-----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, Wq/JGxRTUmgqnjUZsAutimNgN2Mx74OZASjkGE+58SeiOqLIsGmn1LaAOOjzN+YW 2GbXShyjRdo5c1tvnwp94g== 0000912057-01-006393.txt : 20010224 0000912057-01-006393.hdr.sgml : 20010224 ACCESSION NUMBER: 0000912057-01-006393 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAIRS & POWER GROWTH FUND INC CENTRAL INDEX KEY: 0000061628 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 416019924 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-00802 FILM NUMBER: 1551419 BUSINESS ADDRESS: STREET 1: 332 MINNESOTA ST STE W-2062 STREET 2: FIRST NATIONAL BANK BUILDING CITY: ST PAUL STATE: MN ZIP: 55101 BUSINESS PHONE: 6122228478 MAIL ADDRESS: STREET 1: FIRST NATIONAL BANK BUILDING W-2062 STREET 2: 332 MINNESOTA STREET CITY: ST PAUL STATE: MN ZIP: 55101 FORMER COMPANY: FORMER CONFORMED NAME: MAIRS & POWER FUND INC DATE OF NAME CHANGE: 19680607 N-30D 1 a2039342zn-30d.txt N-30D ------------------------ MAIRS AND POWER GROWTH FUND, INC. ------------------------ - ------------------------------------------------------------------------------- ANNUAL REPORT December 31, 2000 W-1420 First National Bank Building 332 Minnesota Street St. Paul, Minnesota 55101 651-222-8478 February 16, 2001 TO OUR SHAREHOLDERS: 2000 was a vintage year for shareholders of Mairs and Power Growth Fund. The Fund registered a return of 26.5% which compares very favorably with a negative 9.1% for the Standard & Poor's 500 Stock Index and a negative 4.8% for the Dow Jones Industrial Average. The average stock mutual fund delivered a negative 4.5% return last year, according to fund tracker Lipper, Inc. While our performance last year was impressive, we believe that longer term performance is more significant and note that according to fund tracker Wiesenberger, our ten year average annual return of 20.7% places us in the upper 10% of all domestic growth funds. FORBES magazine, in the February 5th issue, rates mutual funds based on risk-adjusted performance and cost efficiency. Just six domestic stock funds were listed as Best Buys and Mairs and Power Growth Fund ranked first in that group. BUSINESS WEEK magazine, in the January 29th issue, examines a database of 3,200 mutual funds and measures the performance of each of these funds by the amount of risk its manager took to achieve these results. These risk adjusted returns are calculated over a five year period. Only 134 funds (4.2% of the total) received the highest quality A rating. Mairs and Power Growth Fund as well as Mairs and Power Balanced Fund were on the A list. The U.S. economy displayed very rapid growth during the first half of 2000 but slowed significantly during the second half and Gross Domestic Product grew at an annual rate of only 1.4% in the final quarter. Nonetheless, G.D.P. registered a 5% growth rate for the entire year, a strong performance by any measure. The fourth quarter weakness was concentrated in the manufacturing sector, caused in part by inventory liquidation, and resulted in capacity utilization falling to the lowest level in eight years. The Federal Reserve took decisive action to counter the slowdown by cutting short term interest rates by a full percentage point in two installments in the month of January. They also expressed the intent to take further action if needed in order to prevent the economy from slipping into recession. Economists have now lowered their growth expectation for 2001 but generally believe that the economy will strengthen in the second half of the year after experiencing only minimal growth during the first half. Chairman Alan Greenspan reported to Congress on February 13th that the Fed was forecasting growth for the year of between 2% and 2 1/2%, similar to what private economists expect. His longer term view remains optimistic that the acceleration in productivity growth of the late 1990's, which enables the economy to produce goods and services more efficiently, remains intact. In 2000, productivity surged 4.3%, the best showing in 17 years. During the past five years, productivity growth averaged a strong 2.8%, double the lackluster average growth rate of 1.4% in the two decades since 1973. Rising productivity is a crucial factor in contributing to national prosperity and rising living standards. 