-----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, Je6wKDoFAWhWSvyn+b74wcBxf/yh0It9p7E3ORiGExOZqkmgjpngepqJ7voPAG/G +HgUclopEK0OGz02o6b6Vw== 0000950168-97-002051.txt : 19970804 0000950168-97-002051.hdr.sgml : 19970804 ACCESSION NUMBER: 0000950168-97-002051 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970801 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: 97649637 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 N-30D CENTRAL SECURITIES CORPORATION SEMI-ANNUAL REPORT JUNE 30, 1997 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 Total Stock at Net Net from net gains or investment Unrealized net liquidation asset investment investment capital gains appreciation Year assets preference value income(A) income surplus (losses) of investments 1986 $ 116,731,670 $ 10,230,075 $ 13.26 $ 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 1996 356,685,785 9,102,050 25.64 .27 .28 1.37 18,154,136 214,721,981 6 mos. to June 30, 1997 407,685,839 9,042,675 29.39 .15 .08 .12 18,658,537 247,809,418
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, 1997 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 30, 1997, the market quotations were as follows:
Convertible Preference Stock, $2.00 Series D................. 80 bid, 90 asked 27 9/16 high, 27 3/8 low Common Stock................................................. and last sale
[ 2 ] TO THE STOCKHOLDERS OF CENTRAL SECURITIES CORPORATION: Financial statements for the six months ended June 30, 1997, 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, 1997 1996 Net assets........................................................... $407,685,839 $356,685,785 Convertible Preference Stock at liquidation preference............... (9,042,675) (9,102,050) Net assets applicable to Common Stock................................ $398,643,164 $347,583,735 Net asset coverage per share of Convertible Preference Stock......... $ 1,127.12 $ 979.69 Net assets per share of Common Stock................................. 29.39 25.64 Pro forma net assets per share, reflecting conversion of the Convertible Preference Stock....................................... 27.67 24.21 Shares of Convertible Preference Stock outstanding.............. 361,707 364,082 Shares of Common Stock outstanding.............................. 13,562,710 13,555,021
Comparative operating results are as follows:
Six months ended June 30, 1997 1996 Net investment income............................................... $ 2,329,399 $ 2,357,422 Number of times Preferred dividend earned...................... 6.4 6.2 Per share of Common Stock...................................... .15* .15 * Net realized gain on sale of investments............................ 18,658,537 6,920,621 Increase in net unrealized appreciation of investments.............. 33,087,437 23,066,100 Increase in net assets resulting from operations.................... 54,075,373 32,344,143
* 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 27 to holders of Common Stock. Also, during the first six months of 1997 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 1997 distributions in January 1998. [ 3 ] During the first six months of 1997 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, NY 10152 August 1, 1997 SIGNS OF THE TIMES " "American manufacturing has never been in more trouble than it is now.' Thus the glum introduction to an official report on competitiveness released in 1990, the last time America hosted a G7 summit. Its moroseness matched the nation's mood. Neurosis about the strength of Japan; gloom about the deficit; woe and decline on every side. "How times change. The country that presides over this year's rich-world gathering in Denver is feeling triumphant, even euphoric. "Is this a wonder economy or what?' asked BUSINESS WEEK. "On top of the world' chirped NEWSWEEK. Notwithstanding signs of a slowdown in the second quarter of this year, the economy has been growing faster for longer than most economists thought sustainable. Unemployment has fallen well below the rate at which wage pressures have traditionally started to grip. And inflation is nowhere in sight. Producer prices fell for the fifth consecutive month in May, the longest string of declines since the 1950's. "Some back-slapping is in order, for sure. But today's economic success has also unleashed a Panglossian optimism, and that is more dangerous. A growing chorus of pundits, investors and economists argue that the good times are here -- for good. They claim that such factors as globalization and the rise of information technology have changed the way the economy works, so that old constraints on growth no longer apply. Instead, America can look forward to a prolonged period of prosperity, with both inflation and business cycles tamed. "The stakes in this debate are high. If the new conventional wisdom is correct, America does indeed face a rosy future. If it is not, unfounded confidence could endanger the economy's achievements so far." (THE ECONOMIST, June 21, 1997.) [ 4 ] PRINCIPAL PORTFOLIO CHANGES* April 1 to June 30, 1997 (Common Stock unless specified otherwise)
