-----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, NfoU1zG8mAJj9nH+UYyVsqtpBN1EckcSKnYr08XNUfRXpwQ2GwKtEBcsJecQxqDH i60sqffKJKzujjBB/e0ehw== 0000935069-04-001666.txt : 20041021 0000935069-04-001666.hdr.sgml : 20041021 20041021144201 ACCESSION NUMBER: 0000935069-04-001666 CONFORMED SUBMISSION TYPE: N-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040831 FILED AS OF DATE: 20041021 DATE AS OF CHANGE: 20041021 EFFECTIVENESS DATE: 20041021 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREFERRED INCOME FUND INC CENTRAL INDEX KEY: 0000868578 IRS NUMBER: 954305694 STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-Q SEC ACT: 1940 Act SEC FILE NUMBER: 811-06179 FILM NUMBER: 041089469 BUSINESS ADDRESS: STREET 1: 301 E COLORADO BLVD STE 720 STREET 2: C/O FLAHERTY & CRUMRINE INC CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 8187957300 MAIL ADDRESS: STREET 1: 800 SCUDDERS MILL RD CITY: PLAINSBORO STATE: NH ZIP: 08536 N-Q 1 pfdnq.txt PREFERRED INCOME QUARTERLY 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 811-06179 -------------------------- FLAHERTY & CRUMRINE PREFERRED INCOME FUND INCORPORATED ---------------------------------------------------------- (Exact name of registrant as specified in charter) 301 E. Colorado Boulevard, Suite 720 PASADENA, CA 91101 ---------------------------------------------------------------- (Address of principal executive offices) (Zip code) Donald F. Crumrine Flaherty & Crumrine Inc. 301 E. Colorado Boulevard, Suite 720 PASADENA, CA 91101 ---------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 626-795-7300 ------------- Date of fiscal year end: NOVEMBER 30, 2004 ------------------- Date of reporting period: AUGUST 31, 2004 ---------------- Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. SCHEDULE OF INVESTMENTS. The Schedule of Investments is attached herewith. - -------------------------------------------------------------------------------- Flaherty & Crumrine Preferred Income Fund Incorporated PORTFOLIO OF INVESTMENTS AUGUST 31, 2004 (UNAUDITED) - -----------------------------------------------------
SHARES/$ PAR VALUE - ------------ ------- PREFERRED SECURITIES -- 93.6% BANKING -- 28.4% - -------------------------------------------------------------------------------------------------------------------- ABN AMRO North America, Inc.: 3,625 6.46% Pfd., 144A*** .......................................................... $ 3,806,014* 4,000 6.59% Pfd., 144A*** .......................................................... 4,253,260* 400 BancWest Capital I, 9.50% Pfd. 12/01/30 ........................................ 10,814(1) $750,000 Barnett Capital II, 7.95% 12/01/26 Capital Security ............................ 839,580 $1,500,000 BT Preferred Capital Trust II, 7.875% 02/25/27 Capital Security ................ 1,673,865(1) Citigroup, Inc.: 128,927 5.864% Pfd., Series M ........................................................ 6,561,095* 9,876 6.213% Pfd., Series G ........................................................ 516,811* 51,500 6.231% Pfd., Series H ........................................................ 2,715,080* 31,850 6.365% Pfd., Series F ........................................................ 1,683,432* Cobank, ACB: 50,000 7.00% Pfd., 144A*** .......................................................... 2,708,250* 75,000 Adj. Rate Pfd., 144A*** ...................................................... 4,228,125* $500,000 Comerica (Imperial) Capital Trust I, 9.98% 12/31/26 Capital Security, Series B . 610,860 $2,250,000 First Hawaiian Capital I, 8.343% 07/01/27 Capital Security, Series B ........... 2,577,128(1) $1,500,000 First Union Capital II, 7.95% 11/15/29 Capital Security ........................ 1,830,900 $906,000 First Union Institutional Capital I, 8.04% 12/01/26 Capital Security ........... 1,016,156 $1,820,000 First Union Institutional Capital II, 7.85% 01/01/27 Capital Security .......... 2,020,500 $7,820,000 GreenPoint Capital Trust I, 9.10% 06/01/27 Capital Security .................... 9,025,961 34,200 HSBC USA, Inc., $2.8575 Pfd. ................................................... 1,771,218* J.P. Morgan Chase & Co.: 37,500 6.625% Pfd., Series H ........................................................ 1,999,875* 147,775 Series A, Adj. Rate Pfd. ..................................................... 13,595,300* $270,000 Keycorp Institutional Capital B, 8.25% 12/15/26 Capital Security ............... 304,241 $674,000 NB Capital Trust II, 7.83% 12/15/26 Capital Security ........................... 749,549 16,500 Regions Financial Trust I, 8.00% Pfd. .......................................... 