-----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, TBVMxEED5WKY3/XYtJOXS/pgEcMjuVWptsBvZqe5le3Hd38Zv/oc8dcZHSK5ccJY 2w6CXLQEQWnaBcqXA0Vy9g== 0000950112-96-002599.txt : 19960805 0000950112-96-002599.hdr.sgml : 19960805 ACCESSION NUMBER: 0000950112-96-002599 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960802 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL SECURITIES CORP CENTRAL INDEX KEY: 0000018748 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 131875970 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-00179 FILM NUMBER: 96602791 BUSINESS ADDRESS: STREET 1: 375 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10152 BUSINESS PHONE: 2126883011 MAIL ADDRESS: STREET 1: 375 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10152 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-30D 1 CENTRAL SECURITIES CORPORATION ------------- SEMI-ANNUAL REPORT JUNE 30, 1996 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 ----------------------------------------------- Distribu- tions(B) declared Divi- from Convertible dends(B) long-term Net Preference declared investment realized Unrealized Total Stock at Net Net from net gains or investment appreciation net liquidation asset investment investment capital gains of Year assets preference value income(A) income surplus (losses) investments ------------ ----------- ------ --------- -------- --------- ----------- ------------ 1985 $111,397,854 $ 5,472,300 $15.38 $ 35,905,193 1986 116,731,670 10,230,075 13.26 $ .18 $.23 $3.47 $15,684,308 32,538,800 1987 110,629,270 10,145,300 11.36 .17 .22 1.55 18,037,871 15,056,016 1988 118,930,727 10,072,150 11.77 .16 .16 .92 2,292,807 25,718,033 1989 129,376,703 10,034,925 12.24 .17 .35 .65* 661,161 38,661,339 1990 111,152,013 10,027,050 10.00 .17 .20 .50* (2,643,394) 25,940,819 1991 131,639,511 10,022,100 11.87 .14 .14 .56* 7,321,233 43,465,583 1992 165,599,864 10,019,000 14.33 .12 .20 .66 8,304,369 70,586,429 1993 218,868,360 9,960,900 17.90 .14 .18 1.42 16,407,909 111,304,454 1994 226,639,144 9,687,575 17.60 .23 .22 1.39 16,339,601 109,278,788 1995 292,547,559 9,488,350 21.74 .31 .33 1.60 20,112,563 162,016,798 6 mos. to June 30, 1996 321,908,144 9,437,375 23.99 .15 .08 .12 6,920,621 185,082,898
- ------------ A -Excluding gains or losses realized on sale of investments. B - Computed on the basis of the Corporation's status as a "regulated investment company" for Federal income tax purposes, except for the six months ended June 30, 1996 which are estimated. * Includes a non-taxable return of capital of $.56 in 1989, $.47 in 1990 and $.11 in 1991. The Preference and Common Stocks are listed on the American Stock Exchange. On June 28, 1996, the market quotations were as follows: Convertible Preference Stock, $2.00 Series D.......... 71 bid, 78 asked Common Stock.......................................... 24 1/8 high, 24 low and last sale
[ 2 ] To the Stockholders of CENTRAL SECURITIES CORPORATION: Financial statements for the six months ended June 30, 1996, as reported upon by our independent auditors, and other pertinent information are submitted herewith. Comparative market values of net assets are as follows:
June 30, December 31, 1996 1995 ---- ---- Net assets........................................ $321,908,144 $292,547,559 Convertible Preference Stock at liquidation preference........................................ (9,437,375) (9,488,350) ------------ ------------ Net assets applicable to Common Stock............. $312,470,769 $283,059,209 ------------ ------------ ------------ ------------ Net asset coverage per share of Convertible Preference Stock.................................. $ 852.75 $ 770.81 Net assets per share of Common Stock.............. 23.99 21.74 Pro forma net assets per share, reflecting conversion of the Convertible Preference Stock............................................. 22.67 20.60 Shares of Convertible Preference Stock outstanding....................................... 377,495 379,534 Shares of Common Stock outstanding............ 13,024,744 13,018,389
Comparative operating results are as follows:
Six months ended June 30, ----------------------------- 1996 1995 ------------ ------------ Net investment income............................. $ 2,357,422 $ 2,358,544 Number of times Preferred dividend earned..... 6.2 6.1 Per share of Common Stock..................... .15* .16* Net realized gain on sale of investments.......... 6,920,621 13,007,875 Increase in net unrealized appreciation of investments..................................... 23,066,100 34,293,814 Increase in net assets resulting from operations...................................... 32,344,143 49,660,233