Number of Shares Held June 30, Purchased Sold 1997 Allmerica Financial Corporation................................ 30,000 120,000 Deltic Timber Corporation...................................... 5,000 80,714 Electronic Data Systems Corporation............................ 200,000 200,000 Household International, Inc................................... 10,000 190,000 IXC Communications Corporation 7-1/4% Junior Conv. Pfd. Due 2007.......................................... 10,181+ 10,181 Intel Corporation.............................................. 30,000 270,000 Kelly Services Inc. Class A.................................... 30,000 -- MGI Pharma, Inc................................................ 50,000 150,000 Media General, Inc. Class A.................................... 60,000 -- RKS Health Ventures Corporation Ser. C Conv. Pfd............... 9,009 9,009 The Reynolds and Reynolds Company Class A...................... 100,000 600,000 Signet Banking Corporation..................................... 5,000 295,000 Trigon Healthcare Inc.......................................... 7,200 --
* Excluding stocks listed under "Miscellaneous" in the Statement of Investments. + 181 of which were received as a dividend. [ 5 ] STATEMENT OF ASSETS AND LIABILITIES June 30, 1997 ASSETS: Investments: General portfolio securities at market value (cost $120,726,476) (Note 1)............................. $ 333,647,860 Securities of affiliated companies (cost $4,467,061) (Notes 1, 5 and 6)....................................... 39,355,095 Short-term debt securities at cost plus accrued interest... 35,230,647 $ 408,233,602 Cash and receivables: Cash....................................................... 430,409 Dividends receivable....................................... 94,100 524,509 Office equipment and leasehold improvements, net................ 19,173 Total Assets.......................................... 408,777,284 LIABILITIES: Payable for securities purchased................................ 951,375 Accrued expenses and reserves................................... 140,070 Total Liabilities..................................... 1,091,445 NET ASSETS........................................................... $ 407,685,839 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 361,707 (Note 2)....................................... $ 9,042,675 Common Stock at par value, $1.00 per share, authorized 20,000,000 shares; issued 13,562,710 (Note 2)................. 13,562,710 Surplus: Paid-in.................................................... $ 117,689,798 Undistributed net gain on sales of investments............. 18,412,929 Undistributed net investment income........................ 1,168,309 137,271,036 Net unrealized appreciation of investments...................... 247,809,418 NET ASSETS........................................................... $ 407,685,839 NET ASSET VALUE PER COMMON SHARE..................................... $29.39
See accompanying notes to financial statements. [ 6 ] STATEMENT OF OPERATIONS For the six months ended June 30, 1997 INVESTMENT INCOME Income: Cash dividends.................................................... $ 1,975,707 Interest.......................................................... 1,025,342 Miscellaneous income.............................................. 43,750 $ 3,044,799 Expenses: Investment research............................................... 107,311 Administration and operations..................................... 148,870 Employees' retirement plans....................................... 3,300 Custodian fees.................................................... 37,222 Franchise and miscellaneous taxes................................. 84,052 Transfer agent and registrar fees and expenses.................... 33,486 Rent and utilities................................................ 75,390 Listing, software and sundry fees................................. 50,295 Legal, auditing and tax fees...................................... 18,848 Stationery, supplies, printing and postage........................ 31,672 Travel and telephone.............................................. 16,102 Directors' fees................................................... 25,000 Insurance......................................................... 48,111 Publications and miscellaneous.................................... 35,741 715,400 Net investment income.................................................. 2,329,399 NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from security transactions........................... 18,658,537 Net increase in unrealized appreciation of investments................. 33,087,437 Net gain on investments........................................... 51,745,974 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... $ 54,075,373