447,810 $2,635,000 Republic New York Capital II, 7.53% 12/04/26 Capital Security .................. 2,875,655(1) 7,500 Wachovia Preferred Funding, 7.25% Pfd. Series A ................................ 207,825 - ------------------------------------------------------------------------------------------------------------------- 68,029,304 ---------------- FINANCIAL SERVICES -- 10.8% - -------------------------------------------------------------------------------------------------------------------- The Bear Stearns Companies Inc.: 63,100 5.49% Pfd., Series G ......................................................... 3,018,704* 62,540 5.72% Pfd., Series F ......................................................... 3,152,328* 6,975 Freddie Mac, 5.00% Pfd., Series F .............................................. 310,841*
4 - -------------------------------------------------------------------------------- Flaherty & Crumrine Preferred Income Fund Incorporated PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2004 (UNAUDITED) ------------------------------------------------------
SHARES/$ PAR VALUE - ------------ ------- PREFERRED SECURITIES -- 93.6% FINANCIAL SERVICES -- (CONTINUED) - -------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc.: 85,400 5.67% Pfd., Series D ......................................................... $ 4,130,371* 154,475 5.94% Pfd., Series C ......................................................... 7,696,717* 20,000 6.50% Pfd., Series F ......................................................... 521,300* 123,805 SLM Corporation, 6.97% Pfd., Series A .......................................... 6,950,413* - ------------------------------------------------------------------------------------------------------------------- 25,780,674 ---------------- INSURANCE -- 7.8% - -------------------------------------------------------------------------------------------------------------------- 21,000 Everest Re Capital Trust II, 6.20% Pfd. Series B ............................... 500,745(1) $5,150,000 MMI Capital Trust I, 7.625% 12/15/27 Capital Security, Series B ................ 5,584,351 18 Premium Assets, Series A, Zurich RegCaPS Variable Inverse Pfd., Pvt. ........... 1,996,798* $4,000,000 Provident Financing Trust I, 7.405% 03/15/38 Capital Security .................. 3,584,280 7,000 St. Paul Capital Trust I, 7.60% Pfd. ........................................... 185,150 Zurich RegCaPS Funding Trust: 4,250 6.01% Pfd., 144A*** .......................................................... 4,315,875* 2,450 6.58% Pfd., Pvt., 144A*** .................................................... 2,538,519* - ------------------------------------------------------------------------------------------------------------------- 18,705,718 ---------------- UTILITIES -- 40.3% - -------------------------------------------------------------------------------------------------------------------- Alabama Power Company: 300 4.52% Pfd. ................................................................... 26,463* 5,734 4.72% Pfd. ................................................................... 528,187* 34,100 5.20% Pfd. ................................................................... 825,902* 275,000 5.30% Pfd. ................................................................... 6,635,750* 2,049 Appalachian Power Company, 5.92% Sinking Fund Pfd. ............................. 206,047* 26,125 Avista Corporation, $6.95 Sinking Fund Pfd., Series K .......................... 2,618,247* 10,000 Baltimore Gas & Electric Company, 6.70% Pfd., Series 1993 ...................... 1,047,800* 10,100 Boston Edison Company, 4.78% Pfd. .............................................. 952,733* Central Hudson Gas & Electric Corporation: 5,000 4.35% Pfd., Series D, Pvt. ................................................... 403,625* 900 4.96% Pfd., Series E, Pvt. ................................................... 82,102* 10,000 Central Illinois Light Company, 4.64% Pfd. ..................................... 898,550* 11,000 Central Illinois Public Service Corporation, 4.90% Pfd. ........................ 1,043,020* 22,239 Central Vermont Public Service Corporation, 8.30% Pvt. Sinking Fund Pfd. ....... 2,314,302* Connecticut Light & Power Company: 700 4.50% Pfd., Pvt. ............................................................. 26,226* 9,300 5.28% Pfd. ................................................................... 445,610* 1,905 6.56% Pfd., Series 1968 ...................................................... 98,698* 15,778 $3.24 Pfd. ................................................................... 825,663* 2,100 Consolidated Edison Company of New York, 4.65% Pfd., Series C .................. 193,526*