- --------- * Per-share data are based on the average number of Common shares outstanding during the six-month period and are after recognition of the dividend requirement on the Convertible Preference Stock. A dividend of $.20 per share was paid on June 28 to holders of Common Stock. Also, during the first six months of 1996 dividends of $1.00 per share were paid on the Series D Preference Stock. Stockholders will be sent a notice concerning the taxability of all 1996 distributions in January 1997. [ 3 ] During the first six months of 1996 the Corporation did not repurchase any of its Common or Preference Stock. However, it may from time to time purchase Common or Preference Stock in such amounts and at such prices as the Board of Directors may deem advisable in the best interests of stockholders. Stockholders' inquiries are welcome. CENTRAL SECURITIES CORPORATION WILMOT H. KIDD, President 375 Park Avenue New York, N.Y. 10152 August 2, 1996 ------------------- SIGNS OF THE TIMES "The Internet is like a 20-foot tidal wave coming, and we are in kayaks. It's been coming across the Pacific for thousands of miles and gaining momentum, and it's going to lift you and drop you. We're just a step away from the point when every computer is connected to every other computer, at least in the U.S., Japan, and Europe. It affects everybody--the computer industry, telecommunications, the media, chipmakers, and the software world. Some are more aware of this than others." (Andrew S. Grove, President and Chief Executive Officer of Intel Corporation, "A Conversation with the Lords of Wintel," Fortune, July 8, 1996.) [ 4 ] PRINCIPAL PORTFOLIO CHANGES* April 1 to June 30, 1996 (Common Stock unless specified otherwise)
Number of Shares ------------------------------------------ Held Purchased Sold June 30, 1996 --------- -------- ------------- Allmerica Financial Corporation........... 90,000 90,000 American Management Systems, Inc. ........ 30,000 410,000 Analog Devices, Inc. ..................... 15,000 555,000 Church & Dwight Co., Inc. ................ 6,100 366,100 Cliffs Drilling Company................... 20,000 55,757 Hanna (M.A.) Company...................... 325,000+ 975,000 Hilb, Rogal & Hamilton Company............ 51,600 50,000 Mercantile International Petroleum Inc. ..................................... 300,000 300,000 Mutual Risk Management Ltd. .............. 33,333+ 133,333 Provident Companies, Inc. ................ 27,300 150,000 The Reynolds and Reynolds Company Class A......................................... 40,000 360,000 Santa Fe Energy Resources, Inc ........... 20,000 350,000 USG Corporation........................... 100,000 100,000
- ------------ * Excluding stocks listed under "Miscellaneous" in the Statement of Investments. + Stock split. [ 5 ] STATEMENT OF ASSETS AND LIABILITIES June 30, 1996 ASSETS: Investments: General portfolio securities at market value (cost $98,832,326) (Note 1)........ $245,536,303 Securities of affiliated companies (cost $4,367,061) (Notes 1, 5 and 6)........... 42,745,982 Short-term debt securities at cost plus accrued interest......................... 32,409,931 $320,692,216 ------------ Cash and receivables: Cash and dividends receivable.............. 103,930 Receivable for securities sold............. 1,238,305 1,342,235 ------------ Office equipment and leasehold improvements, net.......................................... 19,629 ------------ Total Assets........................... 322,054,080 LIABILITIES: Accrued expenses and reserves.................. 145,936 ------------ Total Liabilities...................... 145,936 ------------ NET ASSETS......................................... $321,908,144 ------------ ------------ NET ASSETS are represented by: $2.00 Series D Convertible Preference Stock without par value at liquidation preference, $25.00 per share, authorized 750,000 shares; issued 377,495 (Note 2)....................... $ 9,437,375 Common Stock at par value, $1.00 per share, authorized 20,000,000 shares; issued 13,024,744 (Note 2).......................... 13,024,744 Surplus: Paid-in.................................... $106,504,973 Undistributed net gain on sales of investments.............................. 6,892,590 Undistributed net investment income........ 965,564 114,363,127 ------------ Net unrealized appreciation of investments..... 185,082,898 ------------ NET ASSETS......................................... $321,908,144 ------------ ------------ NET ASSET VALUE PER COMMON SHARE................... $23.99 ------ ------