1 During the course of 2000, four of our portfolio companies were purchased for cash. Jostens and T.S.I. were purchased by private domestic investment firms while National Computer Systems and ReliaStar were bought by European publicly held companies. All of these transactions were approved by the shareholders of the respective companies. While these cash buy-outs contributed about four percentage points to our return for the year, they also resulted in a larger than normal capital gain distribution. Our investment style emphasizes long-term holdings, which in turn characterizes us as a tax-efficient fund since we avoid burdening our taxable shareholders with large distributions. This will continue to be our practice. The buy-outs also reflect the broader point that the stocks of many small and mid-capitalization companies continue to appear undervalued and therefore become attractive either to private investors or to foreign companies that desire greater exposure to the vigorous U.S. economy. U.S. corporations performed well again in 2000. According to a BUSINESS WEEK survey of 900 companies, profits advanced 14% although they displayed notable weakness in the final quarter. We view the current economic slow-down as a pause in growth and anticipate renewed growth by mid-year as lowered interest rates provide their intended stimulus. Therefore, we expect earnings growth to resume later this year. The stock market has historically been strong in periods following rate reductions on the part of the Federal Reserve. Many sectors of the market appear moderately valued relative to long-term prospects, which supports our view that most stocks will have positive returns for the year. Fourteen months ago, my long-standing associate Bill Frels joined me as Co-manager of the Fund. Bill has 39 years of experience in investment management and for the past nine years has served as President and Portfolio Manager of the highly-rated Mairs and Power Balanced Fund. He has been integral to our successful investment process and contributed meaningfully to our strong 2000 performance. We continue to be optimistic about the long-term prospects for the U.S. economy and domestic equity markets. However, we believe that the extraordinary returns of the past five and ten year periods are unlikely to be replicated in the years ahead. Mairs and Power Growth Fund has registered an average annual return of 12.4% since its inception 42 years ago and we believe future returns should be measured against that benchmark. George A. Mairs President 2 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN FUND, S & P 500 INDEX, AND THE CONSUMER PRICE INDEX - -------------------------------------------------------------------------------- [CHART] (Dollar amounts below are in thousands.)
Year Ending 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Fund 10 14.21 15.32 17.29 18.26 27.27 34.47 44.34 48.50 51.97 65.73 S & P 10 13.05 14.05 15.47 15.68 21.56 26.51 35.37 45.52 55.10 50.07 CPI 10 10.42 10.73 11.02 11.32 11.60 11.99 12.19 12.38 12.72 13.15
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDING DECEMBER 31, 2000) - -------------------------------------------------------------------------------- 1 Year 5 Years 10 Years - -------------------------------------------------------------------------------- Mairs and Power Growth Fund +26.5% +19.2% +20.7% - --------------------------------------------------------------------------------