See accompanying notes to financial statements. [ 7 ] STATEMENTS OF CHANGES IN NET ASSETS For the six months ended June 30, 1997 and the year ended December 31, 1996
Six months ended June 30, 1997 1996 FROM OPERATIONS: Net investment income........................................... $ 2,329,399 $ 4,252,357 Net realized gain on investments................................ 18,658,537 18,154,136 Net increase in unrealized appreciation of investments..... 33,087,437 52,705,184 Increase in net assets resulting from operations........... 54,075,373 75,111,677 DIVIDENDS TO STOCKHOLDERS FROM: Net investment income: Preference Stock........................................... (362,789) (753,623) Common Stock............................................... (1,112,454) (3,643,403) Net realized gain from investment transactions.................. (1,600,076) (17,907,647) Decrease in net assets from distributions.................. (3,075,319) (22,304,673) FROM CAPITAL SHARE TRANSACTIONS: (Note 2) Distribution to stockholders reinvested in Common Stock......... -- 11,331,622 Other capital transactions...................................... -- (400) Increase in net assets from capital share transactions..... -- 11,331,222 Total increase in net assets.......................... 51,000,054 64,138,226 NET ASSETS: Beginning of period............................................. 356,685,785 292,547,559 End of period................................................... $407,685,839 $356,685,785
See accompanying notes to financial statements. [ 8 ] STATEMENT OF INVESTMENTS June 30, 1997 PORTFOLIO SECURITIES 91.5% (COMMON STOCKS UNLESS SPECIFIED OTHERWISE)
PRIN. AMT. MARKET OR SHARES VALUE BANKING AND FINANCE 17.5% 600,000 The Bank of New York Company, Inc................. $ 26,100,000 325,000 Capital One Financial Corporation................. 12,268,750 190,000 Household International, Inc...................... 22,313,125 295,000 Signet Banking Corporation........................ 10,620,000 71,301,875 BUILDING PRODUCTS 1.5% 80,714 Deltic Timber Corporation......................... 2,365,929 100,000 USG Corporation(a)................................ 3,650,000 6,015,929 BUSINESS SERVICES 3.0% 600,000 The Reynolds and Reynolds Company Class A......................................... 9,450,000 150,000 UniFirst Corporation.............................. 3,000,000 12,450,000 CHEMICALS 9.7% 1,000,000 Hanna (M. A.) Company............................. 28,812,500 230,000 Martin Color-Fi, Inc.(a).......................... 1,840,000 100,000 Rohm and Haas Company............................. 9,006,250 39,658,750 COMMUNICATIONS 2.7% 56,905 IXC Communications Corporation(a)................. 1,493,756 10,181 IXC Communications Corporation 7-1/4% Junior Conv. Pfd. Due 2007(b)................... 1,201,358 93 IXC Communications Corporation 10% Cum. Pfd.(a)(b)................................. 93,110 440,000 Nextel Communications, Inc. Class A(a)............ 8,332,500 11,120,724 COMPUTER SOFTWARE & SERVICES 5.7% 462,500 American Management Systems, Inc.(a).............. 12,371,875 200,000 Electronic Data Systems Corporation............... 8,200,000 181,129 Peerless Systems Corporation(a)(c)................ 2,490,524 23,062,399
[ 9 ]
PRIN. AMT. MARKET OR SHARES VALUE CONSUMER PRODUCTS AND SERVICES 2.4% 366,100 Church & Dwight Co., Inc.......................... $ 9,793,175 ELECTRONICS 16.9% 740,000 Analog Devices, Inc.(a)........................... 19,656,250 250,000 The DII Group Incorporated........................ 11,000,000 270,000 Intel Corporation................................. 38,289,375 68,945,625 ENERGY 5.0% 300,000 Mercantile International Petroleum Inc.(a)........ 330,000 300,000 Murphy Oil Corporation............................ 14,625,000 110,000 Petroleum Geo-Services ASA ADR(a)................. 5,376,250 Steuart Petroleum Company Warrant to Purchase Common Stock(a)(b)..................... 