See accompanying notes to financial statements. [ 6 ] STATEMENT OF OPERATIONS For the six months ended June 30, 1996 INVESTMENT INCOME Income: Cash dividends.................................... $ 2,064,886 Interest.......................................... 989,621 Miscellaneous income.............................. 5,485 $ 3,059,992 ----------- Expenses: Investment research............................... 105,241 Administration and operations..................... 148,425 Employees' retirement plans....................... 3,487 Custodian fees.................................... 30,292 Franchise and miscellaneous taxes................. 67,047 Transfer agent's and registrar's fees and expenses........................................ 42,656 Rent and utilities................................ 73,757 Listing, software and sundry fees................. 38,721 Legal, auditing and tax fees...................... 50,176 Stationery, supplies, printing and postage........ 32,116 Travel and telephone.............................. 13,851 Directors' fees................................... 23,000 Insurance......................................... 49,059 Publications and miscellaneous.................... 24,742 702,570 ----------- ----------- Net investment income................................. 2,357,422 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from security transactions.......... 6,920,621 Net increase in unrealized appreciation of investments......................................... 23,066,100 ----------- Net gain on investments........................... 29,986,721 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................................... $32,344,143 ----------- -----------
See accompanying notes to financial statements. [ 7 ] STATEMENTS OF CHANGES IN NET ASSETS For the six months ended June 30, 1996 and the year ended December 31, 1995
Six months ended June 30, 1996 1995 ------------ ------------ FROM OPERATIONS: Net investment income........................... $ 2,357,422 $ 4,539,869 Net realized gain on investments................ 6,920,621 20,112,563 Net increase in unrealized appreciation of investments................................... 23,066,100 52,738,010 ------------ ------------ Increase in net assets resulting from operations................................ 32,344,143 77,390,442 ------------ ------------ DIVIDENDS TO STOCKHOLDERS FROM: Net investment income: Preference Stock............................ (378,861) (771,139) Common Stock................................ (1,103,681) (3,668,730) Net realized gain from investment transactions.................................. (1,500,816) (20,161,206) ------------ ------------ Decrease in net assets from distributions... (2,983,358) (24,601,075) ------------ ------------ FROM CAPITAL SHARE TRANSACTIONS: (Note 2) Distribution to stockholders reinvested in Common Stock.................................. -- 13,119,148 Other capital transactions...................... (200) (100) ------------ ------------ Increase (decrease) in net assets from capital share transactions................ (200) 13,119,048 ------------ ------------ Total increase in net assets............ 29,360,585 65,908,415 NET ASSETS: Beginning of period............................. 292,547,559 226,639,144 ------------ ------------ End of period................................... $321,908,144 $292,547,559 ------------ ------------ ------------ ------------
See accompanying notes to financial statements. [ 8 ] STATEMENT OF INVESTMENTS June 30, 1996 PORTFOLIO SECURITIES 89.5% (COMMON STOCKS UNLESS SPECIFIED OTHERWISE)