5 - -------------------------------------------------------------------------------- Flaherty & Crumrine Preferred Income Fund Incorporated PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2004 (UNAUDITED) - ------------------------------------------------------
SHARES/$ PAR VALUE - ------------ ------- PREFERRED SECURITIES -- (CONTINUED) UTILITIES -- (CONTINUED) - -------------------------------------------------------------------------------------------------------------------- Duke Energy Corporation: 4,556 4.50% Pfd., Series C, Pvt. ................................................... $ 387,533* 26,851 6.75%, Sinking Fund Pfd, Series X ............................................ 2,791,967* 519 7.04% Pfd., Series Y ......................................................... 53,602* 30,762 7.85% Pfd., Series S ......................................................... 3,190,788* Duquesne Light Company: 7,675 4.10% Pfd. ................................................................... 266,706* 6,330 4.15% Pfd. ................................................................... 222,626* 910 4.20% Pfd. ................................................................... 32,391* 25,775 6.50% Pfd. ................................................................... 1,326,897* 5,490 $2.10 Pfd. Series A .......................................................... 195,417* 5,000 Energy East Capital Trust I, 8.25% Pfd. ........................................ 133,175 Entergy Arkansas, Inc.: 5,407 7.32% Pfd. ................................................................... 564,896* 11,350 7.40% Pfd. ................................................................... 1,181,819* 5,030 7.80% Pfd. ................................................................... 526,515* 3,822 7.88% Pfd. ................................................................... 399,189* 30,266 $1.96 Pfd. ................................................................... 757,407* 4,555 Entergy Gulf States, Inc., 7.56% Pfd. .......................................... 464,132* Entergy Louisiana, Inc.: 260 7.84% Pfd. ................................................................... 27,208* 106,138 8.00% Pfd., Series 92 ........................................................ 2,678,923* 8,600 Entergy Mississippi, Inc., 7.44% Pfd. .......................................... 891,863* 10,800 Enterprise Capital Trust I, 7.44% Pfd., Series A ............................... 272,106 Florida Power Company: 17,769 4.58% Pfd. ................................................................... 1,541,283* 5,157 4.60% Pfd. ................................................................... 447,112* 18,535 4.75% Pfd. ................................................................... 1,659,346* 170 Florida Power & Light Company, 4.50% Pfd., Series A, Pvt. ...................... 15,262* 50,000 Georgia Power Capital Trust V, 7.125% Pfd. ..................................... 1,345,500 2,010 Great Plains Energy, Inc., 4.50% Pfd. .......................................... 157,021* 55,000 HECO Capital Trust III, 6.50% Pfd. ............................................. 1,406,350 $3,500,000 Houston Light & Power, Capital Trust II, 8.257%, 02/01/37 Capital Security ..... 3,695,860 2,717 Idaho Power Company, 7.68% Pfd., Series 1 ...................................... 281,019* 8,000 Indiana Michigan Power Company, 6.875% Sinking Fund Pfd. ....................... 797,320* 32,650 Indianapolis Power & Light Company, 5.65% Pfd. ................................. 2,952,376* 384,000 Interstate Power & Light Company, 8.375% Pfd., Series B ........................ 12,226,560* 14,250 Narragansett Electric Company, 4.64% Pfd. ...................................... 630,491*
6 - -------------------------------------------------------------------------------- Flaherty & Crumrine Preferred Income Fund Incorporated PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2004 (UNAUDITED) ------------------------------------------------------