PAST INVESTMENT RESULTS SHOULD NOT BE TAKEN AS NECESSARILY REPRESENTATIVE OF FUTURE PERFORMANCE. 3 FINANCIAL HIGHLIGHTS (SELECTED PER SHARE DATA AND RATIOS -- FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD) - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31 2000 1999 1998 1997 1996 ------------- ------------- ------------- ------------ ------------- PER SHARE Net asset value, beginning of year $92.91 $92.68 $86.67 $69.48 $56.64 Investment operations: Net investment income 1.09 0.85 0.86(*) 1.03 0.75 Net realized and unrealized gains on investments 23.55 5.79 7.23 18.85 14.19 --------- --------- --------- --------- --------- TOTAL FROM INVESTMENT OPERATIONS 24.64 6.64 8.09 19.88 14.94 Less distributions: Dividends (from net investment income) (1.09) (0.93) (0.72) (1.00) (0.71) Distributions (from capital gains) (9.64) (5.48) (1.36) (1.69) (1.39) --------- --------- --------- --------- --------- TOTAL DISTRIBUTIONS (10.73) (6.41) (2.08) (2.69) (2.10) --------- --------- --------- --------- --------- NET ASSET VALUE, END OF YEAR $106.82 $92.91 $92.68 $86.67 $69.48 ========= ========= ========= ========= ========= TOTAL INVESTMENT RETURN 26.5% 7.2% 9.4% 28.7% 26.4% ========= ========= ========= ========= ========= NET ASSETS, END OF YEAR (000'S OMITTED) $581,668 $546,836 $580,461 $412,591 $150,162 RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets 0.78% 0.79% 0.82% 0.84% 0.89% Ratio of net investment income to average net assets 1.06% 0.83% 0.97% 0.98% 1.18% Portfolio turnover rate 15.34% 5.55% 2.04% 5.07% 3.19%
(*)Net investment income per share represents net investment income divided by the average shares outstanding throughout the period. 4 STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 2000 - --------------------------------------------------------------------------------
ASSETS Investments, at market value (cost $357,075,708) $581,119,913 Dividends and interest receivable 906,304 ------------ Total assets 582,026,217 LIABILITIES Accrued management fee 279,347 Accrued custodian and transfer agent fee 78,451 ------------ Total liabilities 357,798 NET ASSETS Equivalent to $106.82 per share on 5,445,519 shares outstanding $581,668,419 ============ NET ASSETS CONSIST OF: Capital stock $ 54,455 Additional paid-in capital 357,485,844 Accumulated undistributed net investment income 54,274 Accumulated undistributed net realized gain on investment transactions 29,641 Net unrealized appreciation of investments 224,044,205 ------------ TOTAL NET ASSETS $581,668,419 ============ CAPITAL STOCK (par value $.01 a share) Shares authorized 25,000,000 ==========
SEE ACCOMPANYING NOTES. 5 SCHEDULE OF INVESTMENTS DECEMBER 31, 2000
MARKET VALUE NUMBER OF SHARES SECURITY DESCRIPTION (NOTE 2a.) - ---------------- ------------------------------------------------ ----------------- COMMON STOCK BASIC INDUSTRIES 12.1% 718,100 BMC Industries, Inc. $3,500,738 294,000 Bemis Company, Inc. 9,867,375 520,000 Ecolab, Inc. 22,457,500 287,000 H. B. Fuller 11,323,047 452,500 The Valspar Corporation 14,561,450 170,000 Weyerhaeuser Company 8,627,500 ------------------ 70,337,610 ------------------ CAPITAL GOODS 8.8% 603,600 Donaldson Company, Inc. 16,787,625 609,850 Graco Inc. 25,232,544 1,248,100 MTS Systems Corporation 9,048,725 ------------------ 51,068,894 ------------------ CONSUMER CYCLICAL 9.2% 450,000 Deluxe Corp. 11,371,500 866,000 Target Corporation 27,928,500 395,800 The Toro Company 14,520,912 ------------------ 53,820,912 ------------------ CONSUMER STAPLE 9.4% 524,000 General Mills, Inc. 23,350,750 980,000 Hormel Foods 18,252,500 938,000 SUPERVALU Inc. 13,014,750 ------------------ 54,618,000 ------------------ FINANCIAL 18.2% 600,000 Firstar Corp. 13,950,000 436,000 St. Paul Companies, Inc. 23,680,250 660,000 TCF Financial Corporation 29,411,250 190,000 U.S. Bancorp 5,545,625 600,000 Wells Fargo & Company 33,412,500 ------------------ 105,999,625 ------------------ 6 SCHEDULE OF INVESTMENTS (CONTINUED) MARKET VALUE NUMBER OF SHARES SECURITY DESCRIPTION (NOTE 2a.) - ---------------- ------------------------------------------------ ---------------- COMMON STOCK (CONTINUED) HEALTH CARE 20.7% 282,000 Baxter International, Inc. $24,904,125 56,400 Edwards Lifesciences Corp. 1,001,100 215,000 Johnson & Johnson 22,588,438 472,000 Medtronic, Incorporated 28,497,000 498,000 Pfizer Inc. 22,908,000 335,000 St. Jude Medical, Inc. * 20,581,562 ------------------ 120,480,225 ------------------ TECHNOLOGY 13.6% 1,116,000 ADC Telecommunications Inc. * 20,227,500 570,000 Ceridian * 11,364,375 348,050 Emerson Electric Co. 