Prin. Amt. Market or Shares Value - ------------ ------------ BANKING AND FINANCE 14.5% 300,000 The Bank of New York Company, Inc..... $ 15,375,000 325,000 Capital One Financial Corporation..... 9,262,500 200,000 Household International, Inc. ........ 15,200,000 300,000 Signet Banking Corporation............ 6,975,000 ------------ 46,812,500 ------------ BUILDING PRODUCTS 0.8% 100,000 USG Corporation(a).................... 2,787,500 ------------ BUSINESS SERVICES 7.4% 50,000 Kelly Services, Inc. Class A.......... 1,462,500 360,000 The Reynolds and Reynolds Company Class A............................. 19,170,000 150,000 UniFirst Corporation.................. 3,168,750 ------------ 23,801,250 ------------ CHEMICALS 8.6% 975,000 Hanna (M.A.) Company.................. 20,353,125 230,000 Martin Color-Fi, Inc.(a).............. 1,236,250 100,000 Rohm and Haas Company................. 6,275,000 ------------ 27,864,375 ------------ COMMUNICATIONS 4.3% 27,461 Frontier Corporation.................. 840,993 100,000 GTE Corporation....................... 4,475,000 93 IXC Communications Corporation 10% Cum. Pfd. (a)(b)................ 96,409 440,000 Nextel Communications, Inc. Class A(a).................................. 8,387,500 ------------ 13,799,902 ------------ COMPUTER SOFTWARE & SERVICES 3.8% 410,000 American Management Systems, Inc.(a)............................... 11,992,500 197,302 Peerless Systems Corporation Series B Conv. Pfd.(a)(b)...................... 293,819 Peerless Systems Corporation Warrants to Purchase Common Stock(a)(b)...... 12,000 ------------ 12,298,319 ------------
[ 9 ]
Prin. Amt. Market or Shares Value - ------------ ------------ CONSUMER PRODUCTS AND SERVICES 2.4% 366,100 Church & Dwight Co., Inc.............. $ 7,642,338 ------------ ELECTRONICS 11.2% 555,000 Analog Devices, Inc.(a)............... 14,083,125 300,000 Intel Corporation..................... 22,031,250 ------------ 36,114,375 ------------ ENERGY 6.9% 55,757 Cliffs Drilling Company............... 1,895,738 300,000 Mercantile International Petroleum Inc. (a).............................. 390,000 185,000 Murphy Oil Corporation................ 8,394,375 100,000 Petroleum Geo-Services ASA ADR (a).... 2,837,500 350,000 Santa Fe Energy Resources, Inc.(a) ... 4,156,250 Steuart Petroleum Company Warrant to Purchase Common Stock(a)(b)...... 0 100,000 Tidewater Inc. ....................... 4,387,500 ------------ 22,061,363 ------------ HEALTH CARE 0.3% 70,000 RKS Health Ventures Corporation (a)(b)(c)............................. 784,000 15,950 RKS Health Ventures Corporation Series A Conv. Pfd. (a)(b)(c)................ 223,300 ------------ 1,007,300 ------------ INDUSTRIAL EQUIPMENT 6.7% 600,000 Brady (W.H.) Co. ..................... 13,350,000 280,000 Measurex Corporation.................. 8,190,000 ------------ 21,540,000 ------------ INSURANCE 16.7% 90,000 Allmerica Financial Corporation....... 2,688,750 50,000 Hilb, Rogal and Hamilton Company...... 693,750 133,333 Mutual Risk Management Ltd. .......... 4,166,656 70,000 The Plymouth Rock Company, Inc. Class A(b)(c)....................... 35,000,000 150,000 Provident Companies, Inc.............. 5,550,000 168,900 Vesta Insurance Group, Inc............ 5,637,038 ------------ 53,736,194 ------------ LIMITED PARTNERSHIP 0.3% Grumman Hill Investments, L.P.(a)(b)............................ 850,687 ------------ METALS AND MINING 2.1% 300,000 Cyprus Amax Minerals Company.......... 6,862,500 ------------
[ 10 ]
Prin. Amt. Market or Shares Value - ------------ ------------ PUBLISHING 1.2% 100,000 Media General, Inc. Class A........... $ 3,725,000 5,000 Southeast Publishing Ventures, Inc. Series A Pfd.(a)(b)(c).............. 0 ------------ 3,725,000 ------------ TRANSPORTATION 2.1% 533,757 Transport Corporation of America, Inc. Class B(a)(c)....................... 6,738,682 ------------ MISCELLANEOUS 0.2% Other investments..................... 640,000 ------------ Total Portfolio Securities.... 288,282,285 ------------ SHORT-TERM DEBT INVESTMENTS 10.1% $ 9,670,000 Chevron Corporation 5.28% due 7/8/96.............................. 9,715,385 11,231,000 Ford Motor Credit Corp. 5.29%-5.40% due 7/1/96-7/29/96.................. 11,270,374 11,400,000 General Electric Capital Corp. 5.36%- 5.37% due 7/15/96-7/22/96........... 11,424,172 ------------ Total Short-Term Investments................. 32,409,931 ------------ Total Investments............. 320,692,216 ------------ Cash, receivables and other assets, less liabilities--0.4% 1,215,928 ------------ Net Assets--100%.............. $321,908,144 ------------ ------------
