregate gross unrealized appreciation and depreciation for all securities were $299,712,369 and $22,462,296, respectively. 4. Operating Expenses -- The aggregate remuneration paid during the six months ended June 30, 2005 to officers and directors amounted to $600,250, of which $52,750 was paid as fees to directors who were not officers. Benefits to employees are provided through a profit sharing retirement plan. Contributions to the plan are made at the discretion of the Board of Directors, and each participant's benefits vest after three years. No contributions were made to the plan for the six months ended June 30, 2005. [11] NOTES TO FINANCIAL STATEMENTS -- continued (unaudited) 5. Affiliates -- The Plymouth Rock Company, Inc. and Transport Corporation of America, Inc. are affiliates as defined in the Investment Company Act of 1940. The Corporation received dividends of $3,059,000 from affiliates during the six months ended June 30, 2005. Unrealized appreciation related to affiliates increased by $14,607,383 for the six months ended June 30, 2005 to $108,658,456. 6. Restricted Securities -- The Corporation from time to time invests in securities the resale of which is restricted. On June 30, 2005 such investments had an aggregate value of $108,873,763, which was equal to 19.2% of the Corporation's net assets. Investments in restricted securities at June 30, 2005, including acquisition dates and cost, were:
Company Shares Security Date Purchased Cost ---------------------------------- ---------- ------------------- ------------- ---------- Aerogroup International, Inc. 28,751 Common Stock 6/21/05 $ 17,200 (received from Grumman Hill Investments as a final investment distribution) Grumman Hill Investments, L.P. Limited Partnership 9/11/85 0 Interest The Plymouth Rock 70,000 Class A Common 12/15/82 1,500,000 Company, Inc. Stock 6/9/84 699,986
The Corporation does not have the right to demand registration of the restricted securities. Unrealized appreciation related to restricted securities increased by $15,564,753 for the six months ended June 30, 2005 to $106,656,577. 7. Operating Lease Commitment -- The Corporation has entered into an operating lease for office space which expires in 2014 and provides for future minimum rental payments in the aggregate amount of approximately $3.0 million. The lease agreement contains escalation clauses relating to operating costs and real property taxes. Future minimum rental commitments under the lease for the next five years are $157,121 for 2005, $314,241 for 2006 through 2008 and $329,172 for 2009. [12] FINANCIAL HIGHLIGHTS
Six Mos. Ended June 30, 2005 (Unaudited) 2004 2003 2002 2001 2000 ---------- ---- ---- ---- ---- ----- Per Share Operating Performance Net asset value, beginning of period $ 26.44 $ 24.32 $ 18.72 $ 28.54 $ 32.94 $ 35.05 Net investment income*............. .22 .11 .09 .14 .18 .32 Net realized and unrealized gain (loss) on securities............. 1.94 3.33 6.91 (8.71) (2.78) 1.92 -------- -------- -------- -------- -------- -------- Total from investment operations................. 2.16 3.44 7.00 (8.57) (2.60) 2.24 Less: Dividends from net investment income**......................... 03 .11 .11 .14 .22 .32 Distributions from capital gains**. .17 1.21 1.29 1.11 1.03 4.03 Return of capital**................ -- -- -- -- .55 -- -------- -------- -------- -------- -------- -------- Total distributions.......... .20 1.32 1.40 1.25 1.80 4.35 -------- -------- -------- -------- -------- -------- Net asset value, end of period..... $ 28.40 $ 26.44 $ 24.32 $ 18.72 $ 28.54 $ 32.94 ======== ======== ======== ======== ======== ======== Per share market value, end of period.................... $ 24.19 $ 22.85 $ 20.89 $ 16.28 $ 25.31 $ 28.25 Total investment return, market(%)........................ 7.32 16.16 36.22 (31.23) (2.42) 17.75 Total investment return, NAV(%).... 8.18 15.40 39.32 (29.43) (6.54) 7.02 Ratios/Supplemental Data: Net assets, end of period(000)..... $567,124 $529,469 $478,959 $361,943 $539,839 $596,289 Ratio of expenses to average net assets(%)........................ .43+ .55 .56 .50 .45 .38 Ratio of net investment income to average net assets(%)............ 1.05+ .41 .42 .57 .60 .83 Portfolio turnover rate(%)......... 20.21+ 16.72 12.90 19.50 10.32 13.54