27,430,691 418,750 Honeywell International Inc. 19,812,109 ------------------ 78,834,675 ------------------ DIVERSIFIED 4.4% 213,000 Minnesota Mining & Manufacturing Company 25,666,500 ------------------ TOTAL COMMON STOCKS 96.4% 560,826,441 SHORT TERM INVESTMENTS 3.5% 15,173,705 Firstar Institutional Money Market Fund 15,173,705 5,119,767 Merrill Lynch Institutional Money Market Fund 5,119,767 ------------------ TOTAL SHORT TERM INVESTMENTS 3.5% 20,293,472 ------------------ TOTAL INVESTMENTS 99.9% 581,119,913 OTHER ASSETS IN EXCESS OF LIABILITIES 0.1% 548,506 ------------------ NET ASSETS 100% $ 581,668,419 ==================
* Non-income producing SEE ACCOMPANYING NOTES. 7 STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2000 - --------------------------------------------------------------------------------
INVESTMENT INCOME Income: Dividends $ 8,993,035 Interest 473,641 --------------- TOTAL INCOME $ 9,466,676 Expenses: Investment advisory fees (NOTE 5) 3,068,403 Administrative fees 411,693 Transfer agent fees 378,556 Custodian fees 105,360 Legal and audit fees 28,360 Other fees and expenses 12,327 --------------- TOTAL EXPENSES 4,004,699 ------------- NET INVESTMENT INCOME 5,461,977 REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 4) Net realized gains on investments sold 48,190,563 Unrealized appreciation of investments 66,120,705 --------------- NET GAIN ON INVESTMENTS 114,311,268 ------------- INCREASE IN NET ASSETS FROM OPERATIONS $119,773,245 =============
SEE ACCOMPANYING NOTES. 8 STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31 2000 1999 --------------------------------- OPERATIONS Net investment income $5,461,977 $4,693,881 Net realized gains on investments sold 48,190,563 30,466,215 Unrealized appreciation of investments 66,120,705 2,767,798 --------------- ------------- INCREASE IN NET ASSETS FROM OPERATIONS 119,773,245 37,927,894 DISTRIBUTIONS TO SHAREHOLDERS From net investment income (5,457,049) (5,215,357) Short-term gain distributed as ordinary income -- (609,446) From net realized gains (48,206,243) (29,836,536) --------------- ------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS (53,663,292) (35,661,339) CAPITAL STOCK TRANSACTIONS Proceeds from shares sold 44,617,224 64,874,545 Reinvestment of distributions from net investment income and net realized gains 49,203,342 32,854,298 Cost of shares redeemed (125,098,185) (133,619,836) --------------- ------------- DECREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS (31,277,619) (35,890,993) --------------- ------------- TOTAL INCREASE (DECREASE) IN NET ASSETS 34,832,334 (33,624,438) NET ASSETS Beginning of year 546,836,085 580,460,523 --------------- ------------- End of year (including undistributed investment income of $54,274 and $49,346, respectively) $581,668,419 $546,836,085 =============== ============= CHANGES IN CAPITAL STOCK Shares sold 451,783 674,948 Shares issued for reinvested distributions 457,486 352,284 Shares redeemed (1,349,647) (1,404,167) --------------- ------------- NET DECREASE IN SHARES (440,378) (376,935) =============== =============
SEE ACCOMPANYING NOTES. 9 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2000 - -------------------------------------------------------------------------------- Note 1 -- The Fund is registered under the Investment Company Act of 1940 (as amended) as a diversified, no-load, open-end management investment company. The investment objective of the Fund is to provide shareholders with a diversified holding of common stocks which appear to offer possibilities for long-term appreciation. Note 2 -- Significant accounting polices of the Fund are as follows: (a) Security valuations for fund investments are furnished by independent pricing services that have been approved by the Board of Directors. Investments in equity securities that are traded on a national securities exchange (or reported on the NASDAQ national market system) are stated at the last quoted sales price if readily available for such securities on each business day. Other equity securities traded in the over-the-counter market