- ------------ (a) Non-dividend paying. (b) Valued at estimated fair value. (c) Affiliate as defined in the Investment Company Act of 1940. See accompanying notes to financial statements. [ 11 ] NOTES TO FINANCIAL STATEMENTS 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 generally accepted accounting principles. Security Valuation--Securities are valued at the last sale price on June 28, 1996 or, if unavailable, at the closing bid price. 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 financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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 may differ from estimates. Other--Security transactions are accounted for on the date the securities are purchased or sold. Dividend income and distributions to stockholders are recorded on the ex-dividend date. 2. Preference Stock and Common Stock--The Convertible Preference Stock is redeemable at the Corporation's option at $27.50 per share. Dividends are cumulative. Each share is convertible into 3.12 shares of Common Stock and 1,177,784 authorized but unissued Common shares have been reserved for issuance upon conversion. During the six months ended June 30, 1996, 6,355 shares of Common Stock were issued upon conversion of shares of Preference Stock. The Corporation did not repurchase any of its Common or Preference Stock in the first six months of 1996, but it may from time to time purchase Common or Preference 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, available for optional stock distributions, or may be retired. 3. Investment Transactions--The aggregate cost of securities purchased and the aggregate proceeds of securities sold during the six months ended June 30, 1996, excluding short-term investments, were $16,407,096 and $9,565,123, respectively. As of June 30, 1996, based on cost for Federal income tax purposes, the aggregate gross unrealized appreciation and depreciation for all securities were $187,017,518 and $1,934,620, respectively. [ 12 ] NOTES TO FINANCIAL STATEMENTS--Continued 4. Operating Expenses--The aggregate remuneration paid during the six months ended June 30, 1996 to officers and directors amounted to $225,267, of which $23,000 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, 1996. 5. Affiliates--The Plymouth Rock Company, Inc., RKS Health Ventures Corporation, Southeast Publishing Ventures, Inc. and Transport Corporation of America, Inc. are affiliates as defined in the Investment Company Act of 1940. The Corporation received a dividend of $371,700 from The Plymouth Rock Company, Inc. during the six months ended June 30, 1996. Unrealized appreciation related to affiliates increased by $708,401 for the six months ended June 30, 1996. 6. Restricted Securities--The Corporation from time to time invests in securities the resale of which is restricted. On June 30, 1996 such investments had an aggregate value of $37,260,215, which was equal to 11.6% of the Corporation's net assets. Investments in restricted securities at June 30, 1996, including acquisition dates and cost, were: Grumman Hill Investments, L.P., 9/11/85, $537,052; IXC Communications, Inc., 3/15/96, $106; Peerless Systems Corporation, 12/21/92, $305,819; The Plymouth Rock Company, Inc., 12/15/82, $1,500,000, 6/1/84, $699,986; RKS Health Ventures Corporation, 12/15/94, $700,000, 7/13/95, $199,375; Southeast Publishing Ventures, Inc., 4/5/89, $5,200; and Steuart Petroleum Company, 6/8/93, $52,500. In general, the Corporation does not have the right to demand registration of the restricted securities. Unrealized appreciation related to restricted securities increased by $162,959 for the six months ended June 30, 1996. ANNUAL MEETING OF STOCKHOLDERS The annual meeting of stockholders of the Corporation was held on March 20, 1996. At the meeting all of the directors of the Corporation were reelected by the holders of $2.00 Series D Convertible Preference Stock and Common Stock voting separately, as follows: Donald G. Calder, 358,229 shares of $2.00 Series D Convertible Preference Stock in favor, 182 shares withheld; Jay R. Inglis, 358,229 shares of $2.00 Series D Convertible Preference Stock in favor, 182 shares withheld; Dudley D. Johnson, 12,290,882 shares of Common Stock in favor, 36,609 shares withheld; Wilmot H. Kidd, 12,290,882 shares of Common Stock in favor, 36,609 shares withheld; and C. Carter Walker, Jr., 12,290,882 shares of Common Stock in favor, 36,609 shares withheld. In addition, the selection of KPMG Peat Marwick LLP as independent auditors of the Corporation for the year 1996 was ratified by the following vote of the holders of $2.00 Series D Convertible Preference Stock and Common Stock voting together as one class: 12,637,486 shares in favor, 22,720 shares against, 25,696 shares abstaining. [ 13 ] FINANCIAL HIGHLIGHTS