SHARES/$ PAR VALUE - ------------ ------- PREFERRED SECURITIES -- (CONTINUED) UTILITIES -- (CONTINUED) - -------------------------------------------------------------------------------------------------------------------- Northern Indiana Public Service Company: 3,905 7.44% Pfd. ................................................................... $ 399,521* 7,465 Series A, Adj. Rate Pfd. ..................................................... 384,634* 6,170 Ohio Edison Company, 4.44% Pfd. ................................................ 479,995* 1,724 Ohio Power Company, 5.90% Sinking Fund Pfd. .................................... 172,460* Pacific Enterprises: 27,430 $4.50 Pfd. ................................................................... 2,276,141* 10,000 $4.75 Pfd., Series 53 ........................................................ 875,900* PacifiCorp: 200 5.40% Pfd. ................................................................... 20,197* 1,225 $4.56 Pfd. ................................................................... 104,468* 14,542 $4.72 Pfd. ................................................................... 1,283,695* 14,388 $7.48 Sinking Fund Pfd. ...................................................... 1,505,848* 5,000 PECO Energy Company, $4.40 Pfd., Series C ...................................... 412,700* 790 Pennsylvania Power Company, 7.75% Pfd. ......................................... 80,256* 11,194 Portland General Electric, 7.75% Sinking Fund Pfd. ............................. 1,163,169* 19,209 Potomac Electric Power Company, $3.40 Sinking Fund Pfd. ........................ 962,083* 5,000 PPL Electric Utilities Corporation, 6.75% Pfd. ................................. 523,125* 10,000 Public Service Company of New Mexico, 4.58% Pfd., Series 1965 .................. 761,100* 29,050 REI Trust I, 7.20% Pfd. Series C ............................................... 717,245 San Diego Gas & Electric Company: 1,200 4.40% Pfd. ................................................................... 20,490* 700 4.50% Pfd. ................................................................... 12,226* 67,000 $1.70 Pfd .................................................................... 1,751,380* 21,250 $1.7625 Sinking Fund Pfd. .................................................... 550,375* 100,000 Savannah Electric & Power Company, 6.00% Pfd. .................................. 2,709,000* South Carolina Electric & Gas Company: 25,373 5.125% Purchase Fund Pfd., Pvt. .............................................. 1,336,269* 6,703 6.00% Purchase Fund Pfd., Pvt. ............................................... 341,920* 60,000 Southern Union Company, 7.55% Pfd. ............................................. 1,641,900* $750,000 TXU Electric Capital V, 8.175% 01/30/37 Capital Security ....................... 832,931 TXU US Holdings Company: 10,000 $4.00 Pfd., Series TES ....................................................... 716,400* 5,700 $4.00 Pfd., Series TPL ....................................................... 408,348* 1,000 $4.84 Pfd. ................................................................... 86,680* Union Electric Company: 14,150 4.56% Pfd. ................................................................... 1,265,647* 4,000 $7.64 Pfd. ................................................................... 417,880* 12,500 Virginia Electric & Power Company, $7.05 Pfd. .................................. 1,291,313*
7 - -------------------------------------------------------------------------------- Flaherty & Crumrine Preferred Income Fund Incorporated PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2004 (UNAUDITED) - ------------------------------------------------------
SHARES/$ PAR VALUE - ------------ ------- PREFERRED SECURITIES -- (CONTINUED) UTILITIES -- (CONTINUED) - -------------------------------------------------------------------------------------------------------------------- Wisconsin Power & Light Company: 1,220 4.50% Pfd. ................................................................... $ 109,190* 333 4.80% Pfd. ................................................................... 31,478* 13,000 6.20% Pfd. ................................................................... 1,335,230* Xcel Energy, Inc.: 16,030 $4.08 Pfd., Series B ......................................................... 1,167,385* 26,200 $4.10 Pfd., Series C ......................................................... 1,917,316* 22,000 $4.11 Pfd., Series D ......................................................... 1,599,950* 17,750 $4.16 Pfd., Series E ......................................................... 1,318,026* 10,000 $4.56 Pfd., Series G ......................................................... 813,900* - ------------------------------------------------------------------------------------------------------------------- 96,490,882 ---------------- OIL AND GAS -- 4.2% - -------------------------------------------------------------------------------------------------------------------- 17,200 Anadarko Petroleum Corporation, 5.46% Pfd. ..................................... 