and listed equity securities for which no sale was reported on that date are stated at the last quoted bid price. For securities where quotations are not readily available, or where the last quoted sale price is not considered representative of the value of the security if it were to be sold on that day, the security will be valued at fair value as determined in good faith by the adviser, Mairs and Power, Inc. (b) Security transactions are recorded on `trade date plus one', with `trade date' being the date on which securities are purchased or sold. Dividend income is recognized on the ex-dividend date and interest income is recorded on the accrual basis. Realized gains and losses are reported on an identified cost basis. (c) The Fund is a "regulated investment company" as defined in Subtitle A, Chapter 1, Subchapter M of the Internal Revenue Code, as amended. No provision has been made for federal income taxes as it is the intention of the Fund to comply with the provisions of the Internal Revenue Code applicable to investment companies and to make distributions of income and security gains sufficient to relieve it from all or substantially all income taxes. 10 NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2000 - -------------------------------------------------------------------------------- Note 3 -- Purchases and sales of investment securities, excluding short-term securities, during the year ended December 31, 2000 aggregated $77,327,281 and $160,260,032, respectively. Note 4 -- Net unrealized appreciation on investments for federal income tax purposes aggregated $224,044,205, of which $235,307,302 related to appreciated investment securities and $11,263,097 related to depreciated investment securities. Aggregate cost of investments for federal income tax purposes was $357,075,708. Note 5 -- The investment advisory fees were paid to Mairs and Power, Inc., which is owned by individuals who are directors and officers of the Fund, for its services as investment adviser. Investment advisory fees were paid to the adviser pursuant to an advisory agreement approved by the directors of the Fund. The advisory fee is computed each month at an annual rate of .60% of the net asset value of the Fund on the last valuation day of the month. Directors of the Fund not affiliated with Mairs and Power, Inc. received compensation for meetings attended totaling $81,900 in 2000. No compensation was paid to any other director or officer of the Fund. 11 REPORT OF INDEPENDENT AUDITORS - -------------------------------------------------------------------------------- To the Board of Directors and Shareholders Mairs and Power Growth Fund, Inc. We have audited the accompanying statement of assets and liabilities of Mairs and Power Growth Fund, Inc. (the Fund), including the schedule of investments, as of December 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund'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 auditing standards generally accepted in the United States. 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 and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2000, by correspondence with the custodian. 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 Mairs and Power Growth Fund, Inc. at December 31, 2000, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States. ERNST & YOUNG LLP January 26, 2001 12 SUMMARY OF FINANCIAL INFORMATION - -------------------------------------------------------------------------------- This table covers a period of generally rising common stock prices. The results shown should not be considered as a representation of the dividend income or capital gain or loss which may be realized from an investment made in the Fund today.