- ---------- * Per-share data are based on the average number of shares outstanding during the period. ** Computed on the basis of the Corporation's status as a "regulated investment company" for Federal income tax purposes. + Annualized, not necessarily indicative of full year ratio. See accompanying notes to financial statements and independent accountants' review report. [13] - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF CENTRAL SECURITIES CORPORATION We have reviewed the accompanying statement of assets and liabilities, including the statement of investments, of Central Securities Corporation as of June 30, 2005, and the related statements of operations, changes in net assets and financial highlights for the six-month period ended June 30, 2005. These financial statements are the responsibility of the management of Central Securities Corporation. We have conducted our review in accordance with standards established by the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles. We have previously audited, in accordance with standards established by the Public Company Accounting Oversight Board (United States), the statement of changes in net assets for the year ended December 31, 2004, and financial highlights for each of the five years in the period ended December 31, 2004, and in our report dated January 26, 2005 we expressed an unqualified opinion on those financial statements. KPMG LLP New York, NY July 27, 2005 - -------------------------------------------------------------------------------- [14] Annual Meeting of Stockholders The annual meeting of stockholders of the Corporation was held on March 9, 2005. At the meeting all of the directors of the Corporation were reelected by the following vote of the holders of the Common Stock: Donald G. Calder, 17,794,414 shares in favor, 347,753 shares withheld; Jay R. Inglis, 17,781,974 shares in favor, 360,193 shares withheld; Dudley D. Johnson, 17,793,374 shares in favor, 348,793 shares withheld; Wilmot H. Kidd, 17,641,668 shares in favor, 500,799 shares withheld; and C. Carter Walker, Jr., 17,792,168 shares in favor, 349,999 shares withheld. In addition, the selection of KPMG LLP as independent auditors of the Corporation for the year 2005 was ratified by the following vote of the holders of the Common Stock: 18,056,248 shares in favor, 41,959 shares against, 43,960 shares abstaining. Proxy Voting Policies and Procedures The policies and procedures used by the Corporation to determine how to vote proxies relating to portfolio securities and the Corporation's proxy voting record for the twelve-month period ended June 30, 2005 are available: (1) without charge, upon request, by calling us at our toll-free telephone number (1-866-593-2507), (2) on the Corporation's website at www.centralsecurities.com and (3) on the Securities and Exchange Commission's website at www.sec.gov. Quarterly Portfolio Information The Corporation files its complete schedule of portfolio holdings with the SEC for the first and the third quarter of each fiscal year on Form N-Q. The Corporation's Form N-Q filings are available on the SEC's website at www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. [15] BOARD OF DIRECTORS Jay R. Inglis, Chairman Simms C. Browning Donald G. Calder Dudley D. Johnson Wilmot H. Kidd C. Carter Walker, Jr. OFFICERS Wilmot H. Kidd, President Charles N. Edgerton, Vice President and Treasurer Marlene A. Krumholz, Secretary OFFICE 630 Fifth Avenue New York, NY 10111 212-698-2020 866-593-2507 (toll free) www.centralsecurities.com CUSTODIAN UMB Bank, N. A. Kansas City, MO TRANSFER AGENT AND REGISTRAR Computershare Investor Services (formerly EquiServe Trust Company) P.O. Box 43069, Providence, RI 02940-3069 781-575-2724 www.equiserve.com INDEPENDENT AUDITORS KPMG LLP, New York, NY [16] Item 2. Code of Ethics. The information required by this Item is only required in an annual report on this Form N-CSR. Item 3. Audit Committee Financial Experts. The information required by this Item is only required in an annual report on this Form N-CSR. Item 4. Principal Accountant Fees and Services. The information required by this Item is only required in an annual report on this Form N-CSR. Item 5. Audit Committee of Listed Registrants. The information required by this Item is only required in an annual report on this Form N-CSR. Item 6. Schedule of Investments. Schedule is included as a part of the report to shareholders filed under Item 1 of this Form. Item 7. Disclose Proxy Voting Policies and Procedures for Closed-End Management Companies. The information required by this Item is only required in an annual report on this Form N-CSR. Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable. Item is applicable for annual reports for fiscal years ending on or after December 31, 2005, and every semi-annual report filed after the first such annual report. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