0 20,331,250 HEALTH CARE 0.3% 150,000 MGI Pharma, Inc.(a)............................... 525,000 70,000 RKS Health Ventures Corporation(a)(b)(d).......... 350,000 15,950 RKS Health Ventures Corporation Series A Conv. Pfd.(a)(b)(d)............................. 199,375 9,009 RKS Health Ventures Corporation Series C Conv. Pfd.(a)(b)(d)............................. 100,000 1,174,375 INDUSTRIAL EQUIPMENT 4.3% 600,000 Brady (W.H.), Inc................................. 17,400,000 INSURANCE 15.2% 120,000 Allmerica Financial Corporation................... 4,785,000 50,000 Gallagher (Arthur J.) & Co........................ 1,887,500 100,000 Integon Corporation............................... 2,500,000 133,333 Mutual Risk Management Ltd........................ 6,116,651 70,000 The Plymouth Rock Company, Inc. Class A(b)(d)................................... 31,500,000 150,000 Provident Companies, Inc.......................... 8,025,000 170,000 Vesta Insurance Group, Inc........................ 7,352,500 62,166,651 LIMITED PARTNERSHIP 0.7% Grumman Hill Investments, L.P.(a)(b).............. 2,762,557 METALS AND MINING 2.8% 300,000 Cyprus Amax Minerals Company...................... 7,350,000 300,000 Morrison Knudsen Corporation(a)................... 4,087,500 11,437,500
[ 10 ]
PRIN. AMT. MARKET OR SHARES VALUE TRANSPORTATION 1.8% 533,757 Transport Corporation of America, Inc. Class B(a)(d)................................... $ 7,205,720 MISCELLANEOUS 2.0% 5,000 Southeast Publishing Ventures, Inc. Series A Pfd.(a)(b)(d).......................... 0 Other investments................................. 8,176,425 8,176,425 Total Portfolio Securities.............. 373,002,955 SHORT-TERM DEBT INVESTMENTS 8.6% $ 6,844,000 Chevron Corporation 5.50% due 7/14/97............. 6,859,694 15,456,000 Ford Motor Corporation 5.50%-5.54% due 7/07/97-7/14/97............................. 15,499,572 12,857,000 General Electric Capital Corp. 5.57%-5.58% due 7/21/97-7/28/97................. 12,871,381 Total Short-Term Investments............ 35,230,647 Total Investments....................... 408,233,602 Liabilities, less cash, receivables and other assets (0.1%)................... (547,763) Net Assets (100%)....................... $407,685,839
(a) Non-dividend paying. (b) Valued at estimated fair value. (c) As a result of a fractional adjustment, the actual number of shares of Common Stock of Peerless Systems Corporation received on conversion of Series B Pfd. Stock was 133,253 shares rather than 133,254 shares as previously reported. (d) 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 30, 1997 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. These estimated values may not reflect amounts that could be realized upon immediate sale, nor amounts that ultimately may be realized. The estimated fair values, also, may differ from the values that would have been used had a liquid market existed, and such differences could be significant. 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. 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 3.241 shares of Common Stock and 1,172,292 authorized but unissued Common shares have been reserved for issuance upon conversion. During the six months ended June 30, 1997, 7,689 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 1997, 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, 1997, excluding short-term investments, were $21,137,007 and $26,617,035, respectively. [ 12 ] As of June 30, 1997, based on cost for Federal income tax purposes, the aggregate gross unrealized appreciation and depreciation for all securities were $249,237,613 and $1,428,195, respectively. 4. OPERATING EXPENSES -- The aggregate remuneration paid during the six months ended June 30, 1997 to officers and directors amounted to $231,965, of which $25,000 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, 1997. 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 $127,400 from The Plymouth Rock Company, Inc. during the six months ended June 30, 1997. Unrealized appreciation related to affiliates increased by $1,117,832 for the six months ended June 30, 1997. 