1,726,536* 7,000 Apache Corporation, 5.68% Pfd., Series B ....................................... 714,525* 5,985 EOG Resources, Inc., 7.195% Pfd., Series B ..................................... 6,551,570* 10,000 Lasmo America Limited, 8.15% Pfd., 144A*** ..................................... 1,152,800* - ------------------------------------------------------------------------------------------------------------------- 10,145,431 ---------------- REAL ESTATE INVESTMENT TRUST (REIT) -- 0.4% - -------------------------------------------------------------------------------------------------------------------- 40,000 Regency Centers Corporation, 7.25% Pfd., REIT .................................. 1,011,400 - ------------------------------------------------------------------------------------------------------------------- 1,011,400 ---------------- MISCELLANEOUS INDUSTRIES -- 1.7% - -------------------------------------------------------------------------------------------------------------------- 13,600 E.I. Du Pont de Nemours and Company, $4.50 Pfd., Series B ...................... 1,176,944* 36,200 Farmland Industries, Inc., 8.00% Pfd., 144A*** ................................. --+ 33,250 Ocean Spray Cranberries, Inc., 6.25% Pfd., 144A*** ............................. 2,764,738* 26,000 Touch America Holdings, $6.875 Pfd. ............................................ --+ - ------------------------------------------------------------------------------------------------------------------- 3,941,682 ---------------- TOTAL PREFERRED SECURITIES (Cost $204,148,080) .......................................................... 224,105,091 ---------------- CORPORATE DEBT SECURITY -- 0.5% UTILITIES -- 0.5% - -------------------------------------------------------------------------------------------------------------------- 45,000 Northern States Power Company, 8.00% ........................................... 1,242,000 - ------------------------------------------------------------------------------------------------------------------- TOTAL CORPORATE DEBT SECURITY (Cost $1,107,375) ............................................................ 1,242,000 ----------------
8 - -------------------------------------------------------------------------------- Flaherty & Crumrine Preferred Income Fund Incorporated PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2004 (UNAUDITED) ------------------------------------------------------
SHARES/$ PAR VALUE - ------------ ------- COMMON STOCK AND CONVERTIBLE SECURITIES -- 4.9% INSURANCE -- 0.7% - -------------------------------------------------------------------------------------------------------------------- 50,000 UnumProvident Corporation, 8.25% Mandatory Convertible, 05/16/06 $ 1,662,750 - ------------------------------------------------------------------------------------------------------------------- 1,662,750 ---------------- UTILITIES -- 4.2% - -------------------------------------------------------------------------------------------------------------------- 107,500 Duke Energy Corporation 2,381,662* 109,500 FPL Group, Inc., 8.50%, Mandatory Convertible, Series A, 02/16/05 6,305,558 30,000 TXU Corporation, 8.75%, Mandatory Convertible, 11/16/05 1,371,150 - ------------------------------------------------------------------------------------------------------------------- 10,058,370 ---------------- TOTAL COMMON STOCK AND CONVERTIBLE SECURITIES (Cost $11,120,311) 11,721,120 ---------------- OPTION CONTRACTS -- 0.1% 1,450 October Put Options on December U.S. Treasury Bond Futures, Expiring 9/25/04 146,875+ - ------------------------------------------------------------------------------------------------------------------- TOTAL OPTION CONTRACTS (Cost $1,152,956) 146,875 ----------------
9 - -------------------------------------------------------------------------------- Flaherty & Crumrine Preferred Income Fund Incorporated PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2004 (UNAUDITED) - ------------------------------------------------------