(d) Maximum Number (or (c) Total Number of Approximate Dollar (a) Total Shares (or Units) Value) of Shares (or Number of (b) Average Purchased as Part of Units) that May Yet Be Shares (or Price Paid per Publicly Announced Purchased Under the Period Units) Purchased Share (or Unit) Plans or Programs Plans or Programs - --------------------------- ----------------- ---------------- ------------------------- ------------------------ Month #1 (January 1 0 NA NA NA through January 31) - --------------------------- ----------------- ---------------- ------------------------- ------------------------ Month #2 (February 1 through February 28) 0 NA NA NA - --------------------------- ----------------- ---------------- ------------------------- ------------------------ Month #3 (March 1 through March 31) 7,300 $23.37 NA NA - --------------------------- ----------------- ---------------- ------------------------- ------------------------ Month #4 (April 1 through April 30) 35,200 $23.12 NA NA - --------------------------- ----------------- ---------------- ------------------------- ------------------------ Month #5 (May 1 through May 31) 8,400 $23.35 NA NA - --------------------------- ----------------- ---------------- ------------------------- ------------------------ Month #6 (June 1 through June 30) 5,400 $24.03 NA NA - --------------------------- ----------------- ---------------- ------------------------- ------------------------ Total 56,300 $23.28 NA NA - --------------------------- ----------------- ---------------- ------------------------- ------------------------
All shares purchased were made in open market transactions as authorized by the Board of Directors. Item 10. Submission of Matters to a Vote of Security Holders. There have been no changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors since such procedures were last described in the Corporation's proxy statement dated February 2, 2005. Item 11. Controls and Procedures. (a) The Principal Executive Officer and Principal Financial Officer of Central Securities Corporation (the "Corporation") have concluded that the Corporation's Disclosure Controls and Procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. (b) There have been no changes in the Corporation's internal control over financial reporting (as defined in Rule 30a-3(d)) under the Investment Company Act of 1940 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 Corporation's internal control over financial reporting. Item 12. Exhibits. (a) 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 the Item 2 requirements through filing of an exhibit. The information required by this Item is only required in an annual report on this Form N-CSR. (b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act. Attached hereto. (c) 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. 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. Central Securities Corporation By: /s/ Wilmot H. Kidd ------------------ Wilmot H. Kidd President August 8, 2005 - -------------- Date 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 capabilities and on the dates indicated. By: /s/ Wilmot H. Kidd ------------------ Wilmot H. Kidd President August 8, 2005 - -------------- Date By: /s/ Charles N. Edgerton ----------------------- Charles N. Edgerton Treasurer August 8, 2005 - -------------- Date EX-99.1 2 e22152ex991.txt CERTIFICATION Exhibit 99.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act I, Wilmot H. Kidd, certify that: 1. I have reviewed this report on Form N-CSR of Central Securities Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting 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; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 7/26/05 /s/ Wilmot H. Kidd ------- ------------------ Wilmot H. Kidd President EX-99.2 3 e22152ex992.txt CERTIFICATION Exhibit 99.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act I, Charles N. Edgerton, certify that: 1. I have reviewed this report on Form N-CSR of Central Securities Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting 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; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 7/26/05 /s/ Charles N. Edgerton ------- ----------------------- Charles N. Edgerton Vice President & Treasurer EX-99.3 4 e22152ex993.txt CERTIFICATION Exhibit 99.3 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act I, Wilmot H. Kidd, President of Central Securities Corporation (the "Corporation"), certify that: 1. The Corporation's periodic report on Form N-CSR for the period ended June 30, 2005 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. 7/26/05 /s/ Wilmot H. Kidd ------- ------------------ Date Wilmot H. Kidd President - -------------------------------------------------------------------------------- Certification Pursuant to Section 906 of the Sarbanes-Oxley Act I, Charles N. Edgerton, Treasurer of Central Securities Corporation (the "Corporation"), certify that: 1. The Corporation's periodic report on Form N-CSR for the period ended June 30, 2005 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. 7/26/05 /s/ Charles N. Edgerton ------- ----------------------- Date Charles N. Edgerton Treasurer - -------------------------------------------------------------------------------- A signed original of this written statement required by Section 906 has been provided to the Corporation and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----