6. RESTRICTED SECURITIES -- The Corporation from time to time invests in securities the resale of which is restricted. On June 30, 1997 such investments had an aggregate value of $36,206,400, which was equal to 8.9% of the Corporation's net assets. Investments in restricted securities at June 30, 1997, including acquisition dates and cost, were: Grumman Hill Investments, L.P., 9/11/85, $535,880; IXC Communications, Inc., 3/15/96, $106 and 4/14/97, $1,010,453; The Plymouth Rock Company, Inc., 12/15/82, $1,500,000 and 6/1/84, $699,986; RKS Health Ventures Corporation, 12/15/94, $700,000, 7/13/95, $199,375 and 4/3/97, $100,000; 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 decreased by $367,870 for the six months ended June 30, 1997. ANNUAL MEETING OF STOCKHOLDERS (unaudited) The annual meeting of stockholders of the Corporation was held on March 12, 1997. At the meeting all of the directors of the Corporation were reelected by the holders of the Preference Stock and Common Stock voting separately, as follows: Donald G. Calder and Jay R. Inglis, 353,690 shares of Preference Stock in favor, 281 shares withheld each; Dudley D. Johnson, 12,304,367 shares of Common Stock in favor, 41,380 shares withheld; Wilmot H. Kidd, 12,304,314 shares of Common Stock in favor, 41,433 shares withheld; and C. Carter Walker, Jr., 12,304,118 shares of Common Stock in favor, 41,629 shares withheld. In addition, the selection of KPMG Peat Marwick LLP as independent auditors of the Corporation for the year 1997 was ratified by the following vote of the holders of the Preference Stock and Common Stock voting together as one class: 12,652,527 shares in favor, 15,978 shares against, 32,004 shares abstaining. [ 13 ] FINANCIAL HIGHLIGHTS
Six Mos. Ended 6/30/97 1996 1995 1994 1993 1992 PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period...... $ 25.64 $ 21.74 $ 17.60 $ 17.90 $ 14.33 $ 11.87 Net investment income..................... .17 .33 .37 .30 .21 .20 Net realized and unrealized gain on securities.............................. 3.81 5.28 5.76 1.08 5.03 3.20 Total from investment operations... 3.98 5.61 6.13 1.38 5.24 3.40 Less: Dividends from net investment income* To Preference Stockholders........... .03 .06 .06 .07 .07 .08 To Common Stockholders............... .08 .28 .33 .22 .18 .20 Distributions from capital gains* To Common Stockholders............... .12 1.37 1.60 1.39 1.42 .66 Total distributions................ .23 1.71 1.99 1.68 1.67 .94 Net asset value, end of period............ $ 29.39 $ 25.64 $ 21.74 $ 17.60 $ 17.90 $ 14.33 Per share market value, end of period.................................. 27.38 24.13 20.88 15.75 15.50 11.63 TOTAL INVESTMENT RETURN, MARKET(%)............................... 16.11+ 22.35 45.65 12.30 47.68 36.71 TOTAL INVESTMENT RETURN, NAV(%).................................. 15.12+ 25.97 34.59 8.62 36.66 29.53 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period(000)............ 407,686 356,686 292,548 226,639 218,868 165,600 Ratio of expenses to average net assets(%)............................... .38| .55 .62 .65 .77 .88 Ratio of net investment income to average net assets(%)........................... 1.23| 1.32 1.69 1.51 1.17 1.42 Portfolio turnover rate(%)................ 6.16+ 9.89 8.27 11.73 15.14 18.56 Average commission rate paid ((cents) per share)..................... 7.00 6.76 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 6/30/97 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, 1997, 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, 1997 and the year ended December 31, 1996, and the financial highlights for the six months ended June 30, 1997 and for each of the years in the five-year period ended December 31, 1996. 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, 1997 by correspondence with the custodian and broker. 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, 1997, the results of its operations for the six months then ended, the changes in its net assets for the six months ended June 30, 1997 and the year ended December 31, 1996, and the financial highlights for the six months ended June 30, 1997 and for each of the years in the five-year period ended December 31, 1996, in conformity with generally accepted accounting principles. Also, in our opinion, the information set forth as of June 30, 1997 and December 31, 1996 and for the six months ended June 30, 1997 and 1996 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, NY July 23, 1997 [ 15 ] BOARD OF DIRECTORS DONALD G. CALDER DUDLEY D. JOHNSON President President G. L. Ohrstrom & Co., Inc. Young & Franklin Inc. New York, NY Liverpool, NY JAY R. INGLIS WILMOT H. KIDD Executive Vice President President Holt Corporation New York, NY
C. CARTER WALKER, JR. Washington, CT 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, NY 10152 212-688-3011 CUSTODIAN The Chase Manhattan Bank, N.A. 770 Broadway, New York, NY 10003 TRANSFER AGENT AND REGISTRAR First Chicago Trust Company of New York P.O. Box 2500, Jersey City, NJ 07303-2500 INDEPENDENT AUDITORS KPMG Peat Marwick LLP 345 Park Avenue, New York, NY 10154 [ 16 ] -----END PRIVACY-ENHANCED MESSAGE-----