UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-6027
KAVILCO INCORPORATED
(Exact name of registrant as specified in charter)
1000 Second Avenue, Suite 3320
Seattle, Washington
98104
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (206)624-6166
Date of reporting period: September 30, 2016
Principal Amount or Shares |
Market Value |
|||||
INVESTMENTS IN SECURITIES | ||||||
U.S. Corporate Bonds 32.7% | ||||||
American Depository Receipts - 0.8% | ||||||
Deutsche Telekom, 6.000%, due July 8, 2019 | 250,000 |
279,718 |
||||
Total American Depository Receipts: | 279,718 |
|||||
Communications - 5.8% | ||||||
Viacom, Inc., 4.625%, due May 15, 2018 | 2,000,000 |
2,097,380 |
||||
Total Communications: | 2,097,380 |
|||||
Consumer Staples - 3.2% | ||||||
Kraft Foods, Inc., 6.500%, due August 11, 2017 | 250,000 |
261,143 |
||||
McDonald’s Corp., 5.300%, due March 15, 2017 | 500,000 |
509,445 |
||||
Yum! Brands, Inc., 5.300%, due September 15, 2019 | 355,000 |
383,844 |
||||
Total Consumer Staples: | 1,154,431 |
|||||
Energy - 8.7% | ||||||
Hess Corp., 8.125%, due February 15, 2019 | 199,000 |
228,780 |
||||
Kinder Morgan Energy Partners, 5.950%, due February 15, 2018 | 460,000 |
483,754 |
||||
Transocean, Inc., 7.375%, due April 15, 2018 | 1,350,000 |
1,370,250 |
||||
XTO Energy, Inc., 6.250%, August 1, 2017 | 1,000,000 |
1,043,560 |
||||
Total Energy: | 3,126,345 |
|||||
Financials 0.6% | ||||||
General Electric Capital Corp., 5.625%, due September 15, 2017 | 215,000 |
224,183 |
||||
Total Financials: | 224,183 |
|||||
Industrials - 5.9% | ||||||
E.I. Du Pont de Nemour, 5.250%, due December 15, 2016 | 1,519,000 |
1,530,362 |
||||
International Paper, 9.375%, due May 15, 2019 | 500,000 |
594,415 |
||||
Total Industrials: | 2,124,777 |
|||||
Information Technology 1.1% | ||||||
Adobe Systems, Inc., 4.750%, due February 1, 2020 | 100,000 |
109,998 |
||||
Oracle Corp., 5.000%, due July 08, 2019 | 250,000 |
274,425 |
||||
Total Information Technology: | 384,423 |
|||||
Master Limited Partnership 3.8% | ||||||
Plains All American Pipeline, 6.125%, due January 15, 2017 | 1,345,000 |
1,361,086 |
||||
Total Master Limited Partnership: | 1,361,086 |
|||||
Transportation 1.6% | ||||||
FedEx Corp., 8.000%, due January 15, 2019 | 500,000 |
573,240 |
||||
Total Transportation: | 573,240 |
|||||
Utilities 1.3% | ||||||
Metropolitan Edison, 7.700%, due January 15, 2019 | 250,000 |
280,750 |
||||
Southern Electric Power, 5.550%, due January 15, 2017 | 174,000 |
176,055 |
||||
Total Utilities: | 456,805 |
|||||
Total - US Corporate Bonds (Cost $11,333,185) |
$11,782,387 |
|||||
U.S. Common Stock 54.9% | ||||||
American Depository Receipts 0.7% | ||||||
Atlantic Power Corp. | 2,700 |
6,669 |
||||
Penn West Petroleum, Ltd. | 3,400 |
6,154 |
||||
Royal Dutch Shell | 2,800 |
147,924 |
||||
Sanofi-Aventis | 600 |
22,914 |
||||
Seadrill, Ltd. | 1,200 |
2,844 |
||||
Silver Wheaton Corp. | 700 |
18,921 |
||||
Unilever | 800 |
37,920 |
||||
Total American Depository Receipts: | 243,346 |
|||||
Consumer Staples 2.2% | ||||||
Coca Cola Company | 6,700 |
283,544 |
||||
Kraft Heinz Company, The | 4,900 |
438,599 |
||||
Mondelez International, Inc. | 1,500 |
65,850 |
||||
Total Consumer Staples: | 787,993 |
|||||
Energy 2.4% | ||||||
Chevron Corp. | 1,800 |
185,256 |
||||
Diamond Offshore Drilling, Inc. | 1,515 |
26,679 |
||||
Hollyfrontier Corp | 3,400 |
83,300 |
||||
Kinder Morgan, Inc. | 14,119 |
326,572 |
||||
Linn Energy | 5,890 |
265 |
||||
Spectra Energy Corp. | 5,300 |
226,575 |
||||
Total Energy: | 848,648 |
|||||
Financials 13.2% | ||||||
AvalonBay Communities, Inc. | 790 |
150,494 |
||||
Care Capital Properties, Inc. | 900 |
25,650 |
||||
Digital Realty Trust, Inc. | 1,500 |
145,680 |
||||
EPR Properties | 1,900 |
149,606 |
||||
HCP, Inc. | 4,600 |
174,570 |
||||
Healthcare Realty Trust, Inc. | 2,300 |
78,338 |
||||
Highwoods Properties, Inc. | 1,300 |
67,756 |
||||
Hospitality Properties Trust | 13,400 |
398,248 |
||||
Liberty Properties Trust | 8,740 |
352,659 |
||||