SHARES/$ PAR VALUE - ------------ ------- MONEY MARKET FUND -- 0.6% 1,557,423 BlackRock Provident Institutional, TempFund .................................... $ 1,557,423 - ------------------------------------------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (Cost $1,557,423) ............................................................ 1,557,423 ---------------- TOTAL INVESTMENTS (Cost $219,086,145**) ........................................... 99.7% 238,772,509 OTHER ASSETS AND LIABILITIES (Net) ................................................ 0.3% 727,158 --------- ---------------- Total Net Assets Available to Common and Preferred Stock .......................... 100.0%++ $ 239,499,667 --------- ---------------- MONEY MARKET CUMULATIVE PREFERRED STOCK(TM)(MMP(R)) REDEMPTION VALUE ......................... (80,000,000) ACCUMULATED UNDECLARED DISTRIBUTIONS TO MMP(R) ............................................... (156,298) ---------------- TOTAL NET ASSETS AVAILABLE TO COMMON STOCK ................................................... $ 159,343,369 ================ - ----------------------------- * Securities eligible for the Dividends Received Deduction and distributing Qualified Dividend Income. ** Aggregate cost of securities held. *** Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional buyers. (1) Foreign issuer. + Non-income producing. ++ The percentage shown for each investment category is the total value of that category as a percentage of net assets available to Common and Preferred Stock. ABBREVIATIONS: REIT -- Real Estate Investment Trust PFD. -- Preferred Securities PVT. -- Private Placement Securities Capital Securities are treated as debt instruments for financial statement purposes and the amounts shown in the Shares/$ Par column are dollar amounts of par value.
10 ITEM 2. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 3. EXHIBITS. Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. 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) FLAHERTY & CRUMRINE PREFERRED INCOME FUND INCORPORATED --------------------------------------------------------------- By (Signature and Title)* /S/ DONALD F. CRUMRINE -------------------------------------------------- Donald F. Crumrine, Director, Chairman of the Board and Chief Executive Officer (principal executive officer) Date OCTOBER 8, 2004 ----------------------------------------------------------------------- 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 (Signature and Title)* /S/ DONALD F. CRUMRINE -------------------------------------------------- Donald F. Crumrine, Director, Chairman of the Board and Chief Executive Officer (principal executive officer) Date OCTOBER 8, 2004 ----------------------------------------------------------------------- By (Signature and Title)* /S/ R. ERIC CHADWICK -------------------------------------------------- R. Eric Chadwick, Chief Financial Officer, Treasurer, Vice President and Secretary (principal financial officer) Date OCTOBER 8, 2004 ----------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 2 cert302.txt SECTION 302 CERTIFICATIONS CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Donald F. Crumrine, certify that: 1. I have reviewed this report on Form N-Q of Flaherty & Crumrine Preferred Income Fund 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(s) 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) 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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [Omitted] (c) Evaluated the effectiveness of the registrant's 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 registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (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 registrant's 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 registrant's internal control over financial reporting. Date: OCTOBER 8, 2004 /S/ DONALD F. CRUMRINE ---------------- ---------------------- Donald F. Crumrine, Director, Chairman of the Board and Chief Executive Officer (principal executive officer) CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, R. Eric Chadwick, certify that: 1. I have reviewed this report on Form N-Q of Flaherty & Crumrine Preferred Income Fund 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(s) 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) 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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. [Omitted] c. Evaluated the effectiveness of the registrant's 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 registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (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 registrant's 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 registrant's internal control over financial reporting. Date: OCTOBER 8, 2004 /S/ R. ERIC CHADWICK --------------- -------------------- R. Eric Chadwick, Chief Financial Officer, Treasurer, Vice President and Secretary (principal financial officer) -----END PRIVACY-ENHANCED MESSAGE-----