N-CSR 1 ncsr.txt SEMI-ANNUAL REPORT TO SHAREHOLDERS CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-6027 KAVILCO INCORPORATED (Exact name of registrant as specified in charter) 600 UNIVERSITY STREET, SUITE 3010 SEATTLE, WASHINGTON 98101-1129 (Address of Principal executive offices) (Zip Code) Registrant's telephone number, including area code: (206) 624-6166 Date of fiscal year end: December 31 Date of reporting period: January 1, 2003 - June 30, 2003 ITEM 1. EXERPT FROM NEWSLETTER TO SHAREHOLDERS REGARDING FINANCIAL STATEMENTS KAVILCO INCORPORATED
KAVILCO INCORPORATED SCHEDULE OF INVESTMENTS For the six months ended June 30, 2003 (Unaudited) --------------------------------------------------- Principal amount/shares Value Investments in securities - 72.8% of net assets U.S. Government Securities - 18.7% U.S. Treasury Notes, 7.250% due August 15, 2004 5,000,000 $5,346,090 Federal National Mortgage Association, 6.210% due November 7, 2007 1,000,000 1,154,376 Federal National Mortgage Association, 6.150% due December 10, 2007 1,000,000 1,154,056 ------------ Total U.S. Government Securities (cost $6,871,504) 7,654,522 ------------ Corporate Obligations - 53.8% Auto and truck - 4.5% Ford Motor Company, 6.625% due February 15, 2028 1,000,000 851,442 General Motors Corp., 7.70% due April 15, 2016 1,000,000 1,026,001 Banking - 5.5% Chase Manhattan Corp., 6.50% due January 15, 2009 2,000,000 1,113,003 Chemical Bank Corp., 7.875% due July 15, 2006 1,000,000 1,152,059 Beverage (soft drink) - 2.2% Coca-Cola Enterprises, 8.50% due February 1, 2012 700,000 911,344 Diversified financial services - 3% General Electric Capital Corp., 8.50% due July 24, 1,000,000 1,240,963 2008 Electric utility - 5.6% Nisource Financial Corp., 7.50% due November 15, 2003 1,000,000 1,020,000 Northern State Power, 6.50%, due March 1, 2028 1,000,000 1,073,470 Potomac Electric Power, 6.50% due March 15, 2008 190,000 215,141 Entertainment - 0.7% Walt Disney Co., 5.80% due October 27, 2008 290,000 314,218 Finance - auto loans - 2.1% General Motors Acceptance Corp., 6.625% due October 15, 2005 827,000 877,642 Financial Services - 2.5% Marsh & McLennan Co. Inc., 6.625% due June 15, 2004 1,000,000 1,050,202 Food Processing - 6.0% Heinz Corp., 6.00% due March 15, 2008 229,000 260,225 Hershey Foods Corp., 6.95% due August 15, 2012 1,000,000 1,196,376 Unilever Cap Corp., 6.75% due August 1, 2003 1,000,000 1,018,020 Petroleum (integrated) - 2.5% Texaco Capital Inc., 5.70% due December 1, 2008 975,000 1,058,352 Retail store - 3.2% Dayton Hudson, 8.60% due January 15, 2012 100,000 131,954 Wal-Mart Stores, 6.875% due August 10, 2009 1,000,000 1,198,710 Securities brokerage - 8.9% Bear Stearns Co. Inc., 6.150% due March 2, 2004 172,000 177,576 Bear Stearns Co. Inc., 7.625% due December 7, 2009 1,000,000 1,222,837 Merrill Lynch & Co., 6.375% due October 15, 2008 1,000,000 1,155,024 Paine Webber Group, Inc. 8.875% due March 15, 2005 1,000,000 1,111,324 Telecommunication services - 6.4% GTE Corp., 6.460% due April 15, 2008 500,000 572,298 Pacific Bell, 6.125% due February 15, 2008 1,000,000 1,127,025 U.S. West Communications, Inc., 7.50% due June 15, 1,000,000 930,000 2023 ------------ Total Corporate Obligations (cost $19,701,710) 22,005,206 ------------ Common Stock - 0.3% of net assets Technology - 0.3% Microsoft Corp. 2,720 139,482 ------------ Total common stock (cost $50,277) 139,482 ------------ Total investments in securities (identified cost $26,623,491) TOTAL PORTFOLIO $29,799,210 ============ See accompanying notes to the Financial Statements
STATEMENT OF CHANGES IN NET ASSETS For the six months ended June 30, 2003 (Unaudited) --------------------------------------------------- Increase in net assets Operations Net investment income $646,841 Net other income 19,245 Realized gain on securities 189,837 Net increase (decrease) in unrealized appreciation on investments (Note #1) 691,784 ------------ Net increase in net assets from operations 1,547,707 Dividends to shareholders (312,000) ------------ Total increase in net assets 1,235,707 Net assets Beginning of period 39,723,270 ------------ Six months ended June 30, 2003 $40,958,977 ============ See accompanying notes to the Financial Statements
STATEMENT OF OPERATIONS For the six months ended June 30, 2003 (Unaudited) --------------------------------------------------- Investment income Income Interest and Dividend $1,011,215 Net amortization of premiums 5,009 ------------ Total Income 1,016,224 Expenses Salaries and benefits 130,352 Legal and accounting services 14,913 Directors' compensation and expenses 115,755 Insurance expense 30,226 General and administrative 78,137 ------------ Total expenses 369,383 ------------ Investment income, net 646,841 ------------ Realized and unrealized net gain on investments Net realized gain on securities 189,837 Increase (decrease) in net unrealized gain on investments (Note #1) 691,784 ------------ Net gain on investments 881,621 ------------ Operating income 1,528,462 Other income 19,245 Net increase (decrease) in net assets resulting from operations $1,547,707 ============ See accompanying notes to the Financial Statements
STATEMENT OF ASSETS AND LIABILITIES For the six months ended June 30, 2003 (Unaudited) --------------------------------------------------- Assets Securities, at value - Identified cost of $29,799,210 $26,623,492 Real Estate at fair value 3,588,815 Cash 7,006,256 Interest receivable 527,724 Prepaid expenses and other assets 29,778 Premises and equipment (Net of depreciation) 7,333 ------------ Total Asset 40,959,116 ------------ Liabilities Accounts payable and accrued expenses 139 ------------ Total Liabilities 139 ------------ Net Assets (12,000 shares outstanding) $40,958,977 ============ Net asset value per outstanding share ($40,958,977 divided by 12,000 shares outstanding) $3,413.25 See accompanying notes to the Financial Statements
ITEM 2. CODE OF ETHICS Not Applicable (disclosure required in Annual Report on N-CSR only). ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT Not Applicable (disclosure required in Annual Report on N-CSR only). ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES Not Applicable (disclosure required in Annual Report on N-CSR only). ITEM 5-6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES (a) The registrant's President and Chief Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2 under the Investment Company Act of 1940) are effective in design and operation and are sufficient to form the basis of the certifications required, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report. (b) There were no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 10. - EXHIBITS (a) Not Applicable (b)(1) Filed as Exhibit (b)(2) Filed as Exhibit SIGNATURES 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 Kavilco Incorporated and in the capacities and on the dates indicated. By /s/Louis A. Thompson Louis A. Thompson Chief Executive Officer August 8, 2003 By /s/Scott Burns Scott Burns Chief Financial Officer August 8, 2003