Six Mos. Ended 6/30/96 1995 1994 1993 1992 1991 ------- ------- ------- ------- ------- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period......................... $ 21.74 $ 17.60 $ 17.90 $ 14.33 $ 11.87 $ 10.00 Net investment income............ .18 .37 .30 .21 .20 .22 Net realized and unrealized gain on securities.................. 2.30 5.76 1.08 5.03 3.20 2.42 ------- ------- ------- ------- ------- ------- Total from investment operations............... 2.48 6.13 1.38 5.24 3.40 2.64 Less: Dividends from net investment income* To Preference Stockholders... .03 .06 .07 .07 .08 .08 To Common Stockholders....... .08 .33 .22 .18 .20 .14 Distributions from capital gains* To Common Stockholders....... .12 1.60 1.39 1.42 .66 .44 Returns of capital* To Common Stockholders....... -- -- -- -- -- .11 ------- ------- ------- ------- ------- ------- Total distributions........ .23 1.99 1.68 1.67 .94 .77 ------- ------- ------- ------- ------- ------- Net asset value, end of period... $ 23.99 $ 21.74 $ 17.60 $ 17.90 $ 14.33 $ 11.87 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Per share market value, end of period......................... 24.00 20.88 15.75 15.50 11.63 9.25 TOTAL INVESTMENT RETURN(%)....... 14.56+ 45.65 12.30 47.68 36.71 29.00 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period(000)... 321,908 292,548 226,639 218,868 165,600 131,640 Ratio of expenses to average net assets(%)...................... .45++ .62 .65 .77 .88 .96 Ratio of net investment income to average net assets(%).......... 1.52++ 1.69 1.51 1.17 1.42 1.78 Portfolio turnover rate(%)....... 3.52+ 8.27 11.73 15.14 18.56 16.69 Average commission rate paid (cent per share)............... 6.98 6.89 7.11
- --------- * Computed on the basis of the Corporation's status as a "regulated investment company" for Federal income tax purposes, except for the six months ended 6/30/96 which are estimated. + Not annualized. ++ Annualized. [ 14 ] INDEPENDENT AUDITORS' REPORT TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF CENTRAL SECURITIES CORPORATION We have audited the accompanying statement of assets and liabilities, including the statement of investments of Central Securities Corporation as of June 30, 1996, and the related statement of operations for the six months then ended, the statements of changes in net assets for the six months ended June 30, 1996 and the year ended December 31, 1995, and the financial highlights for the six months ended June 30, 1996 and for each of the years in the five-year period ended December 31, 1995. These financial statements and financial highlights are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of June 30, 1996 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Central Securities Corporation as of June 30, 1996, the results of its operations for the six months then ended, the changes in its net assets for the six months ended June 30, 1996 and the year ended December 31, 1995, and the financial highlights for the six months ended June 30, 1996 and for each of the years in the five-year period ended December 31, 1995, in conformity with generally accepted accounting principles. Also, in our opinion, the information set forth as of June 30, 1996 and December 31, 1995 and for the six months ended June 30, 1996 and 1995 in the table appearing on page 3 is fairly stated in all material respects in relation to the financial statements from which it has been derived. KPMG PEAT MARWICK LLP New York, N. Y. July 24, 1996 [ 15 ] BOARD OF DIRECTORS DONALD G. CALDER DUDLEY D. JOHNSON Partner President G. L. Ohrstrom & Co. Young & Franklin Inc. New York, N. Y. Liverpool, N. Y. JAY R. INGLIS WILMOT H. KIDD Executive Vice President President Holt Corporation New York, N. Y. C. CARTER WALKER, JR. Private Investor GARDINER S. ROBINSON Director Emeritus OFFICERS WILMOT H. KIDD, President CHARLES N. EDGERTON, Vice President and Treasurer KAREN E. RILEY, Secretary OFFICE 375 Park Avenue, New York, N. Y. 10152 212-688-3011 CUSTODIAN The Chase Manhattan Bank, N.A. 770 Broadway, New York, N. Y. 10003 TRANSFER AGENT AND REGISTRAR First Chicago Trust Company of New York P.O. Box 2500, Jersey City, N.J. 07303-2500 INDEPENDENT AUDITORS KPMG Peat Marwick LLP 345 Park Avenue, New York, N. Y. 10154 [ 16 ] -----END PRIVACY-ENHANCED MESSAGE-----