PER SHARE ------------------------------------------------------- DISTRIBUTIONS DIVIDENDS PERFORMANCE OF OF REALIZED FROM NET AN ASSUMED SHARES TOTAL NET NET ASSET SECURITIES INVESTMENT INVESTMENT OF DATES OUTSTANDING ASSETS VALUE GAINS INCOME $10,000* ------------- ----------- ------------ --------- ------------ ---------- -------------- Dec. 31, 1976 1,078,864 $ 13,821,528 $ 12.81 $ 0.26 $ 13,570 Dec. 31, 1977 1,057,928 $ 13,145,624 $ 12.43 $ 0.33 $ 13,525 Dec. 31, 1978 998,265 $ 13,282,487 $ 13.31 $ 0.35 $ 14,858 Dec. 31, 1979 914,635 $ 14,104,765 $ 15.42 $ 0.45 $ 17,747 Dec. 31, 1980 840,882 $ 14,540,014 $ 17.29 $ 0.55 $ 20,606 Dec. 31, 1981 861,678 $ 13,148,158 $ 15.26 $ 0.74 $ 0.60 $ 19,825 Dec. 31, 1982 850,942 $ 16,784,217 $ 19.72 $ 0.58 $ 0.50 $ 27,588 Dec. 31, 1983 881,592 $ 18,972,177 $ 21.52 $ 0.70 $ 0.48 $ 31,937 Dec. 31, 1984 872,069 $ 17,304,204 $ 19.84 $ 0.76 $ 0.46 $ 31,290 Dec. 31, 1985 856,738 $ 21,553,457 $ 25.16 $ 0.86 $ 0.46 $ 42,171 Dec. 31, 1986 893,850 $ 22,235,453 $ 24.88 $ 2.74 $ 0.40 $ 47,038 Dec. 31, 1987 914,139 $ 19,816,097 $ 21.68 $ 2.29 $ 0.48 $ 45,941 Dec. 31, 1988 929,039 $ 20,630,251 $ 22.21 $ 1.21 $ 0.41 $ 50,526 Dec. 31, 1989 866,584 $ 22,630,081 $ 26.11 $ 1.83 $ 0.43 $ 64,708 Dec. 31, 1990 867,432 $ 22,501,587 $ 25.94 $ 0.70 $ 0.42 $ 67,082 Dec. 31, 1991 904,023 $ 31,440,529 $ 34.78 $ 1.58 $ 0.39 $ 95,291 Dec. 31, 1992 956,814 $ 34,363,306 $ 35.91 $ 1.16 $ 0.40 $ 102,761 Dec. 31, 1993 1,006,285 $ 39,081,010 $ 38.84 $ 1.22 $ 0.43 $ 115,974 Dec. 31, 1994 1,064,019 $ 41,889,850 $ 39.37 $ 0.98 $ 0.65 $ 122,506 Dec. 31, 1995 1,245,325 $ 70,536,880 $ 56.64 $ 1.51 $ 0.56 $ 182,923 Dec. 31, 1996 2,161,246 $150,161,759 $ 69.48 $ 1.39 $ 0.71 $ 231,223 Dec. 31, 1997 4,760,515 $412,590,619 $ 86.67 $ 1.91 $ 0.78 $ 297,468 Dec. 31, 1998 6,262,832 $580,460,523 $ 92.68 $ 1.36 $ 0.72 $ 325,336 Dec. 31, 1999 5,885,897 $546,836,085 $ 92.91 $ 5.48 $ 0.93 $ 348,635 Dec. 31, 2000 5,445,519 $581,668,419 $106.82 $ 9.64 $ 1.09 $ 440,957
*ASSUMES THE REINVESTMENT OF ALL INCOME DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS FOR A $10,000 INVESTMENT MADE AT THE BEGINNING OF 1976. - -------------------------------------------------------------------------------- No adjustment has been made for any income tax payable by shareholders on capital gain distributions accepted in shares. This report is not to be used in connection with the offering of shares of the Fund unless accompanied or preceded by an effective Prospectus. Please call or write if you desire further information. - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS ---------------------------- THE AVERAGE ANNUAL TOTAL RETURNS FOR THE FUND (PERIOD ENDED DECEMBER 31, 2000) ARE AS FOLLOWS: 1 YEAR +26.5% 5 YEARS +19.2% 10 YEARS +20.7% THE TOTAL RETURN DATA REPRESENTS PAST PERFORMANCE, AND THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. - -------------------------------------------------------------------------------- 13 OFFICERS AND DIRECTORS George A. Mairs, III....................................President and Director William B. Frels........................................Secretary and Director Peter G. Robb......................................Vice-President and Director Lisa J. Hartzell.....................................................Treasurer Norbert J. Conzemius..................................................Director Charlton Dietz........................................................Director Donald E. Garretson...................................................Director J. Thomas Simonet.....................................................Director INVESTMENT ADVISER FOR SHAREHOLDER ACCOUNT INFORMATION AND INQUIRIES, CALL 1-800-304-7404 OR WRITE TO: Mairs and Power, Inc. W-1420 First National Bank Building (REGULAR MAIL ADDRESS) 332 Minnesota Street Saint Paul, Minnesota 55101 Mairs and Power Growth Fund c/o Firstar Mutual Fund Services, LLC 615 East Michigan Street P. O. Box 701 Milwaukee, Wisconsin 53201-0701 CUSTODIAN Firstar Bank, N.A. (OVERNIGHT OR EXPRESS MAIL ADDRESS) 615 East Michigan Street P. O. Box 701 Mairs and Power Growth Fund Milwaukee, Wisconsin 53201 c/o Firstar Mutual Fund Services, LLC 3rd Floor 615 East Michigan Street Milwaukee, Wisconsin 53202 INDEPENDENT AUDITORS Ernst & Young, LLP For Fund literature and information, you 1400 Pillsbury Center can also visit the Fund's web site at: 200 South Sixth Street Minneapolis, Minnesota 55402 www.mairsandpower.com 14 -----END PRIVACY-ENHANCED MESSAGE-----