LTC Properties, Inc. | 4,830 |
251,112 |
||||
Mack Cali Rlty Corp. | 5,600 |
152,432 |
||||
National Retail Properties, Inc. | 1,470 |
74,750 |
||||
Omega Healthcare Investors, Inc. | 5,831 |
206,709 |
||||
Realty Income Corp. | 7,130 |
477,211 |
||||
Redwood Trust, Inc. | 2,600 |
36,816 |
||||
RMR Group, Inc., The | 274 |
10,396 |
||||
Sabra Healthcare REIT, Inc. | 1,960 |
49,353 |
||||
Senior Housing Properties Trust | 10,400 |
236,184 |
||||
Stag Industrial, Inc. | 7,130 |
174,756 |
||||
Sun Communities, Inc. | 3,180 |
249,566 |
||||
Ventas, Inc. | 5,600 |
395,528 |
||||
Washington REIT | 6,600 |
205,392 |
||||
Wells Fargo & Co. | 3,840 |
170,035 |
||||
Welltower, Inc | 7,310 |
546,569 |
||||
Total Financials: | 4,769,809 |
|||||
Healthcare 0.7% | ||||||
Bristol-Myers Squibb | 1,500 |
80,880 |
||||
Eli Lilly & Co. | 2,000 |
160,520 |
||||
Total Healthcare: | 241,400 |
|||||
Industrials 0.7% | ||||||
General Electric Co. | 6,730 |
199,343 |
||||
Pitney Bowes, Inc. | 3,000 |
54,480 |
||||
Total Industrials: | 253,823 |
|||||
Information Technology 1.6% | ||||||
Cisco Systems, Inc. | 6,250 |
198,250 |
||||
Paychex, Inc. | 6,600 |
381,942 |
||||
Total Information Technology: | 580,192 |
|||||
Master Limited Partnerships 8.9% | ||||||
Amerigas Partners LP | 7,230 |
330,122 |
||||
Boardwalk Pipeline Partners LP | 10,218 |
175,341 |
||||
Breitburn Energy Partners LP | 4,700 |
294 |
||||
Buckeye Partners LP | 6,472 |
463,395 |
||||
CVR Partners LP | 4,760 |
25,228 |
||||
Enbridge Energy Partners LP | 3,700 |
94,091 |
||||
Energy Transfer Partners LP | 8,312 |
307,544 |
||||
Enterprise Products Partners LP | 11,200 |
309,456 |
||||
KKR and Co. LP | 2,370 |
33,796 |
||||
Magellan Midstream Partners LP | 6,200 |
438,588 |
||||
MPLX LP | 2,180 |
73,815 |
||||
Nustar Energy LP | 4,100 |
203,278 |
||||
Plains All American Pipeline LP | 3,914 |
122,939 |
||||
Spectra Energy Partners LP | 4,466 |
195,120 |
||||
Suburban Propane Partners LP | 3,200 |
106,560 |
||||
TC Pipelines LP | 2,300 |
131,169 |
||||
Terra Nitrogen Company LP | 225 |
25,274 |
||||
Williams Partners LP | 4,541 |
168,880 |
||||
Total Master Limited Partnerships: | 3,204,890 |
|||||
Mutual Funds 1.1% | ||||||
Blackrock Global Floating Rate Income Fund | 3,179 |
42,980 |
||||
John Hancock Preferred Income Fund | 3,284 |
72,726 |
||||
iShares Investment Grade Corp. Bonds | 640 |
78,835 |
||||
iShares US Preferred ETF | 2,516 |
99,382 |
||||
SPDR Barclays High Yield Bond ETF | 2,600 |
95,472 |
||||
Total Mutual Funds: | 390,395 |
|||||
Telecommunication Services 8.1% | ||||||
AT & T, Inc. | 29,570 |
1,200,838 |
||||
Centurylink, Inc. | 6,900 |
189,267 |
||||
Consolidated Communications | 9,600 |
242,304 |
||||
Frontier Communications Corp. | 192 |
799 |
||||
Verizon Communications | 24,540 |
1,275,589 |
||||
Total Telecommunication Services: | 2,908,797 |
|||||
Utilities 15.4% | ||||||
Aliant Energy Corp. | 7,400 |
283,494 |
||||
American Electric Power, Inc. | 6,740 |
432,775 |
||||
Atmos Energy Corp. | 1,500 |
111,705 |
||||
Avista Corp. | 2,000 |
83,580 |
||||
Centerpoint Energy, Inc. | 13,000 |
301,990 |
||||
Consolidated Edison | 4,300 |
323,790 |
||||
Dominion Res, Inc. | 8,300 |
616,441 |
||||
Duke Energy Corp. | 7,795 |
623,912 |
||||
Entergy Corp. | 2,870 |
220,215 |
||||
Eversource Energy | 4,981 |
269,871 |
||||
Exelon Corp. | 1,400 |
46,606 |
||||
Firstenergy Corp. | 1,255 |
41,515 |
||||
NextEra Energy | 1,000 |
122,320 |
||||
ONEOK, Inc. | 1,200 |
61,668 |
||||
Piedmont Natural Gas Company, Inc. | 2,700 |
162,108 |
||||
PPL Corp. | 4,945 |
170,949 |
||||
Public Service Enterprise Group, Inc. | 5,500 |
230,285 |
||||
Scana Corp. | 700 |
50,659 |
||||
Southern Company | 12,530 |
642,789 |
||||
Talen Energy Corp. | 617 |
8,545 |
||||
WEC Energy Group, Inc. | 5,900 |
353,292 |
||||
Xcel Energy, Inc. | 9,540 |
392,476 |
||||
Total Utilities: | 5,550,985 |
|||||
Total US Common Stock (Cost $18,394,466) |
19,780,276 |
|||||
Cash Equivalents 12.4% | ||||||
Total Cash Equivalents (Cost $4,486,033) |
$4,486,033 |
|||||
TOTAL INVESTMENT IN SECURITIES (Cost $34,213,684) |
$36,048,696 |
FINANCIAL ACCOUNTING STANDARDS NO. 157 |
The Company adopted the provisions of the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”), effective January 1, 2008. In accordance with FAS 157, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FAS 157 also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data from sources independent of the Company. Unobservable inputs reflect the Company’s own assumption about the assumptions that market participants would use in pricing the asset or liability developed on the best information available in the circumstance.
The fair value hierarchy is categorized into three levels based on the inputs as follows
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
Level 2 - Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment spreads, credit risk, yield curves, default rates and similar data.
Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Company's own assumptions about the assumption a market participant would use in valuing the asset or liability, and would be based on the best information available.
The following table presents information about the Company’s assets measured at fair market value as of September 30, 2016:
Investments in Securities |
Level 1 |
|
Level 2 |
|
Level 3 |
Balance |
US Corporate Bonds |
11,782,387 |
11,782,387 |
||||
US Common Stock |
19,780,276 |
19,780,276 |
||||
Cash Equivalents |
4,486,033 |
4,486,033 |
||||
TOTALS |
|
|
|
|
|
$36,048,696 |
ITEM 2. | CONTROLS AND PROCEDURES. |
(a) The registrants President and Chief Financial Officer have concluded that the registrants disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.
(b) There were no changes in the registrants internal controls over financial reporting that occurred during the fiscal quarter of the period that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
ITEM 3. | EXHIBITS. |
The following exhibits are attached to this Form N-Q:
EXHIBIT NO. |
DESCRIPTION OF EXHIBIT | |
3 (a) (1) |
Certification of President | |
3 (a) (2) |
Certification of Chief Financial Officer |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): Kavilco Incorporated | ||
By: |
/s/ Louis L. Jones, Sr. | |
Louis L. Jones, Sr. | ||
President |
Date: May 26, 2016
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: |
/s/ Scott Burns | |
Scott Burns | ||
Chief Financial Officer | ||
Date: May 26, 2016 |
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MRV!BKJ0)<0-=Z;.MQ"J[GVKM9.GWE/(Z@;N5)X!- Exhibit 3 (a) (1) CERTIFICATIONS I, Louis L. Jones, Sr., certify that: 1. I have reviewed this report on Form N-Q of Kavilco Incorporated; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of
investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrants internal control over financial reporting; and 5. The registrants other certifying officer and I have disclosed to the registrants auditors and the registrant's board of directors acting as the audit committee (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrants internal control over financial reporting. /s/ Louis L. Jones, Sr. Louis L Jones, Sr. President Date: November 22, 2016
Exhibit 3 (a) (2) CERTIFICATIONS I, Scott Burns, certify that: 1. I have reviewed this report on Form N-Q of Kavilco Incorporated; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of
investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrants internal control over financial reporting; and 5. The registrants other certifying officer and I have disclosed to the registrants auditors and the registrant's board of directors acting as the audit committee (or persons performing the equivalent functions): (a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report
financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrants internal control over financial reporting. /s/ Scott Burns Scott Burns Chief Financial Officer Date: May 24, 2016?L_\ [65OH.D^)/AG9>"OB'-XI^'Z:O?:C;V_VL?;
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